Sprint - Nextel 2011 Annual Report Download - page 112

Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Information about operating segments is based on our internal organization and reporting of revenue and operating income (loss) based upon internal accounting
methods. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief
operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief
Executive Officer.
We operate with a single reportable segment as a provider of 4G wireless broadband services in the United States. Prior to June 30, 2011, we had identified two
reportable segments: the United States and the international operations. As a result of a strategic decision to focus investment in the United States market, during the
second quarter of 2011, we committed to sell our operations in Belgium, Germany and Spain, which principally represent our remaining international operations. Our goal
is to complete these sales within one year and as a result, substantially all of the international operations' assets and liabilities have been classified and accounted for as
held for sale and reported as discontinued operations. Subsequent to June 30, 2011, our remaining international assets are comprised primarily of investments in
international affiliates and notes receivable.
The assets or asset group of the discontinued operations are measured at the lower of its carrying amount or fair value less cost to sell. The fair value of the assets or
asset group is calculated based on information from initial negotiations. Net loss from discontinued operations for the year ended December 31, 2011 included $59.8
million of charges associated with adjusting the carrying value of the assets or asset group to fair value less cost to sell and impairment charges recorded prior to assets
being classified as held for sale. Net loss from discontinued operations during the years ended December 31, 2010 included $10.4 million of impairment charges. No
impairment charges were recorded to discontinued operations during the year ended December 31, 2009. See Note 18, Discontinued Operations, for further discussion.
Unless otherwise indicated, information in these notes to consolidated financial statements relates to continuing operations.
Our international subsidiaries generally use their local currency as their functional currency. Assets and liabilities are translated at exchange rates in effect at the
balance sheet date. Resulting translation adjustments are recorded within accumulated other comprehensive income (loss). Income and expense accounts are translated at
the average monthly exchange rates. The effects of changes in exchange rates between the designated functional currency and the currency in which a transaction is
denominated are recorded as foreign currency transaction gains (losses) and recorded in Net loss from discontinued operations attributable to Clearwire Corporation on
the consolidated statement of operations.
Use of Estimates - Preparing financial statements in conformity with U.S. GAAP requires 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,
including judgments about when an impairment indicator may or may not have occurred and estimates of the fair value of our spectrum licenses, the recoverability and
determination of useful lives for long-lived assets, which include property, plant and equipment and other intangible assets, tax valuation allowances, determination of
sublease rentals in the computation of cease-to-use tower operating lease liability and valuation of derivatives.
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 non-
current 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 primarily of U.S. Government and Agency Issues. 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
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