Sprint - Nextel 2012 Annual Report Download

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
-
K
For the fiscal year ended December 31, 2012
or
Commission file number 1-04721
SPRINT NEXTEL CORPORATION
(Exact name of registrant as specified in its charter)
Registrant's telephone number, including area code: (800) 829-0965
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No
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 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments
to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, 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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No
Aggregate market value of voting and non-voting common stock equity held by non-affiliates at June 30, 2012 was $9,762,996,418
COMMON SHARES OUTSTANDING AT FEBRUARY 25, 2013:
S 10-K 12/31/2012
Section 1: 10-K (FORM 10-K)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
KANSAS
(State or other jurisdiction of incorporation or organization)
6200 Sprint Parkway, Overland Park, Kansas
(Address of principal executive offices)
Title of each class
Name of each exchange on which registered
Series 1 common stock, $2.00 par value
New York Stock Exchange
Guarantees of Sprint Capital Corporation 6.875% Notes due 2028
New York Stock Exchange
Large accelerated filer
Accelerated filer
o
Non-accelerated filer (Do not check if smaller reporting company)
o
Smaller reporting company
o
VOTING COMMON STOCK
Series 1
3,010,769,241

Table of contents

  • Page 1
    ... fiscal year ended December 31, 2012 or 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 1-04721 SPRINT NEXTEL CORPORATION (Exact name of registrant as specified in its charter) KANSAS (State or...

  • Page 2

  • Page 3
    ... about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of...

  • Page 4
    ... trades on the New York Stock Exchange (NYSE) under the symbol "S." Sprint Nextel Corporation and its subsidiaries ("Sprint," "we," "us," "our" or the "Company") is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed...

  • Page 5
    ... million shares of Clearwire Corporation Class A Common Stock and 2.7 million shares of Clearwire Communications LLC Class B Interests, for a total purchase price of $100 million in cash. In addition, on December 17, 2012, Sprint entered into a merger agreement with Clearwire Corporation to acquire...

  • Page 6
    ... to specific subscriber segments. Boost Mobile serves subscribers who are voice and text messaging-centric with its popular Monthly Unlimited plan with Shrinkage service where bills are reduced after six â„¢ on-time payments. Virgin Mobile serves subscribers who are device and data-oriented with...

  • Page 7
    ... is expected to be shut-down by June 30, 2013, is an all-digital packet data network based on iDEN wireless technology provided by Motorola Solutions, Inc. We are the only national wireless service provider in the United States that utilizes this technology. Generally, Nextel platform devices are...

  • Page 8
    ...number of wireless carriers, including three other national wireless companies: AT&T, Verizon Wireless (Verizon) and T-Mobile. Our primary competitors offer voice, high-speed data, entertainment and location-based services and push-to-talk-type features that are designed to compete with our products...

  • Page 9
    ... long distance voice services have experienced an industry-wide trend of lower revenue from lower prices and increased competition from other wireline and wireless communications companies, as well as cable MSOs and Internet service providers. Some competitors are targeting the high-end data market...

  • Page 10
    ...our use of FCC licenses held by other persons and organizations; • govern the interconnection of our networks with other wireless and wireline carriers; • establish access and universal service funding provisions; • impose rules related to unauthorized use of and access to customer information...

  • Page 11
    ... the call is being made, or (b) the location of the subscriber's handset using latitude and longitude, depending upon the capability of the PSAP. Implementation of E911 service must be completed within six months of a PSAP request for service in its area, or longer, based on the agreement between...

  • Page 12
    ... end-use customers. Voice over Internet Protocol We offer VoIP-based services to business subscribers and transport VoIP-originated traffic for various cable companies. The FCC issued an order in late 2010 reforming, among other things, its regulatory structure governing intercarrier compensation...

  • Page 13
    ... proceedings to address issues of consumer protection, including the use of early termination fees, the FCC has opened an investigation into "bill shock" concerning overage charges for voice, data and text usage, and the FCC has proposed new rules to address cramming. The wireless industry has...

  • Page 14
    ...2011 order, the FCC also adopted new rules requiring local exchange carriers (LECs) to lower their rates when they meet certain traffic pumping "triggers." Traffic pumping occurs predominantly in rural exchanges that have very high access charges. Under traffic pumping arrangements, the LECs partner...

  • Page 15
    ... be accessed free of charge on our website at the following address: www.sprint.com/governance. Copies of any of these documents can be obtained free of charge by writing to: Sprint Nextel Shareholder Relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B424, Overland Park, Kansas 66251 or by email...

  • Page 16
    ... increase in our churn rates if we are not successful in providing an attractive product and service mix. Moreover, service providers frequently offer wireless equipment, such as devices, below acquisition cost as a method to retain and attract subscribers that enter into wireless service agreements...

  • Page 17
    ...Sprint Corporation (New Sprint). Under the terms of the Merger Agreement, in certain circumstances Sprint may be required to pay to SoftBank a termination fee of $600 million, or to pay certain fees of the SoftBank Entities up to a maximum of $75 million, in connection with termination of the Merger...

  • Page 18
    ... the current market price of Sprint common stock reflects an assumption that the SoftBank Merger, the Clearwire Acquisition and the respective related transactions will be completed. In addition, upon termination of the Merger Agreement, under specified circumstances (including in connection with...

  • Page 19
    ... Merger Agreement and SoftBank will be required to pay Sprint a $600 million reverse termination fee if (a) the SoftBank Merger is not consummated within 11 business days following Sprint's notice to SoftBank that all conditions to closing have been satisfied or (b) during the 30 business day period...

  • Page 20
    ...for commercial wireless services and as new technologies are developed and launched. As smartphone penetration increases, Sprint continues to expect an increased usage of data on Sprint's network. Competition in pricing and service and product offerings may also adversely impact subscriber retention...

  • Page 21
    ... or products and services not offered by Sprint, coverage in areas not served by Sprint's wireless networks or pricing plans that are lower than those offered by Sprint, all of which would negatively affect Sprint's average revenue per subscriber, subscriber churn, ability to attract new subscribers...

  • Page 22
    ... to successfully design, build and deploy Sprint's LTE network, or a loss of or inability to access Clearwire's spectrum could increase subscriber losses, increase Sprint's costs of providing services or increase Sprint's churn. Other competing technologies may have advantages over Sprint's current...

  • Page 23
    ... in Sprint's subscriber base, including its rate of churn; • the cost and availability or perceived availability of additional capital and market perceptions relating to Sprint's access to this capital; • announcements by Sprint or its competitors of acquisitions, new products, technologies...

  • Page 24
    ... will be required to make in order to develop and provide these technologies, products or services. To the extent Sprint does not keep pace with technological advances or fails to timely respond to changes in the competitive environment affecting Sprint's industry, Sprint could lose market share or...

  • Page 25
    ... case additional cash and/or non-cash charges that could be material to Sprint's consolidated financial statements would be recognized. Sprint accounts for Sprint's current investment in Clearwire using the equity method of accounting and, as a result, it records its share of Clearwire's net income...

  • Page 26
    ... of the FCC's 2011 order reforming universal service for high cost area and intercarrier compensation could affect the intercarrier compensation rates and the level of USF contributions paid by Sprint. Various states are considering regulations over terms and conditions of service, including certain...

  • Page 27
    ..., disclosed, accessed or taken without the subscribers' consent. In addition, Sprint and third-party service providers process and maintain its proprietary business information and data related to its business-to-business customers or suppliers. Sprint's information technology and other systems that...

  • Page 28
    ... 17, 2012, Sprint announced that it had agreed to acquire all of the equity interests of Clearwire Corporation not currently owned by Sprint subject to the terms and conditions of the Clearwire Acquisition Agreement. The following are certain additional risks that relate to the Clearwire Acquisition...

  • Page 29
    ... some of Sprint's subscribers use Clearwire's 4G network, Sprint's business, financial condition, results of operations or cash flows. In addition, the corporate opportunity provisions in Clearwire's certificate of incorporation provide that unless a director is an employee of Clearwire, the person...

  • Page 30
    ... and new service offerings could result in network degradation or the loss of subscribers. In addition, the technology Sprint currently uses, including WiMAX, may place Sprint at a competitive disadvantage." If Clearwire fails to obtain additional capital on commercially reasonable terms, or...

  • Page 31
    ...: 2012 (in billions) Wireless Wireline Corporate and other Total $ 40.8 4.7 2.4 $ 47.9 Properties utilized by our Wireless segment generally consist of base transceiver stations, switching equipment and towers, as well as leased and owned general office facilities and retail stores. We lease...

  • Page 32
    ... of Clearwire Corporation, asserting claims for breach of fiduciary duty by Sprint, and related claims and otherwise challenging the Clearwire Acquisition. There are four suits pending in Chancery Court in Delaware: Crest Financial Limited v. Sprint Nextel Corp., et al., filed on December 12, 2012...

  • Page 33
    ...Common Share Data The principal trading market for our Series 1 common stock is the NYSE. We currently have no Series 2 common stock or non-voting common stock outstanding. The high and low Sprint Series 1 common stock prices, as reported on the NYSE composite, are as follows: 2012 Market Price High...

  • Page 34
    ... for the five-year period from December 31, 2007 to December 31, 2012. The graph assumes an initial investment of $100 on December 31, 2007 and reinvestment of all dividends. ® Value of $100 Invested on December 31, 2007 2007 2008 2009 2010 2011 2012 Sprint Nextel S&P 500 Dow Jones U.S. Telecom...

