Sprint Earnings 2019-12-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

—————————————————————

FORM 10-Q

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☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2019



☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File number 1-04721

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SPRINT CORPORATION

(Exact name of registrant as specified in its charter)

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Delaware			46-1170005
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

6200 Sprint Parkway,	Overland Park,	Kansas	66251
(Address of principal executive offices)			(Zip Code)

Registrant's telephone number, including area code: (913) 794-1091

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value	S	New York Stock Exchange

—————————————————————

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

COMMON SHARES OUTSTANDING AT JANUARY 24, 2020:



Sprint Corporation Common Stock	4,111,432,945

Table of Contents

SPRINT CORPORATION

TABLE OF CONTENTS



		Page Reference
Item	PART I — FINANCIAL INFORMATION
1.	Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive (Loss) Income	2
	Consolidated Statements of Cash Flows	3
	Consolidated Statements of Changes in Equity	4
	Notes to the Consolidated Financial Statements	6
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	44
3.	Quantitative and Qualitative Disclosures About Market Risk	66
4.	Controls and Procedures	66


	PART II — OTHER INFORMATION
1.	Legal Proceedings	68
1A.	Risk Factors	68
2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
3.	Defaults Upon Senior Securities	69
4.	Mine Safety Disclosures	69
5.	Other Information	69
6.	Exhibits	71
Signature		73

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1.
Financial Statements (Unaudited)

SPRINT CORPORATION

CONSOLIDATED BALANCE SHEETS



	December 31,			March 31,
	2019			2019
	(in millions, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	3,179		$	6,982
Short-term investments	62			67
Accounts and notes receivable, net of allowance for doubtful accounts and deferred interest of $410 and $363, respectively	3,873			3,554
Device and accessory inventory	1,117			999
Prepaid expenses and other current assets	1,224			1,289
Total current assets	9,455			12,891
Property, plant and equipment, net	20,827			21,201
Costs to acquire a customer contract	1,808			1,559
Operating lease right-of-use assets	6,713			—
Intangible assets
Goodwill	4,598			4,598
FCC licenses and other	41,492			41,465
Definite-lived intangible assets, net	918			1,769
Other assets	1,091			1,118
Total assets	$	86,902		$	84,601
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	3,396		$	3,961
Accrued expenses and other current liabilities	3,335			3,597
Current operating lease liabilities	1,860			—
Current portion of long-term debt, financing and finance lease obligations	3,880			4,557
Total current liabilities	12,471			12,115
Long-term debt, financing and finance lease obligations	33,507			35,366
Long-term operating lease liabilities	5,423			—
Deferred tax liabilities	7,038			7,556
Other liabilities	2,708			3,437
Total liabilities	61,147			58,474
Commitments and contingencies
Stockholders' equity:
Common stock, voting, par value $0.01 per share, 9.0 billion authorized, 4.112 billion and 4.081 billion issued, respectively	41			41
Paid-in capital	28,402			28,306
Treasury shares, at cost	(9		)	—
Accumulated deficit	(2,226		)	(1,883		)
Accumulated other comprehensive loss	(453		)	(392		)
Total stockholders' equity	25,755			26,072
Noncontrolling interests	—			55
Total equity	25,755			26,127
Total liabilities and equity	$	86,902		$	84,601

See Notes to the Consolidated Financial Statements

Table of Contents

SPRINT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME



	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2019			2018			2019			2018
	(in millions, except per share amounts)
Net operating revenues:
Service	$	5,416		$	5,699		$	16,252		$	17,201
Equipment sales	1,372			1,589			3,784			4,180
Equipment rentals	1,292			1,313			3,981			3,778
	8,080			8,601			24,017			25,159
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	1,718			1,648			5,203			5,019
Cost of equipment sales	1,646			1,734			4,346			4,521
Cost of equipment rentals (exclusive of depreciation below)	201			182			666			457
Selling, general and administrative	2,045			2,003			5,888			5,731
Depreciation - network and other	1,071			1,088			3,256			3,132
Depreciation - equipment rentals	1,011			1,137			3,096			3,454
Amortization	474			145			698			475
Other, net	(152		)	185			106			298
	8,014			8,122			23,259			23,087
Operating income	66			479			758			2,072
Other (expense) income:
Interest expense	(589		)	(664		)	(1,802		)	(1,934		)
Other (expense) income, net	(6		)	32			36			153
	(595		)	(632		)	(1,766		)	(1,781		)
(Loss) income before income taxes	(529		)	(153		)	(1,008		)	291
Income tax benefit (expense)	408			8			494			(56		)
Net (loss) income	(121		)	(145		)	(514		)	235
Less: Net loss (income) attributable to noncontrolling interests	1			4			9			(4		)
Net (loss) income attributable to Sprint Corporation	$	(120	)	$	(141	)	$	(505	)	$	231

