Clearwire 2010 Annual Report Download - page 111

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Sprint and the Investors, other than Google, Inc., which we refer to as Google, own shares of Class B Common
Stock, which have equal voting rights to Clearwire’s $0.0001 par value, Class A Common Stock, but have only
limited economic rights. Unlike the holders of Class A Common Stock, the holders of Class B Common Stock have
no right to dividends and no right to any proceeds on liquidation other than the par value of the Class B Common
Stock. Sprint and the Investors, other than Google, hold their economic rights through ownership of Clearwire
Communications Class B Common Interests. Google owns shares of Class A Common Stock.
Under the Investment Agreement, Clearwire committed to a rights offering, pursuant to which rights to
purchase shares of Class A Common Stock were granted to each holder of Class A Common Stock along with
certain participating securities as of December 17, 2009, which we refer to as the Rights Offering. We distributed
subscription rights which were exercisable for up to 93,903,300 shares of Class A Common Stock. Each
subscription right entitled a shareholder to purchase 0.4336 shares of Class A Common Stock at a subscription
price of $7.33 per share. The subscription rights expired if they were not exercised by June 21, 2010. The
Participating Equityholders and Google waived their respective rights to participate in the Rights Offering with
respect to shares of Class A Common Stock they each hold as of the applicable record date. In connection with the
Rights Offering, rights to purchase 39.6 million shares of Class A Common Stock were exercised for an aggregate
purchase price of $290.3 million.
Clearwire Communications Interests
Clearwire is the sole holder of voting interests in Clearwire Communications. As such, Clearwire controls
100% of the decision making of Clearwire Communications and consolidates 100% of its operations. Clearwire
also holds all of the outstanding Clearwire Communications Class A Common Interests representing 25% of the
economics of Clearwire Communications as of December 31, 2010. The holders of the Class B Common Interests
own the remaining 75% of the economic interests. The following shows the effects of the changes in Clearwire’s
ownership interests in Clearwire Communications (in thousands):
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Period From
November 29,
2008 to
December 31,
2008
Net loss attributable to Clearwire .................. $(496,875) $(319,199) $(29,621)
Decrease in Clearwire’s additional paid-in capital for
issuance of Class A and B Common Stock related to
the post-closing adjustment . ................... — (33,632) —
Decrease in Clearwire’s additional paid-in capital for
issuance of Class B Common Stock .............. (64,569) (140,253) —
Increase in Clearwire’s additional paid-in capital for
issuance of Class A Common Stock .............. 301,849 17,957 161
Other effects of changes in Clearwire’s additional paid-
in capital for issuance of Class A and Class B
Common Stock ............................. 145,785 — —
Change from net loss attributable to Clearwire and
transfers to non-controlling interests .............. $(113,810) $(475,127) $(29,460)
The non-voting Clearwire Communication units are designated as either Clearwire Communications Class A
Common Interests, all of which are held by Clearwire, or Clearwire Communications Class B Common Interests,
which are held by Sprint and the Investors, with the exception of Google. Both classes of non-voting Clearwire
Communication units participate in distributions of Clearwire Communications on an equal and proportionate
basis.
106
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)