UNITED STATES CELLULAR CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - UNITED STATES CELLULAR CORP	8K.htm
EX-99.2 - EXHIBIT 99.2 - UNITED STATES CELLULAR CORP	Ex992.htm

Exhibit 99.l NEWS RELEASE

As previously announced, U.S. Cellular will hold a teleconference August 2, 2013 at 9:30 a.m. CDT. Listen to the live call via the Conference Calls page of teldta.com or uscellular.com.

Contact: Jane W. McCahon, Vice President, Corporate Relations and Corporate Secretary

(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 second QUARTER 2013 RESULTS

CHICAGO – August 2, 2013 – United States Cellular Corporation [NYSE:USM] reported service revenues of $911.0 million for the second quarter of 2013, versus $1,029.7 million for the comparable period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $143.4 million and $1.69 respectively, for the second quarter of 2013, compared to $52.7 million and $0.62, respectively, in the comparable period one year ago.

The following significant events occurred during the second quarter of 2013:

· On April 3, U.S. Cellular deconsolidated the St. Lawrence Seaway RSA Cellular Partnership (“NY1”) and the New York RSA 2 Cellular Partnership (“NY2”). As a result, the NY1 and NY2 partnerships results are now reported using the equity method of accounting for investments in its consolidated financial statements. U.S. Cellular has retained the same ownership percentage and will continue to report the same percentage of income.

· On May 16, U.S. Cellular’s previously announced transaction to sell its Chicago, St. Louis, central Illinois and three other markets (the “Divestiture Transaction”) closed and the company received $480 million in cash and recognized a pre-tax gain of $266.4 million.

· On June 25, U.S. Cellular paid a special dividend of $5.75 per Common Share and Series A Common Share, for a a total of $482.3 million.

“We have taken significant steps this year to improve U.S. Cellular’s competitive position and financial foundation,” said Kenneth R. Meyers, U.S. Cellular president and CEO. “We divested underperforming markets in May to focus on higher potential markets, and we returned value to shareholders through a special, one-time dividend. In June, we announced an agreement to monetize non-strategic spectrum at a significant valuation.

“In the second half, we are continuing to execute aggressive strategies to accelerate customer growth and reduce expenses. We’re working to complete the 4G LTE network expansion as we prepare to offer an even more competitive device portfolio with the introduction of Apple products later this year. We also plan to begin offering shared data plans, supported by a new billing and operations support system that enables us to bring new services and products to market faster.”

2013 ESTIMATES

U.S. Cellular’s estimates of full-year 2013 results are shown below. Such estimates represent U.S. Cellular’s views as of the date of filing U.S. Cellular’s Form 10-Q for the quarter ended June 30, 2013. Such forward‑looking statements should not be assumed to be current as of any future date. U.S. Cellular undertakes no duty to update such information, whether as a result of new information, future events or otherwise. There can be no assurance that final results will not differ materially from such estimated results.

	2013 Estimated Results (1)
	Core Markets (2)		Divestiture Markets (2)(3)		U.S. Cellular Consolidated (2)(3)
	Previous	Current	Previous	Current	Previous	Current
(Dollars in millions)
Service revenues	Unchanged	$3,475 - $3,575	$145 - $165	$140	$3,620 - $3,740	$3,615-$3,715
Adjusted income before income taxes (4)	Unchanged	$560 - $660	$35 - $55	$40	$595 - $715	$600-$700
Capital expenditures	Unchanged	$730	Unchanged	$5	Unchanged	$735

(1) These estimates are based on U.S. Cellular’s current plans, which include an expansion of the multi-year deployment of 4G LTE technology; such expansion includes deployment on 700 MHz in additional markets as well as deployment on the 850 MHz band to provide additional capacity for future growth in data usage, enable potential future 4G LTE roaming, and support the sale of Apple products. The financial impacts of selling Apple products in 2013 consist of the following:

· Increased Service revenues resulting from net incremental customers added and retained as a result of offering Apple products;

· Decreased Adjusted income before income taxes as a result of net increases in costs, primarily loss on equipment sales as a result of offering Apple products; and

· Increased Capital expenditures related to the deployment on the 850 MHz band to provide additional capacity for future growth in data usage, which includes capacity required to accommodate Apple products.

