0000821130false--12-312021Q19100008211302021-01-012021-03-310000821130us-gaap:CommonClassBMember2021-01-012021-03-310000821130usm:SixPointNineFivePercentSeniorNotesMember2021-01-012021-03-310000821130usm:SevenPointTwoFivePercent2063SeniorNotesMember2021-01-012021-03-310000821130usm:SevenPointTwoFivePercent2064SeniorNotesMember2021-01-012021-03-310000821130usm:SixPointTwoFivePercent2069SeniorNotesMember2021-01-012021-03-310000821130usm:FivePointFivePercentSeniorNotesMember2021-01-012021-03-31xbrli:shares0000821130us-gaap:CommonClassBMember2021-03-310000821130us-gaap:CommonClassAMember2021-03-31iso4217:USD0000821130usm:ReceivablesSecuritizationFacilityMember2021-03-310000821130us-gaap:ServiceMember2021-01-012021-03-310000821130us-gaap:ServiceMember2020-01-012020-03-310000821130us-gaap:ProductMember2021-01-012021-03-310000821130us-gaap:ProductMember2020-01-012020-03-3100008211302020-01-012020-03-31iso4217:USDxbrli:shares00008211302020-12-3100008211302019-12-3100008211302021-03-3100008211302020-03-310000821130us-gaap:CommonClassAMember2020-12-310000821130us-gaap:CommonClassBMember2020-12-310000821130usm:AssetsHeldMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-03-310000821130usm:AssetsHeldMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2020-12-310000821130us-gaap:NonrecourseMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-03-310000821130us-gaap:NonrecourseMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2020-12-310000821130us-gaap:CommonStockMember2020-12-310000821130us-gaap:AdditionalPaidInCapitalMember2020-12-310000821130us-gaap:TreasuryStockMember2020-12-310000821130us-gaap:RetainedEarningsMember2020-12-310000821130us-gaap:ParentMember2020-12-310000821130us-gaap:NoncontrollingInterestMember2020-12-310000821130us-gaap:RetainedEarningsMember2021-01-012021-03-310000821130us-gaap:ParentMember2021-01-012021-03-310000821130us-gaap:NoncontrollingInterestMember2021-01-012021-03-310000821130us-gaap:TreasuryStockMember2021-01-012021-03-310000821130us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310000821130us-gaap:CommonStockMember2021-03-310000821130us-gaap:AdditionalPaidInCapitalMember2021-03-310000821130us-gaap:TreasuryStockMember2021-03-310000821130us-gaap:RetainedEarningsMember2021-03-310000821130us-gaap:ParentMember2021-03-310000821130us-gaap:NoncontrollingInterestMember2021-03-310000821130us-gaap:CommonStockMember2019-12-310000821130us-gaap:AdditionalPaidInCapitalMember2019-12-310000821130us-gaap:TreasuryStockMember2019-12-310000821130us-gaap:RetainedEarningsMember2019-12-310000821130us-gaap:ParentMember2019-12-310000821130us-gaap:NoncontrollingInterestMember2019-12-310000821130us-gaap:RetainedEarningsMember2020-01-012020-03-310000821130us-gaap:ParentMember2020-01-012020-03-310000821130us-gaap:TreasuryStockMember2020-01-012020-03-310000821130us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310000821130us-gaap:NoncontrollingInterestMember2020-01-012020-03-310000821130us-gaap:CommonStockMember2020-03-310000821130us-gaap:AdditionalPaidInCapitalMember2020-03-310000821130us-gaap:TreasuryStockMember2020-03-310000821130us-gaap:RetainedEarningsMember2020-03-310000821130us-gaap:ParentMember2020-03-310000821130us-gaap:NoncontrollingInterestMember2020-03-31xbrli:pure0000821130usm:TelephoneandDataSystemsInc.Memberusm:UnitedStatesCellularCorporationMember2021-03-310000821130usm:RetailServiceRevenueMemberus-gaap:TransferredOverTimeMember2021-01-012021-03-310000821130usm:RetailServiceRevenueMemberus-gaap:TransferredOverTimeMember2020-01-012020-03-310000821130usm:InboundRoamingRevenueMemberus-gaap:TransferredOverTimeMember2021-01-012021-03-310000821130usm:InboundRoamingRevenueMemberus-gaap:TransferredOverTimeMember2020-01-012020-03-310000821130usm:OtherServiceRevenueMemberus-gaap:TransferredOverTimeMember2021-01-012021-03-310000821130usm:OtherServiceRevenueMemberus-gaap:TransferredOverTimeMember2020-01-012020-03-310000821130us-gaap:TransferredOverTimeMember2021-01-012021-03-310000821130us-gaap:TransferredOverTimeMember2020-01-012020-03-310000821130usm:EquipmentAndProductSalesMemberus-gaap:TransferredAtPointInTimeMember2021-01-012021-03-310000821130usm:EquipmentAndProductSalesMemberus-gaap:TransferredAtPointInTimeMember2020-01-012020-03-3100008211302021-04-012021-03-3100008211302022-01-012021-03-3100008211302023-01-012021-03-310000821130usm:PublicDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-03-310000821130us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberusm:PublicDebtMember2021-03-310000821130usm:PublicDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-12-310000821130us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberusm:PublicDebtMember2020-12-310000821130us-gaap:CarryingReportedAmountFairValueDisclosureMemberusm:NonPublicDebtMember2021-03-310000821130us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberusm:NonPublicDebtMember2021-03-310000821130us-