As previously announced, U.S. Cellular will hold a teleconference Feb. 26, 2013 at 9:30 a.m. CST. Listen to the live call via the Conference Calls page of www.teldta.com or www.uscellular.com.

Contact: Jane W. McCahon, Vice President, Corporate Relations and Corporate Secretary

(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 2012 RESULTS AND 2013 FINANCIAL GUIDANCE

CHICAGO – Feb. 26, 2013 – United States Cellular Corporation [NYSE:USM] reported service revenues of $1,008.9 million for the fourth quarter of 2012, versus $1,030.0 million for the comparable period one year ago. Net loss attributable to U.S. Cellular shareholders was $39.6 million, or $0.47 per diluted share, for the fourth quarter of 2012. In the fourth quarter of 2011, net income attributable to U.S. Cellular shareholders was $2.8 million, or $0.03 per diluted share.

As previously announced on Nov. 7, 2012, U.S. Cellular reached a definitive agreement to sell its Chicago, St. Louis, central Illinois and three other markets (the “Divestiture Markets”) to subsidiaries of Sprint Nextel Corporation [NYSE: S] for $480 million (the “Divestiture Transaction”). The transaction is subject to regulatory approvals and is expected to close in mid-2013. In the fourth quarter of 2012, U.S. Cellular’s operating income was reduced by $44.5 million due to divestiture-related costs, including a $10.7 million write-down of assets, $12.6 million in employee-related costs, including severance, and $20 million in accelerated depreciation, amortization and accretion.

The table below provides pro forma performance highlights for U.S. Cellular’s Total Consolidated Markets, Divestiture Markets, and Core Markets for the fourth quarter of 2012. Core Markets are the markets that U.S. Cellular will continue to own upon completion of the Divestiture Transaction.

($ in millions except ARPU)	Total Consolidated Markets		Divestiture Markets (1)		Core Markets (1)
Postpaid gross additions		241,000		23,000		218,000
Postpaid churn		1.83%		3.35%		1.67%
Postpaid net additions (losses)		(41,000)		(25,000)		(16,000)
Prepaid net additions (losses)		37,000		(1,000)		38,000
Service revenues (1)		$1,008.9		$101.4		$907.5
Postpaid ARPU (1)		$54.56		$60.91		$53.92

(1) Total Consolidated Markets amounts represent GAAP financial measures and Divestiture Markets and Core Markets amounts represent non-GAAP financial measures. U.S. Cellular believes that the amounts under Divestiture Markets and Core Markets may be useful to investors and other users of its financial information.

The following table highlights the performance of the Core Markets for the fourth quarter of 2012 and 2011.

					%
($ in millions except ARPU)	Q4 2012		Q4 2011		Change
Postpaid gross additions		218,000		209,000		4%
Postpaid churn		1.67%		1.48%		(13%)
Postpaid net additions (losses)		(16,000)		(2,000)		(>100%)
Prepaid net additions		38,000		6,000		>100%
Retail net additions		22,000		4,000		>100%
Service revenues (1)		$907.5		$917.5		(1%)
Postpaid ARPU (1)		$53.92		$52.62		2%
Smartphones sold as % of total devices		62.9%		52.6%		20%
4G/LTE smartphones as % of total smartphones sold		75%		0%		>100%
Capital expenditures (1)		$241		$253		(5%)
Cell sites in service		6,292		6,154		2%
Owned towers		3,847		3,755		2%

(1) The Core Markets amounts for Q4 2012 and Q4 2011 represent non-GAAP financial measures. U.S. Cellular believes that the amounts under Core Markets may be useful to investors and other users of its financial information.

“Our aggressive sales and marketing strategies in the fourth quarter drove a strong increase in smartphone penetration, and encouraged more customers in more markets to migrate to 4G LTE,” said Mary N. Dillon, U.S. Cellular president and CEO. “The announcement of the Divestiture Transaction resulted in an anticipated increase in postpaid churn and lower net additions in the Divestiture Markets. In our Core Markets, however, we had positive net retail additions in the quarter. The improved results were driven by prepaid additions, as postpaid additions continued to be negatively impacted by elevated churn.

