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Debt | 12 Months Ended
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Dec. 31, 2023
Debt Disclosure [Abstract] |
Debt | Note 12 Debt Revolving Credit Agreements At December 31, 2023, TDS and UScellular had revolving credit agreements available for general corporate purposes. Amounts under the agreements may be borrowed, repaid and reborrowed from time to time until maturity in July 2026. The following table summarizes the revolving credit agreements as of December 31, 2023:
| TDS |  | UScellular
(Dollars in millions) |  |  |
Maximum borrowing capacity | $ | 400 |  |  | $ | 300 |
Letters of credit outstanding | $ | 1 |  |  | $ | — |
Amount borrowed | $ | 100 |  |  | $ | — |
Amount available for use | $ | 299 |  |  | $ | 300 |
Borrowings under the TDS and UScellular revolving credit agreements bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 1.60%. TDS and UScellular may select a borrowing period of either one, two, three or six months (or other period of twelve months or less if requested by TDS or UScellular and approved by the lenders). TDS’ and UScellular’s credit spread and commitment fees on their revolving credit agreements may be subject to increase if their current credit ratings from nationally recognized credit rating agencies are lowered, and may be subject to decrease if the ratings are raised. In January 2024, TDS borrowed $25 million under its revolving credit agreement. Term Loan Agreements The following tables summarizes the term loan credit agreements as of December 31, 2023:
TDS: | Term Loan 1 | Term Loan 2 | Total
(Dollars in millions) |  |  |
Maximum borrowing capacity | $ | 200 |  | $ | 300 |  | $ | 500 |
Amount borrowed and outstanding | $ | 196 |  | $ | 296 |  | $ | 492 |
Amount borrowed and repaid | $ | 4 |  | $ | 4 |  | $ | 8 |
Amount available for use | $ | — |  | $ | — |  | $ | — |
Interest rate | SOFR plus 2.10% | SOFR plus 2.60% |
Maturity date | July 2028 | July 2031 |
Quarterly installments | $0.5 million from December 2021 to maturity date | $0.75 million from December 2022 to September 2026; $2 million from December 2026 to maturity date |
UScellular: | Term Loan 1 | Term Loan 2 | Term Loan 3 | Total
(Dollars in millions) |  |  |  |
Maximum borrowing capacity | $ | 300 |  | $ | 300 |  | $ | 200 |  | $ | 800 |
Amount borrowed and outstanding | $ | 292 |  | $ | 293 |  | $ | 198 |  | $ | 783 |
Amount borrowed and repaid | $ | 8 |  | $ | 7 |  | $ | 2 |  | $ | 17 |
Amount available for use | $ | — |  | $ | — |  | $ | — |  | $ | — |
Interest rate | SOFR plus 1.60% | SOFR plus 2.10% | SOFR plus 2.60% |
Maturity date | July 2026 | July 2028 | July 2031 |
Quarterly installments | $2 million from March 2023 to December 2023; $4 million from March 2024 to December 2025; $8 million from March 2026 to maturity date | $0.75 million from December 2021 to maturity date | $0.5 million from December 2022 to September 2026; $1 million from December 2026 to maturity date |
Secured Term Loan Agreement In September 2023, TDS entered into a $300 million senior secured term loan credit agreement. The maturity date of the agreement is the earlier of (i) September 2026 and (ii) the date that is 91 days prior to the scheduled maturity date of TDS' existing revolving credit agreement (which maturity date is currently July 2026). The agreement requires TDS to make prepayments of the outstanding borrowings to the extent TDS receives cash proceeds in excess of prescribed thresholds from certain transactions as more fully described in the agreement. Borrowings under the agreement bear interest at a rate of SOFR plus 2.00%, which increases at certain dates throughout the term of the agreement. During 2023, TDS borrowed the full amount of $300 million available under the agreement. This term loan is secured by a perfected security interest in certain assets of TDS, including 26 million common shares in UScellular, TDS' equity interest in certain wholly-owned subsidiaries, and all or substantially all of TDS' personal property that does not constitute equity interests. This term loan is also secured by a perfected security interest in certain assets of certain wholly-owned subsidiaries of TDS that are also guarantors, including without limitation and subject to customary exceptions, equity interests in certain wholly-owned subsidiaries of such subsidiaries and all or substantially all of the personal property of such guarantor subsidiaries that does not consist of equity interests. This agreement includes representations and warranties, covenants, events of default and other terms and conditions that are substantially similar to TDS' existing term loan and revolving credit agreements or otherwise customary for similar secured credit facilities. Export Credit Financing Agreements At December 31, 2023, TDS had a $150 million term loan credit facility with Export Development Canada to finance (or refinance) imported equipment, including equipment purchased prior to entering the term loan credit facility agreement. Borrowings bear interest at a rate of SOFR plus 1.60% and are due and payable on the five-year anniversary of the first borrowing, which is in December 2027. During 2023, TDS borrowed $100 million under the agreement. As of December 31, 2023, the