U.S. Cellular(USM) - 2020 Q1 - Quarterly Report

Management Discussion and Analysis of Financial Condition and Results of Operations Executive Overview U.S. Cellular's Q1 2020 results, compared to Q1 2019, show COVID-19 impacts from late March, as an 83%-owned TDS subsidiary - U.S. Cellular is an 83%-owned subsidiary of Telephone and Data Systems, Inc. (TDS)[12] - COVID-19 impacts in Q1 2020 (mainly late March) include higher bad debts, reduced subscriber gross additions, reduced defections/churn, and reduced device/accessory sales[14] - Company actions due to COVID-19: implemented work-from-home, closed/reduced hours for retail stores, participated in FCC Keep Americans Connected Pledge (resulting in reduced service revenues and increased bad debts), waived overage charges, contributed to Boys & Girls Clubs' COVID-19 Relief Fund, recognized income tax benefits from CARES Act[15] General Business and Strategy - Mission: Provide exceptional wireless communication services in mid-sized and rural markets[18] - Strategic efforts include: increasing revenues from accessories, device protection, LTE home internet, and business/government solutions; enhancing network capabilities with VoLTE (70% subscriber availability, further deployment in 2020-2021); launching commercial 5G services in Iowa and Wisconsin with further expansion in 2020 and beyond, focusing on mobility services and low-band spectrum, while acquiring high-band spectrum for future 5G services; modernizing 4G LTE network[19] - U.S. Cellular was the provisional winning bidder for 237 wireless spectrum licenses in Auction 103 for $146 million, expected to be granted in 2020[19] COVID-19 Considerations - COVID-19 impacts on Q1 2020 (mainly latter half of March) include higher bad debts expense, reduced subscriber gross additions, reduced defections and churn, and reduced device and accessory sales[14] - Company actions: implemented work-from-home, closed/reduced hours for retail stores, participated in FCC Keep Americans Connected Pledge (resulting in reduced service revenues and incremental bad debts), waived overage charges, contributed to Boys & Girls Clubs' COVID-19 Relief Fund, recognized income tax benefits from CARES Act[15] - Monitoring supply chain, network capacity, and roaming behaviors; expects to meet customer demand and continue 4G LTE modernization and 5G deployment without significant disruptions[15] Terms Used by U.S. Cellular This section defines key industry, customer, regulatory, and non-GAAP financial terms used in the report - Definitions for 4G LTE, 5G, VoLTE, Account, Churn Rate, Connections, Connected Devices, Gross Additions, Net Additions (Losses), Retail Connections, Postpaid ARPA, Postpaid ARPU[20] - Definitions for Auction 103, CARES Act, FCC Keep Americans Connected Pledge, Universal Service Fund (USF)[20] - Definitions for non-GAAP financial measures: EBITDA, Free Cash Flow, OIBDA[20] Operational Overview U.S. Cellular experienced decreased retail connections, increased postpaid handset net losses, and higher postpaid ARPU/ARPA year-over-year Retail Connections and Activity | Metric | Q1 2020 | Q1 2019 | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | Retail Connections – End of Period | | | | | Postpaid | 4,359,000 | 4,440,000 | (81,000) | | Prepaid | 494,000 | 503,000 | (9,000) | | Total | 4,853,000 | 4,943,000 | (90,000) | | Postpaid Activity and Churn | | | | | Handset Gross Additions | 90,000 | 102,000 | (12)% | | Connected Device Gross Additions | 42,000 | 35,000 | 20 % | | Total Gross Additions | 132,000 | 137,000 | (4)% | | Handset Net Additions (Losses) | (20,000) | (14,000) | (43)% | | Connected Device Net Additions (Losses) | (6,000) | (18,000) | 67 % | | Total Net Additions (Losses) | (26,000) | (32,000) | 19 % | | Handset Churn | 0.95% | 0.99% | (0.04)% | | Connected Devices Churn | 3.11% | 3.08% | 0.03% | | Total Churn | 1.21% | 1.26% | (0.05)% | - Postpaid handset net losses increased due to lower gross additions (aggressive competition, COVID-19 lower consumer switching) partially