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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SentinelOne Inc | NYSE:S | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.09 | -0.42% | 21.41 | 21.98 | 21.17 | 21.91 | 3,120,780 | 01:00:00 |
|
x
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Delaware
|
46-1170005
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
6200 Sprint Parkway, Overland Park, Kansas
|
66251
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
o
|
Sprint Corporation Common Stock
|
3,996,883,400
|
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
June 30,
|
|
March 31,
|
||||
|
2017
|
|
2017
|
||||
|
(in millions, except share and per share data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,478
|
|
|
$
|
2,870
|
|
Short-term investments
|
4,349
|
|
|
5,444
|
|
||
Accounts and notes receivable, net of allowance for doubtful accounts and deferred interest of $358 and $354, respectively
|
4,089
|
|
|
4,138
|
|
||
Device and accessory inventory
|
979
|
|
|
1,064
|
|
||
Prepaid expenses and other current assets
|
601
|
|
|
601
|
|
||
Total current assets
|
12,496
|
|
|
14,117
|
|
||
Property, plant and equipment, net
|
18,866
|
|
|
19,209
|
|
||
Intangible assets
|
|
|
|
|
|||
Goodwill
|
6,578
|
|
|
6,579
|
|
||
FCC licenses and other
|
41,074
|
|
|
40,585
|
|
||
Definite-lived intangible assets, net
|
3,075
|
|
|
3,320
|
|
||
Other assets
|
1,235
|
|
|
1,313
|
|
||
Total assets
|
$
|
83,324
|
|
|
$
|
85,123
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,616
|
|
|
$
|
3,281
|
|
Accrued expenses and other current liabilities
|
3,830
|
|
|
4,141
|
|
||
Current portion of long-term debt, financing and capital lease obligations
|
5,125
|
|
|
5,036
|
|
||
Total current liabilities
|
11,571
|
|
|
12,458
|
|
||
Long-term debt, financing and capital lease obligations
|
34,459
|
|
|
35,878
|
|
||
Deferred tax liabilities
|
14,701
|
|
|
14,416
|
|
||
Other liabilities
|
3,578
|
|
|
3,563
|
|
||
Total liabilities
|
64,309
|
|
|
66,315
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, voting, par value $0.01 per share, 9.0 billion authorized, 3.996 billion and 3.989 billion issued, respectively
|
40
|
|
|
40
|
|
||
Paid-in capital
|
27,761
|
|
|
27,756
|
|
||
Accumulated deficit
|
(8,378
|
)
|
|
(8,584
|
)
|
||
Accumulated other comprehensive loss
|
(408
|
)
|
|
(404
|
)
|
||
Total stockholders' equity
|
19,015
|
|
|
18,808
|
|
||
Total liabilities and stockholders' equity
|
$
|
83,324
|
|
|
$
|
85,123
|
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions, except per share amounts)
|
||||||
Net operating revenues:
|
|
|
|
||||
Service
|
$
|
6,071
|
|
|
$
|
6,516
|
|
Equipment
|
2,086
|
|
|
1,496
|
|
||
|
8,157
|
|
|
8,012
|
|
||
Net operating expenses:
|
|
|
|
||||
Cost of services (exclusive of depreciation and amortization included below)
|
1,709
|
|
|
2,099
|
|
||
Cost of products (exclusive of depreciation and amortization included below)
|
1,545
|
|
|
1,419
|
|
||
Selling, general and administrative
|
1,938
|
|
|
1,917
|
|
||
Severance and exit costs
|
—
|
|
|
16
|
|
||
Depreciation
|
1,831
|
|
|
1,680
|
|
||
Amortization
|
223
|
|
|
287
|
|
||
Other, net
|
(252
|
)
|
|
233
|
|
||
|
6,994
|
|
|
7,651
|
|
||
Operating income
|
1,163
|
|
|
361
|
|
||
Other (expense) income:
|
|
|
|
||||
Interest expense
|
(613
|
)
|
|
(615
|
)
|
||
Other (expense) income, net
|
(52
|
)
|
|
8
|
|
||
|
(665
|
)
|
|
(607
|
)
|
||
Income (loss) before income taxes
|
498
|
|
|
(246
|
)
|
||
Income tax expense
|
(292
|
)
|
|
(56
|
)
|
||
Net income (loss)
|
$
|
206
|
|
|
$
|
(302
|
)
|
|
|
|
|
||||
Basic net income (loss) per common share
|
$
|
0.05
|
|
|
$
|
(0.08
|
)
|
Diluted net income (loss) per common share
|
$
|
0.05
|
|
|
$
|
(0.08
|
)
|
Basic weighted average common shares outstanding
|
3,993
|
|
|
3,975
|
|
||
Diluted weighted average common shares outstanding
|
4,076
|
|
|
3,975
|
|
||
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Net unrealized holding gains (losses) on securities and other
|
$
|
5
|
|
|
$
|
(2
|
)
|
Net unrealized holding losses on derivatives
|
(9
|
)
|
|
—
|
|
||
Net unrecognized net periodic pension and other postretirement benefits
|
—
|
|
|
1
|
|
||
Other comprehensive loss
|
(4
|
)
|
|
(1
|
)
|
||
Comprehensive income (loss)
|
$
|
202
|
|
|
$
|
(303
|
)
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
206
|
|
|
$
|
(302
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
2,054
|
|
|
1,967
|
|
||
Provision for losses on accounts receivable
|
102
|
|
|
93
|
|
||
Share-based and long-term incentive compensation expense
|
41
|
|
|
15
|
|
||
Deferred income tax expense
|
282
|
|
|
46
|
|
||
Gains from asset dispositions and exchanges
|
(479
|
)
|
|
—
|
|
||
Call premiums paid on debt redemptions
|
(129
|
)
|
|
—
|
|
||
Loss on early extinguishment of debt
|
66
|
|
|
—
|
|
||
Amortization of long-term debt premiums, net
|
(51
|
)
|
|
(80
|
)
|
||
Loss on disposal of property, plant and equipment
|
293
|
|
|
120
|
|
||
Contract terminations
|
(5
|
)
|
|
96
|
|
||
Other changes in assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable
|
(53
|
)
|
|
(106
|
)
|
||
Deferred purchase price from sale of receivables
|
—
|
|
|
(117
|
)
|
||
Inventories and other current assets
|
(711
|
)
|
|
(98
|
)
|
||
Accounts payable and other current liabilities
|
(474
|
)
|
|
(1,016
|
)
|
||
Non-current assets and liabilities, net
|
73
|
|
|
(159
|
)
|
||
Other, net
|
65
|
|
|
83
|
|
||
Net cash provided by operating activities
|
1,280
|
|
|
542
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures - network and other
|
(1,121
|
)
|
|
(473
|
)
|
||
Capital expenditures - leased devices
|
(497
|
)
|
|
(405
|
)
|
||
Expenditures relating to FCC licenses
|
(13
|
)
|
|
(15
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
2,594
|
|
|
—
|
|
||
Purchases of short-term investments
|
(1,499
|
)
|
|
(1,304
|
)
|
||
Proceeds from sales of assets and FCC licenses
|
101
|
|
|
27
|
|
||
Other, net
|
(3
|
)
|
|
(25
|
)
|
||
Net cash used in investing activities
|
(438
|
)
|
|
(2,195
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from debt and financings
|
902
|
|
|
3,255
|
|
||
Repayments of debt, financing and capital lease obligations
|
(2,121
|
)
|
|
(294
|
)
|
||
Debt financing costs
|
—
|
|
|
(175
|
)
|
||
Other, net
|
(15
|
)
|
|
6
|
|
||
Net cash (used in) provided by financing activities
|
(1,234
|
)
|
|
2,792
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(392
|
)
|
|
1,139
|
|
||
Cash and cash equivalents, beginning of period
|
2,870
|
|
|
2,641
|
|
||
Cash and cash equivalents, end of period
|
$
|
2,478
|
|
|
$
|
3,780
|
|
|
Common Stock
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|||||||||||||||||||
Balance, March 31, 2017
|
3,989
|
|
|
$
|
40
|
|
|
$
|
27,756
|
|
|
$
|
(8,584
|
)
|
|
$
|
(404
|
)
|
|
$
|
18,808
|
|
Net income
|
|
|
|
|
|
|
206
|
|
|
|
|
206
|
|
|||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||||||
Issuance of common stock, net
|
7
|
|
|
|
|
9
|
|
|
|
|
|
|
9
|
|
||||||||
Share-based compensation expense
|
|
|
|
|
40
|
|
|
|
|
|
|
40
|
|
|||||||||
Capital contribution by SoftBank
|
|
|
|
|
2
|
|
|
|
|
|
|
2
|
|
|||||||||
Other, net
|
|
|
|
|
(46
|
)
|
|
|
|
|
|
(46
|
)
|
|||||||||
Balance, June 30, 2017
|
3,996
|
|
|
$
|
40
|
|
|
$
|
27,761
|
|
|
$
|
(8,378
|
)
|
|
$
|
(408
|
)
|
|
$
|
19,015
|
|
|
|
Page
Reference
|
1.
