UNITED STATES CELLULAR CORP (Form: 10-Q, Received: 08/06/2020 16:37:50)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-09712

UNITED STATES CELLULAR CORPORATION

(Exact name of Registrant as specified in its charter)



Delaware		62-1147325
(State or other jurisdiction of incorporation or organization)		(IRS 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



Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, $1 par value	USM	New York Stock Exchange
6.95% Senior Notes due 2060	UZA	New York Stock Exchange
7.25% Senior Notes due 2063	UZB	New York Stock Exchange
7.25% Senior Notes due 2064	UZC	New York Stock Exchange



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.			Yes	☒	No	☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).			Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer	☒	Accelerated filer				☐
Non-accelerated filer	☐	Smaller reporting company				☐
		Emerging growth company				☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.						☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).			Yes	☐	No	☒

The number of shares outstanding of each of the issuer's classes of common stock, as of June 30, 2020, is 52,930,800 Common Shares, $1 par value, and 33,005,900 Series A Common Shares, $1 par value.



United States Cellular Corporation

Quarterly Report on Form 10-Q
For the Period Ended June 30, 2020

Index	Page No.

Management Discussion and Analysis of Financial Condition and Results of Operations	1
Executive Overview	1
Terms Used by U.S. Cellular	5
Operational Overview	6
Financial Overview	8
Liquidity and Capital Resources	12
Consolidated Cash Flow Analysis	16
Consolidated Balance Sheet Analysis	17
Supplemental Information Relating to Non-GAAP Financial Measures	18
Application of Critical Accounting Policies and Estimates	20
Recent Accounting Pronouncements	20
Regulatory Matters	20
Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement	21

Risk Factors	23

Quantitative and Qualitative Disclosures About Market Risk	23

Financial Statements (Unaudited)	24
Consolidated Statement of Operations	24
Consolidated Statement of Cash Flows	25
Consolidated Balance Sheet	26
Consolidated Statement of Changes in Equity	28
Notes to Consolidated Financial Statements	32

Controls and Procedures	40

Legal Proceedings	40

Unregistered Sales of Equity Securities and Use of Proceeds	41

Other Information	41

Exhibits	42

Form 10-Q Cross Reference Index	43

Signatures	44

Table of Contents



	United States Cellular Corporation Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

The following discussion and analysis compares United States Cellular Corporation’s (U.S. Cellular) financial results for the three and six months ended June 30, 2020, to the three and six months ended June 30, 2019. It should be read in conjunction with U.S. Cellular’s interim consolidated financial statements and notes included herein, and with the description of U.S. Cellular’s business, its audited consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) included in U.S. Cellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2019. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers.

This report contains statements that are not based on historical facts, including the words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions. These statements constitute and represent “forward looking statements” as this term is defined in 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. See Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement for additional information.

U.S. Cellular uses certain “non-GAAP financial measures” and each such measure is identified in the MD&A. A discussion of the reason U.S. Cellular determines these metrics to be useful and a reconciliation of these measures to their most directly comparable measures determined in accordance with accounting principles generally accepted in the United States of America (GAAP) are included in the Supplemental Information Relating to Non-GAAP Financial Measures section within the MD&A of this Form 10-Q Report.

Table of Contents

General

U.S. Cellular owns, operates, and invests in wireless markets throughout the United States. U.S. Cellular is an 82%-owned subsidiary of Telephone and Data Systems, Inc. (TDS). U.S. Cellular’s strategy is to attract and retain wireless customers through a value proposition comprised of a high-quality network, outstanding customer service, and competitive devices, plans, and pricing, all provided with a community focus.

COVID-19 considerations

The impact of the global spread of coronavirus (COVID-19) on U.S. Cellular's future operations is uncertain. There are many factors, including the severity and duration of the outbreak, as well as other direct and indirect impacts, that are expected to negatively impact U.S. Cellular.

COVID-19 impacts on U.S. Cellular's business for the six months ended June 30, 2020 include a reduction in service revenues and equipment sales, and a reduction in handset subscriber gross additions and defections. The impacts of COVID-19 on this and future periods are expected to negatively affect U.S. Cellular’s results of operations, cash flows and financial position. The extent and duration of these impacts are uncertain due to many factors and could be material. Certain impacts on and actions by U.S. Cellular related to COVID-19 include, but are not limited to, the following:

•

Taking action to keep associates safe, including implementing a work-from-home strategy for employees whose jobs can be performed remotely. In addition, to keep associates, customers, and communities safe, U.S. Cellular temporarily closes retail stores for enhanced cleanings, continues to operate with reduced store hours, and provides associates with personal protective equipment to be worn during customer interactions. U.S. Cellular has also implemented a daily health check process for associates and requires social distancing and mask wearing in all company facilities, including stores. Throughout this period of change, U.S. Cellular has continued serving its customers and ensuring its wireless network remains fully operational.

•

Participated in the FCC Keep Americans Connected Pledge, through June 30, 2020, to not turn-off service or charge late fees due to a customer’s inability to pay their bill due to circumstances related to COVID-19. This resulted in a reduction in non-pay defections, as well as reduced service revenues, for the six months ended June 30, 2020. Non-pay defections are expected to increase in future periods as the FCC Keep Americans Connected Pledge ended on June 30, 2020 and certain accounts that were part of the Pledge are expected to terminate due to non-payment.


•	Waiving overage charges and certain other charges. This resulted in reduced service revenues during the three and six months ended June 30, 2020.

•

Supporting the communities in which U.S. Cellular operates. Through U.S. Cellular’s partnership with the Boys & Girls Clubs, U.S. Cellular has contributed to the Boys & Girls Clubs’ COVID-19 Relief Fund to support children, families and communities. These funds are dispersed directly to more than 50 clubs in U.S. Cellular’s service regions to support the most immediate needs of youth in areas of importance such as providing food for children who rely on their Boys & Girls Clubs for their dinner, care for children of essential workers and first responders, and digital learning resources. In additional to monetary donations, in-person volunteerism has been replaced by virtual volunteerism, with associates participating in events such as reading for the visually impaired and mentoring for students.

•

Recognizing income tax benefits associated with the enactment of the CARES Act. This legislation resulted in a reduction to income tax expense for the three and six months ended June 30, 2020. The CARES Act is also projected to result in a reduction of income tax expense recognized throughout the 2020 tax year as part of the estimated annual effective tax rate, and a cash refund in 2021 of taxes paid in prior years.

•

Monitoring its supply chain to assess impacts to availability and costs of device inventory and network equipment and services, including monitoring the dependency on third parties to continue network related projects. Various states' stay-at-home orders could cause delays in municipal permitting and other contractor work. At this time, U.S. Cellular expects to be able to meet customer demand for devices and services and to be able to continue its 4G LTE network modernization and 5G deployment with no significant disruptions.


•	Tracking increased customer usage and the impact of the removal of data caps. At this time, U.S. Cellular believes its network capacity is sufficient to accommodate expected increased usage.


•	Monitoring roaming behaviors. Both inbound and outbound roaming traffic have been dampened by COVID-19 as wireless customers are reducing travel. The extent to which roaming traffic will be impacted by the pandemic in the future will depend upon governmental mandates and customer behavior in response to the outbreak.

See the following areas within this MD&A for additional discussion of the impacts of COVID-19:


•	Operational Overview


•	Financial Overview — Income tax expense


•	Liquidity and Capital Resources


•	Risk Factors

Table of Contents

OPERATIONS


▪	Serves customers with 4.9 million connections including 4.4 million postpaid, 0.5 million prepaid and 0.1 million reseller and other connections


▪	Operates in 21 states


▪	Employs approximately 5,400 associates


▪	4,208 owned towers


▪	6,673 cell sites in service

Table of Contents

U.S. Cellular Mission and Strategy

U.S. Cellular’s mission is to provide exceptional wireless communication services which enhance consumers’ lives, increase the competitiveness of local businesses, and improve the efficiency of government operations in the mid-sized and rural markets served.

U.S. Cellular plans to continue to execute on its strategies to grow and protect its customer base, grow revenues, drive improvements in the overall cost structure, and invest in its network and system capabilities. Strategic efforts include:


▪	U.S. Cellular offers economical and competitively priced service plans and devices to its customers and is focused on increasing revenues from sales of related products such as accessories and device protection plans and from new services such as home internet. In addition, U.S. Cellular is focused on expanding its solutions available to business and government customers.

▪

U.S. Cellular continues to devote efforts to enhance its network capabilities. VoLTE technology is now available to nearly 90% of U.S Cellular's subscribers, and deployments in additional operating markets are expected later in 2020. VoLTE technology allows customers to utilize a 4G LTE network for both voice and data services and offers enhanced services such as high definition voice and simultaneous voice and data sessions.

▪

U.S. Cellular has launched commercial 5G services in Iowa and Wisconsin and will continue to launch in additional areas throughout 2020 and beyond. 5G technology is expected to help address customers' growing demand for data services as well as create opportunities for new services requiring high speed, reliability and low latency. In addition to the deployment of 5G technology, U.S. Cellular is also modernizing its 4G LTE network to further enhance 4G LTE speeds.


▪	U.S. Cellular assesses its existing wireless interests on an ongoing basis with a goal of improving the competitiveness of its operations and maximizing its long-term return on capital. As part of this strategy, U.S. Cellular actively seeks attractive opportunities to acquire wireless spectrum, including pursuant to FCC auctions such as Auctions 103 and 105.

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Terms Used by U.S. Cellular

The following is a list of definitions of certain industry terms that are used throughout this document:


▪	4G LTE – fourth generation Long-Term Evolution, which is a wireless technology that enables more network capacity for more data per user as well as faster access to data compared to third generation (3G) technology.


▪	5G – fifth generation wireless technology that is expected to help address customers’ growing demand for data services as well as create opportunities for new services requiring high speed and reliability as well as low latency.


▪	Account – represents an individual or business financially responsible for one or multiple associated connections. An account may include a variety of types of connections such as handsets and connected devices.


▪	Auctions 103 and 105 – Auction 103 is an FCC auction of 37, 39, and 47 GHz wireless spectrum licenses that started in December 2019 and concluded in March 2020. Auction 105 is an FCC auction of 3.5 GHz wireless spectrum licenses and bidding commenced in July 2020.


▪	Churn Rate – represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.


▪	Connections – individual lines of service associated with each device activated by a customer. Connections are associated with all types of devices that connect directly to the U.S. Cellular network.


▪	Connected Devices – non-handset devices that connect directly to the U.S. Cellular network. Connected devices include products such as tablets, wearables, modems, and hotspots.


▪	Coronavirus Aid, Relief, and Economic Security (CARES) Act – economic relief package signed into law on March 27, 2020 to address the public health and economic impacts of COVID-19, including a variety of tax provisions.


▪	EBITDA – refers to earnings before interest, taxes, depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted EBITDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.


▪	FCC Keep Americans Connected Pledge – voluntary FCC initiative in response to the COVID-19 pandemic to ensure that Americans do not lose their broadband or telephone connectivity as a result of the exceptional circumstance.


▪	Free Cash Flow – non-GAAP metric defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.


▪	Gross Additions – represents the total number of new connections added during the period, without regard to connections that were terminated during that period.


▪	Net Additions (Losses) – represents the total number of new connections added during the period, net of connections that were terminated during that period.


▪	OIBDA – refers to operating income before depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted OIBDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.


▪	Postpaid Average Revenue per Account (Postpaid ARPA) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.


▪	Postpaid Average Revenue per User (Postpaid ARPU) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid connections and by the number of months in the period.


▪	Retail Connections – the sum of postpaid connections and prepaid connections.


▪	Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the FCC intended to promote universal access to telecommunications services in the United States.


▪	VoLTE – Voice over Long-Term Evolution is a technology specification that defines the standards and procedures for delivering voice communications and related services over 4G LTE networks.

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Operational Overview





As of June 30,		2020	2019
Retail Connections – End of Period
	Postpaid	4,372,000	4,414,000
	Prepaid	496,000	500,000
	Total	4,868,000	4,914,000



	Q2 2020		Q2 2019		Q2 2020 vs. Q2 2019		YTD 2020		YTD 2019		YTD 2020 vs. YTD 2019
Postpaid Activity and Churn
Gross Additions
Handsets	85,000		102,000		(17	)%	175,000		203,000		(14	)%
Connected Devices	44,000		35,000		26	%	86,000		70,000		23	%
Total Gross Additions	129,000		137,000		(6	)%	261,000		273,000		(4	)%
Net Additions (Losses)
Handsets	3,000		(11,000	)	N/M		(17,000	)	(25,000	)	32	%
Connected Devices	9,000		(15,000	)	N/M		3,000		(33,000	)	N/M
Total Net Additions (Losses)	12,000		(26,000	)	N/M		(14,000	)	(58,000	)	76	%
Churn
Handsets	0.71	%	0.97	%			0.83	%	0.98	%
Connected Devices	2.24	%	3.01	%			2.67	%	3.05	%
Total Churn	0.89	%	1.23	%			1.05	%	1.24	%

N/M - Percentage change not meaningful

Total postpaid handset net additions increased for the three months ended June 30, 2020, when compared to the same period last year. Handset defections decreased as a result of lower consumer switching activity related to COVID-19, as well as a reduction in non-pay defections related to the FCC Keep Americans Connected Pledge. Partially offsetting the decrease in defections were lower gross additions resulting from lower consumer switching activity.

Total postpaid handset net additions increased for the six months ended June 30, 2020, when compared to the same period last year. Handset defections decreased as a result of lower consumer switching activity related to COVID-19, as well as a reduction in non-pay defections related to the FCC Keep Americans Connected Pledge. Partially offsetting the decrease in defections were lower gross additions resulting from aggressive industry-wide competition in the first quarter of 2020 and lower consumer switching activity in the second quarter of 2020.

Total postpaid connected device net additions increased for the three and six months ended June 30, 2020, when compared to the same period last year. The increase is due to (i) a decrease in tablet defections and (ii) an increase in demand for internet related products given a need for remote connectivity related to COVID-19.

Non-pay defections are expected to increase in future periods as the FCC Keep Americans Connected Pledge ended on June 30, 2020 and certain accounts that were part of the Pledge are expected to terminate due to non-payment.

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Postpaid Revenue



	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020 vs. 2019		2020		2019		2020 vs. 2019
Average Revenue Per User (ARPU)	$	46.24	$	45.90	1	%	$	46.72	$	45.66	2	%
Average Revenue Per Account (ARPA)	$	120.70	$	119.46	1	%	$	121.80	$	119.15	2	%

Postpaid ARPU and Postpaid ARPA increased for the three and six months ended June 30, 2020, when compared to the same period last year, due primarily to (i) having proportionately fewer tablet connections, which on a per-unit basis contribute less revenue than smartphone devices, (ii) an increase in regulatory recovery revenues, and (iii) an increase in device protection plan revenues. These increases were partially offset by the impact of waiving overage charges, a measure U.S. Cellular has taken to assist customers during the COVID-19 pandemic.

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Financial Overview



	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020 vs. 2019		2020		2019			2020 vs. 2019
(Dollars in millions)
Retail service	$	658	$	662	(1	)%	$	1,329	$	1,322		1	%
Inbound roaming	41		44		(8	)%	77		78			–
Other	54		51		7	%	109		98			10	%
Service revenues	753		757		(1	)%	1,515		1,498			1	%
Equipment sales	220		216		2	%	422		441			(4	)%
Total operating revenues	973		973		–		1,937		1,939			–

System operations (excluding Depreciation, amortization and accretion reported below)	197		193		2	%	377		369			2	%
Cost of equipment sold	218		224		(3	)%	435		458			(5	)%
Selling, general and administrative	323		344		(6	)%	659		669			(2	)%
Depreciation, amortization and accretion	178		177		1	%	354		345			3	%
(Gain) loss on asset disposals, net	4		5		(19	)%	8		7			7	%
(Gain) loss on sale of business and other exit costs, net	—		—		N/M		—		(2		)	N/M
(Gain) loss on license sales and exchanges, net	—		—		N/M		—		(2		)	N/M
Total operating expenses	920		943		(2	)%	1,833		1,844			(1	)%

Operating income	$	53	$	30	74	%	$	104	$	95		9	%

Net income	$	69	$	32	N/M		$	141	$	90		56	%
Adjusted OIBDA (Non-GAAP)¹	$	235	$	212	11	%	$	466	$	443		5	%
Adjusted EBITDA (Non-GAAP)¹	$	280	$	257	9	%	$	560	$	537		4	%
Capital expenditures²	$	168	$	195	(14	)%	$	405	$	297		36	%

N/M - Percentage change not meaningful


¹	Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.


²	Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.

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Operating Revenues

Three Months Ended June 30, 2020 and 2019

(Dollars in millions)

Operating Revenues

Six Months Ended June 30, 2020 and 2019

(Dollars in millions)

Service revenues consist of:


▪	Retail Service - Charges for voice, data and value-added services and recovery of regulatory costs


▪	Inbound Roaming - Charges to other wireless carriers whose customers use U.S. Cellular’s wireless systems when roaming


▪	Other Service - Amounts received from the Federal USF, tower rental revenues, and miscellaneous other service revenues

Equipment revenues consist of:


▪	Sales of wireless devices and related accessories to new and existing customers, agents, and third-party distributors

Key components of changes in the statement of operations line items were as follows:

Total operating revenues

Retail service revenues decreased for the three months ended June 30, 2020, primarily as a result of a decline in the average number of subscribers compared to the second quarter of 2019, partially offset by the increase in Postpaid ARPU as previously discussed in the Operational Overview section. Retail service revenues increased for the six months ended June 30, 2020, primarily as a result of the increase in Postpaid ARPU, partially offset by a decline in subscribers.

Inbound roaming revenues decreased for the three and six months ended June 30, 2020, primarily driven by lower data revenues, with lower rates partially offset by higher usage.

Other service revenues increased for the three and six months ended June 30, 2020, largely due to an increase in tower rental revenues.

Equipment sales revenues increased for the three months ended June 30, 2020, due primarily to an increase in device sales volumes. This was partially offset by lower average revenue per device and a decrease in accessory sales. Equipment sales revenues decreased for the six months ended June 30, 2020, due primarily to lower average revenue per device and a decrease in accessory sales, partially offset by an increase in device sales volumes.

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System operations expenses

System operations expenses increased for the three and six months ended June 30, 2020, due to increases in cell site rent expense, non-capitalizable costs to add network capacity, and costs to decommission network assets. Such factors were partially offset by a decrease in roaming expense as a result of lower data rates, partially offset by higher data roaming usage.

Cost of equipment sold

Cost of equipment sold decreased for the three and six months ended June 30, 2020, due primarily to (i) lower average cost per device, (ii) a shift in mix from new device sales to used device sales, (iii) a decrease in accessory sales and (iv) a decrease in charges recorded to reduce inventory to its net realizable value. These decreases were partially offset by an increase in volume of devices sold.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased for the three and six months ended June 30, 2020, driven primarily by decreases in bad debts expense, advertising expense and employee related expense.

Depreciation, amortization and accretion

Depreciation, amortization, and accretion increased for the six months ended June 30, 2020, due to accelerated depreciation of certain assets due to changes in network technology, which will continue throughout 2020 and beyond.

Components of Other Income (Expense)



	Three Months Ended June 30,								Six Months Ended June 30,
	2020			2019			2020 vs. 2019		2020			2019			2020 vs. 2019
(Dollars in millions)
Operating income	$	53		$	30		74	%	$	104		$	95		9	%

Equity in earnings of unconsolidated entities	44			40			8	%	89			84			6	%
Interest and dividend income	1			5			(79	)%	5			11			(54	)%
Interest expense	(25		)	(29		)	15	%	(49		)	(58		)	17	%
Other, net	—			—			N/M		—			(1		)	N/M
Total investment and other income	20			16			31	%	45			36			27	%

Income before income taxes	73			46			60	%	149			131			14	%
Income tax expense	4			14			(71	)%	8			41			(81	)%

Net income	69			32			N/M		141			90			56	%
Less: Net income attributable to noncontrolling interests, net of tax	1			1			42	%	2			4			(51	)%
Net income attributable to U.S. Cellular shareholders	$	68		$	31		N/M		$	139		$	86		62	%

N/M - Percentage change not meaningful

Equity in earnings of unconsolidated entities

Equity in earnings of unconsolidated entities represents U.S. Cellular’s share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method. U.S. Cellular’s investment in the Los Angeles SMSA Limited Partnership (LA Partnership) contributed pretax income of $20 million and $19 million for the three months ended June 30, 2020 and 2019, respectively, and $42 million and $40 million for the six months ended June 30, 2020 and 2019, respectively. See Note 8 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.

Interest and dividend income

Interest and dividend income decreased for the three and six months ended June 30, 2020, driven by lower average investment balances and lower interest rates.

Interest expense

Interest expense decreased for the three and six months ended June 30, 2020, primarily as a result of a higher amount of capitalized interest. Also contributing to the decrease was a $100 million principal prepayment made in October 2019 on a senior term loan.