“Smartphones were 63 percent of the devices we sold in our Core Markets during the quarter, and the number of 4G LTE smartphones sold nearly doubled from the third quarter. Although revenue from customers increased, overall service revenues declined due to reduced regulatory support revenues and lower roaming revenues as a result of lower negotiated rates. The lower negotiated rates also had a positive effect on roaming expense. Profitability was impacted by the lower service revenues and higher subsidies for 4G LTE smartphones in particular. As customers migrate to the more efficient 4G LTE network, we expect longer-term benefits, including growth in ARPU and lower capital expenditures for our legacy networks.”

“We are moving forward rapidly on our strategies to differentiate our outstanding customer experience even further from our competitors. We’re integrating and enhancing all of our channels to provide seamless shopping, and looking for more opportunities to expand distribution and be where our customers want to shop. As we continue to invest in our future through expanded 4G LTE access and devices, as well as the implementation of our new billing and operational system, we’re also simplifying our operations and processes to increase efficiency and reduce complexity and cost.

“As we move through the regulatory approval process for the Divestiture Transaction, we’re maintaining high-quality service and support for our customers in these markets, helping many of our associates to transition to new roles at U.S. Cellular, and preparing for a smooth transition later in 2013.”

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 of U.S. Cellular’s Form 10-K for the year ended December 31, 2012. 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.

U.S. Cellular has changed the measures which it uses to present estimates of operating results. U.S. Cellular previously presented Adjusted OIBDA, defined as operating income excluding the effects of: depreciation, amortization and accretion (OIBDA); the loss on impairment of assets; and the net gain or loss on asset disposals and exchanges. U.S. Cellular believes Adjusted income before income taxes, as defined below, is a measure which provides a more comprehensive and meaningful view of U.S. Cellular’s recurring results of operations.

	2013 Estimated Results (1)

	Core Markets (2)	Divestiture Markets (2)(3)	U.S. Cellular Consolidated (2)(3)
(Dollars in millions)
Service revenues	$3,600 - $3,700	$165 - $185	$3,765 - $3,885
Adjusted income before income taxes (4)	$765 - $865	$15 - $35	$780 - $900
Capital expenditures	Approx. $600	—	Approx. $600

(1) These estimates are based on U.S. Cellular’s current plans, which include a multi-year deployment of 4G LTE technology which commenced in 2011. 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. As used herein, “Core Markets” represents U.S. Cellular’s total Consolidated Markets excluding the Divestiture Markets. The Core Markets and Divestiture Markets amounts represent non-GAAP financial measures. U.S. Cellular believes that the Core Markets and Divestiture Markets amounts may be useful to investors and other users of its financial information in evaluating the pro forma results for the Core Markets.

(3) These estimates assume the Divestiture Transaction closes July 1, 2013. Actual effects could vary significantly from these estimates as a result of a change in the expected timing of the Divestiture Transaction.

(4) Adjusted income before income taxes is a non-GAAP financial measure defined as income before: Income taxes, Depreciation, amortization and accretion, net Gain or loss on sale of business and other exit costs, and Interest expense. 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. U.S. Cellular believes Adjusted income before income taxes is a meaningful measure of U.S. Cellular’s operating results before significant recurring non-cash charges, discrete gains and losses and financing charges (Interest expense). The following tables provide a reconciliation of Income before income taxes to Adjusted income before income taxes for 2013 Estimated Results and 2012, 2011and 2010 actual results:

			2013 Estimated Results

			Core Markets (2)		Divestiture Markets (2)(3)		U.S. Cellular Consolidated (2)(3)
	(Dollars in millions)
	Income before income taxes (5)		$165-$265		($180)-($160)		($15)-$105
	Depreciation, amortization and accretion expense (6)		Approx. $545		Approx. $195		Approx. $740
	Interest expense		Approx. $55		—		Approx. $55
	Adjusted income before income taxes		$765 - $865		$15 - $35		$780 - $900


			U.S. Cellular Consolidated Actual Results

	Year Ended December 31,		2012		2011		2010
	(Dollars in millions)
	Income before income taxes	$	205.1	$	312.8	$	241.1
	Depreciation, amortization and accretion expense (6)		608.6		573.6		571.0
	(Gain) loss on sale of business and other exit costs, net		21.0		-		-
	Interest expense		42.4		65.6		61.6
	Adjusted income before income taxes	$	877.1	$	952.0	$	873.7

(5)	This amount does not include any estimate for (Gain) loss on sale of business and other exit costs, net, as the timing of such amount is not readily estimable.

