Good morning. My name is David, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the TDS and UScellular's Second Quarter 2023 Operating Results Call. Today's conference is being recorded. [Operator Instructions]. Colleen Thompson, Vice President of Corporate Relations, you may begin your conference.

Good morning, and thank you for joining us. We want to make you all aware of the presentation we have prepared to accompany our comments this morning, which you can find on the Investor Relations sections of the TDS and UScellular websites. With me today and offering prepared comments, are from TDS Vicki Villacrez, Executive Vice President and Chief Financial Officer; from UScellular, LT Therivel, President and Chief Executive Officer; Doug Chambers, Executive Vice President, Chief Financial Officer and Treasurer; Eric Jagher, Senior Vice President and Chief Marketing Officer; Austin Summerford, Chief of Strategy Partnerships and Towers; and from TDS Telecom, Michelle Brukwicki, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and UScellular Investor Relations website. Please see the websites for slides referred to on this call, including non-GAAP reconciliations. We provide guidance for both adjusted operating income before depreciation and amortization, or OIBDA, and adjusted earnings before interest, taxes, depreciation and amortization or EBITDA to highlight the contributions of UScellular's wireless partnerships. TDS and UScellular filed their SEC Forms 8-K, including the press releases and our 10-Qs earlier this morning. As shown on Slide 2, the information set forth in the presentation and discussed during this call contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the safe harbor paragraphs in our press releases and the extended version included in our SEC filings. I will now turn the call over to Vicki Villacrez. Vicki?

All right. Thank you, Colleen, and good morning, everyone. Before we get into the details for the quarter, I want to take a moment to acknowledge this morning's announcement that the Board of Directors of TDS and UScellular have each decided to initiate a process to explore strategic alternatives for UScellular. The comprehensive process will explore a range of strategic alternatives focused on the best interest of shareholders. Both TDS and the independent directors of UScellular have retained financial and legal advisers in connection with the review. There is no deadline or definitive timetable set for completion of the strategic review, and there can be no assurance regarding the results or outcome of this review. TDS and UScellular do not intend to comment further on the strategic review process, and we'll make further announcements as appropriate. We do not plan to answer any questions regarding the review process on this call today. Let me emphasize that we all remain committed to executing the strategic priorities that we set forth at the beginning of the year, with LT, Doug and the rest of the team and Michelle will speak to next. With that, let's get into the details of the quarter. As you saw from our press release, we're halfway through the year, we continue to execute on our multiyear strategy, while focusing intensely on cost containment. UScellular has begun deploying mid-band 5G spectrum, and TDS Telecom is making solid progress on its fiber program and expansion into new markets. At the end of the second quarter, TDS and UScellular combined have over $1.1 billion in available sources of liquidity, including cash, revolvers, EIT and capacity on our repurchase agreement to help fund our businesses as needed. I also want to highlight that, as expected, UScellular paid down $150 million in debt during the second quarter and then paid down another $100 million in July. We continue to manage the balance sheet by keeping short-term maturities to a minimum in this higher interest rate environment. As a reminder, over 60% of our debt, including our preferred are very long-dated maturities or indefinite in the case of the preferred. Briefly on guidance, UScellular tightened most of its ranges, increased the midpoint of its adjusted EBITDA guidance and then modestly reduced its service revenue guidance. Reflecting an aggressive competitive environment. TDS Telecom due to tight cost controls increased its profitability ranges. They also reduced the midpoint of their capital expenditure guidance while still committed to its fiber service address delivery target. We have the entire organization focused on cost efficiencies, and we will carefully pace our investments in order to preserve capital and navigate the current economic environment. And now I will turn over the call to LT to update you on UScellular results. LT?