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Income tax expense

The effective tax rate on Income before income taxes for the three months ended June 30, 2020 and 2019, was 5.5% and 30.1%, respectively. The effective tax rate on Income before income taxes for the six months ended June 30, 2020 and 2019, was 5.2% and 31.0%, respectively. The lower effective tax rate in 2020 as compared to 2019 is due primarily to the income tax benefits of the CARES Act enacted on March 27, 2020.

The CARES Act provides retroactive eligibility of bonus depreciation on qualified improvement property put into service after December 31, 2017 and a 5-year carryback of net operating losses generated in years 2018-2020. As the statutory federal tax rate applicable to certain years within the carryback period is 35%, carryback to those years provides a tax benefit in excess of the current federal statutory rate of 21%, resulting in a reduction of income tax expense. U.S. Cellular projects that the income tax effects of the CARES Act will result in a reduction of income tax expense recognized throughout the 2020 tax year as part of the estimated annual effective tax rate, and a cash refund in 2021 of taxes paid in prior years.

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Liquidity and Capital Resources

Sources of Liquidity

U.S. Cellular operates a capital-intensive business. Historically, U.S. Cellular has used internally-generated funds and also has obtained substantial funds from external sources for general corporate purposes. In the past, U.S. Cellular’s existing cash and investment balances, funds available under its revolving credit and receivables securitization agreements, funds from other financing sources, including a term loan and other long-term debt, and cash flows from operating and certain investing and financing activities, including sales of assets or businesses, provided sufficient liquidity and financial flexibility for U.S. Cellular to meet its normal day-to-day operating needs and debt service requirements, to finance the build-out and enhancement of markets and to fund acquisitions, primarily of wireless spectrum licenses. There is no assurance that this will be the case in the future. See Market Risk for additional information regarding maturities of long-term debt.

U.S. Cellular has incurred negative free cash flow at times in the past and this could occur in the future, and forecasting future cash flow is more challenging with the various risks and uncertainties related to COVID-19. However, U.S. Cellular believes that existing cash and investment balances, funds available under its revolving credit, term loan and receivables securitization agreements, and expected cash flows from operating and investing activities will provide sufficient liquidity for U.S. Cellular to meet its normal day-to-day operating needs and debt service requirements for the coming year. U.S. Cellular will continue to monitor the rapidly changing business and market conditions and plans to take appropriate actions, as necessary, to meet its liquidity needs.

U.S. Cellular may require substantial additional capital for, among other uses, funding day-to-day operating needs including working capital, acquisitions of providers of wireless telecommunications services, wireless spectrum license or system acquisitions, capital expenditures, debt service requirements, the repurchase of shares, or making additional investments. It may be necessary from time to time to increase the size of the existing revolving credit agreement, to put in place new credit agreements, or to obtain other forms of financing in order to fund potential expenditures. U.S. Cellular made payments related to wireless spectrum auctions in 2020 (see Regulatory Matters - Spectrum Auctions). U.S. Cellular also expects annual capital expenditures in 2020 to be higher than in 2019, due primarily to investments to enhance network speed and capacity and to continue deploying VoLTE and 5G technology in its network. U.S. Cellular’s liquidity would be adversely affected if, among other things, U.S. Cellular is unable to obtain financing on acceptable terms, U.S. Cellular makes significant wireless spectrum license purchases, distributions from unconsolidated entities are discontinued or significantly reduced compared to historical levels, or Federal USF and/or other regulatory support payments decline.

U.S. Cellular’s credit rating currently is sub-investment grade. There can be no assurance that sufficient funds will continue to be available to U.S. Cellular or its subsidiaries on terms or at prices acceptable to U.S. Cellular. Insufficient cash flows from operating activities, changes in U.S. Cellular's credit ratings, defaults of the terms of debt or credit agreements, uncertainty of access to capital, deterioration in the capital markets, reduced regulatory capital at banks which in turn limits their ability to borrow and lend, other changes in the performance of U.S. Cellular or in market conditions 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 acquisition, capital expenditure and business development programs, reduce the acquisition of wireless spectrum licenses, and/or reduce or cease share repurchases. Any of the foregoing developments would have an adverse impact on U.S. Cellular’s business, financial condition or results of operations. U.S. Cellular cannot provide assurance that circumstances that could have a material adverse effect on its liquidity or capital resources will not occur.

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Cash and Cash Equivalents

Cash and cash equivalents include cash and money market investments. The primary objective of U.S. Cellular’s Cash and cash equivalents is for use in its operations and acquisition, capital expenditure and business development programs including the purchase of wireless spectrum licenses.

Cash and Cash Equivalents

(Dollars in millions)

At June 30, 2020, U.S. Cellular's cash and cash equivalents totaled $418 million compared to $285 million at December 31, 2019.

The majority of U.S. Cellular’s Cash and cash equivalents are held in bank deposit accounts and in money market funds that purchase only debt issued by the U.S. Treasury or U.S. government agencies.

Financing

In March 2020, U.S. Cellular entered into a new $300 million unsecured revolving credit agreement with certain lenders and other parties. Amounts under the new revolving credit agreement may be borrowed, repaid and reborrowed from time to time until maturity in March 2025. As a result of the new agreement, U.S. Cellular's previous revolving credit agreement due to expire in May 2023 was terminated. As of June 30, 2020, there were no outstanding borrowings under the revolving credit agreement, except for letters of credit, and the unused borrowing capacity was $298 million.

In March 2020, U.S. Cellular amended its senior term loan credit agreement in order to conform the agreement with its revolving credit agreement. There were no significant changes to other key terms of the senior term loan credit agreement. In June 2020, U.S. Cellular amended and restated its senior term loan agreement and increased its borrowing capacity to $300 million. There were no significant changes to other key terms of the U.S. Cellular senior term loan credit agreement.

U.S. Cellular, through its subsidiaries, also has a receivables securitization agreement to permit securitized borrowings using its equipment installment plan receivables. In April 2020, U.S. Cellular borrowed $125 million under its receivables securitization agreement. The unused capacity under this agreement was $75 million as of June 30, 2020, subject to sufficient collateral to satisfy the asset borrowing base provisions of the agreement.

U.S. Cellular believes that it was in compliance with all of the financial covenants and requirements set forth in its revolving credit agreement, senior term loan credit agreement and receivables securitization agreement as of June 30, 2020.

U.S. Cellular has an effective shelf registration statement on Form S-3 to issue senior or subordinated debt securities.

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Capital Expenditures

Capital expenditures (i.e., additions to property, plant and equipment and system development expenditures; excludes wireless spectrum license additions), which include the effects of accruals and capitalized interest, for the six months ended June 30, 2020 and 2019, were as follows:

Capital Expenditures

(Dollars in millions)

U.S. Cellular’s capital expenditures for the six months ended June 30, 2020 and 2019, were $405 million and $297 million, respectively.

Capital expenditures for the full year 2020 are expected to be between $850 million and $950 million. These expenditures are expected to be used principally for the following purposes:


▪	Enhance and maintain U.S. Cellular's network coverage, including continuing to deploy VoLTE technology in certain markets and providing additional speed and capacity to accommodate increased data usage by current customers;


▪	Continue deploying 5G technology in its network; and


▪	Invest in information technology to support existing and new services and products.

U.S. Cellular intends to finance its capital expenditures for 2020 using primarily Cash flows from operating activities, existing cash balances and, if required, additional debt financing from its receivables securitization agreement, senior term loan credit agreement, revolving credit agreement and/or other forms of financing.

Acquisitions, Divestitures and Exchanges

U.S. Cellular may be engaged from time to time in negotiations (subject to all applicable regulations) relating to the acquisition, divestiture or exchange of companies, properties or wireless spectrum licenses (including pursuant to FCC auctions). In general, U.S. Cellular may not disclose such transactions until there is a definitive agreement.

In March 2020, the FCC announced by way of public notice that U.S. Cellular was the provisional winning bidder for 237 wireless spectrum licenses in the 37, 39 and 47 GHz bands (Auction 103) for $146 million. U.S. Cellular paid $24 million of this amount in the three months ended March 31, 2020 and substantially all of the remainder in April 2020. In June 2020, the wireless spectrum licenses from Auction 103 were granted by the FCC.

Variable Interest Entities

U.S. Cellular consolidates certain “variable interest entities” as defined under GAAP. See Note 10 — Variable Interest Entities in the Notes to Consolidated Financial Statements for additional information related to these variable interest entities. U.S. Cellular may elect to make additional capital contributions and/or advances to these variable interest entities in future periods in order to fund their operations.

Common Share Repurchase Program

During the six months ended June 30, 2020, U.S. Cellular repurchased 803,836 Common Shares for $23 million at an average cost per share of $29.00. As of June 30, 2020, the total cumulative amount of U.S. Cellular Common Shares authorized to be repurchased is 4,507,000. For additional information related to the current repurchase authorization, see Unregistered Sales of Equity Securities and Use of Proceeds.

Contractual and Other Obligations

There were no material changes outside the ordinary course of business between December 31, 2019 and June 30, 2020, to the Contractual and Other Obligations disclosed in MD&A included in U.S. Cellular’s Form 10-K for the year ended December 31, 2019. In April 2020, U.S. Cellular borrowed $125 million under its receivables securitization agreement.

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Off-Balance Sheet Arrangements

U.S. Cellular had no transactions, agreements or other contractual arrangements with unconsolidated entities involving “off-balance sheet arrangements,” as defined by SEC rules, that had or are reasonably likely to have a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources.

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Consolidated Cash Flow Analysis

U.S. Cellular operates a capital-intensive business. U.S. Cellular makes substantial investments to acquire wireless spectrum licenses and properties and to construct and upgrade wireless telecommunications networks and facilities as a basis for creating long-term value for shareholders. In recent years, rapid changes in technology and new opportunities have required substantial investments in potentially revenue‑enhancing and cost-saving upgrades to U.S. Cellular’s networks. Cash flows may fluctuate from quarter to quarter and year to year due to seasonality, the timing of acquisitions and divestitures, capital expenditures and other factors. The following discussion summarizes U.S. Cellular's cash flow activities for the six months ended June 30, 2020 and 2019.

2020 Commentary

U.S. Cellular’s Cash, cash equivalents and restricted cash increased $145 million. Net cash provided by operating activities was $692 million due to net income of $141 million adjusted for non-cash items of $441 million, distributions received from unconsolidated entities of $90 million including $43 million in distributions from the LA Partnership, and changes in working capital items which increased net cash by $20 million. The working capital changes were primarily influenced by timing of vendor payments and collections of customer and agent receivables, partially offset by tax impacts from the CARES Act and annual employee bonus payments.

Cash flows used for investing activities were $631 million. Cash paid for additions to property, plant and equipment totaled $471 million. Cash payments for wireless spectrum license acquisitions were $144 million.

Cash flows provided by financing activities were $84 million, reflecting the $125 million borrowed under the receivables securitization agreement, partially offset by the repurchase of $23 million of Common Shares.

2019 Commentary

U.S. Cellular’s Cash, cash equivalents and restricted cash decreased $51 million. Net cash provided by operating activities was $476 million due to net income of $90 million plus non-cash items of $366 million and distributions received from unconsolidated entities of $76 million, including $33 million in distributions from the LA Partnership. This was offset by changes in working capital items which decreased net cash by $56 million. The primary working capital changes were a reduction in accrued compensation reflecting annual employee bonus payments and a decline in the amounts due to agents driven by lower sales volume.

Cash flows used for investing activities were $506 million. Cash paid for additions to property, plant and equipment totaled $282 million. Cash payments for wireless spectrum license acquisitions were $255 million. These were partially offset by Cash received from divestitures and exchanges of $32 million.

Cash flows used for financing activities were $21 million, reflecting ordinary activity such as the scheduled repayments of debt.

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Consolidated Balance Sheet Analysis

The following discussion addresses certain captions in the consolidated balance sheet and changes therein. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes. Changes in financial condition during 2020 were as follows:

Income taxes receivable

Income taxes receivable increased $76 million primarily reflecting future tax refunds attributable to the expected carryback of 2020 net operating losses, as allowed under the CARES Act which was enacted in March 2020.

Deferred income tax liability, net

Deferred income tax liability, net increased $106 million due primarily to full deductibility for tax purposes of qualified property placed in service during the current year.

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Supplemental Information Relating to Non-GAAP Financial Measures

U.S. Cellular sometimes uses information derived from consolidated financial information but not presented in its financial statements prepared in accordance with GAAP to evaluate the performance of its business. Specifically, U.S. Cellular has referred to the following measures in this Form 10-Q Report:


▪	EBITDA


▪	Adjusted EBITDA


▪	Adjusted OIBDA


▪	Free cash flow

Certain of these measures are considered “non-GAAP financial measures” under U.S. Securities and Exchange Commission Rules. Following are explanations of each of these measures.

EBITDA, Adjusted EBITDA and Adjusted OIBDA

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation below. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under GAAP and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. U.S. Cellular does not intend to imply that any such items set forth in the reconciliation below are non-recurring, infrequent or unusual; such items may occur in the future.

Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income and Operating income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of U.S. Cellular’s operating results before significant recurring non-cash charges, gains and losses, and other items as presented below as they provide additional relevant and useful information to investors and other users of U.S. Cellular’s financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Operating income.

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	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
(Dollars in millions)
Net income (GAAP)	$	69	$	32	$	141	$	90
Add back:
Income tax expense	4		14		8		41
Interest expense	25		29		49		58
Depreciation, amortization and accretion	178		177		354		345
EBITDA (Non-GAAP)	276		252		552		534
Add back or deduct:
(Gain) loss on asset disposals, net	4		5		8		7
(Gain) loss on sale of business and other exit costs, net	—		—		—		(2		)
(Gain) loss on license sales and exchanges, net	—		—		—		(2		)
Adjusted EBITDA (Non-GAAP)	280		257		560		537
Deduct:
Equity in earnings of unconsolidated entities	44		40		89		84
Interest and dividend income	1		5		5		11
Other, net	—		—		—		(1		)
Adjusted OIBDA (Non-GAAP)	235		212		466		443
Deduct:
Depreciation, amortization and accretion	178		177		354		345
(Gain) loss on asset disposals, net	4		5		8		7
(Gain) loss on sale of business and other exit costs, net	—		—		—		(2		)
(Gain) loss on license sales and exchanges, net	—		—		—		(2		)
Operating income (GAAP)	$	53	$	30	$	104	$	95

Free Cash Flow

The following table presents Free cash flow, which is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment. 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 liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment.



	Six Months Ended June 30,
	2020		2019
(Dollars in millions)
Cash flows from operating activities (GAAP)	$	692	$	476
Less: Cash paid for additions to property, plant and equipment	471		282
Free cash flow (Non-GAAP)	$	221	$	194

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Application of Critical Accounting Policies and Estimates

U.S. Cellular prepares its consolidated financial statements in accordance with GAAP. U.S. Cellular’s significant accounting policies are discussed in detail in Note 1 — Summary of Significant Accounting Policies and Recent Accounting Pronouncements, Note 2 — Revenue Recognition and Note 10 — Leases in the Notes to Consolidated Financial Statements and U.S. Cellular’s Application of Critical Accounting Policies and Estimates is discussed in detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are included in U.S. Cellular’s Form 10-K for the year ended December 31, 2019.

Recent Accounting Pronouncements

See Note 1 — Basis of Presentation in the Notes to Consolidated Financial Statements for information on recent accounting pronouncements.

Regulatory Matters

5G Fund

Issuance of a Notice of Proposed Rulemaking (NPRM) was approved at the FCC's Open Meeting on April 23, 2020, seeking comment on a proposal to create a new fund for 5G deployment in rural areas. The proposal includes a 5G fund for rural areas, which would be implemented through a two-phase competitive process, using multi-round auctions to award support to the provider willing to serve each area at required performance levels for the lowest amount of support. The proposed funding is $9 billion to be disbursed over ten years. The proposal seeks comments on the timing for the auction, the approach for determining eligible areas, minimum speed requirements, and a transition plan from legacy support to 5G fund support. The NPRM proposes that the 5G fund be in lieu of the previously proposed fund (the Phase II Connect America Mobility Fund) for the development of 4G LTE.

U.S. Cellular cannot predict at this time when the 5G fund auction will occur, if ever, when the phase down period for its existing legacy support from the Federal USF will commence, or whether the 5G fund auction will provide opportunities to U.S. Cellular to offset any loss in existing support.

FCC Rulemaking - Restoring Internet Freedom

In December 2017, the FCC approved rules reversing or revising decisions made in the FCC’s 2015 Open Internet and Title II Order (Restoring Internet Freedom). The 2017 action reversed the FCC’s 2015 decision to reclassify Broadband Internet Access Services as telecommunications services subject to regulation under Title II of the Telecommunications Act. The 2017 action also reversed the FCC’s 2015 restrictions on blocking, throttling and paid prioritization, and modified transparency rules relating to such practices. Several parties filed suit in federal court challenging the 2017 actions. On October 1, 2019, the Court of Appeals for the D.C. Circuit issued an order reaffirming the FCC in most respects, but limiting the FCC's ability to preempt state and local net neutrality laws. On February 19, 2020, the FCC issued a Public Notice seeking comment on three issues under further consideration by the FCC based on a recent D.C. Circuit decision.

A number of states, including certain states in which U.S. Cellular operates, have adopted or considered laws intended to reinstate aspects of the foregoing net neutrality regulations that were reversed or revised by the FCC in 2017. To the extent such laws are enacted, it is expected that legal proceedings will be pursued challenging such laws, subject now to the DC Circuit ruling limiting the FCC's preemptive authority in this matter. U.S. Cellular cannot predict the outcome of these proceedings or the impact on its business.

Spectrum Auctions

On July 11, 2019, the FCC released a Public Notice establishing procedures for an auction offering wireless spectrum licenses in the 37, 39 and 47 GHz bands (Auction 103). On March 12, 2020, the FCC announced by public notice that U.S. Cellular was the provisional winning bidder for 237 wireless spectrum licenses for a purchase price of $146 million. In June 2020, the wireless spectrum licenses from Auction 103 were granted by the FCC.

On March 2, 2020, the FCC released a Public Notice establishing procedures for an auction offering wireless spectrum licenses in the 3.5 GHz band (Auction 105). On May 5, 2020, U.S. Cellular filed an application to participate in Auction 105 and on July 1, 2020, the FCC announced that U.S. Cellular was a qualified bidder for the auction. Bidding commenced on July 23, 2020.

Rural Digital Opportunity Fund

On January 30, 2020, the FCC adopted the Rural Digital Opportunity Fund Report and Order, which establishes the framework for the Rural Digital Opportunity Fund (Auction 904). Auction 904 is a two phase reverse auction to provide funding for high speed fixed broadband service in underserved rural areas. Phase I is scheduled to begin on October 29, 2020. On July 15, 2020, U.S. Cellular filed an application to participate in Auction 904.

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Private Securities Litigation Reform Act of 1995

Safe Harbor Cautionary Statement

This Form 10-Q, 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, but are not limited to, those set forth below, as more fully described under “Risk Factors” in U.S. Cellular’s Form 10-K for the year ended December 31, 2019 and in this Form 10-Q. Each of the following risks could have a material adverse effect on U.S. Cellular’s business, financial condition or results of operations. 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 U.S. Cellular’s Form 10-K for the year ended December 31, 2019, the following factors and other information contained in, or incorporated by reference into, this Form 10-Q to understand the material risks relating to U.S. Cellular’s business, financial condition or results of operations.


▪	The impact of the COVID-19 pandemic on U.S. Cellular's business is uncertain, but depending on its duration and severity it could have a material adverse effect on U.S. Cellular's business, financial condition or results of operations.


▪	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, spectrum acquisitions, divestitures and exchanges) or allocate resources or capital effectively could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

▪

Uncertainty in U.S. Cellular’s future cash flow and liquidity or the inability to access capital, deterioration in the capital markets, other changes in U.S. Cellular’s performance or 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, reduce the amount of wireless spectrum licenses acquired, and/or reduce or cease share repurchases.


▪	U.S. Cellular has a significant amount of indebtedness which could adversely affect its financial performance and in turn adversely affect its ability to make payments on its indebtedness, comply with terms of debt covenants and incur additional debt.

▪

Changes in roaming practices or other factors could cause U.S. Cellular's roaming revenues to decline from current levels, roaming expenses to increase 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 could 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 FCC, U.S. Cellular may participate in FCC auctions for additional spectrum or for funding in certain Universal Service programs in the future directly or indirectly and, during certain periods, will be subject to the FCC’s anti-collusion rules, which could have an adverse effect on U.S. Cellular.


▪	Failure by U.S. Cellular to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect U.S. Cellular’s business, financial condition or results of operations.


▪	An inability to attract people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on U.S. Cellular's business, financial condition or results of operations.


▪	U.S. Cellular’s assets and revenue are concentrated in the U.S. wireless telecommunications industry. Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry.


▪	U.S. Cellular’s smaller scale relative to larger competitors that may have greater financial and other resources than U.S. Cellular could cause U.S. Cellular to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations.

