Clearwire 2008 Annual Report Download - page 56

Commun
i
cat
i
ons’ unsecure
dfl
oat
i
ng rate
i
n
d
e
b
te
d
ness an
d
(
b
)t
h
e
i
nterest rate
f
or Spr
i
nt’s unsecure
dfl
oat
i
ng rate
i
ndebtedness plus 200 basis points. Principal on an
y
tax loan to Sprint is pa
y
able in equal annual installments fro
m
t
he loan date to the later of (x) the 1
5
th anniversary of the Closing or (y) the first anniversary of the loan date. An
y
t
ax
l
oan t
h
at C
l
earw
i
re Commun
i
cat
i
ons
i
s requ
i
re
d
to ma
k
e to Spr
i
nt may
d
epr
i
ve C
l
earw
i
re Commun
i
cat
i
ons o
f
funds that are re
q
uired in its business
.
T
he ability of Clearwire to use its net operating losses to offset its income and gain is subject t
o
l
imitation
.
At present, C
l
earw
i
re
h
as su
b
stant
i
a
l
NOLs
f
or Un
i
te
d
States
f
e
d
era
li
ncome tax purposes. In part
i
cu
l
ar, w
e
believe that Clearwire’s cumulative tax loss as of December 31, 2008, for United States federal income tax
p
urposes, was approximately $1.3 billion. A portion of Clearwire’s NOLs is subject to certain annual limitation
s
i
mpose
d
un
d
er Sect
i
on 382 o
f
t
h
eCo
d
e. Su
bj
ect to t
h
eex
i
st
i
n
g
Sect
i
on 382
li
m
i
tat
i
ons, an
d
t
h
e poss
ibili
t
y
t
h
a
t
further limitations under Sections 382 and 384 ma
y
arise after the Closin
g
, Clearwire’s NOLs
g
enerall
y
will b
e
available to offset items of income and
g
ain allocated to Clearwire b
y
Clearwire Communications
.
Th
e use
by
C
l
earw
i
re o
fi
ts NOLs ma
yb
e
f
urt
h
er
li
m
i
te
dif
C
l
earw
i
re
i
sa
ff
ecte
dby
an “owners
hi
pc
h
an
g
e,”
within the meanin
g
of Section 382 of the Code. Broadl
y
, Clearwire will have an ownership chan
g
e if, over a three-
y
ear per
i
o
d
,t
h
e port
i
on o
f
t
h
e stoc
k
o
f
C
l
earw
i
re,
b
yva
l
ue, owne
db
y one or more “
fi
ve-percent stoc
kh
o
ld
ers
”
i
ncreases b
y
more than 50 percenta
g
e points. An exchan
g
eb
y
Sprint or an Investor of Clearwire Communications
Class B Common Interests and Clearwire Class B Common Stock for Clearwire Class A Common Stock ma
y
caus
e
or contr
ib
ute to an owners
hi
pc
h
ange o
f
C
l
earw
i
re. C
l
earw
i
re
h
as no contro
l
over t
h
et
i
m
i
ng o
f
any suc
h
exc
h
ange
.
I
f
C
l
earw
i
re un
d
ergoes an owners
hi
pc
h
ange, t
h
en t
h
e amount o
f
t
h
e pre-owners
hi
pc
h
ange NOLs o
f
C
l
earw
i
re t
h
a
t
m
a
y
be used to offset income of Clearwire arisin
g
in each taxable
y
ear after the ownership chan
g
e
g
enerall
y
will b
e
li
m
i
te
d
to t
h
e pro
d
uct o
f
t
h
e
f
a
i
r mar
k
et va
l
ue o
f
t
h
e stoc
k
o
f
C
l
earw
i
re at t
h
et
i
me o
f
t
h
e owners
hi
pc
h
ange an
d
a
s
pec
ifi
e
d
rate
b
ase
d
on
l
ong-term tax-exempt
b
on
d
y
i
e
ld
s.
Separatel
y
, under Section 384 of the Code, Clearwire ma
y
not be permitted to offset built-in
g
ain in asset
s
acqu
i
re
db
y
i
t
i
n certa
i
n tax-
f
ree transact
i
ons,
if
t
h
ega
i
n
i
s recogn
i
ze
d
w
i
t
hi
n
fi
ve years o
f
t
h
e acqu
i
s
i
t
i
on o
f
t
h
e
built-in
g
ain assets, with NOLs arisin
g
before the acquisition of the built-in
g
ain assets. Section 384 ma
y
appl
y
t
o
built-in
g
ain to which Clearwire succeeds in the case of a holdin
g
compan
y
exchan
g
eb
y
Sprint or an Investor
.
Any
li
m
i
tat
i
on on t
h
ea
bili
ty o
f
C
l
earw
i
re to use
i
ts NOLs to o
ff
set
i
ncome a
ll
oca
bl
etoC
l
earw
i
re
i
ncreases t
h
e
likelihood that Clearwire Communications will be re
q
uired to make a tax distribution to Clearwire. If Clearwir
e
Commun
i
cat
i
ons
d
oes not
h
ave su
ffi
c
i
ent
li
qu
idi
ty to ma
k
et
h
ose
di
str
ib
ut
i
ons,
i
t may
b
e
f
orce
d
to
b
orrow
f
un
d
s,
i
ssue equ
i
ty or se
ll
assets on terms t
h
at are un
f
avora
bl
etoC
l
earw
i
re Commun
i
cat
i
ons. Sa
l
es o
f
assets
i
nor
d
er t
o
e
nable Clearwire Communications to make the necessar
y
distributions could further increase the tax liabilit
y
of
Clearwire, resulting in the need to make additional distributions and, as discussed above, possible additional ta
x
l
oans to Spr
i
nt.
ITEM
1
B. Unreso
l
ve
d
Sta
ff
Comments
T
here were no unresolved staff comments as of December 31, 2008.
ITEM 2
.
Pro
p
ert
i
es
O
ur executive offices are currently located in Kirkland, Washington, where we lease approximately
68,500 square feet of space. The lease expires in 2013
.
We believe that substantiall
y
all of our propert
y
and equipment is in
g
ood condition, sub
j
ect to normal wear
and tear. We believe that our current facilities have sufficient capacit
y
to meet the pro
j
ected needs of our busines
s
f
or t
h
e next 12 mont
h
s
.
44