Clearwire 2008 Annual Report Download - page 106

t
erm ava
il
a
bl
e-
f
or-sa
l
e
i
nvestments an
d
are state
d
at
f
a
i
rva
l
ue. Unrea
li
ze
d
ga
i
ns an
dl
osses t
h
at are
d
eeme
d
t
emporary are recor
d
e
d
w
i
t
hi
n accumu
l
ate
d
ot
h
er compre
h
ens
i
ve
i
ncome (
l
oss). Rea
li
ze
dl
osses are recogn
i
ze
d
when a decline in fair value is determined to be other-than-temporar
y
, and both realized
g
ains and losses are
d
eterm
i
ne
d
on t
h
e
b
as
i
so
f
t
h
e spec
ifi
c
id
ent
ifi
cat
i
on met
h
o
d
. For t
h
e year en
d
e
d
Decem
b
er 31, 2008, we recor
d
e
d
an other-then-temporary impairment loss of
$
17.0 million related to one of our auction rate securities issued by a
m
onoline insurance compan
y
. Followin
g
down
g
rades in credit ratin
g
s in November 2008, the insurance compan
y
e
xercised their “put option” in December 2008, forcing the exchange of our existing security for perpetual preferred
e
qu
i
t
y
o
f
t
h
e
i
nsurance compan
y.
Th
e cost an
df
a
i
rva
l
ue o
fi
nvestments at Decem
b
er 31, 2008,
b
y contractua
l
years-to-matur
i
ty, are presente
d
below (in thousands):
C
ost Fa
i
r Valu
e
D
ue w
i
t
hi
n one
y
ea
r
........................................
$1,899,529 $1,901,74
9
D
ue
b
etween one an
dfi
ve year
s
...............................
——
D
ue
i
n ten years or greate
r
...................................
1
2
,
918 12
,
918
No contractua
l
matur
i
t
i
es
.
...................................
6,
0
5
66
,
0
5
6
Tota
l
.................................................
$1,918,503 $1,920,72
3
Auction rate securities are variable rate debt instruments whose interest rates are normally reset approximately
e
very 30 or 90
d
ays t
h
roug
h
an auct
i
on process. Our
i
nvestments
i
n auct
i
on rate secur
i
t
i
es represent
i
nterests
i
n
c
ollateralized debt obli
g
ations, which we refer to as CDOs, supported b
y
preferred equit
y
securities of insuranc
e
c
ompanies and financial institutions with stated final maturit
y
dates in 2033 and 2034. The total fair value and cost
of our security interests in CDOs as of December 31, 2008 was
$
12.9 million. We also own auction rate securities
t
hat are Auction Market Preferred securities issued b
y
a monoline insurance compan
y
and these securities ar
e
p
erpetual and do not have a final stated maturit
y
. The total fair value and cost of our Auction Market Preferred
s
ecurities as of December 31, 2008 was
$
6.1 million. These securities were rated BBB or Ba1 by Standard & Poor
s
or Moo
dy
’s rat
i
n
g
serv
i
ces, respect
i
ve
ly
, at Decem
b
er 31, 2008. Current mar
k
et con
di
t
i
ons
d
o not a
ll
ow us t
o
e
stimate when the auctions for our auction rate securities will resume, if ever, or if a secondar
y
market will develop
for these securities. As a result, our auction rate securities are classified as long-term investments
.
5
. Property, Plant and Equipmen
t
P
ropert
y
,p
l
ant an
d
equ
i
pment as o
f
Decem
b
er 31, 2008 an
d
2007 cons
i
ste
d
o
f
t
h
e
f
o
ll
ow
i
n
g
(
i
nt
h
ousan
d
s):
U
se
f
ul
Lives (Years
)
December
31,
2008
December
31,
200
7
Network and base station e
q
ui
p
men
t
........... 5-30 $ 353,752 $ 82,531
C
ustomer
p
remise e
q
ui
p
men
t
................. 2
23
,
141
—
Furn
i
ture,
fi
xtures an
d
e
q
u
ip
men
t
..............
3
-7 167,325 24,68
3
Lesser o
f
use
f
u
l
Lease
h
o
ld i
mprovements . .
.
.................
l
ife or lease term 12
,
78
6
1
,
027
C
onstruct
i
on
i
n progress . .
.
................. N
/
A 823
,
193 388
,
2
58
1
,380,197 496,499
Less: accumulated de
p
reciation and amortization . . (60,2
5
2) (4,603)
$
1,319,945 $491,896
94
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)