Cricket Wireless 2012 Annual Report Download - page 115

LEAP WIRELESS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(2) As of December 31, 2012 and December 31, 2011, approximately $45.8 million and $32.3 million of assets
were held by the Company under capital lease arrangements, respectively. Accumulated amortization
relating to these assets totaled $22.9 million and $18.5 million as of December 31, 2012 and December 31,
2011, respectively.
(3) Deferred service revenue consists primarily of cash received from customers in advance of their service
period.
(4) Deferred equipment revenue relates to devices sold to third-party dealers and nationwide retailers, which
have not yet been purchased and activated by customers.
Supplementary Cash Flow Information (in thousands):
December 31,
2012 2011 2010
Cash paid for interest .............................. $(268,186) $(229,034) $(244,123)
Cash paid for income taxes ......................... $ (4,043) $ (3,079) $ (2,810)
Supplementary disclosure of non-cash investing activities:
Contribution of wireless licenses ..................... $ — $ — $ 2,381
Consideration provided for the acquisition of Pocket’s
business ...................................... $ — $ — $ (99,894)
Net wireless licenses received in exchange transaction .... $(106,877) $ (20,649) $ —
Assets acquired through capital leases ................. $ (13,829) $ (1,749) $ —
Supplementary disclosure of non-cash financing activities:
Note issued as consideration for purchase of remaining
interest in Denali Spectrum, LLC .................. $ — $ — $ 45,500
Note 5. Wireless Licenses and Goodwill
Wireless Licenses
As of December 31, 2012 and 2011, the carrying values of the Company’s wireless licenses (excluding
assets held for sale) were $1.9 billion and $1.8 billion , respectively. Wireless licenses to be disposed of by sale
are carried at the lower of their carrying value or fair value less costs to sell. As of December 31, 2012 and 2011,
wireless licenses with carrying values of $136.2 million and $204.3 million, respectively, were classified as
assets held for sale. These related transactions are more fully described in “Note 6. Significant Acquisitions and
Other Transactions”.
For purposes of testing impairment, the Company’s wireless licenses in its operating markets are combined
into a single unit of account because management believes that utilizing these wireless licenses as a group
represents the highest and best use of the assets, and the value of the wireless licenses would not be significantly
impacted by a sale of one or a portion of the wireless licenses, among other factors. The Company’s non-
operating licenses are tested for impairment on an individual basis because these licenses are not functioning as
part of a group with licenses in the Company’s operating markets. As of December 31, 2012, the carrying values
of the Company’s operating and non-operating wireless licenses were $1,904.7 million and $42.6 million,
respectively.
An impairment loss would be recognized on the Company’s operating wireless licenses when the aggregate
fair value of the wireless licenses is less than their aggregate carrying value and is measured as the amount by
which the licenses’ aggregate carrying value exceeds their aggregate fair value. An impairment loss would be
recognized on the Company’s non-operating wireless licenses when the fair value of a wireless license is less
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