- Q1 Total Revenues of $318.0 Million Increased 2%
Sequentially, Down 1% Year Over Year
- Retail Subscribers Up 8% Sequentially and 10% Year Over
Year on Record Gross Additions
- Approximately 1,300 TDD-LTE Sites Commissioned at
Quarter-End; On Track to Meet 2,000 Site Milestone by End of June
2013
Clearwire Corporation (Nasdaq:CLWR), a leading provider of 4G
wireless broadband services in the U.S., today reported its
financial and operating results for first quarter 2013.
"Our ongoing focus on driving our retail business cash
contribution, controlling costs and maintaining
liquidity continues to yield results," said Erik Prusch,
President and CEO of Clearwire. "Our day-to-day focus on delivering
for our customers and the substantial progress on the TDD-LTE
network build demonstrate the company's commitment to execution
during this transition period."
First quarter 2013 total revenue increased 2% over fourth
quarter 2012 primarily due to sequential retail revenue growth. On
a year over year basis, total revenue declined 1% to $318.0
million, reflecting slight declines in both wholesale and retail
revenue over the prior year period. First quarter wholesale
revenue of $114.9 million declined 1% sequentially on lower revenue
related to the amortization of the second quarter 2011 Sprint
wholesale settlement (the "Sprint Settlement"). On a year over
year basis, wholesale revenue declined 2% primarily due to a
decrease in the non-Sprint wholesale customer base as well as lower
Sprint Settlement revenue. Wholesale revenue in first quarter 2013,
fourth quarter 2012 and first quarter 2012 reflect the fixed
wholesale WiMAX revenue terms of the November 2011 4G MVNO
Agreement with Sprint which will continue through 2013. Retail
revenue and other revenue increased 4% sequentially and decreased
1% year over year to $203.1 million in first quarter
2013. Retail average revenue per user (ARPU) was $43.49
representing sequential and year over year decreases of $(0.61) and
$(3.34), respectively, primarily due to lower equipment lease
revenue under the no-contract offering that was fully launched in
first quarter 2012.
Clearwire ended first quarter 2013 with approximately 9.4
million total subscribers. First quarter 2013 retail
subscribers increased 10% year over year and 8% sequentially to
approximately 1.5 million retail subscribers. Retail net
subscriber additions during the period were 108,000 reflecting 4.2%
churn and record gross additions of approximately
287,000. During the period, wholesale subscribers declined 18%
year over year and 3% sequentially on 270,000 wholesale net
subscriber losses to approximately 7.9 million wholesale
subscribers at the end of first quarter 2013. The decline in
wholesale subscribers, which consist primarily of Sprint 3G/4G
smartphone customers, is primarily due to the discontinuation of
postpaid WiMAX offerings by Sprint.
Retail cost per gross addition (CPGA) was a company record low
$143 in first quarter 2013 compared to $155 in fourth quarter 2012
and $242 in first quarter 2012. Both the sequential and year over
year improvements are primarily due to improved efficiencies in
retail selling expenses associated with our no-contract offering
and higher gross adds, partially offset by increased equipment
subsidies.
Excluding $9.3 million of merger-related expenses, first quarter
2013 Adjusted EBITDA loss was $(42.2) million. Inclusive of
merger-related expenses, Adjusted EBITDA loss in first quarter 2013
was $(51.5) million, representing a $(13.3) million increase
compared to first quarter 2012 Adjusted EBITDA loss of $(38.2)
million. The increase is primarily due to merger-related
expenses, as well as lower revenue and higher COGS (excluding
non-cash expenses) on a year over year basis.
Cash, cash equivalents and investments (invested primarily in
U.S. Treasury securities) as of March 31, 2013 was approximately
$797.4 million, a sequential decrease of $71.2 million from
December 31, 2012. The sequential decrease primarily reflects cash
payments for capital expenditures and operating expenses, which was
partially offset by $80 million drawn against the interim financing
facility provided by Sprint in conjunction with our merger
agreement, as well as payments from Sprint for wholesale WiMAX
services and cash inflows from our retail business. As compared to
March 31, 2012, cash, cash equivalents and investments decreased by
$635.1 million.
