Windstream 2009 Annual Report Download - page 165

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Goodwill and Other Intangible Assets, Continued:
Changes in the carrying amount of goodwill were as follows:
(Millions)
Balance at December 31, 2007 $ 2,224.2
Adjustments to Valor and CTC deferred taxes (26.0)
Balance at December 31, 2008 2,198.2
Acquisition of D&E (See Note 3) 88.1
Acquisition of Lexcom (See Note 3) 58.1
Balance at December 31, 2009 $ 2,344.4
As of January 1, 2009, the Company completed the annual impairment review of its goodwill according to
authoritative guidance and determined that no write-down in the carrying value of this asset was required. See
Note 2 for a discussion of the Company’s goodwill valuation approach.
On November 21, 2008, Windstream completed the sale of its wireless business. During the second quarter of
2008 the Company reclassified the associated assets as held for sale, including $52.2 million of goodwill and
$13.4 million of other intangible assets. Commensurate with the classification of the wireless assets as held for
sale, the Company performed an event driven impairment analysis and recognized a corresponding impairment
loss through goodwill of $20.3 million to reduce the carrying value of the assets to the contemplated transaction
price less cost to sell (see Note 2).
Intangible assets were as follows at December 31:
2009 2008
(Millions)
Gross
Cost
Accumulated
Amortization
Net Carrying
Value
Gross
Cost
Accumulated
Amortization
Net Carrying
Value
Franchise rights (a) (b) $ 1,055.1 $ (32.3) $ 1,022.8 $ 955.0 $ - $ 955.0
Customer lists (a) 393.1 (193.7) 199.4 322.6 (147.0) 175.6
Cable franchise rights (a) 34.1 (22.4) 11.7 22.5 (20.9) 1.6
Wireless license (a) (c) 16.6 - 16.6 - - -
Other (a) 3.2 (0.4) 2.8 - - -
Balance $ 1,502.1 $ (248.8) $ 1,253.3 $1,300.1 $ (167.9) $ 1,132.2
(a) Increases in the gross cost of intangible assets during 2009 were associated with the acquisitions of D&E and
Lexcom as previously discussed in Note 3.
(b) As discussed in Note 2, effective January 1, 2009, the Company prospectively changed its assessment of
useful life for its franchise rights from indefinite-lived to 30 years. Effective with this change, these rights are
now amortized on a straight-line basis in accordance with the way in which these operations are expected to
contribute to the undiscounted cash flows of the Company.
(c) The Company considers its wireless licenses to have an indefinite useful life.
Intangible asset amortization methodology and useful lives were as follows as of December 31, 2009:
Intangible Assets Amortization Methodology Estimated Useful Life
Franchise rights straight-line 30 years
Customer lists sum of years digits 9 - 10 years
Cable franchise rights straight-line 15 years
Other straight-line 1 - 2 years
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