10-Q

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

For the quarterly period ended: March 31, 2009

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 001-34196

CLEARWIRE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	56-2408571
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
4400 Carillon Point
Kirkland, Washington	98033
(Address of principal executive office)	(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 o      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 o	Accelerated filer o	Non-accelerated filer þ	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 May 7, 2009 was 195,023,492. The number of shares outstanding of the registrant’s Class B common stock as of May 7, 2009 was 528,823,529.

CLEARWIRE CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2009
Table of Contents

	Page
Part I. Financial Information		2
Item 1. Financial Statements (unaudited)		2
Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008		2
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2009 and March 31, 2008		3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and March 31, 2008		4
Condensed Consolidated Statement of Stockholders’ Equity and Comprehensive Loss for the Three Months Ended March 31, 2009		5
Notes to Condensed Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
Item 3. Quantitative and Qualitative Disclosures About Market Risk		38
Item 4T. Controls and Procedures		39
Part II. Other Information		40
Item 1. Legal Proceedings		40
Item 1A. Risk Factors		41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		41
Item 4. Submissions of Matters to a Vote of Security Holders		41
Item 5. Other Information		41
Item 6. Exhibits		41
Signature		43
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-99.1

1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

CLEARWIRE CORPORATION AND SUBSIDIARIES

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

	March 31,			December 31,
	2009			2008
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	171,383		$	1,206,143
Short-term investments (Note 4)		2,664,456			1,901,749
Restricted cash		1,093			1,159
Accounts receivable, net of allowance of $910 and $913		3,922			4,166
Notes receivable		4,617			4,837
Inventory		4,863			3,174
Prepaids and other assets		45,562			44,644
Total current assets		2,895,896			3,165,872
Property, plant and equipment, net (Note 5)		1,381,490			1,319,945
Restricted cash		4,727			8,381
Long-term investments (Note 4)		17,494			18,974
Spectrum licenses (Note 6)		4,471,259			4,471,862
Other intangible assets, net (Note 7)		115,464			122,808
Investments in equity investees		10,513			10,956
Other assets		18,713			5,369
TOTAL ASSETS	$	8,915,556		$	9,124,167
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and other current liabilities (Note 8)	$	152,939		$	145,417
Deferred revenue		11,940			11,761
Current portion of long-term debt (Note 10)		14,292			14,292
Total current liabilities		179,171			171,470
Long-term debt (Note 10)		1,366,039			1,350,498
Deferred tax liabilities (Note 9)		3,588			4,164
Other long-term liabilities		118,238			95,225
Total liabilities		1,667,036			1,621,357
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS’ EQUITY:
Clearwire Corporation stockholders’ equity:
Class A Common Stock, par value $0.0001, 1,300,000,000 shares authorized; 195,008,215 and 190,001,706 shares issued and outstanding, respectively		20			19
Class B Common Stock, par value $0.0001, 750,000,000 shares authorized; 528,823,529 and 505,000,000 shares issued and outstanding, respectively		53			51
Additional paid-in capital		2,070,665			2,092,861
Accumulated other comprehensive income		748			3,194
Accumulated deficit		(100,988	)		(29,933	)
Total Clearwire Corporation stockholders’ equity		1,970,498			2,066,192
Non-controlling interests		5,278,022			5,436,618
Total stockholders’ equity		7,248,520			7,502,810
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,915,556		$	9,124,167

See accompanying notes to Unaudited Condensed Consolidated Financial Statements

2

CLEARWIRE CORPORATION AND SUBSIDIARIES

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

	Three Months Ended
	March 31,
	2009			2008
REVENUE	$	62,137		$	—
OPERATING EXPENSES:
Cost of goods and services and network costs (exclusive of items shown separately below)		73,633			26,861
Selling, general and administrative expense		108,465			40,255
Depreciation and amortization (Notes 5, 6 and 7)		48,548			6,770
Spectrum lease expense (Notes 6 and 13)		64,440			21,215
Total operating expenses		295,086			95,101
OPERATING LOSS		(232,949	)		(95,101	)
OTHER INCOME (EXPENSE):
Interest income		3,277			285
Interest expense (Note 10)		(27,598	)		—
Foreign currency loss, net		(421	)		—
Other-than-temporary impairment loss and realized loss on investments (Note 4)		(1,480	)		—
Gain (loss) on undesignated interest rate swap contracts, net (Note 11)		1,050			—
Other income (expense), net		(2,457	)		1,546
Total other income (expense), net		(27,629	)		1,831
LOSS BEFORE INCOME TAXES		(260,578	)		(93,270	)
Income tax provision		86			(4,167	)
NET LOSS		(260,492	)		(97,437	)
Less: non-controlling interests in net loss of consolidated subsidiaries		189,437			—
NET LOSS ATTRIBUTABLE TO CLEARWIRE CORPORATION	$	(71,055	)	$	(97,437	)
Net loss per Class A Common Share (Note 15):
Basic	$	(0.37	)
Diluted	$	(0.38	)
Weighted average Class A Common Shares outstanding:
Basic		191,887
Diluted		705,887

See accompanying notes to Unaudited Condensed Consolidated Financial Statements

3

CLEARWIRE CORPORATION AND SUBSIDIARIES

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

	Three Months Ended
	March 31,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(260,492	)	$	(97,437	)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred income taxes		(86	)		4,167
Losses from equity investees, net		397			—
Loss on asset disposals		2,270			—
Non-cash fair value adjustment on swaps		(3,090	)		—
Realized loss on investments		1,480			—
Non-cash interest expense		19,114			—
Depreciation and amortization		48,548			6,770
Amortization of favorable spectrum leases, spectrum rent and lease service		21,675			3,134
Non-cash tower and building rent		12,827			—
Share-based compensation		5,940			—
Equipment and inventory disposals		2,477			—
Provision for uncollectable accounts		1,834			—
Changes in assets and liabilities:
Inventory		115			—
Accounts receivable		(1,692	)		—
Prepaids and other assets		(6,462	)		1,101
Prepaid spectrum licenses		(15,890	)		—
Accrued interest		(1,587	)		—
Accounts payable and other liabilities		11,989			—
Net cash used in operating activities		(160,633	)		(82,265	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(114,530	)		(258,639	)
Payments for spectrum licenses and other intangible assets		(4,597	)		(84,290	)
Purchases of available-for-sale investments		(966,772	)		—
Sales of available-for-sale investments		200,000			—
Proceeds from asset sales		2,000			—
Net decrease to restricted cash		3,720			—
Net cash used in investing activities		(880,179	)		(342,929	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net advances from Sprint Nextel Corporation		—			425,194
Proceeds from issuance of common stock		10,016			—
Principal payments on long-term debt		(3,573	)		—
Net cash provided by financing activities		6,443			425,194
Effect of foreign currency exchange rates on cash and cash equivalents		(391	)		—
Net decrease in cash and cash equivalents		(1,034,760	)		—
CASH AND CASH EQUIVALENTS:
Beginning of period		1,206,143			—
End of period	$	171,383		$	—
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for spectrum lease expense	$	(42,765	)	$	—
Interest paid		(10,071	)		—
Swap interest paid		(2,040	)		—
Interest received		3,277			—
NON-CASH INVESTING AND FINANCING ACTIVITIES
Fixed asset purchases in accounts payable		2,795			—
Fixed asset purchases included in advances and contributions from Sprint Nextel Corporation		—			(39,127	)

See accompanying notes to Unaudited Condensed Consolidated Financial Statements

4

CLEARWIRE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE LOSS
(In thousands)
(Unaudited)

												Accumulated
	Class A				Class B							Other									Total
	Common Stock				Common Stock				Additional Paid			Comprehensive			Accumulated			Non-controlling			Stockholders’
	Shares		Amount		Shares		Amount		In Capital			Income			Deficit			Interests			Equity
Balances at January 1, 2009		190,002	$	19		505,000	$	51	$	2,092,861		$	3,194		$	(29,933	)	$	5,436,618		$	7,502,810
Net loss		—		—		—		—		—			—			(71,055	)		(189,437	)		(260,492	)
Foreign currency translation adjustment		—		—		—		—		—			(2,103	)		—			(5,492	)		(7,595	)
Unrealized loss on investments		—		—		—		—		—			(343	)		—			(907	)		(1,250	)
Comprehensive loss																						(269,337	)
Class A shares issued		5,000		1		—		—		9,999			—			—			—			10,000
Issuance of Clearwire LLC Class A and Class B Common Interests		—		—		23,824		—		(33,632	)		—			—			33,632			—
Share-based compensation and other capital transactions		6		—		—		2		1,437			—			—			3,608			5,047
Balances at March 31, 2009		195,008	$	20		528,824	$	53	$	2,070,665		$	748		$	(100,988	)	$	5,278,022		$	7,248,520

See accompanying notes to Unaudited Condensed Consolidated Financial Statements

5

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Description of Business and Basis of Presentation

     The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in our December 31, 2008 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 quarter ended March 31, 2009 do not necessarily indicate the results that may be expected for the full year.

     We started operations on January 1, 2007 as a developmental stage company representing a collection of assets, related liabilities and activities accounted for in various legal entities that were wholly-owned subsidiaries of Sprint Nextel Corporation, which we refer to as Sprint or the Parent. From January 1, 2007 through November 28, 2008, we conducted our business as the WiMAX Operations of Sprint, which we refer to as the Sprint WiMAX Business, with the objective of developing a next generation wireless broadband network.

     On November 28, 2008, which we refer to as the Closing, the legacy Clearwire Corporation, which we refer to as Old Clearwire, and the Sprint WiMAX Business combined their next generation wireless broadband businesses to form a new independent company called Clearwire Corporation, which we refer to as Clearwire. Prior to closing, the activities and certain assets of the Sprint WiMAX Business were transferred to a single legal entity that was contributed to Clearwire Communications at the Closing in exchange for an equity interest in Clearwire and Clearwire Communications. In addition, five independent partners, including Intel Corporation through Intel Capital, Google Inc., Comcast Corporation, Time Warner Cable Inc. and Bright House Networks LLC, collectively, whom we refer to as the Investors, agreed to invest $3.2 billion in Clearwire and its subsidiary Clearwire Communications LLC, which we refer to as Clearwire Communications. The transactions described above are collectively referred to as the Transactions. After the Transactions, we owned 100% of the voting interests and 27% of the economic interests in Clearwire Communications, which we consolidate as a controlled subsidiary. Clearwire holds no assets other than its equity interests in Clearwire Communications.

     The condensed consolidated financial statements of Clearwire and subsidiaries include the results of the Sprint WiMAX Business from January 1, 2008 through March 31, 2008 and the results of the combined entities for the three months from January 1, 2009 through March 31, 2009. For financial reporting purposes, the Sprint WiMAX Business was determined to be the accounting acquirer and accounting predecessor.

     The accounts and financial statements of Clearwire for the three months from January 1, 2008 through March 31, 2008 have been prepared from the separate records maintained by Sprint. Further, such accounts and financial statements include allocations of expenses from Sprint and therefore may not necessarily be indicative of the financial position, results of operations and cash flows that would have resulted had we functioned as a separate stand-alone operation. Sprint directly assigned, where possible, certain costs to us based on our actual use of the shared services. These costs include network related expenses, office facilities, treasury services, human resources, supply chain management and other shared services. Where direct assignment of costs was not possible or practical, Sprint used indirect methods, including time studies, to estimate the assignment of its costs to us, which were allocated to us through a management fee. Cash management was performed on a consolidated basis, and Sprint processed payables, payroll and other transactions on our behalf. Assets and liabilities which were not specifically identifiable to us included:

• Cash, cash equivalents and investments, with activity in our cash balances being recorded through business equity;

• Accounts payable, which were processed centrally by Sprint and were passed to us through intercompany accounts that were included in business equity; and

• Certain accrued liabilities, which were passed through to us through intercompany accounts that were included in business equity.

     Our statement of cash flows for the three months from January 1, 2008 through March 31, 2008 presents the activities that were paid by Sprint on our behalf. Financing activities include funding advances from Sprint, presented as business equity, since Sprint managed our financing activities on a centralized basis. Further, the net cash used in operating activities and the net cash used in investing activities for capital expenditures and acquisitions of FCC licenses and patents represent transfers of expenses or assets paid

6

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

for by other Sprint subsidiaries. No cash payments were made by us for income taxes or interest for the three months from January 1, 2008 through March 31, 2008.

     We build and operate next generation wireless broadband networks that provide entire communities with high-speed residential and mobile Internet access services and residential voice services. Our wireless broadband networks not only create a new communications path into the home or office, but also provide a broadband connection anytime and anywhere within our coverage area. We are deploying the first nationwide mobile Worldwide Interoperability of Microwave Access, which we refer to as WiMAX, network to provide a true mobile broadband experience for consumers, small businesses, medium and large enterprises, public safety organizations and educational institutions. The deployment of our the mobile WiMAX technology is based on the IEEE 802.16e-2005 standard using 2.5 GHz Federal Communications Commission spectrum.

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 US 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 quarter ended March 31, 2009:

     Business Combinations — We adopted Statement of Financial Accounting Standards, which we refer to as SFAS, No. 141(revised 2007), Business Combinations, which we refer to as SFAS No. 141(R), on January 1, 2009 and will apply this standard for all future business combinations. We account for acquisitions occurring before January 1, 2009 using the purchase method in accordance with SFAS No. 141, Business Combinations, which we refer to as SFAS No. 141. The Closing of the Transactions at November 28, 2008 was accounted for using SFAS No. 141. SFAS No. 141 requires that the total purchase price be allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date. Our allocation of the purchase price to specific assets and liabilities is based upon valuation procedures and techniques using income, cost and market approaches. Purchase transactions are subject to purchase price allocation adjustments due to contingency resolution for up to one year after close.

     Fair Value Measurements — On January 1, 2009, we adopted SFAS No. 157, Fair Value Measurements, which we refer to as SFAS No. 157, for our nonfinancial assets and nonfinancial liabilities, except those items recognized or disclosed at fair value on an annual or more frequently recurring basis. We had previously adopted SFAS No 157 for our financial assets and liabilities that are recognized or disclosed at fair value on an annual or more frequently recurring basis, including our derivative financial instruments and our short-term and long-term investments. The adoption of SFAS No. 157 for our nonfinancial assets and nonfinancial liabilities, except those items recognized or disclosed at fair value on an annual or more frequently recurring basis, did not have a significant effect on our condensed consolidated financial statements.

     See Note 12, Fair Value Measurements, for information regarding our use of fair value measurements and our adoption of the provisions of SFAS No. 157 on January 1, 2009 for our nonfinancial assets and nonfinancial liabilities.

     Non-Controlling Interests — In December 2007, the Financial Accounting Standards Board, which we refer to as FASB, issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin No. 51, Consolidated Financial Statements, which we refer to as SFAS No. 160. The statement requires that non-controlling interests, previously reported as minority interests, be reported as a separate component of stockholders’ equity, a change that affects our financial statement presentation of minority interests in our consolidated subsidiaries. SFAS No. 160 specifies that consolidated net income attributable to the parent and to the non-controlling interests be clearly identified and presented separately on the face of the consolidated statements of operations. The statement also establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary and specifies that these transactions be recorded as equity transactions as long as the ownership change does not result in deconsolidation. This standard also expands disclosures in the financial statements to include a reconciliation of the beginning and ending balances of the equity attributable to the parent and the non-controlling owners and a schedule showing the effects of changes in a parent’s ownership interest in a subsidiary on the equity attributable to the parent. We adopted SFAS No. 160 on January 1, 2009. SFAS No. 160 is applied prospectively in 2009, except for the presentation and disclosure requirements which are applied retrospectively. The prospective accounting requirements are dependent on future transactions involving non-controlling interests.

7

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     Derivative Instruments and Hedging Activities — On January 1, 2009, we adopted the provisions of SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133, which we refer to as SFAS No. 161. SFAS No. 161 amended the disclosure requirements for derivative financial instruments and hedging activities. Expanded qualitative disclosures required under SFAS No. 161 include how and why an entity uses derivative financial instruments; how derivative financial instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and related interpretations; and how derivative financial instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 also requires several added quantitative disclosures in the financial statements. See Note 12, Fair Value Measurements, for further information. As SFAS No. 161 amended only the disclosure requirements for derivative financial instruments and hedged items, the adoption did not have a significant effect on our consolidated financial statements.

Recent Accounting Pronouncements

     In January 2009, the FASB released Staff Position SFAS No. 107-1 and Accounting Principles Board, which we refer to as APB, Opinion No. 28-1, Interim Disclosures about Fair Value of Financial Instruments, which we refer to as FSP No. 107-1 and APB 28-1. FSP No. 107-1 amends FASB Statement No. 107, Disclosures about Fair Values of Financial Instruments, to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. APB 28-1 amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in all interim financial statements. FSP No. 107-1 and APB 28-1 are effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. We plan to adopt FSP No. 107-1 and APB 28-1 and provide the additional disclosure requirements for second quarter 2009.

     In March 2009, the FASB released Staff Position SFAS No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, which we refer to as FSP No. 157-4. FSP No. 157-4 provides additional guidance in determining whether a market for a financial asset is not active and a transaction is not distressed for fair value measurement purposes as defined in FSP No. 157. FSP No. 157-4 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. We plan to adopt the provisions of FSP No. 157-4 during second quarter 2009, but do not believe this guidance will have a significant impact on our financial position, cash flows, or disclosures.

     In March 2009, the FASB issued Staff Position SFAS No. 115-2 and SFAS No. 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, which we refer to as FSP No. 115-2 and FSP No. 124-2. FSP No. 115-2 and FSP No. 124-2 provides guidance in determining whether impairments in debt securities are other than temporary, and modifies the presentation and disclosures surrounding such instruments. FSP No. 115-2 and FSP No. 124-2 are effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. We plan to adopt the provisions of FSP No. 115-2 and FSP No. 124-2 during second quarter 2009, but do not believe this guidance will have a significant impact on our financial position, cash flows, or disclosures.

3. Strategic Transactions

     On November 28, 2008, Old Clearwire and the Sprint WiMAX Business combined to form a new independent company, Clearwire. The Investors contributed a total of $3.2 billion of new equity to Clearwire and Clearwire Communications. In exchange for the contribution of the Sprint WiMAX Business and the $3.2 billion, Sprint and the Investors received an aggregate of 530 million shares of Clearwire’s Class A Common Stock, par value $0.0001 per share, which we refer to as Clearwire Class A Common Stock, and Clearwire’s Class B Common Stock, par value $0.0001 per share, which we refer to as Clearwire Class B Common Stock, and Clearwire Communications Class B non-voting common interest, which we refer to as Clearwire Communications Class B Common Interests, at an initial share price of $20 per share.

     The number of shares issued to the Investors was subject to a post-closing adjustment based on the trading prices of the Clearwire Class A Common Stock on NASDAQ Global Select Market over 15 randomly-selected trading days during the 30-day period ending on the 90th day after the Closing, which we refer to as the Adjustment Date, with a floor of $17.00 per share and a cap of $23.00 per share. The adjustment resulted in an additional 28,235,294 shares being issued to the Investors on February 26, 2009. The adjustment did not affect the purchase consideration, however it did result in an equity reallocation of $33.6 million to the non-controlling interests. On February 27, 2009, CW Investment Holdings LLC, an affiliate of John Stanton, a director of Clearwire contributed $10.0 million in cash in exchange for 588,235 shares of Clearwire Class A Common Stock. Concurrent with the Closing, we entered into

8

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

commercial agreements with each of the Investors, which establish the framework for development of the combined WiMAX businesses.

     Upon completion of the Transactions and the post-closing adjustment, Sprint owned the largest interest in Clearwire with an effective voting and economic interest in Clearwire and its subsidiaries of approximately 51%, based on a purchase price of $17.00 per share. The combination was accounted for as a purchase in accordance with the provisions of SFAS No. 141 and as a reverse acquisition with the Sprint WiMAX Business considered the accounting acquirer. As a result, the historical financial statements of the Sprint WiMAX Business became the financial statements of Clearwire upon the Closing.

     Sprint and the Investors, other than Google, own shares of Clearwire Class B Common Stock, which have equal voting rights to Clearwire Class A Common Stock, but have only limited economic rights. Unlike the holders of Clearwire Class A Common Stock, the holders of Clearwire Class B Common Stock have no right to dividends and no right to any proceeds on liquidation other than the par value of the Clearwire Class B Common Stock. Sprint and the Investors, other than Google, hold their economic rights through ownership of Clearwire Communications Class B Common Interests. Google owns shares of Clearwire Class A Common Stock.

