Clearwire 2009 Annual Report Download - page 110

Th
e
i
ncome tax rate compute
d
us
i
ng t
h
e
f
e
d
era
l
statutory rates
i
s reconc
il
e
d
to t
h
e reporte
d
e
ff
ect
i
ve
i
ncom
e
t
ax rate as
f
o
ll
o
w
s
:
2009 2008 200
7
Year Ended December 31
,
Fe
d
era
l
statutor
yi
ncome tax rate
................................
35
.
0
%
35
.
0
%
35
.
0
%
State
i
ncome taxes
(
net o
ff
e
d
era
lb
ene
fi
t
)
..........................
0
.
8
(
1.5
)(
0.8
)
Non-contro
lli
ng
i
nterest
.
......................................
(
25.9
)
——
O
ther
,
net
.
................................................. 0.7 0.2 0.
2
V
aluation allowanc
e
..........................................
(
10.7
)(5
0.3
)(
42.2
)
Effective income tax rate
......................................
(
0.1)% (16.6)% (7.8)%
We
fil
e
i
ncome tax returns
f
or C
l
earw
i
re an
d
our su
b
s
idi
ar
i
es
i
nt
h
eUn
i
te
d
States Fe
d
era
lj
ur
i
s
di
ct
i
on an
d
various state and foreign jurisdictions. As of December 31, 2009, the tax returns for Old Clearwire for the years
2
003 through 2008 remain open to examination by the Internal Revenue Service and various state tax authorities. In
a
ddi
t
i
on, O
ld
C
l
earw
i
re acqu
i
re
d
Un
i
te
d
States an
df
ore
ig
n ent
i
t
i
es w
hi
c
h
operate
d
pr
i
or to 2003. Most o
f
t
he
acquired entities
g
enerated losses for income tax purposes and certain tax returns remain open to examination b
y
U
nited States and foreign tax authorities for tax years as far back as 1998.
O
ur po
li
c
yi
s to reco
g
n
i
ze an
yi
nterest re
l
ate
d
to unreco
g
n
i
ze
d
tax
b
ene
fi
ts
i
n
i
nterest expense or
i
nteres
t
income. We reco
g
nize penalties as additional income tax expense. As December 31, 2009, we had no uncertain tax
p
ositions and therefore accrued no interest or
p
enalties related to uncertain tax
p
ositions.
10. Long-term Debt
Long-term debt at December 31, 2009 and 2008 consisted of the following (in thousands):
2
009 200
8
December 31
,
Senior Secured Notes and Rollover Notes
,
due in 2015
,
interest due-bi
-
a
nnua
lly
...............................................
$
2
,
714
,
731
$
—
Sen
i
or Term Loan Fac
ili
ty,
d
ue
i
n 2011, 1% o
f
pr
i
nc
i
pa
ld
ue annua
ll
y
;
res
id
ua
l
at matur
i
t
y
...
................................... —
1
,
3
6
4
,
79
0
Less: current port
i
on
.
......................................
—
(
14,292
)
T
otal long-term deb
t
.
......................................
$
2
,
714
,
731
$
1
,
350
,
498
S
enior Secure
d
Notes an
d
Ro
ll
over Note
s
—
On November 24, 2009, we issued $1.60 billion in 12% Senio
r
S
ecured Notes due 2015 for cash
p
roceeds of
$
1.57 billion, net of debt discount. We used
$
1.16 billion of th
e
p
roceeds to retire our Senior Term Loan Facilit
y
and reco
g
nized a
g
ain on extin
g
uishment of debt of
$
8.3 million,
net o
f
transact
i
on costs. T
h
e Sen
i
or Secure
d
Notes prov
id
e
f
or
bi
-annua
l
pa
y
ments o
fi
nterest
i
n June an
d
Decem
b
er
,
b
e
g
innin
g
in June 2010, and bear interest at the rate of 12% per annum. In connection with the issuance of the Senior
S
ecured Notes, on November 24, 2009, we also issued
$
252.5 million of Rollover Notes to Sprint and Comcast with
id
ent
i
ca
l
terms as t
h
e Sen
i
or Secure
d
Notes. T
h
e procee
d
s
f
rom t
h
eRo
ll
over Notes were use
di
n 2009 to ret
i
re t
he
p
rincipal amounts owed to Sprint and Comcast under our Senior Term Loan Facilit
y
.
O
n December 9
,
2009
,
we issued an additional
$
920 million in Senior Secured Notes with the same terms as
t
he Senior Secured Notes issued on November 24, 2009, which resulted in cash proceeds of
$
901.1 million, net of
debt discount
.
100
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)