[February 05, 2015] |
|
Sprint Reports Results for Third Fiscal Quarter of 2014
Sprint Corporation (NYSE: S) today reported operating results for
the third fiscal quarter of 2014, including adding nearly 1 million
Sprint platform connections - a 42 percent increase year-over-year - as
customers responded positively to the company's new value proposition.
The company also reported consolidated net operating revenues of $9
billion, an operating loss of $2.5 billion, which included non-cash
charges of $2.1 billion, and Adjusted EBITDA* of $1.04 billion.
"We are pleased with the growth in sales in the quarter and the
improving quality of our customer base as we begin our turnaround plan,"
said Sprint CEO Marcelo Claure. "However, we acknowledge there is a long
way to go to reach our goals, including lowering our postpaid churn
rates to competitive levels. Our network performance continues to
improve, and we are now focused on a strategy that will unlock the true
potential of our spectrum assets. I am confident that we have the right
plan in place to be successful."
"I am encouraged by the progress and improving trends in the Sprint
business," said Masayoshi Son, Sprint chairman. "Marcelo and his team
have developed, and are executing against, a clear plan that will make
Sprint more competitive and better positioned for long-term growth."
New Offers Lead to Sales Growth and Higher Value Customers
Sprint continues to launch simple, straightforward offers designed to
save customers money. During the quarter, Sprint offered to cut rate
plans in half for AT&T and Verizon customers, expanded the
industry-first leasing plan for iPhone® to additional devices
and lease terms, and launched the new Data Boost plans on Boost Mobile.
These actions, among others, resulted in improvement in Sprint platform
sales.
-
Highest postpaid gross additions in three years
-
Highest postpaid upgrade rate on record at 11.5 percent illustrating a
recommitment from existing customers
-
Highest prepaid gross additions with nearly 30 percent year-over-year
growth
This growth was accompanied by a simultaneous improvement in the quality
of sales during the quarter.
-
Highest percentage of prime credit quality
postpaid gross additions on record
-
Postpaid phone gross additions
grew 20 percent year-over-year
-
New consumer account gross additions with three
or more lines more than doubled from the year-ago
period
Sprint Platform Adds Nearly 1 Million Connections
-
Sprint platform net additions were 967,000 compared to 590,000 in the
prior quarter and 682,000 in the prior year quarter.
-
Postpaid net additions of 30,000 increased by 302,000 sequentially
and decreased by 28,000 year-over-year. Postpaid phone losses of
205,000 improved by 295,000 sequentially and 202,000
year-over-year, as higher prime credit quality gross additions
were partially offset by higher churn. Device financing options
accounted for 46 percent of postpaid sales in the quarter,
compared to 27 percent in the prior quarter and 7 percent in the
year-ago period.
-
Prepaid net additions of 410,000 were up 88,000 year-over-year due
to growth in the Boost brand.
-
Wholesale net additions of 527,000 were up 225,000 from the prior
year quarter, mostly driven by connected devices.
-
Sprint had 55.9 million total connections at the end of the quarter.
Quarterly Financial Results
-
Net operating revenues of $9 billion were down 2 percent
year-over-year, as lower service revenue was mostly offset by higher
equipment revenue.
-
Consolidated Adjusted EBITDA* of $1.04 billion declined 10 percent
from the prior year period, driven mostly by declines in the Wireline
segment.
-
Wireless Adjusted EBITDA* of $1.03 billion was relatively flat from
the prior year period. Lower service revenues primarily due to
postpaid phone customer losses and additional expenses related to
higher sales volumes were mostly offset by higher equipment revenue
from the introduction of installment billing and lower cost of service
expenses related to roaming and the completion of the 3G and voice
network replacement.
-
Operating loss was $2.5 billion compared to an operating loss of $576
million in the year-ago quarter, as the company recorded a non-cash
impairment charge of approximately $2.1 billion. The non-cash charge
includes a $1.9 billion reduction to the Sprint trade name and
approximately $200 million to reduce the carrying value of wireline
network assets. Excluding this non-cash impact, operating loss would
have improved $169 million year-over-year.
Significant Network Performance Improvements
Sprint is focused on leveraging its spectrum portfolio to provide a
network that delivers the consistent reliability, capacity and speed
that customers demand. During the quarter, Sprint's 800 MHz voice
deployment reached nationwide availability, 4G LTE coverage expanded to
cover 270 million people, and the 2.5 GHz 4G LTE deployment now covers
125 million people. As a result, network performance continued to
improve in third-party measurements.
-
According to independent mobile analytics firm RootMetrics, Sprint was
the carrier with the highest net gain in first-place or shared
first-place second half 2014 metro network award wins in the
categories of Overall, Reliability, Call and Text performance.
-
Sprint recently ranked second for overall network performance in
Chicago, according to RootMetrics.
-
Recent reports by RootMetrics gave Sprint's network 133 first-place or
shared first-place second half 2014 Metro RootScore Awards for
reliability, call and/or text performance in cities across the country.
-
Sprint's lowest dropped call rate ever and over 50 percent
year-over-year improvement, based on independent, third-party data
provided by Nielsen.ii
Conference Call and Webcast
-
Date/Time: 8:30 a.m. ET, Feb. 5, 2015
-
Call-in Information
-
U.S./Canada: 866-360-1063 (ID: 63815208)
-
International: 706-679-4164 (ID: 63815208)
-
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
Financial results in the enclosed tables include a predecessor period
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-to-date results, we have combined the
2013 results of operations for the predecessor and successor periods.
