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Press release from GlobeNewswire (a Nasdaq OMX company)

Clearwire Reports Record Fourth Quarter and Full Year 2010 Growth

Thursday, February 17, 2011

Clearwire Reports Record Fourth Quarter and Full Year 2010 Growth13:00 EST Thursday, February 17, 20114G Network Now Reaches 119 Million People, Up 250% From Beginning of 2010Total Ending Subscribers of 4.4 Million, Up 540% From 688,000 Year Over YearFull Year Revenue $557 Million, 4Q Revenue $181 Million, Up 126% Year Over YearConsolidated 4Q Churn 2.1%, Improved From 3.6% Year Over Year 2011 Outlook to Double Subscriber Base Company Reiterates Support for Retail Distribution Model KIRKLAND, Wash., Feb. 17, 2011 (GLOBE NEWSWIRE) -- Clearwire (Nasdaq:CLWR), a leading provider of 4G wireless broadband services in the U.S., today reported its financial and operating results for the fourth quarter and full year 2010. "In 2010, we achieved our aggressive network expansion goals, grew our subscriber base at an incredible rate and solidified our position as a leader in the 4G industry in both network reach and customer growth," said Bill Morrow, Clearwire's CEO. "The Clearwire 4G mobile broadband network now reaches 119 million people in the U.S. and covers 71 of the top U.S. markets. Our network expansion represents one of the fastest in history, and unlike some wireless operators, our 4G network is highly scalable and backed by a wealth of spectrum. With recent projections estimating global mobile data traffic will nearly double annually through 2015, we believe more than ever that a deep spectrum position will be a requirement for long-term success in the high tonnage, video-enabled 4G world." "Clearwire is also one of the fastest growing companies in the wireless industry. With fourth quarter subscriber additions in excess of 1.5 million, we now serve over 4.4 million customers and expect continued strong subscriber growth to more than double our total subscriber base in 2011. Despite this strong growth, our current plans and funding dictate that we remain prudent with our spending. This year, we plan to focus on improving the operating performance of our business by aggressively growing our wholesale business and reducing expenses. We remain very committed to our retail distribution model as well, and plan to prudently pace our retail growth in an effort to maximize our financial resources. We currently believe that the actions we are taking will allow our existing business to achieve positive EBITDA during 2012 and potentially become cash flow positive thereafter without the need for additional funding. Significant network expansion in the near term, however, remains contingent upon additional funding." Clearwire ended the fourth quarter 2010 with approximately 4.4 million total subscribers, consisting of 1.1 million retail subscribers and 3.3 million wholesale subscribers. During the fourth quarter 2010, Clearwire added 1.5 million total net new subscribers, including 126,000 retail additions and 1.42 million wholesale additions. Approximately 27% of our wholesale subscribers are users of multi-mode 3G/4G devices residing in areas where the Company has not yet launched 4G service, but from whom it currently expects to receive nominal revenue. Revenue for the fourth quarter was $180.7 million, a 126% increase over fourth quarter 2009 revenue of $79.9 million. Consolidated average revenue per user (ARPU) was $16.07, composed of a record retail ARPU of $45.10 and wholesale ARPU of $3.52 in the fourth quarter. Reported wholesale ARPU was determined based only on the $26.2 million of wholesale revenue the Company recognized in the fourth quarter due to the Company's previously disclosed pricing disputes with Sprint. Over the past few weeks, Clearwire and Sprint have held a number of productive discussions about the outstanding wholesale pricing issues. While nothing has yet been finalized, the Company believes that an agreement with Sprint resolving those issues is imminent. Consolidated cost per gross subscriber addition (CPGA) was $60 in the fourth quarter, comprised of $422 CPGA from the retail business and no CPGA in the wholesale business. Consolidated monthly subscriber churn was 2.1% in the fourth quarter, consisting of 3.8% in the retail business and 1.4% in the wholesale business. Under the proposed terms, the Company expects to receive substantial additional wholesale revenue. The fourth quarter 2010 net loss attributable to Clearwire was ($128.0) million, or ($0.53) per basic share. The fourth quarter 2010 adjusted earnings before interest, taxes, depreciation and amortization and non-cash expenses related to operating leases and stock-based compensation expense (adjusted EBITDA) loss was ($497.4) million. The fourth quarter 2009 net loss