Basic net (loss) income per common share attributable to Sprint Corporation	$	(0.03	)	$	(0.03	)	$	(0.12	)	$	0.06
Diluted net (loss) income per common share attributable to Sprint Corporation	$	(0.03	)	$	(0.03	)	$	(0.12	)	$	0.06
Basic weighted average common shares outstanding	4,109			4,078			4,098			4,050
Diluted weighted average common shares outstanding	4,109			4,078			4,098			4,110

Other comprehensive (loss) income, net of tax:
Net unrealized holding losses on securities and other	$	—		$	(2	)	$	(2	)	$	(9	)
Net unrealized holding gains (losses) on derivatives	4			(25		)	(23		)	(8		)
Net unrecognized net periodic pension and other postretirement benefits	(39		)	2			(36		)	5
Cumulative effect of accounting change	—			—			—			(8		)
Other comprehensive loss	(35		)	(25		)	(61		)	(20		)
Comprehensive (loss) income	$	(156	)	$	(170	)	$	(575	)	$	215

See Notes to the Consolidated Financial Statements

Table of Contents

SPRINT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Nine Months Ended
	December 31,
	2019			2018
	(in millions)
Cash flows from operating activities:
Net (loss) income	$	(514	)	$	235
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Asset impairments	231			—
Depreciation and amortization	7,050			7,061
Provision for losses on accounts receivable	435			278
Share-based and long-term incentive compensation expense	90			101
Deferred income tax (benefit) expense	(532		)	25
Amortization of long-term debt premiums, net	(47		)	(94		)
Loss on disposal of property, plant and equipment	692			642
Deferred purchase price from sale of receivables	—			(223		)
Other changes in assets and liabilities:
Accounts and notes receivable	(754		)	65
Inventories and other current assets	650			248
Operating lease right-of-use assets	1,280			—
Accounts payable and other current liabilities	(436		)	(530		)
Current and long-term operating lease liabilities	(1,433		)	—
Non-current assets and liabilities, net	(172		)	(601		)
Other, net	225			375
Net cash provided by operating activities	6,765			7,582
Cash flows from investing activities:
Capital expenditures - network and other	(3,360		)	(3,814		)
Capital expenditures - leased devices	(5,449		)	(5,739		)
Expenditures relating to FCC licenses	(24		)	(145		)
Proceeds from sales and maturities of short-term investments	79			6,619
Purchases of short-term investments	(74		)	(5,152		)
Proceeds from sales of assets and FCC licenses	819			416
Proceeds from deferred purchase price from sale of receivables	—			223
Proceeds from corporate owned life insurance policies	5			110
Other, net	(27		)	52
Net cash used in investing activities	(8,031		)	(7,430		)
Cash flows from financing activities:
Proceeds from debt and financings	4,731			6,416
Repayments of debt, financing and finance lease obligations	(7,188		)	(6,937		)
Debt financing costs	(12		)	(286		)
Proceeds from issuance of common stock, net	(29		)	281
Acquisition of noncontrolling interest	(33		)	—
Other, net	1			—
Net cash used in financing activities	(2,530		)	(526		)
Net decrease in cash, cash equivalents and restricted cash	(3,796		)	(374		)
Cash, cash equivalents and restricted cash, beginning of period	7,063			6,659
Cash, cash equivalents and restricted cash, end of period	$	3,267		$	6,285

See Notes to the Consolidated Financial Statements

Table of Contents

SPRINT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions)



	Nine Months Ended December 31, 2019
	Common Stock			Paid-in Capital			Treasury Shares					(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
	Shares	Amount					Shares		Amount
Balance, March 31, 2019	4,081	$	41	$	28,306		—		$	—		$	(1,883	)	$	(392	)	$	55		$	26,127
Net loss												(111		)				(3		)	(114		)
Other comprehensive loss, net of tax															(22		)				(22		)
Issuance of common stock, net	11			(15		)			(2		)										(17		)
Share-based compensation expense				35																	35
Other, net				(3		)															(3		)
Cumulative effect of accounting change												162									162
Balance, June 30, 2019	4,092	41		28,323			—		(2		)	(1,832		)	(414		)	52			26,168
Net loss												(274		)				(5		)	(279		)
Other comprehensive loss, net of tax															(4		)				(4		)
Issuance of common stock, net	16			(2		)	2		(14		)										(16		)
Share-based compensation expense				28																	28
Balance, September 30, 2019	4,108	41		28,349			2		(16		)	(2,106		)	(418		)	47			25,897
Net loss												(120		)				(1		)	(121		)
Other comprehensive loss, net of tax															(35		)				(35		)
Issuance of common stock, net	4			(3		)	(1	)	7												4
Share-based compensation expense				27																	27
Capital contribution by SoftBank				1																	1
Acquisition of noncontrolling interest⁽¹⁾				28														(46		)	(18		)
Balance, December 31, 2019	4,112	$	41	$	28,402		1		$	(9	)	$	(2,226	)	$	(453	)	$	—		$	25,755

_________________


(1)	On November 1, 2019, we acquired PRWireless PR, Inc’s. member shares in PRWireless Holdco, LLC for cash consideration of $33 million making Sprint the sole shareholder of PRWireless Holdco, LLC and removing the noncontrolling interest.

