Jane McCahon - VP, Corporate Relations Kenneth Meyers - EVP & CFO - TDS Steve Campbell - EVP, Finance, CFO & Treasurer - USM Mary Dillon - President & CEO - USM Vicki Villacrez - VP, Finance & CFO - TDS Telecom Dave Wittwer - President & CEO - TDS Telecom Alan Ferber - EVP, Chief Strategy and Brand Officer

Ric Prentiss - Raymond James Financial Phil Cusick - JPMorgan Simon Flannery - Morgan Stanley James Moorman - S&P Capital IQ Sergey Dluzhevskiy - Gabelli

Greetings and welcome to the TDS and U.S. Cellular fourth quarter conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mrs. Jane McCahon, Vice President of Corporate Relations for TDS. Thank you, Mrs. McCahon, you may begin.

Thank you, Louis. Good morning, everyone. Thank you for joining us. I want to make sure you all aware of the quarterly conference call presentation we have prepared to accompany our comments this morning which you can find on the Investor Relation pages of the TDS and U.S. Cellular website. With me today and offering prepared comments from TDS, Kenneth Meyers, Executive Vice President and CFO. From U.S. Cellular, Mary Dillon, President and Chief Executive Officer and Steve Campbell, Executive Vice President and CFO, and from TDS Telecom, Dave Wittwer President and CEO, and Vicki Villacrez, Vice President of Finance and CFO. This call is being simultaneously webcast on the Investor Relation sections of both the TDS and U.S. Cellular websites. Please see those websites for slides referred to on this call including non-GAAP reconciliations. The information set forth in the presentations and discussed during this call contains statements about expected future events and financial results that are forward looking and subject to risks and uncertainties. Please review the Safe Harbor paragraph in our releases and the more extended versions that will be included in our SEC filings. Shortly after we released our earnings results this morning and before this call, TDS and U.S. Cellular filed SEC Form 8-K current reports, including the press releases we issued this morning. Both companies plan to file their SEC Form 10-K later this afternoon. In the next couple of weeks we will be attending two conferences Morgan Stanley on February 28th in San Francisco and Raymond James, March 7th in Orlando and we will also be hosting analyst visits during CTIA in New Orleans on May 9. If you’d like to meet us in any of these events, let me know and we’ll try to accommodate you if at possible and keep in mind that we have an open-door policy. So if you are ever in the Chicago area and would like to meet with members of management from TDS Corporate, U.S. Cellular or TDS Telecom, the Investor Relations team will try to accommodate you calendars permitting. And with that, I’ll turn the call over to Ken Meyers.

Thank you, Jane, good morning. TDS ended 2011 in a strong position with revenues up 4%, operating income up 22% and net income available for common up 38%. We ended the year with a strong balance sheet, ample credit lines and for the most part, no unfunded pension liabilities. As you know, we termed out most of our debt during the year, pushing it out to 49 years. All of this gives us a significant financial flexibility as we continue to position our companies for future growth. In 2011, TDS incurred a federal net operating tax loss, attributable to the 100% bonus depreciation rules that were in effect. That resulted in current savings of cash taxes. The related future federal tax liabilities are accrued as a component of net deferred income tax liabilities on the balance sheet. TDS expects federal income tax payments to substantially increase to remain at higher levels for several years as the amount of the TDS federal tax depreciation deduction substantially decreases as a result of us having taken the accelerated depreciation in the previous years. This expectation assumes that federal bonus depreciation provisions are not enacted in future periods. Also in the fourth quarter, there were some unusual expenses and tax items, but I will comment on related to the share consolidation project, we had a $7.2 million in expense that was not tax deductible for tax purposes and there was $6 million adjustment to correct deferred tax balances related to tax spaces in some of the U.S. Cellular partnerships. We completed the share consolidation in January. As part of the consolidation, we issued approximately $4.9 million additional shares to our shareholders. Even though completed in January, the accounting rules require us to retroactively adjust shares outstanding, therefore EPS as of December 31st for the incremental 4.9 million shares issued in the reclassification. Similarly we have had to adjust capital in excess of power as well as retained earnings. On behalf of management and the board we thank you for your support on this initiatives and we look forward to capitalizing on additional opportunities, both operationally and strategically to strengthen the company and create shareholder value in the process. We are evaluating what those options may be and are listening to our shareholders on various ideas they may have much as we did with the share consolidation project. Some of the ideas we have heard so far are involved changes toward dividend and share buyback policies as well as more radical changes to our M&A activity as well as structure. Of course the devil is in the detail as we evaluate each scenario along with the legal complexities and long-term impact on the company and all of its constituencies.

