US Cellular 2008 Annual Report Download - page 141

Acquisitions, Exchanges and Divestitures
U.S. Cellular assesses its existing wireless interests on an ongoing basis with a goal of improving the
competitiveness of its operations and maximizing its long-term return on investment. As part of this
strategy, U.S. Cellular reviews attractive opportunities to acquire additional wireless operating markets
and wireless spectrum. In addition, U.S. Cellular may seek to divest outright or include in exchanges for
other wireless interests those wireless interests that are not strategic to its long-term success.
U.S. Cellular from time to time may be engaged in negotiations relating to the acquisition, divestiture or
exchange of companies, strategic properties or wireless spectrum. In general, U.S. Cellular may not
disclose such transactions until there is a definitive agreement.
See Note 6—Acquisitions, Divestitures and Exchanges in the Notes to Consolidated Financial Statements
for details on transactions in 2008, 2007 and 2006.
Variable Interest Entities
U.S. Cellular consolidates certain variable interest entities pursuant to FASB Interpretation No. 46 (revised
December 2003), Consolidation of Variable Interest Entities. See Note 4—Variable Interest Entities in the
Notes to Consolidated Financial Statements for the details of these variable interest entities. U.S. Cellular
may elect to make additional capital contributions and/or advances to these variable interest entities in
future periods in order to fund their operations.
Common Share Repurchase Program
U.S. Cellular has repurchased and expects to continue to repurchase its Common Shares subject to the
repurchase program. For details of this program and repurchases made during 2008 and 2007, see
Note 17—Common Shareholders’ Equity in the Notes to Consolidated Financial Statements.
Contractual and Other Obligations
At December 31, 2008, the resources required for contractual obligations were as follows:
Payments due by Period
More
Less than 2 - 3 4 - 5 than 5
(Dollars in millions) Total 1 Year Years Years Years
Long-term debt obligations(1) .............. $1,014.0 $ 10.0 $ — $ — $1,004.0
Interest payments on long-term debt obligations . 1,814.0 73.2 145.1 145.2 1,450.5
Operating leases(2) ..................... 988.3 128.6 210.0 130.3 519.4
Capital leases .......................... 8.6 0.6 1.0 1.0 6.0
Purchase obligations(3) ................... 637.4 369.6 164.0 59.7 44.1
$4,462.3 $582.0 $520.1 $336.2 $3,024.0
(1) Includes current and long-term portions of debt obligations. The total long-term debt obligation
differs from Long-term debt on the Consolidated Balance Sheet due to the $11.3 million unamortized
discount related to U.S. Cellular’s 6.7% senior notes. See Note 14—Long-Term Debt in the Notes to
Consolidated Financial Statements.
(2) Includes future lease costs related to office space, retail sites, cell sites and equipment.
(3) Includes obligations payable under non-cancellable contracts, commitments for network facilities and
transport services, agreements for software licensing and long-term marketing programs.
The table above does not include any liabilities related to unrecognized tax benefits under FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes (‘‘FIN 48’’) since U.S. Cellular is unable
to reasonably predict the ultimate amount or timing of settlement of such FIN 48 liabilities. Such
unrecognized tax benefits were $27.8 million at December 31, 2008. See Note 3—Income Taxes in the
Notes to Consolidated Financial Statements for additional information on unrecognized tax benefits.
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