Sprint - Nextel 2008 Annual Report Download - page 84

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Common Interests”). Sprint agreed to contribute $1.176 billion in three installments in exchange for
approximately 160.4 million Class B Common Interests. During the fourth quarter 2009, Sprint’s net investment
increased by approximately $1.1 billion in exchange for 155 million shares of Class B Common Interests.
Sprint’s final installment of $50 million is expected to be contributed in the first quarter 2010 upon Clearwire’s
satisfaction of certain closing conditions. In conjunction with Sprint’s additional contribution, we refinanced our
note receivable from Clearwire which extended the maturity date to December 2015, fixed the interest rate at
12% and increased the face amount to $184 million.
As a result of these transactions, Sprint owns a 56% non-controlling interest in Clearwire, in the form of
525 million shares of Class B common stock in Clearwire Corporation and 525 million Class B common interests
in Clearwire Communications LLC, as of December 31, 2009 for which the carrying value totaled $4.3 billion.
Each share of Clearwire Corporation Class B common stock, together with one Clearwire Communications LLC
Class B common interest, is exchangeable for one share of Clearwire Corporation’s Class A common stock, a
publicly traded security. Sprint’s investment in Clearwire represents $8.25 per share based on the assumed
exchange of our Class B common interests for Class A common shares. The market price of Clearwire’s publicly
traded stock was $6.76 per share as of December 31, 2009. Sprint’s investment in Clearwire is part of our long-
term plan to participate in the 4G wireless broadband market, and to benefit from Clearwire’s advantaged
position in that market. Clearwire is continuing to execute its business plan, including building its 4G wireless
broadband network, and Clearwire, Sprint and other investors are beginning to offer 4G products utilizing that
network. Sprint does not intend to sell this investment in the foreseeable future, and recoverability of our
investment is not affected by short-term fluctuations in Clearwire’s stock price. Sprint continues to believe the
decline in Clearwire’s stock price is temporary and expects to recover fully the carrying value of the investment.
Summarized financial information for Clearwire is as follows:
December 31,
2009 2008
(in millions)
Current assets ...................................... $3,877 $3,166
Noncurrent assets ................................... 7,391 5,958
Current liabilities .................................... $ 543 $ 171
Noncurrent liabilities ................................. 2,952 1,450
Year Ended December 31,
2009 2008 2007
(in millions)
Revenues .................................. $ 274 $ 20 $—
Operating expenses .......................... (1,458) (514) (212)
Operating loss ............................... $(1,183) $(493) $(212)
Net loss .................................... $(1,254) $(592) $(225)
F-18