[May 03, 2016] |
|
Sprint Finishes Fiscal Year 2015 by Generating Positive Annual Operating Income for the First Time in Nine Years and Delivering More Postpaid Phone Net Additions Than Verizon and AT&T for the First Time on Record in the Fiscal Fourth Quarter
Sprint Corporation (NYSE:S) today reported operating results for
fiscal year 2015 fourth quarter and full year, including a nearly two
million year-over-year improvement in Sprint platform postpaid phone net
additions and the lowest annual Sprint platform postpaid phone churn in
company history. The company also reported fiscal year 2015 net
operating revenue of $32.2 billion, operating income of $310 million,
and Adjusted EBITDA* of $8.1 billion, which grew 36 percent
year-over-year.
This Smart News Release features multimedia. View the full release here:
http://www.businesswire.com/news/home/20160503006056/en/
Source: Sprint analysis of Nielsen NMP data for total LTE downloads 150 KB+ in 44 markets (over 155M POPs). (Graphic: Business Wire)
For the fiscal fourth quarter, the company reported net operating
revenue of $8.1 billion, operating income of $8 million, and Adjusted
EBITDA* of $2.2 billion, which grew 24 percent year-over-year.
"Fiscal 2015 was a transformational year in the turnaround of Sprint. We
significantly reduced our operating expenses and stabilized operating
revenues, leading to positive operating income for the first time in
nine years. At the same time, we generated positive postpaid phone net
additions for the first time in three years, capped off by surpassing
both Verizon and AT&T for the first time on record this quarter," said
Sprint CEO Marcelo Claure. "These accomplishments provide positive
momentum heading into fiscal year 2016 and put the business on a path to
sustainable free cash flow."
Cost Reduction Effort Showing Results
Sprint has a multi-year plan to transform the way it does business and
significantly lower its cost structure. The company has realized a $1.3
billion reduction in cost of services and selling, general and
administrative (SG&A) expenses in fiscal year 2015.
Moving forward, Sprint expects a sustainable reduction of $2 billion or
more of run rate operating expenses exiting fiscal year 2016 and has
already realized a portion of these reductions with its fiscal 2015
fourth quarter results, as about half of the approximately $500 million
year-over-year reduction in cost of services and SG&A expenses was
related to these fiscal year 2016 initiatives. The company continues to
expect approximately $1 billion of transformation program costs, split
between both operating expenses and capital expenditures, to be incurred
to achieve the $2 billion or more of run rate benefit. Approximately
$200 million of the expected transformation program costs, mostly
related to severance, were incurred in fiscal year 2015.
The company also reported the following financial results:
-
Net operating revenues of $8.1 billion in the quarter decreased three
percent year-over-year, as growth in equipment revenue, mostly driven
by higher leasing revenue, helped offset lower wireless and wireline
service revenue. Net operating revenues have stabilized around $8
billion per quarter during fiscal year 2015.
For the full
year, net operating revenues of $32.2 billion decreased seven percent
year-over-year. The decline was largely due to Brightstar sourcing
some devices in Sprint's indirect channels, resulting in less
equipment revenues than if Sprint had fulfilled these channels. While
the impact to Adjusted EBITDA* was not material due to the offsetting
reduction in cost of products expense, net operating revenues would
have declined less year-over-year when adjusting for this change.
-
Wireless service revenue plus installment plan billings and lease
revenue, which represents the total recurring cash flows from
customers, was $7.1 billion in the fiscal fourth quarter and increased
one percent from the prior year period, as growth in both postpaid
phone customers and postpaid average billings per user* were partially
offset by lower prepaid service revenue.
For the full year,
wireless service revenue plus installment plan billings and lease
revenue of $28.4 billion was up slightly from the prior year.
-
Consolidated Adjusted EBITDA* of $2.2 billion in the fiscal fourth
quarter grew 24 percent from the prior year period, as expense
reductions, including approximately $500 million in cost of services
and SG&A expenses, more than offset the decline in net operating
revenues.
For the full year, Consolidated Adjusted EBITDA*
was $8.1 billion and grew 36 percent year-over-year.
-
Operating income of $8 million in the fiscal fourth quarter included
$258 million of charges and compared to operating income of $318
million in the year-ago quarter. The charges were mostly related to
severance and lease exit costs, including the shutdown of legacy WiMAX
service that will free up valuable spectrum and immediately lower
network costs. Adjusting for the charges in both periods, operating
income would have been relatively flat year-over-year.
For
the full year, operating income of $310 million improved by
approximately $2.2 billion and was positive for the first time in nine
years.
-
Net loss of $554 million, or $0.14 per share, in the fiscal fourth
quarter compared to a net loss of $224 million, or $0.06 per share, in
the year-ago period. Adjusting for the aforementioned charges, net
loss per share would have been relatively flat year-over-year.
For
the full year, net loss was approximately $2 billion, or $0.50 per
share, compared to a net loss of approximately $3.3 billion, or $0.85
per share, in the prior year, which is an improvement of $1.3 billion,
or $0.35 per share.
-
Adjusted free cash flow* was $603 million in the fiscal fourth quarter
compared to negative $914 million in the prior year, an improvement of
approximately $1.5 billion, which was driven by improved business
trends and lower capital spending.
For the full year,
Adjusted free cash flow* of negative $1.4 billion compared to negative
$3.3 billion in the prior year, an improvement of nearly $2 billion.
Postpaid Phone Customer Growth Continues
Sprint has been focused on attracting and retaining higher value
postpaid phone customers and added 22,000 of these customers in a highly
competitive fiscal fourth quarter, bringing the fiscal year total to
438,000 - an improvement of nearly two million from the prior year and
the third consecutive quarter of positive postpaid phone net additions.
Significant network improvements, a more compelling value proposition,
and better customer quality have led to higher customer retention, with
postpaid phone churn reaching a record low of 1.52 percent in fiscal
year 2015 and improving by approximately 50 basis points year-over-year.
For the fiscal fourth quarter, postpaid phone churn of 1.56 percent
improved 22 basis points year-over-year.
In addition, the company also saw year-over-year growth in postpaid
phone gross additions for both the fiscal fourth quarter and full year.
The company also reported the following Sprint platform results:
-
Total net additions were 447,000 in the fiscal fourth quarter,
including postpaid net additions of 56,000, prepaid net losses of
264,000, and wholesale and affiliate net additions of 655,000.
For
the full year, total net additions were nearly 2.7 million, including
postpaid net additions of more than 1.2 million, prepaid net losses of
1.3 million, and wholesale and affiliate net additions of over 2.7
million.
-
Postpaid churn of 1.72 percent in the fiscal fourth quarter improved
by 12 basis points year-over-year and was the lowest ever for a fiscal
fourth quarter.
For the full year, postpaid churn of 1.61
percent was also the best in company history and improved by
approximately 50 basis points year-over-year.
$11 Billion of Committed Liquidity
Sprint has taken several actions to improve its financial flexibility
and currently has $11 billion of committed liquidity, up from $6 billion
at the end of the fiscal third quarter. The company also has an
additional $1.2 billion of availability under vendor financing
agreements that can be used toward the purchase of 2.5 GHz network
equipment.