First quarter 2013 capex of $50 million increased $27 million
over prior year period capex of $23 million primarily due to
increased expenditures for Clearwire's TDD-LTE network
deployment. Compared to fourth quarter 2012 capex of $102
million, first quarter 2013 capex decreased $52 million primarily
due to a decline in network equipment received as compared to the
prior quarter.
At the end of first quarter 2013, Clearwire operated networks in
the U.S. covering areas where approximately 136 million people
reside, including approximately 134 million people in markets where
we provide 4G services. At the end of the period our TDD-LTE
network consisted of approximately 1,300 commissioned sites.
Results of Operations
Cost of goods and services and network costs (COGS) in first
quarter 2013 decreased 19% to $213.2 million compared to $263.8
million in first quarter 2012. These amounts include non-cash
charges for network equipment reserves and other write-downs of
$4.7 million and $56.4 million in first quarters 2013 and 2012,
respectively, and other non-cash network-related expenses of $17.7
million and $26.6 million in first quarters 2013 and 2012,
respectively. The year over year decrease in network equipment
reserves and other write-downs is primarily due to a decrease in
charges for network equipment not required to support our network
deployment plans or sparing requirements. The year over year
decrease in other non-cash network related expenses is primarily
due to a higher provision for unused tower-related leases and other
network agreements in first quarter 2012. Excluding non-cash
expenses, COGS increased 6% year over year primarily due to an
increase in customer premise equipment sales associated with our no
contract retail model, as well as higher tower- and network-related
expenses in conjunction with our ongoing LTE build.
Selling, general and administrative (SG&A) expense in first
quarter 2013 decreased slightly to $141.1 million from $142.7
million in first quarter 2012. The decrease is primarily
attributable to lower sales and marketing, call center and
facilities expenses, mostly offset by higher commissions,
employee-related costs and general and administrative expenses
related to the proposed merger with Sprint.
First quarter 2013 reported net loss from continuing operations
attributable to Clearwire was $(227.0) million, or $(0.33) per
basic share compared to $(182.1) million, or $(0.40) per basic
share, respectively in the prior year period. Including the
effects of discontinued operations, first quarter 2013 reported net
loss attributable to Clearwire was $(227.0) million, or $(0.33) per
basic share, compared to $(181.8) million or $(0.40), respectively
in the prior year period.
CLEARWIRE
CORPORATION |
SUMMARY FINANCIAL AND
OPERATING DATA FROM CONTINUING OPERATIONS |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
Three months
ended |
|
March 31, 2013 |
December 31,
2012 |
September 30,
2012 |
March 31, 2012 |
|
|
|
|
|
REVENUES: |
|
|
|
|
Retail revenue |
$ 202,997 |
$ 194,451 |
$ 197,215 |
$ 204,810 |
Wholesale revenue |
114,917 |
116,590 |
116,498 |
117,821 |
Other revenue |
128 |
200 |
169 |
8 |
Total revenues |
318,042 |
311,241 |
313,882 |
322,639 |
OPERATING EXPENSES: |
|
|
|
|
Cost of goods and services and network
costs (exclusive of items shown separately below) |
213,181 |
208,322 |
211,540 |
263,790 |
Selling, general and administrative
expense |
141,101 |
138,489 |
139,365 |
142,655 |
Depreciation and amortization |
183,633 |
194,873 |
210,781 |
177,973 |
Spectrum lease expense |
83,399 |
83,387 |
82,513 |
79,708 |
Loss from abandonment of network and
other assets |
414 |
(1,099) |
2,588 |
80,400 |
Total operating expenses |
621,728 |
623,972 |
646,787 |
744,526 |
OPERATING LOSS |
(303,686) |
(312,731) |
(332,905) |
(421,887) |
|
|
|
|
|
LESS NON-CASH ITEMS: |
|
|
|
|
Non-cash expenses |
63,413 |
70,041 |
67,310 |
66,664 |
Non-cash write-downs |
5,116 |
1,805 |
16,551 |
139,056 |
Depreciation and amortization |
183,633 |
194,873 |
210,781 |
177,973 |
Total non-cash items |
252,162 |
266,719 |
294,642 |
383,693 |
Adjusted EBITDA |
$ (51,524) |
$ (46,012) |
$ (38,263) |
$ (38,194) |
|
|
|
|
|
Adjusted EBITDA margin |
(16)% |
(15)% |
(12)% |
(12)% |
|
|
|
|
|
KEY OPERATING METRICS (k for '000's, MM for
'000,000's) |
|
|
|
|
