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U.S. Cellular Reports Fourth Quarter 2011 Results
Posted: 24-Feb-2012 [Source: U.S. Cellular]

[U.S. Cellular increases revenues and improves operating income but falls short on customer growth.]

Chicago, IL -- Fourth Quarter Highlights

* Smartphones increased to 52.5 percent of total devices sold from 39.6 percent; smartphone customers increased to 30.5 percent of postpaid customers from 16.7 percent.

* Postpaid ARPU (average revenue per unit) increased 5 percent to $53.35 from $50.99.

* Service revenues increased 4 percent to $1,030.0 million.

* Operating income increased $20.4 million to $16.3 million.

* Net loss of 13,000 retail customers, reflecting loss of 20,000 postpaid customers and a gain of 7,000 prepaid customers; postpaid customers comprised 95 percent of retail customers.

* Cell sites in service increased 3 percent to 7,882.

United States Cellular Corporation (NYSE: USM - News) reported service revenues of $1,030.0 million for the fourth quarter of 2011, versus $991.9 million for the comparable period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $2.8 million and $0.03, respectively, for the fourth quarter of 2011, compared to $7.8 million and $0.09, respectively, for the comparable period in 2010.

The fourth quarter of 2011 was impacted by a $6.1 million adjustment that increased tax expense related to prior periods. In the fourth quarter of 2010, income tax expense was reduced by favorable settlements of certain state income tax audits.

For the twelve months ended Dec. 31, 2011, U.S. Cellular reported service revenues of $4,053.8 million, compared to $3,913.0 million in 2010. Net income attributable to U.S. Cellular shareholders for 2011 and related diluted earnings per share were $175.0 million and $2.05, respectively. In 2010, net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $136.1 million and $1.57, respectively.

"In a competitive environment, U.S. Cellular was able to increase revenues and improve operating income," said Mary N. Dillon, U.S. Cellular president and CEO. "However, we fell short on customer growth, so improving our customer performance is our highest priority in 2012."

"We nearly doubled the number of smartphone customers throughout the year, with the strongest increase in the fourth quarter. More than 30 percent of our postpaid customers now have smartphones, and smartphones were more than half of our total devices sold in the fourth quarter. As a result, we saw dramatic increases in data usage and revenues which, along with growth in inbound roaming revenues, helped us increase average total service revenue per customer by six percent for the year. And while we had an overall customer loss in 2011, we had a solid holiday sales season in terms of net retail customer additions. We also kept churn stable for the year, even as we faced significant competitive pressures, and were able to better control costs by balancing promotions and smartphone subsidies.

"We're bringing even more outstanding experiences to our customers this year, rolling out 4G LTE service and devices to more than half of our subscribers by year end. And we'll introduce more devices throughout the year, to provide a wide range of options to meet all of our customers' needs.

"As I mentioned, our top priority is to achieve positive customer additions in 2012. We're focused on attracting new customers through building awareness, increasing our focus on small-to-medium business customers, and looking to expand our points of distribution. We're also committed to cost-effectively managing the network demands caused by the explosive growth in data use, and improving our profitability through several operational initiatives."

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