UNITED STATES CELLULAR CORPORATION 
By 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 (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 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 U.S. Cellular
(2)(3) 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 Divestiture U.S. Cellular
Markets Markets Consolidated
(2) (2)(3) (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 Year Ended
June 30, December 31,
2013 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.
-- 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 66.1% 62.1% 62.9% 53.0% 52.0%
devices sold
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(R) or
Windows Mobile(R) 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(R).
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 172,133 221,065 323,157 430,225
and
equipment
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.
SOURCE United States Cellular Corporation
