Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 31, 2023 | Jun. 30, 2022 | |
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 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 | FY | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Common Shares | |||
Title of 12(b) Security | Common Shares, $1 par value | ||
Trading Symbol | USM | ||
Security Exchange Name | NYSE | ||
Entity Public Float | $ 428 | ||
Share Price | $ 28.96 | ||
Entity Common Stock, Shares Outstanding | 51,679,700 | ||
Series A Common Shares | |||
Entity Common Stock, Shares Outstanding | 33,005,900 | ||
6.25% Senior Notes | |||
Title of 12(b) Security | 6.25% Senior Notes Due 2069 | ||
Trading Symbol | UZD | ||
Security Exchange Name | NYSE | ||
5.50% Senior Notes | |||
Title of 12(b) Security | 5.50% Senior Notes Due 2070 | ||
Trading Symbol | UZE | ||
Security Exchange Name | NYSE | ||
5.50% Senior Notes | |||
Title of 12(b) Security | 5.50% Senior Notes Due 2070 | ||
Trading Symbol | UZF | ||
Security Exchange Name | NYSE |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Chicago, Illinois |
Consolidated Statement Of Opera
Consolidated Statement Of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating revenues | |||
Revenues | $ 4,169 | $ 4,122 | $ 4,037 |
Operating expenses | |||
Selling, general and administrative | 1,408 | 1,345 | 1,368 |
Depreciation, amortization and accretion | 700 | 678 | 683 |
Loss on impairment of licenses | 3 | 0 | 0 |
(Gain) loss on asset disposals, net | 19 | 23 | 25 |
(Gain) loss on sale of business and other exit costs, net | (1) | (2) | 0 |
(Gain) loss on license sales and exchanges, net | 0 | 0 | (5) |
Total operating expenses | 4,100 | 3,952 | 3,864 |
Operating income | 69 | 170 | 173 |
Investment and other income (expense) | |||
Equity in earnings of unconsolidated entities | 158 | 179 | 179 |
Interest and dividend income | 8 | 6 | 8 |
Gain (loss) on investments | 0 | 0 | 2 |
Interest expense | (163) | (175) | (112) |
Total investment and other income | 3 | 10 | 77 |
Income before income taxes | 72 | 180 | 250 |
Income tax expense | 37 | 20 | 17 |
Net income | 35 | 160 | 233 |
Less: Net income attributable to noncontrolling interests, net of tax | 5 | 5 | 4 |
Net income attributable to UScellular shareholders | $ 30 | $ 155 | $ 229 |
Basic weighted average shares outstanding (in shares) | 85 | 86 | 86 |
Basic earnings per share attributable to UScellular shareholders | $ 0.35 | $ 1.80 | $ 2.66 |
Diluted weighted average shares outstanding (in shares) | 86 | 87 | 87 |
Diluted earnings per share attributable to UScellular shareholders | $ 0.35 | $ 1.77 | $ 2.62 |
Service | |||
Operating revenues | |||
Revenues | $ 3,125 | $ 3,115 | $ 3,067 |
Operating expenses | |||
Cost of goods and services sold | 755 | 790 | 782 |
Equipment sales | |||
Operating revenues | |||
Revenues | 1,044 | 1,007 | 970 |
Operating expenses | |||
Cost of goods and services sold | $ 1,216 | $ 1,118 | $ 1,011 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net income | $ 35 | $ 160 | $ 233 |
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | |||
Depreciation, amortization and accretion | 700 | 678 | 683 |
Bad debts expense | 132 | 56 | 72 |
Stock-based compensation expense | 24 | 27 | 32 |
Deferred income taxes, net | 33 | 41 | 130 |
Equity in earnings of unconsolidated entities | (158) | (179) | (179) |
Distributions from unconsolidated entities | 145 | 176 | 189 |
Loss on impairment of licenses | 3 | 0 | 0 |
(Gain) loss on asset disposals, net | 19 | 23 | 25 |
(Gain) loss on sale of business and other exit costs, net | (1) | (2) | 0 |
(Gain) loss on license sales and exchanges, net | 0 | 0 | (5) |
(Gain) loss on investments | 0 | 0 | (2) |
Other operating activities | 9 | 33 | 2 |
Changes in assets and liabilities from operations | |||
Accounts receivable | (59) | (27) | (8) |
Equipment installment plans receivable | (199) | (116) | (54) |
Inventory | (88) | (27) | 16 |
Accounts payable | 12 | (57) | 145 |
Customer deposits and deferred revenues | 47 | 40 | 2 |
Accrued taxes | 121 | (41) | (57) |
Other assets and liabilities | 57 | 17 | 13 |
Net cash provided by operating activities | 832 | 802 | 1,237 |
Cash flows from investing activities | |||
Cash paid for additions to property, plant and equipment | (602) | (724) | (989) |
Cash paid for licenses | (585) | (1,302) | (171) |
Cash received from divestitures and exchanges | 8 | 3 | 26 |
Advance payments for license acquisitions | 0 | (20) | (30) |
Other investing activities | 0 | 7 | 1 |
Net cash used in investing activities | (1,179) | (2,036) | (1,163) |
Cash flows from financing activities | |||
Issuance of long-term debt | 800 | 1,342 | 1,125 |
Repayment of long-term debt | (329) | (1,118) | (108) |
Issuance of short-term debt | 110 | 0 | 0 |
Repayment of short-term debt | (50) | 0 | 0 |
Common Shares reissued for benefit plans, net of tax payments | (5) | (16) | (11) |
Repurchase of Common Shares | (43) | (31) | (23) |
Payment of debt issuance costs | (1) | (22) | (38) |
Distributions to noncontrolling interests | (3) | (3) | (6) |
Payments to acquire additional interest in subsidiaries | 0 | 0 | (11) |
Cash paid for software license agreements | (22) | (9) | (2) |
Other financing activities | (1) | (1) | 0 |
Net cash provided by financing activities | 456 | 142 | 926 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 109 | (1,092) | 1,000 |
Cash, cash equivalents and restricted cash | |||
Beginning of period | 199 | 1,291 | 291 |
End of period | $ 308 | $ 199 | $ 1,291 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | |
Current assets | |||
Cash and cash equivalents | $ 273 | $ 156 | |
Accounts receivable | |||
Customers and agents, less allowances of $70 and $57, respectively | 985 | 976 | |
Roaming | 4 | 7 | |
Other, less allowances of $2 and $2, respectively | 83 | 63 | |
Inventory, net | 261 | 173 | |
Prepaid expenses | 68 | 58 | |
Income taxes receivable | 4 | 123 | |
Other current assets | 45 | 49 | |
Total current assets | 1,723 | 1,605 | |
Assets held for sale | 26 | 18 | |
Licenses | 4,690 | 4,088 | |
Investments in unconsolidated entities | 452 | 439 | |
Property, plant and equipment | |||
In service and under construction | 9,334 | 9,056 | |
Less: Accumulated depreciation and amortization | 6,710 | 6,450 | |
Property, plant and equipment, net | 2,624 | 2,606 | |
Operating lease right-of-use assets | 918 | 959 | |
Other assets and deferred charges | 686 | 626 | |
Total assets | [1] | 11,119 | 10,341 |
Current liabilities | |||
Current portion of long-term debt | 13 | 3 | |
Accounts payable | |||
Affiliated | 12 | 14 | |
Trade | 344 | 346 | |
Customer deposits and deferred revenues | 239 | 191 | |
Accrued taxes | 35 | 33 | |
Accrued compensation | 84 | 83 | |
Short-term operating lease liabilities | 133 | 129 | |
Other current liabilities | 335 | 104 | |
Total current liabilities | 1,195 | 903 | |
Deferred liabilities and credits | |||
Deferred income tax liability, net | 708 | 674 | |
Long-term operating lease liabilities | 843 | 889 | |
Other deferred liabilities and credits | 604 | 573 | |
Long-term debt, net | 3,187 | 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 85 shares (33 Series A Common and 52 Common Shares) and 86 shares (33 Series A Common and 53 Common Shares), respectively Par Value ($1.00 per share) ($33 Series A Common and $55 Common Shares) | 88 | 88 | |
Additional paid-in capital | 1,703 | 1,678 | |
Treasury shares, at cost, 3 and 2 Common Shares, respectively | (98) | (68) | |
Retained earnings | 2,861 | 2,849 | |
Total UScellular shareholders' equity | 4,554 | 4,547 | |
Noncontrolling interests | 16 | 16 | |
Total equity | 4,570 | 4,563 | |
Total liabilities and equity | [1] | $ 11,119 | $ 10,341 |
[1]The consolidated total assets as of December 31, 2022 and 2021, include assets held by consolidated variable interest entities (VIEs) of $1,265 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 December 31, 2022 and 2021, include certain liabilities of consolidated VIEs of $25 million and $23 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 14 — Variable Interest Entities for additional information. |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts receivable | |||
Customers and agents allowances | $ 70 | $ 57 | |
Other allowances | $ 2 | $ 2 | |
UScellular shareholders’ equity | |||
Authorized shares (in shares) | 190 | 190 | |
Issued shares (in shares) | 88 | 88 | |
Outstanding shares (in shares) | 85 | 86 | |
Par value | $ 88 | $ 88 | |
Variable Interest Entities VIE's | |||
Total assets | [1] | 11,119 | 10,341 |
Consolidated Variable Interest Entities | |||
Variable Interest Entities VIE's | |||
Total assets | 2,071 | 1,954 | |
Liabilities | 166 | 96 | |
Consolidated Variable Interest Entities | No recourse | |||
Variable Interest Entities VIE's | |||
Liabilities | 25 | 23 | |
Consolidated Variable Interest Entities | Assets held | |||
Variable Interest Entities VIE's | |||
Total assets | $ 1,265 | $ 1,482 | |
Series A Common Shares | |||
UScellular shareholders’ equity | |||
Authorized shares (in shares) | 50 | 50 | |
Issued shares (in shares) | 33 | 33 | |
Outstanding shares (in shares) | 33 | 33 | |
Par value per share (in dollars per share) | $ 1 | $ 1 | |
Par value | $ 33 | $ 33 | |
Common Shares | |||
UScellular shareholders’ equity | |||
Authorized shares (in shares) | 140 | 140 | |
Issued shares (in shares) | 55 | 55 | |
Outstanding shares (in shares) | 52 | 53 | |
Par value per share (in dollars per share) | $ 1 | $ 1 | |
Par value | $ 55 | $ 55 | |
Treasury Stock, Shares | 3 | 2 | |
[1]The consolidated total assets as of December 31, 2022 and 2021, include assets held by consolidated variable interest entities (VIEs) of $1,265 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 December 31, 2022 and 2021, include certain liabilities of consolidated VIEs of $25 million and $23 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 14 — Variable Interest Entities for additional information. |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Series A Common and Common shares | Additional paid-in capital | Treasury shares | Retained earnings | Total UScellular shareholders' equity | Noncontrolling interests |
Retained earnings | ASC 842 | $ (2) | $ (2) | $ (2) | ||||
Beginning balance at Dec. 31, 2019 | 4,210 | $ 88 | $ 1,629 | $ (70) | 2,550 | 4,197 | $ 13 |
Net income attributable to UScellular shareholders | 229 | 229 | 229 | ||||
Net income attributable to noncontrolling interests classified as equity | 4 | 0 | 4 | ||||
Repurchase of Common Shares | (23) | (23) | (23) | ||||
Incentive and compensation plans | 20 | 32 | 26 | (38) | 20 | ||
Distributions to noncontrolling interests | (6) | 0 | (6) | ||||
Acquisitions of noncontrolling interests | (6) | (10) | (10) | 4 | |||
Ending balance at Dec. 31, 2020 | 4,426 | 88 | 1,651 | (67) | 2,739 | 4,411 | 15 |
Net income attributable to UScellular shareholders | 155 | 155 | 155 | ||||
Net income attributable to noncontrolling interests classified as equity | 4 | 0 | 4 | ||||
Repurchase of Common Shares | (31) | (31) | (31) | ||||
Incentive and compensation plans | 12 | 27 | 30 | (45) | 12 | ||
Distributions to noncontrolling interests | (3) | 0 | (3) | ||||
Ending balance at Dec. 31, 2021 | 4,563 | 88 | 1,678 | (68) | 2,849 | 4,547 | 16 |
Retained earnings | 2,849 | ||||||
Net income attributable to UScellular shareholders | 30 | 30 | 30 | ||||
Net income attributable to noncontrolling interests classified as equity | 3 | 0 | 3 | ||||
Repurchase of Common Shares | (43) | (43) | (43) | ||||
Incentive and compensation plans | 20 | 25 | 13 | (18) | 20 | ||
Distributions to noncontrolling interests | (3) | 0 | (3) | ||||
Ending balance at Dec. 31, 2022 | 4,570 | $ 88 | $ 1,703 | $ (98) | $ 2,861 | $ 4,554 | $ 16 |
Retained earnings | $ 2,861 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 Summary of Significant Accounting Policies United States Cellular Corporation (UScellular), a Delaware Corporation, is an 84%-owned subsidiary of Telephone and Data Systems, Inc. (TDS). Nature of Operations UScellular owns, operates and invests in wireless systems throughout the United States. As of December 31, 2022, UScellular served customers with 4.7 million retail connections. UScellular has one reportable segment. 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. See Note 14 — Variable Interest Entities for additional information relating to UScellular’s VIEs. Intercompany accounts and transactions have been eliminated. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the years ended December 31, 2022, 2021 and 2020 equaled net income. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (a) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and (b) the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less. Cash and cash equivalents subject to contractual restrictions are classified as restricted cash. Restricted cash primarily consists of balances required under the receivables securitization agreement. See Note 12 — 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. December 31, 2022 2021 (Dollars in millions) Cash and cash equivalents $ 273 $ 156 Restricted cash included in Other current assets 35 43 Cash, cash equivalents and restricted cash in the statement of cash flows $ 308 $ 199 Accounts Receivable and Allowance for Credit Losses Accounts receivable consist primarily of amounts owed by customers for wireless services and equipment sales, including sales of certain devices and accessories under installment plans, by agents and third-party distributors for sales of equipment to them and by other wireless carriers whose customers have used UScellular’s wireless systems. UScellular estimates expected credit losses related to accounts receivable balances based on a review of available and relevant information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other factors that could affect collectability. Expected credit losses are determined for each pool of accounts receivable balances that share similar risk characteristics. The allowance for credit losses is the best estimate of the amount of expected credit losses related to existing accounts receivable. UScellular does not have any off-balance sheet credit exposure related to its customers. Inventory Inventory consists primarily of wireless devices stated at the lower of cost, which approximates cost determined on a first-in first-out basis, or net realizable value. Net realizable value is determined by reference to the stand-alone selling price. Cloud-Hosted Arrangements UScellular's cloud-hosted arrangements that are service contracts consist primarily of software used to perform administrative functions. Implementation costs related to UScellular's cloud-hosted arrangements, which are recorded in Prepaid expenses and Other assets and deferred charges in the Consolidated Balance Sheet, were as follows: December 31, 2022 2021 (Dollars in millions) Implementation costs, gross $ 89 $ 76 Accumulated amortization (47) (29) Implementation costs, net $ 42 $ 47 These costs are amortized over the period of the service contract, which is generally three Licenses Licenses consist of direct and incremental costs incurred in acquiring Federal Communications Commission (FCC) wireless spectrum licenses that generally provide UScellular with the exclusive right to utilize designated radio spectrum within specific geographic service areas to provide wireless service. Although wireless spectrum licenses are issued for a fixed period of time, generally ten years, or in some cases twelve UScellular performs its annual impairment assessment of wireless spectrum licenses as of November 1 of each year or more frequently if there are events or circumstances that cause UScellular to believe it is more likely than not that the carrying value of wireless spectrum licenses exceeds fair value. For purposes of the 2022 impairment test, UScellular had one unit of accounting as a result of aggregating all developed operating market wireless spectrum licenses (built wireless spectrum licenses) and non-operating market wireless spectrum licenses (unbuilt wireless spectrum licenses), and for the 2021 test, UScellular had eight units of accounting, which consisted of one unit of accounting for built wireless spectrum licenses and seven unbuilt wireless spectrum licenses. UScellular believes this change in units of accounting assessed for impairment better reflects the integrated use of licenses as part of its national interdependent network. This change does not impact the results of the impairment assessment for the current or prior years. UScellular performed a qualitative impairment assessment to determine whether the wireless spectrum licenses were impaired. In 2022 and 2021, UScellular considered several qualitative factors, including analyst estimates of wireless spectrum license values which contemplated recent spectrum auction results, recent UScellular and other market participant transactions, and other industry and market factors. Based on these assessments, UScellular concluded that it was more likely than not that the fair value of the unit of accounting exceeded its carrying value. Therefore, no quantitative impairment evaluation was completed. See Note 7 — Intangible Assets for additional details related to wireless spectrum licenses. Investments in Unconsolidated Entities For its equity method investments for which financial information is readily available, UScellular records its equity in the earnings of the entity in the current period. For its equity method investments for which financial information is not readily available, UScellular records its equity in the earnings of the entity on a one quarter lag basis. Property, Plant and Equipment UScellular’s Property, plant and equipment is stated at the original cost of construction or purchase including capitalized costs of certain taxes, payroll-related expenses, interest and estimated costs to remove the assets. Expenditures that enhance the productive capacity of assets in service or extend their useful lives are capitalized and depreciated. Expenditures for maintenance and repairs of assets in service are charged to System operations expense or Selling, general and administrative expense, as applicable. Retirements and disposals of assets are recorded by removing the original cost of the asset (along with the related accumulated depreciation) from plant in service and recording it, together with proceeds, if any, and net removal costs (removal costs less an applicable accrued asset retirement obligation and salvage value realized), as a gain or loss, as appropriate. Software licenses that qualify for capitalization as an asset are accounted for as the acquisition of a fixed asset and the incurrence of a liability to the extent that the license fees are not fully paid at acquisition. Depreciation and Amortization Depreciation is provided using the straight-line method over the estimated useful life of the related asset. UScellular depreciates leasehold improvement assets over periods ranging from one year to thirty years; such periods approximate the shorter of the assets’ economic lives or the specific lease terms. Useful lives of specific assets are reviewed throughout the year to determine if changes in technology or other business changes would warrant accelerating the depreciation of those specific assets. There were no material changes to the assigned useful lives of the various categories of property, plant and equipment in 2022, 2021 or 2020. However, in 2022, 2021 and 2020, depreciation for certain specific assets was accelerated due to changes in technology. See Note 9 — Property, Plant and Equipment for additional details related to useful lives. Impairment of Long-Lived Assets UScellular reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the assets might be impaired. UScellular has one asset group for purposes of assessing property, plant and equipment for impairment based on the integrated nature of its assets and operations. The cash flows generated by this single interdependent asset group represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Leases A lease is generally present in a contract if the lessee controls the use of identified property, plant or equipment for a period of time in exchange for consideration. See Note 10 — Leases for additional details related to leases. Agent Liabilities UScellular has relationships with agents, which are independent businesses that obtain customers for UScellular. At December 31, 2022 and 2021, UScellular had accrued $53 million and $51 million, respectively, in agent related liabilities. These amounts are included in Other current liabilities in