offset by decreased defections[22] - Postpaid connected device net losses decreased due to increased gross additions of hotspots and routers, driven by business/government demand for remote connectivity due to COVID-19[23] Postpaid Revenue (ARPU/ARPA) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | | :------------------ | :-------- | :-------- | :----------- | | Postpaid ARPU | $45.44 | $47.23 | 4 % | | Postpaid ARPA | $118.84 | $122.92 | 3 % | - Increases in Postpaid ARPU and ARPA were primarily due to a higher proportion of handset connections, increased regulatory recovery revenues, and increased device protection plan revenues[24] Financial Overview Total operating revenues were flat, with service revenues up and equipment sales down; operating income fell, but net income rose significantly due to CARES Act tax benefits Operating Revenues | Revenue Type | Q1 2020 (Millions) | Q1 2019 (Millions) | Change (YoY) | | :-------------------- | :----------------- | :----------------- | :----------- | | Retail service | $671 | $659 | 2 % | | Inbound roaming | $37 | $34 | 10 % | | Other service | $54 | $48 | 12 % | | Total Service revenues | $762 | $741 | 3 % | | Equipment sales | $201 | $225 | (10)% | | Total operating revenues | $963 | $966 | – | - Retail service revenues increased due to higher Postpaid ARPU[31] - Equipment sales revenues decreased due to lower volume of device sales to retail customers, agents, and third-party distributors, and a decrease in average revenue per device, partially offset by increased used device sales to service providers[33] Operating Expenses | Expense Type | Q1 2020 (Millions) | Q1 2019 (Millions) | Change (YoY) | | :---------------------------------------------------- | :----------------- | :----------------- | :----------- | | System operations (excluding D, A & A) | $180 | $176 | 2 % | | Cost of equipment sold | $217 | $233 | (7)% | | Selling, general and administrative | $335 | $326 | 3 % | | Depreciation, amortization and accretion | $177 | $169 | 5 % | | (Gain) loss on asset disposals, net | $4 | $2 | 72 % | | (Gain) loss on sale of business and other exit costs, net | $0 | $(2) | N/M | | (Gain) loss on license sales and exchanges, net | $0 | $(2) | N/M | | Total operating expenses | $913 | $902 | 1 % | - Selling, general and administrative expenses increased primarily due to higher bad debts expense (FCC Keep Americans Connected Pledge) and employee-related expenses, partially offset by lower advertising costs[36] - Depreciation, amortization, and accretion increased due to accelerated depreciation of certain assets from network technology changes[37] Other Income (Expense) and Net Income | Metric | Q1 2020 (Millions) | Q1 2019 (Millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Operating income | $50 | $64 | (22)% | | Equity in earnings of unconsolidated entities | $45 | $44 | 3 % | | Interest and dividend income | $4 | $6 | (33)% | | Interest expense | $(24) | $(29) | 19 % | | Other, net | $1 | $0 | (86)% | | Total investment and other income | $26 | $21 | 23 % | | Income before income taxes | $76 | $85 | (11)% | | Income tax expense | $4 | $27 | (86)% | | Net income | $72 | $58 | 24 % | | Net income attributable to U.S. Cellular shareholders | $71 | $54 | 30 % | - Interest expense decreased due to higher capitalized interest and a $100 million principal prepayment on a senior term loan in October 2019[40] - Income tax expense decreased significantly due to the CARES Act, which provided retroactive bonus depreciation and a 5-year carryback of net operating losses, resulting in a lower effective tax rate of 5.0% in Q1 2020 (vs. 31.4% in Q1 2019)[41][42] Liquidity and Capital Resources U.S. Cellular, a capital-intensive business, expects sufficient liquidity despite COVID-19, with higher 2020 capital expenditures for network and 5G deployment Sources of Liquidity and Cash Position - U.S. Cellular operates a capital-intensive business and has historically used internally-generated funds and external sources for general corporate