|
x
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Delaware
|
46-1170005
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
6200 Sprint Parkway, Overland Park, Kansas
|
66251
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
Sprint Corporation Common Stock
|
3,955,981,006
|
|
|
Item 1.
|
Financial Statements
(Unaudited)
|
|
Successor
|
||||||
|
September 30,
|
|
March 31,
|
||||
|
2014
|
|
2014
|
||||
|
(in millions, except share and per share data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,135
|
|
|
$
|
4,970
|
|
Short-term investments
|
1,167
|
|
|
1,220
|
|
||
Accounts and notes receivable, net of allowance for doubtful accounts and deferred interest of $303 and $197
|
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
|
|
||
Property, plant and equipment, net
|
17,557
|
|
|
16,299
|
|
||
Intangible assets
|
|
|
|
|
|||
Goodwill
|
6,343
|
|
|
6,383
|
|
||
FCC licenses and other
|
41,800
|
|
|
41,978
|
|
||
Definite-lived intangible assets, net
|
6,696
|
|
|
7,558
|
|
||
Other assets
|
1,044
|
|
|
892
|
|
||
Total assets
|
$
|
84,710
|
|
|
$
|
84,689
|
|
LIABILITIES AND STOCKHOLDERS' 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
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, voting, par value $0.01 per share, 9.0 billion authorized, 3.955 billion and 3.941 billion issued at September 30, 2014 and March 31, 2014
|
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 liabilities and stockholders' equity
|
$
|
84,710
|
|
|
$
|
84,689
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
||||||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
||||||||||||
|
(in millions, except per share amounts)
|
|||||||||||||||||||||||
Net operating revenues
|
$
|
8,488
|
|
|
$
|
7,749
|
|
|
$
|
17,277
|
|
|
$
|
7,749
|
|
|
|
$
|
932
|
|
|
$
|
9,809
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services and products (exclusive of depreciation and amortization included below)
|
4,801
|
|
|
4,342
|
|
|
9,479
|
|
|
4,342
|
|
|
|
567
|
|
|
5,612
|
|
||||||
Selling, general and administrative
|
2,301
|
|
|
2,259
|
|
|
4,585
|
|
|
2,281
|
|
|
|
289
|
|
|
2,731
|
|
||||||
Severance and exit costs
|
284
|
|
|
103
|
|
|
311
|
|
|
103
|
|
|
|
(5
|
)
|
|
627
|
|
||||||
Depreciation
|
898
|
|
|
942
|
|
|
1,766
|
|
|
942
|
|
|
|
113
|
|
|
1,676
|
|
||||||
Amortization
|
396
|
|
|
461
|
|
|
809
|
|
|
461
|
|
|
|
8
|
|
|
77
|
|
||||||
|
8,680
|
|
|
8,107
|
|
|
16,950
|
|
|
8,129
|
|
|
|
972
|
|
|
10,723
|
|
||||||
Operating (loss) income
|
(192
|
)
|
|
(358
|
)
|
|
327
|
|
|
(380
|
)
|
|
|
(40
|
)
|
|
(914
|
)
|
||||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
(510
|
)
|
|
(416
|
)
|
|
(1,022
|
)
|
|
(416
|
)
|
|
|
(275
|
)
|
|
(703
|
)
|
||||||
Equity in losses of unconsolidated investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(23
|
)
|
|
(280
|
)
|
||||||
Gain on previously-held equity interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2,926
|
|
|
2,926
|
|
||||||
Other income, net
|
8
|
|
|
165
|
|
|
9
|
|
|
12
|
|
|
|
2
|
|
|
19
|
|
||||||
|
(502
|
)
|
|
(251
|
)
|
|
(1,013
|
)
|
|
(404
|
)
|
|
|
2,630
|
|
|
1,962
|
|
||||||
(Loss) income before income taxes
|
(694
|
)
|
|
(609
|
)
|
|
(686
|
)
|
|
(784
|
)
|
|
|
2,590
|
|
|
1,048
|
|
||||||
Income tax expense
|
(71
|
)
|
|
(90
|
)
|
|
(56
|
)
|
|
(29
|
)
|
|
|
(1,508
|
)
|
|
(1,563
|
)
|
||||||
Net (loss) income
|
$
|
(765
|
)
|
|
$
|
(699
|
)
|
|
$
|
(742
|
)
|
|
$
|
(813
|
)
|
|
|
$
|
1,082
|
|
|
$
|
(515
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic net (loss) income per common share
|
$
|
(0.19
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.24
|
)
|
|
|
$
|
0.35
|
|
|
$
|
(0.17
|
)
|
Diluted net (loss) income per common share
|
$
|
(0.19
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.24
|
)
|
|
|
$
|
0.30
|
|
|
$
|
(0.17
|
)
|
Basic weighted average common shares outstanding
|
3,949
|
|
|
3,802
|
|
|
3,947
|
|
|
3,439
|
|
|
|
3,086
|
|
|
3,038
|
|
||||||
Diluted weighted average common shares outstanding
|
3,949
|
|
|
3,802
|
|
|
3,947
|
|
|
3,439
|
|
|
|
3,640
|
|
|
3,038
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net unrealized holding (losses) gains on securities and other
|
$
|
(6
|
)
|
|
$
|
4
|
|
|
$
|
(6
|
)
|
|
$
|
100
|
|
|
|
$
|
(47
|
)
|
|
$
|
(11
|
)
|
Net unrecognized net periodic pension and other postretirement benefits
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
|
5
|
|
|
20
|
|
||||||
Other comprehensive (loss) income
|
(7
|
)
|
|
4
|
|
|
(7
|
)
|
|
100
|
|
|
|
(42
|
)
|
|
9
|
|
||||||
Comprehensive (loss) income
|
$
|
(772
|
)
|
|
$
|
(695
|
)
|
|
$
|
(749
|
)
|
|
$
|
(713
|
)
|
|
|
$
|
1,040
|
|
|
$
|
(506
|
)
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Six Months Ended
|
|
|
101 Days Ended
|
||||||||
|
September 30,
|
|
|
July 10,
|
||||||||
|
2014
|
|
2013
|
|
|
2013
|
||||||
|
(in millions)
|
|||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net loss
|
$
|
(742
|
)
|
|
$
|
(813
|
)
|
|
|
$
|
(515
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
2,575
|
|
|
1,403
|
|
|
|
1,753
|
|
|||
Provision for losses on accounts receivable
|
493
|
|
|
119
|
|
|
|
111
|
|
|||
Share-based and long-term incentive compensation expense
|
65
|
|
|
58
|
|
|
|
20
|
|
|||
Deferred income tax expense
|
28
|
|
|
23
|
|
|
|
1,562
|
|
|||
Equity in losses of unconsolidated investments, net
|
—
|
|
|
—
|
|
|
|
280
|
|
|||
Gain on previously-held equity interests
|
—
|
|
|
—
|
|
|
|
(2,926
|
)
|
|||
Interest expense related to beneficial conversion feature on convertible bond
|
—
|
|
|
—
|
|
|
|
247
|
|
|||
Contribution to pension plan
|
(22
|
)
|
|
—
|
|
|
|
—
|
|
|||
Amortization and accretion of long-term debt premiums and discounts
|
(149
|
)
|
|
(86
|
)
|
|
|
(5
|
)
|
|||
Other changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts and notes receivable
|
(828
|
)
|
|
(54
|
)
|
|
|
(65
|
)
|
|||
Inventories and other current assets
|
(155
|
)
|
|
(72
|
)
|
|
|
55
|
|
|||
Accounts payable and other current liabilities
|
503
|
|
|
159
|
|
|
|
1,014
|
|
|||
Non-current assets and liabilities, net
|
(124
|
)
|
|
(153
|
)
|
|
|
191
|
|
|||
Other, net
|
63
|
|
|
118
|
|
|
|
9
|
|
|||
Net cash provided by operating activities
|
1,707
|
|
|
702
|
|
|
|
1,731
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
(2,389
|
)
|
|
(1,878
|
)
|
|
|
(1,759
|
)
|
|||
Expenditures relating to FCC licenses
|
(79
|
)
|
|
(31
|
)
|
|
|
(70
|
)
|
|||
Reimbursements relating to FCC licenses
|
95
|
|
|
—
|
|
|
|
—
|
|
|||
Acquisitions, net of cash acquired
|
—
|
|
|
(14,112
|
)
|
|
|
(4,039
|
)
|
|||
Investment in Clearwire (including debt securities)
|
—
|
|
|
—
|
|
|
|
(228
|
)
|
|||
Proceeds from sales and maturities of short-term investments
|
1,842
|
|
|
479
|
|
|
|
1,164
|
|
|||
Purchases of short-term investments
|
(1,789
|
)
|
|
(815
|
)
|
|
|
(295
|
)
|
|||
Increase in restricted cash
|
—
|
|
|
(3,050
|
)
|
|
|
—
|
|
|||
Proceeds from sales of assets and FCC licenses
|
101
|
|
|
3
|
|
|
|
4
|
|
|||
Other, net
|
(6
|
)
|
|
(3
|
)
|
|
|
(4
|
)
|
|||
Net cash used in investing activities
|
(2,225
|
)
|
|
(19,407
|
)
|
|
|
(5,227
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from debt and financings
|
—
|
|
|
6,826
|
|
|
|
—
|
|
|||
Repayments of debt, financing and capital lease obligations
|
(363
|
)
|
|
(497
|
)
|
|
|
(303
|
)
|
|||
Debt financing costs
|
—
|
|
|
(107
|
)
|
|
|
(1
|
)
|
|||
Proceeds from issuance of common stock and warrants, net
|
46
|
|
|
18,552
|
|
|
|
53
|
|
|||
Other, net
|
—
|
|
|
(14
|
)
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(317
|
)
|
|
24,760
|
|
|
|
(251
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(835
|
)
|
|
6,055
|
|
|
|
(3,747
|
)
|
|||
Cash and cash equivalents, beginning of period
|
4,970
|
|
|
3
|
|
|
|
6,275
|
|
|||
Cash and cash equivalents, end of period
|
$
|
4,135
|
|
|
$
|
6,058
|
|
|
|
$
|
2,528
|
|
|
Successor
|
|||||||||||||||||||||
|
Common Stock
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||
Balance, March 31, 2014
|
3,941
|
|
|
$
|
39
|
|
|
$
|
27,354
|
|
|
$
|
(2,038
|
)
|
|
$
|
(43
|
)
|
|
$
|
25,312
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(742
|
)
|
|
—
|
|
|
(742
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||
Issuance of common stock, net
|
14
|
|
|
1
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||
Balance, September 30, 2014
|
3,955
|
|
|
$
|
40
|
|
|
$
|
27,453
|
|
|
$
|
(2,780
|
)
|
|
$
|
(50
|
)
|
|
$
|
24,663
|
|
|
|
Page
Reference
|
1.
|
||
|
|
|
2.
|
||
|
|
|
3.
|
||
|
|
|
4.
|
||
|
|
|
5.
|
||
|
|
|
6.
|
||
|
|
|
7.
|
||
|
|
|
8.
|
||
|
|
|
9.
|
||
|
|
|
10.
|
||
|
|
|
11.
|
||
|
|
|
12.
|
||
|
|
|
13.
|
||
|
|
|
14.
|
||
|
|
|
15.
|
||
|
|
|
16.
|
||
|
|
|
17.
|
||
|
|
|
Note 1.
|
Basis of Presentation
|
Note 2.
|
New Accounting Pronouncements
|
Note 3.
|
Significant Transactions
|
Purchase Price Allocation
(in millions)
:
|
|||
Current assets
|
$
|
8,576
|
|
Investments
|
133
|
|
|
Property, plant and equipment
|
14,558
|
|
|
Identifiable intangibles
|
50,672
|
|
|
Goodwill
|
6,343
|
|
|
Other assets
|
244
|
|
|
Current liabilities
|
(10,623
|
)
|
|
Long-term debt
|
(29,481
|
)
|
|
Deferred tax liabilities
|
(14,256
|
)
|
|
Other liabilities
|
(3,989
|
)
|
|
Net assets acquired, prior to conversion of the Bond
|
22,177
|
|
|
Conversion of Bond
|
3,100
|
|
|
Net assets acquired, after conversion of the Bond
|
$
|
25,277
|
|
Note 4.
|
Installment Receivables
|
|
Successor
|
||||||
|
September 30,
2014 |
|
March 31,
2014 |
||||
|
(in millions)
|
||||||
Installment receivables, gross
|
$
|
1,494
|
|
|
$
|
740
|
|
Deferred interest
|
(133
|
)
|
|
(77
|
)
|
||
Installment receivables, net of deferred interest
|
1,361
|
|
|
663
|
|
||
Allowance for credit losses
|
(141
|
)
|
|
(47
|
)
|
||
Installment receivables, net
|
$
|
1,220
|
|
|
$
|
616
|
|
|
|
|
|
||||
Classified on the consolidated balance sheets as:
|
|
|
|
||||
Accounts and notes receivable, net
|
$
|
818
|
|
|
$
|
299
|
|
Other assets
|
402
|
|
|
317
|
|
||
Installment receivables, net
|
$
|
1,220
|
|
|
$
|
616
|
|
|
Successor
|
||||||||||||||||||||||
|
September 30, 2014
|
|
March 31, 2014
|
||||||||||||||||||||
|
Prime
|
|
Subprime
|
|
Total
|
|
Prime
|
|
Subprime
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Unbilled
|
$
|
1,003
|
|
|
$
|
384
|
|
|
$
|
1,387
|
|
|
$
|
466
|
|
|
$
|
242
|
|
|
$
|
708
|
|
Billed - current
|
45
|
|
|
22
|
|
|
67
|
|
|
16
|
|
|
9
|
|
|
25
|
|
||||||
Billed - past due
|
17
|
|
|
23
|
|
|
40
|
|
|
5
|
|
|
2
|
|
|
7
|
|
||||||
Installment receivables, gross
|
$
|
1,065
|
|
|
$
|
429
|
|
|
$
|
1,494
|
|
|
$
|
487
|
|
|
$
|
253
|
|
|
$
|
740
|
|
|
Successor
|
||||||
|
Six Months Ended
September 30, |
|
Three Months Ended
March 31, |
||||
|
2014
|
|
2014
|
||||
|
(in millions)
|
||||||
Deferred interest and allowance for credit losses, beginning of period
|
$
|
124
|
|
|
$
|
13
|
|
Bad debt expense
|
188
|
|
|
44
|
|
||
Write-offs, net of recoveries
|
(94
|
)
|
|
—
|
|
||
Change in deferred interest on short-term and long-term installment receivables
|
56
|
|
|
67
|
|
||
Deferred interest and allowance for credit losses, end of period
|
$
|
274
|
|
|
$
|
124
|
|
Note 5.
|
Financial Instruments
|
|
Successor
|
||||||||||||||||||
|
Carrying amount at September 30, 2014
|
|
Estimated Fair Value Using Input Type
|
||||||||||||||||
|
|
Quoted prices in active markets
|
|
Observable
|
|
Unobservable
|
|
Total estimated fair value
|
|||||||||||
|
(in millions)
|
||||||||||||||||||
Current and long-term debt
|
$
|
31,816
|
|
|
$
|
26,595
|
|
|
$
|
4,954
|
|
|
$
|
1,135
|
|
|
$
|
32,684
|
|
|
Successor
|
||||||||||||||||||
|
Carrying amount at March 31, 2014
|
|
Estimated Fair Value Using Input Type
|
||||||||||||||||
|
|
Quoted prices in active markets
|
|
Observable
|
|
Unobservable
|
|
Total estimated fair value
|
|||||||||||
|
(in millions)
|
||||||||||||||||||
Current and long-term debt
|
$
|
32,277
|
|
|
$
|
27,516
|
|
|
$
|
5,421
|
|
|
$
|
1,262
|
|
|
$
|
34,199
|
|
Note 6.
