2014

U.S. Cellular Reports Second Quarter 2010 Results Revises 2010 financial guidance

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

Note: Comparisons are year over year unless otherwise noted.

2Q 2010 Highlights

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

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

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

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

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

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

Guidance

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




Current guidance

Previous guidance


Service revenues

$3,925-$4,000 million

$3,975-$4,075 million


Adjusted OIBDA(1)

$800-$850 million

$850-$950 million


Operating income

$200-$250 million

$250- $350 million


Depreciation, amortization and accretion(2)

Approx. $600 million

Unchanged


Capital expenditures

Approx. $600 million

Unchanged

(1) Adjusted OIBDA is defined as operating income excluding the effects of: depreciation, amortization and accretion (OIBDA); the net gain or loss on asset disposals (if any); and the loss on impairment of assets (if any).  This measure also may be commonly referred to by management as operating cash flow. This measure should not be confused with cash flows from operating activities, which is a component of the consolidated statement of cash flows.

(2) The 2010 estimated results include estimated losses on disposals of assets, but does not include an estimate for losses on impairment of assets, since these cannot be predicted.



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

Conference call information

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


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

About U.S. Cellular

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

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

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: The ability of the company to successfully manage and grow its markets; the economy; competition; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded our debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; changes in customer growth rates, average monthly revenue per unit, churn rates, roaming revenue and terms, the availability of handset devices, or the mix of products and services offered by the company; and the ability to obtain or maintain roaming arrangements with other carriers. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K used by U.S. Cellular to furnish this press release to the SEC, which are incorporated by reference herein.



United States Cellular Corporation

Summary Operating Data























Quarter Ended


6/30/2010


3/31/2010


12/31/2009


9/30/2009


6/30/2009



Total population



















Consolidated markets (1)



90,468,000



90,468,000



89,712,000



85,118,000



83,726,000




Consolidated operating markets (1)



46,546,000



46,546,000



46,306,000



46,306,000



46,306,000



Market penetration at end of period



















Consolidated markets (2)



6.8%



6.8%



6.8%



7.2%



7.4%




Consolidated operating markets (2)



13.2%



13.2%



13.3%



13.2%



13.3%



All customers



















Total at end of period



6,144,000



6,147,000



6,141,000



6,131,000



6,155,000




Gross additions



349,000



358,000



399,000



386,000



317,000




Net additions (losses)



(3,000)



6,000



10,000



(24,000)



(88,000)



Retail customers



















Total at end of period



5,775,000



5,768,000



5,744,000



5,705,000



5,711,000




Gross additions



307,000



305,000



354,000



351,000



286,000




Net retail additions (losses) (3)



7,000



24,000



39,000



(6,000)



(59,000)





Net postpaid additions (losses)



(22,000)



(9,000)



26,000



8,000



(32,000)





Net prepaid additions (losses)



29,000



33,000



13,000



(14,000)



(27,000)



Service revenues components (000s)



















Voice and other retail service


$

648,565


$

663,759


$

677,107


$

690,576


$

708,847




Data service



215,271



201,280



189,759



174,286



161,955




Total retail service


$

863,836


$

865,039


$

866,866


$

864,862


$

870,802




Inbound roaming



60,902



51,942



61,728



68,767



62,223




Other



47,838



48,027



56,814



50,289



41,323



Total service revenues (000s) (4)


$

972,576


$

965,008


$

985,408


$

983,918


$

974,348
























Divided by average customers (000s)



6,151



6,137



6,139



6,138



6,199




Divided by three months in each quarter



3



3



3



3



3























Average monthly revenue per unit (5)


$

52.71


$

52.41


$

53.51


$

53.43


$

52.39




Voice and other retail service (5)


$

35.14


$

36.05


$

36.77


$

37.51


$

38.11




Data service (5)


$

11.67


$

10.93


$

10.30


$

9.46


$

8.71




Total retail service (5)


$

46.81


$

46.98


$

47.07


$

46.97


$

46.82























Inbound roaming (5)


$

3.30


$

2.82


$

3.35


$

3.73


$

3.35




Other (5)


$

2.60


$

2.61


$

3.09


$

2.73


$

2.22



Postpaid churn rate (6)



1.4%



1.4%



1.6%



1.7%



1.7%



Capital expenditures (000s)


$

133,500


$

121,500


$

189,000


$

128,900


$

91,200



Cell sites in service



7,416



7,310



7,279



7,161



7,043























(1) Used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively, which is calculated by dividing customers by the total market population (without duplication of population in overlapping markets).

