10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                    to

Commission file number 001-09712

UNITED STATES CELLULAR CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	62-1147325
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

8410 West Bryn Mawr, Chicago, Illinois 60631

(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (773) 399-8900

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, $1 par value	USM	New York Stock Exchange
6.95% Senior Notes due 2060	UZA	New York Stock Exchange
7.25% Senior Notes due 2063	UZB	New York Stock Exchange
7.25% Senior Notes due 2064	UZC	New York Stock Exchange
6.25% Senior Notes due 2069	UZD	New York Stock Exchange
5.50% Senior Notes due 2070	UZE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.			Yes	☒	No	☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).			Yes	☒	No	☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer	☐	Accelerated filer				☒
Non-accelerated filer	☐	Smaller reporting company				☐
		Emerging growth company				☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.						☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).			Yes	☐	No	☒

The number of shares outstanding of each of the issuer's classes of common stock, as of March 31, 2021, is 53,051,700 Common Shares, $1 par value, and 33,005,900 Series A Common Shares, $1 par value.

United States Cellular Corporation
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2021
Index	Page No.
Management Discussion and Analysis of Financial Condition and Results of Operations	1
Executive Overview	1
Terms Used by UScellular	4
Operational Overview	5
Financial Overview	6
Liquidity and Capital Resources	9
Consolidated Cash Flow Analysis	12
Consolidated Balance Sheet Analysis	13
Supplemental Information Relating to Non-GAAP Financial Measures	14
Application of Critical Accounting Policies and Estimates	16
Regulatory Matters	16
Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement	17
Risk Factors	19
Quantitative and Qualitative Disclosures About Market Risk	19
Financial Statements (Unaudited)	20
Consolidated Statement of Operations	20
Consolidated Statement of Cash Flows	21
Consolidated Balance Sheet	22
Consolidated Statement of Changes in Equity	24
Notes to Consolidated Financial Statements	26
Controls and Procedures	34
Legal Proceedings	34
Unregistered Sales of Equity Securities and Use of Proceeds	35
Exhibits	36
Form 10-Q Cross Reference Index	37
Signatures	38

United States Cellular Corporation Management’s Discussion and Analysis of Financial Condition and Results of Operations 

Executive Overview

The following discussion and analysis compares United States Cellular Corporation’s (UScellular) financial results for the three months ended March 31, 2021, to the three months ended March 31, 2020. It should be read in conjunction with UScellular’s interim consolidated financial statements and notes included herein, and with the description of UScellular’s business, its audited consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) included in UScellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2020. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. 

This report contains statements that are not based on historical facts, including the words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions. These statements constitute and represent “forward looking statements” as this term is defined in the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward looking statements. See Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement for additional information.

UScellular uses certain “non-GAAP financial measures” and each such measure is identified in the MD&A. A discussion of the reason UScellular determines these metrics to be useful and reconciliations of these measures to their most directly comparable measures determined in accordance with accounting principles generally accepted in the United States of America (GAAP) are included in the Supplemental Information Relating to Non-GAAP Financial Measures section within the MD&A of this Form 10-Q Report.

1

General

UScellular owns, operates, and invests in wireless markets throughout the United States. UScellular is an 82%-owned subsidiary of Telephone and Data Systems, Inc. (TDS).

OPERATIONS

 

▪Serves customers with 5.0 million connections including 4.4 million postpaid, 0.5 million prepaid and 0.1 million reseller and other connections

▪Operates in 21 states

▪Employs approximately 5,200 associates

▪4,270 owned towers

▪6,802 cell sites in service

COVID-19 considerations

The global spread of coronavirus (COVID-19) did not have a material impact on UScellular's financial results for the three months ended March 31, 2021. The impact of COVID-19 on UScellular's future financial results is uncertain, but is not projected to have a material impact. There are many factors, including the severity and duration of the outbreak, as well as other direct and indirect impacts, that could negatively impact UScellular.

2

UScellular Mission and Strategy

UScellular’s mission is to provide exceptional wireless communication services which enhance consumers’ lives, increase the competitiveness of local businesses, and improve the efficiency of government operations in the markets UScellular serves.

UScellular's strategy is to attract and retain customers through a value proposition comprising a high-quality network, outstanding customer service, and competitive devices, plans and pricing - all provided with a community focus. Strategic efforts include:

▪UScellular offers economical and competitively priced service plans and devices to its customers and is focused on increasing revenues from sales of related products such as accessories and device protection plans and from new services such as home internet. In addition, UScellular is focused on expanding its solutions available to business and government customers.

▪UScellular continues to devote efforts to enhance its network capabilities, including by deploying 5G technology. 5G technology helps address customers’ growing demand for data services and creates opportunities for new services requiring high speed and reliability as well as low latency. UScellular's 5G deployment is initially focused on mobility services using its low band spectrum. UScellular has acquired high-band spectrum and is in the process of acquiring mid-band spectrum, which it will deploy in the future to further enable the delivery of 5G services. UScellular has launched commercial 5G services in portions of substantially all of UScellular’s markets and will continue to launch in additional areas in the coming years. In addition to the deployment of 5G technology, UScellular is also modernizing its 4G LTE network to further enhance 4G LTE speeds.

▪UScellular assesses its existing wireless interests on an ongoing basis with a goal of improving the competitiveness of its operations and maximizing its long-term return on capital. As part of this strategy, UScellular actively seeks attractive opportunities to acquire wireless spectrum, including pursuant to FCC auctions.

3

Terms Used by UScellular

The following is a list of definitions of certain industry terms that are used throughout this document:

▪4G LTE – fourth generation Long-Term Evolution, which is a wireless technology that enables more network capacity for more data per user as well as faster access to data compared to third generation (3G) technology.

▪5G – fifth generation wireless technology that helps address customers’ growing demand for data services and creates opportunities for new services requiring high speed and reliability as well as low latency.

▪Account – represents an individual or business financially responsible for one or multiple associated connections. An account may include a variety of types of connections such as handsets and connected devices.

▪Auctions 105 and 107 – Auction 105 was an FCC auction of 3.5 GHz wireless spectrum licenses that started in July 2020 and concluded in September 2020. Auction 107 was an FCC auction of 3.7-3.98 GHz wireless spectrum licenses that started in December 2020 and concluded in February 2021.

▪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.

▪Connections – individual lines of service associated with each device activated by a customer. Connections are associated with all types of devices that connect directly to the UScellular network.

▪Connected Devices – non-handset devices that connect directly to the UScellular network. Connected devices include products such as tablets, wearables, modems, and hotspots.

▪Coronavirus Aid, Relief, and Economic Security (CARES) Act – economic relief package signed into law on March 27, 2020 to address the public health and economic impacts of COVID-19, including a variety of tax provisions.

▪EBITDA – refers to earnings before interest, taxes, depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted EBITDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.

▪FCC Keep Americans Connected Pledge – voluntary FCC initiative, through June 30, 2020, in response to the COVID-19 pandemic to ensure that Americans do not lose their broadband or telephone connectivity as a result of the exceptional circumstance.

▪Free Cash Flow – non-GAAP metric defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.

▪Gross Additions – represents the total number of new connections added during the period, without regard to connections that were terminated during that period.

▪Net Additions (Losses) – represents the total number of new connections added during the period, net of connections that were terminated during that period.

▪OIBDA – refers to operating income before depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted OIBDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.

▪Postpaid Average Revenue per Account (Postpaid ARPA) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.

▪Postpaid Average Revenue per User (Postpaid ARPU) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid connections and by the number of months in the period.

▪Retail Connections – the sum of postpaid connections and prepaid connections.

▪Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the FCC intended to promote universal access to telecommunications services in the United States.

▪VoLTE – Voice over Long-Term Evolution is a technology specification that defines the standards and procedures for delivering voice communications and related services over 4G LTE networks.

4

Operational Overview

As of March 31,		2021	2020
Retail Connections – End of Period
	Postpaid	4,406,000	4,359,000
	Prepaid	496,000	494,000
	Total	4,902,000	4,853,000

	Q1 2021		Q1 2020		Q1 2021 vs. Q1 2020
Postpaid Activity and Churn
Gross Additions
Handsets	104,000		90,000		16	%
Connected Devices	39,000		42,000		(7)	%
Total Gross Additions	143,000		132,000		8	%
Net Additions (Losses)
Handsets	(3,000)		(20,000)		85	%
Connected Devices	(3,000)		(6,000)		50	%
Total Net Additions (Losses)	(6,000)		(26,000)		77	%
Churn
Handsets	0.92	%	0.95	%
Connected Devices	2.53	%	3.11	%
Total Churn	1.12	%	1.21	%

Total postpaid handset net losses decreased for the three months ended March 31, 2021, when compared to the same period last year due primarily to (i) higher gross additions as a result of improved promotional offering effectiveness and higher consumer switching activity and (ii) lower handset defections as a result of a reduction in non-pay defections.

Total postpaid connected device net losses decreased for the three months ended March 31, 2021, when compared to the same period last year due to a decrease in tablet defections, partially offset by a decrease in gross additions due to lower demand for internet related products as compared to the three months ended March 31, 2020.

Postpaid Revenue

	Three Months Ended March 31,
	2021		2020		2021 vs. 2020
Average Revenue Per User (ARPU)	$	47.65	$	47.23	1 %
Average Revenue Per Account (ARPA)	$	125.25	$	122.92	2 %

Postpaid ARPU and Postpaid ARPA increased for the three months ended March 31, 2021, when compared to the same period last year, due primarily to (i) an increase in regulatory recovery revenues, (ii) favorable plan and product offering mix, and (iii) an increase in device protection plan revenues. These increases were partially offset by an increase in promotional expense.

5

Financial Overview

	Three Months Ended March 31,
	2021		2020		2021 vs. 2020
(Dollars in millions)
Retail service	$	685	$	671	2	%
Inbound roaming	28		37		(23)	%
Other	58		54		6	%
Service revenues	771		762		1	%
Equipment sales	252		201		26	%
Total operating revenues	1,023		963		6	%
System operations (excluding Depreciation, amortization and accretion reported below)	185		180		3	%
Cost of equipment sold	275		217		26	%
Selling, general and administrative	305		335		(9)	%
Depreciation, amortization and accretion	170		177		(4)	%
(Gain) loss on asset disposals, net	5		4		39	%
(Gain) loss on sale of business and other exit costs, net	(1)		—		N/M
Total operating expenses	939		913		3	%
Operating income	$	84	$	50	67	%
Net income	$	62	$	72	(14)	%
Adjusted OIBDA (Non-GAAP)1	$	258	$	231	12	%
Adjusted EBITDA (Non-GAAP)1	$	302	$	281	8	%
Capital expenditures2	$	125	$	236	(47)	%

N/M - Percentage change not meaningful

1Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.

2Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.

6

Operating Revenues

(Dollars in millions)

Service revenues consist of:

▪Retail Service - Charges for voice, data and value-added services and recovery of regulatory costs

▪Inbound Roaming - Charges to other wireless carriers whose customers use UScellular’s wireless systems when roaming

▪Other Service - Amounts received from the Federal USF, tower rental revenues, and miscellaneous other service revenues

Equipment revenues consist of:

▪Sales of wireless devices and related accessories to new and existing customers, agents, and third-party distributors

Key components of changes in the statement of operations line items were as follows:

Total operating revenues

Retail service revenues increased for the three months ended March 31, 2021, primarily as a result of an increase in Postpaid ARPU as previously discussed in the Operational Overview section as well as an increase in the average number of postpaid subscribers.

Inbound roaming revenues decreased for the three months ended March 31, 2021, primarily driven by lower data revenues resulting from lower usage. UScellular expects inbound roaming revenues to continue to decline during 2021 relative to prior year levels.

Other service revenues increased for the three months ended March 31, 2021, resulting from increases in tower rental revenues and miscellaneous other service revenues.

Equipment sales revenues increased for the three months ended March 31, 2021, due primarily to an increase in smartphone sales as well as an increase in the average revenue per device for smartphones due to an increase in sales of higher priced smartphones.

System operations expenses

System operations expenses increased for the three months ended March 31, 2021, due to higher circuit costs as well as an increase in roaming expense as a result of higher data roaming usage, partially offset by lower data rates.

Cost of equipment sold

Cost of equipment sold increased for the three months ended March 31, 2021, due primarily to an increase in smartphone sales as well as an increase in the average cost per device for smartphones due to an increase in sales of higher priced smartphones.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased for the three months ended March 31, 2021, due primarily to decreases in (i) bad debts expense driven by fewer non-pay customers as a result of better credit mix and improved customer payment behavior, as well as a discrete charge that was recorded in March 2020 related to UScellular's participation in the FCC Keep Americans Connected Pledge and (ii) advertising expenses.

Depreciation, amortization and accretion

Depreciation, amortization, and accretion decreased for the three months ended March 31, 2021, due to certain billing system assets reaching their end of life in 2020, partially offset by an increase in depreciation expense due to increased capital expenditures throughout 2020.

7

Components of Other Income (Expense)

	Three Months Ended March 31,
	2021		2020		2021 vs. 2020
(Dollars in millions)
Operating income	$	84	$	50	67	%
Equity in earnings of unconsolidated entities	42		45		(7)	%
Interest and dividend income	2		4		(52)	%
Interest expense	(39)		(24)		(66)	%
Other, net	—		1		N/M
Total investment and other income	5		26		(82)	%
Income before income taxes	89		76		17	%
Income tax expense	27		4		N/M
Net income	62		72		(14)	%
Less: Net income attributable to noncontrolling interests, net of tax	2		1		32	%
Net income attributable to UScellular shareholders	$	60	$	71	(15)	%

N/M - Percentage change not meaningful

Equity in earnings of unconsolidated entities

Equity in earnings of unconsolidated entities represents UScellular’s share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method. UScellular’s investment in the Los Angeles SMSA Limited Partnership (LA Partnership) contributed pretax income of $19 million and $22 million for the three months ended March 31, 2021 and 2020, respectively. See Note 8 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.

Interest and dividend income

Interest and dividend income decreased for the three months ended March 31, 2021, driven primarily by lower interest rates.

Interest expense

Interest expense increased for the three months ended March 31, 2021, primarily as a result of the issuance of $500 million of 6.25% Senior Notes in August 2020 and $500 million of 5.50% Senior Notes in December 2020.

Income tax expense

The effective tax rate on Income before income taxes for the three months ended March 31, 2021 and 2020, was 30.4% and 5.0%, respectively. The higher effective tax rate in 2021 as compared to 2020 is due primarily to the income tax benefits of the CARES Act included in the 2020 tax rate, which do not recur as benefits in the 2021 tax rate.

The CARES Act provided retroactive eligibility of bonus depreciation on qualified improvement property put into service after December 31, 2017 and a 5-year carryback of net operating losses generated in years 2018-2020. As the statutory federal tax rate applicable to certain years within the carryback period is 35%, carryback to those years provided a tax benefit in excess of the current federal statutory rate of 21%, resulting in a reduction of income tax expense in 2020 and an expected cash refund of taxes paid in prior years.

8

Liquidity and Capital Resources

Sources of Liquidity

UScellular operates a capital-intensive business. In the past, UScellular’s existing cash and investment balances, funds available under its revolving credit and receivables securitization agreements, funds from other financing sources, including a term loan and other long-term debt, and cash flows from operating and certain investing and financing activities, including sales of assets or businesses, provided sufficient liquidity and financial flexibility for UScellular to meet its normal day-to-day operating needs and debt service requirements, to finance the build-out and enhancement of markets and to fund acquisitions, primarily of wireless spectrum licenses. There is no assurance that this will be the case in the future. See Market Risk for additional information regarding maturities of long-term debt.

UScellular has incurred negative free cash flow at times in the past and this could occur in the future. However, UScellular believes that existing cash and investment balances, funds available under its revolving credit agreement, expected future tax refunds and expected cash flows from operating and investing activities will provide sufficient liquidity for UScellular to meet its normal day-to-day operating needs and debt service requirements for the coming years. UScellular will continue to monitor the rapidly changing business and market conditions and plans to take appropriate actions, as necessary, to meet its liquidity needs.

UScellular may require substantial additional capital for, among other uses, funding day-to-day operating needs including working capital, acquisitions of providers of wireless telecommunications services, wireless spectrum license acquisitions, capital expenditures, agreements to purchase goods or services, leases, debt service requirements, the repurchase of shares, or making additional investments. It may be necessary from time to time to increase the size of the existing revolving credit agreement, to put in place new credit agreements, or to obtain other forms of financing in order to fund potential expenditures.

Cash and Cash Equivalents

Cash and cash equivalents include cash and money market investments.

Cash and Cash Equivalents

(Dollars in millions)

The majority of UScellular’s Cash and cash equivalents are held in bank deposit accounts and in money market funds that purchase only debt issued by the U.S. Treasury or U.S. government agencies.

Financing

Revolving Credit Agreement

In March 2020, UScellular entered into a $300 million unsecured revolving credit agreement with certain lenders and other parties. Amounts under the revolving credit agreement may be borrowed, repaid and reborrowed from time to time until maturity in March 2025. As of March 31, 2021, there were no outstanding borrowings under the revolving credit agreement, except for letters of credit, and UScellular's unused borrowing capacity was $298 million.

Term Loan Agreement

In February 2021, UScellular borrowed $217 million under its senior term loan credit agreement. As of March 31, 2021, UScellular has borrowed the full amount available under the senior term loan credit agreement of $300 million. See Note 9 — Debt in the Notes to Consolidated Financial Statements for additional information related to the senior term loan agreement.