These estimates also reflect the impacts of the deconsolidation of certain partnerships as of April 2013. These estimates do not include (i) the reported gain on sale of business and other exit costs, net (ii) the reported gain on investments, or (iii) the expected gains from pending spectrum license divestitures. New developments or changing conditions (such as, but not limited to, regulatory developments, customer net growth, customer demand for data services or possible acquisitions, dispositions or exchanges) could affect U.S. Cellular’s plans and, therefore, its 2013 estimated results.

(2) The U.S. Cellular Consolidated amounts represent GAAP financial measures and include the results of both the Core Markets and the Divestiture Markets. The amounts for the Core Markets and Divestiture Markets represent non-GAAP financial measures. U.S. Cellular believes that the amounts for the Core Markets and Divestiture Markets may be useful to investors and other users of its financial information in evaluating the separate results for the Core Markets. Divestiture Markets are comprised of U.S. Cellular's Chicago, central Illinois, St. Louis and certain Indiana/Michigan/Ohio markets. Core Markets are comprised of all other markets in which U.S. Cellular conducts business including Peoria, Rockford and certain other areas in Illinois, and in Columbia, Joplin, Jefferson City and certain other areas in Missouri. Core Markets as defined also includes any other income or expenses due to U.S. Cellular’s direct or indirect ownership interests in other spectrum in the Divestiture Markets which was not included in the sale and other retained assets from the Divestiture Markets.

(3) These estimates reflect the Divestiture Transaction which closed on May 16, 2013.

(4) Adjusted income before income taxes is a non-GAAP financial measure defined as Income before income taxes, adjusted for: Depreciation, amortization and accretion, net Gain or loss on sale of business and other exit costs (if any), net Gain or loss on investments (if any), and Interest expense. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. In the future, U.S. Cellular may also exclude other items from adjusted income before income taxes if such items may help reflect operating results on a more comparable basis. U.S. Cellular does not intend to imply that any such amounts that are excluded are non-recurring, infrequent or unusual; such amounts may occur in the future. Adjusted income before income taxes is not a measure of financial performance under GAAP and should not be considered as an alternative to Income before income taxes as an indicator of the Company’s operating performance or as an alternative to Cash flows from operating activities, determined in accordance with GAAP, as an indicator of cash flows or as a measure of liquidity. The following tables provide a reconciliation of Income (loss) before income taxes to Adjusted income before income taxes for 2013 Estimated Results, six months ended June 30, 2013 actual results, and 2012 actual results:

	2013 Estimated Results
	Core Markets (2)	Divestiture Markets (2)(3)		U.S. Cellular Consolidated (2)(3)
(Dollars in millions)
Income (loss) before income taxes	($10)-$90	$30		$20-$120
Depreciation, amortization and accretion expense (5)	$540	$250		$790
(Gain) loss on sale of business and other exit costs, net	—	($240)		($240)
(Gain) loss on investments	($20)	—		($20)
Interest expense	$50	—		$50
Adjusted income before income taxes	$560-$660	$40		$600-$700


	U.S. Cellular Consolidated Actual Results
		Six Months Ended June 30, 2013		Year Ended December 31, 2012


Income before income taxes		$	282	$	205
Depreciation, amortization and accretion expense (5)			393		609
(Gain) loss on sale of business and other exit costs, net			(242)		21
(Gain) loss on investments			(19)		4
Interest expense			21		42
Adjusted income before income taxes		$	435	$	881

(5) The 2013 estimated amount for Depreciation, amortization and accretion expense in the Divestiture Markets includes approximately $168 million of incremental accelerated depreciation, amortization and accretion resulting from the Divestiture Transaction. Actual results for the six months ended June 30, 2013 and the year ended December 31, 2012 include $88 million and $20 million, respectively, of incremental accelerated depreciation, amortization and accretion resulting from the Divestiture Transaction.

Conference Call Information

U.S. Cellular will hold a conference call on August 2, 2013 at 9:30 a.m. CDT.

§ Access the live call on the Conference Calls page of uscellular.com or at

http://www.videonewswire.com/event.asp?id=95316

§ Access the call by phone at 877-407-8029 (US/Canada), no pass code required.

