Postpaid Phone Net Additions in the Last Two
Months of the Quarter
Lowest Postpaid Churn in Company
History
- Sprint platform postpaid phone losses
were 12,000 in the quarter with phone net additions in May, June
and July
- Improved sequentially for the fifth
consecutive quarter and by over 600,000 year-over-year
- Best-ever Sprint platform postpaid
churn of 1.56 percent improved 49 basis points year-over-year
- Sprint platform net additions of
675,000 compared to net losses of 220,000 in the prior year
quarter
- Massive improvement in network
performance
- Earned 180 RootScore® awards in
the first-half of 2015 compared to only 27 a year ago
- Deployment of carrier aggregation
bringing greater data speed and capacity to customers
- Operating Income of $501 million and
Adjusted EBITDA* of $2.1 billion
- Raising fiscal year 2015 Adjusted
EBITDA* outlook from $6.5 to $6.9 billion to $7.2 to $7.6
billion
Sprint Corporation (NYSE:S) today reported operating
results for the first fiscal quarter of 2015, including record low
Sprint platform postpaid churn of 1.56 percent, total net additions
of 675,000, and for the fifth consecutive quarter, reduced postpaid
phone losses to reach phone net additions in May and June. In
addition, the company reported net operating revenue of $8 billion,
operating income of $501 million and Adjusted EBITDA* of $2.1
billion, and is raising its fiscal year 2015 Adjusted EBITDA*
outlook from the previous expectation of $6.5 to $6.9 billion to
$7.2 to $7.6 billion, excluding any accounting impacts from
potential lease financing.
“Over the past year, Sprint has made meaningful progress in our
turnaround by improving our network performance and enhancing our
overall value proposition,” said Sprint CEO Marcelo Claure. “As a
result, we hit significant milestones during the quarter by posting
the company’s lowest-ever churn and recording postpaid phone net
additions in both May and June, as well as for a third consecutive
month in July. Going forward, we are confident in our plan to
leverage our unique spectrum assets to make our network a
competitive advantage, aggressively reduce operating costs, and
utilize our business relationships and assets to fund our
turnaround.”
Record Sprint Platform Postpaid Churn Highlights Continued
Improvement in Customer Metrics
Sprint is improving the customer experience with better network
performance and a compelling value proposition, including simple
offers such as its industry-first leasing program and the recently
introduced All-In Wireless plans. The company made significant
progress on retaining more of its valuable postpaid customers,
including a record low Sprint platform postpaid churn rate of 1.56
percent – a 49 basis point improvement year-over-year.
Additionally, the company saw strong improvement in the more
profitable phone customers. These trends contributed to improvement
in several Sprint platform postpaid customer metrics.
- Postpaid net additions of 310,000
compared to net losses of 181,000 in the prior year quarter – an
improvement of 491,000 year-over-year.
- Postpaid phone losses were 12,000, but
for the first time in nearly two years Sprint recorded monthly
postpaid phone net additions in both May and June. This marked the
fifth consecutive quarter of sequential improvement and compared to
losses of 620,000 in the prior year quarter. The 608,000
year-over-year improvement was driven by lower churn and a 13
percent increase in gross additions, including a 47 percent
increase in gross additions with prime credit quality.
- Net port positive for the second
consecutive quarter.
The company also reported the following Sprint platform
results:
- Total net additions of 675,000 compared
to net losses of 220,000 in the prior year quarter. The 895,000
year-over-year improvement was mostly driven by fewer postpaid
phone customer losses.
- Prepaid net losses of 366,000 compared
to net losses of 542,000 in the prior year quarter. The 176,000
year-over-year improvement was mostly due to fewer customer losses
in the Assurance brand.
- Wholesale net additions of 731,000
compared to 503,000 in the prior year quarter. The year-over-year
growth was mostly driven by connected devices.
