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Discontinued Operations
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2011
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| Notes to Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note 8 - Discontinued Operations |
Note 8 — Discontinued Operations
On December 27, 2011, after the close of the first fiscal quarter, the Company completed the sale of substantially all of its 700 MHz spectrum for $1.9 billion. As a result, the Company will recognize a gain in discontinued operations of $1.2 billion in the second quarter of fiscal 2012 related to the close of this transaction. The FLO TV business and network were shut down on March 27, 2011. Since then, the Company has been working to sell the remaining assets and exit contracts. The 700 MHz spectrum is classified as held for sale. All other assets were considered disposed of at December 25, 2011. Accordingly, the results of operations of the FLO TV business are presented as discontinued operations. Loss from discontinued operations includes share-based payments and excludes certain general corporate expenses allocated to the FLO TV business during the periods presented.
Summarized results from discontinued operations were as follows (in millions):
At December 25, 2011, total assets and liabilities of the discontinued operations in the condensed consolidated balance sheet were $901 million and $225 million, respectively. The assets primarily consisted of the spectrum held for sale of $746 million and capital lease assets of $130 million. Liabilities primarily consisted of capital lease liabilities of $149 million. The Company has a significant number of site leases, and the Company has corresponding capital lease assets, capital lease liabilities and asset retirement obligations (Note 6). The capital lease assets, included in property, plant and equipment, net, were considered disposed of at March 27, 2011 when the Company shut down the FLO TV business.
Restructuring activities under the Company’s plan related to discontinued operations were initiated in the fourth quarter of fiscal 2010 and are expected to be substantially complete by the end of fiscal 2012 as the Company continues to negotiate the exit of certain contracts and removes certain of its equipment from the network sites. Restructuring charges primarily consist of lease exit and other contract termination costs and certain severance costs. The Company estimates that it will incur future restructuring charges of up to $20 million. The Company may also realize certain gains, primarily due to the potential release of liabilities associated with ongoing efforts to exit certain contracts, the amount of which cannot be reasonably estimated at this time. The restructuring liability, which is reported as a component of other liabilities, consisted of contract termination costs of $37 million and other costs of $3 million at December 25, 2011. During the three months ended December 25, 2011, the Company made payments on amounts previously accrued of $3 million. Future cash expenditures are expected to be in the range of $70 million to $110 million.
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