Clearwire 2009 Annual Report Download - page 81

(2) Networ
k
equ
i
pment purc
h
ase o
bli
gat
i
ons represent purc
h
ase comm
i
tments w
i
t
h
ta
k
e-or-pay o
bli
gat
i
ons an
d
/o
r
volume commitments for equipment that are non-cancelable and outstandin
g
purchase orders for network
e
quipment for which we believe delivery is likely to occur
.
(3) Other purchase obli
g
ations include minimum purchases we have committed to purchase from suppliers over
t
ime and/or unconditional purchase obli
g
ations where we
g
uarantee to make a minimum pa
y
ment to supplier
s
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
ey
i
nc
l
u
d
e, among ot
h
er t
hi
ngs
,
a
g
reements for backhaul, customer devices and IT related and other services. The amounts actuall
y
paid unde
r
s
ome of these “other” a
g
reements will likel
y
be hi
g
her than the minimum commitments due to variabl
e
c
omponents o
f
t
h
ese agreements. T
h
e more s
i
gn
ifi
cant var
i
a
bl
e components t
h
at
d
eterm
i
ne t
h
eu
l
t
i
mate
o
blig
at
i
on owe
di
nc
l
u
d
e
h
ours contracte
d
,su
b
scr
ib
ers an
d
ot
h
er
f
actors
.
(4) In a
ddi
t
i
on, we are party to var
i
ous arrangements t
h
at are con
di
t
i
ona
li
n nature an
d
create an o
bli
gat
i
on to ma
ke
p
ayments on
l
y upon t
h
e occurrence o
f
certa
i
n events, suc
h
as t
h
e actua
ld
e
li
very an
d
acceptance o
f
pro
d
ucts o
r
s
ervices. Because it is not possible to predict the timin
g
or amounts that ma
y
be due under these conditional
arrangements, no suc
h
amounts
h
ave
b
een
i
nc
l
u
d
e
di
nt
h
eta
bl
ea
b
ove. T
h
eta
bl
ea
b
ove a
l
so exc
l
u
d
es
bl
an
k
et
p
urc
h
ase or
d
er amounts w
h
ere t
h
eor
d
ers are su
bj
ect to cance
ll
at
i
on or term
i
nat
i
on at our
di
scret
i
on or w
h
ere
t
he quantit
y
of
g
oods or services to be purchased or the pa
y
ment terms are unknown because such purchas
e
orders are not firm commitments
.
We do not have any obligations that meet the definition of an off-balance-sheet arrangement that have or are
r
easona
bly lik
e
ly
to
h
ave a mater
i
a
l
e
ff
ect on our
fi
nanc
i
a
l
statements
.
Recent Accounting Pronouncement
s
I
n June and December 2009, the Financial Accountin
g
Standards Board, which we refer to as the FASB, issued
new accountin
gg
uidance that amends the consolidation
g
uidance applicable to variable interest entities. The
amen
d
ments w
ill
a
ff
ect t
h
e overa
ll
conso
lid
at
i
on ana
l
ys
i
sun
d
er t
h
e current account
i
ng gu
id
ance. T
h
ene
w
accountin
gg
uidance is effective for fiscal
y
ears and interim periods be
g
innin
g
after November 1
5
, 2009. We
are currentl
y
evaluatin
g
the impact of the new
g
uidance on our financial condition and results of operations.
I
nAu
g
ust 2009, the FASB issued new accountin
gg
uidance for the fair value measurement of liabilities when a
q
uote
d
pr
i
ce
i
n an act
i
ve mar
k
et
i
s not ava
il
a
bl
e. We a
d
opte
d
t
h
e new account
i
ng gu
id
ance on Octo
b
er 1, 2009. T
he
a
d
opt
i
on
did
not
h
ave an
yi
mpact on our
fi
nanc
i
a
l
con
di
t
i
on or resu
l
ts o
f
operat
i
ons.
I
n Octo
b
er 2009, t
h
e FASB
i
ssue
d
new account
i
n
gg
u
id
ance t
h
at amen
d
st
h
e revenue reco
g
n
i
t
i
on
f
or mu
l
t
i
p
l
e
-
element arran
g
ements and expands the disclosure requirements related to such arran
g
ements. The new
g
uidanc
e
amends the criteria for separating consideration in multiple-deliverable arrangements, establishes a selling pric
e
hi
erarc
hy f
or
d
eterm
i
n
i
n
g
t
h
ese
lli
n
g
pr
i
ce o
f
a
d
e
li
vera
bl
e, e
li
m
i
nates t
h
e res
id
ua
l
met
h
o
d
o
f
a
ll
ocat
i
on, an
d
r
equires the application of relative sellin
g
price method in allocatin
g
the arran
g
ement consideration to all
deliverables. The new accountin
gg
uidance is effective for fiscal
y
ears be
g
innin
g
after June 1
5
, 2010. We are
current
l
yeva
l
uat
i
ng t
h
e
i
mpact o
f
t
h
enewgu
id
ance on our
fi
nanc
i
a
l
con
di
t
i
on an
d
resu
l
ts o
f
operat
i
ons
.
I
n January 2010, t
h
e FASB
i
ssue
d
new account
i
ng gu
id
ance t
h
at requ
i
res new
di
sc
l
osures re
l
ate
d
to
f
a
i
rva
l
ue
measurements. The new
g
uidance requires separate disclosure for transfers between Level 1 and 2 and the activitie
s
in Level 3 reconciliation on a gross basis. The new accounting guidance is effective for fiscal years and interim
p
eriods beginning after December 1
5
, 2009, except for the new disclosures related to Level 3 activities, which are
effective for fiscal
y
ears and interim periods be
g
innin
g
after December 15, 2010. The new accountin
gg
uidance onl
y
amended the disclosure re
q
uirements related to fair value measurements, therefore we do not ex
p
ect the ado
p
tion t
o
have any impact on our financial condition or results of operations
.
ITEM 7A
.
Q
uantitative and
Q
ualitative Disclosures About Market Risk
Market risk is the potential loss arisin
g
from adverse chan
g
es in market rates and prices, such as interest rates,
foreign currency exchange rates and changes in the market value of investments due to credit risk
.
7
1