US Cellular 2010 Annual Report Download - page 11

– Continued enhancements to U.S. Cellular’s wireless networks;
– Uncertainty related to the National Broadband Plan and other rulemaking by the Federal
Communications Commission (‘‘FCC’’), including uncertainty relating to future eligible
telecommunication carrier (‘‘ETC’’) funding from the universal service fund (‘‘USF’’); and
– Exclusive arrangements between manufacturers of wireless devices and other carriers that restrict
U.S. Cellular’s access to devices desired by customers.
Cash Flows and Investments
U.S. Cellular believes that cash and investments on hand, expected future cash flows from operating
activities and sources of external financing provide substantial liquidity and financial flexibility and are
sufficient to permit U.S. Cellular to finance its contractual obligations and anticipated capital expenditures
for the foreseeable future. U.S. Cellular continues to seek to maintain a strong balance sheet and an
investment grade credit rating.
See ‘‘Financial Resources’’ and ‘‘Liquidity and Capital Resources’’ below for additional information
related to cash flows and investments, including information related to U.S. Cellular’s new revolving
credit agreement.
2011 Estimates
U.S. Cellular’s estimates of full-year 2011 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,
2010. Such forward-looking statements should not be assumed to be accurate 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.
2011 2010
Estimated Results Actual Results
Service revenues .......................... $4,000 - $4,100 million $3,913.0 million
Adjusted OIBDA(1)(3) ....................... $775 - $875 million $ 783.1 million
Operating income(3) ........................ $185 - $285 million $ 195.4 million
Depreciation, amortization and accretion expenses,
and losses on asset disposals and impairment of
assets(2) .............................. Approx. $590 million $ 587.8 million
Capital expenditures(3) ...................... Approx. $650 million $ 583.1 million
(1) Adjusted OIBDA is defined as operating income excluding the effects of: depreciation, amortization
and accretion (OIBDA); the net gain or loss on asset disposals (if any); and the loss on impairment
of assets (if any). This measure also may be commonly referred to by management as operating
cash flow. This measure should not be confused with Cash flows from operating activities, which is a
component of the Consolidated Statement of Cash Flows.
(2) 2010 Actual Results include losses on asset disposals of $10.7 million and no losses on impairment
of assets. The 2011 Estimated Results include only the estimate for Depreciation, amortization and
accretion expenses and losses on disposals of assets, and do not include any estimate for losses
on impairment of assets (since these cannot be predicted).
(3) This guidance is based on U.S. Cellular’s current plans. New developments or changing competitive
conditions in the wireless industry, such as the rate of deployment of 4G Long-term Evolution
(‘‘LTE’’) technology by other carriers, could affect U.S. Cellular’s LTE deployment plans and, as a
result, its capital expenditures and operating expenses.
U.S. Cellular management currently believes that the foregoing estimates represent a reasonable view of
what is achievable considering actions that U.S. Cellular has taken and will be taking. However, the
current general economic conditions in the markets served by U.S. Cellular have created a challenging
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