Sprint - Nextel 2011 Annual Report Download - page 130

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Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
We use a trinomial option pricing model to estimate the fair value of the Exchange Options. The inputs include the contractual terms of the instrument and market-
based parameters such as interest rate forward curves, stock price and dividend yield. A level of subjectivity is applied to estimate our stock price volatility input. The
stock price volatility is based on our historical stock price volatility giving consideration to our estimates of market participant adjustments for general market conditions
as well as company-specific factors such as market trading volume and our expected future performance.
The following table summarizes our financial assets and liabilities by level within the valuation hierarchy at December 31, 2011 (in thousands):
The following table summarizes our financial assets and liabilities by level within the valuation hierarchy at December 31, 2010 (in thousands):
F-63
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3) Total
Fair Value
Financial assets:
Cash and cash equivalents $ 891,929 $
—
$
—
$ 891,929
Short-term investments $ 215,655 $
—
$
—
$ 215,655
Long-term investments $
—
$
—
$
—
$
—
Other assets — derivative warrant assets $
—
$
—
$209 $209
Financial liabilities:
Other current liabilities — derivative liabilities (Exchange Options) $
—
$
—
$ (8,240) $ (8,240)
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3) Total
Fair Value
Financial assets:
Cash and cash equivalents $ 1,230,242 $
—
$
—
$ 1,230,242
Short-term investments $ 502,316 $
—
$
—
$ 502,316
Long-term investments $
—
$
—
$ 15,251 $ 15,251
Other assets — derivative warrant assets $
—
$
—
$292 $292
Financial liabilities:
Other current liabilities — derivative liabilities (Exchange Options) $
—
$
—
$ (167,892) $ (167,892)