Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Entity Registrant Name | United States Cellular Corporation |
Entity Central Index Key | 821130 |
Document Type | 10-Q |
Document Period End Date | 31-Mar-15 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Entity Filer Category | Accelerated Filer |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
Trading Symbol | USM |
Common Shares | |
Entity Common Stock, Shares Outstanding | 51,029,748 |
Series A Common Shares | |
Entity Common Stock, Shares Outstanding | 33,005,877 |
Consolidated_Statement_Of_Oper
Consolidated Statement Of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating revenues | ||
Service | $828,211 | $853,613 |
Equipment sales | 137,034 | 72,198 |
Total operating revenues | 965,245 | 925,811 |
Operating expenses | ||
System operations (excluding Depreciation, amortization and accretion reported below) | 190,677 | 180,607 |
Cost of equipment sold | 238,301 | 270,474 |
Selling, general and administrative (including charges from affiliates of $22.0 million and $21.2 million, respectively) | 368,968 | 395,564 |
Depreciation, amortization and accretion | 147,085 | 167,753 |
(Gain) loss on asset disposals, net | 4,251 | 1,934 |
(Gain) loss on sale of business and other exit costs, net | -111,477 | -6,900 |
(Gain) loss on license sales and exchanges, net | -122,873 | -91,446 |
Total operating expenses | 714,932 | 917,986 |
Operating income | 250,313 | 7,825 |
Investment and other income (expense) | ||
Equity in earnings of unconsolidated entities | -34,471 | -37,075 |
Interest and dividend income | 7,566 | 884 |
Interest expense | -19,964 | -14,862 |
Other, net | 105 | 86 |
Total investment and other income (expense) | 22,178 | 23,183 |
Income before income taxes | 272,491 | 31,008 |
Income tax expense | 107,501 | 12,604 |
Net income | 164,990 | 18,404 |
Less: Net income (loss) attributable to noncontrolling interests, net of tax | 4,926 | -1,078 |
Net income attributable to U.S. Cellular shareholders | $160,064 | $19,482 |
Basic weighted average shares outstanding | 84,042 | 84,213 |
Basic earnings per share attributable to U.S. Cellular shareholders | $1.90 | $0.23 |
Diluted weighted average shares outstanding | 84,838 | 85,065 |
Diluted earnings per share attributable to U.S. Cellular shareholders | $1.89 | $0.23 |
Consolidated_Statement_Of_Oper1
Consolidated Statement Of Operations Parenthetical (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating expenses | ||
Selling, general and administrative, charges from affiliates | $22 | $21.20 |
Consolidated_Statement_of_Cash
Consolidated Statement of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities | ||
Net income | $164,990 | $18,404 |
Add (deduct) adjustments to reconcile net income to cash flows from operating activities | ||
Depreciation, amortization and accretion | 147,085 | 167,753 |
Bad debts expense | 29,132 | 20,492 |
Stock-based compensation expense | 5,740 | 4,955 |
Deferred income taxes, net | -26,166 | -4,817 |
Equity in earnings of unconsolidated entities | -34,471 | -37,075 |
Distributions from unconsolidated entities | 12,985 | 12,818 |
(Gain) loss on asset disposals, net | 4,251 | 1,934 |
(Gain) loss on sale of business and other exit costs, net | -111,477 | -6,900 |
(Gain) loss on license sales and exchanges, net | -122,873 | -91,446 |
Noncash interest expense | 386 | 269 |
Other operating activities | 47 | |
Changes in assets and liabilities from operations | ||
Accounts receivable | -1,437 | 79,586 |
Equipment installment plans receivable | -36,498 | 2,394 |
Inventory | 102,167 | 19,306 |
Accounts payable | -18,691 | -40,557 |
Customer deposits and deferred revenues | 13,419 | -1,510 |
Accrued taxes | 189,387 | -15,403 |
Accrued interest | 9,504 | 9,182 |
Other assets and liabilities | -71,955 | -75,896 |
Cash flows from operating activities | 255,478 | 63,536 |
Cash flows from investing activities | ||
Cash used for additions to property, plant and equipment | -116,079 | -109,498 |
Cash paid for aquisitions and licenses | -279,656 | -9,135 |
Cash received from divestitures and exchanges | 274,111 | 103,042 |
Cash received for investments | 10,000 | |
Other investing activities | 1,151 | 584 |
Cash flows from investing activities | -120,473 | -5,007 |
Cash flows from financing activities | ||
Common shares reissued for benefit plans, net of tax payments | 487 | 316 |
Common shares repurchased | -2,302 | -2,000 |
Payment of debt issuance costs | -3,018 | |
Acquisition of towers in common control transaction | -2,437 | |
Distributions to noncontrolling interests | -225 | -346 |
Other financing activities | -2,130 | -23 |
Cash flows from financing activities | -9,625 | -2,053 |
Net decrease in cash and cash equivalents | 125,380 | 56,476 |
Cash and cash equivalents | ||
Beginning of period | 211,513 | 342,065 |
End of period | $336,893 | $398,541 |
Consolidated_Balance_Sheet
Consolidated Balance Sheet (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $336,893 | $211,513 |
Accounts receivable | ||
Customers and agents, less allowances of $39,673 and $37,654, respectively | 466,830 | 466,048 |
Roaming | 5,342 | 23,865 |
Affiliated | 29,054 | 994 |
Other, less allowances of $842 and $859, respectively | 57,772 | 66,051 |
Inventory, net | 164,900 | 267,068 |
Prepaid expenses | 69,702 | 59,744 |
Net deferred income tax asset | 77,246 | 93,058 |
Other current assets | 18,112 | 90,834 |
Total current assets | 1,225,851 | 1,279,175 |
Assets held for sale | 22,203 | 107,055 |
Investments | ||
Licenses | 1,827,102 | 1,443,438 |
Goodwill | 370,151 | 370,151 |
Investments in unconsolidated entities | 304,501 | 283,014 |
Total investments | 2,501,754 | 2,096,603 |
Property, plant and equipment | ||
In service and under construction | 7,426,410 | 7,458,740 |
Less: Accumulated depreciation and amortization | 4,781,293 | 4,730,523 |
Property, plant and equipment, net | 2,645,117 | 2,728,217 |
Other assets and deferred charges | 211,453 | 276,218 |
Total assets | 6,606,378 | 6,487,268 |
Current liabilities | ||
Current portion of long-term debt | 57 | 46 |
Accounts payable | ||
Affiliated | 8,044 | 9,774 |
Trade | 245,170 | 306,845 |
Customer deposits and deferred revenues | 301,419 | 287,562 |
Accrued taxes | 139,407 | 36,652 |
Accrued compensation | 36,957 | 66,162 |
Other current liabilities | 130,780 | 149,853 |
Total current liabilities | 861,834 | 856,894 |
Liabilities held for sale | 20,934 | |
Deferred liabilities and credits | ||
Net deferred income tax liability | 816,999 | 859,867 |
Other deferred liabilities and credits | 295,287 | 284,002 |
Long-term debt | 1,151,901 | 1,151,819 |
Commitments and contingencies | ||
Noncontrolling interests with redemption features | 6,619 | 1,150 |
U.S. Cellular shareholders' equity | ||
Series A Common and Common Shares | 88,074 | 88,074 |
Additional paid-in capital | 1,478,910 | 1,472,558 |
Treasury Shares, at cost | -170,544 | -169,139 |
Retained earnings | 2,067,455 | 1,910,498 |
Total U.S. Cellular shareholders' equity | 3,463,895 | 3,301,991 |
Noncontrolling interests | 9,843 | 10,611 |
Total equity | 3,473,738 | 3,312,602 |
Total liabilities and equity | $6,606,378 | $6,487,268 |
Consolidated_Balance_Sheet_Par
Consolidated Balance Sheet Parenthetical (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
