Sprint Reports Second Quarter 2013 Results

  Sprint Reports Second Quarter 2013 Results

  *Sprint platform wireless service revenue increased 8 percent
    year-over-year to highest-ever of $7.2 billion. Best-ever Sprint platform
    postpaid ARPU of $64.20 and 11th consecutive quarter of year-over-year
    growth
  *Operating Loss of $874 million, includes accelerated depreciation of
    approximately $430 million and noncash charges of $623 million related to
    the successful Nextel platform shutdown; Adjusted OIBDA* of $1.4 billion
    in spite of highest estimated Network Vision net dilution of any quarter
  *Nextel network shut down as scheduled on June 30; more than 4 million
    Nextel subscribers recaptured to the Sprint platform since Network Vision
    commenced in early 2011, 44 percent postpaid recapture rate
  *Strong progress on Network Vision deployment with more than 20,000 sites
    currently on air -- up 50 percent from last quarter
  *All three transactions now closed

       *SoftBank transaction brought an attractive cash premium to Sprint
         Nextel stockholders, $5 billion of cash contributions and improved
         operating scale
       *Clearwire transaction expected to fully utilize and integrate
         complementary 2.5GHz spectrum assets
       *U.S. Cellular transaction adds spectrum that should significantly
         increase Sprint’s network capacity and improve the customer
         experience in two key markets

The company’s second 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: 13175400 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.

Business Wire

OVERLAND PARK, Kan. -- July 30, 2013

Sprint Corporation (NYSE: S) today reported Sprint Nextel’s second quarter
2013 results including record quarterly Sprint platform wireless service
revenue of $7.2 billion and continued growth in Sprint platform postpaid
subscribers. For the quarter, operating loss was $874 million and Adjusted
OIBDA* was $1.4 billion as Sprint continued to make significant investments in
the business.

“This is a historic time for Sprint. We recently shut down the Nextel platform
and completed the Clearwire, SoftBank and U.S. Cellular transactions. In the
second quarter, we achieved record levels in Sprint platform postpaid
subscribers, service revenue and postpaid ARPU, and increased our 4G LTE
footprint,” said Dan Hesse, Sprint CEO. “Sprint pioneered unlimited voice,
text and data in 2008, and we recently introduced the first lifetime
guarantee, solidifying our commitment to the simplicity and peace of mind that
unlimited brings.”

Sprint Platform Again Achieves Record Revenue, ARPU and Subscribers

Sprint platform service revenue, postpaid ARPU and postpaid subscribers all
reached best-ever levels in the second quarter. The Sprint platform had
postpaid net additions for the 13th consecutive quarter and a postpaid Nextel
recapture rate of 34 percent. Sprint platform postpaid ARPU grew
year-over-year for the 11th consecutive quarter.

As expected, the Sprint platform lost prepaid customers as a result of planned
deactivations related to regulatory changes impacting the lower-ARPU Assurance
brand. This was partially offset by strong Assurance gross additions and
continued growth in both Virgin Mobile and Boost Mobile subscribers. Virgin
Mobile gross additions improved 70 percent year-over-year.

Adjusted OIBDA* Relatively Flat Year-Over-Year Despite Higher Network Vision
Dilution

Adjusted OIBDA* of $1.4 billion decreased by 2 percent year-over-year
primarily due to lower Nextel platform revenue, higher Network Vision dilution
and slightly higher SG&A expenses offset by growth in Sprint platform service
revenue.

EPS and Operating Loss Include Accelerated Depreciation, Nextel Shutdown Costs

Operating loss of $874 million, net loss of $1.6 billion and diluted net loss
of $.53 per share for the quarter included, pre-tax, accelerated depreciation
of approximately $430 million and noncash charges of $623 million related to
the Nextel platform shutdown. For the second quarter of 2012, operating loss
was $629 million, net loss was $1.4 billion and diluted net loss was $.46 per
share including, pre-tax, accelerated depreciation of $782 million and noncash
charges of $184 million related to the thinning of the Nextel platform. Net
loss and diluted net loss in the year-ago period also included a pre-tax
impairment of $204 million related to Sprint’s investment in Clearwire.