     The following table lists the interests in Clearwire based on the Investors’ purchase price of $17.00 per share, on February 27, 2009:

Investor	Class A Stock		Class B Stock(2)		% Outstanding
Sprint HoldCo LLC				370,000,000		51.12	%
Comcast Corporation				61,764,705		8.53	%
Time Warner Cable Inc.				32,352,941		4.47	%
Bright House Networks, LLC				5,882,353		0.81	%
Intel Corporation				58,823,530		8.13	%
Google		29,411,765				4.06	%
Shareholders of Old Clearwire(1)		165,001,706				22.80	%
CW Investment Holdings LLC		588,235				0.08	%
		195,001,706		528,823,529		100.00	%

(1)	Includes shares of Clearwire Class A Common Stock issued to Intel Corporation on account of its shares of Old Clearwire Class A Common Stock exchanged in the merger.
(2)	The Investors hold an equivalent number of Clearwire Communications Class B Common Interests

Purchase Price Allocation

     As a result of the Transactions, we acquired Old Clearwire’s net assets. Purchase consideration was based on the fair value of the Old Clearwire Class A Common Stock as of the Closing, which had a closing price of $6.62 on November 28, 2008. The total purchase consideration of approximately $1.12 billion was allocated to the respective assets and liabilities based upon their estimated fair values on the date of the acquisition. At the date of acquisition, the estimated fair value of the net assets acquired exceeded the purchase price; therefore, no goodwill is reflected in the purchase price allocation. In accordance with SFAS No. 141, the excess of estimated fair value of net assets acquired over the purchase price was allocated to eligible non-current assets, specifically property, plant and equipment, other non-current assets and intangible assets, based upon their relative fair values.

     The following table sets forth a preliminary allocation of the purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of Old Clearwire, including the allocation of the excess of the estimated fair value of net assets acquired over the purchase price (in thousands):

Working capital	$	128,532
Property, plant and equipment		404,903
Other non-current assets		106,598
Spectrum licenses		1,631,323
Intangible assets		122,888
Term debt		(1,187,500	)
Deferred tax liability		(3,727	)
Other non-current liabilities and non-controlling interests		(85,258	)
Total purchase price	$	1,117,759

9

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     The following table illustrates the amounts assigned and estimated remaining useful lives for each class of property, plant and equipment (in thousands):

	Value at		Estimated Remaining
	November 28, 2008		Useful Life
			(years)
Network and base station equipment	$	122,282	5
Customer premise equipment		19,886	1 to 2
Furniture, fixtures and equipment		29,543	2
Leasehold improvements		7,324	The lessor of the leasehold agreement or 5
Construction in progress		225,868	N/A
	$	404,903
The following table illustrates the amounts assigned and estimated weighted average remaining useful lives for owned and leased spectrum licenses (in thousands):
	Value at		Weighted Average
	November 28, 2008		Remaining Useful Life
			(years)
Indefinite-lived owned spectrum	$	481,105	Indefinite
Definite-lived owned spectrum		106,178	18
Spectrum leases		1,044,040	27
	$	1,631,323
The following table illustrates the amounts assigned and estimated weighted average remaining useful lives for each class of intangible assets (in thousands):
	Value at		Weighted Average
	November 28, 2008		Remaining Useful Life
			(years)
Subscriber relationships	$	119,084	7
Trade names and trademarks		3,804	5
	$	122,888

     As the Transactions closed on November 28, 2008, the allocation of purchase consideration is preliminary and based on valuations derived from estimated fair value assessments and assumptions. The final purchase price allocation is pending the finalization of appraisal valuations of certain tangible and intangible assets acquired. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different values assigned to individual assets acquired and liabilities assumed, and the resulting amount of the excess of fair value of net assets acquired over the purchase price.

4. Investments

     Investments as of March 31, 2009 and December 31, 2008 consisted of the following (in thousands):

	March 31, 2009									December 31, 2008
	Gross Unrealized									Gross Unrealized
	Cost		Gains		Losses			Fair Value		Cost		Gains		Losses		Fair Value
Short-term
U.S. Government and Agency Issues	$	2,663,486	$	1,013	$	(43	)	$	2,664,456	$	1,899,529	$	2,220	$	—	$	1,901,749
Long-term
Auction rate securities		17,494		—		—			17,494		18,974		—		—		18,974
Total Investments	$	2,680,980	$	1,013	$	(43	)	$	2,681,950	$	1,918,503	$	2,220	$	—	$	1,920,723

     For the three months ended March 31, 2009 and 2008, we recorded an other-than-temporary impairment loss of $1.5 million and $0, respectively, related to our auction rate securities.

10

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

5. Property, Plant and Equipment

     Property, plant and equipment as of March 31, 2009 consisted of the following (in thousands):

				Customer			Furniture,
	Network			Premise			Fixtures and			Leasehold			Construction in
	Equipment			Equipment			Equipment			Improvements			Progress			Total
Gross Cost
Opening balance as of December 31, 2008	$	353,752		$	23,141		$	167,325		$	12,786		$	823,193		$	1,380,197
Additions		68			213			1,181			14			110,259			111,735
Disposals		(1,656	)		(964	)		(22	)		—			(2,252	)		(4,894	)
Transfers		45,168			5,973			24,341			503			(75,985	)		—
Currency translation adjustments and other		(3,794	)		(1,247	)		(772	)		(66	)		(2,788	)		(8,667	)
Closing balance as of March 31, 2009	$	393,538		$	27,116		$	192,053		$	13,237		$	852,427		$	1,478,371
Accumulated Depreciation
Opening balance as of December 31, 2008	$	(25,781	)	$	(3,393	)	$	(30,135	)	$	(943	)	$	—		$	(60,252	)
Depreciation		(15,831	)		(5,143	)		(17,776	)		(701	)		—			(39,451	)
Disposals		45			99			10			—			—			154
Currency translation adjustments and other		1,118			1,083			514			(47	)		—			2,668
Closing balance as of March 31, 2009	$	(40,449	)	$	(7,354	)	$	(47,387	)	$	(1,691	)	$	—		$	(96,881	)

				Customer			Furniture,
	Network			Premise			Fixtures and			Leasehold			Construction in
	Equipment			Equipment			Equipment			Improvements			Progress		Total
As of March 31, 2009
Cost	$	393,538		$	27,116		$	192,053		$	13,237		$	852,427	$	1,478,371
Accumulated depreciation		(40,449	)		(7,354	)		(47,387	)		(1,691	)		—		(96,881	)
Net property, plant and equipment as of March 31, 2009	$	353,089		$	19,762		$	144,666		$	11,546		$	852,427	$	1,381,490

	Three Months Ended
	March 31,
	2009		2008
Additions	$	111,735	$	297,766
Change in capital expenditures payable		2,795		(39,127	)
Cash used for purchase of property, plant and equipment	$	114,530	$	258,639
Interest capitalized included in additions	$	23,012	$	—
Depreciation and amortization expense	$	39,451	$	6,735

11

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

6. Spectrum Licenses

     Owned and leased spectrum licenses as of March 31, 2009 consisted of the following (in thousands):

				Definite-lived			Prepaid			Pending
	Indefinite-lived			Owned			Spectrum			Spectrum and			Total Spectrum
	Owned Spectrum			Spectrum			Licenses			Transition Costs			Licenses
Gross cost
Opening balance as of December 31, 2008	$	3,035,473		$	112,303		$	1,270,058		$	60,041		$	4,477,875
Additions		4,592			—			15,890			—			20,482
Disposals		—			—			—			—			—
Transfers		3,328			—			9,224			(12,552	)		—
Currency translation adjustments and other		(544	)		(5,228	)		—			—			(5,772	)
Closing balance as of March 31, 2009	$	3,042,849		$	107,075		$	1,295,172		$	47,489		$	4,492,585
Accumulated Depreciation
Opening balance as of December 31, 2008	$	—		$	(974	)	$	(5,039	)	$	—		$	(6,013	)
Amortization		—			(1,017	)		(14,713	)		—			(15,730	)
Currency translation adjustments and other		—			417			—			—			417
Closing balance as of March 31, 2009	$	—		$	(1,574	)	$	(19,752	)	$	—		$	(21,326	)

			Definite-lived			Prepaid			Pending
	Indefinite-lived		Owned			Spectrum			Spectrum and		Total Spectrum
	Owned Spectrum		Spectrum			Licenses			Transition Costs		Licenses
As of March 31, 2009
Cost	$	3,042,849	$	107,075		$	1,295,172		$	47,489	$	4,492,585
Accumulated amortization		—		(1,574	)		(19,752	)		—		(21,326	)
Spectrum licenses, net as of March 31, 2009	$	3,042,849	$	105,501		$	1,275,420		$	47,489	$	4,471,259

	Three Months Ended
	March 31,
	2009		2008
	(in thousands)
Cash paid for owned spectrum licenses	$	4,592	$	84,000
Prepayments for leased spectrum	$	15,890		—
Amortization of prepaid spectrum licenses	$	14,713	$	3,134
Amortization of definite-lived owned spectrum	$	1,017		—

7. Other Intangible Assets

     Other intangible assets as of March 31, 2009 consisted of the following (in thousands):

				Trade Names
	Subscriber			and			Patents and			Total Other
	Relationships			Trademarks			Other			Intangibles
Gross cost
Opening balance as of December 31, 2008	$	118,787		$	3,804		$	3,148		$	125,739
Additions		—			—			5			5
Disposals		—			—			—			—
Currency translation adjustments and other		731			—			—			731
Closing balance as of March 31, 2009	$	119,518		$	3,804		$	3,153		$	126,475
Accumulated Depreciation
Opening balance as of December 31, 2008	$	(2,606	)	$	(63	)	$	(262	)	$	(2,931	)
Amortization		(7,811	)		(190	)		(79	)		(8,080	)
Closing balance as of March 31, 2009	$	(10,417	)	$	(253	)	$	(341	)	$	(11,011	)
As of March 31, 2009
Cost	$	119,518		$	3,804		$	3,153			126,475
Accumulated amortization		(10,417	)		(253	)		(341	)		(11,011	)
Other intangibles, net as of March 31, 2009	$	109,101		$	3,551		$	2,812		$	115,464

12

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

	Three Months Ended
	March 31,
	2009		2008
	(in thousands)
Cash	$	5	$	290
Amortization expense	$	8,080	$	35

8. Accounts Payable and Other Current Liabilities

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

	March 31,		December 31,
	2009		2008
Accounts payable	$	75,446	$	78,695
Accrued interest		7,366		8,953
Salaries and benefits		28,184		26,337
Business and income taxes payable		7,757		7,264
Accrued professional fees		5,076		5,286
Interest rate swap contract		6,547		—
Other		22,563		18,882
	$	152,939	$	145,417

9. Income Taxes

     Prior to the Transactions, the Sprint WiMAX Business incurred significant deferred tax liabilities related to the indefinite-lived spectrum licenses. Since certain of these spectrum licenses acquired were recorded as indefinite-lived intangible assets for book purposes, they are not subject to amortization and therefore we could not estimate the amount of future period reversals, if any, of the deferred tax liabilities related to those spectrum licenses. As a result, an increase in the deferred tax liability is not offset by a commensurate decrease of the valuation allowance. As we continued to amortize acquired spectrum licenses for federal income tax purposes the difference arising between book and tax basis resulted in a deferred income tax provision prior to the Closing of the Transactions.

     After the Transactions, Clearwire holds no assets other than its equity interests in Clearwire Communications. Clearwire Communications is treated as a partnership for U.S. federal income tax purposes and therefore does not pay income tax in the U.S. and 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 after the Closing is the basis difference associated with our investment in the partnership. 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 not deemed realizable. The small tax benefit recorded in the first quarter 2009 is associated with the non-U.S. operations.

10. Long-term debt

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

	March 31,			December 31,
	2009			2008
Senior Term Loan Facility, due in 2011, 1% of principal due annually; residual at maturity	$	1,380,331		$	1,364,790
Less: current portion		(14,292	)		(14,292	)
Total long-term debt	$	1,366,039		$	1,350,498

13

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     Senior Term Loan Facility — In conjunction with the Transactions, we assumed from Old Clearwire the Senior Term Loan Facility, which had a balance as of the Closing of $1.19 billion, net of discount. Concurrent with the assumption of the Senior Term Loan Facility, we made a payment of $50.0 million for certain financing fees which represented an obligation of Old Clearwire. Further, based on our assessment of the fair value of the Senior Term Loan Facility at the date of the Transactions, we recorded a $50.0 million discount against the principal balance. The Senior Term Loan Facility retains the terms and conditions as set forth in the Amended Credit Agreement. In addition, on December 1, 2008, we elected to add the Sprint Tranche to the Senior Term Loan Facility under the Amended Credit Agreement in the amount of $179.2 million for the reimbursement of the remaining obligation of the Sprint Pre-Closing Financing Amount. The Senior Term Loan Facility requires quarterly payments in the amount of 1.00% of the original principal amount per year, with the remaining balance due on May 28, 2011.

     The rate of interest for borrowings under the Senior Term Loan Facility is the LIBOR base rate plus a margin of 6.00%, with a base rate being no lower than 2.75% per annum, or the alternate base rate, which is equal to the greater of (a) the Prime Rate or (b) the Federal Funds Effective rate plus ¹/2 of 1.00%, plus a margin of 5.00%, with the alternate base rate being no lower than 4.75% per annum. These margin rates increase by 50 basis points on each of the sixth, twelfth, and eighteen month anniversaries of the Closing. At our option, the accrued interest resulting from the margin increases will be payable in cash or payable in kind by capitalizing the additional interest and adding it to the outstanding principal amount of the Senior Term Loan Facility. On the second anniversary of the Closing, the applicable margin rate will increase to 14.00% per annum for LIBOR-based loans and for alternate base rate loans the applicable margin rate will increase to 13.00% per annum. Interest is payable quarterly with respect to alternate base rate loans, and with respect to LIBOR-based loans, interest is payable in arrears at the end of each applicable period, but at least every three months. In addition, on the second anniversary of the Closing, we are required to pay an amount equal to 4.00% of the outstanding principal balance of the Senior Term Loan Facility. This fee will be paid in kind by capitalizing the amount of the fee and adding it to the outstanding principal amount of the Senior Term Loan Facility. Based on our initial fair value discount of $50.0 million and our estimate of the increasing interest rate margins for LIBOR based debt, the current estimated effective interest rate our Senior Term Loan Facility was 13.87% at March 31, 2009.

     As of March 31, 2009, $1.41 billion in aggregate principal amount was outstanding under the Senior Term Loan Facility, with a carrying value of $1.38 billion and an approximate fair market value of $1.32 billion.

     The Senior Term Loan Facility contains financial, affirmative and negative covenants that we believe are usual and customary for a senior secured credit agreement. The negative covenants in the Senior Term Loan Facility include, among other things, limitations on our ability to: declare dividends and make other distributions, redeem or repurchase our capital stock, prepay, redeem or repurchase indebtedness, make loans or investments (including acquisitions), incur additional indebtedness, enter into new lines of business, and sell our assets. The Senior Term Loan Facility is secured by a blanket lien on substantially all of our domestic assets, including a pledge of all of our domestic and international ownership interests. For purposes of repayment and in the event of liquidation, dissolution or bankruptcy, the Sprint Tranche shall be subordinated to the remainder of the Senior Term Loan Facility and obligations under the Amended Credit Agreement. At March 31, 2009, we were in compliance with our debt covenants.

     Interest Expense, Net — Interest expense, net, included in our consolidated statements of operations for the three months ended March 31, 2009 and 2008, consisted of the following (in thousands):

	Three Months Ended March 31,
	2009			2008
Interest expense	$	50,610		$	—
Capitalized interest		(23,012	)		—
Interest expense, net	$	27,598		$	—

11. Derivative Instruments

     We hold two interest rate swap contracts with two year and three year terms, which are based on 3-month LIBOR with a combined notional value of $600 million. These were economic hedges part of our LIBOR based debt. However, in accordance with SFAS No. 133, we did not designate the interest rate swap contracts as hedges. We are not holding these interest rate swap contracts for trading or speculative purposes and continue to hold these derivatives to offset our exposure to interest rate risk.

14

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     The following table sets forth information regarding our interest rate swap contracts as of March 31, 2009 (in thousands):

Type of	Notional			Receive	Pay			Fair Market
Derivative	Amount		Maturity Date	Index Rate	Fixed Rate			Value
Swap	$	300,000	3/5/2010	3-month LIBOR		3.50	%	$	( 6,547	)
Swap	$	300,000	3/5/2011	3-month LIBOR		3.62	%	$	(11,954	)

     In accordance with SFAS No. 157, we computed the fair value of the swaps using observed LIBOR rates, unobservable market interest rate swap curves and an adjustment for both counterparty and our credit risk, which are deemed to be Level 3 inputs in the fair value hierarchy (see Note 12). The interest rate swaps are currently in a liability position to our counterparties as of March 31, 2009. We monitor the risk of nonperformance of the Company and that of its counterparties on an ongoing basis.

Derivatives Not Designated As Hedging Instruments Under SFAS 133	Balance Sheet Location	March 31, 2009 Fair Value			December 31, 2008 Fair Value
		(in thousands)
Interest rate swap contract	Accounts payable and other current liabilities	$	(6,547	)	$	—
Interest rate swap contract	Other long-term liabilities		(11,954	)		(21,591	)
		$	(18,501	)	$	(21,591	)

     Since the interest rate swaps are undesignated as hedges as of March 31, 2009, we recognized both the realized and unrealized gain or (loss) in our consolidated statement of operations with no portion held in accumulated other comprehensive income (loss).

		Amount Of Gain Or (Loss) Recognized In
Derivatives Not Designated As Hedging		Loss On Derivative
Instruments Under SFAS 133	Location Of Gain Or (Loss) Recognized In Loss On Derivative	March 31, 2009		March 31, 2008
		(in thousands)
Interest rate swap contracts	Gain(loss) on undesignated interest rate swap contracts, net	$	1,050	$	—

12. Fair Value Measurements

     As defined in SFAS No. 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we use various methods including market, cost and income approaches. Based on these approaches, we utilize certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Based on the observability of the inputs used in the valuation techniques, we are required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and debt instruments carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data

Level 3: Unobservable inputs that are not corroborated by market data

     We maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. If listed prices or quotes are not available, fair value is based upon internally developed models that primarily use, as inputs, market-based or independently sourced market parameters, including but not limited to interest rate yield curves, volatilities, equity or debt prices, and credit curves. We utilize certain assumptions that market participants would use in pricing the financial instrument, including assumptions about risk, such as credit, inherent and default risk. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal judgment involved in measuring fair value. When observable market prices and parameters are not fully available, management judgment is necessary to estimate fair value. In addition, changes in market conditions may reduce the availability and reliability of quoted prices or observable data. In these instances, we 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 our own assumptions about the assumptions

15

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

that a market participant would use in pricing the security. These internally derived values are compared with non-binding values received from brokers or other independent sources, as available.

     The following table is a description of the pricing assumptions used for instruments measured and recorded at fair value, 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 and cash equivalents	Level 1	Market quotes
Short-term investment: U.S. Treasuries	Level 1	Market quotes
Short-term investment: Money market mutual funds	Level 1	Market quotes
Long-term investment: Auction rate securities	Level 3	Discount of forecasted cash flows adjusted for default/loss probabilities and estimate of final maturity
Short-term derivatives: Interest rate swap contracts	Level 3	Discount of forecasted cash flows adjusted for risk of non-performance
Long-term derivatives: Interest rate swap contracts	Level 3	Discount of forecasted cash flows adjusted for risk of non-performance

Investment Securities

     Where quoted prices for identical securities are available in an active market, securities are classified in Level 1 of the valuation hierarchy. Level 1 securities include U.S. Treasuries and money market mutual funds for which there are quoted prices in active markets. In certain cases where there is limited activity or less transparency around inputs to the valuation, investment securities are classified within Level 2 or Level 3 of the valuation hierarchy.

Derivatives

     The two derivative contracts assumed by us in the Transactions are “plain vanilla swaps.” Derivatives are classified in Level 3 of the valuation hierarchy. To estimate fair value, we use an income approach whereby we estimate net cash flows and discount the cash flows at a risk-adjusted rate. The inputs include the contractual terms of the derivatives, including the period to maturity, payment frequency and day-count conventions, and market-based parameters such as interest rate forward curves and interest rate volatility. A level of subjectivity is used to estimate the risk of our non-performance or that of our counterparties. See Note 2, Summary of Significant Accounting Policies, for further information.

     The following table summarizes our financial assets and liabilities by level within the valuation hierarchy at March 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	$	171,383	$	—	$	—	$	171,383
Short-term investments	$	2,664,456	$	—	$	—	$	2,664,456
Long-term investments	$	—	$	—	$	17,494	$	17,494
Financial liabilities:
Short-term interest rate swap contract	$	—	$	—	$	6,547	$	6,547
Long-term interest rate swap contract					$	11,954	$	11,954

     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
	Financial Assets			Financial Liabilities
Balance at January 1, 2009	$	18,974		$	21,591
Total losses included in net loss:
Other-than-temporary impairment loss and realized loss on investments		(1,480	)		—
Unrealized portion of gain (loss) on undesignated interest rate swap contracts		—			(3,090	)
Balance at March 31, 2009	$	17,494		$	18,501

16

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

13. Commitments and Contingencies

     Future minimum payments under obligations listed below (including all optional expected renewal periods on operating leases) as of March 31, 2009 are as follows (in thousands):

													Thereafter,
													Including All
	Total		2009		2010		2011		2012		2013		Renewal Periods
Long-term debt obligations	$	1,486,933	$	10,719	$	14,292	$	1,461,922	$	—	$	—	$	—
Interest payments		327,460		92,357		133,173		101,930		—		—		—
Operating lease obligations		3,754,333		110,248		147,483		148,030		149,262		149,357		3,049,953
Spectrum lease obligations		5,074,914		111,998		121,381		131,065		136,296		135,698		4,438,476
Spectrum service credits		96,378		912		986		986		986		986		91,522
Signed spectrum agreements		26,300		26,300		—		—		—		—		—
Sprint WiMAX inventory		44,180		44,180		—		—		—		—		—
Network equipment purchase obligations		210,446		94,177		116,269		—		—		—		—
Other purchase obligations		176,985		65,709		34,224		35,124		25,684		16,244		—
Total	$	11,197,929	$	556,600	$	567,808	$	1,879,057	$	312,228	$	302,285	$	7,579,951

     Spectrum and operating lease expense — Our commitments for non-cancelable operating leases consist mainly of leased spectrum license fees, office space, equipment and certain of our network equipment situated on leased sites, including land, towers and rooftop locations. Certain of the leases provide for minimum lease payments, additional charges and escalation clauses. Leased spectrum agreements have terms of up to 30 years. Other 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 leased spectrum was as follows:

	Three Months Ended
	March 31,
	2009		2008
Payments for leased spectrum	$	42,765	$	18,081
Amortization of prepaid spectrum licenses		14,713		3,134
Other non-cash spectrum lease expense		6,962		—
	$	64,440	$	21,215

     Rent expense recorded related to operating leases was as follows:

	Three Months Ended
	March 31,
	2009		2008
Cash payments for rent expense	$	36,910	$	1,618
Non-cash rent expense		12,827		—
	$	49,737	$	1,618

     Other spectrum commitments — We have commitments to provide Clearwire services to the lessors in launched markets, and reimbursement of capital equipment and third-party service expenditures to 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 months ended March 31, 2009, we satisfied $74,000 related to these commitments. The maximum remaining commitment at March 31, 2009 is $96.4 million and is expected to be incurred over the term of the related lease agreements, which generally range from 15-30 years.

     As of March 31, 2009, we have signed agreements to acquire approximately $26.3 million in new spectrum, subject to closing conditions. These transactions are expected to be completed within the next twelve months.

     WiMAX equipment purchase commitment — Under the terms of the Transactions, we are required to purchase from Sprint certain WiMAX equipment not contributed as part of the Transactions. We are required to purchase the WiMAX equipment for $44.2 million,

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CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

which represents Sprint’s cost to acquire that equipment. The purchases from Sprint must be made within twelve months of the Closing.

     Motorola agreements —We are committed to purchase certain infrastructure and supply inventory from Motorola. During the three months ended March 31, 2009, we paid Motorola $25.1 million under these agreements and have satisfied our purchase commitment under these agreements. Certain of our subsidiaries are also committed to purchase certain types of network infrastructure products, modems and PC cards we provide to our subscribers exclusively from Motorola through August 2011 and, thereafter, 51% of those products until the term of the agreement is completed on August 29, 2014, as long as certain conditions are satisfied.

     Purchase obligations — As part of the Closing, we have certain agreements and the obligations thereunder, including a number of arrangements for the sourcing of network equipment. Additionally, we have certain purchase obligations for network backhaul and IT related services with take-or-pay obligations or volume discounts. Our obligations with these suppliers run through 2013.

     AMDOCS Agreement — On March 31, 2009, we entered into 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, effective immediately, 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 commences on March 31, 2009 and ends on the earliest to occur of seven years from the date of the AMDOCS Agreement (to be extended under certain circumstances relating to conversion of subscribers to the new system) or the termination of the AMDOCS Agreement pursuant to its terms, as defined. 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.

     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 affected by increased litigation expense, significant settlement costs and/or unfavorable damage awards.

     On December 1, 2008, Adaptix, Inc., which we refer to as Adaptix, filed suit for patent infringement against us and Sprint in the U.S. District Court for the Eastern District of Texas, alleging that we and Sprint infringed six patents purportedly owned by Adaptix. On February 10, 2009, Adaptix filed an Amended Complaint alleging infringement of a seventh patent. Adaptix alleges that by offering mobile WiMAX services to subscribers in compliance with the 802.16 and 802.16e WiMAX standards, and by making, using and/or selling the supporting WiMAX network used to provide such WiMAX services, we and Sprint infringed the seven patents. Adaptix is seeking monetary damages, attorneys’ fees and a permanent injunction enjoining us from further acts of alleged infringement. On February 25, 2009, we filed an Answer to the Amended Complaint, denying infringement and asserting several affirmative defenses, including that the asserted patents are invalid. A trial is scheduled for December 2010, and the parties commenced discovery in early 2009.

     On May 7, 2008, Sprint filed an action in the Delaware Court of Chancery against iPCS, Inc., which we refer to as iPCS, and certain subsidiaries of iPCS, which we refer to as the iPCS Subsidiaries, seeking a declaratory judgment that, among other things, the Transactions do not violate iPCS’ and the iPCS Subsidiaries’ rights under their separate agreements with Sprint to operate and manage portions of Sprint’s PCS network in certain geographic areas. The Delaware case was later stayed by the Delaware court. On May 12, 2008, iPCS and the iPCS Subsidiaries filed a competing lawsuit in the Circuit Court of Cook County, Illinois, alleging that the Transactions would breach the exclusivity provisions in their management agreements with Sprint. On January 30, 2009, iPCS and the iPCS Subsidiaries filed an Amended Complaint seeking a declaratory judgment that the consummation of the Transactions violates their management agreements with Sprint, a permanent injunction preventing Sprint and its related parties, which iPCS alleges includes us, from implementing the Transactions and competing with Plaintiffs, and damages against Sprint for unlawful competition and costs and legal fees. No trial date in either case is currently scheduled. We are not named as a party in either litigation, but have

18

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

received a subpoena from iPCS and iPCS Subsidiaries seeking documents and testimony. If iPCS prevails and obtains a permanent injunction and the Court deems us to be a related party under the management agreements then we may be restricted from competing with iPCS and iPCS Subsidiaries. We do not believe that the inability to offer services in iPCS’ coverage areas would have a material adverse effect on our business.

     On April 22, 2009, a purported class action lawsuit was filed against us in Superior Court in King County, Washington by a group of five plaintiffs from Hawaii, Minnesota, North Carolina and Washington. 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. We have not been served with the complaint. Due to the early stage of the lawsuit and the complexity of the factual and legal issues involved, its outcome is not presently determinable.

     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 is 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 estimable.

14. Share-Based Payments

     At March 31, 2009, there were 67,326,598 shares available for grant under the 2008 Plan, which authorizes us to grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, 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 2007 Plan or the 2003 Plan.

Stock Options

          We granted options to certain officers and employees under the 2008 Plan. All options vest over a four-year period. Under SFAS No. 123(R), 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 from January 1, 2009 through March 31, 2009 is presented below:

				Weighted-
				Average
	Number of			Exercise
	Options			Price
Options outstanding — January 1, 2009		19,171,601		$	14.21
Exercisable outstanding — December 31, 2008		13,124,972			13.44
Granted		4,850,000			3.13
Forfeited		(639,036	)		15.18
Exercised		(6,509	)		3.00
Options outstanding — March 31, 2009		23,376,056		$	11.89
Exercisable outstanding — March 31, 2009		13,685,546		$	13.74

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CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     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 for the three months ended March 31, 2009:

Expected volatility		67.10	%
Expected dividend yield		—
Expected life (in years)		4.75
Risk-free interest rate		1.36	%
Weighted average fair value per option at grant date	$	1.89

     The total unrecognized share-based compensation costs related to non-vested stock options outstanding at March 31, 2009 was $15.4 million and is expected to be recognized over a weighted average period of approximately two years.

     For the three months ended March 31, 2009, we used an expected forfeiture rate of 12.66% in determining the calculation of share-based compensation expense for stock options.

Restricted Stock Units

     Following the Closing, we granted RSUs to certain officers and employees under the 2008 Plan. All RSUs vest over a four-year period. Under SFAS No. 123(R), 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 from January 1, 2009 through March 31, 2009 is presented below:

				Weighted-
	Number Of			Average
	RSU’s			Grant Price
Restricted stock units outstanding — January 1, 2009		3,272,625		$	13.19
Granted		6,683,402			3.12
Forfeited		(106,750	)		—
Exercised		—			—
Cancelled		—			—
Restricted stock units outstanding — March 31, 2009		9,849,277		$	6.36

     As of March 31, 2009, total unrecognized compensation cost of approximately $29.0 million, which is expected to be recognized over a weighted-average period of approximately three years.

     For the three months ended March 31, 2009, we used an expected forfeiture rate of 7.75% in determining share-based compensation expense for RSUs.

Sprint Equity Compensation Plans

     In connection with the Transactions, 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 costs related to unvested stock options and RSUs outstanding as of March 31, 2009 was $297,000 and $516,000, respectively, and is expected to be recognized over approximately 1.3 years for stock options and 1.0 year for RSUs, respectively.

     Share-based compensation expense recognized for all plans for the three months ended March 31, 2009 and 2008 is as follows (in thousands):

	Three Months Ended
	March 31,
	2009		2008
Options	$	2,727	$	—
RSUs		2,341		—
Sprint Equity Compensation Plans		872		—
	$	5,940	$	—

15. Net Loss Per Share

     Basic and diluted loss per share has been calculated in accordance with SFAS No. 128. Prior to the Closing, we had no equity as we were a wholly-owned division of Sprint. As such, we did not calculate or present net loss per share for the three months ended March 31, 2008.

20

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

Basic Net Loss Per Share

     The net loss per share available to holders of Clearwire Class A Common Stock is calculated as follows (in thousands):

	Three Months Ended
	March 31, 2009
Net loss	$	(260,492	)
Net loss attributable to non-controlling interests		189,437
Net loss attributable to Clearwire Corporation	$	(71,055	)

     The net loss per share is calculated as follows (in thousands):

					Net Loss
					Attributable To
	Outstanding		Weighted		Clearwire
	March 31,		Average Shares		Corporation
	2009		Outstanding		(1)			Loss Per Share
Clearwire Class A Common Stock		195,008		191,887	$	(71,055	)	$	(0.37	)

(1) Clearwire Class B Common Stockholders do not contractually participate in distributions of Clearwire, however Clearwire Class B Common Stockholders receive an income allocation in accordance with their non-controlling interests in Clearwire Communications, which is consolidated into Clearwire.

Diluted Loss Per Share

     The hypothetical exchange of Clearwire Communications Class B Common Interests together with Clearwire Class B Common Stock for Clearwire Class A Common Stock will have a dilutive effect on diluted loss per share due to certain tax effects for the period from January 1, 2009 to March 31, 2009. That exchange would result in both an increase in the number of Clearwire Class A Common Stock outstanding and a corresponding increase in the net loss attributable to the Clearwire 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 Clearwire Class B Common Stock are converted to Clearwire Class A Common Stock, the Clearwire Communications partnership structure will no longer exist and Clearwire will be required to recognize a tax provision related to indefinite lived intangible assets.

     Net loss available to holders of Clearwire Class A Common Stock, assuming conversion of the Clearwire Communications Class B Common Interests and Clearwire Class B Common Stock, is as follows (in thousands):

	Three Months Ended
	March 31, 2009
Net loss attributable to Clearwire Corporation	$	(71,055	)
Net loss attributable to non-controlling interests		(189,437	)
Tax adjustment resulting from dissolution of Clearwire Communications		(5,135	)
Net loss available to Clearwire Class A Common Stockholders, assuming the exchange of Clearwire Class B to Class A Common Stock	$	(265,627	)

     The net loss per share available to holders of Clearwire Class A Common Stock on a diluted basis is calculated as follows (in thousands, except per share amounts):

	Outstanding		Weighted
	March 31,		Average Shares
	2009		Outstanding		Income			Loss Per Share
Clearwire Class A Common Stock		723,832		705,887	$	(265,627	)	$	(0.38	)

     The change in diluted loss per share is due to the hypothetical loss of partnership status for Clearwire Communications upon conversion of all Clearwire Communications Class B Common Interests and Clearwire Class B Common Stock and the conversion of the non-controlling interests discussed above.

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CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     The computations of diluted loss per share for the three months ended March 31, 2009 did not include the effects of the following options, restricted stock units and warrants as the inclusion of these securities would have been antidilutive during a period of losses (in thousands):

	Weighted Average
	Outstanding Shares
Stock options		20,350
Restricted stock units		5,123
Warrants		17,806
		43,279

16. Business Segments

     As of December 31, 2008, and for the three months ended March 31, 2009, we have identified two reportable segments: the United States and the International business. For the three months ended March 31, 2008, we only had one reportable business segment: the United States, as we had no international operations prior to the Closing.

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

	Three Months Ended March 31, 2009
	United States			International			Total
Revenue	$	54,103		$	8,034		$	62,137
Cost of goods and services and network costs (exclusive of items shown separately below)		70,166			3,467			73,633
Operating expenses		161,585			11,320			172,905
Depreciation and amortization		42,512			6,036			48,548
Total operating expenses		274,263			20,823			295,086
Operating loss	$	(220,160	)	$	(12,789	)		(232,949	)
Other income (expense), net								(27,629	)
Income tax provision								86
Net loss								(260,492	)
Less: non-controlling interests in net loss of consolidated subsidiaries								189,437
Net loss attributable to Clearwire Corporation							$	(71,055	)

	Three Months Ended
	March 31,
	2009
Capital expenditures
United States	$	111,094
International		641
	$	111,735

	March 31,		December 31,
	2009		2008
Total assets
United States	$	8,748,647	$	8,901,988
International		166,909		222,179
	$	8,915,556	$	9,124,167

17. Related Party Transactions

     We have a number of strategic and commercial relationships with third parties that have had a significant impact on our business, operations and financial results. These relationships have been with Sprint, the Investors, Eagle River Holdings, LLC, which we refer to as ERH, Motorola, Inc. and Bell Canada, all of which are or have been related parties.

22

CLEARWIRE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     The following amounts for related party transactions are included in our consolidated financial statements (in thousands):

	March 31,		December 31,
	2009		2008
Notes receivable	$	4,617	$	4,837
Accounts payable and accrued expenses	$	7,635	$	33,872
Debt	$	178,300	$	178,748

	Three Months Ended March 31,
	2009		2008
Cost of good and services and network costs	$	17,703	$	710
Selling, general and administrative	$	832	$	66,431

     Amounts outstanding at the end of the year are unsecured and will be settled in cash.

     Sprint Nextel Corporation— Sprint assigned, where possible, certain costs to us based on our actual use of the shared services, which included office facilities and management services, including treasury services, human resources, supply chain management and other shared services, up through the Closing. Where direct assignment of costs was not possible or practical, Sprint used indirect methods, including time studies, to estimate the assignment of its costs to us, which were allocated to us through a management fee. The allocations of these costs were re-evaluated periodically. Sprint charged us management fees for such services of $66.0 million for the three months ended March 31, 2008. Additionally, we have lease agreements with Sprint for various switching facilities and transmitter and receiver sites for which we recorded rent expense of $4.3 million and $1.7 million for the three months ended March 31, 2009 and 2008, respectively.

     Sprint Pre-Closing Financing Amount and Amended Credit Agreement— As a result of the Transactions, we assumed the liability to reimburse Sprint for the Sprint Pre-Closing Financing Amount. We were required to pay $213.0 million, plus related interest of $4.5 million, to Sprint in cash on the first business day after the Closing, with the remainder added to the Senior Term Loan Facility as the Sprint Tranche under the Amended Credit Agreement in the amount of $179.2 million.

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CLEARWIRE CORPORATION AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

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 results of operations, financial condition and liquidity position for the three months ended March 31, 2009 and 2008 and should be read in conjunction with our condensed 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 Form 10Q,, particularly in the section entitled “Risk Factors.”

     Explanatory Note

     On November 28, 2008, Clearwire Corporation (f/k/a New Clearwire Corporation), which we refer to as Clearwire or the Company, completed the transactions contemplated by the Transaction Agreement and Plan of Merger dated as of May 7, 2008, as amended, which we refer to as the Transaction Agreement, with Clearwire Legacy LLC (f/k/a Clearwire Corporation), which we refer to as Old Clearwire, Sprint Nextel Corporation, which we refer to as Sprint, Comcast Corporation, which we refer to as Comcast, Time Warner Cable Inc., which we refer to as Time Warner Cable, Bright House Networks, LLC, which we refer to as Bright House, Google Inc., which we refer to as Google, and Intel Corporation, which we refer to as Intel, and together with Comcast, Time Warner Cable, Bright House and Google, the Investors. For accounting purposes, the transactions, which we refer to as the Transactions, are treated as a reverse acquisition with the WiMAX business contributed from Sprint, which we refer to as the Sprint WiMAX Business, deemed to be the accounting acquirer. As a result, the financial results of Old Clearwire prior to November 28, 2008 are not included as part of the Company’s reported financial statements. The historical financial results of Clearwire prior to November 29, 2008 are those of the Sprint WiMAX Business. Except as otherwise noted, references to “we,” “us,” or “our” refer to Clearwire and its subsidiaries.

     Forward-Looking Statements

     Statements and information included in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

     Forward-looking statements in this Quarterly Report on Form 10-Q represent our beliefs, projections and predictions about future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievement described in or implied by such statements. Actual results may differ materially from the expected results described in our forward-looking statements, including with respect to the correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of publicly available information relating to the factors upon which our business strategy is based or the success of our business.

     When used in this report, the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “evaluate,” “opinion,” “may,” “could,” “future,” “potential,” “probable,” “if,” “will” and similar expressions generally identify forward-looking statements.

     Recent Developments and Overview

     On May 7, 2008, we entered into the Transaction Agreement with Sprint, Comcast, Time Warner Cable, Bright House, Google and Intel, in an effort to expedite the development of a nationwide wireless broadband network, expedite the commercial availability of wireless broadband services over the wireless broadband network, enable the offering of a greater depth and breadth of wireless broadband services and promote wireless broadband development.

     Pursuant to the Transaction Agreement, the assets of Old Clearwire and its subsidiaries before the consummation of the Transactions were combined with the spectrum and certain other assets associated with the development and operations of the Sprint WiMAX Business, with the Investors contributing an aggregate of $3.2 billion in cash to the combined company. The closing of the Transactions, which we refer to as the Closing, occurred on November 28, 2008.

24

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

     As a result of the Transactions, each share of Old Clearwire, which we refer to as Old Clearwire Class A Common Stock was converted into the right to receive one share of Clearwire Class A Common Stock, and each option and warrant to purchase shares of Old Clearwire Class A Common Stock was converted into an option or warrant, as applicable, to purchase the same number of shares of Clearwire Class A Common Stock in Clearwire.

     After the Transactions, Sprint and the Investors, other than Google, own shares of Clearwire Class B Common Stock, which have equal voting rights to Clearwire Class A Common Stock, but have only limited economic rights. Unlike the holders of Clearwire Class A Common Stock, the holders of Clearwire Class B Common Stock have no right to dividends and no right to any proceeds on liquidation other than the par value of the Clearwire Class B Common Stock. Sprint and the Investors, other than Google, hold their economic rights through ownership of Clearwire Communications Class B Common Interests. In exchange for its investment, Google owns shares of Clearwire Class A Common Stock.

     In addition, at the Closing, we entered into several commercial agreements with Sprint and certain of the Investors relating to, among other things, access rights to towers that Sprint owns or leases, resales by us and certain Investors of bundled second generation wireless communications, which we refer to as 2G, and third generation wireless communications, which we refer to as 3G services, from Sprint, resales by Sprint and certain Investors of our fourth generation wireless broadband, which we refer to as 4G, services, most favored reseller status with respect to economic and non-economic terms of certain service agreements, collective development of new 4G services, creation of desktop and mobile applications on the Clearwire network, the embedding of Worldwide Interoperability of Microwave Access, which we refer to as WiMAX, chips into various Clearwire network devices and the development of Internet services and protocols. As a result of our entering into certain of the commercial agreements with Sprint and the Investors in connection with the Transactions, we expect to increase our distribution opportunities, thereby permitting us to expand our subscriber base and increase revenues.

     Critical Accounting Policies

     Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, which we refer to as US GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates used, including those related to investments, long-lived assets, goodwill and intangible assets, including spectrum, share-based compensation, and deferred tax asset valuation allowance.

     Our accounting policies require management to make complex and subjective judgments. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, observance of trends in the industry, information provided by our subscribers and information available from other outside sources, as appropriate. Additionally, changes in accounting estimates are reasonably likely to occur from period to period. These factors could have a material impact on our financial statements, the presentation of our financial condition, changes in financial condition or results of operations.

     There have been no other significant changes in our critical accounting policies during the three months ended March 31, 2009 as compared to the critical accounting policies disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual report on Form 10-K for the year ended December 31, 2008.

     Recent Accounting Pronouncements

     In January 2009, the Financial Accounting Standards Board, which we refer to as FASB, released Staff Position SFAS No. 107-1 and Accounting Principles Board, which we refer to as APB, Opinion No. 28-1, Interim Disclosures about Fair Value of Financial Instruments, which we refer to as FSP No. 107-1 and APB 28-1. FSP No. 107-1 amends FASB Statement No. 107, Disclosures about Fair Values of Financial Instruments, to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. APB 28-1 amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in all interim financial statements. FSP No. 107-1 and APB 28-1 are effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. We plan to adopt FSP No. 107-1 and APB 28-1 and provide the additional disclosure requirements for second quarter 2009.