9

Receivables Securitization Agreement

UScellular, through its subsidiaries, has a receivables securitization agreement to permit securitized borrowings using its equipment installment plan receivables. In March 2021, UScellular borrowed $275 million under its receivables securitization agreement. As of March 31, 2021, UScellular has borrowed the full amount available under the receivables securitization agreement of $300 million. Amounts under the receivables securitization agreement may be repaid and reborrowed from time to time until December 2022, which may be extended from time to time as specified therein. See Note 9 — Debt in the Notes to Consolidated Financial Statements for additional information related to the receivables securitization agreement.

Financial Covenants

UScellular believes that it was in compliance with all of the financial covenants and requirements set forth in its revolving credit agreement, senior term loan credit agreement and receivables securitization agreement as of March 31, 2021.

Other Long-Term Financing

In 2020, UScellular issued $500 million of 6.25% Senior Notes due in 2069 and $500 million of 5.5% Senior Notes due in 2070. The proceeds from both issuances will be used for general corporate purposes, including but not limited to, the purchase of additional wireless spectrum licenses acquired in Auction 107, funding of capital expenditures and retirement of existing debt.

In April 2021, UScellular announced that it will redeem its outstanding $275 million of 7.25% Senior Notes due 2063. At time of redemption, $9 million of interest expense will be recorded related to unamortized debt issuance costs for these notes. The notes are expected to be redeemed on May 12, 2021, at a redemption price of 100% of the principal amount, including accrued and unpaid interest to the redemption date.

UScellular has an effective shelf registration statement on Form S-3 to issue senior or subordinated debt securities.

Capital Expenditures

Capital expenditures (i.e., additions to property, plant and equipment and system development expenditures; excludes wireless spectrum license additions), which include the effects of accruals and capitalized interest, for the three months ended March 31, 2021 and 2020, were as follows:

Capital Expenditures

(Dollars in millions)

Capital expenditures for the full year 2021 are expected to be between $775 million and $875 million. These expenditures are expected to be used principally for the following purposes:

▪Continue network modernization and 5G deployment;

▪Enhance and maintain UScellular's network coverage, including providing additional speed and capacity to accommodate increased data usage by current customers; and

▪Invest in information technology to support existing and new services and products.

UScellular intends to finance its capital expenditures for 2021 using primarily Cash flows from operating activities, existing cash balances and, if required, additional debt financing from its revolving credit agreement and/or other forms of financing.

Acquisitions, Divestitures and Exchanges

UScellular may be engaged from time to time in negotiations (subject to all applicable regulations) relating to the acquisition, divestiture or exchange of companies, properties or wireless spectrum licenses (including pursuant to FCC auctions). In general, UScellular may not disclose such transactions until there is a definitive agreement.

10

Other Obligations

UScellular will require capital for future spending on existing contractual obligations, including long-term debt obligations; lease commitments; commitments for device purchases, network facilities and transport services; agreements for software licensing; long-term marketing programs; Auction 107 relocation costs and accelerated relocation incentive payments; and other agreements to purchase goods or services.

Variable Interest Entities

UScellular consolidates certain “variable interest entities” as defined under GAAP. See Note 10 — Variable Interest Entities in the Notes to Consolidated Financial Statements for additional information related to these variable interest entities. UScellular may elect to make additional capital contributions and/or advances to these variable interest entities in future periods in order to fund their operations.

Common Share Repurchase Program

During the three months ended March 31, 2021, UScellular repurchased 54,900 Common Shares for $2 million at an average cost per share of $29.52. As of March 31, 2021, the total cumulative amount of UScellular Common Shares authorized to be repurchased is 4,452,000. For additional information related to the current repurchase authorization, see Unregistered Sales of Equity Securities and Use of Proceeds.

Off-Balance Sheet Arrangements

UScellular had no transactions, agreements or other contractual arrangements with unconsolidated entities involving “off-balance sheet arrangements,” as defined by SEC rules, that had or are reasonably likely to have a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources.

11

Consolidated Cash Flow Analysis

UScellular operates a capital-intensive business. UScellular makes substantial investments to acquire wireless spectrum licenses and properties and to construct and upgrade wireless telecommunications networks and facilities as a basis for creating long-term value for shareholders. In recent years, rapid changes in technology and new opportunities have required substantial investments in potentially revenue‑enhancing and cost-saving upgrades to UScellular’s networks. Cash flows may fluctuate from quarter to quarter and year to year due to seasonality, the timing of acquisitions and divestitures, capital expenditures and other factors. The following discussion summarizes UScellular's cash flow activities for the three months ended March 31, 2021 and 2020.

2021 Commentary

UScellular’s Cash, cash equivalents and restricted cash decreased $779 million. Net cash provided by operating activities was $124 million due to net income of $62 million adjusted for non-cash items of $167 million and distributions received from unconsolidated entities of $22 million. This was partially offset by changes in working capital items which decreased net cash by $127 million. The working capital changes were primarily influenced by the timing of vendor payments and annual associate bonus payments.

Cash flows used for investing activities were $1,388 million. Cash paid for additions to property, plant and equipment totaled $133 million. Cash payments for wireless spectrum license acquisitions were $1,253 million.

Cash flows provided by financing activities were $485 million, due primarily to $275 million borrowed under the receivables securitization agreement and $217 million borrowed under the term loan.

2020 Commentary

UScellular’s Cash, cash equivalents and restricted cash decreased $24 million. Net cash provided by operating activities was $342 million due to net income of $72 million adjusted for non-cash items of $228 million, distributions received from unconsolidated entities of $24 million, and changes in working capital items which increased net cash by $18 million. The working capital changes were primarily influenced by timing of vendor payments and collections of customer and agent receivables, partially offset by annual associate bonus payments, an increase in inventory and tax impacts from the CARES Act.

Cash flows used for investing activities were $342 million. Cash paid for additions to property, plant and equipment totaled $315 million. Cash payments for wireless spectrum license acquisitions were $26 million.

Cash flows used for financing activities were $24 million, due primarily to the repurchase of $21 million of Common Shares.

12

Consolidated Balance Sheet Analysis

The following discussion addresses certain captions in the consolidated balance sheet and changes therein. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes. Notable balance sheet changes during 2021 were as follows:

Licenses

Licenses increased $1,286 million due primarily to wireless spectrum license rights acquired through Auction 107. See Note 7 — Intangible Assets in the Notes to Consolidated Financial Statements for additional information.

Accounts payable - Trade

Accounts payable - Trade decreased $101 million due primarily to vendor payment timing differences.

Accrued compensation

Accrued compensation decreased $42 million due primarily to associate bonus payments in March 2021.

Long-term debt, net

Long-term debt, net increased $492 million due primarily to $275 million borrowed under the receivables securitization agreement and $217 million borrowed under the term loan.

13

Supplemental Information Relating to Non-GAAP Financial Measures

UScellular sometimes uses information derived from consolidated financial information but not presented in its financial statements prepared in accordance with GAAP to evaluate the performance of its business. Specifically, UScellular has referred to the following measures in this Form 10-Q Report:

▪EBITDA

▪Adjusted EBITDA

▪Adjusted OIBDA

▪Free cash flow

Certain of these measures are considered “non-GAAP financial measures” under U.S. Securities and Exchange Commission Rules. Following are explanations of each of these measures.

EBITDA, Adjusted EBITDA and Adjusted OIBDA

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation below. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under GAAP and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. UScellular does not intend to imply that any such items set forth in the reconciliation below are non-recurring, infrequent or unusual; such items may occur in the future.

Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income and Operating income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of UScellular’s operating results before significant recurring non-cash charges, gains and losses, and other items as presented below as they provide 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. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Operating income.

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Net income (GAAP)	$	62	$	72
Add back:
Income tax expense	27		4
Interest expense	39		24
Depreciation, amortization and accretion	170		177
EBITDA (Non-GAAP)	298		277
Add back or deduct:
(Gain) loss on asset disposals, net	5		4
(Gain) loss on sale of business and other exit costs, net	(1)		—
Adjusted EBITDA (Non-GAAP)	302		281
Deduct:
Equity in earnings of unconsolidated entities	42		45
Interest and dividend income	2		4
Other, net	—		1
Adjusted OIBDA (Non-GAAP)	258		231
Deduct:
Depreciation, amortization and accretion	170		177
(Gain) loss on asset disposals, net	5		4
(Gain) loss on sale of business and other exit costs, net	(1)		—
Operating income (GAAP)	$	84	$	50

14

Free Cash Flow

The following table presents Free cash flow, which is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment. 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. 

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Cash flows from operating activities (GAAP)	$	124	$	342
Less: Cash paid for additions to property, plant and equipment	133		315
Free cash flow (Non-GAAP)	$	(9)	$	27

15

Application of Critical Accounting Policies and Estimates

UScellular prepares its consolidated financial statements in accordance with GAAP. UScellular’s significant accounting policies are discussed in detail in Note 1 — Summary of Significant Accounting Policies and Recent Accounting Pronouncements, Note 2 — Revenue Recognition and Note 10 — Leases in the Notes to Consolidated Financial Statements and UScellular’s Application of Critical Accounting Policies and Estimates is discussed in detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are included in UScellular’s Form 10-K for the year ended December 31, 2020. 

Regulatory Matters

5G Fund

On October 27, 2020, the FCC adopted rules creating the 5G Fund for Rural America, which will distribute up to $9 billion over ten years to bring 5G wireless broadband connectivity to rural America. The 5G Fund will be implemented through a two-phase competitive process, using multi-round auctions to award support. The winning bidders will be required to meet certain minimum speed requirements and interim and final deployment milestones. The order provides that the 5G Fund be in lieu of the previously proposed fund (the Phase II Connect America Mobility Fund) for the development of 4G LTE. The order also provides that over time a growing percentage of the legacy support a carrier receives must be used for 5G deployment.

UScellular cannot predict at this time when the 5G fund auction will occur, when the phase down period for its existing legacy support from the Federal USF will commence, or whether the 5G fund auction will provide opportunities to UScellular to offset any loss in existing support.

FCC Rulemaking - Restoring Internet Freedom

In December 2017, the FCC approved rules reversing or revising decisions made in the FCC’s 2015 Open Internet and Title II Order (Restoring Internet Freedom). The 2017 action reversed the FCC’s 2015 decision to reclassify Broadband Internet Access Services as telecommunications services subject to regulation under Title II of the Telecommunications Act. The 2017 action also reversed the FCC’s 2015 restrictions on blocking, throttling and paid prioritization, and modified transparency rules relating to such practices. Several parties filed suit in federal court challenging the 2017 actions. On October 1, 2019, the Court of Appeals for the D.C. Circuit issued an order reaffirming the FCC in most respects, but limiting the FCC's ability to preempt state and local net neutrality laws. On February 19, 2020, the FCC issued a Public Notice seeking comment on three issues under further consideration by the FCC based on a recent D.C. Circuit decision. On October 27, 2020, the FCC adopted an Order on Remand in response to the U.S. Court of Appeals for the D.C. Circuit’s remand on the three issues under further consideration by the FCC and found no basis to alter the FCC’s conclusions in the Restoring Internet Freedom Order.

A number of states, including certain states in which UScellular operates, have adopted or considered laws intended to reinstate aspects of the foregoing net neutrality regulations that were reversed or revised by the FCC in 2017. To the extent such laws are enacted, it is expected that legal proceedings will be pursued challenging such laws, subject now to the DC Circuit ruling limiting the FCC's preemptive authority in this matter. The new administration may also conduct rulemaking proceedings that may reinstate, in some form, net neutrality rules. UScellular cannot predict the outcome of any of these proceedings or the impact on its business.

Spectrum Auctions

On March 2, 2020, the FCC released a Public Notice establishing procedures for an auction offering wireless spectrum licenses in the 3.5 GHz band (Auction 105). On September 2, 2020, the FCC announced by public notice that UScellular was the provisional winning bidder for 243 wireless spectrum licenses for a purchase price of $14 million. The wireless spectrum licenses are expected to be granted by the FCC in 2021.

On August 7, 2020, the FCC released a Public Notice establishing procedures for an auction offering wireless spectrum licenses in the 3.7-3.98 GHz bands (Auction 107). On February 24, 2021, the FCC announced by public notice that UScellular was the provisional winning bidder for 254 wireless spectrum licenses for $1,283 million. UScellular paid $30 million of this amount in 2020 and the remainder in March 2021. Additionally, UScellular expects to capitalize costs of approximately $178 million related to the estimated relocation costs and accelerated relocation incentive payments. The wireless spectrum licenses from Auction 107 are expected to be granted by the FCC in 2021. The spectrum must be cleared by incumbent providers before UScellular can access it. UScellular does not expect to have access to this spectrum until late 2023. Combined with prior mid-band purchases in Auction 105, UScellular will have mid-band spectrum in nearly all of its operating footprint, covering approximately 95% of subscribers.

16

Private Securities Litigation Reform Act of 1995

Safe Harbor Cautionary Statement

This Form 10-Q, including exhibits, contains statements that are not based on historical facts and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, that address activities, events or developments that UScellular intends, expects, projects, believes, estimates, plans or anticipates will or may occur in the future are forward-looking statements. The words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying them. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, those set forth below, as more fully described under “Risk Factors” in UScellular’s Form 10-K for the year ended December 31, 2020 and in this Form 10-Q. Each of the following risks could have a material adverse effect on UScellular’s business, financial condition or results of operations. However, such factors are not necessarily all of the important factors that could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the forward-looking statements contained in this document. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. UScellular undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. You should carefully consider the Risk Factors in UScellular’s Form 10-K for the year ended December 31, 2020, the following factors and other information contained in, or incorporated by reference into, this Form 10-Q to understand the material risks relating to UScellular’s business, financial condition or results of operations.

Operational Risk Factors

▪Intense competition involving products, services, pricing and network speed and technologies could adversely affect UScellular’s revenues or increase its costs to compete.

▪Changes in roaming practices or other factors could cause UScellular's roaming revenues to decline from current levels, roaming expenses to increase from current levels and/or impact UScellular's ability to service its customers in geographic areas where UScellular does not have its own network, which could have an adverse effect on UScellular's business, financial condition or results of operations.

▪A failure by UScellular to obtain access to adequate radio spectrum to meet current or anticipated future needs and/or to accurately predict future needs for radio spectrum could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪An inability to attract people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on UScellular's business, financial condition or results of operations.

▪UScellular’s smaller scale relative to larger competitors that may have greater financial and other resources than UScellular could cause UScellular to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations.

▪Changes in various business factors, including changes in demand, consumer preferences and perceptions, price competition, churn from customer switching activity and other factors, could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪Advances or changes in technology could render certain technologies used by UScellular obsolete, could put UScellular at a competitive disadvantage, could reduce UScellular’s revenues or could increase its costs of doing business.

▪Complexities associated with deploying new technologies present substantial risk and UScellular investments in unproven technologies may not produce the benefits that UScellular expects.

▪Costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of UScellular’s business could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪A failure by UScellular to complete significant network construction and systems implementation activities as part of its plans to improve the quality, coverage, capabilities and capacity of its network, support and other systems and infrastructure could have an adverse effect on its operations.

▪Difficulties involving third parties with which UScellular does business, including changes in UScellular's relationships with or financial or operational difficulties of key suppliers or independent agents and third-party national retailers who market UScellular’s services, could adversely affect UScellular's business, financial condition or results of operations.

▪A failure by UScellular to maintain flexible and capable telecommunication networks or information technology, or a material disruption thereof, could have an adverse effect on UScellular’s business, financial condition or results of operations.

17

Financial Risk Factors

▪Uncertainty in UScellular’s future cash flow and liquidity or the inability to access capital, deterioration in the capital markets, other changes in UScellular’s performance or market conditions, changes in UScellular’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to UScellular, which could require UScellular to reduce its construction, development or acquisition programs, reduce the amount of wireless spectrum licenses acquired, and/or reduce or cease share repurchases.

▪UScellular has a significant amount of indebtedness which could adversely affect its financial performance and in turn adversely affect its ability to make payments on its indebtedness, comply with terms of debt covenants and incur additional debt.

▪UScellular’s assets and revenue are concentrated in the U.S. wireless telecommunications industry. Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry.

▪UScellular has significant investments in entities that it does not control. Losses in the value of such investments could have an adverse effect on UScellular’s financial condition or results of operations.

Regulatory, Legal and Governance Risk Factors

▪Failure by UScellular to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect UScellular’s business, financial condition or results of operations.

▪UScellular receives significant regulatory support, and is also subject to numerous surcharges and fees from federal, state and local governments – the applicability and the amount of the support and fees are subject to great uncertainty, including the ability to pass through certain fees to customers, and this uncertainty could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪Settlements, judgments, restraints on its current or future manner of doing business and/or legal costs resulting from pending and future litigation could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪The possible development of adverse precedent in litigation or conclusions in professional studies to the effect that radio frequency emissions from wireless devices and/or cell sites cause harmful health consequences, including cancer or tumors, or may interfere with various electronic medical devices such as pacemakers, could have an adverse effect on UScellular's business, financial condition or results of operations.

▪Claims of infringement of intellectual property and proprietary rights of others, primarily involving patent infringement claims, could prevent UScellular from using necessary technology to provide products or services or subject UScellular to expensive intellectual property litigation or monetary penalties, which could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪There are potential conflicts of interests between TDS and UScellular.

▪Certain matters, such as control by TDS and provisions in the UScellular Restated Certificate of Incorporation, may serve to discourage or make more difficult a change in control of UScellular or have other consequences.

General Risk Factors

▪UScellular has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, which could have an adverse effect on UScellular's business, financial condition or results of operations.

