[November 03, 2014] |
|
Sprint Reports Results for Second Fiscal Quarter of 2014
OVERLAND PARK, Kan. --(Business Wire)--
Sprint Corporation (NYSE: S) today reported operating results for
the second fiscal quarter of 2014, including consolidated net operating
revenues of $8.5 billion, an operating loss of $192 million, and
Adjusted EBITDA* of nearly $1.4 billion. These results occurred during a
transitional quarter for the company, as Marcelo Claure was appointed
the new president and chief executive officer in mid-August.
"We have started a transformational journey," said Claure. "While the
company continues to face headwinds, we have begun the first phase of
our plan and are encouraged with the early results. Every day we are
focused on improving our standing with consumers, improving our network
and controlling our costs."
Taking Actions to Improve the Business
Entering the quarter, the company faced challenges related to
competitive positioning and adverse impacts to the customer experience
resulting from its comprehensive network upgrade efforts over the last
several quarters. As a result, the company has incurred losses of
postpaid phone customers that are pressuring revenue trends. To address
these challenges and begin to improve the performance trajectory, the
company has initiated its transformation plan with a focus on four key
areas.
-
Competitive Value Proposition
During the quarter, the
Sprint brand was repositioned with the launch of compelling new price
plans and promotions designed to deliver the Best Value in Wireless.
-
Sprint Unlimited Plans offer the best value for individuals and
couples at $50-$60/month per line.
-
Sprint Family Share Pack offers the best value for families and
doubles the data of national competitors.
-
Sprint Business Share Plans offer lower rates and more data than
national competitors' smartphone plans.
-
Industry-first iPhone for Life leasing plan offers the lowest
total cost of iPhone ownership for consumers starting at only
$20/month.
-
Network
-
The company is focused on delivering a consistent, reliable
network experience with competitive voice performance, data
capacity to meet growing customer demand and improved coverage.
-
Deployment of Sprint's multi-band 4G LTE service offering
continues, with emphasis on completing the build out of the 800
MHz spectrum and expanding the 2.5 GHz spectrum coverage.
-
Cost Optimization
-
Sprint is undertaking a comprehensive review of all expenses to
optimize its cost structure and is targeting $1.5 billion of
annualized cost reductions compared to 2014 spending levels.
-
As part of the cost reduction efforts, the company is announcing
additional headcount reductions of approximately 2,000 positions.
Inclusive of recent work force actions, total labor cost is
expected to decline $400 million on an annualized basis which will
include internal and external labor costs.
-
People
-
The company has launched a management review and will seek to grow
its leadership talent with a combination of internal candidates,
new outside talent and SoftBank resources.
Early Market Results.
Early reaction to Sprint's new positioning and offers is encouraging.
-
Postpaid phone gross additions grew 37 percent month-over-month in
September and increased year-over-year for the first time in 2014.
-
Sprint platform postpaid phone net losses slowed by nearly 60 percent
in September.
-
Sprint achieved its most successful iPhone launch in company history
with record sales volumes.
"While we are pleased to see customers respond to our new value
proposition, we must continue to take bold actions to reach our goal of
returning to growth in postpaid phone customers," added Claure. "By
improving our competitive position and driving costs out of the
business, we plan to deliver long-term value creation."
Network Deployment Continues and Performance Improves
-
4G LTE coverage expanded to 260 million people.
-
2.5 GHz LTE deployment now covers 92 million people and remains on
track to hit 100 million by the end of the year.
-
Sprint's network recently received 94 first-place or shared
first-place RootScore® Awards for
reliability, call and/or text performance in cities across the
country, according to recent reports by RootMetrics®.
"In RootMetrics recent studies of many top population metro areas we've
seen improvements in Sprint's data network reliability and speeds from a
year ago," says Bill Moore, CEO of RootMetrics, an independent mobile
analytics company. "This is good news for Sprint's customers in these
areas, who are benefiting from investments that Sprint has made in these
markets."
Quarterly Financial Results
-
Operating loss was $192 million compared to an operating loss of $398
million in the year-ago quarter primarily driven by lower depreciation
and amortization as the year-ago period included accelerated
depreciation related to CDMA assets.
-
Consolidated Adjusted EBITDA* of nearly $1.4 billion grew 3 percent
over the prior year period, driven by double-digit growth within the
Wireless segment. Wireless Adjusted EBITDA* of $1.37 billion increased
14 percent from the prior year period, as cost reductions across the
business offset lower service revenues driven primarily by continued
postpaid phone customer losses. Lower cost of service expenses related
to the completion of the 3G and voice network replacement, lower net
subsidy costs from the introduction of installment billing plans, and
lower customer care and selling costs all contributed to the
year-over-year growth.
-
Sprint platform net additions were 590,000, mostly driven by strong
wholesale net additions.
-
Postpaid tablet net additions were 261,000 in the quarter, while phone
losses were 500,000 and other device losses were 33,000.
-
Sprint had 55 million connections at the end of the quarter.
Updated Outlook
-
Given the success of the new offers, the company expects increased
selling costs associated with significantly higher gross additions and
upgrade volumes in the fiscal third quarter of 2014. In addition, the
significant loss of postpaid phone customers over the last few
quarters has pressured wireless service revenue, and this trend is
expected to continue into the next quarter. Therefore, Consolidated
Adjusted EBITDA* is expected to be $5.8 billion to $5.9 billion for
calendar year 2014.
-
The company still expects to meet its 800 MHz and 2.5 GHz deployment
targets for the year, and now expects capital expenditures to be under
$6 billion for calendar year 2014.
Conference Call and Webcast
-
Date/Time: November 3, 2014 at 4:30 p.m. ET
-
Call-in Information
-
U.S./Canada: 866-360-1063 (ID: 96625910)
-
International: 706-634-7849 (ID: 96625910)
-
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
Contact Information
Financial results in the enclosed tables include a predecessor period
for the quarter ending September 30, 2013 related to the results of
operations of Sprint Communications, Inc. (formerly Sprint Nextel) prior
to the closing of the SoftBank transaction on July 10, 2013, and the
applicable successor periods. In order to present financial results in a
way that offers investors a more meaningful comparison of the
year-over-year quarterly results, we have combined the calendar third
quarter 2013 results of operations for the predecessor and successor
periods. The enclosed remarks relating to calendar third quarter of 2013
are in reference to an unaudited combined period, unless otherwise
noted. For additional information, please reference the section titled
Financial Measures. Trended financial performance metrics on a combined
basis can also be found at our Investor Relations website at www.sprint.com/investors.
