Notes to Consolidated Financial Statements

Note 4

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 December 31, 2008

$

61,974

 

Wireless licenses acquired (Note 2)

 

9,444

 

Capitalized interest on wireless licenses

 

730

 

Reclassifications, adjustments and other

 

(81

)

Balance at December 31, 2009

$

72,067

 

Wireless licenses acquired (Note 2)

 

178

 

Capitalized interest on wireless licenses

 

748

 

Reclassifications, adjustments and other

 

3

 

Balance at December 31, 2010

$

72,996

 

During the years ended December 31, 2010 and 2009, approximately $12.2 billion of wireless licenses were under development for commercial service for which we were capitalizing interest costs. In December 2010, a portion of these licenses were placed in service. Accordingly, approximately $3.3 billion of wireless licenses continue to be under development for commercial service.

During 2008, Verizon Wireless was the winning bidder in the FCC auction of spectrum in the 700 MHz band and paid the FCC $9.4 billion to acquire 109 licenses in the 700 MHz band.

The average remaining renewal period of our wireless license portfolio was 6.9 years as of December 31, 2010 (see Note 1, Goodwill and Other Intangible Assets – Intangible Assets Not Subject to Amortization).

Goodwill

Changes in the carrying amount of goodwill are as follows:

(dollars in millions)

 

Domestic
Wireless

 

Wireline

 

Total

 

Balance at December 31, 2008

$

1,297

 

$

4,738

 

$

6,035

 

Acquisitions (Note 2)

 

16,353

 

 

 

 

16,353

 

Reclassifications, adjustments and other

 

88

 

 

(4

)

 

84

 

Balance at December 31, 2009

$

17,738

 

$

4,734

 

$

22,472

 

Acquisitions (Note 2)

 

131

 

 

 

 

131

 

Dispositions (Note 3)

 

 

 

(614

)

 

(614

)

Reclassifications, adjustments and other

 

 

 

(1

)

 

(1

)

Balance at December 31, 2010

$

17,869

 

$

4,119

 

$

21,988

 

Reclassifications, adjustments and other in Domestic Wireless during 2009 relate to the finalization of the Rural Cellular purchase accounting.

Other Intangible Assets

The following table displays the composition of other intangible assets:

(dollars in millions)

 

At December 31, 2010

 

At December 31, 2009

 

 

Gross
Amount

 

Accumulated
Amortization

 

Net
Amount

 

Gross
Amount

 

Accumulated
Amortization

 

Net
Amount

 

Other intangible assets:

Customer lists (6 to 8 years)

$

3,150

 

$

(1,551

)

$

1,599

 

$

3,134

 

$

(1,012

)

$

2,122

 

Non-network internal-use software

(2 to 7 years)

 

8,446

 

 

(4,614

)

 

3,832

 

 

8,455

 

 

(4,346

)

 

4,109

 

Other (2 to 25 years)

 

885

 

 

(486

)

 

399

 

 

865

 

 

(332

)

 

533

 

Total

$

12,481

 

$

(6,651

)

$

5,830

 

$

12,454

 

$

(5,690

)

$

6,764

 

The amortization expense for other intangible assets was as follows:

Years

(dollars in millions)

2010

 

$

1,812

 

2009

 

 

1,970

 

2008

 

 

1,383

 

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

Years

(dollars in millions)

2011

 

$

1,656

 

2012

 

 

1,335

 

2013

 

 

1,100

 

2014

 

 

729

 

2015

 

 

512