▪Disruption in credit or other financial markets, a deterioration of U.S. or global economic conditions or other events could, among other things, impede UScellular’s access to or increase the cost of financing its operating and investment activities and/or result in reduced revenues and lower operating income and cash flows, which would have an adverse effect on UScellular’s business, financial condition or results of operations.

▪The impact of public health emergencies, such as the COVID-19 pandemic, on UScellular's business is uncertain, but depending on duration and severity could have a material adverse effect on UScellular's business, financial condition or results of operations.

18

Risk Factors

In addition to the information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in UScellular’s Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect UScellular’s business, financial condition or future results. The risks described in this Form 10-Q and the Form 10-K for the year ended December 31, 2020, may not be the only risks that could affect UScellular. Additional unidentified or unrecognized risks and uncertainties could materially adversely affect UScellular’s business, financial condition and/or operating results. Subject to the foregoing, UScellular has not identified for disclosure any material changes to the risk factors as previously disclosed in UScellular’s Annual Report on Form 10-K for the year ended December 31, 2020.

Quantitative and Qualitative Disclosures about Market Risk

Market Risk

Refer to the disclosure under Market Risk in UScellular’s Form 10-K for the year ended December 31, 2020, for additional information, including information regarding required principal payments and the weighted average interest rates related to UScellular’s Long-term debt. The changes to such information since December 31, 2020 were as follows: in February 2021 UScellular borrowed $217 million under its senior term loan credit agreement and in March 2021 UScellular borrowed $275 million under its receivables securitization agreement. Such transactions changed the weighted average interest rate on long-term debt obligations to 5.6% at March 31, 2021 from 6.3% at December 31, 2020.

See Note 3 — Fair Value Measurements in the Notes to Consolidated Financial Statements for additional information related to the fair value of UScellular’s Long-term debt as of March 31, 2021.

19

Financial Statements

United States Cellular Corporation

Consolidated Statement of Operations

(Unaudited)

	Three Months Ended March 31,
	2021		2020
(Dollars and shares in millions, except per share amounts)
Operating revenues
Service	$	771	$	762
Equipment sales	252		201
Total operating revenues	1,023		963
Operating expenses
System operations (excluding Depreciation, amortization and accretion reported below)	185		180
Cost of equipment sold	275		217
Selling, general and administrative	305		335
Depreciation, amortization and accretion	170		177
(Gain) loss on asset disposals, net	5		4
(Gain) loss on sale of business and other exit costs, net	(1)		—
Total operating expenses	939		913
Operating income	84		50
Investment and other income (expense)
Equity in earnings of unconsolidated entities	42		45
Interest and dividend income	2		4
Interest expense	(39)		(24)
Other, net	—		1
Total investment and other income	5		26
Income before income taxes	89		76
Income tax expense	27		4
Net income	62		72
Less: Net income attributable to noncontrolling interests, net of tax	2		1
Net income attributable to UScellular shareholders	$	60	$	71
Basic weighted average shares outstanding	86		86
Basic earnings per share attributable to UScellular shareholders	$	0.70	$	0.82
Diluted weighted average shares outstanding	88		88
Diluted earnings per share attributable to UScellular shareholders	$	0.69	$	0.81

The accompanying notes are an integral part of these consolidated financial statements.

20

United States Cellular Corporation

Consolidated Statement of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Cash flows from operating activities
Net income	$	62	$	72
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities
Depreciation, amortization and accretion	170		177
Bad debts expense	7		33
Stock-based compensation expense	6		7
Deferred income taxes, net	23		52
Equity in earnings of unconsolidated entities	(42)		(45)
Distributions from unconsolidated entities	22		24
(Gain) loss on asset disposals, net	5		4
(Gain) loss on sale of business and other exit costs, net	(1)		—
Other operating activities	(1)		—
Changes in assets and liabilities from operations
Accounts receivable	4		55
Equipment installment plans receivable	(18)		23
Inventory	7		(50)
Accounts payable	(86)		97
Customer deposits and deferred revenues	7		(10)
Accrued taxes	3		(49)
Accrued interest	9		9
Other assets and liabilities	(53)		(57)
Net cash provided by operating activities	124		342
Cash flows from investing activities
Cash paid for additions to property, plant and equipment	(133)		(315)
Cash paid for licenses	(1,256)		(26)
Cash paid for investments	—		(1)
Cash received from divestitures and exchanges	1		—
Net cash used in investing activities	(1,388)		(342)
Cash flows from financing activities
Issuance of long-term debt	492		—
Repayment of long-term debt	—		(2)
Common Shares reissued for benefit plans, net of tax payments	(1)		—
Repurchase of Common Shares	(2)		(21)
Payment of debt issuance costs	(1)		(1)
Distributions to noncontrolling interests	(1)		(1)
Other financing activities	(2)		1
Net cash provided by (used in) financing activities	485		(24)
Net decrease in cash, cash equivalents and restricted cash	(779)		(24)
Cash, cash equivalents and restricted cash
Beginning of period	1,291		291
End of period	$	512	$	267

The accompanying notes are an integral part of these consolidated financial statements.

21

United States Cellular Corporation

Consolidated Balance Sheet — Assets

(Unaudited)

	March 31, 2021		December 31, 2020
(Dollars in millions)
Current assets
Cash and cash equivalents	$	479	$	1,271
Short-term investments	3		3
Accounts receivable
Customers and agents, less allowances of $56 and $62, respectively	900		915
Roaming	9		13
Other, less allowances of $2 and $1, respectively	85		70
Inventory, net	139		146
Prepaid expenses	63		51
Income taxes receivable	124		125
Other current assets	43		29
Total current assets	1,845		2,623
Assets held for sale	1		2
Licenses	3,915		2,629
Investments in unconsolidated entities	455		435
Property, plant and equipment
In service and under construction	8,823		8,785
Less: Accumulated depreciation and amortization	6,404		6,319
Property, plant and equipment, net	2,419		2,466
Operating lease right-of-use assets	933		924
Other assets and deferred charges	580		602
Total assets1	$	10,148	$	9,681

The accompanying notes are an integral part of these consolidated financial statements.

22

United States Cellular Corporation

Consolidated Balance Sheet — Liabilities and Equity

(Unaudited)

	March 31, 2021		December 31, 2020
(Dollars and shares in millions, except per share amounts)
Current liabilities
Current portion of long-term debt	$	2	$	2
Accounts payable
Affiliated	6		10
Trade	276		377
Customer deposits and deferred revenues	158		151
Accrued taxes	47		48
Accrued compensation	40		82
Short-term operating lease liabilities	120		116
Other current liabilities	90		85
Total current liabilities	739		871
Liabilities held for sale	—		1
Deferred liabilities and credits
Deferred income tax liability, net	656		633
Long-term operating lease liabilities	879		875
Other deferred liabilities and credits	393		376
Long-term debt, net	2,981		2,489
Commitments and contingencies
Noncontrolling interests with redemption features	10		10
Equity
UScellular shareholders’ equity
Series A Common and Common Shares
Authorized 190 shares (50 Series A Common and 140 Common Shares)
Issued 88 shares (33 Series A Common and 55 Common Shares)
Outstanding 86 shares (33 Series A Common and 53 Common Shares)
Par Value ($1.00 per share) ($33 Series A Common and $55 Common Shares)	88		88
Additional paid-in capital	1,657		1,651
Treasury shares, at cost, 2 Common Shares	(66)		(67)
Retained earnings	2,796		2,739
Total UScellular shareholders' equity	4,475		4,411
Noncontrolling interests	15		15
Total equity	4,490		4,426
Total liabilities and equity1	$	10,148	$	9,681

The accompanying notes are an integral part of these consolidated financial statements.

1     The consolidated total assets as of March 31, 2021 and December 31, 2020, include assets held by consolidated variable interest entities (VIEs) of $1,263 million and $1,060 million, respectively, which are not available to be used to settle the obligations of UScellular. The consolidated total liabilities as of March 31, 2021 and December 31, 2020, include certain liabilities of consolidated VIEs of $19 million and $20 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 10 — Variable Interest Entities for additional information.

23

United States Cellular Corporation

Consolidated Statement of Changes in Equity

(Unaudited)

	UScellular Shareholders
	Series A Common and Common shares		Additional paid-in capital		Treasury shares		Retained earnings		Total UScellular shareholders' equity		Noncontrolling interests		Total equity
(Dollars in millions)
December 31, 2020	$	88	$	1,651	$	(67)	$	2,739	$	4,411	$	15	$	4,426
Net income attributable to UScellular shareholders	—		—		—		60		60		—		60
Net income attributable to noncontrolling interests classified as equity	—		—		—		—		—		1		1
Repurchase of Common Shares	—		—		(2)		—		(2)		—		(2)
Incentive and compensation plans	—		6		3		(3)		6		—		6
Distributions to noncontrolling interests	—		—		—		—		—		(1)		(1)
March 31, 2021	$	88	$	1,657	$	(66)	$	2,796	$	4,475	$	15	$	4,490

The accompanying notes are an integral part of these consolidated financial statements.

24

United States Cellular Corporation

Consolidated Statement of Changes in Equity

(Unaudited)

	UScellular Shareholders
	Series A Common and Common shares		Additional paid-in capital		Treasury shares		Retained earnings		Total UScellular shareholders' equity		Noncontrolling interests		Total equity
(Dollars in millions)
December 31, 2019	$	88	$	1,629	$	(70)	$	2,550	$	4,197	$	13	$	4,210
Net income attributable to UScellular shareholders	—		—		—		71		71		—		71
Repurchase of Common Shares	—		—		(23)		—		(23)		—		(23)
Incentive and compensation plans	—		7		1		(1)		7		—		7
Distributions to noncontrolling interests	—		—		—		—		—		(1)		(1)
March 31, 2020	$	88	$	1,636	$	(92)	$	2,620	$	4,252	$	12	$	4,264

The accompanying notes are an integral part of these consolidated financial statements.

25

United States Cellular Corporation

Notes to Consolidated Financial Statements

Note 1 Basis of Presentation

United States Cellular Corporation (UScellular), a Delaware Corporation, is an 82%-owned subsidiary of Telephone and Data Systems, Inc. (TDS).

The accounting policies of UScellular conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of UScellular, subsidiaries in which it has a controlling financial interest, general partnerships in which UScellular has a majority partnership interest and certain entities in which UScellular has a variable interest that requires consolidation under GAAP. Intercompany accounts and transactions have been eliminated.

The unaudited consolidated financial statements included herein have been prepared by UScellular pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, UScellular believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in UScellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2020.

The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of UScellular’s financial position as of March 31, 2021 and December 31, 2020 and its results of operations, cash flows and changes in equity for the three months ended March 31, 2021 and 2020. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2021 and 2020, equaled net income. These results are not necessarily indicative of the results to be expected for the full year. UScellular has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2020.

Restricted Cash

UScellular presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Cash and cash equivalents	$	479	$	1,271
Restricted cash included in Other current assets	33		20
Cash, cash equivalents and restricted cash in the statement of cash flows	$	512	$	1,291

26

Note 2 Revenue Recognition

Disaggregation of Revenue

In the following table, UScellular's revenues are disaggregated by type of service, which represents the relevant categorization of revenues for UScellular, and timing of recognition. Service revenues are recognized over time and Equipment sales are point in time.  

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Revenues from contracts with customers:
Retail service	$	685	$	671
Inbound roaming	28		37
Other service	38		35
Service revenues from contracts with customers	751		743
Equipment sales	252		201
Total revenues from contracts with customers	1,003		944
Operating lease income	20		19
Total operating revenues	$	1,023	$	963

Contract Balances

The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Contract assets	$	11	$	10
Contract liabilities	$	185	$	171

Revenue recognized related to contract liabilities existing at January 1, 2021 was $97 million for the three months ended March 31, 2021.

Transaction price allocated to the remaining performance obligations

The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when wireless services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2021 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. 

	Service Revenues
(Dollars in millions)
Remainder of 2021	$	209
2022	112
Thereafter	128
Total	$	449

Contract Cost Assets

UScellular expects that commission fees paid as a result of obtaining contracts are recoverable and therefore UScellular defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. The contract cost asset balance related to commission fees and other costs was $123 million at March 31, 2021, and $124 million at December 31, 2020, and was recorded in Other assets and deferred charges in the Consolidated Balance Sheet. Deferred commission fees are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Amortization of contract cost assets was $25 million and $27 million for the three months ended March 31, 2021 and 2020, respectively, and was included in Selling, general and administrative expenses.

27

Note 3 Fair Value Measurements

As of March 31, 2021 and December 31, 2020, UScellular did not have any material financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP.

The provisions of GAAP establish a fair value hierarchy that contains three levels for inputs used in fair value measurements. Level 1 inputs include quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets and liabilities in inactive markets. Level 3 inputs are unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. A financial instrument’s level within the fair value hierarchy is not representative of its expected performance or its overall risk profile and, therefore, Level 3 assets are not necessarily higher risk than Level 2 assets or Level 1 assets.

UScellular has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below.

	Level within the Fair Value Hierarchy	March 31, 2021				December 31, 2020
		Book Value		Fair Value		Book Value		Fair Value
(Dollars in millions)
Long-term debt
Retail	2	$	1,917	$	1,963	$	1,917	$	1,962
Institutional	2	535		661		535		707
Other	2	598		598		106		106

Long-term debt excludes lease obligations, the current portion of Long-term debt and debt financing costs. The fair value of “Retail” Long-term debt was estimated using market prices for the 7.25% 2063 Senior Notes, 7.25% 2064 Senior Notes, 6.95% Senior Notes, 6.25% Senior Notes and 5.5% Senior Notes. UScellular’s “Institutional” debt consists of the 6.7% Senior Notes which are traded over the counter. UScellular’s “Other” debt consists of a senior term loan credit agreement and receivables securitization agreement. UScellular estimated the fair value of its Institutional and Other debt through a discounted cash flow analysis using the interest rates or estimated yield to maturity for each borrowing, which ranged from 1.31% to 4.48% and 1.35% to 3.75% at March 31, 2021 and December 31, 2020, respectively.

The fair values of Cash and cash equivalents, restricted cash and Short-term investments approximate their book values due to the short-term nature of these financial instruments.

28

Note 4 Equipment Installment Plans

UScellular sells devices to customers under equipment installment plans over a specified time period. For certain equipment installment plans, after a specified period of time or amount of payments, the customer may have the right to upgrade to a new device and have the remaining unpaid equipment installment contract balance waived, subject to certain conditions, including trading in the original device in good working condition and signing a new equipment installment contract.

The following table summarizes equipment installment plan receivables.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Equipment installment plan receivables, gross	$	1,013	$	1,007
Allowance for credit losses	(72)		(78)
Equipment installment plan receivables, net	$	941	$	929
Net balance presented in the Consolidated Balance Sheet as:
Accounts receivable — Customers and agents (Current portion)	$	596	$	590
Other assets and deferred charges (Non-current portion)	345		339
Equipment installment plan receivables, net	$	941	$	929

UScellular uses various inputs, including internal data, information from credit bureaus and other sources, to evaluate the credit profiles of its customers. From this evaluation, a credit class is assigned to the customer that determines the number of eligible lines, the amount of credit available, and the down payment requirement, if any. These credit classes are grouped into four credit categories: lowest risk, lower risk, slight risk and higher risk. A customer's assigned credit class is reviewed periodically and a change is made, if appropriate. An equipment installment plan billed amount is considered past due if not paid within 30 days. The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows:

	March 31, 2021										December 31, 2020
	Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total		Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total
(Dollars in millions)
Unbilled	$	826	$	99	$	24	$	8	$	957	$	819	$	98	$	22	$	9	$	948
Billed — current	35		5		1		1		42		36		5		1		1		43
Billed — past due	7		4		2		1		14		8		5		2		1		16
Total	$	868	$	108	$	27	$	10	$	1,013	$	863	$	108	$	25	$	11	$	1,007

The balance of the equipment installment plan receivables as of March 31, 2021 on a gross basis by year of origination were as follows:

	2018		2019		2020		2021		Total
(Dollars in millions)
Lowest Risk	$	15	$	202	$	484	$	167	$	868
Lower Risk	1		18		61		28		108
Slight Risk	1		3		12		11		27
Higher Risk	—		1		5		4		10
Total	$	17	$	224	$	562	$	210	$	1,013

Activity for the three months ended March 31, 2021 and 2020, in the allowance for credit losses for equipment installment plan receivables was as follows:

	March 31, 2021		March 31, 2020
(Dollars in millions)
Allowance for credit losses, beginning of period	$	78	$	84
Bad debts expense	3		25
Write-offs, net of recoveries	(9)		(19)
Allowance for credit losses, end of period	$	72	$	90

29

Note 5 Income Taxes

The effective tax rate on Income before income taxes for the three months ended March 31, 2021 and 2020, was 30.4% and 5.0%, respectively. The higher effective tax rate in 2021 as compared to 2020 is due primarily to the income tax benefits of the CARES Act included in the 2020 tax rate, which do not recur as benefits in the 2021 tax rate.

Note 6 Earnings Per Share

Basic earnings per share attributable to UScellular shareholders is computed by dividing Net income attributable to UScellular shareholders by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share attributable to UScellular shareholders is computed by dividing Net income attributable to UScellular shareholders by the weighted average number of Common Shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon the exercise of outstanding stock options and the vesting of performance and restricted stock units.