|
|
|
|
|
|
|
|
|
|
|
Wireless Operating Statistics (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter To Date
|
|
Year To Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
Net Additions (Losses) (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
(272
|
)
|
|
(181
|
)
|
|
(360
|
)
|
|
(453
|
)
|
|
(166
|
)
|
Prepaid (3)
|
|
35
|
|
|
(542
|
)
|
|
84
|
|
|
(507
|
)
|
|
(402
|
)
|
Wholesale and affiliate
|
|
827
|
|
|
503
|
|
|
181
|
|
|
1,330
|
|
|
(47
|
)
|
Total Sprint platform
|
|
590
|
|
|
(220
|
)
|
|
(95
|
)
|
|
370
|
|
|
(615
|
)
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,060
|
)
|
Prepaid (3)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(255
|
)
|
Total Nextel platform
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,315
|
)
|
Transactions:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
(64
|
)
|
|
(64
|
)
|
|
(175
|
)
|
|
(128
|
)
|
|
(354
|
)
|
Prepaid (3)
|
|
(55
|
)
|
|
(77
|
)
|
|
(56
|
)
|
|
(132
|
)
|
|
(76
|
)
|
Wholesale
|
|
13
|
|
|
27
|
|
|
13
|
|
|
40
|
|
|
13
|
|
Total transactions
|
|
(106
|
)
|
|
(114
|
)
|
|
(218
|
)
|
|
(220
|
)
|
|
(417
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid net losses
|
|
(336
|
)
|
|
(245
|
)
|
|
(535
|
)
|
|
(581
|
)
|
|
(1,580
|
)
|
Total retail prepaid net (losses) additions
|
|
(20
|
)
|
|
(619
|
)
|
|
28
|
|
|
(639
|
)
|
|
(733
|
)
|
Total wholesale and affiliate net additions (losses)
|
|
840
|
|
|
530
|
|
|
194
|
|
|
1,370
|
|
|
(34
|
)
|
Total Wireless Net Additions (Losses)
|
|
484
|
|
|
(334
|
)
|
|
(313
|
)
|
|
150
|
|
|
(2,347
|
)
|
|
|
|
|
|
|
|
|
|
|
|
End of Period Connections (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
29,465
|
|
|
29,737
|
|
|
30,091
|
|
|
29,465
|
|
|
30,091
|
|
Prepaid (3)
|
|
14,750
|
|
|
14,715
|
|
|
15,299
|
|
|
14,750
|
|
|
15,299
|
|
Wholesale and affiliate
|
|
9,706
|
|
|
8,879
|
|
|
7,862
|
|
|
9,706
|
|
|
7,862
|
|
Total Sprint platform
|
|
53,921
|
|
|
53,331
|
|
|
53,252
|
|
|
53,921
|
|
|
53,252
|
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Prepaid (3)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total Nextel platform
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Transactions: (a)
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
458
|
|
|
522
|
|
|
815
|
|
|
458
|
|
|
815
|
|
Prepaid (3)
|
|
418
|
|
|
473
|
|
|
704
|
|
|
418
|
|
|
704
|
|
Wholesale
|
|
240
|
|
|
227
|
|
|
106
|
|
|
240
|
|
|
106
|
|
Total transactions
|
|
1,116
|
|
|
1,222
|
|
|
1,625
|
|
|
1,116
|
|
|
1,625
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid end of period connections
|
|
29,923
|
|
|
30,259
|
|
|
30,906
|
|
|
29,923
|
|
|
30,906
|
|
Total retail prepaid end of period connections
|
|
15,168
|
|
|
15,188
|
|
|
16,003
|
|
|
15,168
|
|
|
16,003
|
|
Total wholesale and affiliate end of period connections
|
|
9,946
|
|
|
9,106
|
|
|
7,968
|
|
|
9,946
|
|
|
7,968
|
|
Total End of Period Connections
|
|
55,037
|
|
|
54,553
|
|
|
54,877
|
|
|
55,037
|
|
|
54,877
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data - Connected Devices
|
|
|
|
|
|
|
|
|
|
|
End of Period Connections (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Retail postpaid
|
|
1,039
|
|
|
988
|
|
|
834
|
|
|
1,039
|
|
|
834
|
|
Wholesale and affiliate
|
|
4,635
|
|
|
4,192
|
|
|
3,298
|
|
|
4,635
|
|
|
3,298
|
|
Total
|
|
5,674
|
|
|
5,180
|
|
|
4,132
|
|
|
5,674
|
|
|
4,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Churn
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
2.18
|
%
|
|
2.05
|
%
|
|
1.99
|
%
|
|
2.12
|
%
|
|
1.91
|
%
|
Prepaid
|
|
3.76
|
%
|
|
4.44
|
%
|
|
3.57
|
%
|
|
4.10
|
%
|
|
4.41
|
%
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
33.90
|
%
|
Prepaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
32.13
|
%
|
Transactions: (a)
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
4.66
|
%
|
|
4.15
|
%
|
|
6.38
|
%
|
|
4.39
|
%
|
|
9.47
|
%
|
Prepaid
|
|
5.70
|
%
|
|
6.28
|
%
|
|
8.84
|
%
|
|
6.01
|
%
|
|
9.15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid churn
|
|
2.22
|
%
|
|
2.09
|
%
|
|
2.09
|
%
|
|
2.16
|
%
|
|
2.36
|
%
|
Total retail prepaid churn
|
|
3.81
|
%
|
|
4.50
|
%
|
|
3.78
|
%
|
|
4.16
|
%
|
|
4.64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Nextel Platform Connection Recaptures
|
|
|
|
|
|
|
|
|
|
|
Connections (in thousands) (4):
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
364
|
|
Prepaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
101
|
|
Rate (5):
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
34
|
%
|
Prepaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) We acquired approximately 352,000 postpaid connections
and 59,000 prepaid connections through the acquisition of assets from
U.S. Cellular when the transaction closed on May 17, 2013. We acquired
approximately 788,000 postpaid connections, 721,000 prepaid connections,
93,000 wholesale connections and transferred 29,000 Sprint wholesale
connections that were originally recognized through our Clearwire MVNO
arrangement to Transactions postpaid connections as a result of the
Clearwire acquisition when the transaction closed on July 9, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless Operating Statistics (Unaudited) (continued)
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
10 Days
Ended
|
|
101 Days
Ended
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
ARPU (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
$
|
60.58
|
|
$
|
62.07
|
|
$
|
64.24
|
|
$
|
61.33
|
|
$
|
64.24
|
|
$
|
64.71
|
|
$
|
64.25
|
|
$
|
64.28
|
|
$
|
64.24
|
Prepaid
|
|
$
|
27.19
|
|
$
|
27.38
|
|
$
|
25.14
|
|
$
|
27.28
|
|
$
|
25.14
|
|
$
|
26.99
|
|
$
|
26.96
|
|
$
|
25.33
|
|
$
|
26.16
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
36.66
|
|
$
|
-
|
|
$
|
36.66
|
Prepaid
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
34.48
|
|
$
|
-
|
|
$
|
34.48
|
Transactions: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
$
|
39.69
|
|
$
|
39.16
|
|
$
|
37.44
|
|
$
|
39.41
|
|
$
|
37.44
|
|
$
|
35.75
|
|
$
|
56.98
|
|
$
|
40.00
|
|
$
|
43.03
|
Prepaid
|
|
$
|
45.52
|
|
$
|
45.15
|
|
$
|
40.62
|
|
$
|
45.32
|
|
$
|
40.62
|
|
$
|
12.78
|
|
$
|
18.26
|
|
$
|
43.20
|
|
$
|
42.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid ARPU
|
|
$
|
60.24
|
|
$
|
61.65
|
|
$
|
63.48
|
|
$
|
60.95
|
|
$
|
63.48
|
|
$
|
64.55
|
|
$
|
63.68
|
|
$
|
63.69
|
|
$
|
63.64
|
Total retail prepaid ARPU
|
|
$
|
27.73
|
|
$
|
27.97
|
|
$
|
25.86
|
|
$
|
27.85
|
|
$
|
25.86
|
|
$
|
26.96
|
|
$
|
27.01
|
|
$
|
26.04
|
|
$
|
26.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) We acquired approximately 352,000 postpaid connections
and 59,000 prepaid connections through the acquisition of assets from
U.S. Cellular when the transaction closed on May 17, 2013. We acquired
approximately 788,000 postpaid connections, 721,000 prepaid connections,
93,000 wholesale connections and transferred 29,000 Sprint wholesale
connections that were originally recognized through our Clearwire MVNO
arrangement to Transactions postpaid connections as a result of the
Clearwire acquisition when the transaction closed on July 9, 2013.
