US Cellular 2013 Annual Report Download - page 61

United States Cellular Corporation
Notes to Consolidated Financial Statements (Continued)
NOTE 5 ACQUISITIONS, DIVESTITURES AND EXCHANGES (Continued)
On March 14, 2012, U.S. Cellular sold the majority of the assets and liabilities of a wireless market for
$49.8 million in cash. At the time of the sale, a $4.2 million gain was recorded in (Gain) loss on sale of
business and other exit costs, net in the Consolidated Statement of Operations. On May 9, 2011,
pursuant to certain required terms of the partnership agreement, U.S. Cellular paid $24.6 million in cash
to purchase the remaining ownership interest in this wireless market in which it previously held a 49%
noncontrolling interest. In connection with the acquisition of the remaining interest, a $13.4 million gain
was recorded to adjust the carrying value of this 49% investment to its fair value of $25.7 million based
on an income approach valuation method. The gain was recorded in Gain (loss) on investments in the
Consolidated Statement of Operations in 2011.
On September 30, 2011, U.S. Cellular completed an exchange whereby U.S. Cellular received eighteen
700 MHz spectrum licenses covering portions of Idaho, Illinois, Indiana, Kansas, Nebraska, Oregon and
Washington in exchange for two PCS spectrum licenses covering portions of Illinois and Indiana. The
exchange of licenses provided U.S. Cellular with additional spectrum to meet anticipated future capacity
and coverage requirements in several of its markets. No cash, customers, network assets, other assets
or liabilities were included in the exchange. As a result of this transaction, U.S. Cellular recognized a gain
of $11.8 million, representing the difference between the fair value of the licenses received, calculated
using a market approach valuation method, and the carrying value of the licenses surrendered. This gain
was recorded in (Gain) loss on license sales and exchanges in the Consolidated Statement of
Operations for the year ended December 31, 2011.
U.S. Cellular acquisitions in 2013 and 2012 and the allocation of the purchase price for these
acquisitions were as follows:
Allocation of Purchase Price
Intangible
Purchase Assets Subject Net Tangible
Price Goodwill Licenses to Amortization Assets/(Liabilities)
(Dollars in thousands)
2013
Licenses ...................... $ 16,540 $— $ 16,540 $— $—
2012
Licenses ...................... $122,690 $— $122,690 $— $—
At December 31, 2013 and 2012, the following assets and liabilities were classified in the Consolidated
Balance Sheet as ‘‘Assets held for sale’’ and ‘‘Liabilities held for sale’’:
Property, Loss on Total Assets Liabilities
Current Plant and Assets Held Held for Held for
Assets Licenses Goodwill Equipment for Sale(1) Sale Sale(2)
(Dollars in thousands)
2013
Divestiture of Spectrum Licenses . . $— $ 16,027 $ — $ — $ — $ 16,027 $ —
2012
Divestiture Transaction .......... $— $140,599 $72,994 $ — $ — $213,593 $19,594
Bolingbrook Customer Care
Center(3) .................. — — — 4,275 (1,105) 3,170 —
Total ....................... $— $140,599 $72,994 $4,275 $(1,105) $216,763 $19,594
(1) Loss on assets held for sale was recorded in (Gain) loss on sale of business and other exit costs,
net in the Consolidated Statement of Operations.
(2) Liabilities held for sale primarily consisted of Customer deposits and deferred revenues.
(3) Effective January 1, 2013, U.S. Cellular transferred its Bolingbrook Customer Care Center operations
to an existing third party vendor.
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