10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)
[ x ]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to    

Commission file number 333-92214

Cellco Partnership
(Exact name of registrant as specified in its charter)

Delaware (State of Organization)	22-3372889 (I.R.S. Employer Identification No.)
180 Washington Valley Road Bedminster, New Jersey (Address of principal executive offices)	07921 (Zip Code)

Registrant’s telephone number (908) 306-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes Ö   No __

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes__  No Ö_

Table of Contents

Item No.

Part I. Financial Information		Page
1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations and Comprehensive Income
	Three and six months ended June 30, 2005 and 2004	1
	Condensed Consolidated Balance Sheets
	June 30, 2005 and December 31, 2004	2
	Condensed Consolidated Statements of Cash Flows
	Six months ended June 30, 2005 and 2004	3
	Notes to Unaudited Condensed Consolidated Financial Statements	4
2.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	9
3.	Quantitative and Qualitative Disclosures About Market Risk	19
4.	Controls and Procedures	19
Part II. Other Information
1.	Legal Proceedings	20
6.	Exhibits	21
Signature		23

Part I - Financial Information

Item 1. Financial Statements

Condensed Consolidated Statements of Operations and Comprehensive Income
Cellco Partnership (d/b/a Verizon Wireless)

(Dollars in Millions) (Unaudited)	Three Months Ended June 30,						Six Months Ended June 30,
		2005			2004			2005			2004
Operating Revenue
Service revenue	$	6,874		$	6,043		$	13,431		$	11,544
Equipment and other		972			804			1,833			1,465
Total operating revenue		7,846			6,847			15,264			13,009
Operating Costs and Expenses
Cost of service (excluding depreciation and amortization
related to network assets included below)		1,018			879			1,979			1,688
Cost of equipment		1,264			975			2,401			1,824
Selling, general and administrative		2,607			2,275			5,237			4,522
Depreciation and amortization		1,175			1,103			2,325			2,158
Total operating costs and expenses		6,064			5,232			11,942			10,192
Operating Income		1,782			1,615			3,322			2,817
Other Income (Expenses)
Interest expense, net		(159	)		(167	)		(327	)		(339	)
Minority interests		(48	)		(54	)		(98	)		(106	)
Other, net		5			2			7			5
Income before provision for income taxes		1,580			1,396			2,904			2,377
Provision for income taxes		(114	)		(98	)		(202	)		(170	)
Net Income		1,466			1,298			2,702			2,207
Other Comprehensive Income
Unrealized gain on derivative financial instruments		-			1			-			1
Comprehensive Income	$	1,466		$	1,299		$	2,702		$	2,208

See Notes to Unaudited Condensed Consolidated Financial Statements

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Condensed Consolidated Balance Sheets
Cellco Partnership (d/b/a Verizon Wireless)

(Dollars in Millions) (Unaudited)		June 30, 2005			December 31, 2004
Assets
Current assets
Cash	$	200		$	171
Receivables, net of allowances of $210 and $223		2,506			2,489
Unbilled revenue		278			333
Inventories, net		479			666
Prepaid expenses and other current assets		300			276
Total current assets		3,763			3,935
Property, plant and equipment, net		21,924			20,514
Wireless licenses, net		47,546			42,067
Other intangibles, net		408			613
Deferred charges and other assets, net		800			474
Total assets	$	74,441		$	67,603
Liabilities and Partners’ Capital
Current liabilities
Short-term obligations, including current maturities	$	2		$	1,535
Due to affiliates, net		6,877			7,521
Accounts payable and accrued liabilities		4,056			3,713
Advance billings		856			830
Other current liabilities		148			162
Total current liabilities		11,939			13,761
Long-term debt		2,498			2,495
Due to affiliates		9,281			2,781
Deferred tax liabilities, net		5,533			4,160
Other non-current liabilities		594			423
Total liabilities		29,845			23,620
Minority interests in consolidated entities		1,611			1,575
Partner’s capital subject to redemption		20,000			20,000
Commitments and contingencies (see Note 5)
Partners’ capital
Capital		23,027			22,450
Accumulated other comprehensive loss		(42	)		(42	)
Total partners’ capital		22,985			22,408
Total liabilities and partners’ capital	$	74,441		$	67,603

See Notes to Unaudited Condensed Consolidated Financial Statements

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Condensed Consolidated Statements of Cash Flows
Cellco Partnership (d/b/a Verizon Wireless)

(Dollars in Millions) (Unaudited)		Six Months Ended June 30,
		2005			2004
Cash Flows from Operating Activities
Net income	$	2,702		$	2,207
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,325			2,158
Equity in income of unconsolidated entities		(11	)		(9	)
Minority interests		98			106
Changes in certain assets and liabilities (net of the effects of purchased and
disposed businesses)		439			(109	)
Net cash provided by operating activities		5,553			4,353
Cash Flows from Investing Activities
Capital expenditures		(3,339	)		(2,747	)
Acquisitions of businesses, licenses and other assets, net of cash acquired		(4,099	)		(10	)
Wireless license deposits		(276	)		-
Distributions from unconsolidated entities, net		8			5
Net cash used in investing activities		(7,706	)		(2,752	)
Cash Flows from Financing Activities
Net proceeds from (payments to) affiliates		5,899			(11	)
Net change in short-term obligations		(1,533	)		(46	)
Distributions to partners		(2,126	)		(1,445	)
Contributions from minority investors		14			-
Distributions to minority investors, net		(72	)		(52	)
Net cash provided by (used in) financing activities		2,182			(1,554	)
Increase in cash		29			47
Cash, beginning of period		171			137
Cash, end of period	$	200		$	184

See Notes to Unaudited Condensed Consolidated Financial Statements

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Notes to Unaudited Condensed Consolidated Financial Statements
Cellco Partnership (d/b/a Verizon Wireless)

1. Background and Basis of Presentation

Cellco Partnership (the ‘‘Partnership’’), doing business as Verizon Wireless, provides wireless voice and data services and related equipment to consumers and business customers in the markets in which it operates. The Partnership is the most profitable wireless communications provider in the United States in terms of operating income and the second largest domestic wireless carrier in terms of the number of customers and revenues. The Partnership offers wireless voice and data services across one of the most extensive wireless networks in the U.S.

The accompanying unaudited condensed consolidated financial statements have been prepared based upon Securities and Exchange Commission (“SEC”) rules and regulations for interim reporting. These rules and regulations allow certain information required under accounting principles generally accepted in the United States of America to be condensed or omitted, provided that the interim financial statements, when read in conjunction with the Partnership’s annual audited consolidated financial statements included in the most recent Annual Report on Form 10-K for the year ended December 31, 2004, provide a fair presentation of the Partnership’s interim financial position, results of operations and cash flows. These interim financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown including normal recurring accruals and other items.

Certain reclassifications have been made to the 2004 condensed consolidated financial statements to conform to the current period presentation.

Recently Issued Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment.” This standard replaces SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with a) employees, except for certain equity instruments held by employee share ownership plans, and b) nonemployees when acquiring goods or services. In April 2005, the Securities and Exchange Commission (“SEC”) delayed the implementation date of SFAS No. 123(R). The Partnership will adopt the revised standard in the first quarter of 2006. The Partnership is currently evaluating the provisions of this statement and does not expect its adoption of SFAS No. 123(R) to have a material effect on the Partnership’s consolidated financial statements.

On March 29, 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107, “Share Based Payments.” This SAB expresses the views of the SEC staff regarding the relationship between SFAS No. 123(R), “Share-Based Payment” and certain SEC rules and regulations. In particular, this SAB provides guidance related to valuation methods, the classification of compensation expense, non-GAAP financial measures, the accounting for income tax effects of share-based payment arrangements, disclosures in Management’s Discussion and Analysis subsequent to adoption of SFAS No. 123(R), and interpretations of other share-based payment arrangements. The Partnership will adopt SAB No. 107 in conjunction with its adoption of SFAS No. 123(R) in the first quarter of 2006. The Partnership does not expect the adoption of this SAB to have a material effect on the Partnership’s consolidated financial statements.