With respect to net additions; in the postpaid segments there was a net loss of 20,000 customers, as the increase in gross editions was offset by an increase in churn. However as Mary Dillon will discuss in her comments we did have a positive postpaid net additions in December, the most competitive selling season of the year. In the prepaid segment we had an increase of 7,000 customers. So in total we lost 13,000 retail customers in the fourth quarter of this year compared to a net loss of 21,000 last year. Our churn results are shown on Slide 9. Postpaid churn increased to 1.63% from 1.52% last year which we attribute primarily to the launch of the new iPhone. The first new version introduced in the fourth quarter and across three national carriers, spanning a broader portion of our footprint. We continue to add customers to our Belief Plans, in fact 354,000 more during the fourth quarter, as they recognize the value and exceptional service that we provide. We currently have 3.1 million customers on our Belief Plans, which is critical to controlling and reducing churns as customers on our Belief Plans who are out of contract have significantly lower churn rates than legacy customers who are out of contract. Slide 10 reflects our smartphone sales, penetration growth and postpaid ARPU. During the fourth quarter we sold 505,000 smartphones which represented over 52% of total devices sold. This compares to the fourth quarter of 2010, when we sold 395,000 smartphones or about 40% of the units sold. Smartphones now represent over 30% of our postpaid subscriber base compared to about 17% at the end of 2010.Although, the overall cost to subsidize these device is greater the average revenue per customers also is higher and we expect that we will continue to benefit our results overtime. In fact as you can see in the graph in the far right postpaid ARPU has steadily increased over the several quarters, driven by strong smartphones sales being late in the fourth quarter of last year as well as by the continued migration of customers to the higher APRU Belief Plans. This trends has more than offset the effects of the overall competitive environment and a significant downward pressure on voice pricing over the past several quarters. Postpaid ARPU was up 5% year-over-year to $53.35 up from $50.99 a year ago. Also remember that as part of the required accounting for the Belief Plans US Cellular defers a portion of its revenues to properly account for the loyalty reward program. In the fourth quarter, the company deferred $11.7 million in net service revenue, which had it been recognized as service revenue during the quarter would have added another $0.73 to postpaid ARPU. That deferred revenue will be recognized in the future as either service or equipment revenues as the loyalty points are redeemed or used. So, turning now to our financial performance, which is shown on Slide 11. Service revenues for the quarter were $1.03 billion, which is an overall increase of 38 million or 4% from last year. And breaking that down a bit further, retail service revenues were 882 million, an increase of $17 million or 2%. Inbound roaming revenues increased once again, growing $26 million or 38% year-over-year to 93 million, primarily as a result of increased data roaming traffic. We expect to see continued but more modest growth in this very high margin revenue stream. System operation expenses of $242 million were up 26 million or 12% year-over-year. This was due primarily to higher usage and roaming expenses, as our customer use more data services, both on and off our networks. Through December of this year, total data network usage increased almost 3.5 times over the same period last year.Net loss on equipment for the quarter was $156 million, down 3 million from last year, primarily as a result of fewer total equipment transactions. The average loss per device sold was flat year-over-year despite the shift in mix to smartphones. In fact given the 28% increase in smartphones sold and their greater share of the overall mix, we believe that we’ve done a very good job of controlling our equipment costs by better balancing the types of devices offered and our promotions on them and introducing lower-cost, entry level smartphones to broaden our line-up.SG&A expenses are $470 million were down slightly year-over-year. Reductions in advertising and improvement in bad debts expense were offset by increases in other selling and G&A expenses, due primarily to higher spending for foreign exchange and [loaner] programs. Operating cash flow for the quarter of $162 million was up 15% compared to last year’s $141 million. And operating cash flow margin was 15.7% in the quarter compared to 14.3% last year.Moving on to Slide 12; below the operating income line, total investment and other income net for the quarter totaled $2.9 million, including earnings of approximately $12 million related to our interest in the Los Angles partnership. Net income attributable to U.S. Cellular shareholders totaled $2.8 million or $0.03 per diluted share versus $7.8 million or $0.09 per share in 2010. The tax rate for the fourth quarter this year was 58.9% compared to a tax benefit of 91.6% last year. As Kim already mentioned the company recorded an adjustment in the fourth quarter to correct its deferred tax balances related to partnership investments that increased income tax expense by $6.1 million in the quarter. Last year, income tax expense was reduced by favorable settlements of certain state income tax audits. And for the full year 2011 free cash flow was $216 million, net of cash used for additions to property, plant and equipment of $772 million, which increased $199 million or 34% over 2010. That higher spending reflects significant investments to deploy 4G LTE and for major initiatives such as our new billing and operational support system. U.S. Cellular’s balance sheet remains sound and we have significant liquidity and financial flexibility together with an expected cash flow from operations and funds available under our revolving credit facility to meet our financing needs. At December 31, cash and short-term investments totaled $551 million and we’ve about $300 million of unused borrowing capacity under our revolving credit agreement. So now let me turn the call over to Mary Dillon. Mary?

