Filed by Starburst II, Inc. Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Sprint Nextel Corporation
Commission File No.: 001-04721
SoftBank Sprint
SoftBank / Sprint Strategic Partnership
Masayoshi Son
Chairman & CEO
SOFTBANK CORP.
October 15, 2012
3rd
in the US
Subscribers
Sprint®TM
Others
T-Mobile 10%
16%
Verizon 32%
AT&T 30%
*Source: Wireless Intelligence (June 30, 2012)
2
Subscribers
111m
105m
56m
33m
Verizon AT&T Sprint T-Mobile
61m
36m
35m
4.3m
NTT DOCOMO au Softbank EMOBILE
*Source: Created by SOFTBANK CORP. based on data from Wireless Intelligence, TCA and respective companies’ publicly available information.
SOFTBANK data includes WILLCOM data. SOFTBANK is WILLCOM’s sponsor in connection with WILLCOM’s rehabilitation under Japan’s Corporate Rehabilitation Act, and holds a 100% economic interest in WILLCOM. Data for US: End of June 2012, Data for Japan: End of September 2012 * Pro forma
| 3 |
|
Subscribers
111m
105m
56m
33m
Verizon AT&T Sprint T-Mobile
61m
36m
39.5m
NTT DOCOMO au Softbank
SOFTBANK data includes WILLCOM and EMOBILE data. SOFTBANK is WILLCOM’s sponsor in connection with WILLCOM’s rehabilitation under Japan’s Corporate Rehabilitation Act, and holds a 100% economic interest in WILLCOM. eAccess Ltd., provider of the EMOBILE service, is the subject of a proposed share exchange transaction with SOFTBANK, whereby eAccess Ltd. is tentatively scheduled to become a wholly-owned subsidiary of SOFTBANK in February 2013, subject to certain shareholder and regulatory approvals and procedures.
Data for US: End of June 2012, Data for Japan: End of September 2012 * Pro forma
| 4 |
|
Subscribers
111m
105m
33m
Verizon AT&T T-Mobile
61m
36m
96m
NTT DOCOMO au
Softbank
+ Sprint
*Source: Created by SOFTBANK CORP. based on data from Wireless Intelligence, TCA and respective companies’ publicly available information. Refer to Page 4 for SoftBank data.
Data for US: End of June 2012, Data for Japan: End of September 2012 * Pro forma
| 5 |
|
Subscribers
111m
105m
96m
61m
36m
33m
Verizon AT&T
Softbank
+ Sprint
NTT DOCOMO au T-Mobile
Expanded US & Japan Customer Base
*Source: Created by SOFTBANK CORP. based on data from Wireless Intelligence, TCA and respective companies’ publicly available information.
Refer to Page 4 for SoftBank data. Data for US: End of June 2012, Data for Japan: End of September 2012 * Pro forma
| 6 |
|
Mobile Revenue (January—June)
Global No.3
$43bn
$37bn
$32bn
$32bn
$31bn
$27bn
$25bn
$18bn
Sprint
SOFTBANK Group
China
Verizon Mobile
SoftBank + Sprint
AT&T NTT Deutsche
Vodafone KDDI DOCOMO Telekom
* Pro forma
*Revenue from January to June 2012 Created by SOFTBANK CORP. based on respective companies’ publicly available information. Refer to Page 4 for SoftBank data
| 7 |
|
Transaction Overview
| 8 |
|
Expected Ownership Structure
SoftBank
Current Sprint Equity Holders
70%
30%
Sprint
Consolidated Subsidiary
| * |
|
fully-diluted Sprint shares |
9
Transaction Outline
Summary
Acquire 70% of fully-diluted Sprint shares
Amount
Acquisition of existing shares: $12.1bn (JPY 946.9bn)
New shares $8.0bn (JPY 624.0bn)
$20.1bn
(JPY 1,570.9bn)
*Refer to the October 15, 2012 press release for details.
