Wireless Licenses, Goodwill and Other Intangible Assets

Note 3

Wireless Licenses, Goodwill and Other Intangible Assets

Wireless Licenses

Changes in the carrying amount of Wireless licenses are as follows:


	(dollars in millions)
Balance at January 1, 2012	$	73,250
Acquisitions (Note 2)		4,544
Capitalized interest on wireless licenses		205
Reclassifications, adjustments and other		(255)

Balance at December 31, 2012	$	77,744
Acquisitions (Note 2)		579
Dispositions (Note 2)		(2,361)
Capitalized interest on wireless licenses		566
Reclassifications, adjustments and other		(781)

Balance at December 31, 2013	$	75,747

Reclassifications, adjustments and other includes $0.9 billion of Wireless licenses that are classified as held for sale and included in Prepaid expenses and other on our consolidated balance sheet at December 31, 2013 as well as the exchanges of wireless licenses in 2013 and 2012. See Note 2 for additional details.

At December 31, 2013 and 2012, approximately $7.7 billion and $7.3 billion, respectively, of wireless licenses were under development for commercial service for which we were capitalizing interest costs.

The average remaining renewal period of our wireless license portfolio was 5.1 years as of December 31, 2013. See Note 1 for additional details.

Goodwill

Changes in the carrying amount of Goodwill are as follows:


	(dollars in millions)
	Wireless		Wireline		Total
Balance at January 1, 2012	$	17,963	$	5,394	$	23,357
Acquisitions (Note 2)		209		551		760
Reclassifications, adjustments and other		–		22		22

Balance at December 31, 2012	$	18,172	$	5,967	$	24,139
Acquisitions (Note 2)		204		291		495

Balance at December 31, 2013	$	18,376	$	6,258	$	24,634

The increase in Goodwill at Wireless at December 31, 2013 was primarily due to obtaining control of previously unconsolidated wireless partnerships, which were previously accounted for under the equity method and are now consolidated. This resulted in an immaterial gain recorded during the year ended December 31, 2013. The increase in Goodwill at Wireline at December 31, 2013 was primarily due to the acquisition of a provider of content delivery networks.

Other Intangible Assets

The following table displays the composition of Other intangible assets, net:


										(dollars in millions)
		2013							2012
At December 31,	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (5 to 13 years)	$	3,639	$	(2,660	)	$	979	$	3,556	$	(2,338	)	$	1,218
Non-network internal-use software (3 to 7 years)		11,770		(7,317	)		4,453		10,415		(6,210	)		4,205
Other (2 to 25 years)		691		(323	)		368		802		(292	)		510

Total	$	16,100	$	(10,300	)	$	5,800	$	14,773	$	(8,840	)	$	5,933

The amortization expense for Other intangible assets was as follows:


Years	(dollars in millions)
2013	$	1,587
2012		1,540
2011		1,505

Estimated annual amortization expense for Other intangible assets is as follows:


Years	(dollars in millions)
2014	$	1,486
2015		1,215
2016		971
2017		784
2018		619

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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