CHICAGO, Feb. 24, 2017 /PRNewswire/ -- United States
Cellular Corporation (NYSE:USM) reported total operating revenues
of $991 million for the fourth
quarter of 2016, versus $987 million
for the same period one year ago. Net loss attributable to U.S.
Cellular shareholders and related diluted loss per share were
$6 million and $0.07, respectively, for the fourth quarter of
2016, compared to $2 million and
$0.02, respectively, in the
comparable period one year ago.
U.S. Cellular reported total operating revenues of $3,939 million and $3,997
million for the years ended 2016 and 2015,
respectively. Net income attributable to U.S. Cellular
shareholders and related diluted earnings per share were
$48 million and $0.56, respectively, for the year ended 2016,
compared to $241 million and
$2.84, respectively, for the year
ended 2015.
For the full year 2016, after adjusting for discrete items, U.S.
Cellular generated Operating Cash Flow of $631 million, up 2% from 2015 and Adjusted EBITDA
of $829 million, up 4% from
2015. Discrete items include a $58
million revenue benefit in 2015 related to the
discontinuation of the loyalty rewards program and 2016 includes a
$13 million expense related to the
discontinuation of a naming rights agreement. A
reconciliation can be found on the Company's website.
"2016 was a year of continued progress for U.S. Cellular,"
said Kenneth R. Meyers, U.S. Cellular President and
CEO. "Our local and personal approach to providing an
exceptional customer experience continues to stand out, generating
consistently low-levels of phone churn each quarter. As some of the
most competitive pricing promotions persist across the industry, we
have worked to balance growth and profitability, which enabled us
to hit our profitability targets, albeit with slower customer
growth. Greater smartphone adoption and increased data usage,
combined with strong cost management, helped to offset some of the
competitive pricing pressures throughout the year.
"We continue to invest in our network which is the foundation of
our value proposition. In 2016 we provided additional
capacity to handle the 20% growth in data traffic and readied one
of our largest markets, Iowa, for
VoLTE deployment. This was accomplished while managing our
capital expenditures to the lowest level in 15 years.
"As we look into 2017, we are focusing on building our customer
base through our superior network and outstanding customer service,
while remaining disciplined in our promotional efforts. We will
continue to drive costs out of the business, while capitalizing on
opportunities to drive additional revenue via accessory sales, the
internet of things, and business and government connections."
2017 Estimated Results
U.S. Cellular's estimates of full-year 2017 results are shown
below. Such estimates represent management's view as of
February 24, 2017. 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.
2017
Estimated Results and Actual Results for the Year Ended
December 31, 2016
|
|
|
|
|
|
|
|
|
Estimate
|
|
Actual
|
(Dollars in
millions)
|
|
|
|
|
|
Total operating
revenues (1)
|
|
$3,800-$4,000
|
|
$
|
3,939
|
Operating cash flow
(2)
|
|
$500-$650
|
|
$
|
618
|
Adjusted EBITDA
(2)
|
|
$650-$800
|
|
$
|
816
|
Capital
expenditures
|
|
Approx.
$ 500
|
|
$
|
446
|
The following table provides reconciliation to Operating Cash
Flow and Adjusted EBITDA for 2017 estimated results, and actual
results for the year ended December
31, 2016. In providing 2017 Estimated Results, U.S.
Cellular has not completed the below reconciliation to net income
because it does not provide guidance for income taxes.
Although potentially significant, 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.
