Financial Data and Key Metrics Changes - The company completed the sale of its U.S. Cellular wireless business and certain spectrum assets to T-Mobile for $4.3 billion, which is expected to unlock significant value for shareholders and strengthen the balance sheets of both Array and TDS [5][11]. - Following the transaction, approximately $364 million remains on the Array balance sheet, with $1.7 billion in debt assumed by T-Mobile [11]. - A special dividend of $23 per share was declared, with TDS expected to receive approximately $1.63 billion [12]. - The company anticipates annual interest savings of about $80 million, reducing TDS's average cost of debt to just over 6% [12][14]. - S&P raised TDS's credit rating to BBB- from BB, reflecting a strong balance sheet and growth outlook [18]. Business Line Data and Key Metrics Changes - Array's tower business operates approximately 4,400 towers and has a new master license agreement with T-Mobile, which is expected to enhance revenue and profitability [8][25]. - Third-party tower revenues increased by 12%, and the number of third-party colocations grew by 6% year-over-year [25][26]. - TDS Telecom added 27,000 new fiber service addresses, with a total of 10,300 fiber net additions leading to a 19% growth in total fiber connections since last year [32][33]. Market Data and Key Metrics Changes - The company is focusing on expanding its fiber footprint, targeting 1.8 million marketable fiber service addresses, with 968,000 addresses at the end of the quarter [34]. - The company expects to achieve 150,000 new fiber addresses this year, with significant growth anticipated in the second half of the year [32][37]. - Demand for higher broadband speeds remains strong, with 83% of residential broadband customers taking 100 meg or higher, and 26% taking one gig or higher [39]. Company Strategy and Development Direction - The company aims to focus on its tower and fiber businesses, believing it is well-positioned to win in these areas [6][8]. - A capital allocation strategy is being developed, focusing on fiber investments, M&A opportunities, and shareholder returns [15][18]. - The company plans to maintain a conservative balance sheet while targeting a three times bank leverage ratio at Array [14]. Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the new chapter for the company following the T-Mobile transaction, emphasizing the focus on tower and fiber businesses [6][10]. - The management team is optimistic about growth opportunities in the tower business due to increasing demand for data and communication services [8][25]. - The company expects to incur additional wind-down costs as it transitions from a wireless service provider to an independent tower company, which may negatively impact profitability in the short term [29]. Other Important Information - The company is working to opportunistically monetize its remaining spectrum, with significant proceeds expected from pending spectrum sales to AT&T and Verizon [21][22]. - The company has a strong sales leadership team in place, which is expected to drive future revenue growth [26][90]. Q&A Session Summary Question: Update on TDS Telecom's fiber expansion plans - Management indicated that there is significant opportunity to expand the fiber footprint and that updates will be shared in upcoming quarters [50][52]. Question: Long-term leverage expectations for TDS Telecom - Management expects to maintain leverage below 1.5 times while evaluating opportunities for both fiber and tower businesses [54]. Question: Access to construction resources for fiber expansion - Management expressed confidence in meeting the 150,000 service address goal for the year, with significant ramp-up in construction efforts expected [56][57]. Question: Insights on fiber market penetration and competitive landscape - Management shared that they expect high presales penetration and are focusing on markets with favorable competitive dynamics [60][73]. Question: Update on mobile launch and pricing strategy - The company launched its MVNO product TDS Mobile in select markets and is testing aggressive pricing strategies [81][84]. Question: M&A opportunities and focus areas - Management is considering fiber opportunities that would synergize with existing properties and footprint [85]. Question: Growth strategy for the tower business - Management highlighted the importance of bringing sales operations in-house and the positive impact on revenue growth [90].

Core Viewpoint - AT&T Inc. is set to report its second-quarter 2025 earnings on July 23, with revenue and earnings estimates at $30.53 billion and 51 cents per share respectively, remaining unchanged over the past 60 days [1][8]. Earnings Performance - The company has delivered an average earnings surprise of 2.64% over the last four quarters [3]. - The earnings estimates for the upcoming quarter show a slight negative surprise of -2.60% with a Zacks Rank of 3 (Hold) [5]. Revenue and Growth Factors - AT&T's revenue and EPS estimates are driven by its Communications segment, with projected revenues of $29.39 billion from this segment [8][14]. - The company has expanded its fiber reach to 30 million locations and has agreed to acquire Lumen's fiber assets for $5.75 billion, which will enhance its competitive position [9][10]. Competitive Landscape - The U.S. wireless market remains highly competitive, with challenges from major players like T-Mobile and Verizon affecting AT&T's margins [15][22]. - AT&T's new wireless plans targeting customers aged 55 and above are expected to improve customer engagement in this demographic [11]. Strategic Initiatives - The company is collaborating with AST SpaceMobile to develop satellite-based cellular connectivity, which could benefit first responders and public safety applications [12]. - A strategic agreement with Palo Alto Networks aims to enhance data protection for businesses through a secure access service edge solution [13]. Valuation Metrics - AT&T's shares are trading at a forward P/E ratio of 12.56, which is lower than the industry average of 12.96 but above its historical mean of 10.94 [19]. Investment Considerations - The company is focused on enhancing its network infrastructure, particularly in 5G and fiber networks, to improve coverage and capacity [21]. - Despite solid subscriber growth, intense competition and promotional spending are straining margins, with a current ratio of 0.7 indicating potential short-term liquidity challenges [22].

