Clearwire 2008 Annual Report Download - page 14

CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
PA
RT I
E
xp
l
anatory
N
ote
On November 28, 2008, Clearwire Cor
p
oration (f/k/a New Clearwire Cor
p
oration), which we refer to a
s
Clearwire or the Company, completed the transactions contemplated by the Transaction Agreement and Plan o
f
Mer
g
er
d
ate
d
as o
f
Ma
y
7, 2008, as amen
d
e
d
,w
hi
c
h
we re
f
er to as t
h
e Transact
i
on A
g
reement, w
i
t
h
C
l
earw
i
re
Le
g
ac
y
LLC (f/k/a Clearwire Corporation), which we refer to as Old Clearwire, Sprint Nextel Corporation, whic
h
we refer to as S
p
rint, Comcast Cor
p
oration, which we refer to as Comcast, Time Warner Cable Inc., which we refer
t
oasT
i
me Warner Ca
bl
e, Br
i
g
h
t House Networ
k
s, LLC, w
hi
c
h
we re
f
er to as Br
i
g
h
t House, Goog
l
e Inc., w
hi
c
h
we
r
efer to as Goo
g
le, and Intel Corporation, which we refer to as Intel, and to
g
ether with Comcast, Time Warne
r
Ca
bl
e, Br
i
g
h
t House an
d
Goog
l
e, t
h
e Investors. For account
i
ng purposes, t
h
e transact
i
ons, w
hi
c
h
we re
f
er to as t
he
Transact
i
ons, are treate
d
as a reverse acqu
i
s
i
t
i
on w
i
t
h
t
h
eW
i
MAX
b
us
i
ness contr
ib
ute
df
rom Spr
i
nt, w
hi
c
h
we re
f
e
r
t
o as the Sprint WiMAX Business, deemed to be the accountin
g
acquirer. As a result, the financial results of Old
Clearwire prior to November 28, 2008 are not included as part of the Company’s reported financial statements
(a
l
t
h
oug
h
t
h
ey are
i
nc
l
u
d
e
d
as Ex
hibi
t 99.1 to t
hi
s report,
f
or
i
n
f
ormat
i
ona
l
purposes). T
h
e
hi
stor
i
ca
lfi
nanc
i
a
l
r
esu
l
ts o
f
t
h
e Compan
y
pr
i
or to Novem
b
er 29, 2008 are t
h
ose o
f
t
h
e Spr
i
nt W
i
MAX Bus
i
ness. Except as ot
h
erw
i
s
e
n
oted
,
references to “we
,
” “us
,
” or “our” refer to Clearwire and its subsidiaries
.
S
pecial Note Regarding Forward Looking
S
tatements
Thi
s Annua
l
Report on Form 10-K,
i
nc
l
u
di
ng t
h
e “Management’s D
i
scuss
i
on an
d
Ana
l
ys
i
so
f
F
i
nanc
i
a
l
Con
di
t
i
on an
d
Resu
l
ts o
f
Operat
i
ons” conta
i
ns “
f
orwar
d
-
l
oo
ki
n
g
statements” t
h
at represent our
b
e
li
e
f
s, pro
j
ect
i
on
s
and predictions about future events. These statements are necessarily subjective and involve known and unknow
n
r
isks, uncertainties and other important factors that could cause our actual results, performance or achievements, or
i
n
d
ustr
y
resu
l
ts, to
diff
er mater
i
a
lly f
rom an
yf
uture resu
l
ts, per
f
ormance or ac
hi
evement
d
escr
ib
e
di
nor
i
mp
li
e
dby
s
uch statements. Actual results ma
y
differ materiall
y
from the expected results described in our forward-lookin
g
s
tatements, including with respect to the correct measurement and identification of factors affecting our business o
r
th
e extent o
f
t
h
e
i
r
lik
e
ly i
mpact, t
h
e accurac
y
an
d
comp
l
eteness o
f
pu
bli
c
ly
ava
il
a
bl
e
i
n
f
ormat
i
on re
l
at
i
n
g
to t
h
e
factors upon which our business strate
gy
is based, or the success of our business.
You should review carefull
y
the section entitled “Risk Factors” for a discussion of these and other risks that
r
elate to our business
.
ITEM 1
.
B
u
si
n
ess
O
verv
i
e
w
We
b
u
ild
an
d
operate next
g
enerat
i
on w
i
re
l
ess
b
roa
db
an
d
networ
k
st
h
at prov
id
e ent
i
re commun
i
t
i
es w
i
t
h high-
sp
ee
d
res
id
ent
i
a
l
an
d
mo
bil
e Internet access serv
i
ces an
d
res
id
ent
i
a
l
vo
i
ce serv
i
ces. Our w
i
re
l
ess
b
roa
db
an
d
n
etworks not onl
y
create a new communications path into the home or office, but also provide a broadban
d
c
onnect
i
on anyt
i
me an
d
anyw
h
ere w
i
t
hi
n our coverage area
.
As of December 31, 2008, we operated our networks in
5
1 markets in the United States and Europe covering
approximatel
y
18.2 million people, and as of December 31, 2008, we had approximatel
y
475,000 wireless
broadband subscribers, which we believe makes us the lar
g
est operator of next
g
eneration wireless broadband
n
etwor
k
s
i
nt
h
e wor
ld
. Our networ
k
s
i
nt
h
eUn
i
te
d
States were
d
ep
l
oye
di
n 47 mar
k
ets an
d
covere
d
an est
i
mate
d
15.3 million people. On January 6, 2009, we commercially launched service in Portland, Oregon. Internationally, a
s
of December 31, 2008, we offered our wireless broadband services in Ghent and Brussels, Bel
g
ium, Dublin, Ireland
an
d
Sev
ill
e, Spa
i
n, w
h
ere our networ
k
covere
d
approx
i
mate
l
y 2.9 m
illi
on peop
l
e. Our mar
k
ets range
f
rom ma
j
o
r
m
etropo
li
tan areas to sma
ll
c
i
t
i
es an
d
t
h
e surroun
di
ng areas. As o
f
Decem
b
er 31, 2008, we o
ff
ere
d
Vo
i
ce over
Internet Protocol, which we refer to as VoIP, telephon
y
services in 45 of our domestic pre-WiMAX markets and in
February began offering voice service in Portland.
Our primar
y
focus is expandin
g
the
g
eo
g
raphic covera
g
e of our wireless broadband networks in the United
S
tates to take advantage of our more than 43 billion MHz-POPS of spectrum in the 2.
5
GHz band. We are currentl
y
e
n
g
a
g
e
di
nt
h
e
d
eve
l
opment an
d
construct
i
on o
f
mar
k
ets t
h
rou
gh
out t
h
eUn
i
te
d
States cover
i
n
g
more t
h
a
n
75 million people, as well as the lon
g
lead time cell site development work in other markets coverin
g
an additiona
l
4
5
million people. We believe our current development activities will enable us to offer our services to as many as
2