8-K

FORM 8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 12, 2006

UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State or other
jurisdiction of
incorporation) 1-9712
(Commission
File Number) 62-1147325
(IRS Employer
Identification No.)

      8410 West Bryn Mawr, Suite 700, Chicago, Illinois      
         (Address of principal executive offices)    60631   
(Zip Code)

Registrant's telephone number, including area code: (773) 399-8900

  Not Applicable  
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

On July 12, 2006, the United States Cellular Corporation ("U.S. Cellular") 2006 Executive Officer Annual Incentive Plan Effective January 1, 2006 ("Executive Incentive Plan") was approved by U.S. Cellular's Chairman of the Board of Directors, who does not participate in such incentive plan.

The purposes of the Executive Incentive Plan are: to provide incentive for the officers of U.S. Cellular to extend their best efforts toward achieving superior results in relation to key business measures; to reward U.S. Cellular's executive officers in relation to their success in meeting and exceeding the performance targets; and to help U.S. Cellular attract and retain talented leaders in positions of critical importance to the success of U.S. Cellular. Eligible participants in the Executive Incentive Plan are executive vice presidents and senior vice presidents of U.S. Cellular. Each participant's target incentive is expressed as a percentage of base salary.

The officer bonus plans of U.S. Cellular are discretionary in nature and are based, in part, on U.S. Cellular's performance, individual performance and individual bonus targets, which contribute to the formation and size of a bonus pool. The total pool is then broken down into Executive Officer and Vice President annual plan pools, allocated at the discretion of the President and CEO. The President and CEO will consider the performance measures and any other information that he deems relevant in determining the pool.

The following performance measures, using weights and definitions as approved by the Chairman, will be considered in evaluating the achievements of the eligible participants for purposes of the Executive Incentive Plan: Customer Addition Equivalents; Customer Defections; Consolidated Revenue; Consolidated Cash Flow; and Return on Capital. The President and CEO determines the actual payout that each officer will receive allocating the bonus pool among officers as he deems appropriate, and is not bound to adhere to any guideline. However, the sum of all participants' actual awards cannot deviate from the total officer pool by plus or minus 18% for 2006. The Chairman of the Board must approve all officer bonuses prior to payout.

The foregoing description of the Executive Incentive Plan is not purported to be complete with respect to the material terms of such plan and is qualified by reference to the complete Executive Incentive Plan for the material terms of such plan, which is filed herewith as Exhibit 10.1 and incorporated by reference herein.

There is no written bonus plan for the President. The bonus of the U.S. Cellular President (chief executive officer) is determined in a manner similar to the foregoing, but with some differences. In addition to the factors described above for all executive officers in general, the Chairman considers compensation paid to chief executive officers of other comparable companies, including those which are divisions or subsidiaries of parent companies. No written or formal list of specific companies is prepared. Instead, the Chairman is provided with information about executive compensation at other companies by the Vice President of Human Resources of TDS. This information includes compensation reported in proxy statements of comparable companies and salary surveys. The Chairman uses these sources and makes a determination of appropriate sources, companies and ranges for the President.

No specific measures of performance are considered determinative in the compensation of the President. As with the other executive officers, all facts and circumstances are taken into consideration by the Chairman in his executive compensation decisions for the President. Ultimately, it is the informed judgment of the Chairman that determines the salary and bonus for the President. With respect to the President's bonus, the Chairman does consider the results of the Executive Incentive Plan and bases the amount of the bonus to a large degree upon the results of U.S. Cellular as measured by the performance objectives set by the Executive Incentive Plan. However, with respect to the President, the relationship of the bonus to such performance measures is not applied mechanically and involves a substantial amount of judgment on the part of the Chairman based on the total mix of information.