outstanding borrowings were $150 million, which is the full amount available under the agreement. At December 31, 2023, UScellular had a $150 million term loan credit facility with Export Development Canada to finance (or refinance) imported equipment, including equipment purchased prior to entering the term loan credit facility agreement. Borrowings bear interest at a rate of SOFR plus 1.60% and are due and payable on the five-year anniversary of the first borrowing, which is in January 2027. As of December 31, 2023, UScellular has borrowed the full amount available under the agreement. Receivables Securitization Agreement At December 31, 2023, UScellular, through its subsidiaries, had a $450 million receivables securitization agreement that permits securitized borrowings using its equipment installment plan receivables. In September 2023, UScellular amended the agreement to extend the maturity date to September 2025. Amounts under the agreement may be borrowed, repaid and reborrowed from time to time until maturity. Unless the agreement is amended to extend the maturity date, repayments based on receivable collections commence in October 2025. The outstanding borrowings bear interest at a rate of the lender's cost of funds (which has historically tracked closely to SOFR) plus 1.15%. During 2023, UScellular borrowed $315 million and repaid $440 million under the agreement. As of December 31, 2023, the outstanding borrowings under the agreement were $150 million and the unused borrowing capacity was $300 million, subject to sufficient collateral to satisfy the asset borrowing base provisions of the agreement. As of December 31, 2023, the USCC Master Note Trust held $304 million of assets available to be pledged as collateral for the receivables securitization agreement. In connection with entering into the receivables securitization agreement in 2017, UScellular formed a wholly-owned subsidiary, USCC Master Note Trust (Trust), which qualifies as a bankruptcy remote entity. Under the terms of the agreement, UScellular, through its subsidiaries, transfers eligible equipment installment receivables to the Trust. The Trust then utilizes the transferred assets as collateral for notes payables issued to third-party financial institutions. Since UScellular retains effective control of the transferred assets in the Trust, any activity associated with this receivables securitization agreement will be treated as a secured borrowing. Therefore, TDS will continue to report equipment installment receivables and any related balances on the Consolidated Balance Sheet. Cash received from borrowings under the receivables securitization agreement will be reported as Debt. Refer to Note 15 — Variable Interest Entities for additional information. In January 2024, UScellular repaid $50 million under the agreement. Repurchase Agreement At December 31, 2023, UScellular, through a subsidiary (the repo subsidiary), had a repurchase agreement to borrow up to $200 million, subject to the availability of eligible equipment installment plan receivables and the agreement of the lender. In January 2023, UScellular amended the repurchase agreement to extend the expiration date to January 2024. The outstanding borrowings bear interest at a rate of the lender's cost of funds (which has historically tracked closely to SOFR) plus 1.35%. As of December 31, 2022, the outstanding borrowings under the agreement were $60 million and were included in Other current liabilities in the Consolidated Balance Sheet. During 2023, the repo subsidiary repaid $60 million under the agreement. As of December 31, 2023, there were no outstanding borrowings under the agreement and the unused borrowing capacity was $200 million, which was restricted from being borrowed due to covenants within the TDS and UScellular credit agreements that limit secured borrowings on an enterprise-wide basis. As of December 31, 2023, UScellular held $669 million of assets available for inclusion in the repurchase facility; these assets are distinct from the assets held by the USCC Master Note Trust for UScellular's receivables securitization agreement. The UScellular repurchase agreement expired in January 2024. Debt Covenants and Other The TDS and UScellular revolving credit agreements, term loan agreements including the secured term loan, export credit financing agreements and the UScellular receivables securitization agreement require TDS or UScellular, as applicable, to comply with certain affirmative and negative covenants, which include certain financial covenants that may restrict the borrowing capacity available. In March 2023, the agreements were amended to require TDS and UScellular to maintain the Consolidated Leverage Ratio as of the end of any fiscal quarter at a level not to exceed the following: 4.25 to 1.00 from January 1, 2023 through March 31, 2024; 4.00 to 1.00 from April 1, 2024 through March 31, 2025; 3.75 to 1.00 from April 1, 2025 and thereafter. TDS and UScellular are also required to maintain the Consolidated Interest Coverage Ratio at a level not lower than 3.00 to 1.00 as of the end of any fiscal quarter. TDS and UScellular believe they were in compliance as of December 31, 2023 with all such financial covenants. In connection with UScellular’s revolving credit agreements, UScellular