United States Cellular Corporation (NYSE:USM) Q4 2023 Earnings Conference Call February 16, 2024 10:00 AM ET Company Participants Colleen Thompson - VP, Corporate Relations Vicki Villacrez - EVP & CFO Laurent Therivel - President, CEO & Director Douglas Chambers - EVP, CFO and Treasurer Michelle Brukwicki - CFO, TDS Telecommunications LLC Conference Call Participants Richard Prentiss - Raymond James Simon Flannery - Morgan Stanley Michael Rollins - Citigroup Sergey Dluzhevskiy - GAMCO Investors Operator Goo ...

Customer Connections and Performance - UScellular serves 4.6 million retail connections, including 4.1 million postpaid and 0.5 million prepaid connections, operating in 21 states with 4,300 employees and 4,373 owned towers[138] - Total postpaid connections decreased from 4,247,000 in 2022 to 4,106,000 in 2023, while prepaid connections decreased from 493,000 to 451,000[143] - Postpaid ARPU increased by 2% to $51.01 in 2023, driven by favorable plan and product mix, while Postpaid ARPA remained flat at $130.91[146] - Postpaid handset net losses increased by 32% to 145,000 in 2023, primarily due to aggressive industry-wide competition and lower gross additions[144] - UScellular served 4.6 million retail connections as of December 31, 2023[269] Financial Performance and Revenues - Total operating revenues decreased by 6% to $3,906 million in 2023, with retail service revenues declining by 2% to $2,742 million and equipment sales revenues dropping by 17% to $862 million[149] - Net income increased by 67% to $58 million in 2023, with Adjusted OIBDA and Adjusted EBITDA growing by 4% and 3% to $818 million and $986 million, respectively[149] - Net income attributable to UScellular shareholders increased by 80% to $54 million in 2023, compared to $30 million in 2022[162] - Total operating revenues decreased to $3,906 million in 2023 from $4,169 million in 2022, a decline of 6.3%[250] - Net income attributable to UScellular shareholders increased to $54 million in 2023 from $30 million in 2022, an 80% increase[250] - Net income attributable to UScellular shareholders rose to $54 million in 2023 from $30 million in 2022, with diluted earnings per share of $0.63[340] Capital Expenditures and Investments - Capital expenditures decreased by 15% to $611 million in 2023, reflecting reduced spending on network infrastructure[149] - UScellular's capital expenditures for 2024 are expected to range between $550 million and $650 million, primarily for network upgrades and 5G deployment[192] - Cash flows used for investing activities in 2023 totaled $721 million, including $608 million for property, plant, and equipment, and $130 million for wireless spectrum licenses[201] - Cash paid for additions to property, plant and equipment was $608 million in 2023, slightly higher than $602 million in 2022[252] - UScellular's free cash flow for 2023 is $192 million, compared to $208 million in 2022, calculated as cash flows from operating activities ($866 million) minus cash paid for property, plant, and equipment ($608 million) and software license agreements ($66 million)[245] Strategic Alternatives and Expenses - UScellular incurred $8 million in third-party expenses related to exploring strategic alternatives, with potential financial impacts still uncertain[140] - Selling, general, and administrative expenses decreased in 2023, primarily due to lower bad debts, commissions, facilities, and employee-related expenses, partially offset by higher advertising expenses and $8 million in strategic alternatives review costs[160] - UScellular incurred third-party expenses of $8 million in 2023 related to the strategic alternatives review[302] - UScellular is exploring strategic alternatives, but there is no assurance that these efforts will result in additional value for shareholders or avoid adverse impacts on its business[235] Network and Spectrum Deployment - The company continued its 5G deployment, focusing on mid-band spectrum to enhance speed and capacity for mobility and fixed wireless services[141] - UScellular was the provisional winning bidder for 254 wireless spectrum licenses in Auction 107 for $1,283 million, with $30 million paid in 2020 and the remainder in March 2021[226] - UScellular was the provisional winning bidder for 380 wireless spectrum licenses in Auction 110 for $580 million, with $20 million paid in 2021 and the remainder in the first quarter of 2022[227] - UScellular was the provisional winning bidder for 34 wireless spectrum licenses in Auction 108 for $3 million, with licenses granted by the FCC on December 1, 2022[228] - UScellular acquired 380 wireless spectrum licenses in the 3.45-3.55 GHz band for $580 million in Auction 110, with payments completed in 2022[343] Expenses and Cost Management - System operations expenses decreased in 2023, primarily due to lower roaming and customer usage expenses, partially offset by higher maintenance, utility, and cell site expenses[158] - Cost of equipment sold decreased in 2023, driven by a decline in smartphone upgrades and gross