Clearwire 2008 Annual Report Download - page 38

f
urt
h
er operat
i
ng
l
osses, networ
k
expans
i
on p
l
ans an
d
spectrum acqu
i
s
i
t
i
ons, an
d
our success an
d
v
i
a
bili
ty w
ill
d
epen
d
on our a
bili
ty to ra
i
se suc
h
a
ddi
t
i
ona
l
cap
i
ta
l
on reasona
bl
e terms. T
h
e amount an
d
t
i
m
i
ng o
f
our a
ddi
t
i
ona
l
c
ap
i
ta
l
nee
d
sw
ill d
epen
di
n part on t
h
et
i
m
i
ng an
d
extent o
f
our networ
k
expans
i
on, w
hi
c
h
we may a
dj
ust
b
ase
d
on
ava
il
a
bl
e cap
i
ta
l
an
d
,toa
l
esser
d
e
g
ree,
b
ase
d
on our resu
l
ts
i
n our
l
aunc
h
e
d
mar
k
ets,
b
ot
h
o
f
w
hi
c
h
are
diffi
cu
l
tto
e
st
i
mate at t
hi
st
i
me. I
f
we cannot secure su
ffi
c
i
ent a
ddi
t
i
ona
lf
un
di
n
g
,wema
yf
ore
g
o strate
gi
c opportun
i
t
i
es or
dela
y
, scale back and eliminate network deplo
y
ments, operations, spectrum acquisitions and investments. As ou
r
operations
g
row and expand, it ma
y
become more difficult to modulate our business plans and strate
g
ies based on
t
he availabilit
y
of this additional fundin
g
.
We ma
y
not be able to secure adequate additional financin
g
when needed on acceptable terms or at all. To raise
additional capital, we ma
y
issue additional equit
y
securities in public or private offerin
g
s, potentiall
y
at a pric
e
l
ower t
h
an t
h
e mar
k
et pr
i
ce o
f
C
l
earw
i
re C
l
ass A Common Stoc
k
at t
h
et
i
me o
f
suc
hi
ssuance. We w
ill lik
e
ly
see
k
sig
n
ifi
cant a
ddi
t
i
ona
ld
e
b
t
fi
nanc
i
n
g
,an
d
as a resu
l
t, w
ill lik
e
ly i
ncur s
ig
n
ifi
cant
i
nterest expense. Our ex
i
st
i
n
gl
eve
l
of debt ma
y
make it more difficult for us to obtain this debt financin
g
,ma
y
reduce the amount of mone
y
available t
o
finance our operations and other business activities, ma
y
expose us to the risk of increasin
g
interest rates, ma
y
mak
e
us more vulnerable to
g
eneral economic downturns and adverse industr
y
conditions, and ma
y
reduce our flexibilit
y
i
n plannin
g
for, or respondin
g
to, chan
g
in
g
business and economic conditions. We also ma
y
decide to sell additional
debt or equity securities in our domestic or international subsidiaries, which may dilute our ownership interest in o
r
r
educe or eliminate our income, if any, from those entities. The recent turmoil in the economy, and the worldwide
fi
nanc
i
a
l
mar
k
ets
i
n part
i
cu
l
ar, may ma
k
e
i
t more
diffi
cu
l
t
f
or us to o
b
ta
i
n necessary a
ddi
t
i
ona
l
equ
i
ty an
dd
e
b
t
fi
nanc
i
ng on accepta
bl
e terms or at a
ll
.
Our su
b
stantia
l
in
d
e
b
te
d
ness an
d
restrictive
d
e
b
t covenants cou
ld l
imit our
f
inancing o
p
tions an
dl
i
q
ui
d
it
y
p
osition an
d
ma
yl
imit our a
b
i
l
it
y
to grow our
b
usiness
.
