XML 36 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Segments
 12 Months Ended
Mar. 31, 2018
Segment Reporting [Abstract]  
Segments
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, revenue from the sale of wireless devices (handsets and tablets) and accessories, and equipment rentals from devices leased to customers, all of which are generated 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 subscribers, in addition to our Wireless segment.
We define segment earnings as wireless or wireline operating income (loss) 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:
Statement of Operations Information
Wireless including hurricane and other
 
Wireless hurricane and other
 
Wireless excluding hurricane and other
 
Wireline
 
Corporate,
Other and
Eliminations
 
Consolidated
 
(in millions)
Year Ended March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Net operating revenues(2)
$
31,137

 
$
33

 
$
31,170

 
$
1,251

 
$
18

 
$
32,439

Inter-segment revenues(1)
—

 
—

 
—

 
328

 
(328
)
 
—

Total segment operating expenses(2)
(20,090
)
 
125

 
(19,965
)
 
(1,697
)
 
292

 
(21,370
)
Segment earnings
$
11,047

 
$
158

 
$
11,205

 
$
(118
)
 
$
(18
)
 
11,069

Less:
 
 
 
 
 
 
 
 
 
 
 
Depreciation - network and other
 
 
 
 
 
 
 
 
 
 
(3,976
)
Depreciation - equipment rentals
 
 
 
 
 
 
 
 
 
 
(3,792
)
Amortization
 
 
 
 
 
 
 
 
 
 
(812
)
Hurricane-related charges(2)
 
 
 
 
 
 
 
 
 
 
(107
)
Other, net(3)
 
 
 
 
 
 
 
 
 
 
345

Operating income
 
 
 
 
 
 
 
 
 
 
2,727

Interest expense
 
 
 
 
 
 
 
 
 
 
(2,365
)
Other expense, net
 
 
 
 
 
 
 
 
 
 
(59
)
Income before income taxes
 
 
 
 
 
 
 
 
 
 
$
303

 
Statement of Operations Information
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations
 
Consolidated
 
(in millions)
Year Ended March 31, 2017
 
 
 
 
 
 
 
Net operating revenues
$
31,787

 
$
1,545

 
$
15

 
$
33,347

Inter-segment revenues(1) 
—

 
498

 
(498
)
 
—

Total segment operating expenses
(21,973
)
 
(1,924
)
 
484

 
(23,413
)
Segment earnings
$
9,814

 
$
119

 
$
1

 
9,934

Less:
 
 
 
 
 
 
 
Depreciation - network and other
 
 
 
 
 
 
(3,982
)
Depreciation - equipment rentals
 
 
 
 
 
 
(3,116
)
Amortization
 
 
 
 
 
 
(1,052
)
Other, net(3) 
 
 
 
 
 
 
(20
)
Operating income
 
 
 
 
 
 
1,764

Interest expense
 
 
 
 
 
 
(2,495
)
Other expense, net
 
 
 
 
 
 
(40
)
Loss before income taxes
 
 
 
 
 
 
$
(771
)
 
 
 
 
 
 
 
 
Statement of Operations Information
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations
 
Consolidated
 
(in millions)
Year Ended March 31, 2016
 
 
 
 
 
 
 
Net operating revenues
$
30,377

 
$
1,790

 
$
13

 
$
32,180

Inter-segment revenues(1)
—

 
592

 
(592
)
 
—

Total segment operating expenses
(22,326
)
 
(2,290
)
 
582

 
(24,034
)
Segment earnings
$
8,051

 
$
92

 
$
3

 
8,146

Less:
 
 
 
 
 
 
 
Depreciation - network and other
 
 
 
 
 
 
(4,013
)
Depreciation - equipment rentals
 
 
 
 
 
 
(1,781
)
Amortization
 
 
 
 
 
 
(1,294
)
Other, net(3)
 
 
 
 
 
 
(748
)
Operating income
 
 
 
 
 
 
310

Interest expense
 
 
 
 
 
 
(2,182
)
Other income, net
 
 
 
 
 
 
18

Loss before income taxes
 
 
 
 
 
 
$
(1,854
)
 
 
 
 
 
 
 
 
Other Information
Wireless
 
Wireline
 
Corporate and
Other
 
Consolidated
 
(in millions)
As of and for the year ended March 31, 2018
 
 
 
 
 
 
 
Capital expenditures
$
10,221

 
$
166

 
$
393

 
$
10,780

Total assets
$
73,834

 
$
1,117

 
$
10,508

 
$
85,459

 
 
 
 
 
 
 
 
As of and for the year ended March 31, 2017
 
 
 
 
 
 
 
Capital expenditures
$
6,568

 
$
94

 
$
264

 
$
6,926

Total assets
$
74,098

 
$
1,168

 
$
9,857

 
$
85,123

 
 
 
 
 
 
 
 
As of and for the year ended March 31, 2016
 
 
 
 
 
 
 
Capital expenditures 
$
9,987

 
$
279

 
$
312

 
$
10,578

Total assets
$
73,408

 
$
1,255

 
$
4,312

 
$
78,975

 
 
