US Cellular 2009 Annual Report Download - page 63

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6 VARIABLE INTEREST ENTITIES (VIEs)
From time to time, the FCC conducts auctions through which additional spectrum is made available for
the provision of wireless services. U.S. Cellular participated in spectrum auctions indirectly through its
interests in Aquinas Wireless L.P. (‘‘Aquinas Wireless’’), King Street Wireless L.P. (‘‘King Street Wireless’’),
Barat Wireless L.P. (‘‘Barat Wireless’’) and Carroll Wireless L.P. (‘‘Carroll Wireless’’), collectively, the
‘‘limited partnerships.’’ Each entity qualified as a ‘‘designated entity’’ and thereby was eligible for bid
credits with respect to licenses purchased in accordance with the rules defined by the FCC for each
auction. In most cases, the bidding credits resulted in a 25% discount from the gross winning bid.
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 February 16, 2010 5
King Street Wireless . . 73 March 20, 2008 December 30, 2009 152
Barat Wireless ...... 66 September 18, 2006 April 30, 2007 17
Carroll Wireless ..... 58 February 15, 2005 January 6, 2006 16
Consolidated VIEs
As of December 31, 2009, U.S. Cellular consolidates the following VIEs under GAAP:
• 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.
GAAP establishes certain criteria for consolidation of VIEs when voting control is not present. Specifically,
for a VIE, as such term is defined by GAAP, an entity, referred to as the primary beneficiary, that absorbs
a majority of the VIE’s expected gains or losses is required to consolidate such a VIE. 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
investments at risk, U.S. Cellular was deemed to be the primary beneficiary of these VIEs under GAAP.
Accordingly, these VIEs are consolidated 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
as of December 31, 2009 (dollars in thousands). The amounts shown in the table below exclude funds
provided to these entities solely from the shareholder of the general partner.
Aquinas Wireless ........................................... $ 2,132
King Street Wireless & King Street Wireless, Inc. .................... 300,604
Barat Wireless & Barat Wireless, Inc. ............................ 127,485
Carroll Wireless & Carroll PCS, Inc. ............................. 130,594
$560,815
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