US Cellular 2009 Annual Report Download - page 70

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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 11 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment in service and under construction, and related accumulated depreciation,
as of December 31, 2009 and 2008 were as follows:
Useful Lives
December 31, (Years) 2009 2008
(Dollars in thousands)
Land ........................................... N/A $ 26,017 $ 26,045
Buildings ........................................ 20 300,285 275,307
Leasehold and land improvements ..................... 1-30 976,828 905,936
Cell site equipment ................................ 6-25 2,394,222 2,567,271
Switching equipment ............................... 1-8 862,826 877,664
Office furniture and equipment ........................ 3-5 549,871 527,592
Other operating equipment ........................... 5-25 341,988 302,640
System development ............................... 3-7 258,073 259,860
Work in process ................................... N/A 174,197 142,068
5,884,307 5,884,383
Accumulated depreciation ............................ (3,282,969) (3,264,007)
$ 2,601,338 $ 2,620,376
Depreciation and amortization expense totaled $554.9 million, $560.3 million and $559.0 million in 2009,
2008 and 2007, respectively.
In 2009, 2008 and 2007, Loss on asset disposals, net included charges of $15.2 million, $23.4 million
and $19.4 million, respectively, related to disposals of assets, trade-ins of older assets for replacement
assets and other retirements of assets from service. In 2007, U.S. Cellular conducted a physical inventory
of its significant cell site and switching assets. As a result, Loss on asset disposals, net also included a
charge of $14.6 million in 2007 reflecting the results of the physical inventory and related valuation and
reconciliation.
NOTE 12 ASSET RETIREMENT OBLIGATIONS
U.S. Cellular is subject to asset retirement obligations associated with its leased cell sites, switching
office sites, retail store sites and office locations. Asset retirement obligations generally include
obligations to restore leased land and retail store and office premises to their pre-lease conditions. These
obligations are included in Other deferred liabilities and credits in the Consolidated Balance Sheet.
During 2009 and 2008, U.S. Cellular performed a review of the assumptions and estimated costs related
to its asset retirement obligations. The results of the reviews (identified as ‘‘Revisions in estimated cash
outflows’’) and other changes in asset retirement obligations during 2009 and 2008 were as follows:
2009 2008
(Dollars in thousands)
Balance, beginning of period .......................... $148,982 $126,844
Additional liabilities accrued ......................... 3,935 5,310
Revisions in estimated cash outflows .................. (47) 8,321
Acquisition of assets .............................. — 419
Disposition of assets .............................. (1,128) (1,224)
Accretion expense ................................ 10,923 9,312
Balance, end of period .............................. $162,665 $148,982
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