Financial Performance - U.S. Cellular Corporation reported a net income of $18 million or 21 cents per share, compared to $18 million or 20 cents in the prior-year quarter, missing the Zacks Consensus Estimate by 16 cents [2] - The company generated $891 million in operating revenues, down from $950 million in the prior-year quarter, also missing the Zacks Consensus Estimate of $925 million [2] - Service revenues decreased to $741 million from $754 million, while equipment sales fell to $150 million from $196 million in the prior-year quarter [3] Customer Metrics - Fixed wireless customers grew by 21% year over year to 150,000, while total postpaid connections declined to 3,946,000 from 4,051,000 in the year-earlier quarter [3][4] - Handset connections increased to 68,000 from 63,000 in the prior-year quarter, with a churn rate of 1.03%, unchanged from the previous year [4] - Prepaid connections decreased to 431,000 from 436,000 in the year-ago quarter, with a prepaid churn rate increasing to 4.17% from 4.06% [4][5] Revenue Metrics - Postpaid average revenues per account improved to $132.25 from $132 in the year-ago quarter, while postpaid ARPU rose to $52.06 from $51.96 [5] - Prepaid ARPU decreased to $30.76 from $32.25 in the prior-year quarter [5] Operational Efficiency - Adjusted EBITDA for the quarter was $254 million, down from $272 million in the prior-year quarter, while adjusted OIBDA decreased to $215 million from $228 million [6] - Total operating expenses were $850 million, down 5% year over year, with operating income reported at $41 million compared to $51 million in the prior-year quarter [6] Cash Flow and Liquidity - U.S. Cellular generated $160 million of cash from operating activities, down from $203 million in the year-ago quarter [7] - As of March 31, 2025, the company had $182 million in cash and cash equivalents and $2.82 billion in long-term debt [7]

Group 1 - United States Cellular Corporation (NYSE: USM) reported Q1 2025 results on May 2, leading to a stock drop of over 8% post-earnings [1] - The market reaction indicates a negative sentiment towards the company's performance, which may reflect underlying issues in its business model or competitive positioning [1] Group 2 - The analysis emphasizes the importance of business analysis, fundamental analysis, valuation, and long-term growth in sectors such as AI, fintech, finance, and tech [1] - The focus is on understanding publicly traded companies through their business models, earnings performance, and competitive positioning [1]

Financial Data and Key Metrics Changes - The company reported a year-over-year increase in free cash flow of $79 million for Q1 2025, an increase of $18 million compared to the same quarter last year [14] - Total operating revenues decreased by 3% compared to the prior year, impacted by divestitures and declines in commercial and wholesale revenue [47] - Cash expenses increased by 6% or $11 million in the quarter compared to the prior year, with part of the increase attributed to stock-based compensation adjustments [47] Business Line Data and Key Metrics Changes - The company saw a 6% increase in third-party tower revenues due to new co-locations and escalators on renewed leases [13] - Fiber service addresses grew by 6% year-over-year, with 14,000 new addresses delivered in the quarter [19][36] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [37][40] Market Data and Key Metrics Changes - The company continues to face competitive pressures in the wireless market, with aggressive promotions from competitors impacting service revenues [15] - The fiber strategy is expected to drive growth, with a target of achieving 40% average penetration in steady state within five years after launch [41] Company Strategy and Development Direction - The company is focused on completing the transaction with T-Mobile, which is expected to close in mid-2025, and is preparing for a smooth transition [9][10] - Post-transaction, the company plans to declare a special dividend to shareholders, with proceeds expected to be used to repay outstanding bank debt [11][19] - The company is also investing in its fiber program, aiming to expand its footprint and improve operational efficiency [39][100] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business [13][18] - The company expects to continue facing competitive pressures but believes the T-Mobile transaction will provide better competitive choices and connectivity experiences for customers [16][17] - Management is confident in achieving $100 million in annual cost savings by 2028 through transformation efforts [39][78] Other Important Information - The company does not plan to redeem its Series UU and Series BV preferred stock, viewing them as foundational capital for future operations [11][73] - The company is actively evaluating