美國無線通訊 (USM) 2003 Q4 法說會逐字稿

Good morning.

My name is Shatina (ph) and I will be your conference facilitator today.

At this time, I would like to welcome everyone to the fourth-quarter and year-end results for Telephone & Data Systems/United States Cellular conference call.

All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer period. (OPERATOR INSTRUCTIONS).

Thank you.

Mr. Steinkraus, you may begin your conference.

Thanks, everybody, for joining us today.

We know it's another busy earnings release season.

With me this morning are the usual cast of characters.

We have Jack Rooney, the President and CEO of U.S. cellular, along with Jay Ellison, Executive Vice President of Operations;

Sandy Helton, Executive Vice President and CFO of TDS;

Ken Meyers, Executive Vice President of Finance and CFO of U.S. cellular; and Dave Whitworth (ph), Executive Vice President of Staff Operations and CFO at TDS Telecom.

A replay of the teleconference will be available today at 1 PM Chicago time and will run through midnight, Thursday, February 5th.

The replay number is 800-642-1687 and the passcode -- 4998907.

For international callers, the number is 706-645-9291, same passcode.

The call is being simultaneously Web cast on the Investor Relations sections of both the TDS Web site at www.teldta.com and the U.S. cellular Web site at www.uscellular.com.

The Web cast will be available for the next two weeks, after which it will be available on the conference call archives.

At this time, I always suggest to people that they read the Safe Harbor paragraphs, and we encourage you to do that in both press releases, as well as read our recent filings of K's, Q's, proxy materials and annual reports.

All the risks attendant to our businesses are discussed there.

Always keep in mind that we're going to make some forward-looking statements today and there are always risks intended with those as well.

So do pay attention to that, even though I know you hear it on every conference call.

This call is being recorded by Telephone & Data Systems and is copyrighted material.

It cannot be recorded or rebroadcast without Telephone & Data Systems' expressed permission.

Your participation implies consent to our taping, so please drop off the line if you don't agree to these terms.

If you're not getting notification from us regarding teleconferences, or have changed your e-mailed address, or you would like to be placed on our list, please e-mail me or one of my associates at the addresses that are noted on the press releases.

Regarding upcoming Company events, Ted Carlson will speak about TDS at U.S. cellular on March 3rd at the Raymond James 25th Institutional Investors Conference in Orlando.

TDS will also be presenting at the Baird 25th annual (indiscernible) stock conference here in Chicago on May 5th.

I and other members of our management team are on the road quite a bit, so if you have an interest in our dropping by and visiting you, or you'd like to visit us in Chicago, please give us a call.

Now, just a few housekeeping issues -- there are several onetime events in the quarter that will be discussed today.

Sandy, Dave and Ken will expand on those, so please be aware that these are going to have an impact on your fourth-quarter and year-end financial models for both companies.

Shortly after we released our earnings this morning, both TDS and U.S.

Cellular filed 8-Ks.

The 8-Ks are simply a wraparound of earnings releases we issued this morning and put us in compliance with the new rules set forth by the SEC.

Both press releases were posted to the TDS Internet homepage this morning shortly after going out over the wire.

U.S. cellular posted their release to their Web site as well.

You'll also find, posted on our website, additional information and reconciliation of non-GAAP financial measures that may be used by management when discussing the select operating data during today's conference call.

This information can be accessed on the conference call page of the Investor Relations section of our Web site.

Now, I'm going to turn the phone call over to Sandy Helton.

Good morning and thank you for joining us.

I will briefly highlight TDS' consolidated results for the quarter and touch on a few items affecting the Company overall.

Then I will turn the call over to Ken and Dave, who will discuss the business unit results.

We will then take your questions.

TDS' consolidated operating revenues grew 8 percent year-over-year in the fourth quarter, resulting in revenue growth for the full year of 14.5 percent.

Operating income decreased 13 percent in the quarter.

This includes two onetime charges; one was a $22 million loss on assets held-for-sale and U.S.

Cellular that relates to the pending sale of its South Texas market.

It represents the difference between the book value of the market and the expected proceeds.

TDS Telecom booked the other charge, a $5 million write-down of expansion properties.

The TDS press release explains both of these charges in detail.

Excluding those onetime charges, operating income grew 30 percent year-over-year.

Operating income for the full year was $315.5 million, or 368.3 million, excluding the losses on assets for sale and the TDS Telecom asset write-down.

