##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission file number 001-33349
 CLEARWIRE CORPORATION
  Delaware
    
    56-2408571(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)4400 Carillon PointKirkland, Washington
    
    98033(Address of principal executive office)
    
    (zip code)
 (425) 216-7600
 þ o
  o o þ
 o þ




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##### 



CLEARWIRE
CORPORATION AND SUBSIDIARIES 
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2007
Table of Contents
  
 PagePart I. Financial InformationItem 1.
    
    Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of September
30, 2007 and December 31, 2006
    
    
    2Condensed Consolidated Statements of Operations for the
three and nine months ended September 30, 2007 and September
30, 2006
    
    
    3Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 2007 and September 30, 2006
    
    
    4Condensed Consolidated Statement of Stockholders
Equity for the nine months ended September 30, 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4.
    
    Controls and Procedures
    
    
    29Part II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    31Item 1A.
    
    Risk Factors
    
    
    31Item 6.
    
    Exhibits
    
    
    45Signatures
    
    
    46EXHIBIT 10.1EXHIBIT 10.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
   September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    714,283
    
    
    $
    438,030Short-term investments
    
    
    303,033
    
    
    
    663,644Restricted cash
    
    
    13,985
    
    
    
    10,727Restricted investments
    
    
    
    
    
    
    69,401Accounts receivable, net of allowance of $1,947 and $753
    
    
    3,498
    
    
    
    2,774Notes receivable, related party
    
    
    6,557
    
    
    
    4,409Inventory
    
    
    3,749
    
    
    
    1,398Prepaids and other assets
    
    
    34,727
    
    
    
    19,219Total current assets
    
    
    1,079,832
    
    
    
    1,209,602Property, plant and equipment, net
    
    
    519,366
    
    
    
    302,798Restricted cash
    
    
    182
    
    
    
    117Restricted investments
    
    
    
    
    
    
    16,269Prepaid spectrum license fees
    
    
    426,960
    
    
    
    241,151Spectrum licenses and other intangible assets, net
    
    
    465,579
    
    
    
    222,980Goodwill
    
    
    33,424
    
    
    
    30,908Investments in equity investees
    
    
    15,350
    
    
    
    14,983Other assets
    
    
    30,777
    
    
    
    29,565TOTAL ASSETS
    
    $
    2,571,470
    
    
    $
    2,068,373LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable and accrued expenses
(includes related party balances of $4,289 and $6,799)
    
    $
    111,044
    
    
    $
    108,216Deferred rent
    
    
    16,245
    
    
    
    6,986Deferred revenue
    
    
    8,801
    
    
    
    5,599Due to affiliate
    
    
    13
    
    
    
    532Current portion of long-term debt
    
    
    20,000
    
    
    
    1,250Total current liabilities
    
    
    156,103
    
    
    
    122,583Long-term debt, net of discount of $0 and $110,007
    
    
    990,000
    
    
    
    644,438Other long-term liabilities
    
    
    87,066
    
    
    
    42,385Total liabilities
    
    
    1,233,169
    
    
    
    809,406MINORITY INTEREST
    
    
    13,234
    
    
    
    1,358COMMITMENTS
AND CONTINGENCIES (NOTE 8)STOCKHOLDERS EQUITYPreferred stock, par value $0.0001, 5,000,000 shares
authorized; no shares issued or outstandingCommon stock, par value $0.0001, and additional paid-in
capital, 350,000,000 shares authorized; Class A,
135,514,463 and 109,325,236 shares issued and outstanding
    
    
    2,084,173
    
    
    
    1,474,759Class B, 28,596,685 shares issued and outstanding
    
    
    234,376
    
    
    
    234,376Common stock and warrants payable
    
    
    
    
    
    
    166Deferred compensation
    
    
    
    
    
    
    (116
    )Accumulated other comprehensive income
    
    
    4,441
    
    
    
    6,990Accumulated deficit
    
    
    (997,923
    )
    
    
    (458,566
    )Total stockholders equity
    
    
    1,325,067
    
    
    
    1,257,609TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    2,571,470
    
    
    $
    2,068,373
  2




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##### Table of Contents



CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006REVENUES:Service
    
    $
    41,297
    
    
    $
    18,962
    
    
    $
    106,056
    
    
    $
    43,855Equipment and other (includes related party
sales of $0, $3,278, $0 and $15,546)
    
    
    
    
    
    
    7,937
    
    
    
    
    
    
    
    32,583Total revenues
    
    
    41,297
    
    
    
    26,899
    
    
    
    106,056
    
    
    
    76,438OPERATING EXPENSES:Cost of goods and services (exclusive of
items shown
separately below):Cost of service (includes related party
costs of $815, $0, $2,205 and $0)
    
    
    29,268
    
    
    
    13,387
    
    
    
    69,316
    
    
    
    33,999Cost of equipment (includes related
party costs of $0, $2,222, $0 and $8,914)
    
    
    
    
    
    
    5,316
    
    
    
    
    
    
    
    19,674Selling, general and administrative expense
    
    
    103,424
    
    
    
    52,166
    
    
    
    259,456
    
    
    
    142,532Research and development
    
    
    194
    
    
    
    2,603
    
    
    
    1,217
    
    
    
    8,470Depreciation and amortization
    
    
    22,659
    
    
    
    9,538
    
    
    
    58,558
    
    
    
    26,372Spectrum lease expense
    
    
    28,278
    
    
    
    6,661
    
    
    
    56,543
    
    
    
    14,649Gain on sale of NextNet
    
    
    
    
    
    
    (19,793
    )
    
    
    
    
    
    
    (19,793
    )Total operating expenses
    
    
    183,823
    
    
    
    69,878
    
    
    
    445,090
    
    
    