its portfolio for potential divestitures, particularly in copper markets without an economic path to fiber [99] Q&A Session Summary Question: Timing of designated entity spectrum approval - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a positive outcome [58] Question: Free cash flow run rate - The reported free cash flow of $79 million is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [60][61] Question: Debt exchange offer impact - The debt exchange offer will be launched about 50 days before the anticipated close, and the amount of debt exchanged will impact the purchase price [62][111] Question: Fiber net adds and sales efforts - Fiber net adds were lower due to timing of address delivery, but as construction ramps up, net adds are expected to improve [66] Question: Rationale for remaining a public entity - The incremental cost to operate as a public company is minimal, and there are no immediate incentives to collapse the structure [107][108]

Financial Data and Key Metrics Changes - Total operating revenues decreased by 3% year over year, impacted by divestitures and declines in commercial and wholesale revenue, as well as decreases in residential video and voice connections [44] - Free cash flow for Q1 2025 was $79 million, an increase of $18 million compared to the same quarter last year [13][19] - Cash expenses increased by 6% or $11 million compared to the prior year, with $4 million of this increase attributed to a cumulative non-cash adjustment to stock-based compensation [44] Business Line Data and Key Metrics Changes - Postpaid handset results showed year-over-year improvements, while third-party tower revenues increased by 6% due to new co-locations and escalators on renewed leases [12] - Fiber service addresses grew by 6% year over year, with 14,000 new addresses delivered in the quarter [33][42] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [34][38] Market Data and Key Metrics Changes - The company continues to face aggressive promotional competition in the wireless industry, with competitors offering multi-year price locks and aggressive pricing [14] - Demand for higher broadband speeds remains strong, with 82% of residential broadband customers taking 100 megabits or higher and 24% taking one gig or higher at the end of the quarter [42] Company Strategy and Development Direction - The company is focused on completing the proposed transaction with T-Mobile, which is expected to close in mid-2025, and is preparing for a smooth transition [9][16] - A special dividend to shareholders is anticipated following the closing of the T-Mobile transaction, with proceeds expected to be used to repay outstanding bank debt [10][18] - The fiber program has expanded the company's footprint by over 30% in the last three years, with further growth opportunities identified [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business and fiber expansion [7][12] - The company is focused on cost optimization and expects capital expenditures to decline in 2025 as planned 5G coverage builds are largely completed [13][46] - Management expressed confidence in achieving $100 million in annual cost savings by the end of 2028 through transformation efforts [35][72] Other Important Information - The company does not plan to redeem Series UU and Series BV preferred stock, viewing them as foundational capital for future operations [10][68] - The expected cash income tax obligations related to the T-Mobile transaction are estimated to be between $225 million and $325 million [28][30] Q&A Session Summary Question: Timeline for designated entity spectrum approval - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a positive outcome [52][54] Question: Free cash flow run rate - The $79 million in free cash flow is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [55] Question: Debt exchange offer impact - The debt exchange offer will be launched about 50 days before the anticipated close, and the amount of debt exchanged will impact transaction proceeds [56][110] Question: Fiber net adds and sales efforts - Fiber net additions were lower due to timing of address delivery, but management expects improvements as construction activity ramps up [60][62] Question: Divestiture strategy and criteria - The company is focused on divesting non-core assets, particularly isolated copper markets without an economic path to fiber, ensuring that net proceeds exceed the present value of cash flows from continued operations [95][96]