Total net subscriber additions |
(162)k |
(906)k |
(468)k |
586k |
Wholesale |
(270)k |
(915)k |
(489)k |
537k |
Retail |
108k |
9k |
21k |
49k |
Total subscribers |
9,413k |
9,581k |
10,488k |
11,000k |
Wholesale (1) |
7,944k |
8,220k |
9,136k |
9,659k |
Retail |
1,469k |
1,361k |
1,353k |
1,341k |
Retail ARPU |
$43.49 |
$44.10 |
$45.06 |
$46.83 |
Churn |
|
|
|
|
Wholesale |
5.3 % |
7.3 % |
5.4 % |
3.0 % |
Retail |
4.2 % |
5.0 % |
5.1 % |
3.7 % |
Retail CPGA |
$143 |
$155 |
$191 |
$242 |
Capital expenditures |
$50MM |
$102MM |
$34MM |
$23MM |
Domestic 4G covered POPS |
134MM |
135MM |
133MM |
132MM |
Cash, cash equivalents and investments |
$797MM |
$869MM |
$1,184MM |
$1,433MM |
|
|
|
|
|
(1) Includes non-launched
markets. Based on the terms of the November 2011 Amended MVNO
Agreement between Clearwire and Sprint, which provides for
unlimited WiMAX service to Sprint retail customers in exchange for
fixed payments in 2012 and 2013, fluctuations in the wholesale
subscriber base will not necessarily correlate to wholesale
revenue. |
Management Webcast
Clearwire executives will host a conference call and
simultaneous webcast to discuss the company's first quarter 2013
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 1-877-392-9886, or from outside the U.S.
by dialing 1-707-287-9329, 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 April 25, through Thursday,
May 2, by calling 1-855-859-2056, or from outside the U.S. by
dialing 1-404-537-3406. The passcode for the replay is
36445633.
About Clearwire
Clearwire Corporation (Nasdaq:CLWR), through its operating
subsidiaries, is a leading provider of 4G wireless broadband
services offering services in areas of the U.S. where more than 130
million people live. The company holds the deepest portfolio of
wireless spectrum available for data services in the
U.S. Clearwire serves retail customers through its own CLEAR®
brand as well as through wholesale relationships with some of the
leading companies in the retail, technology and telecommunications
industries, including Sprint and NetZero. The company is
constructing a next-generation 4G LTE Advanced-ready network to
address the capacity needs of the market, and is also working
closely with the Global TDD-LTE Initiative to further the TDD-LTE
ecosystem. Clearwire is headquartered in Bellevue, Wash. Additional
information is available at http://www.clearwire.com.
Forward-Looking Statements
This release, and other written and oral statements made by
Clearwire from time to time, contain 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:
- Our business has become increasingly dependent on our wholesale
partners, and Sprint in particular. Additionally, our current
business plans depend on our ability to attract new wholesale
partners with substantial requirements for additional data
capacity, which is subject to a number of risks and uncertainties.
If we do not receive the amount of revenues we expect from existing
wholesale partners or if we are unable to enter into new agreements
with additional wholesale partners for significant new wholesale
commitments in a timely manner, our business prospects, results of
operations and financial condition could be adversely affected, or
we could be forced to consider all available alternatives,
including financial restructuring.
- If the proposed merger with Sprint fails to close for any
reason, we believe that we will require substantial additional
capital to fund our business and to further develop our network;
such capital may not be available on acceptable terms or at
all. If the merger fails to close and the funding under our
Note Purchase Agreement with Sprint was no longer available, we
would have to significantly curtail substantially all of our LTE
network build plan to conserve cash and there would likely be
substantial doubt about our ability to continue as a going
concern for the next twelve months. Additionally, if the proposed
merger with Sprint fails to close and we are unable to obtain
sufficient additional capital, or we fail to generate sufficient
revenue from our businesses to meet our ongoing obligations, our
business prospects, financial condition and results of operations
will likely be materially and adversely affected, and we will be
forced to consider all available alternatives, including financial
restructuring.
