UNITED STATES CELLULAR CORP
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
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FY2024 · Filed Feb 21, 2025
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Towers Operations
| As of December 31, | 2024 | 2023 | 2022 | 2024 vs. 2023 | 2023 vs. 2022 |
|---|---|---|---|---|---|
| Owned towers | 4,409 | 4,373 | 4,336 | 1% | 1% |
| Number of colocations | 2,444 | 2,390 | 2,401 | 2% | — |
| Tower tenancy rate | 1.55 | 1.55 | 1.55 | — | — |
Number of colocations
Number of colocations increased in 2024 due to an increase in new tenant and equipment change executions partially offset by terminations. Colocation terminations decreased in 2024 compared to 2023 in part due to a decrease in legacy Sprint colocation terminations which decreased from 44 to 21 year over year.
Financial Overview — Towers
The following discussion and analysis compares financial results for the year ended December 31, 2024, to the year ended December 31, 2023 and the year ended December 31, 2023, to the year ended December 31, 2022.
| Year Ended December 31, | 2024 | 2023 | 2022 | 2024 vs. 2023 | 2023 vs. 2022 |
|---|---|---|---|---|---|
| (Dollars in millions) | |||||
| Third-party revenues | $103 | $101 | $93 | 2% | 8% |
| Intra-company revenues | 131 | 127 | 123 | 3% | 3% |
| Total tower revenues | 234 | 228 | 216 | 3% | 5% |
| System operations (excluding Depreciation, amortization and accretion reported below) | 78 | 73 | 71 | 6% | 2% |
| Selling, general and administrative | 32 | 34 | 32 | (5)% | 7% |
| Depreciation, amortization and accretion | 45 | 46 | 45 | (1)% | 1% |
| (Gain) loss on asset disposals, net | 1 | (2) | — | N/M | N/M |
| Total operating expenses | 156 | 151 | 148 | 3% | 2% |
| Operating income | $78 | $77 | $68 | 2% | 13% |
| Adjusted OIBDA (Non-GAAP)1 | $126 | $121 | $113 | 4% | 7% |
| Adjusted EBITDA (Non-GAAP)1 | $126 | $121 | $113 | 4% | 7% |
| Capital expenditures | $23 | $31 | $28 | (24)% | 9% |
1 Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
Key components of changes in the statement of operations line items were as follows:
Total tower revenues
Total tower revenues increased in 2024 due primarily to an increase in intra-company revenues primarily as a result of an increase in the intra-company rate charged by Towers to Wireless and an increase in the number of owned towers.
Upon closing of the transaction to dispose of the wireless operations and select spectrum assets to T-Mobile, UScellular expects an increase in Third-party revenues that will be recognized under the Master License Agreement that will go into effect under the Securities Purchase Agreement. However, at such time Intra-company revenues would cease, resulting in significantly lower Tower revenues in the periods following the close.
Total operating expenses
Total operating expenses increased in 2024 due to an increase in System operations expenses as a result of increases in cell site ground rent and maintenance expenses.
Upon and following closing of the transaction to dispose of the wireless operations and select spectrum assets to T-Mobile, UScellular expects expenses may be incurred to affect the separation including costs to decommission certain towers and record remaining ground lease obligations on such decommissioned towers. These factors and other uncertainties in how the ongoing tower operations will be supported in the long-term may significantly impact operating expenses recorded in periods following the close.
Capital expenditures
Total capital expenditures decreased in 2024 due primarily to a decrease in the number of owned towers placed into service to support UScellular's wireless network.
Total tower revenues
Total tower revenues increased in 2023 due primarily to an increase in third-party revenues primarily as a result of new colocator agreements and rent escalations.
Capital expenditures
Total capital expenditures increased in 2023 due primarily to an increase in the leasehold improvements on owned towers and an increase in perpetual easements and outright land purchases.
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