Excluding the onetime charges, operating income decreased 5 percent year-over-year.

Our results for the quarter, as well as the full year, were affected by Statement of Financial Accounting Standards Number 143, or FAS 143, which involves accounting practices related to the retirement of long-lived assets.

As you know, FAS 143 is an industry issue and affects companies differently, depending upon a number of variables.

FAS 143 requires companies to record the estimated fair value of a legal liability for an asset retirement obligation in the period it is incurred.

In other words, when that asset is required.

TDS Telecom has been recording non-cash charges since FAS 143 took effect in January of 2003.

However, because U.S.

Cellular has historically retired very few of its long-lived assets -- primarily cell sites, the Company had initially estimated the probability of being required to remediate U.S.

Cellular's cell sites to be zero.

However, after thorough analysis, we decided that while remediation at U.S.

Cellular was highly unlikely, it would be more prudent to record an estimated value for its cell sites.

Therefore, during the fourth quarter, we revised our estimates, which resulted in a 20 cent loss per diluted share, to reflect the cumulative effect of FAS 143 for prior years.

It also requires a restatement of our financial statements for the first three quarters of this year to reflect non-cash book entries related to the estimate revision.

A summary table showing the effects of FAS 143 is provided in TDS' release on Page 12 and U.S.

Cellular's release on Page 8.

TDS' effective tax rate on operations for the full year was 38.6 percent, excluding the taxes on onetime losses of 63 million associated with write-downs taken during the year.

The 38.6 percent tax rate on operations compares to 43.1 percent in 2002. 2003's rate is lower because it includes the benefit related to certain net operating losses.

Including the gains and losses on asset dispositions and write-downs, the tax rate for the full year 2003 was 44.8 percent.

We anticipate the effective tax rate on operations for 2004 to range between 41 percent and 42 percent.

Moving now to corporate initiatives, we continued to repurchase TDS stock during the quarter, in line with our commitment to improve shareholder returns.

We bought back 582,000 shares in the fourth quarter at an average price of $61.59 per share.

This brings the shares repurchased during 2003 to 1,960,900 shares at an average price of $49.10 per share totaling $92.4 million.

We plan to continue the stock repurchase program in 2004, contingent on market conditions.

During the quarter, we also completed several important debt-related activities.

For U.S.

Cellular, we sold $444 million of Notes due in 2033 at a very attractive rate.

We also amended U.S.

Cellular's $325 million revolving credit facility, increasing it to $700 million.

At the same time, we terminated U.S.

Cellular's $500 million revolver that was due to expire in August of this year, effectively consolidating the two revolvers.

Additionally U.S.

Cellular has indicated to TDS that it intends to repay, in its entirety, the 8.1 percent inter-Company loan of $105 million it arranged with TDS in 2002.

The loan, which carries no penalty for prepayment, helped U.S.

Cellular finance its purchase of the Chicago market.

We expect that repayment to take place in the coming weeks.

U.S.

Cellular's initiatives to improve the terms of its debt and its liquidity is in line with TDS' commitment to maintain a strong balance sheet and investment credit rating.

TDS made significant strides during the year on this front as well, redeeming $371 million of debt and other obligations during the year, actions that will save the Company approximately $31 million in pretax interest expense per year.

To conclude, the fourth quarter was another strong quarter for the Company.

The full year was also a very successful one for TDS, as our business units executed well against their strategies.

We made significant strides toward our commitment to return value to our shareholders, to keep our balance sheet strong and to maintain the Company's investment-grade rating.

I'd like to take this opportunity to thank all of our shareholders for their continued support.

Now, I will turn the call over to Ken Meyers, who will discuss U.S.

Cellular's results.

Good morning and thanks for your time today.

I think you'll agree U.S.

Cellular had a good quarter when you take the time to analyze the results.

There are a few pieces moving around, including the effect of the first AT&T trade, which closed last August and affects year-over-year comparability.

Also, we recorded costs this quarter related to the second AT&T transaction, the pending sale of South Texas, which is anticipated to close this quarter.

As Sandy mentioned, we had to change estimates regarding the implementation of 143, which resulted in increased non-cash costs for each quarter of this year.

We cleaned up issues around prepaid and reseller lines, neither of which affect ongoing revenue.

Notwithstanding the above, the Company had strong revenue and churn results; customer growth picked up, though equipment costs remained high; cash flow came in as expected; and CapEx was slightly under target for the quarter and the year.