Thank you, Vicki. Good morning, everybody. If I turn to Slide 5. We remain committed to our strategic priorities that we laid out for all of you at the beginning of the year. Our top priority remains improving our subscriber trajectory. And although we were not satisfied with our postpaid gross adds in the quarter, we've been making notable strides in churn reduction and very encouraged with that improvement. For the past year, we've worked to improve our in contract rate. It's currently at 62%. That's a big factor in churn. And as a reminder, customers that are in contract are much less likely to churn than customers who are out of contract. We're also being really targeted with promotions and pacing varying campaigns in from time to time on a regional basis and allows us to focus on subscriber growth in a more fiscally disciplined way. For instance, while flat rate is being offered footprint-wide, other offers, particularly focusing on upgrades are more targeted. We're seeing steady adoption of our flat rate plans, which we have tailored to our various regions. As a reminder, while flat rate plans generate lower ARPU than traditional postpaid pricing plans, customers on these flat rate plans are generally not eligible for higher promotional discounts. In addition, about 1/3 of our flat rate customers are on the top 2 pricing tiers. If you combine the promotional benefit and the higher pricing tier selection on average, the flat rate plans have similar economics to our traditional plans over time. And notwithstanding the increasing penetration of flat rate plans, which is currently at 11%. Our postpaid ARPU is still growing year-over-year. The team is doing a really nice job of moving customers up to great stack and providing them with the enhanced value of our higher-tiered…

Thanks, LT, and good morning. As LT mentioned, our mission at UScellular is to connect people to what matters most. And that means helping us build genuine connections versus constant connections that can distract the divide. Because of this mission, we decided to adapt our brand strategy by taking on an issue people care about. It's just one of the steps that we are taking to attempt to improve our subscriber trajectory, and I wanted to share a few of the details with you today. As context for the campaign, all people love their devices. They are struggling with their relationship with technology and 47% of Americans say they are addicted to their phones. So we position the brand to address that opportunity to create a healthy relationship with technology. We launched a new marketing campaign in the first quarter. Our first initiative was the Phones Down for 5 challenge. We asked people to take a break from their devices for 5 minutes, 5 hours or 5 days to focus on connecting what matters most. We've also launched a signature service called Us Mode, which uses functionality in the handset operating system to help people set up their devices for connection rather than distraction. The campaign has been impactful and is generating a high level of interest and engagement. We've already earned 358 million impressions to date. This is more than 3x the number of people who watch the Super Bowl. Further, LT was just on Good Morning America last week, discussing the resources we're making available to families trying to navigate this issue. Additionally, the campaign is helping to improve Net Promoter Score or NPS. NPS measures how likely a carrier's respective customers are to recommend their services. As of June 2023, our NPS is higher than the big 3 carriers in our footprint. You'll see on the slide, we've gone from fourth place to first place in likelihood to recommend by current customers. As you can see on Slide 8, the campaign is resonating. While it's still early, we are already seeing impact in both current and noncustomers. As those who are aware of our campaign scores significantly higher on several key brand dimensions and those that are not aware. For our current customers, we believe this campaign has contributed to year-over-year reductions in churn we've seen in the last 2 quarters that the campaign has been in market. For noncustomers, we believe these results are a leading indicator it will increase both familiarity and consideration of the UScellular brand and will help drive improved gross add performance as more people become aware of the campaign. Overall, we are very pleased with the early results of this campaign and we are optimistic that it will help us drive future customer growth. I will now turn the call over to Austin Summerford, who will update on towers. Austin?