10
Share Acquisition
Existing Shares
($7.30/share)
11
Share Acquisition
Existing Shares
($7.30/share)
Acquisition of existing shares
$12.1bn
(JPY 946.9bn)
12
Share Acquisition
New Shares
($5.25/share)
Existing Shares
($7.30/share)
$8.0bn
(JPY 624.0bn)
Acquisition of existing shares
$12.1bn
(JPY 946.9bn)
13
Share Acquisition
New Shares
($5.25/share)
Existing Shares
($7.30/share)
$8.0bn
(JPY 624.0bn)
Acquisition of existing shares
$12.1bn
(JPY 946.9bn)
$20.1bn
(JPY 1,570.9bn)
(70% of fully-diluted shares)
14
Share Acquisition
New Shares
($5.25/share)
Existing Shares
($7.30/share)
$8.0bn
(JPY 624.0bn)
Acquisition of existing shares
$12.1bn
(JPY 946.9bn)
Cash on Hand
& Debt
Acquisition Financing
15
To SoftBank Shareholders
NO Equity Financing used for Transaction
(Issuance of New Shares, Convertible Bonds, etc.)
NO Change in Dividend Policy
Continued Focus on Early Net Debt Reduction
16
SoftBank’s Market Cap
$32bn(JPY 2.5t)
$21bn
(JPY 1.6t)
$11bn
(JPY 0.9t)
Internet Companies
Yahoo Japan $8.5bn
Alibaba Group $11.2bn
Other Listed Companies $1.0bn
Current Telecom Business
EBITDA $11.1bn × 1
*SOFTBANK’s Market Cap: end of early session, October 15th, 2012 Telecom Business EBITDA: last 12 months EBITDA
Current Telecom Business: Mobile Business + Broadband Infrastructure + Fixed-line Telecommunications
* Non GAAP. Refer to disclaimer.
17
What is EBITDA?
[Operating Income Before Depreciation and Amortization]
EBIT
(Operating Income)
(non-cash expense)
Depreciation Amortization
Global Earnings & Valuation Standard
* Non GAAP. Refer to disclaimer.
18
US Market Opportunity
19
Mobile Subscribers
350m
140m
Large Growing Market
2001 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
*Source: Wireless Intelligence
20
Active Smartphone Users
US
China
UK
Korea
Japan
Germany
France
170m
130m
30m
30m
20m
20m
20m
Smartphone Adoption Global No.1
*Number of activated iOS and Android devices
*Source: Flurry Analytics, Active Devices during July 2012
21
ARPU
US
Japan
Brazil
Russia
China
Indonesia
India
$57.1
$55.5
$13.6
$11.9
$10.6
$4.3
$3.6
ARPU
Global No.1
*Source: Wireless Intelligence (April to June 2012)
| * |
|
7 largest countries by number of subscribers. |
22
Postpaid Ratio
Japan
US
Brazil
China
Russia
India
Indonesia
99.0%
78.3%
19.6%
19.6%
15.0%
4.1%
1.6%
High Postpaid Ratio
(Sophisticated Credit Environment)
*Source: Wireless Intelligence (June 30, 2012) *7 largest countries by number of subscribers.