gaap:CarryingReportedAmountFairValueDisclosureMemberusm:NonPublicDebtMember2020-12-310000821130us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberusm:NonPublicDebtMember2020-12-310000821130usm:OtherDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-03-310000821130us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberusm:OtherDebtMember2021-03-310000821130usm:OtherDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-12-310000821130us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberusm:OtherDebtMember2020-12-310000821130usm:SevenPointTwoFivePercent2063SeniorNotesMember2021-03-310000821130usm:SevenPointTwoFivePercent2064SeniorNotesMember2021-03-310000821130usm:SixPointNineFivePercentSeniorNotesMember2021-03-310000821130usm:SixPointTwoFivePercent2069SeniorNotesMember2021-03-310000821130usm:FivePointFivePercentSeniorNotesMember2021-03-310000821130usm:SixPointSevenPercentSeniorNotesMember2021-03-310000821130usm:InstitutionalAndOtherDebtMemberusm:InterestRateOrEstablishedYieldToMaturityMembersrt:MinimumMember2021-03-310000821130srt:MaximumMemberusm:InstitutionalAndOtherDebtMemberusm:InterestRateOrEstablishedYieldToMaturityMember2021-03-310000821130usm:InstitutionalAndOtherDebtMemberusm:InterestRateOrEstablishedYieldToMaturityMembersrt:MinimumMember2020-12-310000821130srt:MaximumMemberusm:InstitutionalAndOtherDebtMemberusm:InterestRateOrEstablishedYieldToMaturityMember2020-12-310000821130us-gaap:AccountsReceivableMember2021-03-310000821130us-gaap:AccountsReceivableMember2020-12-310000821130us-gaap:OtherNoncurrentAssetsMember2021-03-310000821130us-gaap:OtherNoncurrentAssetsMember2020-12-310000821130us-gaap:UnbilledRevenuesMemberusm:LowestRiskMember2021-03-310000821130us-gaap:UnbilledRevenuesMemberus-gaap:PrimeMember2021-03-310000821130us-gaap:UnbilledRevenuesMemberusm:SlightRiskMember2021-03-310000821130us-gaap:UnbilledRevenuesMemberus-gaap:SubprimeMember2021-03-310000821130us-gaap:UnbilledRevenuesMember2021-03-310000821130us-gaap:UnbilledRevenuesMemberusm:LowestRiskMember2020-12-310000821130us-gaap:UnbilledRevenuesMemberus-gaap:PrimeMember2020-12-310000821130us-gaap:UnbilledRevenuesMemberusm:SlightRiskMember2020-12-310000821130us-gaap:UnbilledRevenuesMemberus-gaap:SubprimeMember2020-12-310000821130us-gaap:UnbilledRevenuesMember2020-12-310000821130us-gaap:BilledRevenuesMemberusm:LowestRiskMember2021-03-310000821130us-gaap:PrimeMemberus-gaap:BilledRevenuesMember2021-03-310000821130us-gaap:BilledRevenuesMemberusm:SlightRiskMember2021-03-310000821130us-gaap:BilledRevenuesMemberus-gaap:SubprimeMember2021-03-310000821130us-gaap:BilledRevenuesMember2021-03-310000821130us-gaap:BilledRevenuesMemberusm:LowestRiskMember2020-12-310000821130us-gaap:PrimeMemberus-gaap:BilledRevenuesMember2020-12-310000821130us-gaap:BilledRevenuesMemberusm:SlightRiskMember2020-12-310000821130us-gaap:BilledRevenuesMemberus-gaap:SubprimeMember2020-12-310000821130us-gaap:BilledRevenuesMember2020-12-310000821130usm:LowestRiskMember2021-03-310000821130us-gaap:PrimeMember2021-03-310000821130usm:SlightRiskMember2021-03-310000821130us-gaap:SubprimeMember2021-03-310000821130usm:LowestRiskMember2020-12-310000821130us-gaap:PrimeMember2020-12-310000821130usm:SlightRiskMember2020-12-310000821130us-gaap:SubprimeMember2020-12-310000821130usm:EquipmentInstallmentPlanReceivableMember2020-12-310000821130usm:EquipmentInstallmentPlanReceivableMember2019-12-310000821130usm:EquipmentInstallmentPlanReceivableMember2021-01-012021-03-310000821130usm:EquipmentInstallmentPlanReceivableMember2020-01-012020-03-310000821130usm:EquipmentInstallmentPlanReceivableMember2021-03-310000821130usm:EquipmentInstallmentPlanReceivableMember2020-03-310000821130srt:MaximumMember2021-01-012021-03-31usm:license0000821130usm:Auction107AquisitionEventMember2021-03-310000821130usm:Auction107AquisitionEventMember2021-01-012021-03-310000821130usm:Auction107AquisitionEventMember2020-01-012020-12-310000821130us-gaap:SubsequentEventMemberusm:Auction107AquisitionEventMember2021-04-012021-04-010000821130us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMember2021-01-012021-03-310000821130us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMember2020-01-012020-03-310000821130usm:TermLoanFacilityMember2021-03-310000821130usm:TermLoanFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-03-310000821130usm:TermLoanFacilityMemberus-gaap:SubsequentEventMember2021-09-302021-09-300000821130usm:SevenPointTwoFivePercent2063SeniorNotesMemberus-gaap:SubsequentEventMember2021-05-120000821130usm:SevenPointTwoFivePercent2063SeniorNotesMemberus-gaap:SubsequentEventMember2021-05-122021-05-120000821130us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-03-310000821130us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2020-12-310000821130usm:VariableInterestEntityUsccEipLlcMember2021-01-012021-03-310000821130usm:VariableInterestEntityUsccEipLlcMember2020-01-012020-03-31

