Exhibit 99.1
NEWS RELEASE
As previously announced, U.S. Cellular will hold a teleconference on Feb. 25, 2010, at 9:30 a.m. CST. Interested parties may listen to the call live via the Internet by accessing the Conference Calls page ofwww.teldta.com orwww.uscellular.com.
Contact: Jane W. McCahon, Vice President, Corporate Relations
(312) 592-5379,jane.mccahon@teldta.com
Julie D. Mathews, Manager, Investor Relations
(312) 592-5341,julie.mathews@teldta.com
FOR RELEASE: IMMEDIATE
U.S. cellular Reports FOURTH QUARTER results
Provides financial guidance for 2010
Note: Comparisons are year over year unless otherwise noted.
4Q 2009 Highlights
§ 354,000 retail gross additions; 39,000 retail net additions of which 26,000 were postpay and 13,000 were prepaid.
§ 1 percent increase in service revenues to $986 million, despite $17 million decrease in inbound roaming revenues.
§ 34 percent increase in data revenues to $190 million, representing 19 percent of service revenues.
§ Retail service ARPU (average revenue per unit) increased from $46.43 to $47.12.
§ Retail postpay churn of 1.6 percent; postpay customers comprised 95 percent of retail customers.
§ 6 percent increase in cell sites in service to 7,279.
§ Repurchased 240,200 common shares for $9 million.
§ Redeemed 8.75 percent senior notes; principal amount of $130 million.
§ $14 million impairment on licenses; $387 million in the fourth quarter of 2008.
CHICAGO – Feb. 25, 2010– United States Cellular Corporation [NYSE:USM] reported service revenues of $986.3 million for the fourth quarter of 2009, up 1percent from $977.0 million in the comparable period one year ago. Net income attributable to U.S. Cellular was $12.4 million, or $0.14 per diluted share, impacted by a $14 million (pre-tax), or $0.10 diluted loss per share, charge for impairment on licenses. In the fourth quarter of 2008, net loss attributable to U.S. Cellular was $200.1 million, or $2.29 per diluted share, impacted by a $386.7 million (pre-tax), or $2.71 diluted loss per share, charge for impairment of licenses.
For the twelve months ended Dec. 31. 2009, U.S. Cellular reported service revenues of $3,927.9 million, compared to $3,940.3 million in 2008. Net income attributable to U.S. Cellular for 2009 was $216.0 million, or $2.48 per diluted share, impacted by a $14 million (pre-tax) or $0.10 diluted loss per share, charge for impairment on licenses. In 2008, net income attributable to U.S. Cellular was $33.0 million, or $0.38 per diluted share, impacted by a $386.7 million (pre-tax), or $2.69 diluted loss per share, charge for impairment of licenses.
“Though we continued to be challenged by general economic and competitive pressure, both gross and net customer additions improved from the third quarter,” said John E. Rooney, U.S. Cellular president and CEO. “Service revenues increased 1 percent year over year, as the growing demand for data services continues to drive strong increases in data revenues that offset decreases in inbound roaming revenues.
“The aggressive rollout of our 3G network in 2009—now available to 75 percent of customers—helped to ensure even faster and more reliable communications for the increasing number of consumers who choose from our improved portfolio of smart phones and other premium devices. As part of our commitment to providing excellent experiences for all of our customers, we introduced the industry's first Battery Swap program in 2009, as well as an Overage Protection program and we will continue to look for ways to surpass our customers’ expectations.
“We are moving aggressively to develop and integrate new billing and operational support systems, increase our understanding of key customer segments, and promote online sales and self-service. These initiatives and others will be implemented over the next several years, and we expect them to stimulate and support growth over the long term, while ultimately reducing operating costs.”