-
Total liquidity at the end of fiscal year 2015 was $5.7 billion,
including $2.6 billion of cash and cash equivalents, $3 billion of
undrawn borrowing capacity under the revolving bank credit facility,
and approximately $100 million of undrawn availability under the
receivables facility.
-
Sprint received $2.2 billion from the sale and lease-back of certain
existing network assets at an attractive cost of funding in the
mid-single digits. This transaction did not include any of the
company's spectrum assets.
-
The company executed its second sale-leaseback transaction of certain
leased devices with MLS, providing a $1.1 billion cash infusion.
-
Sprint signed an 18-month bridge financing facility for $2 billion
with better terms than its alternatives in the high-yield debt market.
These sources of liquidity are expected to provide the resources for the
company to execute its transformation plan and fully fund the repayment
of the $3.3 billion of note maturities that come due in fiscal year
2016. The company continues to consider financing initiatives, including
structures that would involve a small portion of its spectrum assets, as
well as additional transactions with MLS to fund its transformation,
continue to improve the network, and meet its future financial
obligations.
LTE Plus Network Expanding and Outperforming the Competition
The Sprint LTE Plus Network, which takes advantage of the company's rich
tri-band spectrum portfolio and uses some of the world's most advanced
technologies in wireless such as carrier aggregation and antenna
beamforming, is now available in 204 markets across the country,
including recent launches in New York City, Boston, and Philadelphia.
The expansion is driving network performance that is beating the
competition. An analysis of Nielsen Mobile Performance crowd-sourced
data from January through March 2016 showed that Sprint's LTE Plus
Network continued to outperform Verizon, AT&T and T-Mobile by delivering
the fastest LTE download speeds.
Total LTE coverage now reaches nearly 300 million people, including
approximately 70 percent being covered by the 2.5 GHz spectrum
deployment.
Outlook
-
The company expects fiscal year 2016 Adjusted EBITDA* to be $9.5
billion to $10 billion.
-
The company expects fiscal year 2016 operating income to be $1 billion
to $1.5 billion.
-
The company expects fiscal year 2016 cash capital expenditures,
excluding indirect channel device leases, to be approximately $3
billion, as non-network expenditures are expected to decline
year-over-year and more of the cash outlays related to network
densification are expected to be incurred in fiscal year 2017. The
company's deep spectrum position and its small cell focused
densification are also expected to improve overall capital efficiency.
-
The company expects fiscal year 2016 Adjusted free cash flow* to be
around break-even.
Conference Call and Webcast
-
Date/Time: 8:30 a.m. (ET) Tuesday, May 3, 2016
-
Call-in Information
-
U.S./Canada: 866-360-1063 (ID: 83132816)
-
International: 706-634-7849 (ID: 83132816)
-
Webcast available via the Internet at www.sprint.com/investors
-
Additional information about results, including the "Quarterly
Investor Update," is available on our Investor Relations website
|
Wireless Operating Statistics (Unaudited)
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
Sprint platform (1):
|
|
|
|
|
|
|
|
|
|
|
Net additions (losses) (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
56
|
|
|
|
501
|
|
|
|
211
|
|
|
|
1,245
|
|
|
|
(212
|
)
|
Prepaid
|
|
|
(264
|
)
|
|
|
(491
|
)
|
|
|
546
|
|
|
|
(1,309
|
)
|
|
|
449
|
|
Wholesale and affiliate
|
|
|
655
|
|
|
|
481
|
|
|
|
492
|
|
|
|
2,733
|
|
|
|
2,349
|
|
Total Sprint platform wireless net additions
|
|
|
447
|
|
|
|
491
|
|
|
|
1,249
|
|
|
|
2,669
|
|
|
|
2,586
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period connections (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
30,951
|
|
|
|
30,895
|
|
|
|
29,706
|
|
|
|
30,951
|
|
|
|
29,706
|
|
Prepaid
|
|
|
14,397
|
|
|
|
14,661
|
|
|
|
15,706
|
|
|
|
14,397
|
|
|
|
15,706
|
|
Wholesale and affiliate
|
|
|
13,458
|
|
|
|
12,803
|
|
|
|
10,725
|
|
|
|
13,458
|
|
|
|
10,725
|
|
Total Sprint platform end of period connections
|
|
|
58,806
|
|
|
|
58,359
|
|
|
|
56,137
|
|
|
|
58,806
|
|
|
|
56,137
|
|
|
|
|
|
|
|
|
|
|
|
|
Churn
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
1.72
|
%
|
|
|
1.62
|
%
|
|
|
1.84
|
%
|
|
|
1.61
|
%
|
|
|
2.09
|
%
|
Prepaid
|
|
|
5.65
|
%
|
|
|
5.82
|
%
|
|
|
3.84
|
%
|
|
|
5.39
|
%
|
|
|
3.99
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data - connected devices
|
|
|
|
|
|
|
|
|
|
|
End of period connections (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Retail postpaid
|
|
|
1,771
|
|
|
|
1,676
|
|
|
|
1,320
|
|
|
|
1,771
|
|
|
|
1,320
|
|
Wholesale and affiliate
|
|
|
8,575
|
|
|
|
7,930
|
|
|
|
5,832
|
|
|
|
8,575
|
|
|
|
5,832
|
|
Total
|
|
|
10,346
|
|
|
|
9,606
|
|
|
|
7,152
|
|
|
|
10,346
|
|
|
|
7,152
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data - total company
|
|
|
|
|
|
|
|
|
|
|
End of period connections (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Sprint platform (1)
|
|
|
58,806
|
|
|
|
58,359
|
|
|
|
56,137
|
|
|
|