purposes[43] - Believes existing cash, investments, revolving credit, receivables securitization agreements, and expected cash flows will provide sufficient liquidity for the coming year, despite COVID-19 uncertainties[44] | Metric | March 31, 2020 (Millions) | December 31, 2019 (Millions) | | :-------------------- | :-------------------------- | :--------------------------- | | Cash and cash equivalents | $258 | $285 | Financing Activities - New $300 million unsecured revolving credit agreement entered in March 2020, maturing March 2025, with $298 million unused capacity as of March 31, 2020[50] - Amended senior term loan credit agreement in March 2020 to conform with revolving credit agreement[51] - Receivables securitization agreement: $200 million unused capacity as of March 31, 2020; borrowed $125 million under it in April 2020[52] Capital Expenditures | Metric | Q1 2020 (Millions) | Q1 2019 (Millions) | | :-------------------- | :----------------- | :----------------- | | Capital expenditures | $236 | $102 | - Full-year 2020 capital expenditures expected to be between $850 million and $950 million[55] - Expenditures are for enhancing network coverage, deploying VoLTE and 5G technology, and investing in information technology[57] Acquisitions, Divestitures and Exchanges - U.S. Cellular actively seeks attractive opportunities to acquire wireless spectrum licenses, including through FCC auctions[56] - Provisional winning bidder for 237 wireless spectrum licenses in Auction 103 for $146 million in March 2020[58] - Paid $24 million in Q1 2020 and substantially all remainder in April 2020 for Auction 103 licenses[58] Common Share Repurchase Program - Repurchased 803,836 Common Shares for $23 million at an average cost of $29.00 per share during Q1 2020[60] - Total cumulative authorized repurchase amount as of March 31, 2020: 4,506,713 Common Shares[60] Consolidated Cash Flow Analysis Operating cash flow increased to $342 million, while investing cash flow used significantly rose to $342 million due to higher capital expenditures and license acquisitions, leading to an overall $24 million decrease in cash | Cash Flow Activity | Q1 2020 (Millions) | Q1 2019 (Millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Net cash provided by operating activities | $342 | $287 | $55 | | Net cash used in investing activities | $(342) | $(212) | $(130) | | Net cash used in financing activities | $(24) | $(6) | $(18) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(24) | $69 | $(93) | - Operating cash flow increase driven by net income adjusted for non-cash items, distributions from unconsolidated entities, and working capital changes (timing of vendor payments, customer/agent receivables, partially offset by bonus payments, inventory increase, and CARES Act tax impacts)[65] - Investing cash flow increase primarily due to higher cash paid for additions to property, plant and equipment ($315 million in 2020 vs. $107 million in 2019) and wireless spectrum license acquisitions ($26 million in 2020 vs. $1 million in 2019, excluding advance payments)[66][68][104] Consolidated Balance Sheet Analysis Key balance sheet changes include decreased accounts receivable, increased inventory, higher income taxes receivable from CARES Act benefits, and lower accrued compensation - Accounts receivable decreased $80 million due primarily to timing of customer payments and vendor credits[70] - Inventory, net increased $50 million due primarily to increased quantities of higher priced devices on hand[71] - Income taxes receivable increased $50 million primarily reflecting future tax refunds attributable to the expected carryback of 2020 net operating losses, as allowed under the CARES Act[72] - Accrued compensation decreased $29 million due primarily to employee bonus payments in March 2020[73] Supplemental Information Relating to Non-GAAP Financial Measures U.S. Cellular uses non-GAAP measures; Adjusted EBITDA and OIBDA remained flat, while Free Cash Flow significantly decreased to $27 million due to higher capital expenditures - Non-GAAP measures used: EBITDA, Adjusted EBITDA, Adjusted OIBDA, Free Cash Flow[75] - Management uses Adjusted EBITDA and Adjusted OIBDA as profitability measurements, providing additional relevant information by excluding significant non-cash charges, gains, losses, and investment activities[77] | Non-GAAP Metric | Q1 2020 (Millions) | Q1 2019 (Millions) | Change (YoY) | | :---------------------- | :----------------- | :----------------- | :----------- | | EBITDA | $277 | $283 | $(6) | | Adjusted EBITDA | $281 | $281 | $0 | | Adjusted OIBDA | $231 | $231 | $0 | | Free Cash Flow | $27 | $180 | $(153) | Application of Critical Accounting Policies and Estimates This section refers to U.S. Cellular's significant accounting policies and critical estimates detailed in its 2019 Form 10-K and current report notes - Significant accounting policies are discussed in Note 1, Note 2, and Note 10 of the current report and in the Form 10-K for December 31, 2019[81] Recent Accounting Pronouncements U.S. Cellular adopted ASU 2016-13 (Credit Losses) and ASU 2018-15 (Cloud Computing) on January 1, 2020, with no significant financial impact - Adopted ASU 2016-13 (Credit Losses) on January 1, 2020, using a modified retrospective method; no impact on retained earnings[126] - Adopted ASU 2018-15 (Cloud Computing Arrangement Implementation Costs) on January 1, 2020, using the prospective method; no significant impact on financial position or results of operations[129] Regulatory Matters The FCC is proposing a $9 billion 5G Fund for rural areas, its 2017 'Restoring Internet Freedom' rules were largely reaffirmed, and U.S. Cellular won Auction 103 licenses for $146 million while preparing for Auction 105 - FCC proposed a new $9 billion 5G Fund for rural areas, to be disbursed over ten years via competitive auctions, replacing the Phase II Connect America Mobility Fund for 4G LTE[83] - FCC's 2017 "Restoring Internet Freedom" rules (reversing 2015 net neutrality decisions) were largely reaffirmed by the D.C. Circuit in October 2019, but state/local net neutrality laws remain a challenge[85][86] - U.S. Cellular was the provisional winning bidder for 237 wireless spectrum licenses in Auction 103 (37, 39, and 47 GHz bands) for $146 million in March 2020[87] - FCC Auction 105 (3.5 GHz band) applications due May 7, 2020, auction scheduled for July 23, 2020[88] Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement This cautionary statement notes that forward-looking statements in the Form 10-Q may differ from actual results due to risks, referring readers to the Form 10-K Risk Factors - Report contains forward-looking statements, identified by words like "believes," "anticipates," "estimates," "expects," "plans," "intends," "projects"[91] - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ significantly[91] - Readers should carefully consider Risk Factors in the Form 10-K for December 31, 2019, and this Form 10-Q[91] Risk Factors The uncertain impact of the COVID-19 pandemic is a primary new material adverse risk to U.S. Cellular's business and financial condition, with other risks referenced from the 2019 Form 10-K - The impact of the COVID-19 pandemic is an uncertain but potentially material adverse risk to U.S. Cellular's business, financial condition, or results of operations[97] - COVID-19 poses risks such as inability to conduct business, maintain supply chain, attract customers, and execute strategies, compounded by increased unemployment, economic downturn, and credit market deterioration[97] - Other risks are detailed in the Form 10-K for December 31, 2019[96] Quantitative and Qualitative Disclosures About Market Risk This section refers to market risk disclosures in the 2019 Form 10-K, noting no material changes between December 31, 2019, and March 31, 2020, and references Note 3 for long-term debt fair value - No material changes to market risk information between December 31, 2019, and March 31, 2020, as disclosed in the 2019 Form 10-K[98] - Fair value of long-term debt as of March 31, 2020, is