Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SPRINT Corp | sprintq4fy168-kearningsrel.htm |
| EX-99.2 - PRINT VERSION OF QUARTERLY INVESTOR UPDATE - SPRINT Corp | fiscal4q16sprintquarterlyinv.pdf |
| EX-99.1 - PRESS RELEASE ANNOUNCING FOURTH QUARTER AND YEAR ENDED MARCH 31, 2017 RESULTS - SPRINT Corp | sprintq4fy16earningsrelease.htm |
“Sprint took a big step forward in the second year of our turnaround
plan. Net operating revenues returned to growth and cost
reductions accelerated, leading to the highest operating income in
a decade and a return to positive adjusted free cash flow*.”
447 377
740
577
187
58.8
59.4
60.2
59.5 59.7
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Net Additions (in Thousands) End of Period (In Millions)
The company had 187,000 net additions^ in the current quarter compared with 447,000 in the
year-ago period and 577,000 in the prior quarter.
Sprint ended the quarter with 59.7 million connections, including 31.6 million postpaid, 12.0
million prepaid, and 16.1 million wholesale and affiliate connections.
The company has had nearly 1.9 million net additions^ over the last four quarters.
56
180
344
405
(118)
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Postpaid Net Adds (Losses)^
In Thousands
Postpaid net losses^ were
118,000 during the quarter
compared to net additions of
56,000 in the year-ago period
and net additions of 405,000 in
the prior quarter. Both the year-
over-year and sequential
declines were impacted by
higher tablet net losses, while the
sequential decrease was also
driven by seasonally lower phone
gross additions.
1.56%
1.39% 1.37%
1.57% 1.58%
1.72%
1.56% 1.52%
1.67%
1.75%
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Postpaid Phone Churn Postpaid Total Churn
Postpaid Total Churn and Postpaid Phone Churn^
Postpaid phone churn^ of 1.58 percent
compared to 1.56 percent in the year-ago
period and 1.57 percent in the prior quarter.
Both year-over-year and sequentially, churn
was relatively flat.
Postpaid churn^ of 1.75 percent for the
current quarter increased from 1.72 percent
in the year-ago period and 1.67 percent in the
prior quarter. The year-over-year and
sequential increases were mostly due to
higher tablet churn as customers rolled off
promotional offers.
22
173
347
368
42
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Postpaid Phone Net Adds^
In Thousands
Postpaid phone net additions^ of
42,000 compared to net additions
of 22,000 in the year-ago period
and 368,000 in the prior quarter.
The year-over-year improvement
was mostly due to higher gross
additions, while the sequential
decrease was mostly driven by
seasonally lower gross additions.
The company ended the quarter
with 26.1 million phone
connections.
Tablet net losses^ were 170,000 in the quarter compared to net losses of 36,000 in the year-ago
period and 30,000 in the prior quarter. Both the year-over-year and sequential declines were due to
lower gross additions and higher churn rates as the company continues to focus on growing phone
connections. The company ended the quarter with 2.8 million tablet connections.
25.3 25.3 25.7 26.0 26.1
3.1 3.1 3.0
3.0 2.8
2.5 2.5 2.6
2.7 2.7
30.9 30.9 31.3
31.7 31.6
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Phones Tablets Other DevicesPostpaid Connections^
In Millions
2.72 2.73 2.74 2.75
2.77
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Average Postpaid Subscribers per Account^Average postpaid subscribers
per account^ of 2.77 at quarter
end compared to 2.72 in the
year-ago period and 2.75 in the
prior quarter. The growth has
been driven by higher phones
per account, partially offset by
recent tablet pressure.
Wholesale & affiliate^ net additions were 125,000 in the quarter compared to 655,000 in the year-
ago period and 673,000 in the prior quarter. The year-over-year and sequential declines were mostly
due to lower connected device net additions, with a portion of the sequential decline also driven by
Lifeline customer losses, both of which generally have a lower ARPU than other wholesale & affiliate
customers.
Prepaid net additions^ of 180,000 during the quarter compared to losses of 264,000 in the year-
ago period and losses of 501,000 in the prior quarter. Both the year-over-year and sequential
improvements were driven by strong performance in the Boost brand, while the year-over-year
improvement was also impacted by fewer net losses within the Virgin brand.
Prepaid churn^ was 4.99 percent compared to 5.65 percent for the year-ago period and 5.80
percent for the prior quarter. Both the year-over-year and sequential decreases were mostly driven
by improvements within the Boost brand. The year-over-year decrease was also impacted by lower
Virgin brand deactivations.
3.4 3.3 3.7
4.8
3.5
3.5 3.2 3.1
2.9
3.1
6.9 6.5 6.8
7.7
6.6
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Postpaid PrepaidRetail Sales^
In Millions
Retail sales^ were 6.6 million
during the quarter compared to
6.9 million in the year-ago period
and 7.7 million in the prior
quarter. The year-over-year
decrease was due to lower
prepaid sales, partially offset by
higher postpaid phone sales. The
sequential decrease was primarily
driven by seasonally lower
postpaid sales, partially offset by
higher prepaid gross additions.
28%
35%
42%
50%
55%
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Postpaid Carrier Aggregation Capable
Phones as a Percentage of Phone
Connections^
Postpaid carrier aggregation capable phones^, which
allow for higher download data speeds, were 72 percent of
postpaid phones sold during the quarter, increasing the
number of these phones within the phone base to 55
percent.
Postpaid smartphones^
represented 94 percent of the
ending postpaid phone
connection base compared
to 92 percent at the end of
the year-ago period and 94
percent at the end of the prior
quarter. During the quarter,
98 percent of postpaid
phones sold were
smartphones.
