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

Note: Comparisons are year over year unless otherwise noted.

3Q 2009 Highlights

    --  Postpay net additions were 8,000; prepaid net losses were 14,000.
    --  Service revenues of $984.9 million, down 3 percent due primarily to a
        $24.7 million decrease in inbound roaming revenues.
    --  Retail service ARPU (average revenue per unit) increased from $46.97 to
        $47.02.
    --  34 percent increase in data revenues, to $174.3 million, representing 18
        percent of service revenues.  Data revenue per customer increased from
        $7.01 to $9.46.
    --  Postpay churn was 1.7 percent; postpay customers comprised 96 percent of
        retail customers.
    --  7 percent increase in cell sites in service, to 7,161.

As previously announced, U.S. Cellular(R) will hold a teleconference on Nov. 5, 2009, at 10:00 a.m. Chicago time. 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 reported service revenues of $984.9 million for the third quarter of 2009, a 3 percent decrease from $1,013.9 million in the comparable period one year ago, due primarily to a $24.7 million reduction in inbound roaming revenues related to the acquisition of Alltel Corporation by Verizon Wireless. Net income attributable to U.S. Cellular and related diluted earnings per share were $35.6 million and $0.41, respectively, for the third quarter of 2009, compared to $89.9 million and $1.02, respectively, in the comparable period one year ago. In the third quarter of 2008, U.S. Cellular recorded a $16.4 million pre-tax gain on disposition of investments related to Rural Cellular Corporation.

"During the third quarter, both gross and net retail additions improved significantly over the second quarter," said John E. Rooney, U.S. Cellular president and CEO. "We reached out with targeted postpay promotions and more value-driven prepaid plans and customers responded well, particularly in our larger markets. In fact, retail net additions improved sequentially each month in the quarter.

"Data revenues grew 34 percent, helping to offset the expected decline in inbound roaming revenue," continued Rooney. "To promote continued growth in data revenues, we have accelerated the expansion of our 3G network, reaching approximately 75 percent of our customers at the end of the third quarter. This will help us further drive the already strong sales of smartphones, messaging products and data applications. We're also seeing excellent demand for our premium phones, like the recently launched LG Bliss(TM) and LG Tritan(TM). And, we're optimizing our handset mix, including the recent launch of the Blackberry Tour(TM) to promote sales in all of our customer segments during the holiday season.

"As expected, operating income declined this quarter, reflecting lower revenues, as well as increased spending in support of multi-year initiatives," added Rooney. "These initiatives will be a strong focus for U.S. Cellular in 2010 and beyond, enabling us to increase efficiency, while strengthening our relationships with customers and developing targeted marketing and sales programs for all channels."

Guidance

Guidance for the year ending Dec. 31, 2009 is as follows. Guidance is unchanged from Aug. 6, 2009. There can be no assurance that final results will not differ materially from this guidance.

U.S. Cellular 2009 guidance as of Nov. 5, 2009 is as follows: Service revenues $3,900-$3,950 million Operating income(1) $300-$375 million Depreciation, amortization and 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 Nov. 5, 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 Nov. 5, 2009 at 10:00 a.m. Chicago time.

    --  Access the live call on the Conference Calls page of uscellular.com at
        http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&ev
        entID=2517092
    --  Access the call by phone at 800/706-9695 (US/Canada) and use conference
        ID #38289990.

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, 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 uscellular.com.

About U.S. Cellular(R)

