Sprint - Nextel 2012 Annual Report Download - page 5

Table of Contents
basis. The additional spectrum will be used to supplement Sprint's coverage in these areas. The transaction is subject to customary regulatory
approvals and is expected to close in mid
- 2013.
On December 11, 2012, Sprint purchased the equity holdings of one of Clearwire's equityholders, Eagle River Holdings, LLC (Eagle River)
comprised of 30.9 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 all of the remaining equity
interests in Clearwire Corporation that we do not currently own for approximately $2.2 billion in cash, or $2.97 per share (Clearwire Acquisition). In
connection with the Clearwire Acquisition, Clearwire Corporation and Sprint have entered into agreements that provide up to $800 million of additional
financing for Clearwire in the form of exchangeable notes, which will be exchangeable for Clearwire common stock at $1.50 per share, subject to certain
conditions and subject to adjustment. Under the financing agreements, Sprint has agreed to purchase $80 million of exchangeable notes per month for
up to ten months beginning in January 2013, with some of the monthly purchases subject to certain funding conditions, including conditions relating
to approval of the Clearwire Acquisition by Clearwire's shareholders and the parties agreeing to a network build out plan. On January 31, 2013 Sprint
and Clearwire entered into an amendment to the financing agreement which extended the date the parties were to agree to a network build out plan
from January 31, 2013 to February 28, 2013. The Clearwire Acquisition is subject to customary regulatory approvals, is contingent on the
consummation of the SoftBank Merger, and is expected to close in mid
- 2013.
On February 26, 2013, Sprint and Clearwire amended the exchangeable notes agreement to remove the network build out condition to
Sprint's obligation to provide financing for the last three draws (in August, September and October 2013). Accordingly, Clearwire, at its option, is
eligible for the last three draws, totaling $240 million. In addition, Clearwire provided its first notification to Sprint of its election to draw $80 million,
under the terms of the financing agreements, in March 2013.
See “Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations” and also refer to the Notes
to the Consolidated Financial Statements for more information on the proposed business transactions and acquisitions noted above. Also see
Item 1A, “Risk Factors" for risks related to the Softbank Merger and Clearwire Acquisition.
Our Business Segments
We operate two reportable segments: Wireless and Wireline. For information regarding our segments, see “Part II, Item 7 Management's
Discussion and Analysis of Financial Condition and Results of Operations” and also refer to the Notes to the Consolidated Financial Statements.
Wireless
We offer wireless services on a postpaid and prepaid payment basis to retail subscribers and also on a wholesale and affiliate basis, which
includes the sale of wireless services that utilize the Sprint network but are sold under the wholesaler's brand. We support the open development of
applications, content, and devices on our network platforms through products and services such as Google Voice™, which allows for functionality
such as one phone number for all devices (home, wireless, office, etc.), routing calls between devices, and in
- call options to switch between devices
during a call, and Google Wallet™, which provides the ability to store loyalty, gift and credit cards, and to tap and pay while you shop using your
wireless device. We have recently introduced Sprint Guardian, a collection of mobile safety and device security bundles that provide families relevant
tools to help stay safe and secure, and Pinsight Media+, a new advertising service giving advertisers the power to reach consumers on their mobile
device by providing more relevant advertising based on information consumers choose to share about their location and mobile Web browsing
history. In addition, we enable a variety of business and consumer third
- party relationships, through our portfolio of machine - to - machine solutions,
which we offer on a retail postpaid and wholesale basis. Our machine
- to - machine solutions portfolio provides a secure, real - time and reliable wireless
two
- way data connection across a broad range of connected devices such as the Chrysler Group's UConnect® Access in - vehicle communications
system which enables hand free phone calls, and the ability to access music, navigation, and other applications and services through cell connections
built into the vehicle. Other connected devices include original equipment manufacturer (OEM) devices and after
- market in - vehicle connectivity and
electric vehicle
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