In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations –an interpretation of SFAS No. 143.” This interpretation clarifies that the term “conditional asset retirement obligation” refers to a legal obligation to perform a future asset retirement when uncertainty exists about the timing and/or method of settlement of the obligation. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of the liability when sufficient information exists, as defined by the interpretation. An entity is required to recognize a liability for the fair value of the obligation if the fair value of the liability can be reasonably estimated. The Partnership will adopt the interpretation effective December 31, 2005. The Partnership is currently reviewing this interpretation, and does not expect its adoption of the interpretation to have a material effect on the Partnership’s consolidated financial statements.

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2. Wireless Licenses and Other Intangibles, Net

The Partnership treats wireless licenses as an indefinite life intangible asset under the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets.” The wireless licenses are not amortized but rather tested for impairment. The Partnership reevaluates the useful life determination for wireless licenses at least annually to determine whether events and circumstances continue to support an indefinite useful life.

The Partnership has evaluated its wireless licenses for potential impairment using a direct value methodology effective January 1, 2005 in accordance with SEC Staff Announcement No. D-108, “Use of the Residual Method to Value Acquired Assets other than Goodwill.” The valuation and analyses prepared in connection with the adoption of a direct value method resulted in no adjustment to the carrying value of the Partnership’s wireless licenses and, accordingly, had no effect on its results of operations and financial position. Future tests for impairment will be performed at least annually and more often if events or circumstances warrant.

Other intangibles, net, which primarily represent acquired customer lists, have a finite useful life of four to eight years and are amortized on an accelerated basis.

The changes in the carrying amount of wireless licenses are as follows:

(Dollars in Millions)	Wireless Licenses, Net (a)		Wireless Licenses Associated with Equity Method Investments (b)			Total
Balance, net, as of January 1, 2005	$	42,067	$	30	$	42,097
Wireless licenses acquired (See Note 3)		5,399		-		5,399
Other		80		-		80
Balance, net, as of June 30, 2005	$	47,546	$	30	$	47,576

(a)	Interest costs of $80 and $48 were capitalized in wireless licenses during the six months ended June 30, 2005 and the year ended December 31, 2004, respectively.
(b)	Included in deferred charges and other assets, net.

Other intangibles, net, consist of the following:

(Dollars in Millions)		June 30, 2005		December 31, 2004
Customer lists (4-7 yrs.)	$	3,434	$	3,428
Other (8 yrs.)		22		2
		3,456		3,430
Less: accumulated amortization (a)(b)		3,048		2,817
Other intangibles, net	$	408	$	613

(a)	Amortization expense for the three and six months ended June 30, 2005 was $117 and $231, respectively. Amortization expense for the three and six months ended June 30, 2004 was $117 and $235, respectively.
(b)	Based solely on amortizable intangible assets existing at June 30, 2005, the estimated amortization expense for the five succeeding fiscal years is as follows:

Remainder of 2005	$	231
2006	$	136
2007	$	16
2008	$	8
2009	$	4

3. Business Combinations and Other Acquisitions

On March 4, 2005, the Partnership completed the purchase from Qwest Wireless, LLC of all of its PCS licenses and related network assets for $418 million in cash. The licenses cover a population of approximately 30.9 million in 62 markets, and will provide needed capacity in certain of the Partnership’s existing major markets, such as Denver, Portland, Phoenix, Salt Lake City and Seattle.

On April 13, 2005, the Partnership completed the purchase of all of the stock of NextWave Telecom Inc., whereby it acquired 23 PCS licenses and certain tax net operating losses for $3 billion in cash. The licenses cover a population of

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approximately 73 million and will provide spectrum capacity in key markets such as New York, Los Angeles, Boston, Washington D.C. and Detroit, and will expand the Partnership’s licensed footprint into Tulsa, Oklahoma.

On May 11, 2005, the Partnership acquired a PCS license in the San Francisco basic trading area (“BTA”) from Metro PCS, Inc. for $230 million. The license covers a population of approximately 7.3 million and will provide spectrum capacity in the San Francisco, Oakland and San Jose markets.

On May 13, 2005, the Partnership was granted 26 FCC licenses won in the FCC auction that concluded on February 15, 2005 of 242 PCS licenses (“Auction 58”). The Partnership was the high bidder on these licenses with bids totaling $365 million. The 26 licenses cover a population of approximately 20 million, including approximately 2.2 million in markets where the Partnership does not currently hold licenses. The licenses cover major markets, such as Charlotte, Cleveland, St. Louis and San Diego. The Partnership has made all required payments to the FCC for these licenses.

Other acquisitions in the six months ended June 30, 2005 and 2004 consisted of various individually immaterial partnership interests and wireless licenses.

All of the acquisitions of businesses included in these amounts were accounted for under the purchase method of accounting with results of operations included in the consolidated statements of operations from the date of acquisition. Had the acquisitions of businesses been consummated on January 1 of the year preceding the year of acquisition, the results of these acquired operations would not have had a significant impact on the Partnership’s consolidated results of operations for each of the periods presented.

The following table presents information about the Partnership’s acquisitions for the six months ended June 30, 2005 and 2004:

(Dollars in Millions)	Acquisition Date		Purchase Price(a)		Wireless Licenses		Net Tangible Assets		Other Assets and Liabilities, net
2005
Qwest (b)	March 2005	$	418	$	392	$	39	$	(13	)
NextWave (b) (c)	April 2005	$	3,000	$	4,333	$	-	$	(1,333	)
Auction 58	May 2005	$	365	$	365	$	-	$	-
Metro PCS	May 2005	$	230	$	230	$	-	$	-
Various	Various	$	86	$	79	$	3	$	4
2004
Various	Various	$	10	$	9	$	1	$	-

(a)	Purchase price includes cash, assumption of debt, other liabilities, as well as the fair value of assets exchanged, as applicable.
(b)	The allocation of the purchase price is preliminary. However, the Partnership does not believe that future adjustments to the purchase price allocation will have a material effect on the Partnership’s financial position or results of operations.
(c)	Included in the transaction is the recording of a deferred tax liability, net.

4. Debt

Floating Rate Notes

On May 23, 2005, the Partnership repaid $1.5 billion of floating rate notes upon maturity. These notes were refinanced through intercompany borrowings.

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Term Notes Payable to Affiliates

On February 18, 2005, the Partnership signed an additional promissory note with Verizon Global Funding Corp. (“VGF”), a wholly-owned subsidiary of Verizon Communications, that permits the Partnership to borrow, repay and re-borrow from time to time up to a maximum principal amount of $6.5 billion with a maturity date of February 22, 2008. Amounts borrowed under the note bear interest at a rate per annum equal to one-month LIBOR plus 20 basis points for each interest period, with the interest rate being adjusted on the first business day of each month. As of June 30, 2005, the Partnership had borrowed $6.5 billion on this note. These borrowings are classified as due to affiliates (long-term) on the accompanying condensed consolidated balance sheets.

5. Commitments and Contingencies

Under the terms of an agreement entered into among the Partnership, Verizon Communications Inc. (“Verizon”) and Vodafone Group Plc (“Vodafone”) on April 3, 2000, Vodafone may require the Partnership to purchase up to an aggregate of $20 billion of Vodafone’s interest in the Partnership, at its then fair market value. Up to $10 billion was redeemable during the 61-day period that opened on June 10 and closed on August 9 in 2004. Vodafone did not exercise its redemption rights during that period. As a result, $20 billion, not to exceed $10 billion in any one year, remains redeemable during the 61-day periods opening on June 10 and closing on August 9 in 2005, 2006 and/or 2007. Verizon has the right, exercisable at its sole discretion, to purchase all or a portion of this interest instead of the Partnership. However, even if Verizon exercises this right, Vodafone has the option to require the Partnership to purchase up to $7.5 billion of this interest redeemable during the 61-day periods opening on June 10 and closing on August 9 in 2005, 2006 and/or 2007 with cash or contributed debt. Accordingly, $20 billion of partners’ capital has been classified as redeemable on the accompanying condensed consolidated balance sheets.