RootScore® Awards Demonstrate Continued
Progress on Network Performance; Next Evolution Underway
Sprint remained focused on building a network that delivers the
consistent reliability, capacity and speed that customers demand
and its progress continues to be recognized. Independent mobile
analytics firm RootMetrics demonstrated the company’s network
improvements by awarding Sprint a total of 180 first place
(outright or shared) RootScore Awards for overall, reliability,
speed, data, call, or text network performance in 125 markets
measured in the first half of 2015 compared to only 27 awards in
the year-ago periodi.
More recently, the company announced the availability of carrier
aggregation, which produces more capacity and is expected to double
data speeds, addressing a key area for improvement. The company is
rolling out two-channel (2x20 MHz) carrier aggregation, a feature
of LTE-Advanced that combines bands of spectrum to create wider
channels in the 2.5 GHz band, on select sites within various
markets across the country. In addition, Sprint is one of the first
operators to roll out carrier aggregation with antenna beamforming,
which significantly improves customers’ experience at the cell
edge. Tests by independent third parties have confirmed the
performance improvements of these actions.
Sprint has made significant progress on network performance and
has started the next evolution of the network. This will involve
significant densification of the network including additional macro
cell sites, deployment of tens of thousands of small cells, and
further expansion of the 2.5 GHz spectrum across the company’s
existing sites.
Closing the Gap on Distribution
To build on its recent momentum and increase customer
acquisition in the future, Sprint took several actions to expand
its retail distribution and close the gap with its competitors.
Sprint’s total retail footprint now includes approximately 4,500
locations in the U.S.
- Sprint-RadioShack Stores – All 1,435
co-branded stores are open and staffed with Sprint employees. The
fully operational “store-within-a-store” retail model has been
completed in about one quarter of the locations with the remaining
expected to be complete by the end of calendar year 2015.
- Sprint® Direct 2 You – This
one-of-a-kind service, which features a Sprint expert helping
customers set up a mobile device at any location the customer
chooses for free, has expanded to several new major metropolitan
areas across the country. The service is now available in Chicago,
Dallas, Denver, Kansas City, Los Angeles, Miami, New York, San
Francisco, Tampa, Washington, D.C. and surrounding areas.
- Dixon’s Carphone – Sprint entered into
a commercial relationship with Dixon’s Carphone, a premier European
consumer electronics retailer renowned for innovation in wireless
retail sales, to build and operate approximately 20 new Sprint
stores in select U.S. markets with potential for significant
expansion.
Quarterly Financial Results
- Net operating revenues of $8 billion
decreased nine percent year-over-year, as customer shifts to rate
plans associated with device financing options and postpaid phone
customer losses drove lower wireless service revenues, and
equipment revenues were impacted due to a shift from installment
billing sales, which recognize more revenue at the point of sale,
to leasing sales, which recognize revenues over time.
- Consolidated Adjusted EBITDA* of $2.1
billion grew 14 percent from the prior year period, as expense
reductions more than offset the decline in operating revenues. In
spite of additional costs related to higher retail sales volumes,
total expenses improved primarily due to lower cost of product
expenses related to the introduction of device leasing options for
which the associated cost is recorded as depreciation expense over
the term of the lease, lower cost of service expenses on the
wireline network, and lower wireless bad debt expense as a result
of a higher mix of prime credit quality customers.
- Operating income of $501 million was
relatively flat from $519 million in the year-ago quarter as higher
depreciation expenses offset the growth in Adjusted EBITDA*.
- Net loss of $20 million, or loss per
share of $.01, compared to a net income of $23 million, or earnings
per share of $.01, in the year-ago period primarily due to higher
interest expenses.
- Total liquidity was $6.6 billion at the
end of the quarter and the company had an additional $1.3 billion
of availability under vendor financing agreements that can be
utilized toward the purchase of 2.5 GHz network equipment. Sprint
has been working with Softbank and other partners in setting up a
leasing company that will finance its devices leased by customers
on attractive terms. These arrangements are expected to be
finalized in the coming months, and Softbank is expected to be a
minority equity investor in the leasing company. With additional
expected expense reductions, a capital efficient deployment of the
network, and funding from the proposed leasing company, Sprint
currently does not expect to raise additional capital through the
public debt or equity markets in the foreseeable future, nor does
it currently expect to sell spectrum.
