Sprint - Nextel 2012 Annual Report Download - page 28

Table of Contents
For any or all of these reasons, our pursuit of an acquisition, investment or merger may cause our actual results to differ materially from
those anticipated.
Sprint's business could be negatively impacted by threats and other disruptions.
Major equipment failures, natural disasters, including severe weather, terrorist acts or other breaches of network or information technology
security that affect Sprint's wireline and wireless networks, including transport facilities, communications switches, routers, microwave links, cell sites
or other equipment or third
- party owned local and long - distance networks on which Sprint relies, could have a material adverse effect on Sprint's
operations.
These events could disrupt Sprint's operations, require significant resources, result in a loss of subscribers or impair Sprint's ability to
attract new subscribers, which in turn could have a material adverse effect on Sprint's business, results of operations and financial condition.
Concerns about health risks associated with wireless equipment may reduce the demand for Sprint's services.
Portable communications devices have been alleged to have adverse health effects, due to radio frequency emissions from these devices.
The actual or perceived risk of using mobile communications devices could adversely affect Sprint through a reduction in subscribers or reduced
financing available to the mobile communications industry. Although the FDA and FCC have both noted that the weight of the scientific evidence
does not link cell phone use to cancer or any health problems, further research and studies are ongoing; Sprint has no reason to expect those studies
to reach a different conclusion, but it cannot guarantee that additional studies will not demonstrate a link between radio frequency emissions and
health concerns.
Risks Relating to Clearwire
Sprint is currently a major equityholder of Clearwire, and on December 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, Sprint's existing investment in Clearwire and the
business and operations of Clearwire. If the Clearwire Acquisition and the SoftBank Merger are consummated, Clearwire will be an indirect
wholly owned subsidiary of New Sprint, and therefore, certain risks that relate to Clearwire will also relate to New Sprint. For more discussion of
Clearwire and the risks affecting Clearwire, you should refer to Clearwire's Annual Report on Form 10
- K for the year ended December 31, 2012,
and the notice to holders of Clearwire common stock and an accompanying proxy statement to be filed by Clearwire with the SEC, a preliminary
form of which was filed by Clearwire with the SEC on February 1, 2013. The contents of Clearwire's SEC filings are expressly not incorporated by
reference into this annual report on Form 10
- K.
Clearwire currently could be, and if the Clearwire Acquisition is consummated, Clearwire would be, considered a subsidiary and affiliate under
certain of Sprint's agreements relating to its indebtedness and could cross
- default Sprint's debt.
If the Clearwire Acquisition is consummated, Sprint will own all of the outstanding equity interests in Clearwire. As a result, Clearwire
would be considered a subsidiary under certain agreements relating to Sprint's indebtedness, and therefore certain actions or defaults by Clearwire
could potentially result in a breach by Sprint of covenants and cross
- default provisions under certain agreements relating to its indebtedness, which
could have a material adverse effect on Sprint's business, financial condition, liquidity and results of operations, including as a result of cross
- defaults
of Sprint's other debt facilities in connection with any acceleration of such indebtedness. Additionally, pursuant to certain of its debt agreements,
Sprint would be subject to covenants relating to the
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increased costs to integrate the technology, personnel, customer base and business practices of the acquired company with our own;
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potential exposure to material liabilities not discovered in the due diligence process;
•
potential adverse effects on our reported operating results due to possible write - down of goodwill and other intangible assets
associated with acquisitions;
•
acquisition financing may not be available on reasonable terms or at all; and
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any acquired business, technology, service or product may significantly under - perform relative to our expectations, and we may not
achieve the benefits we expect from our acquisitions.