U.S. Cellular Reports Third Quarter 2010 Results

News provided by

Nov 04, 2010, 07:59 ET

CHICAGO, Nov. 4, 2010 /PRNewswire-FirstCall/ --

Note: Comparisons are year over year unless otherwise noted.

3Q 2010 Highlights

Service revenues were $983.5 million.
31 percent increase in data revenues to $228.9 million, representing 23 percent of total service revenues compared to 18 percent in 2009.
Retail service ARPU (average revenue per unit) increased to $47.12 from $46.97.
10 percent increase in diluted earnings per share attributable to U.S. Cellular shareholders.
A net loss of 25,000 retail postpaid customers and no change in prepaid customers.
Retail postpaid churn improved to 1.6 percent from 1.7 percent; postpaid customers comprised 94 percent of retail customers.
5 percent increase in cell sites in service to 7,524.
Repurchased 446,668 common shares for $19.1 million.

As previously announced, U.S. Cellular will hold a teleconference Nov. 4, 2010 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 $983.5 million for the third quarter of 2010, versus $983.9 million in the comparable period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $37.4 million and $0.43, respectively, for the third quarter of 2010, compared to $34.3 million and $0.39, respectively, in the comparable period one year ago.

"Our third quarter results reflect a strong increase in data revenues driven by higher levels of smartphone penetration. We also experienced renewed growth in roaming revenues and maintained our focus on cost control," said Mary N. Dillon, U.S. Cellular president and CEO. "These results were obtained while our organization was also focused on the execution of the October 1st launch of The Belief Project(SM), our set of industry-first programs, including One and Done Contracts and the Belief Rewards loyalty program.

"Since the launch, we've seen higher-than-expected levels of customer migration to the new, bundled Belief Plans, and we're confident that as customers experience all the benefits that are built into these plans, they will not only stay with us longer, but choose higher-value plans with additional features. As we build awareness in the wireless marketplace, we expect to see more customers switch from other carriers that don't offer the same level of value, rewards and overall customer satisfaction. And, in conjunction with the launch of the Belief Project, we upgraded our web site to make it easier for new and existing customers to select the best plans and products for them and manage their accounts online, which should stimulate sales and reduce selling costs over time.

"We've also bolstered our smartphone lineup significantly over the past few months with three new Android™-powered phones, including the popular Samsung Acclaim™, HTC Desire™ and Samsung Mesmerize™, a Galaxy S™ smartphone. We believe that this strong combination of popular phones, value-packed plans and exclusive services will help us stand out among wireless carriers and improve our growth and profitability over time."

Guidance

Guidance for the year ending Dec. 31, 2010 as of Nov. 4, 2010 is provided below, compared to the previous guidance provided on Aug. 5, 2010. There can be no assurance that final results will not differ materially from this guidance.


		Current guidance	Previous guidance
	Service revenues	$3,925-$3,975 million	$3,925-$4,000 million
	Adjusted OIBDA(1)	$800-$850 million	Unchanged
	Operating income(2)	$200-$250 million	Unchanged
	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 2010 benefits and expenses associated with the Belief Project were incorporated into U.S. Cellular's 2010 financial guidance from the beginning of the year.

The foregoing guidance represents the views of management as of Nov. 4, 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 Nov. 4, 2010 at 9:30 a.m. CDT.

