Sprint presenta resultados de Q4 2013

La empresa número tres de la nación americana ha anunciado como le fue en el último trimestre y el resumen del año 2013 para ellos y al parecer, no fue mal año a pesar de la fuerte competencia.

[toggle title=”Sprint Reports Fourth Quarter and Full Year 2013 Results” state=”close” ]

• Fourth quarter Operating Loss improved 22 percent to $576 million; Adjusted EBITDA* of $1.15 billion improved by nearly 40 percent or more than $300 million year-over-year compared to combined prior year results

  • Combined annual Operating Loss of $1.9 billion
  • Annual Adjusted EBITDA* of $5.4 billion grew 13 percent year-over-year

• Highest-ever annual Sprint platform wireless service revenue of $28.6 billion grew more than 5 percent year-over-year
  • Fourth quarter Sprint platform wireless service revenue of $7.2 billion grew year-over-year for the 15th consecutive quarter
  • Best-ever annual Sprint platform postpaid ARPU of $64.07
• Highest-ever Sprint platform subscribers at 53.9 million
  • 682,000 total Sprint platform net additions in the fourth quarter
  • 58,000 Sprint platform postpaid net additions in the fourth quarter
• Annual retail smartphone sales of 20.5 million and a record 95 percent of quarterly Sprint platform postpaid handset sales were smartphones
• Continued progress on the Network
  • More than 200 million people covered by 4G LTE
  • Sprint Spark TM available in 14 of the largest U.S. cities including today’s launches in Philadelphia and Baltimore
• Launched revolutionary new Sprint FramilySM that redefines traditional wireless family plans

The company’s fourth quarter 2013 earnings conference call will be held at 8 a.m. ET today. Participants may dial 800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and provide the following ID: 31411101 or may listen via the Internet at www.sprint.com/investors.

Additional information about results can be found in the “Quarterly Investor Update” posted on our Investor Relations website at www.sprint.com/investors.

Financial results in the enclosed tables for 2013 and 2012 include a predecessor period from January 1, 2012, through the closing of the SoftBank transaction on July 10, 2013, and a successor period from October 5, 2012 through December 31, 2013. In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined the current year and prior year results of operations for the predecessor and successor periods. The enclosed remarks are in reference to the unaudited combined period unless otherwise noted. For additional information please reference the section titled Financial Measures.

OVERLAND PARK, Kan. (BUSINESS WIRE), February 11, 2014 – Sprint Corporation (NYSE:S) today reported operating revenue, which grew year-over-year to more than $9.1 billion for the fourth quarter and to $35.5 billion for the full year 2013. Operating loss was $576 million in the fourth quarter, a 22 percent year-over-year improvement. Quarterly Adjusted EBITDA* of $1.15 billion improved nearly 40 percent year-over-year. Annual Adjusted EBITDA* of $5.4 billion improved by 13 percent.

“In 2013 Adjusted EBITDA* and Sprint platform wireless revenues grew significantly while we made investments to improve network performance and expand 4G LTE to more than 200 million people,” said Dan Hesse, Sprint CEO. “As we roll out Sprint SparkTM and create innovative offers like Sprint FramilySM, we are building a foundation for future success.”

Sprint Platform Subscriber Net Additions of 682,000 and Record Smartphone Sales Mix

Sprint ended the year with 53.9 million Sprint platform subscribers – its highest level ever – after adding 58,000 postpaid subscribers, 322,000 prepaid subscribers and 302,000 wholesale and affiliate subscribers in the fourth quarter. Sprint sold 5.6 million smartphones in the fourth quarter and 20.5 million smartphones for the year with smartphone sales mix reaching 95 percent for postpaid and 66 percent for prepaid in the quarter.

Net Income and Operating Loss Improve Year-Over-Year; Adjusted EBITDA* Up Nearly 40 percent Year-Over-Year

Quarterly net loss was $1 billion in the fourth quarter as compared to a loss of $1.3 billion in the fourth quarter of 2012. Operating loss for the quarter was $576 million as compared to an operating loss of $738 million in the fourth quarter of 2012.

Quarterly Adjusted EBITDA* of $1.15 billion improved nearly 40 percent year-over-year as growth in Sprint platform service revenue, network savings resulting from the Nextel platform shutdown and lower net subsidy expense were partially offset by the loss of Nextel platform revenue and the consolidation of Clearwire’s results.

LTE Coverage Now Available to More than 200 Million People; Sprint Spark TM Now in 14 Markets

Sprint currently has nearly 33,000 Network Vision sites on air, an increase of more than 24,000 sites over the last 12 months. LTE coverage is now available to more than 200 million people. The company continues to expect that by the middle of this year LTE coverage will reach 250 million people and the voice/3G network modernization deployment will be complete.

During the fourth quarter the company unveiled Sprint Spark – a combination of advanced network and device technology with the potential to surpass wireless speeds of any U.S. network provider, capable of delivering 50-60 Megabits per second peak speeds today with potential speeds three times as fast by late 2015. Sprint Spark leverages the company’s 800MHz, 1.9GHz and 2.5GHz spectrum together with devices offering tri-band capability and high-definition voice1.

Sprint plans to deploy Sprint Spark in about 100 of America’s largest cities during the next three years. By the end of this year, 100 million Americans are expected to have Sprint Spark coverage. Today, Sprint Spark launches in Philadelphia and Baltimore and, with the recent launch in Kansas City, is currently available in 14 markets including New York, Los Angeles and Chicago. Ten Sprint Spark-capable devices are currently available, including the recently updated Samsung Galaxy S® 4, Samsung Galaxy MEGA™, HTC One® max, LG G Flex and NETGEAR® Zing Mobile Hotspot™.

Sprint Framily Pricing Program Lets Customers Decide

Earlier this year, Sprint introduced Sprint Framily, a new pricing program available to new and existing customers that lets consumers decide who they consider family. With Sprint Framily, the more people added to the group (up to 10 phone lines), the greater the savings for everyone on the plan.

For one line of service, new Sprint customers pay $55 per month per line for unlimited talk, text and 1GB of data while on the Sprint network. For each additional new Sprint customer who joins the Framily group, the cost per person goes down $5 a month up to a maximum monthly discount of $30 per line. With a group of at least seven people, each customer gets unlimited talk, text and 1GB of data while on the Sprint network for $25 per month per line (pricing excludes taxes and surcharges).

All members of the group can customize their plan and for an additional $20 per month per line, Framily members can buy up to unlimited data plus get a new phone every year. Each account can be billed separately.

Sprint Garners Third-Party Recognition

Sprint received notable awards in the fourth quarter. In particular, CEVA Logistics, one of the world’s leading supply chain companies, named Sprint as Technology Supplier of the Year. Pinsight Media+, Sprint’s mobile media company, received the 2013 North American Mobile Advertising Product Leadership Award from Frost & Sullivan, and Dan Hesse was namedCorporate Responsibility Magazine’s Lifetime Achievement Award winner for 2013. Last month, Compass Intelligence named Sprint the most “Eco Focused Wireless Carrier,” and Sprint was the only U.S. telecommunications company to be named an Efficiency Leader to the 2014 National Capital Leaders Index by GreenBiz Group and Trucost. Additionally, for the second year in a row, Sprint was rated 16th in Chief Executive Magazine’s Best Companies for Leaders list.

