|
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
|
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
o
|
Sprint Corporation Common Stock
|
4,079,316,764
|
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
December 31,
|
|
March 31,
|
||||
|
2018
|
|
2018
|
||||
|
(in millions, except share and
per share data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,191
|
|
|
$
|
6,610
|
|
Short-term investments
|
632
|
|
|
2,354
|
|
||
Accounts and notes receivable, net of allowance for doubtful accounts and deferred interest of $334 and $409, respectively
|
3,455
|
|
|
3,711
|
|
||
Device and accessory inventory
|
919
|
|
|
1,003
|
|
||
Prepaid expenses and other current assets
|
1,199
|
|
|
575
|
|
||
Total current assets
|
12,396
|
|
|
14,253
|
|
||
Property, plant and equipment, net
|
21,422
|
|
|
19,925
|
|
||
Costs to acquire a customer contract
|
1,497
|
|
|
—
|
|
||
Intangible assets
|
|
|
|
|
|||
Goodwill
|
6,598
|
|
|
6,586
|
|
||
FCC licenses and other
|
41,448
|
|
|
41,309
|
|
||
Definite-lived intangible assets, net
|
1,915
|
|
|
2,465
|
|
||
Other assets
|
1,128
|
|
|
921
|
|
||
Total assets
|
$
|
86,404
|
|
|
$
|
85,459
|
|
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
3,637
|
|
|
$
|
3,409
|
|
Accrued expenses and other current liabilities
|
3,467
|
|
|
3,962
|
|
||
Current portion of long-term debt, financing and capital lease obligations
|
3,596
|
|
|
3,429
|
|
||
Total current liabilities
|
10,700
|
|
|
10,800
|
|
||
Long-term debt, financing and capital lease obligations
|
36,288
|
|
|
37,463
|
|
||
Deferred tax liabilities
|
7,684
|
|
|
7,294
|
|
||
Other liabilities
|
3,403
|
|
|
3,483
|
|
||
Total liabilities
|
58,075
|
|
|
59,040
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, voting, par value $0.01 per share, 9.0 billion authorized, 4.079 billion and 4.005 billion issued, respectively
|
41
|
|
|
40
|
|
||
Paid-in capital
|
28,278
|
|
|
27,884
|
|
||
Treasury shares, at cost
|
(7
|
)
|
|
—
|
|
||
Retained earnings (accumulated deficit)
|
291
|
|
|
(1,255
|
)
|
||
Accumulated other comprehensive loss
|
(333
|
)
|
|
(313
|
)
|
||
Total stockholders' equity
|
28,270
|
|
|
26,356
|
|
||
Noncontrolling interests
|
59
|
|
|
63
|
|
||
Total equity
|
28,329
|
|
|
26,419
|
|
||
Total liabilities and equity
|
$
|
86,404
|
|
|
$
|
85,459
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Net operating revenues:
|
|
|
|
|
|
|
|
||||||||
Service
|
$
|
5,699
|
|
|
$
|
5,930
|
|
|
$
|
17,201
|
|
|
$
|
17,968
|
|
Equipment sales
|
1,589
|
|
|
1,262
|
|
|
4,180
|
|
|
3,443
|
|
||||
Equipment rentals
|
1,313
|
|
|
1,047
|
|
|
3,778
|
|
|
2,912
|
|
||||
|
8,601
|
|
|
8,239
|
|
|
25,159
|
|
|
24,323
|
|
||||
Net operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
1,648
|
|
|
1,733
|
|
|
5,019
|
|
|
5,140
|
|
||||
Cost of equipment sales
|
1,734
|
|
|
1,673
|
|
|
4,521
|
|
|
4,622
|
|
||||
Cost of equipment rentals (exclusive of depreciation below)
|
182
|
|
|
123
|
|
|
457
|
|
|
347
|
|
||||
Selling, general and administrative
|
2,003
|
|
|
2,108
|
|
|
5,731
|
|
|
6,059
|
|
||||
Depreciation - network and other
|
1,088
|
|
|
987
|
|
|
3,132
|
|
|
2,961
|
|
||||
Depreciation - equipment rentals
|
1,137
|
|
|
990
|
|
|
3,454
|
|
|
2,732
|
|
||||
Amortization
|
145
|
|
|
196
|
|
|
475
|
|
|
628
|
|
||||
Other, net
|
185
|
|
|
(298
|
)
|
|
298
|
|
|
(657
|
)
|
||||
|
8,122
|
|
|
7,512
|
|
|
23,087
|
|
|
21,832
|
|
||||
Operating income
|
479
|
|
|
727
|
|
|
2,072
|
|
|
2,491
|
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(664
|
)
|
|
(581
|
)
|
|
(1,934
|
)
|
|
(1,789
|
)
|
||||
Other income (expense), net
|
32
|
|
|
(42
|
)
|
|
153
|
|
|
(50
|
)
|
||||
|
(632
|
)
|
|
(623
|
)
|
|
(1,781
|
)
|
|
(1,839
|
)
|
||||
(Loss) income before income taxes
|
(153
|
)
|
|
104
|
|
|
291
|
|
|
652
|
|
||||
Income tax benefit (expense)
|
8
|
|
|
7,052
|
|
|
(56
|
)
|
|
6,662
|
|
||||
Net (loss) income
|
(145
|
)
|
|
7,156
|
|
|
235
|
|
|
7,314
|
|
||||
Less: Net loss (income) attributable to noncontrolling interests
|
4
|
|
|
6
|
|
|
(4
|
)
|
|
6
|
|
||||
Net (loss) income attributable to Sprint Corporation
|
$
|
(141
|
)
|
|
$
|
7,162
|
|
|
$
|
231
|
|
|
$
|
7,320
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income per common share attributable to Sprint Corporation
|
$
|
(0.03
|
)
|
|
$
|
1.79
|
|
|
$
|
0.06
|
|
|
$
|
1.83
|
|
Diluted net (loss) income per common share attributable to Sprint Corporation
|
$
|
(0.03
|
)
|
|
$
|
1.76
|
|
|
$
|
0.06
|
|
|
$
|
1.79
|
|
Basic weighted average common shares outstanding
|
4,078
|
|
|
4,001
|
|
|
4,050
|
|
|
3,998
|
|
||||
Diluted weighted average common shares outstanding
|
4,078
|
|
|
4,061
|
|
|
4,110
|
|
|
4,080
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding (losses) gains on securities and other
|
$
|
(2
|
)
|
|
$
|
7
|
|
|
$
|
(9
|
)
|
|
$
|
25
|
|
Net unrealized holding (losses) gains on derivatives
|
(25
|
)
|
|
19
|
|
|
(8
|
)
|
|
12
|
|
||||
Net unrecognized net periodic pension and other postretirement benefits
|
2
|
|
|
—
|
|
|
5
|
|
|
1
|
|
||||
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Other comprehensive (loss) income
|
(25
|
)
|
|
26
|
|
|
(20
|
)
|
|
38
|
|
||||
Comprehensive (loss) income
|
$
|
(170
|
)
|
|
$
|
7,182
|
|
|
$
|
215
|
|
|
$
|
7,352
|
|
|
Nine Months Ended
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
235
|
|
|
$
|
7,314
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
7,061
|
|
|
6,321
|
|
||
Provision for losses on accounts receivable
|
278
|
|
|
312
|
|
||
Share-based and long-term incentive compensation expense
|
101
|
|
|
137
|
|
||
Deferred income tax expense (benefit)
|
25
|
|
|
(6,707
|
)
|
||
Gains from asset dispositions and exchanges
|
—
|
|
|
(479
|
)
|
||
Loss on early extinguishment of debt
|
—
|
|
|
65
|
|
||
Amortization of long-term debt premiums, net
|
(94
|
)
|
|
(125
|
)
|
||
Loss on disposal of property, plant and equipment
|
642
|
|
|
533
|
|
||
Deferred purchase price from sale of receivables
|
(223
|
)
|
|
(909
|
)
|
||
Other changes in assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable
|
65
|
|
|
(74
|
)
|
||
Inventories and other current assets
|
248
|
|
|
570
|
|
||
Accounts payable and other current liabilities
|
(530
|
)
|
|
(104
|
)
|
||
Non-current assets and liabilities, net
|
(601
|
)
|
|
260
|
|
||
Other, net
|
375
|
|
|
295
|
|
||
Net cash provided by operating activities
|
7,582
|
|
|
7,409
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures - network and other
|
(3,814
|
)
|
|
(2,539
|
)
|
||
Capital expenditures - leased devices
|
(5,739
|
)
|
|
(5,533
|
)
|
||
Expenditures relating to FCC licenses
|
(145
|
)
|
|
(92
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
6,619
|
|
|
7,113
|
|
||
Purchases of short-term investments
|
(5,152
|
)
|
|
(1,842
|
)
|
||
Proceeds from sales of assets and FCC licenses
|
416
|
|
|
367
|
|
||
Proceeds from deferred purchase price from sale of receivables
|
223
|
|
|
909
|
|
||
Proceeds from corporate owned life insurance policies
|
110
|
|
|
2
|
|
||
Other, net
|
52
|
|
|
(1
|
)
|
||
Net cash used in investing activities
|
(7,430
|
)
|
|
(1,616
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from debt and financings
|
6,416
|
|
|
3,073
|
|
||
Repayments of debt, financing and capital lease obligations
|
(6,937
|
)
|
|
(7,159
|
)
|
||
Debt financing costs
|
(286
|
)
|
|
(19
|
)
|
||
Call premiums paid on debt redemptions
|
—
|
|
|
(129
|
)
|
||
Proceeds from issuance of common stock, net
|
281
|
|
|
12
|
|
||
Other, net
|
—
|
|
|
(18
|
)
|
||
Net cash used in financing activities
|
(526
|
)
|
|
(4,240
|
)
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(374
|
)
|
|
1,553
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
6,659
|
|
|
2,942
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
6,285
|
|
|
$
|
4,495
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Paid-in
Capital
|
|
Treasury Shares
|
|
(Accumulated
Deficit) Retained Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
Shares
|
|
Amount
|
|||||||||||||||||||||||||||
Balance, March 31, 2018
|
4,005
|
|
|
$
|
40
|
|
|
$
|
27,884
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,255
|
)
|
|
$
|
(313
|
)
|
|
$
|
63
|
|
|
$
|
26,419
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
176
|
|
|
|
|
(3
|
)
|
|
173
|
|
|||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
4
|
|
||||||||||||||
Issuance of common stock, net
|
8
|
|
|
|
|
2
|
|
|
1
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
(2
|
)
|
|||||||||||
Share-based compensation expense
|
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
||||||||||||||
Capital contribution by SoftBank
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
||||||||||||||
Cumulative effect of accounting changes
|
|
|
|
|
|
|
|
|
|
|
1,315
|
|
|
(8
|
)
|
|
|
|
1,307
|
|
|||||||||||||
Other, net
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
||||||||||||||
Increase (decrease) attributable to noncontrolling interests
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
—
|
|
|||||||||||||
Balance, June 30, 2018
|
4,013
|
|
|
40
|
|
|
27,938
|
|
|
1
|
|
|
(4
|
)
|
|
236
|
|
|
(317
|
)
|
|
52
|
|
|
27,945
|
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
196
|
|
|
|
|
11
|
|
|
207
|
|
|||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
9
|
|
||||||||||||||
Issuance of common stock, net
|
66
|
|
|
1
|
|
|
288
|
|
|
1
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
278
|
|
||||||||||
Share-based compensation expense
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
||||||||||||||
Capital contribution by SoftBank
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
||||||||||||||
Other, net
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
||||||||||||||
Balance, September 30, 2018
|
4,079
|
|
|
41
|
|
|
28,251
|
|
|
2
|
|
|
(15
|
)
|
|
432
|
|
|
(308
|
)
|
|
63
|
|
|
28,464
|
|
|||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
(141
|
)
|
|
|
|
(4
|
)
|
|
(145
|
)
|
|||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
(25
|
)
|
|
|
|
(25
|
)
|
||||||||||||||
Issuance of common stock, net
|
|
|
|
|
(3
|
)
|
|
(1
|
)
|
|
8
|
|
|
|
|
|
|
|
|
5
|
|
||||||||||||
Share-based compensation expense
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
34
|
|
||||||||||||||
Other, net
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
||||||||||||||
Balance, December 31, 2018
|
4,079
|
|
|
$
|
41
|
|
|
$
|
28,278
|
|
|
1
|
|
|
$
|
(7
|
)
|
|
$
|
291
|
|
|
$
|
(333
|
)
|
|
$
|
59
|
|
|
$
|
28,329
|
|
|
Nine Months Ended December 31, 2017
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Paid-in
Capital
|
|
Treasury Shares
|
|
(Accumulated
Deficit) Retained Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
Shares
|
|
Amount
|
|||||||||||||||||||||||||||
Balance, March 31, 2017
|
3,989
|
|
|
$
|
40
|
|
|
$
|
27,756
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,584
|
)
|
|
$
|
(404
|
)
|
|
$
|
—
|
|
|
$
|
18,808
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
206
|
|
|
|
|
|
|
206
|
|
||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
(4
|
)
|
||||||||||||||
Issuance of common stock, net
|
7
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|||||||||||||
Share-based compensation expense
|
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
||||||||||||||
Capital contribution by SoftBank
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
||||||||||||||
Other, net
|
|
|
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(46
|
)
|
||||||||||||||
Balance, June 30, 2017
|
3,996
|
|
|
40
|
|
|
27,761
|
|
|
—
|
|
|
—
|
|
|
(8,378
|
)
|
|
(408
|
)
|
|
—
|
|
|
19,015
|
|
|||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
(48
|
)
|
|
|
|
|
|
(48
|
)
|
||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
16
|
|
||||||||||||||
Issuance of common stock, net
|
4
|
|
|
|
|
1
|
|
|
1
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
(8
|
)
|
|||||||||||
Share-based compensation expense
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
47
|
|
||||||||||||||
Capital contribution by SoftBank
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
||||||||||||||
Other, net
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
||||||||||||||
Balance, September 30, 2017
|
4,000
|
|
|
40
|
|
|
27,807
|
|
|
1
|
|
|
(9
|
)
|
|
(8,426
|
)
|
|
(392
|
)
|
|
—
|
|
|
19,020
|
|
|||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
7,162
|
|
|
|
|
(6
|
)
|
|
7,156
|
|
|||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
26
|
|
|
|
|
26
|
|
||||||||||||||
Issuance of common stock, net
|
2
|
|
|
|
|
2
|
|
|
(1
|
)
|
|
9
|
|
|
|
|
|
|
|
|
11
|
|
|||||||||||
Share-based compensation expense
|
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
||||||||||||||
Other, net
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
||||||||||||||
(Decrease) increase attributable to noncontrolling interests
|
|
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
76
|
|
|
48
|
|
|||||||||||||
Balance, December 31, 2017
|
4,002
|
|
|
$
|
40
|
|
|
$
|
27,825
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,264
|
)
|
|
$
|
(366
|
)
|
|
$
|
70
|
|
|
$
|
26,305
|
|
|
|
Page
Reference
|
1.
