0000821130-23-000006.txt : 20230216 0000821130-23-000006.hdr.sgml : 20230216 20230216160656 ACCESSION NUMBER: 0000821130-23-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20230216 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20230216 DATE AS OF CHANGE: 20230216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED STATES CELLULAR CORP CENTRAL INDEX KEY: 0000821130 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 621147325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09712 FILM NUMBER: 23638570 BUSINESS ADDRESS: STREET 1: 8410 W BRYN MAWR AVE STREET 2: STE 700 CITY: CHICAGO STATE: IL ZIP: 60631 BUSINESS PHONE: 7733998900 MAIL ADDRESS: STREET 1: 8410 W BRYN MAWR AVE STREET 2: STE 700 CITY: CHICAGO STATE: IL ZIP: 60631 8-K 1 usm-20230216.htm 8-K usm-20230216
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 16, 2023
usm-20230216_g1.jpg
UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
 
001-09712
 
62-1147325
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
8410 West Bryn Mawr, Chicago, Illinois 60631
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (773) 399-8900
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Shares, $1 par valueUSMNew York Stock Exchange
6.25% Senior Notes due 2069UZDNew York Stock Exchange
5.50% Senior Notes due 2070UZENew York Stock Exchange
5.50% Senior Notes due 2070UZFNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02.  Results of Operations and Financial Condition
On February 16, 2023, United States Cellular Corporation (UScellular) issued a news release announcing its results of operations for the period ended December 31, 2022. A copy of the news release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this Item 2.02 of Form 8-K is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor will any such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01.  Financial Statements and Exhibits
(d)   The following exhibits are being filed herewith:
Exhibit Number Description of Exhibits
99.1 
   
104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.



SIGNATURES
    
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
    
  UNITED STATES CELLULAR CORPORATION
    
Date:February 16, 2023By:/s/ Douglas W. Chambers
   Douglas W. Chambers
   Executive Vice President, Chief Financial Officer and Treasurer

EX-99.1 2 usmq420228-kex991.htm EX-99.1 Document

Exhibit 99.1   NEWS RELEASE
usmnewsrelease.jpg
As previously announced, UScellular will hold a teleconference on February 17, 2023 at 9:00 a.m. CST. Listen to the call live via the Events & Presentations page of investors.uscellular.com.
FOR IMMEDIATE RELEASE
UScellular reports fourth quarter and full year 2022 results
Provides guidance for 2023

CHICAGO (February 16, 2023) — United States Cellular Corporation (NYSE:USM) reported total operating revenues of $1,048 million for the fourth quarter of 2022, versus $1,068 million for the same period one year ago. Net income (loss) attributable to UScellular shareholders and related diluted earnings (loss) per share were $(28) million and $(0.33), respectively, for the fourth quarter of 2022 compared to $27 million and $0.31, respectively, in the same period one year ago.
UScellular reported total operating revenues of $4,169 million and $4,122 million for the years ended 2022 and 2021, respectively. Net income attributable to UScellular shareholders and related diluted earnings per share were $30 million and $0.35, respectively, for the year ended 2022 compared to $155 million and $1.77, respectively, for the year ended 2021.
“At UScellular, our purpose is to keep customers connected to what matters most to them. As we celebrate our 40th anniversary, we will continue to execute on that mission.
“In 2022 we focused on expanding ARPU, improving customer results, and maintaining financial discipline,” said Laurent Therivel, UScellular President and CEO. “And while we are seeing progress in certain key leading indicators, we recognize that we have more work to do.
“We have also seen good momentum from investing in growth areas, as our fixed wireless connections increased by over 50% during 2022, and our tower revenues grew by double-digit percentage points in the year. Additionally, we remain on track with our multi-year network modernization and 5G programs.
“In 2023, we will continue to focus on customer growth, cost optimization, and investing in 5G expansion.”
1


