Time Warner Cable 2010 Annual Report Download - page 97

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7. INVESTMENTS
The components of the Company’s investments as of December 31, 2010 and 2009 and related ownership
percentages as of December 31, 2010 are presented in the table below (in millions):
Ownership
Percentage 2010 2009
Investment Balance as of
December 31,
Equity-method investments:
SpectrumCo ............................................ 31.2% $ 692 $ 691
Clearwire Communications.................................. 4.7% 94 207
Other .................................................. 59 53
Total equity-method investments ............................... 845 951
Other investments .......................................... 21 24
Total investments ........................................... $ 866 $ 975
For the years ended December 31, 2010 and 2009, the Company recognized losses from equity-method investments
of $110 million and $49 million, respectively, and, for the year ended December 31, 2008, recognized income from
equity-method investments of $16 million, which is included in other expense, net, in the consolidated statement of
operations.
SpectrumCo
TWC is a participant in a joint venture with certain other cable companies (“SpectrumCo”) that holds advanced
wireless spectrum (“AWS”) licenses. TWC made net cash investments in SpectrumCo of $2 million in 2010, $29 million
in 2009 and $3 million in 2008.
Clearwire Communications
TWC holds an equity interest in Clearwire Communications LLC (“Clearwire Communications”), the operating
subsidiary of Clearwire Corporation (“Clearwire”), a publicly traded company that was formed by the combination of the
respective wireless broadband businesses of Sprint Nextel Corporation (“Sprint”) and Clearwire Communications.
Clearwire is focused on deploying a nationwide fourth-generation (“4G”) wireless network to provide mobile broadband
services to wholesale and retail customers. In connection with TWC’s initial investment in Clearwire Communications,
TWC entered into wholesale agreements with Clearwire and Sprint that allow TWC to offer wireless services utilizing
Clearwire’s 4G WiMax network and Sprint’s third-generation code division multiple access (“CDMA”) network. TWC
made net cash investments in Clearwire Communications of $4 million in 2010, $97 million in 2009 and $536 million in
2008.
During 2008, the Company recorded a noncash pretax impairment charge of $367 million on its investment in
Clearwire Communications as a result of a significant decline in the estimated fair value of the investment, which is
included in other expense, net, in the consolidated statement of operations. The primary input in estimating the fair value
of TWC’s investment in Clearwire Communications was the quoted market value of Clearwire’s publicly traded shares of
Class A common stock at December 31, 2008, which declined significantly from May 2008, the date TWC agreed to make
its initial investment.
As of December 31, 2010, the Company’s equity interest in the underlying net assets of Clearwire Communications
exceeded the carrying value of the Company’s investment by approximately $200 million. Such difference relates to
intangible assets not subject to amortization and, therefore, is not being amortized.
In its Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, Clearwire disclosed that it may not
be able to continue to operate as a going concern. Subsequently, in December 2010, Clearwire raised $1.404 billion in a
private placement of debt securities. There can be no assurance that Clearwire will be able to obtain sufficient financing in
85
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)