|
||
|
|
|
2.
|
||
|
|
|
3.
|
||
|
|
|
4.
|
||
|
|
|
5.
|
||
|
|
|
6.
|
||
|
|
|
7
|
||
|
|
|
8.
|
||
|
|
|
9.
|
||
|
|
|
10.
|
||
|
|
|
11.
|
||
|
|
|
12.
|
||
|
|
|
13.
|
||
|
|
|
14.
|
||
|
|
|
15.
|
||
|
|
|
16.
|
||
|
|
|
Note 1.
|
Basis of Presentation and Other Information
|
Note 2.
|
New Accounting Pronouncements
|
|
Three Months Ended December 31, 2018
|
|
Nine Months Ended December 31, 2018
|
||||||||||||||||||||
|
As reported
|
|
Balances without adoption of
Topic 606
|
|
Change
|
|
As reported
|
|
Balances without adoption of
Topic 606 |
|
Change
|
||||||||||||
|
(in millions, except per share amounts)
|
|
(in millions, except per share amounts)
|
||||||||||||||||||||
Net operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service
|
$
|
5,699
|
|
|
$
|
5,898
|
|
|
$
|
(199
|
)
|
|
$
|
17,201
|
|
|
$
|
17,716
|
|
|
$
|
(515
|
)
|
Equipment sales
|
1,589
|
|
|
1,264
|
|
|
325
|
|
|
4,180
|
|
|
3,223
|
|
|
957
|
|
||||||
Equipment rentals
|
1,313
|
|
|
1,329
|
|
|
(16
|
)
|
|
3,778
|
|
|
3,827
|
|
|
(49
|
)
|
||||||
|
8,601
|
|
|
8,491
|
|
|
110
|
|
|
25,159
|
|
|
24,766
|
|
|
393
|
|
||||||
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
1,648
|
|
|
1,671
|
|
|
(23
|
)
|
|
5,019
|
|
|
5,073
|
|
|
(54
|
)
|
||||||
Cost of equipment sales
|
1,734
|
|
|
1,715
|
|
|
19
|
|
|
4,521
|
|
|
4,431
|
|
|
90
|
|
||||||
Cost of equipment rentals (exclusive of depreciation below)
|
182
|
|
|
182
|
|
|
—
|
|
|
457
|
|
|
457
|
|
|
—
|
|
||||||
Selling, general and administrative
|
2,003
|
|
|
2,145
|
|
|
(142
|
)
|
|
5,731
|
|
|
6,047
|
|
|
(316
|
)
|
||||||
Depreciation - network and other
|
1,088
|
|
|
1,088
|
|
|
—
|
|
|
3,132
|
|
|
3,132
|
|
|
—
|
|
||||||
Depreciation - equipment rentals
|
1,137
|
|
|
1,137
|
|
|
—
|
|
|
3,454
|
|
|
3,454
|
|
|
—
|
|
||||||
Amortization
|
145
|
|
|
145
|
|
|
—
|
|
|
475
|
|
|
475
|
|
|
—
|
|
||||||
Other, net
|
185
|
|
|
185
|
|
|
—
|
|
|
298
|
|
|
298
|
|
|
—
|
|
||||||
|
8,122
|
|
|
8,268
|
|
|
(146
|
)
|
|
23,087
|
|
|
23,367
|
|
|
(280
|
)
|
||||||
Operating income
|
479
|
|
|
223
|
|
|
256
|
|
|
2,072
|
|
|
1,399
|
|
|
673
|
|
||||||
Total other expense
|
(632
|
)
|
|
(632
|
)
|
|
—
|
|
|
(1,781
|
)
|
|
(1,781
|
)
|
|
—
|
|
||||||
(Loss) income before income taxes
|
(153
|
)
|
|
(409
|
)
|
|
256
|
|
|
291
|
|
|
(382
|
)
|
|
673
|
|
||||||
Income tax benefit (expense)
|
8
|
|
|
62
|
|
|
(54
|
)
|
|
(56
|
)
|
|
85
|
|
|
(141
|
)
|
||||||
Net (loss) income
|
(145
|
)
|
|
(347
|
)
|
|
202
|
|
|
235
|
|
|
(297
|
)
|
|
532
|
|
||||||
Less: Net loss (income) attributable to noncontrolling interests
|
4
|
|
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
||||||
Net (loss) income attributable to Sprint
|
$
|
(141
|
)
|
|
$
|
(343
|
)
|
|
$
|
202
|
|
|
$
|
231
|
|
|
$
|
(301
|
)
|
|
$
|
532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic net (loss) income per common share attributable to Sprint
|
$
|
(0.03
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.13
|
|
Diluted net (loss) income per common share attributable to Sprint
|
$
|
(0.03
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.13
|
|
Basic weighted average common shares outstanding
|
4,078
|
|
|
4,078
|
|
|
—
|
|
|
4,050
|
|
|
4,050
|
|
|
—
|
|
||||||
Diluted weighted average common shares outstanding
|
4,078
|
|
|
4,078
|
|
|
—
|
|
|
4,110
|
|
|
4,050
|
|
|
60
|
|
•
|
Consideration paid to customers or on behalf of customers is included as a reduction of the total transaction price of customer contracts, resulting in a contract asset that is amortized to service revenue over the term of the contract. As a result, the income statement impact reflects an increase in equipment sales offset by a reduction in wireless service revenue. Under the previous standard, this consideration paid to customers or on behalf of customers was recognized as a reduction to revenue or as selling, general and administrative expense.
|
•
|
Costs to acquire a customer contract or for a contract renewal are now capitalized and amortized to selling, general and administrative expenses over the expected customer relationship period or length of the service contract, respectively. Under the previous standard, these commission costs were expensed as incurred.
|
•
|
Deferred tax liabilities were increased for temporary differences established upon adoption of Topic 606, primarily attributable to costs to acquire a customer contract. For income tax purposes, these commission costs will continue to be expensed as incurred.
|
Note 3.
|
Installment Receivables
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
|
(in millions)
|
||||||
Installment receivables, gross
|
$
|
1,151
|
|
|
$
|
1,472
|
|
Deferred interest
|
(62
|
)
|
|
(106
|
)
|
||
Installment receivables, net of deferred interest
|
1,089
|
|
|
1,366
|
|
||
Allowance for credit losses
|
(195
|
)
|
|
(217
|
)
|
||
Installment receivables, net
|
$
|
894
|
|
|
$
|
1,149
|
|
|
|
|
|
||||
Classified in the consolidated balance sheets as:
|
|
|
|
||||
Accounts and notes receivable, net
|
$
|
675
|
|
|
$
|
995
|
|
Other assets
|
219
|
|
|
154
|
|
||
Installment receivables, net
|
$
|
894
|
|
|
$
|
1,149
|
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||||||||||||||||
|
Prime
|
|
Subprime
|
|
Total
|
|
Prime
|
|
Subprime
|
|
Total
|
||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||
Unbilled
|
$
|
661
|
|
|
$
|
396
|
|
|
$
|
1,057
|
|
|
$
|
951
|
|
|
$
|
391
|
|
|
$
|
1,342
|
|
Billed - current
|
48
|
|
|
23
|
|
|
71
|
|
|
69
|
|
|
29
|
|
|
98
|
|
||||||
Billed - past due
|
12
|
|
|
11
|
|
|
23
|
|
|
17
|
|
|
15
|
|
|
32
|
|
||||||
Installment receivables, gross
|
$
|
721
|
|
|
$
|
430
|
|
|
$
|
1,151
|
|
|
$
|
1,037
|
|
|
$
|
435
|
|
|
$
|
1,472
|
|
|
Nine Months Ended
|
|
Twelve Months Ended
|
||||
|
December 31, 2018
|
|
March 31, 2018
|
||||
|
(in millions)
|
||||||
Deferred interest and allowance for credit losses, beginning of period
|
$
|
323
|
|
|
$
|
506
|
|
Adjustment to deferred interest on short- and long-term installment receivables due to Topic 606
|
(50
|
)
|
|
—
|
|
||
Bad debt expense
|
66
|
|
|
142
|
|
||
Write-offs, net of recoveries
|
(88
|
)
|
|
(224
|
)
|
||
Change in deferred interest on short- and long-term installment receivables
|
6
|
|
|
(101
|
)
|
||
Deferred interest and allowance for credit losses, end of period
|
$
|
257
|
|
|
$
|
323
|
|
Note 4.
|
Financial Instruments
|
|
Carrying amount at December 31, 2018
|
|
Estimated Fair Value Using Input Type
|
||||||||||||||||
|
|
Quoted prices in active markets
|
|
Observable
|
|
Unobservable
|
|
Total estimated fair value
|
|||||||||||
|
(in millions)
|
||||||||||||||||||
Current and long-term debt and financing obligations
|
$
|
40,125
|
|
|
$
|
35,756
|
|
|
$
|
—
|
|
|
$
|
4,570
|
|
|
$
|
40,326
|
|
|
Carrying amount at March 31, 2018
|
|
Estimated Fair Value Using Input Type
|
||||||||||||||||
|
|
Quoted prices in active markets
|
|
Observable
|
|
Unobservable
|
|
Total estimated fair value
|
|||||||||||
|
(in millions)
|
||||||||||||||||||
Current and long-term debt and financing obligations
|
$
|
40,820
|
|
|
$
|
37,549
|
|
|
$
|
—
|
|
|
$
|
3,737
|
|
|
$
|
41,286
|
|
Note 5.
|
Property, Plant and Equipment
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
|
(in millions)
|
||||||
Land
|
$
|
247
|
|
|
$
|
254
|
|
Network equipment, site costs and related software
|
24,015
|
|
|
22,930
|
|
||
Buildings and improvements
|
833
|
|
|
813
|
|
||
Leased devices, non-network internal use software, office equipment and other
|
12,612
|
|
|
11,149
|
|
||
Construction in progress
|
3,520
|
|
|
2,202
|
|
||
Less: accumulated depreciation
|
(19,805
|
)
|
|
(17,423
|
)
|
||
Property, plant and equipment, net
|
$
|
21,422
|
|
|
$
|
19,925
|
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
|
(in millions)
|
||||||
Leased devices
|
$
|
10,987
|
|
|
$
|
9,592
|
|
Less: accumulated depreciation
|
(4,304
|
)
|
|
(3,580
|
)
|
||
Leased devices, net
|
$
|
6,683
|
|
|
$
|
6,012
|
|
Note 6.
|
Intangible Assets
|
|
March 31,
2018 |
|
Net
Additions
|
|
December 31,
2018 |
||||||
|
(in millions)
|
||||||||||
FCC licenses
|
$
|
37,274
|
|
|
$
|
139
|
|
|
$
|
37,413
|
|
Trademarks
|
4,035
|
|
|
—
|
|
|
4,035
|
|
|||
Goodwill
(1)
|
6,586
|
|
|
12
|
|
|
6,598
|
|
|||
|
$
|
47,895
|
|
|
$
|
151
|
|
|
$
|
48,046
|
|
(1)
|
Through
December 31, 2018
, there is
no
accumulated impairment losses for goodwill.
|
|
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||||||||||||||||
|
Useful Lives
|
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
Customer relationships
|
5 to 8 years
|
|
$
|
6,563
|
|
|
$
|
(5,906
|
)
|
|
$
|
657
|
|
|
$
|
6,562
|
|
|
$
|
(5,462
|
)
|
|
$
|
1,100
|
|
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Favorable spectrum leases
|
23 years
|
|
764
|
|
|
(142
|
)
|
|
622
|
|
|
856
|
|
|
(172
|
)
|
|
684
|
|
||||||
Favorable tower leases
|
9 years
|
|
335
|
|
|
(207
|
)
|
|
128
|
|
|
335
|
|
|
(179
|
)
|
|
156
|
|
||||||
Trademarks
|
2 to 34 years
|
|
520
|
|
|
(86
|
)
|
|
434
|
|
|
520
|
|
|
(74
|
)
|
|
446
|
|
||||||
Other
|
5 to 10 years
|
|
135
|
|
|
(61
|
)
|
|
74
|
|
|
129
|
|
|
(50
|
)
|
|
79
|
|
||||||
Total other intangible assets
|
|
1,754
|
|
|
(496
|
)
|
|
1,258
|
|
|
1,840
|
|
|
(475
|
)
|
|
1,365
|
|
|||||||
Total definite-lived intangible assets
|
|
$
|
8,317
|
|
|
$
|
(6,402
|
)
|
|
$
|
1,915
|
|
|
$
|
8,402
|
|
|
$
|
(5,937
|
)
|
|
$
|
2,465
|
|
Note 7.