Access the live call on the Conference Calls page of uscellular.com at http://www.videonewswire.com/event.asp?id=74003.
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 8,800 full-time equivalent associates as of September 30, 2010. At the end of the quarter, Telephone and Data Systems, Inc. owned 83% 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			9/30/2010		6/30/2010		3/31/2010		12/31/2009		9/30/2009
Total population
	Consolidated markets (1)			90,468,000		90,468,000		90,468,000		89,712,000		85,118,000
	Consolidated operating markets (1)			46,546,000		46,546,000		46,546,000		46,306,000		46,306,000
Market penetration at end of period
	Consolidated markets (2)			6.7%		6.8%		6.8%		6.8%		7.2%
	Consolidated operating markets (2)			13.1%		13.2%		13.2%		13.3%		13.2%
All customers
	Total at end of period			6,103,000		6,144,000		6,147,000		6,141,000		6,131,000
	Gross additions			338,000		349,000		358,000		399,000		386,000
	Net additions (losses)			(41,000)		(3,000)		6,000		10,000		(24,000)
Retail customers
	Total at end of period			5,750,000		5,775,000		5,768,000		5,744,000		5,705,000
	Gross additions			301,000		307,000		305,000		354,000		351,000
	Net retail additions (losses) (3)			(25,000)		7,000		24,000		39,000		(6,000)
		Net postpaid additions (losses)		(25,000)		(22,000)		(9,000)		26,000		8,000
		Net prepaid additions (losses)		—		29,000		33,000		13,000		(14,000)
Service revenues components (000s)
	Voice and other retail service		$	636,912	$	648,565	$	663,759	$	677,107	$	690,576
	Data service (6)			228,854		215,271		201,280		189,759		174,286
	Total retail service		$	865,766	$	863,836	$	865,039	$	866,866	$	864,862
	Inbound roaming			72,901		60,902		51,942		61,728		68,767
	Other			44,836		47,838		48,027		56,814		50,289
Total service revenues (000s)			$	983,503	$	972,576	$	965,008	$	985,408	$	983,918

	Divided by average customers (000s)			6,124		6,151		6,137		6,139		6,138
	Divided by three months in each quarter			3		3		3		3		3

Average monthly revenue per unit (4)			$	53.53	$	52.71	$	52.41	$	53.51	$	53.43
	Voice and other retail service (4)		$	34.66	$	35.14	$	36.05	$	36.77	$	37.51
	Data service (4) (6)		$	12.46	$	11.67	$	10.93	$	10.30	$	9.46
	Total retail service (4)		$	47.12	$	46.81	$	46.98	$	47.07	$	46.97

	Inbound roaming (4)		$	3.97	$	3.30	$	2.82	$	3.35	$	3.73
	Other (4)		$	2.44	$	2.60	$	2.61	$	3.09	$	2.73
Postpaid churn rate (5)				1.6%		1.4%		1.4%		1.6%		1.7%
Capital expenditures (000s)			$	124,700	$	133,500	$	121,500	$	189,000	$	128,900
Cell sites in service				7,524		7,416		7,310		7,279		7,161
(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) Calculated by dividing the components of service revenues by the average customers and number of months in the quarter. (5) Calculated by dividing the total postpaid customer disconnects during the quarter by the average postpaid customer base for the quarter. (6) Effective for the fourth quarter of 2010, revenues from data products and services will no longer be separately disclosed as the determination of such revenues is increasingly dependent on allocations of bundled service prices to multiple bundled elements.


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

								Increase (Decrease)
				2010		2009 (1)		Amount		Percent
Operating revenues
	Service			$	983,503	$	983,918	$	(415)		—
	Equipment sales				77,278		73,377		3,901		5%
		Total operating revenues			1,060,781		1,057,295		3,486		—
Operating expenses
	System operations (excluding Depreciation,
		amortization and accretion reported below)			218,021		205,611		12,410		6%
	Cost of equipment sold				189,291		189,354		(63)		—
	Selling, general and administrative				446,938		454,645		(7,707)		(2%)
	Depreciation, amortization and accretion				144,717		146,052		(1,335)		(1%)
	Loss on asset disposals, net				1,981		2,085		(104)		(5%)
		Total operating expenses			1,000,948		997,747		3,201		—

Operating income					59,833		59,548		285		—

Investment and other income (expense)
	Equity in earnings of unconsolidated entities				23,971		23,126		845		4%
	Interest and dividend income				1,101		1,420		(319)		(22%)
	Interest expense				(15,956)		(19,782)		3,826		19%
	Other, net				(620)		905		(1,525)		> (100)%

			Total investment and other income		8,496		5,669		2,827		50%

Income before income taxes					68,329		65,217		3,112		5%
	Income tax expense				25,051		25,279		(228)		(1%)

Net income					43,278		39,938		3,340		8%
	Less: Net income attributable to noncontrolling
		interests, net of tax			(5,920)		(5,606)		(314)		(6%)
Net income attributable to U.S. Cellular shareholders				$	37,358	$	34,332	$	3,026		9%

Basic weighted average shares outstanding					85,992		86,848		(856)		(1%)
Basic earnings per share attributable to
	U.S. Cellular shareholders			$	0.43	$	0.40	$	0.03		7%

Diluted weighted average shares outstanding					86,428		87,128		(700)		(1%)
Diluted earnings per share attributable to
	U.S. Cellular shareholders			$	0.43	$	0.39	$	0.04		10%
(1) Amounts have been adjusted. See "Revision of Prior Period Amounts" section for additional details.