During the quarter, the Company added 141,000 net new customers.

Actual postpay customers increased by 166,000 while prepaid customers fell by 25,000.

The drop in prepaid customers included about 16,000 accounts that were not previously turned off due to some third-party system issues.

The disconnection of these dormant accounts has no affect on revenue.

The additional 10,000 postpaid disconnects relate to a reseller, which is not an access revenue-based account.

What this means is they simply buy a bundle of minutes each year.

We found idle, unused numbers in their inventory and took those back, but to make the numbers work out, we treated those as churn.

Despite the inclusion of these two cleanup items, churn for the quarter averaged just 1.4 percent for postpaid and 1.8 percent all-in.

On a year-over-year basis, customers are up 7.5 percent despite the divestiture of approximately 141,000 customers and the North Florida trade with AT&T Wireless.

This growth, combined with a 3 percent increase in monthly retail revenue per customer, more than offset a $14 million decrease in roaming revenue to produce the 7.9 percent increase in total service revenue this quarter.

On the revenue front, our Short Messaging Services continued to grow and now represent just under 1 percent of retail revenue.

Additionally, we have now rolled out our Easyedge data services to all of our current 1X markets.

We started this process at the end of the third quarter and the service is now available in markets representing 78 percent of our served population.

Since this product just rolled out, it has had diminimus revenue impact this quarter, but we are excited about its prospects.

Turning to cash operating expenses, there are three items of note.

First, systems operations expenses were up just 5.5 percent year-over-year and down sequentially, reflecting the effects of the North Florida disposition and lower roaming costs.

Lower roaming costs are the flip-side of the lower roaming rates, which affected roaming revenue.

Second, our cost per gross add of $384 is up 4 percent year-over-year -- again reflecting industrywide heavy discounting of even the latest in technology.

Third, G&A, which is up 15.1 percent year-over-year, is impacted significantly by the required accounting for USF payments.

These amounts are in both revenue and expense.

While a year ago these amounts totaled about $2 million, they have now grown to $10 million and account for $8 million of the year-over-year increase in G&A expense.

In the area of non-cash operating expenses, depreciation is up $18 million on our larger fixed asset base.

The amortization line now includes accretion expenses related to FAS 143, which Sandy mentioned earlier, and we recognized a $22 million loss related to the South Texas properties, which we are selling to AT&T.

Below the line, we saw nice gains in investment income, which is our share of the income from cellular operations in which we own a non-operating or non-controlling interest.

Income taxes are actually a benefit for the quarter, not an expense.

This is partially due to the difference in book and tax basis of the South Texas assets.

Net income for the quarter, after the South Texas loss and FAS 143 change, totaled $20.5 million, or 24 cents per share.

Quickly, for the year, the Company added 447,000 customers, just under our guidance of 450,000 to 475,000 after taking late-year adjustments of 26,000 customers on our prepaid and reseller accounts.

Service revenue of $2.4 billion met our targets of 2.35 to $2.4 billion.

Operating cash flow, at $646 million, was within our range of 640 to 665.

CapEx totaled $663 million for the year, below our guidance of 650 to $670 million -- 633 million, I'm sorry.

Overall, a pretty good year, especially given the need to convert the Chicago billing system, which brought unexpected costs, while at the same time rolling out CDMA 1X to Oklahoma, Missouri and New England, launching new markets, including Omaha, Fort Wayne and South Bend, to name just a few, building a data building platform and launching our Easyedge services to markets comprising 78 percent of our served population.

We also took two significant steps to enhance the footprint aspect of our strategy with the two AT&T transactions and rolled out Phase I of wireless number portability.

A brief note on wireless number portability -- we were ready on time, our systems worked, and most of the wireless interoperability issues have been resolved.

There was not a significant number portability affect during the quarter, but I think it's too soon to label it as another Y2K event -- a lot of talk, a lot of money but not a significant effect.

It will take a couple of more quarters to gauge its effect.

However, our focus on customer satisfaction is paying off.

We have been and remain a net recipient of ports with port-ins running favorable by a margin of about 3 to 2.

So much for 2003.

What's on tap for this year?

Looking forward for 2004, the Company results will be impacted by three factors in addition to the typical forces of competition.

First, last August, the Company completed the sale of the North Florida markets to AT&T.

These markets produced revenue and positive operating cash flow for the Company in the first seven months of 2003.

