Earnings Per Share

9 Months Ended

Sep. 30, 2011

5. Earnings Per Share

Basic earnings per share attributable to U.S. Cellular shareholders is computed by dividing Net income attributable to U.S. Cellular shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to U.S. Cellular shareholders is computed by dividing Net income attributable to U.S. Cellular shareholders by the weighted average number of common shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon exercise of outstanding stock options and the vesting of restricted stock units.

The amounts used in computing Earnings per Common and Series A Common Share and the effects of potentially dilutive securities on the weighted average number of Common and Series A Common Shares are as follows:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
(Dollars and shares in thousands, except per share amounts)
Net income attributable to U.S. Cellular shareholders		$	62,140	$	38,296	$	172,240	$	128,292

Weighted average number of shares used in basic earnings per share			84,547		85,992		84,984		86,329
Effects of dilutive securities:
	Stock options		86		104		124		80
	Restricted stock units		307		332		340		297
Weighted average number of shares used in diluted earnings per share			84,940		86,428		85,448		86,706

Basic earnings per share attributable to U.S. Cellular shareholders		$	0.73	$	0.45	$	2.03	$	1.49

Diluted earnings per share attributable to U.S. Cellular shareholders		$	0.73	$	0.44	$	2.02	$	1.48

Certain Common Shares issuable upon the exercise of stock options or vesting of restricted stock units were not included in average diluted shares outstanding for the calculation of Diluted earnings per share because their effects were antidilutive. The number of such Common Shares excluded is shown in the table below.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2011	2010	2011	2010
(Shares in thousands)
Stock options	1,605	1,836	1,357	1,768
Restricted stock units	1	—	193	195