U.S. Cellular reports fourth quarter 2013 results
CHICAGO, Feb. 26, 2014 /PRNewswire/ -- As previously announced, U.S. Cellular will hold a teleconference Feb. 26, 2014 at 9:30 a.m. CST. Listen to the live call via the Events & Presentations pages of investors.teldta.com or investors.uscellular.com.
United States Cellular Corporation (NYSE: USM) reported service revenues of $825.1 million for the fourth quarter of 2013, versus $1,008.9 million for the comparable period one year ago. Net income (loss) attributable to U.S. Cellular shareholders and related diluted earnings (loss) per share were $1.6 million and $0.02 respectively, for the fourth quarter of 2013, compared to $(39.6) million and $(0.47), respectively, in the comparable period one year ago.
Year-over-year comparisons are affected by the Divestiture Transaction and the deconsolidation of certain partnerships, in 2013.
"Billing system issues affected churn and overall financial performance for the fourth quarter. However, we took important strategic actions in 2013 that position U.S. Cellular to compete more effectively," said Kenneth R. Meyers, U.S. Cellular president and CEO. "We divested underperforming markets to focus on markets where we're stronger, we converted to a new billing and operational support system to enable more effective service and product delivery, and we introduced Apple products and shared data plans to monetize the continued growth in data usage on the 4G LTE network. We ended the year with a strong balance sheet, after returning approximately $482 million to U.S. Cellular shareholders through a special dividend and we have agreements to sell non-strategic spectrum for over $400 million.
"We also expanded the 4G LTE network to nearly 90 percent of customers, giving us very competitive coverage in our markets to support our data growth strategies. We'll continue to invest in our future by further expanding and enhancing our network. Network quality is the foundation of our strategy to increase customer additions and build loyalty, together with competitive devices, plans and pricing, outstanding customer service, and a Rewards Program that makes customers feel like members. We're also committed to seeking opportunities to increase operational efficiency."
2014 Estimated Results
Capital expenditures for 2014 are expected to be approximately $640 million, down from $738 million in 2013. U.S. Cellular is not providing guidance for 2014 revenues and profitability at this time due to a number of factors, which involve significant uncertainty and affect the company's ability to estimate future results with reasonable confidence. Such factors include (i) the unprecedented number of actions related to pricing of service plans and devices, including device financing, announced by competitors in recent weeks, for which the company is evaluating and determining its response; and (ii) continuing elevated churn due, at least in part, to issues arising from the company's billing system implementation in the second half of 2013. Although the company expects churn to improve over the next several months, the extent and timing of the improvement is uncertain.
2013 Estimated and Actual Results
| 2013 Estimated and Actual Results for the Year Ended |
||
| Estimate |
Actual |
|
| (Dollars in millions) |
||
| Service revenues |
$3,590-$3,640 |
$3,595 |
| Adjusted income before income taxes (2) |
$600-$700 |
$585 |
| Capital expenditures |
$735 |
$738 |
| (1) |
These estimated results were announced by U.S. Cellular on Nov. 1, 2013. Both estimated and actual results reflect U.S. Cellular's consolidated results for 2013. |
| (2) |
Adjusted income before income taxes is defined as income before income taxes, adjusted for the items set forth in the reconciliation below. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. In addition, U.S. Cellular may exclude other items from adjusted income before income taxes if such items help reflect operating results on a more comparable basis. U.S. Cellular does not intend to imply that any such amounts that are excluded are non-recurring, infrequent or unusual; such amounts may occur in the future. Adjusted income before income taxes is not a measure of financial performance under Generally Accepted Accounting Principles in the United States ("GAAP") and should not be considered as an alternative to income before income taxes as an indicator of the company's operating performance or as an alternative to cash flows from operating activities, determined in accordance with GAAP, as an indicator of cash flows or as a measure of liquidity. U.S. Cellular believes adjusted income before income taxes is a useful measure of U.S. Cellular's operating results before significant recurring non-cash charges, discrete gains and losses, and financing charges (interest expense). The following table provides a reconciliation of income (loss) before income taxes to adjusted income before income taxes for 2013 estimated and actual results: |
| 2013 Estimated and Actual Results for the Year Ended December 31, 2013 (1) |
||||
| Estimate |
Actual |
|||
| (Dollars in millions) |
||||
| Income (loss) before income taxes |
$350-$450 |
$258 |
||
| Depreciation, amortization and accretion expense |
$790 |
$804 |
||
| (Gain) loss on sale of business and other exit costs, net |
($245) |
($247) |
||
| (Gain) loss on license sales and exchanges |
($325) |
($255) |
||
| (Gain) loss on investments |
($20) |
($19) |
||
| Interest expense |
$50 |
$44 |
||
| Adjusted income before income taxes |
$600-$700 |
$585 |
||
Conference Call Information
U.S. Cellular will hold a conference call on Feb. 26, 2014 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=98193.