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
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
Net Additions (Losses) (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
30
|
|
|
(272
|
)
|
|
58
|
|
|
(423
|
)
|
|
(108
|
)
|
Prepaid (3)
|
|
410
|
|
|
35
|
|
|
322
|
|
|
(97
|
)
|
|
(80
|
)
|
Wholesale and affiliate
|
|
527
|
|
|
827
|
|
|
302
|
|
|
1,857
|
|
|
255
|
|
Total Sprint platform
|
|
967
|
|
|
590
|
|
|
682
|
|
|
1,337
|
|
|
67
|
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,060
|
)
|
Prepaid (3)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(255
|
)
|
Total Nextel platform
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,315
|
)
|
Transactions:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
(49
|
)
|
|
(64
|
)
|
|
(127
|
)
|
|
(177
|
)
|
|
(481
|
)
|
Prepaid (3)
|
|
(39
|
)
|
|
(55
|
)
|
|
(103
|
)
|
|
(171
|
)
|
|
(179
|
)
|
Wholesale
|
|
13
|
|
|
13
|
|
|
25
|
|
|
53
|
|
|
38
|
|
Total transactions
|
|
(75
|
)
|
|
(106
|
)
|
|
(205
|
)
|
|
(295
|
)
|
|
(622
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid net losses
|
|
(19
|
)
|
|
(336
|
)
|
|
(69
|
)
|
|
(600
|
)
|
|
(1,649
|
)
|
Total retail prepaid net additions (losses)
|
|
371
|
|
|
(20
|
)
|
|
219
|
|
|
(268
|
)
|
|
(514
|
)
|
Total wholesale and affiliate net additions
|
|
540
|
|
|
840
|
|
|
327
|
|
|
1,910
|
|
|
293
|
|
Total Wireless Net Additions (Losses)
|
|
892
|
|
|
484
|
|
|
477
|
|
|
1,042
|
|
|
(1,870
|
)
|
|
|
|
|
|
|
|
|
|
|
|
End of Period Connections (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
29,495
|
|
|
29,465
|
|
|
30,149
|
|
|
29,495
|
|
|
30,149
|
|
Prepaid (3)
|
|
15,160
|
|
|
14,750
|
|
|
15,621
|
|
|
15,160
|
|
|
15,621
|
|
Wholesale and affiliate
|
|
10,233
|
|
|
9,706
|
|
|
8,164
|
|
|
10,233
|
|
|
8,164
|
|
Total Sprint platform
|
|
54,888
|
|
|
53,921
|
|
|
53,934
|
|
|
54,888
|
|
|
53,934
|
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Prepaid (3)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total Nextel platform
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Transactions: (a)
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
409
|
|
|
458
|
|
|
688
|
|
|
409
|
|
|
688
|
|
Prepaid (3)
|
|
379
|
|
|
418
|
|
|
601
|
|
|
379
|
|
|
601
|
|
Wholesale
|
|
253
|
|
|
240
|
|
|
131
|
|
|
253
|
|
|
131
|
|
Total transactions
|
|
1,041
|
|
|
1,116
|
|
|
1,420
|
|
|
1,041
|
|
|
1,420
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid end of period connections
|
|
29,904
|
|
|
29,923
|
|
|
30,837
|
|
|
29,904
|
|
|
30,837
|
|
Total retail prepaid end of period connections
|
|
15,539
|
|
|
15,168
|
|
|
16,222
|
|
|
15,539
|
|
|
16,222
|
|
Total wholesale and affiliate end of period connections
|
|
10,486
|
|
|
9,946
|
|
|
8,295
|
|
|
10,486
|
|
|
8,295
|
|
Total End of Period Connections
|
|
55,929
|
|
|
55,037
|
|
|
55,354
|
|
|
55,929
|
|
|
55,354
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data - Connected Devices
|
|
|
|
|
|
|
|
|
|
|
End of Period Connections (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Retail postpaid
|
|
1,180
|
|
|
1,039
|
|
|
922
|
|
|
1,180
|
|
|
922
|
|
Wholesale and affiliate
|
|
5,175
|
|
|
4,635
|
|
|
3,578
|
|
|
5,175
|
|
|
3,578
|
|
Total
|
|
6,355
|
|
|
5,674
|
|
|
4,500
|
|
|
6,355
|
|
|
4,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Churn
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
2.30
|
%
|
|
2.18
|
%
|
|
2.07
|
%
|
|
2.18
|
%
|
|
1.96
|
%
|
Prepaid
|
|
3.94
|
%
|
|
3.76
|
%
|
|
3.01
|
%
|
|
4.05
|
%
|
|
3.94
|
%
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
33.90
|
%
|
Prepaid
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
32.13
|
%
|
Transactions: (a)
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
4.09
|
%
|
|
4.66
|
%
|
|
5.48
|
%
|
|
4.30
|
%
|
|
7.65
|
%
|
Prepaid
|
|
4.95
|
%
|
|
5.70
|
%
|
|
8.18
|
%
|
|
5.70
|
%
|
|
8.66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid churn
|
|
2.33
|
%
|
|
2.22
|
%
|
|
2.15
|
%
|
|
2.21
|
%
|
|
2.29
|
%
|
Total retail prepaid churn
|
|
3.97
|
%
|
|
3.81
|
%
|
|
3.22
|
%
|
|
4.09
|
%
|
|
4.17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
ARPU (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
$
|
58.90
|
|
$
|
60.58
|
|
$
|
64.11
|
|
$
|
60.52
|
|
$
|
64.17
|
|
$
|
64.25
|
|
$
|
64.20
|
Prepaid
|
|
|
$
|
27.12
|
|
$
|
27.19
|
|
$
|
26.78
|
|
$
|
27.23
|
|
$
|
26.01
|
|
$
|
26.96
|
|
$
|
26.36
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
36.66
|
|
$
|
36.66
|
Prepaid
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
34.48
|
|
$
|
34.48
|
Transactions: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
$
|
39.85
|
|
$
|
39.69
|
|
$
|
36.30
|
|
$
|
39.54
|
|
$
|
36.89
|
|
$
|
56.98
|
|
$
|
39.96
|
Prepaid
|
|
|
$
|
45.80
|
|
$
|
45.52
|
|
$
|
40.80
|
|
$
|
45.46
|
|
$
|
40.71
|
|
$
|
18.26
|
|
$
|
41.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail postpaid ARPU
|
|
|
$
|
58.63
|
|
$
|
60.24
|
|
$
|
63.44
|
|
$
|
60.18
|
|
$
|
63.46
|
|
$
|
63.68
|
|
$
|
63.57
|
Total retail prepaid ARPU
|
|
|
$
|
27.61
|
|
$
|
27.73
|
|
$
|
27.34
|
|
$
|
27.77
|
|
$
|
26.64
|
|
$
|
27.01
|
|
$
|
26.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RECONCILIATION - AVERAGE BILLINGS PER USER (ABPU)*
(Unaudited)
|
(Millions, except ABPU)
|
|
|
|
Successor
|
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
ABPU (c)
|
|
|
|
|
|
|
|
|
|
Sprint platform service revenue
|
|
|
$
|
5,202
|
|
$
|
5,377
|
|
$
|
5,782
|
|
$
|
16,132
|
Add: Installment plans and lease billings
|
|
|
|
288
|
|
|
193
|
|
|
11
|
|
|
617
|
Total billings for Sprint platform postpaid connections
|
|
|
$
|
5,490
|
|
$
|
5,570
|
|
$
|
5,793
|
|
$
|
16,749
|
|
|
|
|
|
|
|
|
|
|
Sprint platform ABPU
|
|
|
$
|
62.16
|
|
$
|
62.75
|
|
$
|
64.24
|
|
$
|
62.84
|
|
|
|
|
|
|
|
|
|
|
(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 year-to-date December 31, 2013 period aggregate
service revenue of the 101 days ended July 10, 2013 predecessor period
and the year-to-date December 31, 2013 successor period divided by the
sum of the average connections during the year-to-date period.