2023 Estimated Results

UScellular’s current estimates of full-year 2023 results are shown below. Such estimates represent management’s view as of February 16, 2023 and should not be assumed to be current as of any future date. UScellular undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results.
 2023 Estimated ResultsActual Results for
the Year Ended
December 31, 2022
(Dollars in millions)  
Service revenues$3,050-$3,150$3,125
Adjusted OIBDA1
$725-$875$790
Adjusted EBITDA1
$875-$1,025$956
Capital expenditures$600-$700$717
The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2023 estimated results, UScellular has not completed the below reconciliation to Net income because it does not provide guidance for income taxes. Although potentially significant, UScellular believes that the impact of income taxes cannot be reasonably predicted; therefore, UScellular is unable to provide such guidance.
 2023 Estimated Results Actual Results for
the Year Ended
December 31, 2022
(Dollars in millions)  
Net income (GAAP)N/A$35 
Add back:  
Income tax expenseN/A37 
Income before income taxes (GAAP)$10-$160$72 
Add back: 
Interest expense205163 
Depreciation, amortization and accretion expense645700 
EBITDA (Non-GAAP)1
$860-$1,010$935 
Add back or deduct: 
Loss on impairment of licenses— 
(Gain) loss on asset disposals, net1519 
(Gain) loss on sale of business and other exit costs, net(1)
Adjusted EBITDA (Non-GAAP)1
$875-$1,025$956 
Deduct: 
Equity in earnings of unconsolidated entities145158 
Interest and dividend income5
Adjusted OIBDA (Non-GAAP)1
$725-$875$790 
1EBITDA, Adjusted EBITDA, and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA, and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. UScellular does not intend to imply that any such items set forth in the reconciliation above are non-recurring, infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of UScellular’s operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of UScellular’s financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The table above reconciles EBITDA, Adjusted EBITDA, and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for December 31, 2022, can be found on UScellular’s website at investors.uscellular.com.
2


Stock Repurchase
During the fourth quarter of 2022, UScellular repurchased 578,607 of its Common Shares for $14 million.
Conference Call Information
UScellular will hold a conference call on February 17, 2023 at 9:00 a.m. Central Time.
Access the live call on the Events & Presentations page of investors.uscellular.com or at
https://events.q4inc.com/attendee/661339725
Access the call by phone at (888) 330-2384 (US/Canada), conference ID: 1328528

Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.uscellular.com. The call will be archived on the Events & Presentations page of investors.uscellular.com.
About UScellular
United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to customers with 4.7 million retail connections in 21 states. The Chicago-based company had 4,900 full- and part-time associates as of December 31, 2022. At the end of the fourth quarter of 2022, Telephone and Data Systems, Inc. owned 84 percent of UScellular. For more information about UScellular, visit uscellular.com.
Contacts
Colleen Thompson, Vice President - Corporate Relations of TDS
colleen.thompson@tdsinc.com
Julie Mathews, IRC, Director - Investor Relations of TDS
julie.mathews@tdsinc.com
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: intense competition; the ability to attract people of outstanding talent throughout all levels of the organization; UScellular's smaller scale relative to larger competitors; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of UScellular's businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which UScellular does business; uncertainties in UScellular’s future cash flows and liquidity and access to the capital markets; the ability to make payments on UScellular indebtedness or comply with the terms of debt covenants; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; cyber-attacks or other breaches of network or information technology security; potential conflicts of interests between TDS and UScellular; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under “Risk Factors” in the most recent filing of UScellular's Form 10-K.
For more information about UScellular, visit: www.uscellular.com
3


United States Cellular Corporation
Summary Operating Data (Unaudited)
As of or for the Quarter Ended12/31/20229/30/20226/30/20223/31/202212/31/2021
Retail Connections     
Postpaid     
Total at end of period4,247,000 4,264,000 4,296,000 4,335,000 4,380,000 
Gross additions154,000 151,000 128,000 126,000 165,000 
Feature phones6,000 5,000 4,000 2,000 3,000 
Smartphones99,000 102,000 90,000 89,000 122,000 
Connected devices49,000 44,000 34,000 35,000 40,000 
Net additions (losses)(17,000)(31,000)(40,000)(44,000)(12,000)
Feature phones(6,000)(6,000)(8,000)(10,000)(7,000)
Smartphones(14,000)(16,000)(23,000)(26,000)5,000 
Connected devices3,000 (9,000)(9,000)(8,000)(10,000)
ARPU1
$50.60 $50.21 $50.07 $49.71 $48.62 
ARPA2
$130.97 $130.27 $130.43 $129.93 $127.14 
Churn rate3
1.35 %1.42 %1.30 %1.30 %1.35 %
Handsets1.12 %1.15 %1.10 %1.10 %1.10 %
Connected devices2.99 %3.40 %2.73 %2.70 %3.08 %
Prepaid
Total at end of period493,000 493,000 490,000 495,000 513,000 
Gross additions61,000 62,000 56,000 55,000 63,000 
Net additions (losses) 2,000 (4,000)(18,000)(5,000)
ARPU1
$33.34 $35.04 $35.25 $34.59 $34.53 
Churn rate3
4.11 %4.07 %4.07 %4.84 %4.39 %
Market penetration at end of period
Consolidated operating population32,370,000 32,370,000 32,370,000 32,370,000 32,127,000 
Consolidated operating penetration4
15 %15 %15 %15 %15 %
Capital expenditures (millions)$176 $136 $268 $137 $321 
Total cell sites in service6,945 6,933 6,916 6,899 6,898 
Owned towers4,336 4,329 4,323 4,310 4,301 
Due to rounding, the sum of quarterly results may not equal the total for the year.
1Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below:
Postpaid ARPU consists of total postpaid service revenues and postpaid connections.
Prepaid ARPU consists of total prepaid service revenues and prepaid connections.
2Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.
3Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.
4Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets.
4