Core Viewpoint - U.S. Cellular reported quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.37 per share, representing an earnings surprise of -43.24% [1] - The company posted revenues of $891 million for the quarter, missing the Zacks Consensus Estimate by 3.72% and down from $950 million a year ago [2] Financial Performance - Over the last four quarters, U.S. Cellular has surpassed consensus EPS estimates three times [2] - The company had a previous quarter surprise of 150%, with actual earnings of $0.05 against an expected loss of $0.10 [1] - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $912.36 million, and for the current fiscal year, it is $1.16 on revenues of $3.69 billion [7] Stock Performance - U.S. Cellular shares have increased by approximately 9.8% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Wireless National industry, to which U.S. Cellular belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Part I. Financial Information [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=3&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) UScellular's Q1 2025 financial performance declined due to wireless segment pressures, while the company undergoes a major strategic transformation with pending sales of its wireless operations to T-Mobile for $4.4 billion and spectrum to Verizon and AT&T [Executive Overview](index=3&type=section&id=Executive%20Overview) UScellular is undergoing a major strategic shift, highlighted by the announced sale of its wireless operations and select spectrum to T-Mobile for **$4.4 billion**, alongside separate spectrum sales to Verizon for **$1 billion** and AT&T for **$1.018 billion**, all expected to close mid-2025 - UScellular has agreed to sell its wireless operations and select spectrum assets to T-Mobile for **$4.4 billion**, which includes a combination of cash and the assumption of up to approximately **$2.0 billion** in debt. The transaction is expected to close in mid-2025[15](index=15&type=chunk) - Separate agreements have been made to sell spectrum licenses to Verizon for **$1.0 billion** and to AT&T for **$1.018 billion**. These sales are contingent on the closing of the T-Mobile transaction[17](index=17&type=chunk)[18](index=18&type=chunk) - Upon closing the T-Mobile transaction, UScellular expects to incur significant one-time costs, including advisory fees, employee compensation and severance, debt extinguishment, and tower decommissioning costs[16](index=16&type=chunk) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Third-party expenses related to strategic review | $10 million | $7 million | [Overall Financial Performance](index=8&type=section&id=Financial%20Overview%20%E2%80%94%20UScellular) UScellular's Q1 2025 total operating revenues decreased **6% to $891 million**, with operating income falling **19% to $41 million**, while capital expenditures were significantly reduced by **60% to $53 million** | Financial Metric (in millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $891 | $950 | (6)% | | Operating Income | $41 | $51 | (19)% | | Net Income (to shareholders) | $18 | $18 | 3% | | Adjusted OIBDA (Non-GAAP) | $215 | $228 | (6)% | | Adjusted EBITDA (Non-GAAP) | $254 | $272 | (7)% | | Capital Expenditures | $53 | $131 | (60)% | - Equity in earnings of unconsolidated entities, primarily from the LA Partnership, contributed **$15 million** in pre-tax income for Q1 2025, down from **$16 million** in Q1 2024[26](index=26&type=chunk) - Interest expense decreased due to a lower average principal balance on receivables securitization and term loan agreements[27](index=27&type=chunk) [Wireless Operations](index=10&type=section&id=Wireless%20Operations) The Wireless segment's operating revenue declined **7% to $864 million** in Q1 2025, driven by a **24% drop in equipment sales** and fewer connections, despite improved postpaid net losses amidst intense competition | Wireless Financials (in millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $864 | $925 | (7)% | | - Retail Service Revenues | $660 | $678 | (3)% | | - Equipment Sales | $150 | $196 | (24)% | | Operating Income | $20 | $29 | (30)% | | Adjusted EBITDA (Non-GAAP) | $182 | $195 | (7)% | | Postpaid Customer Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Net Losses | (39,000) | (44,000) | | - Handset Net Losses | (38,000) | (47,000) | | - Connected Device Net Losses | (1,000) | 3,000 (gain) | | Total Churn | 1.21% | 1.22% | - The decrease in retail service revenue was driven by a decline in average postpaid and prepaid connections. The drop in equipment sales revenue was due to fewer smartphone upgrades and a lower average sales price[37](index=37&type=chunk) - System operations expenses decreased due to the shutdown of the 3G CDMA network in Q1 2024[39](index=39&type=chunk) [Towers Operations](index=13&type=section&id=Towers%20Operations) The Towers segment's total revenue increased **5% to $61 million** in Q1 2025, driven by third-party revenues, though operating income dipped **5% to $21 million** due to higher expenses, with significant revenue composition changes expected post-T-Mobile transaction | Tower Operations Metrics | As of Mar 31, 2025 | As