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): November 3, 2022
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 November 3, 2022, United States Cellular Corporation (UScellular) issued a news release announcing its results of operations for the period ended September 30, 2022. A copy of the news release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this Item 2.02 of Form 8-K is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor will any such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit Number | Description of Exhibits | ||
|---|---|---|---|
| 99.1 | Earnings Press Release datedNovember 3, 2022 | ||
| 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: | November 3, 2022 | 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 November 4, 2022, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.uscellular.com.
FOR IMMEDIATE RELEASE
UScellular reports third quarter 2022 results
CHICAGO (November 3, 2022) — United States Cellular Corporation (NYSE:USM) reported total operating revenues of $1,083 million for the third quarter of 2022, versus $1,016 million for the same period one year ago. Service revenues totaled $781 million, versus $788 million for the same period one year ago. Net income (loss) attributable to UScellular shareholders and related diluted earnings (loss) per share were $(12) million and $(0.15), respectively, for the third quarter of 2022 compared to $34 million and $0.38, respectively, in the same period one year ago.
“While postpaid subscriber growth remains challenging, we are intensely focused on changing the trajectory," said Laurent Therivel, UScellular President and CEO. "I am encouraged that recent offers are beginning to generate significant upgrade volumes which should have a positive impact on churn in future periods.
“UScellular continues to make progress on its long-term strategic priorities while reporting another strong quarter of ARPU growth. And we are seeing continued momentum in a number of growth areas of the business, including our tower portfolio and fixed wireless.
"I’m impressed with the hard work of our associates and their commitment to keeping our customers connected. I'd like to thank all of them for their contributions this quarter."
2022 Estimated Results
UScellular’s current estimates of full-year 2022 results are shown below. Such estimates represent management’s view as of November 3, 2022 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.
| 2022 Estimated Results | ||
|---|---|---|
| Previous | Current | |
| (Dollars in millions) | ||
| Service revenues | $3,100-$3,200 | $3,100-$3,150 |
| Adjusted OIBDA1 | $750-$900 | $750-$825 |
| Adjusted EBITDA1 | $925-$1,075 | $925-$1,000 |
| Capital expenditures | $700-$800 | 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 2022 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 | |||||
|---|---|---|---|---|---|
| 2022 Estimated Results | Nine Months Ended<br>September 30, 2022 | Year Ended<br>December 31, 2021 | |||
| (Dollars in millions) | |||||
| Net income (GAAP) | N/A | $ | 62 | $ | 160 |
| Add back: | |||||
| Income tax expense | N/A | 46 | 20 | ||
| Income before income taxes (GAAP) | $45-$120 | $ | 108 | $ | 180 |
| Add back: | |||||
| Interest expense | 160 | 115 | 175 | ||
| Depreciation, amortization and accretion expense | 705 | 520 | 678 | ||
| EBITDA (Non-GAAP)1 | $910-$985 | $ | 743 | $ | 1,033 |
| Add back or deduct: | |||||
| Loss on impairment of licenses | — | 3 | — | ||
| (Gain) loss on asset disposals, net | 15 | 9 | 23 | ||
| (Gain) loss on sale of business and other exit costs, net | — | (1) | (2) | ||
| Adjusted EBITDA (Non-GAAP)1 | $925-$1,000 | $ | 754 | $ | 1,054 |
| Deduct: | |||||
| Equity in earnings of unconsolidated entities | 170 | 122 | 179 | ||
| Interest and dividend income | 5 | 5 | 6 | ||
| Adjusted OIBDA (Non-GAAP)1 | $750-$825 | $ | 627 | $ | 869 |
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 September 30, 2022, can be found on UScellular’s website at investors.uscellular.com.
Stock Repurchase
During the third quarter of 2022, UScellular repurchased 352,635 of its Common Shares for $10 million.