58,806
|
|
|
|
56,137
|
|
Transactions (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,004
|
|
|
|
-
|
|
|
|
1,004
|
|
Total
|
|
|
58,806
|
|
|
|
58,359
|
|
|
|
57,141
|
|
|
|
58,806
|
|
|
|
57,141
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform ARPU (1) (a)
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
$
|
51.68
|
|
|
$
|
52.48
|
|
|
$
|
56.94
|
|
|
$
|
53.39
|
|
|
$
|
59.63
|
|
Prepaid
|
|
$
|
27.72
|
|
|
$
|
27.44
|
|
|
$
|
27.50
|
|
|
$
|
27.66
|
|
|
$
|
27.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RECONCILIATION - ABPA*, POSTPAID PHONE ARPU AND ABPU*
(Unaudited)
|
(Millions, except accounts, connections, ABPA*, ARPU, and ABPU*)
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
Sprint platform ABPA* (1)
|
|
|
|
|
|
|
|
|
|
|
Postpaid service revenue
|
|
$
|
4,793
|
|
|
$
|
4,813
|
|
|
$
|
5,049
|
|
|
$
|
19,463
|
|
|
$
|
21,181
|
|
Add: Installment plan billings
|
|
|
287
|
|
|
|
300
|
|
|
|
294
|
|
|
|
1,190
|
|
|
|
877
|
|
Add: Lease revenue
|
|
|
662
|
|
|
|
531
|
|
|
|
129
|
|
|
|
1,838
|
|
|
|
164
|
|
Total for Sprint platform postpaid connections
|
|
$
|
5,742
|
|
|
$
|
5,644
|
|
|
$
|
5,472
|
|
|
$
|
22,491
|
|
|
$
|
22,222
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform postpaid accounts (in thousands)
|
|
|
11,358
|
|
|
|
11,261
|
|
|
|
11,199
|
|
|
|
11,248
|
|
|
|
11,453
|
|
Sprint platform postpaid ABPA* (b)
|
|
$
|
168.49
|
|
|
$
|
167.11
|
|
|
$
|
162.89
|
|
|
$
|
166.63
|
|
|
$
|
161.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
Sprint platform postpaid phone ARPU and ABPU* (1)
|
|
|
|
|
|
|
|
|
|
|
Postpaid phone service revenue
|
|
$
|
4,512
|
|
|
$
|
4,529
|
|
|
$
|
4,772
|
|
|
$
|
18,331
|
|
|
$
|
20,095
|
|
Add: Installment plan billings
|
|
|
268
|
|
|
|
280
|
|
|
|
281
|
|
|
|
1,116
|
|
|
|
835
|
|
Add: Lease revenue
|
|
|
649
|
|
|
|
522
|
|
|
|
125
|
|
|
|
1,799
|
|
|
|
159
|
|
Total for Sprint platform postpaid phone connections
|
|
$
|
5,429
|
|
|
$
|
5,331
|
|
|
$
|
5,178
|
|
|
$
|
21,246
|
|
|
$
|
21,089
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform postpaid average phone connections (in thousands)
|
|
|
25,297
|
|
|
|
25,040
|
|
|
|
24,946
|
|
|
|
25,020
|
|
|
|
25,420
|
|
Sprint platform postpaid phone ARPU (a)
|
|
$
|
59.45
|
|
|
$
|
60.30
|
|
|
$
|
63.76
|
|
|
$
|
61.05
|
|
|
$
|
65.88
|
|
Sprint platform postpaid phone ABPU* (c)
|
|
$
|
71.53
|
|
|
$
|
70.99
|
|
|
$
|
69.19
|
|
|
$
|
70.77
|
|
|
$
|
69.14
|
|
|
(a) ARPU is calculated by dividing service revenue by
the sum of the monthly average number of connections in the
applicable service category. Changes in average monthly service
revenue reflect connections for either the postpaid or prepaid
service category who change rate plans, the level of voice and
data usage, the amount of service credits which are offered to
connections, plus the net effect of average monthly revenue
generated by new connections and deactivating connections.
|
Sprint platform postpaid phone ARPU represents revenues related to
our postpaid phone connections.
|
|
(b) Sprint platform postpaid ABPA* is calculated by
dividing service revenue earned from connections plus installment
plan billings and lease revenue by the sum of the monthly average
number of accounts during the period.
|
|
(c) Sprint platform postpaid phone ABPU* is calculated
by dividing postpaid phone service revenue earned from postpaid
phone connections plus installment plan billings and lease revenue
by the sum of the monthly average number of postpaid phone
connections during the period.
|
|
|
|
Wireless Device Financing Summary (Unaudited)
|
|
(Millions, except sales, connections, and sales and connections
mix)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid sales (in thousands)
|
|
|
3,438
|
|
|
|
4,799
|
|
|
|
4,057
|
|
|
|
16,394
|
|
|
|
17,326
|
|
|
Postpaid sales mix
|
|
|
|
|
|
|
|
|
|
|
|
Subsidy/other
|
|
|
37
|
%
|
|
|
35
|
%
|
|
|
47
|
%
|
|
|
36
|
%
|
|
|
61
|
%
|
|
Installment plans
|
|
|
18
|
%
|
|
|
10
|
%
|
|
|
16
|
%
|
|
|
13
|
%
|
|
|
22
|
%
|
|
Leasing
|
|
|
45
|
%
|
|
|
55
|
%
|
|
|
37
|
%
|
|
|
51
|
%
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid connections (in thousands)
|
|
|
30,951
|
|
|
|
30,895
|
|
|
|
29,706
|
|
|
|
30,951
|
|
|
|
29,706
|
|
|
Postpaid connections mix
|
|
|
|
|
|
|
|
|
|
|
|
Subsidy/other
|
|
|
54
|
%
|
|
|
56
|
%
|
|
|
75
|
%
|
|
|
54
|
%
|
|
|
75
|
%
|
|
Installment plans
|
|
|
13
|
%
|
|
|
14
|
%
|
|
|
15
|
%
|
|
|
13
|
%
|
|
|
15
|
%
|
|
Leasing
|
|
|
33
|
%
|
|
|
30
|
%
|
|
|
10
|
%
|
|
|
33
|
%
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Installment plans
|
|
|
|
|
|
|
|
|
|
|
|
Installment sales financed
|
|
$
|
311
|
|
|
$
|
251
|
|
|
$
|
347
|
|
|
$
|
1,059
|
|
|
$
|
2,200
|
|
|
Installment billings
|
|
|
287
|
|
|
|
300
|
|
|
|
294
|
|
|
|
1,190
|
|
|
|
877
|
|
|
Installments receivables, net
|
|
|
-
|
|
|
|
-
|
|
|
|
1,396
|
|
|
|
-
|
|
|
|
1,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasing
|
|
|
|
|
|
|
|
|
|
|
|
Lease revenue
|
|
$
|
662
|
|
|
$
|
531
|
|
|
$
|
129
|
|
|
$
|
1,838
|
|
|
$
|
164
|
|
|
Lease depreciation
|
|
|
550
|
|
|
|
535
|
|
|
|
150
|
|
|
|
1,781
|
|
|
|
206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased device additions:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for capital expenditures - leased devices
