U.S. Cellular Reports Third Quarter 2011 Results

Data drives ARPU growth; inbound roaming revenues increase; profitability improves

News provided by

Nov 04, 2011, 08:07 ET

CHICAGO, Nov. 4, 2011 /PRNewswire/ --

Note: Comparisons are year over year unless otherwise noted.

3Q 2011 Highlights

Smartphones sold, as a percent of total devices sold, increased to 39.9 percent from 23.6 percent; smartphone customers increased to 26.2 percent of postpaid customers from 12.1 percent.
Postpaid ARPU (average revenue per unit) increased to $52.41 from $50.82.
Service revenues increased 5 percent to $1,036.6 million.
Operating income increased 66 percent to $101.6 million.
Net loss of 23,000 retail customers, reflecting loss of 34,000 postpaid customers and gain of 11,000 prepaid customers; postpaid customers comprised 95 percent of retail customers.
Cell sites in service increased 4 percent to 7,828.

As previously announced, U.S. Cellular will hold a teleconference Nov. 4, 2011 at 9:00 a.m. CDT. Interested parties may listen to the call live by accessing the Investor Relations page of uscellular.com or www.teldta.com.

United States Cellular Corporation (NYSE: USM) reported service revenues of $1,036.6 million for the third quarter of 2011 versus $983.5 million in the comparable period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $62.1 million and $0.73, respectively, for the third quarter of 2011, compared to $38.3 million and $0.44, respectively, in the comparable period one year ago.

"We continued to increase postpaid ARPU and maintain a low churn rate," said Mary N. Dillon, U.S. Cellular president and CEO, "and though our retail subscriber results remain disappointing, they did improve slightly compared to recent quarters. We are seeing increased awareness from our advertising, device launches and focused promotions, and we're building on that with targeted campaigns to add more new customers during the holiday period and beyond.

"Smartphones sales and adoption of data plans remain very strong, and we're continuing to control loss on equipment by balancing device costs and promotions. We again improved operating margins by increasing ARPU and roaming revenue, and controlling expenses. Also during the quarter, we completed an exchange of licenses that will provide additional spectrum to meet anticipated future capacity and coverage requirements in several of our markets.

"Along with our Belief Plans, which 2.8 million of our customers have now selected, we're offering a competitive device lineup for the holiday period, including the highly rated Motorola Electrify™, and several new smartphones at attractive price points from HTC. We'll complete our first 4G LTE markets in November, and offer 4G-enabled devices early in 2012."

Guidance for year ending Dec. 31, 2011

Guidance for the year ending Dec. 31, 2011, as of Nov. 4, 2011, is provided below, compared to the previous guidance provided on Aug. 8, 2011. U.S. Cellular undertakes no duty to update such information, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from this guidance.


	Current Estimates	Previous Estimates (1)
Service revenues	$4,000-$4,100 million	Unchanged
Operating income (3) (4)	$230-$305 million	$210-$285 million
Depreciation, amortization and accretion expenses,
and losses on asset disposals and exchanges
and impairment of assets (3)	Approx. $590 million	Unchanged
Adjusted OIBDA (2) (4)	$820-$895 million	$800-$875 million
Capital expenditures (4)	$750-$800 million	Unchanged

(1) The 2011 Estimated Results as disclosed in U.S. Cellular's Quarterly Report on Form 10-Q for the period ended June 30, 2011.
(2) Adjusted OIBDA is defined as Operating income excluding the effects of: Depreciation, amortization and accretion (OIBDA); the net gain or loss on asset disposals and exchanges (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.
(3) The 2011 Estimated Results do not include any estimate for losses on impairment of assets since these cannot be predicted.
(4) This guidance is based on U.S. Cellular's current operations, which include a multi-year deployment of Long-term Evolution ("LTE") technology commencing in 2011. As customer demand for data services increases, and competitive conditions in the wireless industry evolve, such as the rate of deployment of LTE technology by other carriers, the timing of U.S. Cellular's deployment of LTE and the timing of other capital expenditures could change. These factors could affect U.S. Cellular's estimated capital expenditures and operating expenses in 2011.

Conference call information

U.S. Cellular will hold a conference call on Nov. 4, 2011 at 9:00 a.m. CDT.

Access the live call on the Investor Relations page of uscellular.com or at http://www.videonewswire.com/event.asp?id=82599.
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 Investor Relations 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 5.9 million customers in 26 states. The Chicago-based company employed approximately 8,900 people as of September 30, 2011. At the end of the third quarter, Telephone and Data Systems, Inc. owned 84 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 ability to obtain or maintain roaming arrangements with other carriers; 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 Securities and Exchange Commission ("SEC"), which are incorporated by reference herein.

