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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2024
USM Logo.jpg
UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-09712 62-1147325
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

8410 West Bryn Mawr, Chicago, Illinois 60631
(Address of principal executive offices and zip code)

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

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Shares, $1 par valueUSMNew York Stock Exchange
6.25% Senior Notes due 2069UZDNew York Stock Exchange
5.50% Senior Notes due 2070UZENew York Stock Exchange
5.50% Senior Notes due 2070UZFNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐
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.


Item 1.01. Entry into a Material Definitive Agreement

On November 6, 2024, United States Cellular Corporation (“USCC”), certain subsidiaries of USCC (collectively, “Sellers”), and New Cingular Wireless PCS, LLC (“AT&T”), a subsidiary of AT&T Inc., entered into a License Purchase Agreement (the “AT&T Purchase Agreement”) pursuant to which, among other things, Sellers have agreed to sell select spectrum assets to AT&T for approximately $1.018 billion in the aggregate, payable in cash subject to certain potential adjustments as further described in this Current Report on Form 8-K and in the AT&T Purchase Agreement.

Additional information regarding the AT&T Purchase Agreement is provided below.

AT&T Purchase Agreement

AT&T has agreed to purchase wireless spectrum licenses in the 3.45 GHz band, as well as select licenses for spectrum in the 700 MHz band (collectively, the “Licenses”) for approximately $1.018 billion in the aggregate (the “AT&T Purchase Price”), payable in cash, subject to certain potential adjustments as further discussed below and in the AT&T Purchase Agreement.

Approximately $232 million of the AT&T Purchase Price has been allocated to certain Licenses in the 700 MHz band (the “Designated Entity Spectrum Licenses”) held by an entity (the “Designated Entity”) in which a subsidiary of USCC is a non-controlling limited partner. The AT&T Purchase Agreement includes specific conditions pertaining to the transfer of the Designated Entity Spectrum Licenses. The sale of the Designated Entity Spectrum Licenses may occur at the same time as the closing of the sale of the remainder of the Licenses subject to the AT&T Purchase Agreement (the “USCC Closing”) or in one or more other closings (a closing of a sale of Designated Entity Spectrum Licenses, a “Designated Entity License Closing”, and together with the USCC Closing, each a “Closing” and collectively the “Closings”). The portion of the AT&T Purchase Price allocated to the Designated Entity Spectrum Licenses will be paid only upon the closing of the sale of the relevant Designated Entity Spectrum Licenses to AT&T. The AT&T Purchase Agreement provides that the Designated Entity will execute a joinder to the AT&T Purchase Agreement and become a Seller thereunder only when all of the equity interests of the Designated Entity have become owned, directly or indirectly, by USCC or one of its subsidiaries.

With respect to Licenses in the 3.45 GHz band that are the subject of the AT&T Purchase Agreement, the AT&T Purchase Agreement provides for a holdback by AT&T of an amount equal to 20% of the purchase price allocable to any such License that is: (i) if the USCC Closing occurs on or before January 31, 2026, encumbered by the T-Mobile Short-Term Spectrum Manager Lease, dated as of September 12, 2024, by and among T-Mobile License, LLC and the subsidiaries of USCC named therein (the “T-Mobile Short-Term Spectrum Manager Lease”) immediately following the USCC Closing; or (ii) if the USCC Closing occurs after January 31, 2026, was not subject to a pre-closing spectrum lease contemplated by the AT&T Purchase Agreement prior to January 31, 2026. Any such holdback amount will be retained by AT&T until the earlier of (i) one year following the USCC Closing; and (ii) on a License-by-License basis, if a License ceases to be encumbered by the T-Mobile Short-Term Spectrum Manager Lease prior to January 31, 2026, the date on which such License ceases to be so encumbered.

The AT&T Purchase Price is subject to other potential adjustments, as set forth in the AT&T Purchase Agreement, in the event that Licenses subject to the AT&T Purchase Agreement are ultimately excluded from the transaction in various circumstances, including in order to mitigate certain requirements imposed in connection with regulatory approvals that would exceed “regulatory material effect” thresholds described in the AT&T Purchase Agreement or to address other circumstances interfering with the sale of such Licenses to AT&T.

