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Press Release Details

U.S. Cellular Reports First Quarter Results

05/10/2010

Data revenues increase 28 percent; postpay churn reduced to 1.4 percent

CHICAGO, May 10, 2010 /PRNewswire via COMTEX/ --Note: Comparisons are year over year unless otherwise noted.

1Q 2010 Highlights

  • 24,000 retail net additions, reflecting a gain of 33,000 prepaid customers and a loss of 9,000 postpay customers.
  • Service revenues of $965.2 million decreased 2 percent due to reductions in voice and inbound roaming revenues, offset by higher data revenues.
  • 28 percent increase in data revenues to $201.3 million, representing 21 percent of total service revenues.
  • Retail service ARPU (average revenue per unit) increased to $46.99 from $46.87.
  • Retail postpay churn of 1.4 percent; postpay customers comprised 95 percent of retail customers.
  • 5 percent increase in cell sites in service to 7,310.
  • Repurchased 127,500 common shares for $5.2 million.

 

As previously announced, U.S. Cellular will hold a teleconference on May 10, 2010, at 9:30 am 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 $965.2 million for the first quarter of 2010, a 2 percent decrease from $983.6 million in the comparable period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $48.2 million and $0.55, respectively, for the first quarter of 2010, compared to $84.5 million and $0.97, respectively, in the comparable period one year ago.

"U.S. Cellular's commitment to providing excellent communications experiences including superior data services delivered results in important areas," said John E. Rooney, U.S. Cellular president and CEO. "Data revenues grew 28 percent due to the continuing rapid adoption of smartphones and premium phones, and the increased data use related to these phones, as well as to overall increases in text and picture messaging. The growth in data revenues partially offset the effect of lower voice revenues and inbound roaming revenues.

"We also achieved a reduction in churn, as customers responded well to our high-quality services and wide range of feature-rich handsets, and to our Battery Swap and Overage Protection programs, demonstrating that we understand our customers' needs and exceed their expectations.

"As we expand 3G availability and add to our portfolio of smartphones, including two new Android phones--one from HTC and an exclusive from Samsung, we expect data revenues to continue to grow and to comprise an ever larger share of service revenues.

"Though postpay customers remain our primary focus, we are executing on growth opportunities in the prepaid segment. The improved prepaid additions this quarter are proof that we provide outstanding communications experiences for all of our customers. To build on this success, we significantly enhanced our prepaid offerings at the end of the quarter by adding new data services such as picture messaging, applications such as ring tones and games, e-mail and web services.

"Also, as part of our major enablement initiatives, we upgraded our campaign management system to facilitate more targeted and effective direct mail campaigns. Though profitability for the quarter was impacted by planned expenditures related to these initiatives, we expect that the initiatives will ultimately reduce operational expenses and support our customer-focused strategy over the long term."

Guidance

Guidance for the year ending Dec. 31, 2010 as of May 10, 2010 is as follows. Guidance is unchanged from Feb. 25, 2010 except that the company has commenced guidance on adjusted OIBDA. There can be no assurance that final results will not differ materially from this guidance.

    Service revenues                                 $3,975-$4,075 million
    Adjusted OIBDA(1)                                $850-$950 million
    Operating income                                 $250-$350 million
    Depreciation, amortization and
     accretion(2)                                    Approx. $600 million
    Capital expenditures                             Approx. $600 million

    (1) 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
    intangible assets (if any).  This amount may also be commonly
    referred to by management as operating cash flow. This amount should
    not be confused with cash flows from operating activities, which is
    a component of the consolidated statement of cash flows.
    (2) Includes estimated losses on disposals of assets but does not
    include an estimate for loss on impairment of intangible assets
    since this cannot be predicted.

The foregoing guidance represents the views of management as of May 10, 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 May 10, 2010 at 9:30 a.m. CDT.