|
Property, Plant and Equipment
|
|
Successor
|
||||||
|
September 30,
2014 |
|
March 31,
2014 |
||||
|
(in millions)
|
||||||
Land
|
$
|
265
|
|
|
$
|
265
|
|
Network equipment, site costs and related software
|
16,810
|
|
|
14,902
|
|
||
Buildings and improvements
|
752
|
|
|
745
|
|
||
Non-network internal use software, office equipment and other
|
1,084
|
|
|
866
|
|
||
Construction in progress
|
2,598
|
|
|
1,970
|
|
||
Less: accumulated depreciation
|
(3,952
|
)
|
|
(2,449
|
)
|
||
Property, plant and equipment, net
|
$
|
17,557
|
|
|
$
|
16,299
|
|
Note 7.
|
Intangible Assets
|
|
Successor
|
|||||||||||
|
March 31,
2014 |
|
Net
Reductions
|
|
September 30,
2014 |
|||||||
|
(in millions)
|
|||||||||||
FCC licenses
|
$
|
36,043
|
|
|
$
|
(178
|
)
|
|
$
|
35,865
|
|
|
Trademarks
|
5,935
|
|
|
—
|
|
|
5,935
|
|
||||
Goodwill
|
6,383
|
|
|
(40
|
)
|
(1
|
)
|
6,343
|
|
|||
|
$
|
48,361
|
|
|
$
|
(218
|
)
|
|
$
|
48,143
|
|
(1)
|
Net reduction to goodwill for the Successor six-month period ended
September 30, 2014
of approximately
$40 million
was the result of purchase price allocation adjustments, which consisted of a
$44 million
decrease associated with the SoftBank Merger and a
$4 million
increase associated with the Clearwire Acquisition.
|
|
|
|
Successor
|
||||||||||||||||||||||
|
|
|
September 30, 2014
|
|
March 31, 2014
|
||||||||||||||||||||
|
Useful Lives
|
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
Customer relationships
|
4 to 8 years
|
|
$
|
6,923
|
|
|
$
|
(2,071
|
)
|
|
$
|
4,852
|
|
|
$
|
6,923
|
|
|
$
|
(1,289
|
)
|
|
$
|
5,634
|
|
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Favorable spectrum leases
|
23 years
|
|
884
|
|
|
(51
|
)
|
|
833
|
|
|
884
|
|
|
(30
|
)
|
|
854
|
|
||||||
Favorable tower leases
|
3 to 7 years
|
|
589
|
|
|
(134
|
)
|
|
455
|
|
|
589
|
|
|
(80
|
)
|
|
509
|
|
||||||
Trademarks
|
34 years
|
|
520
|
|
|
(19
|
)
|
|
501
|
|
|
520
|
|
|
(12
|
)
|
|
508
|
|
||||||
Other
|
4 to 10 years
|
|
67
|
|
|
(12
|
)
|
|
55
|
|
|
60
|
|
|
(7
|
)
|
|
53
|
|
||||||
Total other intangible assets
|
|
2,060
|
|
|
(216
|
)
|
|
1,844
|
|
|
2,053
|
|
|
(129
|
)
|
|
1,924
|
|
|||||||
Total definite-lived intangible assets
|
|
$
|
8,983
|
|
|
$
|
(2,287
|
)
|
|
$
|
6,696
|
|
|
$
|
8,976
|
|
|
$
|
(1,418
|
)
|
|
$
|
7,558
|
|
Note 8.
|
Accounts Payable
|
Note 9.
|
Long-Term Debt, Financing and Capital Lease Obligations
|
|
|
|
|
|
|
|
|
|
Successor
|
||||||
|
Interest Rates
|
|
Maturities
|
|
September 30,
2014 |
|
March 31,
2014 |
||||||||
|
|
|
|
|
|
|
|
|
(in millions)
|
||||||
Notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Senior notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Corporation
|
7.13
|
-
|
7.88%
|
|
2021
|
-
|
2024
|
|
$
|
9,000
|
|
|
$
|
9,000
|
|
Sprint Communications, Inc.
|
6.00
|
-
|
11.50%
|
|
2016
|
-
|
2022
|
|
9,280
|
|
|
9,280
|
|
||
Sprint Capital Corporation
|
6.88
|
-
|
8.75%
|
|
2019
|
-
|
2032
|
|
6,204
|
|
|
6,204
|
|
||
Guaranteed notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Communications, Inc.
|
7.00
|
-
|
9.00%
|
|
2018
|
-
|
2020
|
|
4,000
|
|
|
4,000
|
|
||
Secured notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
iPCS, Inc.
|
3.49%
|
|
2014
|
|
—
|
|
|
181
|
|
||||||
Clearwire Communications LLC
(1)
|
14.75%
|
|
2016
|
|
300
|
|
|
300
|
|
||||||
Exchangeable notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Clearwire Communications LLC
(1)
|
8.25%
|
|
2040
|
|
629
|
|
|
629
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bank credit facility
|
2.75%
|
|
2018
|
|
—
|
|
|
—
|
|
||||||
Export Development Canada
|
3.58%
|
|
2015
|
|
500
|
|
|
500
|
|
||||||
Secured equipment credit facility
|
2.03%
|
|
2017
|
|
635
|
|
|
762
|
|
||||||
Financing obligation
|
6.09%
|
|
2021
|
|
301
|
|
|
327
|
|
||||||
Capital lease obligations and other
|
2.35
|
-
|
10.52%
|
|
2015
|
-
|
2023
|
|
158
|
|
|
187
|
|
||
Net premiums
|
|
|
|
|
|
|
|
|
1,259
|
|
|
1,408
|
|
||
|
|
|
|
|
|
|
|
|
32,266
|
|
|
32,778
|
|
||
Less current portion
|
|
|
|
|
|
|
|
|
(808
|
)
|
|
(991
|
)
|
||
Long-term debt, financing and capital lease obligations
|
|
|
|
|
|
|
|
|
$
|
31,458
|
|
|
$
|
31,787
|
|
(1)
|
Notes of Clearwire Communications LLC are also direct obligations of Clearwire Finance, Inc. and are guaranteed by certain Clearwire subsidiaries.
|
Note 10.
|
Severance and Exit Costs
|
|
Successor
|
||||||||||||||
|
March 31,
2014 |
|
Net
Expense
|
|
Cash Payments
and Other
|
|
September 30,
2014 |
||||||||
|
(in millions)
|
||||||||||||||
Lease exit costs
|
$
|
650
|
|
|
$
|
13
|
|
(1)
|
$
|
(220
|
)
|
|
$
|
443
|
|
Severance costs
|
197
|
|
|
269
|
|
(2)
|
(177
|
)
|
|
289
|
|
||||
Access exit costs
|
124
|
|
|
29
|
|
(3)
|
(60
|
)
|
|
93
|
|
||||
|
$
|
971
|
|
|
$
|
311
|
|
|
$
|
(457
|
)
|
|
$
|
825
|
|
(1)
|
For the Successor
three and six-month periods ended
September 30, 2014
, we recognized costs of
$10 million
and
$13 million
( Wireless only).
|
(2)
|
For the Successor
three and six-month periods ended
September 30, 2014
, we recognized costs of
$263 million
(
$228 million
Wireless,
$35 million
Wireline) and
$269 million
(
$233 million
Wireless,
$36 million
Wireline), respectively.
|
(3)
|
For the Successor
three and six-month periods ended
September 30, 2014
, we recognized costs of
$11 million
(
$9 million
Wireless,
$2 million
Wireline) and
$29 million
(
$24 million
Wireless,
$5 million
Wireline), respectively.
|
Note 11.
|
Income Taxes
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Six Months Ended
September 30, |
|
|
101 Days Ended
July 10, |
||||||||
|
2014
|
|
2013
|
|
|
2013
|
||||||
|
(in millions)
|
|||||||||||
Income tax benefit (expense) at the federal statutory rate
|
$
|
240
|
|
|
$
|
274
|
|
|
|
$
|
(367
|
)
|
Effect of:
|
|
|
|
|
|
|
||||||
State income taxes, net of federal income tax effect
|
—
|
|
|
35
|
|
|
|
(31
|
)
|
|||
Change in federal and state valuation allowance
|
(297
|
)
|
|
(327
|
)
|
|
|
(1,145
|
)
|
|||
Other, net
|
1
|
|
|
(11
|
)
|
|
|
(20
|
)
|
|||
Income tax expense
|
$
|
(56
|
)
|
|
$
|
(29
|
)
|
|
|
$
|
(1,563
|
)
|
Effective income tax rate
|
(8.2
|
)%
|
|
(3.7
|
)%
|
|
|
149.1
|
%
|
Note 12.
|
Commitments and Contingencies
|
Note 13.
|
Per Share Data
|
Note 14.
|
Segments
|
•
|
Wireless primarily includes retail, wholesale, and affiliate revenue from a wide array of wireless voice and data transmission services and equipment revenue from the sale of wireless devices (handsets and tablets) and accessories in the U.S., Puerto Rico and the U.S. Virgin Islands.
|
•
|
Wireline primarily includes revenue from domestic and international wireline voice and data communication services provided to other communications companies and targeted business and consumer subscribers, in addition to our Wireless segment.
|
Successor
|
|||||||||||||||
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended September 30, 2014
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
7,929
|
|
|
$
|
555
|
|
|
$
|
4
|
|
|
$
|
8,488
|
|
Inter-segment revenues
(1)
|
—
|
|
|
153
|
|
|
(153
|
)
|
|
—
|
|
||||
Total segment operating expenses
|
(6,559
|
)
|
|
(681
|
)
|
|
138
|
|
|
(7,102
|
)
|
||||
Segment earnings
|
$
|
1,370
|
|
|
$
|
27
|
|
|
$
|
(11
|
)
|
|
1,386
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
(898
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(396
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
(284
|
)
|
|||||||
Operating loss
|
|
|
|
|
|
|
(192
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
(510
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
8
|
|
|||||||
Loss before income taxes
|
|
|
|
|
|
|
$
|
(694
|
)
|
||||||
|
|
|
|
|
|
|
|
||||||||
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended September 30, 2013
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
7,159
|
|
|
$
|
586
|
|
|
$
|
4
|
|
|
$
|
7,749
|
|
Inter-segment revenues
(1)
|
—
|
|
|
191
|
|
|
(191
|
)
|
|
—
|
|
||||
Total segment operating expenses
|
(6,034
|
)
|
|
(660
|
)
|
|
193
|
|
|
(6,501
|
)
|
||||
Segment earnings
|
$
|
1,125
|
|
|
$
|
117
|
|
|
$
|
6
|
|
|
1,248
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
(942
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(461
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
(203
|
)
|
|||||||
Operating loss
|
|
|
|
|
|
|
(358
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
(416
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
165
|
|
|||||||
Loss before income taxes
|
|
|
|
|
|
|
$
|
(609
|
)
|
||||||
|
|
|
|
|
|
|
|
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Six Months Ended September 30, 2014
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
16,122
|
|
|
$
|
1,148
|
|
|
$
|
7
|
|
|
$
|
17,277
|
|
Inter-segment revenues
(1)
|
—
|
|
|
306
|
|
|
(306
|
)
|
|
—
|
|
||||
Total segment operating expenses
|
(12,959
|
)
|
|
(1,392
|
)
|
|
287
|
|
|
(14,064
|
)
|
||||
Segment earnings
|
$
|
3,163
|
|
|
$
|
62
|
|
|
$
|
(12
|
)
|
|
3,213
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
(1,766
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(809
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
(311
|
)
|
|||||||
Operating income
|
|
|
|
|
|
|
327
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
(1,022
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
9
|
|
|||||||
Loss before income taxes
|
|
|
|
|
|
|
$
|
(686
|
)
|
||||||
|
|
|
|
|
|
|
|
||||||||
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Six Months Ended September 30, 2013
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
7,159
|
|
|
$
|
586
|
|
|
$
|
4
|
|
|
$
|
7,749
|
|
Inter-segment revenues
(1)
|
—
|
|
|
191
|
|
|
(191
|
)
|
|
—
|
|
||||
Total segment operating expenses
|
(6,034
|
)
|
|
(660
|
)
|
|
171
|
|
|
(6,523
|
)
|
||||
Segment earnings
|
$
|
1,125
|
|
|
$
|
117
|
|
|
$
|
(16
|
)
|
|
1,226
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
(942
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(461
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
(203
|
)
|
|||||||
Operating loss
|
|
|
|
|
|
|
(380
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
(416
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
12
|
|
|||||||
Loss before income taxes
|
|
|
|
|
|
|
$
|
(784
|
)
|
||||||
|
|
|
|
|
|
|
|
||||||||
Other Information
|
Wireless
|
|
Wireline
|
|
Corporate and
Other
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Capital expenditures for the six months ended September 30, 2014
|
$
|
2,109
|
|
|
$
|
124
|
|
|
$
|
156
|
|
|
$
|
2,389
|
|
Capital expenditures for the six months ended September 30, 2013
|
$
|
1,743
|
|
|
$
|
73
|
|
|
$
|
62
|
|
|
$
|
1,878
|
|
Predecessor
|
|||||||||||||||
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
10 Days Ended July 10, 2013
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
858
|
|
|
$
|
74
|
|
|
$
|
—
|
|
|
$
|
932
|
|
Inter-segment revenues
(1)
|
—
|
|
|
24
|
|
|
(24
|
)
|
|
—
|
|
||||
Total segment operating expenses
|
(777
|
)
|
|
(83
|
)
|
|
23
|
|
|
(837
|
)
|
||||
Segment earnings
|
$
|
81
|
|
|
$
|
15
|
|
|
$
|
(1
|
)
|
|
95
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
(113
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(8
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
(14
|
)
|
|||||||
Operating loss
|
|
|
|
|
|
|
(40
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
(275
|
)
|
|||||||
Equity in losses of unconsolidated investments
|
|
|
|
|
$
|
(23
|
)
|
|
|
||||||
Gain on previously-held equity interests
|
|
|
|
|
2,926
|
|
|
2,903
|
|
||||||
Other income, net
|
|
|
|
|
|
|
2
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
2,590
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
101 Days Ended July 10, 2013
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
9,036
|
|
|
$
|
769
|
|
|
$
|
4
|
|
|
$
|
9,809
|
|
Inter-segment revenues
(1)
|
—
|
|
|
239
|
|
|
(239
|
)
|
|
—
|
|
||||
Total segment operating expenses
|
(7,661
|
)
|
|
(864
|
)
|
|
235
|
|
|
(8,290
|
)
|
||||
Segment earnings
|
$
|
1,375
|
|
|
$
|
144
|
|
|
$
|
—
|
|
|
1,519
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
(1,676
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(77
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
(680
|
)
|
|||||||
Operating loss
|
|
|
|
|
|
|
(914
|
)
|
|||||||
Interest expense
|
|
|
|
|
|
|
(703
|
)
|
|||||||
Equity in losses of unconsolidated investments
|
|
|
|
|
$
|
(280
|
)
|
|
|
||||||
Gain on previously-held equity interests
|
|
|
|
|
2,926
|
|
|
2,646
|
|
||||||
Other income, net
|
|
|
|
|
|
|
19
|
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
1,048
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Other Information
|
Wireless
|
|
Wireline
|
|
Corporate and
Other
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Capital expenditures for the 101 days ended July 10, 2013
|
$
|
1,570
|
|
|
$
|
110
|
|
|
$
|
79
|
|
|
$
|
1,759
|
|
(1)
|
Inter-segment revenues consist primarily of wireline services provided to the Wireless segment for resale to, or use by, wireless subscribers.