|
|
|
|
|
2017 Estimated
Results
|
|
|
Actual Results for
the Year
Ended
December 31,
2016
|
(Dollars in
millions)
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
|
|
N/A
|
|
$
|
49
|
Add back:
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
|
N/A
|
|
|
33
|
Income (loss)
before income taxes (GAAP)
|
|
$
|
(110)-40
|
|
$
|
82
|
Add back:
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
110
|
|
|
113
|
|
Depreciation,
amortization and accretion expense
|
|
|
630
|
|
|
618
|
EBITDA
(Non-GAAP)
|
|
$
|
630-780
|
|
$
|
813
|
Add back
(deduct):
|
|
|
|
|
|
|
|
(Gain) loss on sale
of business and other exit costs,
net
|
|
|
–
|
|
|
–
|
|
(Gain) loss on
license sales and exchanges, net
|
|
|
–
|
|
|
(19)
|
|
(Gain) loss on assets
disposals, net
|
|
|
20
|
|
|
22
|
Adjusted EBITDA
(Non-GAAP) (2)
|
|
$
|
650-800
|
|
$
|
816
|
Deduct:
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
|
140
|
|
|
140
|
|
Interest and dividend
income(1)
|
|
|
10
|
|
|
57
|
|
Other, net
|
|
|
–
|
|
|
1
|
Operating cash flow
(Non-GAAP) (2)(3)
|
|
$
|
500-650
|
|
$
|
618
|
|
|
|
|
|
|
|
|
|
Note: Totals may not
foot due to rounding differences.
|
|
|
(1)
|
In 2016, Imputed
interest related to equipment installment plans was recorded in
Interest and dividend income. Beginning in 2017, imputed
interest will be recorded in service revenues. The company
recorded $51 million in imputed interest in 2016.
|
|
|
(2)
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation, amortization and
accretion) is defined as net income adjusted for the items set
forth in the reconciliation above. Operating cash flow is
defined as net income adjusted for the items set forth in the
reconciliation above. Adjusted EBITDA and Operating cash flow
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. U.S. Cellular 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 Operating cash flow as
measurements of profitability, and therefore reconciliations to
applicable GAAP income measures are deemed appropriate.
Management believes Adjusted EBITDA and Operating cash flow are
useful measures of U.S. Cellular'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 U.S. Cellular'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 Operating cash flow 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 Adjusted EBITDA and Operating cash flow to
the corresponding GAAP measure, Net income or Income (loss) before
income taxes.
|
|
|
(3)
|
A reconciliation of
Operating cash flow (Non-GAAP) to Operating income (GAAP) for full
year 2016, 2015 and 2014 actual results can be found on the
Guidance and Reconciliation page of the company's website at
investors.uscellular.com.
|
Conference Call Information
U.S. Cellular will hold a conference call on February 24, 2017 at 9:30
a.m. Central Time.
- Access the live call on the Events & Presentation page of
investors.uscellular.com or at
https://www.webcaster4.com/Webcast/Page/1145/19842.
- 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 5 million connections in 23
states. The Chicago-based company
had 6,300 full- and part-time associates as of December 31, 2016. At December 31, 2016, Telephone and Data Systems,
Inc. owned 83 percent of U.S. Cellular. For more information about
U.S. Cellular, visit uscellular.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 execute U.S. Cellular's business
strategy; uncertainties in U.S. Cellular's future cash flows and
liquidity and access to the capital markets; the ability to make
payments on U.S. Cellular indebtedness or comply with the terms of
debt covenants; impacts of any pending
acquisitions/divestitures/exchanges of properties and/or
licenses, 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 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 U.S. Cellular debt
securities by accredited ratings organizations; industry
consolidation; advances in telecommunications technology; 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.
