AD 8-K
Array Digital Infrastructure, Inc. (AD)
8-K
2024-07-16
For: 2024-07-16
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April 08, 2026
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): July 16, 2024
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(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 | ||||||||||||||||||
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
As previously announced, on May 24, 2024, Telephone and Data Systems, Inc. (TDS), United States Cellular Corporation (UScellular), T-Mobile US, Inc. (T-Mobile) and USCC Wireless Holdings, LLC entered into a Securities Purchase Agreement (Purchase Agreement) pursuant to which, among other items, UScellular has agreed to sell its wireless operations and select spectrum assets to T-Mobile for $4.4 billion, payable in cash and the assumption of certain debt, subject to certain potential adjustments as further described in the Purchase Agreement (Transaction).
In its Annual Report on Form 10-K for the year ended December 31, 2023 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, UScellular reported its operations in one reportable segment.
Due to the planned disposal of the UScellular wireless operations pursuant to the Purchase Agreement, UScellular is disaggregating its reportable segments to provide relevant financial information for both internal reporting and external reporting purposes. Effective for the quarter ending June 30, 2024, UScellular will have two reportable segments:
•“Wireless”: Operation of wireless network and provision of wireless services in markets throughout the United States
•“Towers”: Operation of owned cell towers to lease space to wireless carriers, including the Wireless business as well as third-party carriers
UScellular is providing updated financial information in Exhibit 99.1 to report historical financial performance under the new segment structure for the quarterly and annual periods of 2022, 2023 and 2024. This information includes certain non-GAAP financial measures that are useful in evaluating the effectiveness of operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.
UScellular intends to begin reporting its financial results based on the new segment structure with the filing of its Quarterly Report on Form 10-Q for the quarter ending June 30, 2024, with prior periods reported accordingly.
Item 7.01. Regulation FD Disclosure
UScellular made available an investor presentation to provide additional details on its tower operations in the context of the Transaction. A copy of the investor presentation is furnished herewith as Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit Number | Description of Exhibits | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 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: | July 16, 2024 | By: | /s/ Douglas W. Chambers | ||||||||
| Douglas W. Chambers | |||||||||||
| Executive Vice President, Chief Financial Officer and Treasurer | |||||||||||
Exhibit 99.1
United States Cellular Corporation
Financial Highlights by Segment
(Unaudited)
| UScellular Consolidated | Q1 2024 | ||||
| (Dollars in millions) | |||||
| Operating revenues | |||||
Service1 | $ | 754 | |||
| Equipment sales | 196 | ||||
| Total operating revenues | 950 | ||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 182 | ||||
| Cost of equipment sold | 216 | ||||
| Selling, general and administrative | 331 | ||||
| Depreciation, amortization and accretion | 165 | ||||
| (Gain) loss on asset disposals, net | 6 | ||||
| (Gain) loss on license sales and exchanges, net | (1) | ||||
| Operating income | 51 | ||||
| Equity in earnings of unconsolidated entities | 42 | ||||
| Interest and dividend income | 2 | ||||
| Interest expense | (43) | ||||
| Income before income taxes | 52 | ||||
| Income tax expense | 28 | ||||
| Net income | 24 | ||||
| Add back: | |||||
| Depreciation, amortization and accretion | 165 | ||||
| Expenses related to strategic alternatives review | 7 | ||||
| (Gain) loss on asset disposals, net | 6 | ||||
| (Gain) loss on license sales and exchanges, net | (1) | ||||
| Interest expense | 43 | ||||
| Income tax expense | 28 | ||||
Adjusted EBITDA (Non-GAAP)2 | $ | 272 | |||
| Wireless | Q1 2024 | ||||
| (Dollars in millions) | |||||
| Operating revenues | |||||
| Service | $ | 729 | |||
| Equipment sales | 196 | ||||
| Total operating revenues | 925 | ||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 197 | ||||
| Cost of equipment sold | 216 | ||||
| Selling, general and administrative | 324 | ||||
| Depreciation, amortization and accretion | 154 | ||||
| (Gain) loss on asset disposals, net | 6 | ||||
| (Gain) loss on license sales and exchanges, net | (1) | ||||
| Operating income | 29 | ||||
| Add back: | |||||
| Depreciation, amortization and accretion | 154 | ||||
| Expenses related to strategic alternatives review | 7 | ||||
| (Gain) loss on asset disposals, net | 6 | ||||
| (Gain) loss on license sales and exchanges, net | (1) | ||||
Adjusted EBITDA (Non-GAAP)2 | $ | 195 | |||
| Towers | Q1 2024 | ||||
| (Dollars in millions) | |||||
| Operating revenues | |||||