|
(2)
|
Other, net for the Successor
three and six-month periods ended
September 30, 2014
consists of
$284 million
and
$311 million
, respectively, of severance and exit costs. Other, net for both the Successor
three and six-month periods ended
September 30, 2013
consists of
$103 million
of severance and exit costs and
$100 million
of business combination fees paid to unrelated parties necessary for the transactions with SoftBank and Clearwire (included in our corporate segment and classified in our consolidated statements of comprehensive income (loss) as selling, general and administrative expenses). Other, net for the 101-day period ended July 10, 2013 consists of severance and exit costs of
$627 million
and
$53 million
of business combination fees paid to unrelated parties in connection with the transactions with SoftBank and Clearwire (included in our corporate segment and classified in our consolidated statements of comprehensive income (loss) as selling, general and administrative expenses). Other, net for the 10-day period ended July 10, 2013 consists of
$32 million
of severance costs primarily associated with the Clearwire Acquisition and
$19 million
of business combination fees paid to unrelated parties in connection with the transactions with SoftBank and Clearwire, partially offset by
$37 million
related to changes in estimates for lease exit costs previously recognized.
|
Successor
|
|||||||||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended September 30, 2014
|
|
|
|
|
|
|
|
||||||||
Wireless services
|
$
|
6,693
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,693
|
|
Wireless equipment
|
1,039
|
|
|
—
|
|
|
—
|
|
|
1,039
|
|
||||
Voice
|
—
|
|
|
294
|
|
|
(86
|
)
|
|
208
|
|
||||
Data
|
—
|
|
|
53
|
|
|
(22
|
)
|
|
31
|
|
||||
Internet
|
—
|
|
|
340
|
|
|
(41
|
)
|
|
299
|
|
||||
Other
|
197
|
|
|
21
|
|
|
—
|
|
|
218
|
|
||||
Total net operating revenues
|
$
|
7,929
|
|
|
$
|
708
|
|
|
$
|
(149
|
)
|
|
$
|
8,488
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended September 30, 2013
|
|
|
|
|
|
|
|
||||||||
Wireless services
|
$
|
6,399
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,399
|
|
Wireless equipment
|
636
|
|
|
—
|
|
|
—
|
|
|
636
|
|
||||
Voice
|
—
|
|
|
333
|
|
|
(120
|
)
|
|
213
|
|
||||
Data
|
—
|
|
|
57
|
|
|
(23
|
)
|
|
34
|
|
||||
Internet
|
—
|
|
|
373
|
|
|
(46
|
)
|
|
327
|
|
||||
Other
|
124
|
|
|
14
|
|
|
2
|
|
|
140
|
|
||||
Total net operating revenues
|
$
|
7,159
|
|
|
$
|
777
|
|
|
$
|
(187
|
)
|
|
$
|
7,749
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Six Months Ended September 30, 2014
|
|
|
|
|
|
|
|
||||||||
Wireless services
|
$
|
13,601
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,601
|
|
Wireless equipment
|
2,145
|
|
|
—
|
|
|
—
|
|
|
2,145
|
|
||||
Voice
|
—
|
|
|
621
|
|
|
(177
|
)
|
|
444
|
|
||||
Data
|
—
|
|
|
109
|
|
|
(46
|
)
|
|
63
|
|
||||
Internet
|
—
|
|
|
685
|
|
|
(79
|
)
|
|
606
|
|
||||
Other
|
376
|
|
|
39
|
|
|
3
|
|
|
418
|
|
||||
Total net operating revenues
|
$
|
16,122
|
|
|
$
|
1,454
|
|
|
$
|
(299
|
)
|
|
$
|
17,277
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Six Months Ended September 30, 2013
|
|
|
|
|
|
|
|
||||||||
Wireless services
|
$
|
6,399
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,399
|
|
Wireless equipment
|
636
|
|
|
—
|
|
|
—
|
|
|
636
|
|
||||
Voice
|
—
|
|
|
333
|
|
|
(120
|
)
|
|
213
|
|
||||
Data
|
—
|
|
|
57
|
|
|
(23
|
)
|
|
34
|
|
||||
Internet
|
—
|
|
|
373
|
|
|
(46
|
)
|
|
327
|
|
||||
Other
|
124
|
|
|
14
|
|
|
2
|
|
|
140
|
|
||||
Total net operating revenues
|
$
|
7,159
|
|
|
$
|
777
|
|
|
$
|
(187
|
)
|
|
$
|
7,749
|
|
|
|
|
|
|
|
|
|
Predecessor
|
|||||||||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
10 Days Ended July 10, 2013
|
|
|
|
|
|
|
|
||||||||
Wireless services
|
$
|
769
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
769
|
|
Wireless equipment
|
74
|
|
|
—
|
|
|
—
|
|
|
74
|
|
||||
Voice
|
—
|
|
|
42
|
|
|
(15
|
)
|
|
27
|
|
||||
Data
|
—
|
|
|
7
|
|
|
(3
|
)
|
|
4
|
|
||||
Internet
|
—
|
|
|
47
|
|
|
(5
|
)
|
|
42
|
|
||||
Other
|
15
|
|
|
2
|
|
|
(1
|
)
|
|
16
|
|
||||
Total net operating revenues
|
$
|
858
|
|
|
$
|
98
|
|
|
$
|
(24
|
)
|
|
$
|
932
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
101 Days Ended July 10, 2013
|
|
|
|
|
|
|
|
||||||||
Wireless services
|
$
|
7,996
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,996
|
|
Wireless equipment
|
894
|
|
|
—
|
|
|
—
|
|
|
894
|
|
||||
Voice
|
—
|
|
|
419
|
|
|
(137
|
)
|
|
282
|
|
||||
Data
|
—
|
|
|
94
|
|
|
(47
|
)
|
|
47
|
|
||||
Internet
|
—
|
|
|
479
|
|
|
(53
|
)
|
|
426
|
|
||||
Other
|
146
|
|
|
16
|
|
|
2
|
|
|
164
|
|
||||
Total net operating revenues
|
$
|
9,036
|
|
|
$
|
1,008
|
|
|
$
|
(235
|
)
|
|
$
|
9,809
|
|
|
|
|
|
|
|
|
|
(1)
|
Revenues eliminated in consolidation consist primarily of wireline services provided to the Wireless segment for resale to or use by wireless subscribers.
|
Note 15.
|
Related-Party Transactions
|
|
9 Days Ended July 9,
|
|
100 Days Ended July 9,
|
||||
|
2013
|
|
2013
|
||||
|
(in millions)
|
||||||
Revenues
|
$
|
31
|
|
|
$
|
348
|
|
Operating expenses
|
(62
|
)
|
|
(663
|
)
|
||
Operating loss
|
$
|
(31
|
)
|
|
$
|
(315
|
)
|
Net loss from continuing operations before non-controlling interests
|
$
|
(31
|
)
|
|
$
|
(447
|
)
|
Consolidated balance sheets:
|
Successor
|
||||||
|
September 30,
2014 |
|
March 31,
2014 |
||||
|
(in millions)
|
||||||
Accounts receivable
|
$
|
118
|
|
|
$
|
—
|
|
Accounts payable
|
$
|
7
|
|
|
$
|
—
|
|
Consolidated statements of comprehensive (loss) income:
|
Successor
(1)
|
||||||
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||
|
2014
|
|
2014
|
||||
|
(in millions)
|
||||||
Net operating revenues
|
$
|
102
|
|
|
$
|
119
|
|
Cost of services and products
|
$
|
78
|
|
|
$
|
94
|
|
(1)
|
Amounts for the all other reported periods were immaterial.
|
|
Successor
|
||||||
|
September 30,
2014 |
|
March 31,
2014 |
||||
|
(in millions)
|
||||||
Device and accessory inventory
|
$
|
704
|
|
|
$
|
266
|
|
Accounts payable
|
$
|
418
|
|
|
$
|
205
|
|
Note 16.
|
Guarantor Financial Information
|
Successor
|
|||||||||||||||||||
|
As of September 30, 2014
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
3,488
|
|
|
$
|
647
|
|
|
$
|
—
|
|
|
$
|
4,135
|
|
Short-term investments
|
—
|
|
|
1,132
|
|
|
35
|
|
|
—
|
|
|
1,167
|
|
|||||
Accounts and notes receivable, net
|
73
|
|
|
67
|
|
|
3,942
|
|
|
(140
|
)
|
|
3,942
|
|
|||||
Device and accessory inventory
|
—
|
|
|
—
|
|
|
1,124
|
|
|
—
|
|
|
1,124
|
|
|||||
Deferred tax assets
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
|||||
Prepaid expenses and other current assets
|
—
|
|
|
16
|
|
|
796
|
|
|
—
|
|
|
812
|
|
|||||
Total current assets
|
73
|
|
|
4,703
|
|
|
6,634
|
|
|
(140
|
)
|
|
11,270
|
|
|||||
Investments
|
—
|
|
|
1,114
|
|
|
58
|
|
|
(1,019
|
)
|
|
153
|
|
|||||
Investments in subsidiaries
|
24,665
|
|
|
24,983
|
|
|
—
|
|
|
(49,648
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
17,557
|
|
|
—
|
|
|
17,557
|
|
|||||
Due from consolidated affiliate
|
—
|
|
|
18,703
|
|
|
—
|
|
|
(18,703
|
)
|
|
—
|
|
|||||
Note receivable from consolidated affiliate
|
9,000
|
|
|
—
|
|
|
—
|
|
|
(9,000
|
)
|
|
—
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
—
|
|
|
6,343
|
|
|
—
|
|
|
6,343
|
|
|||||
FCC licenses and other
|
—
|
|
|
—
|
|
|
41,800
|
|
|
—
|
|
|
41,800
|
|
|||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
6,696
|
|
|
—
|
|
|
6,696
|
|
|||||
Other assets
|
126
|
|
|
126
|
|
|
765
|
|
|
(126
|
)
|
|
891
|
|
|||||
Total assets
|
$
|
33,864
|
|
|
$
|
49,629
|
|
|
$
|
79,853
|
|
|
$
|
(78,636
|
)
|
|
$
|
84,710
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,351
|
|
|
$
|
—
|
|
|
$
|
4,351
|
|
Accrued expenses and other current liabilities
|
75
|
|
|
482
|
|
|
5,022
|
|
|
(140
|
)
|
|
5,439
|
|
|||||
Current portion of long-term debt, financing and capital lease obligations
|
—
|
|
|
—
|
|
|
808
|
|
|
—
|
|
|
808
|
|
|||||
Total current liabilities
|
75
|
|
|
482
|
|
|
10,181
|
|
|
(140
|
)
|
|
10,598
|
|
|||||
Long-term debt, financing and capital lease obligations
|
9,000
|
|
|
14,903
|
|
|
8,574
|
|
|
(1,019
|
)
|
|
31,458
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
14,331
|
|
|
—
|
|
|
14,331
|
|
|||||
Note payable due to consolidated affiliate
|
—
|
|
|
9,000
|
|
|
—
|
|
|
(9,000
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
579
|
|
|
3,081
|
|
|
—
|
|
|
3,660
|
|
|||||
Due to consolidated affiliate
|
126
|
|
|
—
|
|
|
18,703
|
|
|
(18,829
|
)
|
|
—
|
|
|||||
Total liabilities
|
9,201
|
|
|
24,964
|
|
|
54,870
|
|
|
(28,988
|
)
|
|
60,047
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
24,663
|
|
|
24,665
|
|
|
24,983
|
|
|
(49,648
|
)
|
|
24,663
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
33,864
|
|
|
$
|
49,629
|
|
|
$
|
79,853
|
|
|
$
|
(78,636
|
)
|
|
$
|
84,710
|
|
Successor
|
|||||||||||||||||||
|
As of March 31, 2014
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
4,125
|
|
|
$
|
845
|
|
|
$
|
—
|
|
|
$
|
4,970
|
|
Short-term investments
|
—
|
|
|
1,220
|
|
|
—
|
|
|
—
|
|
|
1,220
|
|
|||||
Accounts and notes receivable, net
|
74
|
|
|
27
|
|
|
3,607
|
|
|
(101
|
)
|
|
3,607
|
|
|||||
Device and accessory inventory
|
—
|
|
|
—
|
|
|
982
|
|
|
—
|
|
|
982
|
|
|||||
Deferred tax assets
|
—
|
|
|
—
|
|
|
128
|
|
|
—
|
|
|
128
|
|
|||||
Prepaid expenses and other current assets
|
—
|
|
|
14
|
|
|
658
|
|
|
—
|
|
|
672
|
|
|||||
Total current assets
|
74
|
|
|
5,386
|
|
|
6,220
|
|
|
(101
|
)
|
|
11,579
|
|
|||||
Investments
|
—
|
|
|
1,104
|
|
|
61
|
|
|
(1,019
|
)
|
|
146
|
|
|||||
Investments in subsidiaries
|
25,316
|
|
|
25,588
|
|
|
—
|
|
|
(50,904
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
16,299
|
|
|
—
|
|
|
16,299
|
|
|||||
Due from consolidated affiliate
|
—
|
|
|
18,234
|
|
|
—
|
|
|
(18,234
|
)
|
|
—
|
|
|||||
Note receivable from consolidated affiliate
|
9,000
|
|
|
—
|
|
|
—
|
|
|
(9,000
|
)
|
|
—
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
—
|
|
|
6,383
|
|
|
—
|
|
|
6,383
|
|
|||||
FCC licenses and other
|
—
|
|
|
—
|
|
|
41,978
|
|
|
—
|
|
|
41,978
|
|
|||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
7,558
|
|
|
—
|
|
|
7,558
|
|
|||||
Other assets
|
133
|
|
|
133
|
|
|
613
|
|
|
(133
|
)
|
|
746
|
|
|||||
Total assets
|
$
|
34,523
|
|
|
$
|
50,445
|
|
|
$
|
79,112
|
|
|
$
|
(79,391
|
)
|
|
$
|
84,689
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,163
|
|
|
$
|
—
|
|
|
$
|
3,163
|
|
Accrued expenses and other current liabilities
|
78
|
|
|
493
|
|
|
5,074
|
|
|
(101
|
)
|
|
5,544
|
|
|||||
Current portion of long-term debt, financing and capital lease obligations
|
—
|
|
|
—
|
|
|
991
|
|
|
—
|
|
|
991
|
|
|||||
Total current liabilities
|
78
|
|
|
493
|
|
|
9,228
|
|
|
(101
|
)
|
|
9,698
|
|
|||||
Long-term debt, financing and capital lease obligations
|
9,000
|
|
|
15,027
|
|
|
8,779
|
|
|
(1,019
|
)
|
|
31,787
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
14,207
|
|
|
—
|
|
|
14,207
|
|
|||||
Note payable due to consolidated affiliate
|
—
|
|
|
9,000
|
|
|
—
|
|
|
(9,000
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
609
|
|
|
3,076
|
|
|
—
|
|
|
3,685
|
|
|||||
Due to consolidated affiliate
|
133
|
|
|
—
|
|
|
18,234
|
|
|
(18,367
|
)
|
|
—
|
|
|||||
Total liabilities
|
9,211
|
|
|
25,129
|
|
|
53,524
|
|
|
(28,487
|
)
|
|
59,377
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
25,312
|
|
|
25,316
|
|
|
25,588
|
|
|
(50,904
|
)
|
|
25,312
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
34,523
|
|
|
$
|
50,445
|
|
|
$
|
79,112
|
|
|
$
|
(79,391
|
)
|
|
$
|
84,689
|
|
Successor
|
|||||||||||||||||||
|
For the Three Months Ended September 30, 2014
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,488
|
|
|
$
|
—
|
|
|
$
|
8,488
