Leases (Tables)

12 Months Ended

Dec. 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 as of January 1, 2019 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:

	Year Ended December 31, 2019
(Dollars in millions)
Operating lease cost	$	163
Financing lease cost:
Amortization of ROU assets	1
Variable lease cost	7
Total lease cost	$	171

Supplemental cash flow information related to leases

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

	Year Ended December 31, 2019
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	156
Operating cash flows from finance leases	1
ROU assets obtained in exchange for lease obligations:
Operating leases	$	125

Supplemental balance sheet information related to leases

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

	December 31, 2019
(Dollars in millions)
Finance Leases
Property, plant and equipment	$	7
Less: Accumulated depreciation and amortization	4
Property, plant and equipment, net	$	3
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 terms and discount rates for all leases:

	December 31, 2019
Weighted Average Remaining Lease Term
Operating leases	13 years
Finance leases	25 years
Weighted Average Discount Rate
Operating leases	4.4
Finance leases	7.0

Maturities of lease liabilities

The maturities of lease liabilities are as follows:

	Operating Leases		Finance Leases
(Dollars in millions)
2020	$	144	$	1
2021	145		—
2022	129		—
2023	112		1
2024	95		1
Thereafter	712		11
Total lease payments1	$	1,337	$	14
Less: Imputed interest	367		10
Present value of lease liabilities	$	970	$	4

¹ 

Lease payments exclude $27 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 revenues in the Consolidated Statement of Operations:

	Year Ended December 31, 2019
(Dollars in millions)
Operating lease income1	$	74

¹ 

During the third quarter of 2019, U.S. Cellular recorded an out-of-period adjustment attributable to 2009 through the second quarter of 2019 due to errors in the timing of recognition of revenue for certain tower leases. This out-of-period adjustment had the impact of increasing operating lease income by $5 million for the year ended December 31, 2019. U.S. Cellular determined that this adjustment was not material to any of the periods impacted.

Maturities of expected lease revenues

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

	Operating Leases
(Dollars in millions)
2020	$	60
2021	55
2022	42
2023	30
2024	15
Thereafter	3
Total future lease maturities	$	205

Lease commitments

Disclosures under ASC 840

As of December 31, 2018, future minimum rental payments required under operating leases and rental receipts expected under operating leases that had 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