I
n 2007, Old Clearwire borrowed
$
1.25 billion under a senior term loan facility. A portion of the proceeds wer
e
use
d
to repay an
d
ret
i
re ex
i
st
i
ng
l
oans an
d
secure
d
notes. T
h
e rema
i
n
d
er o
f
t
h
e procee
d
s was use
df
or networ
k
e
xpans
i
on, spectrum acqu
i
s
i
t
i
ons an
df
or genera
l
wor
ki
ng cap
i
ta
l
. In connect
i
on w
i
t
h
t
h
eC
l
os
i
ng, we amen
d
e
d
an
d
r
estate
d
our sen
i
or cre
di
ta
g
reement perta
i
n
i
n
g
to t
h
e sen
i
or term
l
oan
f
ac
ili
t
y
.Un
d
er t
hi
s amen
d
e
d
an
d
restate
d
c
re
di
ta
g
reement, w
hi
c
h
we re
f
er to as t
h
e Amen
d
e
d
Cre
di
tA
g
reement, a
ll
o
blig
at
i
ons o
f
C
l
earw
i
re were assume
d
on a
j
o
i
nt an
d
severa
lb
as
i
s
by
two o
f
our su
b
s
idi
ar
i
es, C
l
earw
i
re Le
g
ac
y
LLC an
d
C
l
earw
i
re Xo
h
m LLC, w
hi
c
h
w
e
r
efer to to
g
ether as the Co-Borrowers. The Co-Borrowers’ obli
g
ations under the Amended Credit A
g
reement are
g
uaranteed b
y
each of their domestic and international subsidiaries, as well as b
y
Clearwire Communications and its
domestic and international subsidiaries, which we refer to collectivel
y
as the Guarantors, excludin
g
the assets, bu
t
i
ncludin
g
the capital stock, of Clearwire International, LLC and its subsidiaries. Collectivel
y
, the Co-Borrowers and
t
he Guarantors directl
y
or indirectl
y
hold substantiall
y
all of the assets (includin
g
all associated spectrum an
d
licenses) that we directl
y
or indirectl
y
held as of December 31, 2008.
A
ddi
t
i
ona
lly
, on Decem
b
er 1, 2008, t
h
e Co-Borrowers an
d
C
l
earw
i
re Commun
i
cat
i
ons a
dd
e
d
an a
ddi
t
i
ona
l
t
ranc
h
eo
f
term
l
oans prov
id
e
dby
Spr
i
nt un
d
er t
h
e Amen
d
e
d
Cre
di
tA
g
reement, w
hi
c
h
we re
f
er to as t
h
e Spr
i
nt
Tranc
h
e, to t
h
e
i
n
i
t
i
a
l
term
l
oans, w
hi
c
h
we re
f
er to as t
h
eIn
i
t
i
a
l
Term Loans, an
d
co
ll
ect
i
ve
ly
w
i
t
h
t
h
e Spr
i
nt
Tranc
h
east
h
e Sen
i
or Term Loan Fac
ili
t
y
.T
h
e Spr
i
nt Tranc
h
e const
i
tute
d
part
i
a
l
repa
y
ment o
f
an o
blig
at
i
on t
o
r
e
i
m
b
urse Spr
i
nt
f
or
fi
nanc
i
n
g
t
h
e Spr
i
nt W
i
MAX Bus
i
ness
b
etween Apr
il
1, 2008 an
d
t
h
eC
l
os
i
n
g
,w
hi
c
h
we re
f
e
r
t
oast
h
e Spr
i
nt Pre-C
l
os
i
ng F
i
nanc
i
ng Amount. T
h
e Spr
i
nt Tranc
h
e was
i
n
i
t
i
a
ll
y
i
nt
h
e aggregate pr
i
nc
i
pa
l
amount
of approximately
$
179.2 million. For purposes of repayment and in the event of liquidation, dissolution or
b
an
k
ruptcy o
f
e
i
t
h
er o
f
t
h
e Co-Borrowers, t
h
e Spr
i
nt Tranc
h
e
i
ssu
b
or
di
nate
d
to t
h
eIn
i
t
i
a
l
Term Loans an
d
o
bli
gat
i
ons un
d
er t
h
e Amen
d
e
d
Cre
di
t Agreement
.
As of December 31, 2008, $1.41 billion of principal was outstandin
g
under the Senior Term Loan Facilit
y
.Th
e
S
enior Term Loan Facilit
y
provides for quarterl
y
principal pa
y
ments, with the remainin
g
balance due on the final
m
aturit
y
date of Ma
y
28, 2011. In
g
eneral, borrowin
g
s under the Senior Term Loan Facilit
y
bear interest based, a
t
our option, on either the Euro dollar rate or on an alternate base rate, in each case plus a mar
g
in.
26