Clearwire 2009 Annual Report Download - page 76

contractua
l
matur
i
ty o
f
30 mont
h
san
d
t
h
eun
d
er
l
y
i
ng
i
nterest rate was t
h
e LIBOR
l
oan
b
ase rate o
f
2
.7
5
percent, as the 3 month LIBOR rate in effect at the Closin
g
was less than the base rate, plus th
e
applicable margin. The calculation assumed an applicable margin of 6.00 percent and additional rate
i
ncreases as spec
ifi
e
di
nt
h
e Amen
d
e
d
Cre
di
t Agreement over t
h
e term o
f
t
h
e
l
oan. A one-e
i
g
h
t
h
p
ercenta
g
e chan
g
e in the interest rate would increase or decrease interest expense b
y
$1.6 million an
d
$
1.7 million for the years ended December 31, 2008 and 2007, respectively. Total interest expense on a
p
ro
f
orma
b
as
i
s
d
oes not
i
nc
l
u
d
eana
dj
ustment
f
or cap
i
ta
li
ze
di
nterest
.
(i) Represents the ad
j
ustment to reflect the pro forma income tax expense for the
y
ears ended December 31,
2
008 an
d
2007, w
hi
c
h
was
d
eterm
i
ne
db
y comput
i
ng t
h
e pro
f
orma e
ff
ect
i
ve tax rates
f
or t
h
e years en
d
e
d
Decem
b
er 31, 2008 an
d
2007, g
i
v
i
ng e
ff
ect to t
h
e Transact
i
ons. C
l
earw
i
re expects to generate ne
t
o
peratin
g
losses into the foreseeable future and thus has recorded a valuation allowance for the deferre
d
t
ax assets not expected to be realized. Therefore, for years ended December 31, 2008 and 2007, no tax
b
ene
fi
t was recogn
i
ze
d
.
(
j
) Represents the allocation of a portion of the pro forma combined net loss to the non-controllin
g
interests
i
n conso
lid
ate
d
su
b
s
idi
ar
i
es
b
ase
d
on Spr
i
nt’s an
d
t
h
e Investors’ (ot
h
er t
h
an Goog
l
e) owners
hi
po
f
t
he
Cl
earw
i
re Commun
i
cat
i
ons C
l
ass B Common Interests upon C
l
os
i
ng o
f
t
h
e Transact
i
ons an
d
re
fl
ects t
he
contributions b
y
CW Investment Holdin
g
s LLC and the Investors at $17.00 per share followin
g
th
e
post-closing adjustment. This adjustment is based on pre-tax loss since income tax consequences
a
ssoc
i
ate
d
w
i
t
h
any
l
oss a
ll
ocate
d
to t
h
eC
l
earw
i
re Commun
i
cat
i
ons C
l
ass B Common Interests w
ill
b
e
i
ncurre
ddi
rect
ly by
Spr
i
nt an
d
t
h
e Investors (ot
h
er t
h
an Goo
gl
e) an
d
CW Investment Ho
ldi
n
g
s LLC.
(3) Pro Forma Net Loss per Shar
e
T
he Clearwire combined pro forma net loss per share presented below assumes the closin
g
of the Transactions
and that the
C
lass A and B
C
ommon
S
tock and
C
lear
w
ire
C
ommunications
C
lass B
C
ommon Interests issued to
S
pr
i
nt, t
h
e Investors an
d
CW Investment Ho
ldi
ngs LLC were outstan
di
ng
f
rom January 1, 2007, an
d
re
fl
ects t
h
e
r
esolution of the post-closin
g
price ad
j
ustment at $17.00 per share. The shares of Class B Common Stock hav
e
n
ominal equity rights. These shares have no right to dividends of Clearwire and no right to any proceeds o
n
li
q
uidation other than the
p
ar value of Class B Common Stock.
T
he followin
g
table presents the pro forma number of Clearwire shares outstandin
g
as if the Transactions ha
d
been consummated on January 1, 2007 (in thousands):
B
asic Diluted
C
lass A Common Stock held b
y
existin
g
stockholders(i)
.................
1
6
4,484 1
6
4,484
Cl
ass A Common Stoc
k
so
ld
to Goo
gl
e(
i
)
............................
29
,
412 29
,
412
Cl
ass A Common Stoc
k
so
ld
to CW Investment Ho
ldi
n
g
s LLC(
i)
.
..........
588 588
Cl
ass B Common Stoc
ki
ssue
d
to Spr
i
nt(
ii)
...........................
—
3
70
,
000
Cl
ass B Common Stoc
k
so
ld
to Comcast
(ii)
...........................
—
61
,
76
5
C
lass B Common Stock sold to Intel
(
ii
)
..............................
—
5
8
,
82
3
C
lass B Common Stock sold to Time Warner Cable(ii
)
.................. —
32,3
53
C
lass B Common Stock sold to Bri
g
ht House(ii)
....................... —
5
,882
We
igh
te
d
avera
g
eC
l
ass A Common Stoc
k
outstan
di
n
g
..................
194
,
484
7
23
,
307
(i) Shares outstanding related to Class A Common Stock held by Clearwire stockholders has been derived from th
e
sum o
f
t
h
e num
b
er o
f
s
h
ares o
f Old Cl
ear
wi
re
Cl
ass A
C
ommon
S
toc
k
an
d Old Cl
ear
wi
re
Cl
ass B
C
ommo
n
Stoc
ki
ssue
d
an
d
outstan
di
n
g
at Novem
b
er 28, 2008, an
d
su
bj
ect to convers
i
on o
f
eac
h
s
h
are o
f
O
ld
C
l
earw
i
r
e
C
lass A common stock and Old Clearwire Class B common stock into the right to receive one share of Class
A
C
ommon Stoc
k
.T
h
e
b
as
i
cwe
igh
te
d
avera
g
es
h
ares outstan
di
n
g
re
l
ate
d
to C
l
ass A Common Stoc
k
are t
he
s
h
ares
i
ssue
di
nt
h
e Transact
i
ons an
d
assume
d
to
b
e outstan
di
n
gf
or t
h
e ent
i
re per
i
o
df
or w
hi
c
hl
oss per s
h
are
i
s
b
ein
g
calculated. The computation of pro forma diluted Class A Common Stock did not include the effects o
f
66