attributable to Clearwire was ($98.7) million, or ($0.55) per basic share. The fourth quarter 2009 adjusted EBITDA loss was ($295.7) million. The full year 2010 net loss attributable to Clearwire was ($487.4) million, or ($2.19) per basic share. At the end of 2010, Clearwire operated networks covering areas where approximately 117 million people reside globally, including approximately 112 million people in 4G markets in the U.S. We ended 2010 with nearly 14,500 4G cell sites on air utilizing in excess of 50,000 10 MHz carriers. As of mid-February 2011, Clearwire's 4G networks in the U.S. reached 119 million people. Clearwire continues to seek additional funding to continue its network development by looking at a number of funding and other strategic alternatives, including potential strategic transactions, additional debt or equity financings and/or asset sales. In the second half of 2010, Clearwire initiated a process to seek bids for the potential sale of certain excess spectrum. During the process, the Company received offers to purchase varying amounts of spectrum from multiple parties, some of whom also expressed interest in exploring other strategic transactions with the Company. Currently, Clearwire is evaluating the offers received for its spectrum and is holding discussions with the interested parties. As a result, Clearwire has not yet made a determination as to whether to proceed with any sale and the Company now expects to delay a conclusion until second quarter 2011.2011 Outlook Clearwire expects to end 2011 with more than 8.8 million subscribers, with most of those subscribers coming from its wholesale business. Consolidated CPGA is estimated to fall to below $50 in 2011. The Company also expects to receive significantly higher wholesale ARPU in 2011. Without additional funding, the Company currently expects to cover approximately 130 million people with its 4G networks by the end of 2011, with new coverage focused primarily on rural areas where a build-out is required to protect its spectrum. Capital expenditures in 2011 are estimated to be less than $400 million. Under its current plans, the Company now expects to reach positive EBITDA during 2012.  However, this is based on a number of assumptions, including final resolution of the wholesale pricing disputes with Sprint and achieving the expected expense reductions.Results of Operations Cost of goods and services and network costs for the fourth quarter 2010 increased 63% to $275.6 million compared to $169.5 million for the fourth quarter 2009, primarily due to an increase in tower lease and backhaul expenses resulting from the launches of new 4G markets. During the three months ended December 31, 2010, the Company incurred approximately $55.2 million of expense related to excess and obsolete CPE, and write-offs of network base station equipment. Selling, General and Administrative (SG&A) expense for the fourth quarter 2010 increased 19% to $233.2 million compared to $196.3 million for the fourth quarter 2009. The increase is primarily due to higher sales and marketing and customer care expenses in support of the launch of new markets, as well as additional resources, headcount and shared services that Clearwire utilized as it launched its 4G markets during the fourth quarter of 2010. Loss from abandonment and impairment of network and other assets for the fourth quarter consists of approximately $168.8 million in write-offs related to abandonment of projects that no longer fit within management's strategic network plans. The abandoned projects were originally undertaken in connection with our network build-out that were not incorporated into our networks at launch and no longer fit within our future build plans.  Deceleration of network build activities led to a decrease in Capital Expenditures (CapEx) to $590 million in the fourth quarter 2010 from CapEx of $763 million for the third quarter 2010. CapEx was $2.7 billion for 2010. Cash utilization was approximately $2.1 billion for 2010 including net proceeds from financing activities of approximately $1.7 billion, primarily generated from the proceeds from the Senior Secured Notes, the Second-Priority Secured Notes and the Exchangeable Notes offerings completed in December 2010, as well as the Rights Offering completed in June 2010, and the final closing of the 2009 equity financing in the first quarter of 2010. The Company ended the fourth quarter 2010 with cash and investments of approximately $1.8 billion invested primarily in U.S. Treasury securities.Clearwire CorporationSummary of Financial Data(In thousands)(Unaudited)            Three months ended  December 31, September 30,June 30,  2010200920102010           REVENUES  $ 180,669  $ 79,915  $ 146,964  $ 122,521 OPERATING EXPENSES:         Cost of goods and services and network