USM
$36.21
United States Cellular
($.44)
(1.20%)
Earnings Details
Quarter December 2020
Thursday, February 18, 2021 4:05:00 PM
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Summary

US Cellular Sees Revenue Below Estimates

United States Cellular (USM) reported Quarter December 2020 earnings of $0.06 per share on revenue of $1.1 billion. The consensus earnings estimate was $0.05 per share on revenue of $1.1 billion. Revenue grew 2.0% on a year-over-year basis.

The company said it expects 2021 revenue of $3.025 billion to $3.125 billion. The current consensus revenue estimate is $4.12 billion for the year ending December 31, 2021.

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
$0.06
Earnings Whisper
-
Consensus Estimate
$0.05
Reported Revenue
$1.07 Bil
Revenue Estimate
$1.06 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

UScellular reports fourth quarter and full year 2020 results

CHICAGO, Feb. 18, 2021 /PRNewswire/ --

As previously announced, UScellular will hold a teleconference on February 19, 2021 at 9:00 a.m. CST. Listen to the call live via the Events & Presentations page of investors.uscellular.com.

United States Cellular Corporation (NYSE:USM) reported total operating revenues of $1,073 million for the fourth quarter of 2020, versus $1,052 million for the same period one year ago. Net income attributable to UScellular shareholders and related diluted earnings per share were $5 million and $0.06, respectively, for the fourth quarter of 2020 compared to $18 million and $0.20, respectively, in the same period one year ago.

UScellular reported total operating revenues of $4,037 million and $4,022 million for the years ended 2020 and 2019, respectively. Net income attributable to UScellular shareholders and related diluted earnings per share were $229 million and $2.62, respectively, for the year ended 2020 compared to $127 million and $1.44, respectively, for the year ended 2019.

"UScellular met the challenges of 2020 successfully, as we closed out the year with strong results - a testament to the essential nature of our services, our talented and resilient team, and our unwavering commitment to keeping our customers connected," said Laurent Therivel, UScellular President and CEO.  

"2020 was a strong year for UScellular. Notwithstanding the challenges of the pandemic, we maintained high levels of customer satisfaction and grew retail net additions. Growth in operating revenue, combined with maintaining operational and cost discipline, contributed to an increase in full year profitability. Our network modernization program and investments in 5G continued, and despite significant increases in data usage, we were able to keep system expenses in check.

"I look forward to building on the momentum of 2020 as we move into the new year. Connecting our customers, especially in underserved areas, with the highest-quality network is one of our top priorities and remains a key competitive differentiator. We will be focused on market share expansion, ramping up business opportunities that utilize 5G and IoT, enhancing our digital experience, and continuing our network modernization programs." 

2021 Estimated Results

UScellular's current estimates of full-year 2021 results are shown below. Such estimates represent management's view as of February 18, 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


Actual Results for
the Year Ended
December 31, 2020

(Dollars in millions)




Service revenues

$3,025-$3,125


$3,067

Adjusted OIBDA1

$800-$950


$876

Adjusted EBITDA1

$975-$1,125


$1,063

Capital expenditures

$775-$875


$940

The following table provides a reconciliation of Net income to Adjusted OIBDA and Adjusted EBITDA for 2021 estimated results and actual results for the year ended December 31, 2020. 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.


2021 Estimated
Results


Actual Results for
the Year Ended
December 31, 2020

(Dollars in millions)




Net income (GAAP)

N/A


$233

Add back or deduct:




Income tax expense

N/A


17

Income before income taxes (GAAP)

$135-$285


$250

Add back:




Interest expense

135


112

Depreciation, amortization and accretion expense

685


683

EBITDA (Non-GAAP)1

$955-$1,105


$1,045

Add back or deduct:




(Gain) loss on asset disposals, net

20


25

(Gain) loss on license sales and exchanges, net


(5)

(Gain) loss on investments


(2)

Adjusted EBITDA (Non-GAAP)1

$975-$1,125


$1,063

Deduct:




Equity in earnings of unconsolidated entities

170


179

Interest and dividend income

5


8

Adjusted OIBDA (Non-GAAP)1

$800-$950


$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 December 31, 2020, can be found on UScellular's website at investors.uscellular.com.

Conference Call Information

UScellular will hold a conference call on February 19, 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 had 5,300 full- and part-time associates as of December 31, 2020. At the end of the fourth quarter of 2020, 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.