That will affect some year-over-year comparisons.

Additionally, we anticipate closing the sale of South Texas to AT&T this quarter.

That too will affect comparability, going forward, for the rest of year.

Finally, we're building out four markets right now from the AT&T swaps -- Oklahoma City, Portland, Maine, Lincoln, Nebraska and St. Louis.

We hope to launch commercial services in most of these markets by year-end, but due to the uncertainties of cell site construction, that is not a certainty at this time.

Finally, we have Phase II of wireless number portability coming in May.

Taking all that into account, we will discuss targets for this year will be based upon the operations of our core markets, those that are in operation as of the beginning of 2004.

In these markets, we're looking to add 325 to 350,000 net new customers for the year.

We are anticipating average revenue per user for this year to be flat to just marginally down, as the take rate on data services helps offset the natural decline in roaming revenues.

This should produce approximately $2.5 billion in service revenue.

Churn could increase due to the rollout of WNP into all of our markets, but we had hoped to keep total churn under 2 percent for the full year, as we have in the past.

We see little on the horizon that changes cost per gross add and therefore, expect it to be flat with last year.

Roll this together, we would anticipate 700 to $720 million of operating cash flow -- something in the low double-digit growth range.

CapEx in these markets is targeted at 510 to $530 million, or about 20 percent of service revenue, as we continue to rollout 1X into the Northwest, provide for additional capacity across our network, and continue to focus on improving the customer experience.

With respect to the new markets, the exact timing of each launch is critical to anticipating their effects on the P&L for this year.

The earlier we start them, the higher we would expect total customer acquisition costs and total customer growth to be for this year, which would result in lower consolidated operating cash flow.

At this date -- at this time, the start dates are just not know due to the vagaries of construction, as I mentioned earlier.

We do plan to spend approximately 90 to $100 million in CapEx, completing their build-out for this year, so total CapEx for the Company should fall in the 600 to $630 million range.

We will update your each quarter as our timelines become more clear.

It is conceivable that the market launches could occur early enough such that launch costs could hold operating cash flow growth to just low single digits, but we would expect that to be at a very different level of customer growth than we spoke of earlier.

So, we have a busy year planned for 2004.

Besides launching these markets, we are focused on driving penetration of our Easyedge data services, preparing for the second phase of wireless number portability and first and foremost, driving customer satisfaction.

Thanks for your time this morning.

Now, let me turn the call over to Dave Whitworth (ph) at TDS Telecom.

Good morning, everyone.

TDS Telecom is pleased to report solid results for the quarter that continued to be in line with the full year guidance previously provided.

Focusing first on our ILEC markets, revenues were up 3.4 percent for the quarter with a 4.2 percent decline in operating cash flow.

As mentioned in the press release, the Company recognized $7.7 million in operating expenses related to the employee retirement incentive program that there will help position the Company for a lower cost structure, going forward.

These costs are included in multiple line items of the income statement, depending on the work functions performed by the retiring employees, with the majority of the costs in network operations.

Physical access lines declined 1.3 percent.

Declines in residential second lines, primarily due to DSL and cable modem substitution, continues to be the primary driver for this decline, accounting for one-half of the change, the remainder being impacted by business lines upgrading to higher capacity circuits, wireless substitution, seasonal disconnects and involuntary churn.

Access line equivalents, however, grew 1.5 percent, primarily as a result of strong DSL sales and movement of business lines to high-capacity circuits.

Access minutes of use for the quarter were up slightly, 1.7 percent.

We continue to do well with increased penetration in our key products and vertical services, including various forms of Internet access, long distance and advanced calling services.

Long distance customers increased to 230,500, a 17 percent increase.

Our larger minute bundle plans that are offered in some states and business plans are showing good growth.

Our DSL customers increased to 23,600 accounts, up nearly 160 percent.

DSL service is available in 54 markets as of year-end, representing nearly 70 percent of our ILEC access lines and we plan to offer service to approximately 14 additional markets in the next quarter -- or this quarter.

Dial-up Internet accounts declined as customers shifted to broadband.

The penetration of more-mature products continued to improve with Caller I.D. increasing to 33.1 percent penetration in the quarter.

Our CLEC markets continued to provide solid growth.

CLEC-equivalent lines increased 74,000, an increase of 25 percent.

CLEC revenues increased 7.9 percent for the quarter.

