U.S. Cellular Reports Second Quarter 2010 Results

Revises 2010 financial guidance

News provided by

Aug 05, 2010, 07:58 ET

CHICAGO, Aug. 5 /PRNewswire-FirstCall/ --

Note: Comparisons are year over year unless otherwise noted.

2Q 2010 Highlights

7,000 retail net additions, reflecting a gain of 29,000 prepaid customers and a loss of 22,000 postpaid customers.
Service revenues were $972.6 million.
33 percent increase in data revenues to $215.3 million, representing 22 percent of total service revenues.
Retail service ARPU (average revenue per unit) was $46.81 compared to $46.82.
Retail postpaid churn remained low at 1.4 percent; postpaid customers comprised 94 percent of retail customers.
Expanded 3G network to cover approximately 98 percent of customers.
5 percent increase in cell sites in service to 7,416.
Repurchased 395,344 common shares for $16.2 million.

As previously announced, U.S. Cellular will hold a teleconference Aug. 5 at 9:30 a.m. CDT. Interested parties may listen to the call live by accessing the Conference Calls page of www.teldta.com or uscellular.com.

United States Cellular Corporation (NYSE: USM) reported service revenues of $972.6 million for the second quarter of 2010, versus $974.3 million in the comparable period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $40.8 million and $0.47, respectively, for the second quarter of 2010, compared to $81.8 million and $0.94, respectively, in the comparable period one year ago.

"We faced significant challenges from competition and the economy in the second quarter of 2010," said U.S. Cellular president and CEO Mary N. Dillon, who joined the company June 1. "Consequently, our performance results were mixed. We achieved improvements in retail net additions and customer churn, and data revenues grew by 33 percent. However, total service revenues and operating income were below our expectations. We continue to feel the impact of lower voice revenues, reflecting industry competition as more customers choose value-priced plans, and investments in the major initiatives currently underway that will enable us to build a strong foundation for future growth. As part of these initiatives, we recently implemented new programs that enable associates in our retail stores and customer care centers to better meet our customers' needs by offering more targeted service and product recommendations.

"Going forward, we plan to continue to drive data revenue growth with a strong smartphone portfolio that includes the Android™-powered phones our customers are asking for. We launched the Samsung Acclaim™ in early July, and we plan to offer the much-anticipated HTC Desire™ in August and the Samsung Galaxy S™ later this year. Now that we offer data services to the vast majority of customers across our fast and reliable 3G network, we expect sales of data-optimized devices—which were 24 percent of all devices sold in the quarter—to continue to grow rapidly. And we're excited about giving our customers even more innovative programs like Battery Swap and Overage Protection that show we have our customers' backs.

"I'm honored to be leading a company that is so thoroughly unified around its commitment to ensuring positive experiences for its customers. Although we face a number of challenges, we have a culture of success—the Dynamic Organization—that will enable us to overcome these challenges by leveraging our strengths. U.S. Cellular's customers believe that we offer something better than our competitors, and we intend to prove that they can rely on us for service and communications experiences that are above and beyond what customers have come to expect from a wireless provider."

Guidance

Guidance for the year ending Dec. 31, 2010 as of Aug. 5, 2010 is provided below, compared to previous guidance provided on May 10, 2010. There can be no assurance that final results will not differ materially from this guidance.


		Current guidance	Previous guidance
	Service revenues	$3,925-$4,000 million	$3,975-$4,075 million
	Adjusted OIBDA(1)	$800-$850 million	$850-$950 million
	Operating income	$200-$250 million	$250- $350 million
	Depreciation, amortization and accretion(2)	Approx. $600 million	Unchanged
	Capital expenditures	Approx. $600 million	Unchanged
(1) Adjusted OIBDA is defined as operating income excluding the effects of: depreciation, amortization and accretion (OIBDA); the net gain or loss on asset disposals (if any); and the loss on impairment of assets (if any). This measure also may be commonly referred to by management as operating cash flow. This measure should not be confused with cash flows from operating activities, which is a component of the consolidated statement of cash flows. (2) The 2010 estimated results include estimated losses on disposals of assets, but does not include an estimate for losses on impairment of assets, since these cannot be predicted.

