ITTI(US:TDS)2025-05-02 15:02Financial 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]