Acquisitions (Tables)

6 Months Ended

Jun. 30, 2017

The following table summarizes the final purchase price allocation to assets acquired and liabilities assumed, including measurement period adjustments:



	Initial Estimate		Measurement Period Adjustments			Purchase Price Allocation
Accounts receivable	$	48,476	$	(1,242	)	47,234
Inventory	3,810		762			4,572
Restricted cash	2,167		—			2,167
Investments	1,501		—			1,501
Prepaid expenses and other assets	14,835		—			14,835
Building held for sale	4,950		—			4,950
Property, plant and equipment	223,900		3,347			227,247
Spectrum licenses (1), (2)	198,200		—			198,200
Acquired subscribers - wireless (1), (2)	198,200		7,746			205,946
Favorable lease intangible assets (2)	11,000		6,029			17,029
Goodwill (3)	151,627		(5,244		)	146,383
Other long term assets	10,288		555			10,843
Total assets acquired	$	868,954	$	11,953		$	880,907

Accounts payable	8,648		(105		)	8,543
Advanced billings and customer deposits	12,477		—			12,477
Accrued expenses	25,230		(2,089		)	23,141
Capital lease liability	418		—			418
Deferred tax liabilities	124,964		4,327			129,291
Retirement benefits	19,461		(263		)	19,198
Other long-term liabilities	14,056		6,029			20,085
Total liabilities assumed	$	205,254	$	7,899		$	213,153

Net assets acquired	$	663,700	$	4,054		$	667,754

(1)

Concurrently with acquiring nTelos, the Company completed its previously announced transaction with SprintCom, Inc., a subsidiary of Sprint. Pursuant to this transaction, among other things, the Company exchanged spectrum licenses, valued at $198.2 million and acquired subscribers - wireless, valued at $206.0 million, acquired from nTelos with Sprint, and received an expansion of its affiliate service territory to include most of the service area served by nTelos, valued at $283.3 million, as well as additional acquired subscribers - wireless, valued at $120.9 million, relating to nTelos’ and Sprint’s legacy customers in the Company’s affiliate service territory. These exchanges were accounted for in accordance with ASC 845, “Nonmonetary Transactions”. The transfer of spectrum to Sprint resulted in a taxable gain to the Company which will be recognized as the Company recognizes the cash benefit of the waived management fees over the remaining approximately five years.


(2)	Identifiable intangible assets were measured using a combination of an income approach and a market approach.

(3)

Goodwill is the excess of the consideration transferred over the net assets recognized and represents the future economic benefits, primarily as a result of other assets acquired that could not be individually identified and separately recognized. The Company has recorded goodwill in its Wireless segment as a result of the nTelos acquisition. Goodwill is not amortized. The goodwill that arose from the acquisition of nTelos is not deductible for tax purposes.

Schedule of Pro Forma Results

The following table presents pro forma information, based on estimates and assumptions that the Company believes to be reasonable, for the Company as if the acquisition of nTelos had occurred at the beginning of 2016: (in millions)



	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
Operating revenues	$	161.1		$	334.4
Income (loss) before income taxes	$	(7.5	)	$	9.4

Schedule of Acquisition Related Costs

The Company has incurred these costs as follows:



	Three Months Ended June 30,		Six Months Ended June 30,
Statement of Operations location:	2017	2016	2017	2016
Cost of goods and services	0.4	0.3	1.2	0.3
Selling, general and administrative	1.3	2.0	3.1	2.0
Integration and acquisition	3.7	20.1	8.2	20.4
Total	5.4	22.4	12.5	22.7

Schedule of Intangible Assets Acquired

The following table summarizes the preliminary allocation of the fair values of the assets acquired:



	Estimated Useful Life	April 6, 2017
Affiliate contract expansion	13	$	3,843
Acquired subscribers - wireless	2 - 7 years	2,157
Total		$	6,000

Intangible assets resulting from the acquisition of nTelos and the Sprint exchange, both described above, are noted below (in thousands):



	Useful Life	Basis
Affiliate contract expansion	14 years	$	283,302
Acquired subscribers - wireless	4-10 years	$	120,855
Favorable lease intangible assets	3-19 years	$	17,029