FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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 25, 2015
UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
|
Delaware
|
1-9712
|
62-1147325
|
|
(State or other jurisdiction of
incorporation or organization)
|
(Commission
File Number)
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
8410 West Bryn Mawr, Chicago, Illinois
|
60631
|
|
(Address of principal executive offices)
|
(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 (see General Instruction A.2. below):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item 2.02. Results of Operations and Financial
Condition
On February 25, 2015,
United States Cellular Corporation (“U.S. Cellular”) issued a news release
announcing its results of operations for the period ended December 31,
2014. 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.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits:
In
accordance with the provisions of Item 601 of Regulation S-K, any Exhibits
filed or furnished herewith are set forth on the Exhibit Index attached hereto.
Attached
as Exhibit 99.2 is a safe harbor cautionary statement under the Private
Securities Litigation Reform Act of 1995.
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, thereto duly
authorized.
United
States Cellular Corporation
(Registrant)
Date:
February 25, 2015
|
By:
|
/s/
Steven T. Campbell
|
|
|
|
Steven
T. Campbell
Executive
Vice President – Finance,
Chief
Financial Officer and Treasurer
(principal
financial officer)
|
|
EXHIBIT
INDEX
The following
exhibits are filed or furnished herewith as noted below.
|
Exhibit
No.
|
|
Description
|
|
99.1
|
|
Earnings
Press Release dated February 25, 2015
|
|
|
|
|
|
99.2
|
|
Private
Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement
|
Exhibit 99.l NEWS RELEASE
As previously announced,
U.S. Cellular will hold a teleconference Feb. 25, 2015 at 9:30 a.m. CST.
Listen to the live call via the Events & Presentations page of investors.uscellular.com.
FOR
IMMEDIATE RELEASE
U.S. cellular reports fourth quarter 2014 results
Provides 2015 guidance
CHICAGO, (Feb. 25, 2015) —
United States Cellular Corporation (NYSE:USM) reported total operating revenues
of $1,008.7 million for the fourth quarter of 2014, versus $902.7 million for
the same period one year ago. Net income (loss) attributable to U.S. Cellular shareholders
and related diluted earnings (loss) per share were $(21.3) million and $(0.25)
respectively, for the fourth quarter of 2014, compared to $1.6 million and $0.02,
respectively, in the comparable period one year ago.
“We accomplished our top
priority in 2014 and grew our customer base,” said Kenneth R. Meyers, U.S.
Cellular president and CEO. “U.S. Cellular’s strong value proposition that
offers a high-quality network and competitive devices, plans and pricing drove
this result, along with customer service that is back to our normal high standards.
“We continued to invest in our
network, bringing 4G LTE to 94 percent of our postpaid customers. And to ensure
that the company can remain competitive and meet broadband demands, U.S.
Cellular and its partners were successful in acquiring valuable spectrum in the
most recent auction.
“In 2015, we plan to build upon
our 2014 accomplishments. We will continue to invest in our network, further
expanding our deployment of 4G LTE and testing new technologies such as Voice
over LTE. We also will remain very focused on growing our customer base and increasing
revenue driven by smartphone adoption and data monetization, although a
continuation of the current aggressive pricing environment could provide a
headwind to these efforts. Growing our top line while improving our cost
structure should lead to improved profitability.”
2015
Estimated Results
U.S. Cellular’s estimates of
full-year 2015 results are shown below. Such estimates represent U.S. Cellular’s
view as of February 25, 2015. Such forward‑looking statements should not
be assumed to be current as of any future date. U.S. Cellular undertakes no
duty to update such information, whether as a result of new information, future
events or otherwise. There can be no assurance that final results will not
differ materially from such estimated results.
U.S. Cellular has changed one
of the measures which it uses to present estimates of future operating
results. U.S. Cellular previously presented adjusted income before income
taxes, defined as income before income taxes, adjusted for: Depreciation, amortization
and accretion; net Gain or loss on sale of business and other exit costs (if
any); net Gain or loss on license sales and exchanges (if any); net Gain or
loss on investments ( if any); and interest expense. U.S. Cellular is now
presenting Operating cash flow and Adjusted earnings before interest, taxes,
depreciation, amortization and accretion (“Adjusted EBITDA”), as defined below,
which it believes are measures which provide a comprehensive view of U.S
Cellular’s recurring results of operations.
|
|
|
|
|
|
|
(Dollars in millions)
|
2015 Estimated Results
|
|
Actual Results for the
Year Ended December 31, 2014
|
|
Total operating revenues
|
$4,000-$4,200
|
|
$3,893
|
|
Operating cash flow (1)
|
$350-$450
|
|
$338
|
|
Adjusted EBITDA (1)
|
$530-$630
|
|
$480
|
|
Capital expenditures
|
$600
|
|
$558
|
(1)
Operating cash flow is defined as
net income, adjusted for the items set forth in the reconciliation below.
Adjusted EBITDA is defined as net income, adjusted for the items set forth in
the reconciliation below. Operating cash flow and Adjusted EBITDA exclude
these items in order to show operating results on a more comparable basis from
period to period. From time to time, U.S. Cellular may exclude other items from
Operating cash flow and/or Adjusted EBITDA if such items help reflect operating
results on a more comparable basis. U.S. Cellular does not intend to imply that
any such items that are excluded are non-recurring, infrequent or unusual; such
items may occur in the future. Operating cash flow and Adjusted EBITDA 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 as indicators of the company’s operating performance
or as alternatives to cash flows from operating activities, determined in
accordance with GAAP, as indicators of cash flows or as measures of liquidity.