the Consolidated Balance Sheet. Debt Issuance Costs Debt issuance costs include underwriters’ and legal fees and other charges related to issuing and renewing various borrowing instruments and other long-term agreements and are amortized over the respective term of each instrument. Debt issuance costs related to UScellular’s revolving credit agreement and receivables securitization agreement are recorded in Other assets and deferred charges in the Consolidated Balance Sheet. All other debt issuance costs are presented as an offset to the related debt obligation in the Consolidated Balance Sheet. Asset Retirement Obligations UScellular records asset retirement obligations for the fair value of legal obligations associated with asset retirements and a corresponding increase in the carrying amount of the related long-lived asset in the period in which the obligations are incurred. In periods subsequent to initial measurement, UScellular recognizes changes in the liability resulting from the passage of time and updates to the timing or the amount of the original estimates. The liability is accreted to its estimated settlement date value over the period to the estimated settlement date. The change in the carrying amount of the long-lived asset is depreciated over the average remaining life of the related asset. See Note 11 — Asset Retirement Obligations for additional information. Treasury Shares Common Shares repurchased by UScellular are recorded at cost as treasury shares and result in a reduction of equity. When treasury shares are reissued, UScellular determines the cost using the first-in, first-out cost method. The difference between the cost of the treasury shares and reissuance price is included in Additional paid-in capital or Retained earnings. Revenue Recognition Revenues from sales of equipment and products are recognized when control has transferred to the customer, agent or third-party distributor. Service revenues are recognized as the related service is provided. See Note 2 — Revenue Recognition for additional information on UScellular's policies related to Revenues. Advertising Costs UScellular expenses advertising costs as incurred. Advertising costs totaled $171 million, $184 million and $196 million in 2022, 2021 and 2020, respectively. Income Taxes UScellular is included in a consolidated federal income tax return with other members of the TDS consolidated group. For financial statement purposes, UScellular and its subsidiaries calculate their income, income taxes and credits as if they comprised a separate affiliated group. Under a tax allocation agreement between TDS and UScellular, UScellular remits its applicable income tax payments to and receives applicable tax refunds from TDS. UScellular had no tax receivable balance with TDS as of December 31, 2022, and a receivable balance of $123 million as of December 31, 2021. In January 2022, UScellular received an income tax refund of $123 million from TDS related to the 2020 net operating loss carryback enabled by the CARES Act. Deferred taxes are computed using the liability method, whereby deferred tax assets are recognized for future deductible temporary differences and operating loss carryforwards, and deferred tax liabilities are recognized for future taxable temporary differences. Both deferred tax assets and liabilities are measured using the enacted tax rates in effect when the temporary differences are expected to reverse. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. UScellular evaluates income tax uncertainties, assesses the probability of the ultimate settlement with the applicable taxing authority and records an amount based on that assessment. Deferred taxes are reported as a net non-current asset or liability by jurisdiction. Any corresponding valuation allowance to reduce the amount of deferred tax assets is also recorded as non-current. See Note 5 — Income Taxes for additional information. Stock-Based Compensation and Other Plans UScellular has established a long-term incentive plan and a non-employee director compensation plan. These plans are considered compensatory plans and, therefore, recognition of costs for grants made under these plans is required. UScellular recognizes stock compensation expense based upon the fair value of the specific awards granted using established valuation methodologies. The amount of stock compensation cost recognized on either a straight-line basis or graded attribution method is based on the portion of the award that is expected to vest over the requisite service period, which generally represents the vesting period. Stock-based compensation cost recognized has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. See Note 17 — Stock-Based Compensation for additional information. Defined Contribution Plans UScellular participates in a qualified noncontributory defined contribution pension plan sponsored by TDS; such plan provides pension benefits for the employees of UScellular and its subsidiaries. Under this plan, pension costs are calculated separately for each participant and are funded annually. Pension costs were $12 million, $12 million and $12 million in 2022, 2021 and 2020, respectively. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2 Revenue Recognition Nature of goods and services The following is a description of principal activities from which UScellular generates its revenues. Services and products Nature, timing of satisfaction of performance obligations, and significant payment terms Wireless services Wireless service includes voice, messaging and data services. Revenue is recognized in Service revenues as wireless service is provided to the customer. Wireless services generally are billed and paid in advance on a monthly basis. Wireless devices and accessories UScellular offers a comprehensive range of wireless devices such as handsets, tablets, mobile hotspots, home phones and routers for use by its customers, as well as accessories. UScellular also sells wireless devices to agents and other third-party distributors for resale. UScellular frequently discounts wireless devices sold to new and current customers. UScellular also offers customers the option to purchase certain devices and accessories under installment contracts over a specified time period. For certain equipment installment plans, after a specified period of time, the customer may have the right to upgrade to a new device. Such upgrades require the customer to enter into an equipment installment contract for the new device, and transfer the existing device to UScellular. UScellular recognizes revenue in Equipment sales revenues when control of the device or accessory is transferred to the customer, agent or third-party distributor, which is generally upon delivery. Wireless roaming UScellular receives roaming revenues when other wireless carriers’ customers use UScellular’s wireless systems. UScellular recognizes revenue in Service revenues when the roaming service is provided. Wireless Eligible Telecommunications Carrier (ETC) Revenues Telecommunications companies may be designated by states, or in some cases by the FCC, as an ETC to receive support payments from the Universal Service Fund if they provide specified services in “high cost” areas. ETC revenues recognized in the reporting period represent the amounts which UScellular is entitled to receive for such period, as determined and approved in connection with UScellular’s designation as an ETC in various states. Wireless tower rents UScellular receives tower rental revenues when another carrier leases tower space on a UScellular owned tower. UScellular recognizes revenue in Service revenues in the period during which the services are provided. Activation fees UScellular charges its end customers activation fees in connection with the sale of certain services and equipment. Activation fees are deferred and recognized over the period benefited. Significant Judgments As a practical expedient, UScellular groups similar contracts or similar performance obligations together into portfolios of contracts or performance obligations if doing so does not result in a significant difference from accounting for the individual contracts discretely. UScellular applies this grouping method for the following types of transactions: device activation fees, contract acquisition costs, and certain customer promotions. Contract portfolios are recognized over the respective expected customer lives or terms of the contracts. Services are deemed to be highly interrelated when the method and timing of transfer and performance risk are the same. Highly interrelated services that are determined to not be distinct have been grouped into a single performance obligation. Each month of services promised is a performance obligation. The series of monthly service performance obligations promised over the course of the contract are combined into a single performance obligation for purposes of the revenue allocation. UScellular has made judgments regarding transaction price, including but not limited to issues relating to variable consideration, time value of money, returns and non-cash consideration. When determined to be significant in the context of the contract, these items are considered in the valuation of transaction price at contract inception or modification, as appropriate. Multiple Performance Obligations UScellular sells bundled service and equipment offerings. In these instances, UScellular recognizes its revenue based on the relative standalone selling prices for each distinct service or equipment performance obligation, or bundles thereof. UScellular estimates the standalone selling price of the device or accessory to be its retail price excluding discounts. UScellular estimates the standalone selling price of wireless service to be the price offered to customers on month-to-month contracts. Incentives Discounts, incentives, and rebates to agents and end customers that are deemed cash are recognized as a reduction of Operating revenues concurrently with the associated revenue. From time to time, UScellular may offer certain promotions to incentivize customers to switch to, or to purchase additional services from, UScellular. Under these types of promotions, an eligible customer may receive an incentive in the form of a discount off additional services purchased shown as a credit to the customer’s monthly bill. UScellular accounts for the future discounts as material rights at the time of the initial transaction by allocating and deferring revenue based on the relative proportion of the future discounts in comparison to the aggregate initial purchase. The deferred revenue will be recognized as service revenue in future periods. Amounts Collected from Customers and Remitted to Governmental Authorities UScellular records amounts collected from customers and remitted to governmental authorities on a net basis within a liability account if the amount is assessed upon the customer and UScellular merely acts as an agent in collecting the amount on behalf of the imposing governmental authority. If the amount is assessed upon UScellular, then amounts collected from customers 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 $61 million, $66 million and $56 million for 2022, 2021 and 2020, respectively. 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 recognized at a point in time. Year Ended December 31, 2022 2021 2020 (Dollars in millions) Revenues from contracts with customers: Retail service 1,2 $ 2,793 $ 2,757 $ 2,681 Inbound roaming 67 110 152 Other service 1 172 165 157 Service revenues from contracts with customers 3,032 3,032 2,990 Equipment sales 1,044 1,007 970 Total revenues from contracts with customers 3 $ 4,076 $ 4,039 $ 3,960 1 For 2021 and 2020, amounts have been adjusted to reclassify $8 million and $5 million, respectively, of Internet of Things (IoT) and Reseller revenues from Retail service to Other service. 2 During the third quarter of 2021, UScellular recorded a $9 million out-of-period error related to the timing of recognition of regulatory fee billings. This adjustment had the impact of increasing Service revenue by $9 million in 2021. UScellular determined that this adjustment was not material to any of the periods impacted. 3 Revenue line items in this table will not agree to amounts presented in the Consolidated Statement of Operations as the amounts in this table only include revenue resulting from contracts with customers. Contract Balances For contracts that involve multiple element service and equipment offerings, the transaction price is allocated to each performance obligation based on its relative standalone selling price. When consideration is received in advance of delivery of goods or services, a contract liability is recorded. A contract asset is recorded when revenue is recognized in advance of UScellular’s right to receive consideration. Once there is an unconditional right to receive the consideration, UScellular records such amounts as receivables, and then bills the customer under the terms of the respective contract. UScellular recognizes Equipment sales revenue when the equipment is delivered to the customer and a corresponding contract asset or liability is recorded for the difference between the amount of revenue recognized and the amount billed to the customer in cases where discounts are offered. The contract asset or liability is reduced over the contract term as service is provided and billed to the customer. 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. December 31, 2022 2021 (Dollars in millions) Contract assets $ 5 $ 7 Contract liabilities $ 349 $ 243 Revenue recognized related to contract liabilities existing at January 1, 2022 was $176 million for the year ended December 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 December 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) 2023 $ 268 2024 118 Thereafter 56 Total $ 442 Contract Cost Assets |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3 Fair Value Measurements As of December 31, 2022 and 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 December 31, 2022 December 31, 2021 Book Value Fair Value Book Value Fair Value (Dollars in millions) Long-term debt Retail 2 $ 1,500 $ 899 $ 1,500 $ 1,594 Institutional 2 536 395 535 659 Other 2 1,208 1,208 746 746 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, an 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 5.38% to 8.28% and 1.31% to 4.40% at December 31, 2022 and 2021, respectively. |
Equipment Installment Plans
Equipment Installment Plans | 12 Months Ended |
Dec. 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. December 31, 2022 2021 (Dollars in millions) Equipment installment plan receivables, gross $ 1,211 $ 1,085 Allowance for credit losses (96) (72) Equipment installment plan receivables, net $ 1,115 $ 1,013 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 646 $ 639 Other assets and deferred charges (Non-current portion) 469 374 Equipment installment plan receivables, net $ 1,115 $ 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: December 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 $ 1,016 $ 98 $ 22 $ 5 $ 1,141 $ 896 $ 94 $ 24 $ 5 $ 1,019 Billed — current 41 5 2 — 48 40 5 1 1 47 Billed — past due 13 6 2 1 22 10 6 2 1 19 Total $ 1,070 $ 109 $ 26 $ 6 $ 1,211 $ 946 $ 105 $ 27 $ 7 $ 1,085 The balance of the equipment installment plan receivables as of December 31, 2022 on a gross basis by year of origination were as follows: 2020 2021 2022 Total (Dollars in millions) Lowest Risk $ 43 $ 303 $ 724 $ 1,070 Lower Risk 3 28 78 109 Slight Risk — 4 22 26 Higher Risk — 1 5 6 Total $ 46 $ 336 $ 829 $ 1,211 Activity for the years ended December 31, 2022 and 2021, in the allowance for credit losses for equipment installment plan receivables was as follows: 2022 2021 (Dollars in millions) Allowance for credit losses, beginning of year $ 72 $ 78 Bad debts expense 100 38 Write-offs, net of recoveries 1 (76) (44) Allowance for credit losses, end of year $ 96 $ 72 1 Write-offs increased in 2022 as customer payment behavior returned to pre-COVID-19 pandemic levels. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5 Income Taxes UScellular 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, UScellular 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. UScellular’s current income taxes balances at December 31, 2022 and 2021, were as follows: December 31, 2022 2021 (Dollars in millions) Federal income taxes receivable $ 4 $ 123 Net state income taxes receivable — — Income tax expense (benefit) is summarized as follows: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Current Federal $ 1 $ 2 $ (118) State 3 (23) 5 Deferred Federal 19 49 124 State 14 (8) 6 Total income tax expense (benefit) $ 37 $ 20 $ 17 A reconciliation of UScellular’s income tax expense computed at the statutory rate to the reported income tax expense, and the statutory federal income tax rate to UScellular’s effective income tax rate is as follows: Year Ended December 31, 2022 2021 2020 Amount Rate Amount Rate Amount Rate (Dollars in millions) Statutory federal income tax expense and rate $ 15 21.0 % $ 38 21.0 % $ 52 21.0 % State income taxes, net of federal benefit 1 14 18.9 (25) (14.1) 8 3.4 Change in federal valuation allowance 2 7 9.9 7 3.8 — 0.1 Loss carryback benefit of CARES Act 3 — — — — (49) (19.8) Nondeductible compensation 3 3.6 2 1.3 6 2.6 Tax credits — (0.6) — (0.2) — (0.1) Other differences, net (2) (1.3) (2) (0.4) — (0.6) Total income tax expense (benefit) and rate $ 37 51.5 % $ 20 11.4 % $ 17 6.6 % 1 State income taxes, net of federal benefit, include changes in unrecognized tax benefits as well as adjustments to state valuation allowances. State taxes increased in 2022 due primarily to valuation allowance adjustments. State taxes in 2021 are a net benefit due primarily to the reduction of tax accruals resulting from expirations of state statute of limitations for prior tax years. 2 Change in federal valuation allowance is due primarily to current year interest expense from partnership investments that carryforward but may not be realized. 3 The CARES Act provided a 5-year carryback of net operating losses generated in years 2018-2020. As the statutory federal tax rate applicable to certain years within the carryback period is 35%, carryback to those years provided a tax benefit in excess of the current federal statutory rate of 21%. Significant components of UScellular’s deferred income tax assets and liabilities at December 31, 2022 and 2021, were as follows: December 31, 2022 2021 1 (Dollars in millions) Deferred tax assets Net operating loss (NOL) carryforwards $ 132 $ 126 Lease liabilities 244 254 Contract liabilities 62 37 Interest expense carryforwards 65 30 Asset retirement obligation 73 64 Other 100 93 Total deferred tax assets 676 604 Less valuation allowance (115) (83) Net deferred tax assets 561 521 Deferred tax liabilities Property, plant and equipment 457 446 Licenses/intangibles 382 330 Partnership investments 172 154 Lease assets 224 232 Other 34 33 Total deferred tax liabilities 1,269 1,195 Net deferred income tax liability $ 708 $ 674 1 Certain prior year deferred tax assets and liabilities have been reclassified to align with the current year presentation. At December 31, 2022, UScellular and certain subsidiaries had $2,346 million of state NOL carryforwards (generating a $102 million deferred tax asset) available to offset future taxable income. The state NOL carryforwards expire between 2023 and 2042. UScellular and certain subsidiaries had $142 million of federal NOL carryforwards (generating a $30 million deferred tax asset) available to offset future taxable income. The federal NOL carryforwards generally expire between 2023 and 2037, with the exception of federal NOLs generated after 2017, which do not expire. A valuation allowance was established for certain federal and state NOL carryforwards since it is more likely than not that a portion of such carryforwards will expire before they can be utilized. At December 31, 2022, UScellular and certain subsidiaries had $350 million of state interest limitation carryforwards (generating a $14 million deferred tax asset) available to offset future taxable income. The state interest limitation carryforwards generally do not expire. UScellular and certain subsidiaries had $241 million of federal interest limitation carryforwards (generating a $51 million deferred tax asset) available to offset future taxable income. The federal interest limitation carryforwards do not expire. A valuation allowance was established for certain federal and state interest limitation carryforwards since it is more likely than not that a portion of such carryforwards will not be utilized. A summary of UScellular’s deferred tax asset valuation allowance is as follows: 2022 2021 2020 (Dollars in millions) Balance at beginning of year $ 83 $ 94 $ 90 Charged to Income tax expense 32 (11) 4 Balance at end of year $ 115 $ 83 $ 94 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2022 2021 2020 (Dollars in millions) Unrecognized tax benefits balance at beginning of year $ 35 $ 51 $ 48 Additions for tax positions of current year 5 8 7 Additions for tax positions of prior years 1 — 2 Reductions for tax positions of prior years — (3) — Reductions for settlements of tax positions — (2) — Reductions for lapses in statutes of limitations (6) (19) (6) Unrecognized tax benefits balance at end of year $ 35 $ 35 $ 51 Unrecognized tax benefits are included in Other deferred liabilities and credits in the Consolidated Balance Sheet. If these benefits were recognized at each respective year end period, they would have reduced income tax expense in 2022, 2021 and 2020 by $28 million, $28 million and $41 million, respectively, net of the federal benefit from state income taxes. UScellular recognizes accrued interest and penalties related to unrecognized tax benefits in Income tax expense (benefit). The amounts charged to income tax expense related to interest and penalties resulted in nominal expense in 2022, a benefit of $10 million in 2021, and an expense of $2 million in 2020. Net accrued liabilities for interest and penalties were $13 million and $12 million at December 31, 2022 and 2021, respectively, and are included in Other deferred liabilities and credits in the Consolidated Balance Sheet. UScellular is included in TDS’ consolidated federal and certain state income tax returns. UScellular also files certain state and local income tax returns separately from TDS. With limited exceptions, TDS and UScellular are no longer subject to federal and state income tax audits for the years prior to 2019. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 6 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: Year Ended December 31, 2022 2021 2020 (Dollars and shares in millions, except per share amounts) Net income attributable to UScellular shareholders $ 30 $ 155 $ 229 Weighted average number of shares used in basic earnings per share 85 86 86 Effects of dilutive securities 1 1 1 Weighted average number of shares used in diluted earnings per share 86 87 87 Basic earnings per share attributable to UScellular shareholders $ 0.35 $ 1.80 $ 2.66 Diluted earnings per share attributable to UScellular shareholders $ 0.35 $ 1.77 $ 2.62 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 7 Intangible Assets Licenses UScellular reviews opportunities to acquire additional wireless spectrum, including pursuant to FCC auctions. UScellular also may seek to divest outright or exchange wireless spectrum that is not strategic to its long-term success. Activity related to UScellular's Licenses is presented below. 2022 2021 (Dollars in millions) Balance at beginning of year $ 4,088 $ 2,629 Acquisitions 595 1,464 Impairment 1 (3) — Transferred to Assets held for sale 1 (18) Exchanges - Licenses received 1 — Capitalized interest 8 13 Balance at end of year $ 4,690 $ 4,088 1 Impairment charge relates to licenses in markets where UScellular no longer expects to meet FCC buildout requirements. Auction 107 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 $185 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, and are adjusted as necessary as the estimated obligation changes. UScellular paid $36 million and $8 million related to the additional costs in October 2021 and September 2022, respectively. At December 31, 2022, the remaining estimated payments of approximately $133 million and $8 million are included in Other current liabilities and Other deferred liabilities and credits, respectively, and at December 31, 2021, the remaining payments of approximately $17 million and $128 million are included in Other current liabilities and Other deferred liabilities and credits, respectively, in the Consolidated Balance Sheet. 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. Auction 110 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 | 12 Months Ended |
Dec. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Note 8 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. December 31, 2022 2021 (Dollars in millions) Equity method investments: Capital contributions, loans, advances and adjustments $ 104 $ 104 Cumulative share of income 2,570 2,417 Cumulative share of distributions (2,235) (2,090) Total equity method investments 439 431 Measurement alternative method investments 4 8 Investments recorded using the net asset value practical expedient 9 — Total investments in unconsolidated entities $ 452 $ 439 The following tables, which are based on unaudited information provided in part by third parties, summarize the combined assets, liabilities and equity, and results of operations of UScellular’s equity method investments: December 31, 2022 2021 (Dollars in millions) Assets Current $ 1,071 $ 1,223 Noncurrent 6,431 6,129 Total assets $ 7,502 $ 7,352 Liabilities and Equity Current liabilities $ 764 $ 707 Noncurrent liabilities 1,241 1,249 Partners’ capital and shareholders’ equity 5,497 5,396 Total liabilities and equity $ 7,502 $ 7,352 Year Ended December 31, 2022 2021 2020 (Dollars in millions) Results of Operations Revenues $ 7,275 $ 7,100 $ 6,677 Operating expenses 5,662 5,130 4,733 Operating income 1,613 1,970 1,944 Other income (expense), net (16) 15 16 Net income $ 1,597 $ 1,985 $ 1,960 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 9 Property, Plant and Equipment Property, plant and equipment in service and under construction, and related accumulated depreciation and amortization, as of December 31, 2022 and 2021, were as follows: December 31, Useful Lives (Years) 2022 2021 (Dollars in millions) Land N/A $ 37 $ 37 Buildings 20 281 293 Leasehold and land improvements 1-30 1,504 1,442 Cell site equipment 7-25 4,247 4,150 Switching equipment 5-8 1,115 1,095 Office furniture and equipment 3-5 209 252 Other operating assets and equipment 3-5 47 47 System development 1-7 1,676 1,479 Work in process N/A 218 261 Total property, plant and equipment, gross 9,334 9,056 Accumulated depreciation and amortization (6,710) (6,450) Total property, plant and equipment, net $ 2,624 $ 2,606 Depreciation and amortization expense totaled $682 million, $662 million and $669 million in 2022, 2021 and 2020, respectively. In 2022, 2021 and 2020, (Gain) loss on asset disposals, net included charges of $19 million, $23 million and $25 million, respectively, related to disposals of assets from service in the normal course of business. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 10 Leases Lessee Agreements UScellular’s most significant leases are for land and tower spaces, network facilities, retail spaces, and offices. Nearly all of UScellular’s leases are classified as operating leases, although it does have a small number of finance leases. UScellular has agreements with both lease and nonlease components, which are accounted for separately. As part of the present value calculation for the lease liabilities, UScellular uses an incremental borrowing rate as the rates implicit in the leases are not readily determinable. The incremental borrowing rates used for lease accounting are based on UScellular's unsecured rates, adjusted to approximate the rates at which UScellular would be required to borrow on a collateralized basis over a term similar to the recognized lease term. UScellular applies the incremental borrowing rates to lease components using a portfolio approach based upon the length of the lease term. The cost of nonlease components in UScellular’s lease portfolio (e.g., utilities and common area maintenance) are not typically predetermined at lease commencement and are expensed as incurred at their relative standalone price. Variable lease expense occurs when, subsequent to the lease commencement, lease payments are made that were not originally included in the lease liability calculation. UScellular’s variable lease payments are primarily a result of leases with escalations that are tied to an index. The incremental changes due to the index changes are recorded as variable lease expense and are not included in the right-of-use assets or lease liabilities. The identified lease term determines the periods to which expense is allocated and is also utilized in the right-of-use asset and liability calculations. Many of UScellular’s leases include renewal and early termination options. At lease commencement, the lease terms include options to extend the lease when UScellular is reasonably certain that it will exercise the options. The lease terms do not include early termination options unless UScellular is reasonably certain to exercise the options. UScellular has applied the portfolio approach in cases where asset classes have similar lease characteristics including tower space, retail, and certain ground lease asset classes. The following table shows the components of lease cost included in the Consolidated Statement of Operations: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Operating lease cost $ 188 $ 181 $ 171 Variable lease cost 11 10 10 Total $ 199 $ 191 $ 181 The following table shows supplemental cash flow information related to lease activities: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 185 $ 183 $ 169 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 113 $ 182 $ 155 The table below shows a weighted-average analysis for lease terms and discount rates for operating leases: December 31, 2022 2021 Weighted Average Remaining Lease Term 12 years 12 years Weighted Average Discount Rate 3.9 % 3.8 % The maturities of lease liabilities are as follows: Operating Leases (Dollars in millions) 2023 $ 166 2024 163 2025 138 2026 106 2027 84 Thereafter 654 Total lease payments 1 $ 1,311 Less: Imputed interest 335 Present value of lease liabilities $ 976 1 Lease payments exclude $41 million of legally binding lease payments for leases signed but not yet commenced. Lessor Agreements UScellular's most significant lessor leases are for tower space. All of UScellular’s lessor leases are classified as operating leases. A lease is generally present in a contract if the lessee controls the use of identified property, plant, or equipment for a period of time in exchange for consideration. UScellular’s lessor agreements with lease and nonlease components are generally accounted for separately. The identified lease term determines the periods to which revenue is allocated over the term of the lease. Many of UScellular’s leases include renewal and early termination options. At lease commencement, lease terms include options to extend the lease when UScellular is reasonably certain that lessees will exercise the options. Lease terms would not include periods after the date of a termination option that lessees are reasonably certain to exercise. Variable lease income occurs when, subsequent to the lease commencement, lease payments are received that were not originally included in the lease receivable calculation. UScellular’s variable lease income is primarily a result of leases with escalations that are tied to an index. The incremental increases due to the index changes are recorded as variable lease income. The following table shows the components of lease income which are included in Service revenues in the Consolidated Statement of Operations: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Operating lease income $ 93 $ 83 $ 77 The maturities of expected lease payments to be received are as follows: Operating Leases (Dollars in millions) 2023 $ 81 2024 74 2025 56 2026 38 2027 20 Thereafter 27 Total future lease maturities $ 296 |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligations | Note 11 Asset Retirement Obligations UScellular is subject to asset retirement obligations associated with its leased cell sites, switching office sites, retail store sites and office locations. Asset retirement obligations generally include obligations to restore leased land, towers, retail store and office premises to their pre-lease conditions. These obligations are included in Other deferred liabilities and credits in the Consolidated Balance Sheet. In 2022 and 2021, UScellular performed a review of the assumptions and estimated future costs related to asset retirement obligations. The results of the review and other changes in asset retirement obligations during 2022 and 2021, were as follows: 2022 2021 (Dollars in millions) Balance at beginning of year $ 315 $ 249 Additional liabilities accrued 4 9 Revisions in estimated cash outflows 11 42 Disposition of assets (1) (1) Accretion expense 17 16 Balance at end of year $ 346 $ 315 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 12 Debt Revolving Credit Agreement At December 31, 2022, UScellular had a revolving credit agreement available for general corporate purposes. Amounts under the revolving credit agreement may be borrowed, repaid and reborrowed from time to time until maturity in July 2026. The following table summarizes the revolving credit agreement as of December 31, 2022: (Dollars in millions) Maximum borrowing capacity $ 300 Letters of credit outstanding $ — Amount borrowed $ — Amount available for use $ 300 Borrowings under the revolving credit agreement bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 1.60%. UScellular may select a borrowing period of either one, two, three or six months (or other period of twelve months or less if requested by UScellular and approved by the lenders). UScellular’s credit spread and commitment fees on its revolving credit agreement may be subject to increase if its current credit rating from nationally recognized credit rating agencies is lowered, and may be subject to decrease if the rating is raised. During 2022, UScellular borrowed and repaid $75 million under its revolving credit agreeme nt. Term Loan Agreements At December 31, 2022, UScellular had senior term loan credit agreements available for general corporate purposes. The following table summarizes the term loan credit agreements as of December 31, 2022: Term Loan 1 Term Loan 2 Term Loan 3 Total (Dollars in millions) Maximum borrowing capacity $ 300 $ 300 $ 200 $ 800 Amount borrowed and outstanding $ 300 $ 296 $ 200 $ 796 Amount borrowed and repaid $ — $ 4 $ — $ 4 Amount available for use $ — $ — $ — $ — Interest rate SOFR plus 1.60% SOFR plus 2.10% SOFR plus 2.60% Maturity date July 2026 July 2028 July 2031 Quarterly installments $2 million from March 2023 to December 2023; $4 million from March 2024 to December 2025; $8 million from March 2026 to maturity date $0.75 million from December 2021 to maturity date $0.5 million from December 2022 to September 2026; $1 million from December 2026 to maturity date In 2022, UScellular borrowed $500 million under the term loan agreements. 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) imported equipment, 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 2022, UScellular borrowed $150 million, which is the full amount available under the agreement. Receivables Securitization Agreement At December 31, 2022, UScellular, through its subsidiaries, had a $450 million receivables securitization agreement for securitized borrowings using its equipment installment receivables for general corporate purposes. Amounts under the receivables securitization agreement may be borrowed, repaid and reborrowed from time to time until maturity in March 2024. Unless the agreement is amended to extend the maturity date, repayments based on receivable collections commence in April 2024. The outstanding borrowings bear interest at floating rates. During 2022, UScellular repaid $250 million and borrowed $75 million under the agreement. As of December 31, 2022, the outstanding borrowings under the agreement were $275 million and the unused borrowing capacity under the agreement was $175 million, subject to sufficient collateral to satisfy the asset borrowing base provisions of the agreement. As of December 31, 2022, the USCC Master Note Trust held $447 million of assets pledged as collateral for the receivables securitization agreement. In connection with entering into the receivables securitization agreement in 2017, UScellular formed a wholly-owned subsidiary, USCC Master Note Trust (Trust), which qualifies as a bankruptcy remote entity. Under the terms of the agreement, UScellular, through its subsidiaries, transfers eligible equipment installment receivables to the Trust. The Trust then utilizes the transferred assets as collateral for notes payables issued to third party financial institutions. Since UScellular retains effective control of the transferred assets in the Trust, any activity associated with this receivables securitization agreement will be treated as a secured borrowing. Therefore, UScellular will continue to report equipment installment receivables and any related balances on the Consolidated Balance Sheet. Cash received from borrowings under the receivables securitization agreement will be reported as Debt. Refer to Note 14 — Variable Interest Entities for additional information. In February 2023, UScellular borrowed $25 million under the receivables securitization agreement. Repurchase Agreement In January 2022, UScellular, through a subsidiary (the repo subsidiary), entered into a repurchase agreement to borrow up to $200 million, subject to the availability of eligible equipment installment plan receivables and the agreement of the lender. The transaction form involves the sale of receivables by the repo subsidiary and the commitment to repurchase at the end of the applicable repurchase term, which may extend up to one month. The transaction is accounted for as a one-month secured borrowing. The outstanding borrowings bear interest at a rate of SOFR plus 1.25%. Although the lender holds a security interest in the receivables, the repo subsidiary retains effective control and collection risk of the receivables, and therefore, any activity associated with the repurchase agreement will be treated as a secured borrowing. UScellular will continue to report equipment installment plan receivables and any related balances on the Consolidated Balance Sheet. During 2022, the repo subsidiary borrowed $110 million and repaid $50 million under the repurchase agreement. As of December 31, 2022, the outstanding borrowings under the agreement were $60 million and the unused borrowing capacity was $140 million. The outstanding borrowings are included in Other current liabilities in the December 31, 2022 Consolidated Balance Sheet. As of December 31, 2022 UScellular held $524 million of assets available for inclusion in the repurchase facility; these assets are distinct from the assets held by the USCC Master Note Trust for UScellular's receivables securitization agreement. In January 2023, UScellular amended the repurchase agreement to extend the expiration date to January 2024. The outstanding borrowings will bear interest at a rate of the lender's cost of funds (which has historically tracked closely to SOFR) plus 1.35%. There were no significant changes to other terms of the repurchase agreement. Financial Covenants and Other The revolving credit agreement, term loan agreements, export credit financing agreement and receivables securitization agreement require UScellular to comply with certain affirmative and negative covenants, which include certain financial covenants. In particular, under these agreements, UScellular is required to maintain the Consolidated Interest Coverage Ratio at a level not lower than 3.00 to 1.00 as of the end of any fiscal quarter. UScellular also is required to maintain the Consolidated Leverage Ratio at a level not to exceed 3.75 to 1.00 as of the end of any fiscal quarter. UScellular believes that it was in compliance as of December 31, 2022 with all such financial covenants. In connection with the revolving credit agreement, term loan agreements and export credit financing agreement, TDS and UScellular entered into subordination agreements together with the administrative agents for the lenders under each agreement. Pursuant to these subordination agreements, (a) any consolidated funded indebtedness from UScellular to TDS will be unsecured and (b) any (i) consolidated funded indebtedness from UScellular to TDS (other than “refinancing indebtedness” as defined in the subordination agreements) in excess of $105 million and (ii) refinancing indebtedness in excess of $250 million will be subordinated and