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, 2010
				For the quarterly period ended September 30, 2010
				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: 333-160446

Cellco Partnership

(Exact name of registrant as specified in its charter)


Delaware		22-3372889
(State of organization)		(I.R.S. Employer Identification No.)

One Verizon Way Basking Ridge, New Jersey		07920
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (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. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

Table of Contents

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Income	2	2
	Three and six months ended June 30, 2010 and 2009
	Three and nine months ended September 30, 2010 and 2009
	Condensed Consolidated Balance Sheets	3	3
	At June 30, 2010 and December 31, 2009
	At September 30, 2010 and December 31, 2009
	Condensed Consolidated Statements of Cash Flows	4	4
	Six months ended June 30, 2010 and 2009
	Nine months ended September 30, 2010 and 2009
	Notes to Unaudited Condensed Consolidated Financial Statements	5	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24	26
Item 4.	Controls and Procedures	25	27
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	26	28
Item 1A.	Risk Factors	26	28
Item 6.	Exhibits	26	28
Signature		27	29
Certifications

Part I - Financial Information

Item 1.

Financial Statements

Condensed Consolidated Statements of Income

Cellco Partnership (d/b/a Verizon Wireless)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

(dollars in millions) (unaudited)

2010

2009

2010

2009

Operating Revenue (including $23, $25, $49 and $51 from affiliates)

Operating Revenue (including $25, $24, $74 and $75 from affiliates)

Service revenue

1314,~~788~~168

13,~~349~~525

2741,~~633~~801

2639,~~424~~949

Equipment and other

12,~~950~~082

2,~~131~~272

35,~~888~~970

46,~~178~~450

Total operating revenue

1516,~~738~~250

15,~~480~~797

3147,~~521~~771

3046,~~602~~399

Operating Costs and Expenses (including $440, $420, $883 and $805 from affiliates)

Operating Costs and Expenses (including $425, $411, $1,308 and $1,216 from affiliates)

Cost of service (exclusive of items shown below)

2,~~025~~112

1,~~912~~920

46,~~025~~137

35,~~831~~751

Cost of equipment

2,~~851~~997

23,~~936~~184

58,~~663~~660

58,~~739~~923

Selling, general and administrative

4,~~623~~585

4,~~536~~642

913,~~305~~890

913,~~117~~759

Depreciation and amortization

1,~~852~~861

1,~~819~~854

35,~~692~~553

35,~~612~~466

Total operating costs and expenses

11,~~351~~555

11,~~203~~600

2234,~~685~~240

2233,~~299~~899

Operating Income

4,~~387~~695

4,~~277~~197

813,~~836~~531

812,~~303~~500

Other Income (Expenses)

Interest expense, net

(~~105~~43

)

(~~290~~226

)

(~~256~~299

)

(~~732~~958

)

Interest income and other, net

1522

4062

3958

Income Before Provision for Income Taxes

4,~~297~~674

43,~~006~~990

813,~~620~~294

711,~~610~~600

Provision for income taxes

(~~505~~240

)

(~~363~~291

)

(~~748~~988

)

(~~442~~733

)

Net Income

34,~~792~~434

3,~~643~~699

712,~~872~~306

710,~~168~~867

Net income attributable to the noncontrolling interest

7177

6776

~~140~~217

~~137~~213

Net income attributable to Cellco Partnership

34,~~721~~357

3,~~576~~623

712,~~732~~089

710,~~031~~654

Net Income

34,~~792~~434

3,~~643~~699

712,~~872~~306

710,~~168~~867

See Notes to Unaudited Condensed Consolidated Financial Statements.

Condensed Consolidated Balance Sheets

Cellco Partnership (d/b/a Verizon Wireless)

(dollars in millions) (unaudited)	~~June~~September 30,2010		~~December 31,2009~~	December 31,2009
Assets
Current assets
Cash and cash equivalents	$	12,~~016~~264	$	~~607~~$	607
Receivables, net of allowances of $348 and $356		5,736		5,721
Receivables, net of allowances of $327 and $356		6,023			5,721
Due from affiliates, net		~~147~~172		58	58
Inventories, net		~~938~~949		~~1,373~~	1,373
Prepaid expenses and other current assets		~~709~~585		~~3,335~~	3,335
Total current assets		89,~~546~~993		~~11,094~~	11,094
Plant, property and equipment, net		31,~~398~~855		~~30,850~~	30,850
Wireless licenses		72,~~282~~566		~~72,005~~	72,005
Goodwill		17,~~303~~379		~~17,303~~	17,303
Other intangibles and other assets, net		2,~~520~~529		~~3,100~~	3,100
Total assets	$	~~132~~134,~~049~~322	$	~~134,352~~$	134,352
Liabilities and Partners’ Capital
Current liabilities
Short-term debt, including current maturities	$	3,999	$	~~2,998~~$	2,998
Due to affiliates		—		~~5,003~~	5,003
Accounts payable and accrued liabilities		7,~~210~~290		~~6,123~~	6,123
Advance billings		12,~~948~~023		~~1,695~~	1,695
Other current liabilities		~~765~~781		~~415~~	415
Total current liabilities		1314,~~922~~093		~~16,234~~	16,234
Long-term debt		1312,~~557~~538		~~18,661~~	18,661
Deferred tax liabilities, net		10,~~416~~390		~~10,593~~	10,593
Other non-current liabilities		1,~~659~~529		~~1,877~~	1,877
Total liabilities		3938,~~554~~550		~~47,365~~	47,365
Commitments and contingencies (see Note 9)		—		—	—
Partners’ capital
Capital		9093,~~504~~756		~~84,886~~	84,886
Accumulated other comprehensive income		43		~~113~~	113
Noncontrolling interest		1,~~948~~973		~~1,988~~	1,988
Total Partners’ capital		9295,~~495~~772		~~86,987~~	86,987
Total liabilities and Partners’ capital	$	~~132~~134,~~049~~322	$	~~134,352~~$	134,352

See Notes to Unaudited Condensed Consolidated Financial Statements.

Condensed Consolidated Statements of Cash Flows

Cellco Partnership (d/b/a Verizon Wireless)

	Six Months Ended June 30,
	Nine Months Ended September 30,
(dollars in millions) (unaudited)	2010			2009
Cash Flows from Operating Activities
Net income	$	712,~~872~~306		$	710,~~168~~867
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		35,~~692~~553			35,~~612~~466
Changes in current assets and liabilities (net of the effects of acquisitions)		1,151			(1,610	)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		893			(1,136	)
Other operating activities, net		~~508~~750			1,~~248~~613
Net cash provided by operating activities		1319,~~223~~502			1016,~~418~~810
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)		(46,~~032~~205	)		(35,~~334~~134	)
Acquisition of businesses and licenses, net of cash acquired		—(235	)		(4,881	)
Proceeds from dispositions		2,594			—
Other investing activities, net		(~~324~~561	)		(~~177~~313	)
Net cash used in investing activities		(14,~~762~~407	)		(810,~~392~~328	)
Cash Flows from Financing Activities
Net decrease in affiliate borrowings		(5,003	)		(1,288	)
Net repayment of affiliate borrowings		(5,003	)		(4,007	)
Issuance of long-term debt		—			9,223
Repayment of long-term debt		(35,~~790~~016	)		(1617,~~582~~026	)
Distributions to partners		(23,~~114~~219	)		(12,~~427~~396	)
Other financing activities, net		(~~145~~200	)		(~~630~~691	)
Net cash used in financing activities		(1113,~~052~~438	)		(1014,~~704~~897	)
Increase (decrease) in cash and cash equivalents		~~409~~1,657			(8,~~678~~415	)
Cash and cash equivalents, beginning of period		607			9,227
Cash and cash equivalents, end of period	$	12,~~016~~264		$	~~549~~812

See Notes to Unaudited Condensed Consolidated Financial Statements.

Notes to Unaudited Condensed Consolidated Financial Statements

Cellco Partnership (d/b/a Verizon Wireless)

1.	Background and Basis of Presentation

Cellco Partnership (the “Partnership”), a Delaware partnership doing business as Verizon Wireless, provides wireless voice and data services and related equipment to consumers and business customers across one of the most extensive wireless networks in the United States. The Partnership has one segment and operates domestically only. References to “our Partners” refers to subsidiaries of Verizon Communications Inc. (“Verizon”), which own 55% of the Partnership, and U.S. subsidiaries of Vodafone Group Plc (“Vodafone”), which own 45% of the Partnership. We are the largest wireless service provider in the United States, as measured by total number of customers.

The accompanying unaudited condensed consolidated financial statements have been prepared based upon Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, you should refer to the audited financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2009. These 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. The results for the interim periods are not necessarily indicative of results for the full year.

During the ~~three~~second ~~and~~quarter ~~six~~of ~~months ended June 30,~~ 2010, we recorded a one-time non-cash adjustment of $268 million primarily to reduce wireless data revenues. This adjustment was recorded to properly defer previously recognized wireless data revenues that will be earned and recognized in future periods. As the amounts involved were not material to our consolidated financial statements in the current or any previous reporting period, the adjustment was recorded during the second quarter.

Recently Adopted Accounting Standards

In January 2010, we adopted the accounting standard update regarding consolidation accounting for variable interest entities. This standard update requires an enterprise to perform an analysis to determine whether the entity’s variable interest or interests give it a controlling interest in a variable interest entity. The adoption of this ~~accounting~~ standard update did not have a material impact on our condensed consolidated financial statements.

In January 2010, we adopted the accounting standard update regarding fair value measurements and disclosures which requires additional disclosures regarding assets and liabilities measured at fair value. The adoption of this ~~accounting~~ standard update did not have a material impact on our condensed consolidated financial statements.

Recent Accounting Standards

In ~~September~~July ~~2009~~2010, the accounting standard update regarding ~~revenue~~disclosures ~~recognition~~ for ~~multiple~~finance ~~deliverable~~receivables ~~arrangements~~and allowances for credit losses was issued. This standard update requires ~~the~~that ~~use~~entities ofdisclose ~~the~~information ~~relative~~at ~~selling~~more ~~price~~disaggregated ~~method~~levels ~~when~~than ~~allocating~~currently ~~revenue in these types of arrangements~~required. ~~This~~We ~~method~~will ~~allows~~adopt athis ~~vendor~~standard toupdate ~~use~~during ~~its~~the ~~best~~fourth ~~estimate~~quarter of ~~selling~~2010. ~~price~~The ifadoption ~~neither vendor specific objective evidence nor third party evidence~~ of ~~selling price exists when evaluating multiple deliverable arrangements. This~~ this standard update is ~~effective~~not ~~January 1,~~expected ~~2011~~to ~~and~~have ~~may~~a besignificant adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact ~~that this standard update will have~~ on our consolidated financial statements.

