Sprint - Nextel 2014 Annual Report Download - page 103

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-20
Note 3. Significant Transactions
Acquisition of Remaining Interest in Clearwire
On July 9, 2013, Sprint Communications completed the Clearwire Acquisition. The cash consideration paid
totaled approximately $3.5 billion, net of cash acquired of $198 million. Approximately $125 million of the cash
consideration is accrued for within "Accrued expenses and other current liabilities" on the consolidated balance sheet for
dissenting shares relating to stockholders who exercised their appraisal rights.
The fair value of consideration, which is measured at the estimated fair value of each element of consideration
transferred as of the Clearwire Acquisition Date, was determined as the sum of (a) approximately $3.7 billion of cash
transferred to Clearwire stockholders, which included $125 million of cash relating to dissenting shares, (b) approximately
$3.3 billion representing the estimated fair value of Clearwire shares held by Sprint Communications immediately preceding
the acquisition and (c) approximately $59 million of share-based payment awards (replacement awards) exchanged for
awards held by Clearwire employees.
Purchase Price Allocation
The consideration transferred was allocated to assets acquired and liabilities assumed based on their estimated fair
values at the Clearwire Acquisition Date. The allocation of consideration transferred was based on management's judgment
after evaluating several factors, including a valuation assessment. Management finalized its purchase price allocation during
the quarter ended June 30, 2014. Adjustments made since the initial purchase price allocation decreased recorded goodwill by
approximately $269 million and were primarily attributable to a reduction of approximately $270 million made to deferred
tax liabilities as a result of additional analysis. The remaining adjustments were insignificant.
The following table summarizes the purchase price allocation of consideration in the Clearwire Acquisition:
Purchase Price Allocation (in millions):
Current assets $ 778
Property, plant and equipment 1,245
Identifiable intangibles 12,870
Goodwill 437
Other assets 25
Current liabilities (1,070)
Long-term debt (4,288)
Deferred tax liabilities (2,130)
Other liabilities (876)
Net assets acquired $ 6,991
SoftBank Transaction
As discussed above, the SoftBank Merger was completed on July 10, 2013. Sprint Communications, Inc.
stockholders received consideration in a combination of both cash and stock, subject to proration. Cash consideration paid in
the SoftBank Merger was $14.1 billion, net of cash acquired of $2.5 billion and the estimated fair value of the 22% interest in
Sprint Corporation issued to the then existing stockholders of Sprint Communications, Inc.
In addition, pursuant to the Bond Agreement, on October 15, 2012, Sprint Communications, Inc. issued a Bond to
Starburst II with a principal amount of $3.1 billion, interest rate of 1%, and maturity date of October 15, 2019, which was
converted into 590,476,190 shares of Sprint Communications, Inc. common stock at $5.25 per share immediately prior to the
SoftBank Merger Date. As a result of the completion of the SoftBank Merger and subsequent open market stock purchases,
SoftBank owned approximately 79% of the outstanding voting common stock of Sprint Corporation and other Sprint
stockholders own the remaining approximately 21% as of March 31, 2015.
Consideration Transferred and Investments by SoftBank
The fair value of consideration transferred, which is measured at the estimated fair value of each element of
consideration transferred as of the SoftBank Merger Date, was determined as the sum of (a) approximately $16.6 billion of
cash transferred to Sprint Communications, Inc. stockholders, (b) approximately $5.3 billion representing shares of Sprint