23
However
24
Effective Mobile Speeds (2011)
Japan
UK
Australia
Italy
US
Germany
China
2.0Mbps
5Mbps
1.4Mbps
1.1Mbps
1.1Mbps
0.7Mbps
0.1Mbps
Slow Network Speed
*Source: Cisco VNI Mobile 2011
25
Duopolistic Market
Subscribers
EBITDA
Other 38% 32% 30%
Others 20% 36% 44%
* Source: Wireless Intelligence
Subscribers as of June 30, 2012, EBITDA as of FY2011
| * |
|
Non GAAP. Refer to disclaimer. |
26
US Mobile Market
1. Large market with rapid smartphone growth
2. High ARPU and postpaid ratio
3. Slow network speed
4. Duopolistic market
Compelling Market Opportunity
27
SoftBank + Sprint
28
Dan Hesse
Chief Executive Officer
29
Sprint
30
Sprint in the US Wireless Telecom Market
• 3rd largest postpaid carrier
(33M subscribers)*
• 2nd largest prepaid carrier
(15M subscribers)*
• 3rd highest revenues
($34B annual operating revenue)
• Highest wireless service revenue growth
(8.2% Year-over-Year)*
• Highest ARPU growth
(7.4% Year-Over-Year)*
*As of 2Q 2012
Other Industry Subscribers based on Sprint Internal Estimates
US Postpaid Subscribers*
others
8%
Sprint
14%
T-Mobile
9%
Verizon
39%
AT&T
30%
US Postpaid ARPU
$50
$52
$54
$56
$58
$60
$62
$64
$66
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
31
Sprint Turnaround Begins in 2008
Phases of the Sprint Turnaround
I. Recovery
•Improve the brand •Reverse subscriber trends •Begin growing revenue •Eliminate costs •Conserve capital in preparation for investmen phase
II. Investment
•Build world-class network platform •Eliminate duplicative network cost structure •Focus on growth of core Sprint Platform business
III. Margin Expansion
•Expect strong margin improvement from Network Vision and continued revenue growth
2008—2011 2012—2013 2014+
32
Customer Experience
• #1 in overall satisfaction among major US carriers
• Most improved US company across all 47 industries over the past 4 years
• Only US company in any industry to go from last to first over the past 4 years
• Sprint – Q2 2012 Highest satisfaction with purchase experience among full service wireless providers
(3rd Consecutive)
• Boost – Q1 2012 Highest satisfaction with purchase experience among non-contract wireless providers
(2nd Consecutive)
• Virgin – Q2 2012 Highest in satisfaction for customer care with non-contract wireless service (2nd Consecutive)
33
Sprint Brand Net Promoter Score
All time high
Independent third party study
• Only US Carrier to Improve Net Promoter Score Year-Over-Year and Sequentially in 2Q12
• Fastest Customer Growth Rate Among US National Postpaid Wireless Brands Over the Last Two Years
34
Total Subscribers
End of 2nd quarter total subscribers at all time high
(millions) 58
50
42
54.0M
56.4M
48.1M
05
2006
2007
2008
2009
2010
2011
12
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
35
Brand—Sustainability
• #3 Greenest US Company
• Only Telecom Provider in Top 25
• Sprint named to Dow Jones Sustainability Index (DJSI) North America as the Mobile Telecommunications Sector Leader for second year in a row
36
Cash
Simplified the Business – Rate Plan Combinations Reduced 85%
Good Customer Service Costs Less*
Customer Care expense, Marketing &
incl. customer credits G&A IT & Billing Labor Product
46% 49% 32% 34% 33%
•$4.7B reduction in Annual Cash Spend*
•2Q12 Adjusted OIBDA of $1.45B up 10% Year-over-Year and 20% Sequentially
*2011 compared to 2007 spend levels
37
Cash—Network Vision Overview
• Shutdown Nextel Platform
• Modernize Sprint Platform
• Deploy LTE Network
Economic Benefits
•Eliminate network duplication, over $1.5B in fixed costs annually •Reduced roaming costs •Reduced operating costs •More efficient use of CapEx
•~50% reduction in cost/GB •~50% reduction in cost/minute
38
Postpaid Nextel Platform Recapture
Deactivations In Thousands
4,000 3,000 2,000 1,000
Nextel’s Deactivations
Recapture Rate to Sprint
Recapture Rate
80% 60% 40% 20% 0%