  • Page 35
    ...of Virgin Mobile USA, Inc. (Virgin Mobile) and Affiliates in 2009, as well as the November 2008 contribution of our WiMAX wireless network to Clearwire. The acquired companies' results of operations subsequent to their acquisition dates are included in our consolidated financial statements. The 2012...

  • Page 36
    ...we expect the level of competition for these subscribers as well as the timing of business customer decisions to cause the rate of recapture to decline to 30-40% during the six-month period ended June 30, 2013. Despite the continued reduction of Nextel platform subscribers as we shut-down the Nextel...

  • Page 37
    ... subscribers, a reduction in variable cost of service per unit and long-term accretion to cash flows from operations. See "Liquidity and Capital Resources" for more information. Proposed Business Transactions On October 15, 2012 we entered into an Agreement and Plan of Merger (Merger Agreement...

  • Page 38
    ...the Nextel and Sprint platforms due to changes in our estimates of the remaining useful lives of long-lived assets, changes in the expected timing and amount of asset retirement obligations, and lease exit and other contract termination costs. In the first quarter of 2012, we formalized our plans to...

  • Page 39
    ... useful life when placed in-service. Furthermore, based on current estimates of increased data usage, we expect additional capital expenditures of legacy equipment until Network Vision is substantially complete. RESULTS OF OPERATIONS Year Ended December 31, 2012 2011 (in millions) 2010 Wireless...

  • Page 40
    ... in the second quarter 2010 and Nextel Partners, Inc. and Virgin Mobile impacting 2011 as discussed above. Our remaining customer relationships are amortized using the sum-of-the-months'-digits method, resulting in higher amortization rates in early periods that decline over time. Other, net The...

  • Page 41
    ... a next generation mobile broadband network that provides high-speed residential and mobile Internet access services and residential voice services in communities throughout the country. On December 17, 2012, Sprint entered into a definitive agreement with Clearwire Corporation to acquire the...

  • Page 42
    ... benefits. Additional information related to items impacting the effective tax rates can be found in the Notes to the Consolidated Financial Statements. Segment Earnings - Wireless Wireless segment earnings are primarily a function of wireless service revenue, costs to acquire subscribers, network...

  • Page 43
    ...in retail service revenue in 2012 as compared to 2011 reflects an increase in Sprint platform postpaid service revenue related to our $10 premium data add-on charge required for all smartphones and continued popularity of unlimited and bundled plans, combined with increases in roaming and other fees...

  • Page 44
    ... service category who change rate plans, the level of voice and data usage, the amount of service credits which are offered to subscribers, plus the net effect of average monthly revenue generated by new subscribers and deactivating subscribers. Postpaid ARPU for 2012 increased as compared to 2011...

  • Page 45
    ... of wireless subscribers, (b) our total subscribers as of the end of each quarterly period for the past twelve quarters, and (c) end of period connected device subscribers. Quarter Ended March 31, 2010 June 30, 2010 September 30, 2010 December 31, 2010 March 31, 2011 June 30, 2011 September 30, 2011...

  • Page 46
    ... these customers access to our network through our MVNO relationships, approximately 822,000 subscribers at December 31, 2012 through these MVNO relationships have been inactive for at least six months, with no associated revenue during the six-month period ended December 31, 2012. (4) End of period...

  • Page 47
    ... following table shows (a) our average rates of monthly postpaid and prepaid subscriber churn as of the end of each quarterly period for the past twelve quarters, (b) our recapture of Nextel platform subscribers that deactivated but remained as customers on the Sprint platform, and (c) our postpaid...

  • Page 48
    43

  • Page 49
    ...2012 as compared to 2011 was primarily due to a decline in gross subscriber additions on Assurance Wireless due to lower response rates and a lower customer application approval rate resulting from complexities associated with new federal regulations as well as an increase in churn primarily related...

  • Page 50
    ... terminating calls; long distance costs paid to the Wireline segment; costs to service and repair devices; regulatory fees; roaming fees paid to other carriers; and fixed and variable costs relating to payments to third parties for the use of their proprietary data applications, such as messaging...

  • Page 51
    ... due to higher Clearwire MVNO data usage. In addition, higher service and repair costs were incurred driven by the increase in the cost per unit of new and used devices due to the growth in smartphone popularity. These increases were partially offset by a decrease in long distance network costs as...

  • Page 52
    ... our customer base and their related usage, but some cost elements do not fluctuate in the short term with the changes in our customer usage. Our wireline services provided to our Wireless segment are generally accounted for based on market rates, which we believe approximate fair value. The Company...

  • Page 53
    ... our Wireless segment represented 32% of total voice revenues in 2012 as compared to 34% in 2011 and 33% in 2010. Data Revenues Data revenues reflect sales of data services, primarily Private Line, and also includes ATM, frame relay and managed network services bundled with non-IP data access. Data...

  • Page 54
    ...clearing a portion of the 1.9 GHz spectrum. In addition, during the fourth quarter 2011, Sprint invested an additional $331 million in Clearwire as a result of an amendment to our agreements and Clearwire's successful offering of additional Class A shares to the market. Financing Activities Net cash...

  • Page 55
    ... subsidy per unit than other smartphones we sell, has had, and will continue to have, an expected increase in cash outflow and reduction in operating income in the earlier years of the contract until such time as we may recover the acquisition costs through subscriber revenue consistent with our...

  • Page 56
    ...in the cash balance of New Sprint for general corporate purposes, including but not limited to the Clearwire Acquisition. Pursuant to the terms and subject to the conditions described in the Merger Agreement, upon consummation of the SoftBank Merger, outstanding shares of Sprint common stock, except...

  • Page 57
    ...December 17, 2012, Sprint entered into a merger agreement with Clearwire Corporation to acquire all of the remaining equity interests of Clearwire Corporation that Sprint does not currently own for approximately $2.2 billion in cash, or $2.97 per share (Clearwire Acquisition). In connection with the...

  • Page 58
    ...The cost of funds under this facility includes a fixed interest rate of 2.03%, and export credit agency premiums and other fees that, in total, equate to an expected effective interest rate of approximately 6% based on assumptions such as timing and amounts of drawdowns. As of December 31, 2012, the...

  • Page 59
    ... and execute according to the timeline of our current business plan, which includes Network Vision, subscriber growth, expected usage profiles of smartphone customers and the expected achievement of a cost structure intended to achieve more competitive margins, we may need to raise additional funds...

  • Page 60
    ...: • acquisition of the remaining equity interests of Clearwire Corporation that Sprint does not currently own for approximately $2.2 billion; • payment of any outstanding balances of our EDC facility and secured equipment facility, which become due upon a change of control and totaled $796...

  • Page 61
    ... obligations under the Report and Order. The Report and Order requires us to make a payment to the U.S. Treasury at the conclusion of the band reconfiguration process to the extent that the value of the 1.9 GHz spectrum we received exceeds the total of the value of licenses for spectrum in the 700...

  • Page 62
    ... equity method investment in Clearwire as of December 31, 2012 totaled approximately $674 million. Each $0.10 per share change in the value of Clearwire's traded stock price results in a $73.9 million change in the estimated fair value of our equity investment based on Sprint's equity interest as of...

  • Page 63
    ...31, 2012. The Company recognizes that our market capitalization, the product of our traded stock price and shares outstanding, is subject to volatility and, during certain periods, has been below our shareholders' equity book value. Accordingly we monitor changes in our market capitalization between...

  • Page 64
    ... start-up business. Assumptions key in estimating fair value under this method include, but are not limited to, capital expenditures, subscriber activations and deactivations, market share achieved, tax rates in effect and discount rate. A one percent decline in our assumed revenue growth rate used...

  • Page 65
    ... and Clearwire; • the uncertainties related to certain restrictions placed on Sprint under the Merger Agreement with SoftBank; • the effects of vigorous competition on a highly penetrated market, including the impact of competition on the price we are able to charge subscribers for services and...

  • Page 66
    ...common stock and expected volatility in the trading price of New Sprint common stock after consummation of the SoftBank Merger, current economic conditions and our ability to access capital; the impact of unrelated parties not meeting our business requirements, including a significant adverse change...

  • Page 67
    ... SEC's rules. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In connection with the...

  • Page 68
    ... and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes...

  • Page 69
    ... University of Notre Dame's Mendoza School of Business. He previously served on the board of directors of Clearwire Corporation, Nokia Corporation and VF Corporation. Director Since 2007 Age 59 Executive Officers Current Position Held Since 2011 Name Joseph J. Euteneuer Experience Chief Financial...

  • Page 70
    ... marketing, media and wireless companies ranging from start-up ventures to large corporate entities. Prior to joining Sprint, he was a venture partner with Ignition Partners, a venture capital firm based in Seattle. He joined Ignition in 2002 and was a member of the firm's wireless communications...

  • Page 71
    ...of New York. Mr. Bennett currently serves as a director of Discovery Communications, Inc., Demand Media, Inc., and Liberty Media Corporation. Mr. Bennett previously served on the board of directors of Liberty Interactive Corporation and Discovery Holding Company. Retired Chairman and Chief Executive...