Current assets | ||
Customers and agents, allowances | $39,673 | $37,654 |
Other, allowances | 842 | 859 |
U.S. Cellular shareholders' equity | ||
Authorized shares | 190,000 | 190,000 |
Issued shares | 88,074 | 88,074 |
Outstanding shares | 84,036 | 84,080 |
Par value | 88,074 | 88,074 |
Treasury Shares | ||
U.S. Cellular shareholders' equity | ||
Treasury shares | 4,038 | 3,994 |
Common Shares | ||
U.S. Cellular shareholders' equity | ||
Authorized shares | 140,000 | 140,000 |
Issued shares | 55,068 | 55,068 |
Outstanding shares | 51,030 | 51,074 |
Par value per share | $1 | $1 |
Par value | 55,068 | 55,068 |
Common Shares | Treasury Shares | ||
U.S. Cellular shareholders' equity | ||
Treasury shares | 4,038 | 3,994 |
Series A Common Shares | ||
U.S. Cellular shareholders' equity | ||
Authorized shares | 50,000 | 50,000 |
Issued shares | 33,006 | 33,006 |
Outstanding shares | 33,006 | 33,006 |
Par value per share | $1 | $1 |
Par value | $33,006 | $33,006 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Equity (USD $) | Total | Series A Common and Common Shares | Additional Paid-In Capital | Treasury Shares | Retained Earnings | Total U.S. Cellular Shareholders' Equity | Noncontrolling Interests |
In Thousands, unless otherwise specified | |||||||
Beginning balance at Dec. 31, 2013 | $3,409,597 | $88,074 | $1,424,729 | ($164,692) | $2,043,095 | $3,391,206 | $18,391 |
Add (Deduct) | |||||||
Net income attributable to U.S. Cellular shareholders | 19,482 | 19,482 | 19,482 | ||||
Net income (loss) attributable to noncontrolling interests classified as equity | -1,107 | -1,107 | |||||
Repurchase of Common Shares | -2,300 | -2,300 | -2,300 | ||||
Incentive and compensation plans | 399 | 0 | 1,415 | -1,016 | 399 | ||
Stock-based compensation awards | 4,576 | 4,576 | 4,576 | ||||
Tax windfall (shortfall) from stock awards | -157 | -157 | -157 | ||||
Distributions to noncontrolling interests | -324 | -324 | |||||
Ending balance at Mar. 31, 2014 | 3,430,166 | 88,074 | 1,429,148 | -165,577 | 2,061,561 | 3,413,206 | 16,960 |
Beginning balance at Dec. 31, 2014 | 3,312,602 | 88,074 | 1,472,558 | -169,139 | 1,910,498 | 3,301,991 | 10,611 |
Add (Deduct) | |||||||
Net income attributable to U.S. Cellular shareholders | 160,064 | 160,064 | 160,064 | ||||
Net income (loss) attributable to noncontrolling interests classified as equity | -691 | -691 | |||||
Repurchase of Common Shares | -2,302 | -2,302 | -2,302 | ||||
Incentive and compensation plans | 413 | 186 | 897 | -670 | 413 | ||
Stock-based compensation awards | 5,492 | 5,492 | 5,492 | ||||
Tax windfall (shortfall) from stock awards | -206 | -206 | -206 | ||||
Distributions to noncontrolling interests | -77 | -77 | |||||
Acquisition of towers in common control transaction | -1,552 | 885 | -2,437 | -1,552 | |||
Adjust investment in subsidiaries for noncontrolling interest purchases | -5 | -5 | -5 | ||||
Ending balance at Mar. 31, 2015 | $3,473,738 | $88,074 | $1,478,910 | ($170,544) | $2,067,455 | $3,463,895 | $9,843 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure Text Block | |
Basis of Presentation | 1. Basis of Presentation |
United States Cellular Corporation (“U.S. Cellular”), a Delaware corporation, is an 84%-owned subsidiary of Telephone and Data Systems, Inc. (“TDS”). | |
The accounting policies of U.S. Cellular conform to accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The consolidated financial statements include the accounts of U.S. Cellular, subsidiaries in which it has a controlling financial interest, general partnerships in which U.S. Cellular has a majority partnership interest and certain entities in which U.S. Cellular has a variable interest that require consolidation under GAAP. All material intercompany accounts and transactions have been eliminated. | |
The consolidated financial statements included herein have been prepared by U.S. Cellular, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, U.S. Cellular believes that the disclosures included herein are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in U.S. Cellular's Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2014. | |
The accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring items, unless otherwise disclosed) necessary for a fair statement of the financial position as of March 31, 2015 and December 31, 2014, and the results of operations, cash flows and changes in equity for the three months ended March 31, 2015 and 2014. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2015 and 2014 equaled net income. These results are not necessarily indicative of the results to be expected for the full year. | |
Recently Issued Accounting Pronouncements | |
On May 28, 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This update has an effective date of January 1, 2017. However, on April 1, 2015, the FASB voted to propose a one-year deferral of the effective date of ASU 2014-09. If the proposal is adopted, U.S. Cellular could elect to adopt the provisions of ASU 2014-09 effective January 1, 2018. Under this proposal, early adoption as of January 1, 2017 also would be permissible. U.S. Cellular is evaluating the effects that adoption of ASU 2014-09 will have on its financial position, results of operations, and disclosures. | |
On August 27, 2014, the FASB issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 requires U.S. Cellular to assess its ability to continue as a going concern each interim and annual reporting period and provide certain disclosures if there is substantial doubt about the entity's ability to continue as a going concern, including management's plan to alleviate the substantial doubt. U.S. Celluar is required to adopt the provisions of ASU 2014-15 effective January 1, 2016, but early adoption is permitted. The adoption of ASU 2014-15 is not expected to impact U.S. Cellular's financial position or results of operations. | |
On February 18, 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation: Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 simplifies consolidation accounting by reducing the number of consolidation models. Additionally, ASU 2015-02 changes certain criteria for identifying variable interest entities. U.S. Cellular is required to adopt the provisions of ASU 2015-02 effective January 1, 2016. Early adoption is permitted. U.S. Cellular is evaluating the effects that adoption of ASU 2015-02 will have on its financial position, results of operations, and disclosures. | |
On April 7, 2015, the FASB issued Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as an offset to the related debt obligation. U.S. Cellular is required to apply the standards of this update effective January 1, 2016 on a retrospective basis. Early adoption is permitted. As of March 31, 2015, U.S. Cellular had $29.7 million in debt issuance costs classified as Other assets and deferred charges that, upon adoption of the new standard, would be reclassified as an offset to Long-term debt. | |
Amounts Collected from Customers and Remitted to Governmental Authorities | |