United States Cellular Corporation
Summary Operating Data (Unaudited)

Quarter Ended			9/30/2011		6/30/2011		3/31/2011		12/31/2010		9/30/2010
Total population
	Consolidated markets (1)		91,965,000		91,204,000		91,090,000		90,468,000		90,468,000
	Consolidated operating markets (1)		46,888,000		46,888,000		46,774,000		46,546,000		46,546,000
Market penetration at end of period
	Consolidated markets (2)		6.5%		6.5%		6.6%		6.7%		6.7%
	Consolidated operating markets (2)		12.7%		12.7%		12.9%		13.0%		13.1%
All customers
	Total at end of period		5,932,000		5,968,000		6,033,000		6,072,000		6,103,000
	Gross additions		299,000		257,000		293,000		327,000		338,000
	Net additions (losses)		(36,000)		(70,000)		(39,000)		(31,000)		(41,000)
	Smartphones sold as a percent of total devices sold (3)		39.9%		39.6%		42.5%		39.6%		23.6%
Retail customers
	Total at end of period		5,621,000		5,644,000		5,698,000		5,729,000		5,750,000
	Smartphone penetration (3) (4)		26.2%		23.0%		20.2%		16.6%		12.1%
	Gross additions		284,000		226,000		256,000		292,000		301,000
	Net retail additions (losses) (5)		(23,000)		(58,000)		(31,000)		(21,000)		(25,000)
	Net postpaid additions (losses)		(34,000)		(41,000)		(22,000)		(10,000)		(25,000)
	Net prepaid additions (losses)		11,000		(17,000)		(9,000)		(11,000)		—
Service revenue components (000s)
	Retail service	$	871,199	$	868,630	$	864,602	$	864,905	$	865,766
	Inbound roaming		107,810		82,760		64,386		67,545		72,901
	Other		57,600		50,640		56,125		59,464		44,836
Total service revenues (000s)		$	1,036,609	$	1,002,030	$	985,113	$	991,914	$	983,503
Total ARPU (6)		$	58.09	$	55.69	$	54.29	$	54.37	$	53.53
Billed ARPU (7)		$	48.82	$	48.27	$	47.65	$	47.41	$	47.12
Postpaid ARPU (8)		$	52.41	$	51.84	$	51.21	$	50.99	$	50.82
Postpaid churn rate (9)			1.5%		1.4%		1.4%		1.5%		1.6%
Capital expenditures (000s)		$	248,000	$	162,100	$	95,900	$	203,400	$	124,700
Cell sites in service			7,828		7,770		7,663		7,645		7,524

(1) Used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively. See footnote (2) below.
(2) Market Penetration is 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) Smartphones represent wireless devices which run on a Blackberry®, Windows Mobile, or Android operating system.
(4) Smartphone penetration is calculated by dividing postpaid customers on smartphone service plans by total postpaid customers.
(5) Includes net postpaid additions (losses) and net prepaid additions (losses).
(6) Total ARPU - Average monthly service revenue per customer includes retail service, inbound roaming and other service revenues and is calculated by dividing total service revenues by the number of months in the period and by the average total customers during the period.
(7) Billed ARPU - Average monthly billed revenue per customer is calculated by dividing total retail service revenues by the number of months in the period and by the average total customers during the period. Retail service revenues include revenues attributable to postpaid, prepaid and reseller customers.
(8)Postpaid ARPU - Average monthly revenue per postpaid customer is calculated by dividing total retail service revenues from postpaid customers by the number of months in the period and by the average postpaid customers during the period.
(9) Represents the percentage of the retail postpaid customer base that disconnects service each month. This amount represents the average postpaid churn rate for each respective quarterly period.

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)
				2011		2010 (1)		Amount		Percent
Operating revenues
	Service			$	1,036,609	$	983,503	$	53,106		5%
	Equipment sales				73,830		77,278		(3,448)		(4%)
		Total operating revenues			1,110,439		1,060,781		49,658		5%
Operating expenses
	System operations (excluding Depreciation,
		amortization and accretion reported below)			241,852		218,021		23,831		11%
	Cost of equipment sold				193,491		189,291		4,200		2%
	Selling, general and administrative				441,512		446,938		(5,426)		(1%)
	Depreciation, amortization and accretion				141,664		143,191		(1,527)		(1%)
	(Gain) loss on asset disposals and exchanges, net				(9,700)		1,981		(11,681)		>(100)%
		Total operating expenses			1,008,819		999,422		9,397		1%

