Sprint - Nextel 2015 Annual Report Download - page 21

Table of Contents
could result in an acceleration of depreciation expense. Moreover, certain equipment assets may never be deployed or redeployed, in which case cash and/or non-
cash charges that could be material to our consolidated financial statements would be recognized.
Any acquisitions, strategic investments, or mergers may subject us to significant risks, any of which may harm our business.
As part of our long term strategy, we regularly evaluate potential acquisitions, strategic investments, and mergers, and we actively engage in
discussions with potential counterparties. Over time, we may acquire, make investments in, or merge with companies that complement or expand our business.
Some of these potential transactions could be significant relative to the size of our business and operations. Any such acquisitions would involve a number of risks
and present financial, managerial and operational challenges, including:
• diversion of management attention from running our existing business;
•possible material weaknesses in internal control over financial reporting;
• increased costs to integrate the networks, spectrum, technology, personnel, subscriber base, and business practices of the company involved in the
acquisition, strategic investment, or merger with our business;
• potential exposure to material liabilities not discovered in the due diligence process or as a result of any litigation arising in connection with such
transactions;
• significant transaction expenses in connection with any such transaction, whether consummated or not;
• risks related to our ability to obtain any required regulatory approvals necessary to consummate any such transaction;
• acquisition financing may not be available on reasonable terms or at all and any such financing could significantly increase our outstanding
indebtedness or otherwise affect our capital structure or credit ratings; and
• any acquired or merged business, technology, service, or product may significantly under-perform relative to our expectations, and we may not
achieve the benefits we expect from our transaction, which could, among other things, also result in a write-down of goodwill and other intangible
assets associated with such transaction.
Certain of these risks may also apply to the RadioShack transaction. 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.
Controlled Company Risks
As long as SoftBank controls us, other holders of our common stock will have limited ability to influence matters requiring stockholder approval and
SoftBank’s interest may conflict with ours and other stockholders.
As of March 31, 2016, SoftBank beneficially owned approximately 83% of the outstanding common stock of Sprint. As a result, until such time as
SoftBank and its controlled affiliates hold shares representing less than a majority of the votes entitled to be cast by the holders of our outstanding common stock at
a stockholder meeting, SoftBank generally will have the ability to control the outcome of any matter submitted for the vote of our stockholders, except in certain
circumstances set forth in our certificate of incorporation or bylaws.
In addition, pursuant to our bylaws, we are subject to certain requirements and limitations regarding the composition of our board of directors. Many of
those requirements and limitations expire on or prior to July 10, 2016. Thereafter, for so long as SoftBank and its controlled affiliates hold shares of our common
stock representing at least a majority of the votes entitled to be cast by the holders of our common stock at a stockholder meeting, SoftBank will be able to freely
nominate and elect all the members of our board of directors, subject only to a requirement that a certain number of directors qualify as "Independent Directors," as
such term is defined in the NYSE listing rules and applicable laws. The directors elected by SoftBank will have the authority to make decisions affecting the
capital structure of the Company, including the issuance of additional capital stock or options, the incurrence of additional indebtedness, the implementation of
stock repurchase programs, and the declaration of dividends.
The interests of SoftBank may not coincide with the interests of our other stockholders or with holders of our indebtedness. SoftBank’s ability, subject
to the limitations in our certificate of incorporation and bylaws, to control all matters submitted to our stockholders for approval limits the ability of other
stockholders to influence corporate matters and, as a result, we may take actions that our stockholders or holders of our indebtedness do not view as beneficial. As
a result, the
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