Sprint - Nextel 2013 Annual Report Download - page 3

Table of Contents
SPRINT CORPORATION
SECURITIES AND EXCHANGE COMMISSION
ANNUAL REPORT ON FORM 10 - K
PART I
FORMATION
Sprint Corporation, incorporated in 2012 under the laws of Delaware, is mainly a holding company, with its operations primarily conducted by its
subsidiaries. Our common stock trades on the New York Stock Exchange (NYSE) under the symbol "S."
On July 10, 2013, SoftBank Corp. and certain of its wholly
- owned subsidiaries (together, "SoftBank") completed the merger (SoftBank Merger) with
Sprint Nextel Corporation, a Kansas corporation, organized in 1938 (Sprint Nextel) as 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). Pursuant to
the Bond Agreement, Sprint Communications, Inc. issued a convertible bond (Bond) to Starburst II, Inc. (Starburst II), a wholly
- owned subsidiary of SoftBank,
with a principal amount of
$3.1 billion , interest rate of 1%, and maturity date of October 15, 2019, which was converted into 590,476,190 shares of Sprint
Communications, Inc. common stock at
$5.25 per share immediately prior to the close of the SoftBank Merger. As a result of the SoftBank Merger, Starburst II
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.
As a result of the completion of the SoftBank Merger and subsequent open market stock purchases, SoftBank owns approximately
80% of the
outstanding voting common stock of Sprint Corporation. The SoftBank Merger consideration totaled approximately
$22.2 billion , consisting primarily of cash
consideration of
$14.1 billion , net of cash acquired of $2.5 billion and the estimated fair value of the 22% interest in Sprint Corporation issued to the then existing
stockholders of Sprint Communications, Inc. The preliminary allocation of consideration paid was based on management's judgment after evaluating several
factors, including a preliminary valuation assessment. The close of the transaction provided additional equity funding of $5.0 billion, consisting of
$3.1 billion
received by Sprint Communications, Inc. in October 2012 related to the Bond, which automatically converted to equity immediately prior to the close of the
SoftBank Merger, and
$1.9 billion cash consideration at closing of the SoftBank Merger.
Successor and Predecessor Periods and Reporting Obligations
In connection with the close of the SoftBank Merger (as described above), 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. The financial information herein, distinguishes 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. 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.
OVERVIEW
Sprint Corporation and its 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. 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, and references to "Sprint Communications" are to Sprint Communications, Inc. and its consolidated
subsidiaries. Our operations are organized to meet the needs of
1
Item 1.
Business