U.S. Cellular records amounts collected from customers and remitted to governmental authorities net within a tax liability account if the tax is assessed upon the customer and U.S. Cellular merely acts as an agent in collecting the tax on behalf of the imposing governmental authority. If the tax is assessed upon U.S. Cellular, then amounts collected from customers as recovery of the tax are recorded in Service revenues and amounts remitted to governmental authorities are recorded in Selling, general and administrative expenses in the Consolidated Statement of Operations. The amounts recorded gross in revenues that are billed to customers and remitted to governmental authorities totaled $21.2 million and $26.4 million for the three months ended March 31, 2015 and 2014, respectively. | |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Disclosure Text Block | |||||||||||||||
Fair Value Measurements | 2. Fair Value Measurements | ||||||||||||||
As of March 31, 2015 and December 31, 2014, U.S. Cellular did not have any financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP. | |||||||||||||||
The provisions of GAAP establish a fair value hierarchy that contains three levels for inputs used in fair value measurements. Level 1 inputs include quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets and liabilities in inactive markets. Level 3 inputs are unobservable. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. A financial instrument's level within the fair value hierarchy is not representative of its expected performance or its overall risk profile and, therefore, Level 3 assets are not necessarily higher risk than Level 2 assets or Level 1 assets. | |||||||||||||||
U.S. Cellular has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below. | |||||||||||||||
Level within the Fair Value Hierarchy | 31-Mar-15 | 31-Dec-14 | |||||||||||||
Book Value | Fair Value | Book Value | Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Cash and cash equivalents | 1 | $ | 336,893 | $ | 336,893 | $ | 211,513 | $ | 211,513 | ||||||
Long-term debt | |||||||||||||||
Retail | 2 | 617,000 | 625,855 | 617,000 | 608,462 | ||||||||||
Institutional | 2 | 532,793 | 526,199 | 532,722 | 513,647 | ||||||||||
The fair value of Cash and cash equivalents approximate their book values due to the short-term nature of these financial instruments. Long-term debt excludes capital lease obligations and the current portion of Long-term debt. The fair value of “Retail” Long-term debt was estimated using market prices for the 6.95% Senior Notes and 7.25% Senior Notes. U.S. Cellular's “Institutional” debt consists of the 6.7% Senior Notes which are traded over the counter. U.S. Cellular estimated the fair value of its Institutional debt through a discounted cash flow analysis using an estimated yield to maturity of 7.02% and 7.25% at March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||
Equipment_Installment_Plans
Equipment Installment Plans | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Disclosure Text Block | |||||||
Equipment Installment Plans | 3. Equipment Installment Plans | ||||||
U.S. Cellular offers customers the option to purchase certain devices under an equipment installment contract over a period of up to 24 months. For certain equipment installment plans, after a specified period of time, the customer may have the right to upgrade to a new device and have the remaining unpaid equipment installment contract balance waived, subject to certain conditions, including trading in the original device in good working condition and signing a new equipment installment contract. U.S. Cellular values this trade-in right as a guarantee liability. The guarantee liability is initially measured at fair value and is determined based on assumptions including the probability and timing of the customer upgrading to a new device and the fair value of the device being traded-in at the time of trade-in. As of March 31, 2015 and December 31, 2014, the guarantee liability related to these plans was $67.8 million and $57.5 million respectively, and is reflected in Customer deposits and deferred revenues in the Consolidated Balance Sheet. | |||||||
U.S. Cellular equipment installment plans do not provide for explicit interest charges. For equipment installment plans with a duration of greater than twelve months, U.S. Cellular imputes interest. | |||||||
The following table summarizes unbilled equipment installment plan receivables as of March 31, 2015 and December 31, 2014. Such amounts are presented on the Consolidated Balance Sheet as Accounts receivable – customers and agents and Other assets and deferred charges, as applicable. | |||||||
(Dollars in thousands) | 31-Mar-15 | 31-Dec-14 | |||||
Short-term portion of unbilled equipment installment plan receivables, gross | $ | 166,551 | $ | 127,400 | |||
Short-term portion of unbilled deferred interest | -17,739 | -16,365 | |||||
Short-term portion of unbilled allowance for credit losses | -5,631 | -3,686 | |||||
Short-term portion of unbilled equipment installment plan receivables, net | $ | 143,181 | $ | 107,349 | |||
Long-term portion of unbilled equipment installment plan receivables, gross | $ | 83,215 | $ | 89,435 | |||
Long-term portion of unbilled deferred interest | -1,585 | -2,791 | |||||
Long-term portion of unbilled allowance for credit losses | -5,805 | -6,065 | |||||
Long-term portion of unbilled equipment installment plan receivables, net | $ | 75,825 | $ | 80,579 | |||
U.S. Cellular assesses the collectability of the equipment installment plan receivables based on historical payment experience, account aging and other qualitative factors. The credit profiles of U.S. Cellular's customers on equipment installment plans are similar to those of U.S. Cellular customers with traditional subsidized plans. Customers with a higher risk credit profile are required to make a deposit for equipment purchased through an installment contract. | |||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure Text Block | |
Income Taxes | 4. Income Taxes |
U.S. Cellular is included in a consolidated federal income tax return and in certain state income tax returns with other members of the TDS consolidated group. For financial statement purposes, U.S. Cellular and its subsidiaries compute their income tax expense as if they comprised a separate affiliated group and were not included in the TDS consolidated group. | |
U.S. Cellular's overall effective tax rate on Income before income taxes for the three months ended March 31, 2015 and 2014 was 39.5% and 40.6%, respectively. | |
U.S. Cellular incurred a federal net operating loss in 2014 largely attributable to 50% bonus depreciation applicable to qualified 2014 capital expenditures. U.S. Cellular carried back this federal net operating loss to prior tax years. As a result of the carryback, together with recovery of federal estimated taxes paid in 2014, U.S. Cellular received a $65.8 million federal income tax refund in the three months ended March 31, 2015. Income taxes receivable are included as part of Other current assets in U.S. Cellular's Consolidated Balance Sheet. | |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Disclosure Text Block | |||||||
Earnings per Share | 5. Earnings Per Share | ||||||