term loan agreements and the UScellular export credit financing agreement, TDS and UScellular entered into subordination agreements together with the administrative agents for the lenders under each agreement. Pursuant to these subordination agreements, (a) any consolidated funded indebtedness from UScellular to TDS will be unsecured and (b) any (i) consolidated funded indebtedness from UScellular to TDS (other than “refinancing indebtedness” as defined in the subordination agreements) in excess of $105 million and (ii) refinancing indebtedness in excess of $250 million will be subordinated and made junior in right of payment to the prior payment in full of obligations to the lenders under each agreement. As of December 31, 2023, UScellular had no outstanding consolidated funded indebtedness or refinancing indebtedness that was subordinated to each agreement pursuant to the subordination agreements. Certain TDS and UScellular wholly-owned subsidiaries have jointly and severally unconditionally guaranteed the payment and performance of the obligations of TDS and UScellular under the revolving credit agreements, term loan agreements and export credit agreements. Other subsidiaries that meet certain criteria will be required to provide a similar guaranty in the future. UScellular entered into a performance guaranty whereby UScellular guarantees the performance of certain wholly-owned subsidiaries under the receivables securitization agreement and repurchase agreement. Other Long-Term Debt Long-term debt as of December 31, 2023 and 2022, was as follows:
|  |  |  | December 31, 2023 |  | December 31, 2022
| Issuance date | Maturity date | Call date (any time on or after) | Principal Amount |  | Less Unamortized discount and debt issuance costs |  | Total |  | Principal Amount |  | Less Unamortized discount and debt issuance costs |  | Total
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |
UScellular Unsecured Senior Notes |  |  |  |  |  |  |  |  |  |  |  |
6.70% | Dec 2003 and June 2004 | Dec 2033 | Dec 2003 and June 2004 | $ | 544 |  |  | $ | 11 |  |  | $ | 533 |  |  | $ | 544 |  |  | $ | 11 |  |  | $ | 533 |
6.25% | Aug 2020 | Sep 2069 | Sep 2025 | 500 |  |  | 17 |  |  | 483 |  |  | 500 |  |  | 17 |  |  | 483 |
5.50% | Dec 2020 | Mar 2070 | Mar 2026 | 500 |  |  | 17 |  |  | 483 |  |  | 500 |  |  | 17 |  |  | 483 |
5.50% | May 2021 | Jun 2070 | Jun 2026 | 500 |  |  | 16 |  |  | 484 |  |  | 500 |  |  | 16 |  |  | 484 |
UScellular Term Loans |  | 783 |  |  | 4 |  |  | 779 |  |  | 796 |  |  | 6 |  |  | 790 |
TDS Term Loans |  | 492 |  |  | 4 |  |  | 488 |  |  | 497 |  |  | 4 |  |  | 493 |
TDS Secured Term Loan |  |  |  | 300 |  |  | 3 |  |  | 297 |  |  | — |  |  | — |  |  | — |
UScellular EIP Securitization |  | 150 |  |  | — |  |  | 150 |  |  | 275 |  |  | — |  |  | 275 |
TDS Export Credit Financing |  |  | 150 |  |  | — |  |  | 150 |  |  | 50 |  |  | — |  |  | 50 |
UScellular Export Credit Financing |  |  | 150 |  |  | 1 |  |  | 149 |  |  | 150 |  |  | 1 |  |  | 149 |
TDS Revolving Credit |  |  |  | 100 |  |  | — |  |  | 100 |  |  | — |  |  | — |  |  | — |
Finance lease obligations |  | 6 |  |  | — |  |  | 6 |  |  | 7 |  |  | — |  |  | 7 |
Other long-term notes |  | 4 |  |  | — |  |  | 4 |  |  | 3 |  |  | — |  |  | 3 |
Total long-term debt |  | $ | 4,179 |  |  | $ | 73 |  |  | $ | 4,106 |  |  | $ | 3,822 |  |  | $ | 72 |  |  | $ | 3,750 |
Long-term debt, current |  |  |  |  |  | $ | 26 |  |  |  |  |  |  | $ | 19 |
Long-term debt, noncurrent |  |  |  |  |  | $ | 4,080 |  |  |  |  |  |  | $ | 3,731 |
UScellular may redeem its 6.25% Senior Notes, 5.5% March 2070 Senior Notes and 5.5% June 2070 Senior Notes, in whole or in part at any time after the respective call date, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest. UScellular may redeem the 6.7% Senior Notes, in whole or in part, at any time prior to maturity at a redemption price equal to the greater of (a) 100% of the principal amount of such notes, plus accrued and unpaid interest, or (b) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 30 basis points. Interest on the Senior Notes outstanding at December 31, 2023, is payable quarterly, with the exception of UScellular's 6.7% Senior Notes for which interest is payable semi-annually. The annual requirements for principal payments on long-term debt are approximately $26 million, $26 million, $676 million, $319 million and $482 million for the years 2024 through 2028, respectively. These amounts do not include payments on the $150 million of outstanding borrowings under the receivables securitization agreement. If the maturity date of the facility is not extended, principal repayments begin in October 2025. Principal repayments are not scheduled but are instead based on actual receivable collections. The covenants associated with TDS and its subsidiaries’ long-term debt obligations, among other things, restrict TDS’ ability, subject to certain exclusions, to incur additional liens, enter into sale and leaseback transactions, and sell, consolidate or merge assets. UScellular’s long-term debt notes do not contain any provisions resulting in acceleration of the maturities of outstanding debt in the event of a change in UScellular’s credit rating.

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