|
||
|
|
|
2.
|
||
|
|
|
3.
|
||
|
|
|
4.
|
||
|
|
|
5.
|
||
|
|
|
6.
|
||
|
|
|
7.
|
||
|
|
|
8.
|
||
|
|
|
9.
|
||
|
|
|
10.
|
||
|
|
|
11.
|
||
|
|
|
12.
|
||
|
|
|
13.
|
||
|
|
|
14.
|
||
|
|
|
15.
|
||
|
|
|
Note 1.
|
Basis of Presentation
|
Note 2.
|
New Accounting Pronouncements
|
Note 3.
|
Installment Receivables
|
|
June 30,
2017 |
|
March 31,
2017 |
||||
|
(in millions)
|
||||||
Installment receivables, gross
|
$
|
2,302
|
|
|
$
|
2,270
|
|
Deferred interest
|
(199
|
)
|
|
(207
|
)
|
||
Installment receivables, net of deferred interest
|
2,103
|
|
|
2,063
|
|
||
Allowance for credit losses
|
(311
|
)
|
|
(299
|
)
|
||
Installment receivables, net
|
$
|
1,792
|
|
|
$
|
1,764
|
|
|
|
|
|
||||
Classified on the consolidated balance sheets as:
|
|
|
|
||||
Accounts and notes receivable, net
|
$
|
1,303
|
|
|
$
|
1,195
|
|
Other assets
|
489
|
|
|
569
|
|
||
Installment receivables, net
|
$
|
1,792
|
|
|
$
|
1,764
|
|
|
June 30, 2017
|
|
March 31, 2017
|
||||||||||||||||||||
|
Prime
|
|
Subprime
|
|
Total
|
|
Prime
|
|
Subprime
|
|
Total
|
||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||
Unbilled
|
$
|
1,536
|
|
|
$
|
600
|
|
|
$
|
2,136
|
|
|
$
|
1,501
|
|
|
$
|
619
|
|
|
$
|
2,120
|
|
Billed - current
|
83
|
|
|
38
|
|
|
121
|
|
|
74
|
|
|
36
|
|
|
110
|
|
||||||
Billed - past due
|
22
|
|
|
23
|
|
|
45
|
|
|
20
|
|
|
20
|
|
|
40
|
|
||||||
Installment receivables, gross
|
$
|
1,641
|
|
|
$
|
661
|
|
|
$
|
2,302
|
|
|
$
|
1,595
|
|
|
$
|
675
|
|
|
$
|
2,270
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||
|
June 30, 2017
|
|
March 31, 2017
|
||||
|
(in millions)
|
||||||
Deferred interest and allowance for credit losses, beginning of period
|
$
|
506
|
|
|
$
|
—
|
|
Bad debt expense
|
67
|
|
|
61
|
|
||
Write-offs, net of recoveries
|
(55
|
)
|
|
(28
|
)
|
||
Change in deferred interest on short-term and long-term installment receivables
|
(8
|
)
|
|
8
|
|
||
Recognition of deferred interest and allowance for credit losses
|
—
|
|
|
465
|
|
||
Deferred interest and allowance for credit losses, end of period
|
$
|
510
|
|
|
$
|
506
|
|
Note 4.
|
Financial Instruments
|
|
Carrying amount at June 30, 2017
|
|
Estimated Fair Value Using Input Type
|
||||||||||||||||
|
|
Quoted prices in active markets
|
|
Observable
|
|
Unobservable
|
|
Total estimated fair value
|
|||||||||||
|
(in millions)
|
||||||||||||||||||
Current and long-term debt and financing obligations
|
$
|
39,356
|
|
|
$
|
33,700
|
|
|
$
|
3,056
|
|
|
$
|
5,842
|
|
|
$
|
42,598
|
|
|
Carrying amount at March 31, 2017
|
|
Estimated Fair Value Using Input Type
|
||||||||||||||||
|
|
Quoted prices in active markets
|
|
Observable
|
|
Unobservable
|
|
Total estimated fair value
|
|||||||||||
|
(in millions)
|
||||||||||||||||||
Current and long-term debt and financing obligations
|
$
|
40,581
|
|
|
$
|
33,196
|
|
|
$
|
4,352
|
|
|
$
|
5,468
|
|
|
$
|
43,016
|
|
Note 5.
|
Property, Plant and Equipment
|
|
June 30,
2017 |
|
March 31,
2017 |
||||
|
(in millions)
|
||||||
Land
|
$
|
259
|
|
|
$
|
260
|
|
Network equipment, site costs and related software
|
21,689
|
|
|
21,693
|
|
||
Buildings and improvements
|
819
|
|
|
818
|
|
||
Non-network internal use software, office equipment, leased devices and other
|
9,146
|
|
|
8,625
|
|
||
Construction in progress
|
2,286
|
|
|
2,316
|
|
||
Less: accumulated depreciation
|
(15,333
|
)
|
|
(14,503
|
)
|
||
Property, plant and equipment, net
|
$
|
18,866
|
|
|
$
|
19,209
|
|
|
June 30,
2017 |
|
March 31,
2017 |
||||
|
(in millions)
|
||||||
Leased devices
|
$
|
7,699
|
|
|
$
|
7,276
|
|
Less: accumulated depreciation
|
(3,363
|
)
|
|
(3,114
|
)
|
||
Leased devices, net
|
$
|
4,336
|
|
|
$
|
4,162
|
|
Note 6.
|
Intangible Assets
|
|
March 31,
2017 |
|
Net
Additions (Reductions)
|
|
June 30,
2017 |
||||||
|
(in millions)
|
||||||||||
FCC licenses
|
$
|
36,550
|
|
|
$
|
489
|
|
(1)
|
$
|
37,039
|
|
Trademarks
|
4,035
|
|
|
—
|
|
|
4,035
|
|
|||
Goodwill
|
6,579
|
|
|
(1
|
)
|
|
6,578
|
|
|||
|
$
|
47,164
|
|
|
$
|
488
|
|
|
$
|
47,652
|
|
(1)
|
Net additions within FCC licenses include a
$479 million
increase from spectrum license exchanges described below during the
three-month period ended
June 30, 2017
.