(b) ARPU is calculated by dividing service revenue by the sum
of the 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.
Combined ARPU for the quarter-to-date September 30, 2013 period
aggregate service revenue of ten days ended July 10, 2013 predecessor
period and the quarter-to-date September 30, 2013 successor period
divided by the sum of the average connections during the quarter.
Combined ARPU for the year-to-date September 30, 2013 period aggregate
service revenue of the 101 days ended July 10, 2013 predecessor period
and the year-to-date September 30, 2013 successor period divided by the
sum of the average connections during the year-to-date period.
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions, except per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
10 Days
Ended
|
|
101 Days
Ended
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
$
|
8,488
|
|
|
$
|
8,789
|
|
|
$
|
7,749
|
|
|
$
|
17,277
|
|
|
$
|
7,749
|
|
|
$
|
932
|
|
|
$
|
9,809
|
|
|
$
|
8,681
|
|
|
$
|
17,558
|
|
Net Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
2,429
|
|
|
|
2,520
|
|
|
|
2,470
|
|
|
|
4,949
|
|
|
|
2,470
|
|
|
|
286
|
|
|
|
3,033
|
|
|
|
2,756
|
|
|
|
5,503
|
|
Cost of products
|
|
|
2,372
|
|
|
|
2,158
|
|
|
|
1,872
|
|
|
|
4,530
|
|
|
|
1,872
|
|
|
|
281
|
|
|
|
2,579
|
|
|
|
2,153
|
|
|
|
4,451
|
|
Selling, general and administrative
|
|
|
2,301
|
|
|
|
2,284
|
|
|
|
2,259
|
|
|
|
4,585
|
|
|
|
2,281
|
|
|
|
289
|
|
|
|
2,731
|
|
|
|
2,548
|
|
|
|
5,012
|
|
Depreciation and amortization
|
|
|
1,294
|
|
|
|
1,281
|
|
|
|
1,403
|
|
|
|
2,575
|
|
|
|
1,403
|
|
|
|
121
|
|
|
|
1,753
|
|
|
|
1,524
|
|
|
|
3,156
|
|
Other, net
|
|
|
284
|
|
|
|
27
|
|
|
|
103
|
|
|
|
311
|
|
|
|
103
|
|
|
|
(5
|
)
|
|
|
627
|
|
|
|
98
|
|
|
|
730
|
|
Total net operating expenses
|
|
|
8,680
|
|
|
|
8,270
|
|
|
|
8,107
|
|
|
|
16,950
|
|
|
|
8,129
|
|
|
|
972
|
|
|
|
10,723
|
|
|
|
9,079
|
|
|
|
18,852
|
|
Operating (Loss) Income
|
|
|
(192
|
)
|
|
|
519
|
|
|
|
(358
|
)
|
|
|
327
|
|
|
|
(380
|
)
|
|
|
(40
|
)
|
|
|
(914
|
)
|
|
|
(398
|
)
|
|
|
(1,294
|
)
|
Interest expense
|
|
|
(510
|
)
|
|
|
(512
|
)
|
|
|
(416
|
)
|
|
|
(1,022
|
)
|
|
|
(416
|
)
|
|
|
(275
|
)
|
|
|
(703
|
)
|
|
|
(691
|
)
|
|
|
(1,119
|
)
|
Equity in earnings of unconsolidated investments and other, net
|
|
|
8
|
|
|
|
1
|
|
|
|
165
|
|
|
|
9
|
|
|
|
12
|
|
|
|
2,905
|
|
|
|
2,665
|
|
|
|
3,070
|
|
|
|
2,677
|
|
(Loss) Income before Income Taxes
|
|
|
(694
|
)
|
|
|
8
|
|
|
|
(609
|
)
|
|
|
(686
|
)
|
|
|
(784
|
)
|
|
|
2,590
|
|
|
|
1,048
|
|
|
|
1,981
|
|
|
|
264
|
|
Income tax (expense) benefit
|
|
|
(71
|
)
|
|
|
15
|
|
|
|
(90
|
)
|
|
|
(56
|
)
|
|
|
(29
|
)
|
|
|
(1,508
|
)
|
|
|
(1,563
|
)
|
|
|
(1,598
|
)
|
|
|
(1,592
|
)
|
Net (Loss) Income
|
|
$
|
(765
|
)
|
|
$
|
23
|
|
|
$
|
(699
|
)
|
|
$
|
(742
|
)
|
|
$
|
(813
|
)
|
|
$
|
1,082
|
|
|
$
|
(515
|
)
|
|
$
|
383
|
|
|
$
|
(1,328
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Net (Loss) Income Per Common Share
|
|
$
|
(0.19
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
0.35
|
|
|
$
|
(0.17
|
)
|
|
|
NM
|
|
|
|
NM
|
|
Diluted Net (Loss) Income Per Common Share
|
|
$
|
(0.19
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
0.30
|
|
|
$
|
(0.17
|
)
|
|
|
NM
|
|
|
|
NM
|
|
Basic Weighted Average Common Shares outstanding
|
|
|
3,949
|
|
|
|
3,945
|
|
|
|
3,802
|
|
|
|
3,947
|
|
|
|
3,439
|
|
|
|
3,086
|
|
|
|
3,038
|
|
|
|
NM
|
|
|
|
NM
|
|
Diluted Weighted Average Common Shares outstanding
|
|
|
3,949
|
|
|
|
4,002
|
|
|
|
3,802
|
|
|
|
3,947
|
|
|
|
3,439
|
|
|
|
3,640
|
|
|
|
3,038
|
|
|
|
NM
|
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
-10.2
|
%
|
|
|
-187.5
|
%
|
|
|
-14.8
|
%
|
|
|
-8.2
|
%
|
|
|
-3.7
|
%
|
|
|
58.2
|
%
|
|
|
149.1
|
%
|
|
|
NM
|
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RECONCILIATION - NET (LOSS) INCOME TO ADJUSTED EBITDA*
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
10 Days
Ended
|
|
101 Days
Ended
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income
|
|
$
|
(765
|
)
|
|
$
|
23
|
|
|
$
|
(699
|
)
|
|
$
|
(742
|
)
|
|
$
|
(813
|
)
|
|
$
|
1,082
|
|
|
$
|
(515
|
)
|
|
$
|
383
|
|
|
$
|
(1,328
|
)
|
Income tax expense (benefit)
|
|
|
71
|
|
|
|
(15
|
)
|
|
|
90
|
|
|
|
56
|
|
|
|
29
|
|
|
|
1,508
|
|
|
|
1,563
|
|
|
|
1,598
|
|
|
|
1,592
|
|
(Loss) Income before Income Taxes
|
|
|
(694
|
)
|
|
|
8
|
|
|
|
(609
|
)
|
|
|
(686
|
)
|
|
|
(784
|
)
|
|
|
2,590
|
|
|
|
1,048
|
|
|
|
1,981
|
|
|
|
264
|
|
Equity in earnings of unconsolidated investments and other, net
|
|
|
(8
|
)
|
|
|
(1
|
)
|
|
|
(165
|
)
|
|
|
(9
|
)
|
|
|
(12
|
)
|
|
|
(2,905
|
)
|
|
|
(2,665
|
)
|
|
|
(3,070
|
)
|
|
|
(2,677
|
)
|
Interest expense
|
|
|
510
|
|
|
|
512
|
|
|
|
416
|
|
|
|
1,022
|
