synergies and to exit those areas where it does not have opportunities  to build such synergies. Three of U.S. Cellular’s most recent transactions are summarized below. U.S. Cellular has deferred the assignment and development of  21 licenses it has the right to acquire from AT&T Wireless for  up to five years from the original closing date of August 1, 2003. When this transaction is fully consummated, U.S. Cellular will have received 36 wireless licenses in 13 states, approximately $34 million in cash and minority interests in six licenses in which it previously owned the controlling interest. The licenses received are contiguous to and overlap existing U.S. Cellular licensed areas in the Midwest and Northeast. U.S. Cellular’s operating income decreased 58% in 2003 and 11% in 2002. The decrease in 2003 is primarily due to the increased costs of acquiring, serving and retaining U.S. Cellular’s customers, the ongoing development of the Chicago market and losses on assets held for sale related to the exchange and sale transactions entered into with AT&T Wireless and loss on impairment of intangible assets. The decrease in 2002 is primarily due to increased costs related to the acquisition of and subsequent brand launch in the Chicago market. Operating income margins (as a percent of service revenues) were 4.9% in 2003, 13.4% in 2002 and 17.4% in 2001. U.S. Cellular anticipates that there will be continued pressure on  its operating income and margins in the next few years related to  the following factors: See “Financial Resources” and “Liquidity and Capital Resources.” 2003 Operating Results U.S. Cellular is committed to maintaining a strong balance sheet and its investment grade rating. During 2003 and 2002, U.S. Cellular entered into several financing transactions that have provided financial flexibility as it continues to grow its wireless business. These transactions are summarized as follows: U.S. Cellular had cash and cash equivalents totaling $9.8 million and $700 million of availability under its revolving credit facilities as of December 31, 2003. U.S. Cellular is also generating substantial cash flows from operations. Cash flows from operating activities totaled $621.7 million in 2003, $620.1 million in 2002 and $440.3 million in 2001. In addition, U.S. Cellular has access to public and private capital markets to help meet its long-term financing needs. Management believes that cash on hand, expected future cash flows from operations and existing sources of external financing provide substantial financial flexibility and are sufficient to permit U.S. Cellular to finance its  contractual obligations and anticipated capital expenditures. Financing Initiatives In the exchange and divestiture transactions discussed above, U.S. Cellular has divested operations that were generating revenues, cash flows from operations and operating income; however, a significant portion of such revenues, cash flows from operations and operating income was attrib- utable to inbound roaming traffic and was not primarily generated by U.S. Cellular’s customers in those markets. In exchange, U.S. Cellular received or will receive licenses that will be in a development phase for several years and also received cash. U.S. Cellular anticipates that it may require debt or equity financing over the next few years for capital expenditures, for the development of new markets and to further its growth in Chicago and its other recently launched markets. • On August 1, 2003, U.S. Cellular completed the transfer of properties to AT&T Wireless Services Inc., (“AT&T Wireless”) and the assign- ments to it by AT&T Wireless of a portion of the wireless licenses covered by the agreement with AT&T Wireless. On the initial closing date, U.S. Cellular also received approximately $34.0 million in cash and minority interests in six wireless markets in which it currently owns a controlling interest. Also on the initial closing date, U.S. Cellular transferred wireless assets and customers in 10 markets in Florida and Georgia to AT&T Wireless. • competition; • increased customer use of its services; • launching service in new areas; and • continued enhancements to its wireless network. • On November 26, 2003, U.S. Cellular announced that it had entered into a definitive agreement to sell certain wireless properties in six cellular markets in southern Texas to AT&T Wireless. The closing of the transaction occurred in February 2004. The U.S. Cellular assets sold to AT&T Wireless in this transaction included wireless properties and 76,000 customers. • On August 7, 2002, U.S. Cellular completed the acquisition of a  20 megahertz license in the Chicago basic trading area (excluding Kenosha, Wisconsin). U.S. Cellular acquired wireless properties and 320,000 customers in this transaction. This acquisition filled in  U.S. Cellular’s coverage area in the Midwest, enabling it to expand  its network to cover a contiguous area including most of Illinois, Wisconsin and Iowa. • slower customer growth; • customer acquisition and retention; • Sold $444 million of 30-year, 6.7% Senior Notes under an existing shelf registration statement and repaid all borrowings under its revolving credit facilities. • Amended its $325 million revolving credit facility entered into in 2002 to increase the capacity to $700 million. • Canceled its revolving credit facility entered into in 1997, which  had previously had a capacity of $500 million. • Monetized its investment in Vodafone Group Plc through forward contracts which mature in five years, receiving $159.9 million in cash. • Established a five-year, $325 million revolving credit facility with  a series of banks. • Sold $130 million of 30-year, 8.75% Senior Notes under an existing shelf registration statement. 2002 Management’s Discussion and Analysis of Results of Oper ations and Financial Condition 21