In September 2009, the accounting standard update regarding revenue recognition for ~~arrangements~~multiple ~~that~~deliverable ~~include~~arrangements ~~software elements~~ was issued. This update requires ~~tangible~~the ~~products~~use ~~that~~of ~~contain~~the ~~software~~relative ~~and~~selling ~~non-software~~price ~~elements~~method ~~that~~when ~~work~~allocating ~~together~~revenue toin ~~deliver~~these ~~the~~types ~~product’s~~of ~~essential~~arrangements. This ~~functionality~~method allows a vendor to use its best estimate of selling price if neither vendor-specific objective evidence nor third party evidence of selling price exists when evaluating multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be ~~evaluated~~adopted ~~under~~prospectively for revenue arrangements entered into or materially modified after the ~~accounting~~date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact that this standard update will have on our consolidated financial statements.

In September 2009, the accounting standard update regarding revenue recognition for arrangements that include software elements was issued. This update requires tangible products that contain software and non-software elements that work together to deliver the product’s essential functionality to be evaluated under the accounting standard regarding multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact that this standard update will have on our consolidated financial statements.

2. Acquisitions and Dispositions

AsAcquisitions a condition of the regulatory approvals by the Department of Justice and the Federal Communications Commission to complete the acquisition of Alltel Corporation (“Alltel”) in January 2009, the Partnership was required to divest overlapping properties in 105 operating markets in 24 states (the “Alltel Divestiture Markets”). Total assets and total liabilities divested were approximately $2.6 billion and $0.1 billion, respectively, principally comprised of network assets, wireless licenses and customer relationships, and were included in Prepaid expenses and other current assets and Other current liabilities, respectively, on the accompanying condensed consolidated balance sheet at December 31, 2009.

On ~~May~~August 823, ~~2009~~2010, the Partnership ~~entered~~acquired ~~into a definitive agreement with AT&T Mobility LLC (“AT&T Mobility”), a subsidiary of AT&T Inc., pursuant to which AT&T Mobility agreed to acquire 79 of~~ the ~~105~~net ~~Alltel~~assets ~~Divestiture Markets, including licenses~~ and ~~network~~related ~~assets,~~customers ~~for~~of ~~approximately~~six ~~$2.4~~operating ~~billion~~markets in ~~cash.~~Louisiana ~~On June 9, 2009, the Partnership entered~~and ~~into~~Mississippi in a ~~definitive~~transaction ~~agreement~~ with ~~Atlantic~~AT&T ~~Tele-Network,~~ Inc. (~~“ATN”~~AT&T), ~~pursuant~~for tocash ~~which~~consideration ~~ATN~~of ~~agreed to acquire the remaining 26 Alltel Divestiture Markets, including licenses and network assets, for~~ $~~200~~235 million ~~in cash~~. ~~During~~These ~~the~~assets ~~second quarter~~were ofacquired ~~2010,~~to enhance the Partnership’s ~~received~~network ~~the~~coverage ~~necessary~~in ~~regulatory~~these ~~approvals~~operating ~~and completed both transactions~~markets. ~~Upon~~The ~~the~~preliminary ~~completion~~purchase ofprice ~~the~~allocation primarily ~~divestitures,~~resulted wein ~~recorded a tax charge of approximately~~ $~~201~~106 million ~~for the taxable gain on the excess~~ of ~~book over~~wireless ~~tax~~licenses ~~basis~~and of$76 ~~the~~million ~~goodwill~~in ~~associated with the Alltel Divestiture Markets~~goodwill.

Dispositions

Alltel Divestiture Markets

As a condition of the regulatory approvals by the Department of Justice and the Federal Communications Commission to complete the acquisition of Alltel Corporation (Alltel) in January 2009, the Partnership was required to divest overlapping properties in 105 operating markets in 24 states (the Alltel Divestiture Markets). Total assets and total liabilities divested were approximately $2.6 billion and $0.1 billion, respectively, principally comprised of network assets, wireless licenses and customer relationships, and were included in Prepaid expenses and other current assets and Other current liabilities, respectively, on the accompanying condensed consolidated balance sheet at December 31, 2009.

On May 8, 2009, the Partnership entered into a definitive agreement with AT&T Mobility LLC (AT&T Mobility), a subsidiary of AT&T, pursuant to which AT&T Mobility agreed to acquire 79 of the 105 Alltel Divestiture Markets, including licenses and network assets, for approximately $2.4 billion in cash. On June 9, 2009, the Partnership entered into a definitive agreement with Atlantic Tele-Network, Inc. (ATN), pursuant to which ATN agreed to acquire the remaining 26 Alltel Divestiture Markets, including licenses and network assets, for $200 million in cash. During the second quarter of 2010, the Partnership received the necessary regulatory approvals and completed both transactions. Upon the completion of the divestitures, we recorded a tax charge of approximately $201 million for the taxable gain on the excess of book over tax basis of the goodwill associated with the Alltel Divestiture Markets.

3.	Wireless Licenses, Goodwill and Other Intangibles, Net

Wireless Licenses

Changes in the carrying amount of Wireless licenses are as follows:

(dollars in millions)
Balance as of December 31, 2009	$	72,005
Capitalized interest on wireless licenses		270
Wireless licenses acquired		106
Reclassifications, adjustments and other		7
Capitalized interest on wireless licenses		447
Balance as of June 30, 2010	$	72,282
Reclassifications, adjustments and other		8
Balance as of September 30, 2010	$	72,566

As of June 30, 2010 and December 31, 2009, approximately $12.1 billion and $12.2 billion, respectively, of wireless licenses were under development for commercial service for which we are capitalizing interest costs.

Goodwill

There were no changes in the carrying amount of goodwill during the six months ended June 30, 2010.

As of September 30, 2010 and December 31, 2009, approximately $12.2 billion of wireless licenses were under development for commercial service for which we are capitalizing interest costs.

Goodwill

The changes in the carrying amount of goodwill are as follows:


(dollars in millions)
Balance as of December 31, 2009	$	17,303
Acquisitions		76

Balance as of September 30, 2010	$	17,379

Other Intangibles, net

Other intangibles, net are included in Other intangibles and other assets, net and consist of the following:

	At June 30, 2010									At December 31, 2009
	At September 30, 2010											At December 31, 2009
(dollars in millions)	GrossAmount		~~AccumulatedAmortization~~	AccumulatedAmortization			~~Net Amount~~	Net Amount		~~GrossAmount~~		GrossAmount	~~AccumulatedAmortization~~			AccumulatedAmortization	~~NetAmount~~		NetAmount
Customer lists (6 to 8 years)	$	2,~~120~~139	$	~~(702~~$	)(805	)	$	~~1,418~~$	1,334	$	~~2,122~~	$	$2,122	~~(497~~	)	$	$(497	~~1,625~~)	$	1,625
Capitalized software (2 to 5 years)		~~874~~937		~~(373~~	)(416	)		~~501~~	521		~~879~~		879	~~(377~~	)		(377	~~502~~)		502
Other (2 to 3 years)		382		~~(285~~	)(316	)		97	66		~~397~~		397	~~(235~~	)		(235	~~162~~)		162
Total	$	3,~~376~~458	$	~~(1,360~~$	)(1,537	)	$	~~2,016~~$	1,921	$	~~3,398~~	$	$3,398	~~(1,109~~	)	$	$(1,109	~~2,289~~)	$	2,289

The amortization expense for other intangible assets was as follows:

(dollars in millions)	Three Months Ended ~~June~~September 30,		~~Six Months Ended June 30,~~	Nine Months Ended September 30,
2010	$	~~171~~172	$	~~341~~$	513
2009		~~209~~201		~~398~~	599

Estimated future amortization expense for other intangible assets is as follows:

Years	(dollars in millions)
Remainder of 2010	$	~~354~~178
2011		~~534~~542
2012		~~396~~405
2013		~~314~~323
2014		~~218~~228
Thereafter		~~200~~245
Total	$	21,~~016~~921

4.	Fair Value Measurements

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of ~~June~~September 30, 2010:

(dollars in millions)	Level 1 (1)		~~Level 2 (2)~~	Level 2 (2)		~~Level 3 (3)~~		Level 3 (3)	~~Total~~		Total
Assets:
Other intangibles and other assets, net:
Derivative contracts—Cross currency swaps	$	—	$	34$	139	$	—	$	$—	34	$	139
Liabilities: Other non-current liabilities:
Derivative contracts—Cross currency swaps	$	—	$	103		$	—		$	103

(1) – quoted prices in active markets for identical assets or liabilities

(2) – observable inputs other than quoted prices in active markets for identical assets and liabilities

(3) – no observable pricing inputs in the market

Derivative contracts consist of cross currency swaps. Derivative contracts are valued using models based on readily observable market parameters for all substantial terms of our derivative contracts and thus are classified within Level 2. We use mid-market pricing for fair value measurements of our derivative instruments.

We recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the fair value hierarchy during the six months ended June 30, 2010.

⁽¹⁾– quoted prices in active markets for identical assets or liabilities

⁽²⁾– observable inputs other than quoted prices in active markets for identical assets and liabilities

⁽³⁾– no observable pricing inputs in the market

We recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the fair value hierarchy during the nine months ended September 30, 2010.

Fair Value of Short-term and Long-term Debt

The fair value of our term note due to affiliates was determined based on future cash flows discounted at current rates. The fair value of our short-term and long-term debt is determined based on quoted market prices or future cash flows discounted at current rates. Our financial instruments also include cash and cash equivalents, and trade receivables and payables. These financial instruments are short term in nature and are stated at their carrying value, which approximates fair value. The fair value of our term note due to affiliates and short-term and long-term debt were as follows:

	At June 30, 2010					At December 31, 2009
	At September 30, 2010							At December 31, 2009
(dollars in millions)	CarryingAmount		~~Fair Value~~	Fair Value		~~CarryingAmount~~		CarryingAmount	~~Fair Value~~		Fair Value
Term note due to affiliates	$	—	$	—$	—	$	~~5,003~~	$	$5,003	~~5,008~~	$	5,008
Short-term and long-term debt	$	1716,~~556~~537	$	~~20,137~~$	19,164	$	~~21,659~~	$	$21,659	~~23,597~~	$	23,597

Derivative Instruments

We have entered into derivative transactions to manage our exposure to fluctuations in foreign currency exchange rates and interest rates. We employ risk management strategies that may include the use of a variety of derivatives including cross currency swaps and interest rate swap agreements. We do not hold derivatives for trading purposes.

