UScellular reports first quarter 2025 results

Yahoo

02-05-2025

As previously announced, UScellular will hold a teleconference on May 2, 2025, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.uscellular.com.
CHICAGO, May 2, 2025 /PRNewswire/ -- United States Cellular Corporation (NYSE: USM) reported total operating revenues of $891 million for the first quarter of 2025, versus $950 million for the same period one year ago. Service revenues totaled $741 million, versus $754 million for the same period one year ago. Net income attributable to UScellular shareholders and related diluted earnings per share were $18 million and $0.21, respectively, for the first quarter of 2025 compared to $18 million and $0.20, respectively, in the same period one year ago.
Recent Highlights*
Improved postpaid handset results
Postpaid handset gross additions increased; postpaid handset net losses improved
Third-party tower rental revenues increased 6%
Ongoing 5G mid-band network deployment
Providing capacity and enhanced speed for our mobility and fixed wireless customers
* Comparisons are 1Q'24 to 1Q'25 unless otherwise noted
"In the first quarter, we continued to work towards executing on our 2025 priorities which include successfully closing on the previously announced sale of the wireless business, while remaining focused on investing in a strong customer experience and operating our business efficiently," said Laurent Therivel, UScellular President and CEO. "I am also pleased with the 6% year-over-year growth in third-party tower rental revenues, as the team continues to market our valuable tower portfolio."
Announced Transactions and Exploration of Strategic Alternatives for UScellularOn May 24, 2024, Telephone and Data Systems, Inc. (TDS) and UScellular entered into a Securities Purchase Agreement to sell UScellular's wireless operations and select spectrum assets to T-Mobile US, Inc. (T-Mobile). The transaction is expected to close in mid-2025, subject to regulatory approvals and the satisfaction of customary closing conditions. When the proposed T-Mobile transaction closes, UScellular expects the UScellular Board of Directors to declare the first of potentially several, special dividends to UScellular shareholders.
On October 17, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement with Verizon Communications, Inc. (Verizon) to sell certain AWS, Cellular and PCS wireless spectrum licenses, subject to receipt of regulatory approvals, and agreed to grant Verizon certain rights to lease such licenses prior to the transaction close. Additionally, UScellular also entered into agreements with Nsight Spectrum, LLC and Nex-Tech Wireless, LLC for the sale of select spectrum licenses.
On November 6, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement with New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T Inc. to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses, subject to receipt of regulatory approvals, and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close.
Due to the pending transaction with T-Mobile, UScellular is not providing 2025 financial guidance.
Stock RepurchaseDuring the first quarter of 2025, UScellular repurchased 328,835 of its Common Shares for $21 million.
Conference Call InformationUScellular will hold a conference call on May 2, 2025 at 9:00 a.m. Central Time.
Access the live call on the Events & Presentations page of investors.uscellular.com or at https://events.q4inc.com/attendee/224819726
Access the call by phone at [phone] conference ID: 1328528.
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 UScellularUnited States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to customers with 4.4 million retail connections in 21 states. The Chicago-based company had 4,100 full- and part-time associates as of March 31, 2025. At the end of the first quarter of 2025, Telephone and Data Systems, Inc. owned approximately 83 percent of UScellular. For more information about UScellular, 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, including with respect to the expected closing date of the transaction with T-Mobile. 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: whether the announced transactions whereby UScellular has agreed to sell its wireless operations and selected spectrum assets will be successfully completed. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of UScellular's Form 10-K, as updated by any UScellular Form 10-Q filed subsequent to such Form 10-K.
