Sprint.com

  • Fourth quarter Operating Loss improved 22 percent to $576 million; Adjusted EBITDA* of $1.15 billion improved by nearly 40 percent or more than $300 million year-over-year compared to combined prior year results
    • Combined annual Operating Loss of $1.9 billion
    • Annual Adjusted EBITDA* of $5.4 billion grew 13 percent year-over-year
  • Highest-ever annual Sprint platform wireless service revenue of $28.6 billion grew more than 5 percent year-over-year
    • Fourth quarter Sprint platform wireless service revenue of $7.2 billion grew year-over-year for the 15th consecutive quarter
    • Best-ever annual Sprint platform postpaid ARPU of $64.07
  • Highest-ever Sprint platform subscribers at 53.9 million
    • 682,000 total Sprint platform net additions in the fourth quarter
    • 58,000 Sprint platform postpaid net additions in the fourth quarter
  • Annual retail smartphone sales of 20.5 million and a record 95 percent of quarterly Sprint platform postpaid handset sales were smartphones
  • Continued progress on the Network
    • More than 200 million people covered by 4G LTE
    • Sprint Spark TM available in 14 of the largest U.S. cities including today’s launches in Philadelphia and Baltimore
  • Launched revolutionary new Sprint FramilySM that redefines traditional wireless family plans

The company’s fourth quarter 2013 earnings conference call will be held at 8 a.m. ET today. Participants may dial 800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and provide the following ID: 31411101 or may listen via the Internet at www.sprint.com/investors.

Additional information about results can be found in the “Quarterly Investor Update” posted on our Investor Relations website at www.sprint.com/investors.

Financial results in the enclosed tables for 2013 and 2012 include a predecessor period from January 1, 2012, through the closing of the SoftBank transaction on July 10, 2013, and a successor period from October 5, 2012 through December 31, 2013. In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined the current year and prior year results of operations for the predecessor and successor periods. The enclosed remarks are in reference to the unaudited combined period unless otherwise noted. For additional information please reference the section titled Financial Measures.

OVERLAND PARK, Kan. (BUSINESS WIRE), February 11, 2014 - Sprint Corporation (NYSE:S) today reported operating revenue, which grew year-over-year to more than $9.1 billion for the fourth quarter and to $35.5 billion for the full year 2013. Operating loss was $576 million in the fourth quarter, a 22 percent year-over-year improvement. Quarterly Adjusted EBITDA* of $1.15 billion improved nearly 40 percent year-over-year. Annual Adjusted EBITDA* of $5.4 billion improved by 13 percent.

“In 2013 Adjusted EBITDA* and Sprint platform wireless revenues grew significantly while we made investments to improve network performance and expand 4G LTE to more than 200 million people,” said Dan Hesse, Sprint CEO. “As we roll out Sprint SparkTM and create innovative offers like Sprint FramilySM, we are building a foundation for future success.”

Sprint Platform Subscriber Net Additions of 682,000 and Record Smartphone Sales Mix

Sprint ended the year with 53.9 million Sprint platform subscribers – its highest level ever – after adding 58,000 postpaid subscribers, 322,000 prepaid subscribers and 302,000 wholesale and affiliate subscribers in the fourth quarter. Sprint sold 5.6 million smartphones in the fourth quarter and 20.5 million smartphones for the year with smartphone sales mix reaching 95 percent for postpaid and 66 percent for prepaid in the quarter.

Net Income and Operating Loss Improve Year-Over-Year; Adjusted EBITDA* Up Nearly 40 percent Year-Over-Year

Quarterly net loss was $1 billion in the fourth quarter as compared to a loss of $1.3 billion in the fourth quarter of 2012. Operating loss for the quarter was $576 million as compared to an operating loss of $738 million in the fourth quarter of 2012.

Quarterly Adjusted EBITDA* of $1.15 billion improved nearly 40 percent year-over-year as growth in Sprint platform service revenue, network savings resulting from the Nextel platform shutdown and lower net subsidy expense were partially offset by the loss of Nextel platform revenue and the consolidation of Clearwire’s results.

LTE Coverage Now Available to More than 200 Million People; Sprint Spark TM Now in 14 Markets

Sprint currently has nearly 33,000 Network Vision sites on air, an increase of more than 24,000 sites over the last 12 months. LTE coverage is now available to more than 200 million people. The company continues to expect that by the middle of this year LTE coverage will reach 250 million people and the voice/3G network modernization deployment will be complete.

During the fourth quarter the company unveiled Sprint Spark – a combination of advanced network and device technology with the potential to surpass wireless speeds of any U.S. network provider, capable of delivering 50-60 Megabits per second peak speeds today with potential speeds three times as fast by late 2015. Sprint Spark leverages the company’s 800MHz, 1.9GHz and 2.5GHz spectrum together with devices offering tri-band capability and high-definition voice1.

Sprint plans to deploy Sprint Spark in about 100 of America’s largest cities during the next three years. By the end of this year, 100 million Americans are expected to have Sprint Spark coverage. Today, Sprint Spark launches in Philadelphia and Baltimore and, with the recent launch in Kansas City, is currently available in 14 markets including New York, Los Angeles and Chicago. Ten Sprint Spark-capable devices are currently available, including the recently updated Samsung Galaxy S® 4, Samsung Galaxy MEGA™, HTC One® max, LG G Flex and NETGEAR® Zing Mobile Hotspot™.

Sprint Framily Pricing Program Lets Customers Decide

Earlier this year, Sprint introduced Sprint Framily, a new pricing program available to new and existing customers that lets consumers decide who they consider family. With Sprint Framily, the more people added to the group (up to 10 phone lines), the greater the savings for everyone on the plan.

For one line of service, new Sprint customers pay $55 per month per line for unlimited talk, text and 1GB of data while on the Sprint network. For each additional new Sprint customer who joins the Framily group, the cost per person goes down $5 a month up to a maximum monthly discount of $30 per line. With a group of at least seven people, each customer gets unlimited talk, text and 1GB of data while on the Sprint network for $25 per month per line (pricing excludes taxes and surcharges).

All members of the group can customize their plan and for an additional $20 per month per line, Framily members can buy up to unlimited data plus get a new phone every year. Each account can be billed separately.

Sprint Garners Third-Party Recognition

Sprint received notable awards in the fourth quarter. In particular, CEVA Logistics, one of the world’s leading supply chain companies, named Sprint as Technology Supplier of the Year. Pinsight Media+, Sprint’s mobile media company, received the 2013 North American Mobile Advertising Product Leadership Award from Frost & Sullivan, and Dan Hesse was named Corporate Responsibility Magazine’s Lifetime Achievement Award winner for 2013. Last month, Compass Intelligence named Sprint the most “Eco Focused Wireless Carrier,” and Sprint was the only U.S. telecommunications company to be named an Efficiency Leader to the 2014 National Capital Leaders Index by GreenBiz Group and Trucost. Additionally, for the second year in a row, Sprint was rated 16th in Chief Executive Magazine’s Best Companies for Leaders list.

Forecast

The company expects 2014 Adjusted EBITDA* to be between $6.5 billion and $6.7 billion.

The company expects 2014 capital expenditures of approximately $8 billion.