|
Long-Term Debt, Financing and Capital Lease Obligations
|
|
Interest Rates
|
|
Maturities
|
|
December 31,
2018 |
|
March 31,
2018 |
||||||||
|
|
|
|
|
|
|
|
|
(in millions)
|
||||||
Notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Senior notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Corporation
|
7.13
|
-
|
7.88%
|
|
2021
|
-
|
2026
|
|
$
|
12,000
|
|
|
$
|
12,000
|
|
Sprint Communications, Inc.
|
6.00
|
-
|
11.50%
|
|
2020
|
-
|
2022
|
|
4,780
|
|
|
4,980
|
|
||
Sprint Capital Corporation
|
6.88
|
-
|
8.75%
|
|
2019
|
-
|
2032
|
|
6,204
|
|
|
6,204
|
|
||
Senior secured notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Spectrum Co LLC, Sprint Spectrum Co II LLC, Sprint Spectrum Co III LLC
|
3.36
|
-
|
5.15%
|
|
2021
|
-
|
2028
|
|
6,344
|
|
|
7,000
|
|
||
Guaranteed notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Communications, Inc.
|
7.00
|
|
2020
|
|
1,000
|
|
|
2,753
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Secured revolving bank credit facility
|
4.81%
|
|
2021
|
|
—
|
|
|
—
|
|
||||||
Secured term loans
|
5.06%
|
-
|
5.56%
|
|
2024
|
|
5,030
|
|
|
3,960
|
|
||||
PRWireless term loan
|
8.05%
|
|
2020
|
|
187
|
|
|
182
|
|
||||||
Export Development Canada (EDC)
|
4.77%
|
|
2019
|
|
300
|
|
|
300
|
|
||||||
Secured equipment credit facilities
|
4.02
|
-
|
4.85%
|
|
2020
|
-
|
2022
|
|
515
|
|
|
527
|
|
||
Accounts receivable facility
|
3.60
|
-
|
3.81%
|
|
2020
|
|
3,324
|
|
|
2,411
|
|
||||
Financing obligations, capital lease and other obligations
|
2.35
|
-
|
12.00%
|
|
2019
|
-
|
2026
|
|
588
|
|
|
686
|
|
||
Net premiums and debt financing costs
|
|
|
|
|
|
|
|
|
(388
|
)
|
|
(111
|
)
|
||
|
|
|
|
|
|
|
|
|
39,884
|
|
|
40,892
|
|
||
Less current portion
|
|
|
|
|
|
|
|
|
(3,596
|
)
|
|
(3,429
|
)
|
||
Long-term debt, financing and capital lease obligations
|
|
|
|
|
|
|
|
|
$
|
36,288
|
|
|
$
|
37,463
|
|
Note 8.
|
Revenues from Contracts with Customers
|
•
|
Determination of transaction price - we include any fixed and determinable charges per our contracts as part of the total transaction price. To the extent that variable consideration is not constrained, we include a probability-weighted estimate of the variable amount within the total transaction price and update our assumptions over the duration of the contract. We do not accept non-cash consideration from our customers as direct payment for the purchase of equipment at contract inception or for the purchase of ongoing services. Subject to certain restrictions, we may purchase used equipment from customers entering into a new subscriber contract. Our payment for the purchase of this used equipment may not equal its market value. In those circumstances, the expected difference between the purchase price and the market value of the used equipment is treated as an adjustment to the total transaction price of the customer's contract at contract inception.
|
•
|
Assessment of estimates of variable consideration - our Wireless contracts generally do not involve variable consideration which must be allocated amongst performance obligations at contract inception, other than expected adjustments to the total transaction price related to (a) customer equipment rebates; (b) customer retention credits; and (c) product returns and service refunds, all of which we are able to reasonably estimate at contract inception based upon historical experience with similar or identical contracts and similar or identical customers. Our Wireline contracts are generally not subject to significant amounts of variable consideration. We do not consider any of our variable consideration to be constrained for the purpose of estimating the total transaction price to be allocated to our performance obligations.
|
•
|
Allocation of transaction price - we allocate the total transaction price in our contracts amongst performance obligations based upon the relative standalone selling prices of those performance obligations. We use observable external pricing of performance obligations when sold on a standalone basis as evidence of standalone selling prices. Discounts and premiums built into our transaction prices are typically allocated proportionately to all performance obligations within the contracts, exclusive of performance obligations for the delivery of accessories, which are consistently sold at a standalone selling price regardless of bundling, and with the exception of estimated Wireless customer retention credits, which are treated as a reduction in the portion of the total transaction price allocated to service revenue.
|
•
|
Measurement of returns, refunds, and other similar obligations are estimated separately for separate product and service types based upon historical experience with similar contracts and similar types of customers. The total transaction price is reduced by the amount estimated as a return, refund, or other similar obligation in relation to the sale. This amount is recorded as a current liability, unless and until our estimates have changed or the relevant obligation has been satisfied.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
December 31, 2018
|
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
Service revenue
|
|
|
|
||||
Postpaid
|
$
|
4,236
|
|
|
$
|
12,679
|
|
Prepaid
|
924
|
|
|
2,860
|
|
||
Wholesale, affiliate and other
|
294
|
|
|
881
|
|
||
Wireline
|
245
|
|
|
781
|
|
||
Total service revenue
|
5,699
|
|
|
17,201
|
|
||
Equipment sales
|
1,589
|
|
|
4,180
|
|
||
Equipment rentals
|
1,313
|
|
|
3,778
|
|
||
Total revenue
|
$
|
8,601
|
|
|
$
|
25,159
|
|
|
December 31,
|
|
April 1,
|
||||
|
2018
|
|
2018
|
||||
|
(in millions)
|
||||||
Contract assets and liabilities
|
|
|
|
||||
Contract assets
(1)
|
$
|
806
|
|
|
$
|
432
|
|
Billed trade receivables
|
2,591
|
|
|
2,559
|
|
||
Unbilled trade receivables
|
918
|
|
|
1,250
|
|
||
Contract liabilities
(2)
|
1,011
|
|
|
1,104
|
|
||
|
|
|
|
|
|||
Other related assets and liabilities
|
|
|
|
||||
Other related assets:
|
|
|
|
||||
Capitalized costs to acquire a customer contract:
|
|
|
|
||||
Sales commissions - opening balance
|
$
|
1,219
|
|
|
|
||
Sales commissions - additions
|
874
|
|
|
|
|||
Amortization of capitalized sales commissions
|
(596
|
)
|
|
|
|||
Net costs to acquire a customer contract
|
$
|
1,497
|
|
|
|
(1)
|
The fluctuation correlates directly to the execution of new customer contracts and invoicing and collections from customers in the normal course of business.
|
(2)
|
Revenue recognized during the
nine-month period ended
December 31, 2018
, which was included within the beginning contract liability balance, amounts to
$986 million
.
|
|
|
||
Remainder of year ending March 31, 2019
|
$
|
2,898
|
|
Year ending March 31, 2020
|
6,558
|
|
|
Thereafter
|
319
|
|
|
Total
|
$
|
9,775
|
|
•
|
The amounts disclosed above do not include revenue allocated to wholly or partially unsatisfied performance obligations for which the accounting contract duration at contract inception is less than 12 months, which includes expected revenues from traditional installment billing contracts with a one-month accounting contract duration.
|
•
|
The amounts disclosed above do not include variable consideration resulting from monthly customer charges intended to partially recover taxes imposed on the Company, including fees related to the Universal Service Fund. Such fees are based on the customer's estimated monthly voice usage and are therefore allocated to corresponding distinct months of Wireless services.
|
•
|
The amounts disclosed above do not include variable consideration resulting from monthly charges to Wireless wholesale customers. Such fees are based on the customer's monthly usage of capacity and are therefore allocated to corresponding distinct months of Wireless services.
|
Note 9.
|
Severance and Exit Costs
|
|
March 31,
2018 |
|
Net Expense
|
|
Cash Payments
and Other
|
|
December 31,
2018 |
||||||||
|
(in millions)
|
||||||||||||||
Lease exit costs
|
$
|
165
|
|
|
$
|
23
|
|
(1)
|
$
|
(43
|
)
|
|
$
|
145
|
|
Severance costs
|
64
|
|
|
22
|
|
(2)
|
(74
|
)
|
|
12
|
|
||||
Access exit costs
|
19
|
|
|
18
|
|
(3)
|
(13
|
)
|
|
24
|
|
||||
|
$
|
248
|
|
|
$
|
63
|
|
|
$
|
(130
|
)
|
|
$
|
181
|
|
(1)
|
For the
nine-month period ended
December 31, 2018
, we recognized costs of
$23 million
(Wireless only).
|
(2)
|
For the
nine-month period ended
December 31, 2018
, we recognized costs of
$22 million
(
$15 million
Wireless,
$7 million
Wireline).
|
(3)
|
For the
nine-month period ended
December 31, 2018
, we recognized costs of
$18 million
(
$7 million
Wireless
,
$11 million
Wireline) as "Severance and exit costs."
|
Note 10.
|
Income Taxes
|
|
Nine Months Ended
December 31, |
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Income tax expense at the federal statutory rate
|
$
|
(61
|
)
|
|
$
|
(205
|
)
|
Effect of:
|
|
|
|
||||
State income taxes, net of federal income tax effect
|
(40
|
)
|
|
(57
|
)
|
||
State law changes, net of federal income tax effect
|
62
|
|
|
(28
|
)
|
||
Increase deferred tax liability for organizational restructuring
|
(12
|
)
|
|
—
|
|
||
Increase deferred tax liability for business activity changes
|
—
|
|
|
(69
|
)
|
||
Credit for increasing research activities
|
13
|
|
|
11
|
|
||
Change in federal and state valuation allowance
|
12
|
|
|
(64
|
)
|
||
Increase in liability for unrecognized tax benefits
|
(6
|
)
|
|
(20
|
)
|
||
Tax benefit from the Tax Act
|
—
|
|
|
7,090
|
|
||
Non-deductible penalties
|
(29
|
)
|
|
—
|
|
||
Other, net
|
5
|
|
|
4
|
|
||
Income tax (expense) benefit
|
$
|
(56
|
)
|
|
$
|
6,662
|
|
Effective income tax rate
|
19.2
|
%
|
|
(1,021.8
|
)%
|
Note 11.
|
Commitments and Contingencies
|
Note 12.
|
Per Share Data
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Net (loss) income
|
$
|
(145
|
)
|
|
$
|
7,156
|
|
|
$
|
235
|
|
|
$
|
7,314
|
|
Less: Net loss (income) attributable to noncontrolling interests
|
4
|
|
|
6
|
|
|
(4
|
)
|
|
6
|
|
||||
Net (loss) income attributable to Sprint
|
$
|
(141
|
)
|
|
$
|
7,162
|
|
|
$
|
231
|
|
|
$
|
7,320
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
4,078
|
|
|
4,001
|
|
|
4,050
|
|
|
3,998
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Options and restricted stock units
|
—
|
|
|
47
|
|
|
56
|
|
|
61
|
|
||||
Warrants
(1)
|
—
|
|
|
13
|
|
|
4
|
|
|
21
|
|
||||
Diluted weighted average common shares outstanding
|
4,078
|
|
|
4,061
|
|
|
4,110
|
|
|
4,080
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income per common share attributable to Sprint
|
$
|
(0.03
|
)
|
|
$
|
1.79
|
|
|
$
|
0.06
|
|
|
$
|
1.83
|
|
Diluted net (loss) income per common share attributable to Sprint
|
$
|
(0.03
|
)
|
|
$
|
1.76
|
|
|
$
|
0.06
|
|
|
$
|
1.79
|
|
|
|
|
|
|
|
|
|
||||||||
Potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Outstanding stock options
(2)
|
96
|
|
|
6
|
|
|
6
|
|
|
6
|
|
(1)
|
For the nine-month period ended December 31, 2018, dilutive securities attributable to warrants include
1 million
shares issuable under the warrant held by SoftBank. For the
three- and nine-month periods ended
December 31, 2017
, dilutive securities attributable to warrants include
9 million
and
17 million
shares, respectively, issuable under the warrant held by SoftBank. At the close of the merger with SoftBank, the warrant was issued at
$5.25
per share. On July 10, 2018, SoftBank exercised its warrant in full to purchase
55 million
shares of Sprint common stock for
$287 million
.
|
(2)
|
Potentially dilutive securities were not included in the computation of diluted net (loss) income per common share if to do so would have been antidilutive.
|
Note 13.
|
Segments
|
•
|
Wireless primarily includes retail, wholesale, and affiliate revenue from a wide array of wireless voice and data transmission services, revenue from the sale of wireless devices (handsets and tablets) and accessories, and equipment rentals from devices leased to customers, all of which are generated in the U.S., Puerto Rico and the U.S. Virgin Islands.