|
|
$
|
568
|
|
|
$
|
607
|
|
|
$
|
439
|
|
|
$
|
2,292
|
|
|
$
|
582
|
|
|
Transfers from inventory - leased devices
|
|
|
621
|
|
|
|
1,073
|
|
|
|
543
|
|
|
|
3,244
|
|
|
|
1,246
|
|
|
Total leased device additions
|
|
$
|
1,189
|
|
|
$
|
1,680
|
|
|
$
|
982
|
|
|
$
|
5,536
|
|
|
$
|
1,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased devices in property, plant and equipment, net
|
|
$
|
3,645
|
|
|
$
|
3,321
|
|
|
$
|
1,777
|
|
|
$
|
3,645
|
|
|
$
|
1,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased device net proceeds
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from MLS sale
|
|
$
|
-
|
|
|
$
|
1,136
|
|
|
$
|
-
|
|
|
$
|
1,136
|
|
|
$
|
-
|
|
|
Repayments to MLS
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Proceeds from lease securitization
|
|
|
600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
600
|
|
|
|
-
|
|
|
Repayments of lease securitization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net proceeds from the sale-leaseback of devices and sales of
future lease receivables
|
|
$
|
600
|
|
|
$
|
1,136
|
|
|
$
|
-
|
|
|
$
|
1,736
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
(Millions, except per share data)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
Net operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue
|
|
$
|
6,574
|
|
|
$
|
6,683
|
|
|
$
|
7,138
|
|
|
$
|
27,174
|
|
|
$
|
29,542
|
|
|
Equipment revenue
|
|
|
1,497
|
|
|
|
1,424
|
|
|
|
1,144
|
|
|
|
5,006
|
|
|
|
4,990
|
|
|
Total net operating revenues
|
|
|
8,071
|
|
|
|
8,107
|
|
|
|
8,282
|
|
|
|
32,180
|
|
|
|
34,532
|
|
|
Net operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services (exclusive of depreciation and amortization below)
|
|
|
2,245
|
|
|
|
2,348
|
|
|
|
2,381
|
|
|
|
9,439
|
|
|
|
9,660
|
|
|
Cost of products (exclusive of depreciation and amortization below)
|
|
|
1,551
|
|
|
|
1,589
|
|
|
|
1,827
|
|
|
|
5,795
|
|
|
|
9,309
|
|
|
Selling, general and administrative
|
|
|
1,939
|
|
|
|
2,129
|
|
|
|
2,331
|
|
|
|
8,479
|
|
|
|
9,563
|
|
|
Depreciation
|
|
|
1,592
|
|
|
|
1,549
|
|
|
|
1,091
|
|
|
|
5,794
|
|
|
|
3,797
|
|
|
Amortization
|
|
|
300
|
|
|
|
316
|
|
|
|
363
|
|
|
|
1,294
|
|
|
|
1,552
|
|
|
Impairments (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,133
|
|
|
Other, net
|
|
|
436
|
|
|
|
373
|
|
|
|
(29
|
)
|
|
|
1,069
|
|
|
|
413
|
|
|
Total net operating expenses
|
|
|
8,063
|
|
|
|
8,304
|
|
|
|
7,964
|
|
|
|
31,870
|
|
|
|
36,427
|
|
|
Operating income (loss)
|
|
|
8
|
|
|
|
(197
|
)
|
|
|
318
|
|
|
|
310
|
|
|
|
(1,895
|
)
|
|
Interest expense
|
|
|
(552
|
)
|
|
|
(546
|
)
|
|
|
(523
|
)
|
|
|
(2,182
|
)
|
|
|
(2,051
|
)
|
|
Other income, net
|
|
|
5
|
|
|
|
4
|
|
|
|
8
|
|
|
|
18
|
|
|
|
27
|
|
|
Loss before income taxes
|
|
|
(539
|
)
|
|
|
(739
|
)
|
|
|
(197
|
)
|
|
|
(1,854
|
)
|
|
|
(3,919
|
)
|
|
Income tax (expense) benefit
|
|
|
(15
|
)
|
|
|
(97
|
)
|
|
|
(27
|
)
|
|
|
(141
|
)
|
|
|
574
|
|
|
Net loss
|
|
$
|
(554
|
)
|
|
$
|
(836
|
)
|
|
$
|
(224
|
)
|
|
$
|
(1,995
|
)
|
|
$
|
(3,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.14
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.85
|
)
|
|
Weighted average common shares outstanding
|
|
|
3,972
|
|
|
|
3,970
|
|
|
|
3,962
|
|
|
|
3,969
|
|
|
|
3,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
-2.8
|
%
|
|
|
-13.1
|
%
|
|
|
-13.7
|
%
|
|
|
-7.6
|
%
|
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RECONCILIATION - NET LOSS TO ADJUSTED EBITDA* (Unaudited)
|
|
(Millions)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(554
|
)
|
|
$
|
(836
|
)
|
|
$
|
(224
|
)
|
|
$
|
(1,995
|
)
|
|
$
|
(3,345
|
)
|
|
Income tax expense (benefit)
|
|
|
15
|
|
|
|
97
|
|
|
|
27
|
|
|
|
141
|
|
|
|
(574
|
)
|
|
Loss before income taxes
|
|
|
(539
|
)
|
|
|
(739
|
)
|
|
|
(197
|
)
|
|
|
(1,854
|
)
|
|
|
(3,919
|
)
|
|
Other income, net
|
|
|
(5
|
)
|
|
|
(4
|
)
|
|
|
(8
|
)
|
|
|
(18
|
)
|
|
|
(27
|
)
|
|
Interest expense
|
|
|
552
|
|
|
|
546
|
|
|
|
523
|
|
|
|
2,182
|
|
|
|
2,051
|
|
|
Operating income (loss)
|
|
|
8
|
|
|
|
(197
|
)
|
|
|
318
|
|
|
|
310
|
|
|
|
(1,895
|
)
|
|
Depreciation
|
|
|
1,592
|
|
|
|
1,549
|
|
|
|
1,091
|
|
|
|
5,794
|
|
|
|
3,797
|
|
|
Amortization
|
|
|
300
|
|
|
|
316
|
|
|
|
363
|
|
|
|
1,294
|
|
|
|
1,552
|
|
|
EBITDA* (4)
|
|
|
1,900
|
|
|
|
1,668
|
|
|
|
1,772
|
|
|
|
7,398
|
|
|
|
3,454
|
|
|
Impairments (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,133
|
|
|
Loss from asset dispositions and exchanges, net (5)
|
|
|
81
|
|
|
|
-
|
|
|
|
-
|
|
|
|
166
|
|
|
|
-
|
|
|
Severance and exit costs (6)
|
|
|
162
|
|
|
|
209
|
|
|
|
(29
|
)
|
|
|
409
|
|
|
|
304
|
|
|
Litigation (7)
|
|
|
15
|
|
|
|
21
|
|
|
|
-
|
|
|
|
193
|
|
|
|
91
|
|
|
Partial pension settlement (8)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
59
|
|
|
Reduction in liability - U.S. Cellular asset acquisition (9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(20
|
)
|
|
|
(41
|
)
|
|
Adjusted EBITDA* (4)
|
|
$
|
2,158
|
|
|
$
|
1,898
|
|
|
$
|
1,743
|
|
|
$
|
8,146
|
|
|
$
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin*
|
|
|
32.8
|
%
|
|
|
28.4
|
%
|
|
|
24.4
|
%
|
|
|
30.0
|
%
|
|
|