Loss on impairment of intangible assets
In the fourth quarter, U.S. Cellular recorded an impairment loss of $14 million (pre-tax) on licenses as a result of its annual impairment assessment of licenses and goodwill. In the fourth quarter of 2008, U.S. Cellular recorded an impairment loss of $386.7 million (pre-tax), attributable to the deterioration in the credit and financial markets. The impairment charges had no impact on cash or cash flow.
| | Impact of Impairment for the three months ended December 31, | | Impact of Impairment for the year ended December 31, |
| | | | | | | | | | | | | | | | |
| (Dollars in millions, except per share amounts) | 2009 | | 2008 | | 2009 | | 2008 |
| | Net income attributable to U.S. Cellular shareholders, excluding licenses impairments (1) | $ | 21.1 | | | $ | 36.2 | | | $ | 224.7 | | | $ | 269.3 | |
| | Loss on impairment of intangible assets related to licenses | | (14.0 | ) | | | (386.7 | ) | | | (14.0 | ) | | | (386.7 | ) |
| | Income tax benefit and noncontrolling interest impact of licenses impairments (1) | | 5.3 | | | | 150.4 | | | | 5.3 | | | | 150.4 | |
| | Impact of licenses impairments on net income attributable to U.S. Cellular shareholders (1) | | (8.7 | ) | | | (236.3 | ) | | | (8.7 | ) | | | (236.3 | ) |
| | Net income attributable to U.S. Cellular shareholders | $ | 12.4 | | | $ | (200.1 | ) | | $ | 216.0 | | | $ | 33.0 | |
| | | | | | | | | | | | | | | | | |
| | Diluted earnings per share attributable to U.S. Cellular shareholders, excluding licenses impairments (1) | $ | 0.24 | | | $ | 0.42 | | | $ | 2.58 | | | $ | 3.07 | |
| | Impact of licenses impairments on diluted earnings (loss) per share attributable to U.S. Cellular shareholders (1) | | (0.10 | ) | | | (2.71 | ) | | | (0.10 | ) | | | (2.69 | ) |
| | Diluted earnings (loss) per share attributable to U.S. Cellular shareholders | $ | 0.14 | | | $ | (2.29 | ) | | $ | 2.48 | | | $ | 0.38 | |
(1) These amounts are non-GAAP financial measures. The purpose of presenting these measures is to provide information on the impact of losses on impairment related to licenses on results of operations. Such impairments are discrete, significant amounts that impact the comparability of the results of operations, and U.S. Celluar believes it is useful to disclose these impacts. The income tax and noncontrolling interest impact is calculated by allocating the losses on impairment to the respective consolidated subsidiaries, and applying the income tax rate and noncontrolling interest percentages applicable to these respective subsidiaries.
Guidance for year ending Dec. 31, 2010
This guidance represents the views of management as of Feb. 25, 2010, and should not be assumed to be accurate as of any other date. There can be no assurance that final results will not differ materially from this guidance. U.S. Cellular undertakes no legal duty to update such information, whether as a result of new information, future events, or otherwise.
| | Service Revenues | $3,975 - $4,075 million |
| | Operating Income | $250 - $350 million |
| | Depreciation, Amortization and Accretion (1) | Approx. $600 million |
| | Capital Expenditures | Approx. $600 million |
(1) Includes losses on disposal of assets
Conference call information
U.S. Cellular will hold a conference call on Feb. 25, 2010 at 9:30 a.m. CST.
§ Access the live call online athttp://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&eventID=2754661or on the Conference Calls page ofwww.uscellular.com.
§ Access the call by phone at 866-871-4351 (US/Canada) and use conference ID #57950705.
Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page ofwww.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 ofwww.uscellular.com.
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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 more than 6.1 million customers in 26 states. The Chicago-based company had 8,900 full-time equivalent associates as of Dec. 31, 2009. For more information about U.S. Cellular, visitwww.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 successfully grow its markets; changes in the overall economy, competition, the state a nd federal telecommunications regulatory environment, and 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; risks and uncertainties relating to possible future restatements;pending and future litigation; changes in income tax rates, laws, regulations or rulings;acquisitions/divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue pe r unit, churn rates, roaming revenue and terms, the availability of handset devices and the mix of products and services offered by the company. 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.
For more information about U.S. Cellular, visitwww.uscellular.com.
