CHICAGO, Feb. 25, 2015 /PRNewswire/ -- United States
Cellular Corporation (NYSE:USM) reported total operating revenues
of $1,008.7 million for the fourth
quarter of 2014, versus $902.7
million for the same period one year ago. Net income (loss)
attributable to U.S. Cellular shareholders and related diluted
earnings (loss) per share were $(21.3)
million and $(0.25)
respectively, for the fourth quarter of 2014, compared to
$1.6 million and $0.02, respectively, in the comparable period one
year ago.
"We accomplished our top priority in 2014 and grew our customer
base," said Kenneth R. Meyers, U.S.
Cellular president and CEO. "U.S. Cellular's strong value
proposition that offers a high-quality network and competitive
devices, plans and pricing drove this result, along with customer
service that is back to our normal high standards.
"We continued to invest in our network, bringing 4G LTE to 94
percent of our postpaid customers. And to ensure that the company
can remain competitive and meet broadband demands, U.S. Cellular
and its partners were successful in acquiring valuable spectrum in
the most recent auction.
"In 2015, we plan to build upon our 2014 accomplishments.
We will continue to invest in our network, further expanding our
deployment of 4G LTE and testing new technologies such as Voice
over LTE. We also will remain very focused on growing our
customer base and increasing revenue driven by smartphone adoption
and data monetization, although a continuation of the current
aggressive pricing environment could provide a headwind to these
efforts. Growing our top line while improving our cost
structure should lead to improved
profitability."
2015 Estimated Results
U.S. Cellular's estimates of full-year 2015 results are shown
below. Such estimates represent U.S. Cellular's view as of
February 25, 2015. Such
forward‑looking statements should not be assumed to be current as
of any future date. U.S. Cellular undertakes no duty to
update such information, whether as a result of new information,
future events or otherwise. There can be no assurance that
final results will not differ materially from such estimated
results.
U.S. Cellular has changed one of the measures which it uses to
present estimates of future operating results. U.S. Cellular
previously presented adjusted income before income taxes, defined
as income before income taxes, adjusted for: Depreciation,
amortization and accretion; net Gain or loss on sale of business
and other exit costs (if any); net Gain or loss on license sales
and exchanges (if any); net Gain or loss on investments ( if any);
and interest expense. U.S. Cellular is now presenting
Operating cash flow and Adjusted earnings before interest, taxes,
depreciation, amortization and accretion ("Adjusted EBITDA"), as
defined below, which it believes are measures which provide a
comprehensive view of U.S Cellular's recurring results of
operations.
|
|
|
|
|
(Dollars in
millions)
|
2015 Estimated
Results
|
|
Actual Results for
the Year Ended
December 31, 2014
|
Total operating
revenues
|
$4,000-$4,200
|
|
$3,893
|
Operating cash flow
(1)
|
$350-$450
|
|
$338
|
Adjusted EBITDA
(1)
|
$530-$630
|
|
$480
|
Capital
expenditures
|
$600
|
|
$558
|
|
|
(1)
|
Operating cash flow
is defined as net income, adjusted for the items set forth in the
reconciliation below. Adjusted EBITDA is defined as net
income, adjusted for the items set forth in the reconciliation
below. Operating cash flow and Adjusted EBITDA exclude these
items in order to show operating results on a more comparable basis
from period to period. From time to time, U.S. Cellular may exclude
other items from Operating cash flow and/or Adjusted EBITDA if such
items help reflect operating results on a more comparable basis.
U.S. Cellular does not intend to imply that any such items that are
excluded are non-recurring, infrequent or unusual; such items may
occur in the future. Operating cash flow and Adjusted EBITDA
are not measures of financial performance under Generally Accepted
Accounting Principles in the United States ("GAAP") and should not
be considered as alternatives to net income as indicators of the
company's operating performance or as alternatives to cash flows
from operating activities, determined in accordance with GAAP, as
indicators of cash flows or as measures of liquidity. U.S. Cellular
believes Operating cash flow and Adjusted EBITDA are useful
measures of U.S. Cellular's operating results before significant
recurring non-cash charges, gains and losses, and other items as
indicated below. The following tables provide a reconciliation to
Operating cash flow and Adjusted EBITDA for 2015 estimated results
and year ended December 31, 2014 actual results:
|
|
|
|
|
2015 Estimated
Results (2)
|
|
Actual Results for
the Year Ended December
31, 2014
|
(Dollars in
millions)
|
|
|
|
Net income (loss)
(GAAP)
|
N/A
|
|
($47)
|
Add back:
|
|
|
|
|
Income tax expense
(benefit)
|
N/A
|
|
($12)
|
Income (loss)
before income taxes (GAAP)
|
($10)-$90
|
|
($59)
|
Add back:
|
|
|
|
|
Interest
expense
|
$85
|
|
$57
|
|
Depreciation,
amortization and accretion expense
|
$545
|
|
$606
|
EBITDA
|
$620-$720
|
|
$605
|
Add back:
|
|
|
|
|
(Gain) loss on sale
of business and other exit costs, net
|
($105)
|
|
($33)
|
|
(Gain) loss on
license sales and exchanges
|
—
|
|
($113)
|
|
(Gain) loss on asset
disposals, net
|
$15
|
|
$21
|
Adjusted EBITDA
(3)
|
$530-$630
|
|
$480
|
Deduct:
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
($130)
|
|
($130)
|
|
Interest and dividend
income
|
($50)
|
|
($12)
|
Operating cash flow
(4)
|
$350-$450
|
|
$338
|
|
|
(2)
|
In providing 2015
Estimated Results, U.S. Cellular has not completed the above
reconciliation to net income because it does not provide guidance
for income taxes. U.S. Cellular believes that the impact of income
taxes cannot be reasonably predicted; therefore, the company is
unable to provide such guidance. Accordingly, a reconciliation to
net income is not available without unreasonable effort.
