SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF SPRINT
Sprint’s selected financial data presented below distinguishes between the predecessor period (which we indicate in the table below by the heading “Predecessor”) relating to Sprint Communications (formerly known as Sprint Nextel Corporation) for periods prior to the SoftBank-Sprint merger and the successor period (which we indicate in the table below by the heading “Successor”) relating to Sprint (formerly known as Starburst II) for periods subsequent to the incorporation of Starburst II on October 5, 2012. The Successor financial information represents the activity and accounts of Sprint, which includes the activity and accounts of Starburst II prior to the close of the SoftBank-Sprint merger on July 10, 2013 and Sprint Communications, inclusive of the consolidation of Clearwire Corporation, prospectively following completion of the SoftBank-Sprint merger, beginning on July 11, 2013. The accounts and operating activity of Starburst II prior to the close of the SoftBank-Sprint merger primarily related to merger expenses that were incurred in connection with the SoftBank-Sprint merger (recognized in selling, general and administrative expense) and interest related to the $3.1 billion convertible bond Sprint Communications issued to Starburst II. The Predecessor financial information represents the historical basis of presentation for Sprint Communications for all periods prior to the SoftBank-Sprint merger.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (which we refer to as the “Tax Act”). The Tax Act included changes in tax laws that had a material impact on the financial statements of Sprint. Based on currently available information, Sprint recorded, as a provisional estimate, a $7.1 billion non-cash tax benefit through income for continuing operations to re-measure the carrying values of its deferred tax assets and liabilities. The re-measurement of deferred taxes had no impact on cash flows. See Note 10. Income Taxes in Notes to the Consolidated Financial Statements in Sprint’s Annual Report on Form 10-K for the year ended March 31, 2018, which is incorporated by reference into this joint consent solicitation statement/prospectus, for additional information.
On January 1, 2018, Sprint adopted authoritative guidance regarding Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. Sprint adopted this standard with retrospective application to the consolidated statements of cash flows including the impacted cash flow data in the table below. See Note 2. Summary of Significant Accounting Policies and Other Information in Notes to the Consolidated Financial Statements in Sprint’s Annual Report on Form 10-K for the year ended March 31, 2018, which is incorporated by reference into this joint consent solicitation statement/prospectus, for additional information related to the adoption of this standard.
The selected financial data presented below is not comparable for all periods presented primarily as a result of transactions such as the SoftBank-Sprint merger and acquisitions of Clearwire Corporation and certain assets of United States Cellular Corporation in 2013. All acquired companies’ results of operations subsequent to their acquisition dates are included in Sprint’s consolidated financial statements.
| Successor | Predecessor | |||||||||||||||||||||||||||||||||||
| Year Ended March 31, | Three Months Ended March 31, |
Year Ended December 31, |
191 Days Ended July 10, |
Three Months Ended March 31, |
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| 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||||||||||||||
| (in millions, except per share amounts) | ||||||||||||||||||||||||||||||||||||
| Results of Operations |
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| Service revenue |
$ | 23,834 | $ | 25,368 | $ | 27,174 | $ | 29,542 | $ | 7,876 | $ | — | $ | 15,094 | $ | 16,895 | $ | 7,980 | ||||||||||||||||||
| Equipment sales |
4,524 | 4,684 | 3,168 | 4,826 | 999 | — | 1,797 | 1,707 | 813 | |||||||||||||||||||||||||||
| Equipment rentals |
4,048 | 3,295 | 1,838 | 164 | — | — | — | — | — | |||||||||||||||||||||||||||
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| Net operating revenues |
32,406 | 33,347 | 32,180 | 34,532 | 8,875 | — | 16,891 | 18,602 | 8,793 | |||||||||||||||||||||||||||
| Depreciation—network and other |
3,976 | 3,982 | 4,013 | 3,591 | 868 | — | 2,026 | 3,098 | 1,422 | |||||||||||||||||||||||||||
| Depreciation— equipment rentals |
3,792 | 3,116 | 1,781 | 206 | — | — | — | — | — | |||||||||||||||||||||||||||
| Amortization |
812 | 1,052 | 1,294 | 1,552 | 429 | — | 908 | 147 | 70 | |||||||||||||||||||||||||||
| Operating income (loss) |
2,727 | 1,764 | 310 | (1,895 | ) | 420 | (14 | ) | (970 | ) | (885 | ) | 29 | |||||||||||||||||||||||
| Net income (loss) |
7,377 | (1,206 | ) | (1,995 | ) | (3,345 | ) | (151 | ) | (9 | ) | (1,860 | ) | (1,158 | ) | (643 | ) | |||||||||||||||||||
| Net income (loss) attributable to Sprint Corporation |
7,389 | (1,206 | ) | (1,995 | ) | (3,345 | ) | (151 | ) | (9 | ) | (1,860 | ) | (1,158 | ) | (643 | ) | |||||||||||||||||||
| Earnings (Loss) per Share |
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| Basic net income (loss) per common share |
$ | 1.85 | $ | (0.30 | ) | $ | (0.50 | ) | $ | (0.85 | ) | $ | (0.04 | ) | $ | (0.54 | ) | $ | (0.38 | ) | $ | (0.21 | ) | |||||||||||||
| Diluted net income (loss) per common share |
1.81 | (0.30 | ) | (0.50 | ) | (0.85 | ) | (0.04 | ) | (0.54 | ) | (0.38 | ) | (0.21 | ) | |||||||||||||||||||||
| Financial Position |
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| Total assets |
$ | 85,459 | $ | 85,123 | $ | 78,975 | $ | 82,841 | $ | 84,549 | $ | 3,122 | $ | 85,953 | N/A | $ | 50,474 | |||||||||||||||||||
| Property, plant and equipment, net |
19,925 | 19,209 | 20,297 | 19,721 | 16,299 | — | 16,164 | N/A | 14,025 | |||||||||||||||||||||||||||
| Intangible assets, net |
50,360 | 50,484 | 51,117 | 52,455 | 55,919 | — | 56,272 | N/A | 22,352 | |||||||||||||||||||||||||||
| Total debt, capital lease and financing obligations (including equity unit notes) |
40,892 | 40,914 | 33,958 | 33,642 | 32,638 | — | 32,869 | N/A | 24,217 | |||||||||||||||||||||||||||
| Total stockholders’ equity |
26,356 | 18,808 | $ | 19,783 | 21,710 | 25,312 | 3,122 | 25,584 | N/A | 6,474 | ||||||||||||||||||||||||||
| Noncontrolling interests |
63 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Cash Flow Data |
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| Net cash provided by (used in) operating activities |
$ | 10,062 | $ | (3,290 | ) | $ | (423 | ) | $ | 3,749 | $ | 522 | $ | (2 | ) | $ | 119 | $ | 2,669 | $ | 939 | |||||||||||||||
| Capital expenditures—network and other |
3,319 | 1,950 | 4,680 | 5,422 | 1,488 | — | 3,847 | 3,140 | 1,381 | |||||||||||||||||||||||||||
| Capital expenditures—leased devices |
7,461 | 4,976 | 5,898 | 1,885 | — | — | — | — | — | |||||||||||||||||||||||||||
