U.S. Cellular Reports Second Quarter 2013 Results

PR Newswire

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

United States Cellular Corporation (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 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 Aug. 2, 2013 at 9:30 a.m. CDT.

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, 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.

 

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