XO Communications 2010 Annual Report Download - page 66

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XO Holdings, Inc.
Notes to Consolidated Financial Statements
5. PROPERTY AND EQUIPMENT − (continued)
Revisions to the depreciable lives associated with certain fixed asset categories resulted in an increase to
depreciation expense of $4.2 million during 2009. No significant revisions were made as a result of
evaluations made in 2010 or 2008.
6. INTANGIBLE ASSETS
Intangible assets consisted of the following as of December 31, (in thousands):
2010 2009
Customer relationships ................................. $112,366 $ 112,366
Internally developed technology........................... 9,521 9,521
Acquired trade names.................................. 5,673 5,673
127,560 127,560
Less accumulated amortization ........................... (127,560) (127,560)
Broadband wireless licenses − indefinite life asset............... 7,500 27,500
XO trade name − indefinite life asset ....................... 16,662 16,662
Goodwill − indefinite life asset ........................... 1,071 1,071
$ 25,233 $ 45,233
Broadband wireless licenses are indefinite-lived assets and therefore no related periodic amortization was
recorded in any period presented in the Consolidated Statements of Operations. As discussed in Note 3, the
Company performed its annual impairment evaluation of goodwill and indefinite-lived intangible assets as of
October 1, 2010. The evaluation resulted in an impairment charge to our LMDS licenses of $20.0 million. See
Note 3, Fair Value Measurements, for further discussion.
7. ACCRUED LIABILITIES
Accrued liabilities consisted of the following current liabilities as of December 31, (in thousands):
2010 2009
Accrued compensation ................................. $ 34,587 $ 46,284
Deferred revenue..................................... 44,382 46,382
Accrued operating taxes ................................ 53,393 40,136
Accrued operating expenses ............................. 43,281 65,531
Other accrued liabilities ................................ 18,841 22,122
$194,484 $220,455
8. UNDERUTILIZED OPERATING LEASES
As of December 31, 2010, the Company had accruals recorded for the expected remaining future net cash
outflows associated with the unused or vacated space in a number of leased properties. In addition, the
accruals include the remaining impact related to the fair value determination of leases which existed at the
time of the Company’s emergence from bankruptcy on January 16, 2003. As of December 31, 2010, the
remaining liability was $13.5 million, of which $8.1 million represents a non-current liability reported in
Other long-term liabilities in the Company’s Consolidated Balance Sheet. The long-term liability is expected
to be paid over the remaining lease terms, which expire periodically through 2019.
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