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

 

United States Cellular Corporation

Summary Operating Data (Unaudited)


As of or for the Quarter Ended

12/31/2020


9/30/2020


6/30/2020


3/31/2020


12/31/2019

Retail Connections










Postpaid










Total at end of period

4,412,000



4,401,000



4,372,000



4,359,000



4,383,000


Gross additions

171,000



168,000



129,000



132,000



170,000


Feature phones

2,000



4,000



3,000



2,000



2,000


Smartphones

117,000



98,000



82,000



88,000



128,000


Connected devices

52,000



66,000



44,000



42,000



40,000


Net additions (losses)

11,000



28,000



12,000



(26,000)



(12,000)


Feature phones

(9,000)



(8,000)



(8,000)



(10,000)



(11,000)


Smartphones

12,000



8,000



11,000



(10,000)



13,000


Connected devices

8,000



28,000



9,000



(6,000)



(14,000)


ARPU1

$

47.51



$

47.10



$

46.24



$

47.23



$

46.57


ARPA2

$

124.87



$

123.27



$

120.70



$

122.92



$

120.99


Churn rate3

1.21

%


1.06

%


0.89

%


1.21

%


1.38

%

Handsets

1.01

%


0.88

%


0.71

%


0.95

%


1.11

%

Connected devices

2.64

%


2.35

%


2.24

%


3.11

%


3.44

%

Prepaid










Total at end of period

499,000



506,000



496,000



494,000



506,000


Gross additions

56,000



65,000



62,000



57,000



63,000


Net additions (losses)

(8,000)



11,000



2,000



(12,000)



(3,000)


ARPU1

$

35.15



$

35.45



$

34.89



$

34.07



$

34.11


Churn rate3

4.24

%


3.59

%


4.05

%


4.67

%


4.40

%

Total connections at end of period4

4,968,000



4,962,000



4,919,000



4,903,000



4,941,000


Market penetration at end of period










Consolidated operating population

31,314,000



31,314,000



31,292,000



31,292,000



30,740,000


Consolidated operating penetration5

16

%


16

%


16

%


16

%


16

%

Capital expenditures (millions)

$

320



$

216



$

168



$

236



$

243


Total cell sites in service

6,797



6,758



6,673



6,629



6,578


Owned towers

4,271



4,246



4,208



4,184



4,166



Due to rounding, the sum of quarterly results may not equal the total for the year.

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
December 31,


Year Ended
December 31,


2020


2019


2020 vs. 2019


2020


2019


2020 vs. 2019

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












Operating revenues












Service

$

776



$

763



2

%


$

3,067



$

3,035



1

%

Equipment sales

297



289



3

%


970



987



(2)

%

Total operating revenues

1,073



1,052



2

%


4,037



4,022
















Operating expenses












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

202



188



7

%


782



756



3

%

Cost of equipment sold

319



305



5

%


1,011



1,028



(2)

%

Selling, general and administrative

374



378



(1)

%


1,368



1,406



(3)

%

Depreciation, amortization and accretion

168



178



(6)

%


683



702



(3)

%

(Gain) loss on asset disposals, net

11



6



91

%


25



19



36

%

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





N/M





(1)



N/M


(Gain) loss on license sales and exchanges, net

(5)





N/M



(5)





N/M


Total operating expenses

1,069



1,055



1

%


3,864



3,910



(1)

%













Operating income (loss)

4



(3)



N/M



173



112



54

%













Investment and other income (expense)












Equity in earnings of unconsolidated entities

42



38



11

%


179



166



8

%

Interest and dividend income

2



3



(44)

%


8



17



(54)

%

Gain (loss) on investments

(1)





N/M



2





N/M


Interest expense

(35)



(23)



(53)

%


(112)



(110)



(2)

%

Total investment and other income

8



18



(58)

%


77



73



6

%













Income before income taxes

12



15



(20)

%


250



185



35

%

Income tax expense (benefit)

5



(3)



N/M



17



52



(68)

%

Net income

7



18



(64)

%


233



133



76

%

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

2





N/M



4



6



(30)

%

Net income attributable to UScellular shareholders

$

5



$

18



(70)

%


$

229



$

127



81

%













Basic weighted average shares outstanding

86



86





86



86




Basic earnings per share attributable to UScellular shareholders

$

0.06



$

0.21



(70)

%


$

2.66



$

1.47



81

%













Diluted weighted average shares outstanding

88



88





87



88



(1)

%

Diluted earnings per share attributable to UScellular shareholders

$

0.06



$

0.20



(70)