|
(3)
|
Adjusted EBITDA (new
measure) equals adjusted income before income taxes (previous
measure) excluding gain or loss on asset disposals, net. See
Adjusted EBITDA reconciliation for full year 2014, 2013, and 2012
on the company's website at investors.uscellular.com.
|
(4)
|
A reconciliation of
Operating cash flow (Non-GAAP) to operating income (GAAP) for full
year 2014, 2013, and 2012 actual results can be found on the
company's website at investors.uscellular.com.
|
Conference Call Information
U.S. Cellular will hold a conference call on Feb. 25, 2015 at 9:30
a.m. CST.
- Access the live call on the Events & Presentation page of
investors.uscellular.com or at
http://www.videonewswire.com/event.asp?id=101572.
- Access the call by phone at 877/407-8029 (US/Canada), no pass code required.
Before the call, certain financial and statistical information
to be discussed during the call will be posted to
investors.uscellular.com. The call will be archived on the Events
& Presentations page of investors.uscellular.com.
About U.S. Cellular
United States Cellular Corporation provides a comprehensive range
of wireless products and services, excellent customer support, and
a high-quality network to 4.8 million customers in 23 states. The
Chicago-based company had 6,600
full- and part-time associates as of Dec.
31, 2014. At the end of the fourth quarter of 2014,
Telephone and Data Systems, Inc. owned 84 percent of U.S. Cellular.
For more information about U.S. Cellular, visit uscellular.com.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995: All information
set forth in this news release, except historical and factual
information, represents forward-looking statements. This includes
all statements about the company's plans, beliefs, estimates, and
expectations. These statements are based on current estimates,
projections, and assumptions, which involve certain risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Important factors
that may affect these forward-looking statements include, but are
not limited to: impacts of any pending acquisition and divestiture
transactions, including, but not limited to, the ability to
obtain regulatory approvals, successfully complete the transactions
and the financial impacts of such transactions; the ability of the
company to successfully manage and grow its markets; the overall
economy; competition; the ability to obtain or maintain roaming
arrangements with other carriers on acceptable terms; the state and
federal telecommunications regulatory environment; the value of
assets and investments; adverse changes in the ratings afforded TDS
and U.S. Cellular debt securities by accredited ratings
organizations; industry consolidation; advances in
telecommunications technology; uncertainty of access to the capital
markets; pending and future litigation; changes in income tax
rates, laws, regulations or rulings; changes in customer growth
rates, average monthly revenue per user, churn rates, roaming
revenue and terms, the availability of wireless devices, or the mix
of products and services offered by U.S. Cellular. Investors are
encouraged to consider these and other risks and uncertainties that
are discussed in the Form 8-K Current Report used by U.S. Cellular
to furnish this press release to the Securities and Exchange
Commission ("SEC"), which are incorporated by reference
herein.