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UNITED STATES CELLULAR CORPORATION SUMMARY OPERATING DATA |
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Quarter Ended | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | 3/31/2009 | | | 12/31/2008 | |
Total population | | | | | | | | | | | | | | | | | | | |
| Consolidated markets (1)(2) | | 89,712,000 | | | | 85,118,000 | | | | 83,726,000 | | | | 83,726,000 | | | | 83,014,000 | |
| Consolidated operating markets (1) | | 46,306,000 | | | | 46,306,000 | | | | 46,306,000 | | | | 46,306,000 | | | | 46,009,000 | |
Market penetration at end of period | | | | | | | | | | | | | | | | | | | |
| Consolidated markets (3) | | 6.8 | % | | | 7.2 | % | | | 7.4 | % | | | 7.5 | % | | | 7.5 | % |
| Consolidated operating markets (3) | | 13.3 | % | | | 13.2 | % | | | 13.3 | % | | | 13.5 | % | | | 13.5 | % |
All customers | | | | | | | | | | | | | | | | | | | |
| Total at end of period | | 6,141,000 | | | | 6,131,000 | | | | 6,155,000 | | | | 6,243,000 | | | | 6,196,000 | |
| Gross additions | | 399,000 | | | | 386,000 | | | | 317,000 | | | | 404,000 | | | | 395,000 | |
| Net additions (losses) | | 10,000 | | | | (24,000 | ) | | | (88,000 | ) | | | 47,000 | | | | 20,000 | |
Retail customers | | | | | | | | | | | | | | | | | | | |
| Total at end of period | | 5,744,000 | | | | 5,705,000 | | | | 5,711,000 | | | | 5,770,000 | | | | 5,707,000 | |
| Gross additions | | 354,000 | | | | 351,000 | | | | 286,000 | | | | 366,000 | | | | 352,000 | |
| Net postpay additions (losses) | | 26,000 | | | | 8,000 | | | | (32,000 | ) | | | 60,000 | | | | 41,000 | |
| Net prepay additions (losses) | | 13,000 | | | | (14,000 | ) | | | (27,000 | ) | | | 3,000 | | | | (8,000 | ) |
Service revenue components (000s) | | | | | | | | | | | | | | | | | | | |
| Retail service revenue | $ | 867,765 | | | $ | 865,867 | | | $ | 871,209 | | | $ | 874,098 | | | $ | 860,503 | |
| Inbound roaming revenue | | 61,728 | | | | 68,767 | | | | 62,223 | | | | 60,057 | | | | 78,768 | |
| Other revenue | | 56,814 | | | | 50,289 | | | | 41,323 | | | | 47,719 | | | | 37,681 | |
Total service revenues (000s) | $ | 986,307 | | | $ | 984,923 | | | $ | 974,755 | | | $ | 981,874 | | | $ | 976,952 | |
| | | | | | | | | | | | | | | | | | | | |
Divided by average customers (000s) | | 6,139 | | | | 6,138 | | | | 6,199 | | | | 6,229 | | | | 6,178 | |
Divided by three months in each quarter | | 3 | | | | 3 | | | | 3 | | | | 3 | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | |
Average monthly revenue per unit (4) | $ | 53.55 | | | $ | 53.49 | | | $ | 52.41 | | | $ | 52.54 | | | $ | 52.71 | |
| Retail service revenue per unit (4) | $ | 47.12 | | | $ | 47.02 | | | $ | 46.85 | | | $ | 46.78 | | | $ | 46.43 | |
| Inbound roaming revenue per unit (4) | $ | 3.35 | | | $ | 3.73 | | | $ | 3.35 | | | $ | 3.21 | | | $ | 4.25 | |
| Other revenue per unit (4) | $ | 3.08 | | | $ | 2.74 | | | $ | 2.21 | | | $ | 2.55 | | | $ | 2.03 | |
Postpay churn rate(5) | | 1.6 | % | | | 1.7 | % | | | 1.7 | % | | | 1.5 | % | | | 1.6 | % |
Capital expenditures (000s) | $ | 189,000 | | | $ | 128,900 | | | $ | 91,200 | | | $ | 137,700 | | | $ | 190,000 | |
Cell sites in service | | 7,279 | | | | 7,161 | | | | 7,043 | | | | 6,942 | | | | 6,877 | |
(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) Includes 4.5 million incremental population counts resulting from the licenses awarded to King Street Wireless L.P. in December 2009.