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▪	Changes in various business factors, including changes in demand, consumer preferences and perceptions, price competition, churn from customer switching activity and other 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 and U.S. Cellular investments in unproven technologies may not produce the benefits that U.S. Cellular expects.


▪	U.S. Cellular receives regulatory support and is subject to numerous surcharges and fees from federal, state and local governments, and the applicability and the amount of the support and fees are subject to great uncertainty, which could have an adverse effect 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 spectrum 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 wireless spectrum licenses and/or physical assets.


▪	Costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum 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 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.


▪	Difficulties involving third parties with which U.S. Cellular does business, including changes in U.S. Cellular's relationships with or financial or operational difficulties of key suppliers or independent agents and third party national retailers who market U.S. Cellular’s services, 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, could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.


▪	U.S. Cellular has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, 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, could require U.S. Cellular to record adjustments to amounts reflected 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.


▪	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 or have other consequences.


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

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▪	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.

Risk Factors

In addition to the information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in U.S. Cellular’s Annual Report on Form 10-K for the year ended December 31, 2019, which could materially affect U.S. Cellular’s business, financial condition or future results. The risks described in this Form 10-Q and the Form 10-K for the year ended December 31, 2019, may not be the only risks that could affect U.S. Cellular. Additional unidentified or unrecognized risks and uncertainties could materially adversely affect U.S. Cellular’s business, financial condition and/or operating results. Subject to the foregoing and other than the risk factor set forth below, U.S. Cellular has not identified for disclosure any material changes to the risk factors as previously disclosed in U.S. Cellular’s Annual Report on Form 10-K for the year ended December 31, 2019.

The impact of the COVID-19 pandemic on U.S. Cellular's business is uncertain, but depending on its duration and severity it could have a material adverse effect on U.S. Cellular's business, financial condition or results of operations.

The impact of the recent global spread of COVID-19 on U.S. Cellular's future operations is uncertain. Public health emergencies, such as COVID-19, pose the risk that U.S. Cellular or its associates, agents, partners and suppliers may be unable to conduct business activities for an extended period of time and/or provide the level of service expected. U.S. Cellular's ability to attract customers, maintain an adequate supply chain and execute on its business strategies and initiatives could be negatively impacted by this outbreak. Additionally, COVID-19 has caused and could continue to cause increased unemployment, economic downturn and credit market deterioration, all of which could negatively impact U.S. Cellular. The extent of the impact of COVID-19 on U.S. Cellular's business, financial condition and results of operations will depend on future circumstances, including the severity of the disease, the duration of the outbreak, actions taken by governmental authorities and other possible direct and indirect consequences, all of which are uncertain and cannot be predicted.

Quantitative and Qualitative Disclosures about Market Risk

Market Risk

Refer to the disclosure under Market Risk in U.S. Cellular’s Form 10-K for the year ended December 31, 2019, for additional information, including information regarding required principal payments and the weighted average interest rates related to U.S. Cellular’s Long-term debt. There have been no material changes to such information between December 31, 2019 and June 30, 2020. In April 2020, U.S. Cellular borrowed $125 million under its receivables securitization agreement.

See Note 3 — Fair Value Measurements in the Notes to Consolidated Financial Statements for additional information related to the fair value of U.S. Cellular’s Long-term debt as of June 30, 2020.

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Financial Statements

United States Cellular Corporation

Consolidated Statement of Operations

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
(Dollars and shares in millions, except per share amounts)
Operating revenues
Service	$	753		$	757		$	1,515		$	1,498
Equipment sales	220			216			422			441
Total operating revenues	973			973			1,937			1,939

Operating expenses
System operations (excluding Depreciation, amortization and accretion reported below)	197			193			377			369
Cost of equipment sold	218			224			435			458
Selling, general and administrative	323			344			659			669
Depreciation, amortization and accretion	178			177			354			345
(Gain) loss on asset disposals, net	4			5			8			7
(Gain) loss on sale of business and other exit costs, net	—			—			—			(2		)
(Gain) loss on license sales and exchanges, net	—			—			—			(2		)
Total operating expenses	920			943			1,833			1,844

Operating income	53			30			104			95

Investment and other income (expense)
Equity in earnings of unconsolidated entities	44			40			89			84
Interest and dividend income	1			5			5			11
Interest expense	(25		)	(29		)	(49		)	(58		)
Other, net	—			—			—			(1		)
Total investment and other income	20			16			45			36

Income before income taxes	73			46			149			131
Income tax expense	4			14			8			41
Net income	69			32			141			90
Less: Net income attributable to noncontrolling interests, net of tax	1			1			2			4
Net income attributable to U.S. Cellular shareholders	$	68		$	31		$	139		$	86

Basic weighted average shares outstanding	86			87			86			87
Basic earnings per share attributable to U.S. Cellular shareholders	$	0.79		$	0.36		$	1.62		$	0.99

Diluted weighted average shares outstanding	87			88			87			88
Diluted earnings per share attributable to U.S. Cellular shareholders	$	0.78		$	0.35		$	1.59		$	0.97

The accompanying notes are an integral part of these consolidated financial statements.

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United States Cellular Corporation

Consolidated Statement of Cash Flows

(Unaudited)



	Six Months Ended June 30,
	2020			2019
(Dollars in millions)
Cash flows from operating activities
Net income	$	141		$	90
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities
Depreciation, amortization and accretion	354			345
Bad debts expense	45			48
Stock-based compensation expense	17			25
Deferred income taxes, net	106			27
Equity in earnings of unconsolidated entities	(89		)	(84		)
Distributions from unconsolidated entities	90			76
(Gain) loss on asset disposals, net	8			7
(Gain) loss on sale of business and other exit costs, net	—			(2		)
(Gain) loss on license sales and exchanges, net	—			(2		)
Other operating activities	—			2
Changes in assets and liabilities from operations
Accounts receivable	23			3
Equipment installment plans receivable	22			(11		)
Inventory	17			(4		)
Accounts payable	55			(7		)
Customer deposits and deferred revenues	(10		)	8
Accrued taxes	(67		)	3
Other assets and liabilities	(20		)	(48		)
Net cash provided by operating activities	692			476

Cash flows from investing activities
Cash paid for additions to property, plant and equipment	(471		)	(282		)
Cash paid for licenses	(144		)	(255		)
Cash received from investments	1			11
Cash paid for investments	(1		)	(11		)
Cash received from divestitures and exchanges	1			32
Advance payments for license acquisitions	(16		)	—
Other investing activities	(1		)	(1		)
Net cash used in investing activities	(631		)	(506		)

Cash flows from financing activities
Issuance of long-term debt	125			—
Repayment of long-term debt	(4		)	(10		)
Common Shares reissued for benefit plans, net of tax payments	(8		)	(8		)
Repurchase of Common Shares	(23		)	—
Payment of debt issuance costs	(4		)	—
Distributions to noncontrolling interests	(1		)	(2		)
Other financing activities	(1		)	(1		)
Net cash provided by (used in) financing activities	84			(21		)

Net increase (decrease) in cash, cash equivalents and restricted cash	145			(51		)

Cash, cash equivalents and restricted cash
Beginning of period	291			583
End of period	$	436		$	532

The accompanying notes are an integral part of these consolidated financial statements.

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United States Cellular Corporation

Consolidated Balance Sheet — Assets

(Unaudited)



	June 30, 2020		December 31, 2019
(Dollars in millions)
Current assets
Cash and cash equivalents	$	418	$	285
Accounts receivable
Customers and agents, less allowances of $69 and $70, respectively	874		919
Roaming	23		27
Affiliated	1		1
Other, less allowances of $2 and $1, respectively	56		63
Inventory, net	145		162
Prepaid expenses	50		50
Income taxes receivable	122		46
Other current assets	29		20
Total current assets	1,718		1,573

Licenses	2,621		2,471

Investments in unconsolidated entities	445		447

Property, plant and equipment
In service and under construction	8,481		8,293
Less: Accumulated depreciation and amortization	6,223		6,086
Property, plant and equipment, net	2,258		2,207

Operating lease right-of-use assets	914		900

Other assets and deferred charges	544		566

Total assets¹	$	8,500	$	8,164

The accompanying notes are an integral part of these consolidated financial statements.

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United States Cellular Corporation

Consolidated Balance Sheet — Liabilities and Equity

(Unaudited)



	June 30, 2020			December 31, 2019
(Dollars and shares in millions, except per share amounts)
Current liabilities
Current portion of long-term debt	$	4		$	8
Accounts payable
Affiliated	9			8
Trade	285			296
Customer deposits and deferred revenues	139			148
Accrued taxes	30			30
Accrued compensation	53			76
Short-term operating lease liabilities	112			105
Other current liabilities	65			79
Total current liabilities	697			750

Deferred liabilities and credits
Deferred income tax liability, net	613			507
Long-term operating lease liabilities	874			865
Other deferred liabilities and credits	346			319

Long-term debt, net	1,625			1,502

Commitments and contingencies

Noncontrolling interests with redemption features	11			11

Equity
U.S. Cellular shareholders’ equity
Series A Common and Common Shares
Authorized 190 shares (50 Series A Common and 140 Common Shares)
Issued 88 shares (33 Series A Common and 55 Common Shares)
Outstanding 86 shares (33 Series A Common and 53 Common Shares)
Par Value ($1.00 per share) ($33 Series A Common and $55 Common Shares)	88			88
Additional paid-in capital	1,646			1,629
Treasury shares, at cost, 2 Common Shares	(70		)	(70		)
Retained earnings	2,657			2,550
Total U.S. Cellular shareholders' equity	4,321			4,197

Noncontrolling interests	13			13

Total equity	4,334			4,210

Total liabilities and equity¹	$	8,500		$	8,164

The accompanying notes are an integral part of these consolidated financial statements.

The consolidated total assets as of June 30, 2020 and December 31, 2019, include assets held by consolidated variable interest entities (VIEs) of $1,101 million and $930 million, respectively, which are not available to be used to settle the obligations of U.S. Cellular. The consolidated total liabilities as of June 30, 2020 and December 31, 2019, include certain liabilities of consolidated VIEs of $21 million and $22 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of U.S. Cellular. See Note 10 — Variable Interest Entities for additional information.

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United States Cellular Corporation

Consolidated Statement of Changes in Equity

(Unaudited)



	U.S. Cellular Shareholders
	Series A Common and Common shares		Additional paid-in capital		Treasury shares			Retained earnings			Total U.S. Cellular shareholders' equity			Noncontrolling interests		Total equity
(Dollars in millions)
March 31, 2020	$	88	$	1,636	$	(92	)	$	2,620		$	4,252		$	12	$	4,264
Cumulative effect of accounting changes	—		—		—			(1		)	(1		)	—		(1		)
Net income attributable to U.S. Cellular shareholders	—		—		—			68			68			—		68
Net income attributable to noncontrolling interests classified as equity	—		—		—			—			—			1		1
Incentive and compensation plans	—		—		22			(30		)	(8		)	—		(8		)
Stock-based compensation awards	—		10		—			—			10			—		10
June 30, 2020	$	88	$	1,646	$	(70	)	$	2,657		$	4,321		$	13	$	4,334

The accompanying notes are an integral part of these consolidated financial statements.

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United States Cellular Corporation

Consolidated Statement of Changes in Equity

(Unaudited)



	U.S. Cellular Shareholders
	Series A Common and Common shares		Additional paid-in capital		Treasury shares			Retained earnings			Total U.S. Cellular shareholders' equity			Noncontrolling interests			Total equity
(Dollars in millions)
March 31, 2019	$	88	$	1,599	$	(63	)	$	2,497		$	4,121		$	13		$	4,134
Cumulative effect of accounting changes	—		—		—			2			2			—			2
Net income attributable to U.S. Cellular shareholders	—		—		—			31			31			—			31
Net income attributable to noncontrolling interests classified as equity	—		—		—			—			—			1			1
Incentive and compensation plans	—		—		13			(21		)	(8		)	—			(8		)
Stock-based compensation awards	—		16		—			—			16			—			16
Distributions to noncontrolling interests	—		—		—			—			—			(1		)	(1		)
June 30, 2019	$	88	$	1,615	$	(50	)	$	2,509		$	4,162		$	13		$	4,175

The accompanying notes are an integral part of these consolidated financial statements.

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United States Cellular Corporation

Consolidated Statement of Changes in Equity

(Unaudited)



	U.S. Cellular Shareholders
	Series A Common and Common shares		Additional paid-in capital		Treasury shares			Retained earnings			Total U.S. Cellular shareholders' equity			Noncontrolling interests			Total equity
(Dollars in millions)
December 31, 2019	$	88	$	1,629	$	(70	)	$	2,550		$	4,197		$	13		$	4,210
Cumulative effect of accounting change	—		—		—			(1		)	(1		)	—			(1		)
Net income attributable to U.S. Cellular shareholders	—		—		—			139			139			—			139
Net income attributable to noncontrolling interests classified as equity	—		—		—			—			—			1			1
Repurchase of Common Shares	—		—		(23		)	—			(23		)	—			(23		)
Incentive and compensation plans	—		—		23			(31		)	(8		)	—			(8		)
Stock-based compensation awards	—		17		—			—			17			—			17
Distributions to noncontrolling interests	—		—		—			—			—			(1		)	(1		)
June 30, 2020	$	88	$	1,646	$	(70	)	$	2,657		$	4,321		$	13		$	4,334

The accompanying notes are an integral part of these consolidated financial statements.

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United States Cellular Corporation

Consolidated Statement of Changes in Equity

(Unaudited)



	U.S. Cellular Shareholders
	Series A Common and Common shares		Additional paid-in capital		Treasury shares			Retained earnings			Total U.S. Cellular shareholders' equity			Noncontrolling interests			Total equity
(Dollars in millions)
December 31, 2018	$	88	$	1,590	$	(65	)	$	2,444		$	4,057		$	10		$	4,067
Cumulative effect of accounting change	—		—		—			2			2			—			2
Net income attributable to U.S. Cellular shareholders	—		—		—			86			86			—			86
Net income attributable to noncontrolling interests classified as equity	—		—		—			—			—			5			5
Incentive and compensation plans	—		—		15			(23		)	(8		)	—			(8		)
Stock-based compensation awards	—		25		—			—			25			—			25
Distributions to noncontrolling interests	—		—		—			—			—			(2		)	(2		)
June 30, 2019	$	88	$	1,615	$	(50	)	$	2,509		$	4,162		$	13		$	4,175

The accompanying notes are an integral part of these consolidated financial statements.

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United States Cellular Corporation

Notes to Consolidated Financial Statements

Note 1 Basis of Presentation

United States Cellular Corporation (U.S. Cellular), a Delaware Corporation, is an 82%-owned subsidiary of Telephone and Data Systems, Inc. (TDS).

The accounting policies of U.S. Cellular conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of U.S. Cellular, subsidiaries in which it has a controlling financial interest, general partnerships in which U.S. Cellular has a majority partnership interest and certain entities in which U.S. Cellular has a variable interest that requires consolidation under GAAP. Intercompany accounts and transactions have been eliminated.

The unaudited consolidated financial statements included herein have been prepared by U.S. Cellular pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, U.S. Cellular believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in U.S. Cellular’s Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2019.

The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of U.S. Cellular’s financial position as of June 30, 2020 and December 31, 2019 and its results of operations and changes in equity for the three and six months ended June 30, 2020 and 2019, and its cash flows for the six months ended June 30, 2020 and 2019. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three and six months ended June 30, 2020 and 2019, equaled net income. These results are not necessarily indicative of the results to be expected for the full year. U.S. Cellular has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2019 except as noted below for the estimation of credit losses.

Restricted Cash

U.S. Cellular presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows as of June 30, 2020 and December 31, 2019.



	June 30, 2020		December 31, 2019
(Dollars in millions)
Cash and cash equivalents	$	418	$	285
Restricted cash included in Other current assets	18		6
Cash, cash equivalents and restricted cash in the statement of cash flows	$	436	$	291

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments and subsequently amended the standard with additional Accounting Standards Updates, collectively referred to as ASC 326. This standard requires entities to use a new forward-looking, expected loss model to estimate credit losses and requires additional disclosures relating to the credit quality of trade and other receivables. U.S. Cellular adopted the provisions of ASC 326 on January 1, 2020, using a modified retrospective method. Under this method, U.S. Cellular applied the new accounting standard only to the most recent period presented, recognizing the cumulative effect of the accounting change, if any, as an adjustment to the beginning balance of retained earnings. Accordingly, prior periods have not been recast to reflect the new accounting standard. The cumulative effect of applying the provisions of ASC 326 had no material impact on retained earnings.

U.S. Cellular’s accounts receivable consist primarily of amounts owed by customers for wireless services and equipment sales, including sales of certain devices and accessories under installment plans, by agents and third-party distributors for sales of equipment to them, by third party vendors and by other wireless carriers whose customers have used U.S. Cellular’s wireless systems.

U.S. Cellular estimates expected credit losses related to accounts receivable balances based on a review of available and relevant information including current economic conditions, projected economic conditions, historical loss experience, account aging, and other factors that could affect collectability. Expected credit losses are determined for each pool of accounts receivable balances that share similar risk characteristics. The allowance for doubtful accounts is the best estimate of the amount of expected credit losses related to existing accounts receivable. U.S. Cellular does not have any off-balance sheet credit exposure related to its customers.

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In August 2018, the FASB issued Accounting Standards Update 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the existing guidance for capitalizing implementation costs for an arrangement that has a software license. The service element of a hosting arrangement will continue to be expensed as incurred. Any capitalized implementation costs will be amortized over the period of the service contract. U.S. Cellular's hosting arrangements that are service contracts consist primarily of software used to perform administrative functions. U.S. Cellular adopted ASU 2018-15 on January 1, 2020, using the prospective method. The adoption of ASU 2018-15 did not have a significant impact on U.S. Cellular's financial position or results of operations.

Note 2 Revenue Recognition

Disaggregation of Revenue

In the following table, U.S. Cellular's revenues are disaggregated by type of service, which represents the relevant categorization of revenues for U.S. Cellular, and timing of recognition. Service revenues are recognized over time and Equipment sales are point in time.



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
(Dollars in millions)
Revenues from contracts with customers:
Retail service	$	658	$	662	$	1,329	$	1,322
Inbound roaming	41		44		77		78
Other service	35		35		71		66
Service revenues from contracts with customers	734		741		1,477		1,466
Equipment sales	220		216		422		441
Total revenues from contracts with customers	954		957		1,899		1,907
Operating lease income	19		16		38		32
Total operating revenues	$	973	$	973	$	1,937	$	1,939

Contract Balances

The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.



	June 30, 2020		December 31, 2019
(Dollars in millions)
Contract assets	$	9	$	7
Contract liabilities	$	151	$	154

Revenue recognized related to contract liabilities existing at January 1, 2020 was $110 million for the six months ended June 30, 2020.

Transaction price allocated to the remaining performance obligations

The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when wireless services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of June 30, 2020 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates.



	Service Revenues
(Dollars in millions)
Remainder of 2020	$	158
2021	116
Thereafter	175
Total	$	449

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Contract Cost Assets

U.S. Cellular expects that commission fees paid as a result of obtaining contracts are recoverable and, therefore, U.S. Cellular defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. The contract cost asset balance related to commission fees and other costs was $123 million at June 30, 2020, and $133 million at December 31, 2019, and was recorded in Other assets and deferred charges in the Consolidated Balance Sheet. Deferred commission fees are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Amortization of contract cost assets was $26 million and $53 million for the three and six months ended June 30, 2020, respectively, and $27 million and $55 million for the three and six months ended June 30, 2019, respectively, and was included in Selling, general and administrative expenses.

Note 3 Fair Value Measurements

As of June 30, 2020 and December 31, 2019, U.S. Cellular did not have any material financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP.

The provisions of GAAP establish a fair value hierarchy that contains three levels for inputs used in fair value measurements. Level 1 inputs include quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets and liabilities in inactive markets. Level 3 inputs are unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. A financial instrument’s level within the fair value hierarchy is not representative of its expected performance or its overall risk profile and, therefore, Level 3 assets are not necessarily higher risk than Level 2 assets or Level 1 assets.

U.S. Cellular has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below.



		June 30, 2020				December 31, 2019
	Level within the Fair Value Hierarchy	Book Value		Fair Value		Book Value		Fair Value
(Dollars in millions)
Cash and cash equivalents	1	$	418	$	418	$	285	$	285
Long-term debt
Retail	2	917		916		917		943
Institutional	2	535		630		534		594
Other	2	208		208		83		83

The fair values of Cash and cash equivalents and Short-term investments approximate their book values due to the short-term nature of these financial instruments. Long-term debt excludes lease obligations, other installment arrangements, the current portion of Long-term debt and debt financing costs. The fair value of “Retail” Long-term debt was estimated using market prices for the 7.25% 2063 Senior Notes, 7.25% 2064 Senior Notes and 6.95% Senior Notes. U.S. Cellular’s “Institutional” debt consists of the 6.7% Senior Notes which are traded over the counter. U.S. Cellular’s “Other” debt consists of a senior term loan credit agreement and receivables securitization agreement. U.S. Cellular estimated the fair value of its Institutional and Other debt through a discounted cash flow analysis using the interest rates or estimated yield to maturity for each borrowing, which ranged from 1.77% to 5.09% and 3.55% to 5.73% at June 30, 2020 and December 31, 2019, respectively.