We measure all derivatives, including derivatives embedded in other financial instruments, at fair value and recognize them as either assets or liabilities on our consolidated balance sheets. Changes in the fair values of derivative instruments not qualifying as hedges or any ineffective portion of hedges are recognized in earnings in the current period. Changes in the fair values of derivative instruments used effectively as fair value hedges are recognized in earnings, along with changes in the fair value of the hedged item. Changes in the fair value of the effective portions of cash flow hedges are reported in Other comprehensive income (loss) and recognized in earnings when the hedged item is recognized in earnings.

Cross Currency Swaps

We have entered into cross currency swaps designated as cash flow hedges to exchange approximately $2.4 billion of ~~the net proceeds from a debt offering of~~ British Pound Sterling and Euro denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as mitigate the impact of foreign currency transaction gains or losses. The fair value of the cross currency swaps included in Other intangibles and other assets, net ~~and Other non-current liabilities~~ was $34139 million and $~~103~~315 million, ~~respectively,~~ at ~~June~~September 30, 2010. ~~The fair value of the cross currency swaps included in Other intangibles~~ and ~~other assets, net was $315 million at~~ December 31, 2009, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2010, a pretax $~~239~~ 207 million gain and $~~383~~176 million loss, respectively, on the cross currency swaps was recognized in Other comprehensive income (loss), a portion of which was reclassified to Interest income and other, net to offset the related pretax foreign-currency transaction gain or loss on the underlying debt obligations.

5. Debt

Debt

During the first half of 2010, the Partnership repaid $2,770 million of borrowings under a three-year term loan facility, reducing the outstanding borrowings under this facility to $1,226 million. During July 2010, the Partnership repaid an additional $700 million of borrowings under this facility reducing the outstanding borrowings under this facility to $526 million.

Debt

Debt

During the nine months ended September 30, 2010, the Partnership repaid $3,996 million of borrowings under a three-year term loan facility. No borrowings remain outstanding under this facility as of September 30, 2010 and this facility has been cancelled.

On June 28, 2010, the Partnership exercised its right to redeem all of its outstanding $1,000 million Put/Call Floating Rate Notes due June 2011 at a redemption price of 100% of the principal amount of the notes, plus accrued and unpaid interest through the date of redemption.

Term Notes Payable to Affiliate

~~Through~~During ~~June 30,~~the first half of 2010, the Partnership repaid $5,003 million of its $9,363 million floating rate promissory note. No borrowings remain outstanding under this note as of ~~June~~September 30, 2010 and this note has been cancelled.

On July 28, 2010, the Partnership entered into an amendment of our affiliate $750 million fixed rate promissory note payable to Verizon Financial Services LLC (“VFSL”), due August 1, 2010. The fixed rate note, as amended, extends the maturity date to August 1, 2013 and gives VFSL the right to cancel this note and require settlement of the aggregate unpaid principal and interest under this note on August 1, 2011 or August 1, 2012. There were no outstanding borrowings under this note atas ~~the time~~ of ~~the~~September 30, ~~amendment~~2010.

Debt Covenants

As of ~~June~~ September 30, 2010, we are in compliance with all of our debt covenants.

6.	Long-Term Incentive Plan

Verizon Wireless Long Term Incentive Plan

The 2000 Verizon Wireless Long Term Incentive Plan (“Wireless Plan”) provides compensation opportunities to eligible employees of the Partnership. The Wireless Plan provides rewards that are tied to the long-term performance of the Partnership. Under the Wireless Plan, Value Appreciation Rights (“VARs”) are granted to eligible employees. As of ~~June~~ September 30, 2010, all VARs were fully vested.

VARs reflect the change in the value of the Partnership, as defined in the Wireless Plan, similar to stock options. Once VARs become vested, employees can exercise their VARs and receive a payment that is equal to the difference between the VAR price on the date of grant and the VAR price on the date of exercise, less applicable taxes. VARs are fully exercisable three years from the date of grant with a maximum term of 10 years. All VARs were granted at a price equal to the estimated fair value of the Partnership, as defined in the Wireless Plan, at the date of grant.

For the three and ~~six~~nine months ended ~~June~~September 30, 2010 the intrinsic value of VARs exercised during the period was $30 13 million and $4558 million, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2009 the intrinsic value of VARs exercised during the period was $1215 million and $~~152~~167 million, respectively.

Cash paid to settle VARs for the three and ~~six~~nine months ended ~~June~~September 30, 2010 was $2716 million and $3955 million, respectively. Cash ~~paid~~ paid to settle VARs for the three and ~~six~~nine months ended ~~June~~September 30, 2009 was $911 million and $~~146~~157 million, respectively.

The following table summarizes award activity under the Wireless Plan as of June 30, 2010 and changes during the six-month period:

(shares in thousands)	VARs		Weighted AverageGrant Date Fair Value
Outstanding, December 31, 2009	16,591		$	16.54
Exercised	(3,210	)		25.31
Cancelled/Forfeited	(19	)		16.82
Outstanding, June 30, 2010	13,362		$	14.43

The following table summarizes ~~the~~award ~~status~~activity ofunder the ~~Partnership’s~~Wireless ~~VARs~~Plan as of ~~June~~September 30, 2010 and changes during the nine-month period:

	VARs Vested & Outstanding (a)
(shares in thousands)	VARs			Weighted AverageGrant Date Fair Value
(shares in thousands) Range of Exercise Prices	VARs		WeightedAverage RemainingContractual Life(Years)	WeightedAverageExercise Price
Outstanding, December 31, 2009		16,591		$	16.54
$8.74 - $14.79	9,900		3.21	$	12.25
Exercised		(4,456	)		25.48
$14.80 - $22.19	2,441		1.28		16.77
Cancelled/Forfeited		(51	)		21.84
$22.20 - $30.00	1,021		0.03		30.00
Outstanding, September 30, 2010		12,084		$	13.22
Total	13,362			$	14.43

~~(a)~~The Asfollowing oftable ~~June~~summarizes ~~30, 2010,~~ the ~~aggregate~~status ~~intrinsic~~of ~~value~~the ofPartnership’s VARs ~~outstanding~~as ~~and~~of ~~vested~~September 30, ~~was $327 million.~~2010:


	VARs Vested & Outstanding (a)
(shares in thousands) Range of Exercise Prices	VARs		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$8.74 - $14.79		9,683		2.96	$	12.25
$14.80 - $22.19		2,336		1.03		16.77
$22.20 - $30.00		65		—		30.00

Total		12,084			$	13.22

(a)	As of September 30, 2010, the aggregate intrinsic value of VARs outstanding and vested was $321 million.

Verizon Communications Inc. Long Term Incentive Plan

The 2009 Verizon Communications Inc. Long-Term Incentive Plan (the “Verizon Plan”) permits the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other awards to Partnership employees. The maximum number of shares available for awards from the Verizon Plan is ~~115~~119.6 million shares.

Restricted Stock Units

The Verizon Plan provides for grants of Restricted Stock Units (“RSUs”) that generally vest at the end of the third year after the grant. The RSUs outstanding at January 1, 2010 are classified as liability awards because the RSUs will be paid in cash upon vesting. The RSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the performance of Verizon common stock. The RSUs granted during 2010 are classified as equity awards because these RSUs will be paid in Verizon common stock upon vesting. Compensation expense for RSUs classified as equity awards is measured based on the market price of Verizon common stock at the date of grant and is recognized over the vesting period. Dividend equivalent units are also paid to participants at the time the RSU award is paid, and in the same proportion as the RSU award.

The Partnership had approximately 34.92 million and 3.5 million RSUs outstanding under the Verizon Plan as of ~~June~~September 30, 2010 and December 31, 2009, respectively.

Performance Stock Units

The Verizon Plan also provides for grants of Performance Stock Units (“PSUs”) that generally vest at the end of the third year after the grant. As defined by the Verizon Plan, the Human Resources Committee of the Board of Directors of Verizon determines the number of PSUs a participant earns based on the extent to which the corresponding goal has been achieved over the three-year performance cycle. All payments are subject to approval by the Verizon Human Resources Committee. The PSUs are classified as liability awards because the PSU awards are paid in cash upon vesting. The PSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the price of Verizon common stock as well as performance relative to the targets. Dividend equivalent units are also paid to participants at the time that the PSU award is determined and paid, and in the same proportion as the PSU award.

The Partnership had approximately 5.7 million and 5.2 million PSUs outstanding under the Verizon Plan as of June 30, 2010 and December 31, 2009, respectively.

corresponding goal has been achieved over the three-year performance cycle. All payments are subject to approval by the Verizon Human Resources Committee. The PSUs are classified as liability awards because the PSU awards are paid in cash upon vesting. The PSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the price of Verizon common stock as well as performance relative to the targets. Dividend equivalent units are also paid to participants at the time that the PSU award is determined and paid, and in the same proportion as the PSU award.

The Partnership had approximately 6.2 million and 5.2 million PSUs outstanding under the Verizon Plan as of September 30, 2010 and December 31, 2009, respectively.

7.	Partners’ Capital and Comprehensive Income

Partners’ Capital

Changes in Partners’ capital were as follows:

	Six Months Ended June 30, 2010
	Nine Months Ended September 30, 2010
(dollars in millions)	Attributable to CellcoPartnership			NoncontrollingInterest			TotalPartners’Capital
Balance at beginning of period	$	84,999		$	1,988		$	86,987
Net income		712,~~732~~089			~~140~~217			712,~~872~~306
Other comprehensive income (loss)		(70	)		—			(70	)
Comprehensive income		712,~~662~~019			~~140~~217			712,~~802~~236
Distributions		(23,~~114~~219	)		(~~144~~198	)		(23,~~258~~417	)
Disposition of noncontrolling interests		–			(36	)		(36	)
Noncontrolling interests in acquired company		—			2			2
Balance at end of period	$	90,547		$	1,948		$	92,495
Disposition of noncontrolling interests		—			(36	)		(36	)
Balance at end of period	$	93,799		$	1,973		$	95,772

Noncontrolling ~~interests~~interest included in our condensed consolidated financial statements includes Verizon’s ownership interest in our majority owned limited partnership Verizon Wireless of the East LP and noncontrolling interest in cellular partnerships.

Distributions

On February 12, 2010, we paid tax distributions to our Partners of $867 million, including an aggregate tax distribution of $700 million for the quarter ended December 31, 2009 as well as a $167 million supplemental tax distribution.

On May 14, 2010, we paid tax distributions to our Partners of $1,247 million, including an aggregate tax distribution of $1,080 million for the quarter ended March 31, 2010 as well as a $167 million supplemental tax distribution.

~~Comprehensive~~On ~~Income~~August 12, 2010, we paid tax distributions to our Partners of $1,105 million, including an aggregate tax distribution of $939 million for the quarter ended June 30, 2010 as well as a $166 million supplemental tax distribution.