2

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

U.S. Cellular, an 81%-owned subsidiary of Telephone and Data Systems, Inc., has a balance of $155 million against its Revolving Credit Facility as of July 13, 2006. As a result of the balance exceeding $150 million, U.S. Cellular has elected to disclose the accumulated balance under such facility, but such disclosure shall not be deemed to be an acknowledgement by U.S. Cellular that such amount is material. The borrowings along with repayments have occurred periodically since September 30, 2005 but the balance outstanding has not been in excess of $150 million between such date and July 13, 2006. On July 13, 2006, U.S. Cellular borrowed $65 million to finance a portion of its capital contribution and advances to Barat Wireless, L.P. and/or its general partner to provide initial funding of Barat Wireless, L.P.'s participation in Auction 66. See Item 8.01 "Other Matters" below for more information on Barat Wireless, L.P. The remaining amounts outstanding under the Revolving Credit Facility were used for general corporate purposes. U.S. Cellular anticipates repaying the amounts with future cash flows from operations or long-term debt financing.

As of July 13, 2006 the borrowings on the Revolving Credit Facility range in maturity from 4 days to 32 days at rates ranging from 5.8% to 5.96%. The notes can be renewed when they come due based on the London InterBank Offered Rate ("LIBOR") plus a contractual spread - 60 basis points at July 13, 2006.

The foregoing description is qualified by reference to the description of the Revolving Credit Facility under Item 1.01 in U.S. Cellular's Current Report on Form 8-K dated December 9, 2004, and a copy of the Revolving Credit Facility, which is included as Exhibit 4.1 of U.S. Cellular's Current Report on such Form 8-K dated December 9, 2004 and is incorporated by reference herein.

Item 8.01. Other Matters.

U.S. Cellular is a limited partner in Barat Wireless, L.P. ("Barat Wireless"), an entity which may participate in the auction of wireless spectrum designated by the FCC as Auction 66, which is scheduled to begin in August 2006. Barat Wireless intends to qualify as a "designated entity" and be eligible for discounts with respect to spectrum purchased in Auction 66.

Barat Wireless is in the process of developing its long-term business and financing plans. As of July 14, 2006, U.S. Cellular has made capital contributions and advances to Barat Wireless and/or its general partner of $79.9 million to provide initial funding of Barat Wireless' participation in Auction 66. U.S. Cellular will consolidate Barat Wireless and Barat Wireless, Inc., the general partner of Barat Wireless, for financial reporting purposes, pursuant to the guidelines of FASB Interpretation No. 46R ("FIN 46R"), as U.S. Cellular anticipates absorbing a majority of Barat Wireless' expected gains or losses. Pending finalization of Barat Wireless' permanent financing plan, and upon request by Barat Wireless, U.S. Cellular may agree to make additional capital contributions and advances to Barat Wireless and/or its general partner.

Item 9.01. Financial Statements and Exhibits.

(d)      Exhibits:

        In accordance with the provisions of Item 601 of Regulation S-K, any Exhibits filed or furnished herewith are set forth on the Exhibit Index attached hereto.

3

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

United States Cellular Corporation
(Registrant)

Date: July 17, 2006

By:	/s/ Kenneth R. Meyers
	Kenneth R. Meyers
	Executive Vice President - Finance,   Chief Financial Officer and Treasurer

EXHIBIT INDEX

The following exhibits are filed or furnished herewith as noted below.

Exhibit Number	Description of Exhibit
10.1	United States Cellular Corporation 2006 Executive Officer Annual Incentive Plan
99.1	Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement

EX-10

Exhibit 10.1

UNITED STATES CELLULAR CORPORATION
2006 EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
Effective January 1, 2006

I.   PURPOSE

• To provide incentive for the officers of U.S. Cellular (USCC) to extend their best efforts towards achieving superior results in relation to key business measures;
• To reward USCC's executive officers in relation to their success in meeting and exceeding the performance targets; and
• To help USCC attract and retain talented leaders in positions of critical importance to the success of the company.