U.S. Cellular believes Operating cash flow and Adjusted EBITDA are useful
measures of U.S. Cellular’s operating results before significant recurring
non-cash charges, gains and losses, and other items as indicated below. The
following tables provide a reconciliation to Operating cash flow and Adjusted
EBITDA for 2015 estimated results and year ended December 31, 2014 actual
results:
|
|
|
2015 Estimated Results
(2)
|
|
Actual Results for the
Year Ended
December 31, 2014
|
|
(Dollars in millions)
|
|
|
|
|
Net income (loss) (GAAP)
|
N/A
|
|
($47)
|
|
Add back:
|
|
|
|
|
|
Income tax expense (benefit)
|
N/A
|
|
($12)
|
|
Income (loss) before income taxes (GAAP)
|
($10)-$90
|
|
($59)
|
|
Add back:
|
|
|
|
|
|
Interest expense
|
$85
|
|
$57
|
|
|
Depreciation, amortization and accretion expense
|
$545
|
|
$606
|
|
EBITDA
|
$620-$720
|
|
$605
|
|
Add back:
|
|
|
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
($105)
|
|
($33)
|
|
|
(Gain) loss on license sales and exchanges
|
—
|
|
($113)
|
|
|
(Gain) loss on asset disposals, net
|
$15
|
|
$21
|
|
Adjusted EBITDA (3)
|
$530-$630
|
|
$480
|
|
Deduct:
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
($130)
|
|
($130)
|
|
|
Interest and dividend income
|
($50)
|
|
($12)
|
|
Operating cash flow (4)
|
$350-$450
|
|
$338
|
(2)
In providing 2015
Estimated Results, U.S. Cellular has not completed the above reconciliation to net income because it does not provide guidance for
income taxes. U.S. Cellular believes that the impact of income taxes cannot be
reasonably predicted; therefore, the company is unable to provide such
guidance. Accordingly, a reconciliation to net income is not available without
unreasonable effort.
(3)
Adjusted EBITDA (new
measure) equals adjusted income before income taxes (previous measure) excluding
gain or loss on asset disposals, net. See Adjusted EBITDA reconciliation for full
year 2014, 2013, and 2012 on the company’s website at investors.uscellular.com.
(4)
A reconciliation of Operating cash
flow (Non-GAAP) to operating income (GAAP) for full year 2014, 2013, and 2012
actual results can be found on the company's website at investors.uscellular.com.
Conference
Call Information
U.S. Cellular will hold a
conference call on Feb. 25, 2015 at
9:30 a.m. CST.
§ Access the live call on the Events & Presentation page
of investors.uscellular.com or at http://www.videonewswire.com/event.asp?id=101572.
§ Access the call by phone at 877/407-8029 (US/Canada),
no pass code required.
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 U.S. Cellular
United States Cellular
Corporation provides a comprehensive range of wireless products and services,
excellent customer support, and a high-quality network to 4.8 million customers
in 23 states. The Chicago-based company had 6,600 full- and part-time
associates as of Dec. 31, 2014. At the end of the fourth quarter of 2014,
Telephone and Data Systems, Inc. owned 84 percent of U.S. Cellular. For more
information about U.S. Cellular, visit uscellular.com.
Contacts
Jane McCahon, Vice President,
Corporate Relations and Corporate Secretary
312-592-5379
jane.mccahon@tdsinc.com
Julie Mathews, Investor
Relations Manager
312-592-5341
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: impacts of any
pending acquisition and divestiture transactions, including, but not limited
to, the ability to obtain regulatory approvals, successfully complete the
transactions and the financial impacts of such transactions; the ability of the
company to successfully manage and grow its markets; the overall economy;
competition; the ability to obtain or maintain roaming arrangements with other
carriers on acceptable terms; the state and federal telecommunications regulatory
environment; the value of assets and investments; adverse changes in the
ratings afforded TDS and U.S. Cellular debt securities by accredited ratings
organizations; industry consolidation; advances in telecommunications
technology; uncertainty of access to the capital markets; pending and
future litigation; changes in income tax rates, laws, regulations or rulings;
changes in customer growth rates, average monthly revenue per user, churn
rates, roaming revenue and terms, the availability of wireless devices, or the
mix of products and services offered by U.S. Cellular. Investors are encouraged
to consider these and other risks and uncertainties that are discussed in the
Form 8-K Current Report used by U.S. Cellular to furnish this press release to
the Securities and Exchange Commission (“SEC”), which are incorporated by
reference herein.