Basic earnings per share attributable to U.S. Cellular shareholders is computed by dividing Net income attributable to U.S. Cellular shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to U.S. Cellular shareholders is computed by dividing Net income attributable to U.S. Cellular shareholders by the weighted average number of common shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon exercise of outstanding stock options and the vesting of restricted stock units. | |||||||
The amounts used in computing earnings per common share and the effects of potentially dilutive securities on the weighted average number of common shares were as follows: | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
(Dollars and shares in thousands, except per share amounts) | |||||||
Net income attributable to U.S. Cellular shareholders | $ | 160,064 | $ | 19,482 | |||
Weighted average number of shares used in basic earnings per share | 84,042 | 84,213 | |||||
Effects of dilutive securities: | |||||||
Stock options | 157 | 203 | |||||
Restricted stock units | 639 | 649 | |||||
Weighted average number of shares used in diluted earnings per share | 84,838 | 85,065 | |||||
Basic earnings per share attributable to U.S. Cellular shareholders | $ | 1.9 | $ | 0.23 | |||
Diluted earnings per share attributable to U.S. Cellular shareholders | $ | 1.89 | $ | 0.23 | |||
Certain Common Shares issuable upon the exercise of stock options or vesting of restricted stock units were not included in average diluted shares outstanding for the calculation of Diluted earnings per share attributable to U.S. Cellular shareholders because their effects were antidilutive. The number of such Common Shares excluded, if any, is shown in the table below. | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
(Shares in thousands) | |||||||
Stock options | 2,360 | 1,276 | |||||
Acquisitions_Divestitures_and_
Acquisitions, Divestitures and Exchanges | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure Text Block | |
Acquisitions, Divestitures and Exchanges | 6. Acquisitions, Divestitures and Exchanges |
Divestiture Transaction | |
On May 16, 2013, pursuant to a Purchase and Sale Agreement, U.S. Cellular sold customers and certain PCS license spectrum to subsidiaries of Sprint Corp. fka Sprint Nextel Corporation (“Sprint”) in U.S. Cellular's Chicago, central Illinois, St. Louis and certain Indiana/Michigan/Ohio markets (“Divestiture Markets”) in consideration for $480 million in cash. The Purchase and Sale Agreement also contemplated certain other agreements, together with the Purchase and Sale Agreement collectively referred to as the “Divestiture Transaction.” | |
These agreements require Sprint to reimburse U.S. Cellular up to $200 million (the “Sprint Cost Reimbursement”) for certain network decommissioning costs, network site lease rent and termination costs, network access termination costs, and employee termination benefits for specified engineering employees. As of March 31, 2015, U.S. Cellular had received a total of $97.4 million pursuant to the Sprint Cost Reimbursement. For the three months ended March 31, 2015 and 2014, $15.7 million and $11.3 million, respectively, of the Sprint Cost Reimbursement had been received and recorded in Cash received from divestitures and exchanges in the Consolidated Statement of Cash Flows. | |
For the three months ended March 31, 2015 and 2014, as a result of the Divestiture Transaction, U.S. Cellular recognized gains of $4.4 million and $7.1 million, respectively, in (Gain) loss on sale of business and other exit costs, net. | |
Other Acquisitions, Divestitures and Exchanges | |
In March 2015, U.S. Cellular exchanged certain of its unbuilt PCS licenses for certain other PCS licenses located in U.S. Cellular's existing operating markets and $117.0 million of cash. The licenses received in the transaction have an estimated fair value, per a market approach, of $43.5 million. A gain of $125.2 million was recorded in (Gain) loss on license sales and exchanges, net in the Consolidated Statement of Operations in the first quarter of 2015. | |
An FCC auction of AWS-3 spectrum licenses, referred to as Auction 97, ended in January 2015. U.S. Cellular participated in Auction 97 indirectly through its limited partnership interest in Advantage Spectrum L.P. (“Advantage Spectrum”). Advantage Spectrum was the provisional winning bidder of 124 licenses for an aggregate winning bid of $338.3 million, after its designated entity discount of 25%. Advantage Spectrum's bid amount, less the initial deposit amount of $60.0 million paid in 2014, was paid to the FCC in March 2015. These licenses are expected to be granted by the FCC during 2015. See Note 9 — Variable Interest Entities (VIEs) for additional information. | |
In December 2014, U.S. Cellular entered into an agreement with a third party to sell 595 towers and certain related contracts, assets, and liabilities for $159.0 million. This transaction was accomplished in two closings. The first closing occurred in December 2014 and included the sale of 236 towers, without tenants, for $10.0 million. On this same date, U.S. Cellular received $7.5 million in earnest money. At the time of the first closing, a $3.8 million gain was recorded. The second closing for the remaining 359 towers, primarily with tenants, took place in January 2015, at which time U.S. Cellular received $141.5 million in additional cash proceeds and recorded a gain of $107.7 million in (Gain) loss on sale of business and other exit costs, net. | |
In September 2014, U.S. Cellular entered into an agreement with a third party to exchange certain PCS and AWS licenses for certain other PCS and AWS licenses and $28.0 million of cash. This license exchange will be accomplished in two closings. The first closing occurred in December 2014 at which time U.S. Cellular received licenses with an estimated fair value, per a market approach, of $51.5 million, recorded a $21.7 million gain and recorded an $18.3 million deferred credit in Other current liabilities. The second closing is expected to occur in the second half of 2015. A license with a $22.2 million book value will be transferred and has been classified as “Assets held for sale” in the Consolidated Balance Sheet as of March 31, 2015. At the time of the second closing, U.S. Cellular will recognize the deferred credit from the first closing and expects to record a gain on this part of the license exchange. | |
Intangible_Assets
Intangible Assets | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Disclosure Text Block | |||||
Intangible Assets | 7. Intangible Assets | ||||
Changes in U.S. Cellular's Licenses for the three months ended March 31, 2015 are presented below. There was no change to Goodwill during the three months ended March 31, 2015. | |||||
Licenses | |||||
(Dollars in thousands) | |||||
Balance December 31, 2014 | $ | 1,443,438 | |||
Acquisitions (1) | 339,657 | ||||
Exchanges (2) | 43,485 | ||||
Other | 522 | ||||
Balance March 31, 2015 | $ | 1,827,102 | |||
-1 | Amount includes payments totaling $338.3 million made by Advantage Spectrum to the FCC for licenses in which it was the provisional winning bidder in Auction 97. See Note 6 — Acquisitions, Divestitures and Exchanges, and Note 9 — Variable Interest Entities (VIEs) for further information. | ||||
-2 | Amount represents licenses received in the PCS license exchange. See Note 6 — Acquisitions, Divestitures and Exchanges for further information. Licenses disposed of in the exchange were previously removed from the License balance and reflected in Assets held for sale in the Consolidated Balance Sheet as of December 31, 2014. |
