Sprint - Nextel 2006 Annual Report Download - page 99

As of
December 31,
2005 Adjustments Final Allocation
Purchase Price Allocation
(in millions)
Current assets, including cash and cash equivalents of $2,152 . . . $ 5,505 $ 22 $ 5,527
Property, plant and equipment ........................... 8,374 (37) 8,337
Goodwill .......................................... 15,573 41 15,614
Spectrum licenses .................................... 14,240 — 14,240
Other indefinite lived intangibles ........................ 400 — 400
Customer relationships and other definite lived intangibles...... 10,448 — 10,448
Investments ........................................ 2,678 — 2,678
Other assets ........................................ 111 — 111
Current liabilities .................................... (2,920) (93) (3,013)
Long-term debt ..................................... (8,984) — (8,984)
Deferred income taxes, net ............................. (7,935) 118 (7,817)
Other long-term liabilities .............................. (159) — (159)
Deferred compensation included in shareholders’ equity ....... 485 (51) 434
Net assets acquired ................................. $37,816 $ — $37,816
In 2006, a net increase was made to goodwill in the amount of $41 million primarily due to adjustments to
liabilities in connection with the merger, which includes the recognition of involuntary termination benefits,
costs associated with the termination of contracts and exit activities, the rationalization of property, plant and
equipment, and identification of loss contingencies that were in existence prior to consummation of the merger.
There will be no further purchase accounting adjustments related to this acquisition, except when required by
certain accounting rules. See note 7 for information regarding the useful lives of acquired definite lived
intangible assets as well as other information regarding intangible assets.
2005 PCS Affiliate Acquisitions
In the second half of 2005, we acquired three PCS Affiliates for $1.5 billion in cash: US Unwired Inc., Gulf
Coast Wireless Limited Partnership and IWO Holdings, Inc. Changes to the initial purchase price allocations
for these PCS Affiliates have occurred based on further analysis and valuations of certain assets and liabilities,
and are summarized in the table below along with the respective total fair value amounts.
As of
December 31,
2005 Adjustments Final Allocation
Purchase Price Allocation
(In millions)
Goodwill ................................... $1,341 $(214) $1,127
Reacquired rights ............................. — 354 354
Customer relationships ......................... 418 (80) 338
Property, plant and equipment ................... 328 55 383
Other assets ................................. 194 4 198
Long-term debt .............................. (703) — (703)
Other liabilities .............................. (63) (105) (168)
Net assets acquired.......................... $1,515 $ 14 $1,529
F-22
SPRINT NEXTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)