Sprint - Nextel 2014 Annual Report Download - page 37

Table of Contents
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Other income (expense), net
The following table provides additional information on items included in "Other income (expense), net."
Successor Combined Successor Predecessor
Year Ended
March 31, Three Months Ended March 31, Year Ended December 31, Year Ended December 31,
87 Days
Ended
December 31,
191 Days
Ended
July 10, Years Ended
December 31,
2015 2014 2013 2013 2013 2012 2013 2012
(in millions)
Interest income $ 12 $ 4 $ 14 $ 69 $ 36 $ 10 $ 33 $ 65
Gain (loss) on early retirement of debt — — — 44 56 — (12) 81
Other, net 15 (3) (8) (21) (19) — (2) 44
Total $ 27 $ 1 $ 6 $ 92 $ 73 $ 10 $ 19 $ 190
Successor Year Ended December 31, 2013 and Predecessor Year Ended December 31, 2012
"Other income (expense), net" represented income of $73 million for the Successor year ended December 31,
2013 compared to income of $190 million in the Predecessor year ended December 31, 2012. Other, net in the Successor year
ended December 31, 2013 primarily consisted of $159 million of income related to the recognition of the remaining
unaccreted convertible bond discount. In addition, the Successor year ended December 31, 2013 included a $175 million loss
related to the embedded derivative associated with the Bond. Gain on early retirement of debt in the Successor year ended
December 31, 2013 was a result of early retirement of the Clearwire Communications LLC and Clearwire Finance, Inc. 12%
secured notes due 2015 and 12% secured notes due 2017 and in the Predecessor year ended December 31, 2012 was
attributable to the early redemption of Nextel Communications, Inc. debt.
Income Tax Expense
The Successor period income tax benefit for the year ended March 31, 2015 of $574 million represented a
consolidated effective tax rate of approximately 15%. The Successor period income tax expense for the three-month
transition period ended March 31, 2014 and the year ended December 31, 2013 of $56 million and $45 million, respectively,
represented a consolidated effective tax rate of approximately 59% and 3%, respectively. The Predecessor period income tax
expense for the three-month period ended March 31, 2013 and year ended December 31, 2012 of $38 million and $154
million, respectively, represented a consolidated effective tax rate of approximately 6% and 4%, respectively. The income tax
benefit for the year ended March 31, 2015 is primarily attributable to recognition of a tax benefit on the $1.9 billion Sprint
trade name impairment loss, partially offset by tax expense on taxable temporary differences from the amortization of FCC
licenses for income tax purposes. The expense for the 191 days ended July 10, 2013 of approximately $1.6 billion was
primarily attributable to the recognition of tax expense on the $2.9 billion gain on previously-held equity interests in
Clearwire. The income tax expense for the remaining Successor and Predecessor periods presented was primarily attributable
to taxable temporary differences from amortization of FCC licenses and included net increases to the valuation allowance for
federal and state deferred tax assets primarily related to net operating loss carryforwards generated during the respective
periods of $82 million and $708 million, for the Successor three-month transition period ended March 31, 2014 and year
ended December 31, 2013, respectively, and $265 million and $1.8 billion for the Predecessor three-month period ended
March 31, 2013 and year ended December 31, 2012, respectively. The income tax expense for the year ended December 31,
2012 also included a $69 million tax benefit resulting from the resolution of various federal and state income tax
uncertainties. Additional information related to items impacting the effective tax rates can be found in the Notes to the
Consolidated Financial Statements.