Operating cash flow improved by $14 million in the quarter and marked the fourth consecutive quarter of positive operating cash flow.

Operating income was decreased by a onetime charge of $4.6 million for the write-down of new market expansion investments that were judged to be impaired.

Onetime credits totaling $2.6 million relating to RBOC interconnection cost adjustments are included in the quarter as well.

The quarter also reflects the continued impact of a transitioned reduction in the interstate access rate charged by CLECs as ordered by the FCC in 2001.

The rate declined from 1.8 to 1.2 cents per minute mid-year and will decline in midyear 2004 to RBOC rates -- today, approximately one-half of a penny.

This rate reduction impacted the comparable quarter by approximately $800,000.

This rate change is contemplated in the Company's business plan and is reflected in our guidance.

Our UNE-P exposure is relatively modest with only 38,000 lines using UNE-P from Qwest in our Minnesota-based CLEC market, USLink.

Good progress was made by USLink in this quarter to move customers to our own facilities, with 33 percent of their lines now on switch.

None of our ILECs are providing UNE-P services to other CLECs.

With respect to our 2004 guidance, we expect modest revenue growth and improved profitability in our business with revenues in our ILECs markets anticipated to be essentially flat, in the range of 640 to $650 million, and 250 to $260 million in our faster-growing CLEC operation.

Operating cash flow in our ILEC markets is anticipated to be in the range of 305 to $315 million, while our CLEC is anticipated to be in the range of 10 to $20 million.

Capital expenditures for 2004 in the ILEC business are targeted at $105 million, plus or minus, and $45 million plus or minus in the CLEC.

We continue to be very focused on continuing to provide value to our shareholders through improved profitability and better capital utilization, providing high levels of customer satisfaction to our customers while constantly focusing on controlling costs and finding new revenue streams helps us to improve those returns.

I will turn the call back to Mark Steinkraus.

Thank you, Dave, and Ken and Sandy?

We're going to turn it over to you for Q&A now.

(OPERATOR INSTRUCTIONS).

David Ginazzo (ph).

Thanks for all the detail, Ken, and the potential for the new market launches.

Presumably, you would want to launch those as soon as possible, since you're spending the capital now.

What would be the earliest timeframe that you could see and what would drive that?

What's going to drive it is easy part, and that's just sell site construction and how long it takes to get a good network in place.

It's conceivable that something could come up as late -- in the very end of Q2, maybe Q3.

It's just that, with all four of the projects going on, whether we get -- (technical difficulty) -- each of them done this year is just an open question.

Whether we're talking about five months or one month of P&L effect is going to change dramatically what the year looks like.

Just another question -- can you give us an update on USF outlook for U.S.

Cellular in terms of each ETC status, ect.?

Yes.

Where we are today is there are three states that we actually receive money from; that totaled about $21 million for the year, a little bit over $7 million for the quarter.

We continue to apply in other states but until such time as the actual dollars start coming in -- we really don't talk about where we think it's going to come out because the difference between what either they post on Internet sites and what you actually see and when you see it is very, very misleading.

Jim Moorman.

Good morning;

I was wondering if you could just give a little detail on -- G&A in the fourth quarter seemed a little bit high.

Was that due to the billing system in Chicago still?

Or I guess that's done.

But what could have caused that to be a little bit high?

If you are looking at it year-over-year, one of the things that I said was is about $8 million of the year-over-year difference is just related to the accounting for and the level of payments we need to make to USF.

In both revenue and expense, there's no P&L effect on it, but on a year-over-year basis, those mandatory contributions went up by $8 million.

Okay, so that was primarily the difference?

That's half the difference right there on a year-over-year basis.

Ken Leon.

Yes, two questions.

First, on the four new markets, how long would it take to reach break even as a benchmark?

Looking at your installed base for wireless, can you give us a sense of the maturity of contracts that would be up, let's say, over the first quarter or the first half, whether it would be even or unusual?

Ken, with respect to the first question, how long does it take to get to break even?

That's really a function of the growth rate in the individual market.

You can get there at one period of time and slow down with slower growth.

Quite frankly, the faster you grow, the longer it's going to push that out.

At this point in time, I am not prepared to give estimates on that because until we start active marketing in each one of those, it's just impossible to gauge.

With respect to the second question, if you would repeat that, please?

What percentage of the installed customer base would be coming up for contract expirations, let's say, in the first quarter or first half of the year?

