Sprint - Nextel 2013 Annual Report Download - page 128

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Sprint Corporation, including its consolidated subsidiaries, is a communications company offering a comprehensive range of wireless and wireline
communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. We
have organized our operations to meet the needs of our targeted subscriber groups through focused communications solutions that incorporate the capabilities
of our wireless and wireline services.
The Wireless segment includes retail, wholesale, and affiliate service revenue from a wide array of wireless voice and data transmission services and
equipment revenue from the sale of wireless devices and accessories in the U.S., Puerto Rico and the U.S. Virgin Islands.
The Wireline segment includes revenue from domestic and international wireline voice and data communication services, including services to the
cable multiple systems operators that resell our local and long distance services and use our back office systems and network assets in support of their
telephone service provided over cable facilities primarily to residential end
- use subscribers.
On July 10, 2013, SoftBank Corp. and certain of its wholly
- owned subsidiaries (together, "SoftBank") completed the merger (SoftBank Merger) with
Sprint Nextel Corporation (Sprint Nextel) contemplated by the Agreement and Plan of Merger, dated as of October 15, 2012 (as amended, the Merger Agreement)
and the Bond Purchase Agreement, dated as of October 15, 2012 (as amended, the Bond Agreement). As a result of the SoftBank Merger, Starburst II, Inc.
(Starburst II), a wholly
- owned subsidiary of SoftBank became the parent company of Sprint Nextel. Immediately thereafter, Starburst II changed its name to
Sprint Corporation and Sprint Nextel changed its name to Sprint Communications, Inc. In addition, in connection with the closing of the SoftBank Merger, Sprint
Corporation became the successor registrant to Sprint Nextel under Rule 12g
- 3 of the Securities Exchange Act of 1934 (Exchange Act) and is the entity subject
to the reporting requirements of the Exchange Act for filings with the Securities and Exchange Commission (SEC) subsequent to the close of the SoftBank
Merger. In addition, in order to align with SoftBank
’ s reporting schedule, our Board of Directors have approved a change in our fiscal year end to March 31,
effective March 31, 2014. As a result, we expect to file an additional Annual Report on Form 10
- K for the transition period from January 1, 2014 to March 31,
2014. See Note 3. Significant Transactions for additional information regarding the SoftBank Merger and related transactions. Unless the context otherwise
requires, references to "Sprint," "we," "us," "our" and the "Company" mean Sprint Corporation and its consolidated subsidiaries for all periods presented,
inclusive of Successor and Predecessor periods described below, and references to "Sprint Communications" are to Sprint Communications, Inc. and its
consolidated subsidiaries.
In connection with the change of control, as a result of the SoftBank Merger, Sprint Communications' assets and liabilities were adjusted to fair value
on the closing date of the SoftBank Merger. The consolidated financial statements distinguish between the predecessor period (Predecessor) relating to Sprint
Communications for periods prior to the SoftBank Merger and the successor period (Successor) relating to Sprint Corporation, formerly known as Starburst II,
for periods subsequent to the incorporation of Starburst II on October 5, 2012. The Successor financial information includes the activity and accounts of Sprint
Corporation as of and for the year ended
December 31, 2013 , which includes the activity and accounts of Sprint Communications, inclusive of the consolidation
of Clearwire Corporation (Clearwire), prospectively for the 174
- day period following completion of the SoftBank Merger (Post - merger period), beginning on July
11, 2013. The accounts and operating activity for the Successor periods from October 5, 2012 (date of inception) to December 31, 2012 and from January 1, 2013
to July 10, 2013 consist solely of the activity of Starburst II prior to the close of the SoftBank Merger, which primarily related to merger expenses that were
incurred in connection with the SoftBank Merger (recognized in selling, general and administrative expense) and interest related to the
$3.1 billion convertible
bond (Bond) Sprint Communications, Inc. issued to Starburst II. The Predecessor financial information represents the historical basis of presentation for Sprint
Communications for all periods prior to the SoftBank Merger. As a result of the preliminary valuation of assets acquired and liabilities assumed at fair value at
the time of the SoftBank Merger, the financial statements for the Successor period are presented on a measurement basis different than the Predecessor period
(Sprint Communications historical cost) and are, therefore, not comparable. See Note 3. Significant Transactions for additional information regarding the
SoftBank Merger.
F - 10
Note 1.
Description of Operations