Document And Entity Information
Document And Entity Information | 3 Months Ended |
Mar. 31, 2022shares | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2022 |
Document Transition Report | false |
Entity File Number | 001-09712 |
Entity Registrant Name | UNITED STATES CELLULAR CORPORATION |
Entity Central Index Key | 0000821130 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 62-1147325 |
Entity Address, Address Line One | 8410 West Bryn Mawr |
Entity Address, City or Town | Chicago |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60631 |
City Area Code | (773) |
Local Phone Number | 399-8900 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Smaller Reporting Company | false |
Emerging Growth Company | false |
Entity Shell Company | false |
Common Shares | |
Title of 12(b) Security | Common Shares, $1 par value |
Trading Symbol | USM |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 52,552,000 |
6.25% Senior Notes | |
Title of 12(b) Security | 6.25% Senior Notes due 2069 |
Trading Symbol | UZD |
Security Exchange Name | NYSE |
5.5% Senior Notes | |
Title of 12(b) Security | 5.50% Senior Notes due 2070 |
Trading Symbol | UZE |
Security Exchange Name | NYSE |
5.5% Senior Notes | |
Title of 12(b) Security | 5.50% Senior Notes due 2070 |
Trading Symbol | UZF |
Security Exchange Name | NYSE |
Series A Common Shares | |
Entity Common Stock, Shares Outstanding | 33,005,900 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating revenues | ||
Total operating revenues | $ 1,010 | $ 1,023 |
Operating expenses | ||
Selling, general and administrative | 325 | 305 |
Depreciation, amortization and accretion | 171 | 170 |
(Gain) loss on asset disposals, net | 2 | 5 |
(Gain) loss on sale of business and other exit costs, net | (1) | (1) |
Total operating expenses | 939 | 939 |
Operating income | 71 | 84 |
Investment and other income (expense) | ||
Equity in earnings of unconsolidated entities | 45 | 42 |
Interest and dividend income | 1 | 2 |
Interest expense | (33) | (39) |
Total investment and other income | 13 | 5 |
Income before income taxes | 84 | 89 |
Income tax expense | 32 | 27 |
Net income | 52 | 62 |
Less: Net income attributable to noncontrolling interests, net of tax | 3 | 2 |
Net income attributable to UScellular shareholders | $ 49 | $ 60 |
Basic weighted average shares outstanding (in shares) | 86 | 86 |
Basic earnings per share attributable to UScellular shareholders (USD per share) | $ 0.57 | $ 0.70 |
Diluted weighted average shares outstanding (in shares) | 87 | 88 |
Diluted earnings per share attributable to UScellular shareholders (in shares) | $ 0.57 | $ 0.69 |
Service | ||
Operating revenues | ||
Total operating revenues | $ 787 | $ 771 |
Operating expenses | ||
Cost of equipment sold | 185 | 185 |
Equipment sales | ||
Operating revenues | ||
Total operating revenues | 223 | 252 |
Operating expenses | ||
Cost of equipment sold | $ 257 | $ 275 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 52 | $ 62 |
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | ||
Depreciation, amortization and accretion | 171 | 170 |
Bad debts expense | 25 | 7 |
Stock-based compensation expense | 7 | 6 |
Deferred income taxes, net | 22 | 23 |
Equity in earnings of unconsolidated entities | (45) | (42) |
Distributions from unconsolidated entities | 19 | 22 |
(Gain) loss on asset disposals, net | 2 | 5 |
(Gain) loss on sale of business and other exit costs, net | (1) | (1) |
Other operating activities | 1 | (1) |
Changes in assets and liabilities from operations | ||
Accounts receivable | 15 | 4 |
Equipment installment plans receivable | 0 | (18) |
Inventory | (4) | 7 |
Accounts payable | (62) | (86) |
Customer deposits and deferred revenues | 9 | 7 |
Accrued taxes | 130 | 3 |
Accrued interest | 10 | 9 |
Other assets and liabilities | (40) | (53) |
Net cash provided by operating activities | 311 | 124 |
Cash flows from investing activities | ||
Cash paid for additions to property, plant and equipment | (150) | (133) |
Cash paid for licenses | (561) | (1,256) |
Cash received from divestitures and exchanges | 1 | 1 |
Net cash used in investing activities | (710) | (1,388) |
Cash flows from financing activities | ||
Issuance of long-term debt | 625 | 492 |
Repayment of long-term debt | (126) | 0 |
Issuance of short-term debt | 60 | 0 |
Common Shares reissued for benefit plans, net of tax payments | 0 | (1) |
Repurchase of Common Shares | (10) | (2) |
Payment of debt issuance costs | (1) | (1) |
Distributions to noncontrolling interests | (1) | (1) |
Other financing activities | (3) | (2) |
Net cash provided by financing activities | 544 | 485 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 145 | (779) |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 199 | 1,291 |
End of period | $ 344 | $ 512 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Current assets | |||
Cash and cash equivalents | $ 300 | $ 156 | |
Accounts receivable | |||
Customers and agents, less allowances of $59 and $57, respectively | 964 | 976 | |
Roaming | 5 | 7 | |
Affiliated | 1 | 0 | |
Other, less allowances of $1 and $2, respectively | 50 | 63 | |
Inventory, net | 177 | 173 | |
Prepaid expenses | 63 | 58 | |
Income taxes receivable | 0 | 123 | |
Other current assets | 51 | 49 | |
Total current assets | 1,611 | 1,605 | |
Assets held for sale | 15 | 18 | |
Licenses | 4,677 | 4,088 | |
Investments in unconsolidated entities | 465 | 439 | |
Property, plant and equipment | |||
In service and under construction | 9,136 | 9,056 | |
Less: Accumulated depreciation and amortization | 6,560 | 6,450 | |
Property, plant and equipment, net | 2,576 | 2,606 | |
Operating lease right-of-use assets | 952 | 959 | |
Other assets and deferred charges | 579 | 626 | |
Total assets | [1] | 10,875 | 10,341 |
Current liabilities | |||
Current portion of long-term debt | 6 | 3 | |
Accounts payable | |||
Affiliated | 9 | 14 | |
Trade | 272 | 346 | |
Customer deposits and deferred revenues | 200 | 191 | |
Accrued taxes | 34 | 33 | |
Accrued compensation | 42 | 83 | |
Short-term operating lease liabilities | 131 | 129 | |
Other current liabilities | 179 | 104 | |
Total current liabilities | 873 | 903 | |
Deferred liabilities and credits | |||
Deferred income tax liability, net | 696 | 674 | |
Long-term operating lease liabilities | 882 | 889 | |
Other deferred liabilities and credits | 583 | 573 | |
Long-term debt, net | 3,220 | 2,728 | |
Commitments and contingencies | |||
Noncontrolling interests with redemption features | 12 | 11 | |
UScellular shareholders’ equity | |||
Series A Common and Common Shares Authorized 190 shares (50 Series A Common and 140 Common Shares) Issued 88 shares (33 Series A Common and 55 Common Shares) Outstanding 86 shares (33 Series A Common and 53 Common Shares) Par Value ($1.00 per share) ($33 Series A Common and $55 Common Shares) | 88 | 88 | |
Additional paid-in capital | 1,685 | 1,678 | |
Treasury shares, at cost, 3 and 2 Common Shares, respectively | (77) | (68) | |
Retained earnings | 2,897 | 2,849 | |
Total UScellular shareholders' equity | 4,593 | 4,547 | |
Noncontrolling interests | 16 | 16 | |
