Sprint.com

  • Operating Income of $420 million is best in over seven years
  • Adjusted EBITDA* of more than $1.84 billion grew 22 percent year-over-year; third consecutive quarter of year-over-year growth
  • Launched revolutionary Sprint FramilySM plans and new marketing campaigns
    • Nearly 3 million customers now on Sprint Framily plans
  • Network deployments remain on track
    • 4G LTE coverage expected to reach 250 million people by mid-year
    • 3G and voice network rip and replace expected to be largely complete by mid-year
    • Sprint SparkTM now available in 24 markets with the launch of six more markets today including Orlando, Fla. and Oakland, Calif.

The company’s quarterly 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: 15177040 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.

As announced earlier this year, Sprint changed its fiscal year end to March 31. As a result, Sprint’s transition period is comprised of the three-month period of January 1, 2014 through March 31, 2014 and Sprint will file a Transition Report on Form 10-K for this period.

Financial results in the enclosed tables include a predecessor period for the first quarter of 2013 related to the results of operations of Sprint Communications, Inc. (formerly Sprint Nextel) prior to the closing of the SoftBank transaction on July 10, 2013, and the applicable successor periods. In order to present financial results in a way that offers investors a more meaningful comparison of the year-over-year quarterly results, we have combined the first quarter 2013 results of operations for the predecessor and successor periods. The enclosed remarks relating to first quarter of 2013 are in reference to an unaudited combined period, unless otherwise noted. For additional information, please reference the section titled Financial Measures. Trended financial performance metrics on a combined basis can also be found at our Investor Relations website at www.sprint.com/investors.

OVERLAND PARK, Kan. (BUSINESS WIRE), April 29, 2014 - Sprint Corporation (NYSE:S) today reported operating results for the quarter ended March 31, 2014, including consolidated operating income of $420 million, the company’s best performance in over seven years. Adjusted EBITDA* of over $1.84 billion in the quarter grew 22 percent over the prior year period, and Adjusted EBITDA* margin of 23.4 percent was the highest in almost six years.

“In the quarter, operating revenue and Adjusted EBITDA* both grew year-over-year even as investments in our network improvements continued,” said Dan Hesse, Sprint CEO. “With the expected mid-year completion of the rip and replacement of our core 3G and voice network, the ongoing roll-out of Sprint SparkTM, and the evolution of Sprint FramilySM, we plan to build the best customer experience in the industry.”

Net Loss Narrows as Adjusted EBITDA* Grows

Quarterly net loss was $151 million in the quarter, a 77 percent improvement from the first quarter of 2013, driven by growth in Adjusted EBITDA* of 22 percent compared to last year. Quarterly Adjusted EBITDA* of $1.84 billion improved by over $300 million compared to the first quarter of 2013, driven by growth in wireless Adjusted EBITDA*, partially offset by a decline in wireline. The growth in wireless Adjusted EBITDA* was primarily attributable to lower wireless expenses such as postpaid subsidy associated with impacts of the newly launched Sprint Easy Pay installment billing plan and device sales mix, lower customer care and cost of service expenses.

Subscriber Results

At the end of the quarter, the Sprint platform served nearly 54 million subscribers. During the quarter, Sprint platform postpaid gross additions grew by over 16 percent compared to the year-ago quarter, and retail smartphone sales were just under 5 million, representing 84 percent of total retail handset device sales in the quarter. Sprint reported a net loss of 231,000 Sprint platform postpaid customers during the quarter largely due to expected elevated churn levels related to service disruption associated with the company’s ongoing network overhaul. Sprint platform prepaid net loss of 364,000 customers was primarily caused by changes in the Lifeline program recertification process that impacted the Assurance Wireless® subscriber base. Sprint added 212,000 wholesale and affiliate customers during the quarter.

4G LTE, Sprint Spark and High-Definition Voice Deployment Continue to Expand

Sprint 4G LTE coverage is now available to more than 225 million people. The company continues to expect that by the middle of this year 4G LTE coverage will reach 250 million people. Additionally, Sprint’s replacement of its entire 3G and voice network and the nationwide roll-out of high-definition voice service are both expected to be largely complete by mid-year.