|
•
|
Wireline primarily includes revenue from domestic and international wireline communication services provided to other communications companies and targeted business subscribers, in addition to our Wireless segment.
|
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
8,351
|
|
|
$
|
245
|
|
|
$
|
5
|
|
|
$
|
8,601
|
|
Inter-segment revenues
(1)
|
—
|
|
|
71
|
|
|
(71
|
)
|
|
—
|
|
||||
Total segment operating expenses
(2)
|
(5,240
|
)
|
|
(332
|
)
|
|
72
|
|
|
(5,500
|
)
|
||||
Segment earnings (loss)
|
$
|
3,111
|
|
|
$
|
(16
|
)
|
|
$
|
6
|
|
|
3,101
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation - network and other
|
|
|
|
|
|
|
(1,088
|
)
|
|||||||
Depreciation - equipment rentals
|
|
|
|
|
|
|
(1,137
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(145
|
)
|
|||||||
Merger costs
(3)
|
|
|
|
|
|
|
(67
|
)
|
|||||||
Other, net
(4)
|
|
|
|
|
|
|
(185
|
)
|
|||||||
Operating income
|
|
|
|
|
|
|
479
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
(664
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
32
|
|
|||||||
Loss before income taxes
|
|
|
|
|
|
|
$
|
(153
|
)
|
Statement of Operations Information
|
Wireless including hurricane and other
|
|
Wireless hurricane and other
|
|
Wireless excluding hurricane and other
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Three Months Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net operating revenues
(2)
|
$
|
7,928
|
|
|
$
|
21
|
|
|
$
|
7,949
|
|
|
$
|
307
|
|
|
$
|
4
|
|
|
$
|
8,260
|
|
Inter-segment revenues
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
(86
|
)
|
|
—
|
|
||||||
Total segment operating expenses
(2)
|
(5,286
|
)
|
|
96
|
|
|
(5,190
|
)
|
|
(423
|
)
|
|
72
|
|
|
(5,541
|
)
|
||||||
Segment earnings (loss)
|
$
|
2,642
|
|
|
$
|
117
|
|
|
$
|
2,759
|
|
|
$
|
(30
|
)
|
|
$
|
(10
|
)
|
|
2,719
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation - network and other
|
|
|
|
|
|
|
|
|
|
|
(987
|
)
|
|||||||||||
Depreciation - equipment rentals
|
|
|
|
|
|
|
|
|
|
|
(990
|
)
|
|||||||||||
Amortization
|
|
|
|
|
|
|
|
|
|
|
(196
|
)
|
|||||||||||
Hurricane-related costs
(2)
|
|
|
|
|
|
|
|
|
|
|
(66
|
)
|
|||||||||||
Other, net
(4)
|
|
|
|
|
|
|
|
|
|
|
247
|
|
|||||||||||
Operating income
|
|
|
|
|
|
|
|
|
|
|
727
|
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(581
|
)
|
|||||||||||
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
(42
|
)
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
104
|
|
Statement of Operations Information
|
Wireless including hurricane
|
|
Wireless hurricane
|
|
Wireless excluding hurricane
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Nine Months Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net operating revenues
(2)
|
$
|
24,365
|
|
|
$
|
(3
|
)
|
|
$
|
24,362
|
|
|
$
|
781
|
|
|
$
|
13
|
|
|
$
|
25,156
|
|
Inter-segment revenues
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|
(201
|
)
|
|
—
|
|
||||||
Total segment operating expenses
(2)
|
(14,650
|
)
|
|
(7
|
)
|
|
(14,657
|
)
|
|
(1,060
|
)
|
|
198
|
|
|
(15,519
|
)
|
||||||
Segment earnings (loss)
|
$
|
9,715
|
|
|
$
|
(10
|
)
|
|
$
|
9,705
|
|
|
$
|
(78
|
)
|
|
$
|
10
|
|
|
9,637
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation - network and other
|
|
|
|
|
|
|
|
|
|
|
(3,132
|
)
|
|||||||||||
Depreciation - equipment rentals
|
|
|
|
|
|
|
|
|
|
|
(3,454
|
)
|
|||||||||||
Amortization
|
|
|
|
|
|
|
|
|
|
|
(475
|
)
|
|||||||||||
Hurricane-related reimbursements
(2)
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|||||||||||
Merger costs
(3)
|
|
|
|
|
|
|
|
|
|
|
(216
|
)
|
|||||||||||
Other, net
(4)
|
|
|
|
|
|
|
|
|
|
|
(320
|
)
|
|||||||||||
Operating income
|
|
|
|
|
|
|
|
|
|
|
2,072
|
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(1,934
|
)
|
|||||||||||
Other income, net
|
|
|
|
|
|
|
|
|
|
|
153
|
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Statement of Operations Information
|
Wireless including hurricane and other
|
|
Wireless hurricane and other
|
|
Wireless excluding hurricane and other
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Nine Months Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net operating revenues
(2)
|
$
|
23,347
|
|
|
$
|
33
|
|
|
$
|
23,380
|
|
|
$
|
963
|
|
|
$
|
13
|
|
|
$
|
24,356
|
|
Inter-segment revenues
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|
(272
|
)
|
|
—
|
|
||||||
Total segment operating expenses
(2)
|
(15,109
|
)
|
|
118
|
|
|
(14,991
|
)
|
|
(1,305
|
)
|
|
241
|
|
|
(16,055
|
)
|
||||||
Segment earnings (loss)
|
$
|
8,238
|
|
|
$
|
151
|
|
|
$
|
8,389
|
|
|
$
|
(70
|
)
|
|
$
|
(18
|
)
|
|
8,301
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation - network and other
|
|
|
|
|
|
|
|
|
|
|
(2,961
|
)
|
|||||||||||
Depreciation - equipment rentals
|
|
|
|
|
|
|
|
|
|
|
(2,732
|
)
|
|||||||||||
Amortization
|
|
|
|
|
|
|
|
|
|
|
(628
|
)
|
|||||||||||
Hurricane-related costs
(2)
|
|
|
|
|
|
|
|
|
|
|
(100
|
)
|
|||||||||||
Other, net
(4)
|
|
|
|
|
|
|
|
|
|
|
611
|
|
|||||||||||
Operating income
|
|
|
|
|
|
|
|
|
|
|
2,491
|
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(1,789
|
)
|
|||||||||||
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
(50
|
)
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
652
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Information
|
|
|
|
|
Wireless
|
|
Wireline
|
|
Corporate and
Other |
|
Consolidated
|
||||||||||||
|
|
|
|
|
(in millions)
|
||||||||||||||||||
Capital expenditures for the nine months ended December 31, 2018
|
|
|
|
|
$
|
9,101
|
|
|
$
|
170
|
|
|
$
|
282
|
|
|
$
|
9,553
|
|
||||
Capital expenditures for the nine months ended December 31, 2017
|
|
|
|
|
$
|
7,612
|
|
|
$
|
132
|
|
|
$
|
328
|
|
|
$
|
8,072
|
|
(1)
|
Inter-segment revenues consist primarily of wireline services provided to the Wireless segment for resale to, or use by, wireless subscribers.
|
(2)
|
The
nine-month period ended
December 31, 2018
includes
$32 million
of hurricane-related reimbursements, which are classified in our consolidated statements of comprehensive (loss) income as follows:
$3 million
as revenue in net operating revenues,
$6 million
as cost of services,
$1 million
as selling, general and administrative expenses and
$22 million
as other, net, all within the Wireless segment. The
three- and nine-month periods ended
December 31, 2017
includes
$66 million
and
$100 million
, respectively, of hurricane-related costs, which are classified in our consolidated statements of comprehensive (loss) income as follows:
$21 million
and
$33 million
, respectively, as contra-revenue in net operating revenues,
$30 million
and
$45 million
, respectively, as cost of services,
$15 million
and
$17 million
, respectively, as selling, general and administrative expenses and
$5 million
in the nine-month period only as other, net, all within the Wireless segment. In addition, the
three- and nine-month periods ended
December 31, 2017
includes a
$51 million
charge related to a regulatory fee matter, which is classified as cost of services in our consolidated statements of comprehensive (loss) income.
|
(3)
|
The
three- and nine-month periods ended
December 31, 2018
includes
$67 million
and
$216 million
, respectively, of merger-related costs, which were recorded as selling, general and administrative expenses in the consolidated statements of comprehensive (loss) income.
|
(4)
|
Other, net for the
three- and nine-month periods ended
December 31, 2018
includes
$30 million
and
$63 million
, respectively, of severance and exit costs primarily due to lease exit costs, reductions in work force and access termination charges. The
three- and nine-month periods ended
December 31, 2018
includes
$117 million
and
$185 million
, respectively, of loss on disposal of property, plant and equipment primarily related to cell site construction costs and other network costs that are no longer recoverable as a result of changes in our network plans
.
In addition, the
three- and nine-month periods ended
December 31, 2018
include a
$12 million
gain from the sale of certain assets and
$50 million
in litigation expense related to tax matters settled with the State of New York. The
nine-month period ended
December 31, 2018
includes
$34 million
associated with the purchase of certain leased spectrum assets, which upon termination of the related spectrum leases resulted in the accelerated recognition of the unamortized favorable lease balances. Other, net for the
three- and nine-month periods ended
December 31, 2017
includes
$13 million
of severance and exit costs in both periods and net reductions of
$260 million
and
$315 million
, respectively, primarily associated with legal settlements or favorable developments in pending legal proceeding. The
nine-month period ended
December 31, 2017
includes a
$175 million
net loss on disposal of property, plant and equipment, which consisted of a
$181 million
loss related to cell site construction costs that are no longer recoverable as a result of changes in our network plans, slightly offset by a
$6 million
gain. In addition, the
nine-month period ended
December 31, 2017
includes a
$479 million
non-cash gain related to spectrum license exchanges with other carriers and a
$5 million
reversal of previously accrued contract termination costs primarily related to the termination of our relationship with General Wireless Operations Inc. (Radio Shack).
|
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Service revenue
|
$
|
5,160
|
|
|
$
|
297
|
|
|
$
|
(71
|
)
|
|
$
|
5,386
|
|
Wireless equipment sales
|
1,589
|
|
|
—
|
|
|
—
|
|
|
1,589
|
|
||||
Wireless equipment rentals
|
1,313
|
|
|
—
|
|
|
—
|
|
|
1,313
|
|
||||
Other
|
289
|
|
|
19
|
|
|
5
|
|
|
313
|
|
||||
Total net operating revenues
|
$
|
8,351
|
|
|
$
|
316
|
|
|
$
|
(66
|
)
|
|
$
|
8,601
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Service revenue
(2)
|
$
|
5,311
|
|
|
$
|
377
|
|
|
$
|
(88
|
)
|
|
$
|
5,600
|
|
Wireless equipment sales
|
1,262
|
|
|
—
|
|
|
—
|
|
|
1,262
|
|
||||
Wireless equipment rentals
|
1,047
|
|
|
—
|
|
|
—
|
|
|
1,047
|
|
||||
Other
|
329
|
|
|
16
|
|
|
6
|
|
|
351
|
|
||||
Total net operating revenues
|
$
|
7,949
|
|
|
$
|
393
|
|
|
$
|
(82
|
)
|
|
$
|
8,260
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Nine Months Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Service revenue
(2)
|
$
|
15,536
|
|
|
$
|
914
|
|
|
$
|
(201
|
)
|
|
$
|
16,249
|
|
Wireless equipment sales
|
4,180
|
|
|
—
|
|
|
—
|
|
|
4,180
|
|
||||
Wireless equipment rentals
|
3,778
|
|
|
—
|
|
|
—
|
|
|
3,778
|
|
||||
Other
|
868
|
|
|
68
|
|
|
13
|
|
|
949
|
|
||||
Total net operating revenues
|
$
|
24,362
|
|
|
$
|
982
|
|
|
$
|
(188
|
)
|
|
$
|
25,156
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Nine Months Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Service revenue
(2)
|
$
|
16,141
|
|
|
$
|
1,188
|
|
|
$
|
(273
|
)
|
|
$
|
17,056
|
|
Wireless equipment sales
|
3,443
|
|
|
—
|
|
|
—
|
|
|
3,443
|
|
||||
Wireless equipment rentals
|
2,912
|
|
|
—
|
|
|
—
|
|
|
2,912
|
|
||||
Other
|
884
|
|
|
47
|
|
|
14
|
|
|
945
|
|
||||
Total net operating revenues
|
$
|
23,380
|
|
|
$
|
1,235
|
|
|
$
|
(259
|
)
|
|
$
|
24,356
|
|
|
|
|
|
|
|
|
|
(1)
|
Revenues eliminated in consolidation consist primarily of wireline services provided to the Wireless segment for resale to or use by wireless subscribers.
|
(2)
|
Service revenue related to the Wireless segment in the
nine-month period ended
December 31, 2018
excludes
$3 million
of hurricane-related revenue reimbursements reflected in net operating revenues in our consolidated statements of comprehensive (loss) income. Service revenue related to the Wireless segment in the
three- and nine-month periods ended
December 31, 2017
excludes
$21 million
and
$33 million
, respectively, of hurricane-related contra-revenue costs reflected in net operating revenues in our consolidated statements of comprehensive (loss) income.
|
Note 14.