(3) 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.
(4) Calculated by dividing the components of Service Revenues by the average customers and number of months in the quarter.
(5) Calculated by dividing the total postpay customer disconnects during the quarter by the average postpay customer base for the quarter.
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UNITED STATES CELLULAR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS HIGHLIGHTS Three Months Ended December 31, (Unaudited, dollars and shares in thousands, except per share amounts) |
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| | | | | | | | | | | Increase (Decrease) |
| | | 2009 (1)(2) | | 2008 | | Amount | | Percent |
Operating revenues | | | | | | | | | | | | | | |
| Service | $ | 986,307 | | | $ | 976,952 | | | $ | 9,355 | | | 1 | % |
| Equipment sales | | 74,690 | | | | 75,910 | | | | (1,220 | ) | | (2 | %) |
| | Total operating revenues | | 1,060,997 | | | | 1,052,862 | | | | 8,135 | | | 1 | % |
| | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | |
| System operations (excluding Depreciation, amortization and accretion reported below) | | 196,350 | | | | 198,916 | | | | (2,566 | ) | | (1 | %) |
| Cost of equipment sold | | 211,883 | | | | 203,224 | | | | 8,659 | | | 4 | % |
| Selling, general and administrative | | 471,403 | | | | 442,873 | | | | 28,530 | | | 6 | % |
| Depreciation, amortization and accretion | | 146,807 | | | | 143,709 | | | | 3,098 | | | 2 | % |
| Loss on impairment of intangible assets | | 14,000 | | | | 386,653 | | | | (372,653 | ) | | (96 | %) |
| Loss on asset disposals, net | | 7,528 | | | | 6,602 | | | | 926 | | | 14 | % |
| | Total operating expenses | | 1,047,971 | | | | 1,381,977 | | | | (334,006 | ) | | (24 | %) |
| | | | | | | | | | | | | | | | |
Operating income (loss) | | 13,026 | | | | (329,115 | ) | | | 342,141 | | | >100 | % |
| | | | | | | | | | | | | | | | |
Investment and other income (expense) | | | | | | | | | | | | | | |
| Equity in earnings of unconsolidated entities | | 23,553 | | | | 25,620 | | | | (2,067 | ) | | (8 | %) |
| Interest and dividend income | | 949 | | | | 1,259 | | | | (310 | ) | | (25 | %) |
| Interest expense | | (18,600 | ) | | | (16,579 | ) | | | (2,021 | ) | | (12 | %) |
| Other, net | | 259 | | | | 160 | | | | 99 | | | 62 | % |
| | Total investment and other income (expense) | | 6,161 | | | | 10,460 | | | | (4,299 | ) | | (41 | %) |
Income (loss) before income taxes | | 19,187 | | | | (318,655 | ) | | | 337,842 | | | >100 | % |
| Income tax expense (benefit) | | 2,582 | | | | (129,007 | ) | | | 131,589 | | | >100 | % |
Net income (loss) | | 16,605 | | | | (189,648 | ) | | | 206,253 | | | >100 | % |
Less: Net income attributable to noncontrolling interests, net of tax | | (4,185 | ) | | | (10,470 | ) | | | 6,285 | | | 60 | % |
Net income (loss) attributable to U.S. Cellular shareholders | $ | 12,420 | | | $ | (200,118 | ) | | $ | 212,538 | | | >100 | % |
| | | | | | | | | | | | | | | | |
Basic weighted average shares outstanding | | 86,719 | | | | 87,340 | | | | (621 | ) | | (1 | %) |
Basic earnings (loss) per share | $ | 0.14 | | | $ | (2.29 | ) | | $ | 2.43 | | | >100 | % |
| | | | | | | | | | | | | | |
Diluted weighted average shares outstanding | | 87,087 | | | | 87,340 | | | | (253 | ) | | — | |
Diluted earnings (loss) per share | $ | 0.14 | | | $ | (2.29 | ) | | $ | 2.43 | | | >100 | % |
(1) During the three months ended December 31, 2009, Operating expenses were reduced by a $7.1 million out-of-period adjustment to correct rent expense. $6.1 million of this adjustment reduced System operations expense and $1.0 million reduced Selling, general and administrative expense. Management does not believe that the adjustment is material to the current year or any prior year’s earnings, earnings trends or financial statement line items. The adjustment was recorded in the three months ended December 31, 2009 and no prior periods were adjusted.