costs (exclusive of items shown separately below)  275,636  169,524  225,339  273,129 Selling, general and administrative expense   233,174  196,308  244,070  216,121 Depreciation and amortization   177,880  60,513  124,348  85,128 Spectrum lease expense  72,389  66,224  72,761  68,152 Loss from abandonment and impairment of network and other assets  168,808  5,010  20,173  760 Total operating expenses   927,887  497,579  686,691  643,290 OPERATING LOSS  (747,218)  (417,664)  (539,727)  (520,769)           LESS NON CASH ITEMS         Non Cash Expenses  71,946  61,408  84,716  72,396 Depreciation and amortization  177,880  60,513  124,348  85,128 Total non cash  249,826  121,921  209,064  157,524 ADJUSTED EBITDA  (497,392)  (295,743)  (330,663)  (363,245) Adjusted EBITDA Margin -275% -370% -225% -296%           KEY OPERATING METRICS (k for '000's, MM for '000,000's)         Total Net Subscriber Additions 1,542k 122k 1,227k 722k Wholesale 1,417k 35k 1,077k 595k Retail 126k 87k 150k 127k Total Subscribers 4,384k 688k 2,842k 1,692k Wholesale(1) 3,246k 46k 1,829k 752k Retail(2) 1,138k 642k 1,013k 940k Consolidated ARPU $16.07 $39.52 $21.19 $32.06 Wholesale $3.52  N/A $4.46 $4.87 Retail $45.10 $39.86 $42.74 $41.58 Consolidated Churn 2.1% 3.6% 2.3% 3.2% Wholesale 1.4%  N/A 1.3% 3.0% Retail  3.8% 3.6% 3.5% 3.2% Consolidated CPGA $60 $499 $92 $112 Wholesale  --   --   --   --  Retail  $422 $624 $505 $442 Capital Expenditures  $590MM   $767MM   $763MM   $622MM  Covered POPS   117.1MM   44.7MM   70.5MM   62.2MM  Cash, Cash Equivalents and Investments  $1,751MM   $3,892MM   $1,394MM   $2,272MM           (1) Includes non-launched markets.(2) During the year, the retail subscriber base was reduced by 67k to adjust for subscribers who have cancelled service but have not yet returned equipment and for aged involuntary deactivations, and 12k to remove subscribers who reside in Ireland, which was sold in July 2010.Management Webcast Clearwire executives will host a conference call and simultaneous webcast to discuss the Company's fourth quarter and full year 2010 financial results at 4:30 p.m. Eastern Time today. A live broadcast of the conference call will be available online on the Company's Investor Relations website located at: http://investors.clearwire.com. Interested parties can access the conference call by dialing 877.392.9886, or outside the United States at 707.287.9329, at least five minutes prior to the start time. A replay of the call will be available beginning at approximately 7:30 p.m. Eastern Time on February 17 until approximately 11:59 p.m. Eastern Time on March 3 by dialing 800.642.1687, or outside the United States by dialing 706.645.9291. The conference ID for the replay is 40334835.About Clearwire Clearwire Corporation (Nasdaq:CLWR), through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G network currently provides coverage in areas of the U.S. where approximately 119 million people live. Clearwire's open all-IP network, combined with significant spectrum holdings, provides an unprecedented combination of speed and mobility to deliver next generation broadband access. The company markets its 4G service through its own brand called CLEAR® as well as through its wholesale relationships with Sprint, Comcast and Time Warner Cable. Strategic investors include Intel Capital, Comcast, Sprint, Google, Time Warner Cable, and Bright House Networks. Clearwire is headquartered in Kirkland, Wash. Additional information is available at www.clearwire.com. Clearwire, CLEAR, and the CLEAR logo are trademarks or registered trademarks of Clearwire Communications LLC in the United States and/or other countries. All other company or product names are trademarks of their respective owners.Forward-Looking Statements This release, and other written and oral statements made by Clearwire from time to time, contains forward-looking statements which are based on management's current expectations and beliefs, as well as on a number of assumptions concerning future events made with information that is currently available. Forward-looking statements may include, without limitation, management's expectations regarding future financial and operating performance and financial condition; proposed transactions; network development and market launch plans; strategic plans and objectives; industry conditions; the strength of the balance sheet; and liquidity and financing needs. The words "will," "would," "may," "should," "estimate," "project," "forecast," "intend," "expect," "believe," "target," "designed," "plan" and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside of Clearwire's control, which could cause actual results to differ materially and adversely from such statements. Some factors that could cause actual results to differ are: We have a history of operating