Sprint - Nextel 2014 Annual Report Download - page 158

Table of Contents
Index to Consolidated Financial Statements
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-75
1. Description of Business
Clearwire Corporation, including its consolidated subsidiaries, ("Clearwire", "we," "us," "our," or the
"Company") is a provider of fourth generation, or 4G, wireless broadband services. We build and operate next
generation mobile broadband networks that provide high-speed mobile Internet and residential Internet access
services in communities throughout the country. Our current 4G mobile broadband network operates on the
Worldwide Interoperability of Microwave Access technology 802.16e standard, which we refer to as mobile
WiMAX. In our current 4G mobile broadband markets in the United States, we offer our services through retail
channels and through our wholesale partners.
Sprint Acquisition
On December 17, 2012, we entered into an agreement and plan of merger with Sprint Nextel Corporation,
which we refer to as the Merger Agreement, pursuant to which Sprint Nextel Corporation agreed to acquire all of the
outstanding shares of Clearwire Corporation Class A and Class B common stock, which we refer to as Class A
Common Stock and Class B Common Stock, respectively, not currently owned by Sprint Nextel Corporation,
SoftBank Corp., which we refer to as SoftBank, or their affiliates. The merger, which we refer to as the Sprint
Acquisition, closed on July 9, 2013, which we refer to as the Acquisition Date, and as of that date we became a
wholly-owned subsidiary of Sprint Communications, Inc. (formerly known as Sprint Nextel Corporation), which we
refer to as Sprint, and an indirect wholly-owned subsidiary of Sprint Corporation. At the closing of the Sprint
Acquisition, the outstanding shares of common stock were converted automatically into the right to receive $5.00
per share in cash, without interest, which we refer to as the Merger Consideration. As a result of the Sprint
Acquisition and the resulting change in ownership and control, the acquisition method of accounting will be applied
by Sprint, pushed-down to us and included in our consolidated financial statements for all periods presented
subsequent to the Acquisition Date. This will result in a new basis of presentation based on the estimated fair values
of our assets and liabilities for the successor period beginning as of the day following the consummation of the
merger. The estimated fair values will be based on management's judgment after evaluating several factors,
including a preliminary valuation assessment.
The accompanying consolidated financial statements and notes represent the period of time prior to the Sprint
Acquisition and do not reflect adjustments which will be made as a result of the Sprint Acquisition, including the
acquisition method of accounting. Prior to the Sprint Acquisition, Sprint applied the equity method of accounting to
its investment in Clearwire. Clearwire’s accompanying consolidated financial statements have been included as an
Exhibit to Sprint’s Form 10-K as required by Regulation S-X, Rule 3.09.
Note Purchase Agreement
In connection with the Merger Agreement, on December 17, 2012, we entered into a Note Purchase
Agreement, which we refer to as the Note Purchase Agreement, with Clearwire Communications LLC, which we
refer to as Clearwire Communications, Clearwire Finance Inc., and together with Clearwire Communications, which
we refer to as the Issuers, and Sprint, in which Sprint agreed to purchase from us at our election up to an aggregate
principal amount of $800.0 million of 1.00% Exchangeable Notes due 2018, which we refer to as the Sprint Notes,
in ten monthly installments of $80.0 million each on the first business day of each month, which we refer to as the
Draw Date, beginning January 2013 and through the pendency of the merger. The Notes accrue interest at 1.00% per
annum and are exchangeable into shares of Class A Common Stock at an exchange rate of 666.67 shares per $1,000
aggregate principal amount of the Notes, which is equivalent to a price of $1.50 per share, subject to anti-dilution
protections. See Note 9, Long-term Debt, net, for further information.