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, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. 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 March 31, 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                       3/31/2010  12/31/2009   9/30/2009
                                        ---------  ----------   ---------
    Total population
      Consolidated markets (1)         90,468,000  89,712,000   85,118,000
      Consolidated operating
       markets (1)                     46,546,000  46,306,000   46,306,000
    Market penetration at end of
     period
      Consolidated markets (2)                6.8%        6.8%         7.2%
      Consolidated operating
       markets (2)                           13.2%       13.3%        13.2%
    All customers
      Total at end of period            6,147,000   6,141,000    6,131,000
      Gross additions                     358,000     399,000      386,000
      Net additions (losses)                6,000      10,000      (24,000)
    Retail customers
      Total at end of period            5,768,000   5,744,000    5,705,000
      Gross additions                     305,000     354,000      351,000
      Net retail additions (losses)(3)     24,000      39,000       (6,000)
        Net postpay additions (losses)     (9,000)     26,000        8,000
        Net prepaid additions (losses)     33,000      13,000      (14,000)
    Service revenues components
     (000s)
      Voice and other retail service     $663,939    $676,554     $690,106
      Data service                        201,280     189,759      174,286
                                          -------     -------      -------
      Total retail service               $865,219    $866,313     $864,392
      Inbound roaming                      51,942      61,728       68,767
      Other                                48,027      56,814       50,289
                                           ------      ------       ------
    Total service revenues (000s)(4)     $965,188    $984,855     $983,448

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

    Average monthly revenue per
     unit (5)                              $52.42      $53.48       $53.41
      Voice and other retail
       service (5)                         $36.06      $36.75       $37.48
      Data service (5)                     $10.93      $10.30        $9.46
                                           ------      ------        -----
      Total retail service (5)             $46.99      $47.05       $46.94

      Inbound roaming (5)                   $2.82       $3.35        $3.73
      Other (5)                             $2.61       $3.08        $2.74
    Postpay churn rate (6)                    1.4%        1.6%         1.7%
    Capital expenditures (000s)          $121,500    $189,000     $128,900
    Cell sites in service                   7,310       7,279        7,161


    Quarter Ended                              6/30/2009         3/31/2009
                                               ---------         ---------
    Total population
      Consolidated markets (1)                83,726,000        83,726,000
      Consolidated operating markets(1)       46,306,000        46,306,000
    Market penetration at end of
     period
      Consolidated markets (2)                       7.4%              7.5%
      Consolidated operating markets(2)             13.3%             13.5%
    All customers
      Total at end of period                   6,155,000         6,243,000
      Gross additions                            317,000           404,000
      Net additions (losses)                     (88,000)           47,000
    Retail customers
      Total at end of period                   5,711,000         5,770,000
      Gross additions                            286,000           366,000
      Net retail additions (losses)(3)           (59,000)           63,000
        Net postpay additions (losses)           (32,000)           60,000
        Net prepaid additions (losses)           (27,000)            3,000
    Service revenues components (000s)
      Voice and other retail service            $708,609          $718,885
      Data service                               161,955           156,954
                                                 -------           -------
      Total retail service                      $870,564          $875,839
      Inbound roaming                             62,223            60,057
      Other                                       41,323            47,719
                                                  ------            ------
    Total service revenues (000s)(4)            $974,110          $983,615

      Divided by average customers
       (000s)                                      6,199             6,229
      Divided by three months in each
       quarter                                         3                 3
                                                     ---               ---

    Average monthly revenue per
     unit (5)                                     $52.38            $52.64
      Voice and other retail service(5)           $38.11            $38.47
      Data service (5)                             $8.71             $8.40
                                                   -----             -----
      Total retail service (5)                    $46.82            $46.87

      Inbound roaming (5)                          $3.35             $3.21
      Other (5)                                    $2.21             $2.56
    Postpay churn rate (6)                           1.7%              1.5%
    Capital expenditures (000s)                  $91,200          $137,700
    Cell sites in service                          7,043             6,942


    (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 postpay additions (losses) and net
    prepaid additions (losses).
    (4) U.S. Cellular revised previously reported Service revenues for
    all quarterly periods in 2009 to reflect certain corrections. See
    "Revision of Prior Period Amounts" section for additional details.
    Previously reported Service revenues were $986.3 million, $984.9
    million, $974.8 million and $981.9 million for the three month
    periods ended December 31, September 30, June 30 and March 31, 2009,
    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 postpay customer disconnects
    during the quarter by the average postpay customer base for the
    quarter.


