USM
$37.39
United States Cellular
$.48
1.30%
Earnings Details
1st Quarter March 2021
Thursday, May 6, 2021 4:05:00 PM
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Summary

United States Cellular (USM) Recent Earnings

United States Cellular (USM) reported 1st Quarter March 2021 earnings of $0.69 per share on revenue of $1.0 billion. The consensus earnings estimate was $0.61 per share on revenue of $984.4 million. Revenue grew 6.2% on a year-over-year basis.

United States Cellular Corp is a wireless telecommunications service provider. Its ownership interests include consolidated and investment interests in licenses covering portions of 30 states & total population of 50.9 million.

Results
Reported Earnings
$0.69
Earnings Whisper
-
Consensus Estimate
$0.61
Reported Revenue
$1.02 Bil
Revenue Estimate
$984.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

UScellular reports first quarter 2021 results

CHICAGO, May 6, 2021 /PRNewswire/ -- United States Cellular Corporation (NYSE:USM) reported total operating revenues of $1,023 million for the first quarter of 2021, versus $963 million for the same period one year ago. Service revenues totaled $771 million, versus $762 million for the same period a year ago. Net income attributable to UScellular shareholders and related diluted earnings per share were $60 million and $0.69, respectively, for the first quarter of 2021 compared to $71 million and $0.81, respectively, in the same period one year ago.

"UScellular had a strong start to 2021," said Laurent Therivel, UScellular President and CEO. "First quarter service revenues increased, showing the positive impact of higher ARPU. Operational and cost discipline throughout the quarter also contributed to our strong financial performance.

"With attractive promotions that are resonating with customers, postpaid and prepaid handset additions strengthened compared to the same period one year ago. We have adopted a regional model to be more agile, respond better to the customer, and execute more market-specific promotions.

"One of our top priorities and key competitive differentiators is to connect customers with the highest-quality network, including in underserved areas. Our 5G and network modernization programs are on track and we now offer 5G in portions of substantially all of our markets. We have also begun deploying our mmWave spectrum in order to offer fixed wireless access in three test markets, which will provide us with valuable learnings as we look to roll out this high-speed product to additional markets in our footprint. Our purchases of mid-band spectrum in the recent auctions will further enable our 5G capabilities well into the future.

"In April, we unveiled an exciting new brand campaign that highlights our community-first approach. 'America's Locally Grown Wireless' celebrates what makes UScellular such a special company. Over the years, we've become a national wireless provider with customers all over the country, but we've never lost sight of what's important – staying loyal to the people and communities we serve and providing them a great wireless experience.

"I want to thank all of our associates for their contributions and enthusiasm in executing our 2021 growth strategies thus far. I'm confident that UScellular is well-positioned as we, along with the rest of the country, begin to recover from the pandemic."

2021 Estimated Results

UScellular's current estimates of full-year 2021 results are shown below. Such estimates represent management's view as of May 6, 2021 and should not be assumed to be current as of any future date. UScellular undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results.


2021 Estimated Results


Previous

Current

(Dollars in millions)



Service revenues

$3,025-$3,125

$3,050-$3,150

Adjusted OIBDA1

$800-$950

$850-$950

Adjusted EBITDA1

$975-$1,125

$1,025-$1,125

Capital expenditures

$775-$875

Unchanged

The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2021 estimated results, UScellular has not completed the below reconciliation to Net income because it does not provide guidance for income taxes. Although potentially significant, UScellular believes that the impact of income taxes cannot be reasonably predicted; therefore, UScellular is unable to provide such guidance.




Actual Results


2021 Estimated
Results


Three Months Ended
March 31, 2021


Year Ended
December 31, 2020

(Dollars in millions)






Net income (GAAP)

N/A


$

62



$

233


Add back:






Income tax expense

N/A


27



17


Income before income taxes (GAAP)

$175-$275


$

89



$

250


Add back:






Interest expense

150


39



112


Depreciation, amortization and accretion expense

680


170



683


EBITDA (Non-GAAP)1

$1,005-$1,105


$

298



$

1,045


Add back or deduct:






(Gain) loss on asset disposals, net

20


5



25


(Gain) loss on sale of business and other exit costs, net


(1)




(Gain) loss on license sales and exchanges, net




(5)


(Gain) loss on investments




(2)


Adjusted EBITDA (Non-GAAP)1

$1,025-$1,125


$

302



$

1,063


Deduct:






Equity in earnings of unconsolidated entities

170


42



179


Interest and dividend income

5


2



8


Adjusted OIBDA (Non-GAAP)1

$850-$950


$

258



$

876




1         

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. UScellular does not intend to imply that any such items set forth in the reconciliation above are non-recurring, infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of UScellular's operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of UScellular's financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for March 31, 2021, can be found on UScellular's website at investors.uscellular.com.

Stock Repurchase
During the first quarter of 2021, UScellular repurchased 54,900 Common Shares for $2 million.