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

							Increase (Decrease)
			2010		2009 (1)		Amount		Percent
Operating revenues
	Service		$	2,921,087	$	2,941,720	$	(20,633)		(1%)
	Equipment sales			193,444		212,062		(18,618)		(9%)
		Total operating revenues		3,114,531		3,153,782		(39,251)		(1%)
Operating expenses
	System operations (excluding Depreciation,
	amortization and accretion reported below)			638,677		600,308		38,369		6%
	Cost of equipment sold			512,361		531,110		(18,749)		(4%)
	Selling, general and administrative			1,321,720		1,274,261		47,459		4%
	Depreciation, amortization and accretion			432,405		422,707		9,698		2%
	Loss on asset disposals, net			8,407		8,641		(234)		(3%)
		Total operating expenses		2,913,570		2,837,027		76,543		3%

Operating income				200,961		316,755		(115,794)		(37%)

Investment and other income (expense)
	Equity in earnings of unconsolidated entities			74,418		73,247		1,171		2%
	Interest and dividend income			2,984		2,648		336		13%
	Interest expense			(48,918)		(59,065)		10,147		17%
	Other, net			(213)		1,183		(1,396)		—
		Total investment and other income		28,271		18,013		10,258		57%

Income before income taxes				229,232		334,768		(105,536)		(32%)
	Income tax expense			86,894		117,026		(30,132)		(26%)

Net income				142,338		217,742		(75,404)		(35%)
	Less: Net income attributable to noncontrolling
		interests, net of tax		(16,858)		(17,583)		725		4%
Net income attributable to U.S. Cellular shareholders			$	125,480	$	200,159	$	(74,679)		(37%)

Basic weighted average shares outstanding				86,329		87,011		(682)		(1%)
Basic earnings per share attributable to
	U.S. Cellular shareholders		$	1.45	$	2.30	$	(0.85)		(37%)

Diluted weighted average shares outstanding				86,706		87,216		(510)		(1%)
Diluted earnings per share attributable to
	U.S. Cellular shareholders		$	1.45	$	2.29	$	(0.84)		(37%)
(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

		September 30,		December 31,
		2010		2009 (1)
Current assets
	Cash and cash equivalents	$	269,292	$	294,411
	Short-term investments		120,771		330
	Accounts receivable from customers and others		415,107		425,057
	Inventory		119,882		152,556
	Prepaid income taxes		32,086		717
	Prepaid expenses		70,759		63,463
	Net deferred income tax asset		21,570		21,570
	Other current assets		49,111		51,013
			1,098,578		1,009,117

Investments
	Licenses		1,445,501		1,435,000
	Goodwill		494,737		494,737
	Customer lists		869		4,083
	Investments in unconsolidated entities		177,075		161,481
	Notes and interest receivable – long-term		4,107		4,214
	Long-term investments		46,156		—
			2,168,445		2,099,515

Property, plant and equipment
	In service and under construction		6,203,085		5,884,307
	Less: accumulated depreciation		3,649,212		3,282,969
			2,553,873		2,601,338

Other assets and deferred charges			38,195		38,776

Total assets		$	5,859,091	$	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

			September 30,		December 31,
			2010		2009 (1)
Current liabilities
	Current portion of long-term debt		$	91	$	76
	Accounts payable
		Affiliated		6,291		14,732
		Trade		245,542		296,288
	Customer deposits and deferred revenues			142,220		140,248
	Accrued taxes			78,686		57,507
	Accrued compensation			57,207		62,242
	Other current liabilities			88,216		92,884
				618,253		663,977

Deferred liabilities and credits
	Net deferred income tax liability			559,746		513,994
	Other deferred liabilities and credits			269,333		262,412

Long-term debt				867,790		867,522

Commitments and contingencies

Noncontrolling interests with mandatory redemption features				791		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			1,364,266		1,356,322
	Treasury shares			(97,109)		(69,616)
	Retained earnings			2,126,825		2,013,633
		Total U.S. Cellular shareholders' equity		3,482,056		3,388,413

Noncontrolling interests				61,122		51,701

	Total equity			3,543,178		3,440,114

Total liabilities and equity			$	5,859,091	$	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 third quarter of 2010, U.S. Cellular elected to use a portion of its cash balance to directly purchase government-backed securities, specifically U.S. treasury securities and securities insured by the Federal Deposit Insurance Corporation ("FDIC"). 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 government-backed securities and certificates of deposit at September 30, 2010 and December 31, 2009.


