
Note 14.	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 (handsets and tablets) 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 provided to other communications companies and targeted business and consumer subscribers, in addition to our Wireless segment.

We define segment earnings as wireless or wireline operating (loss) income before other segment expenses such as depreciation, amortization, severance, exit costs, goodwill impairments, asset impairments, and other items, if any, solely and directly attributable to the segment representing items of a non-recurring or unusual nature. 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:



Successor
Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
Three Months Ended September 30, 2014
Net operating revenues	$	7,929		$	555		$	4		$	8,488
Inter-segment revenues⁽¹⁾	—			153			(153		)	—
Total segment operating expenses	(6,559		)	(681		)	138			(7,102		)
Segment earnings	$	1,370		$	27		$	(11	)	1,386
Less:
Depreciation										(898		)
Amortization										(396		)
Other, net⁽²⁾										(284		)
Operating loss										(192		)
Interest expense										(510		)
Other income, net										8
Loss before income taxes										$	(694	)

Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
Three Months Ended September 30, 2013
Net operating revenues	$	7,159		$	586		$	4		$	7,749
Inter-segment revenues⁽¹⁾	—			191			(191		)	—
Total segment operating expenses	(6,034		)	(660		)	193			(6,501		)
Segment earnings	$	1,125		$	117		$	6		1,248
Less:
Depreciation										(942		)
Amortization										(461		)
Other, net⁽²⁾										(203		)
Operating loss										(358		)
Interest expense										(416		)
Other income, net										165
Loss before income taxes										$	(609	)



Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
Six Months Ended September 30, 2014
Net operating revenues	$	16,122		$	1,148		$	7		$	17,277
Inter-segment revenues⁽¹⁾	—			306			(306		)	—
Total segment operating expenses	(12,959		)	(1,392		)	287			(14,064		)
Segment earnings	$	3,163		$	62		$	(12	)	3,213
Less:
Depreciation										(1,766		)
Amortization										(809		)
Other, net⁽²⁾										(311		)
Operating income										327
Interest expense										(1,022		)
Other income, net										9
Loss before income taxes										$	(686	)

Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
Six Months Ended September 30, 2013
Net operating revenues	$	7,159		$	586		$	4		$	7,749
Inter-segment revenues⁽¹⁾	—			191			(191		)	—
Total segment operating expenses	(6,034		)	(660		)	171			(6,523		)
Segment earnings	$	1,125		$	117		$	(16	)	1,226
Less:
Depreciation										(942		)
Amortization										(461		)
Other, net⁽²⁾										(203		)
Operating loss										(380		)
Interest expense										(416		)
Other income, net										12
Loss before income taxes										$	(784	)

Other Information	Wireless			Wireline			Corporate and Other			Consolidated
	(in millions)
Capital expenditures for the six months ended September 30, 2014	$	2,109		$	124		$	156		$	2,389
Capital expenditures for the six months ended September 30, 2013	$	1,743		$	73		$	62		$	1,878



Predecessor
Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
10 Days Ended July 10, 2013
Net operating revenues	$	858		$	74		$	—		$	932
Inter-segment revenues⁽¹⁾	—			24			(24		)	—
Total segment operating expenses	(777		)	(83		)	23			(837		)
Segment earnings	$	81		$	15		$	(1	)	95
Less:
Depreciation										(113		)
Amortization										(8		)
Other, net⁽²⁾										(14		)
Operating loss										(40		)
Interest expense										(275		)
Equity in losses of unconsolidated investments							$	(23	)
Gain on previously-held equity interests							2,926			2,903
Other income, net										2
Income before income taxes										$	2,590

Statement of Operations Information	Wireless			Wireline			Corporate, Other and Eliminations			Consolidated
	(in millions)
101 Days Ended July 10, 2013
Net operating revenues	$	9,036		$	769		$	4		$	9,809
Inter-segment revenues⁽¹⁾	—			239			(239		)	—
Total segment operating expenses	(7,661		)	(864		)	235			(8,290		)
Segment earnings	$	1,375		$	144		$	—		1,519
Less:
Depreciation										(1,676		)
Amortization										(77		)
Other, net⁽²⁾										(680		)
Operating loss										(914		)
Interest expense										(703		)
Equity in losses of unconsolidated investments							$	(280	)
Gain on previously-held equity interests							2,926			2,646
Other income, net										19
Income before income taxes										$	1,048