The foregoing guidance represents the views of management as of Aug. 5, 2010 and should not be assumed to be accurate as of any other date. U.S. Cellular undertakes no legal duty to update such information, whether as a result of new information, future events or otherwise.

Conference call information

U.S. Cellular will hold a conference call on Aug. 5, 2010 at 9:30 a.m. CDT.

Access the live call on the Conference Calls page of uscellular.com at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&eventID=3258722.
Access the call by phone at 877/407-8029 (US/Canada) no pass code required.

Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page of uscellular.com. The call will be archived on the Conference Calls page of uscellular.com.

About U.S. Cellular

United States Cellular Corporation, the nation's sixth-largest wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to approximately 6.1 million customers in 26 states. The Chicago-based company employed approximately 8,900 full-time equivalent associates as of June 30, 2010. At the end of the quarter, Telephone and Data Systems, Inc. owned 82 percent of U.S. Cellular.

Visit uscellular.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.

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: The ability of the company to successfully manage and grow its markets; the economy; competition; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded our debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; changes in customer growth rates, average monthly revenue per unit, churn rates, roaming revenue and terms, the availability of handset devices, or the mix of products and services offered by the company; and the ability to obtain or maintain roaming arrangements with other carriers. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K used by U.S. Cellular to furnish this press release to the SEC, which are incorporated by reference herein.


	United States Cellular Corporation Summary Operating Data

Quarter Ended			6/30/2010		3/31/2010		12/31/2009		9/30/2009		6/30/2009
Total population
	Consolidated markets (1)			90,468,000		90,468,000		89,712,000		85,118,000		83,726,000
	Consolidated operating markets (1)			46,546,000		46,546,000		46,306,000		46,306,000		46,306,000
Market penetration at end of period
	Consolidated markets (2)			6.8%		6.8%		6.8%		7.2%		7.4%
	Consolidated operating markets (2)			13.2%		13.2%		13.3%		13.2%		13.3%
All customers
	Total at end of period			6,144,000		6,147,000		6,141,000		6,131,000		6,155,000
	Gross additions			349,000		358,000		399,000		386,000		317,000
	Net additions (losses)			(3,000)		6,000		10,000		(24,000)		(88,000)
Retail customers
	Total at end of period			5,775,000		5,768,000		5,744,000		5,705,000		5,711,000
	Gross additions			307,000		305,000		354,000		351,000		286,000
	Net retail additions (losses) (3)			7,000		24,000		39,000		(6,000)		(59,000)
		Net postpaid additions (losses)		(22,000)		(9,000)		26,000		8,000		(32,000)
		Net prepaid additions (losses)		29,000		33,000		13,000		(14,000)		(27,000)
Service revenues components (000s)
	Voice and other retail service		$	648,565	$	663,759	$	677,107	$	690,576	$	708,847
	Data service			215,271		201,280		189,759		174,286		161,955
	Total retail service		$	863,836	$	865,039	$	866,866	$	864,862	$	870,802
	Inbound roaming			60,902		51,942		61,728		68,767		62,223
	Other			47,838		48,027		56,814		50,289		41,323
Total service revenues (000s) (4)			$	972,576	$	965,008	$	985,408	$	983,918	$	974,348

	Divided by average customers (000s)			6,151		6,137		6,139		6,138		6,199
	Divided by three months in each quarter			3		3		3		3		3

Average monthly revenue per unit (5)			$	52.71	$	52.41	$	53.51	$	53.43	$	52.39
	Voice and other retail service (5)		$	35.14	$	36.05	$	36.77	$	37.51	$	38.11
	Data service (5)		$	11.67	$	10.93	$	10.30	$	9.46	$	8.71
	Total retail service (5)		$	46.81	$	46.98	$	47.07	$	46.97	$	46.82

	Inbound roaming (5)		$	3.30	$	2.82	$	3.35	$	3.73	$	3.35
	Other (5)		$	2.60	$	2.61	$	3.09	$	2.73	$	2.22
Postpaid churn rate (6)				1.4%		1.4%		1.6%		1.7%		1.7%
Capital expenditures (000s)			$	133,500	$	121,500	$	189,000	$	128,900	$	91,200
Cell sites in service				7,416		7,310		7,279		7,161		7,043

