UScellular reports fourth quarter and full year 2022 results
UScellular reported fourth-quarter 2022 total operating revenues of $1,048 million, a slight decline compared to $1,068 million in Q4 2021. The company experienced a net loss of $28 million or ($0.33 per share) compared to a profit of $27 million or $0.31 per share a year earlier. For the full year, total revenues were $4,169 million, up from $4,122 million in 2021, but net income dropped to $30 million from $155 million. UScellular aims for significant growth in 2023 with estimated service revenues of $3,050-$3,150 million and a focus on enhancing 5G capabilities. The company will hold a conference call on February 17, 2023.
- Fixed wireless connections increased by over 50% during 2022.
- Tower revenues grew by double-digit percentage points in 2022.
- Investment in multi-year network modernization and 5G programs remains on track.
- Q4 2022 revenues decreased by $20 million year-over-year.
- Net income for 2022 significantly declined to $30 million from $155 million in 2021.
- Reported net loss of $28 million in Q4 2022, reversing from a profit in Q4 2021.
Provides guidance for 2023
As previously announced, UScellular will hold a teleconference on
UScellular reported total operating revenues of
"At UScellular, our purpose is to keep customers connected to what matters most to them. As we celebrate our 40th anniversary, we will continue to execute on that mission.
"In 2022 we focused on expanding ARPU, improving customer results, and maintaining financial discipline," said
"We have also seen good momentum from investing in growth areas, as our fixed wireless connections increased by over
"In 2023, we will continue to focus on customer growth, cost optimization, and investing in 5G expansion."
2023 Estimated Results
UScellular's current estimates of full-year 2023 results are shown below. Such estimates represent management's view as of
2023 Estimated | Actual Results for the Year Ended | ||
(Dollars in millions) | |||
Service revenues | |||
Adjusted OIBDA1 | |||
Adjusted EBITDA1 | |||
Capital expenditures |
The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2023 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.
2023 Estimated | Actual Results for the Year Ended | ||
(Dollars in millions) | |||
Net income (GAAP) | N/A | ||
Add back: | |||
Income tax expense | N/A | 37 | |
Income before income taxes (GAAP) | |||
Add back: | |||
Interest expense | 205 | 163 | |
Depreciation, amortization and accretion expense | 645 | 700 | |
EBITDA (Non-GAAP)1 | |||
Add back or deduct: | |||
Loss on impairment of licenses | — | 3 | |
(Gain) loss on asset disposals, net | 15 | 19 | |
(Gain) loss on sale of business and other exit costs, net | — | (1) | |
Adjusted EBITDA (Non-GAAP)1 | |||
Deduct: | |||
Equity in earnings of unconsolidated entities | 145 | 158 | |
Interest and dividend income | 5 | 8 | |
Adjusted OIBDA (Non-GAAP)1 |
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 |
Stock Repurchase
During the fourth quarter of 2022, UScellular repurchased 578,607 of its Common Shares for
Conference Call Information
UScellular will hold a conference call on
- Access the live call on the Events & Presentations page of investors.uscellular.com or at
https://events.q4inc.com/attendee/661339725 - Access the call by phone at (888) 330-2384 (US/
Canada ), conference ID: 1328528
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
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 attract people of outstanding talent throughout all levels of the organization; UScellular's smaller scale relative to larger competitors; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; 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 with which UScellular does business; 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
For more information about UScellular, visit: www.uscellular.com
Summary Operating Data (Unaudited)
| |||||||||
As of or for the Quarter Ended | |||||||||
Retail Connections | |||||||||
Postpaid | |||||||||
Total at end of period | 4,247,000 | 4,264,000 | 4,296,000 | 4,335,000 | 4,380,000 | ||||
Gross additions | 154,000 | 151,000 | 128,000 | 126,000 | 165,000 | ||||
Feature phones | 6,000 | 5,000 | 4,000 | 2,000 | 3,000 | ||||
Smartphones | 99,000 | 102,000 | 90,000 | 89,000 | 122,000 | ||||
Connected devices | 49,000 | 44,000 | 34,000 | 35,000 | 40,000 | ||||
Net additions (losses) | (17,000) | (31,000) | (40,000) | (44,000) | (12,000) | ||||
Feature phones | (6,000) | (6,000) | (8,000) | (10,000) | (7,000) | ||||