Forecast

The company expects 2014 Adjusted EBITDA* to be between $6.5 billion and $6.7 billion.

The company expects 2014 capital expenditures of approximately $8 billion.

Wireless Operating Statistics (Unaudited)
				Quarter To Date												Year To Date
				12/31/13				9/30/13				12/31/12				12/31/13				12/31/12
Net (Losses) Additions (in thousands)
Sprint platform:
Postpaid (3)				58				(360	)			401				(96	)			1,516
Prepaid (4)				322				84				525				488				2,305
Wholesale and affiliate				302				181				(243	)			31				944
Total Sprint platform				682				(95	)			683				423				4,765
Nextel platform:
Postpaid (3)				–				–				(644	)			(1,632	)			(2,653	)
Prepaid (4)				–				–				(376	)			(454	)			(1,507	)
Total Nextel platform				–				–				(1,020	)			(2,086	)			(4,160	)
Transactions:(a)
Postpaid (3)				(127	)			(175	)			–				(481	)			–
Prepaid (4)				(103	)			(56	)			–				(179	)			–
Wholesale				25				13				–				38				–
Total transactions				(205	)			(218	)			–				(622	)			–
Total retail postpaid net losses				(69	)			(535	)			(243	)			(2,209	)			(1,137	)
Total retail prepaid net additions (losses)				219				28				149				(145	)			798
Total wholesale and affiliate net additions (losses)				327				194				(243	)			69				944
Total Wireless Net Additions (Losses)				477				(313	)			(337	)			(2,285	)			605
End of Period Subscribers (in thousands)
Sprint platform:
Postpaid(3)				30,149				30,091				30,245				30,149				30,245
Prepaid (4)				15,621				15,299				15,133				15,621				15,133
Wholesale and affiliate				8,164				7,862				8,162				8,164				8,162
Total Sprint platform				53,934				53,252				53,540				53,934				53,540
Nextel platform:
Postpaid (3)				–				–				1,632				–				1,632
Prepaid (4)				–				–				454				–				454
Total Nextel platform				–				–				2,086				–				2,086
Transactions:(a)
Postpaid (3)				688				815				–				688				–
Prepaid (4)				601				704				–				601				–
Wholesale				131				106				–				131				–
Total transactions				1,420				1,625				–				1,420				–
Total retail postpaid end of period subscribers				30,837				30,906				31,877				30,837				31,877
Total retail prepaid end of period subscribers				16,222				16,003				15,587				16,222				15,587
Total wholesale and affiliate end of period subscribers				8,295				7,968				8,162				8,295				8,162
Total End of Period Subscribers				55,354				54,877				55,626				55,354				55,626
Supplemental Data – Connected Devices
End of Period Subscribers (in thousands)
Retail postpaid				922				834				813				922				813
Wholesale and affiliate				3,578				3,298				2,670				3,578				2,670
Total				4,500				4,132				3,483				4,500				3,483
Churn
Sprint platform:
Postpaid				2.07	%			1.99	%			1.98	%			1.93	%			1.89	%
Prepaid				3.01	%			3.57	%			3.02	%			3.72	%			3.01	%
Nextel platform:
Postpaid				–				–				5.27	%			16.40	%			3.24	%
Prepaid				–				–				9.79	%			18.58	%			8.55	%
Transactions:(a)
Postpaid				5.48	%			6.38	%			–				7.65	%			–
Prepaid				8.18	%			8.84	%			–				8.66	%			–
Total retail postpaid churn				2.15	%			2.09	%			2.18	%			2.24	%			2.02	%
Total retail prepaid churn				3.22	%			3.78	%			3.30	%			3.94	%			3.45	%
Nextel Platform Subscriber Recaptures
Subscribers (in thousands) (5):
Postpaid				–				–				333				628				1,508
Prepaid				–				–				188				168				620
Rate (6):
Postpaid				–				–				51	%			38	%			55	%
Prepaid				–				–				50	%			37	%			33	%

(a) We acquired approximately 352,000 postpaid subscribers and 59,000 prepaid subscribers through the acquisition of assets from U.S. Cellular when the transaction closed on May 17, 2013. We acquired approximately 788,000 postpaid subscribers, 721,000 prepaid subscribers, 93,000 wholesale subscribers and transferred 29,000 Sprint wholesale subscribers that were originally recognized through our Clearwire MVNO arrangement to Transactions postpaid subscribers as a result of the Clearwire acquisition when the transaction closed on July 9, 2013.

Wireless Operating Statistics (Unaudited) (continued)
			Successor										Predecessor
			Quarter To Date			QuarterTo Date			YearTo Date				10 DaysEnded			191 DaysEnded			QuarterTo Date			YearTo Date
			12/31/13			9/30/13			12/31/13				7/10/13			7/10/13			12/31/12			12/31/12
ARPU (b)
Sprint platform:
Postpaid			$	64.11		$	64.24		$	64.17			$	64.71		$	63.98		$	63.04		$	63.05
Prepaid			$	26.78		$	25.14		$	26.01			$	26.99		$	26.49		$	26.30		$	25.92
Nextel platform:
Postpaid			$	–		$	–		$	–			$	–		$	35.84		$	37.27		$	39.65
Prepaid			$	–		$	–		$	–			$	–		$	32.60		$	35.59		$	35.91
Transactions:(a)
Postpaid			$	36.30		$	37.44		$	36.89			$	35.75		$	56.98		$	–		$	–
Prepaid			$	40.80		$	40.62		$	40.71			$	12.78		$	18.26		$	–		$	–
Total retail postpaid ARPU			$	63.44		$	63.48		$	63.46			$	64.55		$	63.10		$	61.47		$	60.84
Total retail prepaid ARPU			$	27.34		$	25.86		$	26.64			$	26.96		$	26.57		$	26.69		$	26.72

(a) We acquired approximately 352,000 postpaid subscribers and 59,000 prepaid subscribers through the acquisition of assets from U.S. Cellular when the transaction closed on May 17, 2013. We acquired approximately 788,000 postpaid subscribers, 721,000 prepaid subscribers, 93,000 wholesale subscribers and transferred 29,000 Sprint wholesale subscribers that were originally recognized through our Clearwire MVNO arrangement to Transactions postpaid subscribers as a result of the Clearwire acquisition when the transaction closed on July 9, 2013.

(b) ARPU is calculated by dividing service revenue by the sum of the 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.

Wireless Operating Statistics (Unaudited) (continued)
			Combined (1) Quarter to Date										Combined (1) Year to Date
			12/31/13			9/30/13			12/31/12				12/31/13			12/31/12
ARPU (b)
Sprint platform:
Postpaid			$	64.11		$	64.28		$	63.04			$	64.07		$	63.05
Prepaid			$	26.78		$	25.33		$	26.30			$	26.26		$	25.92
Nextel platform:
Postpaid			$	–		$	–		$	37.27			$	35.84		$	39.65
Prepaid			$	–		$	–		$	35.59			$	32.60		$	35.91
Transactions: (a)
Postpaid			$	36.30		$	40.00		$	–			$	39.96		$	–
Prepaid			$	40.80		$	43.20		$	–			$	41.55		$	–
Total retail postpaid ARPU			$	63.44		$	63.69		$	61.47			$	63.29		$	60.84
Total retail prepaid ARPU			$	27.34		$	26.04		$	26.69			$	26.62		$	26.72

(a) We acquired approximately 352,000 postpaid subscribers and 59,000 prepaid subscribers through the acquisition of assets from U.S. Cellular when the transaction closed on May 17, 2013. We acquired approximately 788,000 postpaid subscribers, 721,000 prepaid subscribers, 93,000 wholesale subscribers and transferred 29,000 Sprint wholesale subscribers that were originally recognized through our Clearwire MVNO arrangement to Transactions postpaid subscribers as a result of the Clearwire acquisition when the transaction closed on July 9, 2013.