additions, partially offset by a higher average cost per unit sold[159] - Depreciation, amortization, and accretion expenses decreased in 2023 due to enhancements extending the useful life of a software platform[161] - Depreciation and amortization expense for 2023 was $637 million, down from $682 million in 2022[346] - Implementation costs for cloud-hosted arrangements were $24 million in 2023, down from $42 million in 2022, with amortization costs of $17 million in 2023[278] Debt and Financial Obligations - Interest expense increased by 21% to $196 million in 2023, driven by higher interest rates on variable rate debt[164] - UScellular had $600 million in available undrawn borrowing capacity as of December 31, 2023, including $300 million under a revolving credit agreement[173][174] - UScellular's credit ratings as of December 31, 2023, were Ba1 (Moody's), BB (Standard & Poor's), and BB+ (Fitch Ratings), with a stable outlook from Moody's and Fitch[187] - UScellular repaid $50 million under its receivables securitization agreement in January 2024[178] - UScellular's long-term debt as of December 31, 2023, is $2.98 billion, with 70% in fixed-rate senior notes and 30% in variable-rate debt[236] - The weighted average interest rate on UScellular's long-term debt is 6.4%, with principal payments due in 2024 at $20 million (7.1%) and in 2028 at $286 million (7.5%)[237] - The estimated fair value of UScellular's long-term debt obligations at December 31, 2023, is $2.611 billion, compared to a book value of $3.099 billion[238] - UScellular has a total maximum borrowing capacity of $800 million across three term loans, with $783 million borrowed and outstanding as of December 31, 2023[361] - The company has a $150 million term loan credit facility with Export Development Canada, fully borrowed as of December 31, 2023, bearing interest at SOFR plus 1.60%[362] Cash Flow and Liquidity - UScellular's cash, cash equivalents, and restricted cash decreased by $129 million in 2023, with net cash provided by operating activities at $866 million[200] - Cash flows used for financing activities in 2023 were $274 million, primarily due to repayments of $440 million on the receivables securitization agreement[202] - Net cash provided by operating activities increased to $866 million in 2023 from $832 million in 2022, a 4.1% increase[252] - Cash and cash equivalents decreased from $273 million in 2022 to $150 million in 2023, while restricted cash decreased from $35 million to $29 million[274] Assets and Liabilities - UScellular's inventory decreased by $62 million in 2023 due to efforts to reduce inventory on hand[208] - The fair value of UScellular's wireless spectrum licenses exceeded the carrying value by 17% in 2023, with no impairment recorded[215] - UScellular's accounts payable, trade decreased by $103 million in 2023 due to the timing of vendor invoice payments related to inventory[209] - UScellular's other current liabilities decreased by $181 million in 2023 due to the payment of Auction 107 relocation fees and repayments on the EIP receivables repurchase agreement[210] - Total assets decreased to $10,750 million in 2023 from $11,119 million in 2022, a 3.3% decline[254] - Long-term debt decreased to $3,044 million in 2023 from $3,187 million in 2022, a 4.5% reduction[257] - UScellular shareholders' equity increased to $4,626 million in 2023 from $4,554 million in 2022, a 1.6% increase[257] - Inventory decreased to $199 million in 2023 from $261 million in 2022, a 23.8% reduction[254] - Accounts receivable decreased to $900 million in 2023 from $985 million in 2022, an 8.6% decline[254] - Total current liabilities decreased to $901 million in 2023 from $1,195 million in 2022, a 24.6% reduction[257] - UScellular's total equity increased from $4,554 million in 2022 to $4,626 million in 2023, reflecting a net income attributable to UScellular shareholders of $54 million[259] - Property, plant, and equipment, net, decreased slightly to $2.576 billion in 2023 from $2.624 billion in 2022, with gross assets of $9.560 billion[346] Leasing and Real Estate - Total lease costs for 2023 were $203 million, including $191 million in operating lease costs and $12 million in variable lease costs[351] - Operating cash flows from operating leases increased to $194 million in 2023, up from $185 million in 2022 and $183 million in 2021[352] - Right-of-use assets obtained in exchange for lease obligations were $158 million in 2023, compared to $113 million in 2022 and $182 million in 2021[352] - Weighted average remaining lease term increased to 13 years in 2023 from 12 years in 2022, with a weighted average discount rate of 4.3% in 2023, up from 3.9% in 2022[352] - Total lease payments for operating leases amount to $1,340 million, with a present value of lease liabilities at $966 million after deducting imputed interest of $374 million[352] - Variable lease income from operating leases reached $101 million in 2023, up from $93 million in 2022 and $83 million in 2021[355] - Total future lease maturities expected