United States
Cellular Corporation
|
Total Markets*
Summary Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
Quarter Ended
|
12/31/2014
|
|
9/30/2014
|
|
6/30/2014
|
|
3/31/2014
|
|
12/31/2013
|
Retail
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
4,298,000
|
|
|
4,200,000
|
|
|
4,148,000
|
|
|
4,174,000
|
|
|
4,267,000
|
|
|
Gross
additions
|
|
302,000
|
|
|
251,000
|
|
|
190,000
|
|
|
197,000
|
|
|
176,000
|
|
|
Net additions
(losses)
|
|
98,000
|
|
|
52,000
|
|
|
(26,000)
|
|
|
(93,000)
|
|
|
(71,000)
|
|
|
ARPU (1)
|
$
|
56.51
|
|
$
|
56.37
|
|
$
|
56.82
|
|
$
|
57.59
|
|
$
|
53.53
|
|
|
ARPA (2)
|
$
|
136.13
|
|
$
|
132.99
|
|
$
|
131.95
|
|
$
|
132.03
|
|
$
|
121.21
|
|
|
Churn rate
(3)
|
|
1.6%
|
|
|
1.6%
|
|
|
1.7%
|
|
|
2.3%
|
|
|
1.9%
|
|
|
Smartphone
penetration (4)
|
|
59.8%
|
|
|
57.9%
|
|
|
55.3%
|
|
|
53.1%
|
|
|
50.8%
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
348,000
|
|
|
350,000
|
|
|
352,000
|
|
|
356,000
|
|
|
343,000
|
|
|
Gross
additions
|
|
60,000
|
|
|
64,000
|
|
|
65,000
|
|
|
85,000
|
|
|
63,000
|
|
|
Net additions
(losses)
|
|
(2,000)
|
|
|
(2,000)
|
|
|
(4,000)
|
|
|
13,000
|
|
|
(26,000)
|
|
|
ARPU (1)
|
$
|
35.33
|
|
$
|
34.40
|
|
$
|
34.02
|
|
$
|
32.22
|
|
$
|
31.66
|
|
|
Churn rate
(3)
|
|
5.9%
|
|
|
6.3%
|
|
|
6.5%
|
|
|
6.9%
|
|
|
8.3%
|
Total customers at
end of period
|
|
4,760,000
|
|
|
4,674,000
|
|
|
4,653,000
|
|
|
4,684,000
|
|
|
4,774,000
|
Billed ARPU
(1)
|
$
|
53.63
|
|
$
|
53.24
|
|
$
|
53.36
|
|
$
|
53.93
|
|
$
|
50.25
|
Service revenue
ARPU (1)
|
$
|
60.10
|
|
$
|
60.92
|
|
$
|
60.32
|
|
$
|
60.19
|
|
$
|
57.05
|
Smartphones sold
as a percent of total handsets sold
|
|
86.5%
|
|
|
80.8%
|
|
|
79.0%
|
|
|
78.2%
|
|
|
84.5%
|
Total
population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(5)
|
|
50,906,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
58,013,000
|
|
|
Consolidated
operating markets (5)
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,759,000
|
Market penetration
at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(6)
|
|
9.4%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.2%
|
|
|
Consolidated
operating markets (6)
|
|
15.0%
|
|
|
14.7%
|
|
|
14.7%
|
|
|
14.8%
|
|
|
15.0%
|
Capital
expenditures (000s)
|
$
|
181,655
|
|
$
|
142,452
|
|
$
|
143,927
|
|
$
|
89,581
|
|
$
|
208,135
|
Total cell sites
in service
|
|
6,220
|
|
|
6,209
|
|
|
6,183
|
|
|
6,165
|
|
|
6,975
|
Owned
towers
|
|
4,281
|
|
|
4,487
|
|
|
4,457
|
|
|
4,448
|
|
|
4,448
|
|
|
*
|
Represents U.S.
Cellular's consolidated markets. These results include markets
which U. S. Cellular currently consolidates, or previously
consolidated in the periods presented, and are not adjusted in
prior periods for subsequent divestitures or
deconsolidations.
|
|
|
|
Refer to U.S.
Cellular's Form 8-K filed on February 26, 2014 for pro forma
financial information related to the Divestiture Transaction and
the NY1 and NY2 Deconsolidation for the three and twelve months
ended December 31, 2013, as if the transactions had occurred at the
beginning of the period.
