Notes to Consolidated Financial Statements Indemnifications Legal Proceedings Lease Commitments NOTE 20 SUBSEQUENT EVENTS Guarantees 62 In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others – an Interpretation of  FASB Statements No. 5, 57 and 107 and Rescission of FASB Interpretation No. 34.” This interpretation expands on the existing accounting guidance and disclosure requirements for most guarantees, including certain indem- nifications. It requires that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obliga- tions it assumes under that guarantee if that amount is reasonably estimable, and must disclose that information in its interim and annual financial statements. The provisions for initial recognition and measure- ment of the liability are to be applied on a prospective basis to guarantees issued or modified on or after January 1, 2003. The initial adoption of this statement on January 1, 2003, did not have a material impact on results of operations, financial position or cash flows. Guarantees issued or modified after January 1, 2003, are recognized  at their fair value in the financial statements. Rent expense totaled $52.2 million, $57.2 million and $35.4 million in 2003, 2002 and 2001, respectively. U.S. Cellular completed the sale of its southern Texas wireless markets  to AT&T Wireless and received $97.6 million including a preliminary working capital adjustment on February 18, 2004. On February 9, 2004, U.S. Cellular paid in full, the $105 million  8.1% intercompany note due in 2008 to Telephone and Data Systems, Inc. The payment was funded using U.S. Cellular’s $700 million  revolving credit facility. U.S. Cellular and certain of its majority-owned partnerships and  subsidiaries lease certain office and cell site locations under operating leases. Future minimum rental payments required under operating leases that have noncancelable lease terms in excess of one year as  of December 31, 2003 are as follows: U.S. Cellular is involved in legal proceedings before the Federal Communications Commission and various state and federal courts  from time to time. Management does not believe that any of such proceedings will have a materially adverse impact on the financial  position, results of operations or cash flows of U.S. Cellular. U.S. Cellular enters into agreements in the normal course of business that provide for indemnification of counterparties. These include certain asset sales and financings with other parties. The terms of the indemni- fication 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 indem- nify 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 indemnifica- tions 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. The cost estimates for the CDMA migration project have been revised from the original estimate of $400 million to $450 million to reflect divestitures of markets, more favorable pricing than expected and additional efficiencies in the conversion process. U.S. Cellular has con- tracted with multiple infrastructure vendors to provide a substantial portion of the equipment related to the conversion. U.S. Cellular expects capital expenditures related to the buildout of  the licensed areas it acquired in 2001 through 2003, including those in the AT&T Wireless exchange transaction, to be substantial. U.S. Cellular plans to build networks to serve these licensed areas and launch com- mercial service in these areas over the next several years. Approximately $100 million of the estimated capital spending for 2004 is allocated  to the buildout of certain of these licenses, and U.S. Cellular expects a significant portion of its capital spending over the next few years to  be related to the buildout of its wireless licensed areas. Minimum Future Rentals (Dollars in thousands) 2004 $62,227 2005 54,735 2006 45,939 2007 34,346 2008 22,354 Thereafter $65,856