Operating income					101,620		61,359		40,261		66%

Investment and other income (expense)
	Equity in earnings of unconsolidated entities				21,929		23,971		(2,042)		(9%)
	Interest and dividend income				869		1,101		(232)		(21%)
	Interest expense				(11,522)		(15,956)		4,434		28%
	Other, net				(97)		(620)		523		84%

			Total investment and other income (expense)		11,179		8,496		2,683		32%

Income before income taxes					112,799		69,855		42,944		61%
	Income tax expense				43,292		25,639		17,653		69%

Net income					69,507		44,216		25,291		57%
	Less: Net income attributable to noncontrolling
		interests, net of tax			(7,367)		(5,920)		(1,447)		(24%)
Net income attributable to U.S. Cellular shareholders				$	62,140	$	38,296	$	23,844		62%

Basic weighted average shares outstanding					84,547		85,992		(1,445)		(2%)
Basic earnings per share attributable to
	U.S. Cellular shareholders			$	0.73	$	0.45	$	0.28		62%

Diluted weighted average shares outstanding					84,940		86,428		(1,488)		(2%)
Diluted earnings per share attributable to
	U.S. Cellular shareholders			$	0.73	$	0.44	$	0.29		66%

(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)
				2011		2010 (1)		Amount		Percent
Operating revenues
	Service			$	3,023,752	$	2,921,087	$	102,665		4%
	Equipment sales				219,961		193,444		26,517		14%
		Total operating revenues			3,243,713		3,114,531		129,182		4%
Operating expenses
	System operations (excluding Depreciation,
		amortization and accretion reported below)			687,256		638,677		48,579		8%
	Cost of equipment sold				556,465		512,361		44,104		9%
	Selling, general and administrative				1,309,688		1,321,720		(12,032)		(1%)
	Depreciation, amortization and accretion				431,581		427,831		3,750		1%
	(Gain) loss on asset disposals and exchanges, net				(5,741)		8,407		(14,148)		>(100)%
		Total operating expenses			2,979,249		2,908,996		70,253		2%

Operating income					264,464		205,535		58,929		29%

Investment and other income (expense)
	Equity in earnings of unconsolidated entities				65,289		74,418		(9,129)		(12%)
	Interest and dividend income				2,466		2,984		(518)		(17%)
	Gain on investment				13,373		—		13,373		N/M
	Interest expense				(51,905)		(48,918)		(2,987)		(6%)
	Other, net				(47)		(213)		166		78%

			Total investment and other income (expense)		29,176		28,271		905		3%

Income before income taxes					293,640		233,806		59,834		26%
	Income tax expense				102,771		88,656		14,115		16%

Net income					190,869		145,150		45,719		31%
	Less: Net income attributable to noncontrolling
		interests, net of tax			(18,629)		(16,858)		(1,771)		(11%)
Net income attributable to U.S. Cellular shareholders				$	172,240	$	128,292	$	43,948		34%

Basic weighted average shares outstanding					84,984		86,329		(1,345)		(2%)
Basic earnings per share attributable to
	U.S. Cellular shareholders			$	2.03	$	1.49	$	0.54		36%

Diluted weighted average shares outstanding					85,448		86,706		(1,258)		(1%)
Diluted earnings per share attributable to
	U.S. Cellular shareholders			$	2.02	$	1.48	$	0.54		36%

(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,
		2011		2010 (1)
Current assets
	Cash and cash equivalents	$	504,952	$	294,426
	Short-term investments		110,761		146,586
	Accounts receivable from customers and others		434,334		424,019
	Inventory		148,770		112,279
	Income taxes receivable		35,121		41,397
	Prepaid expenses		56,607		53,356
	Net deferred income tax asset		26,757		26,757
	Other current assets		10,693		10,804
			1,327,995		1,109,624

Assets held for sale			60,829		—

Investments
	Licenses		1,470,550		1,452,101
	Goodwill		494,737		494,737
	Customer lists, net		425		759
	Investments in unconsolidated entities		160,374		160,847
	Notes and interest receivable – long-term		3,959		4,070
	Long-term investments		45,297		46,033
			2,175,342		2,158,547

Property, plant and equipment, net
	In service and under construction		6,778,852		6,340,537
	Less: accumulated depreciation		4,124,358		3,766,015
			2,654,494		2,574,522

