DEFA14A

 

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):  September 25, 2014

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

Delaware	1-9712	62-1147325
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
8410 West Bryn Mawr, Chicago, Illinois		60631
(Address of principal executive offices)		(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)
x	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 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 26, 2014, United States Cellular Corporation (“U.S. Cellular”) issued a press release disclosing certain changes to its Board of Directors (“Board”).

The following information is being provided by U.S. Cellular pursuant to paragraphs (b) and (d) of Item 5.02 of Form 8-K.

(b)           Information regarding director resignations pursuant to paragraph (b) of Item 5.02 of Form 8-K:

On September 25, 2014, directors whose terms do not expire at the 2015 Annual Meeting of Shareholders executed and delivered Conditional Resignations in connection with the Declassification Amendment, as described under Item 8.01 below, which is incorporated by reference herein.

On September 25, 2014, Gregory P. Josefowicz resigned as a Series A Common Share director, so that he could be reappointed by the Board as a Common Share director as discussed under paragraph (d) below. 

(d)           Information regarding director appointments pursuant to sections (1) through (5) of paragraph (d) of Item 5.02 of Form 8-K:

(1)           On September 25, 2014, Gregory P. Josefowicz was reappointed by the Board as a Class I Common Share director immediately after his resignation as a Series A Common Share director as described in paragraph (b) above.  These actions were taken solely for the purpose of redesignating Mr. Josefowicz from a Series A Common Share director to a Common Share director as discussed below.

Also, as disclosed in the press release attached as Exhibit 99.1, each of the following persons was elected as a director by Telephone and Data Systems, Inc. (“TDS”) as the sole holder of Series A Common Shares to the class indicated (the “New Directors”):

Class I:

Steven T. Campbell,  Executive Vice President – Finance, Chief Financial Officer and Treasurer of U.S. Cellular

Peter L. Sereda, Senior Vice President – Finance and Treasurer of TDS

Class II:

Douglas D. Shuma, Senior Vice President and Controller (chief financial officer and chief accounting officer) of TDS and Chief Accounting Officer of U.S. Cellular

Class III:

Kurt B. Thaus, Senior Vice President and Chief Information Officer of TDS. None of the New Directors is independent.

U.S. Cellular’s Restated Bylaws provide that the size of the Board shall be eleven directors, and that the number of directors may be changed by amendment of the Bylaws or resolution of the Board or by the stockholders.

Prior to the addition of the above directors, there were ten directors.  There was one vacancy on the Board due to the fact that, prior to the above additions, no person had been named to fill the vacancy created by the resignation of Mary N. Dillon in 2013.

On September 25, 2014, the Board increased the number of directors to fourteen, thereby creating four vacancies on the Board.

In connection with the Board action to increase the size of the Board from eleven to fourteen directors, for the reasons described below, Gregory P. Josefowicz, who was previously elected by TDS as the sole holder of Series A Common Shares, was redesignated as a Common Share director, as described above.  After such redesignation, the four vacancies were Series A Common Share directorships.

Following the foregoing actions, pursuant to the requirements of the Current Charter (as defined below), TDS executed a consent as the sole holder of Series A Common Shares to fill the four vacancies with the New Directors.

Mr. Josefowicz is an independent director who previously was elected by TDS as the sole holder of Series A Common Shares.  Mr. Josefowicz was redesignated as a Common Share director for the following reasons.  The Current Charter (as defined below) requires (and the Restated Charter (as defined below) will continue to require) that, at each annual meeting, 25% of the

directors, rounded up, be elected by the holders of Common Shares.  Currently, three of the directors were elected by the holders of Common Shares.  After the increase in the size of the Board to fourteen directors, a total of four directors will be required to be elected by the holders of Common Shares at the next annual meeting (25% x 14 rounded up = 4).  So that all Common Share directors are independent, Mr. Josefowicz was redesignated as a Common Share director.  After such redesignation, the four vacancies were Series A Common Share directorships and were filled by TDS with the New Directors.

Following the foregoing actions, the Board consists of fourteen directors, of whom seven are independent and seven are not independent.  As a controlled company, U.S. Cellular is only required to have at least three independent directors under New York Stock Exchange listing requirements.  With seven independent directors, U.S. Cellular will have more than twice as many independent directors as are required.