2008
2009
2010
2011
2012
39
Good Start to Phase II
Phases of the Sprint Turnaround
I. Recovery
•Improve the brand •Reverse subscriber trends •Begin growing revenue •Eliminate costs •Conserve capital in preparation for investmen phase
II. Investment
•Build world-class network platform •Eliminate duplicative network cost structure •Focus on growth of core Sprint Platform business
III. Margin Expansion
•Expect strong margin improvement from Network Vision and continued revenue growth
2008—2011 2012—2013 2014+
40
Transaction Benefits
Creates a stronger, more robust US competitor
Fuels continued Sprint turnaround by enhancing financial position
Creates financial flexibility for new growth opportunities
SoftBank’s proven track record
History of improving competitive position & financial performance
Leader in providing advanced LTE technology
Best path to grow shareholder value
41
SoftBank + Sprint
42
Sprint Net Additions
(million)
1.5 1
0.5 0
-0.5 -1 -1.5
1.62m
-1.32m
2008 2009 2010 2011
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Turnaround
*Sum of Sprint Platform and Nextel Platform
(including Postpaid, Prepaid, Wholesale and affiliate)
*Source: Sprint’s publicly available information
43
Sprint ARPU
$60 $55 $50
2010 2011 2012
(FY)
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
$60.88
Steady Growth
*Source: Sprint’s publicly available information *ARPU of retail postpaid users
44
Sprint Adjusted OIBDA
$1.31bn
$1.40bn
$0.84bn
$1.21bn
$1.45bn
2011 ‘11 ‘11 2012 ‘12 Q2 Q3 Q4 Q1 Q2
(FY)
* Non GAAP. Refer to disclaimer.
Turnaround
*Source: Sprint’s publicly available information
45
Sprint Share Price
(USD/share)
6 5 4 3 2 1 0
Launched iPhone 4S October, 2011
$5.04
(October 10th)
Full-fledged Network Vision Rollout (LTE in major cities) July, 2012
LTE
Improved Smartphone Strategy
Jun. 2011
Oct. 2012
Turnaround
46
Phases of the Sprint Turnaround
I. Recovery
Improve the brand Reverse subscriber trends Begin growing revenue Eliminate costs Conserve capital in preparation for investment phase
II. Investment
Build world-class network platform Eliminate duplicative network cost structure Focus on growth of core Sprint Platform business
III. Margin Expansion
Expect strong margin improvement from Network Vision and continued revenue growth
2008—2011 2012—2013 2014+
47
Two Questions
48
Question 1
Will this investment pay off?
49
We are confident.
50
Sprint Recovery Already in Progress
Net Additions
(million)
200
150
100
50
0
-50
-100
-150
1.62m
-1.32m
2008 2009 2010 2011
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
(FY)
ARPU
($)
65 60 55 50
$60.88
2010 2011 2012
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
(FY)
Adjusted OIBDA
($)
$1.31bn
$1.4bn
$0.84bn
$1.21bn
$1.45bn
2011 2012
Q2 Q3 Q4 Q1 Q2
(FY)
* Non GAAP. Refer to disclaimer.
51
SoftBank’s Contribution Creates Enhanced Competitiveness
Capital Strategy
52
SoftBank’s Contribution (Capital)
New Capital: $8.0bn (JPY 624bn)
Network Enhancement
Strategic Investment
Strengthen Balance Sheet
53
SoftBank’s Contribution (Strategy)
Smartphone Strategy
LTE Strategy
Proven Turnaround Track Record
Group Synergy
54
Smartphone Sales (new subscribers)
NTT DOCOMO
au
2008 2009 2010 2011 2012
Smartphone
No.1
*Third party electronics retail stores survey
55
Effective Mobile Speed
SoftBank 4G
DOCOMO LTE Xi
UQ WiMAX
KDDI Group
18.2Mbps
5.5Mbps
4.5Mbps
No.1
*Source: ICT Research & Consulting survey (average across major cities as of August 28, 2012)
*Average of downlink speed measured 3 times for each service at 18 railway stations in Tokyo area.
56
EBIT(Operating Income)
NTT DOCOMO
SOFTBANK
KDDI
0
2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
$3.4bn
(JPY 262.6bn)
$2.4bn
(JPY 192.1)
$1.2bn
(JPY 94.2bn)
Highest
Growth Rate
*Created by SOFTBANK CORP. based on respective companies’ publicly available information.
