Sprint - Nextel 2008 Annual Report Download - page 151

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following amounts for related party transactions are included in our consolidated financial statements
(in thousands):
December 31,
2009 2008
Accounts payable and accrued expenses .............................. $ 22,521 $ 33,872
Debt .......................................................... $246,494 $178,748
Year Ended December 31,
2009 2008(1) 2007
Revenue ............................................ $ 2,230 $ — $ —
Cost of goods and services and network costs (inclusive of
capitalized costs) (COGS) ............................ $75,283 $118,331 $ 41,554
Selling, general and administrative (SG&A) ............... $10,773 $ 95,840 $ 75,554
Interest costs (inclusive of capitalized interest) ............. $23,883 $ 1,353 $ —
Total contributions and advances from Sprint .............. $ — $451,925 $1,287,251
(1) The amounts presented for 2008 reflect the correction of a classification error between COGS and SG&A in
the amount of $77.4 million that had been previously presented in SG&A and has been reclassified to COGS
to correct the presentation.
Rollover Notes — In connection with the issuance of the Senior Secured Notes, on November 24, 2009, we
also issued $252.5 million of notes to Sprint and Comcast with identical terms as the Senior Secured Notes. The
proceeds from the Rollover Notes were used to retire the principal amounts owed to Sprint and Comcast under
our Senior Term Loan Facility. From time to time, other related parties may hold debt under our Senior Secured
Notes, and as debtholders, would be entitled to receive interest payments from us.
Sprint Pre-Closing Financing Amount and Amended Credit Agreement — As a result of the Transactions,
we assumed the liability to reimburse Sprint for the Sprint Pre-Closing Financing Amount. We were required to
pay $213.0 million, plus related interest of $4.5 million, to Sprint in cash on the first business day after the
Closing, with the remainder added as the Sprint Tranche under the Amended Credit Agreement for our Senior
Term Loan Facility in the amount of $179.2 million. From time to time, other related parties may have held debt
under our Senior Term Loan Facility, and as debtholders, would have been entitled to receive interest payments
from us under the Amended Credit Agreement. During 2009, we repaid our Senior Term Loan Facility with
proceeds from our Senior Secured Notes and Rollover Notes.
Sprint — Sprint assigned, where possible, certain costs to us based on our actual use of the shared services,
which included office facilities and management services, including treasury services, human resources, supply
chain management and other shared services, up through the Closing. Where direct assignment of costs was not
possible or practical, Sprint used indirect methods, including time studies, to estimate the assignment of its costs
to us, which were allocated to us through a management fee. The allocations of these costs were re-evaluated
periodically. Sprint charged us management fees for such services of $171.1 million in the year ended
December 31, 2008 and $115.0 million in the year ended December 31, 2007. Additionally, we have entered into
lease agreements with Sprint for various switching facilities and transmitter and receiver sites for which we
recorded rent expense of $28.2 million, $36.4 million and $2.0 million in the years ended December 31, 2009,
2008 and 2007, respectively.
Relationships among Certain Stockholders, Directors, and Officers of Clearwire — Following the
completion of the Transactions and the post-closing adjustments, Sprint, through a wholly-owned subsidiary
Sprint HoldCo LLC, owned the largest interest in Clearwire with an effective voting and economic interest in
Clearwire of approximately 56% and the Investors collectively owned a 29% interest in Clearwire. See Note 3,
Stategic Transactions, for discussion regarding the post-closing adjustment.
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