XML 35 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Segments
 3 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Segment
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 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. The impact of intercompany pricing rate changes to our Wireline segment earnings does not affect our consolidated results of operations as our Wireless segment has an equivalent offsetting impact in cost of services.
Segment financial information is as follows:  
Statement of Operations Information
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations
 
Consolidated
 
(in millions)
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
Net operating revenues
$
7,845

 
$
276

 
$
4

 
$
8,125

Inter-segment revenues(1)
—

 
62

 
(62
)
 
—

Total segment operating expenses(2)
(4,527
)
 
(380
)
 
62

 
(4,845
)
Segment earnings
$
3,318

 
$
(42
)
 
$
4

 
3,280

Less:
 
 
 
 
 
 
 
Depreciation - network and other
 
 
 
 
 
 
(1,023
)
Depreciation - equipment rentals
 
 
 
 
 
 
(1,136
)
Amortization
 
 
 
 
 
 
(171
)
Merger costs (2)
 
 
 
 
 
 
(93
)
Other, net(3)
 
 
 
 
 
 
(42
)
Operating income
 
 
 
 
 
 
815

Interest expense
 
 
 
 
 
 
(637
)
Other income, net
 
 
 
 
 
 
42

Income before income taxes
 
 
 
 
 
 
$
220

Statement of Operations Information
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations
 
Consolidated
 
(in millions)
Three Months Ended June 30, 2017
 
 
 
 
 
 
 
Net operating revenues
$
7,810

 
$
343

 
$
4

 
$
8,157

Inter-segment revenues(1)
—

 
90

 
(90
)
 
—

Total segment operating expenses
(4,944
)
 
(444
)
 
84

 
(5,304
)
Segment earnings
$
2,866

 
$
(11
)
 
$
(2
)
 
2,853

Less:
 
 
 
 
 
 
 
Depreciation - network and other
 
 
 
 
 
 
(977
)
Depreciation - equipment rentals
 
 
 
 
 
 
(854
)
Amortization
 
 
 
 
 
 
(223
)
Other, net(3)
 
 
 
 
 
 
364

Operating income
 
 
 
 
 
 
1,163

Interest expense
 
 
 
 
 
 
(613
)
Other expense, net
 
 
 
 
 
 
(52
)
Income before income taxes
 
 
 
 
 
 
$
498

Other Information
Wireless
 
Wireline
 
Corporate and
Other
 
Consolidated
 
(in millions)
Capital expenditures for the three months ended June 30, 2018
$
2,836

 
$
51

 
$
62

 
$
2,949

Capital expenditures for the three months ended June 30, 2017
$
2,324

 
$
62

 
$
124

 
$
2,510

_________________
(1)
Inter-segment revenues consist primarily of wireline services provided to the Wireless segment for resale to, or use by, wireless subscribers.
(2)
The three-month period ended June 30, 2018, includes $93 million of merger-related costs which were recorded as selling, general and administrative expenses in the consolidated statements of comprehensive income.
(3)
Other, net for the three-month period ended June 30, 2018 consists of $34 million associated with the purchase of certain leased spectrum assets, which upon termination of the related spectrum leases resulted in the accelerated recognition of the unamortized favorable lease balances and $8 million of severance and exit costs primarily due to access termination charges. The three-month period ended June 30, 2017 consists of a $175 million net loss on disposal of property, plant and equipment, which consisted of a $181 million loss related to cell site construction costs that are no longer recoverable as a result of changes in our network plans, slightly offset by a $6 million gain. In addition, the three-month period ended June 30, 2017 includes a $479 million non-cash gain related to spectrum license exchanges with other carriers, a $55 million reduction of an accrual related to favorable developments in pending legal proceedings and a $5 million reversal of previously accrued contract termination costs primarily related to the termination of our relationship with General Wireless Operations Inc. (Radio Shack).
Operating Revenues by Service and Products
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations(1)
 
Consolidated
 
(in millions)
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
Service revenue
$
5,170

 
$
314

 
$
(62
)
 
$
5,422

Wireless equipment sales
1,173

 
—

 
—

 
1,173

Wireless equipment rentals
1,212

 
—

 
—

 
1,212

Other 
290

 
24

 
4

 
318

Total net operating revenues
$
7,845

 
$
338

 
$
(58
)
 
$
8,125

 
 
 
 
 
 
 
 
Operating Revenues by Service and Products
Wireless
 
Wireline
 
Corporate,
Other and
Eliminations(1)
 
Consolidated
 
(in millions)
Three Months Ended June 30, 2017
 
 
 
 
 
 
 
Service revenue(2)
$
5,465

 
$
413

 
$
(90
)
 
$
5,788

Wireless equipment sales
1,187

 
—

 
—

 
1,187

Wireless equipment rentals
899

 
—

 
—

 
899

Other(2)
259

 
20

 
4

 
283

Total net operating revenues
$
7,810

 
$
433

 
$
(86
)
 
$
8,157

 
 
 
 
 
 
 
 

_______________
(1)
Revenues eliminated in consolidation consist primarily of wireline services provided to the Wireless segment for resale to or use by wireless subscribers.
(2)
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 $82 million for the three-month period ended June 30, 2017. Revenue associated with subscribers through our wholesale Lifeline MVNOs remains in Other following this change.