|
|
|
|
June 30, 2017
|
|
March 31, 2017
|
||||||||||||||||||||
|
Useful Lives
|
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
Customer relationships
|
4 to 8 years
|
|
$
|
6,923
|
|
|
$
|
(5,266
|
)
|
|
$
|
1,657
|
|
|
$
|
6,923
|
|
|
$
|
(5,053
|
)
|
|
$
|
1,870
|
|
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Favorable spectrum leases
|
23 years
|
|
868
|
|
|
(147
|
)
|
|
721
|
|
|
869
|
|
|
(138
|
)
|
|
731
|
|
||||||
Favorable tower leases
|
7 years
|
|
589
|
|
|
(405
|
)
|
|
184
|
|
|
589
|
|
|
(386
|
)
|
|
203
|
|
||||||
Trademarks
|
34 years
|
|
520
|
|
|
(62
|
)
|
|
458
|
|
|
520
|
|
|
(58
|
)
|
|
462
|
|
||||||
Other
|
10 years
|
|
94
|
|
|
(39
|
)
|
|
55
|
|
|
91
|
|
|
(37
|
)
|
|
54
|
|
||||||
Total other intangible assets
|
|
2,071
|
|
|
(653
|
)
|
|
1,418
|
|
|
2,069
|
|
|
(619
|
)
|
|
1,450
|
|
|||||||
Total definite-lived intangible assets
|
|
$
|
8,994
|
|
|
$
|
(5,919
|
)
|
|
$
|
3,075
|
|
|
$
|
8,992
|
|
|
$
|
(5,672
|
)
|
|
$
|
3,320
|
|
Note 7.
|
Accounts Payable
|
Note 8.
|
Long-Term Debt, Financing and Capital Lease Obligations
|
|
Interest Rates
|
|
Maturities
|
|
June 30,
2017 |
|
March 31,
2017 |
||||||||
|
|
|
|
|
|
|
|
|
(in millions)
|
||||||
Notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Senior notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Corporation
|
7.13
|
-
|
7.88%
|
|
2021
|
-
|
2025
|
|
$
|
10,500
|
|
|
$
|
10,500
|
|
Sprint Communications, Inc.
|
6.00
|
-
|
11.50%
|
|
2017
|
-
|
2022
|
|
5,692
|
|
|
6,080
|
|
||
Sprint Capital Corporation
|
6.88
|
-
|
8.75%
|
|
2019
|
-
|
2032
|
|
6,204
|
|
|
6,204
|
|
||
Senior secured notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Spectrum Co LLC, Sprint Spectrum Co II LLC, Sprint Spectrum Co III LLC
|
3.36%
|
|
2021
|
|
3,500
|
|
|
3,500
|
|
||||||
Sprint Communications, Inc.
|
9.25%
|
|
2022
|
|
200
|
|
|
200
|
|
||||||
Guaranteed notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sprint Communications, Inc.
|
7.00
|
-
|
9.00%
|
|
2018
|
-
|
2020
|
|
2,800
|
|
|
4,000
|
|
||
Exchangeable notes
|
|
|
|
|
|
|
|
|
|
|
|
||||
Clearwire Communications LLC
(1)
|
8.25%
|
|
2017
|
|
629
|
|
|
629
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Secured revolving bank credit facility
|
3.75%
|
|
2021
|
|
—
|
|
|
—
|
|
||||||
Secured term loan
|
3.75%
|
|
2024
|
|
3,990
|
|
|
4,000
|
|
||||||
Export Development Canada (EDC)
|
3.73%
|
|
2019
|
|
300
|
|
|
300
|
|
||||||
Secured equipment credit facilities
|
2.68
|
-
|
3.38%
|
|
2020
|
-
|
2021
|
|
430
|
|
|
431
|
|
||
Accounts receivable facility
|
2.12
|
-
|
2.62%
|
|
2018
|
|
2,604
|
|
|
1,964
|
|
||||
Financing obligations, capital lease and other obligations
|
2.35
|
-
|
10.63%
|
|
2017
|
-
|
2024
|
|
2,731
|
|
|
3,016
|
|
||
Net premiums and debt financing costs
|
|
|
|
|
|
|
|
|
4
|
|
|
90
|
|
||
|
|
|
|
|
|
|
|
|
39,584
|
|
|
40,914
|
|
||
Less current portion
|
|
|
|
|
|
|
|
|
(5,125
|
)
|
|
(5,036
|
)
|
||
Long-term debt, financing and capital lease obligations
|
|
|
|
|
|
|
|
|
$
|
34,459
|
|
|
$
|
35,878
|
|
(1)
|
Notes of Clearwire Communications LLC are guaranteed by certain Clearwire subsidiaries. They have both a par call and put on December 1, 2017 resulting in the balance being classified as a current debt obligation.
|
Note 9.
|
Severance and Exit Costs
|
|
March 31,
2017 |
|
Net
(Benefit) Expense
|
|
Cash Payments
and Other
|
|
June 30,
2017 |
||||||||
|
(in millions)
|
||||||||||||||
Lease exit costs
|
$
|
249
|
|
|
$
|
(9
|
)
|
(1)
|
$
|
(29
|
)
|
|
$
|
211
|
|
Severance costs
|
12
|
|
|
5
|
|
(2)
|
(7
|
)
|
|
10
|
|
||||
Access exit costs
|
40
|
|
|
4
|
|
(3)
|
(7
|
)
|
|
37
|
|
||||
|
$
|
301
|
|
|
$
|
—
|
|
|
$
|
(43
|
)
|
|
$
|
258
|
|
(1)
|
For the
three-month period ended
June 30, 2017
, we recognized a benefit of
$9 million
(Wireless only).
|
(2)
|
For the
three-month period ended
June 30, 2017
, we recognized costs of
$5 million
(
$3 million
Wireless,
$2 million
Wireline).
|
(3)
|
For the
three-month period ended
June 30, 2017
, we recognized costs of
$4 million
(
$1 million
Wireless
,
$3 million
Wireline).
|
Note 10.
|
Income Taxes
|
|
Three Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Income tax (expense) benefit at the federal statutory rate
|
$
|
(174
|
)
|
|
$
|
86
|
|
Effect of:
|
|
|
|
||||
State income taxes, net of federal income tax effect
|
(22
|
)
|
|
3
|
|
||
State law changes, net of federal income tax effect
|
3
|
|
|
—
|
|
||
Increase deferred tax liability for business activity changes
|
(65
|
)
|
|
—
|
|
||
Credit for increasing research activities
|
4
|
|
|
—
|
|
||
Change in federal and state valuation allowance
|
(33
|
)
|
|
(142
|
)
|
||
Other, net
|
(5
|
)
|
|
(3
|
)
|
||
Income tax expense
|
$
|
(292
|
)
|
|
$
|
(56
|
)
|
Effective income tax rate
|
58.6
|
%
|
|
(22.8
|
)%
|
Note 11.
|
Commitments and Contingencies
|
Note 12.
|
Per Share Data
|
Note 13.
|
Segments
|
•
|
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 subscribers, in addition to our Wireless segment.
