US Cellular 2014 Annual Report Download - page 26

United States Cellular Corporation
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Financing
Revolving Credit Facility
U.S. Cellular has a revolving credit facility available for general corporate purposes including spectrum
purchases and capital expenditures, with a maximum borrowing capacity of $300.0 million. As of
December 31, 2014, the unused capacity under this agreement was $282.5 million. The continued
availability of the revolving credit facility requires U.S. Cellular to comply with certain negative and
affirmative covenants, maintain certain financial ratios and make representations regarding certain
matters at the time of each borrowing. The covenants also prescribe certain terms associated with
intercompany loans from TDS or TDS subsidiaries to U.S. Cellular or U.S. Cellular subsidiaries. There
were no intercompany loans at December 31, 2014 or 2013. U.S. Cellular believes that it was in
compliance as of December 31, 2014 with all of the financial covenants and requirements set forth in its
revolving credit facility.
See Note 11—Debt in the Notes to Consolidated Financial Statements for additional information
regarding the revolving credit facility.
Term Loan Facility
On January 21, 2015, U.S. Cellular entered into a term loan credit facility relating to $225.0 million in
debt. The term loan must be drawn in one or more advances by the six month anniversary of the date of
the agreement; amounts not drawn by that time will cease to be available. Amounts repaid or prepaid
under the term loan facility may not be reborrowed. The maturity date of the term loan would accelerate
in the event of a change in control.
The term loan is available for general corporate purposes including spectrum purchases and capital
expenditures. The term loan is unsecured except for a lien on all equity which U.S. Cellular may have in
the loan administrative agent, CoBank ACB, subject to certain limitations. The continued availability of the
term loan facility requires U.S. Cellular to comply with certain negative and affirmative covenants,
maintain certain financial ratios and make representations regarding certain matters at the time of each
borrowing, that are substantially the same as those in the U.S. Cellular revolving credit facility described
above.
See Note 11—Debt in the Notes to Consolidated Financial Statements for additional information
regarding the term loan facility.
Long-Term Financing
U.S. Cellular has an effective shelf registration statement on Form S-3 to issue senior or subordinated
debt securities. The proceeds from any such issuance may be used for general corporate purposes,
including: the possible reduction of other long-term debt, spectrum purchases, and capital expenditures;
in connection with acquisition, construction and development programs; the reduction of short-term debt;
for working capital; to provide additional investments in subsidiaries; or the repurchase of shares. The
U.S. Cellular shelf registration statement permits U.S. Cellular to issue at any time and from time to time
senior or subordinated debt securities in one or more offerings. The ability of U.S. Cellular to complete
an offering pursuant to such shelf registration statement is subject to market conditions and other factors
at the time.
In December 2014, U.S. Cellular sold and issued $275 million of 7.25% Senior Notes due in 2063 for
general corporate purposes including spectrum purchases and capital expenditures, reducing the
available amount on U.S. Cellular’s shelf registration statement from $500 million to $225 million. U.S.
Cellular has the authority to replenish this shelf registration statement back to $500 million.
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