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 provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to 5.0 million customers in 23 states. The Chicago-based company had 7,000 full- and part-time associates as of June 30, 2013. At the end of the year, Telephone and Data Systems, Inc. owned 84 percent of U.S. Cellular. For more information about U.S. Cellular, visit 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: impacts of the Divestiture Transaction including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transaction and the financial impacts of such transaction; the ability of the company to successfully manage and grow its markets; the overall economy; competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; 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; and changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of handset devices, or 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 Current Report used by U.S. Cellular to furnish this press release to the Securities and Exchange Commission (“SEC”), which are incorporated by reference herein.

For more information about U.S. Cellular, visit uscellular.com.

United States Cellular Corporation
Total Markets Summary Operating Data (Unaudited)

Quarter Ended			6/30/2013		3/31/2013		12/31/2012		9/30/2012		6/30/2012
Retail Customers
	Postpaid
		Total at end of period		4,412,000		5,060,000		5,134,000		5,175,000		5,213,000
		Gross additions		165,000		191,000		241,000		230,000		199,000
		Net additions (losses)		(120,000)		(74,000)		(41,000)		(38,000)		(48,000)
		ARPU (1)	$	54.18	$	54.85	$	54.56	$	54.34	$	54.42
		Churn rate (2)		2.0%		1.7%		1.8%		1.7%		1.6%
		Smartphone penetration (3) (4)		45.5%		43.5%		41.8%		38.6%		36.8%
	Prepaid
		Total at end of period		381,000		446,000		423,000		386,000		329,000
		Gross additions		77,000		104,000		107,000		120,000		78,000
		Net additions (losses)		(7,000)		23,000		37,000		57,000		20,000
		ARPU (1)	$	31.69	$	33.31	$	33.56	$	32.97	$	33.59
		Churn rate (2)		6.8%		6.2%		5.8%		5.9%		6.2%
Total customers at end of period				4,968,000		5,736,000		5,798,000		5,808,000		5,799,000
Billed ARPU (1)			$	50.60	$	51.13	$	50.94	$	50.83	$	50.99
Service revenue ARPU (1)			$	57.45	$	57.63	$	58.00	$	59.57	$	59.05
Smartphones sold as a percent of total devices sold				66.0%		61.7%		62.9%		53.0%		51.9%
Total population
		Consolidated markets (5)		84,025,000		93,943,000		93,244,000		92,996,000		92,684,000
		Consolidated operating markets (5)		31,822,000		47,440,000		46,966,000		46,966,000		46,966,000
Market penetration at end of period
		Consolidated markets (6)		5.9%		6.1%		6.2%		6.2%		6.3%
		Consolidated operating markets (6)		15.6%		12.1%		12.3%		12.4%		12.3%
Capital expenditures (000s)			$	168,500	$	118,400	$	253,100	$	199,100	$	183,200
Total cell sites in service				7,748		8,027		8,028		7,984		7,932
Owned towers in service				4,411		4,411		4,408		4,377		4,346

United States Cellular Corporation
Core Markets Summary Operating Data (Unaudited)
Excludes NY1 & NY2

Quarter Ended			6/30/2013		3/31/2013		12/31/2012		9/30/2012		6/30/2012
Retail Customers
	Postpaid
		Total at end of period		4,412,000		4,463,000		4,496,000		4,515,000		4,538,000
		Gross additions		165,000		176,000		208,000		196,000		167,000
		Net additions (losses)		(53,000)		(33,000)		(19,000)		(23,000)		(30,000)
		ARPU (1)	$	54.44	$	54.21	$	53.91	$	53.67	$	53.73
		Churn rate (2)		1.6%		1.6%		1.7%		1.6%		1.4%
		Smartphone penetration (3) (4)		45.5%		43.0%		41.1%		37.8%		36.0%
	Prepaid
		Total at end of period		381,000		373,000		342,000		305,000		246,000
		Gross additions		76,000		91,000		87,000		99,000		60,000
		Net additions (losses)		8,000		31,000		37,000		59,000		23,000
		ARPU (1)	$	31.65	$	32.92	$	33.21	$	32.97	$	33.23
		Churn rate (2)		6.0%		5.6%		5.1%		4.8%		5.4%
Total customers at end of period				4,968,000		5,005,000		5,022,000		5,012,000		4,989,000
Billed ARPU (1)			$	50.98	$	50.93	$	50.71	$	50.59	$	50.71
Service revenue ARPU (1)			$	57.88	$	57.14	$	57.67	$	59.34	$	58.89
Smartphones sold as a percent of total devices sold				66.1%		62.1%		62.9%		53.0%		52.0%
Total population
		Consolidated markets (5)		84,025,000		84,025,000		83,384,000		82,595,000		82,283,000
		Consolidated operating markets (5)		31,822,000		31,822,000		31,445,000		31,110,000		31,110,000
Market penetration at end of period
		Consolidated markets (6)		5.9%		6.0%		6.0%		6.1%		6.1%
		Consolidated operating markets (6)		15.6%		15.7%		16.0%		16.1%		16.0%
Capital expenditures (000s)			$	171,200	$	113,300	$	241,400	$	184,100	$	163,600
Total cell sites in service				6,113		6,113		6,130		6,089		6,041
Owned towers in service				3,844		3,846		3,847		3,818		3,787

