Leases

12 Months Ended

Dec. 31, 2024

Note 11 Leases

Lessee Agreements

UScellular's most significant leases are for land and tower spaces, network facilities, retail spaces, and offices, substantially all of which are classified as operating leases. Many of UScellular's leases include renewal and early termination options. Lease terms include options to extend or terminate when it is reasonably certain that UScellular will exercise the option.

UScellular has recognized a right-of-use asset and a corresponding lease liability that represents the present value of UScellular's obligation to make payments over the lease term. The present value of the lease payments is calculated using an incremental borrowing rate, which was determined using a portfolio approach based on UScellular's unsecured rates, adjusted to approximate the rates at which UScellular would be required to borrow on a collateralized basis over a term similar to the recognized lease term.

Lease and nonlease components are accounted for separately and the cost of nonlease components (e.g., utilities and common area maintenance) are typically expensed as incurred at their relative standalone price.

UScellular recognizes variable lease expense related to lease payments that were not originally included in the lease liability calculation, which primarily relate to lease payment escalations that are tied to an index, real estate taxes, and additional payments linked to performance.

The following table shows the components of lease cost included in the Consolidated Statement of Operations:


Year Ended December 31,	2024		2023		2022
(Dollars in millions)
Operating lease cost	$	198	$	191	$	188



Variable lease cost	13		12		11

Total	$	211	$	203	$	199

The following table shows supplemental cash flow information related to lease activities:


Year Ended December 31,	2024		2023		2022
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	207	$	194	$	185


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	175	$	158	$	113

The table below shows a weighted-average analysis for lease terms and discount rates for operating leases:


December 31,	2024		2023

Weighted Average Remaining Lease Term	13 years		13 years



Weighted Average Discount Rate	4.7	%	4.3	%

The maturities of lease liabilities are as follows:


	Operating Leases
(Dollars in millions)
2025	$	182
2026	155
2027	132
2028	111
2029	83
Thereafter	711
Total lease payments1	$	1,374
Less: Imputed interest	411
Present value of lease liabilities	$	963

1 Lease payments exclude $27 million of legally binding lease payments for leases signed but not yet commenced.

Lessor Agreements

UScellular's most significant lessor leases are for tower space, all of which are classified as operating leases. Many of UScellular's leases include renewal and early termination options. Lease terms include options to extend or terminate when it is reasonably certain that the lessee will exercise the option.

UScellular’s lessor agreements with lease and nonlease components are generally accounted for separately.

UScellular recognizes variable lease income related to lease payments that were not originally included in the lease receivable calculation, which primarily relate to lease payment escalations that are tied to an index.

The following table shows the components of lease income which are included in Service revenues in the Consolidated Statement of Operations:


Year Ended December 31,	2024		2023		2022
(Dollars in millions)
Operating lease income	$	103	$	101	$	93

The maturities of expected lease payments to be received are as follows:


	Operating Leases
(Dollars in millions)
2025	$	87
2026	78
2027	60
2028	46
2029	26
Thereafter	14
Total future lease maturities	$	311