  • Page 72
    ...'s President and Chief Executive Officer since 2001 and also as Anthem's Chairman since 2003. He is currently a director of Simon Property Group, Inc., Sysco Corporation and Zimmer Holdings, Inc. He previously served on the board of directors of WellPoint, Inc. Chairman of the Board of Sprint Nextel...

  • Page 73
    ... of new members to our board, the Nominating Committee employs one or more third-party search firms. All approvals of nominations are determined by the full board. Consistent with our Corporate Governance Guidelines, the Nominating Committee places a great deal of importance on identifying...

  • Page 74
    ...improve productivity and customer service, and team building and human capital development. Mr. Glasscock also has significant experience as a public company director and as a member of various committees related to important board functions, including audit, finance, governance and compensation. Mr...

  • Page 75
    ... ethics, The Sprint Nextel Code of Conduct, is available at www.sprint.com/governance or by email at [email protected]. It describes the ethical and legal responsibilities of directors and employees of our company and our subsidiaries, including senior financial officers and executive...

  • Page 76
    ... who wishes to communicate with our board or our outside directors may write to our General Counsel, Senior Vice President and Corporate Secretary, who is our Board Communications Designee, at the following address: Sprint Nextel Corporation, 6200 Sprint Parkway, Overland Park, KS 66251, KSOPHF0302...

  • Page 77
    ... supported our overall business objectives. These changes included: • Adoption of a single three-year performance measurement period in our LTIC plan for 2012 performance units and performance-based restricted stock units (RSUs) in lieu of three one-year performance periods as was used in our LTIC...

  • Page 78
    ... generating cash, we successfully completed Phase One in 2011. Since the beginning of our turnaround efforts through the completion of Phase One, we increased net subscriber additions, total service revenue, customer satisfaction and brand health. Our accomplishments in Phase One continued into 2012...

  • Page 79
    ... the number of Network Vision cell sites on air by the end of the performance period. Our performance units and performance-based RSUs granted in 2012 set performance objectives and targets over a single three-year period covering 2012, 2013 and 2014. However, in 2010 and 2011, our LTIC plan grants...

  • Page 80
    ... in the third quarter of 2012. Because we failed to meet the minimum payout threshold under the Network Vision Deployment objective, each of our named executive officers forfeited approximately one third of the performance-based RSUs granted under the LTIC plan for each of 2010 and 2011 as follows...

  • Page 81
    ... conditions for completed performance period (we assume target performance for performance periods that were not complete at December 31, 2012); and • Compensation repaid or forfeited is included, as described in Sprint's Current Report on Form 8-K filed on May 4, 2012. Corporate Governance...

  • Page 82
    ... by our named executive officers under different termination scenarios, including those in connection with a change in control, as well as the current equity-based award holdings, these are not the primary considerations in the assessment and determination of annual compensation for our named...

  • Page 83
    ... increase in shareholder value because our incentives under it are linked to business objectives that we believe will deliver our long-term success. For the 2012 STIC plan, the Compensation Committee approved a change to one annual performance period for determining the amount of plan payments from...

  • Page 84
    ... two six-month performance periods as were used in 2010 and 2011. Based on performance against stated objectives, our named executive officers must have been employed through December 31, 2012 in order to be eligible to receive full or prorated compensation for the performance period unless their...

  • Page 85
    ... the applicable annual limit, which is intended to compensate highly-compensated employees for limitations placed on our 401(k) plan by federal tax law. For 2012, Mr. Hesse was the only named executive officer who participated in the Sprint Nextel Deferred Compensation Plan. Personal Benefits and...

  • Page 86
    ... imposed under Internal Revenue Code Section 4999 to a senior level executive. The severance benefits to which our named executive officers are entitled as provided in the their employment agreements and described in "-Potential Payments upon Termination of Employment or Change in Control," allow us...

  • Page 87
    ... on the Sprint Turnaround-Phase Two-2012 STIC Plan." For the 2012 LTIC plan, the Compensation Committee also established Internal Revenue Code Section 162(m) objectives for the named executive officers potentially subject to Section 162(m) except for a portion of Mr. Hesse's performance unit award...

  • Page 88
    ... the outcome of the Company's say-on-pay votes when making future compensation decisions for the named executive officers. Compensation Committee Report The Compensation Committee has reviewed and discussed Sprint Nextel's Compensation Discussion and Analysis with management. Based on these reviews...

  • Page 89
    ... on Sprint's Current Report on Form 8-K filed on May 4, 2012, Mr. Hesse agreed to a reduction in his base pay to repay amounts associated with a discretionary adjustment the Compensation Committee made under the incentive plan payouts for 2011 for the impact of the iPhone on Sprint's financial...

  • Page 90
    ... 2010-2012 for the 2010 LTIC plan and 2011-2013 for the 2011 LTIC plan. Each annual performance target is set by the Compensation Committee at the start of each respective single year performance period. Based on achievement of specified results with respect to free cash flow and net service revenue...

  • Page 91
    ... results with respect to free cash flow, net service revenue and Network Vision deployment, equally weighted, and the achievement on the objective was 71.35% of target. (5) As previously disclosed on Sprint's Current Report on Form 8-K filed on May 4, 2012, Mr. Hesse agreed to a reduction in his...

  • Page 92
    ...'s Current Report on Form 8-K filed on May 4, 2012, Mr. Hesse agreed to forfeit $544,607 earned with respect to the 2011 performance period associated with a discretionary adjustment the Compensation Committee made under performance unit payouts for the impact of the ® iPhone on Sprint's financial...

  • Page 93
    87

  • Page 94
    ... performance periods ending on December 31, 2010, 2011, and 2012, on March 16, 2013. In early 2012, the Compensation Committee set goals for the 2012 LTIC plan performance period with respect to free cash flow, net service revenue and Network Vision deployment. The total number of performance-based...

  • Page 95
    ...early 2012, the Compensation Committee set goals for the 2012-2014 performance period with respect to free cash flow, net service revenue and Network Vision deployment. (8) SO-Represents stock options granted under our 2012 LTIC plan. Vesting occurs in equal installments on each of February 22, 2013...

  • Page 96
    ... Market value is based on the closing price of a share of our common stock of $5.67 on December 31, 2012. Stock options vest 33 1/3% on February 22, 2013, February 22, 2014 and February 22, 2015. Stock options vest 33 1/3% on February 23, 2012, February 23, 2013 and February 23, 2014. Stock options...

  • Page 97
    Table of Contents (7) Consists of Mr. Euteneuer's Restricted Stock Award of 125,000 shares that vest on April 4, 2014 and performance-based RSUs that vest on March 16, 2013 and with respect to which the applicable performance periods have been completed: Amount Hesse Cowan Elfman Johnson 831,025 207...

  • Page 98
    ... to Mr. Hesse pursuant to the 2012 STIC plan. (2) Represents matching contributions by us with respect to 2012 base salary deferrals on STIC plan compensation paid in 2012 but earned in 2011 and will not be credited to the account of Mr. Hesse until March 29, 2013, the amount of which is included...

  • Page 99
    ... of the applicable employment agreements and the Change in Control Severance Plan set forth relevant definitions in full, generally: Change in control means: the acquisition by a person or group of 30% or more of Sprint's voting stock; a change in the composition of a majority of our directors; the...

  • Page 100
    ... in a total value of $12,291,066. (3) Includes performance units (payable in cash), stock options and RSUs. The value of options is based on the intrinsic value of the options, which is the difference between the exercise price of the option and the market price of our shares on December 31, 2012...

  • Page 101
    ...his employment agreement) on the first business day of the seventh month following his termination; and Mr. Johnson, exercisability of vested options for 12 months; and • continued participation at employee rates in our group health and life (and for Mr. Johnson, long-term disability) plans, and...

  • Page 102
    ... the Board of Directors. (2) Generally, the restricted stock units, or RSUs, underlying which are shares of our common stock, are granted each year on the date of the annual meeting of shareholders. Each grant vests in full upon the subsequent annual meeting. Any new outside board 2012 Compensation...

  • Page 103
    ... during 2012. Compensation information for Mr. Hesse, our President and Chief Executive Officer, can be found at the beginning of this Item 11-Executive Compensation. 2012 Director Compensation Fees earned or Paid in Cash ($) (1) Stock Awards ($) (2) All Other Compensation ($) (3) Total ($) 258...

  • Page 104
    ...in the cash balance of New Sprint for general corporate purposes, including but not limited to the Clearwire Acquisition. Pursuant to the terms and subject to the conditions described in the Merger Agreement, upon consummation of the SoftBank Merger, outstanding shares of Sprint common stock, except...

  • Page 105
    ...certain conditions, including regulatory approvals. (3) The SoftBank ownership percentage assumes conversion of the Bond. (4) According to a Schedule 13G/A filed with the SEC on February 13, 2013, by Capital Research Global Investors (a division of Capital Research and Management Company). According...

  • Page 106
    ... may be acquired upon the exercise of stock options exercisable, and shares of stock that underlie restricted stock units to be delivered, on or within 60 days after February 15, 2013 under Sprint's equity-based incentive plans. (2) Includes shares of restricted stock as to which Mr. Euteneuer has...

  • Page 107
    ...each eligible employee may purchase common stock at quarterly intervals at a purchase price per share equal to 95% of the market value on the last business day of the offering period. (2) Included in the total of 80,965,327 shares are 18,425,717 restricted stock units under the 2007 Plan, which will...

