UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-34196

CLEARWIRE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		56-2408571 (I.R.S. Employer Identification No.)
4400 Carillon Point Kirkland, Washington (Address of principal executive office)		98033 (zip code)

(425) 216-7600
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files.) Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No þ

     The number of shares outstanding of the registrant’s Class A common stock as of November 1, 2010 was 243,264,716. The number of shares outstanding of the registrant’s Class B common stock as of November 1, 2010 was 743,481,026.

 

 

CLEARWIRE CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED September 30, 2010

Table of Contents

		Page
Part I. Financial Information
Item 1. Financial Statements (unaudited)			3
Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009			3
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009			4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009			5
Condensed Consolidated Statement of Equity and Comprehensive Loss for the Nine Months Ended September 30, 2010			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			35
Part II. Other Information
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 6. Exhibits			38
Signature			39
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I — FINANCIAL INFORMATION

Item 1.		Financial Statements

CLEARWIRE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

		September 30,				December 31,
		2010				2009
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	78,243			$	1,698,017
Short-term investments			1,302,837				2,106,661
Restricted cash			1,000				1,166
Accounts receivable, net of allowance of $1,971 and $1,956			21,807				6,253
Notes receivable			5,032				5,402
Inventory, net			21,376				12,624
Prepaids and other assets			99,215				46,466
Total current assets			1,529,510				3,876,589
Property, plant and equipment, net			4,278,351				2,596,520
Restricted cash			36,621				5,620
Long-term investments			13,051				87,687
Spectrum licenses, net			4,440,404				4,495,134
Other intangible assets, net			69,442				91,713
Investments in affiliates			14,665				10,647
Other assets			135,297				103,943
Total assets		$	10,517,341			$	11,267,853
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities		$	660,319			$	527,367
Deferred revenue			20,417				16,060
Total current liabilities			680,736				543,427
Long-term debt, net			2,801,170				2,714,731
Deferred tax liabilities, net			5,910				6,353
Other long-term liabilities			413,805				230,974
Total liabilities			3,901,621				3,495,485
Commitments and contingencies (Note 11)
Equity:
Clearwire Corporation stockholders’ equity:
Class A common stock, par value $0.0001, 1,500,000 shares authorized; 243,207 and 196,767 shares issued and outstanding, respectively			24				20
Class B common stock, par value $0.0001, 1,000,000 shares authorized; 743,481 and 734,239 shares issued and outstanding, respectively			74				73
Additional paid-in capital			2,392,838				2,000,061
Accumulated other comprehensive income			2,343				3,745
Accumulated deficit			(772,484	)			(413,056	)
Total Clearwire Corporation stockholders’ equity			1,622,795				1,590,843
Non-controlling interests			4,992,925				6,181,525
Total equity			6,615,720				7,772,368
Total liabilities and equity		$	10,517,341			$	11,267,853

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

CLEARWIRE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Revenues		$	146,964			$	68,812			$	376,157			$	194,543
Operating expenses:
Cost of goods and services and network costs (exclusive of items shown separately below)			241,321				97,496				646,490				252,348
Selling, general and administrative expense			248,261				145,278				701,492				366,989
Depreciation and amortization			124,348				52,938				288,232				147,750
Spectrum lease expense			72,761				64,426				207,604				193,135
Total operating expenses			686,691				360,138				1,843,818				960,222
Operating loss			(539,727	)			(291,326	)			(1,467,661	)			(765,679	)
Other income (expense):
Interest income			1,325				2,051				4,085				8,292
Interest expense			(26,563	)			(11,671	)			(84,869	)			(56,235	)
Other income (expense), net			273				(4,640	)			(1,995	)			(16,461	)
Total other income (expense), net			(24,965	)			(14,260	)			(82,779	)			(64,404	)
Loss before income taxes			(564,692	)			(305,586	)			(1,550,440	)			(830,083	)
Income tax benefit (provision)			87				197				(708	)			158
Net loss			(564,605	)			(305,389	)			(1,551,148	)			(829,925	)
Less: non-controlling interests in net loss of consolidated subsidiaries			425,185				222,962				1,191,720				603,069
Net loss attributable to Clearwire Corporation		$	(139,420	)		$	(82,427	)		$	(359,428	)		$	(226,856	)
Net loss attributable to Clearwire Corporation per Class A Common Share:
Basic		$	(0.58	)		$	(0.42	)		$	(1.67	)		$	(1.17	)
Diluted		$	(0.58	)		$	(0.43	)		$	(1.67	)		$	(1.18	)
Weighted average Class A Common Shares outstanding:
Basic			242,332				195,456				215,515				194,145
Diluted			985,813				724,280				215,515				718,082

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

CLEARWIRE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

		Nine Months Ended
		September 30,
		2010				2009
Cash flows from operating activities:
Net loss		$	(1,551,148	)		$	(829,925	)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred income taxes			(102	)			158
Losses from equity investees, net			1,563				883
Non-cash fair value adjustment on swaps			—				(5,343	)
Other-than-temporary impairment loss on investments			—				10,015
Accretion of discount on debt			2,954				55,079
Depreciation and amortization			288,232				147,750
Amortization of spectrum leases			43,644				43,767
Non-cash rent			149,909				64,980
Share-based compensation			40,370				24,208
Net loss on disposal, write-off or impairment of assets			127,426				16,947
Changes in assets and liabilities:
Inventory			(1,103	)			(3,041	)
Accounts receivable			(15,677	)			(720	)
Prepaids and other assets			(89,546	)			(38,994	)
Prepaid spectrum licenses			(2,775	)			(34,876	)
Accounts payable and other liabilities			165,412				143,410
Net cash used in operating activities			(840,841	)			(405,702	)
Cash flows from investing activities:
Capital expenditures			(1,955,482	)			(729,587	)
Payments for spectrum licenses and other intangible assets			(11,050	)			(11,747	)
Purchases of available-for-sale investments			(1,873,966	)			(2,291,461	)
Disposition of available-for-sale investments			2,752,050				2,705,455
Other investing			(26,034	)			5,556
Net cash used in investing activities			(1,114,482	)			(321,784	)
Cash flows from financing activities:
Principal payments on long-term debt			(122	)			(10,719	)
Debt financing fees			(21,918	)			—
Equity investment by strategic investors			54,839				—
Proceeds from issuance of common stock			303,630				12,853
Net cash provided by financing activities			336,429				2,134
Effect of foreign currency exchange rates on cash and cash equivalents			(880	)			626
Net decrease in cash and cash equivalents			(1,619,774	)			(724,726	)
Cash and cash equivalents:
Beginning of period			1,698,017				1,206,143
End of period		$	78,243			$	481,417
Supplemental cash flow disclosures:
Cash paid for interest including capitalized interest paid		$	168,931			$	96,260
Swap interest paid, net		$	—			$	10,181
Non-cash investing activities:
Fixed asset purchases in accounts payable and other current liabilities		$	206,452			$	43,082
Fixed asset purchases financed by long-term debt		$	91,312			$	—
Non-cash financing activities:
Vendor financing obligations		$	(45,392	)		$	—
Capital lease obligations		$	(45,920	)		$	—

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

CLEARWIRE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF EQUITY AND COMPREHENSIVE LOSS
(In thousands)
(Unaudited)