Smartphones | (14,000) | (16,000) | (23,000) | (26,000) | 5,000 | ||||
Connected devices | 3,000 | (9,000) | (9,000) | (8,000) | (10,000) | ||||
ARPU1 | $ 50.60 | $ 50.21 | $ 50.07 | $ 49.71 | $ 48.62 | ||||
ARPA2 | $ 130.97 | $ 130.27 | $ 130.43 | $ 129.93 | $ 127.14 | ||||
Churn rate3 | 1.35 % | 1.42 % | 1.30 % | 1.30 % | 1.35 % | ||||
Handsets | 1.12 % | 1.15 % | 1.10 % | 1.10 % | 1.10 % | ||||
Connected devices | 2.99 % | 3.40 % | 2.73 % | 2.70 % | 3.08 % | ||||
Prepaid | |||||||||
Total at end of period | 493,000 | 493,000 | 490,000 | 495,000 | 513,000 | ||||
Gross additions | 61,000 | 62,000 | 56,000 | 55,000 | 63,000 | ||||
Net additions (losses) | — | 2,000 | (4,000) | (18,000) | (5,000) | ||||
ARPU1 | $ 33.34 | $ 35.04 | $ 35.25 | $ 34.59 | $ 34.53 | ||||
Churn rate3 | 4.11 % | 4.07 % | 4.07 % | 4.84 % | 4.39 % | ||||
Market penetration at end of period | |||||||||
Consolidated operating population | 32,370,000 | 32,370,000 | 32,370,000 | 32,370,000 | 32,127,000 | ||||
Consolidated operating penetration4 | 15 % | 15 % | 15 % | 15 % | 15 % | ||||
Capital expenditures (millions) | $ 176 | $ 136 | $ 268 | $ 137 | $ 321 | ||||
Total cell sites in service | 6,945 | 6,933 | 6,916 | 6,899 | 6,898 | ||||
Owned towers | 4,336 | 4,329 | 4,323 | 4,310 | 4,301 | ||||
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 | 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. |
Consolidated Statement of Operations Highlights | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Year Ended | ||||||||||
2022 | 2021 | 2022 vs. | 2022 | 2021 | 2022 vs. | ||||||
(Dollars and shares in millions, except per share amounts) | |||||||||||
Operating revenues | |||||||||||
Service | $ 774 | $ 782 | (1) % | $ 3,125 | $ 3,115 | — | |||||
Equipment sales | 274 | 286 | (4) % | 1,044 | 1,007 | 4 % | |||||
Total operating revenues | 1,048 | 1,068 | (2) % | 4,169 | 4,122 | 1 % | |||||
Operating expenses | |||||||||||
System operations (excluding Depreciation, amortization and accretion reported below) | 181 | 196 | (8) % | 755 | 790 | (4) % | |||||
Cost of equipment sold | 330 | 332 | (1) % | 1,216 | 1,118 | 9 % | |||||
Selling, general and administrative | 374 | 359 | 4 % | 1,408 | 1,345 | 5 % | |||||
Depreciation, amortization and accretion | 179 | 169 | 7 % | 700 | 678 | 3 % | |||||
Loss on impairment of licenses | — | — | — | 3 | — | N/M | |||||
(Gain) loss on asset disposals, net | 11 | 8 | 28 % | 19 | 23 | (18) % | |||||
(Gain) loss on sale of business and other exit costs, net | — | (1) | 78 % | (1) | (2) | 52 % | |||||
Total operating expenses | 1,075 | 1,063 | 1 % | 4,100 | 3,952 | 4 % | |||||
Operating income (loss) | (27) | 5 | N/M | 69 | 170 | (59) % | |||||
Investment and other income (expense) | |||||||||||
Equity in earnings of unconsolidated entities | 36 | 43 | (16) % | 158 | 179 | (12) % | |||||
Interest and dividend income | 3 | 1 | N/M | 8 | 6 | 35 % | |||||
Interest expense | (49) | (32) | (52) % | (163) | (175) | 7 % | |||||
Total investment and other income | (10) | 12 | N/M | 3 | 10 | (73) % | |||||
Income (loss) before income taxes | (37) | 17 | N/M | 72 | 180 | (60) % | |||||
Income tax expense (benefit) | (9) | (11) | 14 % | 37 | 20 | 79 % | |||||
Net income (loss) | (28) | 28 | N/M | 35 | 160 | (78) % | |||||
Less: Net income attributable to noncontrolling interests, net of tax | — | 1 | (51) % | 5 | 5 | (3) % | |||||
Net income (loss) attributable to UScellular shareholders | $ (28) | $ 27 | N/M | $ 30 | $ 155 | (81) % | |||||
Basic weighted average shares outstanding | 85 | 86 | (1) % | 85 | 86 | (1) % | |||||
Basic earnings (loss) per share attributable to UScellular shareholders | $ (0.33) | $ 0.31 | N/M | $ 0.35 | $ 1.80 | (80) % | |||||
Diluted weighted average shares outstanding | 85 | 87 | (2) % | 86 | 87 | (1) % | |||||
Diluted earnings (loss) per share attributable to UScellular shareholders | $ (0.33) | $ 0.31 | N/M | $ 0.35 | $ 1.77 | (80) % | |||||
N/M - Percentage change not meaningful |
Consolidated Statement of Cash Flows | |||
(Unaudited) | |||
Year Ended | 2022 | 2021 | |
(Dollars in millions) | |||
Cash flows from operating activities | |||
Net income | $ 35 | $ 160 | |
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | |||
Depreciation, amortization and accretion | 700 | 678 | |
Bad debts expense | 132 | 56 | |
Stock-based compensation expense | 24 | 27 | |
Deferred income taxes, net | 33 | 41 | |
Equity in earnings of unconsolidated entities | (158) | (179) | |
Distributions from unconsolidated entities | 145 | 176 | |
Loss on impairment of licenses | 3 | — | |