(c) Sprint platform postpaid ABPU is calculated by dividing
service revenue earned from customers plus installment plans and lease
billings by the sum of the average number of connections during the
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
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
$
|
8,973
|
|
|
$
|
8,488
|
|
|
$
|
9,142
|
|
|
$
|
26,250
|
|
|
$
|
16,891
|
|
|
$
|
9,809
|
|
|
$
|
26,700
|
|
Net Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
2,330
|
|
|
|
2,429
|
|
|
|
2,704
|
|
|
|
7,279
|
|
|
|
5,174
|
|
|
|
3,033
|
|
|
|
8,207
|
|
Cost of products
|
|
|
2,952
|
|
|
|
2,372
|
|
|
|
2,731
|
|
|
|
7,482
|
|
|
|
4,603
|
|
|
|
2,579
|
|
|
|
7,182
|
|
Selling, general and administrative
|
|
|
2,647
|
|
|
|
2,301
|
|
|
|
2,546
|
|
|
|
7,232
|
|
|
|
4,827
|
|
|
|
2,731
|
|
|
|
7,558
|
|
Depreciation and amortization
|
|
|
1,320
|
|
|
|
1,294
|
|
|
|
1,531
|
|
|
|
3,895
|
|
|
|
2,934
|
|
|
|
1,753
|
|
|
|
4,687
|
|
Impairments (6)
|
|
|
2,133
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,133
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other, net
|
|
|
131
|
|
|
|
284
|
|
|
|
206
|
|
|
|
442
|
|
|
|
309
|
|
|
|
627
|
|
|
|
936
|
|
Total net operating expenses
|
|
|
11,513
|
|
|
|
8,680
|
|
|
|
9,718
|
|
|
|
28,463
|
|
|
|
17,847
|
|
|
|
10,723
|
|
|
|
28,570
|
|
Operating Loss
|
|
|
(2,540
|
)
|
|
|
(192
|
)
|
|
|
(576
|
)
|
|
|
(2,213
|
)
|
|
|
(956
|
)
|
|
|
(914
|
)
|
|
|
(1,870
|
)
|
Interest expense
|
|
|
(506
|
)
|
|
|
(510
|
)
|
|
|
(502
|
)
|
|
|
(1,528
|
)
|
|
|
(918
|
)
|
|
|
(703
|
)
|
|
|
(1,621
|
)
|
Equity in earnings of unconsolidated investments and other, net
|
|
|
10
|
|
|
|
8
|
|
|
|
55
|
|
|
|
19
|
|
|
|
67
|
|
|
|
2,665
|
|
|
|
2,732
|
|
(Loss) Income before Income Taxes
|
|
|
(3,036
|
)
|
|
|
(694
|
)
|
|
|
(1,023
|
)
|
|
|
(3,722
|
)
|
|
|
(1,807
|
)
|
|
|
1,048
|
|
|
|
(759
|
)
|
Income tax benefit (expense)
|
|
|
657
|
|
|
|
(71
|
)
|
|
|
(15
|
)
|
|
|
601
|
|
|
|
(44
|
)
|
|
|
(1,563
|
)
|
|
|
(1,607
|
)
|
Net Loss
|
|
$
|
(2,379
|
)
|
|
$
|
(765
|
)
|
|
$
|
(1,038
|
)
|
|
$
|
(3,121
|
)
|
|
$
|
(1,851
|
)
|
|
$
|
(515
|
)
|
|
$
|
(2,366
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Net Loss Per Common Share
|
|
$
|
(0.60
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.79
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.17
|
)
|
|
|
NM
|
|
Diluted Net Loss Per Common Share
|
|
$
|
(0.60
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.79
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.17
|
)
|
|
|
NM
|
|
Basic Weighted Average Common Shares outstanding
|
|
|
3,957
|
|
|
|
3,949
|
|
|
|
3,944
|
|
|
|
3,950
|
|
|
|
3,607
|
|
|
|
3,038
|
|
|
|
NM
|
|
Diluted Weighted Average Common Shares outstanding
|
|
|
3,957
|
|
|
|
3,949
|
|
|
|
3,944
|
|
|
|
3,950
|
|
|
|
3,607
|
|
|
|
3,038
|
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
21.6
|
%
|
|
|
-10.2
|
%
|
|
|
-1.5
|
%
|
|
|
16.1
|
%
|
|
|
-2.4
|
%
|
|
|
149.1
|
%
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RECONCILIATION - NET LOSS TO ADJUSTED EBITDA* (Unaudited)
|
(Millions)
|
|
|
Successor
|
|
Predecessor
|
|
Combined(1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(2,379
|
)
|
|
$
|
(765
|
)
|
|
$
|
(1,038
|
)
|
|
$
|
(3,121
|
)
|
|
$
|
(1,851
|
)
|
|
$
|
(515
|
)
|
|
$
|
(2,366
|
)
|
Income tax (benefit) expense
|
|
|
(657
|
)
|
|
|
71
|
|
|
|
15
|
|
|
|
(601
|
)
|
|
|
44
|
|
|
|
1,563
|
|
|
|
1,607
|
|
(Loss) Income before Income Taxes
|
|
|
(3,036
|
)
|
|
|
(694
|
)
|
|
|
(1,023
|
)
|
|
|
(3,722
|
)
|
|
|
(1,807
|
)
|
|
|
1,048
|
|
|
|
(759
|
)
|
Equity in earnings of unconsolidated investments and other, net
|
|
|
(10
|
)
|
|
|
(8
|
)
|
|
|
(55
|
)
|
|
|
(19
|
)
|
|
|
(67
|
)
|
|
|
(2,665
|
)
|
|
|
(2,732
|
)
|
Interest expense
|
|
|
506
|
|
|
|
510
|
|
|
|
502
|
|
|
|
1,528
|
|
|
|
918
|
|
|
|
703
|
|
|
|
1,621
|
|
Operating Loss
|
|
|
(2,540
|
)
|
|
|
(192
|
)
|
|
|
(576
|
)
|
|
|
(2,213
|
)
|
|
|
(956
|
)
|
|
|
(914
|
)
|
|
|
(1,870
|
)
|
Depreciation and amortization
|
|
|
1,320
|
|
|
|
1,294
|
|
|
|
1,531
|
|
|
|
3,895
|
|
|
|
2,934
|
|
|
|
1,753
|
|
|
|
4,687
|
|
EBITDA*
|
|
|
(1,220
|
)
|
|
|
1,102
|
|
|
|
955
|
|
|
|
1,682
|
|
|
|
1,978
|
|
|
|
839
|
|
|
|
2,817
|
|
Severance and exit costs (7)
|
|
|
22
|
|
|
|
284
|
|
|
|
206
|
|
|
|
333
|
|
|
|
309
|
|
|
|
627
|
|
|
|
936
|
|
Impairments (6)
|
|
|
2,133
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,133
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Litigation (8)
|
|
|
91
|
|
|
|
-
|
|
|
|
-
|
|
|
|
91
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Business combinations (9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
100
|
|
|
|
53
|
|
|
|
153
|
|
Partial pension settlement (10)
|
|
|
59
|
|
|
|
-
|
|
|
|
-
|
|
|
|
59
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Release of assumed liability - U.S. Cellular asset acquisition (11)
|
|
|
(41
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(41
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Hurricane Sandy (12)
|
|
|
-
|
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
Adjusted EBITDA*
|
|
$
|
1,044
|
|
|
$
|
1,386
|
|
|
$
|
1,154
|
|
|
$
|
4,257
|
|
|
$
|
2,380
|
|
|
$
|
1,519
|
|
|
$
|
3,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin*
|
|
|
14.4
|
%
|
|
|
18.6
|
%
|
|
|
14.5
|
%
|
|
|
19.0
|
%
|
|
|
15.8
|
%
|
|
|
17.0
|
%
|
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in deferred tax asset valuation allowance
|
|
$
|
500
|
|
|
$
|
324
|
|
|
$
|
381
|
|
|
$
|
797
|
|
|
$
|
708
|
|
|
$
|
1,145
|
|
|
$
|
1,853
|
|
Accrued capital expenditures
|
|
$
|
1,827
|
|
|
$
|
1,517
|
|
|
$
|
1,901
|
|
|
$
|
4,760
|
|
|
$
|
3,567
|
|
|
$
|
2,072
|
|
|
$
|
5,639
|
|
Cash paid for capital expenditures
|
|
$
|
1,568
|
|
|
$
|
1,143
|
|
|
$
|
1,969
|
|
|
$
|
3,957
|
|
|
$
|
3,847
|
|
|
$
|
1,759
|
|
|
$
|
5,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
|
(Millions)
|
|
|
Successor
|
|
Predecessor
|
|
Combined(1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
Net Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
$
|
5,202
|
|
|
$
|
5,377
|
|
|
$
|
5,782
|
|
|
$
|
16,132
|
|
|
$
|
10,983
|
|
|
$
|
6,469
|
|
|
$
|
17,452
|
|
Prepaid (3)
|
|
|
1,215
|
|
|
|
1,197
|
|
|
|
1,237
|
|
|
|
3,633
|
|
|
|
2,265
|
|
|
|
1,408
|
|
|
|
3,673
|
|
Wholesale, affiliate and other
|
|
|
191
|
|
|
|
181
|
|
|
|
132
|
|
|
|
535
|
|
|
|
248
|
|
|
|
146
|
|
|
|
394
|
|
Total Sprint platform
|
|
|
6,608
|
|
|
|
6,755
|
|
|
|
7,151
|
|
|
|
20,300
|
|
|
|
13,496
|
|
|
|
8,023
|
|
|
|
21,519
|
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
74
|
|
|
|
74
|
|
Prepaid (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17
|
|
|
|
17
|
|
Total Nextel platform
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
91
|
|
|
|
91
|
|
Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid (2)
|
|
|
52
|
|
|
|
58
|
|
|
|
81
|
|
|
|
175
|
|
|
|
170
|
|
|
|
26
|
|
|
|
196
|
|
Prepaid (3)
|
|
|
54
|
|
|
|
61
|
|
|
|
80
|
|
|
|
184
|
|
|
|
161
|
|
|
|
2
|
|
|
|
163
|
|
Wholesale
|
|
|
18
|
|
|
|
16
|
|
|
|
10
|
|
|
|
50
|
|
|
|
18
|
|
|
|
-
|
|
|
|
18
|
|
Total transactions
|
|
|
124
|
|
|
|
135
|
|
|
|
171
|
|
|
|
409
|
|
|
|
349
|
|
|
|
28
|
|
|
|
377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment revenue
|
|
|
1,701
|
|
|
|
1,039
|
|
|
|
1,161
|
|
|
|
3,846
|
|
|
|
1,797
|
|
|
|
894
|
|
|
|
2,691
|
|
Total net operating revenues
|
|
|
8,433
|
|
|
|
7,929
|
|
|
|
8,483
|
|
|
|
24,555
|
|
|
|
15,642
|
|
|
|
9,036
|
|
|
|
24,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
1,902
|
|
|
|
1,988
|
|
|
|
2,248
|
|
|
|
5,939
|
|
|
|
4,335
|
|
|
|
2,532
|
|
|
|
6,867
|
|
Cost of products
|
|
|
2,952
|
|
|
|
2,372
|
|
|
|
2,731
|
|
|
|
7,482
|
|
|
|
4,603
|
|
|
|
2,579
|
|
|
|
7,182
|
|
Selling, general and administrative
|
|
|
2,545
|
|
|
|
2,199
|
|
|
|
2,444
|
|
|
|
6,937
|
|
|
|
4,544
|
|
|
|
2,550
|
|
|
|
7,094
|
|
Depreciation and amortization
|
|
|
1,259
|
|
|
|
1,232
|
|
|
|
1,470
|
|
|
|
3,703
|
|
|
|
2,808
|
|
|
|
1,636
|
|
|
|
4,444
|
|
Impairments (6)
|
|
|
1,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other, net
|
|
|
107
|
|
|
|
248
|
|
|
|
187
|
|
|
|
378
|
|
|
|
280
|
|
|
|
627
|
|
|
|
907
|
|
Total net operating expenses
|
|
|
10,665
|
|
|
|
8,039
|
|
|
|
9,080
|
|
|
|
26,339
|
|
|
|
16,570
|
|
|
|
9,924
|
|
|
|
26,494
|
|
Operating Loss
|
|
$
|
(2,232
|
)
|
|
$
|
(110
|
)
|
|
$
|
(597
|
)
|
|
$
|
(1,784
|
)
|
|
$
|
(928
|
)
|
|
$
|
(888
|
)
|
|
$
|
(1,816
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Revenue Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail service revenue
|
|
$
|
6,523
|
|
|
$
|
6,693
|
|
|
$
|
7,180
|
|
|
$
|
20,124
|
|
|
$
|
13,579
|
|
|
$
|
7,996
|
|
|
$
|
21,575
|
|
Total service revenue
|
|
$
|
6,732
|
|
|
$
|
6,890
|
|
|
$
|
7,322
|
|
|
$
|
20,709
|
|
|
$
|
13,845
|
|
|
$
|
8,142
|
|
|
$
|
21,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELESS NON-GAAP RECONCILIATION (Unaudited)
|
(Millions)
|
|
|
Successor
|
|
Predecessor
|
|
Combined(1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
$
|
(2,232
|
)
|
|
$
|
(110
|
)
|
|
$
|
(597
|
)
|
|
$
|
(1,784
|
)
|
|
$
|
(928
|
)
|
|
$
|
(888
|
)
|
|
$
|
(1,816
|
)
|
Severance and exit costs (7)
|
|
|
21
|
|
|
|
248
|
|
|
|
187
|
|
|
|
292
|
|
|
|
280
|
|
|
|
627
|
|
|
|
907
|
|
Impairments (6)
|
|
|
1,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Litigation (8)
|
|
|
84
|
|
|
|
-
|
|
|
|
-
|
|
|
|
84
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Business combinations (9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25
|
|
|
|
-
|
|
|
|
25
|
|
Partial pension settlement (10)
|
|
|
43
|
|
|
|
-
|
|
|
|
-
|
|
|
|
43
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Release of assumed liability - U.S. Cellular asset acquisition (11)
|
|
|
(41
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(41
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Hurricane Sandy (12)
|
|
|
-
|
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
Depreciation and amortization
|
|
|
1,259
|
|
|
|
1,232
|
|
|
|
1,470
|
|
|
|
3,703
|
|
|
|
2,808
|
|
|
|
1,636
|
|
|
|
4,444
|
|
Adjusted EBITDA*
|
|
$
|
1,034
|
|
|
$
|
1,370
|
|
|
$
|
1,053
|
|
|
$
|
4,197
|
|
|
$
|
2,178
|
|
|
$
|
1,375
|
|
|
$
|
3,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin*
|
|
|
15.4
|
%
|
|
|
19.9
|
%
|
|
|
14.4
|
%
|
|
|
20.3
|
%
|
|
|
15.7
|
%
|
|
|
16.9
|
%
|
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures
|
|
$
|
1,616
|
|
|
$
|
1,354
|
|
|
$
|
1,716
|
|
|
$
|
4,246
|
|
|
$
|
3,243
|
|
|
$
|
1,884
|
|
|
$
|
5,127
|
|
Cash paid for capital expenditures
|
|
$
|
1,376
|
|
|
$
|
989
|
|
|
$
|
1,792
|
|
|
$
|
3,485
|
|
|
$
|
3,535
|
|
|
$
|
1,570
|
|
|
$
|
5,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
|
(Millions)
|
|
|
Successor
|
|
Predecessor
|
|
Combined(1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
Net Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
|
$
|
289
|
|
|
$
|
294
|
|
|
$
|
386
|
|
|
$
|
910
|
|
|
$
|
719
|
|
|
$
|
419
|
|
|
$
|
1,138
|
|
Data
|
|
|
52
|
|
|
|
53
|
|
|
|
81
|
|
|
|
161
|
|
|
|
138
|
|
|
|
94
|
|
|
|
232
|
|
Internet
|
|
|
333
|
|
|
|
340
|
|
|
|
374
|
|
|
|
1,018
|
|
|
|
747
|
|
|
|
479
|
|
|
|
1,226
|
|
Other
|
|
|
18
|
|
|
|
21
|
|
|
|
18
|
|
|
|
57
|
|
|
|
32
|
|
|
|
16
|
|
|
|
48
|
|
Total net operating revenues
|
|
|
692
|
|
|
|
708
|
|
|
|
859
|
|
|
|
2,146
|
|
|
|
1,636
|
|
|
|
1,008
|
|
|
|
2,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services and products
|
|
|
581
|
|
|
|
593
|
|
|
|
659
|
|
|
|
1,800
|
|
|
|
1,235
|
|
|
|
741
|
|
|
|
1,976
|
|
Selling, general and administrative
|
|
|
100
|
|
|
|
88
|
|
|
|
95
|
|
|
|
273
|
|
|
|
179
|
|
|
|
123
|
|
|
|
302
|
|
Depreciation and amortization
|
|
|
59
|
|
|
|
60
|
|
|
|
62
|
|
|
|
186
|
|
|
|
123
|
|
|
|
115
|
|
|
|
238
|
|
Impairments (6)
|
|
|
233
|
|
|
|
-
|
|
|
|
-
|
|
|
|
233
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other, net
|
|
|
24
|
|
|
|
35
|
|
|
|
20
|
|
|
|
63
|
|
|
|
30
|
|
|
|
-
|
|
|
|
30
|
|
Total net operating expenses
|
|
|
997
|
|
|
|
776
|
|
|
|
836
|
|
|
|
2,555
|
|
|
|
1,567
|
|
|
|
979
|
|
|
|
2,546
|
|
Operating (Loss) Income
|
|
$
|
(305
|
)
|
|
$
|
(68
|
)
|
|
$
|
23
|
|
|
$
|
(409
|
)
|
|
$
|
69
|
|
|
$
|
29
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
|
(Millions)
|
|
|
Successor
|
|
Predecessor
|
|
Combined(1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income
|
|
$
|
(305
|
)
|
|
$
|
(68
|
)
|
|
$
|
23
|
|
|
$
|
(409
|
)
|
|
$
|
69
|
|
|
$
|
29
|
|
|
$
|
98
|
|
Severance and exit costs (7)
|
|
|
2
|
|
|
|
35
|
|
|
|
20
|
|
|
|
41
|
|
|
|
30
|
|
|
|
-
|
|
|
|
30
|
|
Impairments (6)
|
|
|
233
|
|
|
|
-
|
|
|
|
-
|
|
|
|
233
