Exhibit 99.1
NEWS RELEASE
| Contact: | Mark A. Steinkrauss, Vice President, Corporate Relations (312) 592-5384 mark.steinkrauss@teldta.com |
| Julie D. Mathews, Manager, Investor Relations (312) 592-5341 julie.mathews@teldta.com | |
FOR RELEASE: IMMEDIATE
| U.S. CELLULAR REPORTS INCREASES IN SERVICE, DATA REVENUES |
| Service and data revenues increase 2 and 36 percent in the quarter |
Note: Comparisons are year over year unless otherwise noted.
1Q 2009 Highlights
| § | 2 percent increase in service revenues, to $981.9 million. |
| § | 36 percent increase in data revenues, to $157.0 million, representing 16 percent of service revenues. |
| § | 1 percent increase in ARPU (average monthly service revenue per unit), to $52.54. |
| § | Postpay churn remained low at 1.5 percent; postpay customers comprised 95 percent of retail customers. |
| § | 8 percent increase in cell sites in service, to 6,942, of which approximately 4,000 are company-owned. |
| § | Repurchased 367,000 common shares for $13.3 million to offset dilution from employee benefit plans. |
CHICAGO – May 6, 2009– United States Cellular Corporation [NYSE:USM] reported service revenues of $981.9 million for the first quarter of 2009, a 2 percent increase from $962.1 million in the comparable period one year ago. The company recorded operating income of $114.8 million, down from $119.0 million in the first quarter of 2008. Net income attributable to U.S. Cellular and related Diluted earnings per share were $84.6 million and $0.97, respectively, for the first quarter of 2009, compared to $70.6 million and $0.80, respectively, in the comparable period one year ago.
“We had solid gains in postpay customers, who are the cornerstone of our strategy,” said John E. Rooney, U.S. Cellular president and CEO. “These postpay customers make up 95 percent of U.S. Cellular’s retail base, and they are buying more of our smart phones and touchscreen phones, and using moreof ourdata services.
“As a result,” added Rooney, “we had strong gains in data revenues and increased service revenues despite a loss in roaming revenues resulting from the acquisition of Alltel Corporation by Verizon Wireless. Also, U.S. Cellular has had 14 consecutive quarters of year-over-year ARPU growth. And,we kept churn low—a sign that our customer satisfaction strategy continues to be effective.
“To keep our product mix optimized, we rolled out new handsets in the quarter, and brought the HTC Touch Pro™ to our lineup in April,” continued Rooney. “Sales of all smartphones and premium devices, including our BlackBerry® and Windows Mobile® solutions,have nearly tripled year over year. As we expand our 3G network to more of our cell sites, we expect continued revenue growth in this area.
“We are committed to growing U.S. Cellular for the long term,” said Rooney, “and we have the sound strategy and dedicated associates to provide quality services and products and unmatched customer support. We recently received a seventh-consecutive award for call quality from J.D. Power and Associates. We’re proud of our network, and we’re proud to be a company our customers can believe in.”
Guidance
Guidance for the year ending Dec. 31, 2009 is as follows. Guidance is unchanged from Feb. 26, 2009.There can be no assurance that final results will not differ materially from this guidance.
U.S. Cellular 2009 guidance as of May 6, 2009 is as follows:
| Net Retail Customer Additions | 75,000 - 150,000 | |
| Service Revenues | $3,900 - $4,000 million | |
| Operating Income(1) | $275 - $350 million | |
| Depreciation, Amortization & Accretion(1) | Approx. $600 million | |
Capital Expenditures | Approx. $575 million |
(1)Includes losses on disposals of assets.
The foregoing guidance represents the views of management as of May 6, 2009 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 6, 2009 at 10:00 a.m. Chicago time.
| § | Access the live call online on the Conference Calls page of www.uscellular.com or at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&eventID=2189425 |
| § | Access the call by phone at 800/706-9695 (US/Canada) and use conference ID #96977513. |
Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page of www.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 www.uscellular.com.
About U.S. Cellular
United States Cellular Corporation, the nation's fifth-largest, full-service wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to nearly 6.2 million customers in 26 states. The Chicago-based company employed approximately 8,800 full-time equivalent associates as of March 31, 2009. For more information about U.S. Cellular, visit www.uscellular.com.
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 successfullymanage andgrow its markets; the current credit crisis affecting financial markets , and its effects on the overall economy; competition; the state and federal telecommunications regulatory environment; the value of assets and investments;adverse changes in the ratings afforded the company's 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 arran gements 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.