USCC, Sellers and AT&T have each made various representations and warranties and have agreed to specified covenants. The parties have agreed to cooperate with each other and use their respective reasonable best efforts to obtain as promptly as reasonably practicable required regulatory approvals from any applicable governmental authority in order to consummate the transactions contemplated by the AT&T Purchase Agreement, in each case subject to specific limitations set forth in the AT&T Purchase Agreement.

Each Closing is subject to customary closing conditions, including: (i) the expiration or termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and (ii) the receipt of approval from the Federal Communications Commission, and, in each case, such regulatory approval shall be free of any “regulatory material effect.” In addition, Sellers’ obligations to consummate the USCC Closing, and Sellers’ obligation to consummate the closing of the sale of certain Designated Entity Spectrum Licenses to which approximately $182 million of the AT&T Purchase Price is allocated, are subject to the condition that the closing of the transactions contemplated by the Securities Purchase Agreement, dated as of May 24, 2024, by and among USCC, Telephone and Data Systems, Inc. (“TDS”), T-Mobile US, Inc. and USCC Wireless Holdings, LLC (the “T-Mobile Purchase Agreement”) has occurred. Each party’s obligation to consummate a Designated Entity License Closing is subject to the condition that all of the equity interests of the Designated Entity shall have become directly or indirectly wholly-owned by USCC or one of its subsidiaries.

The AT&T Purchase Agreement provides for specified termination rights. Among other customary termination rights, either of the parties to the AT&T Purchase Agreement may terminate the agreement with respect to any Closing that does not occur on or before November 6, 2026, subject to three twelve-month extensions by either party (for a total additional period of three years in the aggregate) if certain closing conditions including those relating to required regulatory approvals, the closing of the transactions contemplated by the T-Mobile Purchase Agreement and the Designated Entity becoming wholly-owned by USCC, remain outstanding at such time. The AT&T Purchase Agreement may also be terminated by Sellers with respect to all Licenses other than certain Designated Entity Spectrum Licenses to which approximately $50 million of the AT&T Purchase Price is allocated, as further described in the AT&T Purchase Agreement, if the T-Mobile Purchase Agreement shall have been terminated.


The AT&T Purchase Agreement also provides that Sellers and AT&T will indemnify one another in certain circumstances, including for certain breaches of the AT&T Purchase Agreement and for liabilities assumed by AT&T or retained by Sellers and USCC, as the case may be, subject to the terms and conditions set forth in the AT&T Purchase Agreement. Under certain circumstances, a portion of the AT&T Purchase Price may be required to be placed in escrow. Except in the case of fraud or intentional breach, Sellers’ indemnification obligations pursuant to the AT&T Purchase Agreement for breaches of its representations, warranties and covenants are generally capped at each Seller’s pro rata portion of the AT&T Purchase Price, with breaches of certain “non-fundamental” representations and warranties being subject to a cap equal to 5% of each Seller’s pro rata portion of the AT&T Purchase Price. USCC has guaranteed to AT&T the full performance by each Seller of its indemnification obligations under the AT&T Purchase Agreement, subject to the terms and conditions set forth in the AT&T Purchase Agreement.

The foregoing description of the AT&T Purchase Agreement is not complete and is qualified in its entirety by the terms and conditions of the AT&T Purchase Agreement, which will be subsequently filed with the Securities and Exchange Commission.

Item 5.07. Submission of Matters to a Vote of Security Holders

On November 6, 2024, following the execution of the AT&T Purchase Agreement, TDS, being the sole holder of Series A Common Stock, par value $1.00 per share, and majority holder of Common Stock, par value $1.00 per share, of USCC, executed a written consent adopting the AT&T Purchase Agreement and approving the transactions contemplated thereby, and a written consent approving the divestiture of the remaining wireless spectrum licenses held by USCC and its subsidiaries (other than those that are the subject of the T-Mobile Purchase Agreement, the License Purchase Agreement dated as of October 17, 2024 by and among USCC, certain subsidiaries of USCC and Verizon Communications Inc. or the AT&T Purchase Agreement) on such terms as may be approved by USCC’s Board of Directors and, in accordance with the requirements of the applicable delegations of authority, the Board of Directors of TDS. No further approval of the stockholders of USCC is required to approve the AT&T Purchase Agreement or such other wireless spectrum licenses.