 
 
 
 
 
 
 _________________
(1)
Inter-segment revenues consist primarily of wireline services provided to the Wireless segment for resale to or use by wireless subscribers.
(2)
The year ended March 31, 2018 includes $107 million of hurricane-related charges which are classified in our consolidated statements of operations as follows: $33 million as contra-revenue in net operating revenues, $48 million as cost of services, $21 million as selling, general and administrative expenses and $5 million as other, net, all within the Wireless segment. In addition, the year ended March 31, 2018 includes a $51 million charge related to a regulatory fee matter, which is classified as cost of services in our consolidated statements of operations.
(3)
Other, net for the year ended March 31, 2018 consists of $80 million of severance and exit costs and a $364 million loss on disposal of property, plant and equipment, which consisted of a $370 million loss related to cell site construction costs that are no longer recoverable as a result of changes in our network plans, offset by a $6 million gain. In addition, the year ended March 31, 2018 included a $479 million non-cash gain related to spectrum license exchanges with other carriers, net reductions of $305 million primarily associated with legal settlements or favorable developments in pending legal proceedings, combined with a $5 million reversal of previously accrued contract termination costs related to the termination of our relationship with General Wireless Operations Inc. (RadioShack). Other, net for the year ended March 31, 2017 consists of $66 million of severance and exit costs, a $140 million for a state tax matter combined with legal reserves related to other pending legal suits and proceedings, and a $28 million loss on disposal of property, plant and equipment related to cell site construction costs that are no longer recoverable as a result of changes in our network plans. In addition, the year ended March 31, 2017 included a $354 million non-cash gain related to spectrum license exchanges with other carriers and $140 million of contract termination costs, primarily related to the termination of our pre-existing wholesale arrangement with nTelos, as a result of the Shentel transaction combined with the costs related to the termination of our relationship with RadioShack. Other, net for the year ended March 31, 2016 consists of $409 million of severance and exit costs, combined with $193 million for legal reserves related to various pending legal suits and proceedings and a $166 million loss on disposal of property, plant and equipment related to cell site construction costs and other network costs that are no longer recoverable as a result of changes in the Company's network plans, partially offset by $20 million of income resulting from a revision to our estimate of a previously recorded reserve.
Operating Revenues by Service and Products
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations(1)
 
Consolidated
 
(in millions)
Year Ended March 31, 2018
 
 
 
 
 
 
 
Service revenue(2)
$
21,400

 
$
1,514

 
$
(328
)
 
$
22,586

Wireless equipment sales
4,524

 
—

 
—

 
4,524

Wireless equipment rentals
4,048

 
—

 
—

 
4,048

Other
1,198

 
65

 
18

 
1,281

Total net operating revenues
$
31,170

 
$
1,579

 
$
(310
)
 
$
32,439

 
 
 
 
 
 
 
 
Operating Revenues by Service and Products
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations(1)
 
Consolidated
 
(in millions)
Year Ended March 31, 2017
 
 
 
 
 
 
 
Service revenue(3)
$
22,755

 
$
1,962

 
$
(495
)
 
$
24,222

Wireless equipment sales
4,684

 
—

 
—

 
4,684

Wireless equipment rentals
3,295

 
—

 
—

 
3,295

Other(3)
1,053

 
81

 
12

 
1,146

Total net operating revenues
$
31,787

 
$
2,043

 
$
(483
)
 
$
33,347

 
 
 
 
 
 
 
 
Operating Revenues by Service and Products
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations(1)
 
Consolidated
 
(in millions)
Year Ended March 31, 2016
 
 
 
 
 
 
 
Service revenue(3)
$
24,304

 
$
2,295

 
$
(588
)
 
$
26,011

Wireless equipment sales
3,168

 
—

 
—

 
3,168

Wireless equipment rentals
1,838

 
—

 
—

 
1,838

Other(3)
1,067

 
87

 
9

 
1,163

Total net operating revenues
$
30,377

 
$
2,382

 
$
(579
)
 
$
32,180

 
 
 
 
 
 
 
 

_______________
(1)
Revenues eliminated in consolidation consist primarily of wireline services provided to the Wireless segment for resale to or use by wireless subscribers.
(2)
Wireless services related to the Wireless segment for the year ended March 31, 2018 excludes $33 million of hurricane-related contra-revenue charges reflected in net operating revenues in our consolidated statements of operations.
(3)
Sprint is no longer reporting Lifeline subscribers due to regulatory changes resulting in tighter program restrictions. We have excluded these subscribers from our customer base for all periods presented, including our Assurance Wireless prepaid brand and subscribers through our wholesale Lifeline mobile virtual network operators (MVNO). The above tables reflect the reclassification of the related Assurance Wireless prepaid revenue within the Wireless segment from Wireless services to Other of $360 million and $323 million for the year ended March 31, 2017 and 2016, respectively. Revenue associated with subscribers through our wholesale Lifeline MVNOs continues to remain in Other following this change.