(2) Calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated markets and consolidated operating markets, respectively, as estimated by Claritas.

(3) Calculated by adding net postpaid additions (losses) and net prepaid additions (losses).

(4) U.S. Cellular adjusted previously reported service revenues for the three months ended March 31, 2010 and all quarterly periods in 2009.  Previously reported service revenues for the quarterly period ended March 31, 2010 and for the quarterly periods ended December 31, September 30, and June 30, 2009 (as reported in U.S. Cellular's Form 8-K filed on May 10, 2010 for all such periods), were $965.2 million, $984.9 million, $983.4 million and $974.1 million, respectively. 

(5) Calculated by dividing the components of service revenues by the average customers and number of months in the quarter.

(6) Calculated by dividing the total postpaid customer disconnects during the quarter by the average postpaid customer base for the quarter.





United States Cellular Corporation

Consolidated Statement of Operations Highlights

Three Months Ended June 30,

(Unaudited, dollars and shares in thousands, except per share amounts)































     Increase (Decrease)






2010 



2009 (1)



Amount


Percent


Operating revenues
















Service

$

972,576



$

974,348



$

(1,772)





Equipment sales


57,317




67,795




(10,478)



(15%)




Total operating revenues


1,029,893




1,042,143




(12,250)



(1%)


Operating expenses
















System operations (excluding Depreciation,

















amortization and accretion reported below)


213,542




194,709




18,833



10%



Cost of equipment sold


161,965




156,055




5,910



4%



Selling, general and administrative


445,177




411,153




34,024



8%



Depreciation, amortization and accretion


144,455




138,777




5,678



4%



Loss on asset disposals, net


1,250




2,611




(1,361)



(52%)




Total operating expenses


966,389




903,305




63,084



7%




















Operating income


63,504




138,838




(75,334)



(54%)




















Investment and other income (expense)
















Equity in earnings of unconsolidated entities


25,753




24,794




959



4%



Interest and dividend income


862




751




111



15%



Interest expense


(16,438)




(19,856)




3,418



17%



Other, net


472




(2)




474



>100%




Total investment and other income


















(expense)


10,649




5,687




4,962



87%




















Income before income taxes


74,153




144,525




(70,372)



(49%)



Income tax expense


28,181




56,788




(28,607)



(50%)




















Net income


45,972




87,737




(41,765)



(48%)



Less: Net income attributable to noncontrolling

















interests, net of tax


(5,219)




(5,969)




750



13%


Net income attributable to U.S. Cellular shareholders

$

40,753



$

81,768



$

(41,015)



(50%)


















Basic weighted average shares outstanding


86,425




86,992




(567)



(1%)


Basic earnings per share attributable to
















U.S. Cellular shareholders

$

0.47



$

0.94



$

(0.47)



(50%)




















Diluted weighted average shares outstanding


86,787




87,177




(390)




Diluted earnings per share attributable to
















U.S. Cellular shareholders

$

0.47



$

0.94



$

(0.47)



(50%)


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




United States Cellular Corporation

Consolidated Statement of Operations Highlights

Six Months Ended June 30,

(Unaudited, dollars and shares in thousands, except per share amounts)































Increase (Decrease)






2010 



2009 (1)



Amount


Percent


Operating revenues
















Service

$

1,937,584



$

1,957,802



$

(20,218)



(1%)



Equipment sales


116,166




138,685




(22,519)



(16%)





Total operating revenues


2,053,750




2,096,487




(42,737)



(2%)


Operating expenses
















System operations (excluding Depreciation,
















     amortization and accretion reported below)


420,656




394,697




25,959



7%



Cost of equipment sold


323,070




341,756




(18,686)



(5%)



Selling, general and administrative


874,782




819,616




55,166



7%



Depreciation, amortization and accretion


287,688




276,655




11,033



4%



Loss on asset disposals, net


6,426




6,556




(130)



(2%)





Total operating expenses


1,912,622




1,839,280




73,342



4%




















Operating income


141,128




257,207




(116,079)



(45%)




















Investment and other income (expense)
