- 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 6,700 full- and part-time associates as of Dec. 31, 2013. At the end of the fourth quarter of 2013, 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; acquisitions/divestitures of properties and/or licenses; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of handset 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.
For more information about U.S. Cellular, visit uscellular.com.
| United States Cellular Corporation |
||||||||||||||||
| Total Markets* Summary Operating Data (Unaudited) |
||||||||||||||||
| As of or for the Quarter Ended |
12/31/2013 |
9/30/2013 |
6/30/2013 |
3/31/2013 |
12/31/2012 |
|||||||||||
| Retail Customers |
||||||||||||||||
| Postpaid |
||||||||||||||||
| Total at end of period |
4,267,000 |
4,343,000 |
4,412,000 |
5,060,000 |
5,134,000 |
|||||||||||
| Gross additions |
176,000 |
165,000 |
165,000 |
191,000 |
241,000 |
|||||||||||
| Net additions (losses) |
(71,000) |
(60,000) |
(120,000) |
(74,000) |
(41,000) |
|||||||||||
| ARPU (1) |
$ |
53.53 |
$ |
54.64 |
$ |
54.18 |
$ |
54.85 |
$ |
54.56 |
||||||
| Churn rate (2) |
1.9% |
1.7% |
2.0% |
1.7% |
1.8% |
|||||||||||
| Smartphone penetration (3) (4) |
50.8% |
47.1% |
45.5% |
43.5% |
41.8% |
|||||||||||
| Prepaid |
||||||||||||||||
| Total at end of period |
343,000 |
370,000 |
381,000 |
446,000 |
423,000 |
|||||||||||
| Gross additions |
63,000 |
65,000 |
77,000 |
104,000 |
107,000 |
|||||||||||
| Net additions (losses) |
(26,000) |
(11,000) |
(7,000) |
23,000 |
37,000 |
|||||||||||
| ARPU (1) |
$ |
31.66 |
$ |
28.72 |
$ |
31.69 |
$ |
33.31 |
$ |
33.56 |
||||||
| Churn rate (2) |
8.3% |
6.8% |
6.8% |
6.2% |
5.8% |
|||||||||||
| Total customers at end of period |
4,774,000 |
4,875,000 |
4,968,000 |
5,736,000 |
5,798,000 |
|||||||||||
| Billed ARPU (1) |
$ |
50.25 |
$ |
50.92 |
$ |
50.60 |
$ |
51.13 |
$ |
50.94 |
||||||
| Service revenue ARPU (1) |
$ |
57.05 |
$ |
58.36 |
$ |
57.45 |
$ |
57.63 |
$ |
58.00 |
||||||
| Smartphones sold as a percent of total devices sold |
79.6% |
65.2% |
66.0% |
61.7% |
62.9% |
|||||||||||
| Total population |
||||||||||||||||
| Consolidated markets (5) |
58,013,000 |
84,025,000 |
84,025,000 |
93,943,000 |
93,244,000 |
|||||||||||
| Consolidated operating markets (5) |
31,759,000 |
31,822,000 |
31,822,000 |
47,440,000 |
46,966,000 |
|||||||||||
| Market penetration at end of period |
||||||||||||||||
| Consolidated markets (6) |
8.2% |
5.8% |
5.9% |
6.1% |
6.2% |
|||||||||||
| Consolidated operating markets (6) |
15.0% |
15.3% |
15.6% |
12.1% |
12.3% |
|||||||||||
| Capital expenditures (000s) |
$ |
208,100 |
$ |
242,500 |
$ |
168,500 |
$ |
118,400 |
$ |
253,100 |
||||||
| Total cell sites in service |
6,975 |
7,687 |
7,748 |
8,027 |
8,028 |
|||||||||||
| Owned towers in service |
4,448 |