Total equity | 4,609 | 4,563 | |
Total liabilities and equity | [1] | $ 10,875 | $ 10,341 |
[1] | The consolidated total assets as of March 31, 2022 and December 31, 2021, include assets held by consolidated variable interest entities (VIEs) of $1,433 million and $1,482 million, respectively, which are not available to be used to settle the obligations of UScellular. The consolidated total liabilities as of March 31, 2022 and December 31, 2021, include certain liabilities of consolidated VIEs of $23 million for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 9 — Variable Interest Entities for additional information. |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Accounts receivable | |||
Customer and agent allowances | $ 59 | $ 57 | |
Other allowances | $ 1 | $ 2 | |
UScellular shareholders’ equity | |||
Authorized shares (in shares) | 190,000,000 | 190,000,000 | |
Issued shares (in shares) | 88,000,000 | 88,000,000 | |
Outstanding shares (in shares) | 86,000,000 | 86,000,000 | |
Par value | $ 88 | $ 88 | |
Variable Interest Entities VIEs | |||
Total assets | [1] | $ 10,875 | $ 10,341 |
Series A Common Shares | |||
UScellular shareholders’ equity | |||
Authorized shares (in shares) | 50,000,000 | 50,000,000 | |
Issued shares (in shares) | 33,000,000 | 33,000,000 | |
Outstanding shares (in shares) | 33,000,000 | 33,000,000 | |
Par value per share (USD per share) | $ 1 | $ 1 | |
Par value | $ 33 | $ 33 | |
Common Shares | |||
UScellular shareholders’ equity | |||
Authorized shares (in shares) | 140,000,000 | 140,000,000 | |
Issued shares (in shares) | 55,000,000 | 55,000,000 | |
Outstanding shares (in shares) | 53,000,000 | 53,000,000 | |
Par value per share (USD per share) | $ 1 | $ 1 | |
Par value | $ 55 | $ 55 | |
Variable Interest Entities VIEs | |||
Treasury Stock, Shares | 3,000,000 | 2,000,000 | |
Consolidated Variable Interest Entities | |||
Variable Interest Entities VIEs | |||
Total assets | $ 1,941 | $ 1,954 | |
Liabilities | 157 | 96 | |
Consolidated Variable Interest Entities | No recourse | |||
Variable Interest Entities VIEs | |||
Liabilities | 23 | 23 | |
Consolidated Variable Interest Entities | Assets held | |||
Variable Interest Entities VIEs | |||
Total assets | $ 1,433 | $ 1,482 | |
[1] | The consolidated total assets as of March 31, 2022 and December 31, 2021, include assets held by consolidated variable interest entities (VIEs) of $1,433 million and $1,482 million, respectively, which are not available to be used to settle the obligations of UScellular. The consolidated total liabilities as of March 31, 2022 and December 31, 2021, include certain liabilities of consolidated VIEs of $23 million for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 9 — Variable Interest Entities for additional information. |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Series A Common and Common shares | Additional paid-in capital | Treasury shares | Retained earnings | Total UScellular shareholders' equity | Noncontrolling interests |
Beginning balance at Dec. 31, 2020 | $ 4,426 | $ 88 | $ 1,651 | $ (67) | $ 2,739 | $ 4,411 | $ 15 |
Net income attributable to UScellular shareholders | 60 | 60 | 60 | ||||
Net income attributable to noncontrolling interests classified as equity | 1 | 0 | 1 | ||||
Repurchase of Common Shares | (2) | (2) | (2) | ||||
Incentive and compensation plans | 6 | 6 | 3 | (3) | 6 | ||
Distributions to noncontrolling interests | (1) | 0 | (1) | ||||
Ending balance at Mar. 31, 2021 | 4,490 | 88 | 1,657 | (66) | 2,796 | 4,475 | 15 |
Beginning balance at Dec. 31, 2021 | 4,563 | 88 | 1,678 | (68) | 2,849 | 4,547 | 16 |
Net income attributable to UScellular shareholders | 49 | 49 | 49 | ||||
Net income attributable to noncontrolling interests classified as equity | 1 | 0 | 1 | ||||
Repurchase of Common Shares | (10) | (10) | (10) | ||||
Incentive and compensation plans | 7 | 7 | 1 | (1) | 7 | ||
Distributions to noncontrolling interests | (1) | 0 | (1) | ||||
Ending balance at Mar. 31, 2022 | $ 4,609 | $ 88 | $ 1,685 | $ (77) | $ 2,897 | $ 4,593 | $ 16 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 Basis of Presentation United States Cellular Corporation (UScellular), a Delaware Corporation, is an 83%-owned subsidiary of Telephone and Data Systems, Inc. (TDS). The accounting policies of UScellular 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). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of UScellular, subsidiaries in which it has a controlling financial interest, general partnerships in which UScellular has a majority partnership interest and certain entities in which UScellular has a variable interest that requires consolidation under GAAP. Intercompany accounts and transactions have been eliminated. The unaudited consolidated financial statements included herein have been prepared by UScellular pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, UScellular believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in UScellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2021. The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of UScellular’s financial position as of March 31, 2022 and December 31, 2021 and its results of operations, cash flows and changes in equity for the three months ended March 31, 2022 and 2021. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2022 and 2021, equaled net income. These results are not necessarily indicative of the results to be expected for the full year. UScellular has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2021. Restricted Cash UScellular presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. Restricted cash primarily consists of balances required under the receivables securitization agreement. See Note 8 — Debt for additional information related to the receivables securitization agreement. The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows. March 31, 2022 December 31, 2021 (Dollars in millions) Cash and cash equivalents $ 300 $ 156 Restricted cash included in Other current assets 44 43 Cash, cash equivalents and restricted cash in the statement of cash flows $ 344 $ 199 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2 Revenue Recognition Disaggregation of Revenue In the following table, UScellular's revenues are disaggregated by type of service, which represents the relevant categorization of revenues for UScellular, and timing of recognition. Service revenues are recognized over time and Equipment sales are point in time. Three Months Ended 2022 2021 (Dollars in millions) Revenues from contracts with customers: Retail service 1 $ 702 $ 683 Inbound roaming 21 28 Other service 1 42 40 Service revenues from contracts with customers 765 751 Equipment sales 223 252 Total revenues from contracts with customers 988 1,003 Operating lease income 22 20 Total operating revenues $ 1,010 $ 1,023 1 2021 amounts have been adjusted to reclassify $2 million of Internet of Things (IoT) and Reseller revenues from Retail service to Other service. Contract Balances The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet. March 31, 2022 December 31, 2021 (Dollars in