(1) Used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively, which is calculated by dividing customers by the total market population (without duplication of population in overlapping markets). (2) Calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated markets and consolidated operating markets, respectively, as estimated by Claritas. (3) Calculated by adding net postpaid additions (losses) and net prepaid additions (losses). (4) U.S. Cellular adjusted previously reported service revenues for the three months ended March 31, 2010 and all quarterly periods in 2009. Previously reported service revenues for the quarterly period ended March 31, 2010 and for the quarterly periods ended December 31, September 30, and June 30, 2009 (as reported in U.S. Cellular's Form 8-K filed on May 10, 2010 for all such periods), were $965.2 million, $984.9 million, $983.4 million and $974.1 million, respectively. (5) Calculated by dividing the components of service revenues by the average customers and number of months in the quarter. (6) Calculated by dividing the total postpaid customer disconnects during the quarter by the average postpaid customer base for the quarter.


United States Cellular Corporation Consolidated Statement of Operations Highlights
Three Months Ended June 30,
(Unaudited, dollars and shares in thousands, except per share amounts)

								Increase (Decrease)
				2010		2009 (1)		Amount		Percent
Operating revenues
	Service			$	972,576	$	974,348	$	(1,772)		—
	Equipment sales				57,317		67,795		(10,478)		(15%)
		Total operating revenues			1,029,893		1,042,143		(12,250)		(1%)
Operating expenses
	System operations (excluding Depreciation,
		amortization and accretion reported below)			213,542		194,709		18,833		10%
	Cost of equipment sold				161,965		156,055		5,910		4%
	Selling, general and administrative				445,177		411,153		34,024		8%
	Depreciation, amortization and accretion				144,455		138,777		5,678		4%
	Loss on asset disposals, net				1,250		2,611		(1,361)		(52%)
		Total operating expenses			966,389		903,305		63,084		7%

Operating income					63,504		138,838		(75,334)		(54%)

Investment and other income (expense)
	Equity in earnings of unconsolidated entities				25,753		24,794		959		4%
	Interest and dividend income				862		751		111		15%
	Interest expense				(16,438)		(19,856)		3,418		17%
	Other, net				472		(2)		474		>100%
		Total investment and other income
			(expense)		10,649		5,687		4,962		87%

Income before income taxes					74,153		144,525		(70,372)		(49%)
	Income tax expense				28,181		56,788		(28,607)		(50%)

Net income					45,972		87,737		(41,765)		(48%)
	Less: Net income attributable to noncontrolling
		interests, net of tax			(5,219)		(5,969)		750		13%
Net income attributable to U.S. Cellular shareholders				$	40,753	$	81,768	$	(41,015)		(50%)

Basic weighted average shares outstanding					86,425		86,992		(567)		(1%)
Basic earnings per share attributable to
	U.S. Cellular shareholders			$	0.47	$	0.94	$	(0.47)		(50%)

Diluted weighted average shares outstanding					86,787		87,177		(390)		—
Diluted earnings per share attributable to
	U.S. Cellular shareholders			$	0.47	$	0.94	$	(0.47)		(50%)
(1) Amounts have been adjusted. See "Revision of Prior Period Amounts" section for additional details.


United States Cellular Corporation Consolidated Statement of Operations Highlights
Six Months Ended June 30,
(Unaudited, dollars and shares in thousands, except per share amounts)

							Increase (Decrease)
			2010		2009 (1)		Amount		Percent
Operating revenues
	Service		$	1,937,584	$	1,957,802	$	(20,218)		(1%)
	Equipment sales			116,166		138,685		(22,519)		(16%)
		Total operating revenues		2,053,750		2,096,487		(42,737)		(2%)
Operating expenses
	System operations (excluding Depreciation,
	amortization and accretion reported below)			420,656		394,697		25,959		7%
	Cost of equipment sold			323,070		341,756		(18,686)		(5%)
	Selling, general and administrative			874,782		819,616		55,166		7%
	Depreciation, amortization and accretion			287,688		276,655		11,033		4%
	Loss on asset disposals, net			6,426		6,556		(130)		(2%)
		Total operating expenses		1,912,622		1,839,280		73,342		4%