Conference Call Information
UScellular will hold a conference call on November 4, 2022 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/549676635?t=1666384542862
▪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 4.8 million retail connections in 21 states. The Chicago-based company had 4,900 full- and part-time associates as of September 30, 2022. At the end of the third quarter of 2022, 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: 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; 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; 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; the impact, duration and severity of public health emergencies, such as the COVID-19 pandemic. 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 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | ||||||||||
| Retail Connections | |||||||||||||||
| Postpaid | |||||||||||||||
| Total at end of period | 4,264,000 | 4,296,000 | 4,335,000 | 4,380,000 | 4,391,000 | ||||||||||
| Gross additions | 151,000 | 128,000 | 126,000 | 165,000 | 145,000 | ||||||||||
| Feature phones | 5,000 | 4,000 | 2,000 | 3,000 | 2,000 | ||||||||||
| Smartphones | 102,000 | 90,000 | 89,000 | 122,000 | 103,000 | ||||||||||
| Connected devices | 44,000 | 34,000 | 35,000 | 40,000 | 40,000 | ||||||||||
| Net additions (losses) | (31,000) | (40,000) | (44,000) | (12,000) | (8,000) | ||||||||||
| Feature phones | (6,000) | (8,000) | (10,000) | (7,000) | (7,000) | ||||||||||
| Smartphones | (16,000) | (23,000) | (26,000) | 5,000 | 2,000 | ||||||||||
| Connected devices | (9,000) | (9,000) | (8,000) | (10,000) | (3,000) | ||||||||||
| ARPU1,2 | $ | 50.21 | $ | 50.07 | $ | 49.71 | $ | 48.62 | $ | 48.12 | |||||
| ARPA1,3 | $ | 130.27 | $ | 130.43 | $ | 129.93 | $ | 127.14 | $ | 125.99 | |||||
| Churn rate4 | 1.42 | % | 1.30 | % | 1.30 | % | 1.35 | % | 1.15 | % | |||||
| Handsets | 1.15 | % | 1.10 | % | 1.10 | % | 1.10 | % | 0.95 | % | |||||
| Connected devices | 3.40 | % | 2.73 | % | 2.70 | % | 3.08 | % | 2.59 | % | |||||
| Prepaid | |||||||||||||||
| Total at end of period | 493,000 | 490,000 | 495,000 | 513,000 | 518,000 | ||||||||||
| Gross additions | 62,000 | 56,000 | 55,000 | 63,000 | 74,000 | ||||||||||
| Net additions (losses) | 2,000 | (4,000) | (18,000) | (5,000) | 11,000 | ||||||||||
| ARPU2 | $ | 35.04 | $ | 35.25 | $ | 34.59 | $ | 34.53 | $ | 35.05 | |||||
| Churn rate4 | 4.07 | % | 4.07 | % | 4.84 | % | 4.39 | % | 4.09 | % | |||||
| Market penetration at end of period | |||||||||||||||
| Consolidated operating population | 32,370,000 | 32,370,000 | 32,370,000 | 32,127,000 | 31,865,000 | ||||||||||
| Consolidated operating penetration5 | 15 | % | 15 | % | 15 | % | 15 | % | 16 | % | |||||
| Capital expenditures (millions) | $ | 136 | $ | 268 | $ | 137 | $ | 321 | $ | 185 | |||||
| Total cell sites in service | 6,933 | 6,916 | 6,899 | 6,898 | 6,857 | ||||||||||
| Owned towers | 4,329 | 4,323 | 4,310 | 4,301 | 4,274 |
1Q3 2021 Postpaid ARPU and ARPA amounts exclude $9 million of postpaid revenue related to an out-of-period error recorded in that quarter.
2Average 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.
3Average 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.
