Clearwire 2009 Annual Report Download - page 66

acqu
i
s
i
t
i
on o
f
O
ld
C
l
earw
i
re, compare
d
to approx
i
mate
l
y one mont
hi
n 2008
f
or t
h
e per
i
o
d
a
f
ter t
h
eC
l
os
i
ng on
November 28, 2008.
Dur
i
n
g
t
h
e
y
ear en
d
e
d
Decem
b
er 31, 2007, su
b
stant
i
a
lly
a
ll
o
f
t
h
e cap
i
ta
l
expen
di
tures
by
t
h
e Spr
i
nt W
i
MA
X
Bus
i
ness represente
d
construct
i
on wor
ki
n pro
g
ress an
d
t
h
ere
f
ore ver
yli
tt
l
e
d
eprec
i
at
i
on was recor
d
e
d.
We expect
d
eprec
i
at
i
on an
d
amort
i
zat
i
on w
ill
cont
i
nue to
i
ncrease as a
ddi
t
i
ona
l
4G mar
k
ets are
l
aunc
h
e
d
an
d
p
laced into service durin
g
2010
.
S
pectrum Lease Expense
(
In thousands, except percenta
g
es) 2009 2008 2007
P
ercentage
C
han
g
e 2009
V
ersus
2008
P
ercentag
e
C
han
g
e 2008
V
ersus
200
7
Yea
r
E
n
ded
D
ecember 31
,
Spectrum
l
ease expens
e
..........
$
259
,
359
$
90
,
032
$
60
,
051 188.1% 49.9
%
T
ota
l
spectrum
l
ease expense
i
ncrease
di
n 2009 compare
d
to 2008 as a
di
rect resu
l
to
f
as
i
gn
ifi
cant
i
ncrease
in
t
he number of spectrum leases held b
y
us. We doubled the number of leased call si
g
ns when we acquired all of the
O
ld Clearwire leases. The increase is also due to 12 months s
p
ectrum lease ex
p
ense recorded on leases in 2009 for
s
pectrum
l
eases acqu
i
re
df
rom O
ld
C
l
earw
i
re, compare
d
to approx
i
mate
l
y one mont
hi
n 2008
f
or t
h
e per
i
o
d
a
f
te
r
th
eC
l
os
i
n
g
on Novem
b
er 28, 2008
.
Many o
f
t
h
e
l
eases were entere
di
nto
b
e
f
ore 2007 an
d
t
h
e per
i
o
di
c payments
b
e
f
ore January 1, 2007 were
f
un
d
e
dby
Spr
i
nt
.
W
i
t
h
t
h
es
i
gn
ifi
cant num
b
er o
f
new spectrum
l
eases an
d
t
h
e
i
ncreas
i
ng cost o
f
t
h
ese
l
eases, we expect our
s
pectrum
l
ease expense to
i
ncrease. As we rene
g
ot
i
ate t
h
ese
l
eases, t
h
e
y
are rep
l
ace
d
w
i
t
h
new
l
eases, usua
lly
at
a
hi
g
her lease cost per month, but with lon
g
er terms
.
T
ransaction Re
l
ate
d
Ex
p
ense
s
(
In thousands, except percentages
)
2009 2008 200
7
P
ercenta
g
e
C
han
g
e 2009
V
ersus
2008
P
ercenta
ge
C
han
g
e 2008
V
ersus
200
7
Y
ea
rEn
ded
December
31,
T
ransaction related ex
p
ense
s
.............. $—
$
82,960 $— N/M N/M
T
ransaction related expenses in 2008 include a one-time $80.6 million settlement loss resultin
g
from th
e
t
ermination of spectrum lease a
g
reements under which Sprint leased spectrum to Old Clearwire prior to the Closin
g
.
A
s part o
f
t
h
eC
l
os
i
ng, 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
th
ose a
g
reements to our
b
us
i
ness. As a resu
l
to
f
t
h
eC
l
os
i
n
g
,t
h
e spectrum
l
ease a
g
reements were e
ff
ect
i
ve
ly
t
erminated, and the settlement of those a
g
reements was accounted for as a separate element apart from the busines
s
c
ombination. The settlement loss recognized from the termination was valued based on the amount by which th
e
a
g
reements were
f
avora
bl
eorun
f
avora
bl
e to our
b
us
i
ness as compare
d
to current mar
k
et rates.
I
nterest Expens
e
(
In thousands, except percentages
)
2009 2008 200
7
P
ercentage
Change 2009
Versus 2008
P
ercentag
e
C
hange 2008
V
ersus 2007
Yea
r
E
n
ded
December 31,
I
nterest expens
e
..................
.
$(
69,468
)$(
16,545
)$
—
(
319.9
)
%N/
M
We incurred twelve months of interest costs totaling
$
209.6 million, which were partially offset by capitalized
i
nterest of
$
140.2 million for the
y
ear ended December 31, 2009. Interest expense for 2009 also includes an
ad
j
ustment to accrete the debt to par value. Interest expense for 2008 included $7.9 million of interest expense
r
ecorded on the note payable to Sprint for the repayment of an obligation to reimburse Sprint for financing the Sprin
t
Wi
MAX Bus
i
ness
b
etween Apr
il
1, 2008 an
d
t
h
eC
l
os
i
ng, w
hi
c
h
we re
f
er to as t
h
e Spr
i
nt Pre-C
l
os
i
ng F
i
nanc
i
n
g
A
mount, and one month of interest expense totalin
g$
8.6 million on the lon
g
-term debt acquired from Old
Clearwire.
56