|
United States
Cellular Corporation
|
Core* Markets
Summary Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
Quarter Ended
|
12/31/2014
|
|
9/30/2014
|
|
6/30/2014
|
|
3/31/2014
|
|
12/31/2013
|
Retail
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
4,298,000
|
|
|
4,200,000
|
|
|
4,148,000
|
|
|
4,174,000
|
|
|
4,267,000
|
|
|
Gross
additions
|
|
302,000
|
|
|
251,000
|
|
|
190,000
|
|
|
197,000
|
|
|
176,000
|
|
|
Net additions
(losses)
|
|
98,000
|
|
|
52,000
|
|
|
(26,000)
|
|
|
(93,000)
|
|
|
(71,000)
|
|
|
ARPU (1)
|
$
|
56.51
|
|
$
|
56.37
|
|
$
|
56.82
|
|
$
|
57.59
|
|
$
|
53.53
|
|
|
ARPA (2)
|
$
|
136.13
|
|
$
|
132.99
|
|
$
|
131.95
|
|
$
|
132.03
|
|
$
|
121.21
|
|
|
Churn rate
(3)
|
|
1.6%
|
|
|
1.6%
|
|
|
1.7%
|
|
|
2.3%
|
|
|
1.9%
|
|
|
Smartphone
penetration (4)
|
|
59.8%
|
|
|
57.9%
|
|
|
55.3%
|
|
|
53.1%
|
|
|
50.8%
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
348,000
|
|
|
350,000
|
|
|
352,000
|
|
|
356,000
|
|
|
343,000
|
|
|
Gross
additions
|
|
60,000
|
|
|
64,000
|
|
|
65,000
|
|
|
85,000
|
|
|
63,000
|
|
|
Net additions
(losses)
|
|
(2,000)
|
|
|
(2,000)
|
|
|
(4,000)
|
|
|
13,000
|
|
|
(26,000)
|
|
|
ARPU (1)
|
$
|
35.33
|
|
$
|
34.40
|
|
$
|
34.02
|
|
$
|
32.22
|
|
$
|
31.66
|
|
|
Churn rate
(3)
|
|
5.9%
|
|
|
6.3%
|
|
|
6.5%
|
|
|
6.9%
|
|
|
8.3%
|
Total customers at
end of period
|
|
4,760,000
|
|
|
4,674,000
|
|
|
4,653,000
|
|
|
4,684,000
|
|
|
4,774,000
|
Billed ARPU
(1)
|
$
|
53.63
|
|
$
|
53.24
|
|
$
|
53.36
|
|
$
|
53.93
|
|
$
|
50.25
|
Service revenue
ARPU (1)
|
$
|
60.10
|
|
$
|
60.92
|
|
$
|
60.32
|
|
$
|
60.19
|
|
$
|
57.05
|
Smartphones sold
as a percent of total handsets sold
|
|
86.5%
|
|
|
80.8%
|
|
|
79.0%
|
|
|
78.2%
|
|
|
84.5%
|
Total
population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(5)
|
|
50,906,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
54,817,000
|
|
|
58,013,000
|
|
|
Consolidated
operating markets (5)
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,729,000
|
|
|
31,759,000
|
Market penetration
at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(6)
|
|
9.4%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.5%
|
|
|
8.2%
|
|
|
Consolidated
operating markets (6)
|
|
15.0%
|
|
|
14.7%
|
|
|
14.7%
|
|
|
14.8%
|
|
|
15.0%
|
Capital
expenditures (000s)
|
$
|
181,655
|
|
$
|
142,452
|
|
$
|
143,927
|
|
$
|
89,581
|
|
$
|
211,247
|
Total cell sites
in service
|
|
6,220
|
|
|
6,209
|
|
|
6,183
|
|
|
6,165
|
|
|
6,161
|
Owned
towers
|
|
3,951
|
|
|
3,922
|
|
|
3,892
|
|
|
3,883
|
|
|
3,883
|
|
|
*
|
U.S. Cellular's Core
Markets excludes the results of the Divestiture Markets and NY1 and
NY2 Partnerships for the periods presented.
|
|
|
|
Refer to U.S.
Cellular's Form 8-K filed on February 26, 2014 for pro forma
financial information related to the Divestiture Transaction and
the NY1 and NY2 Deconsolidation for the three and twelve months
ended December 31, 2013, as if the transactions had occurred at the
beginning of the period.
|
|
|
(1)
|
Average Revenue Per
User ("ARPU") metrics are calculated by dividing a revenue base by
an average number of customers by the number of months in the
period. These revenue bases and customer populations are
shown below:
|
|
|
a.
|
Postpaid ARPU
consists of total postpaid service revenues and postpaid
customers.
|
|
|
b.
|
Prepaid ARPU consists
of total prepaid service revenues and prepaid customers.
|
|
|
c.
|
Billed ARPU consists
of total postpaid, prepaid and reseller service revenues and
postpaid, prepaid and reseller customers.
|
|
|
d.
|
Service revenue ARPU
consists of total postpaid, prepaid and reseller service revenues,
inbound roaming and other service revenues and postpaid, prepaid
and reseller customers.
|
(2)
|
Average Revenue Per
Account ("ARPA") metric is calculated by dividing total postpaid
service revenues by the average number of postpaid accounts by the
number of months in the period.
|
(3)
|
Churn metrics
represent the percentage of the postpaid or prepaid customers that
disconnect service each month. These metrics represent the average
monthly postpaid or prepaid churn rate for each respective
period.
|
(4)
|
Smartphones represent
wireless devices which run on an Android, Apple, BlackBerry or
Windows Mobile operating system, excluding connected devices.
