Sprint - Nextel 2015 Annual Report Download - page 135

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 17. Related-Party Transactions
Clearwire Related-Party Transactions
Immediately prior to the Clearwire Acquisition, Sprint Communications held approximately 50.1% of non-controlling voting interest and a 6.0% non-
controlling economic interest in Clearwire Corporation as well as a 44.1% non-controlling economic interest in Clearwire Communications LLC for which the
carrying value totaled $325 million . Prior to the close of the Clearwire Acquisition, we applied equity method accounting to the investment in Clearwire.
Equity in losses from Clearwire were $482 million and $202 million for the Predecessor 190-day period ended July 9, 2013 and Predecessor unaudited
three-month period ended March 31, 2013, respectively. The equity in losses from our investment in Clearwire consisted of our share of Clearwire's net loss and
other adjustments, if any, such as non-cash impairment of our investment, gains or losses associated with the dilution of our ownership interest resulting from
Clearwire's equity issuances, derivative losses associated with the change in fair value of the embedded derivative included in exchangeable notes between
Clearwire and Sprint, and other items recognized by Clearwire Corporation that did not affect our economic interest. Sprint's equity in losses for the Predecessor
190-day period ended July 9, 2013, include a $65 million derivative loss associated with the change in fair value of the embedded derivative.
Subsequent to the Clearwire Acquisition, Clearwire is consolidated as a wholly-owned subsidiary of Sprint. In connection with the acquisition, Sprint
recorded a pre-tax gain of approximately $2.9 billion to "Gain on previously-held equity interests" in its Predecessor consolidated statements of operations
immediately preceding the Clearwire Acquisition resulting from the difference between the estimated fair value of the interests owned prior to the acquisition (
$5.00 per share offer price less an estimated control premium of approximately $0.60 ) and the carrying value of approximately $325 million for those previously-
held equity interests.
Cost of services included in our consolidated statements of operations related to our agreement to purchase 4G services from Clearwire totaled $207
million and $101 million for the Predecessor 190-day period ended July 9, 2013 and Predecessor unaudited three-month period ended March 31, 2013,
respectively.
Summarized financial information for Clearwire for the 190-day period ended July 9, 2013, which preceded the Clearwire Acquisition, is as follows:
190 Days Ended
July 9,
2013
(in millions)
Revenues $ 666
Operating expenses (1,285)
Operating loss $ (619)
Net loss from continuing operations before non-controlling interests $ (1,102)
Net loss from discontinued operations before non-controlling interests $ —
SoftBank Related-Party Transactions
In addition to agreements arising out of or relating to the SoftBank Merger, Sprint has entered into various other arrangements with SoftBank or its
controlled affiliates (SoftBank Parties) or with third parties to which SoftBank Parties are also parties, including for international wireless roaming, wireless and
wireline call termination, real estate, logistical management and other services.
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