																						Accumulated
		Class A								Class B												Other
		Common Stock								Common Stock								Additional Paid				Comprehensive				Accumulated				Non-controlling				Total
		Shares				Amount				Shares				Amount				In Capital				Income				Deficit				Interests				Equity
Balances at January 1, 2010			196,767			$	20				734,239			$	73			$	2,000,061			$	3,745			$	(413,056	)		$	6,181,525			$	7,772,368
Net loss			—				—				—				—				—				—				(359,428	)			(1,191,720	)			(1,551,148	)
Other comprehensive loss			—				—				—				—				—				(893	)			—				(3,683	)			(4,576	)
Comprehensive loss																															(1,195,403	)			(1,555,724	)
Issuance of common stock, net of issuance costs			46,440				4				9,242				1				381,898				(509	)			—				(22,925	)			358,469
Share-based compensation and other capital transactions			—				—				—				—				10,879				—				—				29,728				40,607
Balances at September 30, 2010			243,207			$	24				743,481			$	74			$	2,392,838			$	2,343			$	(772,484	)		$	4,992,925			$	6,615,720

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

CLEARWIRE CORPORATION AND SUBSIDIARIES

1. Description of Business and Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our 2009 Annual Report on Form 10-K. In the opinion of management, all adjustments consisting of normal recurring accruals necessary for a fair presentation have been included. The results for the three and nine months ended September 30, 2010 and 2009 do not necessarily indicate the results that may be expected for the full year.

     We are focused on the deployment and operation of the first nationwide 4G mobile broadband network to provide a true mobile broadband experience for consumers, small businesses, medium and large enterprises and educational institutions. We are deploying our mobile Worldwide Interoperability for Microwave Access, which we refer to as WiMAX, technology based on the IEEE 802.16e standard, in our planned markets using 2.5 GHz Federal Communications Commission, which we refer to as FCC, licenses.

Liquidity Issues

     We are at an early stage of implementing our business strategy. Since formation, we have invested significantly in our business and experienced substantial losses from operations and negative cash flows. During the first nine months of fiscal 2010, we incurred $1.55 billion of net losses. We utilized $840.8 million of cash in operating activities and spent $1.96 billion for capital expenditures in the development of our network. We do not expect our operations to generate positive cash flows during the next twelve months.

     As of September 30, 2010, we had available cash and short-term investments of approximately $1.38 billion. Based on our current projections, we do not expect our available cash and short-term investments to be sufficient to cover our estimated liquidity needs for the next twelve months. Without additional financing sources, we forecast that our cash and short-term investments would be depleted as early as the middle of 2011. Thus, we will be required to raise additional capital in the near-term in order to continue operations. Further, we also need to raise substantial additional capital over the long-term to fully implement our business plans.

     We are actively pursuing various initiatives aimed at resolving our need for additional capital. We are in discussions with a number of our major shareholders and other third parties about a number of options, including potential strategic transactions, additional debt or equity financings and/or asset sales. A special committee of our Board of Directors has been formed to explore strategic alternatives, including transactions that may involve a sale or other realignment of the ownership and governance of our company. Additionally, at the same time, we are holding discussions with various parties with respect to securing additional financing. Any financing transaction would likely include selling additional equity or debt securities issued by us or our domestic or international subsidiaries. Any additional debt financing would increase our future financial commitments, while any additional equity financing would be dilutive to our stockholders. Our ability to raise sufficient additional capital in the near and long-term on acceptable terms, or at all, remains uncertain. Lastly, we believe that the fair market value of our spectrum portfolio exceeds our outstanding liabilities and that a portion of our spectrum is not essential to our business. Thus, we have initiated a process whereby we are seeking bids to potentially sell the excess spectrum assets to raise additional funds to continue to operate. However, the process is at an early stage, and there can be no assurance that we will be able to sell a sufficient amount of spectrum on terms acceptable to us.

     We are also actively pursuing a number of initiatives intended to reduce costs and conserve cash, including: suspending development activities for sites not required for our current build plan; delaying the launch of new end user devices such as Clear branded smartphones; substantially reducing sales and marketing spending; making reductions to discretionary capital projects; substantially reducing the number of contingent workers and reducing our employee numbers by approximately 15%. We currently have thousands of sites in various stages of planning and construction beyond our current build plan, and we intend to suspend zoning and planning in a portion of those sites. These contemplated initiatives are intended to result in potential cost savings of between $100 million to $200 million in 2010 and again in the first half of 2011. However, we may not realize the full amount of savings we expect as a result of these initiatives. Even if these initiatives do result in the anticipated cost savings, we will still be required to obtain sufficient additional capital.

     Our ability to continue to operate our business is substantially dependent on our ability to raise additional capital in the near term. As discussed above, we are actively pursuing a number of possible funding options, but there can be no assurance that these efforts will be successful. Our expected continued losses from operations and the uncertainty about our ability to obtain sufficient additional capital raise substantial doubt about our ability to continue as a going concern.

     The accompanying unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern. As further discussed in Notes 4 and 5, we reviewed for impairment the carrying value of our property, plant and equipment, which we refer to as PP&E, intangible assets with definite useful lives, which consists primarily of spectrum licenses with definite lives and subscriber relationships, and indefinite lived spectrum assets as of September 30, 2010.

2. Summary of Significant Accounting Policies

     The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which we refer to as U.S. GAAP, and pursuant to the rules and regulations of the Securities and Exchange Commission, which we refer to as the SEC. The same accounting policies are followed for preparing the quarterly and annual financial information unless otherwise disclosed in the notes below.

     The following accounting policies were adopted in the nine months ended September 30, 2010:

     Consolidation — In June and December 2009, the Financial Accounting Standards Board, which we refer to as the FASB, issued new accounting guidance that amends the consolidation guidance applicable to variable interest entities. The amendments affect the overall consolidation analysis under current accounting guidance. We adopted the new accounting guidance on January 1, 2010. The adoption of the new accounting guidance did not have a significant effect on our financial condition or results of operations.

     Fair Value Measurements — In January 2010, the FASB issued new accounting guidance that requires new disclosures related to fair value measurements. The new guidance requires separate disclosure for transfers between Levels 1 and 2 of the fair value hierarchy and disclosure of the activities in the Level 3 reconciliation presented on a gross basis rather than as one net number for a particular line item. We adopted the new accounting guidance on January 1, 2010, except for the new disclosures related to Level 3 activities, which are effective for fiscal years and interim periods beginning after December 15, 2010. The new accounting guidance only amended the disclosure requirements related to fair value measurements; therefore the adoption did not have any impact on our financial condition or results of operations.

Recent Accounting Pronouncements

     In October 2009, the FASB issued new accounting guidance that amends the revenue recognition for multiple-element arrangements and expands the disclosure requirements related to such arrangements. The new guidance amends the criteria for separating consideration in multiple-deliverable arrangements, establishes a selling price hierarchy for determining the selling price of a deliverable, eliminates the residual method of allocation, and requires the application of relative selling price method in allocating the arrangement consideration to all deliverables. The new accounting guidance is effective for fiscal years beginning after June 15, 2010. We are currently evaluating the impact of the new guidance on our financial condition and results of operations.