For the transition period from                                    to

Commission file number 001-09712

UNITED STATES CELLULAR CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware						62-1147325
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

8410 West Bryn Mawr, Chicago, Illinois 60631

(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (773) 399-8900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

No

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

No

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

No

☒

The number of shares outstanding of each of the issuer's classes of common stock, as of March 31, 2021, is 53,051,700 Common Shares, $1 par value, and 33,005,900 Series A Common Shares, $1 par value.

United States Cellular Corporation
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2021
Index			Page No.
Management Discussion and Analysis of Financial Condition and Results of Operations			1
Executive Overview			1
Terms Used by UScellular			4
Operational Overview			5
Financial Overview			6
Liquidity and Capital Resources			9
Consolidated Cash Flow Analysis			12
Consolidated Balance Sheet Analysis			13
Supplemental Information Relating to Non-GAAP Financial Measures			14
Application of Critical Accounting Policies and Estimates			16
Regulatory Matters			16
Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement			17
Risk Factors			19
Quantitative and Qualitative Disclosures About Market Risk			19
Financial Statements (Unaudited)			20
Consolidated Statement of Operations			20
Consolidated Statement of Cash Flows			21
Consolidated Balance Sheet			22
Consolidated Statement of Changes in Equity			24
Notes to Consolidated Financial Statements			26
Controls and Procedures			34
Legal Proceedings			34
Unregistered Sales of Equity Securities and Use of Proceeds			35
Exhibits			36
Form 10-Q Cross Reference Index			37
Signatures			38

Executive Overview

The following discussion and analysis compares United States Cellular Corporation’s (UScellular) financial results for the three months ended March 31, 2021, to the three months ended March 31, 2020. It should be read in conjunction with UScellular’s interim consolidated financial statements and notes included herein, and with the description of UScellular’s business, its audited consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) included in UScellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2020. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. 

This report contains statements that are not based on historical facts, including the words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions. These statements constitute and represent “forward looking statements” as this term is defined in the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward looking statements. See Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement for additional information.

UScellular uses certain “non-GAAP financial measures” and each such measure is identified in the MD&A. A discussion of the reason UScellular determines these metrics to be useful and reconciliations of these measures to their most directly comparable measures determined in accordance with accounting principles generally accepted in the United States of America (GAAP) are included in the Supplemental Information Relating to Non-GAAP Financial Measures section within the MD&A of this Form 10-Q Report.

General

UScellular owns, operates, and invests in wireless markets throughout the United States. UScellular is an 82%-owned subsidiary of Telephone and Data Systems, Inc. (TDS).

OPERATIONS

 

▪Serves customers with 5.0 million connections including 4.4 million postpaid, 0.5 million prepaid and 0.1 million reseller and other connections

▪Operates in 21 states

▪Employs approximately 5,200 associates

▪4,270 owned towers

▪6,802 cell sites in service

COVID-19 considerations

The global spread of coronavirus (COVID-19) did not have a material impact on UScellular's financial results for the three months ended March 31, 2021. The impact of COVID-19 on UScellular's future financial results is uncertain, but is not projected to have a material impact. There are many factors, including the severity and duration of the outbreak, as well as other direct and indirect impacts, that could negatively impact UScellular.

UScellular Mission and Strategy

UScellular’s mission is to provide exceptional wireless communication services which enhance consumers’ lives, increase the competitiveness of local businesses, and improve the efficiency of government operations in the markets UScellular serves.

UScellular's strategy is to attract and retain customers through a value proposition comprising a high-quality network, outstanding customer service, and competitive devices, plans and pricing - all provided with a community focus. Strategic efforts include:

▪UScellular offers economical and competitively priced service plans and devices to its customers and is focused on increasing revenues from sales of related products such as accessories and device protection plans and from new services such as home internet. In addition, UScellular is focused on expanding its solutions available to business and government customers.

▪UScellular continues to devote efforts to enhance its network capabilities, including by deploying 5G technology. 5G technology helps address customers’ growing demand for data services and creates opportunities for new services requiring high speed and reliability as well as low latency. UScellular's 5G deployment is initially focused on mobility services using its low band spectrum. UScellular has acquired high-band spectrum and is in the process of acquiring mid-band spectrum, which it will deploy in the future to further enable the delivery of 5G services. UScellular has launched commercial 5G services in portions of substantially all of UScellular’s markets and will continue to launch in additional areas in the coming years. In addition to the deployment of 5G technology, UScellular is also modernizing its 4G LTE network to further enhance 4G LTE speeds.

▪UScellular assesses its existing wireless interests on an ongoing basis with a goal of improving the competitiveness of its operations and maximizing its long-term return on capital. As part of this strategy, UScellular actively seeks attractive opportunities to acquire wireless spectrum, including pursuant to FCC auctions.

