Supplemental Shareholder Information Income (Loss) Before Cumulative Effect of Accounting Change and Diluted Earnings per Share were significantly affected by (1) loss on impairment of intangible assets, (2) loss on assets held for sale, (3) gains and losses from marketable equity securities and other investments and (4) ceasing the amortization of license costs and goodwill effective January 1, 2002, upon the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.” An analysis of these items, net of tax, is shown below. The amount of Operating Income before Depreciation, Amortization and Accretion and the As Adjusted amounts reported in the table of Financial Highlights on page 1 and in the above table of Supplemental Shareholder Information are non-GAAP financial measures under rules of the Securities and Exchange Commission. The reason for such information is to show the impact of amounts that have had a significant effect on mea- sures determined under generally accepted accounting principles (GAAP). U.S. Cellular does not intend to imply that any of the amounts that are included or excluded are non-recurring, infrequent or unusual or that they are not reasonably likely to recur. The non-GAAP measures are used by management to assess the operating performance of U.S. Cellular. U.S. Cellular believes that such non-GAAP measures provide useful information to investors regarding its results of operations in that they provide additional details regarding U.S. Cellular’s operating performance and facilitate comparison from period to period or with other companies. Nevertheless, such measures may not be consistent with similarly captioned measures reported by other companies, and such measures should not be construed as alternatives to measures of performance determined under GAAP. Selected Consolidated Financial Data  19 Management’s Discussion and Analysis of  Results of Operations and Financial Condition 20 Overview 20 Results of Operations  22 Recent Accounting Pronouncements 30 Financial Resources  30 Acquisitions, Exchanges and Divestitures 31 Liquidity and Capital Resources  32 Application of Critical Accounting  Policies and Estimates  35 Certain Relationships and Related Transactions 37 Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement 37 Market Risk  38 Consolidated Statements of Operations  40 Consolidated Statements of Cash Flows  41 Consolidated Balance Sheets – Assets  42 Consolidated Balance Sheets –  Liabilities and Shareholders’ Equity 43 Consolidated Statements of Changes in Common Shareholders’ Equity 44 Notes to Consolidated Financial Statements  45 Report of Management  63 Report of Independent Auditors  63 Copy of Previously Issued Report of Independent Accountants 64 Five-Year Statistical Summary  65 Consolidated Quarterly Income Information (Unaudited) 66 Shareholder Information  70 18 Financial Report  USE OF NON-GAAP FINANCIAL INFORMATION (a) Certain amounts have been restated to reflect changes to the implementation of Statement of Fi nancial Accounting Standards (“SFAS”) No. 142 “Goodwill and Other Intangible Assets,” as discussed in the Restatement section of Note 1 to the consolidated financial statements. Year Ended December 31, 2003 2002 2001 2000 1999 (as restated) (a) (Dollars in thousands, except per share amounts) Income (Loss) Before Cumulative  Effect of Accounting Change $ 57,006 $ (18,385) $173,876 $197,568 $300,758 Add (subtract) Loss on impairment of intangible assets 49,595 — — — — Loss on assets held for sale 45,908 — — — — (Gain) Loss on marketable equity securities  and other investments 5,200 295,454 — (96,075) (266,744) (Gain) Loss Adjustments 100,703 295,454 — (96,075) (266,744) Income Tax Expense (Benefit) (40,921) (112,199) — 44,912 106,565 Net (Gain) Loss Adjustments 59,782 183,255 — (51,163) (160,179) Net License and Goodwill Amortization — — 26,361 24,419 24,391 As Adjusted $116,788 $164,870 $200,237 $170,824 $164,970 Diluted Earnings per Share Before  Cumulative Effect of Accounting Change $ 0.66 $ (0.22) $ 1.99 $ 2.27 $ 3.28 Net (Gain) Loss Adjustments 0.69 2.11 — (0.56) (1.69) Net License and Goodwill Amortization — — 0.29 0.27 0.26 As Adjusted $ 1.35 $ 1.89 $ 2.28 $ 1.98 $ 1.85