US Cellular 2012 Annual Report Download - page 63

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United States Cellular Corporation
Notes to the Consolidated Financial Statements (Continued)
NOTE 6 EARNINGS PER SHARE (Continued)
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:
Year ended December 31, 2012 2011 2010
(Dollars and shares in thousands, except earnings per share)
Net income attributable to U.S. Cellular shareholders ............. $111,006 $175,041 $136,074
Weighted average number of shares used in basic earnings per share 84,645 84,877 86,128
Effect of dilutive securities:
Stock options ........................................ 58 114 89
Restricted stock units .................................. 364 344 301
Weighted average number of shares used in diluted earnings per
share .............................................. 85,067 85,335 86,518
Basic earnings per share attributable to U.S. Cellular shareholders . . . $ 1.31 $ 2.06 $ 1.58
Diluted earnings per share attributable to U.S. Cellular shareholders . . $ 1.30 $ 2.05 $ 1.57
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.
2012 2011 2010
(Shares in thousands)
Stock options .................................... 2,452 1,399 1,771
Restricted stock units ............................... 318 215 224
NOTE 7 ACQUISITIONS, DIVESTITURES AND EXCHANGES
U.S. Cellular assesses its existing wireless interests on an ongoing basis with a goal of improving the
competitiveness of its operations and maximizing its long-term return on capital. As part of this strategy,
U.S. Cellular reviews attractive opportunities to acquire additional wireless operating markets and
wireless spectrum. In addition, U.S. Cellular may seek to divest outright or include in exchanges for other
wireless interests those interests that are not strategic to its long-term success.
Divestiture Transaction
On November 6, 2012, U.S. Cellular entered into a Purchase and Sale Agreement with subsidiaries of
Sprint Nextel Corporation (‘‘Sprint’’). The Purchase and Sale Agreement provides that U.S. Cellular will
transfer customers and certain PCS license spectrum to Sprint in U.S. Cellular’s Chicago, central Illinois,
St. Louis and certain Indiana/Michigan/Ohio markets (‘‘Divestiture Markets’’) in consideration for
$480 million in cash at closing, subject to pro-rations of certain assets and liabilities. The Purchase and
Sale Agreement also contemplates certain other agreements, collectively referred to as the ‘‘Divestiture
Transaction.’’
U.S. Cellular will retain other assets and liabilities related to the Divestiture Markets, including network
assets, retail stores and related equipment, and other buildings and facilities. The transaction does not
affect spectrum licenses held by U.S. Cellular or VIEs that are not currently used in the operations of the
Divestiture Markets. The Purchase and Sale Agreement also contemplates certain other agreements,
including customer and network transition services agreements, which will require that U.S. Cellular
provide customer, billing and network services to Sprint for a period of up to 24 months after the closing
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