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Note 4 Equipment Installment Plans

U.S. Cellular sells devices to customers under equipment installment plans over a specified time period. For certain equipment installment plans, after a specified period of time or amount of payments, the customer may have the right to upgrade to a new device and have the remaining unpaid equipment installment contract balance waived, subject to certain conditions, including trading in the original device in good working condition and signing a new equipment installment contract.

The following table summarizes equipment installment plan receivables as of June 30, 2020 and December 31, 2019.



	June 30, 2020			December 31, 2019
(Dollars in millions)
Equipment installment plan receivables, gross	$	948		$	1,008
Allowance for credit losses	(82		)	(84		)
Equipment installment plan receivables, net	$	866		$	924

Net balance presented in the Consolidated Balance Sheet as:
Accounts receivable — Customers and agents (Current portion)	$	562		$	587
Other assets and deferred charges (Non-current portion)	304			337
Equipment installment plan receivables, net	$	866		$	924

U.S. Cellular uses various inputs, including internal data, information from credit bureaus and other sources, to evaluate the credit profiles of its customers. From this evaluation, a credit class is assigned to the customer that determines the number of eligible lines, the amount of credit available, and the down payment requirement, if any. These credit classes are grouped into four credit categories: lowest risk, lower risk, slight risk and higher risk. A customer's assigned credit class is reviewed periodically and a change is made, if appropriate. An equipment installment plan billed amount is considered past due if not paid within 30 days. The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows:



	June 30, 2020										December 31, 2019
	Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total		Lowest Risk		Lower Risk		Slight Risk		Higher Risk		Total
(Dollars in millions)
Unbilled	$	764	$	94	$	22	$	10	$	890	$	812	$	99	$	23	$	8	$	942
Billed — current	36		4		1		1		42		37		5		2		1		45
Billed — past due	9		4		2		1		16		11		6		3		1		21
Total	$	809	$	102	$	25	$	12	$	948	$	860	$	110	$	28	$	10	$	1,008

The balance of the equipment installment plan receivables as of June 30, 2020 on a gross basis by year of origination were as follows:



	2017		2018		2019		2020		Total
(Dollars in millions)
Lowest Risk	$	2	$	139	$	408	$	260	$	809
Lower Risk	—		11		51		40		102
Slight Risk	—		2		12		11		25
Higher Risk	—		1		5		6		12
Total	$	2	$	153	$	476	$	317	$	948

Activity for the six months ended June 30, 2020 and 2019, in the allowance for credit losses for equipment installment plan receivables was as follows:



	June 30, 2020			June 30, 2019
(Dollars in millions)
Allowance for credit losses, beginning of period	$	84		$	77
Bad debts expense	33			38
Write-offs, net of recoveries	(35		)	(35		)
Allowance for credit losses, end of period	$	82		$	80

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Note 5 Income Taxes

The effective tax rate on Income before income taxes was 5.5% and 5.2% for the three and six months ended June 30, 2020, respectively, and 30.1% and 31.0%, for the three and six months ended June 30, 2019, respectively. The lower effective tax rate in 2020 as compared to 2019 is due primarily to the income tax benefits of the CARES Act enacted on March 27, 2020.

Note 6 Earnings Per Share

Basic earnings per share attributable to U.S. Cellular shareholders is computed by dividing Net income attributable to U.S. Cellular shareholders by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share attributable to U.S. Cellular shareholders is computed by dividing Net income attributable to U.S. Cellular shareholders by the weighted average number of Common Shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon the exercise of outstanding stock options and the vesting of performance and restricted stock units.

The amounts used in computing basic and diluted earnings per share attributable to U.S. Cellular shareholders were as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
(Dollars and shares in millions, except per share amounts)
Net income attributable to U.S. Cellular shareholders	$	68	$	31	$	139	$	86

Weighted average number of shares used in basic earnings per share	86		87		86		87
Effects of dilutive securities	1		1		1		1
Weighted average number of shares used in diluted earnings per share	87		88		87		88

Basic earnings per share attributable to U.S. Cellular shareholders	$	0.79	$	0.36	$	1.62	$	0.99

Diluted earnings per share attributable to U.S. Cellular shareholders	$	0.78	$	0.35	$	1.59	$	0.97

Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in weighted average diluted shares outstanding for the calculation of Diluted earnings per share attributable to U.S. Cellular shareholders because their effects were antidilutive. The number of such Common Shares excluded was 1 million for both the three and six months ended June 30, 2020, and less than 1 million for both the three and six months ended June 30, 2019.

Note 7 Intangible Assets

Activity related to Licenses for the six months ended June 30, 2020, is presented below:



	Licenses
(Dollars in millions)
Balance at December 31, 2019	$	2,471
Acquisitions	147
Capitalized interest	3
Balance at June 30, 2020	$	2,621

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Note 8 Investments in Unconsolidated Entities

Investments in unconsolidated entities consist of amounts invested in entities in which U.S. Cellular holds a noncontrolling interest. U.S. Cellular’s Investments in unconsolidated entities are accounted for using either the equity method or measurement alternative method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes.



	June 30, 2020		December 31, 2019
(Dollars in millions)
Equity method investments	$	437	$	440
Measurement alternative method investments	8		7
Total investments in unconsolidated entities	$	445	$	447

The following table, which is based on information provided in part by third parties, summarizes the combined results of operations of U.S. Cellular’s equity method investments.



	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020		2019
(Dollars in millions)
Revenues	$	1,580		$	1,654	$	3,237	$	3,343
Operating expenses	1,093			1,187		2,256		2,402
Operating income	487			467		981		941
Other income (expense), net	(2		)	4		2		(2		)
Net income	$	485		$	471	$	983	$	939

Note 9 Debt

Receivables Securitization Agreement

In April 2020, U.S. Cellular borrowed $125 million under its receivables securitization agreement, which permits securitized borrowings using its equipment installment plan receivables. The interest rate on outstanding borrowings is at a rate of either LIBOR or applicable cost of funds plus 95 basis points. Absent an extension of the receivables securitization agreement, it will terminate in December 2021, at which time any outstanding borrowings will be repaid over a time period based on the collection of equipment installment plan receivables. U.S. Cellular believes that it was in compliance with all of the financial covenants and other requirements set forth in its receivables securitization agreement as of June 30, 2020. As of June 30, 2020, the USCC Master Note Trust held $239 million of assets available to be pledged as collateral for the receivables securitization agreement.

Note 10 Variable Interest Entities

Consolidated VIEs

U.S. Cellular consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. U.S. Cellular reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and U.S. Cellular’s Form 10-K for the year ended December 31, 2019.

During 2017, U.S. Cellular formed USCC EIP LLC (Seller/Sub-Servicer), USCC Receivables Funding LLC (Transferor) and the USCC Master Note Trust (Trust), collectively the special purpose entities (SPEs), to facilitate a securitized borrowing using its equipment installment plan receivables. Under a Receivables Sale Agreement, U.S. Cellular wholly-owned, majority-owned and unconsolidated entities, collectively referred to as “affiliated entities”, transfer device equipment installment plan contracts to the Seller/Sub-Servicer. The Seller/Sub-Servicer aggregates device equipment installment plan contracts, and performs servicing, collection and all other administrative activities related to accounting for the equipment installment plan contracts. The Seller/Sub-Servicer sells the eligible equipment installment plan receivables to the Transferor, a bankruptcy remote entity, which subsequently sells the receivables to the Trust. The Trust, which is bankruptcy remote and isolated from the creditors of U.S. Cellular, will be responsible for issuing asset-backed variable funding notes (Notes), which are collateralized by the equipment installment plan receivables owned by the Trust. Given that U.S. Cellular has the power to direct the activities of these SPEs, and that these SPEs lack sufficient equity to finance their activities, U.S. Cellular is deemed to have a controlling financial interest in the SPEs and, therefore, consolidates them. All transactions with third parties (e.g., issuance of the asset-backed variable funding notes) will be accounted for as a secured borrowing due to the pledging of equipment installment plan contracts as collateral, significant continuing involvement in the transferred assets, subordinated interests of the cash flows, and continued evidence of control of the receivables.

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The following VIEs were formed to participate in FCC auctions of wireless spectrum licenses and to fund, establish, and provide wireless service with respect to any FCC wireless spectrum licenses won in the auctions:


▪	Advantage Spectrum, L.P. (Advantage Spectrum) and Sunshine Spectrum, Inc., the general partner of Advantage Spectrum; and


▪	King Street Wireless, L.P. (King Street Wireless) and King Street Wireless, Inc., the general partner of King Street Wireless.

These particular VIEs are collectively referred to as designated entities. The power to direct the activities that most significantly impact the economic performance of these VIEs is shared. Specifically, the general partner of these VIEs has the exclusive right to manage, operate and control the limited partnerships and make all decisions to carry on the business of the partnerships. The general partner of each partnership needs the consent of the limited partner, an indirect U.S. Cellular subsidiary, to sell or lease certain wireless spectrum licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of these VIEs is shared, U.S. Cellular has the most significant level of exposure to the variability associated with the economic performance of the VIEs, indicating that U.S. Cellular is the primary beneficiary of the VIEs. Therefore, in accordance with GAAP, these VIEs are consolidated.

U.S. Cellular also consolidates other VIEs that are limited partnerships that provide wireless service. A limited partnership is a variable interest entity unless the limited partners hold substantive participating rights or kick-out rights over the general partner. For certain limited partnerships, U.S. Cellular is the general partner and manages the operations. In these partnerships, the limited partners do not have substantive kick-out or participating rights and, further, such limited partners do not have the authority to remove the general partner. Therefore, these limited partnerships also are recognized as VIEs and are consolidated under the variable interest model.

The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in U.S. Cellular’s Consolidated Balance Sheet.



	June 30, 2020		December 31, 2019
(Dollars in millions)
Assets
Cash and cash equivalents	$	18	$	19
Accounts receivable	610		639
Inventory, net	3		6
Other current assets	19		7
Licenses	649		649
Property, plant and equipment, net	108		104
Operating lease right-of-use assets	44		44
Other assets and deferred charges	312		346
Total assets	$	1,763	$	1,814

Liabilities
Current liabilities	$	30	$	32
Long-term operating lease liabilities	40		41
Other deferred liabilities and credits	15		14
Total liabilities	$	85	$	87

Unconsolidated VIEs

U.S. Cellular manages the operations of and holds a variable interest in certain other limited partnerships, but is not the primary beneficiary of these entities and, therefore, does not consolidate them under the variable interest model.

U.S. Cellular’s total investment in these unconsolidated entities was $5 million at both June 30, 2020 and December 31, 2019, and is included in Investments in unconsolidated entities in U.S. Cellular’s Consolidated Balance Sheet. The maximum exposure from unconsolidated VIEs is limited to the investment held by U.S. Cellular in those entities.

Other Related Matters

U.S. Cellular made contributions, loans or advances to its VIEs totaling $88 million and $208 million, during the six months ended June 30, 2020 and 2019, respectively, of which $67 million in 2020 and $184 million in 2019, are related to USCC EIP LLC as discussed above. U.S. Cellular may agree to make additional capital contributions and/or advances to these or other VIEs and/or to their general partners to provide additional funding for operations or the development of wireless spectrum licenses granted in various auctions. U.S. Cellular may finance such amounts with a combination of cash on hand, borrowings under its revolving credit or receivables securitization agreements and/or other long-term debt. There is no assurance that U.S. Cellular will be able to obtain additional financing on commercially reasonable terms or at all to provide such financial support.

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The limited partnership agreement of Advantage Spectrum also provides the general partner with a put option whereby the general partner may require the limited partner, a subsidiary of U.S. Cellular, to purchase its interest in the limited partnership. The general partner’s put option related to its interest in Advantage Spectrum will be exercisable in 2021, and if not exercised at that time, will be exercisable in 2022. The greater of the carrying value of the general partner's investment or the value of the put option, net of any borrowings due to U.S. Cellular, is recorded as Noncontrolling interests with redemption features in U.S. Cellular’s Consolidated Balance Sheet. Also in accordance with GAAP, minority share of income or changes in the redemption value of the put option, net of interest accrued on the loans, are recorded as a component of Net income attributable to noncontrolling interests, net of tax, in U.S. Cellular’s Consolidated Statement of Operations.

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United States Cellular Corporation

Additional Required Information

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

U.S. Cellular maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to U.S. Cellular’s management, including its principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by SEC Rules 13a-15(b), U.S. Cellular carried out an evaluation, under the supervision and with the participation of management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of U.S. Cellular’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, U.S. Cellular’s principal executive officer and principal financial officer concluded that U.S. Cellular’s disclosure controls and procedures were effective as of June 30, 2020, at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes in internal controls over financial reporting that have occurred during the six months ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, U.S. Cellular’s internal control over financial reporting.

Legal Proceedings

In April 2018, the United States Department of Justice (DOJ) notified U.S. Cellular and its parent, TDS, that it was conducting inquiries of U.S. Cellular and TDS under the federal False Claims Act relating to U.S. Cellular’s participation in wireless spectrum license auctions 58, 66, 73 and 97 conducted by the FCC. U.S. Cellular is/was a limited partner in several limited partnerships which qualified for the 25% bid credit in each auction. The investigation arose from civil actions under the Federal False Claims Act brought by private parties. In November and December 2019, following the DOJ’s investigation, the DOJ informed U.S. Cellular and TDS that it would not intervene in the above-referenced actions. Subsequently, the private party plaintiffs filed amended complaints in both actions in the U.S. District Court for the Western District of Oklahoma and are continuing the action on their own. In July 2020, these actions were transferred to the U.S. District Court for the District of Columbia. U.S. Cellular believes that its arrangements with the limited partnerships and the limited partnerships’ participation in the FCC auctions complied with applicable law and FCC rules. At this time, U.S. Cellular cannot predict the outcome of any proceeding.

Refer to the disclosure under Legal Proceedings in U.S. Cellular’s Form 10-K for the year ended December 31, 2019, for additional information. There have been no material changes to such information since December 31, 2019.

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Unregistered Sales of Equity Securities and Use of Proceeds

In November 2009, U.S. Cellular announced by Form 8-K that the Board of Directors of U.S. Cellular authorized the repurchase of up to 1,300,000 additional Common Shares on an annual basis beginning in 2009 and continuing each year thereafter, on a cumulative basis. In December 2016, the U.S. Cellular Board amended this authorization to provide that, beginning on January 1, 2017, the increase in the authorized repurchase amount with respect to a particular year will be any amount from zero to 1,300,000 Common Shares, as determined by the Pricing Committee of the Board of Directors, and that if the Pricing Committee did not specify an additional amount for any year, such additional amount would be zero for such year. The Pricing Committee has not specified any increase in the authorization since that time. The Pricing Committee also was authorized to decrease the cumulative amount of the authorization at any time, but has not taken any action to do so at this time. The authorization provides that share repurchases will be made pursuant to open market purchases, block purchases, private purchases, or otherwise, depending on market prices and other conditions. This authorization does not have an expiration date. U.S. Cellular did not determine to terminate the foregoing Common Share repurchase program, as amended, or cease making further purchases thereunder, during the second quarter of 2020.

The maximum number of shares that may yet be purchased under this program was 4,507,000 as of June 30, 2020. There were no purchases made by or on behalf of U.S. Cellular, and no open market purchases made by any "affiliated purchaser" (as defined by the SEC) of U.S. Cellular, of U.S. Cellular Common Shares during the quarter covered by this Form 10-Q.

Other Information

The following information is being provided to update prior disclosures made pursuant to the requirements of Form 8-K, Item 2.03 — Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

U.S. Cellular did not borrow or repay any cash amounts under its revolving credit agreement in the second quarter of 2020 or through the filing date of this Form 10-Q. U.S. Cellular had no cash borrowings outstanding under its revolving credit agreement as of June 30, 2020, or as of the filing date of this Form 10-Q.

U.S. Cellular did not repay any cash amounts under its senior term loan credit agreement in the second quarter of 2020 or through the filing date of this Form 10-Q.

Further, U.S. Cellular did not repay any cash amounts under its receivables securitization agreement in the second quarter of 2020. In April 2020, U.S. Cellular borrowed $125 million under its receivables securitization agreement.

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Exhibits



Exhibit Number	Description of Documents
Exhibit 4.1	Revolving Credit Agreement, among U.S. Cellular, Toronto Dominion (Texas) LLC, as administrative agent, and the other lenders thereto, dated as of March 2, 2020, including the form of the subsidiary Guaranty and Subordination Agreement is hereby incorporated by reference to Exhibit 4.1 to U.S. Cellular's Current Report on Form 8-K dated March 2, 2020.

Exhibit 4.2	Fourth Amendment to Amended and Restated Credit Agreement, among U.S. Cellular, CoBank, ACB, as administrative agent, and the other lenders thereto, dated as of March 2, 2020 is hereby incorporated by reference to Exhibit 4.2 to U.S. Cellular's Current Report on Form 8-K dated March 2, 2020.

Exhibit 4.3	Second Amended and Restated Credit Agreement among U.S. Cellular, CoBank, ACB as administrative agent, and the lenders thereto, dated as of June 11, 2020 is hereby incorporated by reference to Exhibit 4.1 to U.S. Cellular's Current Report on Form 8-K dated June 11, 2020.

Exhibit 10.1	U.S. Cellular 2020 Executive Officer Annual Incentive Plan effective January 1, 2020, is hereby incorporated by reference to Exhibit 10.1 to U.S. Cellular's Current Report on Form 8-K dated March 23, 2020.

Exhibit 10.2	U.S. Cellular 2020 Officer Annual Incentive Plan effective January 1, 2020, is hereby incorporated by reference to Exhibit 10.2 to U.S. Cellular's Current Report on Form 8-K dated March 23, 2020.

Exhibit 10.3	Letter Agreement between U.S. Cellular and Michael S. Irizarry dated March 31, 2020 is hereby incorporated by reference to Exhibit 10.1 to U.S. Cellular's Current Report on Form 8-K dated March 30, 2020.

Exhibit 10.4	Form of 2013 Long-Term Incentive Plan 2020 Performance Award Agreement for Officers other than the President and CEO.

Exhibit 10.5	2013 Long-Term Incentive Plan 2020 Restricted Stock Unit Award Agreement for U.S. Cellular's President and CEO.

Exhibit 10.6	Letter Agreement between U.S. Cellular and Laurent C. Therivel dated June 1, 2020.

Exhibit 10.7	Consulting Agreement between U.S. Cellular and Steven T. Campbell dated June 19, 2020.

Exhibit 31.1	Principal executive officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.

Exhibit 31.2	Principal financial officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.

Exhibit 32.1	Principal executive officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.

Exhibit 32.2	Principal financial officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.


Exhibit 101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Exhibit 101.SCH	Inline XBRL Taxonomy Extension Schema Document

Exhibit 101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document

Exhibit 101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document

Exhibit 101.LAB	Inline XBRL Taxonomy Label Linkbase Document

Exhibit 101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the inline document.

The foregoing exhibits include only the exhibits that relate specifically to this Form 10-Q or that supplement the exhibits identified in U.S. Cellular’s Form 10-K for the year ended December 31, 2019. Reference is made to U.S. Cellular’s Form 10-K for the year ended December 31, 2019, for a complete list of exhibits, which are incorporated herein except to the extent supplemented or superseded above.

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Form 10-Q Cross Reference Index
Item Number			Page No.
Part I.	Financial Information

	Item 1.	Financial Statements (Unaudited)	24 - 28
		Notes to Consolidated Financial Statements	32 - 37

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1 - 21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

	Item 4.	Controls and Procedures	40

Part II.	Other Information

	Item 1.	Legal Proceedings	40

	Item1A.	Risk Factors	23

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

	Item 5.	Other Information	41

	Item 6.	Exhibits	42

Signatures			44

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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 thereunto duly authorized.



		UNITED STATES CELLULAR CORPORATION
		(Registrant)

Date:	August 6, 2020		/s/ Laurent C. Therivel
			Laurent C. Therivel President and Chief Executive Officer (principal executive officer)

Date:	August 6, 2020		/s/ Douglas W. Chambers
			Douglas W. Chambers Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer)

Date:	August 6, 2020		/s/ Anita J. Kroll
			Anita J. Kroll Chief Accounting Officer (principal accounting officer)

Date:	August 6, 2020		/s/ Jeffrey S. Hoersch
			Jeffrey S. Hoersch Vice President and Controller

Exhibit 10.4

2013 LONG-TERM INCENTIVE PLAN

2020 PERFORMANCE AWARD AGREEMENT

United States Cellular Corporation, a Delaware corporation (the "Company"), hereby grants to the recipient of this award (the "Employee") as of the date (the "Grant Date") set forth in the “Stock Options and Awards” section of the Employee’s Company on-line account with Solium Capital (the “Award Summary”), a Performance Award (the "Award") with a target opportunity equal to the number of shares of Common Stock set forth in the Award Summary. Depending on performance during the Performance Period (for all purposes of this Award Agreement, as defined in accordance with Exhibit A hereto), the Employee may be entitled under this Award Agreement to shares of Common Stock equal to 50% to 200% of the target opportunity, in accordance with Section 2 below. The Award is granted pursuant to the provisions of the United States Cellular Corporation 2013 Long-Term Incentive Plan, as amended from time to time (the “Plan”) and is subject to the restrictions, terms and conditions set forth below. Capitalized terms not defined herein shall have the meanings specified in the Plan.

