Clearwire 2009 Annual Report Download - page 78

L
iq
u
i
d
i
t
y
and
C
a
pi
tal Resource Re
q
u
i
rement
s
We are currently engaged in the development and deployment of 4G mobile broadband networks throughou
t
th
eUn
i
te
d
States. In 2010, we p
l
an to
d
eve
l
op an
dl
aunc
h
4G mo
bil
e
b
roa
db
an
d
networ
k
s
i
n
l
arge metropo
li
tan
areas in the United States, includin
g
Boston, Houston, New York, San Francisco and Washin
g
ton, D.C. We expec
t
t
hat the combination of our existing 4G markets, new market deployments and existing market conversions wil
l
a
ll
ow us to cover as many as 120 m
illi
on peop
l
ew
i
t
h
our 4G mo
bil
e
b
roa
db
an
d
networ
k
s
b
yt
h
een
d
o
f
2010.
However, our actual network covera
g
eb
y
the end of 2010 will lar
g
el
y
be determined b
y
our abilit
y
to successfull
y
m
anage ongo
i
ng
d
eve
l
opment act
i
v
i
t
i
es an
d
our per
f
ormance
i
n
l
aunc
h
e
d
mar
k
ets. We current
l
y expect a
f
u
ll
yea
r
2010 cash spend of
$
2.8 billion to
$
3.2 billion.
At the Closing, we received an aggregate of
$
3.2 billion of cash proceeds from the Investors. We have used and
we expect to continue to use the proceeds from this investment primarily to expand our 4G mobile broadband
n
etwor
k
s
i
nt
h
eUn
i
te
d
States,
f
or spectrum acqu
i
s
i
t
i
ons an
df
or
g
enera
l
corporate purposes.
I
n the fourth quarter of 2009, we secured financing of
$
4.34 billion as the result of the Private Placement an
d
t
he issuance of the Senior Secured Notes. We received aggregate proceeds of
$
4.27 billion in the fourth quarter of
2009, and the Third Investment Closin
g
for an additional $66.5 million is expected to occur b
y
earl
y
March 2010.
T
h
e
d
e
b
t
i
ssuance a
ll
owe
d
us to ret
i
re our ex
i
st
i
ng Sen
i
or Term Loan Fac
ili
ty an
d
to exten
d
t
h
e matur
i
ty o
f
our
d
e
b
t
until 2015. We expect the remaining net cash proceeds of approximately
$
2.70 billion from this investment and debt
financin
g
to primaril
y
be used to expand our 4G mobile broadband networks in the United States, for spectru
m
acqu
i
s
i
t
i
ons an
df
or genera
l
corporate purposes. As o
f
Decem
b
er 31, 2009, we
h
a
d
ava
il
a
bl
e cas
h
an
d
s
h
ort-ter
m
i
nvestments of approximately
$
3.8 billion. As of December 31, 2009, we believe that we held sufficient cash and
sh
ort-term
i
nvestments to prov
id
eusw
i
t
h
our requ
i
re
dli
qu
idi
t
yf
or at
l
east 12 mont
h
s
.
T
he amount of capital that we will require to fully implement our current plans depends on a number of factors,
m
an
y
o
f
w
hi
c
h
are
diffi
cu
l
t to pre
di
ct an
d
outs
id
eo
f
our contro
l
. In prepar
i
n
g
our p
l
ans, we were requ
i
re
d
to ma
ke
c
ertain assumptions as to the future performance of our business. If an
y
of the assumptions underl
y
in
g
our plans
p
rove to be incorrect and, as a result, our business fails to perform as we expect, we may require additional capital in
th
e near an
dl
on
g
-term to
f
un
d
operat
i
n
gl
osses, networ
k
expans
i
on p
l
ans an
d
spectrum acqu
i
s
i
t
i
ons.
