US Cellular 2008 Annual Report Download - page 137

Divestitures provided $6.8 million, $4.3 million and $101.6 million in 2008, 2007 and 2006, respectively.
U.S. Cellular received $95.1 million of cash related to the sale of its interest in Midwest Wireless during
2006. See Note 6—Acquisitions, Divestitures and Exchanges in the Notes to Consolidated Financial
Statements for details of these transactions.
In 2008, U.S. Cellular realized cash proceeds of $16.7 million from the disposition of Rural Cellular
Corporation (‘‘RCC’’) Common Shares in conjunction with Verizon Wireless’ acquisition of RCC. In 2007,
U.S. Cellular realized cash proceeds of $4.3 million related to the disposition of Vodafone ADRs. See
Note 2—Investment Gains and Losses in the Notes to Consolidated Financial Statements for details of
these transactions.
At an extraordinary general meeting held on July 25, 2006, shareholders of Vodafone approved a special
distribution of £0.15 per share (£1.50 per ADR) and a share consolidation under which every eight ADRs
of Vodafone were consolidated into seven ADRs. As a result of the special distribution, which was paid
on August 18, 2006, U.S. Cellular received approximately $28.6 million in cash. These proceeds,
representing a return of capital for financial statement purposes, were recorded as a reduction in the
accounting cost basis of marketable equity securities in 2006.
Cash Flows from Financing Activities
Cash flows from financing activities primarily reflect changes in short-term debt balances, cash used to
repurchase Common Shares and cash proceeds from re-issuance of Common Shares pursuant to stock-
based compensation plans. U.S. Cellular has used short-term debt to finance acquisitions, for general
corporate purposes and to repurchase Common Shares. Internally generated funds as well as proceeds
from forward contracts and the sale of non-strategic wireless and other investments, from time to time,
have been used to reduce short-term debt.
Cash received from short-term borrowings under U.S. Cellular’s revolving credit facility provided
$100.0 million in 2008, $25.0 million in 2007 and $415.0 million in 2006, while repayments required
$100.0 million in 2008, $60.0 million in 2007 and $515.0 million in 2006.
The re-issuance of treasury shares in connection with employee benefits plans, net of tax payments
made by U.S. Cellular on behalf of stock award holders, required $2.3 million in 2008, provided
$10.1 million in 2007 and $15.9 million in 2006. In certain situations, U.S. Cellular withholds shares that
are issuable upon the exercise of stock options or the vesting of restricted shares to cover, and with a
value equivalent to, the exercise price and/or the amount of taxes required to be withheld from the stock
award holder at the time of the exercise or vesting. U.S. Cellular then pays the amount of the required
tax withholdings to the taxing authorities in cash.
In 2008, U.S. Cellular repurchased 600,000 Common Shares at an aggregate cost of $32.9 million. U.S.
Cellular also received $4.6 million in 2008 from an investment banking firm for the final settlement of the
Accelerated Share Repurchases (‘‘ASR’’) made in the second half of 2007. In 2007, U.S. Cellular
purchased 1,006,000 Common Shares for $87.9 million from an investment banking firm in connection
with three ASR programs. As discussed above, in 2008, U.S. Cellular received $4.6 million from the
investment banking firm in final settlement of the ASR programs; thus, the net cost of Common Shares
purchased pursuant to such programs was $83.3 million. U.S. Cellular did not repurchase any shares in
2006. See Note 17—Common Shareholders’ Equity in the Notes to Consolidated Financial Statements
for details of these transactions.
LIQUIDITY AND CAPITAL RESOURCES
Recent events in the financial services sector and correlating impacts to other sectors of the economy
have resulted in concerns regarding investment security values, the availability of and concentration of
credit, insurance coverage and a variety of other areas. Although U.S. Cellular’s cash balance,
conservative strategies for investing cash on hand and funds available under its revolving credit
agreement have limited its exposure to these events to date, U.S. Cellular continues to monitor economic
conditions and developments and will make adjustments to its cash investments, borrowing
arrangements and insurance coverage as necessary and feasible.
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