Cincinnati Bell 2012 Annual Report Download - page 162

During the year ended December 31, 2012, an asset impairment loss of $11.8 million was recognized in the
Data Center Colocation segment on certain leasehold improvements at data centers acquired in the GramTel
acquisition. Also during 2012, asset impairment losses of $0.4 million and $0.5 million were recognized in the
Wireless and Wireline segments, respectively. The Wireless impairment loss was associated with abandoned
assets that have no resale market, and the Wireline impairment loss was associated with an out-of-territory fiber
network. During 2011, asset impairment losses of $1.1 million and $1.0 million were recognized in the Wireless
and Wireline segments, respectively, on abandoned assets that had no resale market. No asset impairment losses
were recognized in 2010.
As of December 31, 2012 and 2011, buildings and leasehold improvements, network equipment, and office
software, furniture, fixtures and vehicles include $244.1 million and $222.7 million, respectively, of assets
accounted for as capital leases or financing arrangements. Amortization of capital lease assets is included in
“Depreciation and amortization” in the Consolidated Statements of Operations.
6. Goodwill and Intangible Assets
Goodwill
At December 31, 2012 and 2011, the gross value of goodwill was $340.9 million. Accumulated impairment
losses were $50.3 million at December 31, 2012 and 2011.
The changes in the carrying amount of goodwill, net of accumulated impairment losses, for the years ended
December 31, 2012 and 2011 are as follows:
(dollars in millions) Wireless Wireline
Data Center
Colocation
IT
Services and
Hardware Total
Balance as of December 31, 2010 ................... $50.3 $12.6 $276.3 $2.5 $341.7
Impairment ..................................... (50.3) — — — (50.3)
Disposition of home security business assets ........... — (0.8) — — (0.8)
Balance as of December 31, 2011 ................... — 11.8 276.3 2.5 290.6
Impairment ..................................... — — — — —
Balance as of December 31, 2012 ................... $ — $11.8 $276.3 $2.5 $290.6
In 2011, we recognized a goodwill impairment loss in the Wireless business segment. The impairment loss
arose from declines in revenues and wireless subscribers. See Note 9 for further information on how fair value of
the reporting unit was estimated.
In 2011, we sold substantially all the assets of our home security monitoring business for a gain of $8.4
million. Goodwill of $0.8 million was associated with the assets sold and included within “Gain on sale or
disposal of assets” in the Consolidated Statements of Operations. This business was historically included within
the Wireline segment.
Intangible Assets Not Subject to Amortization
As of December 31, 2012 and 2011, intangible assets not subject to amortization consist solely of FCC
wireless spectrum licenses with a carrying value of $88.2 million. These licenses are subject to renewal every 10
years for a nominal fee. The next renewal date is in 2015.
Intangible Assets Subject to Amortization
Intangible assets subject to amortization consist of customer relationships, trademarks and a favorable
leasehold interest. For the year ended December 31, 2012, an impairment loss of $1.5 million was recognized by
the Data Center Colocation segment on a customer relationship intangible that was obtained with the 2007
GramTel acquisition. No impairments were recognized on intangible assets subject to amortization in 2011 or
2010.
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Form 10-K Part II Cincinnati Bell Inc.