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Litigation (8)
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Partial pension settlement (10)
|
|
|
16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
59
|
|
|
|
60
|
|
|
|
62
|
|
|
|
186
|
|
|
|
123
|
|
|
|
115
|
|
|
|
238
|
|
Adjusted EBITDA*
|
|
$
|
11
|
|
|
$
|
27
|
|
|
$
|
105
|
|
|
$
|
73
|
|
|
$
|
222
|
|
|
$
|
144
|
|
|
$
|
366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin*
|
|
|
1.6
|
%
|
|
|
3.8
|
%
|
|
|
12.2
|
%
|
|
|
3.4
|
%
|
|
|
13.6
|
%
|
|
|
14.3
|
%
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures
|
|
$
|
70
|
|
|
$
|
74
|
|
|
$
|
82
|
|
|
$
|
210
|
|
|
$
|
155
|
|
|
$
|
104
|
|
|
$
|
259
|
|
Cash paid for capital expenditures
|
|
$
|
81
|
|
|
$
|
65
|
|
|
$
|
80
|
|
|
$
|
205
|
|
|
$
|
153
|
|
|
$
|
110
|
|
|
$
|
263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
|
(Millions)
|
|
Successor
|
|
Predecessor
|
|
Combined (1)
|
|
|
Year
To
Date
|
|
Year
To
Date
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
|
|
|
|
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,121
|
)
|
|
$
|
(1,851
|
)
|
|
$
|
(515
|
)
|
|
$
|
(2,366
|
)
|
Impairments (6)
|
|
|
2,133
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
3,895
|
|
|
|
2,934
|
|
|
|
1,753
|
|
|
|
4,687
|
|
Provision for losses on accounts receivable
|
|
|
730
|
|
|
|
261
|
|
|
|
111
|
|
|
|
372
|
|
Share-based and long-term incentive compensation expense
|
|
|
89
|
|
|
|
98
|
|
|
|
20
|
|
|
|
118
|
|
Deferred income tax (benefit) expense
|
|
|
(634
|
)
|
|
|
33
|
|
|
|
1,562
|
|
|
|
1,595
|
|
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
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
Call premiums on debt redemptions
|
|
|
-
|
|
|
|
(180
|
)
|
|
|
-
|
|
|
|
(180
|
)
|
Amortization and accretion of long-term debt premiums and discounts,
net
|
|
|
(226
|
)
|
|
|
(160
|
)
|
|
|
(5
|
)
|
|
|
(165
|
)
|
Other working capital changes, net
|
|
|
(1,217
|
)
|
|
|
(921
|
)
|
|
|
1,004
|
|
|
|
83
|
|
Other, net
|
|
|
(153
|
)
|
|
|
(266
|
)
|
|
|
200
|
|
|
|
(66
|
)
|
Net cash provided by (used in) operating activities
|
|
|
1,474
|
|
|
|
(59
|
)
|
|
|
1,731
|
|
|
|
1,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(3,957
|
)
|
|
|
(3,847
|
)
|
|
|
(1,759
|
)
|
|
|
(5,606
|
)
|
Expenditures relating to FCC licenses
|
|
|
(121
|
)
|
|
|
(146
|
)
|
|
|
(70
|
)
|
|
|
(216
|
)
|
Reimbursements relating to FCC licenses
|
|
|
95
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Change in short-term investments, net
|
|
|
966
|
|
|
|
(4
|
)
|
|
|
869
|
|
|
|
865
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
(14,112
|
)
|
|
|
(4,039
|
)
|
|
|
(18,151
|
)
|
Investment in Clearwire (including debt securities)
|
|
|
-
|
|
|
|
-
|
|
|
|
(228
|
)
|
|
|
(228
|
)
|
Proceeds from sales of assets and FCC licenses
|
|
|
114
|
|
|
|
7
|
|
|
|
4
|
|
|
|
11
|
|
Other, net
|
|
|
(9
|
)
|
|
|
(6
|
)
|
|
|
(4
|
)
|
|
|
(10
|
)
|
Net cash used in investing activities
|
|
|
(2,912
|
)
|
|
|
(18,108
|
)
|
|
|
(5,227
|
)
|
|
|
(23,335
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds from debt and financings
|
|
|
300
|
|
|
|
9,500
|
|
|
|
-
|
|
|
|
9,500
|
|
Debt financing costs
|
|
|
(37
|
)
|
|
|
(147
|
)
|
|
|
(1
|
)
|
|
|
(148
|
)
|
Repayments of debt, financing and capital lease obligations
|
|
|
(390
|
)
|
|
|
(3,378
|
)
|
|
|
(303
|
)
|
|
|
(3,681
|
)
|
Proceeds from issuance of common stock and warrants, net
|
|
|
50
|
|
|
|
18,567
|
|
|
|
53
|
|
|
|
18,620
|
|
Other, net
|
|
|
-
|
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
(14
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(77
|
)
|
|
|
24,528
|
|
|
|
(251
|
)
|
|
|
24,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash and Cash Equivalents
|
|
|
(1,515
|
)
|
|
|
6,361
|
|
|
|
(3,747
|
)
|
|
|
2,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, beginning of period
|
|
|
4,970
|
|
|
|
3
|
|
|
|
6,275
|
|
|
|
3,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, end of period
|
|
$
|
3,455
|
|
|
$
|
6,364
|
|
|
$
|
2,528
|
|
|
$
|
6,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions)
|
|
Successor
|
|
Predecessor
|
|
Combined(1)
|
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Quarter
To
Date
|
|
Year
To
Date
|