Postpaid tri-band LTE
phones^ represented 84
percent of the ending
postpaid phone connection
base compared to 69 percent
at the end of the year-ago
period and 82 percent at the
end of the prior quarter.
During the quarter, 96
percent of postpaid phones
sold were tri-band.
61%
64%
67%
71%
74%
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Postpaid Phone Connections on Unsubsidized Service Plans^Postpaid phone connections
on unsubsidized service
plans^ represented 74
percent of the base at the end
of the quarter, compared to
61 percent in the year-ago
period and 71 percent in the
prior quarter.
63%
69% 73%
80% 82%
71%
75% 78%
84% 86%
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Lease Percentage of Sales
Installment Percentage of Sales
Lease and Installment Percentage of Phone Sales
Postpaid Device
Financing^
Postpaid device financing rate^ was 82 percent of postpaid
sales for the quarter (42 percent on leasing and 40 percent on
installment plans) compared to 63 percent for the year-ago
period and 80 percent in the prior quarter. At the end of the
quarter, 38 percent of the postpaid connection base was active
on a leasing agreement compared to 33 percent in the year-ago
quarter and 38 percent in the prior quarter.
Postpaid phone financing rate^ was 86 percent of phone sales
for the quarter compared to 71 percent for the year-ago period
and 84 percent in the prior quarter.
Postpaid upgrade
rate^ was 6.1
percent during the
quarter compared to
5.9 percent for the
year-ago period and
9.0 percent for the
prior quarter. The
sequential decrease
was driven by normal
seasonality.
Independent mobile analytics firm
RootMetrics® awarded Sprint over 30
percent more first-place (outright or
shared) Metropolitan area RootScore®
Awards (from 103 to 135) for reliability,
speed, data, call, text, or overall network
performance in the 76 markets measured
in the first half of 2017 compared to the
year-ago testing period.1 Additionally,
Sprint ranked #2 nationally in Call
performance for the fourth consecutive
time in the second half of 2016 report,
including more metro Call RootScore
awards (108) than Verizon, AT&T, or T-
Mobile for the first time ever.
Sprint’s overall network reliability
continues to beat T-Mobile and performs
within 1 percent of Verizon and AT&T,
based on an analysis of Nielsen data.2
As previously announced, Sprint helped
develop a breakthrough innovation called
High Performance User Equipment (HPUE), a
new technology that extends the coverage of
its 2.5GHz spectrum by up to 30 percent to
nearly match its mid-band 1.9GHz spectrum
performance on capable devices. In one of the
fastest progressions from global standard
approval to commercial availability, HPUE-
capable devices are already available to Sprint
customers, including the recently launched
LG G6, Samsung Galaxy S8, and ZTE Max XL.
1 Rankings based on RootMetrics Metro RootScore Reports from 1H 2016, 2H 2016, and 1H 2017 and, National RootScore Report from 2H 2016 for mobile performance
as tested on best available plans and devices on four mobile networks across all available network types. Your experiences may vary. The RootMetrics award is not an
endorsement of Sprint. Visit www.rootmetrics.com for more details.
2 Average network reliability (voice & data) based on Sprint’s analysis of latest Nielsen drive test data in the top 106 metro markets.
2 Average network reliability (voice & data) based on Sprint’s analysis of latest Nielsen drive test data in the top 106 metro markets.
Sprint is unlocking the value of the largest spectrum holdings in the U.S. in a capital-efficient manner
and third party sources continue to validate the company’s network performance improvements.
$8.1
$8.0
$8.2
$8.5 $8.5
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Net Operating Revenues
Dollars In Billions
Net operating revenues of $8.5 billion for the quarter increased $468 million year-over-year and
declined $10 million sequentially. The year-over-year growth was mostly driven by higher equipment
revenue, partially offset by lower wireless and wireline service revenue. Sequentially, higher
equipment revenue was offset by lower wireless service revenue. The year-over-year and sequential
growth in equipment revenue was partially driven by the sale of used devices to third parties, which
had a corresponding impact to cost of products expense and was relatively neutral to Adjusted
EBITDA*.
Wireless service revenue of $5.7 billion declined $410 million year-over-year and $202 million
sequentially. Approximately $200 million of both the year-over-year and sequential decreases were
driven by changes to the company’s device insurance program, which were accretive to Adjusted
EBITDA* but resulted in lower insurance revenue as the program revenue is accounted for and
presented on a net basis. Adjusted for this change, wireless service revenue was flat sequentially. In
addition, the year-over-year reduction was impacted by lower postpaid phone ARPU^, as customers
continued to migrate to rate plans offered in conjunction with device financing, partially offset by
growth in the postpaid phone customer base.
Wireline revenues of $480 million for the quarter declined $82 million year-over-year and $17
million sequentially. The year-over-year and sequential declines were primarily driven by lower voice
volumes as the company continues to de-emphasize certain voice services.
$71.53 $72.17 $71.69 $71.77 $68.66
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Service Equipment
Postpaid Phone Average Billings Per User
(ABPU)^*
Postpaid Phone Average Billings
Per User (ABPU)^* of $68.66 for the
quarter decreased 4 percent both
year-over-year and sequentially. The
year-over-year and sequential
declines were almost entirely due to
lower insurance revenue resulting
from the change in the company’s
device insurance program, which
was accretive to Adjusted EBITDA*,
but had an approximate $2.50
dilutive impact on phone ABPU in the
quarter. Normalizing for this change,
ABPU was relatively flat both year-
over-year and sequentially.
