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Table of Contents
Index to Consolidated Financial Statements
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
F-99
Spectrum lease obligations - Certain of the leases provide for minimum lease payments, additional charges and
escalation clauses. Leased spectrum agreements have terms of up to 30 years and the weighted average remaining lease
term at July 9, 2013 was approximately 23 years, including renewal terms. We expect that all renewal periods in our
spectrum leases will be renewed by us.
Spectrum service credits - We have commitments to provide Clearwire services to certain lessors in launched markets,
and to reimburse lessors for certain capital equipment and third-party service expenditures, over the term of the lease.
We accrue a monthly obligation for the services and equipment based on the total estimated available service credits
divided by the term of the lease. The obligation is reduced as actual invoices are presented and paid to the lessors.
During the 190 days ended July 9, 2013, and the years ended December 31, 2012 and 2011 we satisfied $1.2 million,
$3.3 million and $4.5 million, respectively, related to these commitments. The maximum remaining commitment at
July 9, 2013 is $101.7 million and is expected to be incurred over the term of the related lease agreements, which
generally range from 15-30 years.
Purchase agreements - Included in the table above are purchase commitments with take-or-pay obligations and/or
volume commitments for equipment that are non-cancelable. The table above also includes other obligations we have
that include minimum purchase commitments with certain suppliers over time for goods and services regardless of
whether suppliers fully deliver them. They include, among other things, agreements for backhaul, subscriber devices
and IT related and other services.
In addition, we are party to various arrangements that are conditional in nature and create an obligation to
make payments only upon the occurrence of certain events, such as the actual delivery and acceptance of products or
services. Because it is not possible to predict the timing or amounts that may be due under these conditional
arrangements, no such amounts have been included in the table above. The table above also excludes blanket
purchase order amounts where the orders are subject to cancellation or termination at our discretion or where the
quantity of goods or services to be purchased or the payment terms are unknown because such purchase orders are
not firm commitments.
Legal proceedings - As more fully described below, we are involved in a variety of lawsuits, claims, investigations
and proceedings concerning intellectual property, business practices, commercial and other matters. We determine
whether we should accrue an estimated loss for a contingency in a particular legal proceeding by assessing whether a
loss is deemed probable and can be reasonably estimated. We reassess our views on estimated losses on a quarterly
basis to reflect the impact of any developments in the matters in which we are involved. Legal proceedings are inherently
unpredictable, and the matters in which we are involved often present complex legal and factual issues. We vigorously
pursue defenses in legal proceedings and engage in discussions where possible to resolve these matters on terms
favorable to us, including pursuing settlements where we believe it may be the most cost effective result for the Company.
It is possible, however, that our business, financial condition and results of operations in future periods could be
materially and adversely affected by increased litigation expense, significant settlement costs and/or unfavorable damage
awards.
Throughout the legal proceedings disclosure, we use the terms Clearwire and the Company to refer to
Clearwire Corporation, Clearwire Communications LLC, Clear Wireless LLC and its subsidiaries.
Consumer and Employment Purported Class Actions and Investigation(s)
In April 2009, a purported class action lawsuit was filed against Clearwire U.S. LLC in Superior Court in King
County, Washington by a group of five plaintiffs (Chad Minnick, et al.). The lawsuit generally alleges that we
disseminated false advertising about the quality and reliability of our services; imposed an unlawful early
termination fee, which we refer to as ETF; and invoked allegedly unconscionable provisions of our Terms of Service
to the detriment of subscribers. In November 2010, a purported class action lawsuit was filed against Clearwire by
Angelo Dennings in the U.S. District Court for the Western District of Washington. The complaint generally alleges
we slow network speeds when network demand is highest and that such network management violates our