|
|
|
416
|
|
|
|
275
|
|
|
|
703
|
|
|
|
691
|
|
|
|
1,119
|
|
Operating (Loss) Income
|
|
|
(192
|
)
|
|
|
519
|
|
|
|
(358
|
)
|
|
|
327
|
|
|
|
(380
|
)
|
|
|
(40
|
)
|
|
|
(914
|
)
|
|
|
(398
|
)
|
|
|
(1,294
|
)
|
Depreciation and amortization
|
|
|
1,294
|
|
|
|
1,281
|
|
|
|
1,403
|
|
|
|
2,575
|
|
|
|
1,403
|
|
|
|
121
|
|
|
|
1,753
|
|
|
|
1,524
|
|
|
|
3,156
|
|
EBITDA*
|
|
|
1,102
|
|
|
|
1,800
|
|
|
|
1,045
|
|
|
|
2,902
|
|
|
|
1,023
|
|
|
|
81
|
|
|
|
839
|
|
|
|
1,126
|
|
|
|
1,862
|
|
Severance and exit costs (6)
|
|
|
284
|
|
|
|
27
|
|
|
|
103
|
|
|
|
311
|
|
|
|
103
|
|
|
|
(5
|
)
|
|
|
627
|
|
|
|
98
|
|
|
|
730
|
|
Business combinations (7)
|
|
|
-
|
|
|
|
-
|
|
|
|
100
|
|
|
|
-
|
|
|
|
100
|
|
|
|
19
|
|
|
|
53
|
|
|
|
119
|
|
|
|
153
|
|
Adjusted EBITDA*
|
|
$
|
1,386
|
|
|
$
|
1,827
|
|
|
$
|
1,248
|
|
|
$
|
3,213
|
|
|
$
|
1,226
|
|
|
$
|
95
|
|
|
$
|
1,519
|
|
|
$
|
1,343
|
|
|
$
|
2,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin*
|
|
|
18.6
|
%
|
|
|
23.8
|
%
|
|
|
17.5
|
%
|
|
|
21.2
|
%
|
|
|
17.2
|
%
|
|
|
11.1
|
%
|
|
|
17.0
|
%
|
|
|
16.8
|
%
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in deferred tax asset valuation allowance
|
|
$
|
324
|
|
|
$
|
(27
|
)
|
|
$
|
327
|
|
|
$
|
297
|
|
|
$
|
327
|
|
|
$
|
524
|
|
|
$
|
1,145
|
|
|
$
|
851
|
|
|
$
|
1,472
|
|
Accrued capital expenditures
|
|
$
|
1,517
|
|
|
$
|
1,416
|
|
|
$
|
1,666
|
|
|
$
|
2,933
|
|
|
$
|
1,666
|
|
|
$
|
175
|
|
|
$
|
2,072
|
|
|
$
|
1,841
|
|
|
$
|
3,738
|
|
Cash paid for capital expenditures
|
|
$
|
1,143
|
|
|
$
|
1,246
|
|
|
$
|
1,878
|
|
|
$
|
2,389
|
|
|
$
|
1,878
|
|
|
$
|
188
|
|
|
$
|
1,759
|
|
|
$
|
2,066
|
|
|
$
|
3,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year
|
|
Year
|
|
|
|
|
|
Quarter
|
|
Year
|
|
|
To
|
|
To
|
|
To
|
|
To
|
|
To
|
|
10 Days
|
|
101 Days
|
|
To
|
|
To
|
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Ended
|
|
Ended
|
|
Date
|
|
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
Net Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
$
|
5,377
|
|
|
$
|
5,553
|
|
|
$
|
5,201
|
|
|
$
|
10,930
|
|
|
$
|
5,201
|
|
|
$
|
634
|
|
|
$
|
6,469
|
|
|
$
|
5,835
|
|
|
$
|
11,670
|
|
Prepaid (3)
|
|
|
1,197
|
|
|
|
1,221
|
|
|
|
1,028
|
|
|
|
2,418
|
|
|
|
1,028
|
|
|
|
132
|
|
|
|
1,408
|
|
|
|
1,160
|
|
|
|
2,436
|
|
Wholesale, affiliate and other
|
|
|
181
|
|
|
|
163
|
|
|
|
116
|
|
|
|
344
|
|
|
|
116
|
|
|
|
15
|
|
|
|
146
|
|
|
|
131
|
|
|
|
262
|
|
Total Sprint platform
|
|
|
6,755
|
|
|
|
6,937
|
|
|
|
6,345
|
|
|
|
13,692
|
|
|
|
6,345
|
|
|
|
781
|
|
|
|
8,023
|
|
|
|
7,126
|
|
|
|
14,368
|
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
74
|
|
|
|
-
|
|
|
|
74
|
|
Prepaid (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17
|
|
|
|
-
|
|
|
|
17
|
|
Total Nextel platform
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
91
|
|
|
|
-
|
|
|
|
91
|
|
Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
|
58
|
|
|
|
65
|
|
|
|
89
|
|
|
|
123
|
|
|
|
89
|
|
|
|
2
|
|
|
|
26
|
|
|
|
91
|
|
|
|
115
|
|
Prepaid (3)
|
|
|
61
|
|
|
|
69
|
|
|
|
81
|
|
|
|
130
|
|
|
|
81
|
|
|
|
1
|
|
|
|
2
|
|
|
|
82
|
|
|
|
83
|
|
Wholesale
|
|
|
16
|
|
|
|
16
|
|
|
|
8
|
|
|
|
32
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
|
8
|
|
Total transactions
|
|
|
135
|
|
|
|
150
|
|
|
|
178
|
|
|
|
285
|
|
|
|
178
|
|
|
|
3
|
|
|
|
28
|
|
|
|
181
|
|
|
|
206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment revenue
|
|
|
1,039
|
|
|
|
1,106
|
|
|
|
636
|
|
|
|
2,145
|
|
|
|
636
|
|
|
|
74
|
|
|
|
894
|
|
|
|
710
|
|
|
|
1,530
|
|
Total net operating revenues
|
|
|
7,929
|
|
|
|
8,193
|
|
|
|
7,159
|
|
|
|
16,122
|
|
|
|
7,159
|
|
|
|
858
|
|
|
|
9,036
|
|
|
|
8,017
|
|
|
|
16,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
1,988
|
|
|
|
2,049
|
|
|
|
2,087
|
|
|
|
4,037
|
|
|
|
2,087
|
|
|
|
240
|
|
|
|
2,532
|
|
|
|
2,327
|
|
|
|
4,619
|
|
Cost of products
|
|
|
2,372
|
|
|
|
2,158
|
|
|
|
1,872
|
|
|
|
4,530
|
|
|
|
1,872
|
|
|
|
281
|
|
|
|
2,579
|
|
|
|
2,153
|
|
|
|
4,451
|
|
Selling, general and administrative
|
|
|
2,199
|
|
|
|
2,193
|
|
|
|
2,100
|
|
|
|
4,392
|
|
|
|
2,100
|
|
|
|
256
|
|
|
|
2,550
|
|
|
|
2,356
|
|
|
|
4,650
|
|
Depreciation and amortization
|
|
|
1,232
|
|
|
|
1,212
|
|
|
|
1,338
|
|
|
|
2,444
|
|
|
|
1,338
|
|
|
|
110
|
|
|
|
1,636
|
|
|
|
1,448
|
|
|
|
2,974
|
|
Other, net
|
|
|
248
|
|
|
|
23
|
|
|
|
93
|
|
|
|
271
|
|
|
|
93
|
|
|
|
(5
|
)
|
|
|
627
|
|
|
|
88
|
|
|
|
720
|
|
Total net operating expenses
|
|
|
8,039
|
|
|
|
7,635
|
|
|
|
7,490
|
|
|
|
15,674
|
|
|
|
7,490
|
|
|
|
882
|
|
|
|
9,924
|
|
|
|
8,372
|
|
|
|
17,414
|
|
Operating (Loss) Income
|
|
$
|
(110
|
)
|
|
$
|
558
|
|
|
$
|
(331
|
)
|
|
$
|
448
|
|
|
$
|
(331
|
)
|
|
$
|
(24
|
)
|
|
$
|
(888
|
)
|
|
$
|
(355
|
)
|
|
$
|
(1,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Revenue Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail service revenue
|
|
$
|
6,693
|
|
|
$
|
6,908
|
|
|
$
|
6,399
|
|
|
$
|
13,601
|
|
|
$
|
6,399
|
|
|
$
|
769
|
|
|
$
|
7,996
|
|
|
$
|
7,168
|
|
|
$
|
14,395
|
|
Total service revenue
|
|
$
|
6,890
|
|
|
$
|
7,087
|
|
|
$
|
6,523
|
|
|
$
|
13,977
|
|
|
$
|
6,523
|
|
|
$
|
784
|
|
|
$
|
8,142
|
|
|
$
|
7,307
|
|
|
$
|
14,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELESS NON-GAAP RECONCILIATION (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year
|
|
Year
|
|
|
|
|
|
Quarter
|
|
Year
|
|
|
To
|
|
To
|
|
To
|
|
To
|
|
To
|
|
10 Days
|
|
101 Days
|
|
To
|
|
To
|
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Ended
|
|
Ended
|
|
Date
|
|
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income
|
|
$
|
(110
|
)
|
|
$
|
558
|
|
|
$
|
(331
|
)
|
|
$
|
448
|
|
|
$
|
(331
|
)
|
|
$
|
(24
|
)
|
|
$
|
(888
|
)
|
|
$
|
(355
|
)
|
|
$
|
(1,219
|
)
|
Severance and exit costs (6)
|
|
|
248
|
|
|
|
23
|
|
|
|
93
|
|
|
|
271
|
|
|
|
93
|
|
|
|
(5
|
)
|
|
|
627
|
|
|
|
88
|
|
|
|
720
|
|
Business combinations (7)
|
|
|
-
|
|
|
|
-
|
|
|
|
25
|
|
|
|
-
|
|
|
|
25
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25
|
|
|
|
25
|
|
Depreciation and amortization
|
|
|
1,232
|
|
|
|
1,212
|
|
|
|
1,338
|
|
|
|
2,444
|
|
|
|
1,338
|
|
|
|
110
|
|
|
|
1,636
|
|
|
|
1,448
|
|
|
|
2,974
|
|
Adjusted EBITDA*
|
|
$
|
1,370
|
|
|
$
|
1,793
|
|
|
$
|
1,125
|
|
|
$
|
3,163
|
|
|
$
|
1,125
|
|
|
$
|
81
|
|
|
$
|
1,375
|
|
|
$
|
1,206
|
|
|
$
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin*
|
|
|
19.9
|
%
|
|
|
25.3
|
%
|
|
|
17.2
|
%
|
|
|
22.6
|
%
|
|
|
17.2
|
%
|
|
|
10.3
|
%
|
|
|
16.9
|
%
|
|
|
16.5
|
%
|
|
|
17.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures
|
|
$
|
1,354
|
|
|
$
|
1,276
|
|
|
$
|
1,527
|
|
|
$
|
2,630
|
|
|
$
|
1,527
|
|
|
$
|
156
|
|
|
$
|
1,884
|
|
|
$
|
1,683
|
|
|
$
|
3,411
|
|
Cash paid for capital expenditures
|
|
$
|
989
|
|
|
$
|
1,120
|
|
|
$
|
1,743
|
|
|
$
|
2,109
|
|
|
$
|
1,743
|
|
|
$
|
167
|
|
|
$
|
1,570
|
|
|
$
|
1,910
|
|
|
$
|
3,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year
|
|
Year
|
|
|
|
|
|
Quarter
|
|
Year
|
|
|
To
|
|
To
|
|
To
|
|
To
|
|
To
|
|
10 Days
|
|
101 Days
|
|
To
|
|
To
|
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Ended
|
|
Ended
|
|
Date
|
|
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
Net Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
|
$
|
294
|
|
|
$
|
327
|
|
|
$
|
333
|
|
|
$
|
621
|
|
|
$
|
333
|
|
|
$
|
42
|
|
|
$
|
419
|
|
|
$
|
375
|
|
|
$
|
752
|
|
Data
|
|
|
53
|
|
|
|
56
|
|
|
|
57
|
|
|
|
109
|
|
|
|
57
|
|
|
|
7
|
|
|
|
94
|
|
|
|
64
|
|
|
|
151
|
|
Internet
|
|
|
340
|
|
|
|
345
|
|
|
|
373
|
|
|
|
685
|
|
|
|
373
|
|
|
|
47
|
|
|
|
479
|
|
|
|
420
|
|
|
|
852
|
|
Other
|
|
|
21
|
|
|
|
18
|
|
|
|
14
|
|
|
|
39
|
|
|
|
14
|
|
|
|
2
|
|
|
|
16
|
|
|
|
16
|
|
|
|
30
|
|
Total net operating revenues
|
|
|
708
|
|
|
|
746
|
|
|
|
777
|
|
|
|
1,454
|
|
|
|
777
|
|
|
|
98
|
|
|
|
1,008
|
|
|
|
875
|
|
|
|
1,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services and products
|
|
|
593
|
|
|
|
626
|
|
|
|
576
|
|
|
|
1,219
|
|
|
|
576
|
|
|
|
72
|
|
|
|
741
|
|
|
|
648
|
|
|
|
1,317
|
|
Selling, general and administrative
|
|
|
88
|
|
|
|
85
|
|
|
|
84
|
|
|
|
173
|
|
|
|
84
|
|
|
|
11
|
|
|
|
123
|
|
|
|
95
|
|
|
|
207
|
|
Depreciation and amortization
|
|
|
60
|
|
|
|
67
|
|
|
|
61
|
|
|
|
127
|
|
|
|
61
|
|
|
|
10
|
|
|
|
115
|
|
|
|
71
|
|
|
|
176
|
|
Other, net
|
|
|
35
|
|
|
|
4
|
|
|
|
10
|
|
|
|
39
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
|
|
10
|
|
Total net operating expenses
|
|
|
776
|
|
|
|
782
|
|
|
|
731
|
|
|
|
1,558
|
|
|
|
731
|
|
|
|
93
|
|
|
|
979
|
|
|
|
824
|
|
|
|
1,710
|
|
Operating (Loss) Income
|
|
$
|
(68
|
)
|
|
$
|
(36
|
)
|
|
$
|
46
|
|
|
$
|
(104
|
)
|
|
$
|
46
|
|
|
$
|
5
|
|
|
$
|
29
|
|
|
$
|
51
|
|
|
$
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year
|
|
Year
|
|
|
|
|
|
Quarter
|
|
Year
|
|
|
To
|
|
To
|
|
To
|
|
To
|
|
To
|
|
10 Days
|
|
101 Days
|
|
To
|
|
To
|
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Ended
|
|
Ended
|
|
Date
|
|
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income
|
|
$
|
(68
|
)
|
|
$
|
(36
|
)
|
|
$
|
46
|
|
|
$
|
(104
|
)
|
|
$
|
46
|
|
|
$
|
5
|
|
|
$
|
29
|
|
|
$
|
51
|
|
|
$
|
75
|
|
Severance and exit costs (6)
|
|
|
35
|
|
|
|
4
|
|
|
|
10
|
|
|
|
39
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
|
|
10
|
|
Depreciation and amortization
|
|
|
60
|
|
|
|
67
|
|
|
|
61
|
|
|
|
127
|
|
|
|
61
|
|
|
|
10
|
|
|
|
115
|
|
|
|
71
|
|
|
|
176
|
|
Adjusted EBITDA*
|
|
$
|
27
|
|
|
$
|
35
|
|
|
$