millions) Contract assets $ 6 $ 7 Contract liabilities $ 257 $ 243 Revenue recognized related to contract liabilities existing at January 1, 2022 was $109 million for the three months ended March 31, 2022. Transaction price allocated to the remaining performance obligations The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when wireless services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2022 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. Service Revenues (Dollars in millions) Remainder of 2022 $ 216 2023 131 Thereafter 92 Total $ 439 Contract Cost Assets UScellular expects that commission fees paid as a result of obtaining contracts are recoverable and therefore UScellular defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. The contract cost asset balance related to commission fees and other costs was $122 million at March 31, 2022, and $126 million at December 31, 2021, and was recorded in Other assets and deferred charges in the Consolidated Balance Sheet. Deferred commission fees are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Amortization of contract cost assets was $25 million for both the three months ended March 31, 2022 and 2021 and was included in Selling, general and administrative expenses. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3 Fair Value Measurements As of March 31, 2022 and December 31, 2021, UScellular did not have any material 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. UScellular 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 March 31, 2022 December 31, 2021 Book Value Fair Value Book Value Fair Value (Dollars in millions) Long-term debt Retail 2 $ 1,500 $ 1,399 $ 1,500 $ 1,594 Institutional 2 535 488 535 659 Other 2 1,243 1,243 746 746 Long-term debt excludes lease obligations, the current portion of Long-term debt and debt financing costs. The fair value of “Retail” Long-term debt was estimated using market prices for UScellular Senior Notes, which are traded on the New York Stock Exchange. UScellular’s “Institutional” debt consists of the 6.7% Senior Notes which are traded over the counter. UScellular’s “Other” debt consists of term loan credit agreements, receivables securitization agreement and in 2022, export credit financing agreement. UScellular estimated the fair value of its Institutional and Other debt through a discounted cash flow analysis using the interest rates or estimated yield to maturity for each borrowing, which ranged from 1.24% to 5.54% and 1.31% to 4.40% at March 31, 2022 and December 31, 2021, respectively. |
Equipment Installment Plans
Equipment Installment Plans | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Equipment Installment Plans | Note 4 Equipment Installment Plans UScellular sells devices to customers under equipment installment plans over a specified time period. For certain equipment installment plans, after a specified period of time or amount of payments, 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. The following table summarizes equipment installment plan receivables. March 31, 2022 December 31, 2021 (Dollars in millions) Equipment installment plan receivables, gross $ 1,069 $ 1,085 Allowance for credit losses (73) (72) Equipment installment plan receivables, net $ 996 $ 1,013 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 637 $ 639 Other assets and deferred charges (Non-current portion) 359 374 Equipment installment plan receivables, net $ 996 $ 1,013 UScellular uses various inputs, including internal data, information from credit bureaus and other sources, to evaluate the credit profiles of its customers. From this evaluation, a credit class is assigned to the customer that determines the number of eligible lines, the amount of credit available, and the down payment requirement, if any. These credit classes are grouped into four credit categories: lowest risk, lower risk, slight risk and higher risk. A customer's assigned credit class is reviewed periodically and a change is made, if appropriate. An equipment installment plan billed amount is considered past due if not paid within 30 days. The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows: March 31, 2022 December 31, 2021 Lowest Risk Lower Risk Slight Risk Higher Risk Total Lowest Risk Lower Risk Slight Risk Higher Risk Total (Dollars in millions) Unbilled $ 881 $ 93 $ 23 $ 5 $ 1,002 $ 896 $ 94 $ 24 $ 5 $ 1,019 Billed — current 40 5 2 — 47 40 5 1 1 47 Billed — past due 10 6 3 1 20 10 6 2 1 19 Total $ 931 $ 104 $ 28 $ 6 $ 1,069 $ 946 $ 105 $ 27 $ 7 $ 1,085 The balance of the equipment installment plan receivables as of March 31, 2022 on a gross basis by year of origination were as follows: 2019 2020 2021 2022 Total (Dollars in millions) Lowest Risk $ 15 $ 209 $ 544 $ 163 $ 931 Lower Risk 1 17 66 20 104 Slight Risk — 2 13 13 28 Higher Risk — 1 4 1 6 Total $ 16 $ 229 $ 627 $ 197 $ 1,069 Activity for the three months ended March 31, 2022 and 2021, in the allowance for credit losses for equipment installment plan receivables was as follows: March 31, 2022 March 31, 2021 (Dollars in millions) Allowance for credit losses, beginning of period $ 72 $ 78 Bad debts expense 17 3 Write-offs, net of recoveries (16) (9) Allowance for credit losses, end of period $ 73 $ 72 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 5 Earnings Per Share Basic earnings per share attributable to UScellular shareholders is computed by dividing Net income attributable to UScellular shareholders by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share attributable to UScellular shareholders is computed by dividing Net income attributable to UScellular 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 the exercise of outstanding stock options and the vesting of performance and restricted stock units. The amounts used in computing basic and diluted earnings per share attributable to UScellular shareholders were as follows: Three Months Ended 2022 2021 (Dollars and shares in millions, except per share amounts) Net income attributable to UScellular shareholders $ 49 $ 60 Weighted average number of shares used in basic earnings per share 86 86 Effects of dilutive securities 1 2 Weighted average number of shares used in diluted earnings per share 87 88 Basic earnings per share attributable to UScellular shareholders $ 0.57 $ 0.70 Diluted earnings per share attributable to UScellular shareholders $ 0.57 $ 0.69 Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in weighted average diluted shares outstanding for the calculation of Diluted earnings per share attributable to UScellular shareholders because their effects were antidilutive. The number of such Common Shares excluded was less than 1 million for both the three months ended March 31, 2022 and 2021. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 Intangible Assets Activity related to Licenses for the three months ended March 31, 2022, is presented below: Licenses (Dollars in millions) Balance at December 31, 2021 $ 4,088 Acquisitions 586 Transferred to Assets held for sale 1 Exchanges - Licenses received 1 Capitalized interest 1 Balance at March 31, 2022 $ 4,677 In February 2021, the FCC announced by way of public notice that UScellular was the provisional winning bidder for 254 wireless spectrum licenses in the 3.7-3.98 GHz bands (Auction 107) for $1,283 million. UScellular paid $30 million of this amount in 2020 and the remainder in March 2021. The wireless spectrum licenses from Auction 107 were granted by the FCC in July 2021. Additionally, UScellular expects to be obligated to pay approximately $187 million in total from 2021 through 2024 related to relocation costs and accelerated relocation incentive payments. Such additional costs were accrued and capitalized at the time the licenses were granted. In October 2021, UScellular paid $36 million related to the additional costs. The spectrum must be cleared by incumbent providers before UScellular can access it. UScellular does not expect to have access to this spectrum until late 2023. In January 2022, the FCC announced by way of public notice that UScellular was the provisional winning bidder for 380 wireless spectrum licenses in the 3.45-3.55 GHz band (Auction 110) for $580 million. UScellular paid $20 million of this amount in 2021 and the remainder in January and February 2022. The advance payment was included in Other assets and deferred charges in the December 31, 2021 Consolidated Balance Sheet. The wireless spectrum licenses from Auction 110 were granted by the FCC on May 4, 2022. |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in unconsolidated entities | Note 7 Investments in Unconsolidated Entities Investments in unconsolidated entities consist of amounts invested in entities in which UScellular holds a noncontrolling interest. UScellular’s Investments in unconsolidated entities are accounted for using the equity method, measurement alternative method or net asset value practical expedient method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes. March 31, 2022 December 31, 2021 (Dollars in millions) Equity method investments $ 451 $ 431 Measurement alternative method investments 4 8 Investments recorded using the net asset value practical expedient 10 — Total investments in unconsolidated entities $ 465 $ 439 The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of UScellular’s equity method investments. Three Months Ended 2022 2021 (Dollars in millions) Revenues $ 1,809 $ 1,727 Operating expenses 1,371 1,275 Operating income 438 452 Other income (expense), net (4) 12 Net income $ 434 $ 464 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 Debt Revolving Credit Agreement The following table summarizes the revolving credit agreement as of March 31, 2022: (Dollars in millions) Maximum borrowing capacity $ 300 Letters of credit outstanding $ — Amount borrowed $ — Amount available for use $ 300 Borrowings under the UScellular revolving credit agreement bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 1.60%. During the three months ended March 31, 2022, UScellular borrowed and repaid $75 million under its revolving credit agreement. UScellular believes that they were in compliance with all of the financial and other covenants and requirements set forth in their revolving credit agreement as of March 31, 2022. Term Loan Agreements The following table summarizes the term loan credit agreements as of March 31, 2022: (Dollars in millions) Maximum borrowing capacity $ 800 Amount borrowed and outstanding $ 699 Amount borrowed and repaid $ 1 Amount available for use $ 100 Borrowings under the UScellular term loan agreements bear interest at a rate of SOFR plus 1.60%, SOFR plus 2.10% or SOFR plus 2.60%. The amount available for use may be drawn in one or more advances by July 30, 2022; amounts not drawn by that time will cease to be available. The maturity dates of the UScellular term loan agreements are July 2026, July 2028 and July 2031. UScellular believes that it was in compliance with all of the financial and other covenants and requirements set forth in its term loan credit agreements as of March 31, 2022. Export Credit Financing Agreement In December 2021, UScellular entered into a $150 million term loan credit facility with Export Development Canada to finance (or refinance) equipment imported from Canada, including equipment purchased prior to entering the term loan credit facility agreement. Borrowings bear interest at a rate of SOFR plus 1.60% and are due and payable on the five-year anniversary of the first borrowing, which is in January 2027. During the three months ended March 31, 2022, UScellular borrowed $150 million, which is the full amount available under the agreement. UScellular believes it was in compliance with all of the financial and other covenants and requirements set forth in their export credit financing agreement as of March 31, 2022. Receivables Securitization Agreement UScellular, through its subsidiaries, has a receivables securitization agreement for securitized borrowings using its equipment installment receivables. In March 2022, UScellular amended the agreement to extend the maturity date to March 2024. There were no significant changes to other terms of the receivable securitization agreement. Amounts under the receivables securitization agreement may be borrowed, repaid and reborrowed from time to time until maturity, which may be extended from time to time as specified therein. The outstanding borrowings bear interest at a rate that approximates SOFR plus 0.90%. During the three months ended March 31, 2022, UScellular repaid $50 million under the agreement. As of March 31, 2022, the outstanding borrowings under the agreement were $400 million and the unused borrowing capacity under the agreement was $50 million, subject to sufficient collateral to satisfy the asset borrowing base provisions of the agreement. As of March 31, 2022, the USCC Master Note Trust held $529 million of assets available to be pledged as collateral for the receivables securitization agreement. UScellular believes it was in compliance with all of the financial and other covenants and requirements set forth in their receivables securitization agreement as of March 31, 2022. In April 2022, UScellular repaid $50 million under the receivables securitization agreement. Repurchase Agreement |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2022 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Note 9 Variable Interest Entities Consolidated VIEs UScellular consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. UScellular reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and UScellular’s Form 10-K for the year ended December 31, 2021. UScellular formed USCC EIP LLC (Seller/Sub-Servicer), USCC Receivables Funding LLC (Transferor) and the USCC Master Note Trust (Trust), collectively the special purpose entities (SPEs), to facilitate a securitized borrowing using its equipment installment plan receivables. Under a Receivables Sale Agreement, UScellular wholly-owned, majority-owned and unconsolidated entities, collectively referred to as “affiliated entities”, transfer device equipment installment plan contracts to the Seller/Sub-Servicer. The Seller/Sub-Servicer aggregates