I don't have a breakdown in front of me of what I will call the aging of contracts, but there's nothing about the first quarter that makes it unusual -- i.e., there's more than usual or less than usual.

Just a clarification on the first question -- of those four new markets, is there any economies (sic) of scale or contiguous market that can help the efficiency as you grow those markets?

Absolutely.

Each one of the new markets is directly contiguous to other operations the Company has.

So, as an example, in Portland, Maine, Portland is the only city in Maine that we don't currently cover.

So, there are roaming cost savings there that we will get; we will get some media savings because of how we will be able to cover the whole state.

When we build that out, as an example, we aren't even putting a switch there because we've got a switching complex that serves the rest of that area.

The same thing happens in Oklahoma City, where we currently served Tulsa and areas south of Oklahoma City, so there are roaming savings.

Again, we will be able to do certain things with the network and media.

Each one of the new markets that we're bringing on, as I said, is adjacent to our current footprint.

Terrific.

Thank you.

Mark Cunnarny (ph).

Ken, could you repeat the blended churn rate for both the fourth quarter and for the full year?

Could you give me the bad debt percentage also?

I can't give you bad debt as I sit here.

It's (indiscernible) number;

I just don't have it in front of me.

The all-in churn rate for the fourth quarter rounds to 1.8 percent and for the year, it comes in that same level.

Okay.

Do you have any of the ETC revenues that are booked in long distance and other revenues?

As I said, that amount was $21 million for the year and approximately 7.5 for the quarter.

Nigel Coe.

Good morning.

I've got a few questions.

First of all, could you please call your guidance on subscribers?

I think you mentioned that you're looking for 325 to 350 for the full year.

Is that net of the South Texas market disposition, or is this and organic growth number?

Secondly, could you give us some sense of trends in U.S.

Cellular for the first quarter?

I realize it's only one month gone, but Sprint PCS is basically talking about higher churn for the first quarter and the full year than what they saw in the fourth quarter.

I was wondering if you can give us some color along those lines.

First of all, the 325,000 to 350,000 is net new activations through our marketing channels.

That is only in our current markets; it doesn't have anything in there for the new markets that we are launching.

We will update that number as we get closer to launch.

With respect to churn, as we said, that our target for the year is to keep it under 2 percent in total.

We said that there is a risk that it could go up higher than last year with the rollout of WNP in the rest of our markets, which wouldn't happen until the second quarter of this year -- May of 2004 -- so, absent that effect, we don't see anything else that has really changed.

(OPERATOR INSTRUCTIONS).

A follow-up question from Mark Cunnarny (ph).

Real quick, I know, last year, you guys were really pleased about CDMA equipment costs and you actually had sped up some of your build-out last year of CDMA.

With all of this building coming down the pike this year, could you talk about -- do your see similar trends with network equipment for CDMA?

No, the network equipment environment continues to be favorable, from a Company standpoint.

I think that we have gotten some very favorable pricing.

This year, 2003, we actually came in under our guidance, and most of that I would put on the savings side of the piece of paper, as opposed to things that we just didn't get done.

Jeanette Baez (ph).

Good morning, thank you.

I had a question on the wireline side.

How much are you actually receiving from USF on the wireline side?

How do you expect that to change in '04?

Some of your peers are seeing less USF because the national average cost (indiscernible) is going up.

I was wondering if that is impacting as well.

Then my colleague on the wireless side has a USM question.

Vance Idelson (ph) just with a number portability question at USM.

You had good success in the markets where implementation has already occurred.

Is it reasonable to assume that you might do even better in the May implementation markets, just based on the different competitive dynamics there?

Thanks.

We are anticipating a good effect from wireless number portability.

We think it's great from a customers standpoint, and we think it fits right into the strategy of the Company, which has been to maximize customer satisfaction.

Maximizing customer satisfaction gives you the opportunity to have your customers going out and actually talking up the business and bringing new customers into it.

So, we think that, because of where we stand and the way we serve our customers, that we're going to do very well.

Jeanette, relative to USF, TDS Telecom received about $94.5 million in 2003, and we would expect that to go down by about 1.5 million next year.

At this time, there are no further questions.

Okay.

Ken and I and Dave are available at different times during the remainder of the day, so thank you for joining us.

We can conclude the call at this time.

Thank you for participating in today's fourth-quarter and year-end results for Telephone & Data Systems/United States Cellular conference call.

You may now disconnect.