2
| UNITED STATES CELLULAR CORPORATION | ||||||||||||||||||||
| SUMMARY OPERATING DATA | ||||||||||||||||||||
| Quarter Ended | 3/31/2009 | 12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | |||||||||||||||
| Total Population: | ||||||||||||||||||||
| Consolidated markets(1) | 83,726,000 | 83,014,000 | 82,875,000 | 82,875,000 | 82,846,000 | |||||||||||||||
| Consolidated operating markets(1) | 46,306,000 | 46,009,000 | 45,493,000 | 45,493,000 | 45,262,000 | |||||||||||||||
| All customers: | ||||||||||||||||||||
| Total at end of period | 6,243,000 | 6,196,000 | 6,176,000 | 6,194,000 | 6,175,000 | |||||||||||||||
| Gross additions | 404,000 | 395,000 | 367,000 | 365,000 | 408,000 | |||||||||||||||
| Net additions (losses) | 47,000 | 20,000 | (18,000 | ) | 16,000 | 73,000 | ||||||||||||||
| Market penetration at end of period: | ||||||||||||||||||||
| Consolidated markets(2) | 7.5 | % | 7.5 | % | 7.5 | % | 7.5 | % | 7.5 | % | ||||||||||
| Consolidated operating markets(2) | 13.5 | % | 13.5 | % | 13.6 | % | 13.6 | % | 13.6 | % | ||||||||||
| Retail customers: | ||||||||||||||||||||
| Total at end of period | 5,770,000 | 5,707,000 | 5,674,000 | 5,677,000 | 5,640,000 | |||||||||||||||
| Gross additions | 366,000 | 352,000 | 325,000 | 318,000 | 360,000 | |||||||||||||||
| Net postpay additions | 60,000 | 41,000 | 12,000 | 33,000 | 72,000 | |||||||||||||||
| Net prepay additions (losses) | 3,000 | (8,000 | ) | (15,000 | ) | 1,000 | 13,000 | |||||||||||||
| Cell sites in service | 6,942 | 6,877 | 6,716 | 6,596 | 6,452 | |||||||||||||||
Average monthly revenue per unit(3) | $ | 52.54 | $ | 52.71 | $ | 54.59 | $ | 53.27 | $ | 52.24 | ||||||||||
| Retail service revenue per unit(3) (5) | $ | 46.78 | $ | 46.43 | $ | 46.97 | $ | 46.53 | $ | 46.18 | ||||||||||
| Inbound roaming revenue per unit(3) (5) | $ | 3.21 | $ | 4.25 | $ | 5.03 | $ | 4.54 | $ | 3.95 | ||||||||||
| Other revenue per unit (3) (5) | $ | 2.55 | $ | 2.03 | $ | 2.59 | $ | 2.20 | $ | 2.11 | ||||||||||
| Postpay churn rate(4) | 1.5 | % | 1.6 | % | 1.6 | % | 1.4 | % | 1.4 | % | ||||||||||
| Construction expenditures (000s) | $ | 137,700 | $ | 190,000 | $ | 146,100 | $ | 137,800 | $ | 111,700 | ||||||||||
| (1) | “Total population of consolidated markets” and “Total population of consolidated operating markets” are used only for the purposes of calculating market penetration of consolidated markets and consolidated operating markets, respectively, whichis 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) | Per unit revenue measurements are derived from Service Revenues as reported in Financial Highlights for each respective quarter as follows: |
| Service Revenues (000s) | $ | 981,874 | $ | 976,952 | $ | 1,013,928 | $ | 987,352 | $ | 962,094 | |
| Components: | |||||||||||
| Retail service revenue (000s) | 874,098 | 860,503 | 872,397 | 862,392 | 850,470 | ||||||
| Inbound roaming revenue (000s) | 60,057 | 78,768 | 93,472 | 84,201 | 72,755 | ||||||
| Other revenue (000s) | 47,719 | 37,681 | 48,059 | 40,759 | 38,869 | ||||||
| Divided by average customers (000s) | 6,229 | 6,178 | 6,191 | 6,178 | 6,139 | ||||||
| Divided by three months in each quarter | 3 | 3 | 3 | 3 | 3 | ||||||
| Average monthly revenue per unit | $ | 52.54 | $ | 52.71 | $ | 54.59 | $ | 53.27 | $ | 52.24 | |
| Retail service revenue per unit | $ | 46.78 | $ | 46.43 | $ | 46.97 | $ | 46.53 | $ | 46.18 | |
| Inbound roaming revenue per unit | $ | 3.21 | $ | 4.25 | $ | 5.03 | $ | 4.54 | $ | 3.95 | |
| Other revenue per unit | $ | 2.55 | $ | 2.03 | $ | 2.59 | $ | 2.20 | $ | 2.11 | |
| (4) | Postpay churn rate is calculated by dividing the total postpay customer disconnects during the quarter by the average postpay customer base for the quarter. | |
| (5) | Long-distance revenue was reclassified in the fourth quarter of 2008 from Long-distance/Other revenue to Retail service revenue and Inbound roaming revenue. Previous quarters have been adjusted to reflect this change. | |
