Sprint - Nextel 2008 Annual Report Download - page 138

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table provides a reconciliation of the beginning and ending balances for the major classes of
assets and liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands):
Level 3
Financial Assets
Level 3
Financial Liabilities
Balance at January 1, 2008 .............................. $ — $ —
Balances acquired from Old Clearwire ..................... 36,011 (15,519)
Total losses for 2008 included in net loss(1) ................. (17,037) (6,072)
Balance at December 31, 2008 ........................... 18,974 (21,591)
Total gains (losses) for 2009 included in:
Net loss(1) ......................................... (10,015) 6,939
Other comprehensive income .......................... 4,212 —
Settlements ........................................... — 14,652
Balance at December 31, 2009 ........................... $13,171 $ —
Net unrealized losses included in net loss for 2009 relating to
financial assets held at December 31, 2009 ................ $(10,015) $ —
(1) Included in Other income (expense), net in the consolidated statements of operations.
The following is the description of the fair value for financial instruments we hold that are not subject to fair
value recognition.
Notes Receivable
Notes receivable with a carrying value of $5.4 million and a fair value of $1.7 million were outstanding at
December 31, 2009. Notes receivable with a carrying value of $4.8 million and a fair value of $1.2 million were
outstanding at December 31, 2008. The notes receivable are not publicly traded. The fair value of these notes is
estimated based on the fair value of the underlying collateral.
Debt Instruments
Senior Secured Notes and Rollover Notes with a carrying value of $2.71 billion and an approximate fair
value of $2.81 billion were outstanding at December 31, 2009. To estimate fair value of these notes we used the
average indicative price from several market makers.
A Senior Term Loan Facility with a carrying value and an approximate fair value of $1.36 billion was
outstanding at December 31, 2008. The Senior Term Loan Facility was not publicly traded. To estimate fair
value of the Senior Term Loan Facility, we used an income approach whereby we estimated contractual cash
flows and discounted the cash flows at a risk-adjusted rate. The inputs included the contractual terms of the
Senior Term Loan Facility and market-based parameters such as interest rate forward curves. A level of
subjectivity and judgment was used to estimate credit spread. The Senior Term Loan Facility was retired in the
fourth quarter of 2009.
F-72