Equity in earnings of unconsolidated entities


50,447




50,121




326



1%



Interest and dividend income


1,883




1,228




655



53%



Interest expense


(32,962)




(39,283)




6,321



16%



Other, net


407




278




129



46%





Total investment and other income (expense)


19,775




12,344




7,431



60%




















Income before income taxes


160,903




269,551




(108,648)



(40%)



Income tax expense


61,843




91,747




(29,904)



(33%)




















Net income


99,060




177,804




(78,744)



(44%)



Less: Net income attributable to noncontrolling


















interests, net of tax


(10,938)




(11,977)




1,039



9%


Net income attributable to U.S. Cellular shareholders

$

88,122



$

165,827



$

(77,705)



(47%)




















Basic weighted average shares outstanding


86,500




87,093




(593)



(1%)


Basic earnings per share attributable to
















U.S. Cellular shareholders

$

1.02



$

1.90



$

(0.88)



(46%)




















Diluted weighted average shares outstanding


86,873




87,308




(435)




Diluted earnings per share attributable to
















U.S. Cellular shareholders

$

1.01



$

1.90



$

(0.89)



(47%)


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




United States Cellular Corporation

Consolidated Balance Sheet Highlights


(Unaudited, dollars in thousands)











ASSETS













June 30,



December 31,




2010 



2009 (1)


Current assets









Cash and cash equivalents

$

232,853



$

294,411



Short-term investments


135,798




330



Accounts receivable from customers and other


411,450




425,057



Inventory


120,304




152,556



Prepaid income taxes





717



Prepaid expenses


65,219




63,463



Net deferred income tax asset


21,570




21,570



Other current assets


48,662




51,013





1,035,856




1,009,117











Investments









Licenses


1,445,501




1,435,000



Goodwill


494,737




494,737



Customer lists


1,701




4,083



Investments in unconsolidated entities


163,518




161,481



Notes and interest receivable – long-term


4,143




4,214



Long-term investments


40,987








2,150,587




2,099,515











Property, plant and equipment









In service and under construction


6,096,533




5,884,307



Less: accumulated depreciation


3,525,193




3,282,969





2,571,340




2,601,338











Other assets and deferred charges


37,865




38,776











Total assets

$

5,795,648



$

5,748,746


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




United States Cellular Corporation

Consolidated Balance Sheet Highlights


(Unaudited, dollars in thousands)












LIABILITIES AND SHAREHOLDERS' EQUITY















June 30,



December 31,





2010 



2009 (1)


Current liabilities









Current portion of long-term debt

$

86



$

76



Accounts payable










Affiliated


11,714




14,732




Trade


262,279




296,288



Customer deposits and deferred revenues


144,101




140,248



Accrued taxes


90,802




57,507



Accrued compensation


45,086




62,242



Other current liabilities


80,322




92,884






634,390




663,977












Deferred liabilities and credits









Net deferred income tax liability


497,797




513,994



Other deferred liabilities and credits


273,467




262,412












Long-term debt


867,880




867,522












Commitments and contingencies


















Noncontrolling interests with mandatory redemption features


746




727












Equity








U.S. Cellular shareholders' equity









Series A Common and Common Shares, par value $1 per share


88,074




88,074



Additional paid-in capital


1,364,129




1,356,322



Treasury shares


(80,107)




(69,616)



Retained earnings


2,090,966




2,013,633




Total U.S. Cellular shareholders' equity


3,463,062




3,388,413












Noncontrolling interests


58,306




51,701













Total equity


3,521,368




3,440,114












Total liabilities and equity

$

5,795,648



$

5,748,746


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



United States Cellular Corporation

Schedule of Cash and Cash Equivalents and Investments

(Unaudited, dollars in thousands)


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






June 30,


December 31,




2010 


2009 












Cash and cash equivalents


$

232,853


$

294,411


Amounts included in short-term investments









U.S. treasuries




110,451





Certificates of deposit (1)




104



330



Commercial paper (2)




25,243







$

135,798


$

330


Amounts included in long-term investments (3)









U.S. treasuries




10,071





Commercial paper (2)




30,916







$

40,987


$











(1) U.S. Cellular's investments in certificates of deposits are insured by the FDIC.

(2) U.S. Cellular's investments in commercial paper are insured by the FDIC under its Temporary Liquidity Guarantee Program.