		September 30,		December 31,
		2010		2009

Cash and cash equivalents		$	269,292	$	294,411
Amounts included in short-term investments (1)(2)
	Government-backed securities (3)		120,521		—
	Certificates of deposit		250		330
		$	120,771	$	330
Amounts included in long-term investments (1)(4)
	Government-backed securities (3)	$	46,156	$	—
(1) Designated as held-to-maturity investments and are recorded at amortized cost on the Consolidated Balance Sheet. (2) Maturities are less than twelve months from the respective balance sheet dates. (3) Includes U.S. treasuries and corporate notes guaranteed under the FDIC's Temporary Liquidity Guarantee Program. (4) Maturities range between 14 and 25 months from the balance sheet date.


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


				2010		2009 (1)
Cash flows from operating activities
	Net income			$	142,338	$	217,742
	Add (deduct) adjustments to reconcile net income to net
		cash flows from operating activities
			Depreciation, amortization and accretion		432,405		422,707
			Bad debts expense		56,244		73,100
			Stock-based compensation expense		13,539		13,000
			Deferred income taxes, net		50,180		44,486
			Equity in earnings of unconsolidated entities		(74,418)		(73,247)
			Distributions from unconsolidated entities		59,149		51,306
			Loss on asset disposals, net		8,407		8,641
			Other operating activities		106		1,824
	Changes in assets and liabilities from operations
			Accounts receivable		(46,293)		(106,380)
			Inventory		32,673		(4,509)
			Accounts payable - trade		(50,720)		(13,432)
			Accounts payable - affiliate		(8,440)		(980)
			Customer deposits and deferred revenues		1,972		(6,185)
			Accrued taxes		(19,491)		68,695
			Accrued interest		9,295		9,787
			Other assets and liabilities		(22,933)		(68,861)
					584,013		637,694
Cash flows from investing activities
	Additions to property, plant and equipment				(379,692)		(357,770)
	Cash paid for acquisitions and licenses				(10,501)		(12,527)
	Cash paid for investments				(190,250)		(275)
	Cash received for investments				25,330		—
	Other investing activities				656		1,682
					(554,457)		(368,890)
Cash flows from financing activities
	Common shares reissued for benefit plans, net of tax payments				738		(119)
	Common shares repurchased				(40,520)		(24,283)
	Payment of debt issuance costs				—		(4,416)
	Distributions to noncontrolling interests				(5,828)		(5,855)
	Other financing activities				(9,065)		(233)
					(54,675)		(34,906)

Net increase (decrease) in cash and cash equivalents					(25,119)		233,898

Cash and cash equivalents
	Beginning of period				294,411		170,996
	End of period			$	269,292	$	404,894
(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 September 30,				Nine Months Ended September 30,
					2010		2009 (5)		2010		2009 (5)

		Service revenues			$	983,503	$	983,918	$	2,921,087	$	2,941,720

		Operating income				59,833		59,548		200,961		316,755
		Add:
			Depreciation, amortization and accretion			144,717		146,052		432,405		422,707
			Loss on asset disposals			1,981		2,085		8,407		8,641
				Adjusted OIBDA (1)(4)	$	206,531	$	207,685	$	641,773	$	748,103

				Adjusted OIBDA margin (2)		21.0%		21.1%		22.0%		25.4%


						2010		2009		2010		2009

		Cash flows from operating activities			$	180,307	$	264,571	$	584,013	$	637,694
		Deduct:
			Capital expenditures			124,688		128,868		379,692		357,770
				Free cash flow (3)	$	55,619	$	135,703	$	204,321	$	279,924
(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. Such Form 8-K contains revisions to the December 31, 2009 Consolidated Balance Sheet, originally filed on February 25, 2010 in TDS' Annual Report on Form 10-K. Also, in accordance with SAB 108, the Consolidated Balance Sheet, the Consolidated Statement of Operations and the Consolidated Statement of Cash Flows for the following comparative periods have been revised as follows:



