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Variable Interest Entities | 6 Months Ended
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Jun. 30, 2015
Disclosure Text Block |
Variable Interest Entities | 9. Variable Interest Entities U.S. Cellular consolidates variable interest entities (VIEs) in which it has a controlling financial interest and is the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance and (b) the obligation to absorb VIE losses and the right to receive benefits that are signif icant to the VIE. U.S. Cellular reviews these criteria initially at the time it enters into agreements and subsequently when reconsideration events occur. Consolidated VIEs As of June 30, 2015, U.S. Cellular holds a variable interest in and consolidates the following VIEs under GAAP: Advantage Spectrum and Frequency Advantage L.P., the general partner of Advantage Spectrum; Aquinas Wireless L.P. (“Aquinas Wireless”); and King Street Wireless L.P. (“King Street Wire less”) and King Street Wireless, Inc., the general partner of King Street Wireless. The power to direct the activities that most significantly impact the economic performance of Advantage Spectrum, Aquinas Wireless and King Street Wireless (collectively, the “limited partnerships”) is shared. Specifically, the general partner 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 genera l partner of each partnership needs the 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 di rect 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 wi th GAAP. Accordingly, these VIEs are consolidated. The following table presents the classification of the consolidated VIEs’ assets and liabilities in U.S. Cellular’s Consolidated Balance Sheet.
|  |  | June 30, |  | December 31,
|  |  | 2015 |  | 2014
(Dollars in thousands) |  |  |  |  |
Assets |  |  |  |  |
| Cash and cash equivalents | $ | 2,069 |  | $ | 2,588
| Other current assets |  | 211 |  |  | 278
| Licenses (1) |  | 651,281 |  |  | 312,977
| Property, plant and equipment, net |  | 9,636 |  |  | 10,671
| Other assets and deferred charges |  | 150 |  |  | 60,059
|  | Total assets | $ | 663,347 |  | $ | 386,573
Liabilities |  |  |  |  |
| Current liabilities | $ | 83 |  | $ | 110
| Deferred liabilities and credits |  | 567 |  |  | 622
|  | Total liabilities | $ | 650 |  | $ | 732
(1) | Includes payments totaling $338.3 million made by Advantage Spectrum to the FCC as described below.
Other Related Matters In March 2015, King Street Wireless made a $60.0 million distribution to its investors. Of this distribution, $6.0 million was provided to King Street Wireless, Inc. and $54.0 million was provided to U.S. Cellular. An FCC auction of AWS-3 spectrum licenses, referred to as Auction 97, ended in January 2015. U.S. Cellular participated in A uction 97 indirectly through its interest in Advantage Spectrum. A subsidiary of U.S. Cellular is a limited partner in Advantage Spectrum. Advantage Spectrum qualified as a “designated entity,” and thereby was eligible for bid credits with respect to spe ctrum purchased in Auction 97. Advantage Spectrum was the winning bidder for 124 licenses for an aggregate bid of $338.3 million, after its designated entity discount of 25%. This amount is classified as Licenses in U.S. Cellular’s Consolidated Balance Sheet. Advantage Spectrum’s bid amount, less the initial deposit of $60.0 million paid in 2014, plus certain other charges totaling $2.3 million, were paid to the FCC in March 2015. To help fund this payment, U.S. Cellular made loans and capital contributions to Advantage Spectrum and Frequency Advantage totaling $280.6 million for the six months ended June 30, 2015. There were no capital contributions, loans or advances made to U.S. Cellular’s VIEs during the six months ended June 30, 2014. Advantage Spectrum, Aquinas Wireless and King Street Wireless were formed to participate in FCC auctions of wireless spectrum and to fund, establish, and provide wireless service with res pect to any FCC licenses won in the auctions. As such, these entities have risks similar to those described in the “Risk Factors” in U.S. Cellular’s Form 10-K for the year ended December 31, 2014. U.S. Cellular may agree to make additional capital contributions and/or advances to Advantage Spectrum, Aquinas Wireless or King Street Wireless and/or to their general partners to provide additional funding for the development of licenses granted in various auctions. U.S. Cellular may finance such amounts with a combination of cash on hand, borrowings under its revolving credit agreement and/or other long-term debt. There is no assurance that U.S. Cellular will be able to obtain additional financing on commercially reason able terms or at all to provide such financial support.

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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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