                       United States Cellular Corporation
                 Consolidated Statement of Operations Highlights
                          Three Months Ended March 31,
     (Unaudited, dollars and shares in thousands, except per share amounts)


                                                2010    2009 (1)
                                                ----    -------
    Operating revenues
      Service                                $965,188   $983,615
      Equipment sales                          58,849     70,890
                                               ------     ------
        Total operating revenues            1,024,037  1,054,505
                                            ---------  ---------
    Operating expenses
      System operations (excluding
       Depreciation, amortization and
        accretion reported below)             207,077    199,883
      Cost of equipment sold                  161,105    185,701
      Selling, general and administrative     428,661    408,159
      Depreciation, amortization and
       accretion                              143,233    137,878
      Loss on asset disposals, net              5,176      3,945
                                                -----      -----
        Total operating expenses              945,252    935,566
                                              -------    -------

    Operating income                           78,785    118,939

    Investment and other income (expense)
      Equity in earnings of unconsolidated
       entities                                24,694     25,327
      Interest and dividend income              1,021        477
      Interest expense                        (16,286)   (19,287)
      Other, net                                  (65)       280
                                                  ---        ---
        Total investment and other income
           (expense)                            9,364      6,797
                                                -----      -----

    Income before income taxes                 88,149    125,736
      Income tax expense                       34,198     35,226
                                               ------     ------

    Net income                                 53,951     90,510
      Less: Net income attributable to
       noncontrolling interests,
       net of tax                              (5,719)    (6,008)
                                               ------     ------
    Net income attributable to U.S.
     Cellular shareholders                    $48,232    $84,502
                                              =======    =======

    Basic weighted average shares
     outstanding                               86,576     87,196
    Basic earnings per share attributable
     to U.S. Cellular shareholders              $0.56      $0.97
                                                =====      =====

    Diluted weighted average shares
     outstanding                               86,978     87,446
    Diluted earnings per share attributable
     to U.S. Cellular shareholders              $0.55      $0.97
                                                =====      =====

                                                     Increase (Decrease)
                                                     -------------------
                                                   Amount            Percent
                                                   ------            -------
    Operating revenues
      Service                                     $(18,427)            (2%)
      Equipment sales                              (12,041)           (17%)
                                                   -------
        Total operating revenues                   (30,468)            (3%)
                                                   -------
    Operating expenses
      System operations (excluding
       Depreciation, amortization and
        accretion reported below)                    7,194               4%
      Cost of equipment sold                       (24,596)           (13%)
      Selling, general and administrative           20,502               5%
      Depreciation, amortization and
       accretion                                     5,355               4%
      Loss on asset disposals, net                   1,231              31%
                                                     -----
        Total operating expenses                     9,686               1%
                                                     -----

    Operating income                               (40,154)           (34%)

    Investment and other income (expense)
      Equity in earnings of unconsolidated
       entities                                       (633)            (2%)
      Interest and dividend income                     544            >100%
      Interest expense                               3,001              16%
      Other, net                                      (345)          >(100)%
                                                      ----
        Total investment and other income
           (expense)                                 2,567              38%
                                                     -----

    Income before income taxes                     (37,587)           (30%)
      Income tax expense                            (1,028)            (3%)
                                                    ------

    Net income                                     (36,559)           (40%)
      Less: Net income attributable to
       Noncontrolling interests, net of tax            289               5%
                                                       ---
    Net income attributable to U.S.
     Cellular shareholders                        $(36,270)           (43%)
                                                  ========

    Basic weighted average shares
     outstanding                                      (620)            (1%)
    Basic earnings per share attributable
     To U.S. Cellular shareholders                  $(0.41)           (42%)
                                                    ======

    Diluted weighted average shares
     outstanding                                      (468)            (1%)
    Diluted earnings per share attributable
     To U.S. Cellular shareholders                  $(0.42)           (43%)
                                                    ======

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



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

                                           ASSETS


                                                      March 31, December 31,
                                                        2010     2009 (1)
                                                        ----     -------
    Current assets
      Cash and cash equivalents                       $289,658   $294,411
      Short-term investments                            25,534        330
      Accounts receivable from customers and other     404,553    425,057
      Inventory                                        153,278    152,556
      Prepaid income taxes                                   -        717
      Prepaid expenses                                  72,829     63,463
      Net deferred income tax asset                     21,570     21,570
      Other current assets                              55,250     51,013
                                                        ------     ------
                                                     1,022,672  1,009,117

    Investments
      Licenses                                       1,438,800  1,435,000
      Goodwill                                         494,737    494,737
      Customer lists                                     2,892      4,083
      Investments in unconsolidated entities           178,903    161,481
      Notes and interest receivable - long-term          4,179      4,214
                                                         -----      -----
                                                     2,119,511  2,099,515

