8-K
Array Digital Infrastructure, Inc. (AD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2023
UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-09712 | 62-1147325 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
8410 West Bryn Mawr, Chicago, Illinois 60631
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (773) 399-8900
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- || Securities registered pursuant to Section 12(b) of the Act: | | | | --- | --- | --- | | Title of each class | Trading Symbol | Name of each exchange on which registered | | Common Shares, $1 par value | USM | New York Stock Exchange | | 6.25% Senior Notes due 2069 | UZD | New York Stock Exchange | | 5.50% Senior Notes due 2070 | UZE | New York Stock Exchange | | 5.50% Senior Notes due 2070 | UZF | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| ☐ | Emerging growth company | | --- | --- || ☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | --- | --- |
Item 2.02. Results of Operations and Financial Condition
On August 4, 2023, United States Cellular Corporation (UScellular) issued a news release announcing its results of operations for the period ended June 30, 2023. A copy of the news release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this Item 2.02 of Form 8-K is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor will any such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 8.01. Other Events
On August 4, 2023, Telephone and Data Systems, Inc. (TDS) and UScellular, a subsidiary of TDS, announced that the Boards of Directors of both companies have decided to initiate a process to explore a range of strategic alternatives for UScellular. The initiation of this process does not impact the June 30, 2023 financial statements. At this time, UScellular cannot predict the ultimate outcome of such process or estimate the potential impact of such process on the financial statements. It is possible that no strategic alternative will ultimately be consummated.
A copy of the news release related to this announcement is attached hereto as Exhibit 99.2 and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit Number | Description of Exhibits | ||
|---|---|---|---|
| 99.1 | Earnings Press Release dated August 4, 2023 | ||
| 99.2 | Press Release dated August 4, 2023 | ||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||
| SIGNATURES | |||
| --- | --- | --- | --- |
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | |||
| UNITED STATES CELLULAR CORPORATION | |||
| Date: | August 4, 2023 | By: | /s/ Douglas W. Chambers |
| Douglas W. Chambers | |||
| Executive Vice President, Chief Financial Officer and Treasurer |
Document
Exhibit 99.1 NEWS RELEASE
As previously announced, UScellular will hold a teleconference on August 4, 2023, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.uscellular.com.
UScellular reports second quarter 2023 results
2Q 2023 Highlights*
•Focused on improving subscriber trajectory to reduce postpaid losses - made progress in reducing postpaid churn
◦Reduced postpaid handset churn 8%
•Executing on growth initiatives
◦Fixed Wireless customers grew 66% to 96,000
◦Tower rental revenues grew 10%
•Reduced debt balance by $150 million in 2Q'23
•Launching 5G Mid-Band network - providing low latency and faster speeds
◦Ended June with availability in parts of Illinois, Iowa, Wisconsin, Maine, Missouri, Nebraska, Oklahoma, Oregon, Virginia and Washington
* Comparisons are 2Q’22 to 2Q’23 unless otherwise noted
CHICAGO (August 4, 2023) — United States Cellular Corporation (NYSE:USM) reported total operating revenues of $957 million for the second quarter of 2023, versus $1,027 million for the same period one year ago. Service revenues totaled $760 million, versus $783 million for the same period one year ago. Net income attributable to UScellular shareholders and related diluted earnings per share were $5 million and $0.05, respectively, for the second quarter of 2023 compared to $21 million and $0.25, respectively, in the same period one year ago.
“Postpaid handset subscriber trends improved slightly year-over-year driven by improvements in churn, however, gross additions remained challenged. Two of UScellular’s growth areas, fixed wireless and the tower portfolio, produced year-over-year double-digit increases in gross additions and revenues, respectively. And our ongoing cost optimization programs are helping to offset inflationary pressures, ” said Laurent Therivel, UScellular President and CEO. “In July, UScellular surpassed 100,000 fixed wireless customers – a key milestone as momentum for the product continues.”
Recent Development: On August 4, 2023, Telephone and Data Systems (TDS) and UScellular announced a process to explore a range of strategic alternatives for UScellular.
