Wireless Licenses, Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

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, 2014	$	75,747
Acquisitions (Note 2)		444
Dispositions (Note 2)		(1,978)
Capitalized interest on wireless licenses		167
Reclassifications, adjustments and other		961

Balance at December 31, 2014	$	75,341
Acquisitions (Note 2)		10,474
Capitalized interest on wireless licenses		389
Reclassifications, adjustments and other		371

Balance at December 31, 2015	$	86,575

Reclassifications, adjustments and other includes the exchanges of wireless licenses in 2015 and 2014 as well as $0.3 billion of Wireless licenses that are classified as Assets held for sale on our consolidated balance sheets at December 31, 2015 and 2014, respectively. See Note 2 for additional details.

At December 31, 2015 and 2014, approximately $10.4 billion and $0.4 billion, respectively, of wireless licenses were under development for commercial service for which we were capitalizing interest costs. The increase is primarily due to licenses acquired in the AWS-3 auction.

The average remaining renewal period of our wireless license portfolio was 5.6 years as of December 31, 2015. See Note 1 for additional details.

Goodwill

Changes in the carrying amount of Goodwill are as follows:


			(dollars in millions)
	Wireless		Wireline		Other		Total

Balance at January 1, 2014	$	18,376	$	6,258	$	-	$	24,634
Acquisitions (Note 2)		15		40		-		55
Dispositions (Note 2)		-		(38)		-		(38)
Reclassifications, adjustments and other		(1)		(11)		-		(12)

Balance at December 31, 2014	$	18,390	$	6,249	$	-	$	24,639
Acquisitions (Note 2)		3		-		2,035		2,038
Reclassifications, adjustments and other		-		(1,918)		572		(1,346)

Balance at December 31, 2015	$	18,393	$	4,331	$	2,607	$	25,331

As a result of the acquisition of AOL in the second quarter of 2015, we recognized preliminary Goodwill of $1.9 billion, which is included within Other (see Note 2 for additional details). We also allocated $0.6 billion of goodwill on a relative fair value basis from Wireline to Other as a result of an internal reorganization. This increase was partially offset by a decrease in Goodwill in Wireline primarily due to the reclassification of $1.3 billion of Goodwill to Non-current assets held for sale on our consolidated balance sheet at December 31, 2015 as a result of our agreement to sell our local exchange business and related landline activities in California, Florida and Texas to Frontier (see Note 2 for additional details). The amount of Goodwill reclassified was based on a relative fair value basis.

Other Intangible Assets

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

(dollars in millions)

2015

2014

Gross

Accumulated

Net

Gross

Accumulated

Net

At December 31,

Amount

Amortization

Amount

Amount

Amortization

Amount

Customer lists (5 to 14 years)

$ 4,139

$ (2,365)

$ 1,774

$ 3,618

$ (2,924)

$ 694

Non-network internal-use software (3 to 8 years)

14,542

(9,620)

4,922

12,791

(8,428)

4,363

Other (5 to 25 years)

1,346

(450)

896

670

(368)

302

Total

$ 20,027

$ (12,435)

$ 7,592

$ 17,079

$ (11,720)

$ 5,359

The amortization expense for Other intangible assets was as follows:


Years	(dollars in millions)

2015		$ 1,694
2014		1,567
2013		1,587

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


Years	(dollars in millions)

2016		$ 1,696
2017		1,491
2018		1,311
2019		1,082
2020		805

- 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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