of Mar 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Owned towers | 4,413 | 4,382 | 1% | | Number of colocations | 2,469 | 2,397 | 3% | | Tower tenancy rate | 1.56 | 1.55 | 1% | | Towers Financials (in millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Tower Revenues | $61 | $58 | 5% | | - Third-party revenues | $27 | $25 | 6% | | Operating Income | $21 | $22 | (5)% | | Adjusted EBITDA (Non-GAAP) | $33 | $33 | (1)% | - Following the T-Mobile transaction, intra-company revenues will cease, but third-party revenues are expected to increase under a new Master License Agreement, leading to significantly lower total tower revenues[47](index=47&type=chunk) [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, UScellular maintained **$748 million** in available borrowing capacity, significantly reduced capital expenditures by **60% to $53 million**, and anticipates declaring special dividends to shareholders upon closing the T-Mobile transaction - As of March 31, 2025, UScellular had **$748 million** in total available undrawn borrowing capacity from its Revolving Credit and Receivables Securitization Agreements[56](index=56&type=chunk)[57](index=57&type=chunk) - In April 2025, UScellular amended its revolving credit and a term loan agreement to extend maturities to July 2027 and modify covenants, anticipating the proceeds from asset sales[59](index=59&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) | Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Capital Expenditures | $53 million | $131 million | (60)% | - During Q1 2025, UScellular repurchased **328,835 Common Shares** for **$21 million**[71](index=71&type=chunk) - Upon closing the T-Mobile transaction, the Board of Directors is expected to declare the first of potentially several special dividends to shareholders[72](index=72&type=chunk) [Consolidated Cash Flow Analysis](index=18&type=section&id=Consolidated%20Cash%20Flow%20Analysis) In Q1 2025, cash and cash equivalents increased by **$42 million**, with net cash from operating activities at **$160 million**, while investing activities used **$74 million** and financing activities used **$44 million** | Cash Flow Activity (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $160 | $203 | | Net cash used in investing activities | ($74) | ($144) | | Net cash used in financing activities | ($44) | ($28) | | Net increase in cash | $42 | $31 | - The decrease in operating cash flow in Q1 2025 was primarily driven by working capital changes, including payments for associate bonuses and other benefits[75](index=75&type=chunk) - Financing activities in Q1 2025 included **$21 million** for share repurchases, **$9 million** for software licenses, and **$5 million** in term loan repayments[76](index=76&type=chunk) [Non-GAAP Financial Measures](index=20&type=section&id=Supplemental%20Information%20Relating%20to%20Non-GAAP%20Financial%20Measures) UScellular utilizes non-GAAP measures like Adjusted EBITDA (**$254 million**) and Adjusted OIBDA (**$215 million**) for performance evaluation, with Free Cash Flow increasing to **$79 million** in Q1 2025 primarily due to lower capital expenditures | UScellular Reconciliation (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $20 | $24 | | EBITDA (Non-GAAP) | $243 | $260 | | Adjusted EBITDA (Non-GAAP) | $254 | $272 | | Adjusted OIBDA (Non-GAAP) | $215 | $228 | | Operating income (GAAP) | $41 | $51 | | Free Cash Flow (Non-GAAP, in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash flows from operating activities (GAAP) | $160 | $203 | | Less: Cash paid for additions to PP&E | ($72) | ($133) | | Less: Cash paid for software license agreements | ($9) | ($9) | | **Free cash flow (Non-GAAP)** | **$79** | **$61** | [Financial Statements (Unaudited)](index=27&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The unaudited consolidated financial statements for Q1 2025 report total operating revenues of **$891 million** and net income of **$20 million**, with total assets at **$10.365 billion**, reflecting ongoing operations before major divestitures [Consolidated Statement of Operations](index=29&type=section&id=Consolidated%20Statement%20of%20Operations) For Q1 2025, UScellular reported total operating revenues of **$891 million**, operating income of **$41 million**, and net income attributable to shareholders of **$18 million**, with basic and diluted EPS at **$0.21** | (in millions, except per share) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating revenues | $891 | $950 | | Operating income | $41 | $51 | | Net income attributable to UScellular shareholders | $18 | $18 | | Basic EPS | $0.21 | $0.21 | | Diluted EPS | $0.21 | $0.20 | [Consolidated Statement of Cash Flows](index=30&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities was **$160 million**, investing activities used **$74 