Sprint - Nextel 2013 Annual Report Download - page 140

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pro Forma Financial Information
The following unaudited pro forma consolidated results of operations assume that the SoftBank Merger and Clearwire Acquisition were completed
as of January 1, 2012 for
2013 and 2012 , respectively.
The unaudited pro forma financial information was prepared to illustrate the pro forma effect of the combination of Sprint, Sprint Communications
and Clearwire using the consideration transferred as of each acquisition date as though the acquisition date for each transaction occurred on January 1, 2012.
The preparation of the pro forma financial information also assumed a preliminary purchase price allocation of the consideration transferred among the assets
acquired and liabilities assumed for each acquiree. The pro forma financial information adjusts the actual combined results for items that are recurring in nature
and directly attributable to the Clearwire Acquisition and SoftBank Merger. The pro forma net loss provided excludes certain non
- recurring items such as
Sprint's gain on its previously held interest in Clearwire and transaction costs associated with the Clearwire Acquisition and SoftBank Merger. As a result, the
pro forma financial information presented above excludes a net gain of
$1.4 billion (See Note 4. Investments) and acquisition related costs of approximately $169
million .
This pro forma financial information has been prepared based on estimates and assumptions, which management believes are reasonable, and is not
necessarily indicative of the consolidated financial position or results of operations that Sprint would have achieved had the Clearwire Acquisition and/or the
SoftBank Merger actually occurred at January 1, 2012 or at any other historical date, nor is it reflective of our expected actual financial positions or results of
operations for any future period.
The components of investments were as follows:
The bond investment, together with the bond derivative, for the Successor period relate to the convertible bond issued by Sprint Communications,
Inc. (See Note 8. Long
- term debt, financing and capital lease obligations) to Starburst II in connection with the Bond Agreement (See Note 3. Significant
Transactions), which was accounted for as an available
- for - sale investment carried at its estimated fair value by Starburst II.
Marketable equity securities
Investments in marketable equity securities are recognized at fair value and are considered available
- for - sale securities. Accordingly, unrealized
holding gains and losses on these securities are recognized in accumulated other comprehensive loss, net of related income tax. Realized gains or losses are
measured and reclassified from
F - 22
Years Ended December 31,
2013
2012
(in millions)
Net operating revenues
$
35,953
$
35,918
Net loss
$
(4,290
)
$
(5,141
)
Basic loss per common share
$
(1.12
)
$
(1.35
)
Note 4.
Investments
Successor
Predecessor
December 31,
2013
December 31,
2012
December 31,
2012
(in millions)
Marketable equity securities
$
49
$
—
$
45
Equity method and other investments
94
—
1,008
Bond investment
—
2,929
—
Bond derivative
—
175
—
$
143
$
3,104
$
1,053