|
Related-Party Transactions
|
Consolidated balance sheets:
|
December 31,
2018 |
|
March 31,
2018 |
||||
|
(in millions)
|
||||||
Accounts receivable
|
$
|
134
|
|
|
$
|
188
|
|
Accounts payable and accrued expenses and other current liabilities
|
$
|
37
|
|
|
$
|
88
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Consolidated statements of comprehensive (loss) income:
|
December 31,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Equipment sales
|
$
|
619
|
|
|
$
|
639
|
|
|
$
|
1,448
|
|
|
$
|
1,432
|
|
Cost of equipment sales
|
$
|
644
|
|
|
$
|
657
|
|
|
$
|
1,510
|
|
|
$
|
1,465
|
|
Note 15.
|
Guarantor Financial Information
|
|
December 31, 2018
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
5,800
|
|
|
$
|
391
|
|
|
$
|
—
|
|
|
$
|
6,191
|
|
Short-term investments
|
—
|
|
|
632
|
|
|
—
|
|
|
—
|
|
|
632
|
|
|||||
Accounts and notes receivable, net
|
233
|
|
|
477
|
|
|
3,455
|
|
|
(710
|
)
|
|
3,455
|
|
|||||
Current portion of notes receivable from consolidated affiliates
|
—
|
|
|
424
|
|
|
—
|
|
|
(424
|
)
|
|
—
|
|
|||||
Device and accessory inventory
|
—
|
|
|
—
|
|
|
919
|
|
|
—
|
|
|
919
|
|
|||||
Prepaid expenses and other current assets
|
—
|
|
|
15
|
|
|
1,184
|
|
|
—
|
|
|
1,199
|
|
|||||
Total current assets
|
233
|
|
|
7,348
|
|
|
5,949
|
|
|
(1,134
|
)
|
|
12,396
|
|
|||||
Investments in subsidiaries
|
27,983
|
|
|
19,314
|
|
|
—
|
|
|
(47,297
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
21,422
|
|
|
—
|
|
|
21,422
|
|
|||||
Costs to acquire a customer contract
|
—
|
|
|
—
|
|
|
1,497
|
|
|
—
|
|
|
1,497
|
|
|||||
Due from consolidated affiliates
|
289
|
|
|
1,849
|
|
|
—
|
|
|
(2,138
|
)
|
|
—
|
|
|||||
Notes receivable from consolidated affiliates
|
11,877
|
|
|
23,567
|
|
|
—
|
|
|
(35,444
|
)
|
|
—
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
—
|
|
|
6,598
|
|
|
—
|
|
|
6,598
|
|
|||||
FCC licenses and other
|
—
|
|
|
—
|
|
|
41,448
|
|
|
—
|
|
|
41,448
|
|
|||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
1,915
|
|
|
—
|
|
|
1,915
|
|
|||||
Other assets
|
—
|
|
|
70
|
|
|
1,058
|
|
|
—
|
|
|
1,128
|
|
|||||
Total assets
|
$
|
40,382
|
|
|
$
|
52,148
|
|
|
$
|
79,887
|
|
|
$
|
(86,013
|
)
|
|
$
|
86,404
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,637
|
|
|
$
|
—
|
|
|
$
|
3,637
|
|
Accrued expenses and other current liabilities
|
235
|
|
|
349
|
|
|
3,593
|
|
|
(710
|
)
|
|
3,467
|
|
|||||
Current portion of long-term debt, financing and capital lease obligations
|
—
|
|
|
351
|
|
|
3,245
|
|
|
—
|
|
|
3,596
|
|
|||||
Current portion of notes payable to consolidated affiliates
|
—
|
|
|
—
|
|
|
424
|
|
|
(424
|
)
|
|
—
|
|
|||||
Total current liabilities
|
235
|
|
|
700
|
|
|
10,899
|
|
|
(1,134
|
)
|
|
10,700
|
|
|||||
Long-term debt, financing and capital lease obligations
|
11,877
|
|
|
10,837
|
|
|
13,574
|
|
|
—
|
|
|
36,288
|
|
|||||
Notes payable to consolidated affiliates
|
—
|
|
|
11,877
|
|
|
23,567
|
|
|
(35,444
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
7,684
|
|
|
—
|
|
|
7,684
|
|
|||||
Other liabilities
|
—
|
|
|
751
|
|
|
2,652
|
|
|
—
|
|
|
3,403
|
|
|||||
Due to consolidated affiliates
|
—
|
|
|
—
|
|
|
2,138
|
|
|
(2,138
|
)
|
|
—
|
|
|||||
Total liabilities
|
12,112
|
|
|
24,165
|
|
|
60,514
|
|
|
(38,716
|
)
|
|
58,075
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
28,270
|
|
|
27,983
|
|
|
19,314
|
|
|
(47,297
|
)
|
|
28,270
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
59
|
|
|||||
Total equity
|
28,270
|
|
|
27,983
|
|
|
19,373
|
|
|
(47,297
|
)
|
|
28,329
|
|
|||||
Total liabilities and equity
|
$
|
40,382
|
|
|
$
|
52,148
|
|
|
$
|
79,887
|
|
|
$
|
(86,013
|
)
|
|
$
|
86,404
|
|
|
March 31, 2018
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
6,222
|
|
|
$
|
388
|
|
|
$
|
—
|
|
|
$
|
6,610
|
|
Short-term investments
|
—
|
|
|
2,354
|
|
|
—
|
|
|
—
|
|
|
2,354
|
|
|||||
Accounts and notes receivable, net
|
99
|
|
|
248
|
|
|
3,711
|
|
|
(347
|
)
|
|
3,711
|
|
|||||
Current portion of notes receivable from consolidated affiliates
|
—
|
|
|
424
|
|
|
—
|
|
|
(424
|
)
|
|
—
|
|
|||||
Device and accessory inventory
|
—
|
|
|
—
|
|
|
1,003
|
|
|
—
|
|
|
1,003
|
|
|||||
Prepaid expenses and other current assets
|
5
|
|
|
9
|
|
|
561
|
|
|
—
|
|
|
575
|
|
|||||
Total current assets
|
104
|
|
|
9,257
|
|
|
5,663
|
|
|
(771
|
)
|
|
14,253
|
|
|||||
Investments in subsidiaries
|
26,351
|
|
|
18,785
|
|
|
—
|
|
|
(45,136
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
19,925
|
|
|
—
|
|
|
19,925
|
|
|||||
Due from consolidated affiliates
|
1
|
|
|
—
|
|
|
594
|
|
|
(595
|
)
|
|
—
|
|
|||||
Notes receivable from consolidated affiliates
|
11,887
|
|
|
23,991
|
|
|
—
|
|
|
(35,878
|
)
|
|
—
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
—
|
|
|
6,586
|
|
|
—
|
|
|
6,586
|
|
|||||
FCC licenses and other
|
—
|
|
|
—
|
|
|
41,309
|
|
|
—
|
|
|
41,309
|
|
|||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
2,465
|
|
|
—
|
|
|
2,465
|
|
|||||
Other assets
|
—
|
|
|
185
|
|
|
736
|
|
|
—
|
|
|
921
|
|
|||||
Total assets
|
$
|
38,343
|
|
|
$
|
52,218
|
|
|
$
|
77,278
|
|
|
$
|
(82,380
|
)
|
|
$
|
85,459
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,409
|
|
|
$
|
—
|
|
|
$
|
3,409
|
|
Accrued expenses and other current liabilities
|
100
|
|
|
341
|
|
|
3,868
|
|
|
(347
|
)
|
|
3,962
|
|
|||||
Current portion of long-term debt, financing and capital lease obligations
|
—
|
|
|
1,832
|
|
|
1,597
|
|
|
—
|
|
|
3,429
|
|
|||||
Current portion of notes payable to consolidated affiliates
|
—
|
|
|
—
|
|
|
424
|
|
|
(424
|
)
|
|
—
|
|
|||||
Total current liabilities
|
100
|
|
|
2,173
|
|
|
9,298
|
|
|
(771
|
)
|
|
10,800
|
|
|||||
Long-term debt, financing and capital lease obligations
|
11,887
|
|
|
10,381
|
|
|
15,195
|
|
|
—
|
|
|
37,463
|
|
|||||
Notes payable to consolidated affiliates
|
—
|
|
|
11,887
|
|
|
23,991
|
|
|
(35,878
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
7,294
|
|
|
—
|
|
|
7,294
|
|
|||||
Other liabilities
|
—
|
|
|
831
|
|
|
2,652
|
|
|
—
|
|
|
3,483
|
|
|||||
Due to consolidated affiliates
|
—
|
|
|
595
|
|
|
—
|
|
|
(595
|
)
|
|
—
|
|
|||||
Total liabilities
|
11,987
|
|
|
25,867
|
|
|
58,430
|
|
|
(37,244
|
)
|
|
59,040
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
26,356
|
|
|
26,351
|
|
|
18,785
|
|
|
(45,136
|
)
|
|
26,356
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
|||||
Total equity
|
26,356
|
|
|
26,351
|
|
|
18,848
|
|
|
(45,136
|
)
|
|
26,419
|
|
|||||
Total liabilities and equity
|
$
|
38,343
|
|
|
$
|
52,218
|
|
|
$
|
77,278
|
|
|
$
|
(82,380
|
)
|
|
$
|
85,459
|
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Service
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,699
|
|
|
$
|
—
|
|
|
$
|
5,699
|
|
Equipment sales
|
—
|
|
|
—
|
|
|
1,589
|
|
|
—
|
|
|
1,589
|
|
|||||
Equipment rentals
|
—
|
|
|
—
|
|
|
1,313
|
|
|
—
|
|
|
1,313
|
|
|||||
|
—
|
|
|
—
|
|
|
8,601
|
|
|
—
|
|
|
8,601
|
|
|||||
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
1,648
|
|
|
—
|
|
|
1,648
|
|
|||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
1,734
|
|
|
—
|
|
|
1,734
|
|
|||||
Cost of equipment rentals (exclusive of depreciation below)
|
—
|
|
|
—
|
|
|
182
|
|
|
—
|
|
|
182
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
2,003
|
|
|
—
|
|
|
2,003
|
|
|||||
Depreciation - network and other
|
—
|
|
|
—
|
|
|
1,088
|
|
|
—
|
|
|
1,088
|
|
|||||
Depreciation - equipment rentals
|
—
|
|
|
—
|
|
|
1,137
|
|
|
—
|
|
|
1,137
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
145
|
|
|
—
|
|
|
145
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
185
|
|
|
—
|
|
|
185
|
|
|||||
|
—
|
|
|
—
|
|
|
8,122
|
|
|
—
|
|
|
8,122
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
479
|
|
|
—
|
|
|
479
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
227
|
|
|
540
|
|
|
175
|
|
|
(904
|
)
|
|
38
|
|
|||||
Interest expense
|
(227
|
)
|
|
(609
|
)
|
|
(732
|
)
|
|
904
|
|
|
(664
|
)
|
|||||
(Losses) earnings of subsidiaries
|
(141
|
)
|
|
(69
|
)
|
|
—
|
|
|
210
|
|
|
—
|
|
|||||
Other expense, net
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
|
(141
|
)
|
|
(141
|
)
|
|
(560
|
)
|
|
210
|
|
|
(632
|
)
|
|||||
(Loss) income before income taxes
|
(141
|
)
|
|
(141
|
)
|
|
(81
|
)
|
|
210
|
|
|
(153
|
)
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Net (loss) income
|
(141
|
)
|
|
(141
|
)
|
|
(73
|
)
|
|
210
|
|
|
(145
|
)
|
|||||
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Net (loss) income attributable to Sprint Corporation
|
(141
|
)
|
|
(141
|
)
|
|
(69
|
)
|
|
210
|
|
|
(141
|
)
|
|||||
Other comprehensive (loss) income
|
(25
|
)
|
|
(25
|
)
|
|
—
|
|
|
25
|
|
|
(25
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(166
|
)
|
|
$
|
(166
|
)
|
|
$
|
(73
|
)
|
|
$
|
235
|
|
|
$
|
(170
|
)
|
|
Three Months Ended December 31, 2017
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Service
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,930
|
|
|
$
|
—
|
|
|
$
|
5,930
|
|
Equipment sales
|
—
|
|
|
—
|
|
|
1,262
|
|
|
—
|
|
|
1,262
|
|
|||||
Equipment rentals
|
—
|
|
|
—
|
|
|
1,047
|
|
|
—
|
|
|
1,047
|
|
|||||
|
—
|
|
|
—
|
|
|
8,239
|
|
|
—
|
|
|
8,239
|
|
|||||
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
1,733
|
|
|
—
|
|
|
1,733
|
|
|||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
1,673
|
|
|
—
|
|
|
1,673
|
|
|||||
Cost of equipment rentals (exclusive of depreciation below)
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
2,108
|
|
|
—
|
|
|
2,108
|
|
|||||
Depreciation - network and other
|
—
|
|
|
—
|
|
|
987
|
|
|
—
|
|
|
987
|
|
|||||
Depreciation - equipment rentals
|
—
|
|
|
—
|
|
|
990
|
|
|
—
|
|
|
990
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
196
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(298
|
)
|
|
—
|
|
|
(298
|
)
|
|||||
|
—
|
|
|
—
|
|
|
7,512
|
|
|
—
|
|
|
7,512
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
727
|
|
|
—
|
|
|
727
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
198
|
|
|
458
|
|
|
1
|
|
|
(643
|
)
|
|
14
|
|
|||||
Interest expense
|
(198
|
)
|
|
(382
|
)
|
|
(644
|
)
|
|
643
|
|
|
(581
|
)
|
|||||
Earnings (losses) of subsidiaries
|
7,162
|
|
|
7,088
|
|
|
—
|
|
|
(14,250
|
)
|
|
—
|
|
|||||
Other expense, net
|
—
|
|
|
(2
|
)
|
|
(54
|
)
|
|
—
|
|
|
(56
|
)
|
|||||
|
7,162
|
|
|
7,162
|
|
|
(697
|
)
|
|
(14,250
|
)
|
|
(623
|
)
|
|||||
Income (loss) before income taxes
|
7,162
|
|
|
7,162
|
