Sprint - Nextel 2008 Annual Report Download - page 82

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The acquisition of iPCS resulted in the effective settlement of pre-existing litigation. On September 24,
2008 the Illinois Supreme Court denied the Company’s petition for appeal in a contract dispute with iPCS. The
decision resulted in a previous ruling being upheld that required Sprint to cease owning, operating or managing
the iDEN network in parts of certain Midwestern states including Illinois, Iowa, Michigan, Missouri, Nebraska,
Wisconsin and a small portion of Indiana. As a result of the acquisition, all disputes have been resolved and the
Company recorded a $23 million charge as an increase to operating expenses, representing the estimated fair
value of the settled litigation.
The following table summarizes the consideration paid for each of the Acquisitions and the amounts
recognized for assets acquired and liabilities assumed at each acquisition date.
VMU
Acquisition
iPCS Affiliate
Acquisition
(in millions)
Consideration:
Cash, net of cash acquired ........................................... $265 $318
Equity instruments ................................................ 379 —
Settlement of pre-existing litigation ................................... — (23)
Fair value of consideration transferred ............................... 644 295
Fair value of Sprint’s equity interest in VMU before the acquisition .......... 57 —
Total ......................................................... $ 701 $ 295
Acquisition-related costs (included in selling, general and administrative in the
results of operations for the year ended December 31, 2009) ................ $ 7 $ 4
Recognized amounts of identifiable assets acquired and liabilities assumed:
Assets
Other current assets ................................................ 164 50
Property, plant and equipment ....................................... 41 150
Identifiable intangibles ............................................. 649 541
Other assets ...................................................... 17 6
Liabilities
Current liabilities .................................................. (238) (75)
Long-term debt ................................................... (1) (417)
Other long-term liabilities ........................................... (34) (28)
Deferred tax liabilities .............................................. (145) (57)
Total identifiable net assets ........................................ 453 170
Goodwill ........................................................ 248 125
Total net assets and liabilities ..................................... $ 701 $ 295
Identifiable intangible assets acquired in the Acquisitions include the following:
Estimated
Fair Value
Weighted Average
Useful Life
(in millions) (in years)
Trademarks ..................................................... $ 279 37
Customer relationships ............................................ 588 2
Reacquired rights ................................................ 305 9
Other intangibles ................................................. 18 6
Total .......................................................... $1,190
F-16