|
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
|
|
|
|
|
|
|
(1,831
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(223
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
364
|
|
|||||||
Operating income
|
|
|
|
|
|
|
1,163
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
(613
|
)
|
|||||||
Other expense, net
|
|
|
|
|
|
|
(52
|
)
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
498
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Statement of Operations Information
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
||||||||
Net operating revenues
|
$
|
7,597
|
|
|
$
|
412
|
|
|
$
|
3
|
|
|
$
|
8,012
|
|
Inter-segment revenues
(1)
|
—
|
|
|
133
|
|
|
(133
|
)
|
|
—
|
|
||||
Total segment operating expenses
|
(5,157
|
)
|
|
(526
|
)
|
|
128
|
|
|
(5,555
|
)
|
||||
Segment earnings
|
$
|
2,440
|
|
|
$
|
19
|
|
|
$
|
(2
|
)
|
|
2,457
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
(1,680
|
)
|
|||||||
Amortization
|
|
|
|
|
|
|
(287
|
)
|
|||||||
Other, net
(2)
|
|
|
|
|
|
|
(129
|
)
|
|||||||
Operating income
|
|
|
|
|
|
|
361
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
(615
|
)
|
|||||||
Other income, net
|
|
|
|
|
|
|
8
|
|
|||||||
Loss before income taxes
|
|
|
|
|
|
|
$
|
(246
|
)
|
||||||
|
|
|
|
|
|
|
|
||||||||
Other Information
|
Wireless
|
|
Wireline
|
|
Corporate and
Other
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Capital expenditures for the three months ended June 30, 2017
|
$
|
1,435
|
|
|
$
|
62
|
|
|
$
|
121
|
|
|
$
|
1,618
|
|
Capital expenditures for the three months ended June 30, 2016
|
$
|
781
|
|
|
$
|
20
|
|
|
$
|
77
|
|
|
$
|
878
|
|
(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
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). Losses totaling
$112 million
relating to the write-off of leased devices associated with lease cancellations were excluded from Other, net and included within Wireless segment earnings for the
three-month period ended
June 30, 2017
. Other, net for the
three-month period ended
June 30, 2016
consists of
$16 million
of severance and exit costs and
$113 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.
Losses totaling approximately
$120 million
relating to the write-off of leased devices associated with lease cancellations were excluded from Other, net and included within Wireless segment earnings for the
three-month period ended
June 30, 2016
.
|
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Wireless services
(2)
|
$
|
5,465
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,465
|
|
Wireless equipment
|
2,086
|
|
|
—
|
|
|
—
|
|
|
2,086
|
|
||||
Voice
|
—
|
|
|
124
|
|
|
(41
|
)
|
|
83
|
|
||||
Data
|
—
|
|
|
34
|
|
|
(19
|
)
|
|
15
|
|
||||
Internet
|
—
|
|
|
255
|
|
|
(30
|
)
|
|
225
|
|
||||
Other
(2)
|
259
|
|
|
20
|
|
|
4
|
|
|
283
|
|
||||
Total net operating revenues
|
$
|
7,810
|
|
|
$
|
433
|
|
|
$
|
(86
|
)
|
|
$
|
8,157
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Revenues by Service and Products
|
Wireless
|
|
Wireline
|
|
Corporate,
Other and
Eliminations
(1)
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
||||||||
Wireless services
(2)
|
$
|
5,852
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,852
|
|
Wireless equipment
|
1,496
|
|
|
—
|
|
|
—
|
|
|
1,496
|
|
||||
Voice
|
—
|
|
|
181
|
|
|
(69
|
)
|
|
112
|
|
||||
Data
|
—
|
|
|
43
|
|
|
(22
|
)
|
|
21
|
|
||||
Internet
|
—
|
|
|
302
|
|
|
(41
|
)
|
|
261
|
|
||||
Other
(2)
|
249
|
|
|
19
|
|
|
2
|
|
|
270
|
|
||||
Total net operating revenues
|
$
|
7,597
|
|
|
$
|
545
|
|
|
$
|
(130
|
)
|
|
$
|
8,012
|
|
|
|
|
|
|
|
|
|
(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 recent regulatory changes resulting in tighter program restrictions. We have excluded them 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
and
$91 million
for the three months ended June 30, 2017 and 2016, respectively. Revenue associated with subscribers through our wholesale Lifeline MVNOs continues to remain in Other following this change.
|
Note 14.
|
Related-Party Transactions
|
Consolidated balance sheets:
|
June 30,
2017 |
|
March 31,
2017 |
||||
|
(in millions)
|
||||||
Accounts receivable
|
$
|
185
|
|
|
$
|
367
|
|
Accounts payable
|
$
|
61
|
|
|
$
|
160
|
|
Consolidated statements of comprehensive income (loss):
|
Three Months Ended
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Equipment revenues
|
$
|
350
|
|
|
$
|
276
|
|
Cost of products
|
$
|
356
|
|
|
$
|
296
|
|
Note 15.
|
Guarantor Financial Information
|
|
June 30, 2017
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2,034
|
|
|
$
|
444
|
|
|
$
|
—
|
|
|
$
|
2,478
|
|
Short-term investments
|
—
|
|
|
4,349
|
|
|
—
|
|
|
—
|
|
|
4,349
|
|
|||||
Accounts and notes receivable, net
|
195
|
|
|
—
|
|
|
4,089
|
|
|
(195
|
)
|
|
4,089
|
|
|||||
Device and accessory inventory
|
—
|
|
|
—
|
|
|
979
|
|
|
—
|
|
|
979
|
|
|||||
Prepaid expenses and other current assets
|
—
|
|
|
14
|
|
|
587
|
|
|
—
|
|
|
601
|
|
|||||
Total current assets
|
195
|
|
|
6,397
|
|
|
6,099
|
|
|
(195
|
)
|
|
12,496
|
|
|||||
Investments in subsidiaries
|
19,007
|
|
|
24,380
|
|
|
—
|
|
|
(43,387
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
18,866
|
|
|
—
|
|
|
18,866
|
|
|||||
Due from consolidated affiliate
|
24
|
|
|
12,486
|
|
|
—
|
|
|
(12,510
|
)
|
|
—
|
|
|||||
Note receivable from consolidated affiliate
|
10,398
|
|
|
575
|
|
|
—
|
|
|
(10,973
|
)
|
|
—
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
—
|
|
|
6,578
|
|
|
—
|
|
|
6,578
|
|
|||||
FCC licenses and other
|
—
|
|
|
—
|
|
|
41,074
|
|
|
—
|
|
|
41,074
|
|
|||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
3,075
|
|
|
—
|
|
|
3,075
|
|
|||||
Other assets
|
—
|
|
|
133
|
|
|
1,102
|
|
|
—
|
|
|
1,235
|
|
|||||
Total assets
|
$
|
29,624
|
|
|
$
|
43,971
|
|
|
$
|
76,794
|
|
|
$
|
(67,065
|
)
|
|
$
|
83,324
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,616
|
|
|
$
|
—
|
|
|
$
|
2,616
|
|
Accrued expenses and other current liabilities
|
211
|
|
|
435
|
|
|
3,379
|
|
|
(195
|
)
|
|
3,830
|
|
|||||
Current portion of long-term debt, financing and capital lease obligations
|
—
|
|
|
956
|
|
|
4,169
|
|
|
—
|
|
|
5,125
|
|
|||||
Total current liabilities
|
211
|
|
|
1,391
|
|
|
10,164
|
|
|
(195
|
)
|
|
11,571
|
|
|||||
Long-term debt, financing and capital lease obligations
|
10,398
|
|
|
12,342
|
|
|
11,719
|
|
|
—
|
|
|
34,459
|
|
|||||
Note payable due to consolidated affiliate
|
—
|
|
|
10,398
|
|
|
575
|
|
|
(10,973
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
14,701
|
|
|
—
|
|
|
14,701
|
|
|||||
Other liabilities
|
—
|
|
|
833
|
|
|
2,745
|
|
|
—
|
|
|
3,578
|
|
|||||
Due to consolidated affiliate
|
—
|
|
|
—
|
|
|
12,510
|
|
|
(12,510
|
)
|
|
—
|
|
|||||
Total liabilities
|
10,609
|
|
|
24,964
|
|
|
52,414
