US Cellular 2015 Annual Report Download - page 45

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31MAR201601273985
31MAR201601274111
there is a definitive agreement. See Note 6 — Acquisitions, Divestitures and Exchanges in the Notes to Consolidated
Financial Statements for additional information related to significant transactions.
TDS assesses its business interests on an
ongoing basis with a goal of improving the
competitiveness of its operations and
maximizing its long-term return on capital. As
part of this strategy, TDS reviews attractive
opportunities to acquire additional wireless
operating markets and wireless spectrum,
including pursuant to FCC auctions; and
telecommunications, cable, HMS or other
possible businesses.
$0
$50
$100
$150
$200
$250
$300
$350
2013 2014 2015
HMS
Businesses
Cable
Businesses
U.S. Cellular
Licenses
TDS may seek to divest outright or include in
exchanges for other interests those interests
that are not strategic to its long-term success.
$0
$200
$400
$600
$800
$1,000
2013 2014 2015
Other
Wireline
Businesses
U.S. Cellular
Businesses
U.S. Cellular
Licenses
In February 2016, U.S. Cellular filed an application to participate as a forward auction bidder for 600 MHz broadcast
television spectrum licenses in an FCC auction referred to as Auction 1000. Auction 1000 is expected to commence with
the broadcaster initial commitment deadline on March 29, 2016. Forward auction bidding is likely to begin a couple of
months later and could continue for three months or longer. See ‘‘Regulatory Matters — FCC Auction 1000.’’ Prior to
becoming a qualified bidder, U.S. Cellular must make an upfront payment, the size of which establishes its initial bidding
eligibility. If U.S. Cellular is a winning bidder in the auction, it may be required to make additional payments to the FCC
that may be substantial. In such event, U.S. Cellular plans to finance such payments from its existing cash balances,
borrowings under its revolving credit agreement and/or additional long-term debt.
Due to the FCC’s anti-collusion rules, TDS may not disclose any details relating to U.S. Cellular’s participation or
information about whether or not it is a winning bidder unless and until it is announced as a winning bidder by the FCC.
Due to changes in FCC rules, U.S. Cellular will not be participating in Auction 1000 through a limited partnership that is
a ‘‘designated entity’’ which qualifies for a discount of 25% on any licenses won in the auction, as U.S. Cellular has
done in prior auctions. Instead, U.S. Cellular will be participating in the auction directly and will not qualify for any
discount on licenses that may be won in the auction.
37
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cash Payments for Acquisitions
(Dollars in millions)
Cash Payments Received from Divestitures
(Dollars in millions)