Other assets and deferred charges			61,941		50,367

Total assets		$	6,280,601	$	5,893,060

(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 EQUITY

			September 30,		December 31,
			2011		2010 (1)
Current liabilities
	Current portion of long-term debt		$	101	$	101
	Accounts payable
		Affiliated		11,976		10,791
		Trade		360,788		281,601
	Customer deposits and deferred revenues			177,123		146,428
	Accrued taxes			43,910		39,299
	Accrued compensation			48,117		65,952
	Other current liabilities			95,665		121,823
				737,680		665,995

Liabilities held for sale				858		—

Deferred liabilities and credits
	Net deferred income tax liability			742,343		583,444
	Other deferred liabilities and credits			235,032		234,855

Long-term debt				880,411		867,941

Commitments and contingencies

Noncontrolling interests with mandatory redemption features				923		855

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			1,382,826		1,368,487
	Treasury shares			(153,011)		(105,616)
	Retained earnings			2,294,562		2,135,507
		Total U.S. Cellular shareholders' equity		3,612,451		3,486,452

Noncontrolling interests				70,903		53,518

	Total equity			3,683,354		3,539,970

Total liabilities and equity			$	6,280,601	$	5,893,060

(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)

The following table presents U.S. Cellular's cash and cash equivalents and investments at September 30, 2011 and December 31, 2010.

			September 30,		December 31,
			2011		2010

	Cash and cash equivalents		$	504,952	$	294,426
	Amounts included in short-term investments (1)(2)
		Government-backed securities (3)		110,761		146,336
		Certificates of deposit		-		250
			$	110,761	$	146,586
	Amounts included in long-term investments (1)(4)
		Government-backed securities (3)	$	45,297	$	46,033

(1) Designated as held-to-maturity investments and 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 Federal Deposit Insurance Corporation's Temporary Liquidity Guarantee Program.
(4) At September 30, 2011, maturities range between 13 and 23 months from the balance sheet date.

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


				2011		2010 (1)
Cash flows from operating activities
	Net income			$	190,869	$	145,150
	Add (deduct) adjustments to reconcile net income to net
		cash flows from operating activities
			Depreciation, amortization and accretion		431,581		427,831
			Bad debts expense		44,718		56,244
			Stock-based compensation expense		15,475		13,539
			Deferred income taxes, net		145,687		51,942
			Equity in earnings of unconsolidated entities		(65,289)		(74,418)
			Distributions from unconsolidated entities		52,037		59,149
			(Gain) loss on asset disposals and exchanges, net		(5,741)		8,407
			Gain on investment		(13,373)		—
			Noncash interest expense		9,582		1,846
			Other operating activities		1,143		(1,740)
	Changes in assets and liabilities from operations
			Accounts receivable		(57,564)		(46,293)
			Inventory		(36,326)		32,673
			Accounts payable - trade		79,031		(50,720)
			Accounts payable - affiliate		1,185		(8,440)
			Customer deposits and deferred revenues		30,695		1,972
			Accrued taxes		9,679		(19,491)
			Accrued interest		9,283		9,295
			Other assets and liabilities		(65,048)		(22,933)
					777,624		584,013

Cash flows from investing activities
	Additions to property, plant and equipment				(506,082)		(379,692)
	Cash paid for acquisitions and licenses				(23,773)		(10,501)
	Cash paid for investments				(50,000)		(190,250)
	Cash received for investments				85,250		25,330
	Other investing activities				(210)		656
					(494,815)		(554,457)

Cash flows from financing activities
	Repayment of long-term debt				(330,106)		(307)
	Issuance of long-term debt				342,000		—
	Common shares reissued for benefit plans, net of tax payments				1,755		738
	Common shares repurchased				(62,294)		(40,520)
	Payment of debt issuance costs				(11,394)		—
	Distributions to noncontrolling interests				(1,176)		(5,828)
	Other financing activities				169		(8,758)
					(61,046)		(54,675)

Cash classified as held for sale					(11,237)		—

Net increase (decrease) in cash and cash equivalents					210,526		(25,119)

Cash and cash equivalents
	Beginning of period				294,426		294,411
	End of period			$	504,952	$	269,292

(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,
					2011		2010 (4)		2011		2010 (4)

	Service revenues			$	1,036,609	$	983,503	$	3,023,752	$	2,921,087

	Operating income				101,620		61,359		264,464		205,535
	Add:
		Depreciation, amortization and accretion			141,664		143,191		431,581		427,831
		Loss on impairment of intangible assets			—		—		—		—
		Gain (loss) on asset disposals and exchanges			(9,700)		1,981		(5,741)		8,407
			Adjusted OIBDA (1)	$	233,584	$	206,531	$	690,304	$	641,773