|
United
States Cellular Corporation
|
|
Total Markets* Summary
Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Quarter Ended
|
12/31/2014
|
|
9/30/2014
|
|
6/30/2014
|
|
3/31/2014
|
|
12/31/2013
|
|
Retail Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
4,298,000
|
|
|
4,200,000
|
|
|
4,148,000
|
|
|
4,174,000
|
|
|
4,267,000
|
|
|
|
Gross additions
|
|
302,000
|
|
|
251,000
|
|
|
190,000
|
|
|
197,000
|
|
|
176,000
|
|
|
|
Net additions (losses)
|
|
98,000
|
|
|
52,000
|
|
|
(26,000)
|
|
|
(93,000)
|
|
|
(71,000)
|
|
|
|
ARPU (1)
|
$
|
56.51
|
|
$
|
56.37
|
|
$
|
56.82
|
|
$
|
57.59
|
|
$
|
53.53
|
|
|
|
ARPA (2)
|
$
|
136.13
|
|
$
|
132.99
|
|
$
|
131.95
|
|
$
|
132.03
|
|
$
|
121.21
|
|
|
|
Churn rate (3)
|
|
1.6%
|
|
|
1.6%
|
|
|
1.7%
|
|
|
2.3%
|
|
|
1.9%
|
|
|
|
Smartphone penetration (4)
|
|
59.8%
|
|
|
57.9%
|
|
|
55.3%
|
|
|
53.1%
|
|
|
50.8%
|
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
348,000
|
|
|
350,000
|
|
|
352,000
|
|
|
356,000
|
|
|
343,000
|
|
|
|
Gross additions
|
|
60,000
|
|
|
64,000
|
|
|
65,000
|
|
|
85,000
|
|
|
63,000
|
|
|
|
Net additions (losses)
|
|
(2,000)
|
|
|
(2,000)
|
|
|
(4,000)
|
|
|
13,000
|
|
|
(26,000)
|
|
|
|
ARPU (1)
|
$
|
35.33
|
|
$
|
34.40
|
|
$
|
34.02
|
|
$
|
32.22
|
|
$
|
31.66
|
|
|
|
Churn rate (3)
|
|
5.9%
|
|
|
6.3%
|
|
|
6.5%
|
|
|
6.9%
|
|
|
8.3%
|
|
Total customers at end of period
|
|
4,760,000
|
|
|
4,674,000
|
|
|
4,653,000
|
|
|
4,684,000
|
|
|
4,774,000
|
|
Billed ARPU (1)
|
$
|
53.63
|
|
$
|
53.24
|
|
$
|
53.36
|
|
$
|
53.93
|
|
$
|
50.25
|
|
Service revenue ARPU (1)
|
$
|
60.10
|
|
$
|
60.92
|
|
$
|
60.32
|
|
$
|
60.19
|
|
$
|
57.05
|
|
Smartphones sold as a percent of total
handsets sold
|
|
86.5%
|
|
|
80.8%
|
|
|
79.0%
|
|
|
78.2%
|
|
|
84.5%
|
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (5)
|
|
50,906,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
58,013,000
|
|
|
|
Consolidated operating markets (5)
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,759,000
|
|
Market penetration at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (6)
|
|
9.4%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.2%
|
|
|
|
Consolidated operating markets (6)
|
|
15.0%
|
|
|
14.7%
|
|
|
14.7%
|
|
|
14.8%
|
|
|
15.0%
|
|
Capital expenditures (000s)
|
$
|
181,655
|
|
$
|
142,452
|
|
$
|
143,927
|
|
$
|
89,581
|
|
$
|
208,135
|
|
Total cell sites in service
|
|
6,220
|
|
|
6,209
|
|
|
6,183
|
|
|
6,165
|
|
|
6,975
|
|
Owned towers
|
|
4,281
|
|
|
4,487
|
|
|
4,457
|
|
|
4,448
|
|
|
4,448
|
*
Represents U.S. Cellular’s consolidated
markets. These results include markets which U. S. Cellular currently
consolidates, or previously consolidated in the periods presented, and are not
adjusted in prior periods for subsequent divestitures or deconsolidations.
Refer to U.S. Cellular’s Form 8-K filed on February 26, 2014 for pro
forma financial information related to the Divestiture Transaction and the NY1
and NY2 Deconsolidation for the three and twelve months ended December 31, 2013,
as if the transactions had occurred at the beginning of the period.
|
United
States Cellular Corporation
|
|
Core* Markets Summary
Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Quarter Ended
|
12/31/2014
|
|
9/30/2014
|
|
6/30/2014
|
|
3/31/2014
|
|
12/31/2013
|
|
Retail Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
4,298,000
|
|
|
4,200,000
|
|
|
4,148,000
|
|
|
4,174,000
|
|
|
4,267,000
|
|
|
|
Gross additions
|
|
302,000
|
|
|
251,000
|
|
|
190,000
|
|
|
197,000
|
|
|
176,000
|
|
|
|
Net additions (losses)
|
|
98,000
|
|
|
52,000
|
|
|
(26,000)
|
|
|
(93,000)
|
|
|
(71,000)
|
|
|
|
ARPU (1)
|
$
|
56.51
|
|
$
|
56.37
|
|
$
|
56.82
|
|
$
|
57.59
|
|
$
|
53.53
|
|
|
|
ARPA (2)
|
$
|
136.13
|
|
$
|
132.99
|
|
$
|
131.95
|
|
$
|
132.03
|
|
$
|
121.21
|
|
|
|
Churn rate (3)
|
|
1.6%
|
|
|
1.6%
|
|
|
1.7%
|
|
|
2.3%
|
|
|
1.9%
|
|
|
|
Smartphone penetration (4)
|
|
59.8%
|
|
|
57.9%
|
|
|
55.3%
|
|
|
53.1%
|
|
|
50.8%
|
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
348,000
|
|
|
350,000
|
|
|
352,000
|
|
|
356,000
|
|
|
343,000
|
|
|
|
Gross additions
|
|
60,000
|
|
|
64,000
|
|
|
65,000
|
|
|
85,000
|
|
|
63,000
|
|
|
|
Net additions (losses)
|
|
(2,000)
|
|
|
(2,000)
|
|
|
(4,000)
|
|
|
13,000
|
|
|
(26,000)
|
|
|
|
ARPU (1)
|
$
|
35.33
|
|
$
|
34.40
|
|
$
|
34.02
|
|
$
|
32.22
|
|
$
|
31.66
|
|
|
|
Churn rate (3)
|
|
5.9%
|
|
|
6.3%
|
|
|
6.5%
|
|
|
6.9%
|
|
|
8.3%
|
|
Total customers at end of period
|
|
4,760,000
|
|
|
4,674,000
|
|
|
4,653,000
|
|
|
4,684,000
|
|
|
4,774,000
|
|
Billed ARPU (1)
|
$
|
53.63
|
|
$
|
53.24
|
|
$
|
53.36
|
|
$
|
53.93
|
|
$
|
50.25
|
|
Service revenue ARPU (1)
|
$
|
60.10
|
|
$
|
60.92
|
|
$
|
60.32
|
|
$
|
60.19
|
|
$
|
57.05
|
|
Smartphones sold as a percent of total
handsets sold
|
|
86.5%
|
|
|
80.8%
|
|
|
79.0%
|
|
|
78.2%
|
|
|
84.5%
|
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (5)
|
|
50,906,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
58,013,000
|
|
|
|
Consolidated operating markets (5)
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,759,000
|
|
Market penetration at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (6)
|
|
9.4%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.2%
|
|
|
|
Consolidated operating markets (6)
|
|
15.0%
|
|
|
14.7%
|
|
|
14.7%
|
|
|
14.8%
|
|
|
15.0%
|
|
Capital expenditures (000s)
|
$
|
181,655
|
|
$
|
142,452
|
|
$
|
143,927
|
|
$
|
89,581
|
|
$
|
211,247
|
|
Total cell sites in service
|
|
6,220
|
|
|
6,209
|
|
|
6,183
|
|
|
6,165
|
|
|
6,161
|
|
Owned towers
|
|
3,951
|
|
|
3,922
|
|
|
3,892
|
|
|
3,883
|
|
|
3,883
|
* U.S. Cellular’s Core Markets excludes the results
of the Divestiture Markets and NY1 and NY2 Partnerships for the periods
presented.