The U.S. Wireless Alliance Agreement, entered into between Vodafone and Verizon in September 1999, contains a provision, subject to specified limitations, that requires Vodafone and Verizon to indemnify the Partnership for certain contingencies, excluding PrimeCo Personal Communications L.P. contingencies, arising prior to the formation of Verizon Wireless.

The Partnership is subject to lawsuits and other claims, including class actions and claims relating to product liability, patent infringement, intellectual property, antitrust, partnership disputes, and relations with resellers and agents. The Partnership is also defending lawsuits filed against the Partnership and other participants in the wireless industry alleging adverse health effects as a result of wireless phone usage. Various consumer class action lawsuits allege that the Partnership violated certain state consumer protection laws and other statutes and defrauded customers through misleading billing practices or statements. These matters may involve indemnification obligations by third parties and/or affiliated parties covering all or part of any potential damage awards against the Partnership and/or insurance coverage.

All of the above matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, the ultimate liability with respect to these matters as of June 30, 2005 cannot be ascertained. The potential effect, if any, on the consolidated financial statements of the Partnership, in the period in which these matters are resolved, may be material.

In addition to the aforementioned matters, the Partnership is subject to various other legal actions and claims in the normal course of business. While the Partnership’s legal counsel cannot give assurance as to the outcome of each of these other matters, in management’s opinion, based on the advice of such legal counsel, the ultimate liability with respect to any of these actions, or all of them combined, will not materially affect the consolidated financial statements of the Partnership.

Acquisitions

On February 15, 2005, the FCC concluded an auction of 242 PCS licenses. Vista PCS, LLC (“Vista”) was high bidder on 37 of these licenses, available only to entities qualifying as an “entrepreneur” under FCC rules. Vista is a joint venture between the Partnership and Valley Communications, LLC, the results of which are consolidated by the Partnership. Vista’s winning bids totaled $332 million. The 37 licenses cover a population of approximately 34.4 million, including approximately 2.2 million in markets where the Partnership does not currently hold licenses. The licenses cover major markets, such as Charlotte, Cincinnati, Houston, Norfolk, Pittsburgh and Seattle. The Partnership has provided funding to Vista, through capital contributions and loans, in the amount of $314 million for payment for the Vista licenses. The granting of the licenses won in the auction by Vista remains subject to FCC approvals, which approvals are expected in the third quarter of 2005. The payments made by Vista to the FCC have been reflected as deposits and are included in Deferred Charges and Other Assets, Net, in the accompanying condensed consolidated balance sheet.

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6. Subsequent Events

In July 2005 the Partnership completed the purchase of spectrum licenses in 10 North Carolina markets from Urban Comm-North Carolina for $68.5 million. The purchase includes 10, 20 and 30 MHz licenses, in the 1.9 GHz PCS frequency range, covering a population of 3.9 million people. Three of the licenses will be used to expand the Partnership’s network to meet customers’ increasing demand for services in areas the Partnership currently serves, including Raleigh-Durham, Fayetteville and Burlington. The remaining licenses will be used to help expand the Partnership’s footprint into new markets, including Wilmington, Greenville, Rocky Mount, Roanoke Rapids, Goldsboro, New Bern and Jacksonville.

In August 2005, the Partnership completed the purchase of 23 PCS licenses and related network assets from Cricket Communications, Inc., a subsidiary of Leap Wireless International, Inc., and certain of its affiliates, for $102.5 million in cash. The licenses cover the Michigan BTAs of Battle Creek, Flint, Kalamazoo and Jackson, and 16 other markets in Michigan, Wisconsin, Alabama, Arkansas, Mississippi and New York. These licenses will provide an opportunity for additional expansion into markets in Michigan, Arkansas, Alabama, Mississippi and Wisconsin, and necessary capacity for existing markets in Michigan, Arkansas, Alabama, Mississippi and upstate New York.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations, “we”, “our”, “us” and “the Partnership” refer to Cellco Partnership d/b/a Verizon Wireless.

The following discussion and analysis should be read in conjunction with our consolidated financial statements for the years ended December 31, 2004, 2003 and 2002, respectively, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations," all of which are contained in our Annual Report on Form 10-K (No. 333-92214).

See “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of factors that could cause our future results to differ from our historical results.

Overview

We are the most profitable wireless communications provider in the United States in terms of operating income and the second largest domestic wireless carrier in terms of the number of customers and revenues. We offer wireless voice and data services across one of the most extensive wireless networks in the U.S. We believe our significant position within the wireless industry will allow us to take advantage of increasing penetration and usage trends within the United States in the coming years.

Our goal is to be the acknowledged market leader in providing wireless voice and data communication services in the U.S. Our focus is on providing a high-quality, differentiated service across a cost-effective digital network designed to meet the growing needs of our customers. To accomplish this goal, we will continue to implement the following key elements of our business strategy:

• Provide the highest network quality through our code division multiple access (“CDMA”) 1XRTT technology and the continued deployment of a new network technology, Evolution Data Optimized (“EV-DO”), which significantly increases data transmission rates.
• Profitably acquire, satisfy and retain our customers and increase the value of our service offerings to customers while achieving revenue and net income growth.
• Continue to expand our wireless data, messaging and multi-media offerings for both consumer and business customers and take advantage of the growing demand for wireless data services.
• Focus on operating margins and capital efficiency by driving down costs and leveraging our scale.

There is substantial competition in the wireless telecommunications industry. We compete primarily against four other national wireless service providers and we believe that the following are the most important competitive factors in our industry: network quality, capacity and coverage; customer service; distribution; product development; pricing and capital resources.

As a result of competition, we may encounter further market pressures to:

• respond to particular short-term, market-specific situations, for example, promotional service pricing or equipment discounts;
• introduce new service offerings at lower prices or restructure our service packages;
• increase advertising spending; or
• increase our capital investment to ensure we maintain or enhance our service quality.

Such market pressures could cause us to experience lower revenues, margins and average revenue per user, as well as increased capital spending to ensure proper capacity levels.

The following items highlight selected elements of our results of operations and financial position in the second quarter of 2005 as they relate to our key business strategies:

Customer growth: We ended the second quarter of 2005 with 47.4 million customers, an increase of 17.1% over the second quarter of 2004. We added more than 1.9 million net customers during the quarter while reducing our total churn to 1.22% compared to 1.45% for the second quarter of 2004. Retail postpaid customers comprised more than 92% of our total customer base as of June 30, 2005.

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Revenue growth: Total revenue grew by 14.6% in the second quarter of 2005 compared to the second quarter of 2004, to $7.8 billion, driven by customer growth and increased data revenue. We continue to experience a substantial year over year increase in data revenue and data revenue per customer has increased year over year.

Capital expenditures: We invested $3.3 billion in capital in the first six months of 2005 in order to increase capacity on our network for usage demand and to facilitate the introduction of new products and services through new technologies such as EV-DO. We expect to cover nearly half the U.S. population with our EV-DO network by the end of 2005.

Cash flows: We generated approximately $5.6 billion of cash from operating activities during the first six months of 2005, an increase of $1.2 billion over the first six months of 2004. We used this cash, together with incremental borrowings, to invest in our network through capital expenditures, acquire approximately $4.4 billion in wireless licenses, wireless license deposits and other wireless properties and to provide approximately $2.1 billion in distributions to our owners.