For more information about UScellular, visit: www.uscellular.com
United States Cellular Corporation
Summary Operating Data (Unaudited)
As of or for the Quarter Ended
3/31/202512/31/20249/30/20246/30/20243/31/2024
Retail ConnectionsPostpaidTotal at end of period1
3,946,0003,985,0003,999,0004,027,0004,051,000
Gross additions
105,000140,000123,000117,000106,000
Handsets
68,00093,00084,00073,00063,000
Connected devices
37,00047,00039,00044,00043,000
Net additions (losses)1
(39,000)(14,000)(28,000)(24,000)(44,000)
Handsets
(38,000)(19,000)(28,000)(29,000)(47,000)
Connected devices
(1,000)5,000—5,0003,000
ARPU2
$ 52.06$ 51.73$ 52.04$ 51.45$ 51.96
ARPA3
$ 132.25$ 131.10$ 131.81$ 130.41$ 132.00
Handset upgrade rate4
3.1 %4.8 %3.5 %4.1 %4.5 %
Churn rate5
1.21 %1.29 %1.25 %1.16 %1.22 %
Handsets
1.03 %1.08 %1.07 %0.97 %1.03 %
Connected devices
2.40 %2.67 %2.47 %2.47 %2.52 %
PrepaidTotal at end of period1
431,000448,000452,000439,000436,000
Gross additions
38,00046,00057,00050,00041,000
Net additions (losses)1
(17,000)(4,000)13,0003,000(13,000)
ARPU2
$ 30.76$ 30.59$ 32.01$ 32.37$ 32.25
Churn rate5
4.17 %3.70 %3.30 %3.60 %4.06 %
Market penetration at end of periodConsolidated operating population
31,390,00032,550,00032,550,00032,550,00032,550,000
Consolidated operating penetration6
17 %15 %15 %15 %14 %
Capital expenditures (millions)
$ 53$ 162$ 120$ 165$ 131
Total cell sites in service
7,0097,0107,0076,9906,995
Owned towers
4,4134,4094,4074,3884,382
Number of colocations7
2,4692,4442,4182,3922,397
Tower tenancy rate8
1.561.551.551.551.55
1
First quarter 2024 connections were adjusted to remove subscribers that could no longer access the UScellular network due to the CDMA shutdown. This resulted in 11,000 and 2,000 subscribers removed from the postpaid and prepaid base, respectively, that are not included in Net additions (losses) for the quarter.
2
Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below:• Postpaid ARPU consists of total postpaid service revenues and postpaid connections.• Prepaid ARPU consists of total prepaid service revenues and prepaid connections.
3
Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.
4
Handset upgrade rate calculated as total handset upgrade transactions divided by average postpaid handset connections.
5
Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.
6
Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets.
7
Represents instances where a third-party wireless carrier rents or leases space on a company-owned tower.
8
Average number of tenants that lease space on company-owned towers, measured on a per-tower basis.
United States Cellular Corporation
Consolidated Statement of Operations Highlights
(Unaudited)Three Months Ended
March 31,202520242025
vs. 2024
(Dollars and shares in millions, except per share amounts)Operating revenuesService
$ 741$ 754(2) %
Equipment sales
150196(24) %
Total operating revenues
891950(6) %
Operating expensesSystem operations (excluding Depreciation, amortization and accretion reported below)
176182(3) %
Cost of equipment sold
178216(18) %
Selling, general and administrative
332331—
Depreciation, amortization and accretion
163165(2) %
(Gain) loss on asset disposals, net
26(65) %
(Gain) loss on license sales and exchanges, net
(1)(1)18 %
Total operating expenses
850899(5) %
Operating income
4151(19) %
Other income (expense)Equity in earnings of unconsolidated entities
3642(14) %
Interest and dividend income
3220 %
Interest expense
(40)(43)10 %
Total other income (expense)
(1)1N/M
Income before income taxes
4052(22) %
Income tax expense
2028(26) %
Net income
2024(17) %
Less: Net income attributable to noncontrolling interests, net of tax
26(75) %
Net income attributable to UScellular shareholders
$ 18$ 183 %
Basic weighted average shares outstanding
8585—
Basic earnings per share attributable to UScellular shareholders
$ 0.21$ 0.213 %
Diluted weighted average shares outstanding
8888—
Diluted earnings per share attributable to UScellular shareholders
$ 0.21$ 0.202 %
N/M - Percentage change not meaningful
United States Cellular Corporation
Consolidated Statement of Cash Flows