Refer
to U.S. Cellular’s Form 8-K filed on February 26, 2014 for pro forma financial
information related to the Divestiture Transaction and the NY1 and NY2
Deconsolidation for the three and twelve months ended December 31, 2013, as if
the transactions had occurred at the beginning of the period.
(1)
Average Revenue Per User (“ARPU”)
metrics are calculated by dividing a revenue base by an average number of
customers by the number of months in the period. These revenue bases and
customer populations are shown below:
a.
Postpaid ARPU consists of total
postpaid service revenues and postpaid customers.
b.
Prepaid ARPU consists of total
prepaid service revenues and prepaid customers.
c.
Billed ARPU consists of total postpaid,
prepaid and reseller service revenues and postpaid, prepaid and reseller
customers.
d.
Service revenue ARPU consists of total
postpaid, prepaid and reseller service revenues, inbound roaming and other
service revenues and postpaid, prepaid and reseller customers.
(2)
Average Revenue Per Account
(“ARPA”) metric is calculated by dividing total postpaid service revenues by
the average number of postpaid accounts by the number of months in the period.
(3)
Churn metrics represent the
percentage of the postpaid or prepaid customers that disconnect service each
month. These metrics represent the average monthly postpaid or prepaid churn
rate for each respective period.
(4)
Smartphones represent wireless
devices which run on an Android, Apple, BlackBerry or Windows Mobile operating
system, excluding connected devices. Smartphone penetration is calculated by
dividing postpaid smartphone customers by total postpaid customers.
(5)
The decrease in the population of consolidated
markets is due primarily to the divestiture of the majority of the St. Louis
area non-operating market license in March 2014, and certain non-operating
licenses in North Carolina in December 2014. Total Population is used only to
calculate market penetration of consolidated markets and consolidated operating
markets, respectively. See footnote (6) below.
(6)
Market penetration is calculated by
dividing the number of wireless customers at the end of the period by the total
population of consolidated markets and consolidated operating markets,
respectively, as estimated by Claritas. The increase in consolidated markets penetration
is due primarily to a lower denominator as a result of the license divestitures
described in footnote (5) above.
|
United
States Cellular Corporation
|
|
Consolidated Statement of
Operations Highlights
|
|
Three Months Ended
December 31,
|
|
(Unaudited, dollars and
shares in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
$
|
849,788
|
|
$
|
825,128
|
|
$
|
24,660
|
|
3%
|
|
|
Equipment sales
|
|
158,956
|
|
|
77,596
|
|
|
81,360
|
|
>100%
|
|
|
|
Total operating revenues
|
|
1,008,744
|
|
|
902,724
|
|
|
106,020
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
System operations (excluding Depreciation, amortization
and accretion
reported below)
|
|
202,423
|
|
|
177,438
|
|
|
24,985
|
|
14%
|
|
|
Cost of equipment sold
|
|
342,355
|
|
|
346,847
|
|
|
(4,492)
|
|
(1%)
|
|
|
Selling, general and administrative
|
|
394,553
|
|
|
442,720
|
|
|
(48,167)
|
|
(11%)
|
|
|
Depreciation, amortization and accretion
|
|
140,955
|
|
|
210,371
|
|
|
(69,416)
|
|
(33%)
|
|
|
(Gain) loss on asset disposals, net
|
|
4,695
|
|
|
14,453
|
|
|
(9,758)
|
|
(68%)
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(5,136)
|
|
|
(3,140)
|
|
|
(1,996)
|
|
(64%)
|
|
|
(Gain) loss on sale of license sales and exchanges
|
|
(21,547)
|
|
|
(255,479)
|
|
|
233,932
|
|
92%
|
|
|
|
Total operating expenses
|
|
1,058,298
|
|
|
933,210
|
|
|
125,088
|
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
(49,554)
|
|
|
(30,486)
|
|
|
(19,068)
|
|
(63%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
23,598
|
|
|
32,152
|
|
|
(8,554)
|
|
(27%)
|
|
|
Interest and dividend income
|
|
6,119
|
|
|
994
|
|
|
5,125
|
|
>100%
|
|
|
Gain (loss) on investments
|
|
—
|
|
|
29
|
|
|
(29)
|
|
N/M
|
|
|
Interest expense
|
|
(14,674)
|
|
|
(11,570)
|
|
|
(3,104)
|
|
(27%)
|
|
|
Other, net
|
|
(121)
|
|
|
135
|
|
|
(256)
|
|
>(100%)
|
|
|
|
Total investment and other income (expense)
|
|
14,922
|
|
|
21,740
|
|
|
(6,818)
|
|
(31%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
(34,632)
|
|
|
(8,746)
|
|
|
(25,886)
|
|
>(100%)
|
|
|
Income tax expense (benefit)
|
|
(12,528)
|
|
|
(8,484)
|
|
|
(4,044)
|
|
(48%)
|
|
Net loss
|
|
(22,104)
|
|
|
(262)
|
|
|
(21,842)
|
|
>(100%)
|
|
|
Less: Net income (loss) attributable to noncontrolling
interests, net of tax
|
|
(764)
|
|
|
(1,854)
|
|
|
1,090
|
|
59%
|
|
Net income (loss) attributable to U.S. Cellular
shareholders
|
$
|
(21,340)
|
|
$
|
1,592
|
|
$
|
(22,932)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
84,066
|
|
|
84,181
|
|
|
(115)
|
|
—
|
|
Basic earnings (loss) per share attributable to U.S.