The amounts used in computing basic and diluted earnings per share attributable to UScellular shareholders were as follows:

	Three Months Ended March 31,
	2021		2020
(Dollars and shares in millions, except per share amounts)
Net income attributable to UScellular shareholders	$	60	$	71
Weighted average number of shares used in basic earnings per share	86		86
Effects of dilutive securities	2		2
Weighted average number of shares used in diluted earnings per share	88		88
Basic earnings per share attributable to UScellular shareholders	$	0.70	$	0.82
Diluted earnings per share attributable to UScellular shareholders	$	0.69	$	0.81

Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in weighted average diluted shares outstanding for the calculation of Diluted earnings per share attributable to UScellular shareholders because their effects were antidilutive. The number of such Common Shares excluded was less than 1 million and 1 million for the three months ended March 31, 2021 and 2020, respectively.

Note 7 Intangible Assets

Activity related to Licenses for the three months ended March 31, 2021, is presented below:

	Licenses
(Dollars in millions)
Balance at December 31, 2020	$	2,629
Acquisitions	1,283
Capitalized interest	3
Balance at March 31, 2021	$	3,915

In February 2021, the FCC announced by way of public notice that UScellular was the provisional winning bidder for 254 wireless spectrum licenses in the 3.7-3.98 GHz bands (Auction 107) for $1,283 million. UScellular paid $30 million of this amount in 2020 and the remainder in March 2021. Additionally, UScellular expects to capitalize costs of approximately $178 million related to the estimated relocation costs and accelerated relocation incentive payments. The wireless spectrum licenses from Auction 107 are expected to be granted by the FCC in 2021. The spectrum must be cleared by incumbent providers before UScellular can access it. UScellular does not expect to have access to this spectrum until late 2023.

30

Note 8 Investments in Unconsolidated Entities

Investments in unconsolidated entities consist of amounts invested in entities in which UScellular holds a noncontrolling interest. UScellular’s Investments in unconsolidated entities are accounted for using either the equity method or measurement alternative method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Equity method investments	$	447	$	428
Measurement alternative method investments	8		7
Total investments in unconsolidated entities	$	455	$	435

The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of UScellular’s equity method investments.

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Revenues	$	1,727	$	1,657
Operating expenses	1,275		1,162
Operating income	452		495
Other income (expense), net	12		3
Net income	$	464	$	498

Note 9 Debt

Term Loan Agreement

The following table summarizes the term loan credit agreement as of March 31, 2021:

(Dollars in millions)
Maximum borrowing capacity	$	300
Amount borrowed	$	300
Amount available for use	$	—

Borrowings under the term loan bear interest at a rate of LIBOR plus 2.25%. Principal reductions are due and payable in quarterly installments of $0.75 million beginning in September 2021. The remaining unpaid balance will be due and payable in June 2027.

UScellular believes that it was in compliance with all of the financial covenants and other requirements set forth in its senior term loan credit agreement as of March 31, 2021.

Receivables Securitization Agreement

At March 31, 2021, UScellular had a receivables securitization agreement for securitized borrowings using its equipment installment receivables for general corporate purposes. Amounts under the receivables securitization agreement may be borrowed, repaid and reborrowed from time to time until maturity in December 2022, which may be extended from time to time as specified therein. The outstanding borrowings bear interest at floating rates. In March 2021, UScellular borrowed $275 million under its receivables securitization agreement. As of March 31, 2021, UScellular has borrowed the full amount available under the receivables securitization agreement of $300 million. UScellular believes that it was in compliance with all of the financial covenants and other requirements set forth in its receivables securitization agreement as of March 31, 2021. As of March 31, 2021, the USCC Master Note Trust held $446 million of assets available to be pledged as collateral for the receivables securitization agreement.

Other Long-Term Debt

In April 2021, UScellular announced that it will redeem its outstanding $275 million of 7.25% Senior Notes due 2063. At time of redemption, $9 million of interest expense will be recorded related to unamortized debt issuance costs related to the notes. The notes are expected to be redeemed on May 12, 2021, at a redemption price of 100% of the principal amount, including accrued and unpaid interest to the redemption date.

31

Note 10 Variable Interest Entities

Consolidated VIEs

UScellular consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. UScellular reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and UScellular’s Form 10-K for the year ended December 31, 2020.

UScellular formed USCC EIP LLC (Seller/Sub-Servicer), USCC Receivables Funding LLC (Transferor) and the USCC Master Note Trust (Trust), collectively the special purpose entities (SPEs), to facilitate a securitized borrowing using its equipment installment plan receivables. Under a Receivables Sale Agreement, UScellular wholly-owned, majority-owned and unconsolidated entities, collectively referred to as “affiliated entities”, transfer device equipment installment plan contracts to the Seller/Sub-Servicer. The Seller/Sub-Servicer aggregates device equipment installment plan contracts, and performs servicing, collection and all other administrative activities related to accounting for the equipment installment plan contracts. The Seller/Sub-Servicer sells the eligible equipment installment plan receivables to the Transferor, a bankruptcy remote entity, which subsequently sells the receivables to the Trust. The Trust, which is bankruptcy remote and isolated from the creditors of UScellular, will be responsible for issuing asset-backed variable funding notes (Notes), which are collateralized by the equipment installment plan receivables owned by the Trust. Given that UScellular has the power to direct the activities of these SPEs, and that these SPEs lack sufficient equity to finance their activities, UScellular is deemed to have a controlling financial interest in the SPEs and, therefore, consolidates them. All transactions with third parties (e.g., issuance of the asset-backed variable funding notes) will be accounted for as a secured borrowing due to the pledging of equipment installment plan contracts as collateral, significant continuing involvement in the transferred assets, subordinated interests of the cash flows, and continued evidence of control of the receivables. 

The following VIEs were formed to participate in FCC auctions of wireless spectrum licenses and to fund, establish, and provide wireless service with respect to any FCC wireless spectrum licenses won in the auctions:

▪Advantage Spectrum, L.P. (Advantage Spectrum) and Sunshine Spectrum, Inc., the general partner of Advantage Spectrum; and

▪King Street Wireless, L.P. (King Street Wireless) and King Street Wireless, Inc., the general partner of King Street Wireless.

These particular VIEs are collectively referred to as designated entities. The power to direct the activities that most significantly impact the economic performance of these VIEs is shared. Specifically, the general partner of these VIEs has the exclusive right to manage, operate and control the limited partnerships and make all decisions to carry on the business of the partnerships. The general partner of each partnership needs the consent of the limited partner, an indirect UScellular subsidiary, to sell or lease certain wireless spectrum licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of these VIEs is shared, UScellular has the most significant level of exposure to the variability associated with the economic performance of the VIEs, indicating that UScellular is the primary beneficiary of the VIEs. Therefore, in accordance with GAAP, these VIEs are consolidated.

UScellular also consolidates other VIEs that are limited partnerships that provide wireless service. A limited partnership is a variable interest entity unless the limited partners hold substantive participating rights or kick-out rights over the general partner. For certain limited partnerships, UScellular is the general partner and manages the operations. In these partnerships, the limited partners do not have substantive kick-out or participating rights and, further, such limited partners do not have the authority to remove the general partner. Therefore, these limited partnerships also are recognized as VIEs and are consolidated under the variable interest model.

32

The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in UScellular’s Consolidated Balance Sheet.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Assets
Cash and cash equivalents	$	22	$	18
Short-term investments	3		3
Accounts receivable	644		639
Inventory, net	3		3
Other current assets	34		21
Licenses	639		639
Property, plant and equipment, net	110		111
Operating lease right-of-use assets	42		39
Other assets and deferred charges	354		348
Total assets	$	1,851	$	1,821
Liabilities
Current liabilities	$	27	$	28
Long-term operating lease liabilities	37		36
Other deferred liabilities and credits	21		20
Total liabilities	$	85	$	84

Unconsolidated VIEs

UScellular manages the operations of and holds a variable interest in certain other limited partnerships, but is not the primary beneficiary of these entities and, therefore, does not consolidate them under the variable interest model.

UScellular’s total investment in these unconsolidated entities was $5 million at both March 31, 2021 and December 31, 2020, and is included in Investments in unconsolidated entities in UScellular’s Consolidated Balance Sheet. The maximum exposure from unconsolidated VIEs is limited to the investment held by UScellular in those entities. 

Other Related Matters

UScellular made contributions, loans or advances to its VIEs totaling $30 million and $69 million, during the three months ended March 31, 2021 and 2020, respectively, of which $10 million in 2021 and $55 million in 2020, are related to USCC EIP LLC as discussed above. UScellular may agree to make additional capital contributions and/or advances to these or other VIEs and/or to their general partners to provide additional funding for operations or the development of wireless spectrum licenses granted in various auctions. UScellular may finance such amounts with a combination of cash on hand, borrowings under its revolving credit or receivables securitization agreements and/or other long-term debt. There is no assurance that UScellular will be able to obtain additional financing on commercially reasonable terms or at all to provide such financial support.

The limited partnership agreement of Advantage Spectrum also provides the general partner with a put option whereby the general partner may require the limited partner, a subsidiary of UScellular, to purchase its interest in the limited partnership. The general partner’s put option related to its interest in Advantage Spectrum will be exercisable in the third quarter of 2021, and if not exercised at that time, will be exercisable in 2022. The greater of the carrying value of the general partner's investment or the value of the put option, net of any borrowings due to UScellular, is recorded as Noncontrolling interests with redemption features in UScellular’s Consolidated Balance Sheet. Also in accordance with GAAP, minority share of income or changes in the redemption value of the put option, net of interest accrued on the loans, are recorded as a component of Net income attributable to noncontrolling interests, net of tax, in UScellular’s Consolidated Statement of Operations.

33

United States Cellular Corporation

Additional Required Information

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

UScellular maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to UScellular’s management, including its principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by SEC Rules 13a-15(b), UScellular carried out an evaluation, under the supervision and with the participation of management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of UScellular’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, UScellular’s principal executive officer and principal financial officer concluded that UScellular’s disclosure controls and procedures were effective as of March 31, 2021, at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes in internal controls over financial reporting that have occurred during the three months ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, UScellular’s internal control over financial reporting.

Legal Proceedings

In April 2018, the United States Department of Justice (DOJ) notified UScellular and its parent, TDS, that it was conducting inquiries of UScellular and TDS under the federal False Claims Act relating to UScellular’s participation in wireless spectrum license auctions 58, 66, 73 and 97 conducted by the FCC. UScellular is/was a limited partner in several limited partnerships which qualified for the 25% bid credit in each auction. The investigation arose from civil actions under the Federal False Claims Act brought by private parties in the U.S. District Court for the Western District of Oklahoma. In November and December 2019, following the DOJ’s investigation, the DOJ informed UScellular and TDS that it would not intervene in the above-referenced actions. Subsequently, the private party plaintiffs filed amended complaints in both actions in the U.S. District Court for the Western District of Oklahoma and are continuing the action on their own. In July 2020, these actions were transferred to the U.S. District Court for the District of Columbia. UScellular believes that its arrangements with the limited partnerships and the limited partnerships’ participation in the FCC auctions complied with applicable law and FCC rules. At this time, UScellular cannot predict the outcome of any proceeding.

Refer to the disclosure under Legal Proceedings in UScellular’s Form 10-K for the year ended December 31, 2020, for additional information. There have been no material changes to such information since December 31, 2020.

34

Unregistered Sales of Equity Securities and Use of Proceeds

In November 2009, UScellular announced by Form 8-K that the Board of Directors of UScellular authorized the repurchase of up to 1,300,000 additional Common Shares on an annual basis beginning in 2009 and continuing each year thereafter, on a cumulative basis. In December 2016, the UScellular Board amended this authorization to provide that, beginning on January 1, 2017, the increase in the authorized repurchase amount with respect to a particular year will be any amount from zero to 1,300,000 Common Shares, as determined by the Pricing Committee of the Board of Directors, and that if the Pricing Committee did not specify an additional amount for any year, such additional amount would be zero for such year. The Pricing Committee has not specified any increase in the authorization since that time. The Pricing Committee also was authorized to decrease the cumulative amount of the authorization at any time, but has not taken any action to do so at this time. The authorization provides that share repurchases will be made pursuant to open market purchases, block purchases, private purchases, or otherwise, depending on market prices and other conditions. This authorization does not have an expiration date. UScellular did not determine to terminate the foregoing Common Share repurchase program, as amended, or cease making further purchases thereunder, during the first quarter of 2021.

The following table provides certain information with respect to all purchases made by or on behalf of UScellular, and any open market purchases made by any "affiliated purchaser" (as defined by the SEC) of UScellular, of UScellular Common Shares during the quarter covered by this Form 10-Q.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - 31, 2021	—	$	—	—	4,506,713
February 1 - 28, 2021	40,000	$	29.38	40,000	4,466,713
March 1 - 31, 2021	14,900	$	29.90	14,900	4,451,813
Total for or as of the end of the quarter ended March 31, 2021	54,900	$	29.52	54,900	4,451,813

35

Exhibits

Exhibit Number	Description of Documents
Exhibit 10.1	2021 Executive Deferred Compensation Interest Account Plan effective January 1, 2021.
Exhibit 10.2	2021 Officer Annual Incentive Plan effective January 1, 2021, is hereby incorporated by reference to Exhibit 10.1 to UScellular's Current Report on Form 8-K dated April 13, 2021.
Exhibit 31.1	Principal executive officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
Exhibit 31.2	Principal financial officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
Exhibit 32.1	Principal executive officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.
Exhibit 32.2	Principal financial officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.
Exhibit 101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCH	Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document
Exhibit 101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document
Exhibit 101.LAB	Inline XBRL Taxonomy Label Linkbase Document
Exhibit 101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the inline document.

36

Form 10-Q Cross Reference Index
Item Number			Page No.
Part I.	Financial Information
	Item 1.	Financial Statements (Unaudited)	20 - 24
		Notes to Consolidated Financial Statements	26 - 32
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1 - 17
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
	Item 4.	Controls and Procedures	34
Part II.	Other Information
	Item 1.	Legal Proceedings	34
	Item1A.	Risk Factors	19
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
	Item 6.	Exhibits	36
Signatures			38

37

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		UNITED STATES CELLULAR CORPORATION
		(Registrant)
Date:	May 6, 2021		/s/ Laurent C. Therivel
			Laurent C. Therivel President and Chief Executive Officer (principal executive officer)
Date:	May 6, 2021		/s/ Douglas W. Chambers
			Douglas W. Chambers Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer)
Date:	May 6, 2021		/s/ Anita J. Kroll
			Anita J. Kroll Chief Accounting Officer (principal accounting officer)
Date:	May 6, 2021		/s/ Jeffrey S. Hoersch
			Jeffrey S. Hoersch Vice President and Controller

38

EX-10.1

Exhibit 10.1

UNITED STATES CELLULAR CORPORATION

2021 EXECUTIVE DEFERRED COMPENSATION INTEREST ACCOUNT PLAN

(Effective January 1, 2021)

ARTICLE 1

Introduction

Section 1.1    Title. The title of this Plan shall be the “United States Cellular Corporation Executive Deferred Compensation Interest Account Plan.”

Section 1.2    Purpose. This Plan shall constitute an unfunded nonqualified deferred compensation arrangement established for the purpose of providing deferred compensation for a select group of management or highly compensated employees (within the meaning of Title I of ERISA) of the Employers.

Section 1.3    Effective Date. This Plan is effective January 1, 2021 and shall govern deferrals of compensation for services performed in calendar years commencing on or after January 1, 2021 (and interest credited to such deferrals).

ARTICLE 2

Definitions

“Affiliate” means (i) a corporation that is a member of the same controlled group of corporations (within the meaning of section 414(b) of the Code) as an Employer or (ii) a trade or business (whether or not incorporated) under common control (within the meaning of section 414(c) of the Code) with an Employer.

“Base Salary” means the base salary payable by an Employer for services to be performed during the Plan Year for which the Participant is submitting an Election Form. For the avoidance of doubt, “Base Salary” shall exclude, without limitation, all bonuses, other incentive payments, commissions, overtime, fringe benefits (cash and noncash), stock options, restricted stock units, performance share unit awards, other equity awards, relocation expenses, nonqualified deferred compensation, non-monetary awards, moving expense and other reimbursements, welfare benefits, severance and automobile and other allowances.

“Bonus” means any annual, quarterly or monthly performance award payable to a Participant for services to be performed during the Plan Year for which the Participant is submitting an Election Form.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.

“Company” means United States Cellular Corporation, a Delaware corporation, or any successor thereto.

“Deferred Compensation” means the amount of Base Salary and Bonus that a Participant elects to defer pursuant to Section 3.2.

“Deferred Compensation Account” means the bookkeeping account maintained by the Company for each Participant to which shall be credited (i) the Participant’s Deferred Compensation and (ii) interest credited pursuant to Section 4.2. A Deferred Compensation Account may consist of subaccounts for each Plan Year with respect to which a Participant defers compensation under the Plan.

“Designated Beneficiary” means the Participant’s beneficiary designated pursuant to Section 5.5.

“Disabled” or “Disability” means that a Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer.

“Election Form” means the form prescribed by the Plan Administrator which is completed by the Participant pursuant to Sections 3.2 and 3.3.

“Elective Account Balance Plan” means an “account balance plan” within the meaning of Treasury Regulation §1.409A-1(c)(2)(i)(A) maintained by the Employers or any of their Affiliates pursuant to which an individual may elect to defer compensation. For this purpose, an Elective Account Balance Plan shall include, without limitation, (i) this Plan and any predecessor thereto, (ii) the phantom stock deferral arrangements maintained by the Company and (iii) the interest-bearing and phantom stock deferral arrangements maintained by Telephone and Data Systems, Inc. and TDS Telecommunications Corporation.