1. Award Subject to Acceptance

The Award shall become null and void unless the Employee accepts the Award and this Award Agreement either electronically by utilizing the Employee’s Company on-line account with Solium Capital, which is accessed at www.solium.com/login, or in paper format which may be obtained by contacting Mary Beth Richardson.

2. Performance-Based Adjustment

(a) In General. The Award shall be adjusted pursuant to the terms of this Award Agreement and the Plan and based on the achievement of Performance Measures (for all purposes of this Award Agreement, as defined in accordance with Exhibit A hereto and determined in accordance with criteria approved by the Committee) during the Performance Period. Achievement of the Performance Measures shall be determined and certified by the Committee in writing within ninety (90) days following the last day of the Performance Period (the date of such certification, the “Certification Date”). Notwithstanding the foregoing, in no event shall the adjustment of the Award described in this Section 2 cause the number of shares of Common Stock subject to the Award to be less than 50% of the target opportunity as of the Grant Date.

(b) Transfer of Employment during Performance Period. In the event that the Employee transfers employment during the Performance Period from an Employer to an Affiliate that is not an Employer, then the adjustment described in Section 2(a) based on the achievement of Performance Measures during the Performance Period shall be pro-rated for such Employee (regardless of whether such adjustment would increase or decrease the number of shares subject to the Award), with such pro-ration measured by a fraction, of which the numerator is the number of days of the Performance Period during which the Employee’s employment with the Employer continued, and the denominator is 365 (i.e., the total number of days of the Performance Period).

(c) Fractional Shares. Only a whole number of shares of Common Stock may be issued in respect of this Award. If a fractional number of shares of Common Stock is scheduled to be subject to this Award Agreement following adjustment pursuant to this Section 2, such number of shares shall be rounded to the nearest whole number.

(d) Impact of Adjustment. On and after the Certification Date, “Award” for all purposes of this Award Agreement shall mean the Award as adjusted pursuant to this Section 2. To the extent shares of Common Stock subject to the Award are reduced pursuant to this Section 2, then the Award shall be forfeited as it relates to those reduced shares, and the Employee shall have no rights with respect thereto.

3. Restriction Period and Forfeiture

(a) In General. Except as otherwise provided in this Award Agreement, the Award shall become nonforfeitable and the Restriction Period with respect to the Award shall terminate on the third annual anniversary of the Grant Date (the “Three-Year Anniversary Date”), provided that the Employee remains continuously employed by the Employers and Affiliates until the Three-Year Anniversary Date. Within seventy (70) days following the Three-Year Anniversary Date, the Company shall issue to the Employee in a single payment the shares of Common Stock subject to the Award on the Three-Year Anniversary Date.

(b) Death. If the Employee terminates employment with the Employers and Affiliates prior to the Three-Year Anniversary Date by reason of death, then on the date of the Employee’s death the Award (in the case of death prior to the Certification Date, without regard to the adjustment set forth in Section 2, and in the case of death on or following the Certification Date, after the adjustment set forth in Section 2) shall become nonforfeitable and the Restriction Period with respect to the Award shall terminate. Within seventy (70) days following the date of the Employee’s death, the Company shall issue to the Employee’s designated beneficiary in a single payment the shares of Common Stock subject to the Award.

(c) Disability. If the Employee terminates employment with the Employers and Affiliates prior to the Three-Year Anniversary Date by reason of Disability, then on the date of the Employee’s termination of employment the Award (in the case of termination due to Disability prior to the Certification Date, without regard to the adjustment set forth in Section 2, and in the case of termination due to Disability on or following the Certification Date, after the adjustment set forth in Section 2) shall become nonforfeitable and the Restriction Period with respect to the Award shall terminate. The Company shall issue the shares of Common Stock subject to the Award in a single payment within seventy (70) days following the date of the Employee’s termination of employment; provided, however, that if the Award is subject to section 409A of the Code, and if the Employee is a Specified Employee as of the date of his or her termination of employment, then such payment shall be delayed until and made during the seventh calendar month following the calendar month during which the Employee’s termination of employment occurs (or, if earlier, the calendar month following the calendar month of the Employee’s death). For purposes of this Award Agreement, “Disability” shall mean a total physical disability which, in the Committee’s judgment, prevents the Employee from performing substantially his or her employment duties and responsibilities for a continuous period of at least six months.

(d) Retirement at or after Attainment of Age 66. If the Employee terminates employment with the Employers and Affiliates on or after January 1, 2021 but prior to the Three-Year Anniversary Date by reason of retirement at or after attainment of age 66, then on the date of the Employee’s termination of employment the Award (after the adjustment set forth in Section 2) shall become nonforfeitable and the Restriction Period with respect to the Award shall terminate. The Company shall issue the shares of Common Stock subject to the Award in a single payment within seventy (70) days following the date of the Employee’s termination of employment; provided, however, that if the Award is subject to section 409A of the Code, and if the Employee is a Specified Employee as of the date of his or her termination of employment, then such payment shall be delayed until and made during the seventh calendar month following the calendar month during which the Employee’s termination of employment occurs (or, if earlier, the calendar month following the calendar month of the Employee’s death). If the Employee has a termination of employment prior to January 1, 2021 by reason of retirement at or after attainment of age 66, then on the date of the Employee’s termination of employment the Award shall be forfeited and shall be canceled by the Company.

(e) Other Termination of Employment. If the Employee terminates employment with the Employers and Affiliates prior to the Three-Year Anniversary Date for any reason other than death, Disability or retirement at or after attainment of age 66 (including if the Employee terminates employment prior to the Three-Year Anniversary Date by reason of the Employee’s negligence or willful misconduct, in each case as determined by the Company in its sole discretion, irrespective of whether such termination occurs on or after the Employee attains age 66), then on the date of the Employee’s termination of employment the Award shall be forfeited and shall be canceled by the Company.

(f) Forfeiture of Award and Award Gain upon Competition, Misappropriation, Solicitation or Disparagement. Notwithstanding any other provision herein, if the Employee engages in (i) Competition (as defined in this Section 3(f) below); (ii) Misappropriation (as defined in this Section 3(f) below); (iii) Solicitation (as defined in this Section 3(f) below) or (iv) Disparagement (as defined in this Section 3(f) below), in each case as determined by the Company in its sole discretion, then (i) on the date of such Competition, Misappropriation, Solicitation or Disparagement, the Award immediately shall be forfeited and shall be canceled by the Company and (ii) in the event that the Award became nonforfeitable within the twelve months immediately preceding such Competition, Misappropriation, Solicitation or Disparagement, the Employee shall pay the Company, within five business days of receipt by the Employee of a written demand therefore, an amount in cash determined by multiplying the number of shares of Common Stock subject to the Award on the date that it became nonforfeitable (without reduction for any shares of Common Stock delivered by the Employee or withheld by the Company pursuant to Section 5.3) by the Fair Market Value of a share of Common Stock on the date that the Award was paid. The Employee acknowledges and agrees that the Award, by encouraging stock ownership and thereby increasing an employee’s proprietary interest in the Company’s success, is intended as an incentive to participating employees to remain in the employ of the Employers or an Affiliate. The Employee acknowledges and agrees that this Section 3(f) is therefore fair and reasonable, and not a penalty.

The Employee may be released from the Employee’s obligations under this Section 3(f) only if and to the extent the Committee determines in its sole discretion that such release is in the best interests of the Company.

The Employee agrees that by accepting this Award Agreement the Employee authorizes the Employers and any Affiliate to deduct any amount owed by the Employee pursuant to this Section 3(f) from any amount payable by the Employers or any Affiliate to the Employee, including, without limitation, any amount payable to the Employee as salary, wages, vacation pay or bonus. The Employee further agrees to execute any documents at the time of setoff required by the Employers and any Affiliate in order to effectuate the setoff. This right of setoff shall not be an exclusive remedy and an Employer’s or an Affiliate’s election not to exercise this right of setoff with respect to any amount payable to the Employee shall not constitute a waiver of this right of setoff with respect to any other amount payable to the Employee or any other remedy. Should the Employers and/or any Affiliate institute a legal action against the Employee to recover the amounts due, the Employee agrees to reimburse the Employers and/or any Affiliate for their reasonable attorneys’ fees and litigation costs incurred in recovering such amounts from the Employee.

For purposes of this Award Agreement, “Competition” shall mean that the Employee, directly or indirectly, individually or in conjunction with any Person, during the Employee’s employment with the Employers and the Affiliates and for the twelve months after the termination of that employment for any reason, other than on any Employer’s or Affiliate’s behalf (i) has contact with any customer of an Employer or Affiliate or with any prospective customer which has been contacted or solicited by or on behalf of an Employer or Affiliate for the purpose of soliciting or selling to such customer or prospective customer the same or a similar (such that it could substitute for) product or service provided by an Employer or Affiliate during the Employee’s employment with the Employers and the Affiliates; or (ii) becomes employed in the business or engages in the business of providing wireless products or services in any county or county contiguous to a county in which an Employer or Affiliate provided such products or services during the Employee’s employment with the Employers and the Affiliates or had plans to do so within the twelve month period immediately following the Employee’s termination of employment.

For purposes of this Award Agreement, “Misappropriation” shall mean that the Employee (i) uses Confidential Information (as defined below) for the benefit of anyone other than the Employers or an Affiliate, as the case may be, or discloses the Confidential Information to anyone not authorized by the Employers or an Affiliate, as the case may be, to receive such information; (ii) upon termination of employment, makes any summaries of, takes any notes with respect to or memorizes any Confidential Information or takes any Confidential Information or reproductions thereof from the facilities of the Employers or an Affiliate or (iii) upon termination of employment or upon the request of the Employers or an Affiliate, fails to return all Confidential Information then in the Employee’s possession. For the avoidance of doubt, “Misappropriation” does not include disclosure of Confidential Information to a governmental regulatory agency, such as the U.S. Securities and Exchange Commission, provided that the Employee informs the agency that the Employers and/or Affiliates deem the information to be confidential. “Confidential Information” shall mean any confidential and proprietary drawings, reports, sales and training manuals, customer lists, computer programs and other material embodying trade secrets or confidential technical, business, or financial information of the Employers or an Affiliate.

For purposes of this Award Agreement, “Solicitation” shall mean that the Employee, directly or indirectly, individually or in conjunction with any Person, during the Employee’s employment with the Employers and the Affiliates and for the twelve months after the termination of that employment for any reason, other than on any Employer’s or Affiliate’s behalf, solicits, induces or encourages (or attempts to solicit, induce or encourage) any individual away from any Employer’s or Affiliate’s employ or from the faithful discharge of such individual’s contractual and fiduciary obligations to serve the Employers’ and Affiliates’ interests with undivided loyalty.

For purposes of this Award Agreement, “Disparagement” shall mean that the Employee has made a statement (whether oral, written or electronic) to any Person other than to an officer of an Employer or an Affiliate that disparages or demeans the Employers, any Affiliate, or any of their respective owners, directors, officers, employees, products or services. For the avoidance of doubt, “Disparagement” does not include making truthful statements to any governmental regulatory agency or to testimony in any legal proceeding.

4. Change in Control

(a) In General. Notwithstanding any provision in the Plan or any other provision of this Award Agreement, in the event of a Change in Control, the Board (as constituted prior to such Change in Control) may in its discretion, but shall not be required to, make such adjustments to the Award as it deems appropriate, including, without limitation: (i) causing the Award to become nonforfeitable in whole or in part; and/or (ii) causing the Performance Measures to be deemed to be satisfied at the target, maximum or any other level, as determined by the Board (as constituted prior to such Change in Control); and/or (iii) to the extent permitted under section 409A of the Code, causing the Performance Period and Restriction Period with respect to the Award to lapse in full or in part and payment of the Award, to the extent the Performance Period and Restriction Period have lapsed, to occur within sixty (60) days following the occurrence of the Change in Control (the “Change in Control Payment Period”); and/or (iv) substituting for some or all of the shares of Common Stock subject to the Award the number and class of shares into which each outstanding share of Common Stock shall be converted pursuant to the Change in Control, with an appropriate and equitable adjustment to the Award as determined by the Committee in accordance with Section 5.5 below and/or (v) to the extent permitted under section 409A of the Code, requiring that the Award, in whole or in part, be surrendered to the Company by the holder thereof and be immediately canceled by the Company and providing that the holder of the Award receive, within the Change in Control Payment Period, (X) a cash payment in an amount equal to the number of shares of Common Stock then subject to the portion of the Award surrendered, to the extent the Performance Period and Restriction Period on the Award have lapsed or will lapse pursuant to this Section 4(a) and to the extent that the Performance Measures have been satisfied or are deemed satisfied pursuant to this Section 4(a), multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control; (Y) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to the Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (X) above; or (Z) a combination of the payment of cash pursuant to clause (X) above and the issuance of shares pursuant to clause (Y) above.

(b) Definition of Change in Control. For purposes of the Plan and this Award Agreement, a "Change in Control" shall mean:

(1) the acquisition by any Person, including any "person" within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of the then outstanding securities of the Company (the “Outstanding Voting Securities”) (x) having sufficient voting power of all classes of capital stock of the Company to elect at least 50% or more of the members of the Board or (y) having 50% or more of the combined voting power of the Outstanding Voting Securities entitled to vote generally on matters (without regard to the election of directors), excluding, however, the following: (i) any acquisition directly from the Company or an Affiliate (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege, unless the security being so exercised, converted or exchanged was acquired directly from the Company or an Affiliate), (ii) any acquisition by the Company or an Affiliate, (iii) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate, (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 4(b), or (v) any acquisition by the following Persons: (A) LeRoy T. Carlson or his spouse, (B) any child of LeRoy T. Carlson or the spouse of any such child, (C) any grandchild of LeRoy T. Carlson, including any child adopted by any child of LeRoy T. Carlson, or the spouse of any such grandchild, (D) the estate of any of the Persons described in clauses (A)-(C), (E) any trust or similar arrangement (including any acquisition on behalf of such trust or similar arrangement by the trustees or similar Persons) provided that all of the current beneficiaries of such trust or similar arrangement are Persons described in clauses (A)-(C) or their lineal descendants, or (F) the voting trust which expires on June 30, 2035, or any successor to such voting trust, including the trustees of such voting trust on behalf of such voting trust (all such Persons, collectively, the "Exempted Persons");

(2) individuals who, as of March 15, 2016, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to March 15, 2016, and whose election or nomination for election by the Company's stockholders was approved by the vote of at least a majority of the directors then comprising the Incumbent Board, shall be deemed a member of the Incumbent Board;

(3) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Corporate Transaction"), excluding, however, a Corporate Transaction pursuant to which (i) all or substantially all of the Persons who are the beneficial owners of the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, (x) sufficient voting power to elect at least a majority of the members of the board of directors of the corporation resulting from the Corporate Transaction and (y) more than 50% of the combined voting power of the outstanding securities which are entitled to vote generally on matters (without regard to the election of directors) of the corporation resulting from such Corporate Transaction (including in each of clauses (x) and (y), without limitation, a corporation which as a result of such transaction owns, either directly or indirectly, the Company or all or substantially all of the Company's assets), in substantially the same proportions relative to each other as the shares of Outstanding Voting Securities are owned immediately prior to such Corporate Transaction, (ii) no Person (other than the following Persons: (v) the Company or an Affiliate, (w) any employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate, (x) the corporation resulting from such Corporate Transaction, (y) the Exempted Persons, and (z) any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 50% or more of the Outstanding Voting Securities) will beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding securities of such corporation entitled to vote generally on matters (without regard to the election of directors) and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or

(4) approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company.

5. Additional Terms and Conditions of Award

5.1. Transferability of Award. Except pursuant to a beneficiary designation on a form prescribed by the Company and effective on the Employee's death, the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Award and all rights hereunder shall immediately become null and void.

By accepting the Award, the Employee agrees that if all beneficiaries designated on a form prescribed by the Company predecease the Employee or, in the case of corporations, partnerships, trusts or other entities which are designated beneficiaries, are terminated, dissolved, become insolvent or are adjudicated bankrupt prior to the date of the Employee’s death, or if the Employee fails to properly designate a beneficiary on a form prescribed by the Company (including by failure to return such form to the appropriate Company representative during the Employee’s lifetime), then the Employee hereby designates the following Persons in the order set forth herein as the Employee’s beneficiary or beneficiaries: (i) the Employee’s spouse, if living, or if none, (ii) the Employee’s then living descendants, per stirpes, or if none, (iii) the Employee’s estate.

5.2. Investment Representation. The Employee hereby represents and covenants that (a) any shares of Common Stock acquired upon the lapse of restrictions with respect to the Award will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Employee shall submit a written statement, in a form satisfactory to the Company, to the effect that such representation is true and correct as of the date of acquisition of any shares hereunder or is true and correct as of the date of sale of any such shares, as applicable. As a condition precedent to the issuance or delivery to the Employee of any shares subject to the Award, the Employee shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares and, in connection therewith, shall execute any documents which the Committee shall in its sole discretion deem necessary or advisable.

5.3. Tax Withholding. The Employee timely shall pay to the Company such amount as the Company may be required, under all applicable federal, state, local or other laws or regulations, to withhold and pay over as income or other withholding taxes (the "Required Tax Payments") with respect to the Award. The Employee may elect to satisfy his or her obligation to advance the Required Tax Payments by (a) authorizing the Company to withhold whole shares of Common Stock which otherwise would be delivered to the Employee pursuant to the Award, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with the Award or (b) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously-owned whole shares of Common Stock, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with the Award. Shares of Common Stock to be withheld or delivered may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. Unless other arrangements have been made to the Company’s satisfaction, any fraction of a share of Common Stock which would be required to pay the Required Tax Payments shall be disregarded and the remaining amount due shall be paid in cash by the Employee. The Employee agrees that if by the pay period that immediately follows the date that the Restriction Period with respect to the Award terminates, no cash payment attributable to any such fractional share shall have been received by the Company, then the Employee hereby authorizes the Company to deduct such cash payment from any amount payable by the Company or any Affiliate to the Employee, including without limitation any amount payable to the Employee as salary or wages.

Notwithstanding the foregoing provisions of this Section 5.3, an Employee shall satisfy his or her obligation to advance employment taxes owed prior to the date that the Restriction Period with respect to the Award terminates, if any, by a cash payment to the Company, and the Employee hereby authorizes the Company to deduct such cash payment from any amount payable by the Company or any Affiliate to the Employee, including without limitation any amount payable to the Employee as salary or wages.

The Employee agrees that the authorizations set forth in this Section 5.3 with respect to deducting cash payments from future amounts payable may be reauthorized via electronic means determined by the Company. The Employee may revoke these authorizations by written notice to the Company prior to any such deduction.

5.4. Award Confers No Rights as a Stockholder. The Employee shall not be entitled to any privileges of ownership with respect to the shares of Common Stock subject to the Award unless and until the restrictions on the Award lapse and the Employee becomes a stockholder of record with respect to such shares.

5.5. Adjustment. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, the terms of the Award, including the number and class of shares of Common Stock subject to the Award, shall be appropriately and equitably adjusted by the Committee. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization or partial or complete liquidation of the Company, such adjustment described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of participants. In either case, such adjustment shall be final, binding and conclusive. If such adjustment would result in a fractional share being subject to the Award, the Company shall pay the holder of the Award, on the date that the shares with respect to the Award are issued, an amount in cash determined by multiplying (i) the fraction of such share (rounded to the nearest hundredth) by (ii) the Fair Market Value of a share on the date that the Restriction Period with respect to the Award terminates.

5.6. Compliance with Applicable Law. The Award is subject to the condition that if the listing, registration or qualification of the shares of Common Stock subject to the Award upon any securities exchange or under any law, the consent or approval of any governmental body or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares, such shares will not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.

5.7. Delivery of Shares. On the date of payment of the Award, the Company shall deliver or cause to be delivered to the Employee the shares of Common Stock subject to the Award. The Company may require that the shares of Common Stock delivered pursuant to the Award bear a legend indicating that the sale, transfer or other disposition thereof by the Employee is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder. The holder of the Award shall pay all original issue or transfer taxes and all fees and expenses incident to such delivery, unless the Company in its discretion elects to make such payment.

5.8. Award Confers No Rights to Continued Employment or Service. In no event shall the granting of the Award or the acceptance of this Award Agreement and the Award by the Employee give or be deemed to give the Employee any right to continued employment by or service with the Company or any of its subsidiaries or affiliates.