Network Vision Momentum Continues with Nextel Platform Shutdown, More Than
20,000 Sites On Air

Sprint made strong progress on the Network Vision deployment in the quarter
including the shutdown of the Nextel platform on June 30, which enables
significant future improvement to Sprint’s cost structure. Over 4 million
Nextel subscribers were recaptured to the Sprint platform since Network Vision
commenced in early 2011.

To date more than 20,000 Network Vision sites are on air compared to more than
13,500 reported with first quarter results. The number of sites that are
either ready for construction, already underway or completed has grown to more
than 30,000.

As part of Network Vision, Sprint has launched 4G LTE in 151 cities, including
Los Angeles, Dallas, Atlanta, Miami and Boston. Sprint expects to provide 200
million people with LTE by the end of 2013.

Iconic Smartphones Paired With Unlimited Data Remain Key Differentiator

Eighty-six percent of quarterly Sprint platform postpaid handset sales were
smartphones, including approximately 1.4 million iPhones^® sold during the
quarter. Forty-one percent of iPhone sales were to new customers.

In addition, Sprint launched other popular smartphones including Samsung
Galaxy S^® 4 and HTC One^® during the quarter and earlier this month
introduced HTC^® 8XT, Sprint’s first Windows 8 smartphone. Also this month,
Sprint launched the first three tri-band 4G LTE data devices, which are
expected to bring customers improved network performance and stronger
in-building coverage by providing access to Sprint’s 4G LTE network at 800
MHz, 1.9 GHz and 2.5 GHz where available.

In July, Sprint strengthened its unique pairing of an unbeatable device
portfolio with simplicity and value by launching The Sprint Unlimited
Guarantee^SM that offers customers unlimited talk, text and data while on the
Sprint network, for the life of the line of service. The guarantee is for new
and existing customers who sign up for Sprint’s new Unlimited, My Way^SM plan
or My All-in^SM plans featuring unlimited talk, text and data while on the
Sprint network for as little as $80 per month for the first line, with greater
savings for additional lines. The guarantee will apply to customers as long as
they remain on the plan, meet the terms and conditions of the plan and pay
their bill in full and on time.

Third Parties Recognize Sprint’s Leadership

According to results from the 2013 American Customer Satisfaction Index (ACSI)
released in May, Sprint is the most improved U.S. company in customer
satisfaction, across all 47 industries studied, during the last five years.
The ACSI survey also ranked Sprint No. 1 in delivering the best value among
national wireless carriers. Among the study’s customer experience benchmarks,
Sprint also ranked highest in bill rating and data plan choice.

Sprint Velocity^SM, an end-to-end mobile integration solution developed
specifically for auto manufacturers, received two prestigious awards from
Pipeline magazine’s 2013 COMET Innovations Awards program. Sprint was the
service provider winner for Innovation in Connectivity and was runner-up in
the Innovative Collaborations category. In addition, Sprint Velocity won the
Telematics Update Industry Newcomer Award.

The Environmental Investment Organisation named Sprint the highest ranking of
all companies in the U.S. and No. 13 globally in its 2013 Environmental
Tracking Carbon Rankings. Sprint was named a leader for North America and the
continent’s highest ranked telecommunications company.

Forecast

On a stand-alone basis, Sprint would be increasing its 2013 Adjusted OIBDA*
forecast to between $5.5 billion and $5.7 billion. The company’s previous
forecast was for Adjusted OIBDA* to be at the high end of between $5.2 billion
and $5.5 billion and did not include the dilutive effects of the SoftBank and
Clearwire transactions, which are estimated to be approximately $400 million,
subject to finalization of fair values. Including the impacts of these
transactions, the company now expects 2013 Adjusted OIBDA* to be between $5.1
billion and $5.3 billion.

The company expects 2013 capital expenditures of approximately $8 billion.

