US Cellular 2015 Annual Report Download - page 49

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2013 Commentary
Cash Flows from Operating Activities
Cash flows from operating activities were $494.6 million in 2013. Accounts receivable grew substantially due primarily to
billing delays encountered during the conversion to a new U.S. Cellular billing system in the third quarter of 2013. TDS
paid income taxes, net of refunds, of $175.6 million in 2013. The change in inventory was due primarily to higher costs
per unit related to 4G LTE smartphones.
Cash Flows from Investing Activities
Cash flows used for investing activities were $260.7 million in 2013. Cash used for additions to property, plant and
equipment totaled $883.8 million in 2013. Cash paid for acquisitions and licenses in 2013 was $314.6 million which
includes $264.1 million related to a Cable acquisition, $34.0 million related to an HMS acquisition and $16.5 million
related to FCC licenses. Cash received from divestitures in 2013 was $811.1 million which includes $490.6 million related
to the Divestiture Transaction and $312.0 million related to Licenses. See Note 6 — Acquisitions, Divestitures and
Exchanges in the Notes to Consolidated Financial Statements for additional information related to these acquisitions and
divestitures.
TDS realized cash proceeds of $115.0 million in 2013 related to the maturities of its investments in U.S. Treasury Notes,
corporate notes and certificates of deposit.
Cash Flows from Financing Activities
Cash flows used for financing activities were $144.4 million in 2013. On June 25, 2013, U.S. Cellular paid a special cash
dividend of $5.75 per share, for an aggregate amount of $482.3 million, to all holders of U.S. Cellular Common Shares
and Series A Common Shares as of June 11, 2013. Of the $482.3 million paid, TDS received $407.1 million while
noncontrolling public shareholders received $75.2 million. The cash paid to noncontrolling public shareholders is
presented as U.S. Cellular dividends paid to noncontrolling public shareholders on the Consolidated Statement of Cash
Flows.
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. Changes in
financial condition during 2015 are as follows:
Cash and cash equivalents
Cash and cash equivalents increased $512.7 million driven primarily by proceeds received from U.S. Cellular’s issuance
of $300 million 7.25% Senior Notes and U.S. Cellular’s $225 million draw on the Term Loan. Cash flow from operating
activities less cash used for additions to property, plant and equipment yielded a net cash reduction of $10.9 million.
Cash received from divestitures also exceeded Cash paid for acquisitions and licenses by $56.0 million.
Accounts receivable, net
Accounts receivable, net increased $119.2 million primarily as a result of the $136.7 million increase attributable to
equipment installment plans. U.S. Cellular implemented equipment installment plans on a broad basis in 2014.
Inventory, net
Inventory, net decreased $115.5 million due primarily to selling inventory on hand at December 31, 2014 and better
management of purchasing and overall inventory levels based upon anticipated demand and promotional activities.
41
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS