Clearwire 2009 Annual Report Download - page 48

A
greement, we may e
l
ect to pursue a
ddi
t
i
ona
l
opportun
i
t
i
es
i
n certa
i
n
i
nternat
i
ona
l
mar
k
ets t
h
roug
h
acqu
i
s
i
t
i
ons
and strate
g
ic alliances; however, our focus will be on markets within the United States. Our activities outside th
e
U
nited States operate in different environments than we face in the United States, particularly with respect t
o
r
egu
l
at
i
on o
f
compet
i
t
i
on an
d
spectrum. Due to t
h
ese
diff
erences, our act
i
v
i
t
i
es outs
id
et
h
eUn
i
te
d
States may
r
equire a disproportionate amount of our mana
g
ement and financial resources, which could disrupt our operation
s
an
d
a
d
verse
l
ya
ff
ect our
b
us
i
ness e
l
sew
h
ere
.
I
n a number of international markets, we face substantial com
p
etition from local service
p
roviders that offer o
r
m
a
y
o
ff
er t
h
e
i
r own w
i
re
l
ess
b
roa
db
an
d
or VoIP te
l
ep
h
on
y
serv
i
ces an
df
rom ot
h
er compan
i
es t
h
at prov
id
e Internet
c
onnect
i
v
i
t
y
serv
i
ces. We ma
yf
ace
h
e
igh
tene
d
c
h
a
ll
en
g
es
i
n
g
a
i
n
i
n
g
mar
k
et s
h
are, part
i
cu
l
ar
ly i
n certa
i
n European
c
ountries, where a lar
g
e portion of the population alread
y
has broadband Internet connectivit
y
and incumbent
c
ompan
i
es a
l
rea
d
y
h
ave a
d
om
i
nant mar
k
et s
h
are
i
nt
h
e
i
r serv
i
ce areas. Furt
h
ermore,
f
ore
i
gn prov
id
ers o
f
c
ompet
i
n
g
serv
i
ces ma
yh
ave a su
b
stant
i
a
l
a
d
vanta
g
eoverus
i
n attract
i
n
g
su
b
scr
ib
ers
d
ue to a more esta
bli
s
h
e
d
brand,
g
reater knowled
g
e of local subscribers’ preferences and access to si
g
nificant financial or strate
g
ic resources
.
I
n addition, in some international markets, forei
g
n
g
overnmental authorities ma
y
own or control the incumben
t
t
e
l
ecommun
i
cat
i
ons compan
i
es operat
i
ng un
d
er t
h
e
i
r
j
ur
i
s
di
ct
i
on. Esta
bli
s
h
e
d
re
l
at
i
ons
hi
ps
b
etween government-
owne
d
or
g
overnment-contro
ll
e
d
te
l
ecommun
i
cat
i
ons compan
i
es an
d
t
h
e
i
r tra
di
t
i
ona
ll
oca
l
te
l
ecommun
i
cat
i
on
s
p
roviders often limit access of third
p
arties to these markets. The successful ex
p
ansion of our international
operations in some markets may depend on our ability to locate, form and maintain strong relationships wit
h
e
sta
bli
s
h
e
dl
oca
l
commun
i
cat
i
on serv
i
ces an
d
equ
i
pment prov
id
ers. Fa
il
ure to esta
bli
s
h
t
h
ese re
l
at
i
ons
hi
ps or t
o
m
ar
k
et or se
ll
our pro
d
ucts an
d
serv
i
ces success
f
u
lly
cou
ld li
m
i
t our a
bili
t
y
to attract su
b
scr
ib
ers to our serv
i
ces.
We re
ly
on
h
ig
hly
s
k
i
ll
e
d
executives an
d
ot
h
er
p
ersonne
l
.I
f
we cannot retain an
d
motivate
k
e
yp
ersonne
l
,
w
e may be unable to implement our business strategy
.