Smartphone penetration is calculated by dividing postpaid
smartphone customers by total postpaid customers.
|
(5)
|
The decrease in the
population of consolidated markets is due primarily to the
divestiture of the majority of the St. Louis area non-operating
market license in March 2014, and certain non-operating licenses in
North Carolina in December 2014. Total Population is used only to
calculate market penetration of consolidated markets and
consolidated operating markets, respectively. See footnote
(6) below.
|
(6)
|
Market penetration is
calculated by dividing the number of wireless customers at the end
of the period by the total population of consolidated markets and
consolidated operating markets, respectively, as estimated by
Claritas. The increase in consolidated markets penetration is
due primarily to a lower denominator as a result of the license
divestitures described in footnote (5) above.
|
United States
Cellular Corporation
|
Consolidated
Statement of Operations Highlights
|
Three Months Ended
December 31,
|
(Unaudited, dollars
and shares in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
$
|
849,788
|
|
$
|
825,128
|
|
$
|
24,660
|
|
3%
|
|
Equipment
sales
|
|
158,956
|
|
|
77,596
|
|
|
81,360
|
|
>100%
|
|
|
Total operating
revenues
|
|
1,008,744
|
|
|
902,724
|
|
|
106,020
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
System operations
(excluding Depreciation, amortization and accretion
reported below)
|
|
202,423
|
|
|
177,438
|
|
|
24,985
|
|
14%
|
|
Cost of equipment
sold
|
|
342,355
|
|
|
346,847
|
|
|
(4,492)
|
|
(1%)
|
|
Selling, general and
administrative
|
|
394,553
|
|
|
442,720
|
|
|
(48,167)
|
|
(11%)
|
|
Depreciation,
amortization and accretion
|
|
140,955
|
|
|
210,371
|
|
|
(69,416)
|
|
(33%)
|
|
(Gain) loss on asset
disposals, net
|
|
4,695
|
|
|
14,453
|
|
|
(9,758)
|
|
(68%)
|
|
(Gain) loss on sale
of business and other exit costs, net
|
|
(5,136)
|
|
|
(3,140)
|
|
|
(1,996)
|
|
(64%)
|
|
(Gain) loss on sale
of license sales and exchanges
|
|
(21,547)
|
|
|
(255,479)
|
|
|
233,932
|
|
92%
|
|
|
Total operating
expenses
|
|
1,058,298
|
|
|
933,210
|
|
|
125,088
|
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(49,554)
|
|
|
(30,486)
|
|
|
(19,068)
|
|
(63%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and
other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
23,598
|
|
|
32,152
|
|
|
(8,554)
|
|
(27%)
|
|
Interest and dividend
income
|
|
6,119
|
|
|
994
|
|
|
5,125
|
|
>100%
|
|
Gain (loss) on
investments
|
|
—
|
|
|
29
|
|
|
(29)
|
|
N/M
|
|
Interest
expense
|
|
(14,674)
|
|
|
(11,570)
|
|
|
(3,104)
|
|
(27%)
|
|
Other, net
|
|
(121)
|
|
|
135
|
|
|
(256)
|
|
>(100%)
|
|
|
Total investment and
other income (expense)
|
|
14,922
|
|
|
21,740
|
|
|
(6,818)
|
|
(31%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(34,632)
|
|
|
(8,746)
|
|
|
(25,886)
|
|
>(100%)
|
|
Income tax expense
(benefit)
|
|
(12,528)
|
|
|
(8,484)
|
|
|
(4,044)
|
|
(48%)
|
Net
loss
|
|
(22,104)
|
|
|
(262)
|
|
|
(21,842)
|
|
>(100%)
|
|
Less: Net income
(loss) attributable to noncontrolling interests, net of
tax
|
|
(764)
|
|
|
(1,854)
|
|
|
1,090
|
|
59%
|
Net income (loss)
attributable to U.S. Cellular shareholders
|
$
|
(21,340)
|
|
$
|
1,592
|
|
$
|
(22,932)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
84,066
|
|
|
84,181
|
|
|
(115)
|
|
—
|
Basic earnings
(loss) per share attributable to U.S. Cellular
shareholders
|
$
|
(0.25)
|
