EFTA00690288.pdf

Ol t ; SUBJECT TO COMPLETION, DATED NOVEMBER 16, 2015 .= els 5 .= c E CU a- PRELIMINARY PROSPECTUS SUPPLEMENT E a (To Prospectus Dated November 16, 2015) o o «0 0 to c $ O . V3 a r CD .. , I= = CO to U.S. Cellular . C= United States Cellular Corporation % Senior Notes due a = to c We arc offering $ of our . Senior Notes due (the "Notes"). The Notes will mature on , . We will s— II pay interest on the Notes quarterly on . . the Notes. in whole or in part. at any time on and after and of each year. beginning . 2016. We may redeem . 2020 at a redemption price equal to 100% of the principal 5 >. to amount redeemed plus accrued and unpaid interest to the redemption date, as further described under "Description of the Notes— .= Redemption and Repayment." E ... The Notes will be our senior unsecured obligations and will rank on a parity with all of our existing and future senior unsecured cc obligations. The Notes will be issued in minimum denominations of $25 and integral multiples of $25 in excess thereof. ci.= We intend to apply to list the Notes on the New York Stock Exchange under the symbol "UZC." If the application is approved. t‘33 i— = 4) we expect trading in the Notes on the New York Stock Exchange to begin within 30 days after the original issue date. The Notes are expected to trade "flat." meaning that purchasers will not pay and sellers will not receive any accrued and unpaid interest on the Notes Id 6- that is not included in the trading price. 433 C3 I= cl , Investing in the Notes involves risks. See "Risk Factors" beginning on page S-6 and in our Annual Report on Form 10-K for the = to year ended December 31. 2014. as updated by our Quarterly Report on Form 10-Q for the quarterly period ended September 30. 2015. to co which are incorporated herein by reference. a Ce3 ca os co a Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these a= >. securities or passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation =.. = to the contrary is a criminal offense. os art E o Per Note Total(3) ts Public Offering Price(1) % $ c as m= Underwriting Discount(2) % $ oc cp Proceeds to U.S. Cellular (before expenses) % $ t = ca =— (I) The public offering price does not include accrued interest, if any. Interest on the Notes will accrue from . 2015 and o .11 ra .— must be paid to the purchaser if the Notes are delivered after such date. a (2) An underwriting discount of $ per Note (or up to $ for all Notes) will be deducted from the proceeds paid to us by ea — c g,3 the underwriters. CO ••••• • cm (3) Assumes no exercise of the underwriters' over-allotment option described below. t = We have granted the underwriters an option to purchase up to an additional $ aggregate principal amount of Notes, at the CO CO E :el public offering price less the underwriting discounts, within 30 days from the date of this prospectus supplement solely to cover A) = la over-allotments, if any. ci. ea The underwriters expect to deliver the Notes in book-entry form only through the facilities of The Depository Trust Company on =to y 03 about . 2015. = •.= loin: Book-Running Managers a = 03 (.3 0. 03 BofA Merrill Lynch 0 V) 2 ID Morgan Stanley O. VI a) er.= RBC Capital Markets es — UBS Investment Bank E in Wells Fargo Securities F. — in. 2 Lead Manager .Vf 03 z = Ciiigroup ..... 0 = 15 Co-Managers = 0 to BNY Mellon Capital Markets, LLC 'cu 03 Comerica Securities E 1, TD Securities .— — a • .13 0. US Bancorp V3 dc, a a-. Cla The date of this prospectus supplement is November . 2015. EFTA00690288  You should rely only on the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus or any related free writing prospectus we file with the Securities and Exchange Commission (the "SEC"). We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus supplement or the accompanying prospectus is accurate as of any date other than their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates. TABLE OF CONTENTS Page Prospectus Supplement About This Prospectus Supplement ii Alternative Settlement Date ii Summary S-1 Risk Factors S-6 Use of Proceeds S-9 Capitalization S-10 Description of the Notes S-11 Description of Other Indebtedness S-20 Material Federal Income 'Mc Considerations S-23 Underwriting S-29 Legal Matters S-31 Prospectus Forward Looking Statements 2 About This Prospectus 6 Risk Factors 7 U.S. Cellular 7 Use of Proceeds 7 Ratio of Earnings to Fixed Charges 8 Description of Debt Securities 9 Plan of Distribution 17 Legal Matters 19 Experts 20 Where You Can Find More Information 20 EFTA00690289  ABOUT THIS PROSPECTUS SUPPLEMENT Except as otherwise noted, all references to "U.S. Cellular," the "Company," "we," "us" and "our" in this prospectus supplement refer to United States Cellular Corporation and its consolidated subsidiaries. This document is in two pans. The first part is this prospectus supplement, which describes the specific terms of this offering and certain other matters. The second part, the accompanying prospectus, gives more