Thanks, Eric, and good morning, everyone. As you all already know, UScellular is uniquely positioned as both the wireless operator and based on the number of towers we own, also the fifth largest tower company in the U.S. We've driven strong growth in our third-party tower revenue over the last few years while continuing to support UScellular's network. And I believe we have further room for growth. Including the UScellular network, our tower tenancy ratio is currently only 1.55 that's up from 1.44 just 2 years ago, and we have room for further growth before we reach a tenancy ratio in excess of 2 as we see with the large U.S. tower companies. Our towers are also well positioned geographically. About 30% of them do not have a competing tower within a 2-mile radius. Additionally, we have a well-diversified customer base spread across the states in which UScellular operates and we aren't heavily weighted towards any single carrier. And the revenues generated by this business resulted in high contribution margins as there is relatively little incremental cost to add in the co-locators equipment to one of our sites. In addition, we can offer an array of services that traditional tower companies can't, such as backhaul, power and shelter space. And while these ancillary services aren't currently large revenue generators, the ability to offer them differentiates us from the competition. Moving on to results. As you can see on Slide 10, the business delivered another strong quarter with $25 million of third-party revenue, which represents 10% growth versus the same quarter in 2022. With that said, and consistent with commentary from the publicly traded tower companies, we have seen a slowdown in new tenant and amendment activity this year. In addition, we've seen an uptick in terminations for T-Mobile as a result of their network integration efforts. The combination of these 2 factors has led to a slowdown in sequential growth and for the remainder of the year, we are expecting growth to decline from the double-digit growth we achieved this quarter. However, we have a significant backlog of applications for both new tenancies and amendments and we remain optimistic that leasing activity will pick up again in the coming quarters. I will now turn the call over to Doug, who will take you through the financials in more detail.

Thanks, Austin. Good morning. Let's start with a review of customer results on Slide 11. Postpaid handset gross additions decreased by 11,000 largely due to continued aggression in the competitive environment as well as decline in the pool of available customers. We still had postpaid net handset losses but this improved year-over-year by 2,000 as the declining gross additions was offset by improvements in voluntary churn partially as a result of more customers in contract driven by our attractive upgrade offers in the second half of 2022 and first quarter of 2023. Moving to Slide 12. Prepaid gross additions declined 6,000 and net prepaid additions decreased 4,000. In terms of gross additions, the overall pool of available customers declined year-over-year, which we believe is partially driven by competitively priced postpaid offerings, including our own flat rate plans. Now let's turn to the financial results starting on Slide 13. Total operating revenues for the second quarter decreased 7% from the prior year with service revenues declining 3%. The primary drivers of lower service revenues are declines in the subscriber base and roaming revenue. Inbound roaming revenue declined 55% due primarily to lower negotiated rates with other carriers, which also has the impact of decreasing our roaming expense. On the positive side, as LT mentioned, despite the increase in flat rate penetration of our subscriber base, we continue to see growth in ARPU as we continue to improve our plan and product offering mix as a result of customer adoption of our higher value, higher tier plans. As of the end of the quarter, 44% of our postpaid handset customers are on these higher tier plans. This helped mitigate the impact of promotional cost and service revenue and ARPU, which increased year-over-year. Equipment sales revenues decreased by 20%, mainly due to a…

Thank you, Doug, and good morning, everyone. I'm pleased to report on TDS Telecom's second quarter results and highlight that we are on track to meet the goals we laid out earlier this year. Before getting into the quarterly results, I'm excited to share that the federal A-CAM program has been extended. This is fantastic news for our company. It will provide an additional 10 years of revenue support through 2038 in return for us delivering increased speeds of 100 megabits down and 20 up to our A-CAM addresses. While important program details remain under review, we believe this is a favorable outcome for these customers and provides the fastest path for TDS Telecom to take fiber deeper into our communities. Now let's jump into our quarterly results, starting on Slide 17. Here, you can see our strategic areas of focus. We expect investments in these strategic priorities to drive profitability and improved returns over time, ultimately strengthening TDS Telecom's financial and market position. Moving to Slide 18. Let me update you on our progress towards achieving our longer-term goals. We are delivering fiber service addresses in line with our expected cadence. We deployed 41,000 marketable service addresses in the quarter, bringing our total to 66,000 this year through June. Similar to past years, we expect to see a ramp up in delivery in the back half of the year. That ramp-up started in July as we added over 20,000 addresses. We are well positioned towards hitting our goal of 175,000 service addresses for the year. Longer term, we are targeting 1.2 million marketable fiber service addresses by 2026. We ended the quarter with 648,000, so we're making good progress towards achieving that goal. We are also targeting 60% of our total service addresses to be served by fiber by…

Okay, before we open up for questions, I do want to remind everyone that our focus today is on the quarter, and we will not be taking questions related to the review of strategic alternatives. Operator, we are ready for the first question.

[Operator Instructions]. We'll take our first question from Ric Prentiss with Raymond James.

Well, I'm glad you guys are looking at the strategic alternative review. I appreciate that. My question is not about that, but related. First question. Regardless of the outcome of the strategic review, have you thought about -- any further about breaking out the tower segment as a separate stand-alone business and working a contract between tower company, as you mentioned, the fifth largest tower company and the wireless company, regardless of what the outcome is, that would seem to make kind of sense. So maybe the first question is, outside of the strategic review, any updated thoughts on creating a tower segment with anchor rent.

This is LT. So thank you for the question. The way that we're approaching this right now is we -- as you can tell from both my comments as well as Austin's comments, we see a lot of value in that tower business. Our co-location rate is below that of the major providers. We see a lot of long-term growth in that asset even though we have seen a bit of a slowdown here more recently. We do plan over time to share some more information on that segment as we go. So for example, you heard a little bit of new information from Austin today around the tower business. The specific question of carving it out or treating it as a separate business, that's something that we're evaluating. We're not in a position to comment on that today but we do plan on providing incremental details about the business over time. Hopefully, that somewhat answers your question, even if it doesn't fully answer it.

Right. I know it was dodging that line there about asking about the strategic review, but I thought it was a fair way.

It was very elegant. I thought it was extremely elegant.

Second question, obviously, gross adds, it's been a tough gross add environment out there for the industry. Any update as far as what you saw in July as far as churn and gross adds, particularly on postpaid phones.

Yes, Ric. We can't comment fully on Q3. I'd say we've seen a fairly similar trajectory in July that we saw in Q2. So no drastic changes so far.

Okay. And the last one for me. Obviously, the bright spot is the fixed wireless business, and this is just the low band, you're going to be rolling out the mid-band, the C-band clears in your area in December. How should we think about you're addressing -- your total addressable market, how many households maybe have you already got deployed with C-band even though it's not lit? What are your plans? Some of your larger peers have kind of laid out some targets and have made great progress towards those targets with even more markets. So just trying to help us understand sizing the addressable market of fixed wireless, where you're at and kind of where you plan.

I'll have Doug kind of give you some of the specifics and then I'm actually going to have Mike talk a little bit about what we're doing to address capacity in fixed wireless because that's a fundamental driver of addressable market. An addressable market isn't just where you can have a signal reach. Addressable market is where you can have a signal reach with the capacity necessary to provide a high-quality experience. So Doug, maybe I can ask you to tackle the first question and then Mike you tackle...

Sure. And as a reminder, Ric, our total addressable market for fixed wireless today over low band is 13 million homes in our footprint. And when we look at our multiyear mid-band rollout, we expect mid-band to get to 4 million to 5 million of those homes and that may be adjusted over time, but we're pretty excited about where that's going.

Ric, it's Mike. Thanks for the question. So we're just now starting to bring up our DoD spectrum. And that immediately gives us the capacity increase to the low band service that LT mentioned. At the same time, we're prepping the radios and the equipment so that we can activate C-band towards the end of the year. So that almost doubles our capacity to support the growth. But in addition to that, we're working with our marketing team to find the right balance of pro-install external antennas versus internal antennas and glass mount antennas, getting that mix right further extends our capacity. And then there's things we're working with our vendors on to, one, lower the cost to add capacity as well as feature enablements that are specific to FWA capacity. So right now, we're not concerned about capacity. We're managing it like we manage capacity on our mobility product.

Next, we'll go to Phil Cusick with JPMorgan. We'll move to the next question. Next, we'll go to Simon Flannery with Morgan Stanley.