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>September 30, | Nine Months Ended<br>September 30, | |||||||||||
| 2022 | 2021 | 2022<br>vs. 2021 | 2022 | 2021 | 2022<br>vs. 2021 | |||||||
| (Dollars and shares in millions, except per share amounts) | ||||||||||||
| Operating revenues | ||||||||||||
| Service1 | $ | 781 | $ | 788 | (1) | % | $ | 2,351 | $ | 2,333 | 1 | % |
| Equipment sales | 302 | 228 | 32 | % | 769 | 720 | 7 | % | ||||
| Total operating revenues | 1,083 | 1,016 | 7 | % | 3,120 | 3,053 | 2 | % | ||||
| Operating expenses | ||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 197 | 205 | (4) | % | 574 | 594 | (3) | % | ||||
| Cost of equipment sold | 354 | 252 | 40 | % | 887 | 786 | 13 | % | ||||
| Selling, general and administrative | 369 | 346 | 7 | % | 1,032 | 984 | 5 | % | ||||
| Depreciation, amortization and accretion | 177 | 160 | 10 | % | 520 | 510 | 2 | % | ||||
| Loss on impairment of licenses | — | — | — | 3 | — | N/M | ||||||
| (Gain) loss on asset disposals, net | 1 | 8 | (89) | % | 9 | 15 | (43) | % | ||||
| (Gain) loss on sale of business and other exit costs, net | — | — | 8 | % | (1) | (1) | 40 | % | ||||
| Total operating expenses | 1,098 | 971 | 13 | % | 3,024 | 2,888 | 5 | % | ||||
| Operating income (loss) | (15) | 45 | N/M | 96 | 165 | (42) | % | |||||
| Investment and other income (expense) | ||||||||||||
| Equity in earnings of unconsolidated entities | 40 | 48 | (17) | % | 122 | 137 | (11) | % | ||||
| Interest and dividend income | 2 | 1 | 37 | % | 5 | 5 | 11 | % | ||||
| Interest expense | (42) | (45) | 6 | % | (115) | (144) | 20 | % | ||||
| Total investment and other income (expense) | — | 4 | N/M | 12 | (2) | N/M | ||||||
| Income (loss) before income taxes | (15) | 49 | N/M | 108 | 163 | (34) | % | |||||
| Income tax expense (benefit) | (3) | 14 | N/M | 46 | 31 | 48 | % | |||||
| Net income (loss) | (12) | 35 | N/M | 62 | 132 | (53) | % | |||||
| Less: Net income attributable to noncontrolling interests, net of tax | — | 1 | (38) | % | 4 | 4 | 12 | % | ||||
| Net income (loss) attributable to UScellular shareholders | $ | (12) | $ | 34 | N/M | $ | 58 | $ | 128 | (55) | % | |
| Basic weighted average shares outstanding | 85 | 86 | (1) | % | 86 | 87 | (1) | % | ||||
| Basic earnings (loss) per share attributable to UScellular shareholders | $ | (0.15) | $ | 0.39 | N/M | $ | 0.68 | $ | 1.48 | (54) | % | |
| Diluted weighted average shares outstanding | 85 | 87 | (2) | % | 87 | 88 | (1) | % | ||||
| Diluted earnings (loss) per share attributable to UScellular shareholders | $ | (0.15) | $ | 0.38 | N/M | $ | 0.67 | $ | 1.46 | (54) | % |
N/M - Percentage change not meaningful
1During the three months ended September 30, 2021, UScellular recorded a $9 million out-of-period error, which increased Service revenue by $9 million for the three and nine months ended September 30, 2021.
| United States Cellular Corporation | ||||
|---|---|---|---|---|
| Consolidated Statement of Cash Flows | ||||
| (Unaudited) | ||||
| Nine Months Ended<br>September 30, | ||||
| 2022 | 2021 | |||
| (Dollars in millions) | ||||
| Cash flows from operating activities | ||||
| Net income | $ | 62 | $ | 132 |
| Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | ||||
| Depreciation, amortization and accretion | 520 | 510 | ||
| Bad debts expense | 93 | 34 | ||
| Stock-based compensation expense | 18 | 20 | ||
| Deferred income taxes, net | 31 | 47 | ||
| Equity in earnings of unconsolidated entities | (122) | (137) | ||
| Distributions from unconsolidated entities | 100 | 106 | ||
| Loss on impairment of licenses | 3 | — | ||
| (Gain) loss on asset disposals, net | 9 | 15 | ||
| (Gain) loss on sale of business and other exit costs, net | (1) | (1) | ||
| Other operating activities | 6 | 31 | ||
| Changes in assets and liabilities from operations | ||||
| Accounts receivable | (54) | 19 | ||
| Equipment installment plans receivable | (131) | (44) | ||
| Inventory | (71) | 10 | ||
| Accounts payable | (7) | (33) | ||
| Customer deposits and deferred revenues | 27 | 10 | ||
| Accrued taxes | 134 | (36) | ||
| Accrued interest | 10 | 7 | ||
