US Cellular 2008 Annual Report Download - page 196

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 19 SUPPLEMENTAL CASH FLOWS (Continued)
U.S. Cellular withheld 368,231, 716,446 and 54,537 Common Shares with an aggregate value of
$20.1 million, $60.0 million and $3.2 million in 2008, 2007, 2006, respectively, from employees who
exercised stock options or who received a distribution of vested restricted stock awards. Such shares
were withheld to cover the exercise price of stock options, if applicable, and required tax withholdings.
U.S. Cellular disbursed a net of $2.3 million in cash from the exercise of stock options and vesting of
other stock awards during 2008. Of that amount, $5.9 million was disbursed for payments of taxes which
was offset by cash proceeds received upon the exercise of stock options of $3.6 million.
NOTE 20 RELATED PARTIES
U.S. Cellular is billed for all services it receives from TDS, pursuant to the terms of various agreements
between it and TDS. The majority of these billings are included in U.S. Cellular’s Selling, general and
administrative expenses. Some of these agreements were established at a time prior to U.S. Cellular’s
initial public offering when TDS owned more than 90% of U.S. Cellular’s outstanding capital stock and
may not reflect terms that would be obtainable from an unrelated third party through arms-length
negotiations. Billings from TDS to U.S. Cellular are based on expenses specifically identified to U.S.
Cellular and on allocations of common expenses. Such allocations are based on the relationship of U.S.
Cellular’s assets, employees, investment in property, plant and equipment and expenses relative to all
subsidiaries in the TDS consolidated group. Management believes the method TDS uses to allocate
common expenses is reasonable and that all expenses and costs applicable to U.S. Cellular are reflected
in its financial statements. Billings to U.S. Cellular from TDS totaled $113.3 million, $121.8 million and
$108.9 million in 2008, 2007 and 2006, respectively.
NOTE 21 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following persons are partners of Sidley Austin LLP, the principal law firm of U.S. Cellular and its
subsidiaries: Walter C.D. Carlson, a director of U.S. Cellular, a director and non-executive Chairman of
the Board of Directors of TDS and a trustee and beneficiary of a voting trust that controls TDS; William S.
DeCarlo, the General Counsel of TDS and an Assistant Secretary of TDS and certain subsidiaries of TDS;
and Stephen P. Fitzell, the General Counsel of U.S. Cellular and TDS Telecommunications Corporation
and an Assistant Secretary of U.S. Cellular and certain other subsidiaries of TDS. Walter C.D. Carlson
does not provide legal services to TDS, U.S. Cellular or their subsidiaries. U.S. Cellular and its
subsidiaries incurred legal costs from Sidley Austin LLP of $6.9 million in 2008, $6.6 million in 2007 and
$6.9 million in 2006.
The Audit Committee of the Board of Directors is responsible for the review and oversight of all related
party transactions, as such term is defined by the rules of the New York Stock Exchange.
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