Comprehensive income consists of net income and other gains and losses affecting Partners’ capital that, under generally accepted accounting principles, are excluded from net income. Significant changes in the components of Other comprehensive income (loss), net of income tax expense (benefit), are described below.

	Three Months EndedJune 30,					Six Months EndedJune 30,
(dollars in millions)	2010			2009		2010			2009
Net Income	$	3,792		$	3,643	$	7,872		$	7,168
Other Comprehensive Income (Loss), net of taxes
Net unrealized gain (loss) on cash flow hedges		(78	)		100		(70	)		178
Defined benefit pension and postretirement plans		—			1		—			3
Total Other Comprehensive Income (Loss)		(78	)		101		(70	)		181
Comprehensive Income	$	3,714		$	3,744	$	7,802		$	7,349
Comprehensive income attributable to noncontrolling interest	$	71		$	67	$	140		$	137
Comprehensive income attributable to Cellco Partnership		3,643			3,677		7,662			7,212
Comprehensive Income	$	3,714		$	3,744	$	7,802		$	7,349

Comprehensive Income


	Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in millions)	2010		2009			2010			2009
Net Income	$	4,434	$	3,699		$	12,306		$	10,867
Other Comprehensive Income (Loss), net of taxes
Net unrealized gain (loss) on cash flow hedges		—		(16	)		(70	)		162
Other		—		2			—			5

Total Other Comprehensive Income (Loss)		—		(14	)		(70	)		167

Comprehensive Income	$	4,434	$	3,685		$	12,236		$	11,034

Comprehensive income attributable to noncontrolling interest	$	77	$	76		$	217		$	213
Comprehensive income attributable to Cellco Partnership		4,357		3,609			12,019			10,821

Comprehensive Income	$	4,434	$	3,685		$	12,236		$	11,034

The components of Accumulated other comprehensive income were as follows:

(dollars in millions)	At ~~June~~September 30,2010			At December 31,2009
Unrealized gain on cash flow hedges	$	52		$	122
Defined benefit pension and postretirement plans		(9	)		(9	)
Other		(9	)		(9	)
Accumulated other comprehensive income	$	43		$	113

8.	Other Information

The Partnership’s service revenue and interest expense, net isare comprised of the following:

	Three Months EndedJune 30,						Six Months EndedJune 30,
	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
(dollars in millions)	2010			2009			2010			2009
Service revenue:
Voice revenue	$	9,~~202~~106		$	9,~~441~~395		$	1827,~~435~~541		$	1828,~~867~~262
Data revenue		45,~~586~~062			34,~~908~~130			914,~~198~~260			711,~~557~~687
Total service revenue	$	1314,~~788~~168		$	13,~~349~~525		$	2741,~~633~~801		$	2639,~~424~~949
Interest expense, net:
Interest expense	$	(~~285~~256	)	$	(~~352~~285	)	$	(~~566~~822	)	$	(~~868~~1,153	)
Affiliate interest expense		(2—	)		(1913	)		(8	)		(4054	)
Capitalized interest		~~182~~213			8172			~~318~~531			~~176~~249
Interest expense, net	$	(~~105~~43	)	$	(~~290~~226	)	$	(~~256~~299	)	$	(~~732~~958	)

9.	Commitments and Contingencies

The U.S. Wireless Alliance Agreement contains provisions, subject to specified limitations, that require Vodafone and Verizon to indemnify the Partnership for certain contingencies, excluding PrimeCo Personal Communications L.P. contingencies, arising prior to the formation of the Partnership.

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. Consequently, the ultimate liability with respect to these matters as of ~~June~~September 30, 2010 cannot be predicted with certainty. To the extent that actual results differ from any estimated liabilities previously recorded, the 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 an investigation of these matters and 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.

1213

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. References to “our Partners” refer to subsidiaries of Verizon Communications Inc. (“Verizon Communications”), and U.S. subsidiaries of Vodafone Group Plc (“Vodafone”), which are the partners in Cellco Partnership.

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and notes thereto contained elsewhere in this Form 10-Q.

This discussion reflects the results of operations of the markets acquired from Alltel Corporation (“Alltel”) that were not subject to divestiture requirements from the date of our acquisition of Alltel on January 9, 2009.

In connection with obtaining regulatory approvals to complete the acquisition of Alltel, we agreed to divest 105 markets in 24 states (“Alltel Divestiture Markets”). This discussion reflects the results of operations of these markets through the dates of divestiture to Atlantic Tele-Network Inc. (“ATN”) and AT&T Mobility LLC (“AT&T Mobility”), respectively.

Overview

We believe we are the industry-leading wireless service provider in the United States in terms of profitability, as measured by operating income. We are the largest national wireless service provider in the United States, as measured by total number of customers. We offer wireless voice and data services across one of the most extensive networks in the United States.

Our goal is to be the market leader in providing wireless voice and data communication services in the United States. We focus on providing a high-quality, differentiated service across a cost-efficient network designed to meet the growing needs of our customers. Our results of operations, financial condition and sources and uses of cash in recent periods reflect management’s continued focus on implementing the following key elements of our business strategy:

• Provide highest network reliability and continue to build out and expand our network. We continue to build out, expand and upgrade our network. We invested $46,~~032~~205 million in capital expenditures for the ~~six~~nine months ended ~~June~~September 30, 2010, primarily to fund continued investment in the capacity of our Evolution-Data Optimized (“EV-DO”) networks as well as the build-out of our fourth generation (“4G”) network based on Long Term Evolution (“LTE”) technology. We announced on October 6, 2010 that we will launch our 4G LTE network in 38 major metropolitan areas and in more than 60 commercial airports by the end of 2010. We expanded our national coverage in the ~~six~~nine months ended ~~June~~September 30, 2009, when we completed the acquisition of Alltel, paying $4,881 million, net of cash acquired from Alltel, for the equity of Alltel.

• Profitably acquire, satisfy and retain our customers and increase the value of our service offerings to customers. We expect to achieve revenue and operating income growth by retaining our existing base of customers, obtaining new customers, increasing individual customer usage of our existing services, and bringing our customers new ways of using wireless services in their daily lives. We had approximately 9293.12 million total customers at ~~June~~September 30, 2010, an increase of 54.07% from approximately 8789.70 million at ~~June~~September 30, 2009.

• Continue to expand our wireless data offerings and develop and bring to market innovative wireless devices for both consumers and business customers. As the demand for wireless data services grows, we continue to expand our offerings of data services and devices with advanced data capabilities for consumer and business customers, and we continue to increase our data revenues. We had total data ~~revenue~~revenues of $45,~~586~~062 million and $914,~~198~~260 million for the three and ~~six~~nine months ended ~~June~~September 30, 2010, respectively, representing increases of 17.3% and 21.7%, respectively, compared to the corresponding prior year periods. Our total data revenue accounted for 33.3% of our service revenue in both the three and six months ended June 30, 2010.

1314

~~• Focus on profitability and cash flow. Our goal is to maintain industry-leading profitability levels~~2010, ~~as measured by operating income~~respectively, ~~and~~representing toincreases ~~generate~~of ~~substantial cash flow from operations~~22. ~~Operating income increased by 2.~~6% and 622.40% ~~for the three and six months ended June 30~~, ~~2010,~~ respectively, compared to the corresponding prior year periods. ~~Cash~~Our ~~flow~~total ~~from~~data ~~operations~~revenue ~~increased~~accounted byfor 2635.97% ~~for~~and 34.1% of our service revenue in the ~~six~~three and nine months ended ~~June~~September 30, 2010, ~~compared to the similar period in 2009~~respectively.

•

Focus on profitability and cash flow. Our goal is to maintain industry-leading profitability levels, as measured by operating income, and to generate substantial cash flow from operations. Operating income increased by 11.9% and 8.3% for the three and nine months ended September 30, 2010, respectively, compared to the corresponding prior year periods. Cash flow from operations increased by 16.0% for the nine months ended September 30, 2010, compared to the similar period in 2009.

Trends

Information related to trends affecting our business was disclosed under Part II, Item 7 ~~to part II~~ of our Annual Report on Form 10-K for the year ended December 31, 2009. ~~During~~ ~~the~~While ~~three~~we ~~and~~experienced ~~six~~significant ~~months~~growth ~~ended~~in ~~June 30,~~our wireless reseller customer base during the first half of 2010, wethe ~~have~~number ~~continued~~of tonet ~~experience~~reseller ~~growth~~customer additions in ~~our~~the ~~reseller~~third ~~customer~~quarter was ~~base,~~comparatively lower than ~~and~~the wefirst ~~expect~~half ~~this~~of ~~trend~~the inyear ~~our~~on ~~net~~a ~~reseller~~quarterly ~~customer~~basis. We ~~additions~~cannot topredict at this time whether this third quarter trend will continue through the end of the year. There have been no other significant changes to our previously discussed trends.

1415

Consolidated Results of Operations

Selected Operating Statistics and Trends

	Three Months Ended June 30,									Six Months Ended June 30,
	Three Months Ended September 30,											Nine Months Ended September 30,
(in thousands, except churn)	2010			~~2009~~	2009		~~Change~~		% Change	~~2010~~		~~2009~~2010			~~Change~~	2009			% Change
Total customers										~~92,063~~		~~87,694~~	93,170		~~5.0~~		89,013			4.7
Retail customers										~~86,176~~		~~85,240~~	86,734		~~1.1~~		86,291			0.5
Total customer net additions in period(excluding the Alltel related acquisition and divestitures)	1,351			1,142			18.3			2,903		2,419			20.0
Total customer net additions in period (excluding acquisitions, divestitures and adjustments)		997				1,240				(19.6	)		3,895				3,658			6.5
Retail customer net additions in period(excluding the Alltel related acquisition and divestitures)	454			1,145			(60.3	)		742		2,406			(69.2	)
Retail customer net additions in period (excluding acquisitions, divestitures, and adjustments)		447				970				(53.9	)		1,185				3,375			(64.9	)
Total customer net additions (divestitures) in period (including acquisition and divestitures)	(738	)		1,142			nm			814		15,638			(94.8	)
Total churn rate		1.36	%			1.49	%			(8.7	)		1.34	%			1.44	%		(6.9	)
Retail customer net additions (divestitures) in period (including acquisition and divestitures)	(1,635	)		1,145			nm			(1,347	)	15,219			nm
Retail postpaid churn rate		1.07	%			1.13	%			(5.3	)		1.03	%			1.10	%		(6.4	)
Total churn rate	1.27	%		1.37	%		(7.3	)		1.34	%	1.42	%		(5.6	)
Retail postpaid churn rate	0.94	%		1.01	%		(6.9	)		1.01	%	1.08	%		(6.5	)

nmExcluding acquisitions, divestitures and adjustments, we added approximately 447,000 net retail customers during the three months ended September -30, 2010, compared to approximately 970,000 during the similar period in 2009, and approximately 1.2 ~~Not~~million ~~meaningful~~net retail customers during the nine months ended September 30, 2010, compared to approximately 3.4 million during the similar period in 2009. The decline in net retail customer additions during the three and nine months ended September 30, 2010 compared to the similar periods in 2009 was due to a decrease in gross retail customer additions, as well as an increase in churn for our retail prepaid base in part attributable to a marketplace shift in customer activations within the period toward unlimited prepaid offerings of the type being sold by a number of our resellers. However, we expect to continue to experience retail customer growth based on the strength of our product offerings and network service quality. Our churn rate during the three and nine months ended September 30, 2010, compared to the similar periods in 2009, improved as a result of successful customer retention efforts. Churn is the rate at which customers disconnect individual lines of service.