Thank you, Steve. Today I am going to focus mainly on our strategic priorities for 2012 and then we will finish with our financial expectations for the year. First, however, let’s take a moment to look at slide 13 and what we accomplished in 2011. I am very proud to lead U.S. Cellular and our talented associates as they are dedicated to keeping up competitive by making sure we give every customer an outstanding wireless experience. It’s important to note that we’ve been able to provide award-winning customer experiences while also improving our efficiency and paying close attention to the bottom line. : : Our success here was a result of our continued improvement in marketing and in store execution. And finally but importantly we also prepared for the launch of our first LTE markets and devices. This will further enhance our customer’s data experiences and our competitive position. Now let's turn to slide 14 and take a look at the economic and competitive outlook which is an important backdrop to our expectations for 2012. From our perspective, business conditions continue to be very challenging. Though the jobs picture appears to be improving modestly, we believe high unemployment will cause consumers to continue to be cautious with their spending and receive the great value for their money. Therefore we haven't incorporated any significant economic improvement into our projections. The wireless industry is more competitive than ever. Industry growth rates have been in decline since 2007 and penetration has likely crossed a 100%. As penetration increases and insurance stays relatively low, the pool of available switchers is getting smaller and of course we now have three competitors offering the iPhone in more markets. There's no doubt we feel the impact, but we will believe we made the right decision not to carry the iPhone under the terms and condition offered to us at the time. On the pricing front, most customers have introduced share pricing for data which is very sound and necessary given the explosive growth in data use. And we plan to do so later in the first half as part of an overall pricing refresh. Now, let’s turn to slide 15. We are intensely focus on growing our subscriber base in spite of the economy competitive landscape. We’re continuing to differentiate U.S. Cellular in the market place through our demonstrative focus on customer satisfaction. The fact that U.S. Cellular is ranked first in overall satisfaction among all postpaid wireless carriers in the US shows that our approach really resonates with customers. We need to build on that and do so cost effectively. We are making good progress in improving the effectiveness and efficiency of our marketing tools to drive greater awareness, consideration and conversion to U.S. Cellular. Our gross ad results and our analytic tool indicate that we’re gaining traction and improving the effectiveness of our traditional advertising as well as benefiting from the use of more robust digital and social media activity. To assist us in advancing our awareness further and faster, we hired a new ad agency this month. Additionally, the impact of our promotional activity continues to improve with more precise pricing across the full range of devices and more compelling integration of our industry-leading rewards program to drive both switching and advocacy. In fact in December we saw a sharp increase in our rewards program engagement which is a clear indication that consumers see real value in this differentiated service. The foundation of the Belief Project rewarding customers for their loyalty with relevant and meaningful benefits like early phone grades, over (inaudible) protection etcetera continues to differentiate us in the market place and will continue to be core to our strategy. : Now in addition to continued focus on our offerings and communications with our key customer segments, we are also continuing to strengthen the execution in our company-owned stores and agent stores through new training and tools. We are increasing our focus on small to medium business customers and we are looking to expand our points of distribution. And as I will speak about in a moment our ability to offer 4G LTE devices and services to over half of our customers by the end of the year will significantly enhance our competitive position. Now turning to slide 16, you will see that we plan to continue to drive ARPU growth by increasing smartphone penetration and data use. We have some exciting devices planned throughout the year to maintain a competitive device line up. We plan to introduce approximately 20 new devices in 2012 and more than half of them will be smartphones and we will continue to carry the top Android, Windows 7 and Blackberry devices. As I mentioned earlier, I am proud that we have achieved a healthier balance between our highend smartphone sales goal and the [feed] cost of subsidization. We successfully introduced a number of lower price smartphones. We are selling a number of smartphones with a sub-$200 cost and we see opportunities to further reduce cost in the year. This will help us offset the higher cost of our 4G devices and we will continue to manage this balance closely. Moving to slide 17, we will take a look at our technology path and how we see it evolving to support our smartphone strategy and ARPU goals. Now given the extraordinary increase in data use and penetration and its importance to our overall success, we plan to rollout 4G as quickly and as efficiently as possible. As we announced earlier this month, we will launch our Wave 1 markets over the next few weeks along with our first devices, a tablet in March and our first 4G smartphones in April. And lastly we announced our Wave 2 markets which will reach across much of our footprint, so that by the end of the year we expect to be offering 4G devices and service to over 54% of our subscribers. We plan to offer six to eight 4G devices this year and we will also continue to invest in 3G data capacity to support data use and high quality experiences on our EVDO network. Now before I turn back to Steve, I would like to outline our plans to improve profitability as summarized on slide 18. We expect to grow the top line in 2012 through increases in ARPU and roaming revenues as data traffic continues to grow. While we are focused on growing our subscriber base, we are also being realistic in terms of how quickly we will be able to do so given the intense level of competition we face. We also plan to launch pure data pricing during the first half of the year. We know that we have to tightly manage cost to translate our expected revenue increases into improved margins. We will also continue to fund the operational initiatives that are critical to our launch success. We have made good progress in many of these programs including our web initiatives which enable more customer transactions and the implementation of our enterprise data warehouse, customer relationship management system. The largest of these projects, the implementation of the new billing platform is moving forward and we expect to begin converting customers early next year. Steve will now walk us through our financial expectations for the year.

