Sprint - Nextel 2013 Annual Report Download - page 135

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
New Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (FASB) issued authoritative guidance regarding Disclosures about Offsetting Assets
and Liabilities, which requires common disclosure requirements to allow investors to better compare and assess the effect of offsetting arrangements on
financial statements prepared under U.S. GAAP with financial statements prepared under IFRS. The standard was effective beginning in the first quarter 2013,
requires retrospective application, and only affects disclosures in the footnotes to the financial statements. In October 2012, the FASB tentatively decided to
limit the scope of this authoritative guidance to derivatives, repurchase agreements, and securities lending and securities borrowing arrangements. In January
2013, the FASB issued additional clarifying guidance which limited the scope of the disclosure requirements to derivatives, repurchase agreements and reverse
purchase agreements, and securities lending and securities borrowing transactions that are either offset in accordance with specific criteria contained in U.S.
GAAP or subject to a master netting arrangement or similar agreement. Based on the scope revision, this authoritative guidance did not impact our existing
disclosures.
In February 2013, the FASB issued authoritative guidance regarding Comprehensive Income: Reporting of Amounts Reclassified Out of
Accumulated Other Comprehensive Income, which amends existing guidance and requires, in a single location, the presentation of the effects of certain
significant amounts reclassified from each component of accumulated other comprehensive income based on its source and Statement of Comprehensive (Loss)
Income line items affected by the reclassification. The guidance was effective beginning in the first quarter 2013 and did not have a material effect on our
consolidated financial statements as amounts reclassified out of other comprehensive income (loss), consisting primarily of the recognition of periodic pension
costs and realized holding gains and losses, are immaterial for all periods presented.
In July 2013, the FASB issued authoritative guidance regarding Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a
Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force), which
amends existing guidance related to the financial presentation of unrecognized tax benefits by requiring an entity to net its unrecognized tax benefits against the
deferred tax assets for all available same - jurisdiction loss or other tax carryforwards that would apply in settlement of the uncertain tax positions. The
amendments will be effective beginning in the first quarter of 2014 with early adoption permitted, will be applied prospectively to all unrecognized tax benefits
that exist at the effective date, and are not expected to have a material effect on our consolidated financial statements.
Acquisition of Assets from U.S. Cellular
On November 6, 2012, Sprint Communications entered into a definitive agreement with United States Cellular Corporation (U.S. Cellular) to acquire
personal communications services (PCS) spectrum and subscribers in parts of Illinois, Indiana, Michigan, Missouri and Ohio, including the Chicago and St.
Louis markets, for
$480 million in cash. Sprint Communications agreed, in connection with the acquisition, to reimburse U.S. Cellular for certain network shut -
down costs in these markets. These costs are expected to be approximately $160 million on a net present value basis, but in no event will Sprint Communications'
reimbursement obligation exceed
$200 million on an undiscounted basis. The additional spectrum will be used to supplement Sprint's coverage in these areas. In
addition, Sprint Communications and U.S. Cellular entered into transition services agreements for services to be provided by U.S. Cellular during the period after
closing and prior to the transfer of the acquired subscribers to Sprint's network. The transaction closed on May 17, 2013. Of the total purchase price,
approximately
$605 million and $32 million was allocated to spectrum and customer relationships, respectively.
Acquisition of Remaining Interest in Clearwire
On July 9, 2013 (Clearwire Acquisition Date), Sprint Communications completed the Clearwire Acquisition. Immediately prior to the completion of the
Clearwire Acquisition, Sprint Communications owned
739,010,818 shares of Clearwire Common Stock representing approximately 50.1% of a non - controlling
voting interest of the total issued and outstanding common stock. As a result of the Clearwire Acquisition, each share of
F - 17
Note 3.
Significant Transactions