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services and products (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
4,801
|
|
|
—
|
|
|
4,801
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
2,301
|
|
|
—
|
|
|
2,301
|
|
|||||
Severance and exit costs
|
—
|
|
|
—
|
|
|
284
|
|
|
—
|
|
|
284
|
|
|||||
Depreciation
|
—
|
|
|
—
|
|
|
898
|
|
|
—
|
|
|
898
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
396
|
|
|
—
|
|
|
396
|
|
|||||
|
—
|
|
|
—
|
|
|
8,680
|
|
|
—
|
|
|
8,680
|
|
|||||
Operating loss
|
—
|
|
|
—
|
|
|
(192
|
)
|
|
—
|
|
|
(192
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
169
|
|
|
23
|
|
|
1
|
|
|
(189
|
)
|
|
4
|
|
|||||
Interest expense
|
(169
|
)
|
|
(364
|
)
|
|
(166
|
)
|
|
189
|
|
|
(510
|
)
|
|||||
(Losses) earnings of subsidiaries
|
(765
|
)
|
|
(424
|
)
|
|
—
|
|
|
1,189
|
|
|
—
|
|
|||||
Other income, net
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
|
(765
|
)
|
|
(765
|
)
|
|
(161
|
)
|
|
1,189
|
|
|
(502
|
)
|
|||||
(Loss) income before income taxes
|
(765
|
)
|
|
(765
|
)
|
|
(353
|
)
|
|
1,189
|
|
|
(694
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
(71
|
)
|
|||||
Net (loss) income
|
(765
|
)
|
|
(765
|
)
|
|
(424
|
)
|
|
1,189
|
|
|
(765
|
)
|
|||||
Other comprehensive (loss) income
|
(7
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
8
|
|
|
(7
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(772
|
)
|
|
$
|
(772
|
)
|
|
$
|
(425
|
)
|
|
$
|
1,197
|
|
|
$
|
(772
|
)
|
Successor
|
|||||||||||||||||||
|
For the Three Months Ended September 30, 2013
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,749
|
|
|
$
|
—
|
|
|
$
|
7,749
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services and products (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
4,342
|
|
|
—
|
|
|
4,342
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
2,259
|
|
|
—
|
|
|
2,259
|
|
|||||
Severance and exit costs
|
—
|
|
|
—
|
|
|
103
|
|
|
—
|
|
|
103
|
|
|||||
Depreciation
|
—
|
|
|
—
|
|
|
942
|
|
|
—
|
|
|
942
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
461
|
|
|
—
|
|
|
461
|
|
|||||
|
—
|
|
|
—
|
|
|
8,107
|
|
|
—
|
|
|
8,107
|
|
|||||
Operating loss
|
—
|
|
|
—
|
|
|
(358
|
)
|
|
—
|
|
|
(358
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
27
|
|
|
20
|
|
|
2
|
|
|
(45
|
)
|
|
4
|
|
|||||
Interest expense
|
(26
|
)
|
|
(214
|
)
|
|
(221
|
)
|
|
45
|
|
|
(416
|
)
|
|||||
(Losses) earnings of subsidiaries
|
(795
|
)
|
|
(603
|
)
|
|
—
|
|
|
1,398
|
|
|
—
|
|
|||||
Other income, net
|
159
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|||||
|
(635
|
)
|
|
(795
|
)
|
|
(219
|
)
|
|
1,398
|
|
|
(251
|
)
|
|||||
(Loss) income before income taxes
|
(635
|
)
|
|
(795
|
)
|
|
(577
|
)
|
|
1,398
|
|
|
(609
|
)
|
|||||
Income tax expense
|
(64
|
)
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(90
|
)
|
|||||
Net (loss) income
|
(699
|
)
|
|
(795
|
)
|
|
(603
|
)
|
|
1,398
|
|
|
(699
|
)
|
|||||
Other comprehensive income (loss)
|
4
|
|
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
4
|
|
|||||
Comprehensive (loss) income
|
$
|
(695
|
)
|
|
$
|
(791
|
)
|
|
$
|
(603
|
)
|
|
$
|
1,394
|
|
|
$
|
(695
|
)
|
Successor
|
|||||||||||||||||||
|
For the Six Months Ended September 30, 2014
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,277
|
|
|
$
|
—
|
|
|
$
|
17,277
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services and products (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
9,479
|
|
|
—
|
|
|
9,479
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
4,585
|
|
|
—
|
|
|
4,585
|
|
|||||
Severance and exit costs
|
—
|
|
|
—
|
|
|
311
|
|
|
—
|
|
|
311
|
|
|||||
Depreciation
|
—
|
|
|
—
|
|
|
1,766
|
|
|
—
|
|
|
1,766
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
809
|
|
|
—
|
|
|
809
|
|
|||||
|
—
|
|
|
—
|
|
|
16,950
|
|
|
—
|
|
|
16,950
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
327
|
|
|
—
|
|
|
327
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
338
|
|
|
46
|
|
|
1
|
|
|
(378
|
)
|
|
7
|
|
|||||
Interest expense
|
(338
|
)
|
|
(732
|
)
|
|
(330
|
)
|
|
378
|
|
|
(1,022
|
)
|
|||||
(Losses) earnings of subsidiaries
|
(742
|
)
|
|
(56
|
)
|
|
—
|
|
|
798
|
|
|
—
|
|
|||||
Other income, net
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
|
(742
|
)
|
|
(742
|
)
|
|
(327
|
)
|
|
798
|
|
|
(1,013
|
)
|
|||||
(Loss) income before income taxes
|
(742
|
)
|
|
(742
|
)
|
|
—
|
|
|
798
|
|
|
(686
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|||||
Net (loss) income
|
(742
|
)
|
|
(742
|
)
|
|
(56
|
)
|
|
798
|
|
|
(742
|
)
|
|||||
Other comprehensive (loss) income
|
(7
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
8
|
|
|
(7
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(749
|
)
|
|
$
|
(749
|
)
|
|
$
|
(57
|
)
|
|
$
|
806
|
|
|
$
|
(749
|
)
|
Successor
|
|||||||||||||||||||
|
For the Six Months Ended September 30, 2013
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,749
|
|
|
$
|
—
|
|
|
$
|
7,749
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services and products (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
4,342
|
|
|
—
|
|
|
4,342
|
|
|||||
Selling, general and administrative
|
22
|
|
|
—
|
|
|
2,259
|
|
|
—
|
|
|
2,281
|
|
|||||
Severance and exit costs
|
—
|
|
|
—
|
|
|
103
|
|
|
—
|
|
|
103
|
|
|||||
Depreciation
|
—
|
|
|
—
|
|
|
942
|
|
|
—
|
|
|
942
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
461
|
|
|
—
|
|
|
461
|
|
|||||
|
22
|
|
|
—
|
|
|
8,107
|
|
|
—
|
|
|
8,129
|
|
|||||
Operating loss
|
(22
|
)
|
|
—
|
|
|
(358
|
)
|
|
—
|
|
|
(380
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
41
|
|
|
20
|
|
|
1
|
|
|
(45
|
)
|
|
17
|
|
|||||
Interest expense
|
(26
|
)
|
|
(214
|
)
|
|
(221
|
)
|
|
45
|
|
|
(416
|
)
|
|||||
(Losses) earnings of subsidiaries
|
(795
|
)
|
|
(603
|
)
|
|
—
|
|
|
1,398
|
|
|
—
|
|
|||||
Other (expense) income, net
|
(8
|
)
|
|
2
|
|
|
1
|
|
|
—
|
|
|
(5
|
)
|
|||||
|
(788
|
)
|
|
(795
|
)
|
|
(219
|
)
|
|
1,398
|
|
|
(404
|
)
|
|||||
(Loss) income before income taxes
|
(810
|
)
|
|
(795
|
)
|
|
(577
|
)
|
|
1,398
|
|
|
(784
|
)
|
|||||
Income tax expense
|
(3
|
)
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(29
|
)
|
|||||
Net (loss) income
|
(813
|
)
|
|
(795
|
)
|
|
(603
|
)
|
|
1,398
|
|
|
(813
|
)
|
|||||
Other comprehensive income (loss)
|
100
|
|
|
100
|
|
|
—
|
|
|
(100
|
)
|
|
100
|
|
|||||
Comprehensive (loss) income
|
$
|
(713
|
)
|
|
$
|
(695
|
)
|
|
$
|
(603
|
)
|
|
$
|
1,298
|
|
|
$
|
(713
|
)
|
Predecessor
|
|||||||||||||||
|
For the 10 Days Ended July 10, 2013
|
||||||||||||||
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
932
|
|
|
$
|
—
|
|
|
$
|
932
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of services and products (exclusive of depreciation and amortization included below)
|
—
|
|
|
567
|
|
|
—
|
|
|
567
|
|
||||
Selling, general and administrative
|
—
|
|
|
289
|
|
|
—
|
|
|
289
|
|
||||
Severance and exit costs
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Depreciation
|
—
|
|
|
113
|
|
|
—
|
|
|
113
|
|
||||
Amortization
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
|
—
|
|
|
972
|
|
|
—
|
|
|
972
|
|
||||
Operating loss
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
3
|
|
|
—
|
|
|
(2
|
)
|
|
1
|
|
||||
Interest expense
|
(259
|
)
|
|
(18
|
)
|
|
2
|
|
|
(275
|
)
|
||||
Equity in losses of unconsolidated investments, net
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
||||
Gain on previously-held equity interests
|
—
|
|
|
2,926
|
|
|
—
|
|
|
2,926
|
|
||||
Earnings (losses) of subsidiaries
|
1,338
|
|
|
—
|
|
|
(1,338
|
)
|
|
—
|
|
||||
Other income, net
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
|
1,082
|
|
|
2,886
|
|
|
(1,338
|
)
|
|
2,630
|
|
||||
Income (loss) before income taxes
|
1,082
|
|
|
2,846
|
|
|
(1,338
|
)
|
|
2,590
|
|
||||
Income tax expense
|
—
|
|
|
(1,508
|
)
|
|
—
|
|
|
(1,508
|
)
|
||||
Net income (loss)
|
1,082
|
|
|
1,338
|
|
|
(1,338
|
)
|
|
1,082
|
|
||||
Other comprehensive (loss) income
|
(42
|
)
|
|
5
|
|
|
(5
|
)
|
|
(42
|
)
|
||||
Comprehensive income (loss)
|
$
|
1,040
|
|
|
$
|
1,343
|
|
|
$
|
(1,343
|
)
|
|
$
|
1,040
|
|
Predecessor
|
|||||||||||||||
|
For the 101 Days Ended July 10, 2013
|
||||||||||||||
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
9,809
|
|
|
$
|
—
|
|
|
$
|
9,809
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of services and products (exclusive of depreciation and amortization included below)
|
—
|
|
|
5,612
|
|
|
—
|
|
|
5,612
|
|
||||
Selling, general and administrative
|
—
|
|
|
2,731
|
|
|
—
|
|
|
2,731
|
|
||||
Severance and exit costs
|
—
|
|
|
627
|
|
|
—
|
|
|
627
|
|
||||
Depreciation
|
—
|
|
|
1,676
|
|
|
—
|
|
|
1,676
|
|
||||
Amortization
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
||||
|
—
|
|
|
10,723
|
|
|
—
|
|
|
10,723
|
|
||||
Operating loss
|
—
|
|
|
(914
|
)
|
|
—
|
|
|
(914
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
32
|
|
|
8
|
|
|
(22
|
)
|
|
18
|
|
||||
Interest expense
|
(550
|
)
|
|
(175
|
)
|
|
22
|
|
|
(703
|
)
|
||||
Equity in losses of unconsolidated investments, net
|
—
|
|
|
(280
|
)
|
|
—
|
|
|
(280
|
)
|
||||
Gain on previously-held equity interests
|
—
|
|
|
2,926
|
|
|
—
|
|
|
2,926
|
|
||||
Earnings (losses) of subsidiaries
|
3
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Other income, net
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
|
(515
|
)
|
|
2,480
|
|
|
(3
|
)
|
|
1,962
|
|
||||
(Loss) income before income taxes
|
(515
|
)
|
|
1,566
|
|
|
(3
|
)
|
|
1,048
|
|
||||
Income tax expense
|
—
|
|
|
(1,563
|
)
|
|
—
|
|
|
(1,563
|
)
|
||||
Net (loss) income
|
(515
|
)
|
|
3
|
|
|
(3
|
)
|
|
(515
|
)
|
||||
Other comprehensive income (loss)
|
9
|
|
|
20
|
|
|
(20
|
)
|
|
9
|
|
||||
Comprehensive (loss) income
|
$
|
(506
|
)
|
|
$
|
23
|
|
|
$
|
(23
|
)
|
|
$
|
(506
|
)
|
Successor
|
|||||||||||||||||||
|
For the Six Months Ended September 30, 2014
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(679
|
)
|
|
$
|
2,586
|
|
|
$
|
(200
|
)
|
|
$
|
1,707
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(2,389
|
)
|
|
—
|
|
|
(2,389
|
)
|
|||||
Expenditures relating to FCC licenses
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
(79
|
)
|
|||||
Reimbursements relating to FCC licenses
|
—
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|||||
Proceeds from sales and maturities of short-term investments
|
—
|
|
|
1,842
|
|
|
—
|
|
|
—
|
|
|
1,842
|
|
|||||
Purchases of short-term investments
|
—
|
|
|
(1,754
|
)
|
|
(35
|
)
|
|
—
|
|
|
(1,789
|
)
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
(92
|
)
|
|
—
|
|
|
92
|
|
|
—
|
|
|||||
Proceeds from sales of assets and FCC licenses
|
—
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Net cash (used in) provided by investing activities
|
—
|
|
|
(4
|
)
|
|
(2,313
|
)
|
|
92
|
|
|
(2,225
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayments of debt, financing and capital lease obligations
|
—
|
|
|
—
|
|
|
(363
|
)
|
|
—
|
|
|
(363
|
)
|
|||||
Proceeds from issuance of common stock, net
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Intercompany dividends paid to parent
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
200
|
|
|
—
|
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
—
|
|
|
92
|
|
|
(92
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
—
|
|
|
46
|
|
|
(471
|
)
|
|
108
|
|
|
(317
|
)
|
|||||
Net decrease in cash and cash equivalents
|
—
|
|
|
(637
|
)
|
|
(198
|
)
|
|
—
|
|
|
(835
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
4,125
|
|
|
845
|
|
|
—
|
|
|
4,970
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
3,488
|
|
|
$
|
647
|
|
|
$
|
—
|
|
|
$
|
4,135
|
|
Successor
|
|||||||||||||||||||
|
For the Six Months Ended September 30, 2013
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-
Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
11
|
|
|
$
|
150
|
|
|
$
|
891
|
|
|
$