So, our guidance for the full-year 2012 is contained in today’s press release and it’s also shown on Slide 19 of our presentation. As you can see, we’re projecting services revenues, 4.05 billion to 4.15 billion, reflecting continued improvement in our ARPU and roaming as Mary just said, although roaming is not expected to grow at the same rate as it did last year. Offsetting that growth will be the impact of subscriber losses in 2011, flowing through the 2012 results, anticipating the impact of the launch of the new version of the iPhone and an expected loss of $16 million of EPC revenues beginning in July. Operating cash flow is expected to be in the range of $800 million to $900 million; depreciation, amortization and accretion of approximately 600 million, which then leads to operating income of between 200 million to 300 million. And finally, capital expenditures are expected to be approximately $850 million. I should note that this guidance is based on U.S. Cellular’s current plans. New developments or changing conditions such as the rate of growth and data usage, by the rate of deployment of 4G, could affect our plans and therefore our capital expenditures and operating expenses. Other factors influencing our current thinking about 2012 results includes significant risks related to service plan pricing and equipment subsidies. And while we are intensely focused on growing our subscriber base in 2012, we just don’t have the visibility to predict the degree to which we will be successful in that regard. Mary?

Thank you, Steve. To summarize our plan for the year, our highest priority is to drive subscriber growth by increasing net postpaid additions to the combination of relevant devices, price plans, advertising and promotion, along with our great customer experience. We plan to drive ARPU growth through continued smartphone penetration. We will also strengthen our business through expanded points of distribution. We will continue to invest in operational initiatives that will enable us to improve efficiency and ultimately reduce operational costs, all toward our goal of continuing to improve profitability. And importantly we will bring 4G network speeds in devices to over half of our market to support our ARPU goals. Now I would like to turn the call over to Vicki Villacrez and Dave Wittwer for a discussion of TDS Telecoms. Vicki?

Thank you, Mary. Good morning everyone. As shown on Slide 22, TDS Telecoms fourth quarter performance was highlighted by one, the continued growth in ILEC data revenues including the effects of hosted and managed service acquisitions; two, ongoing initiatives to stabilize traditional wireline revenues and line losses; and three, our continued cost control efforts. Turning to slide 23, revenues for Telecoms combined operations including hosted and managed services were up 4% from last year. ILEC revenue grew 6% with HMS acquisitions and our growth in high speed data more than offsetting declines in traditional voice and network access revenues. CLEC revenues were down 3% as the decrease caused by the declining number of residential customers exceeded the increase in commercial revenues for the quarter of 1.1%. Turning to slide 24, ILEC data revenues increased 45% in the fourth quarter driven by acquisitions and growth in hosted and managed services. A growth in high speed data subscriber additions earlier in the year also contributed to data revenues with subscribers growing 5% year-on-year. We continue to attract new customer and they are taking higher speed. The number of data subscribers taking speeds of five megabits or greater is now 57% and 17% are taking speeds greater than 10 megabits. Our residential DSL penetration was 62% of primary residential lines and residential DSL ARPU remained stable at $37 as migration to higher speed service offset competitive pricing pressure. The decline in ILEC revenues was driven by the continued trend in physical access loss as you can see on Slide 25. Line losses slowed to 5% as our Star voice packages continue to help us mitigate line loss. At year end we had a 198,000 customers on these plans, which are 56% of our residential customer base up from 46% from this time last year. As the result of our success with selling voice packages we seen an improvement in residential voice APRU. Turning to Slide 26, we continue to emphasis our Triple Play bundles voice, data, and video, with video offered primarily through our partner dish network. We added 1000 net Triple Play subscribers in the quarter bringing our penetration of customers to 29%. We know the importance of bundling and reducing churn. Churn on our Triple Play customers is very low at roughly 1.5% per month. We had measurable success with our bundled offerings with 67% of our residential customers on double or Triple Play bundle up from 62% last year. Turning to the commercial segment on Slide 27 we continue to lead with our hosted IP service we call managed IP. For telecoms combined operations we now have 43,000 stations installed and increase of 57% over last year. Turning to the P&L on Slide 28; consolidated cash expenses were up 11% for the period. ILEC cash expenses increased 16% with HMS acquisitions. A 1% decrease in CLEC expenses is in line with fewer residential customers. We have maintained our focus on cost control and will continue to see greater efficiencies throughout our organization. All in operating cash flow for the quarter was $62 million, a decrease from $69.1 million achieved in 2010 as high margin legacy voice and access revenue declined 4.2% which was now offset by the growth in HMS and data revenue. Our CapEx spending in 2011 was a $191 million. We did not spend as much as we expected on the broadband stimulus projects primarily due to administrative delays. So the majority of our portion of spending on these projects has been moved to 2012. Now I will turn this call over to Dave Wittwer.

