Management’s Discussion and Analysis of Results of Operations and Financial Condition • Changes in the telecommunications regulatory environment, such  as wireless number portability and E-911 services, could adversely affect U.S. Cellular’s financial condition or results of operations  or ability to do business. • Changes in the supply or demand of the market for wireless  licenses, adverse developments in U.S. Cellular’s business or the wireless industry and/or other factors could result in an impairment of the value of U.S. Cellular’s investment in licenses, goodwill and/or physical assets, which may require it to write down the value of  such assets. • Conversions of debt, early redemptions of debt or repurchases  of debt, changes in prepaid forward contracts, operating leases, purchase obligations or other factors or developments could cause the amounts reported under Contractual Obligations to be different from the amounts presented. •U ncertainty of access to capital for telecommunications companies, deterioration in the capital markets, other changes in market condi- tions, changes in U.S. Cellular’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to it, which could require it to reduce its construction, development and acquisition programs. • Changes in the income tax rates or tax laws, regulations or rulings could have an adverse effect on U.S. Cellular’s financial condition  and results of operations. •W ar, conflicts, hostilities and/or terrorist attacks could have an adverse effect on U.S. Cellular’s business. • Changes in general economic and business conditions, both nation- ally and in the markets in which U.S. Cellular operates, could have an adverse effect on U.S. Cellular’s business. • Changes in accounting standards or U.S. Cellular’s accounting poli- cies, estimates and/or the assumptions underlying the accounting estimates, including those described under Application of Critical Accounting Policies and Estimates, could have a material effect  on its financial condition, changes in financial condition and results of operations. • Settlements, judgments, restraints on its current or future manner  of doing business and/or legal costs resulting from pending or future litigation could have an adverse effect on U.S. Cellular’s financial condition, results of operations or ability to do business. • Costs, integration problems or other factors associated with acquisi- tions/divestitures of properties and or licenses could have an adverse effect on U.S. Cellular’s financial condition or results of operations. • Changes in prices, the number of wireless customers, average revenue per unit, penetration rates, churn rates, selling expenses  and net customer retention costs associated with wireless number portability, roaming rates and the mix of products and services offered in wireless markets could have an adverse effect  on U.S. Cellular’s operations. • Changes in roaming partners’ rates, and the ability to provide voice and data services on other carriers’ networks could have an adverse effect on U.S. Cellular’s operations. • Changes in competitive factors with national and global wireless carriers could result in product and cost disadvantages and could have an adverse effect on U.S. Cellular’s operations. • Lack of standards and roaming agreements for wireless data products could place U.S. Cellular’s data services offerings at a disadvantage to those offered by other wireless carriers with more nationwide service territories. • Changes in guidance or interpretations of accounting requirements, changes in industry practice or changes in management assumptions could require amendments to or restatements of disclosures or finan- cial information included in this or prior filings with the SEC. 38 MARKET RISK U.S. Cellular undertakes no obligation to update publicly any forward- looking statements whether as a result of new information, future events or otherwise. Readers should evaluate any statements in light  of these important factors. U.S. Cellular is subject to market rate risks due to fluctuations in interest rates and equity markets. U.S. Cellular currently has both fixed-rate  and variable-rate long-term debt instruments, with original maturities ranging from five to 30 years. Accordingly, fluctuations in interest rates can lead to significant fluctuations in the fair value of such instruments. As of December 31, 2003, U.S. Cellular has not entered into financial derivatives to reduce its exposure to interest rate risks. The annual requirements for principal payments on long-term debt and the average interest rates are as follows: Long-T erm Debt (1) Scheduled debt repayments include long-term debt and current portion of long-term debt, but exclude $160.3 million of unamortized discount on certain long-term  debt instruments. (2) Represents the average interest rate on all long-term debt shown for the  indicated period. (3) Average interest rate is variable based on the LIBOR rate plus 50 basis points. The December 31, 2003 three-month LIBOR rate of 1.15% was used for 2004-2007. Payments Due by Period After Total 2004 2005 2006 2007 2008 5 Years (Dollars in millions) Long-term Debt Obligations (1) $1,092.5 $108.0 $ — $ — $250.0 $ — $734.5 Average Interest  Rate on Debt (2) 7.1% 8.1% —% —% 7.3% —% 6.8% F orw ard Contracts $ 159.9 $ — $ — $ — $159.9 $ — $ — Average Interest  Rate on Forward  Contracts (3) 1.8% —% —% —% 1.7% —% —%