US Cellular 2010 Annual Report Download - page 19

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Components of Other Income (Expense)
Increase/ Percentage Increase/ Percentage
Year Ended December 31, 2010 (Decrease) Change 2009 (Decrease) Change 2008
(Dollars in thousands)
Operating income .........$195,374 $(125,572) (39)% $320,946 $ 292,336 >100% $ 28,610
Equity in earnings of
unconsolidated entities .... 97,318 518 1% 96,800 4,819 5% 91,981
Interest and dividend income . 3,808 211 6% 3,597 (2,133) (37)% 5,730
Gain on disposition of
investments ............ — — N/M — (16,628) N/M 16,628
Interest expense .......... (61,555) 16,644 21% (78,199) 336 — (78,535)
Other, net ............... 72 (1,370) (95)% 1,442 173 14% 1,269
Total investment and other
income ............... 39,643 16,003 68% 23,640 (13,433) (36)% 37,073
Income before income taxes . 235,017 (109,569) (32)% 344,586 278,903 >100% 65,683
Income tax expense ........ 79,609 36,477 31% 116,086 (108,626) >100% 7,460
Net income .............. 155,408 (73,092) (32)% 228,500 170,277 >100% 58,223
Less: Net income attributable
to noncontrolling interests,
net of tax .............. (23,084) (1,316) (6)% (21,768) 3,315 13% (25,083)
Net income attributable to
U.S. Cellular shareholders . . $132,324 $ (74,408) (36)% $206,732 $ 173,592 >100% $ 33,140
N/M—Percentage change not meaningful
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities represents U.S. Cellular’s share of net income from entities
accounted for by the equity method of accounting. U.S. Cellular generally follows the equity method of
accounting for unconsolidated entities in which its ownership interest is less than or equal to 50% but
equals or exceeds 20% for corporations and 3% for partnerships and limited liability companies.
U.S. Cellular’s investment in the Los Angeles SMSA Limited Partnership (‘‘LA Partnership’’) contributed
$64.8 million, $64.7 million and $66.1 million to Equity in earnings of unconsolidated entities in 2010,
2009 and 2008, respectively. U.S. Cellular received cash distributions from the LA Partnership of
$66.0 million in each of 2010, 2009 and 2008.
Gain on disposition of investments
Gain on disposition of investments in 2008 related to the exchange of Rural Cellular Corporation (‘‘RCC’’)
shares for cash in conjunction with Verizon’s acquisition of RCC.
Interest expense
Interest expense decreased in 2010 compared to 2009 primarily due to the redemption of U.S. Cellular’s
$130.0 million, 8.75% senior notes in December 2009.
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