|
|
|
(23,678
|
)
|
|
64,309
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
19,015
|
|
|
19,007
|
|
|
24,380
|
|
|
(43,387
|
)
|
|
19,015
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
29,624
|
|
|
$
|
43,971
|
|
|
$
|
76,794
|
|
|
$
|
(67,065
|
)
|
|
$
|
83,324
|
|
|
March 31, 2017
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2,461
|
|
|
$
|
409
|
|
|
$
|
—
|
|
|
$
|
2,870
|
|
Short-term investments
|
—
|
|
|
5,444
|
|
|
—
|
|
|
—
|
|
|
5,444
|
|
|||||
Accounts and notes receivable, net
|
86
|
|
|
1
|
|
|
4,137
|
|
|
(86
|
)
|
|
4,138
|
|
|||||
Device and accessory inventory
|
—
|
|
|
—
|
|
|
1,064
|
|
|
—
|
|
|
1,064
|
|
|||||
Prepaid expenses and other current assets
|
—
|
|
|
11
|
|
|
590
|
|
|
—
|
|
|
601
|
|
|||||
Total current assets
|
86
|
|
|
7,917
|
|
|
6,200
|
|
|
(86
|
)
|
|
14,117
|
|
|||||
Investments in subsidiaries
|
18,800
|
|
|
23,854
|
|
|
—
|
|
|
(42,654
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
19,209
|
|
|
—
|
|
|
19,209
|
|
|||||
Due from consolidated affiliate
|
25
|
|
|
13,032
|
|
|
—
|
|
|
(13,057
|
)
|
|
—
|
|
|||||
Note receivable from consolidated affiliate
|
10,394
|
|
|
575
|
|
|
—
|
|
|
(10,969
|
)
|
|
—
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
—
|
|
|
6,579
|
|
|
—
|
|
|
6,579
|
|
|||||
FCC licenses and other
|
—
|
|
|
—
|
|
|
40,585
|
|
|
—
|
|
|
40,585
|
|
|||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
3,320
|
|
|
—
|
|
|
3,320
|
|
|||||
Other assets
|
—
|
|
|
134
|
|
|
1,179
|
|
|
—
|
|
|
1,313
|
|
|||||
Total assets
|
$
|
29,305
|
|
|
$
|
45,512
|
|
|
$
|
77,072
|
|
|
$
|
(66,766
|
)
|
|
$
|
85,123
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,281
|
|
|
$
|
—
|
|
|
$
|
3,281
|
|
Accrued expenses and other current liabilities
|
103
|
|
|
478
|
|
|
3,646
|
|
|
(86
|
)
|
|
4,141
|
|
|||||
Current portion of long-term debt, financing and capital lease obligations
|
—
|
|
|
1,356
|
|
|
3,680
|
|
|
—
|
|
|
5,036
|
|
|||||
Total current liabilities
|
103
|
|
|
1,834
|
|
|
10,607
|
|
|
(86
|
)
|
|
12,458
|
|
|||||
Long-term debt, financing and capital lease obligations
|
10,394
|
|
|
13,647
|
|
|
11,837
|
|
|
—
|
|
|
35,878
|
|
|||||
Note payable due to consolidated affiliate
|
—
|
|
|
10,394
|
|
|
575
|
|
|
(10,969
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
14,416
|
|
|
—
|
|
|
14,416
|
|
|||||
Other liabilities
|
—
|
|
|
837
|
|
|
2,726
|
|
|
—
|
|
|
3,563
|
|
|||||
Due to consolidated affiliate
|
—
|
|
|
—
|
|
|
13,057
|
|
|
(13,057
|
)
|
|
—
|
|
|||||
Total liabilities
|
10,497
|
|
|
26,712
|
|
|
53,218
|
|
|
(24,112
|
)
|
|
66,315
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
18,808
|
|
|
18,800
|
|
|
23,854
|
|
|
(42,654
|
)
|
|
18,808
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
29,305
|
|
|
$
|
45,512
|
|
|
$
|
77,072
|
|
|
$
|
(66,766
|
)
|
|
$
|
85,123
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,157
|
|
|
$
|
—
|
|
|
$
|
8,157
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
1,709
|
|
|
—
|
|
|
1,709
|
|
|||||
Cost of products (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
1,545
|
|
|
—
|
|
|
1,545
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
1,938
|
|
|
—
|
|
|
1,938
|
|
|||||
Depreciation
|
—
|
|
|
—
|
|
|
1,831
|
|
|
—
|
|
|
1,831
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
223
|
|
|
—
|
|
|
223
|
|
|||||
Other, net
|
—
|
|
|
(55
|
)
|
|
(197
|
)
|
|
—
|
|
|
(252
|
)
|
|||||
|
—
|
|
|
(55
|
)
|
|
7,049
|
|
|
—
|
|
|
6,994
|
|
|||||
Operating income
|
—
|
|
|
55
|
|
|
1,108
|
|
|
—
|
|
|
1,163
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
198
|
|
|
45
|
|
|
4
|
|
|
(228
|
)
|
|
19
|
|
|||||
Interest expense
|
(198
|
)
|
|
(351
|
)
|
|
(292
|
)
|
|
228
|
|
|
(613
|
)
|
|||||
Earnings (losses) of subsidiaries
|
206
|
|
|
524
|
|
|
—
|
|
|
(730
|
)
|
|
—
|
|
|||||
Other expense, net
|
—
|
|
|
(67
|
)
|
|
(4
|
)
|
|
—
|
|
|
(71
|
)
|
|||||
|
206
|
|
|
151
|
|
|
(292
|
)
|
|
(730
|
)
|
|
(665
|
)
|
|||||
Income (loss) before income taxes
|
206
|
|
|
206
|
|
|
816
|
|
|
(730
|
)
|
|
498
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
—
|
|
|
(292
|
)
|
|||||
Net income (loss)
|
206
|
|
|
206
|
|
|
524
|
|
|
(730
|
)
|
|
206
|
|
|||||
Other comprehensive (loss) income
|
(4
|
)
|
|
(4
|
)
|
|
5
|
|
|
(1
|
)
|
|
(4
|
)
|
|||||
Comprehensive income (loss)
|
$
|
202
|
|
|
$
|
202
|
|
|
$
|
529
|
|
|
$
|
(731
|
)
|
|
$
|
202
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,012
|
|
|
$
|
—
|
|
|
$
|
8,012
|
|
Net operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
2,099
|
|
|
—
|
|
|
2,099
|
|
|||||
Cost of products (exclusive of depreciation and amortization included below)
|
—
|
|
|
—
|
|
|
1,419
|
|
|
—
|
|
|
1,419
|
|
|||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
1,917
|
|
|
—
|
|
|
1,917
|
|
|||||
Severance and exit costs
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Depreciation
|
—
|
|
|
—
|
|
|
1,680
|
|
|
—
|
|
|
1,680
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
|
287
|
|
|
—
|
|
|
287
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
233
|
|
|
—
|
|
|
233
|
|
|||||
|
—
|
|
|
—
|
|
|
7,651
|
|
|
—
|
|
|
7,651
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
361
|
|
|
—
|
|
|
361
|
|
|||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
198
|
|
|
28
|
|
|
3
|
|
|
(219
|
)
|
|
10
|
|
|||||
Interest expense
|
(198
|
)
|
|
(423
|
)
|
|
(213
|
)
|
|
219
|
|
|
(615
|
)
|
|||||
(Losses) earnings of subsidiaries
|
(302
|
)
|
|
94
|
|
|
—
|
|
|
208
|
|
|
—
|
|
|||||
Other expense, net
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
|
(302
|
)
|
|
(302
|
)
|
|
(211
|
)
|
|
208
|
|
|
(607
|
)
|
|||||
(Loss) income before income taxes
|
(302
|
)
|
|
(302
|
)
|
|
150
|
|
|
208
|
|
|
(246
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|||||
Net (loss) income
|
(302
|
)
|
|
(302
|
)
|
|
94
|
|
|
208
|
|
|
(302
|
)
|
|||||
Other comprehensive (loss) income
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(303
|
)
|
|
$
|
(303
|
)
|
|
$
|
95
|
|
|
$
|
208
|
|
|
$
|
(303
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(521
|
)
|
|
$
|
1,801
|
|
|
$
|
—
|
|
|
$
|
1,280
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures - network and other
|
—
|
|
|
—
|
|
|
(1,121
|
)
|
|
—
|
|
|
(1,121
|
)
|
|||||
Capital expenditures - leased devices
|
—
|
|
|
—
|
|
|
(497
|
)
|
|
—
|
|
|
(497
|
)
|
|||||
Expenditures relating to FCC licenses
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Proceeds from sales and maturities of short-term investments
|
—
|
|
|
2,594
|
|
|
—
|
|
|
—
|
|
|
2,594
|
|
|||||
Purchases of short-term investments
|
—
|
|
|
(1,499
|
)
|
|
—
|
|
|
—
|
|
|
(1,499
|
)
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
588
|
|
|
—
|
|
|
(588
|
)
|
|
—
|
|
|||||
Proceeds from sales of assets and FCC licenses
