UNITED STATES CELLULAR CORP

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 with a goal of 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. Revenues from certain of these investments are long-term and in some cases are uncertain. To meet its cash-flow needs, UScellular may need to delay or reduce certain investments or sell assets. Refer to Liquidity and Capital Resources within this MD&A for additional information. Cash flows may fluctuate from quarter to quarter and year to year due to seasonality, timing and other factors. The following discussion summarizes UScellular's cash flow activities for the three months ended March 31, 2024 and 2023.

2024 Commentary

UScellular’s Cash, cash equivalents and restricted cash increased $31 million. Net cash provided by operating activities was $203 million due to net income of $24 million adjusted for non-cash items of $175 million, distributions received from unconsolidated entities of $22 million, and changes in working capital items which decreased net cash by $18 million. The working capital changes were primarily driven by payment of associate bonuses and timing of vendor payments, partially offset by reduced receivable and inventory balances and the timing of future tax payments.

Cash flows used for investing activities were $144 million, due primarily to payments for property, plant and equipment of $133 million.

Cash flows used for financing activities were $28 million, due primarily to $55 million in repayments on the receivables securitization agreement and term loan agreements and cash paid for software license agreements of $9 million, partially offset by a borrowing of $40 million on the receivables securitization agreement.

2023 Commentary

UScellular’s Cash, cash equivalents and restricted cash decreased $108 million. Net cash provided by operating activities was $41 million due to net income of $14 million adjusted for non-cash items of $171 million, distributions received from unconsolidated entities of $20 million, and changes in working capital items which decreased net cash by $164 million. The working capital changes were primarily driven by timing of vendor payments and payment of associate bonuses, partially offset by a decrease in customer and agent receivable balances.

Cash flows used for investing activities were $192 million, which included payments for property, plant and equipment of $196 million.

Cash flows provided by financing activities were $43 million, due primarily to $115 million borrowed under the receivables securitization agreement, partially offset by a $60 million repayment on the EIP receivables repurchase agreement and cash paid for software license agreements of $7 million.