Sprint - Nextel 2013 Annual Report Download - page 141

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
accumulated other comprehensive loss into "Other income (expense), net" in Sprint's consolidated statement of comprehensive loss based on identifying the
specific investments sold or where an other
- than - temporary impairment exists.
Consolidation of Clearwire
Sprint's Ownership Interest and Equity in Earnings/Losses
Immediately prior to the Clearwire Acquisition, Sprint Communications held approximately
50.1% of non - controlling voting interest and a 6.0% non -
controlling economic interest in Clearwire Corporation as well as a 44.1% non - controlling economic interest in Clearwire Communications LLC, a wholly - owned
subsidiary of Clearwire Corporation, (together, "Clearwire") for which the carrying value totaled
$325 million . Prior to the close of the Clearwire Acquisition, we
applied equity method accounting to the investment in Clearwire.
Equity in losses from Clearwire were $482 million , $1.1 billion , and $1.7 billion for the Predecessor period ended July 9, 2013, and Predecessor years
ended
December 31, 2012 and 2011 , respectively. The equity in losses from our investment in Clearwire consisted of our share of Clearwire's net loss and other
adjustments, if any, such as non
- cash impairment of our investment, gains or losses associated with the dilution of our ownership interest resulting from
Clearwire's equity issuances, derivative losses associated with the change in fair value of the embedded derivative included in exchangeable notes between
Clearwire and Sprint, and other items recognized by Clearwire Corporation that did not affect our economic interest. Sprint's equity in losses for the Predecessor
period ended July 9, 2013, includes a
$65 million derivative loss associated with the change in fair value of the embedded derivative. Equity in losses from
Clearwire for the Predecessor years ended
December 31, 2012 and 2011 included a $204 million and $135 million , respectively, pre - tax impairment reflecting a
reduction in the carrying value of the investment in Clearwire to an estimated fair value and pre
- tax dilution loss of $27 million for the year ended December 31,
2011 . The Predecessor years ended December 31, 2012 and 2011 also included charges of approximately $41 million and $361 million , respectively, which were
associated with Clearwire's write
- off of certain network and other assets that no longer met its strategic plans.
Subsequent to the Clearwire Acquisition, Clearwire is consolidated as a wholly
- owned subsidiary of Sprint. In connection with the acquisition, Sprint
recorded a pre
- tax gain of approximately $2.9 billion to "Gain on previously - held equity interests" in its Predecessor consolidated statement of comprehensive
loss immediately preceding the Clearwire Acquisition resulting from the difference between the estimated fair value of the interests owned prior to the
acquisition (
$5.00 per share offer price less an estimated control premium of approximately $0.60 ) and the carrying value of approximately $325 million for those
previously
- held equity interests.
Summarized financial information for Clearwire for the periods preceding the Clearwire Acquisition is as follows:
F - 23
January 1 -
July 9,
Years Ended December 31,
2013
2012
2011
(in millions)
Revenues
$
666
$
1,265
$
1,254
Operating expenses
(1,285
)
(2,644
)
(3,645
)
Operating loss
$
(619
)
$
(1,379
)
$
(2,391
)
Net loss from continuing operations before non - controlling interests
$
(1,102
)
$
(1,744
)
$
(2,856
)
Net loss from discontinued operations before non - controlling interests
$
—
$
( 168
)
$
(82
)