3. Investments

     Investments consisted of the following (in thousands):

		September 30, 2010																December 31, 2009
						Gross Unrealized																Gross Unrealized
		Cost				Gains				Losses				Fair Value				Cost				Gains				Losses				Fair Value
Short-term
U.S. Government and Agency Issues		$	1,302,350			$	490			$	(3	)		$	1,302,837			$	2,106,584			$	231			$	(154	)		$	2,106,661
Long-term
U.S. Government and Agency Issues			—				—				—				—				74,670				—				(154	)			74,516
Other debt securities			8,959				4,092				—				13,051				8,959				4,212				—				13,171
Total long-term			8,959				4,092				—				13,051				83,629				4,212				(154	)			87,687
Total investments		$	1,311,309			$	4,582			$	(3	)		$	1,315,888			$	2,190,213			$	4,443			$	(308	)		$	2,194,348

     The cost and fair value of investments at September 30, 2010, by contractual years-to-maturity, are presented below (in thousands):

		Cost				Fair Value
Due within one year		$	1,302,350			$	1,302,837
Due in ten years or greater			8,959				13,051
Total		$	1,311,309			$	1,315,888

4. Property, Plant and Equipment

     Property, plant and equipment consisted of the following (in thousands):

		Useful				September 30,				December 31,
		Lives (Years)				2010				2009
Network and base station equipment			5-15			$	2,221,072			$	901,814
Customer premise equipment			2				119,488				60,108
Furniture, fixtures and equipment			3-7				262,522				216,598
		Lesser of useful life
Leasehold improvements		or lease term					34,460				18,128
Construction in progress			N/A				2,107,646				1,623,703
							4,745,188				2,820,351
Less: accumulated depreciation and amortization							(466,837	)			(223,831	)
						$	4,278,351			$	2,596,520

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Supplemental information (in thousands):
Capitalized interest		$	61,393			$	37,416			$	176,316			$	93,388
Depreciation expense		$	116,720			$	43,053			$	264,885			$	119,227

     We have entered into lease arrangements related to our network construction and equipment that meet the criteria for capital leases. At September 30, 2010, we had recorded capital lease assets of $45.9 million within Network and base station equipment.

     Our long-lived assets, consisting of PP&E, and definite-lived intangible assets such as subscriber relationships, and our spectrum assets in the United States are combined into a single unit of account for purposes of testing impairment, because management believes that utilizing these assets as a group represents the highest and best use of the assets and is consistent with management’s strategy of utilizing our spectrum licenses on an integrated basis as part of our nationwide network. Internationally, our long-lived assets, consisting of PP&E, definite-lived intangible assets, such as subscriber relationships, and our spectrum assets are primarily combined into a single unit of account for each country in which we operate for purposes of testing impairment.

     We review our long-lived assets to be held and used for recoverability whenever an event or change in circumstances indicates that the carrying amount of such long-lived asset or group of long-lived assets may not be recoverable. As of September 30, 2010, due to our continued losses and significant uncertainties surrounding our ability to obtain required liquidity to fund our operating and capital needs, management has concluded that an adverse change in circumstances exists requiring us to assess whether the carrying amount of our long-lived assets is recoverable. We determine the recoverability of the assets’ carrying value by estimating the undiscounted future net cash flows (cash inflows less associated cash outflows) that are directly associated with and that are expected to arise as a direct result of the use of the assets in an asset group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss, if any, is recognized for the difference between the fair value of the asset and its carrying value.

     In estimating the future cash flows used to test the asset group for recoverability, we used our own assumptions about the use of the asset group, and considered all available evidence, which included possible future cash flows associated with the courses of actions discussed in Note 1 and the likelihood of the possible outcomes. A probability-weighted approach was used, which resulted in a range of possible future cash flows. Based on the courses of action that management is evaluating and the likelihood of the possible outcomes, management has determined that the carrying value of our long-lived assets in the United States was recoverable as of September 30, 2010. Internationally, management has determined that the carrying value of certain of our long-lived assets in Poland were not recoverable as of September 30, 2010. An impairment test for long-lived assets, consisting of a comparison of the fair value of the asset with its carrying amount, was performed at September 30, 2010 resulting in impairment charges of $6.6 million being recorded for the period. In addition, we recorded an impairment charge of $1.6 million relating to our definite-lived intangible assets in Ireland in conjunction with our sale of those operations. See Note 5 for a description of our analysis of impairment of indefinite lived spectrum assets.

5. Spectrum Licenses

     Owned and leased spectrum licenses consisted of the following (in thousands):

						September 30, 2010												December 31, 2009
		Wtd Avg				Gross Carrying				Accumulated				Net Carrying				Gross Carrying				Accumulated				Net Carrying
		Lease Life				Value				Amortization				Value				Value				Amortization				Value
Indefinite-lived owned spectrum		Indefinite				$	3,106,323			$	—			$	3,106,323			$	3,082,401			$	—			$	3,082,401
Definite-lived owned spectrum		16-20 years					101,121				(7,692	)			93,429				118,069				(6,268	)			111,801
Spectrum leases and prepaid spectrum		26 years					1,320,770				(106,581	)			1,214,189				1,323,405				(62,937	)			1,260,468
Pending spectrum and transition costs			N/A				26,463				—				26,463				40,464				—				40,464
Total spectrum licenses						$	4,554,677			$	(114,273	)		$	4,440,404			$	4,564,339			$	(69,205	)		$	4,495,134

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Supplemental Information (in thousands):
Amortization of prepaid spectrum licenses		$	15,534			$	14,348			$	43,644			$	43,767
Amortization of definite-lived owned spectrum		$	1,023			$	1,684			$	3,122			$	4,055
Cash paid relating to owned spectrum licenses		$	—			$	—			$	11,050			$	11,731

     As of September 30, 2010, future amortization of definite-lived spectrum licenses, favorable spectrum leases and prepaid spectrum lease costs (excluding pending spectrum and spectrum transition costs) is expected to be as follows (in thousands):

		Spectrum				Definite-
		Leases and				Lived Owned
		Prepaid Spectrum				Spectrum				Total
2010		$	13,375			$	1,456			$	14,831
2011			53,333				5,824				59,157
2012			52,690				5,824				58,514
2013			52,156				5,824				57,980
2014			51,803				5,824				57,627
Thereafter			990,832				68,677				1,059,509
Total		$	1,214,189			$	93,429			$	1,307,618

     We expect that all renewal periods in our spectrum leases will be exercised by us, and that the costs to renew will be immaterial, except for future lease payment obligations.

     As described in Note 4, our long-lived assets and our spectrum assets in the United States are combined into a single unit of account for purposes of testing impairment. Internationally, our long-lived assets and our spectrum assets are primarily combined into a single unit of account for each country in which we operate for purposes of testing impairment.