Investments_in_Unconsolidated_
Investments in Unconsolidated Entities | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Disclosure Text Block | |||||||||||||
Investments in Unconsolidated Entities | 8. Investments in Unconsolidated Entities | ||||||||||||
Investments in unconsolidated entities consist of amounts invested in wireless entities in which U.S. Cellular holds a noncontrolling interest. These investments are accounted for using either the equity or cost method. | |||||||||||||
Equity in earnings of unconsolidated entities totaled $34.5 million and $37.1 million in the three months ended March 31, 2015 and 2014, respectively; of those amounts, U.S. Cellular's investment in the Los Angeles SMSA Limited Partnership (“LA Partnership”) contributed $19.9 million and $21.2 million in the three months ended March 31, 2015 and 2014, respectively. U.S. Cellular held a 5.5% ownership interest in the LA Partnership during these periods. | |||||||||||||
The following table, which is based on information provided in part by third parties, summarizes the combined results of operations of U.S. Cellular’s equity method investments. | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
(Dollars in thousands) | |||||||||||||
Revenues | $ | 1,729,820 | $ | 1,620,402 | |||||||||
Operating expenses | 1,286,721 | 1,137,209 | |||||||||||
Operating income | 443,099 | 483,193 | |||||||||||
Other income, net | 4,829 | 1,764 | |||||||||||
Net income | $ | 447,928 | $ | 484,957 |
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure Text Block | ||||||||
Variable Interest Entities | 9. Variable Interest Entities (VIEs) | |||||||
U.S. Cellular consolidates variable interest entities in which it has a controlling financial interest and is the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance and (b) the obligation to absorb VIE losses and the right to receive benefits that are significant to the VIE. U.S. Cellular reviews these criteria initially at the time it enters into agreements and subsequently when reconsideration events occur. | ||||||||
Consolidated VIEs | ||||||||
As of March 31, 2015, U.S. Cellular holds a variable interest in and consolidates the following VIEs under GAAP: | ||||||||
Advantage Spectrum and Frequency Advantage L.P., the general partner of Advantage Spectrum; | ||||||||
Aquinas Wireless L.P. (“Aquinas Wireless”); and | ||||||||
King Street Wireless L.P. (“King Street Wireless”) and King Street Wireless, Inc., the general partner of King Street Wireless. | ||||||||
The power to direct the activities that most significantly impact the economic performance of Advantage Spectrum, Aquinas Wireless and King Street Wireless (collectively, the “limited partnerships”) is shared. Specifically, the general partner of these VIEs has the exclusive right to manage, operate and control the limited partnerships and make all decisions to carry on the business of the partnerships; however, the general partner of each partnership needs the consent of the limited partner, a U.S. Cellular subsidiary, to sell or lease certain licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of the VIEs is shared, U.S. Cellular has a disproportionate level of exposure to the variability associated with the economic performance of the VIEs, indicating that U.S. Cellular is the primary beneficiary of the VIEs in accordance with GAAP. Accordingly, these VIEs are consolidated. | ||||||||
The following table presents the classification of the consolidated VIEs' assets and liabilities in U.S. Cellular's Consolidated Balance Sheet. | ||||||||
31-Mar-15 | 31-Dec-14 | |||||||
(Dollars in thousands) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 11,670 | $ | 2,588 | ||||
Other current assets | 234 | 278 | ||||||
Licenses | 651,281 | 312,977 | ||||||
Property, plant and equipment, net | 10,129 | 10,671 | ||||||
Other assets and deferred charges | 247 | 60,059 | ||||||
Total assets | $ | 673,561 | $ | 386,573 | ||||
Liabilities | ||||||||
Current liabilities | $ | 3,634 | $ | 110 | ||||
Deferred liabilities and credits | 599 | 622 | ||||||
Total liabilities | $ | 4,233 | $ | 732 | ||||
Other Related Matters | ||||||||
In March 2015, King Street Wireless made a $60.0 million distribution to its investors. Of this distribution, $6.0 million was provided to King Street Wireless, Inc. and $54.0 million was provided to U.S. Cellular. This distribution has no impact on U.S. Cellular's consolidated cash flows as both King Street Wireless and King Street Wireless, Inc. are consolidated VIEs. | ||||||||
An FCC auction of AWS-3 spectrum licenses, referred to as Auction 97, ended in January 2015. U.S. Cellular participated in Auction 97 indirectly through its interest in Advantage Spectrum. A subsidiary of U.S. Cellular is a limited partner in Advantage Spectrum. Advantage Spectrum qualified as a “designated entity,” and thereby was eligible for bid credits with respect to spectrum purchased in Auction 97. Advantage Spectrum was the winning bidder for 124 licenses for an aggregate bid of $338.3 million, after its designated entity discount of 25%. This amount is classified as Licenses in U.S. Cellular's Consolidated Balance Sheet. Advantage Spectrum's bid amount, less the initial deposit of $60.0 million paid in 2014, plus certain other charges totaling $2.3 million, was paid to the FCC in March 2015. To help fund this payment, U.S. Cellular made loans and capital contributions to Advantage Spectrum and Frequency Advantage totaling $280.6 million for the three months ended March 31, 2015. There were no capital contributions, loans or advances made to U.S. Cellular's VIEs during the three months ended March 31, 2014. | ||||||||
Advantage Spectrum, Aquinas Wireless and King Street Wireless were formed to participate in FCC auctions of wireless spectrum and to fund, establish, and provide wireless service with respect to any FCC licenses won in the auctions. As such, these entities have risks similar to those described in the “Risk Factors” in U.S. Cellular's Form 10-K for the year ended December 31, 2014. | ||||||||
U.S. Cellular may agree to make additional capital contributions and/or advances to Advantage Spectrum, Aquinas Wireless or King Street Wireless and/or to their general partners to provide additional funding for the development of licenses granted in various auctions. U.S. Cellular may finance such amounts with a combination of cash on hand, borrowings under its revolving credit agreement and/or long-term debt. There is no assurance that U.S. Cellular will be able to obtain additional financing on commercially reasonable terms or at all to provide such financial support. | ||||||||
Common_Share_Repurchases
Common Share Repurchases | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Disclosure Text Block | |||||||
Common Share Repurchases | 10. Common Share Repurchases | ||||||
On November 17, 2009, the Board of Directors of U.S. Cellular authorized the repurchase of up to 1,300,000 Common Shares on an annual basis beginning in 2009 and continuing each year thereafter, on a cumulative basis. These purchases will be made pursuant to open market purchases, block purchases, private purchases or otherwise, depending on market conditions. This authorization does not have an expiration date. | |||||||