(FY)
57
Fixed-Line Business: Operating Income
$1.2bn
0
$-1.4bn
2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 (FY)
Turnaround
* Broadband Infrastructure + Fixed-line Telecommunications
58
Mobile: Operating Income
$5.5bn
$0.9bn
2002 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Turnaround
59
WILLCOM Subscribers
5.03m
3.77m
May 2009 Dec. 2010 Sep. 2012
Turnaround
*PHS + 3G
60
2006
2010
2004
Chronic Deficit
Management Failure
Verge of Deficit
61
$92.3bn
$-105.8bn
2000
’11
(FY)
2002
‘11
(FY)
$429.2bn
5.03m
3.77m
$76.3bn
May, 2009
September 2012
Proven Turnaround Track Record
62
Sprint Recovery Already in Progress
Net Additions
(million)
200
150
100
50
0
-50
-100
-150
1.62m
-1.32m
2008
2009
2010
2011
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
(FY)
ARPU
($)
65 60 55 50
$60.88
2010
2011
2012
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
(FY)
Adjusted OIBDA
($)
$1.31bn
$1.4bn
$1.45bn
$1.21bn
$0.84bn
2011
2012
Q2 Q3 Q4 Q1 Q2 (FY)
* Non GAAP. Refer to disclaimer.
63
SoftBank + Sprint
Synergy Creation
Smartphone
Apple
Network
Turnaround
$429.2bn
$76.3bn
2002
‘11 (FY)
64
Sprint Adjusted OIBDA
$1.40bn $1.45bn Accelerated $1.31bn
$1.21bn Growth with SoftBank
$0.84bn
2011 ’11 ’11 ’12 ’12 (FY) *Source: Created by SOFTBANK CORP. based on Sprint’s publicly Q2 Q3 Q4 Q1 Q2 available information
* Non GAAP. Refer to disclaimer.
65
Mobile EBITDA Margin
EBITDA Margin (Mobile Service Revenue)
(FY2005 to FY2011)
50% 40% 30% 20% 10% 0%
0 20 40 60 80 100 120
Subscribers (millions)
EBITDA Margin (Mobile Service Revenue)
50% 40% 30% 20% 10% 0%
(FY2011)
0 20 40 60 80 100 120
Subscribers (millions)
*FY2005: EBITDA Margin: April 2005—March 2006. Subscribers as of March 31, 2006. FY2011: EBITDA Margin: April 2011 -March, 2012. Subscribers as of September 30, 2012. Refer to Page 4 for SoftBank data * Non GAAP. Refer to disclaimer.
*FY2011: EBITDA Margin: January 2011—December, 2011. Subscribers as of June 30, 2012.
*Source: Japan: Created by SOFTBANK CORP. based on data from TCA.
US: Respective companies’ publicly available information and Wireless Intelligence.
66
Question 2
Can SoftBank repay the new debt?
67
We are confident.
68
Net Debt
$34.2bn
(JPY 2.67t) $2.6bn (JPY 0.2t)
$18.6bn
(JPY 1.45t)
$31.7bn $8.3bn
(JPY 2.47t) (JPY 0.65t)
$10.3bn
(JPY 0.8t)
Jun. 30, 2006 Jun. 30, 2012
Large Reduction
Lease Obligations
Net Debt (excluding lease obligations)
69
Vodafone K.K. Acquisition Financing
$16.7bn
(JPY 1.3t)
Original Schedule
Actual
Full Loan Repayment
Repayment
Ahead of
Schedule
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
*Balance of SBM Loan
70
SoftBank’s Credit Rating
A+/A1
A/A2
A-/A3
BBB+/Baa1
BBB/Baa2
BBB-/Baa3
BB+/Ba1
BB/Ba2
BB-/Ba3
Investment Grade
JCR (A)
S&P (BBB)
Moody’s (Baa3)
2008 ’09 ’10 ’11 ’12
(CY)
Highest Rating Ever
71
Net Debt/EBITDA Multiple
Net Debt
$38.1bn
(JPY 2.97t)
EBITDA
$6.8bn
(JPY 0.53t)
5.6x
2.7x
Net Debt
$ 50.3bn
(JPY 3.9t)
EBITDA
$ 18.5bn
(JPY 1.44t)
Vodafone K.K. Sprint
Acquisition + SoftBank
* Pro forma.