The changes to the Board increase the number of non-independent directors on the Board to a more historical level.  Over the past few years, the number of independent directors has increased due to several changes to the Board.  Prior to these recent changes, the Board consisted of a majority of non-independent directors.

These actions were not taken as a result of any planned action or transaction.  They were taken considering that TDS, as controlling shareholder owns over 84% of the equity, 100% of the Series A Common Shares, about 74% of the Common Shares and over 96% of the voting power of U.S. Cellular.  After the changes in the directors, the make-up of the Board will be more proportionate with TDS’ control and ownership interests, considering that U.S. Cellular is TDS’ largest and most significant asset and business.

(2)           None of the New Directors was appointed as a director of U.S. Cellular pursuant to any arrangement or understanding.

(3)           None of the New Directors was appointed as a member of any committee of the U.S. Cellular Board.

(4)           There are no items required to be disclosed by Item 404(a) of Regulation S-K with respect to the New Directors.

(5)           None of the New Directors is a party to any material plan, contract or arrangement with U.S. Cellular or its affiliates that is executory, except that each of the New Directors participates in various TDS or U.S. Cellular compensation plans as disclosed in the TDS Schedule 14A filed on April 18, 2014 or the U.S. Cellular Schedule 14A filed on April 7, 2014, including options and awards as described therein, which are incorporated by reference herein.

A copy of the news release announcing the foregoing, including brief biographies of the New Directors, is attached hereto as Exhibit 99.1 and incorporated by reference herein.  Also, brief biographies of Peter L. Sereda, Douglas D. Shuma and Kurt B. Thaus are hereby incorporated by reference from TDS’ proxy statement for its 2014 annual meeting as filed with the SEC on April 18, 2014, and a brief biography of Steven T. Campbell is incorporated herein by reference from U.S. Cellular’s proxy statement for its 2014 annual meeting as filed with the SEC on April 7, 2014.

Item 8.01.  Other Events

The press release issued on September 26, 2014 also announced proposed changes to the current U.S. Cellular Restated Certificate of Incorporation (“Current Charter”).  On September 26, 2014, U.S. Cellular also filed a preliminary proxy statement with the SEC relating to these proposed changes.

A copy of such preliminary proxy statement, including the proposed Restated Certificate of Incorporation (“Restated Charter”), as filed by U.S. Cellular under cover of Schedule 14A dated September 26, 2014 is incorporated by reference herein.  The following includes a brief summary of the proposed changes.

The proposed changes to the Current Charter include (1) an amendment to declassify the Board so that each director would be elected annually rather than once every three years (the “Declassification Amendment”), (2) an amendment to opt out of Section 203 (“Section 203 Amendment”) of the Delaware General Corporation Law (“DGCL”) and (3) an amendment to correct, update and clean-up the Current Charter (“Ancillary Amendment”) (collectively, the “Charter Amendments”).

The following Charter amendments were approved by the Board on September 25, 2014 before the above-described changes to the Board.

1.             Declassification Amendment

The first proposal is that the Board be declassified so that all directors are elected annually for one-year terms.  Currently, directors are elected for three year terms on a staggered basis.

If the Declassification Amendment is approved, the classes and staggered three-year terms of directors would be eliminated and all of the directors would be elected annually beginning with the 2015 Annual Meeting.

To effect the declassification for all directors as of the 2015 Annual Meeting, directors whose terms do not expire at the 2015 Annual Meeting of Shareholders signed Conditional Resignations as of September 25, 2014.  Subject to shareholder approval and effectiveness of the Declassification Amendment, the Conditional Resignations will become effective at the 2015 Annual Meeting.  As a result, the terms of all directors will cease at the 2015 Annual Meeting of shareholders, regardless of their class, and all directors nominated in 2015 will stand for election for a one-year term until the 2016 Annual Meeting of shareholders.

The terms of the following directors in Class I expire at the 2015 Annual Meeting: Steven T. Campbell, Harry J. Harczack, Jr., Gregory P. Josefowicz, Peter L. Sereda, and Cecelia D. Stewart.  All other directors signed Conditional Resignations. 

Accordingly, all directors will be elected annually on and after the 2015 Annual Meeting of Shareholders.