Terms Used by UScellular

The following is a list of definitions of certain industry terms that are used throughout this document:

▪4G LTE – fourth generation Long-Term Evolution, which is a wireless technology that enables more network capacity for more data per user as well as faster access to data compared to third generation (3G) technology.

▪5G – fifth generation wireless technology that helps address customers’ growing demand for data services and creates opportunities for new services requiring high speed and reliability as well as low latency.

▪Account – represents an individual or business financially responsible for one or multiple associated connections. An account may include a variety of types of connections such as handsets and connected devices.

▪Auctions 105 and 107 – Auction 105 was an FCC auction of 3.5 GHz wireless spectrum licenses that started in July 2020 and concluded in September 2020. Auction 107 was an FCC auction of 3.7-3.98 GHz wireless spectrum licenses that started in December 2020 and concluded in February 2021.

▪Churn Rate – represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.

▪Connections – individual lines of service associated with each device activated by a customer. Connections are associated with all types of devices that connect directly to the UScellular network.

▪Connected Devices – non-handset devices that connect directly to the UScellular network. Connected devices include products such as tablets, wearables, modems, and hotspots.

▪Coronavirus Aid, Relief, and Economic Security (CARES) Act – economic relief package signed into law on March 27, 2020 to address the public health and economic impacts of COVID-19, including a variety of tax provisions.

▪EBITDA – refers to earnings before interest, taxes, depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted EBITDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.

▪FCC Keep Americans Connected Pledge – voluntary FCC initiative, through June 30, 2020, in response to the COVID-19 pandemic to ensure that Americans do not lose their broadband or telephone connectivity as a result of the exceptional circumstance.

▪Free Cash Flow – non-GAAP metric defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.

▪Gross Additions – represents the total number of new connections added during the period, without regard to connections that were terminated during that period.

▪Net Additions (Losses) – represents the total number of new connections added during the period, net of connections that were terminated during that period.

▪OIBDA – refers to operating income before depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted OIBDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.

▪Postpaid Average Revenue per Account (Postpaid ARPA) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.

▪Postpaid Average Revenue per User (Postpaid ARPU) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid connections and by the number of months in the period.

▪Retail Connections – the sum of postpaid connections and prepaid connections.

▪Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the FCC intended to promote universal access to telecommunications services in the United States.

▪VoLTE – Voice over Long-Term Evolution is a technology specification that defines the standards and procedures for delivering voice communications and related services over 4G LTE networks.

Total postpaid handset net losses decreased for the three months ended March 31, 2021, when compared to the same period last year due primarily to (i) higher gross additions as a result of improved promotional offering effectiveness and higher consumer switching activity and (ii) lower handset defections as a result of a reduction in non-pay defections.

Total postpaid connected device net losses decreased for the three months ended March 31, 2021, when compared to the same period last year due to a decrease in tablet defections, partially offset by a decrease in gross additions due to lower demand for internet related products as compared to the three months ended March 31, 2020.

Postpaid ARPU and Postpaid ARPA increased for the three months ended March 31, 2021, when compared to the same period last year, due primarily to (i) an increase in regulatory recovery revenues, (ii) favorable plan and product offering mix, and (iii) an increase in device protection plan revenues. These increases were partially offset by an increase in promotional expense.

1Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.

2Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.

Key components of changes in the statement of operations line items were as follows:

Total operating revenues

Retail service revenues increased for the three months ended March 31, 2021, primarily as a result of an increase in Postpaid ARPU as previously discussed in the Operational Overview section as well as an increase in the average number of postpaid subscribers.

Inbound roaming revenues decreased for the three months ended March 31, 2021, primarily driven by lower data revenues resulting from lower usage. UScellular expects inbound roaming revenues to continue to decline during 2021 relative to prior year levels.

Other service revenues increased for the three months ended March 31, 2021, resulting from increases in tower rental revenues and miscellaneous other service revenues.

Equipment sales revenues increased for the three months ended March 31, 2021, due primarily to an increase in smartphone sales as well as an increase in the average revenue per device for smartphones due to an increase in sales of higher priced smartphones.

System operations expenses

System operations expenses increased for the three months ended March 31, 2021, due to higher circuit costs as well as an increase in roaming expense as a result of higher data roaming usage, partially offset by lower data rates.

Cost of equipment sold

Cost of equipment sold increased for the three months ended March 31, 2021, due primarily to an increase in smartphone sales as well as an increase in the average cost per device for smartphones due to an increase in sales of higher priced smartphones.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased for the three months ended March 31, 2021, due primarily to decreases in (i) bad debts expense driven by fewer non-pay customers as a result of better credit mix and improved customer payment behavior, as well as a discrete charge that was recorded in March 2020 related to UScellular's participation in the FCC Keep Americans Connected Pledge and (ii) advertising expenses.

Depreciation, amortization and accretion

Depreciation, amortization, and accretion decreased for the three months ended March 31, 2021, due to certain billing system assets reaching their end of life in 2020, partially offset by an increase in depreciation expense due to increased capital expenditures throughout 2020.

Equity in earnings of unconsolidated entities represents UScellular’s share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method. UScellular’s investment in the Los Angeles SMSA Limited Partnership (LA Partnership) contributed pretax income of $19 million and $22 million for the three months ended March 31, 2021 and 2020, respectively. See Note 8 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.

Interest and dividend income decreased for the three months ended March 31, 2021, driven primarily by lower interest rates.