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 approximately 6.1 million customers in 26 states. The Chicago-based company employed approximately 8,700 full-time equivalent associates as of Sept. 30, 2009. 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 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 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 9/30/2009 6/30/2009 3/31/2009 12/31/2008 9/30/2008 --------- --------- --------- ---------- --------- Total population Consolidated markets(1) 85,118,000 83,726,000 83,726,000 83,014,000 82,875,000 Consolidated operating markets(1) 46,306,000 46,306,000 46,306,000 46,009,000 45,493,000 All customers Total at end of period 6,131,000 6,155,000 6,243,000 6,196,000 6,176,000 Gross additions 386,000 317,000 404,000 395,000 367,000 Net additions (losses) (24,000) (88,000) 47,000 20,000 (18,000) Market penetration at end of period Consolidated markets(2) 7.2% 7.4% 7.5% 7.5% 7.5% Consolidated operating markets(2) 13.2% 13.3% 13.5% 13.5% 13.6% Retail customers Total at end of period 5,705,000 5,711,000 5,770,000 5,707,000 5,674,000 Gross additions 351,000 286,000 366,000 352,000 325,000 Net postpay additions (losses) 8,000 (32,000) 60,000 41,000 12,000 Net prepay additions (losses) (14,000) (27,000) 3,000 (8,000) (15,000) Cell sites in service 7,161 7,043 6,942 6,877 6,716 Average monthly revenue per unit(3) $53.49 $52.41 $52.54 $52.71 $54.59 Retail service revenue per unit(3) (5) $47.02 $46.85 $46.78 $46.43 $46.97 Inbound roaming revenue per unit(3) (5) $3.73 $3.35 $3.21 $4.25 $5.03 Other revenue per unit(3) (5) $2.74 $2.21 $2.55 $2.03 $2.59 Postpay churn rate(4) 1.7% 1.7% 1.5% 1.6% 1.6% Construction expenditures (000s) $128,900 $91,200 $137,700 $190,000 $146,100 (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) Derived from Service revenues as reported in Financial Highlights for each respective quarter as follows: Service revenue (000s) $984,923 $974,755 $981,874 $976,952 $1,013,928 Components Retail service revenue (000s) 865,867 871,209 874,098 860,503 872,397 Inbound roaming revenue (000s) 68,767 62,223 60,057 78,768 93,472 Other revenue (000s) 50,289 41,323 47,719 37,681 48,059 Divided by average customers (000s) 6,138 6,199 6,229 6,178 6,191 Divided by three months in each quarter 3 3 3 3 3 Average monthly revenue per unit $53.49 $52.41 $52.54 $52.71 $54.59 Retail service revenue per unit $47.02 $46.85 $46.78 $46.43 $46.97 Inbound roaming revenue per unit $3.73 $3.35 $3.21 $4.25 $5.03 Other revenue per unit $2.74 $2.21 $2.55 $2.03 $2.59 (4) 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 Other revenue to Retail service revenue and Inbound roaming revenue. Previous quarters have been adjusted to reflect this change. United States Cellular Corporation Consolidated Statement of Operations Highlights Three Months Ended September 30, (Unaudited, dollars and shares in thousands, except per share amounts) Increase (Decrease) ------------------- 2009 2008 Amount Percent ---- ---- ------ ------- Operating revenues Service $984,923 $1,013,928 $(29,005) (3%) Equipment sales 73,377 77,947 (4,570) (6%) ------ ------ ------ Total operating revenues 1,058,300 1,091,875 (33,575) (3%) --------- --------- ------- Operating expenses System operations (excluding Depreciation, amortization and accretion reported below) 205,458 197,473 7,985 4% Cost of equipment sold 189,354 185,992 3,362 2% Selling, general and administrative 454,839 436,135 18,704 4% Depreciation, amortization and accretion 147,586 145,434 2,152 1% Loss on asset disposals, net 3,371 6,884 (3,513) (51%) ----- ----- ------ Total operating expenses 1,000,608 971,918 28,690 3% --------- ------- ------ Operating income 57,692 119,957 (62,265) (52%) Investment and other income (expense) Equity in earnings of unconsolidated entities 23,126 22,319 807 4% Interest and dividend income 1,420 1,137 283 25% Gain on disposition of investments - 16,628 (16,628) N/M Interest expense (19,358) (19,722) 364 2% Other, net 905 391 514 N/M --- --- --- Total investment and other income (expense) 6,093 20,753 (14,660) (71%) ----- ------ ------- Income before income taxes 63,785 140,710 (76,925) (55%) Income tax expense 22,541 45,506 (22,965) (50%) ------ ------ ------- Net income 41,244 95,204 (53,960) (57%) Less: Net income attributable to noncontrolling interests, net of tax (5,606) (5,255) (351) (7%) ------ ------ ---- Net income attributable to U.S. Cellular $35,638 $89,949 $(54,311) (60%) ======= ======= ========= Basic weighted average shares outstanding 86,848 87,460 (612) (1%) Basic earnings per share attributable to U.S. Cellular shareholders $0.41 $1.03 $(0.62) (60%) ===== ===== ====== Diluted weighted average shares outstanding 87,128 87,833 (705) (1%) Diluted earnings per share attributable to U.S. Cellular shareholders $0.41 $1.02 $(0.61) (60%) ===== ===== ====== N/M - Percentage change not meaningful United States Cellular Corporation Consolidated Statement of Operations Highlights Nine Months Ended September 30, (Unaudited, dollars and shares in thousands, except per share amounts) Increase (Decrease) ------------------ 2009 2008 Amount Percent ---- ---- ------ ------- Operating revenues Service $2,941,552 $2,963,374 $(21,822) (1%) Equipment sales 212,062 226,949 (14,887) (7%) ------- ------- ------- Total operating revenues 3,153,614 3,190,323 (36,709) (1%) --------- --------- ------- Operating expenses System operations (excluding Depreciation, amortization and accretion reported below) 600,267 585,141 15,126 3% Cost of equipment sold 531,110 540,182 (9,072) (2%) Selling, general and administrative 1,277,357 1,258,177 19,180 2% Depreciation, amortization and accretion 423,851 433,222 (9,371) (2%) Loss on asset disposals, net 7,648 16,776 (9,128) (54%) ----- ------ ------ Total operating expenses 2,840,233 2,833,498 6,735 - --------- --------- ----- Operating income 313,381 356,825 (43,444) (12%) Investment and other income (expense) Equity in earnings of unconsolidated entities 73,247 66,361 6,886 10% Interest and dividend income 2,648 4,471 (1,823) (41%) Gain on disposition of N/M investments - 16,628 (16,628) Interest expense (57,767) (60,611) 2,844 5% Other, net 1,183 1,109 74 7% ----- ----- -- Total investment and other income (expense) 19,311 27,958 (8,647) (31%) ------ ------ ------ Income before income taxes 332,692 384,783 (52,091) (14%) Income tax expense 111,521 137,062 (25,541) (19%) ------- ------- ------- Net income 221,171 247,721 (26,550) (11%) Less: Net income attributable to noncontrolling interests, net of tax (17,583) (14,613) (2,970) (20%) ------- ------- ------ Net income attributable to U.S. Cellular $203,588 $233,108 $(29,520) (13%) ======== ======== ========= Basic weighted average shares outstanding 87,011 87,534 (523) (1%) Basic earnings per share attributable to U.S. Cellular shareholders $2.34 $2.66 $(0.32) (12%) ===== ===== ====== Diluted weighted average shares outstanding 87,216 87,908 (692) (1%) Diluted earnings per share attributable to U.S. Cellular shareholders $2.33 $2.65 $(0.32) (12%) ===== ===== ====== N/M - Percentage change not meaningful United States Cellular Corporation Consolidated Balance Sheet Highlights (Unaudited, dollars in thousands) ASSETS September 30, December 31, 2009 2008 ---- ---- Current assets Cash and cash equivalents $404,894 $170,996 Accounts receivable from customers and other 447,958 419,619 Inventory 121,073 116,564 Prepaid income taxes 4,793 22,515 Prepaid expenses 63,020 51,645 Net deferred income tax asset 19,481 19,481 Other current assets 53,101 14,227 ------ ------ 1,114,320 815,047 Investments Licenses 1,445,501 1,433,415 Goodwill 494,737 494,279 Customer lists 5,273 8,936 Investments in unconsolidated entities 177,497 156,637 Notes and interest receivable - long-term 4,247 4,297 ----- ----- 2,127,255 2,097,564 Property, plant