For more information about U.S. Cellular, visit:
U.S. Cellular: www.uscellular.com
United States
Cellular Corporation
|
Summary Operating
Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
12/31/2016
|
|
|
9/30/2016
|
|
|
6/30/2016
|
|
|
3/31/2016
|
|
|
12/31/2015
|
Retail
Connections
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
4,482,000
|
|
|
4,484,000
|
|
|
4,490,000
|
|
|
4,454,000
|
|
|
4,409,000
|
|
|
Gross
additions
|
|
187,000
|
|
|
174,000
|
|
|
197,000
|
|
|
215,000
|
|
|
240,000
|
|
|
|
Feature
phones
|
|
7,000
|
|
|
10,000
|
|
|
8,000
|
|
|
9,000
|
|
|
10,000
|
|
|
|
Smartphones
|
|
109,000
|
|
|
105,000
|
|
|
107,000
|
|
|
124,000
|
|
|
132,000
|
|
|
|
Connected
devices
|
|
71,000
|
|
|
59,000
|
|
|
82,000
|
|
|
82,000
|
|
|
98,000
|
|
|
Net additions
(losses)
|
|
(2,000)
|
|
|
(6,000)
|
|
|
36,000
|
|
|
45,000
|
|
|
68,000
|
|
|
|
Feature
phones
|
|
(21,000)
|
|
|
(20,000)
|
|
|
(21,000)
|
|
|
(25,000)
|
|
|
(25,000)
|
|
|
|
Smartphones
|
|
(4,000)
|
|
|
(7,000)
|
|
|
8,000
|
|
|
20,000
|
|
|
23,000
|
|
|
|
Connected
devices
|
|
23,000
|
|
|
21,000
|
|
|
49,000
|
|
|
50,000
|
|
|
70,000
|
|
|
ARPU
(1)
|
$
|
45.19
|
|
$
|
47.08
|
|
$
|
47.37
|
|
$
|
48.13
|
|
$
|
51.46
|
|
|
ABPU
(Non-GAAP)(2)
|
$
|
55.43
|
|
$
|
56.79
|
|
$
|
56.09
|
|
$
|
56.06
|
|
$
|
58.57
|
|
|
ARPA
(3)
|
$
|
120.67
|
|
$
|
125.31
|
|
$
|
124.91
|
|
$
|
125.36
|
|
$
|
131.96
|
|
|
ABPA
(Non-GAAP)(4)
|
$
|
148.02
|
|
$
|
151.16
|
|
$
|
147.90
|
|
$
|
145.99
|
|
$
|
150.19
|
|
|
Churn rate
(5)
|
|
1.41%
|
|
|
1.34%
|
|
|
1.20%
|
|
|
1.28%
|
|
|
1.31%
|
|
|
|
Handsets
|
|
1.23%
|
|
|
1.22%
|
|
|
1.10%
|
|
|
1.18%
|
|
|
1.23%
|
|
|
|
Connected
devices
|
|
2.49%
|
|
|
2.04%
|
|
|
1.84%
|
|
|
2.01%
|
|
|
1.95%
|
|
|
Smartphone
penetration (6)
|
|
79%
|
|
|
78%
|
|
|
77%
|
|
|
75%
|
|
|
74%
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
484,000
|
|
|
480,000
|
|
|
413,000
|
|
|
399,000
|
|
|
387,000
|
|
|
Gross
additions
|
|
83,000
|
|
|
132,000
|
|
|
73,000
|
|
|
75,000
|
|
|
69,000
|
|
|
Net
additions
|
|
4,000
|
|
|
67,000
|
|
|
14,000
|
|
|
12,000
|
|
|
7,000
|
|
|
ARPU (1)
|
$
|
33.25
|
|
$
|
34.39
|
|
$
|
34.58
|
|
$
|
35.51
|
|
$
|
35.54
|
|
|
Churn rate
(5)
|
|
5.44%
|
|
|
4.84%
|
|
|
4.86%
|
|
|
5.37%
|
|
|
5.40%
|
Total connections
at end of period (7)
|
|
5,031,000
|
|
|
5,030,000
|
|
|
4,973,000
|
|
|
4,926,000
|
|
|
4,876,000
|
Smartphones sold
as a percent of total handsets sold
|
|
93%
|
|
|
92%
|
|
|
91%
|
|
|
92%
|
|
|
91%
|
Market penetration
at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
operating population
|
|
31,994,000
|
|
|
31,994,000
|
|
|
31,994,000
|
|
|
31,994,000
|
|
|
31,967,000
|
|
Consolidated
operating penetration (8)
|
|
16%
|
|
|
16%
|
|
|
16%
|
|
|
15%
|
|
|
15%
|
Capital
expenditures (millions)
|
$
|
171
|
|
$
|
103
|
|
$
|
93
|
|
$
|
79
|
|
$
|
198
|
Total cell sites
in service
|
|
6,415
|
|
|
6,374
|
|
|
6,324
|
|
|
6,306
|
|
|
6,297
|
Owned
towers
|
|
4,040
|
|
|
4,015
|
|
|
3,988
|
|
|
3,989
|
|
|
3,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Average Revenue Per
User ("ARPU") - metric 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.
