Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income taxes receivable (payable)

UScellular’s current income taxes balances at December 31, 2024 and 2023, were as follows:

December 31,	2024		2023
(Dollars in millions)
Federal income taxes receivable (payable)	$	(1)	$	1
Net state income taxes receivable	—		—

Income tax expense (benefit)

Income tax expense (benefit) is summarized as follows:

Year Ended December 31,	2024		2023		2022
(Dollars in millions)
Current
Federal	$	37	$	2	$	1
State	(1)		4		3
Deferred
Federal	(33)		28		19
State	7		19		14
Total income tax expense (benefit)	$	10	$	53	$	37

Income tax reconciliation

A reconciliation of UScellular’s income tax expense computed at the statutory rate to the reported income tax expense, and the statutory federal income tax rate to UScellular’s effective income tax rate is as follows:

Year Ended December 31,	2024				2023				2022
	Amount		Rate		Amount		Rate		Amount		Rate
(Dollars in millions)
Statutory federal income tax expense and rate	$	(5)	21.0	%	$	23	21.0	%	$	15	21.0	%
State income taxes, net of federal benefit1	4		(19.8)		18		16.7		14		18.9
Change in federal valuation allowance2	9		(41.5)		8		7.5		7		9.9
Nondeductible compensation	2		(7.4)		4		3.5		3		3.6
Other differences, net	—		4.6		—		(1.0)		(2)		(1.9)
Total income tax expense (benefit) and rate	$	10	(43.1)	%	$	53	47.7	%	$	37	51.5	%

1State income taxes, net of federal benefit, include changes in unrecognized tax benefits as well as adjustments to state valuation allowances. State taxes in 2022 and 2023 include discrete valuation allowance adjustments that did not recur in 2024.

2Change in federal valuation allowance is due primarily to annual interest expense from partnership investments that carryforward but may not be realized.

Deferred income tax assets and liabilities

Significant components of UScellular’s deferred income tax assets and liabilities at December 31, 2024 and 2023, were as follows:

December 31,	2024		2023
(Dollars in millions)
Deferred tax assets
Net operating loss (NOL) carryforwards	$	142	$	132
Lease liabilities	238		239
Contract liabilities	58		59
Interest expense carryforwards	125		99
Asset retirement obligation	84		78
Other	65		62
Total deferred tax assets	712		669
Less valuation allowance	(181)		(146)
Net deferred tax assets	531		523
Deferred tax liabilities
Property, plant and equipment	389		434
Licenses/intangibles	421		408
Partnership investments	191		180
Lease assets	224		221
Other	34		35
Total deferred tax liabilities	1,259		1,278
Net deferred income tax liability	$	728	$	755

Deferred tax valuation allowance

A summary of UScellular’s deferred tax asset valuation allowance is as follows:

	2024		2023		2022
(Dollars in millions)
Balance at beginning of year	$	146	$	115	$	83
Charged to Income tax expense	35		31		32
Balance at end of year	$	181	$	146	$	115

Income tax unrecognized benefits summary

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2024		2023		2022
(Dollars in millions)
Unrecognized tax benefits balance at beginning of year	$	35	$	35	$	35
Additions for tax positions of current year	6		9		5
Additions for tax positions of prior years	—		—		1
Reductions for tax positions of prior years	(6)		(3)		—
Reductions for lapses in statutes of limitations	(7)		(6)		(6)
Unrecognized tax benefits balance at end of year	$	28	$	35	$	35