(b) ARPU is calculated by dividing service revenue by the sum of the 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. Combined ARPU for the quarter-to-date September 30, 2013 period aggregate service revenue of the ten days ended July 10, 2013 Predecessor period and the quarter-to-date September 30, 2013 Successor period divided by the sum of the average subscribers during the quarter. Combined ARPU for the year-to-date December 31, 2013 period aggregate service revenue of the 191 days ended July 10, 2013 Predecessor period and the year-to-date December 31, 2013 Successor period divided by the sum of the average subscribers during the year-to-date period. Combined ARPU for the quarter-to-date December 31, 2013 period is not affected by Predecessor activity and, therefore, is consistent with the information presented in the previous table for the quarter-to-date December 31, 2013 Successor ARPU. Combined ARPU for the quarter and year-to-date December 31, 2012 periods are not affected by Successor activity, and, therefore, is consistent with the information presented in the previous table for the quarter and year-to-date Predecessor ARPU.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Millions, except per Share Data)
			Successor																	Predecessor
			QuarterTo Date				QuarterTo Date				87 DaysEnded				YearTo Date					10 DaysEnded				191 DaysEnded				QuarterTo Date				YearTo Date
			12/31/13				9/30/13				12/31/12				12/31/13					7/10/13				7/10/13				12/31/12				12/31/12
Net Operating Revenues			$	9,142			$	7,749			$	–			$	16,891				$	932			$	18,602			$	9,005			$	35,345
Net Operating Expenses
Cost of services				2,704				2,470				–				5,174					286				5,673				2,659				10,936
Cost of products				2,731				1,872				–				4,603					281				4,872				2,993				9,905
Selling, general and administrative				2,546				2,259				33				4,841					289				5,067				2,557				9,765
Depreciation and amortization				1,531				1,403				–				2,934					121				3,245				1,493				6,543
Other, net				206				103				–				309					(5	)			630				8				16
Total net operating expenses				9,718				8,107				33				17,861					972				19,487				9,710				37,165
Operating Loss				(576	)			(358	)			(33	)			(970	)				(40	)			(885	)			(705	)			(1,820	)
Interest expense				(502	)			(416	)			–				(918	)				(275	)			(1,135	)			(432	)			(1,428	)
Equity in earnings (losses) of unconsolidated investments and other, net				55				165				10				73					2,905				2,463				(140	)			(923	)
(Loss) Income before Income Taxes				(1,023	)			(609	)			(23	)			(1,815	)				2,590				443				(1,277	)			(4,171	)
Income tax expense				(15	)			(90	)			(4	)			(45	)				(1,508	)			(1,601	)			(44	)			(154	)
Net (Loss) Income			$	(1,038	)		$	(699	)		$	(27	)		$	(1,860	)			$	1,082			$	(1,158	)		$	(1,321	)		$	(4,325	)
Basic Net (Loss) Income Per Common Share			$	(0.26	)		$	(0.18	)			NM			$	(0.54	)			$	0.35			$	(0.38	)		$	(0.44	)		$	(1.44	)
Diluted Net (Loss) Income Per Common Share			$	(0.26	)		$	(0.18	)			NM			$	(0.54	)			$	0.30			$	(0.38	)		$	(0.44	)		$	(1.44	)
Basic Weighted Average Common Shares outstanding				3,944				3,802				NM				3,475					3,086				3,027				3,007				3,002
Diluted Weighted Average Common Shares outstanding				3,944				3,802				NM				3,475					3,640				3,027				3,007				3,002
Effective Tax Rate				-1.5	%			-14.8	%			-17.4	%			-2.5	%				58.2	%			361.4	%			-3.4	%			-3.7	%
NON-GAAP RECONCILIATION – NET INCOME (LOSS) TO ADJUSTED EBITDA* (Unaudited)
(Millions)
			Successor																	Predecessor
			QuarterTo Date				QuarterTo Date				87 DaysEnded				YearTo Date					10 DaysEnded				191 DaysEnded				QuarterTo Date				YearTo Date
			12/31/13				9/30/13				12/31/12				12/31/13					7/10/13				7/10/13				12/31/12				12/31/12
Net (Loss) Income			$	(1,038	)		$	(699	)		$	(27	)		$	(1,860	)			$	1,082			$	(1,158	)		$	(1,321	)		$	(4,325	)
Income tax expense				15				90				4				45					1,508				1,601				44				154
(Loss) Income before Income Taxes				(1,023	)			(609	)			(23	)			(1,815	)				2,590				443				(1,277	)			(4,171	)
Equity in earnings (losses) of unconsolidated investments and other, net				(55	)			(165	)			(10	)			(73	)				(2,905	)			(2,463	)			140				923
Interest expense				502				416				–				918					275				1,135				432				1,428
Operating Loss				(576	)			(358	)			(33	)			(970	)				(40	)			(885	)			(705	)			(1,820	)
Depreciation and amortization				1,531				1,403				–				2,934					121				3,245				1,493				6,543
EBITDA*				955				1,045				(33	)			1,964					81				2,360				788				4,723
Severance and exit costs (7)				206				103				–				309					(5	)			652				(10	)			196
Gains from asset dispositions and exchanges(8)				–				–				–				–					–				–				–				(29	)
Asset impairments and abandonments(9)				–				–				–				–					–				–				18				36
Spectrum hosting contract termination, net(10)				–				–				–				–					–				–				–				(170	)
Access costs(11)				–				–				–				–					–				–				–				(17	)
Litigation (12)				–				–				–				–					–				(22	)			–				–
Business combinations(13)				–				100				–				100					19				53				19				19
Hurricane Sandy (14)				(7	)			–				–				(7	)				–				–				45				45
Adjusted EBITDA*			$	1,154			$	1,248			$	(33	)		$	2,366				$	95			$	3,043			$	860			$	4,803
Capital expenditures (2)				1,901				1,666				–				3,567					175				3,884				1,923				5,370
Adjusted EBITDA* less Capex			$	(747	)		$	(418	)		$	(33	)		$	(1,201	)			$	(80	)		$	(841	)		$	(1,063	)		$	(567	)
Adjusted EBITDA Margin*				14.5	%			17.5	%			NM				15.7	%				11.1	%			18.0	%			10.7	%			15.0	%
Selected item:
Deferred tax asset valuation allowance			$	381			$	327			$	4			$	708				$	524			$	1,410			$	546			$	1,756