- We have a history of operating losses and we expect to continue
to realize significant net losses for the foreseeable future.
- Our substantial indebtedness and restrictive debt covenants
could limit our financing options and liquidity position and may
limit our ability to grow our business. Further, unless we are
able to secure the required shareholder approvals to increase the
number of authorized shares under our Certificate of Incorporation,
we may not have enough authorized but unissued shares available to
raise sufficient additional capital through an equity
financing.
- Sprint owns a majority of our common shares, is our largest
shareholder, and may have, or may develop in the future, interests
that may diverge from other stockholders.
- Our proposed merger with Sprint is subject to certain
regulatory conditions that may not be satisfied on a timely basis,
or at all, and is also conditioned on the consummation of the
Sprint-Softbank (or a similar merger) transaction. If the merger
with Sprint fails because it is not adopted by our shareholders,
then under certain circumstances Sprint may gain significant
additional control over us by acquiring the Clearwire shares held
by other parties to our Equityholders' Agreement, pursuant to the
terms of an agreement with those other shareholders. Additionally,
failure to complete the proposed merger could negatively impact our
business and the market price of our Class A Common Stock, and
substantial doubt may arise regarding our ability to continue as a
going concern.
- We are in the early stages of deploying LTE on our wireless
broadband network, alongside mobile WiMAX, to remain competitive
and to generate sufficient revenues for our business; we will incur
significant costs to deploy such technology. Additionally, LTE
technology, or other alternative technologies that we may consider,
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 add a
new technology to our current network and to operate dual
technology networks without disruptions to customer service, as
well as our ability to generate new wholesale customers for the new
network.
- We currently depend on our commercial partners to develop and
deliver the equipment for our legacy and mobile WiMAX networks, and
are dependent on commercial partners to deliver equipment and
devices for our planned LTE network as well.
- Many of our competitors for our retail business are better
established and have significantly greater resources, and may
subsidize their competitive offerings with other products and
services.
- 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 14, 2013, and subsequent SEC filings. Clearwire assumes
no obligation to update or supplement such forward-looking
statements.
CLEARWIRE CORPORATION
AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except
par value) |
(Unaudited) |
|
|
|
|
March 31, 2013 |
December 31,
2012 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 172,108 |
$ 193,445 |
Short-term investments |
625,297 |
675,112 |
Restricted cash |
1,641 |
1,653 |
Accounts receivable, net of allowance of
$2,400 and $3,145 |
19,769 |
22,769 |
Inventory |
16,098 |
10,940 |
Prepaids and other assets |
83,672 |
83,769 |
Total current assets |
918,585 |
987,688 |
Property, plant and equipment, net |
2,120,081 |
2,259,004 |
Restricted cash |
2,114 |
3,709 |
Spectrum licenses, net |
4,237,640 |
4,249,621 |
Other intangible assets, net |
21,576 |
24,660 |
Other assets |
137,601 |
141,107 |
Total assets |
$ 7,437,597 |
$ 7,665,789 |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued
expenses |
$ 285,723 |
$ 177,855 |
Other current liabilities |
279,001 |
227,610 |
Total current liabilities |
564,724 |
405,465 |
Long-term debt, net |
4,287,671 |
4,271,357 |
Deferred tax liabilities, net |
191,136 |
143,992 |
Other long-term liabilities |
913,772 |
963,353 |
Total liabilities |
5,957,303 |
5,784,167 |
