Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure

Goodwill and Intangible Assets

Goodwill of $682.1 million was recorded in the CCUSA segment in connection with the NextG Acquisition, none of which is expected to be deductible for tax purposes. Goodwill of $54.8 million was recorded in connection with the WCP Acquisition, of which $40.9 million is not expected to be deductible for tax purposes.

The purchase price of the NextG Acquisition resulted in the recognition of a substantial amount of goodwill based on the following:


•	the acquired and in-process DAS have low average tenancy, which the Company believes provides an opportunity to co-locate additional tenants on those systems;


•	the Company believes that the economics associated with DAS are similar to the economics associated with the Company's towers, whereby expected increases in revenues from additional tenants on existing DAS are expected to result in high incremental margins due to relatively fixed operating costs;


•	the Company believes the demand for tenants to co-locate on DAS will be driven by the continued growth trends in the wireless communication industry as wireless carriers continue to focus on improving network quality and expanding capacity;


•	the Company believes the acquired DAS are well-positioned to benefit from the anticipated growth in the wireless industry with their previously mentioned locations in the ten largest metropolitan statistical areas in the U.S.; and


•	other intangibles not qualified for separate recognition, including the assembled work force.

To a lesser extent, a portion of the goodwill recognized is the result of recording the tax impact of the NextG Acquisition. See also note 6.

The following is a summary of the Company's intangible assets.



	As of June 30, 2012							As of December 31, 2011
	Gross Carrying Value		Accumulated Amortization			Net Book Value		Gross Carrying Value		Accumulated Amortization			Net Book Value
Site rental contracts and customer relationships	$	3,091,480	$	(825,535	)	$	2,265,945	$	2,823,832	$	(748,850	)	$	2,074,982
Other intangible assets	181,435		(56,088		)	125,347		152,375		(49,175		)	103,200
Total	$	3,272,915	$	(881,623	)	$	2,391,292	$	2,976,207	$	(798,025	)	$	2,178,182

The components of the additions to intangible assets during the six months ended June 30, 2012 are as follows:



	Three Months Ended June 30,			Six Months Ended June 30,
	2012			2012
	Amount		Weighted-Average Amortization Period	Amount^(a)		Weighted-Average Amortization Period
			(In years)			(In years)
Site rental contracts and customer relationships	$	162,062	19.6	$	267,564	23.5
Other intangible assets	30,000		19.0	30,573		18.9
Total	$	192,062	19.5	$	298,137	23.0

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(a)	$94.5 million related to the WCP Acquisition.

Amortization expense related to intangible assets is classified as follows on the Company's consolidated statement of operations and comprehensive income (loss):



	Three Months Ended June 30,				Six Months Ended June 30,
Classification	2012		2011		2012		2011
Depreciation, amortization and accretion	$	42,353	$	39,663	$	82,525	$	79,234
Site rental costs of operations	755		875		1,563		1,995
Total amortization expense	$	43,108	$	40,538	$	84,088	$	81,229

The estimated annual amortization expense related to intangible assets (inclusive of those recorded to "site rental costs of operations") for the six months ended December 31, 2012 and years ended December 31, 2013 to 2016 is as follows:



	Six Months Ended December 31,		Years Ending December 31,
	2012		2013		2014		2015		2016
Estimated annual amortization	$	87,277	$	166,400	$	164,128	$	155,247	$	155,247

During the six months ended June 30, 2012, the Company recorded deferred credits of $277.2 million related to below-market tenant leases as a result of the preliminary purchase price allocation for the NextG Acquisition (see note 3). The below-market tenant leases recorded during the six months ended June 30, 2012 have a weighted-average amortization period of 11 years and are amortized to site rental revenues on the consolidated statement of operations and comprehensive income (loss).

The estimated annual amounts related to below-market tenant leases expected to be amortized into site rental revenues for the six months ended December 31, 2012 and years ended December 31, 2013 to 2016 are as follows:



	Six Months Ended December 31,		Years Ending December 31,
	2012		2013		2014		2015		2016
Estimated annual amortization	$	13,203	$	26,398	$	26,361	$	25,527	$	24,799

- 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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