(6)	The 2013 estimated amounts for depreciation, amortization and accretion expense in the Divestiture Markets include approximately $120 million of incremental accelerated depreciation resulting from the Divestiture Transaction. The 2012 actual results include $20.1 million of incremental accelerated depreciation resulting from the Divestiture Transaction.

Conference Call Information

U.S. Cellular will hold a conference call on Feb. 26, 2013 at 9:30 a.m. CST.

§ Access the live call on the Conference Calls page of uscellular.com or at http://ir.teldta.com/phoenix.zhtml?c=67422&p=irol-eventDetails&EventId=4917451.

§ 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 5.8 million customers in 26 states. The Chicago-based company had 8,100 full- and part-time associates as of Dec. 31, 2012. 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			12/31/2012		9/30/2012		6/30/2012		3/31/2012		12/31/2011
Total population
	Consolidated markets (1)		93,244,000		92,996,000		92,684,000		92,684,000		91,965,000
	Consolidated operating markets (1)		46,966,000		46,966,000		46,966,000		46,966,000		46,888,000
Market penetration at end of period
	Consolidated markets (2)		6.2%		6.2%		6.3%		6.3%		6.4%
	Consolidated operating markets (2)		12.3%		12.4%		12.3%		12.4%		12.6%
All customers
	Total at end of period		5,798,000		5,808,000		5,799,000		5,837,000		5,891,000
	Gross additions		363,000		364,000		290,000		285,000		306,000
	Net additions (losses)		(10,000)		9,000		(38,000)		(49,000)		(41,000)
	Smartphones sold as a percent of total devices sold (3)		62.9%		53.0%		51.9%		54.1%		52.5%
Retail customers
	Total at end of period		5,557,000		5,561,000		5,542,000		5,570,000		5,608,000
	Postpaid smartphone penetration (3) (4)		41.8%		38.6%		36.8%		34.4%		30.5%
	Gross additions		348,000		350,000		277,000		273,000		298,000
	Net retail additions (losses) (5)		(4,000)		19,000		(28,000)		(34,000)		(13,000)
	Net postpaid additions (losses)		(41,000)		(38,000)		(48,000)		(38,000)		(20,000)
	Net prepaid additions (losses)		37,000		57,000		20,000		4,000		7,000
Service revenue components (000s)
	Retail service	$	886,014	$	884,219	$	889,219	$	888,527	$	882,091
	Inbound roaming		76,090		106,132		86,363		80,132		93,353
	Other		46,820		46,019		54,160		55,161		54,601
Total service revenues (000s)		$	1,008,924	$	1,036,370	$	1,029,742	$	1,023,820	$	1,030,045
Total ARPU (6)		$	58.00	$	59.57	$	59.05	$	58.21	$	58.13
Billed ARPU (7)		$	50.94	$	50.83	$	50.99	$	50.52	$	49.78
Postpaid ARPU (8)		$	54.56	$	54.34	$	54.42	$	54.00	$	53.35
Postpaid churn rate (9)			1.8%		1.7%		1.6%		1.6%		1.6%
Capital expenditures (000s)		$	253,100	$	199,100	$	183,200	$	201,300	$	276,400
Cell sites in service			8,028		7,984		7,932		7,875		7,882

(1) Used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively. See footnote (2) below.

(2) Market Penetration is 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) 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) Includes net postpaid additions (losses) and net prepaid additions (losses).

(6) Total ARPU - Average monthly service revenue per user includes retail service, inbound roaming and other service revenues and is calculated by dividing total service revenues by the number of months in the period and by the average total customers during the period.

(7) Billed ARPU - Average monthly billed revenue per user is calculated by dividing total retail service revenues by the number of months in the period and by the average total customers during the period. Retail service revenues include revenues attributable to postpaid, prepaid and reseller customers.