general information about us and the Notes offered hereby. Generally, when we refer to the prospectus, we are referring to both parts of this document combined. To the extent the description of the Notes in this prospectus supplement differs from the description of the Notes in the accompanying prospectus, you should rely on the information in this prospectus supplement. ALTERNATIVE SETTLEMENT DATE It is expected that delivery of the Notes will be made on or about the date specified on the cover page of this prospectus supplement, which will be the fifth business day following the date of this prospectus supplement. Under Rule 15c6-I of the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly. the purchasers who wish to trade the Notes on the date of this prospectus supplement or the next succeeding business day will be required to specify an alternate settlement cycle at the time of any such trade to prevent failed settlement. Purchasers of the Notes who wish to trade the Notes on the date of this prospectus supplement or the next succeeding business day should consult their own advisors. EFTA00690290  SUMMARY The following summary is qualified in its entirety by reference to the more detailed information and consolidated financial information appearing elsewhere in or incorporated by reference into this prospectus supplement. U.S. Cellular U.S. Cellular is a wireless telecommunications service provider, offering wireless service to customers in the geographic areas where it has licenses to provide such service. U.S. Cellular differentiates itself from its competitors through a customer satisfaction strategy, striving to meet or exceed customer needs by providing a comprehensive range of wireless products and services, excellent customer support, and a high-quality network. U.S. Cellular's business development strategy is to acquire and operate controlling interests in wireless licenses in areas adjacent to or in proximity to its other wireless licenses, thereby building contiguous operating market areas. U.S. Cellular believes that operating in contiguous market areas will continue to provide it with certain economies in its capital and operating costs. • U.S. Cellular's customer base was 4,807,000 and its average market penetration in its consolidated operating markets was 15% at September 30, 2015. U.S. Cellular's average monthly postpay chum rate was 1.4% for the three months ended September 30, 2015. • For the nine months ended September 30, 2015, U.S. Cellular had total revenues of $3,009.8 million. For the year ended December 31, 2014, U.S. Cellular had total revenues of $3,892.7 million. • At September 30, 2015, U.S. Cellular operated in 23 states, which represents a total population of 31,814,000. U.S. Cellular has interests in consolidated markets which cover a population of 50,313,000 as of September 30, 2015. U.S. Cellular was incorporated in Delaware in 1983. Our executive offices are located at 8410 West Bryn Mawr Avenue, Chicago, Illinois 60631. Our telephone number is 773-399-8900. Our Common Shares are listed on the New York Stock Exchange under the symbol "USM." Our 6.95% Senior Notes due 2060 are listed on the New York Stock Exchange under the symbol "UZA." Our 7.25% Senior Notes due 2063 are listed on the New York Stock Exchange under the symbol "UZB." U.S. Cellular is a majority-owned subsidiary of Telephone and Data Systems, Inc. ("TDS"). As of September 30, 2015. TDS owns 84% of the combined total of our outstanding Common Shares and Series A Common Shares and controls 96% of the combined voting power of both classes of common stock in matter. other than the election of directors. S-I EFTA00690291  The Offering The sununary below describes the principal terms of the Notes. Some of the temis and conditions described below are subject to important limitations and exceptions. See "Description of the Notes" for a more detailed description of the temis and conditions of the Notes. References to "U.S. Cellular," the "Company," "we," "us" and "our" in this section captioned "The Offering" refer only to United States Cellular Corporation, the issuer of the Notes. Issuer United States Cellular Corporation Notes Offered $ (or $ if the underwriters exercise their overallotment option in full) of % Senior Notes due Maturity Date The Notes will mature on , . Interest The Notes will bear interest from , 2015 at the rate of % per year, payable quarterly in arrears. Interest Payment Dates and of each year, beginning , 2016. Optional Redemption We may redeem the Notes, in whole or in part, at any time on and after , 2020 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date. See "Description of the Notes—Redemption and Repayment." Ranking The Notes are our senior unsecured obligations and will rank on a parity with all of our existing and future senior unsecured obligations. However, in certain circumstances the Notes may become effectively subordinated to the claims of the holders of certain other indebtedness of