Interest expense

Interest expense increased for the three months ended March 31, 2021, primarily as a result of the issuance of $500 million of 6.25% Senior Notes in August 2020 and $500 million of 5.50% Senior Notes in December 2020.

Income tax expense

The effective tax rate on Income before income taxes for the three months ended March 31, 2021 and 2020, was 30.4% and 5.0%, respectively. The higher effective tax rate in 2021 as compared to 2020 is due primarily to the income tax benefits of the CARES Act included in the 2020 tax rate, which do not recur as benefits in the 2021 tax rate.

The CARES Act provided retroactive eligibility of bonus depreciation on qualified improvement property put into service after December 31, 2017 and a 5-year carryback of net operating losses generated in years 2018-2020. As the statutory federal tax rate applicable to certain years within the carryback period is 35%, carryback to those years provided a tax benefit in excess of the current federal statutory rate of 21%, resulting in a reduction of income tax expense in 2020 and an expected cash refund of taxes paid in prior years.

Liquidity and Capital Resources

Sources of Liquidity

UScellular operates a capital-intensive business. In the past, UScellular’s existing cash and investment balances, funds available under its revolving credit and receivables securitization agreements, funds from other financing sources, including a term loan and other long-term debt, and cash flows from operating and certain investing and financing activities, including sales of assets or businesses, provided sufficient liquidity and financial flexibility for UScellular to meet its normal day-to-day operating needs and debt service requirements, to finance the build-out and enhancement of markets and to fund acquisitions, primarily of wireless spectrum licenses. There is no assurance that this will be the case in the future. See Market Risk for additional information regarding maturities of long-term debt.

UScellular has incurred negative free cash flow at times in the past and this could occur in the future. However, UScellular believes that existing cash and investment balances, funds available under its revolving credit agreement, expected future tax refunds and expected cash flows from operating and investing activities will provide sufficient liquidity for UScellular to meet its normal day-to-day operating needs and debt service requirements for the coming years. UScellular will continue to monitor the rapidly changing business and market conditions and plans to take appropriate actions, as necessary, to meet its liquidity needs.

UScellular may require substantial additional capital for, among other uses, funding day-to-day operating needs including working capital, acquisitions of providers of wireless telecommunications services, wireless spectrum license acquisitions, capital expenditures, agreements to purchase goods or services, leases, debt service requirements, the repurchase of shares, or making additional investments. It may be necessary from time to time to increase the size of the existing revolving credit agreement, to put in place new credit agreements, or to obtain other forms of financing in order to fund potential expenditures.

Cash and Cash Equivalents

Cash and cash equivalents include cash and money market investments.

Financing

Revolving Credit Agreement

In March 2020, UScellular entered into a $300 million unsecured revolving credit agreement with certain lenders and other parties. Amounts under the revolving credit agreement may be borrowed, repaid and reborrowed from time to time until maturity in March 2025. As of March 31, 2021, there were no outstanding borrowings under the revolving credit agreement, except for letters of credit, and UScellular's unused borrowing capacity was $298 million.

Term Loan Agreement

In February 2021, UScellular borrowed $217 million under its senior term loan credit agreement. As of March 31, 2021, UScellular has borrowed the full amount available under the senior term loan credit agreement of $300 million. See Note 9 — Debt in the Notes to Consolidated Financial Statements for additional information related to the senior term loan agreement.

Receivables Securitization Agreement

UScellular, through its subsidiaries, has a receivables securitization agreement to permit securitized borrowings using its equipment installment plan receivables. In March 2021, UScellular borrowed $275 million under its receivables securitization agreement. As of March 31, 2021, UScellular has borrowed the full amount available under the receivables securitization agreement of $300 million. Amounts under the receivables securitization agreement may be repaid and reborrowed from time to time until December 2022, which may be extended from time to time as specified therein. See Note 9 — Debt in the Notes to Consolidated Financial Statements for additional information related to the receivables securitization agreement.

Financial Covenants

UScellular believes that it was in compliance with all of the financial covenants and requirements set forth in its revolving credit agreement, senior term loan credit agreement and receivables securitization agreement as of March 31, 2021.

Other Long-Term Financing

In 2020, UScellular issued $500 million of 6.25% Senior Notes due in 2069 and $500 million of 5.5% Senior Notes due in 2070. The proceeds from both issuances will be used for general corporate purposes, including but not limited to, the purchase of additional wireless spectrum licenses acquired in Auction 107, funding of capital expenditures and retirement of existing debt.

In April 2021, UScellular announced that it will redeem its outstanding $275 million of 7.25% Senior Notes due 2063. At time of redemption, $9 million of interest expense will be recorded related to unamortized debt issuance costs for these notes. The notes are expected to be redeemed on May 12, 2021, at a redemption price of 100% of the principal amount, including accrued and unpaid interest to the redemption date.

UScellular has an effective shelf registration statement on Form S-3 to issue senior or subordinated debt securities.

Capital Expenditures

Capital expenditures (i.e., additions to property, plant and equipment and system development expenditures; excludes wireless spectrum license additions), which include the effects of accruals and capitalized interest, for the three months ended March 31, 2021 and 2020, were as follows:

UScellular intends to finance its capital expenditures for 2021 using primarily Cash flows from operating activities, existing cash balances and, if required, additional debt financing from its revolving credit agreement and/or other forms of financing.