Cellular shareholders
|
$
|
(0.25)
|
|
$
|
0.02
|
|
$
|
(0.27)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
84,066
|
|
|
85,033
|
|
|
(967)
|
|
(1%)
|
|
Diluted earnings (loss) per share attributable to U.S.
Cellular shareholders
|
$
|
(0.25)
|
|
$
|
0.02
|
|
$
|
(0.27)
|
|
>(100%)
|
|
United
States Cellular Corporation
|
|
Consolidated Statement of
Operations Highlights
|
|
Twelve Months Ended
December 31,
|
|
(Unaudited, dollars and
shares in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
$
|
3,397,937
|
|
$
|
3,594,773
|
|
$
|
(196,836)
|
|
(5%)
|
|
|
Equipment sales
|
|
494,810
|
|
|
324,063
|
|
|
170,747
|
|
53%
|
|
|
|
Total operating revenues
|
|
3,892,747
|
|
|
3,918,836
|
|
|
(26,089)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
System operations (excluding Depreciation, amortization
and accretion
reported below)
|
|
769,911
|
|
|
763,435
|
|
|
6,476
|
|
1%
|
|
|
Cost of equipment sold
|
|
1,192,669
|
|
|
999,000
|
|
|
193,669
|
|
19%
|
|
|
Selling, general and administrative
|
|
1,591,914
|
|
|
1,677,395
|
|
|
(85,481)
|
|
(5%)
|
|
|
Depreciation, amortization and accretion
|
|
605,997
|
|
|
803,781
|
|
|
(197,784)
|
|
(25%)
|
|
|
(Gain) loss on asset disposals, net
|
|
21,469
|
|
|
30,606
|
|
|
(9,137)
|
|
(30%)
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(32,830)
|
|
|
(246,767)
|
|
|
213,937
|
|
87%
|
|
|
(Gain) loss on license sales and exchanges
|
|
(112,993)
|
|
|
(255,479)
|
|
|
142,486
|
|
56%
|
|
|
|
Total operating expenses
|
|
4,036,137
|
|
|
3,771,971
|
|
|
264,166
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
(143,390)
|
|
|
146,865
|
|
|
(290,255)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
129,764
|
|
|
131,949
|
|
|
(2,185)
|
|
(2%)
|
|
|
Interest and dividend income
|
|
12,148
|
|
|
3,961
|
|
|
8,187
|
|
>100%
|
|
|
Gain (loss) on investments
|
|
—
|
|
|
18,556
|
|
|
(18,556)
|
|
N/M
|
|
|
Interest expense
|
|
(57,386)
|
|
|
(43,963)
|
|
|
(13,423)
|
|
(31%)
|
|
|
Other, net
|
|
160
|
|
|
288
|
|
|
(128)
|
|
(44%)
|
|
|
|
Total investment and other income (expense)
|
|
84,686
|
|
|
110,791
|
|
|
(26,105)
|
|
(24%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
(58,704)
|
|
|
257,656
|
|
|
(316,360)
|
|
>(100%)
|
|
|
Income tax expense (benefit)
|
|
(11,782)
|
|
|
113,134
|
|
|
(124,916)
|
|
>(100%)
|
|
Net income (loss)
|
|
(46,922)
|
|
|
144,522
|
|
|
(191,444)
|
|
>(100%)
|
|
|
Less: Net income (loss) attributable to noncontrolling
interests, net of tax
|
|
(4,110)
|
|
|
4,484
|
|
|
(8,594)
|
|
>(100%)
|
|
Net income (loss) attributable to U.S. Cellular
shareholders
|
$
|
(42,812)
|
|
$
|
140,038
|
|
$
|
(182,850)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
84,213
|
|
|
83,968
|
|
|
245
|
|
—
|
|
Basic earnings (loss) per share attributable to U.S.
Cellular shareholders
|
$
|
(0.51)
|
|
$
|
1.67
|
|
$
|
(2.18)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
84,213
|
|
|
84,730
|
|
|
(517)
|
|
(1%)
|
|
Diluted earnings (loss) per share attributable to U.S.