    Property, plant and equipment
      In service and under construction              5,975,704  5,884,307
      Less: accumulated depreciation                 3,397,244  3,282,969
                                                     ---------  ---------
                                                     2,578,460  2,601,338

    Other assets and deferred charges                   38,393     38,776


    Total assets                                    $5,759,036 $5,748,746


    (1) Amounts have been revised. 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



                                                       March 31, December 31,
                                                         2010       2009 (1)
                                                         ----       -------
    Current liabilities
      Current portion of long-term debt                     $84         $76
      Accounts payable
        Affiliated                                        8,889      14,732
        Trade                                           256,913     296,288
      Customer deposits and deferred revenues           140,651     140,248
      Accrued taxes                                      83,876      52,026
      Accrued compensation                               38,220      62,242
      Other current liabilities                          90,602      92,884
                                                         ------      ------
                                                        619,235     658,496

    Deferred liabilities and credits
      Net deferred income tax liability                 504,822     513,151
      Other deferred liabilities and credits            268,795     262,412
                                                        -------     -------
                                                        773,617     775,563

    Long-term debt                                      867,662     867,522

    Commitments and contingencies

    Noncontrolling interests with mandatory
     redemption features                                    752         727

    Equity
    U.S. Cellular shareholders' equity
      Common Shares, par value $1 per share              55,068      55,068
      Series A Common Shares, par value $1 per share     33,006      33,006
      Additional paid-in capital                      1,360,712   1,356,322
      Treasury shares                                   (72,194)    (69,616)
      Retained earnings                               2,066,066   2,019,957
                                                      ---------   ---------
        Total U.S. Cellular shareholders' equity      3,442,658   3,394,737

    Noncontrolling interests                             55,112      51,701
                                                         ------      ------

      Total equity                                    3,497,770   3,446,438


    Total liabilities and equity                     $5,759,036  $5,748,746


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


                           United States Cellular Corporation
                          Consolidated Statement of Cash Flows
                               Three Months Ended March 31,
                            (Unaudited, dollars in thousands)



                                                              2010   2009 (1)
                                                              ----   -------
    Cash flows from operating activities
      Net income                                            $53,951   $90,510
      Add (deduct) adjustments to reconcile net income to
       net cash flows from operating activities
          Depreciation, amortization and accretion          143,233   137,878
          Bad debts expense                                  19,193    18,704
          Stock-based compensation expense                    3,830     2,964
          Deferred income taxes, net                         (2,419)    2,342
          Equity in earnings of unconsolidated entities     (24,694)  (25,327)
          Distributions from unconsolidated entities          7,238     5,908
          Loss on asset disposals, net                        5,176     3,945
          Other operating activities                            274       440
      Changes in assets and liabilities from operations
          Accounts receivable                                 1,313   (18,132)
          Inventory                                            (722)    7,204
          Accounts payable - trade                          (39,375)  (30,754)
          Accounts payable - affiliate                       (5,843)   (2,358)
          Customer deposits and deferred revenues               403    (1,579)
          Accrued taxes                                      29,860    42,144
          Accrued interest                                    9,221     9,337
          Other assets and liabilities                      (48,387)  (57,664)
                                                            -------   -------
                                                            152,252   185,562
                                                            -------   -------
    Cash flows from investing activities
      Additions to property, plant and equipment           (121,514) (137,741)
      Cash paid for acquisitions and licenses                (3,800)  (12,127)
      Cash paid for investments                             (25,000)     (278)
      Other investing activities                                356       518
                                                                ---       ---
                                                           (149,958) (149,628)
                                                           --------  --------
    Cash flows from financing activities
      Common shares reissued for benefit plans, net of tax
       payments                                                 486       356
      Common shares repurchased                              (5,186)  (13,291)
      Distributions to noncontrolling interests              (2,284)   (2,101)
      Other financing activities                                (63)      (97)
                                                                ---       ---
                                                             (7,047)  (15,133)
                                                             ------   -------

    Net increase (decrease) in cash and cash equivalents     (4,753)   20,801

    Cash and cash equivalents
      Beginning of period                                   294,411   170,996
                                                            -------   -------
      End of period                                        $289,658  $191,797
                                                           ========  ========

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


                   United States Cellular Corporation
                  Financial Measures and Reconciliations
                       Three Months Ended March 31,
                     (Unaudited, dollars in thousands)