2023 Estimated Results
UScellular’s current estimates of full-year 2023 results are shown below. Such estimates represent management’s view as of August 4, 2023 and should not be assumed to be current as of any future date. UScellular undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results.
The 2023 Estimated Results shown below do not reflect any anticipated costs, expenses or results of the strategic review referenced above.
| 2023 Estimated Results | ||
|---|---|---|
| Previous | Current | |
| (Dollars in millions) | ||
| Service revenues | $3,050-$3,150 | $3,025-$3,075 |
| Adjusted OIBDA1 | $725-$875 | $750-$850 |
| Adjusted EBITDA1 | $875-$1,025 | $925-$1,025 |
| Capital expenditures | $600-$700 | Unchanged |
The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2023 estimated results, UScellular has not completed the below reconciliation to Net income because it does not provide guidance for income taxes. Although potentially significant, UScellular believes that the impact of income taxes cannot be reasonably predicted; therefore, UScellular is unable to provide such guidance.
| Actual Results | |||
|---|---|---|---|
| 2023 Estimated Results | Six Months Ended<br>June 30, 2023 | Year Ended<br>December 31, 2022 | |
| (Dollars in millions) | |||
| Net income (GAAP) | N/A | $20 | $35 |
| Add back: | |||
| Income tax expense | N/A | 29 | 37 |
| Income before income taxes (GAAP) | $50-$150 | $49 | $72 |
| Add back: | |||
| Interest expense | 200 | 99 | 163 |
| Depreciation, amortization and accretion expense | 655 | 330 | 700 |
| EBITDA (Non-GAAP)1 | $905-$1,005 | $478 | $935 |
| Add back or deduct: | |||
| Loss on impairment of licenses | — | — | 3 |
| (Gain) loss on asset disposals, net | 20 | 13 | 19 |
| (Gain) loss on sale of business and other exit costs, net | — | — | (1) |
| Adjusted EBITDA (Non-GAAP)1 | $925-$1,025 | $491 | $956 |
| Deduct: | |||
| Equity in earnings of unconsolidated entities | 160 | 82 | 158 |
| Interest and dividend income | 15 | 5 | 8 |
| Adjusted OIBDA (Non-GAAP)1 | $750-$850 | $404 | $790 |
1EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. UScellular does not intend to imply that any such items set forth in the reconciliation above are non-recurring, infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of UScellular’s operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of UScellular’s financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for June 30, 2023, can be found on UScellular’s website at investors.uscellular.com.
Conference Call Information
UScellular will hold a conference call on August 4, 2023 at 9:00 a.m. Central Time.
▪Access the live call on the Events & Presentations page of investors.uscellular.com or at
https://events.q4inc.com/attendee/745533112
▪Access the call by phone at (888)330-2384 conference ID: 1328528.
Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.uscellular.com. The call will be archived on the Events & Presentations page of investors.uscellular.com.
About UScellular
United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to customers with 4.7 million retail connections in 21 states. The Chicago-based company had 4,600 full- and part-time associates as of June 30, 2023. At the end of the second quarter of 2023, Telephone and Data Systems, Inc. owned 83 percent of UScellular. For more information about UScellular, visit uscellular.com.
Contacts
Colleen Thompson, Vice President - Corporate Relations of TDS
colleen.thompson@tdsinc.com
Julie Mathews, IRC, Director - Investor Relations of TDS
julie.mathews@tdsinc.com
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether any strategic alternatives for UScellular will be successfully identified or completed; whether any such strategic alternative will result in additional value for UScellular and its shareholders and whether the process will have an adverse impact on UScellular’s business; intense competition; the ability to attract people of outstanding talent throughout all levels of the organization; UScellular's smaller scale relative to larger competitors; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of UScellular's businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which UScellular does business; uncertainties in UScellular’s future cash flows and liquidity and access to the capital markets; the ability to make payments on UScellular indebtedness or comply with the terms of debt covenants; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; cyber-attacks or other breaches of network or information technology security; potential conflicts of interests between TDS and UScellular; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under “Risk Factors” in the most recent filing of UScellular's Form 10-K, as updated by any UScellular Form 10-Q filed subsequent to such Form 10-K.