(3) U.S. Cellular's long-term investments have maturity dates between July 2011 and December 2012.




United States Cellular Corporation

Consolidated Statement of Cash Flows

Six Months Ended June 30,

(Unaudited, dollars in thousands)

























2010 



2009 (1)

Cash flows from operating activities








Net income

$

99,060



$

177,804


Add (deduct) adjustments to reconcile net income to net









cash flows from operating activities










Depreciation, amortization and accretion


287,688




276,655




Bad debts expense


36,605




39,028




Stock-based compensation expense


9,012




7,974




Deferred income taxes, net


(9,935)




19,084




Equity in earnings of unconsolidated entities


(50,447)




(50,121)




Distributions from unconsolidated entities


48,491




12,997




Loss on asset disposals, net


6,426




6,556




Other operating activities


(464)




1,209


Changes in assets and liabilities from operations










Accounts receivable


(22,995)




(68,923)




Inventory


32,252




(10,391)




Accounts payable - trade


(34,009)




(41,378)




Accounts payable - affiliate


(3,017)




4,137




Customer deposits and deferred revenues


3,854




(5,699)




Accrued taxes


27,744




71,041




Accrued interest


121




450




Other assets and liabilities


(26,680)




(67,300)






403,706




373,123

Cash flows from investing activities








Additions to property, plant and equipment


(255,004)




(228,902)


Cash paid for acquisitions and licenses


(10,501)




(12,327)


Cash paid for investments


(175,000)




(275)


Other investing activities


889




1,432






(439,616)




(240,072)

Cash flows from financing activities








Common shares reissued for benefit plans, net of tax payments


144




(405)


Common shares repurchased


(21,423)




(19,332)


Payment of debt issuance costs





(4,309)


Distributions to noncontrolling interests


(4,314)




(4,060)


Other financing activities


(55)




(21)






(25,648)




(28,127)











Net increase (decrease) in cash and cash equivalents


(61,558)




104,924











Cash and cash equivalents








Beginning of period


294,411




170,996


End of period

$

232,853



$

275,920











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





United States Cellular Corporation

Financial Measures and Reconciliations


(Unaudited, dollars in thousands)






















Three Months Ended June 30



Six Months Ended June 30





2010 



2009 (5)




2010 



2009 (5)





















Service revenues


$

972,576


$

974,348



$

1,937,584


$

1,957,802





















Operating income



63,504



138,838




141,128



257,207



Add:

















Depreciation, amortization and accretion



144,455



138,777




287,688



276,655




Loss on asset disposals



1,250



2,611




6,426



6,556





Adjusted OIBDA (1)(4)


$

209,209


$

280,226



$

435,242


$

540,418























Adjusted OIBDA margin (2)



21.5%



28.8%




22.5%



27.6%






































2010



2009




2010



2009





















Cash flows from operating activities


$

251,454


$

187,561



$

403,706


$

373,123



Deduct:

















Capital expenditures



133,490



91,161




255,004



228,902





Free cash flow (3)


$

117,964


$

96,400



$

148,702


$

144,221

(1) Adjusted OIBDA is defined as operating income excluding the effects of: depreciation, amortization, and accretion (OIBDA); the net gain or loss on asset disposals (if any); and the loss on impairment of assets (if any).  This measure also may be commonly referred to by management as operating cash flow.  This measure should not be confused with cash flows from operating activities, which is a component of the consolidated statement of cash flows.

(2) Adjusted OIBDA margin is defined as adjusted OIBDA divided by service revenues. Equipment revenues are excluded from the denominator of the calculation since equipment is generally sold at a net negative margin, and the equipment subsidy is effectively a cost for purposes of assessing business results.  U.S. Cellular believes that this calculation method is consistent with the method used by certain investors to assess U.S. Cellular's business results.  Adjusted OIBDA margin may also be commonly referred to by management as operating cash flow margin.

(3) Free cash flow is defined as cash flows from operating activities minus capital expenditures. Free cash flow is a non-GAAP financial measure.  U.S. Cellular believes that free cash flow as reported by U.S. Cellular is useful to investors and other users of its financial information in evaluating the amount of cash generated by business operations, after consideration of capital expenditures.