million**, and financing activities used **$44 million**, leading to a **$42 million** net increase in cash and equivalents | (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $160 | $203 | | Net cash used in investing activities | ($72) | ($133) | | Net cash used in financing activities | ($44) | ($28) | | Net increase in cash, cash equivalents and restricted cash | $42 | $31 | | Cash, cash equivalents and restricted cash, end of period | $201 | $210 | [Consolidated Balance Sheet](index=31&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2025, UScellular's total assets were **$10.365 billion**, total liabilities **$5.766 billion**, and total shareholders' equity **$4.585 billion**, with significant assets in licenses and property, plant, and equipment | (in millions) | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $1,373 | $1,345 | | Licenses | $4,581 | $4,579 | | Property, plant and equipment, net | $2,394 | $2,502 | | **Total Assets** | **$10,365** | **$10,449** | | **Liabilities & Equity** | | | | Total current liabilities | $807 | $884 | | Long-term debt, net | $2,829 | $2,837 | | Total UScellular shareholders' equity | $4,585 | $4,577 | | **Total Liabilities & Equity** | **$10,365** | **$10,449** | [Note 6: Divestitures](index=39&type=section&id=Note%206%3A%20Divestitures) Note 6 details UScellular's pending divestitures, including the sale of wireless operations and select spectrum to T-Mobile for **$4.4 billion**, and separate spectrum sales to Verizon for **$1 billion** and AT&T for **$1.018 billion**, all expected to close mid-2025 - Agreement to sell wireless operations and select spectrum assets to T-Mobile for **$4.4 billion**, consisting of cash and assumption of up to **~$2 billion** in debt[151](index=151&type=chunk) - Agreement to sell certain spectrum licenses to Verizon for **$1.0 billion** (book value **$586 million**)[152](index=152&type=chunk) - Agreement to sell certain spectrum licenses to AT&T for **$1.018 billion** (book value **$859 million**)[153](index=153&type=chunk) - Third-party expenses related to these transactions were **$10 million** for Q1 2025[155](index=155&type=chunk) [Note 10: Business Segment Information](index=44&type=section&id=Note%2010%3A%20Business%20Segment%20Information) Note 10 outlines UScellular's Wireless and Towers segments, with Q1 2025 external revenues of **$864 million** and **$27 million** respectively, contributing to a total Segment Adjusted EBITDA of **$215 million** | Q1 2025 Segment Performance (in millions) | Wireless | Towers | Total | | :--- | :--- | :--- | :--- | | Revenues from external customers | $864 | $27 | $891 | | Intersegment revenues | $0 | $34 | $34 | | **Segment Adjusted EBITDA (Non-GAAP)** | **$182** | **$33** | **$215** | | Q1 2024 Segment Performance (in millions) | Wireless | Towers | Total | | :--- | :--- | :--- | :--- | | Revenues from external customers | $925 | $25 | $950 | | Intersegment revenues | $0 | $33 | $33 | | **Segment Adjusted EBITDA (Non-GAAP)** | **$195** | **$33** | **$228** | [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of March 31, 2025, UScellular's **$2.918 billion** long-term debt is approximately **70% fixed-rate** and **30% variable-rate**, exposing the company to interest rate risk with significant principal payments due in 2026 and 2028 - As of March 31, 2025, approximately **70% of long-term debt was fixed-rate** and **30% was variable-rate**[105](index=105&type=chunk) | Principal Payments Due by Period (in millions) | Long-Term Debt Obligations | Weighted-Avg. Interest Rate | | :--- | :--- | :--- | | Remainder of 2025 | $17 | 6.1% | | 2026 | $228 | 5.9% | | 2027 | $158 | 6.0% | | 2028 | $286 | 6.4% | | Thereafter | $2,224 | 6.1% | | **Total** | **$2,918** | **6.1%** | Part II. Other Information [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to the potential non-consummation or costs of its announced T-Mobile, Verizon, and AT&T transactions, alongside operational challenges from intense competition, lack of scale, and regulatory uncertainties - **Transaction Risks:** There is no guarantee the T-Mobile, Verizon, or AT&T transactions will be consummated. Failure to close or costs associated with closing could have adverse effects on financial condition[97](index=97&type=chunk) - **Operational Risks:** Intense competition, lack of scale relative to larger competitors, and reliance on third parties for network construction and equipment supply pose significant risks to operations and profitability[97](index=97&type=chunk) - **Financial Risks:** A significant amount of indebtedness could affect financial performance. The company's concentration in the U.S. wireless industry makes it vulnerable to industry-specific downturns[100](index=100&type=chunk) - **Regulatory & Legal Risks:** The company faces risks from potential