Acquisitions, Divestitures and Exchanges

UScellular may be engaged from time to time in negotiations (subject to all applicable regulations) relating to the acquisition, divestiture or exchange of companies, properties or wireless spectrum licenses (including pursuant to FCC auctions). In general, UScellular may not disclose such transactions until there is a definitive agreement.

Other Obligations

UScellular will require capital for future spending on existing contractual obligations, including long-term debt obligations; lease commitments; commitments for device purchases, network facilities and transport services; agreements for software licensing; long-term marketing programs; Auction 107 relocation costs and accelerated relocation incentive payments; and other agreements to purchase goods or services.

Variable Interest Entities

UScellular consolidates certain “variable interest entities” as defined under GAAP. See Note 10 — Variable Interest Entities in the Notes to Consolidated Financial Statements for additional information related to these variable interest entities. UScellular may elect to make additional capital contributions and/or advances to these variable interest entities in future periods in order to fund their operations.

Common Share Repurchase Program

During the three months ended March 31, 2021, UScellular repurchased 54,900 Common Shares for $2 million at an average cost per share of $29.52. As of March 31, 2021, the total cumulative amount of UScellular Common Shares authorized to be repurchased is 4,452,000. For additional information related to the current repurchase authorization, see Unregistered Sales of Equity Securities and Use of Proceeds.

Off-Balance Sheet Arrangements

UScellular had no transactions, agreements or other contractual arrangements with unconsolidated entities involving “off-balance sheet arrangements,” as defined by SEC rules, that had or are reasonably likely to have a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources.

Consolidated Cash Flow Analysis

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 as a basis for 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. Cash flows may fluctuate from quarter to quarter and year to year due to seasonality, the timing of acquisitions and divestitures, capital expenditures and other factors. The following discussion summarizes UScellular's cash flow activities for the three months ended March 31, 2021 and 2020.

2021 Commentary

UScellular’s Cash, cash equivalents and restricted cash decreased $779 million. Net cash provided by operating activities was $124 million due to net income of $62 million adjusted for non-cash items of $167 million and distributions received from unconsolidated entities of $22 million. This was partially offset by changes in working capital items which decreased net cash by $127 million. The working capital changes were primarily influenced by the timing of vendor payments and annual associate bonus payments.

Cash flows used for investing activities were $1,388 million. Cash paid for additions to property, plant and equipment totaled $133 million. Cash payments for wireless spectrum license acquisitions were $1,253 million.

Cash flows provided by financing activities were $485 million, due primarily to $275 million borrowed under the receivables securitization agreement and $217 million borrowed under the term loan.

2020 Commentary

UScellular’s Cash, cash equivalents and restricted cash decreased $24 million. Net cash provided by operating activities was $342 million due to net income of $72 million adjusted for non-cash items of $228 million, distributions received from unconsolidated entities of $24 million, and changes in working capital items which increased net cash by $18 million. The working capital changes were primarily influenced by timing of vendor payments and collections of customer and agent receivables, partially offset by annual associate bonus payments, an increase in inventory and tax impacts from the CARES Act.

Cash flows used for investing activities were $342 million. Cash paid for additions to property, plant and equipment totaled $315 million. Cash payments for wireless spectrum license acquisitions were $26 million.

Cash flows used for financing activities were $24 million, due primarily to the repurchase of $21 million of Common Shares.

Consolidated Balance Sheet Analysis

The following discussion addresses certain captions in the consolidated balance sheet and changes therein. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes. Notable balance sheet changes during 2021 were as follows:

Licenses

Licenses increased $1,286 million due primarily to wireless spectrum license rights acquired through Auction 107. See Note 7 — Intangible Assets in the Notes to Consolidated Financial Statements for additional information.

Accounts payable - Trade

Accounts payable - Trade decreased $101 million due primarily to vendor payment timing differences.

Accrued compensation

Accrued compensation decreased $42 million due primarily to associate bonus payments in March 2021.

Long-term debt, net

Long-term debt, net increased $492 million due primarily to $275 million borrowed under the receivables securitization agreement and $217 million borrowed under the term loan.

Supplemental Information Relating to Non-GAAP Financial Measures

UScellular sometimes uses information derived from consolidated financial information but not presented in its financial statements prepared in accordance with GAAP to evaluate the performance of its business. Specifically, UScellular has referred to the following measures in this Form 10-Q Report:

▪EBITDA

▪Adjusted EBITDA

▪Adjusted OIBDA

▪Free cash flow

Certain of these measures are considered “non-GAAP financial measures” under U.S. Securities and Exchange Commission Rules. Following are explanations of each of these measures.

EBITDA, Adjusted EBITDA and Adjusted OIBDA

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation below. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under GAAP and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. UScellular does not intend to imply that any such items set forth in the reconciliation below are non-recurring, infrequent or unusual; such items may occur in the future.

Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income and Operating income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of UScellular’s operating results before significant recurring non-cash charges, gains and losses, and other items as presented below as they provide additional relevant and useful information to investors and other users of UScellular’s financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Operating income.

Application of Critical Accounting Policies and Estimates

UScellular prepares its consolidated financial statements in accordance with GAAP. UScellular’s significant accounting policies are discussed in detail in Note 1 — Summary of Significant Accounting Policies and Recent Accounting Pronouncements, Note 2 — Revenue Recognition and Note 10 — Leases in the Notes to Consolidated Financial Statements and UScellular’s Application of Critical Accounting Policies and Estimates is discussed in detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are included in UScellular’s Form 10-K for the year ended December 31, 2020. 