|
(350
|
)
|
|
$
|
702
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(1,878
|
)
|
|
—
|
|
|
(1,878
|
)
|
|||||
Expenditures relating to FCC licenses
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|||||
Acquisitions, net of cash acquired
|
(16,640
|
)
|
|
2,528
|
|
|
—
|
|
|
—
|
|
|
(14,112
|
)
|
|||||
Proceeds from sales and maturities of short-term investments
|
—
|
|
|
329
|
|
|
150
|
|
|
—
|
|
|
479
|
|
|||||
Purchases of short-term investments
|
(200
|
)
|
|
(615
|
)
|
|
—
|
|
|
—
|
|
|
(815
|
)
|
|||||
Increase in restricted cash
|
—
|
|
|
(2,655
|
)
|
|
(395
|
)
|
|
—
|
|
|
(3,050
|
)
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
(2,542
|
)
|
|
—
|
|
|
2,542
|
|
|
—
|
|
|||||
Investment in consolidated affiliate
|
(1,600
|
)
|
|
—
|
|
|
—
|
|
|
1,600
|
|
|
—
|
|
|||||
Proceeds from sales of assets and FCC licenses
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Intercompany note advance to consolidated affiliate
|
(6,401
|
)
|
|
—
|
|
|
—
|
|
|
6,401
|
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net cash (used in) provided by investing activities
|
(24,841
|
)
|
|
(2,955
|
)
|
|
(2,154
|
)
|
|
10,543
|
|
|
(19,407
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt and financings
|
6,500
|
|
|
—
|
|
|
326
|
|
|
—
|
|
|
6,826
|
|
|||||
Repayments of debt and capital lease obligations
|
—
|
|
|
—
|
|
|
(497
|
)
|
|
—
|
|
|
(497
|
)
|
|||||
Debt financing costs
|
(99
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(107
|
)
|
|||||
Proceeds from issuance of common stock, net
|
18,540
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
18,552
|
|
|||||
Intercompany dividends paid to parent
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
350
|
|
|
—
|
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
—
|
|
|
2,542
|
|
|
(2,542
|
)
|
|
—
|
|
|||||
Intercompany note advance from parent
|
—
|
|
|
6,401
|
|
|
—
|
|
|
(6,401
|
)
|
|
—
|
|
|||||
Equity contribution from parent
|
—
|
|
|
1,600
|
|
|
—
|
|
|
(1,600
|
)
|
|
—
|
|
|||||
Other, net
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||||
Net cash provided by (used in) financing activities
|
24,927
|
|
|
8,013
|
|
|
2,013
|
|
|
(10,193
|
)
|
|
24,760
|
|
|||||
Net increase in cash and cash equivalents
|
97
|
|
|
5,208
|
|
|
750
|
|
|
—
|
|
|
6,055
|
|
|||||
Cash and cash equivalents, beginning of period
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
100
|
|
|
$
|
5,208
|
|
|
$
|
750
|
|
|
$
|
—
|
|
|
$
|
6,058
|
|
Predecessor
|
|||||||||||||||
|
For the 101 Days Ended July 10, 2013
|
||||||||||||||
|
Subsidiary Guarantor
|
|
Non-
Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net cash (used in) provided by operating activities
|
$
|
(349
|
)
|
|
$
|
2,080
|
|
|
$
|
—
|
|
|
$
|
1,731
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
—
|
|
|
(1,759
|
)
|
|
—
|
|
|
(1,759
|
)
|
||||
Expenditures relating to FCC licenses
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
||||
Acquisitions, net of cash acquired
|
(4,039
|
)
|
|
—
|
|
|
—
|
|
|
(4,039
|
)
|
||||
Investment in Clearwire (including debt securities)
|
—
|
|
|
(228
|
)
|
|
—
|
|
|
(228
|
)
|
||||
Proceeds from sales and maturities of short-term investments
|
1,164
|
|
|
—
|
|
|
—
|
|
|
1,164
|
|
||||
Purchases of short-term investments
|
(295
|
)
|
|
—
|
|
|
—
|
|
|
(295
|
)
|
||||
Change in amounts due from/due to consolidated affiliates
|
(136
|
)
|
|
—
|
|
|
136
|
|
|
—
|
|
||||
Proceeds from sales of assets and FCC licenses
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Other, net
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Net cash (used in) provided by investing activities
|
(3,306
|
)
|
|
(2,057
|
)
|
|
136
|
|
|
(5,227
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Repayments of debt and capital lease obligations
|
—
|
|
|
(303
|
)
|
|
—
|
|
|
(303
|
)
|
||||
Debt financing costs
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Proceeds from issuance of common stock, net
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
136
|
|
|
(136
|
)
|
|
—
|
|
||||
Net cash provided by (used in) financing activities
|
52
|
|
|
(167
|
)
|
|
(136
|
)
|
|
(251
|
)
|
||||
Net decrease in cash and cash equivalents
|
(3,603
|
)
|
|
(144
|
)
|
|
—
|
|
|
(3,747
|
)
|
||||
Cash and cash equivalents, beginning of period
|
5,124
|
|
|
1,151
|
|
|
—
|
|
|
6,275
|
|
||||
Cash and cash equivalents, end of period
|
$
|
1,521
|
|
|
$
|
1,007
|
|
|
$
|
—
|
|
|
$
|
2,528
|
|
Note 17.
|
Subsequent Events
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Provide the best value;
|
•
|
Enhance network coverage and capacity; and
|
•
|
Operationalize a more effective cost structure.
|
•
|
We recorded a gain on previously-held Clearwire equity interests of approximately $2.9 billion for the difference between the estimated fair value of the equity interests owned prior to the acquisition ($5.00 per share offer price less an estimated control premium of approximately $0.60) and the carrying value of approximately $325 million for those previously-held equity interests; and
|
•
|
Increased income tax expense was primarily attributable to taxable temporary differences as a result of the $2.9 billion gain on the previously-held equity interests in Clearwire, which was principally attributable to the increase in the fair value of Federal Communications Commission (FCC) licenses held by Clearwire and from amortization of FCC licenses. FCC licenses are amortized over 15 years for income tax purposes but, because these licenses have an indefinite life, they are not amortized for financial statement reporting purposes.
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10, 2013
|
|
September 30,
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||||
Wireless segment earnings
|
$
|
1,370
|
|
|
$
|
1,125
|
|
|
$
|
3,163
|
|
|
$
|
1,125
|
|
|
|
$
|
81
|
|
|
$
|
1,375
|
|
|
1,206
|
|
|
2,500
|
|
||
Wireline segment earnings
|
27
|
|
|
117
|
|
|
62
|
|
|
117
|
|
|
|
15
|
|
|
144
|
|
|
132
|
|
|
261
|
|
||||||||
Corporate, other and eliminations
|
(11
|
)
|
|
6
|
|
|
(12
|
)
|
|
(16
|
)
|
|
|
(1
|
)
|
|
—
|
|
|
5
|
|
|
(16
|
)
|
||||||||
Consolidated segment earnings
|
1,386
|
|
|
1,248
|
|
|
3,213
|
|
|
1,226
|
|
|
|
95
|
|
|
1,519
|
|
|
1,343
|
|
|
2,745
|
|
||||||||
Depreciation
|
(898
|
)
|
|
(942
|
)
|
|
(1,766
|
)
|
|
(942
|
)
|
|
|
(113
|
)
|
|
(1,676
|
)
|
|
(1,055
|
)
|
|
(2,618
|
)
|
||||||||
Amortization
|
(396
|
)
|
|
(461
|
)
|
|
(809
|
)
|
|
(461
|
)
|
|
|
(8
|
)
|
|
(77
|
)
|
|
(469
|
)
|
|
(538
|
)
|
||||||||
Other, net
|
(284
|
)
|
|
(203
|
)
|
|
(311
|
)
|
|
(203
|
)
|
|
|
(14
|
)
|
|
(680
|
)
|
|
(217
|
)
|
|
(883
|
)
|
||||||||
Operating income (loss)
|
(192
|
)
|
|
(358
|
)
|
|
327
|
|
|
(380
|
)
|
|
|
(40
|
)
|
|
(914
|
)
|
|
(398
|
)
|
|
(1,294
|
)
|
||||||||
Interest expense
|
(510
|
)
|
|
(416
|
)
|
|
(1,022
|
)
|
|
(416
|
)
|
|
|
(275
|
)
|
|
(703
|
)
|
|
(691
|
)
|
|
(1,119
|
)
|
||||||||
Equity in losses of unconsolidated investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(23
|
)
|
|
(280
|
)
|
|
(23
|
)
|
|
(280
|
)
|
||||||||
Gain on previously-held equity interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2,926
|
|
|
2,926
|
|
|
2,926
|
|
|
2,926
|
|
||||||||
Other income, net
|
8
|
|
|
165
|
|
|
9
|
|
|
12
|
|
|
|
2
|
|
|
19
|
|
|
167
|
|
|
31
|
|
||||||||
Income tax expense
|
(71
|
)
|
|
(90
|
)
|
|
(56
|
)
|
|
(29
|
)
|
|
|
(1,508
|
)
|
|
(1,563
|
)
|
|
(1,598
|
)
|
|
(1,592
|
)
|
||||||||
Net (loss) income
|
$
|
(765
|
)
|
|
$
|
(699
|
)
|
|
$
|
(742
|
)
|
|
$
|
(813
|
)
|
|
|
$
|
1,082
|
|
|
$
|
(515
|
)
|
|
$
|
383
|
|
|
$
|
(1,328
|
)
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10,
|
|
September 30,
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||||
Severance and exit costs
|
$
|
(284
|
)
|
|
$
|
(103
|
)
|
|
$
|
(311
|
)
|
|
$
|
(103
|
)
|
|
|
$
|
5
|
|
|
$
|
(627
|
)
|
|
$
|
(98
|
)
|
|
$
|
(730
|
)
|
Other
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
(100
|
)
|
|
|
(19
|
)
|
|
(53
|
)
|
|
(119
|
)
|
|
(153
|
)
|
||||||||
Total
|
$
|
(284
|
)
|
|
$
|
(203
|
)
|
|
$
|
(311
|
)
|
|
$
|
(203
|
)
|
|
|
$
|
(14
|
)
|
|
$
|
(680
|
)
|
|
$
|
(217
|
)
|
|
$
|
(883
|
)
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10,
|
|
September 30,
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||||
Interest income
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
17
|
|
|
|
$
|
1
|
|
|
$
|
18
|
|
|
$
|
5
|
|
|
$
|
35
|
|
Gain on early retirement of debt
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||||||
Other, net
|
4
|
|
|
153
|
|
|
2
|
|
|
(13
|
)
|
|
|
1
|
|
|
1
|
|
|
154
|
|
|
(12
|
)
|
||||||||
Total
|
$
|
8
|
|
|
$
|
165
|
|
|
$
|
9
|
|
|
$
|
12
|
|
|
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
167
|
|
|
$
|
31
|
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10,
|
|
September 30,
|
||||||||||||||||||||||||
Wireless Segment Earnings
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||||
Sprint platform
|
$
|
5,377
|
|
|
$
|
5,201
|
|
|
$
|
10,930
|
|
|
$
|
5,201
|
|
|
|
$
|
634
|
|
|
$
|
6,469
|
|
|
$
|
5,835
|
|
|
$
|
11,670
|
|
Nextel platform
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||||
Total postpaid
|
5,377
|
|
|
5,201
|
|
|
10,930
|
|
|
5,201
|
|
|
|
634
|
|
|
6,543
|
|
|
5,835
|
|
|
11,744
|
|
||||||||
Sprint platform
|
1,197
|
|
|
1,028
|
|
|
2,418
|
|
|
1,028
|
|
|
|
132
|
|
|
1,408
|
|
|
1,160
|
|
|
2,436
|
|
||||||||
Nextel platform
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||||
Total prepaid
|
1,197
|
|
|
1,028
|
|
|
2,418
|
|
|
1,028
|
|
|
|
132
|
|
|
1,425
|
|
|
1,160
|
|
|
2,453
|
|
||||||||
Other
(1)
|
119
|
|
|
170
|
|
|
253
|
|
|
170
|
|
|
|
3
|
|
|
28
|
|
|
173
|
|
|
198
|
|
||||||||
Retail service revenue
|
6,693
|
|
|
6,399
|
|
|
13,601
|
|
|
6,399
|
|
|
|
769
|
|
|
7,996
|
|
|
7,168
|
|
|
14,395
|
|
||||||||
Wholesale, affiliate and other
|
197
|
|
|
124
|
|
|
376
|
|
|
124
|
|
|
|
15
|
|
|
146
|
|
|
139
|
|
|
270
|
|
||||||||
Total service revenue
|
6,890
|
|
|
6,523
|
|
|
13,977
|
|
|
6,523
|
|
|
|
784
|
|
|
8,142
|
|
|
7,307
|
|
|
14,665
|
|
||||||||
Cost of services (exclusive of depreciation and amortization)
|
(1,988
|
)
|
|
(2,087
|
)
|
|
(4,037
|
)
|
|
(2,087
|
)
|
|
|
(240
|
)
|
|
(2,532
|
)
|
|
(2,327
|
)
|
|
(4,619
|
)
|
||||||||
Service gross margin
|
4,902
|
|
|
4,436
|
|
|
9,940
|
|
|
4,436
|
|
|
|
544
|
|
|
5,610
|
|
|
4,980
|
|
|
10,046
|
|
||||||||
Service gross margin percentage
|
71
|
%
|
|
68
|
%
|
|
71
|
%
|
|
68
|
%
|
|
|
69
|
%
|
|
69
|
%
|
|
68
|
%
|
|
69
|
%
|
||||||||
Equipment revenue
|
1,039
|
|
|
636
|
|
|
2,145
|
|
|
636
|
|
|
|
74
|
|
|
894
|
|
|
710
|
|
|
1,530
|
|
||||||||
Cost of products
|
(2,372
|
)
|
|
(1,872
|
)
|
|
(4,530
|
)
|
|
(1,872
|
)
|
|
|
(281
|
)
|
|
(2,579
|
)
|
|
(2,153
|
)
|
|
(4,451
|
)
|
||||||||
Equipment net subsidy
|
(1,333
|
)
|
|
(1,236
|
)
|
|
(2,385
|
)
|
|
(1,236
|
)
|
|
|
(207
|
)
|
|
(1,685
|
)
|
|
(1,443
|
)
|
|
(2,921
|
)
|
||||||||
Equipment net subsidy percentage
|
(128
|
)%
|
|
(194
|
)%
|
|
(111
|
)%
|
|
(194
|
)%
|
|
|
(280
|
)%
|
|
(188
|
)%
|
|
(203
|
)%
|
|
(191
|
)%
|
||||||||
Selling, general and administrative expense
|
(2,199
|
)
|
|
(2,075
|
)
|
|
(4,392
|
)
|
|
(2,075
|
)
|
|
|
(256
|
)
|
|
(2,550
|
)
|
|
(2,331
|
)
|
|
(4,625
|
)
|
||||||||
Wireless segment earnings
|
$
|
1,370
|
|
|
$
|
1,125
|
|
|
$
|
3,163
|
|
|
$
|
1,125
|
|
|
|
$
|
81
|
|
|
$
|
1,375
|
|
|
$
|
1,206
|
|
|
$
|
2,500
|
|
(1
)
|
Represents service revenue primarily related to the acquisition of Clearwire on July 9, 2013.
|
•
|
revenue generated from each subscriber, which in turn is a function of the types and amount of services utilized by each subscriber and the rates charged for those services; and
|
•
|
the number of subscribers that we serve, which in turn is a function of our ability to retain existing subscribers and acquire new subscribers.