Commitments and contingencies |
|
|
Stockholders' equity: |
|
|
Class A common stock, par value
$0.0001, 2,000,000 shares authorized; 699,172 and
691,315 shares outstanding |
70 |
69 |
Class B common stock, par value
$0.0001, 1,400,000 shares authorized; 773,733 shares
outstanding |
77 |
77 |
Additional paid-in capital |
3,217,732 |
3,158,244 |
Accumulated other comprehensive income
(loss) |
15 |
(6) |
Accumulated deficit |
(2,573,346) |
(2,346,393) |
Total Clearwire Corporation stockholders'
equity |
644,548 |
811,991 |
Non-controlling interests |
835,746 |
1,069,631 |
Total stockholders' equity |
1,480,294 |
1,881,622 |
Total liabilities and stockholders'
equity |
$ 7,437,597 |
$ 7,665,789 |
|
|
CLEARWIRE CORPORATION
AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
Three Months
Ended March 31, |
|
|
2013 |
2012 |
|
|
|
|
|
Revenues |
$ 318,042 |
$ 322,639 |
|
Operating expenses: |
|
|
|
Cost of goods and services and network
costs (exclusive of items shown separately below) |
213,181 |
263,790 |
|
Selling, general and administrative
expense |
141,101 |
142,655 |
|
Depreciation and amortization |
183,633 |
177,973 |
|
Spectrum lease expense |
83,399 |
79,708 |
|
Loss from abandonment of network and
other assets |
414 |
80,400 |
|
Total operating expenses |
621,728 |
744,526 |
|
Operating loss |
(303,686) |
(421,887) |
|
Other income (expense): |
|
|
|
Interest income |
378 |
264 |
|
Interest expense |
(140,517) |
(136,686) |
|
Loss on derivative instruments |
(1,774) |
(4,862) |
|
Other income (expense), net |
336 |
(13,268) |
|
Total other expense, net |
(141,577) |
(154,552) |
|
Loss from continuing operations before income
taxes |
(445,263) |
(576,439) |
|
Income tax (provision) benefit |
(16,625) |
15,413 |
|
Net loss from continuing operations |
(461,888) |
(561,026) |
|
Less: non-controlling interests in net loss
from continuing operations of consolidated subsidiaries |
234,935 |
378,972 |
|
Net loss from continuing operations
attributable to Clearwire Corporation |
(226,953) |
(182,054) |
|
Net loss from discontinued operations
attributable to Clearwire Corporation, net of tax |
— |
231 |
|
Net loss attributable to Clearwire
Corporation |
$ (226,953) |
$ (181,823) |
|
|
|
|
|
Net loss from continuing operations
attributable to Clearwire Corporation per Class A common
share: |
|
|
|
Basic |
$ (0.33) |
$ (0.40) |
|
Diluted |
$ (0.33) |
$ (0.44) |
|
|
|
|
|
Net loss attributable to Clearwire
Corporation per Class A common share: |
|
|
|
Basic |
$ (0.33) |
$ (0.40) |
|
Diluted |
$ (0.33) |
$ (0.44) |
|
|
|
|
|
Weighted average Class A common shares
outstanding: |
|
|
|
Basic |
693,901 |
458,827 |
|
Diluted |
693,901 |
1,298,530 |
|
|
|
CLEARWIRE CORPORATION
AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In
thousands) |
(Unaudited) |
|
|
|
|
Three Months
Ended March 31, |
|
2013 |
2012 |
Cash flows from operating activities: |
|
|
Net loss from continuing operations |
$ (461,888) |
$ (561,026) |
Adjustments to reconcile net loss to net cash
used in operating activities: |
|
|
Deferred income taxes |
16,194 |
(15,863) |
Non-cash loss on derivative
instruments |
1,774 |
4,862 |
Accretion of discount on debt |
12,593 |
10,188 |
Depreciation and amortization |
183,633 |
177,973 |
Amortization of spectrum leases |
13,212 |
14,216 |
Non-cash rent expense |
40,560 |
46,382 |
Loss on property, plant and
equipment |
5,116 |
139,056 |
Other non-cash activities |
9,644 |
18,696 |
Changes in assets and liabilities: |
|
|
Inventory |
(5,269) |
5,070 |
Accounts receivable |
844 |
(42,662) |
Prepaids and other assets |
1,695 |
(11,198) |
Deferred revenue |
(36,630) |
154,246 |
Accounts payable and other
liabilities |
113,429 |
119,897 |
Net cash (used in) provided by operating
activities of continuing operations |
(105,093) |
59,837 |
|
|
|
Net cash provided by operating activities of
discontinued operations |
— |
5,814 |
Net cash (used in) provided by operating