device equipment installment plan contracts, and performs servicing, collection and all other administrative activities related to accounting for the equipment installment plan contracts. The Seller/Sub-Servicer sells the eligible equipment installment plan receivables to the Transferor, a bankruptcy remote entity, which subsequently sells the receivables to the Trust. The Trust, which is bankruptcy remote and isolated from the creditors of UScellular, will be responsible for issuing asset-backed variable funding notes (Notes), which are collateralized by the equipment installment plan receivables owned by the Trust. Given that UScellular has the power to direct the activities of these SPEs, and that these SPEs lack sufficient equity to finance their activities, UScellular is deemed to have a controlling financial interest in the SPEs and, therefore, consolidates them. All transactions with third parties (e.g., issuance of the asset-backed variable funding notes) will be accounted for as a secured borrowing due to the pledging of equipment installment plan contracts as collateral, significant continuing involvement in the transferred assets, subordinated interests of the cash flows, and continued evidence of control of the receivables. The following VIEs were formed to participate in FCC auctions of wireless spectrum licenses and to fund, establish, and provide wireless service with respect to any FCC wireless spectrum licenses won in the auctions: ▪ Advantage Spectrum, L.P. (Advantage Spectrum) and Sunshine Spectrum, Inc., the general partner of Advantage Spectrum; and ▪ King Street Wireless, L.P. (King Street Wireless) and King Street Wireless, Inc., the general partner of King Street Wireless. These particular VIEs are collectively referred to as designated entities. The power to direct the activities that most significantly impact the economic performance of these VIEs 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. The general partner of each partnership needs the consent of the limited partner, an indirect UScellular subsidiary, to sell or lease certain wireless spectrum licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of these VIEs is shared, UScellular has the most significant level of exposure to the variability associated with the economic performance of the VIEs, indicating that UScellular is the primary beneficiary of the VIEs. Therefore, in accordance with GAAP, these VIEs are consolidated. UScellular also consolidates other VIEs that are limited partnerships that provide wireless service. A limited partnership is a variable interest entity unless the limited partners hold substantive participating rights or kick-out rights over the general partner. For certain limited partnerships, UScellular is the general partner and manages the operations. In these partnerships, the limited partners do not have substantive kick-out or participating rights and, further, such limited partners do not have the authority to remove the general partner. Therefore, these limited partnerships also are recognized as VIEs and are consolidated under the variable interest model. The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in UScellular’s Consolidated Balance Sheet. March 31, 2022 December 31, 2021 (Dollars in millions) Assets Cash and cash equivalents $ 23 $ 22 Accounts receivable 691 693 Inventory, net 2 2 Other current assets 44 44 Licenses 640 639 Property, plant and equipment, net 124 124 Operating lease right-of-use assets 47 47 Other assets and deferred charges 370 383 Total assets $ 1,941 $ 1,954 Liabilities Current liabilities $ 91 $ 30 Long-term operating lease liabilities 41 41 Other deferred liabilities and credits 25 25 Total liabilities 1 $ 157 $ 96 1 Total liabilities does not include amounts borrowed under the receivables securitization agreement. See Note 8 – Debt for additional information. Unconsolidated VIEs UScellular manages the operations of and holds a variable interest in certain other limited partnerships, but is not the primary beneficiary of these entities and, therefore, does not consolidate them under the variable interest model. UScellular’s total investment in these unconsolidated entities was $5 million and $4 million at March 31, 2022 and December 31, 2021, respectively, and is included in Investments in unconsolidated entities in UScellular’s Consolidated Balance Sheet. The maximum exposure from unconsolidated VIEs is limited to the investment held by UScellular in those entities. Other Related Matters UScellular made contributions, loans or advances to its VIEs totaling $21 million and $30 million, during the three months ended March 31, 2022 and 2021, respectively, of which $9 million in 2022 and $10 million in 2021, are related to USCC EIP LLC as discussed above. UScellular may agree to make additional capital contributions and/or advances to these or other VIEs and/or to their general partners to provide additional funding for operations or the development of wireless spectrum licenses granted in various auctions. UScellular may finance such amounts with a combination of cash on hand, borrowings under its revolving credit or receivables securitization agreements and/or other long-term debt. There is no assurance that UScellular will be able to obtain additional financing on commercially reasonable terms or at all to provide such financial support. The limited partnership agreement of Advantage Spectrum also provides the general partner with a put option whereby the general partner may require the limited partner, a subsidiary of UScellular, to purchase its interest in the limited partnership. The general partner’s put option related to its interest in Advantage Spectrum was not exercised during the first exercise period and will be exercisable again in the third quarter of 2022. The greater of the carrying value of the general partner's investment or the value of the put option, net of any borrowings due to UScellular, is recorded as Noncontrolling interests with redemption features in UScellular’s Consolidated Balance Sheet. Also in accordance with GAAP, minority share of income or changes in the redemption value of the put option, net of interest accrued on the loans, are recorded as a component of Net income attributable to noncontrolling interests, net of tax, in UScellular’s Consolidated Statement of Operations. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | The accounting policies of UScellular 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). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of UScellular, subsidiaries in which it has a controlling financial interest, general partnerships in which UScellular has a majority partnership interest and certain entities in which UScellular has a variable interest that requires consolidation under GAAP. Intercompany accounts and transactions have been eliminated. |