Further, we re
g
ularl
y
evaluate our plans, and these evaluations often result in chan
g
es, some of which ma
y
b
e
m
ater
i
a
l
an
d
may s
i
gn
ifi
cant
l
y
i
ncrease or
d
ecrease our cap
i
ta
l
requ
i
rements
i
nt
h
e near an
d
/or
l
ong term. T
h
ese
c
han
g
es ma
y
include, amon
g
other thin
g
s, modif
y
in
g
the pace at which we build our 4G mobile broadband
n
etworks, au
g
mentin
g
our network covera
g
e in markets we launch, chan
g
in
g
our sales and marketin
g
strate
gy
an
d
/or acqu
i
r
i
ng a
ddi
t
i
ona
l
spectrum. We a
l
so may e
l
ect to
d
ep
l
oy a
l
ternat
i
ve tec
h
no
l
og
i
es to mo
bil
eW
i
MAX,
if
an
d
w
h
en t
h
e
yb
ecome ava
il
a
bl
e, on our networ
k
se
i
t
h
er
i
np
l
ace o
f
,orto
g
et
h
er w
i
t
h
,mo
bil
eW
i
MAX
if
w
e
determine it is necessary to cause the 4G mobile broadband services we offer to remain competitive or to expand the
n
um
b
er an
d
types o
fd
ev
i
ces t
h
at may
b
e use
d
to access our serv
i
ces. A
l
ternat
i
ve
l
y,
if
we
d
eterm
i
ne t
h
at we nee
d
a
ddi
t
i
ona
l
cap
i
ta
lf
or our
b
us
i
ness,
b
ut are unsuccess
f
u
li
no
b
ta
i
n
i
n
g
a
ddi
t
i
ona
lfi
nanc
i
n
g
,wema
y
e
l
ect to curta
il
our current
p
lans to reduce the ca
p
ital needed
.
Th
e amount an
d
t
i
m
i
n
g
o
f
an
y
a
ddi
t
i
ona
lfi
nanc
i
n
g
s to sat
i
s
fy
t
h
ese a
ddi
t
i
ona
l
cap
i
ta
l
nee
d
s,
if
an
y
, are
diffi
cu
lt
t
o estimate at this time. To raise additional capital, we ma
y
be required to issue additional equit
y
securities in public
or private offerin
g
s. We ma
y
seek si
g
nificant additional debt financin
g
. Our existin
g
level of debt ma
y
make it mor
e
diffi
cu
l
t
f
or us to o
b
ta
i
nt
hi
s
d
e
b
t
fi
nanc
i
ng. We a
l
so may
d
ec
id
etose
ll
a
ddi
t
i
ona
ld
e
b
t or equ
i
ty secur
i
t
i
es
i
n our
domestic or international subsidiaries, which ma
y
dilute our ownership interest in, or reduce or eliminate ou
r
i
ncome, if an
y
, from, those entities
.
Lastl
y
, recent distress in the financial markets has resulted in extreme volatilit
y
in securit
y
prices, diminishe
d
liquidit
y
and credit availabilit
y
and declinin
g
valuations of certain investments. We have assessed the implication
s
o
f
t
h
ese
f
actors on our current
b
us
i
ness an
dd
eterm
i
ne
d
t
h
at t
h
ere
h
as not
b
een a s
i
gn
ifi
cant
i
mpact to our
fi
nanc
i
a
l
p
os
i
t
i
on or
li
qu
idi
t
yd
ur
i
n
g
2009. I
f
t
h
e nat
i
ona
l
or
gl
o
b
a
l
econom
y
or cre
di
t mar
k
et con
di
t
i
ons
i
n
g
enera
l
were t
o
d
eter
i
orate
f
urt
h
er
i
nt
h
e
f
uture,
i
t
i
s poss
ibl
et
h
at suc
h
c
h
an
g
es cou
ld
a
d
verse
ly
a
ff
ect our a
bili
t
y
to o
b
ta
i
na
ddi
t
i
ona
l
e
xternal financing.
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