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United States Cellular Corporation
Notes to the Consolidated Financial Statements (Continued)
NOTE 13 COMMITMENTS AND CONTINGENCIES
Agreements
As previously disclosed, on August 17, 2010, U.S. Cellular and Amdocs Software Systems Limited
(‘‘Amdocs’’) entered into a Software License and Maintenance Agreement (‘‘SLMA’’) and a Master
Service Agreement (‘‘MSA’’) (collectively, the ‘‘Amdocs Agreements’’) to develop a Billing and
Operational Support System (‘‘B/OSS’’). Pursuant to an updated Statement of Work dated June 29,
2012, the implementation of B/OSS is expected to take until the end of 2013 to complete and total
payments to Amdocs are estimated to be approximately $162.2 million (subject to certain potential
adjustments) over the period from commencement of the SLMA in 2010 through the second half of 2013.
As of December 31, 2012, $83.9 million had been paid to Amdocs.
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.
As of December 31, 2012, future minimum rental payments required under operating 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
Future Minimum Future Minimum
Rental Payments Rental Receipts
(Dollars in thousands)
2013 ................................................ $ 151,630 $ 41,184
2014 ................................................ 127,081 35,613
2015 ................................................ 108,779 26,088
2016 ................................................ 90,919 15,358
2017 ................................................ 73,969 6,505
Thereafter ............................................ 809,344 398
Total ................................................ $1,361,722 $125,146
Rent expense totaled $183.9 million, $171.6 million and $163.1 million in 2012, 2011 and 2010,
respectively.
Rent revenue totaled $41.7 million, $39.2 million and $35.4 million in 2012, 2011 and 2010, 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.
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