     We assess the impairment of intangible assets with indefinite useful lives, consisting primarily of spectrum licenses, at least annually, or whenever an event or change in circumstances indicates that the carrying value of indefinite lived spectrum may be impaired. As of September 30, 2010, due to our continued losses and significant uncertainties surrounding our ability to obtain required liquidity to fund our operating and capital needs, management has assessed that an adverse change in circumstances exists requiring us to assess whether the carrying amount of our indefinite lived spectrum is impaired. The impairment test for intangible assets with indefinite useful lives consists of a comparison of the fair value of the intangible asset with its carrying amount. Fair value represents the price that would be received to sell an asset in an orderly transaction between market participants. We performed our test of the fair value of spectrum assets using a discounted cash flow model (the Greenfield Approach), which approximates value by assuming a market participant started owning only the spectrum licenses, and was required to make the necessary investments to

prepare the asset for its highest and best use. Based on our analysis, management has determined that there was no impairment of our indefinite lived intangible assets in the United States as of September 30, 2010. Internationally, we recorded an impairment charge of $2.6 million related to our indefinite-lived spectrum assets in Ireland in conjunction with our sale of those operations. See Note 4 for a description of our analysis of the recoverability of our spectrum licenses with definite lives.

6. Other Intangible Assets

     Other intangible assets consisted of the following (in thousands):

		September 30, 2010																December 31, 2009
						Gross												Gross
						Carrying				Accumulated				Net Carrying				Carrying				Accumulated				Net Carrying
		Useful lives				Value				Amortization				Value				Value				Amortization				Value
Subscriber relationships		4 - 7 years				$	115,612			$	(50,931	)		$	64,681			$	120,231			$	(34,084	)		$	86,147
Trade names and trademarks		5 years					3,804				(1,395	)			2,409				3,804				(824	)			2,980
Patents and other		10 years					3,167				(815	)			2,352				3,164				(578	)			2,586
Total other intangibles						$	122,583			$	(53,141	)		$	69,442			$	127,199			$	(35,486	)		$	91,713

     Based on the other intangible assets recorded as of September 30, 2010, future amortization is expected to be as follows (in thousands):

2010		$	7,135
2011			20,411
2012			17,323
2013			12,293
2014			7,728
Thereafter			4,552
Total		$	69,442

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Supplemental Information (in thousands):
Amortization expense		$	6,605			$	8,201			$	20,225			$	24,468

     We evaluate all of our patent renewals on a case by case basis, based on renewal costs and related expected benefits.

     See Note 4 for a description of our analysis of the recoverability of our other intangible assets with definite useful lives.

7. Other Liabilities

Accounts payable and other current liabilities

     Accounts payable and other current liabilities consisted of the following (in thousands):

		September 30,				December 31,
		2010				2009
Accounts payable		$	409,065			$	377,890
Accrued interest			111,299				28,670
Salaries and benefits			50,417				44,326
Business and income taxes payable			36,068				25,924
Other			53,470				50,557
Total		$	660,319			$	527,367

Other long-term liabilities

     Other long-term liabilities consisted of the following (in thousands):

		September 30,				December 31,
		2010				2009
Deferred rents		$	211,317			$	82,650
Other			202,488				148,324
Total		$	413,805			$	230,974

8. Income Taxes

     Clearwire Corporation, which we refer to as Clearwire or the Company, holds no significant assets other than its equity interests in Clearwire Communications LLC, which we refer to as Clearwire Communications. Clearwire Communications is treated as a partnership for U.S. federal income tax purposes and therefore does not pay U.S. federal income tax. As a result, any current and deferred tax consequences arise at the partner level, including Clearwire. Other than the balances associated with the non-U.S. operations, the only temporary difference for Clearwire is the basis difference associated with our investment in the partnership. We have recognized a deferred tax liability for this basis difference. Our deferred tax assets primarily represent net operating loss carryforwards associated with Clearwire’s operations prior to the formation of the Company on November 28, 2008 and the portion of the partnership losses allocated to Clearwire after the formation of the Company on November 28, 2008. A portion of our deferred tax assets will be realized through schedulable reversing deferred tax liabilities. As it relates to the U.S. tax jurisdiction, we determined that our temporary taxable difference associated with our investment in Clearwire Communications will reverse within the carryforward period of the net operating losses and accordingly represents relevant future taxable income. Management has reviewed the facts and circumstances, including the history of net operating losses and projected future tax losses, and determined that it is appropriate to record a valuation allowance against the substantial portion of our deferred tax assets as they are not deemed realizable.

     The income tax benefit (provision) reflected in our consolidated statements of operations primarily reflects certain state taxes and international deferred taxes.

9. Long-term Debt, Net

     During the fourth quarter of 2009, Clearwire Communications completed offerings of $2.52 billion 12% senior secured notes due 2015, which we refer to as the Senior Secured Notes. In connection with the issuance of the Senior Secured Notes, we also issued $252.5 million of notes to Sprint Nextel Corporation, which we refer to as Sprint, and Comcast Corporation, which we refer to as Comcast, with identical terms as the Senior Secured Notes, which we refer to as the Rollover Notes, in replacement of equal amounts of indebtedness under the senior term loan facility that we assumed from the legacy Clearwire Corporation, which we refer to as the Senior Term Loan Facility.

     During 2010, we have entered into a vendor financing and capital lease facilities allowing us to obtain up to $259.0 million of financing. Notes may be entered into under a $160.0 million vendor financing facility, which we refer to as Vendor Financing Notes, until January 31, 2011. The Vendor Financing Notes have a coupon rate based on the 3-month LIBOR plus a spread of 5.50% which are due quarterly and mature in January of 2014. Capital leases with 4 year lease terms may be entered into under a $99.0 million capital lease facility until August 16, 2011. In addition to the above facilities, we also lease certain network construction and

equipment under capital leases with 12 year lease terms. As of September 30, 2010, about $91.0 million of our outstanding debt, comprised of vendor financing and capital lease obligations, is secured by an equivalent amount of Network and base station equipment.

     Long-term debt consisted of the following (in thousands):

		September 30,				December 31,
		2010				2009
Senior Secured Notes and Rollover Notes, due in 2015, interest due bi-annually		$	2,772,494			$	2,772,494
Discount on Senior Secured Notes and Rollover Notes			(53,302	)			(57,763	)
Vendor Financing Notes, due in 2014, interest due quarterly			45,391				—
Discount on Vendor Financing Notes			(206	)			—
Capital lease obligations			45,798				—
Total long-term debt including current portion, net			2,810,175				2,714,731
Less: Current portion of Vendor Financing Notes and capital lease obligations(1)			(9,005	)			—
Total long-term debt, net		$	2,801,170			$	2,714,731

     The weighted average effective interest rate of the Senior Secured Notes and Rollover Notes was 13.04% at September 30, 2010 and 13.02% at December 31, 2009. The weighted average effective interest rate of the Vendor Financing Notes was 6.23% at September 30, 2010.

     Our payment obligations under the Senior Secured Notes and Rollover Notes are guaranteed by certain domestic subsidiaries on a senior basis and secured by certain assets of such subsidiaries on a first-priority lien. The Senior Secured Notes and Rollover Notes contain limitations on our activities, which among other things, include incurring additional indebtedness and guarantee indebtedness; making distributions or payment of dividends or certain other restricted payments or investments; making certain payments on indebtedness; entering into agreements that restrict distributions from restricted subsidiaries; selling or otherwise disposing of assets; merger, consolidation or sales of substantially all of our assets; entering into transactions with affiliates; creating liens; issuing certain preferred stock or similar equity securities and making investments and acquiring assets.