Thanks Vicki, good morning everyone. I will discuss our accomplishments in 2011 and most importantly what we have planned and are already working on in 2012. First I will recap our accomplishments for the year as outlined on Slide 29. We made important progress on our residential and commercial business strategy. TDS telecom has made the transition to a broadband company with 94% of our access line having data access. And in 2011 we focused most of our network investment on increasing broadband speeds to remain competitive. A key part of our residential strategy is bundling and we ended the year with two thirds of ILEC residential customers on Double or Triple Play bundles, which have very low rates of churn. Another way of retaining residential customers and increasing revenues is through our proprietary IPTV service, TDSTV. We are launching TDSTV in two markets to fine tune the service and to prepare our network for further expansion. This video service along with our dish network offering will be a strong component of our bundling strategy going forward. In our commercial business we continue to grow the number of stations of our managed IP, voice and data communication product and we added important features and expanded the product portfolio in response to customer needs. We also continue to build our hosted and managed services business with the acquisition of OneNeck IT services an IT outsourcing and managed services provider with a global client list and we expanded two of our data center facilities due to increased customer demand for capacity. We are building our business for long-term and that means investing in our infrastructure. We have improved several key operational systems in 2011 to make our ordering, inventory and provisioning processes more efficient and we will continue that work in 2012. Moving to Slide 30; this shows what we expect from the economic, competitive and regulatory perspectives in 2012. As Mary said though there has been very modest [job] growth and we don’t expect to see any meaningful economic improvement in the year and that will continue to keep both our residential and commercial customers focused on their spending. From a competitive standpoint we face cable competitors in at least two-thirds of our markets. We believe we can continue to gain market share in these and other markets by continuing to increase broadband speeds, competitively priced bundles and superior customer service. Wireless substitution also remains a competitive threat. But one, we continue to battle with attractive product bundles that help reduce that churn. On the regulatory front, we believe that the SEC’s recent order to establish support mechanism called the ‘Connect America Fund’ and to reform the rules for Intercarrier compensation will provide greater predictability in the future for our wireline operations and supports further broadband expansion and development. However due to the follow-up proposals that the commission deferred to a later date, the number of petitions for reconsideration and the petitions for judicial appeal, it is difficult for us to say with any certainty what level of support we might receive under this new arrangement over the long term. And now I will discuss our residential and commercial strategies for 2012 beginning with slide 31. As I mentioned on the last slide, we plan to gain residential market share through our broadband and IP TV offerings, service bundles and customer service experience. We are building super high-speed data platform that will help us continue to deliver higher data speeds and also support our planned rollout of TDS TV to 19 markets in 2012. Both TDS TV and our existing dish network offering are important components of our service bundles. Bundling video with our broadband and voice services help us keep churn low and drive penetration and we believe that our proprietary video service will help to increase revenues of as well. We also expect to make significant progress out on our 44 stimulus funded projects to bring broadband access to remote communities across the US. Our goal is to make substantial progress towards completion of the majority of those projects in 2012. When completed approximately 97% of our access lines will have data access. Moving to our commercial strategy on slide 32, we continue to evolve the features and capabilities of our flagship managed IP voice and data communication platform. And our goal is to achieve aggressive growth in this area on par with last year. As businesses remain cautious about expending, we believe the fact that managed IP requires no capital investment and will continue to be very compelling to prospective customers. And our commercial customers themselves compete for customers in a struggling economy, managed IP’s productivity benefits enable businesses to spend more time focusing on their customers. Our hosted and managed services business is still very much in the growth phase. We plan to add to the portfolio in 2012 to build a diversified business product portfolio with a wide range of offerings including [Technical Difficulty] services, cloud services, IT services and other business solutions. We are also expanding our existing HMS capacity as demand increases for secured data storage and reliable services. And I will turn the call back to Vicki to review our 2012 guidance.

Thank you, Dave. In terms of our 2012 guidance we expect revenue in the range of $810 million to $840 million as data growth from our broadband offerings and HMS business offset declines in network access and voice revenue. We are forecasting operating cash flow to be in the range of $245 million to $275 million which would be a decrease from 2011. This is partly because we had several discreet gains during 2011 totaling $9.4 million that will not be repeated this year. The other factor to consider is that we are expecting a continued decrease in network access revenues including the initial impact of USS reform which will cut safety net support. While we are offsetting those revenues with data revenues, we are not doing so at the same margin levels. Depreciation, amortization and accretion is expected to be approximately $190 million leading to operating income of $55 million to $85 million. Lastly, we expect CapEx to be in the range of $150 million to $180 million. Our CapEx is driven in part by the investment we are making to enhance our network, deliver competitive broadband services and improve our systems that support sales and customer service processes, included over 30 million of success based spending related to our optimism, we have over the ability to expand our IPTV offering and our continued success with managed IP and high speed data. CapEx will also be driven by the strategic initiatives that Dave had highlighted particularly one, the high speed network deployment to support future data products and video capability in the range of approximately $30 million, broadband stimulus funding, approximately $25 million of our own funds in 2012 and HMS approximately $15 million. So to summarize, we feel confident about our prospects for future growth and we look forward to reporting further progress as we move through out the year. Thank you for your interest and I’ll turn the call back over to Jane.

