US Cellular 2008 Annual Report Download - page 160

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
United States Cellular Corporation (‘‘U.S. Cellular’’), a Delaware Corporation, is an 81%-owned
subsidiary of Telephone and Data Systems, Inc. (‘‘TDS’’).
Nature of Operations
U.S. Cellular owns, operates and invests in wireless systems throughout the United States. As of
December 31, 2008, U.S. Cellular owned, or had the right to acquire pursuant to certain agreements,
interests in 278 wireless markets and served 6.2 million customers in 26 states, representing a total
population in its operating markets of approximately 46 million. U.S. Cellular operates as one reportable
segment.
Principles of Consolidation
The accounting policies of U.S. Cellular conform to accounting principles generally accepted in the
United States of America (‘‘GAAP’’). The consolidated financial statements include the accounts of U.S.
Cellular, its majority-owned subsidiaries, general partnerships in which U.S. Cellular has a majority
partnership interest and any entity in which U.S. Cellular has a variable interest that requires U.S. Cellular
to recognize a majority of the entity’s expected gains or losses. All material intercompany accounts and
transactions have been eliminated.
Reclassifications
Certain prior year amounts have been reclassified to conform to the 2008 financial statement
presentation. These reclassifications did not affect consolidated net income, assets, liabilities, cash flows
or shareholders’ equity for the years presented.
Business Combinations
U.S. Cellular uses the purchase method of accounting for business combinations and, therefore, costs of
acquisitions include the value of the consideration given and all related direct and incremental costs
relating to acquisitions. All costs relating to unsuccessful negotiations for acquisitions are charged to
expense when the acquisition is no longer considered probable.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect (a) the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and (b) the reported
amounts of revenues and expenses during the reported period. Actual results could differ from those
estimates. Significant estimates are involved in accounting for revenue, contingencies and commitments,
goodwill and indefinite-lived intangible assets, asset retirement obligations, derivatives, depreciation,
amortization and accretion, allowance for doubtful accounts, stock-based compensation and income
taxes.
Cash and Cash Equivalents
Cash and cash equivalents include cash and short-term, highly liquid investments with original maturities
of three months or less.
Outstanding checks totaled $20.3 million and $10.0 million at December 31, 2008 and 2007, respectively,
and are classified as Accounts payable-Trade in the Consolidated Balance Sheet.
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