the Company, of which approximately $532.9 million is currently outstanding. See "Description of the Notes—Ranking" and "Description of Other Indebtedness." In addition, because U.S. Cellular is a holding company which conducts substantially all of its operations through subsidiaries, the right of U.S. Cellular, and therefore the right of creditors of U.S. Cellular, including the holders of the Notes, to participate in any distribution of the assets of any subsidiary upon its liquidation or reorganization or otherwise is subject to the prior claims of creditors of the subsidiary, except to the extent that claims of U.S. Cellular itself as a creditor of the subsidiary may be recognized. As of September 30, 2015, our subsidiaries had approximately $2.2 million of long-term debt consisting of capital lease obligations. Use of Proceeds We expect to use the net proceeds for general corporate purposes, which may include acquisitions of additional spectrum. See "Use of Proceeds." S-2 EFTA00690292 Certain Covenants The Notes contain certain restrictions, including a limitation on our ability to incur secured debt and a limitation on our ability to enter into sale and leaseback transactions. See "Description of the Notes Certain Covenants of U.S. Cellular." Listing of the Notes We intend to apply to list the Notes on the New York Stock Exchange under the symbol "UZC." If the application is approved, we expect trading in the Notes on the New York Stock Exchange to begin within 30 days after the original issue date. Further Issues We may from time to time, without notice to or the consent of the holders of the Notes, issue additional debt securities having the same terms (except for the issue date and, in some cases, the public offering price and the first interest payment date), as and ranking equally and ratably with, the Notes, as described under "Description of the Notes—General." Any additional debt securities having such similar terms, together with the Notes offered hereby, will constitute a single series of securities under the Indenture. Denomination and Form We will issue the Notes in the form of one or more fully registered global notes registered in the name of the nominee of The Depository Mist Company ("DTC"). Beneficial interests in the Notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC. Except in the limited circumstances described in this prospectus supplement, owners of beneficial interests in the Notes will not be entitled to have Notes registered in their names, will not receive or be entitled to receive Notes in definitive form and will not be considered holders of Notes under the Indenture. The Notes will be issued only in minimum denominations of $25 and integral multiples of $25 in excess thereof. Governing Law Illinois. Trustee The Bank of New York Mellon Trust Company,.. Risk Factors Investing in the Notes involves risks. You should carefully consider the information set forth in the section of this prospectus supplement entitled "Risk Factors" beginning on page S-6, as well as the other information included in or incorporated by reference into this prospectus supplement and the accompanying prospectus before deciding whether to invest in the Notes. S-3 EFTA00690293  Summary Financial Data The balance sheet data as of December 31, 2013 and 2014 and statement of operations data fur each of the years ended December 31, 2012, 2013 and 2014 are derived from our audited financial statements and related notes, which are incorporated by reference herein from U.S. Cellular's Annual Report on Form 10-K for the year ended December 31, 2014. The balance sheet data as of December 31, 2012 are derived from our audited financial statements and related notes, which are not incorporated by reference herein. The balance sheet data as of September 30, 2015 and the statement of operations data for the nine months ended September 30, 2014 and 2015 are derived from our unaudited financial statements and related notes, which are incorporated by reference herein. The balance sheet data as of September 30, 2014 are derived from our unaudited financial statements and related notes, which are not incorporated by reference herein. In the opinion of management, our unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the unaudited interim periods. The results of operations for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year. The following summary financial and other data should be read in conjunction with our consolidated financial statements, and the notes relating thereto, incorporated by reference into this prospectus supplement and the accompanying prospectus. For or as of the For or as of the Year Ended Nine Months Ended December 31, September 30, 2012 2013 2014 2014 2015 (Dollars in thousands) Statement of Operations Data(a): Service revenues 54,098.856 53,594.773 53,397.937 52548.149 S2.548.544 Equipment sales 353.228 324,063 494.810 335.854 461.274 Operating revenues 4,452.084 3,918,836 3,892,747 2,884,003 3.009.818 