Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting Information, Profit (Loss) [Abstract]

Segment Information

Note 15. Segments

Sprint operates two reportable segments: Wireless and Wireline.

• Wireless primarily includes retail, wholesale and affiliate revenue from a wide array of wireless voice and data transmission services and equipment revenue from the sale of wireless devices and accessories in the U.S., Puerto Rico and the U.S. Virgin Islands.

• Wireline primarily includes revenue from domestic and international wireline voice and data communication services, including services to the cable multiple systems operators that resell our local and long distance services and use our back office systems and network assets in support of their telephone service provided over cable facilities primarily to residential end-user subscribers.

We define segment earnings as wireless or wireline operating (loss) income before other segment expenses such as depreciation, amortization, severance, exit costs, and goodwill and asset impairments solely and directly attributable to the segment. Expense and income items excluded from segment earnings are managed at the corporate level. Transactions between segments are generally accounted for based on market rates, which we believe approximate fair value. The Company generally re-establishes these rates at the beginning of each fiscal year. Over the past several years, there has been an industry-wide trend of lower rates due to increased competition from other wireline and wireless communications companies as well as cable and Internet service providers. Segment financial information is as follows:

Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
2011
Net operating revenues	$	30,301		$	3,370		$	8		$	33,679
Inter-segment revenues(1)	—			956			(956		)	—
Total segment operating expenses	(26,034		)	(3,526		)	953			(28,607		)
Segment earnings	$	4,267		$	800		$	5		5,072
Less:
Depreciation and amortization										(4,858		)
Other, net(2)										(106		)
Operating income										108
Interest expense										(1,011		)
Equity in losses of unconsolidated investments, net							$	(1,730	)	(1,730		)
Other expense, net										(3		)
Loss before income taxes										$	(2,636	)
Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
2010
Net operating revenues	$	28,597		$	3,959		$	7		$	32,563
Inter-segment revenues(1)	—			1,081			(1,081		)	—
Total segment operating expenses	(24,066		)	(3,950		)	1,086			(26,930		)
Segment earnings	$	4,531		$	1,090		$	12		5,633
Less:
Depreciation and amortization										(6,248		)
Other, net(2)										20
Operating loss										(595		)
Interest expense										(1,464		)
Equity in losses of unconsolidated investments, net							$	(1,286	)	(1,286		)
Other income, net										46
Loss before income taxes										$	(3,299	)

Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
2009
Net operating revenues	$	27,786		$	4,471		$	3		$	32,260
Inter-segment revenues(1)	—			1,158			(1,158		)	—
Total segment operating expenses	(22,588		)	(4,408		)	1,143			(25,853		)
Segment earnings	$	5,198		$	1,221		$	(12	)	6,407
Less:
Depreciation and amortization										(7,416		)
Other, net(2)										(389		)
Operating loss										(1,398		)
Interest expense										(1,450		)
Equity in losses of unconsolidated investments, net							$	(803	)	(803		)
Other income, net										157
Loss before income taxes										$	(3,494	)
Other Information	Wireless			Wireline			Corporate, Other and Eliminations(3)			Consolidated
	(in millions)
2011
Capital expenditures	$	2,702		$	168		$	260		$	3,130
Total assets	37,606			2,355			9,422			49,383
2010
Capital expenditures	$	1,455		$	223		$	257		$	1,935
Total assets	38,445			2,655			10,554			51,654
2009
Capital expenditures	$	1,149		$	267		$	187		$	1,603
Total assets	42,338			2,987			10,099			55,424

_________________

(1) Inter-segment revenues consist primarily of wireline services provided to the Wireless segment for resale to wireless subscribers.

(2) Other, net consists primarily of severance, exit costs and asset impairments offset by gains from other asset dispositions and exchanges. See note 8 for additional information on severance, exit costs and asset impairments.

(3) Corporate assets are not allocated to the operating segments and consist primarily of cash and cash equivalents, the corporate headquarters campus, our equity method investment in Clearwire, other assets managed at a corporate level and assets that were related to our 4G wireless broadband business that were subsequently contributed to Clearwire. Corporate capital expenditures include various administrative assets and assets that were contributed to Clearwire.

Operating Revenues by Service and Products	Wireless		Wireline		Corporate, Other and Eliminations(1)			Consolidated
	(in millions)
2011
Wireless services	$	27,129	$	—	$	—		$	27,129
Wireless equipment	2,911		—		—			2,911
Voice	—		1,915		(643		)	1,272
Data	—		460		(163		)	297
Internet	—		1,878		(151		)	1,727
Other	261		73		9			343
Total net operating revenues	$	30,301	$	4,326	$	(948	)	$	33,679
2010
Wireless services	$	25,677	$	—	$	—		$	25,677
Wireless equipment	2,703		—		—			2,703
Voice	—		2,249		(732		)	1,517
Data	—		519		(140		)	379
Internet	—		2,175		(209		)	1,966
Other	217		97		7			321
Total net operating revenues	$	28,597	$	5,040	$	(1,074	)	$	32,563
2009
Wireless services	$	25,286	$	—	$	—		$	25,286
Wireless equipment	1,954		—		—			1,954
Voice	—		2,563		(787		)	1,776
Data	—		662		(129		)	533
Internet	—		2,293		(242		)	2,051
Other	546		111		3			660
Total net operating revenues	$	27,786	$	5,629	$	(1,155	)	$	32,260

_______________

(1) Revenues eliminated in consolidation consist primarily of wireline services provided to the Wireless segment for resale to or use by wireless customers.