to be received amount to $282 million, with $80 million due in 2024[356] - Legally binding lease payments for leases signed but not yet commenced total $28 million, excluded from total lease payments[352] - Asset retirement obligations are associated with leased cell sites, switching office sites, retail store sites, and office locations, included in Other deferred liabilities and credits[357] Revenue Recognition and Contract Liabilities - Contract assets were $4 million as of December 31, 2023, compared to $5 million in 2022[318] - Contract liabilities were $331 million as of December 31, 2023, compared to $349 million in 2022[318] - Revenue recognized related to contract liabilities existing at January 1, 2023, was $220 million for the year ended December 31, 2023[318] - Contract cost asset balance related to commission fees and other costs was $127 million at December 31, 2023, compared to $131 million in 2022[321] Equipment Installment Plans and Credit Losses - Equipment installment plan receivables, net, were $1,061 million as of December 31, 2023, compared to $1,115 million in 2022[329] - Equipment installment plan receivables totaled $1.151 billion as of December 31, 2023, compared to $1.211 billion in 2022, with the majority classified as "Lowest Risk" ($1.024 billion in 2023 vs. $1.070 billion in 2022)[330] - Write-offs, net of recoveries, for equipment installment plan receivables amounted to $75 million in 2023, with $45 million originating from 2022[330] - The allowance for credit losses decreased to $90 million at the end of 2023 from $96 million in 2022, with bad debts expense of $69 million in 2023[331] Taxes and Deferred Tax Liabilities - Total income tax expense for 2023 was $53 million, up from $37 million in 2022, with a federal deferred tax expense of $28 million[332] - UScellular's net deferred income tax liability increased to $755 million in 2023 from $708 million in 2022, driven by deferred tax assets of $669 million and liabilities of $1.278 billion[333] Advertising and Employee Benefits - Advertising costs totaled $181 million in 2023, $171 million in 2022, and $184 million in 2021[295] - Pension costs were $11 million in 2023, $12 million in 2022, and $12 million in 2021[300] - Total costs for UScellular's contributions to the 401(k) plan were $15 million for each of 2023, 2022, and 2021[301] Risks and Challenges - UScellular faces risks from intense competition, changes in roaming practices, and potential declines in roaming revenues, which could adversely affect its business and financial condition[231] - The company's inability to attract and retain diverse talent could negatively impact its operations and financial performance[231] - UScellular's smaller scale compared to larger competitors may hinder its ability to compete effectively, potentially affecting its financial results[231] - The company's reliance on the U.S. wireless telecommunications industry makes its operating results susceptible to fluctuations in this sector[235] Miscellaneous - Amounts collected from customers and remitted to governmental authorities totaled $63 million in 2023, $61 million in 2022, and $66 million in 2021[312] - UScellular's wireless spectrum licenses are considered indefinite-lived intangible assets, with no impairment identified as of the latest assessment[279]

United States Cellular Corporation (NYSE:USM) Q3 2023 Earnings Conference Call November 3, 2023 10:00 AM ET Company Participants Colleen Thompson - VP, Corporate Relations Vicki Villacrez - SVP, Finance & CFO, TDS Telecommunications Corporation Laurent Therivel - President, CEO & Director Douglas Chambers - EVP, CFO and Treasurer Michelle Brukwicki - CFO, TDS Telecommunications LLC Conference Call Participants Richard Prentiss - Raymond James & Associates Philip Cusick - JPMorgan Chase & Co. Simon Flannery ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09712 UNITED STATES CELLULAR CORPORATION (Exact name of Registrant as specified in its charter) (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09712 UNITED STATES CELLULAR CORPORATION Delaware 62-1147325 8410 West Bryn Mawr, Chicago, Illinois 60631 (Address of principal e ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09712 The number of shares outstanding of each of the issuer's classes of common stock, as of March 31, 2023, is 51,712,600 Comm ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09712 UNITED STATES CELLULAR CORPORATION (Exact name of Registrant as specified in its charter) Delaware 62-1147325 (State or other j ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09712 UNITED STATES CELLULAR CORPORATION (Exact name of Registrant as specified in its charter) (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09712 UNITED STATES CELLULAR CORPORATION (Exact name of Registrant as specified in its charter) (State or other jurisdiction of i ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-09712 UNITED STATES CELLULAR CORPORATION (Exact name of Registrant as specified in its charter) (State or other jurisdiction of ...