Other Information	Wireless			Wireline			Corporate and Other			Consolidated
	(in millions)
Capital expenditures for the 101 days ended July 10, 2013	$	1,570		$	110		$	79		$	1,759

_________________


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

(2)

Other, net for the Successor three and six-month periods ended September 30, 2014 consists of $284 million and $311 million, respectively, of severance and exit costs. Other, net for both the Successor three and six-month periods ended September 30, 2013 consists of $103 million of severance and exit costs and $100 million of business combination fees paid to unrelated parties necessary for the transactions with SoftBank and Clearwire (included in our corporate segment and classified in our consolidated statements of comprehensive income (loss) as selling, general and administrative expenses). Other, net for the 101-day period ended July 10, 2013 consists of severance and exit costs of $627 million and $53 million of business combination fees paid to unrelated parties in connection with the transactions with SoftBank and Clearwire (included in our corporate segment and classified in our consolidated statements of comprehensive income (loss) as selling, general and administrative expenses). Other, net for the 10-day period ended July 10, 2013 consists of $32 million of severance costs primarily associated with the Clearwire Acquisition and $19 million of business combination fees paid to unrelated parties in connection with the transactions with SoftBank and Clearwire, partially offset by $37 million related to changes in estimates for lease exit costs previously recognized.



Successor
Operating Revenues by Service and Products	Wireless		Wireline		Corporate, Other and Eliminations⁽¹⁾			Consolidated
	(in millions)
Three Months Ended September 30, 2014
Wireless services	$	6,693	$	—	$	—		$	6,693
Wireless equipment	1,039		—		—			1,039
Voice	—		294		(86		)	208
Data	—		53		(22		)	31
Internet	—		340		(41		)	299
Other	197		21		—			218
Total net operating revenues	$	7,929	$	708	$	(149	)	$	8,488

Operating Revenues by Service and Products	Wireless		Wireline		Corporate, Other and Eliminations⁽¹⁾			Consolidated
	(in millions)
Three Months Ended September 30, 2013
Wireless services	$	6,399	$	—	$	—		$	6,399
Wireless equipment	636		—		—			636
Voice	—		333		(120		)	213
Data	—		57		(23		)	34
Internet	—		373		(46		)	327
Other	124		14		2			140
Total net operating revenues	$	7,159	$	777	$	(187	)	$	7,749

Operating Revenues by Service and Products	Wireless		Wireline		Corporate, Other and Eliminations⁽¹⁾			Consolidated
	(in millions)
Six Months Ended September 30, 2014
Wireless services	$	13,601	$	—	$	—		$	13,601
Wireless equipment	2,145		—		—			2,145
Voice	—		621		(177		)	444
Data	—		109		(46		)	63
Internet	—		685		(79		)	606
Other	376		39		3			418
Total net operating revenues	$	16,122	$	1,454	$	(299	)	$	17,277

Operating Revenues by Service and Products	Wireless		Wireline		Corporate, Other and Eliminations⁽¹⁾			Consolidated
	(in millions)
Six Months Ended September 30, 2013
Wireless services	$	6,399	$	—	$	—		$	6,399
Wireless equipment	636		—		—			636
Voice	—		333		(120		)	213
Data	—		57		(23		)	34
Internet	—		373		(46		)	327
Other	124		14		2			140
Total net operating revenues	$	7,159	$	777	$	(187	)	$	7,749



Predecessor
Operating Revenues by Service and Products	Wireless		Wireline		Corporate, Other and Eliminations⁽¹⁾			Consolidated
	(in millions)
10 Days Ended July 10, 2013
Wireless services	$	769	$	—	$	—		$	769
Wireless equipment	74		—		—			74
Voice	—		42		(15		)	27
Data	—		7		(3		)	4
Internet	—		47		(5		)	42
Other	15		2		(1		)	16
Total net operating revenues	$	858	$	98	$	(24	)	$	932

Operating Revenues by Service and Products	Wireless		Wireline		Corporate, Other and Eliminations⁽¹⁾			Consolidated
	(in millions)
101 Days Ended July 10, 2013
Wireless services	$	7,996	$	—	$	—		$	7,996
Wireless equipment	894		—		—			894
Voice	—		419		(137		)	282
Data	—		94		(47		)	47
Internet	—		479		(53		)	426
Other	146		16		2			164
Total net operating revenues	$	9,036	$	1,008	$	(235	)	$	9,809

_______________


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