| Other assets and liabilities | 25 | (23) | ||
| Net cash provided by operating activities | 652 | 667 | ||
| Cash flows from investing activities | ||||
| Cash paid for additions to property, plant and equipment | (409) | (456) | ||
| Cash paid for licenses | (575) | (1,263) | ||
| Cash received from investments | — | 3 | ||
| Cash received from divestitures and exchanges | 8 | 2 | ||
| Advance payments for license acquisitions | — | (20) | ||
| Other investing activities | — | 2 | ||
| Net cash used in investing activities | (976) | (1,732) | ||
| Cash flows from financing activities | ||||
| Issuance of long-term debt | 725 | 1,217 | ||
| Repayment of long-term debt | (327) | (1,117) | ||
| Issuance of short-term debt | 110 | — | ||
| Repayment of short-term debt | (50) | — | ||
| Common Shares reissued for benefit plans, net of tax payments | (5) | (16) | ||
| Repurchase of Common Shares | (28) | (21) | ||
| Payment of debt issuance costs | (1) | (20) | ||
| Distributions to noncontrolling interests | (3) | (2) | ||
| Other financing activities | (7) | (4) | ||
| Net cash provided by financing activities | 414 | 37 | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 90 | (1,028) | ||
| Cash, cash equivalents and restricted cash | ||||
| Beginning of period | 199 | 1,291 | ||
| End of period | $ | 289 | $ | 263 |
| United States Cellular Corporation | ||||
| --- | --- | --- | --- | --- |
| Consolidated Balance Sheet Highlights | ||||
| (Unaudited) | ||||
| ASSETS | ||||
| September 30, 2022 | December 31, 2021 | |||
| (Dollars in millions) | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 254 | $ | 156 |
| Accounts receivable, net | 1,075 | 1,046 | ||
| Inventory, net | 243 | 173 | ||
| Prepaid expenses | 61 | 58 | ||
| Income taxes receivable | 1 | 123 | ||
| Other current assets | 41 | 49 | ||
| Total current assets | 1,675 | 1,605 | ||
| Assets held for sale | 29 | 18 | ||
| Licenses | 4,680 | 4,088 | ||
| Investments in unconsolidated entities | 461 | 439 | ||
| Property, plant and equipment, net | 2,631 | 2,606 | ||
| Operating lease right-of-use assets | 932 | 959 | ||
| Other assets and deferred charges | 648 | 626 | ||
| Total assets | $ | 11,056 | $ | 10,341 |
| United States Cellular Corporation | ||||
| --- | --- | --- | --- | --- |
| Consolidated Balance Sheet Highlights | ||||
| (Unaudited) | ||||
| LIABILITIES AND EQUITY | ||||
| September 30, 2022 | December 31, 2021 | |||
| (Dollars in millions, except per share amounts) | ||||
| Current liabilities | ||||
| Current portion of long-term debt | $ | 11 | $ | 3 |
| Accounts payable | 348 | 360 | ||
| Customer deposits and deferred revenues | 218 | 191 | ||
| Accrued taxes | 36 | 33 | ||
| Accrued compensation | 62 | 83 | ||
| Short-term operating lease liabilities | 133 | 129 | ||
| Other current liabilities | 291 | 104 | ||
| Total current liabilities | 1,099 | 903 | ||
| Deferred liabilities and credits | ||||
| Deferred income tax liability, net | 705 | 674 | ||
| Long-term operating lease liabilities | 859 | 889 | ||
| Other deferred liabilities and credits | 661 | 573 | ||
| Long-term debt, net | 3,115 | 2,728 | ||
| Noncontrolling interests with redemption features | 12 | 11 | ||
| Equity | ||||
| UScellular shareholders’ equity | ||||
| Series A Common and Common Shares, par value $1.00 per share | 88 | 88 | ||
| Additional paid-in capital | 1,696 | 1,678 | ||
| Treasury shares | (85) | (68) | ||
| Retained earnings | 2,890 | 2,849 | ||
| Total UScellular shareholders’ equity | 4,589 | 4,547 | ||
| Noncontrolling interests | 16 | 16 | ||
| Total equity | 4,605 | 4,563 | ||
| Total liabilities and equity | $ | 11,056 | $ | 10,341 |
United States Cellular Corporation
Financial Measures and Reconciliations
(Unaudited)
Free Cash Flow
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| (Dollars in millions) | ||||||||
| Cash flows from operating activities (GAAP) | $ | 73 | $ | 304 | $ | 652 | $ | 667 |
| Less: Cash paid for additions to property, plant and equipment | 121 | 175 | 409 | 456 | ||||
| Free cash flow (Non-GAAP)1 | $ | (48) | $ | 129 | $ | 243 | $ | 211 |
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.
9