Financial Outlook
- As a result of improved customer
trends, a greater reduction in operating expenses, and a higher mix
of sales on device financing options, the company is raising its
outlook for fiscal year 2015 Adjusted EBITDA* from its previous
expectation of $6.5 to $6.9 billion to a range of $7.2 and $7.6
billion, excluding any accounting impacts from the potential lease
financing.
- The company expects fiscal year 2015
cash capital expenditures to be approximately $5 billion, excluding
the impact of leased devices sold through indirect channels. This
compares to the previous expectation of accrued capital
expenditures of approximately $5 billion.
Conference Call and Webcast
- Date/Time: 8:30 a.m. (ET) Tuesday, Aug.
4, 2015
- Call-in Information
- U.S./Canada: 866-360-1063 (ID:
79004041)
- International: 706-634-7849 (ID:
79004041)
- Webcast available via the Internet at
www.sprint.com/investors
- Additional information about results,
including the “Quarterly Investor Update,” is available on our
Investor Relations website
Contact Information
- Media Contact: Scott Sloat,
240-855-0164, scott.sloat@sprint.com
- Investor Contact: Jud Henry,
800-259-3755, investor.relations@sprint.com
Wireless Operating Statistics
(Unaudited) Quarter To Date 6/30/15
3/31/15 6/30/14
Sprint Platform:
Net Additions (Losses) (in thousands) Postpaid
310 211 (181 ) Prepaid
(366 ) 546 (542 ) Wholesale and affiliate 731
492 503
Total Sprint
Platform Wireless Net Additions (Losses)
675 1,249
(220 ) End of Period Connections (in
thousands) Postpaid 30,016 29,706 29,737 Prepaid 15,340 15,706
14,715 Wholesale and affiliate 11,456
10,725 8,879
Total Sprint
Platform End of Period Connections 56,812
56,137
53,331 Churn Postpaid 1.56 % 1.84 %
2.05 % Prepaid 5.08 % 3.84 % 4.44 %
Supplemental Data -
Connected Devices End of Period Connections (in
thousands) Retail postpaid 1,439 1,320 988 Wholesale and
affiliate 6,620 5,832
4,192
Total 8,059
7,152 5,180
Supplemental Data - Total Company End of
Period Connections (in thousands) Sprint platform 56,812 56,137
53,331 Transactions (1) 856
1,004 1,222
Total
57,668 57,141
54,553 Sprint Platform ARPU
(a) Postpaid $ 55.48 $ 56.94 $ 62.07 Prepaid $ 27.81 $ 27.50
$ 27.38
NON-GAAP RECONCILIATION - AVERAGE BILLINGS
PER USER (ABPU)* and AVERAGE BILLINGS PER ACCOUNT (ABPA)*
(Unaudited) (Millions, except ABPU*, accounts and ABPA*)
Quarter To Date 6/30/15 3/31/15
6/30/14
ABPU* (b) and
ABPA* (c) Sprint platform postpaid service revenue $
4,964 $ 5,049 $ 5,553 Add: Installment plan billings and lease
revenue 554 423
137 Total for Sprint platform postpaid connections $ 5,518 $
5,472 $ 5,690 Sprint platform postpaid ABPU* $ 61.67 $ 61.71
$ 63.59 Sprint platform postpaid accounts (in thousands)
11,175 11,199 11,753 Sprint platform postpaid ABPA* $ 164.63 $
162.89 $ 161.35 (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. (b)
Sprint platform postpaid ABPU* is calculated by dividing service
revenue earned from customers plus installment plan billings and
lease revenue by the sum of the monthly average number of
connections during the period. (c) Sprint platform postpaid ABPA*
is calculated by dividing service revenue earned from customers
plus installment plan billings and lease revenue by the sum of the
monthly average number of accounts during the period.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Millions, except per Share Data) Quarter To Date
6/30/15 3/31/15
6/30/14
Net Operating Revenues Service revenue $
7,037 $ 7,138 $ 7,683 Equipment revenue 990
1,144 1,106
Total Net
Operating Revenues 8,027