After the Declassification Amendment becomes effective, shareholders will have the ability to remove any director of USM without cause, at a special meeting of shareholders called for such purpose or by written consent.  This effect is automatic under Delaware law when a Board is declassified.  The declassification of the Board will provide TDS with more flexibility in the election and replacement of members of the Board between annual meetings. However, as stated in the preliminary proxy statement, TDS has indicated that it has no plans of using this Delaware law provision to remove directors.

The Declassification Amendment is described in the preliminary proxy statement under Proposal 1.

2.             Section 203 Amendment

The second proposal would amend the Current Charter to include a new provision in which USM elects not to be governed by Section 203 of the DGCL.

Section 203 of the DGCL is an anti-takeover provision that applies to Delaware corporations. It generally provides that any person or entity who acquires 15% or more of a corporation's voting stock (thereby becoming an "interested stockholder") may not engage in a wide range of transactions (referred to as “business combinations”) with the corporation for a period of three years following the date the person became an interested stockholder, subject to certain exceptions.

TDS has advised that it has no plan or intention of seeking to sell any of its U.S. Cellular shares, and is simply seeking this amendment to provide flexibility.  Since U.S. Cellular would be taking action to amend the Current Charter for the Declassification Amendment and Ancillary Amendment, TDS requests that the Section 203 Amendment be included at the same time to avoid the need to effect this action separately.  As the controlling shareholder of U.S. Cellular, TDS has the power to cause U.S. Cellular to opt out of Section 203 on its own by consent or causing U.S. Cellular to call a special meeting of shareholders for that purpose.  Accordingly, including the Section 203 Amendment together with the Declassification Amendment and the Ancillary Amendment avoids the additional cost and effort to require TDS to take separate action by consent or at a separate special meeting.

If the Section 203 Amendment is approved, a new Article XI will be added to the Restated Certificate of Incorporation which reads as follows: “The corporation shall not be governed by Section 203 of the General Corporation Law of the State of Delaware; provided, however, to the fullest extent permitted by Delaware law, this Article XI shall not be effective until the later of May 17, 2016 (which is the anticipated date of the corporation’s annual meeting of shareholders in 2016) or twelve (12) months after the adoption of this Article XI by the stockholders of the corporation and shall not apply to any business combination between the corporation and any person who became an interested stockholder on or prior to such effectiveness.”

The Section 203 Amendment is described in the preliminary proxy statement under Proposal 2. 

3.             Ancillary Amendment

The third proposal would update certain provisions that are out-of-date, obsolete or inoperative, and would consolidate all prior and current amendments into one Restated Certificate of Incorporation.

The U.S. Cellular Current Charter was last restated in 1983 and was significantly amended in connection with the IPO in 1988.  There has been no update or restatement of the Current Charter since then.

The Ancillary Amendment would not have any impact on the substantive rights of any shareholders of U.S. Cellular.  It is being proposed simply to clean up and update the U.S. Cellular Charter.

The Ancillary Amendment is described in the preliminary proxy statement under Proposal 3.

IMPORTANT INFORMATION: This document is not a solicitation of a proxy from any U.S. Cellular shareholder. Additional information relating to the foregoing proposals to be submitted to U.S. Cellular shareholders is included in U.S. Cellular’s preliminary proxy statement and will be included in U.S. Cellular’s definitive proxy statement when it becomes available. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders and other investors may access such documents without charge when they become available at the SEC’s web site (www.sec.gov) and on the U.S. Cellular web site (www.uscellular.com) in the Investor Relations section on the SEC filing page.  U.S. Cellular and its executive officers, directors and nominees may be deemed to be participants in the solicitation of proxies from U.S. Cellular shareholders in connection with the foregoing proposals. Information regarding the security ownership and other interests of U.S. Cellular’s executive officers and directors is included in U.S. Cellular’s preliminary proxy statement and will be included in U.S. Cellular’s definitive proxy statement when it is available.

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.

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:	September 26, 2014
By:	/s/ Steven T. Campbell
	Steven T. Campbell
	Executive Vice President – Finance,
	Chief Financial Officer and Treasurer

EXHIBIT INDEX
The following exhibits are filed or furnished herewith as noted below.
Exhibit No.	Description
99.1	Press Release dated September 26, 2014
99.2	Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement

EX-99.1

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

U.S. cellular announces expansion of board of directors

Company adds four non-independent directors and plans to require annual director elections

CHICAGO, (Sept. 26, 2014) – United States Cellular Corporation (NYSE:USM) today announced that its Board of Directors approved several amendments to the U.S. Cellular Restated Certificate of Incorporation (“Charter”), and expanded the board to 14 members. The independent directors engaged their own legal counsel and the non-independent members of the Board recused themselves from these approvals.

