(1) The amounts as previously reported for the March 31, June 30, and September 30, 2003 and 2002 statements of operations and the 2003 balance sheets are based on amendment No. 2 to the March 31, 2003, June 30, 2003 and September 30, 2003 Quarterly Reports on Form 10-Q filed on March 10, 2004. The March 31, 2002, June 30, 2002 and September 30, 2002 balance sheet amounts have been adjusted to reflect a change in method of accounting for commission expense related to customer activations as described in the Cumulative Effect of Accounting Changes section of Note 1 “Summary of Significant Accounting Policies.” (2) Prior to the fourth quarter of 2003, costs for equipment sold to retain current customers were included in selling, general and administrative expense. Prior to the fourth quarter of 2003 and in part of 2002, these costs were partially offset by equipment sales revenues received from these customers. I part of 2002 and all of 2001, equipment sales revenues related to retaining current customers were included in equipment sales rev- enues. In the fourth quarter of 2003, U.S. Cellular changed its policy for classifying retention costs and has reclassified the equipment sales revenue and cost of equipment sold related to the retention of current customers out of selling, general and administrative expense into equipment sales revenues and cost of equipment sold, respectively, for each of the periods presented. (3) Prior to January 1, 2002, U.S. Cellular allocated the excess of purchase price over tangible assets and liabilities acquired to investment in licenses and goodwill. At that time, the accounting treatment for U.S. Cellular’s investment in licenses and goodwill was the same for book purposes, with both asset classes amortized over an expected life of 40 years. However, no deferred taxes were provided on the amounts allocated to goodwill. Based upon a subsequent review of goodwill, U.S. Cellular has restated the allocation of $138.9 million of purchase price recorded as goodwill to investment in licenses as of January 1, 2002, the date of the adoption of SFAS No. 142. In connection with this restatement, an additional deferred tax liability of $90.7 million wa s recorded as of January 1, 2002. The additional deferred tax liability recorded in conjunction with this restate- ment increased the carrying value of U.S. Cellular’ investment in licenses by a corresponding $90.7 million. Following these adjustments, U.S. Cellular reperformed the impairment tests for its investment in licenses as of January 1, 2002, and recorded an impairment loss upon $12.7 million ($20.9 million before income taxes of $8.2 million). This impairment has been recorded as a cumulative effect of an accounting change at January 1, 2002, the date of the adoption of SFAS 142. In the first quarter of 2003, U.S. Cellular had recorded a loss on assets held for sale related to the pending disposition of certain wireless properties. The investment in licenses upon which the impairment was recorded in the first quarter of 2002 included the investment in licenses of these properties. As a result, a portion of the originally recognized loss on assets held for sale in the first quarter of 2003 was recognized in the first quarter of 2002. Consequently, loss on assets held for sale in 2003 has been reduced by $1.9 million, before income taxes of $0.8 million. In the third quarter of 2003, U.S. Cellular had originally recorded an income tax expense upon the closing of the disposition of such wireless properties. This tax expense has been reduced due to the reversal of additional deferred tax liabilities that were recorded with respect to the wireless properties exchanged in conjunction with the restatement from goodwill to investment in licenses. Consequently, i ncome tax expense in 2003 has been reduced by $10.7 million. In addition, as a result of the restatement discussed above, U.S. Cellular also reperformed the annual impairment test for its investment in licenses for 2003, which was originally performed during the second quarter of 2003. This resulted in the recognition of an additional impairment loss of $49.6 million, before income taxes of $19.6 million. This additional loss has been recorded in the second quarter of 2003. 69 Effects of 2002 Accounting Changes Quarter Ended or at September 30, 2002 Quarter Ended or at December 31, 2002 Investment in Investment in Licenses Licenses As Previously and Goodwill Retention As Previously and Goodwill  Retention Reported (1) Restatements Reclassifications As Restated Reported (1) Restatements Reclassifications As Restated (Dollars in thousands, except per share amounts) Statements of Operations Operating Revenues Service $ 561,240 $ — $ — $ 561,240 $ 575,387 $ — $ — $ 575,387 Equipment sales (2) 18,546 — 6,485 25,031 26,546 — 6,623 33,169 Total Operating Revenues 579,786 — 6,485 586,271 601,933 — 6,623 608,556 Operating Expenses System operations  136,367 — — 136,367 130,324 — — 130,324 Cost of equipment sold (2) 51,595 — 19,755 71,370 66,733 — 19,585 86,318 Selling, general and administrative (2) 226,251 — (13,290) 212,961 268,238 — (12,962) 255,276 Depreciation 93,355 — — 93,355 83,704 — — 83,704 Amortization and accretion  9,521 — — 9,521 15,413 — — 15,413 Total Operating Expenses 517,089 — 6,485 523,574 564,412 — 6,623 571,035 Operating Income 62,697 — — 62,697 37,521 — — 37,521 Loss on marketable equity securities  and other investments (34,210) — — (34,210) (16,545) — — (16,545) Income (loss) before cumulative effect of accounting change 10,975 — — 10,975 14,629 — — 14,629 Cumulative effect of accounting change (3) — — — — — — — — Net income (loss) $ 10,975 $ — $ — $ 10,975 $ 14,629 $ — $ — $ 14,629 Weighted Average Shares Outstanding (000s) 86,095 — — 86,095 86,113 — — 86,113 Basic Earnings Per Share: Income (loss) before cumulative effect  of accounting change $ 0.13 $ — $ — $ 0.13 $ 0.17 $ — $ — $ 0.17 Cumulative effect of accounting change — — — — — — — — Net income (loss)  $ 0.13 $ — $ — $ 0.13 $ 0.17 $ — $ — $ 0.17 Diluted Earnings Per Share: Income (loss) before cumulative effect  of accounting change $ 0.13 $ — $ — $ 0.13 $ 0.17 $ — $ — $ 0.17 Cumulative effect of accounting change — — — — — — — — Net income (loss)  $ 0.13 $ — $ — $ 0.13 $ 0.17 $ — $ — $ 0.17 Balance Sheets Licenses $1,040,840 $ 208,641 $ — $1,249,481 $1,038,556 $ 208,641 $ — $1,247,197 Goodwill 629,541 (138,885) — 490,656 643,629 (138,885) — 504,744 Total Assets $4,454,754 $ 69,756 $ — $4,524,510 $4,699,841 $ 69,756 $ — $4,769,597 Net deferred income tax liability $ 396,986 $ 82,413 $ — $ 479,399 $ 359,401 $ 82,413 $ — $ 441,814 Retained earnings 1,112,125 (12,657) — 1,099,468 1,126,752 (12,657) — 1,114,095 Total Liabilities and Shareholders’ Equity $4,454,754 $ 69,756 $ — $4,524,510 $4,699,841 $ 69,756 $ — $4,769,597 Consolidated Quarterly Income Information As Restated (Unaudited)