Verizon Wireless 2006 Annual Report Download - page 57

Notes to Consolidated Financial Statements continued
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NOTE 7
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Changes in the carrying amount of goodwill are as follows:
(dollars in millions)
Domestic
Wireline Wireless Total
Balance at December 31, 2004 and 2005 $315 $ – $ 315
Acquisitions 5,085 345 5,430
Goodwill reclassifications and other (90) – (90)
Balance at December 31, 2006 $ 5,310 $ 345 $ 5,655
Other Intangible Assets
The following table displays the details of other intangible assets:
(dollars in millions)
At December 31, 2006 At December 31, 2005
Gross Accumulated Gross Accumulated
Amount Amortization Amount Amortization
Finite-lived intangible assets:
Customer lists (3 to 8 years) $1,278 $ 270 $3,436 $ 3,279
Non-network internal-use software (1 to 7 years) 7,777 3,826 7,081 3,193
Other (1 to 25 years) 204 23 26 3
Total $9,259 $ 4,119 $10,543 $ 6,475
Indefinite-lived intangible assets:
Wireless licenses $50,959 $47,781
Customer lists of $1,278 million includes $1,162 million related to the MCI acquisition. Customer lists of $3,313 million at Domestic Wireless
became fully amortized and were written off during 2006. Intangible asset amortization expense was $1,423 million, $1,444 million,
and $1,334 million for the years ended December 31, 2006, 2005 and 2004, respectively. It is estimated to be $1,201 million in 2007,
$1,047 million in 2008, $856 million in 2009, $633 million in 2010 and $483 million in 2011, primarily related to customer lists and non-net-
work internal-use software.
ment in CANTV is net of approximately $400 million of foreign cur-
rency translation adjustments that are included in Accumulated
Other Comprehensive Loss.
In the second quarter of 2006, we reached a definitive agreement to
sell our indirect 28.5% interest in CANTV to an entity jointly owned
by América Móvil and Telmex. That agreement was terminated on
February 8, 2007. On February 12, 2007, we announced our inten-
tion to participate in the Venezuelan government’s offer to purchase
our shares in CANTV through public tender offers in Venezuela and
the U.S. (See Note 23).
Vodafone Omnitel
Vodafone Omnitel N.V. (Vodafone Omnitel) is an Italian digital
cellular telecommunications company. It is the second largest
wireless provider in Italy. At December 31, 2006 and 2005, our
investment in Vodafone Omnitel included goodwill of $1,044 million
and $937 million, respectively.
During 2005, we repatriated $2,202 million of Vodafone Omnitel’s
earnings through the repurchase of issued and outstanding shares
of its equity. Vodafone Omnitel’s owners, Verizon and Vodafone
Group Plc (Vodafone), participated on a pro rata basis; conse-
quently, Verizon’s ownership interest after the share repurchase
remained at 23.1%.
Other Equity Investees
Verizon has limited partnership investments in entities that invest in
affordable housing projects, for which Verizon provides funding as a
limited partner and receives tax deductions and tax credits based
on its partnership interests. At December 31, 2006 and 2005,
NOTE 8
INVESTMENTS IN UNCONSOLIDATED BUSINESSES
Our investments in unconsolidated businesses are comprised of
the following:
(dollars in millions)
2006 2005
At December 31, Ownership Investment Ownership Investment
Equity Investees
CANTV 28.5% $ 230 28.5% $ 152
Vodafone Omnitel 23.1 3,624 23.1 2,591
Other Various 744 Various 770
Total equity investees 4,598 3,513
Cost Investees Various 270 Various 1,089
Total investments in
unconsolidated businesses $4,868 $4,602
Dividends and repatriations of foreign earnings received from
investees amounted to $42 million in 2006, $2,335 million in 2005
and $162 million in 2004, respectively, and are reported in Other, Net
operating activities in the consolidated statements of cash flows.
Equity Investees
CANTV
CANTV is Venezuela’s largest full-service telecommunications
provider. CANTV offers local services, national and international
long distance, Internet access and wireless services in Venezuela
as well as public telephone, private network, data transmission,
directory and other value-added services. Our $230 million invest-