20.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for capital expenditures - network and other
|
|
$
|
722
|
|
|
$
|
994
|
|
|
$
|
1,608
|
|
|
$
|
4,680
|
|
|
$
|
5,422
|
|
|
Cash paid for capital expenditures - leased devices
|
|
$
|
568
|
|
|
$
|
607
|
|
|
$
|
439
|
|
|
$
|
2,292
|
|
|
$
|
582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
|
|
(Millions)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
Net operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform (1):
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
$
|
4,793
|
|
|
$
|
4,813
|
|
|
$
|
5,049
|
|
|
$
|
19,463
|
|
|
$
|
21,181
|
|
|
Prepaid
|
|
|
1,203
|
|
|
|
1,224
|
|
|
|
1,272
|
|
|
|
4,986
|
|
|
|
4,905
|
|
|
Wholesale, affiliate and other
|
|
|
155
|
|
|
|
182
|
|
|
|
189
|
|
|
|
703
|
|
|
|
724
|
|
|
Total Sprint platform
|
|
|
6,151
|
|
|
|
6,219
|
|
|
|
6,510
|
|
|
|
25,152
|
|
|
|
26,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transactions (2)
|
|
|
3
|
|
|
|
27
|
|
|
|
118
|
|
|
|
219
|
|
|
|
527
|
|
|
Total service revenue
|
|
|
6,154
|
|
|
|
6,246
|
|
|
|
6,628
|
|
|
$
|
25,371
|
|
|
$
|
27,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment revenue
|
|
|
1,497
|
|
|
|
1,424
|
|
|
|
1,144
|
|
|
|
5,006
|
|
|
|
4,990
|
|
|
Total net operating revenues
|
|
|
7,651
|
|
|
|
7,670
|
|
|
|
7,772
|
|
|
|
30,377
|
|
|
|
32,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services (exclusive of depreciation and amortization below)
|
|
|
1,922
|
|
|
|
2,031
|
|
|
|
2,006
|
|
|
|
8,069
|
|
|
|
7,945
|
|
|
Cost of products (exclusive of depreciation and amortization below)
|
|
|
1,551
|
|
|
|
1,589
|
|
|
|
1,827
|
|
|
|
5,795
|
|
|
|
9,309
|
|
|
Selling, general and administrative
|
|
|
1,868
|
|
|
|
2,041
|
|
|
|
2,242
|
|
|
|
8,141
|
|
|
|
9,179
|
|
|
Depreciation
|
|
|
1,541
|
|
|
|
1,496
|
|
|
|
1,044
|
|
|
|
5,593
|
|
|
|
3,560
|
|
|
Amortization
|
|
|
300
|
|
|
|
316
|
|
|
|
362
|
|
|
|
1,294
|
|
|
|
1,549
|
|
|
Impairments (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,900
|
|
|
Other, net
|
|
|
434
|
|
|
|
353
|
|
|
|
(29
|
)
|
|
|
1,045
|
|
|
|
349
|
|
|
Total net operating expenses
|
|
|
7,616
|
|
|
|
7,826
|
|
|
|
7,452
|
|
|
|
29,937
|
|
|
|
33,791
|
|
|
Operating income (loss)
|
|
$
|
35
|
|
|
$
|
(156
|
)
|
|
$
|
320
|
|
|
$
|
440
|
|
|
$
|
(1,464
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELESS NON-GAAP RECONCILIATION (Unaudited)
|
|
(Millions)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
35
|
|
|
$
|
(156
|
)
|
|
$
|
320
|
|
|
$
|
440
|
|
|
$
|
(1,464
|
)
|
|
Impairments (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,900
|
|
|
Loss from asset dispositions and exchanges, net (5)
|
|
|
81
|
|
|
|
-
|
|
|
|
-
|
|
|
|
166
|
|
|
|
-
|
|
|
Severance and exit costs (6)
|
|
|
160
|
|
|
|
189
|
|
|
|
(29
|
)
|
|
|
385
|
|
|
|
263
|
|
|
Litigation (7)
|
|
|
15
|
|
|
|
21
|
|
|
|
-
|
|
|
|
193
|
|
|
|
84
|
|
|
Partial pension settlement (8)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
43
|
|
|
Reduction in liability - U.S. Cellular asset acquisition (9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(20
|
)
|
|
|
(41
|
)
|
|
Depreciation
|
|
|
1,541
|
|
|
|
1,496
|
|
|
|
1,044
|
|
|
|
5,593
|
|
|
|
3,560
|
|
|
Amortization
|
|
|
300
|
|
|
|
316
|
|
|
|
362
|
|
|
|
1,294
|
|
|
|
1,549
|
|
|
Adjusted EBITDA* (4)
|
|
$
|
2,132
|
|
|
$
|
1,866
|
|
|
$
|
1,697
|
|
|
$
|
8,051
|
|
|
$
|
5,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin*
|
|
|
34.6
|
%
|
|
|
29.9
|
%
|
|
|
25.6
|
%
|
|
|
31.7
|
%
|
|
|
21.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for capital expenditures - network and other
|
|
$
|
577
|
|
|
$
|
869
|
|
|
$
|
1,518
|
|
|
$
|
4,089
|
|
|
$
|
4,860
|
|
|
Cash paid for capital expenditures - leased devices
|
|
$
|
568
|
|
|
$
|
607
|
|
|
$
|
439
|
|
|
$
|
2,292
|
|
|
$
|
582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
|
|
(Millions)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
Net operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
|
$
|
194
|
|
|
$
|
201
|
|
|
$
|
264
|
|
|
$
|
840
|
|
|
$
|
1,174
|
|
|
Data
|
|
|
37
|
|
|
|
42
|
|
|
|
52
|
|
|
|
171
|
|
|
|
213
|
|
|
Internet
|
|
|
316
|
|
|
|
317
|
|
|
|
335
|
|
|
|
1,284
|
|
|
|
1,353
|
|
|
Other
|
|
|
15
|
|
|
|
21
|
|
|
|
17
|
|
|
|
87
|
|
|
|
74
|
|
|
Total net operating revenues
|
|
|
562
|
|
|
|
581
|
|
|
|
668
|
|
|
|
2,382
|
|
|
|
2,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services (exclusive of depreciation and amortization below)
|
|
|
467
|
|
|
|
466
|
|
|
|
538
|
|
|
|
1,962
|
|
|
|
2,338
|
|
|
Selling, general and administrative
|
|
|
74
|
|
|
|
82
|
|
|
|
90
|
|
|
|
328
|
|
|
|
363
|
|
|
Depreciation and amortization
|
|
|
50
|
|
|
|
50
|
|
|
|
46
|
|
|
|
194
|
|
|
|
232
|
|
|
Impairments (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
233
|
|
|
Other, net
|
|
|
3
|
|
|
|
20
|
|
|
|
(2
|
)
|
|
|
25
|
|
|
|
61
|
|
|
Total net operating expenses
|
|
|
594
|
|
|
|
618
|
|
|
|
672
|
|
|
|
2,509
|
|
|
|
3,227
|
|
|
Operating loss
|
|
$
|
(32
|
)
|
|
$
|
(37
|
)
|
|
$
|
(4
|
)
|
|
$
|
(127
|
)
|
|
$
|
(413
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
|
|
(Millions)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
$
|
(32
|
)
|
|
$
|
(37
|
)
|
|
$
|
(4
|
)
|
|
$
|
(127
