Clearwire 2009 Annual Report Download - page 116

Expense recor
d
e
d
re
l
ate
d
to spectrum an
d
operat
i
ng
l
eases was as
f
o
ll
ows (
i
nt
h
ousan
d
s):
2009 2008 200
7
Y
ear Ended December
31,
S
p
ectrum
l
ease ex
p
ense . . .
.............................
$201,461 $72,923 $60,05
1
A
mort
i
zat
i
on o
f
prepa
id
spectrum
li
cense
s
.................
.
5
7
,
898 17
,
109 —
T
ota
l
spectrum
l
ease expense
............................
$
259
,
359
$
90
,
032
$
60
,
05
1
O
perat
i
n
gl
ease expense . .
.
.............................
$245,351 $51,345 $ 2,000
O
t
h
er s
p
ectrum commitments —We
h
ave comm
i
tments to prov
id
eC
l
earw
i
re serv
i
ces to certa
i
n
l
essors
in
launched markets, and reimbursement of capital equipment and third-part
y
service expenditures of the lessors ove
r
th
e term o
f
t
h
e
l
ease. We accrue a mont
hl
yo
bli
gat
i
on
f
or t
h
e serv
i
ces an
d
equ
i
pment
b
ase
d
on t
h
e tota
l
est
i
mate
d
ava
il
a
bl
e serv
i
ce cre
di
ts
di
v
id
e
db
yt
h
e term o
f
t
h
e
l
ease. T
h
eo
bli
gat
i
on
i
sre
d
uce
d
as actua
li
nvo
i
ces are presente
d
and paid to the lessors. Durin
g
the
y
ears ended December 31, 2009 and 2008 we satisfied $779,000 and $76,000,
r
espect
i
ve
l
y, re
l
ate
d
to t
h
ese comm
i
tments. T
h
e max
i
mum rema
i
n
i
ng comm
i
tment at Decem
b
er 31, 2009
is
$
95.7 million and is expected to be incurred over the term of the related lease agreements, which generally range
f
rom 15-30
y
ears.
A
s of December 31, 2009, we have si
g
ned a
g
reements to acquire approximatel
y$
30.0 million in new
s
pectrum, su
bj
ect to c
l
os
i
n
g
con
di
t
i
ons. T
h
ese transact
i
ons are expecte
d
to
b
e comp
l
ete
d
w
i
t
hi
nt
h
e next twe
l
ve
months
.
N
etwor
k
e
q
ui
p
ment
p
urc
h
ase o
bl
igation
s
—
We
h
ave purc
h
ase comm
i
tments w
i
t
h
ta
k
e-or-pay o
bli
gat
i
ons
and/or volume commitments for equipment that are non-cancelable and outstandin
g
purchase orders for networ
k
equ
i
pment
f
or w
hi
c
h
we
b
e
li
eve
d
e
li
very
i
s
lik
e
l
y to occur
.
O
ther purchase obligation
s
—
We have purchase obli
g
ations that include minimum purchases we have
committed to purchase from suppliers over time and/or unconditional purchase obligations where we guarantee t
o
ma
k
eam
i
n
i
mum payment to supp
li
ers
f
or goo
d
san
d
serv
i
ces regar
dl
ess o
f
w
h
et
h
er supp
li
ers
f
u
ll
y
d
e
li
ver t
h
em
.
T
h
e
yi
nc
l
u
d
e, amon
g
ot
h
er t
hi
n
g
s, a
g
reements
f
or
b
ac
kh
au
l
, customer
d
ev
i
ces an
d
IT re
l
ate
d
an
d
ot
h
er serv
i
ces. I
n
addition, we are part
y
to various arran
g
ements that are conditional in nature and create an obli
g
ation to mak
e
p
ayments only upon the occurrence of certain events, such as the actual delivery and acceptance of products o
r
s
erv
i
ces. Because
i
t
i
s not poss
ibl
etopre
di
ct t
h
et
i
m
i
n
g
or amounts t
h
at ma
yb
e
d
ue un
d
er t
h
ese con
di
t
i
ona
l
arran
g
ements, no such amounts have been included in the table above. The table above also excludes blanket
p
urchase order amounts where the orders are sub
j
ect to cancellation or termination at our discretion or where th
e
q
uant
i
ty o
f
goo
d
s or serv
i
ces to
b
e purc
h
ase
d
or t
h
e payment terms are un
k
nown
b
ecause suc
h
purc
h
ase or
d
ers ar
e
not firm commitments
.
AMDOCS A
g
reemen
t
— On Marc
h
31, 2009, we entere
di
nto a Customer Care an
d
B
illi
ng Serv
i
ce
s
Ag
reement, which we refer to as the AMDOCS A
g
reement, with AMDOCS Software S
y
stems Limited, which
w
e refer to as AMDOCS, under which AMDOCS will provide a customized customer care and billing platform
,
whi
c
h
we re
f
er to as t
h
eP
l
at
f
orm, to us. In connect
i
on w
i
t
h
t
h
e prov
i
s
i
on o
f
t
h
ese serv
i
ces an
d
t
h
e esta
bli
s
h
ment o
f
th
eP
l
at
f
orm, AMDOCS w
ill
a
l
so
li
cense certa
i
no
fi
ts so
f
tware to us
.
T
he initial term of the AMDOCS Agreement commences on March 31, 2009 and ends on the earliest to occur
o
f
seven years
f
rom t
h
e
d
ate o
f
t
h
e AMDOCS Agreement (to
b
e exten
d
e
d
un
d
er certa
i
nc
i
rcumstances re
l
at
i
ng t
o
c
onversion of subscribers to the new s
y
stem) or the termination of the AMDOCS A
g
reement pursuant to its terms,
as defined. Under the terms of the AMDOCS A
g
reement, we are required to pa
y
AMDOCS licensin
g
fees,
i
mp
l
ementat
i
on
f
ees, mont
hl
ysu
b
scr
ib
er
f
ees, an
d
re
i
m
b
ursa
bl
e expenses. In a
ddi
t
i
on, t
h
e AMDOCS Agreemen
t
c
ontains detailed terms
g
overnin
g
implementation and maintenance of the Platform; performance specifications
;
acceptance testin
g
; char
g
es, credits and pa
y
ments; and warranties. We capitalized $52.9 million in costs incurred
d
ur
i
ng t
h
e app
li
cat
i
on
d
eve
l
opment stage assoc
i
ate
d
w
i
t
h
t
h
eP
l
at
f
orm
f
or t
h
e year en
d
e
d
Decem
b
er 31, 2009
.
10
6
C
LEARWIRE
CO
RP
O
RATI
O
N AND
SU
B
S
IDIARIE
S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)