Consolidated Balance Sheet — September 30, 2009

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

	Accounts receivable - Due from customers	$	338,852	$	3,817	$	342,669
	Prepaid expenses		63,020		8,413		71,433
	Total current assets		1,114,320		12,230		1,126,550
	Total assets		5,841,825		12,230		5,854,055
	Customer deposits and deferred revenues		146,224		(2,241)		143,983
	Accrued taxes		56,500		23,193		79,693
	Total current liabilities		615,967		20,952		636,919
	Other deferred liabilities and credits		250,762		1,314		252,076
	Total deferred liabilities and credits		769,007		1,314		770,321
	Retained earnings		2,020,710		(10,036)		2,010,674
	Total U.S. Cellular shareholders' equity		3,398,416		(10,036)		3,388,380
	Total equity		3,458,591		(10,036)		3,448,555
	Total liabilities and equity		5,841,825		12,230		5,854,055


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

		As previously
	(Dollars in thousands, except per share amounts)	reported (1)		Adjustment		Revised

	Service revenues	$	984,923	$	(1,005)	$	983,918
	Total operating revenues		1,058,300		(1,005)		1,057,295
	System operations expenses (excluding Depreciation,
	amortization and accretion)		205,458		153		205,611
	Selling, general and administrative expenses		454,839		(194)		454,645
	Depreciation, amortization and accretion		147,586		(1,534)		146,052
	Loss on asset disposals, net		3,371		(1,286)		2,085
	Total operating expenses		1,000,608		(2,861)		997,747
	Operating income		57,692		1,856		59,548
	Interest expense		(19,358)		(424)		(19,782)
	Total investment and other income (expense)		6,093		(424)		5,669
	Income before income taxes		63,785		1,432		65,217
	Income tax expense		22,541		2,738		25,279
	Net income		41,244		(1,306)		39,938
	Net income attributable to U.S. Cellular shareholders		35,638		(1,306)		34,332
	Basic earnings per share attributable to U.S. Cellular shareholders		0.41		(0.01)		0.40
	Diluted earnings per share attributable to U.S. Cellular shareholders		0.41		(0.02)		0.39


Consolidated Statement of Operations — Nine Months Ended September 30, 2009

		As previously
	(Dollars in thousands, except per share amounts)	reported (1)		Adjustment		Revised

	Service revenues	$	2,941,552	$	168	$	2,941,720
	Total operating revenues		3,153,614		168		3,153,782
	System operations expenses (excluding Depreciation,
	amortization and accretion)		600,267		41		600,308
	Selling, general and administrative expenses		1,277,357		(3,096)		1,274,261
	Depreciation, amortization and accretion		423,851		(1,144)		422,707
	Loss on asset disposals, net		7,648		993		8,641
	Total operating expenses		2,840,233		(3,206)		2,837,027
	Operating income		313,381		3,374		316,755
	Interest expense		(57,767)		(1,298)		(59,065)
	Total investment and other income (expense)		19,311		(1,298)		18,013
	Income before income taxes		332,692		2,076		334,768
	Income tax expense		111,521		5,505		117,026
	Net income		221,171		(3,429)		217,742
	Net income attributable to U.S. Cellular shareholders		203,588		(3,429)		200,159
	Basic earnings per share attributable to U.S. Cellular shareholders		2.34		(0.04)		2.30
	Diluted earnings per share attributable to U.S. Cellular shareholders		2.33		(0.04)		2.29


Consolidated Statement of Cash Flows — Nine Months Ended September 30, 2009

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

	Net income	$	221,171	$	(3,429)	$	217,742
	Depreciation, amortization and accretion		423,851		(1,144)		422,707
	Deferred income taxes, net		44,429		57		44,486
	Loss on asset disposals, net		7,648		993		8,641
	Change in accounts receivable		(101,263)		(5,117)		(106,380)
	Change in customer deposits and deferred revenues		(4,858)		(1,327)		(6,185)
	Change in accrued taxes		58,139		10,556		68,695
	Change in other assets and liabilities		(68,272)		(589)		(68,861)
	Cash flows from operating activities		637,694		—		637,694
(1) In Quarterly Report on Form 10-Q for the period ended September 30, 2009 filed on November 5, 2009.