UNITED STATES CELLULAR CORP

UScellular operates a capital-intensive business. UScellular makes substantial investments to acquire wireless spectrum licenses 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 and Note 7 — Divestitures in the Notes to Consolidated Financial Statements 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 nine months ended September 30, 2024 and 2023.

2024 Commentary

UScellular’s Cash, cash equivalents and restricted cash increased $109 million. Net cash provided by operating activities was $761 million due to net loss of $37 million adjusted for non-cash items of $600 million, distributions received from unconsolidated entities of $106 million, including $37 million in distributions from the LA Partnership, and changes in working capital items which increased net cash by $92 million. The working capital changes were primarily driven by reduced receivable and inventory balances and the timing of future tax payments, partially offset by payments of associate bonuses and agent rebates and commissions.

Cash flows used for investing activities were $415 million, due primarily to payments for property, plant and equipment of $399 million.

Cash flows used for financing activities were $237 million, due primarily to $188 million in repayments on the receivables securitization agreement, cash paid for software license agreements of $31 million and the repurchase of $26 million Common Shares, partially offset by a borrowing of $40 million on the receivables securitization agreement.

2023 Commentary

UScellular’s Cash, cash equivalents and restricted cash decreased $123 million. Net cash provided by operating activities was $719 million due to net income of $43 million adjusted for non-cash items of $514 million, distributions received from unconsolidated entities of $97 million, including $37 million in distributions from the LA Partnership, and changes in working capital items which increased net cash by $65 million. The working capital changes were primarily driven by reduced inventory and receivable balances, partially offset by timing of vendor payments and payment of associate bonuses.

Cash flows used for investing activities were $464 million, due primarily to payments for property, plant and equipment of $454 million.

Cash flows used for financing activities were $378 million, due primarily to repayments of $385 million on the receivables securitization agreement, a $60 million repayment on the EIP receivables repurchase agreement and cash paid for software license agreements of $28 million, partially offset by $115 million borrowed under the receivables securitization agreement.