     In March 2009, the FASB released Staff Position SFAS No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, which we refer to as FSP

25

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

No. 157-4. FSP No. 157-4 provides additional guidance in determining whether a market for a financial asset is not active and a transaction is not distressed for fair value measurement purposes as defined in FSP No. 157. FSP No. 157-4 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. We plan to adopt the provisions of FSP No. 157-4 during second quarter 2009, but do not believe this guidance will have a significant impact on our financial position, cash flows, or disclosures.

     In March 2009, the FASB issued Staff Position SFAS No. 115-2 and SFAS No. 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, which we refer to as FSP No. 115-2 and FSP No. 124-2. FSP No. 115-2 and FSP No. 124-2 provides guidance in determining whether impairments in debt securities are other than temporary, and modifies the presentation and disclosures surrounding such instruments. FSP No. 115-2 and FSP No. 124-2 are effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. We plan to adopt the provisions of FSP No. 115-2 and FSP No. 124-2 during second quarter 2009, but do not believe this guidance will have a significant impact on our financial position, cash flows, or disclosures.

     Results of Operations

     Within this “Results of Operations” section, we disclose results of operations on both an “as reported” and a “pro forma” basis. The historical as reported results for the three months ended March 31, 2008 are not necessarily representative of our ongoing operations as Old Clearwire’s results were not included, and the reported results reflect only the Sprint WiMAX Business’ results. Therefore, to facilitate an understanding of our trends and on-going performance, we have presented pro forma results in addition to the reported results. The unaudited pro forma combined statements of operations were prepared in accordance with Article 11- Pro forma Financial Information of Securities and Exchange Commission Regulation S-X. The pro forma results include both the Sprint WiMAX Business and Old Clearwire for the three months ended March 31, 2008, as adjusted for certain pro forma purchase accounting adjustments and other non-recurring charges, and give effect to the Transactions as though the Closing had occurred on January 1, 2008. A reconciliation of pro forma amounts to reported amounts has been included under the heading “Pro Forma Reconciliation.”

     The following table sets forth as reported operating data for the periods presented (in thousands, except per share data).

As Reported Results — Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008

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

	Three Months Ended
	March 31,
	2009			2008
REVENUE	$	62,137		$	—
OPERATING EXPENSES:
Cost of goods and services and network costs (exclusive of items shown separately below)		73,633			26,861
Selling, general and administrative expense		108,465			40,255
Depreciation and amortization		48,548			6,770
Spectrum lease expense		64,440			21,215
Total operating expenses		295,086			95,101
OPERATING LOSS		(232,949	)		(95,101	)
OTHER INCOME (EXPENSE):
Interest income		3,277			285
Interest expense		(27,598	)		—
Foreign currency loss, net		(421	)		—
Other-than-temporary impairment loss and realized loss on investments		(1,480	)		—
Other income (expense), net		(1,407	)		1,546
Total other income (expense), net		(27,629	)		1,831
LOSS BEFORE INCOME TAXES		(260,578	)		(93,270	)
Income tax provision		86			(4,167	)
NET LOSS		(260,492	)		(97,437	)
Less non-controlling interests in net loss of consolidated subsidiaries		189,437			—
NET LOSS ATTRIBUTIBLE TO CLEARWIRE CORPORATION	$	(71,055	)	$	(97,437	)
Net loss per Class A Common Share (1):
Basic	$	(0.37	)
Diluted	$	(0.38	)
Weighted average Class A Common Shares outstanding:
Basic		191,887
Diluted		705,887

26

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

(1) Prior to the Closing, we had no equity as we were a wholly-owned division of Sprint. As such, we did not calculate or present net loss per share for the three months ended March 31, 2008.

     Revenue

     Revenue is primarily generated from subscription services and modem lease fees for our wireless broadband service, as well as from activation fees and fees for other services such as email, VoIP, and web hosting services.

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Revenue	$	62,137	$	—	$	62,137		N/M

     The increase in revenue for 2009 is primarily due to the revenue received from our operation of markets received from Old Clearwire. We acquired all of the Old Clearwire markets and subscribers as part of the Transactions. Total subscribers in all markets were approximately 500,000 as of March 31, 2009. There were no subscribers of the Sprint WiMAX Business as of March 31, 2008. Revenue in the United States represented 87% and international revenue represented 13% of total revenue for the three months ended March 31, 2009. As of March 31, 2009, we operated our services in 48 domestic and four international markets. Throughout 2009 and 2010, we expect revenues to increase, due to the roll out of new mobile WiMAX markets, which will increase our subscriber base. In addition, we expect that average revenue per user, which we refer to as ARPU, will be similar to current levels because increases from multiple service offerings per customer will likely be offset by the impact of promotional pricing. We also expect that customer turnover, which we refer to as churn, will increase in our pre-WiMAX markets as we transition these networks to mobile WiMAX technology.

     Cost of goods and services and network costs

     Cost of goods and services includes costs associated with tower rents, direct Internet access and backhaul, which is the transporting of data traffic between distributed sites and a central point in the market or Point of Presence. Cost of goods and services also includes certain network equipment, site costs, facilities costs, software licensing and certain office equipment. Network costs primarily consist of external services and internal payroll incurred in connection with the design, development and construction of the network. The external services include consulting fees, contractor fees and project-based fees that are not capitalizable.

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Cost of goods and services and network costs	$	73,633	$	26,861	$	46,772		174.1	%

     Cost of goods and services and network costs increased $46.8 million in the three months ended March 31, 2009 as compared to the three months ended March 31, 2008, primarily due to an increase in tower lease and backhaul expenses. We expect costs of goods and services and network costs to increase significantly throughout 2009 and 2010 as we expand our network.

     Selling, general and administrative expense

     Selling, general and administrative expenses, which we refer to as SG&A, include all of the following: human resources, treasury services and other shared services; salaries and benefits, sales commissions, travel expenses and related facilities costs for the following personnel: sales, marketing, network deployment, executive, finance and accounting, information technology, customer care, human resource and legal; network deployment expenses representing non-capitalizable costs on network builds in markets prior to launch, rather than costs related to our markets after launch, which are included in cost of goods and services and network costs; and costs associated with advertising, trade shows, public relations, promotions and other market development programs and third-party professional service fees.

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Selling, general and administrative expense	$	108,465	$	40,255	$	68,210		169.4	%

27

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

     The increase is consistent with the additional resources, headcount and shared services that we have utilized as we continue to build and launch our mobile WiMAX services, especially the higher sales and marketing and customer care expenses in support of the launch of the Portland market. The increase in employee compensation and related costs, which includes facilities costs, is primarily due to the acquisition of Old Clearwire and all of its employees. Employee headcount increased at March 31, 2009 to approximately 2,015 employees compared to approximately 608 employees at March 31, 2008. Our focus in 2009 and 2010 will be on development and expansion of our wireless 4G network. We expect that cost per gross addition, which we refer to as CPGA, will increase as new markets are launched, consistent with our past operating experiences.

     Depreciation and amortization

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Depreciation and amortization	$	48,548	$	6,770	$	41,778		617.1	%

     Depreciation and amortization expense primarily represents the depreciation recorded on network assets that are being placed into service as we continue to build and develop our networks and amortization on intangible assets and definite-lived spectrum. During the quarter ended March 31, 2008, substantially all of the capital expenditures of the Sprint WiMAX Business represented construction work in progress and therefore very little depreciation was recorded. The increase is also due to depreciation and amortization expense recorded on assets acquired from Old Clearwire. Depreciation and amortization will continue to increase as additional mobile WiMAX markets are launched and placed into service throughout 2009 and 2010.

     Spectrum lease expense

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Spectrum lease expense	$	64,440	$	21,215	$	43,225		203.7	%

     Total spectrum lease expense increased as a direct result of a significant increase in the number of spectrum leases held by us as well as the acquisition of spectrum leases from Old Clearwire as part of the Transactions. With the significant number of new spectrum leases and the increasing cost of these leases, we expect our spectrum lease expense to increase. As we renegotiate these leases, they are replaced with new leases, usually at a higher lease cost per month, but with longer terms.

     Interest expense

	Three Months Ended
	March 31,					Dollar			Percentage
(In thousands, except percentages)	2009			2008		Change			Change
Interest expense	$	(27,598	)	$	—	$	(27,598	)		N/M

     We incurred $50.6 million in interest expense during the three months ended March 31, 2009, which was partially offset by capitalized interest of $23.0 million. Interest expense was calculated over the period using the effective interest method based on an effective interest rate of 13.9 percent. Interest expense also reflects an adjustment to accrete the debt to par value. We did not incur interest expense prior to the Transactions, as Sprint funded our operations and we had no outstanding debt.

     Tax provision

	Three Months Ended
	March 31,					Dollar		Percentage
(In thousands, except percentages)	2009		2008			Change		Change
Income tax provision	$	86	$	(4,167	)	$	4,253		102.1	%

     The decrease in the income tax provision is primarily due to the change in Clearwire’s deferred tax position as a result of the closing of the Transactions on November 28, 2008. Prior to the closing, the income tax provision was primarily due to increased deferred liabilities from additional amortization taken for federal income tax purposes by the Sprint WiMAX Business on certain indefinite-lived licensed spectrum. As a result of the Transactions, the only U.S. temporary difference for Clearwire after closing is the basis difference associated with our investment in Clearwire Communications LLC, a partnership for U.S. income tax purposes.

28

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

Clearwire is projecting that the partnership will have additional losses in the U.S. in 2009. We do not believe such losses will be realizable at a more likely than not level and accordingly the projected additional losses allocated to Clearwire in 2009 will not result in a U.S. tax provision or benefit for 2009. The small tax benefit recorded in the first quarter 2009 is associated with the non-U.S. operations.

     Non-controlling interests in net loss of consolidated subsidiaries

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Non-controlling interests in net loss of consolidated subsidiaries	$	189,437	$	—	$	189,437		N/M

     The non-controlling interests in net loss of consolidated subsidiaries represents the allocation of a portion of the net loss to the non-controlling interests in consolidated subsidiaries attributable to the ownership by Sprint and the Investors, other than Google, of Clearwire Communications Class B Common Interests. As of March 31, 2009, the non-controlling interests share in net loss was 73%.

Pro Forma Results — As Reported Results for the Three Months Ended March 31, 2009 Compared to Pro Forma Results for the Three Months Ended March 31, 2008

     The unaudited pro forma condensed combined statement of operations that follows is presented for informational purposes only and is not intended to represent or be indicative of the combined results of operations that would have been reported had the Transactions been completed as of January 1, 2008 and should not be taken as representative of our future consolidated results of operations.

     The following unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2008 were prepared under Article 11-Pro forma Financial Information of Securities and Exchange Commission Regulation S-X using (1) the unaudited accounting records of The Sprint WiMAX Business for the three months ended March 31, 2008; and (2) the unaudited consolidated financial statements of Old Clearwire for the three months ended March 31, 2008. The unaudited pro forma condensed combined statements of operations should be read in conjunction with these separate historical financial statements and accompanying notes thereto. A reconciliation of pro forma amounts to reported amounts has been included under the heading “Pro Forma Reconciliation.”

     The following table sets forth pro forma operating data for Clearwire adjusted for the related purchase accounting adjustments and other non-recurring charges, for the periods presented (in thousands):

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

	As Reported			Pro Forma
	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2009			2008
	(In thousands)
REVENUE:	$	62,137		$	51,528
OPERATING EXPENSES:
Cost of goods and services and network costs (exclusive of items shown separately below):		73,633			65,035
Selling, general and administrative expense		108,465			139,801
Depreciation and amortization		48,548			26,611
Spectrum lease expense		64,440			65,518
Total operating expenses		295,086			296,965
OPERATING LOSS		(232,949	)		(245,347	)
OTHER INCOME (EXPENSE):
Interest income		3,277			8,754
Interest expense		(27,598	)		(47,427	)
Foreign currency gain (loss), net		(421	)		525
Other-than-temporary impairment loss and realized loss on investments		(1,480	)		(4,849	)
Other expense, net		(1,407	)		(452	)
Total other income (expense), net		(27,629	)		(43,449	)
LOSS BEFORE INCOME TAXES		(260,578	)		(288,886	)
Income tax provision		86			—
NET LOSS		(260,492	)		(288,886	)
Less: non-controlling interests in net loss of consolidated subsidiaries		189,437			212,447
NET LOSS ATTRIBUTIBLE TO CLEARWIRE CORPORATION	$	(71,055	)	$	(76,439	)

29

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

     Revenue

     Revenue is primarily generated from subscription and modem lease fees for our wireless broadband service, as well as from activation fees and fees for other services such as email, VoIP telephony, and web hosting services.

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Revenue	$	62,137	$	51,528	$	10,609		20.6	%

     Revenue in the United States represented 87% and international revenue represented 13% of total revenue for the quarter ended March 31, 2009 compared to 82.1% and 17.9% for the quarter ended March 31, 2008, respectively. Total subscribers in all markets grew to approximately 500,000 as of March 31, 2009 (actual) from approximately 443,000 as of March 31, 2008 (pro forma). The growth in subscribers and the increase in services available to subscribers were the primary reasons for the increase in revenue for the three months ended March 31, 2009 over the three months ended March 31, 2008. As of March 31, 2009, we operated our services in 48 domestic and four international markets. Throughout 2009 and 2010, we expect revenues to increase, due to the roll out of new mobile WiMAX markets, which will increase our subscriber base. In addition, we expect that ARPU will be similar to current levels because increases from multiple service offerings per customer will likely be offset by the impact of promotional pricing. We also expect that churn will increase in our pre-WiMAX markets as we transition these networks to mobile WiMAX technology.

     Cost of goods and services and network costs

     Costs of goods and services and network costs primarily includes costs associated with tower rents, direct Internet access and backhaul, as well as network related expenses. Cost of goods and services and network costs also includes certain network equipment, site costs, facilities costs, software licensing and certain office equipment.

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Cost of goods and services and network costs	$	73,633	$	65,035	$	8,598		13.2	%

     The increase in cost of goods and services and network costs was primarily due to an increase in the number of towers, increases in direct Internet access and related backhaul costs and additional expenses as we launched an additional market in 2009 and prepared for future mobile WiMAX builds. We expect costs of goods and services and network costs to increase significantly throughout 2009 and 2010 as we expand our network.

     Selling, general and administrative expense

     SG&A includes all of the following: human resources, treasury services and other shared services that were provided by Sprint prior to the Closing; salaries and benefits, sales commissions, travel expenses and related facilities costs for the following personnel: sales, marketing, network deployment, executive, finance and accounting, information technology, customer care, human resource; network deployment expenses representing non-capitalizable costs on network builds in markets prior to launch, rather than costs related to our markets after launch which is included in cost of goods and services and network costs; and costs associated with advertising, trade shows, public relations, promotions and other market development programs and third-party professional service fees.

	Three Months Ended
	March 31,				Dollar			Percentage
(In thousands, except percentages)	2009		2008		Change			Change
Selling, general and administrative expense	$	108,465	$	139,801	$	(31,336	)		(22.4	%)

     The decrease in SG&A was due to reductions in employee headcount and related expenses. Our employee headcount was approximately 2,015 at March 31, 2009 (actual) compared to approximately 2,470 employees at March 31, 2008 (pro forma). Our

30

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

focus in 2009 and 2010 will be on development and expansion of our wireless 4G network. We expect that CPGA will increase as new markets are launched, consistent with our past operating experiences.

     Depreciation and amortization

	Three Months Ended
	March 31,				Dollar		Percentage
(In thousands, except percentages)	2009		2008		Change		Change
Depreciation and amortization	$	48,548	$	26,611	$	21,937		82.4	%

     The increase was primarily due to the additional depreciation expense associated with our continued network build-out and the depreciation of consumer premise equipment, which we refer to as CPE, related to associated subscriber growth. Depreciation and amortization will continue to increase as additional mobile WiMAX markets are launched and placed into service throughout 2009 and 2010.

     Spectrum lease expense

	Three Months Ended
	March 31,				Dollar			Percentage
(In thousands, except percentages)	2009		2008		Change			Change
Spectrum lease expense	$	64,440	$	65,518	$	(1,078	)		(1.6	%)

     Total spectrum lease expense decreased due to purchase accounting adjustments to record amortization on a pro forma basis related to the new basis of the Old Clearwire spectrum lease contracts over their estimated remaining useful lives on a straight-line basis. With the significant number of spectrum leases and the increasing cost of these leases, we expect our spectrum lease expense to increase. As we renegotiate these leases they are replaced with new leases, usually at a higher lease cost per month, but with longer terms.

     Interest income

	Three Months Ended
	March 31,				Dollar			Percentage
(In thousands, except percentages)	2009		2008		Change			Change
Interest income	$	3,277	$	8,754	$	(5,477	)		(62.6	%)

     The decrease was primarily due to the reduction in interest earned on investments held during the three months ended March 31, 2009 compared to 2008. The reduced interest earned reflected changes in our investment strategy as well as a reduction in market interest rates on our investments.

     Interest expense

	Three Months Ended
	March 31,						Dollar		Percentage
(In thousands, except percentages)	2009			2008			Change		Change
Interest expense	$	(27,598	)	$	(47,427	)	$	19,829		41.8	%

     The decrease was primarily due to the pro forma results not including an adjustment for capitalized interest offset by increase in interest expense and accretion of debt discount on the senior term loan facility. Interest expense was calculated over the period using the effective interest method based on an effective interest rate of 13.9 percent. Interest expense also reflects an adjustment to accrete the debt to par value. Interest capitalized during the three months ended March 31, 2009 was $23.0 million.

     Other-than-temporary impairment loss and realized loss on investments

	Three Months Ended
	March 31,						Dollar		Percentage
(In thousands, except percentages)	2009			2008			Change		Change
Other-than-temporary impairment loss and realized loss on investments	$	(1,480	)	$	(4,849	)	$	3,369		69.5	%

     The decrease in the other-than-temporary impairment loss and realized loss on investment securities is due to a lower decline in the fair value of investment securities held by us for the quarter ended March 31, 2009, which we determined to be other than temporary.

31

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

At March 31, 2009, we held available-for-sale short-term and long-term investments with a fair value and cost of $2.7 billion. During the quarter ended March 31, 2009, we incurred other-than-temporary impairment losses of $1.5 million related to a decline in the estimated fair values of our auction rate securities.

Non-controlling interests in net loss of consolidated subsidiaries

	Three Months Ended
	March 31,				Dollar			Percentage
(In thousands, except percentages)	2009		2008		Change			Change
Non-controlling interests in net loss of consolidated subsidiaries	$	189,437	$	212,447	$	(23,010	)		(10.8	%)

     The non-controlling interests in net loss of consolidated subsidiaries represents the allocation of a portion of the net loss to the
non-controlling interests in consolidated subsidiaries attributable to the ownership by Sprint and the Investors, other than Google, of Clearwire Communications Class B Common Interests. As of March 31, 2009, the non-controlling interests share in net loss was 73%.

Pro Forma Reconciliation

     The unaudited pro forma condensed combined statements of operations that follows is presented for informational purposes only and is not intended to represent or be indicative of the combined results of operations that would have been reported had the Transactions been completed as of January 1, 2008 and should not be taken as representative of the future consolidated results of operations of the Company.

     The following unaudited pro forma condensed combined statements of operations for the period ended March 31, 2008 were prepared under Article 11-Pro forma Financial Information of Securities and Exchange Commission Regulation S-X using (1) the unaudited accounting records of the Sprint WiMAX Business for the three months ended March 31, 2008; and (2) the unaudited consolidated financial statements of Old Clearwire for the three months ended March 31, 2008. The unaudited pro forma condensed combined statements of operations should be read in conjunction with these separate historical financial statements and accompanying notes thereto.

     The following table provides a reconciliation from the as reported results to the pro forma results presented above for the Company for the three months ended March 31, 2008 (in thousands):

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

	Three Months Ended March 31, 2008
	Historical
	3 Month Period			3 Month Period			Purchase			Clearwire
	Clearwire			Old			Acctng and			Corporation
	Corporation(1)			Clearwire			Other(2)			Pro Forma
REVENUE:	$	—		$	51,528		$	—		$	51,528
OPERATING EXPENSES
Cost of goods and services and network costs (exclusive of items shown separately below):		26,861			38,174			—			65,035
Selling, general and administrative expense		40,255			99,546			—			139,801
Depreciation and amortization		6,770			28,085			(13,482	)(a)		26,611
								5,238	(b)
Spectrum lease expense		21,215			35,685			9,317	(b)		65,518
								(699	)(c)
Total operating expenses		95,101			201,490			374			296,965
OPERATING LOSS		(95,101	)		(149,962	)		(374	)		(245,437	)
OTHER INCOME (EXPENSE):
Interest income		285			8,469			—			8,754
Interest expense		—			(28,594	)		28,410	(d)		(47,427	)
								(47,243	)(e)
Foreign currency gain, net		—			525			—			525
Other-than-temporary impairment loss and realized loss on investments		—			(4,849	)		—			(4,849	)
Other income (expense), net		1,546			(1,299	)		(699	)(c)		(452	)
Total other income (expense), net		1,831			(25,748	)		(19,532	)		(43,449	)
LOSS BEFORE INCOME TAXES		(93,270	)		(175,710	)		(19,906	)		(288,886	)

32

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

	Three Months Ended March 31, 2008
	Historical
	3 Month Period			3 Month Period			Purchase			Clearwire
	Clearwire			Old			Acctng and			Corporation
	Corporation(1)			Clearwire			Other(2)			Pro Forma
Income tax provision		(4,167	)		(1,916	)		6,083	(f)		—
NET LOSS		(97,437	)		(177,626	)		(13,823	)		(288,886	)
Less non-controlling interests in net loss of subsidiaries		—			1,237			211,210	(g)		212,447
NET LOSS ATTRIBUTIBLE TO CLEARWIRE CORPORATION	$	(97,437	)	$	(176,389	)	$	197,387		$	(76,439	)
Net loss per Class A Common Share (3):
Basic				$	(1.08	)				$	(0.39	)
Diluted				$	(1.08	)				$	(0.41	)
Weighted average Class A Common Shares outstanding:
Basic					164,056						194,484
Diluted					164,056						723,307

(1) Basis of Presentation

     Sprint Nextel Corporation entered into an agreement with Old Clearwire to combine both of their next generation wireless broadband businesses to form a new independent company. On Closing, Old Clearwire and the Sprint WiMAX Business completed the combination to form Clearwire. The Transactions were accounted for under SFAS No. 141 as a reverse acquisition with the Sprint WiMAX Business deemed to be the accounting acquirer.