|
(2)
|
Average Billings Per
User ("ABPU") - non-GAAP metric calculated by dividing total
postpaid service revenues plus equipment installment plan billings
by the average number of postpaid connections and by the number of
months in the period. Refer to the end of this release for a
reconciliation of this metric to its most comparable GAAP
metric.
|
(3)
|
Average Revenue Per
Account ("ARPA") - metric calculated by dividing total postpaid
service revenues by the average number of postpaid accounts and by
the number of months in the period.
|
(4)
|
Average Billings Per
Account ("ABPA") - non-GAAP metric calculated by dividing total
postpaid service revenues plus equipment installment plan billings
by the average number of postpaid accounts and by the number of
months in the period. Refer to the end of this release for a
reconciliation of this metric to its most comparable GAAP
metric.
|
(5)
|
Churn rate represents
the percentage of the connections that disconnect service each
month. These rates represent the average monthly churn rate
for each respective period.
|
(6)
|
Smartphone
penetration is calculated by dividing postpaid smartphone
connections by postpaid handset connections.
|
(7)
|
Includes reseller and
other connections.
|
(8)
|
Market penetration is
calculated by dividing the number of wireless connections at the
end of the period by the total population of consolidated operating
markets as estimated by Nielsen.
|
United States
Cellular Corporation
|
Consolidated
Statement of Operations Highlights
|
(Unaudited)
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
|
|
2016 vs.
2015
|
|
|
|
2016
|
|
2015
|
|
Increase
(Decrease)
|
(Dollars and shares
in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
$
|
737
|
|
$
|
802
|
|
$
|
(65)
|
|
(8)%
|
|
Equipment
sales
|
|
254
|
|
|
185
|
|
|
69
|
|
37%
|
|
|
Total operating
revenues
|
|
991
|
|
|
987
|
|
|
4
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
System operations
(excluding Depreciation, amortization and accretion reported below)
|
|
188
|
|
|
189
|
|
|
(1)
|
|
-
|
|
Cost of equipment
sold
|
|
283
|
|
|
274
|
|
|
9
|
|
3%
|
|
Selling, general and
administrative
|
|
390
|
|
|
388
|
|
|
2
|
|
1%
|
|
Depreciation,
amortization and accretion
|
|
156
|
|
|
156
|
|
|
–
|
|
-
|
|
(Gain) loss on asset
disposals, net
|
|
6
|
|
|
4
|
|
|
2
|
|
43%
|
|
(Gain) loss on
license sales and exchanges, net
|
|
(3)
|
|
|
–
|
|
|
(3)
|
|
N/M
|
|
|
Total operating
expenses
|
|
1,020
|
|
|
1,011
|
|
|
9
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(29)
|
|
|
(24)
|
|
|
(5)
|
|
(21)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and
other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
30
|
|
|
30
|
|
|
–
|
|
-
|
|
Interest and dividend
income
|
|
16
|
|
|
10
|
|
|
6
|
|
53%
|
|
Interest
expense
|
|
(29)
|
|
|
(25)
|
|
|
(4)
|
|
17%
|
|
Other, net
|
|
1
|
|
|
1
|
|
|
–
|
|
(13)%
|
|
|
Total investment and
other income
|
|
18
|
|
|
16
|
|
|
2
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(11)
|
|
|
(8)
|
|
|
(3)
|
|
(49)%
|
|
Income tax
benefit
|
|
(6)
|
|
|
(5)
|
|
|
(1)
|
|
(24)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(5)
|
|
|
(3)
|
|
|
(2)
|
|
(95)%
|
|
Less: Net income
(loss) attributable to noncontrolling interests, net of tax
|
|
1
|
|
|
(1)
|
|
|
2
|
|
>(100)%
|
Net loss
attributable to U.S. Cellular shareholders
|
$
|
(6)
|
|
$
|
(2)
|
|
$
|
(4)
|
|
>(100)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
85
|
|
|
84
|
|
|
1
|
|
1%
|
Basic loss per
share attributable to U.S.