On August 1, 2005, it was announced that our products and services will no longer be available through Radio Shack effective upon the expiration of our existing agreement with Radio Shack on December 31, 2005. Although we cannot offer assurances, given our strong distribution structure, we do not anticipate that the expiration of this agreement will have a material adverse impact on our business.

Critical Accounting Policies and Estimates

The following discussion and analysis is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, the accounting for: allowances for uncollectible accounts receivable, unbilled revenue, fair values of financial instruments, depreciation and amortization, useful lives and impairment of assets, accrued expenses, inventory reserves, equity in income (loss) of unconsolidated entities, employee benefits, income taxes, contingencies and allocation of purchase prices in connection with business combinations. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from those estimates.

We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Revenue Recognition

We recognize service revenue based upon access to the network (access revenue) and usage of the network (airtime/usage revenue), net of credits and adjustments for service discounts. We are required to make estimates for service revenue earned but not yet billed at the end of each reporting period. These estimates are based primarily upon historical billed minutes. Our revenue recognition policies are in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 101, ‘‘Revenue Recognition in Financial Statements,” Emerging Issues Task Force Issue No. 00-21, “Revenue Arrangements with Multiple Deliverables” and SAB No. 104, “Revenue Recognition.”

Allowance for Doubtful Accounts

We maintain allowances for uncollectible accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We base our estimates on our historical write-off experience, net of recoveries, and the aging of our accounts receivable balances. If our actual future write-offs increase above our historical levels then we may need to provide additional allowances.

Valuation of Inventory

We maintain estimated inventory valuation reserves for obsolete and slow moving handset and data device inventory. We base our estimates on an analysis of inventory agings. Changes in technology may require us to provide additional reserves.

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Depreciation Expense

When recording our depreciation expense associated with our network assets, we use estimated useful lives and the straight-line method of accounting. As a result of changes in our technology and industry conditions, we periodically evaluate the useful lives of our network assets. Future evaluations could result in a change in our assets’ useful lives in future periods.

Intangible Assets

Our principal intangible assets are licenses which provide us with the exclusive right to utilize certain radio frequency spectrum to provide wireless communication services. Our wireless licenses have been treated as an indefinite life intangible asset under the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” and are no longer amortized but are tested for impairment at least annually or more often if events or circumstances warrant.

On September 29, 2004, the SEC issued a Staff Announcement regarding the “Use of the Residual Method to Value Acquired Assets other than Goodwill.” The Staff Announcement requires SEC registrants to adopt a direct value method of assigning value to intangible assets, including wireless licenses, acquired in a business combination under SFAS No. 141, “Business Combinations,” effective for all business combinations completed after September 29, 2004. Further, all intangible assets, including wireless licenses, valued under the residual method prior to this adoption are required to be tested for impairment using a direct value method no later than the beginning of 2005. Any impairment of intangible assets recognized upon application of a direct value method by entities previously applying the residual method should be reported as a cumulative effect of a change in accounting principle. Under this Staff Announcement, the reclassification of recorded balances from wireless licenses to goodwill prior to the adoption of this Staff Announcement is prohibited.

We have evaluated our wireless licenses for potential impairment using a direct value methodology effective January 1, 2005. The valuation and analyses prepared in connection with the adoption of a direct value method resulted in no adjustment to the carrying value of our wireless licenses, and accordingly, had no effect on our results of operations and financial position. Future tests for impairment will be performed at least annually and more often if events or circumstances warrant using a direct value method.

Valuation of Long-Lived Assets

Long-lived assets, including property, plant and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. The impairment loss, if determined to be necessary, would be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Consolidated Results of Operations

Customers

	Three Months Ended June 30,						Six Months Ended June 30,
		2005		2004		% Change	2005		2004		% Change
Customers (end of period) (thousands)		47,373		40,444		17.1%	47,373		40,444		17.1%
Net additions in the period* (thousands)		1,921		1,535		25.1%	3,557		2,922		21.7%
Average monthly churn		1.22	%	1.45	%	-15.9%	1.28	%	1.52	%	-15.8%

* Includes approximately 4 thousand customers in the three months ended June 30, 2005 and approximately 36 thousand customers in six months ended June 30, 2005 added through property acquisitions.

We ended the second quarter of 2005 with 47.4 million customers, compared to 40.4 million customers at the end of the second quarter of 2004, an increase of almost 7.0 million net new customers, or 17.1% . Approximately 40 thousand of these net new customers were added through acquisitions of properties in Minnesota and California. The overall composition of our customer base as of June 30, 2005 was approximately 92.4% retail postpaid, 3.2% retail prepaid and 4.4% resellers, compared to 91.6% retail postpaid, 4.0% retail prepaid and 4.4% resellers as of June 30, 2004.

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Approximately 46.3 million, or 97.7%, of our customers as of June 30, 2005, subscribed to CDMA digital service, compared to 38.4 million, or 95.0%, of our customers as of June 30, 2004.

More than 1.9 million customers were added through internal growth during the second quarter of 2005, compared to 1.5 million during the second quarter of 2004. Retail net additions, which accounted for approximately 99% of the total customers added during the second quarter of 2005, increased more than 30%, compared to the second quarter of 2004.

Our total average monthly churn rate, the rate at which customers disconnect service, decreased to 1.22% in the second quarter of 2005 and decreased to 1.28% for the six months ended June 30, 2005, compared to 1.45% in the second quarter of 2004 and 1.52% for the six months ended June 30, 2004, due to improvements in churn in both our retail and reseller customer bases. Retail postpaid churn decreased to 1.01% in the second quarter of 2005 and decreased to 1.06% for the six months ended June 30, 2005, compared to 1.19% in the second quarter of 2004 and 1.27% for the six months ended June 30, 2004.

Operating Revenue

(Dollars in Millions)		Three Months Ended June 30,					Six Months Ended June 30,
		2005		2004	% Change		2005		2004	% Change
Service revenue	$	6,874	$	6,043	13.8%	$	13,431	$	11,544	16.3%
Equipment and other		972		804	20.9%		1,833		1,465	25.1%
Total operating revenue	$	7,846	$	6,847	14.6%	$	15,264	$	13,009	17.3%
Average service revenue per
customer per month	$	49.42	$	50.80	-2.7%	$	49.23	$	49.44	-0.4%

Total operating revenue grew by $999 million, or 14.6%, in the second quarter of 2005 and $2,255 million, or 17.3%, for the six months ended June 30, 2005, compared to similar periods in 2004.

Service revenue. Service revenue grew by $831 million, or 13.8%, in the second quarter of 2005 and $1,887 million, or 16.3%, for the six months ended June 30, 2005, compared to similar periods in 2004. This increase was primarily due to the 17.1% increase in customers, offset by the decreases in average service revenue per customer for the three and six months ended June 30, 2005 compared to similar periods in 2004. The service revenue increase was also driven by data revenue increases of $228 million, or 89%, in the second quarter of 2005 and $444 million, or 98%, for the six months ended June 30, 2005, compared to similar periods in 2004. Data revenue accounted for 7.0% and 6.7% of service revenue for the three and six months ended June 30, 2005, respectively, compared to 4.2% and 3.9% for similar periods in 2004.

Average service revenue per customer per month decreased 2.7% to $49.42 for the second quarter of 2005 and decreased 0.4% to $49.23 for the six months ended June 30, 2005, compared to similar periods in 2004. These decreases were primarily due to pricing changes to our America’s Choice and Family Share plans earlier this year. Partially offsetting these decreases was a 62% increase in data revenue per customer for the second quarter of 2005 and a 69% increase for the six months ended June 30, 2005, compared to similar periods in 2004, driven by increased use of our messaging and other data services.