“Eligible Employee” shall have the meaning set forth in Section 3.1.

“Employer” means the Company and each Affiliate that with the consent of the Company elects to participate in the Plan.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any regulations promulgated thereunder.

“Participant” means an Eligible Employee who participates in the Plan pursuant to Article 3.

“Payment Date” means the date elected by the Participant pursuant to Section 3.3, on which the Participant’s Deferred Compensation Account becomes payable.

“Plan” means this “United States Cellular Corporation 2021 Executive Deferred CompensationInterest Account Plan,” as amended from time to time.

“Plan Administrator” means the Senior Director of Compensation of the Company (or any successor thereto). References herein to the Plan Administrator also shall include (i) the Top Human Resources Officer, to the extent that the Top Human Resources Officer is undertaking administrative responsibilities expressly assigned to the Top Human Resources Officer pursuant to Article 6 and (ii) any person or committee to whom the Plan Administrator has delegated any of his or her responsibilities hereunder to the extent of the delegation.

“Plan Year” means the calendar year.

“Separation from Service” means a termination of employment with the Employers and their affiliates within the meaning of Treasury Regulation §1.409A-1(h) (without regard to any permissible alternative definition thereunder). Notwithstanding any other provision herein, “affiliate” for purposes of determining whether a Participant has incurred a “Separation from Service” shall be defined to include all entities that would be treated as part of the group of entities comprising the Employers under sections 414(b) and (c) of the Code, but substituting a 50% ownership level for the 80% ownership level set forth therein.

“Specified Employee” shall have the meaning set forth in the “Section 409A Specified Employee Policy of Telephone and Data Systems, Inc. and its Affiliates,” which policy hereby is incorporated herein.

“Top Human Resources Officer” means the most senior officer of the Company responsible for human resources matters.

“Unforeseeable Emergency” means a severe financial hardship to a Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse, the Participant’s Designated Beneficiary or the Participant’s dependent (as defined in section 152 of the Code, without regard to sections 152(b)(1), (b)(2) and (d)(1)(B)), (ii) the loss of a Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, irrespective of whether caused by a natural disaster) or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Examples of what may be considered to be Unforeseeable Emergencies include (a) the imminent foreclosure of or eviction from the Participant’s primary residence, (b) the need to pay for medical expenses, including non-refundable deductibles and the cost of prescription drug medication and (c) the need to pay for funeral expenses of a Participant’s spouse, Designated Beneficiary or dependent.

ARTICLE 3

Participation

Section 3.1    Eligibility. An employee of an Employer shall be eligible to participate in this Plan for a Plan Year if such employee (i) holds a title of director or a title senior to director (including without limitation an officer title) or is treated by an Employer for benefit purposes as a director or as an employee senior to a director and (ii) is notified by the Plan Administrator in writing or by electronic means that he or she is eligible to participate in the Plan for such Plan Year (an “Eligible Employee”).

Section 3.2    Participation. Each Eligible Employee may participate in the Plan for a Plan Year by submitting to the Plan Administrator an Election Form, and by specifying in such Election Form the respective percentages of Base Salary and Bonus otherwise payable to the Eligible Employee by an Employer for services to be performed in such Plan Year, in each case to be deducted from the Eligible Employee’s compensation and deferred hereunder for payment at a later date. An Election Form must be completed and submitted to the Plan Administrator at the time and in the manner prescribed by the Plan Administrator, but in all cases prior to the beginning of the Plan Year during which the Base Salary or Bonus is earned. Except as provided in Section 5.4(b), the deferral percentages selected in the Election Form shall be in effect for the entire Plan Year and may not be changed or revoked during such Plan Year. In order to participate in the Plan for any subsequent Plan Year, an Eligible Employee must submit a new Election Form within the designated election period prior to the commencement of the Plan Year.

Section 3.3    Election of Payment Date and Form of Payment. In the event a Participant has elected to defer amounts for a Plan Year pursuant to Section 3.2, such Participant shall elect, utilizing the Election Form for such Plan Year, a Payment Date and a form of payment for the portion of his or her Deferred Compensation Account attributable to such Plan Year. The Participant may elect as a Payment Date either (i) the date of the Participant’s Separation from Service or (ii) any specified January which is three or more years after the first day of the Plan Year for which the deferral election is effective. The Participant shall elect as a form of payment for receiving his or her Deferred Compensation Account either (a) a lump sum or (b) annual installments. If the Participant elects the installment payment method, the Participant must designate in the Election Form the number of annual installment payments he or she wishes to receive, which cannot exceed five. If an individual who has elected to participate in the Plan for a Plan Year fails, prior to the end of the election period described in Section 3.2, to make a valid election as to the Payment Date for his or her Deferred Compensation Account for such year, the Participant shall be deemed to have elected payment upon Separation from Service. If such an individual fails, prior to the end of such period, to make a valid election as to the form of payment for his or her Deferred Compensation Account for such year, the Participant shall be deemed to have elected payment in a lump sum. A Participant’s Payment Date and form of payment elections (or deemed elections) for a particular Plan Year are irrevocable and may not be changed.

ARTICLE 4

Accounts

Section 4.1    Deferred Compensation Account. The Company shall establish and maintain a Deferred Compensation Account for each Participant who elects Deferred Compensation under Article 3. The Participant’s Deferred Compensation Account shall be a bookkeeping account maintained by the Company and shall reflect the amount of the Deferred Compensation and interest thereon credited hereunder on behalf of the Participant. The Company shall credit Deferred Compensation to a Participant’s Deferred Compensation Account as of the date of the scheduled payment of such compensation.

Section 4.2    Crediting of Interest. On the last day of each calendar month until all of a Participant’s Deferred Compensation Account has been paid (or forfeited pursuant to Section 7.9), interest shall be credited to the balance of the Participant’s Deferred Compensation Account as of such date. Such interest shall be compounded monthly and computed at a rate equal to one-twelfth (1/12) of the sum of (i) the average twenty (20) year Treasury Bond rate of interest (as published on the U.S. Department of Treasury website for the last business day of the preceding calendar month) plus (ii) 1.25%.

ARTICLE 5

Payment of Deferred Compensation Account

Section 5.1    Normal Distribution. (a) In General. Except as otherwise provided herein, a Participant’s Deferred Compensation Account shall become payable to the Participant as of the earlier of (i) the Payment Date elected by the Participant and (ii) the date of the Participant’s Separation from Service. Payment shall be made either in a lump sum or annual installments, as elected by the Participant on the Election Form. In the case of payment in a lump sum by reason of the Participant’s Separation from Service, payment shall be made within sixty (60) days following the Separation, subject to the six month payment delay described in Section 5.1(b) for a Specified Employee. In the case of payment in installments by reason of the Participant’s Separation from Service, payment shall commence in January of the calendar year following the calendar year during which the Separation from Service occurs, subject to the six month payment delay described in Section 5.1(b) for a Specified Employee, and then installments subsequent to the initial payment shall be made in January of each succeeding calendar year until the entire Deferred Compensation Account (which includes interest earned during the installment period) has been paid. For purposes of section 409A of the Code, the entitlement to a series of installment payments under the Plan shall be treated as the entitlement to a single payment as of the date the first installment is scheduled to be paid.

(b) Special Rule for Specified Employee. Notwithstanding any provision to the contrary in this Plan or any election set forth in an Election Form, if a Participant is a Specified Employee as of the date of the Participant’s Separation from Service, and is entitled to payment hereunder by reason of such Separation from Service, no payment under the Plan (including on account of the Participant’s Disability or Unforeseeable Emergency) shall be made to the Participant before the date which is six months after the date of the Separation from Service (or, if earlier than the end of such six-month period, the date of the Participant’s death). The aggregate amount of any payments which a Participant cannot receive, due to being a Specified Employee, during the six-month period following the Participant’s Separation from Service shall be paid to the Participant in a lump sum during the seventh calendar month following the calendar month during which the Participant Separates from Service.

Section 5.2    Distribution Upon Disability. If a Participant becomes Disabled prior to the total distribution of his or her Deferred Compensation Account, the Participant’s unpaid account immediately shall become payable in full to the Participant. Payment shall be made in a lump sum within sixty (60) days following the occurrence of the Participant’s Disability. Distribution of the Deferred Compensation Account of a Specified Employee who incurs a Disability after he or she has Separated from Service shall be subject to any delay required by Section 5.1(b).

Section 5.3    Distribution Upon Death. If a Participant dies prior to the total distribution of his or her Deferred Compensation Account, the Participant’s unpaid account immediately shall become payable in full to the Participant’s Designated Beneficiary. Payment shall be made in a lump sum as soon as administratively practicable but no later than December 31 of the calendar year following the calendar year of the Participant’s death.

Section 5.4    Withdrawals for an Unforeseeable Emergency. (a) In General. Upon written request by a Participant whom the Plan Administrator determines has suffered an Unforeseeable Emergency, the Plan Administrator may, in his or her sole discretion, direct payment to the Participant of all or any portion of the Participant’s Deferred Compensation Account. The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not exceed an amount reasonably necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes or penalties reasonably anticipated as a result of such payment after taking into account the extent to which such Unforeseeable Emergency is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (iii) by cessation of deferrals hereunder or under any other Elective Account Balance Plan. In the event the Plan Administrator approves a withdrawal due to an Unforeseeable Emergency, payment shall be made to the Participant in a lump sum within sixty (60) days after the occurrence of the Unforeseeable Emergency. A request for an Unforeseeable Emergency withdrawal by a Specified Employee who has Separated from Service shall be subject to any delay required by Section 5.1(b).

(b) Impact on Deferral Election. In the event that a Participant receives a withdrawal due to the Participant’s Unforeseeable Emergency, whether under this Plan or any other nonqualified deferred compensation plan maintained by an Employer or Affiliate, any deferral election made by the Participant under this Plan or any other Elective Account Balance Plan with respect to the Plan Year during which the withdrawal occurs shall be cancelled for the remainder of the Plan Year.

Section 5.5    Designation of Beneficiaries. Each Participant may name any one or more beneficiaries (who may be named concurrently or contingently) to receive any amounts payable pursuant to Section 5.3 upon the Participant’s death (the “Designated Beneficiary”) by executing a beneficiary designation form. The Participant may change or revoke any such designation by executing a new beneficiary designation form. A beneficiary designation form shall be in the form prescribed by the Plan Administrator and will be effective only when filed with the Plan Administrator during the Participant’s lifetime. If the Participant is married and names someone other than his or her spouse as a primary beneficiary, the designation is invalid unless the spouse consents by signing the beneficiary designation form in the presence of a Notary Public. If all Designated Beneficiaries predecease the Participant or, in the case of corporations, partnerships, trusts or other entities which are Designated Beneficiaries, are terminated, dissolved, become insolvent or are adjudicated bankrupt prior to the date of the Participant’s death, or if the Participant fails to designate a beneficiary, then the following persons in the order set forth below shall be the Participant’s Designated Beneficiaries: (i) the Participant’s spouse, if living; or if none, (ii) the Participant’s then living descendants, per stirpes; or if none, (iii) the Participant’s estate.

ARTICLE 6

Administration

Section 6.1    In General. The Plan shall be administered by the Plan Administrator. The duties and authority of the Plan Administrator shall include (i) the interpretation of the provisions of the Plan, (ii) the adoption of any rules and regulations which may become necessary or advisable in the operation of the Plan, (iii) the making, in his or her sole discretion, of such determinations as may be permitted or required pursuant to the Plan, and (iv) the taking of such other actions as may be permitted or required for the proper administration of the Plan in accordance with its terms. Any decision of the Plan Administrator with respect to any matter within the authority of the Plan Administrator shall be final, binding and conclusive upon the Employers, each Participant, each Designated Beneficiary and any other person. Benefits under this Plan shall be paid only if the Plan Administrator decides, in his or her sole discretion, that the Participant, Designated Beneficiary or other person is entitled to them. Any action taken by the Plan Administrator with respect to any one or more Participants shall not be binding on the Plan Administrator as to any action to be taken with respect to any other Participant. The Plan Administrator may be a Participant, but the Top Human Resources Officer (rather than the Plan Administrator) shall make any decision involving solely the Plan Administrator’s rights or the computation of his or her benefits under the Plan. The Plan Administrator may designate any other person or committee, including employees of the Employers, to carry out any of his or her responsibilities with respect to administration of the Plan.

Section 6.2    Claims Procedure. (a) Filing of Claim. If any Participant or Designated Beneficiary believes he or she is entitled to benefits under the Plan in an amount greater than those which he or she is receiving or has received, the Participant or Designated Beneficiary (or his or her duly authorized representative) may file a claim with the Plan Administrator. Such a claim shall be in writing and state the nature of the claim, the facts supporting the claim, the amount claimed and the address of the claimant.

(b)Initial Review of Claim. The Plan Administrator shall review the claim and, unless special circumstances require an extension of time, within 90 days after receipt of the claim give written or electronic notice to the claimant of his or her decision with respect to the claim. If special circumstances require an extension of time, the claimant shall be so advised in writing or by electronic means within the initial 90-day period and in no event shall such an extension exceed 90 days. The notice of the decision of the Plan Administrator with respect to the claim shall be written in a manner calculated to be understood by the claimant and, if the claim is wholly or partially denied, shall set forth the specific reasons for the denial, specific references to the pertinent Plan provisions on which the denial is based, a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and an explanation of the appeals procedure under the Plan and the time limits applicable to such procedure (including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following the final denial of a claim).

(c)Filing an Appeal of Claim Denial. The claimant (or his or her duly authorized representative) may request a review of the denial by filing with the Top Human Resources Officer a written request for such review within 60 days after notice of the denial has been received by the claimant. Within the same 60-day period, the claimant may submit to the Top Human Resources Officer written comments, documents, records and other information relating to the claim. Upon request and free of charge, the claimant also may have reasonable access to, and copies of, documents, records and other information relevant to the claim.

(d)Review of Claim Denial. If a request for review is so filed, review of the denial shall be made by the Top Human Resources Officer and the claimant shall be given written or electronic notice of the final decision of the Top Human Resources Officer within 60 days after receipt of such request, unless special circumstances require an extension of time. If special circumstances require an extension of time, the claimant shall be so advised in writing or by electronic means within the initial 60-day period and in no event shall such an extension exceed 60 days. If the appeal of the claim is wholly or partially denied, the notice of the final decision of the Top Human Resources Officer shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based and a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all relevant documents, records and information. The notice shall be written in a manner calculated to be understood by the claimant and shall notify the claimant of his or her right to bring a civil action under section 502(a) of ERISA.

(e)Claim for Disability Distribution. Notwithstanding the foregoing, a Participant’s claim that he or she is entitled to a distribution of the Participant’s Deferred Compensation Account pursuant to Section 5.2 due to the Participant’s Disability shall be processed in accordance with the provisions of Department of Labor Regulation §2560.503-1 regarding claims for disability benefits.

Section 6.3    Statute of Limitations for Actions under the Plan. Except for actions to which any statute of limitations prescribed by ERISA applies, (a) no legal or equitable action relating to a claim for benefits under section 502 of ERISA with respect to the Plan may be commenced later than one (1) year after the claimant receives a final decision from the Top Human Resources Officer in response to the claimant’s request for review of an adverse benefit determination and (b) no other legal or equitable action involving the Plan may be commenced later than two (2) years after the date the person bringing the action knew, or had reason to know, of the circumstances giving rise to the action. This provision shall not bar the Plan or the Plan Administrator from recovering, in accordance with section 409A of the Code or other applicable law, overpayments of benefits or other amounts incorrectly paid to any person under the Plan at any time or bringing any legal or equitable action against any party.

Section 6.4    Forum for Legal Action under the Plan. Any legal action involving the Plan that is brought by any Participant, Designated Beneficiary or other person shall be litigated in the Federal courts located in the Northern District of Illinois and no other Federal or state court.

Section 6.5    Legal Fees. Any award of legal fees in connection with an action involving the Plan shall be calculated pursuant to a method that results in the lowest amount of fees being paid, which amount shall be no more than the amount that is reasonable. In no event shall legal fees be awarded for work related to: (a) administrative proceedings under the Plan; (b) unsuccessful claims brought by a Participant, Designated Beneficiary or other person; or (c) actions that are not brought under ERISA. In calculating any award of legal fees, there shall be no enhancement for the risk of contingency, nonpayment or any other risk, nor shall there be applied a contingency multiplier or any other multiplier. In any action brought by a Participant, Designated Beneficiary or other person against the Plan, the Plan Administrator, the Top Human Resources Officer, any Plan fiduciary, an Employer or their respective affiliates, or their or their affiliates’ respective officers, directors, trustees, employees or agents (the “Plan Parties”), legal fees of the Plan Parties in connection with such action shall be paid by the Participant, Designated Beneficiary or other person bringing the action, unless the court specifically finds that there was a reasonable basis for the action.

Section 6.6    Immunity of Plan Administrator and Top Human Resources Officer. The Plan Administrator and the Top Human Resources Officer may rely upon any information, report or opinion supplied to them by a designated agent of an Employer or any legal counsel or independent public accountant, and shall be fully protected in relying upon any such information, report or opinion. The Employers hereby jointly and severally indemnify the Plan Administrator and the Top Human Resources Officer from the effects and consequences of their acts, omissions and conduct in their official capacity with respect to the Plan, except to the extent such effects and consequences result from their own willful misconduct or illegal acts.

ARTICLE 7

General Provisions

Section 7.1    Base Salary Paid for Final Payroll Period. For purposes of this Plan, Base Salary payable after the last day of a Plan Year solely for services performed during the final payroll period containing the last day of the Plan Year shall be treated as Base Salary for services performed in the Plan Year in which the payroll period commenced (as opposed to the subsequent Plan Year in which the Base Salary is payable).

