Clearwire 2010 Annual Report Download - page 90

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We incurred the following losses associated with property, plant and equipment for the years ended Decem-
ber 31, 2010, 2009 and 2008 (in thousands):
2010 2009 2008
Year Ended December 31,
Loss from abandonment and impairment of network and other assets:
Abandonment of network projects.......................... $180,001 $ 7,916 $—
Impairment of assets held by international subsidiaries(1) ........ 10,351 — —
Total loss from abandonment and impairment of network and
other assets ....................................... 190,352 7,916 —
Charges for identified differences between recorded amounts and the
results of physical counts and excessive and obsolete
equipment(2) ......................................... 159,160 52,958 —
Total losses on property, plant and equipment ................... $349,512 $60,874 $—
(1) Includes impairment losses of $7.4 million on spectrum licenses and other intangible assets.
(2) Included in Cost of goods and services and network costs on the consolidated statements of operations.
5. Spectrum Licenses
Owned and leased spectrum licenses as of December 31, 2010 and 2009 consisted of the following (in
thousands):
Wtd Avg
Lease Life
Gross Carrying
Value
Accumulated
Amortization
Net Carrying
Value
Gross Carrying
Value
Accumulated
Amortization
Net Carrying
Value
December 31, 2010 December 31, 2009
Indefinite-lived owned
spectrum . . . ........... Indefinite $3,110,871 $ — $3,110,871 $3,082,401 $ — $3,082,401
Definite-lived owned
spectrum . . . ........... 16-20 years 100,474 (8,630) 91,844 118,069 (6,268) 111,801
Spectrum leases and prepaid
spectrum . . . ........... 25years 1,320,309 (120,370) 1,199,939 1,323,405 (62,937) 1,260,468
Pending spectrum and transition
costs ................ N/A 14,838 — 14,838 40,464 — 40,464
Total spectrum licenses ...... $4,546,492 $(129,000) $4,417,492 $4,564,339 $(69,205) $4,495,134
Indefinite and Definite-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 and internationally. 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 in the applicable country. These licenses are considered indefinite-lived intangible assets, except for the
licenses acquired in Spain and Germany, which are considered definite-lived intangible assets due to limited license
renewal history in these countries.
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. As part of the purchase accounting for the Transactions, favorable spectrum leases of
$1.0 billion were recorded at the Closing. The favorable component of the acquired spectrum leases has been
capitalized as an asset and is amortized over the lease term.
85
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)