provided in Note 3[99] Financial Statements (Unaudited) Consolidated Statement of Operations For Q1 2020, total operating revenues were flat at $963 million, operating income decreased to $50 million, net income increased to $72 million, and diluted EPS rose to $0.81 due to lower income tax expense | Metric | Q1 2020 (Millions) | Q1 2019 (Millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Total operating revenues | $963 | $966 | (0.3)% | | Operating income | $50 | $64 | (21.9)% | | Income before income taxes | $76 | $85 | (10.5)% | | Income tax expense | $4 | $27 | (85.2)% | | Net income | $72 | $58 | 24.1% | | Net income attributable to U.S. Cellular shareholders | $71 | $54 | 31.5% | | Basic earnings per share attributable to U.S. Cellular shareholders | $0.82 | $0.63 | 30.2% | | Diluted earnings per share attributable to U.S. Cellular shareholders | $0.81 | $0.62 | 30.6% | Consolidated Statement of Cash Flows Net cash from operating activities increased to $342 million, while cash used in investing activities significantly rose to $342 million due to higher capital expenditures and license acquisitions, leading to an overall $24 million decrease in cash | Cash Flow Activity | Q1 2020 (Millions) | Q1 2019 (Millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Net cash provided by operating activities | $342 | $287 | $55 | | Net cash used in investing activities | $(342) | $(212) | $(130) | | Net cash used in financing activities | $(24) | $(6) | $(18) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(24) | $69 | $(93) | | Cash, cash equivalents and restricted cash, End of period | $267 | $652 | $(385) | - Cash paid for additions to property, plant and equipment: $315 million in Q1 2020 vs. $107 million in Q1 2019[104] - Repurchase of Common Shares: $21 million in Q1 2020 vs. $0 in Q1 2019[104] Consolidated Balance Sheet As of March 31, 2020, total assets slightly increased to $8,251 million, with decreased accounts receivable, increased inventory, and higher income taxes receivable; total liabilities and equity also saw slight increases | Balance Sheet Item | March 31, 2020 (Millions) | December 31, 2019 (Millions) | Change | | :------------------------------------------ | :-------------------------- | :--------------------------- | :------- | | Cash and cash equivalents | $258 | $285 | $(27) | | Accounts receivable (Customers and agents) | $865 | $919 | $(54) | | Inventory, net | $212 | $162 | $50 | | Income taxes receivable | $96 | $46 | $50 | | Licenses | $2,502 | $2,471 | $31 | | Property, plant and equipment, net | $2,268 | $2,207 | $61 | | Total assets | $8,251 | $8,164 | $87 | | Total current liabilities | $722 | $750 | $(28) | | Deferred income tax liability, net | $559 | $507 | $52 | | Long-term debt, net | $1,503 | $1,502 | $1 | | Total liabilities | $3,492 | $3,472 | $20 | | Total equity | $4,264 | $4,210 | $54 | - Consolidated total assets include $933 million from consolidated variable interest entities (VIEs) not available to settle U.S. Cellular's obligations[112] - Consolidated total liabilities include $20 million from consolidated VIEs for which creditors have no recourse to U.S. Cellular's general credit[112] Consolidated Statement of Changes in Equity Total U.S. Cellular shareholders' equity increased from $4,197 million to $4,252 million, driven by $71 million in net income, partially offset by $23 million in share repurchases | Equity Item | March 31, 2020 (Millions) | December 31, 2019 (Millions) | Change | | :------------------------------------------ | :-------------------------- | :--------------------------- | :------- | | Total U.S. Cellular shareholders' equity | $4,252 | $4,197 | $55 | | Net income attributable to U.S. Cellular shareholders | $71 | N/A | N/A | | Repurchase of Common Shares | $(23) | N/A | N/A | Notes to Consolidated Financial Statements Note 1 Basis of Presentation - U.S. Cellular, an 83%-owned subsidiary of TDS, prepares its unaudited consolidated financial statements in accordance with GAAP and SEC rules[120] - Adopted ASU 