    225,903OPERATING LOSS
    
    
    (142,526
    )
    
    
    (42,979
    )
    
    
    (339,034
    )
    
    
    (149,465
    )OTHER INCOME (EXPENSE):Interest income
    
    
    16,596
    
    
    
    6,249
    
    
    
    52,006
    
    
    
    13,135Interest expense
    
    
    (28,813
    )
    
    
    (19,312
    )
    
    
    (76,542
    )
    
    
    (49,741
    )Foreign currency translation gains (losses),
net
    
    
    292
    
    
    
    (20
    )
    
    
    224
    
    
    
    (20
    )Loss on extinguishment of debt
    
    
    (159,193
    )
    
    
    
    
    
    
    (159,193
    )
    
    
    Other-than-temporary impairment loss on
investments
    
    
    (14,208
    )
    
    
    
    
    
    
    (14,208
    )
    
    
    Other income (expense), net
    
    
    453
    
    
    
    (821
    )
    
    
    2,197
    
    
    
    1,426Total other expense, net
    
    
    (184,873
    )
    
    
    (13,904
    )
    
    
    (195,516
    )
    
    
    (35,200
    )LOSS BEFORE INCOME TAXES, MINORITY
INTEREST AND LOSSES FROM EQUITY INVESTEES
    
    
    (327,399
    )
    
    
    (56,883
    )
    
    
    (534,550
    )
    
    
    (184,665
    )Income tax provision
    
    
    (1,198
    )
    
    
    (648
    )
    
    
    (3,927
    )
    
    
    (1,875
    )LOSS BEFORE MINORITY INTEREST AND LOSSES
FROM EQUITY INVESTEES
    
    
    (328,597
    )
    
    
    (57,531
    )
    
    
    (538,477
    )
    
    
    (186,540
    )Losses from equity investees, net
    
    
    (1,034
    )
    
    
    (2,042
    )
    
    
    (3,841
    )
    
    
    (5,757
    )Minority interest in net loss (income) of
consolidated
subsidiaries
    
    
    994
    
    
    
    (190
    )
    
    
    2,961
    
    
    
    446NET LOSS
    
    $
    (328,637
    )
    
    $
    (59,763
    )
    
    $
    (539,357
    )
    
    $
    (191,851
    )Net loss per common share, basic and diluted
    
    $
    (2.01
    )
    
    $
    (0.61
    )
    
    $
    (3.44
    )
    
    $
    (2.30
    )Weighted average common shares outstanding,
basic and diluted
    
    
    163,586
    
    
    
    97,854
    
    
    
    156,940
    
    
    
    83,595
  3




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##### Table of Contents



CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
   Nine months endedSeptember 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (539,357
    )
    
    $
    (191,851
    )Adjustments to reconcile net loss to net cash used in operating activities:Provision for uncollectible accounts
    
    
    3,631
    
    
    
    614Depreciation and amortization
    
    
    58,558
    
    
    
    26,372Amortization of prepaid license fees
    
    
    16,962
    
    
    
    4,301Amortization of deferred financing costs and accretion of debt discount
    
    
    19,234
    
    
    
    13,044Deferred income taxes
    
    
    3,901
    
    
    
    1,875Share-based compensation
    
    
    28,600
    
    
    
    8,366Minority interest
    
    
    (2,961
    )
    
    
    (446
    )Losses from equity investees, net
    
    
    3,841
    
    
    
    5,757Loss on extinguishment of debt
    
    
    159,193
    
    
    
    Other-than-temporary impairment loss on investments
    
    
    14,208
    
    
    
    Loss (gain) on other asset disposals
    
    
    531
    
    
    
    (1,885
    )Gain on sale of equity investment
    
    
    (2,213
    )Gain on sale of business
    
    
    
    
    
    
    (19,793
    )Changes in assets and liabilities, net of effects from acquisitions:Prepaid spectrum license fees
    
    
    (183,776
    )
    
    
    (50,510
    )Inventory
    
    
    (2,331
    )
    
    
    (1,823
    )Accounts receivable
    
    
    (3,954
    )
    
    
    648Prepaids and other assets
    
    
    (15,716
    )
    
    
    (2,710
    )Accounts payable
    
    
    26,544
    
    
    
    (2,584
    )Accrued expenses and other liabilities
    
    
    17,136
    
    
    
    31,057Due to affiliate
    
    
    (519
    )
    
    
    13Net cash used in operating activities
    
    
    (398,488
    )
    
    
    (179,555
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property, plant and equipment
    
    
    (279,198
    )
    
    
    (129,032
    )Payments for acquisitions of spectrum licenses and other
    
    
    (212,353
    )
    
    
    (34,701
    )Purchases of short-term investments
    
    
    (1,144,293
    )
    
    
    (655,903
    )Sales or maturities of short-term investments
    
    
    1,478,252
    
    
    
    385,389Purchase of minority interest
    
    
    (1,173
    )
    
    
    Investments in equity investees
    
    
    (5,293
    )
    
    
    (2,161
    )Issuance of notes receivable, related party
    
    
    (2,000
    )
    
    
    (4,105
    )Restricted cash
    
    
    (3,323
    )
    
    
    (735
    )Restricted investments
    
    
    85,670
    
    
    
    (33,328
    )Business acquisitions, net of cash acquired
    
    
    (7,067
    )
    
    
    (44,806
    )Proceeds from sale of equity investment
    
    
    2,250
    
    
    
    47,085Proceeds from sale of other assets
    
    
    1,000
    
    
    
    Net cash used in investing activities
    
    
    (87,528
    )
    
    
    (472,297
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock for IPO and other, net
    
    
    556,005
    
    
    
    1,031,167Proceeds from issuance of common stock for option and warrant exercises
    
    
    4,610
    
    
    