Cellular shareholders
|
$
|
(0.51)
|
|
$
|
1.65
|
|
$
|
(2.16)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special dividend per share to U.S. Cellular shareholders
|
$
|
—
|
|
$
|
5.75
|
|
$
|
(5.75)
|
|
N/M
|
|
United
States Cellular Corporation
|
|
Consolidated Balance
Sheet Highlights
|
|
(Unaudited, dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
211,513
|
|
$
|
342,065
|
|
|
Short-term investments
|
|
—
|
|
|
50,104
|
|
|
Accounts receivable from customers and others
|
|
556,958
|
|
|
586,595
|
|
|
Inventory, net
|
|
267,068
|
|
|
238,188
|
|
|
Prepaid expenses
|
|
59,744
|
|
|
65,596
|
|
|
Net deferred income tax asset
|
|
93,058
|
|
|
99,105
|
|
|
Other current assets
|
|
90,834
|
|
|
19,538
|
|
|
|
|
1,279,175
|
|
|
1,401,191
|
|
|
|
|
|
|
|
|
|
Assets held for sale
|
|
107,055
|
|
|
16,027
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Licenses
|
|
1,443,438
|
|
|
1,401,126
|
|
|
Goodwill
|
|
370,151
|
|
|
387,524
|
|
|
Investments in unconsolidated entities
|
|
283,014
|
|
|
265,585
|
|
|
|
|
2,096,603
|
|
|
2,054,235
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
In service and under construction
|
|
7,458,740
|
|
|
7,717,512
|
|
|
Less: Accumulated depreciation
|
|
4,730,523
|
|
|
4,860,992
|
|
|
|
|
2,728,217
|
|
|
2,856,520
|
|
|
|
|
|
|
|
|
|
Other assets and deferred charges
|
|
276,218
|
|
|
117,735
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
6,487,268
|
|
$
|
6,445,708
|
|
United
States Cellular Corporation
|
|
Consolidated Balance
Sheet Highlights
|
|
(Unaudited, dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2014
|
|
2013
|
|
Current liabilities
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
$
|
46
|
|
$
|
166
|
|
|
Accounts payable
|
|
|
|
|
|
|
|
|
Affiliated
|
|
9,774
|
|
|
11,243
|
|
|
|
Trade
|
|
306,845
|
|
|
405,583
|
|
|
Customer deposits and deferred revenues
|
|
287,562
|
|
|
256,740
|
|
|
Accrued taxes
|
|
36,652
|
|
|
73,820
|
|
|
Accrued compensation
|
|
66,162
|
|
|
66,566
|
|
|
Other current liabilities
|
|
149,853
|
|
|
192,055
|
|
|
|
|
|
856,894
|
|
|
1,006,173
|
|
|
|
|
|
|
|
|
|
|
Liabilities held for sale
|
|
20,934
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Deferred liabilities and credits
|
|
|
|
|
|
|
|
Net deferred income tax liability
|
|
859,867
|
|
|
836,297
|
|
|
Other deferred liabilities and credits
|
|
284,002
|
|
|
315,073
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,151,819
|
|
|
878,032
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests with redemption features
|
|
1,150
|
|
|
536
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
U.S. Cellular shareholders' equity
|
|
|
|
|
|
|
|
Series A Common and Common Shares, par value $1 per share
|
|
88,074
|
|
|
88,074
|
|
|
Additional paid-in capital
|
|
1,472,558
|
|
|
1,424,729
|
|
|
Treasury shares
|
|
(169,139)
|
|
|
(164,692)
|
|
|
Retained earnings
|
|
1,910,498
|
|
|
2,043,095
|
|
|
|
Total U.S. Cellular shareholders' equity
|
|
3,301,991
|
|
|
3,391,206
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests
|
|
10,611
|
|
|
18,391
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
3,312,602
|
|
|
3,409,597
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
$
|
6,487,268
|
|
$
|
6,445,708
|
United States Cellular Corporation
Schedule of Cash and Cash Equivalents and Investments
(Unaudited, dollars in thousands)
The following table
presents U.S. Cellular’s cash and cash equivalents and investments at December
31, 2014 and December 31, 2013.
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
211,513
|
|
$
|
342,065
|
|
|
|
|
|
|
|
|
|
Amounts included in short-term investments (1)(2)
|
|
|
|
|
|
|
|
U.S. Treasury Notes
|
|
—
|
|
|
50,104
|
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents and investments
|
$
|
211,513
|
|
$
|
392,169
|
(1)
Designated as held-to-maturity
investments and are recorded at amortized cost in the Consolidated Balance Sheet.
(2)
Maturities are less than twelve
months from the respective balance sheet dates.
|
United
States Cellular Corporation
|
|
Consolidated Statement of
Cash Flows
|
|
Twelve Months Ended
December 31,
|
|
(Unaudited, dollars in
thousands)
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
(46,922)
|
|
$
|
144,522
|
|
|
Add (deduct) adjustments to reconcile net income to cash
flows from
operating activities
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
605,997
|
|
|
803,781
|
|
|
|
|
Bad debts expense
|
|
101,282
|
|
|
98,864
|
|
|
|
|
Stock-based compensation expense
|
|
22,383
|
|
|
15,844
|
|
|
|
|
Deferred income taxes, net
|
|
57,604
|
|
|
(75,348)
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
(129,764)
|
|
|
(131,949)
|
|
|
|
|
Distributions from unconsolidated entities
|
|
112,336
|
|
|
125,660
|
|
|
|
|
(Gain) loss on asset disposals, net
|
|
21,469
|
|
|
30,606
|
|
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(32,830)
|
|
|
(246,767)
|
|
|
|
|
(Gain) loss on license sales and exchanges
|
|
(112,993)
|
|
|
(255,479)
|
|
|
|
|
(Gain) loss on investments
|
|
—
|
|
|
(18,556)
|
|
|
|
|
Noncash interest expense
|
|
1,155
|
|
|
1,059
|
|
|
|
|
Other operating activities
|
|
26
|
|
|
646
|
|
|
Changes in assets and liabilities from operations
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
12,547
|
|
|
(291,168)
|
|
|
|
|
Equipment installment plans receivable
|
|
(188,829)
|
|
|
(591)
|
|
|
|
|
Inventory
|
|
(28,878)
|
|
|
(82,422)
|
|
|
|
|
Accounts payable - trade
|
|
(95,587)
|
|
|
85,199
|
|
|
|
|
Accounts payable - affiliate
|
|
(2,590)
|
|
|
147
|
|
|
|
|
Customer deposits and deferred revenues
|
|
33,524
|
|
|
66,344
|
|
|
|
|
Accrued taxes
|
|
(99,483)
|
|
|
30,037
|
|
|
|
|
Accrued interest
|
|
1,307
|
|
|
273
|
|
|
|
|
Other assets and liabilities
|
|
(59,412)
|
|
|
(9,805)
|
|
|
|
|
|
|
172,342
|
|
|
290,897
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Cash used for additions to property, plant and equipment
|
|
(605,083)
|
|
|
(717,862)
|
|
|
Cash paid for acquisitions and licenses
|
|
(38,150)
|
|
|
(16,540)
|
|
|
Cash received from divestitures
|
|
179,842
|
|
|
811,120
|
|
|
Cash received for investments
