The Shareholder Forum


Telephone and Data Systems, Inc.

Forum Home Page

TDS Home Page

TDS Reference



June 16, 2009 Forum Report:

TDS Management Response to Shareholders



Forum Report: TDS


TDS Management Response to Shareholders

There has been no response to the shareholder questions presented to TDS directors a month ago.  Although the company’s chairman had assured a response when he declined to address these questions at the annual meeting, there has also been no response of any kind to the letter sent to him the next day requesting advice of plans to do so.

In this context, it must be reported that the company’s executive management had similarly failed to respond to repeated requests for their correction of inaccurate and misleading statements attributed to an official representative of TDS, and that the matter was finally submitted to the company’s Audit Committee to investigate possible violations of the company’s codes of conduct.[*]

These indications of extreme indifference to investor decision-making information are naturally disappointing, especially for a Forum program that was intended to provide TDS management with an opportunity to resolve shareholder concerns about its strategies and policies.  Clearly, we must redefine the issues that are relevant to investors.

As a foundation for considering what may be relevant, it should be noted that there seems to be a consensus among Forum participants about the basic assumptions that (a) the realizable value of the 81%-owned US Cellular wireless business currently constitutes about 85% of total TDS market value but will decline significantly over time, and (b) the value of the directly owned, original TDS wireline business can be expected to either increase or decrease in a much narrower range.  Logically, then, TDS could be viewed as an event-driven investment situation that depends on an action to change current management policy in relation to the realization of value from its US Cellular subsidiary.  Put simply, the question is whether management will consider practical alternatives now or later.

Your views of alternative foundations for analysis will be appreciated during the next few days to guide our definition of issues.  I will report how Forum participants want to address TDS shareholder interests in about a week.


GL – June 16, 2009


Gary Lutin

Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335






This Forum program is open to all shareholders of Telephone and Data Systems, Inc. (NYSE: TDS), and its controlled subsidiary, United States Cellular Corporation (NYSE: USM), and to any fiduciaries or professionals concerned with their investment decisions. Participation is free of charge, according to the Forum's standard Conditions of Participation.

The purpose of the Forum is to provide shareholders with access to information and a free exchange of views relating to their consideration of issues described in the Forum Summary. As stated in the Conditions, all Forum participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. Forum polices are intended to support anonymous communication, and provide that participants will not be identified or quoted without their explicit permission.

The initiation of this program was supported by Southeastern Asset Management, Inc., which as manager of the Longleaf Partners Funds and other client funds is the largest TDS shareholder with common and special common stock aggregating more than 15% of the total of all classes outstanding. TDS has been invited to assume corporate responsibility for the costs of addressing issues of apparent significance to a broad range of its investors, according to the Forum's Conditions, and other participants may be invited to contribute support to the continuing program pending the company's acceptance of responsibility.

Inquiries and requests to be included in the Forum's distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.