Clearwire 2008 Annual Report Download - page 78

12 Month Per
i
o
d
Clearwir
e
Corporation(1)
11 Month Per
i
o
d
Old
Clearwir
e
P
urc
h
ase
A
cctn
g
and
Other(2)
C
learw
i
re
Corporation
P
r
o
F
o
rm
a
1
2 Month Per
i
od
C
learwir
e
C
orporation(1
)
1
2 Month Per
i
od
O
l
d
C
learwire
P
urc
h
ase
A
cctn
g
and
O
ther(2)
C
learw
i
re
C
orporatio
n
Pr
o
F
o
rm
a
Historical Historica
l
Year Ended December
31
,
2008
Year Ended December
31
,
2007
(
In thousands
)
Income tax prov
i
s
i
on. .
.
.
..
.
(61,607) (
5
,379) 66,986(j) — (16,362) (
5
,427) 21,789(j)
—
NET LOSS
.
.............
$(432,626) $(739,520) $ 858,000 $ (314,146) $(224,725) $(727,466) $ 714,130 $(238,061)
(
1
)
Bas
i
so
f
Presentat
i
o
n
Spr
i
nt entere
di
nto an agreement w
i
t
h
O
ld
C
l
earw
i
re to com
bi
ne
b
ot
h
o
f
t
h
e
i
r next generat
i
on w
i
re
l
ess
b
roa
db
an
db
us
i
nesses to
f
orm a new
i
n
d
epen
d
ent compan
y
ca
ll
e
d
C
l
earw
i
re. On C
l
os
i
n
g
,O
ld
C
l
earw
i
re an
d
t
he
Sp
rint WiMAX Business com
p
leted the combination to form Clearwire
.
T
he Transactions are bein
g
accounted for under SFAS No. 141 as a reverse acquisition with the Sprint WiMAX
Bus
i
ness
d
eeme
d
to
b
et
h
e account
i
ng acqu
i
rer.
On the Closing, the Investors made an aggregate
$
3.2 billion capital contribution to Clearwire and its
s
u
b
s
idi
ar
y
C
l
earw
i
re Commun
i
cat
i
ons. In exc
h
an
g
e
f
or t
h
e
i
r
i
nvestment, Goo
gl
e
i
n
i
t
i
a
lly
rece
i
ve
d
2
5
,000,000 shares of Clearwire Class A Common Stock and S
p
rint and the other Investors received
5
05,000,000 shares of Clearwire Class B Common Stock and an equivalent amount of Clearwire Communication
s
Cl
ass B
C
ommon Interests. T
h
e num
b
er o
f
s
h
ares o
fCl
ear
wi
re
Cl
ass A an
d
B
C
ommon
S
toc
k
an
dCl
ear
wi
r
e
Communications Class B Common Interests, as a
pp
licable, that the Investors were entitled to receive under the
Transact
i
on Agreement was su
bj
ect to a post-c
l
os
i
ng a
dj
ustment
b
ase
d
on t
h
e tra
di
ng pr
i
ce o
f
C
l
earw
i
re C
l
ass A
Common Stock on NASDAQ over 15 randomly-selected trading days during the 30-day period ending on th
e
90th da
y
after the Closin
g
, or Februar
y
26, 2009, which we refer to as the Ad
j
ustment Date, with a floor of $17.00
p
er share and a cap of
$
23.00 per share. During the measurement period, Clearwire Class A Common Stock traded
below
$
17.00 per share on NASDAQ, so on the Adjustment Date, we issued to the Investors an additional
4,411,765 shares of Clearwire Class A Common Stock and 23,823,529 shares of Clearwire Class B Common Stock
and 23,823,529 additional Clearwire Communications Class B Common Interests to reflect the
$
17.00 final
p
ric
e
p
er share. Additionally, in accordance with the subscription agreement, on February 27, 2009, CW Investments
p
urchased 588,235 shares of Clearwire Class A Common Stock at
$
17.00 per share. For the purpose of determinin
g
t
he number of shares outstandin
g
within the unaudited pro forma combined statements of operations, we assume
d
t
hat the additional shares and common interests issued to the Investors on the Adjustment Date, as applicable, wer
e
i
ssue as o
f
t
h
eC
l
os
i
ng an
d
t
h
at t
h
eC
l
os
i
ng was consummate
d
on January 1, 2007. A
f
ter g
i
v
i
ng e
ff
ect to t
he
Transactions, the post-closin
g
ad
j
ustment and the investment b
y
CW Investments of $10 million, Sprint owns th
e
lar
g
est interest in Clearwire with an effective votin
g
and economic interest in Clearwire and its subsidiaries o
f
approximately 51%
.
I
n connect
i
on w
i
t
h
t
h
e
i
nte
g
rat
i
on o
f
t
h
e Spr
i
nt W
i
MAX Bus
i
ness an
d
O
ld
C
l
earw
i
re operat
i
ons, we expec
t
th
at certa
i
n non-recurr
i
n
g
c
h
ar
g
es w
ill b
e
i
ncurre
d
.Wea
l
so expect t
h
at certa
i
ns
y
ner
gi
es m
igh
t
b
e rea
li
ze
dd
ue to
operatin
g
efficiencies or future revenue s
y
ner
g
ies expected to result from the Transactions. However, the amount
an
d
extent o
f
t
h
ose synerg
i
es cannot
b
e quant
ifi
e
d
at t
hi
st
i
me. T
h
ere
f
ore, no pro
f
orma a
dj
ustments
h
ave
b
ee
n
r
e
fl
ecte
di
nt
h
e unau
di
te
d
pro
f
orm com
bi
ne
d
statements o
f
operat
i
ons to re
fl
ect an
y
suc
h
costs or
b
ene
fi
ts.
(2) Pro Forma A
dj
ustments Re
l
ate
d
to Purc
h
ase Account
i
n
g
an
d
Ot
h
er Non-recurr
i
n
g
C
h
ar
g
es
f
or t
h
e Years En
d
e
d
D
ecember 31
,
2008 and 200
7
T
he pro forma ad
j
ustments related to purchase accountin
g
have been derived from the preliminar
y
allocation
o
f
t
h
e purc
h
ase cons
id
erat
i
on to t
h
e
id
ent
ifi
a
bl
e tang
ibl
ean
di
ntang
ibl
e assets acqu
i
re
d
an
dli
a
bili
t
i
es assume
d
o
f
O
ld
C
l
earw
i
re,
i
nc
l
u
di
n
g
t
h
ea
ll
ocat
i
on o
f
t
h
e excess o
f
t
h
e est
i
mate
df
a
i
rva
l
ue o
f
net assets acqu
i
re
d
over t
h
e
p
urchase price. The allocation of the purchase consideration is preliminar
y
and based on valuations derived fro
m
estimated fair value assessments and assumptions used by management. The final purchase price allocation is
p
en
di
n
g
t
h
e
fi
na
li
zat
i
on o
f
appra
i
sa
l
va
l
uat
i
ons o
f
certa
i
n tan
gibl
ean
di
ntan
gibl
e assets acqu
i
re
d
.W
hil
e man-
a
g
ement
b
e
li
eves t
h
at
i
ts pre
li
m
i
nar
y
est
i
mates an
d
assumpt
i
ons un
d
er
lyi
n
g
t
h
eva
l
uat
i
ons are reasona
bl
e,
diff
eren
t
estimates and assumptions could result in different values being assigned to individual assets acquired and liabilities
66