Share repurchases made under this authorization were as follows: | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
(Dollar amounts and shares in thousands, except per share data) | |||||||
Number of shares | 66 | 59 | |||||
Average cost per share | $ | 34.77 | $ | 39.13 | |||
Amount | $ | 2,302 | $ | 2,300 |
Fair_Value_Measurements_Table
Fair Value Measurements (Table) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Fair Value Disclosures | |||||||||||||||
Fair value measurements | Level within the Fair Value Hierarchy | 31-Mar-15 | 31-Dec-14 | ||||||||||||
Book Value | Fair Value | Book Value | Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Cash and cash equivalents | 1 | $ | 336,893 | $ | 336,893 | $ | 211,513 | $ | 211,513 | ||||||
Long-term debt | |||||||||||||||
Retail | 2 | 617,000 | 625,855 | 617,000 | 608,462 | ||||||||||
Institutional | 2 | 532,793 | 526,199 | 532,722 | 513,647 |
Equipment_Installment_Plans_Ta
Equipment Installment Plans (Table) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Equipment Installment Plans | |||||||
Equipment installment plans | The following table summarizes unbilled equipment installment plan receivables as of March 31, 2015 and December 31, 2014. Such amounts are presented on the Consolidated Balance Sheet as Accounts receivable – customers and agents and Other assets and deferred charges, as applicable. | ||||||
(Dollars in thousands) | 31-Mar-15 | 31-Dec-14 | |||||
Short-term portion of unbilled equipment installment plan receivables, gross | $ | 166,551 | $ | 127,400 | |||
Short-term portion of unbilled deferred interest | -17,739 | -16,365 | |||||
Short-term portion of unbilled allowance for credit losses | -5,631 | -3,686 | |||||
Short-term portion of unbilled equipment installment plan receivables, net | $ | 143,181 | $ | 107,349 | |||
Long-term portion of unbilled equipment installment plan receivables, gross | $ | 83,215 | $ | 89,435 | |||
Long-term portion of unbilled deferred interest | -1,585 | -2,791 | |||||
Long-term portion of unbilled allowance for credit losses | -5,805 | -6,065 | |||||
Long-term portion of unbilled equipment installment plan receivables, net | $ | 75,825 | $ | 80,579 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings Per Share | |||||||
Earnings per share | Three Months Ended | ||||||
March 31, | |||||||
2015 | 2014 | ||||||
(Dollars and shares in thousands, except per share amounts) | |||||||
Net income attributable to U.S. Cellular shareholders | $ | 160,064 | $ | 19,482 | |||
Weighted average number of shares used in basic earnings per share | 84,042 | 84,213 | |||||
Effects of dilutive securities: | |||||||
Stock options | 157 | 203 | |||||
Restricted stock units | 639 | 649 | |||||
Weighted average number of shares used in diluted earnings per share | 84,838 | 85,065 | |||||
Basic earnings per share attributable to U.S. Cellular shareholders | $ | 1.9 | $ | 0.23 | |||
Diluted earnings per share attributable to U.S. Cellular shareholders | $ | 1.89 | $ | 0.23 | |||
Summary of antidilutive shares | Three Months Ended | ||||||
March 31, | |||||||
2015 | 2014 | ||||||
(Shares in thousands) | |||||||
Stock options | 2,360 | 1,276 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Licenses | |||||
Licenses | Licenses | ||||
(Dollars in thousands) | |||||
Balance December 31, 2014 | $ | 1,443,438 | |||
Acquisitions (1) | 339,657 | ||||
Exchanges (2) | 43,485 | ||||
Other | 522 | ||||
Balance March 31, 2015 | $ | 1,827,102 | |||
-1 | Amount includes payments totaling $338.3 million made by Advantage Spectrum to the FCC for licenses in which it was the provisional winning bidder in Auction 97. See Note 6 — Acquisitions, Divestitures and Exchanges, and Note 9 — Variable Interest Entities (VIEs) for further information. | ||||
-2 | Amount represents licenses received in the PCS license exchange. See Note 6 — Acquisitions, Divestitures and Exchanges for further information. Licenses disposed of in the exchange were previously removed from the License balance and reflected in Assets held for sale in the Consolidated Balance Sheet as of December 31, 2014. |
Investment_in_Unconsolidated_E
Investment in Unconsolidated Entities (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Equity Method Investment, Summarized Financial Information | |||||||||||||
Equity method investments, summarized results of operations | The following table, which is based on information provided in part by third parties, summarizes the combined results of operations of U.S. Cellular’s equity method investments. | ||||||||||||
Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
(Dollars in thousands) | |||||||||||||
Revenues | $ | 1,729,820 | $ | 1,620,402 | |||||||||
Operating expenses | 1,286,721 | 1,137,209 | |||||||||||
Operating income | 443,099 | 483,193 | |||||||||||
Other income, net | 4,829 | 1,764 | |||||||||||
Net income | $ | 447,928 | $ | 484,957 |
Variable_Interest_Entities_VIE
Variable Interest Entities VIEs (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Variable Interest Entities VIEs | ||||||||
Consolidated VIE assets and liabilities | 31-Mar-15 | 31-Dec-14 | ||||||
(Dollars in thousands) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 11,670 | $ | 2,588 | ||||
Other current assets | 234 | 278 | ||||||
Licenses | 651,281 | 312,977 | ||||||
Property, plant and equipment, net | 10,129 | 10,671 | ||||||
Other assets and deferred charges | 247 | 60,059 | ||||||
Total assets | $ | 673,561 | $ | 386,573 | ||||
Liabilities | ||||||||
Current liabilities | $ | 3,634 | $ | 110 | ||||
Deferred liabilities and credits | 599 | 622 | ||||||
Total liabilities | $ | 4,233 | $ | 732 |
Common_Share_Repurchases_Table
Common Share Repurchases (Table) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Common Share Repurchases | |||||||
Share repurchases | Share repurchases made under this authorization were as follows: | ||||||
Three Months Ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
(Dollar amounts and shares in thousands, except per share data) | |||||||
Number of shares | 66 | 59 | |||||
Average cost per share | $ | 34.77 | $ | 39.13 | |||
Amount | $ | 2,302 | $ | 2,300 |
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Basis of Presentation | ||
Amounts recorded gross in revenues that are billed to customers and remitted to governmental authorities | $21.20 | $26.40 |
Debt issuance costs, net | $29.70 | |
TDS | ||
Basis of Presentation | ||
TDS ownership of U.S. Cellular | 84.00% |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Cash and cash equivalents | 336,893 | 211,513 | $398,541 | $342,065 |
Fair Value | Level 1 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Cash and cash equivalents | 336,893 | 211,513 | ||
Fair Value | Level 2 | Retail | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Long-term debt | 625,855 | 608,462 | ||
Fair Value | Level 2 | Institutional | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Long-term debt | 526,199 | 513,647 | ||
Book Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Cash and cash equivalents | 336,893 | 211,513 | ||