Section 7.2    Leaves of Absence. For purposes of this Plan, a Participant shall not have a Separation from Service while the Participant is on a military leave, sick leave or other bona fide leave of absence (such as temporary employment by the government) if such leave does not exceed 6 months (or, if the leave exceeds 6 months, provided that the Participant’s right to reemployment is protected either by statute or contract). If the Participant’s leave exceeds 6 months and the right to reemployment is not protected by statute or contract, then the Participant shall be deemed to have Separated from Service for purposes of this Plan as of the first day immediately following the end of the six-month period.

Section 7.3    Source of Payment. Amounts paid under this Plan shall be paid from the general funds of the Employers, and each Participant shall be no more than an unsecured general creditor of his or her Employer with no right to any specific assets of the Employer (whose claim may be subordinated to those of other creditors of the Employer). Nothing contained in this Plan shall be deemed to create a trust of any kind for the benefit of any Participant, or create any fiduciary relationship between the Employers and any Participant with respect to any assets of the Employers.

Section 7.4    Withholding. Appropriate amounts shall be withheld from any distribution made under this Plan or from a Participant’s compensation as may be required for purposes of complying with Federal, state, local or other tax withholding requirements applicable to the benefits provided under this Plan.

Section 7.5    Assignment. Except as provided in Section 5.5, the benefits provided under this Plan may not be alienated, assigned, transferred, pledged or hypothecated by the voluntary or involuntary act of any person, by operation of law, or otherwise. Any attempt to alienate, assign, transfer, pledge or hypothecate the benefits provided under this Plan shall be null and void and without legal effect. The benefits provided under this Plan shall be exempt from the claims of creditors or other claimants and from all orders, decrees, levies, garnishments or executions.

Section 7.6    Applicable Law. This Plan shall be construed, administered and governed in all respects in accordance with the laws of the State of Illinois (without regard to conflicts of laws) to the extent not preempted by ERISA or other applicable federal law.

Section 7.7    Plurals and Headings. Wherever used herein, words in the singular form shall be construed as though they also were used in the plural form, and words in the plural form shall be construed as though they also were used in the singular form, where appropriate. Headings of sections and subsections of this Plan are inserted for convenience of reference only and are not part of this Plan and are not to be considered in the construction thereof.

Section 7.8    Plan Not to Affect Employment Relationship. Neither the adoption of this Plan nor its operation shall in any way affect the right and power of the Employers to dismiss or otherwise terminate the employment or change the terms of the employment or amount of compensation of any Participant at any time for any reason with or without cause.

Section 7.9    Inability to Locate Participant or Designated Beneficiary. If, as of the Latest Payment Date, the Plan Administrator is unable to make payment of all or a portion of a Participant’s Deferred Compensation Account to such Participant or his or her Designated Beneficiary, as applicable, because the whereabouts of such person cannot be ascertained (notwithstanding the mailing of notice to any last known address or addresses and the exercise by the Plan Administrator of other reasonable diligence), then such Participant’s Deferred Compensation Account, or portion thereof, as applicable, shall be forfeited. For this purpose, the “Latest Payment Date” shall be the latest date on which a Participant’s Deferred Compensation Account, or portion thereof, as applicable, may be paid to the Participant or the Designated Beneficiary without the imposition of excise taxes and other penalties under section 409A of the Code (“409A Penalties”).

Section 7.10    Distributions to Minors and Incapacitated Individuals. If a payment hereunder is to be made to a minor or to an individual who, in the opinion of the Plan Administrator, is unable to manage his or her affairs by reason of illness, accident or mental incompetency, such payment may be made to or for the benefit of such individual in such of the following ways as the legal representative of such individual shall direct: (i) directly to any such minor individual, if in the opinion of such legal representative, such individual is able to manage his or her affairs, (ii) to such legal representative, (iii) to a custodian under a Uniform Gifts to Minors Act for any such minor individual, or (iv) to some near relative of any such individual to be used for the latter’s benefit. Neither the Plan Administrator nor any Employer shall be required to see to the application by any third party other than the legal representative of an individual of any payment made to or for the benefit of such individual pursuant to this Section. Any payment so made shall be in complete discharge of this Plan’s obligations to such individual.

Section 7.11    Successors. This Plan is binding on all persons entitled to benefits hereunder and their heirs and legal representatives and on the Employers and their successors.

Section 7.12    Election Form Subject to Plan. An Election Form is subject to the provisions of the Plan and shall be interpreted in accordance therewith. In the event of any inconsistency between the terms of an Election Form and the terms of the Plan, the terms of the Plan shall govern.

Section 7.13    Severability. If any provision of this Plan shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the remaining provisions of this Plan, and this Plan shall be construed and enforced as if the invalid or unenforceable provision had never been set forth herein.

Section 7.14    Section 409A of the Code. This Plan is intended to comply with section 409A of the Code and shall be interpreted and construed in a manner that avoids 409A Penalties. In the event the terms of this Plan do not comply with section 409A of the Code, the Company shall amend the terms of this Plan to avoid 409A Penalties, to the extent possible. Notwithstanding the foregoing, under no circumstance shall the Employers be responsible for any 409A Penalties, interest or other losses or expenses incurred by a Participant or other person due to any failure to comply with section 409A of the Code.

Section 7.15    Clawback. To the maximum extent permitted under applicable law, a Participant’s Deferred Compensation Account and any amounts distributed with respect to a Participant’s Deferred Compensation Account are subject to forfeiture, recovery by the Company or other action pursuant to any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

ARTICLE 8

Amendment or Termination

Section 8.1    Amendment. The Company shall have the right to amend the Plan at any time and for any reason by action of the Top Human Resources Officer in his or her sole discretion. In no event shall any amendment reduce the amount credited to a Participant’s Deferred Compensation Account.

Section 8.2    Termination. The Plan may be terminated at any time and for any reason by action of the Top Human Resources Officer in his or her sole discretion. Upon a termination of the Plan, all Deferred Compensation Accounts shall be paid to Participants and Designated Beneficiaries pursuant to the terms of the Plan and the Participant elections hereunder. Notwithstanding the foregoing, to the extent consistent with the rules relating to plan termination and liquidation under section 409A of the Code, the Top Human Resources Officer may provide that following the termination of the Plan, each Participant or Designated Beneficiary shall receive a single sum payment in cash equal to the balance of his or her Deferred Compensation Account within sixty (60) days following the date that the Plan is terminated (in lieu of any other benefit which may be payable to the Participant or Designated Beneficiary under the Plan). In no event shall the amount credited to a Participant’s Deferred Compensation Account be reduced as a result of a Plan termination.

IN WITNESS WHEREOF, the Company has caused the Plan to be executed by its Top Human Resources Officer.

UNITED STATES CELLULAR CORPORATION
By:	/s/ Deirdre C. Drake
	Deirdre C. Drake
Its:	Executive Vice President - Chief People Officer
Date:	December 2, 2020

EX-31.1

Exhibit 31.1

Certification of principal executive officer

I, Laurent C. Therivel, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of United States Cellular Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a.    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 6, 2021

/s/ Laurent C. Therivel

Laurent C. Therivel

President and Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

Certification ofprincipal financialofficer

I, Douglas W. Chambers, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of United States Cellular Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a.    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 6, 2021

/s/ Douglas W. Chambers

Douglas W. Chambers
Executive Vice President, Chief Financial Officer and Treasurer
(principal financial officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, Laurent C. Therivel, the principal executive officer of United States Cellular Corporation, certify that (i) the quarterly report on Form 10-Q for the first quarter of 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of United States Cellular Corporation.

/s/ Laurent C. Therivel

Laurent C. Therivel

May 6, 2021

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to United States Cellular Corporation and will be retained by United States Cellular Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, Douglas W. Chambers, the principal financial officer of United States Cellular Corporation, certify that (i) the quarterly report on Form 10-Q for the first quarter of 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of United States Cellular Corporation.

/s/ Douglas W. Chambers

Douglas W. Chambers

May 6, 2021

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to United States Cellular Corporation and will be retained by United States Cellular Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information	3 Months Ended
	Mar. 31, 2021 shares
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-09712
Entity Registrant Name	UNITED STATES CELLULAR CORPORATION
Entity Central Index Key	0000821130
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	62-1147325
Entity Address, Address Line One	8410 West Bryn Mawr
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60631
City Area Code	(773)
Local Phone Number	399-8900
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Smaller Reporting Company	false
Emerging Growth Company	false
Entity Shell Company	false
Common Shares
Title of 12(b) Security	Common Shares, $1 par value
Trading Symbol	USM
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding	53,051,700
6.95% Senior Notes
Title of 12(b) Security	6.95% Senior Notes due 2060
Trading Symbol	UZA
Security Exchange Name	NYSE
7.25% 2063 Senior Notes
Title of 12(b) Security	7.25% Senior Notes due 2063
Trading Symbol	UZB
Security Exchange Name	NYSE
7.25% 2064 Senior Notes
Title of 12(b) Security	7.25% Senior Notes due 2064
Trading Symbol	UZC
Security Exchange Name	NYSE
6.25% Senior Notes
Title of 12(b) Security	6.25% Senior Notes due 2069
Trading Symbol	UZD
Security Exchange Name	NYSE
5.5% Senior Notes
Title of 12(b) Security	5.50% Senior Notes due 2070
Trading Symbol	UZE
Security Exchange Name	NYSE
Series A Common Shares
Entity Common Stock, Shares Outstanding	33,005,900

XML

Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating revenues
Total operating revenues	$ 1,023	$ 963
Operating expenses
Selling, general and administrative	305	335
Depreciation, amortization and accretion	170	177
(Gain) loss on asset disposals, net	5	4
(Gain) loss on sale of business and other exit costs, net	(1)	0
Total operating expenses	939	913
Operating income	84	50
Investment and other income (expense)
Equity in earnings of unconsolidated entities	42	45
Interest and dividend income	2	4
Interest expense	(39)	(24)
Other, net	0	1
Total investment and other income	5	26
Income before income taxes	89	76
Income tax expense	27	4
Net income	62	72
Less: Net income attributable to noncontrolling interests, net of tax	2	1
Net income attributable to UScellular shareholders	$ 60	$ 71
Basic weighted average shares outstanding (in shares)	86	86
Basic earnings per share attributable to UScellular shareholders (USD per share)	$ 0.70	$ 0.82
Diluted weighted average shares outstanding (in shares)	88	88
Diluted earnings per share attributable to UScellular shareholders (in shares)	$ 0.69	$ 0.81
Service
Operating revenues
Total operating revenues	$ 771	$ 762
Operating expenses
Cost of equipment sold	185	180
Equipment sales
Operating revenues
Total operating revenues	252	201
Operating expenses
Cost of equipment sold	$ 275	$ 217

XML

Consolidated Statement of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities
Net income	$ 62	$ 72
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities
Depreciation, amortization and accretion	170	177
Bad debts expense	7	33
Stock-based compensation expense	6	7
Deferred income taxes, net	23	52
Equity in earnings of unconsolidated entities	(42)	(45)
Distributions from unconsolidated entities	22	24
(Gain) loss on asset disposals, net	5	4
(Gain) loss on sale of business and other exit costs, net	(1)	0
Other operating activities	(1)	0
Changes in assets and liabilities from operations
Accounts receivable	4	55
Equipment installment plans receivable	(18)	23
Inventory	7	(50)
Accounts payable	(86)	97
Customer deposits and deferred revenues	7	(10)
Accrued taxes	3	(49)
Accrued interest	9	9
Other assets and liabilities	(53)	(57)
Net cash provided by operating activities	124	342
Cash flows from investing activities
Cash paid for additions to property, plant and equipment	(133)	(315)
Cash paid for licenses	(1,256)	(26)
Cash paid for investments	0	(1)
Cash received from divestitures and exchanges	1	0
Net cash used in investing activities	(1,388)	(342)
Cash flows from financing activities
Issuance of long-term debt	492	0
Repayment of long-term debt	0	(2)
Common Shares reissued for benefit plans, net of tax payments	(1)	0
Repurchase of Common Shares	(2)	(21)
Payment of debt issuance costs	(1)	(1)
Distributions to noncontrolling interests	(1)	(1)
Other financing activities	(2)	1
Net cash provided by (used in) financing activities	485	(24)
Net decrease in cash, cash equivalents and restricted cash	(779)	(24)
Cash, cash equivalents and restricted cash
Beginning of period	1,291	291
End of period	$ 512	$ 267

XML

Consolidated Balance Sheet - USD ($) $ in Millions		Mar. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents		$ 479	$ 1,271
Short-term investments		3	3
Accounts receivable
Customers and agents, less allowances of $56 and $62, respectively		900	915
Roaming		9	13
Other, less allowances of $2 and $1, respectively		85	70
Inventory, net		139	146
Prepaid expenses		63	51
Income taxes receivable		124	125
Other current assets		43	29
Total current assets		1,845	2,623
Assets held for sale		1	2
Licenses		3,915	2,629
Investments in unconsolidated entities		455	435
Property, plant and equipment
In service and under construction		8,823	8,785
Less: Accumulated depreciation and amortization		6,404	6,319
Property, plant and equipment, net		2,419	2,466
Operating lease right-of-use assets		933	924
Other assets and deferred charges		580	602
Total assets	[1]	10,148	9,681
Current liabilities
Current portion of long-term debt		2	2
Accounts payable
Affiliated		6	10
Trade		276	377
Customer deposits and deferred revenues		158	151
Accrued taxes		47	48
Accrued compensation		40	82
Short-term operating lease liabilities		120	116
Other current liabilities		90	85
Total current liabilities		739	871
Liabilities held for sale		0	1
Deferred liabilities and credits
Deferred income tax liability, net		656	633
Long-term operating lease liabilities		879	875
Other deferred liabilities and credits		393	376
Long-term debt, net		2,981	2,489
Commitments and contingencies
Noncontrolling interests with redemption features		10	10
UScellular shareholders’ equity
Series A Common and Common Shares Authorized 190 shares (50 Series A Common and 140 Common Shares) Issued 88 shares (33 Series A Common and 55 Common Shares) Outstanding 86 shares (33 Series A Common and 53 Common Shares) Par Value ($1.00 per share) ($33 Series A Common and $55 Common Shares)		88	88
Additional paid-in capital		1,657	1,651
Treasury shares, at cost, 2 Common Shares		(66)	(67)
Retained earnings		2,796	2,739
Total UScellular shareholders' equity		4,475	4,411
Noncontrolling interests		15	15
Total equity		4,490	4,426
Total liabilities and equity	[1]	$ 10,148	$ 9,681

[1] The consolidated total assets as of March 31, 2021 and December 31, 2020, include assets held by consolidated variable interest entities (VIEs) of $1,263 million and $1,060 million, respectively, which are not available to be used to settle the obligations of UScellular. The consolidated total liabilities as of March 31, 2021 and December 31, 2020, include certain liabilities of consolidated VIEs of $19 million and $20 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 10 — Variable Interest Entities for additional information.

XML

Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions		Mar. 31, 2021	Dec. 31, 2020
Accounts receivable
Customer and agent allowances		$ 56	$ 62
Other allowances		$ 2	$ 1
UScellular shareholders’ equity
Authorized shares (in shares)		190,000,000	190,000,000
Issued shares (in shares)		88,000,000	88,000,000
Outstanding shares (in shares)		86,000,000	86,000,000
Par value		$ 88	$ 88
Variable Interest Entities VIEs
Total assets	[1]	$ 10,148	$ 9,681
Series A Common Shares
UScellular shareholders’ equity
Authorized shares (in shares)		50,000,000	50,000,000
Issued shares (in shares)		33,000,000	33,000,000
Outstanding shares (in shares)		33,000,000	33,000,000
Par value per share (USD per share)		$ 1.00	$ 1.00
Par value		$ 33	$ 33
Common Shares
UScellular shareholders’ equity
Authorized shares (in shares)		140,000,000	140,000,000
Issued shares (in shares)		55,000,000	55,000,000
Outstanding shares (in shares)		53,000,000	53,000,000
Par value per share (USD per share)		$ 1.00	$ 1.00
Par value		$ 55	$ 55
Treasury shares (in shares)		2,000,000	2,000,000
Consolidated Variable Interest Entities
Variable Interest Entities VIEs
Total assets		$ 1,851	$ 1,821
Total liabilities		85	84
Consolidated Variable Interest Entities | No recourse
Variable Interest Entities VIEs
Total liabilities		19	20
Consolidated Variable Interest Entities | Assets held
Variable Interest Entities VIEs
Total assets		$ 1,263	$ 1,060

[1] The consolidated total assets as of March 31, 2021 and December 31, 2020, include assets held by consolidated variable interest entities (VIEs) of $1,263 million and $1,060 million, respectively, which are not available to be used to settle the obligations of UScellular. The consolidated total liabilities as of March 31, 2021 and December 31, 2020, include certain liabilities of consolidated VIEs of $19 million and $20 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 10 — Variable Interest Entities for additional information.

