Windstream 2007 Annual Report Download - page 140

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Acquisitions and Dispositions, Continued:
the results that would have actually been obtained if the merger occurred as of January 1, 2005, nor does the pro
forma data intend to be a projection of results that may be obtained in the future.
4. Goodwill and Other Intangible Assets:
Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets
acquired through various business combinations. The Company has acquired identifiable intangible assets through
its acquisitions of interests in various properties. The cost of acquired entities at the date of the acquisition is
allocated to identifiable assets, and the excess of the total purchase price over the amounts assigned to identifiable
assets is recorded as goodwill. Changes in the carrying amount of goodwill by business segment were as follows:
(Millions) Wireline
Product
Distribution Other Totals
Balance at December 31, 2005 $ 1,218.4 $ 0.3 $ - $ 1,218.7
Acquisition of Valor (Note 3) 746.3 - - 746.3
Balance at December 31, 2006 $ 1,964.7 $ 0.3 $ - $ 1,965.0
Acquisition of CTC (Note 3) 255.1 - 52.2 307.3
Adjustments to Valor deferred taxes 4.1 - - 4.1
Balance at December 31, 2007 $ 2,223.9 $ 0.3 $ 52.2 $ 2,276.4
As of January 1, 2007, the Company completed the annual impairment reviews of its goodwill according to the
guidance in SFAS No. 142, and determined that no write-down in the carrying value of these assets was required.
As of December 31, 2007 and 2006, the carrying value of the indefinite-lived intangible assets other than goodwill
were as follows:
(Millions)
December 31,
2007
December 31,
2006
Valor wireline franchise rights $ 600.0 $ 600.0
Kentucky wireline franchise rights 265.0 265.0
CTC wireline franchise rights 90.0 -
CTC wireless licenses 7.0 -
$ 962.0 $ 865.0
Upon completing the annual impairment reviews of its wireline franchise rights as of January 1, 2007, 2006 and
2005, the Company determined that no write-down in the carrying value of these assets was required.
As a result of the sale of the publishing business, Windstream agreed to forego future royalty payments from the
directory publishing business on advertising revenues generated from its directories. As these royalties contributed
to the carrying value of the wireline franchise rights, Windstream assessed the impact of forgoing these revenues
on that carrying value as of November 30, 2007. The results of the impairment analysis indicated that the fair
value of the indefinite-lived wireline franchise rights still exceed their carrying value. Therefore, no write-down
was required.
F-54