|
|
50,000
|
|
|
100,000
|
|
|
Federal Communications Commission deposit
|
|
(60,000)
|
|
|
—
|
|
|
Other investing activities
|
|
2,619
|
|
|
(3,969)
|
|
|
|
|
|
|
(470,772)
|
|
|
172,749
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Issuance of long-term debt
|
|
275,000
|
|
|
—
|
|
|
Repayment of borrowing under revolving credit facility
|
|
(150,000)
|
|
|
—
|
|
|
Borrowing under revolving credit facility
|
|
150,000
|
|
|
—
|
|
|
Common shares reissued for benefit plans, net of tax
payments
|
|
830
|
|
|
5,784
|
|
|
Common shares repurchased
|
|
(18,943)
|
|
|
(18,544)
|
|
|
Payment of debt issuance costs
|
|
(9,644)
|
|
|
(23)
|
|
|
Acquisition of licenses in common control transaction
|
|
(76,298)
|
|
|
—
|
|
|
Dividends paid
|
|
—
|
|
|
(482,270)
|
|
|
Distributions to noncontrolling interests
|
|
(3,056)
|
|
|
(3,766)
|
|
|
Payments to acquire additional interest in subsidiaries
|
|
—
|
|
|
(1,005)
|
|
|
Other financing activities
|
|
(11)
|
|
|
(115)
|
|
|
|
|
|
|
167,878
|
|
|
(499,939)
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
(130,552)
|
|
|
(36,293)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
Beginning of period
|
|
342,065
|
|
|
378,358
|
|
|
End of period
|
$
|
211,513
|
|
$
|
342,065
|
|
United
States Cellular Corporation
|
|
Financial Measures and
Reconciliations
|
|
(Unaudited, dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
$
|
(158,289)
|
|
$
|
(5,336)
|
|
$
|
172,342
|
|
$
|
290,897
|
|
|
Add: Sprint Cost Reimbursement
|
|
|
19,085
|
|
|
9,429
|
|
|
71,097
|
|
|
10,560
|
|
|
Less: Cash used for additions to property,
plant and equipment
|
|
|
180,309
|
|
|
195,682
|
|
|
605,083
|
|
|
717,862
|
|
|
|
Adjusted free cash flow (1)
|
|
$
|
(319,513)
|
|
$
|
(191,589)
|
|
$
|
(361,644)
|
|
$
|
(416,405)
|
(1)
Adjusted free cash flow is defined
as Cash flows from operating activities (which includes cash outflows related
to the Sprint decommissioning), as adjusted for cash proceeds from the Sprint
Cost Reimbursement (which are included in Cash flows from investing activities
in the Consolidated Statement of Cash Flows), less Cash used for additions to
property, plant and equipment. Adjusted free cash flow is a non-GAAP financial
measure which U.S. Cellular believes may be useful to investors and other users
of its financial information in evaluating the amount of cash generated by
business operations (including cash proceeds from the Sprint Cost
Reimbursement), after Cash used for additions to property, plant and equipment.
Exhibit 99.2
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR CAUTIONARY STATEMENT
This Form 8-K and/or press
release attached to this Form 8-K contain statements that are not based on
historical facts and represent forward-looking statements, as this term is
defined in the Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical facts, that address activities,
events or developments that U.S. Cellular intends, expects, projects, believes,
estimates, plans or anticipates will or may occur in the future are
forward-looking statements. The words “believes,” “anticipates,”
“estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions
are intended to identify these forward-looking statements, but are not the
exclusive means of identifying them. Such forward‑looking statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results, events or developments to be significantly different from any
future results, events or developments expressed or implied by such forward‑looking
statements. Such risks, uncertainties and other factors include those set
forth below, as more fully discussed under “Risk Factors” in the most recent
filing of U.S. Cellular’s Form 10-K, as updated by any U.S. Cellular Form 10-Q
filed subsequent to such Form 10-K. However, such factors are not
necessarily all of the important factors that could cause actual results,
performance or achievements to differ materially from those expressed in, or
implied by, the forward-looking statements contained in this document.
Other unknown or unpredictable factors also could have material adverse effects
on future results, performance or achievements. U.S. Cellular undertakes
no obligation to update publicly any forward-looking statements whether as a
result of new information, future events or otherwise. You should
carefully consider the Risk Factors in the most recent filing of U.S.
Cellular’s Form 10-K, as updated by any U.S. Cellular Form 10-Q filed
subsequent to such Form 10-K, the following factors and other information
contained in, or incorporated by reference into, this Form 8-K and/or press
release attached to this Form 8-K to understand the material risks relating to
U.S. Cellular’s business.
·
Intense
competition in the markets in which U.S. Cellular operates could adversely
affect U.S. Cellular’s revenues or increase its costs to compete.
·
A failure
by U.S. Cellular to successfully execute its business strategy (including
planned acquisitions, divestitures and exchanges) or allocate resources or
capital could have an adverse effect on U.S. Cellular’s business, financial
condition or results of operations.
·
U.S. Cellular offers customers
the option to purchase certain devices under installment contracts, which
creates certain risks and uncertainties which could have an adverse impact on
U.S. Cellular's financial condition or results of operations.
·
Changes in
roaming practices or other factors could cause U.S. Cellular's roaming revenues
to decline from current levels and/or impact U.S. Cellular's ability to service
its customers in geographic areas where U.S. Cellular does not have its own
network, which could have an adverse effect on U.S. Cellular's business,
financial condition or results of operations.
·
A failure
by U.S. Cellular to obtain access to adequate radio spectrum to meet current or
anticipated future needs and/or to accurately predict future needs for radio
spectrum could have an adverse effect on U.S. Cellular’s business, financial
condition or results of operations.
·
To the
extent conducted by the Federal Communications Commission (“FCC”), U.S.