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
				Combined (1) Quarter to Date													Combined (1) Year to Date
					12/31/13				9/30/13				12/31/12					12/31/13				12/31/12
Net Operating Revenues				$	9,142			$	8,681			$	9,005				$	35,493			$	35,345
Net Operating Expenses
Cost of services					2,704				2,756				2,659					10,847				10,936
Cost of products					2,731				2,153				2,993					9,475				9,905
Selling, general and administrative					2,546				2,548				2,590					9,908				9,798
Depreciation and amortization					1,531				1,524				1,493					6,179				6,543
Other, net					206				98				8					939				16
Total net operating expenses					9,718				9,079				9,743					37,348				37,198
Operating Loss					(576	)			(398	)			(738	)				(1,855	)			(1,853	)
Interest expense					(502	)			(691	)			(432	)				(2,053	)			(1,428	)
Equity in earnings (losses) of unconsolidated investments and other, net					55				3,070				(130	)				2,536				(913	)
(Loss) Income before Income Taxes					(1,023	)			1,981				(1,300	)				(1,372	)			(4,194	)
Income tax expense					(15	)			(1,598	)			(48	)				(1,646	)			(158	)
Net (Loss) Income				$	(1,038	)		$	383			$	(1,348	)			$	(3,018	)		$	(4,352	)
NON-GAAP RECONCILIATION – NET LOSS TO ADJUSTED EBITDA* (Unaudited)
(Millions)
				Combined (1) Quarter to Date													Combined (1) Year to Date
					12/31/13				9/30/13				12/31/12					12/31/13				12/31/12
Net (Loss) Income				$	(1,038	)		$	383			$	(1,348	)			$	(3,018	)		$	(4,352	)
Income tax expense					15				1,598				48					1,646				158
(Loss) Income before Income Taxes					(1,023	)			1,981				(1,300	)				(1,372	)			(4,194	)
Equity in earnings (losses) of unconsolidated investments and other, net					(55	)			(3,070	)			130					(2,536	)			913
Interest expense					502				691				432					2,053				1,428
Operating Loss					(576	)			(398	)			(738	)				(1,855	)			(1,853	)
Depreciation and amortization					1,531				1,524				1,493					6,179				6,543
EBITDA*					955				1,126				755					4,324				4,690
Severance and exit costs (7)					206				98				(10	)				961				196
Gains from asset dispositions and exchanges(8)					–				–				–					–				(29	)
Asset impairments and abandonments(9)					–				–				18					–				36
Spectrum hosting contract termination, net(10)					–				–				–					–				(170	)
Access costs(11)					–				–				–					–				(17	)
Litigation (12)					–				–				–					(22	)			–
Business combinations(13)					–				119				19					153				19
Hurricane Sandy (14)					(7	)			–				45					(7	)			45
Adjusted EBITDA*					1,154				1,343				827					5,409				4,770
Capital expenditures (2)					1,901				1,841				1,923					7,451				5,370
Adjusted EBITDA* less Capex				$	(747	)		$	(498	)		$	(1,096	)			$	(2,042	)		$	(600	)
Adjusted EBITDA Margin*					14.5	%			16.8	%			10.3	%				16.9	%			14.9	%
Selected item:
Deferred tax asset valuation allowance				$	381			$	851			$	550				$	2,118			$	1,760

WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
				Successor													Predecessor
				QuarterTo Date				QuarterTo Date				YearTo Date					10 DaysEnded				191 DaysEnded				QuarterTo Date				YearTo Date
					12/31/13				9/30/13				12/31/13					7/10/13				7/10/13				12/31/12				12/31/12
Net Operating Revenues
Service revenue
Sprint platform:
Postpaid (3)				$	5,782			$	5,201			$	10,983				$	634			$	12,242			$	5,674			$	22,247
Prepaid (4)					1,237				1,028				2,265					132				2,602				1,170				4,377
Wholesale, affiliate and other					132				116				248					15				279				135				483
Total Sprint platform					7,151				6,345				13,496					781				15,123				6,979				27,107
Nextel platform:
Postpaid (3)					–				–				–					–				217				218				1,454
Prepaid (4)					–				–				–					–				50				68				525
Total Nextel platform					–				–				–					–				267				286				1,979
Transactions:
Postpaid (3)					81				89				170					2				26				–				–
Prepaid (4)					80				81				161					1				2				–				–
Wholesale					10				8				18					–				–				–				–
Total transactions					171				178				349					3				28				–				–
Equipment revenue					1,161				636				1,797					74				1,707				1,010				3,248
Total net operating revenues					8,483				7,159				15,642					858				17,125				8,275				32,334
Net Operating Expenses
Cost of services					2,248				2,087				4,335					240				4,703				2,210				9,034
Cost of products					2,731				1,872				4,603					281				4,872				2,993				9,905
Selling, general and administrative					2,444				2,100				4,544					256				4,780				2,436				9,290
Depreciation and amortization					1,470				1,338				2,808					110				3,029				1,391				6,128
Other, net					187				93				280					(5	)			627				3				28
Total net operating expenses					9,080				7,490				16,570					882				18,011				9,033				34,385
Operating Loss				$	(597	)		$	(331	)		$	(928	)			$	(24	)		$	(886	)		$	(758	)		$	(2,051	)
Supplemental Revenue Data
Total retail service revenue				$	7,180			$	6,399			$	13,579				$	769			$	15,139			$	7,130			$	28,603
Total service revenue				$	7,322			$	6,523			$	13,845				$	784			$	15,418			$	7,265			$	29,086
WIRELESS NON-GAAP RECONCILIATION (Unaudited)
(Millions)
				Successor													Predecessor
				QuarterTo Date				QuarterTo Date				YearTo Date					10 DaysEnded				191 DaysEnded				QuarterTo Date				YearTo Date
					12/31/13				9/30/13				12/31/13					7/10/13				7/10/13				12/31/12				12/31/12
Operating Loss				$	(597	)		$	(331	)		$	(928	)			$	(24	)		$	(886	)		$	(758	)		$	(2,051	)
Severance and exit costs (7)					187				93				280					(5	)			649				(10	)			196
Gains from asset dispositions and exchanges(8)					–				–				–					–				–				–				(29	)
Asset impairments and abandonments(9)					–				–				–					–				–				13				31
Spectrum hosting contract termination, net(10)					–				–				–					–				–				–				(170	)
Litigation (12)					–				–				–					–				(22	)			–				–
Business combinations(13)					–				25				25					–				–				–				–
Hurricane Sandy (14)					(7	)			–				(7	)				–				–				42				42
Depreciation and amortization					1,470				1,338				2,808					110				3,029				1,391				6,128
Adjusted EBITDA*					1,053				1,125				2,178					81				2,770				678				4,147
Capital expenditures (2)					1,716				1,527				3,243					156				3,590				1,786				4,884
Adjusted EBITDA* less Capex				$	(663	)		$	(402	)		$	(1,065	)			$	(75	)		$	(820	)		$	(1,108	)		$	(737	)
Adjusted EBITDA Margin*					14.4	%			17.2	%			15.7	%				10.3	%			18.0	%			9.3	%			14.2	%

WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
				Combined (1) Quarter to Date													Combined (1) Year to Date
					12/31/13				9/30/13				12/31/12					12/31/13				12/31/12
Net Operating Revenues
Service revenue
Sprint platform:
Postpaid (3)				$	5,782			$	5,835			$	5,674				$	23,225			$	22,247
Prepaid (4)					1,237				1,160				1,170					4,867				4,377
Wholesale, affiliate and other					132				131				135					527				483
Total Sprint platform					7,151				7,126				6,979					28,619				27,107
Nextel platform:
Postpaid (3)					–				–				218					217				1,454
Prepaid (4)					–				–				68					50				525
Total Nextel platform					–				–				286					267				1,979
Transactions:
Postpaid (3)					81				91				–					196				–
Prepaid (4)					80				82				–					163				–
Wholesale					10				8				–					18				–
Total transactions					171				181				–					377				–
Equipment revenue					1,161				710				1,010					3,504				3,248
Total net operating revenues					8,483				8,017				8,275					32,767				32,334
Net Operating Expenses
Cost of services					2,248				2,327				2,210					9,038				9,034
Cost of products					2,731				2,153				2,993					9,475				9,905
Selling, general and administrative					2,444				2,356				2,436					9,324				9,290
Depreciation and amortization					1,470				1,448				1,391					5,837				6,128
Other, net					187				88				3					907				28
Total net operating expenses					9,080				8,372				9,033					34,581				34,385
Operating Loss				$	(597	)		$	(355	)		$	(758	)			$	(1,814	)		$	(2,051	)
Supplemental Revenue Data
Total retail service revenue				$	7,180			$	7,168			$	7,130				$	28,718			$	28,603
Total service revenue				$	7,322			$	7,307			$	7,265				$	29,263			$	29,086
WIRELESS NON-GAAP RECONCILIATION (Unaudited)
(Millions)
				Combined (1) Quarter to Date													Combined (1) Year to Date
					12/31/13				9/30/13				12/31/12					12/31/13				12/31/12
Operating Loss				$	(597	)		$	(355	)		$	(758	)			$	(1,814	)		$	(2,051	)
Severance and exit costs (7)					187				88				(10	)				929				196
Gains from asset dispositions and exchanges (8)					–				–				–					–				(29	)
Asset impairments and abandonments (9)					–				–				13					–				31
Spectrum hosting contract termination, net(10)					–				–				–					–				(170	)
Litigation (12)					–				–				–					(22	)			–
Business combinations (13)					–				25				–					25				–
Hurricane Sandy(14)					(7	)			–				42					(7	)			42
Depreciation and amortization					1,470				1,448				1,391					5,837				6,128
Adjusted EBITDA*					1,053				1,206				678					4,948				4,147
Capital expenditures (2)					1,716				1,683				1,786					6,833				4,884
Adjusted EBITDA* less Capex				$	(663	)		$	(477	)		$	(1,108	)			$	(1,885	)		$	(737	)
Adjusted EBITDA Margin*					14.4	%			16.5	%			9.3	%				16.9	%			14.2	%

WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
				Successor													Predecessor
				QuarterTo Date				QuarterTo Date				YearTo Date					10 DaysEnded				191 DaysEnded				QuarterTo Date				YearTo Date
					12/31/13				9/30/13				12/31/13					7/10/13				7/10/13				12/31/12				12/31/12
Net Operating Revenues
Voice				$	386			$	333			$	719				$	42			$	771			$	385			$	1,627
Data					81				57				138					7				188				96				398
Internet					374				373				747					47				913				451				1,781
Other					18				14				32					2				29				17				75
Total net operating revenues					859				777				1,636					98				1,901				949				3,881
Net Operating Expenses
Costs of services and products					659				576				1,235					72				1,402				671				2,784
Selling, general and administrative					95				84				179					11				227				100				451
Depreciation and amortization					62				61				123					10				213				102				412
Other, net					20				10				30					–				3				5				(12	)
Total net operating expenses					836				731				1,567					93				1,845				878				3,635
Operating Income				$	23			$	46			$	69				$	5			$	56			$	71			$	246
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
(Millions)
				Successor													Predecessor
				QuarterTo Date				QuarterTo Date				YearTo Date					10 DaysEnded				191 DaysEnded				QuarterTo Date				YearTo Date
					12/31/13				9/30/13				12/31/13					7/10/13				7/10/13				12/31/12				12/31/12
Operating Income				$	23			$	46			$	69				$	5			$	56			$	71			$	246
Severance and exit costs (7)					20				10				30					–				3				–				–
Asset impairments and abandonments(8)					–				–				–					–				–				5				5
Access costs(11)					–				–				–					–				–				–				(17	)
Hurricane Sandy (14)					–				–				–					–				–				3				3
Depreciation and amortization					62				61				123					10				213				102				412
Adjusted EBITDA*					105				117				222					15				272				181				649
Capital expenditures(2)					82				73				155					11				165				58				242
Adjusted EBITDA* less Capex				$	23			$	44			$	67				$	4			$	107			$	123			$	407
Adjusted EBITDA Margin*					12.2	%			15.1	%			13.6	%				15.3	%			14.3	%			19.1	%			16.7	%

WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
				Combined (1) Quarter to Date													Combined (1) Year to Date
					12/31/13				9/30/13				12/31/12					12/31/13				12/31/12
Net Operating Revenues
Voice				$	386			$	375			$	385				$	1,490			$	1,627
Data					81				64				96					326				398
Internet					374				420				451					1,660				1,781
Other					18				16				17					61				75
Total net operating revenues					859				875				949					3,537				3,881
Net Operating Expenses
Costs of services and products					659				648				671					2,637				2,784
Selling, general and administrative					95				95				100					406				451
Depreciation and amortization					62				71				102					336				412
Other, net					20				10				5					33				(12	)
Total net operating expenses					836				824				878					3,412				3,635
Operating Income				$	23			$	51			$	71				$	125			$	246
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
(Millions)
				Combined (1) Quarter to Date													Combined (1) Year to Date
					12/31/13				9/30/13				12/31/12					12/31/13				12/31/12
Operating Income				$	23			$	51			$	71				$	125			$	246
Severance and exit costs (7)					20				10				–					33				–
Asset impairments and abandonments(8)					–				–				5					–				5
Access costs(11)					–				–				–					–				(17	)
Hurricane Sandy (14)					–				–				3					–				3
Depreciation and amortization					62				71				102					336				412
Adjusted EBITDA*					105				132				181					494				649
Capital expenditures(2)					82				84				58					320				242
Adjusted EBITDA* less Capex				$	23			$	48			$	123				$	174			$	407
Adjusted EBITDA Margin*					12.2	%			15.1	%			19.1	%				14.0	%			16.7	%

CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
(Millions)																		Successor								Predecessor
																		Year												Year
																		To				87 Days				191 Days				To
																		Date				Ended				Ended				Date
																			12/31/13				12/31/12				7/10/13				12/31/12
Operating Activities
Net loss																		$	(1,860	)		$	(27	)		$	(1,158	)		$	(4,325	)
Depreciation and amortization																			2,934				–				3,245				6,543
Provision for losses on accounts receivable																			261				–				194				561
Share-based and long-term incentive compensation expense																			98				–				37				82
Deferred income taxes																			32				1				1,586				209
Gain on previously-held equity interests																			–				–				(2,926	)			–
Equity in losses of unconsolidated investments, net																			–				–				482				1,114
Interest expense related to beneficial conversion feature on convertible bond																			–				–				247				–
Contribution to pension plan																			(7	)			–				–				(108	)
Spectrum hosting contract termination, net (10)																			–				–				–				(170	)
Call premiums on debt redemptions																			(180	)			–				–				–
Amortization and accretion of long-term debt premiums and discounts																			(160	)			–				9				4
Other working capital changes, net																			(924	)			(3	)			728				(802	)
Other, net																			(255	)			29				227				(109	)
Net cash (used in) provided by operating activities																			(61	)			–				2,671				2,999
Investing Activities
Capital expenditures (2)																			(3,847	)			–				(3,140	)			(4,261	)
Expenditures relating to FCC licenses																			(146	)			–				(125	)			(198	)
Change in short-term investments, net																			(4	)			–				1,224				(1,699	)
Acquisitions, net of cash acquired																			(14,112	)			–				(4,039	)			–
Investment and derivative in Sprint Communications, Inc.																			–				(3,100	)			–				–
Investment in Clearwire (including debt securities)																			–				–				(308	)			(228	)
Other, net																			1				–				3				11
Net cash used in investing activities																			(18,108	)			(3,100	)			(6,385	)			(6,375	)
Financing Activities
Proceeds from debt and financings																			9,500				–				204				9,176
Debt financing costs																			(147	)			–				(11	)			(134	)
Repayments of debt and capital lease obligations																			(3,378	)			–				(362	)			(4,791	)
Proceeds from issuance of common stock and warrants, net																			18,567				3,105				60				29
Other, net																			(14	)			–				–				–
Net cash provided by (used in) financing activities																			24,528				3,105				(109	)			4,280
Net Increase (Decrease) in Cash and Cash Equivalents																			6,359				5				(3,823	)			904
Cash and Cash Equivalents, beginning of period																			5				–				6,351				5,447
Cash and Cash Equivalents, end of period																		$	6,364			$	5			$	2,528			$	6,351
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)
(Millions)		Successor																Predecessor
		Quarter				Quarter				Year																Quarter				Year
		To				To				To				87 Days				10 Days				191 Days				To				To
		Date				Date				Date				Ended				Ended				Ended				Date				Date
		12/31/13				9/30/13				12/31/13				12/31/12				7/10/13				7/10/13				12/31/12				12/31/12
Net Cash (Used in) Provided by Operating Activities		$	(761	)		$	694			$	(61	)		$	–			$	496			$	2,671			$	216			$	2,999
Capital expenditures (2)			(1,969	)			(1,878	)			(3,847	)			–				(188	)			(3,140	)			(1,477	)			(4,261	)
Expenditures relating to FCC licenses, net			(115	)			(31	)			(146	)			–				(2	)			(125	)			(46	)			(198	)
Other investing activities, net			1				–				1				–				–				3				(2	)			11
Free Cash Flow*			(2,844	)			(1,215	)			(4,053	)			–				306				(591	)			(1,309	)			(1,449	)
Debt financing costs			(40	)			(107	)			(147	)			–				–				(11	)			(44	)			(134	)
(Decrease) increase in debt and other, net			(207	)			6,329				6,122				–				–				(158	)			3,316				4,385
Acquisitions, net of cash acquired			–				(14,112	)			(14,112	)			–				(3,530	)			(4,039	)			–				–
Proceeds from issuance of common stock and warrants, net			15				18,552				18,567				3,105				9				60				8				29
Increase in restricted cash			3,050				(3,050	)			–				–				–				–				–				–
Investment in Clearwire (including debt securities)			–				–				–				–				(68	)			(308	)			(100	)			(228	)
Investment and derivative in Sprint Communications, Inc.			–				–				–				(3,100	)			–				–				–				–
Other financing activities, net			1				(14	)			(14	)			–				–				–				–				–
Net (Decrease) Increase in Cash, Cash Equivalents and Short-Term Investments		$	(25	)		$	6,383			$	6,363			$	5			$	(3,283	)		$	(5,047	)		$	1,871			$	2,603

CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
(Millions)
														Combined (1) Year to Date
														12/31/13				12/31/12
Operating Activities
Net loss														$	(3,018	)		$	(4,352	)
Depreciation and amortization															6,179				6,543
Provision for losses on accounts receivable															455				561
Share-based and long-term incentive compensation expense															135				82
Deferred income taxes															1,618				210
Gain on previously-held equity interests															(2,926	)			–
Equity in losses of unconsolidated investments, net															482				1,114
Interest expense related to beneficial conversion feature on convertible bond															247				–
Contribution to pension plan															(7	)			(108	)
Spectrum hosting contract termination, net (10)															–				(170	)
Call premiums on debt redemptions															(180	)			–
Amortization and accretion of long-term debt premiums and discounts															(151	)			4
Other working capital changes, net															(196	)			(805	)
Other, net															(28	)			(80	)
Net cash provided by operating activities															2,610				2,999
Investing Activities
Capital expenditures (2)															(6,987	)			(4,261	)
Expenditures relating to FCC licenses															(271	)			(198	)
Change in short-term investments, net															1,220				(1,699	)
Acquisitions, net of cash acquired															(18,151	)			–
Investment and derivative in Sprint Communications, Inc.															–				(3,100	)
Investment in Clearwire (including debt securities)															(308	)			(228	)
Other, net															4				11
Net cash used in investing activities															(24,493	)			(9,475	)
Financing Activities
Proceeds from debt and financings															9,704				9,176
Debt financing costs															(158	)			(134	)
Repayments of debt and capital lease obligations															(3,740	)			(4,791	)
Proceeds from issuance of common stock and warrants, net															18,627				3,134
Other, net															(14	)			–
Net cash provided by financing activities															24,419				7,385
Net Increase in Cash and Cash Equivalents															2,536				909
Cash and Cash Equivalents, beginning of period															3,828				5,447
Cash and Cash Equivalents, end of period														$	6,364			$	6,356
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)
(Millions)
		Combined (1) Quarter to Date												Combined (1) Year to Date
		12/31/13				9/30/13				12/31/12				12/31/13				12/31/12
Net Cash (Used in) Provided by Operating Activities		$	(761	)		$	1,190			$	216			$	2,610			$	2,999
Capital expenditures (2)			(1,969	)			(2,066	)			(1,477	)			(6,987	)			(4,261	)
Expenditures relating to FCC licenses, net			(115	)			(33	)			(46	)			(271	)			(198	)
Other investing activities, net			1				–				(2	)			4				11
Free Cash Flow*			(2,844	)			(909	)			(1,309	)			(4,644	)			(1,449	)
															–				–
Debt financing costs			(40	)			(107	)			(44	)			(158	)			(134	)
(Decrease) increase in debt and other, net			(207	)			6,329				3,316				5,964				4,385
Acquisitions, net of cash acquired			–				(17,642	)			–				(18,151	)			–
Proceeds from issuance of common stock and warrants, net			15				18,561				3,113				18,627				3,134
Increase in restricted cash			3,050				(3,050	)			–				–				–
Investment in Clearwire (including debt securities)			–				(68	)			(100	)			–				(228	)
Investment and derivative in Sprint Communications, Inc.			–				–				(3,100	)			(308	)			(3,100	)
Other financing activities, net			1				(14	)			–				(14	)			–
Net (Decrease) Increase in Cash, Cash Equivalents and Short-Term Investments		$	(25	)		$	3,100			$	1,876			$	1,316			$	2,608