|
|
30
|
|
|
(14,250
|
)
|
|
104
|
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
7,052
|
|
|
—
|
|
|
7,052
|
|
|||||
Net income (loss)
|
7,162
|
|
|
7,162
|
|
|
7,082
|
|
|
(14,250
|
)
|
|
7,156
|
|
|||||
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Net income (loss) attributable to Sprint Corporation
|
7,162
|
|
|
7,162
|
|
|
7,088
|
|
|
(14,250
|
)
|
|
7,162
|
|
|||||
Other comprehensive income (loss)
|
26
|
|
|
26
|
|
|
6
|
|
|
(32
|
)
|
|
26
|
|
|||||
Comprehensive income (loss)
|
$
|
7,188
|
|
|
$
|
7,188
|
|
|
$
|
7,088
|
|
|
$
|
(14,282
|
)
|
|
$
|
7,182
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Service
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,201
|
|
|
$
|
—
|
|
|
$
|
17,201
|
|
Equipment sales
|
—
|
|
|
—
|
|
|
4,180
|
|
|
—
|
|
|
4,180
|
|
|||||
Equipment rentals
|
—
|
|
|
—
|
|
|
3,778
|
|
|
—
|
|
|
3,778
|
|
|||||
|
—
|
|
|
—
|
|
|
25,159
|
|
|
—
|
|
|
25,159
|
|
|||||
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
5,019
|
|
|
—
|
|
|
5,019
|
|
|||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
4,521
|
|
|
—
|
|
|
4,521
|
|
|||||
Cost of equipment rentals (exclusive of depreciation below)
|
—
|
|
|
—
|
|
|
457
|
|
|
—
|
|
|
457
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
5,731
|
|
|
—
|
|
|
5,731
|
|
|||||
Depreciation - network and other
|
—
|
|
|
—
|
|
|
3,132
|
|
|
—
|
|
|
3,132
|
|
|||||
Depreciation - equipment rentals
|
—
|
|
|
—
|
|
|
3,454
|
|
|
—
|
|
|
3,454
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
475
|
|
|
—
|
|
|
475
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
298
|
|
|
—
|
|
|
298
|
|
|||||
|
—
|
|
|
—
|
|
|
23,087
|
|
|
—
|
|
|
23,087
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
2,072
|
|
|
—
|
|
|
2,072
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
679
|
|
|
1,632
|
|
|
517
|
|
|
(2,699
|
)
|
|
129
|
|
|||||
Interest expense
|
(679
|
)
|
|
(1,755
|
)
|
|
(2,199
|
)
|
|
2,699
|
|
|
(1,934
|
)
|
|||||
Earnings (losses) of subsidiaries
|
231
|
|
|
337
|
|
|
—
|
|
|
(568
|
)
|
|
—
|
|
|||||
Other income, net
|
—
|
|
|
17
|
|
|
7
|
|
|
—
|
|
|
24
|
|
|||||
|
231
|
|
|
231
|
|
|
(1,675
|
)
|
|
(568
|
)
|
|
(1,781
|
)
|
|||||
Income (loss) before income taxes
|
231
|
|
|
231
|
|
|
397
|
|
|
(568
|
)
|
|
291
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|||||
Net income (loss)
|
231
|
|
|
231
|
|
|
341
|
|
|
(568
|
)
|
|
235
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Net income (loss) attributable to Sprint Corporation
|
231
|
|
|
231
|
|
|
337
|
|
|
(568
|
)
|
|
231
|
|
|||||
Other comprehensive (loss) income
|
(20
|
)
|
|
(20
|
)
|
|
(10
|
)
|
|
30
|
|
|
(20
|
)
|
|||||
Comprehensive income (loss)
|
$
|
211
|
|
|
$
|
211
|
|
|
$
|
331
|
|
|
$
|
(538
|
)
|
|
$
|
215
|
|
|
Nine Months Ended December 31, 2017
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Service
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,968
|
|
|
$
|
—
|
|
|
$
|
17,968
|
|
Equipment sales
|
—
|
|
|
—
|
|
|
3,443
|
|
|
—
|
|
|
3,443
|
|
|||||
Equipment rentals
|
—
|
|
|
—
|
|
|
2,912
|
|
|
—
|
|
|
2,912
|
|
|||||
|
—
|
|
|
—
|
|
|
24,323
|
|
|
—
|
|
|
24,323
|
|
|||||
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
5,140
|
|
|
—
|
|
|
5,140
|
|
|||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
4,622
|
|
|
—
|
|
|
4,622
|
|
|||||
Cost of equipment rentals (exclusive of depreciation below)
|
—
|
|
|
—
|
|
|
347
|
|
|
—
|
|
|
347
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
6,059
|
|
|
—
|
|
|
6,059
|
|
|||||
Depreciation - network and other
|
—
|
|
|
—
|
|
|
2,961
|
|
|
—
|
|
|
2,961
|
|
|||||
Depreciation - equipment rentals
|
—
|
|
|
—
|
|
|
2,732
|
|
|
—
|
|
|
2,732
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
628
|
|
|
—
|
|
|
628
|
|
|||||
Other, net
|
—
|
|
|
(55
|
)
|
|
(602
|
)
|
|
—
|
|
|
(657
|
)
|
|||||
|
—
|
|
|
(55
|
)
|
|
21,887
|
|
|
—
|
|
|
21,832
|
|
|||||
Operating income
|
—
|
|
|
55
|
|
|
2,436
|
|
|
—
|
|
|
2,491
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
593
|
|
|
783
|
|
|
10
|
|
|
(1,320
|
)
|
|
66
|
|
|||||
Interest expense
|
(593
|
)
|
|
(1,171
|
)
|
|
(1,345
|
)
|
|
1,320
|
|
|
(1,789
|
)
|
|||||
Earnings (losses) of subsidiaries
|
7,320
|
|
|
7,722
|
|
|
—
|
|
|
(15,042
|
)
|
|
—
|
|
|||||
Other expense, net
|
—
|
|
|
(69
|
)
|
|
(47
|
)
|
|
—
|
|
|
(116
|
)
|
|||||
|
7,320
|
|
|
7,265
|
|
|
(1,382
|
)
|
|
(15,042
|
)
|
|
(1,839
|
)
|
|||||
Income (loss) before income taxes
|
7,320
|
|
|
7,320
|
|
|
1,054
|
|
|
(15,042
|
)
|
|
652
|
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
6,662
|
|
|
—
|
|
|
6,662
|
|
|||||
Net income (loss)
|
7,320
|
|
|
7,320
|
|
|
7,716
|
|
|
(15,042
|
)
|
|
7,314
|
|
|||||
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Net income (loss) attributable to Sprint Corporation
|
7,320
|
|
|
7,320
|
|
|
7,722
|
|
|
(15,042
|
)
|
|
7,320
|
|
|||||
Other comprehensive income (loss)
|
38
|
|
|
38
|
|
|
18
|
|
|
(56
|
)
|
|
38
|
|
|||||
Comprehensive income (loss)
|
$
|
7,358
|
|
|
$
|
7,358
|
|
|
$
|
7,734
|
|
|
$
|
(15,098
|
)
|
|
$
|
7,352
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(408
|
)
|
|
$
|
7,990
|
|
|
$
|
—
|
|
|
$
|
7,582
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures - network and other
|
—
|
|
|
—
|
|
|
(3,814
|
)
|
|
—
|
|
|
(3,814
|
)
|
|||||
Capital expenditures - leased devices
|
—
|
|
|
—
|
|
|
(5,739
|
)
|
|
—
|
|
|
(5,739
|
)
|
|||||
Expenditures relating to FCC licenses
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
(145
|
)
|
|||||
Proceeds from sales and maturities of short-term investments
|
—
|
|
|
6,619
|
|
|
—
|
|
|
—
|
|
|
6,619
|
|
|||||
Purchases of short-term investments
|
—
|
|
|
(5,152
|
)
|
|
—
|
|
|
—
|
|
|
(5,152
|
)
|
|||||
Change in amounts due from/due to consolidated affiliates
|
(253
|
)
|
|
(1,285
|
)
|
|
—
|
|
|
1,538
|
|
|
—
|
|
|||||
Proceeds from sales of assets and FCC licenses
|
—
|
|
|
—
|
|
|
416
|
|
|
—
|
|
|
416
|
|
|||||
Proceeds from deferred purchase price from sale of receivables
|
—
|
|
|
—
|
|
|
223
|
|
|
—
|
|
|
223
|
|
|||||
Proceeds from corporate owned life insurance policies
|
—
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|||||
Proceeds from intercompany note advance to consolidated affiliate
|
—
|
|
|
424
|
|
|
—
|
|
|
(424
|
)
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
|||||
Net cash (used in) provided by investing activities
|
(253
|
)
|
|
716
|
|
|
(9,007
|
)
|
|
1,114
|
|
|
(7,430
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt and financings
|
—
|
|
|
1,100
|
|
|
5,316
|
|
|
—
|
|
|
6,416
|
|
|||||
Repayments of debt, financing and capital lease obligations
|
—
|
|
|
(1,783
|
)
|
|
(5,154
|
)
|
|
—
|
|
|
(6,937
|
)
|
|||||
Debt financing costs
|
(28
|
)
|
|
(47
|
)
|
|
(211
|
)
|
|
—
|
|
|
(286
|
)
|
|||||
Proceeds from issuance of common stock, net
|
281
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
—
|
|
|
1,538
|
|
|
(1,538
|
)
|
|
—
|
|
|||||
Repayments of intercompany note advance from parent
|
—
|
|
|
—
|
|
|
(424
|
)
|
|
424
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
253
|
|
|
(730
|
)
|
|
1,065
|
|
|
(1,114
|
)
|
|
(526
|
)
|
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
—
|
|
|
(422
|
)
|
|
48
|
|
|
—
|
|
|
(374
|
)
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
—
|
|
|
6,222
|
|
|
437
|
|
|
—
|
|
|
6,659
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
—
|
|
|
$
|
5,800
|
|
|
$
|
485
|
|
|
$
|
—
|
|
|
$
|
6,285
|
|
|
Nine Months Ended December 31, 2017
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(1,016
|
)
|
|
$
|
8,425
|
|
|
$
|
—
|
|
|
$
|
7,409
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures - network and other
|
—
|
|
|
—
|
|
|
(2,539
|
)
|
|
—
|
|
|
(2,539
|
)
|
|||||
Capital expenditures - leased devices
|
—
|
|
|
—
|
|
|
(5,533
|
)
|
|
—
|
|
|
(5,533
|
)
|
|||||
Expenditures relating to FCC licenses
|
—
|
|
|
—
|
|
|
(92
|
)
|
|
—
|
|
|
(92
|
)
|
|||||
Proceeds from sales and maturities of short-term investments
|
—
|
|
|
7,113
|
|
|
—
|
|
|
—
|
|
|
7,113
|
|
|||||
Purchases of short-term investments
|
—
|
|
|
(1,842
|
)
|
|
—
|
|
|
—
|
|
|
(1,842
|
)
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
—
|
|
|
689
|
|
|
(689
|
)
|
|
—
|
|
|||||
Proceeds from sales of assets and FCC licenses
|
—
|
|
|
—
|
|
|
367
|
|
|
—
|
|
|
367
|
|
|||||
Proceeds from deferred purchase price from sale of receivables
|
—
|
|
|
—
|
|
|
909
|
|
|
—
|
|
|
909
|
|
|||||
Proceeds from corporate owned life insurance policies
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Proceeds from intercompany note advance to consolidated affiliate
|
—
|
|
|
575
|
|
|
—
|
|
|
(575
|
)
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Net cash provided by (used in) investing activities
|
—
|
|
|
5,848
|
|
|
(6,200
|
)
|
|
(1,264
|
)
|
|
(1,616
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt and financings
|
—
|
|
|
—
|
|
|
3,073
|
|
|
—
|
|
|
3,073
|
|
|||||
Repayments of debt, financing and capital lease obligations
|
—
|
|
|
(2,530
|
)
|
|
(4,629
|
)
|
|
—
|
|
|
(7,159
|
)
|
|||||
Debt financing costs
|
—
|
|
|
(9
|
)
|
|
(10
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Call premiums paid on debt redemptions
|
—
|
|
|
(129
|
)
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|||||
Proceeds from issuance of common stock, net
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
(689
|
)
|
|
—
|
|
|
689
|
|
|
—
|
|
|||||
Repayments of intercompany note advance from consolidated affiliate
|
—
|
|
|
—
|
|
|
(575
|
)
|
|
575
|
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Net cash (used in) provided by financing activities
|
—
|
|
|
(3,345
|
)
|
|
(2,159
|
)
|
|
1,264
|
|
|
(4,240
|
)
|
|||||
Net increase in cash, cash equivalents and restricted cash
|
—
|
|
|
1,487
|
|
|
66
|
|
|
—
|
|
|
1,553
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
—
|
|
|
2,461
|
|
|
481
|
|
|
—
|
|
|
2,942
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
—
|
|
|
$
|
3,948
|
|
|
$
|
547
|
|
|
$
|
—
|
|
|
$
|
4,495
|
|
Note 16.
|
Additional Financial Information
|
|
December 31,
2018 |
|
March 31,
2018 |
||||
|
(in millions)
|
||||||
Cash and cash equivalents
|
$
|
6,191
|
|
|
$
|
6,610
|
|
Restricted cash in Other assets
(1)
|
94
|
|
|
49
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
6,285
|
|
|
$
|
6,659
|
|
(1)
|
Restricted cash in Other assets is required as part of our spectrum financing transactions.