(1) ARPU metrics are calculated by dividing a revenue base by an average number of customers by the number of months in the period. These revenue bases and customer populations are shown below:

a. Postpaid ARPU consists of total postpaid service revenues and postpaid customers.

b. Prepaid ARPU consists of total prepaid service revenues and prepaid customers.

c. Billed ARPU consists of total retail service revenues and postpaid, prepaid and reseller customers.

d. Service revenue ARPU consists of total retail service revenues, inbound roaming and other service revenues and postpaid, prepaid and reseller customers.

(2) Churn metrics represent the percentage of the postpaid or prepaid customers that disconnect service each month. These metrics represent the average monthly postpaid or prepaid churn rate for each respective period.

(3) Smartphones represent wireless devices which run on an Android^TM, BlackBerry® or Windows Mobile® operating system, excluding tablets.

(4) Smartphone penetration is calculated by dividing postpaid smartphone customers by total postpaid customers.

(5) Used only to calculate market penetration of consolidated and core markets and consolidated and core operating markets, respectively. See footnote (6) below.

(6) Market penetration is calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated and core markets and consolidated and core operating markets, respectively, as estimated by Claritas®.

		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)
			2013		2012		Amount		Percent
Operating revenues
	Service		$	910,966	$	1,029,742	$	(118,776)	(12%)
	Equipment sales			84,164		74,658		9,506	13%
		Total operating revenues		995,130		1,104,400		(109,270)	(10%)

Operating expenses
	System operations (excluding Depreciation, amortization and accretion reported below)			192,267		243,227		(50,960)	(21%)
	Cost of equipment sold			217,070		191,700		25,370	13%
	Selling, general and administrative			404,127		435,053		(30,926)	(7%)
	Depreciation, amortization and accretion			202,580		147,555		55,025	37%
	Loss on asset disposals, net			9,018		2,702		6,316	>100%
	(Gain) loss on sale of business and other exit costs, net			(249,024)		—		(249,024)	N/M
		Total operating expenses		776,038		1,020,237		(244,199)	(24%)

Operating income				219,092		84,163		134,929	>100%

Investment and other income (expense)
	Equity in earnings of unconsolidated entities			35,602		25,154		10,448	42%
	Interest and dividend income			969		845		124	15%
	Gain (loss) on investments			18,527		(3,728)		22,255	>(100%)
	Interest expense			(10,154)		(12,360)		2,206	18%
	Other, net			321		(229)		550	>(100%)
		Total investment and other income (expense)		45,265		9,682		35,583	>100%

Income before income taxes				264,357		93,845		170,512	>100%
	Income tax expense			120,682		34,597		86,085	>100%

Net income				143,675		59,248		84,427	>100%
	Less: Net income attributable to noncontrolling interests, net of tax			(284)		(6,563)		6,279	96%
Net income attributable to U.S. Cellular shareholders			$	143,391	$	52,685	$	90,706	>100%

Basic weighted average shares outstanding				83,845		84,707		(862)	(1%)
Basic earnings per share attributable to U.S. Cellular shareholders			$	1.71	$	0.62	$	1.09	>100%