losses and we expect to continue to realize significant net losses for the foreseeable future. If our business fails to perform as we expect, we may require substantial additional capital, which may not be available on acceptable terms or at all. Our current plans, and our expectations about becoming EBITDA and cash flow positive, are based on a number of assumptions about our future performance, which may prove to be inaccurate, such as our ability to substantially expand our wholesale business and implement various cost savings initiatives. We regularly evaluate our plans, and we may elect to pursue new or alternative strategies which we believe would be beneficial to our business, including among other things, expanding our network coverage to new markets, augmenting our network coverage in existing markets, changing our sales and marketing strategy and or acquiring additional spectrum. Such modifications to our plans could significantly change our capital requirements. There are unresolved issues with Sprint relating to the application of existing wholesale pricing provisions under our commercial agreements. If we are unable to reach a resolution on these issues, or we end up receiving amounts that are less than expected, it could require us to revise our current business plans and projections and could also adversely affect our results of operations and financial condition. We have deployed a wireless broadband network based on mobile WiMAX technology, and would incur significant costs to deploy alternative technologies. Additionally, such alternative technologies may not perform as we expect on our network and deploying such technologies would result in additional risks to the company, including uncertainty regarding our ability to successfully transition from the current technology to the new technology without disruptions to customer service. We may experience difficulties in maintaining and upgrading our networks, which could adversely affect customer satisfaction, increase subscriber churn and costs incurred, and decrease our revenues. We currently depend on our commercial partners to develop and deliver the equipment for our legacy and mobile WiMAX networks. Many of our competitors are better established and have significantly greater resources, and may subsidize their competitive offerings with other products and services. Our substantial indebtedness and restrictive debt covenants could limit our financing options and liquidity position and may limit our ability to grow our business. Sprint Nextel Corporation owns a majority of our shares, resulting in Sprint holding a majority voting interest in the Company, and Sprint may have, or may develop in the future, interests that may diverge from other stockholders. Future sales of large blocks of our common stock may adversely impact our stock price. For a more detailed description of the factors that could cause such a difference, please refer to Clearwire's filings with the Securities and Exchange Commission, including the information under the heading "Risk Factors" in our Annual Report on Form 10-K filed on February 24, 2010 and our Quarterly Report on Form 10-Q filed on November 4, 2010. Clearwire assumes no obligation to update or supplement such forward-looking statements.CLEARWIRE CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except par value)(unaudited)        December 31,  20102009 ASSETS     Current assets:     Cash and cash equivalents   $ 1,233,562  $ 1,698,017 Short-term investments  502,316  2,106,661 Restricted cash  1,050  1,166 Accounts receivable, net of allowance of $4,313 and $1,956   26,187  6,253 Notes receivable  4,899  5,402 Inventory, net  17,432  12,624 Prepaids and other assets  80,155  46,466 Total current assets  1,865,601  3,876,589 Property, plant and equipment, net   4,464,534  2,596,520 Restricted cash  30,524  5,620 Long-term investments  15,251  87,687 Spectrum licenses, net  4,417,492  4,495,134 Other intangible assets, net  62,908  91,713 Investments in affiliates  14,263  10,647 Other assets  169,913  103,943 Total assets  $ 11,040,486  $ 11,267,853       LIABILITIES AND EQUITY           Current liabilities:     Accounts payable and accrued expenses  $ 455,890  $ 496,233 Other current liabilities  230,963  47,194 Total current liabilities  686,853  543,427 Long-term debt, net  4,017,019  2,714,731 Deferred tax liabilities, net  5,564  6,353 Other long-term liabilities   461,052  230,974 Total liabilities   5,170,488  3,495,485 Commitments and contingencies           Equity:     Clearwire Corporation stockholders' equity:     Class A common stock, par value $0.0001, 1,500,000 shares authorized;  243,544 and 196,767 shares issued and outstanding, respectively  24  20 Class B common stock, par value $0.0001, 1,000,000 shares authorized; 743,481 and 