Clearwire 2008 Annual Report Download - page 112

diff
erence assoc
i
ate
d
w
i
t
h
our
i
nvestment
i
nC
l
earw
i
re Commun
i
cat
i
ons w
ill
reverse w
i
t
hi
nt
h
e carry
f
orwar
d
p
er
i
o
d
o
f
t
h
e net operat
i
ng
l
osses an
d
accor
di
ng
l
y represents re
l
evant
f
uture taxa
bl
e
i
ncome.
T
he income tax rate computed usin
g
the federal statutor
y
rates is reconciled to the reported effective incom
e
t
ax rate as
f
o
ll
o
w
s
:
2008 2007
Yea
r
E
n
ded
December 31
,
Fe
d
era
l
statutor
yi
ncome tax rate
.......................................
35
.
0
%
35
.
0%
State
i
ncome taxes
(
net o
ff
e
d
era
lb
ene
fi
t
)
................................
(
1.5
)(
0.8
)
O
t
h
er
,
net
.
.......................................................
0
.2
0
.
2
V
aluation allowanc
e
.
...............................................
.
(5
0.3
)(
42.2
)
Effective income tax rate
.............................................
(16.6)% (7.8)
%
We file income tax returns for Clearwire and our subsidiaries in the U.S. Federal
j
urisdiction and various stat
e
an
df
ore
i
gn
j
ur
i
s
di
ct
i
ons. As o
f
Decem
b
er 31, 2008, t
h
e tax returns
f
or O
ld
C
l
earw
i
re
f
or t
h
e years 2003 t
h
roug
h
2
007 rema
i
n open to exam
i
nat
i
on
by
t
h
e Interna
l
Revenue Serv
i
ce an
d
var
i
ous state tax aut
h
or
i
t
i
es. In a
ddi
t
i
on, O
ld
C
l
earw
i
re acqu
i
re
d
U.S. an
df
ore
ig
n ent
i
t
i
es w
hi
c
h
operate
d
pr
i
or to 2003. Most o
f
t
h
e acqu
i
re
d
ent
i
t
i
es
g
enerate
d
losses for income tax purposes and certain tax returns remain open to examination by U.S. and foreign ta
x
aut
h
or
i
t
i
es
f
or tax
y
ears as
f
ar
b
ac
k
as 1998
.
O
ur po
li
c
yi
s to reco
g
n
i
ze an
yi
nterest re
l
ate
d
to unreco
g
n
i
ze
d
tax
b
ene
fi
ts
i
n
i
nterest expense or
i
nteres
t
income. We recognize penalties as additional income tax expense. As December 31, 2008, we had no uncertain tax
p
os
i
t
i
ons an
d
t
h
ere
f
ore accrue
d
no
i
nterest or pena
l
t
i
es re
l
ate
d
to uncerta
i
n tax pos
i
t
i
ons.
10
. Lon
g
-term debt
Long-term
d
e
b
t at Decem
b
er 31, 2008 cons
i
ste
d
o
f
t
h
e
f
o
ll
ow
i
ng (
i
nt
h
ousan
d
s)
:
S
en
i
or Term Loan Fac
ili
ty,
d
ue
i
n 2011, 1% o
f
pr
i
nc
i
pa
ld
ue annua
ll
y; res
id
ua
l
a
t
m
atur
i
t
y
.
.
........................................................
$
1
,
364
,
79
0
Less: current port
i
on..................................................
(
14,292
)
T
otal long-term deb
t
..................................................
$
1
,
350
,
498
S
enior Term Loan Facilit
y
—
In con
j
unction with the Transactions, we assumed from Old Clearwire the Senio
r
Term Loan Facilit
y
, which had a balance as of the Closin
g
of $1.19 billion, net of discount. Concurrent with th
e
assumption of the Senior Term Loan Facility, we made a payment of
$
50.0 million for certain financing fees whic
h
r
epresented an obli
g
ation of Old Clearwire. Further, based on our assessment of the fair value of the Senior Term
L
oan Facilit
y
at the date of the Transactions, we recorded a $50.0 million discount a
g
ainst the principal balance. As
o
f December 31
,
2008
,
we have recorded
$
1.7 million for the accretion of debt discount. The Senior Term Loan
F
acilit
y
retains the terms and conditions as set forth in the Amended Credit A
g
reement. In addition, on December 1,
2
008, we elected to add the Sprint Tranche under the Amended Credit Agreement in the amount of
$
179.2 millio
n
f
or t
h
ere
i
m
b
ursement o
f
t
h
e rema
i
n
i
ng o
bli
gat
i
on o
f
t
h
e Spr
i
nt Pre-C
l
os
i
ng F
i
nanc
i
ng Amount. T
h
e Sen
i
or Term
L
oan Fac
ili
t
y
requ
i
res quarter
ly
pa
y
ments
i
nt
h
e amount o
f
1.00% o
f
t
h
eor
igi
na
l
pr
i
nc
i
pa
l
amount per
y
ear, w
i
t
h
t
he
r
emaining balance due on May 28, 2011
.
Th
e rate o
fi
nterest
f
or
b
orrow
i
ngs un
d
er t
h
e Sen
i
or Term Loan Fac
ili
ty
i
st
h
e LIBOR
b
ase rate p
l
us a marg
i
no
f
6.00%, with a base rate bein
g
no lower than 2.75% per annum or the alternate base rate, which is equal to the
g
reate
r
o
f (a) the Prime Rate or (b) the Federal Funds Effective rate
p
lu
s
1
⁄
1
2
⁄
⁄
of 1.00%, plus a mar
g
in of 5.00%, with a base
r
ate bein
g
no lower than 4.75% per annum. These mar
g
in rates increase b
y
50 basis points on each of the sixth,
t
welfth, and eighteen month anniversaries of the Closing. At our option, the accrued interest resulting from the
100
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)