non-compliance with regulations, changes in regulatory support like the USF, and various legal proceedings, including patent infringement claims and shareholder lawsuits[100](index=100&type=chunk) [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) UScellular is involved in several legal proceedings, including a False Claims Act case, a settled stockholder class action, and three pending stockholder derivative lawsuits alleging breach of fiduciary duty - A False Claims Act lawsuit related to FCC auction bidding credits remains pending before an appellate court after one of two related matters was dismissed[188](index=188&type=chunk) - A settlement in principle was reached on February 28, 2025, for a putative stockholder class action lawsuit filed in May 2023[189](index=189&type=chunk) - Three separate stockholder derivative lawsuits have been filed making similar claims related to breach of fiduciary duty. The company is unable to determine the potential impact but will contest the claims[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [Share Repurchases](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, UScellular repurchased **328,835 Common Shares** for approximately **$21 million**, with **658,107 shares** remaining authorized for repurchase under its ongoing program | Period | Shares Purchased | Average Price Paid | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | Q1 2025 | 328,835 | $63.49 | $21 million | - As of March 31, 2025, the maximum number of shares that may yet be purchased under the company's plan is **658,107**[197](index=197&type=chunk)

Financial Performance - UScellular reported total operating revenues of $891 million for Q1 2025, a decrease of 6% from $950 million in Q1 2024[3]. - Service revenues for Q1 2025 were $741 million, down 2% from $754 million in the same period last year[20]. - Net income for the three months ended March 31, 2025, was $20 million, a decrease of 17% compared to $24 million in the same period of 2024[22]. - Total operating revenues decreased by 6% to $891 million in Q1 2025 from $950 million in Q1 2024, with wireless revenues down 7% to $864 million[28]. - Adjusted EBITDA for the three months ended March 31, 2025, was $254 million, down 7% from $272 million in the same period of 2024[28]. - Free cash flow for Q1 2025 was $79 million, an increase of 29% compared to $61 million in Q1 2024[32]. - Net income (GAAP) for Q1 2025 was $20 million, down from $24 million in Q1 2024, representing a decrease of 16.67%[35]. - Adjusted EBITDA (Non-GAAP) for Q1 2025 was $215 million, compared to $228 million in Q1 2024, reflecting a decline of 5.70%[35]. Operational Metrics - UScellular's postpaid gross additions were 105,000 in Q1 2025, while net losses improved to 39,000 compared to 14,000 in Q1 2024[18]. - The churn rate for postpaid connections was 1.21% in Q1 2025, an improvement from 1.29% in Q1 2024[18]. - UScellular's total retail connections at the end of Q1 2025 were 4.4 million, with 3.946 million postpaid connections[18]. - The company reported a 24% decline in equipment sales, totaling $150 million in Q1 2025 compared to $196 million in Q1 2024[30]. - Operating income for the wireless segment decreased by 30% to $20 million in Q1 2025 from $29 million in Q1 2024[30]. - Operating income (GAAP) for UScellular Wireless in Q1 2025 was $20 million, down from $29 million in Q1 2024, a decrease of 31.03%[35]. - Adjusted EBITDA for UScellular Wireless was $182 million in Q1 2025, compared to $195 million in Q1 2024, a decline of 6.67%[35]. Capital Expenditures and Assets - Capital expenditures for Q1 2025 were $53 million, significantly lower than $162 million in Q4 2024[18]. - Capital expenditures decreased significantly by 60% to $53 million in Q1 2025 from $131 million in Q1 2024[28]. - Total assets as of March 31, 2025, were $10,365 million, a slight decrease from $10,449 million at the end of 2024[26]. - Total current liabilities decreased to $807 million as of March 31, 2025, from $884 million at the end of 2024[26]. - Cash and cash equivalents increased to $182 million as of March 31, 2025, compared to $144 million at the end of 2024[24]. Shareholder Returns and Expenses - The company repurchased 328,835 common shares for $21 million during Q1 2025[10]. - Interest expense for UScellular was $40 million in Q1 2025, compared to $43 million in Q1 2024, a decrease of 6.98%[35]. - Expenses related to strategic alternatives review for UScellular Wireless increased to $9 million in Q1 2025 from $7 million in Q1 2024, an increase of 28.57%[35]. - Equity in earnings of unconsolidated entities was $36 million in Q1 2025, down from $42 million in Q1 2024, a decrease of 14.29%[35]. Future Outlook - Due to the pending sale of wireless operations to T-Mobile, UScellular is not providing financial guidance for 2025[8].

