Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Telephone and Data Systems, Inc. Iowa as well as other Airadigm assets. As of December 31, 2001, TDS had provided funding of $52.7 million to Airadigm. Under the plan of reorganization, TDS’s portion of the funding and the cost of the assets to be acquired could possibly aggregate up to an additional $145 million. U.S. Cellular is a limited partner in a joint venture that was a successful bidder for 17 licenses in 13 markets in the January 2001 FCC spectrum auction. The cost for the 17 licenses totaled $283.9 million. Although legally the general partner controls the joint venture, the Company has included the joint venture in its consolidated financial statements because U.S. Cellular is considered to have controlling financial interest for financial reporting purposes. The joint venture has acquired 5 of such licenses in 4 markets for a total of $4.1 million and has deposits with the FCC totaling $56.1 million for the remaining licenses (classified as a current asset at December 31, 2001). Subject to the final outcome of the proceedings discussed below, the joint venture’s portion of the funding could possibly aggregate up to an additional $223.7 million to fund the acquisition of the remaining licenses. In addition, U.S. Cellular has agreed to loan the general partner up to $20 million that could be used by the general partner to fund its investment in the licenses. With respect to the remaining 12 licenses in 9 markets, such licenses had been reauctioned by the FCC after defaults by winning bidders in a prior auction and were made subject by the FCC to the final outcome of certain legal proceedings initiated by the prior winning bidders. Following the reauction, one of the prior winning bidders obtained a court ruling that the FCC’s actions were illegal. In an effort to resolve this matter, on November 15, 2001, the joint venture and other bidders in the reauction entered into a settlement agreement with the prior winning bidder and the FCC. However, the settlement agreement terminated due to the failure to satisfy a condition to obtain certain Congressional action by December 31, 2001. The U.S. Supreme Court has agreed to review this matter. In the event the prior winning bidder is successful in this litigation, the joint venture would receive a refund of its deposit of $56.1 million made to the FCC for such 12 licenses. The joint venture’s financial requirements would then be limited to the 5 licenses in 4 markets that it acquired in 2001. If the FCC is successful in this litigation or the matter is otherwise resolved in a manner that will permit the joint U.S. Cellular and TDS Telecom are billed for all services they receive from TDS, consisting primarily of information processing and general management services. Such billings are based on expenses specifically identified to U.S. Cellular and TDS Telecom and on allocations of common expenses. Management believes the method used to allocate common expenses is reasonable and that all expenses and costs appli- cable to U.S. Cellular and TDS Telecom are reflected in the accompanying business segment information on a basis which is representative of what they would have been if U.S. Cellular and TDS Telecom operated on a stand-alone basis. In September 1999, TDS approved a plan of merger between Aerial and VoiceStream. The merger was completed in May 2000. The results of operations and net assets of Aerial are reflected as discontinued operations in the consolidated financial statements. See Note 3 — Discontinued Operations. The Company conducts substantially all of its wireless telephone operations through its 82.2%-owned subsidiary, United States Cellular Corporation (“U.S. Cellular”). At December 31, 2001, U.S. Cellular provided cellular telephone service to 3,461,000 customers through 142 majority-owned and managed cellular systems in 25 states. The Company conducts its wireline telephone operations through its wholly- owned subsidiary, TDS Telecommunications Corporation (“TDS Telecom”). TDS Telecom provides service through local telephone operations, or Incumbent Local Exchange carrier (“ILEC”) companies and through Competitive Local Exchange carrier (“CLEC”) companies. At December 31, 2001, TDS Telecom operated 109 incumbent telephone companies serving 650,700 access lines in 28 states and two competitive local exchange carriers serving 197,200 access lines in four states. venture to acquire the remaining licenses, the joint venture would likely be required to pay the FCC the balance of the auction price for such licenses. The joint venture would then have significant financial requirements to build out such markets. The exact nature of U.S. Cellular’s financial commitment going forward will be determined as the joint venture develops its long-term business and financing plans. 23 Business Segment Information Telephone and Data Systems, Inc. Annual Report 2001 60 Telephone and Data Systems, Inc. Annual Report 2001 61 (1) Consists of the TDS Corporate operations, TDS Telecom intercompany eliminations, TDS Corporate and TDS Telecom marketable equity securities,  $258.8 million of Discontinued Operations in 1999 and all other businesses not included in the U.S. Cellular or TDS Telecom segments. (2) Operating cash flow is operating income plus depreciation and amortization. Financial data for the Company’s business segments for each of the years ended December 31, 2001, 2000 and 1999 are as follows. TDS Telecom Year Ended or at December 31, 2001 U.S. Cellular ILEC CLEC All Other (1) Total (Dollars in thousands) Operating revenues $1,894,830 $ 576,817 $ 118,812 $ (1,917) $ 2,588,542 Operating cash flow (2) 617,870 293,703 (25,399) — 886,174 Depreciation and amortization expense 300,658 131,787 17,574 — 450,019 Operating income (loss) 317,212 161,916 (42,973) — 436,155 Significant noncash items: Investment income 41,934 1,739 — 6,966 50,639 Gain (loss) on marketable securities  and other investments — — — (548,305) (548,305) Marketable securities 272,390 — — 2,427,840 2,700,230 Total assets 3,725,014 1,527,758 213,566 2,580,454 8,046,792 Investment in unconsolidated entities 159,454 48,320 — 25,904 233,678 Capital expenditures $ 503,334 $ 99,866 $ 96,950 $ — $ 700,150 TDS Telecom Year Ended or at December 31, 2000 U.S. Cellular ILEC CLEC All Other (1) Total (Dollars in thousands) Operating revenues $ 1,716,640 $ 528,981 $ 84,720 $ (3,485) $2,326,856 Operating cash flow (2) 558,011 267,097 (5,899) — 819,209 Depreciation and amortization expense 265,698 124,389 9,056 — 399,143 Operating income (loss)  292,313 142,708 (14,955) — 420,066 Significant noncash items: Investment income 43,727 1,731 — (6,735) 38,723 Gain (loss) on marketable securities  and other investments 96,075 — — (80,359) 15,716 Marketable securities 377,900 — — 3,744,004 4,121,904 Total assets 3,412,709 1,245,260 120,543 3,856,097 8,634,609 Investment in unconsolidated entities 137,474 24,619 — 20,232 182,325 Capital expenditures $ 305,417 $ 93,401 $ 57,201 $ — $ 456,019 TDS Telecom Year Ended or at December 31, 1999 U.S. Cellular ILEC CLEC All Other (1) Total (Dollars in thousands) Operating revenues $ 1,576,429 $ 492,530 $ 55,173 $ (1,786) $2,122,346 Operating cash flow (2) 485,814 241,536 (3,635) — 723,715 Depreciation and amortization expense 229,972 117,443 5,907 — 353,322 Operating income (loss) 255,842 124,093 (9,542) — 370,393 Significant noncash items: Investment income 30,374 1,369 — (419) 31,324 Gain (loss) on marketable securities  and other investments 266,744 — — 79,194 345,938 Marketable securities 540,711 — — 302,569 843,280 Total assets 3,331,590 1,243,068 63,661 759,157 5,397,476 Investment in unconsolidated entities 111,471 14,183 — 115,055 240,709 Capital expenditures $ 277,450 $ 99,154 $ 23,027 $ — $ 399,631