US Cellular 2011 Annual Report Download - page 69

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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13 DEBT (Continued)
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).
The covenants associated with U.S. Cellular’s long-term debt obligations, among other things, restrict
U.S. Cellular’s ability, 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.
NOTE 14 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 $4.2 million, respectively, as of December 31, 2011,
and $0.1 million and $4.3 million, respectively, as of December 31, 2010. 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.
As of December 31, 2011, future minimum rental payments required under operating and capital leases
and rental receipts expected under operating leases that have noncancellable lease terms in excess of
one year were as follows:
Operating Leases Operating Leases Capital Leases
Future Minimum Future Minimum Future Minimum
Rental Payments Rental Receipts Rental Payments
(Dollars in thousands)
2012 ................................. $ 144,738 $ 37,699 $ 548
2013 ................................. 124,623 31,165 564
2014 ................................. 98,932 25,286 573
2015 ................................. 80,187 16,497 582
2016 ................................. 62,601 6,710 594
Thereafter ............................. 695,895 925 5,305
Total ................................. $1,206,976 $118,282 8,166
Less: Interest expense .................... (3,830)
Present value of minimum lease payments ...... 4,336
Less: Current portion of obligations under capital
leases .............................. (127)
Long-term portion of obligations under capital
leases .............................. $4,209
Rent expense totaled $171.6 million, $163.1 million and $155.7 million in 2011, 2010 and 2009,
respectively.
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