                                 
Wireless Operating Statistics (Unaudited)                                
        Quarter To Date     Year To Date
        12/31/13     9/30/13     12/31/12    

12/31/13

   

12/31/12

Net (Losses) Additions (in thousands)                                
Sprint platform:                                
Postpaid (3)       58       (360 )     401       (96 )     1,516  
Prepaid (4)       322       84       525       488       2,305  
Wholesale and affiliate       302       181       (243 )     31       944  
Total Sprint platform       682       (95 )     683       423       4,765  
Nextel platform:                                
Postpaid (3)       -       -       (644 )     (1,632 )     (2,653 )
Prepaid (4)       -       -       (376 )     (454 )     (1,507 )

Total Nextel platform

      -       -       (1,020 )     (2,086 )     (4,160 )
Transactions: (a)                                
Postpaid (3)       (127 )     (175 )     -       (481 )     -  
Prepaid (4)       (103 )     (56 )     -       (179 )     -  
Wholesale       25       13       -       38       -  
Total transactions       (205 )     (218 )     -       (622 )     -  
                                 
Total retail postpaid net losses       (69 )     (535 )     (243 )     (2,209 )     (1,137 )
Total retail prepaid net additions (losses)       219       28       149       (145 )     798  
Total wholesale and affiliate net additions (losses)       327       194       (243 )     69       944  
Total Wireless Net Additions (Losses)       477       (313 )     (337 )     (2,285 )     605  
                                 
End of Period Subscribers (in thousands)                                
Sprint platform:                                

Postpaid (3)

      30,149       30,091       30,245       30,149       30,245  
Prepaid (4)       15,621       15,299       15,133       15,621       15,133  
Wholesale and affiliate       8,164       7,862       8,162       8,164       8,162  

Total Sprint platform

      53,934       53,252       53,540       53,934       53,540  
Nextel platform:                                
Postpaid (3)       -       -       1,632       -       1,632  
Prepaid (4)       -       -       454       -       454  
Total Nextel platform       -       -       2,086       -       2,086  
Transactions: (a)                                
Postpaid (3)       688       815       -       688       -  
Prepaid (4)       601       704       -       601       -  
Wholesale       131       106       -       131       -  
Total transactions       1,420       1,625       -       1,420       -  
                                 
Total retail postpaid end of period subscribers       30,837       30,906       31,877       30,837       31,877  
Total retail prepaid end of period subscribers       16,222       16,003       15,587       16,222       15,587  
Total wholesale and affiliate end of period subscribers       8,295       7,968       8,162       8,295       8,162  
Total End of Period Subscribers       55,354       54,877       55,626       55,354       55,626  
                                 
Supplemental Data - Connected Devices                                
End of Period Subscribers (in thousands)                                
Retail postpaid       922       834       813       922       813  
Wholesale and affiliate       3,578       3,298       2,670       3,578       2,670  
Total       4,500       4,132       3,483       4,500       3,483  
                                 
                                 
Churn                                
Sprint platform:                                
Postpaid       2.07 %     1.99 %     1.98 %     1.93 %     1.89 %
Prepaid       3.01 %     3.57 %     3.02 %     3.72 %     3.01 %
Nextel platform:                                
Postpaid       -       -       5.27 %     16.40 %     3.24 %
Prepaid       -       -       9.79 %     18.58 %     8.55 %
Transactions: (a)                                
Postpaid       5.48 %     6.38 %     -       7.65 %     -  
Prepaid       8.18 %     8.84 %     -       8.66 %     -  
                                 
Total retail postpaid churn       2.15 %     2.09 %     2.18 %     2.24 %     2.02 %
Total retail prepaid churn       3.22 %     3.78 %     3.30 %     3.94 %     3.45 %
                                 
Nextel Platform Subscriber Recaptures                                
Subscribers (in thousands) (5):                                
Postpaid       -       -       333       628       1,508  
Prepaid       -       -       188       168       620  
Rate (6):                                
Postpaid       -       -       51 %     38 %     55 %
Prepaid       -       -       50 %     37 %     33 %
                                           

(a) We acquired approximately 352,000 postpaid subscribers and 59,000 prepaid subscribers through the acquisition of assets from U.S. Cellular when the transaction closed on May 17, 2013. We acquired approximately 788,000 postpaid subscribers, 721,000 prepaid subscribers, 93,000 wholesale subscribers and transferred 29,000 Sprint wholesale subscribers that were originally recognized through our Clearwire MVNO arrangement to Transactions postpaid subscribers as a result of the Clearwire acquisition when the transaction closed on July 9, 2013.

                                 
Wireless Operating Statistics (Unaudited) (continued)                                
      Successor     Predecessor
     

Quarter

To

Date

  Quarter

To

Date

  Year

To

Date

    10 Days

Ended

  191 Days

Ended

  Quarter

To

Date

  Year

To

Date

      12/31/13   9/30/13   12/31/13     7/10/13   7/10/13   12/31/12   12/31/12
ARPU (b)                                
Sprint platform:                                
Postpaid     $ 64.11   $ 64.24   $ 64.17     $ 64.71   $ 63.98   $ 63.04   $ 63.05
Prepaid     $ 26.78   $ 25.14   $ 26.01     $ 26.99   $ 26.49   $ 26.30   $ 25.92
Nextel platform:                                
Postpaid     $ -   $ -   $ -     $ -   $ 35.84   $ 37.27   $ 39.65
Prepaid     $ -   $ -   $ -     $ -   $ 32.60   $ 35.59   $ 35.91
Transactions: (a)                                
Postpaid     $ 36.30   $ 37.44   $ 36.89     $ 35.75   $ 56.98   $ -   $ -
Prepaid     $ 40.80   $ 40.62   $ 40.71     $ 12.78   $ 18.26   $ -   $ -
                                 
Total retail postpaid ARPU     $ 63.44   $ 63.48   $ 63.46     $ 64.55   $ 63.10   $ 61.47   $ 60.84
Total retail prepaid ARPU     $ 27.34   $ 25.86   $ 26.64     $ 26.96   $ 26.57   $ 26.69   $ 26.72
                                               

(a) We acquired approximately 352,000 postpaid subscribers and 59,000 prepaid subscribers through the acquisition of assets from U.S. Cellular when the transaction closed on May 17, 2013. We acquired approximately 788,000 postpaid subscribers, 721,000 prepaid subscribers, 93,000 wholesale subscribers and transferred 29,000 Sprint wholesale subscribers that were originally recognized through our Clearwire MVNO arrangement to Transactions postpaid subscribers as a result of the Clearwire acquisition when the transaction closed on July 9, 2013.

(b) ARPU is calculated by dividing service revenue by the sum of the average number of 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.

                         
Wireless Operating Statistics (Unaudited) (continued)                        
                         
      Combined (1) Quarter to Date     Combined (1) Year to Date
      12/31/13   9/30/13   12/31/12     12/31/13   12/31/12
ARPU (b)                        
Sprint platform:                        
Postpaid     $ 64.11   $ 64.28   $ 63.04     $ 64.07   $ 63.05
Prepaid     $ 26.78   $ 25.33   $ 26.30     $ 26.26   $ 25.92
Nextel platform:                        
Postpaid     $ -   $ -   $ 37.27     $ 35.84   $ 39.65
Prepaid     $ -   $ -   $ 35.59     $ 32.60   $ 35.91
Transactions: (a)                        
Postpaid     $ 36.30   $ 40.00   $ -     $ 39.96   $ -
Prepaid     $ 40.80   $ 43.20   $ -     $ 41.55   $ -
                         
Total retail postpaid ARPU     $ 63.44   $ 63.69   $ 61.47     $ 63.29   $ 60.84
Total retail prepaid ARPU     $ 27.34   $ 26.04   $ 26.69     $ 26.62   $ 26.72
                         

(a) We acquired approximately 352,000 postpaid subscribers and 59,000 prepaid subscribers through the acquisition of assets from U.S. Cellular when the transaction closed on May 17, 2013. We acquired approximately 788,000 postpaid subscribers, 721,000 prepaid subscribers, 93,000 wholesale subscribers and transferred 29,000 Sprint wholesale subscribers that were originally recognized through our Clearwire MVNO arrangement to Transactions postpaid subscribers as a result of the Clearwire acquisition when the transaction closed on July 9, 2013.