Conference Call Information
UScellular will hold a conference call on May 7, 2021 at 9:00 a.m. Central Time.

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 UScellular
United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to customers with 5.0 million connections in 21 states. The Chicago-based company employed approximately 5,200 associates as of March 31, 2021. At the end of the first quarter of 2021, Telephone and Data Systems, Inc. owned 82 percent of UScellular. For more information about UScellular, visit uscellular.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. 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: intense competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; UScellular's smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of UScellular's businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties; uncertainties in UScellular's future cash flows and liquidity and access to the capital markets; the ability to make payments on UScellular indebtedness or comply with the terms of debt covenants; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; potential conflicts of interests between TDS and UScellular; cyber-attacks or other breaches of network or information technology security; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; the impact, duration and severity of public health emergencies, such as the COVID-19 pandemic. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of UScellular's Form 10-K, as updated by any UScellular Form 10-Q filed subsequent to such Form 10-K.

For more information about UScellular, visit: www.uscellular.com

United States Cellular Corporation

Summary Operating Data (Unaudited)

As of or for the Quarter Ended

3/31/2021


12/31/2020


9/30/2020


6/30/2020


3/31/2020

Retail Connections










Postpaid










Total at end of period

4,406,000



4,412,000



4,401,000



4,372,000



4,359,000


Gross additions

143,000



171,000



168,000



129,000



132,000


Feature phones

3,000



2,000



4,000



3,000



2,000


Smartphones

101,000



117,000



98,000



82,000



88,000


Connected devices

39,000



52,000



66,000



44,000



42,000


Net additions (losses)

(6,000)



11,000



28,000



12,000



(26,000)


Feature phones

(9,000)



(9,000)



(8,000)



(8,000)



(10,000)


Smartphones

6,000



12,000



8,000



11,000



(10,000)


Connected devices

(3,000)



8,000



28,000



9,000



(6,000)


ARPU1

$

47.65



$

47.51



$

47.10



$

46.24



$

47.23


ARPA2

$

125.25



$

124.87



$

123.27



$

120.70



$

122.92


Churn rate3

1.12

%


1.21

%


1.06

%


0.89

%


1.21

%

Handsets

0.92

%


1.01

%


0.88

%


0.71

%


0.95

%

Connected devices

2.53

%


2.64

%


2.35

%


2.24

%


3.11

%

Prepaid










Total at end of period

496,000



499,000



506,000



496,000



494,000


Gross additions

62,000



56,000



65,000



62,000



57,000


Net additions (losses)

(3,000)



(8,000)



11,000



2,000



(12,000)


ARPU1

$

35.25



$

35.15



$

35.45



$

34.89



$

34.07


Churn rate3

4.37

%


4.24

%


3.59

%


4.05

%


4.67

%

Total connections at end of period4

4,961,000



4,968,000



4,962,000



4,919,000



4,903,000


Market penetration at end of period










Consolidated operating population

31,493,000



31,314,000



31,314,000



31,292,000



31,292,000


Consolidated operating penetration5

16

%


16

%


16

%


16

%


16

%

Capital expenditures (millions)

$

125



$

320



$

216



$

168



$

236


Total cell sites in service

6,802



6,797



6,758



6,673



6,629


Owned towers

4,270



4,271



4,246



4,208



4,184




1         

Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below:


•       Postpaid ARPU consists of total postpaid service revenues and postpaid connections.


•       Prepaid ARPU consists of total prepaid service revenues and prepaid connections.

2         

Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.

3         

Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.

4         

Includes reseller and other connections.

5         

Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets.

 

United States Cellular Corporation

Consolidated Statement of Operations Highlights

(Unaudited)




Three Months Ended
March 31,


2021


2020


2021
vs. 2020

(Dollars and shares in millions, except per share amounts)






Operating revenues






Service

$

771



$

762



1

%

Equipment sales

252



201



26

%

Total operating revenues

1,023



963



6

%







Operating expenses






System operations (excluding Depreciation, amortization and accretion reported below)

185



180



3

%

Cost of equipment sold

275



217



26

%

Selling, general and administrative

305



335



(9)

%

Depreciation, amortization and accretion

170



177



(4)

%

(Gain) loss on asset disposals, net

5



4



39

%

(Gain) loss on sale of business and other exit costs, net

(1)





N/M

Total operating expenses

939



913



3

%







Operating income

84



50



67

%







Investment and other income (expense)






Equity in earnings of unconsolidated entities

42



45



(7)

%

Interest and dividend income

2



4



(52)

%

Interest expense

(39)



(24)



(66)

%

Other, net



1



N/M

Total investment and other income

5



26



(82)

%







Income before income taxes

89



76



17

%

Income tax expense

27



4



N/M

Net income

62



72



(14)

%

Less: Net income attributable to noncontrolling interests, net of tax

2



1



32

%

Net income attributable to UScellular shareholders

$

60



$

71



(15)