$168.49 $170.56 $170.29 $171.28 $165.92
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Service EquipmentPostpaid Average Billings Per Account
(ABPA)^*
Postpaid Average Billings Per Account (ABPA)^* of
$165.92 for the quarter decreased 2 percent year-over-
year and 3 percent sequentially. The year-over-year and
sequential decreases were primarily driven by lower
insurance revenue resulting from the change in the
company’s device insurance program. Normalizing for
this change, ABPA would have increased both
sequentially and year-over-year.
Prepaid Average Revenue Per
User (ARPU)^ of $30.08 for the
quarter increased 9 percent both
year-over-year and sequentially.
Both increases were primarily
driven by a change in the
company’s churn rules resulting
in the removal of low-
engagement customers from
the base in the prior quarter.
Normalized
Normalized
$2.2
$2.1 $2.1
$1.9
$1.7
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Cost of Services
Dollars In Billions
Cost of services (CoS) of $1.7 billion
for the quarter decreased $509
million year-over-year and $189
million sequentially. Both the year-
over-year and sequential decreases
were impacted by changes to the
company’s device insurance
program, as the program revenue is
accounted for and reported on a net
basis. The year-over-year decrease
was also driven by lower wireline
expenses, the shutdown of the
WiMax network, lower network labor
expenses, and lower roaming
expenses including the impact of
the nTelos transaction.
$1.9 $1.9
$2.0
$2.1
$2.0
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Selling, General, and Administrative
Dollars In Billions
Selling, general and administrative expenses (SG&A) of $2.0 billion for the quarter increased by
$63 million year-over-year and decreased $78 million sequentially. The year-over-year increase was
mostly driven by higher bad debt expense related to an increase in installment billing sales, as more
bad debt expense is recognized at the time of activation relative to the leasing model, and higher
prepaid sales and marketing expenses, partially offset by lower customer care costs. The sequential
decrease was mostly driven by seasonally lower postpaid sales, partially offset by higher prepaid
marketing and sales expenses.
$1.0 $1.0 $1.0 $1.0 $1.0
$0.6 $0.7 $0.7 $0.8
$0.9
$0.3 $0.3 $0.3
$0.3 $0.2
$1.9 $2.0 $2.0
$2.1 $2.1
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Amortization
Leased Devices
Network and Other Depreciation
Depreciation and Amortization
Dollars In Billions
$1.6
$1.4
$1.7
$2.0 $2.0
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Cost of Products
Dollars In Billions
Cost of products of $2.0 billion for the
quarter increased $429 million year-
over-year and decreased $5 million
sequentially. The year-over-year
increase was driven by an increase in
the installment billing mix of sales and
the sale of used devices to third
parties, which had a corresponding
impact to equipment revenue and was
relatively neutral to Adjusted EBITDA*,
partially offset by the elimination of
lease payments associated with the
first sale-leaseback transaction with
Mobile Leasing Solutions, LLC (MLS).
Sequentially, an increase due to the
sale of used devices to third parties
and higher prepaid sales was offset by
lower postpaid sales and the
elimination of lease payments to MLS.
Depreciation and amortization expense of $2.1 billion for the quarter
increased $218 million year-over-year and $18 million sequentially.
The year-over-year and sequential increases were primarily related to
depreciation of devices associated with our leasing options. Leased
device depreciation was $911 million in the quarter, $550 million in
the year-ago period, and $837 million in the prior quarter.
Other, net expense of
$241 million for the
quarter included $100
million primarily related
to severance and exit
costs, litigation and
other contingencies, and
contract terminations, as
well as $141 million
primarily related to loss
on leased devices, with
only the latter impacting
Adjusted EBITDA*.
$2.2
$2.5
$2.3
$2.5
$2.7
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Adjusted EBITDA*
Dollars In Billions
Net loss of $283 million for the quarter compared to a loss of $554 million in the year-ago period
and $479 million in the prior quarter. The year-over-year and sequential changes in net losses were
directionally in line with the operating income changes noted below.
Operating income of $470 million compared to $8 million in the year-ago period and $311 million
in the prior quarter. The year-over-year improvement was driven by higher Adjusted EBITDA* and
lower other, net expenses, as the year-ago period included charges related to the shutdown of
WiMax network, partially offset by higher lease depreciation expenses. The sequential
improvement was mostly due to higher Adjusted EBITDA*.
Adjusted EBITDA* was $2.7 billion for the quarter, compared to $2.2 billion in the year-ago period
and $2.5 billion in the prior quarter. The year-over-year improvement was primarily due to higher
net operating revenues and lower cost of services expenses, partially offset by higher cost of
products expenses. The sequential increase was mostly impacted by higher equipment revenue.
$603
$466
$707
($646)
$80
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Adjusted Free Cash Flow *
Dollars In Millions
Cash provided by operating activities of $1.3 billion for the quarter compared to $1.3 billion in
the year-ago period and $650 million in the prior quarter. Year-over-year, improvements in Adjusted
EBITDA* were offset by unfavorable working capital changes, while sequentially the increase was
due to improvements in Adjusted EBITDA* combined with favorable working capital changes.
Adjusted free cash flow* of positive $80 million for the quarter compared to positive $603 million
in the year-ago period and negative $646 million in the prior quarter. The year-over-year and
sequential changes aligned with the cash provided by operating activities. In addition, the prior year
included $600 million of proceeds from the sale of future lease receivables, while the prior quarter
included a net cash outflow of approximately $370 million related to the repurchase of devices sold
in the first MLS transaction. During the quarter, the company received $100 million in proceeds and
made net repayments of $414 million related to device financing and sales of receivables.