* Non GAAP. Refer to disclaimer.
*Consolidated based on last 12 months EBITDA
72
Net Debt/EBITDA Multiple (Major global mobile operators)
SoftBank
(at Vodafone acquisition)
Telefonica
Telecom Italia
Sprint
+ SoftBank
Bharti Airtel
Verizon
AT&T Verizon SoftBank (Before Sprint acquisition)
* Pro forma
* Non GAAP. Refer to disclaimer.
Manageable
Debt Level
*Created by SOFTBANK CORP. based on Bloomberg data. Last 12 months EBITDA. Net debt as of June 30, 2012.
5.6x
1.4x
1.4x
3.1x
2.7x
2.7x
2.5x
2.1x
2.0x
73
Net Debt/EBITDA Multiple (Major companies in Japan)
Mitsubishi Sumitomo
ITOCHU Toyota Motor East Japan Railway Central Japan Railway Mitsui & CO., LTD
Bridgestone JX Holdings Honda Motor
NIPPON STEEL Mitsubishi Heavy Industries Nissan Motor
Sprint
+ SoftBank
* Non GAAP. Refer to disclaimer. * Pro forma
Manageable
Debt Level
*Created by SOFTBANK CORP. based on Bloomberg data
(select companies with market cap more than JPY 1t).
Last 12 months for EBITDA. Net debt as of June 30, 2012.
4.6x
4.5x
4.2x
4.2x
3.9x
3.7x
3.6x
3.2x
2.9x
2.7x
9.7x
7.7x
6.6x
6.1x
74
Dual Growth Engines
75
Consolidated Revenue
$80bn
(JPY 6.3t)
FY1981
FY2011
* Pro forma
Refer to Page 4 for SoftBank data
76
Consolidated EBITDA
$18bn
(JPY 1.4t)
* Pro forma
Refer to Page 4 for SoftBank data
FY1981
FY2011
* Non GAAP. Refer to disclaimer.
77
Consolidated Revenue
$54bn
(JPY 4.2t)
$46bn
(JPY 3.6t)
$46bn
(JPY 3.6t)
FY2005
FY2011
Refer to Page 4 for SoftBank data
78
Consolidated Revenue
$80bn
(JPY 6.3t)
$54bn
(JPY 4.2t)
$46bn
(JPY 3.6t)
Major Global
Operator
FY2005
FY2011
* Pro forma
Refer to Page 4 for SoftBank data
79
Mobile Revenue (January—June)
$43bn
$37bn
$32bn
Sprint
$32bn
$31bn
$27bn
$25bn
$18bn
China Verizon SoftBank AT&T Vodafone NTT Deutsche KDDI
Mobile + Sprint DOCOMO Telekom
* Pro forma
*Revenue from January to June 2012 Created by SOFTBANK CORP. based on respective companies’ publicly available information. Refer to Page 4 for SoftBank data
Global No.3
80
Subscribers
100m
0Apr. 2006
Sep. 2012
61m
39.5m
36m
Refer to Page 4 for SoftBank data
81
Subscribers
100m
0
96m
61m
36m
Sep. 2012
Apr. 2006
Expanded
US & Japan
Customer Base
* Pro forma
*Sprint’s subscribers as of June 30, 2012 Refer to Page 4 for SoftBank data
82
Subscribers
111m
105m
96m
61m
36m
33m
Expanded US & Japan Customer Base
SoftBank
Verizon AT&T + Sprint NTT DOCOMO au T-Mobile
*Source: Created by SOFTBANK CORP. based on data from Wireless Intelligence, TCA and respective companies’ publicly available information. Refer to Page 4 for SoftBank data.
