US Cellular 2012 Annual Report Download - page 72

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United States Cellular Corporation
Notes to the Consolidated Financial Statements (Continued)
NOTE 12 DEBT (Continued)
2012, U.S. Cellular had no outstanding consolidated funded indebtedness or refinancing indebtedness
that was subordinated to the revolving credit agreement pursuant to the subordination agreement.
At December 31, 2012, U.S. Cellular had recorded $3.4 million of issuance costs related to the revolving
credit facility which is included in Other assets and deferred charges in the Consolidated Balance Sheet.
Long-Term Debt
Long-term debt as of December 31, 2012 and 2011 was as follows:
December 31, Issuance date Maturity date Call date 2012 2011
(Dollars in thousands)
Unsecured Senior Notes
December 2003 December 2033 December 2003
6.7% ................... and June 2004 $544,000 $544,000
Less: 6.7% Unamortized
discount ............... (11,806) (9,889)
532,194 534,111
6.95% .................. May 2011 May 2060 May 2016 342,000 342,000
Obligation on capital leases ..... 4,756 4,336
Total long-term debt ........... 878,950 880,447
Long-term debt, current ....... 92 127
Long-term debt, noncurrent .... $878,858 $880,320
U.S. Cellular may redeem the 6.7% Senior Notes, in whole or in part, at any time prior to maturity at a
redemption price equal to the greater of (a) 100% of the principal amount of such notes, plus accrued
and unpaid interest, or (b) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the redemption date on a semi-annual basis at the Treasury
Rate plus 30 basis points. U.S. Cellular may redeem the 6.95% Senior Notes, in whole or in part at any
time after the call date, at a redemption price equal to 100% of the principal amount redeemed plus
accrued and unpaid interest.
Interest on the 6.7% Senior Notes is payable semi-annually, and on the 6.95% Senior Notes is payable
quarterly.
Capitalized debt issuance costs for Unsecured Senior Notes totaled $16.3 million and are included in
Other assets and deferred charges (a long-term asset account). These costs are amortized over the life
of the notes using the effective interest method.
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.
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