For more information about UScellular, visit: www.uscellular.com
| United States Cellular Corporation | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Summary Operating Data (Unaudited) | |||||||||||||||
| As of or for the Quarter Ended | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | ||||||||||
| Retail Connections | |||||||||||||||
| Postpaid | |||||||||||||||
| Total at end of period | 4,194,000 | 4,223,000 | 4,247,000 | 4,264,000 | 4,296,000 | ||||||||||
| Gross additions | 125,000 | 137,000 | 154,000 | 151,000 | 128,000 | ||||||||||
| Handsets | 83,000 | 93,000 | 105,000 | 107,000 | 94,000 | ||||||||||
| Connected devices | 42,000 | 44,000 | 49,000 | 44,000 | 34,000 | ||||||||||
| Net additions (losses) | (28,000) | (24,000) | (17,000) | (31,000) | (40,000) | ||||||||||
| Handsets | (29,000) | (25,000) | (20,000) | (22,000) | (31,000) | ||||||||||
| Connected devices | 1,000 | 1,000 | 3,000 | (9,000) | (9,000) | ||||||||||
| ARPU1 | $ | 50.64 | $ | 50.66 | $ | 50.60 | $ | 50.21 | $ | 50.07 | |||||
| ARPA2 | $ | 130.19 | $ | 130.77 | $ | 130.97 | $ | 130.27 | $ | 130.43 | |||||
| Handset upgrade rate3 | 4.8 | % | 4.9 | % | 7.0 | % | 8.1 | % | 6.0 | % | |||||
| Churn rate4 | 1.21 | % | 1.27 | % | 1.35 | % | 1.42 | % | 1.30 | % | |||||
| Handsets | 1.01 | % | 1.06 | % | 1.12 | % | 1.15 | % | 1.10 | % | |||||
| Connected devices | 2.65 | % | 2.78 | % | 2.99 | % | 3.40 | % | 2.73 | % | |||||
| Prepaid | |||||||||||||||
| Total at end of period | 462,000 | 470,000 | 493,000 | 493,000 | 490,000 | ||||||||||
| Gross additions | 50,000 | 43,000 | 61,000 | 62,000 | 56,000 | ||||||||||
| Net additions (losses) | (8,000) | (23,000) | — | 2,000 | (4,000) | ||||||||||
| ARPU1 | $ | 33.86 | $ | 33.19 | $ | 33.34 | $ | 35.04 | $ | 35.25 | |||||
| Churn rate4 | 4.18 | % | 4.63 | % | 4.11 | % | 4.07 | % | 4.07 | % | |||||
| Market penetration at end of period | |||||||||||||||
| Consolidated operating population | 32,350,000 | 32,350,000 | 32,370,000 | 32,370,000 | 32,370,000 | ||||||||||
| Consolidated operating penetration5 | 15 | % | 15 | % | 15 | % | 15 | % | 15 | % | |||||
| Capital expenditures (millions) | $ | 143 | $ | 208 | $ | 176 | $ | 136 | $ | 268 | |||||
| Total cell sites in service | 6,952 | 6,950 | 6,945 | 6,933 | 6,916 | ||||||||||
| Owned towers | 4,341 | 4,338 | 4,336 | 4,329 | 4,323 |
1Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below:
•Postpaid ARPU consists of total postpaid service revenues and postpaid connections.
•Prepaid ARPU consists of total prepaid service revenues and prepaid connections.
2Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.
3Handset upgrade rate calculated as total handset upgrade transactions divided by average postpaid handset connections.
4Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.
5Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets.
| United States Cellular Corporation | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Statement of Operations Highlights | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended<br>June 30, | Six Months Ended<br>June 30, | |||||||||||
| 2023 | 2022 | 2023<br>vs. 2022 | 2023 | 2022 | 2023<br>vs. 2022 | |||||||
| (Dollars and shares in millions, except per share amounts) | ||||||||||||
| Operating revenues | ||||||||||||
| Service | $ | 760 | $ | 783 | (3) | % | $ | 1,527 | $ | 1,570 | (3) | % |
| Equipment sales | 197 | 244 | (20) | % | 415 | 467 | (11) | % | ||||
| Total operating revenues | 957 | 1,027 | (7) | % | 1,942 | 2,037 | (5) | % | ||||
| Operating expenses | ||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 190 | 192 | (1) | % | 372 | 377 | (1) | % | ||||
| Cost of equipment sold | 228 | 275 | (17) | % | 480 | 533 | (10) | % | ||||
| Selling, general and administrative | 341 | 339 | 1 | % | 686 | 663 | 3 | % | ||||
| Depreciation, amortization and accretion | 161 | 172 | (7) | % | 330 | 342 | (4) | % | ||||
| Loss on impairment of licenses | — | 3 | N/M | — | 3 | N/M | ||||||
| (Gain) loss on asset disposals, net | 3 | 6 | (44) | % | 13 | 8 | 73 | % | ||||
| Total operating expenses | 923 | 987 | (7) | % | 1,881 | 1,926 | (2) | % | ||||
| Operating income | 34 | 40 | (13) | % | 61 | 111 | (45) | % | ||||
| Investment and other income (expense) | ||||||||||||
| Equity in earnings of unconsolidated entities | 38 | 37 | 3 | % | 82 | 82 | — | |||||
| Interest and dividend income | 3 | 3 | 11 | % | 5 | 4 | 43 | % | ||||
| Interest expense | (51) | (40) | (30) | % | (99) | (73) | (35) | % | ||||
| Total investment and other income (expense) | (10) | — | N/M | (12) | 13 | N/M | ||||||
| Income before income taxes | 24 | 40 | (40) | % | 49 | 124 | (60) | % | ||||
| Income tax expense | 19 | 18 | 6 | % | 29 | 50 | (41) | % | ||||
| Net income | 5 | 22 | (76) | % | 20 | 74 | (73) | % | ||||
| Less: Net income attributable to noncontrolling interests, net of tax | — | 1 | (7) | % | 2 | 3 | (33) | % | ||||
| Net income attributable to UScellular shareholders | $ | 5 | $ | 21 | (79) | % | $ | 18 | $ | 71 | (75) | % |
| Basic weighted average shares outstanding | 85 | 86 | (1) | % | 85 | 86 | (1) | % | ||||
| Basic earnings per share attributable to UScellular shareholders | $ | 0.05 | $ | 0.25 | (79) | % | $ | 0.21 | $ | 0.82 | (75) | % |
| Diluted weighted average shares outstanding | 86 | 87 | (1) | % | 86 | 87 | (1) | % | ||||
| Diluted earnings per share attributable to UScellular shareholders | $ | 0.05 | $ | 0.25 | (79) | % | $ | 0.20 | $ | 0.82 | (75) | % |
N/M - Percentage change not meaningful
| United States Cellular Corporation | ||||
|---|---|---|---|---|
| Consolidated Statement of Cash Flows | ||||
| (Unaudited) | ||||
| Six Months Ended<br>June 30, | ||||
| 2023 | 2022 | |||
| (Dollars in millions) | ||||
| Cash flows from operating activities | ||||
| Net income | $ | 20 | $ | 74 |
| Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | ||||
| Depreciation, amortization and accretion | 330 | 342 | ||
| Bad debts expense | 50 | 51 | ||
| Stock-based compensation expense | 6 | 14 | ||
| Deferred income taxes, net | 25 | 31 | ||
| Equity in earnings of unconsolidated entities | (82) | (82) | ||
| Distributions from unconsolidated entities | 78 | 80 | ||
| Loss on impairment of licenses | — | 3 | ||
| (Gain) loss on asset disposals, net | 13 | 8 | ||
| Other operating activities | 3 | 3 | ||
| Changes in assets and liabilities from operations | ||||
| Accounts receivable | 35 | (17) | ||
| Equipment installment plans receivable | 7 | (25) | ||
| Inventory | 52 | (33) | ||
| Accounts payable | (106) | (8) | ||
| Customer deposits and deferred revenues | (9) | 6 | ||
| Accrued taxes | 1 | 135 | ||
| Accrued interest | (1) | 1 | ||