Cellular shareholders
|
$
|
(0.07)
|
|
$
|
(0.02)
|
|
$
|
(0.05)
|
|
>(100)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
85
|
|
|
84
|
|
|
1
|
|
1%
|
Diluted loss per
share attributable to U.S.
Cellular shareholders
|
$
|
(0.07)
|
|
$
|
(0.02)
|
|
$
|
(0.05)
|
|
>(100)%
|
|
N/M - Percentage
change not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
Cellular Corporation
|
Consolidated
Statement of Operations Highlights
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|
2016 vs.
2015
|
|
|
|
2016
|
|
2015
|
|
Increase
(Decrease)
|
(Dollars and shares
in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
$
|
3,030
|
|
$
|
3,350
|
|
$
|
(320)
|
|
(10)%
|
|
Equipment
sales
|
|
909
|
|
|
647
|
|
|
262
|
|
41%
|
|
|
Total operating
revenues
|
|
3,939
|
|
|
3,997
|
|
|
(58)
|
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
System operations
(excluding Depreciation, amortization and accretion reported below)
|
|
760
|
|
|
775
|
|
|
(15)
|
|
(2)%
|
|
Cost of equipment
sold
|
|
1,081
|
|
|
1,053
|
|
|
28
|
|
3%
|
|
Selling, general and
administrative
|
|
1,480
|
|
|
1,494
|
|
|
(14)
|
|
(1)%
|
|
Depreciation,
amortization and accretion
|
|
618
|
|
|
607
|
|
|
11
|
|
2%
|
|
(Gain) loss on asset
disposals, net
|
|
22
|
|
|
16
|
|
|
6
|
|
36%
|
|
(Gain) loss on sale
of business and other exit costs, net
|
|
–
|
|
|
(114)
|
|
|
114
|
|
100%
|
|
(Gain) loss on
license sales and exchanges, net
|
|
(19)
|
|
|
(147)
|
|
|
128
|
|
87%
|
|
|
Total operating
expenses
|
|
3,942
|
|
|
3,684
|
|
|
258
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(3)
|
|
|
313
|
|
|
(316)
|
|
>(100)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and
other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
140
|
|
|
140
|
|
|
–
|
|
-
|
|
Interest and dividend
income
|
|
57
|
|
|
36
|
|
|
21
|
|
57%
|
|
Interest
expense
|
|
(113)
|
|
|
(86)
|
|
|
(27)
|
|
(31)%
|
|
Other, net
|
|
1
|
|
|
1
|
|
|
–
|
|
10%
|
|
|
Total investment and
other income
|
|
85
|
|
|
91
|
|
|
(6)
|
|
(7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
82
|
|
|
404
|
|
|
(322)
|
|
(80)%
|
|
Income tax
expense
|
|
33
|
|
|
157
|
|
|
(124)
|
|
(79)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
49
|
|
|
247
|
|
|
(198)
|
|
(80)%
|
|
Less: Net income
attributable to noncontrolling interests, net of tax
|
|
1
|
|
|
6
|
|
|
(5)
|
|
(71)%
|
Net income
attributable to U.S. Cellular shareholders
|
$
|
48
|
|
$
|
241
|
|
$
|
(193)
|
|
(80)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
85
|
|
|
84
|
|
|
1
|
|
1%
|
Basic earnings per
share attributable to U.S.