Operating income				141,128		257,207		(116,079)		(45%)

Investment and other income (expense)
	Equity in earnings of unconsolidated entities			50,447		50,121		326		1%
	Interest and dividend income			1,883		1,228		655		53%
	Interest expense			(32,962)		(39,283)		6,321		16%
	Other, net			407		278		129		46%
		Total investment and other income (expense)		19,775		12,344		7,431		60%

Income before income taxes				160,903		269,551		(108,648)		(40%)
	Income tax expense			61,843		91,747		(29,904)		(33%)

Net income				99,060		177,804		(78,744)		(44%)
	Less: Net income attributable to noncontrolling
		interests, net of tax		(10,938)		(11,977)		1,039		9%
Net income attributable to U.S. Cellular shareholders			$	88,122	$	165,827	$	(77,705)		(47%)

Basic weighted average shares outstanding				86,500		87,093		(593)		(1%)
Basic earnings per share attributable to
	U.S. Cellular shareholders		$	1.02	$	1.90	$	(0.88)		(46%)

Diluted weighted average shares outstanding				86,873		87,308		(435)		—
Diluted earnings per share attributable to
	U.S. Cellular shareholders		$	1.01	$	1.90	$	(0.89)		(47%)
(1) Amounts have been adjusted. See "Revision of Prior Period Amounts" section for additional details.


United States Cellular Corporation Consolidated Balance Sheet Highlights
(Unaudited, dollars in thousands)

ASSETS

		June 30,		December 31,
		2010		2009 (1)
Current assets
	Cash and cash equivalents	$	232,853	$	294,411
	Short-term investments		135,798		330
	Accounts receivable from customers and other		411,450		425,057
	Inventory		120,304		152,556
	Prepaid income taxes		—		717
	Prepaid expenses		65,219		63,463
	Net deferred income tax asset		21,570		21,570
	Other current assets		48,662		51,013
			1,035,856		1,009,117

Investments
	Licenses		1,445,501		1,435,000
	Goodwill		494,737		494,737
	Customer lists		1,701		4,083
	Investments in unconsolidated entities		163,518		161,481
	Notes and interest receivable – long-term		4,143		4,214
	Long-term investments		40,987		—
			2,150,587		2,099,515

Property, plant and equipment
	In service and under construction		6,096,533		5,884,307
	Less: accumulated depreciation		3,525,193		3,282,969
			2,571,340		2,601,338

Other assets and deferred charges			37,865		38,776

Total assets		$	5,795,648	$	5,748,746
(1) Amounts have been adjusted. See "Revision of Prior Period Amounts" section for additional details.


United States Cellular Corporation Consolidated Balance Sheet Highlights
(Unaudited, dollars in thousands)

LIABILITIES AND SHAREHOLDERS' EQUITY

			June 30,		December 31,
			2010		2009 (1)
Current liabilities
	Current portion of long-term debt		$	86	$	76
	Accounts payable
		Affiliated		11,714		14,732
		Trade		262,279		296,288
	Customer deposits and deferred revenues			144,101		140,248
	Accrued taxes			90,802		57,507
	Accrued compensation			45,086		62,242
	Other current liabilities			80,322		92,884
				634,390		663,977

Deferred liabilities and credits
	Net deferred income tax liability			497,797		513,994
	Other deferred liabilities and credits			273,467		262,412

Long-term debt				867,880		867,522

Commitments and contingencies

Noncontrolling interests with mandatory redemption features				746		727

Equity
U.S. Cellular shareholders' equity
	Series A Common and Common Shares, par value $1 per share			88,074		88,074
	Additional paid-in capital			1,364,129		1,356,322
	Treasury shares			(80,107)		(69,616)
	Retained earnings			2,090,966		2,013,633
		Total U.S. Cellular shareholders' equity		3,463,062		3,388,413

Noncontrolling interests				58,306		51,701

	Total equity			3,521,368		3,440,114

Total liabilities and equity			$	5,795,648	$	5,748,746
(1) Amounts have been adjusted. See "Revision of Prior Period Amounts" section for additional details.