LT, on the build-out of the mid-band spectrum, it sounds like you're hanging 2 different antennas for the DoD spectrum and the C-band with the one touch. Any line of sight to an integrated antenna and how that might be helpful in terms of efficiency of use? And I guess a related question maybe for Austin is I appreciate the color on the competitive positioning of the towers. How do we think about capacity? You have 1.5 tenants right now? Are most of these towers, can we go to 2, 3, 4 tenants over time? Any color on that would be great.

Thank you, Simon. I'll have Mike touch on the single enclosure, single radio. It's certainly something we've been working closely with our partners on developing. So Mike, maybe you can give a little bit of color on that.

Thanks for the question. We're working with both our vendors on that product and I want to commit them to a date publicly, but we feel it's pretty close, and we'll integrate that into our deployment plan so that we could take advantage of it just as soon as it's available.

Simon, this is Austin. On your second question, yes, our towers do have incremental capacity. We believe the vast majority of them have incremental capacity from where they are today. In addition, there's always the option to invest to a structural modification to add capacity to the sites as well. So we feel good about where we are there.

And any quantification of the how long and how much the remaining T-Mobile churn is?

I'm not going to provide any more detail right now.

Next, we'll go to Michael Rollins with Citi.

When you look at the totality of wireless performance, are there geographies or segments where you're seeing material growth in subscriptions, postpaid phone subscription and revenue versus maybe other areas or products or verticals that it's tougher such that when we look at the total portfolio performance, it's actually not a fair representation of what you may be experiencing when you go 1 or 2 levels deeper.

Mike, it's good to hear from you. I'd answer that question in a few different ways. I mean, certainly, when you look at different products inside of our business, we're seeing certain areas of the business with really attractive growth. So we certainly talked about fixed wireless in a fair amount of detail. That's one area where we're seeing a lot of growth. In our business segment. Our IoT business is up substantively year-over-year. We're seeing really good growth on the private networking space. And by the way, the private networking space, it's also helping us pull through professional services. And so that's an attractive growth area for us. We've talked mostly on fixed wireless. We've talked mostly about the consumer side, but we're actually seeing some really attractive growth on the business side as well. We've recently launched a failover product that we're seeing really nice growth on. And if you're trying to follow the growth in our financial statements, some of the fair amount of the growth on the business side doesn't actually show up in our subscriber count because it's being sold through indirect channels, and so it will just show up in our revenue count. And so there certainly are some substantive bright spots. From a geographical perspective, what I would highlight is that 50% of our footprint does not have cable competition in it. We are seeing increased pricing competition from cable and where we see that, it creates incremental competitive challenges. And so as you would expect, where we don't see that increased competitive challenge from cable, we see some better subscriber results. So different ways of kind of getting at your question. We certainly have plenty of attractive pockets but broadly across the business, we do see gross add challenges. I'd also just point to churn, right, where last year, we were quite aggressive with our existing same as new promotions. Those moved our in-contract rate from mid-50s, 57%, 58% up into the low 60 percentile in contract customers. And where we have those customers in contract, we see far better churn profiles. So it certainly is not ubiquitous performance completely across all our products and all our footprints. You've got highs and lows as you would expect. Hope that gives you a sense, Mike.

And I just had a follow-up question. So I recognize you can't speak to the strategic review of UScellular per your prior comment. But the language was very specific that TDS is also performing a strategic review of UScellular. So should investors take that to mean that TDS as a company expects to still be an outstanding independent company regardless of what happens to UScellular? Or does TDS also -- the future of TDS get incorporated into this review for UScellular?

Yes. It's an incredibly elegant way to try to get me to talk about the release, but I'll just point you back to the 13D. I think the language in it is about -- I think, as clear as we're going to be, and I think it probably provides as many details as we're going to at this point. So I would just refer -- I would reference you back to that document for that question.

[Operator Instructions]. Next, we'll go to Sergey Dluzhevskiy with GAMCO Investors.