8,282 8,789 Net
Operating Expenses Cost of services (exclusive of depreciation
and amortization below) 2,393 2,381 2,520 Cost of products
(exclusive of depreciation and amortization below) 1,365 1,827
2,158 Selling, general and administrative 2,187 2,331 2,284
Depreciation and amortization 1,588 1,454 1,281 Other, net
(7 ) (29 ) 27 Total net
operating expenses 7,526 7,964
8,270
Operating Income
501 318
519 Interest expense (542 )
(523 ) (512 ) Equity in earnings of
unconsolidated investments and other, net 4
8 1
(Loss) Income
before Income Taxes (37 )
(197 ) 8 Income
tax benefit (expense) 17 (27 )
15
Net (Loss) Income $
(20 ) $ (224 )
$ 23
Basic Net (Loss) Income Per Common Share
$ (0.01 ) $ (0.06
) $ 0.01 Diluted Net (Loss)
Income Per Common Share $ (0.01 )
$ (0.06 ) $ 0.01
Basic Weighted Average Common Shares outstanding
3,967 3,962 3,945
Diluted Weighted Average Common Shares outstanding
3,967 3,962 4,002
Effective Tax Rate 45.9 %
-13.7 % -187.5 %
NON-GAAP RECONCILIATION - NET (LOSS) INCOME TO
ADJUSTED EBITDA* (Unaudited) (Millions) Quarter To Date
6/30/15 3/31/15 6/30/14
Net (Loss) Income $ (20
) $ (224 ) $
23 Income tax (benefit) expense (17 )
27 (15 )
(Loss) Income before
Income Taxes (37 ) (197 ) 8
Equity in earnings of unconsolidated investments and other, net (4
) (8 ) (1 ) Interest expense 542
523 512
Operating Income
501 318
519 Depreciation and amortization
1,588 1,454 1,281
EBITDA* 2,089
1,772 1,800
Severance and exit costs (2) 13
(29 ) 27 Reduction in liability - U.S.
Cellular asset acquisition (3) (20 ) -
-
Adjusted EBITDA*
$ 2,082 $ 1,743
$ 1,827 Adjusted EBITDA
Margin* 29.6 % 24.4 % 23.8
% Selected items: Cash paid for capital
expenditures - network and other $ 1,802 $ 1,608 $ 1,246 Cash paid
for capital expenditures - leased devices $ 544 $ 439 $ -
WIRELESS STATEMENTS OF OPERATIONS
(Unaudited) (Millions) Quarter To Date 6/30/15
3/31/15 6/30/14
Net
Operating Revenues Service revenue Sprint platform: Postpaid $
4,964 $ 5,049 $ 5,553 Prepaid 1,300 1,272 1,221 Wholesale,
affiliate and other 181 189
163 Total Sprint platform 6,445 6,510
6,937 Total transactions (1) 105
118 150 Total service revenue
6,550 6,628 7,087 Equipment revenue 990
1,144 1,106
Total net
operating revenues 7,540
7,772 8,193
Net Operating Expenses Cost of services (exclusive of
depreciation and amortization below) 2,005 2,006 2,049 Cost of
products (exclusive of depreciation and amortization below) 1,365
1,827 2,158 Selling, general and administrative 2,096 2,242 2,193
Depreciation and amortization 1,540 1,406 1,212 Other, net
(8 ) (29 ) 23 Total net
operating expenses 6,998 7,452
7,635
Operating Income
$ 542 $ 320
$ 558 WIRELESS
NON-GAAP RECONCILIATION (Unaudited) (Millions) Quarter To Date
6/30/15 3/31/15
6/30/14
Operating Income $ 542
$ 320 $ 558 Severance and exit costs
(2) 12 (29 ) 23 Reduction in liability - U.S. Cellular asset
acquisition (3) (20 ) - - Depreciation and amortization
1,540 1,406 1,212
Adjusted EBITDA* $ 2,074
$ 1,697 $ 1,793
Adjusted EBITDA Margin* 31.7 %
25.6 % 25.3 % Selected
items: Cash paid for capital expenditures - network and other $
1,640 $ 1,518 $ 1,120 Cash paid for capital expenditures - leased
devices $ 544 $ 439 $ -
WIRELINE
STATEMENTS OF OPERATIONS (Unaudited) (Millions) Quarter To Date
6/30/15 3/31/15
6/30/14
Net Operating Revenues Voice $ 233 $ 264 $
327 Data 49 52 56 Internet 328 335 345 Other 20
17 18
Total net
operating revenues 630
668 746
Net Operating Expenses Costs of services (exclusive of
depreciation and amortization below) 534 538 626 Selling, general
and administrative 87 90 85 Depreciation and amortization 46 46 67
