Sprint - Nextel 2012 Annual Report Download - page 138

Table of Contents
SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Clearwire to an estimate of fair value and a pre
- tax dilution loss of $27 million for the year ended December 31, 2011 .
As of
December 31, 2012 , our proportionate share of the underlying net assets of Clearwire exceeds the carrying value of our equity
investment by approximately
$275 million , which is primarily related to our non - cash impairments recognized in current and prior periods.
Summarized financial information for Clearwire is as follows:
Sprint's Recoverability
At each financial reporting measurement date, we evaluate the excess, if any, of Sprint's carrying value over the estimated fair value of our
investment in Clearwire to determine if such excess, an implied unrealized loss, is other
- than - temporary. Our evaluation considers, among other things,
both observable and unobservable inputs, including Clearwire's market capitalization, historical volatility associated with Clearwire's common stock,
the duration of a decline in Clearwire's average trading stock price below Sprint's carrying value, potential tax benefits, governance rights associated
with our non
- controlling voting interest, and our expectation of the duration of our ongoing relationship, as well as other factors. The determination of
an estimate of fair value for a non - public security, such as our non - controlling economic interest, is subject to significant judgment and uncertainty.
Clearwire Related
- Party Transactions
Sprint's equity method investment in Clearwire includes agreements by which we resell wireless data services utilizing Clearwire's 4G
network. In addition, Clearwire utilizes the third generation (3G) Sprint network to provide dual
- mode service to its customers in those areas where
access to a 4G WiMAX network is not available. Amounts included in our consolidated balance sheets related to our agreement to purchase 4G
WiMAX services from Clearwire as of
December 31, 2012 and 2011 totaled $78 million and $5 million , respectively, for prepaid expenses and other
current assets and
$79 million and $77 million , respectively, for accounts payable, accrued expense and other current liabilities. Cost of services and
products included in our consolidated statements of comprehensive loss related to our agreement to purchase 4G WiMAX services from Clearwire
totaled
$417 million and $405 million for the year ended December 31, 2012 and 2011 , respectively, and was immaterial for the year ended December 31,
2010.
F - 17
December 31,
2012
2011
(in millions)
Current assets
$
988
$
1,287
Noncurrent assets
6,678
7,556
Current liabilities
$
405
$
280
Noncurrent liabilities
5,379
4,917
Year Ended December 31,
2012
2011
2010
(in millions)
Revenues
$
1,265
$
1,254
$
535
Operating expenses
(2,644
)
(3,645
)
(2,698
)
Operating loss
$
(1,379
)
$
(2,391
)
$
(2,163
)
Net loss from continuing operations before non - controlling interests
$
(1,744
)
$
(2,856
)
$
(2,251
)
Net loss from discontinued operations before non - controlling interests
$
(168
)
$
(82
)
$
(52
)