     On the Closing, the Investors made an aggregate $3.2 billion capital contribution to Clearwire and its subsidiary, Clearwire Communications. In exchange for the contribution of the Sprint WiMAX Business and their investment, as applicable, Google initially received 25,000,000 shares of Clearwire Class A Common Stock and Sprint and the other Investors received 505,000,000 shares of Clearwire Class B Common Stock and an equivalent amount of Clearwire Communications Class B Common Interests. The number of shares of Clearwire Class A and B Common Stock and Clearwire Communications Class B Common Interests, as applicable, that the Investors were entitled to receive under the Transaction Agreement was subject to a post-closing adjustment based on the trading price of Clearwire Class A Common Stock on NASDAQ over 15 randomly-selected trading days during the 30-day period ending on the 90th day after the Closing, or February 26, 2009, which we refer to as the Adjustment Date, with a floor of $17.00 per share and a cap of $23.00 per share. During the measurement period, Clearwire Class A Common Stock traded below $17.00 per share on NASDAQ, so on the Adjustment Date, we issued to the Investors an additional 4,411,765 shares of Clearwire Class A Common Stock and 23,823,529 shares of Clearwire Class B Common Stock and 23,823,529 additional Clearwire Communications Class B Common Interests to reflect the $17.00 final price per share. Additionally, in accordance with the subscription agreement, on February 27, 2009, CW Investment Holdings LLC purchased 588,235 shares of Clearwire Class A Common Stock at $17.00 per share for a total investment of $10.0 million. For the purpose of determining the number of shares outstanding within the unaudited pro forma condensed combined statement of operations, we assumed that the additional shares and common interests issued to the Investors and CW Investment Holdings LLC on the Adjustment Date and February 27, 2009, respectively, were issue as of the Closing and that the Closing was consummated on January 1, 2008. After giving effect to the Transactions, the post-closing adjustment and the investment by CW Investment Holdings LLC, Sprint owns the largest interest in Clearwire with an effective voting and economic interest in Clearwire and its subsidiaries of approximately 51%.

     In connection with the integration of the Sprint WiMAX Business and Old Clearwire operations, we expect that certain non-recurring charges will be incurred. We also expect that certain synergies might be realized due to operating efficiencies or future revenue synergies expected to result from the Transactions. However, in preparing the unaudited pro forma condensed combined statements of operations, which gives effect to the Transactions as if they were consummated on January 1, 2008, no pro forma adjustments have been reflected to consider any such costs or benefits.

(2) Pro Forma Adjustments Related to Purchase Accounting and Other Non-recurring Charges for the Three Months Ended March 31, 2008

     The pro forma adjustments related to purchase accounting have been derived from the preliminary allocation of the purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of Old Clearwire, including the allocation of the excess of the estimated fair value of net assets acquired over the purchase price. The allocation of the purchase consideration is preliminary and based on valuations derived from estimated fair value assessments and assumptions used by management. The final purchase price allocation is pending the finalization of appraisal valuations of certain tangible and intangible assets acquired. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable,

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)

different estimates and assumptions could result in different values being assigned to individual assets acquired and liabilities assumed, and the resulting amount of the excess of estimated fair value of net assets acquired over the purchase price.

     Article 11 of Regulation S-X requires that pro forma adjustments reflected in the unaudited pro forma statement of operations are directly related to the transaction for which pro forma financial information is presented and have a continuing impact on the results of operations. Certain charges have been excluded in the unaudited pro forma condensed combined statement of operations as such charges were incurred in direct connection with or at the time of the Transactions and are not expected to have an ongoing impact on the results of operations after the Closing.

(a)	Represents adjustments in the depreciation and amortization expense on a pro forma basis related to items of Old Clearwire property, plant and equipment that are being depreciated and amortized over their estimated remaining useful lives on a straight-line basis. The reduction in depreciation expense results from a decrease in the carrying value of Old Clearwire property, plant equipment due to the allocation of the excess of the estimated fair value of net assets acquired over the purchase price used in purchase accounting for the Transactions.
(b)	Represents adjustments to record amortization on a pro forma basis related to Old Clearwire spectrum lease contracts and other intangible assets over their estimated weighted average remaining useful lives on a straight-line basis. The increase in the amortization expense results from an increase in the carrying value of the Old Clearwire spectrum lease contracts and other intangible assets resulting from purchase accounting.
(c)	Represents the elimination of intercompany other income and related expenses associated with the historical agreements pre-Closing between the Sprint WiMAX Business and Old Clearwire, where Old Clearwire leased spectrum licenses from the Sprint WiMAX Business. The other income and related expenses were $699,000 for the three months ended March 31, 2008.
(d)	Prior to the Closing, Old Clearwire refinanced the Senior Term Loan Facility and renegotiated the loan terms. Historical interest expense related to the Senior Term Loan Facility before the refinancing and amortization of the deferred financing fees recorded by Old Clearwire, in the amount of $28.4 million for the three months ended March 31, 2008 has been reversed as if the Transactions were consummated on January 1, 2008.
(e)	Represents the adjustment to record pro forma interest expense assuming the senior term loan facility, including the Sprint Pre-Closing financing (as defined in the Transaction Agreement) under the Amended Credit Agreement (as defined below), was outstanding as of January 1, 2008. The Closing would have resulted in an event of default under the terms of the credit agreement underlying the senior term loan facility unless the consent of the lenders was obtained. On November 21, 2008, Old Clearwire entered into the Amended and Restated Credit Agreement with the lenders to obtain their consent and to satisfy other conditions to closing under the Transaction Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement resulted in additional fees to be paid and adjustments to the underlying interest rates. The Sprint Pre-Closing Financing was assumed by Clearwire on the Closing, as a result of the financing of the Sprint WiMAX Business operations by Sprint for the period from April 1, 2008 through the Closing, and added as an additional tranche of term loans under the Amended Credit Agreement. Pro forma interest expense was calculated over the period using the effective interest method resulting in an adjustment of $47.2 million for the three months ended March 31, 2008 based on an effective interest rate of approximately 14.0 percent. Pro forma interest expense also reflects an adjustment to accrete the debt to par value. Pro forma interest expense was calculated based on the contractual terms under the Amended Credit Agreement, assuming a term equal to its contractual maturity of 30 months and the underlying interest rate was the LIBOR loan base rate of 2.75 percent, as the 3 month LIBOR rate in effect at the Closing was less than the base rate, plus the applicable margin. The calculation assumed a current applicable margin of 6.00 percent and additional rate increases as specified in the Amended Credit Agreement over the term of the loan. A one-eighth percentage change in the interest rate would increase or decrease interest expense by $427,000 for the three months ended March 31, 2008. Total interest expense on a pro forma basis does not include an adjustment for capitalized interest.
(f)	Represents the adjustment to reflect the pro forma income tax expense for the three months ended March 31, 2008 which was determined by computing the pro forma effective tax rates for the three months ended March 31, 2008, giving effect to the Transactions. Clearwire expects to generate net operating losses into the foreseeable future and thus has recorded a valuation allowance for the deferred tax assets not expected to be realized. Therefore, for the three months ended March 31, 2008, no tax benefit was recognized.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)

(g) Represents the allocation of a portion of the pro forma combined net loss to the non-controlling interests in consolidated subsidiaries based on Sprint’s and the Investors’ (other than Google) ownership of the Clearwire Communications Class B Common Interests in Clearwire Communications upon Closing of the Transactions and reflects the contributions by CW Investment Holdings LLC and the Investors at $17.00 per share following the post-closing adjustment. This adjustment is based on pre-tax loss since income tax consequences associated with any loss allocated to the Clearwire Communications Class B Common Interests will be incurred directly by Sprint and the Investors (other than Google and CW Investment Holdings LLC).

(3) Pro Forma Loss per Share

     The Clearwire combined pro forma net loss per share presented below assumes the closing of the Transactions, the Clearwire Class A and B Common Stock and Clearwire Communications Class B Common Interests issued to Sprint, the Investors and CW Investment Holdings LLC were outstanding from January 1, 2008 and reflects the resolution of the post-close price adjustment at $17.00 per share. The shares of Clearwire Class B Common Stock have nominal equity rights. These shares have no right to dividends of Clearwire and no right to any proceeds on liquidation other than the par value of Clearwire Class B Common Stock.

The following table presents the pro forma number of Clearwire shares outstanding as if the Transactions had been consummated on January 1, 2008 (in thousands):

	Basic		Diluted
Clearwire Class A Common Stock held by existing stockholders(i)		164,484		164,484
Clearwire Class A Common Stock sold to Google(i)		29,412		29,412
Clearwire Class A Common Stock sold to CW Investment Holdings LLC(i)		588		588
Clearwire Class B Common Stock issued to Sprint(ii)		—		370,000
Clearwire Class B Common Stock sold to Comcast(ii)		—		61,765
Clearwire Class B Common Stock sold to Intel(ii)		—		58,823
Clearwire Class B Common Stock sold to Time Warner Cable(ii)		—		32,353
Clearwire Class B Common Stock sold to Bright House Networks(ii)		—		5,882
Weighted average Clearwire Class A Common Stock outstanding		194,484		723,307

(i)	Shares outstanding related to Clearwire Class A Common Stock held by Clearwire stockholders has been derived from the sum of the number of shares of Old Clearwire Class A Common Stock and Old Clearwire Class B Common Stock issued and outstanding at November 28, 2008, and subject to conversion of each share of Old Clearwire Class A Common Stock and Old Clearwire Class B Common Stock into the right to receive one share of Clearwire Class A Common Stock.
	The basic weighted average shares outstanding related to Clearwire Class A Common Stock are the shares issued in the Transactions and assumed to be outstanding for the entire period for which loss per share is being calculated.
	The computation of pro forma diluted Clearwire Class A Common Stock did not include the effects of the following options, restricted stock units and warrants as the inclusion of these securities would have been anti-dilutive (in thousands):

	As of
	November 28,
	2008
Stock options		18,431
Warrants		17,806
Restricted stock units		1,238
		37,475

(ii) Holders of Clearwire Class B Common Stock will be entitled at any time to exchange one share of Clearwire Class B Common Stock, in combination with one Clearwire Communications Class B Common Interest, for one share of Clearwire Class A Common Stock.

Shares of Clearwire Class B Common Stock have no impact on pro forma basic net loss per share because they do not participate in net income (loss) or distributions. However, the hypothetical exchange of Clearwire Communications Class B Common Interests

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

together with Clearwire Class B Common Stock for Clearwire Class A Common Stock may have a dilutive effect on pro forma diluted loss per share due to certain tax effects. As previously mentioned, that exchange would result in a decrease to the non-controlling interests and a corresponding increase in net loss attributable to the Clearwire Class A Common Stock. Further, to the extent that all of the Clearwire Communications Class B Common Interests and Clearwire Class B Common Stock are converted to Clearwire Class A Common Stock on a pro forma basis, the partnership structure is assumed to no longer exist and Clearwire would be required to recognize a tax charge related to indefinite lived intangible assets. Net loss available to holders of Clearwire Class A Common Stock, assuming conversion of the Clearwire Communications Class B Common Interests and Clearwire Class B Common Stock, is as follows (in thousands):

	Three Months Ended
	March 31,
	2008
Pro forma net loss	$	(76,439	)
Non-controlling interests in net loss of consolidated subsidiaries		(212,447	)
Less: Pro forma tax adjustment resulting from dissolution of Clearwire Communications LLC.		(6,083	)
Net loss available to Clearwire Class A Common Stockholders, assuming the exchange of Clearwire Class B to Clearwire Class A Common Stock	$	(294,969	)

The pro forma net loss per share available to holders of Clearwire Class A Common Stock on a basic and diluted basis is calculated as follows (in thousands, except per share amounts):

	Three Months Ended March 31, 2008
	Basic			Diluted
Pro forma net loss available Clearwire Class A Common Stockholders	$	(76,439	)	$	(294,969	)
Weighted average Clearwire Class A Common Stock outstanding		194,484			723,307
Basic and diluted pro forma net loss per share of Clearwire Class A Common Stock	$	(0.39	)	$	(0.41	)

Liquidity and Capital Resource Requirements

     At the Closing, we received an aggregate of $3.2 billion of cash proceeds from the Investors. We expect the cash proceeds from this investment to primarily be used to expand our mobile WiMAX network in the United States, for spectrum acquisitions, and for general corporate purposes. As of March 31, 2009, with the proceeds of the investment, we believe that we held sufficient cash, cash equivalents and marketable securities to cause our estimated liquidity needs to be satisfied for at least 12 months.

     We continue to target total net cash spend in the range of $1.5 to $1.9 billion for 2009. We are currently engaged in the development and construction of mobile WiMAX networks, as well as the long lead time cell site development work necessary, to give us the ability to potentially cover as many as 120 million people by the end of 2010. The ultimate scope and timing of our network build-out will largely be driven by our market by market success and the availability of additional capital.

     We regularly evaluate our plans and strategy, and these evaluations often result in changes, some of which may be material and may significantly increase or decrease our capital requirements. Changes in our plans and strategy may include, among other things, changes to the extent and timing of our network deployment, increases or decreases in the number of our employees, introduction of new features or services, investments in capital and network infrastructure, acquisitions of spectrum or any combination of the foregoing.

     To execute our plans to build out our nationwide network, we will likely seek additional capital in the near future and over the long term. Any additional debt financing would increase our future financial commitments, while any additional equity financing would be dilutive to our stockholders. This additional financing may not be available to us on favorable terms or at all. Our ability to obtain additional financing depends on several factors, including our market success as we deploy new mobile WiMAX markets, general economic conditions and the state of the capital markets, our future creditworthiness and restrictions contained in existing or future debt agreements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)

     In addition, recent distress in the financial markets has resulted in extreme volatility in security prices, diminished liquidity and credit availability and declining valuations of certain investments. Other than the impairment of our auction rate securities, we have assessed the implications of these factors on our current business and determined that there has not been a significant impact to our financial position or liquidity during the first quarter of 2009. If the national or global economy or credit market conditions in general were to deteriorate further in the future, it is possible that such changes could adversely affect our cash flows through increased interest costs or our ability to obtain additional external financing.

     If we are unable to obtain additional capital or the national or global economy or credit market conditions in general were to remain in their current distressed state or to deteriorate further in the future, we may be required to make material changes to our current plans and strategy.

As Reported Results — Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008

Cash Flow Analysis

     The following analysis includes our historical results of operations for the combined company for the three months of 2009 and the results of operations for the Sprint WiMAX Business for the first three months of 2008.

     The statement of cash flows includes the activities that were paid by Sprint on behalf of us prior to the closing of the Transactions. Financing activities include funding advances from Sprint through March 31, 2008. Further, the net cash used in operating activities and the net cash used in investing activities for capital expenditures and acquisitions of spectrum licenses and patents represent transfers of expenses or assets paid for by other Sprint subsidiaries.

     The following table presents a summary of our cash flows and beginning and ending cash balances for the three months ended March 31, 2009 and 2008 (in thousands):

	Three Months Ended March 31,
	2009			2008
Cash used in operating activities	$	(160,633	)	$	(82,265	)
Cash used in investing activities		(880,179	)		(342,929	)
Cash provided by financing activities		6,443			425,194
Effect of foreign currency exchange rates on cash and cash equivalents		(391	)		—
Total cash flows		(1,034,760	)		—
Cash and cash equivalents at beginning of period		1,206,143			—
Cash and cash equivalents at end of period	$	171,383		$	—

     Operating Activities

     Net cash used in operating activities was $160.6 million for the three months ended March 31, 2009. The cash used in operations is due primarily to payments for operating expenses, as we continue to expand and operate our business, and interest payments to service debt. This is partially offset by $62.6 million in cash received from subscribers.

     Net cash used in operating activities by the Sprint WiMAX Business was $82.3 million for the three months ended March 31, 2008.

     Investing Activities

     During the quarter ended March 31, 2009, net cash used in investing activities was $880.2 million. The net cash used in investing activities is due primarily to $966.8 million in cash paid for purchases of available-for-sale investments, $114.5 million in cash paid for property, plant and equipment and $4.6 million in payments for acquisition of spectrum licenses and other intangibles. These are partially offset by $200.0 million in sales of available-for-sale investments, a $3.7 million decrease in restricted cash and $2 million in proceeds from asset sales.

     During the three months ended March 31, 2008, net cash used by the Sprint WiMAX Business in investing activities was $342.9 million. The net cash used in investing activities is due to $258.6 million in cash paid for property, plant and equipment and $84.3 million in payments for acquisition of spectrum licenses and other intangibles.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)

     Financing Activities

     Net cash provided by financing activities was $6.4 million for the three months ended March 31, 2009. This is primarily due to $10.0 million in proceeds from the issuance of shares of Clearwire Class A common stock to CW Investments. This is partially offset by $3.6 million in payments on our Senior Term Loan Facility.

     Net cash provided by financing activities was $425.2 million for the Sprint WiMAX Business for the three months ended March 31, 2008. This was due to advances from Sprint to the Sprint WiMAX Busienss.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and changes in the market value of investments.

     Interest Rate Risk

     Our primary interest rate risk is associated with our Senior Term Loan Facility assumed at fair value as part of the Closing in the amount of $1.19 billion, net of discount, and the Sprint Tranche entered into on December 1, 2008, related to the reimbursement of $179.2 million of the Sprint Pre-Closing Financing Amount. We have a total outstanding principal balance of $1.41 billion, with a carrying value of $1.38 billion and an approximate fair market value of $1.32 billion at March 31, 2009. The rate of interest for borrowings under the Senior Term Loan Facility is the LIBOR base rate plus a margin of 6.00%, which base rate shall be no lower than 2.75% per annum or the alternate base rate, which is equal to the greater of (a) the Prime Rate or (b) the Federal Funds Effective rate plus ¹/2 of 1%, plus a margin of 5.00%, which base rate shall be no lower than 4.75% per annum. These margin rates increase by 50 basis points on each of the sixth, twelfth, and eighteen month anniversaries of the Closing. At our option, the accrued interest resulting from the margin increases will be payable in cash or payable in kind by capitalizing the additional interest and adding it to the outstanding principal amount of the Senior Term Loan Facility. On the second anniversary of the Closing, for LIBOR-based loans, the applicable margin rate will increase to 14.00% per annum and for alternate base rate loans the applicable margin rate will increase to 13.00% per annum. Interest is payable quarterly with respect to alternate base rate loans, and with respect to LIBOR-based loans, interest is payable in arrears at the end of each applicable period, but at least every three months. In addition, on the second anniversary of the Closing, we are required to pay an amount equal to 4.00% of the outstanding principal balance of the Senior Term Loan Facility. This fee will be paid in kind by capitalizing the amount of the fee and adding it to the outstanding principal amount of the Senior Term Loan Facility. Interest expense was calculated over the period using the effective interest. The current effective interest rate on our Senior Term Loan Facility was 13.87% at March 31, 2009. As of March 31, 2009, our Senior Term Loan Facility was paying interest on the LIBOR-based rate calculated at the LIBOR floor of 2.75% plus the applicable margin of 6.00%. A one percent increase in LIBOR above the floor would increase our annual interest expense by approximately $8.0 million per year. Since we are currently paying interest at the LIBOR floor, plus the applicable margin, we would not incur a decrease in our annual interest expense.

     Foreign Currency Exchange Rates

     We are exposed to foreign currency exchange rate risk as it relates to our international operations. We currently do not hedge our currency exchange rate risk and, as such, we are exposed to fluctuations in the value of the United States dollar against other currencies. Our international subsidiaries and equity investees generally use the currency of the jurisdiction in which they reside, or local currency, as their functional currency. Assets and liabilities are translated at exchange rates in effect as of the balance sheet date and the resulting translation adjustments are recorded within accumulated other comprehensive income (loss). Income and expense accounts are translated at the average monthly exchange rates during the reporting period. The effects of changes in exchange rates between the designated functional currency and the currency in which a transaction is denominated are recorded as foreign currency transaction gains (losses) and recorded in the consolidated statement of operations. We believe that the fluctuation of foreign currency exchange rates did not have a material impact on our consolidated financial statements.