  • Page 108
    ... $120,000, except for approved compensation-related arrangements. Our corporate governance and legal staff are primarily responsible for the development and implementation of processes and procedures to obtain information from our directors and executive officers with respect to transactions between...

  • Page 109
    ... in 2011. Audit-related services in 2011 generally included the audits of our employee benefit plans, internal control reviews and other attestation services. Tax Fees For professional tax services rendered to us, KPMG billed us a total of approximately $0.8 million in 2012. Tax services in 2012...

  • Page 110
    ... and Financial Statement Schedules The consolidated financial statements of Sprint Nextel Corporation filed as part of this report are listed in the Index to Consolidated Financial Statements. The consolidated financial statements of Clearwire Corporation filed as part of this report are listed in...

  • Page 111
    ... by the undersigned, thereunto duly authorized. SPRINT NEXTEL CORPORATION (Registrant) By /s/ DANIEL R. HESSE Daniel R. Hesse Chief Executive Officer and President Date: February 28, 2013 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 112
    ...Contents SIGNATURES SPRINT NEXTEL CORPORATION (Registrant) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 28th day of February, 2013. /s/ JAMES H. HANCE...

  • Page 113
    ..., Time Warner Cable Inc., Bright House Networks, LLC, Google Inc. and Intel Corporation Agreement and Plan of Merger, dated as of July 27, 2009, by and among Sprint Nextel Corporation, Sprint Mozart, Inc. and Virgin Mobile USA, Inc. Agreement and Plan of Merger, dated as of October 15, 2012...

  • Page 114
    ... Sprint Nextel Corporation, the Subsidiary Guarantors and The Bank of New York Mellon Trust Company, N.A. Registration Rights Agreement, dated March 1, 2012, among Sprint Nextel Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Citigroup Global Markets Inc...

  • Page 115
    ..., Clearwire Communications LLC, Clearwire Finance, Inc. and Sprint Nextel Corporation 8-K 001-04721 10.1 10/15/2012 10.2 8-K 001-04721 10.1 12/18/2012 10.3 * 10.4 * (10) Executive Compensation Plans and Arrangements: 10.5 Form of Nonqualified Stock Option Agreement (NonAffiliate Director...

  • Page 116
    ...2007 Long-Term Incentive Plan Amended Summary of 2011 Long-Term Incentive Plan Summary of 2012 Short-Term Incentive Plan and 2012 Long-Term Incentive Plan Form of Award Agreement (awarding stock options) under the 2010 Long-Term Incentive Plan for executive officers with Nextel employment agreements...

  • Page 117
    ...Long-Term Incentive Plan for executives officers with Nextel employment agreements Form of Award Agreement (awarding restricted stock units) under the 2012 Long-Term Incentive Plan for executive officers with Nextel employment agreements Form of Stock Option Agreement under the Stock Option Exchange...

  • Page 118
    ... Description Form SEC File No. Exhibit Filing Date Filed/Furnished Herewith 10.38.3 First Amendment to Amended and Restated Employment Agreement, dated November 16, 2012, by and between Sprint Nextel Corporation and Daniel R. Hesse Amended and Restated Employment Agreement, effective December 31...

  • Page 119
    ... Schwartz First Amendment to Employment Agreement, dated December 10, 2012 by and between Sprint Nextel Corporation and Michael Schwartz Form of Award Agreement (awarding stock options) under the 2009 Long-Term Incentive Plan for executive officers with Nextel employment agreements 113 10-K 001...

  • Page 120
    ... of Shares subject to RSUs (Outside Directors) Form of Indemnification Agreement between Sprint Nextel and its Directors and Officers Sprint Nextel Corporation, 2007 Omnibus Incentive Plan, as amended and restated on May 15, 2012 Form of Award Agreement (awarding restricted stock units) under...

  • Page 121
    ...* * * _____ * Filed or furnished, as required. ** Schedules and/or exhibits not filed will be furnished to the SEC upon request. Sprint will furnish to the SEC, upon request, copies of instruments defining the rights of holders of long-term debt not exceeding 10% of the total assets of Sprint. 115

  • Page 122
    Table of Contents SPRINT NEXTEL CORPORATION Index to Consolidated Financial Statements Page Reference Sprint Consolidated Financial Statements Report of KPMG LLP, Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2012 and 2011 Consolidated Statements of ...

  • Page 123
    ... 2011, and the related consolidated statements of comprehensive loss, cash flows and shareholders' equity for each of the years in the three-year period ended December 31, 2012. We also have audited Sprint Nextel Corporation's internal control over financial reporting as of December 31, 2012, based...

  • Page 124
    Table of Contents SPRINT NEXTEL CORPORATION CONSOLIDATED BALANCE SHEETS December 31, 2012 2011 (in millions, except share and per share data) ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts and notes receivable, net Device and accessory inventory Deferred tax ...

  • Page 125
    ... SPRINT NEXTEL CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Year Ended December 31, 2012 2011 (in millions, except per share amounts) 2010 Net operating revenues Net operating expenses: Cost of services and products (exclusive of depreciation and amortization included below) Selling...

  • Page 126
    ... on accounts receivable Share-based and long-term incentive compensation expense Deferred income tax expense Equity in losses of unconsolidated investments, net Gains from asset dispositions and exchanges Contribution to pension plan Spectrum hosting contract termination Other changes in assets...

  • Page 127
    Table of Contents SPRINT NEXTEL CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in millions) Common Shares Shares (1) Treasury Shares Paid-in Capital Shares Amount Accumulated Deficit Amount Accumulated Other Comprehensive Loss Total Balance, December 31, 2009 Net loss Other ...

  • Page 128
    ... Intangible Assets Long-Term Debt, Financing and Capital Lease Obligations Severance, Exit Costs and Asset Impairments Supplemental Financial Information Income Taxes Spectrum Hosting Commitments and Contingencies Shareholders' Equity and Per Share Data Segments Quarterly Financial Data (Unaudited...

  • Page 129
    ... Puerto Rico and the U.S. Virgin Islands. The Wireline segment includes revenue from domestic and international wireline voice and data communication services, including services to the cable multiple systems operators that resell our local and long distance services and use our back office systems...

  • Page 130
    ... revised periodically to account for changes, if any, related to management's strategic objectives, technological changes or obsolescence. Repair and maintenance costs and research and development costs are expensed as incurred. We capitalize costs for network and non-network software developed or...

  • Page 131
    ... and software in development, are periodically assessed to determine recoverability. Network equipment and cell site development costs are expensed whenever events or changes in circumstances cause the Company to conclude the assets are no longer needed to meet management's strategic network plans...

  • Page 132
    ... excess wireless data usage based on kilobytes and one-time use charges, such as for the use of premium services, when rendered. As a result of the cutoff times of our multiple billing cycles each month, we are required to estimate the amount of subscriber revenues earned but not billed from the end...

  • Page 133
    .... The fair value of each restricted stock unit award is calculated using the share price at the date of grant. Restricted stock units generally have performance and service requirements or service requirements only with vesting periods ranging from one to three years. Employees and directors who are...

  • Page 134
    ... of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Compensation Costs The cost of employee services received in exchange for share-based awards classified as equity is measured using the estimated fair value of the award on the date of the grant, and that cost is...

  • Page 135
    ...in the cash balance of New Sprint for general corporate purposes, including but not limited to the Clearwire Acquisition. Pursuant to the terms and subject to the conditions described in the Merger Agreement, upon consummation of the SoftBank Merger, outstanding shares of Sprint common stock, except...

  • Page 136
    ... SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Acquisition of Assets from U.S. Cellular On November 6, 2012, Sprint entered into a definitive agreement with United States Cellular Corporation (U.S. Cellular) to acquire PCS spectrum and approximately 585,000 customers...

  • Page 137
    ... from Clearwire as of December 31, 2012. On January 2, 2012, in conjunction with new long-term pricing agreements within the mobile virtual network operator (MVNO) agreement reached between the two companies in the fourth quarter of 2011, Sprint provided $150 million to Clearwire in exchange for...

  • Page 138
    ... and other current liabilities. Cost of services and products included in our consolidated statements of comprehensive loss related to our agreement to purchase 4G WiMAX services from Clearwire totaled $417 million and $405 million for the year ended December 31, 2012 and 2011, respectively, and...

  • Page 139
    ... for the year ended December 31, 2012, of which the majority related to shortened useful lives of Nextel platform assets. In connection with Network Vision, a substantial portion of the value of certain spectrum licenses that were not previously placed in service are now ready for their intended...

  • Page 140
    ... in service. The components of property, plant and equipment, and the related accumulated depreciation were as follows: December 31, 2012 (in millions) December 31, 2011 Land Network equipment, site costs and related software Buildings and improvements Non-network internal use software, office...

  • Page 141
    ... the acquisitions of Affiliates and Nextel Partners, Inc., which are being amortized over the remaining terms of those affiliation agreements on a straight-line basis, and the Nextel, Direct Connect and Virgin Mobile trade names, which are being amortized on a straight-line basis. During 2012, we...

  • Page 142
    ... FINANCIAL STATEMENTS Note 8. Long-Term Debt, Financing and Capital Lease Obligations Interest Rates December 31, 2012 December 31, 2011 Maturities (in millions) Notes Senior notes Sprint Nextel Corporation Sprint Capital Corporation Serial redeemable senior notes Nextel Communications...