                                                                
Wireless Operating
Statistics (Unaudited)
                          Quarter To Date                  Year To Date
                          6/30/13   3/31/13   6/30/12    6/30/13   6/30/12
Net Additions (Losses)
(in thousands)
Sprint platform:
Postpaid ^ (2)            194        12         442        206        705
Prepaid ^ (3)             (486   )   568        451        82         1,321
Wholesale and affiliate  (228   )  (224   )  388       (452   )  1,173  
Total Sprint platform     (520   )   356        1,281      (164   )   3,199
Nextel platform:
Postpaid ^ (2)            (1,060 )   (572   )   (688   )   (1,632 )   (1,143 )
Prepaid ^ (3)            (255   )  (199   )  (310   )   (454   )  (691   )
Total Nextel platform     (1,315 )   (771   )   (998   )   (2,086 )   (1,834 )
Transactions: ^(a)
Postpaid ^ (2)            (179   )   -          -          (179   )   -
Prepaid ^ (3)            (20    )  -        -         (20    )  -      
Total transactions        (199   )   -          -          (199   )   -
                                                                      
Total retail postpaid     (1,045 )   (560   )   (246   )   (1,605 )   (438   )
net losses
Total retail prepaid      (761   )   369        141        (392   )   630
net (losses) additions
Total wholesale and
affiliate net (losses)   (228   )  (224   )  388       (452   )  1,173  
additions
Total Wireless Net       (2,034 )  (415   )  283       (2,449 )  1,365  
(Losses) Additions
                                                                      
End of Period
Subscribers (in
thousands)
Sprint platform:
Postpaid ^ (2)            30,451     30,257     29,434     30,451     29,434
Prepaid ^ (3)             15,215     15,701     14,149     15,215     14,149
Wholesale and affiliate  7,710    7,938    8,391     7,710    8,391  
Total Sprint platform     53,376     53,896     51,974     53,376     51,974
Nextel platform:
Postpaid ^ (2)            -          1,060      3,142      -          3,142
Prepaid ^ (3)            -        255      1,270     -        1,270  
Total Nextel platform     -          1,315      4,412      -          4,412
Transactions: ^(a)
Postpaid ^ (2)            173        -          -          173        -
Prepaid ^ (3)            39       -        -         39       -      
Total transactions        212        -          -          212        -
                                                                      
Total retail postpaid
end of period             30,624     31,317     32,576     30,624     32,576
subscribers
Total retail prepaid
end of period             15,254     15,956     15,419     15,254     15,419
subscribers
Total wholesale and
affiliate end of period  7,710    7,938    8,391     7,710    8,391  
subscribers
Total End of Period      53,588   55,211   56,386    53,588   56,386 
Subscribers
                                                                      
Supplemental Data -
Connected Devices
End of Period
Subscribers (in
thousands)
Retail postpaid           798        824        809        798        809
Wholesale and affiliate  3,057    2,803    2,361     3,057    2,361  
Total                    3,855    3,627    3,170     3,855    3,170  


^(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.


Wireless Operating Statistics (Unaudited) (continued)
                                                      
                     Quarter To Date                     Year To Date
                     6/30/13    3/31/13    6/30/12     6/30/13    6/30/12
Churn                                                            
Sprint platform:
Postpaid               1.83  %     1.84  %     1.69  %     1.83  %     1.85  %
Prepaid                5.22  %     3.05  %     3.16  %     4.15  %     3.04  %
Nextel platform:
Postpaid               33.90 %     7.57  %     2.56  %     16.40 %     2.31  %
Prepaid                32.13 %     12.46 %     7.18  %     18.58 %     8.04  %
Transactions: ^(a)
Postpaid               26.64 %     -           -           26.64 %     -
Prepaid                16.72 %     -           -           16.72 %     -
                                                                     
Total retail           2.63  %     2.09  %     1.79  %     2.36  %     1.90  %
postpaid churn
Total retail           5.51  %     3.26  %     3.53  %     4.39  %     3.57  %
prepaid churn
                                                                     
