Item 8.01. Other Events
United States Cellular Corporation (“U.S. Cellular”) is filing this Form 8-K to recast financial statements and other financial information previously included in its Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 24, 2017.
Effective January 1, 2017, U.S. Cellular elected to change the classification of interest income on equipment installment plan contracts from Interest and dividend income to Service revenues in the Consolidated Statement of Operations. U.S. Cellular believes this classification is preferable because financing of devices as part of enrolling customers for service is an activity that is central to U.S. Cellular’s operations, and it is consistent with the presentation by others in the industry. Comparative financial statements for all periods presented in the aforementioned Form 10-K have been adjusted to apply the new classification retrospectively. As a result of this change in classification, Service revenues for the years ended December 31, 2016, 2015 and 2014 increased by $51 million, $34 million and $9 million, respectively, from previously reported amounts, with corresponding decreases in Interest and dividend income. This change did not have an impact on Income before income taxes, Net income, or Earnings per share for the years ended December 31, 2016, 2015 and 2014, nor did it have a cumulative impact to Retained earnings as of any date presented.
Although U.S. Cellular is permitted to make these adjustments the next time it files its prior year financial statements, U.S. Cellular determined to voluntarily file this Form 8-K to reflect the adjustments to such prior year financial information at this time. Accordingly, U.S. Cellular is filing this Form 8-K to adjust its Consolidated Statement of Operations for the years ended December 31, 2016, 2015 and 2014 for these amounts. There are no changes to the Consolidated Statement of Cash Flows, Consolidated Balance Sheet, or Consolidated Statement of Changes in Equity.
Except as included in this filing, U.S. Cellular has not updated or enhanced any other disclosures presented in its 2016 Form 10-K. All other information is presented as of the original filing date and has not been updated in this Form 8-K. Without limitation of the foregoing, this Form 8-K does not purport to update the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the aforementioned Form 10-K with respect to any uncertainties, transactions, risks, events or trends occurring, or known to management. More current information is included in U.S. Cellular’s other filings with the Securities and Exchange Commission. This Form 8-K should be read in conjunction with the aforementioned Form 10-K and U.S. Cellular’s other filings. Other filings may contain important information regarding uncertainties, trends, risks, events, transactions, developments and updates to certain expectations of U.S. Cellular that may have been reported since the filing of the Form 10-K.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits:
In accordance with the provisions of Item 601 of Regulation S-K, any Exhibits filed or furnished herewith are set forth on the Exhibit Index attached hereto.