|
—
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net cash provided by (used in) investing activities
|
—
|
|
|
1,683
|
|
|
(1,533
|
)
|
|
(588
|
)
|
|
(438
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt and financings
|
—
|
|
|
—
|
|
|
902
|
|
|
—
|
|
|
902
|
|
|||||
Repayments of debt, financing and capital lease obligations
|
—
|
|
|
(1,598
|
)
|
|
(523
|
)
|
|
—
|
|
|
(2,121
|
)
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
—
|
|
|
(588
|
)
|
|
588
|
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
9
|
|
|
(24
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Net cash (used in) provided by financing activities
|
—
|
|
|
(1,589
|
)
|
|
(233
|
)
|
|
588
|
|
|
(1,234
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
—
|
|
|
(427
|
)
|
|
35
|
|
|
—
|
|
|
(392
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
2,461
|
|
|
409
|
|
|
—
|
|
|
2,870
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
2,034
|
|
|
$
|
444
|
|
|
$
|
—
|
|
|
$
|
2,478
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||
|
Parent/Issuer
|
|
Subsidiary Guarantor
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(337
|
)
|
|
$
|
943
|
|
|
$
|
(64
|
)
|
|
$
|
542
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures - network and other
|
—
|
|
|
—
|
|
|
(473
|
)
|
|
—
|
|
|
(473
|
)
|
|||||
Capital expenditures - leased devices
|
—
|
|
|
—
|
|
|
(405
|
)
|
|
—
|
|
|
(405
|
)
|
|||||
Expenditures relating to FCC licenses
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Purchases of short-term investments
|
—
|
|
|
(1,269
|
)
|
|
(35
|
)
|
|
—
|
|
|
(1,304
|
)
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
2,924
|
|
|
—
|
|
|
(2,924
|
)
|
|
—
|
|
|||||
Proceeds from sales of assets and FCC licenses
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|||||
Intercompany note advance to consolidated affiliate
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
50
|
|
|
—
|
|
|||||
Proceeds from intercompany note advance to consolidated affiliate
|
—
|
|
|
24
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||||
Net cash provided by (used in) investing activities
|
—
|
|
|
1,629
|
|
|
(926
|
)
|
|
(2,898
|
)
|
|
(2,195
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt and financings
|
—
|
|
|
—
|
|
|
3,255
|
|
|
—
|
|
|
3,255
|
|
|||||
Repayments of debt, financing and capital lease obligations
|
—
|
|
|
—
|
|
|
(294
|
)
|
|
—
|
|
|
(294
|
)
|
|||||
Debt financing costs
|
—
|
|
|
(110
|
)
|
|
(65
|
)
|
|
—
|
|
|
(175
|
)
|
|||||
Intercompany dividends paid to consolidated affiliate
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
64
|
|
|
—
|
|
|||||
Change in amounts due from/due to consolidated affiliates
|
—
|
|
|
—
|
|
|
(2,924
|
)
|
|
2,924
|
|
|
—
|
|
|||||
Intercompany note advance from consolidated affiliate
|
—
|
|
|
—
|
|
|
50
|
|
|
(50
|
)
|
|
—
|
|
|||||
Repayments of intercompany note advance from consolidated affiliate
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
24
|
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
6
|
|
|||||
Net cash (used in) provided by financing activities
|
—
|
|
|
(108
|
)
|
|
(62
|
)
|
|
2,962
|
|
|
2,792
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
1,184
|
|
|
(45
|
)
|
|
—
|
|
|
1,139
|
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
2,154
|
|
|
487
|
|
|
—
|
|
|
2,641
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
3,338
|
|
|
$
|
442
|
|
|
$
|
—
|
|
|
$
|
3,780
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Unlock the value of our substantial spectrum holdings by densifying and optimizing our network to provide customers with the best experience;
|
•
|
Achieve our cost reduction goals by significantly transforming our business;
|
•
|
Deliver an attractive value proposition and substantially enhance our distribution through use of innovative models;
|
•
|
Create an alternative financial structure that leverages our assets to fuel our growth and maximize stockholder value;
|
•
|
Attract and retain world-class talent and establish strategic partnerships to create an optimal, engaged, and winning team; and
|
•
|
Deliver an exceptional wireless experience so customers stay longer, buy more, and tell their friends.
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Wireless segment earnings
|
$
|
2,866
|
|
|
$
|
2,440
|
|
Wireline segment earnings
|
(11
|
)
|
|
19
|
|
||
Corporate, other and eliminations
|
(2
|
)
|
|
(2
|
)
|
||
Consolidated segment earnings
|
2,853
|
|
|
2,457
|
|
||
Depreciation
|
(1,831
|
)
|
|
(1,680
|
)
|
||
Amortization
|
(223
|
)
|
|
(287
|
)
|
||
Other, net
|
364
|
|
|
(129
|
)
|
||
Operating income
|
1,163
|
|
|
361
|
|
||
Interest expense
|
(613
|
)
|
|
(615
|
)
|
||
Other (expense) income, net
|
(52
|
)
|
|
8
|
|
||
Income tax expense
|
(292
|
)
|
|
(56
|
)
|
||
Net income (loss)
|
$
|
206
|
|
|
$
|
(302
|
)
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Severance and exit costs
|
$
|
—
|
|
|
$
|
(16
|
)
|
Litigation and other contingencies
|
55
|
|
|
—
|
|
||
Loss on disposal of property, plant and equipment, net
|
(175
|
)
|
|
—
|
|
||
Contract terminations
|
5
|
|
|
(113
|
)
|
||
Gains from asset dispositions and exchanges
|
479
|
|
|
—
|
|
||
Total
|
$
|
364
|
|
|
$
|
(129
|
)
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
Wireless Segment Earnings
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Postpaid
|
$
|
4,466
|
|
|
$
|
4,778
|
|
Prepaid
(1)
|
999
|
|
|
1,074
|
|
||
Retail service revenue
|
5,465
|
|
|
5,852
|
|
||
Wholesale, affiliate and other
(1)
|
259
|
|
|
249
|
|
||
Total service revenue
|
5,724
|
|
|
6,101
|
|
||
Cost of services (exclusive of depreciation and amortization)
|
(1,412
|
)
|
|
(1,784
|
)
|
||
Service gross margin
|
4,312
|
|
|
4,317
|
|
||
Service gross margin percentage
|
75
|
%
|
|
71
|
%
|
||
Equipment revenue
|
2,086
|
|
|
1,496
|
|
||
Cost of products (exclusive of depreciation and amortization)
|
(1,545
|
)
|
|
(1,419
|
)
|
||
Selling, general and administrative expense
|
(1,875
|
)
|
|
(1,834
|
)
|
||
Loss on disposal of property, plant and equipment
|
(112
|
)
|
|
(120
|
)
|
||
Wireless segment earnings
|
$
|
2,866
|
|
|
$
|
2,440
|
|
(1)
|
Sprint is no longer reporting Lifeline subscribers due to recent regulatory changes resulting in tighter program restrictions. We have excluded them 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 table reflects the reclassification of the related Assurance Wireless prepaid revenue from Prepaid service revenue to Wholesale, affiliate and other revenue of
$82 million
and
$91 million
for the three months ended June 30, 2017 and 2016, respectively. Revenue associated with subscribers through our wholesale Lifeline MVNOs continues to remain in Wholesale, affiliate and other revenue following this change.