ARPU ^(b)
Sprint platform:
Postpaid             $ 64.20     $ 63.67     $ 63.38     $ 63.94     $ 62.96
Prepaid              $ 26.96     $ 25.95     $ 25.49     $ 26.46     $ 25.57
Nextel platform:
Postpaid             $ 36.66     $ 35.43     $ 40.25     $ 35.84     $ 40.62
Prepaid              $ 34.48     $ 31.75     $ 37.20     $ 32.60     $ 36.37
Transactions: ^(a)
Postpaid             $ 59.87     $ -         $ -         $ 59.87     $ -
Prepaid              $ 19.17     $ -         $ -         $ 19.17     $ -
                                                                     
Total retail         $ 63.59     $ 62.47     $ 60.88     $ 63.02     $ 60.38
postpaid ARPU
Total retail         $ 27.02     $ 26.08     $ 26.59     $ 26.55     $ 26.70
prepaid ARPU
                                                                     
Nextel Platform
Subscriber
Recaptures
Subscribers (in
thousands) ^(4):
Postpaid               364         264         431         628         659
Prepaid                101         67          143         168         280
Rate ^(5):
Postpaid               34    %     46    %     60    %     38    %     55    %
Prepaid                39    %     34    %     32    %     37    %     27    %


^(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.
^(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.

                                                                 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Millions,
except per                            
Share Data)
                 Quarter To Date                       Year To Date
                 6/30/13     3/31/13    6/30/12      6/30/13     6/30/12
                                                                    
Net Operating   $ 8,877    $ 8,793   $ 8,843     $ 17,670   $ 17,577 
Revenues
Net Operating
Expenses
Cost of            2,747        2,640       2,788        5,387        5,575
services
Cost of            2,298        2,293       2,223        4,591        4,521
products
Selling,
general and        2,442        2,336       2,381        4,778        4,817
administrative
Depreciation
and                1,632        1,492       1,896        3,124        3,562
amortization
Other, net       632       3        184        635       (14    )
Total net
operating        9,751     8,764    9,472      18,515    18,461 
expenses
Operating        (874   )   29       (629   )    (845   )   (884   )
(Loss) Income
Interest           (428   )     (432  )     (321   )     (860   )     (619   )
expense
Equity in
losses of
unconsolidated   (240   )   (202  )   (398   )    (442   )   (671   )
investments
and other, net
Loss before        (1,542 )     (605  )     (1,348 )     (2,147 )     (2,174 )
Income Taxes
Income tax       (55    )   (38   )   (26    )    (93    )   (63    )
expense
Net Loss        $ (1,597 )  $ (643  )  $ (1,374 )   $ (2,240 )  $ (2,237 )
                                                                    
Basic and
Diluted Net     $ (0.53  )  $ (0.21 )  $ (0.46  )   $ (0.74  )  $ (0.75  )
Loss Per
Common Share
Weighted
Average Common     3,022        3,013       3,000        3,017        3,000
Shares
outstanding
Effective Tax    -3.6   %   -6.3  %   -1.9   %    -4.3   %   -2.9   %
Rate
                                                                    
                                                                    
NON-GAAP
RECONCILIATION
- NET LOSS TO
ADJUSTED
OIBDA*
(Unaudited)
(Millions)
                 Quarter To Date                       Year To Date
                 6/30/13     3/31/13    6/30/12      6/30/13     6/30/12
                                                                    
Net Loss        $ (1,597 )  $ (643  )  $ (1,374 )   $ (2,240 )  $ (2,237 )
Income tax       55        38       26         93        63     
expense
Loss before        (1,542 )     (605  )     (1,348 )     (2,147 )     (2,174 )
Income Taxes
Equity in
losses of
unconsolidated     240          202         398          442          671
investments
and other, net
Interest         428       432      321        860       619    
expense
Operating        (874   )   29       (629   )    (845   )   (884   )
(Loss) Income
Depreciation
and              1,632     1,492    1,896      3,124     3,562  
amortization
OIBDA*           758       1,521    1,267      2,279     2,678  
Severance and
exit costs         632          25          184          657          184
^(6)
Gains from
asset
dispositions       -            -           -            -            (29    )
and exchanges
^ (7)
Asset
impairments
and                -            -           -            -            18
abandonments
^(8)
Spectrum
hosting
contract           -            -           -            -            (170   )
termination,
net ^(9)
Access costs ^     -            -           -            -            (17    )
(10)
Litigation ^       -            (22   )     -            (22    )     -
(11)
Business
combinations     34        -        -          34        -      
^(12)
Adjusted         1,424     1,524    1,451      2,948     2,664  
OIBDA*
Capital
expenditures     1,897     1,812    1,158      3,709     1,958  
^(1)
Adjusted
OIBDA* less     $ (473   )  $ (288  )  $ 293       $ (761   )  $ 706    
Capex
                                                                    
Adjusted OIBDA     17.7   %     19.1  %     17.9   %     18.4   %     16.6   %
Margin*
                                                                    
                                                                    
Selected item:
Deferred tax
asset            $ 621        $ 265       $ 554        $ 886        $ 902
valuation
allowance

                                                               
WIRELESS STATEMENTS OF
OPERATIONS (Unaudited)
(Millions)       
                   Quarter To Date                     Year To Date
                   6/30/13    3/31/13    6/30/12     6/30/13     6/30/12
Net Operating
Revenues
Service revenue
Sprint platform:
Postpaid ^(2)      $ 5,835     $ 5,773     $ 5,540     $ 11,608     $ 10,948
Prepaid ^(3)         1,276       1,194       1,064       2,470        2,080
Wholesale,
affiliate and      131      133      124       264       227    
other
Total Sprint       7,242    7,100    6,728     14,342    13,255 
platform
Nextel platform:
Postpaid ^(2)        74          143         425         217          925
Prepaid ^(3)       17       33       161       50        349    
Total Nextel       91       176      586       267       1,274  
platform
Transactions:
Postpaid ^(2)        24          -           -           24           -
Prepaid ^(3)       1        -        -         1         -      
Total              25       -        -         25        -      
transactions
                                                                    
Equipment          820      813      753       1,633     1,488  
revenue
Total net
operating          8,178    8,089    8,067     16,267    16,017 
revenues
                                                                    
Net Operating
Expenses
Cost of services     2,292       2,171       2,279       4,463        4,568
Cost of products     2,298       2,293       2,223       4,591        4,521
Selling, general
and                  2,294       2,230       2,266       4,524        4,577
administrative
Depreciation and     1,526       1,393       1,796       2,919        3,360
amortization
Other, net         632      -        184       632       3      
Total net
operating          9,042    8,087    8,748     17,129    17,029 
expenses
Operating (Loss)  $ (864  )  $ 2       $ (681  )   $ (862   )  $ (1,012 )
Income
                                                                    
Supplemental
Revenue Data
Total retail       $ 7,227     $ 7,143     $ 7,190     $ 14,370     $ 14,302
service revenue
Total service      $ 7,358     $ 7,276     $ 7,314     $ 14,634     $ 14,529
revenue
                                                                    
                                                                    
                                                                    
WIRELESS
NON-GAAP
RECONCILIATION
(Unaudited)
(Millions)
                   Quarter To Date                     Year To Date
                   6/30/13    3/31/13    6/30/12     6/30/13     6/30/12
                                                                    
Operating (Loss)   $ (864  )   $ 2         $ (681  )   $ (862   )   $ (1,012 )
Income
Severance and        632         22          184         654          184
exit costs ^(6)
Gains from asset
dispositions and     -           -           -           -            (29    )
exchanges ^ (7)
Asset
impairments and      -           -           -           -            18
abandonments
^(8)
Spectrum hosting
contract             -           -           -           -            (170   )
termination, net
^(9)
Litigation ^(11)     -           (22   )     -           (22    )     -
Depreciation and   1,526    1,393    1,796     2,919     3,360  
amortization
Adjusted OIBDA*    1,294    1,395    1,299     2,689     2,351  
Capital
expenditures       1,728    1,706    1,012     3,434     1,722  
^(1)
Adjusted OIBDA*   $ (434  )  $ (311  )  $ 287      $ (745   )  $ 629    
less Capex
                                                                    