Core Insights - AT&T Inc. is focusing on fiber densification to bridge the digital divide by expanding into underserved communities, with a recent agreement with PRIME FiBER to offer wholesale fiber broadband services in Arizona [1][7] - The company aims to reach 60 million fiber locations by the end of 2030, which is crucial for 5G deployment and enhancing broadband connectivity [2][7] - An integrated fiber expansion strategy is expected to improve user experience through steady 5G deployments in various venues, including stadiums and airports [3][7] Company Strategy - AT&T's fiber expansion will support both enterprise and consumer markets, enhancing broadband access and user experience [3] - The acquisition of mid-band spectrum (C-Band) will provide significant bandwidth for better coverage in rural and urban areas [3] Competitive Landscape - Verizon Communications is also expanding its fiber-optic networks to support 4G LTE and 5G standards, with a focus on capital expenditures for network densification [4] - T-Mobile US is investing in fiber broadband to reach 12-15 million customers by 2030, offering various service plans with competitive features [5] Financial Performance - AT&T's stock has surged 46.5% over the past year, outperforming the industry's growth of 21.9% [6] - The company trades at a forward price-to-sales ratio of 1.59, which is below the industry average [9]

Core Insights - AT&T, Inc. has outperformed the Wireless National industry and the S&P 500 over the past year, gaining 26.7% compared to the industry's 10.3% and S&P 500's 4.6% [1][8] - The company has also surpassed competitors like Verizon and T-Mobile, which gained 7.6% and 8.5% respectively during the same period [2] Fiber Expansion and Market Growth - AT&T's fiber network has reached 30 million locations in the U.S., with plans to expand to 60 million by 2030 [3][4] - The U.S. fiber broadband market is projected to grow at a 7.5% compound annual growth rate from 2024 to 2030, driven by high bandwidth applications and government initiatives [3] - In Q1 2025, AT&T added 261,000 fiber customers and is expected to add a total of 1,048,000 by the end of 2025 [4] Business Services and Innovations - The introduction of AT&T Turbo for Business enhances service for business customers, offering premium mobile features and prioritized data treatment [5][6] - New features in AT&T's Next Generation 9-1-1 emergency communications platform support advanced functionalities like picture messaging and automatic vehicle crash alerts [10] Competitive Landscape and Challenges - The U.S. wireless market is highly saturated, with increasing competition from T-Mobile and Verizon, which are also expanding their B2B offerings [11] - AT&T faces challenges from declining linear TV subscribers and legacy services due to the rise of streaming options [12] Valuation Metrics - AT&T's shares are trading at a price/earnings ratio of 13.55, higher than the industry average of 13.36 and above its historical mean of 10.63 [17] Strategic Outlook - The company's aggressive fiber expansion strategy and portfolio enhancements are expected to drive customer growth in the coming quarters [19] - A customer-focused approach is anticipated to yield long-term benefits despite the competitive pressures in the wireless industry [20]

