Verizon Wireless 2014 Annual Report Download - page 36

34
Wireless
Wireless Transaction
OnFebruary21,2014,wecompletedtheWirelessTransactionforaggre-
gate consideration of approximately $130 billion. The consideration
paid was primarily comprised of cash of approximately $58.89 billion,
Verizon common stock with a value of approximately $61.3 billion and
other consideration.
Omnitel Transaction
OnFebruary21, 2014,VerizonandVodafonealso consummatedthe
sale of the Omnitel Interest (the Omnitel Transaction) by a subsidiary
of Verizon to a subsidiary of Vodafone in connection with the Wireless
Transaction pursuant to a separate share purchase agreement. As a result,
during 2014, we recognized a pre-tax gain of $1.9 billion on the disposal
of the Omnitel interest.
See Note 2 to the consolidated nancial statements for additional infor-
mation regarding the Wireless Transaction.
Spectrum License Transactions
OnJanuary29,2015,theFCCcompletedanauctionof65MHzofspec-
trum, which it identied as the AWS-3 band. Verizon participated in that
auction, and was the high bidder on 181 spectrum licenses, for which we
will pay approximately $10.4 billion. During the fourth quarter of 2014,
we made a deposit of $0.9 billion related to our participation in this auc-
tion.OnFebruary13,2015,wemadeadownpaymentof$1.2billionfor
these spectrum licenses. Verizon has submitted an application for these
licenses and must complete payment for them in the rst quarter of 2015.
Fromtimetotime,weenterintoagreementstobuy,sellorexchange
spectrum licenses. We believe these spectrum license transactions have
allowed us to continue to enhance the reliability of our network while
also resulting in a more ecient use of spectrum. See Note 2 to the
consolidated nancial statements for additional details regarding our
spectrum license transactions.
Tower Monetization Transaction
OnFebruary5,2015,weannouncedanagreementwithAmericanTower
pursuant to which American Tower will have the exclusive right to lease,
acquire or otherwise operate and manage many of our wireless towers
for an upfront payment of $5.1 billion, which also includes payment for
the sale of 165 towers. See Note 2 to the consolidated nancial state-
ments for additional information.
Wireline
During July 2014, Verizon sold a non-strategic Wireline business for cash
consideration that was not signicant. Additionally, during July 2012, we
acquiredHUGHESTelematicsforapproximately$12pershareincashfor
a total acquisition price of $0.6 billion. The acquisition has accelerated
our ability to bring more telematics oerings to market for existing and
new customers. See Note 2 to the consolidated nancial statements for
additional information.
On February 5, 2015, we announced that we have entered into a
denitiveagreementwithFrontierpursuanttowhichVerizonwillsell
its local exchange business and related landline activities in California,
Florida, and Texas, including FiOS Internet and Video customers,
switched and special access lines and high-speed Internet service and
long distance voice accounts in these three states for approximately
$10.5 billion. See Note 2 to the consolidated nancial statements for
additional information.
Other
Duringthefourthquarterof2014,RedboxInstantbyVerizon,aven-
turebetweenVerizonandRedboxAutomatedRetail,LLC(Redbox),a
wholly-owned subsidiary of Outerwall Inc., ceased providing service to
its customers. In accordance with an agreement between the parties,
RedboxwithdrewfromtheventureonOctober20,2014andVerizon
wound down and dissolved the venture during the fourth quarter of
2014. As a result of the termination of the venture, we recorded a pre-tax
loss of $0.1 billion in the fourth quarter of 2014.
During February 2014, Verizon acquired a business dedicated to
the development of IP television for cash consideration that was
not signicant.
During the fourth quarter of 2013, Verizon acquired an industry leader in
content delivery networks for $0.4 billion.
See Note 2 to the consolidated financial statements for additional
information.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
ACQUISITIONS AND DIVESTITURES