|
117
|
|
|
$
|
62
|
|
|
$
|
117
|
|
|
$
|
15
|
|
|
$
|
144
|
|
|
$
|
132
|
|
|
$
|
261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin*
|
|
|
3.8
|
%
|
|
|
4.7
|
%
|
|
|
15.1
|
%
|
|
|
4.3
|
%
|
|
|
15.1
|
%
|
|
|
15.3
|
%
|
|
|
14.3
|
%
|
|
|
15.1
|
%
|
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures
|
|
$
|
74
|
|
|
$
|
66
|
|
|
$
|
73
|
|
|
$
|
140
|
|
|
$
|
73
|
|
|
$
|
11
|
|
|
$
|
104
|
|
|
$
|
84
|
|
|
$
|
177
|
|
Cash paid for capital expenditures
|
|
$
|
65
|
|
|
$
|
59
|
|
|
$
|
73
|
|
|
$
|
124
|
|
|
$
|
73
|
|
|
$
|
10
|
|
|
$
|
110
|
|
|
$
|
83
|
|
|
$
|
183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
|
|
|
|
|
|
|
|
|
(Millions)
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Year
|
|
Year
|
|
|
|
Year
|
|
|
To
|
|
To
|
|
101 Days
|
|
To
|
|
|
Date
|
|
Date
|
|
Ended
|
|
Date
|
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
9/30/13
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(742
|
)
|
|
$
|
(813
|
)
|
|
$
|
(515
|
)
|
|
$
|
(1,328
|
)
|
Depreciation and amortization
|
|
|
2,575
|
|
|
|
1,403
|
|
|
|
1,753
|
|
|
|
3,156
|
|
Provision for losses on accounts receivable
|
|
|
493
|
|
|
|
119
|
|
|
|
111
|
|
|
|
230
|
|
Share-based and long-term incentive compensation expense
|
|
|
65
|
|
|
|
58
|
|
|
|
20
|
|
|
|
78
|
|
Deferred income tax expense
|
|
|
28
|
|
|
|
23
|
|
|
|
1,562
|
|
|
|
1,585
|
|
Gain on previously-held equity interests
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,926
|
)
|
|
|
(2,926
|
)
|
Equity in losses of unconsolidated investments, net
|
|
|
-
|
|
|
|
-
|
|
|
|
280
|
|
|
|
280
|
|
Interest expense related to beneficial conversion feature on
convertible bond
|
|
|
-
|
|
|
|
-
|
|
|
|
247
|
|
|
|
247
|
|
Contribution to pension plan
|
|
|
(22
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Amortization and accretion of long-term debt premiums and discounts
|
|
|
(149
|
)
|
|
|
(86
|
)
|
|
|
(5
|
)
|
|
|
(91
|
)
|
Other working capital changes, net
|
|
|
(480
|
)
|
|
|
33
|
|
|
|
1,004
|
|
|
|
1,037
|
|
Other, net
|
|
|
(61
|
)
|
|
|
(35
|
)
|
|
|
200
|
|
|
|
165
|
|
Net cash provided by operating activities
|
|
|
1,707
|
|
|
|
702
|
|
|
|
1,731
|
|
|
|
2,433
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(2,389
|
)
|
|
|
(1,878
|
)
|
|
|
(1,759
|
)
|
|
|
(3,637
|
)
|
Expenditures relating to FCC licenses
|
|
|
(79
|
)
|
|
|
(31
|
)
|
|
|
(70
|
)
|
|
|
(101
|
)
|
Reimbursements relating to FCC licenses
|
|
|
95
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Change in short-term investments, net
|
|
|
53
|
|
|
|
(336
|
)
|
|
|
869
|
|
|
|
533
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
(14,112
|
)
|
|
|
(4,039
|
)
|
|
|
(18,151
|
)
|
Increase in restricted cash
|
|
|
-
|
|
|
|
(3,050
|
)
|
|
|
-
|
|
|
|
(3,050
|
)
|
Investment in Clearwire (including debt securities)
|
|
|
-
|
|
|
|
-
|
|
|
|
(228
|
)
|
|
|
(228
|
)
|
Proceeds from sales of assets and FCC licenses
|
|
|
101
|
|
|
|
3
|
|
|
|
4
|
|
|
|
7
|
|
Other, net
|
|
|
(6
|
)
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(7
|
)
|
Net cash used in investing activities
|
|
|
(2,225
|
)
|
|
|
(19,407
|
)
|
|
|
(5,227
|
)
|
|
|
(24,634
|
)
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds from debt and financings
|
|
|
-
|
|
|
|
6,826
|
|
|
|
-
|
|
|
|
6,826
|
|
Debt financing costs
|
|
|
-
|
|
|
|
(107
|
)
|
|
|
(1
|
)
|
|
|
(108
|
)
|
Repayments of debt, financing and capital lease obligations
|
|
|
(363
|
)
|
|
|
(497
|
)
|
|
|
(303
|
)
|
|
|
(800
|
)
|
Proceeds from issuance of common stock and warrants, net
|
|
|
46
|
|
|
|
18,552
|
|
|
|
53
|
|
|
|
18,605
|
|
Other, net
|
|
|
-
|
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
(14
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(317
|
)
|
|
|
24,760
|
|
|
|
(251
|
)
|
|
|
24,509
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash and Cash Equivalents
|
|
|
(835
|
)
|
|
|
6,055
|
|
|
|
(3,747
|
)
|
|
|
2,308
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, beginning of period
|
|
|
4,970
|
|
|
|
3
|
|
|
|
6,275
|
|
|
|
3,750
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, end of period
|
|
$
|
4,135
|
|
|
$
|
6,058
|
|
|
$
|
2,528
|
|
|
$
|
6,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions)
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year
|
|
Year
|
|
|
|
|
|
Quarter
|
|
Year
|
|
|
To
|
|
To
|
|
To
|
|
To
|
|
To
|
|
10 Days
|
|
101 Days
|
|
To
|
|
To
|
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Date
|
|
Ended
|
|
Ended
|
|
Date
|
|
Date
|
|
|
9/30/14
|
|
6/30/14
|
|
9/30/13
|
|
9/30/14
|
|
9/30/13
|
|
7/10/13
|
|
7/10/13
|
|
9/30/13
|
|
9/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
$
|
1,028
|
|
|
$
|
679
|
|
|
$
|
694
|
|
|
$
|
1,707
|
|
|
$
|
702
|
|
|
$
|
496
|
|
|