made junior in right of payment to the prior payment in full of obligations to the lenders under each agreement. As of December 31, 2022, UScellular had no outstanding consolidated funded indebtedness or refinancing indebtedness that was subordinated to each agreement pursuant to the subordination agreements. Certain UScellular wholly-owned subsidiaries have jointly and severally unconditionally guaranteed the payment and performance of the obligations of UScellular under the revolving credit agreement, term loan agreements and export credit agreement. Other subsidiaries that meet certain criteria will be required to provide a similar guaranty in the future. UScellular entered into a performance guaranty whereby UScellular guarantees the performance of certain wholly-owned subsidiaries under the receivables securitization agreement and repurchase agreement. Other Long-Term Debt Long-term debt as of December 31, 2022 and 2021, was as follows: December 31, 2022 December 31, 2021 Issuance date Maturity date Call date (any time on or after) Principal Amount Less Total Principal Amount Less Unamortized discount and debt issuance costs Total (Dollars in millions) Unsecured Senior Notes 6.70% Dec 2003 Dec 2033 Dec 2003 $ 544 $ 11 $ 533 $ 544 $ 12 $ 532 6.25% Aug 2020 Sep 2069 Sep 2025 500 17 483 500 17 483 5.50% Dec 2020 Mar 2070 Mar 2026 500 17 483 500 17 483 5.50% May 2021 Jun 2070 Jun 2026 500 16 484 500 16 484 Term Loans 796 6 790 299 3 296 EIP Securitization 275 — 275 450 — 450 Export Credit Financing 150 1 149 — — — Finance lease obligations 3 — 3 3 — 3 Total long-term debt $ 3,268 $ 68 $ 3,200 $ 2,796 $ 65 $ 2,731 Long-term debt, current $ 13 $ 3 Long-term debt, noncurrent $ 3,187 $ 2,728 UScellular redeemed $917 million of outstanding Senior Notes in 2021. At time of redemption, $31 million of interest expense was recorded related to unamortized debt issuance costs for the notes. The notes were redeemed at a price of 100% of the principal amount, including accrued and unpaid interest to the redemption date. UScellular may redeem its 6.25% Senior Notes, 5.5% March 2070 Senior Notes and 5.5% June 2070 Senior Notes, in whole or in part at any time after the respective call date, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest. UScellular may redeem the 6.7% Senior Notes, in whole or in part, at any time prior to maturity at a redemption price equal to the greater of (a) 100% of the principal amount of such notes, plus accrued and unpaid interest, or (b) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 30 basis points. Interest on the Senior Notes outstanding at December 31, 2022, is payable quarterly, with the exception of the 6.7% Senior Notes for which interest is payable semi-annually. The annual requirements for principal payments on long-term debt are approximately $13 million, $20 million, $20 million, $268 million and $158 million for the years 2023 through 2027, respectively. These amounts do not include payments on the $275 million of outstanding borrowings under the receivables securitization agreement. If the maturity date of the facility is not extended, principal repayments begin in April 2024. Principal repayments are not scheduled but are instead based on actual receivable collections. The covenants associated with UScellular’s long-term debt obligations, among other things, restrict UScellular’s ability, subject to certain exclusions, to incur additional liens, enter into sale and leaseback transactions, and sell, consolidate or merge assets. UScellular’s long-term debt notes do not contain any provisions resulting in acceleration of the maturities of outstanding debt in the event of a change in UScellular’s credit rating. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 Commitments and Contingencies Indemnifications UScellular enters into agreements in the normal course of business that provide for indemnification of counterparties. The terms of the indemnifications vary by agreement. The events or circumstances that would require UScellular to perform under these indemnities are transaction specific; however, these agreements may require UScellular to indemnify the counterparty for costs and losses incurred from litigation or claims arising from the underlying transaction. UScellular is unable to estimate the maximum potential liability for these types of indemnifications as the amounts are dependent on the outcome of future events, the nature and likelihood of which cannot be determined at this time. Historically, UScellular has not made any significant indemnification payments under such agreements. Legal Proceedings UScellular is involved or may be involved from time to time in legal proceedings before the FCC, other regulatory authorities, and/or various state and federal courts. If UScellular believes that a loss arising from such legal proceedings is probable and can be reasonably estimated, an amount is accrued in the financial statements for the estimated loss. If only a range of loss can be determined, the best estimate within that range is accrued; if none of the estimates within that range is better than another, the low end of the range is accrued. The assessment of the expected outcomes of legal proceedings is a highly subjective process that requires judgments about future events. The legal proceedings are reviewed at least quarterly to determine the adequacy of accruals and related financial statement disclosures. The ultimate outcomes of legal proceedings could differ materially from amounts accrued in the financial statements. UScellular had no significant accruals with respect to legal proceedings and unasserted claims as of December 31, 2022 and 2021. In April 2018, the United States Department of Justice (DOJ) notified UScellular and its parent, TDS, that it was conducting inquiries of UScellular and TDS under the federal False Claims Act relating to UScellular’s participation in wireless spectrum license auctions 58, 66, 73 and 97 conducted by the FCC. UScellular is/was a limited partner in several limited partnerships which qualified for the 25% bid credit in each auction. The investigation arose from civil actions under the Federal False Claims Act brought by private parties in the U.S. District Court for the Western District of Oklahoma. In November and December 2019, following the DOJ’s investigation, the DOJ informed UScellular and TDS that it would not intervene in the above-referenced actions. Subsequently, the private party plaintiffs filed amended complaints in both actions in the U.S. District Court for the Western District of Oklahoma and are continuing the action on their own. In July 2020, these actions were transferred to the U.S. District Court for the District of Columbia. UScellular believes that its arrangements with the limited partnerships and the limited partnerships’ participation in the FCC auctions complied with applicable law and FCC rules. At this time, UScellular cannot predict the outcome of any proceeding. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Note 14 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 UScellular’s Form 10-K for the year ended December 31, 2022. UScellular formed USCC EIP LLC (Seller/Sub-Servicer), USCC Receivables Funding LLC (Transferor) and the 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. Refer to Note 12 — Debt, Receivables Securitization Agreement for additional details regarding the securitization agreement for which these entities were established. 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. December 31, 2022 2021 (Dollars in millions) Assets Cash and cash equivalents $ 29 $ 22 Accounts receivable 701 693 Inventory, net 4 2 Other current assets 36 44 Licenses 640 639 Property, plant and equipment, net 135 124 Operating lease right-of-use assets 45 47 Other assets and deferred charges 481 383 Total assets $ 2,071 $ 1,954 Liabilities Current liabilities $ 95 $ 30 Long-term operating lease liabilities 40 41 Other deferred liabilities and credits 31 25 Total liabilities 1 $ 166 $ 96 1 Total liabilities does not include amounts borrowed under the receivables securitization agreement. See Note 12 — 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 $4 million at both December 31, 2022 and 2021, 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 $282 million, $36 million and $111 million during 2022, 2021 and 2020, respectively; of which $249 million in 2022 and $83 million in 2020 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. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Note 15 Noncontrolling Interests UScellular’s consolidated financial statements include certain noncontrolling interests that meet the GAAP definition of mandatorily redeemable financial instruments. These mandatorily redeemable noncontrolling interests represent interests held by third parties in consolidated partnerships, where the terms of the underlying partnership agreement provide for a defined termination date at which time the assets of the subsidiary are to be sold, the liabilities are to be extinguished and the remaining net proceeds are to be distributed to the noncontrolling interest holders and UScellular in accordance with the respective partnership agreements. The termination dates of these mandatorily redeemable noncontrolling interests range from 2085 to 2092. The estimated aggregate amount that would be due and payable to settle all of these noncontrolling interests, assuming an orderly liquidation of the finite-lived consolidated partnerships on December 31, 2022, net of estimated liquidation costs, is $30 million. This amount excludes redemption amounts recorded in Noncontrolling interests with redemption features in the Consolidated Balance Sheet. The estimate of settlement value was based on certain factors and assumptions which are subjective in nature. Changes in those factors and assumptions could result in a materially larger or smaller settlement amount. The corresponding carrying value of the mandatorily redeemable noncontrolling interests in finite-lived consolidated partnerships at December 31, 2022, was $14 million, and is included in Noncontrolling interests in the Consolidated Balance Sheet. The excess of the aggregate settlement value over the aggregate carrying value of these mandatorily redeemable noncontrolling interests is due primarily to the unrecognized appreciation of the noncontrolling interest holders’ share of the underlying net assets in the consolidated partnerships. Neither the noncontrolling interest holders’ share, nor UScellular’s share, of the appreciation of the underlying net assets of these subsidiaries is reflected in the consolidated financial statements. |
Common Shareholders' Equity
Common Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Common Shareholders' Equity | Note 16 Common Shareholders’ Equity Series A Common Shares Series A Common Shares are convertible on a share-for-share basis into Common Shares. In matters other than the election of directors, each Series A Common Share is entitled to ten votes per share, compared to one vote for each Common Share. The Series A Common Shares are entitled to elect 75% of the directors (rounded down), and the Common Shares elect 25% of the directors (rounded up). As of December 31, 2022, a majority of UScellular’s outstanding Common Shares and all of UScellular’s outstanding Series A Common Shares were held by TDS. Common Share Repurchase Program In November 2009, UScellular announced by Form 8-K that the Board of Directors of UScellular 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. In December 2016, the UScellular Board amended this authorization to provide that, beginning on January 1, 2017, the authorized repurchase amount with respect to a particular year will be any amount from zero to 1,300,000 Common Shares, as determined by the Pricing Committee of the Board of Directors, and that if the Pricing Committee did not specify an amount for any year, such amount would be zero for such year. The Pricing Committee has not specified any increase in the authorization since that time. The Pricing Committee also was authorized to decrease the cumulative amount of the authorization at any time, but has not taken any action to do so at this time. As of December 31, 2022, the total cumulative amount of Common Shares authorized to be purchased is 1,927,000. The authorization provides that share repurchases will be made pursuant to open market purchases, block purchases, private purchases, or otherwise, depending on market prices and other conditions. This authorization does not have an expiration date. Tax-Deferred Savings Plan At December 31, 2022, UScellular has reserved 994,000 Common Shares for issuance under the TDS Tax-Deferred Savings Plan, a qualified profit‑sharing plan pursuant to Sections 401(a) and 401(k) of the Internal Revenue Code. Participating employees have the option of investing their contributions in a UScellular Common Share fund, a TDS Common Share fund or certain unaffiliated funds. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | Note 17 Stock-Based Compensation UScellular has established the following stock‑based compensation plans: Long-Term Incentive Plans and a Non-Employee Director compensation plan. Under the UScellular Long-Term Incentive Plans, UScellular may grant fixed and performance-based incentive and non-qualified stock options, restricted stock, restricted stock units, and deferred compensation stock unit awards to key employees. At December 31, 2022, the only types of awards outstanding are fixed non-qualified stock option awards, restricted stock unit awards, performance share awards and deferred compensation stock unit awards. Under the Non-Employee Director compensation plan, UScellular may grant Common Shares to members of the Board of Directors who are not employees of UScellular or TDS. At December 31, 2022, UScellular had reserved 18,037,000 Common Shares for equity awards granted and to be granted under the Long-Term Incentive Plans and 62,000 Common Shares for issuance under the Non-Employee Director compensation plan. UScellular uses treasury stock to satisfy requirements for Common Shares issued pursuant to its various stock-based compensation plans. Long-Term Incentive Plans – Restricted Stock Units Restricted stock unit awards granted to key employees generally vest after three years. The restricted stock unit awards currently outstanding were granted in 2020, 2021 and 2022 and will vest in 2023, 2024 and 2025, respectively. UScellular estimates the fair value of restricted stock units based on the closing market price of UScellular shares on the date of grant. The fair value is then recognized as compensation cost on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. A summary of UScellular nonvested restricted stock units and changes during 2022 is presented in the table below: Common Restricted Stock Units Number Weighted Average Grant Date Fair Value Nonvested at December 31, 2021 1,601,000 $ 35.57 Granted 881,000 $ 30.35 Vested (321,000) $ 45.70 Forfeited (161,000) $ 33.10 Nonvested at December 31, 2022 2,000,000 $ 31.84 The total fair value of restricted stock units that vested during 2022, 2021 and 2020 was $9 million, $22 million and $20 million, respectively. The weighted average grant date fair value per share of the restricted stock units granted in 2022, 2021 and 2020 was $30.35, $36.68 and $29.18, respectively. Long-Term Incentive Plans – Performance Share Units Beginning in 2017, UScellular granted performance share units to key employees. The performance share units generally vest after three years. Beginning with the 2021 grants, each recipient may be entitled to shares of UScellular common stock equal to 0% to 200% of a communicated target award depending on the achievement of a predetermined performance based operating target over the performance period, which is generally a three-year period beginning on January 1 in the year of grant to December 31 of the third year. The performance-based operating target for the 2021 and 2022 grants is Return on Capital. Prior to the 2021 grants, each recipient was entitled to shares of UScellular common stock equal to 50% to 200% of a communicated target award depending on the achievement of predetermined performance-based operating targets over the performance period, which was generally a one-year period beginning on January 1 in the year of grant to December 31 in the year of grant. The remaining time through the end of the vesting period is considered the “time-based period”. Performance-based operating targets for grants made in 2020 included Consolidated Total Service Revenues, Consolidated Operating Cash Flow, Consolidated Capital Expenditures and Postpaid Handset Voluntary Defections; and for grants made prior to 2020 included Simple Free Cash Flow, Consolidated Total Operating Revenues and Postpaid Handset Voluntary Defections. Grants made prior to 2021 are subject to vesting during the time-based period and their performance share unit award agreements provide that in no event shall the awards be less than 50% of the target opportunity as of their grant dates. The performance share units currently outstanding were granted in 2020, 2021 and 2022 and will vest in 2023, 2024 and 2025, respectively. Additionally, UScellular granted performance share units during 2020 to a newly appointed President and Chief Executive Officer. The recipient may be entitled to shares of UScellular common stock equal to 100% of the communicated target award depending on the achievement of predetermined performance-based operating targets over the performance period, which is any two calendar-year period commencing no earlier than January 1, 2021 and ending no later than December 31, 2026. Performance-based operating targets include Average Total Revenue Growth and Average Annual Return on Capital. If one, or both, of the performance targets are not satisfied, the award will be forfeited. UScellular estimates the fair value of performance share units using UScellular’s closing stock price on the date of grant. An estimate of the number of performance share units expected to vest based upon achieving the performance-based operating targets is made and the aggregate fair value is expensed on a straight-line basis over the requisite service period. Each reporting period, during the performance period, the estimate of the number of performance share units expected to vest is reviewed and stock compensation expense is adjusted as appropriate to reflect the revised estimate of the aggregate fair value of the performance share units expected to vest. A summary of UScellular's nonvested performance share units and changes during 2022 is presented in the table below: Common Performance Share Units Number Weighted Average Grant Date Fair Value Nonvested at December 31, 2021 1,049,000 $ 35.17 Granted 487,000 $ 31.35 Vested (183,000) $ 44.44 Forfeited (105,000) $ 32.99 Nonvested at December 31, 2022 1,248,000 $ 32.51 The total fair value of performance share units that vested during 2022, 2021 and 2020 was $6 million, $22 million and $11 million, respectively. The weighted average grant date fair value per share of the performance share units granted in 2022, 2021 and 2020 was $31.35, $37.67 and $29.71, respectively. Long-Term Incentive Plans – Stock Options UScellular's last stock option grant occurred in 2016. Stock options outstanding, and the related weighted average exercise price, at December 31, 2022 and 2021 were 348,000 units at $42.41 and 378,000 units at $42.18, respectively. All stock options are exercisable and expire between 2023 and 2026. The aggregate intrinsic value of UScellular stock options exercised in 2021 was less than $1 million. No stock options were exercised in 2022 or 2020. Long-Term Incentive Plans – Deferred Compensation Stock Units Certain UScellular employees may elect to defer receipt of all or a portion of their annual bonuses and to receive a company matching contribution on the amount deferred. All bonus compensation that is deferred by employees electing to participate is immediately vested and is deemed to be invested in UScellular Common Share stock units. Beginning with the 2021 performance year, the amount of UScellular's matching contribution is a 33% match for the amount of their total annual bonus that is deferred into the program. Prior to the 2021 performance year, the amount of UScellular’s matching contribution was a 25% match for amounts deferred up to 50% of their total annual bonus and a 33% match for amounts that exceeded 50% of their total annual bonus. Matching contributions are also deemed to be invested in UScellular Common Share stock units and vest over three years. Compensation of Non-Employee Directors UScellular issued 22,000, 20,000 and 19,000 Common Shares in 2022, 2021 and 2020, respectively, under its Non-Employee Director compensation plan. Stock‑Based Compensation Expense The following table summarizes stock‑based compensation expense recognized during 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Restricted stock unit awards 18 16 21 Performance share unit awards 5 10 10 Awards under Non-Employee Director compensation plan 1 1 1 Total stock-based compensation expense, before income taxes 24 27 32 Income tax benefit (6) (7) (8) Total stock-based compensation expense, net of income taxes $ 18 $ 20 $ 24 The following table provides a summary of the classification of stock-based compensation expense included in the Consolidated Statement of Operations for the years ended: December 31, 2022 2021 2020 (Dollars in millions) Selling, general and administrative expense $ 20 $ 23 $ 28 System operations expense 4 4 4 Total stock-based compensation expense $ 24 $ 27 $ 32 At December 31, 2022, unrecognized compensation cost for all UScellular stock‑based compensation awards was $36 million and is expected to be recognized over a weighted average period of 1.9 years. UScellular’s tax benefits realized from the exercise of stock options and the vesting of other awards totaled $4 million in 2022. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Disclosures | Note 18 Supplemental Cash Flow Disclosures Following are supplemental cash flow disclosures regarding interest paid and income taxes paid. Year Ended December 31, 2022 2021 2020 (Dollars in millions) Interest paid $ 154 $ 143 $ 105 Income taxes paid, net of (refunds received) (116) 6 (38) Following are supplemental cash flow disclosures regarding transactions related to stock-based compensation awards. In certain situations, UScellular withholds shares that are issuable upon the exercise of stock options or the vesting of restricted shares to cover, and with a value equivalent to, the exercise price and/or the amount of taxes required to be withheld from the stock award holder at the time of the exercise or vesting. UScellular then pays the amount of the required tax withholdings to the taxing authorities in cash. Year Ended December 31, 2022 2021 2020 (Dollars in millions) Common Shares withheld 154,000 438,000 376,000 Aggregate value of Common Shares withheld $ 5 $ 16 $ 11 Cash disbursements for payment of taxes $ (5) $ (16) $ (11) Software License Agreements Certain software licenses are recorded as acquisitions of property, plant and equipment and the incurrence of a liability to the extent that the license fees are not fully paid at acquisition, and are treated as non-cash activity in the Consolidated Statement of Cash Flows. Such acquisitions of software licenses that are not reflected as Cash paid for additions to property, plant and equipment were $130 million, $21 million and $19 million for the years ended 2022, 2021 and 2020, respectively. At December 31, 2022, liabilities of $64 million and $76 million related to software license agreements were recorded to Other current liabilities and Other deferred liabilities and credits, respectively, and at December 31, 2021, liabilities of $17 million and $13 million related to software license agreements were recorded to Other current liabilities and Other deferred liabilities and credits, respectively. |
Certain Relationships and Relat
Certain Relationships and Related Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Transactions | Note 19 Certain Relationships and Related Transactions Sidley Austin LLP is the principal law firm of UScellular and its subsidiaries: Walter C.D. Carlson, a director of UScellular, a director and non-executive Chair of the Board of Directors of TDS and a trustee and beneficiary of a voting trust that controls TDS is Senior Counsel at Sidley Austin LLP; and John P. Kelsh, the General Counsel and/or an Assistant Secretary of TDS and UScellular and certain other subsidiaries of TDS is a partner at Sidley Austin LLP. Walter C.D. Carlson does not provide legal services to TDS, UScellular or their subsidiaries. UScellular and its subsidiaries incurred legal costs from Sidley Austin LLP of $5 million, $7 million and $9 million in 2022, 2021 and 2020, respectively. UScellular is billed for all services it receives from TDS, pursuant to the terms of various agreements between it and TDS. These billings are included in UScellular's Systems operations and Selling, general and administrative expenses. Some of these agreements were established at a time prior to UScellular's initial public offering when TDS owned more than 90% of UScellular's outstanding capital stock and may not reflect terms that would be obtainable from an unrelated third party through arms-length negotiations. Billings from TDS and certain of its subsidiaries to UScellular are based on expenses specifically identified to UScellular and on allocations of common expenses. Such allocations are based on the relationship of UScellular's assets, employees, investment in property, plant and equipment and expenses relative to all subsidiaries in the TDS consolidated group. Management believes the method TDS uses to allocate common expenses is reasonable and that all expenses and costs applicable to UScellular are reflected in its financial statements. Billings to UScellular from TDS totaled $96 million, $89 million and $81 million in 2022, 2021 and 2020, respectively. The Audit Committee of the Board of Directors of UScellular is responsible for the review and evaluation of all related-party transactions as such term is defined by the rules of the New York Stock Exchange. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [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. See Note 14 — Variable Interest Entities for additional information relating to UScellular’s VIEs. Intercompany accounts and transactions have been eliminated. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the years ended December 31, 2022, 2021 and 2020 equaled net income. |
Use of Estimates | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (a) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and (b) the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less. Cash and cash equivalents subject to contractual restrictions are classified as restricted cash. Restricted cash primarily consists of balances required under the receivables securitization agreement. See Note 12 — Debt for additional information related to the receivables securitization agreement. |
Accounts Receivable | Accounts receivable consist primarily of amounts owed by customers for wireless services and equipment sales, including sales of certain devices and accessories under installment plans, by agents and third-party distributors for sales of equipment to them and by other wireless carriers whose customers have used UScellular’s wireless systems. |
Allowance for Credit Losses | UScellular estimates expected credit losses related to accounts receivable balances based on a review of available and relevant information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other factors that could affect collectability. Expected credit losses are determined for each pool of accounts receivable balances that share similar risk characteristics. The allowance for credit losses is the best estimate of the amount of expected credit losses related to existing accounts receivable. UScellular does not have any off-balance sheet credit exposure related to its customers. |
Inventory | Inventory consists primarily of wireless devices stated at the lower of cost, which approximates cost determined on a first-in first-out basis, or net realizable value. Net realizable value is determined by reference to the stand-alone selling price. |
Cloud-Hosted Arrangements | UScellular's cloud-hosted arrangements that are service contracts consist primarily of software used to perform administrative functions.These costs are amortized over the period of the service contract, which is generally three |
Licenses | Licenses consist of direct and incremental costs incurred in acquiring Federal Communications Commission (FCC) wireless spectrum licenses that generally provide UScellular with the exclusive right to utilize designated radio spectrum within specific geographic service areas to provide wireless service. Although wireless spectrum licenses are issued for a fixed period of time, generally ten years, or in some cases twelve UScellular performs its annual impairment assessment of wireless spectrum licenses as of November 1 of each year or more frequently if there are events or circumstances that cause UScellular to believe it is more likely than not that the carrying value of wireless spectrum licenses exceeds fair value. For purposes of the 2022 impairment test, UScellular had one unit of accounting as a result of aggregating all developed operating market wireless spectrum licenses (built wireless spectrum licenses) and non-operating market wireless spectrum licenses (unbuilt wireless spectrum licenses), and for the 2021 test, UScellular had eight units of accounting, which consisted of one unit of accounting for built wireless spectrum licenses and seven unbuilt wireless spectrum licenses. UScellular believes this change in units of accounting assessed for impairment better reflects the integrated use of licenses as part of its national interdependent network. This change does not impact the results of the impairment assessment for the current or prior years. |
Investments in Unconsolidated Entities | For its equity method investments for which financial information is readily available, UScellular records its equity in the earnings of the entity in the current period. For its equity method investments for which financial information is not readily available, UScellular records its equity in the earnings of the entity on a one quarter lag basis. |
Property, Plant and Equipment | UScellular’s Property, plant and equipment is stated at the original cost of construction or purchase including capitalized costs of certain taxes, payroll-related expenses, interest and estimated costs to remove the assets. Expenditures that enhance the productive capacity of assets in service or extend their useful lives are capitalized and depreciated. Expenditures for maintenance and repairs of assets in service are charged to System operations expense or Selling, general and administrative expense, as applicable. Retirements and disposals of assets are recorded by removing the original cost of the asset (along with the related accumulated depreciation) from plant in service and recording it, together with proceeds, if any, and net removal costs (removal costs less an applicable accrued asset retirement obligation and salvage value realized), as a gain or loss, as appropriate. Software licenses that qualify for capitalization as an asset are accounted for as the acquisition of a fixed asset and the incurrence of a liability to the extent that the license fees are not fully paid at acquisition. |
Depreciation and Amortization | Depreciation is provided using the straight-line method over the estimated useful life of the related asset. UScellular depreciates leasehold improvement assets over periods ranging from one year to thirty years; such periods approximate the shorter of the assets’ economic lives or the specific lease terms. Useful lives of specific assets are reviewed throughout the year to determine if changes in technology or other business changes would warrant accelerating the depreciation of those specific assets. There were no material changes to the assigned useful lives of the various categories of property, plant and equipment in 2022, 2021 or 2020. However, in 2022, 2021 and 2020, depreciation for certain specific assets was accelerated due to changes in technology. See Note 9 — Property, Plant and Equipment for additional details related to useful lives. |
Impairment of Long-Lived Assets | UScellular reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the assets might be impaired. UScellular has one asset group for purposes of assessing property, plant and equipment for impairment based on the integrated nature of its assets and operations. The cash flows generated by this single interdependent asset group represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. |
Agent Liabilities | UScellular has relationships with agents, which are independent businesses that obtain customers for UScellular. At December 31, 2022 and 2021, UScellular had accrued $53 million and $51 million, respectively, in agent related liabilities. These amounts are included in Other current liabilities in the Consolidated Balance Sheet. |
Debt Issuance Costs | Debt issuance costs include underwriters’ and legal fees and other charges related to issuing and renewing various borrowing instruments and other long-term agreements and are amortized over the respective term of each instrument. Debt issuance costs related to UScellular’s revolving credit agreement and receivables securitization agreement are recorded in Other assets and deferred charges in the Consolidated Balance Sheet. All other debt issuance costs are presented as an offset to the related debt obligation in the Consolidated Balance Sheet. |
Asset Retirement Obligations | UScellular records asset retirement obligations for the fair value of legal obligations associated with asset retirements and a corresponding increase in the carrying amount of the related long-lived asset in the period in which the obligations are incurred. In periods subsequent to initial measurement, UScellular recognizes changes in the liability resulting from the passage of time and updates to the timing or the amount of the original estimates. The liability is accreted to its estimated settlement date value over the period to the estimated settlement date. The change in the carrying amount of the long-lived asset is depreciated over the average remaining life of the related asset. |
Treasury Shares | Common Shares repurchased by UScellular are recorded at cost as treasury shares and result in a reduction of equity. When treasury shares are reissued, UScellular determines the cost using the first-in, first-out cost method. The difference between the cost of the treasury shares and reissuance price is included in Additional paid-in capital or Retained earnings. |
Revenue Recognition | Revenues from sales of equipment and products are recognized when control has transferred to the customer, agent or third-party distributor. Service revenues are recognized as the related service is provided. Significant Judgments As a practical expedient, UScellular groups similar contracts or similar performance obligations together into portfolios of contracts or performance obligations if doing so does not result in a significant difference from accounting for the individual contracts discretely. UScellular applies this grouping method for the following types of transactions: device activation fees, contract acquisition costs, and certain customer promotions. Contract portfolios are recognized over the respective expected customer lives or terms of the contracts. Services are deemed to be highly interrelated when the method and timing of transfer and performance risk are the same. Highly interrelated services that are determined to not be distinct have been grouped into a single performance obligation. Each month of services promised is a performance obligation. The series of monthly service performance obligations promised over the course of the contract are combined into a single performance obligation for purposes of the revenue allocation. UScellular has made judgments regarding transaction price, including but not limited to issues relating to variable consideration, time value of money, returns and non-cash consideration. When determined to be significant in the context of the contract, these items are considered in the valuation of transaction price at contract inception or modification, as appropriate. Multiple Performance Obligations UScellular sells bundled service and equipment offerings. In these instances, UScellular recognizes its revenue based on the relative standalone selling prices for each distinct service or equipment performance obligation, or bundles thereof. UScellular estimates the standalone selling price of the device or accessory to be its retail price excluding discounts. UScellular estimates the standalone selling price of wireless service to be the price offered to customers on month-to-month contracts. Incentives Discounts, incentives, and rebates to agents and end customers that are deemed cash are recognized as a reduction of Operating revenues concurrently with the associated revenue. From time to time, UScellular may offer certain promotions to incentivize customers to switch to, or to purchase additional services from, UScellular. Under these types of promotions, an eligible customer may receive an incentive in the form of a discount off additional services purchased shown as a credit to the customer’s monthly bill. UScellular accounts for the future discounts as material rights at the time of the initial transaction by allocating and deferring revenue based on the relative proportion of the future discounts in comparison to the aggregate initial purchase. The deferred revenue will be recognized as service revenue in future periods. Amounts Collected from Customers and Remitted to Governmental Authorities UScellular records amounts collected from customers and remitted to governmental authorities on a net basis within a liability account if the amount is assessed upon the customer and UScellular merely acts as an agent in collecting the amount on behalf of the imposing governmental authority. If the amount is assessed upon UScellular, then amounts collected from customers 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 $61 million, $66 million and $56 million for 2022, 2021 and 2020, respectively. For contracts that involve multiple element service and equipment offerings, the transaction price is allocated to each performance obligation based on its relative standalone selling price. When consideration is received in advance of delivery of goods or services, a contract liability is recorded. A contract asset is recorded when revenue is recognized in advance of UScellular’s right to receive consideration. Once there is an unconditional right to receive the consideration, UScellular records such amounts as receivables, and then bills the customer under the terms of the respective contract. UScellular recognizes Equipment sales revenue when the equipment is delivered to the customer and a corresponding contract asset or liability is recorded for the difference between the amount of revenue recognized and the amount billed to the customer in cases where discounts are offered. The contract asset or liability is reduced over the contract term as service is provided and billed to the customer. |
Advertising Costs | UScellular expenses advertising costs as incurred. Advertising costs totaled $171 million, $184 million and $196 million in 2022, 2021 and 2020, respectively. |
Income Taxes | UScellular is included in a consolidated federal income tax return with other members of the TDS consolidated group. For financial statement purposes, UScellular and its subsidiaries calculate their income, income taxes and credits as if they comprised a separate affiliated group. Under a tax allocation agreement between TDS and UScellular, UScellular remits its applicable income tax payments to and receives applicable tax refunds from TDS. UScellular had no tax receivable balance with TDS as of December 31, 2022, and a receivable balance of $123 million as of December 31, 2021. In January 2022, UScellular received an income tax refund of $123 million from TDS related to the 2020 net operating loss carryback enabled by the CARES Act.Deferred taxes are computed using the liability method, whereby deferred tax assets are recognized for future deductible temporary differences and operating loss carryforwards, and deferred tax liabilities are recognized for future taxable temporary differences. Both deferred tax assets and liabilities are measured using the enacted tax rates in effect when the temporary differences are expected to reverse. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. UScellular evaluates income tax uncertainties, assesses the probability of the ultimate settlement with the applicable taxing authority and records an amount based on that assessment. Deferred taxes are reported as a net non-current asset or liability by jurisdiction. Any corresponding valuation allowance to reduce the amount of deferred tax assets is also recorded as non-current. |