4,422 |
4,411 |
4,411 |
4,408 |
|||||||||||
| * |
Represents U.S. Cellular's consolidated markets. These are markets which U. S. Cellular currently consolidates, or previously consolidated in the periods presented, and is not adjusted in prior periods for subsequent divestitures or deconsolidations. |
| United States Cellular Corporation |
||||||||||||||||
| Core Markets* Summary Operating Data (Unaudited) |
||||||||||||||||
| As of or for the Quarter Ended |
12/31/2013 |
9/30/2013 |
6/30/2013 |
3/31/2013 |
12/31/2012 |
|||||||||||
| Retail Customers |
||||||||||||||||
| Postpaid |
||||||||||||||||
| Total at end of period |
4,267,000 |
4,343,000 |
4,412,000 |
4,463,000 |
4,496,000 |
|||||||||||
| Gross additions |
176,000 |
165,000 |
165,000 |
176,000 |
208,000 |
|||||||||||
| Net additions (losses) |
(71,000) |
(60,000) |
(53,000) |
(33,000) |
(19,000) |
|||||||||||
| ARPU (1) |
$ |
53.53 |
$ |
54.64 |
$ |
54.44 |
$ |
54.21 |
$ |
53.91 |
||||||
| Churn rate (2) |
1.9% |
1.7% |
1.6% |
1.6% |
1.7% |
|||||||||||
| Smartphone penetration (3) (4) |
50.8% |
47.1% |
45.5% |
43.0% |
41.1% |
|||||||||||
| Prepaid |
||||||||||||||||
| Total at end of period |
343,000 |
370,000 |
381,000 |
373,000 |
342,000 |
|||||||||||
| Gross additions |
63,000 |
65,000 |
76,000 |
91,000 |
87,000 |
|||||||||||
| Net additions (losses) |
(26,000) |
(11,000) |
8,000 |
31,000 |
37,000 |
|||||||||||
| ARPU (1) |
$ |
31.66 |
$ |
28.72 |
$ |
31.65 |
$ |
32.92 |
$ |
33.21 |
||||||
| Churn rate (2) |
8.3% |
6.8% |
6.0% |
5.6% |
5.1% |
|||||||||||
| Total customers at end of period |
4,774,000 |
4,875,000 |
4,968,000 |
5,005,000 |
5,022,000 |
|||||||||||
| Billed ARPU (1) |
$ |
50.25 |
$ |
50.92 |
$ |
50.98 |
$ |
50.93 |
$ |
50.71 |
||||||
| Service revenue ARPU (1) |
$ |
57.05 |
$ |
58.36 |
$ |
57.88 |
$ |
57.14 |
$ |
57.67 |
||||||
| Smartphones sold as a percent of total devices sold |
79.6% |
65.2% |
66.1% |
62.1% |
62.9% |
|||||||||||
| Total population |
||||||||||||||||
| Consolidated markets (5) |
58,013,000 |
84,025,000 |
84,025,000 |
84,025,000 |
83,384,000 |
|||||||||||
| Consolidated operating markets (5) |
31,759,000 |
31,822,000 |
31,822,000 |
31,822,000 |
31,445,000 |
|||||||||||
| Market penetration at end of period |
||||||||||||||||
| Consolidated markets (6) |
8.2% |
5.8% |
5.9% |
6.0% |
6.0% |
|||||||||||
| Consolidated operating markets (6) |
15.0% |
15.3% |
15.6% |
15.7% |
16.0% |
|||||||||||
| Capital expenditures (000s) |
$ |
211,200 |
$ |
239,300 |
$ |
171,200 |
$ |
113,300 |
$ |
241,400 |
||||||
| Total cell sites in service |
6,161 |
6,127 |
6,113 |
6,113 |
6,130 |
|||||||||||
| Owned towers in service |
3,913 |
3,859 |
3,844 |
3,846 |
3,847 |
|||||||||||
| * |
U.S. Cellular's Core Markets excludes the Divestiture Markets and NY1 & NY2 markets for the periods presented.