(8) Postpaid ARPU - Average monthly revenue per postpaid user is calculated by dividing total retail service revenues from postpaid customers by the number of months in the period and by the average postpaid customers during the period.

(9) Represents the percentage of the postpaid customer base that disconnects service each month. This amount represents the average postpaid churn rate for each respective quarterly period.

		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)
			2012		2011		Amount		Percent
Operating revenues
	Service		$	1,008,924	$	1,030,045	$	(21,121)	(2%)
	Equipment sales			106,282		69,588		36,694	53%
		Total operating revenues		1,115,206		1,099,633		15,573	1%

Operating expenses
	System operations (excluding Depreciation, amortization and accretion reported below)			221,169		242,123		(20,954)	(9%)
	Cost of equipment sold			309,182		228,085		81,097	36%
	Selling, general and administrative			449,110		467,265		(18,155)	(4%)
	Depreciation, amortization and accretion			169,242		141,976		27,266	19%
	Loss on asset disposals and exchanges, net			2,121		3,868		(1,747)	(45%)
	(Gain) loss on sale of business and other exit costs, net			25,170		-		25,170	N/M
		Total operating expenses		1,175,994		1,083,317		92,677	9%

Operating income (loss)				(60,788)		16,316		(77,104)	>(100%)

Investment and other income (expense)
	Equity in earnings of unconsolidated entities			18,780		18,277		503	3%
	Interest and dividend income			821		929		(108)	(12%)
	Gain (loss) on investment			10		(2,000)		2,010	>(100%)
	Interest expense			(7,121)		(13,709)		6,588	48%
	Other, net			327		(631)		958	>(100%)
		Total investment and other income (expense)		12,817		2,866		9,951	>100%

Income (loss) before income taxes				(47,971)		19,182		(67,153)	>(100%)
	Income tax expense (benefit)			(18,647)		11,307		(29,954)	>(100%)

Net income (loss)				(29,324)		7,875		(37,199)	>(100%)
	Less: Net income attributable to noncontrolling interests, net of tax			(10,298)		(5,074)		(5,224)	>100%
Net income (loss) attributable to U.S. Cellular shareholders			$	(39,622)	$	2,801	$	(42,423)	>(100%)

Basic weighted average shares outstanding				84,568		84,559		9	-
Basic earnings (loss) per share attributable to U.S. Cellular shareholders			$	(0.47)	$	0.03	$	(0.50)	>(100%)

Diluted weighted average shares outstanding				84,568		85,005		(437)	(1%)
Diluted earnings (loss) per share attributable to U.S. Cellular shareholders			$	(0.47)	$	0.03	$	(0.50)	>(100%)

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)
			2012		2011		Amount		Percent
Operating revenues
	Service		$	4,098,856	$	4,053,797	$	45,059	1%
	Equipment sales			353,228		289,549		63,679	22%
		Total operating revenues		4,452,084		4,343,346		108,738	3%

Operating expenses
	System operations (excluding Depreciation, amortization and accretion reported below)			946,805		929,379		17,426	2%
	Cost of equipment sold			935,947		791,802		144,145	18%
	Selling, general and administrative			1,764,933		1,769,701		(4,768)	-
	Depreciation, amortization and accretion			608,633		573,557		35,076	6%
	(Gain) loss on asset disposals and exchanges, net			18,088		(1,873)		19,961	>(100%)
	(Gain) loss on sale of business and other exit costs, net			21,022		-		21,022	N/M
		Total operating expenses		4,295,428		4,062,566		232,862	6%

Operating income				156,656		280,780		(124,124)	(44%)

Investment and other income (expense)
	Equity in earnings of unconsolidated entities			90,364		83,566		6,798	8%
	Interest and dividend income			3,644		3,395		249	7%
	Gain (loss) on investment			(3,718)		11,373		(15,091)	>(100%)
	Interest expense			(42,393)		(65,614)		23,221	35%
	Other, net			500		(678)		1,178	>(100%)
		Total investment and other income (expense)		48,397		32,042		16,355	51%

Income before income taxes				205,053		312,822		(107,769)	(34%)
	Income tax expense			63,977		114,078		(50,101)	(44%)

