Clearwire 2008 Annual Report Download - page 73

Transact
i
ons, Spr
i
nt contr
ib
ute
db
ot
h
t
h
e spectrum
l
ease agreements an
d
t
h
e spectrum assets un
d
er
l
y
i
ng t
h
os
e
a
g
reements to our business. As a result of the Transactions, the spectrum lease a
g
reements were effectivel
y
t
erminated, and the settlement of those agreements was accounted for as a separate element apart from the busines
s
c
om
bi
nat
i
on. T
h
e sett
l
ement
l
oss recogn
i
ze
df
rom t
h
e term
i
nat
i
on was va
l
ue
db
ase
d
on t
h
e amount
b
yw
hi
c
h
t
he
a
g
reements were favorable or unfavorable to our business as compared to current market rates.
I
nterest expens
e
(
In thousands, except percenta
g
es) 2008 2007
Dolla
r
C
han
ge
P
ercenta
ge
C
han
g
e
Yea
r
E
n
ded
D
ecember 31
,
I
nterest expens
e
...............................
$(
16,545
)$
—
$(
16,545
)
N/M
T
he increase in interest expense was due to
$
7.9 million of interest expense recorded on the note payable t
o
S
print for the repa
y
ment of the Sprint Pre-Closin
g
Financin
g
Amount and the
$
8.6 million of interest expense
r
ecor
d
e
d
on t
h
e
l
on
g
-term
d
e
b
t acqu
i
re
df
rom O
ld
C
l
earw
i
re as part o
f
t
h
eC
l
os
i
n
g
.
Other-than-temporary impairment loss and realized loss on investment
s
(
In thousands, except percenta
g
es) 2008 2007
Dolla
r
C
han
ge
P
ercenta
ge
C
han
g
e
Yea
r
E
n
ded
D
ecember 31
,
O
t
h
er-t
h
an-temporar
yi
mpa
i
rment
l
oss an
d
rea
li
ze
dl
os
s
o
n
i
nvestments, ne
t
...........................
$
(17,036) $— $(17,036) N/M
Th
e
i
ncrease
i
nt
h
eot
h
er-t
h
an-temporary
i
mpa
i
rment
l
oss an
d
rea
li
ze
dl
oss on
i
nvestments
i
spr
i
mar
il
y
d
ue to a
d
ec
li
ne
i
nt
h
eva
l
ue o
fi
nvestment secur
i
t
i
es
f
or t
h
e per
i
o
df
o
ll
ow
i
n
g
t
h
eC
l
os
i
n
g
,w
hi
c
h
we
d
eterm
i
ne
d
to
b
eot
h
er
t
han temporary. During the year ended December 31, 2008, we incurred other-than-temporary impairment losses o
f
$
17.0 million related to a decline in the estimated fair values of our investment securities.
T
ax
p
rovision
(
In thousands, except percentages
)
2008 2007
Dollar
Chang
e
Percenta
ge
Change
Year Ende
d
December
31,
I
ncome tax
p
rovisio
n
....................... $
(
61,607
)
$
(
16,362
)
$
(
45,245
)
276.5
%
Th
e
i
ncrease
i
nt
h
e
i
ncome tax prov
i
s
i
on
i
spr
i
mar
ily d
ue to
i
ncrease
dd
e
f
erre
d
tax
li
a
bili
t
i
es
f
rom a
ddi
t
i
ona
l
amortization taken for federal income tax purposes by the Sprint WiMAX Business on certain indefinite-lived
licensed spectrum prior to the Closing. The Sprint WiMAX Business incurred significant deferred tax liabilitie
s
r
e
l
ate
d
to t
h
e spectrum
li
censes. Due to t
h
e
i
n
d
e
fi
n
i
te-
li
ve
d
nature o
f
suc
hi
ntan
gibl
e assets, we can not est
i
mate t
he
amount or timin
g
,ifan
y
, of such deferred tax liabilities reversin
g
in future periods. Accordin
g
l
y
, these deferred tax
liabilities are not relevant future taxable income and their increase is not offset b
y
a release of valuation allowanc
e
on our net operat
i
ng
l
osses. T
h
e ongo
i
ng
diff
erence
b
etween
b
oo
k
an
d
tax amort
i
zat
i
on resu
l
te
di
nana
ddi
t
i
ona
l
deferred income tax provision of $61.4 million in 2008 prior to the Closin
g.
Non-controlling interests in net loss o
f
consolidated subsidiaries
(
In thousands, except percentages
)
2008 200
7
Do
ll
ar
Change
Percenta
ge
Change
Yea
r
E
n
ded
D
ecember 31
,
Non-contro
lli
n
gi
nterests
i
n net
l
oss o
f
conso
lid
ate
d
subs
i
d
i
a
ri
es
................................
$159,721 $— $159,721 N/M
Th
e non-contro
lli
n
gi
nterests
i
n net
l
oss represent t
h
ea
ll
ocat
i
on o
f
a port
i
on o
f
t
h
e net
l
oss to t
h
e non
-
c
ontro
lli
n
gi
nterests
i
n conso
lid
ate
d
su
b
s
idi
ar
i
es
b
ase
d
on t
h
e owners
hi
p
by
Spr
i
nt an
d
t
h
e Investors, ot
h
er t
h
an
G
oogle, of Clearwire Communications Class B Common Interests upon the Closing.
61