     Interest Expense, Net — Interest expense included in our condensed consolidated statements of operations consisted of the following (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Interest coupon on long-term debt		$	85,258			$	33,220			$	252,113			$	96,495
Accretion of debt discount			2,698				15,867				9,072				53,128
Capitalized interest			(61,393	)			(37,416	)			(176,316	)			(93,388	)
Interest expense		$	26,563			$	11,671			$	84,869			$	56,235

10. Fair Value Measurements

     The following table is a description of the pricing assumptions used for instruments measured and recorded at fair value on a recurring basis, including the general classification of such instruments pursuant to the valuation hierarchy. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Financial Instrument		Hierarchy		Pricing Assumptions
Cash equivalents: Money market mutual funds		Level 1		Market quotes
Short-term investment: U.S. Government and Agency Issues		Level 1		Market quotes
Long-term investment: U.S. Government and Agency Issues		Level 1		Market quotes
Long-term investment: Other debt securities		Level 3		Discount of forecasted cash flows adjusted for default/loss probabilities and estimate of final maturity

   Cash Equivalents and Investments

     Where quoted prices for identical securities are available in an active market, we use quoted market prices to determine the fair value of investment securities and cash equivalents, and they are classified in Level 1 of the valuation hierarchy. Level 1 securities include U.S. government and agency issues and money market mutual funds for which there are quoted prices in active markets.

     For other debt securities, which are classified in Level 3, we use discounted cash flow models to estimate the fair value using various methods including the market and income approaches. In developing these models, we utilize certain assumptions that market participants would use in pricing the investment, including assumptions about risk and the risks inherent in the inputs to the valuation technique. We maximize the use of observable inputs in the pricing models where quoted market prices from securities and derivatives exchanges are available and reliable. We also use certain unobservable inputs that cannot be validated by reference to a readily observable market or exchange data and rely, to a certain extent, on management’s own assumptions about the assumptions that market participants would use in pricing the security. We use many factors that are necessary to estimate market values, including interest rates, market risks, market spreads, timing of contractual cash flows, market liquidity, review of underlying collateral and principal, interest and dividend payments.

     The following table summarizes our financial assets and liabilities by level within the valuation hierarchy at September 30, 2010 (in thousands):

		Quoted				Significant
		Prices in				Other				Significant
		Active				Observable				Unobservable
		Markets				Inputs				Inputs				Total
		(Level 1)				(Level 2)				(Level 3)				Fair Value
Financial assets:
Cash and cash equivalents		$	78,243			$	—			$	—			$	78,243
Short-term investments		$	1,302,837			$	—			$	—			$	1,302,837
Long-term investments		$	—			$	—			$	13,051			$	13,051

     The following table summarizes our financial assets and liabilities by level within the valuation hierarchy at December 31, 2009 (in thousands):

		Quoted				Significant
		Prices in				Other				Significant
		Active				Observable				Unobservable
		Markets				Inputs				Inputs				Total
		(Level 1)				(Level 2)				(Level 3)				Fair Value
Financial assets:
Cash and cash equivalents		$	1,698,017			$	—			$	—			$	1,698,017
Short-term investments		$	2,106,661			$	—			$	—			$	2,106,661
Long-term investments		$	74,516			$	—			$	13,171			$	87,687

     The following table provides a reconciliation of the beginning and ending balances for the major classes of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands):

		Level 3				Level 3
Three Months Ended September 30, 2010 and 2009:		Financial Assets				Financial Liabilities
Balance at July 1, 2010		$	16,022			$	—
Total losses included in:
Other comprehensive loss			(2,971	)			—
Balance at September 30, 2010		$	13,051			$	—
Balance at July 1, 2009		$	10,305			$	17,138
Total losses included in:
Net loss(1)			(1,346	)			(890	)
Balance at September 30, 2009		$	8,959			$	16,248
Net unrealized losses included in net loss for the three months ended September 30, 2010 relating to financial assets held at September 30, 2010		$	—			$	—

		Level 3				Level 3
Nine Months Ended September 30, 2010 and 2009:		Financial Assets				Financial Liabilities
Balance at January 1, 2010		$	13,171			$	—
Total losses included in:
Other comprehensive loss			(120	)			—
Balance at September 30, 2010		$	13,051			$	—
Balance at January 1, 2009		$	18,974			$	21,591
Total losses included in:
Net loss(1)			(10,015	)			(5,343	)
Balance at September 30, 2009		$	8,959			$	16,248
Net unrealized losses included in net loss for the nine months ended September 30, 2010 relating to financial assets held at September 30, 2010		$	—			$	—

     The following table summarizes our assets measured at fair value on a nonrecurring basis at September 30, 2010 (in thousands):

						Quoted				Significant
		Nine Months				Prices in				Other				Significant
		Ended				Active				Observable				Unobservable
		September 30,				Markets				Inputs				Inputs				Total
		2010				(Level 1)				(Level 2)				(Level 3)				Losses
Long-lived assets held and used		$	2,643			$	—			$	—			$	2,643			$	(8,160	)
Spectrum assets			—				—				—				—				(2,630	)
Total		$	2,643			$	—			$	—			$	2,643			$	(10,790	)

     Due to our continued losses and significant uncertainties surrounding our ability to obtain required liquidity as outlined in Note 1, certain long-lived assets, including PP&E and definite-lived spectrum licenses in Poland with a carrying amount of $9.2 million were written down to their implied fair value of $2.6 million, resulting in an impairment charge of $6.6 million which was included in earnings for the period. In addition, we recorded impairment charges of $2.6 million and $1.6 million related to our indefinite-lived spectrum assets and definite-lived intangible assets, respectively, in Ireland in conjunction with our sale of those operations.

     A market approach, using significant unobservable inputs, was used to calculate the fair value of the spectrum and other long-lived assets. Inputs included the use of spectrum auction data from secondary market sales in various European markets of comparable spectrum and estimates of net realizable value. Unobservable inputs were used to adjust the auction data using management’s own assumptions about the assumptions that market participants would use in pricing the spectrum and taking into account regulatory restrictions existing in certain countries.

     The following is the description of the fair value for financial instruments we hold that are not subject to fair value recognition.

     Debt Instruments

     Senior Secured Notes and Rollover Notes with a carrying value of $2.72 billion and an approximate fair value of $2.99 billion were outstanding at September 30, 2010. Senior Secured Notes and Rollover Notes with a carrying value of $2.71 billion and an approximate fair value of $2.81 billion were outstanding at December 31, 2009. To estimate the fair value of these notes we used the average indicative price from several market makers.

     Vendor Financing Notes with a carrying value of $45.2 million and an approximate fair value of $44.0 million were outstanding at September 30, 2010. To estimate fair value of the vendor financing notes, we used an income approach based on the contractual terms of the notes and market-based parameters such as interest rates. A level of subjectivity and judgment was used to estimate an appropriate discount rate to calculate the present value of the estimated cashflows.