Regulatory Matters

5G Fund

On October 27, 2020, the FCC adopted rules creating the 5G Fund for Rural America, which will distribute up to $9 billion over ten years to bring 5G wireless broadband connectivity to rural America. The 5G Fund will be implemented through a two-phase competitive process, using multi-round auctions to award support. The winning bidders will be required to meet certain minimum speed requirements and interim and final deployment milestones. The order provides that the 5G Fund be in lieu of the previously proposed fund (the Phase II Connect America Mobility Fund) for the development of 4G LTE. The order also provides that over time a growing percentage of the legacy support a carrier receives must be used for 5G deployment.

UScellular cannot predict at this time when the 5G fund auction will occur, when the phase down period for its existing legacy support from the Federal USF will commence, or whether the 5G fund auction will provide opportunities to UScellular to offset any loss in existing support.

FCC Rulemaking - Restoring Internet Freedom

In December 2017, the FCC approved rules reversing or revising decisions made in the FCC’s 2015 Open Internet and Title II Order (Restoring Internet Freedom). The 2017 action reversed the FCC’s 2015 decision to reclassify Broadband Internet Access Services as telecommunications services subject to regulation under Title II of the Telecommunications Act. The 2017 action also reversed the FCC’s 2015 restrictions on blocking, throttling and paid prioritization, and modified transparency rules relating to such practices. Several parties filed suit in federal court challenging the 2017 actions. On October 1, 2019, the Court of Appeals for the D.C. Circuit issued an order reaffirming the FCC in most respects, but limiting the FCC's ability to preempt state and local net neutrality laws. On February 19, 2020, the FCC issued a Public Notice seeking comment on three issues under further consideration by the FCC based on a recent D.C. Circuit decision. On October 27, 2020, the FCC adopted an Order on Remand in response to the U.S. Court of Appeals for the D.C. Circuit’s remand on the three issues under further consideration by the FCC and found no basis to alter the FCC’s conclusions in the Restoring Internet Freedom Order.

A number of states, including certain states in which UScellular operates, have adopted or considered laws intended to reinstate aspects of the foregoing net neutrality regulations that were reversed or revised by the FCC in 2017. To the extent such laws are enacted, it is expected that legal proceedings will be pursued challenging such laws, subject now to the DC Circuit ruling limiting the FCC's preemptive authority in this matter. The new administration may also conduct rulemaking proceedings that may reinstate, in some form, net neutrality rules. UScellular cannot predict the outcome of any of these proceedings or the impact on its business.

Spectrum Auctions

On March 2, 2020, the FCC released a Public Notice establishing procedures for an auction offering wireless spectrum licenses in the 3.5 GHz band (Auction 105). On September 2, 2020, the FCC announced by public notice that UScellular was the provisional winning bidder for 243 wireless spectrum licenses for a purchase price of $14 million. The wireless spectrum licenses are expected to be granted by the FCC in 2021.

On August 7, 2020, the FCC released a Public Notice establishing procedures for an auction offering wireless spectrum licenses in the 3.7-3.98 GHz bands (Auction 107). On February 24, 2021, the FCC announced by public notice that UScellular was the provisional winning bidder for 254 wireless spectrum licenses for $1,283 million. UScellular paid $30 million of this amount in 2020 and the remainder in March 2021. Additionally, UScellular expects to capitalize costs of approximately $178 million related to the estimated relocation costs and accelerated relocation incentive payments. The wireless spectrum licenses from Auction 107 are expected to be granted by the FCC in 2021. The spectrum must be cleared by incumbent providers before UScellular can access it. UScellular does not expect to have access to this spectrum until late 2023. Combined with prior mid-band purchases in Auction 105, UScellular will have mid-band spectrum in nearly all of its operating footprint, covering approximately 95% of subscribers.

Private Securities Litigation Reform Act of 1995

Safe Harbor Cautionary Statement

This Form 10-Q, including exhibits, contains statements that are not based on historical facts and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, that address activities, events or developments that UScellular intends, expects, projects, believes, estimates, plans or anticipates will or may occur in the future are forward-looking statements. The words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying them. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, those set forth below, as more fully described under “Risk Factors” in UScellular’s Form 10-K for the year ended December 31, 2020 and in this Form 10-Q. Each of the following risks could have a material adverse effect on UScellular’s business, financial condition or results of operations. However, such factors are not necessarily all of the important factors that could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the forward-looking statements contained in this document. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. UScellular undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. You should carefully consider the Risk Factors in UScellular’s Form 10-K for the year ended December 31, 2020, the following factors and other information contained in, or incorporated by reference into, this Form 10-Q to understand the material risks relating to UScellular’s business, financial condition or results of operations.

Operational Risk Factors

▪Intense competition involving products, services, pricing and network speed and technologies could adversely affect UScellular’s revenues or increase its costs to compete.

▪Changes in roaming practices or other factors could cause UScellular's roaming revenues to decline from current levels, roaming expenses to increase from current levels and/or impact UScellular's ability to service its customers in geographic areas where UScellular does not have its own network, which could have an adverse effect on UScellular's business, financial condition or results of operations.

▪A failure by UScellular to obtain access to adequate radio spectrum to meet current or anticipated future needs and/or to accurately predict future needs for radio spectrum could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪An inability to attract people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on UScellular's business, financial condition or results of operations.

