Cricket Wireless 2012 Annual Report Download - page 122

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LEAP WIRELESS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
right to sell its membership interest to the Company. As described in Note 6, in October 2012, Cricket acquired
the remaining 15% controlling membership interest in Savary Island that it did not previously own, and
accordingly, Savary Island and its wholly owned subsidiaries became direct and indirect wholly owned
subsidiaries of Cricket. Savary Island and its subsidiaries were merged with and into Cricket, with Cricket as the
surviving entity, on December 28, 2012. As such, as of December 31, 2012, the Company did not consolidate any
variable interest entities.
The aggregate carrying amount and classification of the assets and liabilities of Savary Island, excluding
intercompany accounts and transactions, as of December 31, 2011 are presented in the table below (in
thousands):
December 31, 2011
Assets
Cash and cash equivalents ............................................ $ 7,084
Wireless licenses ................................................... 41,947
Assets held for sale (1) .............................................. 85,190
Total assets ......................................................... $134,221
Liabilities
Other current liabilities .............................................. $ 5
Total liabilities ....................................................... $ 5
(1) Represents the carrying value of wireless licenses sold by Savary Island to Verizon Wireless on August 28,
2012 under the license sale transaction discussed in Note 6.
The following table provides a summary of the changes in value of the Company’s redeemable non-
controlling interests (in thousands):
Year Ended December 31,
2012 2011
Beginning balance, January 1 ...................................... $95,910 $104,788
Accretion of redeemable non-controlling interests, before tax ........... 28 (7,844)
Purchase of membership units of non-controlling interests ............. (5,250) —
Loans made to joint venture partner ............................... (8,255) —
Optional distribution made to joint venture partner .................... (16,243) —
Other ....................................................... (1,673) (1,034)
Ending balance, December 31, ..................................... $64,517 $ 95,910
Note 8. Unrestricted Subsidiaries
In July 2011, the Company’s board of directors designated Cricket Music and Cricket Music’s wholly-
owned subsidiary Muve USA, LLC (“Muve USA”) as “Unrestricted Subsidiaries” under the indentures
governing Cricket’s senior notes. Cricket Music, Muve USA and their subsidiaries are also designated as
“Unrestricted Subsidiaries” under the Credit Agreement. Muve USA holds certain hardware, software and
intellectual property relating to Cricket’s Muve Music service. The financial position and results of operations of
Cricket Music and Muve USA are included in the Company’s consolidated financial statements included in this
report. Together with STX Wireless, Cricket Music and Muve USA and their subsidiaries are presented as “Non-
Guarantors” within the Company’s condensed consolidating financial statements included in Note 15.
108