Net income				141,076		198,744		(57,668)	(29%)
	Less: Net income attributable to noncontrolling interests, net of tax			(30,070)		(23,703)		(6,367)	(27%)
Net income attributable to U.S. Cellular shareholders			$	111,006	$	175,041	$	(64,035)	(37%)

Basic weighted average shares outstanding				84,645		84,877		(232)	-
Basic earnings per share attributable to U.S. Cellular shareholders			$	1.31	$	2.06	$	(0.75)	(36%)

Diluted weighted average shares outstanding				85,067		85,335		(268)	-
Diluted earnings per share attributable to U.S. Cellular shareholders			$	1.30	$	2.05	$	(0.75)	(37%)

United States Cellular Corporation
Consolidated Balance Sheet Highlights
(Unaudited, dollars in thousands)

ASSETS


		December 31,		December 31,
		2012		2011
Current assets
	Cash and cash equivalents	$	378,358	$	424,155
	Short-term investments		100,676		127,039
	Accounts receivable from customers and others		445,220		441,821
	Inventory		155,886		127,056
	Income taxes receivable		1,612		74,791
	Prepaid expenses		62,560		55,980
	Net deferred income tax asset		35,419		31,905
	Other current assets		16,745		10,096
			1,196,476		1,292,843

Assets held for sale			216,763		49,647

Investments
	Licenses		1,456,794		1,470,769
	Goodwill		421,743		494,737
	Customer lists, net		102		314
	Investments in unconsolidated entities		144,531		138,096
	Notes and interest receivable—long-term		-		1,921
	Long-term investments		50,305		30,057
			2,073,475		2,135,894

Property, plant and equipment
	In service and under construction		7,478,428		7,008,449
	Less: accumulated depreciation		4,455,840		4,218,147
			3,022,588		2,790,302

Other assets and deferred charges			78,148		59,290

Total assets		$	6,587,450	$	6,327,976

United States Cellular Corporation
Consolidated Balance Sheet Highlights
(Unaudited, dollars in thousands)

LIABILITIES AND EQUITY


			December 31,		December 31,
			2012		2011
Current liabilities
	Current portion of long-term debt		$	92	$	127
	Accounts payable
		Affiliated		10,725		12,183
		Trade		310,936		303,779
	Customer deposits and deferred revenues			192,113		181,355
	Accrued taxes			35,834		34,095
	Accrued compensation			90,418		69,551
	Other current liabilities			114,881		121,190
				754,999		722,280

Liabilities held for sale				19,594		1,051

Deferred liabilities and credits
	Net deferred income tax liability			849,818		799,190
	Other deferred liabilities and credits			288,441		248,213

Long-term debt				878,858		880,320

Noncontrolling interests with redemption features				493		1,005

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			1,412,453		1,387,341
	Treasury shares			(165,724)		(152,817)
	Retained earnings			2,399,052		2,297,363
		Total U.S. Cellular shareholders' equity		3,733,855		3,619,961

Noncontrolling interests				61,392		55,956

	Total equity			3,795,247		3,675,917

Total liabilities and equity			$	6,587,450	$	6,327,976

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 December 31, 2012 and December 31, 2011.

		December 31,		December 31,
		2012		2011

Cash and cash equivalents		$	378,358	$	424,155

Amounts included in short-term investments (1)(2)
	Government-backed securities (3)		100,676		127,039

Amounts included in long-term investments (1)(4)
	Government-backed securities (3)		50,305		30,057

Total cash and cash equivalents and investments		$	529,339	$	581,251

(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) Includes U.S. treasury securities and corporate notes guaranteed under the Federal Deposit Insurance Corporation’s Temporary Liquidity Guarantee Program.

(4) Maturities range between 14 and 23 months from the balance sheet date.