Cellular shareholders
|
$
|
0.56
|
|
$
|
2.86
|
|
$
|
(2.30)
|
|
(80)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
85
|
|
|
85
|
|
|
–
|
|
1%
|
Diluted earnings
per share attributable to U.S. Cellular shareholders
|
$
|
0.56
|
|
$
|
2.84
|
|
$
|
(2.28)
|
|
(80)%
|
|
N/M - Percentage
change not meaningful
|
United States
Cellular Corporation
|
Consolidated
Statement of Cash Flows
|
(Unaudited)
|
|
|
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
(Dollars in
millions)
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
Net income
|
$
|
49
|
|
$
|
247
|
|
Add (deduct)
adjustments to reconcile net income (loss) to net
|
|
|
|
|
|
|
cash
flows from operating activities
|
|
|
|
|
|
|
|
Depreciation,
amortization and accretion
|
|
618
|
|
|
607
|
|
|
Bad debts
expense
|
|
96
|
|
|
106
|
|
|
Stock-based
compensation expense
|
|
26
|
|
|
25
|
|
|
Deferred income
taxes, net
|
|
6
|
|
|
55
|
|
|
Equity in earnings of
unconsolidated entities
|
|
(140)
|
|
|
(140)
|
|
|
Distributions from
unconsolidated entities
|
|
93
|
|
|
60
|
|
|
(Gain) loss on asset
disposals, net
|
|
22
|
|
|
16
|
|
|
(Gain) loss on sale
of business and other exit costs, net
|
|
–
|
|
|
(114)
|
|
|
(Gain) loss on
license sales and exchanges, net
|
|
(19)
|
|
|
(147)
|
|
|
Noncash interest
expense
|
|
2
|
|
|
2
|
|
|
Other operating
activities
|
|
(2)
|
|
|
–
|
|
Changes in assets and
liabilities from operations
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(23)
|
|
|
(96)
|
|
|
Equipment installment
plans receivable
|
|
(246)
|
|
|
(134)
|
|
|
Inventory
|
|
8
|
|
|
118
|
|
|
Accounts
payable
|
|
48
|
|
|
5
|
|
|
Customer deposits and
deferred revenues
|
|
(54)
|
|
|
(37)
|
|
|
Accrued
taxes
|
|
40
|
|
|
34
|
|
|
Accrued
interest
|
|
(2)
|
|
|
4
|
|
|
Other assets and
liabilities
|
|
(21)
|
|
|
(56)
|
|
|
|
Net cash provided by
operating activities
|
|
501
|
|
|
555
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
Cash paid for
additions to property, plant and equipment
|
|
(443)
|
|
|
(581)
|
|
Cash paid for
acquisitions and licenses
|
|
(53)
|
|
|
(286)
|
|
Cash received from
divestitures and exchanges
|
|
21
|
|
|
317
|
|
Federal
Communications Commission deposit
|
|
(143)
|
|
|
–
|
|
Other investing
activities
|
|
–
|
|
|
1
|
|
|
|
Net cash used in
investing activities
|
|
(618)
|
|
|
(549)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Issuance of long-term
debt
|
|
–
|
|
|
525
|
|
Repayment of
long-term debt
|
|
(11)
|
|
|
–
|
|
Common shares
reissued for benefit plans, net of tax payments
|
|
6
|
|
|
2
|
|
Common shares
repurchased
|
|
(5)
|
|
|
(6)
|
|
Payment of debt
issuance costs
|
|
(2)
|
|
|
(13)
|
|
Acquisition of towers
in common control transaction
|
|
–
|
|
|
(2)
|
|
Distributions to
noncontrolling interests
|
|
(1)
|
|
|
(6)
|
|
Payments to acquire
additional interest in subsidiaries
|
|
–
|
|
|
(2)
|
|
Other financing
activities
|
|
1
|
|
|
(1)
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
(12)
|
|
|
497
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(129)
|
|
|
503
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
Beginning of
period
|
|
715
|
|
|
212
|
|
End of
period
|
$
|
586
|
|
$
|
715
|
United States
Cellular Corporation
|
Consolidated
Balance Sheet Highlights
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
(Dollars in
millions)
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
586
|
|
$
|
715
|
|
