U.S. Cellular(USM) - 2025 Q1 - Quarterly Report

Financial Performance - UScellular reported total operating revenues of $891 million for the three months ended March 31, 2025, a decrease of 6$950 million for the same period in 2024[25]. - Wireless operating revenues decreased by 7% to $864 million, while Towers segment revenues increased by 5$61 million[25]. - Operating income fell by 19% to $41 million, with net income attributable to UScellular shareholders remaining flat at$18 million[25]. - Adjusted OIBDA decreased by 6% to $215 million, and Adjusted EBITDA decreased by 7$254 million[25]. - Total operating revenues for the three months ended March 31, 2025, were $864 million, a decrease of 7$925 million in the same period of 2024[34]. - UScellular's net income for the three months ended March 31, 2025, was $20 million, compared to$24 million for the same period in 2024[86]. - Operating income for Q1 2025 was $41 million, a decrease of 19.6$51 million in Q1 2024[110]. - EBITDA for the three months ended March 31, 2025, was $243 million, compared to$260 million for the same period in 2024[86]. - Service revenues decreased to $741 million in Q1 2025, down from$754 million in Q1 2024, representing a decline of 1.7%[110]. - Equipment sales decreased to $150 million in Q1 2025, compared to$196 million in Q1 2024, reflecting a decline of 23.5%[134]. Capital Expenditures - Capital expenditures significantly decreased by 60% to $53 million compared to$131 million in the prior year[25]. - Capital expenditures for the wireless segment significantly decreased by 60% to $51 million in Q1 2025 from$127 million in Q1 2024[34]. - Capital expenditures decreased by $78 million or 60$2.918 billion, with a weighted average interest rate of 6.1%[107]. - Approximately 70% of UScellular's long-term debt is in fixed-rate senior notes, while 30% is in variable-rate debt[105]. - UScellular's consolidated leverage ratio is required to be maintained at a maximum of 4.00 to 1.00 until March 31, 2025, and then reduced to 3.75 to 1.00 thereafter[62]. - UScellular has an unsecured revolving credit agreement with a maximum borrowing capacity of $300 million, with no outstanding borrowings as of March 31, 2025[160]. - UScellular's outstanding borrowings under term loan agreements were$718 million as of March 31, 2025, with maximum borrowing capacities of $800 million[162]. Shareholder Actions - The company repurchased 328,835 common shares for$21 million at an average cost of $63.49 per share during the three months ended March 31, 2025[71]. - The maximum number of shares that may yet be purchased under the stock repurchase plan is 658,107 shares[197]. - UScellular anticipates declaring special dividends to shareholders following the completion of the T-Mobile transaction, pending regulatory approval[72]. Network and Operations - The company continues to enhance its network capabilities by deploying 5G technology to meet growing customer demand for data services[20]. - UScellular serves approximately 4.4 million retail connections, including about 3.9 million postpaid and 0.4 million prepaid connections[13]. - UScellular incurred third-party expenses related to announced transactions of$10 million for the three months ended March 31, 2025, compared to $7 million in the same period of 2024[21]. - Total tower revenues increased by 5$61 million in Q1 2025, up from $58 million in Q1 2024, driven by new colocations and rent escalations[45]. Transactions and Sales - The company is in the process of selling its wireless operations and select spectrum assets to T-Mobile for a total purchase price of$4,400 million, expected to close in mid-2025[15]. - UScellular entered into agreements to sell wireless spectrum licenses to Verizon and AT&T for total proceeds of $1,000 million and$1,018 million, respectively, both transactions subject to regulatory approval[17][18]. - UScellular agreed to sell its wireless operations and select spectrum assets to T-Mobile for a purchase price of $4,400 million, with approximately$2,000 million in debt assumption[151]. - UScellular entered into a License Purchase Agreement with Verizon for certain wireless spectrum licenses, expecting total proceeds of $1,000 million, with a book value of$586 million as of March 31, 2025[152]. - UScellular also signed a License Purchase Agreement with AT&T for certain wireless spectrum licenses, with total proceeds of $1,018 million and a book value of$859 million as of March 31, 2025[153]. Customer Metrics - UScellular's retail connections decreased to 4,377,000 as of March 31, 2025, down from 4,487,000 in 2024, representing a decline of 2.5%[29]. - Postpaid revenue average revenue per user (ARPU) increased slightly to $52.06 in Q1 2025 from$51.96 in Q1 2024, while average revenue per account (ARPA) rose to $132.25 from$132.00[32]. - Total postpaid handset net losses decreased by 11% to 39,000 in Q1 2025 compared to 44,000 in Q1 2024, attributed to increased gross additions and reduced defections[30]. Cash Flow and Assets - Cash flows from operating activities for Q1 2025 were $160 million, down from$203 million in Q1 2024[89]. - Free cash flow for the three months ended March 31, 2025, was $79 million, an increase from$61 million in the same period of 2024[89]. - Total current assets increased to $1,373 million as of March 31, 2025, compared to$1,345 million at the end of 2024, reflecting a growth of 2.08%[114]. - Cash and cash equivalents rose to $182 million, up 26.39$144 million at the end of 2024[114]. - Total assets decreased to $10,365 million as of March 31, 2025, from$10,449 million at the end of 2024, a decline of 0.81%[114].