United States Cellular Corporation
Consolidated Statement of Cash Flows
Twelve Months Ended December 31,
(Unaudited, dollars in thousands)

			2012		2011
Cash flows from operating activities
	Net income		$	141,076	$	198,744
	Add (deduct) adjustments to reconcile net income to net cash flows from operating activities
		Depreciation, amortization and accretion		608,633		573,557
		Bad debts expense		67,372		62,157
		Stock-based compensation expense		21,466		20,183
		Deferred income taxes, net		49,244		203,264
		Equity in earnings of unconsolidated entities		(90,364)		(83,566)
		Distributions from unconsolidated entities		84,417		91,768
		(Gain) loss on asset disposals and exchanges, net		18,088		(1,873)
		(Gain) loss on sale of business and other exit costs, net		21,022		-
		(Gain) loss on investment		3,718		(11,373)
		Noncash interest expense		(1,822)		10,040
		Other operating activities		546		102
	Changes in assets and liabilities from operations
		Accounts receivable		(64,816)		(82,175)
		Inventory		(28,786)		(14,640)
		Accounts payable - trade		(4,977)		28,410
		Accounts payable - affiliate		(1,458)		1,392
		Customer deposits and deferred revenues		30,353		34,927
		Accrued taxes		73,064		(39,984)
		Accrued interest		167		225
		Other assets and liabilities		(27,652)		(3,296)
				899,291		987,862

Cash flows from investing activities
	Cash used for additions to property, plant and equipment			(826,400)		(771,798)
	Cash paid for acquisitions and licenses			(122,690)		(23,773)
	Cash paid for investments			(120,000)		(110,000)
	Cash received for divestitures			49,932		-
	Cash received for investments			125,000		145,250
	Other investing activities			(2,453)		718
				(896,611)		(759,603)

Cash flows from financing activities
	Repayment of long-term debt			(145)		(330,338)
	Issuance of long-term debt			-		342,000
	Common shares reissued for benefit plans, net of tax payments			(2,205)		1,935
	Common shares repurchased			(20,045)		(62,294)
	Payment of debt issuance costs			(514)		(11,400)
	Distributions to noncontrolling interests			(22,970)		(21,094)
	Payments to acquire additional interest in subsidiaries			(3,167)		-
	Other financing activities			569		172
				(48,477)		(81,019)

Net increase (decrease) in cash and cash equivalents				(45,797)		147,240

Cash and cash equivalents
	Beginning of period			424,155		276,915
	End of period		$	378,358	$	424,155

United States Cellular Corporation
Financial Measures and Reconciliations
(Unaudited, dollars in thousands)

			Three Months Ended December 31,				Twelve Months Ended December 31,
				2012		2011		2012		2011

Service revenues			$	1,008,924	$	1,030,045	$	4,098,856	$	4,053,797

Operating income (loss)				(60,788)		16,316		156,656		280,780
Add:
	Depreciation, amortization and accretion			169,242		141,976		608,633		573,557
	Loss on impairment of assets			-		-		-		-
	(Gain) loss on asset disposals and exchanges, net			2,121		3,868		18,088		(1,873)
	(Gain) loss on sale of business and other exit costs, net			25,170		-		21,022		-
		Adjusted OIBDA (1)	$	135,745	$	162,160	$	804,399	$	852,464

		Adjusted OIBDA margin (2)		13.5%		15.7%		19.6%		21.0%

				2012		2011		2012		2011
Cash flows from operating activities			$	290,857	$	249,041	$	899,291	$	987,862
Deduct:
Cash used for additions to property, plant and equipment				214,969		309,471		826,400		771,798
		Free cash flow (3)	$	75,888	$	(60,430)	$	72,891	$	216,064

(1) Adjusted OIBDA is defined as operating income excluding the effects of: depreciation, amortization and accretion (OIBDA); the loss on impairment of assets (if any); the net gain or loss on asset disposals and exchanges (if any); and the net gain or loss on sale of business and other exit costs (if any).

(2) Adjusted OIBDA margin is defined as adjusted OIBDA divided by service revenues. Equipment revenues are excluded from the denominator of the calculation since equipment is generally sold at a net loss, and such net loss is included in adjusted OIBDA as a cost of earning service revenues for purposes of assessing business results. U.S. Cellular believes that this calculation method is consistent with the method used by certain investors to assess U.S. Cellular’s business results. Adjusted OIBDA margin may also be commonly referred to by management as operating cash flow margin. U.S. Cellular believes this measure provides useful information to investors regarding U.S. Cellular’s financial condition and results of operations because it highlights certain key cash and non-cash items and their impacts on cash flows from operating activities.

(3) 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.