  • Page 143
    ...'s Investor Services and Standard & Poor's Rating Services. If we are required to make a change of control offer, we will offer a cash payment equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest. A change in control resulting from the Softbank Merger...

  • Page 144
    ... issued of approximately $925 million under our revolving bank credit facility. Sprint intends to amend these facilities to, among other things, exclude the SoftBank Merger from the change of control provisions. Financing, Capital Lease and Other Obligations We have approximately 3,000 cell sites...

  • Page 145
    ...) in "Cost of services and products" related to payments that will continue to be made under our backhaul access contracts for which we will no longer be receiving any economic benefit. Based on management's network modernization plan, and subject to change based upon completion of proposed business...

  • Page 146
    ... quarter 2012, and $18 million related to network asset equipment ($13 million Wireless; $5 million Wireline) that is no longer necessary for management's strategic plans. Asset impairments in 2011 and 2010 primarily related to network asset equipment in our Wireless segment, no longer necessary...

  • Page 147
    Table of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 10. Supplemental Financial Information December 31, 2012 (in millions) 2011 Accounts and notes receivable, net Trade Unbilled trade and other Less allowance for doubtful accounts $ 3,239 602 (183) 3,...

  • Page 148
    ...of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 11. Income Taxes Income tax expense consists of the following: Year Ended December 31, 2012 2011 (in millions) 2010 Current income tax benefit (expense) Federal State Total current income tax benefit (expense...

  • Page 149
    ... related to federal and state net operating loss carryforwards generated during the period. The increase in the carrying amount of Sprint's valuation allowance for the years ended December 31, 2012 and 2011 in excess of amounts recognized as a change in the valuation allowance in the current period...

  • Page 150
    ... of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS resolution of various federal and state income tax uncertainties. During 2011, a $59 million expense was recorded as a result of the effect of changes in corporate state income tax laws. During 2012, 2011 and 2010...

  • Page 151
    ... Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS We are involved in multiple state income tax examinations related to various years beginning with 1996, which are in various stages of the examination, administrative review or appellate process. Based on our current...

  • Page 152
    ... in the Bennett case. We do not expect the resolution of these matters to have a material adverse effect on our financial position or results of operations. On April 19, 2012, the New York Attorney General filed a complaint alleging that Sprint has fraudulently failed to collect and pay more than...

  • Page 153
    ...new rules regarding interference in the 800 MHz band and a comprehensive plan to reconfigure the 800 MHz band (the "Report and Order"). The Report and Order provides for the exchange of a portion of our 800 MHz FCC spectrum licenses, and requires us to fund the cost incurred by public safety systems...

  • Page 154
    ... of rent leveling charges associated with renegotiated cell site leases in 2011 and 2012. Commitments We are a party to other commitments, which includes, among other things, service, spectrum, network capacity and other executory contracts in connection with conducting our business. As of December...

  • Page 155
    ... convertible into common stock. When shares are reissued, we determine the cost using the FIFO method. Dividends We did not declare any dividends on our common shares in 2012, 2011, or 2010. We are currently restricted from paying cash dividends by the terms of our revolving bank credit facility as...

  • Page 156
    ... Puerto Rico and the U.S. Virgin Islands. Wireline primarily includes revenue from domestic and international wireline voice and data communication services, including services to the cable multiple systems operators that resell our local and long distance services and use our back office systems...

  • Page 157
    ... of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Segment financial information is as follows: Corporate, Other and Eliminations (in millions) Statement of Operations Information Wireless Wireline Consolidated 2012 Net operating revenues (3) $ (3) 32,355...

  • Page 158
    ... and $4 million as selling, general and administrative expenses of Wireless. Also includes $19 million of business combination charges for fees paid to unrelated parties necessary for the proposed transactions with SoftBank and Clearwire, which is included in our corporate segment and is classified...

  • Page 159
    ... of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Operating Revenues by Service and Products Wireless Wireline Corporate, Other and (1) Eliminations (in millions) Consolidated 2012 (2) Wireless services Wireless equipment Voice Data Internet Other Total net...

  • Page 160
    ...sum of the quarterly earnings per share amounts may not equal the annual amounts because of the changes in the weighted average number of shares outstanding during the year. Note 17. Subsequent Events On February 28, 2013 we entered into a new $2.8 billion unsecured revolving credit facility that...

  • Page 161
    ... financial statements, on December 17, 2012, the Company entered into a merger agreement with Sprint Nextel Corporation ("Sprint"), pursuant to which Sprint agreed to acquire all of the outstanding shares of the Company's common stock not currently owned by Sprint. In connection with the merger...

  • Page 162
    ...,215 shares outstanding Class B common stock, par value $0.0001, 1,400,000 shares authorized; 773,733 and 839,703 shares outstanding Additional paid-in capital Accumulated other comprehensive (loss) income Accumulated deficit Total Clearwire Corporation stockholders' equity Non-controlling interests...

  • Page 163
    ... Contents CLEARWIRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, 2012 2011 2010 (In thousands, except per share data) Revenues Operating expenses: Cost of goods and services and network costs (exclusive of items shown separately below) Selling, general...

  • Page 164
    Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Year ended December 31, 2012 2011 (In thousands) 2010 Net loss: Net loss from continuing operations Less: non-controlling interests in net loss from continuing operations of consolidated ...

  • Page 165
    ... discontinued operations Net cash used in investing activities Cash flows from financing activities: Principal payments on long-term debt Proceeds from issuance of long-term debt Debt financing fees Equity investment by strategic investors Proceeds from issuance of common stock Net cash provided by...

  • Page 166
    Fixed asset purchases financed by long-term debt Non-cash financing activities: Vendor financing obligations Capital lease obligations Class A common stock issued for repayment of long-term debt Repayment of long-term debt through issuances of Class A common stock $ 36,229 $ 11,514 $ 133,288 ...

  • Page 167
    ... Contents CLEARWIRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Years Ended December 31, 2012, 2011 and 2010 Class A Common Stock Class B Common Stock Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests Total Stockholders' Equity Shares...

  • Page 168
    ... to as the Merger Agreement, pursuant to which Sprint agreed to acquire all of the outstanding shares of Clearwire Corporation Class A and Class B common stock, which we refer to as Class A Common Stock and Class B Common Stock, respectively, not currently owned by Sprint, SOFTBANK CORP., which we...

  • Page 169
    ... we will have the option to exchange the Notes that remain outstanding at the Exchange Rate for 15 business days following the termination of the SoftBank Transaction. Unlike the terms of the Existing Indenture, the terms of the New Indenture do not include an option to call or redeem the Notes, and...

  • Page 170
    ... Agreement, our current LTE build plans is to expand our LTE network to 5,000 sites by the end of 2013. Under our current LTE build plan, we currently expect to satisfy our operating, financing and capital spending needs for the next twelve months using the available cash and short-term investments...

  • Page 171
    ... information. Financial Statement Presentation - We have reclassified certain prior period amounts to conform with the current period presentation. Information about operating segments is based on our internal organization and reporting of revenue and operating loss based upon internal accounting...

  • Page 172
    ... including market price, investment ratings, the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost basis, and our intent and ability to hold the investment until maturity or for a period of time sufficient...

  • Page 173
    ..., equity prices, and credit curves. We use judgment in determining certain assumptions that market participants would use in pricing the financial instrument, including assumptions about discount rates and credit spreads. The degree of management judgment involved in determining fair value is...

  • Page 174
    ... for internal use, and interest costs incurred during the period of development. Software obtained for internal use has generally been enterprise-level business and finance software customized to meet specific operational needs. Costs incurred in the application development phase are capitalized and...

  • Page 175
    ...or interest income. We recognize penalties as additional income tax expense. Revenue Recognition - We primarily earn revenue by providing access to our high-speed wireless networks. Also included in revenue are sales of CPE and additional add-on services. In our 4G mobile broadband markets, we offer...

  • Page 176
    ...and usage based pricing for WiMAX services after 2013 and for LTE service beginning in 2012. In 2011, revenues from wholesale subscribers were billed one month in arrears and were generally recognized as they are earned, based on terms defined in our commercial agreements with our wholesale partners...

  • Page 177
    ... on our financial condition or results of operations. 3. Charges Resulting from Cost Savings Initiatives In connection with our cost savings initiatives, since the beginning of 2011, a total of approximately 5,800 unutilized tower leases have either been terminated or when early termination was not...

  • Page 178
    ... ended December 31, 2011 include non-cash credits of $43.2 million representing the reversal of deferred rent balances at the cease-use date and $37.8 million of accrued executory costs relating to unused tower sites where our current contract requires us to continue payments for the remaining term...

  • Page 179
    ..., 2012 included $93.3 million of costs related to completing network projects not yet place in service, $60.8 million of network and base station equipment not yet assigned to a project and $2.5 million of costs related to information technology, which we refer to as IT, and other corporate projects...

  • Page 180
    Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Charges associated with Property, plant and equipment We periodically assess assets that have not yet been deployed in our networks, including equipment and cell site development costs, ...

  • Page 181
    ...and a wide-area basis, authorize wireless carriers to use radio frequency spectrum to provide service to certain geographical areas in the United States. These licenses are generally acquired as an asset purchase or through a business combination. In some cases, we acquire licenses directly from the...