Our
f
uture success
d
epen
d
s
l
ar
g
e
ly
on t
h
e expert
i
se an
d
reputat
i
on o
f
t
h
e mem
b
ers o
f
our sen
i
or mana
g
ement
t
eam. In addition, we intend to hire additional hi
g
hl
y
skilled individuals to staff our operations and our support
functions. Loss of an
y
of our ke
y
personnel or the inabilit
y
to recruit and retain qualified individuals for our
d
omest
i
can
di
nternat
i
ona
l
operat
i
ons cou
ld
a
d
verse
l
ya
ff
ect our a
bili
ty to
i
mp
l
ement our
b
us
i
ness strategy an
d
operate our business. Additionall
y
, we have under
g
one a number of chan
g
es in our senior mana
g
ement team i
n
r
ecent periods, and we face the risk that some members of our senior mana
g
ement team will not inte
g
rate into our
operat
i
ons as qu
i
c
kl
y or per
f
orm as success
f
u
ll
y as we wou
ld
expect
.
M
andatory tax distributions may deprive Clearwire Communications of funds that are required in its
b
u
s
in
ess.
Un
d
er t
h
e Operat
i
ng Agreement, C
l
earw
i
re Commun
i
cat
i
ons w
ill
ma
k
e
di
str
ib
ut
i
ons to
i
ts mem
b
ers, genera
ll
y
on a
p
ro rata
b
as
i
s
i
n
p
ro
p
ort
i
on to t
h
e num
b
er o
f
C
l
earw
i
re Commun
i
cat
i
ons C
l
ass A Common Interests an
d
Clearwire Communications Class B Common Interests, which we refer to collectivel
y
as the Clearwire Commu-
n
ications Non-Voting Interests, held by each member, in amounts so that the aggregate portion distributed to
C
l
earw
i
re
i
n eac
hi
nstance w
ill b
et
h
e amount necessar
y
to pa
y
a
ll
taxes t
h
en reasona
bly d
eterm
i
ne
dby
C
l
earw
i
re t
o
b
epa
y
a
bl
ew
i
t
h
respect to
i
ts
di
str
ib
ut
i
ve s
h
are o
f
t
h
e taxa
bl
e
i
ncome o
f
C
l
earw
i
re Commun
i
cat
i
ons (
i
nc
l
u
di
n
g
an
y
i
tems of income,
g
ain, loss or deduction allocated to Clearwire under the principles of Section 704(c) of the Internal
Revenue Code of 198
6
, which we refer to as the Code), after taking into account all net operating loss deduction
s
an
d
ot
h
er tax
b
ene
fi
ts reasona
bly
expecte
d
to
b
eava
il
a
bl
etoC
l
earw
i
re. T
h
ese man
d
ator
y
tax
di
str
ib
ut
i
ons, w
hi
c
h
m
ust be made on a pro rata basis to all members even if those members are allocated less income, proportionatel
y
,
th
an
i
sC
l
earw
i
re, may
d
epr
i
ve C
l
earw
i
re Commun
i
cat
i
ons o
ff
un
d
st
h
at are requ
i
re
di
n
i
ts
b
us
i
ness
.
T
he ability of Clearwire to use its net operating losses to offset its income and gain is subject t
o
l
imitation. I
f
use o
f
its net o
p
erating
l
osses are
l
imite
d
,t
h
ere is an increase
dl
i
k
e
l
i
h
oo
d
t
h
at C
l
earwire
C
ommunications wi
ll b
ere
q
uire
d
to ma
k
e a tax
d
istri
b
ution to C
l
earwire
.
Any
li
m
i
tat
i
on on t
h
ea
bili
ty o
f
C
l
earw
i
re to use
i
ts net operat
i
ng
l
osses, w
hi
c
h
we re
f
er to as NOLs, to o
ff
se
t
i
ncome allocable to Clearwire increases the likelihood that Clearwire Communications will be re
q
uired to make
a
t
ax distribution to Clearwire. If Clearwire Communications does not have sufficient liquidit
y
to make those
di
str
ib
ut
i
ons,
i
t may
b
e
f
orce
d
to
b
orrow
f
un
d
s,
i
ssue equ
i
ty or se
ll
assets on terms t
h
at are un
f
avora
bl
etoC
l
earw
i
r
e
38