See Notes to the Consolidated Financial Statements

Table of Contents

SPRINT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions)



	Nine Months Ended December 31, 2018
	Common Stock			Paid-in Capital		Treasury Shares			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Noncontrolling Interests			Total Equity
	Shares	Amount		Paid-in Capital		Shares	Amount		(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Noncontrolling Interests			Total Equity
Balance, March 31, 2018	4,005	$	40	$	27,884	—	$	—	$	(1,255	)	$	(313	)	$	63		$	26,419
Net income (loss)									176						(3		)	173
Other comprehensive income, net of tax												4						4
Issuance of common stock, net	8			2		1

Price	6.05	EPS	-0
Shares	4,098	P/E	-47
MCap	24,793	P/FCF	3
Net Debt	33,384	EBIT	1,918
TEV	58,177	TEV/EBIT	30
TTM 2019-09-30, in MM, except price, ratios

10-Q	2019-12-31	Filed 2020-01-27
10-Q	2019-09-30	Filed 2019-11-12
10-Q	2019-06-30	Filed 2019-08-08
10-K	2019-03-31	Filed 2019-05-29
10-Q	2018-12-31	Filed 2019-01-31
10-Q	2018-09-30	Filed 2018-11-07
10-Q	2018-06-30	Filed 2018-08-07
10-K	2018-03-31	Filed 2018-05-24
10-Q	2017-12-31	Filed 2018-02-06
10-Q	2017-09-30	Filed 2017-11-02
10-Q	2017-06-30	Filed 2017-08-03
10-K	2017-03-31	Filed 2017-05-26
10-Q	2016-12-31	Filed 2017-02-06
10-Q	2016-09-30	Filed 2016-11-01
10-Q	2016-06-30	Filed 2016-08-09
10-K	2016-03-31	Filed 2016-05-17
10-Q	2015-12-31	Filed 2016-02-04
10-Q	2015-09-30	Filed 2015-11-09
10-Q	2015-06-30	Filed 2015-08-07
10-K	2015-03-31	Filed 2015-05-26
10-Q	2014-12-31	Filed 2015-02-05
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-08
10-K	2013-12-31	Filed 2014-02-24
10-Q	2013-09-30	Filed 2013-11-06
10-Q	2013-06-30	Filed 2013-08-05
10-Q	2013-03-31	Filed 2013-05-06
10-K	2012-12-31	Filed 2013-02-28
10-Q	2012-09-30	Filed 2012-11-07
10-Q	2012-06-30	Filed 2012-08-02
10-Q	2012-03-31	Filed 2012-05-03
10-Q	2011-09-30	Filed 2011-11-03
10-Q	2011-06-30	Filed 2011-08-04
10-Q	2011-03-31	Filed 2011-05-05
10-Q	2010-06-30	Filed 2010-08-05
10-Q	2010-03-31	Filed 2010-05-05
10-K	2009-12-31	Filed 2010-02-26

8-K	2020-04-01
8-K	2020-02-20
8-K	2020-02-11
8-K	2020-02-03
8-K	2020-01-30
8-K	2020-01-29
8-K	2020-01-27
8-K	2020-01-24
8-K	2019-11-04
8-K	2019-08-02
8-K	2019-07-26
8-K	2019-06-07
8-K	2019-05-20
8-K	2019-05-16
8-K	2019-05-07
8-K	2019-04-27
8-K	2019-01-31
8-K	2018-12-17
8-K	2018-12-03
8-K	2018-11-26
8-K	2018-10-31
8-K	2018-10-30
8-K	2018-08-07
8-K	2018-08-01
8-K	2018-06-29
8-K	2018-06-06
8-K	2018-05-23
8-K	2018-05-18
8-K	2018-05-14
8-K	2018-05-02
8-K	2018-05-01
8-K	2018-04-29
8-K	2018-03-21
8-K	2018-03-14
8-K	2018-03-12
8-K	2018-02-20
8-K	2018-02-09
8-K	2018-02-02
8-K	2018-01-16
8-K	2018-01-02

EX-4.1	sprintcorpdec-2019ex41.htm
EX-31.1	sprintcorpdec-2019ex311.htm
EX-31.2	sprintcorpdec-2019ex312.htm
EX-32.1	sprintcorpdec-2019ex321.htm
EX-32.2	sprintcorpdec-2019ex322.htm

S 10Q Quarterly Report

Sprint Earnings 2019-12-31