Diluted weighted average shares outstanding				84,661		85,236		(575)	(1%)
Diluted earnings per share attributable to U.S. Cellular shareholders			$	1.69	$	0.62	$	1.07	>100%

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)
			2013		2012		Amount		Percent
Operating revenues
	Service		$	1,907,315	$	2,053,562	$	(146,247)	(7%)
	Equipment sales			169,561		142,959		26,602	19%
		Total operating revenues		2,076,876		2,196,521		(119,645)	(5%)

Operating expenses
	System operations (excluding Depreciation, amortization and accretion reported below)			408,566		476,391		(67,825)	(14%)
	Cost of equipment sold			458,761		378,736		80,025	21%
	Selling, general and administrative			824,207		877,297		(53,090)	(6%)
	Depreciation, amortization and accretion			392,425		294,240		98,185	33%
	Loss on asset disposals, net			14,452		4,705		9,747	>100%
	(Gain) loss on sale of business and other exit costs, net			(242,093)		(4,213)		(237,880)	>100%
		Total operating expenses		1,856,318		2,027,156		(170,838)	(8%)

Operating income				220,558		169,365		51,193	30%

Investment and other income (expense)
	Equity in earnings of unconsolidated entities			62,437		46,768		15,669	34%
	Interest and dividend income			1,872		1,888		(16)	(1%)
	Gain (loss) on investments			18,527		(3,728)		22,255	>(100%)
	Interest expense			(21,064)		(25,771)		4,707	18%
	Other, net			106		(27)		133	>(100%)
		Total investment and other income		61,878		19,130		42,748	>100%

Income before income taxes				282,436		188,495		93,941	50%
	Income tax expense			128,051		60,235		67,816	>100%

Net income				154,385		128,260		26,125	20%
	Less: Net income attributable to noncontrolling interests, net of tax			(6,080)		(13,083)		7,003	54%
Net income attributable to U.S. Cellular shareholders			$	148,305	$	115,177	$	33,128	29%

Basic weighted average shares outstanding				83,842		84,638		(796)	(1%)
Basic earnings per share attributable to U.S. Cellular shareholders			$	1.77	$	1.36	$	0.41	30%

Diluted weighted average shares outstanding				84,655		85,248		(593)	(1%)
Diluted earnings per share attributable to U.S. Cellular shareholders			$	1.75	$	1.35	$	0.40	30%

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

ASSETS


		June 30,		December 31,
		2013		2012
Current assets
	Cash and cash equivalents	$	467,421	$	378,358
	Short-term investments		110,352		100,676
	Accounts receivable from customers and others		368,826		445,220
	Inventory		163,433		155,886
	Income taxes receivable		—		1,612
	Prepaid expenses		68,063		62,560
	Net deferred income tax asset		48,818		35,419
	Other current assets		18,845		16,745
			1,245,758		1,196,476

Assets held for sale			78,389		216,763

Investments
	Licenses		1,396,179		1,456,794
	Goodwill		387,360		421,743
	Customer lists, net		33		102
	Investments in unconsolidated entities		276,363		144,531
	Long-term investments		40,120		50,305
			2,100,055		2,073,475

Property, plant and equipment
	In service and under construction		7,380,123		7,478,428
	Less: Accumulated depreciation		4,556,614		4,455,840
			2,823,509		3,022,588

Other assets and deferred charges			82,067		78,148

Total assets		$	6,329,778	$	6,587,450

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

LIABILITIES AND EQUITY


			June 30,		December 31,
			2013		2012
Current liabilities
	Current portion of long-term debt		$	100	$	92
	Accounts payable
		Affiliated		15,459		10,725
		Trade		341,581		310,936
	Customer deposits and deferred revenues			198,799		192,113
	Accrued taxes			183,312		35,834
	Accrued compensation			62,140		90,418
	Other current liabilities			100,500		114,881
				901,891		754,999

Liabilities held for sale				559		19,594

Deferred liabilities and credits
	Net deferred income tax liability			835,808		849,818
	Other deferred liabilities and credits			306,262		288,441

Long-term debt				879,121		878,858

Noncontrolling interests with redemption features				512		493

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			1,418,428		1,412,453
	Treasury shares			(177,173)		(165,724)
	Retained earnings			2,055,905		2,399,052
		Total U.S. Cellular shareholders' equity		3,385,234		3,733,855

Noncontrolling interests				20,391		61,392

	Total equity			3,405,625		3,795,247

Total liabilities and equity			$	6,329,778	$	6,587,450

United States Cellular Corporation

Schedule of Cash and Cash Equivalents and Investments

(Unaudited, dollars in thousands)

The following table presents U.S. Cellular’s cash and cash equivalents and investments at June 30, 2013 and December 31, 2012.