|
)
|
|
$
|
(413
|
)
|
|
Impairments (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
233
|
|
|
Severance and exit costs (6)
|
|
|
3
|
|
|
|
20
|
|
|
|
(2
|
)
|
|
|
25
|
|
|
|
39
|
|
|
Litigation (7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
Partial pension settlement (8)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16
|
|
|
Depreciation and amortization
|
|
|
50
|
|
|
|
50
|
|
|
|
46
|
|
|
|
194
|
|
|
|
232
|
|
|
Adjusted EBITDA*
|
|
$
|
21
|
|
|
$
|
33
|
|
|
$
|
40
|
|
|
$
|
92
|
|
|
$
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin*
|
|
|
3.7
|
%
|
|
|
5.7
|
%
|
|
|
6.0
|
%
|
|
|
3.9
|
%
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for capital expenditures - network and other
|
|
$
|
74
|
|
|
$
|
74
|
|
|
$
|
70
|
|
|
$
|
279
|
|
|
$
|
275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)**
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
Year To Date
|
|
|
|
|
|
|
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
|
|
$
|
(1,995
|
)
|
|
$
|
(3,345
|
)
|
|
Impairments (3)
|
|
|
|
|
|
|
|
|
-
|
|
|
|
2,133
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
7,088
|
|
|
|
5,349
|
|
|
Provision for losses on accounts receivable
|
|
|
|
|
|
|
|
|
455
|
|
|
|
892
|
|
|
Share-based and long-term incentive compensation expense
|
|
|
|
|
|
|
|
|
75
|
|
|
|
86
|
|
|
Deferred income tax expense (benefit)
|
|
|
|
|
|
|
|
|
123
|
|
|
|
(609
|
)
|
|
Amortization of long-term debt premiums, net
|
|
|
|
|
|
|
|
|
(316
|
)
|
|
|
(303
|
)
|
|
Loss on disposal of property, plant and equipment
|
|
|
|
|
|
|
|
|
487
|
|
|
|
-
|
|
|
Other changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and notes receivable
|
|
|
|
|
|
|
|
|
(1,663
|
)
|
|
|
(644
|
)
|
|
Inventories and other current assets
|
|
|
|
|
|
|
|
|
(3,065
|
)
|
|
|
(1,573
|
)
|
|
Deferred purchase price from sale of receivables
|
|
|
|
|
|
|
|
|
2,478
|
|
|
|
-
|
|
|
Accounts payable and other current liabilities
|
|
|
|
|
|
|
|
|
(574
|
)
|
|
|
481
|
|
|
Non-current assets and liabilities, net
|
|
|
|
|
|
|
|
|
111
|
|
|
|
(199
|
)
|
|
Other, net
|
|
|
|
|
|
|
|
|
693
|
|
|
|
182
|
|
|
Net cash provided by operating activities
|
|
|
|
|
|
|
|
|
3,897
|
|
|
|
2,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures - network and other
|
|
|
|
|
|
|
|
|
(4,680
|
)
|
|
|
(5,422
|
)
|
|
Capital expenditures - leased devices
|
|
|
|
|
|
|
|
|
(2,292
|
)
|
|
|
(582
|
)
|
|
Expenditures relating to FCC licenses
|
|
|
|
|
|
|
|
|
(98
|
)
|
|
|
(163
|
)
|
|
Reimbursements relating to FCC licenses
|
|
|
|
|
|
|
|
|
-
|
|
|
|
95
|
|
|
Change in short-term investments, net
|
|
|
|
|
|
|
|
|
166
|
|
|
|
1,054
|
|
|
Proceeds from sales of assets and FCC licenses
|
|
|
|
|
|
|
|
|
62
|
|
|
|
315
|
|
|
Proceeds from sale-leaseback transaction
|
|
|
|
|
|
|
|
|
1,136
|
|
|
|
-
|
|
|
Other, net
|
|
|
|
|
|
|
|
|
(29
|
)
|
|
|
(11
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
|
|
(5,735
|
)
|
|
|
(4,714
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from debt and financings
|
|
|
|
|
|
|
|
|
755
|
|
|
|
1,930
|
|
|
Repayments of debt, financing and capital lease obligations
|
|
|
|
|
|
|
|
|
(899
|
)
|
|
|
(574
|
)
|
|
Proceeds from sales of future lease receivables
|
|
|
|
|
|
|
|
|
600
|
|
|
|
-
|
|
|
Debt financing costs
|
|
|
|
|
|
|
|
|
(11
|
)
|
|
|
(87
|
)
|
|
Proceeds from issuance of common stock, net
|
|
|
|
|
|
|
|
|
10
|
|
|
|
35
|
|
|
Other, net
|
|
|
|
|
|
|
|
|
14
|
|
|
|
-
|
|
|
Net cash provided by financing activities
|
|
|
|
|
|
|
|
|
469
|
|
|
|
1,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
|
|
|
(1,369
|
)
|
|
|
(960
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
|
|
|
|
4,010
|
|
|
|
4,970
|
|
|
Cash and cash equivalents, end of period
|
|
|
|
|
|
|
|
$
|
2,641
|
|
|
$
|
4,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP)
(Unaudited)
|
|
(Millions)
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
|
|
3/31/16
|
|
|
|
12/31/15
|
|
|
|
3/31/15
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
1,294
|
|
|
$
|
806
|
|
|
$
|
976
|
|
|
$
|
3,897
|
|
|
$
|
2,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures - network and other
|
|
|
(722
|
)
|
|
|
(994
|
)
|
|
|
(1,608
|
)
|
|
|
(4,680
|
)
|
|
|
(5,422
|
)
|
|
Capital expenditures - leased devices
|
|
|
(568
|
)
|
|
|
(607
|
)
|
|
|
(439
|
)
|
|
|
(2,292
|
)
|
|
|
(582
|
)
|
|
Expenditures relating to FCC licenses, net
|
|
|
(23
|
)
|
|
|
(30
|
)
|
|
|
(42
|
)
|
|
|
(98
|
)
|
|
|
(68
|
)
|
|
Proceeds from sales of assets and FCC licenses
|
|
|
26
|
|
|
|
32
|
|
|
|
201
|
|
|
|
62
|
|
|
|
315
|
|
|
Other investing activities, net
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(2
|
)
|
|
|
(29
|
)
|
|
|
(11
|
)
|
|
Free cash flow*
|
|
$
|
3
|
|
|
$
|
(797
|
)
|
|
$
|
(914
|
)
|
|
$
|
(3,140
|
)
|
|
$
|
(3,318
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from the sale-leaseback of devices and sales of future
lease receivables
|
|
|
600
|
|
|
|
1,136
|
|
|
|
-
|
|
|
|
1,736
|
|
|
|
-
|
|
|
Adjusted free cash flow*
|
|
$
|
603
|
|
|
$
|
339
|
|
|
$
|
(914
|
)
|
|
$
|
(1,404
|
)
|
|
$
|
(3,318
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Certain prior period amounts have been reclassified to conform to
the current period presentation.