                                        2010       2009 (5)
                                        ----       -------

     Service revenues                 $965,188     $983,615

     Operating income                   78,785      118,939
     Add:
        Depreciation,
         amortization and
         accretion                    $143,233     $137,878
        Loss on asset disposals          5,176        3,945
                                         -----        -----
           Adjusted OIBDA (1)(4)      $227,194     $260,762

            Adjusted OIBDA margin(2)      23.5%        26.5%


                                         2010         2009
                                         ----         ----

      Cash flows from operating
      activities                      $152,252     $185,562
      Deduct:
        Capital expenditures           121,514      137,741
                                       -------      -------
           Free cash flow (3)          $30,738      $47,821
                                       -------      -------

    (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 intangible assets (if any).  This amount may also be
    commonly referred to by management as operating cash flow.  This
    amount should not be confused with cash flows from operating
    activities, which is a component of the consolidated statement of
    cash flows.
    (2) 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) 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) Excludes the net gain or loss on asset disposals and loss on
    impairment of intangible 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.  Accordingly,
    you should be aware that U.S. Cellular may incur such amounts in the
    future.
    (5) Previously reported GAAP amounts have been revised. 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 service revenues and sales tax liabilities. These errors resulted in the overstatement of service revenues and understatement of sales tax liabilities for 2009, 2008 and 2007. 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 quarter 2010, U.S. Cellular believes the impact would have been significant to the first quarter and would impact comparisons to prior periods. As permitted by SAB 108, U.S. Cellular revised in the current filing and plans to revise in the next filings of its quarterly and annual consolidated financial statements previously reported annual and quarterly results for 2009, 2008 and 2007 for these immaterial amounts. In addition to recording these adjustments, U.S. Cellular recorded and plans to record other adjustments to prior-year amounts to correct other immaterial items, which include adjustments related to rent expense as disclosed in U.S. Cellular's 2009 Form 10-K.

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 $9.6 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 Statement of Operations -- Three Months Ended March 31, 2009


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


     Service revenues                    $981,874       $1,741   $983,615
     Total operating revenues           1,052,764        1,741  1,054,505
     System operations expenses
      (excluding Depreciation,
      amortization and accretion)         200,003         (120)   199,883
     Selling, general and
      administrative expenses             412,448       (4,289)   408,159
     Depreciation, amortization and
      accretion                           137,651          227    137,878
     Loss on asset disposals, net           2,191        1,754      3,945
     Total operating expenses             937,994       (2,428)   935,566
     Operating income                     114,770        4,169    118,939
     Interest expense                     (19,022)        (265)   (19,287)
     Total investment and other income
      (expense)                             7,062         (265)     6,797
     Income before income taxes           121,832        3,904    125,736
     Income tax expense                    31,232        3,994     35,226
     Net income                            90,600          (90)    90,510
     Net income attributable to U.S.
      Cellular shareholders                84,592          (90)    84,502
     Basic earnings attributable to
      U.S. Cellular shareholders             0.97            -       0.97
     Diluted earnings attributable to
      U.S. Cellular shareholders             0.97            -       0.97


    Consolidated Balance Sheet -- December 31, 2009

                                            As
                                        previously
     (Dollars in thousands)              reported   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      17,443     52,026
     Total current liabilities             644,565      13,931    658,496
     Net deferred income tax liability     513,994        (843)   513,151
     Total deferred liabilities and
      credits                              776,406        (843)   775,563
     Retained earnings                   2,029,516      (9,559) 2,019,957
     Total U.S. Cellular shareholders'
      equity                             3,404,296      (9,559) 3,394,737
     Total equity                        3,455,997      (9,559) 3,446,438
     Total liabilities and equity        5,745,217       3,529  5,748,746


    Consolidated Statement of Cash Flows -- Three Months Ended March 31, 2009


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


     Net income                              $90,600         $(90)   $90,510
     Depreciation, amortization and
      accretion                              137,651          227    137,878
     Deferred income taxes, net                1,673          669      2,342
     Loss on asset disposals, net              2,191        1,754      3,945
     Change in accounts receivable           (13,468)      (4,664)   (18,132)
     Change in customer deposits and
      deferred revenues                       (1,392)        (187)    (1,579)
     Change in accrued taxes                  39,591        2,553     42,144
     Change in other assets and
      liabilities                            (57,402)        (262)   (57,664)
     Cash flows from operating activities    185,562            -    185,562



SOURCE U.S. Cellular