|
$
|
0.02
|
|
$
|
(0.27)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
84,066
|
|
|
85,033
|
|
|
(967)
|
|
(1%)
|
Diluted earnings
(loss) per share attributable to U.S. Cellular
shareholders
|
$
|
(0.25)
|
|
$
|
0.02
|
|
$
|
(0.27)
|
|
>(100%)
|
United States
Cellular Corporation
|
Consolidated
Statement of Operations Highlights
|
Twelve Months
Ended December 31,
|
(Unaudited, dollars
and shares in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
$
|
3,397,937
|
|
$
|
3,594,773
|
|
$
|
(196,836)
|
|
(5%)
|
|
Equipment
sales
|
|
494,810
|
|
|
324,063
|
|
|
170,747
|
|
53%
|
|
|
Total operating
revenues
|
|
3,892,747
|
|
|
3,918,836
|
|
|
(26,089)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
System operations
(excluding Depreciation, amortization and accretion
reported below)
|
|
769,911
|
|
|
763,435
|
|
|
6,476
|
|
1%
|
|
Cost of equipment
sold
|
|
1,192,669
|
|
|
999,000
|
|
|
193,669
|
|
19%
|
|
Selling, general and
administrative
|
|
1,591,914
|
|
|
1,677,395
|
|
|
(85,481)
|
|
(5%)
|
|
Depreciation,
amortization and accretion
|
|
605,997
|
|
|
803,781
|
|
|
(197,784)
|
|
(25%)
|
|
(Gain) loss on asset
disposals, net
|
|
21,469
|
|
|
30,606
|
|
|
(9,137)
|
|
(30%)
|
|
(Gain) loss on sale
of business and other exit costs, net
|
|
(32,830)
|
|
|
(246,767)
|
|
|
213,937
|
|
87%
|
|
(Gain) loss on
license sales and exchanges
|
|
(112,993)
|
|
|
(255,479)
|
|
|
142,486
|
|
56%
|
|
|
Total operating
expenses
|
|
4,036,137
|
|
|
3,771,971
|
|
|
264,166
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(143,390)
|
|
|
146,865
|
|
|
(290,255)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and
other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
129,764
|
|
|
131,949
|
|
|
(2,185)
|
|
(2%)
|
|
Interest and dividend
income
|
|
12,148
|
|
|
3,961
|
|
|
8,187
|
|
>100%
|
|
Gain (loss) on
investments
|
|
—
|
|
|
18,556
|
|
|
(18,556)
|
|
N/M
|
|
Interest
expense
|
|
(57,386)
|
|
|
(43,963)
|
|
|
(13,423)
|
|
(31%)
|
|
Other, net
|
|
160
|
|
|
288
|
|
|
(128)
|
|
(44%)
|
|
|
Total investment and
other income (expense)
|
|
84,686
|
|
|
110,791
|
|
|
(26,105)
|
|
(24%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
|
(58,704)
|
|
|
257,656
|
|
|
(316,360)
|
|
>(100%)
|
|
Income tax expense
(benefit)
|
|
(11,782)
|
|
|
113,134
|
|
|
(124,916)
|
|
>(100%)
|
Net income
(loss)
|
|
(46,922)
|
|
|
144,522
|
|
|
(191,444)
|
|
>(100%)
|
|
Less: Net income
(loss) attributable to noncontrolling interests, net of
tax
|
|
(4,110)
|
|
|
4,484
|
|
|
(8,594)
|
|
>(100%)
|
Net income (loss)
attributable to U.S. Cellular shareholders
|
$
|
(42,812)
|
|
$
|
140,038
|
|
$
|
(182,850)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
84,213
|
|
|
83,968
|
|
|
245
|
|
—
|
Basic earnings
(loss) per share attributable to U.S. Cellular
shareholders
|
$
|
(0.51)
|
|
$
|
1.67
|
|
$
|
(2.18)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
84,213
|
|
|
84,730
|
|
|
(517)
|
|
(1%)
|
Diluted earnings
(loss) per share attributable to U.S. Cellular
shareholders
|
$
|
(0.51)
|
|
$
|
1.65
|
|
$
|
(2.16)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special dividend
per share to U.S. Cellular shareholders
|
$
|
—
|
|
$
|
5.75
|
|
$
|
(5.75)
|
|
N/M
|
United States
Cellular Corporation
|
Consolidated
Balance Sheet Highlights
|
(Unaudited, dollars
in thousands)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
211,513
|
|
$
|
342,065
|
|
Short-term
investments
|
|
—
|
|
|
50,104
