Sprint - Nextel 2011 Annual Report Download - page 121

Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Owned and leased spectrum licenses as of December 31, 2011 and 2010 consisted of the following (in thousands):
Indefinite-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. 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.
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. Favorable spectrum
leases of $1.0 billion were recorded as an asset as a result of purchase accounting in November 2008 and are amortized over the lease term.
As of December 31, 2011, future amortization of spectrum licenses, spectrum leases and prepaid lease costs (excluding pending spectrum and spectrum transition
costs) is expected to be as follows (in thousands):
We expect that all renewal periods in our leases will be renewed by us, and the costs to renew to be immaterial.
F-54
6. Spectrum Licenses
December 31, 2011 December 31, 2010
Wtd Avg
Lease Life Gross Carrying
Value Accumulated
Amortization Net Carrying
Value Gross Carrying
Value Accumulated
Amortization Net Carrying
Value
Indefinite-lived owned spectrum Indefinite $ 3,098,983 $
—
$ 3,098,983 $ 3,097,057 $
—
$ 3,097,057
Spectrum leases and prepaid spectrum 16-25 years 1,364,907 (181,033) 1,183,874 1,361,932 (124,945) 1,236,987
Pending spectrum and transition costs N/A 15,397
—
15,397 14,838
—
14,838
Total spectrum licenses $ 4,479,287 $ (181,033) $ 4,298,254 $ 4,473,827 $ (124,945) $ 4,348,882
Year Ended December 31,
2011 2010 2009
Supplemental Information (in thousands):
Amortization of prepaid and other spectrum licenses $ 55,870 $ 59,653 $ 60,071
Total
2012 $ 54,884
2013 54,281
2014 53,970
2015 53,723
2016 53,343
Thereafter 913,673
Total $ 1,183,874