Data for US: End of June 2012, Data for Japan: End of September 2012 * Pro forma
83
Summary
Global No.3 Mobile Operator (Revenue)
Compelling US Market Opportunity
Complementary Smartphone and LTE Strategies
Enhanced Sprint Financial Strength & Competitiveness
SoftBank’s Proven Turnaround & Debt Repayment Track Record
Significant Value to Both Companies’ Shareholders
84
Message for Customers in the US and Japan
Cutting-edge Smartphones
Advanced Network
Enhanced Competitiveness
85
Lifestyle Innovation through Mobile Internet
86
SoftBank+Sprint
Cautionary Statement
This document 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 document contains forward-looking statements relating to the proposed transaction between Sprint Nextel Corporation (“Sprint”) and SOFTBANK CORP. (“SOFTBANK”) and its group companies, including Starburst II, Inc. (“Starburst II”) pursuant to a merger agreement and bond purchase agreement. All statements, other than historical facts,including, but not limited to, 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 of the transaction such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of SOFTBANK or Sprint; 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, that (1) one or more closing conditions to the transaction may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction or that the required approval by Sprint stockholders may not be obtained; (2) there may be a material adverse change of SOFTBANK or Sprint, or the respective businesses of SOFTBANK or Sprint may suffer as a result of uncertainty surrounding the transaction; (3) the transaction may involve unexpected costs, liabilities or delays; (4) legal proceedings may be initiated related to the transaction; and (5) other risk factors as detailed from time to time in Sprint’s and Starburst II’s reports filed with the Securities and Exchange Commission (“SEC”), including Sprint’s Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, and the proxy statement/prospectus to be contained in Starburst II’s Registration Statement on Form S-4, which are, (or will be, when filed) available on the SEC’s web site (www.sec.gov). There can be no assurance that the merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the merger will be realized.
None of Sprint, SOFTBANK or Starburst II undertakes 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.
Additional Information and Where to Find It
In connection with the proposed strategic combination, Starburst II plans to file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Sprint, and that also will constitute a prospectus of Starburst II. Sprint will mail the proxy statement/prospectus to its stockholders. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The proxy statement/prospectus, as well as other filings containing information about Sprint and Starburst II will be available, free of charge, from the SEC’s web site (www.sec.gov). Sprint’s SEC filings in connection with the transaction also may be obtained, free of charge, from Sprint’s web site (www.sprint.com) under the tab “About Us – Investors” and then under the heading “Documents and Filings – SEC Filings,” or by directing a request to Sprint, 6200 Sprint Parkway, Overland Park, Kansas 66251, Attention: Shareholder Relations or (913) 794-1091.
Starburst II’s SEC filings in connection with the transaction (when filed) also may be obtained, free of charge, by directing a request to SOFTBANK, 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo 105-7303, Japan; telephone: +81.3.6889.2290; e-mail: ir@softbank.co.jp
Participants in the Merger Solicitation
The respective directors, executive officers and employees of Sprint, SOFTBANK, Starburst II and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Sprint’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2011. Other information regarding the interests of such individuals as well as information regarding SOFTBANK’s and Starburst II’s directors and executive officers will be available in the proxy statement/prospectus when it becomes available. These documents can be obtained free of charge from the sources indicated above. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
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Soliciting Material Pursuant to 14a-12
Cautionary Statement Regarding Forward Looking Statements
This document 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 document contains forward-looking statements relating to the proposed transaction between Sprint Nextel Corporation (“Sprint”) and SOFTBANK CORP. (“SoftBank”) and its group companies, including Starburst II, Inc. (“Starburst II”) pursuant to a merger agreement and bond purchase agreement. All statements, other than historical facts, including, but not limited to, 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 of the transaction such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction or that the required approval by Sprint stockholders may not be obtained; (2) there may be a material adverse change of SOFTBANK or Sprint, or the respective businesses of SoftBank or Sprint may suffer as a result of uncertainty surrounding the transaction; (3) the transaction may involve unexpected costs, liabilities or delays; (4) legal proceedings may be initiated related to the transaction; and (5) other risk factors as detailed from time to time in Sprint’s and Starburst II’s reports filed with the Securities and Exchange Commission (“SEC”), including Sprint’s Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, and the proxy statement/prospectus to be contained in Starburst II’s Registration Statement on Form S-4, which are, (or will be, when filed) available on the SEC’s web site (www.sec.gov). There can be no assurance that the merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the merger will be realized.