Operating income (loss) 156.656 146,865 (143,390) (93,836) 336.537 Interest (expense) (42.393) (43.963) (57,386) (42,712) (61.239) Income (loss) before income taxes 205.053 257.656 (58,704) (24,002) 411.135 Net income (loss) attributable to U.S. Cellular shareholders 111.006 140.038 (42,812) (21,472) 243.010 Balance Sheet Data(a): Cash and cash equivalents 378,358 342.065 211,513 273.798 596.766 Short-term investments 103,676 50.104 — 40.014 — Investments: Licenses 1,456.794 1,401.126 1,443,438 1390.672 1.834.061 Goodwill(b) 421.743 387324 370.151 387324 369396 Unconsolidated entities 144331 265.585 283.014 296.900 347.710 Long-term investments 50.305 — — — — Total investments 2,073.373 2.054.235 2096.603 2,075.096 2,551.367 Total assets 6,587.450 6.445.708 6.487.268 6,257.075 6,938.384 Total long-term debt (including current maturities) 878.950 878.198 1.151.865 876.802 1,377.157 Other Data(a): Depreciation. amortization and accretion expense 608,633 803.781 605.997 465.042 450.035 Capital expenditures 836,748 737.501 557,615 375.960 334.942 Total customers 5,798,000 4.774.000 4,760,000 4,674.000 4.807.000 Market penetration rate(c) 12% 15% 15% 15% 15% Average monthly service revenue per customer(d) S 58.70 S 57.61 S 60.32 S 6043 S 5929 Smartphones sold as a percent of total handsets sold 59% 73% 81% 79% 87% Postpaid chum rate(c) 1.7% 1.8% 1.8% 1.9% 1.4% Ratio of earnings to fixed charges(f) 2.25x 2.98x 4.34x • Earnings for the year ended December 31, 2014 and the nine months ended September 30, 2014 were inadequate to cover fixed charges by 578.0 million and $55.2 million, respectively. S-4 EFTA00690294 fa) The above includes data for markets which U.S. Cellular currently consolidates, or previously consolidated in the periods presented, and has not been adjusted in prior periods presented for subsequent divestitures or deconsolidations. On May 17. 2013. pursuant to a Purchase and Sale Agreement. U.S. Cellular transferred customers and certain PCS license spectrum to Sprint Corp. in U.S. Cellular's Chicago, central Illinois, St. Louis and certain Indiana/Michigan/Ohio markets ("Divestiture Transaction"). On April 3, 2013. US. Cellular entered into an agreement with Vcrizon Wireless relating to US. Cellular's interest in two partnerships operating wireless networks in New York RSA 1 and New York RSA 2. As a result of such agreement. pursuant to accounting rules. U.S. Cellular deconsolidated such partnerships as of such date and thereafter has reported them as equity method investments in its consolidated financial statements (the "NY I & NY2 Deconsolidation"). Reference is made to U.S. Cellular's Form 8-K filed on May 3. 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 & NY2 Deconsolidation for the twelve months ended December 31. 2012, as if the transactions had occurred at the beginning of the period. Reference is made to U.S. Cellular's Form 8-K filed on February 26. 2014 for pro forma financial information related to the Divestiture Transaction and the NY1 & NY2 Deconsolidation for the twelve months ended December 31. 2013. as if the transactions had occurred at the beginning of the period. Reference is made to U.S. Cellular's Form 8-K filed on November 1, 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 & NY2 Deconsolidation for the nine months ended September 30, 2013. as if the transactions had occurred at the beginning of the period. (b) US. Cellular performs annual impairment testing of Goodwill, as required by GAAP, as of November 1 of each year. U.S. Cellular is currently in the process of performing this testing as of November I. 2015 and the results of such testing will not be available for several weeks. In order to estimate the fair value of U.S. Cellular's reporting units for purposes of goodwill impairment testing. GAAP requires that we incorporate assumptions which market participants would use and may not be indicative of U.S. Cellular specific assumptions. There arc uncertainties associated with these key assumptions and potential events and/or circumstances could have a negative effect on these key assumptions, as described in U.S. Cellular's Annual Report on Form 10-K for the year ended December 31, 2014. There can be no assurances that the testing will not result in a material impairment charge to Goodwill. Calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated operating markets, estimated by Claritas. Calculated by dividing Service revenues by average customers and number of months in the period. Service revenue consists of total retail service revenues, inbound roaming and other service revenues and postpaid, prepaid and reseller customers. Represents the percentage of the postpaid customers base that disconnects service each month. For purposes of calculating this ratio, earnings consist of income from continuing operations before income taxes, fixed charges, distributions from unconsolidated investments and amortization of capitalized interest, less equity in undistributed