LT, my first question is around the business and enterprise side. So obviously, it's a growth vertical that you see out there for the company. I guess as you look over the last 12 months, I guess, what has been the largest achievement on that front? And also, what are your expectations for this vertical over the next 12 to 18 months, what would you consider a success? And at what point do you expect this business to make a more meaningful contribution to UScellular results.

So business is an interesting space for us because the -- if I take a step back from our business, and I will answer your question, but if you take a step back just from our business and you look at 5G. With the exception of fixed wireless, the emerging use cases that are going to monetize the investments that the industry has made in 5G increased speed, better latency. Those use cases are increasingly going to be on the enterprise side. And so whether it is connected manufacturing, whether it is connected health. Most of those initial use cases, digital twins, those are going to leverage enterprise. And so we made a pretty substantive investment in enterprise distribution so that we could be ready for that and we're seeing the payoffs from that investment in distribution, particularly in areas that I mentioned before, I think private networking, I think IoT, and I'll point particularly -- you asked for a specific accomplishment. I'm particularly pleased with what we've been able to do in the utility space. So we've signed a variety of different private networking deals with utilities, helping them manage their networks more securely providing them with more control, smart metering solutions. And this is a particularly interesting space because they don't necessarily -- utilities don't necessarily compete against one another. And so a solution that we provide to one utility they can talk about with others. And so we've actually seen pretty significant momentum in that space. And I expect that to continue. So if I were to point at one thing, it would be utilities. More broadly I think enterprise is where you're going to see those 5G use cases emerge. And so we've leaned into enterprise while many of our competitors have actually pulled back. And…

Great. My other question is around partnerships and network sharing because I think a number of times, you talked about the company exploring opportunities for more robust partnerships around infrastructure and more specifically, network sharing. Obviously, we see a lot of network sharing deals in Europe, Latin America, in North America, maybe they are not as frequent, but I think Bell and Telus in Canada have a very robust partnership. So my question is if you could provide an update as far as your efforts on that front? And also, more broadly, is there a way for your cellular to better align itself with one of the national providers in the value-enhancing way using network sharing or other partnerships and how you guys look at that going forward?

The interesting thing about network sharing is that it's a single term that covers an incredibly broad spectrum of possible methods, partnerships, arrangements, whatever you want to call it. Roaming is a form of network sharing. And so clearly, we engage in network sharing partnerships with our roaming partners as do the other carriers. We're in consistent communication with other folks in the industry to explore alternatives. I'll go back to comments I've made on these calls in the past, which is that I simply don't think that it makes economic sense to build 4, 5 duplicative 5G or 6G networks in rural America. We feel we have a fantastic set of assets in rural America, whether it's the spectrum that we own, the network that Mike has built out, the towers that Austin is operating, and we see opportunities to use that in a creative fashion, and so I would go back to some of the comments Austin made about some of the network equipment and network elements that we're actually offering up to people that co-locate on our towers. And we have the opportunity to offer shelter space, the generators, we're even discussing backhaul sharing. Those are elements of network sharing that we're in the middle of doing, and we've actually signed some agreements there. They're very small, right? It's on a tower-by-tower basis sometimes. But it's another way of thinking about network sharing. And so I think the conversations are ongoing. We're seeing continued interest in, for example, that tower sharing construct. Beyond that, I probably can't comment on anything specifics here.

Got it. And my last question is for Michelle. So obviously, you commented about the A-CAM -- on A-CAM program expansion. And it seems you have a positive view of the program. Could you maybe provide more color about what this could mean for TDS going forward. What the implications are -- what the implications are for potential revenue and award opportunities under this program going forward.

