Sprint - Nextel 2012 Annual Report Download - page 181

Table of Contents
Owned and leased spectrum licenses as of December 31, 2012 and 2011 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, 2012, 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):
F - 59
6.
Spectrum Licenses
December 31, 2012
December 31, 2011
Gross Carrying
Value
Accumulated
Amortization
Net Carrying
Value
Gross Carrying
Value
Accumulated
Amortization
Net Carrying
Value
Indefinite-lived owned spectrum
$
3,104,129
$
—
$
3,104,129
$
3,098,983
$
—
$
3,098,983
Spectrum leases and prepaid spectrum
1,370,317
(237,317
)
1,133,000
1,364,907
(181,033
)
1,183,874
Pending spectrum and transition costs
12,492
—
12,492
15,397
—
15,397
Total spectrum licenses
$
4,486,938
$
(237,317
)
$
4,249,621
$
4,479,287
$
(181,033
)
$
4,298,254
Year Ended December 31,
2012
2011
2010
Supplemental Information (in thousands):
Amortization of prepaid and other spectrum licenses
$
56,554
$
55,870
$
59,653
Total
2013
$
54,401
2014
54,108
2015
53,351
2016
52,805
2017
51,385
Thereafter
866,950
Total
$
1,133,000