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United States Cellular Corporation
Notes to Consolidated Financial Statements (Continued)
NOTE 6 ACQUISITIONS, DIVESTITURES AND EXCHANGES (Continued)
after the May 16, 2013 closing date. Sprint reimbursed U.S. Cellular for providing such services at an
amount equal to U.S. Cellular’s estimated costs, including applicable overhead allocations. These
services were substantially complete as of March 31, 2014. In addition, these agreements require Sprint
to reimburse U.S. Cellular up to $200 million (the ‘‘Sprint Cost Reimbursement’’) for certain network
decommissioning costs, network site lease rent and termination costs, network access termination costs,
and employee termination benefits for specified engineering employees. It is estimated that up to
$175 million of the Sprint Cost Reimbursement will be recorded in (Gain) loss on sale of business and
other exit costs, net and up to $25 million of the Sprint Cost Reimbursement will be recorded in System
operations in the Consolidated Statement of Operations. In 2014 and 2013, $71.1 million and
$10.6 million, respectively, of the Sprint Cost Reimbursement had been received and recorded in Cash
received from divestitures in the Consolidated Statement of Cash Flows.
Financial impacts of the Divestiture Transaction are classified in the Consolidated Statement of
Operations within Operating income. The table below describes the amounts U.S. Cellular has
recognized and expects to recognize in the Consolidated Statement of Operations between the date the
Purchase and Sale Agreement was signed and the end of the transition services period.
Actual Actual Actual
Cumulative Amount Amount Amount
Amount Recognized Recognized Recognized
Expected Recognized as Year Ended Year Ended Year Ended
Period of of December 31, December 31, December 31, December 31,
Recognition Projected Range 2014 2014 2013 2012
(Dollars in thousands)
(Gain) loss on sale of business and other exit costs, net
Proceeds from Sprint
Purchase price . . . .................. 2013 $(480,000) $(480,000) $(480,000) $ — $(480,000) $ —
Sprint Cost Reimbursement . . . . . . . . . ...... 2013-2015 (120,000) (175,000) (111,970) (64,329) (47,641) —
Net assets transferred . . . . . . . . . . . . ....... 2013 213,593 213,593 213,593 — 213,593 —
Non-cash charges for the write-off and write-down of
property under construction and related assets . . . . 2012-2015 20,000 22,000 20,410 9,735 3 10,672
Employee related costs including severance, retention
and outplacement . . . . . . . . . . . . . . . . . . . . 2012-2015 13,000 16,000 14,147 (115) 1,653 12,609
Contract termination costs . . . . . . .......... 2012-2015 70,000 100,000 84,320 24,736 59,525 59
Transaction costs . . . .................. 2012-2015 5,000 7,000 6,284 719 4,428 1,137
Total (Gain) loss on sale of business and other exit
costs, net . . . . . . . . . . . ............ $(278,407) $(296,407) $(253,216) $(29,254) $(248,439) $24,477
Depreciation, amortization and accretion expense
Incremental depreciation, amortization and accretion, net
of salvage values . . . . . . . . . . . . . . . . . . . . 2012-2014 215,049 215,049 215,049 16,478 178,513 20,058
(Increase) decrease in Operating income ........ $(63,358) $ (81,358) $ (38,167) $(12,776) $ (69,926) $44,535
Incremental depreciation, amortization and accretion, net of salvage values represents amounts recorded
in the specified time periods as a result of a change in estimate for the remaining useful life and salvage
value of certain assets and a change in estimate which accelerated the settlement dates of certain asset
retirement obligations in conjunction with the Divestiture Transaction. Specifically, for the periods
indicated, this is estimated depreciation, amortization and accretion recorded on assets and liabilities of
the Divestiture Markets after the execution of the Purchase and Sale Agreement on November 6, 2012
less depreciation, amortization and accretion that would have been recorded on such assets and
liabilities in the normal course, absent the Divestiture Transaction.
In 2014, U.S. Cellular recorded $3.4 million of additional Depreciation, amortization and accretion
expense for the Divestiture Markets due to higher asset retirement obligation remediation estimates.
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