| 3 | ||
| United States Cellular Corporation | ||||||||||||||
| Consolidated Statement of Operations Highlights | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (Unaudited, dollars and shares in thousands, except per share amounts) | ||||||||||||||
| Increase (Decrease) | ||||||||||||||
| 2009 | 2008 | Amount | Percent | |||||||||||
| Operating revenues | ||||||||||||||
| Service | $ | 981,874 | $ | 962,094 | $ | 19,780 | 2 | % | ||||||
| Equipment sales | 70,890 | 75,762 | (4,872 | ) | (6 | %) | ||||||||
| Total operating revenues | 1,052,764 | 1,037,856 | 14,908 | 1 | % | |||||||||
| Operating expenses | ||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 200,003 | 191,016 | 8,987 | 5 | % | |||||||||
| Cost of equipment sold | 185,701 | 178,045 | 7,656 | 4 | % | |||||||||
| Selling, general and administrative | 412,448 | 403,626 | 8,822 | 2 | % | |||||||||
| Depreciation, amortization and accretion | 137,651 | 142,530 | (4,879 | ) | (3 | %) | ||||||||
| Loss on asset disposals, net | 2,191 | 3,673 | (1,482 | ) | (40 | %) | ||||||||
| Total operating expenses | 937,994 | 918,890 | 19,104 | 2 | % | |||||||||
| Operating income | 114,770 | 118,966 | (4,196 | ) | (4 | %) | ||||||||
| Investment and other income (expense) | ||||||||||||||
| Equity in earnings of unconsolidated entities | 25,327 | 21,235 | 4,092 | 19 | % | |||||||||
| Interest and dividend income | 477 | 1,905 | (1,428 | ) | (75 | %) | ||||||||
| Interest expense | (19,022 | ) | (20,115 | ) | 1,093 | 5 | % | |||||||
| Other, net | 280 | 118 | 162 | N/M | ||||||||||
| Total investment and other income (expense) | 7,062 | 3,143 | 3,919 | N/M | ||||||||||
| Income before income taxes | 121,832 | 122,109 | (277 | ) | --- | |||||||||
| Income tax expense | 31,232 | 47,540 | (16,308 | ) | (34 | %) | ||||||||
| Net income | 90,600 | 74,569 | 16,031 | 21 | % | |||||||||
| Less: Net income attributable to noncontrolling interests, net of tax | (6,008 | ) | (4,012 | ) | (1,996 | ) | (50 | %) | ||||||
| Net income attributable to U.S. Cellular | $ | 84,592 | $ | 70,557 | $ | 14,035 | 20 | % | ||||||
| Basic weighted average shares outstanding | 87,196 | 87,571 | (375 | ) | --- | |||||||||
| Basic earnings per share attributable to U.S. Cellular shareholders | $ | 0.97 | $ | 0.81 | $ | 0.16 | 20 | % | ||||||
| Diluted weighted average shares outstanding | 87,446 | 88,064 | (618 | ) | (1 | %) | ||||||||
| Diluted earnings per share attributable to U.S. Cellular shareholders | $ | 0.97 | $ | 0.80 | $ | 0.17 | 21 | % | ||||||
| N/M - Percentage change not meaningful | ||||||||||||||
| 4 | ||||||||||||||
| United State Cellular Corporation | |||||
| Consolidated Balance Sheet Highlights | |||||
| (Unaudited, dollars in thousands) | |||||
| ASSETS | |||||
| March 31, | December 31, | ||||
| 2009 | 2008 | ||||
| Current assets | |||||
| Cash and cash equivalents | $ | 191,797 | $ | 170,996 | |
| Accounts receivable from customers and other | 414,383 | 419,619 | |||
| Inventory | 108,051 | 116,564 | |||
| Prepaid income taxes | --- | 22,515 | |||
| Prepaid expenses | 57,766 | 51,645 | |||
| Net deferred income tax asset | 19,481 | 19,481 | |||
| Other current assets | 8,283 | 14,227 | |||
| 799,761 | 815,047 | ||||
| Investments | |||||
| Licenses | 1,445,665 | 1,433,415 | |||
| Goodwill | 494,737 | 494,279 | |||
| Customer lists | 7,656 | 8,936 | |||
| Investments in unconsolidated entities | 175,571 | 156,637 | |||
| Notes and interest receivable – long-term | 4,265 | 4,297 | |||
| 2,127,894 | 2,097,564 | ||||
| Property, plant and equipment | |||||
| In service and under construction | 5,527,778 | 5,884,383 | |||
| Less: accumulated depreciation | 2,904,973 | 3,264,007 | |||
| 2,622,805 | 2,620,376 | ||||
| Other assets and deferred charges | 69,495 | 33,055 | |||
| Total assets | $ | 5,619,955 | $ | 5,566,042 | |
| 5 | |||||