2016-13 (Credit Losses) on January 1, 2020, with no impact on retained earnings[126] - Adopted ASU 2018-15 (Cloud Computing Arrangement Implementation Costs) on January 1, 2020, with no significant impact[129] Note 2 Revenue Recognition | Revenue Type | Q1 2020 (Millions) | Q1 2019 (Millions) | | :------------------------------------ | :----------------- | :----------------- | | Retail service | $671 | $659 | | Inbound roaming | $37 | $34 | | Other service | $35 | $32 | | Service revenues from contracts with customers | $743 | $725 | | Equipment sales | $201 | $225 | | Total revenues from contracts with customers | $944 | $950 | | Operating lease income | $19 | $16 | | Total operating revenues | $963 | $966 | - Transaction price allocated to remaining performance obligations for service revenues: $180 million for remainder of 2020, $100 million for 2021, $164 million thereafter, totaling $444 million[135] - Contract cost asset balance (commission fees) was $127 million at March 31, 2020; amortization was $27 million for Q1 2020[137] Note 3 Fair Value Measurements - No material financial or nonfinancial assets or liabilities required to be recorded at fair value[138] - Fair values of Cash and cash equivalents approximate book values[141] | Long-term debt (Millions) | March 31, 2020 Book Value | March 31, 2020 Fair Value | | :------------------------ | :------------------------ | :------------------------ | | Retail | $917 | $795 | | Institutional | $535 | $527 | | Other | $83 | $83 | Note 4 Equipment Installment Plans | Metric | March 31, 2020 (Millions) | December 31, 2019 (Millions) | | :------------------------------------------ | :-------------------------- | :--------------------------- | | Equipment installment plan receivables, gross | $964 | $1,008 | | Allowance for credit losses | $(90) | $(84) | | Equipment installment plan receivables, net | $874 | $924 | - Allowance for credit losses activity for Q1 2020: beginning balance $84 million, bad debts expense $25 million, write-offs net of recoveries $(19) million, ending balance $90 million[146] Note 5 Income Taxes - Effective tax rate: 5.0% in Q1 2020 vs. 31.4% in Q1 2019[147] - Lower rate due to CARES Act benefits: retroactive bonus depreciation and 5-year carryback of net operating losses, leading to a tax benefit from higher statutory federal tax rates in prior years (35% vs. current 21%)[148] Note 6 Earnings Per Share | Metric | Q1 2020 | Q1 2019 | | :---------------------------------------------------- | :------ | :------ | | Net income attributable to U.S. Cellular shareholders | $71 | $54 | | Weighted average number of shares used in basic EPS | 86 | 86 | | Basic earnings per share attributable to U.S. Cellular shareholders | $0.82 | $0.63 | | Diluted earnings per share attributable to U.S. Cellular shareholders | $0.81 | $0.62 | Note 7 Intangible Assets | Metric | Licenses (Millions) | | :-------------------------- | :------------------ | | Balance at December 31, 2019 | $2,471 | | Acquisitions | $30 | | Capitalized interest | $1 | | Balance at March 31, 2020 | $2,502 | - Provisional winning bidder for 237 wireless spectrum licenses in Auction 103 for $146 million[151] Note 8 Investments in Unconsolidated Entities | Investment Type | March 31, 2020 (Millions) | December 31, 2019 (Millions) | | :------------------------------------ | :-------------------------- | :--------------------------- | | Equity method investments | $461 | $440 | | Measurement alternative method investments | $8 | $7 | | Total investments in unconsolidated entities | $469 | $447 | | Combined Results of Equity Method Investments | Q1 2020 (Millions) | Q1 2019 (Millions) | | :------------------------------------------ | :----------------- | :----------------- | | Revenues | $1,657 | $1,689 | | Operating expenses | $1,162 | $1,215 | | Operating income | $495 | $474 | | Net income | $498 | $469 | Note 9 Variable Interest Entities - U.S. Cellular consolidates VIEs where it has a controlling financial interest, such as SPEs for equipment installment plan