Adjusted OIBDA       17.6  %     19.2  %     17.8  %     18.4   %     16.2   %
Margin*

                                                                
WIRELINE STATEMENTS OF
OPERATIONS (Unaudited)
(Millions)            
                        Quarter To Date                  Year To Date
                        6/30/13   3/31/13   6/30/12    6/30/13    6/30/12
Net Operating
Revenues
Voice                   $ 377      $ 352      $ 426      $ 729       $ 843
Data                      87         94         99         181         207
Internet                  432        434        449        866         902
Other                   14      13      21       27       41    
Total net operating     910     893     995      1,803    1,993 
revenues
                                                                     
Net Operating
Expenses
Costs of services and     669        661        730        1,330       1,446
products
Selling, general and      112        104        116        216         237
administrative
Depreciation              105        98         104        203         204
Other, net              -       3       -        3        (17   )
Total net operating     886     866     950      1,752    1,870 
expenses
Operating Income       $ 24     $ 27     $ 45      $ 51      $ 123   
                                                                     
                                                                     
WIRELINE NON-GAAP
RECONCILIATION
(Unaudited)
(Millions)
                        Quarter To Date                  Year To Date
                        6/30/13   3/31/13   6/30/12    6/30/13    6/30/12
                                                                     
Operating Income        $ 24       $ 27       $ 45       $ 51        $ 123
Severance and exit        -          3          -          3           -
costs ^(6)
Access costs ^ (10)       -          -          -          -           (17   )
Depreciation            105     98      104      203      204   
Adjusted OIBDA*         129     128     149      257      310   
Capital expenditures    93      61      79       154      124   
^(1)
Adjusted OIBDA* less   $ 36     $ 67     $ 70      $ 103     $ 186   
Capex
                                                                     
Adjusted OIBDA            14.2 %     14.3 %     15.0 %     14.3  %     15.6  %
Margin*

                                                                 
CONDENSED CONSOLIDATED CASH FLOW
INFORMATION (Unaudited)
(Millions)                 
                                                        Year to Date
                                                        6/30/13     6/30/12
Operating
Activities
Net loss                                                $ (2,240 )   $ (2,237 )
Depreciation
and                                                       3,124        3,562
amortization
Provision for
losses on                                                 182          269
accounts
receivable
Share-based
compensation                                              33           39
expense
Deferred                                                  76           84
income taxes
Equity in
losses of
unconsolidated                                            442          671
investments
and other, net
Contribution
to pension                                                -            (92    )
plan
Spectrum
hosting
contract                                                  -            (170   )
termination,
net ^ (9)
Other working
capital                                                   288          (33    )
changes, net
Other, net                                        270       62     
Net cash
provided by                                       2,175     2,155  
operating
activities
                                                                     
Investing
Activities
Capital
expenditures                                              (2,952 )     (1,711 )
^(1)
Expenditures
relating to                                               (123   )     (107   )
FCC licenses
Change in
short-term                                                1,009        (752   )
investments,
net
Acquisitions,
net of cash                                               (509   )     -
acquired
Investment in
Clearwire
(including                                                (240   )     (128   )
debt
securities)
Other, net                                        3         10     
Net cash used
in investing                                      (2,812 )   (2,688 )
activities
                                                                     
Financing
Activities
Proceeds from
debt and                                                  204          2,000
financings
Debt financing                                            (11    )     (57    )
costs
Repayments of
debt and                                                  (362   )     (1,004 )
capital lease
obligations
Other, net                                        51        7      
Net cash (used
in) provided                                      (118   )   946    
by financing
activities
                                                                     
Net (Decrease)
Increase in                                               (755   )     413
Cash and Cash
Equivalents
                                                                     
Cash and Cash
Equivalents,                                      6,351     5,447  
beginning of
period
                                                                     
Cash and Cash
Equivalents,                                            $ 5,596      $ 5,860
end of period
                                                                     
