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8-K - 8-K - UNITED STATES CELLULAR CORPform8-k.htm
EX-99.2 - EX-99.2 - UNITED STATES CELLULAR CORPexhibit992.htm

 

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 of www.teldta.com or www.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 1 percent 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 2009now available to 75 percent of customershelped 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 at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&eventID=2754661 or on the Conference Calls page of www.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 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.

 

2


 

 

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, 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 successfully grow its markets; changes in the overall economy, competition, the state and 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 per 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, visit www.uscellular.com.

3


 
 

 

 UNITED STATES CELLULAR CORPORATION

SUMMARY OPERATING DATA

  

  

 

 

 

 

 

 

 

 

 

 

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.

 

4


 

 

UNITED STATES CELLULAR CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS HIGHLIGHTS

Three Months Ended December 31,

(Unaudited, dollars and shares in thousands, except per share amounts)

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

      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.

5


 

UNITED STATES CELLULAR CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS HIGHLIGHTS

Twelve Months Ended December 31,

(Unaudited, dollars and shares in thousands, except per share amounts)

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

      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

6


 

UNITED STATES CELLULAR CORPORATION

CONSOLIDATED BALANCE SHEET HIGHLIGHTS

(Unaudited, dollars in thousands)

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

December 31,

2009 

 

December 31,

2008 

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 

 

 

 

 

 

 

 

Other assets and deferred charges

 

 38,776 

 

 

 33,055 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

 5,745,217 

 

$

 5,566,042 

7


 

UNITED STATES CELLULAR CORPORATION

CONSOLIDATED BALANCE SHEET HIGHLIGHTS

(Unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

December 31,

2009

 

December 31,

2008

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

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests with redemption features

 

 727

 

 

 

 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

 

 1,356,322

 

 

 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