US Cellular 2010 Annual Report Download - page 69

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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 12 DEBT (Continued)
The 7.5% senior notes are due June 15, 2034. Interest on the notes is payable quarterly. U.S. Cellular
may redeem the notes, in whole or in part, at any time on or after June 17, 2009, at a redemption price
equal to 100% of the principal amount redeemed plus accrued and unpaid interest.
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 indenture does 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 13 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, 2010,
and $0.1 million and $4.3 million, respectively, as of December 31, 2009. 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.
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