Financial Data and Key Metrics Changes - In 2024, adjusted EBITDA increased by 7% on a consolidated basis, while free cash flow rose to 88 million over 2023, attributed to profitability improvements and reduced capital expenditures [10][32][37] - Capital expenditures decreased by 24% for the full year, contributing to the increase in free cash flow [10][11] - Service revenues for the fourth quarter declined by 2%, primarily due to a decrease in the average retail subscriber base [35] Business Line Data and Key Metrics Changes - U.S. Cellular improved its subscriber results, with postpaid handset gross additions increasing by 16% year-over-year, although net retail subscriber adds remained negative [26][34] - TDS Telecom increased residential revenues by 6% in 2024, driven by growth in broadband connections and average revenue per connection [49][55] - TDS Telecom's adjusted EBITDA grew by 23% year-over-year, reflecting effective cost management and revenue growth [50][56] Market Data and Key Metrics Changes - U.S. Cellular's fixed wireless service surpassed 150,000 customers, indicating growth in this segment [26] - Data usage by customers increased by 37% year-over-year, highlighting a growing demand for data services [28] - TDS Telecom's fiber service addresses grew by 6% year-over-year, with a significant increase in take rates for higher broadband speeds [53][55] Company Strategy and Development Direction - The company aims to optimize its portfolio for long-term success, focusing on growth areas and divesting non-core assets [9] - U.S. Cellular plans to close the T-Mobile transaction, which is seen as a transformative step, and will focus on strengthening its remaining assets, particularly in the tower business [14][15] - TDS Telecom is committed to expanding its fiber strategy, targeting 150,000 new fiber service addresses in 2025 and increasing its marketable fiber service addresses to 1.8 million [61][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic direction, emphasizing the importance of closing the T-Mobile transaction and optimizing capital structure [14][15][21] - The competitive environment remains challenging, but management believes that ongoing investments in customer retention and network enhancements will drive future growth [29][32] - The company is focused on maintaining a strong balance sheet and returning capital to shareholders post-transaction [20][32] Other Important Information - The company has made significant investments in 5G deployment and fiber expansion, with a nearly 30% increase in fiber footprint over the past three years [10][48] - U.S. Cellular's equity method investments generated $169 million in cash distributions in 2024, contributing to overall financial health [24] Q&A Session Summary Question: Why was now the right time for the leadership change? - The board felt that the current transformative time, with significant transactions underway, warranted a change in leadership to guide the company through this phase [79] Question: Will there be changes in tower reporting? - The company plans to provide AFFO reporting post-T-Mobile transaction close, but structuring the tower business as a REIT is not currently on the agenda [83][85] Question: What is the long-term vision for TDS? - The focus is on executing 2025 priorities to position the company for long-term growth in both the fiber and tower businesses [115] Question: How will capital allocation priorities be determined post-transaction? - The company will evaluate capital allocation based on cash flows from the tower business and wireless partnerships, with potential for dividends in the future [124] Question: How is TDS Telecom addressing net additions and conversion rates? - The company is enhancing its sales and marketing efforts, particularly through door-to-door sales teams, to improve conversion rates in fiber markets [129]
ITTI(TDS) - 2024 Q4 - Earnings Call Transcript