Basis of Accounting | The unaudited consolidated financial statements included herein have been prepared by UScellular pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, UScellular believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in UScellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2021. The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of UScellular’s financial position as of March 31, 2022 and December 31, 2021 and its results of operations, cash flows and changes in equity for the three months ended March 31, 2022 and 2021. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2022 and 2021, equaled net income. These results are not necessarily indicative of the results to be expected for the full year. UScellular has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2021. |
Revenue from Contract with Customer | As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. UScellular expects that commission fees paid as a result of obtaining contracts are recoverable and therefore UScellular defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred.Deferred commission fees are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. |
Variable Interest Entities | UScellular consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. UScellular reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and UScellular’s Form 10-K for the year ended December 31, 2021. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows. March 31, 2022 December 31, 2021 (Dollars in millions) Cash and cash equivalents $ 300 $ 156 Restricted cash included in Other current assets 44 43 Cash, cash equivalents and restricted cash in the statement of cash flows $ 344 $ 199 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | In the following table, UScellular's revenues are disaggregated by type of service, which represents the relevant categorization of revenues for UScellular, and timing of recognition. Service revenues are recognized over time and Equipment sales are point in time. Three Months Ended 2022 2021 (Dollars in millions) Revenues from contracts with customers: Retail service 1 $ 702 $ 683 Inbound roaming 21 28 Other service 1 42 40 Service revenues from contracts with customers 765 751 Equipment sales 223 252 Total revenues from contracts with customers 988 1,003 Operating lease income 22 20 Total operating revenues $ 1,010 $ 1,023 1 2021 amounts have been adjusted to reclassify $2 million of Internet of Things (IoT) and Reseller revenues from Retail service to Other service. |
Contract with Customer, Assets and Liabilities | The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet. March 31, 2022 December 31, 2021 (Dollars in millions) Contract assets $ 6 $ 7 Contract liabilities $ 257 $ 243 |
Remaining Performance Obligations | The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when wireless services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2022 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. Service Revenues (Dollars in millions) Remainder of 2022 $ 216 2023 131 Thereafter 92 Total $ 439 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | UScellular 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 March 31, 2022 December 31, 2021 Book Value Fair Value Book Value Fair Value (Dollars in millions) Long-term debt Retail 2 $ 1,500 $ 1,399 $ 1,500 $ 1,594 Institutional 2 535 488 535 659 Other 2 1,243 1,243 746 746 |
Equipment Installment Plans (Ta
Equipment Installment Plans (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Equipment installment plan receivables | The following table summarizes equipment installment plan receivables. March 31, 2022 December 31, 2021 (Dollars in millions) Equipment installment plan receivables, gross $ 1,069 $ 1,085 Allowance for credit losses (73) (72) Equipment installment plan receivables, net $ 996 $ 1,013 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 637 $ 639 Other assets and deferred charges (Non-current portion) 359 374 Equipment installment plan receivables, net $ 996 $ 1,013 |
Equipment installment plan receivables credit categories | The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows: March 31, 2022 December 31, 2021 Lowest Risk Lower Risk Slight Risk Higher Risk Total Lowest Risk Lower Risk Slight Risk Higher Risk Total (Dollars in millions) Unbilled $ 881 $ 93 $ 23 $ 5 $ 1,002 $ 896 $ 94 $ 24 $ 5 $ 1,019 Billed — current 40 5 2 — 47 40 5 1 1 47 Billed — past due 10 6 3 1 20 10 6 2 1 19 Total $ 931 $ 104 $ 28 $ 6 $ 1,069 $ 946 $ 105 $ 27 $ 7 $ 1,085 The balance of the equipment installment plan receivables as of March 31, 2022 on a gross basis by year of origination were as follows: 2019 2020 2021 2022 Total (Dollars in millions) Lowest Risk $ 15 $ 209 $ 544 $ 163 $ 931 Lower Risk 1 17 66 20 104 Slight Risk — 2 13 13 28 Higher Risk — 1 4 1 6 Total $ 16 $ 229 $ 627 $ 197 $ 1,069 |
Equipment installment plans allowance for credit losses | Activity for the three months ended March 31, 2022 and 2021, in the allowance for credit losses for equipment installment plan receivables was as follows: March 31, 2022 March 31, 2021 (Dollars in millions) Allowance for credit losses, beginning of period $ 72 $ 78 Bad debts expense 17 3 Write-offs, net of recoveries (16) (9) Allowance for credit losses, end of period $ 73 $ 72 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | The amounts used in computing basic and diluted earnings per share attributable to UScellular shareholders were as follows: Three Months Ended 2022 2021 (Dollars and shares in millions, except per share amounts) Net income attributable to UScellular shareholders $ 49 $ 60 Weighted average number of shares used in basic earnings per share 86 86 Effects of dilutive securities 1 2 Weighted average number of shares used in diluted earnings per share 87 88 Basic earnings per share attributable to UScellular shareholders $ 0.57 $ 0.70 Diluted earnings per share attributable to UScellular shareholders $ 0.57 $ 0.69 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Licenses | Activity related to Licenses for the three months ended March 31, 2022, is presented below: Licenses (Dollars in millions) Balance at December 31, 2021 $ 4,088 Acquisitions 586 Transferred to Assets held for sale 1 Exchanges - Licenses received 1 Capitalized interest 1 Balance at March 31, 2022 $ 4,677 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity and measurement alternative method investments | UScellular’s Investments in unconsolidated entities are accounted for using the equity method, measurement alternative method or net asset value practical expedient method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes. March 31, 2022 December 31, 2021 (Dollars in millions) Equity method investments $ 451 $ 431 Measurement alternative method investments 4 8 Investments recorded using the net asset value practical expedient 10 — Total investments in unconsolidated entities $ 465 $ 439 The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of UScellular’s equity method investments. Three Months Ended 2022 2021 (Dollars in millions) Revenues $ 1,809 $ 1,727 Operating expenses 1,371 1,275 Operating income 438 452 Other income (expense), net (4) 12 Net income $ 434 $ 464 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Revolving credit facilities | The following table summarizes the revolving credit agreement as of March 31, 2022: (Dollars in millions) Maximum borrowing capacity $ 300 Letters of credit outstanding $ — Amount borrowed $ — Amount available for use $ 300 The following table summarizes the term loan credit agreements as of March 31, 2022: (Dollars in millions) Maximum borrowing capacity $ 800 Amount borrowed and outstanding $ 699 Amount borrowed and repaid $ 1 Amount available for use $ 100 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Variable Interest Entities [Abstract] | |