  • Page 182
    ...): 2013 2014 2015 2016 2017 Thereafter Total $ Year Ended December 31, 2012 2011 2010 $ 12,302 7,737 3,871 326 326 98 24,660 Supplemental Information (in thousands): Amortization expense $ 16,232 $ 20,096 $ 23,933 We evaluate all of our patent renewals on a case by case basis, based on...

  • Page 183
    ...and benefits Business and income taxes payable Other accrued expenses Total accounts payable and accrued expenses Other current liabilities: Derivative instruments Deferred revenues(1) Current portion of long-term debt Cease-to-use lease liability(1)(2) Other(1) Total other current liabilities Total...

  • Page 184
    ...CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 9. Income Taxes The income tax provision consists of the following for the years ended December 31, 2012, 2011 and 2010 (in thousands): Year Ended December 31, 2012 2011 2010 Current taxes: Federal International...

  • Page 185
    ... to expire between 2015 and 2017. Our U.S. federal NOL carry-forwards and capital loss carry-forwards in total are subject to the annual limitations imposed under Section 382 of the Internal Revenue Code. We currently do not project that the Company will generate capital gain income to utilize the...

  • Page 186
    ...the financial statement carrying value and the tax basis of the partnership interest. As it relates to the United States tax jurisdiction, we determined that our temporary taxable difference associated with our investment in the partnership will not completely reverse within the carry-forward period...

  • Page 187
    ... Net Discount Carrying Value Notes: 2015 Senior Secured Notes Second-Priority Secured Notes Exchangeable Notes Vendor Financing Notes(3) Capital lease obligations(3) Total debt, net Less: Current portion of Vendor Financing Notes and capital lease obligations(4) Total long-term debt, net _____...

  • Page 188
    ... 2010, Clearwire Communications issued an additional $175.0 million of 2015 Senior Secured Notes with substantially the same terms. The holders of the 2015 Senior Secured Notes have the right to require us to repurchase all of the notes upon the occurrence of certain change of control events or...

  • Page 189
    .... If our stock price is less than $5.90 per share, subject to certain adjustments, no additional shares shall be added to the exchange rate. In the event the Proposed Merger is consummated, in accordance with the Merger Agreement the right to exchange each $1,000 note shall be changed to the right...

  • Page 190
    ... resulting in Clearwire's credit rating falling below "Caa1" as rated by Moody's Investors Service. Upon the occurrence of a change of control, the lessor may require payment of a predetermined casualty value of the leased equipment Future Payments - For future payments on our long-term debt see...

  • Page 191
    ... fair value of the Exchange Options, we use an income approach based on valuation models, including option pricing models and discounted cash flow models. We maximize the use of market-based observable inputs in the models and develop our own assumptions for unobservable inputs based on management...

  • Page 192
    ... valuation hierarchy at December 31, 2011 (in thousands): Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Financial assets: Cash and cash equivalents Short-term investments Other assets - derivative...

  • Page 193
    ... minimum cash payments under obligations for our continuing operations listed below (including all optional expected renewal periods on operating leases) as of December 31, 2012, are as follows (in thousands): Thereafter, including all renewal periods Total 2013 2014 2015 2016 2017 Long-term...

  • Page 194
    ... The effect of this change in estimate will be reflected in Cost of goods and services and network costs prospectively over the remaining expected term of the commitment. Certain of the tower leases specify a minimum number of new leases to commence under a master agreement. Charges are incurred for...

  • Page 195
    ... we slow network speeds when network demand is highest and that such network management violates our agreements with subscribers and is contrary to the Company's advertising and marketing claims. Plaintiffs also allege that subscribers do not review the Terms of Service prior to subscribing, and...

  • Page 196
    ...also claims slow data speeds are due to Clearwire's network management practices. Plaintiff seeks class certification; declaratory and injunctive relief; unspecified restitution and/or disgorgement of fees paid for Clearwire service; and unspecified damages, interest, fees and costs. On June 9, 2011...

  • Page 197
    ... Company, its directors, Sprint and SoftBank, purportedly bought on behalf of the public stockholders of the Company. The lawsuit alleges that the directors of the Company breached their fiduciary duties in connection with the Proposed Merger, that Sprint breached duties owed to the Company's public...

  • Page 198
    ... Consideration undervalues the Company, that the Proposed Merger was negotiated pursuant to an unfair process, that the deal protection devices favor Sprint to the detriment of the public stockholders, and that the directors of the Company failed to make necessary disclosures in connection with the...

  • Page 199
    ... the Clearwire Corporation 2007 Stock Compensation Plan or the Clearwire Corporation 2003 Stock Option Plan. Restricted Stock Units We grant RSUs and performance based RSUs to certain officers and employees under the 2008 Plan. All RSUs generally have performance and service requirements or service...

  • Page 200
    ... CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) A summary of option activity from January 1, 2010 through December 31, 2012 is presented below: WeightedAverage Remaining Contractual Term (Years) Number of Options WeightedAverage Exercise Price...

  • Page 201
    ... compensation costs related to non-vested stock options outstanding at December 31, 2012 was approximately $0.1 million and is expected to be recognized over a weighted average period of approximately four months. Share-based compensation expense is based on the estimated grant-date fair value...

  • Page 202
    ...aggregate offering price of up to $300.0 million from time to time through CF&Co, as sales agent. Subject to the terms and conditions of the Sales Agreement, CF&Co used its commercially reasonable efforts to sell shares of Class A Common Stock on our behalf on a daily basis or as otherwise agreed by...

  • Page 203
    ... an equal number of shares of Class A Common Stock pursuant to the Operating Agreement. The exchange was completed on September 27, 2012. During the second quarter of 2011, Sprint surrendered 77.4 million shares of Class B Common Stock to reduce its voting interest in Clearwire. Subsequently, during...

  • Page 204
    ... of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following shows the effects of the changes in Clearwire's ownership interests in Clearwire Communications (in thousands): Year ended December 31, 2012 2011 2010 Clearwire's loss from...

  • Page 205
    ...on an "if converted" basis since the result was dilutive. For purpose of this computation, the change in fair value of the Exchange Options and interest expense on the Exchangeable Notes were reversed for the period. For the years ended December 31, 2012 and 2011, shares issuable upon the conversion...

  • Page 206
    Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Net loss per share attributable to holders of Class A Common Stock on a diluted basis, assuming conversion of the Class B Common Interests and Class B Common Stock and, where applicable,...

  • Page 207
    ..., 2012, we entered into a Merger Agreement, pursuant to which Sprint agreed to acquire all of the outstanding shares of Class A and Class B Common Stock not currently owned by Sprint. See Note 1, Description of Business for further information. Note Purchase Agreement -In connection with the Merger...

  • Page 208
    ... of device minimum fees after 2011; and usage based pricing for WiMAX services after 2013 and for LTE service beginning in 2012. We also agreed that Sprint Spectrum may re-wholesale wireless broadband services, subject to certain conditions and we agreed to operate our WiMAX network through...

  • Page 209
    ...MVNO Agreement, whereby Sprint agrees to sell its code division multiple access and mobile voice and data communications service for the purpose of resale to our retail customers. The data communications service includes Sprint's existing core network services, other network elements and information...

  • Page 210
    ... FINANCIAL STATEMENTS - (Continued) messaging services, location-based systems and media server services. The Sprint Entities will provide a service level agreement that is consistent with the service levels provided to similarly situated subscribers. Pricing is specified in separate product...

  • Page 211
    ... CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Summarized financial information for discontinued operations is shown below (in thousands): Year Ended December 31, 2012 Total revenues Loss from discontinued operations before income taxes Income...

  • Page 212
    ... information for the years ended December 31, 2012 and 2011 is as follows (in thousands, except per share data): First Second Third Fourth Total 2012 quarter: Total revenues Operating loss Net loss from continuing operations Net loss from continuing operations attributable to Clearwire Corporation...

  • Page 213
    ... Communications under the equity method of accounting. The financial statements should be read in conjunction with the consolidated financial statements of Clearwire and subsidiaries and notes thereto. CLEARWIRE CORPORATION CONDENSED BALANCE SHEETS December 31, 2012 (In thousands) 2011 ASSETS Cash...

  • Page 214
    ... CONSOLIDATED FINANCIAL STATEMENTS - (Continued) CLEARWIRE CORPORATION CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, 2012 2011 (In thousands) 2010 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss from continuing operations Adjustments to reconcile net loss to net cash used in operating...

  • Page 215
    ... in its entirety as follows: "Agreement Condition" means a Build-Out Agreement shall have been executed by the Purchaser, on the one hand, and the Parent or the Company, on the other hand, by February 28, 2013. 2. GENERAL 2.1 Defined Terms. Capitalized terms used herein which are not otherwise...

  • Page 216
    ...CLEARWIRE COMMUNICATIONS LLC By: /s/ Scott A. Hopper Name: Scott A. Hopper Title: Senior Vice President CLEARWIRE FINANCE, INC. By: /s/ Scott A. Hopper Name: Scott A. Hopper Title: Senior Vice President SPRINT NEXTEL CORPORATION By: /s/ Charles R. Wunsch Name: Charles R. Wunsch Title: SVP, General...

  • Page 217
    ... and restated in its entirety to read as follows: "Agreement to Purchase. Purchaser hereby agrees, subject to the conditions hereinafter stated, to purchase from the Issuers on the applicable Draw Date set forth in Annex A hereto, at a purchase price equal to 100% of the aggregate principal amount...