II.  ELIGIBLE PARTICIPANTS AND TARGETS

Executive Vice Presidents and Senior Vice President. Each participant's target incentive is expressed as a percentage of his/her base salary.

III. BONUS POOL

The officer bonus plans of USCC are discretionary in nature, and are based in part, on Company performance, individual performance, and individual bonus targets, which contribute to the formation and size of a bonus pool. The total pool is then broken down into Executive Officer, RSO Vice President, and Regional Vice President annual plan pools, allocated at the discretion of the President and CEO. The President and CEO will consider the performance factors (See Performance Measures in Section IV below) and any other information he deems relevant in determining the pool. This pool is not earned, nor are payouts vested until the bonus payout date. (See Attachment I - Administrative Guidelines)

The President and CEO determines the actual payout that each officer will receive allocating the bonus pool among officers as he deems appropriate, and is not bound to adhere to any guideline. However, the sum of all participants' actual awards cannot deviate from the total officer bonus pool by +/- 18% for 2006. The Chairman of the Board must approve all officer bonuses prior to payout.

IV.  PERFORMANCE MEASURES

The following performance measures, using weights and definitions as approved by the Chairman, will be considered in evaluating the achievements of the officer team for the purposes of this plan. These components were selected as the best measures of USCC's growth and success, and are consistent with those used for other levels of USCC management. Payouts based on each of these measures will be evaluated using the 2006 Officer Annual Incentive Plan Matrices that are approved by the Chairman.

Performance Measures

Growth Factors

* Customer Addition Equivalents
* Customer Defections
* Consolidated Revenue

Profit Factors

* Return on Capital
* Consolidated Cash Flow

V.   MISCELLANEOUS PROVISIONS

Management reserves the right to amend or discontinue the Plan at any time, with or without notice.

There are no oral agreements or understandings between USCC and the participants affecting or relating to this plan not referenced herein. If the participant fails to adhere to the ethical and legal standards as referenced by USCC policy, USCC shall have the right to revoke this program, reduce or eliminate compensation as it applies to the violator, or any other remedy as provided by corporate policy or law.

This program shall not be construed as an employment contract or as a promise of continuing employment between USCC and the associate. Employment with USCC is terminable at will, i.e.; either the participant or USCC may terminate the relationship at any time, with or without cause.

President and CEO Date

Chairman of the Board of Directors Date

Attachment I

ADMINISTRATIVE GUIDELINES

PLAN EFFECTIVE DATES: January 1, 2006 - December 31, 2006

GENERAL ADMINISTRATION: Awards for exempt participants will be based on that associate's base salary as of December 31, 2006.

Awards for non-exempt participants will be based on that associate's regular earnings (regular hours worked + benefit hours) for 2006.

VESTING: The bonus is not 'earned,' and does not vest unless the associate remains employed through the actual bonus payout date. Special rules apply to those associates who retire or die before the actual payout date (see below).

SEPARATION PRIOR TO VESTING DATE: Not eligible for a payout unless separation is because of retirement or death (see below), or unless approved by the President and CEO.

RETIREMENT/DEATH:

During Plan Year: Payout based on a proration for time worked during the plan year (2006), individual performance, and the plan attainment percentage assigned by the President and CEO.

LOA (FMLA):

During Plan Year: Full payout made; no prorations.

LOA (NON-FMLA):

During Plan Year: Payout based on a proration for time worked during the plan year (2006), individual performance, and the plan attainment percentage assigned by the President and CEO.

MILITARY LEAVE: Military leave is considered to be non-FMLA and therefore incentive payouts are subject to the 'non-FMLA guidelines' listed above.

TRANSFERS/PROMOTIONS DURING PLAN YEAR:

Within or Between Annual Plans:

If an associate is promoted or is transferred within or between annual incentive plan(s), no prorations will be made in determining the bonus pool. The pool allocation will be based on the associate's plan as of 12/31/06. The actual bonus payout will be recommended and approved by the President and CEO. It will be based on plan attainment as well as individual performance.

Between an Annual Plan and a Quarterly or Monthly Plan:

Prorated payouts from both positions/plans will be determined by the President and CEO following end of plan year. The following factors will be considered in the determination of the payout: both plans' attainment percentages, individual performance in each job/plan, the last base salary from each position occupied during the plan year (if applicable), target incentive assigned for each position's pay grade, and percentage of time worked in each position/plan during the plan year (2006).

NEW HIRES DURING THE PLAN YEAR: Associates hired during 2006 will be eligible to participate in the Plan on a prorated (percentage of time worked in the year) basis.

The associate must have a start date of at least 11/30/06 in order to be eligible to receive a prorated payout. Any associate hired between 12/01/06 and 12/31/06 will not receive a payout from the 2006 Plan.

TRANSFERS TO OR FROM TDS DURING THE PLAN YEAR: If an associate transfers to/from another TDS business unit, he/she will receive a prorated payout based on the factors listed above.

BONUS PAYOUT DATE: Targeted to take place on or before March 15, 2007

EX-99

Exhibit 99.1

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR CAUTIONARY STATEMENT

This Form 8-K contains statements that are not based on historical fact, including the words "believes," "anticipates," "intends," "expects," and similar words. These statements constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the following risks:

• Intense competition in the markets in which U.S. Cellular operates could adversely affect U.S. Cellular's revenues or increase its costs to compete.
  
  
• Consolidation in the telecommunications industry could adversely affect U.S. Cellular's revenues and increase its costs of doing business.
  
  
• Advances or changes in telecommunications technology, such as Voice over Internet Protocol or WiMAX, could render certain technologies used by U.S. Cellular obsolete, could reduce U.S. Cellular's revenues or could increase its costs of doing business.
  
  
• Changes in the regulatory environment or a failure by U.S. Cellular to timely or fully comply with any regulatory requirements could adversely affect U.S. Cellular's financial condition, results of operations or ability to do business.
  
  
• Changes in U.S. Cellular's enterprise value, changes in the supply or demand of the market for wireless licenses, adverse developments in the business or the industry in which U.S. Cellular is involved and/or other factors could require U.S. Cellular to recognize impairments in the carrying value of U.S. Cellular's license costs, goodwill and/or physical assets.
  
  
• Early redemptions of debt or repurchases of debt, issuances of debt, changes in prepaid forward contracts, changes in operating leases, changes in purchase obligations or other factors or developments could cause the amounts reported under Contractual Obligations in U.S. Cellular's most recent Annual Report on Form 10-K, as updated by the Quarterly Reports on Form 10-Q, to be different from the amounts actually incurred.
  
  
• Changes in accounting standards or U.S. Cellular's accounting policies, estimates and/or in the assumptions underlying the accounting estimates could have an adverse effect on U.S. Cellular's financial condition or results of operations.
  
  
• Settlements, judgments, restraints on its current or future manner of doing business and/or legal costs resulting from pending and future litigation could have an adverse effect on U.S. Cellular's financial condition, results of operations or ability to do business.
  
  
• Costs, integration problems or other factors associated with acquisitions/divestitures of properties and/or licenses and/or expansion of U.S. Cellular's business could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• Changes in various business factors could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• A significant portion of U.S. Cellular's revenues is derived from customers who buy services through independent agents and dealers who market U.S. Cellular's services on a commission basis. If U.S. Cellular's relationships with these agents and dealers are seriously harmed, its wireless revenues could be adversely affected.
  
  
• U.S. Cellular's investments in technologies which are unproven or for which success has not yet been demonstrated may not produce the benefits that U.S. Cellular expects.
  
  
• An inability to obtain or maintain roaming arrangements with other carriers on terms that are acceptable to U.S. Cellular, and/or changes in roaming rates and the lack of standards and roaming agreements for wireless data products, could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• Changes in access to content for data or video services and access to new handsets being developed by vendors, or an inability to manage its supply chain or inventory successfully, could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• A failure by U.S. Cellular's service offerings to meet customer expectations could limit U.S. Cellular's ability to attract and retain customers and have an adverse effect on U.S. Cellular's operations.
  
