Fair Value Measurement (Starburst II, Inc. [Member])

6 Months Ended

Jun. 30, 2013

Starburst II, Inc. [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Value, Measurement Inputs, Disclosure [Text Block]

NOTE 3.    FAIR VALUE MEASUREMENT

The carrying value and estimated fair value of cash equivalents, which consist of short-term money market funds, are classified in the quoted prices in active markets category of the fair value hierarchy. There were no transfers between the fair value categories during the six months ended June 30, 2013.

Management is responsible for determining appropriate valuation policies and procedures for fair value measurements based on unobservable inputs not corroborated by market data. Fair value calculations are generally prepared by third-party valuation experts who rely on assumptions and estimates provided by management, such as the development and determination of relevant unobservable inputs. Through regular interaction with the third-party valuation experts, management determines the valuation techniques used and inputs and outputs of the valuation models. Changes in these fair value measurements are analyzed each calendar quarter based on changes in estimates or assumptions and recorded as appropriate.

The estimated fair values of the host contract and embedded derivative are calculated by third-party valuation experts and determined under the income approach using relevant model-driven valuation techniques including discounted cash flow and binomial lattice models. This approach requires the use of significant inputs from observable market data as well as unobservable inputs supported by little or no market data, including various assumptions that management believes market participants would use in pricing the Bond. The significant observable and unobservable inputs used to value the host contract and the embedded derivative include Sprint Nextel’s stock price, volatility, credit spread and certain other assumptions specifically related to the SoftBank Merger. On June 25, 2013, the Merger Agreement received approval from Sprint Nextel stockholders. No value was ascribed to the embedded derivative as of June 30, 2013 based principally on the probability of a successful SoftBank Merger outcome. On July 10, 2013, the Bond was converted into shares of Sprint Nextel Common Stock in connection with the consummation of the SoftBank Merger as further described in Note 7, Subsequent Events.

The following table summarizes, for assets measured at fair value, the respective fair value and the classification within the fair value hierarchy (in thousands):

			Estimated Fair Value Using Input Type
	Carrying Value at June 30, 2013		Quoted Prices in Active Markets		Observable		Unobservable
Assets:
Cash equivalents	$	11,461	$	11,461	$	—	$	—
Investment	3,101,000		—		—		3,101,000
Total assets measured at fair value	$	3,112,461	$	11,461	$	—	$	3,101,000
			Estimated Fair Value Using Input Type
	Carrying Value at December 31, 2012		Quoted Prices in Active Markets		Observable		Unobservable
Assets:
Cash equivalents	$	5,000	$	5,000	$	—	$	—
Investment	2,929,000		—		—		2,929,000
Derivative	175,000		—		—		175,000
Total assets measured at fair value	$	3,109,000	$	5,000	$	—	$	3,104,000

The following is a reconciliation of the estimated fair value of the Investment and Derivative for the six months ended June 30, 2013 (in thousands):

	Balances as of December 31, 2012		Net Purchases		Net Sales		Accretion of Bond Discount Recognized as Interest Income		Change in Value of Derivative			Appreciation Recognized through OCI		Transfers In (Out)		Balances as of June 30, 2013
Investment	$	2,929,000	$	—	$	—	$	11,900	$	—		$	160,100	$	—	$	3,101,000
Derivative	175,000		—		—		—		(175,000		)	—		—		—
Total	$	3,104,000	$	—	$	—	$	11,900	$	(175,000	)	$	160,100	$	—	$	3,101,000