receivables securitization and limited partnerships for wireless spectrum and service[155][156][157] | Consolidated VIEs' Assets (Millions) | March 31, 2020 | | :----------------------------------- | :------------- | | Cash and cash equivalents | $24 | | Accounts receivable | $614 | | Licenses | $649 | | Property, plant and equipment, net | $106 | | Total assets | $1,769 | | Consolidated VIEs' Liabilities (Millions) | March 31, 2020 | | :-------------------------------------- | :------------- | | Current liabilities | $30 | | Long-term operating lease liabilities | $40 | | Other deferred liabilities and credits | $14 | | Total liabilities | $84 | Note 10 Subsequent Events - Borrowed $125 million under receivables securitization agreement in April 2020[167] Additional Required Information Controls and Procedures U.S. Cellular's management concluded disclosure controls and procedures were effective as of March 31, 2020, with no material changes in internal control over financial reporting during Q1 2020 - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2020[170] - No material changes in internal control over financial reporting during Q1 2020[171] Legal Proceedings DOJ inquiries under the False Claims Act concern U.S. Cellular's participation in spectrum license auctions; while the DOJ declined to intervene, complaints were served, and the outcome remains unpredictable - DOJ inquiries under False Claims Act regarding U.S. Cellular's participation in FCC wireless spectrum license auctions 58, 66, 73, and 97[172] - DOJ declined to intervene in civil actions; private party plaintiffs served complaints in February 2020[172] - U.S. Cellular believes its arrangements complied with law but cannot predict outcome[172] Unregistered Sales of Equity Securities and Use of Proceeds U.S. Cellular repurchased 803,836 Common Shares for $23 million at an average of $29.00 per share during Q1 2020, with 4,506,713 shares remaining authorized | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | :-------------------------- | :----------------------------- | :--------------------------- | :-------------------------------------------------------------------------- | | January 1 - 31, 2020 | — | $— | 5,310,549 | | February 1 - 29, 2020 | 59,477 | $30.57 | 5,251,072 | | March 1 - 31, 2020 | 744,359 | $28.87 | 4,506,713 | | Total for or as of the end of the quarter ended March 31, 2020 | 803,836 | $29.00 | 4,506,713 | Other Information U.S. Cellular had no cash borrowings outstanding under its credit or securitization agreements as of March 31, 2020, but borrowed $125 million under the latter in April 2020 - No cash borrowings outstanding under revolving credit agreement or receivables securitization agreement as of March 31, 2020[179][180] - Borrowed $125 million under receivables securitization agreement in April 2020[180] Exhibits Exhibits This section lists exhibits filed with the Form 10-Q, including various agreements, incentive plans, certifications, and XBRL taxonomy documents - Includes Revolving Credit Agreement and Fourth Amendment to Amended and Restated Credit Agreement dated March 2, 2020[182] - Lists U.S. Cellular 2020 Executive Officer and Officer Annual Incentive Plans[182] - Contains certifications from principal executive officer, principal financial officer, and chief accounting officer[182] Form 10-Q Cross Reference Index Form 10-Q Cross Reference Index This index provides a cross-reference to page numbers for each item in Part I and Part II of the Form 10-Q, facilitating report navigation - Provides page numbers for Part I (Financial Information) and Part II (Other Information) items[185] Signatures Signatures The report was duly signed on April 30, 2020, by Kenneth R. Meyers, Douglas W. Chambers, Anita J. Kroll, and Jeffrey S. Hoersch, certifying its SEC submission - Report signed on April 30, 2020[188] - Signed by Kenneth R. Meyers (President and CEO), Douglas W. Chambers (SVP, CFO, and Treasurer), Anita J. Kroll (Chief Accounting Officer), and Jeffrey S. Hoersch (VP and Controller)[188]