734,239 shares issued and outstanding, respectively  74  73 Additional paid-in capital  2,221,110  2,000,061 Accumulated other comprehensive income  2,495  3,745 Accumulated deficit  (900,493)  (413,056) Total Clearwire Corporation stockholders' equity  1,323,210  1,590,843 Non-controlling interests  4,546,788  6,181,525 Total equity  5,869,998  7,772,368 Total liabilities and equity  $ 11,040,486  $ 11,267,853    CLEARWIRE CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)  Three Months Ended December 31,  20102009       Revenues  $ 180,669  $ 79,915 Operating expenses:     Cost of goods and services and network costs (exclusive of items shown separately below)  275,636  169,524 Selling, general and administrative expense   233,174  196,308 Depreciation and amortization   177,880  60,513 Spectrum lease expense  72,389  66,224 Loss from abandonment and impairment of network and other assets  168,808  5,010 Total operating expenses   927,887  497,579 Operating loss  (747,218)  (417,664) Other income (expense):     Interest income  880  1,399 Interest expense   (67,999)  (13,233) Gain (loss) on derivative instruments  63,218  (2,138) Other income (expense), net   (1,691)  8,585 Total other income (expense), net   (5,592)  (5,387) Loss before income taxes  (752,810)  (423,051) Income tax benefit (provision)  864  (870) Net loss   (751,946)  (423,921) Less: non-controlling interests in net loss of consolidated subsidiaries  623,937  325,195 Net loss attributable to Clearwire Corporation  $ (128,009)  $ (98,726)       Net loss attributable to Clearwire Corporation per Class A Common Share:     Basic  $ (0.53)  $ (0.55) Diluted  $ (0.81)  $ (0.55)       Weighted average Class A Common Shares outstanding:     Basic  243,544  196,332 Diluted  1,011,395  808,789    CLEARWIRE CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)  Year Ended December 31,  20102009       Revenues  $ 556,826  $ 274,458 Operating expenses:     Cost of goods and services and network costs (exclusive of items shown separately below)  927,455  428,348 Selling, general and administrative expense   907,793  553,915 Depreciation and amortization   466,112  208,263 Spectrum lease expense  279,993  259,359 Loss from abandonment and impairment of network and other assets  190,352  7,916 Total operating expenses   2,771,705  1,457,801 Operating loss  (2,214,879)  (1,183,343) Other income (expense):     Interest income  4,965  9,691 Interest expense   (152,868)  (69,468) Gain (loss) on derivative instruments  63,255  (6,976) Other income (expense), net   (3,723)  (3,038) Total other income (expense), net   (88,371)  (69,791) Loss before income taxes  (2,303,250)  (1,253,134) Income tax benefit (provision)  156  (712) Net loss   (2,303,094)  (1,253,846) Less: non-controlling interests in net loss of consolidated subsidiaries  1,815,657  928,264 Net loss attributable to Clearwire Corporation  $ (487,437)  $ (325,582)       Net loss attributable to Clearwire Corporation per Class A Common Share:     Basic  $ (2.19)  $ (1.72) Diluted  $ (2.46)  $ (1.74)       Weighted average Class A Common Shares outstanding:     Basic  222,527  194,696 Diluted  970,765  741,071    CLEARWIRE CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)  Year Ended December 31,  20102009       Cash flows from operating activities:     Net loss   $ (2,303,094)  $ (1,253,846) Adjustments to reconcile net loss to net cash used in operating activities:     Deferred income taxes  (1,192)  712 Losses from equity investees, net   1,971  1,202 Non-cash gain on derivative instruments  (63,255)  (6,939) Other-than-temporary impairment loss on investments  --   10,015 Accretion of discount on debt  6,113  66,375 Depreciation and amortization  466,112  208,263 Amortization of spectrum leases  57,433  57,898 Non-cash rent expense  200,901  108,953 Share-based compensation   47,535  27,512 Loss on property, plant and equipment  349,512  60,874 Gain on extinguishment of debt  --   (8,252) Changes in assets and liabilities:     Inventory  (4,808)  (9,450) Accounts receivable  (20,104)  (2,381) Prepaids and other assets  (74,600)  (64,930) Prepaid spectrum licenses  (3,294)  (23,861) Accounts payable and other liabilities  172,057  355,371 Net cash used in operating activities   (1,168,713)  (472,484) Cash flows from investing activities:     Capital expenditures  (2,656,503)  (1,450,238) Payments for spectrum licenses and other intangible assets  (15,428)  (46,816) Purchases of available-for-sale investments  (2,098,705)  (3,571,154) Disposition of available-for-sale investments  3,776,805  3,280,455 Other investing   (19,387)  4,754 Net cash used in investing activities   (1,013,218)  (1,782,999) Cash flows from financing activities:     Principal payments on long-term debt  (876)  (1,171,775) Proceeds from issuance of long-term