Cash capital expenditures were $924 million in the quarter compared to $1.3 billion in the year-
ago period and $1.2 billion in the prior quarter. The year-over-year decline was primarily driven by
lower network capital expenditures, while the sequential decline was mostly due to lower leased
device capital expenditures, as the prior quarter included $477 million associated with the
repurchase of devices sold in the first MLS transaction. Capital expenditures for leased devices
were $395 million in the current quarter compared to $568 million in the year-ago period and $767
million in the prior quarter.
Maturities
Cash, Equivalents & ST Investments
Total Revolver Availability
AR Securitization Availability
Vendor Financing
Network LeaseCo
Other
[Empty]
[Empty]
Total
2.4
8.3
1.8
0.8
0.4
1.2
1.9
Liquidity as of
3/31/17
Current Maturities
Cash, Cash Equiv, Short-Term Investments Revolver
Network Equipment Financing
Receivables/Device FinancingVendor Financing Note Maturities
Other
** Includes maturities due through March 2018
Liquidity and Debt
Dollars In Billions $ 12.1
$10.9 of
General
Purpose
Liquidity
$ 5.0
Total general purpose liquidity was $10.9 billion at the end of the quarter, including $8.3 billion
of cash, cash equivalents and short-term investments. Additionally, the company has $1.2 billion
of availability under vendor financing agreements that can be used toward the purchase of 2.5GHz
network equipment.
Sprint continued to execute its financing strategy of diversifying its funding sources, lowering its
cost of capital, and reducing its future cash interest expenses. During the quarter Sprint replaced
its $3.3 billion unsecured revolving bank credit facility with a new $6 billion secured credit facility,
consisting of a $4 billion seven-year term loan and a $2 billion four-year revolving bank credit
facility. At closing, the company borrowed $4 billion on the term loan facility at a rate of LIBOR plus
250 basis points, which is about half of Sprint’s current effective interest rate.
The company also retired approximately $1.6 billion of debt maturities with higher interest
payments in the quarter, including $1 billion of 9.125 percent senior notes, $300 million associated
with its Network LeaseCo facility, and $250 million related to the early retirement of tranche 4 of
its EDC facility.
Operating
Income
Cash
Capex
Adjusted
EBITDA*
Wireless Operating Statistics (Unaudited)
Quarter To Date
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Sprint platform (1):
Net additions (losses) (in thousands)
Postpaid (118) 405 56 811 1,245
Prepaid 180 (501) (264) (1,079) (1,309)
Wholesale and affiliate 125 673 655 2,149 2,733
Total Sprint platform wireless net additions 187 577 447 1,881 2,669
End of period connections (in thousands)
Postpaid (d) 31,576 31,694 30,951 31,576 30,951
Prepaid (d) (e) 11,992 11,812 14,397 11,992 14,397
Wholesale and affiliate (d) (e) 16,134 16,009 13,458 16,134 13,458
Total Sprint platform end of period connections 59,702 59,515 58,806 59,702 58,806
Churn
Postpaid 1.75% 1.67% 1.72% 1.62% 1.61%
Prepaid (e) 4.99% 5.80% 5.65% 5.51% 5.39%
Supplemental data - connected devices
End of period connections (in thousands)
Retail postpaid 2,001 1,960 1,771 2,001 1,771
Wholesale and affiliate 10,880 10,594 8,575 10,880 8,575
Total 12,881 12,554 10,346 12,881 10,346
Sprint platform ARPU (1) (a)
Postpaid 47.34$ 49.70$ 51.68$ 49.77$ 53.39$
Prepaid (e) 30.08$ 27.61$ 27.72$ 28.01$ 27.66$
Sprint platform postpaid phone (1)
Postpaid phone net additions 42 368 22 930 438
Postpaid phone end of period connections (d) 26,079 26,037 25,316 26,079 25,316
Postpaid phone churn 1.58% 1.57% 1.56% 1.48% 1.52%
NON-GAAP RECONCILIATION - ABPA*, POSTPAID PHONE ARPU AND ABPU* (Unaudited)
(Millions, except accounts, connections, ABPA*, ARPU, and ABPU*)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Sprint platform ABPA* (1)
Postpaid service revenue 4,493$ 4,686$ 4,793$ 18,677$ 19,463$
Add: Installment plan billings 343 291 287 1,172 1,190
Add: Lease revenue 842 887 662 3,295 1,838
Total for Sprint platform postpaid connections $ 5,678 $ 5,864 $ 5,742 $ 23,144 $ 22,491
Sprint platform postpaid accounts (in thousands) 11,405 11,413 11,358 11,378 11,248
Sprint platform postpaid ABPA* (b) 165.92$ 171.28$ 168.49$ 169.51$ 166.63$
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Sprint platform postpaid phone ARPU and ABPU* (1)
Postpaid phone service revenue 4,228$ 4,420$ 4,512$ 17,578$ 18,331$
Add: Installment plan billings 309 261 268 1,061 1,116
Add: Lease revenue 829 873 649 3,240 1,799
Total for Sprint platform postpaid phone connections $ 5,366 $ 5,554 $ 5,429 $ 21,879 $ 21,246
Sprint platform postpaid average phone connections (in thousands) 26,053 25,795 25,297 25,659 25,020
Sprint platform postpaid phone ARPU (a) 54.10$ 57.12$ 59.45$ 57.09$ 61.05$
Sprint platform postpaid phone ABPU* (c) 68.66$ 71.77$ 71.53$ 71.06$ 70.77$
(e) As a result of aligning all prepaid brands, including prepaid affiliate subscribers, under one churn and retention program as of December 31, 2016, end of period
prepaid and affiliate subscribers were reduced by 1,234,000 and 21,000, respectively.