The changes to the U.S. Cellular board increased the size of the board to 14 members, appointed four new, non-independent Series A Common Share directors, and redesignated Gregory P. Josefowicz from a Series A Common Share director to a Common Share director. After these changes, the ratio of independent to non-independent directors is 1-to-1. 

The changes to the Charter include an amendment to declassify the Board so that each director will be elected annually, rather than every three years; an amendment to opt out of Section 203 of the Delaware General Corporation Law, to provide greater flexibility with respect to sales of U.S. Cellular shares by TDS; and an amendment to update the current Charter. The Charter amendments will be submitted to shareholders at a special meeting of shareholders to be scheduled later in 2014. U.S. Cellular is 84 percent-owned by Telephone and Data Systems, Inc. (NYSE:TDS), which has the voting power to approve the amendments. As a matter of good corporate governance, TDS sought approval of such changes from the independent directors and made certain changes based on discussions with the independent directors.

“Increasing the number of non-independent directors brings the board to a level that is more proportionate with TDS’ significant controlling interest in U.S. Cellular,” said LeRoy T. Carlson, Jr., Chairman of the Board. “Each of the four new directors – Steve Campbell, Peter Sereda, Doug Shuma and Kurt Thaus – brings a tremendous amount of talent and experience to the board that will be valuable as we continue to position U.S. Cellular for long-term success. The changes to the Charter are consistent with trends in corporate governance away from classified boards and with TDS’ majority ownership interest in U.S. Cellular. These actions were not taken as a result or in anticipation of any planned action or transaction.”

Steven T. Campbell serves as U.S. Cellular's executive vice president - finance, chief financial officer and treasurer, a position he has held since 2007. Campbell is responsible for all financial matters for U.S. Cellular, including accounting, financial reporting and transparency, financial planning and analysis, and treasury functions. In addition, his team leads long-term business strategies, risk management, intercarrier business, legal and regulatory affairs, real estate leasing and site services, and supply chain activities. Campbell joined U.S. Cellular in 2005 as vice president and controller. Prior to joining U.S. Cellular, Campbell held senior leadership positions at 3Com Corporation, U.S. Robotics Corporation and Amoco Corporation. He began his finance and accounting career with PricewaterhouseCoopers LLP. A certified public accountant, Campbell has an MBA from the Kellogg School of Management at Northwestern University and a bachelor's degree in accounting from Quincy University.

Peter L. Sereda is TDS’ senior vice president - finance and treasurer, a position he has held since 2011.  Sereda is responsible for long- and short-term financing, cash and investment management, commercial and investment bank relationships, risk and pension asset management, and stock repurchases and other equity capital markets transactions. Sereda joined TDS in 1998 as vice president and treasurer. Prior to joining TDS, Sereda held senior leadership positions with Specialty Foods Corporation and Duchossois Industries, Inc.  Sereda has an MBA in finance and statistics from the University of Chicago Graduate School of Business and a BS in civil engineering and economics from the Massachusetts Institute of Technology.

Douglas D. Shuma is TDS’ senior vice president and controller, a position he has held since 2007. Shuma is responsible for financial reporting; accounting policy and internal controls; tax functions; and budgeting, planning and analysis. Prior to joining TDS, Shuma owned a consulting company for large, publicly traded corporations. Prior to that, he held senior leadership positions with Baxter International, Inc. and Caremark International, Inc. He began his career with PricewaterhouseCoopers LLP. A certified public

accountant, Shuma has an MBA from the Kellogg School of Management at Northwestern University and a BS in accounting science from the University of Illinois at Urbana-Champaign.

Kurt B. Thaus is TDS’ senior vice president and CIO, a position he has held since 2004. He is responsible for all elements of TDS’ information technology function. Prior to joining TDS, Thaus held senior leadership positions with T-Systems North America, Inc., a subsidiary of T-Systems International (Deutsche Telecom) and Waste Management, Inc. Thaus holds an MS in engineering management from Northwestern University and a BS in mechanical engineering from the University of Illinois at Urbana-Champaign.