Excluding ~~the~~acquisitions, ~~Alltel~~divestitures ~~related acquisition~~ and ~~divestitures~~adjustments, we added approximately ~~454~~997,000 net ~~retail~~ total customers during the three months ended ~~June~~September 30, 2010, compared to approximately 1.12 million during the similar period in 2009, and approximately ~~742,000~~3.9 million net ~~retail~~total customers during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to approximately 2 3.47 million during the similar period in 2009. The ~~decline~~decrease in net ~~retail~~total customer additions during the three ~~and six~~ months ended ~~June~~September 30, 2010 ~~compared to the similar periods in 2009~~ was due to ~~a decrease~~ inthe ~~gross~~decline ~~retail customer additions as well as an increase~~ in ~~churn~~net ~~for our~~ retail ~~prepaid offerings, in part attributable to a marketplace shift in~~ customer ~~activations~~additions ~~within the period toward unlimited prepaid offerings of the type being sold by a number of our~~described ~~resellers~~above. ~~However,~~ weThe ~~expect~~increase toin ~~continue~~net tototal ~~experience retail~~ customer ~~growth~~additions ~~based on the strength of our product offerings and network service quality. Our churn rate~~ during the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2010, compared to the similar ~~periods~~period in 2009, ~~improved~~was asdue ato ~~result~~the ofcumulative ~~successful~~increase in net customer ~~retention~~additions ~~efforts.~~from ~~Churn~~our isreseller ~~the~~channel, ~~rate~~as ata ~~which~~result ~~customers~~of the ~~disconnect~~marketplace ~~individual~~shift ~~lines~~in ofcustomer ~~service~~activations mentioned above.

~~Excluding~~During the ~~Alltel~~second ~~related~~quarter ~~acquisition~~of ~~and divestitures~~2010, weour ~~added~~customer ~~approximately~~base ~~1.4 million net total customers during the three~~was ~~months~~reduced ~~ended~~by ~~June 30, 2010, compared to~~ approximately 12.1 million ~~during the similar period in 2009, and approximately 2.9 million~~ net ~~total~~ customers ~~during the six months ended June 30~~, ~~2010,~~primarily ~~compared~~as toa ~~approximately 2.4 million~~result ~~during~~of the ~~similar~~completion ~~period~~of ~~in 2009. The increase in net total customer additions during~~ the ~~three~~required ~~and~~divestitures ~~six months ended June 30, 2010, compared~~ to ~~the~~AT&T ~~similar~~Mobility ~~periods~~and ~~in 2009~~ATN, ~~was~~which ~~due~~resulted ~~to an increase in net customer additions~~ from ~~our~~ ~~reseller channel, as a result of~~ the ~~marketplace~~Alltel ~~shift~~acquisition, inpartially ~~customer~~offset ~~activations~~by ~~mentioned~~certain ~~above~~adjustments.

~~During~~Customers from acquisitions during the ~~second quarter,~~three ~~our~~and ~~customer~~nine ~~base~~months ~~was~~ended ~~reduced~~September 30, by2010 included approximately ~~2.1 million~~106,000 net customers, ~~primarily~~after asconforming aadjustments, ~~result~~that ofwe ~~the~~acquired ~~completion~~in ofa ~~the~~transaction ~~divestitures~~with to AT&T ~~Mobility~~Inc. ~~and ATN, partially offset by certain adjustments~~(AT&T). Customers from acquisitions for the ~~six~~nine months ended ~~June~~September 30, 2009 included approximately 13.2 million net total customer additions, after conforming adjustments but before the impact of required divestitures, which resulted from our acquisition of Alltel on January 9, 2009.

1516

Operating Revenue

	Three Months Ended June 30,								Six Months Ended June 30,
	Three Months Ended September 30,										Nine Months Ended September 30,
(dollars in millions, except ARPU)	2010		~~2009~~	2009		~~% Change~~		% Change	~~2010~~		~~2009~~2010		~~% Change~~	2009		% Change
Service revenue	$	1314,~~788~~168	$	~~13,349~~$	13,525	~~3.3~~			$4.8	~~27,633~~	$	2641,~~424~~801	~~4.6~~	$	39,949		4.6
Equipment and other		12,~~950~~082		~~2,131~~	2,272	~~(8.5~~	)		(8.4	~~3,888~~)		45,~~178~~970	~~(6.9~~	)	6,450		(7.4	)
Total Operating Revenue	$	1516,~~738~~250	$	~~15,480~~$	15,797	~~1.7~~			$2.9	~~31,521~~	$	3047,~~602~~771	~~3.0~~	$	46,399		3.0
Service ARPU	$	~~49.~~50.94	$	~~51.10~~$	51.04	~~(3.1~~	)		$(0.2	~~49.82~~)	$	50.9220	~~(2.2~~	)$	50.96		(1.5	)
Retail service ARPU		5051.5799		~~51.11~~	51.20	~~(1.1~~	)		1.5	~~50.76~~		51.0417	~~(0.5~~	)	51.09		0.2
Total data ARPU		1618.4620		~~14.96~~	15.59	~~10.0~~			16.7	~~16.59~~		1417.5612	~~13.9~~		14.91		14.8

Our total ~~operating~~ operating revenue during the three months ended ~~June~~September 30, 2010 increased by $~~258~~453 million, or 12.79%, and $~~919~~1,372 million, or 3.0%, during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009, primarily due to growth in service revenue, partially offset by the sale of the Alltel Divestiture Markets.

Service Revenue

Service revenue during the three months ended ~~June~~September 30, 2010 increased by $~~439~~643 million, or 34.38%, and $1,~~209~~852 million, or 4.6%, ~~during~~ during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009, primarily due to a 4.42 million, or 54.07%, increase in total customers since ~~July~~October 1, 2009, as well as continued growth ~~from~~in our data ~~services,~~average revenue per customer per month (ARPU). These increases were partially offset by a decline in ~~wireless~~ voice ARPU, as well as the sale of the Alltel Divestiture Markets which resulted in reductions of service revenue of $357 million and $447 million during the three and nine months ended September 30, 2010, respectively, compared to the similar periods in 2009.

During the second ~~three~~quarter ~~and~~of ~~six months ended June 30,~~ 2010, we recorded a one-time non-cash adjustment of $268 million primarily to reduce wireless data revenues. This adjustment was recorded to properly defer previously recognized wireless data revenues that will be earned and recognized in future periods. As the amounts involved were not material to our consolidated financial statements in the current or any previous reporting period, the adjustment was recorded during the second quarter of 2010.

Total data revenue was $45,~~586~~062 million and accounted for 3335.37% of service revenue during the three months ended ~~June~~September 30, 2010, compared to $34,~~908~~130 million and 2930.35% during the similar period in 2009. Total data revenue was $914,~~198~~260 million and accounted for 3334.31% of service revenue during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to $711,~~557~~687 million and 2829.63% during the similar period in 2009. Total data revenue continues to increase as a result of ~~growth~~the increased penetration of ~~our~~data offerings, in particular for e-mail, ~~Mobile~~and ~~Broadband~~web services resulting in part from increased sales of smartphone and ~~messaging~~other data-capable ~~services~~devices. As described above, the current year increase was partially offset by the one-time non-cash reduction to wireless data revenue asfor ~~described~~the ~~above~~nine months ended September 30, 2010. Voice revenue decreased as a result of continued declines in our voice ~~average revenue per customer per month (“~~ARPU”), as discussed below, partially offset by an increase in the number of customers. We expect that total service revenue and data revenue will continue to grow as we grow our customer base, increase the penetration of our data offerings and increase the proportion of our customer base using ~~third~~smartphone ~~generation~~and ~~(“3G”)~~other ~~multimedia~~data-capable ~~phones or 3G smartphone~~ devices.

~~The~~Our ~~declines~~retail service inARPU ~~both~~increased ~~our~~for ~~service~~both ~~ARPU~~the three and ~~retail~~nine ~~service~~months ~~ARPU~~ended ~~were~~September 30, 2010, primarily due to aincreases ~~continued reduction~~ in ~~voice~~our data revenue per customer, ~~partially~~as ~~offset~~a byresult of increases in our penetration of data offerings~~. Additionally~~, ~~the~~partially offset by a continued reduction in voice revenue per customer. The decline in our service ARPU was impacted by changes in our customer mix as a result of increased reseller net customer additions. Total voice ARPU declined $32.1071, or 87.6%, during the three months ended ~~June~~ September 30, 2010, and declined $32.1397, or 8.62%, during the ~~six~~nine months ended June 30, 2010, compared to the similar periods in 2009, due to the on-going impact of customers seeking to optimize the value of our offerings by moving to bundled minute and Family Share plans. The increases in total data ARPU were due to increases of $2.41 and $2.48 during the three and six months ended June 30, 2010, compared to the similar periods in 2009, as a result of continued growth and penetration of our data offerings, primarily as a result of data packages attached to our 3G multimedia phones and 3G smartphone devices. Partially offsetting the increases in total data ARPU were reductions of $0.91 and $0.45 during the three and six months ended June 30, 2010, respectively, as a result of the above mentioned one-time non-cash reduction to wireless data revenue.

1617

months ended September 30, 2010 compared to the similar periods in 2009 due to the impact of the aforementioned changes in our customer mix as well as the ongoing impact of customers seeking to optimize the value of our voice minute bundles. Total data ARPU increased $2.61 and $2.21 during the three and nine months ended September 30, 2010, compared to the similar periods in 2009, as a result of continued growth and penetration of our data offerings, resulting in part from the above mentioned increase in sales of our smartphone and other data-capable devices.

Equipment and Other Revenue

Equipment and other revenue during the three months ended ~~June~~September 30, 2010 decreased by $~~181~~190 million, or 8.54%, and $~~290~~480 million, or 6 7.94%, during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009. The decreases were partially due to the sale of the Alltel Divestiture Markets, which resulted in decreases of $87 million and $103 million, respectively, during the three and nine months ended September 30, 2010 compared to the similar periods in 2009. Equipment and other revenue also decreased ~~primarily~~ due to declines in gross retail customer additions, and ~~average~~during the three months ended September 30, 2010 was impacted by lower revenue from ~~per~~cost ~~equipment~~recovery ~~unit~~surcharges as a result of ~~promotional activities~~a decrease in our cost recovery rate.