| Other assets and liabilities | (32) | (5) | ||
| Net cash provided by operating activities | 390 | 578 | ||
| Cash flows from investing activities | ||||
| Cash paid for additions to property, plant and equipment | (351) | (288) | ||
| Cash paid for licenses | (8) | (563) | ||
| Advance payments for license acquisitions | — | (1) | ||
| Other investing activities | 14 | 1 | ||
| Net cash used in investing activities | (345) | (851) | ||
| Cash flows from financing activities | ||||
| Issuance of long-term debt | 115 | 625 | ||
| Repayment of long-term debt | (156) | (227) | ||
| Issuance of short-term debt | — | 60 | ||
| Repayment of short-term debt | (60) | — | ||
| Common Shares reissued for benefit plans, net of tax payments | (6) | (5) | ||
| Repurchase of Common Shares | — | (18) | ||
| Distributions to noncontrolling interests | (2) | (2) | ||
| Cash paid for software license agreements | (19) | (3) | ||
| Other financing activities | (1) | (1) | ||
| Net cash provided by (used in) financing activities | (129) | 429 | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (84) | 156 | ||
| Cash, cash equivalents and restricted cash | ||||
| Beginning of period | 308 | 199 | ||
| End of period | $ | 224 | $ | 355 |
| United States Cellular Corporation | ||||
| --- | --- | --- | --- | --- |
| Consolidated Balance Sheet Highlights | ||||
| (Unaudited) | ||||
| ASSETS | ||||
| June 30, 2023 | December 31, 2022 | |||
| (Dollars in millions) | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 186 | $ | 273 |
| Accounts receivable, net | 984 | 1,072 | ||
| Inventory, net | 210 | 261 | ||
| Prepaid expenses | 69 | 68 | ||
| Income taxes receivable | 4 | 4 | ||
| Other current assets | 47 | 45 | ||
| Total current assets | 1,500 | 1,723 | ||
| Assets held for sale | 16 | 26 | ||
| Licenses | 4,694 | 4,690 | ||
| Investments in unconsolidated entities | 457 | 452 | ||
| Property, plant and equipment, net | 2,640 | 2,624 | ||
| Operating lease right-of-use assets | 912 | 918 | ||
| Other assets and deferred charges | 670 | 686 | ||
| Total assets | $ | 10,889 | $ | 11,119 |
| United States Cellular Corporation | ||||
| --- | --- | --- | --- | --- |
| Consolidated Balance Sheet Highlights | ||||
| (Unaudited) | ||||
| LIABILITIES AND EQUITY | ||||
| June 30, 2023 | December 31, 2022 | |||
| (Dollars in millions, except per share amounts) | ||||
| Current liabilities | ||||
| Current portion of long-term debt | $ | 54 | $ | 13 |
| Accounts payable | 249 | 356 | ||
| Customer deposits and deferred revenues | 231 | 239 | ||
| Accrued taxes | 32 | 35 | ||
| Accrued compensation | 54 | 84 | ||
| Short-term operating lease liabilities | 134 | 133 | ||
| Other current liabilities | 254 | 335 | ||
| Total current liabilities | 1,008 | 1,195 | ||
| Deferred liabilities and credits | ||||
| Deferred income tax liability, net | 732 | 708 | ||
| Long-term operating lease liabilities | 836 | 843 | ||
| Other deferred liabilities and credits | 607 | 604 | ||
| Long-term debt, net | 3,105 | 3,187 | ||
| Noncontrolling interests with redemption features | 12 | 12 | ||
| Equity | ||||
| UScellular shareholders’ equity | ||||
| Series A Common and Common Shares, par value $1.00 per share | 88 | 88 | ||
| Additional paid-in capital | 1,710 | 1,703 | ||
| Treasury shares | (80) | (98) | ||
| Retained earnings | 2,855 | 2,861 | ||
| Total UScellular shareholders’ equity | 4,573 | 4,554 | ||
| Noncontrolling interests | 16 | 16 | ||
| Total equity | 4,589 | 4,570 | ||
| Total liabilities and equity | $ | 10,889 | $ | 11,119 |
United States Cellular Corporation
Financial Measures and Reconciliations
(Unaudited)
Free Cash Flow
| Three Months Ended<br>June 30, | Six Months Ended<br>June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||
| (Dollars in millions) | ||||||||
| Cash flows from operating activities (GAAP) | $ | 349 | $ | 267 | $ | 390 | $ | 578 |
