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Table of Contents
Index to Consolidated Financial Statements
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — ( CONTINUED)
approximates market value. Cash and cash equivalents exclude cash that is contractually restricted for operational purposes. We maintain cash and cash
equivalent balances with financial institutions that exceed federally insured limits. We have not experienced any losses related to these balances, and
management believes the credit risk related to these balances to be minimal.
Restricted Cash — Restricted cash consists primarily of amounts to satisfy certain contractual obligations and is classified as a current or non - current
asset based on its designated purpose. The majority of this restricted cash has been designated to satisfy certain lease obligations.
Investments
— We have an investment portfolio comprised primarily of U.S. Government and Agency marketable debt securities. We classify marketable
debt securities as available
- for - sale investments and these securities are stated at their estimated fair value. Our investments are recorded as short - term
investments when the original maturities are greater than three months but remaining maturities are less than one year. Our investments with maturities of more
than one year are recorded as long
- term investments. Unrealized gains and losses are recorded within accumulated other comprehensive income (loss). Realized
gains and losses are measured and reclassified from accumulated other comprehensive income (loss) on the basis of the specific identification method.
We account for certain of our investments using the equity method based on our ownership interest and our ability to exercise significant influence.
Accordingly, we record our investment initially at cost and we adjust the carrying amount of the investment to recognize our share of the earnings or losses of
the investee each reporting period. We cease to recognize investee losses when our investment basis is zero. At July 9, 2013 and December 31, 2012, our balance
in equity method investees was $0.
We recognize realized losses when declines in the fair value of our investments below their cost basis are judged to be other
- than - temporary. In
determining whether a decline in fair value is other
- than - temporary, we consider various factors including market price, investment ratings, the financial
condition and near
- term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost basis, and our intent and
ability to hold the investment until maturity or for a period of time sufficient to allow for any anticipated recovery in market value. If it is judged that a decline in
fair value is other
- than - temporary, a realized loss equal to the excess of the cost basis over fair value is recorded in the consolidated statements of operations,
and a new cost basis in the investment is established.
Fair Value Measurements
— Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. In determining fair value, we consider the principal or most advantageous market in which the asset or liability
would transact, and if necessary, consider assumptions that market participants would use when pricing the asset or liability.
The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs
used to measure fair value. Financial assets and financial liabilities are classified in the hierarchy based on the lowest level of input that is significant to the fair
value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the
assets and liabilities being measured and their placement within the fair value hierarchy.
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