Sprint - Nextel 2010 Annual Report Download - page 100

even if that attribution results in a deficit non-controlling interest balance. See Note 14, Stockholders’ Equity, for further
information.
Reclassifications — During 2010 we reclassified losses from abandonment and impairment of network and other assets
from Cost of goods and services and network costs to a separate line item in the consolidated statements of operations. We also
reclassified costs associated with ongoing maintenance of network assets that have been deployed from Selling, general and
administrative expense to Cost of goods and services and network costs. Additionally, we reclassified certain amounts from
Accounts payable and accrued expenses to Other current liabilities. To conform with the 2010 presentation, certain
reclassifications have been made to the prior period amounts.
Use of Estimates — Our accounting policies require management to make complex and subjective judgments. By their
nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical
experience, terms of existing contracts, observance of trends in the industry, information provided by our subscribers and
information available from other outside sources, as appropriate. Additionally, changes in accounting estimates are reasonably
likely to occur from period to period. These factors could have a material impact on our financial statements, the presentation
of our financial condition, changes in financial condition or results of operations.
Significant estimates inherent in the preparation of the accompanying financial statements include: impairment analysis
of spectrum licenses with indefinite lives, the recoverability and determination of useful lives for long-lived assets, which
include property, plant and equipment and other intangible assets, tax valuation allowances, and valuation of derivatives.
Subsequent Events — We evaluated subsequent events occurring through the date the financial statements were issued.
Cash and Cash Equivalents — Cash equivalents consist of money market mutual funds and highly liquid short-term
investments with original maturities of three months or less. Cash equivalents are stated at cost, which approximates market
value. Cash and cash equivalents exclude cash that is contractually restricted for operational purposes. We maintain cash and
cash equivalent balances with financial institutions that exceed federally insured limits. We have not experienced any losses
related to these balances, and management believes the credit risk related to these balances to be minimal.
Restricted Cash — Restricted cash consists primarily of amounts we have set aside to satisfy certain contractual
obligations and is classified as a current or noncurrent asset based on its designated purpose. The majority of this restricted cash
has been designated to satisfy certain vendor contractual obligations.
Investments — We have an investment portfolio comprised of U.S. Government and Agency Issues and other debt
securities. The value of these securities is subject to market and credit volatility during the period the investments are held and
until their sale or maturity. We classify marketable debt securities as available-for-sale investments and these securities are
stated at their estimated fair value. Our investments that are available for current operations are recorded as short-term
investments when the original maturities are greater than three months but remaining maturities are less than one year. Our
investments with maturities of more than one year are recorded as long-term investments. Unrealized gains and losses are
recorded within accumulated other comprehensive income (loss). Realized gains and losses are measured and reclassified from
accumulated other comprehensive income (loss) on the basis of the specific identification method.
We recognize realized losses when declines in the fair value of our investments below their cost basis are judged to be
other-than-temporary. In determining whether a decline in fair value is other-than-temporary, we consider various factors
including market price (when available), investment ratings, the financial condition and near-term prospects of the issuer, the
length of time and the extent to which the fair value has been less than the cost basis, and our intent and ability to hold the
investment until maturity or for a period of time sufficient to allow for
Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
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