US Cellular 2008 Annual Report Download - page 179

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6 ACQUISITIONS, DIVESTITURES AND EXCHANGES (Continued)
closed on March 19, 2008. The loss from the exchange was included in Loss on impairment of intangible
assets in the Consolidated Statement of Operations.
U.S. Cellular’s aggregate acquisitions for the year ended December 31, 2008 and the allocation of the
purchase price for these acquisitions were as follows:
Allocation of Purchase Price
Purchase Customer Net tangible
(Dollars in thousands) price(1) Goodwill(2) Licenses lists assets/(liabilities)
Auction 73 licenses(3) ............ $300,479 $ — $300,479 $ — $ —
Missouri licenses ................ 19,575 — 19,575 — —
North Carolina RSA 1 partnership .... 6,900 1,632 4,180 81 1,007
Maine licenses .................. 5,000 — 5,000 — —
Other ......................... 10,017 1,331 8,388 964 (666)
Total ........................... $341,971 $2,963 $337,622 $1,045 $ 341
(1) An aggregate of $0.3 million is recorded as a component of Other current liabilities in U.S. Cellular’s
December 31, 2008 Consolidated Balance Sheet.
(2) $1.6 million of the goodwill is deductible for tax purposes.
(3) Includes licenses to be granted with respect to Auction 73 to King Street Wireless, L.P (‘‘King Street
Wireless’’). U.S. Cellular consolidates King Street Wireless for financial statement purposes pursuant
to the guidelines of FIN 46(R) because U.S. Cellular anticipates benefiting from or absorbing a
majority of King Street Wireless’ expected gains or losses.
2007 Activity
In February 2007, U.S. Cellular purchased 100% of the membership interests of Iowa 15 Wireless, LLC
and obtained a 25 megahertz FCC license to provide wireless service in Iowa RSA 15 for $18.3 million in
cash. This acquisition increased investments in Licenses, Goodwill and Customer lists by $7.9 million,
$5.9 million and $1.6 million, respectively. The goodwill of $5.9 million was deductible for income tax
purposes.
U.S. Cellular also executed other relatively insignificant acquisitions during 2007. In aggregate, the 2007
acquisitions, divestitures and exchanges increased Licenses by $11.1 million, Goodwill by $5.9 million
and Customer lists by $1.6 million.
2006 Activity
U.S. Cellular participated in the 2006 FCC auction of wireless spectrum, designated by the FCC as
Auction 66, indirectly through its interest in Barat Wireless. Barat Wireless won seventeen licenses for
which it had bid $127.1 million, net of its bid credit. See Note 4—Variable Interest Entities, for further
details on Barat Wireless and the licenses acquired in Auction 66.
In October 2006, U.S. Cellular sold its interest in Midwest Wireless Communications, LLC to Alltel
Corporation. U.S. Cellular received $95.1 million in cash upon closing of the sale. The remaining sale
proceeds were distributed in 2008 and 2007, as discussed above.
In April 2006, U.S. Cellular purchased the remaining ownership interest in Tennessee RSA 3, in which it
had previously owned a 16.7% interest, for approximately $18.9 million in cash. This acquisition
increased investments in Licenses, Goodwill and Customer lists by $5.6 million, $4.1 million and
$2.0 million, respectively. The $4.1 million of goodwill was not deductible for income tax purposes.
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