Sprint - Nextel 2011 Annual Report Download - page 145

Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
We have a number of strategic and commercial relationships with third parties that have had a significant impact on our business, operations and financial results.
These relationships have been with Sprint, the Strategic Investors, Google, Eagle River, Ericsson, Switch & Data, Inc., Dashwire, Inc. and Motorola Solutions, Inc., all of
which are or have been related parties. Some of these relationships include agreements pursuant to which we sell wireless broadband services to certain of these related
parties on a wholesale basis, which such related parties then resell to each of their respective end user subscribers. We sell these services at terms defined in our
contractual agreements.
The following amounts for related party transactions are included in our consolidated financial statements (in thousands):
Rollover Notes — In connection with the issuance of the Senior Secured Notes, on November 24, 2009, we issued notes to Sprint and Comcast with identical terms
as the Senior Secured Notes. 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.
Relationships among Certain Stockholders, Directors, and Officers of Clearwire — Sprint, through a wholly-owned subsidiary Sprint HoldCo LLC, owns the
largest interest in Clearwire with an effective voting interest of approximately 48.6% and economic interest in Clearwire Communications of approximately 51.5%, and
Intel, Google, Comcast, Time Warner Cable, Bright House and Eagle River collectively owned a 23.3% interest in Clearwire.
During 2011, Eagle River held warrants entitling it to purchase 613,333 shares of Class A Common Stock at an exercise price of $15.00 per share which expired
May 7, 2011. As of December 31, 2011, Eagle River held warrants to purchase 375,000 shares of Class A Common Stock at an exercise price of $3.00 per share with an
expiration date of November 13, 2013.
Clearwire, Sprint, Eagle River, Google and the Strategic Investors are party to the Equityholders’ Agreement, which sets forth certain rights and obligations of the
equityholders with respect to governance of Clearwire, transfer restrictions on our common stock, rights of first refusal and pre-emptive rights, among other things. In
addition, we have also entered into a number of commercial agreements with Sprint, Google and the Strategic Investors which are outlined below.
4G MVNO Agreement — We have a non-exclusive 4G MVNO agreement, which we refer to as the 4G MVNO Agreement, with Comcast MVNO II, LLC, TWC
Wireless, LLC, BHN Spectrum Investments, LLC and Sprint Spectrum L.P.,which we refer to as Sprint Spectrum. We sell wireless broadband services to the other parties
to the 4G MVNO Agreement for the purposes of the purchasers' marketing and reselling our wireless broadband services to their respective end user subscribers. The
wireless broadband services to be provided under the 4G MVNO Agreement include standard network services, and, at the request of any of the parties, certain non-
standard network services. We sell these services at prices defined in the 4G MVNO Agreement.
Sprint Wholesale relationship
F-78
17. Related Party Transactions
December 31,
2011 2010
Accounts receivable $ 78,282 $ 22,297
Prepaid assets and other assets $2,229 $5,010
Accounts payable and accrued expenses $ 4,736 $ 11,161
Other current liabilities $ 13,953 $
—
Other long-term liabilities $ 35,147 $
—
Year Ended December 31,
2011 2010 2009
Revenue $ 493,350 $ 50,808 $ 2,230
Cost of goods and services and network costs (inclusive of capitalized costs) $ 162,717 $ 104,883 $ 75,283
Selling, general and administrative (inclusive of capitalized costs) $ 31,453 $ 7,150 $ 10,773