Clearwire 2009 Annual Report Download - page 13

s
ignificant losses in the future. As of December 31, 2009, our accumulated deficit was approximately
$
413.1 millio
n
and the total principal outstandin
g
on our debt was approximatel
y
$2.71 billion.
Our pr
i
mary
f
ocus
i
s expan
di
ng t
h
e geograp
hi
c coverage o
f
our 4G mo
bil
e
b
roa
db
an
d
networ
k
s
i
nt
h
eUn
i
te
d
S
tates to take advanta
g
e of our more than 44 billion MHz-POPs of spectrum in the 2.
5
GHz band. We are currentl
y
e
ngaged in the development and deployment of markets throughout the United States. For 2010, we have plans t
o
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
i
nt
h
eUn
i
te
d
States,
i
nc
l
u
di
ng
Boston, Houston, New Yor
k
, San Franc
i
sco an
d
Was
hi
n
g
ton, D.C. We current
ly
expect t
h
at t
h
e com
bi
nat
i
on o
f
ou
r
e
xisting 4G markets, our new market deployments and existing market conversions will allow us to cover as man
y
as 120 million people with our 4G mobile broadband networks by the end of 2010. However, our actual network
c
overa
g
e
by
t
h
een
d
o
f
2010 w
ill l
ar
g
e
ly b
e
d
eterm
i
ne
dby
our a
bili
t
y
to success
f
u
lly
mana
g
eon
g
o
i
n
gd
eve
l
opmen
t
activities, includin
g
the acquisition, zonin
g
, permittin
g
and construction of over 10,000 sites, and our performance
i
n our launched markets.
We re
g
ularl
y
evaluate our plans, and we ma
y
elect to pursue new or alternative strate
g
ies which we believ
e
would be beneficial to our business. These may include among other things, modifying the pace at which we build
our 4G mo
bil
e
b
roa
db
an
d
networ
k
s, augment
i
ng our networ
k
coverage
i
n mar
k
ets we
l
aunc
h
,c
h
ang
i
ng our sa
l
e
s
and marketin
g
strate
gy
and/or acquirin
g
additional spectrum. We also ma
y
elect to deplo
y
alternative technolo
g
ies
t
o mobile WiMAX, if and when the
y
become available, on our networks either to
g
ether with, or in place of, mobile
Wi
MAX
if
we
d
eterm
i
ne
i
t
i
s necessary to cause t
h
e4Gmo
bil
e
b
roa
db
an
d
serv
i
ces we o
ff
er to rema
i
n compet
i
t
i
ve
or to expand the number and t
y
pes of devices that ma
y
be used to access our services. Whether we pursue an
y
such
p
lans or strate
g
ies ma
y
depend on our performance in our launched markets and our access to an
y
additional
fi
nanc
i
ng t
h
at may
b
e requ
i
re
d
.
C
or
p
orate
S
tructure
On November 28, 2008, Clearwire Cor
p
oration (f/k/a New Clearwire Cor
p
oration), which we refer to a
s
C
l
earw
i
re or t
h
e Compan
y
, comp
l
ete
d
t
h
e transact
i
ons contemp
l
ate
dby
t
h
e Transact
i
on A
g
reement an
d
P
l
an o
f
Mer
g
er dated as of Ma
y
7, 2008, as amended, which we refer to as the Transaction A
g
reement, with Clearwire
Le
g
ac
y
LLC (f/k/a Clearwire Corporation), which we refer to as Old Clearwire, Sprint Nextel Corporation, whic
h
we re
f
er to as Spr
i
nt, Comcast Corporat
i
on, w
hi
c
h
we re
f
er to as Comcast, T
i
me Warner Ca
bl
e Inc., w
hi
c
h
we re
f
er
t
o as Time Warner Cable, Bri
g
ht House Networks, LLC, which we refer to as Bri
g
ht House, Goo
g
le Inc., which w
e
r
efer to as Goo
g
le, and Intel Corporation, which we refer to as Intel, and to
g
ether with Comcast, Time Warne
r
Ca
bl
e, Br
i
g
h
t House an
d
Goog
l
e, t
h
e Investors. We re
f
er to Comcast, T
i
me Warner Ca
bl
e, Br
i
g
h
t House, an
d
G
oo
g
le as the Strate
g
ic Investors. Under the Transaction A
g
reement, Old Clearwire was combined with Sprint’s
W
iMAX business, which we refer to as the Sprint WiMAX Business, and the Investors invested an a
gg
re
g
ate of
$
3.2 billion in the combined entity. We were formed on November 28, 2008, as a result of the closing of th
e
t
ransact
i
ons, w
hi
c
h
we re
f
er to as t
h
eC
l
os
i
n
g
,un
d
er t
h
e Transact
i
on A
g
reement, w
hi
c
h
we re
f
er to as t
he
Transactions
.
On Novem
b
er 9, 2009, C
l
earw
i
re an
d
C
l
earw
i
re Commun
i
cat
i
ons LLC, a su
b
s
idi
ar
y
o
f
C
l
earw
i
re w
hi
c
h
w
e
r
efer to as Clearwire Communications, entered into an investment a
g
reement, which we refer to as the Investmen
t
A
greement, with each of Sprint, Comcast, Intel, Time Warner Cable, Bright House and Eagle River Holdings, LLC
,
w
hi
c
h
we re
f
er to as Ea
gl
eR
i
ver, w
h
oweco
ll
ect
i
ve
ly
re
f
er to as t
h
e Part
i
c
i
pat
i
n
g
Equ
i
t
yh
o
ld
ers, prov
idi
n
gf
o
r
a
ddi
t
i
ona
l
equ
i
t
yi
nvestments
by
t
h
ese
i
nvestors an
d
new
d
e
b
t
i
nvestments
by
certa
i
no
f
t
h
ese
i
nvestors. T
h
e
Investment Agreement sets forth the terms of the transactions pursuant to which the Participating Equityholder
s
agreed to invest in Clearwire and Clearwire Communications, an aggregate of approximately
$
1.564 billion in cash
,
w
hi
c
hi
nvestment we re
f
er to as t
h
ePr
i
vate P
l
acement, an
d
t
h
e
i
nvestment
by
certa
i
no
f
t
h
e Part
i
c
i
pat
i
n
g
Equit
y
holders in senior secured notes discussed below, which we refer to as the Rollover Notes, in replacement
o
f
equa
l
amounts o
fi
n
d
e
b
te
d
ness un
d
er our sen
i
or term
l
oan
f
ac
ili
ty t
h
at we assume
df
rom O
ld
C
l
earw
i
re, w
hi
c
h
w
e
r
e
f
er to as t
h
e Sen
i
or Term Loan Fac
ili
ty, w
hi
c
hi
nvestment we re
f
er to as t
h
eRo
ll
over Transact
i
ons. We co
ll
ect
i
ve
ly
r
efer to the Private Placement and the Rollover Transactions as the Equit
y
holder Investments. We receive
d
approximately
$
1.057 billion of the proceeds from the Private Placement on November 16, 2009. We refer to this
c
losing as the First Investment Closing. We received an approximately
$
440.3 million of the proceeds from th
e
P
rivate Placement on December 21, 2009. We refer to this closin
g
as the Second Investment Closin
g
. The remainin
g
3