Sprint - Nextel 2010 Annual Report Download - page 71

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In the third quarter 2010, Clearwire reported it was actively pursuing various initiatives to raise additional capital,
including discussions with a number of major shareholders and other third parties about a number of options, including
potential strategic transactions, additional debt or equity financings and/or asset sales. A special committee of Clearwire's
Board of Directors was formed to explore strategic alternatives, including transactions that may involve a sale or other
realignment of the ownership and governance of their company. In December 2010, Clearwire successfully raised $1.4 billion
in debt financing through the combination of issuance of secured and exchangeable notes. As a result of this debt issuance, as
of December 31, 2010, Clearwire no longer reported substantial doubt about its ability to continue as a going concern.
Clearwire's ability to raise sufficient additional capital in the long-term on acceptable terms, or at all, remains uncertain.
Sprint's Recoverability
Sprint's ability to recover the carrying value of $3.1 billion as of December 31, 2010 depends, in part, upon
Clearwire's ability to obtain sufficient additional funding to support its operations and its ability to successfully develop, deploy
and maintain its 4G network. As of December 31, 2010, the carrying value of Sprint's equity investment in Clearwire represents
$5.82 per share based on the assumed exchange of our Class B Common Interests for Class A common stock. The market price
of Clearwire's publicly traded stock was $5.15 per share as of December 31, 2010. Uncertainty regarding Clearwire's timing
and ability to obtain sufficient additional funding could result in significant changes to Clearwire's stock price and value. A
decline in the estimated fair value of Clearwire that would be deemed to be other-than-temporary could result in a material
impairment to the carrying value of our investment. We do not intend to sell our 54% economic interest in the foreseeable
future, and recoverability of our equity investment is not affected by short-term fluctuations in Clearwire's stock price.
Accordingly, we expect to fully recover the carrying value of our investment in Clearwire.
Summarized financial information for Clearwire is as follows:
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
December 31,
2010
(in millions)
$ 1,866
9,175
$ 687
4,484
2009
$ 3,877
7,391
$ 543
2,952
Revenues
Operating expenses
Operating loss
Net loss before non-controlling interests
Year Ended December 31,
2010
(in millions)
$ 557
(2,772)
$(2,215)
$(2,303)
2009
$ 274
(1,458)
$(1,184)
$(1,254)
2008
$ 20
(514)
$(494)
$(592)
Table of Contents SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-14