$
|
1,731
|
|
|
$
|
1,190
|
|
|
$
|
2,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(1,143
|
)
|
|
|
(1,246
|
)
|
|
|
(1,878
|
)
|
|
|
(2,389
|
)
|
|
|
(1,878
|
)
|
|
|
(188
|
)
|
|
|
(1,759
|
)
|
|
|
(2,066
|
)
|
|
|
(3,637
|
)
|
|
(Expenditures) Reimbursements relating to FCC licenses, net
|
|
|
(38
|
)
|
|
|
54
|
|
|
|
(31
|
)
|
|
|
16
|
|
|
|
(31
|
)
|
|
|
(2
|
)
|
|
|
(70
|
)
|
|
|
(33
|
)
|
|
|
(101
|
)
|
|
Proceeds from sales of assets and FCC licenses
|
|
|
81
|
|
|
|
20
|
|
|
|
3
|
|
|
|
101
|
|
|
|
3
|
|
|
|
-
|
|
|
|
4
|
|
|
|
3
|
|
|
|
7
|
|
|
Other investing activities, net
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(6
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
(3
|
)
|
|
|
(7
|
)
|
|
Free Cash Flow*
|
|
|
(75
|
)
|
|
|
(496
|
)
|
|
|
(1,215
|
)
|
|
|
(571
|
)
|
|
|
(1,207
|
)
|
|
|
306
|
|
|
|
(98
|
)
|
|
|
(909
|
)
|
|
|
(1,305
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt financing costs
|
|
|
-
|
|
|
|
-
|
|
|
|
(107
|
)
|
|
|
-
|
|
|
|
(107
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(107
|
)
|
|
|
(108
|
)
|
|
(Decrease) increase in debt and other, net
|
|
|
(153
|
)
|
|
|
(210
|
)
|
|
|
6,329
|
|
|
|
(363
|
)
|
|
|
6,329
|
|
|
|
-
|
|
|
|
(303
|
)
|
|
|
6,329
|
|
|
|
6,026
|
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
-
|
|
|
|
(14,112
|
)
|
|
|
-
|
|
|
|
(14,112
|
)
|
|
|
(3,530
|
)
|
|
|
(4,039
|
)
|
|
|
(17,642
|
)
|
|
|
(18,151
|
)
|
|
Proceeds from issuance of common stock and warrants, net
|
|
|
37
|
|
|
|
9
|
|
|
|
18,552
|
|
|
|
46
|
|
|
|
18,552
|
|
|
|
9
|
|
|
|
53
|
|
|
|
18,561
|
|
|
|
18,605
|
|
|
Increase in restricted cash
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,050
|
)
|
|
|
-
|
|
|
|
(3,050
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,050
|
)
|
|
|
(3,050
|
)
|
|
Investment in Clearwire (including debt securities)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(68
|
)
|
|
|
(228
|
)
|
|
|
(68
|
)
|
|
|
(228
|
)
|
|
Other financing activities, net
|
|
|
-
|
|
|
|
-
|
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
Net (Decrease) Increase in Cash, Cash Equivalents and
Short-Term Investments
|
|
$
|
(191
|
)
|
|
$
|
(697
|
)
|
|
$
|
6,383
|
|
|
$
|
(888
|
)
|
|
$
|
6,391
|
|
|
$
|
(3,283
|
)
|
|
$
|
(4,616
|
)
|
|
$
|
3,100
|
|
|
$
|
1,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
Successor
|
|
|
9/30/14
|
|
3/31/14
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,135
|
|
|
$
|
4,970
|
|
Short-term investments
|
|
|
1,167
|
|
|
|
1,220
|
|
Accounts and notes receivable, net
|
|
|
3,942
|
|
|
|
3,607
|
|
Device and accessory inventory
|
|
|
1,124
|
|
|
|
982
|
|
Deferred tax assets
|
|
|
90
|
|
|
|
128
|
|
Prepaid expenses and other current assets
|
|
|
812
|
|
|
|
672
|
|
Total current assets
|
|
|
11,270
|
|
|
|
11,579
|
|
|
|
|
|
|
Investments and other assets
|
|
|
1,044
|
|
|
|
892
|
|
Property, plant and equipment, net
|
|
|
17,557
|
|
|
|
16,299
|
|
Goodwill
|
|
|
6,343
|
|
|
|
6,383
|
|
FCC licenses and other
|
|
|
41,800
|
|
|
|
41,978
|
|
Definite-lived intangible assets, net
|
|
|
6,696
|
|
|
|
7,558
|
|
Total
|
|
$
|
84,710
|
|
|
$
|
84,689
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
4,351
|
|
|
$
|
3,163
|
|
Accrued expenses and other current liabilities
|
|
|
5,439
|
|
|
|
5,544
|
|
Current portion of long-term debt, financing and capital lease
obligations
|
|
|
808
|
|
|
|
991
|
|
Total current liabilities
|
|
|
10,598
|
|
|
|
9,698
|
|
|
|
|
|
|
Long-term debt, financing and capital lease obligations
|
|
|
31,458
|
|
|
|
31,787
|
|
Deferred tax liabilities
|
|
|
14,331
|
|
|
|
14,207
|
|
Other liabilities
|
|
|
3,660
|
|
|
|
3,685
|
|
Total liabilities
|
|
|
60,047
|
|
|
|
59,377
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Common shares
|
|
|
40
|
|
|
|
39
|
|
Paid-in capital
|
|
|
27,453
|
|
|
|
27,354
|
|
Accumulated deficit
|
|
|
(2,780
|
)
|
|
|
(2,038
|
)
|
Accumulated other comprehensive loss
|
|
|
(50
|
)
|
|
|
(43
|
)
|
Total stockholders' equity
|
|
|
24,663
|
|
|
|
25,312
|
|
Total
|
|
$
|
84,710
|
|
|
$
|
84,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT* (NON-GAAP) (Unaudited)
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
Successor
|
|
|
9/30/14
|
|
3/31/14
|
|
|
|
|
|
Total Debt
|
|
$
|
32,266
|
|
|
$
|
32,778
|
|
Less: Cash and cash equivalents
|
|
|
(4,135
|
)
|
|
|
(4,970
|
)
|
Less: Short-term investments
|
|
|
(1,167
|
)
|
|
|
(1,220
|
)
|
Net Debt*
|
|
$
|
26,964
|
|
|
$
|
26,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE OF DEBT (Unaudited)
|
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/14
|
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
|
Sprint Corporation
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
Sprint Communications, Inc.