  • Page 218
    ... available for purchase and sale as of such Draw Dates. 2. GENERAL 2.1 Defined Terms. Capitalized terms used herein which are not otherwise defined herein shall have the meaning given to such terms in the Note Purchase Agreement. 2.1 Full Force and Effect. Except to the extent specifically amended...

  • Page 219
    ... COMMUNICATIONS LLC By: /s/ Hope Cochran Name: Hope Cochran Title: Chief Financial Officer CLEARWIRE FINANCE, INC. By: /s/ Hope Cochran Name: Hope Cochran Title: Chief Financial Officer SPRINT NEXTEL CORPORATION By: /s/ Charles Wunsch Name: Charles Wunsch Title: Sr. VP, General Counsel, Corp...

  • Page 220
    ...governed by the terms of the Sprint Nextel Corporation 2007 Omnibus Incentive Plan (the "Plan") and is subject to the terms and conditions described in this Agreement. The Option Right is not intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue...

  • Page 221
    Separation Plan, the CIC Severance Plan, or your employment agreement (as applicable) Normal Retirement If your Termination Date is on or after Your Termination Date - The first anniversary of the Date of Grant, and - Your 65th birthday

  • Page 222
    ... taxable income from such an exercise will be the Market Value Per Share of the Common Stock on the immediately preceding day before the exercise except that we will use the average of the high and low prices on that date in lieu of the closing price. To the extent permitted by law, you may pay the...

  • Page 223
    ...60 months after your employment under circumstances that Termination Date would make you eligible for benefits under the company's long-term disability plan* Early Retirement (i.e., on your Termination Date you would be eligible to commence early or special early retirement benefits under the Sprint...

  • Page 224
    ... of the Code and applicable Treasury Department rulings and regulations in the number and kind of shares subject to outstanding Awards and any other adjustments as the Board deems appropriate. 10. Amendment; Discretionary Nature of Plan This Agreement is subject to the terms of the Plan, as may...

  • Page 225
    ....33 (FORM OF AWARD AGREEMENT (AWARDING RESTRICTED STOCK UNITS) OFFICERS) Exhibit 10.33 Performance-Based Restricted Stock Unit Award Agreement 2012 Long-term Incentive Plan Award Throughout this Award Agreement ("Agreement") we sometimes refer to Sprint Nextel Corporation and its subsidiaries as "we...

  • Page 226
    receive severance from us paid according to our payroll cycle (i.e., not in a lump sum), the last day of your severance pay period. 5. Acceleration of Vesting Unvested RSUs may vest before the time at which they would normally become vested - that is, the vesting of RSUs may accelerate. Accelerated ...

  • Page 227
    ...Six-Month Payment Delay if that delay applies to your RSUs. We calculate your taxable income on the Delivery Date using the Market Value Per Share on the immediately preceding trading day, but we use the average of the high and low reported prices of our Common Stock instead of the closing price. We...

  • Page 228
    ... of the Code and applicable Treasury Department rulings and regulations in the number and kind of shares subject to outstanding Awards and any other adjustments as the Board deems appropriate. 11. Amendment; Discretionary Nature of Plan This Agreement is subject to the terms of the Plan, as may...

  • Page 229
    ...governed by the terms of the Sprint Nextel Corporation 2007 Omnibus Incentive Plan (the "Plan") and is subject to the terms and conditions described in this Agreement. The Option Right is not intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue...

  • Page 230
    ... time - that is, the vesting may accelerate. Accelerated vesting can apply in the four circumstances described below. Event Death Disability Condition for acceleration If you die If you have a termination of employment under circumstances that would make you eligible for benefits under our long-term...

  • Page 231
    ... taxable income from such an exercise will be the Market Value Per Share of the Common Stock on the immediately preceding day before the exercise except that we will use the average of the high and low prices on that date in lieu of the closing price. To the extent permitted by law, you may pay the...

  • Page 232
    ... of May exercise up through the 12th month after your employment under circumstances that Termination Date would make you eligible for benefits under the company's long-term disability plan* Early Retirement (i.e., on your Termination May exercise up through 60 months after your Date you would be...

  • Page 233
    ... applicable Treasury Department rulings and regulations in the number and kind of shares subject to outstanding Awards and any other adjustments as the Board deems appropriate. 10. Amendment; Discretionary Nature of Plan This Agreement is subject to the terms of the Plan, as may be amended from time...

  • Page 234
    ... 2012 Long-term Incentive Plan Award Throughout this Award Agreement ("Agreement") we sometimes refer to Sprint Nextel Corporation and its subsidiaries as "we" or "us." 1. Award of Restricted Stock Units On February 22, 2012 (the "Date of Grant"), the Compensation Committee of the Board of Directors...

  • Page 235
    ...Six-Month Payment Delay if that delay applies to your RSUs. We calculate your taxable income on the Delivery Date using the Market Value Per Share on the immediately preceding trading day, but we use the average of the high and low reported prices of our Common Stock instead of the closing price. We...

  • Page 236
    ... of the Code and applicable Treasury Department rulings and regulations in the number and kind of shares subject to outstanding Awards and any other adjustments as the Board deems appropriate. 11. Amendment; Discretionary Nature of Plan This Agreement is subject to the terms of the Plan, as may...

  • Page 237
    ...made and entered into as of December 31, 2008 by and between Sprint Nextel Corporation and PAGET L. ALVES is entered into on this 11th day of December, 2012. Certain capitalized terms shall have the meaning ascribed to them in the Agreement. WHEREAS, the Company and the Executive desire to amend the...

  • Page 238
    ...-alone basis, all measured by the most recent available financial information of both the Company and such other person or Division at the time the Executive accepts, or proposes to accept, employment with or to otherwise perform services for such person. If financial information is not publicly...

  • Page 239
    ... WHEREOF, the Company has caused this Amendment to be signed by an officer pursuant to the authority of its Board, and the Executive has executed this Amendment, as of the date set forth above. SPRINT NEXTEL CORPORATION /s/ Sandra J. Price By: Sandra J. Price, Senior Vice President, Human Resources...

  • Page 240
    ... as of April 29, 2009 by and between Sprint Nextel Corporation and MATTHEW CARTER JR. (the "Agreement") is entered into on this 11th day of December, 2012. Certain capitalized terms shall have the meaning ascribed to them in the Agreement. WHEREAS, the Company and the Executive desire to amend the...

  • Page 241
    ... entered into as of September 6, 2011 by and between Sprint Nextel Corporation and WILLIAM MALLOY (the "Agreement") is entered into on this 11th day of December, 2012. Certain capitalized terms shall have the meaning ascribed to them in the Agreement. WHEREAS, the Company and the Executive desire to...

  • Page 242
    ...intent to terminate employment with the Company at least 30 days prior to the effective date of such termination. 3. Position and Duties of the Executive. (a) The Executive shall serve as Senior Vice President, Corporate and Business Development, and agrees to serve as an officer of any enterprise...

  • Page 243
    ... such service, and the Company shall not reduce his compensation by the amount of such fees. 4. Compensation. (a) Base Salary. During the Employment Term, the Company shall pay to the Executive an annual base salary of $430,000 (the "Base Salary"), which Base Salary shall be payable at the times...

  • Page 244
    ...) Pursuant to the Company's applicable incentive or bonus plans as in effect from time to time, the Executive's incentive compensation during the term of this Agreement may be determined according to criteria intended to qualify as performance-based compensation under Code Section 162(m). (c) Equity...

  • Page 245
    ...but unpaid cash compensation and vested benefits under any Employee Plan in accordance with the terms of such Employee Plan and applicable law and any other amounts to which the Executive is entitled under the terms and conditions of the Company's other benefit plans and policies. (b) Termination by...

  • Page 246
    ... deferred compensation within the meaning of Code Section 409A, such installments shall not commence until after the end of the six continuous month period following the date of the Executive's Separation from Service, in which case, the Executive shall be paid a lump-sum cash payment equal...

  • Page 247
    ... benefits from a new employer; (iii) continue for the Payment Period participation in the Company's employee life insurance plans at then-existing participation and coverage levels, comparable to the terms in effect from time to time for the Company's senior executives, including any premium payment...

  • Page 248
    ...be entitled to: (i) receive periodic payments equal to his Base Salary in effect prior to the termination of his employment (reduced by any amounts paid on a monthly basis under any long-term disability plan (the "LTD Plan") now or hereafter sponsored by the Company), which payments shall be paid to...

  • Page 249
    ... or use of such information, of a proprietary, private, secret or confidential (including, without exception, inventions, products, processes, methods, techniques, formulas, compositions, compounds, projects, developments, sales strategies, plans, research data, clinical data, financial data...

  • Page 250
    ... by the Company to protect the Proprietary Information from inappropriate disclosure during and after his employment with the Company. (c) The Executive further agrees that all files, letters, memoranda, reports, records, data, sketches, drawings, laboratory notebooks, program listings, or other...

  • Page 251
    ... in any Competitor of the Company Group, whether as an owner, investor, executive, manager, employee, independent consultant, contractor, advisor, or otherwise. The Executive's ownership of less than one percent (1%) of any class of stock in a publicly traded corporation shall not be a breach of...

  • Page 252
    ... to terminate such relationship; (c) solicit any customer of the Company Group, or any person or entity whose business the Company Group had solicited during the 180-day period prior to termination of the Executive's employment for purposes of business which is competitive to the Company Group...