(2) During the three months ended December 31, 2009, U.S. Cellular recorded adjustments that reduced System operations expense and increased Selling, general and administrative expense by $9.7 million and $11.6 million, respectively, to reflect revised estimates related to customer usage charges and bad debts expense. The net of these adjustments was an increase to Operating expenses of $1.9 million during the three months ended December 31, 2009.
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UNITED STATES CELLULAR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS HIGHLIGHTS Twelve Months Ended December 31, (Unaudited, dollars and shares in thousands, except per share amounts) |
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| | | | | | | | | | | Increase (Decrease) |
| | | 2009 (1) | | 2008 | | Amount | | Percent |
Operating revenues | | | | | | | | | | | | | | |
| Service | $ | 3,927,859 | | | $ | 3,940,326 | | | $ | (12,467 | ) | | — | |
| Equipment sales | | 286,752 | | | | 302,859 | | | | (16,107 | ) | | (5 | %) |
| | Total operating revenues | | 4,214,611 | | | | 4,243,185 | | | | (28,574 | ) | | (1 | %) |
| | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | |
| System operations (excluding Depreciation, amortization and accretion reported below) | | 796,617 | | | | 784,057 | | | | 12,560 | | | 2 | % |
| Cost of equipment sold | | 742,993 | | | | 743,406 | | | | (413 | ) | | — | |
| Selling, general and administrative | | 1,748,760 | | | | 1,701,050 | | | | 47,710 | | | 3 | % |
| Depreciation, amortization and accretion | | 570,658 | | | | 576,931 | | | | (6,273 | ) | | (1 | %) |
| Loss on impairment of intangible assets | | 14,000 | | | | 386,653 | | | | (372,653 | ) | | (96 | %) |
| Loss on asset disposals, net | | 15,176 | | | | 23,378 | | | | (8,202 | ) | | (35 | %) |
| | Total operating expenses | | 3,888,204 | | | | 4,215,475 | | | | (327,271 | ) | | (8 | %) |
| | | | | | | | | | | | | | | | |
Operating income | | 326,407 | | | | 27,710 | | | | 298,697 | | | >100 | % |
| | | | | | | | | | | | | | | | |
Investment and other income (expense) | | | | | | | | | | | | | | |
| Equity in earnings of unconsolidated entities | | 96,800 | | | | 91,981 | | | | 4,819 | | | 5 | % |
| Interest and dividend income | | 3,597 | | | | 5,730 | | | | (2,133 | ) | | (37 | %) |
| Gain on disposition of investments | | — | | | | 16,628 | | | | (16,628 | ) | | N/M | |
| Interest expense | | (76,367 | ) | | | (77,190 | ) | | | 823 | | | 1 | % |
| Other, net | | 1,442 | | | | 1,269 | | | | 173 | | | 14 | % |
| | Total investment and other income (expense) | | 25,472 | | | | 38,418 | | | | (12,946 | ) | | (34 | %) |
| | | | | | | | | | | | | | | | |
Income before income taxes | | 351,879 | | | | 66,128 | | | | 285,751 | | | >100 | % |
| Income tax expense | | 114,103 | | | | 8,055 | | | | 106,048 | | | >100 | % |
Net income | | 237,776 | | | | 58,073 | | | | 179,703 | | | >100 | % |
Less: Net income attributable to noncontrolling interests, net of tax | | (21,768 | ) | | | (25,083 | ) | | | 3,315 | | | 13 | % |
Net income attributable to U.S. Cellular shareholders | $ | 216,008 | | | $ | 32,990 | | | $ | 183,018 | | | >100 | % |
| | | | | | | | | | | | | | | | |
Basic weighted average shares outstanding | | 86,946 | | | | 87,457 | | | | (511 | ) | | (1 | %) |
Basic earnings per share | $ | 2.48 | | | $ | 0.38 | | | $ | 2.10 | | | >100 | % |
| | | | | | | | | | | | | | | | |
Diluted weighted average shares outstanding | | 87,168 | | | | 87,754 | | | | (586 | ) | | (1 | %) |
Diluted earnings per share | $ | 2.48 | | | $ | 0.38 | | | $ | 2.10 | | | >100 | % |
(1) During the twelve months ended December 31, 2009, Operating expenses were reduced by a $6.5 million out-of-period adjustment to correct rent expense. $5.8 million of this adjustment reduced System operations expense and $0.7 million reduced Selling, general and administrative expense. Management does not believe that the adjustment is material to the current year or any prior year’s earnings, earnings trends or financial statement line items. The adjustment was recorded in the twelve months ended December 31, 2009 and no prior periods were adjusted.