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Millions)
		Successor								Predecessor
		12/31/13				12/31/12				12/31/12
Assets
Current assets
Cash and cash equivalents		$	6,364			$	5			$	6,351
Short-term investments			1,105				–				1,849
Accounts and notes receivable, net			3,570				6				3,658
Device and accessory inventory			1,205				–				1,200
Deferred tax assets			186				–				1
Prepaid expenses and other current assets			628				–				700
Total current assets			13,058				11				13,759
Investments and other assets			601				3,104				1,833
Property, plant and equipment, net			16,164				–				13,607
Goodwill			6,434				–				359
FCC licenses and other			41,824				–				20,677
Definite-lived intangible assets, net			8,014				–				1,335
Total		$	86,095			$	3,115			$	51,570
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable		$	3,312			$	–			$	3,487
Accrued expenses and other current liabilities			6,363				4				5,008
Current portion of long-term debt, financing and capital lease obligations			994				–				379
Total current liabilities			10,669				4				8,874
Long-term debt, financing and capital lease obligations			32,017				–				23,962
Deferred tax liabilities			14,227				1				7,047
Other liabilities			3,598				–				4,600
Total liabilities			60,511				5				44,483
Shareholders’ equity
Common shares			39				–				6,019
Paid-in capital			27,330				3,137				47,016
Accumulated deficit			(1,887	)			(27	)			(44,815	)
Accumulated other comprehensive loss			102				–				(1,133	)
Total shareholders’ equity			25,584				3,110				7,087
Total		$	86,095			$	3,115			$	51,570
NET DEBT* (NON-GAAP) (Unaudited)
(Millions)
		Successor								Predecessor
		12/31/13				12/31/12				12/31/12
Total Debt		$	33,011			$	–			$	24,341
Less: Cash and cash equivalents			(6,364	)			–				(6,351	)
Less: Short-term investments			(1,105	)			–				(1,849	)
Net Debt*		$	25,542			$	–			$	16,141

SCHEDULE OF DEBT (Unaudited)
(Millions)
						12/31/13
ISSUER		COUPON		MATURITY		PRINCIPAL
Sprint Corporation
7.25% Notes due 2021		7.250%		09/15/2021		$ 2,250
7.875% Notes due 2023		7.875%		09/15/2023		4,250
7.125% Notes due 2024		7.125%		06/15/2024		2,500
Sprint Corporation						9,000
Sprint Communications, Inc.
Export Development Canada Facility (Tranche 2)		3.618%		12/15/2015		500
6% Senior Notes due 2016		6.000%		12/01/2016		2,000
9.125% Senior Notes due 2017		9.125%		03/01/2017		1,000
8.375% Senior Notes due 2017		8.375%		08/15/2017		1,300
9% Guaranteed Notes due 2018		9.000%		11/15/2018		3,000
7% Guaranteed Notes due 2020		7.000%		03/01/2020		1,000
7% Senior Notes due 2020		7.000%		08/15/2020		1,500
11.5% Senior Notes due 2021		11.500%		11/15/2021		1,000
9.25% Debentures due 2022		9.250%		04/15/2022		200
6% Senior Notes due 2022		6.000%		11/15/2022		2,280
Sprint Communications, Inc.						13,780
Sprint Capital Corporation
6.9% Senior Notes due 2019		6.900%		05/01/2019		1,729
6.875% Senior Notes due 2028		6.875%		11/15/2028		2,475
8.75% Senior Notes due 2032		8.750%		03/15/2032		2,000
Sprint Capital Corporation						6,204
Clearwire Communications LLC
14.75% First-Priority Senior Secured Notes due 2016		14.750%		12/01/2016		300
8.25% Exchangeable Notes due 2040		8.250%		12/01/2040		629
Clearwire Communications LLC						929
iPCS Inc.
Second Lien Senior Secured Floating Rate Notes due 2014		3.492%		05/01/2014		181
iPCS Inc.						181
EKN Secured Equipment Facility ($1 Billion)		2.030%		03/30/2017		889
Vendor financing notes – Clearwire Communications LLC				2015		20
Tower financing obligation		6.092%		09/30/2021		339
Capital lease obligations and other				2014 – 2022		187
TOTAL PRINCIPAL						31,529
Net premiums						1,482
TOTAL DEBT						$ 33,011

Supplemental information:

The Company had $2.1 billion of borrowing capacity available under our unsecured revolving bank credit facility as of December 31, 2013. Our unsecured revolving bank credit facility expires in February 2018.

In May 2012, certain of our subsidiaries entered into a $1.0 billion secured equipment credit facility to finance equipment-related purchases for Network Vision. The facility is equally divided into two consecutive tranches of $500 million, with the drawdown availability contingent upon Sprint’s acquisition of equipment-related purchases from Ericsson, up to the maximum of each tranche, ending on May 31, 2013 and May 31, 2014, for the first and second tranche, respectively. Interest and principal are payable semi-annually with a final maturity of March 2017 for both tranches.

NOTES TO THE FINANCIAL INFORMATION (Unaudited)

(1) Except for the quarter-to-date December 31, 2013 period, financial results for 2013 and 2012 include a Predecessor period from January 1, 2012, through the closing of the SoftBank transaction on July 10, 2013, and a Successor period from October 5, 2012 through December 31, 2013. In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined the current year results of operations for the Predecessor and Successor periods. For purposes of presenting the comparative financial information in the tables, we have labeled the quarter-to-date December 31, 2013 period as Combined, however, these results are not combined but rather represent the consolidated results of operations in accordance with accounting principles generally accepted in the United States (GAAP).

(2) Capital expenditures is an accrual based amount that includes the changes in unpaid capital expenditures and excludes capitalized interest. Cash paid for capital expenditures includes total capitalized interest of $1 million, $13 million and $29 million for the predecessor third and second quarters and year-to-date periods of 2013, respectively, $16 million, $14 million and $30 million for the successor fourth and third quarters and year-to-date periods of 2013, respectively, and $52 million, $102 million, and $269 million for the third and second quarters and year-to-date periods of 2012, respectively, and can be found in the Condensed Consolidated Cash Flow Information and the Reconciliation to Free Cash Flow*.

(3) Postpaid subscribers on the Sprint platform are defined as retail subscribers on the CDMA network, including subscribers utilizing WiMax and LTE technology. Postpaid subscribers previously on the Nextel platform are defined as retail postpaid subscribers on the iDEN network through June 30, 2013. Postpaid subscribers from transactions are defined as retail postpaid subscribers acquired from U.S. Cellular in May 2013 and Clearwire in July 2013 who had not deactivated or been recaptured on the Sprint platform. Included in net additions for the Sprint platform are tablets and connected devices, which generally generate a significantly lower ARPU than other postpaid subscribers. During the fourth quarter 2013, net additions for the Sprint platform included approximately 466,000 tablets.

(4) Prepaid subscribers on the Sprint platform are defined as retail prepaid subscribers and session-based tablet users who utilize the CDMA network and WiMax and LTE technology via our multi-brand offerings. Prepaid subscribers previously on the Nextel platform are defined as retail prepaid subscribers who utilized iDEN technology through June 30, 2013. Prepaid subscribers from transactions are defined as retail prepaid subscribers acquired from U.S. Cellular in May 2013 and Clearwire in July 2013 who had not deactivated or been recaptured on the Sprint platform.