|
|
|
|
|
|
|
Export Development Canada Facility (Tranche 2)
|
|
3
|
.580%
|
|
12/15/2015
|
|
|
500
|
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.
|
|
|
|
|
|
|
13,780
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
EKN Secured Equipment Facility ($1 Billion)
|
|
2
|
.030%
|
|
03/30/2017
|
|
|
635
|
|
|
|
|
|
|
|
Tower financing obligation
|
|
6
|
.092%
|
|
09/30/2021
|
|
|
301
|
Capital lease obligations and other
|
|
|
|
2015 - 2023
|
|
|
158
|
TOTAL PRINCIPAL
|
|
|
|
|
|
|
31,007
|
|
|
|
|
|
|
|
Net premiums
|
|
|
|
|
|
|
1,259
|
TOTAL DEBT
|
|
|
|
|
|
$
|
32,266
|
|
|
|
|
|
|
|
|
Supplemental information:
|
The Company had $2.4 billion of borrowing capacity available under
our unsecured revolving bank credit facility as of September 30,
2014. Our unsecured revolving bank credit facility expires in
February 2018.
|
|
In May 2012, certain of our subsidiaries entered into a $1.0 billion
secured equipment credit facility to finance equipment-related
purchases from Ericsson for Network Vision. The facility was fully
drawn at the end of 2013, and a balance of $635 million principal
amount was outstanding as of September 30, 2014. Repayments of
remaining principal are due semi-annually in equal installments,
along with corresponding payments of interest and fees, each March
and September, with the final payment due upon maturity in March of
2017.
|
|
|
NOTES TO THE FINANCIAL INFORMATION (Unaudited)
|
|
|
|
(1)
|
|
Financial results include a Predecessor period from January 1, 2012,
through the closing of the SoftBank transaction on July 10, 2013,
and a Successor period from October 5, 2012 through December 31,
2013. In order to present financial results in a way that offers
investors a more meaningful calendar period-to-period comparison, we
have combined results of operations and cash flows for the
Predecessor and Successor periods for the three and six-month
periods ended September 30, 2013. (See Financial Measures for
further information).
|
|
|
|
(2)
|
|
Postpaid connections on the Sprint platform are defined as retail
postpaid devices with an active line of service on the CDMA network,
including connections utilizing WiMax and LTE technology. Postpaid
connections previously on the Nextel platform are defined as retail
postpaid connections on the iDEN network, which was shut-down on
June 30, 2013. Postpaid connections from transactions are defined as
retail postpaid connections acquired from U.S. Cellular in May 2013
and Clearwire in July 2013 who had not deactivated or been
recaptured on the Sprint platform. The Sprint platform connections
results included approximately 261,000, 535,000 and 54,000 tablet
net adds during the September 30, 2014, June 30, 2014, and September
30, 2013 quarter-to-date periods, respectively, which generally
generate a significantly lower ARPU than other postpaid connections.
|
|
|
|
(3)
|
|
Prepaid connections on the Sprint platform are defined as retail
prepaid connections and session-based tablet users who utilize the
CDMA network and WiMax and LTE technology via our multi-brand
offerings. Prepaid connections previously on the Nextel platform are
defined as retail prepaid connections who utilized the iDEN network,
which was shut-down on June 30, 2013. Prepaid connections from
transactions are defined as retail prepaid connections acquired from
U.S. Cellular in May 2013 and Clearwire in July 2013 who had not
deactivated or been recaptured on the Sprint platform.
|
|
|
|
(4)
|
|
Nextel Connections Recaptures are defined as the number of
connections that deactivated service from the postpaid or prepaid
Nextel platform, as applicable, during each period but remained with
the Company as connections on the postpaid or prepaid Sprint
platform, respectively. Connections that deactivated service from
the Nextel platform and activated service on the Sprint platform are
included in the Sprint platform net additions for the applicable
period.
|
|
|
|
(5)
|
|
The Postpaid and Prepaid Nextel Recapture Rates are defined as the
portion of total connections that left the postpaid or prepaid
Nextel platform, as applicable, during the period and were retained
on the postpaid or prepaid Sprint platform, respectively.
|
|
|
|
(6)
|
|
Severance and exit costs are primarily associated with work force
reductions and exit costs associated with the Nextel platform and
those related to exiting certain operations of Clearwire.
|
|
|
|
(7)
|
|
For the second and first quarters of fiscal year 2013, included in
selling, general and administrative expenses are fees paid to
unrelated parties necessary for the transactions with SoftBank and
our acquisition of Clearwire.
|
|
|
|
*FINANCIAL MEASURES
On July 9, 2013, Sprint Communications, Inc. (formerly Sprint Nextel
Corporation) completed its acquisition of Clearwire. On July 10, 2013 we
consummated the SoftBank Merger with Starburst II, which immediately
changed its name to Sprint Corporation (now referred to as the Company
or Sprint). As a result of these transactions, the assets and
liabilities of Sprint Communications, Inc. and Clearwire were adjusted
to fair value on the respective closing dates. The Company's financial
statement presentations herein distinguish between a predecessor period
relating to Sprint Communications, Inc. for periods prior to the
SoftBank Merger (Predecessor) and a successor period (Successor). The
Successor information represents Sprint Corporation, which includes the
activity and accounts of Sprint Communications, Inc. as of and for the
three and six month periods ended September 30, 2014 and September 30,
2013 and the three month period ended June 30, 2014. The accounts and
activity for the successor periods from October 5, 2012 (date of
inception) to December 31, 2012 and from January 1, 2013 to July 10,
2013 consist of the activity of Starburst II prior to the close of the
SoftBank Merger. The Predecessor information contained herein represents
the historical basis of presentation for Sprint Communications, Inc. for
all periods prior to the SoftBank Merger date on July 10, 2013. As a
result of the valuation of assets acquired and liabilities assumed at
fair value at the time of the SoftBank Merger and Clearwire Acquisition,
the financial statements for the successor period are presented on a
measurement basis different than the predecessor period, which was
Sprint Communication Inc.'s historical cost, and are, therefore, not
comparable.
In order to present financial results in a way that offers investors a
more meaningful calendar period-to-period comparison, we have combined
the current and prior year results of operations for the predecessor
with successor results of operations on an unaudited combined basis. The
combined information for the three and six-month periods ended September
30, 2013 does not purport to represent what our consolidated results of
operations would have been if the acquisition had occurred as of the
beginning of 2013.
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. Other than the use of non-GAAP combined results
as described above, 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, 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 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.
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 amounts included as
investments in Clearwire and Sprint Communications, Inc. during the
period, if applicable. We believe that Free Cash Flow provides useful
information to investors, analysts and our management about the cash
generated by our core operations 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," "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 ability to operationalize the anticipated
benefits from the SoftBank and Clearwire transactions, the development
and deployment of new technologies; 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; 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 Transition
Report on Form 10-K for the period ended March 31, 2014. 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 55 million connections as of September 30, 2014 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 four years. You
can learn more and visit Sprint at www.sprint.com
or www.facebook.com/sprint
and www.twitter.com/sprint.
1 Rankings based on applicable RootMetrics Metro RootScore®
Reports for mobile performance as tested on best available plans and
devices on 4 mobile networks across all available network types (January
2014 - October 2014). The RootMetrics award is not an endorsement of
Sprint. Your results may vary. See www.rootmetrics.com
for details.
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