(b) Sprint platform postpaid ABPA* is calculated by dividing service revenue earned from connections plus installment plan billings and lease revenue by the sum of
the monthly average number of accounts during the period.
(c) Sprint platform postpaid phone ABPU* is calculated by dividing postpaid phone service revenue earned from postpaid phone connections plus installment plan
billings and lease revenue by the sum of the monthly average number of postpaid phone connections during the period.
(d) As part of the transaction involving Shenandoah Telecommunications Company (Shentel), 186,000 and 92,000 subscribers were transferred in May 2016 from
postpaid and prepaid, respectively, to affiliates. An additional 270,000 nTelos' subscribers are now part of our affiliate relationship with Shentel and are being reported
in wholesale and affiliate subscribers during the quarter ended June 30, 2016.
Year To Date
Quarter To Date Year To Date
Quarter To Date Year To Date
(a) ARPU is calculated by dividing service revenue by the sum of the monthly average number of connections in the applicable service category. Changes in average
monthly service revenue reflect connections 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 connections, plus the net effect of average monthly revenue generated by new connections and deactivating connections.
Sprint platform postpaid phone ARPU represents revenues related to our postpaid phone connections.
Wireless Device Financing Summary (Unaudited)
(Millions, except sales, connections, and sales and connections mix)
Quarter To Date
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Postpaid sales (in thousands) 3,471 4,812 3,438 15,298 16,394
Postpaid sales mix
Subsidy/other 18% 20% 37% 24% 36%
Installment plans 40% 37% 18% 34% 13%
Leasing 42% 43% 45% 42% 51%
Installment plans
Installment sales financed 696$ 1,036$ 311$ 2,884$ 1,059$
Installment billings 343$ 291$ 287$ 1,172$ 1,190$
Leasing
Lease revenue 842$ 887$ 662$ 3,295$ 1,838$
Lease depreciation 911$ 837$ 550$ 3,116$ 1,781$
Leased device additions
Cash paid for capital expenditures - leased devices 395$ 767$ 568$ 1,925$ 2,292$
Transfers from inventory - leased devices 639$ 1,095$ 621$ 2,920$ 3,244$
Leased devices in property, plant and equipment, net 4,162$ 4,454$ 3,645$ 4,162$ 3,645$
Leased device and receivables financings net proceeds
Proceeds from MLS sale -$ -$ -$ 1,055$ 1,136$
Repayments to MLS (151) (176) - (653) -
Proceeds from lease securitization - - 600 - 600
Repayments of lease securitization (102) (55) - (255) -
Proceeds from receivables securitization 100 - - 100 -
Repayments of receivables securitization (161) - - (161) -
Net (repayments) proceeds of financings related to devices and
receivables (314)$ (231)$ 600$ 86$ 1,736$
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
Year To Date
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Millions, except per share data)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Net operating revenues
Service revenue 6,116$ 6,323$ 6,574$ 25,368$ 27,174$
Equipment revenue 2,423 2,226 1,497 7,979 5,006
Total net operating revenues 8,539 8,549 8,071 33,347 32,180
Net operating expenses
Cost of services (exclusive of depreciation and amortization below) 1,736 1,925 2,245 7,861 9,439
Cost of products (exclusive of depreciation and amortization below) 1,980 1,985 1,551 7,077 5,795
Selling, general and administrative 2,002 2,080 1,939 7,994 8,479
Depreciation - network and other 960 1,000 1,042 3,982 4,013
Depreciation - leased devices 911 837 550 3,116 1,781
Amortization 239 255 300 1,052 1,294
Other, net 241 156 436 501 1,069
Total net operating expenses 8,069 8,238 8,063 31,583 31,870
Operating income 470 311 8 1,764 310
Interest expense (631) (619) (552) (2,495) (2,182)
Other income (expense), net 27 (60) 5 (40) 18
Loss before income taxes (134) (368) (539) (771) (1,854)
Income tax expense (149) (111) (15) (435) (141)
Net loss (283)$ (479)$ (554)$ (1,206)$ (1,995)$
Basic and diluted net loss per common share (0.07)$ (0.12)$ (0.14)$ (0.30)$ (0.50)$
Weighted average common shares outstanding 3,988 3,983 3,972 3,981 3,969
Effective tax rate -111.2% -30.2% -2.8% -56.4% -7.6%
NON-GAAP RECONCILIATION - NET LOSS TO ADJUSTED EBITDA* (Unaudited)
(Millions)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Net loss (283)$ (479)$ (554)$ (1,206)$ (1,995)$
Income tax expense 149 111 15 435 141
Loss before income taxes (134) (368) (539) (771) (1,854)
Other (income) expense, net (27) 60 (5) 40 (18)
Interest expense 631 619 552 2,495 2,182
Operating income 470 311 8 1,764 310
Depreciation - network and other 960 1,000 1,042 3,982 4,013
Depreciation - leased devices 911 837 550 3,116 1,781
Amortization 239 255 300 1,052 1,294
EBITDA* (3) 2,580 2,403 1,900 9,914 7,398
Loss (gain) from asset dispositions and exchanges, net (4) - 28 81 (326) 166
Severance and exit costs (5) 36 19 162 66 409
Contract terminations (6) 27 - - 140 -
Litigation and other contingencies (7) 37 - 15 140 193
Reduction in liability - U.S. Cellular asset acquisition (8) - - - - (20)
Adjusted EBITDA* (3) 2,680$ 2,450$ 2,158$ 9,934$ 8,146$
Adjusted EBITDA margin* 43.8% 38.7% 32.8% 39.2% 30.0%
Selected items:
Cash paid for capital expenditures - network and other 529$ 478$ 722$ 1,950$ 4,680$
Cash paid for capital expenditures - leased devices 395$ 767$ 568$ 1,925$ 2,292$
Quarter To Date Year To Date
Quarter To Date Year To Date
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Net operating revenues
Service revenue
Sprint platform (1):
Postpaid 4,493$ 4,686$ 4,793$ 18,677$ 19,463$