|
| (1) |
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 retail service revenues, inbound roaming and other service revenues and postpaid, prepaid and reseller customers. |
|
| (2) |
Churn metrics represent the percentage of the postpaid or prepaid customers that disconnects service each month. These metrics represent the average monthly postpaid or prepaid churn rate for each respective period. |
| (3) |
Smartphones represent wireless devices which run on an Android, Apple, BlackBerry or Windows Mobile operating system, excluding tablets. |
| (4) |
Smartphone penetration is calculated by dividing postpaid smartphone customers by total postpaid customers. |
| (5) |
Used only to calculate market penetration of consolidated and core markets and consolidated and core 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 and core markets and consolidated and core operating markets, respectively, estimated by Claritas. |
| United States Cellular Corporation |
||||||||||||
| Consolidated Statement of Operations Highlights |
||||||||||||
| Three Months Ended December 31, |
||||||||||||
| (Unaudited, dollars and shares in thousands, except per share amounts) |
||||||||||||
| Increase (Decrease) |
||||||||||||
| 2013 |
2012 |
Amount |
Percent |
|||||||||
| Operating revenues |
||||||||||||
| Service |
$ |
825,128 |
$ |
1,008,924 |
$ |
(183,796) |
(18%) |
|||||
| Equipment sales |
77,596 |
106,282 |
(28,686) |
(27%) |
||||||||
| Total operating revenues |
902,724 |
1,115,206 |
(212,482) |
(19%) |
||||||||
| Operating expenses |
||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) |
177,438 |
221,169 |
(43,731) |
(20%) |
||||||||
| Cost of equipment sold |
346,847 |
309,182 |
37,665 |
12% |
||||||||
| Selling, general and administrative |
442,720 |
449,110 |
(6,390) |
(1%) |
||||||||
| Depreciation, amortization and accretion |
210,371 |
169,242 |
41,129 |
24% |
||||||||
| (Gain) loss on asset disposals, net |
14,453 |
2,121 |
12,332 |
>100% |
||||||||
| (Gain) loss on sale of business and other exit costs, net |
(3,140) |
25,170 |
(28,310) |
>(100%) |
||||||||
| (Gain) loss on license sales and exchanges |
(255,479) |
— |
(255,479) |
N/M |
||||||||
| Total operating expenses |
933,210 |
1,175,994 |
(242,784) |
(21%) |
||||||||
| Operating loss |
(30,486) |
(60,788) |
30,302 |
50% |
||||||||
| Investment and other income (expense) |
||||||||||||
| Equity in earnings of unconsolidated entities |
32,152 |
18,780 |
13,372 |
71% |
||||||||
| Interest and dividend income |
994 |
821 |
173 |
21% |
||||||||
| Gain on investment |
29 |
10 |
19 |
>100% |
||||||||
| Interest expense |
(11,570) |
(7,121) |
(4,449) |
(62%) |
||||||||
| Other, net |
135 |
327 |
(192) |
(59%) |
||||||||
| Total investment and other income |
21,740 |
12,817 |
8,923 |
70% |
||||||||
| Loss before income taxes |
(8,746) |
(47,971) |
39,225 |
82% |
||||||||
| Income tax benefit |
(8,484) |
(18,647) |
10,163 |
55% |
||||||||
| Net loss |
(262) |
(29,324) |
29,062 |
99% |
||||||||
| Less: Net income (loss) attributable to noncontrolling interests, net of tax |
(1,854) |
10,298 |
(12,152) |
>(100%) |
||||||||
| Net income (loss) attributable to U.S. Cellular shareholders |
$ |
1,592 |
$ |
(39,622) |
$ |
41,214 |
>(100%) |
|||||
| Basic weighted average shares outstanding |
84,181 |
84,568 |
(387) |
(1%) |
||||||||