|
|
Accounts receivable
from customers and others
|
|
556,958
|
|
|
586,595
|
|
Inventory,
net
|
|
267,068
|
|
|
238,188
|
|
Prepaid
expenses
|
|
59,744
|
|
|
65,596
|
|
Net deferred income
tax asset
|
|
93,058
|
|
|
99,105
|
|
Other current
assets
|
|
90,834
|
|
|
19,538
|
|
|
|
1,279,175
|
|
|
1,401,191
|
|
|
|
|
|
|
|
Assets held for
sale
|
|
107,055
|
|
|
16,027
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
Licenses
|
|
1,443,438
|
|
|
1,401,126
|
|
Goodwill
|
|
370,151
|
|
|
387,524
|
|
Investments in
unconsolidated entities
|
|
283,014
|
|
|
265,585
|
|
|
|
2,096,603
|
|
|
2,054,235
|
|
|
|
|
|
|
|
Property, plant
and equipment
|
|
|
|
|
|
|
In service and under
construction
|
|
7,458,740
|
|
|
7,717,512
|
|
Less: Accumulated
depreciation
|
|
4,730,523
|
|
|
4,860,992
|
|
|
|
2,728,217
|
|
|
2,856,520
|
|
|
|
|
|
|
|
Other assets and
deferred charges
|
|
276,218
|
|
|
117,735
|
|
|
|
|
|
|
|
Total
assets
|
$
|
6,487,268
|
|
$
|
6,445,708
|
United States
Cellular Corporation
|
Consolidated
Balance Sheet Highlights
|
(Unaudited, dollars
in thousands)
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
Current
liabilities
|
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
46
|
|
$
|
166
|
|
Accounts
payable
|
|
|
|
|
|
|
|
Affiliated
|
|
9,774
|
|
|
11,243
|
|
|
Trade
|
|
306,845
|
|
|
405,583
|
|
Customer deposits and
deferred revenues
|
|
287,562
|
|
|
256,740
|
|
Accrued
taxes
|
|
36,652
|
|
|
73,820
|
|
Accrued
compensation
|
|
66,162
|
|
|
66,566
|
|
Other current
liabilities
|
|
149,853
|
|
|
192,055
|
|
|
|
|
856,894
|
|
|
1,006,173
|
|
|
|
|
|
|
|
|
Liabilities held
for sale
|
|
20,934
|
|
|
—
|
|
|
|
|
|
|
|
|
Deferred
liabilities and credits
|
|
|
|
|
|
|
Net deferred income
tax liability
|
|
859,867
|
|
|
836,297
|
|
Other deferred
liabilities and credits
|
|
284,002
|
|
|
315,073
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
1,151,819
|
|
|
878,032
|
|
|
|
|
|
|
|
|
Noncontrolling
interests with redemption features
|
|
1,150
|
|
|
536
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
U.S. Cellular
shareholders' equity
|
|
|
|
|
|
|
Series A Common and
Common Shares, par value $1 per share
|
|
88,074
|
|
|
88,074
|
|
Additional paid-in
capital
|
|
1,472,558
|
|
|
1,424,729
|
|
Treasury
shares
|
|
(169,139)
|
|
|
(164,692)
|
|
Retained
earnings
|
|
1,910,498
|
|
|
2,043,095
|
|
|
Total U.S. Cellular
shareholders' equity
|
|
3,301,991
|
|
|
3,391,206
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
10,611
|
|
|
18,391
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
3,312,602
|
|
|
3,409,597
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
6,487,268
|
|
$
|
6,445,708
|
United States
Cellular Corporation
|
Schedule of Cash
and Cash Equivalents and Investments
|
(Unaudited, dollars
in thousands)
|
|
The following table
presents U.S. Cellular's cash and cash equivalents and investments
at December 31, 2014 and December 31, 2013.
|
|
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
211,513
|
|
$
|
342,065
|
|
|
|
|
|
|
|
Amounts included
in short-term investments (1)(2)
|
|
|
|
|
|
|
U.S. Treasury
Notes
|
|
—
|
|
|
50,104
|
|
|
|
|
|
|
|
Total cash and
cash equivalents and investments
|
$
|
211,513
|
|
$
|
392,169
|
|
|
(1)
|
Designated as
held-to-maturity investments and are recorded at amortized cost in
the Consolidated Balance Sheet.
|
(2)
|
Maturities are less
than twelve months from the respective balance sheet
dates.
