Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SPRINT Corp | d456300d8k.htm |
| EX-99.1 - JOINT PRESS RELEASE OF SPRINT NEXTEL CORPORATION AND CLEARWIRE CORPORATION - SPRINT Corp | d456300dex991.htm |
 Sprint /
Clearwire Investor Call
December 17, 2012
Exhibit 99.2 |
  ©
2012 Sprint
Cautionary Statement
2
Cautionary Statement Regarding Forward-Looking Statements
This presentation includes “forward-looking statements” within the meaning of
the securities laws. The words “may,” “could,” “should,”
“estimate,” “project,” “forecast,” “intend,”
“expect,” “anticipate,” “believe,” “target,” “plan,” “providing guidance” and similar expressions are
intended to identify information that is not historical in nature.
This presentation contains forward-looking statements relating to the proposed merger and
related transactions (the “transaction”) between Sprint and Clearwire. All
statements, other than historical facts, including statements regarding the expected timing of the closing of the
transaction; the ability of the parties to complete the transaction considering the various
closing conditions; the expected benefits and efficiencies of the transaction; the
competitive ability and position of Sprint and Clearwire; and any assumptions underlying any of the foregoing,
are forward-looking statements. Such statements are based upon current plans, estimates
and expectations that are subject to risks, uncertainties and assumptions. The
inclusion of such statements should not be regarded as a representation that such plans, estimates or
expectations will be achieved. You should not place undue reliance on such statements.
Important factors that could cause actual results to differ materially from such plans,
estimates or expectations include, among others, any conditions imposed in connection with the transaction,
approval of the transaction by Clearwire stockholders, the satisfaction of various other
conditions to the closing of the transaction contemplated by the merger agreement, and
other factors discussed in Clearwire’s and Sprint’s Annual Reports on Form 10-K for their respective fiscal years
ended December 31, 2011, their other respective filings with the U.S. Securities and Exchange
Commission (the “SEC”) and the proxy statement and other materials that will
be filed with the SEC by Clearwire in connection with the transaction. There can be no assurance that the
transaction will be completed, or if it is completed, that it will close within the
anticipated time period or that the expected benefits of the transaction will be
realized. Sprint does not undertake any obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on any of these
forward-looking statements. |
  ©
2012 Sprint
Soliciting Material Pursuant to 14a-12
3
Additional Information and Where to Find It
In connection with the transaction, Clearwire will file a proxy statement and other materials
with the SEC. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT
AND OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT CLEARWIRE AND THE TRANSACTION. Investors and security
holders may obtain free copies of these documents (when they are available) and other
documents filed with the SEC at the SEC's
web
site
at
www.sec.gov.
In
addition,
the
documents
filed
by
CLEARWIRE
with
the
SEC
may
be
obtained free of charge by contacting CLEARWIRE at Clearwire, Attn: Investor Relations, (425)
636-5828. Clearwire’s filings with the SEC are also available on its website
at http://corporate.clearwire.com. Participants in the Solicitation
Clearwire and its officers and directors and Sprint and its officers and directors may be
deemed to be participants in the solicitation of proxies from Clearwire’s
stockholders with respect to the transaction. Information about Clearwire’s
officers and directors and their ownership of Clearwire’s common shares is set
forth in the proxy statement for Clearwire’s 2012 Annual Meeting of Stockholders, which was filed
with the SEC on April 30, 2012. Information about Sprint’s officers and directors is set
forth in Sprint’s Annual
Report
on
Form
10-K
for
the
year
ended
December
31,
2011,
which
was
filed
with
the
SEC
on
February 27, 2012. Investors and security holders may obtain more detailed information
regarding the direct and indirect interests of the participants in the solicitation of
proxies in connection with the transaction by reading the preliminary and definitive
proxy statements regarding the transaction, which will be filed by Clearwire with the
SEC. |
 Sprint
CEO Dan Hesse
4 |
  ©
2012 Sprint
Expected Transaction Strategic Benefits
•
Optimize
value
creation
of
spectrum
assets
-
Keeps
spectrum
intact
-
Gain
full
control
of
valuable
spectrum
resource
and
LTE
deployment
-
Fair
price
to
both
shareholder
bases
•
Timing
of
the
transaction
enables
the
efficient
deployment
of
LTE
on
2.5
with
the
greatest
expected
efficiencies
5 |
 ©
2012 Sprint
Creates
Robust
Spectrum
Portfolio
LTE-TD –
Depth enables
capacity & speed
Core LTE-FD deployment on
G Block
Enhanced propagation for
LTE-FD deployment
6
800 MHz
1.9 GHz
2.5 GHz |
 ©
2012 Sprint
Significant
value
for
Sprint
and
Clearwire
Shareholders
•
Fair
Premium
to
Clearwire’s
trading
price
pre
Sprint-SoftBank
announcement
•
Fair
price
per
MHz
PoP
•
Eliminates
complexities
and
challenges
of
current
inter-company
governance
•
Best
timing
at
initial
planning
stages
of
Clearwire
LTE
build-out
7 |
 ©
2012 Sprint
Sprint
Turnaround
8
2008 -
2011
2012 -
2013
2014+
•
Transaction
provides
spectrum
capacity
to
enable
future
growth
•
Facilitates
more
competitive
service
offerings
to
fuel
margin
expansion
phase
Investment
Margin Expansion
Recovery |
 Clearwire
CEO Erik Prusch
9 |
  ©
2012 Sprint
Transaction Provides Certain and Attractive
Value for Clearwire’s Shareholders
10
•
•
•
•
•
•
$2.97/share
in
cash
$2.2bn
equity
purchase
price
$10bn
total
Clearwire
enterprise
value
~130%
premium
to
Clearwire’s
price
on
October
10
(Date preceding confirmation of Sprint/Softbank discussions and rumors of Clearwire
involvement) (Date preceding Sprint’s initial indication of interest)
Initial
indication
of
interest
$2.60
final
proposal
$2.97
(+14%)
~40%
premium
to
Clearwire’s
price
on
November
20 |
  ©
2012 Sprint
Clearwire Board Has Reviewed Available
Strategic Alternatives Over the Course of the
Last Two Years
•
Clearwire Board and management performed a comprehensive review of strategic
alternatives to maximize shareholder value over the past two years
•
Upon
first
indication
of
Sprint
interest
in
current
transaction,
the
Clearwire
Board
formed a Special Committee comprised solely of Directors independent from Sprint to
review
the
strategic
alternatives
available
to
the
Company.