N/M – Percentage change not meaningful
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UNITED STATES CELLULAR CORPORATION CONSOLIDATED BALANCE SHEET HIGHLIGHTS (Unaudited, dollars in thousands) |
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ASSETS |
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| December 31, 2009 | | December 31, 2008 |
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Current assets | | | | | |
| Cash and cash equivalents | $ | 294,411 | | $ | 170,996 |
| Accounts receivable from customers and other | | 421,528 | | | 419,619 |
| Inventory | | 152,556 | | | 116,564 |
| Prepaid income taxes | | 717 | | | 22,515 |
| Prepaid expenses | | 63,463 | | | 51,645 |
| Net deferred income tax asset | | 21,570 | | | 19,481 |
| Other current assets | | 51,343 | | | 14,227 |
| | | 1,005,588 | | | 815,047 |
| | | | | | |
Investments | | | | | |
| Licenses | | 1,435,000 | | | 1,433,415 |
| Goodwill | | 494,737 | | | 494,279 |
| Customer lists, net | | 4,083 | | | 8,936 |
| Investments in unconsolidated entities | | 161,481 | | | 156,637 |
| Notes and interest receivable—long-term | | 4,214 | | | 4,297 |
| | | 2,099,515 | | | 2,097,564 |
| | | | | | |
Property, plant and equipment | | | | | |
| In service and under construction | | 5,884,307 | | | 5,884,383 |
| Less: accumulated depreciation | | 3,282,969 | | | 3,264,007 |
| | | 2,601,338 | | | 2,620,376 |
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Other assets and deferred charges | | 38,776 | | | 33,055 |
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| | | | | | |
Total assets | $ | 5,745,217 | | $ | 5,566,042 |
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UNITED STATES CELLULAR CORPORATION CONSOLIDATED BALANCE SHEET HIGHLIGHTS (Unaudited, dollars in thousands) |
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LIABILITIES AND EQUITY |
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| December 31, 2009 | | December 31, 2008 |
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Current liabilities | | | | | | | |
| Current portion of long-term debt | $ | 76 | | | $ | 10,258 | |
| Accounts payable | | | | | | | |
| | Affiliated | | 14,732 | | | | 9,613 | |
| | Trade | | 296,288 | | | | 248,785 | |
| Customer deposits and deferred revenues | | 143,760 | | | | 151,082 | |
| Accrued taxes | | 34,583 | | | | 17,643 | |
| Accrued compensation | | 62,242 | | | | 55,969 | |
| Other current liabilities | | 92,884 | | | | 108,533 | |
| | | | 644,565 | | | | 601,883 | |
| | | | | | | | | |
Deferred liabilities and credits | | | | | | | |
| Net deferred income tax liability | | 513,994 | | | | 478,106 | |
| Other deferred liabilities and credits | | 262,412 | | | | 233,619 | |
| | | | 776,406 | | | | 711,725 | |
| | | | | | | | | |
Long-term debt | | 867,522 | | | | 996,636 | |
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Commitments and contingencies | | | | | | | |
| | | | | | | | | |
Noncontrolling interests with redemption features | | 727 | | | | 589 | |
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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 | | 1,356,322 | | | | 1,340,146 | |
| Treasury Shares | | (69,616 | ) | | | (50,258 | ) |
| Retained earnings | | 2,029,516 | | | | 1,828,680 | |
| | Total U.S. Cellular shareholders’ equity | | 3,404,296 | | | | 3,206,642 | |
| | | | | | | | | |