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Sprint's Next-Gen network plan will deliver competitive coverage, faster speeds and more capacity;
|
•
|
Create a compelling unlimited value proposition;
|
•
|
Provide the best digital customer experience; and
|
•
|
Engage our partners by making Sprint a great place to work.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Wireless segment earnings
|
$
|
3,111
|
|
|
$
|
2,759
|
|
|
$
|
9,705
|
|
|
$
|
8,389
|
|
Wireline segment loss
|
(16
|
)
|
|
(30
|
)
|
|
(78
|
)
|
|
(70
|
)
|
||||
Corporate, other and eliminations
|
6
|
|
|
(10
|
)
|
|
10
|
|
|
(18
|
)
|
||||
Consolidated segment earnings
|
3,101
|
|
|
2,719
|
|
|
9,637
|
|
|
8,301
|
|
||||
Depreciation - network and other
|
(1,088
|
)
|
|
(987
|
)
|
|
(3,132
|
)
|
|
(2,961
|
)
|
||||
Depreciation - equipment rentals
|
(1,137
|
)
|
|
(990
|
)
|
|
(3,454
|
)
|
|
(2,732
|
)
|
||||
Amortization
|
(145
|
)
|
|
(196
|
)
|
|
(475
|
)
|
|
(628
|
)
|
||||
Other, net
|
(252
|
)
|
|
181
|
|
|
(504
|
)
|
|
511
|
|
||||
Operating income
|
479
|
|
|
727
|
|
|
2,072
|
|
|
2,491
|
|
||||
Interest expense
|
(664
|
)
|
|
(581
|
)
|
|
(1,934
|
)
|
|
(1,789
|
)
|
||||
Other income (expense), net
|
32
|
|
|
(42
|
)
|
|
153
|
|
|
(50
|
)
|
||||
Income tax benefit (expense)
|
8
|
|
|
7,052
|
|
|
(56
|
)
|
|
6,662
|
|
||||
Net (loss) income
|
$
|
(145
|
)
|
|
$
|
7,156
|
|
|
$
|
235
|
|
|
$
|
7,314
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Severance and exit costs
|
$
|
(30
|
)
|
|
$
|
(13
|
)
|
|
$
|
(63
|
)
|
|
$
|
(13
|
)
|
Litigation expenses and other contingencies
|
(50
|
)
|
|
260
|
|
|
(50
|
)
|
|
315
|
|
||||
Loss on disposal of property, plant and equipment, net
|
(117
|
)
|
|
—
|
|
|
(185
|
)
|
|
(175
|
)
|
||||
Contract termination (costs) benefits
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
5
|
|
||||
Gains from asset dispositions and exchanges
|
12
|
|
|
—
|
|
|
12
|
|
|
479
|
|
||||
Merger costs
|
(67
|
)
|
|
—
|
|
|
(216
|
)
|
|
—
|
|
||||
Hurricane-related (costs) reimbursements
|
—
|
|
|
(66
|
)
|
|
32
|
|
|
(100
|
)
|
||||
Total
|
$
|
(252
|
)
|
|
$
|
181
|
|
|
$
|
(504
|
)
|
|
$
|
511
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
Wireless Segment Earnings
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Postpaid
(1)
|
$
|
4,236
|
|
|
$
|
4,314
|
|
|
$
|
12,676
|
|
|
$
|
13,151
|
|
Prepaid
(1)
|
924
|
|
|
997
|
|
|
2,860
|
|
|
2,990
|
|
||||
Retail service revenues
|
5,160
|
|
|
5,311
|
|
|
15,536
|
|
|
16,141
|
|
||||
Wholesale, affiliate and other
|
289
|
|
|
329
|
|
|
868
|
|
|
884
|
|
||||
Total service revenue
|
5,449
|
|
|
5,640
|
|
|
16,404
|
|
|
17,025
|
|
||||
Equipment sales
|
1,589
|
|
|
1,262
|
|
|
4,180
|
|
|
3,443
|
|
||||
Equipment rentals
|
1,313
|
|
|
1,047
|
|
|
3,778
|
|
|
2,912
|
|
||||
Total net operating revenues
|
8,351
|
|
|
7,949
|
|
|
24,362
|
|
|
23,380
|
|
||||
Cost of services (exclusive of depreciation and amortization)
(1)
|
(1,439
|
)
|
|
(1,385
|
)
|
|
(4,340
|
)
|
|
(4,204
|
)
|
||||
Cost of equipment sales
|
(1,734
|
)
|
|
(1,673
|
)
|
|
(4,521
|
)
|
|
(4,622
|
)
|
||||
Cost of equipment rentals (exclusive of depreciation)
|
(182
|
)
|
|
(123
|
)
|
|
(457
|
)
|
|
(347
|
)
|
||||
Selling, general and administrative expense
(1)
|
(1,885
|
)
|
|
(2,009
|
)
|
|
(5,339
|
)
|
|
(5,818
|
)
|
||||
Total net operating expenses
|
(5,240
|
)
|
|
(5,190
|
)
|
|
(14,657
|
)
|
|
(14,991
|
)
|
||||
Wireless segment earnings
|
$
|
3,111
|
|
|
$
|
2,759
|
|
|
$
|
9,705
|
|
|
$
|
8,389
|
|
(1)
|
The
nine-month period ended
December 31, 2018
excludes hurricane-related reimbursements of
$3 million
of postpaid service revenue,
$6 million
of cost of services, and
$1 million
of selling, general and administrative expenses. The
three- and nine-month periods ended
December 31, 2017
excludes
$17 million
and
$25 million
, respectively, of hurricane-related postpaid service contra-revenue,
$4 million
and
$8 million
, respectively, of hurricane-related prepaid service contra-revenue,
$30 million
and
$45 million
, respectively, of cost of services, and
$15 million
and
$17 million
, respectively, of selling, general and administrative expenses. In addition, the
three- and nine-month periods ended
December 31, 2017
, excludes a
$51 million
charge from costs of services related to a regulatory fee matter.
|
•
|
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.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
December 31,
|
|
December 31,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
(subscribers in thousands)
|
||||||||||
Average postpaid subscribers
|
32,361
|
|
|
31,728
|
|
|
32,218
|
|
|
31,606
|
|
Average prepaid subscribers
|
8,918
|
|
|
8,840
|
|
|
8,976
|
|
|
8,756
|
|
Average retail subscribers
|
41,279
|
|
|
40,568
|
|
|
41,194
|
|
|
40,362
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
ARPU
(1)
:
|
|
|
|
|
|
|
|
||||||||
Postpaid
|
$
|
43.64
|
|
|
$
|
45.13
|
|
|
$
|
43.73
|
|
|
$
|
46.14
|
|
Prepaid
|
$
|
34.53
|
|
|
$
|
37.46
|
|
|
$
|
35.40
|
|
|
$
|
37.84
|
|
Average retail
|
$
|
41.67
|
|
|
$
|
43.46
|
|
|
$
|
41.90
|
|
|
$
|
44.34
|
|
(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, 2017
|
|
Sept 30, 2017
|
|
Dec 31,
2017 |
|
March 31,
2018 |
|
June 30, 2018
|
|
Sept 30, 2018
|
|
Dec 31, 2018
|
|||||||
Net additions (losses) (in thousands)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Postpaid
|
(39
|
)
|
|
168
|
|
|
256
|
|
|
39
|
|
|
123
|
|
|
109
|
|
|
309
|
|
Prepaid
|
35
|
|
|
95
|
|
|
63
|
|
|
170
|
|
|
3
|
|
|
(14
|
)
|
|
(173
|
)
|
Wholesale and affiliates
|
65
|
|
|
115
|
|
|
66
|
|
|
(165
|
)
|
|
(69
|
)
|
|
(115
|
)
|
|
(88
|
)
|
Total Wireless
|
61
|
|
|
378
|
|
|
385
|
|
|
44
|
|
|
57
|
|
|
(20
|
)
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
End of period subscribers (in thousands)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Postpaid
(2)(4)(5)(6)
|
31,518
|
|
|
31,686
|
|
|
31,942
|
|
|
32,119
|
|
|
32,187
|
|
|
32,296
|
|
|
32,605
|
|
Prepaid
(2)(3)(4)(7)(8)
|
8,719
|
|
|
8,765
|
|
|
8,997
|
|
|
8,989
|
|
|
9,033
|
|
|
9,019
|
|
|
8,846
|
|
Wholesale and affiliates
(3)(4)(5)(9)(10)
|
13,461
|
|
|
13,576
|
|
|
13,642
|
|
|
13,517
|
|
|
13,347
|
|
|
13,232
|
|
|
13,044
|
|
Total Wireless
|
53,698
|
|
|
54,027
|
|
|
54,581
|
|
|
54,625
|
|
|
54,567
|
|
|
54,547
|
|
|
54,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Supplemental data - connected devices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
End of period subscribers (in thousands)
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Retail postpaid
|
2,091
|
|
|
2,158
|
|
|
2,259
|
|
|
2,335
|
|
|
2,429
|
|
|
2,585
|
|
|
2,821
|
|
Wholesale and affiliates
|
11,100
|
|
|
11,221
|
|
|
11,272
|
|
|
11,162
|
|
|
10,963
|
|
|
10,838
|
|
|
10,563
|
|
Total
|
13,191
|
|
|
13,379
|
|
|
13,531
|
|
|
13,497
|
|
|
13,392
|
|
|
13,423
|
|
|
13,384
|
|
(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 service category 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)
|
During the three-month period ended March 31, 2018, a non-Sprint branded postpaid offering was introduced allowing prepaid customers to purchase a device under our installment billing program. As a result of the extension of credit, approximately 167,000 prepaid subscribers were migrated from the prepaid subscriber base into the postpaid subscriber base. During the three-month period ended June 30, 2018, we ceased selling devices in our installment billing program under one of our brands and as a result, 45,000 subscribers were migrated back to prepaid.
|
(3)
|
Sprint is no longer reporting Lifeline subscribers due to regulatory changes resulting in tighter program restrictions. We have excluded these subscribers from our subscriber base for all periods presented, including our Assurance Wireless prepaid brand and subscribers through our wholesale Lifeline MVNOs.
|
(4)
|
As a result of our affiliate agreement with Shentel, certain subscribers have been transferred from postpaid and prepaid to affiliates. During the three-month period ended June 30, 2017, 17,000 and 4,000 subscribers were transferred from postpaid and prepaid, respectively, to affiliates. During the three-month period ended March 31, 2018, 29,000 and 11,000 subscribers were transferred from postpaid and prepaid, respectively, to affiliates. During the three-month period ended June 30, 2018, 10,000 and 4,000 subscribers were transferred from postpaid and prepaid, respectively, to affiliates.
|
(5)
|
End of period connected devices are included in retail postpaid or wholesale and affiliates end of period subscriber totals for all periods presented.
|
(6)
|
During the three-month period ended June 30, 2017, 2,000 Wi-Fi connections were adjusted from the postpaid subscriber base.
|
(7)
|
During the three-month period ended September 30, 2017, the Prepaid Data Share platform It's On was decommissioned as the Company continues to focus on higher value contribution offerings resulting in a 49,000 reduction to prepaid end of period subscribers.
|
(8)
|
During the three-month period ended December 31, 2017, prepaid end of period subscribers increased by 169,000 in conjunction with the PRWireless transaction.
|
(9)
|
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
2,420,000
subscribers at
December 31, 2018
through these MVNO relationships have been inactive for at least six months, with no associated revenue during the six-month period ended
December 31, 2018
.
|
(10)
|
On April 1, 2018,
115,000
wholesale subscribers were removed from the subscriber base with no impact to revenue. During the three-month period ended December 31, 2018, an additional
100,000
wholesale subscribers were removed from the subscriber base with no impact to revenue.
|
|
June 30, 2017
(2)
|
|
Sept 30,
2017 |
|
Dec 31,
2017 |
|
March 31,
2018 |
|
June 30, 2018
|
|
Sept 30,
2018 |
|
Dec 31, 2018
|
|||||||
Monthly subscriber churn rate
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Postpaid
|
1.65
|
%
|
|
1.72
|
%
|
|
1.80
|
%
|
|
1.78
|
%
|
|
1.63
|
%
|
|
1.78
|
%
|
|
1.85
|
%
|
Prepaid
|
4.57
|
%
|
|
4.83
|
%
|
|
4.63
|
%
|
|
4.30
|
%
|
|
4.17
|
%
|
|
4.74
|
%
|
|
4.83
|
%
|
(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)
|
In the quarter ended June 30, 2017, the Company enhanced subscriber reporting to better align certain early-life gross activations and deactivations associated with customers who have not paid us after the initial subscriber transaction. This enhancement had no impact to net additions but did result in reporting lower gross additions and lower deactivations in the quarter. Without this enhancement, total postpaid churn in the quarter would have been 1.73% versus 1.65%.