| Basic earnings (loss) per share attributable to U.S. Cellular shareholders |
$ |
0.02 |
$ |
(0.47) |
$ |
0.49 |
>(100%) |
|||||
| Diluted weighted average shares outstanding |
85,033 |
84,568 |
465 |
1% |
||||||||
| Diluted earnings (loss) per share attributable to U.S. Cellular shareholders |
$ |
0.02 |
$ |
(0.47) |
$ |
0.49 |
>(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) |
||||||||||||
| Increase (Decrease) |
||||||||||||
| 2013 |
2012 |
Amount |
Percent |
|||||||||
| Operating revenues |
||||||||||||
| Service |
$ |
3,594,773 |
$ |
4,098,856 |
$ |
(504,083) |
(12%) |
|||||
| Equipment sales |
324,063 |
353,228 |
(29,165) |
(8%) |
||||||||
| Total operating revenues |
3,918,836 |
4,452,084 |
(533,248) |
(12%) |
||||||||
| Operating expenses |
||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) |
763,435 |
946,805 |
(183,370) |
(19%) |
||||||||
| Cost of equipment sold |
999,000 |
935,947 |
63,053 |
7% |
||||||||
| Selling, general and administrative |
1,677,395 |
1,764,933 |
(87,538) |
(5%) |
||||||||
| Depreciation, amortization and accretion |
803,781 |
608,633 |
195,148 |
32% |
||||||||
| (Gain) loss on asset disposals, net |
30,606 |
18,088 |
12,518 |
69% |
||||||||
| (Gain) loss on sale of business and other exit costs, net |
(246,767) |
21,022 |
(267,789) |
>(100%) |
||||||||
| (Gain) loss on license sales and exchanges |
(255,479) |
— |
(255,479) |
N/M |
||||||||
| Total operating expenses |
3,771,971 |
4,295,428 |
(523,457) |
(12%) |
||||||||
| Operating income |
146,865 |
156,656 |
(9,791) |
(6%) |
||||||||
| Investment and other income (expense) |
||||||||||||
| Equity in earnings of unconsolidated entities |
131,949 |
90,364 |
41,585 |
46% |
||||||||
| Interest and dividend income |
3,961 |
3,644 |
317 |
9% |
||||||||
| Gain (loss) on investment |
18,556 |
(3,718) |
22,274 |
>(100%) |
||||||||
| Interest expense |
(43,963) |
(42,393) |
(1,570) |
(4%) |
||||||||
| Other, net |
288 |
500 |
(212) |
(42%) |
||||||||
| Total investment and other income |
110,791 |
48,397 |
62,394 |
>100% |
||||||||
| Income before income taxes |
257,656 |
205,053 |
52,603 |
26% |
||||||||
| Income tax expense |
113,134 |
63,977 |
49,157 |
77% |
||||||||
| Net income |
144,522 |
141,076 |
3,446 |
2% |
||||||||
| Less: Net income attributable to noncontrolling interests, net of tax |
4,484 |
30,070 |
(25,586) |
(85%) |
||||||||
| Net income attributable to U.S. Cellular shareholders |
$ |
140,038 |
$ |
111,006 |
$ |
29,032 |
26% |
|||||
| Basic weighted average shares outstanding |
83,968 |
84,645 |
(677) |
(1%) |
||||||||
| Basic earnings per share attributable to U.S. Cellular shareholders |
$ |
1.67 |
$ |
1.31 |
$ |
0.36 |
27% |
|||||
| Diluted weighted average shares outstanding |
84,730 |
85,230 |
(500) |
(1%) |
||||||||
| Diluted earnings per share attributable to U.S. Cellular shareholders |
$ |
1.65 |
$ |
1.30 |
$ |
0.35 |
27% |
|||||
| United States Cellular Corporation |
||||||
| Consolidated Balance Sheet Highlights |
||||||
| (Unaudited, dollars in thousands) |
||||||
| ASSETS |
||||||
| December 31, |
December 31, |
|||||
| 2013 |
2012 |
|||||
| Current assets |
||||||
| Cash and cash equivalents |
$ |
342,065 |
$ |
378,358 |
||
| Short-term investments |
50,104 |
100,676 |
||||
| Accounts receivable from customers and others |
586,595 |
445,220 |
||||
| Inventory |
238,188 |
155,886 |
||||
| Income taxes receivable |