Financial Data and Key Metrics Changes - The company reported a year-over-year increase in free cash flow of $79 million for Q1 2025, an increase of $18 million compared to the same quarter last year [14] - Total operating revenues decreased by 3% compared to the prior year, impacted by divestitures and declines in commercial and wholesale revenue [47] - Cash expenses increased by 6% or $11 million in the quarter compared to the prior year, with part of the increase attributed to stock-based compensation adjustments [47] Business Line Data and Key Metrics Changes - The company saw a 6% increase in third-party tower revenues due to new co-locations and escalators on renewed leases [13] - Fiber service addresses grew by 6% year-over-year, with 14,000 new addresses delivered in the quarter [19][36] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [37][40] Market Data and Key Metrics Changes - The company continues to face competitive pressures in the wireless market, with aggressive promotions from competitors impacting service revenues [15] - The fiber strategy is expected to drive growth, with a target of achieving 40% average penetration in steady state within five years after launch [41] Company Strategy and Development Direction - The company is focused on completing the transaction with T-Mobile, which is expected to close in mid-2025, and is preparing for a smooth transition [9][10] - Post-transaction, the company plans to declare a special dividend to shareholders, with proceeds expected to be used to repay outstanding bank debt [11][19] - The company is also investing in its fiber program, aiming to expand its footprint and improve operational efficiency [39][100] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business [13][18] - The company expects to continue facing competitive pressures but believes the T-Mobile transaction will provide better competitive choices and connectivity experiences for customers [16][17] - Management is confident in achieving $100 million in annual cost savings by 2028 through transformation efforts [39][78] Other Important Information - The company does not plan to redeem its Series UU and Series BV preferred stock, viewing them as foundational capital for future operations [11][73] - The company is actively evaluating its portfolio for potential divestitures, particularly in copper markets without an economic path to fiber [99] Q&A Session Summary Question: Timing of designated entity spectrum approval - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a positive outcome [58] Question: Free cash flow run rate - The reported free cash flow of $79 million is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [60][61] Question: Debt exchange offer impact - The debt exchange offer will be launched about 50 days before the anticipated close, and the amount of debt exchanged will impact the purchase price [62][111] Question: Fiber net adds and sales efforts - Fiber net adds were lower due to timing of address delivery, but as construction ramps up, net adds are expected to improve [66] Question: Rationale for remaining a public entity - The incremental cost to operate as a public company is minimal, and there are no immediate incentives to collapse the structure [107][108]

Financial Data and Key Metrics Changes - The company reported a free cash flow of $79 million in Q1 2025, an increase of $18 million compared to the same quarter last year [16] - Total operating revenues decreased by 3% year over year, impacted by divestitures and declines in commercial and wholesale revenue [49] - Cash expenses increased by 6% or $11 million in the quarter compared to the prior year, with part of this increase attributed to a non-cash adjustment to stock-based compensation [49] Business Line Data and Key Metrics Changes - The company saw a 6% increase in third-party tower revenue due to new co-locations and escalators on renewed leases [15] - Fiber service addresses grew by 6% year over year, with 14,000 new addresses delivered in the quarter [39] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [40] Market Data and Key Metrics Changes - The company is experiencing competitive pressures in the broadband market, with aggressive pricing and promotional offers from competitors [17] - The demand for higher broadband speeds remains strong, with 82% of residential broadband customers taking 100 meg or higher [47] Company Strategy and Development Direction - The company is focused on completing the transaction with T-Mobile and repositioning the remaining business for future success [12] - There is an ongoing effort to expand the fiber program, which has increased the footprint by over 30% in the last three years [13] - The company plans to declare a special dividend to shareholders following the closing of the T-Mobile transaction, subject to board approval [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business [15] - The company is focused on cost optimization and expects capital expenditures to decline in 2025 as planned 5G coverage builds are largely completed [16] - Management expressed confidence in achieving $100 million in annual cost savings by the end of 2028 through transformation efforts [41] Other Important Information - The company does not plan to redeem Series UU and Series BV preferred stock, viewing them as foundational capital [74] - The expected cash outflow related to severance obligations for employees not retained by T-Mobile is estimated to be between $60 million to $80 million [30] Q&A Session Summary Question: What is the timeline for the designated entity spectrum approval? - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a positive outcome [60] Question: How should free cash flow be viewed going forward? - The reported free cash flow of $79 million is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [62] Question: What are the expectations for the tower company reporting post-closing? - The company anticipates providing tower company reporting including AFFO and related metrics in the first quarter after the close [65] Question: How is the door-to-door sales effort performing? - The company has strengthened its sales teams and expects net adds to improve as fiber address delivery ramps up [68] Question: Why does US Cellular need to remain a public entity? - The incremental cost to operate as a public company is minimal, and there are no significant incentives to collapse the structure at this time [112]

