Verizon Wireless 2013 Annual Report Download - page 50

48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
• Subsequent to the transaction with T-Mobile USA in the fourth quarter
of 2013, on January 6, 2014, we announced two agreements with
T-Mobile USA with respect to our remaining 700 MHz A block spectrum
licenses. Under one agreement, we will sell certain of these licenses to
T-Mobile USA in exchange for cash consideration of approximately
$2.4 billion, and under the second agreement we will exchange the
remainder of these licenses for AWS and PCS spectrum licenses. These
transactions are subject to the approval of the FCC as well as other
customary closing conditions. These transactions are expected to close
in the middle of 2014.
Other
During 2013, we acquired various other wireless licenses and markets
for cash consideration that was not signicant. Additionally, we obtained
control of previously unconsolidated wireless partnerships, which were
previously accounted for under the equity method and are now consoli-
dated, which resulted in an immaterial gain. We recorded $0.2 billion of
goodwill as a result of these transactions.
During 2012, we acquired various other wireless licenses and markets for
cash consideration that was not signicant and recorded $0.2 billion of
goodwill as a result of these transactions.
Wireline
HUGHES Telematics, Inc.
During July 2012, we acquired HUGHES Telematics, Inc. (HUGHES
Telematics) for approximately $12 per share in cash for a total acquisition
price of $0.6 billion. As a result of the transaction, HUGHES Telematics
became a wholly-owned subsidiary of Verizon. The consolidated nancial
statements include the results of HUGHES Telematics’ operations from the
date the acquisition closed. Upon closing, we recorded approximately
$0.6 billion of goodwill, $0.1 billion of other intangibles, and assumed the
debt obligations of HUGHES Telematics, which were approximately $0.1
billion as of the date of acquisition, and which were repaid by Verizon.
Had this acquisition been completed on January 1, 2012 or 2011, the
results of the acquired operations of HUGHES Telematics would not
have had a signicant impact on the consolidated net income attribut-
able to Verizon. The acquisition has accelerated our ability to bring more
telematics oerings to market for existing and new customers.
The acquisition of HUGHES Telematics was accounted for as a business
combination under the acquisition method. The cost of the acquisition
was allocated to the assets and liabilities acquired based on their fair
values as of the close of the acquisition, with the excess amount being
recorded as goodwill.
Terremark Worldwide, Inc.
During April 2011, we acquired Terremark Worldwide, Inc. (Terremark),
a global provider of information technology infrastructure and cloud
services, for $19 per share in cash. Closing and other direct acquisition-
related costs totaled approximately $13 million after-tax. The acquisition
was completed via a tender oer followed by a “short-form” merger under
Delaware law through which Terremark became a wholly-owned subsid-
iary of Verizon. The acquisition enhanced Verizon’s oerings to business
and government customers globally.
The consolidated nancial statements include the results of Terremark’s
operations from the date the acquisition closed. Had this acquisi-
tion been consummated on January 1, 2011 the results of Terremark’s
acquired operations would not have had a signicant impact on the
consolidated net income attributable to Verizon. The debt obligations of
Terremark that were outstanding at the time of its acquisition by Verizon
were repaid during May 2011.
Other
During the fourth quarter of 2013, Verizon acquired an industry leader in
content delivery networks for $0.4 billion. We expect the acquisition will
increase our ability to meet the growing demand for online digital media
content. Upon closing, we recorded $0.3 billion of goodwill. Additionally,
we acquired a technology and television cloud company for cash con-
sideration that was not signicant. The consolidated nancial statements
include the results of the operations of each of these acquisitions from
the date each acquisition closed.
On January 21, 2014, Verizon announced an agreement to acquire a busi-
ness dedicated to the development of cloud television products and
services for cash consideration that was not signicant. The transaction,
which was completed in February 2014, is expected to accelerate the
availability of next-generation video services.