Earnings Per Share

9 Months Ended

Sep. 30, 2013

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Earnings per Share

4. Earnings Per Share

Basic earnings (loss) per share attributable to U.S. Cellular shareholders is computed by dividing Net income (loss) attributable to U.S. Cellular shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share attributable to U.S. Cellular shareholders is computed by dividing Net income (loss) attributable to U.S. Cellular shareholders by the weighted average number of common shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentiallydilutive securities primarily include incremental shares issuable upon exercise of outstanding stock options and the vesting of restricted stock units.

The amounts used in computing earnings (loss) per common share and the effects of potentially dilutive securities on the weighted average number of common shares were as follows:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2013		2012		2013		2012
(Dollars and shares in thousands, except per share amounts)
Net income (loss) attributable to U.S. Cellular shareholders		$	(9,859)	$	35,451	$	138,446	$	150,628
Weighted average number of shares used in basic earnings (loss) per share			84,005		84,737		83,897		84,671
Effects of dilutive securities:
	Stock options		-		171		209		197
	Restricted stock units		-		440		570		393
Weighted average number of shares used in diluted earnings (loss) per share			84,005		85,348		84,676		85,261
Basic earnings (loss) per share attributable to U.S. Cellular shareholders		$	(0.12)	$	0.42	$	1.65	$	1.78
Diluted earnings (loss) per share attributable to U.S. Cellular shareholders		$	(0.12)	$	0.42	$	1.64	$	1.77

Certain Common Shares issuable upon the exercise of stock options or vesting of restricted stock units were not included in average diluted shares outstanding for the calculation of Diluted earnings per share attributable to U.S. Cellular shareholders because their effects were antidilutive. The number of such Common Shares excluded, if any, is shown in the table below.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
(Shares in thousands)
Stock options	3,416	2,434	2,126	2,088
Restricted stock units	1,243	-	305	329

On June 25, 2013, U.S. Cellular paid a special cash dividend of $5.75 per share, for an aggregate amount of $482.3 million, to all holders of U.S. Cellular Common Shares and Series A Common Shares. Outstanding U.S. Cellular stock options and restricted stock unit awards were equitably adjusted for the special cash dividend. The impact of such adjustments on the earnings per share calculation was reflected in the three and nine months ended September 30, 2012.