(Unaudited)Three Months Ended
March 31,20252024
(Dollars in millions)Cash flows from operating activitiesNet income
$ 20$ 24
Add (deduct) adjustments to reconcile net income to net cash flows from operating activitiesDepreciation, amortization and accretion
163165
Bad debts expense
2029
Stock-based compensation expense
1713
Deferred income taxes, net
(8)4
Equity in earnings of unconsolidated entities
(36)(42)
Distributions from unconsolidated entities
1122
(Gain) loss on asset disposals, net
26
(Gain) loss on license sales and exchanges, net
(1)(1)
Other operating activities
11
Changes in assets and liabilities from operationsAccounts receivable
116
Equipment installment plans receivable
382
Inventory
124
Accounts payable
(17)(15)
Customer deposits and deferred revenues
(8)5
Accrued taxes
2923
Accrued interest
99
Other assets and liabilities
(82)(82)
Net cash provided by operating activities
160203
Cash flows from investing activitiesCash paid for additions to property, plant and equipment
(72)(133)
Cash paid for licenses
(2)(11)
Net cash used in investing activities
(74)(144)
Cash flows from financing activitiesIssuance of long-term debt
—40
Repayment of long-term debt
(5)(55)
Tax payments, net of cash receipts, for stock-based compensation awards
(7)—
Repurchase of Common Shares
(21)—
Distributions to noncontrolling interests
(2)(2)
Cash paid for software license agreements
(9)(9)
Other financing activities
—(2)
Net cash used in financing activities
(44)(28)
Net increase in cash, cash equivalents and restricted cash
4231
Cash, cash equivalents and restricted cashBeginning of period
159179
End of period
$ 201$ 210
United States Cellular Corporation
Consolidated Balance Sheet Highlights
(Unaudited)ASSETSMarch 31, 2025December 31, 2024
(Dollars in millions)Current assetsCash and cash equivalents
$ 182$ 144
Accounts receivable, net
925955
Inventory, net
178179
Prepaid expenses
6346
Other current assets
2521
Total current assets
1,3731,345
Assets held for sale
1—
Licenses
4,5814,579
Investments in unconsolidated entities
479454
Property, plant and equipment, net
2,3942,502
Operating lease right-of-use assets
925926
Other assets and deferred charges
612643
Total assets
$ 10,365$ 10,449
United States Cellular Corporation
Consolidated Balance Sheet Highlights
(Unaudited)LIABILITIES AND EQUITYMarch 31, 2025December 31, 2024
(Dollars in millions, except per share amounts)Current liabilitiesCurrent portion of long-term debt
$ 26$ 22
Accounts payable
207242
Customer deposits and deferred revenues
231238
Accrued taxes
5730
Accrued compensation
3393
Short-term operating lease liabilities
140141
Other current liabilities
113118
Total current liabilities
807884
Deferred liabilities and creditsDeferred income tax liability, net
720728
Long-term operating lease liabilities
824822
Other deferred liabilities and credits
570570
Long-term debt, net
2,8292,837
Noncontrolling interests with redemption features
1616
EquityUScellular shareholders' equitySeries A Common and Common Shares, par value $1.00 per share
8888
Additional paid-in capital
1,8001,783
Treasury shares
(125)(112)
Retained earnings
2,8222,818
Total UScellular shareholders' equity
4,5854,577
Noncontrolling interests
1415
Total equity
4,5994,592
Total liabilities and equity
$ 10,365$ 10,449
United States Cellular Corporation
Segment Results
(Unaudited)Three Months Ended
March 31,
UScellular
202520242025vs. 2024
(Dollars in millions)Operating RevenuesWireless
$ 864$ 925(7) %
Towers
61585 %
Intra-company eliminations
(34)(33)(3) %
Total operating revenues
891950(6) %
Operating expensesWireless
844896(6) %
Towers
403611 %
Intra-company eliminations
(34)(33)(3) %
Total operating expenses
850899(5) %
Operating income
$ 41$ 51(19) %
Adjusted OIBDA1 (Non-GAAP)
$ 215$ 228(6) %
Adjusted EBITDA1 (Non-GAAP)
$ 254$ 272(7) %
Capital expenditures
$ 53$ 131(60) %
1
Adjusted OIBDA and Adjusted EBITDA are non-GAAP financial measures which UScellular uses as measurements of profitability. See EBITDA, Adjusted EBITDA and Adjusted OIBDA Reconciliations within this earnings release for additional information.