United States Cellular Corporation Schedule of Cash and Cash Equivalents and Investments (Unaudited, dollars in thousands) In an effort to improve investment returns, during the second quarter of 2010, U.S. Cellular elected to use a portion of its cash balance to directly purchase U.S. treasury securities and securities insured by the Federal Deposit Insurance Corporation ("FDIC"), as opposed to investing in money market funds. The maturity dates of such direct investments were staggered in order to maintain cash balances and liquidity at targeted levels. U.S. Cellular also continues to invest in certificates of deposit that are insured by the FDIC. The following table presents U.S. Cellular's cash and cash equivalents; and investments in U.S. treasury securities, commercial paper and certificates of deposit at June 30, 2010 and December 31, 2009.
			June 30,		December 31,
			2010		2009

	Cash and cash equivalents		$	232,853	$	294,411
	Amounts included in short-term investments
		U.S. treasuries		110,451		—
		Certificates of deposit (1)		104		330
		Commercial paper (2)		25,243		—
			$	135,798	$	330
	Amounts included in long-term investments (3)
		U.S. treasuries		10,071		—
		Commercial paper (2)		30,916		—
			$	40,987	$	—

(1) U.S. Cellular's investments in certificates of deposits are insured by the FDIC. (2) U.S. Cellular's investments in commercial paper are insured by the FDIC under its Temporary Liquidity Guarantee Program. (3) U.S. Cellular's long-term investments have maturity dates between July 2011 and December 2012.


United States Cellular Corporation Consolidated Statement of Cash Flows
Six Months Ended June 30,
(Unaudited, dollars in thousands)


				2010		2009 (1)
Cash flows from operating activities
	Net income			$	99,060	$	177,804
	Add (deduct) adjustments to reconcile net income to net
		cash flows from operating activities
			Depreciation, amortization and accretion		287,688		276,655
			Bad debts expense		36,605		39,028
			Stock-based compensation expense		9,012		7,974
			Deferred income taxes, net		(9,935)		19,084
			Equity in earnings of unconsolidated entities		(50,447)		(50,121)
			Distributions from unconsolidated entities		48,491		12,997
			Loss on asset disposals, net		6,426		6,556
			Other operating activities		(464)		1,209
	Changes in assets and liabilities from operations
			Accounts receivable		(22,995)		(68,923)
			Inventory		32,252		(10,391)
			Accounts payable - trade		(34,009)		(41,378)
			Accounts payable - affiliate		(3,017)		4,137
			Customer deposits and deferred revenues		3,854		(5,699)
			Accrued taxes		27,744		71,041
			Accrued interest		121		450
			Other assets and liabilities		(26,680)		(67,300)
					403,706		373,123
Cash flows from investing activities
	Additions to property, plant and equipment				(255,004)		(228,902)
	Cash paid for acquisitions and licenses				(10,501)		(12,327)
	Cash paid for investments				(175,000)		(275)
	Other investing activities				889		1,432
					(439,616)		(240,072)
Cash flows from financing activities
	Common shares reissued for benefit plans, net of tax payments				144		(405)
	Common shares repurchased				(21,423)		(19,332)
	Payment of debt issuance costs				—		(4,309)
	Distributions to noncontrolling interests				(4,314)		(4,060)
	Other financing activities				(55)		(21)
					(25,648)		(28,127)

Net increase (decrease) in cash and cash equivalents					(61,558)		104,924

Cash and cash equivalents
	Beginning of period				294,411		170,996
	End of period			$	232,853	$	275,920

(1) Amounts have been adjusted. See "Revision of Prior Period Amounts" section for additional details.