Accounts receivable
from customers and others, net
|
|
727
|
|
|
672
|
|
Inventory,
net
|
|
138
|
|
|
149
|
|
Prepaid
expenses
|
|
84
|
|
|
81
|
|
Other current
assets
|
|
23
|
|
|
55
|
|
Total current
assets
|
|
1,558
|
|
|
1,672
|
|
|
|
|
|
|
|
Assets held for
sale
|
|
8
|
|
|
–
|
|
|
|
|
|
|
|
Licenses
|
|
1,886
|
|
|
1,834
|
Goodwill
|
|
370
|
|
|
370
|
Investments in
unconsolidated entities
|
|
413
|
|
|
363
|
|
|
|
|
|
|
|
Property, plant
and equipment
|
|
|
|
|
|
|
In service and under
construction
|
|
7,712
|
|
|
7,669
|
|
Less: Accumulated
depreciation
|
|
5,242
|
|
|
5,020
|
|
Property, plant and equipment, net
|
|
2,470
|
|
|
2,649
|
|
|
|
|
|
|
|
Other assets and
deferred charges
|
|
405
|
|
|
172
|
|
|
|
|
|
|
|
Total
assets
|
$
|
7,110
|
|
$
|
7,060
|
|
|
|
|
|
|
|
United States
Cellular Corporation
|
Consolidated
Balance Sheet Highlights
|
(Unaudited)
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2016
|
|
2015
|
(Dollars and shares
in millions, except per share amounts)
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
11
|
|
$
|
11
|
|
Accounts
payable
|
|
|
|
|
|
|
|
Affiliated
|
|
12
|
|
|
10
|
|
|
Trade
|
|
309
|
|
|
275
|
|
Customer deposits and
deferred revenues
|
|
190
|
|
|
251
|
|
Accrued
taxes
|
|
39
|
|
|
28
|
|
Accrued
compensation
|
|
73
|
|
|
68
|
|
Other current
liabilities
|
|
84
|
|
|
105
|
|
|
Total current
liabilities
|
|
718
|
|
|
748
|
|
|
|
|
|
|
|
|
Deferred
liabilities and credits
|
|
|
|
|
|
|
Net deferred income
tax liability, net
|
|
826
|
|
|
821
|
|
Other deferred
liabilities and credits
|
|
302
|
|
|
290
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
1,618
|
|
|
1,629
|
|
|
|
|
|
|
|
|
Noncontrolling
interests with redemption features
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
U.S. Cellular
shareholders' equity
|
|
|
|
|
|
|
Series A Common and
Common Shares, par value $1 per share
|
|
88
|
|
|
88
|
|
Additional paid-in
capital
|
|
1,522
|
|
|
1,497
|
|
Treasury
shares
|
|
(136)
|
|
|
(157)
|
|
Retained
earnings
|
|
2,160
|
|
|
2,133
|
|
|
Total U.S. Cellular
shareholders' equity
|
|
3,634
|
|
|
3,561
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
11
|
|
|
10
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
3,645
|
|
|
3,571
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
7,110
|
|
$
|
7,060
|
|
|
|
|
|
|
|
|
United States
Cellular Corporation
|
Financial Measures
and Reconciliations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow and
Adjusted Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities (GAAP)
|
|
$
|
86
|
|
$
|
–
|
|
$
|
501
|
|
$
|
555
|
Less: Cash used for
additions to property, plant and equipment
|
|
|
163
|
|
|
174
|
|
|
443
|
|
|
581
|
|
|
Free cash
flow
|
|
|
(77)
|
|
|
(174)
|
|
|
58
|
|
|
(26)
|
Add: Sprint Cost
Reimbursement
|
|
|
1
|
|
|
2
|
|
|
7
|
|
|
30
|
|
Adjusted free cash
flow (Non-GAAP) (1)
|
|
$
|
(76)
|
|
$
|
(172)
|
|
$
|
65
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Management uses Free
cash flow as a liquidity measure and it is defined as Cash flows
from operating activities less Cash paid for additions to property,
plant and equipment. 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 paid for additions to property, plant and
equipment. Sprint decommissioning and Sprint Cost
Reimbursement are further defined and discussed in our Annual
Report on Form 10-K for the year ended December 31, 2016.