| Cash paid for additions to property, plant and equipment | (155) | (138) | (351) | (288) | ||||
| Cash paid for software license agreements | (12) | — | (19) | (3) | ||||
| Free cash flow (Non-GAAP)1 | $ | 182 | $ | 129 | $ | 20 | $ | 287 |
1Free cash flow is a non-GAAP financial measure which UScellular believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.
9
Document
Exhibit 99.2
Telephone and Data Systems and UScellular Announce Exploration of Strategic Alternatives for UScellular
CHICAGO (August 4, 2023) – The boards of directors of Telephone and Data Systems, Inc. (“TDS”) (NYSE: TDS) and United States Cellular Corporation (“UScellular”) (NYSE: USM) have each decided to initiate a process to explore strategic alternatives for UScellular. The comprehensive process will explore a range of strategic alternatives.
“The TDS board believes that now is the right time for a comprehensive review of strategic alternatives for UScellular. We will pursue the pathway that is in the best interest of shareholders,” said Walter C.D. Carlson, Chairman of the TDS Board.
“The UScellular leadership team and I fully support the decision to review strategic alternatives for UScellular. We will remain focused on executing our plan and fulfilling our mission of connecting people to what matters most," said Laurent Therivel, Chief Executive Officer of UScellular.
TDS has retained Citi as its financial advisor and has retained legal counsel in connection with the review of strategic alternatives for UScellular. In connection with the review, the UScellular independent directors, as authorized by the UScellular board, have retained a financial advisor and legal counsel.
There is no deadline or definitive timetable set for completion of the strategic review, and there can be no assurance regarding the results or outcome of this review. TDS and UScellular do not intend to comment further on this strategic review process, and will make further announcements in accordance with their respective ongoing disclosure obligations and pursuant to applicable laws and regulations.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, UScellular, TDS Telecom and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 9,100 people as of June 30, 2023.
About UScellular
United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to customers with 4.7 million retail connections in 21 states. The Chicago-based company had 4,600 full- and part-time associates as of June 30, 2023. At the end of the second quarter of 2023, Telephone and Data Systems, Inc. owned 83 percent of UScellular.
For more information about TDS and UScellular, visit:
TDS: www.tdsinc.com
UScellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.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 TDS’ and UScellular’s (collectively, the “Companies”) plans, beliefs, estimates, and expectations, including with respect to the exploration of strategic alternatives for UScellular. These statements are based on current intentions and expectations, 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: whether any strategic alternative for UScellular will be successfully identified or completed, whether any such strategic alternative will result in additional value for the Companies and their respective shareholders and whether the process will have an adverse impact on the business of the Companies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under “Risk Factors” in the most recent filing of Form 10-K by either of the Companies, as updated by either Company in any Form 10-Q filed subsequent to any such Form 10-K.
| Contacts | |
|---|---|
| Media: | FGS Global |
| Bryan Locke, Jim Finkle, Amy Corser – TDS@FGSGlobal.com | |
| Investors: | Colleen Thompson – Colleen.Thompson@tdsinc.com |
| Julie Mathews – Julie.Mathews@tdsinc.com |