     Investment Risk

     At March 31, 2009, we held available-for-sale short-term and long-term investments with a fair value of $2.68 billion and a cost of $2.68 billion, of which investments with a fair value and cost of $17.5 million were auction rate securities and investments with a fair value and a cost of $2.66 billion were U.S. government and agency issues. We regularly review the carrying value of our short-term and long-term investments and identify and record losses when events and circumstances indicate that declines in the fair value of such assets below our accounting basis are other-than-temporary. The estimated fair values of our investments are subject to

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)

fluctuations, some significant, due to volatility of the credit markets in general, company-specific circumstances, changes in general economic conditions and use of management judgment when observable market prices and parameters are not fully available.

     Auction rate securities are variable rate debt instruments whose interest rates are normally reset approximately every 30 or 90 days through an auction process. Our investments in auction rate securities represent interests in collateralized debt obligations, which we refer to as CDOs, supported by preferred equity securities of insurance companies and financial institutions with stated final maturity dates in 2033 and 2034. The total fair value and cost of our security interests in CDOs as of March 31, 2009 was $11.9 million. We also own auction rate securities that are Auction Market Preferred securities issued by a monoline insurance company and these securities are perpetual and do not have a final stated maturity. The total fair value and cost of our Auction Market Preferred securities as of March 31, 2009 was $5.6 million. These securities were rated BBB or Ba1 by Standard & Poor’s or Moody’s rating services, respectively, at March 31, 2009. Current market conditions are such that we are unable to estimate when the auctions will resume. As a result, our auction rate securities are classified as long-term investments.

     Derivative Instruments

     As part of the closing of the Transactions, we assumed two interest rate swap contracts that were entered into by Old Clearwire. In accordance with SFAS No. 133, we did not designate these swap agreements as hedges as of March 31, 2009. We are not holding these derivative contracts for trading or speculative purposes and continue to hold these derivatives to offset our exposure to interest rate risk.

     The following table sets forth information regarding our interest rate derivative contracts as of March 31, 2009 (in thousands):

Type of	Notional				Receive	Pay			Fair market
Derivative	Amount		Maturity Date		Index Rate	Fixed rate			Value
Swap	$	300,000		3/5/2010	3-month LIBOR		3.50	%		($6,547	)
Swap	$	300,000		3/5/2011	3-month LIBOR		3.62	%		($11,954	)

     In addition, we are exposed to certain losses in the event of non-performance by the counterparties under the interest rate derivative contracts. We expect the counterparties, which are major financial institutions, to perform fully under these contracts. However, if the counterparties were to default on their obligations under the interest rate derivative contracts, we could be required to pay the full rates on our debt, even if such rates were in excess of the rates in the interest rate swap contracts.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

     We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO), President, Chief Financial Officer (CFO) and Chief Accounting Officer (CAO), as appropriate, to allow timely decisions regarding required financial disclosure.

     Our management, under the supervision and with the participation of our CEO, President, CFO and CAO, has completed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, 2009. Based on our evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, our management, including our CEO, President, CFO and CAO, concluded that as of December 31, 2008, our disclosure controls and procedures were effective.

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PART II — OTHER INFORMATION

Item 1. 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 affected by increased litigation expense, significant settlement costs and/or unfavorable damage awards.

     On December 1, 2008, Adaptix, Inc., which we refer to as Adaptix, filed suit for patent infringement against us and Sprint in the U.S. District Court for the Eastern District of Texas, alleging that we and Sprint infringed six patents purportedly owned by Adaptix. On February 10, 2009, Adaptix filed an Amended Complaint alleging infringement of a seventh patent. Adaptix alleges that by offering mobile WiMAX services to subscribers in compliance with the 802.16 and 802.16e WiMAX standards, and by making, using and/or selling the supporting WiMAX network used to provide such WiMAX services, we and Sprint infringed the seven patents. Adaptix is seeking monetary damages, attorneys’ fees and a permanent injunction enjoining us from further acts of alleged infringement. On February 25, 2009, we filed an Answer to the Amended Complaint, denying infringement and asserting several affirmative defenses, including that the asserted patents are invalid. A trial is scheduled for December 2010, and the parties commenced discovery in early 2009.

     On May 7, 2008, Sprint filed an action in the Delaware Court of Chancery against iPCS, Inc., which we refer to as iPCS, and certain subsidiaries of iPCS, which we refer to as the iPCS Subsidiaries, seeking a declaratory judgment that, among other things, the Transactions do not violate iPCS’ and the iPCS Subsidiaries’ rights under their separate agreements with Sprint to operate and manage portions of Sprint’s PCS network in certain geographic areas. The Delaware case was later stayed by the Delaware court. On May 12, 2008, iPCS and the iPCS Subsidiaries filed a competing lawsuit in the Circuit Court of Cook County, Illinois, alleging that the Transactions would breach the exclusivity provisions in their management agreements with Sprint. On January 30, 2009, iPCS and the iPCS Subsidiaries filed an Amended Complaint seeking a declaratory judgment that the consummation of the Transactions violates their management agreements with Sprint, a permanent injunction preventing Sprint and its related parties, which iPCS alleges includes us, from implementing the Transactions and competing with Plaintiffs, and damages against Sprint for unlawful competition and costs and legal fees. No trial date in either case is currently scheduled. We are not named as a party in either litigation, but have received a subpoena from iPCS and iPCS Subsidiaries seeking documents and testimony. If iPCS prevails and obtains a permanent injunction and the Court deems us to be a related party under the management agreements then we may be restricted from competing with iPCS and iPCS Subsidiaries. We do not believe that the inability to offer services in iPCS’ coverage areas would have a material adverse effect on our business.

     On April 22, 2009, a purported class action lawsuit was filed against us in Superior Court in King County, Washington by a group of five plaintiffs from Hawaii, Minnesota, North Carolina and Washington. 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. We have not been served with the complaint. Due to the early stage of the lawsuit and the complexity of the factual and legal issues involved, its outcome is not presently determinable.

     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 is expected to have a material adverse effect on our business, financial condition or results of operations.

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CLEARWIRE CORPORATION AND SUBSIDIARIES

Item 1A. Risk Factors

     Our business is subject to many risks and uncertainties, which may materially and adversely affect our future business, prospects, financial condition and results of operations, including the risk factors set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

Item 2. Unregistered sales of Equity Securities and use of proceeds

     The information required by this section was previously provided in a Form 8-K filed on February 27, 2009.

Item 4. Submission of matters to a vote of security holders

None.

Item 5. Other information

None.

Item 6. Exhibits

41

CLEARWIRE CORPORATION AND SUBSIDIARIES

EXHIBIT INDEX

10.1	Customer Care and Billing Services Agreement dated March 31, 2009, between Clearwire US LLC and Amdocs Software Systems Limited (Incorporated herein by reference to Exhibit 10.42 to Clearwire Corporation’s Registration Statement on Form S-1/A filed on May 12, 2009).
31.1	Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule15d-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 Rule15d-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 Rule15d-14(a) and Section 906 of the Sarbanes Oxley Act of 2002.
32.2	Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule15d-14(a) and Section 906 of the Sarbanes Oxley Act of 2002.
99.1	Clearwire Corporation Financial Statements for the period ended March 31, 2008.

42

CLEARWIRE CORPORATION AND SUBSIDIARIES

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CLEARWIRE CORPORATION
Date: May 14, 2009	/s/ DAVID J. SACH
	David J. Sach
	Chief Financial Officer

43

EX-31.1

Exhibit 31.1

CERTIFICATION

I, William T. Morrow, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Clearwire Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant, and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 14, 2009	/s/ WILLIAM T. MORROW
	William T. Morrow
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, David J. Sach, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Clearwire Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant, and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s first fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 14, 2009	/s/ David J. Sach
	David J. Sach
	Chief Financial Officer

EX-32.1

Exhibit 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

In connection with the Quarterly Report of Clearwire Corporation (the “Company”) on Form 10-Q for the quarter ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William T. Morrow, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ WILLIAM T. MORROW  

William T. Morrow 

Chief Executive Officer
Clearwire Corporation 
May 14, 2009

EX-32.2

Exhibit 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

In connection with the Quarterly Report of Clearwire Corporation (the “Company”) on Form 10-Q for the quarter ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David J. Sach, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ David J. Sach  

David J. Sach 

Chief Financial Officer
Clearwire Corporation 
May 14, 2009

EX-99.1

EXHIBIT 99.1

Financial Statements & Footnotes for the Quarterly Period ended March 31, 2008

CLEARWIRE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

	March 31,			December 31,
	2008			2007
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	614,189		$	876,752
Short-term investments		110,602			67,012
Restricted cash		1,212			1,077
Accounts receivable, net of allowance of $1,720 and $787		3,898			3,677
Notes receivable, short-term		2,219			2,134
Inventory		2,955			2,312
Prepaids and other assets		36,509			36,748
Total current assets		771,584			989,712
Property, plant and equipment, net		601,012			572,329
Restricted cash		9,815			11,603
Long-term investments		81,029			88,632
Notes receivable, long-term		5,115			4,700
Prepaid spectrum license fees		483,995			457,741
Spectrum licenses and other intangible assets, net		495,940			480,003
Goodwill		38,293			35,666
Investments in equity investees		14,565			14,602
Other assets		29,965			30,981
TOTAL ASSETS	$	2,531,313		$	2,685,969
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	92,766		$	102,447
Deferred rent-current		597			24,805
Deferred revenue		11,098			10,010
Due to affiliate		—			2
Current portion of long-term debt		22,500			22,500
Total current liabilities		126,961			159,764
Long-term debt		1,231,250			1,234,375
Deferred tax liabilities		44,170			43,107
Other long-term liabilities		123,949			71,385
Total liabilities		1,526,330			1,508,631
MINORITY INTEREST		12,586			13,506
COMMITMENTS AND CONTINGENCIES (NOTE 10)
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.0001, 5,000,000 shares authorized; no shares issued or outstanding
Common stock, par value $0.0001, and additional paid-in capital, 350,000,000 shares authorized; Class A, 135,609,171 and 135,567,269 shares issued and outstanding		2,109,178			2,098,155
Class B, 28,596,685 shares issued and outstanding		234,376			234,376
Accumulated other comprehensive income, net		11,264			17,333
Accumulated deficit		(1,362,421	)		(1,186,032	)
Total stockholders’ equity		992,397			1,163,832
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,531,313		$	2,685,969

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

1

CLEARWIRE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)

	Three months ended
	March 31,
	2008			2007
REVENUES	$	51,528		$	29,275
OPERATING EXPENSES:
Cost of goods and services (exclusive of a portion of depreciation and amortization shown below)		38,174			16,735
Selling, general and administrative expense		99,109			68,657
Research and development		437			445
Depreciation and amortization		28,085			16,185
Spectrum lease expense		35,685			13,442
Total operating expenses		201,490			115,464
OPERATING LOSS		(149,962	)		(86,189	)
OTHER INCOME (EXPENSE):
Interest income		8,469			16,590
Interest expense		(28,594	)		(24,218	)
Foreign currency gains, net		525			33
Other-than-temporary impairment loss and realized loss on investments		(4,849	)		—
Other income (expense), net		(343	)		2,478
Total other expense, net		(24,792	)		(5,117	)
LOSS BEFORE INCOME TAXES, MINORITY INTEREST AND LOSSES FROM EQUITY INVESTEES		(174,754	)		(91,306	)
Income tax provision		(1,916	)		(603	)
LOSS BEFORE MINORITY INTEREST AND LOSSES FROM EQUITY INVESTEES		(176,670	)		(91,909	)
Minority interest in net loss of consolidated subsidiaries		1,237			892
Losses from equity investees		(956	)		(1,618	)
NET LOSS	$	(176,389	)	$	(92,635	)
Net loss per common share, basic and diluted	$	(1.08	)	$	(0.64	)
Weighted average common shares outstanding, basic and diluted		164,056			143,739

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

2

CLEARWIRE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(in thousands)
(unaudited)

	For the three months ended March 31,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(176,389	)	$	(92,635	)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for uncollectible accounts		1,419			661
Depreciation and amortization		28,085			16,185
Amortization of prepaid spectrum license fees		13,713			2,774
Amortization of deferred financing costs and accretion of debt discount		1,518			7,052
Share-based compensation		10,712			7,869
Other-than-temporary impairment loss on investments		4,849			—
Deferred income taxes		1,916			677
Non-cash interest on swaps		237			—
Minority interest		(1,237	)		(892	)
Losses from equity investees, net		956			1,618
Loss (gain) on other asset disposals		1,613			(5	)
Gain on sale of equity investment		—			(2,213	)
Changes in assets and liabilities, net:
Prepaid spectrum license fees		(39,967	)		(44,327	)
Inventory		(748	)		48
Accounts receivable		(1,578	)		(879	)
Prepaids and other assets		(6,485	)		(4,988	)
Accounts payable		1,598			2,855
Accrued expenses and other liabilities		10,055			(13,736	)
Due to affiliate		(2	)		(392	)
Net cash used in operating activities		(149,735	)		(120,328	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(53,072	)		(74,370	)
Payments for acquisitions of spectrum licenses and other		(13,111	)		(10,400	)
Purchases of available-for-sale investments		(99,308	)		(461,928	)
Sales or maturities of available-for-sale investments		55,200			512,415
Investments in equity investees		(760	)		—
Restricted cash		1,653			(926	)
Restricted investments		—			34,294
Proceeds from sale of equity investment and other assets		—			2,250
Net cash (used in) provided by investing activities		(109,398	)		1,335
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock for IPO and other, net		—			557,572
Proceeds from issuance of common stock for option and warrant exercises		335			1,546
Principal payments on long-term debt		(3,125	)		(625	)
Contributions from minority interests		—			15,000
Net cash (used in) provided by financing activities		(2,790	)		573,493
Effect of foreign currency exchange rates on cash and cash equivalents		(640	)		(90	)
Net (decrease) increase in cash and cash equivalents		(262,563	)		454,410
CASH AND CASH EQUIVALENTS:
Beginning of period		876,752			438,030
End of period	$	614,189		$	892,440
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Common stock and warrants issued for spectrum licenses	$	—		$	21,379
Common stock and warrants issued for business acquisitions		—			15
Cash paid for taxes		—			32
Cash paid for interest		32,218			39,170
Cashless option exercises		—			346
Fixed asset purchases in accounts payable		2,277			1,518
Non-cash dividends to related party		—			1,063

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

3

CLEARWIRE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)

	Class A				Class B				Accumulated
	Common Stock, Warrants and				Common Stock and				Other						Total
	Additional Paid In Capital				Additional Paid In Capital				Comprehensive			Accumulated			Stockholders’
	Shares		Amounts		Shares		Amounts		Income			Deficit			Equity
Balances at January 1, 2008		135,567	$	2,098,155		28,597	$	234,376	$	17,333		$	(1,186,032	)	$	1,163,832
Net loss		—		—		—		—		—			(176,389	)		(176,389	)
Foreign currency translation adjustment		—		—		—		—		12,492			—			12,492
Unrealized loss on investments		—		—		—		—		(8,881	)		—			(8,881	)
Reclassification adjustment for other-than-temporary impairment loss on investments		—		—		—		—		4,849			—			4,849
Unrealized loss on hedge activity		—		—		—		—		(14,529	)		—			(14,529	)
Options and warrants exercised		42		335		—		—		—			—			335
Share-based compensation		—		10,688		—		—		—			—			10,688
Balances at March 31, 2008		135,609	$	2,109,178		28,597	$	234,376	$	11,264		$	(1,362,421	)	$	992,397

See accompanying notes to Unaudited Condensed Consolidated Financial Statements

4

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Description of Business and Basis of Presentation

     The Business

     The condensed consolidated financial statements include the accounts of Clearwire Corporation, a Delaware corporation, and our wholly-owned and majority-owned or controlled subsidiaries (collectively “Clearwire”). We were formed on October 27, 2003 and we are an international provider of wireless broadband services. We deliver high-speed wireless broadband services to individuals, small businesses, and others in a number of markets through our advanced network. As of March 31, 2008, we offered our services in 46 markets throughout the United States and four markets internationally.

     Business Segments

     We comply with the requirements of Statement of Financial Accounting Standards (“SFAS”) No. 131, Disclosures about Segments of an Enterprise and Related Information (“SFAS No. 131”), which establishes annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and in assessing performance. Operating segments can be aggregated for segment reporting purposes so long as certain aggregation criteria are met. We define the chief operating decision makers as our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. See Note 14, Business Segments, for additional discussion.

     Basis of Presentation

     The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements have been condensed or omitted for interim financial information in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2007 (“Form 10-K”). In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments and accruals, necessary for a fair presentation of our financial condition, results of operations and cash flows for the periods presented.

     Principles of Consolidation — The condensed consolidated financial statements include all of the assets, liabilities and results of operations of our wholly-owned and majority-owned or controlled subsidiaries. Investments in entities that we do not control, but for which we have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method. All intercompany transactions are eliminated in consolidation.

     Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. The estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources, as well as identifying and assessing appropriate accrual and disclosure treatment with respect to commitments and contingencies. Actual results may differ significantly from these estimates. To the extent that there are material differences between these estimates and actual results, the presentation of the financial condition or results of operations may be affected.

5

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     Significant estimates inherent in the preparation of the accompanying financial statements include the valuation of investments, the valuation of derivative instruments, allowance for doubtful accounts, depreciation, the fair value of shares granted to employees and third parties, and the application of purchase accounting including the valuation of acquired assets, liabilities and spectrum licenses.

2. Significant Accounting Policies

     Significant Accounting Policies — Other than the adoption of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133”) and SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), discussed below, there have been no significant changes in our significant accounting policies during the three months ended March 31, 2008 as compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2007.

     Derivative Instruments

     SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133”), as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by SFAS 133, we record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. To qualify for hedge accounting, we must comply with the detailed rules and strict documentation requirements at the inception of the hedge, and hedge effectiveness is assessed at inception and periodically throughout the life of each hedging relationship. Hedge ineffectiveness, if any, is measured periodically throughout the life of the hedging relationship.

     In the normal course of business, we are exposed to the effect of interest rate changes. We have limited our exposure by adopting established risk management policies and procedures including the use of derivatives. It is our policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading.

     All derivatives are recorded at fair value on the balance sheet as either assets or liabilities. Each derivative is designated as either a cash flow hedge or a fair value hedge, or remains undesignated. Currently, we only have derivatives that are designated as cash flow hedges and which are effective. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income and reclassified to the statement of operations when the effects of the item being hedged are recognized.

     All designated hedges are formally documented as to the relationship with the hedged item as well as the risk management strategy. Both at inception and on an ongoing basis, the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer likely to occur, or the derivative is terminated, any changes in the derivative’s fair value, that will not be effective as an offset to the income effects of the item being hedged, will be recognized currently in the statement of operations.

     To determine the fair value of derivative instruments, we use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. For the majority of financial instruments, including most derivatives, standard market conventions and techniques such as discounted cash flow analysis, option pricing models, replacement cost and termination cost are used to determine fair value. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized. See Note 8, Derivative Instruments and Hedging Activities, for additional information regarding our derivative transactions.

     Financial Instruments

     On January 1, 2008, we adopted SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 clarifies the definition of fair value, prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value and expands disclosures about the use of fair value measurements. In

6

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

accordance with Financial Accounting Standards Board Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157 (FSP 157-2), we will defer the adoption of SFAS No. 157 for our nonfinancial assets and nonfinancial liabilities, except those items recognized or disclosed at fair value on an annual or more frequently recurring basis, until January 1, 2009.

     As defined in SFAS No. 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we use various methods including market, income and cost approaches. Based on these approaches, we utilize certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. These inputs can be readily observable, market corroborated, or generally unobservable inputs. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques we are required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.

     See Note 9, Fair Value Measurements, for further information regarding fair value measurements and our adoption of the provisions of SFAS No. 157.

     In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS No. 159”). SFAS No. 159 permits entities to choose, at specified election dates, to measure eligible items at fair value (“fair value option”) and to report in earnings unrealized gains and losses on those items for which the fair value option has been elected. SFAS No. 159 also requires entities to display the fair value of those assets and liabilities on the face of the balance sheet and establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. We have not adopted the fair value option for any financial assets or liabilities and, accordingly, the adoption of SFAS No. 159 did not have any impact on our condensed consolidated financial statements.

     Recent Accounting Pronouncements

     SFAS No.141(R) — In December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). In SFAS No. 141(R), the FASB retained the fundamental requirements of SFAS No. 141 to account for all business combinations using the acquisition method (formerly the purchase method) and for an acquiring entity to be identified in all business combinations. The new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; requires transaction costs to be expensed as incurred; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141(R) is effective for annual periods beginning on or after December 15, 2008. Accordingly, any business combinations we engage in will be recorded and disclosed following existing GAAP until January 1, 2009. We expect SFAS No. 141(R) will have an impact on our consolidated financial statements when effective, but the nature and magnitude of the specific effects will depend upon the nature, terms and size of the acquisitions we consummate after the effective date.

     SFAS No. 160 — In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS No. 160”). SFAS No. 160 amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, and requires all entities to report noncontrolling (minority) interests in subsidiaries within equity in the consolidated financial statements, but separate from the parent shareholders’ equity. SFAS No. 160 also requires any acquisitions or dispositions of noncontrolling interests that do not result in a change of control to be accounted for as equity transactions. Further, SFAS No. 160 requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS No. 160 is effective for annual periods beginning on or after December 15, 2008. We are currently evaluating whether the adoption of SFAS No. 160 will have a material impact on our financial statements.

