US Cellular 2010 Annual Report Download - page 76

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 16 SUPPLEMENTAL CASH FLOWS
Following are supplemental cash flow disclosures regarding interest paid and income taxes paid.
Year Ended December 31, 2010 2009 2008
(Dollars in thousands)
Interest paid ............................................ $59,049 $77,877 $ 76,763
Income taxes paid ........................................ $53,050 $36,863 $116,525
Following are supplemental cash flow disclosures regarding transactions related to stock-based
compensation awards:
Year Ended December 31, 2010 2009 2008
(Dollars in thousands)
Common Shares withheld(1) ................................. 310,388 200,025 368,231
Aggregate value of Common Shares withheld ..................... $13,527 $ 7,622 $20,055
Cash receipts upon exercise of stock options ..................... 3,574 1,572 3,588
Cash disbursements for payment of taxes(2) ..................... (3,065) (1,654) (5,876)
Net cash receipts (disbursements) from exercise of stock options and
vesting of other stock awards ............................... $ 509 $ (82) $ (2,288)
(1) Such shares were withheld to cover the exercise price of stock options, if applicable, and required
tax withholdings.
(2) In certain situations, U.S. Cellular withholds shares that are issuable upon the exercise of stock
options or the vesting of restricted shares to cover, and with a value equivalent to, the exercise price
and/or the amount of taxes required to be withheld from the stock award holder at the time of the
exercise or vesting. U.S. Cellular then pays the amount of the required tax withholdings to the taxing
authorities in cash.
NOTE 17 RELATED PARTIES
U.S. Cellular is billed for all services it receives from TDS, pursuant to the terms of various agreements
between it and TDS. These billings are included in U.S. Cellular’s Selling, general and administrative
expenses. Some of these agreements were established at a time prior to U.S. Cellular’s initial public
offering when TDS owned more than 90% of U.S. Cellular’s outstanding capital stock and may not reflect
terms that would be obtainable from an unrelated third party through arms-length negotiations. Billings
from TDS to U.S. Cellular are based on expenses specifically identified to U.S. Cellular and on
allocations of common expenses. Such allocations are based on the relationship of U.S. Cellular’s
assets, employees, investment in property, plant and equipment and expenses relative to all subsidiaries
in the TDS consolidated group. Management believes the method TDS uses to allocate common
expenses is reasonable and that all expenses and costs applicable to U.S. Cellular are reflected in its
financial statements. Billings to U.S. Cellular from TDS totaled $107.5 million, $114.8 million and
$113.3 million in 2010, 2009 and 2008, respectively.
NOTE 18 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following persons are partners of Sidley Austin LLP, the principal law firm of U.S. Cellular and its
subsidiaries: Walter C.D. Carlson, a director of U.S. Cellular, a director and non-executive Chairman of
the Board of Directors of TDS and a trustee and beneficiary of a voting trust that controls TDS; William S.
DeCarlo, the General Counsel of TDS and an Assistant Secretary of TDS and certain subsidiaries of TDS;
and Stephen P. Fitzell, the General Counsel of U.S. Cellular and TDS Telecommunications Corporation
and an Assistant Secretary of U.S. Cellular and certain other subsidiaries of TDS. Walter C.D. Carlson
68