US Cellular 2009 Annual Report Download - page 73

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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13 DEBT (Continued)
The 8.75% senior notes were due November 1, 2032. Interest was paid quarterly. U.S. Cellular redeemed
the notes in whole at the redemption price equal to 100% of the principal amount plus accrued and
unpaid interest on December 24, 2009, which resulted in a total redemption payment of $131.7 million.
General
The covenants of the long-term debt obligations place certain restrictions on U.S. Cellular, including
restrictions on the ability of its subsidiaries, subject to certain exclusions, to incur additional liens, enter
into sale and leaseback transactions, and sell, consolidate or merge assets.
U.S. Cellular’s long-term debt indentures do not contain any provisions resulting in acceleration of the
maturities of outstanding debt in the event of a change in U.S. Cellular’s credit rating. However, a
downgrade in U.S. Cellular’s credit rating could adversely affect its ability to obtain long-term debt
financing in the future.
U.S. Cellular does not have any annual requirements for principal payments on long-term debt over the
next five years (excluding capital lease obligations).
NOTE 14 COMMITMENTS AND CONTINGENCIES
Lease Commitments
U.S. Cellular is a party to various lease agreements, both as lessee and lessor, for office space, retail
store sites, cell sites and equipment which are accounted for as operating leases. Certain leases have
renewal options and/or fixed rental increases. Renewal options that are reasonably assured of exercise
are included 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 $0.1 million and $4.3 million, respectively, as of December 31, 2009,
and $0.2 million and $3.9 million, respectively, as of December 31, 2008. 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, 2009, 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
Rental Payments Rental Receipts Rental Payments
(Dollars in thousands)
2010 ................................. $ 135,038 $29,988 $ 508
2011 ................................. 118,987 24,694 526
2012 ................................. 94,647 19,151 540
2013 ................................. 75,710 12,278 554
2014 ................................. 53,801 6,105 563
Thereafter ............................. 558,100 959 6,252
Total ................................. $1,036,283 $93,175 8,943
Less: Interest expense .................... (4,547)
Present value of minimum lease payments .................................. 4,396
Less: Current portion of obligations under capital leases ........................ (76)
Long-term portion of obligations under capital leases .......................... $4,320
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