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10,
|
|
September 30,
|
||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||
|
(subscribers in thousands)
|
|||||||||||||||||||||||
Average postpaid subscribers
|
30,079
|
|
|
31,125
|
|
|
30,226
|
|
|
31,125
|
|
|
|
30,583
|
|
|
31,053
|
|
|
31,020
|
|
|
31,062
|
|
Average prepaid subscribers
|
15,117
|
|
|
16,015
|
|
|
15,246
|
|
|
16,015
|
|
|
|
15,244
|
|
|
15,890
|
|
|
15,895
|
|
|
15,927
|
|
Average retail subscribers
|
45,196
|
|
|
47,140
|
|
|
45,472
|
|
|
47,140
|
|
|
|
45,827
|
|
|
46,943
|
|
|
46,915
|
|
|
46,989
|
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10,
|
|
September 30,
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||||||||||
ARPU
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Postpaid
|
$
|
60.24
|
|
|
$
|
63.48
|
|
|
$
|
60.95
|
|
|
$
|
63.48
|
|
|
|
$
|
64.55
|
|
|
$
|
63.68
|
|
|
$
|
63.69
|
|
|
$
|
63.64
|
|
Prepaid
|
$
|
27.73
|
|
|
$
|
25.86
|
|
|
$
|
27.85
|
|
|
$
|
25.86
|
|
|
|
$
|
26.96
|
|
|
$
|
27.01
|
|
|
$
|
26.04
|
|
|
$
|
26.53
|
|
Average retail
|
$
|
49.36
|
|
|
$
|
50.70
|
|
|
$
|
49.85
|
|
|
$
|
50.70
|
|
|
|
$
|
52.04
|
|
|
$
|
51.27
|
|
|
$
|
50.93
|
|
|
$
|
51.06
|
|
(1)
|
ARPU is calculated by dividing service revenue by the sum of the monthly average number of subscribers in the applicable service category. Changes in average monthly service revenue reflect subscribers 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 subscribers, plus the net effect of average monthly revenue generated by new subscribers and deactivating subscribers.
|
|
June 30,
2013
|
|
Sept 30,
2013
|
|
Dec 31,
2013 |
|
March 31,
2014 |
|
June 30,
2014 |
|
Sept 30,
2014 |
||||||
Net additions (losses) (in thousands)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Postpaid
|
194
|
|
|
(360
|
)
|
|
58
|
|
|
(231
|
)
|
|
(181
|
)
|
|
(272
|
)
|
Prepaid
|
(486
|
)
|
|
84
|
|
|
322
|
|
|
(364
|
)
|
|
(542
|
)
|
|
35
|
|
Wholesale and affiliates
(2)
|
(228
|
)
|
|
181
|
|
|
302
|
|
|
212
|
|
|
503
|
|
|
827
|
|
Total Sprint platform
|
(520
|
)
|
|
(95
|
)
|
|
682
|
|
|
(383
|
)
|
|
(220
|
)
|
|
590
|
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Postpaid
|
(1,060
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Prepaid
|
(255
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Nextel platform
|
(1,315
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Transactions
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Postpaid
|
(179
|
)
|
|
(175
|
)
|
|
(127
|
)
|
|
(102
|
)
|
|
(64
|
)
|
|
(64
|
)
|
Prepaid
|
(20
|
)
|
|
(56
|
)
|
|
(103
|
)
|
|
(51
|
)
|
|
(77
|
)
|
|
(55
|
)
|
Wholesale
|
—
|
|
|
13
|
|
|
25
|
|
|
69
|
|
|
27
|
|
|
13
|
|
Total Transactions
|
(199
|
)
|
|
(218
|
)
|
|
(205
|
)
|
|
(84
|
)
|
|
(114
|
)
|
|
(106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total retail postpaid
|
(1,045
|
)
|
|
(535
|
)
|
|
(69
|
)
|
|
(333
|
)
|
|
(245
|
)
|
|
(336
|
)
|
Total retail prepaid
|
(761
|
)
|
|
28
|
|
|
219
|
|
|
(415
|
)
|
|
(619
|
)
|
|
(20
|
)
|
Total wholesale and affiliate
|
(228
|
)
|
|
194
|
|
|
327
|
|
|
281
|
|
|
530
|
|
|
840
|
|
Total Wireless
|
(2,034
|
)
|
|
(313
|
)
|
|
477
|
|
|
(467
|
)
|
|
(334
|
)
|
|
484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
End of period subscribers (in thousands)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Postpaid
(4)
|
30,451
|
|
|
30,091
|
|
|
30,149
|
|
|
29,918
|
|
|
29,737
|
|
|
29,465
|
|
Prepaid
|
15,215
|
|
|
15,299
|
|
|
15,621
|
|
|
15,257
|
|
|
14,715
|
|
|
14,750
|
|
Wholesale and affiliates
(2)(3)(4)
|
7,710
|
|
|
7,862
|
|
|
8,164
|
|
|
8,376
|
|
|
8,879
|
|
|
9,706
|
|
Total Sprint platform
|
53,376
|
|
|
53,252
|
|
|
53,934
|
|
|
53,551
|
|
|
53,331
|
|
|
53,921
|
|
Transactions
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Postpaid
|
173
|
|
|
815
|
|
|
688
|
|
|
586
|
|
|
522
|
|
|
458
|
|
Prepaid
|
39
|
|
|
704
|
|
|
601
|
|
|
550
|
|
|
473
|
|
|
418
|
|
Wholesale
|
—
|
|
|
106
|
|
|
131
|
|
|
200
|
|
|
227
|
|
|
240
|
|
Total Transactions
|
212
|
|
|
1,625
|
|
|
1,420
|
|
|
1,336
|
|
|
1,222
|
|
|
1,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total retail postpaid
(4)
|
30,624
|
|
|
30,906
|
|
|
30,837
|
|
|
30,504
|
|
|
30,259
|
|
|
29,923
|
|
Total retail prepaid
|
15,254
|
|
|
16,003
|
|
|
16,222
|
|
|
15,807
|
|
|
15,188
|
|
|
15,168
|
|
Total wholesale and affiliates
(3)(4)
|
7,710
|
|
|
7,968
|
|
|
8,295
|
|
|
8,576
|
|
|
9,106
|
|
|
9,946
|
|
Total Wireless
|
53,588
|
|
|
54,877
|
|
|
55,354
|
|
|
54,887
|
|
|
54,553
|
|
|
55,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Supplemental data - connected devices
|
|
|
|
|
|
|
|
|
|
|
|
||||||
End of period subscribers (in thousands)
(4)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Retail postpaid
|
798
|
|
|
834
|
|
|
922
|
|
|
968
|
|
|
988
|
|
|
1,039
|
|
Wholesale and affiliates
|
3,057
|
|
|
3,298
|
|
|
3,578
|
|
|
3,882
|
|
|
4,192
|
|
|
4,635
|
|
Total
|
3,855
|
|
|
4,132
|
|
|
4,500
|
|
|
4,850
|
|
|
5,180
|
|
|
5,674
|
|
(1)
|
A subscriber is defined as an individual line of service associated with each device activated by a customer. Subscribers that transfer from their original service category classification to another platform, or another service line within the same platform, are reflected as a net loss to the original service category and a net addition to their new service category. There is no net effect for such subscriber changes to the total wireless net additions (losses) or end of period subscribers.
|
(2)
|
We acquired approximately 352,000 postpaid subscribers and 59,000 prepaid subscribers through an acquisition of assets from United States Cellular Corporation (U.S. Cellular) that closed on May 17, 2013. We acquired approximately
788,000
postpaid subscribers (excluding
29,000
Sprint wholesale subscribers transferred to Transactions postpaid subscribers that were originally recognized as part of our Clearwire MVNO arrangement),
721,000
prepaid subscribers, and
93,000
wholesale subscribers as a result of the Clearwire Acquisition when the transaction closed on July 9, 2013.
|
(3)
|
Subscribers through some of our MVNO relationships have inactivity either in voice usage or primarily as a result of the nature of the device, where activity only occurs when data retrieval is initiated by the end-user and may occur infrequently. Although we continue to provide these subscribers access to our network through our MVNO relationships, approximately
1,637,000
subscribers at
September 30, 2014
through these MVNO relationships have been inactive for at least six months, with no associated revenue during the three-month period ended
September 30, 2014
.
|
(4)
|
End of period connected devices are included in total retail postpaid or wholesale and affiliates end of period subscriber totals for all periods presented.
|
|
June 30,
2013
|
|
Sept 30,
2013
|
|
Dec 31,
2013 |
|
March 31,
2014 |
|
June 30,
2014 |
|
Sept 30,
2014
|
||||||
Monthly subscriber churn rate
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Postpaid
|
1.83
|
%
|
|
1.99
|
%
|
|
2.07
|
%
|
|
2.11
|
%
|
|
2.05
|
%
|
|
2.18
|
%
|
Prepaid
|
5.22
|
%
|
|
3.57
|
%
|
|
3.01
|
%
|
|
4.33
|
%
|
|
4.44
|
%
|
|
3.76
|
%
|
Transactions
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Postpaid
|
26.64
|
%
|
|
6.38
|
%
|
|
5.48
|
%
|
|
5.48
|
%
|
|
4.15
|
%
|
|
4.66
|
%
|
Prepaid
|
16.72
|
%
|
|
8.84
|
%
|
|
8.18
|
%
|
|
5.11
|
%
|
|
6.28
|
%
|
|
5.70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total retail postpaid
|
2.63
|
%
|
|
2.09
|
%
|
|
2.15
|
%
|
|
2.18
|
%
|
|
2.09
|
%
|
|
2.22
|
%
|
Total retail prepaid
|
5.51
|
%
|
|
3.78
|
%
|
|
3.22
|
%
|
|
4.35
|
%
|
|
4.50
|
%
|
|
3.81
|
%
|
(1)
|
Churn is calculated by dividing net subscriber deactivations for the quarter by the sum of the average number of subscribers for each month in the quarter. For postpaid accounts comprising multiple subscribers, such as family plans and enterprise accounts, net deactivations are defined as deactivations in excess of subscriber activations in a particular account within 30 days. Postpaid and Prepaid churn consist of both voluntary churn, where the subscriber makes his or her own determination to cease being a subscriber, and involuntary churn, where the subscriber's service is terminated due to a lack of payment or other reasons.
|
(2)
|
Subscriber churn related to the acquisition of assets from U.S. Cellular and the Clearwire Acquisition.
|
|
Predecessor
|
|
|
Successor
|
|
Combined
(2)
|
|
Successor
|
||||||||||||||||||||||||
|
June 30,
2013 |
|
10 Days Ended
July 10, 2013
|
|
|
Sept 30,
2013 |
|
Sept 30,
2013 |
|
Dec 31,
2013 |
|
March 31,
2014 |
|
June 30,
2014 |
|
Sept 30,
2014 |
||||||||||||||||
ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sprint platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Postpaid
|
$
|
64.20
|
|
|
$
|
64.71
|
|
|
|
$
|
64.24
|
|
|
$
|
64.28
|
|
|
$
|
64.11
|
|
|
$
|
63.52
|
|
|
$
|
62.07
|
|
|
$
|
60.58
|
|
Prepaid
|
$
|
26.96
|
|
|
$
|
26.99
|
|
|
|
$
|
25.14
|
|
|
$
|
25.33
|
|
|
$
|
26.78
|
|
|
$
|
26.45
|
|
|
$
|
27.38
|
|
|
$
|
27.19
|
|
Nextel platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Postpaid
|
$
|
36.66
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Prepaid
|
$
|
34.48
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Transactions
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Postpaid
|
$
|
59.87
|
|
|
$
|
35.75
|
|
|
|
$
|
37.44
|
|
|
$
|
40.00
|
|
|
$
|
36.30
|
|
|
$
|
37.26
|
|
|
$
|
39.16
|
|
|
$
|
39.69
|
|
Prepaid
|
$
|
19.17
|
|
|
$
|
12.78
|
|
|
|
$
|
40.62
|
|
|
$
|
43.20
|
|
|
$
|
40.80
|
|
|
$
|
43.80
|
|
|
$
|
45.15
|
|
|
$
|
45.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total retail postpaid
|
$
|
63.59
|
|
|
$
|
64.55
|
|
|
|
$
|
63.48
|
|
|
$
|
63.69
|
|
|
$
|
63.44
|
|
|
$
|
62.98
|
|
|
$
|
61.65
|
|
|
$
|
60.24
|
|
Total retail prepaid
|
$
|
27.02
|
|
|
$
|
26.96
|
|
|
|
$
|
25.86
|
|
|
$
|
26.04
|
|
|
$
|
27.34
|
|
|
$
|
27.07
|
|
|
$
|
27.97
|
|
|
$
|
27.73
|
|
(1)
|
Subscriber ARPU related to the acquisition of assets from U.S. Cellular and the Clearwire Acquisition.
|
(2)
|
Combined ARPU for the quarterly period ending September 30, 2013 aggregates service revenue from the Predecessor 10-day period ended July 10, 2013 and the Successor three-month period ended September 30, 2013 divided by the sum of the monthly average subscribers during the three months ended September 30, 2013.
|
•
|
costs to operate and maintain our networks, including direct switch and cell site costs, such as rent, utilities, maintenance, labor costs associated with network employees, and spectrum frequency leasing costs;
|
•
|
interconnection costs-fixed interconnection costs, commonly referred to as backhaul costs, which consist of monthly flat-rate fees for facilities leased from local exchange carriers based on the number of cell sites and switches in service in a particular period and the related equipment installed at each site. Variable interconnection costs generally consist of per-minute use fees charged by other carriers for switching local calls, which fluctuate in relation to the level and duration of those terminating calls;
|
•
|
long distance costs paid to the Wireline segment;
|
•
|
costs to service and repair devices;
|
•
|
regulatory fees;
|
•
|
roaming fees paid to other carriers; and
|
•
|
fixed and variable costs relating to payments to third parties for the use of their proprietary data applications, such as messaging, music, TV and navigation services by our subscribers.