Other, net 1 (2 )
4 Total net operating expenses 668
672 782
Operating
Loss $ (38 ) $
(4 ) $ (36 )
WIRELINE NON-GAAP RECONCILIATION (Unaudited)
(Millions) Quarter To Date 6/30/15
3/31/15 6/30/14
Operating
Loss $ (38 ) $ (4 )
$ (36 ) Severance and exit costs (2) 1 (2 ) 4
Depreciation and amortization 46
46 67
Adjusted EBITDA*
$ 9 $ 40
$ 35 Adjusted EBITDA Margin*
1.4 % 6.0 % 4.7 %
Selected items: Cash paid for capital expenditures -
network and other $ 68 $ 70 $ 59
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
(Millions) Quarter To Date 6/30/15
3/31/15 6/30/14
Operating
Activities Net (loss) income $ (20 ) $ (224 ) $ 23 Depreciation
and amortization 1,588 1,454 1,281 Provision for losses on accounts
receivable 163 162 225 Share-based and long-term incentive
compensation expense 18 (3 ) 26 Deferred income tax (benefit)
expense (13 ) 25 (23 ) Amortization of long-term debt premiums, net
(78 ) (77 ) (74 ) Other changes in assets and liabilities: Accounts
and notes receivable (1,683 ) 712 (369 ) Inventories and other
current assets 869 (529 ) (97 ) Accounts payable and other current
liabilities (867 ) (702 ) (272 ) Non-current assets and
liabilities, net 83 82 (76 ) Other, net 68
76 35
Net cash
provided by operating activities 128
976 679
Investing Activities Capital expenditures -
network and other (1,802 ) (1,608 ) (1,246 ) Capital expenditures -
leased devices (544 ) (439 ) - Expenditures relating to FCC
licenses (26 ) (42 ) (41 ) Reimbursements relating to FCC licenses
- - 95 Change in short-term investments, net (37 ) 88 (102 )
Proceeds from sales of assets and FCC licenses 1 201 20 Other, net
(3 ) (2 ) (3 )
Net
cash used in investing activities (2,411
) (1,802 )
(1,277 ) Financing Activities Proceeds
from debt and financings 346 1,630 - Repayments of debt, financing
and capital lease obligations (26 ) (184 ) (210 ) Proceeds from
issuance of common stock, net 4 (15 ) 9 Other, net 9
(50 ) -
Net cash
provided by (used in) financing activities
333 1,381
(201 ) Net (Decrease) Increase in Cash and
Cash Equivalents (1,950 ) 555 (799
) Cash and Cash Equivalents, beginning of
period 4,010
3,455 4,970 Cash and
Cash Equivalents, end of period $ 2,060
$ 4,010 $
4,171 RECONCILIATION TO CONSOLIDATED
FREE CASH FLOW* (NON-GAAP) (Unaudited) (Millions) Quarter To
Date 6/30/15 3/31/15
6/30/14
Net Cash Provided by Operating
Activities $ 128 $ 976 $
679 Capital expenditures - network and other (1,802 )
(1,608 ) (1,246 ) Capital expenditures - leased devices (544 ) (439
) - (Expenditures) reimbursements relating to FCC licenses, net (26
) (42 ) 54 Proceeds from sales of assets and FCC licenses 1 201 20
Other investing activities, net (3 ) (2
) (3 )
Free Cash Flow* $
(2,246 ) $ (914 )
$ (496 ) CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions)
6/30/15 3/31/15
Assets Current
assets Cash and cash equivalents $ 2,060 $ 4,010 Short-term
investments 203 166 Accounts and notes receivable, net 3,813 2,290
Device and accessory inventory 949 1,359 Deferred tax assets 87 62
Prepaid expenses and other current assets 673
1,890 Total current assets 7,785 9,777
Property, plant and equipment, net 20,563 19,721 Goodwill 6,575
6,575 FCC licenses and other 40,013 39,987 Definite-lived
intangible assets, net 5,516 5,893 Other assets 987
1,077
Total assets
$ 81,439 $ 83,030
Liabilities and Stockholders' Equity Current
liabilities Accounts payable $ 3,272 $ 4,347 Accrued expenses and
other current liabilities 4,458 5,293 Current portion of long-term
debt, financing and capital lease obligations 1,384