activities |
(105,093) |
65,651 |
Cash flows from investing activities: |
|
|
Payments to acquire property, plant and
equipment |
(37,510) |
(21,867) |
Purchases of available-for-sale
investments |
(249,988) |
(1,022,287) |
Disposition of available-for-sale
investments |
299,450 |
117,953 |
Other investing activities |
1,599 |
(845) |
Net cash provided by (used in) investing
activities of continuing operations |
13,551 |
(927,046) |
|
|
|
Net cash provided by investing activities of
discontinued operations |
— |
59 |
Net cash provided by (used in) investing
activities |
13,551 |
(926,987) |
Cash flows from financing activities: |
|
|
Principal payments on long-term debt |
(9,844) |
(6,295) |
Proceeds from issuance of long-term
debt |
80,000 |
300,000 |
Debt financing fees |
— |
(6,205) |
Proceeds from issuance of common stock |
46 |
— |
Net cash provided by financing activities of
continuing operations |
70,202 |
287,500 |
Net cash provided by financing activities of
discontinued operations |
— |
— |
Net cash provided by financing
activities |
70,202 |
287,500 |
Effect of foreign currency exchange rates on
cash and cash equivalents |
3 |
(2,269) |
Net decrease in cash and cash
equivalents |
(21,337) |
(576,105) |
Cash and cash equivalents: |
|
|
Beginning of period |
193,445 |
893,744 |
End of period |
172,108 |
317,639 |
Less: cash and cash equivalents of
discontinued operations at end of period |
— |
7,505 |
Cash and cash equivalents of continuing
operations at end of period |
$ 172,108 |
$ 310,134 |
|
|
Definitions of Terms
and Reconciliations of Non-GAAP Financial Measures to Unaudited
Condensed Consolidated Statements of Operations |
|
|
|
|
|
The company utilizes certain
non-GAAP 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). Other companies may calculate these measures
differently. |
|
|
|
|
|
(1) Adjusted
EBITDA is a non-GAAP financial measure. Adjusted EBITDA is
defined as consolidated operating loss excluding depreciation and
amortization expenses, non-cash expenses related to operating
leases (primarily towers, spectrum leases and buildings),
stock-based compensation expense, loss from abandonment of network
and other assets, charges for differences between recorded amounts
and the results of physical counts, and charges for excessive and
obsolete network equipment and CPE inventory. A reconciliation of
operating loss to Adjusted EBITDA is as follows: |
|
|
|
|
|
|
Three months
ended |
|
(Unaudited) |
|
March 31, 2013 |
December 31,
2012 |
September 30,
2012 |
March 31, 2012 |
|
|
|
|
|
(in thousands) |
|
|
|
|
Operating loss |
$ (303,686) |
$ (312,731) |
$ (332,905) |
$ (421,887) |
|
|
|
|
|
Non-cash expenses: |
|
|
|
|
Spectrum lease expense |
38,916 |
36,260 |
39,833 |
36,415 |
Building and network related expenses* |
14,856 |
25,256 |
18,741 |
24,183 |
Stock compensation and other* |
9,641 |
8,525 |
8,736 |
6,066 |
Non-cash expenses |
63,413 |
70,041 |
67,310 |
66,664 |
|
|
|
|
|
Non-cash write-downs: |
|
|
|
|
Loss from abandonment of network and other
assets |
414 |
(1,099) |
2,588 |
80,400 |
Network equipment reserves and other
write-downs* |
4,702 |
2,904 |
13,963 |
58,656 |
Non-cash write-downs |
5,116 |
1,805 |
16,551 |
139,056 |
|
|
|
|
|
Depreciation and amortization |
183,633 |
194,873 |
210,781 |
177,973 |
|
|
|
|
|
Adjusted EBITDA |
$ (51,524) |
$ (46,012) |
$ (38,263) |
$ (38,194) |
|
|
|
|
|
*Amounts included in COGS and
SG&A. |
|
|
|
|
|
In a capital-intensive industry,
management believes Adjusted EBITDA to be a meaningful measure of
the company's operating performance. The company provides this
non-GAAP measure 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, share-based
compensation, non-cash write-downs and depreciation and
amortization. Because this non-GAAP measure facilitates internal
comparisons of the company's historical operating performance,
