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Variable Interest Entities | 9 Months Ended
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Sep. 30, 2012
Disclosure Text Block |
Variable Interest Entities | 10. Variable Interest Entities (VIEs) Consolidated VIEs As of September 30, 2012, U.S. Cellular holds a variable interest in and consolidates the following VIEs under GAAP: Aquinas Wireless L.P. (“Aquinas Wireless”); King Street Wireless L.P. (“King Street Wireless”) and King Street Wireless, Inc., the general partner of King Street Wireless; and Carroll Wireless L.P. (“Carroll Wireless”) and Carroll PCS, Inc., the general partner of Carroll Wireless. 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 i ndirectly through its interests in Aquinas Wireless, King Street Wireless, Barat Wireless L.P. and Carroll Wireless, collectively, the “limited partnerships.” Each limited partnership participated in and was awarded spectrum licenses in one of four separate spectrum auctions (FCC Auctions 78, 73, 66, and 58). Each limited partnership qualified as a “designated entity” and thereby was eligible for bidding 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. On September 7, 2012, U.S. Cellular acquired 100% of the ownership interest in Barat Wireless, Inc., the general partner of Barat Wireless L.P., for an immaterial amount. Prior to this acquisition, U.S. Cellular consolidated Barat Wireless L.P. and Barat Wireless, Inc. as VIEs. Subsequent to the acquisition date these entities cease d to be VIEs but continue to be consolidated based on U.S. Cellular's controlling financial interest in the entities. The power to direct the activities of the VIEs that most significantly impact their economic performance is shared. Specifically, the general partner of each of these VIEs has the exclusive right to manage, operate and control the limited partnerships and make all decisions to carry on the business of the partnerships; however, the general partner of each partnership needs consent of the limited partner, a U.S. Cellular subsidiary, to sell or lease certain licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of the VIEs is shared, U.S. Cellular has a disproportionate level of exposure to the variability associated with the economic performance of the VIEs, indicating that U.S. Cellular is the primary beneficiary of the VIEs in accordance with GAAP. Accordingly, these VIEs are consolidated. U.S. Cellular's capital contributions and advances made to these VIEs totaled $5.0 million and $15.8 million in the nine months ended September 30, 2012 and 2011, respectively. The following table presents the classification of the consolidated VIEs' assets and liabilities in U.S. Cellular's Consolidated Balance Sheet.
|  | September 30, |  | December 31,
| 2012 |  | 2011
(Dollars in thousands) |  |  |  |  |
Assets |  |  |  |  |
| Cash and cash equivalents | $ | 6,086 |  | $ | 12,086
| Other current assets |  | 142 |  |  | 47
| Licenses |  | 396,934 |  |  | 483,059
| Property, plant and equipment, net |  | 15,167 |  |  | 9,450
| Other assets and deferred charges |  | 435 |  |  | 153
| Total assets | $ | 418,764 |  | $ | 504,795
Liabilities |  |  |  |  |
| Current liabilities | $ | 981 |  | $ | 957
| Deferred liabilities and credits |  | 2,042 |  |  | -
| Total liabilities | $ | 3,023 |  | $ | 957
Other Related Matters U.S. Cellular may agree to make additional capital contributions and/or advances to the VIEs discussed above and/or to their general partners to provide additional funding for the development of licenses granted in the various auctions. U.S. Cellular may finance such amounts with a combination of cash on hand, borrowings under its revolving credit agreement and/or long-term debt. There is no assurance that U.S. Cellular will be able to obtain additional financing on commercially reasonable terms or at all to provide such financial support. Aquinas Wireless, King Street Wireless an d Carroll Wireless were formed to participate in FCC auctions of wireless spectrum and to fund, establish, and provide wireless service with respect to any FCC licenses won in the auctions. As such, these entities have risks similar to the business risks described in the “Risk Factors” in U.S. Cellular's Form 10-K for the year ended December 31, 2011. U.S. Cellular began offering fourth generation Long-term Evolution (“4G LTE”) service in certain cities within its service areas during the first quarter of 2012 and has plans to continue the deployment of 4G LTE. U.S. Cellular currently provides 4G LTE service in conjunction with King Street Wireless. Aquinas Wireless and Carroll Wireless are still in the process of developing long-term business plans. On October 12, 2012, U.S. Cellular entered into an agreement to acquire 100% of the ownership interest in Carroll PCS, Inc., the general partner of Carroll Wireless L.P., for an immaterial amount. The acquisition requires approval from the FCC and, if approved, is expected to close in the fourth quarter of 2012. Following the closing, Carroll Wireless L.P. and Carroll PCS, Inc. will cease to be VIEs but will continue to be consolidated.

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- Definition Describes how the entity aggregates Variable Interest Entities (VIE) for disclosure purposes, distinguishing between (a) VIEs that are not consolidated because the enterprise is not the primary beneficiary but has a variable interest and (b) VIEs that are consolidated. + References No definition available. + Details
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