|
United States
Cellular Corporation
|
Consolidated
Statement of Cash Flows
|
Twelve Months
Ended December 31,
|
(Unaudited, dollars
in thousands)
|
|
|
|
|
|
|
2014
|
|
2013
|
Cash flows from
operating activities
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(46,922)
|
|
$
|
144,522
|
|
Add (deduct)
adjustments to reconcile net income to cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Depreciation,
amortization and accretion
|
|
605,997
|
|
|
803,781
|
|
|
|
Bad debts
expense
|
|
101,282
|
|
|
98,864
|
|
|
|
Stock-based
compensation expense
|
|
22,383
|
|
|
15,844
|
|
|
|
Deferred income
taxes, net
|
|
57,604
|
|
|
(75,348)
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
(129,764)
|
|
|
(131,949)
|
|
|
|
Distributions from
unconsolidated entities
|
|
112,336
|
|
|
125,660
|
|
|
|
(Gain) loss on asset
disposals, net
|
|
21,469
|
|
|
30,606
|
|
|
|
(Gain) loss on sale
of business and other exit costs, net
|
|
(32,830)
|
|
|
(246,767)
|
|
|
|
(Gain) loss on
license sales and exchanges
|
|
(112,993)
|
|
|
(255,479)
|
|
|
|
(Gain) loss on
investments
|
|
—
|
|
|
(18,556)
|
|
|
|
Noncash interest
expense
|
|
1,155
|
|
|
1,059
|
|
|
|
Other operating
activities
|
|
26
|
|
|
646
|
|
Changes in assets and
liabilities from operations
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
12,547
|
|
|
(291,168)
|
|
|
|
Equipment installment
plans receivable
|
|
(188,829)
|
|
|
(591)
|
|
|
|
Inventory
|
|
(28,878)
|
|
|
(82,422)
|
|
|
|
Accounts payable -
trade
|
|
(95,587)
|
|
|
85,199
|
|
|
|
Accounts payable -
affiliate
|
|
(2,590)
|
|
|
147
|
|
|
|
Customer deposits and
deferred revenues
|
|
33,524
|
|
|
66,344
|
|
|
|
Accrued
taxes
|
|
(99,483)
|
|
|
30,037
|
|
|
|
Accrued
interest
|
|
1,307
|
|
|
273
|
|
|
|
Other assets and
liabilities
|
|
(59,412)
|
|
|
(9,805)
|
|
|
|
|
|
172,342
|
|
|
290,897
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
Cash used for
additions to property, plant and equipment
|
|
(605,083)
|
|
|
(717,862)
|
|
Cash paid for
acquisitions and licenses
|
|
(38,150)
|
|
|
(16,540)
|
|
Cash received from
divestitures
|
|
179,842
|
|
|
811,120
|
|
Cash received for
investments
|
|
50,000
|
|
|
100,000
|
|
Federal
Communications Commission deposit
|
|
(60,000)
|
|
|
—
|
|
Other investing
activities
|
|
2,619
|
|
|
(3,969)
|
|
|
|
|
|
(470,772)
|
|
|
172,749
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Issuance of long-term
debt
|
|
275,000
|
|
|
—
|
|
Repayment of
borrowing under revolving credit facility
|
|
(150,000)
|
|
|
—
|
|
Borrowing under
revolving credit facility
|
|
150,000
|
|
|
—
|
|
Common shares
reissued for benefit plans, net of tax payments
|
|
830
|
|
|
5,784
|
|
Common shares
repurchased
|
|
(18,943)
|
|
|
(18,544)
|
|
Payment of debt
issuance costs
|
|
(9,644)
|
|
|
(23)
|
|
Acquisition of
licenses in common control transaction
|
|
(76,298)
|
|
|
—
|
|
Dividends
paid
|
|
—
|
|
|
(482,270)
|
|
Distributions to
noncontrolling interests
|
|
(3,056)
|
|
|
(3,766)
|
|
Payments to acquire
additional interest in subsidiaries
|
|
—
|
|
|
(1,005)
|
|
Other financing
activities
|
|
(11)
|
|
|
(115)
|
|
|
|
|
|
167,878
|
|
|
(499,939)
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents
|
|
(130,552)
|
|
|
(36,293)
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
Beginning of
period
|
|
342,065
|
|
|
378,358
|
|
End of
period
|
$
|
211,513
|
|
$
|
342,065
|
United States
Cellular Corporation
|
Financial Measures
and Reconciliations
|
(Unaudited, dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
$
|
(158,289)
|
|
$
|
(5,336)
|
|
$
|
172,342
|
|
$
|
290,897
|
|
Add: Sprint Cost
Reimbursement
|
|
|
19,085
|
|
|
9,429
|
|
|
71,097
|
|
|
10,560
|
|
Less: Cash used
for additions to property, plant and equipment
|
|
|
180,309
|
|
|
195,682
|
|
|
605,083
|
|
|
717,862
|
|
|
Adjusted free cash
flow (1)
|
|
$
|
(319,513)
|
|
$
|
(191,589)
|
|
$
|
(361,644)
|
|
$
|
(416,405)
|
|
|
(1)
|
Adjusted free cash
flow is defined as Cash flows from operating activities (which
includes cash outflows related to the Sprint decommissioning), as
adjusted for cash proceeds from the Sprint Cost Reimbursement
(which are included in Cash flows from investing activities in the
Consolidated Statement of Cash Flows), less Cash used for additions
to property, plant and equipment. Adjusted free cash flow is a
non-GAAP financial measure which U.S. Cellular believes may be
useful to investors and other users of its financial information in
evaluating the amount of cash generated by business operations
(including cash proceeds from the Sprint Cost Reimbursement), after
Cash used for additions to property, plant and
equipment.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/us-cellular-reports-fourth-quarter-2014-results-300041151.html
SOURCE United States Cellular Corporation