| Service - Third-Party | $ | 25 | |||
| Service - Intracompany | 33 | ||||
| Total operating revenues | 58 | ||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 18 | ||||
| Selling, general and administrative | 7 | ||||
| Depreciation, amortization and accretion | 11 | ||||
| Operating income | 22 | ||||
| Add back: | |||||
| Depreciation, amortization and accretion | 11 | ||||
Adjusted EBITDA (Non-GAAP)2 | $ | 33 | |||
| UScellular Consolidated | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Full Year 2023 | ||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||
Service1 | $ | 767 | $ | 760 | $ | 762 | $ | 755 | $ | 3,044 | |||||||||||||||||||
| Equipment sales | 219 | 197 | 201 | 245 | 862 | ||||||||||||||||||||||||
| Total operating revenues | 986 | 957 | 963 | 1,000 | 3,906 | ||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 182 | 190 | 185 | 183 | 740 | ||||||||||||||||||||||||
| Cost of equipment sold | 253 | 228 | 228 | 280 | 988 | ||||||||||||||||||||||||
| Selling, general and administrative | 345 | 341 | 333 | 349 | 1,368 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 170 | 161 | 159 | 166 | 656 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 10 | 3 | 1 | 3 | 17 | ||||||||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | — | — | — | (2) | (2) | ||||||||||||||||||||||||
| Operating income | 26 | 34 | 57 | 21 | 139 | ||||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 44 | 38 | 40 | 37 | 158 | ||||||||||||||||||||||||
| Interest and dividend income | 2 | 3 | 3 | 2 | 10 | ||||||||||||||||||||||||
| Interest expense | (47) | (51) | (50) | (49) | (196) | ||||||||||||||||||||||||
| Income before income taxes | 25 | 24 | 50 | 11 | 111 | ||||||||||||||||||||||||
| Income tax expense (benefit) | 11 | 19 | 27 | (4) | 53 | ||||||||||||||||||||||||
| Net income | 14 | 5 | 23 | 15 | 58 | ||||||||||||||||||||||||
| Add back: | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 170 | 161 | 159 | 166 | 656 | ||||||||||||||||||||||||
| Expenses related to strategic alternatives review | — | — | 3 | 6 | 8 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 10 | 3 | 1 | 3 | 17 | ||||||||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | — | — | — | (2) | (2) | ||||||||||||||||||||||||
| Interest expense | 47 | 51 | 50 | 49 | 196 | ||||||||||||||||||||||||
| Income tax expense (benefit) | 11 | 19 | 27 | (4) | 53 | ||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)2 | $ | 252 | $ | 239 | $ | 263 | $ | 233 | $ | 986 | |||||||||||||||||||
| Wireless | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Full Year 2023 | ||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||
| Service | $ | 742 | $ | 735 | $ | 737 | $ | 730 | $ | 2,943 | |||||||||||||||||||
| Equipment sales | 219 | 197 | 201 | 245 | 862 | ||||||||||||||||||||||||
| Total operating revenues | 961 | 932 | 938 | 975 | 3,805 | ||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 197 | 203 | 199 | 197 | 794 | ||||||||||||||||||||||||
| Cost of equipment sold | 253 | 228 | 228 | 280 | 988 | ||||||||||||||||||||||||
| Selling, general and administrative | 336 | 333 | 324 | 340 | 1,334 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 158 | 149 | 148 | 155 | 610 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 10 | 3 | 1 | 5 | 19 | ||||||||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | — | — | — | (2) | (2) | ||||||||||||||||||||||||
| Operating income | 7 | 16 | 38 | — | 62 | ||||||||||||||||||||||||
| Add back: | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 158 | 149 | 148 | 155 | 610 | ||||||||||||||||||||||||
| Expenses related to strategic alternatives review | — | — | 3 | 6 | 8 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 10 | 3 | 1 | 5 | 19 | ||||||||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | — | — | — | (2) | (2) | ||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)2 | $ | 175 | $ | 168 | $ | 190 | $ | 164 | $ | 697 | |||||||||||||||||||
| Towers | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Full Year 2023 | ||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||
| Service - Third-Party | $ | 25 | $ | 25 | $ | 25 | $ | 25 | $ | 101 | |||||||||||||||||||
| Service - Intracompany | 32 | 32 | 32 | 32 | 127 | ||||||||||||||||||||||||
| Total operating revenues | 57 | 57 | 57 | 57 | 228 | ||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 17 | 19 | 18 | 18 | 73 | ||||||||||||||||||||||||
| Selling, general and administrative | 9 | 8 | 9 | 9 | 34 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 12 | 11 | 11 | 46 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | — | — | — | (2) | (2) | ||||||||||||||||||||||||
| Operating income | 19 | 18 | 19 | 21 | 77 | ||||||||||||||||||||||||
| Add back: | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 12 | 11 | 11 | 46 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | — | — | — | (2) | (2) | ||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)2 | $ | 31 | $ | 30 | $ | 30 | $ | 30 | $ | 121 | |||||||||||||||||||
| UScellular Consolidated | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Full Year 2022 | ||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||