debt  1,413,319  2,467,830 Debt financing fees  (53,285)  (44,217) Equity investment by strategic investors  54,828  1,481,813 Proceeds from issuance of common stock  304,015  12,196 Net cash provided by financing activities  1,718,001  2,745,847 Effect of foreign currency exchange rates on cash and cash equivalents   (525)  1,510 Net decrease in cash and cash equivalents  (464,455)  491,874 Cash and cash equivalents:     Beginning of period   1,698,017  1,206,143 End of period   $ 1,233,562  $ 1,698,017 Supplemental cash flow disclosures:     Cash paid for interest including capitalized interest paid  $ 336,314  $ 119,277 Swap interest paid, net  $ --   $ 13,915 Non-cash investing activities:     Fixed asset purchases in accounts payable and accrued expenses  $ 120,025  $ 89,792 Fixed asset purchases financed by long-term debt  $ 133,288  $ --  Non-cash financing activities:     Vendor financing obligations  $ (60,251)  $ --  Capital lease obligations  $ (73,037)  $ -- Definition of Terms and Reconciliation of Non-GAAP Financial Measures to Unaudited Condensed Consolidated Statements of Operations The Company utilizes certain financial measures which are widely used in the telecommunications industry and are not calculated based on accounting principles generally accepted in the United States of America (GAAP). Certain of these financial measures are considered non-GAAP financial measures within the meaning of Item 10 of Regulation S-K promulgated by the SEC. Other companies may calculate these measures differently.(1) Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined as consolidated operating loss less depreciation and amortization expenses, non-cash expenses related to operating leases (towers, spectrum leases and buildings) and stock-based compensation expense. A reconciliation of operating loss to Adjusted EBITDA is as follows:  Three months ended  December 31,September 30,June 30,  2010200920102010(in thousands)(unaudited) Operating Loss  $ (747,218)  $ (417,664)  $ (539,727)  $ (520,769)           Non-Cash Expenses         Spectrum Lease Expense  32,156  27,780  24,300  19,204 Tower & Building Rents  32,625  30,323  50,640  42,298 Stock Compensation  7,165  3,305  9,776  10,894 Non-Cash Items Expense  71,946  61,408  84,716  72,396           Depreciation and amortization  177,880  60,513  124,348  85,128           ADJUSTED EBITDA  $ (497,392)  $ (295,743)  $ (330,663)  $ (363,245) In a capital-intensive industry, management believes Adjusted EBITDA, as well as the associated percentage margin calculation, to be meaningful measures of the Company's operating performance. The Company provides Adjusted EBITDA as a supplemental performance measure because management believes it facilitates comparisons of the Company's operating performance from period to period and comparisons of the Company's operating performance to that of other companies by backing out potential differences caused by non-cash expenses related to long-term leases, and share-based compensation. Because Adjusted EBITDA facilitates internal comparisons of the Company's historical operating performance, management also uses Adjusted EBITDA for business planning purposes and in measuring the Company's performance relative to that of its competitors. In addition, Clearwire believes that Adjusted EBITDA and similar measures are widely used by investors, financial analysts and credit rating agencies as a measure of the Company's financial performance over time and to compare the Company's financial performance with that of other companies in the industry.(2) ARPU is revenue comprised of total revenue, less: acquired businesses revenue (revenue from entities that were acquired by Old Clearwire), the revenue generated from the sales of devices, and shipping revenue; divided by the average number of subscribers in the period divided by the number of months in the period. Wholesale ARPU is wholesale revenue divided by the average number of wholesale subscribers in the period divided by the number of months in the period. Retail ARPU is retail revenue less: acquired businesses revenue (revenue from entities that were acquired by Old Clearwire), the revenue generated from the sales of devices, and shipping revenue; divided by the average number of retail subscribers in the period divided by the number of months in the period.  