Thanks, Vicki. Louis, we’ll be ready to take questions and Alan Ferber who is our Executive Vice President, Chief Strategy and Brand Officer at U.S. Cellular will also join us for the Q&A period.

Thanks you. We will now be conducting a question-and-answer session. (Operator Instruction). Our first question comes from the line of Ric Prentiss from Raymond James Financial. Please proceed with your question. Ric Prentiss - Raymond James Financial: A couple of questions. I’d like to start on the whole USF access items. On the U.S. Cellular side, I think I heard you say, you expect $16 million in the ETC to effect in July. Was that an annual number or is that the half year effect?

That’s the half year effect. As we understand the order, we start to see a reduction of 20% per year effective July 1st. So, roughly about 10% of our revenue for this year, which was in the range of about 160 million. So that’s how we are forecasting the 16, so half-year effect. Ric Prentiss - Raymond James Financial: Half-year effect. And then on the TDS side, you mentioned briefly the negative effect of the USF in access, can you quantify for us how much is in the ILEC and in the CLEC as far as the impacts?

Sure. You know, as Dave said, it’s difficult for us to say what level of support we might receive under this new arrangement and what the impact of the order may have from a long-term perspective, but based on what we know today, is which is not a complete picture, as you know, there is a number of issues related to the rate of return carriers that impact us, that have not yet been resolved. So having said that, we do expect to lose about $3 million of USF support. That’s primarily related to the flash cut of our safety net funding and that’s a year-over-year number.

I want to add to my earlier response too because something Vicki said triggered an idea with me which is the reduction that we’re projecting for ETC of course, doesn’t assume at this point any, we see the funds any receipt or funds under the new mobility funds that have been created. You know, that would still be somewhat uncertain as to what we would get under those bonds if anything. So we haven’t built that into our forecast at this point. Ric Prentiss - Raymond James Financial: And so that was on the TDS side, the $3 million USF, there is further cuts on the access side too, right?

Yeah, there will be further cuts on the access side. Right now as we look at the access revenue and the wholesale revenues as it declined this year, we are expecting some further cuts next year as well as a number of companies that wont’ qualify for the high cost support. So overall it could be in the tune of upto about $15 million. Again, our strategy is around the IPTV and super-high speed data growth as well as HMS to try to offset those revenue decline. Ric Prentiss - Raymond James Financial: Right, but that [$15 million] is baked into your guidance?

Yes, it is. Ric Prentiss - Raymond James Financial: Okay. That helps a lot. And then switching gears, going back to wireless, I think you mentioned that you expect a new iPhone launch or a new iPhone launch is assumed is your guidance, is that a second half fourth quarter, just trying to gauge when we should expect and obviously it’s not from Apple, it is just your assumption, but just trying to gauge when you think that might affect you?

Yeah you know, we don’t have a specific timing assumption built in, we are just presuming that sometime in 2012 it is likely to be another iPhone launch.

Our next question comes from line of Phil Cusick from JPMorgan. Please proceed with your question. Phil Cusick - JPMorgan: So I guess start on ARPU, first can you talk about the loyalty points. I think you said $0.23, is that sort of incremental drag versus the third quarter number or is that the total drag you are experiencing now and at what point you expect that’s a more of a steady state runrate?

So the number that I quoted was actually $0.73. Sorry if that didn’t come through and that’s actually the net drag on the fourth quarter, that’s not a comparative number. That’s simply what the impact on the fourth quarter number would be. As far as when we would get to a steady state, I mean as we grow the base of customers continue to reward points, I think first of all we have had the plans in place about a year now. So we maybe getting into the point where you could say year on year. We will be getting to steady state, but assuming that we continue to grow the base which is our intention, we think that there could actually be some increase in that number over time. Phil Cusick - JPMorgan: And in terms of ARPU accretion and given the acceleration in the fourth quarter, it seems like this ramp up could go through 2012, is that fair or do you expect to sort of get to a steady state on smartphones and then sort of stall out?

No, I think it is fair to say that we believe that we will have incremental or incremental growth in ARPU as we go into and through 2012. I think when you look at our smartphone penetration where we are at today at roughly 30% of our base, we feel like we have got quite a bit of headroom there actually when you compare that to what penetration other carriers have. So we think there is still ample room for growth in ARPU as a result of smartphone penetration. Phil Cusick - JPMorgan: Great and then if we can get into the margins a little bit or I guess the costs, can you help us think about how you expect to see cost of service ramp through this year and between the LTE network build and what sounds like a little bit of a ramp in your own roaming costs, how should we look for that to grow.

