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United States Cellular Corporation
Notes to Consolidated Financial Statements (Continued)
NOTE 7 INVESTMENTS IN UNCONSOLIDATED ENTITIES (Continued)
The following tables, which are based on information provided in part by third parties, summarize the
combined assets, liabilities and equity, and the combined results of operations of U.S. Cellular’s equity
method investments:
December 31, 2013 2012
(Dollars in thousands)
Assets
Current ........................... $ 489,659 $ 444,100
Due from affiliates .................... 408,735 298,707
Property and other ................... 2,026,104 1,896,784
$2,924,498 $2,639,591
Liabilities and Equity
Current liabilities ..................... $ 351,624 $ 350,067
Deferred credits ..................... 84,834 80,660
Long-term liabilities ................... 19,712 21,328
Long-term capital lease obligations ....... 707 405
Partners’ capital and shareholders’ equity . . . 2,467,621 2,187,131
$2,924,498 $2,639,591
Year Ended December 31, 2013 2012 2011
(Dollars in thousands)
Results of Operations
Revenues .......................... $6,218,067 $5,804,466 $5,519,024
Operating expenses .................. 4,473,722 4,363,399 4,282,277
Operating income .................... 1,744,345 1,441,067 1,236,747
Other income, net .................... 4,842 4,003 4,976
Net income ........................ $1,749,187 $1,445,070 $1,241,723
NY1 & NY2 Deconsolidation
U.S. Cellular holds a 60.00% interest in St. Lawrence Seaway RSA Cellular Partnership (‘‘NY1’’) and a
57.14% interest in New York RSA 2 Cellular Partnership (‘‘NY2’’) (together with NY1, the ‘‘Partnerships’’).
The remaining interests in the Partnerships are held by Cellco Partnership d/b/a Verizon Wireless
(‘‘Verizon Wireless’’). The Partnerships are operated by Verizon Wireless under the Verizon Wireless
brand. Prior to April 3, 2013, because U.S. Cellular owned a greater than 50% interest in each of these
Partnerships and based on U.S. Cellular’s rights under the Partnership Agreements, U.S. Cellular
consolidated the financial results of these Partnerships in accordance with GAAP.
On April 3, 2013, U.S. Cellular entered into an agreement relating to the Partnerships. The agreement
amends the Partnership Agreements in several ways which provide Verizon Wireless with substantive
participating rights that allow Verizon Wireless to make decisions that are in the ordinary course of
business of the Partnerships and which are significant to directing and executing the activities of the
business. Accordingly, as required by GAAP, U.S. Cellular deconsolidated the Partnerships effective as of
April 3, 2013 and thereafter reported them as equity method investments in its consolidated financial
statements (‘‘NY1 & NY2 Deconsolidation’’). After the NY1 & NY2 Deconsolidation, U.S. Cellular retained
the same ownership percentages in the Partnerships and will continue to report the same percentages of
income from the Partnerships, which will be recorded in Equity in earnings of unconsolidated entities in
the Consolidated Statement of Operations. In addition to the foregoing described arrangements, U.S.
Cellular has certain other arm’s length, ordinary business relationships with Verizon Wireless and its
affiliates.
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