Stock-Based Compensation and Other Plans | UScellular has established a long-term incentive plan and a non-employee director compensation plan. These plans are considered compensatory plans and, therefore, recognition of costs for grants made under these plans is required.UScellular recognizes stock compensation expense based upon the fair value of the specific awards granted using established valuation methodologies. The amount of stock compensation cost recognized on either a straight-line basis or graded attribution method is based on the portion of the award that is expected to vest over the requisite service period, which generally represents the vesting period. Stock-based compensation cost recognized has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Defined Contribution Plans | UScellular participates in a qualified noncontributory defined contribution pension plan sponsored by TDS; such plan provides pension benefits for the employees of UScellular and its subsidiaries. Under this plan, pension costs are calculated separately for each participant and are funded annually. Pension costs were $12 million, $12 million and $12 million in 2022, 2021 and 2020, respectively.UScellular also participates in a defined contribution retirement savings plan (401(k) plan) sponsored by TDS. Total costs incurred for UScellular’s contributions to the 401(k) plan were $15 million, $15 million and $15 million in 2022, 2021 and 2020, respectively. |
Lessee Agreements | A lease is generally present in a contract if the lessee controls the use of identified property, plant or equipment for a period of time in exchange for consideration. See Note 10 — Leases for additional details related to leases. UScellular’s most significant leases are for land and tower spaces, network facilities, retail spaces, and offices. Nearly all of UScellular’s leases are classified as operating leases, although it does have a small number of finance leases. UScellular has agreements with both lease and nonlease components, which are accounted for separately. As part of the present value calculation for the lease liabilities, UScellular uses an incremental borrowing rate as the rates implicit in the leases are not readily determinable. The incremental borrowing rates used for lease accounting are based on UScellular's unsecured rates, adjusted to approximate the rates at which UScellular would be required to borrow on a collateralized basis over a term similar to the recognized lease term. UScellular applies the incremental borrowing rates to lease components using a portfolio approach based upon the length of the lease term. The cost of nonlease components in UScellular’s lease portfolio (e.g., utilities and common area maintenance) are not typically predetermined at lease commencement and are expensed as incurred at their relative standalone price. Variable lease expense occurs when, subsequent to the lease commencement, lease payments are made that were not originally included in the lease liability calculation. UScellular’s variable lease payments are primarily a result of leases with escalations that are tied to an index. The incremental changes due to the index changes are recorded as variable lease expense and are not included in the right-of-use assets or lease liabilities. |
Lessor Agreements | UScellular's most significant lessor leases are for tower space. All of UScellular’s lessor leases are classified as operating leases. A lease is generally present in a contract if the lessee controls the use of identified property, plant, or equipment for a period of time in exchange for consideration. UScellular’s lessor agreements with lease and nonlease components are generally accounted for separately. The identified lease term determines the periods to which revenue is allocated over the term of the lease. Many of UScellular’s leases include renewal and early termination options. At lease commencement, lease terms include options to extend the lease when UScellular is reasonably certain that lessees will exercise the options. Lease terms would not include periods after the date of a termination option that lessees are reasonably certain to exercise. Variable lease income occurs when, subsequent to the lease commencement, lease payments are received that were not originally included in the lease receivable calculation. UScellular’s variable lease income is primarily a result of leases with escalations that are tied to an index. The incremental increases due to the index changes are recorded as variable lease income. |
Legal proceedings | UScellular is involved or may be involved from time to time in legal proceedings before the FCC, other regulatory authorities, and/or various state and federal courts. If UScellular believes that a loss arising from such legal proceedings is probable and can be reasonably estimated, an amount is accrued in the financial statements for the estimated loss. If only a range of loss can be determined, the best estimate within that range is accrued; if none of the estimates within that range is better than another, the low end of the range is accrued. The assessment of the expected outcomes of legal proceedings is a highly subjective process that requires judgments about future events. The legal proceedings are reviewed at least quarterly to determine the adequacy of accruals and related financial statement disclosures. The ultimate outcomes of legal proceedings could differ materially from amounts accrued in the financial statements. |
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 UScellular’s Form 10-K for the year ended December 31, 2022. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [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. December 31, 2022 2021 (Dollars in millions) Cash and cash equivalents $ 273 $ 156 Restricted cash included in Other current assets 35 43 Cash, cash equivalents and restricted cash in the statement of cash flows $ 308 $ 199 |
Implementation costs | Implementation costs related to UScellular's cloud-hosted arrangements, which are recorded in Prepaid expenses and Other assets and deferred charges in the Consolidated Balance Sheet, were as follows: December 31, 2022 2021 (Dollars in millions) Implementation costs, gross $ 89 $ 76 Accumulated amortization (47) (29) Implementation costs, net $ 42 $ 47 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | 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 recognized at a point in time. Year Ended December 31, 2022 2021 2020 (Dollars in millions) Revenues from contracts with customers: Retail service 1,2 $ 2,793 $ 2,757 $ 2,681 Inbound roaming 67 110 152 Other service 1 172 165 157 Service revenues from contracts with customers 3,032 3,032 2,990 Equipment sales 1,044 1,007 970 Total revenues from contracts with customers 3 $ 4,076 $ 4,039 $ 3,960 1 For 2021 and 2020, amounts have been adjusted to reclassify $8 million and $5 million, respectively, of Internet of Things (IoT) and Reseller revenues from Retail service to Other service. 2 During the third quarter of 2021, UScellular recorded a $9 million out-of-period error related to the timing of recognition of regulatory fee billings. This adjustment had the impact of increasing Service revenue by $9 million in 2021. UScellular determined that this adjustment was not material to any of the periods impacted. 3 Revenue line items in this table will not agree to amounts presented in the Consolidated Statement of Operations as the amounts in this table only include revenue resulting from contracts with customers. |
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. December 31, 2022 2021 (Dollars in millions) Contract assets $ 5 $ 7 Contract liabilities $ 349 $ 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 December 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) 2023 $ 268 2024 118 Thereafter 56 Total $ 442 |
Fair Value Measurements (Table)
Fair Value Measurements (Table) | 12 Months Ended |
Dec. 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 December 31, 2022 December 31, 2021 Book Value Fair Value Book Value Fair Value (Dollars in millions) Long-term debt Retail 2 $ 1,500 $ 899 $ 1,500 $ 1,594 Institutional 2 536 395 535 659 Other 2 1,208 1,208 746 746 |
Equipment Installment Plans (Ta
Equipment Installment Plans (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Equipment installment plan receivables | The following table summarizes equipment installment plan receivables. December 31, 2022 2021 (Dollars in millions) Equipment installment plan receivables, gross $ 1,211 $ 1,085 Allowance for credit losses (96) (72) Equipment installment plan receivables, net $ 1,115 $ 1,013 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 646 $ 639 Other assets and deferred charges (Non-current portion) 469 374 Equipment installment plan receivables, net $ 1,115 $ 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: December 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 $ 1,016 $ 98 $ 22 $ 5 $ 1,141 $ 896 $ 94 $ 24 $ 5 $ 1,019 Billed — current 41 5 2 — 48 40 5 1 1 47 Billed — past due 13 6 2 1 22 10 6 2 1 19 Total $ 1,070 $ 109 $ 26 $ 6 $ 1,211 $ 946 $ 105 $ 27 $ 7 $ 1,085 The balance of the equipment installment plan receivables as of December 31, 2022 on a gross basis by year of origination were as follows: 2020 2021 2022 Total (Dollars in millions) Lowest Risk $ 43 $ 303 $ 724 $ 1,070 Lower Risk 3 28 78 109 Slight Risk — 4 22 26 Higher Risk — 1 5 6 Total $ 46 $ 336 $ 829 $ 1,211 |
Equipment installment plans allowance for credit losses | Activity for the years ended December 31, 2022 and 2021, in the allowance for credit losses for equipment installment plan receivables was as follows: 2022 2021 (Dollars in millions) Allowance for credit losses, beginning of year $ 72 $ 78 Bad debts expense 100 38 Write-offs, net of recoveries 1 (76) (44) Allowance for credit losses, end of year $ 96 $ 72 1 Write-offs increased in 2022 as customer payment behavior returned to pre-COVID-19 pandemic levels. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes receivable (payable) | UScellular’s current income taxes balances at December 31, 2022 and 2021, were as follows: December 31, 2022 2021 (Dollars in millions) Federal income taxes receivable $ 4 $ 123 Net state income taxes receivable — — |
Income tax expense (benefit) | Income tax expense (benefit) is summarized as follows: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Current Federal $ 1 $ 2 $ (118) State 3 (23) 5 Deferred Federal 19 49 124 State 14 (8) 6 Total income tax expense (benefit) $ 37 $ 20 $ 17 |
Income tax reconciliation | A reconciliation of UScellular’s income tax expense computed at the statutory rate to the reported income tax expense, and the statutory federal income tax rate to UScellular’s effective income tax rate is as follows: Year Ended December 31, 2022 2021 2020 Amount Rate Amount Rate Amount Rate (Dollars in millions) Statutory federal income tax expense and rate $ 15 21.0 % $ 38 21.0 % $ 52 21.0 % State income taxes, net of federal benefit 1 14 18.9 (25) (14.1) 8 3.4 Change in federal valuation allowance 2 7 9.9 7 3.8 — 0.1 Loss carryback benefit of CARES Act 3 — — — — (49) (19.8) Nondeductible compensation 3 3.6 2 1.3 6 2.6 Tax credits — (0.6) — (0.2) — (0.1) Other differences, net (2) (1.3) (2) (0.4) — (0.6) Total income tax expense (benefit) and rate $ 37 51.5 % $ 20 11.4 % $ 17 6.6 % 1 State income taxes, net of federal benefit, include changes in unrecognized tax benefits as well as adjustments to state valuation allowances. State taxes increased in 2022 due primarily to valuation allowance adjustments. State taxes in 2021 are a net benefit due primarily to the reduction of tax accruals resulting from expirations of state statute of limitations for prior tax years. 2 Change in federal valuation allowance is due primarily to current year interest expense from partnership investments that carryforward but may not be realized. |
Deferred income tax assets and liabilities | Significant components of UScellular’s deferred income tax assets and liabilities at December 31, 2022 and 2021, were as follows: December 31, 2022 2021 1 (Dollars in millions) Deferred tax assets Net operating loss (NOL) carryforwards $ 132 $ 126 Lease liabilities 244 254 Contract liabilities 62 37 Interest expense carryforwards 65 30 Asset retirement obligation 73 64 Other 100 93 Total deferred tax assets 676 604 Less valuation allowance (115) (83) Net deferred tax assets 561 521 Deferred tax liabilities Property, plant and equipment 457 446 Licenses/intangibles 382 330 Partnership investments 172 154 Lease assets 224 232 Other 34 33 Total deferred tax liabilities 1,269 1,195 Net deferred income tax liability $ 708 $ 674 |
Deferred tax valuation allowance | A summary of UScellular’s deferred tax asset valuation allowance is as follows: 2022 2021 2020 (Dollars in millions) Balance at beginning of year $ 83 $ 94 $ 90 Charged to Income tax expense 32 (11) 4 Balance at end of year $ 115 $ 83 $ 94 |
Income tax unrecognized benefits summary | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2022 2021 2020 (Dollars in millions) Unrecognized tax benefits balance at beginning of year $ 35 $ 51 $ 48 Additions for tax positions of current year 5 8 7 Additions for tax positions of prior years 1 — 2 Reductions for tax positions of prior years — (3) — Reductions for settlements of tax positions — (2) — Reductions for lapses in statutes of limitations (6) (19) (6) Unrecognized tax benefits balance at end of year $ 35 $ 35 $ 51 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 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: Year Ended December 31, 2022 2021 2020 (Dollars and shares in millions, except per share amounts) Net income attributable to UScellular shareholders $ 30 $ 155 $ 229 Weighted average number of shares used in basic earnings per share 85 86 86 Effects of dilutive securities 1 1 1 Weighted average number of shares used in diluted earnings per share 86 87 87 Basic earnings per share attributable to UScellular shareholders $ 0.35 $ 1.80 $ 2.66 Diluted earnings per share attributable to UScellular shareholders $ 0.35 $ 1.77 $ 2.62 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Licenses | Activity related to UScellular's Licenses is presented below. 2022 2021 (Dollars in millions) Balance at beginning of year $ 4,088 $ 2,629 Acquisitions 595 1,464 Impairment 1 (3) — Transferred to Assets held for sale 1 (18) Exchanges - Licenses received 1 — Capitalized interest 8 13 Balance at end of year $ 4,690 $ 4,088 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | 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. December 31, 2022 2021 (Dollars in millions) Equity method investments: Capital contributions, loans, advances and adjustments $ 104 $ 104 Cumulative share of income 2,570 2,417 Cumulative share of distributions (2,235) (2,090) Total equity method investments 439 431 Measurement alternative method investments 4 8 Investments recorded using the net asset value practical expedient 9 — Total investments in unconsolidated entities $ 452 $ 439 The following tables, which are based on unaudited information provided in part by third parties, summarize the combined assets, liabilities and equity, and results of operations of UScellular’s equity method investments: December 31, 2022 2021 (Dollars in millions) Assets Current $ 1,071 $ 1,223 Noncurrent 6,431 6,129 Total assets $ 7,502 $ 7,352 Liabilities and Equity Current liabilities $ 764 $ 707 Noncurrent liabilities 1,241 1,249 Partners’ capital and shareholders’ equity 5,497 5,396 Total liabilities and equity $ 7,502 $ 7,352 Year Ended December 31, 2022 2021 2020 (Dollars in millions) Results of Operations Revenues $ 7,275 $ 7,100 $ 6,677 Operating expenses 5,662 5,130 4,733 Operating income 1,613 1,970 1,944 Other income (expense), net (16) 15 16 Net income $ 1,597 $ 1,985 $ 1,960 |
Property, Plant and Equipment (
Property, Plant and Equipment (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment in service and under construction, and related accumulated depreciation and amortization, as of December 31, 2022 and 2021, were as follows: December 31, Useful Lives (Years) 2022 2021 (Dollars in millions) Land N/A $ 37 $ 37 Buildings 20 281 293 Leasehold and land improvements 1-30 1,504 1,442 Cell site equipment 7-25 4,247 4,150 Switching equipment 5-8 1,115 1,095 Office furniture and equipment 3-5 209 252 Other operating assets and equipment 3-5 47 47 System development 1-7 1,676 1,479 Work in process N/A 218 261 Total property, plant and equipment, gross 9,334 9,056 Accumulated depreciation and amortization (6,710) (6,450) Total property, plant and equipment, net $ 2,624 $ 2,606 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Components of lease expense | The following table shows the components of lease cost included in the Consolidated Statement of Operations: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Operating lease cost $ 188 $ 181 $ 171 Variable lease cost 11 10 10 Total $ 199 $ 191 $ 181 |
Supplemental cash flow information related to leases | The following table shows supplemental cash flow information related to lease activities: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 185 $ 183 $ 169 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 113 $ 182 $ 155 |
Schedule of weighted average remaining lease term and weighted average discount rate related to leases | The table below shows a weighted-average analysis for lease terms and discount rates for operating leases: December 31, 2022 2021 Weighted Average Remaining Lease Term 12 years 12 years Weighted Average Discount Rate 3.9 % 3.8 % |
Maturities of lease liabilities | The maturities of lease liabilities are as follows: Operating Leases (Dollars in millions) 2023 $ 166 2024 163 2025 138 2026 106 2027 84 Thereafter 654 Total lease payments 1 $ 1,311 Less: Imputed interest 335 Present value of lease liabilities $ 976 1 Lease payments exclude $41 million of legally binding lease payments for leases signed but not yet commenced. |
Lease income | The following table shows the components of lease income which are included in Service revenues in the Consolidated Statement of Operations: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Operating lease income $ 93 $ 83 $ 77 |
Maturities of expected lease revenues | The maturities of expected lease payments to be received are as follows: Operating Leases (Dollars in millions) 2023 $ 81 2024 74 2025 56 2026 38 2027 20 Thereafter 27 Total future lease maturities $ 296 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Asset Retirement Obligation [Abstract] | |
Asset retirement obligations | In 2022 and 2021, UScellular performed a review of the assumptions and estimated future costs related to asset retirement obligations. The results of the review and other changes in asset retirement obligations during 2022 and 2021, were as follows: 2022 2021 (Dollars in millions) Balance at beginning of year $ 315 $ 249 Additional liabilities accrued 4 9 Revisions in estimated cash outflows 11 42 Disposition of assets (1) (1) Accretion expense 17 16 Balance at end of year $ 346 $ 315 |
Debt (Table)
Debt (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Credit facilities | The following table summarizes the revolving credit agreement as of December 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 December 31, 2022: Term Loan 1 Term Loan 2 Term Loan 3 Total (Dollars in millions) Maximum borrowing capacity $ 300 $ 300 $ 200 $ 800 Amount borrowed and outstanding $ 300 $ 296 $ 200 $ 796 Amount borrowed and repaid $ — $ 4 $ — $ 4 Amount available for use $ — $ — $ — $ — Interest rate SOFR plus 1.60% SOFR plus 2.10% SOFR plus 2.60% Maturity date July 2026 July 2028 July 2031 Quarterly installments $2 million from March 2023 to December 2023; $4 million from March 2024 to December 2025; $8 million from March 2026 to maturity date $0.75 million from December 2021 to maturity date $0.5 million from December 2022 to September 2026; $1 million from December 2026 to maturity date |