11. Commitments and Contingencies

     Future minimum payments under obligations listed below (including all optional expected renewal periods on operating leases) as of September 30, 2010 are as follows (in thousands):

																										Thereafter,
																										Including All
		Total				2010				2011				2012				2013				2014				Renewal Periods
Long-term debt obligations		$	2,805,456			$	—			$	8,241			$	10,987			$	11,097			$	2,637			$	2,772,494
Interest payments			1,833,998				166,852				334,526				333,919				333,264				332,738				332,699
Operating lease obligations (1)			12,329,913				63,414				381,807				396,210				402,998				408,229				10,677,255
Spectrum lease obligations			5,873,410				35,420				153,105				160,577				159,532				167,986				5,196,790
Spectrum service credits			95,012				174				1,098				1,098				1,098				1,098				90,446
Capital lease obligations (2)			86,587				1,670				6,785				7,008				7,239				8,149				55,736
Signed spectrum agreements			11,623				2,906				8,717				—				—				—				—
Network equipment purchase obligations			163,386				163,386				—				—				—				—				—
Other purchase obligations			195,936				20,401				57,778				48,859				29,042				10,953				28,903
Total		$	23,395,321			$	454,223			$	952,057			$	958,658			$	944,270			$	931,790			$	19,154,323

     Spectrum and operating lease expense — Our commitments for non-cancelable operating leases consist mainly of leased spectrum license fees, office space, equipment, and leased sites, including towers and rooftop locations. Certain of the leases provide for minimum lease payments, additional charges and escalation clauses. Certain of the tower leases specify a minimum number of new leases to commence by December 31, 2011. Charges apply if these commitments are not satisfied. Spectrum lease agreements have terms of up to 30 years. Operating leases generally have initial terms of five years with multiple renewal options for additional five-year terms totaling between 20 and 25 years.

     Expense recorded related to spectrum and operating leases was as follows (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Spectrum lease expense		$	57,227			$	50,078			$	163,960			$	149,368
Amortization of prepaid spectrum licenses			15,534				14,348				43,644				43,767
Total spectrum lease expense		$	72,761			$	64,426			$	207,604			$	193,135
Operating lease expense		$	138,592			$	63,852			$	348,738			$	165,702

     Other spectrum commitments — We have commitments to provide Clearwire services to certain lessors in launched markets, and reimbursement of capital equipment and third-party service expenditures of the lessors over the term of the lease. We accrue a monthly obligation for the services and equipment based on the total estimated available service credits divided by the term of the

lease. The obligation is reduced as actual invoices are presented and paid to the lessors. During the three and nine months ended September 30, 2010 we satisfied $561,000 and $925,000, respectively, related to these commitments. During the three and nine months ended September 30, 2009 we satisfied $452,000 and $654,000, respectively, related to these commitments. The maximum remaining commitment at September 30, 2010 is $95.0 million and is expected to be incurred over the term of the related lease agreements, which generally range from 15-30 years.

     As of September 30, 2010, we have signed agreements to acquire approximately $11.6 million in new spectrum, subject to closing conditions. These transactions are expected to be completed within the next twelve months.

     Network equipment purchase obligations — We have purchase commitments with take-or-pay obligations and/or volume commitments for equipment that are non-cancelable and outstanding purchase orders for network equipment for which we believe delivery is likely to occur.

     Other purchase obligations — We have purchase obligations that include minimum purchases we have committed to purchase from suppliers over time and/or unconditional purchase obligations where we guarantee to make a minimum payment to suppliers for goods and services regardless of whether suppliers fully deliver them. They include, among other things, agreements for backhaul, customer devices and IT related and other services. In addition, we are party to various arrangements that are conditional in nature and create an obligation to make payments only upon the occurrence of certain events, such as the actual delivery and acceptance of products or services. Because it is not possible to predict the timing or amounts that may be due under these conditional arrangements, no such amounts have been included in the table above. The table above also excludes blanket purchase order amounts where the orders are subject to cancellation or termination at our discretion or where the quantity of goods or services to be purchased or the payment terms are unknown because such purchase orders are not firm commitments.

     Amdocs Agreement — We have a Customer Care and Billing Services Agreement, which we refer to as the Amdocs Agreement, with Amdocs Software Systems Limited, which we refer to as Amdocs, under which Amdocs will provide a customized customer care and billing platform, which we refer to as the Platform, to us. In connection with the provision of these services and the establishment of the Platform, Amdocs will also license certain of its software to us.

     The initial term of the Amdocs Agreement is seven years. Under the terms of the Amdocs Agreement, we are required to pay Amdocs licensing fees, implementation fees, monthly subscriber fees, and reimbursable expenses. In addition, the Amdocs Agreement contains detailed terms governing implementation and maintenance of the Platform; performance specifications; acceptance testing; charges, credits and payments; and warranties. We capitalized $13.8 million and $61.5 million in costs incurred during the application development stage associated with the Platform for the three and nine months ended September 30, 2010, respectively.

     Legal proceedings — As more fully described below, we are involved in a variety of lawsuits, claims, investigations and proceedings concerning intellectual property, business practices, commercial and other matters. We determine whether we should accrue an estimated loss for a contingency in a particular legal proceeding by assessing whether a loss is deemed probable and can be reasonably estimated. We reassess our views on estimated losses on a quarterly basis to reflect the impact of any developments in the matters in which we are involved. Legal proceedings are inherently unpredictable, and the matters in which we are involved often present complex legal and factual issues. We vigorously pursue defenses in legal proceedings and engage in discussions where possible to resolve these matters on terms favorable to us. It is possible, however, that our business, financial condition and results of operations in future periods could be materially and adversely affected by increased litigation expense, significant settlement costs and/or unfavorable damage awards.

     On April 22, 2009, a purported class action lawsuit was filed against Clearwire U.S. LLC in Superior Court in King County, Washington by a group of five plaintiffs from Hawaii, Minnesota, North Carolina and Washington (Chad Minnick, et al.). The lawsuit generally alleges that we disseminated false advertising about the quality and reliability of our services; imposed an unlawful early termination fee; and invoked unconscionable provisions of our Terms of Service to the detriment of customers. Among other things, the lawsuit seeks a determination that the alleged claims may be asserted on a class-wide basis; an order declaring certain provisions of our Terms of Service, including the early termination fee provision, void and unenforceable; an injunction prohibiting us from collecting early termination fees and further false advertising; restitution of any early termination fees paid by our subscribers; equitable relief; and an award of unspecified damages and attorneys’ fees. On May 27, 2009, an amended complaint was filed and served, adding seven additional plaintiffs, including individuals from New Mexico, Virginia and Wisconsin. On June 2, 2009, plaintiffs served the amended complaint. We removed the action to the United States District Court for the Western District of Washington. On July 23, 2009, we filed a motion to dismiss the amended complaint. The Court stayed discovery pending its ruling on

the motion. The Court granted our motion to dismiss in its entirety on February 2, 2010. Plaintiffs filed a notice of appeal to the Ninth Circuit Court of Appeals. Plaintiffs filed their opening brief to the Ninth Circuit Court of Appeals on June 16, 2010. We filed an answering brief on July 30, 2010. Plaintiffs filed a reply brief on August 27, 2010. The Ninth Circuit Court of Appeals has set oral argument for November 3, 2010. This case is in the early stages of litigation, and its outcome is unknown.

