
Note 4.	Investments

The components of investments were as follows:



	Successor				Predecessor
	September 30, 2013		December 31, 2012		December 31, 2012
	(in millions)
Marketable equity securities	$	45	$	—	$	45
Equity method and other investments	92		—		1,008
Bond investment	—		2,929		—
Bond derivative	—		175		—
	$	137	$	3,104	$	1,053

The bond investment, together with the bond derivative, for the Successor period relate to the convertible bond Sprint Communications issued (See Note 9. Long-term debt, financing and capital lease obligations) to Starburst II in connection with the Bond Agreement (See Note 3. Significant Transactions), which was accounted for as an available-for-sale investment carried at its estimated fair value by Starburst II.

Consolidation of Clearwire

Sprint's Ownership Interest and Equity in Earnings/Losses

Immediately prior to the Clearwire Acquisition, Sprint Communications held approximately 50.1% of non-controlling voting interest and a 2.1% non-controlling economic interest in Clearwire Corporation as well as a 48.0% non-controlling economic interest in Clearwire Communications LLC, a wholly-owned subsidiary of Clearwire Corporation, (together, "Clearwire") for which the carrying value totaled $325 million. Prior to the consummation of the Clearwire Acquisition, we applied equity method accounting to the investment in Clearwire.

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 the Clearwire Exchangeable Notes, and other items recognized by Clearwire Corporation that did not affect our economic interest. Equity in losses from Clearwire for the three-month period ended September 30, 2012 included a $204 million pre-tax impairment reflecting a reduction in the carrying value of the investment in Clearwire to an estimated fair value. The nine-month period ended September 30, 2012 also included charges of approximately $41 million, which were associated with Clearwire's write-off of certain network and other assets that no longer met its strategic plans. Sprint's equity in losses for the year-to-date period ended July 9, 2013, includes a $65 million derivative loss associated with the change in fair value of the embedded derivative included in the Clearwire Exchangeable Notes.

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 consolidated statement of comprehensive (loss) income 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.

Summarized financial information for Clearwire for the periods preceding the Clearwire Acquisition is as follows:



	January 1, - July 9,			July 1, - July 9,			Nine Months Ended			Three Months Ended
	January 1, - July 9,			July 1, - July 9,			September 30,
	2013			2013			2012			2012
	(in millions)
Revenues	$	666		$	31		$	954		$	314
Operating expenses	(1,285		)	(62		)	(2,020		)	(647		)
Operating loss	$	(619	)	$	(31	)	$	(1,066	)	$	(333	)
Net loss from continuing operations before non-controlling interests	$	(909	)	$	(31	)	$	(1,312	)	$	(320	)
Net loss from discontinued operations before non-controlling interests	$	—		$	—		$	(179	)	$	(173	)

Clearwire Related-Party Transactions

Sprint's equity method investment in Clearwire included agreements by which we resold wireless data services utilizing Clearwire's 4G network. In addition, Clearwire utilized the third generation (3G) Sprint network to provide dual-mode service to its customers in those areas where access to its 4G network was not available. Cost of services and products included in our consolidated statements of comprehensive loss related to our agreement to purchase 4G services from Clearwire totaled $103 million and $312 million for the three and nine-month periods ended September 30, 2012, respectively, and $11 million and $207 million for the periods from July 1, 2013 and January 1, 2013 to the Clearwire Acquisition, respectively.