IMPORTANT INFORMATION: This document is not a solicitation of a proxy from any U.S. Cellular shareholder. Additional information relating to the foregoing proposals to be submitted to U.S. Cellular shareholders is included in U.S. Cellular’s preliminary proxy statement and will be included in U.S. Cellular’s definitive proxy statement when it becomes available. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders and other investors may access such documents without charge when they become available at the SEC’s web site (www.sec.gov) and on the U.S. Cellular web site (www.uscellular.com) in the Investor Relations section on the SEC filing page.  U.S. Cellular and its executive officers, directors and nominees may be deemed to be participants in the solicitation of proxies from U.S. Cellular shareholders in connection with the foregoing proposals. Information regarding the security ownership and other interests of U.S. Cellular’s executive officers and directors is included in U.S. Cellular’s preliminary proxy statement and will be included in U.S. Cellular’s definitive proxy statement when it is available.

About U.S. Cellular

United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to 4.7 million customers in 23 states. The Chicago-based company had 6,400 full- and part-time associates as of June 30, 2014. At the end of the second quarter of 2014, TDS owned 84 percent of U.S. Cellular. For more information about U.S. Cellular, visit uscellular.com. 

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: impacts of any pending acquisition and divestiture transactions,  including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the overall economy; competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets;  pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of products and services offered by U.S. Cellular. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by U.S. Cellular to furnish this press release to the Securities and Exchange Commission (“SEC”), which are incorporated by reference herein.

Media Contacts

Jane McCahon, Vice President, Corporate Relations and Corporate Secretary

312-592-5379

jane.mccahon@tdsinc.com

Julie Mathews, Investor Relations Manager

312-592-5341

julie.mathews@tdsinc.com

Source

United States Cellular Corporation

###

EX-99.2

 

Exhibit 99.2

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

SAFE HARBOR CAUTIONARY STATEMENT

This Form 8-K, including exhibits, contains statements that are not based on historical facts and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995.  All statements, other than statements of historical facts, that address activities, events or developments that U.S. Cellular intends, expects, projects, believes, estimates, plans or anticipates will or may occur in the future are forward-looking statements.  The words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying them.  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 risks, uncertainties and other factors include those set forth below, as more fully described under “Risk Factors” in the most recent filing of U.S. Cellular’s Form 10-K, as updated by any U.S. Cellular Form 10-Q filed subsequent to such Form 10-K.  However, such factors are not necessarily all of the important factors that could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the forward-looking statements contained in this document.  Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements.  U.S. Cellular undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.  You should carefully consider the Risk Factors in the most recent filing of U.S. Cellular’s Form 10-K, as updated by any U.S. Cellular Form 10-Q filed subsequent to such Form 10-K, the following factors and other information contained in, or incorporated by reference into, this Form 8-K to understand the material risks relating to U.S. Cellular’s business.

·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.

·A failure by U.S. Cellular to successfully execute its business strategy (including planned acquisitions, divestitures and exchanges) or allocate resources or capital 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, including any continuing issues relating to the conversion to the new Billing and Operational Support System ("B/OSS") in the third quarter of 2013, could limit U.S. Cellular’s ability to attract and retain customers and could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·U.S. Cellular offers customers the option to purchase certain devices under installment contracts, which could result in higher churn and higher bad debts expense.

·U.S. Cellular’s system infrastructure may not be capable of supporting changes in technologies and services expected by customers, which could result in a loss of existing customers and revenues and impair U.S. Cellular's ability to add new customers and revenues.

·Changes in roaming practices or other factors could cause U.S. Cellular's roaming revenues to decline from current levels and/or impact U.S. Cellular's ability to service its customers in geographic areas where U.S. Cellular does not have its own network, which would have an adverse effect on U.S. Cellular's business, financial condition or results of operations.

·A failure by U.S. Cellular to obtain access to adequate radio spectrum to meet current or anticipated future needs and/or to accurately predict future needs for radio spectrum could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·To the extent conducted by the Federal Communications Commission (“FCC”), U.S. Cellular is likely to participate in FCC auctions of additional spectrum in the future as an applicant or as a noncontrolling partner in another auction applicant and, during certain periods, will be subject to the FCC’s anti-collusion rules, which could have an adverse effect on U.S. Cellular.