Deployment of Sprint Spark is also progressing with today’s launches in six more cities, including, Orlando, Fla. and Oakland, Calif. Sprint Spark is now available in 24 markets across the country and 14 Sprint Spark-capable devices are currently available, including the recently launched Samsung Galaxy S® 5 and HTC One (M8).

Sprint Spark is an innovative 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.

Join the Framily

Early in the quarter, Sprint introduced Sprint Framily, a revolutionary new pricing program that lets customers build their own group plans bringing together their family and friends. This offering uniquely addresses the changing demographics of American society.

Although Sprint Framily was only available in Sprint-branded stores during the quarter, it has grown faster than any new Sprint rate plan on record. Nearly 3 million customers are already enjoying the benefits of Sprint Framily and additional growth is anticipated as availability expands to other distribution channels.

Sprint Leadership and Innovation Gains Third-Party Recognition

For the fourth consecutive year, Sprint received a Best-In-Class Award from ATLANTIC-ACM, which named Sprint Wholesale Solutions as No. 1 for performance in the Voice Value category. In April, Sprint was the winner of the Informa Telecoms & Media MVNO’s Industry Awards 2013 Best Wholesale Operator for the second consecutive year. Sprint also received the 2014 Compass Intelligence A-List in M2M Award for its Sprint VelocitySM solution, winning in the Enabling Software or Technology for Automotive category.

Boost Mobile received its third consecutive highest ranking for Non-Contract Providers from J.D. Power in the 2014 U.S. Wireless Purchase Experience Non-Contract StudySM, Volume 1. It was the seventh J.D. Power award since 2011 for Boost, which was also named as a J.D. Power 2014 Customer Champion – one of 50 companies across many industries to earn this distinction. Additionally, Sprint CEO Dan Hesse was named a Highest Rated CEO by Glassdoor, and was the only telecommunications executive to be named by employees in the CEO rankings.

Sprint also received multiple awards for its corporate responsibility efforts. For the third straight year, Sprint was recognized as having the best phone buyback program among all major U.S. carriers by Compass Intelligence and, for the second consecutive year, Frost & Sullivan awarded Sprint its 2014 North American Award for Green Excellence. Sprint received the Supply Chain Leadership and Organizational Leadership awards from the U.S. Environmental Protection Agency for its supply chain engagement practices and the company’s continued focus to reduce greenhouse gas emissions. Finally, earlier this month PR News named Sprint as the 2014 best CSR corporation with more than 25,000 employees.

Forecast

The company now expects calendar 2014 Adjusted EBITDA* to be between $6.7 billion and $6.9 billion.

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

               
Wireless Operating Statistics (Unaudited)              
    Quarter To Date  
    3/31/14     12/31/13     3/31/13    
Net (Losses) Additions (in thousands)              
Sprint platform:              
Postpaid (3)   (231 )   58     12    
Prepaid (4)   (364 )   322     568    
Wholesale and affiliate   212     302     (224 )  
Total Sprint platform   (383 )   682     356    
Nextel platform:              

Postpaid (3)

  -     -     (572 )  

Prepaid (4)

  -     -     (199 )  
Total Nextel platform   -     -     (771 )  
Transactions:              
Postpaid (3)   (102 )   (127 )   -    
Prepaid (4)   (51 )   (103 )   -    
Wholesale   69     25     -    
Total transactions   (84 )   (205 )   -    
               
Total retail postpaid net losses   (333 )   (69 )   (560 )  
Total retail prepaid net (losses) additions   (415 )   219     369    
Total wholesale and affiliate net additions (losses)   281     327     (224 )  
Total Wireless Net (Losses) Additions   (467 )   477     (415 )  
               
End of Period Subscribers (in thousands)              
Sprint platform:              
Postpaid (3)   29,918     30,149     30,257    
Prepaid (4)   15,257     15,621     15,701    
Wholesale and affiliate   8,376     8,164     7,938    
Total Sprint platform   53,551     53,934     53,896    
Nextel platform:              
Postpaid (3)   -     -     1,060    
Prepaid (4)   -     -     255    
Total Nextel platform   -     -     1,315    
Transactions: (a)              
Postpaid (3)   586     688     -    
Prepaid (4)   550     601     -    
Wholesale   200     131     -    
Total transactions   1,336     1,420     -    
               
Total retail postpaid end of period subscribers   30,504     30,837     31,317    
Total retail prepaid end of period subscribers   15,807     16,222     15,956    
Total wholesale and affiliate end of period subscribers   8,576     8,295     7,938    
Total End of Period Subscribers   54,887     55,354     55,211    
               
Supplemental Data - Connected Devices              
End of Period Subscribers (in thousands)              
Retail postpaid   968     922     824    
Wholesale and affiliate   3,882     3,578     2,803    
Total   4,850     4,500     3,627    
               
               
Churn              
Sprint platform:              
Postpaid   2.11 %   2.07 %   1.84 %  
Prepaid   4.33 %   3.01 %   3.05 %  
Nextel platform:              
Postpaid   -     -     7.57 %  
Prepaid   -     -     12.46 %  
Transactions: (a)              
Postpaid   5.48 %   5.48 %   -    
Prepaid   5.11 %   8.18 %   -    
               
Total retail postpaid churn   2.18 %   2.15 %   2.09 %  
Total retail prepaid churn   4.35 %   3.22 %   3.26 %  
               
Nextel Platform Subscriber Recaptures              
Subscribers (in thousands) (5):              
Postpaid   -     -     264    
Prepaid   -     -     67    
Rate (6):              
Postpaid   -     -     46 %  
Prepaid   -     -     34 %  

 

 

(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)      
           
    Quarter   Quarter     Quarter
    To   To     To
    Date   Date     Date
    3/31/14   12/31/13     3/31/13
ARPU (b)              
Sprint platform:              
Postpaid   $ 63.52   $ 64.11     $ 63.67
Prepaid   $ 26.45   $ 26.78     $ 25.95
Nextel platform:              
Postpaid   $ -   $ -     $ 35.43
Prepaid   $ -   $ -     $ 31.75
Transactions: (a)              
Postpaid   $ 37.26   $ 36.30     $ -
Prepaid   $ 43.80   $ 40.80     $ -
               
Total retail postpaid ARPU   $ 62.98   $ 63.44     $ 62.47
Total retail prepaid ARPU   $ 27.07   $ 27.34     $ 26.08

 

     
     

(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.

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

Predecessor

    Combined (1)  
    Quarter   Quarter   Quarter     Quarter     Quarter  
    To   To   To     To     To  
    Date   Date   Date     Date     Date  
    3/31/14   12/31/13   3/31/13     3/31/13     3/31/13  
                           
Net Operating Revenues   $ 8,875     $ 9,142     $ -       $ 8,793       $ 8,793    
Net Operating Expenses                          
Cost of services     2,622       2,704       -         2,640         2,640    
Cost of products     2,038       2,731       -         2,293         2,293    
Selling, general and administrative     2,371       2,546       14         2,336         2,350    
Depreciation and amortization     1,297       1,531       -         1,492         1,492    
Other, net     127       206       -         3         3    
Total net operating expenses     8,455       9,718       14         8,764         8,778    
Operating Income (Loss)     420       (576 )     (14 )       29         15    
Interest expense     (516 )     (502 )     -         (432 )       (432 )  
Equity in earnings (losses) of unconsolidated investments and other, net     1       55       6         (202 )       (196 )  
Loss before Income Taxes     (95 )     (1,023 )     (8 )       (605 )       (613 )  
Income tax expense     (56 )     (15 )     (1 )       (38 )       (39 )  
Net Loss   $ (151 )   $ (1,038 )   $ (9 )     $ (643 )     $ (652 )  
                           
Basic Net Loss Per Common Share   $ (0.04 )   $ (0.26 )     NM       $ (0.21 )       NM    
Diluted Net Loss Per Common Share   $ (0.04 )   $ (0.26 )     NM       $ (0.21 )       NM    
Basic Weighted Average Common Shares outstanding     3,949       3,944       NM         3,013         NM    
Diluted Weighted Average Common Shares outstanding     3,949       3,944       NM         3,013         NM    
                           
Effective Tax Rate     -58.9 %     -1.5 %     -12.5 %       -6.3 %       -6.4 %  
                           
                           
NON-GAAP RECONCILIATION - NET LOSS TO ADJUSTED EBITDA* (Unaudited)  
(Millions)  
    Successor    

Predecessor

    Combined (1)  
    Quarter   Quarter   Quarter     Quarter     Quarter  
    To   To   To     To     To  
    Date   Date   Date     Date     Date  
    3/31/14   12/31/13   3/31/13     3/31/13     3/31/13  
                           
Net Loss   $ (151 )   $ (1,038 )   $ (9 )     $ (643 )     $ (652 )  
Income tax expense     56       15       1         38         39    
Loss before Income Taxes     (95 )     (1,023 )     (8 )       (605 )       (613 )  
Equity in earnings (losses) of unconsolidated investments and other, net     (1 )     (55 )     (6 )       202         196    
Interest expense     516       502       -         432         432    
Operating Income (Loss)     420       (576 )     (14 )       29         15    
Depreciation and amortization     1,297       1,531       -         1,492         1,492    
EBITDA*     1,717       955       (14 )       1,521         1,507    
Severance and exit costs (7)     52       206       -         25         25    
Asset impairments (8)     75       -       -         -         -    
Litigation (9)     -       -       -         (22 )       (22 )  
Hurricane Sandy (10)     -       (7 )     -         -         -    
Adjusted EBITDA*   $ 1,844     $ 1,154     $ (14 )     $ 1,524       $ 1,510    
Capital expenditures (2)     1,057       1,901       -         1,812         1,812    
Adjusted EBITDA* less Capex   $ 787     $ (747 )   $ (14 )     $ (288 )     $ (302 )  
                           
Adjusted EBITDA Margin*     23.4 %     14.5 %     NM         19.1 %       18.9 %  
                           
                           
Selected item:                          
Increase in deferred tax asset valuation allowance   $ 82     $ 381     $ -       $ 265       $ 265    
                                               
                 
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)                
(Millions)                
    Successor    

Predecessor

 
    Quarter   Quarter     Quarter  
    To   To     To  
    Date   Date     Date  
    3/31/14   12/31/13     3/31/13  
Net Operating Revenues                
Service revenue                
Sprint platform:                
Postpaid (3)   $ 5,719     $ 5,782       $ 5,773    
Prepaid (4)     1,232       1,237         1,194    
Wholesale, affiliate and other     145       132         133    
Total Sprint platform     7,096       7,151         7,100    
Nextel platform:                
Postpaid (3)     -       -         143    
Prepaid (4)     -       -         33    
Total Nextel platform     -       -         176    
Transactions:                
Postpaid (3)     70       81         -    
Prepaid (4)     75       80         -    
Wholesale     14       10         -    
Total transactions     159       171         -    
                 
Equipment revenue     999       1,161         813    
Total net operating revenues     8,254       8,483         8,089    
                 
Net Operating Expenses                
Cost of services     2,106       2,248         2,171    
Cost of products     2,038       2,731         2,293    
Selling, general and administrative     2,273       2,444         2,230    
Depreciation and amortization     1,224       1,470         1,393    
Other, net     123       187         -    
Total net operating expenses     7,764       9,080         8,087    
Operating Income (Loss)   $ 490     $ (597 )     $ 2    
                 
Supplemental Revenue Data                
Total retail service revenue   $ 7,096     $ 7,180       $ 7,143    
Total service revenue   $ 7,255     $ 7,322       $ 7,276    
                 
                 
                 
WIRELESS NON-GAAP RECONCILIATION (Unaudited)                
(Millions)                
    Successor    

Predecessor

 
    Quarter   Quarter     Quarter  
    To   To     To  
    Date   Date     Date  
    3/31/14   12/31/13     3/31/13  
                 
Operating Income (Loss)   $ 490     $ (597 )     $ 2    
Severance and exit costs (7)     51       187         22    
Asset impairments (8)     72       -         -    
Litigation (9)     -       -         (22 )  
Hurricane Sandy (10)     -       (7 )       -    
Depreciation and amortization     1,224       1,470         1,393    
Adjusted EBITDA*     1,837       1,053         1,395    
Capital expenditures (2)     930       1,716         1,706    
Adjusted EBITDA* less Capex   $ 907     $ (663 )     $ (311 )  
                 
                             
Adjusted EBITDA Margin*     25.3 %     14.4 %       19.2 %  
                             
                 
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)                
(Millions)                
   

Successor

   

Predecessor

 
    Quarter   Quarter     Quarter  
    To   To     To  
    Date   Date     Date  
    3/31/14   12/31/13     3/31/13  
Net Operating Revenues                
Voice   $ 352     $ 386       $ 352    
Data     62       81         94    
Internet     345       374         434    
Other     11       18         13    
Total net operating revenues     770       859         893    
                 
Net Operating Expenses                
Costs of services and products     668       659         661    
Selling, general and administrative     90       95         104    
Depreciation and amortization     69       62         98    
Other, net     5       20         3    
Total net operating expenses     832       836         866    
Operating (Loss) Income   $ (62 )   $ 23       $ 27    
                 
                 
WIRELINE NON-GAAP RECONCILIATION (Unaudited)                
(Millions)                
    Successor    

Predecessor

 
    Quarter   Quarter     Quarter  
    To   To     To  
    Date   Date     Date  
    3/31/14   12/31/13     3/31/13  
                 
Operating (Loss) Income   $ (62 )   $ 23       $ 27    
Severance and exit costs (7)     2       20         3    
Asset impairments (8)     3       -         -    
Depreciation and amortization     69       62         98    
Adjusted EBITDA*     12       105         128    
Capital expenditures (2)     72       82         61    
Adjusted EBITDA* less Capex   $ (60 )   $ 23       $ 67    
                 
Adjusted EBITDA Margin*     1.6 %     12.2 %       14.3 %  
                             
 
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
(Millions)   Successor     Predecessor     Combined (1)  
    Quarter   Quarter   Quarter     Quarter     Quarter  
    To   To   To     To     To  
    Date   Date   Date     Date     Date  
    3/31/14   12/31/13   3/31/13     3/31/13     3/31/13  
Operating Activities                          
Net loss   $ (151 )   $ (1,038 )   $ (9 )     $ (643 )     $ (652 )  
Depreciation and amortization     1,297       1,531       -         1,492         1,492    
Provision for losses on accounts receivable     153       142       -         83         83    
Share-based and long-term incentive compensation expense     35       40       -         17         17    
Deferred income taxes     46       10       (1 )       24         23    
Equity in losses of unconsolidated investments, net     -       -       -         202         202    
Contribution to pension plan     (10 )     (7 )     -         -         -    
Call premiums on debt redemptions     -       (180 )     -         -         -    
Amortization and accretion of long-term debt premiums and discounts     (74 )     (160 )     -         14         14    
Other working capital changes, net     (549 )     (954 )     (3 )       (276 )       (279 )  
Other, net     (225 )     (145 )     11         27         38    
Net cash provided by (used in) operating activities     522       (761 )     (2 )       940         938    
                           
Investing Activities                          
Capital expenditures (2)     (1,488 )     (1,969 )     -         (1,381 )       (1,381 )  
Expenditures relating to FCC licenses     (152 )     (115 )     -         (55 )       (55 )  
Change in short-term investments, net     (115 )     331       -         355         355    
Decrease in restricted cash     -       3,050       -         -         -    
Investment in Clearwire (including debt securities)     -       -       -         (80 )       (80 )  
Other, net     (1 )     1       -         3         3    
Net cash (used in) provided by investing activities     (1,756 )     1,298       -         (1,158 )       (1,158 )  
                           
Financing Activities                          
Proceeds from debt and financings     -       2,674       -         204         204    
Debt financing costs     (1 )     (40 )     -         (10 )       (10 )  
Repayments of debt and capital lease obligations     (159 )     (2,881 )     -         (59 )       (59 )  
Proceeds from issuance of common stock and warrants, net     -       15       -         7         7    
Other, net     -       1       -         -         -    
Net cash (used in) provided by financing activities     (160 )     (231 )     -         142         142    
                           
Net (Decrease) Increase in Cash and Cash Equivalents     (1,394 )     306       (2 )       (76 )       (78 )  
                           
Cash and Cash Equivalents, beginning of period     6,364       6,058       5         6,351         6,356    
                           
Cash and Cash Equivalents, end of period   $ 4,970     $ 6,364     $ 3       $ 6,275       $ 6,278    
                           
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)  
(Millions)   Successor     Predecessor     Combined (1)  
    Quarter   Quarter   Quarter     Quarter     Quarter  
    To   To   To     To     To  
    Date   Date   Date     Date     Date  
    3/31/14   12/31/13   3/31/13     3/31/13     3/31/13  
                           
Net Cash Provided by (Used in) Operating Activities   $ 522     $ (761 )   $ (2 )     $ 940       $ 938    
                          -    
Capital expenditures (2)     (1,488 )     (1,969 )     -         (1,381 )       (1,381 )  
Expenditures relating to FCC licenses     (152 )     (115 )     -         (55 )       (55 )  
Other investing activities, net     (1 )     1       -         3         3    
Free Cash Flow*     (1,119 )     (2,844 )     (2 )       (493 )       (495 )  
                           
Debt financing costs     (1 )     (40 )     -         (10 )       (10 )  
(Decrease) increase in debt and other, net     (159 )     (207 )     -         145         145    
Proceeds from issuance of common stock and warrants, net     -       15       -         7         7    
Decrease in restricted cash     -       3,050       -         -         -    
Investment in Clearwire (including debt securities)     -       -       -         (80 )       (80 )  
Other financing activities, net     -       1       -         -         -    
Net Decrease in Cash, Cash Equivalents and Short-Term Investments   $ (1,279 )   $ (25 )   $ (2 )     $ (431 )     $ (433 )  
                           
           
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)          
(Millions)          
    Successor  
    3/31/14   12/31/13  
Assets          
Current assets          
Cash and cash equivalents   $ 4,970     $ 6,364    
Short-term investments     1,220       1,105    
Accounts and notes receivable, net     3,607       3,570    
Device and accessory inventory     982       1,205    
Deferred tax assets     128       186    
Prepaid expenses and other current assets     672       628    
Total current assets     11,579       13,058    
           
Investments and other assets     892       601    
Property, plant and equipment, net     16,299       16,164    
Goodwill     6,383       6,434    
FCC licenses and other     41,978       41,824    
Definite-lived intangible assets, net     7,558       8,014    
Total   $ 84,689     $ 86,095    
           
Liabilities and Shareholders' Equity          
Current liabilities          
Accounts payable   $ 3,163     $ 3,312    
Accrued expenses and other current liabilities     5,544       6,363    
Current portion of long-term debt, financing and capital lease obligations     991       994    
Total current liabilities     9,698       10,669    
           
Long-term debt, financing and capital lease obligations     31,787       32,017    
Deferred tax liabilities     14,207       14,227    
Other liabilities     3,685       3,598    
Total liabilities     59,377       60,511    
           
Shareholders' equity          
Common shares     39       39    
Paid-in capital     27,364       27,330    
Accumulated deficit     (2,048 )     (1,887 )  
Accumulated other comprehensive loss     (43 )     102    
Total shareholders' equity     25,312       25,584    
Total   $ 84,689     $ 86,095    
           
           
NET DEBT* (NON-GAAP) (Unaudited)          
(Millions)          
    Successor  
    3/31/14   12/31/13  
           
Total Debt   $ 32,778     $ 33,011    
Less: Cash and cash equivalents     (4,970 )     (6,364 )  
Less: Short-term investments     (1,220 )     (1,105 )  
Net Debt*   $ 26,588     $ 25,542    
           
               
SCHEDULE OF DEBT (Unaudited)              
(Millions)              
            3/31/14  
ISSUER   COUPON   MATURITY   PRINCIPAL  
Sprint Corporation              
7.25% Notes due 2021   7.250%   09/15/2021   $ 2,250  
7.875% Notes due 2023   7.875%   09/15/2023     4,250  
7.125% Notes due 2024   7.125%   06/15/2024     2,500  
Sprint Corporation             9,000  
               
Sprint Communications, Inc.              
Export Development Canada Facility (Tranche 2)   3.579%   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   3.488%   05/01/2014     181  
iPCS Inc.             181  
               
EKN Secured Equipment Facility ($1 Billion)   2.030%   03/30/2017     762  
               
Vendor financing notes - Clearwire Communications LLC       2015     13  
               
Tower financing obligation   6.092%   09/30/2021     327  
Capital lease obligations and other       2014 - 2023     174  
TOTAL PRINCIPAL             31,370  
               
Net premiums             1,408  
TOTAL DEBT           $ 32,778  
                 

Supplemental information:

The Company had $2.4 billion of borrowing capacity available under our unsecured revolving bank credit facility as of March 31, 2014. Our unsecured revolving bank credit facility expires in February 2018.

In May 2012, certain of our subsidiaries entered into a $1.0 billion secured equipment credit facility to finance equipment-related purchases 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 March 31, 2014 and December 31, 2013 periods, financial results include a Predecessor period from January 1, 2012, through the closing of the SoftBank transaction on July 10, 2013, and a Successor period from October 5, 2012 through December 31, 2013. In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined results of operations and cash flows for the Predecessor and Successor periods for the three-month period ended March 31, 2013. (See Financial Measures for further information)

(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 $13 million for the successor quarter-to-date March 31, 2014 period and $15 million for the predecessor quarter-to-date March 31, 2013 period 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 postpaid devices with an active line of service 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, which was shut-down on 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. During the quarter-to-date March 31, 2014 period, the Sprint platform subscriber results included approximately 516,000 tablet net adds, which generally generate a significantly lower ARPU than other postpaid subscribers.

(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 the iDEN network, which was shut-down on 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 exit costs associated with the Nextel platform and those related to exiting certain operations of Clearwire.

(8) For the quarter-to-date March 31, 2014 period, asset impairment activity is primarily due to network equipment assets that are no longer necessary for management's strategic plans.

(9) For the quarter-to-date March 31, 2013 period, litigation activity is primarily a result of favorable developments in connection with a tax (non-income) related contingency.

(10) Hurricane Sandy amounts for the quarter-to-date December 31, 2013 period represent insurance recoveries.

*FINANCIAL MEASURES

On July 9, 2013, Sprint Communications, Inc. (formerly Sprint Nextel Corporation) completed its acquisition of Clearwire. On July 10, 2013 we consummated the SoftBank Merger with Starburst II, which immediately changed its name to Sprint Corporation (now referred to as the Company or Sprint). As a result of these transactions, the assets and liabilities of Sprint Communications, Inc. and Clearwire were adjusted to fair value on the respective closing dates. The Company's financial statement presentations herein distinguish between a predecessor period relating to Sprint Communications, Inc. for periods prior to the SoftBank Merger (Predecessor) and a successor period (Successor). The Successor information represents Sprint Corporation, which includes the activity and accounts of Sprint Communications as of and for the three-month periods ended March 31, 2014 and December 31, 2013. The accounts and activity for the successor periods from October 5, 2012 (date of inception) to December 31, 2012 and from January 1, 2103 to July 10, 2013 consist of the activity of Starburst II prior to the close of the SoftBank Merger. The Predecessor information contained herein represents the historical basis of presentation for Sprint Communications, Inc. for all periods prior to the SoftBank Merger date on July 10, 2013. As a result of the valuation of assets acquired and liabilities assumed at fair value at the time of the SoftBank Merger and Clearwire Acquisition, the financial statements for the successor period are presented on a measurement basis different than the predecessor period, which was Sprint Communication’s historical cost, and are, therefore, not comparable.

In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined the current and prior year results of operations for the predecessor with successor results of operations on an unaudited combined basis. The combined information for the three-month period ended March 31, 2013 does not purport to represent what our consolidated results of operations would have been if the acquisition had occurred as of the beginning of 2013.

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

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

The measures used in this release include the following:

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

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 Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, and when filed our Transition Report on Form 10-K for the period ended March 31, 2014. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

About Sprint

Sprint (NYSE:S) offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint served nearly 55 million customers as of March 31, 2014 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; leading 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 (DJSI) 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.

###

1 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:
Scott Sloat, 240-855-0164
scott.sloat@sprint.com
or
Investors:
Brad Hampton, 800-259-3755
investor.relations@sprint.com


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