US Cellular 2011 Annual Report Download - page 18

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Key components of the net changes in Selling, general and administrative expenses were as follows:
2011—
• Selling and marketing expenses decreased by $13.7 million, or 2%, primarily due to lower advertising
costs as a result of shifting advertising efforts to more cost effective methods as well as lower
commissions expense reflecting fewer eligible transactions.
• General and administrative expenses decreased by $3.7 million, reflecting a discrete adjustment to
property tax expense and continued cost containment efforts. See footnotes to Consolidated Quarterly
Information for additional information.
2010—
• Selling and marketing expenses increased by $9.3 million, or 1%, primarily due to higher sales related
expenses and higher advertising expenses due to an increase in media purchases, partially offset by
lower commissions expense reflecting fewer eligible customer additions. In 2010, media purchases
included advertising expenses related to the launch of The Belief Project.
• General and administrative expenses increased $39 million, or 4%, due to higher costs related to
investments in multi-year initiatives for business support systems as described in the Overview section;
and higher USF contributions (most of the USF contribution expense is offset by revenues for amounts
passed through to customers). These increases were partially offset by a reduction in bad debts
expense.
U.S. Cellular expects Selling, general and administrative expenses to increase on a year-over-year basis
driven primarily by increases in expenses associated with acquiring, serving and retaining customers, as
well as costs related to its multi-year initiatives.
Depreciation, amortization and accretion
Depreciation, amortization and accretion expense was relatively flat in 2011 and 2010 compared to the
prior year.
See ‘‘Financial Resources’’ and ‘‘Liquidity and Capital Resources’’ for a discussion of U.S. Cellular’s
capital expenditures.
Loss on impairment of intangible assets
There was no Loss on impairment of intangible assets in 2011 or 2010.
U.S. Cellular recognized impairment losses on licenses of $14.0 million in 2009. The impairment losses in
2009 were recognized as a result of the annual impairment assessment of licenses and goodwill
performed during the fourth quarter of 2009. The assessment indicated that the fair value of certain U.S.
Cellular operating licenses had declined compared to the fair values of those licenses as of
December 31, 2008.
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