Yes. Thank you, Sergey. Yes, so the A-CAM program is seen as a benefit to TDS Telecom. We're very excited about this. We've been working with the FCC for a long time. On trying to get this enhanced program over the finish line. And so we're just very pleased that has happened. There are a lot of program details that are still being reviewed. We know the high levels as I mentioned, this program is going to extend the revenue support for an additional 10 years. So the current A-CAM program was scheduled to go through 2028. This will take the revenue support out through 2038. And in exchange for that, though, we have to deliver higher speeds to all of the addresses that are eligible for the A-CAM program. So that means that we have to get speeds of at least 100 megabits down and 20 megabits up. That is the same requirement as part of the BEAD program. And those bills have to be done, it's our understanding by the end of 2028. So that also the builds on the A-CAM program will align with the build time line that we're expecting for the BEAD program. So that's what we know right now. We will be working closely with the FCC to get our companies specific offers and obligation requirements, and this will all happen over the next couple of months. And then that will allow us to do a little bit more valuation and be able to talk more specifically about exactly what it means for us. But in general, this is a program that's already existing. We've been part of it for many years. It's a wonderful thing for TDS Telecom and for our customers and by keeping this program going and extending it. We really think this is going to be the best way for us to get to work and start to serve those customers in the most rural parts of our markets with higher speeds as quickly as possible.

Next, we'll go to Phil Cusick with JPMorgan.

Sorry, if I missed a little bit of the call, but I'm trying to catch up on the transcript. I wonder, LT, you've been at UScellular for 3 years. And can you talk about the success of the shifting pricing and promotion strategies in that time. Your in contract mix, as you said, is up nicely and churn is down, but it seems like you continue to struggle with gross adds and despite wireless growing better over the last few years than we'd expected. So can you just talk about sort of where we are in that go-to-market strategy and what the company is doing to try and push that. And as you look at the budget and plan for this year, where performance has sort of differed and the drivers of the guide down.

Phil, good to hear your voice. We are -- when we think about our pricing and promotional structures, you don't do so with subscribers in a vacuum. And you don't only look at how you're doing from a subscriber perspective. We've talked from the very beginning that what we were trying to create both with our pricing and promotional structures, but also with our regionalization efforts where we can test and trial different constructs is we wanted to have a strategy to properly balanced subscriber results with financial results. And so when I look at that balance, given the context, the overarching context of the industry, intense competitive environment, enhance pricing pressures across the industry. And if I look at within that context, I'm quite pleased about the balance we've been able to strike. The gross add performance is not where I want it to be. We've been fairly public about that, and it's in every statement that we put out there, and I'll continue to say it. I would like to be able to drive stronger levels of gross add performance. However, the level of investments that we feel like it would take at this point to really meaningfully bend the curve on gross adds is not a prudent investment that we think is worth doing. I would contrast that with churn. We made a substantive investment in churn last year with our existing same as new plants, getting folks back under contract. There's a fair amount of money that we spent behind it. However, you see the benefits that we're gaining this year and year-over-year churn improvement and so purely on a subscriber gross add perspective, still a lot of work to do. In the balance between subscriber results and financial results, you'll see from our guidance, we slightly expanded our operating cash flow guidance this year. We're trying to strike that correct balance between subscriber results and financial results. And from that perspective, I'm pleased, and I think the team is executing [indiscernible]

And has gross adds been the driver of the slower revenue and the downgrade in the guide today?

Yes. I mentioned on the call, Phil, it's volumes and mostly gross add-driven on postpaid and to a lesser extent, prepaid.

Okay. If I can ask one more. Can you remind us of your ownership of the Verizon LA asset and how much cash that is brought in, in the last year?

LA, first of all, our total distributions last year, 2022 full year were $145 million. That includes LA, along with 9 other partnership investments. We expect that to go up slightly this year. LA is about 40% of that total.

And what's the -- I assume that there's essentially no tax basis on those investments?

Well, it's low. And by the way, LA's distribution is going up this year as a result of significant capital expenditures in the fourth quarter of 2022. So we do expect that to go up. And yes, the tax basis is low.

There are no further questions at this time. I'll now turn the call back over to Colleen Thompson for any additional or closing remarks.

Okay. Thanks, everyone, for your time today. Have a great weekend.

This concludes today's conference call. You may now disconnect.