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
|
10 Days Ended
|
|
101 Days Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
September 30,
|
|
September 30,
|
|
|
July 10,
|
|
September 30,
|
||||||||||||||||||||||||
Wireline Segment Earnings
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||||
Voice
|
$
|
294
|
|
|
$
|
333
|
|
|
$
|
621
|
|
|
$
|
333
|
|
|
|
$
|
42
|
|
|
$
|
419
|
|
|
$
|
375
|
|
|
$
|
752
|
|
Data
|
53
|
|
|
57
|
|
|
109
|
|
|
57
|
|
|
|
7
|
|
|
94
|
|
|
64
|
|
|
151
|
|
||||||||
Internet
|
340
|
|
|
373
|
|
|
685
|
|
|
373
|
|
|
|
47
|
|
|
479
|
|
|
420
|
|
|
852
|
|
||||||||
Other
|
21
|
|
|
14
|
|
|
39
|
|
|
14
|
|
|
|
2
|
|
|
16
|
|
|
16
|
|
|
30
|
|
||||||||
Total net service revenue
|
708
|
|
|
777
|
|
|
1,454
|
|
|
777
|
|
|
|
98
|
|
|
1,008
|
|
|
875
|
|
|
1,785
|
|
||||||||
Cost of services and products
|
(593
|
)
|
|
(576
|
)
|
|
(1,219
|
)
|
|
(576
|
)
|
|
|
(72
|
)
|
|
(741
|
)
|
|
(648
|
)
|
|
(1,317
|
)
|
||||||||
Service gross margin
|
115
|
|
|
201
|
|
|
235
|
|
|
201
|
|
|
|
26
|
|
|
267
|
|
|
227
|
|
|
468
|
|
||||||||
Service gross margin percentage
|
16
|
%
|
|
26
|
%
|
|
16
|
%
|
|
26
|
%
|
|
|
27
|
%
|
|
26
|
%
|
|
26
|
%
|
|
26
|
%
|
||||||||
Selling, general and administrative expense
|
(88
|
)
|
|
(84
|
)
|
|
(173
|
)
|
|
(84
|
)
|
|
|
(11
|
)
|
|
(123
|
)
|
|
(95
|
)
|
|
(207
|
)
|
||||||||
Wireline segment earnings
|
$
|
27
|
|
|
$
|
117
|
|
|
$
|
62
|
|
|
$
|
117
|
|
|
|
$
|
15
|
|
|
$
|
144
|
|
|
$
|
132
|
|
|
$
|
261
|
|
|
Successor
|
|
|
Predecessor
|
|
Combined
|
||||||||||
|
Six Months Ended
|
|
|
101 Days Ended
|
|
Six Months Ended
|
||||||||||
|
September 30,
|
|
|
July 10,
|
|
September 30,
|
||||||||||
|
2014
|
|
2013
|
|
|
2013
|
|
2013
|
||||||||
|
(in millions)
|
|||||||||||||||
Net cash provided by operating activities
|
$
|
1,707
|
|
|
$
|
702
|
|
|
|
$
|
1,731
|
|
|
$
|
2,433
|
|
Net cash used in investing activities
|
$
|
(2,225
|
)
|
|
$
|
(19,407
|
)
|
|
|
$
|
(5,227
|
)
|
|
$
|
(24,634
|
)
|
Net cash (used in) provided by financing activities
|
$
|
(317
|
)
|
|
$
|
24,760
|
|
|
|
$
|
(251
|
)
|
|
$
|
24,509
|
|
•
|
projected revenues and expenses relating to our operations, including the impacts related to our installment billing program;
|
•
|
current availability of up to
$1.1 billion
in funding under the Receivables Facility, which terminates in May 2016 unless extended;
|
•
|
continued availability of a revolving bank credit facility in the amount of $3.3 billion, less any letters of credit, which expires in February 2018;
|
•
|
anticipated levels and timing of capital expenditures, including the capacity and upgrading of our networks and the deployment of new technologies in our networks, and FCC license acquisitions taking into consideration the 2.5 GHz spectrum acquired in the Clearwire Acquisition;
|
•
|
anticipated payments under the Report and Order, as supplemented;
|
•
|
any additional contributions we may make to our pension plan;
|
•
|
any scheduled principal payments; and
|
•
|
other future contractual obligations, including our network modernization plan, and general corporate expenditures.
|
|
|
Rating
|
||||||||
Rating Agency
|
|
Issuer Rating
|
|
Unsecured Notes
|
|
Guaranteed Notes
|
|
Bank Credit Facility
|
|
Outlook
|
Moody's
|
|
Ba3
|
|
B1
|
|
Ba2
|
|
Baa3
|
|
Stable
|
Standard and Poor's
|
|
BB-
|
|
BB-
|
|
BB+
|
|
BB+
|
|
Stable
|
Fitch
|
|
B+
|
|
B+
|
|
BB
|
|
BB
|
|
Stable
|
•
|
our ability to retain and attract subscribers and to manage credit risks associated with our subscribers;
|
•
|
the ability of our competitors to offer products and services at lower prices due to lower cost structures;
|
•
|
the effective implementation of our network modernization plans, including timing, execution, technologies, costs, and performance of our network;
|
•
|
our ability to operationalize the anticipated benefits from the SoftBank transaction;
|
•
|
our ability to comply with restrictions imposed by the U.S. Government as a precondition to our merger with SoftBank;
|
•
|
our ability to fully integrate the operations of Clearwire and access and utilize its spectrum;
|
•
|
the effects of vigorous competition on a highly penetrated market, including the impact of competition on the price we are able to charge subscribers for services and devices we provide and on the geographic areas served by Sprint's wireless network;
|
•
|
the impact of equipment net subsidy costs and leasing handsets; the impact of subscriber leasing decisions; the impact of increased purchase commitments; the overall demand for our service plans, including the impact of decisions of new or existing subscribers between our service offerings; and the impact of new, emerging and competing technologies on our business;
|
•
|
our ability to provide the desired mix of integrated services to our subscribers;
|
•
|
the ability to generate sufficient cash flow to fully implement our network modernization plans to improve and enhance our network and service plans, improve our operating margins, implement our business strategies and provide competitive new technologies;
|
•
|
our ability to continue to access our spectrum and any additional spectrum capacity;
|
•
|
changes in available technology and the effects of such changes, including product substitutions and deployment costs and performance;
|
•
|
our ability to obtain additional financing on terms acceptable to us, or at all;
|
•
|
volatility in the trading price of our common stock, current economic conditions and our ability to access capital;
|
•
|
the impact of various parties not meeting our business requirements, including a significant adverse change in the ability or willingness of such parties to provide products, including distribution, or infrastructure equipment for our networks;
|
•
|
the costs and business risks associated with providing new services and entering new geographic markets;
|
•
|
potential increase in subscriber churn, bad debt expense and write-offs related to any of our service plans or our installment billing plan;
|
•
|
the effects of any material impairment of our goodwill or other indefinite-lived intangible assets;
|
•
|
the effects of any future merger or acquisition involving us, as well as the effect of mergers, acquisitions and consolidations, and new entrants in the communications industry, and unexpected announcements or developments from us or others in the communications industry;
|
•
|
unexpected results of litigation filed against us or our suppliers or vendors;
|
•
|
the costs or potential customer impact of compliance with regulatory mandates including, but not limited to, compliance with the FCC's Report and Order to reconfigure the 800 MHz band and government regulation regarding "net neutrality";
|
•
|
equipment failure, natural disasters, terrorist acts or breaches of network or information technology security;
|
•
|
one or more of the markets in which we compete being impacted by changes in political, economic or other factors such as monetary policy, legal and regulatory changes, or other external factors over which we have no control;
|
•
|
the impact of being a "controlled company" exempt from many corporate governance requirements of the NYSE; and
|
•
|
other risks referenced from time to time in this report and other filings of ours with the SEC, including Part I, Item 1A. "Risk Factors" of our Transition Report on Form 10-K for the period ended March 31, 2014.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
SPRINT CORPORATION
(Registrant)
|
||
|
|
|
By
|
/s/ P
AUL
W. S
CHIEBER,
J
R.
|
|
|
|
Paul W. Schieber, Jr.
Vice President and Controller
(Principal Accounting Officer)
|
*
|
Filed or furnished, as required.
|
SECTION 1
|
INTRODUCTION .......................................................................................... 1
|
1.1
|
Statement of Plan ................................................................................................. 1
|
1.2
|
Definitions ............................................................................................................ 1
|
1.2.1
|
Account .................................................................................................... 1
|
1.2.2
|
Annual Valuation Date ............................................................................. 1
|
1.2.3
|
Base Salary ............................................................................................... 1
|
1.2.4
|
Beneficiary ............................................................................................... 1
|
1.2.5
|
Beneficiary Designation Form ................................................................. 2
|
1.2.6
|
Board Member ......................................................................................... 2
|
1.2.7
|
Change in Control .................................................................................... 2
|
1.2.8
|
Code ......................................................................................................... 2
|
1.2.9
|
Committee ................................................................................................ 2
|
1.2.10
|
Compensation
..............
............................................................................... 2
|
1.2.11
|
Disability, Disabled .................................................................................. 2
|
1.2.12
|
Distribution Date ...................................................................................... 2
|
1.2.13
|
Effective Date
...............
............................................................................... 2
|
1.2.14
|
Eligible Employee .....
............................................................................... 2
|
1.2.15
|
Embarq ..................................................................................................... 3
|
1.2.16
|
Embarq Share Unit ....
............................................................................... 3
|
1.2.17
|
Embarq Share Unit Fund .......................................................................... 3
|
1.2.18
|
ERISA
........................
................................................................................... 3
|
1.2.19
|
Initial Deferral Election Form
...
................................................................ 3
|
1.2.20
|
Investment Election Form .....
................................................................... 3
|
1.2.21
|
Investment Fund ........
............................................................................... 3
|
1.2.22
|
Limit ......................................................................................................... 3
|
1.2.23
|
401(k) plan ............................................................................................... 3
|
1.2.24
|
Matching Contribution ............................................................................. 3
|
1.2.25
|
Matching Contribution Account ............................................................... 3
|
1.2.26
|
Participant ................................................................................................. 3
|
1.2.27
|
Plan ........................................................................................................... 3
|
1.2.28
|
Plan Statement .......................................................................................... 4
|
1.2.29
|
Plan Year ................................................................................................... 4
|
1.2.30
|
Pre-Tax Contributions
.............................................................................. 4
|
1.2.31
|
Pre-Tax Contribution Account .................................................................. 4
|
1.2.32
|
Recapitalization Multiple .......................................................................... 4
|
1.2.33
|
Record Date ............................................................................................... 4
|
1.2.34
|
Separation and Distribution Agreement .................................................... 4
|
1.2.35
|
Separation From Service ........................................................................... 4
|
1.2.36
|
Specified Employee ................................................................................... 5
|
1.2.37
|
Sprint ......................................................................................................... 5
|
1.2.38
|
Sprint Share Unit ....................................................................................... 5
|
1.2.39
|
Sprint Share Unit Fund ............................................................................. 5
|
1.2.40
|
Subsequent Deferral Election Form .......................................................... 5
|
1.2.41
|
Valuation Date ........................................................................................... 5
|
1.3
|
Rules of Interpretation ........................................................................................... 5
|
1.4
|
Legal Construction ................................................................................................. 5
|
SECTION 2
|
PARTICIPATION
............................................................................................ 6
|
2.1
|
Participation ........................................................................................................... 6
|
2.2
|
Initial Deferral Election ......................................................................................... 6
|
2.2.1
|
Pre-Tax Contribution Election ................................................................... 6
|
2.2.2
|
Distribution Election
................................................................................ 7
|
2.3
|
Specific Exclusions ................................................................................................ 7
|
2.4
|
Suspension of Pre-Tax Contributions
.................................................................... 7
|
SECTION 3
|
ADJUSTMENT OF ACCOUNTS ................................................................... 7
|
3.1
|
Credits to Accounts ................................................................................................ 7
|
3.1.1
|
Pre-Tax Contributions
................................................................................ 7
|
3.1.2
|
Matching Contributions ............................................................................. 7
|
3.2
|
Adjustments of Account ........................................................................................ 8
|
3.2.1
|
Initial Election of Investment Funds ......................................................... 8
|
3.2.2
|
Changes to Investment Fund Elections ..................................................... 8
|
3.2.3
|
Proportionate Allocation ........................................................................... 8
|
3.2.4
|
Investment Funds ...................................................................................... 8
|
3.2.5
|
Embarq Share Units .................................................................................. 8
|
3.2.6
|
Debits and Credits to Accounts ................................................................. 9
|
3.3
|
No Actual Investment
.................
............................................................................. 9
|
3.4
|
FICA and Other Taxes
..............
............................................................................... 10
|
SECTION 4
|
VESTING OF ACCOUNT ............................................................................. 10
|
SECTION 5
|
DISTRIBUTION ............................................................................................ 10
|
5.1
|
General Valuation Date ........................................................................................ 10
|
5.2
|
General Distribution Date .................................................................................... 10
|
5.2.1
|
Time of Distribution of Pre-Tax Contributions .........
............................... 10
|
5.2.2
|
Time of Distribution of Matching Contributions ......
............................... 11
|
5.2.3
|
Acceleration of Benefits ........................................................................... 11
|
5.2.4
|
Delay for Specified Employees ................................................................ 11
|
5.3
|
Form of Distribution ............................................................................................. 11
|
5.3.1
|
Pre-Tax Contribution Account .................................................................. 11
|
5.3.2
|
Matching Contribution Account ............................................................... 12
|
5.3.3
|
Installment Amounts ................................................................................. 12
|
5.3.4
|
Delay for Taxes ......................................................................................... 12
|
5.4
|
Subsequent Changes in Time and Form of Payment ............................................ 12
|
5.5
|
Designation of Beneficiaries ................................................................................ 13
|
5.5.1
|
Right to Designate .................................................................................... 13
|
5.5.2
|
Failure of Designation
............................................................................. 13
|
5.5.3
|
Disclaimers by Beneficiaries ................................................................... 13
|
5.5.4
|
Definitions ............................................................................................... 14
|
5.5.5
|
Special Rules ........................................................................................... 14
|
5.5.6
|
No Spousal Rights ................................................................................... 15
|
5.6
|
Facility of Payment ............................................................................................. 15
|
SECTION 6
|
UNFUNDED PLAN ..................................................................................... 15
|
6.1
|
Unfunded Plan .................................................................................................... 15
|
6.2
|
Spendthrift Provision .......................................................................................... 16
|
SECTION 7
|
AMENDMENT AND TERMINATION ....................................................... 16
|
7.1
|
Amendment ......................................................................................................... 16
|
7.2
|
Termination ......................................................................................................... 16
|
7.2.1
|
Dissolution or Bankruptcy ....................................................................... 16
|
7.2.2
|
Discretionary Termination ....................................................................... 16
|
SECTION 8
|
DETERMINATIONS - RULES AND REGULATIONS
.............................. 17
|
8.1
|
Determinations .................................................................................................... 17
|
8.2
|
Rules and Regulations
.............
.............................................................................. 17
|
8.3
|
Method of Executing Instruments ....................................................................... 17
|
8.4
|
Claims Procedure ................................................................................................ 17
|
8.4.1
|
Initial Claim ............................................................................................ 17
|
8.4.2
|
Notice of Initial Adverse Determination ................................................. 17
|
8.4.3
|
Claims on Review ................................................................................... 18
|
8.4.4
|
Notice of Adverse Determination for Claim on Review ......................... 18
|
8.5
|
Claims and Review Procedure for Disability Claims Filed under the Plan ........ 19
|
8.6
|
Rules .................................................................................................................... 19
|
8.7
|
Information Furnished by Participants ................................................................ 20
|
SECTION 9
|
PLAN ADMINISTRATION .......................................................................... 20
|
9.1
|
Authority .............................................................................................................. 20
|
9.1.1
|
Majority Decisions ................................................................................... 21
|
9.2
|
Miscellaneous ....................................................................................................... 21
|
9.2.1
|
Conflict of Interest .................................................................................... 21
|
9.2.2
|
Dual Capacity ........................................................................................... 21
|
9.2.3
|
Administrator ............................................................................................ 21
|
9.2.4
|
Service of Process ..................................................................................... 21
|
9.2.5
|
Administrative Expenses .......................................................................... 22
|
SECTION 10
|
DISCLAIMERS ............................................................................................ 22
|
10.1
|
No Implied Employment Contract ...................................................................... 22
|
10.2
|
Source of Payment ................