  

• A failure by U.S. Cellular to complete significant network build-out and system implementation as part of its plans to build out new markets and improve the quality and capacity of its network could have an adverse effect on its operations.
  
  
• A failure by U.S. Cellular's business to acquire adequate radio spectrum could have an adverse effect on U.S. Cellular's business and operations.
  
  
• Financial difficulties of U.S. Cellular's key suppliers or vendors, or termination or impairment of U.S. Cellular's relationship with such suppliers or vendors, could result in a delay or termination of U.S. Cellular's receipt of equipment or services, which could adversely affect U.S. Cellular's business and results of operations.
  
  
• An increase of U.S. Cellular's debt in the future could subject U.S. Cellular to various restrictions and higher interest costs and decrease its cash flows and earnings.
  
  
• An inability to attract and/or retain management, technical, sales and other personnel could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• U.S. Cellular has significant investments in entities that it does not control. Losses in the value of such investments could have an adverse effect on U.S. Cellular's results of operations or financial condition.
  
  
• Changes in guidance or interpretations of accounting requirements, changes in industry practice, identification of errors or changes in management assumptions could require amendments to or restatements of financial information or disclosures included in this or prior filings with the SEC.
  
  
• Uncertainty of access to capital for telecommunications companies, deterioration in the capital markets, other changes in market conditions, changes in U.S. Cellular's credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to U.S. Cellular, which could require U.S. Cellular to reduce its construction, development and acquisition programs.
  
  
• Changes in income tax rates, laws, regulations or rulings, or federal or state tax assessments could have an adverse effect on U.S. Cellular's financial condition or results of operations.
  
  
• War, conflicts, hostilities and/or terrorist attacks or equipment failure, power outages, natural disasters or breaches of network or information technology security could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• Changes in general economic and business conditions, both nationally and in the markets in which U.S. Cellular operates, could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• Changes in facts or circumstances, including new or additional information that affects the calculation of potential liabilities for contingent obligations under guarantees, indemnities or otherwise, could require U.S. Cellular to record charges in excess of amounts accrued in the financial statements, if any, which could have an adverse effect on U.S. Cellular's financial condition or results of operations.
  
  
• Material weaknesses in the effectiveness of internal control over financial reporting could result in inaccurate financial statements or other disclosures or fail to prevent fraud, which could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• The pending SEC investigation regarding the restatement of U.S. Cellular's financial statements could result in substantial expenses, and could result in monetary or other penalties.
  
  
• The possible development of adverse precedent in litigation or conclusions in professional studies to the effect that radio frequency emissions from handsets, wireless data devices and/or cell sites cause harmful health consequences, including cancer or tumors, or may interfere with various electronic medical devices such as pacemakers, could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.
  
  
• U.S. Cellular's assets are concentrated in the U.S. telecommunications industry. As a result, its results of operations may fluctuate based on factors related entirely to conditions in this industry.
  
  
• As U.S. Cellular continues to implement its strategies, there are internal and external factors that could impact its ability to successfully meet its objectives.
  
  
• Any of the foregoing events or other events could cause revenues, customer additions, operating income, capital expenditures and or any other financial or statistical information to vary from U.S. Cellular's forward estimates by a material amount.
  
  
• The market price of U.S. Cellular's Common Shares is subject to fluctuations due to a variety of factors.
  
  
• Certain matters, such as control by TDS and provisions in the U.S. Cellular restated certificate of incorporation, may serve to discourage or make more difficult a change in control of U.S. Cellular.
  
  
• There are potential conflicts of interests between TDS and U.S. Cellular.
  
  

U.S. Cellular undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. Readers should evaluate any statements in light of these important factors.