Prepaid 1,067 1,077 1,203 4,438 4,986
Wholesale, affiliate and other 184 183 155 693 703
Total Sprint platform 5,744 5,946 6,151 23,808 25,152
Total transactions (2) - - 3 - 219
Total service revenue 5,744 5,946 6,154 23,808 25,371
Equipment revenue 2,423 2,226 1,497 7,979 5,006
Total net operating revenues 8,167 8,172 7,651 31,787 30,377
Net operating expenses
Cost of services (exclusive of depreciation and amortization below) 1,448 1,649 1,922 6,674 8,069
Cost of products (exclusive of depreciation and amortization below) 1,980 1,985 1,551 7,077 5,795
Selling, general and administrative 1,944 2,032 1,868 7,741 8,141
Depreciation - network and other 911 947 991 3,779 3,812
Depreciation - leased devices 911 837 550 3,116 1,781
Amortization 239 255 300 1,052 1,294
Other, net 232 150 434 480 1,045
Total net operating expenses 7,665 7,855 7,616 29,919 29,937
Operating income 502$ 317$ 35$ 1,868$ 440$
WIRELESS NON-GAAP RECONCILIATION (Unaudited)
(Millions)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Operating income 502$ 317$ 35$ 1,868$ 440$
Loss (gain) from asset dispositions and exchanges, net (4) - 28 81 (326) 166
Severance and exit costs (5) 27 13 160 45 385
Contract terminations (6) 27 - - 140 -
Litigation and other contingencies (7) 37 - 15 140 193
Reduction in liability - U.S. Cellular asset acquisition (8) - - - - (20)
Depreciation - network and other 911 947 991 3,779 3,812
Depreciation - leased devices 911 837 550 3,116 1,781
Amortization 239 255 300 1,052 1,294
Adjusted EBITDA* (3) 2,654$ 2,397$ 2,132$ 9,814$ 8,051$
Adjusted EBITDA margin* 46.2% 40.3% 34.6% 41.2% 31.7%
Selected items:
Cash paid for capital expenditures - network and other 468$ 389$ 577$ 1,591$ 4,089$
Cash paid for capital expenditures - leased devices 395$ 767$ 568$ 1,925$ 2,292$
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62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
Quarter To Date Year To Date
Quarter To Date Year To Date
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Net operating revenues
Voice 143$ 153$ 194$ 649$ 840$
Data 39 41 37 166 171
Internet 276 281 316 1,147 1,284
Other 22 22 15 81 87
Total net operating revenues 480 497 562 2,043 2,382
Net operating expenses
Costs of services (exclusive of depreciation and amortization below) 402 400 467 1,686 1,962
Selling, general and administrative 49 49 74 238 328
Depreciation and amortization 47 51 50 195 194
Other, net 8 6 3 21 25
Total net operating expenses 506 506 594 2,140 2,509
Operating loss (26)$ (9)$ (32)$ (97)$ (127)$
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
(Millions)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Operating loss (26)$ (9)$ (32)$ (97)$ (127)$
Severance and exit costs (5) 8 6 3 21 25
Depreciation and amortization 47 51 50 195 194
Adjusted EBITDA* 29$ 48$ 21$ 119$ 92$
Adjusted EBITDA margin* 6.0% 9.7% 3.7% 5.8% 3.9%
Selected items:
Cash paid for capital expenditures - network and other 19$ 24$ 74$ 94$ 279$
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59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
Quarter To Date Year To Date
Quarter To Date Year To Date
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)**
(Millions)
3/31/17 3/31/16
Operating activities
Net loss (1,206)$ (1,995)$
Depreciation and amortization 8,150 7,088
Provision for losses on accounts receivable 555 455
Share-based and long-term incentive compensation expense 93 75
Deferred income tax expense 433 123
Gains from asset dispositions and exchanges (354) -
Amortization of long-term debt premiums, net (302) (316)
Loss on disposal of property, plant and equipment 509 487
Litigation 140 193
Contract terminations 111 -
Other changes in assets and liabilities:
Accounts and notes receivable (1,017) (1,663)
Inventories and other current assets (2,305) (3,065)
Deferred purchase price from sale of receivables (289) 2,478
Accounts payable and other current liabilities (365) (574)
Non-current assets and liabilities, net (308) 111
Other, net 323 500
Net cash provided by operating activities 4,168 3,897
Investing activities
Capital expenditures - network and other (1,950) (4,680)
Capital expenditures - leased devices (1,925) (2,292)
Expenditures relating to FCC licenses (83) (98)
Change in short-term investments, net (5,444) 166
Proceeds from sales of assets and FCC licenses 219 62
Proceeds from sale-leaseback transaction - 1,136
Other, net (42) (29)
Net cash used in investing activities (9,225) (5,735)
Financing activities
Proceeds from debt and financings 10,966 1,355
Repayments of debt, financing and capital lease obligations (5,417) (899)
Debt financing costs (358) (11)
Other, net 95 24
Net cash provided by financing activities 5,286 469
Net increase (decrease) in cash and cash equivalents 229 (1,369)
Cash and cash equivalents, beginning of period 2,641 4,010
Cash and cash equivalents, end of period 2,870$ 2,641$
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)
(Millions)
3/31/17 12/31/16 3/31/16 3/31/17 3/31/16
Net cash provided by operating activities 1,268$ 650$ 1,294$ 4,168$ 3,897$
Capital expenditures - network and other (529) (478) (722) (1,950) (4,680)
Capital expenditures - leased devices (395) (767) (568) (1,925) (2,292)
Expenditures relating to FCC licenses, net (37) (14) (23) (83) (98)
Proceeds from sales of assets and FCC licenses 93 60 26 219 62
Other investing activities, net (6) 134 (4) 92 (29)
Free cash flow* (9) 394$ (415)$ 3$ 521$ (3,140)$
Net (repayments) proceeds of financings related to devices and receivables (314) (231) 600 86 1,736