     On September 1, 2009, we were served with a purported class action lawsuit filed in King County Superior Court, brought by representative plaintiff Rosa Kwan. The complaint alleges we placed unlawful telephone calls using automatic dialing and announcing devices and engaged in unlawful collection practices. It seeks declaratory, injunctive, and/or equitable relief and actual and statutory damages under federal and state law. On October 1, 2009, we removed the case to the United States District Court for the Western District of Washington. On October 22, 2009, the Court issued a stipulated order granting plaintiff until October 29, 2009 to file an Amended Complaint. The parties further stipulated to allow a Second Amended Complaint, which plaintiffs filed on December 23, 2009. We then filed a motion to dismiss that was fully briefed on January 15, 2010. On February 22, 2010 the Court granted our motion to dismiss in part, dismissing certain claims with prejudice and granting plaintiff leave to amend the complaint. Plaintiff filed a Third Amended Complaint adding additional state law claims and joining Bureau of Recovery, a purported collection agency, as a co-defendant. On May 5, 2010, Clearwire filed an Answer to the Third Amended Complaint. We are currently engaged in discovery. The Court has scheduled class certification briefing for fourth quarter 2010. This case is in the early stages of litigation, and its outcome is unknown.

     We have been engaged in ongoing negotiations with Sprint to resolve issues related to wholesale pricing for Sprint 4G smartphone usage under our commercial agreements with Sprint. On October 29, 2010, we received a notice from Sprint initiating an arbitration process to resolve these issues. The process is in the early stages, and its outcome is unknown.

     In addition to the matters described above, we are often involved in certain other proceedings which arise in the ordinary course of business and seek monetary damages and other relief. Based upon information currently available to us, none of these other claims are expected to have a material adverse effect on our business, financial condition or results of operations.

     Indemnification agreements - We are currently a party to indemnification agreements with certain officers and each of the members of our Board of Directors. No liabilities have been recorded in the consolidated balance sheets for any indemnification agreements, because they are not probable or estimable.

12. Share-Based Payments

     At September 30, 2010, there were 55,379,287 shares available for grant under the legacy Clearwire Corporation, which we refer to as Old Clearwire, 2008 Stock Compensation Plan, which we refer to as the 2008 Plan, which authorizes us to grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, which we refer to as RSUs, and other stock awards to our employees, directors and consultants. Since the adoption of the 2008 Plan, no additional stock options will be granted under the Old Clearwire 2007 Stock Compensation Plan or the Old Clearwire 2003 Stock Option Plan.

Stock Options

     We granted options to certain officers and employees under the 2008 Plan. All options generally vest over a four-year period. The fair value of option grants is estimated on the date of grant using the Black-Scholes option pricing model.

     A summary of option activity is presented below:

						Weighted-
						Average
		Number of				Exercise
		Options				Price
Options outstanding — January 1, 2010			21,537,731			$	11.09
Granted			996,648				7.37
Forfeited			(2,175,919	)			13.23
Exercised			(2,964,868	)			4.49
Options outstanding — September 30, 2010			17,393,592			$	11.73
Vested and expected to vest — September 30, 2010			16,499,395			$	11.99
Exercisable outstanding — September 30, 2010			11,135,622			$	14.04

     The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions:

		Three Months				Nine Months
		Ended				Ended
		September 30, 2010				September 30, 2010
Expected volatility		60.92%				58.80% - 62.22%
Expected dividend yield		—				—
Expected life (in years)		6.25				6.25
Risk-free interest rate		2.00%				2.00% - 3.15%
Weighted average fair value per option at grant date		$3.84				$4.27

     The total unrecognized share-based compensation costs related to non-vested stock options outstanding at September 30, 2010 was $7.9 million and is expected to be recognized over a weighted average period of approximately two years.

     We used an expected forfeiture rate of 10.09% in determining the calculation of share-based compensation expense for stock options.

     Restricted Stock Units

     We grant RSUs to certain officers and employees under the 2008 Plan. All RSUs generally vest over a four-year period. The fair value of our RSUs is based on the grant-date fair market value of the common stock, which equals the grant date market price.

     A summary of the RSU activity is presented below:

						Weighted-
		Number Of				Average
		RSU’s				Grant Price
Restricted stock units outstanding — January 1, 2010			11,853,194			$	4.60
Granted			8,308,907				6.87
Forfeited			(1,764,974	)			4.98
Released			(3,869,360	)			4.18
Restricted stock units outstanding — September 30, 2010			14,527,767			$	5.96

     As of September 30, 2010, we have total unrecognized compensation cost of approximately $52.8 million, which is expected to be recognized over a weighted-average period of approximately two years.

     We used an expected forfeiture rate of 7.15% in determining share-based compensation expense for RSUs.

     Sprint Equity Compensation Plans

     In connection with the Old Clearwire and the WiMAX Operations of Sprint, which we refer to as the Sprint WiMAX Business, combination on November 28, 2008, certain of the Sprint WiMAX Business employees became employees of Clearwire and currently hold unvested Sprint stock options and RSUs in Sprint’s equity compensation plans. Total unrecognized share-based compensation cost related to unvested stock options and RSUs outstanding as of September 30, 2010 was $20,600 and $74,900, respectively, and is expected to be recognized within six months.

     Share-based compensation expense recognized for all plans is as follows (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Options		$	2,427			$	2,820			$	15,658			$	8,039
RSUs			7,333				5,267				24,565				15,195
Sprint Equity Compensation Plans			16				(431	)			147				974
		$	9,776			$	7,656			$	40,370			$	24,208

     During the three and nine months ended September 30, 2010, we recorded $0 and $10.5 million, respectively, of additional compensation expense related to the acceleration of vesting and the extension of the exercise period for certain RSUs and options.

13. Equity

     On November 9, 2009, we entered into an Investment Agreement, which we refer to as the Investment Agreement, with Clearwire Communications, Sprint, Intel Corporation, which we refer to as Intel, Comcast, Time Warner Cable Inc., which we refer to as Time Warner Cable, Eagle River Holdings, LLC, which we refer to as Eagle River, and Bright House Networks, LLC, which we refer to as Bright House Networks, and who we collectively refer to as the Participating Equityholders, setting forth the terms and conditions upon which the Participating Equityholders would make an investment in Clearwire and Clearwire Communications in an aggregate amount of approximately $1.56 billion, which we refer to as the Private Placement.

     On March 2, 2010, Clearwire Communications received approximately $66.5 million from the purchase of Class B non-voting common interests in Clearwire Communications, which we refer to as Clearwire Communications Class B Common Interests, and voting equity in Clearwire Communications, which we refer to as Clearwire Communications Voting Interests, in connection with the consummation of the third closing, which we refer to as the Third Investment Closing, and final phase of the Private Placement. At the Third Investment Closing, in exchange for the purchase by Sprint, Comcast, Time Warner Cable and Bright House Networks of Clearwire Communications Class B Common Interests and Clearwire Communications Voting Interests in amounts exceeding their respective percentage interest, which was determined immediately prior to the consummation of the first phase of the Private Placement on November 13, 2009, Clearwire Communications paid a fee, which we refer to as an Over-Allotment Fee, to Sprint, Comcast, Time Warner Cable and Bright House Networks of approximately $3.2 million, in the aggregate. Clearwire Communications delivered the applicable Over-Allotment Fee to Sprint, one-half in cash and one-half in the form of Clearwire Communications Class B Common Interests valued at $7.33 per interest and an equal number of Clearwire Communications Voting Interests, and to Comcast, Time Warner Cable and Bright House Networks in cash. Immediately following the receipt by the Participating Equityholders of Clearwire Communications Voting Interests and Clearwire Communications Class B Common Interests at the Third Investment Closing, each of the Participating Equityholders contributed to Clearwire its Clearwire Communications Voting Interests in exchange for an equal number of shares of Clearwire Class B common stock, which we refer to as Class B Common Stock, par value $0.0001 per share, of Clearwire.