earnings of unconsolidated investments and noncontrolling interest in pretax income of subsidiaries that have not incurred fixed charges. Fixed charges consist of interest expense, capitalized interest, amortization of deferred debt expenses and estimated interest portion of rentals. Interest expense on income tax contingencies is not included in fixed charges. Considering, among other things, significant divestitures in recent years and an increasing amount of rental income in proportion to gross rent expense, U.S. Cellular revised its approach in the fourth quarter of 2014 in calculating this ratio to use gross rent expense. rather than net rent expense. for estimating the interest portion of rent expense. The ratio for prior periods have been recalculated to conform to this revision. S-5 EFTA00690295  RISK FACTORS Our business is subject to risks and uncertainties. Before deciding whether to invest in the Notes, you should carefully consider and evaluate all of the information included and incorporated by reference in this prospectus supplement and the accompanying prospectus, including the risks described below and the risks described in our Annual Report on Fonn 10-K for the year ended December 31, 2014, as updated by our latest Quarterly Reports on Form 10-Q. It is possible that our business, financial condition, liquidity or results of operations could be materially adversely affected by any of such risks. Additional risks that we do not yet know of or that we currently think are immaterial may also impair our business operations. We have a significant amount of indebtedness, which could adversely affect our financial performance and impact our ability to make payments on the Notes. Giving pro forma effect to this offering, we had $ million of long-term debt outstanding as of September 30, 2015. See "Capitalization." Our level of indebtedness could have important consequences to the holders of the Notes. For example, it: • may limit our ability to obtain additional financing for working capital, capital expenditures or general corporate purposes, particularly if the ratings assigned to our debt securities by rating organizations are revised downward; • will require us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal on our debt, reducing the funds available to us for other purposes including expansion through acquisitions, capital expenditures, marketing spending and expansion of our business; and • may limit our flexibility to adjust to changing business and market conditions and make us more vulnerable to a downturn in general economic conditions as compared to our competitors. Our financial performance and other radon could adversely impact our ability to make payments on the Notes. Our ability to make scheduled payments or to refinance our obligations with respect to our indebtedness will depend on our financial and operating performance, which, in turn, is subject to prevailing economic and competitive conditions and other factors beyond our control. In addition, our leverage may put us at a competitive disadvantage to some of our competitors that are not as leveraged. Ratings of the Notes may not reflect all risks of an investment in the Notes. We expect that the Notes will be rated by at least one nationally recognized statistical rating organization. A debt rating is not a recommendation to purchase, sell or hold the Notes. These ratings do not correspond to market price or suitability for a particular investor. Additionally, ratings may be lowered or withdrawn in their entirety at any time. Any real or anticipated downgrade or withdrawal of a rating by a rating agency that rates the Notes could have an adverse effect on the trading prices or liquidity of the Notes. Changes in our credit rating could adversely affect the market price of the Notes. Following the offering, the market price for the Notes will be based on a number of factors, including our ratings with major credit rating agencies. Credit rating agencies revise their ratings for the companies that they follow from time to time, including us. We cannot be sure that credit rating agencies will maintain their current ratings. A negative change in our ratings could have an adverse effect on the market price of the Notes. S-6 EFTA00690296 Changes in the credit markets could adversely affect the market price of the Notes. Following the offering, the market price for the Notes will be based on a number of factors, including: • the prevailing interest rates being paid by other companies similar to us; and • the overall condition of the financial markets. The condition of the credit markets and prevailing interest rates have fluctuated in the past and can be expected to fluctuate in the future. Fluctuations in these factors could have an adverse effect on the price and liquidity of the Notes. An increase in market interest rates could result in a decrease in the relative value of the Notes. In general, as market interest rates rise, notes bearing interest