Financial Data and Key Metrics Changes - Total operating revenues decreased by 3% year over year, impacted by divestitures and declines in commercial and wholesale revenue, as well as decreases in residential video and voice connections [44] - Free cash flow for Q1 2025 was $79 million, an increase of $18 million compared to the same quarter last year [13][19] - Cash expenses increased by 6% or $11 million compared to the prior year, with $4 million of this increase attributed to a cumulative non-cash adjustment to stock-based compensation [44] Business Line Data and Key Metrics Changes - Postpaid handset results showed year-over-year improvements, while third-party tower revenues increased by 6% due to new co-locations and escalators on renewed leases [12] - Fiber service addresses grew by 6% year over year, with 14,000 new addresses delivered in the quarter [33][42] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [34][38] Market Data and Key Metrics Changes - The company continues to face aggressive promotional competition in the wireless industry, with competitors offering multi-year price locks and aggressive pricing [14] - Demand for higher broadband speeds remains strong, with 82% of residential broadband customers taking 100 megabits or higher and 24% taking one gig or higher at the end of the quarter [42] Company Strategy and Development Direction - The company is focused on completing the proposed transaction with T-Mobile, which is expected to close in mid-2025, and is preparing for a smooth transition [9][16] - A special dividend to shareholders is anticipated following the closing of the T-Mobile transaction, with proceeds expected to be used to repay outstanding bank debt [10][18] - The fiber program has expanded the company's footprint by over 30% in the last three years, with further growth opportunities identified [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business and fiber expansion [7][12] - The company is focused on cost optimization and expects capital expenditures to decline in 2025 as planned 5G coverage builds are largely completed [13][46] - Management expressed confidence in achieving $100 million in annual cost savings by the end of 2028 through transformation efforts [35][72] Other Important Information - The company does not plan to redeem Series UU and Series BV preferred stock, viewing them as foundational capital for future operations [10][68] - The expected cash income tax obligations related to the T-Mobile transaction are estimated to be between $225 million and $325 million [28][30] Q&A Session Summary Question: Timeline for designated entity spectrum approval - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a positive outcome [52][54] Question: Free cash flow run rate - The $79 million in free cash flow is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [55] Question: Debt exchange offer impact - The debt exchange offer will be launched about 50 days before the anticipated close, and the amount of debt exchanged will impact transaction proceeds [56][110] Question: Fiber net adds and sales efforts - Fiber net additions were lower due to timing of address delivery, but management expects improvements as construction activity ramps up [60][62] Question: Divestiture strategy and criteria - The company is focused on divesting non-core assets, particularly isolated copper markets without an economic path to fiber, ensuring that net proceeds exceed the present value of cash flows from continued operations [95][96]

Financial Data and Key Metrics Changes - Total operating revenues decreased by 3% year over year, impacted by divestitures and declines in commercial and wholesale revenue, as well as decreases in residential video and voice connections [47] - Cash expenses increased by 6% or $11 million compared to the prior year, with $4 million of this increase attributed to a cumulative non-cash adjustment to stock-based compensation [47] - Free cash flow for the first quarter was $79 million, an increase of $18 million over the same quarter last year [14] Business Line Data and Key Metrics Changes - Postpaid handset results showed year-over-year improvements, while third-party tower revenue increased by 6% due to new co-locations and escalators on renewed leases [13] - Fiber service addresses grew by 6% year over year, with 14,000 new addresses delivered in the quarter [45] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [36][62] Market Data and Key Metrics Changes - The company continues to face aggressive promotional competition in the wireless market, with competitors offering multi-year price locks and aggressive pricing [15] - Demand for higher broadband speeds remains strong, with 82% of residential broadband customers taking 100 megabits or higher and 24% taking one gig or higher at the end of the quarter [45] Company Strategy and Development Direction - The company is focused on closing the proposed transaction with T-Mobile and repositioning the remaining business for future success, including a potential special dividend to shareholders [10][18] - The fiber program has expanded the company's footprint by over 30% in the last three years, with further opportunities for growth [11] - The company is evaluating its portfolio to minimize exposure to copper markets without an economic path to fiber [97] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business [13][17] - The anticipated closing of the T-Mobile transaction is expected to provide better competitive choices and connectivity experiences for customers [16] - Management expects to incur cash income tax obligations related to the gain on the sale of spectrum in the Verizon and AT&T transactions, estimated between $325 million to $375 million [33] Other Important Information - The company does not plan to redeem Series UU and Series BV preferred stock, viewing them as foundational capital going forward [69] - The company expects to incur severance obligations for employees not retained by T-Mobile, estimated between $60 million to $80 million [28] Q&A Session Summary Question: Timeline for designated entity spectrum approval - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a successful outcome [56] Question: Free cash flow run rate - The $79 million in free cash flow is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [58] Question: Debt exchange offer impact - The impact of the debt exchange offer on the purchase price is uncertain, but there is interest in retaining attractive debt [60] Question: Fiber net adds and sales efforts - Fiber net adds were lower due to timing of address delivery, but as construction ramps up, net adds are expected to follow [62] Question: Divestiture strategy for wireline and cable portfolio - The company is focused on divesting non-core assets, particularly isolated copper markets without an economic path to fiber [97]