Item 8.01. Other Events

On November 7, 2024, USCC issued a press release announcing the execution of the AT&T Purchase Agreement. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated in this Item 8.01 by reference.

The transaction announced today is part of USCC's previously-announced objective of opportunistically monetizing the spectrum that was not included in its proposed sale to T-Mobile. Additional information regarding USCC’s progress against this objective is included in Exhibit 99.2, which is incorporated into this Item 8.01 by reference.

Upon the consummation of the Closings, USCC expects to recognize a gain, in the aggregate, in connection with the transactions contemplated by the AT&T Purchase Agreement.

Item 9.01. Financial Statements and Exhibits
(d)   The following exhibits are being filed herewith:
Exhibit Number Description of Exhibits
99.1
99.2
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.


SIGNATURES
    
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
    
  UNITED STATES CELLULAR CORPORATION
  
    
Date:November 7, 2024By:/s/ Douglas W. Chambers
   Douglas W. Chambers
   Executive Vice President, Chief Financial Officer and Treasurer
   
   
    
    


Exhibit 99.1
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UScellular announces sale of select spectrum assets to AT&T for $1.018 billion

CHICAGO (November 7, 2024) – United States Cellular Corporation (NYSE: USM) today has announced that it has entered into an agreement with AT&T (NYSE: T) to sell a portion of the Company’s retained spectrum licenses for total consideration of $1.018 billion. The transaction is part of the objective UScellular announced on May 28, 2024, to opportunistically monetize the spectrum that was not included in the proposed sale to T-Mobile; and follows the transactions previously announced on October 18, 2024, to sell a portion of the retained spectrum licenses to Verizon and two other mobile network operators.

“We are pleased with the significant value that will be realized in the various transactions recently announced,” said Laurent C. Therivel, President and CEO. “This agreement adds a fourth mobile network operator, in addition to T-Mobile, to the list of those whose subscribers will benefit from the sale of our spectrum licenses. As with the other mobile network operators, we are confident that AT&T can put it to productive use in communities throughout the U.S. Furthermore, the terms of the agreement will ensure that there will be continued, uninterrupted service for UScellular customers in the interim.”

Following this transaction, as well as those previously announced, UScellular will have reached definitive agreements to monetize approximately 55%, measured on a MHz-Pops basis, of the spectrum holdings (excluding mmWave) that were excluded from the proposed sale to T-Mobile, for a total consideration of approximately $2.02 billion. Including the proposed T-Mobile transaction, UScellular will have reached agreements to monetize approximately 70% of its total spectrum holdings (excluding mmWave), measured on a MHz-Pops basis.

“After our proposed sales, we will be left with 1.86 billion MHz-Pops of low and mid-band spectrum, as well as 17.2 billion MHz-Pops of mmWave spectrum, with the substantial majority of retained value in the C-band spectrum,” added Therivel.

“The C-band licenses have a number of attributes that we believe are favorable to their long-term value. First, our C-band licenses are positioned in an attractive mid-band frequency that can deliver outstanding speed and capacity. Second, there is a substantial 5G ecosystem of equipment vendors and existing infrastructure that uses C-band. Finally, they have a lengthy build-out timeline, with first and second build-out dates of 2029 and 2033, respectively. This provides ample time and optionality for us to either monetize or deploy the spectrum in the future. We will continue to look for ways to opportunistically monetize the C-band, as well as the other remaining spectrum.”

Transaction Details
The agreement with AT&T includes the sale of 1,250 million MHz-Pops of 3.45 GHz and 331 million MHz-Pops of 700 MHz B/C block licenses for a total of $1.018 billion. The purchase price is payable in cash and subject to certain potential adjustments, as specified in the purchase agreement.