Three months ended  December 31,September 30,June 30,  2010200920102010(in thousands)(unaudited) Consolidated ARPU         Total Revenue  $ 180,669  $ 79,915  $ 146,964  $ 122,521 Acquired Companies & Other Revenue  (9,015)  (7,160)  (7,421)  (8,358) Consolidated ARPU Revenue  171,654  72,755  139,543  114,163           Wholesale ARPU Revenue  26,223  2,190  16,525  4,496 Retail ARPU Revenue  145,431  70,565  123,018  109,667 Consolidated ARPU Revenue  171,654  72,755  139,543  114,163           Average Customers  3,560  614  2,195  1,187 Months in Period  3  3  3  3 Consolidated ARPU  $ 16.07  $ 39.52  $ 21.19  $ 32.06                      Three months ended  December 31,September 30,June 30,  2010200920102010(in thousands)(unaudited) Wholesale ARPU Revenue  26,223  N/A   16,525  4,496           Average Wholesale Customers  2,485  N/A   1,236  308 Months in Period  3  N/A   3  3 Wholesale ARPU  $ 3.52  N/A   $ 4.46  $ 4.87                      Three months ended  December 31,September 30,June 30,  2010200920102010(in thousands)(unaudited) Retail ARPU Revenue  145,431  70,565  123,018  109,667           Average Retail Customers  1,075  590  959  879 Months in Period  3  3  3  3 Retail ARPU  $ 45.10  $ 39.86  $ 42.74  $ 41.58 Management uses ARPU to identify average revenue per customer, to track changes in average customer revenues over time, to help evaluate how changes in the business, including changes in the Company's service offerings and fees, affect average revenue per customer, and to assist in forecasting future service revenue. In addition, ARPU provides management with a useful measure to compare the Company's customer revenue to that of other wireless communications providers. The Company believes investors use ARPU primarily as a tool to track changes in the Company's average revenue per customer and to compare Clearwire's per customer service revenues to those of other wireless communications providers.(3) Churn, which measures customer turnover, is calculated as the number of subscribers that terminate service in a given month divided by the average number of subscribers in that month using the actual number of subscribers. Subscribers that discontinue service in the first 30 days of service for any reason, or in the first 90 days of service under certain circumstances, are deducted from the Company's gross customer additions and therefore not included in the churn calculation. Wholesale churn is calculated as the number of wholesale subscribers that terminate service in a given month divided by the average number of wholesale subscribers in that month using the actual number of wholesale subscribers. Retail churn is calculated as the number of retail subscribers that terminate service in a given month divided by the average number of retail subscribers in that month using the actual number of retail subscribers. Management uses churn to measure retention of the Company's subscribers, to measure changes in customer retention over time, and to help evaluate how changes in the business affect customer retention. The Company believes investors use churn primarily as a tool to track changes in the Company's customer retention. Other companies may calculate this measure differently.(4) CPGA (Cost per Gross Addition) is selling, general and administrative costs less general and administrative costs and acquired businesses costs, plus devices equipment subsidy, divided by gross customer additions in the period. Retail CPGA is selling, general and administrative costs less general and administrative costs and acquired businesses costs, plus devices equipment subsidy, divided by gross retail customer additions in the period.  Three months ended  December 31,September 30,June 30,  2010200920102010(in thousands)(unaudited) Consolidated CPGA         Selling, General and Administrative  $ 233,174  $ 196,308  $ 244,070  $ 216,121 G&A and Other  (127,788)  (102,716)  (117,782)  (122,284) Total Selling Expense  105,386  93,592  126,288  93,837           Total Gross Adds  1,771  187  1,375  835 Total Consolidated CPGA  $ 60  $ 499  $ 92  $ 112            Three months ended  December 31,September 30,June 30,  2010200920102010(in thousands)(unaudited) Retail CPGA         Selling, General and Administrative  $ 233,174  $ 196,308  $ 244,070  $ 216,121 G&A and Other  (127,788)  (102,716)  (117,782)  (122,284) Total Selling Expense  105,386  93,592  126,288  93,837           Total Retail Gross Adds  250  150  250  212 Total Retail CPGA  $ 422  $ 624  $ 505  $ 442 Management uses CPGA to measure the efficiency of the Company's customer acquisition efforts, to track changes in Clearwire's average cost of acquiring new subscribers over time, and to help evaluate how changes in the Company's sales and distribution strategies affect the cost-efficiency of the Company's customer acquisition efforts. Clearwire believes investors use CPGA primarily as a tool to track changes in the Company's average cost of acquiring new subscribers.CONTACT: Clearwire Corporation Investor Relations: Paul Blalock, 425-636-5828 paul.blalock@clearwire.com Media Relations: Susan Johnston, 425-216-7913 susan.johnston@clearwire.com JLM Partners for Clearwire Mike DiGioia or Jeremy Pemble, 206-381-3600 mike@jlmpartners.com or jeremy@jlmpartners.com