(4) Adjusted OIBDA excludes the net gain or loss on asset disposals and loss on impairment of assets, if any, in order to show operating results on a more comparable basis from period to period.  U.S. Cellular does not intend to imply that any of such amounts that are excluded are non-recurring, infrequent or unusual, and accordingly, they may be incurred in the future.

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



Revision of Prior Period Amounts

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

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

















Consolidated Balance Sheet — December 31, 2009





















As previously










(Dollars in thousands)

reported (1)


Adjustment


Revised















Accounts receivable from customers and other

$

421,528



$

3,529



$

425,057



Total current assets


1,005,588




3,529




1,009,117



Total assets


5,745,217




3,529




5,748,746



Customer deposits and deferred revenues


143,760




(3,512)




140,248



Accrued taxes


34,583




22,924




57,507



Total current liabilities


644,565




19,412




663,977



Retained earnings


2,029,516




(15,883)




2,013,633



Total U.S. Cellular shareholders' equity


3,404,296




(15,883)




3,388,413



Total equity


3,455,997




(15,883)




3,440,114



Total liabilities and equity


5,745,217




3,529




5,748,746






























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




















As previously










(Dollars in thousands, except per share amounts)

reported (2)


Adjustment


Revised

















Service revenues

$

974,755



$

(407)



$

974,348



Total operating revenues


1,042,550




(407)




1,042,143



System operations expenses (excluding Depreciation amortization and accretion)


194,806




(97)




194,709



Selling, general and administrative expenses


410,070




1,083




411,153



Depreciation, amortization and accretion


138,614




163




138,777



Loss on asset disposals, net


2,086




525




2,611



Total operating expenses


901,631




1,674




903,305



Operating income


140,919




(2,081)




138,838



Interest expense


(19,387)




(469)




(19,856)



Total investment and other income (expense)


6,156




(469)




5,687



Income before income taxes


147,075




(2,550)




144,525



Income tax expense


57,748




(960)




56,788



Net income


89,327




(1,590)




87,737



Net income attributable to U.S. Cellular shareholders


83,358




(1,590)




81,768



Basic earnings per share attributable to U.S. Cellular shareholders


0.96




(0.02)




0.94



Diluted earnings per share attributable to U.S. Cellular shareholders


0.96




(0.02)




0.94




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




















As previously










(Dollars in thousands, except per share amounts)

reported (2)


Adjustment


Revised















Service revenues

$

1,956,629



$

1,173



$

1,957,802



Total operating revenues


2,095,314




1,173




2,096,487



System operations expenses (excluding Depreciation, amortization and accretion)


394,809




(112)




394,697



Selling, general and administrative expenses


822,518




(2,902)




819,616



Depreciation, amortization and accretion


276,265




390




276,655



Loss on asset disposals, net


4,277




2,279




6,556



Total operating expenses


1,839,625




(345)




1,839,280



Operating income


255,689




1,518




257,207



Interest expense


(38,409)




(874)




(39,283)



Total investment and other income (expense)


13,218




(874)




12,344



Income before income taxes


268,907




644




269,551



Income tax expense


88,980




2,767




91,747



Net income


179,927




(2,123)




177,804



Net income attributable to U.S. Cellular shareholders


167,950




(2,123)




165,827



Basic earnings per share attributable to U.S. Cellular shareholders


1.93




(0.03)




1.90

















Diluted earnings per share attributable to U.S. Cellular shareholders


1.92




(0.02)




1.90














































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




















As previously










(Dollars in thousands)

reported (2)


Adjustment


Revised















Net income

$

179,927



$

(2,123)



$

177,804



Depreciation, amortization and accretion


276,265




390




276,655



Deferred income taxes, net


19,604




(520)




19,084



Loss on asset disposals, net


4,277




2,279




6,556



Change in accounts receivable


(63,510)




(5,413)




(68,923)



Change in customer deposits and deferred revenues


(5,372)




(327)




(5,699)



Change in accrued taxes


64,851




6,190




71,041



Change in other assets and liabilities


(66,824)




(476)




(67,300)



Cash flows from operating activities


373,123







373,123


(1) In Annual Report on Form 10-K for the year ended December 31, 2009 filed on February 25, 2010.

(2) In Quarterly Report on Form 10-Q for the period ended June 30, 2009 filed on August 6, 2009.



SOURCE United States Cellular Corporation



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