    Proceeds from issuance of debt
    
    
    1,000,000
    
    
    
    495,350Deferred financing fees
    
    
    (66,954
    )
    
    
    (21,820
    )Principal payments on long-term debt
    
    
    (745,696
    )
    
    
    Contributions from minority interests
    
    
    15,000
    
    
    
    Net cash provided by financing activities
    
    
    762,965
    
    
    
    1,504,697Effect of foreign currency exchange rates on cash and cash equivalents
    
    
    (696
    )
    
    
    2,231Net increase in cash and cash equivalents
    
    
    276,253
    
    
    
    855,076CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    438,030
    
    
    
    29,188End of period
    
    $
    714,283
    
    
    $
    884,264SUPPLEMENTAL CASH FLOW DISCLOSURES:Common stock and warrants issued for spectrum licenses
    
    $
    21,379
    
    
    $
    41,981Common stock and warrants issued for business acquisitions
    
    $
    15
    
    
    $
    25,022Cash paid for taxes
    
    $
    24
    
    
    $
    Cash paid for interest
    
    $
    91,229
    
    
    $
    49,253Fixed asset purchases in accounts payable
    
    $
    10,672
    
    
    $
    6,849Non-cash dividends to related party
    
    $
    1,465
    
    
    $
    2,384
  4




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##### Table of Contents



CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
   Class A
    
    
    Class B
    
    
    Common
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    TotalCommon Stock, Warrants and
    
    
    Common Stock and
    
    
    stock
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total
    
    
    ComprehensiveAdditional Paid In Capital
    
    
    Additional Paid In Capital
    
    
    and warrants
    
    
    Deferred
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Stockholders
    
    
    IncomeShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    payable
    
    
    Compensation
    
    
    Income (Loss)
    
    
    Deficit
    
    
    Equity
    
    
    (Loss)Balances at December 31, 2006
    
    
    109,325
    
    
    $
    1,474,759
    
    
    
    28,597
    
    
    $
    234,376
    
    
    $
    166
    
    
    $
    (116
    )
    
    $
    6,990
    
    
    $
    (458,566
    )
    
    $
    1,257,609
    
    
    $
    (276,731
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (539,357
    )
    
    
    (539,357
    )
    
    
    (539,357
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,895
    
    
    
    
    
    
    
    9,895
    
    
    
    9,895Unrealized loss on short-term investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,652
    )
    
    
    
    
    
    
    (26,652
    )
    
    
    (26,652
    )Reclassification
adjustment for other-than-temporary impairment loss
on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,208
    
    
    
    
    
    
    
    14,208
    
    
    
    14,208Common stock issued from IPO, net
    
    
    24,000
    
    
    
    556,005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    556,005Common stock issued for spectrum
    
    
    233
    
    
    
    4,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,200Warrants issued
    
    
    
    
    
    
    17,194
    
    
    
    
    
    
    
    
    
    
    
    (166
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,028Options and warrants exercised
    
    
    1,884
    
    
    
    4,610
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,610Cashless
option exercises and other
 stock transactions
    
    
    39
    
    
    
    (618
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (618
    )Deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116Restricted stock compensation
    
    
    33
    
    
    
    286
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286Share-based compensation
    
    
    
    
    
    
    27,737
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,737Balances at September 30, 2007
    
    
    135,514
    
    
    $
    2,084,173
    
    
    
    28,597
    
    
    $
    234,376
    
    
    $
    
    
    
    $
    
    
    
    $
    4,441
    
    
    $
    (997,923
    )
    
    $
    1,325,067
    
    
    $
    (541,906
    )
  5




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##### Table of Contents



CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
 1. Description of Business and Basis of Presentation
 The Business
   Basis of Presentation
  Disclosures about
Segments of an Enterprise and Related Information
 Principles of Consolidation
  Use of Estimates
  6




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##### Table of Contents



CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
  Recent Accounting Pronouncements
 SFAS No. 159  The Fair Value Option for Financial
Assets and Financial Liabilities
 SFAS No. 157 Fair Value Measurements
 2. Summary of Significant Accounting Policies
  3. Significant Transactions
    7




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##### Table of Contents



CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
 Business Combinations
 Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a
Business
 4. Short-Term Investments
  September 30, 2007
    
    
    December 31, 2006Gross Unrealized
    
    
    Gross UnrealizedSecurity
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair Value
    
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueCommercial paper
    
    $
    29,880
    
    
    $
    8
    
    
    $
    (8
    )
    
    $
    29,880
    
    
    $
    90,232
    
    
    $
    
    
    
    $
    
    
    
    $
    90,232Corporate bonds
    
    
    113,987
    
    
    
    19
    
    
    
    (114
    )
    
    
    113,892
    
    
    
    226,316
    
    
    
    15
    
    
    
    (85
    )
    
    
    226,246Municipal bonds
    
    
    51,109
    
    
    
    25
    
    
    
    
    
    
    
    51,134
    
    
    
    156,245
    
    
    
    21
    
    
    
    (26
    )
    
    
    156,240Auction rate securities
    
    
    114,575
    
    
    
    
    
    
    
    (12,447
    )
    
    
    102,128
    
    
    
    116,575
    
    
    
    
    
    
    
    
    
    
    
    116,575Other securities
    
    
    6,000
    
    
    
    
    
    
    
    (1
    )
    
    
    5,999
    
    
    
    74,351
    
    
    
    
    
    
    
    
    
    
    
    74,351$
    315,551
    
    
    $
    52
    
    
    $
    (12,570
    )
    
    $
    303,033
    
    
    $
    663,719
    
    
    $
    36
    
    
    $
    (111
    )
    
    $
    663,644
    8




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
  5. Property, Plant and Equipment
  September 30,
    
    
    December 31,2007
    
    
    2006Network and base station equipment
    
    $
    262,026
    
    
    $
    161,875Customer premise equipment
    
    
    78,952
    
    
    
    47,700Furniture, fixtures and equipment
    
    
    44,567
    
    
    
    20,546Leasehold improvements
    
    
    12,324
    
    
    
    8,340Construction in progress
    
    
    221,993
    
    
    
    112,669619,862
    
    
    
    351,130Less: accumulated depreciation
    
    
    (100,496
    )
    
    
    (48,332
    )$
    519,366
    
    
    $
    302,798
  6. Spectrum Licenses, Goodwill, and Other Intangible Assets
      9




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
   7. Accounts Payable and Accrued Expenses
  September 30,
    
    
    December 31,2007
    
    
    2006Accounts payable
    
    $
    56,189
    
    
    $
    41,710Accrued interest
    
    
    6,788
    
    
    
    27,272Salaries and benefits
    
    
    18,635
    
    
    
    12,095Other
    
    
    29,432
    
    
    
    27,139$
    111,044
    
    
    $
    108,216
 8. Commitments and Contingencies
   Leased
    
    
    OperatingYears Ending December 31,
    
    Spectrum
    
    
    Lease
    
    
    Total2007, remaining as of September 30
    
    $
    8,438
    
    
    $
    15,870
    
    
    $
    24,3082008
    
    
    34,581
    
    
    
    62,502
    
    
    
    97,0832009
    
    
    34,522
    
    
    
    62,724
    
    
    
    97,2462010
    
    
    35,005
    
    
    
    62,116
    
    
    
    97,1212011
    
    
    34,867
    
    
    
    61,896
    
    
    
    96,763Thereafter, including all renewal periods
    
    
    1,364,337
    
    
    
    1,195,203
    
    
    
    2,559,540$
    1,511,750
    
    
    $
    1,460,311
    
    
    $
    2,972,061
  9. Income Taxes
  10




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
     10. Stockholders Equity
    11. Share-Based Payments
  11




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
 Stock Options
 ), Share-Based Payment
  Three months ended September 30,
    
    
    Nine months ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Cost of service
    
    $
    21
    
    
    $
    31
    
    
    $
    53
    
    
    $
    717Selling, general and administrative
    
    
    10,378
    
    
    
    4,357
    
    
    
    28,547
    
    
    
    7,649$
    10,399
    
    
    $
    4,388
    
    
    $
    28,600
    
    
    $
    8,366
  Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    2007
    
    2006Expected volatility
    
    
    58.28
    %
    
    68.44%
    
    57.07% - 64.68%
    
    68.44% - 78.62%Expected dividend yield
    
    
    
    
    
    
    
    
    
    Expected life (in years)
    
    
    6.25
    
    
    6.25
    
    6.25
    
    6.25Risk-free interest rate
    
    
    4.80
    %
    
    4.72% - 4.87%
    
    4.46% - 5.00%
    
    4.45% - 4.92%Weighted average fair value per option at grant date
    
    $
    13.91
    
    
    $11.95
    
    $15.06
    
    $11.53
     Restricted Stock Awards
  12




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
  Restricted Stock Units
  SAR Plan
   Warrants
   Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    2007
    
    2006Expected volatility
    
    
    N/A
    
    
    73.76% to 88.54%
    
    64.68% to 88.54%
    
    73.76% to 88.54%Expected dividend yield
    
    
    N/A
    
    
    
    
    
    
    Contract life (in years)
    
    
    N/A
    
    
    5-10
    
    5-10
    
    5-10Risk-free interest rate
    
    
    N/A
    
    
    3.98% - 5.16%
    
    3.05% - 4.81%
    
    3.05% - 5.16%Weighted average fair value per warrant at issuance date
    
    
    N/A
    
    
    $10.31
    
    $12.07
    
    $9.84
 12. Net Loss Per Share
 Earnings
Per Share,
 13




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
  Three months ended September 30,
    
    
    Nine months ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Stock options
    
    
    14,394,765
    
    
    
    9,946,257
    
    
    
    13,535,389
    
    
    
    9,341,131Nonvested restricted stock
    
    
    74,999
    
    
    
    83,333
    
    
    
    76,800
    
    
    
    65,018Restricted Stock Units
    
    
    73,533
    
    
    
    
    
    
    
    24,780
    
    
    
    Warrants
    
    
    18,153,770
    
    
    
    17,545,558
    
    
    
    18,150,917
    
    
    
    15,889,73932,697,067
    
    
    
    27,575,148
    
    
    
    31,787,886
    
    
    
    25,295,888
 13.  Comprehensive Loss
    September 30,
    
    
    December 31,2007
    
    
    2006Net unrealized loss on available-for-sale investments
    
    $
    (26,726
    )
    
    $
    (74
    )Other-than-temporary impairment loss on investments
    
    
    14,208
    
    
    
    Cumulative foreign currency translation adjustment
    
    
    16,959
    
    
    
    7,064Total accumulated other comprehensive income
    
    $
    4,441
    
    
    $
    6,990
 14.  Geographic Information
  Revenue (a)
    
    
    Revenue (a)
    
    
    Long-lived Assets (b)Three months ended September 30,
    
    
    Nine months ended September 30,
    
    
    September 30,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006United States
    
    $
    33,424
    
    
    $
    22,120
    
    
    $
    85,598
    
    
    $
    65,150
    
    
    $
    1,273,452
    
    
    $
    661,444Europe
    
    
    7,873
    
    
    
    4,779
    
    
    
    20,458
    
    
    
    11,288
    
    
    
    128,925
    
    
    