Operating Costs and Expenses

	Three Months Ended June 30,								Six Months Ended June 30,
	Three Months Ended September 30,										Nine Months Ended September 30,
(dollars in millions)	2010		~~2009~~	2009		~~% Change~~		% Change	~~2010~~		~~2009~~2010		~~% Change~~	2009		% Change
Cost of service	$	2,~~025~~112	$	~~1,912~~$	1,920	~~5.9~~			$10.0	~~4,025~~	$	36,~~831~~137	~~5.1~~	$	5,751		6.7
Cost of equipment		2,~~851~~997		~~2,936~~	3,184	~~(2.9~~	)		(5.9	~~5,663~~)		58,~~739~~660	~~(1.3~~	)	8,923		(2.9	)
Selling, general and administrative		4,~~623~~585		~~4,536~~	4,642	~~1.9~~			(1.2	~~9,305~~)		913,~~117~~890	~~2.1~~		13,759		1.0
Depreciation and amortization		1,~~852~~861		~~1,819~~	1,854	~~1.8~~			0.4	~~3,692~~		35,~~612~~553	~~2.2~~		5,466		1.6
Total Operating Costs and Expenses	$	11,~~351~~555	$	~~11,203~~$	11,600	~~1.3~~			$(0.4	~~22,685~~)	$	2234,~~299~~240	~~1.7~~	$	33,899		1.0

Cost of Service

Cost of service during the three months ended ~~June~~September 30, 2010 increased by $~~113~~192 million, or 510.90%, and $~~194~~386 million, or 56.17%, during the ~~six~~ nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009. The increase in cost of service was primarily attributable to higher wireless network costs due to increases in local interconnection cost as a result of both increased capacity needs from increases in data usage and costs incurred to transition to Ethernet facilities that will be used to enable LTE technology, as well as increases in roaming costs as a result of increased international roaming volumes, data roaming and roaming costs incurred in the Alltel Divestiture Markets. Also contributing to higher wireless network costs during the nine months ended September 30, 2010 compared to the similar period in 2009 was an increase in operating lease expense ~~and~~related ~~local~~to ~~interconnection cost~~our network cell sites. Cost of service in the three and ~~six~~nine months ended ~~June~~September 30, 2010 also included $5167 million and $75142 million, respectively, and $36 million and $2733 million, respectively, during similar periods in 2009, for merger integration costs related to the acquisition of Alltel.

Cost of Equipment

Cost of equipment during the three months ended ~~June~~September 30, 2010 decreased by $85187 million, or 25.9%, and $76263 million, or 12.39%, during the ~~six~~ nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009, ~~primarily~~in part due to a decrease in gross retail customer additions partially offset by an increase in the average cost per unit. The sale of the Alltel Divestiture Markets resulted in decreases of $71 million and $81 million, respectively, for the three and nine months ended September 30, 2010 compared to the similar periods in 2009. Cost of equipment in the three and ~~six~~nine months ended ~~June~~September 30, 2010 also included $4525 million and $5883 million, respectively, and $2173 million and $58131 million, respectively, during similar periods in 2009, for merger integration costs related to the Alltel acquisition.

~~Selling,~~18 ~~General and Administrative Expenses~~

Selling, general and administrative expense during the three months ended June 30, 2010 increased by $87 million, or 1.9%, and $188 million, or 2.1%, during the six months ended June 30, 2010, compared to the similar periods in 2009, primarily due to an increase in sales commission expense in our indirect channel as well as an increase in regulatory fees. Indirect sales commission expense increased $195 million and $312 million, respectively, during the three and six months ended June 30, 2010 as a result of increases in both equipment upgrades leading to contract renewals and the average commission per unit as the mix of units and service plans sold continues to shift toward data devices and bundled data plans. Regulatory fees increased $32 million and $109 million, respectively, during the three and six months ended June 30, 2010, compared to the similar periods in 2009, due to both the growth in our revenues subject to fees and an increase in the federal universal service fund rate. These increases were partially offset by a decrease in compensation related costs, excluding commissions, of $126 million and $91 million during the three and six months ended June 30, 2010, compared to the similar periods in 2009. Selling, general and administrative expenses in the three and six months ended June 30, 2010 also included $66 million and $106 million, respectively, of merger integration costs related to the acquisition of Alltel. Selling, general and administrative expenses in the three and six months ended June 30, 2009 included $66 million and $206 million, respectively, primarily related to the acquisition of Alltel, for transaction fees and costs associated with the acquisition and merger integration costs.

Selling, General and Administrative Expenses

Selling, general and administrative expense during the three months ended September 30, 2010 decreased by $57 million, or 1.2%, compared to the similar period in 2009, primarily due to a $141 million reduction in expense as the result of the sale of the Alltel Divestiture Markets, and a $60 million reduction in merger integration costs related to the Alltel acquisition. These decreases were partially offset by a $175 million increase in our sales commission expense in our indirect channel as a result of increases in both contract renewals in connection with equipment upgrades and the average commission per unit as the mix of units and service plans sold continues to shift toward data devices.

Selling, general and administrative expense during the nine months ended September 30, 2010 increased $131 million, or 1.0%, compared to the similar period in 2009, primarily due to a $494 million increase in sales commission expense in our indirect channel for the reasons mentioned above as well as a $110 million increase in our non-income taxes due to both the growth in our revenues subject to fees as well as increases in the federal universal service fund rate. These increases were partially offset by a $139 million reduction in expense as a result of the sale of the Alltel Divestiture Markets, a $160 million reduction in merger integration costs related to the Alltel acquisition and a $141 million decrease in compensation related costs, excluding commissions.

Depreciation and Amortization Expense

Depreciation and amortization expense during the three months ended ~~June~~September 30, 2010 increased by $337 million, or 10.84%, and $8087 million, or 21.26%, during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009. These increases were primarily driven by growth in depreciable assets through the ~~second~~third quarter of 2010.

Other Consolidated Results

	Three Months Ended June 30,									Six Months Ended June 30,
	Three Months Ended September 30,										Nine Months Ended September 30,
(dollars in millions)	2010			2009			% Change			~~2010~~	2010			~~2009~~	2009			~~% Change~~	% Change
Interest expense, net	$	(~~105~~43	)	$	(~~290~~226	)	~~(63.8~~	)(81.0	)	$	~~(256~~$	)(299	)	$	~~(732~~$	)(958	)	~~(65.0~~	)	(68.8	)
Interest income and other, net		1522			19		~~(21.1~~	)15.8			40	62			39	58		~~2.6~~		6.9
Provision for income taxes		(~~505~~240	)		(~~363~~291	)	~~39.1~~	(17.5	)		~~(748~~	)(988	)		~~(442~~	)(733	)	~~69.2~~		34.8
Effective income tax rate		115.81	%		97.13	%	~~29.7~~	(29.6	)		~~8.7~~	%7.4	%		~~5.8~~	%6.3	%	~~49.4~~		17.6
Net income attributable to noncontrolling interest		7177			6776		~~6.0~~	1.3			~~140~~	217			~~137~~	213		~~2.2~~		1.9

Interest expense, net

Interest expense, net during the three months ended ~~June~~September 30, 2010 decreased by $~~185~~183 million, or 6381.80%, and $~~476~~659 million, or 6568.08%, during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009, primarily due to a decrease in the weighted-average amount of debt outstanding ~~and lower weighted-average interest rates~~. The decrease in the weighted-average amount of debt outstanding compared to the similar periods in 2009 was primarily driven by repayments ~~for~~of both affiliate and external borrowings. Interest costs during the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2009 also included fees related to the bridge facility that was entered into and utilized to complete the acquisition of Alltel~~, which contributed to the higher weighted-average interest rate in the prior year~~.

Capitalized interest for the three and ~~six~~nine months ended ~~June~~September 30, 2010 was $~~182~~213 million and $~~318~~531 million, respectively, relating to capitalization of interest on wireless licenses under development for commercial services, primarily as a result of the spectrum acquired in the 700 MHZ auction.

Provision for income taxes

The effective tax rate for the three months ended September 30, 2010 compared to the similar period in 2009 decreased due to one-time tax benefits related to audit settlements and ~~six~~deferred tax requirements. The effective tax rate for the nine months ended ~~June~~September 30, 2010 compared to the similar ~~periods~~period in 2009 increased mainly due to a tax charge of approximately $201 million for the taxable gain on the excess of book over tax basis of the goodwill associated with the Alltel Divestiture Markets, which we recorded upon the completion of the divestitures. ~~In addition, during the three months ended March 31, 2009, there was a one-time benefit resulting from the Alltel acquisition’s impact on our deferred tax liability.~~

Net Income

	Three Months Ended June 30,						Six Months Ended June 30,
	Three Months Ended September 30,									Nine Months Ended September 30,
(dollars in millions)	2010		~~2009~~	2009		~~% Change~~	~~2010~~% Change		~~2009~~	2010		~~% Change~~	2009		% Change
Net income	$	34,~~792~~434	$	~~3,643~~$	3,699	~~4.1~~	$	~~7,872~~19.9	$	~~7,168~~$	12,306	~~9.8~~	$	10,867		13.2

Net income during the three months ended ~~June~~September 30, 2010 increased by $~~149~~735 million, or 419.19%, and $~~704~~1,439 million, or 913.82%, during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to the similar periods in 2009, primarily as a result of the impact of factors described in connection with operating revenue and operating expenses above.

1820

Consolidated Financial Condition

Six Months Ended June 30,

Nine Months Ended September 30,

(dollars in millions)

2010

2009

Change

Net cash provided by operating activities

1319,~~223~~502

1016,~~418~~810

~~2,805~~

2,692

Net cash used in investing activities

(14,~~762~~407

)

(810,~~392~~328

)

~~6,630~~

5,921

Net cash used in financing activities

(1113,~~052~~438

)

(1014,~~704~~897

)

~~(348~~

)1,459

Increase (Decrease) in cash

~~409~~1,657

(8,~~678~~415

)

~~9,087~~

10,072

We use the net cash generated from our operations to fund network expansion and technology upgrades, repay affiliate and external debt, pay distributions to our Partners, and from time to time, make strategic investments in licenses or operating markets. We believe that internally generated funds are sufficient to meet ongoing operating and investing requirements. We expect that our capital spending, distributions to our Partners at current levels, interest payments on our debt and other general corporate expenditures will continue to be financed primarily through internally generated funds. We also have borrowing capacity under a fixed rate promissory note with an affiliate that provides daily liquidity and permits us to borrow, repay and re-borrow from time to time up to $0.8 billion. ~~This note provides daily liquidity, which has historically allowed us to maintain low cash balances.~~

The amount of cash that we need to service our debt substantially increased with the acquisition of Alltel. Our ability to make payments on our debt when due will depend largely upon our future cash balances and operating performance. Internally generated funds may not be sufficient to repay the principal on our debt when due, or to pay additional distributions to our Partners, if declared, and as a result, we may need to obtain cash from other sources. Sources of future affiliate and external financing requirements may include a combination of debt financing provided through affiliate debt facilities with Verizon Communications and its subsidiaries, borrowings from banks, or debt issued in private placements or in the public markets.