▪UScellular’s smaller scale relative to larger competitors that may have greater financial and other resources than UScellular could cause UScellular to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations.

▪Changes in various business factors, including changes in demand, consumer preferences and perceptions, price competition, churn from customer switching activity and other factors, could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪Advances or changes in technology could render certain technologies used by UScellular obsolete, could put UScellular at a competitive disadvantage, could reduce UScellular’s revenues or could increase its costs of doing business.

▪Complexities associated with deploying new technologies present substantial risk and UScellular investments in unproven technologies may not produce the benefits that UScellular expects.

▪Costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of UScellular’s business could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪A failure by UScellular to complete significant network construction and systems implementation activities as part of its plans to improve the quality, coverage, capabilities and capacity of its network, support and other systems and infrastructure could have an adverse effect on its operations.

▪Difficulties involving third parties with which UScellular does business, including changes in UScellular's relationships with or financial or operational difficulties of key suppliers or independent agents and third-party national retailers who market UScellular’s services, could adversely affect UScellular's business, financial condition or results of operations.

▪A failure by UScellular to maintain flexible and capable telecommunication networks or information technology, or a material disruption thereof, could have an adverse effect on UScellular’s business, financial condition or results of operations.

Financial Risk Factors

▪Uncertainty in UScellular’s future cash flow and liquidity or the inability to access capital, deterioration in the capital markets, other changes in UScellular’s performance or market conditions, changes in UScellular’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to UScellular, which could require UScellular to reduce its construction, development or acquisition programs, reduce the amount of wireless spectrum licenses acquired, and/or reduce or cease share repurchases.

▪UScellular has a significant amount of indebtedness which could adversely affect its financial performance and in turn adversely affect its ability to make payments on its indebtedness, comply with terms of debt covenants and incur additional debt.

▪UScellular’s assets and revenue are concentrated in the U.S. wireless telecommunications industry. Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry.

▪UScellular has significant investments in entities that it does not control. Losses in the value of such investments could have an adverse effect on UScellular’s financial condition or results of operations.

Regulatory, Legal and Governance Risk Factors

▪Failure by UScellular to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect UScellular’s business, financial condition or results of operations.

▪UScellular receives significant regulatory support, and is also subject to numerous surcharges and fees from federal, state and local governments – the applicability and the amount of the support and fees are subject to great uncertainty, including the ability to pass through certain fees to customers, and this uncertainty could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪Settlements, judgments, restraints on its current or future manner of doing business and/or legal costs resulting from pending and future litigation could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪The possible development of adverse precedent in litigation or conclusions in professional studies to the effect that radio frequency emissions from wireless devices and/or cell sites cause harmful health consequences, including cancer or tumors, or may interfere with various electronic medical devices such as pacemakers, could have an adverse effect on UScellular's business, financial condition or results of operations.

▪Claims of infringement of intellectual property and proprietary rights of others, primarily involving patent infringement claims, could prevent UScellular from using necessary technology to provide products or services or subject UScellular to expensive intellectual property litigation or monetary penalties, which could have an adverse effect on UScellular’s business, financial condition or results of operations.

▪There are potential conflicts of interests between TDS and UScellular.

▪Certain matters, such as control by TDS and provisions in the UScellular Restated Certificate of Incorporation, may serve to discourage or make more difficult a change in control of UScellular or have other consequences.

General Risk Factors

▪UScellular has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, which could have an adverse effect on UScellular's business, financial condition or results of operations.

▪Disruption in credit or other financial markets, a deterioration of U.S. or global economic conditions or other events could, among other things, impede UScellular’s access to or increase the cost of financing its operating and investment activities and/or result in reduced revenues and lower operating income and cash flows, which would have an adverse effect on UScellular’s business, financial condition or results of operations.

▪The impact of public health emergencies, such as the COVID-19 pandemic, on UScellular's business is uncertain, but depending on duration and severity could have a material adverse effect on UScellular's business, financial condition or results of operations.

Risk Factors

In addition to the information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in UScellular’s Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect UScellular’s business, financial condition or future results. The risks described in this Form 10-Q and the Form 10-K for the year ended December 31, 2020, may not be the only risks that could affect UScellular. Additional unidentified or unrecognized risks and uncertainties could materially adversely affect UScellular’s business, financial condition and/or operating results. Subject to the foregoing, UScellular has not identified for disclosure any material changes to the risk factors as previously disclosed in UScellular’s Annual Report on Form 10-K for the year ended December 31, 2020.

Quantitative and Qualitative Disclosures about Market Risk

Market Risk

Refer to the disclosure under Market Risk in UScellular’s Form 10-K for the year ended December 31, 2020, for additional information, including information regarding required principal payments and the weighted average interest rates related to UScellular’s Long-term debt. The changes to such information since December 31, 2020 were as follows: in February 2021 UScellular borrowed $217 million under its senior term loan credit agreement and in March 2021 UScellular borrowed $275 million under its receivables securitization agreement. Such transactions changed the weighted average interest rate on long-term debt obligations to 5.6% at March 31, 2021 from 6.3% at December 31, 2020.

See Note 3 — Fair Value Measurements in the Notes to Consolidated Financial Statements for additional information related to the fair value of UScellular’s Long-term debt as of March 31, 2021.