XML 55 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Acquisitions Divestures And Exchanges
6 Months Ended
Jun. 30, 2016
Acquisitions, Divestitures and Exchanges [Abstract]  
Acquisitions, Divestures and Exchanges

Note 5 Acquisitions, Divestitures and Exchanges

In February 2016, U.S. Cellular entered into an agreement with a third party to exchange certain 700 MHz licenses for certain AWS and PCS licenses and $28 million of cash.  This license exchange will be accomplished in two closings.  The first closing occurred in June 2016 at which time U.S. Cellular received $13 million of cash and recorded a gain of $9 million.  The second closing is expected to occur in the second half of 2016 and U.S. Cellular expects to recognize a gain at that time.  As a result of this exchange, the remaining licenses with a carrying value of $8 million have been classified as “Assets held for sale” in the Consolidated Balance Sheet as of June 30, 2016.

In 2016, U.S. Cellular entered into additional agreements with third parties to transfer FCC licenses in non-operating markets and receive FCC licenses in operating markets.  The agreements provide for the transfer of certain AWS and PCS spectrum licenses and approximately $1 million, net, in cash to U.S. Cellular, in exchange for U.S. Cellular transferring certain AWS, PCS and 700 MHz spectrum licenses to the third parties.  These transactions are subject to regulatory approval and other customary closing conditions, and are expected to close in the second half of 2016.  See Note 12Subsequent Events for additional information related to one of these exchange agreements.  Upon closing of each transaction, U.S. Cellular expects to recognize a gain.  As a result of these additional exchange agreements, licenses with a carrying value of $15 million have been classified as “Assets held for sale” in the Consolidated Balance Sheet as of June 30, 2016.

In 2015 and 2016, U.S. Cellular entered into multiple agreements to purchase spectrum licenses located in U.S. Cellular’s existing operating markets.  The aggregate purchase price for these spectrum licenses is $56 million, of which $46 million closed in the three months ended June 30, 2016.  The remaining agreements are expected to close in the second half of 2016.

In March 2016, the FCC released a list of applicants that successfully completed applications for the forward auction of 600 MHz spectrum licenses, referred to as Auction 1002, including U.S. Cellular.  Forward auction bidding is scheduled to begin on August 16, 2016.  In June 2016, U.S. Cellular made an upfront payment to the FCC of $143 million to establish its initial bidding eligibility.