%







Basic weighted average shares outstanding

86



86



Basic earnings per share attributable to UScellular shareholders

$

0.70



$

0.82



(15)

%







Diluted weighted average shares outstanding

88



88



Diluted earnings per share attributable to UScellular shareholders

$

0.69



$

0.81



(15)

%


N/M - Percentage change not meaningful

 

United States Cellular Corporation

Consolidated Statement of Cash Flows

(Unaudited)


Three Months Ended
March 31,


2021


2020

(Dollars in millions)




Cash flows from operating activities




Net income

$

62



$

72


Add (deduct) adjustments to reconcile net income to net cash flows from operating activities




Depreciation, amortization and accretion

170



177


Bad debts expense

7



33


Stock-based compensation expense

6



7


Deferred income taxes, net

23



52


Equity in earnings of unconsolidated entities

(42)



(45)


Distributions from unconsolidated entities

22



24


(Gain) loss on asset disposals, net

5



4


(Gain) loss on sale of business and other exit costs, net

(1)




Other operating activities

(1)




Changes in assets and liabilities from operations




Accounts receivable

4



55


Equipment installment plans receivable

(18)



23


Inventory

7



(50)


Accounts payable

(86)



97


Customer deposits and deferred revenues

7



(10)


Accrued taxes

3



(49)


Accrued interest

9



9


Other assets and liabilities

(53)



(57)


Net cash provided by operating activities

124



342






Cash flows from investing activities




Cash paid for additions to property, plant and equipment

(133)



(315)


Cash paid for licenses

(1,256)



(26)


Cash paid for investments



(1)


Cash received from divestitures and exchanges

1




Net cash used in investing activities

(1,388)



(342)






Cash flows from financing activities




Issuance of long-term debt

492




Repayment of long-term debt



(2)


Common Shares reissued for benefit plans, net of tax payments

(1)




Repurchase of Common Shares

(2)



(21)


Payment of debt issuance costs

(1)



(1)


Distributions to noncontrolling interests

(1)



(1)


Other financing activities

(2)



1


Net cash provided by (used in) financing activities

485



(24)






Net decrease in cash, cash equivalents and restricted cash

(779)



(24)






Cash, cash equivalents and restricted cash




Beginning of period

1,291



291


End of period

$

512



$

267


 

United States Cellular Corporation

Consolidated Balance Sheet Highlights

(Unaudited)


ASSETS






March 31, 2021


December 31, 2020

(Dollars in millions)




Current assets




Cash and cash equivalents

$

479



$

1,271


Short-term investments

3



3


Accounts receivable, net

994



998


Inventory, net

139



146


Prepaid expenses

63



51


Income taxes receivable

124



125


Other current assets

43



29


Total current assets

1,845



2,623






Assets held for sale

1



2






Licenses

3,915



2,629






Investments in unconsolidated entities

455



435






Property, plant and equipment, net

2,419



2,466






Operating lease right-of-use assets

933



924






Other assets and deferred charges

580



602






Total assets

$

10,148



$

9,681


 

United States Cellular Corporation

Consolidated Balance Sheet Highlights

(Unaudited)


LIABILITIES AND EQUITY






March 31, 2021


December 31, 2020

(Dollars in millions, except per share amounts)




Current liabilities




Current portion of long-term debt

$

2



$

2


Accounts payable

282



387


Customer deposits and deferred revenues

158



151


Accrued taxes

47



48


Accrued compensation

40



82


Short-term operating lease liabilities

120



116


Other current liabilities

90



85


Total current liabilities

739



871






Liabilities held for sale



1






Deferred liabilities and credits




Deferred income tax liability, net

656



633


Long-term operating lease liabilities

879



875


Other deferred liabilities and credits

393



376






Long-term debt, net

2,981



2,489






Noncontrolling interests with redemption features

10



10






Equity




UScellular shareholders' equity




Series A Common and Common Shares, par value $1.00 per share

88



88


Additional paid-in capital

1,657



1,651


Treasury shares

(66)



(67)


Retained earnings

2,796



2,739


Total UScellular shareholders' equity

4,475



4,411






Noncontrolling interests

15



15






Total equity

4,490



4,426






Total liabilities and equity

$

10,148



$

9,681


 

United States Cellular Corporation

Financial Measures and Reconciliations

(Unaudited)


Free Cash Flow


Three Months Ended
March 31,


2021


2020

(Dollars in millions)




Cash flows from operating activities (GAAP)

$

124



$

342


Less: Cash paid for additions to property, plant and equipment

133



315


Free cash flow (Non-GAAP)1

$

(9)



$

27




1         

Free cash flow is a non-GAAP financial measure which UScellular believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment.

 

Cision View original content:http://www.prnewswire.com/news-releases/uscellular-reports-first-quarter-2021-results-301286078.html

SOURCE United States Cellular Corporation