	United States Cellular Corporation Financial Measures and Reconciliations
	(Unaudited, dollars in thousands)

					Three Months Ended June 30				Six Months Ended June 30
						2010		2009 (5)		2010		2009 (5)

		Service revenues			$	972,576	$	974,348	$	1,937,584	$	1,957,802

		Operating income				63,504		138,838		141,128		257,207
		Add:
			Depreciation, amortization and accretion			144,455		138,777		287,688		276,655
			Loss on asset disposals			1,250		2,611		6,426		6,556
				Adjusted OIBDA (1)(4)	$	209,209	$	280,226	$	435,242	$	540,418

				Adjusted OIBDA margin (2)		21.5%		28.8%		22.5%		27.6%


						2010		2009		2010		2009

		Cash flows from operating activities			$	251,454	$	187,561	$	403,706	$	373,123
		Deduct:
			Capital expenditures			133,490		91,161		255,004		228,902
				Free cash flow (3)	$	117,964	$	96,400	$	148,702	$	144,221
(1) Adjusted OIBDA is defined as operating income excluding the effects of: depreciation, amortization, and accretion (OIBDA); the net gain or loss on asset disposals (if any); and the loss on impairment of assets (if any). This measure also may be commonly referred to by management as operating cash flow. This measure should not be confused with cash flows from operating activities, which is a component of the consolidated statement of cash flows. (2) Adjusted OIBDA margin is defined as adjusted OIBDA divided by service revenues. Equipment revenues are excluded from the denominator of the calculation since equipment is generally sold at a net negative margin, and the equipment subsidy is effectively a cost for purposes of assessing business results. U.S. Cellular believes that this calculation method is consistent with the method used by certain investors to assess U.S. Cellular's business results. Adjusted OIBDA margin may also be commonly referred to by management as operating cash flow margin. (3) Free cash flow is defined as cash flows from operating activities minus capital expenditures. Free cash flow is a non-GAAP financial measure. U.S. Cellular believes that free cash flow as reported by U.S. Cellular is useful to investors and other users of its financial information in evaluating the amount of cash generated by business operations, after consideration of capital expenditures. (4) Adjusted OIBDA excludes the net gain or loss on asset disposals and loss on impairment of assets, if any, in order to show operating results on a more comparable basis from period to period. U.S. Cellular does not intend to imply that any of such amounts that are excluded are non-recurring, infrequent or unusual, and accordingly, they may be incurred in the future. (5) Amounts have been adjusted. See "Revision of Prior Period Amounts" section for additional details.

Revision of Prior Period Amounts

In preparing its financial statements for the three months ended March 31, 2010, U.S. Cellular discovered certain errors related to accounting for operating revenues and sales tax liabilities. The quantification of these errors was subsequently refined during the second quarter of 2010. These errors resulted in the overstatement of operating revenues and understatement of sales tax liabilities for the years ended December 31, 2009, 2008, 2007, and the three months ended March 31, 2010. In addition to recording these adjustments, U.S. Cellular recorded other adjustments to prior-period amounts to correct other immaterial items. In accordance with SEC Staff Accounting Bulletin Nos. 99 and 108 ("SAB 99 and SAB 108"), U.S. Cellular evaluated these errors and determined that they were immaterial to each of the reporting periods affected and, therefore, amendment of previously filed reports was not required. However, if the adjustments to correct the cumulative errors had been recorded in the first or second quarter of 2010, U.S. Cellular believes the impact would have been significant to those respective periods and would impact comparisons to prior periods. As permitted by SAB 108, U.S. Cellular revised in the current filing its comparative consolidated financial statements for these immaterial amounts. In addition, on August 5, 2010, U.S. Cellular filed a Current Report on Form 8-K (Items 8.01 and 9.01) with the SEC to revise financial statements and other financial information previously included in its Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Report on Form 10-Q for the period ended March 31, 2010.