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(Millions)
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,641
|
|
|
$
|
4,010
|
|
Short-term investments
|
|
|
-
|
|
|
|
166
|
|
Accounts and notes receivable, net
|
|
|
1,099
|
|
|
|
2,290
|
|
Device and accessory inventory
|
|
|
1,173
|
|
|
|
1,359
|
|
Deferred tax assets
|
|
|
-
|
|
|
|
62
|
|
Prepaid expenses and other current assets
|
|
|
1,920
|
|
|
|
1,890
|
|
Total current assets
|
|
|
6,833
|
|
|
|
9,777
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
20,297
|
|
|
|
19,721
|
|
Goodwill
|
|
|
6,575
|
|
|
|
6,575
|
|
FCC licenses and other
|
|
|
40,073
|
|
|
|
39,987
|
|
Definite-lived intangible assets, net
|
|
|
4,469
|
|
|
|
5,893
|
|
Other assets (10)
|
|
|
728
|
|
|
|
888
|
|
Total assets
|
|
$
|
78,975
|
|
|
$
|
82,841
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
2,899
|
|
|
$
|
4,347
|
|
Accrued expenses and other current liabilities
|
|
|
4,374
|
|
|
|
5,293
|
|
Current portion of long-term debt, financing and capital lease
obligations
|
|
|
4,690
|
|
|
|
1,300
|
|
Total current liabilities
|
|
|
11,963
|
|
|
|
10,940
|
|
|
|
|
|
|
Long-term debt, financing and capital lease obligations (10)
|
|
|
29,268
|
|
|
|
32,342
|
|
Deferred tax liabilities
|
|
|
13,959
|
|
|
|
13,898
|
|
Other liabilities
|
|
|
4,002
|
|
|
|
3,951
|
|
Total liabilities
|
|
|
59,192
|
|
|
|
61,131
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Common stock
|
|
|
40
|
|
|
|
40
|
|
Treasury shares, at cost
|
|
|
(3
|
)
|
|
|
(7
|
)
|
Paid-in capital
|
|
|
27,563
|
|
|
|
27,468
|
|
Accumulated deficit
|
|
|
(7,378
|
)
|
|
|
(5,383
|
)
|
Accumulated other comprehensive loss
|
|
|
(439
|
)
|
|
|
(408
|
)
|
Total stockholders' equity
|
|
|
19,783
|
|
|
|
21,710
|
|
Total liabilities and stockholders' equity
|
|
$
|
78,975
|
|
|
$
|
82,841
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT* (NON-GAAP) (Unaudited)
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
3/31/16
|
|
|
|
3/31/15
|
|
Total debt
|
|
$
|
33,958
|
|
|
$
|
33,642
|
|
Less: Cash and cash equivalents
|
|
|
(2,641
|
)
|
|
|
(4,010
|
)
|
Less: Short-term investments
|
|
|
-
|
|
|
|
(166
|
)
|
|
|
|
|
|
|
|
|
|
Net debt*
|
|
$
|
31,317
|
|
|
$
|
29,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE OF DEBT (Unaudited)
|
|
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/16
|
|
ISSUER
|
|
COUPON
|
|
MATURITY
|
|
PRINCIPAL
|
|
Sprint Corporation
|
|
|
|
|
|
|
|
7.25% Notes due 2021
|
|
7.250%
|
|
09/15/2021
|
|
$
|
2,250
|
|
7.875% Notes due 2023
|
|
7.875%
|
|
09/15/2023
|
|
|
4,250
|
|
7.125% Notes due 2024
|
|
7.125%
|
|
06/15/2024
|
|
|
2,500
|
|
7.625% Notes due 2025
|
|
7.625%
|
|
02/15/2025
|
|
|
1,500
|
|
Sprint Corporation
|
|
|
|
|
|
|
10,500
|
|
|
|
|
|
|
|
|
|
Sprint Communications, Inc.
|
|
|
|
|
|
|
|
Export Development Canada Facility (Tranche 4)
|
|
5.914%
|
|
12/15/2017
|
|
|
250
|
|
Export Development Canada Facility (Tranche 3)
|
|
4.164%
|
|
12/17/2019
|
|
|
300
|
|
6% Senior notes due 2016
|
|
6.000%
|
|
12/01/2016
|
|
|
2,000
|
|
9.125% Senior notes due 2017
|
|
9.125%
|
|
03/01/2017
|
|
|
1,000
|
|
8.375% Senior notes due 2017
|
|
8.375%
|
|
08/15/2017
|
|
|
1,300
|
|
9% Guaranteed notes due 2018
|
|
9.000%
|
|
11/15/2018
|
|
|
3,000
|
|
7% Guaranteed notes due 2020
|
|
7.000%
|
|
03/01/2020
|
|
|
1,000
|
|
7% Senior notes due 2020
|
|
7.000%
|
|
08/15/2020
|
|
|
1,500
|
|
11.5% Senior notes due 2021
|
|
11.500%
|
|
11/15/2021
|
|
|
1,000
|
|
9.25% Debentures due 2022
|
|
9.250%
|
|
04/15/2022
|
|
|
200
|
|
6% Senior notes due 2022
|
|
6.000%
|
|
11/15/2022
|
|
|
2,280
|
|
Sprint Communications, Inc.
|
|
|
|
|
|
|
13,830
|
|
|
|
|
|
|
|
|
|
Sprint Capital Corporation
|
|
|
|
|
|
|
|
6.9% Senior notes due 2019
|
|
6.900%
|
|
05/01/2019
|
|
|
1,729
|
|
6.875% Senior notes due 2028
|
|
6.875%
|
|
11/15/2028
|
|
|
2,475
|
|
8.75% Senior notes due 2032
|
|
8.750%
|
|
03/15/2032
|
|
|
2,000
|
|
Sprint Capital Corporation
|
|
|
|
|
|
|
6,204
|
|
|
|
|
|
|
|
|
|
Clearwire Communications LLC
|
|
|
|
|
|
|
|
14.75% First-priority senior secured notes due 2016
|
|
14.750%
|
|
12/01/2016
|
|
|
300
|
|
8.25% Exchangeable notes due 2040
|
|
8.250%
|
|
12/01/2040
|
|
|
629
|
|
Clearwire Communications LLC
|
|
|
|
|
|
|
929
|
|
|
|
|
|
|
|
|
|
Secured equipment credit facilities
|
|
2.020% - 2.745%
|
|
2017 - 2021
|
|
|
805
|
|
|
|
|
|
|
|
|
|
Financing obligations
|
|
2.016% - 6.098%
|
|
2017 - 2021
|
|
|
828
|
|
|
|
|
|
|
|
|
|
Capital lease obligations and other
|
|
2.348% - 10.517%
|
|
2016 - 2023
|
|
|
265
|
|
Total principal
|
|
|
|
|
|
|
33,361
|
|
|
|
|
|
|
|
|
|
Net premiums and debt financing costs
|
|
|
|
|
|
|
597
|
|
Total debt
|
|
|
|
|
|
$
|
33,958
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE FINANCIAL INFORMATION (Unaudited)
|
|
|
|
(1)
|
|
Sprint platform refers to the Sprint network that supports the
wireless service we provide through our multiple brands.
|
|
|
|
(2)
|
|
Postpaid and prepaid connections from transactions are defined as
retail postpaid and prepaid connections acquired from Clearwire in
July 2013 who had not deactivated or been recaptured on the Sprint
platform.
|
|
|
|
(3)
|
|
For the third quarter of fiscal year 2014, impairment losses were
recorded after determining that the carrying value exceeded
estimated fair value of both the Sprint trade name and Wireline
asset group, which consists primarily of property, plant and
equipment.
|
|
|
|
(4)
|
|
As more of our customers elect to lease a device rather than
purchasing one under our subsidized program, there is a positive
impact to EBITDA* and Adjusted EBITDA* primarily due to the fact
the cost of the device is not recorded as cost of products but
rather is depreciated over the customer lease term. Under our
device leasing program for the direct channel, devices are
transferred from inventory to property and equipment and the cost
of the leased device is recognized as depreciation expense over
the customer lease term to an estimated residual value. The
customer payments are recognized as revenue over the term of the
lease. Under our subsidized program, the cash received from the
customer for the device is recognized as equipment revenue at the
point of sale and the cost of the device is recognized as cost of
products. During the three and twelve-month periods ended March
31, 2016, we leased devices through our Sprint direct channels
totaling approximately $600 million and $3.2 billion,
respectively, which would have increased cost of products and
reduced EBITDA* if they had been purchased under our subsidized
program. Also, during the three and twelve-month periods ended
March 31, 2016, the equipment revenue derived from customers
electing to finance their devices through device leasing or
installment billing programs in our direct channel was 58% and
51%, respectively.