United States Cellular Corporation
Consolidated Statement of Operations Highlights
(Unaudited)
 
 Three Months Ended
December 31,
 Year Ended
December 31,
 2022 2021 2022 vs. 2021 2022 2021 2022 vs. 2021
(Dollars and shares in millions, except per share amounts)      
Operating revenues      
Service$774 $782 (1)%$3,125 $3,115 
Equipment sales274 286 (4)%1,044 1,007 %
Total operating revenues1,048 1,068 (2)%4,169 4,122 %
Operating expenses      
System operations (excluding Depreciation, amortization and accretion reported below)181 196 (8)%755 790 (4)%
Cost of equipment sold330 332 (1)%1,216 1,118 %
Selling, general and administrative374 359 %1,408 1,345 %
Depreciation, amortization and accretion179 169 %700 678 %
Loss on impairment of licenses — 3 — N/M
(Gain) loss on asset disposals, net11 28 %19 23 (18)%
(Gain) loss on sale of business and other exit costs, net (1)78 %(1)(2)52 %
Total operating expenses1,075 1,063 %4,100 3,952 %
Operating income (loss)(27)N/M69 170 (59)%
Investment and other income (expense)      
Equity in earnings of unconsolidated entities36 43 (16)%158 179 (12)%
Interest and dividend income3 N/M8 35 %
Interest expense(49)(32)(52)%(163)(175)%
Total investment and other income(10)12 N/M3 10 (73)%
Income (loss) before income taxes(37)17 N/M72 180 (60)%
Income tax expense (benefit)(9)(11)14 %37 20 79 %
Net income (loss)(28)28 N/M35 160 (78)%
Less: Net income attributable to noncontrolling interests, net of tax (51)%5 (3)%
Net income (loss) attributable to UScellular shareholders$(28)$27 N/M$30 $155 (81)%
Basic weighted average shares outstanding85 86 (1)%85 86 (1)%
Basic earnings (loss) per share attributable to UScellular shareholders$(0.33)$0.31 N/M$0.35 $1.80 (80)%
Diluted weighted average shares outstanding85 87 (2)%86 87 (1)%
Diluted earnings (loss) per share attributable to UScellular shareholders$(0.33)$0.31 N/M$0.35 $1.77 (80)%
N/M - Percentage change not meaningful
5


United States Cellular Corporation
Consolidated Statement of Cash Flows
(Unaudited)
Year Ended December 31,20222021
(Dollars in millions)  
Cash flows from operating activities
Net income$35 $160 
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities  
Depreciation, amortization and accretion700 678 
Bad debts expense132 56 
Stock-based compensation expense24 27 
Deferred income taxes, net33 41 
Equity in earnings of unconsolidated entities(158)(179)
Distributions from unconsolidated entities145 176 
Loss on impairment of licenses3 — 
(Gain) loss on asset disposals, net19 23 
(Gain) loss on sale of business and other exit costs, net(1)(2)
Other operating activities9 33 
Changes in assets and liabilities from operations
Accounts receivable(59)(27)
Equipment installment plans receivable(199)(116)
Inventory(88)(27)
Accounts payable12 (57)
Customer deposits and deferred revenues47 40 
Accrued taxes121 (41)
Other assets and liabilities57 17 
Net cash provided by operating activities832 802 
Cash flows from investing activities
Cash paid for additions to property, plant and equipment(602)(724)
Cash paid for licenses(585)(1,302)
Cash received from divestitures and exchanges8 
Advance payments for license acquisitions (20)
Other investing activities 
Net cash used in investing activities(1,179)(2,036)
Cash flows from financing activities
Issuance of long-term debt800 1,342 
Repayment of long-term debt(329)(1,118)
Issuance of short-term debt110 — 
Repayment of short-term debt(50)— 
Common Shares reissued for benefit plans, net of tax payments(5)(16)
Repurchase of Common Shares(43)(31)
Payment of debt issuance costs(1)(22)
Distributions to noncontrolling interests(3)(3)
Cash paid for software license agreements(22)(9)
Other financing activities(1)(1)
Net cash provided by financing activities456 142 
Net increase (decrease) in cash, cash equivalents and restricted cash109 (1,092)
Cash, cash equivalents and restricted cash
Beginning of period199 1,291 
End of period$308 $199 
6