Book Value | Retail | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Long-term debt | 617,000 | 617,000 | ||
Book Value | Institutional | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Long-term debt | 532,793 | 532,722 | ||
Institutional | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Fair value assumption, interest rate | 7.02% | 7.25% |
Equipment_Installment_Plans_De
Equipment Installment Plans (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Equipment installment plan receivables | ||
Equipment installment plan payment period | 24 months | |
Guarantee liability | $67,800,000 | $57,500,000 |
Short-term | ||
Equipment installment plan receivables | ||
Unbilled equipment installment plan receivables, gross | 166,551,000 | 127,400,000 |
Unbilled deferred interest | -17,739,000 | -16,365,000 |
Unbilled allowance for credit losses | -5,631,000 | -3,686,000 |
Unbilled equipment installment plan receivables, net | 143,181,000 | 107,349,000 |
Long-term | ||
Equipment installment plan receivables | ||
Unbilled equipment installment plan receivables, gross | 83,215,000 | 89,435,000 |
Unbilled deferred interest | -1,585,000 | -2,791,000 |
Unbilled allowance for credit losses | -5,805,000 | -6,065,000 |
Unbilled equipment installment plan receivables, net | $75,825,000 | $80,579,000 |
Income_Taxes_Balances_Details
Income Taxes, Balances (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Tax Disclosure | ||
Effective income tax rate | 39.50% | 40.60% |
Federal | ||
Income Tax Disclosure | ||
Income tax refund received | 65.8 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings per share | ||
Net income attributable to U.S. Cellular shareholders | $160,064 | $19,482 |
Weighted average number of shares used in basic earnings per share | ||
Weighted average number of shares used in basic earnings per share | 84,042 | 84,213 |
Effects of dilutive securities: | ||
Stock options | 157 | 203 |
Restricted stock units | 639 | 649 |
Weighted average number of shares used in diluted earnings per share | 84,838 | 85,065 |
Earnings per share, Other disclosures | ||
Basic earnings per share attributable to U.S. Cellular shareholders | $1.90 | $0.23 |
Diluted earnings per share attributable to U.S. Cellular shareholders | $1.89 | $0.23 |
Stock Options | ||
Earnings per share, Other disclosures | ||
Antidilutive securities | 2,360 | 1,276 |
Acquisitions_Divestitures_and_1
Acquisitions, Divestitures and Exchanges, acquisitions (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Acquisitions, divestitures and exchanges | ||
Total winning bid | 338.3 | |
Auction 97 | ||
Acquisitions, divestitures and exchanges | ||
Description of acquired entity | An FCC auction of AWS-3 spectrum licenses, referred to as Auction 97, ended in January 2015. U.S. Cellular participated in Auction 97 indirectly through its limited partnership interest in Advantage Spectrum L.P. (“Advantage Spectrum”). Advantage Spectrum was the provisional winning bidder of 124 licenses for an aggregate winning bid of $338.3 million, after its designated entity discount of 25%. Advantage Spectrum’s bid amount, less the initial deposit amount of $60.0 million paid in 2014, was paid to the FCC in March 2015. These licenses are expected to be granted by the FCC during 2015. See Note 9 — Variable Interest Entities (VIEs) for additional information. | |
License Acquisitions | Auction 97 | ||
Acquisitions, divestitures and exchanges | ||
Federal Communications Commission deposit | 60 | |
Total winning bid | 338.3 | |
Designated entity auction discount | 25.00% | |
Licenses won | 124 |
Acquisitions_Divestitures_and_2
Acquisitions, Divestitures and Exchanges, divestitures (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 29 Months Ended | 36 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | 16-May-13 | Jan. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2015 | |
number | |||||||
Divestitures | |||||||
(Increase) decrease in Operating Income | ($250,313,000) | ($7,825,000) | |||||
(Gain) loss on license sales and exchanges, net | -122,873,000 | -91,446,000 | |||||
Number of towers | 595 | ||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 274,111,000 | 103,042,000 | |||||
(Gain) loss on sale of business and other exit costs, net | -111,477,000 | -6,900,000 | |||||
Divestiture transaction | |||||||
Divestitures | |||||||
Business divestiture description | On May 16, 2013, pursuant to a Purchase and Sale Agreement, U.S. Cellular sold customers and certain PCS license spectrum to subsidiaries of Sprint Corp. fka Sprint Nextel Corporation (“Sprint”) in U.S. Cellular’s Chicago, central Illinois, St. Louis and certain Indiana/Michigan/Ohio markets (“Divestiture Markets”) in consideration for $480 million in cash. The Purchase and Sale Agreement also contemplated certain other agreements, together with the Purchase and Sale Agreement collectively referred to as the “Divestiture Transaction.” These agreements require Sprint to reimburse U.S. Cellular up to $200 million (the “Sprint Cost Reimbursement”) for certain network decommissioning costs, network site lease rent and termination costs, network access termination costs, and employee termination benefits for specified engineering employees. | ||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 480,000,000 | ||||||
Contract termination costs | 37,100,000 | ||||||
(Gain) loss on sale of business and other exit costs, net | -4,400,000 | -7,100,000 | |||||
Tower sale | |||||||
Divestitures | |||||||
Business divestiture description | In December 2014, U.S. Cellular entered into an agreement with a third party to sell 595 towers and certain related contracts, assets, and liabilities for $159.0 million. This transaction was accomplished in two closings. The first closing occurred in December 2014 and included the sale of 236 towers, without tenants, for $10.0 million. On this same date, U.S. Cellular received $7.5 million in earnest money. At the time of the first closing, a $3.8 million gain was recorded. The second closing for the remaining 359 towers, primarily with tenants, took place in January 2015, at which time U.S. Cellular received $141.5 million in additional cash proceeds and recorded a gain of $107.7 million in (Gain) loss on sale of business and other exit costs, net. | ||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 159,000,000 | ||||||
Tower sale - first closing | |||||||
Divestitures | |||||||
Number of towers | 236 | ||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 10,000,000 | ||||||
(Gain) loss on sale of business and other exit costs, net | -3,800,000 | ||||||
Tower sale - second closing | |||||||
Divestitures | |||||||
Number of towers | 359 | ||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 141,500,000 | ||||||
(Gain) loss on sale of business and other exit costs, net | -107,700,000 | ||||||
Sprint Cost Reimbursement | Divestiture transaction | |||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 44,600,000 | ||||||
Sprint Cost Reimbursement | Divestiture transaction | Cash received from divestitures | |||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 15,700,000 | 11,300,000 | 97,400,000 | ||||
Sprint Cost Reimbursement | Maximum | Expected event | Divestiture transaction | |||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | 200,000,000 | ||||||