XML

Consolidated Statement of Changes in Equity - USD ($) $ in Millions	Total	Series A Common and Common shares	Additional paid-in capital	Treasury shares	Retained earnings	Total UScellular shareholders' equity	Noncontrolling interests
Beginning balance at Dec. 31, 2019	$ 4,210	$ 88	$ 1,629	$ (70)	$ 2,550	$ 4,197	$ 13
Net income attributable to UScellular shareholders	71				71	71
Repurchase of Common Shares	(23)			(23)		(23)
Incentive and compensation plans	7		7	1	(1)	7
Distributions to noncontrolling interests	(1)					0	(1)
Ending balance at Mar. 31, 2020	4,264	88	1,636	(92)	2,620	4,252	12
Beginning balance at Dec. 31, 2020	4,426	88	1,651	(67)	2,739	4,411	15
Net income attributable to UScellular shareholders	60				60	60
Net income attributable to noncontrolling interests classified as equity	1					0	1
Repurchase of Common Shares	(2)			(2)		(2)
Incentive and compensation plans	6		6	3	(3)	6
Distributions to noncontrolling interests	(1)					0	(1)
Ending balance at Mar. 31, 2021	$ 4,490	$ 88	$ 1,657	$ (66)	$ 2,796	$ 4,475	$ 15

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Note 1 Basis of Presentation

United States Cellular Corporation (UScellular), a Delaware Corporation, is an 82%-owned subsidiary of Telephone and Data Systems, Inc. (TDS).

The accounting policies of UScellular conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of UScellular, subsidiaries in which it has a controlling financial interest, general partnerships in which UScellular has a majority partnership interest and certain entities in which UScellular has a variable interest that requires consolidation under GAAP. Intercompany accounts and transactions have been eliminated.

The unaudited consolidated financial statements included herein have been prepared by UScellular pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, UScellular believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in UScellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2020.

The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of UScellular’s financial position as of March 31, 2021 and December 31, 2020 and its results of operations, cash flows and changes in equity for the three months ended March 31, 2021 and 2020. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2021 and 2020, equaled net income. These results are not necessarily indicative of the results to be expected for the full year. UScellular has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2020.

Restricted Cash

UScellular presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Cash and cash equivalents	$	479	$	1,271
Restricted cash included in Other current assets	33		20
Cash, cash equivalents and restricted cash in the statement of cash flows	$	512	$	1,291

XML

Revenue Recognition

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 2 Revenue Recognition

Disaggregation of Revenue

In the following table, UScellular's revenues are disaggregated by type of service, which represents the relevant categorization of revenues for UScellular, and timing of recognition. Service revenues are recognized over time and Equipment sales are point in time.  

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Revenues from contracts with customers:
Retail service	$	685	$	671
Inbound roaming	28		37
Other service	38		35
Service revenues from contracts with customers	751		743
Equipment sales	252		201
Total revenues from contracts with customers	1,003		944
Operating lease income	20		19
Total operating revenues	$	1,023	$	963

Contract Balances

The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Contract assets	$	11	$	10
Contract liabilities	$	185	$	171

Revenue recognized related to contract liabilities existing at January 1, 2021 was $97 million for the three months ended March 31, 2021.

Transaction price allocated to the remaining performance obligations

The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when wireless services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2021 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. 

	Service Revenues
(Dollars in millions)
Remainder of 2021	$	209
2022	112
Thereafter	128
Total	$	449

Contract Cost Assets

UScellular expects that commission fees paid as a result of obtaining contracts are recoverable and therefore UScellular defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. The contract cost asset balance related to commission fees and other costs was $123 million at March 31, 2021, and $124 million at December 31, 2020, and was recorded in Other assets and deferred charges in the Consolidated Balance Sheet. Deferred commission fees are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Amortization of contract cost assets was $25 million and $27 million for the three months ended March 31, 2021 and 2020, respectively, and was included in Selling, general and administrative expenses.

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 3 Fair Value Measurements

As of March 31, 2021 and December 31, 2020, UScellular did not have any material financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP.

The provisions of GAAP establish a fair value hierarchy that contains three levels for inputs used in fair value measurements. Level 1 inputs include quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets and liabilities in inactive markets. Level 3 inputs are unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. A financial instrument’s level within the fair value hierarchy is not representative of its expected performance or its overall risk profile and, therefore, Level 3 assets are not necessarily higher risk than Level 2 assets or Level 1 assets.

UScellular has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below.

	Level within the Fair Value Hierarchy	March 31, 2021				December 31, 2020
		Book Value		Fair Value		Book Value		Fair Value
(Dollars in millions)
Long-term debt
Retail	2	$	1,917	$	1,963	$	1,917	$	1,962
Institutional	2	535		661		535		707
Other	2	598		598		106		106

Long-term debt excludes lease obligations, the current portion of Long-term debt and debt financing costs. The fair value of “Retail” Long-term debt was estimated using market prices for the 7.25% 2063 Senior Notes, 7.25% 2064 Senior Notes, 6.95% Senior Notes, 6.25% Senior Notes and 5.5% Senior Notes. UScellular’s “Institutional” debt consists of the 6.7% Senior Notes which are traded over the counter. UScellular’s “Other” debt consists of a senior term loan credit agreement and receivables securitization agreement. UScellular estimated the fair value of its Institutional and Other debt through a discounted cash flow analysis using the interest rates or estimated yield to maturity for each borrowing, which ranged from 1.31% to 4.48% and 1.35% to 3.75% at March 31, 2021 and December 31, 2020, respectively.

The fair values of Cash and cash equivalents, restricted cash and Short-term investments approximate their book values due to the short-term nature of these financial instruments.

XML

Equipment Installment Plans

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Equipment Installment Plans

Note 4 Equipment Installment Plans

UScellular sells devices to customers under equipment installment plans over a specified time period. For certain equipment installment plans, after a specified period of time or amount of payments, the customer may have the right to upgrade to a new device and have the remaining unpaid equipment installment contract balance waived, subject to certain conditions, including trading in the original device in good working condition and signing a new equipment installment contract.

The following table summarizes equipment installment plan receivables.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Equipment installment plan receivables, gross	$	1,013	$	1,007
Allowance for credit losses	(72)		(78)
Equipment installment plan receivables, net	$	941	$	929
Net balance presented in the Consolidated Balance Sheet as:
Accounts receivable — Customers and agents (Current portion)	$	596	$	590
Other assets and deferred charges (Non-current portion)	345		339
Equipment installment plan receivables, net	$	941	$	929

UScellular uses various inputs, including internal data, information from credit bureaus and other sources, to evaluate the credit profiles of its customers. From this evaluation, a credit class is assigned to the customer that determines the number of eligible lines, the amount of credit available, and the down payment requirement, if any. These credit classes are grouped into four credit categories: lowest risk, lower risk, slight risk and higher risk. A customer's assigned credit class is reviewed periodically and a change is made, if appropriate. An equipment installment plan billed amount is considered past due if not paid within 30 days. The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows:

	March 31, 2021										December 31, 2020
	Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total		Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total
(Dollars in millions)
Unbilled	$	826	$	99	$	24	$	8	$	957	$	819	$	98	$	22	$	9	$	948
Billed — current	35		5		1		1		42		36		5		1		1		43
Billed — past due	7		4		2		1		14		8		5		2		1		16
Total	$	868	$	108	$	27	$	10	$	1,013	$	863	$	108	$	25	$	11	$	1,007

The balance of the equipment installment plan receivables as of March 31, 2021 on a gross basis by year of origination were as follows:

	2018		2019		2020		2021		Total
(Dollars in millions)
Lowest Risk	$	15	$	202	$	484	$	167	$	868
Lower Risk	1		18		61		28		108
Slight Risk	1		3		12		11		27
Higher Risk	—		1		5		4		10
Total	$	17	$	224	$	562	$	210	$	1,013

Activity for the three months ended March 31, 2021 and 2020, in the allowance for credit losses for equipment installment plan receivables was as follows:

	March 31, 2021		March 31, 2020
(Dollars in millions)
Allowance for credit losses, beginning of period	$	78	$	84
Bad debts expense	3		25
Write-offs, net of recoveries	(9)		(19)
Allowance for credit losses, end of period	$	72	$	90

XML

Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 5 Income Taxes

The effective tax rate on Income before income taxes for the three months ended March 31, 2021 and 2020, was 30.4% and 5.0%, respectively. The higher effective tax rate in 2021 as compared to 2020 is due primarily to the income tax benefits of the CARES Act included in the 2020 tax rate, which do not recur as benefits in the 2021 tax rate.

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Note 6 Earnings Per Share

Basic earnings per share attributable to UScellular shareholders is computed by dividing Net income attributable to UScellular shareholders by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share attributable to UScellular shareholders is computed by dividing Net income attributable to UScellular shareholders by the weighted average number of Common Shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon the exercise of outstanding stock options and the vesting of performance and restricted stock units.

The amounts used in computing basic and diluted earnings per share attributable to UScellular shareholders were as follows:

	Three Months Ended March 31,
	2021		2020
(Dollars and shares in millions, except per share amounts)
Net income attributable to UScellular shareholders	$	60	$	71
Weighted average number of shares used in basic earnings per share	86		86
Effects of dilutive securities	2		2
Weighted average number of shares used in diluted earnings per share	88		88
Basic earnings per share attributable to UScellular shareholders	$	0.70	$	0.82
Diluted earnings per share attributable to UScellular shareholders	$	0.69	$	0.81

Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in weighted average diluted shares outstanding for the calculation of Diluted earnings per share attributable to UScellular shareholders because their effects were antidilutive. The number of such Common Shares excluded was less than 1 million and 1 million for the three months ended March 31, 2021 and 2020, respectively.

XML

Intangible Assets

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 7 Intangible Assets

Activity related to Licenses for the three months ended March 31, 2021, is presented below:

	Licenses
(Dollars in millions)
Balance at December 31, 2020	$	2,629
Acquisitions	1,283
Capitalized interest	3
Balance at March 31, 2021	$	3,915

In February 2021, the FCC announced by way of public notice that UScellular was the provisional winning bidder for 254 wireless spectrum licenses in the 3.7-3.98 GHz bands (Auction 107) for $1,283 million. UScellular paid $30 million of this amount in 2020 and the remainder in March 2021. Additionally, UScellular expects to capitalize costs of approximately $178 million related to the estimated relocation costs and accelerated relocation incentive payments. The wireless spectrum licenses from Auction 107 are expected to be granted by the FCC in 2021. The spectrum must be cleared by incumbent providers before UScellular can access it. UScellular does not expect to have access to this spectrum until late 2023.

XML

Investments in Unconsolidated Entities

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Entities

Note 8 Investments in Unconsolidated Entities

Investments in unconsolidated entities consist of amounts invested in entities in which UScellular holds a noncontrolling interest. UScellular’s Investments in unconsolidated entities are accounted for using either the equity method or measurement alternative method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Equity method investments	$	447	$	428
Measurement alternative method investments	8		7
Total investments in unconsolidated entities	$	455	$	435

The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of UScellular’s equity method investments.

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Revenues	$	1,727	$	1,657
Operating expenses	1,275		1,162
Operating income	452		495
Other income (expense), net	12		3
Net income	$	464	$	498

XML

Debt

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Debt

Note 9 Debt

Term Loan Agreement

The following table summarizes the term loan credit agreement as of March 31, 2021:

(Dollars in millions)
Maximum borrowing capacity	$	300
Amount borrowed	$	300
Amount available for use	$	—

Borrowings under the term loan bear interest at a rate of LIBOR plus 2.25%. Principal reductions are due and payable in quarterly installments of $0.75 million beginning in September 2021. The remaining unpaid balance will be due and payable in June 2027.

UScellular believes that it was in compliance with all of the financial covenants and other requirements set forth in its senior term loan credit agreement as of March 31, 2021.

Receivables Securitization Agreement

At March 31, 2021, UScellular had a receivables securitization agreement for securitized borrowings using its equipment installment receivables for general corporate purposes. Amounts under the receivables securitization agreement may be borrowed, repaid and reborrowed from time to time until maturity in December 2022, which may be extended from time to time as specified therein. The outstanding borrowings bear interest at floating rates. In March 2021, UScellular borrowed $275 million under its receivables securitization agreement. As of March 31, 2021, UScellular has borrowed the full amount available under the receivables securitization agreement of $300 million. UScellular believes that it was in compliance with all of the financial covenants and other requirements set forth in its receivables securitization agreement as of March 31, 2021. As of March 31, 2021, the USCC Master Note Trust held $446 million of assets available to be pledged as collateral for the receivables securitization agreement.

Other Long-Term Debt

In April 2021, UScellular announced that it will redeem its outstanding $275 million of 7.25% Senior Notes due 2063. At time of redemption, $9 million of interest expense will be recorded related to unamortized debt issuance costs related to the notes. The notes are expected to be redeemed on May 12, 2021, at a redemption price of 100% of the principal amount, including accrued and unpaid interest to the redemption date.

XML

Variable Interest Entities

3 Months Ended

Mar. 31, 2021

Variable Interest Entities [Abstract]

Variable Interest Entities

Note 10 Variable Interest Entities

Consolidated VIEs

UScellular consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. UScellular reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and UScellular’s Form 10-K for the year ended December 31, 2020.

UScellular formed USCC EIP LLC (Seller/Sub-Servicer), USCC Receivables Funding LLC (Transferor) and the USCC Master Note Trust (Trust), collectively the special purpose entities (SPEs), to facilitate a securitized borrowing using its equipment installment plan receivables. Under a Receivables Sale Agreement, UScellular wholly-owned, majority-owned and unconsolidated entities, collectively referred to as “affiliated entities”, transfer device equipment installment plan contracts to the Seller/Sub-Servicer. The Seller/Sub-Servicer aggregates device equipment installment plan contracts, and performs servicing, collection and all other administrative activities related to accounting for the equipment installment plan contracts. The Seller/Sub-Servicer sells the eligible equipment installment plan receivables to the Transferor, a bankruptcy remote entity, which subsequently sells the receivables to the Trust. The Trust, which is bankruptcy remote and isolated from the creditors of UScellular, will be responsible for issuing asset-backed variable funding notes (Notes), which are collateralized by the equipment installment plan receivables owned by the Trust. Given that UScellular has the power to direct the activities of these SPEs, and that these SPEs lack sufficient equity to finance their activities, UScellular is deemed to have a controlling financial interest in the SPEs and, therefore, consolidates them. All transactions with third parties (e.g., issuance of the asset-backed variable funding notes) will be accounted for as a secured borrowing due to the pledging of equipment installment plan contracts as collateral, significant continuing involvement in the transferred assets, subordinated interests of the cash flows, and continued evidence of control of the receivables. 

The following VIEs were formed to participate in FCC auctions of wireless spectrum licenses and to fund, establish, and provide wireless service with respect to any FCC wireless spectrum licenses won in the auctions:

▪Advantage Spectrum, L.P. (Advantage Spectrum) and Sunshine Spectrum, Inc., the general partner of Advantage Spectrum; and

▪King Street Wireless, L.P. (King Street Wireless) and King Street Wireless, Inc., the general partner of King Street Wireless.

These particular VIEs are collectively referred to as designated entities. The power to direct the activities that most significantly impact the economic performance of these VIEs is shared. Specifically, the general partner of these VIEs has the exclusive right to manage, operate and control the limited partnerships and make all decisions to carry on the business of the partnerships. The general partner of each partnership needs the consent of the limited partner, an indirect UScellular subsidiary, to sell or lease certain wireless spectrum licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of these VIEs is shared, UScellular has the most significant level of exposure to the variability associated with the economic performance of the VIEs, indicating that UScellular is the primary beneficiary of the VIEs. Therefore, in accordance with GAAP, these VIEs are consolidated.

UScellular also consolidates other VIEs that are limited partnerships that provide wireless service. A limited partnership is a variable interest entity unless the limited partners hold substantive participating rights or kick-out rights over the general partner. For certain limited partnerships, UScellular is the general partner and manages the operations. In these partnerships, the limited partners do not have substantive kick-out or participating rights and, further, such limited partners do not have the authority to remove the general partner. Therefore, these limited partnerships also are recognized as VIEs and are consolidated under the variable interest model.

The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in UScellular’s Consolidated Balance Sheet.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Assets
Cash and cash equivalents	$	22	$	18
Short-term investments	3		3
Accounts receivable	644		639
Inventory, net	3		3
Other current assets	34		21
Licenses	639		639
Property, plant and equipment, net	110		111
Operating lease right-of-use assets	42		39
Other assets and deferred charges	354		348
Total assets	$	1,851	$	1,821
Liabilities
Current liabilities	$	27	$	28
Long-term operating lease liabilities	37		36
Other deferred liabilities and credits	21		20
Total liabilities	$	85	$	84

Unconsolidated VIEs

UScellular manages the operations of and holds a variable interest in certain other limited partnerships, but is not the primary beneficiary of these entities and, therefore, does not consolidate them under the variable interest model.

UScellular’s total investment in these unconsolidated entities was $5 million at both March 31, 2021 and December 31, 2020, and is included in Investments in unconsolidated entities in UScellular’s Consolidated Balance Sheet. The maximum exposure from unconsolidated VIEs is limited to the investment held by UScellular in those entities. 

Other Related Matters

UScellular made contributions, loans or advances to its VIEs totaling $30 million and $69 million, during the three months ended March 31, 2021 and 2020, respectively, of which $10 million in 2021 and $55 million in 2020, are related to USCC EIP LLC as discussed above. UScellular may agree to make additional capital contributions and/or advances to these or other VIEs and/or to their general partners to provide additional funding for operations or the development of wireless spectrum licenses granted in various auctions. UScellular may finance such amounts with a combination of cash on hand, borrowings under its revolving credit or receivables securitization agreements and/or other long-term debt. There is no assurance that UScellular will be able to obtain additional financing on commercially reasonable terms or at all to provide such financial support.