Long-term debt | Long-term debt as of December 31, 2022 and 2021, was as follows: December 31, 2022 December 31, 2021 Issuance date Maturity date Call date (any time on or after) Principal Amount Less Total Principal Amount Less Unamortized discount and debt issuance costs Total (Dollars in millions) Unsecured Senior Notes 6.70% Dec 2003 Dec 2033 Dec 2003 $ 544 $ 11 $ 533 $ 544 $ 12 $ 532 6.25% Aug 2020 Sep 2069 Sep 2025 500 17 483 500 17 483 5.50% Dec 2020 Mar 2070 Mar 2026 500 17 483 500 17 483 5.50% May 2021 Jun 2070 Jun 2026 500 16 484 500 16 484 Term Loans 796 6 790 299 3 296 EIP Securitization 275 — 275 450 — 450 Export Credit Financing 150 1 149 — — — Finance lease obligations 3 — 3 3 — 3 Total long-term debt $ 3,268 $ 68 $ 3,200 $ 2,796 $ 65 $ 2,731 Long-term debt, current $ 13 $ 3 Long-term debt, noncurrent $ 3,187 $ 2,728 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 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. December 31, 2022 2021 (Dollars in millions) Assets Cash and cash equivalents $ 29 $ 22 Accounts receivable 701 693 Inventory, net 4 2 Other current assets 36 44 Licenses 640 639 Property, plant and equipment, net 135 124 Operating lease right-of-use assets 45 47 Other assets and deferred charges 481 383 Total assets $ 2,071 $ 1,954 Liabilities Current liabilities $ 95 $ 30 Long-term operating lease liabilities 40 41 Other deferred liabilities and credits 31 25 Total liabilities 1 $ 166 $ 96 1 Total liabilities does not include amounts borrowed under the receivables securitization agreement. See Note 12 — Debt for additional information. |
Stock-Based Compensation (Table
Stock-Based Compensation (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Summary of nonvested restricted stock units | A summary of UScellular nonvested restricted stock units and changes during 2022 is presented in the table below: Common Restricted Stock Units Number Weighted Average Grant Date Fair Value Nonvested at December 31, 2021 1,601,000 $ 35.57 Granted 881,000 $ 30.35 Vested (321,000) $ 45.70 Forfeited (161,000) $ 33.10 Nonvested at December 31, 2022 2,000,000 $ 31.84 |
Summary of nonvested performance share units | A summary of UScellular's nonvested performance share units and changes during 2022 is presented in the table below: Common Performance Share Units Number Weighted Average Grant Date Fair Value Nonvested at December 31, 2021 1,049,000 $ 35.17 Granted 487,000 $ 31.35 Vested (183,000) $ 44.44 Forfeited (105,000) $ 32.99 Nonvested at December 31, 2022 1,248,000 $ 32.51 |
Stock-based compensation | The following table summarizes stock‑based compensation expense recognized during 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Restricted stock unit awards 18 16 21 Performance share unit awards 5 10 10 Awards under Non-Employee Director compensation plan 1 1 1 Total stock-based compensation expense, before income taxes 24 27 32 Income tax benefit (6) (7) (8) Total stock-based compensation expense, net of income taxes $ 18 $ 20 $ 24 |
Stock-based compensation, allocation by financial statement line item | The following table provides a summary of the classification of stock-based compensation expense included in the Consolidated Statement of Operations for the years ended: December 31, 2022 2021 2020 (Dollars in millions) Selling, general and administrative expense $ 20 $ 23 $ 28 System operations expense 4 4 4 Total stock-based compensation expense $ 24 $ 27 $ 32 |
Supplemental Cash Flow Disclo_2
Supplemental Cash Flow Disclosures (Table) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental cash flow disclosures | Following are supplemental cash flow disclosures regarding interest paid and income taxes paid. Year Ended December 31, 2022 2021 2020 (Dollars in millions) Interest paid $ 154 $ 143 $ 105 Income taxes paid, net of (refunds received) (116) 6 (38) |
Stock-based compensation supplemental cash flows | Following are supplemental cash flow disclosures regarding transactions related to stock-based compensation awards. In certain situations, UScellular withholds shares that are issuable upon the exercise of stock options or the vesting of restricted shares to cover, and with a value equivalent to, the exercise price and/or the amount of taxes required to be withheld from the stock award holder at the time of the exercise or vesting. UScellular then pays the amount of the required tax withholdings to the taxing authorities in cash. Year Ended December 31, 2022 2021 2020 (Dollars in millions) Common Shares withheld 154,000 438,000 376,000 Aggregate value of Common Shares withheld $ 5 $ 16 $ 11 Cash disbursements for payment of taxes $ (5) $ (16) $ (11) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) connection in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 USD ($) connection segment unit asset_group | Dec. 31, 2021 USD ($) unit | Dec. 31, 2020 USD ($) | May 04, 1988 | |
Basis of presentation | ||||
Number of connections | connection | 4.7 | |||
Number of reportable segments | segment | 1 | |||
FCC Licenses, period of renewal | 12 years | |||
FCC Licenses, number of accounting units | unit | 1 | 8 | ||
FCC Licenses, number of accounting units, built licenses | unit | 1 | |||
FCC Licenses, number of accounting units, unbuilt licenses | unit | 7 | |||
Asset groups | asset_group | 1 | |||
Agent liability | $ 53 | $ 51 | ||
Advertising costs | 171 | 184 | $ 196 | |
Amortization of implementation costs | $ 18 | 16 | 11 | |
Minimum | ||||
Basis of presentation | ||||
FCC Licenses, period of renewal | 10 years | |||
Amortization period | 3 years | |||
Maximum | ||||
Basis of presentation | ||||
FCC Licenses, period of renewal | 15 years | |||
Amortization period | 5 years | |||
Leasehold and land improvements | Minimum | ||||
Basis of presentation | ||||
Useful life | 1 year | |||
Leasehold and land improvements | Maximum | ||||
Basis of presentation | ||||
Useful life | 30 years | |||
Pension | ||||
Basis of presentation | ||||
Defined contribution cost | $ 12 | 12 | 12 | |
401(k) | ||||
Basis of presentation | ||||
Defined contribution cost | 15 | 15 | $ 15 | |
TDS | ||||
Basis of presentation | ||||
Income taxes receivable | 0 | $ 123 | ||
Increase (Decrease) in Income taxes receivable | $ (123) | |||
UScellular | TDS | ||||
Basis of presentation | ||||
TDS ownership of UScellular | 84% | |||
UScellular | TDS | Minimum | ||||
Basis of presentation | ||||
TDS ownership of UScellular | 90% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 273 | $ 156 | ||
Restricted cash included in Other current assets | 35 | 43 | ||
Cash, cash equivalents and restricted cash in the statement of cash flows | $ 308 | $ 199 | $ 1,291 | $ 291 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Cloud-Hosted Arrangements (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Implementation costs, gross | $ 89 | $ 76 |
Accumulated amortization | (47) | (29) |
Implementation costs, net | $ 42 | $ 47 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |||
Amounts recorded gross in revenues that are billed to customers and remitted to governmental authorities | $ 61 | $ 66 | $ 56 |
Revenue recognized | 176 | ||
Capitalized contract cost | |||
Contract cost assets | 131 | 126 | |
Amortization of contract cost assets | $ 96 | $ 99 | $ 104 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation Of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 4,076 | $ 4,039 | $ 3,960 |
Out-of-period adjustment | |||
Disaggregation of Revenue [Line Items] | |||
Immaterial error correction | During the third quarter of 2021, UScellular recorded a $9 million out-of-period error related to the timing of recognition of regulatory fee billings. This adjustment had the impact of increasing Service revenue by $9 million in 2021. UScellular determined that this adjustment was not material to any of the periods impacted. | ||
Transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 3,032 | $ 3,032 | 2,990 |
Transferred over time | Retail service | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 2,793 | 2,757 | 2,681 |
Transferred over time | Retail service | Out-of-period adjustment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 9 | ||
Transferred over time | Retail service | Revision of Prior Period, Reclassification, Adjustment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | (8) | (5) | |
Transferred over time | Inbound roaming | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 67 | 110 | 152 |
Transferred over time | Other service | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 172 | 165 | 157 |
Transferred over time | Other service | Revision of Prior Period, Reclassification, Adjustment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 8 | 5 | |
Transferred at point in time | Equipment sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 1,044 | $ 1,007 | $ 970 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 5 | $ 7 |
Contract liabilities | $ 349 | $ 243 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation amount | $ 442 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation amount | $ 268 |
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 | $ 118 |
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]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation amount | $ 56 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligation, period |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Book Value | Retail | ||
Financial Instruments | ||
Long-term debt | $ 1,500 | $ 1,500 |
Book Value | Institutional | ||
Financial Instruments | ||
Long-term debt | 536 | 535 |
Book Value | Other | ||
Financial Instruments | ||
Long-term debt | 1,208 | 746 |
Fair Value | Level 2 | Retail | ||
Financial Instruments | ||
Long-term debt | 899 | 1,594 |
Fair Value | Level 2 | Institutional | ||
Financial Instruments | ||
Long-term debt | 395 | 659 |
Fair Value | Level 2 | Other | ||
Financial Instruments | ||
Long-term debt | $ 1,208 | $ 746 |
6.7% Senior Notes | ||
Financial Instruments | ||
Interest rate on debt | 6.70% | |
Interest rate | Minimum | Institutional and Other | ||
Financial Instruments | ||
Fair value assumption, interest rate | 5.38% | 1.31% |
Interest rate | Maximum | Institutional and Other | ||
Financial Instruments | ||
Fair value assumption, interest rate | 8.28% | 4.40% |
Equipment Installment Plans - N
Equipment Installment Plans - Narrative (Details) | Dec. 31, 2022 |
Receivables [Abstract] | |
Past due | 30 days |
Equipment Installment Plans - E
Equipment Installment Plans - EIP Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, gross | $ 1,211 | $ 1,085 |
Allowance for credit losses | (96) | (72) |
Equipment installment plan receivables, net | 1,115 | 1,013 |
Accounts receivable — Customers and agents (Current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | 646 | 639 |
Other assets and deferred charges (Non-current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | $ 469 | $ 374 |
Equipment Installment Plans - G
Equipment Installment Plans - Gross Receivables by Credit Category (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | $ 1,211 | $ 1,085 |
2020 | 46 | |
2021 | 336 | |
2022 | 829 | |
Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 1,141 | 1,019 |
Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 48 | 47 |
Billed | Past Due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 22 | 19 |
Lowest Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 1,070 | 946 |
2020 | 43 | |
2021 | 303 | |
2022 | 724 | |
Lowest Risk | Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 1,016 | 896 |
Lowest Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 41 | 40 |
Lowest Risk | Billed | Past Due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 13 | 10 |
Lower Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 109 | 105 |
2020 | 3 | |
2021 | 28 | |
2022 | 78 | |
Lower Risk | Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 98 | 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 | 26 | 27 |
2020 | 0 | |
2021 | 4 | |
2022 | 22 | |
Slight Risk | Unbilled | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 22 | 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 | 2 | 2 |
Higher Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 6 | 7 |
2020 | 0 | |
2021 | 1 | |
2022 | 5 | |
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 | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for credit losses | ||
Allowance for credit losses, beginning of year | $ 72 | |
Allowance for credit losses, end of year | 96 | $ 72 |
Equipment installment plan receivable | ||
Allowance for credit losses | ||
Allowance for credit losses, beginning of year | 72 | 78 |
Bad debts expense | 100 | 38 |
Write-offs, net of recoveries | (76) | (44) |
Allowance for credit losses, end of year | $ 96 | $ 72 |
Income Taxes - Balances (Detail
Income Taxes - Balances (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax [Line Items] | ||
Income taxes receivable | $ 4 | $ 123 |
Federal | ||
Income Tax [Line Items] | ||
Income taxes receivable | 4 | 123 |
State | ||
Income Tax [Line Items] | ||
Income taxes receivable | $ 0 | $ 0 |
Income Taxes - Expense (Benefit
Income Taxes - Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current | |||
Current federal income tax expense (benefit) | $ 1 | $ 2 | $ (118) |
Current state income tax expense | 3 | (23) | 5 |
Deferred | |||
Deferred federal income tax expense (benefit) | 19 | 49 | 124 |
Deferred state income tax expense (benefit) | 14 | (8) | 6 |
Total income tax expense (benefit) | $ 37 | $ 20 | $ 17 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | |
Other income tax disclosures | |||
Effect of unrecognized tax benefit on income tax expense | $ 28 | $ 41 | $ 28 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | (10) | $ 2 | |
Net accrued interest and penalties | $ 12 | 13 | |
State | |||
Other income tax disclosures | |||
State NOL carryforwards | 2,346 | ||
Deferred income tax asset for State NOL carryforwards | 102 | ||
State interest limitation carryforwards | 350 | ||
Deferred income tax asset for State interest limitation carryforwards | 14 | ||
Federal | |||
Other income tax disclosures | |||
Federal NOL carryforward | 142 | ||
Deferred tax asset for Federal NOL carryforward | 30 | ||
Federal interest limitation carryforwards | 241 | ||
Deferred income tax asset for Federal interest limitation carryforwards | $ 51 |
Income Taxes - Expense Reconcil
Income Taxes - Expense Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Amount | |||
Statutory federal income tax expense | $ 15 | $ 38 | $ 52 |
State income taxes, net of federal benefit | 14 | (25) | 8 |
Change in federal valuation allowance | 7 | 7 | 0 |
Loss carryback benefit of CARES Act | 0 | 0 | (49) |
Nondeductible compensation | 3 | 2 | 6 |
Tax credits | 0 | 0 | 0 |
Other differences, net | (2) | (2) | 0 |
Total income tax expense (benefit) | $ 37 | $ 20 | $ 17 |
Rate | |||
Statutory federal income tax rate | 21% | 21% | 21% |
State income taxes, net of federal benefit | 18.90% | (14.10%) | 3.40% |
Change in federal valuation allowance | 9.90% | 3.80% | 0.10% |
Loss carryback benefit of CARES Act rate | 0% | 0% | (19.80%) |
Nondeductible compensation | 3.60% | 1.30% | 2.60% |
Tax credits | (0.60%) | (0.20%) | (0.10%) |
Other differences, net | (1.30%) | (0.40%) | (0.60%) |
Total income tax rate | 51.50% | 11.40% | 6.60% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Tax (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Net operating loss (NOL) carryforwards | $ 132 | $ 126 |
Lease liabilities | 244 | 254 |
Contract liabilities | 62 | 37 |
Interest expense carryforwards | 65 | 30 |
Asset retirement obligation | 73 | 64 |
Other | 100 | 93 |
Total deferred tax assets | 676 | 604 |
Less valuation allowance | (115) | (83) |
Net deferred tax assets | 561 | 521 |
Deferred tax liabilities | ||
Property, plant and equipment | 457 | 446 |
Licenses/intangibles | 382 | 330 |
Partnership investments | 172 | 154 |
Lease assets | 224 | 232 |
Other | 34 | 33 |
Total deferred tax liabilities | 1,269 | 1,195 |
Net deferred income tax liability | $ 708 | $ 674 |
Income Taxes - Deferred Tax Val
Income Taxes - Deferred Tax Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax valuation allowance, rollfoward | |||
Balance at beginning of year | $ 83 | ||
Balance at end of year | 115 | $ 83 | |
Deferred tax asset valuation allowance | |||
Deferred tax valuation allowance, rollfoward | |||
Balance at beginning of year | 83 | 94 | $ 90 |
Charged to Income tax expense | 32 | (11) | 4 |
Balance at end of year | $ 115 | $ 83 | $ 94 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of unrecognized income tax benefits | |||
Unrecognized tax benefits balance at beginning of year | $ 35 | $ 51 | $ 48 |
Additions for tax positions of current year | 5 | 8 | 7 |
Additions for tax positions of prior years | 1 | 0 | 2 |
Reductions for tax positions of prior years | 0 | (3) | 0 |
Reductions for settlements of tax positions | 0 | (2) | 0 |
Reductions for lapses in statutes of limitations | (6) | (19) | (6) |
Unrecognized tax benefits balance at end of year | $ 35 | $ 35 | $ 51 |
Earnings Per Share - Computatio
Earnings Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share, Basic [Abstract] | |||
Net income attributable to UScellular shareholders | $ 30 | $ 155 | $ 229 |
Weighted average number of shares used in basic earnings per share (in shares) | 85 | 86 | 86 |
Effects of dilutive securities (in shares) | 1 | 1 | 1 |
Weighted average number of shares used in diluted earnings per share (in shares) | 86 | 87 | 87 |
Basic earnings per share attributable to UScellular shareholders | $ 0.35 | $ 1.80 | $ 2.66 |
Diluted earnings per share attributable to UScellular shareholders | $ 0.35 | $ 1.77 | $ 2.62 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Maximum | |||
Earnings per share | |||
Antidilutive securities (in shares) | 1 | 1 | 1 |
Intangible Assets - Schedules (
Intangible Assets - Schedules (Details) - Licenses - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Licenses | ||
Balance at beginning of year | $ 4,088 | $ 2,629 |
Acquisitions | 595 | 1,464 |
Impairment | (3) | 0 |
Transferred to Assets held for sale | 1 | (18) |
Exchanges - Licenses received | 1 | 0 |
Capitalized interest | 8 | 13 |
Balance at end of year | $ 4,690 | $ 4,088 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2024 USD ($) | Dec. 31, 2022 USD ($) license | Dec. 31, 2021 USD ($) license | Dec. 31, 2020 USD ($) | |
Licenses | ||||
Cash paid for licenses | $ 585 | $ 1,302 | $ 171 | |
Auction 107 | ||||
Licenses | ||||
Licenses won | license | 254 | |||
Total winning bid | $ 1,283 | |||
FCC Upfront Payment | $ 30 | |||
Cash paid for licenses | 8 | 36 | ||
Auction 107 | Other current liabilities | ||||
Licenses | ||||
Short-term spectrum license liabilities | 133 | 17 | ||
Auction 107 | Other deferred liabilities and credits | ||||
Licenses | ||||
Long-term spectrum license liabilities | $ 8 | 128 | ||
Auction 107 | Subsequent event | ||||
Licenses | ||||
Cash paid for licenses | $ 185 | |||
Auction 110 | ||||
Licenses | ||||
Licenses won | license | 380 | |||
Total winning bid | $ 580 | |||
FCC Upfront Payment | $ 20 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Equity method investments: | |||||
Capital contributions, loans, advances and adjustments | $ 104 | $ 104 | |||
Cumulative share of income | 2,570 | 2,417 | |||
Cumulative share of distributions | (2,235) | (2,090) | |||
Total equity method investments | 439 | 431 | |||
Measurement alternative method investments | 4 | 8 | |||
Investments recorded using the net asset value practical expedient | 9 | 0 | |||
Total investments in unconsolidated entities | 452 | 439 | |||
Assets | |||||
Current | 1,723 | 1,605 | |||
Total assets | [1] | 11,119 | 10,341 | ||
Liabilities and Equity | |||||
Current liabilities | 1,195 | 903 | |||
Partners’ capital and shareholders’ equity | 4,570 | 4,563 | $ 4,426 | $ 4,210 | |
Total liabilities and equity | [1] | 11,119 | 10,341 | ||
Results of Operations | |||||
Revenues | 4,169 | 4,122 | 4,037 | ||
Operating expenses | 4,100 | 3,952 | 3,864 | ||
Operating income | 69 | 170 | 173 | ||
Net income | 35 | 160 | 233 | ||
Equity Method Investments | |||||
Assets | |||||
Current | 1,071 | 1,223 | |||
Noncurrent | 6,431 | 6,129 | |||
Total assets | 7,502 | 7,352 | |||
Liabilities and Equity | |||||
Current liabilities | 764 | 707 | |||
Noncurrent liabilities | 1,241 | 1,249 | |||
Partners’ capital and shareholders’ equity | 5,497 | 5,396 | |||
Total liabilities and equity | 7,502 | 7,352 | |||
Results of Operations | |||||
Revenues | 7,275 | 7,100 | 6,677 | ||
Operating expenses | 5,662 | 5,130 | 4,733 | ||
Operating income | 1,613 | 1,970 | 1,944 | ||
Other income (expense), net | (16) | 15 | 16 | ||
Net income | $ 1,597 | $ 1,985 | $ 1,960 | ||
[1]The consolidated total assets as of December 31, 2022 and 2021, include assets held by consolidated variable interest entities (VIEs) of $1,265 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 December 31, 2022 and 2021, include certain liabilities of consolidated VIEs of $25 million and $23 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 14 — Variable Interest Entities for additional information. |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Land | $ 37 | $ 37 | |
