Sprint - Nextel 2014 Annual Report Download - page 104

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-21
issued to Sprint Communications, Inc. stockholders and (c) approximately $193 million of share-based payment awards
(replacement awards) exchanged for awards held by Sprint employees.
Additionally, SoftBank invested approximately $5.0 billion in the form of a capital contributions to Sprint. The
fair value of the investments by SoftBank was determined based on the cash transferred, including $3.1 billion to purchase
the Bond and $1.9 billion at the SoftBank Merger Date.
Purchase Price Allocation
The consideration transferred was allocated to assets acquired and liabilities assumed based on their estimated fair
values as of the SoftBank Merger Date, inclusive of the Clearwire Acquisition described above. The excess of the
consideration transferred over the estimated fair values of assets acquired and liabilities assumed was recorded as goodwill.
Goodwill resulting from the SoftBank Merger is allocated to the Wireless segment. 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 $476 million. Indefinite-lived intangible
assets increased by approximately $300 million due to additional analysis performed by management during the quarter
ended December 31, 2013 and the quarter ended June 30, 2014 related to the value assigned to certain FCC licenses. The
remainder of the decrease was due to insignificant changes in various accounts.
The following table summarizes the purchase price allocation of consideration transferred:
Purchase Price Allocation (in millions):
Current assets $ 8,576
Investments 133
Property, plant and equipment 14,558
Identifiable intangibles 50,672
Goodwill 6,343
Other assets 244
Current liabilities (10,623)
Long-term debt (29,481)
Deferred tax liabilities (14,256)
Other liabilities (3,989)
Net assets acquired, prior to conversion of the Bond 22,177
Conversion of Bond 3,100
Net assets acquired, after conversion of the Bond $ 25,277
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.
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)
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 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