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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 4 INCOME TAXES (Continued)
A reconciliation of U.S. Cellular’s income tax expense computed at the statutory rate to the reported
income tax expense, and the statutory federal income tax expense rate to U.S. Cellular’s effective income
tax expense rate is as follows:
Year Ended December 31, 2010 2009 2008
Amount Rate Amount Rate Amount Rate
(Dollars in millions)
Statutory federal income tax expense and rate ........... $82.3 35.0% $120.6 35.0% $ 23.0 35.0%
State income taxes, net of federal benefit ............... 4.7 2.0 — — (10.7) (16.3)
Effect of noncontrolling interests ..................... (4.6) (1.9) (4.8) (1.4) (4.5) (6.8)
Effect of gains (losses) on investments, sales of assets and
impairment of assets ............................ — — — — 1.3 2.0
Other differences, net ............................. (2.8) (1.2) 0.3 0.1 (1.6) (2.5)
Effective income tax expense and rate ................. $79.6 33.9% $116.1 33.7% $ 7.5 11.4%
U.S. Cellular’s current net deferred tax asset totaled $26.8 million and $21.6 million at December 31,
2010 and 2009, respectively. The 2010 and 2009 current net deferred tax asset primarily represents the
deferred tax effects of accrued liabilities and the allowance for doubtful accounts on customer
receivables.
U.S. Cellular’s noncurrent deferred income tax assets and liabilities at December 31, 2010 and 2009 and
the temporary differences that gave rise to them were as follows:
December 31, 2010 2009
(Dollars in thousands)
Noncurrent deferred tax assets
Net operating loss (‘‘NOL’’) carryforwards ............... $ 33,724 $ 26,884
Stock-based compensation .......................... 17,204 15,526
Other ......................................... 38,998 35,584
89,926 77,994
Less valuation allowance ........................... (28,252) (17,977)
Total noncurrent deferred tax assets ................... 61,674 60,017
Noncurrent deferred tax liabilities
Licenses/intangibles ............................... 246,599 221,754
Property, plant and equipment ....................... 319,659 286,768
Partnership investments ............................ 71,566 61,272
Other ......................................... 3,619 4,217
Total noncurrent deferred tax liabilities .................. 641,443 574,011
Net noncurrent deferred income tax liability ............... $579,769 $513,994
At December 31, 2010, U.S. Cellular and certain subsidiaries had $617.9 million of state NOL
carryforwards (generating a $27.8 million deferred tax asset) available to offset future taxable income
primarily of the individual subsidiaries which generated the losses. The state NOL carryforwards expire
between 2011 and 2030. Certain subsidiaries had federal NOL carryforwards (generating a $5.9 million
deferred tax asset) available to offset future taxable income. The federal NOL carryforwards expire
between 2011 and 2030. A valuation allowance was established for certain state NOL carryforwards and
federal NOL carryforwards since it is more likely than not that a portion of such carryforwards will expire
before they can be utilized.
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