5.9. Decisions of Committee. The Committee shall have the right to resolve all questions which may arise in connection with the Award. Any interpretation, determination or other action made or taken by the Committee regarding the Plan, this Award Agreement or the Award Summary shall be final, binding and conclusive.

5.10. Company to Reserve Shares. The Company shall at all times prior to the cancellation of the Award reserve and keep available, either in its treasury or out of its authorized but unissued shares of Common Stock, the full number of shares subject to the Award from time to time.

5.11. Award Agreement and Award Summary Subject to the Plan. This Award Agreement and the Award Summary are subject to the provisions of the Plan, and shall be interpreted in accordance therewith. The Employee hereby acknowledges receipt of a copy of the Plan.

5.12. Award Subject to Clawback. The Award and any shares of Common Stock delivered pursuant to the Award are subject to forfeiture, recovery by the Company or other action pursuant to any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

6. Miscellaneous Provisions

6.1. Successors. This Award Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any Person or Persons who shall, upon the death of the Employee, acquire any rights hereunder.

6.2. Notices. All notices, requests or other communications provided for in this Award Agreement shall be made in writing either (a) by actual delivery to the party entitled thereto, (b) by mailing in the United States mails to the last known address of the party entitled thereto, via certified or registered mail, postage prepaid and return receipt requested, (c) by electronic mail, utilizing notice of undelivered electronic mail features or (d) by telecopy with confirmation of receipt. The notice, request or other communication shall be deemed to be received (a) in case of delivery, on the date of its actual receipt by the party entitled thereto, (b) in case of mailing by certified or registered mail, five days following the date of such mailing, (c) in case of electronic mail, on the date of mailing but only if a notice of undelivered electronic mail is not received or (d) in case of telecopy, on the date of confirmation of receipt.

6.3. Governing Law. The Award, this Award Agreement, the Award Summary and the Plan, and all determinations made and actions taken pursuant thereto, to the extent otherwise not governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

6.4 Compliance with Section 409A of the Code. If the Award is subject to section 409A of the Code, then for purposes of determining the timing of settlement of the Award (and for any other purpose required under section 409A), all references herein to “termination of employment” or similar references shall mean “Separation from Service.” It is intended that the Award, this Award Agreement, the Award Summary and the Plan be exempt from the requirements of section 409A of the Code to the maximum extent possible. To the extent section 409A of the Code applies to the Award, this Award Agreement, the Award Summary and the Plan, it is intended that the Award, this Award Agreement, the Award Summary and the Plan comply with the requirements of section 409A of the Code to the maximum extent possible. The Award, this Award Agreement, the Award Summary and the Plan shall be administered and interpreted in a manner consistent with this intent. In the event that the Award, this Award Agreement, the Award Summary or the Plan does not comply with section 409A of the Code (to the extent applicable thereto), the Company shall have the authority to amend the terms of the Award, this Award Agreement, the Award Summary or the Plan (which amendment may be retroactive to the extent permitted by section 409A of the Code and may be made by the Company without the consent of the Employee) to avoid taxes and other penalties under section 409A of the Code, to the extent possible. Notwithstanding the foregoing, no particular tax result for the Employee with respect to any income recognized by the Employee in connection with the Award, this Award Agreement and the Award Summary is guaranteed, and the Employee solely shall be responsible for any taxes, penalties, interest or other losses or expenses incurred by the Employee under section 409A of the Code in connection with the Award, this Award Agreement and the Award Summary.



UNITED STATES CELLULAR CORPORATION

By:
	Kenneth R. Meyers
	President & CEO

(Accept grant electronically via Employee’s account at www.solium.com/login)



IMPORTANT NOTICE-PLEASE READ If this is your first grant of stock options, restricted stock units or a performance award from U.S. Cellular®, please note that you must submit a beneficiary designation form to U.S. Cellular®, Attn: Compensation Department, 8410 W. Bryn Mawr Avenue, Chicago, IL 60631. The form can be printed from your account at www.solium.com/login under the “Personal Profile and Passwords” tab, “Miscellaneous Account Information” section. You also may elect at any time to change a previously-designated beneficiary for your stock options, restricted stock units and performance awards by completing and submitting to U.S. Cellular a new beneficiary designation form.

EXHIBIT A



ELEMENT		PROVISION
Performance Period		January 1, 2020 to December 31, 2020
Performance Measures* and Weightings		• Consolidated Total Service Revenues (40%) • Consolidated Operating Cash Flow (30%) • Postpaid Handset Voluntary Defections (20%) • Consolidated Capital Expenditures (10%)
Performance Measure Definitions	Consolidated Total Service Revenues	Total service revenues determined on a consolidated company-wide basis and in a manner consistent with the Company’s presentation of total service revenues for external reporting purposes.
	Consolidated Operating Cash Flow	Operating cash flow determined on a consolidated company-wide basis and in a manner consistent with the Company’s presentation of Adjusted OIBDA for external reporting purposes and further adjusted to remove expenses associated with the annual bonus and performance share unit plans. Adjusted OIBDA shows adjusted earnings before interest; taxes; depreciation, amortization and accretion; gains and losses; equity in earnings of unconsolidated entities; and interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities.
	Postpaid Handset Voluntary Defections	Postpaid handset voluntary defections determined on a consolidated company-wide basis and in a manner consistent with the Company’s presentation for external reporting purposes.
	Consolidated Capital Expenditures	Capital expenditures determined on a consolidated company-wide basis and in a manner consistent with the Company’s presentation of capital expenditures for external reporting purposes. The measurement of actual capital expenditures against targeted capital expenditures may not be sufficiently comprehensive because it would measure actual expenditures, but not necessarily the efficiency of those expenditures or the decisions associated with various initiatives. Therefore, if appropriate, the measurement of actual expenditures against targeted expenditures could incorporate adjustments for spending efficiency and/or percent of completion, and consideration of projects pulled forward, projects deferred and other qualitative assessments. The determination of whether such adjustments are appropriate and the amount of the adjustments, if any, will be made by the Committee, considering the recommendation of the President and CEO and Chairman.

* Changes in Generally Accepted Accounting Principles, and/or other adjustment recommendations limited to material accounting adjustments or major business decisions (including but not limited to acquisition and divestiture activity) that, without their adjustment, would cause the calculated result to differ materially from the unadjusted calculation and therefore not reflect the true performance delivered in the Performance Period will be evaluated to determine if adjustment to actual or target results is warranted.

Exhibit 10.5

2013 LONG-TERM INCENTIVE PLAN

2020 RESTRICTED STOCK UNIT AWARD AGREEMENT

United States Cellular Corporation, a Delaware corporation (the "Company"), hereby grants to Kenneth R. Meyers (the "Employee") as of April 6, 2020 (the "Grant Date"), a Restricted Stock Unit Award (the "Award") with respect to 235,678 shares of Common Stock. The Award is granted pursuant to the provisions of the United States Cellular Corporation 2013 Long-Term Incentive Plan, as amended from time to time (the “Plan”) and is subject to the restrictions, terms and conditions set forth below. Capitalized terms not defined herein shall have the meanings specified in the Plan.

1. Award Subject to Acceptance

The Award shall become null and void unless the Employee accepts the Award and this Award Agreement either electronically by utilizing the Employee’s Company on-line account with Solium Capital, which is accessed at www.shareworks.com/login, or in paper format which may be obtained by contacting Mary Beth Richardson.

2. Restriction Period and Forfeiture

(a) In General. Except as otherwise provided in this Award Agreement, the Award shall become nonforfeitable and the Restriction Period with respect to the Award shall terminate on the third annual anniversary of the Grant Date (the “Three-Year Anniversary Date”), provided that the Employee remains continuously employed by the Employers and Affiliates until the Three-Year Anniversary Date. Within sixty (60) days following the Three-Year Anniversary Date, the Company shall issue to the Employee in a single payment the shares of Common Stock subject to the Award on the Three-Year Anniversary Date.

(b) Death. If the Employee terminates employment with the Employers and Affiliates prior to the Three-Year Anniversary Date by reason of death, then on the date of the Employee’s death the Award shall become nonforfeitable and the Restriction Period with respect to the Award shall terminate. Within sixty (60) days following the date of the Employee’s death, the Company shall issue to the Employee’s designated beneficiary in a single payment the shares of Common Stock subject to the Award.

(c) Disability. If the Employee terminates employment with the Employers and Affiliates prior to the Three-Year Anniversary Date by reason of Disability, then on the date of the Employee’s termination of employment the Award shall become nonforfeitable and the Restriction Period with respect to the Award shall terminate. The Company shall issue the shares of Common Stock subject to the Award in a single payment within sixty (60) days following the date of the Employee’s termination of employment. For purposes of this Award Agreement, “Disability” shall mean a total physical disability which, in the Committee’s judgment, prevents the Employee from performing substantially his or her employment duties and responsibilities for a continuous period of at least six months.

(d) Retirement. If the Employee terminates employment with the Employers and Affiliates prior to the Three-Year Anniversary Date by reason of Retirement, then on the date of the Employee’s termination of employment a pro-rata portion of the Award shall become nonforfeitable and the Restriction Period with respect to such pro-rata portion of the Award shall terminate. Such pro-rata portion shall be measured by a fraction, of which the numerator is the number of months during 2020 in which the Employee remained employed with the Employers and Affiliates (for this purpose, treating employment during at least one day of a month as employment during such month), and the denominator is twelve (12). The Company shall issue the shares of Common Stock subject to the Award, to the extent nonforfeitable, in a single payment within sixty (60) days following the date of the Employee’s termination of employment. On the date of the Employee’s termination of employment, any portion of the Award that does not become nonforfeitable pursuant to this Section 2(d) shall be forfeited and shall be canceled by the Company. For purposes of this Award Agreement, “Retirement” shall mean the Employee’s termination of employment with the Employers and Affiliates provided that the Employee has remained in employment with the Employers and Affiliates through the date that immediately precedes the date that any successor President and Chief Executive Officer of the Company commences employment.

(e) Other Termination of Employment. If the Employee terminates employment with the Employers and Affiliates prior to the Three-Year Anniversary Date for any reason other than death, Disability or Retirement, then on the date of the Employee’s termination of employment the Award shall be forfeited and shall be canceled by the Company.

(f) Forfeiture of Award and Award Gain upon Competition, Misappropriation, Solicitation or Disparagement. Notwithstanding any other provision herein, if the Employee engages in (i) Competition (as defined in this Section 2(f) below); (ii) Misappropriation (as defined in this Section 2(f) below); (iii) Solicitation (as defined in this Section 2(f) below) or (iv) Disparagement (as defined in this Section 2(f) below), in each case as determined by the Company in its sole discretion, then (i) on the date of such Competition, Misappropriation, Solicitation or Disparagement, the Award immediately shall be forfeited and shall be canceled by the Company and (ii) in the event that the Award became nonforfeitable within the twelve months immediately preceding such Competition, Misappropriation, Solicitation or Disparagement, the Employee shall pay the Company, within five business days of receipt by the Employee of a written demand therefore, an amount in cash determined by multiplying the number of shares of Common Stock subject to the Award (without reduction for any shares of Common Stock delivered by the Employee or withheld by the Company pursuant to Section 4.3) by the Fair Market Value of a share of Common Stock on the date that the Award was paid. The Employee acknowledges and agrees that the Award, by encouraging stock ownership and thereby increasing an employee’s proprietary interest in the Company’s success, is intended as an incentive to participating employees to remain in the employ of the Employers or an Affiliate. The Employee acknowledges and agrees that this Section 2(f) is therefore fair and reasonable, and not a penalty.

The Employee may be released from the Employee’s obligations under this Section 2(f) only if and to the extent the Committee determines in its sole discretion that such release is in the best interests of the Company.

The Employee agrees that by accepting this Award Agreement the Employee authorizes the Employers and any Affiliate to deduct any amount owed by the Employee pursuant to this Section 2(f) from any amount payable by the Employers or any Affiliate to the Employee, including, without limitation, any amount payable to the Employee as salary, wages, vacation pay or bonus. The Employee further agrees to execute any documents at the time of setoff required by the Employers and any Affiliate in order to effectuate the setoff. This right of setoff shall not be an exclusive remedy and an Employer’s or an Affiliate’s election not to exercise this right of setoff with respect to any amount payable to the Employee shall not constitute a waiver of this right of setoff with respect to any other amount payable to the Employee or any other remedy. Should the Employers and/or any Affiliate institute a legal action against the Employee to recover the amounts due, the Employee agrees to reimburse the Employers and/or any Affiliate for their reasonable attorneys’ fees and litigation costs incurred in recovering such amounts from the Employee.

For purposes of this Award Agreement, “Competition” shall mean that the Employee, directly or indirectly, individually or in conjunction with any Person, during the Employee’s employment with the Employers and the Affiliates and for the twelve months after the termination of that employment for any reason, other than on any Employer’s or Affiliate’s behalf (i) has contact with any customer of an Employer or Affiliate or with any prospective customer which has been contacted or solicited by or on behalf of an Employer or Affiliate for the purpose of soliciting or selling to such customer or prospective customer the same or a similar (such that it could substitute for) product or service provided by an Employer or Affiliate during the Employee’s employment with the Employers and the Affiliates; or (ii) becomes employed in the business or engages in the business of providing wireless, telephone, broadband or information technology products or services in any county or county contiguous to a county in which an Employer or Affiliate provided such products or services during the Employee’s employment with the Employers and the Affiliates or had plans to do so within the twelve month period immediately following the Employee’s termination of employment.

3. Change in Control

(a) In General. Notwithstanding any provision in the Plan or any other provision of this Award Agreement, in the event of a Change in Control, the Board (as constituted prior to such Change in Control) may in its discretion, but shall not be required to, make such adjustments to the Award as it deems appropriate, including, without limitation: (i) causing the Award to become nonforfeitable in whole or in part; and/or (ii) to the extent permitted under section 409A of the Code, causing the Restriction Period with respect to the Award to lapse in full or in part and payment of the Award, to the extent the Restriction Period has lapsed, to occur within sixty (60) days following the occurrence of the Change in Control (the “Change in Control Payment Period”); and/or (iii) substituting for some or all of the shares of Common Stock subject to the Award the number and class of shares into which each outstanding share of Common Stock shall be converted pursuant to the Change in Control, with an appropriate and equitable adjustment to the Award as determined by the Committee in accordance with Section 4.5 below and/or (iv) to the extent permitted under section 409A of the Code, requiring that the Award, in whole or in part, be surrendered to the Company by the holder thereof and be immediately canceled by the Company and providing that the holder of the Award receive, within the Change in Control Payment Period, (X) a cash payment in an amount equal to the number of shares of Common Stock then subject to the portion of the Award surrendered, to the extent the Restriction Period on the Award has lapsed or will lapse pursuant to this Section 3(a), multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control; (Y) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to the Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (X) above; or (Z) a combination of the payment of cash pursuant to clause (X) above and the issuance of shares pursuant to clause (Y) above.

(b) Definition of Change in Control. For purposes of the Plan and this Award Agreement, a "Change in Control" shall mean:

(1) the acquisition by any Person, including any "person" within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of the then outstanding securities of the Company (the “Outstanding Voting Securities”) (x) having sufficient voting power of all classes of capital stock of the Company to elect at least 50% or more of the members of the Board or (y) having 50% or more of the combined voting power of the Outstanding Voting Securities entitled to vote generally on matters (without regard to the election of directors), excluding, however, the following: (i) any acquisition directly from the Company or an Affiliate (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege, unless the security being so exercised, converted or exchanged was acquired directly from the Company or an Affiliate), (ii) any acquisition by the Company or an Affiliate, (iii) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate, (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 3(b), or (v) any acquisition by the following Persons: (A) LeRoy T. Carlson or his spouse, (B) any child of LeRoy T. Carlson or the spouse of any such child, (C) any grandchild of LeRoy T. Carlson, including any child adopted by any child of LeRoy T. Carlson, or the spouse of any such grandchild, (D) the estate of any of the Persons described in clauses (A)-(C), (E) any trust or similar arrangement (including any acquisition on behalf of such trust or similar arrangement by the trustees or similar Persons) provided that all of the current beneficiaries of such trust or similar arrangement are Persons described in clauses (A)-(C) or their lineal descendants, or (F) the voting trust which expires on June 30, 2035, or any successor to such voting trust, including the trustees of such voting trust on behalf of such voting trust (all such Persons, collectively, the "Exempted Persons");

(4) approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company.

4. Additional Terms and Conditions of Award

4.1. Transferability of Award. Except pursuant to a beneficiary designation on a form prescribed by the Company and effective on the Employee's death, the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Award and all rights hereunder shall immediately become null and void.

4.2. Investment Representation. The Employee hereby represents and covenants that (a) any shares of Common Stock acquired upon the lapse of restrictions with respect to the Award will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Employee shall submit a written statement, in a form satisfactory to the Company, to the effect that such representation is true and correct as of the date of acquisition of any shares hereunder or is true and correct as of the date of sale of any such shares, as applicable. As a condition precedent to the issuance or delivery to the Employee of any shares subject to the Award, the Employee shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares and, in connection therewith, shall execute any documents which the Committee shall in its sole discretion deem necessary or advisable.

4.3. Tax Withholding. The Employee timely shall pay to the Company such amount as the Company may be required, under all applicable federal, state, local or other laws or regulations, to withhold and pay over as income or other withholding taxes (the "Required Tax Payments") with respect to the Award. The Employee may elect to satisfy his or her obligation to advance the Required Tax Payments by (a) authorizing the Company to withhold whole shares of Common Stock which otherwise would be delivered to the Employee pursuant to the Award, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with the Award or (b) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously-owned whole shares of Common Stock, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with the Award. Shares of Common Stock to be withheld or delivered may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. Unless other arrangements have been made to the Company’s satisfaction, any fraction of a share of Common Stock which would be required to pay the Required Tax Payments shall be disregarded and the remaining amount due shall be paid in cash by the Employee. The Employee agrees that if by the pay period that immediately follows the date that the Restriction Period with respect to the Award terminates, no cash payment attributable to any such fractional share shall have been received by the Company, then the Employee hereby authorizes the Company to deduct such cash payment from any amount payable by the Company or any Affiliate to the Employee, including without limitation any amount payable to the Employee as salary or wages.

Notwithstanding the foregoing provisions of this Section 4.3, an Employee shall satisfy his or her obligation to advance employment taxes owed prior to the date that the Restriction Period with respect to the Award terminates, if any, by a cash payment to the Company, and the Employee hereby authorizes the Company to deduct such cash payment from any amount payable by the Company or any Affiliate to the Employee, including without limitation any amount payable to the Employee as salary or wages.

The Employee agrees that the authorizations set forth in this Section 4.3 with respect to deducting cash payments from future amounts payable may be reauthorized via electronic means determined by the Company. The Employee may revoke these authorizations by written notice to the Company prior to any such deduction.

4.4. Award Confers No Rights as a Stockholder. The Employee shall not be entitled to any privileges of ownership with respect to the shares of Common Stock subject to the Award unless and until the restrictions on the Award lapse and the Employee becomes a stockholder of record with respect to such shares.

4.5. Adjustment. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, the number and class of shares of Common Stock subject to the Award shall be appropriately and equitably adjusted by the Committee. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization or partial or complete liquidation of the Company, such adjustment described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of participants. In either case, such adjustment shall be final, binding and conclusive. If such adjustment would result in a fractional share being subject to the Award, the Company shall pay the holder of the Award, on the date that the shares with respect to the Award are issued, an amount in cash determined by multiplying (i) the fraction of such share (rounded to the nearest hundredth) by (ii) the Fair Market Value of a share on the date that the Restriction Period with respect to the Award terminates.

4.6. Compliance with Applicable Law. The Award is subject to the condition that if the listing, registration or qualification of the shares of Common Stock subject to the Award upon any securities exchange or under any law, the consent or approval of any governmental body or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares, such shares will not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.

4.7. Delivery of Shares. On the date of payment of the Award, the Company shall deliver or cause to be delivered to the Employee the shares of Common Stock subject to the Award. The Company may require that the shares of Common Stock delivered pursuant to the Award bear a legend indicating that the sale, transfer or other disposition thereof by the Employee is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder. The holder of the Award shall pay all original issue or transfer taxes and all fees and expenses incident to such delivery, unless the Company in its discretion elects to make such payment.

4.8. Award Confers No Rights to Continued Employment or Service. In no event shall the granting of the Award or the acceptance of this Award Agreement and the Award by the Employee give or be deemed to give the Employee any right to continued employment by or service with the Company or any of its subsidiaries or affiliates.

4.9. Decisions of Committee. The Committee shall have the right to resolve all questions which may arise in connection with the Award. Any interpretation, determination or other action made or taken by the Committee regarding the Plan or this Award Agreement shall be final, binding and conclusive.

4.10. Company to Reserve Shares. The Company shall at all times prior to the cancellation of the Award reserve and keep available, either in its treasury or out of its authorized but unissued shares of Common Stock, the full number of shares subject to the Award from time to time.

4.11. Award Agreement Subject to the Plan. This Award Agreement is subject to the provisions of the Plan, and shall be interpreted in accordance therewith. The Employee hereby acknowledges receipt of a copy of the Plan.

