Sprint - Nextel 2010 Annual Report Download - page 129

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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):
Net loss attributable to Clearwire
Decrease in Clearwire’s additional paid-in capital for issuance of Class A and B
Common Stock related to the post-closing adjustment
Decrease in Clearwire’s additional paid-in capital for issuance of Class B
Common Stock
Increase in Clearwire’s additional paid-in capital for issuance of Class A
Common Stock
Other effects of changes in Clearwire’s additional paid-in capital for issuance of
Class A and Class B Common Stock
Change from net loss attributable to Clearwire and transfers to non-controlling
interests
Year Ended
December 31,
2010
$(496,875)
—
(64,569)
301,849
145,785
$(113,810)
Year Ended
December 31,
2009
$(319,199)
(33,632)
(140,253)
17,957
—
$(475,127)
Period From
November 29,
2008 to
December 31,
2008
$(29,621)
—
—
161
—
$(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.
Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
F-72