                                                                     
RECONCILIATION
TO
CONSOLIDATED
FREE CASH
FLOW*
(NON-GAAP)
(Unaudited)
(Millions)
                 Quarter Ended                         Year to Date
                 6/30/13     3/31/13     6/30/12     6/30/13     6/30/12
                                                                     
Net Cash
Provided by      $ 1,235      $ 940        $ 1,177      $ 2,175      $ 2,155
Operating
Activities
                                                                     
Capital
expenditures       (1,571 )     (1,381 )     (928   )     (2,952 )     (1,711 )
^(1)
Expenditures
relating to        (68    )     (55    )     (51    )     (123   )     (107   )
FCC licenses,
net
Other
investing        -         3         11        3         10     
activities,
net
Free Cash        (404   )   (493   )   209       (897   )   347    
Flow*
                                                                     
Debt financing     (1     )     (10    )     (21    )     (11    )     (57    )
costs
(Decrease)
increase in        (303   )     145          (1,002 )     (158   )     996
debt and
other, net
Acquisitions,
net of cash        (509   )     -            -            (509   )     -
acquired
Investment in
Clearwire
(including         (160   )     (80    )     -            (240   )     (128   )
debt
securities)
Other
financing        44        7         4         51        7      
activities,
net
Net (Decrease)
Increase in
Cash, Cash      $ (1,333 )  $ (431   )  $ (810   )  $ (1,764 )  $ 1,165  
Equivalents
and Short-Term
Investments

                                                             
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
                                                     6/30/13    12/31/12 
Assets
Current assets
Cash and cash equivalents                           $ 5,596       $ 6,351
Short-term investments                                840           1,849
Accounts and notes receivable, net                    3,413         3,658
Device and accessory inventory                        899           1,200
Deferred tax assets                                   -             1
Prepaid expenses and other current assets        651        700      
Total current assets                                  11,399        13,759
                                                                  
Investments and other assets                          1,580         1,833
Property, plant and equipment, net                    14,403        13,607
Goodwill                                              368           359
FCC licenses and other                                21,370        20,677
Definite-lived intangible assets, net            1,241      1,335    
Total                                           $ 50,361    $ 51,570   
                                                                  
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable                                    $ 3,560       $ 3,487
Accrued expenses and other current                    5,588         5,008
liabilities
Current portion of long-term debt,                    305           379
financing and capital lease obligations
Deferred tax liabilities                         36         -        
Total current liabilities                             9,489         8,874
                                                                  
Long-term debt, financing and capital lease           23,903        23,962
obligations
Deferred tax liabilities                              7,176         7,047
Other liabilities                                4,813      4,600    
Total liabilities                                45,381     44,483   
                                                                  
Shareholders' equity
Common shares                                         6,048         6,019
Paid-in capital                                       47,056        47,016
Accumulated deficit                                   (47,056 )     (44,815  )
Accumulated other comprehensive loss             (1,068  )   (1,133   )
Total shareholders' equity                       4,980      7,087    
Total                                           $ 50,361    $ 51,570   
                                                                  
                                                                  
NET DEBT* (NON-GAAP) (Unaudited)
(Millions)
                                                     6/30/13    12/31/12 
                                                                  
Total Debt                                          $ 24,208      $ 24,341
Less: Cash and cash equivalents                       (5,596  )     (6,351   )
Less: Short-term investments                     (840    )   (1,849   )
Net Debt*                                       $ 17,772    $ 16,141   

                                                              
SCHEDULE OF DEBT (Unaudited)
(Millions)
                                                                    6/30/13
ISSUER                                     COUPON    MATURITY     PRINCIPAL
Sprint Nextel Corporation
Export Development Canada Facility         4.196  %   12/15/2015    $ 500
(Tranche 2)
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
1% Convertible Bond due 2019               1.000  %   10/15/2019      3,100
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 Nextel Corporation                                     16,880 
                                                                    
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  
                                                                    
iPCS Inc.
Second Lien Senior Secured Floating     3.524  %  05/01/2014    181    
Rate Notes due 2014
iPCS Inc.                                                     181    
                                                                    
EKN Secured Equipment Facility ($1         2.030  %   03/30/2017      445
Billion)
                                                                    