Consolidated VIE assets and liabilities | The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in UScellular’s Consolidated Balance Sheet. March 31, 2022 December 31, 2021 (Dollars in millions) Assets Cash and cash equivalents $ 23 $ 22 Accounts receivable 691 693 Inventory, net 2 2 Other current assets 44 44 Licenses 640 639 Property, plant and equipment, net 124 124 Operating lease right-of-use assets 47 47 Other assets and deferred charges 370 383 Total assets $ 1,941 $ 1,954 Liabilities Current liabilities $ 91 $ 30 Long-term operating lease liabilities 41 41 Other deferred liabilities and credits 25 25 Total liabilities 1 $ 157 $ 96 1 Total liabilities does not include amounts borrowed under the receivables securitization agreement. See Note 8 – Debt for additional information. |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | Mar. 31, 2022 |
TDS | UScellular | |
Basis of Presentation [Line Items] | |
Ownership percentage | 83.00% |
Basis of Presentation - Cash, C
Basis of Presentation - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 300 | $ 156 | ||
Restricted cash included in Other current assets | 44 | 43 | ||
Cash, cash equivalents and restricted cash in the statement of cash flows | $ 344 | $ 199 | $ 512 | $ 1,291 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of revenue | ||
Revenue from contracts with customers | $ 988 | $ 1,003 |
Operating lease income | 22 | 20 |
Total operating revenues | 1,010 | 1,023 |
Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 765 | 751 |
Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 702 | 683 |
Transferred over time | Retail service | Prior period reclassification | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | (2) | |
Transferred over time | Inbound roaming | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 21 | 28 |
Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 42 | 40 |
Transferred at point in time | Other service | Prior period reclassification | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 2 | |
Transferred at point in time | Equipment sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | $ 223 | $ 252 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 6 | $ 7 |
Contract liabilities | 257 | $ 243 |
Revenue recognized | $ 109 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Mar. 31, 2022USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation amount | $ 439 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation amount | $ 216 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligation, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation amount | $ 131 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation amount | $ 92 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligation, period |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Capitalized Contract Cost | |||
Contract cost asset | $ 122 | $ 126 | |
Amortization of contract cost assets | $ 25 | $ 25 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
6.7% Senior Notes | ||
Financial Instruments | ||
Interest rate | 6.70% | |
Book Value | Retail | ||
Financial Instruments | ||
Long-term debt | $ 1,500 | $ 1,500 |
Book Value | Institutional | ||
Financial Instruments | ||
Long-term debt | 535 | 535 |
Book Value | Other | ||
Financial Instruments | ||
Long-term debt | 1,243 | 746 |
Fair Value | Level 2 | Retail | ||
Financial Instruments | ||
Long-term debt | 1,399 | 1,594 |
Fair Value | Level 2 | Institutional | ||
Financial Instruments | ||
Long-term debt | 488 | 659 |
Fair Value | Level 2 | Other | ||
Financial Instruments | ||
Long-term debt | $ 1,243 | $ 746 |
Interest rate | Institutional and Other | Minimum | ||
Financial Instruments | ||
Fair value assumption, interest rate | 1.24% | 1.31% |
Interest rate | Institutional and Other | Maximum | ||
Financial Instruments | ||
Fair value assumption, interest rate | 5.54% | 4.40% |
Equipment Installment Plans - E
Equipment Installment Plans - EIP Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, gross | $ 1,069 | $ 1,085 |
Allowance for credit losses | (73) | (72) |
Equipment installment plan receivables, net | 996 | 1,013 |
Accounts receivable — Customers and agents (Current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | 637 | 639 |
Other assets and deferred charges (Non-current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | $ 359 | $ 374 |
Equipment Installment Plans - G
Equipment Installment Plans - Gross Receivables by Credit Category (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | $ 1,069 | $ 1,085 |
2019 | 16 | |
2020 | 229 | |
2021 | 627 | |
2022 | 197 | |
Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 1,002 | 1,019 |
Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 47 | 47 |
Billed | Past Due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 20 | 19 |
Lowest Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 931 | 946 |
2019 | 15 | |
2020 | 209 | |
2021 | 544 | |
2022 | 163 | |
Lowest Risk | Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 881 | 896 |
Lowest Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 40 | 40 |
Lowest Risk | Billed | Past Due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 10 | 10 |
Lower Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 104 | 105 |
2019 | 1 | |
2020 | 17 | |
2021 | 66 | |
2022 | 20 | |
Lower Risk | Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 93 | 94 |
Lower Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 5 | 5 |
Lower Risk | Billed | Past Due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 6 | 6 |
Slight Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 28 | 27 |
2019 | 0 | |
2020 | 2 | |
2021 | 13 | |
2022 | 13 | |
Slight Risk | Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 23 | 24 |
Slight Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 2 | 1 |
Slight Risk | Billed | Past Due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 3 | 2 |
Higher Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 6 | 7 |
2019 | 0 | |
2020 | 1 | |
2021 | 4 | |
2022 | 1 | |
Higher Risk | Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 5 | 5 |
Higher Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 0 | 1 |
Higher Risk | Billed | Past Due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | $ 1 | $ 1 |
Equipment Installment Plans - A
Equipment Installment Plans - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Allowance for credit losses | ||
Allowance for credit losses, beginning of period | $ 72 | |
Allowance for credit losses, end of period | 73 | |
Equipment Installment Plan Receivable | ||