|
Year
To
Date
|
|
101 Days
Ended
|
|
Year
To
Date
|
|
|
12/31/14
|
|
9/30/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
|
7/10/13
|
|
12/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash (Used in) Provided by Operating Activities
|
|
$
|
(233
|
)
|
|
$
|
1,028
|
|
|
$
|
(761
|
)
|
|
$
|
1,474
|
|
|
$
|
(59
|
)
|
|
$
|
1,731
|
|
|
$
|
1,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(1,568
|
)
|
|
|
(1,143
|
)
|
|
|
(1,969
|
)
|
|
|
(3,957
|
)
|
|
|
(3,847
|
)
|
|
|
(1,759
|
)
|
|
|
(5,606
|
)
|
Expenditures relating to FCC licenses, net
|
|
|
(42
|
)
|
|
|
(38
|
)
|
|
|
(115
|
)
|
|
|
(26
|
)
|
|
|
(146
|
)
|
|
|
(70
|
)
|
|
|
(216
|
)
|
Proceeds from sales of assets and FCC licenses
|
|
|
13
|
|
|
|
81
|
|
|
|
4
|
|
|
|
114
|
|
|
|
7
|
|
|
|
4
|
|
|
|
11
|
|
Other investing activities, net
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(9
|
)
|
|
|
(6
|
)
|
|
|
(4
|
)
|
|
|
(10
|
)
|
Free Cash Flow*
|
|
|
(1,833
|
)
|
|
|
(75
|
)
|
|
|
(2,844
|
)
|
|
|
(2,404
|
)
|
|
|
(4,051
|
)
|
|
|
(98
|
)
|
|
|
(4,149
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt financing costs
|
|
|
(37
|
)
|
|
|
-
|
|
|
|
(40
|
)
|
|
|
(37
|
)
|
|
|
(147
|
)
|
|
|
(1
|
)
|
|
|
(148
|
)
|
Increase (decrease) in debt and other, net
|
|
|
273
|
|
|
|
(153
|
)
|
|
|
(207
|
)
|
|
|
(90
|
)
|
|
|
6,122
|
|
|
|
(303
|
)
|
|
|
5,819
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(14,112
|
)
|
|
|
(4,039
|
)
|
|
|
(18,151
|
)
|
Proceeds from issuance of common stock and warrants, net
|
|
|
4
|
|
|
|
37
|
|
|
|
15
|
|
|
|
50
|
|
|
|
18,567
|
|
|
|
53
|
|
|
|
18,620
|
|
Increase in restricted cash
|
|
|
-
|
|
|
|
-
|
|
|
|
3,050
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Investment in Clearwire (including debt securities)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(228
|
)
|
|
|
(228
|
)
|
Other financing activities, net
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
(14
|
)
|
Net (Decrease) Increase in Cash, Cash Equivalents and
Short-Term Investments
|
|
$
|
(1,593
|
)
|
|
$
|
(191
|
)
|
|
$
|
(25
|
)
|
|
$
|
(2,481
|
)
|
|
$
|
6,365
|
|
|
$
|
(4,616
|
)
|
|
$
|
1,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(Millions)
|
|
|
|
Successor
|
|
|
|
12/31/14
|
|
3/31/14
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
3,455
|
|
|
$
|
4,970
|
|
Short-term investments
|
|
|
|
254
|
|
|
|
1,220
|
|
Accounts and notes receivable, net
|
|
|
|
4,362
|
|
|
|
3,607
|
|
Device and accessory inventory
|
|
|
|
1,513
|
|
|
|
982
|
|
Deferred tax assets
|
|
|
|
101
|
|
|
|
128
|
|
Prepaid expenses and other current assets
|
|
|
|
773
|
|
|
|
672
|
|
Total current assets
|
|
|
|
10,458
|
|
|
|
11,579
|
|
|
|
|
|
|
|
Investments and other assets
|
|
|
|
1,154
|
|
|
|
892
|
|
Property, plant and equipment, net
|
|
|
|
18,853
|
|
|
|
16,299
|
|
Goodwill
|
|
|
|
6,343
|
|
|
|
6,383
|
|
FCC licenses and other
|
|
|
|
39,942
|
|
|
|
41,978
|
|
Definite-lived intangible assets, net
|
|
|
|
6,288
|
|
|
|
7,558
|
|
Total
|
|
|
$
|
83,038
|
|
|
$
|
84,689
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
5,220
|
|
|
$
|
3,163
|
|
Accrued expenses and other current liabilities
|
|
|
|
5,722
|
|
|
|
5,544
|
|
Current portion of long-term debt, financing and capital lease
obligations
|
|
|
|
1,302
|
|
|
|
991
|
|
Total current liabilities
|
|
|
|
12,244
|
|
|
|
9,698
|
|
|
|
|
|
|
|
Long-term debt, financing and capital lease obligations
|
|
|
|
31,160
|
|
|
|
31,787
|
|
Deferred tax liabilities
|
|
|
|
13,681
|
|
|
|
14,207
|
|
Other liabilities
|
|
|
|
3,864
|
|
|
|
3,685
|
|
Total liabilities
|
|
|
|
60,949
|
|
|
|
59,377
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
Common shares
|
|
|
|
40
|
|
|
|
39
|
|
Paid-in capital
|
|
|
|
27,478
|
|
|
|
27,354
|
|
Accumulated deficit
|
|
|
|
(5,159
|
)
|
|
|
(2,038
|
)
|
Accumulated other comprehensive loss
|
|
|
|
(270
|
)
|
|
|
(43
|
)
|
Total stockholders' equity
|
|
|
|
22,089
|
|
|
|
25,312
|
|
Total
|
|
|
$
|
83,038
|
|
|
$
|
84,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT* (NON-GAAP) (Unaudited)
|
|
|
|
|
|
(Millions)
|
|
|
|
|
|
|
|
|
Successor
|
|
|
|
12/31/14
|
|
3/31/14
|
|
|
|
|
|
|
Total Debt
|
|
|
$
|
32,462
|
|
|
$
|
32,778
|
|
Less: Cash and cash equivalents
