U.S. Cellular Reports Strong Operating Results; $.24 of EPS from Operations for Fourth Quarter - Company Financial Information

Cambridge Telcom Report, Jan 31, 2000

United States Cellular Corporation (Amex: USM) reported fourth quarter results today, with strong growth in service revenues and operating cash flow driven by a 19% increase in customers served. Operating results included 149,000 net customer additions, a 13% increase in service revenues to $342.6 million and a 12% increase in operating cash flow to $99.9 million. Net income from operations totaled $21.0 million during the quarter, or $.24 per diluted share.

Fourth Quarter Highlights: -- Customer units increased to 2,602,000, a 19% increase since December 31, 1998. There were no acquisitions or divestitures of customer units during the quarter.

-- Net customer unit activations from marketing channels totaled 149,000in the fourth quarter of 1999 compared to 150,000 activations duringthe same quarter of 1998.

-- Service revenues increased 13% to $342.6 million for the fourth quarterof 1999 compared to $302.3 million for the fourth quarter of 1998.

-- Operating cash flow increased 12% to $99.9 million, representing 29% ofservice revenues, excluding the effect of adding $3.6 million relatedto noncash, stock-based compensation costs.

-- Excluding after-tax gains on the sales of investments, net incomeincreased to $21.0 million from $6.9 million in 1998, primarily due to improvements in USM's operating results in 1999 and an income tax adjustment made in 1998. Including gains, net income increased to $21.0 million from $19.0 million in 1998.

-- Excluding after-tax gains on the sales of investments, earnings per share-diluted increased 167% to $.24 from $.09 in 1998. Including gains, earnings per share-diluted increased to $.24 for the quarter compared to $.22 for the same period in 1998.

-- Late in 1999, USM was designated an Eligible Telecommunications Carrier ("ETC") for certain rural areas in the state of Washington, becoming one of the first wireless companies to receive such status. H. Donald Nelson, President and Chief Executive Officer, commented, "Our fourth quarter results, which included the effects of another strong holiday selling season, cap a year of successful growth and change for U.S. Cellular. 1999's accomplishments include adding 404,000 net new customers, which drove a 22% increase in service revenues and a 27% increase in operating cash flow. "During the year, we enhanced our service offerings by accelerating our digital rollout. At year-end 1999, 22% of our customers used digital services. Our new customer information system served two-thirds of our 2.6 million customers as of that date, enhancing our delivery of customer service to those customers. Also, nearly 90% of our customers are now served by one of our five regional customer service centers. Each of these accomplishments continue to strengthen our Company and improve our long-term position in this rapidly growing industry." Based in Chicago, USM manages and invests in cellular systems throughout the United States. As of December 31, 1999, USM managed operational systems serving 145 markets. FMI: http://www.uscellular.com.

UNITED STATES CELLULAR CORPORATION
                    SUMMARY OPERATING DATA

Quarter Ended12/31/99     9/30/99    6/30/99    3/31/99   12/31/98

Total population
 equivalents (owned
 and acquirable,
 000s)         26,362      26,444     26,241     26,354     26,349

Consolidated Markets:
 Population equivalents
  owned (000s) 24,047      24,047     23,843     23,832     23,752
 Total population
  (000s)       25,044      24,861     24,683     24,683     24,683
Customer
 units      2,602,000   2,453,000  2,364,000  2,270,000  2,183,000
 Market
  penetration  10.39%       9.87%      9.58%      9.20%      8.84%
 Markets in
  operation       139         139        138        138        138
 Cell sites in
  service       2,300       2,235      2,163      2,106      2,065
 Average monthly
  revenue
   per unit    $45.49      $49.73     $50.18     $47.18     $48.02
  Local service
   revenue
    per unit   $31.92      $33.37     $33.76     $31.96     $32.35
  Inbound roaming
   revenue
    per unit   $10.21      $12.66     $11.39     $10.62     $10.78
  Long-distance/other
   revenue
   per unit     $3.36       $3.70      $5.03      $4.60      $4.89
 Total churn rate
  per month      2.3%        2.1%       1.9%       2.1%       2.1%
 Postpay churn rate
  per month      2.0%        1.9%       1.7%       2.0%       2.0%
 Marketing cost per
  gross customer
  unit addition  $353        $358       $351       $319       $324

