DISCONTINUED OPERATIONS - SALE OF U.S. RETAIL WIRELESS BUSINESS

12 Months Ended

Dec. 31, 2013

DISCONTINUED OPERATIONS - SALE OF U.S. RETAIL WIRELESS BUSINESS

DISCONTINUED OPERATIONS - SALE OF U.S. RETAIL WIRELESS BUSINESS

4. DISCONTINUED OPERATIONS—SALE OF U.S. RETAIL WIRELESS BUSINESS

        On September 20, 2013, the Federal Communications Commission announced its approval of the previously announced proposed sale of the Company's U.S. retail wireless business operated under the Alltel name to AT&T Mobility LLC for approximately $780.0 million in cash plus $16.8 million in working capital. The Company previously reported the operations of this business within its U.S. Wireless segment. As a result of that approval, the Company completed the sale of certain U.S. retail wireless assets on that date and recorded a gain of approximately $307.1 million calculated as follows (in thousands):

Proceeds:
Received			$	702,000
Escrowed				78,000
Working capital				16,828
Adjusted proceeds				796,828
Less: Net assets sold or impaired:
Assets sold or impaired:
Current assets	51,597
Property, plant and equipment, net	190,970
Telecommunications licenses	50,553
Other intangible assets	37,434
Other assets	13,202
Liabilities sold:
Current liabilities	(40,674	)
Other liabilities	(22,796	)
Net assets sold or impaired				280,286
Less: Transaction related costs				(13,517	)
Pre-tax gain				503,025
Less: Income taxes at effective rate				195,923
Net gain on sale			$	307,102

        Of the total $307.1 million gain, the Company recognized $305.2 million during the nine months ended September 30, 2013 and an additional $1.9 million during the three months ended December 31, 2013 related to final working capital settlements and changes in tax estimates.

        The $796.8 million in cash proceeds includes $78.0 million of cash being held in a general indemnity escrow account which, subject to the terms and conditions of the purchase agreement between AT&T Mobility LLC and the Company governing the sale, will be released to the Company as follows: $19.5 million in March 2014; $19.5 million in September 2014; and the remaining $39.0 million in March 2015. The Company has recorded the $78.0 million as restricted cash on its December 31, 2013 balance sheet with $39.0 million classified as a current asset and the remaining $39.0 million classified as long-term based on the timing of the expected cash proceeds.

        The Alltel trade name was not sold to AT&T Mobility LLC. Due to trade name assignment restrictions, and no planned use through continuing operations, the trade name was fully impaired. As a result, an impairment of $11.9 million was recorded as a part of the disposal and included in the net gain calculation.

        The Company also recorded $28.9 million for the minority shareholders' interests in the sold operation which is based on the estimated final distribution to the minority shareholders. In 2013 $18.9 million was distributed to minority shareholders and $10.0 million is included in non-controlling interests on its December 31, 2013 balance sheet.

        The Company has reclassified the assets and liabilities of its Alltel operations to assets of discontinued operations and liabilities of discontinued operations within its December 31, 2012 and December 31, 2013 balance sheets. Those assets and liabilities consist of the following (in thousands):

	December 31, 2012		December 31, 2013
Accounts receivable, net	$	34,225	$	—
Materials and supplies		19,047		—
Prepayments and other current assets		5,386		4,748
Property, plant and equipment, net		212,222		—
Telecommunications licenses		50,553		—
Other intangible assets		42,746		—
Other assets		16,586		—
Assets of discontinued operations	$	380,765	$	4,748
Accounts payable and accrued liabilities	$	20,486	$	11,187
Accrued taxes		3,475		—
Advance payments and deposits		11,435		—
Other current liabilities		27,440		—
Other liabilities		11,074		—
Liabilities of discontinued operations	$	73,910	$	11,187

        Revenues and income from discontinued operations related to the Alltel business for the years ended December 31, 2011, 2012 and 2013 were as follows (in thousands):

	Year Ended December 31,
	2011		2012		2013
Revenue from discontinued operations	$	496,390	$	464,382	$	299,519
Income from discontinued operations, net of tax expense (benefit) of $1,967, $13,816 and $2,512 respectively		10,222		29,202		5,166