FOR RELEASE: IMMEDIATEU.S. CELLULAR REPORTS FIRST QUARTER RESULTS
Surpasses 5 Million Customer Milestone CHICAGO — April 27, 2005 — United States Cellular Corporation [AMEX:USM] reported service revenues of $668.8 million for the first quarter of 2005, up 8% from $619.4 million in the comparable period a year ago. During the quarter, U.S. Cellular crossed the five million customer mark, totaling 5,127,000 customers at quarter end. The company recorded operating income of $36.2 million during the quarter compared to $28.3 million in the first quarter of 2004. Net income and basic earnings per share were $16.9 million and $0.20, respectively, compared to net income and basic earnings per share of $9.2 million and $0.11, respectively, in the comparable period one year ago. First quarter 2005 operating results do not include any results from operations of the south Texas markets that were sold to AT&T Wireless Services, Inc., now a subsidiary of Cingular Wireless LLC, in February 2004, or results of operations from the markets sold to ALLTEL Communications, Inc. in November 2004. The markets sold in 2004 contributed $11.5 million of service revenues in the first quarter of 2004. First Quarter Highlights- Customers totaled 5,127,000, a 13% increase from 4,547,000 customers one year earlier.
- Net customer activations from distribution channels totaled 182,000 during the quarter, compared to 196,000 activations for the same quarter of 2004. The 182,000 net customer activations includes 123,000 retail and 59,000 reseller customer activations.
- For the quarter, the company recorded post-pay churn of 1.5%, which is favorable to industry averages.
President’s Comments
“We are starting this year on a very strong note, recording 182,000 new customer additions from distribution channels in our first quarter. This exceptional performance caused us to surpass the five million customer mark during the quarter with customer unit activations at quarter-end totaling 5,127,000. Service revenues grew 8% from a year ago, primarily reflecting customer growth and increased data revenues, despite the sale of several properties,” said John E. Rooney, president and chief executive officer. “During the last 15 months we have continued to grow and enhance oureasyedgeSM wireless data applications and we have more enhancements to come later this year. Customer demand for data services has been strong. We recorded $29 million of data revenues in the quarter, up from $11 million in the first quarter a year ago. We expect this growth to continue as more customers become familiar with our service offerings and as we increase the number of new applications. Last month, for example, we added AOL® Instant MessagingTM, a feature we expect to be very popular. We are also planning to introduce intercarrier picture messaging before year end. “Our success is due to our dedicated associates, who are focused on providing the very best in customer satisfaction. Their passion and commitment resulted in U.S. Cellular having once again one of the lowest customer churn rates in the industry. During the quarter, post-pay churn was 1.5%, and all-in churn was 1.6%. Another testimony that our customer satisfaction strategy is a successful one was noted by Consumers Union, publisher of CONSUMER REPORTS magazine. Consumers Union, in its analysis of FCC data, found that U.S. Cellular had the lowest number of complaints per million customers of the eight largest wireless carriers in the U.S.” “The three new markets we launched in the third quarter of 2004, Portland, Maine; Oklahoma City; and Lincoln, Nebraska, continue to perform well. This year we are focused on launching commercial service in one major new market, St. Louis, Missouri, in the third quarter. The St. Louis launch will be larger in scale than the Oklahoma City, Portland and Lincoln launches combined. Much of the network to support the St. Louis market is up and running, and we have been hiring and training associates for several months. We are excited about offering service in St. Louis, as we feel it will greatly enhance the value of our existing franchise, particularly for customers in the Midwest.” As previously announced, TDS and U.S. Cellular will hold a joint teleconference April 27, 2005, at 10:00 a.m. Chicago time. Interested parties may listen to the call live over the Internet by accessinghttp://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&eventID=1054136, or the conference call page of the Investor Relations section ofwww.uscellular.com, or connect by telephone at 888/245-6674 with a pass code of 5585317. The conference call will be archived on the conference call section of our web site atwww.uscellular.com. Prior to the start of the call, certain financial and statistical information discussed during the conference call comments will be posted to the web site, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. Investors may access this additional information on the conference call page of the Investor Relations section of the U.S. Cellular web site. As of March 31, U.S. Cellular Corporation, the nation’s seventh largest wireless service carrier, provided wireless service to 5.1 million customers in 25 states. The Chicago-based company operates on a customer satisfaction strategy, meeting customer needs by providing a comprehensive range of wireless products and services, superior customer support and a high-quality network. 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 2
statements. This includes all statements about the company’s plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, 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: changes in circumstances or events that may affect the ability of the company to launch up the operations of the licensed areas involved in the AT&T Wireless transaction completed in August 2003; the ability of the company to successfully manage and grow the operations of the Chicago MTA and newly launched markets; changes in the overall economy; changes in competition in the markets in which the company operates; changes due to industry consolidation; advances in telecommunications technology; the impact of wireless local number portability; changes in the telecommunications regulatory environment; changes in the value of investments, including variable prepaid forward contracts; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations; pending and future litigation; acquisitions/divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates, roaming rates and the mix of products and services offered in the company’s markets. 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, which are incorporated by reference herein. U.S. Cellular’s web site iswww.uscellular.com 3
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