management also uses this non-GAAP measure 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) Retail ARPU
(Average Revenue Per User) is total revenue less wholesale revenue,
the revenue generated from the sales of devices, shipping revenue,
and other revenue; divided by the weighted average number of retail
subscribers in the period, divided by the number of months in the
period. |
|
|
|
|
|
Management uses retail ARPU to
identify average revenue per customer, to track changes in average
retail customer revenues over time, to help evaluate how changes in
the business, including changes in the company's service offerings
and fees, affect average retail revenue per customer, and to assist
in forecasting future service retail revenue. In addition, retail
ARPU provides management with a useful measure to compare the
company's customer retail revenue to that of other wireless
communications providers. The company believes investors use retail
ARPU primarily as a tool to track changes in the company's average
retail revenue per customer and to compare Clearwire's per retail
customer service revenues to those of other wireless communications
providers. |
|
|
|
|
|
|
Three months
ended |
|
(Unaudited) |
|
March 31, 2013 |
December 31,
2012 |
September 30,
2012 |
March 31, 2012 |
(in thousands) |
|
|
|
|
Total revenues |
$ 318,042 |
$ 311,241 |
$ 313,882 |
$ 322,639 |
Wholesale revenue |
(114,917) |
(116,590) |
(116,498) |
(117,821) |
Device and other revenue |
(19,432) |
(15,763) |
(15,956) |
(20,718) |
Retail ARPU revenue |
$ 183,693 |
$ 178,888 |
$ 181,428 |
$ 184,100 |
|
|
|
|
|
Average retail customers |
1,408 |
1,352 |
1,342 |
1,310 |
Months in period |
3 |
3 |
3 |
3 |
Retail ARPU |
$ 43.49 |
$ 44.10 |
$ 45.06 |
$ 46.83 |
|
|
|
|
|
(3) Churn, which
measures customer turnover, is calculated as the number of
subscribers that terminate service in a given period, divided by
the weighted average number of subscribers in that period, divided
by the number of months in that period. Retail customers are
deactivated approximately 30 days after failing to pay their
monthly bill or when they ask to terminate their service. Retail
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 any of the churn
calculations. |
|
|
|
|
|
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) Retail CPGA
(Cost per Gross Addition) is selling, general and administrative
costs, less general and administrative costs and acquired
businesses costs (costs from entities that were acquired by
Clearwire's predecessor entity) plus device equipment subsidies,
divided by gross retail customer additions in the period. |
|
|
|
|
|
|
Three months
ended |
|
(Unaudited) |
|
March 31, 2013 |
December 31,
2012 |
September 30,
2012 |
March 31, 2012 |
(in thousands) |
|
|
|
|
Selling, general and administrative |
$ 141,101 |
$ 138,489 |
$ 139,365 |
$ 142,655 |
Less: G&A and other |
(106,972) |
(113,103) |
(104,720) |
(95,408) |
Selling expense |
34,129 |
25,386 |
34,645 |
47,247 |
Plus: Equipment COGS |
19,463 |
16,300 |
17,707 |
14,620 |
Less: Equipment revenue |
(12,417) |
(9,042) |
(9,396) |
(14,355) |
Total retail CPGA Expense |
$ 41,175 |
$ 32,644 |
$ 42,956 |
$ 47,512 |
|
|
|
|
|
Total gross adds |
287 |
211 |
225 |
196 |
Total retail CPGA |
$ 143 |
$ 155 |
$ 191 |
$ 242 |
|
|
|
|
|
Management uses retail 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 retail CPGA primarily as a tool to
track changes in the company's average cost of acquiring new
subscribers. |
CONTACT: Investor Relations:
Alice Ryder, 425-505-6494
alice.ryder@clearwire.com
Media Relations:
Susan Johnston, 425-505-6178
susan.johnston@clearwire.com
JLM Partners for Clearwire:
Mike DiGioia or Jeremy Pemble, 206-381-3600
mike@jlmpartners.com or jeremy@jlmpartners.com
Clearwire Corp. - Class A (MM) (NASDAQ:CLWR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Clearwire Corp. - Class A (MM) (NASDAQ:CLWR)
Historical Stock Chart
From Jul 2023 to Jul 2024