Sprint - Nextel 2014 Annual Report Download - page 159

Table of Contents
Index to Consolidated Financial Statements
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
F-76
Liquidity
To date, we have invested heavily in building and maintaining our networks. We have a history of operating
losses, and we expect to have significant losses in the future. We do not expect our operations to generate
cumulative positive cash flows during the next twelve months.
We expect to meet our funding needs for the near future through our cash and investments held at July 9, 2013
and cash receipts from our mobile WiMAX, services from our retail and wholesale business, other than Sprint, and
Sprint under the 2011 November 4G MVNO Amendment. Additionally, we anticipate receiving funds from Sprint
for the deployment of our Time Division Duplex, which we refer to as TDD, Long Term Evolution, which we refer
to as LTE, network and the use of additional spectrum not specified in the 2011 November 4G MVNO Amendment.
As a wholly-owned subsidiary of Sprint, to the extent we are not able to fund our business through our retail and
wholesale revenue streams, we expect to receive funding for any shortfall from Sprint such that we will continue to
be a going concern for at least the next twelve months.
2. Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America, which we refer to as U.S. GAAP. The following is a summary of
our significant accounting policies:
Principles of Consolidation — The consolidated financial statements include all of the assets, liabilities and
results of operations of our wholly-owned subsidiaries, and subsidiaries we control or in which we have a
controlling financial interest. Investments in entities that we do not control and are not the primary beneficiary, but
for which we have the ability to exercise significant influence over operating and financial policies, are accounted
for under the equity method. All intercompany transactions are eliminated in consolidation.
Non-controlling interests on the consolidated balance sheets include third-party investments in entities that we
consolidate, but do not wholly own. We classify our non-controlling interests as part of equity and we allocate net
loss, other comprehensive income (loss) and other equity transactions to our non-controlling interests in accordance
with their applicable ownership percentages. We also continue to attribute to our non-controlling interests their share
of losses even if that attribution results in a deficit non-controlling interest balance. See Note 14, Stockholders'
Equity, for further information.
Financial Statement Presentation — We have reclassified certain prior period amounts to conform with the
current period presentation.
Use of Estimates — Preparing financial statements in conformity with U.S. GAAP requires management to
make complex and subjective judgments. By their nature, these judgments are subject to an inherent degree of
uncertainty. These judgments are based on our historical experience, terms of existing contracts, observance of
trends in the industry, information provided by our subscribers and information available from other outside sources,
as appropriate. Additionally, changes in accounting estimates are reasonably likely to occur from period to period.
These factors could have a material impact on our financial statements, the presentation of our financial condition,
changes in financial condition or results of operations.
Significant estimates inherent in the preparation of the accompanying financial statements include: impairment
analysis of spectrum licenses with indefinite lives, including judgments about when an impairment indicator may or
may not have occurred and estimates of the fair value of our spectrum licenses, the recoverability and determination
of useful lives for long-lived assets, which include property, plant and equipment and other intangible assets, tax
valuation allowances and valuation of derivatives.
Cash and Cash Equivalents — Cash equivalents consist of money market mutual funds and highly liquid
short-term investments, with original maturities of three months or less. Cash equivalents are stated at cost, which