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     SFAS No. 161— In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Management is currently evaluating the impact of this pronouncement on our financial statements.

     FSP No. 142-3 — In April 2008, the Financial Accounting Standards Board issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets (“FSP No. 142-3”). FSP No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The FSP is intended to improve the consistency between the useful life of an intangible asset determined under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141, Business Combinations (“SFAS 141”), and other US generally accepted accounting principles. FSP No. 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Management is currently assessing whether the adoption of FSP No. 142-3 will have a material impact on our financial statements.

3. Investments

     Investments as of March 31, 2008 and December 31, 2007 consist of the following (in thousands):

	March 31, 2008									December 31, 2007
	Gross Unrealized									Gross Unrealized
	Cost		Gains		Losses			Fair Value		Cost		Gains		Losses			Fair Value
Short-term
Commercial paper	$	6,000	$	—	$	—		$	6,000	$	7,500	$	—	$	—		$	7,500
Corporate bonds		4,994		9		—			5,003		7,970		15		—			7,985
US Government and Agency Issues		99,369		230		—			99,599		51,544		3		(20	)		51,527
Total	$	110,363	$	239	$	—		$	110,602	$	67,014	$	18	$	(20	)	$	67,012
Long-term
Auction rate securities	$	92,591	$	—	$	(11,562	)	$	81,029	$	95,922	$	—	$	(7,290	)	$	88,632
Total	$	92,591	$	—	$	(11,562	)	$	81,029	$	95,922	$	—	$	(7,290	)	$	88,632
Total Investments	$	202,954	$	239	$	(11,562	)	$	191,631	$	162,936	$	18	$	(7,310	)	$	155,644

     Marketable debt securities that are available for current operations are classified as short-term available-for-sale investments, and are stated at fair value. Auction rate securities without readily determinable market values are classified as long-term available-for-sale investments and are stated at fair value. Unrealized gains and losses that are deemed temporary are recorded as a separate component of accumulated other comprehensive income (loss). Realized losses are recognized when a decline in fair value is determined to be other-than-temporary, and both realized gains and losses are determined on the basis of the specific identification method.

     At March 31, 2008, we held available-for-sale short-term and long-term investments with a fair value of $191.6 million and a cost of $203.0 million. During the quarter ended March 31, 2008, we incurred other-than-temporary impairment losses of $4.8 million related to a decline in the estimated fair values of a number of our investment securities. Included in our investments were auction rate securities with a fair value of $81.0 million and a cost of $92.6 million as of March 31, 2008. There were no realized gains or losses from sales for the first quarters of 2008 and 2007.

     We estimated the fair value of securities without quoted market values using internally generated pricing models that require various inputs and assumptions. In estimating fair values of these securities, we utilize certain assumptions that market participants would use in pricing the investment, including assumptions about risk. These inputs are readily observable, market corroborated, or unobservable. We maximize the use of observable inputs to the pricing models where available and reliable. We 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. In these instances, fair value is determined by analysis of historical and forecasted cash flows, default probabilities and recovery rates, time value of money and discount rates considered appropriate given the level of risk in the security and associated investor yield requirements. These internally derived values are compared to independent values received from independent brokers for reasonableness. Our internally generated pricing models require us to use judgment in interpreting relevant market data, matters of uncertainty and matters that are inherently subjective in nature. The use of different judgments and

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

assumptions could result in different fair values and security prices could change significantly based on market conditions.

     Auction rate securities are variable rate debt instruments whose interest rates are reset approximately every 30 or 90 days through an auction process. The auction rate securities are classified as available-for-sale and are recorded at fair value. Beginning in August 2007, the auctions failed to attract buyers and sell orders could not be filled. Current market conditions are such that we are unable to estimate when the auctions will resume. When an auction fails, the security resets to a maximum rate as determined in the security documents. These rates vary from LIBOR + 84 basis points to LIBOR + 100 basis points. While we continue to earn interest on these investments at the maximum contractual rate, until the auctions resume, the investments are not liquid. We may not have access to these funds until a future auction on these investments is successful, a secondary market develops for these securities or the Underlying collateral matures. At March 31, 2008, the estimated fair value of these auction rate securities no longer approximated cost and we recorded other-than-temporary impairment losses on our auction rate securities of $3.3 million for the quarter ended March 31, 2008. For certain other auction rate securities, we recorded a net unrealized loss of $4.0 million in other comprehensive income reflecting the decline in the estimated fair value of these securities. We consider these declines in fair value to be temporary, given our consideration of the collateral underlying these securities and other factors. Additionally, we have the intent and ability to hold the investments until maturity or for a period of time sufficient to allow for any anticipated recovery in market value.

     Our investments in auction rate securities represent interests in collateralized debt obligations supported by preferred equity securities of small to medium sized insurance companies and financial institutions and asset backed capital commitment securities supported by high grade, short-term commercial paper and a put option from a monoline insurance company. These auction rate securities were rated AAA/Aaa or AA/Aa by Standard & Poors and Moody’s rating services at the time of purchase and their ratings have not changed as of March 31, 2008. With regards to the asset backed capital commitment securities, both rating agencies have placed the issuer’s ratings under review for possible downgrade.

     As issuers and counterparties to our investments announce financial results in the coming quarters and given current market volatility, it is possible that we may record additional other-than-temporary impairments as realized losses. We will continue to monitor our investments for substantive changes in relevant market conditions, substantive changes in the financial condition and performance of the investments’ issuers and other substantive changes in these investments.

     Current market conditions do not allow us to estimate when the auctions for our auction rate securities will resume, if ever, or if a secondary market will develop for these securities. As a result, our auction-rate securities are classified as long-term investments.

     In addition to the above mentioned securities, we hold one commercial paper security issued by a structured investment vehicle that defaulted in January 2008. The issuer invests in residential and commercial mortgages and other structured credits including sub-prime mortgages. At March 31, 2008, the estimated fair value of this security was $6.0 million based on our internally generated pricing models that consider the collateral underlying the structured investment vehicle and their estimated values. During the first quarter of 2008, we recognized other-than-temporary impairment losses of $1.5 million related to this commercial paper security.

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

4. Property, Plant and Equipment

     Property, plant and equipment as of March 31, 2008 and December 31, 2007 consisted of the following (in thousands):

	March 31,			December 31,
	2008			2007
Network and base station equipment	$	327,826		$	305,635
Customer premise equipment		99,709			89,120
Furniture, fixtures and equipment		62,865			55,548
Leasehold improvements		14,221			13,488
Construction in progress		247,937			233,120
		752,558			696,911
Less: accumulated depreciation and amortization		(151,546	)		(124,582	)
	$	601,012		$	572,329

     We follow the provisions of SFAS No. 34, Capitalization of Interest Cost, with respect to our owned FCC licenses and the related construction of our network infrastructure assets. Capitalization commences with pre-construction period administrative and technical activities, which includes obtaining leases, zoning approvals and building permits, and ceases when the construction is substantially complete and available for use, generally when a market is launched. Network and base station equipment is depreciated over a three to seven year period. Customer premise equipment (“CPE”) is depreciated over a two year period. Furniture, fixtures and equipment is depreciated over a three to five year period. We amortize our leasehold improvements over the estimated useful life of the assets or the lease term, whichever is less.

     Interest capitalized for the quarters ended March 31, 2008 and 2007 was $4.4 million and $3.9 million, respectively. Depreciation and amortization expense related to property, plant and equipment for the quarters ended March 31, 2008 and 2007 was $26.1 million and $15.0 million, respectively.

5. Spectrum Licenses, Goodwill, and Other Intangible Assets

     Purchased Spectrum Rights and other intangibles — Spectrum licenses, which are issued on both a site-specific and a wide-area basis, authorize wireless carriers to use radio frequency spectrum to provide service to certain geographical areas in the United States and internationally. These licenses are generally acquired by us either directly from the governmental authority in the applicable country, which in the United States is the Federal Communications Commission (“FCC”), or through a business combination or an asset purchase, and are considered indefinite-lived intangible assets, except for the licenses acquired in Poland, Spain, Germany and Romania, which are considered definite-lived intangible assets due to limited license renewal history within these countries.

     During the quarter ended March 31, 2008, we paid cash consideration of $13.1 million relating to purchased spectrum rights, compared to $14.5 million, which was comprised of $10.3 million in cash and $4.2 million in the form of warrants and common stock, for the quarter ended March 31, 2007.

     For the quarters ended March 31, 2008 and 2007, we recorded amortization of $1.9 million and $1.2 million, respectively, on spectrum licenses and other intangibles.

     Prepaid Spectrum License Fees — We also lease spectrum from third parties who hold the spectrum licenses. These leases are accounted for as executory contracts, which are treated like operating leases. Consideration paid to third-party holders of these leased licenses at the inception of a lease agreement is accounted for as prepaid spectrum license fees and is expensed over the term of the lease agreement, including expected renewal terms, as applicable.

     Cash consideration paid relating to prepaid spectrum license fees was $40.0 million for the quarter ended March 31, 2008, and $60.3 million, which was comprised of $43.2 million in cash and $17.1 million in the form of warrants and common stock for the quarter ended March 31, 2007.

     For the quarters ended March 31, 2008 and 2007, we recorded amortization of $13.7 million and $2.8 million, respectively, on prepayments related to leased spectrum.

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

6. Accounts Payable and Accrued Expenses

     Accounts payable and accrued expenses as of March 31, 2008 and December 31, 2007 consisted of the following (in thousands):

	March 31,		December 31,
	2008		2007
Accounts payable	$	49,472	$	47,865
Accrued interest		11,993		11,643
Salaries and benefits		13,371		17,697
Business and income taxes payable		6,193		9,299
Other		11,737		15,943
	$	92,766	$	102,447

7. Income Taxes

     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 a substantial portion of our deferred tax assets. The remaining deferred tax asset will be reduced by schedulable deferred tax liabilities. The net deferred tax liabilities are related to certain intangible assets, including certain spectrum assets, which are not amortized for book purposes.

8. Derivative Instruments and Hedging Activities

     During the first quarter of 2008, we, for the first time, entered into two interest rate swap contracts with two year and three year terms. We currently have variable rate debt tied to 3-month LIBOR in excess of the $600 million notional amount of interest rate contracts outstanding and Clearwire expects this condition to persist throughout the term of the contracts. In accordance with SFAS 133, we designated the interest rate swap agreements as cash flow hedges. At inception, the swap agreements had a fair value of zero.

     The following table sets forth information regarding our interest rate hedge contracts as of March 31, 2008 (in thousands):

	Notional				Receive	Pay			Fair Market
Type of Hedge	Amount		Maturity Date		Index Rate	Fixed Rate			Value
Swap	$	300,000		3/5/2010	3-month LIBOR		3.50	%	$	(6,622	)
Swap	$	300,000		3/5/2011	3-month LIBOR		3.62	%	$	(8,144	)

     The fair value of the two interest rate swaps are reported as an other long-term liability on our condensed consolidated balance sheet at March 31, 2008. Per the guidance of SFAS 157, we computed the fair value of the swaps using observed LIBOR rates and market interest rate swap curves which are deemed as Level 2 inputs in the fair value hierarchy. The effective portion of changes in the fair value of the swaps are initially reported in other comprehensive income and subsequently reclassified to earnings (“interest expense”) when the hedged transactions affect earnings. Ineffectiveness resulting from the hedge is recorded in the condensed consolidated statement of operations as part of other income or expense. We also monitor the risk of counterparty default on an ongoing basis.

     For the quarter ended March 31, 2008, the interest rate swaps had a fair value loss of $14.8 million, which is included in “Other Long-Term Liabilities” on our condensed consolidated balance sheet at March 31, 2008. The change in net unrealized gains/losses on cash flow hedges reported in accumulated other comprehensive income was $14.5 million during three months ended March 31, 2008. There were no net payments made to counterparties under interest rate hedge contracts during the three months ended March 31, 2008.

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     The change in net unrealized losses on cash flow hedges reflects a reclassification of $237,000 of net unrealized losses from accumulated other comprehensive income to interest expense during the first quarter of 2008. Amounts reported in accumulated other comprehensive income related to the interest rate swaps will be reclassified to interest expense as interest payments are made on the 3-month LIBOR variable-rate financing. We expect that the effective portion of the change in the fair value of the swaps recorded in accumulated other comprehensive income at March 31, 2008, which will be reclassified as interest expense within the next 12 months, will be approximately $3.4 million.

     As of March 31, 2008, no derivatives were designated as fair value hedges or undesignated. Additionally, we did not use derivatives for trading or speculative purposes. For the quarter ended March 31, 2008, we had no hedge ineffectiveness which required us to report other income or loss in the condensed consolidated statement of operations.

9. Fair Value Measurements

     As defined in SFAS No. 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we use various methods including market, income and cost approaches. Based on these approaches, we utilize certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. These inputs can be readily observable, market corroborated, or generally unobservable inputs. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques we are required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.

     In accordance with SFAS No. 157, it is our practice to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. When available, we use quoted market prices to measure fair value. If listed prices or quotes are not available, fair value is based upon internally developed models that primarily use, as inputs, market-based or independently sourced market parameters, including but not limited to interest rate yield curves, volatilities, equity or debt prices, and credit curves. We utilize certain assumptions that market participants would use in pricing the financial instrument, including assumptions about risk. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not fully available, management judgment is necessary to estimate fair value. In addition, changes in the market conditions may reduce the availability of quoted prices or observable data. In these instances, we 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 participant would use in pricing the security. These internally derived values are compared to values received from brokers or other independent sources for reasonableness.

     Following is a description of the valuation methodologies used for instruments measured at fair value, 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.

Investment Securities

     Where quoted prices for identical securities are available in an active market, securities are classified in Level 1 of the valuation hierarchy. Level 1 securities include U.S. Treasuries and highly liquid government and corporate bonds (including commercial paper) for which there are quoted prices in active markets. In certain cases where there is limited activity or less transparency around inputs to the valuation, investment securities are classified within Level 3 of the valuation hierarchy. For instance, in the valuation of failed auction rate securities and commercial paper in default, we have used the following assumptions and estimates:

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

• Fair values of auction rate securities collateralized by preferred debt and equity of financial institutions and insurance companies are determined by discounting forecasted cash flows at the LIBOR curve, adjusted for credit risk and liquidity. Forecasted cash flow assumptions include management’s estimate of the dividends paid to investors of the security, the probability of deferral of dividend payments as well as default and loss of the underlying financial institutions and insurance companies, and the probability of exercise of call options and final maturity of the bonds.

• For the fair values of auction rate securities containing a put option from a monoline insurance company, management assumes the put option is exercised and the value of the auction rate security is comparable to the value of the preferred debt of the monoline insurance company. The inputs include prices of exchange traded preferred debt of the monoline insurance company or other companies with comparable credit risk. Management assumptions include an estimate of dividends, probability of default and loss, and probability of exercise of call options and final maturity of the bonds.

• Fair value of Commercial Paper in default is determined by valuing the underlying assets of the structured investment vehicle. Underlying assets are grouped by investment type, credit rating, and estimated maturity or duration. The value of these groups of assets are estimated by comparing prices and spreads of recently traded securities of the same investment type, adjusted for credit and interest rate risk and liquidity.

Derivatives

     The two interest rate swap contracts entered into by the Company are “plain vanilla swaps” that use as their basis readily observable market parameters. Parameters are actively quoted and can be validated to external sources, including industry pricing services. These models do not contain a high level of subjectivity as the methodologies used in the models do not require significant judgment. The inputs include the contractual terms of the derivatives, including the period to maturity, payment frequency and day-count conventions, and market-based parameters such as interest rates and the credit quality of the counterparty. The swaps are classified as Level 2 of the valuation hierarchy.

Debt Instruments

     We have two liabilities, a $1.25 billion Credit Agreement dated as of July 3, 2007 and a loan from Bell Canada, Inc. (“Bell”). Interests in the Credit Agreement are actively exchanged by investors and we use the most recent price or indication of price where an investor is willing to purchase an interest in the Credit Agreement. This liability is classified in Level 1 of the valuation hierarchy.

     The Bell Canada loan is a private agreement and not a traded instrument. The critical terms of the loan are simple and are valued using market-standard discounted cash flow models that use as their basis readily observable market parameters. Parameters are actively quoted and can be validated to external sources. This loan is classified Level 2.

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     The following table summarizes our financial assets and liabilities by level within the valuation hierarchy at March 31, 2008.

					Quoted		Significant
					Prices in		Other		Significant
					Active		Observable		Unobservable
	Carrying		Total Fair		Markets		Inputs		Inputs
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Cash and cash equivalents	$	614,189	$	614,189	$	614,189	$	—	$	—
Short-term investments		110,602		110,602		104,602		—		6,000
Long-term investments		81,029		81,029		—		—		81,029
Financial liabilities:
Interest rate swaps	$	14,766	$	14,766	$	—	$	14,766	$	—
Debt		1,253,750		1,085,582		1,075,844		9,738		—

     The following tables provide 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):

	Fair Value
	Measurements at
	Using Significant
	Unobservable Inputs
	(Level 3)
Balance at January 1, 2008	$	96,132
Total losses included in:
Net loss		(4,849	)
Other comprehensive income		(4,272	)
Purchases, sales, issuances and settlements, net		—
Other		18
Balance at March 31, 2008	$	87,029

10. Commitments and Contingencies

     Our commitments for non-cancelable operating leases consist mainly of leased spectrum license fees, office space, equipment and certain of our network equipment situated on leased sites, including land, towers and rooftop locations. Certain of the leases provide for minimum lease payments, additional charges and escalation clauses. Leased spectrum agreements have initial terms of up to 30 years. Other operating leases generally have initial terms of five years with multiple renewal options for additional five-year terms totaling 20 to 25 years.

     In connection with various spectrum lease agreements we have commitments to provide Clearwire services to the lessors in launched markets, and reimbursement of capital equipment and third-party service expenditures of the lessors over the term of the lease. During the quarter ended March 31, 2008, we satisfied $1.2 million related to these commitments. The maximum remaining commitment at March 31, 2008 is $91.0 million and is expected to be incurred over the term of the related lease agreements, which range from 15-30 years.

     As of March 31, 2008, we have signed purchase agreements of approximately $51.0 million to acquire new spectrum, subject to closing conditions. These transactions are expected to be completed within the next twelve months.

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     Motorola Agreements — In August 2006, Clearwire and Motorola Inc. (“Motorola”) entered into commercial agreements pursuant to which we agreed to purchase certain infrastructure and supply inventory from Motorola. Under these agreements, we were committed to purchase no less than a total $150.0 million of network infrastructure equipment, modems, PC Cards and other products from Motorola on or before August 29, 2008, subject to Motorola continuing to satisfy certain performance requirements and other conditions. We are also committed to purchase certain types of network infrastructure products, modems and PC Cards exclusively from Motorola for a period of five years, which began August 29, 2006, and thereafter 51% until the term of the agreement is completed on August 29, 2014, as long as certain conditions are satisfied. For the three months ended March 31, 2008 and 2007, total purchases from Motorola under these agreements were $7.3 million and $12.0 million, respectively. For the period from the effective date of the agreement through March 31, 2008, total purchases from Motorola under these agreements were $105.7 million. The remaining commitment was $44.3 million at March 31, 2008.

     In the normal course of business, we are party to various pending judicial and administrative proceedings. While the outcome of the pending proceedings cannot be predicted with certainty, Management believes that any unrecorded liability that may result will not have a material adverse impact on our financial condition or results of operations.

11. Share-Based Payments

     On January 19, 2007, our Board of Directors adopted the 2007 Stock Compensation Plan (the “2007 Plan”), which authorizes us to grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock awards to our employees, directors and consultants. The 2007 Plan was adopted by our stockholders on February 16, 2007. There are 15,000,000 shares of Class A common stock authorized under the 2007 Plan. Options granted under the 2007 Plan generally vest ratably over four years and expire no later than ten years after the date of grant. In February 2008, the expiration date of all future options grants was changed from ten to seven years. As a result, all options granted after January 2008 will expire no later than seven years from the date of grant. Shares to be awarded under the 2007 Plan will be made available at the discretion of the Compensation Committee of the Board of Directors from authorized but unissued shares, authorized and issued shares reacquired and held as treasury shares, or a combination thereof. At March 31, 2008 there were 5,284,476 shares available for grant under the 2007 Stock Option Plan.

     Prior to the 2007 Plan, we had the following share-based arrangements: The Clearwire Corporation 2003 Stock Option Plan (the “2003 Stock Option Plan”) and The Clearwire Corporation Stock Appreciation Rights Plan (the “SAR Plan”). No additional stock options will be granted under our 2003 Stock Option Plan.

     We apply SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS No. 123(R)”), to new awards and to awards modified, repurchased, or cancelled after January 1, 2006. Share-based compensation expense is based on the estimated grant-date fair value and is recognized net of a forfeiture rate on those shares expected to vest over a graded vesting schedule on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards.