....
........................................................................... 22
|
10.3
|
Delegation ........................................................................................................... 22
|
10.4
|
Prohibition on Acceleration of Payments ........................................................... 22
|
10.5
|
Code Section 409A ............................................................................................. 22
|
(a)
|
Effective as of the Distribution Date, each Participant with a hypothetical investment in the Sprint Share Unit Fund as of the Record Date shall be credited with Embarq Share Units equal in amount to (i) the number of Sprint Share Units credited to the Participant under the Sprint Share Unit Fund as of the Record Date, multiplied by (ii) the Recapitalization Multiple.
|
(b)
|
From time to time between the Distribution Date and December 31, 2006 (but subject to such rules as the Committee may from time to time prescribe), a Participant may elect to exchange all or a portion of the Participant's Embarq Share Units for investments in other Investment Funds. However, a Participant
|
(c)
|
Effective as of December 31, 2006, the Embarq Share Unit Fund shall cease to exist. As of such time, all Embarq Share Units credited thereunder shall be converted to Sprint Share Units based on the fair market value of such units, in the manner determined by the Committee in its discretion.
|
(a)
|
To the extent administratively feasible, any Account will be valued daily at the fair market value thereof by adding (i) the fair market value of all investments reflected in the Account, (ii) any accrued interest or declared dividends (as of the record date) on such hypothetical investments not reflected in (i) above, and (iii) an amount equal to the hypothetical cash reflected in the Account; and subtracting therefrom any liabilities of the Account. Participant's Accounts will be adjusted daily by allocating among them the earnings or losses of each Investment Fund since the previous day in proportion to each Participant's portion of the Investment Fund balance immediately following the previous day's adjustment. To the extent daily Account valuations and adjustments are not administratively feasible, such valuations and adjustments shall occur as frequently as administratively feasible.
|
(b)
|
Distributions shall be made in cash or cash equivalents and made pursuant to Section 5. The amount paid upon such a distribution shall be based on the value immediately after the adjustment of a Participant's Account on the effective date of the withdrawal or distribution.
|
(a)
|
Such Participant's Separation From Service; or
|
(b)
|
A specific future month or year, but not earlier than five (5) years from the effective date of such initial deferral election.
|
(a)
|
The Participant's death; or
|
(b)
|
The Participant’s Separation From Service if the total account value under the Plan as of such date is less than $20,000.
|
(c)
|
The Participant's Separation From Service within twelve (12) months after a Change in Control. Notwithstanding the foregoing, effective for Pre-Tax Contributions (and adjustments thereon under Section 3.2) pursuant to deferral elections under Section 2.2.1 made after August 29, 2013, provided a Participant has not elected otherwise in an Initial Deferral Election Form or Subsequent Deferral Election Form with respect to a distribution of such Pre-Tax Contributions (and adjustments thereon under Section 3.2) upon the Participant’s Separation From Service within 18 months after a Change in Control, the Participant’s Pre-Tax Contribution Account balance attributable to deferral elections under Section 2.2.1 made after August 29, 2013 shall be paid in a lump sum on the first Valuation Date following the Participant’s Separation From Service within 18 months after a Change in Control occurring after August 29, 2013.
|
5.3
|
Form of Distribution
.
|
(a)
|
Such election shall not be effective until twelve (12) months after it is filed with the Committee;
|
(b)
|
Such election shall require that the payment with respect to which the election is made shall be delayed for a period of not less than five (5) years from the date such payment would have been made absent such subsequent election; and
|
(c)
|
If the election relates to a delay in the payment of a Pre-Tax Contribution Account from a specific year and month previously elected by the Participant in his or her initial deferral election form or relates to a prior election of installment payments, such election cannot be made less than twelve (12) months before the date the payment was otherwise scheduled to be made or commence.
|
(a)
|
fails to designate a Beneficiary,
|
(b)
|
designates a Beneficiary and thereafter revokes such designation without naming another Beneficiary, or
|
(c)
|
designates one or more Beneficiaries and such Beneficiaries so designated fail to survive the Participant, such Participant's Account, or the part thereof as to which such Participant's designation fails, as the case may be, shall be payable to the first class of the following classes of automatic Beneficiaries with a member surviving the Participant and (except in the case of surviving issue) in equal shares if there is more than one member in such class surviving the Participant:
|
(a)
|
If there is not sufficient evidence that a Beneficiary was living at the time of the death of the Participant, it shall be deemed that the Beneficiary was not living at the time of the death of the Participant.
|
(b)
|
The automatic Beneficiaries specified in Section 5.5.2 and the Beneficiaries designated by the Participant shall become fixed at the time of the Participant's death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary hereunder, such remaining payments shall be payable to the representative of such Beneficiary's estate.
|
(c)
|
If the Participant designates as a Beneficiary the person who is the Participant's spouse on the date of the designation, either by name or by relationship, or both, the dissolution, annulment or other legal termination of the marriage between the Participant and such person shall automatically revoke such designation. The foregoing shall not prevent the Participant from designating a former spouse as a Beneficiary on a form executed by the Participant and received by the Committee after the date of the legal termination of the marriage between the Participant and such former spouse, and during the Participant's lifetime.
|
(d)
|
Any designation of a non-spouse Beneficiary by name that is accompanied by a description of relationship to the Participant shall be given effect without regard
|
(e)
|
Any designation of a Beneficiary only by statement of relationship to the Participant shall be effective only to designate the person or persons standing in such relationship to the Participant at the Participant's death.
|
(a)
|
to the duly appointed guardian, conservator or other legal representative of such Participant or Beneficiary, or
|
(b)
|
to a person or institution entrusted with the care or maintenance of the incompetent or disabled Participant or Beneficiary, provided such person or institution has satisfied the Committee that the payment will be used for the best interest and assist in the care of such Participant or Beneficiary, and provided further, that no prior claim for said payment has been made by a duly appointed guardian, conservator or other legal representative of such Participant or Beneficiary.
|
(a)
|
If the claim is denied in whole or in part, the BAC shall notify the claimant of the adverse benefit determination within ninety (90) days after receipt of the claim.
|
(b)
|
The ninety (90) day period for making the claim determination may be extended for ninety (90) days if the BAC determines that special circumstances required an extension of time for determination of the claim, provided that the BAC notifies the claimant, prior to the expiration of the initial ninety (90) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
|
(a)
|
the specific reasons for the adverse determination;
|
(b)
|
references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;
|
(c)
|
a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and
|
(d)
|
a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimant's right to bring a civil action against the Plan pursuant to Section 502(a) of ERISA.
|
(a)
|
The sixty (60) day period for deciding the claim on review may be extended for sixty (60) days if the BAC determines that special circumstances require an extension of time for determination of the claim, provided that the BAC notifies the claimant, prior to the expiration of the initial sixty (60) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
|
(b)
|
In the event that the time period is extended due to a claimant's failure to submit information necessary to decide a claim on review, the claimant shall have sixty (60) days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of sixty (60) days.
|
(c)
|
The BAC's review of a denied claim shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
|
(a)
|
the specific reasons for the denial;
|
(b)
|
references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;
|
(c)
|
a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to, the claimant's claim for benefits;
|
(d)
|
a statement describing any voluntary appeal procedures offered by the Plan and the claimant's right to obtain information about such procedures; and
|
(e)
|
a statement of the claimant's right to bring an action under ERISA Section 502(a).
|
(a)
|
No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the claims procedure. The BAC may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the BAC upon request.
|
(b)
|
All decisions on claims and on requests for a review of denied claims shall be made by the BAC unless delegated as provided for in the Plan Statement, in which case references in this Section 8 to the BAC shall be treated as references to the BAC's delegate.
|
(c)
|
The BAC may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.
|
(d)
|
The decision of the BAC on a claim and on a request for a review of denied claim may be provided to the claimant in electronic form instead of in writing at the discretion of the BAC.
|
(e)
|
A claimant may be represented by a lawyer or other authorized representative (at the claimant's own expense), but the BAC reserves the right to require the claimant to furnish written authorization. A claimant's representative shall be entitled to copies of all notices given to the claimant.
|
(f)
|
In connection with the review of a denied claim, the claimant or the claimant's representative shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits.
|
(g)
|
The time period within which a benefit determination will be made shall begin to run at the time a claim or request for review is filed in accordance with the claims procedures, without regard to whether all the information necessary to make a benefit determination accompanies the filing.
|
(h)
|
For the purposes of this Section, a document, record, or other information shall be considered "relevant" if such document, record, or other information: (i) was relied upon in making the benefit determination; (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; (iii) demonstrates compliance with the administrative processes and safeguards designed to ensure that the benefit claim determination was made in accordance with the governing plan documents and that, where appropriate, the Plan Statement provisions have been applied consistently with
|
(i)
|
The BAC may, in its discretion, rely on any applicable statute of limitation or deadline as a basis for denial of any claim.
|
(a)
|
establish rules for the functioning of the Committee, including the times and places for holding meetings, the notices to be given in respect of such meetings and the number of members who shall constitute a quorum for the transaction of business,
|
(b)
|
organize and delegate to such of its members as it shall select authority to execute or authenticate rules, advisory opinions or instructions, and other instruments adopted or authorized by the Committee; adopt such bylaws or regulations as it deems desirable for the conduct of its affairs; appoint a secretary, who need not be a member of the Committee, to keep its records and otherwise assist the Committee in the performance of its duties; keep a record of all its proceedings and acts and keep all books of accounts, records and other data as may be necessary for the proper administration of the Plan; notify Sprint of any action taken by the Committee and, when required, notify any other interested person or persons,
|
(c)
|
determine from the records of Sprint the Compensation, service records, status and other facts regarding Participants and other employees,
|
(d)
|
cause to be compiled at least annually, from the records of the Committee and the reports and accountings of any Trustee, a report or accounting of the status of the Plan and the Accounts of the Participants, and make it available to each Participant who shall have the right to examine that part of such report or accounting (or a true and correct copy of such part) which sets forth the Participant's benefits and ratable interest in the Plan,
|
(e)
|
prescribe forms to be used for applications for participation, benefits, notifications, etc., as may be required in the administration of the Plan,
|
(f)
|
set up such rules as are deemed necessary to carry out the terms of this Plan Statement,
|
(g)
|
resolve all questions of administration of the Plan not specifically referred to in this Section,
|
(h)
|
delegate or redelegate to one or more persons, jointly or severally, and whether or not such persons are members of the Committee or employees of Sprint, such functions assigned to the Committee hereunder as it may from time to time deem advisable, and
|
(i)
|
perform all other acts reasonably necessary for administering the Plan and carrying out the provisions of this Plan Statement and performing the duties imposed on it.
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||||||||||||||
|
Six Months Ended
September 30,
|
|
Six Months Ended
September 30,
|
|
Three Months Ended March 31,
|
|
Year Ended December 31,
|
|
|
101 days ended July 10,
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||||||||||
|
(in millions)
|
|||||||||||||||||||||||||||||||||||
Earnings (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
(Loss) income from continuing operations before income taxes
|
$
|
(686
|
)
|
|
$
|
(784
|
)
|
|
$
|
(95
|
)
|
|
$
|
(1,815
|
)
|
|
|
$
|
1,048
|
|
|
$
|
(4,172
|
)
|
|
$
|
(2,636
|
)
|
|
$
|
(3,299
|
)
|
|
$
|
(3,494
|
)
|
Equity in losses of unconsolidated investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
280
|
|
|
1,114
|
|
|
1,730
|
|
|
1,286
|
|
|
803
|
|
|||||||||
Fixed charges
|
1,478
|
|
|
619
|
|
|
747
|
|
|
1,367
|
|
|
|
894
|
|
|
2,365
|
|
|
2,068
|
|
|
2,081
|
|
|
2,047
|
|
|||||||||
Interest capitalized
|
(25
|
)
|
|
(14
|
)
|
|
(13
|
)
|
|
(30
|
)
|
|
|
(14
|
)
|
|
(278
|
)
|
|
(413
|
)
|
|
(13
|
)
|
|
(12
|
)
|
|||||||||
Amortization of interest capitalized
|
66
|
|
|
26
|
|
|
33
|
|
|
56
|
|
|
|
38
|
|
|
81
|
|
|
48
|
|
|
85
|
|
|
85
|
|
|||||||||
Earnings (loss), as adjusted
|
833
|
|
|
(153
|
)
|
|
672
|
|
|
(422
|
)
|
|
|
2,246
|
|
|
(890
|
)
|
|
797
|
|
|
140
|
|
|
(571
|
)
|
|||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest expense
|
1,022
|
|
|
416
|
|
|
516
|
|
|
918
|
|
|
|
703
|
|
|
1,428
|
|
|
1,011
|
|
|
1,464
|
|
|
1,450
|
|
|||||||||
Interest capitalized
|
25
|
|
|
14
|
|
|
13
|
|
|
30
|
|
|
|
14
|
|
|
278
|
|
|
413
|
|
|
13
|
|
|
12
|
|
|||||||||
Portion of rentals representative of interest
|
431
|
|
|
189
|
|
|
218
|
|
|
419
|
|
|
|
177
|
|
|
659
|
|
|
644
|
|
|
604
|
|
|
585
|
|
|||||||||
Fixed charges
|
1,478
|
|
|
619
|
|
|
747
|
|
|
1,367
|
|
|
|
894
|
|
|
2,365
|
|
|
2,068
|
|
|
2,081
|
|
|
2,047
|
|
|||||||||
Ratio of earnings to fixed charges
|
—
(1)
|
|
|
—
(2)
|
|
|
—
(3)
|
|
|
—
(4)
|
|
|
|
2.5
(5)
|
|
|
—
(6)
|
|
|
—
(7)
|
|
|
—
(8)
|
|
|
—
(9)
|
|
(1)
|
Successor earnings (loss), as adjusted were inadequate to cover fixed charges by $645 million for the six months ended September 30, 2014.
|
(2)
|
Successor earnings (loss), as adjusted were inadequate to cover fixed charges by $772 million for the six months ended September 30, 2013.
|
(3)
|
Successor earnings (loss), as adjusted were inadequate to cover fixed charges by $75 million for the three months ended March 31, 2014.
|
(4)
|
Successor earnings (loss), as adjusted were inadequate to cover fixed charges by $1.8 billion in the year ended 2013.
|
(5)
|
The income from continuing operations before income taxes for 101 days period ended July 10, 2013 included a pretax gain of $2.9 billion as a result of acquisition of our previously-held equity interest in Clearwire.
|
(6)
|
Predecessor earnings (loss), as adjusted were inadequate to cover fixed charges by $3.3 billion in the year ended 2012.
|
(7)
|
Predecessor earnings (loss), as adjusted were inadequate to cover fixed charges by $1.3 billion in the year ended
2011
.
|
(8)
|
Predecessor earnings (loss), as adjusted were inadequate to cover fixed charges by $1.9 billion in the year ended
2010
.
|
(9)
|
Predecessor earnings (loss), as adjusted were inadequate to cover fixed charges by $2.6 billion in the year ended
2009
.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sprint Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Marcelo Claure
|
Marcelo Claure
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sprint Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/Joseph J. Euteneuer
|
Joseph J. Euteneuer
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Marcelo Claure
|
Marcelo Claure
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Joseph J. Euteneuer
|
Joseph J. Euteneuer
|
Chief Financial Officer
|