The impact to EBITDA* and Adjusted EBITDA* resulting from the sale
of devices under our installment billing program is neutral except
for the impact from the time value of money element related to the
imputed interest on the installment receivable.
|
|
|
|
(5)
|
|
During the fourth and second quarters of fiscal year 2015, we
recorded losses on dispositions of assets primarily related to
network development costs that are no longer relevant as a result of
changes in the Company's network plans.
|
|
|
|
(6)
|
|
Severance and exit costs consist of lease exit costs primarily
associated with tower and cell sites, access exit costs related to
payments that will continue to be made under our backhaul access
contracts for which we will no longer be receiving any economic
benefit, and severance costs associated with reduction in our work
force.
|
|
|
|
(7)
|
|
For the fourth and third quarters of fiscal year 2015, litigation
activity is a result of unfavorable developments in connection with
pending litigation.
|
|
|
|
(8)
|
|
The partial pension settlement resulted from amounts paid to
eligible terminated participants who voluntarily elected to receive
lump sum distributions as a result of an approved plan amendment to
the Sprint Retirement Pension Plan by the Board of Directors in June
2014.
|
|
|
|
(9)
|
|
As a result of the U.S. Cellular asset acquisition, we recorded a
liability related to network shut-down costs, which primarily
consisted of lease exit costs, for which we agreed to reimburse U.S.
Cellular. During the third quarter of fiscal year 2014, we
identified favorable trends in actual costs and, as a result,
reduced the liability resulting in a gain of approximately $41
million. During the first quarter of fiscal year 2015, we revised
our estimate and, as a result, reduced the liability resulting in
approximately $20 million of income.
|
|
|
|
(10)
|
|
During the fourth quarter of fiscal year 2015, the Company elected
to adopt accounting guidance which requires that debt issuance costs
related to a recognized debt liability be presented in the balance
sheet as a direct deduction from the carrying amount of that debt
liability, consistent with debt discounts. Also addressed in this
guidance is the presentation and subsequent measurement of debt
issuance costs associated with line-of-credit arrangements. We
elected to adopt the guidance early with full retrospective
application. Debt issuance costs associated with our revolving
credit facility remain in "Other assets" on the consolidated balance
sheet and continue to be amortized over the term of the facility as
allowed by the guidance. For the year ended March 31, 2015 debt
issuance costs for all other debt totaling $189 million have been
reclassified from "Other assets" to "Long-term debt, financing and
capital lease obligations" on the consolidated balance sheet.
|
|
|
|
*FINANCIAL MEASURES
Sprint provides financial measures determined in accordance with 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 provides reconciliations of these non-GAAP measures in its
financial reporting. Because Sprint 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 does not provide reconciliations to GAAP of its
forward-looking financial measures.
The measures used in this release include the following:
EBITDA is operating income/(loss) before depreciation and
amortization. Adjusted EBITDA is EBITDA excluding
severance, exit costs, and other special items. Adjusted EBITDA Margin
represents Adjusted EBITDA divided by non-equipment net operating
revenues for Wireless and Adjusted EBITDA divided by net operating
revenues for Wireline. We believe that Adjusted EBITDA and Adjusted
EBITDA Margin provide useful information to investors because they are
an indicator of the strength and performance of our ongoing business
operations. 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 EBITDA and Adjusted EBITDA
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.
Sprint Platform Postpaid ABPA is average billings per account and
calculated by dividing postpaid service revenue earned from postpaid
customers plus installment plan billings and lease revenue by the sum of
the monthly average number of postpaid accounts during the period. We
believe that ABPA provides useful information to investors, analysts and
our management to evaluate average Sprint platform postpaid customer
billings per account as it approximates the expected cash collections,
including installment plan billings and lease revenue, per postpaid
account each month.
Sprint Platform Postpaid Phone ABPU is average billings per
postpaid phone user and calculated by dividing service revenue earned
from postpaid phone customers plus installment plan billings and lease
revenue by the sum of the monthly average number of postpaid phone
connections during the period. We believe that ABPU provides useful
information to investors, analysts and our management to evaluate
average Sprint platform postpaid phone customer billings as it
approximates the expected cash collections, including installment plan
billings and lease revenue, per postpaid phone user each month.
Free Cash Flow is the cash provided by operating activities less
the cash used in investing activities other than short-term investments,
including changes in restricted cash, if any, and excluding the
sale-leaseback of devices. Adjusted Free Cash Flow is Free
Cash Flow plus the proceeds from the sale-leaseback of devices and
sales of future lease receivables, net of repayments. We believe that
Free Cash Flow and Adjusted Free Cash Flow provide useful information to
investors, analysts and our management about the cash generated by our
core operations and net proceeds obtained to fund certain leased
devices, respectively, after interest and dividends, if any, and our
ability to fund scheduled debt maturities and other financing
activities, including discretionary refinancing and retirement of debt
and purchase or sale of investments.
Net Debt is consolidated debt, including current maturities, less
cash and cash equivalents, short-term investments and, if any,
restricted cash. We believe that Net Debt provides useful information to
investors, analysts and credit rating agencies about the capacity of the
company to reduce the debt load and improve its capital structure.
SAFE HARBOR
This release 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, "outlook," "providing guidance," and similar
expressions are intended to identify information that is not historical
in nature. All statements that address operating performance, events or
developments that we expect or anticipate will occur in the future -
including statements relating to our network, connections growth, and
liquidity; and statements expressing general views about future
operating results - are forward-looking statements. Forward-looking
statements are estimates and projections reflecting management's
judgment based on currently available information and involve a number
of risks and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements. With
respect to these forward-looking statements, management has made
assumptions regarding, among other things, the development and
deployment of new technologies and services; efficiencies and cost
savings of new technologies and services; customer and network usage;
connection growth and retention; service, speed, coverage and quality;
availability of devices; availability of various financings, including
any leasing transactions; the timing of various events and the economic
environment. Sprint believes these forward-looking statements are
reasonable; however, you should not place undue reliance on
forward-looking statements, which are based on current expectations and
speak only as of the date when made. Sprint undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law. In addition, forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from our company's historical experience and our
present expectations or projections. Factors that might cause such
differences include, but are not limited to, those discussed in Sprint
Corporation's Annual Report on Form 10-K for the fiscal year ended March
31, 2015 and, when filed, its Annual Report on Form 10-K for the fiscal
year ended March 31, 2016. You should understand that it is not possible
to predict or identify all such factors. Consequently, you should not
consider any such list to be a complete set of all potential risks or
uncertainties.
About Sprint:
Sprint (NYSE: S) is a communications services company that creates more
and better ways to connect its customers to the things they care about
most. Sprint served more than 58.8 million connections as of March 31,
2016 and is widely recognized for developing, engineering and deploying
innovative technologies, including the first wireless 4G service from a
national carrier in the United States; leading no-contract brands
including Virgin Mobile USA, Boost Mobile, and Assurance Wireless;
instant national and international push-to-talk capabilities; and a
global Tier 1 Internet backbone. Sprint has been named to the Dow Jones
Sustainability Index (DJSI) North America for the past five years. You
can learn more and visit Sprint at www.sprint.com
or www.facebook.com/sprint
and www.twitter.com/sprint.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160503006056/en/
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