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Business Segment Information | 6 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
Business Segment Information | Note 11 Business Segment Information During the second quarter of 2024, UScellular modified its reporting structure due to the planned disposal of its wireless operations and, as a result, disaggregated its operations into two reportable segments – Wireless and Towers. This presentation reflects how UScellular's chief operating decision maker allocates resources and evaluates operating performance following this strategic shift. The Towers segment records rental revenue and the Wireless segment records a related expense when the Wireless segment uses company-owned towers to locate its network equipment, using estimated market pricing - this revenue and expense is eliminated in consolidation. Prior periods have been updated to conform to the new reportable segments. Financial data for UScellular’s reportable segments for the three and six month periods ended, or as of June 30, 2024 and 2023, is as follows. See Note 1 — Basis of Presentation for additional information.
Three Months Ended or as of June 30, 2024 | Wireless |  | Towers |  | Intra-company eliminations |  | UScellular Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 718 |  |  | $ | 58 |  |  | $ | (33) |  |  | $ | 743 |
Equipment and product sales | 184 |  |  | — |  |  | — |  |  | 184 |
Total operating revenues | 902 |  |  | 58 |  |  | (33) |  |  | 927 |
System operations (excluding Depreciation, amortization and accretion reported below) | 194 |  |  | 19 |  |  | (33) |  |  | 180 |
Cost of equipment and products | 211 |  |  | — |  |  | — |  |  | 211 |
Selling, general and administrative | 313 |  |  | 9 |  |  | — |  |  | 322 |
Depreciation, amortization and accretion | 154 |  |  | 11 |  |  | — |  |  | 165 |
(Gain) loss on asset disposals, net | 5 |  |  | — |  |  | — |  |  | 5 |
(Gain) loss on license sales and exchanges, net | 8 |  |  | — |  |  | — |  |  | 8 |
Operating income | 17 |  |  | 19 |  |  | — |  |  | 36 |
Equity in earnings of unconsolidated entities 1 |  |  |  |  |  |  | 38 |
Interest and dividend income 1 |  |  |  |  |  |  | 3 |
Interest expense 1 |  |  |  |  |  |  | (45) |
Income before income taxes |  |  |  |  |  |  | 32 |
Income tax expense (benefit)1 |  |  |  |  |  |  | 14 |
Net income |  |  |  |  |  |  | 18 |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 154 |  |  | 11 |  |  | — |  |  | 165 |
Expenses related to strategic alternatives review | 12 |  |  | 1 |  |  | — |  |  | 13 |
(Gain) loss on asset disposals, net | 5 |  |  | — |  |  | — |  |  | 5 |
(Gain) loss on license sales and exchanges, net | 8 |  |  | — |  |  | — |  |  | 8 |
Interest expense 1 |  |  |  |  |  |  | 45 |
Income tax expense (benefit)1 |  |  |  |  |  |  | 14 |
Adjusted EBITDA 2 | $ | 196 |  |  | $ | 31 |  |  | $ | — |  |  | $ | 268 |
Investments in unconsolidated entities 1 |  |  |  |  |  |  | $ | 461 |
Total assets 3 |  |  |  |  |  |  | $ | 10,639 |
Capital expenditures | $ | 160 |  |  | $ | 5 |  |  | $ | — |  |  | $ | 165 |
Three Months Ended or as of June 30, 2023 | Wireless |  | Towers |  | Intra-company eliminations |  | UScellular Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 735 |  |  | $ | 57 |  |  | $ | (32) |  |  | $ | 760 |
Equipment and product sales | 197 |  |  | — |  |  | — |  |  | 197 |
Total operating revenues | 932 |  |  | 57 |  |  | (32) |  |  | 957 |
System operations (excluding Depreciation, amortization and accretion reported below) | 203 |  |  | 19 |  |  | (32) |  |  | 190 |
Cost of equipment and products | 228 |  |  | — |  |  | — |  |  | 228 |
Selling, general and administrative | 333 |  |  | 8 |  |  | — |  |  | 341 |
Depreciation, amortization and accretion | 149 |  |  | 12 |  |  | — |  |  | 161 |
(Gain) loss on asset disposals, net | 3 |  |  | — |  |  | — |  |  | 3 |
Operating income | 16 |  |  | 18 |  |  | — |  |  | 34 |
Equity in earnings of unconsolidated entities 1 |  |  |  |  |  |  | 38 |
Interest and dividend income 1 |  |  |  |  |  |  | 3 |
Interest expense 1 |  |  |  |  |  |  | (51) |
Income before income taxes |  |  |  |  |  |  | 24 |
Income tax expense 1 |  |  |  |  |  |  | 19 |
Net income |  |  |  |  |  |  | 5 |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 149 |  |  | 12 |  |  | — |  |  | 161 |
(Gain) loss on asset disposals, net | 3 |  |  | — |  |  | — |  |  | 3 |
Interest expense 1 |  |  |  |  |  |  | 51 |
Income tax expense 1 |  |  |  |  |  |  | 19 |
Adjusted EBITDA 2 | $ | 168 |  |  | $ | 30 |  |  | $ | — |  |  | $ | 239 |