United States Cellular Corporation
Consolidated Balance Sheet Highlights
(Unaudited)
ASSETS
December 31,20222021
(Dollars in millions)  
Current assets  
Cash and cash equivalents$273 $156 
Accounts receivable, net1,072 1,046 
Inventory, net261 173 
Prepaid expenses68 58 
Income taxes receivable4 123 
Other current assets45 49 
Total current assets1,723 1,605 
Assets held for sale26 18 
Licenses4,690 4,088 
Investments in unconsolidated entities452 439 
Property, plant and equipment, net2,624 2,606 
Operating lease right-of-use assets918 959 
Other assets and deferred charges686 626 
Total assets$11,119 $10,341 
7


United States Cellular Corporation
Consolidated Balance Sheet Highlights
(Unaudited)
LIABILITIES AND EQUITY
December 31,20222021
(Dollars in millions, except per share amounts)  
Current liabilities  
Current portion of long-term debt$13 $
Accounts payable356 360 
Customer deposits and deferred revenues239 191 
Accrued taxes35 33 
Accrued compensation84 83 
Short-term operating lease liabilities133 129 
Other current liabilities335 104 
Total current liabilities1,195 903 
Deferred liabilities and credits  
Deferred income tax liability, net708 674 
Long-term operating lease liabilities843 889 
Other deferred liabilities and credits604 573 
Long-term debt, net3,187 2,728 
Noncontrolling interests with redemption features
12 11 
Equity  
UScellular shareholders’ equity  
Series A Common and Common Shares, par value $1.00 per share88 88 
Additional paid-in capital1,703 1,678 
Treasury shares(98)(68)
Retained earnings2,861 2,849 
Total UScellular shareholders’ equity4,554 4,547 
Noncontrolling interests16 16 
Total equity4,570 4,563 
Total liabilities and equity$11,119 $10,341 
8


United States Cellular Corporation
Financial Measures and Reconciliations
(Unaudited)

Free Cash Flow
 Three Months Ended
December 31,
Year Ended
December 31,
 2022202120222021
(Dollars in millions)
Cash flows from operating activities (GAAP)$180 $135 $832 $802 
Cash paid for additions to property, plant and equipment(192)(268)(602)(724)
Cash paid for software license agreements(17)(5)(22)(9)
Free cash flow (Non-GAAP)1
$(29)$(138)$208 $69 
1Free cash flow is a non-GAAP financial measure which UScellular believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.
9
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Document and Entity Document
Feb. 16, 2023
Entity Central Index Key 0000821130
Document Type 8-K
Document Period End Date Feb. 16, 2023
Entity Registrant Name UNITED STATES CELLULAR CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 001-09712
Entity Tax Identification Number 62-1147325
Entity Address, Address Line One 8410 West Bryn Mawr
Entity Address, City or Town Chicago
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60631
City Area Code (773)
Local Phone Number 399-8900
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Common Shares  
Title of 12(b) Security Common Shares, $1 par value
Trading Symbol USM
Security Exchange Name NYSE
6.25% Senior Notes  
Title of 12(b) Security 6.25% Senior Notes due 2069
Trading Symbol UZD
Security Exchange Name NYSE
5.50% Senior Notes  
Title of 12(b) Security 5.50% Senior Notes due 2070
Trading Symbol UZE
Security Exchange Name NYSE
5.50 % Senior Notes  
Title of 12(b) Security 5.50% Senior Notes due 2070
Trading Symbol UZF
Security Exchange Name NYSE
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