Sprint - Nextel 2008 Annual Report Download - page 130

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Indefinite and Definite-lived Owned Spectrum Licenses — Spectrum licenses, which are issued on both a
site-specific and a wide-area basis, authorize wireless carriers to use radio frequency spectrum to provide service
to certain geographical areas in the United States and internationally. These licenses are generally acquired as an
asset purchase or through a business combination. In some cases, we acquire licenses directly from the
governmental authority in the applicable country. These licenses are considered indefinite-lived intangible assets,
except for the licenses acquired in Poland, Spain, Germany and Romania, which are considered definite-lived
intangible assets due to limited license renewal history in these countries.
Spectrum Leases and Prepaid Spectrum — We also lease spectrum from third parties who hold the
spectrum licenses. These leases are accounted for as executory contracts, which are treated like operating leases.
Upfront consideration paid to third-party holders of these leased licenses at the inception of a lease agreement is
capitalized as prepaid spectrum lease costs and is expensed over the term of the lease agreement, including
expected renewal terms, as applicable. As part of the purchase accounting for the Transactions, favorable
spectrum leases of $1.0 billion were recorded at the Closing. The favorable component of the acquired spectrum
leases has been capitalized as an asset and is amortized over the lease term.
Year Ended December 31,
2009 2008 2007
Supplemental Information (in thousands):
Amortization of prepaid spectrum licenses .................. $57,898 $ 17,109 $ —
Amortization of definite-lived owned spectrum .............. $ 5,689 $ 447 $ —
Consideration paid relating to owned spectrum licenses:
Cash ................................................ $46,800 $108,265 $352,295
Stock (Sprint) ......................................... $ — $ 4,000 $100,000
Based on the definite-lived spectrum licenses and favorable spectrum leases as of December 31, 2009,
future amortization of spectrum licenses, spectrum leases and prepaid spectrum lease costs (excluding pending
spectrum and spectrum transition costs) is expected to be as follows (in thousands):
Spectrum
Leases and
Prepaid Spectrum
Definite-
Lived Owned
Spectrum Total
2010 ....................................... $ 55,796 $ 7,709 $ 63,505
2011 ....................................... 53,956 7,996 61,952
2012 ....................................... 53,791 7,996 61,787
2013 ....................................... 52,802 7,501 60,303
2014 ....................................... 52,449 6,511 58,960
Thereafter ................................... 991,674 74,088 1,065,762
Total ....................................... $1,260,468 $111,801 $1,372,269
We expect that all renewal periods in our leases will be renewed by us, and that the costs to renew to be
immaterial.
F-64