Substantially all of the transaction is contingent upon the closing of the sale of the UScellular wireless operations and select spectrum assets to T-Mobile and is subject to the receipt of regulatory approvals and satisfaction of customary closing conditions.

Some of the licenses being sold to AT&T are owned by a third party. Their sale to AT&T is contingent upon UScellular’s purchase, which is pending receipt of regulatory approval, of the equity in the third party that UScellular does not currently own. Those licenses cover approximately 15% of the total MHz-Pops represented in the announced transaction.

Other Transaction Details
TDS, in its role as the 83 percent shareholder of UScellular, has delivered its written consent approving the AT&T transaction. No further action by UScellular’s shareholders will be needed or solicited in connection with the transaction.

Advisors
Citigroup Global Markets Inc. is serving as lead financial advisor and Centerview Partners LLC is serving as financial advisor to TDS. TD Securities (USA) LLC and Wells Fargo are also serving as financial advisors to TDS. Wilkinson Barker Knauer, LLP is serving as lead transactional and FCC regulatory counsel to both TDS and UScellular. In addition, Clifford Chance LLP is serving as regulatory advisor to both TDS and UScellular and Sidley Austin LLP is serving as legal advisor to TDS. PJT Partners LP is serving as financial advisor and Cravath, Swaine & Moore LLP is serving as legal advisor to the independent directors of UScellular.

About UScellular
United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to customers with 4.5 million retail connections in 21 states. The Chicago-based company had 4,200 full- and part-time associates as of September 30, 2024. At the end of the third quarter of 2024, Telephone and Data Systems, Inc. owned approximately 83 percent of UScellular. For more information about UScellular, visit uscellular.com.

Contacts
Colleen Thompson, Vice President - Corporate Relations of TDS
colleen.thompson@tdsinc.com

Julie Mathews, IRC, Director - Investor Relations of TDS
julie.mathews@tdsinc.com



Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether the previously announced transaction whereby UScellular has agreed to sell its wireless operations and selected spectrum assets to T-Mobile will be successfully completed or whether UScellular will be able to find buyers at mutually agreeable prices for its remaining spectrum assets; whether the previously announced transaction with Verizon will be successfully completed; whether the transactions announced today with AT&T will be successfully completed; whether these transactions will have an adverse impact on UScellular’s business; and other risks and uncertainties that are more fully described under “Risk Factors” in the most recent filing of UScellular's Form 10-K, as updated by any UScellular Form 10-Q filed subsequent to such Form 10-K.

For more information about UScellular, visit: www.uscellular.com


Exhibit 99.2

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v3.24.3
Document and Entity Information Document
Nov. 06, 2024
Entity Central Index Key 0000821130
Entity Emerging Growth Company false
Pre-commencement Issuer Tender Offer false
Pre-commencement Tender Offer false
Soliciting Material false
Written Communications false
Document Type 8-K
Document Period End Date Nov. 06, 2024
Entity Incorporation, State or Country Code DE
Entity Registrant Name UNITED STATES CELLULAR CORPORATION
Entity File Number 001-09712
Entity Tax Identification Number 62-1147325
Entity Address, Address Line One 8410 West Bryn Mawr
Entity Address, City or Town Chicago
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60631
City Area Code (773)
Local Phone Number 399-8900
Amendment Flag false
Common Shares  
Title of 12(b) Security Common Shares, $1 par value
Trading Symbol USM
Security Exchange Name NYSE
6.25% Senior Notes  
Title of 12(b) Security 6.25% Senior Notes due 2069
Trading Symbol UZD
Security Exchange Name NYSE
5.50% Senior Notes  
Title of 12(b) Security 5.50% Senior Notes due 2070
Trading Symbol UZE
Security Exchange Name NYSE
5.50% Senior Notes  
Title of 12(b) Security 5.50% Senior Notes due 2070
Trading Symbol UZF
Security Exchange Name NYSE
United States Cellular (NYSE:UZF)
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