Market Overview

U.S. Cellular reports third quarter 2019 results

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CHICAGO, Oct. 31, 2019 /PRNewswire/ --

As previously announced, U.S. Cellular will hold a teleconference November 1, 2019, at 9:00 a.m. CDT.  Listen to the call live via the Events & Presentations page of investors.uscellular.com.

United States Cellular Corporation (NYSE:USM) reported total operating revenues of $1,031 million for the third quarter of 2019, versus $1,001 million for the same period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $23 million and $0.27, respectively, for the third quarter of 2019 compared to $36 million and $0.41, respectively, in the same period one year ago.

"I'm pleased with the progress we made this quarter," said Kenneth R. Meyers, U.S. Cellular president and CEO. "We generated improved financial results and although subscriber activity was slow early in the quarter, we gained momentum and finished strong, achieving sequential improvement in postpaid handset net additions by delivering on our customer satisfaction strategy and implementing many of our strategic initiatives. Our efforts produced growth in revenue and Adjusted EBITDA. Continued popularity of our unlimited Total Plans drove increases in average revenue per user and increased inbound roaming contributed to growth in service revenue. I am pleased to see these trends as we head into the important holiday season.

"We recently completed a brand refresh and launched a new more modern look and a brand promise around 'Bringing Fairness to Wireless,' to reinforce the values that have always been part of U.S. Cellular.  Another driver of customer satisfaction is our high-quality network, which is performing well even as data usage continues to increase. Our network modernization efforts are progressing as we ready our network for 5G, so that even customers with 4G devices have experienced better network quality and improved speeds. Additionally, we are on track to launch 5G service in Iowa and Wisconsin during the first quarter of 2020."

2019 Estimated Results

U.S. Cellular's current estimates of full-year 2019 results are shown below. Such estimates represent management's view as of October 31, 2019 and should not be assumed to be current as of any future date. U.S. Cellular undertakes no duty to update such estimates, whether as a result of new information, future events or otherwise. There can be no assurance that final results will not differ materially from estimated results.


2019 Estimated Results


Previous

Current

(Dollars in millions)



Total operating revenues

$3,900-$4,100

$3,950-$4,050

Adjusted OIBDA1

$725-$875

$750-$850

Adjusted EBITDA1

$900-$1,050

$925-$1,025

Capital expenditures

$625-$725

Unchanged

The following table provides a reconciliation of Net income to Adjusted OIBDA and Adjusted EBITDA for 2019 estimated results, actual results for the nine months ended September 30, 2019, and actual results for the year ended December 31, 2018. In providing 2019 estimated results, U.S. Cellular has not completed the below reconciliation to Net income because it does not provide guidance for income taxes. Although potentially significant, U.S. Cellular believes that the impact of income taxes cannot be reasonably predicted; therefore, U.S. Cellular is unable to provide such guidance.




Actual Results


2019 Estimated
Results


Nine Months Ended
September 30, 2019


Year Ended
December 31, 2018

(Dollars in millions)






Net income (GAAP)

N/A


$

115



$

164


Add back or deduct:






Income tax expense

N/A


55



51


Income before income taxes (GAAP)

$80-$180


$

170



$

215


Add back:






Interest expense

115


87



116


Depreciation, amortization and accretion expense

710


524



640


EBITDA (Non-GAAP)1

$905-$1,005


$

781



$

971


Add back or deduct:






(Gain) loss on asset disposals, net

20


13



10


(Gain) loss on sale of business and other exit costs, net


(1)




(Gain) loss on license sales and exchanges, net




(18)


Adjusted EBITDA (Non-GAAP)1

$925-$1,025


$

793



$

963


Deduct:






Equity in earnings of unconsolidated entities

160


128


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