— |
1,612 |
||||
| Prepaid expenses |
65,596 |
62,560 |
||||
| Net deferred income tax asset |
99,105 |
35,419 |
||||
| Other current assets |
19,538 |
16,745 |
||||
| 1,401,191 |
1,196,476 |
|||||
| Assets held for sale |
16,027 |
216,763 |
||||
| Investments |
||||||
| Licenses |
1,401,126 |
1,456,794 |
||||
| Goodwill |
387,524 |
421,743 |
||||
| Investments in unconsolidated entities |
265,585 |
144,531 |
||||
| Long-term investments |
— |
50,305 |
||||
| 2,054,235 |
2,073,373 |
|||||
| Property, plant and equipment |
||||||
| In service and under construction |
7,717,512 |
7,478,428 |
||||
| Less: Accumulated depreciation |
4,860,992 |
4,455,840 |
||||
| 2,856,520 |
3,022,588 |
|||||
| Other assets and deferred charges |
117,735 |
78,250 |
||||
| Total assets |
$ |
6,445,708 |
$ |
6,587,450 |
||
| United States Cellular Corporation |
|||||||
| Consolidated Balance Sheet Highlights |
|||||||
| (Unaudited, dollars in thousands) |
|||||||
| LIABILITIES AND EQUITY |
|||||||
| December 31, |
December 31, |
||||||
| 2013 |
2012 |
||||||
| Current liabilities |
|||||||
| Current portion of long-term debt |
$ |
166 |
$ |
92 |
|||
| Accounts payable |
|||||||
| Affiliated |
11,243 |
10,725 |
|||||
| Trade |
405,583 |
310,936 |
|||||
| Customer deposits and deferred revenues |
256,740 |
192,113 |
|||||
| Accrued taxes |
73,820 |
35,834 |
|||||
| Accrued compensation |
66,566 |
90,418 |
|||||
| Other current liabilities |
192,055 |
114,881 |
|||||
| 1,006,173 |
754,999 |
||||||
| Liabilities held for sale |
— |
19,594 |
|||||
| Deferred liabilities and credits |
|||||||
| Net deferred income tax liability |
836,297 |
849,818 |
|||||
| Other deferred liabilities and credits |
315,073 |
288,441 |
|||||
| Long-term debt |
878,032 |
878,858 |
|||||
| Noncontrolling interests with redemption features |
536 |
493 |
|||||
| 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 |
1,424,729 |
1,412,453 |
|||||
| Treasury shares |
(164,692) |
(165,724) |
|||||
| Retained earnings |
2,043,095 |
2,399,052 |
|||||
| Total U.S. Cellular shareholders' equity |
3,391,206 |
3,733,855 |
|||||
| Noncontrolling interests |
18,391 |
61,392 |
|||||
| Total equity |
3,409,597 |
3,795,247 |
|||||
| Total liabilities and equity |
$ |
6,445,708 |
$ |
6,587,450 |
|||
| 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, 2013 and December 31, 2012. |
||||||
| December 31, |
December 31, |
|||||
| 2013 |
2012 |
|||||
| Cash and cash equivalents |
$ |
342,065 |
$ |
378,358 |
||
| Amounts included in short-term investments (1)(2) |
||||||
| U.S. Treasury Notes |
50,104 |
100,676 |
||||
| Amounts included in long-term investments (1) |
||||||
| U.S. Treasury Notes |
— |
50,305 |
||||
| Total cash and cash equivalents and investments |
$ |
392,169 |
$ |
529,339 |
||
| (1) |
Designated as held-to-maturity investments and are recorded at amortized cost on 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) |
||||||||
| 2013 |
2012 |
|||||||
| Cash flows from operating activities |
||||||||
| Net income |
$ |
144,522 |
$ |
141,076 |
||||
| Add (deduct) adjustments to reconcile net income to net cash flows from operating activities |
||||||||
| Depreciation, amortization and accretion |
803,781 |
608,633 |
||||||
| Bad debts expense |
98,864 |
67,372 |
||||||
| Stock-based compensation expense |
15,844 |
21,466 |
||||||
| Deferred income taxes, net |
