US Cellular 2008 Annual Report Download - page 175

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 4 VARIABLE INTEREST ENTITIES (Continued)
A summary of the auctions in which each entity participated and the auction results for each of these
entities are shown in the table below.
Date Number of
FCC Auction Applications Licenses
Auction End Date Granted by FCC Won
Aquinas Wireless ............. 78 August 20, 2008 (1) 5(2)
King Street Wireless .......... 73 March 20, 2008 (1) 152(2)
Barat Wireless ............... 66 September 18, 2006 April 30, 2007 17
Carroll Wireless .............. 58 February 15, 2005 January 6, 2006 16
(1) Licenses have not yet been granted by the FCC for Auctions 78 and 73 at December 31, 2008.
(2) Provisionally won.
Although the bidding in Auction 73 and Auction 78 has ended, the FCC has granted only a few of the
licenses to winning bidders. There is no prescribed timeframe for the FCC to review the qualifications of
the various winning bidders and grant licenses.
Consolidated Variable Interest Entities
As of December 31, 2008, U.S. Cellular consolidates the following variable interest entities (‘‘VIEs’’):
• Aquinas Wireless;
• King Street Wireless and King Street Wireless, Inc., the general partner of King Street Wireless;
• Barat Wireless and Barat Wireless, Inc., the general partner of Barat Wireless; and
• Carroll Wireless and Carroll PCS, Inc., the general partner of Carroll Wireless.
FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, an interpretation of ARB No. 51
(‘‘FIN 46(R)’’), establishes certain criteria for consolidation when voting control is not present. Specifically, for
a variable interest entity, as such term is defined by FIN 46(R), an entity, referred to as the primary
beneficiary, that absorbs a majority of the variable interest entity’s expected gains or losses is required to
consolidate such a variable interest entity. U.S. Cellular holds a variable interest in the entities listed above
due to capital contributions and/or advances it has provided to these entities. Given the significance of these
contributions and/or advances in relation to the equity investment at risk, U.S. Cellular was deemed to be the
primary beneficiary of these VIEs. Without financial support from U.S. Cellular, these VIEs are unable to
finance their operations (i.e., participate in FCC auctions and construct wireless networks). Accordingly, these
VIEs are consolidated pursuant to FIN 46(R) because U.S. Cellular anticipates benefiting from or absorbing a
majority of these VIEs’ expected gains or losses.
Following is a summary of the capital contributions and advances made to each entity by U.S. Cellular:
Capital
Contributions
and
As of December 31, 2008 Advances(1)
(Dollars in millions)
Aquinas Wireless ......................................... $ 2.1
King Street Wireless & King Street Wireless, Inc. .................. 300.5
Barat Wireless & Barat Wireless, Inc. .......................... 127.3
Carroll Wireless & Carroll PCS, Inc. ........................... 130.1
$560.0
(1) Excludes funds provided to these entities solely from shareholder of the general partner.
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