|
|
June 30, 2017
|
|
Sept 30,
2017 |
|
Dec 31,
2017 |
|
March 31,
2018 |
|
June 30, 2018
|
|
Sept 30,
2018 |
|
Dec 31, 2018
|
||||||||||||||
ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Postpaid
|
$
|
47.30
|
|
|
$
|
46.00
|
|
|
$
|
45.13
|
|
|
$
|
44.40
|
|
|
$
|
43.55
|
|
|
$
|
43.99
|
|
|
$
|
43.64
|
|
Prepaid
|
$
|
38.24
|
|
|
$
|
37.83
|
|
|
$
|
37.46
|
|
|
$
|
37.15
|
|
|
$
|
36.27
|
|
|
$
|
35.40
|
|
|
$
|
34.53
|
|
•
|
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;
|
•
|
fixed and variable interconnection costs, the fixed component of which consists of monthly flat-rate fees for facilities leased from local exchange carriers and other providers based on the number of cell sites and switches in service in a particular period and the related equipment installed at each site, and the variable component which generally consists of per-minute use fees charged by wireline providers for calls terminating on their networks, which fluctuate in relation to the level and duration of those terminating calls;
|
•
|
long distance costs paid to other carriers, and the Wireline segment through fiscal year 2017;
|
•
|
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 subscriber use of their proprietary data applications, such as messaging, music and cloud services and connected vehicle fees.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
Wireline Segment Earnings
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Total net service revenues
|
$
|
316
|
|
|
$
|
393
|
|
|
$
|
982
|
|
|
$
|
1,235
|
|
Cost of services (exclusive of depreciation)
|
(280
|
)
|
|
(352
|
)
|
|
(886
|
)
|
|
(1,111
|
)
|
||||
Selling, general and administrative expense
|
(52
|
)
|
|
(71
|
)
|
|
(174
|
)
|
|
(194
|
)
|
||||
Total net operating expenses
|
(332
|
)
|
|
(423
|
)
|
|
(1,060
|
)
|
|
(1,305
|
)
|
||||
Wireline segment loss
|
$
|
(16
|
)
|
|
$
|
(30
|
)
|
|
$
|
(78
|
)
|
|
$
|
(70
|
)
|
|
Nine Months Ended
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Net cash provided by operating activities
|
$
|
7,582
|
|
|
$
|
7,409
|
|
Net cash used in investing activities
|
$
|
(7,430
|
)
|
|
$
|
(1,616
|
)
|
Net cash used in financing activities
|
$
|
(526
|
)
|
|
$
|
(4,240
|
)
|
•
|
projected revenues and expenses relating to our operations, including those related to our installment billing and leasing programs, along with the success of initiatives such as our expectations of achieving a more competitive cost structure through cost reduction initiatives and increasing our postpaid handset subscriber base;
|
•
|
cash needs related to our installment billing and device leasing programs;
|
•
|
availability under the Receivables Facility, which terminates in June 2020;
|
•
|
availability of our
$2.0 billion
secured revolving bank credit facility, which expires in February 2021, less outstanding letters of credit;
|
•
|
remaining availability of
$271 million
of our secured equipment credit facility for eligible capital expenditures, and any corresponding principal, interest, and fee payments;
|
•
|
scheduled principal payments on debt, credit facilities and financing obligations, including $22.8 billion coming due over the next five years;
|
•
|
raising additional funds from external sources;
|
•
|
the expected use of cash and cash equivalents in the near-term;
|
•
|
anticipated levels and timing of capital expenditures, including assumptions regarding lower unit costs, network capacity additions and upgrades, and the deployment of new technologies in our networks, FCC license acquisitions, and purchases of leased devices;
|
•
|
any additional contributions we may make to our pension plan;
|
•
|
estimated residual values of devices related to our device leasing program; and
|
•
|
other future contractual obligations and general corporate expenditures.
|
|
|
Rating
|
||||||||||
Rating Agency
|
|
Issuer Rating
|
|
Unsecured Notes
|
|
Guaranteed Notes
|
|
Secured Bank Credit Facility
|
|
Spectrum Notes
|
|
Outlook
|
Moody's
|
|
B2
|
|
B3
|
|
B1
|
|
Ba2
|
|
Baa2
|
|
Watch Positive
|
Standard and Poor's
|
|
B
|
|
B
|
|
B+
|
|
BB-
|
|
N/A
|
|
Watch Positive
|
Fitch
|
|
B+
|
|
B+
|
|
BB
|
|
BB+
|
|
BBB
|
|
Watch Positive
|
•
|
the failure to obtain, or delays in obtaining, required regulatory approvals for the merger, and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger, or the failure to satisfy any of the other conditions to the merger on a timely basis or at all;
|
•
|
the occurrence of events that may give rise to a right of one or both of the parties to terminate the Business Combination Agreement;
|
•
|
the diversion of management and financial resources toward the completion of the merger;
|
•
|
adverse effects on the market price of our common stock or on our or T-Mobile’s operating results because of a failure to complete the merger in the anticipated timeframe or at all;
|
•
|
inability to obtain the financing contemplated to be obtained in connection with the merger on the expected terms or timing or at all;
|
•
|
the ability of us, T-Mobile and the combined company to make payments on debt, repay existing or future indebtedness when due, comply with the covenants contained therein or retain sufficient business flexibility;
|
•
|
adverse changes in the ratings of our or T-Mobile’s debt securities or adverse conditions in the credit markets;
|
•
|
negative effects of the announcement, pendency or consummation of the merger on the market price of our common stock and on our or T-Mobile’s operating results, including as a result of changes in key customer, supplier, employee or other business relationships;
|
•
|
potential conflicts of interests between our directors and executive officers and our stockholders;
|
•
|
significant costs related to the merger, including financing costs, and unknown liabilities;
|
•
|
failure to realize the expected benefits and synergies of the merger in the expected timeframes or at all;
|
•
|
costs or difficulties related to the integration of our and T-Mobile’s networks and operations;
|
•
|
the risk of litigation or regulatory actions related to the merger;
|
•
|
the inability of us, T-Mobile or the combined company to retain and hire key personnel;
|
•
|
the risk that certain contractual restrictions contained in the Business Combination Agreement during the pendency of the merger could adversely affect our or T-Mobile’s ability to pursue business opportunities or strategic transactions;
|
•
|
our ability to obtain additional financing, including monetizing certain of our assets, including those under our existing or future programs to monetize a portion of our network or spectrum holdings, or to modify the
|
•
|
our ability to continue to receive the expected benefits of our existing financings such as receivable financings;
|
•
|
our ability to retain and attract subscribers and to manage credit risks associated with our subscribers;
|
•
|
the effective implementation of our plans to improve the quality of our network, including timing, execution, technologies, costs, and performance of our network;
|
•
|
failure to improve subscriber churn, bad debt expense, accelerated cash use, costs and write-offs, including with respect to changes in expected residual values related to any of our service plans, including installment billing and leasing programs;
|
•
|
the ability to generate sufficient cash flow to fully implement our plans to improve and enhance the quality of our network and service plans, improve our operating margins, implement our business strategies, and provide competitive new technologies;
|
•
|
the effects of vigorous competition on a highly penetrated market, including the impact of competition on the prices we are able to charge subscribers for services and devices we provide and on the geographic areas served by our network;
|
•
|
the impact of installment sales and leasing of handsets;
|
•
|
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;
|
•
|
our ability to continue to access our spectrum and acquire additional spectrum capacity;
|
•
|
changes in available technology and the effects of such changes, including product substitutions and deployment costs and performance;
|
•
|
volatility in the trading price of our common stock, including as a result of the merger, current economic conditions and our ability to access capital, including debt or equity;
|
•
|
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 service and products, including distribution, or infrastructure equipment for our network;
|
•
|
the costs and business risks associated with providing new services and entering new geographic markets;
|
•
|
the effects of the merger or any other 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 others in our industry;
|
•
|
our ability to comply with restrictions imposed by the U.S. Government as a condition to our merger with SoftBank;
|
•
|
the effects of any material impairment of our goodwill or other indefinite-lived intangible assets;
|
•
|
the impacts of new accounting standards or changes to existing standards that the Financial Accounting Standards Board or other regulatory agencies issue, including the Securities and Exchange Commission (SEC);
|
•
|
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 any 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 Annual Report on Form 10-K for the year ended
March 31, 2018
.
|
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
|
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Incorporated by Reference
|
|
Filed/Furnished
Herewith
|
|||||
|
SEC
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1
**
|
|
Business Combination Agreement, dated as of April 29, 2018, by and among T-Mobile US, Inc., Huron Merger Sub LLC, Superior Merger Sub Corp., Sprint Corporation, Starburst I, Inc., Galaxy Investment Holdings, Inc., and for the limited purposes set forth therein, Deutsche Telekom AG, Deutsche Telekom Holding B.V. and SoftBank Group. Corp.
|
|
8-K
|
|
001-04721
|
|
2.1
|
|
|
4/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Articles of Incorporation and Bylaws
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated Certificate of Incorporation
|
|
8-K
|
|
001-04721
|
|
3.1
|
|
|
7/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated Bylaws
|
|
8-K
|
|
001-04721
|
|
3.2
|
|
|
8/7/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Instruments Defining the Rights of Security Holders, including Indentures
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Supplemental Indenture, dated as of December 10, 2018, by and among Sprint Spectrum Co LLC, Sprint Spectrum Co II LLC, Sprint Spectrum Co III LLC and Deutsche Bank Trust Company Americas, as trustee and securities intermediary
|
|
|
|
|
|
|
|
|
|
*
|
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(10) Material Contracts
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Incremental Facility Amendment, dated as of November 26, 2018, by and among Sprint Communications, Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, the guarantors party thereto and the lenders party thereto, to the Credit Agreement dated as of February 3, 2017
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8-K
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001-04721
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10.1
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11/27/2018
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First Amendment to Third Amended and Restated Receivables Sale and Contribution Agreement, dated as of December 20, 2018, by and among Sprint Spectrum L.P., as servicer, certain Sprint Corporation subsidiaries, as originators and sellers, and certain special purchase entities, as purchasers, certain commercial paper conduits and financial institutions from time to time party thereto, and Mizuho Bank, Ltd.
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*
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First Amendment to Third Amended and Restated Receivables Purchase Agreement, dated as of December 20, 2018, by and among Sprint Spectrum L.P., as servicer, certain Sprint Corporation special purpose entities, as sellers, certain commercial paper conduits and financial institutions from time to time party thereto, as purchaser agents, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent, SMBC Nikko Securities America, Inc., as administrative agent, and Mizuho Bank, Ltd., as administrative agent and collateral agent
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*
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(31) and (32) Officer Certifications
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Certification of Chief Executive Officer Pursuant to Securities Exchange Act of 1934 Rule 13a-14(a)
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*
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Certification of Chief Financial Officer Pursuant to Securities Exchange Act of 1934 Rule 13a-14(a)
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*
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Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
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*
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Exhibit No.
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Exhibit Description
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Form
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Incorporated by Reference
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Filed/Furnished
Herewith
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SEC
File No.
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Exhibit
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Filing Date
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Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
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*
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(101) Formatted in XBRL (Extensible Business Reporting Language)
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101.INS
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XBRL Instance Document
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*
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101.SCH
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XBRL Taxonomy Extension Schema Document
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*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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*
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*
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Filed or furnished, as required.
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**
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Filing excludes certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K, which the registrant agrees to furnish supplementally to the SEC upon request by the SEC; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act, for any schedules or exhibits so furnished.
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SPRINT CORPORATION
(Registrant)
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By:
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/s/ P
AUL
W. S
CHIEBER,
J
R.
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Paul W. Schieber, Jr.
Vice President and Controller
(Principal Accounting Officer)
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By:
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/s/ Janet M. Duncan
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By:
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/s/ Janet M. Duncan
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By:
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/s/ Janet M. Duncan
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By:
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/s/ Jenna Kaufman
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By:
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/s/ William Schwerdtman
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(a)
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duly executed counterparts of this Amendment (whether by facsimile or otherwise) executed by each of the parties hereto;
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(b)
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duly executed counterparts of the LLC Agreement Amendments (whether by facsimile or otherwise) executed by each of the parties thereto;
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(c)
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duly executed counterparts of the Employee and Rent Agreement (whether by facsimile or otherwise) executed by each of the parties thereto; and
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(d)
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duly executed counterparts of the RSCA Amendment (whether by facsimile or otherwise) executed by each of the parties thereto, which RSCA Amendment shall be in a form reasonably satisfactory to the Administrative Agent.
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(a)
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the Administrative Agent shall have received from the Servicer an Information Package pursuant to Section 3.1(a) of the Receivables Purchase Agreement which includes all information reasonably required by the Administrative Agent in connection with the exclusion of Receivables the Obligor of which is domiciled or organized in the Commonwealth of Puerto Rico or the Virgin Islands of the United States, which Information Package shall be in a form reasonably satisfactory to the Administrative Agent; and
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(b)
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the Administrative Agent shall have received drafts of UCC-3 financing statements amending the UCC-1 financing statements to be filed against each of Sprint Spectrum L.P. and SprintCom, Inc. in connection with the Sale Agreement reflecting the changes in connection with the RSCA Amendment, in a form reasonably satisfactory to the Administrative Agent, which such UCC-3 financing statements shall be filed on the Exclusion Effective Date and are authorized to be filed by this Amendment.
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1.
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I have reviewed this quarterly report on Form 10-Q of Sprint Corporation;
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2.
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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;
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3.
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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;
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4.
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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;
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(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
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(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
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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/ Michel Combes
|
Michel Combes
|
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/ Andrew Davies
|
Andrew Davies
|
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/ Michel Combes
|
Michel Combes
|
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/ Andrew Davies
|
Andrew Davies
|
Chief Financial Officer
|