Equipment and other revenue. Equipment and other revenue grew by $168 million, or 20.9%, in the second quarter of 2005 and $368 million, or 25.1%, for the six months ended June 30, 2005, compared to similar periods in 2004. These increases were primarily attributable to an increase in equipment revenue, caused by an increase in wireless devices sold of 24% in the second quarter of 2005 and 26% for the six months ended June 30, 2005, compared to similar periods in 2004. The increases in units sold were driven by an increase in gross retail customer additions as well as equipment upgrades for the second quarter of 2005 and the six months ended June 30, 2005, compared to similar periods in 2004.

Revenue associated with certain regulatory fees, primarily the Universal Service Fund (“USF”), increased by $45 million in the second quarter of 2005 and $86 million for the six months ended June 30, 2005, compared to similar periods in 2004. The increase in the associated payments of these fees is reflected in selling, general and administrative expense. Offsetting these increases was a decrease in local number portability (“LNP”) cost recovery surcharges of $44 million for the second quarter of 2005 and $57 million for the six months ended June 30, 2005, compared to similar periods in 2004. We began collecting these LNP surcharges in March 2004, but discontinued collecting them in November 2004.

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Operating Costs and Expenses

(Dollars in Millions)		Three Months Ended June 30,					Six Months Ended June 30,
		2005		2004	% Change		2005		2004	% Change
Cost of service	$	1,018	$	879	15.8%	$	1,979	$	1,688	17.2%
Cost of equipment		1,264		975	29.6%		2,401		1,824	31.6%
Selling, general and administrative		2,607		2,275	14.6%		5,237		4,522	15.8%
Depreciation and amortization		1,175		1,103	6.5%		2,325		2,158	7.7%
	$	6,064	$	5,232	15.9%	$	11,942	$	10,192	17.2%

Cost of service. Cost of service grew by $139 million, or 15.8%, for the second quarter of 2005 and $291 million, or 17.2%, for the six months ended June 30, 2005, compared to similar periods in 2004. The increase was primarily due to increased network costs caused by increased network minutes of use of approximately 40% for the second quarter of 2005 and 37% for the six months ended June 30, 2005, compared to similar periods in 2004, partially offset by lower roaming, local interconnection and long distance rates. Service margins (service revenue less cost of service, divided by service revenue) were approximately 85% for both the second quarter of 2005 and the six months ended June 30, 2005, compared to 86% for the second quarter of 2004 and 85% for the six months ended June 30, 2004.

Cost of equipment. Cost of equipment grew by $289 million, or 29.6%, in the second quarter of 2005 and $577 million, or 31.6%, for the six months ended June 30, 2005, compared to similar periods in 2004. The increases were primarily attributed to an increase in wireless devices sold, driven by higher gross retail activations and equipment upgrades for the second quarter of 2005 and the six months ended June 30, 2005, compared to similar periods in 2004. The increases in handsets sold and equipment upgrades caused negative equipment margins (equipment revenue less equipment cost) to increase for the second quarter of 2005 and the six months ended June 30, 2005, compared to similar periods in 2004. We expect this trend to continue, to the extent we continue to increase the rate at which we add new customers, upgrade existing customer equipment and sell more data devices.

Selling, general and administrative expenses. Selling, general and administrative expenses grew by $332 million, or 14.6%, in the second quarter of 2005 and $715 million, or 15.8%, for the six months ended June 30, 2005, compared to similar periods in 2004. These increases were primarily due to an increase in salary and benefits expense of $97 million for the second quarter of 2005 and $259 million for the six months ended June 30, 2005, compared to similar periods in 2004. The salary and benefits expense increase was the result of higher per employee salary and benefits costs and an increase in employees, primarily in the sales and customer care areas. The increase in the per employee salary and benefits cost was principally driven by an increase in costs in the first six months of 2005 of approximately $120 million related to our long term incentive program.

Also contributing to the selling, general and administrative expense increases was a $88 million aggregate increase in sales commissions in our direct and indirect channels, for the second quarter of 2005 and a $131 million increase for the six months ended June 30, 2005, compared to similar periods in 2004, primarily related to the increase in gross customer additions and customer renewals in the second quarter of 2005 and the six months ended June 30, 2005, compared to similar periods in 2004. Advertising and promotion expenses increased by $57 million in the second quarter 2005 and $154 million for the six months ended June 30, 2005, compared to similar periods in 2004. To the extent gross customer additions and customer renewals continue to increase, we expect to continue to incur increased customer acquisition and retention-related expenses.

In addition, costs associated with certain regulatory fees, primarily USF, increased by $47 million in the second quarter 2005 and $88 million for the six months ended June 30, 2005, compared to similar periods in 2004. The revenue associated with these fees is reflected in equipment and other revenue (see equipment and other revenue discussion above).

Depreciation and amortization. Depreciation and amortization increased by $72 million, or 6.5%, for the quarter ended June 30, 2005 and $167 million, or 7.7%, for the six months ended June 30, 2005, compared to similar periods in 2004. This increase was primarily due to the increase in depreciable assets since the second quarter of 2004, as a result of our network build program. We expect depreciation expense to continue to increase over time as we continue to increase our capital spending to build-out and upgrade our network.

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Other Income (Expenses)

(Dollars in Millions)	Three Months Ended June 30,							Six Months Ended June 30,
		2005			2004		% Change		2005			2004		% Change
Interest expense, net	$	(159	)	$	(167	)	-4.8%	$	(327	)	$	(339	)	-3.5%
Minority interests		(48	)		(54	)	-11.1%		(98	)		(106	)	-7.5%
Other, net		5			2		150.0%		7			5		40.0%
Provision for income taxes		(114	)		(98	)	16.3%		(202	)		(170	)	18.8%

Interest expense, net. Interest expense, net, decreased by $8 million, or 4.8%, in the second quarter of 2005 and decreased by $12 million, or 3.5%, for the six months ended June 30, 2005, compared to similar periods in 2004. The decrease in the second quarter of 2005 was primarily due to an increase in capitalized interest of $54 million and a decrease in the weighted average interest rate for borrowings from Verizon Communications Inc. (“Verizon Communications”) from approximately 6.0% in the second quarter of 2004 to approximately 5.0% in the second quarter of 2005, partially offset by higher average debt levels. The decrease for the six months ended June 30, 2005 was primarily due to an increase in capitalized interest of $64 million and a decrease in the weighted average interest rate for borrowings from Verizon Communications from approximately 6.2% in the first six months of 2004 to approximately 5.4% in the first six months of 2005, partially offset by higher average debt levels.

Minority interests. Minority interests decreased by $6 million, or 11.1%, for the second quarter of 2005 and $8 million, or 7.5%, for the six months ended June 30, 2005, compared to similar periods in 2004. These decreases were mainly attributable to decreases in the rate of growth in income from subsidiary partnerships.

Provision for income taxes. Generally, the Partnership is not subject to federal or state tax on income generated from markets it owns directly or through partnership entities. However, the Partnership does own some of its markets through corporate entities, which are required to provide for both federal and state tax on their income. The tax provision was $114 million for the second quarter of 2005 and $202 million for the six months ended June 30, 2005. The effective tax rates were 7.2% for the second quarter of 2005, compared to 7.0% for the second quarter of 2004 and 7.0% for the six months ended June 30, 2005, compared to 7.2% for the six months ended June 30, 2004. The increase in the effective tax rate for the three months ended June 30, 2005 was mainly attributable to an increase in the proportion of income earned through corporate entities compared to markets owned directly or through partnership entities. The decrease in the effective tax rate for the six months ended June 30, 2005 was mainly attributable to a decrease in the proportion of income earned through corporate entities compared to markets owned directly or through partnership entities.