(5) Nextel Subscriber Recaptures are defined as the number of subscribers that deactivated service from the postpaid or prepaid Nextel platform, as applicable, during each period but remained with the Company as subscribers on the postpaid or prepaid Sprint platform, respectively. Subscribers that deactivated service from the Nextel platform and activated service on the Sprint platform are included in the Sprint platform net additions for the applicable period.

(6) The Postpaid and Prepaid Nextel Recapture Rates are defined as the portion of total subscribers that left the postpaid or prepaid Nextel platform, as applicable, during the period and were retained on the postpaid or prepaid Sprint platform, respectively.

(7) Severance and lease exit costs are primarily associated with workforce reductions and with exit costs associated with the Nextel platform and acquisition of Clearwire.

(8) For the first quarter of 2012, gains from asset dispositions and exchanges are primarily due to spectrum exchange transactions.

(9) For the first quarter of 2012, asset impairment and abandonment activity includes $18 million related to a change in our backhaul architecture in connection to our Network Vision design from microwave to a more cost effective fiber backhaul.

(10) On March 16, 2012, we elected to terminate the arrangement with LightSquared LP and LightSquared, Inc. (LightSquared). As we have no future service obligations with respect to the arrangement with LightSquared, we recognized $236 million of the advanced payments as other operating income in the first quarter of 2012. As a result of the termination of the hosting agreement, we impaired capitalized costs specific to LightSquared’s 1.6 GHz spectrum that the company no longer intends to deploy which totaled $66 million.

(11) Favorable developments during the first quarter of 2012 relating to disagreements with local exchange carriers resulted in a reduction in expected access costs of $17 million.

(12) For the first quarter of 2013, litigation activity is primarily a result of favorable developments in connection with a tax (non-income) related contingency.

(13) For the third and second quarters of 2013, included in selling, general and administrative expenses are fees paid to unrelated parties for the transaction with SoftBank and our acquisition of Clearwire.

(14) Hurricane Sandy amounts for the fourth quarter and year-to-date periods of 2013 represent insurance recoveries. Hurricane Sandy charges for the fourth quarter of 2012, represent estimated hurricane-related charges of $45 million, consisting of customer credits, incremental roaming costs, network repairs and replacements.

*FINANCIAL MEASURES

On July 9, 2013, Sprint Communications, Inc. (formerly Sprint Nextel Corporation) completed its acquisition of Clearwire. On July 10, 2013 we consummated the SoftBank Merger with Starburst II, which immediately changed its name to Sprint Corporation (now referred to as the Company or Sprint). As a result of these transactions, the assets and liabilities of Sprint Communications, Inc. and Clearwire were adjusted to fair value on the respective closing dates. The Company’s financial statement presentations herein distinguish between a predecessor period relating to Sprint Communications, Inc. for periods prior to the SoftBank Merger (Predecessor) and a successor period (Successor). The Successor information includes the activity and accounts of Sprint Corporation as of and for the three and twelve month periods ended December 31, 2013 and as of and for the 87 days ended December 31, 2012, which includes the activity and accounts of Sprint Communications, Inc., prospectively, beginning on July 11, 2013. The Predecessor information contained herein represents the historical basis of presentation for Sprint Communications, Inc. for all periods prior to the SoftBank Merger date on July 10, 2013. As a result of the valuation of assets acquired and liabilities assumed at fair value at the time of the SoftBank Merger and Clearwire Acquisition, the financial statements for the successor period are presented on a measurement basis different than the predecessor period, which was Sprint Communication’s historical cost, and are, therefore, not comparable.

In order to present financial results in a way that offers investors a more meaningful calendar period-to-period comparison, we have combined the current and prior year results of operations for the predecessor with successor results of operations on an unaudited combined basis. The combined information for the period October 5, 2012 (date of Starburst II incorporation) through December 31, 2013 does not purport to represent what our consolidated results of operations would have been if the acquisition had occurred as of the beginning of the first period presented. For purposes of presenting the comparative financial information in the tables, we have labeled the quarter-to-date December 31, 2013 results as combined, however, these results are not combined but rather represent the consolidated results of operations in accordance with accounting principles generally accepted in the United States (GAAP).

Sprint provides financial measures determined in accordance with GAAP and adjusted GAAP (non-GAAP). The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. These measurements should be considered in addition to, but not as a substitute for, financial information prepared in accordance with GAAP. Other than the use of non-GAAP combined results as described above, we have defined below each of the non-GAAP measures we use, but these measures may not be synonymous to similar measurement terms used by other companies.

Sprint provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint does not predict special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, Sprint does not provide reconciliations to GAAP of its forward-looking financial measures.

The measures used in this release include the following:

EBITDA is operating income/(loss) before depreciation and amortization. Adjusted EBITDA isEBITDA excluding severance, exit costs, and other special items. Adjusted EBITDA Marginrepresents Adjusted EBITDA divided by non-equipment net operating revenues for Wireless and Adjusted EBITDA divided by net operating revenues for Wireline. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, spectrum acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent non-cash current period costs associated with the use of long-lived tangible and definite-lived intangible assets. Adjusted EBITDA and Adjusted EBITDA Margin are calculations commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry.

Free Cash Flow is the cash provided by operating activities less the cash used in investing activities other than short-term investments, including changes in restricted cash, and amounts included as investments in Clearwire and Sprint Communications, Inc. during the period. We believe that Free Cash Flow provides useful information to investors, analysts and our management about the cash generated by our core operations after interest and dividends, if any, and our ability to fund scheduled debt maturities and other financing activities, including discretionary refinancing and retirement of debt and purchase or sale of investments.

Net Debt is consolidated debt, including current maturities, less cash and cash equivalents, short-term investments and if any, restricted cash. We believe that Net Debt provides useful information to investors, analysts and credit rating agencies about the capacity of the company to reduce the debt load and improve its capital structure.

SAFE HARBOR

This release includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan,” “providing guidance,” and similar expressions are intended to identify information that is not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to our network, subscriber growth, and liquidity, and statements expressing general views about future operating results — are forward-looking statements. Forward-looking statements are estimates and projections reflecting management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, the ability to operationalize the anticipated benefits from the SoftBank, Clearwire and U.S. Cellular transactions, the development and deployment of new technologies; efficiencies and cost savings of new technologies and services; customer and network usage; customer growth and retention; service, speed, coverage and quality; availability of devices; the timing of various events and the economic environment. Sprint believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date when made. Sprint undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our company’s historical experience and our present expectations or projections. Factors that might cause such differences include, but are not limited to, those discussed in Sprint Nextel’s Annual Report on Form 10-K for the year ended December 31, 2012, our Quarterly Report on Form 10-Q for the second quarter of 2013, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, and when filed our Annual Report on Form 10-K for the year ended December 31, 2013. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

About Sprint

Sprint (NYSE: S) offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint served more than 55 million customers at the end of 2013 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The American Customer Satisfaction Index rated Sprint as the most improved company in customer satisfaction, across all 47 industries, during the last five years. Sprint has been named to the Dow Jones Sustainability Index (DSJI) North America in 2011, 2012 and 2013. You can learn more and visit Sprint at www.sprint.com orwww.facebook.com/sprint and www.twitter.com/sprint.

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i Sprint Spark actual deployment plans and speeds will be determined over time based on many factors, including build economics and the availability of equipment, devices and applications.