Clearwire 2008 Annual Report Download - page 62

CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
MANAGEMENT’
S
DI
S
CU
SS
ION AND ANALY
S
I
S
OF FINANCIAL CONDITION
AND RE
SU
LT
SO
F
O
PERATI
O
N
S
ITEM 7
.
M
anagement’s Discussion and Analysis of Financial Condition and Results of Operations
The
f
ollowing discussion and analysis summarizes the signi
f
icant
f
actors a
ff
ecting our results o
f
operations,
f
inancia
l
con
d
ition an
dl
i
q
ui
d
ity position for t
h
e years en
d
e
d
Decem
b
er 31, 2008 an
d
2007 an
d
s
h
ou
ld b
erea
d
in
con
j
unction with our consolidated
f
inancial statements and related notes included elsewhere in this
f
iling. Th
e
f
ollowing discussion and analysis contains
f
orward-looking statements that re
f
lect our plans, estimates and belie
f
s
.
O
ur actua
l
resu
l
ts cou
ld d
iffer materia
ll
yfromt
h
ose
d
iscusse
d
in t
h
e forwar
d
-
l
oo
k
ing statements. Factors t
h
at
could cause or contribute to these di
ff
erences include those discussed below and elsewhere in this Annual Report o
n
Form 10-K, particularl
y
in the section entitled “Risk Factors.”
F
orward-Lookin
gS
tatement
s
Statements an
di
n
f
ormat
i
on
i
nc
l
u
d
e
di
nt
hi
s Annua
l
Report on Form 10-K t
h
at are not pure
ly hi
stor
i
ca
l
are
forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act o
f
1
99
5.
Forwar
d
-
l
oo
ki
ng statements
i
nt
hi
s Annua
l
Report on Form 10-K represent our
b
e
li
e
f
s, pro
j
ect
i
ons an
d
p
redictions about future events. These statements are necessaril
y
sub
j
ective and involve known and unknown risks,
uncerta
i
nt
i
es an
d
ot
h
er
i
mportant
f
actors t
h
at cou
ld
cause our actua
l
resu
l
ts, per
f
ormance or ac
hi
evements, o
r
i
n
d
ustry resu
l
ts, to
diff
er mater
i
a
ll
y
f
rom any
f
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,
i
nc
l
u
di
ng w
i
t
h
respect to t
h
e correct measurement an
did
ent
ifi
cat
i
on o
ff
actors a
ff
ect
i
ng our
b
us
i
ness o
r
th
e extent o
f
t
h
e
i
r
lik
e
l
y
i
mpact, t
h
e accuracy an
d
comp
l
eteness o
f
pu
bli
c
l
yava
il
a
bl
e
i
n
f
ormat
i
on re
l
at
i
ng to t
h
e
f
actors upon w
hi
c
h
our
b
us
i
ness strate
gy i
s
b
ase
d
or t
h
e success o
f
our
b
us
i
ness.
When used in this re
p
ort, the words “believe,” “ex
p
ect,” “antici
p
ate,” “intend,” “estimate,” “evaluate,
”
“
op
i
n
i
on,” “may,” “cou
ld
,” “
f
uture,” “potent
i
a
l
,” “pro
b
a
bl
e,” “
if
,” “w
ill
”an
d
s
i
m
il
ar express
i
ons genera
ll
y
id
ent
ify
f
orwar
d
-
l
oo
ki
n
g
statements
.
Recent Developments and Overvie
w
On May 7, 2008, we entered into the Transaction Agreement with Sprint, Comcast, Time Warner Cable, Brigh
t
House, Goo
gl
ean
d
Inte
l
,
i
nane
ff
ort to expe
di
te t
h
e
d
eve
l
opment o
f
a nat
i
onw
id
ew
i
re
l
ess
b
roa
db
an
d
networ
k
,
e
xpe
di
te t
h
e commerc
i
a
l
ava
il
a
bili
t
y
o
f
w
i
re
l
ess
b
roa
db
an
d
serv
i
ces over t
h
ew
i
re
l
ess
b
roa
db
an
d
networ
k
, ena
bl
e
t
he offering of a greater depth and breadth of wireless broadband services and promote wireless broadband
d
eve
l
opment.
Pursuant to the Transaction A
g
reement, the assets of Old Clearwire and its subsidiaries before the consum-
m
ation of the Transactions were combined with the s
p
ectrum and certain other assets associated with th
e
d
eve
l
opment an
d
operat
i
ons o
f
t
h
e Spr
i
nt W
i
MAX Bus
i
ness, w
i
t
h
t
h
e Investors contr
ib
ut
i
ng an aggregate o
f
$3.2 billion in cash to the combined compan
y
. In connection with the Closin
g
, we entered into various commercia
l
a
g
reements with Sprint and the Investors. The Closin
g
occurred on November 28, 2008
.
As a result of the Transactions
,
each share of Old Clearwire
,
which we refer to as Old Clearwire Class A
Common Stoc
k
was converte
di
nto t
h
er
igh
t to rece
i
ve one s
h
are o
f
C
l
earw
i
re C
l
ass A Common Stoc
k
,an
d
eac
h
o
p
tion and warrant to
p
urchase shares of Old Clearwire Class A Common Stock was converted into an o
p
tion o
r
warrant, as a
pp
licable, to
p
urchase the same number of shares of Clearwire Class A Common Stock in Clearwire
.
A
f
ter t
h
e Transact
i
ons, Spr
i
nt an
d
t
h
e Investors, ot
h
er t
h
an Goog
l
e, own s
h
ares o
f
C
l
earw
i
re C
l
ass B Common
S
tock, which have equal votin
g
ri
g
hts to Clearwire Class A Common Stock, but have onl
y
limited economic ri
g
hts
.
U
nlike the holders of Clearwire Class A Common Stock, the holders of Clearwire Class B Common Stock have n
o
ri
g
h
tto
di
v
id
en
d
san
d
no r
i
g
h
t to any procee
d
son
li
qu
id
at
i
on ot
h
er t
h
an t
h
e par va
l
ue o
f
t
h
eC
l
earw
i
re C
l
ass
B
5
0