Consolidated Financial Condition

(Dollars in Millions)	Six Months Ended June 30,
		2005			2004			$ Change
Cash Flows Provided By (Used In)
Operating activities	$	5,553		$	4,353		$	1,200
Investing activities		(7,706	)		(2,752	)		(4,954	)
Financing activities		2,182			(1,554	)		3,736
Increase (Decrease) in Cash	$	29		$	47		$	(18	)

Historically, we have funded our operations and other cash needs utilizing internally generated funds and intercompany and external borrowings, and we expect to rely on a combination of these sources to fund continued capital expenditures, acquisitions, distributions and debt service needs. Sources of future intercompany and external financing requirements may include a combination of debt financing provided through intercompany debt facilities with Verizon Communications, borrowings from banks or debt issued in private placements or in the public markets. We believe that internally generated funds will be sufficient to fund anticipated capital expenditures, tax distributions and interest payments on our debt in the next several years. Internally generated funds would not be sufficient to repay the principal on our debt when due, including demand notes owed to Verizon Communications (if we were required to repay that debt in the next several years) and would not be sufficient to honor any exercise by Vodafone Group Plc (“Vodafone”) of its put rights. See “Cash Flows Used In Financing Activities.” We expect to refinance our outstanding debt when due with new debt financings, including debt financing provided either through intercompany borrowings, private placements, bank borrowings or public financing, and would seek other financing to honor any exercise of the put rights. We refinanced the $1.5 billion Floating Rate Notes due May 23, 2005, through intercompany borrowings.

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On February 18, 2005, we signed an additional promissory note with Verizon Global Funding Corp. (“VGF”), a wholly-owned subsidiary of Verizon Communications, that permits us to borrow, repay and re-borrow from time to time up to a maximum principal amount of $6.5 billion with a maturity date of February 22, 2008. Amounts borrowed under the note bear interest at a rate per annum equal to one-month LIBOR plus 20 basis points for each interest period, with the interest rate being adjusted on the first business day of each month. To the extent we need additional financing, we believe we could obtain it, however, Verizon Communications has no commitment to provide any further financing to us, and we have no commitments from any third parties.

In addition to the potential cash needs described above, we have needed and may continue to need to secure additional financing for acquisitions of additional spectrum licenses and wireless service providers. The failure to obtain financing on commercially reasonable terms or at all could result in the delay or abandonment of our development and expansion plans or our inability to continue to provide service in all or portions of some of our markets, which could harm our ability to attract and retain customers.

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for a description of our contractual obligations and commitments as of December 31, 2004. Except as noted herein, there were no material changes to our contractual obligations and commitments as of June 30, 2005 from the information set forth in the Annual Report on Form 10-K. See “Cash Flows Used In Financing Activities” below.

Cash Flows Provided By Operating Activities

Our primary source of funds continues to be cash generated from operations. The $1.2 billion increase in cash flows provided by operating activities in the first six months of 2005 compared to the similar period in 2004 was primarily due to an increase in operating income excluding depreciation and amortization and favorable changes in working capital.

Cash Flows Used In Investing Activities

Generally, capital expenditures are our primary use of cash for investing activities. Our capital expenditures, excluding acquisitions, were $3.3 billion for the six months ended June 30, 2005, compared to $2.7 billion for the similar period in 2004, and were used primarily to increase the capacity of our wireless network to meet usage demand, expand our network footprint, facilitate the introduction of new products and services through our EV-DO deployment, and increase the operating efficiency of our wireless network.

We invested $4.1 billion in acquisitions during the first six months of 2005, including $3.0 billion for 23 PCS licenses and certain tax net operating losses through the purchase of NextWave Telecom Inc. stock, $418 million for the Qwest PCS licenses and related network assets, $365 million related to the FCC auction that concluded in February 2005 and $230 million for the Metro PCS, Inc. spectrum. In addition, we made deposits totaling $276 million, representing the full funding commitment of Vista PCS, LLC (“Vista”), for the PCS licenses for which Vista was the high bidder in that FCC auction. Vista is a joint venture between Valley Communications, LLC and us, the results of which are consolidated by us.

Cash Flows Used In Financing Activities

Our total debt increased by $4.4 billion for the first six months of 2005, compared to the similar period in 2004. Our net intercompany debt increased by $5.9 billion and was used, together with cash flows from operations, primarily to fund the acquisition of the NextWave and Qwest PCS licenses and other wireless properties, invest in our network through capital expenditures and to make distributions to our owners. We also used $1.5 billion to repay the Floating Rate Notes that came due on May 23, 2005. As of June 30, 2005, we had approximately $7.1 billion of demand notes payable to VGF and approximately $9.3 billion of term borrowings payable to VGF and other Verizon Communications subsidiaries.

On February 14, 2005, both S&P and Moody’s indicated that Verizon Communications’ proposed acquisition of MCI Inc. may result in downgrades in Verizon Communications’ debt ratings. At that same time, S&P placed our A+-rated long term debt on review with negative implications and Moody's changed the outlook on our A3-rated long term debt to stable from positive until its review of Verizon Communications' debt ratings is completed.

Our debt to equity ratio (including partner’s capital subject to redemption) was 43% at June 30, 2005, compared to 34% at December 31, 2004 and 33% at June 30, 2004.

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We made distributions to our owners of approximately $2.1 billion in the first six months of 2005. In May 2005 we made a $128 million tax distribution. In February 2005 we made a $2.0 billion distribution, which represented payments to our owners corresponding to 70.0% of our adjusted pre-tax income for the six month period ended December 31, 2004, which we are required to distribute subject to our meeting certain financial targets. This non-tax related distribution requirement expired in April 2005. Under our partnership agreement, we must continue tax distributions, and it is also contemplated that we will continue to have a policy for non-tax related distributions, which will provide for distributions at a level as determined from time to time by our board of representatives, taking into account relevant factors, including our financial performance and capital requirements. The board has not yet established a new policy for non-tax related distributions.

In addition, under the terms of an agreement entered into among Verizon Communications, Vodafone and us on April 3, 2000, Vodafone may require us to purchase up to an aggregate of $20 billion of Vodafone’s interest in the Partnership, at its then fair market value. Up to $10 billion was redeemable during the 61-day period that opened on June 10 and closed on August 9 in 2004. Vodafone did not exercise its redemption rights during that period. As a result, $20 billion, not to exceed $10 billion in any one year, remains redeemable during the 61-day periods opening on June 10 and closing on August 9 in 2005, 2006 and/or 2007. Verizon Communications has the right, exercisable at its sole discretion, to purchase all or a portion of this interest instead of us. However, even if Verizon Communications exercises this right, Vodafone has the option to require us to purchase up to $7.5 billion of this interest redeemable during the 61-day periods opening on June 10 and closing on August 9 in 2005, 2006 and/or 2007 with cash or contributed debt. Accordingly, $20 billion of partners’ capital has been classified as redeemable on the accompanying consolidated balance sheets. We will need to obtain financing if we are required to repurchase these interests. We have no commitment for such financing. As of August 4, 2005, Vodafone had not exercised its put rights for the 61-day period that will end August 9, 2005.

Market Risk

Our primary market risk relates to changes in interest rates, which could impact results of operations. As of June 30, 2005, we had $16.0 billion of aggregate floating rate debt outstanding under intercompany loan facilities. As of June 30, 2005, approximately $9.5 billion of the intercompany loans bear interest at rates that vary with Verizon Communications’ cost of funding; because a portion of its debt is fixed-rate, and because its cost of funding may be affected by events related solely to it, our interest rates may not adjust in accordance with market rates. A change in our interest rates of 100 basis points would change our annual interest expense by approximately $160 million.

We also had exposure to fluctuations in foreign exchange rates as a result of a series of sale/leaseback transactions that obligated us to make payments in Japanese yen. During the second quarter of 2005 we made final payments of $3 million, which satisfied all of our remaining obligations under these transactions and related forward exchange contracts.