The limited partnership agreement of Advantage Spectrum also provides the general partner with a put option whereby the general partner may require the limited partner, a subsidiary of UScellular, to purchase its interest in the limited partnership. The general partner’s put option related to its interest in Advantage Spectrum will be exercisable in the third quarter of 2021, and if not exercised at that time, will be exercisable in 2022. The greater of the carrying value of the general partner's investment or the value of the put option, net of any borrowings due to UScellular, is recorded as Noncontrolling interests with redemption features in UScellular’s Consolidated Balance Sheet. Also in accordance with GAAP, minority share of income or changes in the redemption value of the put option, net of interest accrued on the loans, are recorded as a component of Net income attributable to noncontrolling interests, net of tax, in UScellular’s Consolidated Statement of Operations.

XML

Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

The accounting policies of UScellular conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of UScellular, subsidiaries in which it has a controlling financial interest, general partnerships in which UScellular has a majority partnership interest and certain entities in which UScellular has a variable interest that requires consolidation under GAAP. Intercompany accounts and transactions have been eliminated.

Basis of Accounting

The unaudited consolidated financial statements included herein have been prepared by UScellular pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, UScellular believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in UScellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2020.

The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of UScellular’s financial position as of March 31, 2021 and December 31, 2020 and its results of operations, cash flows and changes in equity for the three months ended March 31, 2021 and 2020. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2021 and 2020, equaled net income. These results are not necessarily indicative of the results to be expected for the full year. UScellular has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2020.

Revenue from Contract with Customer

As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. UScellular expects that commission fees paid as a result of obtaining contracts are recoverable and therefore UScellular defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred.Deferred commission fees are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term.

Variable Interest Entities

UScellular consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. UScellular reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and UScellular’s Form 10-K for the year ended December 31, 2020.

XML

Basis of Presentation (Tables)

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Reconciliation of cash, cash equivalents and restricted cash

The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Cash and cash equivalents	$	479	$	1,271
Restricted cash included in Other current assets	33		20
Cash, cash equivalents and restricted cash in the statement of cash flows	$	512	$	1,291

XML

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

In the following table, UScellular's revenues are disaggregated by type of service, which represents the relevant categorization of revenues for UScellular, and timing of recognition. Service revenues are recognized over time and Equipment sales are point in time.  

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Revenues from contracts with customers:
Retail service	$	685	$	671
Inbound roaming	28		37
Other service	38		35
Service revenues from contracts with customers	751		743
Equipment sales	252		201
Total revenues from contracts with customers	1,003		944
Operating lease income	20		19
Total operating revenues	$	1,023	$	963

Contract with Customer, Assets and Liabilities

The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Contract assets	$	11	$	10
Contract liabilities	$	185	$	171

Remaining Performance Obligations

The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when wireless services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2021 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. 

	Service Revenues
(Dollars in millions)
Remainder of 2021	$	209
2022	112
Thereafter	128
Total	$	449

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair value measurements

UScellular has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below.

	Level within the Fair Value Hierarchy	March 31, 2021				December 31, 2020
		Book Value		Fair Value		Book Value		Fair Value
(Dollars in millions)
Long-term debt
Retail	2	$	1,917	$	1,963	$	1,917	$	1,962
Institutional	2	535		661		535		707
Other	2	598		598		106		106

XML

Equipment Installment Plans (Tables)

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Equipment installment plan receivables

The following table summarizes equipment installment plan receivables.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Equipment installment plan receivables, gross	$	1,013	$	1,007
Allowance for credit losses	(72)		(78)
Equipment installment plan receivables, net	$	941	$	929
Net balance presented in the Consolidated Balance Sheet as:
Accounts receivable — Customers and agents (Current portion)	$	596	$	590
Other assets and deferred charges (Non-current portion)	345		339
Equipment installment plan receivables, net	$	941	$	929

Equipment installment plan receivables credit categories

The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows:

	March 31, 2021										December 31, 2020
	Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total		Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total
(Dollars in millions)
Unbilled	$	826	$	99	$	24	$	8	$	957	$	819	$	98	$	22	$	9	$	948
Billed — current	35		5		1		1		42		36		5		1		1		43
Billed — past due	7		4		2		1		14		8		5		2		1		16
Total	$	868	$	108	$	27	$	10	$	1,013	$	863	$	108	$	25	$	11	$	1,007

The balance of the equipment installment plan receivables as of March 31, 2021 on a gross basis by year of origination were as follows:

	2018		2019		2020		2021		Total
(Dollars in millions)
Lowest Risk	$	15	$	202	$	484	$	167	$	868
Lower Risk	1		18		61		28		108
Slight Risk	1		3		12		11		27
Higher Risk	—		1		5		4		10
Total	$	17	$	224	$	562	$	210	$	1,013

Equipment installment plans allowance for credit losses

Activity for the three months ended March 31, 2021 and 2020, in the allowance for credit losses for equipment installment plan receivables was as follows:

	March 31, 2021		March 31, 2020
(Dollars in millions)
Allowance for credit losses, beginning of period	$	78	$	84
Bad debts expense	3		25
Write-offs, net of recoveries	(9)		(19)
Allowance for credit losses, end of period	$	72	$	90

XML

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Earnings per share

The amounts used in computing basic and diluted earnings per share attributable to UScellular shareholders were as follows:

	Three Months Ended March 31,
	2021		2020
(Dollars and shares in millions, except per share amounts)
Net income attributable to UScellular shareholders	$	60	$	71
Weighted average number of shares used in basic earnings per share	86		86
Effects of dilutive securities	2		2
Weighted average number of shares used in diluted earnings per share	88		88
Basic earnings per share attributable to UScellular shareholders	$	0.70	$	0.82
Diluted earnings per share attributable to UScellular shareholders	$	0.69	$	0.81

XML

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Licenses

Activity related to Licenses for the three months ended March 31, 2021, is presented below:

	Licenses
(Dollars in millions)
Balance at December 31, 2020	$	2,629
Acquisitions	1,283
Capitalized interest	3
Balance at March 31, 2021	$	3,915

XML

Investments in Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity and measurement alternative method investments

UScellular’s Investments in unconsolidated entities are accounted for using either the equity method or measurement alternative method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Equity method investments	$	447	$	428
Measurement alternative method investments	8		7
Total investments in unconsolidated entities	$	455	$	435

The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of UScellular’s equity method investments.

	Three Months Ended March 31,
	2021		2020
(Dollars in millions)
Revenues	$	1,727	$	1,657
Operating expenses	1,275		1,162
Operating income	452		495
Other income (expense), net	12		3
Net income	$	464	$	498

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Term loan

The following table summarizes the term loan credit agreement as of March 31, 2021:

(Dollars in millions)
Maximum borrowing capacity	$	300
Amount borrowed	$	300
Amount available for use	$	—

XML

Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2021

Variable Interest Entities [Abstract]

Consolidated VIE assets and liabilities

The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in UScellular’s Consolidated Balance Sheet.

	March 31, 2021		December 31, 2020
(Dollars in millions)
Assets
Cash and cash equivalents	$	22	$	18
Short-term investments	3		3
Accounts receivable	644		639
Inventory, net	3		3
Other current assets	34		21
Licenses	639		639
Property, plant and equipment, net	110		111
Operating lease right-of-use assets	42		39
Other assets and deferred charges	354		348
Total assets	$	1,851	$	1,821
Liabilities
Current liabilities	$	27	$	28
Long-term operating lease liabilities	37		36
Other deferred liabilities and credits	21		20
Total liabilities	$	85	$	84

XML

Basis of Presentation - Narrative (Details)	Mar. 31, 2021
TDS | UScellular
Basis of Presentation [Line Items]
Ownership percentage	82.00%

XML

Basis of Presentation - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 479	$ 1,271
Restricted cash included in Other current assets	33	20
Cash, cash equivalents and restricted cash in the statement of cash flows	$ 512	$ 1,291	$ 267	$ 291

XML

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of revenue
Revenue from contracts with customers	$ 1,003	$ 944
Operating lease income	20	19
Total operating revenues	1,023	963
Transferred over time
Disaggregation of revenue
Revenue from contracts with customers	751	743
Transferred over time | Retail service
Disaggregation of revenue
Revenue from contracts with customers	685	671
Transferred over time | Inbound roaming
Disaggregation of revenue
Revenue from contracts with customers	28	37
Transferred over time | Other service
Disaggregation of revenue
Revenue from contracts with customers	38	35
Transferred at point in time | Equipment sales
Disaggregation of revenue
Revenue from contracts with customers	$ 252	$ 201

XML

Revenue Recognition - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Contract assets	$ 11	$ 10
Contract liabilities	185	$ 171
Revenue recognized	$ 97

XML

Revenue Recognition - Performance Obligations (Details) $ in Millions	Mar. 31, 2021 USD ($)
Revenue from Contract with Customer [Abstract]
Remaining performance obligation amount	$ 449
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue from Contract with Customer [Abstract]
Remaining performance obligation amount	$ 209
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of remaining performance obligation, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue from Contract with Customer [Abstract]
Remaining performance obligation amount	$ 112
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue from Contract with Customer [Abstract]
Remaining performance obligation amount	$ 128
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of remaining performance obligation, period

XML

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Capitalized Contract Cost
Contract cost asset	$ 123		$ 124
Amortization of contract cost assets	$ 25	$ 27

XML

Fair Value Measurements (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
7.25% 2063 Senior Notes
Financial Instruments
Interest rate	7.25%
7.25% 2064 Senior Notes
Financial Instruments
Interest rate	7.25%
6.95% Senior Notes
Financial Instruments
Interest rate	6.95%
6.25% Senior Notes
Financial Instruments
Interest rate	6.25%
5.5% Senior Notes
Financial Instruments
Interest rate	5.50%
6.7% Senior Notes
Financial Instruments
Interest rate	6.70%
Book Value | Retail
Financial Instruments
Long-term debt	$ 1,917	$ 1,917
Book Value | Institutional
Financial Instruments
Long-term debt	535	535
Book Value | Other
Financial Instruments
Long-term debt	598	106
Fair Value | Level 2 | Retail
Financial Instruments
Long-term debt	1,963	1,962
Fair Value | Level 2 | Institutional
Financial Instruments
Long-term debt	661	707
Fair Value | Level 2 | Other
Financial Instruments
Long-term debt	$ 598	$ 106
Interest rate | Institutional and Other | Minimum
Financial Instruments
Fair value assumption, interest rate	1.31%	1.35%
Interest rate | Institutional and Other | Maximum
Financial Instruments
Fair value assumption, interest rate	4.48%	3.75%

XML

Equipment Installment Plans - EIP Receivables (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Equipment installment plan receivables, gross	$ 1,013	$ 1,007
Allowance for credit losses	(72)	(78)
Equipment installment plan receivables, net	941	929
Accounts receivable — Customers and agents (Current portion)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Equipment installment plan receivables, net	596	590
Other assets and deferred charges (Non-current portion)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Equipment installment plan receivables, net	$ 345	$ 339

XML

Equipment Installment Plans - Gross Receivables by Credit Category (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables, gross	$ 1,013	$ 1,007
2018	17
2019	224
2020	562
2021	210
Unbilled
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	957	948
Billed
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	42	43
Equipment installment plan receivables, past due	14	16
Lowest Risk
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables, gross	868	863
2018	15
2019	202
2020	484
2021	167
Lowest Risk | Unbilled
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	826	819
Lowest Risk | Billed
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	35	36
Equipment installment plan receivables, past due	7	8
Lower Risk
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables, gross	108	108
2018	1
2019	18
2020	61
2021	28
Lower Risk | Unbilled
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	99	98
Lower Risk | Billed
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	5	5
Equipment installment plan receivables, past due	4	5
Slight Risk
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables, gross	27	25
2018	1
2019	3
2020	12
2021	11
Slight Risk | Unbilled
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	24	22
Slight Risk | Billed
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	1	1
Equipment installment plan receivables, past due	2	2
Higher Risk
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables, gross	10	11
2018	0
2019	1
2020	5
2021	4
Higher Risk | Unbilled
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	8	9
Higher Risk | Billed
Financing Receivable, Credit Quality Indicator [Line Items]
Equipment installment plan receivables	1	1
Equipment installment plan receivables, past due	$ 1	$ 1

XML

Equipment Installment Plans - Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Allowance for credit losses
Allowance for credit losses, beginning of period	$ 78
Allowance for credit losses, end of period	72
Equipment Installment Plan Receivable
Allowance for credit losses
Allowance for credit losses, beginning of period	78	$ 84
Bad debts expense	3	25
Write-offs, net of recoveries	(9)	(19)
Allowance for credit losses, end of period	$ 72	$ 90

XML

Income Taxes (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Effective tax rate	30.40%	5.00%

XML

Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Net income attributable to UScellular shareholders	$ 60	$ 71
Weighted average number of shares used in basic earnings per share (in shares)	86	86
Effects of dilutive securities (in shares)	2	2
Weighted average number of shares used in diluted earnings per share (in shares)	88	88
Basic earnings per share attributable to UScellular shareholders (USD per share)	$ 0.70	$ 0.82
Diluted earnings per share attributable to UScellular shareholders (in shares)	$ 0.69	$ 0.81

XML

Earnings Per Share - Narrative (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)		1
Maximum
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1

XML

Intangible Assets (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Licenses
Acquisitions	$ 1,283
Capitalized interest	3
Balance, end of period	$ 3,915

XML

Intangible Assets - Narrative (Details) $ in Millions		3 Months Ended		12 Months Ended
	Apr. 01, 2021 USD ($)	Mar. 31, 2021 USD ($) license	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)
Indefinite-lived Intangible Assets [Line Items]
Cash paid for licenses		$ 1,256	$ 26
Auction 107
Indefinite-lived Intangible Assets [Line Items]
Licenses won | license		254
Total winning bid		$ 1,283
FCC upfront payment				$ 30
Auction 107 | Subsequent event
Indefinite-lived Intangible Assets [Line Items]
Cash paid for licenses	$ 178

XML

Investments in Unconsolidated Entities - Schedule of Investments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Equity Method Investments and Joint Ventures [Abstract]
Equity method investments	$ 447		$ 428
Measurement alternative method investments	8		7
Total investments in unconsolidated entities	455		$ 435
Schedule of Equity Method Investments [Line Items]
Revenues	1,023	$ 963
Operating expenses	939	913
Operating income	84	50
Other income (expense), net	0	1
Net income	62	72
Equity method investments
Schedule of Equity Method Investments [Line Items]
Revenues	1,727	1,657
Operating expenses	1,275	1,162
Operating income	452	495
Other income (expense), net	12	3
Net income	$ 464	$ 498

XML

Debt - Term Loan Facility (Details) - USD ($)		3 Months Ended
	Sep. 30, 2021	Mar. 31, 2021	Mar. 31, 2020
Long-term debt
Repayment of long-term debt		$ 0	$ 2,000,000
Term loan facility
Long-term debt
Maximum borrowing capacity		300,000,000
Amount borrowed		300,000,000
Amount available for use		$ 0
Term loan facility | Subsequent event
Long-term debt
Repayment of long-term debt	$ 750,000
Term loan facility | LIBOR rate
Long-term debt
Contractual spread		2.25%

XML

Debt - Receivables Securitization Agreement (Details) - Receivables securitization agreement $ in Millions	Mar. 31, 2021 USD ($)
Debt Instrument [Line Items]
Amount borrowed	$ 275
Assets available to be pledged	446
Maximum borrowing capacity	$ 300

XML

Debt - Narrative (Details) - 7.25% 2063 Senior Notes - USD ($) $ in Millions	May 12, 2021	Mar. 31, 2021
Debt Instrument [Line Items]
Interest rate		7.25%
Subsequent event
Debt Instrument [Line Items]
Amount redeemed	$ 275
Interest rate	7.25%
Unamortized debt issuance costs	$ 9
Redemption price rate	100.00%

XML

Variable Interest Entities - Consolidated Balance Sheet (Details) - USD ($) $ in Millions		Mar. 31, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents		$ 479	$ 1,271
Short-term investments		3	3
Accounts receivable		900	915
Inventory, net		139	146
Other current assets		43	29
Licenses		3,915	2,629
Property, plant and equipment, net		2,419	2,466
Operating lease right-of-use assets		933	924
Other assets and deferred charges		580	602
Total assets	[1]	10,148	9,681
Liabilities
Current liabilities		739	871
Long-term operating lease liabilities		879	875
Other deferred liabilities and credits		393	376
Consolidated Variable Interest Entities
Assets
Cash and cash equivalents		22	18
Short-term investments		3	3
Accounts receivable		644	639
Inventory, net		3	3
Other current assets		34	21
Licenses		639	639
Property, plant and equipment, net		110	111
Operating lease right-of-use assets		42	39
Other assets and deferred charges		354	348
Total assets		1,851	1,821
Liabilities
Current liabilities		27	28
Long-term operating lease liabilities		37	36
Other deferred liabilities and credits		21	20
Total liabilities		$ 85	$ 84

[1] The consolidated total assets as of March 31, 2021 and December 31, 2020, include assets held by consolidated variable interest entities (VIEs) of $1,263 million and $1,060 million, respectively, which are not available to be used to settle the obligations of UScellular. The consolidated total liabilities as of March 31, 2021 and December 31, 2020, include certain liabilities of consolidated VIEs of $19 million and $20 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of UScellular. See Note 10 — Variable Interest Entities for additional information.

XML

Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Variable Interest Entity [Line Items]
Investments in unconsolidated entities, maximum exposure	$ 5		$ 5
Capital contributions, loans or advances	30	$ 69
USCC EIP LLC
Variable Interest Entity [Line Items]
Capital contributions, loans or advances	$ 10	$ 55