Service1 | $ | 787 | $ | 783 | $ | 781 | $ | 774 | $ | 3,125 | |||||||||||||||||||
| Equipment sales | 223 | 244 | 302 | 274 | 1,044 | ||||||||||||||||||||||||
| Total operating revenues | 1,010 | 1,027 | 1,083 | 1,048 | 4,169 | ||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 185 | 192 | 197 | 181 | 755 | ||||||||||||||||||||||||
| Cost of equipment sold | 257 | 275 | 354 | 330 | 1,216 | ||||||||||||||||||||||||
| Selling, general and administrative | 325 | 339 | 369 | 374 | 1,408 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 171 | 172 | 177 | 179 | 700 | ||||||||||||||||||||||||
| Loss on impairment of licenses | — | 3 | — | — | 3 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 6 | 1 | 11 | 19 | ||||||||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (1) | — | — | — | (1) | ||||||||||||||||||||||||
| Operating income (loss) | 71 | 40 | (15) | (27) | 69 | ||||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 45 | 37 | 40 | 36 | 158 | ||||||||||||||||||||||||
| Interest and dividend income | 1 | 3 | 2 | 3 | 8 | ||||||||||||||||||||||||
| Interest expense | (33) | (40) | (42) | (49) | (163) | ||||||||||||||||||||||||
| Income (loss) before income taxes | 84 | 40 | (15) | (37) | 72 | ||||||||||||||||||||||||
| Income tax expense (benefit) | 32 | 18 | (3) | (9) | 37 | ||||||||||||||||||||||||
| Net income (loss) | 52 | 22 | (12) | (28) | 35 | ||||||||||||||||||||||||
| Add back: | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 171 | 172 | 177 | 179 | 700 | ||||||||||||||||||||||||
| Loss on impairment of licenses | — | 3 | — | — | 3 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 6 | 1 | 11 | 19 | ||||||||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (1) | — | — | — | (1) | ||||||||||||||||||||||||
| Interest expense | 33 | 40 | 42 | 49 | 163 | ||||||||||||||||||||||||
| Income tax expense (benefit) | 32 | 18 | (3) | (9) | 37 | ||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)2 | $ | 289 | $ | 261 | $ | 205 | $ | 202 | $ | 956 | |||||||||||||||||||
| Wireless | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Full Year 2022 | ||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||
| Service | $ | 765 | $ | 760 | $ | 758 | $ | 750 | $ | 3,032 | |||||||||||||||||||
| Equipment sales | 223 | 244 | 302 | 274 | 1,044 | ||||||||||||||||||||||||
| Total operating revenues | 988 | 1,004 | 1,060 | 1,024 | 4,076 | ||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 200 | 205 | 209 | 194 | 807 | ||||||||||||||||||||||||
| Cost of equipment sold | 257 | 275 | 354 | 330 | 1,216 | ||||||||||||||||||||||||
| Selling, general and administrative | 318 | 331 | 361 | 366 | 1,376 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 159 | 161 | 166 | 167 | 655 | ||||||||||||||||||||||||
| Loss on impairment of licenses | — | 3 | — | — | 3 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 6 | 1 | 11 | 19 | ||||||||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (1) | — | — | — | (1) | ||||||||||||||||||||||||
| Operating income (loss) | 53 | 23 | (31) | (44) | 1 | ||||||||||||||||||||||||
| Add back: | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 159 | 161 | 166 | 167 | 655 | ||||||||||||||||||||||||
| Loss on impairment of licenses | — | 3 | — | — | 3 | ||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 6 | 1 | 11 | 19 | ||||||||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (1) | — | — | — | (1) | ||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)2 | $ | 213 | $ | 193 | $ | 136 | $ | 134 | $ | 677 | |||||||||||||||||||
| Towers | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Full Year 2022 | ||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||
| Service - Third-Party | $ | 22 | $ | 23 | $ | 23 | $ | 24 | $ | 93 | |||||||||||||||||||
| Service - Intracompany | 31 | 31 | 31 | 31 | 123 | ||||||||||||||||||||||||
| Total operating revenues | 53 | 54 | 54 | 55 | 216 | ||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 16 | 18 | 19 | 18 | 71 | ||||||||||||||||||||||||
| Selling, general and administrative | 7 | 8 | 8 | 8 | 32 | ||||||||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 11 | 11 | 12 | 45 | ||||||||||||||||||||||||
| Operating income | 18 | 17 | 16 | 17 | 68 | ||||||||||||||||||||||||
| Add back: | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 11 | 11 | 12 | 45 | ||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)2 | $ | 30 | $ | 28 | $ | 27 | $ | 29 | $ | 113 | |||||||||||||||||||
Numbers may not foot due to rounding.
1Consolidated amounts include elimination of intracompany charges for the use of company-owned towers by the Wireless segment.
2Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is a segment measure reported to the chief operating decision maker for purposes of assessing the segments' performance. Adjusted EBITDA is defined as net income, adjusted for the items set forth in the reconciliation above. UScellular believes Adjusted EBITDA is a useful measure 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.
Exhibit 99.2
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