Sprint - Nextel 2014 Annual Report Download - page 109

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-26
As of March 31, 2015, the minimum estimated payments to be received for leased devices were as follows (in
millions):
Fiscal year 2015 $ 740
Fiscal year 2016 505
Fiscal year 2017 1
Fiscal year 2018 and thereafter —
$ 1,246
Assessment of Impairment
During the quarter ended December 31, 2014, we tested the recoverability of the Wireline long-lived assets due to
continued declines in our Wireline segment earnings and our forecast that projected continued losses in future periods. As a
result of the test, we recorded an impairment loss of $233 million, which is included in “Impairments” in our consolidated
statements of operations, to reduce the carrying value of the Wireline asset group, which includes the Wireline long-lived
assets, to its estimated fair value of $918 million as of our testing date. The fair value of the Wireline long-lived assets was
estimated using a market approach, which included significant unobservable inputs including liquidation curves, useful life
assumptions, and scrap values. As the assumptions are largely unobservable, the estimate of fair value is considered to be
unobservable within the fair value hierarchy.
We recorded asset impairments of $75 million for the Successor three-month transition period ended March 31, 2014
and $102 million for the Predecessor year ended December 31, 2012, respectively. For the Successor three-month transition
period ended March 31, 2014, asset impairments were recorded primarily due to network equipment assets that were no longer
necessary as a result of changes in management's strategic plans. Asset impairments in the year ended December 31, 2012
consisted of $18 million of assets associated with a decision to utilize fiber backhaul, which we expect to be more cost effective,
rather than microwave backhaul, $66 million of capitalized assets that we no longer intend to deploy as a result of the termination
of the spectrum hosting arrangement with LightSquared, and $18 million related to network asset equipment ($13 million
Wireless; $5 million Wireline) that is no longer necessary for management's strategic plans.
Note 7. Intangible Assets
Indefinite-Lived Intangible Assets
Our indefinite-lived intangible assets consists of FCC licenses, which were acquired primarily through FCC
auctions and business combinations, certain of our trademarks, and goodwill. At March 31, 2015, we held 1.9 GHz, 800 MHz
and 2.5 GHz FCC licenses authorizing the use of radio frequency spectrum to deploy our wireless services. As long as the
Company acts within the requirements and constraints of the regulatory authorities, the renewal and extension of these
licenses is reasonably certain at minimal cost. Accordingly, we have concluded that FCC licenses are indefinite-lived
intangible assets. Goodwill represents the excess of consideration paid over the estimated fair value of net tangible and
identifiable intangible assets acquired in business combinations (see Note 3. Significant Transactions).
During the quarter ended June 30, 2014, the Company entered into definitive agreements with various
counterparties to sell certain FCC licenses held by its Wireless segment. During the quarters ended September 30, 2014 and
March 31, 2015, agreements totaling $100 million and $200 million, respectively, received regulatory approval and were
settled. These transactions did not have a material impact on the Company's consolidated results of operations.