Free cash flow and Adjusted free cash flow are non-GAAP financial
measures 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 paid for
additions to property, plant and equipment.
|
Postpaid ABPU and Postpaid ABPA
U.S. Cellular presents Postpaid ABPU and Postpaid ABPA to
reflect the revenue shift from Service revenues to Equipment sales
resulting from the increased adoption of equipment installment
plans. Postpaid ABPU and Postpaid ABPA, as previously
defined, are non-GAAP financial measures which U.S. Cellular
believes are useful to investors and other users of its financial
information in showing trends in both service and equipment
revenues received from customers.
For the Quarter
Ended
|
|
12/31/2016
|
|
|
9/30/2016
|
|
|
6/30/2016
|
|
|
3/31/2016
|
|
|
12/31/2015
|
(Dollars and
connection counts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Postpaid ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid service
revenues
|
$
|
607
|
|
$
|
635
|
|
$
|
636
|
|
$
|
639
|
|
$
|
674
|
Average number of
postpaid connections
|
|
4.48
|
|
|
4.49
|
|
|
4.48
|
|
|
4.43
|
|
|
4.37
|
Number of months in
period
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
Postpaid ARPU
(GAAP metric)
|
$
|
45.19
|
|
$
|
47.08
|
|
$
|
47.37
|
|
$
|
48.13
|
|
$
|
51.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Postpaid ABPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid service
revenues
|
$
|
607
|
|
$
|
635
|
|
$
|
636
|
|
$
|
639
|
|
$
|
674
|
Equipment installment
plan billings
|
|
138
|
|
|
131
|
|
|
118
|
|
|
105
|
|
|
93
|
|
Total billings to
postpaid connections
|
$
|
745
|
|
$
|
766
|
|
$
|
754
|
|
$
|
744
|
|
$
|
767
|
Average number of
postpaid connections
|
|
4.48
|
|
|
4.49
|
|
|
4.48
|
|
|
4.43
|
|
|
4.37
|
Number of months in
period
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
Postpaid ABPU
(Non-GAAP metric)
|
$
|
55.43
|
|
$
|
56.79
|
|
$
|
56.09
|
|
$
|
56.06
|
|
$
|
58.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Postpaid ARPA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid service
revenues
|
$
|
607
|
|
$
|
635
|
|
$
|
636
|
|
$
|
639
|
|
$
|
674
|
Average number of
postpaid accounts
|
|
1.68
|
|
|
1.69
|
|
|
1.70
|
|
|
1.70
|
|
|
1.70
|
Number of months in
period
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
Postpaid ARPA
(GAAP metric)
|
$
|
120.67
|
|
$
|
125.31
|
|
$
|
124.91
|
|
$
|
125.36
|
|
$
|
131.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Postpaid ABPA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid service
revenues
|
$
|
607
|
|
$
|
635
|
|
$
|
636
|
|
$
|
639
|
|
$
|
674
|
Equipment installment
plan billings
|
|
138
|
|
|
131
|
|
|
118
|
|
|
105
|
|
|
93
|
|
Total billings to
postpaid accounts
|
$
|
745
|
|
$
|
766
|
|
$
|
754
|
|
$
|
744
|
|
$
|
767
|
Average number of
postpaid accounts
|
|
1.68
|
|
|
1.69
|
|
|
1.70
|
|
|
1.70
|
|
|
1.70
|
Number of months in
period
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
Postpaid ABPA
(Non-GAAP metric)
|
$
|
148.02
|
|
$
|
151.16
|
|
$
|
147.90
|
|
$
|
145.99
|
|
$
|
150.19
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/us-cellular-reports-fourth-quarter-and-full-year-2016-results-300413193.html
SOURCE United States Cellular Corporation