Well, again I think it’s somewhat implied by our guidance. You know you see certainly at the midpoint of the range we've got about 1% overall growth in service revenues, well ARPU growth will drive some of that. We expect continuing growth in roaming as we said, although more modest than we saw in 2011. But when you look at our guidance on operating cash flow at the midpoint to the high end, you see a number that's somewhat flat to some growth, so I think in terms of overall costs you've got some competing things there. For one thing there are added costs associated with the LTE deployment, but another factor is that this is a big year for us in terms of progress on our major enablement initiative. So there is going to be a significant increase in operating expenses associated with the development and testing and so forth on the billing system. Also remember that that $16 million of ETC revenue, it is nearly virtually a 100% margin and falls to the bottom line. So I think we've got some competing things going on there in terms of margin contribution.

And Steve I was just going regarding that. In addition of course we are focused very keenly on managing costs across all everything we do. So whether it’s a continued focus on having smartphones that sub-200 price points in the portfolio, you know data management things within our network, WiFi off load compression. Continue to look at the ability to be the more efficient in fact with our marketing expense. So while we have forecast cost going up, we are also looking to continue to manage cost across the rest of the business as well. Phil Cusick - JPMorgan: Okay. Just maybe one last one; given where we are, higher CapEx, lower margins in 2012; when do you think U.S. Cellular can get back to sort of cash generating mode. Is that possible in ‘13 or is there a ….?

I am going to step in on this one, Phil, its Ken. Thirteen is definitely a possibility I think where there are two huge unknowns at this point in time that they cloud the picture, one is to meet the continued evolution of the products set with more and more smartphones driving the handset costs, that drives the revenue which is great, but the front end cost that’s going to effect margins this year and quite frankly, the more it effects margin this year, less next year to the extent that it takes a little bit longer, its going to flow into next year, right. Following up on the sales of smartphone is mixed data growth that has got a double effect on your network right now. One effect is the company is rapidly pushing out LTE now and building that into the network its got double operating cost because they are doing that but we’ve got the double, we’ve got the expense or the capital expense of putting it out there. At the same time we still have a bulk of our customer, all of our customer today, sitting there on EVDO using the data products and so you are investing in effect for two networks at the same time. So depending upon the piece of the first one I think its going even bigger impact on whether its 13 or not.

Our next question comes from the line of Simon Flannery from Morgan Stanley. Please proceed with your question. Simon Flannery - Morgan Stanley: Thanks a lot. Couple of questions for Mary. Mary, you talked about December being a good month for you. Perhaps you can just talk about what exactly was going on there. Were you able to get the churn back down again or was it an acceleration of gross adds and is this something that you’ve seen extend 2012. And may be you can also contrast the 4S launch with what had happened with iPhone 4 and what had happened when Verizon got the iPhone 4? And then on the LTE rollout, where are you in terms of data roaming and the potential to get some roaming agreements to give people a larger footprint on the LTE devices? Thanks.

Sure. Thank you, Simon. Yes, in December, we were really pleased to see the outcome of what I think was a combination of continuing to sharpen how we create demand in the market place and how we execute in our source. So, we saw improvement on our gross add performance sequentially as well as year-over-year. And we’re comparing ourselves to last year, of a more expensive promotion, where we had, a more lucrative phone offer as well as a much more tense competitive environment with the iPhone being available at multiple carriers at multiple price points. So, the fact that we’re able to grow our gross adds in December indicates that we’re improving on what we’re trying to do, which is be more relevant to our customer, our target customers, with the right communications and offering. So, we’re please by that and we really came out with positive net adds in December. So that was great. Having said that, we’ve seen an uptick in churn. So, as we look in to this year, we’re continuing to see some progress on gross adds but we’re continuing to see somewhat elevated churn. It’s not terribly surprising to us given the competitive environment and you can imagine that we’re extremely focused on continuing to do the things that are going well for us, in terms of, fighting for gross adds and getting some of those growing. But also churn mitigation and continuing to launch LTE, have the right smartphone offering, sharpen our marketing tools as well as really look to extend even where we sell, our point of distribution. So it’s kind of a story of two things and we are going to continue to work on the things that are working well and manage the churn. Your next question Simon about the iPhone. I’ll let Alan to take that one. I would say just, certainly more carriers and more price point that has more impact.

