In This Article:
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Free Cash Flow: $79 million in Q1 2025, an $18 million increase year-over-year.
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Third-Party Tower Revenues: Increased by 6% in the quarter.
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Capital Expenditures: Declined as 5G coverage builds are largely completed.
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Net Proceeds from T-Mobile Transaction: Expected to be closer to $4.3 billion.
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Debt Repayment: $870 million in debt requires repayment upon transaction close.
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Employee Liabilities: Cash outflow expected in the range of $30 million to $40 million for accrued wages and benefits.
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Severance Obligations: Expected to be in the range of $60 million to $80 million.
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Cash Income Tax Obligations: Related to T-Mobile transaction estimated between $225 million to $325 million.
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Other Cash Outflows: $80 million to $90 million related to banking fees and other adjustments.
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Fiber Service Addresses: Delivered 14,000 new addresses in the quarter.
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Residential Broadband Net Additions: 2,800 in Q1 2025.
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Operating Revenues: Down 3% in the quarter compared to prior year.
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Cash Expenses: Increased 6% or $11 million in the quarter.
Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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United States Cellular Corp (NYSE:USM) reported a year-over-year increase in third-party tower revenues by 6%, driven by new co-locations and escalators on renewed leases.
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The company achieved $79 million in free cash flow in the first quarter of 2025, marking an $18 million increase over the same quarter last year.
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USM has successfully extended near-term bank maturities and amended revolvers to ensure financial flexibility and liquidity in anticipation of the T-Mobile transaction close.
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The company is making significant progress in its fiber program, expanding its footprint by over 30% in the last three years, with further growth opportunities identified.
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USM expects to declare a special dividend to shareholders upon the anticipated closing of the transaction with T-Mobile, subject to regulatory approval.
Negative Points
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USM continues to face challenges with negative net additions in handset customers, which puts pressure on service revenues.
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The company is operating in a highly competitive environment with aggressive promotions from competitors, including multi-year price locks and contract buyouts.
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USM anticipates not receiving most of the $100 million contingent on achieving certain performance metrics in the T-Mobile transaction, likely reducing the purchase price to $4.3 billion.
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The company expects cash income tax obligations related to the T-Mobile transaction to range between $225 million to $325 million.
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USM is facing ongoing regulatory uncertainties, particularly concerning the timing of approvals for designated entity spectrum transactions.