| United States Cellular Corporation | |||||||
| Consolidated Balance Sheet Highlights | |||||||
| (Unaudited, dollars in thousands) | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| March 31, | December 31, | ||||||
| 2009 | 2008 | ||||||
| Current liabilities | |||||||
| Current portion of long-term debt | $ | 10,086 | $ | 10,258 | |||
| Accounts payable | |||||||
| Affiliated | 7,255 | 9,613 | |||||
| Trade | 218,031 | 248,785 | |||||
| Customer deposits and deferred revenues | 149,690 | 151,082 | |||||
| Accrued taxes | 34,729 | 17,643 | |||||
| Accrued compensation | 43,202 | 55,969 | |||||
| Other current liabilities | 106,858 | 108,533 | |||||
| 569,851 | 601,883 | ||||||
| Deferred liabilities and credits | |||||||
| Net deferred income tax liability | 481,196 | 478,106 | |||||
| Other deferred liabilities and credits | 236,478 | 233,619 | |||||
| 717,674 | 711,725 | ||||||
| Long-term debt | 997,534 | 996,636 | |||||
| Commitments and contingencies | |||||||
| Noncontrolling interests with redemption features | 612 | 589 | |||||
| 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 | 1,343,599 | 1,340,146 | |||||
| Treasury shares | (61,835 | ) | (50,258 | ) | |||
| Retained earnings | 1,911,995 | 1,828,680 | |||||
| Total U.S. Cellular shareholders' equity | 3,281,833 | 3,206,642 | |||||
| Noncontrolling interests | 52,451 | 48,567 | |||||
| Total equity | 3,334,284 | 3,255,209 | |||||
| Total liabilities and equity | $ | 5,619,955 | $ | 5,566,042 | |||
| 6 | |||||||
| United States Cellular Corporation | |||||||
| Consolidated Statement of Cash Flows | |||||||
| Three Months Ended March 31, | |||||||
| (Unaudited, dollars in thousands) | |||||||
| 2009 | 2008 | ||||||
| Cash flows from operating activities | |||||||
| Net income | $ | 90,600 | $ | 74,569 | |||
| Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | |||||||
| Depreciation, amortization and accretion | 137,651 | 142,530 | |||||
| Bad debts expense | 18,704 | 17,962 | |||||
| Stock-based compensation expense | 2,964 | 1,773 | |||||
| Deferred income taxes, net | 1,673 | 15,926 | |||||
| Equity in earnings of unconsolidated entities | (25,327 | ) | (21,235 | ) | |||
| Distributions from unconsolidated entities | 5,908 | 6,933 | |||||
| Loss on asset disposals, net | 2,191 | 3,673 | |||||
| Excess tax benefit from stock awards | (3 | ) | (764 | ) | |||
| Other noncash expense | 443 | 443 | |||||
| Changes in assets and liabilities from operations | |||||||
| Accounts receivable | (13,468 | ) | (8,615 | ) | |||
| Inventory | 7,204 | (13,697 | ) | ||||
| Accounts payable - trade | (30,754 | ) | (2,418 | ) | |||
| Accounts payable - affiliate | (2,358 | ) | (117 | ) | |||
| Customer deposits and deferred revenues | (1,392 | ) | 6,515 | ||||
| Accrued taxes | 39,591 | 32,949 | |||||
| Accrued interest | 9,337 | 9,337 | |||||
| Other assets and liabilities | (57,402 | ) | (35,967 | ) | |||
| 185,562 | 229,797 | ||||||
| Cash flows from investing activities | |||||||
| Additions to property, plant and equipment | (137,741 | ) | (111,690 | ) | |||
| Cash received from divestitures | --- | 6,838 | |||||
| Cash paid for acquisitions and licenses | (12,127 | ) | (102,000 | ) | |||
| Other investing activities | 240 | 239 | |||||
| (149,628 | ) | (206,613 | ) | ||||
| Cash flows from financing activities | |||||||
| Common shares reissued for benefit plans, net of tax payments | 356 | (2,526 | ) | ||||
| Common shares repurchased | (13,291 | ) | (6,201 | ) | |||
| Excess tax benefit from stock awards | 3 | 764 | |||||
| Distributions to noncontrolling interests | (2,101 | ) | (3,231 | ) | |||
| Other financing activities | (100 | ) | (48 | ) | |||
| (15,133 | ) | (11,242 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 20,801 | 11,942 | |||||
| Cash and cash equivalents | |||||||
| Beginning of period | 170,996 | 204,533 | |||||
| End of period | $ | 191,797 | $ | 216,475 | |||
| 7 | |||||||