Sprint - Nextel 2014 Annual Report Download - page 34

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recognized as a result of the SoftBank Merger. Customer relationship intangible assets are amortized using the sum-of-the-
months'-digits method, which results in higher amortization rates in early periods that will decline over time.
Successor Three-Month Transition Period Ended March 31, 2014 and Predecessor Three-Month Period Ended
March 31, 2013
Amortization expense increased $359 million, or 513%, in the Successor three-month transition period ended
March 31, 2014 compared to the same Predecessor period in 2013, primarily due to the recognition of definite-lived
intangible assets related to customer relationships of approximately $6.9 billion as a result of the SoftBank Merger. Customer
relationship intangible assets are amortized using the sum-of-the-months'-digits method, which results in higher amortization
rates in early periods that will decline over time.
Successor Year Ended December 31, 2013 and Predecessor Year Ended December 31, 2012
Amortization expense increased $605 million, or 200%, for the Successor year ended December 31, 2013
compared to the Predecessor year ended December 31, 2012, primarily due to the recognition of definite-lived intangible
assets related to customer relationships of approximately $6.9 billion as a result of the SoftBank Merger. Customer
relationship intangible assets are amortized using the sum-of-the-months'-digits method, which results in higher amortization
rates in early periods that will decline over time.
Impairments
During the quarter ended December 31, 2014, we determined that recoverability of the carrying amount of the
Sprint trade name should be evaluated for impairment due to changes in circumstances surrounding our Wireless reporting
unit. As a result, we recorded an impairment loss of $1.9 billion, which is included in “Impairments” in our consolidated
statements of operations. During the quarter ended December 31, 2014, we also tested the recoverability of the Wireline asset
group, which consists primarily of property, plant and equipment, due to continued declines in our Wireline segment earnings
and our forecast that projected continued losses in future periods. As a result, we recorded an impairment loss of $233 million
to reduce the carrying value of Wireline’s property, plant and equipment to its estimated fair value, which is included in
“Impairments” in our consolidated statements of operations.
During the three-month transition period ended March 31, 2014, we recorded $75 million of asset impairments
primarily related to network equipment assets that were no longer necessary for management's strategic plans.
During the Predecessor year ended December 31, 2012, we recorded asset impairments consisting of $18 million
of assets associated with a decision to utilize fiber backhaul rather than microwave backhaul and $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. We had an additional $18 million of asset impairments primarily related to assets that were no longer
necessary for management's strategic plans and were primarily related to network asset equipment.
Other, net
The following table provides additional information regarding items included in "Other, net."
Successor Combined Successor Predecessor
Year Ended
March 31,
Three Months
Ended
March 31, Year Ended December 31, Year Ended December 31,
191 Days
Ended
July 10,
Three Months
Ended
March 31, Year Ended December 31,
2015 2014 2013 2013 2013 2013 2012
(in millions)
Severance and exit costs $ (304) $ (52) $ (961) $ (309) $ (652) $ (25) $ (196)
Litigation (91) — — — — — —
Partial pension settlement (59) — — — — — —
Release of assumed liability - United States
Cellular Corporation (U.S. Cellular) asset
acquisition 41 — — — — — —
Spectrum hosting contract termination — — — — — — 236
Gains from asset dispositions and exchanges — — — — — — 29
Other — — (124) (93) (31) 22 (47)
Total (expense) income $ (413) $ (52) $ (1,085) $ (402) $ (683) $ (3) $ 22