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United States Cellular Corporation
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cash payments for acquisitions of licenses were $38.2 million, $16.5 million and $122.7 million in 2014,
2013 and 2012, respectively.
Cash received from divestitures in 2014, 2013 and 2012 were as follows:
Cash Received from Divestitures 2014 2013 2012
(Dollars in thousands)
Licenses ................................. $ 91,789 $311,989 $ —
Businesses ............................... 88,053 499,131 49,932
Total .................................... $179,842 $811,120 $49,932
See Note 6—Acquisitions, Divestitures and Exchanges in the Notes to Consolidated Financial Statements
for additional information related to these acquisitions and divestitures.
In 2012, U.S. Cellular invested $120.0 million in U.S. Treasury Notes. U.S. Cellular realized cash proceeds
of $50.0 million, $100.0 million, and $125.0 million in 2014, 2013, and 2012, respectively, related to the
maturities of its investments in U.S. Treasury Notes and corporate notes.
In 2014, cash used for investing activities includes a $60.0 million deposit made by Advantage
Spectrum, L.P., a variable interest entity consolidated by U.S. Cellular, to the FCC for its participation in
Auction 97. See Note 13—Variable Interest Entities in the Notes to Consolidated Financial Statements for
additional information.
Cash Flows from Financing Activities
Cash flows from financing activities include proceeds from and repayments of short-term and long-term
debt, dividends to shareholders, distributions to noncontrolling interests, cash used to repurchase
Common Shares and cash proceeds from reissuance of Common Shares pursuant to stock-based
compensation plans.
In December 2014, U.S. Cellular issued $275.0 million of 7.25% Senior Notes due 2063, and paid related
debt issuance costs of $9.2 million.
On September 10, 2014, U.S. Cellular purchased licenses from Airadigm Communications, Inc.
(‘‘Airadigm’’). TDS owns 100% of the common stock of Airadigm. Upon closing, Airadigm transferred to
U.S. Cellular FCC spectrum licenses and certain tower assets in certain markets in Wisconsin, Iowa,
Minnesota and Michigan, in consideration for $91.5 million in cash. Since both parties to this transaction
are controlled by TDS, U.S. Cellular recorded the transferred assets at Airadigm’s net book value of
$15.2 million. The $76.3 million difference between the consideration paid and the net book value of the
transferred assets was recorded as an Acquisition of licenses in common control transaction cash
outflow from financing activities. See Note 6—Acquisitions, Divestitures and Exchanges in the Notes to
Consolidated Financial Statements for additional information related to this transaction.
On June 25, 2013, U.S. Cellular paid a special cash dividend of $5.75 per share, for an aggregate
amount of $482.3 million, to all holders of U.S. Cellular Common Shares and Series A Common Shares
as of June 11, 2013. U.S. Cellular did not pay any dividends in 2014 or 2012.
Adjusted Free Cash Flow
The following table presents Adjusted free cash flow. Adjusted free cash flow is defined as Cash flows
from operating activities (which includes cash outflows related to the Sprint decommissioning), as
adjusted for cash proceeds from the Sprint Cost Reimbursement (which are included in Cash flows from
investing activities in the Consolidated Statement of Cash Flows), less Cash used for additions to
property, plant and equipment. Adjusted free cash flow is a non-GAAP financial measure which U.S.
Cellular believes may be useful to investors and other users of its financial information in evaluating the
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