Buildings | 281 | 293 | |
Leasehold and land improvements | 1,504 | 1,442 | |
Cell site equipment | 4,247 | 4,150 | |
Switching equipment | 1,115 | 1,095 | |
Office furniture and equipment | 209 | 252 | |
Other operating assets and equipment | 47 | 47 | |
System development | 1,676 | 1,479 | |
Work in process | 218 | 261 | |
Total property, plant and equipment, gross | 9,334 | 9,056 | |
Accumulated depreciation and amortization | (6,710) | (6,450) | |
Property, plant and equipment, net | 2,624 | 2,606 | |
Depreciation and amortization expense | 682 | 662 | $ 669 |
(Gain) loss on asset disposals, net | $ 19 | $ 23 | $ 25 |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 20 years | ||
Leasehold and land improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 1 year | ||
Leasehold and land improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 30 years | ||
Cell site equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 7 years | ||
Cell site equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 25 years | ||
Switching equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Switching equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 8 years | ||
Office furniture and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Office furniture and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Other operating assets and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Other operating assets and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
System development | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 1 year | ||
System development | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 7 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease, Cost [Abstract] | |||
Operating lease cost | $ 188 | $ 181 | $ 171 |
Variable lease cost | 11 | 10 | 10 |
Total | $ 199 | $ 191 | $ 181 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 185 | $ 183 | $ 169 |
ROU assets obtained in exchange for lease obligations: | |||
Operating leases | $ 113 | $ 182 | $ 155 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted Average Remaining Lease Term | ||
Operating leases | 12 years | 12 years |
Weighted Average Discount Rate | ||
Operating leases | 3.90% | 3.80% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Operating Leases | |
2023 | $ 166 |
2024 | 163 |
2025 | 138 |
2026 | 106 |
2027 | 84 |
Thereafter | 654 |
Total lease payments | 1,311 |
Less: Imputed interest | 335 |
Present value of lease liabilities | 976 |
Legally binding lease payments for leases signed but not yet commenced | $ 41 |
Leases - Components of Lease In
Leases - Components of Lease Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | |||
Operating lease income | $ 93 | $ 83 | $ 77 |
Leases - Maturities of Expected
Leases - Maturities of Expected Lease Revenues (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 81 |
2024 | 74 |
2025 | 56 |
2026 | 38 |
2027 | 20 |
Thereafter | 27 |
Total future lease maturities | $ 296 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Asset retirement obligation | ||
Balance at beginning of year | $ 315 | $ 249 |
Additional liabilities accrued | 4 | 9 |
Revisions in estimated cash outflows | 11 | 42 |
Disposition of assets | (1) | (1) |
Accretion expense | 17 | 16 |
Balance at end of year | $ 346 | $ 315 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement (Details) - Revolving Credit Agreement | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Long-term debt | |
Maximum borrowing capacity | $ 300,000,000 |
Letters of credit outstanding | 0 |
Amounts borrowed | 0 |
Amount available for use | 300,000,000 |
Amount borrowed during the period | 75,000,000 |
Amount repaid during the period | $ 75,000,000 |
SOFR Rate | |
Long-term debt | |
Contractual spread | 1.60% |
Debt - Term Loan Agreements (De
Debt - Term Loan Agreements (Details) - USD ($) | 12 Months Ended | |||||
Dec. 01, 2026 | Mar. 01, 2026 | Mar. 01, 2024 | Mar. 01, 2023 | Dec. 01, 2022 | Dec. 31, 2022 | |
Term Loan 1 | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | $ 300,000,000 | |||||
Amounts borrowed and outstanding | 300,000,000 | |||||
Amounts borrowed and repaid | 0 | |||||
Amount available for use | 0 | |||||
Term Loan 1 | Subsequent event | ||||||
Long-term debt | ||||||
Quarterly installments | $ 8,000,000 | $ 4,000,000 | $ 2,000,000 | |||
Term Loan 2 | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | 300,000,000 | |||||
Amounts borrowed and outstanding | 296,000,000 | |||||
Amounts borrowed and repaid | 4,000,000 | |||||
Amount available for use | 0 | |||||
Quarterly installments | 750,000 | |||||
Term Loan 3 | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | 200,000,000 | |||||
Amounts borrowed and outstanding | 200,000,000 | |||||
Amounts borrowed and repaid | 0 | |||||
Amount available for use | 0 | |||||
Quarterly installments | $ 500,000 | |||||
Term Loan 3 | Subsequent event | ||||||
Long-term debt | ||||||
Quarterly installments | $ 1,000,000 | |||||
Term Loan Agreements | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | 800,000,000 | |||||
Amounts borrowed and outstanding | 796,000,000 | |||||
Amounts borrowed and repaid | 4,000,000 | |||||
Amount available for use | 0 | |||||
Amount borrowed during the period | $ 500,000,000 | |||||
SOFR Rate | Term Loan 1 | ||||||
Long-term debt | ||||||
Contractual spread | 1.60% | |||||
SOFR Rate | Term Loan 2 | ||||||
Long-term debt | ||||||
Contractual spread | 2.10% | |||||
SOFR Rate | Term Loan 3 | ||||||
Long-term debt | ||||||
Contractual spread | 2.60% |
Debt - Export Credit Financing
Debt - Export Credit Financing Agreement (Details) - Export credit financing agreement $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 150 |
Amount borrowed during the period | 150 |
Amounts borrowed and outstanding | $ 150 |
SOFR Rate | |
Debt Instrument [Line Items] | |
Contractual spread | 1.60% |
Debt - Receivables Securitizati
Debt - Receivables Securitization Agreement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Equipment installment plan receivables | $ 1,211 | $ 1,085 | |
Receivables securitization agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 450 | ||
Amount repaid during the period | 250 | ||
Amount borrowed during the period | 75 | ||
Amounts borrowed and outstanding | 275 | ||
Amount available for use | 175 | ||
Receivables securitization agreement | Subsequent event | |||
Debt Instrument [Line Items] | |||
Amount borrowed during the period | $ 25 | ||
Receivables securitization agreement | Assets pledged | |||
Debt Instrument [Line Items] | |||
Equipment installment plan receivables | $ 447 |
Debt - Repurchase Agreement (De
Debt - Repurchase Agreement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Equipment installment plan receivables | $ 1,211 | $ 1,085 | |
Repurchase Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 200 | ||
Amount borrowed during the period | 110 | ||
Amount repaid during the period | 50 | ||
Amounts borrowed and outstanding | 60 | ||
Amount available for use | 140 | ||
Repurchase Agreement | Assets pledged | |||
Debt Instrument [Line Items] | |||
Equipment installment plan receivables | $ 524 | ||
SOFR Rate | Repurchase Agreement | |||
Debt Instrument [Line Items] | |||
Contractual spread | 1.25% | ||
Lender's cost of funds | Repurchase Agreement | Subsequent event | |||
Debt Instrument [Line Items] | |||
Contractual spread | 1.35% |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Long-term debt | ||
Principal amount | $ 3,268 | $ 2,796 |
Unamortized discount and debt issuance costs | 68 | 65 |
Total long-term debt | 3,200 | 2,731 |
Current portion of long-term debt | 13 | 3 |
Long-term debt, net | 3,187 | 2,728 |
Long-term debt maturities | ||
Scheduled principal payments 2023 | 13 | |
Scheduled principal payments 2024 | 20 | |
Scheduled principal payments 2025 | 20 | |
Scheduled principal payments 2026 | 268 | |
Scheduled principal payments 2027 | $ 158 | |
Amount redeemed | 917 | |
Unamortized debt issuance costs | $ 31 | |
Redemption price, percentage | 100% | |
Consolidated interest coverage ratio | 3 | |
Consolidated leverage ratio | 3.75 | |
Subordination Agreement | ||
Long-term debt maturities | ||
Consolidated funded indebtedness | $ 0 | |
Refinancing indebtedness | $ 0 | |
6.7% Senior Notes | ||
Long-term debt | ||
Interest rate on debt | 6.70% | |
Principal amount | $ 544 | $ 544 |
Long term debt | 533 | 532 |
Unamortized discount and debt issuance costs | $ 11 | 12 |
Long-term debt maturities | ||
Redemption price, percentage | 100% | |
6.25% Senior Notes | ||
Long-term debt | ||
Interest rate on debt | 6.25% | |
Principal amount | $ 500 | 500 |
Long term debt | 483 | 483 |
Unamortized discount and debt issuance costs | $ 17 | 17 |
5.50% Senior Notes | ||
Long-term debt | ||
Interest rate on debt | 5.50% | |
Principal amount | $ 500 | 500 |
Long term debt | 483 | 483 |
Unamortized discount and debt issuance costs | $ 17 | 17 |
5.50% Senior Notes | ||
Long-term debt | ||
Interest rate on debt | 5.50% | |
Principal amount | $ 500 | 500 |
Long term debt | 484 | 484 |
Unamortized discount and debt issuance costs | $ 16 | 16 |
Callable Notes | ||
Long-term debt maturities | ||
Redemption price, percentage | 100% | |
Receivables securitization agreement | ||
Long-term debt | ||
Principal amount | $ 275 | 450 |
Long term debt | 275 | 450 |
Unamortized discount and debt issuance costs | 0 | 0 |
Export credit financing agreement | ||
Long-term debt | ||
Principal amount | 150 | 0 |
Long term debt | 149 | 0 |
Unamortized discount and debt issuance costs | 1 | 0 |
Term Loan Agreements | ||
Long-term debt | ||
Principal amount | 796 | 299 |
Long term debt | 790 | 296 |
Unamortized discount and debt issuance costs | 6 | 3 |
Finance lease obligations | ||
Long-term debt | ||
Principal amount | 3 | 3 |
Unamortized discount and debt issuance costs | 0 | 0 |
Finance lease obligations | 3 | $ 3 |
Subordination Agreement | Maximum | ||
Long-term debt maturities | ||
Consolidated funded indebtedness | 105 | |
Refinancing indebtedness | $ 250 | |
Treasury Rate | 6.7% Senior Notes | ||
Long-term debt | ||
Contractual spread | 0.30% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Loss Contingency, Estimate [Abstract] | ||
Accrual for legal proceedings and unasserted claims | $ 0 | $ 0 |
FCC license auction, percent of bid credit in each auction | 25% |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | |
Assets | |||
Cash and cash equivalents | $ 273 | $ 156 | |
Accounts receivable | 985 | 976 | |
Inventory, net | 261 | 173 | |
Other current assets | 45 | 49 | |
Licenses | 4,690 | 4,088 | |
Property, plant and equipment, net | 2,624 | 2,606 | |
Operating lease right-of-use assets | 918 | 959 | |
Other assets and deferred charges | 686 | 626 | |
Total assets | [1] | 11,119 | 10,341 |
Liabilities | |||
Current liabilities | 1,195 | 903 | |
Long-term operating lease liabilities | 843 | 889 | |
Other deferred liabilities and credits | 604 | 573 | |
Consolidated Variable Interest Entities | |||
Assets | |||
Cash and cash equivalents | 29 | 22 | |
Accounts receivable | 701 | 693 | |
Inventory, net | 4 | 2 | |
Other current assets | 36 | 44 | |
Licenses | 640 | 639 | |
Property, plant and equipment, net | 135 | 124 | |
Operating lease right-of-use assets | 45 | 47 | |
Other assets and deferred charges | 481 | 383 | |
Total assets | 2,071 | 1,954 | |
Liabilities | |||
Current liabilities | 95 | 30 | |
Long-term operating lease liabilities | 40 | 41 | |
Other deferred liabilities and credits | 31 | 25 | |
Liabilities | $ 166 | $ 96 | |
[1]The consolidated total assets as of December 31, 2022 and 2021, include assets held by consolidated variable interest entities (VIEs) of $1,265 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 December 31, 2022 and 2021, include certain liabilities of consolidated VIEs of $25 million and $23 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 14 — Variable Interest Entities for additional information. |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entities, Other Disclosures | |||
Investments in unconsolidated entities, maximum exposure | $ 4 | $ 4 | |
Capital contributions, loans or advances | 282 | $ 36 | $ 111 |
USCC EIP LLC | |||
Variable Interest Entities, Other Disclosures | |||
Capital contributions, loans or advances | $ 249 | $ 83 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Noncontrolling Interest [Abstract] | |
Settlement value of mandatorily redeemable noncontrolling interests | $ 30 |
Carrying value of mandatorily redeemable noncontrolling interests | $ 14 |
Common Shareholders' Equity (De
Common Shareholders' Equity (Details) | 1 Months Ended | 12 Months Ended | |
Jan. 01, 2017 shares | Nov. 30, 2009 shares | Dec. 31, 2022 vote shares | |
Series A Common Shares | |||
Common shareholders' equity, other disclosures | |||
Number of votes | vote | 10 | ||
Voting rights for number of board of directors | 75% | ||
Common Shares | |||
Share repurchases | |||
Repurchase authorization, cumulative shares authorized (in shares) | 1,927,000 | ||
Stock Repurchase Program Additional Number Of Shares Authorized To Be Repurchased Per Year | 1,300,000 | ||
Common shareholders' equity, other disclosures | |||
Number of votes | vote | 1 | ||
Voting rights for number of board of directors | 25% | ||
Common Shares | Maximum | |||
Share repurchases | |||
Stock Repurchase Program Additional Number Of Shares Authorized To Be Repurchased Per Year | 1,300,000 | ||
Common Shares | Minimum | |||
Share repurchases | |||
Stock Repurchase Program Additional Number Of Shares Authorized To Be Repurchased Per Year | 0 | ||
Common Shares | 401(k) | |||
Common shareholders' equity, other disclosures | |||
Shares reserved (in shares) | 994,000 |
Stock-Based Compensation - Over
Stock-Based Compensation - Overview (Details) - Common Shares - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Long-Term Incentive Plans | |||
Stock-based compensation, overview | |||
Shares reserved (in shares) | 18,037,000 | ||
Non-Employee Directors' Plan | |||
Stock-based compensation, overview | |||
Shares reserved (in shares) | 62,000 | ||
Shares issued (in shares) | 22,000 | 20,000 | 19,000 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Common Shares - Long-Term Incentive Plans - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Stock based compensation, Nonvested shares rollforward, number of shares | |||
Nonvested stock units, beginning of period - Number of shares (in shares) | 1,601,000 | ||
Granted number of shares (in shares) | 881,000 | ||
Vested number of shares (in shares) | (321,000) | ||
Forfeited number of shares (in shares) | (161,000) | ||
Nonvested stock units, end of period - Number of shares (in shares) | 2,000,000 | 1,601,000 | |
Stock based compensation, Nonvested shares weighted average grant date fair value | |||
Nonvested stock units - beginning of period weighted average grant date fair value (USD per share) | $ 35.57 | ||
Granted weighted average grant date fair value (USD per share) | 30.35 | $ 36.68 | $ 29.18 |
Vested weighted average grant date fair value (USD per share) | 45.70 | ||
Forfeited weighted average grant date fair value (USD per share) | 33.10 | ||
Nonvested stock units - end of period weighted average grant date fair value (USD per share) | $ 31.84 | $ 35.57 | |
Fair value of vested stock units | $ 9 | $ 22 | $ 20 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) - Long-Term Incentive Plans - Performance Shares - Common Shares - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Stock based compensation, Nonvested shares rollforward, number of shares | |||
Nonvested stock units, beginning of period - Number of shares (in shares) | 1,049,000 | ||
Granted number of shares (in shares) | 487,000 | ||
Vested number of shares (in shares) | (183,000) | ||
Forfeited number of shares (in shares) | (105,000) | ||
Nonvested stock units, end of period - Number of shares (in shares) | 1,248,000 | 1,049,000 | |
Stock based compensation, Nonvested shares weighted average grant date fair value | |||
Nonvested stock units - beginning of period weighted average grant date fair value (USD per share) | $ 35.17 | ||
Granted weighted average grant date fair value (USD per share) | 31.35 | $ 37.67 | $ 29.71 |
Vested weighted average grant date fair value (USD per share) | 44.44 | ||
Forfeited weighted average grant date fair value (USD per share) | 32.99 | ||
Nonvested stock units - end of period weighted average grant date fair value (USD per share) | $ 32.51 | $ 35.17 | |
Shares issued and granted under stock compensation plans | |||
Fair value of vested stock units | $ 6 | $ 22 | $ 11 |
Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share awards target | 100% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share awards target | 0% | 0% | 50% |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share awards target | 200% | 200% | 200% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - Common Shares - Stock Options - Long-Term Incentive Plans - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock compensation, number of options | |||
Stock options outstanding | 348 | 378 | |
Stock compensation, other information | |||
Stock options outstanding - weighted average exercise price (USD per share) | $ 42.41 | $ 42.18 | |
Aggregate intrinsic value, options exercised | $ 0 | $ 0 | |
Maximum | |||
Stock compensation, other information | |||
Aggregate intrinsic value, options exercised | $ 1 |
Stock-Based Compensation - Defe
Stock-Based Compensation - Deferred Stock Units (Details) - Long-Term Incentive Plans - Deferred Compensation Stock Units - Common Shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Percent of match from annual bonus | 33% | 33% | |
Percent of match up to 50% from annual bonus | 25% | ||
Percent of match above 50% from annual bonus | 33% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock based compensation expense | |||
Total stock-based compensation expense, before income taxes | $ 24 | $ 27 | $ 32 |
Income tax benefit | (6) | (7) | (8) |
Total stock-based compensation expense, net of income taxes | 18 | 20 | 24 |
Unrecognized compensation cost for all stock-based compensation awards | $ 36 | ||
Weighted average period for recognition of unrecognized compensation cost for all stock-based compensation awards | 1 year 10 months 24 days | ||
Tax benefit from exercise of stock options and other awards | $ 4 | ||
Selling, general and administrative expense | |||
Stock based compensation expense | |||
Total stock-based compensation expense, before income taxes | 20 | 23 | 28 |
System operations expense | |||
Stock based compensation expense | |||
Total stock-based compensation expense, before income taxes | 4 | 4 | 4 |
Long-Term Incentive Plans | Restricted Stock Units | |||
Stock based compensation expense | |||
Total stock-based compensation expense, before income taxes | 18 | 16 | 21 |
Long-Term Incentive Plans | Performance Shares | |||
Stock based compensation expense | |||
Total stock-based compensation expense, before income taxes | 5 | 10 | 10 |
Non-Employee Directors' Plan | |||
Stock based compensation expense | |||
Total stock-based compensation expense, before income taxes | $ 1 | $ 1 | $ 1 |
Supplemental Cash Flow Disclo_3
Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow [Line Items] | |||
Interest paid | $ 154 | $ 143 | $ 105 |
Income taxes paid, net of (refunds received) | (116) | 6 | (38) |
Cash disbursements for payment of taxes | (5) | (16) | (11) |
Noncash software license acquisitions | 130 | 21 | $ 19 |
Other current liabilities | |||
Supplemental Cash Flow [Line Items] | |||
Short-term software license liabilities | 64 | 17 | |
Other deferred liabilities and credits | |||
Supplemental Cash Flow [Line Items] | |||
Long-term software license liabilities | $ 76 | $ 13 | |
Common Shares | |||
Supplemental Cash Flow [Line Items] | |||
Common Shares withheld (in shares) | 154,000 | 438,000 | 376,000 |
Aggregate value of Common Shares withheld | $ 5 | $ 16 | $ 11 |
Certain Relationships and Rel_2
Certain Relationships and Related Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 04, 1988 | |
TDS | UScellular | ||||
Related Party Transaction [Line Items] | ||||
TDS ownership percentage | 84% | |||
TDS | UScellular | Minimum | ||||
Related Party Transaction [Line Items] | ||||
TDS ownership percentage | 90% | |||
Sidley Austin LLP | ||||
Related Party Transaction [Line Items] | ||||
Legal expense | $ 5 | $ 7 | $ 9 | |
TDS | ||||
Related Party Transaction [Line Items] | ||||
Billings to UScellular from TDS | $ 96 | $ 89 | $ 81 |