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Q3 2012 Earnings Call
October 25, 2012 4:30 pm ET
Erik E. Prusch - Chief Executive Officer, President and Director
Hope F. Cochran - Chief Financial Officer and Senior Vice President
John C. B. Saw - Chief Technology Officer and Senior Vice President
Walter Piecyk - BTIG, LLC, Research Division
Anthony Klarman - Deutsche Bank AG, Research Division
Michael J. Funk - BofA Merrill Lynch, Research Division
Jonathan A. Schildkraut - Evercore Partners Inc., Research Division
Donna Jaegers - D.A. Davidson & Co., Research Division
Shing Yin - Guggenheim Securities, LLC, Research Division
Richard H. Prentiss - Raymond James & Associates, Inc., Research Division
Philip Cusick - JP Morgan Chase & Co, Research Division
Previous Statements by CLWR
» Clearwire Management Discusses Q2 2012 Results - Earnings Call Transcript
» Clearwire's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Clearwire's CEO Discusses Q4 2011 Results - Earnings Call Transcript
Thank you, Karen. Good afternoon, and welcome to Clearwire's Third Quarter 2012 Financial Results Conference Call. With me today are Erik Prusch, Clearwire's President and Chief Executive Officer; and Hope Cochran, our Chief Financial Officer. John Saw, our Chief Technology Officer, is also available for the question-and-answer session.
Today's call is being webcast live on the Clearwire Investor Relations website and will be archived on that site and available for replay shortly after we conclude. Unless otherwise mentioned where applicable, all sequential comparisons in today's discussion reference second quarter -- third quarter 2012 financial measures and all year-over-year comparisons reference -- I'm sorry, all sequential comparisons for today's discussion reference second quarter 2012 financial measures and all year-over-year comparisons reference third quarter 2011 financial measures.
In addition, today's call may contain forward-looking statements reflecting management's beliefs and assumptions concerning future events, trends or expectations regarding financial results. Forward-looking statements include, among other things, our future financial and operating performance and financial conditions, including projections and targets for 2012 and subsequent periods, subscriber growth, network deployment or development plans, strategic plans and objectives and future liquidity.
These forward-looking statements are all based on currently available operating financial and competitive information and are subject to various risks and uncertainties. Listeners are cautioned not to put undue reliance on any forward-looking statements as they are not a guarantee of future performance.
Please refer to our press release and our filings with the SEC for more information concerning risk factors that could cause actual results to differ materially from those in the forward-looking statements. The company assumes no obligation to update any of these statements.
Finally, all mentions of EBITDA on this call reference adjusted EBITDA as defined in our press release where listeners may find definitions and reconciliations for all non-GAAP measures discussed today.
And all mentions of retail cash contribution represent retail revenue, less cost of goods and services sold to retail customers; G&A expenses, such as customer care, bad debt and sales and marketing expenses and CapEx related to leased CPE under our original retail model.
I will now turn the call over to Erik Prusch.
Erik E. Prusch
Thank you, Alice. Good afternoon, everyone. I'm pleased to be with you today in the midst of a very interesting few weeks in the wireless business. Before we get to our results, I'd like to address a topic that is undoubtedly on all of your minds, our relationship with Sprint and the effect of their recent agreements with SoftBank and Eagle River.
First, I want to congratulate SoftBank and Sprint on the recent announcement. We have a long history of working with SoftBank as cofounders of the global TDD-LTE initiative, TTI, and believe their enthusiasm for 2.5 gigahertz spectrum and TDD-LTE is extremely positive. We have great respect for what they have accomplished with TDD-LTE and believe the commonality between our 2 networks, both in terms of the TDD flavor of LTE and the 2.5 gigahertz band, will continue to drive a productive relationship.
We believe we are well aligned with SoftBank and that we both have a deep appreciation for the data opportunity in the United States and the desire to leverage our network capabilities and fast data speed to be a disruptive force in the industry to drive innovation, rapid revenue growth and long-term shareholder value.
We believe their acquisition of Sprint is a clear sign that Clearwire's unmatched spectrum position makes us a significant and valuable solution to the industry's growing need for 4G network capacity.
In addition, Sprint has historically been capital constrained versus the other national players, and we believe a stronger balance sheet and greater financial flexibility will make them more successful. As Sprint is our largest customer, we believe that bodes well for Clearwire.
With respect to the recent transaction between Sprint and Eagle River, specifically, I want to address some of the misperceptions about Sprint's increased stake and boding interest in Clearwire. I want to be crystal clear, Sprint has not gained any additional governance rights or board seats through their agreement to purchase Eagle River shares. The strategic investor group board seats and governance rights do not transfer when shares are sold. Of course, this means that Sprint wouldn't be able to gain additional governance rights even if they purchase the equity held by our other strategic investors.
If Sprint concludes the purchase of Eagle River shares in Clearwire, Sprint designated board seats will continue to be 7 seats. All 7 are currently filled by independent directors in part due to the 2010 decision by Sprint's management to step down from the board as a result of antitrust concerns. In fact, our entire board consists of independent directors, with the exception of me, due to my role as CEO.