The
Special
Committee:
Hired its own legal and financial advisors, and conducted a careful and
rigorous process
Received fairness opinion from its financial advisors
Made
unanimous
recommendation
to
Board
that
offer
is
fair
to
and
in
the
best interest of non-Sprint Class A shareholders
•
Along
with
receiving
Special
Committee
recommendation,
the
Board
conducted
its
own review with its financial and legal advisors and also received a fairness opinion,
and
unanimously
determined
that
this
transaction
was
fair
to
and
in
the
best
interests
of our non-Sprint shareholders
11 |
  ©
2012 Sprint
Clearwire Explored Wide Range of Strategic
Alternatives to Maximize Shareholder Value
Alternative Explored
Considerations
Add New Non-Sprint
Wholesale Customers
•
Ability to attract additional major customers is single-biggest factor in
long- term viability of our business
•
Likelihood of success remains uncertain given current industry dynamics
Partnerships or Other
Strategic Transactions
•
Held
extensive
discussions
with
potential
strategic
partners
and
investors
•
Unable to secure new partnerships given existing governance agreements
•
are not sellers
•
Capital needs of the business are significant
-
Invested >$3B capex on WiMAX network and LTE upgrade to date
-
Limited ability to finance LTE build and obtain additional wholesale customers with
substantial data capacity needs
-
Have taken significant steps to improve positioning of retail business and reduce
costs 12
Would not be able to sell whole company – Sprint has made it clear they |
  ©
2012 Sprint
Alternative
Explored
Considerations
Sell Excess
Spectrum
•
Hired investment bank to conduct auction in 2010
o
Resulted in handful of bids with spectrum values well below those recently
speculated by some shareholders, analysts and reporters
o
Were not successful in reaching agreement before we elected to pursue other
available financing options
o
Since then, engaged in series of conversations with a number of parties (no
compelling offer resulted)
•
Over past several weeks received one credible, but preliminary, proposal
o
Worked to improve proposal, but value well below recent speculation
o
Special Committee and Board concluded that Sprint transaction was better
alternative for non-Sprint Class A shareholders
•
Recently reached out again to all parties previously in discussions with –
no new
interest generated
•
Even with sale of a meaningful block of spectrum, this does not address Clearwire’s
fundamental issue: inability to attract a second major wholesale
customer
Financing
Alternatives
(Debt / Equity)
•
In contact with lenders/participants in capital markets
•
Have very limited access to new debt capital
•
Only have ~ 360mm shares available under current share authorization
•
Substantial funding gap –
not enough capital available to fund plan
Financial
Restructuring
•
Spent significant time with advisors to understand implications / risks of
restructuring •
Believe financial restructuring is quite possible should Sprint transaction not close
Clearwire Explored Wide Range of Strategic
Alternatives to Maximize Shareholder Value
13 |
 Sprint
CFO Joe Euteneuer
14 |
  ©
2012 Sprint
Transaction Overview
15
•
$2.97 per share in cash for approximately 50% of
Clearwire’s shares not already owned by Sprint
•
$2.2 billion cash payment to
Clearwire’s non-Sprint shareholders
•
Clearwire’s outstanding debt and spectrum lease
obligations of approximately $6.3 billion will remain
outstanding
•
Over $800 million of projected year-end 2012 cash on Clearwire’s
balance sheet
•
Loan of up to $800 million
•
Exchangeable for equity at $1.50 per share
•
$80 million per month to be loaned to Clearwire starting 1/1/13
|
  ©
2012 Sprint
Financial Benefits and Costs
16
•
Estimated total efficiencies of approximately
$1
billion
,
including
reduction
in
Clearwire cost of debt
•
Expect slight dilution to Adjusted OIBDA in
2H13 and
NPV
neutral impact in 2014 |
 ©
2012 Sprint
Roadmap to Completion
17
•
Customary closing conditions, including regulatory
approvals
•
Clearwire shareholder vote –
affirmative vote of at
least 75% of outstanding shares (including Sprint)
and a majority of non-Sprint owned shares
•
Completion of Sprint’s previously announced
transaction with SoftBank
•
SoftBank has provided its consent to the transaction
•
Expected to close mid-2013 |
  ©
2012 Sprint
Expected Transaction Strategic Benefits
18
•
Optimize value creation
of spectrum assets
-
Keeps spectrum intact
-
Gain
full control
of valuable spectrum
resource and LTE deployment
-
Fair
price
to both shareholder bases
•
Timing of the transaction enables
the efficient
deployment of LTE on 2.5 with the greatest
expected efficiencies |
 19
Q&A |