at a fixed rate generally decline in value. Consequently, if you purchase these Notes and market interest rates increase, the market values of the Notes may decline. We cannot predict the future level of market interest rates. We may not be able to comply with certain debt covenants, which could cause some of our other debt to become accelerated. The credit facility of U.S. Cellular, the indentures and other documents defining the rights of holders of existing indebtedness of U.S. Cellular and its subsidiaries and the Notes offered hereby contain various covenants. See "Description of Other Indebtedness" and "Description of the Notes." Although we are currently in compliance and intend to continue to comply with these covenants, we cannot assure you that we will be able to do so. Restrictions contained in these and other debt instruments may limit our operating and financial flexibility. An event of default, including a failure to comply with any of such covenants and/or restrictions, could make some or all of such debt immediately due and payable. The acceleration of a material portion of our indebtedness could have a material adverse effect on our financial position. An active trading market may not develop for the Notes, which could adversely affect the price of the Notes in the secondary market and your ability to resell the Notes should you desire to do so. The Notes are a new issue of securities and there is no established trading market for the Notes. We intend to apply for listing of the Notes on the New York Stock Exchange; however, we cannot make any assurance as to: • the development of an active trading market; • the liquidity of any trading market that may develop; • the ability of holders to sell their Notes; or • the price at which the holders would be able to sell their Notes. If a trading market were to develop, the future trading prices of the Notes will depend on many factors, including prevailing interest rates, our credit ratings published by major credit rating agencies, the market for similar securities and our operating performance and financial condition. If a trading market develops, there is no assurance that it will continue. S-7 EFTA00690297 We could enter into various transactions that could increase the amount of our outstanding debt, or adversely affect our capital structure or credit rating, or otherwise adversely affect holders of the Notes. Subject to certain exceptions relating to incurring certain liens or entering into certain sale and leaseback transactions, the terms of the Notes do not prevent us from entering into a variety of acquisition, divestiture, refinancing, recapitalization, highly leveraged transactions or other transactions. As a result, we could enter into any such transaction even though the transaction could increase the total amount of our outstanding indebtedness, adversely affect our capital structure or credit rating or otherwise adversely affect the holders of the Notes. Our holding company structure results in structural subordination and may affect our ability to make payments on the Notes. As a holding company, substantially all of our income and operating cash flow is dependent upon the earnings of our subsidiaries and the distribution of those earnings to, or upon loans or other payments of funds by those subsidiaries to, us. As a result, we rely upon our subsidiaries to generate the funds necessary to meet our obligations, including the payment of amounts owed under the Notes. Our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts due pursuant to the Notes or, subject to limited exceptions under certain intercompany agreements, to make any funds available to us to pay our obligations, whether by dividends, loans or other payments. Moreover, our rights to receive assets of any subsidiary upon its liquidation or reorganization (and the ability of holders of the Notes to benefit indirectly therefrom) will be effectively subordinated to the claims of creditors of that subsidiary, including trade creditors. Redemption may adversely affect your return on the Notes. We have the right to redeem some or all of the Notes prior to maturity, as described under "Description of the Notes—Redemption and Repayment." We may redeem the Notes at times when prevailing interest rates may be relatively low compared to rates at the time of issuance of the Notes. Accordingly, you may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as that of the Notes. S-8 EFTA00690298  USE OF PROCEEDS The net proceeds to be received by us from the offering, after deducting the underwriting discount and other offering expenses payable by us, are estimated to be approximately $ million (or approximately $ million if the underwriters exercise their overallotment option in full). We expect to use the net proceeds for general corporate purposes, which may include acquisitions of additional spectrum. Until the net proceeds are used for these purposes, we may deposit them in interest-bearing accounts