Allowance for credit losses | ||
Allowance for credit losses, beginning of period | 72 | $ 78 |
Bad debts expense | 17 | 3 |
Write-offs, net of recoveries | (16) | (9) |
Allowance for credit losses, end of period | $ 73 | $ 72 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income attributable to UScellular shareholders | $ 49 | $ 60 |
Weighted average number of shares used in basic earnings per share (in shares) | 86 | 86 |
Effects of dilutive securities (in shares) | 1 | 2 |
Weighted average number of shares used in diluted earnings per share (in shares) | 87 | 88 |
Basic earnings per share attributable to UScellular shareholders (USD per share) | $ 0.57 | $ 0.70 |
Diluted earnings per share attributable to UScellular shareholders (in shares) | $ 0.57 | $ 0.69 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Maximum | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1 | 1 |
Intangible Assets (Details)
Intangible Assets (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Licenses | |
Balance, beginning of period | $ 4,088 |
Acquisitions | 586 |
Transferred to Assets held for sale | 1 |
Exchanges - Licenses received | 1 |
Capitalized interest | 1 |
Balance, end of period | $ 4,677 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | 39 Months Ended | ||
Mar. 31, 2022USD ($)license | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)license | Dec. 31, 2020USD ($) | Dec. 31, 2024USD ($) | |
Licenses | |||||
Cash paid for licenses | $ 561 | $ 1,256 | |||
Auction 107 | |||||
Licenses | |||||
Licenses won | license | 254 | ||||
Total winning bid | $ 1,283 | ||||
Cash paid for licenses | 36 | ||||
FCC upfront payment | $ 30 | ||||
Auction 107 | Subsequent event | |||||
Licenses | |||||
Cash paid for licenses | $ 187 | ||||
Auction 110 | |||||
Licenses | |||||
Licenses won | license | 380 | ||||
Total winning bid | $ 580 | ||||
FCC upfront payment | $ 20 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Schedule of Investments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Equity method investments | $ 451 | $ 431 | |
Measurement alternative method investments | 4 | 8 | |
Investments recorded using the net asset value practical expedient | 10 | 0 | |
Total investments in unconsolidated entities | 465 | $ 439 | |
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 1,010 | $ 1,023 | |
Operating expenses | 939 | 939 | |
Operating income | 71 | 84 | |
Net income | 52 | 62 | |
Equity method investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 1,809 | 1,727 | |
Operating expenses | 1,371 | 1,275 | |
Operating income | 438 | 452 | |
Other income (expense), net | (4) | 12 | |
Net income | $ 434 | $ 464 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement (Details) - Revolving credit facility $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 300 |
Letters of credit outstanding | 0 |
Amount borrowed | 0 |
Amount available for use | 300 |
Amount borrowed during the period | 75 |
Amount repaid during the period | $ 75 |
SOFR rate | |
Debt Instrument [Line Items] | |
Contractual spread | 1.60% |
Debt - Term Loan Agreements (De
Debt - Term Loan Agreements (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Term loan agreements | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 800 |
Amount borrowed and outstanding | 699 |
Amount borrowed and repaid | 1 |
Amount available for use | $ 100 |
Term loan agreements | SOFR rate | |
Debt Instrument [Line Items] | |
Contractual spread | 2.10% |
Term loan agreement amendment | SOFR rate | |
Debt Instrument [Line Items] | |
Contractual spread | 2.60% |
2021 term loan agreement | SOFR rate | |
Debt Instrument [Line Items] | |
Contractual spread | 1.60% |
Debt - Export Credit Financing
Debt - Export Credit Financing Agreement (Details) - Export credit financing agreement $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 150 |
Amount borrowed during the period | $ 150 |
SOFR rate | |
Debt Instrument [Line Items] | |
Contractual spread | 1.60% |
Debt - Receivables Securitizati
Debt - Receivables Securitization Agreement (Details) - USD ($) $ in Millions | Apr. 29, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Debt Instrument [Line Items] | |||
Repayment of long-term debt | $ 126 | $ 0 | |
Receivables securitization agreement | |||
Debt Instrument [Line Items] | |||
Repayment of long-term debt | 50 | ||
Outstanding borrowings | 400 | ||
Amount available for use | 50 | ||
Assets available to be pledged | $ 529 | ||
Receivables securitization agreement | SOFR rate | |||
Debt Instrument [Line Items] | |||
Contractual spread | 0.90% | ||
Receivables securitization agreement | Subsequent event | |||
Debt Instrument [Line Items] | |||
Repayment of long-term debt | $ 50 |
Debt - Repurchase Agreement (De
Debt - Repurchase Agreement (Details) - Repurchase Agreement $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 200 |
Amount borrowed during the period | 60 |
Amount borrowed and outstanding | 60 |
Unused borrowing capacity | 140 |
Assets available for inclusion | $ 539 |
SOFR rate | |
Debt Instrument [Line Items] | |
Contractual spread | 1.25% |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Assets | |||
Cash and cash equivalents | $ 300 | $ 156 | |
Accounts receivable | 964 | 976 | |
Inventory, net | 177 | 173 | |
Other current assets | 51 | 49 | |
Licenses | 4,677 | 4,088 | |
Property, plant and equipment, net | 2,576 | 2,606 | |
Operating lease right-of-use assets | 952 | 959 | |
Other assets and deferred charges | 579 | 626 | |
Total assets | [1] | 10,875 | 10,341 |
Liabilities | |||
Current liabilities | 873 | 903 | |
Long-term operating lease liabilities | 882 | 889 | |
Other deferred liabilities and credits | 583 | 573 | |
Consolidated Variable Interest Entities | |||
Assets | |||
Cash and cash equivalents | 23 | 22 | |
Accounts receivable | 691 | 693 | |
Inventory, net | 2 | 2 | |
Other current assets | 44 | 44 | |
Licenses | 640 | 639 | |
Property, plant and equipment, net | 124 | 124 | |
Operating lease right-of-use assets | 47 | 47 | |
Other assets and deferred charges | 370 | 383 | |
Total assets | 1,941 | 1,954 | |
Liabilities | |||
Current liabilities | 91 | 30 | |
Long-term operating lease liabilities | 41 | 41 | |
Other deferred liabilities and credits | 25 | 25 | |
Total liabilities | $ 157 | $ 96 | |
[1] | The consolidated total assets as of March 31, 2022 and December 31, 2021, include assets held by consolidated variable interest entities (VIEs) of $1,433 million and $1,482 million, respectively, which are not available to be used to settle the obligations of UScellular. The consolidated total liabilities as of March 31, 2022 and December 31, 2021, include certain liabilities of consolidated VIEs of $23 million for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 9 — Variable Interest Entities for additional information. |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Investments in unconsolidated entities, maximum exposure | $ 5 | $ 4 | |
Capital contributions, loans or advances | 21 | $ 30 | |
USCC EIP LLC | |||
Variable Interest Entity [Line Items] | |||
Capital contributions, loans or advances | $ 9 | $ 10 |