Severance, Exit Costs and Asset Impairments

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

Severance, Exit Costs and Asset Impairments [Text Block]


Note 10.	Severance, Exit Costs and Asset Impairments

Severance and Exit Costs Activity

For the three-month period ended March 31, 2013, we recognized costs of $8 million solely attributable to our Wireless segment, primarily related to lease exit costs associated with taking certain Nextel platform sites off-air in 2012, for which we no longer expect to receive any economic benefit. We also recognized $17 million ($14 million Wireless; $3 million Wireline) of severance related primarily to selective reductions in force. In addition, for the three-month period ended March 31, 2013, we recognized costs of $7 million ($4 million Wireless; $3 million Wireline) in "Cost of services and products" related to payments that will continue to be made under our backhaul access contracts for which we will no longer be receiving any economic benefit. We did not recognize any severance or exit costs in the three-month period ended March 31, 2012. Based on management's network modernization plan, and subject to change based upon completion of proposed business transactions and acquisitions (see Note 3), we expect to incur significant additional exit costs in the future as we continue to take Nextel platform sites off-air and transition our existing backhaul architecture to a replacement technology for our remaining network sites. We estimate the amount of lease exit costs to be recognized in future periods for sites estimated to be taken off-air as well as other costs associated with executory contracts, such as backhaul access contracts, which will have no future economic benefit to be approximately $500 to $600 million during 2013, depending upon the timing and remaining expected contractual payments.

The following provides the activity in the severance and exit costs liability included in "Accounts payable", "Accrued expenses and other current liabilities" and "Other liabilities" within the consolidated balance sheets:



			2013 Activity
	December 31, 2012		Net Expense		Cash Payments and Other			March 31, 2013
	(in millions)
Lease exit costs	$	190	$	8	$	(31	)	$	167
Severance costs	11		17		(6		)	22
Access exit costs	43		7		(1		)	49
	$	244	$	32	$	(38	)	$	238

Asset Impairments

There were no items recorded as asset impairments in the three-month period ended March 31, 2013. For the three-month period ended March 31, 2012, we recorded asset impairments of $84 million of construction in progress costs consisting of $18 million associated with a decision to utilize fiber backhaul, which we expect to be more cost effective, rather than microwave backhaul and $66 million of capitalized assets that we no longer intend to deploy as a result of the termination of the spectrum hosting arrangement with LightSquared in the first quarter 2012.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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