and equipment In service and under construction 5,718,767 5,884,383 Less: accumulated depreciation 3,157,001 3,264,007 --------- --------- 2,561,766 2,620,376 Other assets and deferred charges 38,484 33,055 Total assets $5,841,825 $5,566,042 ========== ========== United States Cellular Corporation Consolidated Balance Sheet Highlights (Unaudited, dollars in thousands) LIABILITIES AND SHAREHOLDERS' EQUITY September 30, December 31, 2009 2008 ---- ---- Current liabilities Current portion of long-term debt $10,088 $10,258 Accounts payable Affiliated 8,633 9,613 Trade 235,353 248,785 Customer deposits and deferred revenues 146,224 151,082 Accrued taxes 56,500 17,643 Accrued compensation 57,012 55,969 Other current liabilities 102,157 108,533 ------- ------- 615,967 601,883 Deferred liabilities and credits Net deferred income tax liability 518,245 478,106 Other deferred liabilities and credits 250,762 233,619 ------- ------- 769,007 711,725 Long-term debt 997,552 996,636 Commitments and contingencies Noncontrolling interests with mandatory redemption features 708 589 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 1,353,544 1,340,146 Treasury shares (63,912) (50,258) Retained earnings 2,020,710 1,828,680 --------- --------- Total U.S. Cellular shareholders' equity 3,398,416 3,206,642 Noncontrolling interests 60,175 48,567 ------ ------ Total equity 3,458,591 3,255,209 Total liabilities and equity $5,841,825 $5,566,042 ========== ========== United States Cellular Corporation Consolidated Statement of Cash Flows Nine Months Ended September 30, (Unaudited, dollars in thousands) 2009 2008 ---- ---- Cash flows from operating activities Net income $221,171 $247,721 Add (deduct) adjustments to reconcile net income to net cash flows from operating activities Depreciation, amortization and accretion 423,851 433,222 Bad debts expense 73,100 52,753 Stock-based compensation expense 13,000 11,293 Deferred income taxes, net 44,429 44,486 Equity in earnings of unconsolidated entities (73,247) (66,361) Distributions from unconsolidated entities 51,306 50,859 Gain on disposition of investments - (16,628) Loss on asset disposals, net 7,648 16,776 Excess tax benefit from stock awards (4) (1,018) Other noncash expense 1,828 1,539 Changes in assets and liabilities from operations Accounts receivable (101,263) (71,551) Inventory (4,509) (11,552) Accounts payable - trade (13,432) 11,383 Accounts payable - affiliate (980) 134 Customer deposits and deferred revenues (4,858) 9,534 Accrued taxes 58,139 (1,724) Accrued interest 9,787 9,787 Other assets and liabilities (68,272) (24,073) ------- ------- 637,694 696,580 ------- ------- Cash flows from investing activities Additions to property, plant and equipment (357,770) (395,637) Proceeds from disposition of investments - 16,690 Cash received from divestitures 50 6,838 Cash paid for acquisitions and licenses (12,527) (314,730) Other investing activities 1,357 (1,255) ----- ------ (368,890) (688,094) -------- -------- Cash flows from financing activities Issuance of notes payable - 100,000 Repayment of notes payable - (100,000) Common shares reissued for benefit plans, net of tax payments (119) (1,286) Common shares repurchased (24,283) (23,146) Excess tax benefit from stock awards 4 1,018 Payment of debt issuance costs (4,416) - Distributions to noncontrolling interests (5,856) (9,146) Other financing activities (236) (2,851) ---- ------ (34,906) (35,411) ------- ------- Net increase (decrease) in cash and cash equivalents 233,898 (26,925) Cash and cash equivalents Beginning of period 170,996 204,533 ------- ------- End of period $404,894 $177,608 ======== ========

United States Cellular Corporation

CONTACT: Jane W. McCahon, Vice President, Corporate Relations,
+1-312-592-5379, jane.mccahon@teldta.com, or Julie D. Mathews, Manager,
Investor Relations, +1-312-592-5341, julie.mathews@teldta.com, both of
United States Cellular Corporation