Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of new accounting pronouncements and changes in accounting principles

The cumulative effect of the adoption of ASC 842 on U.S. Cellular’s Consolidated Balance Sheet is presented below.

	December 31, 2018		ASC 842 Adjustment			January 1, 2019
(Dollars in millions)
Prepaid expenses	$	63	$	(13	)	$	50
Operating lease right-of-use assets	—		899			899
Other assets and deferred charges	579		(12		)	567
Short-term operating lease liabilities	—		101			101
Other current liabilities	94		(8		)	86
Long-term operating lease liabilities	—		878			878
Other deferred liabilities and credits	389		(97		)	292

Components of lease expense

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

	Three Months Ended March 31, 2019
(Dollars in millions)
Operating lease cost	$	40
Variable lease cost	2
Total lease cost	$	42

Supplemental cash flow information related to leases

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

	Three Months Ended March 31, 2019
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	37
ROU assets obtained in exchange for lease obligations:
Operating leases	$	20

Supplemental balance sheet information related to leases

The following table shows the classification of U.S. Cellular’s operating and finance leases in its Consolidated Balance Sheet:

	March 31, 2019
(Dollars in millions)
Operating Leases
Operating lease right-of-use assets	$	888
Short-term operating lease liabilities	$	99
Long-term operating lease liabilities	858
Total operating lease liabilities	$	957
Finance Leases
Property, plant and equipment	$	7
Less: Accumulated depreciation and amortization	3
Property, plant and equipment, net	$	4
Current portion of long-term debt	$	1
Long-term debt, net	3
Total finance lease liabilities	$	4

Schedule of weighted average remaining lease term and weighted average discount rate related to leases

The table below shows a weighted-average analysis for lease term and discount rate for all leases:

	March 31, 2019
Weighted Average Remaining Lease Term
Operating leases	13 years
Finance leases	23 years
Weighted Average Discount Rate
Operating leases	4.5	%
Finance leases	7.0	%

Maturities of lease liabilities

The maturities of lease liabilities are as follows:

	Operating Leases		Finance Leases
(Dollars in millions)
Remainder of 2019	$	108	$	1
2020	146		1
2021	130		—
2022	113		—
2023	97		—
Thereafter	734		12
Total lease payments1	$	1,328	$	14
Less: Imputed interest	371		10
Present value of lease liabilities	$	957	$	4

¹  Lease payments exclude $6 million of legally binding lease payments for leases signed but not yet commenced.

Lease income

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

	Three Months Ended March 31, 2019
(Dollars in millions)
Operating lease income	$	16

Maturities of expected lease revenues

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

	Operating Leases
(Dollars in millions)
Remainder of 2019	$	39
2020	49
2021	37
2022	24
2023	12
Thereafter	3
Total future lease maturities	$	164

Lease commitments

As of December 31, 2018, future minimum rental payments required under operating leases and rental receipts expected under operating leases that have noncancellable lease terms in excess of one year were as follows:

	Operating Leases Future Minimum Rental Payments		Operating Leases Future Minimum Rental Receipts
(Dollars in millions)
2019	$	154	$	58
2020	143		47
2021	128		34
2022	112		22
2023	97		10
Thereafter	769		3
Total	$	1,403	$	174