(75,348) |
49,244 |
||||||
| Equity in earnings of unconsolidated entities |
(131,949) |
(90,364) |
||||||
| Distributions from unconsolidated entities |
125,660 |
84,417 |
||||||
| (Gain) loss on asset disposals, net |
30,606 |
18,088 |
||||||
| (Gain) loss on sale of business and other exit costs, net |
(246,767) |
21,022 |
||||||
| (Gain) loss on license sales and exchanges |
(255,479) |
— |
||||||
| (Gain) loss on investments |
(18,556) |
3,718 |
||||||
| Noncash interest expense |
1,059 |
(1,822) |
||||||
| Other operating activities |
646 |
546 |
||||||
| Changes in assets and liabilities from operations |
||||||||
| Accounts receivable |
(291,759) |
(64,816) |
||||||
| Inventory |
(82,422) |
(28,786) |
||||||
| Accounts payable - trade |
85,199 |
(4,977) |
||||||
| Accounts payable - affiliate |
147 |
(1,458) |
||||||
| Customer deposits and deferred revenues |
66,344 |
30,353 |
||||||
| Accrued taxes |
30,037 |
73,064 |
||||||
| Accrued interest |
273 |
167 |
||||||
| Other assets and liabilities |
(9,805) |
(27,652) |
||||||
| 290,897 |
899,291 |
|||||||
| Cash flows from investing activities |
||||||||
| Cash used for additions to property, plant and equipment |
(717,862) |
(826,400) |
||||||
| Cash paid for acquisitions and licenses |
(16,540) |
(122,690) |
||||||
| Cash received from divestitures |
811,120 |
49,932 |
||||||
| Cash paid for investments |
— |
(120,000) |
||||||
| Cash received for investments |
100,000 |
125,000 |
||||||
| Other investing activities |
(3,969) |
(2,453) |
||||||
| 172,749 |
(896,611) |
|||||||
| Cash flows from financing activities |
||||||||
| Repayment of long-term debt |
(414) |
(145) |
||||||
| Common shares reissued for benefit plans, net of tax payments |
5,784 |
(2,205) |
||||||
| Common shares repurchased |
(18,544) |
(20,045) |
||||||
| Payment of debt issuance costs |
(23) |
(514) |
||||||
| Dividends paid |
(482,270) |
— |
||||||
| Distributions to noncontrolling interests |
(3,766) |
(22,970) |
||||||
| Payments to acquire additional interest in subsidiaries |
(1,005) |
(3,167) |
||||||
| Other financing activities |
299 |
569 |
||||||
| (499,939) |
(48,477) |
|||||||
| Net decrease in cash and cash equivalents |
(36,293) |
(45,797) |
||||||
| Cash and cash equivalents |
||||||||
| Beginning of period |
378,358 |
424,155 |
||||||
| End of period |
$ |
342,065 |
$ |
378,358 |
||||
| United States Cellular Corporation |
|||||||||||||
| Financial Measures and Reconciliations |
|||||||||||||
| (Unaudited, dollars in thousands) |
|||||||||||||
| Three Months Ended |
Twelve Months Ended |
||||||||||||
| December 31, |
December 31, |
||||||||||||
| 2013 |
2012 |
2013 |
2012 |
||||||||||
| Cash flows from operating activities |
$ |
(5,336) |
$ |
290,532 |
$ |
290,897 |
$ |
899,291 |
|||||
| Deduct: |
|||||||||||||
| Cash used for additions to property, plant and equipment |
195,682 |
214,969 |
717,862 |
826,400 |
|||||||||
| Free cash flow (1) |
$ |
(201,018) |
$ |
75,563 |
$ |
(426,965) |
$ |
72,891 |
|||||
| (1) |
Free cash flow is defined as Cash flows from operating activities less Cash used for additions to property, plant and equipment. 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, after Cash used for additions to property, plant and equipment. |
SOURCE United States Cellular Corporation
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