Investments in unconsolidated entities 1 |  |  |  |  |  |  | $ | 457 |
Total assets 3 |  |  |  |  |  |  | $ | 10,889 |
Capital expenditures | $ | 140 |  |  | $ | 3 |  |  | $ | — |  |  | $ | 143 |
Six Months Ended or as of June 30, 2024 | Wireless |  | Towers |  | Intra-company eliminations |  | UScellular Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 1,446 |  |  | $ | 116 |  |  | $ | (65) |  |  | $ | 1,497 |
Equipment and product sales | 380 |  |  | — |  |  | — |  |  | 380 |
Total operating revenues | 1,826 |  |  | 116 |  |  | (65) |  |  | 1,877 |
System operations (excluding Depreciation, amortization and accretion reported below) | 390 |  |  | 37 |  |  | (65) |  |  | 362 |
Cost of equipment and products | 427 |  |  | — |  |  | — |  |  | 427 |
Selling, general and administrative | 637 |  |  | 16 |  |  | — |  |  | 653 |
Depreciation, amortization and accretion | 308 |  |  | 21 |  |  | — |  |  | 329 |
(Gain) loss on asset disposals, net | 10 |  |  | 1 |  |  | — |  |  | 11 |
(Gain) loss on license sales and exchanges, net | 7 |  |  | — |  |  | — |  |  | 7 |
Operating income | 47 |  |  | 41 |  |  | — |  |  | 88 |
Equity in earnings of unconsolidated entities 1 |  |  |  |  |  |  | 80 |
Interest and dividend income 1 |  |  |  |  |  |  | 6 |
Interest expense 1 |  |  |  |  |  |  | (91) |
Income before income taxes |  |  |  |  |  |  | 83 |
Income tax expense (benefit)1 |  |  |  |  |  |  | 41 |
Net income |  |  |  |  |  |  | 42 |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 308 |  |  | 21 |  |  | — |  |  | 329 |
Expenses related to strategic alternatives review | 20 |  |  | 1 |  |  | — |  |  | 21 |
(Gain) loss on asset disposals, net | 10 |  |  | 1 |  |  | — |  |  | 11 |
(Gain) loss on license sales and exchanges, net | 7 |  |  | — |  |  | — |  |  | 7 |
Interest expense 1 |  |  |  |  |  |  | 91 |
Income tax expense (benefit)1 |  |  |  |  |  |  | 41 |
Adjusted EBITDA 2 | $ | 392 |  |  | $ | 64 |  |  | $ | — |  |  | $ | 542 |
Capital expenditures | $ | 286 |  |  | $ | 9 |  |  | $ | — |  |  | $ | 295 |
Six Months Ended or as of June 30, 2023 | Wireless |  | Towers |  | Intra-company eliminations |  | UScellular Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 1,477 |  |  | $ | 113 |  |  | $ | (63) |  |  | $ | 1,527 |
Equipment and product sales | 415 |  |  | — |  |  | — |  |  | 415 |
Total operating revenues | 1,892 |  |  | 113 |  |  | (63) |  |  | 1,942 |
System operations (excluding Depreciation, amortization and accretion reported below) | 398 |  |  | 37 |  |  | (63) |  |  | 372 |
Cost of equipment and products | 480 |  |  | — |  |  | — |  |  | 480 |
Selling, general and administrative | 670 |  |  | 16 |  |  | — |  |  | 686 |
Depreciation, amortization and accretion | 307 |  |  | 23 |  |  | — |  |  | 330 |
(Gain) loss on asset disposals, net | 13 |  |  | — |  |  | — |  |  | 13 |
Operating income | 24 |  |  | 37 |  |  | — |  |  | 61 |
Equity in earnings of unconsolidated entities 1 |  |  |  |  |  |  | 82 |
Interest and dividend income 1 |  |  |  |  |  |  | 5 |
Interest expense 1 |  |  |  |  |  |  | (99) |
Income before income taxes |  |  |  |  |  |  | 49 |
Income tax expense 1 |  |  |  |  |  |  | 29 |
Net income |  |  |  |  |  |  | 20 |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 307 |  |  | 23 |  |  | — |  |  | 330 |
(Gain) loss on asset disposals, net | 13 |  |  | — |  |  | — |  |  | 13 |
Interest expense 1 |  |  |  |  |  |  | 99 |
Income tax expense 1 |  |  |  |  |  |  | 29 |
Adjusted EBITDA 2 | $ | 344 |  |  | $ | 60 |  |  | $ | — |  |  | $ | 491 |
Capital expenditures | $ | 346 |  |  | $ | 5 |  |  | $ | — |  |  | $ | 351 |
1 Income and expense items below Operating income are not provided at the individual segment level for Wireless and Towers. These items are not included in the evaluation of operating performance of the segments, and therefore are reported for "UScellular Total". 2 Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is a segment measure reported to the chief operating decision maker for purposes of assessing the segments' performance. Adjusted EBITDA is defined as net income, adjusted for the items set forth in the reconciliation above. UScellular believes Adjusted EBITDA is a useful measure of UScellular’s operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as it provides 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. 3 Assets are not provided at the individual segment level for Wireless and Towers. The segments operate under a common capital structure, and management has historically considered its assets collectively as part of a combined wireless network.

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