Company Overview - Telephone and Data Systems, Inc. (TDS) provides wireless, broadband, video, and voice services to approximately 5.5 million connections nationwide through its businesses, UScellular and TDS Telecom [2] - TDS was founded in 1969 and is headquartered in Chicago, employing approximately 7,900 associates as of December 31, 2024 [2] Upcoming Financial Results - TDS and UScellular will webcast their first quarter operating results conference call on May 2, 2025, at 9:00 a.m. Central Time [1] - The companies will release their financial results on the same day, May 2, 2025 [1] - The webcast will be available both live and on-demand, and it is recommended to register at least 15 minutes before the presentation [1]

Company Overview - United States Cellular (USM) shares increased by 5.3% to close at $65.94, with trading volume significantly higher than usual, contrasting with a 3% loss over the past four weeks [1] - The company is focused on accelerating subscriber additions and improving churn management, aiming to provide superior wireless experiences through enhanced network quality and national coverage [2] Financial Performance - U.S. Cellular is expected to report quarterly earnings of $0.37 per share, reflecting an 85% year-over-year increase, while revenues are projected at $925.42 million, a decrease of 2.6% from the previous year [3] - The consensus EPS estimate for U.S. Cellular has remained stable over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [4] Industry Context - U.S. Cellular operates within the Zacks Wireless National industry, where competitive pricing strategies, such as flat rate plans, are gaining traction among postpaid customers [2] - ATN International, another player in the same industry, has seen a significant EPS estimate change of -64.5% over the past month, with a current Zacks Rank of 1 (Strong Buy) [5]

Core Viewpoint - Shares of United States Cellular Corporation (USM) have increased by 91.7% over the past year, driven by strong performance in the wireless sector and rising earnings estimates for the current and next fiscal years, indicating significant growth potential [1] Group 1: Growth Drivers - U.S. Cellular is implementing strategies to boost subscriber growth and manage churn effectively, focusing on providing superior network quality and national coverage [2][8] - The company is expanding its market presence and adopting unlimited plans to increase average revenue per user, while also progressing with 5G deployment and network modernization [2][9] - Fixed wireless business is experiencing solid user engagement, with a 27% year-over-year growth in fixed wireless customers, reaching 145,000 [3] Group 2: Financial Strategies - U.S. Cellular is actively working to reduce its debt and improve liquidity by monetizing its spectrum holdings, including a $4.4 billion agreement with T-Mobile US Inc. to sell most of its wireless operations and 30% of its spectrum assets [4][5] - The divestiture will enhance liquidity and reduce debt, while also providing a steady revenue stream from T-Mobile as an anchor tenant on over 2,015 towers for 15 years [5] Group 3: Operational Initiatives - The company is focused on enhancing profitability through various initiatives, including a new billing system, continuous rollout of 4G LTE, and expansion of 5G device offerings [10] - U.S. Cellular aims to improve customer service and capitalize on business opportunities related to 5G and IoT, while managing data delivery costs effectively [10]