or invest them in short-term investment securities. S-9 EFTA00690299  CAPITALIZATION The following table sets forth our cash and cash equivalents, short-term debt and capitalization at September 30, 2015 (i) on an actual basis and (ii) as adjusted to give effect to the sale of the Notes offered hereby (assuming no exercise of the underwriters' over-allotment option). The table should be read in conjunction with our financial statements, the notes to our financial statements and the other financial data included in or incorporated by reference into this prospectus supplement and the accompanying prospectus. September 30, 201S (unaudited) As Actual Adjusted (Dollars in thousands) Cash and cash equivalents: Cash and cash equivalents $ 596,766 $ Short-term debt: Revolving Credit Facility $ — $ Current portion of long-term debt 8,501 Tbtal short-term debt $ 8,501 $ Long-term debt: 7.25% Senior Notes due 2063 $ 275,000 $ 6.95% Senior Notes due 2060 342,000 $ 6.70% Senior Notes due 2033 532,940 Term Loan 216,562 Notes offered hereby Other 2,154 Total long-term debt 1,368,656 U.S. Cellular Shareholders' equity (000's): Series A Common and Common Shares: Authorized 190,000 shares (50,000 Series A Common and 140,000 Common Shares) Outstanding 84,288 shares (33,006 Series A Common and 51,282 Common shares) Par Value ($1 per share) (33,006 Series A Common and 55,068 Common Shares) 88,074 Additional paid-in capital 1,490,651 Treasury shares, at cost, 3,786 Common Shares (159,705) Retained earnings 2,135,145 ibtal U.S. Cellular shareholders' equity 3,554,165 Non controlling interests 11,665 Total equity 3,565,830 Total capitalization $4,934,486 $ S-10 EFTA00690300  DESCRIPTION OF THE NOTES The following description of the particular terms of the Notes supplements the description of the general terms and provisions of the "debt securities" set forth in the accompanying prospectus, to which reference is made. References to "U.S. Cellular," the "Company," "we," "us" and "our" in this section captioned "Description of the Notes" refer only to United States Cellular Corporation, the issuer of the Notes. General The following statements about the Notes are summaries and are subject to, and qualified in their entirety by reference to, the accompanying prospectus and the Indenture referred to in the prospectus. See "Description of Debt Securities" in the accompanying prospectus for additional information concerning the Notes and the Indenture. The following statements, therefore, do not contain all the information that may be important to you. Not all the defined terms used in this prospectus supplement are defined in this prospectus supplement. You should refer to the accompanying prospectus or Indenture for the definitions of certain terms. Subject to the discussion in this prospectus supplement, the Notes • will be issued under the Indenture, dated as of June 1, 2002, as amended or supplemented from time to time, between U.S. Cellular and The Bank of New York Mellon Trust Company, M. (formerly known as The Bank of New York Rust Company,.., as successor in interest to BNY Midwest Trust Company), as Trustee, • will mature on • will be issued in minimum denominations of $25 and integral multiples of $25 in excess thereof, • will be redeemable at our option, in whole or in part, at any time on and after , at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date as described under "—Redemption and Repayment" below, and • are expected to be listed on the New York Stock Exchange. Because U.S. Cellular is a holding company which conducts substantially all of its operations through subsidiaries, the right of U.S. Cellular, and hence the right of creditors of U.S. Cellular, including the holders of the Notes, to participate in any distribution of the assets of any subsidiary upon its liquidation or reorganization or otherwise is necessarily subject to the prior claims of creditors of the subsidiary, except to the extent that claims of U.S. Cellular itself as a creditor of the subsidiary may be recognized. Further Issuances The Indenture does not limit the amount of notes, debentures or other evidences of indebtedness that we may issue under the indenture and provides that notes, debentures or other evidences of indebtedness may be issued from time to time in one or more series. We may from time to time, without notice to or the consent of the holders of the Notes, issue additional debt securities having the same terms (except for the issue date and, in some cases, the public offering price and the first interest payment date) as, and ranking equally and ratably with, the Notes. Any additional debt securities having such similar terms, together with the Notes offered by this prospectus supplement, will constitute a single series of senior debt securities under the indenture. No additional notes may be issued if an event of default under the indenture has occurred and is continuing with respect to the Notes. S-11 EFTA00690301 Ranking The Notes will