FRONTIER COMMUNICATIONS CORP | 2013 | FY | 3


 

(6)   Goodwill and Other Intangibles:

The components of goodwill by the reporting units in effect as of December 31, 2013 are as follows:

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

 

    

 

 

 

Central

 

$

1,815,498 

East

 

 

2,003,574 

National

 

 

1,218,113 

West

 

 

1,300,534 

Total Goodwill

 

$

6,337,719 

 

The components of other intangibles at December 31, 2013 and 2012 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

2013

 

2012

 

 

Gross Carrying Amount

 

Accumulated Amortization

 

Net Carrying Amount

 

Gross Carrying Amount

 

Accumulated Amortization

 

Net Carrying Amount

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Intangibles:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer base

 

2,427,648 

 

(1,336,852)

 

1,090,796 

 

2,427,648 

 

(1,009,045)

 

1,418,603 

Software licenses

 

 

 -

 

 

 -

 

 

 -

 

 

105,019 

 

 

(105,019)

 

 

 -

Trade name and license

 

 

124,136 

 

 

 -

 

 

124,136 

 

 

124,419 

 

 

(283)

 

 

124,136 

Total other intangibles

 

$

2,551,784 

 

$

(1,336,852)

 

$

1,214,932 

 

$

2,657,086 

 

$

(1,114,347)

 

$

1,542,739 

 

Amortization expense was $328.0 million,  $422.2 million and $521.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. Amortization expense for 2013, 2012 and 2011 of $328.0 million, $410.8 million and $465.4 million, respectively, mainly represents the amortization of intangible assets (primarily customer base) that were acquired in the 2010 Transaction based on a useful life of nine years for the residential customer base and 12 years for the business customer base, amortized on an accelerated method.  Amortization expense for 2012 and 2011 included $38.3 million and $49.1 million, respectively, for amortization associated with certain software licenses that were acquired in the 2010 Transaction and are no longer required for operations as a result of the completed systems conversions and $11.4 million and $56.3 million, respectively, for amortization associated with certain properties, each of which were fully amortized in 2012. Amortization expense, based on our current estimate of useful lives, is estimated to be approximately $285 million in 2014, $240 million in 2015, $195 million in 2016, $150 million in 2017 and $105 million in 2018.

 


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