US Cellular 2011 Annual Report Download - page 70

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 14 COMMITMENTS AND CONTINGENCIES (Continued)
Rent revenue totaled $39.2 million, $35.4 million and $31.8 million in 2011, 2010 and 2009, respectively.
Indemnifications
U.S. Cellular enters into agreements in the normal course of business that provide for indemnification of
counterparties. The terms of the indemnifications vary by agreement. The events or circumstances that
would require U.S. Cellular to perform under these indemnities are transaction specific; however, these
agreements may require U.S. Cellular to indemnify the counterparty for costs and losses incurred from
litigation or claims arising from the underlying transaction. U.S. Cellular is unable to estimate the
maximum potential liability for these types of indemnifications as the amounts are dependent on the
outcome of future events, the nature and likelihood of which cannot be determined at this time.
Historically, U.S. Cellular has not made any significant indemnification payments under such agreements.
Legal Proceedings
U.S. Cellular is involved or may be involved from time to time in legal proceedings before the FCC, other
regulatory authorities, and/or various state and federal courts. If U.S. Cellular believes that a loss arising
from such legal proceedings is probable and can be reasonably estimated, an amount is accrued in the
financial statements for the estimated loss. If only a range of loss can be determined, the best estimate
within that range is accrued; if none of the estimates within that range is better than another, the low end
of the range is accrued. The assessment of the expected outcomes of legal proceedings is a highly
subjective process that requires judgments about future events. The legal proceedings are reviewed at
least quarterly to determine the adequacy of accruals and related financial statement disclosures. The
ultimate outcomes of legal proceedings could differ materially from amounts accrued in the financial
statements.
U.S. Cellular has accrued $1.7 million and $1.5 million with respect to legal proceedings and unasserted
claims as of December 31, 2011 and 2010, respectively. U.S. Cellular has not accrued any amount for
legal proceedings if it cannot estimate the amount of the possible loss or range of loss. U.S. Cellular
does not believe that the amount of any contingent loss in excess of the amounts accrued would be
material.
NOTE 15 COMMON SHAREHOLDERS’ EQUITY
Tax-Deferred Savings Plan
U.S. Cellular has reserved 67,215 Common Shares for issuance under the TDS Tax-Deferred Savings
Plan, a qualified profit-sharing plan pursuant to Sections 401(a) and 401(k) of the Internal Revenue Code.
Participating employees have the option of investing their contributions in a U.S. Cellular Common Share
fund, a TDS Common Share fund, a TDS Special Common Share fund, or certain unaffiliated funds.
Series A Common Shares
Series A Common Shares are convertible on a share-for-share basis into Common Shares. In matters
other than the election of directors, each Series A Common Share is entitled to ten votes per share,
compared to one vote for each Common Share. The Series A Common Shares are entitled to elect 75%
of the directors (rounded down), and the Common Shares elect 25% of the directors (rounded up). As of
December 31, 2011, a majority of U.S. Cellular’s Common Shares and all of U.S. Cellular’s outstanding
Series A Common Shares were held by TDS.
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