None of Sprint, SoftBank or Starburst II undertakes 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.
Additional Information and Where to Find It
In connection with the proposed strategic combination, Starburst II plans to file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Sprint, and that also will constitute a prospectus of Starburst II. Sprint will mail the proxy statement/prospectus to its stockholders. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The proxy statement/prospectus, as well as other filings containing information about Sprint and Starburst II will be available, free of charge, from the SEC’s web site (www.sec.gov). Sprint’s SEC filings in connection with the transaction also may be obtained, free of charge, from Sprint’s web site (www.Sprint.com) under the tab “About Us – Investors” and then under the heading “Documents and Filings – SEC Filings,” or by directing a request to Sprint, 6200 Sprint Parkway, Overland Park, Kansas 66251, Attention: Shareholder Relations or (913) 794-1091. Starburst II’s SEC filings in connection with the transaction (when filed) also may be obtained, free of charge, by directing a request to SoftBank, 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo 105-7303, Japan; telephone: +81.3.6889.2290; e-mail: ir@softbank.co.jp
ability and position of or Sprint; 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, that (1) one or more closing conditions to the transaction may not be satisfied or waived, on a timely basis or otherwise, including that a
Participants in the Merger Solicitation
The respective directors, executive officers and employees of Sprint, SoftBank, Starburst II and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Sprint’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2011. Other information regarding the interests of such individuals as well as information regarding SoftBank’s and Starburst II’s directors and executive officers will be available in the proxy statement/prospectus when it becomes available. These documents can be obtained free of charge from the sources indicated above. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
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Non-GAAP Financial Measures
Sprint Nextel provides financial measures determined in accordance with accounting principles generally accepted in the United States (GAAP) and adjusted GAAP (non-GAAP). The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. These measurements should be considered in addition to, but not as a substitute for, financial information prepared in accordance with GAAP. We have defined below each of the non-GAAP measures we use, but these measures may not be synonymous to similar measurement terms used by other companies.
Sprint Nextel provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint Nextel does not predict special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, Sprint Nextel does not provide reconciliations to GAAP of its forward-looking financial measures.
The measures used in this presentation include the following:
OIBDA is operating income/(loss) before depreciation and amortization. Adjusted OIBDA is OIBDA excluding severance, exit costs, and other special items. Adjusted OIBDA Margin represents Adjusted OIBDA divided by non-equipment net operating revenues for Wireless and Adjusted OIBDA divided by net operating revenues for Wireline. We believe that Adjusted OIBDA and Adjusted OIBDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, spectrum acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent non-cash current period costs associated with the use of long-lived tangible and definite-lived intangible assets. Adjusted OIBDA and Adjusted OIBDA Margin are calculations commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry.
This presentation may contain certain “non-GAAP” financial measures. SOFTBANK CORP. (“SoftBank”) uses certain non-GAAP performance measures and ratios in managing its business. Non-GAAP financial information should be viewed in addition to, and not as an alternative for, the reported operating results or cash flow from operations or any other measures of performance prepared in accordance with generally accepted accounting principles in Japan. In addition, the presentation of these measures may not be comparable to similarly titled measures other companies may use.
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