    103,782$
    41,297
    
    
    $
    26,899
    
    
    $
    106,056
    
    
    $
    76,438
    
    
    $
    1,402,377
    
    
    $
    765,226
 
 (a)
    
    Revenues are attributed to geographic areas based on the location of the customer.(b)
    
    Consists of property, plant and equipment and prepaid spectrum and spectrum licenses
attributable to the geographic area based on location. 15.  Related Party Transactions
  14




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
  Relationships among Certain Stockholders, Directors, and Officers of Clearwire
    Advisory Services Agreement
   Nextel Undertaking 
 15




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
  Intel Collaboration Agreement
  Motorola Agreements
 HITN and its Affiliates
    16




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)
 Agreements with Bell Canada
  16.  Subsequent Events
   17




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CLEARWIRE CORPORATION AND SUBSIDIARIES


Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis summarizes the significant factors affecting our
consolidated results of operations, financial condition and liquidity position for the three and
nine months ended September 30, 2007 and 2006 and should be read in conjunction with our
consolidated financial statements and related notes included elsewhere in this filing. The
following discussion and analysis contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to these differences include
those discussed below and elsewhere in this quarterly report on Form 10-Q , particularly in the
section entitled Risk Factors.
 Forward-Looking Statements
    Overview and Recent Developments
     18




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
          19




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
       20




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
 Critical Accounting Policies
    Revenue Recognition
 Revenue
Recognition
 Accounting for Revenue
Arrangements with Multiple Deliverables
  Accounting for
Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors Products)
 Software Revenue Recognition
  21




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
   Share-Based Compensation
 Share-Based Payment
 Accounting for Spectrum Licenses and Leases
 Goodwill and Other Intangible Assets,
  Deferred Tax Asset Valuation Allowance
 Accounting for Income Taxes
 22




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
 Results of Operations
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006REVENUES:Service
    
    $
    41,297
    
    
    $
    18,962
    
    
    $
    106,056
    
    
    $
    43,855Equipment and other (includes related party
sales of $0,
$3,278, $0 and $15,546)
    
    
    
    
    
    
    7,937
    
    
    
    
    
    
    
    32,583Total revenues
    
    
    41,297
    
    
    
    26,899
    
    
    
    106,056
    
    
    
    76,438OPERATING EXPENSES:Cost of goods and services (exclusive of
items shown
separately below):Cost of service (includes related party
costs of $815, $0,
$2,205 and $0)
    
    
    29,268
    
    
    
    13,387
    
    
    
    69,316
    
    
    
    33,999Cost of equipment (includes related
party costs of $0,
$2,222, $0 and $8,914 )
    
    
    
    
    
    
    5,316
    
    
    
    
    
    
    
    19,674Selling, general and administrative expense
    
    
    103,424
    
    
    
    52,166
    
    
    
    259,456
    
    
    
    142,532Research and development
    
    
    194
    
    
    
    2,603
    
    
    
    1,217
    
    
    
    8,470Depreciation and amortization
    
    
    22,659
    
    
    
    9,538
    
    
    
    58,558
    
    
    
    26,372Spectrum lease expense
    
    
    28,278
    
    
    
    6,661
    
    
    
    56,543
    
    
    
    14,649Gain on sale of NextNet
    
    
    
    
    
    
    (19,793
    )
    
    
    
    
    
    
    (19,793
    )Total operating expenses
    
    
    183,823
    
    
    
    69,878
    
    
    
    445,090
    
    
    
    225,903OPERATING LOSS
    
    
    (142,526
    )
    
    
    (42,979
    )
    
    
    (339,034
    )
    
    
    (149,465
    )OTHER INCOME (EXPENSE):Interest income
    
    
    16,596
    
    
    
    6,249
    
    
    
    52,006
    
    
    
    13,135Interest expense
    
    
    (28,813
    )
    
    
    (19,312
    )
    
    
    (76,542
    )
    
    
    (49,741
    )Foreign currency translation gains
(losses), net
    
    
    292
    
    
    
    (20
    )
    
    
    224
    
    
    
    (20
    )Loss on extinguishment of debt
    
    
    (159,193
    )
    
    
    
    
    
    
    (159,193
    )
    
    
    Other-than-temporary impairment loss on
investments
    
    
    (14,208
    )
    
    
    
    
    
    
    (14,208
    )
    
    
    Other income (expense), net
    
    
    453
    
    
    
    (821
    )
    
    
    2,197
    
    
    
    1,426Total other expense, net
    
    
    (184,873
    )
    
    
    (13,904
    )
    
    
    (195,516
    )
    
    
    (35,200
    )LOSS BEFORE INCOME TAXES, MINORITY
INTEREST AND LOSSES FROM EQUITY INVESTEES
    
    
    (327,399
    )
    
    
    (56,883
    )
    
    
    (534,550
    )
    
    
    (184,665
    )Income tax provision
    
    
    (1,198
    )
    
    
    (648
    )
    
    
    (3,927
    )
    
    
    (1,875
    )LOSS BEFORE MINORITY INTEREST AND LOSSES
FROM EQUITY INVESTEES
    
    
    (328,597
    )
    
    
    (57,531
    )
    
    
    (538,477
    )
    
    
    (186,540
    )Losses from equity investees, net
    
    
    (1,034
    )
    
    
    (2,042
    )
    
    
    (3,841
    )
    
    
    (5,757
    )Minority interest in net loss (income) of
consolidated
subsidiaries
    
    
    994
    
    
    
    (190
    )
    
    
    2,961
    
    
    
    446NET LOSS
    
    $
    (328,637
    )
    
    $
    (59,763
    )
    
    $
    (539,357
    )
    
    $
    (191,851
    )Net loss per common share, basic and diluted
    
    $
    (2.01
    )
    
    $
    (0.61
    )
    
    $
    (3.44
    )
    
    $
    (2.30
    )Weighted average common shares outstanding,
basic and diluted
    
    
    163,586
    
    
    
    97,854
    
    
    
    156,940
    
    
    
    83,595
 Revenue .
  23




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
  Cost of goods and services .
   Selling, general and administrative expense .
 