%


$

2.62



$

1.44



82

%


N/M - Percentage change not meaningful

 

United States Cellular Corporation

Consolidated Statement of Cash Flows

(Unaudited)





Year Ended December 31,

2020


2019

(Dollars in millions)




Cash flows from operating activities




Net income

$

233



$

133


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




Depreciation, amortization and accretion

683



702


Bad debts expense

72



107


Stock-based compensation expense

32



41


Deferred income taxes, net

130



(4)


Equity in earnings of unconsolidated entities

(179)



(166)


Distributions from unconsolidated entities

189



161


(Gain) loss on asset disposals, net

25



19


(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)




Other operating activities

2



4


Changes in assets and liabilities from operations




Accounts receivable

(8)



(46)


Equipment installment plans receivable

(54)



(97)


Inventory

16



(20)


Accounts payable

145



(69)


Customer deposits and deferred revenues

2



(8)


Accrued taxes

(57)



(23)


Other assets and liabilities

13



(9)


Net cash provided by operating activities

1,237



724






Cash flows from investing activities




Cash paid for additions to property, plant and equipment

(989)



(650)


Cash paid for licenses

(171)



(266)


Cash received from investments

1



29


Cash paid for investments

(3)



(11)


Cash received from divestitures and exchanges

26



41


Advance payments for license acquisitions

(30)



(5)


Other investing activities

3



(2)


Net cash used in investing activities

(1,163)



(864)






Cash flows from financing activities




Issuance of long-term debt

1,125




Repayment of long-term debt

(108)



(116)


Common Shares reissued for benefit plans, net of tax payments

(11)



(9)


Repurchase of Common Shares

(23)



(21)


Payment of debt issuance costs

(38)



(1)


Distributions to noncontrolling interests

(6)



(4)


Payments to acquire additional interest in subsidiaries

(11)




Other financing activities

(2)



(1)


Net cash provided by (used in) financing activities

926



(152)






Net increase (decrease) in cash, cash equivalents and restricted cash

1,000



(292)






Cash, cash equivalents and restricted cash




Beginning of period

291



583


End of period

$

1,291



$

291



 

United States Cellular Corporation

Consolidated Balance Sheet Highlights

(Unaudited)


ASSETS





December 31,

2020


2019

(Dollars in millions)




Current assets




Cash and cash equivalents

$

1,271



$

285


Short-term investments

3




Accounts receivable, net

998



1,010


Inventory, net

146



162


Prepaid expenses

51



50


Income taxes receivable

125



46


Other current assets

29



20


Total current assets

2,623



1,573






Assets held for sale

2








Licenses

2,629



2,471






Investments in unconsolidated entities

435



447






Property, plant and equipment, net

2,466



2,207






Operating lease right-of-use assets

924



900






Other assets and deferred charges

602



566






Total assets

$

9,681



$

8,164



 

United States Cellular Corporation

Consolidated Balance Sheet Highlights

(Unaudited)


LIABILITIES AND EQUITY





December 31,

2020


2019

(Dollars in millions, except per share amounts)




Current liabilities




Current portion of long-term debt

$

2



$

8


Accounts payable

387



304


Customer deposits and deferred revenues

151



148


Accrued taxes

48



30


Accrued compensation

82



76


Short-term operating lease liabilities

116



105


Other current liabilities

85



79


Total current liabilities

871



750






Liabilities held for sale

1








Deferred liabilities and credits




Deferred income tax liability, net

633



507


Long-term operating lease liabilities

875



865


Other deferred liabilities and credits

376



319






Long-term debt, net

2,489



1,502






Noncontrolling interests with redemption features

10



11






Equity




UScellular shareholders' equity




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

88



88


Additional paid-in capital

1,651



1,629


Treasury shares

(67)



(70)


Retained earnings

2,739



2,550


Total UScellular shareholders' equity

4,411



4,197






Noncontrolling interests

15



13






Total equity

4,426



4,210






Total liabilities and equity

$

9,681



$

8,164


 

United States Cellular Corporation

Financial Measures and Reconciliations

(Unaudited)


Free Cash Flow


Three Months Ended
December 31,


Year Ended
December 31,


2020


2019


2020


2019

(Dollars in millions)








Cash flows from operating activities (GAAP)

$

288



$

37



$

1,237



$

724


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

299



210



989



650


Free cash flow (Non-GAAP)1

$

(11)



$

(173)



$

248



$

74




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-fourth-quarter-and-full-year-2020-results-301231269.html

SOURCE United States Cellular Corporation