  • Page 253
    ...under his direction or jointly with others during his employment with the Company, whether or not during normal working hours or on the premises of the Company (all of the foregoing of which are collectively referred to in this Agreement as "Developments"). (b) The Executive further agrees to assign...

  • Page 254
    ...the Company's obligation to pay any remaining severance compensation and benefits that has not already been paid to Executive pursuant to Section 9 shall be terminated and within ten days of notice of such termination of payment, the Executive shall return all severance compensation and the value of...

  • Page 255
    ... law or government regulation or ruling. 19. Successors and Binding Agreement. (a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company expressly to...

  • Page 256
    ... mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as Federal Express or UPS, addressed to the Company (to the attention of the General Counsel of the Company) at its principal executive offices...

  • Page 257
    ... of legal fees in connection with execution of this Agreement. (e) The Executive hereby represents and agrees that, during the Restricted Period, if the Executive is offered employment or the opportunity to enter into any business activity, whether as owner, investor, executive, manager, employee...

  • Page 258
    ..."Agreement" has the meaning set forth in the preamble. "Base Salary" has the meaning set forth in Section 4(a). "Board" has the meaning set forth in Section 3(a). "Bonus Award" has the meaning set forth in Section 4(b)(i). (e) "Bylaws" means the Amended and Restated Sprint Nextel Corporation Bylaws...

  • Page 259
    ...for his personal benefit or in connection with his duties for the Company or any Subsidiary; (viii) (ix) current alcohol or prescription drug abuse affecting work performance; current illegal use of drugs; or (x) violation of the Company's Code of Conduct, with written notice of termination by the...

  • Page 260
    ... Plan. (l) "Certificate of Incorporation" means the Amended and Restated Articles of Incorporation of Sprint Nextel Corporation, as may be amended from time to time. (m) "Code" means the Internal Revenue Code of 1986, as amended from time to time, including any rules and regulations promulgated...

  • Page 261
    ...medical doctor agreed to by the Company and the Executive. The costs of such qualified medical doctor shall be paid for by the Company. (t) (u) (v) (w) "Effective Date" has the meaning set forth in the preamble. "Employee Plans" has the meaning set forth in Section 5(a). "Employment Term" means the...

  • Page 262
    ...Information" has the meaning set forth in Section 10(a)(i). (jj) "Release" means a release of claims in a form provided to the Executive by the Company in connection with the payment of benefits under this Agreement. (kk) "Release Consideration Period" means the period of time pursuant to the terms...

  • Page 263
    ... WHEREOF, the Company has caused this Agreement to be signed by an officer pursuant to the authority of its Board, and the Executive has executed this Agreement, as of the day and year first written above. SPRINT NEXTEL CORPORATION By: /s/ Sandra J. Price Sandra J. Price Sr. Vice President - Human...

  • Page 264
    ... into as of September 27, 2012 by and between Sprint Nextel Corporation and MICHAEL SCHWARTZ (the "Agreement") is entered into on this 10th day of December, 2012. Certain capitalized terms shall have the meaning ascribed to them in the Agreement. WHEREAS, the Company and the Executive desire to...

  • Page 265
    ... Schwartz By: Sandra J. Price, MICHAEL SCHWARTZ Senior Vice President, Human Resources (Back To Top) Section 14: EX-12 (RATIO OF EARNINGS TO COMBINED FIXED CHARGES) Exhibit 12 Computation of Ratio of Earnings to Fixed Charges For the Years Ended December 31, 2012 2011 2010 (in millions) 2009...

  • Page 266
    Name Alamosa Holdings, Inc. Subsidiaries: AirGate PCS, Inc. Subsidiaries: AGW Leasing Company, Inc. AirGate Service Company, Inc. Alamosa PCS Holdings, Inc. Subsidiary: Alamosa (Delaware), Inc. Subsidiary: Alamosa Holdings, LLC Subsidiaries: Alamosa PCS, Inc. Subsidiaries: Alamosa Wisconsin GP, LLC ...

  • Page 267
    ...: SN UHC 2, Inc. (see Sprint WBC of New York, Inc. for SN UHC 2, Inc. subs; see endnote) Caroline Ventures, Inc. C FON Corporation Collie Acquisition Corp. iPCS, Inc. Subsidiaries: Bright PCS Holdings, Inc. Subsidiary: Bright Personal Communications Services, LLC iPCS Wireless, Inc. Subsidiary: iPCS...

  • Page 268
    Nextel Boost of California, LLC 2 Delaware 100

  • Page 269
    ... Holdings 2, Inc. Nextel License Holdings 4, Inc. Nextel of Puerto Rico, Inc. Subsidiary: Nextel License Holdings 5, Inc. Sprint Nextel Holdings (ME) Corp. Tower Parent Corp. Unrestricted Subsidiary Funding Company Subsidiaries: Nextel 220 License Acquisition Corp. Nextel Broadband, Inc. Nextel Data...

  • Page 270
    3

  • Page 271
    ... Corp. Nextel WIP License Corp. NPCR, Inc. Subsidiary: Nextel Partners Equipment LLC NPFC, Inc. Nextel Boost Investment, Inc. Subsidiary: Boost Worldwide, Inc. NCI 700, Inc. Sprint Nextel Aviation, Inc. Unrestricted Extend America Investment Corp. Unrestricted Subscriber Equipment Leasing Company...

  • Page 272
    ... LLC Sprint Corporation Sprint Corporation (Inactive) Sprint Credit General, Inc. Sprint Credit Limited, Inc. Sprint eBusiness, Inc. Sprint Enterprise Mobility, Inc. Sprint Enterprise Network Services, Inc. Sprint eWireless, Inc. Sprint Healthcare Systems, Inc. Sprint International Holding, Inc...

  • Page 273
    ... Sprint International Incorporated) SprintLink Netherlands B.V. SprintLink Poland sp. z o.o SprintLink UK Limited Sprint Mexico, Inc. Sprint PCS Canada Holdings, Inc. Sprint Solutions, Inc. Sprint TELECENTERs, Inc. Sprint/United Management Company Sprint Ventures, Inc. Subsidiary: Virgin Mobile USA...

  • Page 274
    6

  • Page 275
    ... (Sprint Nextel Corporation subsidiaries continued) SWV Eight, Inc. Subsidiary: SWV Three Telephony Partnership (see SWV Seven, Inc.) Subsidiary: Sprint Telephony PCS, L.P. (see Sprint Spectrum Holding Company, L.P.) Subsidiaries: Sprint PCS Assets, L.L.C. Subsidiary: STC One LLC Sprint PCS License...

  • Page 276
    APC Realty and Equipment Company, LLC (see American PCS Communications, LLC) Delaware (8) 7

  • Page 277
    ...Sprint Spectrum Holding Company, L.P. (see SWV One Telephony Partnership) Subsidiaries: American PCS, L.P. (see MinorCo, L.P.) Sprint Telephony PCS, L.P. (see SWV Three Telephony Partnership) PCS Leasing Company, L.P. (see Sprint Telephony PCS, L.P.) Sprint Spectrum L.P. (see MinorCo, L.P.) Wireless...

  • Page 278
    ..., Inc.) PhillieCo Partners II, L.P. (see SWV Five, Inc.) Sprint Spectrum Holding Company, L.P. (see SWV Six, Inc.) Wireless Leasing Co., Inc. (see US Telecom, Inc.) Wireline Leasing Co., Inc. (see US Telecom, Inc.) Sprint Global Venture, Inc. Subsidiary: SGV Corporation Ownership Interest Held By...

  • Page 279
    9

  • Page 280
    ...) Sprint Communications Company L.P. (see Sprint International Communications Corporation) Sprint Global Venture, Inc. (see Sprint International Communications Corporation) Sprint International Incorporated Subsidiaries: SIHI Mexico S. de R.L. de C.V. (see Sprint International Holding, Inc.) Sprint...

  • Page 281
    10

  • Page 282
    ... S.r.l. (see Sprint International Holding, Inc.) Sprintlink Poland sp. z o.o Wireline Leasing Co., Inc. (see Sprint International Communications Corporation) Via/Net Companies Subsidiary: SN UHC 2, Inc. (see Sprint WBC of New York, Inc. for SN UHC 2, Inc. subs; see endnote) Virgin Mobile USA, Inc...

  • Page 283
    ...-year period ended December 31, 2012, and the effectiveness of internal control over financial reporting as of December 31, 2012, which report appears in the December 31, 2012 annual report on Form 10-K of Sprint Nextel Corporation. Sprint Nextel Corporation adopted accounting guidance regarding...

  • Page 284
    ... Nextel Corporation, the uncertainties associated with those agreements, and the related potential impact of such uncertainties on the Company's need for liquidity in the next twelve months) appearing in the Annual Report on Form 10-K of Sprint Nextel Corporation for the year ended December 31, 2012...

  • Page 285
    ..., 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 control over financial reporting. Date: February 28, 2013 /s/ Daniel R. Hesse Daniel R. Hesse Chief...

  • Page 286
    ... Act of 2002 In connection with the annual report of Sprint Nextel Corporation (the "Company") on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission (the "Report"), I, Joseph J. Euteneuer, Chief Financial Officer of the Company, certify, pursuant to...

  • Page 287
    /s/ Joseph J. Euteneuer Joseph J. Euteneuer Chief Financial Officer (Back To Top)