(b) ARPU is calculated by dividing service revenue by the sum of the average number of 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. Combined ARPU for the quarter-to-date September 30, 2013 period aggregate service revenue of the ten days ended July 10, 2013 Predecessor period and the quarter-to-date September 30, 2013 Successor period divided by the sum of the average subscribers during the quarter. Combined ARPU for the year-to-date December 31, 2013 period aggregate service revenue of the 191 days ended July 10, 2013 Predecessor period and the year-to-date December 31, 2013 Successor period divided by the sum of the average subscribers during the year-to-date period. Combined ARPU for the quarter-to-date December 31, 2013 period is not affected by Predecessor activity and, therefore, is consistent with the information presented in the previous table for the quarter-to-date December 31, 2013 Successor ARPU. Combined ARPU for the quarter and year-to-date December 31, 2012 periods are not affected by Successor activity, and, therefore, is consistent with the information presented in the previous table for the quarter and year-to-date Predecessor ARPU.

 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Millions, except per Share Data)
      Successor     Predecessor
      Quarter

To

Date

  Quarter

To

Date

  87 Days

Ended

  Year

To

Date

    10 Days

Ended

  191 Days

Ended

  Quarter

To

Date

  Year

To

Date

      12/31/13   9/30/13   12/31/12   12/31/13     7/10/13   7/10/13   12/31/12   12/31/12
                                     
Net Operating Revenues     $ 9,142     $ 7,749     $ -     $ 16,891       $ 932     $ 18,602     $ 9,005     $ 35,345  
Net Operating Expenses                                    
Cost of services       2,704       2,470       -       5,174         286       5,673       2,659       10,936  
Cost of products       2,731       1,872       -       4,603         281       4,872       2,993       9,905  
Selling, general and administrative       2,546       2,259       33       4,841         289       5,067       2,557       9,765  
Depreciation and amortization       1,531       1,403       -       2,934         121       3,245       1,493       6,543  
Other, net       206       103       -       309         (5 )     630       8       16  
Total net operating expenses       9,718       8,107       33       17,861         972       19,487       9,710       37,165  
Operating Loss       (576 )     (358 )     (33 )     (970 )       (40 )     (885 )     (705 )     (1,820 )
Interest expense       (502 )     (416 )     -       (918 )       (275 )     (1,135 )     (432 )     (1,428 )
Equity in earnings (losses) of unconsolidated investments and other, net       55       165       10       73         2,905       2,463       (140 )     (923 )
(Loss) Income before Income Taxes       (1,023 )     (609 )     (23 )     (1,815 )       2,590       443       (1,277 )     (4,171 )
Income tax expense       (15 )     (90 )     (4 )     (45 )       (1,508 )     (1,601 )     (44 )     (154 )
Net (Loss) Income     $ (1,038 )   $ (699 )   $ (27 )   $ (1,860 )     $ 1,082     $ (1,158 )   $ (1,321 )   $ (4,325 )
                                     
Basic Net (Loss) Income Per Common Share     $ (0.26 )   $ (0.18 )     NM     $ (0.54 )     $ 0.35     $ (0.38 )   $ (0.44 )   $ (1.44 )
Diluted Net (Loss) Income Per Common Share     $ (0.26 )   $ (0.18 )     NM     $ (0.54 )     $ 0.30     $ (0.38 )   $ (0.44 )   $ (1.44 )
Basic Weighted Average Common Shares outstanding       3,944       3,802       NM       3,475         3,086       3,027       3,007       3,002  
Diluted Weighted Average Common Shares outstanding       3,944       3,802       NM       3,475         3,640       3,027       3,007       3,002  
                                     
Effective Tax Rate       -1.5 %     -14.8 %     -17.4 %     -2.5 %       58.2 %     361.4 %     -3.4 %     -3.7 %
                                     
                                     
NON-GAAP RECONCILIATION - NET INCOME (LOSS) TO ADJUSTED EBITDA* (Unaudited)
(Millions)
      Successor     Predecessor
      Quarter

To

Date

  Quarter

To

Date

  87 Days

Ended

  Year

To

Date

    10 Days

Ended

  191 Days

Ended

  Quarter

To

Date

  Year

To

Date

      12/31/13   9/30/13   12/31/12   12/31/13     7/10/13   7/10/13   12/31/12   12/31/12
                                     
Net (Loss) Income     $ (1,038 )   $ (699 )   $ (27 )   $ (1,860 )     $ 1,082     $ (1,158 )   $ (1,321 )   $ (4,325 )
Income tax expense       15       90       4       45         1,508       1,601       44       154  
(Loss) Income before Income Taxes       (1,023 )     (609 )     (23 )     (1,815 )       2,590       443       (1,277 )     (4,171 )
Equity in earnings (losses) of unconsolidated investments and other, net       (55 )     (165 )     (10 )     (73 )       (2,905 )     (2,463 )     140       923  
Interest expense       502       416       -       918         275       1,135       432       1,428  
Operating Loss       (576 )     (358 )     (33 )     (970 )       (40 )     (885 )     (705 )     (1,820 )
Depreciation and amortization       1,531       1,403       -       2,934         121       3,245       1,493       6,543  
EBITDA*       955       1,045       (33 )     1,964         81       2,360       788       4,723  
Severance and exit costs (7)       206       103       -       309         (5 )     652       (10 )     196  
Gains from asset dispositions and exchanges (8)       -       -       -       -         -       -       -       (29 )
Asset impairments and abandonments (9)       -       -       -       -         -       -       18       36  
Spectrum hosting contract termination, net (10)       -       -       -       -         -       -       -       (170 )
Access costs (11)       -       -       -       -         -       -       -       (17 )
Litigation (12)       -       -       -       -         -       (22 )     -       -  
Business combinations (13)       -       100       -       100         19       53       19       19  
Hurricane Sandy (14)       (7 )     -       -       (7 )       -       -       45       45  
Adjusted EBITDA*     $ 1,154     $ 1,248     $ (33 )   $ 2,366       $ 95     $ 3,043     $ 860     $ 4,803  
Capital expenditures (2)       1,901       1,666       -       3,567         175       3,884       1,923       5,370  
Adjusted EBITDA* less Capex     $ (747 )   $ (418 )   $ (33 )   $ (1,201 )     $ (80 )   $ (841 )   $ (1,063 )   $ (567 )
                                     
Adjusted EBITDA Margin*       14.5 %     17.5 %     NM       15.7 %       11.1 %     18.0 %     10.7 %     15.0 %
                                     
                                     
Selected item:                                    
Deferred tax asset valuation allowance     $ 381     $ 327     $ 4     $ 708       $ 524     $ 1,410     $ 546     $ 1,756  
                                                                     
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Millions)                          
        Combined (1) Quarter to Date     Combined (1) Year to Date
          12/31/13       9/30/13       12/31/12         12/31/13       12/31/12  
                           
Net Operating Revenues       $ 9,142     $ 8,681     $ 9,005       $ 35,493     $ 35,345  
Net Operating Expenses                          
Cost of services         2,704       2,756       2,659         10,847       10,936  
Cost of products         2,731       2,153       2,993         9,475       9,905  
Selling, general and administrative         2,546       2,548       2,590         9,908       9,798  
Depreciation and amortization         1,531       1,524       1,493         6,179       6,543  
Other, net         206       98       8         939       16  
Total net operating expenses         9,718       9,079       9,743         37,348       37,198  
Operating Loss         (576 )     (398 )     (738 )       (1,855 )     (1,853 )
Interest expense         (502 )     (691 )     (432 )       (2,053 )     (1,428 )
Equity in earnings (losses) of unconsolidated investments and other, net         55       3,070       (130 )       2,536       (913 )
(Loss) Income before Income Taxes         (1,023 )     1,981       (1,300 )       (1,372 )     (4,194 )
Income tax expense         (15 )     (1,598 )     (48 )       (1,646 )     (158 )
Net (Loss) Income       $ (1,038 )   $ 383     $ (1,348 )     $ (3,018 )   $ (4,352 )
                           
                           
                           
NON-GAAP RECONCILIATION - NET LOSS TO ADJUSTED EBITDA* (Unaudited)              
(Millions)                          
        Combined (1) Quarter to Date     Combined (1) Year to Date
          12/31/13       9/30/13       12/31/12         12/31/13       12/31/12  
                           
Net (Loss) Income       $ (1,038 )   $ 383     $ (1,348 )     $ (3,018 )   $ (4,352 )
Income tax expense         15       1,598       48         1,646       158  
(Loss) Income before Income Taxes         (1,023 )     1,981       (1,300 )       (1,372 )     (4,194 )
Equity in earnings (losses) of unconsolidated investments and other, net         (55 )     (3,070 )     130         (2,536 )     913  
Interest expense         502       691       432         2,053       1,428  
Operating Loss         (576 )     (398 )     (738 )       (1,855 )     (1,853 )
Depreciation and amortization         1,531       1,524       1,493         6,179       6,543  
EBITDA*         955       1,126       755         4,324       4,690  
Severance and exit costs (7)         206       98       (10 )       961       196  
Gains from asset dispositions and exchanges (8)         -       -       -         -       (29 )
Asset impairments and abandonments (9)         -       -       18         -       36  
Spectrum hosting contract termination, net (10)         -       -       -         -       (170 )
Access costs (11)         -       -       -         -       (17 )
Litigation (12)         -       -       -         (22 )     -  
Business combinations (13)         -       119       19         153       19  
Hurricane Sandy (14)         (7 )     -       45         (7 )     45  
Adjusted EBITDA*         1,154       1,343       827         5,409       4,770  
Capital expenditures (2)         1,901       1,841       1,923         7,451       5,370  
Adjusted EBITDA* less Capex       $ (747 )   $ (498 )   $ (1,096 )     $ (2,042 )   $ (600 )
                           
Adjusted EBITDA Margin*         14.5 %     16.8 %     10.3 %       16.9 %     14.9 %
                           
                           
Selected item:                          
Deferred tax asset valuation allowance       $ 381     $ 851     $ 550       $ 2,118     $ 1,760  
                           
                           
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
(Millions)                                  
        Successor     Predecessor
        Quarter

To

Date

  Quarter

To

Date

  Year

To

Date

    10 Days

Ended

  191 Days

Ended

  Quarter

To

Date

  Year

To

Date

          12/31/13       9/30/13       12/31/13         7/10/13       7/10/13       12/31/12       12/31/12  
Net Operating Revenues                                  
Service revenue                                  
Sprint platform:                                  
Postpaid (3)       $ 5,782     $ 5,201     $ 10,983       $ 634     $ 12,242     $ 5,674     $ 22,247  
Prepaid (4)         1,237       1,028       2,265         132       2,602       1,170       4,377  
Wholesale, affiliate and other         132       116       248         15       279       135       483  
Total Sprint platform         7,151       6,345       13,496         781       15,123       6,979       27,107  
Nextel platform:                                  
Postpaid (3)         -       -       -         -       217       218       1,454  
Prepaid (4)         -       -       -         -       50       68       525  
Total Nextel platform         -       -       -         -       267       286       1,979  
Transactions:                                  
Postpaid (3)         81       89       170         2       26       -       -  
Prepaid (4)         80       81       161         1       2       -       -  
Wholesale         10       8       18         -       -       -       -  
Total transactions         171       178       349         3       28       -       -  
                                   
Equipment revenue         1,161       636       1,797         74       1,707       1,010       3,248  
Total net operating revenues         8,483       7,159       15,642         858       17,125       8,275       32,334  
                                   
Net Operating Expenses                                  
Cost of services         2,248       2,087       4,335         240       4,703       2,210       9,034  
Cost of products         2,731       1,872       4,603         281       4,872       2,993       9,905  
Selling, general and administrative         2,444       2,100       4,544         256       4,780       2,436       9,290  
Depreciation and amortization         1,470       1,338       2,808         110       3,029       1,391       6,128  
Other, net         187       93       280         (5 )     627       3       28  
Total net operating expenses         9,080       7,490       16,570         882       18,011       9,033       34,385  
Operating Loss       $ (597 )   $ (331 )   $ (928 )     $ (24 )   $ (886 )   $ (758 )   $ (2,051 )
                                   
Supplemental Revenue Data                                  
Total retail service revenue       $ 7,180     $ 6,399     $ 13,579       $ 769     $ 15,139     $ 7,130     $ 28,603  
Total service revenue       $ 7,322     $ 6,523     $ 13,845       $ 784     $ 15,418     $ 7,265     $ 29,086  
                                   
                                   
                                   
WIRELESS NON-GAAP RECONCILIATION (Unaudited)
(Millions)                                  
        Successor     Predecessor
        Quarter

To

Date

  Quarter

To

Date

  Year

To

Date

    10 Days

Ended

  191 Days

Ended

  Quarter

To

Date

  Year

To

Date

          12/31/13       9/30/13       12/31/13         7/10/13       7/10/13       12/31/12       12/31/12  
                                   
Operating Loss       $ (597 )   $ (331 )   $ (928 )     $ (24 )   $ (886 )   $ (758 )   $ (2,051 )
Severance and exit costs (7)         187       93       280         (5 )     649       (10 )     196  
Gains from asset dispositions and exchanges (8)         -       -       -         -       -       -       (29 )
Asset impairments and abandonments (9)         -       -       -         -       -       13       31  
Spectrum hosting contract termination, net (10)         -       -       -         -       -       -       (170 )
Litigation (12)         -       -       -         -       (22 )     -       -  
Business combinations (13)         -       25       25         -       -       -       -  
Hurricane Sandy (14)         (7 )     -       (7 )       -       -       42       42  
Depreciation and amortization         1,470       1,338       2,808         110       3,029       1,391       6,128  
Adjusted EBITDA*         1,053       1,125       2,178         81       2,770       678       4,147  
Capital expenditures (2)         1,716       1,527       3,243         156       3,590       1,786       4,884  
Adjusted EBITDA* less Capex       $ (663 )   $ (402 )   $ (1,065 )     $ (75 )   $ (820 )   $ (1,108 )   $ (737 )
                                   
Adjusted EBITDA Margin*         14.4 %     17.2 %     15.7 %       10.3 %     18.0 %     9.3 %     14.2 %
                                   
                           
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)                          
(Millions)                          
        Combined (1) Quarter to Date     Combined (1) Year to Date
          12/31/13       9/30/13       12/31/12         12/31/13       12/31/12  
Net Operating Revenues                          
Service revenue                          
Sprint platform:                          
Postpaid (3)       $ 5,782     $ 5,835     $ 5,674       $ 23,225     $ 22,247  
Prepaid (4)         1,237       1,160       1,170         4,867       4,377  
Wholesale, affiliate and other         132       131       135         527       483  
Total Sprint platform         7,151       7,126       6,979         28,619       27,107  
Nextel platform:                          
Postpaid (3)         -       -       218         217       1,454  
Prepaid (4)         -       -       68         50       525  
Total Nextel platform         -       -       286         267       1,979  
Transactions:                          
Postpaid (3)         81       91       -         196       -  
Prepaid (4)         80       82       -         163       -  
Wholesale         10       8       -         18       -  
Total transactions         171       181       -         377       -  
                           
Equipment revenue         1,161       710       1,010         3,504       3,248  
Total net operating revenues         8,483       8,017       8,275         32,767       32,334  
                           
Net Operating Expenses                          
Cost of services         2,248       2,327       2,210         9,038       9,034  
Cost of products         2,731       2,153       2,993         9,475       9,905  
Selling, general and administrative         2,444       2,356       2,436         9,324       9,290  
Depreciation and amortization         1,470       1,448       1,391         5,837       6,128  
Other, net         187       88       3         907       28  
Total net operating expenses         9,080       8,372       9,033         34,581       34,385  
Operating Loss       $ (597 )   $ (355 )   $ (758 )     $ (1,814 )   $ (2,051 )
                           
Supplemental Revenue Data                          
Total retail service revenue       $ 7,180     $ 7,168     $ 7,130       $ 28,718     $ 28,603  
Total service revenue       $ 7,322     $ 7,307     $ 7,265       $ 29,263     $ 29,086  
                           
                           
                           
WIRELESS NON-GAAP RECONCILIATION (Unaudited)                          
(Millions)                          
        Combined (1) Quarter to Date     Combined (1) Year to Date
          12/31/13       9/30/13       12/31/12         12/31/13       12/31/12  
                           
Operating Loss       $ (597 )   $ (355 )   $ (758 )     $ (1,814 )   $ (2,051 )
Severance and exit costs (7)         187       88       (10 )       929       196  
Gains from asset dispositions and exchanges (8)         -       -       -         -       (29 )
Asset impairments and abandonments (9)         -       -       13         -       31  
Spectrum hosting contract termination, net (10)         -       -       -         -       (170 )
Litigation (12)         -       -       -         (22 )     -  
Business combinations (13)         -       25       -         25       -  
Hurricane Sandy (14)         (7 )     -       42         (7 )     42  
Depreciation and amortization         1,470       1,448       1,391         5,837       6,128  
Adjusted EBITDA*         1,053       1,206       678         4,948       4,147  
Capital expenditures (2)         1,716       1,683       1,786         6,833       4,884  
Adjusted EBITDA* less Capex       $ (663 )   $ (477 )   $ (1,108 )     $ (1,885 )   $ (737 )
                           
Adjusted EBITDA Margin*         14.4 %     16.5 %     9.3 %       16.9 %     14.2 %
                           
 
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
(Millions)                                  
        Successor     Predecessor
        Quarter

To

Date

  Quarter

To

Date

  Year

To

Date

    10 Days

Ended

  191 Days

Ended

  Quarter

To

Date

  Year

To

Date

          12/31/13       9/30/13       12/31/13         7/10/13       7/10/13       12/31/12       12/31/12  
Net Operating Revenues                                  
Voice       $ 386     $ 333     $ 719       $ 42     $ 771     $ 385     $ 1,627  
Data         81       57       138         7       188       96       398  
Internet         374       373       747         47       913       451       1,781  
Other         18       14       32         2       29       17       75  
Total net operating revenues         859       777       1,636         98       1,901       949       3,881  
                                   
Net Operating Expenses                                  
Costs of services and products         659       576       1,235         72       1,402       671       2,784  
Selling, general and administrative         95       84       179         11       227       100       451  
Depreciation and amortization         62       61       123         10       213       102       412  
Other, net         20       10       30         -       3       5       (12 )
Total net operating expenses         836       731       1,567         93       1,845       878       3,635  
Operating Income       $ 23     $ 46     $ 69       $ 5     $ 56     $ 71     $ 246  
                                   
                                   
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
(Millions)                                  
        Successor     Predecessor
        Quarter

To

Date

  Quarter

To

Date

  Year

To

Date

    10 Days

Ended

  191 Days

Ended

  Quarter

To

Date

  Year

To

Date

          12/31/13       9/30/13       12/31/13         7/10/13       7/10/13       12/31/12       12/31/12  
                                   
Operating Income       $ 23     $ 46     $ 69       $ 5     $ 56     $ 71     $ 246  
Severance and exit costs (7)         20       10       30         -       3       -       -  
Asset impairments and abandonments (8)         -       -       -         -       -       5       5  
Access costs (11)         -       -       -         -       -       -       (17 )
Hurricane Sandy (14)         -       -       -         -       -       3       3  
Depreciation and amortization         62       61       123         10       213       102       412  
Adjusted EBITDA*         105       117       222         15       272       181       649  
Capital expenditures (2)         82       73       155         11       165       58       242  
Adjusted EBITDA* less Capex       $ 23     $ 44     $ 67       $ 4     $ 107     $ 123     $ 407  
                                   
Adjusted EBITDA Margin*         12.2 %     15.1 %     13.6 %       15.3 %     14.3 %     19.1 %     16.7 %
                                   
                           
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
(Millions)                          
        Combined (1) Quarter to Date     Combined (1) Year to Date
          12/31/13       9/30/13       12/31/12         12/31/13       12/31/12  
Net Operating Revenues                          
Voice       $ 386     $ 375     $ 385       $ 1,490     $ 1,627  
Data         81       64       96         326       398  
Internet         374       420       451         1,660       1,781  
Other         18       16       17         61       75  
Total net operating revenues         859       875       949         3,537       3,881  
                           
Net Operating Expenses                          
Costs of services and products         659       648       671         2,637       2,784  
Selling, general and administrative         95       95       100         406       451  
Depreciation and amortization         62       71       102         336       412  
Other, net         20       10       5         33       (12 )
Total net operating expenses         836       824       878         3,412       3,635  
Operating Income       $ 23     $ 51     $ 71       $ 125     $ 246  
                           
                           
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
(Millions)                          
        Combined (1) Quarter to Date     Combined (1) Year to Date
          12/31/13       9/30/13       12/31/12         12/31/13       12/31/12  
                           
Operating Income       $ 23     $ 51     $ 71       $ 125     $ 246  
Severance and exit costs (7)         20       10       -         33       -  
Asset impairments and abandonments (8)         -       -       5         -       5  
Access costs (11)         -       -       -         -       (17 )
Hurricane Sandy (14)         -       -       3         -       3  
Depreciation and amortization         62       71       102         336       412  
Adjusted EBITDA*         105       132       181         494       649  
Capital expenditures (2)         82       84       58         320       242  
Adjusted EBITDA* less Capex       $ 23     $ 48     $ 123       $ 174     $ 407  
                           
Adjusted EBITDA Margin*         12.2 %     15.1 %     19.1 %       14.0 %     16.7 %
                           
   
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)  
(Millions)                   Successor   Predecessor  
                    Year           Year  
                    To   87 Days   191 Days   To  
                    Date   Ended   Ended   Date  
                      12/31/13       12/31/12       7/10/13       12/31/12    
Operating Activities                                  
Net loss                   $ (1,860 )   $ (27 )   $ (1,158 )   $ (4,325 )  
Depreciation and amortization                     2,934       -       3,245       6,543    
Provision for losses on accounts receivable                     261       -       194       561    
Share-based and long-term incentive compensation expense                     98       -       37       82    
Deferred income taxes                     32       1       1,586       209    
Gain on previously-held equity interests                     -       -       (2,926 )     -    
Equity in losses of unconsolidated investments, net                     -       -       482       1,114    
Interest expense related to beneficial conversion feature on convertible bond                     -       -       247       -    
Contribution to pension plan                     (7 )     -       -       (108 )  
Spectrum hosting contract termination, net (10)                     -       -       -       (170 )  
Call premiums on debt redemptions                     (180 )     -       -       -    
Amortization and accretion of long-term debt premiums and discounts                     (160 )     -       9       4    
Other working capital changes, net                     (924 )     (3 )     728       (802 )  
Other, net                     (255 )     29       227       (109 )  
Net cash (used in) provided by operating activities                     (61 )     -       2,671       2,999    
                                   
Investing Activities                                  
Capital expenditures (2)                     (3,847 )     -       (3,140 )     (4,261 )  
Expenditures relating to FCC licenses                     (146 )     -       (125 )     (198 )  
Change in short-term investments, net                     (4 )     -       1,224       (1,699 )  
Acquisitions, net of cash acquired                     (14,112 )     -       (4,039 )     -    
Investment and derivative in Sprint Communications, Inc.                     -       (3,100 )     -       -    
Investment in Clearwire (including debt securities)                     -       -       (308 )     (228 )  
Other, net                     1       -       3       11    
Net cash used in investing activities                     (18,108 )     (3,100 )     (6,385 )     (6,375 )  
                                   
Financing Activities                                  
Proceeds from debt and financings                     9,500       -       204       9,176    
Debt financing costs                     (147 )     -       (11 )     (134 )  
Repayments of debt and capital lease obligations                     (3,378 )     -       (362 )     (4,791 )  
Proceeds from issuance of common stock and warrants, net                     18,567       3,105       60       29    
Other, net                     (14 )     -       -       -    
Net cash provided by (used in) financing activities                     24,528       3,105       (109 )     4,280    
                                   
Net Increase (Decrease) in Cash and Cash Equivalents                     6,359       5       (3,823 )     904    
                                   
Cash and Cash Equivalents, beginning of period                     5       -       6,351       5,447    
                                   
Cash and Cash Equivalents, end of period                   $ 6,364     $ 5     $ 2,528     $ 6,351    
                                   
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)                              
(Millions)   Successor   Predecessor  
    Quarter   Quarter   Year               Quarter   Year  
    To   To   To   87 Days   10 Days   191 Days   To   To  
    Date   Date   Date   Ended   Ended   Ended   Date   Date  
    12/31/13   9/30/13   12/31/13   12/31/12   7/10/13   7/10/13   12/31/12   12/31/12  
                                   
Net Cash (Used in) Provided by Operating Activities   $ (761 )   $ 694     $ (61 )   $ -     $ 496     $ 2,671     $ 216     $ 2,999    
                                   
Capital expenditures (2)     (1,969 )     (1,878 )     (3,847 )     -       (188 )     (3,140 )     (1,477 )     (4,261 )  
Expenditures relating to FCC licenses, net     (115 )     (31 )     (146 )     -       (2 )     (125 )     (46 )     (198 )  
Other investing activities, net     1       -       1       -       -       3       (2 )     11    
Free Cash Flow*     (2,844 )     (1,215 )     (4,053 )     -       306       (591 )     (1,309 )     (1,449 )  
                                   
Debt financing costs     (40 )     (107 )     (147 )     -       -       (11 )     (44 )     (134 )  
(Decrease) increase in debt and other, net     (207 )     6,329       6,122       -       -       (158 )     3,316       4,385    
Acquisitions, net of cash acquired     -       (14,112 )     (14,112 )     -       (3,530 )     (4,039 )     -       -    
Proceeds from issuance of common stock and warrants, net     15       18,552       18,567       3,105       9       60       8       29    
Increase in restricted cash     3,050       (3,050 )     -       -       -       -       -       -    
Investment in Clearwire (including debt securities)     -       -       -       -       (68 )     (308 )     (100 )     (228 )  
Investment and derivative in Sprint Communications, Inc.     -       -       -       (3,100 )     -       -       -       -    
Other financing activities, net     1       (14 )     (14 )     -       -       -       -       -    
Net (Decrease) Increase in Cash, Cash Equivalents and Short-Term Investments   $ (25 )   $ 6,383     $ 6,363     $ 5     $ (3,283 )   $ (5,047 )   $ 1,871     $ 2,603    
                                                                   
   
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)  
(Millions)  
                Combined (1) Year to Date  
                12/31/13   12/31/12  
Operating Activities                      
Net loss               $ (3,018 )   $ (4,352 )  
Depreciation and amortization                 6,179       6,543    
Provision for losses on accounts receivable                 455       561    
Share-based and long-term incentive compensation expense                 135       82    
Deferred income taxes                 1,618       210    
Gain on previously-held equity interests                 (2,926 )     -    
Equity in losses of unconsolidated investments, net                 482       1,114    
Interest expense related to beneficial conversion feature on convertible bond                 247       -    
Contribution to pension plan                 (7 )     (108 )  
Spectrum hosting contract termination, net (10)                 -       (170 )  
Call premiums on debt redemptions                 (180 )     -    
Amortization and accretion of long-term debt premiums and discounts                 (151 )     4    
Other working capital changes, net                 (196 )     (805 )  
Other, net                 (28 )     (80 )  
Net cash provided by operating activities                 2,610       2,999    
                       
Investing Activities                      
Capital expenditures (2)                 (6,987 )     (4,261 )  
Expenditures relating to FCC licenses                 (271 )     (198 )  
Change in short-term investments, net                 1,220       (1,699 )  
Acquisitions, net of cash acquired                 (18,151 )     -    
Investment and derivative in Sprint Communications, Inc.                 -       (3,100 )  
Investment in Clearwire (including debt securities)                 (308 )     (228 )  
Other, net                 4       11    
Net cash used in investing activities                 (24,493 )     (9,475 )  
                       
Financing Activities                      
Proceeds from debt and financings                 9,704       9,176    
Debt financing costs                 (158 )     (134 )  
Repayments of debt and capital lease obligations                 (3,740 )     (4,791 )  
Proceeds from issuance of common stock and warrants, net                 18,627       3,134    
Other, net                 (14 )     -    
Net cash provided by financing activities                 24,419       7,385    
                       
Net Increase in Cash and Cash Equivalents                 2,536       909    
                       
Cash and Cash Equivalents, beginning of period                 3,828       5,447    
                       
Cash and Cash Equivalents, end of period               $ 6,364     $ 6,356    
                       
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)                      
(Millions)                      
    Combined (1) Quarter to Date  

Combined (1) Year to Date

 
    12/31/13   9/30/13   12/31/12   12/31/13   12/31/12  
                       
Net Cash (Used in) Provided by Operating Activities   $ (761 )   $ 1,190     $ 216     $ 2,610     $ 2,999    
                       
Capital expenditures (2)     (1,969 )     (2,066 )     (1,477 )     (6,987 )     (4,261 )  
Expenditures relating to FCC licenses, net     (115 )     (33 )     (46 )     (271 )     (198 )  
Other investing activities, net     1       -       (2 )     4       11    
Free Cash Flow*     (2,844 )     (909 )     (1,309 )     (4,644 )     (1,449 )  
                  -       -    
Debt financing costs     (40 )     (107 )     (44 )     (158 )     (134 )  
(Decrease) increase in debt and other, net     (207 )     6,329       3,316       5,964       4,385    
Acquisitions, net of cash acquired     -       (17,642 )     -       (18,151 )     -    
Proceeds from issuance of common stock and warrants, net     15       18,561       3,113       18,627       3,134    
Increase in restricted cash     3,050       (3,050 )     -       -       -    
Investment in Clearwire (including debt securities)     -       (68 )     (100 )     -       (228 )  
Investment and derivative in Sprint Communications, Inc.     -       -       (3,100 )     (308 )     (3,100 )  
Other financing activities, net     1       (14 )     -       (14 )     -    

Net (Decrease) Increase in Cash, Cash Equivalents and Short-Term Investments

 

  $ (25 )   $ 3,100     $ 1,876     $ 1,316     $ 2,608    
                                           
               
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Millions)
    Successor   Predecessor  
    12/31/13   12/31/12   12/31/12  
Assets              
Current assets              
Cash and cash equivalents   $ 6,364     $ 5     $ 6,351    
Short-term investments     1,105       -       1,849    
Accounts and notes receivable, net     3,570       6       3,658    
Device and accessory inventory     1,205       -       1,200    
Deferred tax assets     186       -       1    
Prepaid expenses and other current assets     628       -       700    
Total current assets     13,058       11       13,759    
               
Investments and other assets     601       3,104       1,833    
Property, plant and equipment, net     16,164       -       13,607    
Goodwill     6,434       -       359    
FCC licenses and other     41,824       -       20,677    
Definite-lived intangible assets, net     8,014       -       1,335    
Total   $ 86,095     $ 3,115     $ 51,570    
               
Liabilities and Shareholders' Equity              
Current liabilities              
Accounts payable   $ 3,312     $ -     $ 3,487    
Accrued expenses and other current liabilities     6,363       4       5,008    
Current portion of long-term debt, financing and capital lease obligations     994       -       379    
Total current liabilities     10,669       4       8,874    
               
Long-term debt, financing and capital lease obligations     32,017       -       23,962    
Deferred tax liabilities     14,227       1       7,047    
Other liabilities     3,598       -       4,600    
Total liabilities     60,511       5       44,483    
               
Shareholders' equity              
Common shares     39       -       6,019    
Paid-in capital     27,330       3,137       47,016    
Accumulated deficit     (1,887 )     (27 )     (44,815 )  
Accumulated other comprehensive loss     102       -       (1,133 )  
Total shareholders' equity     25,584       3,110       7,087    
Total   $ 86,095     $ 3,115     $ 51,570    
               
               
NET DEBT* (NON-GAAP) (Unaudited)              
(Millions)              
    Successor   Predecessor  
    12/31/13   12/31/12     12/31/12  
               
Total Debt   $ 33,011     $ -     $ 24,341    
Less: Cash and cash equivalents     (6,364 )     -       (6,351 )  
Less: Short-term investments     (1,105 )     -       (1,849 )  
Net Debt*   $ 25,542     $ -     $ 16,141    
                           
               
SCHEDULE OF DEBT (Unaudited)              
(Millions)              
            12/31/13  

ISSUER

  COUPON   MATURITY   PRINCIPAL  
Sprint Corporation              
7.25% Notes due 2021   7.250%   09/15/2021   $ 2,250  
7.875% Notes due 2023   7.875%   09/15/2023   4,250  
7.125% Notes due 2024   7.125%   06/15/2024   2,500  
Sprint Corporation           9,000  
               
Sprint Communications, Inc.              
Export Development Canada Facility (Tranche 2)   3.618%   12/15/2015   500  
6% Senior Notes due 2016   6.000%   12/01/2016   2,000  
9.125% Senior Notes due 2017   9.125%   03/01/2017   1,000  
8.375% Senior Notes due 2017   8.375%   08/15/2017   1,300  
9% Guaranteed Notes due 2018   9.000%   11/15/2018   3,000  
7% Guaranteed Notes due 2020   7.000%   03/01/2020   1,000  
7% Senior Notes due 2020   7.000%   08/15/2020   1,500  
11.5% Senior Notes due 2021   11.500%   11/15/2021   1,000  
9.25% Debentures due 2022   9.250%   04/15/2022   200  
6% Senior Notes due 2022   6.000%   11/15/2022   2,280  
Sprint Communications, Inc.           13,780  
               
Sprint Capital Corporation              
6.9% Senior Notes due 2019   6.900%   05/01/2019   1,729  
6.875% Senior Notes due 2028   6.875%   11/15/2028   2,475  
8.75% Senior Notes due 2032   8.750%   03/15/2032   2,000  
Sprint Capital Corporation           6,204  
               
Clearwire Communications LLC              
14.75% First-Priority Senior Secured Notes due 2016   14.750%   12/01/2016   300  
8.25% Exchangeable Notes due 2040   8.250%   12/01/2040   629  
Clearwire Communications LLC           929  
               
iPCS Inc.              
Second Lien Senior Secured Floating Rate Notes due 2014   3.492%   05/01/2014   181  
iPCS Inc.           181  
               
EKN Secured Equipment Facility ($1 Billion)   2.030%   03/30/2017   889  
               
Vendor financing notes - Clearwire Communications LLC       2015   20  
               
Tower financing obligation   6.092%   09/30/2021   339  
Capital lease obligations and other       2014 - 2022   187  
TOTAL PRINCIPAL           31,529  
               
Net premiums           1,482  
TOTAL DEBT           $ 33,011  
               

Supplemental information:

The Company had $2.1 billion of borrowing capacity available under our unsecured revolving bank credit facility as of December 31, 2013. Our unsecured revolving bank credit facility expires in February 2018.

In May 2012, certain of our subsidiaries entered into a $1.0 billion secured equipment credit facility to finance equipment-related purchases for Network Vision. The facility is equally divided into two consecutive tranches of $500 million, with the drawdown availability contingent upon Sprint's acquisition of equipment-related purchases from Ericsson, up to the maximum of each tranche, ending on May 31, 2013 and May 31, 2014, for the first and second tranche, respectively. Interest and principal are payable semi-annually with a final maturity of March 2017 for both tranches.

NOTES TO THE FINANCIAL INFORMATION (Unaudited)

(1) Except for the quarter-to-date December 31, 2013 period, financial results for 2013 and 2012 include a Predecessor period from January 1, 2012, through the closing of the SoftBank transaction on July 10, 2013, and a Successor period from October 5, 2012 through December 31, 2013. In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined the current year results of operations for the Predecessor and Successor periods. For purposes of presenting the comparative financial information in the tables, we have labeled the quarter-to-date December 31, 2013 period as Combined, however, these results are not combined but rather represent the consolidated results of operations in accordance with accounting principles generally accepted in the United States (GAAP).

(2) Capital expenditures is an accrual based amount that includes the changes in unpaid capital expenditures and excludes capitalized interest. Cash paid for capital expenditures includes total capitalized interest of $1 million, $13 million and $29 million for the predecessor third and second quarters and year-to-date periods of 2013, respectively, $16 million, $14 million and $30 million for the successor fourth and third quarters and year-to-date periods of 2013, respectively, and $52 million, $102 million, and $269 million for the third and second quarters and year-to-date periods of 2012, respectively, and can be found in the Condensed Consolidated Cash Flow Information and the Reconciliation to Free Cash Flow*.

(3) Postpaid subscribers on the Sprint platform are defined as retail subscribers on the CDMA network, including subscribers utilizing WiMax and LTE technology. Postpaid subscribers previously on the Nextel platform are defined as retail postpaid subscribers on the iDEN network through June 30, 2013. Postpaid subscribers from transactions are defined as retail postpaid subscribers acquired from U.S. Cellular in May 2013 and Clearwire in July 2013 who had not deactivated or been recaptured on the Sprint platform. Included in net additions for the Sprint platform are tablets and connected devices, which generally generate a significantly lower ARPU than other postpaid subscribers. During the fourth quarter 2013, net additions for the Sprint platform included approximately 466,000 tablets.

(4) Prepaid subscribers on the Sprint platform are defined as retail prepaid subscribers and session-based tablet users who utilize the CDMA network and WiMax and LTE technology via our multi-brand offerings. Prepaid subscribers previously on the Nextel platform are defined as retail prepaid subscribers who utilized iDEN technology through June 30, 2013. Prepaid subscribers from transactions are defined as retail prepaid subscribers acquired from U.S. Cellular in May 2013 and Clearwire in July 2013 who had not deactivated or been recaptured on the Sprint platform.

(5) Nextel Subscriber Recaptures are defined as the number of subscribers that deactivated service from the postpaid or prepaid Nextel platform, as applicable, during each period but remained with the Company as subscribers on the postpaid or prepaid Sprint platform, respectively. Subscribers that deactivated service from the Nextel platform and activated service on the Sprint platform are included in the Sprint platform net additions for the applicable period.

(6) The Postpaid and Prepaid Nextel Recapture Rates are defined as the portion of total subscribers that left the postpaid or prepaid Nextel platform, as applicable, during the period and were retained on the postpaid or prepaid Sprint platform, respectively.

(7) Severance and lease exit costs are primarily associated with workforce reductions and with exit costs associated with the Nextel platform and acquisition of Clearwire.

(8) For the first quarter of 2012, gains from asset dispositions and exchanges are primarily due to spectrum exchange transactions.

(9) For the first quarter of 2012, asset impairment and abandonment activity includes $18 million related to a change in our backhaul architecture in connection to our Network Vision design from microwave to a more cost effective fiber backhaul.

(10) On March 16, 2012, we elected to terminate the arrangement with LightSquared LP and LightSquared, Inc. (LightSquared). As we have no future service obligations with respect to the arrangement with LightSquared, we recognized $236 million of the advanced payments as other operating income in the first quarter of 2012. As a result of the termination of the hosting agreement, we impaired capitalized costs specific to LightSquared's 1.6 GHz spectrum that the company no longer intends to deploy which totaled $66 million.

(11) Favorable developments during the first quarter of 2012 relating to disagreements with local exchange carriers resulted in a reduction in expected access costs of $17 million.

(12) For the first quarter of 2013, litigation activity is primarily a result of favorable developments in connection with a tax (non-income) related contingency.

(13) For the third and second quarters of 2013, included in selling, general and administrative expenses are fees paid to unrelated parties for the transaction with SoftBank and our acquisition of Clearwire.

(14) Hurricane Sandy amounts for the fourth quarter and year-to-date periods of 2013 represent insurance recoveries. Hurricane Sandy charges for the fourth quarter of 2012, represent estimated hurricane-related charges of $45 million, consisting of customer credits, incremental roaming costs, network repairs and replacements.

*FINANCIAL MEASURES

On July 9, 2013, Sprint Communications, Inc. (formerly Sprint Nextel Corporation) completed its acquisition of Clearwire. On July 10, 2013 we consummated the SoftBank Merger with Starburst II, which immediately changed its name to Sprint Corporation (now referred to as the Company or Sprint). As a result of these transactions, the assets and liabilities of Sprint Communications, Inc. and Clearwire were adjusted to fair value on the respective closing dates. The Company's financial statement presentations herein distinguish between a predecessor period relating to Sprint Communications, Inc. for periods prior to the SoftBank Merger (Predecessor) and a successor period (Successor). The Successor information includes the activity and accounts of Sprint Corporation as of and for the three and twelve month periods ended December 31, 2013 and as of and for the 87 days ended December 31, 2012, which includes the activity and accounts of Sprint Communications, Inc., prospectively, beginning on July 11, 2013. The Predecessor information contained herein represents the historical basis of presentation for Sprint Communications, Inc. for all periods prior to the SoftBank Merger date on July 10, 2013. As a result of the valuation of assets acquired and liabilities assumed at fair value at the time of the SoftBank Merger and Clearwire Acquisition, the financial statements for the successor period are presented on a measurement basis different than the predecessor period, which was Sprint Communication’s historical cost, and are, therefore, not comparable.

In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined the current and prior year results of operations for the predecessor with successor results of operations on an unaudited combined basis. The combined information for the period October 5, 2012 (date of Starburst II incorporation) through December 31, 2013 does not purport to represent what our consolidated results of operations would have been if the acquisition had occurred as of the beginning of the first period presented. For purposes of presenting the comparative financial information in the tables, we have labeled the quarter-to-date December 31, 2013 results as combined, however, these results are not combined but rather represent the consolidated results of operations in accordance with accounting principles generally accepted in the United States (GAAP).

Sprint provides financial measures determined in accordance with GAAP and adjusted GAAP (non-GAAP). The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. These measurements should be considered in addition to, but not as a substitute for, financial information prepared in accordance with GAAP. Other than the use of non-GAAP combined results as described above, we have defined below each of the non-GAAP measures we use, but these measures may not be synonymous to similar measurement terms used by other companies.

Sprint provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint does not predict special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, Sprint does not provide reconciliations to GAAP of its forward-looking financial measures.

The measures used in this release include the following:

EBITDA is operating income/(loss) before depreciation and amortization. Adjusted EBITDA is EBITDA excluding severance, exit costs, and other special items. Adjusted EBITDA Margin represents Adjusted EBITDA divided by non-equipment net operating revenues for Wireless and Adjusted EBITDA divided by net operating revenues for Wireline. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, spectrum acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent non-cash current period costs associated with the use of long-lived tangible and definite-lived intangible assets. Adjusted EBITDA and Adjusted EBITDA Margin are calculations commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry.

Free Cash Flow is the cash provided by operating activities less the cash used in investing activities other than short-term investments, including changes in restricted cash, and amounts included as investments in Clearwire and Sprint Communications, Inc. during the period. We believe that Free Cash Flow provides useful information to investors, analysts and our management about the cash generated by our core operations after interest and dividends, if any, and our ability to fund scheduled debt maturities and other financing activities, including discretionary refinancing and retirement of debt and purchase or sale of investments.

Net Debt is consolidated debt, including current maturities, less cash and cash equivalents, short-term investments and if any, restricted cash. We believe that Net Debt provides useful information to investors, analysts and credit rating agencies about the capacity of the company to reduce the debt load and improve its capital structure.

SAFE HARBOR

This release includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan,” “providing guidance,” and similar expressions are intended to identify information that is not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to our network, subscriber growth, and liquidity, and statements expressing general views about future operating results — are forward-looking statements. Forward-looking statements are estimates and projections reflecting management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, the ability to operationalize the anticipated benefits from the SoftBank, Clearwire and U.S. Cellular transactions, the development and deployment of new technologies; efficiencies and cost savings of new technologies and services; customer and network usage; customer growth and retention; service, speed, coverage and quality; availability of devices; the timing of various events and the economic environment. Sprint believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date when made. Sprint undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our company's historical experience and our present expectations or projections. Factors that might cause such differences include, but are not limited to, those discussed in Sprint Nextel’s Annual Report on Form 10-K for the year ended December 31, 2012, our Quarterly Report on Form 10-Q for the second quarter of 2013, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, and when filed our Annual Report on Form 10-K for the year ended December 31, 2013. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

About Sprint

Sprint (NYSE: S) offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint served more than 55 million customers at the end of 2013 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The American Customer Satisfaction Index rated Sprint as the most improved company in customer satisfaction, across all 47 industries, during the last five years. Sprint has been named to the Dow Jones Sustainability Index (DSJI) North America in 2011, 2012 and 2013. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.

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i Sprint Spark actual deployment plans and speeds will be determined over time based on many factors, including build economics and the availability of equipment, devices and applications.

Contact(s):

Sprint Corporation
Media Contact:
Scott Sloat, 240-855-0164
scott.sloat@sprint.com
or
Investor Contact:
Brad Hampton, 800-259-3755
investor.relations@sprint.com