Balance Sheet Data ($000s):
 Cash and cash
  equivalents$197,823    $184,212   $103,319    $66,441    $52,259
 Accounts
  receivable  195,659     199,823    215,232    149,786    160,262
 All other
 current assets55,301      37,915     37,366     27,159     30,284
 Investment in
  licenses,
   net*     1,156,175   1,161,538  1,150,052  1,198,340  1,200,653
 Marketable equity
  securities* 540,711     504,182    411,085    400,898    300,754
 All other
  investments*135,525     138,826    149,079    148,086    148,258
 Property, plant and
  equipment,
   net      1,071,005   1,079,454  1,063,179  1,043,826  1,010,843
 System
  development
   costs      135,462     138,164    136,873    134,825    127,742
 Other deferred
  charges      12,434      12,807     12,985     13,291     16,581

 Current
  liabilities 226,979     267,346    258,701    252,610    258,273
 Long-term debt -
 Convertible
debentures    296,322     293,949    289,925    285,693    281,487
 7.25% Notes  250,000     250,000    250,000    250,000    250,000
 Deferred
  income taxes401,983     370,626    321,535    304,737    258,123
 Other deferred
  credits       9,199       9,162      8,405      6,613      5,914
 Minority
  interest     40,971      42,305     41,499     41,100     43,609
 Common shareholders'
  equity    2,274,641   2,223,533  2,109,105  2,041,899  1,950,230

Capital Expenditures
 ($000s)      $34,705     $80,893    $77,164    $84,688    $89,449

*Amounts for 1998 have been reclassified for the change in current
 year presentation.

              UNITED STATES CELLULAR CORPORATION
                     FINANCIAL HIGHLIGHTS
                Three Months Ended December 31
 (Unaudited, dollars in thousands, except per share amounts)

                                                Increase (Decrease)
                      1999           1998        Amount   Percent
Operating Revenues
  Service Revenues $342,555       $302,258       $40,297    13.3%
  Equipment Sales    14,488         10,997         3,491    31.7%
                    357,043        313,255        43,788    14.0%
Operating Expenses
 (excluding depreciation
 and amortization)
  System Operations  43,683         50,498        (6,815)  (13.5%)
Marketing and Selling84,196         71,969        12,227    17.0%
Cost of Equipment Sold43,043         30,497        12,546    41.1%
  General and
Administrative       86,258         70,981        15,277    21.5%
                    257,180        223,945        33,235    14.8%

Operating Cash Flow  99,863         89,310        10,553    11.8%

  Depreciation       49,498         49,557           (59)   (0.1%)
  Amortization of
 Intangibles         14,649          9,485         5,164    54.4%
                     64,147         59,042         5,105     8.6%

Operating Income     35,716         30,268         5,448    18.0%

Minority Share of Income(992)      (1,637)          645   (39.4%)
  Investment Income,
   Net of License Cost
Amortization          5,591         10,817        (5,226)  (48.3%)
  Gain on Sale of Cellular
and Other Investments    --         25,395       (25,395)     N/M
  Other Income        5,345           (170)        5,515      N/M

Income Before Interest
 and Income Taxes    45,660         64,673       (19,013)  (29.4%)
Interest Expense      9,983          9,936            47     0.5%
Income Tax Expense   14,684         35,736       (21,052)  (58.9%)
Net Income          $20,993        $19,001        $1,992    10.5%
Weighted Average Common
 and Series A
Common Shares (000s) 87,576         87,358           218     0.2%
Earnings Per Common and
 Series A Common
 Share ("EPS") (Basic)$0.24          $0.22         $0.02     9.1%
Earnings Per Common
 and Series A Common
 Share ("EPS")
  (Diluted)           $0.24         $0.22*         $0.02     9.1%