The Consolidated Balance Sheet at December 31, 2009 was revised to reflect the cumulative effect of these errors, which resulted in a decrease to retained earnings of $15.9 million. Also, in accordance with SAB 108, the Consolidated Statement of Operations and the Consolidated Statement of Cash Flows have been revised as follows:



Consolidated Balance Sheet — December 31, 2009

		As previously
	(Dollars in thousands)	reported (1)		Adjustment		Revised

	Accounts receivable from customers and other	$	421,528	$	3,529	$	425,057
	Total current assets		1,005,588		3,529		1,009,117
	Total assets		5,745,217		3,529		5,748,746
	Customer deposits and deferred revenues		143,760		(3,512)		140,248
	Accrued taxes		34,583		22,924		57,507
	Total current liabilities		644,565		19,412		663,977
	Retained earnings		2,029,516		(15,883)		2,013,633
	Total U.S. Cellular shareholders' equity		3,404,296		(15,883)		3,388,413
	Total equity		3,455,997		(15,883)		3,440,114
	Total liabilities and equity		5,745,217		3,529		5,748,746

Consolidated Statement of Operations — Three Months Ended June 30, 2009

		As previously
	(Dollars in thousands, except per share amounts)	reported (2)		Adjustment		Revised

	Service revenues	$	974,755	$	(407)	$	974,348
	Total operating revenues		1,042,550		(407)		1,042,143
	System operations expenses (excluding Depreciation amortization and accretion)		194,806		(97)		194,709
	Selling, general and administrative expenses		410,070		1,083		411,153
	Depreciation, amortization and accretion		138,614		163		138,777
	Loss on asset disposals, net		2,086		525		2,611
	Total operating expenses		901,631		1,674		903,305
	Operating income		140,919		(2,081)		138,838
	Interest expense		(19,387)		(469)		(19,856)
	Total investment and other income (expense)		6,156		(469)		5,687
	Income before income taxes		147,075		(2,550)		144,525
	Income tax expense		57,748		(960)		56,788
	Net income		89,327		(1,590)		87,737
	Net income attributable to U.S. Cellular shareholders		83,358		(1,590)		81,768
	Basic earnings per share attributable to U.S. Cellular shareholders		0.96		(0.02)		0.94
	Diluted earnings per share attributable to U.S. Cellular shareholders		0.96		(0.02)		0.94

Consolidated Statement of Operations — Six Months Ended June 30, 2009

		As previously
	(Dollars in thousands, except per share amounts)	reported (2)		Adjustment		Revised

	Service revenues	$	1,956,629	$	1,173	$	1,957,802
	Total operating revenues		2,095,314		1,173		2,096,487
	System operations expenses (excluding Depreciation, amortization and accretion)		394,809		(112)		394,697
	Selling, general and administrative expenses		822,518		(2,902)		819,616
	Depreciation, amortization and accretion		276,265		390		276,655
	Loss on asset disposals, net		4,277		2,279		6,556
	Total operating expenses		1,839,625		(345)		1,839,280
	Operating income		255,689		1,518		257,207
	Interest expense		(38,409)		(874)		(39,283)
	Total investment and other income (expense)		13,218		(874)		12,344
	Income before income taxes		268,907		644		269,551
	Income tax expense		88,980		2,767		91,747
	Net income		179,927		(2,123)		177,804
	Net income attributable to U.S. Cellular shareholders		167,950		(2,123)		165,827
	Basic earnings per share attributable to U.S. Cellular shareholders		1.93		(0.03)		1.90

	Diluted earnings per share attributable to U.S. Cellular shareholders		1.92		(0.02)		1.90

Consolidated Statement of Cash Flows — Six Months Ended June 30, 2009

		As previously
	(Dollars in thousands)	reported (2)		Adjustment		Revised

	Net income	$	179,927	$	(2,123)	$	177,804
	Depreciation, amortization and accretion		276,265		390		276,655
	Deferred income taxes, net		19,604		(520)		19,084
	Loss on asset disposals, net		4,277		2,279		6,556
	Change in accounts receivable		(63,510)		(5,413)		(68,923)
	Change in customer deposits and deferred revenues		(5,372)		(327)		(5,699)
	Change in accrued taxes		64,851		6,190		71,041
	Change in other assets and liabilities		(66,824)		(476)		(67,300)
	Cash flows from operating activities		373,123		—		373,123
(1) In Annual Report on Form 10-K for the year ended December 31, 2009 filed on February 25, 2010. (2) In Quarterly Report on Form 10-Q for the period ended June 30, 2009 filed on August 6, 2009.