Noncontrolling interests | | 51,701 | | | | 48,567 | |
| | | | | | | | | |
| Total equity | | 3,455,997 | | | | 3,255,209 | |
| | | | | | | | | |
Total liabilities and equity | $ | 5,745,217 | | | $ | 5,566,042 | |
8
UNITED STATES CELLULAR CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS Twelve Months Ended December 31, (Unaudited, dollars in thousands) |
|
|
|
| | | | | |
| 2009 | | 2008 |
Cash flows from operating activities | | | | | | | |
| Net income | $ | 237,776 | | | $ | 58,073 | |
| Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | | | | | | | |
| | Depreciation, amortization and accretion | | 570,658 | | | | 576,931 | |
| | Bad debts expense | | 107,991 | | | | 73,157 | |
| | Stock-based compensation expense | | 16,362 | | | | 15,122 | |
| | Deferred income taxes, net | | 45,439 | | | | (83,121 | ) |
| | Equity in earnings of unconsolidated entities | | (96,800 | ) | | | (91,981 | ) |
| | Distributions from unconsolidated entities | | 91,105 | | | | 91,845 | |
| | Gain on disposition of investments | | — | | | | (16,628 | ) |
| | Loss on impairment of intangible assets | | 14,000 | | | | 386,653 | |
| | Loss on asset disposals, net | | 15,176 | | | | 23,378 | |
| | Noncash interest expense | | 2,442 | | | | 1,772 | |
| | Excess tax benefit from stock awards | | (24 | ) | | | (1,151 | ) |
| | Other operating activities | | — | | | | 210 | |
| Changes in assets and liabilities from operations | | | | | | | |
| | Accounts receivable | | (109,817 | ) | | | (68,039 | ) |
| | Inventory | | (35,992 | ) | | | (15,563 | ) |
| | Accounts payable—trade | | 47,503 | | | | (4,572 | ) |
| | Accounts payable—affiliate | | 5,119 | | | | 1,093 | |
| | Customer deposits and deferred revenues | | (7,323 | ) | | | 7,628 | |
| | Accrued taxes | | 37,931 | | | | (34,699 | ) |
| | Accrued interest | | (2,121 | ) | | | — | |
| | Other assets and liabilities | | (57,617 | ) | | | 2,669 | |
| | | | | 881,808 | | | | 922,777 | |
| | | | | | | | | | |
Cash flows from investing activities | | | | | | | |
| Additions to property, plant and equipment | | (546,758 | ) | | | (585,590 | ) |
| Proceeds from disposition of investments | | — | | | | 16,690 | |
| Cash received from divestitures | | 50 | | | | 6,838 | |
| Cash paid for acquisitions and licenses | | (16,027 | ) | | | (341,694 | ) |
| Other investing activities | | 1,284 | | | | (271 | ) |
| | | | | (561,451 | ) | | | (904,027 | ) |
| | | | | | | | | | |
Cash flows from financing activities | | | | | | | |
| Borrowings from revolving credit facilities | | — | | | | 100,000 | |
| Repayment of revolving credit facilities | | — | | | | (100,000 | ) |
| Repayment of long-term debt | | (140,236 | ) | | | (3,039 | ) |
| Common shares reissued, net of tax payments | | (82 | ) | | | (2,288 | ) |
| Common shares repurchased | | (33,585 | ) | | | (28,366 | ) |
| Excess tax benefit from stock awards | | 24 | | | | 1,151 | |
| Payment of debt issuance costs | | (4,421 | ) | | | — | |
| Distributions to noncontrolling interests | | (18,426 | ) | | | (19,676 | ) |
| Other financing activities | | (216 | ) | | | (69 | ) |
| | | | | (196,942 | ) | | | (52,287 | ) |
| | | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | 123,415 | | | | (33,537 | ) |
| | | | | | | | | | |
Cash and cash equivalents | | | | | | | |
| Beginning of period | | 170,996 | | | | 204,533 | |
| End of period | $ | 294,411 | | | $ | 170,996 | |
9