|
|
|
|
(3,455
|
)
|
|
|
(4,970
|
)
|
Less: Short-term investments
|
|
|
|
(254
|
)
|
|
|
(1,220
|
)
|
Net Debt*
|
|
|
$
|
28,753
|
|
|
$
|
26,588
|
|
SCHEDULE OF DEBT (Unaudited)
|
(Millions)
|
|
|
|
|
|
|
|
|
|
12/31/14
|
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)
|
|
|
4.080
|
%
|
|
|
12/15/2015
|
|
|
|
500
|
Export Development Canada Facility (Tranche 3)
|
|
|
3.995
|
%
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
14,080
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
288
|
Capital lease obligations and other
|
|
|
|
|
|
2015 - 2023
|
|
|
|
143
|
TOTAL PRINCIPAL
|
|
|
|
|
|
|
|
|
|
31,279
|
|
|
|
|
|
|
|
|
|
|
Net premiums
|
|
|
|
|
|
|
|
|
|
1,183
|
TOTAL DEBT
|
|
|
|
|
|
|
|
|
$
|
32,462
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
The Company had $2.8 billion of borrowing capacity available under our
unsecured revolving bank credit facility as of December 31, 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 December 31, 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 nine-month period ended
December 31, 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. Included in Sprint platform net
additions are tablets and connected devices, 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 Connection 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)
|
|
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.
|
|
|
|
(7)
|
|
Severance and exit costs are primarily associated with work force
reductions and exit costs associated with the Nextel platform and
access terminations and those related to exiting certain operations
of Clearwire.
|
|
|
|
(8)
|
|
For the third quarter of fiscal year 2014, litigation primarily
includes legal reserves and fees incurred in relation to various
pending legal suits and proceedings.
|
|
|
|
(9)
|
|
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.
|
|
|
|
(10)
|
|
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.
|
|
|
|
(11)
|
|
As a result of the U.S. Cellular asset acquisition, we recorded a
liability related to network shut-down costs 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.
|
|
|
|
(12)
|
|
Hurricane Sandy amounts for the quarter-to-date December 31, 2013
period represent insurance recoveries.
|
|
|
|
*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 nine-month periods ended December 31, 2014 and the nine-month
period ended December 31, 2013. 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 nine-month period ended December 31, 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.
ABPU is average billings per user and calculated by dividing
service revenue earned plus installment plans and lease billings by the
sum of the average number of connections during the period. We believe
that ABPU provides useful information to investors, analysts and our
management to evaluate average Sprint platform postpaid customer
billings as it approximates the expected cash collections, including
installment plans and lease billings, per 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 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 nearly 56 million connections as of December 31,
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.
i RootMetrics award ranking based on RootMetrics 2nd
half 2014 Metro RootScore Reports (July - December 2014) for mobile
performance as tested on best available plans and devices on 4 mobile
networks across all available network types. The RootMetrics award is
not an endorsement of Sprint. Your results may vary. See rootmetrics.com
for details.
ii Based on analysis by Sprint using syndicated independent
3rd party field drive test information supplied by Nielsen 2007 -2014 as
of Dec. 31, 2014. Historical drop call data based on top 50 most
populous markets (2007-2010) & top 100 most populous markets
(2011-2014). Quarter index values are based on market results reported
within each period; not all Markets are reported each quarter. For the
2013/2014 year-over-year improvement, Sprint created National values
using an average of reported Market-level drop call rates for the top
100 most populous Markets tested at the end of 2013 compared to the end
of 2014.
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