|
•
|
revenue generated from each subscriber, which in turn is a function of the types and amount of services utilized by each subscriber and the rates charged for those services; and
|
•
|
the number of subscribers that we serve, which in turn is a function of our ability to retain existing subscribers and acquire new subscribers.
|
|
Three Months Ended
|
||||
|
June 30,
|
||||
|
2017
|
|
2016
|
||
|
(subscribers in thousands)
|
||||
Average postpaid subscribers
|
31,472
|
|
|
30,900
|
|
Average prepaid subscribers
|
8,710
|
|
|
10,846
|
|
Average retail subscribers
|
40,182
|
|
|
41,746
|
|
(1)
|
ARPU is calculated by dividing service revenue by the sum of the monthly 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.
|
|
June 30, 2016
|
|
Sept 30,
2016 |
|
Dec 31,
2016 |
|
March 31, 2017
|
|
June 30, 2017
|
|||||
Net additions (losses) (in thousands)
(1)
|
|
|
|
|
|
|
|
|
|
|||||
Postpaid
|
180
|
|
|
344
|
|
|
405
|
|
|
(118
|
)
|
|
(39
|
)
|
Prepaid
(2)
|
(306
|
)
|
|
(449
|
)
|
|
(460
|
)
|
|
195
|
|
|
35
|
|
Wholesale and affiliates
(2)
|
728
|
|
|
704
|
|
|
619
|
|
|
291
|
|
|
65
|
|
Total Wireless
|
602
|
|
|
599
|
|
|
564
|
|
|
368
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|||||
End of period subscribers (in thousands)
(1)
|
|
|
|
|
|
|
|
|
|
|||||
Postpaid
(3)(4)(5)
|
30,945
|
|
|
31,289
|
|
|
31,694
|
|
|
31,576
|
|
|
31,518
|
|
Prepaid
(2)(3)(6)
|
10,636
|
|
|
10,187
|
|
|
8,493
|
|
|
8,688
|
|
|
8,719
|
|
Wholesale and affiliates
(2)(3)(4)(6)(7)
|
11,782
|
|
|
12,486
|
|
|
13,084
|
|
|
13,375
|
|
|
13,461
|
|
Total Wireless
|
53,363
|
|
|
53,962
|
|
|
53,271
|
|
|
53,639
|
|
|
53,698
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Supplemental data - connected devices
|
|
|
|
|
|
|
|
|
|
|||||
End of period subscribers (in thousands)
(4)
|
|
|
|
|
|
|
|
|
|
|||||
Retail postpaid
|
1,822
|
|
|
1,874
|
|
|
1,960
|
|
|
2,001
|
|
|
2,091
|
|
Wholesale and affiliates
|
9,244
|
|
|
9,951
|
|
|
10,594
|
|
|
10,880
|
|
|
11,100
|
|
Total
|
11,066
|
|
|
11,825
|
|
|
12,554
|
|
|
12,881
|
|
|
13,191
|
|
(1)
|
A subscriber is defined as an individual line of service associated with each device activated by a customer. Subscribers that transfer from their original service category classification to another platform, or another service line within the same platform, are reflected as a net loss to the original service category and a net addition to their new service category. There is no net effect for such subscriber changes to the total wireless net additions (losses) or end of period subscribers.
|
(2)
|
Sprint is no longer reporting Lifeline subscribers due to recent regulatory changes resulting in tighter program restrictions. We have excluded them from our customer base for all periods presented, including our Assurance Wireless prepaid brand and subscribers through our wholesale MVNOs.
|
(3)
|
As part of the Shentel transaction, 186,000 and 92,000 subscribers were transferred from postpaid and prepaid, respectively, to affiliates. An additional 270,000 of nTelos' subscribers are now part of our affiliate relationship with Shentel and were reported in wholesale and affiliate subscribers beginning with the quarter ended June 30, 2016. In addition, during the three-month period ended June 30, 2017, 17,000 and 4,000 subscribers were transferred from postpaid and prepaid, respectively, to affiliates as a result of the transfer of additional subscribers to Shentel.
|
(4)
|
End of period connected devices are included in total retail postpaid or wholesale and affiliates end of period subscriber totals for all periods presented.
|
(5)
|
During the three-month period ended June 30, 2017, 2,000 Wi-Fi connections were adjusted from the postpaid subscriber base.
|
(6)
|
During the three-month period ended December 31, 2016, the Company aligned all prepaid brands, excluding Assurance Wireless but including prepaid affiliate subscribers, under one churn and retention program. As a result of this change, end of period prepaid and affiliate subscribers as of December 31, 2016 were reduced by 1,234,000 and 21,000, respectively. See "Subscriber Results" below for more information.
|
(7)
|
Subscribers through some of our MVNO relationships have inactivity either in voice usage or primarily as a result of the nature of the device, where activity only occurs when data retrieval is initiated by the end-user and may occur infrequently. Although we continue to provide these subscribers access to our network through our MVNO relationships, approximately
1,777,000
subscribers at
June 30, 2017
through these MVNO relationships have been inactive for at least six months, with no associated revenue during the six-month period ended
June 30, 2017
.
|
|
June 30,
2016 |
|
Sept 30,
2016 |
|
Dec 31,
2016 |
|
March 31, 2017
|
|
June 30,
2017 (2) |
|||||
Monthly subscriber churn rate
(1)
|
|
|
|
|
|
|
|
|
|
|||||
Postpaid
|
1.56
|
%
|
|
1.52
|
%
|
|
1.67
|
%
|
|
1.75
|
%
|
|
1.65
|
%
|
Prepaid
|
5.39
|
%
|
|
5.59
|
%
|
|
5.74
|
%
|
|
4.69
|
%
|
|
4.57
|
%
|
(1)
|
Churn is calculated by dividing net subscriber deactivations for the quarter by the sum of the average number of subscribers for each month in the quarter. For postpaid accounts comprising multiple subscribers, such as family plans and enterprise accounts, net deactivations are defined as deactivations in excess of subscriber activations in a particular account within 30 days. Postpaid and prepaid churn consist of both voluntary churn, where the subscriber makes his or her own determination to cease being a subscriber, and involuntary churn, where the subscriber's service is terminated due to a lack of payment or other reasons.
|
(2)
|
In the quarter ended June 30, 2017, the Company enhanced subscriber reporting to better align certain early-life gross activations and deactivations associated with customers who have not paid us after the initial subscriber transaction. This enhancement had no impact to net additions, but did result in reporting lower gross additions and lower deactivations in the quarter. Without this enhancement, total postpaid churn in the quarter would have been 1.73% versus 1.65%.
|
|
June 30,
2016 |
|
Sept 30,
2016 |
|
Dec 31,
2016 |
|
March 31, 2017
|
|
June 30,
2017 |
||||||||||
ARPU
|
|
|
|
|
|
|
|
|
|
||||||||||
Postpaid
|
$
|
51.54
|
|
|
$
|
50.54
|
|
|
$
|
49.70
|
|
|
$
|
47.34
|
|
|
$
|
47.30
|
|
Prepaid
|
$
|
33.00
|
|
|
$
|
33.15
|
|
|
$
|
33.97
|
|
|
$
|
38.48
|
|
|
$
|
38.24
|
|
•
|
costs to operate and maintain our networks, including direct switch and cell site costs, such as rent, utilities, maintenance, labor costs associated with network employees, and spectrum frequency leasing costs;
|
•
|
fixed and variable interconnection costs, the fixed component of which consists of monthly flat-rate fees for facilities leased from local exchange carriers and other providers based on the number of cell sites and switches in service in a particular period and the related equipment installed at each site, and the variable component of which generally consists of per-minute usage fees charged by wireline providers for calls terminating on their networks, which fluctuate in relation to the level and duration of those terminating calls;
|
•
|
long distance costs paid to the Wireline segment;
|
•
|
costs to service and repair devices;
|
•
|
regulatory fees;
|
•
|
roaming fees paid to other carriers; and
|
•
|
fixed and variable costs relating to payments to third parties for the subscriber use of their proprietary data applications, such as messaging, music and cloud services and connected vehicle fees.