		June 30,		December 31,
		2013		2012

Cash and cash equivalents		$	467,421	$	378,358

Amounts included in short-term investments (1)(2)
	U.S. Treasury Notes		110,352		100,676

Amounts included in long-term investments (1)(3)
	U.S. Treasury Notes		40,120		50,305

Total cash and cash equivalents and investments		$	617,893	$	529,339

(1) Designated as held-to-maturity investments and are recorded at amortized cost on the Consolidated Balance Sheet.

(2) Maturities are less than twelve months from the respective balance sheet dates.

(3) At June 30, 2013, maturities range between 17 and 18 months.

United States Cellular Corporation
Consolidated Statement of Cash Flows
Six Months Ended June 30,
(Unaudited, dollars in thousands)

			2013		2012
Cash flows from operating activities
	Net income		$	154,385	$	128,260
	Add (deduct) adjustments to reconcile net income to net cash flows from operating activities
		Depreciation, amortization and accretion		392,425		294,240
		Bad debts expense		32,715		30,659
		Stock-based compensation expense		6,530		11,057
		Deferred income taxes, net		(26,527)		30,479
		Equity in earnings of unconsolidated entities		(62,437)		(46,768)
		Distributions from unconsolidated entities		45,370		6,743
		Loss on asset disposals, net		14,452		4,705
		(Gain) loss on sale of business and other exit costs, net		(242,093)		(4,213)
		(Gain) loss on investments		(18,527)		3,728
		Noncash interest expense		526		902
		Other operating activities		489		321
	Changes in assets and liabilities from operations
		Accounts receivable		(1,544)		(13,383)
		Inventory		(7,644)		(56,039)
		Accounts payable - trade		67,457		(20,987)
		Accounts payable - affiliate		4,734		3,129
		Customer deposits and deferred revenues		8,663		21,131
		Accrued taxes		147,566		85,327
		Accrued interest		176		149
		Other assets and liabilities		(68,131)		(67,203)
				448,585		412,237

Cash flows from investing activities
	Cash used for additions to property, plant and equipment			(323,157)		(430,225)
	Cash paid for acquisitions and licenses			(14,150)		(12,647)
	Cash received from divestitures			480,000		49,786
	Cash paid for investments			—		(45,000)
	Cash received for investments			—		45,000
	Other investing activities			3,993		(3,097)
				146,686		(396,183)

Cash flows from financing activities
	Repayment of long-term debt			(71)		(45)
	Common shares reissued for benefit plans, net of tax payments			(2,206)		(2,465)
	Common shares repurchased			(18,425)		—
	Dividends paid			(482,270)		—
	Distributions to noncontrolling interests			(3,292)		(643)
	Other financing activities			56		568
				(506,208)		(2,585)

Net increase in cash and cash equivalents				89,063		13,469

Cash and cash equivalents
	Beginning of period			378,358		424,155
	End of period		$	467,421	$	437,624

United States Cellular Corporation
Financial Measures and Reconciliations
(Unaudited, dollars in thousands)

			Three Months Ended				Six Months Ended
			June 30,				June 30,
				2013		2012		2013		2012

	Cash flows from operating activities		$	224,970	$	155,270	$	448,585	$	412,237
	Deduct:
	Cash used for additions to property, plant and equipment			172,133		221,065		323,157		430,225
		Free cash flow (1)	$	52,837	$	(65,795)	$	125,428	$	(17,988)

(1) Free cash flow is defined as Cash flows from operating activities less Cash used for additions to property, plant and equipment. Free cash flow is a non-GAAP financial measure. U.S. Cellular believes that free cash flow as reported by U.S. Cellular may be 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.

UNITED STATES CELLULAR CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 2, 2013

Attached files

UNITED STATES CELLULAR CORP Reports