Other Factors That May Affect Future Results

Recent Developments

On August 3, 2005, we completed the purchase of 23 PCS licenses and related network assets from Cricket Communications, Inc., a subsidiary of Leap Wireless International, Inc. for, and certain of its affiliates, $102.5 million in cash. The licenses cover the Michigan BTAs of Battle Creek, Flint, Kalamazoo and Jackson, and 16 other markets in Michigan, Wisconsin, Alabama, Arkansas, Mississippi and New York. These licenses will provide an opportunity for additional expansion into markets in Michigan, Arkansas, Alabama, Mississippi and Wisconsin, and necessary capacity for existing markets in Michigan, Arkansas, Alabama, Mississippi and upstate New York.

On July 13, 2005 we completed the purchase of spectrum licenses in 10 North Carolina markets from Urban Comm-North Carolina for $68.5 million. The purchase includes 10, 20 and 30 MHz licenses, in the 1.9 GHz PCS frequency range, covering a population of 3.9 million people. Three of the licenses will be used to expand our network to meet customers’ increasing demand for our services in areas we currently serve, including Raleigh-Durham, Fayetteville and Burlington. The remaining licenses will be used to help expand our footprint into new markets, including Wilmington, Greenville, Rocky Mount, Roanoke Rapids, Goldsboro, New Bern and Jacksonville.

On May 11, 2005, we completed the purchase from MetroPCS, Inc. of 10 MHz of PCS spectrum covering the San Francisco BTA for $230 million. The license covers a population of approximately 7.3 million and will provide spectrum capacity in the San Francisco, Oakland and San Jose markets.

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Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment.” This standard replaces SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with a) employees, except for certain equity instruments held by employee share ownership plans, and b) nonemployees when acquiring goods or services. In April 2005, the Securities and Exchange Commission (“SEC”) delayed the implementation date of SFAS No. 123(R). We will adopt the revised standard in the first quarter of 2006. We are currently evaluating the provisions of this statement and do not expect our adoption of SFAS No. 123(R) to have a material effect on our consolidated financial statements.

On March 29, 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107, “Share Based Payments.” This SAB expresses the views of the SEC staff regarding the relationship between SFAS No. 123(R), “Share-Based Payment” and certain SEC rules and regulations. In particular, this SAB provides guidance related to valuation methods, the classification of compensation expense, non-GAAP financial measures, the accounting for income tax effects of share-based payment arrangements, disclosures in Management’s Discussion and Analysis subsequent to adoption of SFAS No. 123(R), and interpretations of other share-based payment arrangements. We will adopt SAB No. 107 in conjunction with our adoption of SFAS No. 123(R) in the first quarter of 2006. We do not expect the adoption of this SAB to have a material effect on our consolidated financial statements.

In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations –an interpretation of FASB Statement No. 143.” This interpretation clarifies that the term conditional asset retirement obligation refers to a legal obligation to perform a future asset retirement when uncertainty exists about the timing and/or method of settlement of the obligation. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of the liability when sufficient information exists, as defined by the interpretation. An entity is required to recognize a liability for the fair value of the obligation if the fair value of the liability can be reasonably estimated. We will adopt the interpretation effective December 31, 2005. We are currently reviewing this interpretation, and do not expect our adoption of the interpretation to have a material effect on our consolidated financial statements.

Cautionary Statement Concerning Forward-Looking Statements

In this Management’s Discussion and Analysis, and elsewhere in this Quarterly Report and in our other public filings and statements (including oral communications), we make forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations, capital expenditures, anticipated cost savings and financing plans. Forward-looking statements also include those preceded or followed by the words “may”, “will”, “expect”, “intend”, “plan”, “anticipates”, “believes”, “estimates”, “hopes” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Our actual future performance could differ materially from these forward-looking statements, as these statements involve a number of risks and uncertainties. You should therefore not place undue reliance on these statements. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements:

• materially adverse changes in economic conditions in the markets served by us;
  
  
• an adverse change in the ratings afforded our debt securities or those of Verizon Communications by nationally accredited ratings organizations;
  
  
• our ability to obtain sufficient financing to satisfy our substantial capital requirements, including to fund capital expenditures, debt repayment and distributions to our owners;
  
  
• our ability to generate additional customers, with acceptable levels of churn, from resellers and distributors of our service;
  
  
• our continued provision of satisfactory service to our customers at an acceptable price;

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• the effects of the substantial competition that exists in our markets, which has been intensifying;
  
  
• our ability to obtain sufficient spectrum licenses, particularly in our most densely populated areas;
  
  
• our ability to develop future business opportunities, including wireless data services, and to continue to adapt to the changing conditions in the wireless industry;
  
  
• our ability to receive satisfactory service from our key vendors and suppliers;
  
  
• material changes in available technology, and technology substitution that could impact the popularity and usage of our technology;
  
  
• the impact of continued unionization efforts with respect to our employees;
  
  
• regulatory and taxation developments, including new regulations and taxes that could increase our cost of doing business or reduce demand for our services;
  
  
• developments in connection with existing or future litigation; and
  
  
• changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Information relating to market risk is included in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in the Consolidated Financial Condition section under the caption “Market Risk.”
Item 4.	Controls and Procedures

Our chief executive officer and chief financial officer have evaluated the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934), as of the end of the period covered by this quarterly report, that ensure that information relating to the registrant which is required to be disclosed in this report is recorded, processed, summarized and reported, within required time periods. Based on this evaluation, our chief executive officer and chief financial officer have concluded that the registrant’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the registrant and its consolidated subsidiaries would be accumulated and communicated to them by others within those entities, particularly during the period in which this quarterly report was being prepared, to allow timely decisions regarding required disclosure.

There were no changes in the registrant’s internal control over financial reporting during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

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Part II - Other Information

Item 1. Legal Proceedings

On or about April 28, 2005, an amended complaint was served on Cellco Partnership a/k/a and d/b/a Verizon Wireless, Verizon Communications Inc., Verizon Select Services Inc. and Codetel International Communications Incorporated by Aerotel, Ltd. in connection with an action filed in the United States District Court for the Southern District of New York, entitled, Aerotel, Ltd. v. Verizon Communications Inc., Cellco Partnership a/k/a and d/b/a Verizon Wireless, Verizon Select Services, and Codetel International Communications Incorporated. Plaintiff alleges breach of contract and seeks a declaratory judgment that defendants' products and services are covered by, and unless licensed would infringe, Aerotel's 1-800 calling card service patent. Plaintiff seeks unspecified money damages of at least $180 million plus interest from all defendants, attorneys’ fees and declarations of infringement. We are not currently able to assess the impact, if any, of the action on our consolidated financial statements.

Maloney v. Sprint Corp., et al., (Court of Common Pleas, Akin County, South Carolina). On February 17, 2005, the plaintiff filed this tying class action against Verizon Wireless and other carriers, purportedly on behalf of a class of South Carolina customers based on allegations that defendants conspired to restrain trade, conspired to monopolize, and entered agreements in restraint of trade by locking cellular phones, tying the sale of handsets to service, eliminating alternative sources of handsets and horizontally dividing the market for handsets. Plaintiff asserts causes of action for violation of the South Carolina Antitrust Act, unjust enrichment, money had and received, civil conspiracy, and fraudulent concealment. Plaintiff seeks a permanent injunction, compensatory damages, restitution and punitive damages. On July 13, 2005 defendants removed the action to federal court. On July 14, 2005, defendants filed a notice of potential tag-along action with the Judicial Panel on Multidistrict Litigation (“JPML”) to consolidate this matter with the pending MDL 1513 – In re Wireless Telephone Services Antitrust Litigation. We are not currently able to assess the impact, if any, of the action on our consolidated financial statements.