Adjusted free cash flow* 80$ (646)$ 603$ 607$ (1,404)$
**Certain prior period amounts have been reclassified to conform to the current period presentation.
Year to Date
Quarter To Date Year to Date
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Millions)
3/31/17 3/31/16
ASSETS
Current assets
Cash and cash equivalents 2,870$ 2,641$
Short-term investments 5,444 -
Accounts and notes receivable, net 4,138 1,099
Device and accessory inventory 1,064 1,173
Prepaid expenses and other current assets 601 1,920
Total current assets 14,117 6,833
Property, plant and equipment, net 19,209 20,297
Goodwill 6,579 6,575
FCC licenses and other 40,585 40,073
Definite-lived intangible assets, net 3,320 4,469
Other assets 1,313 728
Total assets 85,123$ 78,975$
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 3,281$ 2,899$
Accrued expenses and other current liabilities 4,141 4,374
Current portion of long-term debt, financing and capital lease obligations 5,036 4,690
Total current liabilities 12,458 11,963
Long-term debt, financing and capital lease obligations 35,878 29,268
Deferred tax liabilities 14,416 13,959
Other liabilities 3,563 4,002
Total liabilities 66,315 59,192
Stockholders' equity
Common stock 40 40
Treasury shares, at cost - (3)
Paid-in capital 27,756 27,563
Accumulated deficit (8,584) (7,378)
Accumulated other comprehensive loss (404) (439)
Total stockholders' equity 18,808 19,783
Total liabilities and stockholders' equity 85,123$ 78,975$
NET DEBT* (NON-GAAP) (Unaudited)
(Millions)
3/31/17 3/31/16
Total debt 40,914$ 33,958$
Less: Cash and cash equivalents (2,870) (2,641)
Less: Short-term investments (5,444) -
Net debt* 32,600$ 31,317$
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55
56
57
58
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60
61
62
63
64
65
66
67
SCHEDULE OF DEBT (Unaudited)
(Millions)
3/31/17
ISSUER MATURITY PRINCIPAL
Sprint Corporation
7.25% Senior notes due 2021 09/15/2021 2,250$
7.875% Senior notes due 2023 09/15/2023 4,250
7.125% Senior notes due 2024 06/15/2024 2,500
7.625% Senior notes due 2025 02/15/2025 1,500
Sprint Corporation 10,500
Sprint Spectrum Co LLC, Sprint Spectrum Co II LLC and Sprint Spectrum Co III LLC
3.36% Senior secured notes due 2021 09/20/2021 3,500
Sprint Spectrum Co LLC, Sprint Spectrum Co II LLC and Sprint Spectrum Co III LLC 3,500
Sprint Communications, Inc.
Export Development Canada secured loan 12/17/2019 300
8.375% Senior notes due 2017 08/15/2017 1,300
9% Guaranteed notes due 2018 11/15/2018 3,000
7% Guaranteed notes due 2020 03/01/2020 1,000
7% Senior notes due 2020 08/15/2020 1,500
11.5% Senior notes due 2021 11/15/2021 1,000
9.25% Debentures due 2022 04/15/2022 200
6% Senior notes due 2022 11/15/2022 2,280
Sprint Communications, Inc. 10,580
Sprint Capital Corporation
6.9% Senior notes due 2019 05/01/2019 1,729
6.875% Senior notes due 2028 11/15/2028 2,475
8.75% Senior notes due 2032 03/15/2032 2,000
Sprint Capital Corporation 6,204
Clearwire Communications LLC
8.25% Exchangeable notes due 2017 (a) 12/01/2017 629
Clearwire Communications LLC 629
Credit facilities
Secured equipment credit facilities 2019 - 2021 431
Accounts receivable facility 11/19/2018 1,964
Secured term loan 02/03/2024 4,000
Credit facilities 6,395
Financing obligations 2017 - 2021 2,476
Capital leases and other obligations 2017 - 2024 540
Total principal 40,824
Net premiums and debt financing costs 90
Total debt 40,914$
(a) $629 million Clearwire 8.25% Exchangeable Notes due 2040 have both a par call and put in December 2017.
*This table excludes (i) our secured revolving bank credit facility, which will expire in 2021 and has no outstanding balance, (ii) $215 million in letters of credit
outstanding under the unsecured revolving bank credit facility, (iii) $540 million of capital leases and other obligations, and (iv) net premiums and debt financing costs.
NOTES TO THE FINANCIAL INFORMATION (Unaudited)
(1) Sprint platform refers to the Sprint network that supports the wireless service we provide through our multiple brands.
