Sprint - Nextel 2007 Annual Report Download - page 117

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SPRINT NEXTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2005 Activity
Balance
December 31,
2004 Expense(1)
Cash
Payments
and Other
Balance
December 31,
2005
(in millions)
Lease terminations ............................... $ 93 $9 $(24) $ 78
Severance ...................................... 55 (8) (47) —
Other .......................................... 7 (2) (5) —
Total costs ...................................... $155 $(1) $(76) $ 78
(1) Excluded from the table above are severance and exit costs of $27 million in 2006, that were allocated to
our Local segment prior to the spin-off of Embarq and are included in discontinued operations in the
consolidated statement of operations.
Exit Costs Associated with Business Combinations
In connection with exit activities related to business combinations, we recorded certain costs associated with
dispositions and integration activities in accordance with the requirements of EITF Issue No. 95-3.The exit costs
are primarily related to termination fees associated with leases and contractual arrangements, as well as
severance and related costs associated with work force reductions. For the year ended December 31, 2007, we
recorded $30 million of adjustments to such exit costs and adjusted the purchase price allocations. These actions
have resulted in adjustments to accrued liabilities and goodwill related to the 2006 and 2007 acquisitions. The
activity is presented in the table below:
2007 Activity
Balance
December 31,
2006
Purchase
Price
Adjustments
Cash
Payments
Balance
December 31,
2007
(in millions)
Lease terminations ................................. $ 77 $(32) $ (22) $ 23
Severance ........................................ 28 2 (28) 2
Other ............................................ 3 — (3) —
Total costs ........................................ $108 $ (30) $ (53) $ 25
2006 Activity
Balance
December 31,
2005
Purchase
Price
Adjustments
Cash
Payments
Balance
December 31,
2006
(in millions)
Lease terminations ................................. $ 42 $ 61 $ (26) $ 77
Severance ........................................ 6 159 (137) 28
Other ............................................ — 12 (9) 3
Total costs ........................................ $ 48 $232 $(172) $108
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