Intangible Assets

Indefinite-Lived Intangible Assets

Our indefinite-lived intangible assets consists of FCC licenses, which were acquired primarily through FCC auctions and business combinations, certain of our trademarks, and goodwill. At March 31, 2016, we held 1.9 GHz, 800 MHz and 2.5 GHz FCC licenses authorizing the use of radio frequency spectrum to deploy our wireless services. As long as the Company acts within the requirements and constraints of the regulatory authorities, the renewal and extension of these licenses is reasonably certain at minimal cost. Accordingly, we have concluded that FCC licenses are indefinite-lived intangible assets. Our Sprint and Boost Mobile trademarks have also been identified as indefinite-lived intangible assets. Goodwill represents the excess of consideration paid over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations (see Note 3. Significant Transactions).

The following provides the activity of Indefinite-lived intangible assets within the consolidated balance sheets:



	March 31, 2015		Net Additions		March 31, 2016
	(in millions)
FCC licenses	$	35,952	$	86	$	36,038
Trademarks	4,035		—		4,035
Goodwill	6,575		—		6,575
	$	46,562	$	86	$	46,648



	March 31, 2014		Net Reductions					March 31, 2015
	(in millions)
FCC licenses	$	36,043	$	(91	)			$	35,952
Trademarks	5,935		(1,900		)	⁽¹	⁾	4,035
Goodwill	6,383		192			⁽²	⁾	6,575
	$	48,361	$	(1,799	)			$	46,562

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(1)	Net reduction to trademarks for the year ended March 31, 2015 of approximately $1.9 billion was related to the impairment of the Sprint trade name. See discussion below.

(2)

Net additions to goodwill for the Successor year ended March 31, 2015 of approximately $192 million were the result of purchase price allocation adjustments, which consisted of a $232 million increase recorded during the three-month period ended March 31, 2015 to correct the amount of net deferred tax liabilities recognized in connection with the SoftBank Merger and Clearwire Acquisition and a net $40 million decrease recorded during the three-months ended June 30, 2014, which is also associated with the SoftBank Merger and Clearwire Acquisition.

Assessment of Impairment

Our annual impairment testing date for goodwill and indefinite-lived intangible assets is January 1 of each year; however, we test for impairment between our annual tests if an event occurs or circumstances change that indicate that the asset may be impaired, or in the case of goodwill, that the fair value of the reporting unit is below its carrying amount. We did not record any impairment during the year ended March 31, 2016. Since the SoftBank Merger Date, actual results and expectations of net postpaid handset subscriber additions were lower than the forecasts used to allocate the purchase price to the assets acquired and liabilities assumed. During the quarter ended December 31, 2014, we determined that recoverability of the carrying amount of goodwill and the Sprint trade name should be evaluated for impairment and it was determined that the carrying value of the Sprint trade name exceeded its estimated fair value of $3.3 billion. Accordingly, during the quarter ended December 31, 2014 we recorded an impairment loss of $1.9 billion, which is included in "Impairments" in our consolidated statements of operations.

The stock price at March 31, 2016 of $3.48 was below the net book value per share price of $4.98. Subsequent to the balance sheet date, the stock price has decreased further to $3.44 at May 13, 2016. The quoted market price of our stock is not the sole consideration of fair value. Other considerations include, but are not limited to, expectations of future results and an estimated control premium.

The determination of fair value requires considerable judgment and is highly sensitive to changes in underlying assumptions. Consequently, there can be no assurance that the estimates and assumptions made for the purposes of the goodwill, spectrum and Sprint trade name impairment tests will prove to be an accurate prediction of the future. Continued, sustained declines in the Company’s operating results, future forecasted cash flows, growth rates and other assumptions, as well as significant, sustained declines in the Company’s stock price and related market capitalization could impact the underlying key assumptions and our estimated fair values, potentially leading to a future material impairment of goodwill or other indefinite-lived intangible assets.

Intangible Assets Subject to Amortization

Customer relationships are amortized using the sum-of-the-months' digits method, while all other definite-lived intangible assets are amortized using the straight line method over the estimated useful lives of the respective assets. We reduce the gross carrying value and associated accumulated amortization when specified intangible assets become fully amortized. Amortization expense related to favorable spectrum and tower leases is recognized in "Cost of services" in our consolidated statements of operations.



		March 31, 2016							March 31, 2015
	Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
		(in millions)
Customer relationships	4 to 8 years	$	6,923	$	(4,045	)	$	2,878	$	6,923	$	(2,791	)	$	4,132
Other intangible assets:
Favorable spectrum leases	23 years	881		(110		)	771		884		(71		)	813
Favorable tower leases	3 to 7 years	589		(302		)	287		589		(189		)	400
Trademarks	34 years	520		(43		)	477		520		(27		)	493
Other	4 to 10 years	83		(27		)	56		72		(17		)	55
Total other intangible assets		2,073		(482		)	1,591		2,065		(304		)	1,761
Total definite-lived intangible assets		$	8,996	$	(4,527	)	$	4,469	$	8,988	$	(3,095	)	$	5,893



	Fiscal Year 2016		Fiscal Year 2017		Fiscal Year 2018		Fiscal Year 2019		Fiscal Year 2020
	(in millions)
Estimated amortization expense	$	1,157	$	882	$	666	$	462	$	257