US Cellular 2008 Annual Report Download - page 187

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 16 COMMITMENTS AND CONTINGENCIES (Continued)
in determining the lease term. Any rent abatements or lease incentives, in addition to fixed rental
increases, are included in the calculation of rent expense and calculated on a straight-line basis over the
defined lease term.
U.S. Cellular accounts for certain lease agreements as capital leases. The short- and long-term portions
of capital lease obligations totaled $0.3 million and $3.9 million, respectively, as of December 31, 2008,
and $0.5 million and $1.3 million, respectively, as of December 31, 2007. The short- and long-term
portions of capital lease obligations are included in Current portion of long-term debt and Long-term
debt in the Consolidated Balance Sheet.
As of December 31, 2008, future minimum rental payments required under operating and capital leases
and rental receipts expected under operating leases that have noncancellable lease terms in excess of
one year were as follows:
Operating Leases— Operating Leases— Capital Leases—
Future Minimum Future Minimum Future Minimum
(Dollars in thousands) Rental Payments Rental Receipts Rental Payments
2009 ................................. $128,565 $27,486 $ 628
2010 ................................. 113,364 22,857 470
2011 ................................. 96,624 17,307 486
2012 ................................. 74,010 11,616 501
2013 ................................. 56,382 4,583 513
Thereafter ............................. 519,364 1,287 6,013
Total ................................. $988,309 $85,136 8,611
Less: Amount representing interest expense .... (4,465)
Present value of minimum lease payments ...... 4,146
Less current portion of obligations under capital
leases .............................. (258)
Long-term portion of obligations under capital
leases .............................. 3,888
Rent expense totaled $139.6 million, $130.2 million and $116.1 million in 2008, 2007 and 2006,
respectively. Rent revenue totaled $26.8 million, $23.8 million and $24.1 million in 2008, 2007 and 2006,
respectively.
Indemnifications
U.S. Cellular enters into agreements in the normal course of business that provide for indemnification of
counterparties. These agreements include certain asset sales and financing with other parties. The terms
of the indemnification vary by agreement. The events or circumstances that would require U.S. Cellular to
perform under these indemnities are transaction specific; however, these agreements may require U.S.
Cellular to indemnify the counterparty for costs and losses incurred from any litigation or claims arising
from the underlying transaction. U.S. Cellular is unable to estimate the maximum potential liability for
these types of indemnifications as the amounts are dependent on the outcome of future events, the
nature and likelihood of which cannot be determined at this time. Historically, U.S. Cellular has not made
any significant indemnification payments under such agreements.
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