Earnest money received | Tower sale - first closing | |||||||
Divestiture Financial Impacts | |||||||
Cash received from divestitures and exchanges | $7,500,000 |
Acquisitions_Divestitures_and_3
Acquisitions, Divestitures and Exchanges, exchanges (Details) (USD $) | 3 Months Ended | 0 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2015 | |
Exchanges | |||||
(Gain) loss on license sales and exchanges, net | ($122,873,000) | ($91,446,000) | |||
Carrying value | 1,827,102,000 | 1,443,438,000 | 1,827,102,000 | ||
Cash received from divestitures and exchanges | 274,111,000 | 103,042,000 | |||
Other current liabilities | 130,780,000 | 149,853,000 | 130,780,000 | ||
Assets held for sale | 22,203,000 | 107,055,000 | 22,203,000 | ||
PCS and AWS license exchange | |||||
Exchanges | |||||
Asset exchange description | In September 2014, U.S. Cellular entered into an agreement with a third party to exchange certain PCS and AWS licenses for certain other PCS and AWS licenses and $28.0 million of cash. This license exchange will be accomplished in two closings. The first closing occurred in December 2014 at which time U.S. Cellular received licenses with an estimated fair value, per a market approach, of $51.5 million, recorded a $21.7 million gain and recorded an $18.3 million deferred credit in Other current liabilities. The second closing is expected to occur in the second half of 2015. A license with a $22.2 million book value will be transferred and has been classified as “Assets held for sale” in the Consolidated Balance Sheet as of March 31, 2015. At the time of the second closing, U.S. Cellular will recognize the deferred credit from the first closing and expects to record a gain on this part of the license exchange. | ||||
(Gain) loss on license sales and exchanges, net | -21,700,000 | ||||
Fair value | 51,500,000 | ||||
Other current liabilities | 18,300,000 | ||||
Assets held for sale | 22,200,000 | 22,200,000 | |||
PCS license exchange | |||||
Exchanges | |||||
Asset exchange description | In March 2015, U.S. Cellular exchanged certain of its unbuilt PCS licenses for certain other PCS licenses located in U.S. Cellular’s existing operating markets and $117.0 million of cash. The licenses received in the transaction have an estimated fair value, per a market approach, of $43.5 million. A gain of $125.2 million was recorded in (Gain) loss on license sales and exchanges, net in the Consolidated Statement of Operations in the first quarter of 2015. | ||||
(Gain) loss on license sales and exchanges, net | -125,200,000 | ||||
Fair value | 43,500,000 | 43,500,000 | |||
Cash received from divestitures and exchanges | 117,000,000 | ||||
Expected event | PCS and AWS license exchange | |||||
Exchanges | |||||
Cash received from divestitures and exchanges | $28,000,000 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | |
Licenses | ||
Balance, beginning of period | $1,443,438 | |
Acquisitions | 339,657 | [1] |
Exchanges | 43,485 | [2] |
Other | 522 | |
Balance, end of period | $1,827,102 | |
[1] | Amount includes payments totaling $338.3 million made by Advantage Spectrum to the FCC for licenses in which it was the provisional winning bidder in Auction 97. See Note 6 b Acquisitions, Divestitures and Exchanges, and Note 9 b Variable Interest Entities (VIEs) for further information. | |
[2] | Amount represents licenses received in the PCS license exchange. See Note 6 b Acquisitions, Divestitures and Exchanges for further information. Licenses disposed of in the exchange were previously removed from the License balance and reflected in Assets held for sale in the Consolidated Balance Sheet as of December 31, 2014. |
Investments_in_Unconsolidated_1
Investments in Unconsolidated Entities (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Schedule of Equity Method Investments | ||
Equity in earnings of unconsolidated entities | $34,471 | $37,075 |
Equity method investments, combined income statements | ||
Revenues | 1,729,820 | 1,620,402 |
Operating expenses | 1,286,721 | 1,137,209 |
Operating income | 443,099 | 483,193 |
Other income, net | 4,829 | 1,764 |
Net income | 447,928 | 484,957 |
Los Angeles SMSA Limited Partnership | ||
Schedule of Equity Method Investments | ||
Equity in earnings of unconsolidated entities | $19,900 | $21,200 |
Ownership interest in equity method investment | 5.50% |
Variable_Interest_Entities_VIE1
Variable Interest Entities VIEs (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Assets | ||||
Cash and cash equivalents | $336,893,000 | $211,513,000 | $398,541,000 | $342,065,000 |
Other current assets | 18,112,000 | 90,834,000 | ||
Licenses | 1,827,102,000 | 1,443,438,000 | ||
Property, plant and equipment, net | 2,645,117,000 | 2,728,217,000 | ||
Other assets and deferred charges | 211,453,000 | 276,218,000 | ||
Liabilities | ||||
Current liabilities | 861,834,000 | 856,894,000 | ||
Variable Interest Entities, Other Disclosures | ||||
Total winning bid | 338,300,000 | |||
Variable Interest Entities (VIE's) | ||||
Assets | ||||
Cash and cash equivalents | 11,670,000 | 2,588,000 | ||
Other current assets | 234,000 | 278,000 | ||
Licenses | 651,281,000 | 312,977,000 | ||
Property, plant and equipment, net | 10,129,000 | 10,671,000 | ||
Other assets and deferred charges | 247,000 | 60,059,000 | ||
Total assets | 673,561,000 | 386,573,000 | ||
Liabilities | ||||
Current liabilities | 3,634,000 | 110,000 | ||
Deferred liabilities and credits | 599,000 | 622,000 | ||
Total liabilities | 4,233,000 | 732,000 | ||
Variable Interest Entities, Other Disclosures | ||||
Capital contributions, loans or advances | 280,600,000 | |||
Advantage Spectrum L.P. | ||||
Variable Interest Entities, Other Disclosures | ||||
Federal Communications Commission deposit | 60,000,000 | |||
Total winning bid | 338,300,000 | |||
Other auction charges | 2,300,000 | |||
Designated entity auction discount | 25.00% | |||
Licenses won | 124 | |||
King Street Wireless L.P. | ||||
Variable Interest Entities, Other Disclosures | ||||
Cash distributions paid | 60,000,000 | |||
King Street Wireless, L.P. distribution paid to U.S. Cellular | 54,000,000 | |||
King Street Wireless, Inc. | ||||
Variable Interest Entities, Other Disclosures | ||||
King Street Wireless, L.P. distribution paid to King Street Wireless, Inc. | $6,000,000 |
Common_Share_Repurchases_Detai
Common Share Repurchases (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share repurchases | ||
Amount | $2,302 | $2,300 |
Treasury Shares | ||
Share repurchases | ||
Amount | 2,302 | 2,300 |
Common Shares | Treasury Shares | ||
Share repurchases | ||
Number of shares acquired | 66,000 | 59,000 |
Average cost per share | $34.77 | $39.13 |
Amount | $2,302 | $2,300 |
Common share repurchase authorization | On November 17, 2009, the Board of Directors of U.S. Cellular authorized the repurchase of up to 1,300,000 Common Shares on an annual basis beginning in 2009 and continuing each year thereafter, on a cumulative basis. These purchases will be made pursuant to open market purchases, block purchases, private purchases or otherwise, depending on market conditions. This authorization does not have an expiration date. | |
Repurchase authorization, additional number of shares | 1,300,000 | |
Repurchase expiration | does not have an expiration date |