     Under the Investment Agreement, Clearwire committed to a rights offering, pursuant to which rights to purchase shares of Clearwire Class A common stock, which we refer to as 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 exercisable for up to 93.9 million 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 held 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.

14. Net Loss Per Share

Basic Net Loss Per Share

     The net loss per share available to holders of Class A Common Stock is calculated based on the following information (in thousands, except per share amounts):

		Three Months Ended				Three Months Ended
		September 30, 2010				September 30, 2009
Net loss		$	(564,605	)		$	(305,389	)
Non-controlling interests in net loss of consolidated subsidiaries			425,185				222,962
Net loss attributable to Class A Common Stockholders		$	(139,420	)		$	(82,427	)
Weighted average shares Class A Common Stock outstanding			242,332				195,456
Loss per share		$	(0.58	)		$	(0.42	)
		Nine Months Ended				Nine Months Ended
		September 30, 2010				September 30, 2009
Net loss		$	(1,551,148	)		$	(829,925	)
Non-controlling interests in net loss of consolidated subsidiaries			1,191,720				603,069
Net loss attributable to Class A Common Stockholders		$	(359,428	)		$	(226,856	)
Weighted average shares Class A Common Stock outstanding			215,515				194,145
Loss per share		$	(1.67	)		$	(1.17	)

Diluted Loss Per Share

     The potential exchange of Clearwire Communications Class B Common Interests together with Class B Common Stock for Class A Common Stock may have a dilutive effect on diluted loss per share due to certain tax effects. That exchange would result in both an increase in the number of Class A Common Stock outstanding and a corresponding increase in the net loss attributable to Class A common stockholders through the elimination of the non-controlling interests’ allocation. Further, to the extent that all of the Clearwire Communications Class B Common Interests and Class B Common Stock are converted to Class A Common Stock, the Clearwire Communications partnership structure would no longer exist and Clearwire will be required to recognize a tax provision related to indefinite lived intangible assets.

     For the nine months ended September 30, 2010, Class B Common Stock was excluded from the computation of diluted loss per share as its inclusion would have been antidilutive. For purposes of calculating diluted loss per share, weighted average shares of Class A Common Stock is computed based on the weighted average number of days outstanding in the period, and Net Loss attributable to Class A Common Stockholders is computed based on ownership interests at the end of a period. Due to the timing of the shares issued from the Rights Offering, inclusion of Class B Common Stock is antidilutive for the nine month period ending September 30, 2010.

     For the three months ended September 30, 2010 and the three and nine months ended September 30, 2009, net loss per share attributable to holders of Class A Common Stock on a diluted basis assumes conversion of the Clearwire Communications Class B Common Interests and Class B Common Stock. Diluted loss per share is calculated based on the following information (in thousands, except per share amounts):

		Three Months Ended				Three Months Ended
		September 30, 2010				September 30, 2009
Net loss attributable to Class A common stockholders		$	(139,420	)		$	(82,427	)
Non-controlling interests in net loss of consolidated subsidiaries			(425,185	)			(222,962	)
Tax adjustment after dissolution of Clearwire Communications			(7,106	)			(6,930	)
Net loss available to Class A common stockholders, assuming the exchange of Class B Common Stock to Class A Common Stock		$	(571,711	)		$	(312,319	)
Weighted average shares Class A Common Stock outstanding (diluted)			985,813				724,280
Loss per share		$	(0.58	)		$	(0.43	)

		Nine Months Ended				Nine Months Ended
		September 30, 2010				September 30, 2009
Net loss attributable to Class A common stockholders		$	(359,428	)		$	(226,856	)
Non-controlling interests in net loss of consolidated subsidiaries			—				(603,069	)
Tax adjustment after dissolution of Clearwire Communications			—				(18,794	)
Net loss available to Class A common stockholders, assuming the exchange of Class B Common Stock to Class A Common Stock		$	(359,428	)		$	(848,719	)
Weighted average shares Class A Common Stock outstanding (diluted)			215,515				718,082
Loss per share		$	(1.67	)		$	(1.18	)

     Higher loss per share on a diluted basis for the three months ended September 30, 2010 and the three and nine months ended September 30, 2009 is due to the hypothetical loss of partnership status for Clearwire Communications upon conversion of all Clearwire Communications Class B Common Interests and Class B Common Stock.

     The diluted weighted average shares did not include the effects of the following potential common shares as their inclusion would have been antidilutive (in thousands):

		Three Months Ended				Three Months Ended
		September 30, 2010				September 30, 2009
Stock options			17,703				22,480
Restricted stock units			12,139				10,808
Warrants			17,806				17,806
			47,648				51,094
		Nine Months Ended				Nine Months Ended
		September 30, 2010				September 30, 2009
Class B Common Stock			741,450				—
Stock options			18,864				5,008
Restricted stock units			11,800				8,674
Warrants			17,806				17,806
Subscription rights			30,293				—
Contingent shares			2,031				4,887
			822,244				36,375

     The subscription rights for the nine months ended September 30, 2010 relate to Class A Common Stock that were granted to each holder of Class A Common Stock as of December 17, 2009. 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 contingent shares for the nine months ended September 30, 2010 relate to Clearwire Communications Class B Common Interests and Clearwire Communications Voting Interests that were issued to Participating Equityholders upon the Third Investment Closing, as such interests can be exchanged for Class A Common Stock.

     We have calculated and presented basic and diluted net loss per share of Class A Common Stock. Class B Common Stock loss per share is not calculated since it does not contractually participate in distributions of Clearwire.

15. Business Segments

     Information about operating segments is based on our internal organization and reporting of revenue and operating income (loss) based upon internal accounting methods. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief Executive Officer. As of September 30, 2010 and December 31, 2009, and for the three and nine months ended September 30, 2010 and 2009, we have identified two reportable segments: the United States and the International businesses.

     We report business segment information as follows (in thousands):

		Three months ended September 30, 2010												Three months ended September 30, 2009
		United States				International				Total				United States				International				Total
Revenues		$	142,162			$	4,802			$	146,964			$	61,100			$	7,712			$	68,812
Cost of goods and services and network costs (exclusive of items shown separately below)			228,001				13,320				241,321				94,050				3,446				97,496
Operating expenses			311,768				9,254				321,022				199,703				10,001				209,704
Depreciation and amortization			121,287				3,061				124,348				48,781				4,157				52,938
Total operating expenses			661,056				25,635				686,691				342,534				17,604				360,138
Operating loss		$	(518,894	)		$	(20,833	)			(539,727	)		$	(281,434	)		$	(9,892	)			(291,326	)
Other expense, net											(24,965	)											(14,260	)
Income tax benefit (provision)											87												197
Net loss											(564,605	)											(305,389	)
Less: non-controlling interests in net loss of consolidated subsidiaries											425,185												222,962
Net loss attributable to Clearwire Corporation										$	(139,420	)										$	(82,427	)
Capital expenditures
United States										$	760,106											$	409,502
International											3,091												770
										$	763,197											$	410,272