(2) Postpaid and prepaid connections from transactions are defined as retail postpaid and prepaid connections acquired from Clearwire in July 2013
who had not deactivated or been recaptured on the Sprint platform.
(3) As more of our customers elect to lease a device rather than purchasing one under our subsidized program, there is a significant positive impact
to EBITDA* and Adjusted EBITDA* from direct channel sales primarily due to the fact the cost of the device is not recorded as cost of products
but rather is depreciated over the customer lease term. Under our device leasing program for the direct channel, devices are transferred from
inventory to property and equipment and the cost of the leased device is recognized as depreciation expense over the customer lease term to an
estimated residual value. The customer payments are recognized as revenue over the term of the lease. Under our subsidized program, the cash
received from the customer for the device is recognized as equipment revenue at the point of sale and the cost of the device is recognized as cost
of products. During the three and twelve-month periods ended March 31, 2017, we leased devices through our Sprint direct channels totaling
approximately $639 million and $2,920 million, respectively, which would have increased cost of products and reduced EBITDA* if they had been
purchased under our subsidized program. Also, during the three and twelve-month periods ended March 31, 2017, the equipment revenue derived
from customers electing to finance their devices through device leasing or installment billing programs in our direct channel was 52% and 62%,
respectively.
The impact to EBITDA* and Adjusted EBITDA* resulting from the sale of devices under our installment billing program is generally neutral except
for the impact from the time value of money element related to the imputed interest on the installment receivable.
(4) During the third quarter of fiscal year 2016 and the fourth quarter of fiscal year 2015, the company recorded losses on dispositions of assets
primarily related to cell site construction and network development costs that are no longer relevant as a result of changes in the company's
network plans. During the second quarter of fiscal year 2016 the company recorded a pre-tax non-cash gain of $354 million related to spectrum
swaps with other carriers.
(5) Severance and exit costs consist of lease exit costs primarily associated with tower and cell sites, access exit costs related to payments that
will continue to be made under the company's backhaul access contracts for which the company will no longer be receiving any economic benefit,
and severance costs associated with reduction in its work force.
(6) During the fourth quarter of fiscal year 2016, we terminated our relationship with General Wireless Operations Inc. (Radio Shack) and incurred net
contract termination charges of approximately $27 million primarily related to cash termination payments and write-downs of leasehold
improvements at associated retail stores that were shut down as of March 31, 2017. During the first quarter of fiscal year 2016 contract
terminations primarily relate to the termination of our pre-existing wholesale arrangement with NTELOS Holding Corp.
(7) Litigation and other contingencies consist of unfavorable developments associated with legal as well as federal and state matters such as sales,
use or property taxes.
(8) As a result of the U.S. Cellular asset acquisition, we recorded a liability related to network shut-down costs, which primarily consisted of lease
exit costs, for which we agreed to reimburse U.S. Cellular. During the third quarter of fiscal year 2014, we identified favorable trends in actual
costs and, as a result, reduced the liability resulting in a gain of $41 million. During the first quarter of fiscal year 2015, we revised our estimate
and, as a result, reduced the liability resulting in approximately $20 million of income.
(9) Free cash flow* for the three-month period ended December 31, 2016 and the twelve-month period ended March 31, 2017, included net cash
outflows of approximately $370 million related to the termination of our MLS Tranche 1 arrangement, which included the repurchase of the
devices.
*FINANCIAL MEASURES
*FINANCIAL MEASURES
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. 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 is EBITDA excluding severance,
exit costs, and other special items. Adjusted EBITDA Margin represents 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. 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.
Sprint Platform Postpaid ABPA is average billings per account and calculated by dividing postpaid service revenue earned
from postpaid customers plus installment plan billings and lease revenue by the sum of the monthly average number of
postpaid accounts during the period. We believe that ABPA provides useful information to investors, analysts and our
management to evaluate average Sprint platform postpaid customer billings per account as it approximates the expected
cash collections, including installment plan billings and lease revenue, per postpaid account each month.
Sprint Platform Postpaid Phone ABPU is average billings per postpaid phone user and calculated by dividing service
revenue earned from postpaid phone customers plus installment plan billings and lease revenue by the sum of the monthly
average number of postpaid phone connections during the period. We believe that ABPU provides useful information to
investors, analysts and our management to evaluate average Sprint platform postpaid phone customer billings as it
approximates the expected cash collections, including installment plan billings and lease revenue, per postpaid phone user
each month.
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, if any, and excluding the sale-leaseback of devices and equity method
investments. Adjusted Free Cash Flow is Free Cash Flow plus the proceeds from device financings and sales of receivables,
net of repayments. We believe that Free Cash Flow and Adjusted Free Cash Flow provide useful information to investors,
analysts and our management about the cash generated by our core operations and net proceeds obtained to fund certain
leased devices, respectively, 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
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”, “outlook,” “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, cost reductions, connections 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 development and deployment of new technologies and services; efficiencies and cost savings of new technologies
and services; customer and network usage; connection growth and retention; service, speed, coverage and quality;
availability of devices; availability of various financings, including any leasing transactions; 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 Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31,
2016, and, when filed, its Annual Report on Form 10-K for the fiscal year ended March 31, 2017. 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) is a communications services company that creates more and better ways to connect its customers to the
things they care about most. Sprint served 59.7 million connections as of March 31, 2017 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 no-contract 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. Sprint has been named
to the Dow Jones Sustainability Index (DJSI) North America for the past five years. You can learn more and visit Sprint at
www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.