Cellular is likely to participate in FCC auctions of additional spectrum in the
future as an applicant or as a noncontrolling partner in another auction
applicant and, during certain periods, will be subject to the FCC’s
anti-collusion rules, which could have an adverse effect on U.S. Cellular.
·
Changes in
the regulatory environment or a failure by U.S. Cellular to timely or
fully comply with any applicable regulatory requirements could adversely affect
U.S. Cellular’s business, financial condition or results of operations.
·
An
inability to attract people of outstanding potential, to develop their
potential through education and assignments, and to retain them by keeping them
engaged, challenged and properly rewarded could have an adverse effect on U.S.
Cellular's business, financial condition or results of operations.
·
U.S. Cellular’s
assets are concentrated in the U.S. wireless telecommunications industry.
As a result, its results of operations may fluctuate based on factors related
primarily to conditions in this industry.
·
U.S. Cellular’s lower scale
relative to larger competitors could adversely affect its business, financial
condition or results of operations.
·
Changes in
various business factors could have an adverse effect on U.S. Cellular’s
business, financial condition or results of operations.
·
Advances
or changes in technology could render certain technologies used by
U.S. Cellular obsolete, could put U.S. Cellular at a competitive
disadvantage, could reduce U.S. Cellular’s revenues or could increase its
costs of doing business.
·
Complexities associated with
deploying new technologies present substantial risk.
·
U.S. Cellular is subject to
numerous surcharges and fees from federal, state and local governments, and the
applicability and the amount of these fees are subject to great uncertainty.
·
Performance
under device purchase agreements could have a material adverse impact on U.S.
Cellular's business, financial condition or results of operations.
·
Changes in U.S. Cellular’s
enterprise value, changes in the market supply or demand for wireless licenses,
adverse developments in the business or the industry in which
U.S. Cellular is involved and/or other factors could require
U.S. Cellular to recognize impairments in the carrying value of its
licenses, goodwill and/or physical assets.
·
Costs,
integration problems or other factors associated with acquisitions,
divestitures or exchanges of properties or licenses and/or expansion of
U.S. Cellular’s business could have an adverse effect on
U.S. Cellular’s business, financial condition or results of operations.
·
U.S. Cellular’s
investments in unproven technologies may not produce the benefits that
U.S. Cellular expects.
·
A failure
by U.S. Cellular to complete significant network construction and systems
implementation activities as part of its plans to improve the quality, coverage,
capabilities and capacity of its network, support and other systems and
infrastructure could have an adverse effect on its operations.
·
Difficulties
involving third parties with which U.S. Cellular does business, including
changes in U.S. Cellular's relationships with or financial or operational
difficulties of key suppliers or independent agents and third party national
retailers who market U.S. Cellular services, could adversely affect
U.S. Cellular’s business, financial condition or results of operations.
·
U.S. Cellular
has significant investments in entities that it does not control. Losses in the
value of such investments could have an adverse effect on U.S. Cellular’s
financial condition or results of operations.
·
A failure
by U.S. Cellular to maintain flexible and capable telecommunication networks or
information technology, or a material disruption thereof, could have an adverse
effect on U.S. Cellular’s business, financial condition or results of
operations.
·
Cyber-attacks
or other breaches of network or information technology security could have an
adverse effect on U.S. Cellular's business, financial condition or results of
operations.
·
The market
price of U.S. Cellular’s Common Shares is subject to fluctuations due to a
variety of factors.
·
Changes in
facts or circumstances, including new or additional information, could require
U.S. Cellular to record charges in excess of amounts accrued in the
financial statements, which could have an adverse effect on
U.S. Cellular’s business, financial condition or results of operations.
·
Disruption
in credit or other financial markets, a deterioration of U.S. or global
economic conditions or other events could, among other things, impede U.S.
Cellular’s access to or increase the cost of financing its operating and
investment activities and/or result in reduced revenues and lower operating
income and cash flows, which would have an adverse effect on U.S. Cellular’s
business, financial condition or results of operations.
·
Uncertainty
of U.S. Cellular’s ability to access capital, deterioration in the capital
markets, other changes in market conditions, changes in U.S. Cellular’s
credit ratings or other factors could limit or restrict the availability of
financing on terms and prices acceptable to U.S. Cellular, which could
require U.S. Cellular to reduce its construction, development or
acquisition programs.
·
Settlements,
judgments, restraints on its current or future manner of doing business and/or
legal costs resulting from pending and future litigation could have an adverse
effect on U.S. Cellular’s business, financial condition or results of
operations.
·
The
possible development of adverse precedent in litigation or conclusions in
professional studies to the effect that radio frequency emissions from wireless
devices and/or cell sites cause harmful health consequences, including cancer
or tumors, or may interfere with various electronic medical devices such as
pacemakers, could have an adverse effect on U.S. Cellular’s business,
financial condition or results of operations.
·
Claims of
infringement of intellectual property and proprietary rights of others,
primarily involving patent infringement claims, could prevent U.S. Cellular
from using necessary technology to provide products or services or subject U.S.
Cellular to expensive intellectual property litigation or monetary penalties,
which could have an adverse effect on U.S. Cellular’s business, financial
condition or results of operations.
·
There are
potential conflicts of interests between TDS and U.S. Cellular.
·
Certain
matters, such as control by TDS and provisions in the U.S. Cellular
Restated Certificate of Incorporation, may serve to discourage or make more
difficult a change in control of U.S. Cellular.
·
Any of the
foregoing events or other events could cause revenues, earnings, capital
expenditures and/or any other financial or statistical information to vary from
U.S. Cellular’s forward-looking estimates by a material amount.
U.S. Cellular undertakes no
obligation to update publicly any forward-looking statements whether as a
result of new information, future events or otherwise. Readers should
evaluate any statements in light of these important factors.
US Cellular (NYSE:USM)
Historical Stock Chart
From Mar 2024 to Apr 2024
US Cellular (NYSE:USM)
Historical Stock Chart
From Apr 2023 to Apr 2024