Cash Flows Provided By Operating Activities

Our primary source of funds continues to be cash generated from operations. Net cash provided by operating activities during the ~~six~~nine months ended ~~June~~September 30, 2010 increased by $2.87 billion, or 2616.90%, compared to the similar period in 2009, primarily due to an increase in changes in working capital along with increases in operating income.

Cash Flows Used In Investing Activities

Capital Expenditures

Capital expenditures continue to be our primary ongoing use of capital resources as they facilitate the introduction of new products and services, enhance responsiveness to competitive challenges and increase the operating efficiency and productivity of our wireless networks. We invested $46.02 billion and $35.31 billion in capital expenditures, including capitalized software, in the ~~six~~ nine months ended ~~June~~September 30, 2010 and 2009, respectively. The increase in capital expenditures during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to the similar period in 2009, was primarily due to ~~continued~~increased investment in the capacity of our wireless EV-DO networks and funding the build-out of our 4G network based on LTE technology.

Dispositions

During the ~~six~~nine months ended ~~June~~September 30, 2010, we received cash proceeds of $2.6 billion in connection with the required divestitures of overlapping properties as a result of the acquisition of Alltel (see Recent Developments).

Acquisitions

On August 23, 2010, we completed our acquisition of the net assets and related customers of six operating markets in Louisiana and Mississippi in a transaction with AT&T for cash consideration of $235 million (see Recent Developments).

On January 9, 2009, we completed our acquisition of the equity of Alltel for cash consideration of $4.9 billion, net of cash acquired from Alltel.

Cash Flows Used In Financing Activities

During the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009, net cash used in financing ~~activities~~ activities was $1113.14 billion and $1014.79 billion, respectively, which primarily included net debt repayments and distributions to our Partners as described below.

Our total debt decreased by $910.1 billion to $1716.65 billion during the ~~six~~nine months ended ~~June~~September 30, 2010, compared to December 31, 2009, primarily due to the following debt repayments:

• During the ~~six~~nine months ended ~~June~~September 30, 2010, we repaid $5.0 billion of our $9.4 billion floating rate promissory note, which was payable to Verizon Financial Services LLC (“VFSL”), a wholly-owned subsidiary of Verizon Communications. No borrowings remain outstanding under this note as of September 30, 2010 and this note has been cancelled.

• During the ~~six~~nine months ended ~~June~~September 30, 2010, we repaid $24.80 billion of borrowings under a three-year term loan facility,. ~~reducing~~No ~~the~~borrowings remain outstanding ~~borrowings~~ under this facility toas ~~$1.2~~of ~~billion~~September ~~at June~~ 30, 2010. ~~During~~and ~~July 2010, we repaid $0.7 billion of borrowings under~~ this facility, ~~reducing~~has ~~the~~been ~~outstanding borrowings under this facility to $0~~cancelled.~~5 billion.~~

• On June 28, 2010, we exercised our right to redeem all of our outstanding $1~~,000~~.0 ~~million~~billion Put/Call Floating Rate Notes due June 2011 at a redemption price of 100% of the principal amount of the notes, plus accrued and unpaid interest through the date of redemption.

Additionally, on July 28, 2010, we entered into an amendment of our affiliate $750 million fixed rate promissory note payable to VFSL, due August 1, 2010. The fixed rate note, as amended, extends the maturity date to August 1, 2013 and gives VFSL the right to cancel this note and require settlement of the aggregate unpaid principal and interest under this note on August 1, 2011 or August 1, 2012. There were no outstanding borrowings under this note atas ~~the time~~ of ~~the~~September 30, ~~amendment~~2010.

Distributions

As required under the Partnership Agreement, we paid aggregate tax distributions of $23,~~114~~219 million and $12,~~427~~396 million to our Partners during the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009, respectively. In addition to our quarterly tax distribution to our Partners, our Partners have directed us to make supplemental tax distributions to them, subject to our board of representatives’ right to reconsider these distributions based on significant changes in overall business and financial conditions. During the ~~six~~nine months ended ~~June~~September 30, 2010, we made a supplemental tax ~~distribution~~distributions in the aggregate amount of $~~334~~500 million, which is included in the total distribution paid above. Supplemental tax distributions in the amount of $~~333~~ 167 million, comprised of $~~150~~75 million to Vodafone and $~~183~~92 million to Verizon Communications, remain payable in ~~equal installments in each of~~ the remaining ~~quarters~~quarter of 2010. Subsequent annual supplemental tax distributions in the amount of $667 million comprised of $300 million to Vodafone and $367 million to Verizon Communications, in each of 2011 and 2012, ~~will~~are scheduled to be paid in equal quarterly installments during each of those years on the same dates that the established regular quarterly tax distributions are made.

~~Credit~~22 ~~Ratings~~

There were no changes to the credit ratings of Cellco Partnership from those discussed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Cash Flows (Used in)/Provided by Financing Activities,” in our Annual Report on Form 10-K for the year ended December 31, 2009.

The three primary rating agencies have identified factors which they believe could result in a ratings downgrade for Cellco Partnership in the future, including sustained leverage levels resulting from: (i) diminished wireless operating performance as a result of a weakening economy and competitive pressures; and (ii) failure to achieve significant synergies from the Alltel integration. A downgrade in our credit rating, or that of Verizon Communications, would increase our cost of obtaining financing, and could affect the amounts of indebtedness and types of financing structures and debt that may be available to us.

Credit Ratings

In August 2010, Standard & Poor’s placed the ratings of Verizon Communications and subsidiaries, including Cellco Partnership, on CreditWatch with negative implications. The CreditWatch includes Cellco Partnership’s ‘A’ long-term rating and ‘A-1’ short-term rating. There were no other changes to the outlooks or credit ratings of Cellco Partnership discussed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Cash Flows (Used in)/Provided by Financing Activities,” in our Annual Report on Form 10-K for the year ended December 31, 2009. The three primary rating agencies have identified factors which they believe could result in a ratings downgrade for Cellco Partnership in the future, including sustained leverage levels resulting from: (i) diminished wireless operating performance as a result of a weakening economy and competitive pressures; and (ii) failure to achieve significant synergies from the Alltel integration. A downgrade in our credit rating, or that of Verizon Communications, would increase our cost of obtaining financing, and could affect the amounts of indebtedness and types of financing structures and debt that may be available to us. Securities ratings assigned by rating organizations are expressions of opinion and are not recommendations to buy, sell, or hold securities. A securities rating is subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated independently of any other rating.

Covenants

~~Our~~The ~~three-year~~instruments ~~term~~governing ~~loan~~our external ~~facility~~debt ~~contains~~contain covenants that are typical for large, investment grade companies. These covenants include requirements to pay interest and principal in a timely fashion, to pay taxes, to maintain insurance with responsible and reputable insurance companies, to keep appropriate books and records of financial transactions, to maintain our properties, to provide financial and other reports to our lenders, to limit pledging and disposition of assets and mergers and consolidations, and other similar covenants.

InAs ~~addition, we are required to maintain on the last day~~ of ~~any period of four fiscal quarters a leverage ratio of debt to earnings~~ ~~before interest~~September 30, ~~taxes~~2010, ~~depreciation,~~we ~~amortization~~were ~~and other adjustments, as defined~~ in ~~the~~compliance ~~three-year~~with ~~term~~all ~~loan facility, not in excess~~ of ~~3.25~~our ~~times~~debt ~~based on the preceding twelve months~~covenants. ~~At June 30, 2010, the leverage ratio was 0.7 times.~~

As of June 30, 2010, we were in compliance with all of our debt covenants.

Increase (Decrease) In Cash and Cash Equivalents

Our Cash and cash equivalents at ~~June~~September 30, 2010 totaled $12.03 billion, a $01.47 billion increase compared to Cash and cash equivalents at December 31, 2009 for the reasons discussed above.

2123

Market Risk

We are exposed to various types of market risk in the normal course of business, including the impact of interest rate changes and foreign currency exchange rate fluctuations. We employ risk management strategies which may include the use of a variety of derivatives, including cross-currency swaps and interest rate swap agreements. We do not hold derivatives for trading purposes.

It is our general policy to enter into interest rate and foreign currency derivative transactions only to the extent necessary to achieve our desired objectives in limiting our exposure to the various market risks. Our objectives include maintaining a mix of fixed and variable rate debt to lower borrowing costs within reasonable risk parameters and to protect against earnings and cash flow volatility resulting from changes in market conditions. We do not hedge our market risk exposure in a manner that would completely eliminate the effect of changes in interest rates and foreign exchange rates on our earnings. We do not expect that our net income, liquidity nor cash flows will be materially affected by these risk management strategies.

Interest Rate Risk

Our primary market risk relates to changes in interest rates, primarily on the portion of our debt that carries a floating interest rate. As of ~~June~~September 30, 2010 we had approximately $21.53 billion of aggregate floating rate debt outstanding. A change in the interest rate of 1.0% would change annual interest expense by $2513 million. ~~The interest rates on our existing debt obligations, with the exception of the three-year term loan facility, are unaffected by changes to our credit ratings.~~

Foreign Currency Risk

Cross Currency Swaps

We have entered into cross currency swaps designated as cash flow hedges to exchange approximately $2.4 billion of ~~the net proceeds from a debt offering of~~ British Pound Sterling and Euro denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as mitigate the impact of foreign currency transaction gains or losses. The fair value of ~~these~~the cross currency swaps included in Other intangibles and other assets, net ~~and Other non-current liabilities~~ was $34139 million and $~~103~~315 million, ~~respectively,~~ at ~~June~~September 30, 2010. ~~The fair value of these swaps included in Other intangibles~~ and ~~other assets, net was $315 million at~~ December 31, 2009, respectively. ~~During~~For the three and ~~six~~nine months ended ~~June~~September 30, 2010, a pretax ~~loss of~~ $~~239~~207 million gain and $~~383~~176 million loss, respectively, on the cross currency swaps was recognized in Other comprehensive income (loss), a portion of which was reclassified to Interest income and other, net to offset the related pretax foreign-currency transaction gain or loss on the underlying debt obligations.