United States Cellular Corporation
Segment Results
(Unaudited)Three Months Ended
March 31,
UScellular Wireless
202520242025vs. 2024
(Dollars in millions)Retail service
$ 660$ 678(3) %
Other
54518 %
Service revenues
714729(2) %
Equipment sales
150196(24) %
Total operating revenues
864925(7) %
System operations (excluding Depreciation, amortization and accretion reported below)
191197(3) %
Cost of equipment sold
178216(18) %
Selling, general and administrative
322324—
Depreciation, amortization and accretion
152154(2) %
(Gain) loss on asset disposals, net
26(73) %
(Gain) loss on license sales and exchanges, net
(1)(1)18 %
Total operating expenses
844896(6) %
Operating income
$ 20$ 29(30) %
Adjusted OIBDA1 (Non-GAAP)
$ 182$ 195(7) %
Adjusted EBITDA1 (Non-GAAP)
$ 182$ 195(7) %
Capital expenditures
$ 51$ 127(60) %Three Months Ended
March 31,
UScellular Towers
202520242025vs. 2024
(Dollars in millions)Third-party revenues
$ 27$ 256 %
Intra-company revenues
34333 %
Total tower revenues
61585 %
System operations (excluding Depreciation, amortization and accretion reported below)
19184 %
Selling, general and administrative
10733 %
Depreciation, amortization and accretion
11115 %
Total operating expenses
403611 %
Operating income
$ 21$ 22(5) %
Adjusted OIBDA1 (Non-GAAP)
$ 33$ 33(1) %
Adjusted EBITDA1 (Non-GAAP)
$ 33$ 33(1) %
Capital expenditures
$ 2$ 4(42) %
1
Adjusted OIBDA and Adjusted EBITDA are non-GAAP financial measures which UScellular uses as measurements of profitability. See EBITDA, Adjusted EBITDA and Adjusted OIBDA Reconciliations within this earnings release for additional information.
United States Cellular Corporation
Financial Measures
(Unaudited)
Free Cash FlowThree Months Ended
March 31,
UScellular
20252024
(Dollars in millions)Cash flows from operating activities (GAAP)
$ 160$ 203
Cash paid for additions to property, plant and equipment
(72)(133)
Cash paid for software license agreements
(9)(9)
Free cash flow (Non-GAAP)1
$ 79$ 61
1
Free cash flow is a non-GAAP financial measure which UScellular believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.
United States Cellular CorporationEBITDA, Adjusted EBITDA and Adjusted OIBDA Reconciliations(Unaudited)
EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliations below. EBITDA, Adjusted EBITDA and Adjusted OIBDA 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 or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. UScellular does not intend to imply that any such items set forth in the reconciliations below are infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of UScellular's operating results before significant recurring non-cash charges, nonrecurring expenses, gains and losses, and other items as presented below as they provide additional relevant and useful information to investors and other users of UScellular's financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review of UScellular while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income, Income before income taxes and/or Operating income. Income and expense items below Operating income are not provided at the individual segment level for UScellular Wireless and UScellular Towers; therefore, the reconciliations begin with EBITDA and the most directly comparable GAAP measure is Operating income rather than Net income at the segment level.Three Months Ended
March 31,
UScellular
20252024
(Dollars in millions)Net income (GAAP)
$ 20$ 24
Add back or deduct:Income tax expense
2028
Income before income taxes (GAAP)
4052
Add back:Interest expense
4043
Depreciation, amortization and accretion expense
163165
EBITDA (Non-GAAP)
243260
Add back or deduct:Expenses related to strategic alternatives review
107
(Gain) loss on asset disposals, net
26
(Gain) loss on license sales and exchanges, net
(1)(1)
Adjusted EBITDA (Non-GAAP)
254272
Deduct:Equity in earnings of unconsolidated entities
3642
Interest and dividend income
32
Adjusted OIBDA (Non-GAAP)
$ 215$ 228Three Months Ended
March 31,
UScellular Wireless
20252024
(Dollars in millions)EBITDA (Non-GAAP)
$ 172$ 183
Add back or deduct:Expenses related to strategic alternatives review
97
(Gain) loss on asset disposals, net
26
(Gain) loss on license sales and exchanges, net
(1)(1)
Adjusted EBITDA and Adjusted OIBDA (Non-GAAP)
182195
Deduct:Depreciation, amortization and accretion
152154
Expenses related to strategic alternatives review
97
(Gain) loss on asset disposals, net
26
(Gain) loss on license sales and exchanges, net
(1)(1)
Operating income (GAAP)
$ 20$ 29Three Months Ended
March 31,
UScellular Towers
20252024
EBITDA (Non-GAAP)
$ 32$ 33
Add back or deduct:Expenses related to strategic alternatives review
1—
Adjusted EBITDA and Adjusted OIBDA (Non-GAAP)
3333
Deduct:Depreciation, amortization and accretion
1111
Expenses related to strategic alternatives review
1—
Operating income (GAAP)
$ 21$ 22
View original content:https://www.prnewswire.com/news-releases/uscellular-reports-first-quarter-2025-results-302444834.html
SOURCE United States Cellular Corporation