4.12. Award Subject to Clawback. The Award and any shares of Common Stock delivered pursuant to the Award are subject to forfeiture, recovery by the Company or other action pursuant to any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

5. Miscellaneous Provisions

5.1. Successors. This Award Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any Person or Persons who shall, upon the death of the Employee, acquire any rights hereunder.

5.2. Notices. All notices, requests or other communications provided for in this Award Agreement shall be made in writing either (a) by actual delivery to the party entitled thereto, (b) by mailing in the United States mails to the last known address of the party entitled thereto, via certified or registered mail, postage prepaid and return receipt requested, (c) by electronic mail, utilizing notice of undelivered electronic mail features or (d) by telecopy with confirmation of receipt. The notice, request or other communication shall be deemed to be received (a) in case of delivery, on the date of its actual receipt by the party entitled thereto, (b) in case of mailing by certified or registered mail, five days following the date of such mailing, (c) in case of electronic mail, on the date of mailing but only if a notice of undelivered electronic mail is not received or (d) in case of telecopy, on the date of confirmation of receipt.

5.3. Governing Law. The Award, this Award Agreement and the Plan, and all determinations made and actions taken pursuant thereto, to the extent otherwise not governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

5.4. Compliance with Section 409A of the Code. It is intended that the Award, this Award Agreement and the Plan be exempt from the requirements of section 409A of the Code to the maximum extent possible. To the extent section 409A of the Code applies to the Award, this Award Agreement and the Plan, it is intended that the Award, this Award Agreement and the Plan comply with the requirements of section 409A of the Code to the maximum extent possible. The Award, this Award Agreement and the Plan shall be administered and interpreted in a manner consistent with this intent. In the event that the Award, this Award Agreement or the Plan does not comply with section 409A of the Code (to the extent applicable thereto), the Company shall have the authority to amend the terms of the Award, this Award Agreement or the Plan (which amendment may be retroactive to the extent permitted by section 409A of the Code and may be made by the Company without the consent of the Employee) to avoid taxes and other penalties under section 409A of the Code, to the extent possible. Notwithstanding the foregoing, no particular tax result for the Employee with respect to any income recognized by the Employee in connection with the Award and this Award Agreement is guaranteed, and the Employee solely shall be responsible for any taxes, penalties, interest or other losses or expenses incurred by the Employee under section 409A of the Code in connection with the Award and this Award Agreement.



UNITED STATES CELLULAR CORPORATION

By:	/s/ LeRoy T. Carlson, Jr.
	LeRoy T. Carlson, Jr.
	Chairman

(Accept grant electronically via Employee’s account at www.solium.com/login)



IMPORTANT NOTICE-PLEASE READ
You may elect at any time to change a previously-designated beneficiary for your stock options, restricted stock units and performance awards by completing and submitting to U.S. Cellular a new beneficiary designation form. The form can be printed from your account at www.solium.com/login under the “Personal Profile and Passwords” tab, “Miscellaneous Account Information” section, and should be submitted to U.S. Cellular®, Attn: Compensation Department, 8410 W. Bryn Mawr Avenue, Chicago, IL 60631.

Exhibit 10.6

March 4, 2020

Mr. Laurent C. Therivel

Dear Laurent,

I am delighted to offer you the opportunity to serve as the President and Chief Executive Officer ("CEO") of United States Cellular Corporation ("USCC"), and am confident that with your outstanding operational and strategic knowledge and experience and with your proven leadership capabilities, USCC will be well positioned for and will achieve superior performance, growth and long-term profitability. I am looking forward to working with you to substantially enhance the Company's performance and success. As USCC's President and CEO, you will be elected to the USCC Board and will report to me in my capacity as USCC Board Chairman, as well as to the Board.

It is our expectation that you and I will determine a mutually agreeable date for you to commence employment with USCC, which will be no later than August 1^st, 2020.

Set forth below is information regarding key elements of what your compensation would be as President and CEO of USCC:

Base Salary: Effective as of the date that you commence service as President and CEO, your base salary for 2020 will be $755,000 per year (prorated for months served after your start date). Our policy is to review the salaries of senior executives annually as soon after January 1^st as feasible, with adjustments retroactively effective to January 1^st (for example in 2021). Your base salary will be subject to applicable tax withholding and benefit plan deductions.

Annual Bonus: The Annual Cash Incentive Award ("Bonus") target opportunity for 2020 will be 110% of your base salary for 2020 (target award equal to $830,500) and based on USCC's approved 2020 Executive Officer Annual Incentive Plan. The amount of the 2020 Bonus shall be prorated for months served during 2020. Actual bonus awards can range from 0% to 200% of the target award, based upon the achievement of specified company objectives (e.g. service revenues, operating cash flow, capital expenditures, equivalent handset net adds, and customer engagement), Chairman assessment on strategic initiatives, and individual performance, as determined by the Chairman. Your bonus will be subject to applicable tax withholding and benefit plan deductions.

Annual Equity Awards: USCC has a Long-Term Incentive Program under which annual equity grants are made to eligible associates (in recent years, in the form of restricted stock units and performance share units). I will recommend that the USCC Long-Term Incentive Compensation Committee ("LTICC") approve that the first annual equity award granted to you, the 2021 grant, have a target LTI award opportunity equal to $4,500,000 in value at grant. The 2021 LTI grant is planned to be made in April 2021 and will be based on the approved 2021 LTI design. For reference, the 2020 LTI mix is expected to be as follows:


a.	Restricted stock units ("RSUs") - 50% of expected value, cliff vests if remain employed through third anniversary of grant


b.	Performance share units ("PSUs") - 50% of expected value, cliff vests if remain employed through third anniversary of grant; target award adjusted in year following grant based on performance during the year of grant (e.g. 2020 performance, final award is 50% to 200% of target based on performance)

For information purposes, 2020 metrics for the PSUs are likely to be based upon Consolidated Operating Cash Flow, Consolidated Total Service Revenues, Postpaid Handset Voluntary Defections and Consolidated Capital Expenditures. The LTICC reserves the right to amend the type, weighting, performance metrics and other terms of the LTI awards.

I anticipate that you would receive Annual Equity Awards each calendar year you serve as President and CEO of USCC in a target amount with a grant date value not less than $4,000,000.


4.	Two Initial Equity Awards: I will recommend that the USCC LTICC grant to you, as soon as administratively practicable following your start date, the following two equity awards.

First, an RSU equity award with a grant date value equal to $2,250,000 ("Initial RSU Award"), which will cliff vest 6 years after your start date subject to your continued employment. Second, an accomplishment equity award with a grant date value equal to $4,500,000 (the "Initial Accomplishment Award") with vesting conditional on, during any two calendar-year period commencing no earlier than January 1, 2021 and ending no later than December 31, 2026, USCC achieving both: greater than the wireless industry total revenue average growth rate (defined as the weighted average wireless revenue growth of AT&T, Verizon and T-Mobile, or their successors, for that two year period) and during the same two year period USCC achieving an average annual return on capital that exceeds 6%. This award, if it vests based upon performance, would be settled in March of the year following the successful accomplishment of these two objectives.

Cash Retention Awards: Provided that you remain employed by USCC and its affiliates on the date specified below, you will receive a cash payment equal to the applicable amount set forth below (subject to applicable tax withholdings). The payment will be made within five business days following the date set forth below. In the unlikely event that USCC terminates your employment involuntarily without cause or a Change in Control occurs (in each case as defined in Exhibit A) prior to a date specified below, you nevertheless will be entitled to any unpaid amount set forth below, which will be paid to you within thirty days following the date of your termination or the date of the Change in Control, as applicable. Payment of the cash retention amount in the case of your involuntary termination without cause shall be subject to your execution (and non-revocation) of a release of all claims against USCC and its affiliates in the Company's then customary form (a "General Release").



Date	Amount
12/1/2020	$1,300,000
6/30/2022	$400,000
12/1/2023	$885,000
12/1/2024	$295,000

Equity Treatment upon Change in Control: In the unlikely event of a Change in Control of USCC (as defined in Exhibit A) prior to April 1, 2027, I will recommend that the USCC Board approve that you receive accelerated vesting of all awarded and unvested equity awards (annual LTI grants and the Initial RSU Award), with the exception of the Initial Accomplishment Award. In such event, I will recommend that the USCC Board approve that you receive accelerated vesting with respect to one-third of the shares subject to the Initial Accomplishment Award. If you continue to work for USCC or a USCC successor entity after a Change in Control, you will not receive the one-year salary noted under Severance in Section 11 hereof.

Benefits: You will be eligible to participate in the same medical, life insurance and retirement programs which USCC extends to its top executives subject to the same participation rules governing all new employees. The CEO of USCC is eligible to participate in the Tax-Deferred Savings Plan (a qualified 401(k) plan) and Pension Plan (a qualified defined contribution plan), and two non-qualified plans-the Supplemental Executive Retirement Plan ("SERP") and Deferred Compensation Plan.


8.	Vehicle: A company car under our company vehicle policy for corporate executives. Each year the amount that the company will pay for eligible associates is reevaluated.


9.	Club Membership: Membership at a business-oriented club in Chicago (the Union League Club, University Club, Chicago Club, etc.) to provide a convenient location for business meetings.


10.	Vacation: Up to four weeks of paid vacation may be taken each year at times, of course, that will not jeopardize performance of your responsibilities. Vacation time will be pro rated for the current calendar year based on your start date.

11.

Severance: In the unlikely event that USCC terminates your employment involuntarily without cause (as defined in Exhibit A) prior to April 1, 2027, subject to your execution (and non-revocation) of a General Release, USCC shall pay you a severance amount equal to your then current annual base salary. Such amount shall be paid to you in a lump sum within 60 days following your separation from service and shall be subject to applicable tax withholding.


12.	Relocation Assistance: USCC will provide a reasonable and market-based relocation package from Mexico and Dallas to the Chicago area. Under the USCC relocation plan, such benefits include shipment of household goods, real estate assistance, temporary living, and home finding assistance (see attached description).


13.	Business and Travel Expenses: The Company will reimburse you for all reasonable expenses incurred in performance of your duties on behalf of the Company in accordance with company policy.

Note that reimbursements and payments under this letter (whether of cash or equity) are intended to be exempt from the requirements of Section 409A of the Internal Revenue Code to the maximum extent possible. To the extent Section 409A applies to such reimbursements or payments, this letter shall be interpreted to comply therewith. Each reimbursement and payment under this letter shall constitute a "separately identified" amount within the meaning of Treasury Regulation

§1.409A-2(b)(2).

This offer is contingent upon a successful background check, acceptable results of a standard pre-employment drug screen, and your written acknowledgment to USCC that either:

(a)you have received written assurances from a Texas lawyer that your employment by USCC and its affiliates will not result in the breach of any restrictive covenant or other agreement, including, but not limited to, non-competition, non-solicitation, confidentiality, work-for-hire or similar agreements, and/or

(b)your current employer waives and/or agrees not to enforce any such restrictions in connection with your employment with USCC, and that your counsel has advised you that such assurances are sufficient to give you the requisite comfort to accept this offer letter.

If you have satisfied the conditions of the immediately preceding sentence, then, in the event of any dispute with your current employer with respect to the applicability of any restrictive covenant or similar agreement, USCC will reimburse you for reasonable attorney's fees of counsel reasonably acceptable to USCC up to a maximum of the first $100,000 of legal fees incurred. Any such payment shall occur no later than March 15 of the calendar year following the calendar year during which the legal fees were incurred. In addition, this offer is contingent upon (i) your acceptance and signature on this offer letter, (ii) your acceptance and signature on USCC's Confidentiality/Non-Solicitation/Non-Competition Agreement, a copy of which is attached, and (iii) the USCC Board approval of your appointment to become the President and CEO of USCC, which I anticipate they will be pleased to provide.

In the event your employment with your current employer ends prior to the agreed upon start date with USCC and you have fulfilled all contingencies above, we will provide you a payment of $40,000 per month (subject to applicable tax withholdings) for up to four months for each full month after the date your employment ends with your current employer and before your commencement of employment with USCC, payable on the first day of each month.

This letter agreement shall be construed in accordance with, and governed by, the substantive laws of the State of Illinois without reference to principles of conflicts of law. Each party agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this letter agreement, whether in tort or contract or at law or in equity, exclusively in the United States District Court for the Northern District of Illinois or the courts of the State of Illinois (the "Chosen Courts") and (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts for purposes of any such action or proceedings, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such action or proceeding shall be effective if notice, including the original or a copy of such process, is given by certified or registered mailing to USCC at 8410 W. Bryn Mawr Ave., Chicago, IL 60631, Attention: Vice President Legal, or if to you, at , or such other address as you may specify in writing to me. Each of us hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this letter agreement.

We recognize that you have the option, as does USCC, of ending your employment with USCC and its affiliates at any time, with or without notice and with or without cause. As such, your employment with USCC will be at-will and neither this letter nor any other oral or written statements or representations regarding your employment may alter your at-will status or may be considered an employment contract.

Laurent, we are looking forward to working with you as the next USCC President and CEO. We believe that this financial and benefits package will provide you with a major financial incentive for you to lead USCC to outstanding growth and overall performance.

Very truly yours,

/s/ LeRoy T. Carlson, Jr.

LeRoy T. Carlson, Jr.

Chairman

Please acknowledge your agreement with the terms outlined in this letter.



/s/ Laurent Therivel		6/1/2020
Laurent Therivel		Date

Exhibit A

DEFINITIONS

As used in this letter, the following terms shall have the respective meanings set forth below:

a."Cause" shall mean (i) a material breach by the executive of his employment duties and responsibilities (other than as a result of incapacity due to physical or mental illness) (A) which is the result of the executive's negligence or (B) which is demonstrably willful and deliberate on the executive's part and which is committed in bad faith or without reasonable belief that such breach is in the best interests of USCC; (ii) the commission by the executive of a felony involving moral turpitude; (iii) a court order having a material adverse impact on the executive's ability to serve as the USCC President and CEO; or (iv) violation of USCC's Confidentiality/NonSolicitation/Non-Competition Agreement or any agreement with USCC or its affiliate containing similar provisions.

b."Change in Control" shall have the meaning set forth in USCC's Long-Term Incentive Plan.

USCC SERVICES, LLC

CONFIDENTIALITY/NON-SOLICITATION/NON-COMPETITION AGREEMENT

In consideration and as a condition of employment or continued employment with USCC Services, LLC, including its parents, subsidiaries and affiliates, and the predecessors, successors or assignors of any of them (hereinafter referred to as "Employer" or "Company"), Employee acknowledges and agrees as follows regarding the confidentiality of information and non- solicitation of customers and employees of Employer and its affiliates:

1.Agreement Regarding Confidentiality. During and after Employee's employment with Employer, except as required in Employee's duties to Employer, Employee agrees to hold in strict confidence and/or not use for Employee's own benefit, and not disclose to or use for the benefit of any person, firm, or corporation, without the express written authorization of Employer, any Confidential Information or Trade Secrets, as defined herein. In addition, Employee agrees to protect and maintain the privacy and security of any Personal Data obtained during the course of employment or to which Employee has access, consistent with Company policies and in accordance with all applicable federal, state and local privacy and security laws and where applicable, comply with the privacy of health and medical information covered by the Health Insurance Portability and Accountability Act of 1996. Employee will refrain from, by act or omission, placing the Company in violation of any applicable privacy or data protection law. This promise of confidentiality is in addition to any common law or statutory rights of Company to prevent disclosure of its and its affiliates' Confidential Information and/or Trade Secrets.

2.Confidential Information Defined. "Confidential Information" means any information that Employee learns or developed during the course of employment with Company that gives the Company or any of its affiliates a commercial advantage over a competitor that does not have such information and/or information that is not generally known to persons or entities outside the Company, regardless of whether it is labeled confidential. Such information includes, but is not limited to, Personal Data, proprietary processes, formulas, computer software, programs and communication systems, data, know-how, inventions, improvements, techniques, training methods, business management methods and strategies, marketing plans, forecasts, customer and supplier lists, customer and supplier contracts and contacts, personal and/or financial information of customers, books, records, accounts, data processing information or computer programs, rate structure, price and cost lists, contract expiration dates, discounts or special/non-public promotions or programs, financial information, or any other document or information which refers to or related to Employer's or any of its affiliates' businesses and affairs, which Employee acknowledges may be contained in written manuals, verbal communications, in unwritten knowledge of Employee or of other employees, and/or any other tangible method of expression, including hard disk and soft disk drive mechanisms (hereinafter, along with the information described in paragraph 3 below, "trade secret" and/or "confidential" or "proprietary information"). Confidential Information also includes information of third parties for which the Company or its affiliates have accepted obligations of confidentiality. Nothing in this Agreement is intended to prohibit Employee from discussing with fellow employees, or with third parties who are not competitors of Employer, wages, hours and other terms and conditions of employment.

3.Trade Secret Defined. "Trade Secret" is information that qualifies as a trade secret under the Illinois Trade Secrets Act, 765 ILCS 1065.

4.Personal Data Defined. “Personal Data” means any information that refers or relates to an identified or identifiable individual, including but not limited to first and last name, home or other physical address, telephone number, e-mail address or other online contact information, Social Security number or similar governmental identifier, any biometric data, date of birth, consumer, health, financial, or any other information relating to an individual that is combined with any of the above.

5.Invention Assignment.

(a)Ownership Of Creations. Employee agrees that all programs, sub-routines, codes, formulas, documentation, and other inventions, discoveries, developments, improvements, ideas, copyrightable creations, works of authorship, mask works and other contributions (herein collectively referred to as "Creations"), whether or not patented or patentable, or copyrighted or copyrightable, which are in the future conceived, made, developed, created or acquired by Employee, either individually or jointly, during any employment by Employer and which relate in any manner to Employee's work for Employer, the research or business of Employer, or fields to which the business of Employer may reasonably extend (regardless of the extent developed at Employer's facilities, at Employee's home, or elsewhere), shall belong to Employer (or Employer's designee(s)), and Employee does hereby sell, assign, and transfer to Employer (or, at Employer's option, Employer's designee(s)) Employee's entire right, title and interest (worldwide) in and to the Creations and all intellectual property rights thereto. Employee agrees to keep complete records of such Creations.

(b)Disclosure Of Creations; Applications. Employee agrees to promptly and fully disclose the Creations to Employer, in writing if requested by Employer, and to execute and deliver any and all lawful applications, confirmatory assignments, and other documents which Employer requests for protecting the Creations in the United States and/or any other country. Employer or Employer's designee(s) shall have the full and sole power to prosecute such applications and to take all other action concerning the Creations, and (during and after employment) Employee will cooperate fully within a lawful manner, at the expense of Employer, in the preparation and prosecution of all such applications and in any legal actions and proceedings concerning the Creations.

(c)Presumption Of Ownership. Without diminishing in any way the rights granted to Employer above, where lawful, if a Creation is described in a patent application or is disclosed to a third party by Employee within six months after Employee leaves the employ of Employer, Employee agrees that it is to be presumed that the Creation was conceived, made, developed, acquired, or created by Employee during the period of employment by Employer, unless Employee can prove otherwise.

6.Non-Solicitation of Customers and Prospective Customers. Employee specifically acknowledges that by virtue of employment with Employer, that Employee may have substantial access to the Company's and its affiliates' confidential customer lists and/or confidential customer contacts. Employee further acknowledges that customers have regular or repeated dealings with Employer which results in systematic or frequent actions, contracts, sales, or business relations, and that Employer and its affiliates receive habitual or consecutive business from such customers. Employee also acknowledges that the customer lists and contacts are not matters of public or general knowledge, that such customer lists or customer contacts have been developed by Employer and its affiliates, at substantial cost and expense, that the customer lists and customer contacts are extremely valuable to Employer and its affiliates and that such customer lists or customer contacts could not be easily replicated. As such, Employee agrees to the following provisions restricting the solicitation of customers as follows:

(a)Non-Solicitation of Customers. During Employee’s employment and for one year following the termination of Employee's employment with Employer, regardless of the reason for the termination, Employee will not directly or indirectly provide, or solicit to provide, to any existing Employer or Employer affiliate customer (or provide any information to a third party in connection with its or their direct or indirect solicitation of said customers), with whom Employee had contact in the one year period immediately prior to termination of Employee's employment, the same or similar services or products provided by Employer or Employer’s affiliates, other than on Employer’s behalf.

(b)Non-Solicitation of Prospective Customers. During and for one year following the termination of Employee's employment with Employer, regardless of the reason for the termination, Employee will not directly or indirectly provide, or solicit to provide, to any Employer or Employer affiliate prospective customer (or provide any information to a third party in connection with its or their direct or indirect solicitation of said potential customers), with whom Employee had contact in the one year period immediately prior to termination of Employee's employment, the same or similar services or products provided by Employer or Employer's affiliates, other than on Employer's behalf. For purposes of this provision, "prospective customer" shall mean any person or entity that is the subject of an open bid or proposal at the time that Employee's employment terminates.