			Adjusted OIBDA margin (2)		22.5%		21.0%		22.8%		22.0%


					2011		2010 (4)		2011		2010 (4)

	Cash flows from operating activities			$	354,192	$	180,307	$	777,624	$	584,013
	Deduct:
		Capital expenditures			248,042		124,688		506,082		379,692
			Free cash flow (3)	$	106,150	$	55,619	$	271,542	$	204,321

(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 and exchanges (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. Adjusted OIBDA excludes the net gain or loss on asset disposals and exchanges 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.
(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 loss, and such net loss is included in adjusted OIBDA as a cost of earning service revenues 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. U.S. Cellular believes this measure provides useful information to investors regarding U.S. Cellular's financial condition and results of operations because it highlights certain key cash and non-cash items and their impacts on cash flows from operating activities.
(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 may be 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) 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 nine months ended September 30, 2011, U.S. Cellular discovered certain errors related to accounting for asset retirement obligations and asset retirement costs. These errors resulted in the overstatement of Total operating expenses, Property, plant and equipment, net and Other deferred liabilities and credits in the first and second quarter 2011 interim financial statements and in the 2010, 2009 and 2008 annual periods reported in the Company's December 31, 2010 financial statements. The beginning retained earnings balance presented in the December 31, 2010 annual financial statements was also understated as a result of these errors. 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, amendments of previously filed reports were not required. However, if the adjustments to correct the cumulative errors had been recorded in the third quarter 2011, U.S. Cellular believes the impact would have been significant to the third quarter results and would have impacted comparisons to prior periods. As permitted by SAB 108, revisions for these immaterial amounts to previously reported annual and quarterly results are reflected in the financial information herein and will be reflected in future filings containing such financial information.

The Consolidated Balance Sheet at December 31, 2010 was revised to reflect the cumulative effect of these errors which resulted in an increase to Retained earnings of $5.9 million. In accordance with SAB 108, the Consolidated Balance Sheet, the Consolidated Statement of Operations and the Consolidated Statement of Cash Flows have been revised as follows:


Consolidated Balance Sheet -- December 31, 2010

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

	Property, plant and equipment, net	$	2,615,072	$	(40,550)	$	2,574,522
	Total assets		5,933,610		(40,550)		5,893,060
	Net deferred income tax liability		579,769		3,675		583,444
	Other deferred liabilities and credits		284,949		(50,094)		234,855
	Retained earnings		2,129,638		5,869		2,135,507
	Total U.S. Cellular shareholders' equity		3,480,583		5,869		3,486,452
	Total equity		3,534,101		5,869		3,539,970
	Total liabilities and equity		5,933,610		(40,550)		5,893,060


Consolidated Statement of Operations -- Three Months Ended September 30, 2010

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

	Depreciation, amortization and accretion	$	144,717	$	(1,526)	$	143,191
	Total operating expenses		1,000,948		(1,526)		999,422
	Operating income		59,833		1,526		61,359
	Income before income taxes		68,329		1,526		69,855
	Income tax expense		25,051		588		25,639
	Net income		43,278		938		44,216
	Net income attributable to U.S. Cellular shareholders		37,358		938		38,296
	Basic earnings per share attributable to U.S. Cellular shareholders		0.43		0.02		0.45
	Diluted earnings per share attributable to U.S. Cellular shareholders		0.43		0.01		0.44


Consolidated Statement of Operations -- Nine Months Ended September 30, 2010

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

	Depreciation, amortization and accretion	$	432,405	$	(4,574)	$	427,831
	Total operating expenses		2,913,570		(4,574)		2,908,996
	Operating income		200,961		4,574		205,535
	Income before income taxes		229,232		4,574		233,806
	Income tax expense		86,894		1,762		88,656
	Net income		142,338		2,812		145,150
	Net income attributable to U.S. Cellular shareholders		125,480		2,812		128,292
	Basic earnings per share attributable to U.S. Cellular shareholders		1.45		0.04		1.49
	Diluted earnings per share attributable to U.S. Cellular shareholders		1.45		0.03		1.48


Consolidated Statement of Cash Flows -- Nine Months Ended September 30, 2010

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

	Net income	$	142,338	$	2,812	$	145,150
	Depreciation, amortization and accretion		432,405		(4,574)		427,831
	Deferred income taxes, net		50,180		1,762		51,942
	Cash flows from operating activities		584,013		—		584,013

(1) In Annual Report on Form 10-K for the year ended December 31, 2010, filed on February 25, 2011.
(2) In Quarterly Report on Form 10-Q for the period ended September 30, 2010, filed on November 4, 2010.