  24




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
   Research and development.
 Depreciation and amortization .
  Spectrum lease expense.
 Interest income.
 Interest expense .
  25




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
  Loss on extinguishment of debt .
 Other-than-temporary impairment losses on investments
 Other income (expense), net.
 Losses from equity investees, net.
 Cash Flow Analysis
  Nine Months Ended September 30,2007
    
    
    2006Cash used in operating activities
    
    $
    (398,488
    )
    
    $
    (179,555
    )Cash used in investing activities
    
    
    (87,528
    )
    
    
    (472,297
    )Cash provided by financing activities
    
    
    762,965
    
    
    
    1,504,697Effect of foreign currency exchange rates on cash and cash equivalents
    
    
    (696
    )
    
    
    2,231Net increase in cash and cash equivalents
    
    
    276,253
    
    
    
    855,076Cash and cash equivalents at beginning of period
    
    
    438,030
    
    
    
    29,188Cash and cash equivalents at end of period
    
    $
    714,283
    
    
    $
    884,264
 Operating Activities
  Investing Activities
  26




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
  Financing Activities
  Liquidity and Capital Resource Requirements
  Recent Accounting Pronouncements
 SFAS No. 159  The Fair Value Option for Financial
Assets and Financial Liabilities
 SFAS No. 157 Fair Value Measurements
 27




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
   Foreign Currency Exchange Rates
  Investment Risk
  28




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
 
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
    
    
    In order to address the material weakness identified in 2005 relating to the accounts
payable cutoff, we have identified several areas for improvement. We centralized the
receipt and processing of invoice transactions in the accounts payable department. Our
month end close procedures have been modified to include a review of vendor invoices to
ensure completeness of accounts payable. Additionally, we have established a cross
departmental team to implement improved policies and procedures for the procurement and
payment processes that is also addressing the proper recording of accounts payable and
accrued expenses.
    
    With respect to financial reporting and complex accounting issues, we have increased the
total number of staff within our department as well as the technical capability of that
team. We hired a Chief Accounting Officer during 2007 who has significant experience in
leading an accounting function at a publicly held company and in overseeing the internal
controls over financial reporting. He also has thorough knowledge and experience with
technical accounting and US GAAP reporting requirements. To improve the quality of our
month end close process, we have implemented several policies and procedures that are
required to be followed by the accounting staff to ensure that all transactions are
recorded consistently, are authorized and reviewed by higher level accounting personnel and
include the appropriate level of supporting documentation.
    
    We have also significantly increased management oversight and review of the financial
information and engaged a nationally recognized accounting firm to advise us, as necessary,
with respect to accounting for complex and unusual transactions.
  
    
    In the third quarter, we implemented a software program to automate the accounting for
share based payments and the modifications of stock option grants. Additionally, the
accounting for leases has been automated and procedures have been implemented to ensure we
have properly accounted for all leases as of a month end.
    
    With the information technology department, we continue to enhance our resources and
control environment. Related to information security, we have implemented stronger front
end controls to address authentication and responsibilities within significant
applications. Our technology group and internal compliance team, working
 29




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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
 with our third party providers, has completed an evaluation of access control procedures
such as user access reviews and segregation of duties analysis, within and across
applications.
    
    Additionally, we have completed an annual assessment process which includes fraud risk
and enterprise risk assessments where we have documented risks that are unique to our
business for our domestic and international operations. We are evaluating our existing
controls to mitigate those risks and have examined whether there are gaps or deficiencies
in these controls that require remediation. For the remainder of 2007, we are remediating
those gaps or deficiencies and controls to help reduce the underlying risks.
  30




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 We are an early stage company, we have a history of operating losses and we expect to continue to
realize significant net losses for the foreseeable future.
  
    
    our results of operations may fluctuate significantly, which may adversely affect
the value of an investment in our Class A common stock;
    
    we may be unable to develop and deploy our network, expand our services, meet the
objectives we have established for our business strategy or grow our business
profitably, if at all;
    
    it may be difficult to predict accurately our key operating and performance metrics
because of our limited operating history; and
    
    our network and related technologies may fail or the quality and number of services
we are able to provide may decline if our network operates at maximum capacity for an
extended period of time.
  If we do not obtain additional financing, our business prospects, financial condition and
results of operations will be adversely affected.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
   We have committed to deploy a wireless broadband network using mobile WiMAX technologies under
certain circumstances, even if there are alternative technologies available in the future that
would be technologically superior or more cost effective.
   If third parties fail to develop and deliver the equipment that we need for both our existing
and future networks, we may be unable to execute our business strategy or operate our business.
   32




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CLEARWIRE CORPORATION AND SUBSIDIARIES
  Many of our competitors are better established and have significantly greater resources than
we have, which may make it difficult to attract and retain subscribers.
   
    
    cable operators offering high-speed Internet connectivity services and voice
communications;
    
    incumbent and competitive local exchange carriers providing DSL services over their
existing wide, metropolitan and local area networks;
    
    3G cellular, PCS and other wireless providers offering wireless broadband services
and capabilities, including developments in existing cellular and PCS technology that
may increase network speeds or have other advantages over our services;
    