·Changes in the regulatory environment or a failure by U.S. Cellular to timely or fully comply with any applicable regulatory requirements could adversely affect U.S. Cellular’s business, financial condition or results of operations.

·Changes in Universal Service Fund (“USF”) funding and/or intercarrier compensation could have an adverse impact on U.S. Cellular’s business, financial condition or results of operations.

1

·An inability to attract and/or retain highly competent 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’s assets are concentrated in the U.S. wireless telecommunications industry. As a result, its results of operations may fluctuate based on factors related primarily to conditions in this industry.

·U.S. Cellular’s lower scale relative to larger competitors could adversely affect its 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.

·Advances or changes in technology could render certain technologies used by U.S. Cellular obsolete, could put U.S. Cellular at a competitive disadvantage, could reduce U.S. Cellular’s revenues or could increase its costs of doing business.

·Complexities associated with deploying new technologies present substantial risk.

·U.S. Cellular is subject to numerous surcharges and fees from federal, state and local governments, and the applicability and the amount of these fees are subject to great uncertainty.

·Performance under device purchase agreements could have a material adverse impact on U.S. Cellular's business, financial condition or results of operations.

·Changes in U.S. Cellular’s enterprise value, changes in the market supply or demand 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 its licenses, goodwill and/or physical assets.

·Costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties 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.

·A significant portion of U.S. Cellular’s revenues is derived from customers who buy services through independent agents and third-party national retailers who market U.S. Cellular’s services on a commission basis. If U.S. Cellular’s relationships with these agents or third-party national retailers are seriously harmed, its business, financial condition or results of operations could be adversely affected.

·U.S. Cellular’s investments in unproven technologies may not produce the benefits that U.S. Cellular expects.

·A failure by U.S. Cellular to complete significant network construction and systems implementation activities as part of its plans to improve the quality, coverage, capabilities and capacity of its network, support and other systems and infrastructure could have an adverse effect on its operations.

·Financial difficulties (including bankruptcy proceedings) or other operational difficulties of U.S. Cellular’s key suppliers, termination or impairment of U.S. Cellular’s relationships with such suppliers, or a failure by U.S. Cellular to manage its supply chain effectively could result in delays or termination of U.S. Cellular’s receipt of required equipment or services, or could result in excess quantities of required equipment or services, any of which could adversely affect 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 financial condition or results of operations.

·A failure by U.S. Cellular to maintain flexible and capable telecommunication networks or information technology, or a material disruption thereof, including breaches of network or information technology security, could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·Wars, conflicts, hostilities and/or terrorist attacks or equipment failures, power outages, natural disasters or other events could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·The market price of U.S. Cellular’s Common Shares is subject to fluctuations due to a variety of factors.

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·Identification of errors in financial information or disclosures could require amendments to or restatements of financial information or disclosures included in this or prior filings with the Securities and Exchange Commission (“SEC”). Such amendments or restatements and related matters, including resulting delays in filing periodic reports with the SEC, could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·The existence of material weaknesses in the effectiveness of internal control over financial reporting could result in inaccurate financial statements or other disclosures or failure to prevent fraud, which 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, claims, litigation or otherwise, could require U.S. Cellular to record charges in excess of amounts accrued in the financial statements, which could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·Disruption in credit or other financial markets, a deterioration of U.S. or global economic conditions or other events could, among other things, impede U.S. Cellular’s access to or increase the cost of financing its operating and investment activities and/or result in reduced revenues and lower operating income and cash flows, which would have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·Uncertainty of U.S. Cellular’s ability to access capital, 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 or acquisition programs.

·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 business, financial condition or results of operations.

·The possible development of adverse precedent in litigation or conclusions in professional studies to the effect that radio frequency emissions from wireless 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.

·Claims of infringement of intellectual property and proprietary rights of others, primarily involving patent infringement claims, could prevent U.S. Cellular from using necessary technology to provide products or services or subject U.S. Cellular to expensive intellectual property litigation or monetary penalties, which could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·There are potential conflicts of interests between TDS and U.S. Cellular.

·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.

·Any of the foregoing events or other events could cause revenues, earnings, capital expenditures and/or any other financial or statistical information to vary from U.S. Cellular’s forward-looking estimates by a material amount.

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