On February 15, 2005, a wage hour class action was filed by an employee in California Superior Court, Los Angeles County, DeLeon v. Verizon Wireless LLC. Plaintiff alleges that Verizon Wireless failed to pay regular and overtime wages to a class of California sales employees. Plaintiff seeks unspecified money damages in the form of unpaid wages, unpaid overtime, statutory penalties, pre-judgment interest, punitive damages and attorneys’ fees and injunctive relief. Our petition to compel arbitration is pending. We are not currently able to assess the impact, if any, of the action on our consolidated financial statements.

The following describes material developments in legal proceedings previously reported in our Annual Report on Form 10-K for the year ended December 31, 2004:

Plaintiffs have agreed to stay all state court proceedings in Pinney, et al. v. Nokia Inc., et al.; Farina, et al. v. Nokia Inc., et al.; Gilliam, et al. v. Nokia Inc., et al.; Gimpelson et al. v. Nokia Inc., et al.; and Brower, et al. v. Motorola, Inc., et al., pending resolution of defendants’ petition for a writ of certiorari to the U.S. Supreme Court, to be filed by August 10, 2005.

On July 15, 2005, the parties entered into a stipulation to settle three purported class actions alleging that Verizon Wireless did not adequately disclose certain limitations on the Bluetooth technology that was included in the Motorola V710 handset that has been available for use on the Verizon Wireless network since August 2004: Opperman, et al. v. Cellco Partnership, et al., (Superior Court of California, Los Angeles County); Zhao v. Verizon Wireless, Inc., (Ohio Court of Common Pleas, Cuyahoga County); and Kaner, et al. v. Cellco Partnership, (American Arbitration Association). A preliminary approval hearing will be held in California Superior Court, Los Angeles County, on August 25, 2005. The settlement, if approved by the court, will provide claimants who submit a claim form under penalty of perjury with the option of either: (1) retaining their V710 handset and receiving a $25 bill credit; (2) returning their phone and accessories, receiving the actual purchase price or $200 if they do not have a receipt, and canceling service; or (3) returning their phone and receiving a credit (for $200 or the actual purchase price) towards a new phone. The agreement does not address attorneys’ fees, which will be determined by the court. We are not currently able to assess the impact, if any, of this action on our consolidated financial statements.

On June 3, 2005, the plaintiff in Brown v. Verizon Wireless Services, LLC (Florida Circuit Court) also filed a demand for arbitration with the American Arbitration Association, purportedly on behalf of a nationwide class of Verizon Wireless subscribers (except for California subscribers). The arbitration demand generally asserts the same early termination fee and

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handset locking claims as the court action, but also adds a claim for violation of section 201 of the Communications Act. We are not currently able to assess the impact, if any, of the action on our consolidated financial statements.

On March 25, 2005, defendants removed the McClain tying class action from Tennessee state court to federal court. On April 4, 2005, defendants filed a notice of potential tag-along action with the JPML to join this matter with the pending MDL 1513 - In re Wireless Telephone Services Antitrust Litigation. On May 16, 2005, plaintiffs filed a motion to remand the case to state court. On May 24, 2005, the MDL Panel issued a Conditional Transfer Order, conditionally transferring the case to the Southern District of New York for coordinated pretrial proceedings with the JPML 1513 litigation. On June 23, 2005, plaintiffs moved to vacate the Order. We are not currently able to assess the impact, if any, of the action on our consolidated financial statements.

On December 23, 2004, we disclosed to the United States Environmental Protection Agency (“EPA”) the existence of potential violations of reporting requirements for a number of our cell sites. After an internal investigation, the results of which were provided to the EPA, we concluded that there were violations for 429 sites. The EPA proposed a settlement agreement granting us self-disclosure treatment and imposing a penalty of $10,913. The settlement agreement and self-disclosure treatment must be approved by the Environmental Appeals Board. While that approval has been pending, we identified and reported to EPA on June 22, 2005 22 additional potential violations. We do not believe that these additional violations will negatively impact our ability to conclude our settlement of the 429 initial violations for a penalty of $10,913. In addition, we believe we may be able to settle the 22 additional potential violations on similar terms. However, if the EPA refuses to grant us self-disclosure treatment for either set of violations, a larger fine may result. We do not believe the amount of such a larger fine will be material to our consolidated financial statements but it could exceed $100,000.

The class action settlement of Ramirez v. Verizon Wireless, filed on November 20, 2002 in the Superior Court of California, Los Angeles County has been judicially approved and implemented. The case alleged the misclassification of retail managers and assistant managers under California law and was settled for a non-material amount. In Evenson v. Verizon Wireless, filed on March 6, 2003 in the Superior Court of California, Los Angeles County, alleging improper wage deduction and failure to pay overtime on a timely basis, plaintiffs have filed a demand for class action arbitration with the American Arbitration Association on behalf of a class of employees who have signed arbitration agreements. We are not currently able to assess the impact, if any, of the action on our consolidated financial statements.

Item 6. Exhibits

Exhibits:

3.3	Cellco Partnership Amended and Restated Partnership Agreement (previously filed as an exhibit to Verizon Wireless Inc.’s Registration Statement on Form S-1 (No. 333-44394) and incorporated by reference herein)
3.3.1	Amendment and Joinder to Cellco Partnership Amended and Restated Partnership Agreement dated as of July 10, 2000 (previously filed as an exhibit to the Registrant’s Registration Statement on Form S-4 (No. 333-92214 and 333-92214-1) and incorporated by reference herein)
3.3.2	Amendment to Cellco Partnership Amended and Restated Partnership Agreement dated as of July 24, 2003 (previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003 (No. 333-92214) and incorporated by reference herein)
3.3.3	Amendment to Cellco Partnership Amended and Restated Partnership Agreement dated as of February 26, 2004 (previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 (No. 333-92214) and incorporated by reference herein)
4.1	Indenture dated as of December 17, 2001 among Cellco Partnership and Verizon Wireless Capital LLC as Issuers and First Union National Bank as Trustee (previously filed as an exhibit to the Registrant’s Registration Statement on Form S-4 (No. 333-92214 and 333-92214-1) and incorporated by reference herein)
4.2	Form of global certificate representing the 5.375% Notes due 2006 (previously filed as an exhibit to the Registrant’s Registration Statement on Form S-4 (No. 333-92214 and 333-92214-1) and incorporated by reference herein)

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4.3	Promissory note between Cellco Partnership and Verizon Global Funding Corp. dated February 18, 2005 (previously filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (No. 333-92214) and incorporated by reference herein)
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CELLCO PARTNERSHIP
Date: August 8, 2005	By	/s/ John Townsend
		John Townsend
		Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

Unless otherwise indicated, all information is as of August 4, 2005.

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EX-31.1

EXHIBIT 31.1

I, Dennis F. Strigl, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Cellco Partnership;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
	d)	disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 8, 2005

/s/ Dennis F. Strigl

Dennis F. Strigl

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

I, John Townsend, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Cellco Partnership;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
	d)	disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 8, 2005

/s/ John Townsend

John Townsend

Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

August 8, 2005

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

I, Dennis F. Strigl, President and Chief Executive Officer of Cellco Partnership (“the Partnership”), certify that:

(1)	the report of the Partnership on Form 10-Q for the quarterly period ending June 30, 2005 (the “Report”) fully complies with the requirements of section 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership as of the dates and for the periods presented in the Report.

/s/ Dennis F. Strigl

Dennis F. Strigl

President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Cellco Partnership and will be retained by Cellco Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

August 8, 2005

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

I, John Townsend, Vice President and Chief Financial Officer of Cellco Partnership (the “Partnership”), certify that:

(1)	the report of the Partnership on Form 10-Q for the quarterly period ending June 30, 2005 (the “Report”) fully complies with the requirements of section 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership as of the dates and for the periods presented in the Report.

/s/ John Townsend

John Townsend

Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Cellco Partnership and will be retained by Cellco Partnership and furnished to the Securities and Exchange Commission or its staff upon request.