    Internet service providers offering dial-up Internet connectivity;
    
    municipalities and other entities operating WiFi networks, some of which are free or
subsidized;
    
    providers of VoIP and other telephony services;
    
    wireless Internet service providers using licensed or unlicensed spectrum;
    
    satellite and fixed wireless service providers offering or developing broadband
Internet connectivity and VoIP telephony;
    
    electric utilities and other providers offering or planning to offer broadband
Internet connectivity over power lines; and
    
    resellers providing wireless Internet or other wireless services using
infrastructure developed and operated by others.
  33




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 Our substantial indebtedness and restrictive debt covenants could limit our financing options
and liquidity position and may limit our ability to grow our business.
    
    
    we may not be able to obtain additional financing to fund working capital, operating losses,
capital expenditures or acquisitions on terms acceptable to us or at all;
    
    we may be unable to refinance our indebtedness on terms acceptable to us, or at all;
    
    our substantial indebtedness may make us more vulnerable to economic downturns and limit our
ability to withstand competitive pressures; and
    
    cash flows from operations and investing activities have been negative since inception and
will continue to be so for some time, and our remaining cash, if any, may be insufficient to
operate our business.
  
    
    pay dividends to our stockholders;
    
    incur, or cause certain of our subsidiaries to incur, additional indebtedness;
    
    permit liens on or conduct sales of any assets pledged as collateral;
    
    sell all or substantially all of our assets or consolidate or merge with or into other
companies;
    
    repay existing indebtedness; and
    
    engage in transactions with affiliates.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 We and our independent public accountants have both identified material weaknesses and other
significant deficiencies in our internal control over financial reporting during 2005 and 2006. If
we fail to establish and maintain an effective system of internal control, we may not be able to
report our financial results accurately or to prevent fraud. Any inability to report and file our
financial results in an accurate and timely manner could harm our business and adversely impact the
trading price of our Class A common stock.
      Acquisitions, investments and other strategic transactions could result in operating
difficulties, dilution and distractions from our core business.
  
    
    difficulties in integrating acquired technologies and operations into our business while
maintaining uniform standards, controls, policies and procedures;
    
    obligations imposed on us by counterparties in such transactions that limit our ability to
obtain additional financing, our ability to compete in geographic areas or specific lines of
business, or other aspects of our operational flexibility;
    
    increasing cost and complexity of assuring the implementation and maintenance of adequate
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 internal control and disclosure controls and procedures, and of obtaining the reports and
attestations required under the Securities Exchange Act of 1934;
    
    difficulties in consolidating and preparing our financial statements due to poor accounting
records, weak financial controls and, in some cases, procedures at acquired entities not based
on U.S. GAAP particularly those entities in which we lack control; and
    
    inability to predict or anticipate market developments and capital commitments relating to
the acquired company, business or technology.
   
    
    difficulties, as a result of distance, language, legal or culture differences, in developing,
staffing and managing foreign operations;
    
    lack of control over our equity investees and other business relationships;
    
    currency exchange rate fluctuations;
    
    longer payment cycles;
    
    credit risk and higher levels of payment fraud;
    
    foreign exchange controls that might limit our control over, or prevent us from repatriating,
cash generated outside the United States;
    
    potentially adverse tax consequences;
    
    expropriation or nationalization of assets;
    
    differences in regulatory requirements that may make it difficult to offer all of our
services;
    
    unexpected changes in regulatory requirements;
    
    difficulties in foreign corporate law that have and may create additional administrative
burdens and legal risks;
    
    increased management time and resources to manage overseas operations;
    
    trade barriers and import and export restrictions; and
    
    political or social unrest and economic instability.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 We may experience difficulties in constructing, upgrading and maintaining our network, which
could adversely affect customer satisfaction, increase subscriber churn and reduce our revenues.
    If we do not obtain and maintain rights to use licensed spectrum in one or more markets, we
may be unable to operate in these markets, which could adversely affect our ability to execute our
business strategy.
   
    
    inability to satisfy build-out or service deployment requirements upon which our spectrum
licenses or leases are, or may be, conditioned;
    
    adverse changes to regulations governing our spectrum rights;
    
    inability to use the spectrum we have acquired or leased due to interference from licensed or
unlicensed operators in our band or in adjacent bands;
    
    refusal by the FCC or one or more foreign licensing authorities to recognize our acquisition or
lease of spectrum licenses from others or our investments in other license holders;
    
    inability to offer new services or to expand existing services to take advantage of new
capabilities of our network resulting from advancements in technology due to regulations governing
our spectrum rights;
    
    inability to control leased spectrum due to contractual disputes with, or the bankruptcy or other
reorganization of, the license holders, or third parties;
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 
    
    failure of the FCC or other regulators to renew our spectrum licenses as they expire and our
failure to obtain extensions or renewals of spectrum leases on acceptable terms before they expire;
    
    potentially significant increases in spectrum prices, because of increased competition for the
limited supply of licensed spectrum both in the United States and internationally; and
    
    invalidation of our authorization to use all or a significant portion of our spectrum, resulting
in, among other things, impairment charges related to assets recorded for such spectrum.
  Interruption or failure of our information technology and communications systems could impair
our ability to provide our services, which could damage our reputation and harm our operating
results.
   A number of our significant business arrangements are between us and parties that have an
investment in or a fiduciary duty to our company, and the terms of those arrangements may not be
beneficial to us.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 The industries in which we operate are continually evolving, which makes it difficult to
evaluate our future prospects and increases the risk of your investment. Our products and services
may become obsolete, and we may not be able to develop competitive products or services on a timely
basis or at all.
  