(Gain) loss on asset disposals, net | 19 | 23 | |
(Gain) loss on sale of business and other exit costs, net | (1) | (2) | |
Other operating activities | 9 | 33 | |
Changes in assets and liabilities from operations | |||
Accounts receivable | (59) | (27) | |
Equipment installment plans receivable | (199) | (116) | |
Inventory | (88) | (27) | |
Accounts payable | 12 | (57) | |
Customer deposits and deferred revenues | 47 | 40 | |
Accrued taxes | 121 | (41) | |
Other assets and liabilities | 57 | 17 | |
Net cash provided by operating activities | 832 | 802 | |
Cash flows from investing activities | |||
Cash paid for additions to property, plant and equipment | (602) | (724) | |
Cash paid for licenses | (585) | (1,302) | |
Cash received from divestitures and exchanges | 8 | 3 | |
Advance payments for license acquisitions | — | (20) | |
Other investing activities | — | 7 | |
Net cash used in investing activities | (1,179) | (2,036) | |
Cash flows from financing activities | |||
Issuance of long-term debt | 800 | 1,342 | |
Repayment of long-term debt | (329) | (1,118) | |
Issuance of short-term debt | 110 | — | |
Repayment of short-term debt | (50) | — | |
Common Shares reissued for benefit plans, net of tax payments | (5) | (16) | |
Repurchase of Common Shares | (43) | (31) | |
Payment of debt issuance costs | (1) | (22) | |
Distributions to noncontrolling interests | (3) | (3) | |
Cash paid for software license agreements | (22) | (9) | |
Other financing activities | (1) | (1) | |
Net cash provided by financing activities | 456 | 142 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 109 | (1,092) | |
Cash, cash equivalents and restricted cash | |||
Beginning of period | 199 | 1,291 | |
End of period | $ 308 | $ 199 | |
United States Cellular Corporation | |||
Consolidated Balance Sheet Highlights | |||
(Unaudited) | |||
ASSETS | |||
2022 | 2021 | ||
(Dollars in millions) | |||
Current assets | |||
Cash and cash equivalents | $ 273 | $ 156 | |
Accounts receivable, net | 1,072 | 1,046 | |
Inventory, net | 261 | 173 | |
Prepaid expenses | 68 | 58 | |
Income taxes receivable | 4 | 123 | |
Other current assets | 45 | 49 | |
Total current assets | 1,723 | 1,605 | |
Assets held for sale | 26 | 18 | |
Licenses | 4,690 | 4,088 | |
Investments in unconsolidated entities | 452 | 439 | |
Property, plant and equipment, net | 2,624 | 2,606 | |
Operating lease right-of-use assets | 918 | 959 | |
Other assets and deferred charges | 686 | 626 | |
Total assets | $ 11,119 | $ 10,341 | |
Consolidated Balance Sheet Highlights | |||
(Unaudited) | |||
LIABILITIES AND EQUITY | |||
2022 | 2021 | ||
(Dollars in millions, except per share amounts) | |||
Current liabilities | |||
Current portion of long-term debt | $ 13 | $ 3 | |
Accounts payable | 356 | 360 | |
Customer deposits and deferred revenues | 239 | 191 | |
Accrued taxes | 35 | 33 | |
Accrued compensation | 84 | 83 | |
Short-term operating lease liabilities | 133 | 129 | |
Other current liabilities | 335 | 104 | |
Total current liabilities | 1,195 | 903 | |
Deferred liabilities and credits | |||
Deferred income tax liability, net | 708 | 674 | |
Long-term operating lease liabilities | 843 | 889 | |
Other deferred liabilities and credits | 604 | 573 | |
Long-term debt, net | 3,187 | 2,728 | |
Noncontrolling interests with redemption features | 12 | 11 | |
Equity | |||
UScellular shareholders' equity | |||
Series A Common and Common Shares, par value | 88 | 88 | |
Additional paid-in capital | 1,703 | 1,678 | |
(98) | (68) | ||
Retained earnings | 2,861 | 2,849 | |
Total UScellular shareholders' equity | 4,554 | 4,547 | |
Noncontrolling interests | 16 | 16 | |
Total equity | 4,570 | 4,563 | |
Total liabilities and equity | $ 11,119 | $ 10,341 | |
Financial Measures and Reconciliations (Unaudited) | |||||||
Free Cash Flow | |||||||
Three Months Ended | Year Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
(Dollars in millions) | |||||||
Cash flows from operating activities (GAAP) | $ 180 | $ 135 | $ 832 | $ 802 | |||
Cash paid for additions to property, plant and equipment | (192) | (268) | (602) | (724) | |||
Cash paid for software license agreements | (17) | (5) | (22) | (9) | |||
Free cash flow (Non-GAAP)1 | $ (29) | $ (138) | $ 208 | $ 69 | |||
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 and Cash paid for software license agreements. |
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FAQ
What were the 2022 fourth quarter results for UScellular (USM)?
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