2224

Other Factors That May Affect Future Results

Recent Developments

Alltel Divestiture Markets

As a condition of the regulatory approvals by the Department of Justice and the Federal Communications Commission to complete the acquisition of Alltel in January 2009, we were required to divest overlapping properties in 105 operating markets in 24 states. Total assets and total liabilities divested were $2.6 billion and $0.1 billion, respectively, principally comprised of network assets, wireless licenses and customer relationships; that were included in Prepaid expenses and other current assets and Other current liabilities, respectively, on the accompanying condensed consolidated balance ~~sheets~~sheet at December 31, 2009.

On May 8, 2009, we entered into a definitive agreement with AT&T Mobility, a subsidiary of AT&T ~~Inc.~~, pursuant to which AT&T Mobility agreed to acquire 79 of the 105 Alltel Divestiture Markets, including licenses and network assets for approximately $2.4 billion in cash. On June 9, 2009, we entered into a definitive agreement with ATN, pursuant to which ATN agreed to acquire the remaining 26 Alltel Divestiture Markets, including licenses and network assets, for $200 million in cash. During the second quarter of 2010, we received the necessary regulatory approvals and completed both transactions.

Other

On August 23, 2010, the Partnership acquired the net assets and related customers of six operating markets in Louisiana and Mississippi in a transaction with AT&T for cash consideration of $235 million. These assets were acquired to enhance the Partnership’s network coverage in these operating markets. The preliminary purchase price allocation primarily resulted in $106 million of wireless licenses and $76 million in goodwill.

Regulatory and Competitive Trends

Information related to Regulatory and Competitive Trends is disclosed in Part I, Item 1. “Business” in our Annual Report on Form 10-K for the year ended December 31, 2009.

Recent Accounting Standards

In ~~September~~July ~~2009~~2010, the accounting standard update regarding ~~revenue~~disclosures ~~recognition~~ for ~~multiple~~finance receivables and ~~deliverable~~allowances ~~arrangements~~for credit losses was issued. This standard update requires ~~the~~that ~~use~~entities ofdisclose ~~the~~information ~~relative~~at ~~selling~~more ~~price~~disaggregated ~~method~~levels ~~when~~than ~~allocating~~currently ~~revenue in these types of arrangements~~required. ~~This~~We ~~method~~will ~~allows~~adopt athis ~~vendor~~standard toupdate ~~use~~during ~~its~~the ~~best~~fourth ~~estimate~~quarter of ~~selling~~2010. ~~price if neither~~The ~~vendor~~adoption ~~specific objective evidence nor third party evidence~~ of ~~selling~~this ~~price exists when evaluating multiple deliverable arrangements. This~~ standard update is ~~effective~~not ~~January 1,~~expected ~~2011~~to ~~and~~have ~~may~~a besignificant adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact ~~that this standard update will have~~ on our consolidated financial statements.

In September 2009, the accounting standard update regarding revenue recognition for multiple deliverable arrangements was issued. This update requires the use of the relative selling price method when allocating revenue in these types of arrangements. This method allows a vendor to use its best estimate of selling price if neither vendor-specific objective evidence nor third party evidence of selling price exists when evaluating multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact that this standard update will have on our consolidated financial statements.

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Cautionary Statement Concerning Forward-Looking Statements

In this Quarterly Report on Form 10-Q we have made 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. Forward-looking statements also include those preceded or followed by the words “anticipates,” “believes,” “estimates,” “hopes” or similar expressions.

The following important factors, along with those discussed elsewhere in this Quarterly Report and those disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009 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;

•

the effects of adverse conditions in the U.S. economy;

•

the effects of competition in our markets;

•

the effects of material changes in available technology;

•

any disruption of our suppliers’ provisioning of critical products or services;

•

the impact of natural or man-made disasters or existing or future litigation and any resulting financial impact not covered by insurance;

•

technology substitution;

•

an adverse change in the ratings afforded our debt securities, or those of Verizon Communications, by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing;

•

our ability to obtain sufficient financing to satisfy our substantial capital requirements, including to fund capital expenditures, debt service and distributions to our owners, and to refinance our existing debt;

•

any changes in the regulatory environments in which we operate, including any loss of or inability to renew wireless licenses, and the final results of federal and state regulatory proceedings and judicial review of those results;

•

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;

•

our ability to complete acquisitions and dispositions;

•

our ability to successfully integrate Alltel Corporation into our business and achieve the anticipated benefits of the acquisition;

•

the impact of continued unionization efforts with respect to our employees; and

•

the inability to implement our business strategies.

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 under the caption “Market Risk.”

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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. Based on this evaluation, our chief executive officer and chief financial officer have concluded that the registrant’s disclosure controls and procedures were effective as of ~~June~~September 30, 2010.

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

We are a defendant, ~~along~~in ~~with~~a ~~other~~putative ~~wireless~~nationwide ~~service~~class ~~providers~~action, ~~wireless~~Demmick, ~~phone~~et ~~manufacturers~~al. v. Cellco Partnership, ~~standard-setting~~filed ~~bodies~~May 11, ~~industry~~2006, ~~trade~~in ~~associations~~the ~~and~~U.S. ~~others~~District Court for the District of New Jersey (District Court), alleging that (i) while we charge one rate for after-allowance minutes on the primary line in our Family SharePlan and a ~~lawsuit~~different, ~~Marks~~higher v.rate ~~Motorola~~on the secondary lines, ~~filed~~we inhave ~~the~~an ~~Superior~~undisclosed ~~Court~~policy ~~for~~of billing all after-allowance minutes at the ~~District~~higher ofper ~~Columbia~~minute onrate applicable to the ~~April~~secondary lines, and (ii) 22we improperly billed for in-network calls that should have been provided without charge to certain subscribers. On September 8, 2010., ~~The~~the ~~plaintiff~~District ~~alleges~~Court certified a nationwide “after-allowance” class ~~personal~~with ~~injuries,~~respect ~~including~~to ~~brain~~plaintiffs’ ~~cancer,~~Federal ~~from~~Communications ~~wireless~~Act ~~phone~~(FCA) ~~use.~~and ~~Cellular~~Declaratory ~~One~~Judgment ~~Group~~Act (DJA) claims, and ~~Western~~New ~~Wireless~~Jersey ~~Corp~~and Maryland classes on the breach-of-contract claims., The ~~both~~court also ~~Alltel~~certified an “in-~~related~~network” ~~entities~~class, approving ~~are~~nationwide ~~also~~class ~~named~~treatment asof ~~defendants~~plaintiffs’ inFCA ~~this~~and ~~lawsuit.~~DJA ~~Plaintiff seeks compensatory~~claims, ~~consequential~~and a Maryland-only class asserting claims for breach of contract and~~/or~~ ~~punitive~~violation ~~damages~~of the Maryland Consumer Protection Act. We have petitioned the U.S. Court of Appeals for the Third Circuit for interlocutory review of the District Court’s certification order.

On June 22, 2010, the Court of Appeals for the Ninth Circuit affirmed the District Court’s dismissal of all remaining claims of plaintiffs in Jasso, et al. v. Verizon Wireless, et al., an action by pro se plaintiffs that was filed on November 30, 2005 in the U.S. District Court, Eastern District of California. Plaintiffs alleged various illnesses as a result of alleged exposure to radiofrequency emissions from radiofrequency antennas that plaintiffs claimed had failed to comply with federal regulatory emissions standards. Plaintiffs sought unspecified compensatory and exemplary damages and attorneys’ fees. On July 2, 2010, the plaintiffs filed a motion for reconsideration of the Ninth Circuit’s decision.

Item 1A.

Risk Factors

There have been no material changes to our risk factors as previously disclosed in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2009.

Item 6.

Exhibits

ExhibitNumber		Description
3.1		Amendment No. 4 to Cellco Partnership Amended and Restated Partnership Agreement, dated as of July 16, 2010.
10.1		Amendment No. 9, dated as of July 28, 2010, to the Fixed Rate Promissory Note Between Cellco Partnership and Verizon Financial Services LLC dated as of September 1, 2005 (Incorporated herein by reference to Exhibit No. 10.2 to the Cellco Partnership Form 10-Q for the period ended June 30, 2010 (No. 333-160446))
10.1		Amendment No. 9, dated as of April 30, 2010, to the Auction 73 Floating Rate Promissory Note between Cellco Partnership and Verizon Financial Services dated as of March 31, 2008.
10.2		Secondment Agreement between Vodafone Americas Inc. and Cellco Partnership, dated as of September 24, 2010 (Incorporated herein by reference to Exhibit No. 10.1 to the Cellco Partnership Form 8-K/A dated September 9, 2010 (No. 333-160446))
10.2		Amendment No. 9, dated as of July 28, 2010, to the Fixed Rate Promissory Note Between Cellco Partnership and Verizon Financial Services LLC dated as of September 1, 2005.
10.3		Long Term International Assignment Agreement between Vodafone Group Services Limited and Andrew Davies, effective September 29, 2010 (Incorporated herein by reference to Exhibit No. 10.2 to the Cellco Partnership Form 8-K/A dated September 9, 2010 (No. 333-160446))
12		Computation of Ratio of Earnings to Fixed Charges.
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of 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.

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Exhibit Index

ExhibitNumber		Description
3.1		Amendment No. 4 to Cellco Partnership Amended and Restated Partnership Agreement, dated as of July 16, 2010.
10.1		Amendment No. 9, dated as of July 28, 2010, to the Fixed Rate Promissory Note Between Cellco Partnership and Verizon Financial Services LLC dated as of September 1, 2005 (Incorporated herein by reference to the Cellco Partnership Form 10-Q for the period ended June 30, 2010 (No. 333-160446))
10.1		Amendment No. 9, dated as of April 30, 2010, to the Auction 73 Floating Rate Promissory Note between Cellco Partnership and Verizon Financial Services dated as of March 31, 2008.
10.2		Secondment Agreement between Vodafone Americas Inc. and Cellco Partnership, dated as of September 24, 2010 (Incorporated herein by reference to Exhibit No. 10.1 to the Cellco Partnership Form 8-K/A dated September 9, 2010 (No. 333-160446))
10.2		Amendment No. 9, dated as of July 28, 2010, to the Fixed Rate Promissory Note Between Cellco Partnership and Verizon Financial Services LLC dated as of September 1, 2005.
10.3		Long Term International Assignment Agreement between Vodafone Group Services Limited and Andrew Davies, effective September 29, 2010 (Incorporated herein by reference to Exhibit No. 10.2 to the Cellco Partnership Form 8-K/A dated September 9, 2010 (No. 333-160446))
12		Computation of Ratio of Earnings to Fixed Charges.
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of 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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