     Compensation cost recognized related to our share-based awards for the three months ended March 31, 2008 and 2007 was as follows (in thousands):

	Three months ended March 31,
	2008		2007
Cost of service	$	17	$	15
Selling, general and administrative		10,695		7,854
Total	$	10,712	$	7,869

Stock Options

     During the three months ended March 31, 2008, we granted 3,555,950 options at a weighted average exercise price of $16.65. During the three months ended March 31, 2007, we granted 2,869,913 options at a weighted average exercise price of $24.87. The fair value of each option granted during the three months ended March 31, 2008 and 2007 is estimated on the date of grant using the Black-Scholes option pricing model.

     As of March 31, 2008, a total of 19,093,428 options were outstanding at a weighted average exercise price of $14.88. We recognized $8.7 million and $7.5 million in stock-based compensation related to stock options in the three months ended March 31, 2008 and 2007, respectively. The total unrecognized share-based compensation costs related

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

to non-vested stock options outstanding at March 31, 2008 was $92.6 million and is expected to be recognized over a weighted average period of approximately two years.

     We also grant options to purchase our Class A common stock to non-employee consultants who perform services. These options are adjusted to current fair value each quarter during their vesting periods as services are rendered using the Black-Scholes option pricing model. During the three months ended March 31, 2008, we recognized $352,000 in expense related to these options. As of March 31, 2008 we have $33,000 of unamortized expense related to these options which is expected to be recognized over approximately one year. Expense for the three months ended March 31, 2007 was $104,000.

     The following variables were used in the Black-Scholes calculation for the three months ended March 31, 2008 and 2007:

	Three months ended March 31,
	2008			2007
Expected volatility		58.81% — 66.20	%		64.68	%
Expected dividend yield		—			—
Expected life (in years)		3.00 - 6.25			6.25
Risk-free interest rate		2.46% — 3.58	%		4.46% — 4.78	%
Weighted average fair value per option at grant date		$8.55			$15.96

     We grant stock options to employees of entities under common control who performed services to purchase shares of our Class A common stock. In accordance with Emerging Issues Task Force Issue No. 00-23, Issues Related to the Accounting for Stock Compensation Under APB No. 25, Accounting for Stock Issued to Employees, and FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, and SFAS No. 123(R), the fair value of such options is recorded as a dividend. We did not grant any stock options to employees of entities under common control in the three months ended March 31, 2008. In the three months ended March 31, 2007, we recorded dividends related to these stock option grants of $1.1 million.

     Restricted Stock Awards

     There were no grants of restricted stock during the three months ended March 31, 2008. Compensation expense related to restricted stock grants was $159,000 and $183,000 for the quarters ended March 31, 2008 and 2007, respectively. As of March 31, 2008, the number of restricted shares outstanding was 449,999 shares and there was $370,000 of total unrecognized compensation cost related to the unvested restricted stock, which is expected to be recognized over a weighted-average period of approximately two years.

     Restricted Stock Units

     During the three months ended March 31, 2008 there were grants of 360,000 restricted stock units. All restricted stock units vest over a four-year period. Under SFAS 123(R), the fair value of our restricted stock units is based on the grant-date fair market value of the common stock, which equals the grant date market price of $17.11 per share. Compensation expense related to the restricted stock units during the quarters ended March 31, 2008 and 2007 was $1.5 million and $0, respectively. As of March 31, 2008, there were 755,000 units outstanding and total unrecognized compensation cost of $12.4 million, which is expected to be recognized over a weighted-average period of approximately two years

Warrants

     There were no warrants granted during the three months ended March 31, 2008. At March 31, 2008 there were 17,806,220 warrants outstanding and exercisable with a weighted average exercise price of $16.57.

     The fair value of warrants granted is estimated on the date of grant using the Black-Scholes option pricing model using the following average assumptions for the three months ended March 31, 2008 and 2007:

	Three months ended March 31,
	2008		2007
Expected volatility		N/A		64.68% — 88.54	%
Expected dividend yield		N/A		—
Contractual life (in years)		N/A		5-10
Risk-free interest rate		N/A		3.05% — 4.81	%
Weighted average fair value per warrant at issuance date		N/A	$	12.07

16

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

12. Net Loss Per Share

     Basic and diluted loss per share has been calculated in accordance with SFAS No. 128, Earnings Per Share, for the three months ended March 31, 2008 and 2007. As we had a net loss in each of the periods presented, basic and diluted net loss per common share are the same.

     The computations of diluted loss per share for the three months ended March 31, 2008 and 2007 did not include the effects of the following options, shares of nonvested restricted stock, restricted stock units and warrants, as the inclusion of these securities would have been antidilutive (in thousands):

	Three months ended March 31,
	2008		2007
Stock options		17,697		13,943
Nonvested restricted stock		56		75
Restricted Stock Units		577		—
Warrants		17,806		18,905
		36,136		32,923

13. Comprehensive Loss

     Comprehensive loss consists of two components, net loss and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under generally accepted accounting principles are recorded as a component of stockholders’ equity but are excluded from net loss. Our other comprehensive income is comprised of foreign currency translation adjustments from our subsidiaries not using the U.S. dollar as their functional currency, unrealized gains and losses on marketable securities categorized as available-for-sale and unrealized gains and losses related to our cash flow hedge.

     Total comprehensive loss was $182.5 million and $91.4 million for the three months ended March 31, 2008 and 2007, respectively.

     The following table sets forth the components of comprehensive loss (in thousands):

	For the three months
	ended March 31,
	2008			2007
Net loss	$	(176,389	)	$	(92,635	)
Other comprehensive income (loss):
Net unrealized loss on available-for-sale investments		(8,881	)		(37	)
Reclassification adjustment for other-than-temporary impairment loss on investments		4,849
Net unrealized loss on available-for-sale investments		(4,032	)		(37	)
Derivatives designated as cash flow hedges		(14,766	)		—
Reclassification adjustment to expense		237			—
Net unrealized loss on derivative instruments		(14,529	)		—
Foreign currency translation adjustment		12,492			1,320
Total Other comprehensive (loss) income		(6,069	)		1,283
Total comprehensive loss	$	(182,458	)	$	(91,352	)

17

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

14. Business Segments

     We comply with the requirements of SFAS No. 131, which establishes annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and in assessing performance. Operating segments can be aggregated for segment reporting purposes so long as certain aggregation criteria are met. We define the chief operating decision makers as our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. As our business continues to mature, we will assess how we view and operate the business. We are organized into two reportable business segments: the United States and the International business.

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

	Three months ended March 31,
	2008			2007
United States
Revenues	$	42,302		$	23,104
Cost of goods and services (exclusive of items shown separately below)		34,694			14,070
Operating expenses		112,865			71,611
Depreciation and amortization		22,079			12,854
Total operating expenses		169,638			98,535
Operating loss		(127,336	)		(75,431	)
International
Revenues		9,226			6,171
Cost of goods and services (exclusive of items shown separately below)		3,480			2,665
Operating expenses		22,366			10,933
Depreciation and amortization		6,006			3,331
Total operating expenses		31,852			16,929
Operating loss		(22,626	)		(10,758	)
Total operating loss		(149,962	)		(86,189	)
Other income (expense)		(24,792	)		(5,117	)
Income tax provision		(1,916	)		(603	)
Minority interest in net loss of consolidated subsidiaries		1,237			892
Losses from equity investees		(956	)		(1,618	)
Net loss	$	(176,389	)	$	(92,635	)
Capital expenditures
United States	$	45,617		$	66,146
International		7,455			8,224
	$	53,072		$	74,370

	March 31,		December 31,
	2008		2007
Total assets
United States	$	2,283,143	$	2,444,341
International		248,170		241,628
	$	2,531,313	$	2,685,969

18

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

15. Related Party Transactions

     We have a number of strategic and commercial relationships with third-parties that have had a significant impact on our business, operations and financial results. These relationships have been with Eagle River Holdings, LLC (“ERH”), Motorola, Intel Corporation (“Intel”), Hispanic Information and Telecommunications Network, Inc. (“HITN”), ITFS Spectrum Advisors, LLC (“ISA”), ITFS Spectrum Consultants LLC (“ISC”) Bell, Danske Telecom A/S (“Danske”), and MVS Net S.A. de C.V. (“MVS Net”) all of which are or have been related parties. The following amounts for related party transactions are included in our condensed consolidated financial statements (in thousands):

	March 31,		December 31,
	2008		2007
Prepaids	$	1,751	$	14
Notes receivable, short-term		2,219		2,134
Notes receivable, long-term		5,115		4,700
Accounts payable and accrued expenses		7,107		4,521

	Three months ended March 31,
	2008		2007
Cost of service	$	856	$	728

     All purchases were made in the normal course of business at prices similar to those in transactions with third parties. Amounts outstanding at the end of the quarter are unsecured and will be settled in cash.

     Relationships among Certain Stockholders, Directors, and Officers of Clearwire — As of March 31, 2008, ERH is the holder of approximately 65% of our outstanding Class B common stock and approximately 13% of our outstanding Class A common stock. Eagle River Inc. (“ERI”) is the manager of ERH. Each entity is controlled by Craig McCaw. Mr. McCaw and his affiliates have significant investments in other telecommunications businesses, some of which may compete with us currently or in the future. Its likely Mr. Mc Caw and his affiliates will continue to make additional investments in telecommunications businesses.

     As of March 31, 2008 and December 31, 2007 ERH held warrants entitling it to purchase 613,333 shares of our Class A common stock. The exercise price of the warrant is $15.00 per share.

     For the three months ended March 31, 2007, ERH earned interest relating to our senior secured notes, retired in August 2007, in the amount of $633,000. ERH received payments in the amount of $1.3 million for accrued interest during the quarter ended March 31, 2007. As a result of the retirement, there was no interest recorded in the first quarter of 2008.

     Certain of our officers and directors provide additional services to ERH, ERI and their affiliates for which they are separately compensated by such entities. Any compensation paid to such individuals by ERH, ERI and/or their affiliates for their services is in addition to the compensation paid by us.

     Advisory Services Agreement and Other Reimbursements — Clearwire and ERI were parties to an Advisory Services Agreement, dated November 13, 2003 (the “Advisory Services Agreement”). Under the Advisory Services Agreement, ERI provided us with certain advisory and consulting services, including without limitation, advice as to the development, ownership and operation of communications services, advice concerning long-range planning and strategy for the development and growth of Clearwire, advice and support in connection with its dealings with federal, state and local regulatory authorities, advice regarding employment, retention and compensation of employees and assistance in short-term and long-term financial planning. The parties terminated this agreement effective January 31, 2007.

     During the three months ended March 31, 2007 we paid ERI fees of $67,000 of fees under the Advisory Services Agreement. In addition, we paid ERI expense reimbursements of $24,000 during the three months ended March 31, 2007.

     Pursuant to the origination of the Advisory Services Agreement in 2003, we issued to ERH warrants to purchase 375,000 shares of our Class A common stock at an exercise price of $3.00 per share, which may be exercised any time within 10 years of the issuance of the warrants. As of March 31, 2008, the remaining life of the warrants was 5.6 years.

19

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     Nextel Undertaking — Clearwire and Mr. McCaw entered into an agreement and undertaking in November 2003, pursuant to which we agreed to comply with the terms of a separate agreement between Mr. McCaw and Nextel Communications, Inc. (“Nextel”), so long as we were a “controlled affiliate” of Mr. McCaw as defined therein, certain terms of which were effective until October 2006. Under the agreement with Mr. McCaw, Nextel had the right to swap certain channels of owned or leased Broadband Radio Service (“BRS”) or Educational Broadband Service (“EBS”) spectrum with entities controlled by Mr. McCaw, including Clearwire. While the agreement was still effective, Nextel notified us of its request to swap certain channels, which is currently pending. There were no payments made to Nextel under this agreement through March 31, 2008.

     Intel Collaboration Agreement — On June 28, 2006, we entered into a collaboration agreement with Intel, to develop, deploy and market a co-branded mobile WiMAX service offering in the United States, that will target users of certain WiMAX enabled notebook computers, ultramobile PCs, and other mobile computing devices containing Intel microprocessors.

     Clearwire and Intel have agreed to share the revenues received from subscribers using Intel mobile computing devices on our domestic mobile WiMAX network. Intel will also receive a one time fixed payment for each new Intel mobile computing device activated on our domestic mobile WiMAX network once we have successfully achieved substantial mobile WiMAX network coverage across the United States. Through March 31, 2008, we have not been required to make any payments to Intel under this agreement.

     Motorola Agreements — Simultaneously with the sale of NextNet to Motorola, Clearwire and Motorola entered into commercial agreements pursuant to which we agreed to purchase certain infrastructure and supply inventory from Motorola. Under these agreements, we are committed to purchase no less than $150.0 million of network infrastructure equipment, modems, PC Cards and other products from Motorola on or before August 29, 2008, subject to Motorola continuing to satisfy certain performance requirements and other conditions. We are also committed to purchase certain types of network infrastructure products, modems and PC Cards it provides to its subscribers exclusively from Motorola for a period of five years, which began August 29, 2006 and, thereafter, 51% until the term of the agreement is completed on August 29, 2014, as long as certain conditions are satisfied. For the three months ended March 31, 2008 and 2007, total purchases from Motorola under these agreements were $7.3 million and $12.0 million, respectively. For the period from the effective date of the agreement through March 31, 2008, total purchases from Motorola under these agreements were $105.7 million. The remaining commitment was $44.3 million at March 31, 2008.

     HITN and its Affiliates — In November 2003, we entered into a Master Spectrum Agreement (“MSA”) with a third-party EBS license holder, HITN. The founder and president of HITN was formerly a member of our Board of Directors. The MSA provides for terms under which HITN leases excess capacity on certain of its EBS spectrum licenses to us. The licenses covered under the MSA include all of the spectrum rights acquired in the Clearwire Spectrum Corporation acquisition, plus access to an additional twelve markets in the United States. For each market leased by HITN to us under the MSA, Clearwire and HITN entered into a separate lease agreement which contains additional lease terms. The initial lease term is 15 years with one renewal for an additional 15 years. The MSA also provides for additional shares of Class A common stock to be issued to HITN upon Clearwire reaching certain financial milestones.

     In March 2004, the MSA with HITN was amended to provide, among other things, additional leased EBS spectrum capacity in an additional major metropolitan market. Clearwire and HITN also entered into a spectrum option agreement (the “Option Agreement”) whereby we have an option to enter into leases of spectrum for which HITN has pending EBS license applications upon grant of those licenses by the FCC. The lease terms and conditions would be similar to those under the MSA.

     Subsequent to the MSA, we entered into two other related agreements with ISA and ISC. The founder and president of HITN is an owner of ISA and ISC, which are also affiliates of HITN. The agreements provided for payment to be provided to ISA and ISC in the form of warrants to purchase additional shares of Class A common stock in exchange for ISA and ISC providing opportunities for us to purchase or lease additional spectrum. Each of the agreements specifies a maximum consideration available under the agreement and, in 2005, the maximum consideration under the agreement with ISA was reached. As of December 31, 2007 the maximum consideration under the agreement with ISC was reached.

20

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

     For the three months ended March 31, 2007, ISC earned $0 and received cash of $39,000. As of March 31, 2007, $23,000 was payable to ISC in warrants to purchase 1,307 shares of Class A common stock. There was no cash earned or paid to ISC for the three months ended March 31, 2008.

     Agreements with Bell Canada — In March 2005, Bell, a Canadian telecommunications company which is a subsidiary of BCE Inc. (“BCE”), purchased 8,333,333 shares of our Class A common stock for $100.0 million. At the time of the investment, Bell and BCE Nexxia, an affiliate of Bell, entered into a Master Supply Agreement (“Master Supply Agreement”) dated March 16, 2005 with Clearwire. Under the Master Supply Agreement, Bell and BCE Nexxia provide or arrange for the provision of hardware, software, procurement services, management services and other components necessary for us to provide Voice over Internet Protocol (“VoIP”) services to their subscribers in the United States and provide day-to-day management and operation of the components and services necessary for us to provide these VoIP services. We agreed to pay to Bell or BCE Nexxia a flat fee for each new subscriber of our VoIP telephony service. We have agreed to use Bell and BCE Nexxia exclusively to provide such service unless such agreement violates the rights of third parties under its existing agreements. Total fees paid for new subscribers under the Master Supply Agreement were $0 and $5,200 during the three months ended March 31, 2008 and 2007, respectively. Amounts paid for supplies, equipment and other services through Bell or BCE were $1.6 million and $3.2 million for the three months ended March 31, 2008 and 2007, respectively. The Master Supply Agreement can be terminated for convenience on twelve months notice by either party at any time beginning on or after October 1, 2007. On October 29, 2007, we delivered a notice of termination of the Master Supply Agreement to BCE Nexxia and the agreement should terminate on October 29, 2008 unless it is extended by the parties.

     As required under the Master Supply Agreement with Bell and BCE Nexxia and in order to assist funding capital expenses and start-up costs associated with the deployment of VoIP services, BCE agreed to make available to us financing in the amount of $10.0 million. BCE funded the entire amount on June 7, 2006. The loan is secured by a security interest in the telecommunications equipment and property related to VoIP and bears interest at 7.00% per annum and is due and payable in full on July 19, 2008. Interest expense recognized for this loan for the three months ended March 31, 2008 and 2007 was $196,000 and $181,000, respectively.

     Davis Wright Tremaine LLP— The law firm of Davis Wright Tremaine LLP serves as our primary outside counsel, and handles a variety of corporate, transactional, tax and litigation matters. Mr. Wolff, our Chief Executive officer, is married to a partner at Davis Wright Tremaine. As a partner, Mr. Wolff’s spouse is entitled to share in a portion of the firm’s total profits, although she has not received any compensation directly from us. For the three months ended March 31, 2008 and 2007 we paid $1.1 million and $1.3 million, respectively, to Davis Wright Tremaine for legal services.

21

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)

16. Subsequent Events

     On May 7, 2008, we entered into a Transaction Agreement and Plan of Merger (the “Transaction Agreement”) with Sprint Nextel Corporation (“Sprint”) to form a new public wireless communications company (“NewCo Corporation”). Under the Transaction Agreement, we will merge with and into a wholly owned subsidiary of a newly formed LLC (“NewCo LLC”) that will consolidate into NewCo Corporation. Sprint will contribute its spectrum and certain other assets associated with its WiMAX operations (the “Sprint Assets”), preliminarily valued at approximately $7.4 billion, into a separate wholly owned subsidiary of NewCo LLC. Following the merger and contribution of the Sprint Assets, Intel Corporation, (“Intel”), Google Inc., (“Google”), Comcast Corporation, (“Comcast”), Time Warner Cable Inc., (“Time Warner Cable”), and Bright House Networks, LLC, (“Bright House”) will invest a total of up to $3.2 billion into NewCo Corporation or NewCo LLC, as applicable. We refer to Intel, Google, Comcast, Time Warner Cable and Bright House as the “Investors.”

     In the merger, each share of Class A Common Stock of the Company will be converted into the right to receive one share of Class A Common Stock of NewCo Corporation, which shares are entitled to one vote per share and each option and warrant to purchase shares of the Class A Common Stock of the Company will be converted into one option or warrant, as applicable, to purchase the same number of shares of the Class A Common Stock of NewCo Corporation.

     The Investors will initially receive Class A or Class B stock in NewCo Corporation and non-voting equity interests in NewCo LLC, as applicable, based upon a $20 per share purchase price, but this is subject to post-closing adjustment based upon the trading prices of NewCo Corporation Class A common stock on the NASDAQ Stock Market over 15 randomly selected trading days during the 30-trading day period ending on the 90th day after the closing date. The final price per share will be based upon the volume weighted average price on such days and is subject to a cap of $23.00 per share and a floor of $17.00 per share. The aggregate number of shares and/or non-voting equity interests each Investor receives from its investment in NewCo Corporation and NewCo LLC, respectively, will be equal to its investment amount divided by such price per share. In a separate transaction to occur 90 days after closing, Trilogy Equity Partners will invest $10 million in the purchase of shares of Class A common stock on the same pricing terms as the other investors. Upon completion of the proposed transaction, Sprint will own the largest stake in the new company with approximately 51 percent equity ownership on a fully diluted basis assuming an investment price of $20.00 per share. The existing Clearwire shareholders will own approximately 27 percent and the new strategic investors, as a group, will be acquiring approximately 22 percent for their investment of $3.2 billion, both on a fully diluted basis assuming an investment price of $20.00 per share.

     In connection with our entering into the Transaction Agreement, we also expect to enter into several commercial agreements with Sprint and the Investors relating to, among other things, (i) the bundling and reselling of NewCo Corporation’s WiMAX service and Sprint’s third generation wireless services, the (ii) embedding of WiMAX chips into various devices, and (iii) the development of Internet services and protocols.

     Consummation of the Transactions are subject to various conditions, including the approval and adoption of the Transaction Agreement by our stockholders, the maintenance by Sprint and us of a minimum number of MHz-POPs coverage from their combined spectrum holdings, the effectiveness of a registration statement relating to the registration of the Class A Common Stock of NewCo Corporation, the receipt of the consent of the Federal Communications Commission to certain of the Transactions, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing conditions. The parlies expect the Transaction Agreement to close during the fourth quarter of 2008,

     The Transaction Agreement contains certain termination rights for Sprint, the Investors and us. In the event the Transaction Agreement is terminated under certain specified circumstances, we would be required to pay Sprint a termination fee of $60.0 million.

22