7.Non-Solicitation of Employees. During and for one year following the termination of Employee’s employment with Employer, regardless of the reason for the termination, Employee agrees not to solicit, induce or encourage, or attempt to solicit, induce or encourage, other than on the Employer's behalf, any employee of Employer or its affiliates to leave the employment of Employer or its affiliate or breach his/her employment duties.

8.Non-Compete. During and for one year after Employee’s employment with Employer, Employee shall not work for any entity which is a wireless service carrier that operates in any market within the continental United States in which the Company operates in the same or similar role for which Employee worked for Employer or which may require utilizing any Confidential Information or Trade Secrets acquired while employed by Employer. For purposes of the foregoing, “wireless carrier” includes any wireless carrier holding a license granted by the Federal Communications Commission, as well as any reseller or MVNO. “Work for” includes, whether paid or unpaid, as an employee, officer, director, consultant or advisor.

9.Notice to Subsequent Employer(s). Within five (5) business days of Employee’s acceptance of a position with any person or entity during and for one year after Employee’s employment with Employer, Employee agrees to give prior written notice to Employer of the name of such person or entity. In any event, Employee hereby consents to Employer contacting each such person or entity, including providing a copy of this Agreement to each such person or entity, to ensure that Employee remains in full compliance with the provisions of this Agreement.

10.Non-Disparagement. Employee agrees that Employee has not made, and will not make, directly or indirectly any oral, written, electronic (including, but not limited to, on social media, websites, blogs, email and/or text messages) or other type of communication, or release any information or encourage others to make any communication or release any information, that is designed to embarrass or disparage Employer or its affiliates to anyone, including Employer's customers, vendors, competitors, associates, former associates, potential associates or the press or other media in any country; provided, that it will not be a violation of this paragraph for Employee to make truthful statements when required by legal process to do so by a court of law, by any governmental agency having supervisory authority over the business of Employer or by any administrative or legislative body (including a committee thereof) with the jurisdiction to order Employee to divulge, disclose or make accessible such information.

11.Return of Materials. Employee agrees that upon Employer's request at any time, but, in no event, not later than the voluntary or involuntary termination of the employment relationship, to deliver to Employer and not keep or deliver to anyone else, at anytime, any and all records, documents, notes, memoranda, specifications, devices, electronic data, emails, computer disks, and, in general, any and all material relating to Employer's business and/or any "Confidential Information", "Trade Secrets" "Personal Data" or "Creations" as described in paragraphs 2, 3, 4 and 5 above, and shall not retain any copies thereof and further agrees not to make any summaries of, take any notes with respect to, or memorize any such information for Employee's benefit or that of any person, firm or corporation other than Employer.

12.Improper Use During Employment. Employee acknowledges that improperly using or disclosing Confidential Information, Trade Secret or Personal Data information subjects Employee to disciplinary action, up to and including termination of employment, and/or legal action, even if he or she does not actually benefit from the disclosed information.

13.Remedies. Employee hereby acknowledges and agrees that the services rendered by Employee to Employer, and the information disclosed to Employee during and by virtue of Employee’s employment, are of a special, unique and extraordinary character, and the breach of any such provisions of this Agreement will cause Employer irreparable injury and damage, and consequently Employer shall be entitled to, in addition to all other remedies available to it, injunctive and equitable relief to prevent a breach of this Agreement, or any part of it, and to secure the enforcement of this Agreement. Employer shall be entitled to collect from Employee, Employer's reasonable attorneys fees incurred in connection with: (1) Employer's enforcement of any of the provisions of this Agreement including, but not limited to, its enforcement of the forum-selection clause, and (2) any suit for damages stemming from Employee's breach of any of the provisions of this Agreement.

In addition, Employee may not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made: (a) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and provided that such disclosure is solely for the purpose of reporting or investigating a suspected violation of the law, or (b) in a complaint or other document filed in a lawsuit or other proceeding, provided that such filing is made under seal. Additionally, in the event Employee files a lawsuit against Employer for retaliation by the Employer against the Employee for reporting a suspected violation of law, Employee has the right to provide trade secret information to his or her attorney and use the trade secret information in the court proceeding, although Employee must file any document containing the trade secret under seal and may not disclose the trade secret, except pursuant to court order.

14.Agreement as to Reasonableness. Employee agrees and acknowledges that the provisions of this Agreement are fair and reasonable in both scope and content and are reasonably necessary for the protection of Employer’s and its affiliates' businesses. Employee further agrees and acknowledges that the provisions of this Agreement do not, and will not, unduly impair Employee's ability to earn a living after Employee's employment with Employer ends.

15.No Waiver. Employer’s waiver of a breach by Employee of any provision of this Agreement or failure to enforce any such provision with respect to Employee shall not operate or be construed as a waiver of any subsequent breach by Employee of any such provision or of any other provision, or of Employer’s right to enforce any such provision or any other provision with respect to Employee. No act or omission of Employer shall constitute a waiver of any of its rights hereunder except for a written waiver signed by the Employer.

16.Miscellaneous. This Agreement may not be assigned, or any duties delegated, in whole or in part, by Employee without the prior written consent of Employer. Employer may assign this Agreement to another entity upon written notice to Employee. This Agreement, and any written employment agreement between the Employee and the Company, constitutes the entire agreement between Employee and Employer as it relates to Employee’s employment by Employer, and supersedes any other agreement, either oral or written with the exception of any agreements concerning confidentiality, trade secrets, non-solicitation or non-competition, all of which shall remain in full force and effect, and are hereby confirmed and ratified. Employee understands and agrees that nothing in this Agreement shall be understood, argued and/or interpreted to alter Employee's status as an at-will employee whose employment may be terminated by Employer at any time, with or without cause. This Agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

17.Controlling Law and Forum. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Illinois, without reference to principles of conflicts of laws. Each party agrees to bring any action or proceeding in connection with any claim arising out of or related to this Agreement, whether in tort or contract or at law or in equity, exclusively in the United States District Court for the Northern District of Illinois or the courts of the State of Illinois (the “Chosen Courts”) and (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts for purposes of any such action or proceedings, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (iv) consents to the service of process in any such action or proceeding by certified or registered mailing of the summons and complaint therein directed to Employee at Employee's last known address on file with Employer or Employer through the Senior Vice President of Human Resources at its principal place of business in Chicago, Illinois.

18.Modification and Severability. It is the intention of the parties that if, in any action before any court empowered to enforce such covenants, any term, restriction, covenant, or promise is found to be unenforceable, then such term, restriction, covenant, or promise shall be deemed modified to the extent necessary to make it enforceable by such court. The parties agree that in the event that any part of the Agreement shall be declared invalid, it shall not affect the validity of any of the remaining terms or provisions of the Agreement. The covenants and agreements of Employee above shall survive the termination of this Agreement for any reason.

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS READ AND UNDERSTANDS THIS AGREEMENT IN ITS ENTIRETY, HAS REVIEWED THIS AGREEMENT WITH INDIVIDUALS OF EMPLOYEE'S OWN CHOOSING, AND THAT EMPLOYEE HAS ENTERED INTO THIS AGREEMENT VOLUNTARILY, AND INTENDS TO BE BOUND THEREBY.



Accepted and Agreed:			USCC Services, LLC
			By:
Employee (signature)

			Title:
Printed Employee Name

Date:			Date:

Exhibit 10.7

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”) is effective as of June 19, 2020, by and between USCC Services, LLC (the “Company”) and Steven T. Campbell (“Executive”).

WHEREAS, the Company employs Executive as its Executive Vice President and Chief Administrative Officer;

WHEREAS, the Company and Executive entered into that Retention Agreement dated as of April 12, 2018, as amended effective as of December 20, 2019 (the “Retention Agreement”), pursuant to which the parties agreed to enter into a mutually acceptable consulting agreement, provided that Executive retired on or after May 8, 2020 (or such later date as the Company’s first quarter 10Q is filed) and satisfactorily performed his job duties until his retirement date;

WHEREAS, Executive has informed the Company that he will retire as an employee of the Company effective June 19, 2020 (“Retirement Date”), and Executive has met his obligations set forth in the Retention Agreement; and

WHEREAS, in recognition thereof, the Company and Executive desire to enter into this Agreement.

NOW, THEREFORE, in consideration for the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which each party expressly acknowledges, the Company and Executive agree as follows:

1.Consultant Retention. The Company retains Executive as a consultant and Executive accepts such retention upon the terms and conditions set forth in this Agreement.

2.Consulting Term. The term of Executive’s retention as a consultant shall begin on the Retirement Date and end on the third annual anniversary of the Retirement Date, unless terminated earlier by either party pursuant to the provisions of Paragraph 6 below (“Term”).

3.Consulting Services. From time to time at the reasonable request of the Company’s Chairman or President and Chief Executive Officer, Executive shall render consultation, advice, and information concerning the business and operations of the Company and its affiliates. Executive shall honor such reasonable requests for his services and shall devote reasonable time and his best efforts, skill, and attention to the diligent performance of his consulting duties as requested by the Company. In rendering any such services, Executive shall be free to arrange his own time, pursuits, and consulting schedule and to determine the specific manner in which his services will be performed, but he will use his best efforts to accommodate the scheduling requirements and the work of the Company. Executive shall not be obligated to provide consulting services to the Company in excess of ten (10) hours per calendar month.

4.Independent Contractor. Executive shall perform the duties described in Paragraph 3 above as an independent contractor without the power to bind, represent, or speak for the Company for any purpose whatsoever. Executive acknowledges his separate responsibility for all federal and state withholding income taxes, Federal Insurance Contributions Act taxes, and workers’ compensation and unemployment compensation taxes, if applicable, and agrees to indemnify and hold the Company harmless from any claim against it or liability relating to such taxes.

5.Consulting Fee. During the Term, the Company shall pay Executive a consulting fee in the amount of $22,500 per month. The Company will make such payment to Executive monthly commencing in July 2020 (with the July payment in the full amount of $22,500), but due to the six-month delay required under Section 409A of the Internal Revenue Code, the July through December 2020 payments will be made on December 21, 2020, in the lump sum amount of $135,000, with the $22,500 monthly payment continuing thereafter, with the last payment occurring in June 2023 (assuming that the Term ends in June 2023). The Company also shall reimburse Executive for reasonable expenses that he incurs in performing his consulting services provided that such expenses are pre-approved by the Company and Executive presents the Company with sufficient documentation supporting such expenses (which shall be submitted by Executive as soon as practicable). The Company will pay any such expenses within 30 calendar days of its receipt of Executive’s written expense reimbursement request and sufficient supporting documentation. The Company shall have no obligation to pay Executive any fee or benefit related to his consulting services other than that described in this Paragraph 5.

6.Termination. Notwithstanding any other provision of this Agreement, either the Company or Executive may immediately terminate Executive’s retention by the Company as a consultant for any reason upon written notice to the other party. In the event of a termination of Executive’s retention by Executive, the Company shall have no obligation to pay him any future consulting fee or benefit other than the pro rata consulting fee due and pre-approved expenses incurred for consulting services performed by him up to and including the date of termination. In the event of a termination of Executive’s retention by the Company other than due to Executive’s material breach of the terms of this Agreement, the Company shall, notwithstanding such termination, continue to pay the consulting fee to the Executive through the Term in accordance with the terms of Paragraph 5. No amount shall be payable to Executive under this Agreement in the event of and following any termination of Executive’s retention by the Company due to Executive’s material breach of the terms of this Agreement. Immediately upon termination of his retention, Executive shall return to the Company all of its and its affiliates’ property in his possession or under his control including, but not limited to, all of the Company’s confidential and proprietary information, documents, other information and equipment, and all copies thereof.

7.General Release. In further consideration for payments of the Consulting Fee set forth in Paragraph 5 above, Executive agrees to sign and return the General Release attached as an Appendix to this Agreement (and incorporated herein), no earlier than the Retirement Date, and no later than July 10, 2020, and not to revoke such General Release.

8.Nondisclosure and Use of Confidential and Proprietary Information. Executive represents and warrants that he is not in violation of his confidentiality and nondisclosure obligations (i.e., Confidentiality of Customer Communications; Safeguarding of Company Information; and Safeguarding of Confidential Personal Information) set forth in the Company’s Code of Business Conduct (“Code of Conduct”) and affirms his ongoing obligations to comply with those provisions during the Term and thereafter.

9.Protective Covenant. During Executive’s retention hereunder and for a period of two years after the end of the Term, Executive shall not, directly or indirectly, other than on the Company’s behalf, anywhere in the United States, engage in any activity that would be deemed to be Competition with Corporation as set forth in Section 1.15(a)(ii) of the Restated Bylaws, as amended, of United States Cellular Corporation (“Bylaws”).

10.Nondisparagement. At no time shall Executive disparage the Company, its affiliates, their services or products, or their owners, directors, officers, or employees.

11.Injunctive Relief. Executive acknowledges and agrees that the covenants contained in Paragraphs 8-10 above are reasonable in scope and duration, do not unduly restrict Executive’s ability to engage in his livelihood, and are necessary to protect the Company’s legitimate business interests. Without limiting the rights of the Company to pursue any other legal and/or equitable remedies available to it for any breach by Executive of the covenants contained in Paragraphs 8-10 above, Executive acknowledges that a breach of those covenants would cause a loss to the Company for which it could not reasonably or adequately be compensated by damages in an action at law, that remedies other than injunctive relief could not fully compensate the Company for a breach of those covenants and that, accordingly, the Company shall be entitled to injunctive relief to prevent any breach or continuing breaches of Executive’s covenants as set forth in Paragraphs 8 -10 above without the need to post a bond. It is the intention of the parties that if, in any action before any court empowered to enforce such covenants, any term, restriction, covenant, or promise is found to be unenforceable, then such term, restriction, covenant, or promise shall be deemed modified to the extent necessary to make it enforceable by such court.

12.Assignment. Executive acknowledges that the services to be rendered by him hereunder are unique and personal. Accordingly, Executive may not assign any of his rights or delegate any of his duties or obligations under this Agreement. The Company may, upon written notice to Executive, assign this Agreement to a purchaser or transferee of substantially all of the assets of the Company.

13.Mandatory Mediation and Waiver of Jury Trial. The Company and Executive agree that all disputes and claims of any nature that one party may have against the other party will be submitted exclusively first to mandatory mediation in Chicago, Illinois, or at another mutually agreed upon location, to JAMS dispute resolution services, or to such other individual or organization as the parties mutually may agree. All information regarding the dispute or claim or mediation proceedings, including any mediation settlement, shall not be disclosed by Executive, the Company, or any mediator to any third party without the written consent of the Company’s President and Chief Executive Officer and Executive. In the event that mediation does not resolve any dispute that the Company or Executive has with the other party and the Company or Executive proceeds to file a complaint in court, THE COMPANY AND EXECUTIVE HEREBY WAIVE ANY RIGHT TO A JURY TRIAL OF THAT DISPUTE.

14.Waiver. The Company’s or Executive’s waiver of any breach by the other party of any provision of this Agreement or failure to enforce any such provision shall not operate or be construed as a waiver of any subsequent breach by Executive or the Company of any such provision or of any other provision, or of the Company’s right to enforce any such provision or any other provision in the future. No act or omission of the Company or Executive shall constitute a waiver of any of its/his rights hereunder except for a written waiver signed by the Company’s President and Chief Executive Officer or Executive, as applicable.

15.Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable as written, the parties consent to and request that the court modify such provision to the minimum extent necessary to make it valid and legally enforceable. If such modification is not permitted or not possible, or if the proposed modification would not retain the intent of the parties, the parties agree that the provision shall be severed from the Agreement, and that the validity and enforceability of the remaining provisions of the Agreement shall not in any way be affected or impaired thereby.

16.Amendment. The terms of this Agreement may be modified only by a writing signed by both Executive and the Company’s President and Chief Executive Officer.

17.Post-Retention Effectiveness. Executive expressly acknowledges that Paragraphs 8 - 19 of this Agreement, as well as the terms of the General Release, remain in effect after the Term ends.

18.Governing Law. This Agreement shall in all respects be construed in accordance with and governed by the laws of the State of Illinois (without reference to principles of conflicts of law).

19.Entire Agreement. This Agreement, the Code of Conduct, and Section 1.15(a)(ii) of the Bylaws embody the entire agreement and understanding of the parties hereto with regard to the matters described herein, and supersede any and all prior and/or contemporaneous agreements and understandings, oral or written, between the parties with respect to the matters described herein.

20.Section 409A of the Internal Revenue Code. Amounts payable under this Agreement are intended to be exempt from (or alternatively, to comply with) the requirements of, Section 409A of the Internal Revenue Code, and shall be interpreted consistent with that intent.

21.Counterparts. This Agreement may be executed in counterparts, each of which taken together shall constitute one and the same instrument. Facsimile or electronic transmission of an executed counterpart of this Agreement shall be deemed to constitute due and sufficient delivery of such counterpart, and such signatures shall be deemed original signatures for purposes of enforcement and construction of this Agreement.



EXECUTIVE		USCC SERVICES, LLC

/s/ Steven T. Campbell		/s/ Kenneth R. Meyers
Steven T. Campbell		Kenneth R. Meyers
		President and Chief Executive Officer

Dated: June 19, 2020		Dated: June 19, 2020

APPENDIX

GENERAL RELEASE

In consideration for the payments set forth in Paragraph 5 of my Consulting Agreement with USCC Services, LLC (the “Company”), and for other good and valuable consideration, the receipt and sufficiency of which I expressly acknowledge, I agree as follows:

I, and anyone claiming through me, agree to release and discharge the Company and any and all parents, divisions, subsidiaries, partnerships, affiliates and/or other related entities (whether or not such entities are wholly owned), and each of those entities’ past, present, and future owners, trustees, fiduciaries, shareholders, directors, officers, administrators, agents, partners, employees, attorneys, and the predecessors, successors, and assigns of each of them (collectively, the “Released Parties”), from any and all claims, whether known or unknown, asserted or unasserted, foreseen or unforeseen, which I have, have ever had, or may ever have against any of the Released Parties arising from or related to any act, omission, or thing occurring at any time prior to the date that I sign this General Release including, but not limited to, any and all claims that in any way result from, or relate to, my employment or cessation of employment with any of the Released Parties. The released claims further include, but are not limited to, any and all claims that I or anyone acting on my behalf could assert or could have asserted in any federal, state, or local court, commission, department, or agency under any common law theory, or under any employment, contract, tort, federal, state, or local law, regulation, ordinance, or executive order including under the following laws as amended from time to time: the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Illinois Human Rights Act, and the Cook County and Chicago Human Rights Ordinances. I represent and warrant that I have not filed or initiated any legal proceeding against any of the Released Parties and that no such legal proceeding has been filed or initiated on my behalf. Notwithstanding the above, this General Release does not apply to any right that I have to indemnification, under the Restated Bylaws, as amended, of United States Cellular Corporation or otherwise, for any act or omission that occurred while I was an officer or director of United States Cellular Corporation or any affiliate thereof, or to any other claim that cannot be waived under applicable law.


2.	I acknowledge that I have been informed of my right to consult with a lawyer of my choice and that I have had sufficient time to consult with a lawyer before signing this General Release. I also acknowledge that I am entitled to a period of at least 21 days within which to consider the terms of this General Release before signing it.

I understand that within seven days following the date that I sign this General Release, I shall have the right to revoke this General Release by serving within such seven-day period written notice of my revocation upon the Company’s General Counsel. I further understand that if I do not revoke my signature on this General Release during that seven-day period, this General Release shall become effective on the eighth day after the date that I sign it and I shall have no further right to revoke this General Release.

I REPRESENT AND WARRANT THAT I HAVE READ THIS GENERAL RELEASE, I UNDERSTAND ITS TERMS, I HAVE REVIEWED THIS GENERAL RELEASE WITH INDIVIDUALS OF MY OWN CHOOSING AND I HAVE EXECUTED THIS GENERAL RELEASE VOLUNTARILY AND INTEND TO BE LEGALLY BOUND THEREBY.

EXECUTIVE

/s/ Steven T. Campbell

Steven T. Campbell

Dated: June 19, 2020

Exhibit 31.1

Certification of principal executive officer

I, Laurent C. Therivel, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of United States Cellular Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020



	/s/ Laurent C. Therivel
	Laurent C. Therivel President and Chief Executive Officer (principal executive officer)

Exhibit 31.2

Certification of principal financial officer

I, Douglas W. Chambers, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of United States Cellular Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020



	/s/ Douglas W. Chambers
	Douglas W. Chambers Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer)

Exhibit 32.1

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, Laurent C. Therivel, the principal executive officer of United States Cellular Corporation, certify that (i) the quarterly report on Form 10-Q for the second quarter of 2020 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of United States Cellular Corporation.



	/s/ Laurent C. Therivel
	Laurent C. Therivel
	August 6, 2020

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to United States Cellular Corporation and will be retained by United States Cellular Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, Douglas W. Chambers, the principal financial officer of United States Cellular Corporation, certify that (i) the quarterly report on Form 10-Q for the second quarter of 2020 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of United States Cellular Corporation.



	/s/ Douglas W. Chambers
	Douglas W. Chambers
	August 6, 2020