Tower financing obligation                 9.500  %   01/15/2030      696
Capital lease obligations and other              2014 - 2022   67     
TOTAL PRINCIPAL                                               24,473 
                                                                    
Net discount from beneficial
conversion feature on convertible                                     (229   )
bond
Net discounts                                                 (36    )
TOTAL DEBT                                                   $ 24,208 


Supplemental information:

The Company had $2.1 billion of borrowing capacity available under our
unsecured revolving bank credit facility as of June 30, 2013. Our unsecured
revolving bank credit facility expires in February 2018. The company was
limited by a restriction of debt incurrence in one of our debt issuances.
However, this restriction was substantially mitigated by, among other things,
the close of the SoftBank Merger in July 2013.

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)
      
        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 $13 million, $15 million and $28 million for
^(1)    the second and first quarter and year-to-date periods of 2013,
        respectively, and $102 million, $115 million, and $217 million for the
        second and first 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*.
        
        Postpaid subscribers on the Sprint platform are defined as retail
        postpaid subscribers on the CDMA network, including subscribers with
        PowerSource devices, and those utilizing WiMax and LTE technology.
^(2)    Postpaid subscribers 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 who had not
        deactivated or been recaptured on the Sprint platform.
        
        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
^(3)    offerings. Prepaid subscribers 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 who had
        not deactivated or been recaptured on the Sprint platform.
        
        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
^(4)    subscribers on the postpaid or prepaid Sprint platform, respectively.
        Subscribers that deactivate service from the Nextel platform and
        activate service on the Sprint platform are included in the Sprint
        platform net additions for the applicable period.
        
        The Postpaid and Prepaid Nextel Recapture Rates are defined as the
^(5)    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.
        
^(6)    Severance and lease exit costs are primarily associated with workforce
        reductions and with exit costs associated with the Nextel platform.
        
^(7)    For the first quarter of 2012, gains from asset dispositions and
        exchanges are primarily due to spectrum exchange transactions.
        
        For the first quarter of 2012, asset impairment and abandonment
^(8)    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.
        
        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
^(9)    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.
        
        Favorable developments during the first quarter of 2012 relating to
^(10)   disagreements with local exchange carriers resulted in a reduction in
        expected access costs of $17 million.
        
        For the first quarter of 2013, litigation activity is primarily a
^(11)   result of favorable developments in connection with a tax (non-income)
        related contingency.
        
        For the second quarter of 2013, included in selling, general and
^(12)   administrative expenses are fees paid to unrelated parties necessary
        for the proposed transactions with SoftBank and our acquisition of
        Clearwire.
        

*FINANCIAL MEASURES

Sprint provides financial measures determined in accordance with accounting
principles generally accepted in the United States (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:

OIBDA is operating income/(loss) before depreciation and amortization.
Adjusted OIBDA is OIBDA excluding severance, exit costs, and other special
items. Adjusted OIBDA Margin represents Adjusted OIBDA divided by
non-equipment net operating revenues for Wireless and Adjusted OIBDA divided
by net operating revenues for Wireline. We believe that Adjusted OIBDA and
Adjusted OIBDA 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 OIBDA and Adjusted OIBDA 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 and amounts included
as investments in Clearwire 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 network
performance, 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 multimode technologies; customer and network usage; customer growth and
retention; service, 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 the company’s Annual
Report on Form 10-K for the year ended December 31, 2012 and when filed, our
Quarterly Report on Form 10-Q for the quarter ended June 30, 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 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 53 million customers at the end of
the second quarter 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; offering
industry-leading mobile data services, 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. Newsweek ranked Sprint No. 3 in both its 2011 and 2012
Green Rankings, listing it as one of the nation’s greenest companies, the
highest of any telecommunications company. You can learn more and visit Sprint
at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.

Contact:

Sprint Corporation
Media Contact:
Doug Duvall, 571-287-8153
douglas.duvall@sprint.com
or
Investor Contact:
Brad Hampton, 800-259-3755
investor.relations@sprint.com
 
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