US Cellular 2015 Annual Report Download - page 90

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Goodwill
U.S. Cellular Wireline Cable HMS Other Total
(Dollars in thousands)
Balance at December 31, 20131. $ 232,041 $ 420,458 $ 61,712 $ 118,830 $ 3,802 $ 836,843
Acquisitions ............ – – 33,610 – – 33,610
Loss on impairment ....... – – – (84,000) (3,802) (87,802)
Divestitures ............ (291) (2,564) – – – (2,855)
Transferred to Assets held for
sale ............... (4,344) (4,100) – – – (8,444)
Balance at December 31, 2014 . 227,406 413,794 95,322 34,830 – 771,352
Divestitures ............ – (5,005) – – – (5,005)
Other ................ (555) ––––(555)
Balance at December 31, 2015 . $ 226,851 $ 408,789 $ 95,322 $ 34,830 $ – $ 765,792
1Includes accumulated impairment losses in prior periods as follows: $333.9 million for U.S. Cellular, $29.4 million for Wireline and $0.5 million for Other.
Interim Goodwill Impairment Assessment
During the third quarter of 2014, due to a decline in projected revenue and earnings of TDS Telecom’s HMS reporting
unit compared with previously projected results, TDS determined that an interim impairment test of HMS Goodwill was
required.
As of August 1, 2014, the carrying value of the HMS reporting unit exceeded its fair value; therefore, a Step 2 Goodwill
impairment test was performed. The second step compared the implied fair value of the reporting unit Goodwill to the
carrying amount of that Goodwill. To calculate the implied fair value of Goodwill in this second step, TDS allocated the
fair value of the reporting unit to all of the assets and liabilities of that reporting unit (including any unrecognized
intangible assets) as if the reporting unit had been acquired in a business combination and the fair value was the price
paid to acquire the reporting unit. The excess of the fair value of the reporting unit over the amount assigned to the
assets and liabilities of the reporting unit was the implied fair value of Goodwill. Since the carrying amount of Goodwill
exceeded the implied fair value of Goodwill, an impairment loss was recognized for that difference. As a result of the
Step 2 Goodwill impairment test, TDS recognized a loss on impairment of $84.0 million during the third quarter of 2014.
Franchise Rights
Cable
(Dollars in thousands)
Balance at December 31, 2013 ...................................................... $ 123,668
Acquisitions ................................................................. 120,979
Other ..................................................................... (347)
Balance at December 31, 2014 ...................................................... 244,300
Other ..................................................................... (120)
Balance at December 31, 2015 ...................................................... $ 244,180
82
TELEPHONE AND DATA SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS