EX-99.1 2 dex991.htm PRESS RELEASE ANNOUNCING FOURTH QUARTER 2013 AND YEAR END RESULTS Sprint 4Q13 Earnings Release

News Release

Media Contact:
Scott Sloat
240-855-0164
scott.sloat@sprint.com

Investor Contact:
Brad Hampton
800-259-3755
investor.relations@sprint.com

SPRINT REPORTS FOURTH QUARTER AND FULL YEAR 2013 RESULTS
 

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. - Feb.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 voicei.

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
12/31/13
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
 
 
 
 
 
 
 
 
 
 
Cost 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