Yeah. I think that is the short answer. Certainly the iPhone 4S launch had a bigger impact than the iPhone 4 launch for Verizon earlier in the year. There are really a couple of drivers there. One is just timing. So this is the first iPhone launch in the fourth quarter. Second is across multiple carriers and third, it’s multiple carriers with iPhone at multiple price points and we didn’t have that situation earlier in the year. With regards to your last question on LTE data roaming, certainly something we are very, very focused on. Really two pieces that have to come together, one is obviously the agreement but the other is more on the device side. Our first devices won’t have the same LTE frequency as the larger national carriers. So as we move and evolve our devices over time that will open up additional data roaming opportunities.

Our next question comes from the line of James Moorman from S&P Capital IQ. Please proceed with your question. James Moorman - S&P Capital IQ: Thanks for taking my question. First just a little bit on your LTE rollout and the handset you looked to have. I heard Metro PCS talking yesterday and they looked to really expand this and they see price coming down in the second half but knowing that you. I know you have been disciplined with turning down the iPhone, but how do you look at this in terms of going after the real popular devices versus going after the lower end devices and also if you can just talk about the what you are seeing, you are talking about going to meter data pricing. Is this more just an anticipation of LTE and the higher data capacity or are you seeing anything with the number of Android devices and any strains on our network now? Thanks.

This Alan again. Let me take pure data pricing first. As we said in the past we really have two main drivers around pure data pricing, one is to be able to provide a lower entry point for our customers to get into a smartphone. The second is to monetize the growth in data usage. So that is for both EVDO and LTE. With regard to LTE devices certainly the first devices are going to be higher than our average smartphone costs. We do expect those cost to come down fairly rapidly by the fourth quarter of this year, the first quarter of next year and we expect, as we mentioned earlier to launch about six to eight devices this year smartphones, tablets, modems and WiFi hotspots and we expect the smartphone proportion of that to become much more to be available at multiple price points by the end of this year.

[Lewis], we have time for one more question.

No problem. Our last question comes from Sergey Dluzhevskiy from Gabelli. Sergey Dluzhevskiy - Gabelli: Hi guys good morning. Just have a couple of question for you. One question, on your spectrum position, if you can talk a little bit about your spectrum position and whether you have sufficient spectrum in your HMS to meet the medium churn data needs of your customers given the strong growth that obviously you are seeing and as you are allowed the LTE and at what point do you think you may need to add your he spectrum in a meaningful way and given I guess recent spectrum language that came out from the FCC what are the main sources of spectrum in your opinion that you will have realistic access to in the next few years?

: So we feel confident about our current spectrum position relative to our LTE roll out plans and we are going to continue to look for other sources of spectrum and as you indicate whether its spectrum that comes on the market through this current order, which will take some time as well as just continuing to look at the marketplace, we will keep our options open, but we feel good about our current position.

So I think on the second part of your question you were probably referring to the legislation that was signed earlier this week related to incentive options. So I guess our thoughts on that is that its probably going to be some time before any of the spectrum is actually available for commercial use since the FCC still needs some time to adopt our auction rules, to actually conduct the auction, broadcasters will need time to clear the spectrum and so forth. So I don't think its clear at this point and maybe think we won’t probably no for sometime what opportunities for [SpectraMax] acquisition, those incentive action might create for U.S. cellular. With that said we’re actually very pleased that congressional negotiators reached agreement on incentive auction legislation. We think obviously the need for additional spectrum is key to future delivery of broadband services and so we applaud both Congress and the Obama administration for their work on what we think it’s a real crucial bill. I think for now its monitor and stay close and access opportunity for U.S. cellular. Sergey Dluzhevskiy - Gabelli: All right. And last question on as the managed versus hosting space obviously you’ve made your position over there on and you indicated that looking for more positions to add to your capabilities. Could you comment a little bit more about your longer-term strategy in the space and maybe what kind of service or solutions that you are looking to add to your portfolio and what kind of scale do you seed to achieve in this segment in a medium term, lets say?

Sorry, this is Dave, when we think about this service app, we believe that the distinction between telecom service and IT services continues to bore. So our goal is to create a broad set of IT like services that we can offer to our commercial customer. We have the co-location assets now, we have some of them. We have the hosted application management services in OneNeck. Obviously there are other pieces that we think could be valuable you know more cloud computing capabilities, having more capabilities relative to managing that server infrastructure for our customers, security services. You know those types of activities. So we can offer that complete package. Where that likely stops is becoming, you know, we’re not interested in becoming an application developer, as an example, you know, software developer doing custom software applications. That’s not a way to think that spot needs to be. You know, I think, we obviously have to talk a lot about how large we expect that to be but you know, I think it’s reasonable to assume that if you get to a business like this, you need to make it meaningful. You know, we have large basic customers, commercial customers that we can go after. So, our expectations are that we can continue to grow this business at a reasonable pace.

That was the last question. I would like to turn the floor back over to Jane McCahon for closing comments.

I would like to thank you all for your participation today. Look forward to seeing you either in one of the upcoming conferences or at CTIA. Thanks.

This concludes today’s teleconference. You may disconnect your line at this time. Thank you for your participation.