1,300 Total current liabilities 9,114
10,940 Long-term debt, financing and capital lease
obligations 32,746 32,531 Deferred tax liabilities 13,913 13,898
Other liabilities 3,941 3,951
Total liabilities 59,714
61,320 Stockholders' equity
Common shares 40 40 Paid-in capital 27,492 27,468 Treasury shares,
at cost - (7 ) Accumulated deficit (5,403 ) (5,383 ) Accumulated
other comprehensive loss (404 ) (408 )
Total stockholders' equity 21,725
21,710
Total liabilities and stockholders'
equity $ 81,439 $
83,030 NET DEBT* (NON-GAAP)
(Unaudited) (Millions)
6/30/15
3/31/15 Total Debt $ 34,130 $ 33,831
Less: Cash and cash equivalents (2,060 ) (4,010 ) Less: Short-term
investments (203 ) (166 )
Net
Debt* $ 31,867 $
29,655
SCHEDULE OF DEBT (Unaudited) (Millions) 6/30/15
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 7.625% Notes due 2025
7.625% 02/15/2025 1,500
Sprint Corporation
10,500 Sprint Communications,
Inc. Export Development Canada Facility (Tranche 2) 4.155%
12/15/2015 500 Export Development Canada Facility (Tranche 3)
3.655% 12/17/2019 300 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.
14,080 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 Secured Equipment
Credit Facilities 1.805% - 2.397% 2017 - 2022
956
Tower financing obligation 6.092% 09/30/2021
261
Capital lease obligations and other
2015 - 2023
174 TOTAL
PRINCIPAL
33,104 Net premiums
1,026 TOTAL
DEBT $
34,130 NOTES TO THE FINANCIAL INFORMATION
(Unaudited) (1) 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. (2) Severance and exit
costs are primarily associated with work force reductions, access
terminations and costs related to exiting certain operations of
Clearwire. (3) 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 first quarter of fiscal year
2015, we revised our estimate and, as a result, reduced the
liability resulting in approximately $20 million of income.
*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.
ABPU is average billings per user and calculated by
dividing service revenue earned from customers plus installment
plan billings and lease revenue by the sum of the monthly average
number of connections during the period. We believe that ABPU
provides useful information to investors, analysts and our
management to evaluate average Sprint platform postpaid customer
billings as it approximates the expected cash collections,
including installment plan billings and lease revenue, per user
each month.
ABPA is average billings per account and calculated by
dividing service revenue earned from customers plus installment
plan billings and lease revenue by the sum of the monthly average
number of 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 account 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 amounts included as investments in Sprint Communications,
Inc. during the period, if applicable. 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, 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, 2015. 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 more than 57
million connections as of June 30, 2015 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 four years.
You can learn more and visit Sprint at www.sprint.com or
www.facebook.com/sprint and www.twitter.com/sprint.
i Rankings based on 125 RootMetrics (January 1 – June 30, 2015)
RootScore Reports 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150804005847/en/
Sprint CorporationMedia:Scott Sloat,
240-855-0164scott.sloat@sprint.comorInvestors:Jud Henry,
800-259-3755investor.relations@sprint.com
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