
Note 8.	Severance, Exit Costs and Asset Impairments

Liabilities for severance and exit costs are recognized based upon the nature of the cost to be incurred. For involuntary separation plans that are completed within the guidelines of our written involuntary separation plan, a liability is recognized when it is probable and reasonably estimable. For voluntary separation plans (VSP) a liability is recognized when the VSP is irrevocably accepted by the employee. For one-time termination benefits, such as additional severance pay or benefit payouts, and other exit costs, such as lease termination costs, the liability is measured and recognized initially at fair value in the period in which the liability is incurred, with subsequent changes to the liability recognized as adjustments in the period of change. Severance and exit costs associated with business combinations are recorded in the results of operations when incurred.

Severance and Exit Costs Activity

During 2011, we recognized $28 million ($25 million Wireless; $3 million Wireline) in severance costs associated with actions in the fourth quarter of 2011. During 2010, we recognized costs of $8 million ($11 million Wireless; offset by a benefit of $3 million Wireline) primarily related to an increase in exit costs incurred in the second and fourth quarter 2010 associated with vacating certain office space which was no longer being utilized, partially offset by a reduction in the estimate of total severance costs associated with our workforce reduction announced in November 2009. During 2009, we recognized $400 million ($307 million Wireless; $93 million Wireline) of severance and exit costs related primarily to the reduction in workforce announcements in 2009.

The following provides the activity in the severance and exit costs liability included in “Accrued expenses and other current liabilities” within the consolidated balance sheets:



			2011 Activity
	December 31, 2010		Net Expense (Benefit)			Cash Payments and Other			December 31, 2011
	(in millions)
Exit costs	$	87	$	—		$	(29	)	$	58
Severance costs	7		28			(14		)	21
	$	94	$	28		$	(43	)	$	79

			2010 Activity
	December 31, 2009		Net Expense			Cash Payments and Other			December 31, 2010
	(in millions)
Exit costs	$	89	$	25		$	(27	)	$	87
Severance costs	110		(17		)	(86		)	7
	$	199	$	8		$	(113	)	$	94

			2009 Activity
	December 31, 2008		Net Expense			Cash Payments and Other			December 31, 2009
	(in millions)
Exit costs	$	113	$	38		$	(62	)	$	89
Severance costs	90		362			(342		)	110
	$	203	$	400		$	(404	)	$	199

Asset Impairments

In 2011, 2010, and 2009, we recorded asset impairments of $78 million, $125 million, and $47 million, respectively, primarily related to network asset equipment in our Wireless segment, no longer necessary for management's strategic plans.