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
Wireline Segment Earnings
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Voice
|
$
|
124
|
|
|
$
|
181
|
|
Data
|
34
|
|
|
43
|
|
||
Internet
|
255
|
|
|
302
|
|
||
Other
|
20
|
|
|
19
|
|
||
Total net service revenue
|
433
|
|
|
545
|
|
||
Cost of services (exclusive of depreciation)
|
(387
|
)
|
|
(448
|
)
|
||
Service gross margin
|
46
|
|
|
97
|
|
||
Service gross margin percentage
|
11
|
%
|
|
18
|
%
|
||
Selling, general and administrative expense
|
(57
|
)
|
|
(78
|
)
|
||
Wireline segment earnings
|
$
|
(11
|
)
|
|
$
|
19
|
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Net cash provided by operating activities
|
$
|
1,280
|
|
|
$
|
542
|
|
Net cash used in investing activities
|
$
|
(438
|
)
|
|
$
|
(2,195
|
)
|
Net cash (used in) provided by financing activities
|
$
|
(1,234
|
)
|
|
$
|
2,792
|
|
•
|
projected revenues and expenses relating to our operations, including those related to our installment billing and leasing programs, along with the success of initiatives such as our expectations of achieving a more competitive cost structure through cost reduction initiatives and increasing our postpaid handset subscriber base;
|
•
|
cash needs related to our installment billing and device leasing programs;
|
•
|
availability under the Receivables Facility, which terminates in November 2018;
|
•
|
availability of our
$2.0 billion
secured revolving bank credit facility, which expires in February 2021, less outstanding letters of credit;
|
•
|
remaining availability of approximately
$855 million
of our secured equipment credit facilities for eligible capital expenditures, and any corresponding principal, interest, and fee payments;
|
•
|
scheduled principal payments on debt, credit facilities and financing obligations, including approximately $20.2 billion coming due over the next five years;
|
•
|
raising additional funds from external sources;
|
•
|
the expected use of cash and cash equivalents in the near-term;
|
•
|
anticipated levels and timing of capital expenditures, including assumptions regarding lower unit costs, network capacity additions and upgrades, and the deployment of new technologies in our networks, FCC license acquisitions, and purchases of leased devices from our indirect dealers;
|
•
|
any additional contributions we may make to our pension plan;
|
•
|
estimated residual values of devices related to our device lease program; and
|
•
|
other future contractual obligations and general corporate expenditures.
|
|
|
Rating
|
||||||||||
Rating Agency
|
|
Issuer Rating
|
|
Unsecured Notes
|
|
Guaranteed Notes
|
|
Secured Bank Credit Facility
|
|
Spectrum Notes
|
|
Outlook
|
Moody's
|
|
B2
|
|
B3
|
|
B1
|
|
Ba2
|
|
Baa2
|
|
Stable
|
Standard and Poor's
|
|
B
|
|
B
|
|
B+
|
|
BB-
|
|
N/A
|
|
Stable
|
Fitch
|
|
B+
|
|
B+
|
|
BB
|
|
BB+
|
|
BBB
|
|
Stable
|
•
|
our ability to continue to obtain additional financing, including receivables facilities and monetizing certain of our assets, including those under our existing or future programs to monetize a portion of our network or spectrum holdings, or to modify the terms of our existing financing, on terms acceptable to us, or at all;
|
•
|
our ability to retain and attract subscribers and to manage credit risks associated with our subscribers;
|
•
|
the effects of any future merger or acquisition involving us, as well as the effect of mergers, acquisitions and consolidations, and new entrants in the communications industry, and unexpected announcements or developments from others in our industry;
|
•
|
the effective implementation of our plans to improve the quality of our network, including timing, execution, technologies, costs, and performance of our network;
|
•
|
failure to improve subscriber churn, bad debt expense, accelerated cash use, costs and write-offs, including with respect to changes in expected residual values related to any of our service plans, including installment billing and leasing programs;
|
•
|
the ability to generate sufficient cash flow to fully implement our plans to improve and enhance the quality of our network and service plans, improve our operating margins, implement our business strategies, and provide competitive new technologies;
|
•
|
the effects of vigorous competition on a highly penetrated market, including the impact of competition on the prices we are able to charge subscribers for services and devices we provide and on the geographic areas served by our network;
|
•
|
the impact of device financing programs, including leasing of handsets; the impact of purchase commitments; the overall demand for our service plans; and the impact of new, emerging, and competing technologies on our business;
|
•
|
our ability to provide the desired mix of integrated services to our subscribers;
|
•
|
our ability to continue to access our spectrum and acquire additional spectrum capacity;
|
•
|
changes in available technology and the effects of such changes, including product substitutions and deployment costs and performance;
|
•
|
volatility in the trading price of our common stock, current economic conditions and our ability to access capital, including debt or equity;
|
•
|
the impact of various parties not meeting our business requirements, including a significant adverse change in the ability or willingness of such parties to provide service and products, including distribution, or infrastructure equipment for our network;
|
•
|
the costs and business risks associated with providing new services and entering new geographic markets;
|
•
|
the ability of our competitors to offer products and services at lower prices due to lower cost structures or otherwise;
|
•
|
our ability to comply with restrictions imposed by the U.S. Government as a condition to our merger with SoftBank;
|
•
|
the effects of any material impairment of our goodwill or other indefinite-lived intangible assets;
|
•
|
the impacts of new accounting standards or changes to existing standards that the Financial Accounting Standards Board or other regulatory agencies issue, including the Securities and Exchange Commission (SEC);
|
•
|
unexpected results of litigation filed against us or our suppliers or vendors;
|
•
|
the costs or potential customer impact of compliance with regulatory mandates including, but not limited to, compliance with the FCC's Report and Order to reconfigure the 800 MHz band and government regulation regarding "net neutrality";
|
•
|
equipment failure, natural disasters, terrorist acts or breaches of network or information technology security;
|
•
|
one or more of the markets in which we compete being impacted by changes in political, economic or other factors such as monetary policy, legal and regulatory changes, or other external factors over which we have no control;
|
•
|
the impact of being a "controlled company" exempt from many corporate governance requirements of the NYSE; and
|
•
|
other risks referenced from time to time in this report and other filings of ours with the SEC, including Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended
March 31, 2017
.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
SPRINT CORPORATION
(Registrant)
|
||
|
|
|
By:
|
/s/ P
AUL
W. S
CHIEBER,
J
R.
|
|
|
|
Paul W. Schieber, Jr.
Vice President and Controller
(Principal Accounting Officer)
|
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Incorporated by Reference
|
|
Filed/Furnished
Herewith
|
|||||
|
SEC
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||
(101) Formatted in XBRL (Extensible Business Reporting Language)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
*
|
*
|
Filed or furnished, as required.
|
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