    
    existing service providers may use more traditional and commercially proven means to deliver
similar or alternative services;
    
    new service providers may use more efficient, less expensive technologies, including products not
yet invented or developed;
    
    consumers may not subscribe to our services;
    
    we may not be able to realize economies of scale;
    
    we may be unable to respond successfully to advances in competing technologies in a timely and
cost-effective manner;
    
    we may lack the financial and operational resources necessary to enable migration toward mobile
WiMAX technology and the development and deployment of network components and software that do not
currently exist and that may require substantial upgrades to or replacements of existing
infrastructure; and
    
    existing, proposed or undeveloped technologies may render our existing or planned services less
profitable or obsolete.
  We rely on highly skilled executives and other personnel. If we cannot retain and motivate key
personnel, we may be unable to implement our business strategy.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 Certain aspects of our VoIP telephony services differ from traditional telephone service,
which may limit the attractiveness of our services.
  
    
    our subscribers may experience lower call quality than they experience with traditional wireline
telephone companies, including static, echoes and transmission delays;
    
    our subscribers may experience higher dropped-call rates than they experience with traditional
wireline telephone companies;
    
    a power loss or Internet access interruption may cause our service to be interrupted; and
    
    at this time we do not offer local number portability to our subscribers.
   Our activities outside the United States operate in a competitive environment different than
the environment within the United States. Any difficulties in managing these businesses could
occupy a disproportionate amount of our managements attention and disrupt our operations.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
  We may be unable to protect our intellectual property, which could reduce the value of our
services and our brand.
   We could be subject to claims that we have infringed on the proprietary rights of others,
which claims would likely be costly to defend, could require us to pay damages and could limit our
ability to use necessary technologies in the future.
  If our data security measures are breached, subscribers may perceive our network and services
as not secure.
  Our business depends on a strong brand, and if we do not maintain and enhance our brand, our
ability to attract and retain subscribers may be impaired and our business and operating results
harmed.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
  We are subject to extensive regulation that could limit or restrict our activities and
adversely affect our ability to achieve our business objectives. If we fail to comply with these
regulations, we may be subject to penalties, including fines and suspensions, which may adversely
affect our financial condition and results of operations.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 We are a controlled company within the meaning of the Nasdaq Marketplace Rules and, as a
result, rely on, exemptions from certain corporate governance requirements.
   Mr. McCaw and Intel Capital are our largest stockholders, and as a result they can exert
control over us and may have actual or potential interests that may diverge from yours.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
  Since our initial public offering in March 2007, the market price of our common stock has been
and may continue to be volatile.
  
    
    quarterly variations in our results of operations or those of our competitors, either alone or in
comparison to analysts expectations;
    
    announcements by us or our competitors of acquisitions, new products, significant contracts,
commercial relationships or capital commitments;
    
    announcements by us regarding the entering into, or
termination of, material transactions;
    
    disruption to our operations or those of other companies critical to our network operations;
    
    the emergence of new competitors or new technologies;
    
    our ability to develop and market new and enhanced products on a timely basis;
    
    seasonal or other variations in our subscriber base;
    
    commencement of, or our involvement in, litigation;
    
    availability of additional spectrum;
    
    dilutive issuances of our stock or the stock of our subsidiaries, or the incurrence of additional
debt including upon the exercise of outstanding warrants and options;
    
    changes in our board or management;
    
    adoption of new or different accounting standards;
    
    changes in governmental regulations or the status of our regulatory approvals;
    
    changes in earnings estimates or recommendations by securities analysts;
    
    announcements regarding mobile WiMAX and other technical standards; and
    
    general economic conditions and slow or negative growth of related markets.
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CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 Item 6. Exhibits
 EXHIBIT INDEX
 3.1
    
    Fourth Amended and Restated Certificate of Incorporation of Clearwire Corporation.*3.2
    
    Amended and Restated Bylaws.*4.1
    
    Form of stock certificate for Class A common stock.*4.2
    
    Amended and Restated Stockholders Agreement dated March 16, 2004 among Clearwire Corporation and the
parties thereto.*4.3
    
    Registration Rights Agreement dated November 13, 2003 among Flux U.S. Corporation, Clearwire Holdings,
Inc. and Hispanic Information and Telecommunications Network, Inc.*4.4
    
    Registration Rights Agreement dated March 16, 2004 among Clearwire Corporation and the parties thereto.*4.5
    
    Registration Rights Agreement dated August 5, 2005 among Clearwire Corporation and certain buyers of
the Senior Secured Notes.*4.6
    
    Investor Rights Agreement dated August 29, 2006 among Clearwire Corporation, Intel Pacific, Inc. and
Motorola, Inc.*4.7
    
    Securities Purchase Agreement dated August 5, 2005 among Clearwire Corporation and the buyers of the
Senior Secured Notes, as amended February 16, 2006.*4.8
    
    Indenture dated August 5, 2005 among Clearwire Corporation, Clearwire LLC, Fixed Wireless Holdings,
LLC, NextNet Wireless, Inc. and The Bank of New York, as Trustee, as supplemented February 16, 2006.**4.10
    
    Form of Warrant.*10.1
    
    Form of Stock Option Agreement10.2
    
    Form of Restricted Stock Unit Award Agreement31.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(a) and Section 302
of the Sarbanes Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(a) and Section 302
of the Sarbanes Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906
of the Sarbanes Oxley Act of 2002, 18 U.S.C. Section 1350.32.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906
of the Sarbanes Oxley Act of 2002, 18 U.S.C. Section 1350.
 
 *
    
    Incorporated by Reference to Clearwires Registration Statement on Form S-1 (Registration No. 333-139468), as
amended.**
    
    Incorporated by reference to Clearwires Registration Statement on Form S-1 (Registration No. 333-144357) as amended. 45




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CLEARWIRE CORPORATION AND SUBSIDIARIES
 
 SIGNATURES
  CLEARWIRE CORPORATIONDate: November 14, 2007
    /s/ JOHN A. BUTLERJohn A. ButlerChief Financial Officer 46