Sprint - Nextel 2013 Annual Report Download - page 34

Table of Contents
Consolidated Results of Operations
The following table provides the combined consolidated results of operations for the year ended
December 31, 2013 , the Successor year ended
December 31, 2013 and 87 days ended December 31, 2012 , the Predecessor 191 - day period ended July 10, 2013, and the Predecessor years ended December 31,
2012 and 2011 . The Predecessor information represents the historical basis of presentation for Sprint Communications for all periods prior to the SoftBank
Merger. The Successor period includes the operating activity of Sprint Corporation for the years ended
December 31, 2013 and 2012 as well as Sprint
Communications, inclusive of Clearwire, prospectively from the date of the SoftBank Merger on July 10, 2013 through
December 31, 2013 .
Depreciation Expense
Successor Year Ended December 31, 2013 and Predecessor Years Ended December 31, 2012 and 2011
Depreciation expense decreased
$4.2 billion , or 68% , for the Successor year ended December 31, 2013 as compared to the Predecessor year ended
December 31, 2012 primarily due to comparing results for the shortened Post - merger period to a period consisting of a full calendar year. In addition, the
decrease in depreciation expense was driven by accelerated depreciation expense recognized in 2012 from our network modernization described below, with no
such accelerated depreciation in the Successor year ended
December 31, 2013 and asset revaluations as a result of the SoftBank Merger. These decreases were
partially offset by increased depreciation expense on assets acquired as a result of the Clearwire Acquisition and asset additions primarily related to network
initiatives.
Depreciation expense increased $1.8 billion, or 40%, in 2012 compared to 2011. Our network modernization resulted in incremental charges during the
period of implementation including, but not limited to, an increase in depreciation associated with existing assets related to both the Nextel and Sprint platforms,
due to changes in our estimates of the remaining useful lives of long
- lived assets, and the expected timing and amount of asset retirement obligations. In 2012,
the incremental effect of accelerated depreciation due to our network
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Increased income tax expense was primarily attributable to taxable temporary differences as a result of the $2.9 billion gain on the previously - held
equity interests in Clearwire, which was principally attributable to the increase in the fair value of Federal Communications Commission (FCC)
licenses held by Clearwire and from amortization of FCC licenses. FCC licenses are amortized over 15 years for income tax purposes but, because
these licenses have an indefinite life, they are not amortized for financial statement reporting purposes.
Combined
Successor
Predecessor
Year Ended
December 31,
Year Ended
December 31,
87 Days Ended
December 31,
191 Days Ended
July 10,
Years Ended
December 31,
2013
2013
2012
2013
2012
2011
(in millions)
Wireless segment earnings
$
4,948
$
2,178
$
—
$
2,770
$
4,147
$
4,267
Wireline segment earnings
494
222
—
272
649
800
Corporate, other and eliminations
(33
)
(34
)
(33
)
1
7
5
Consolidated segment earnings (loss)
5,409
2,366
(33
)
3,043
4,803
5,072
Depreciation
(5,124
)
(2,026
)
—
(3,098
)
(6,240
)
(4,455
)
Amortization
(1,055
)
(908
)
—
(147
)
(303
)
(403
)
Other, net
(1,085
)
(402
)
—
(683
)
(80
)
(106
)
Operating (loss) income
(1,855
)
(970
)
(33
)
(885
)
(1,820
)
108
Interest expense
(2,053
)
(918
)
—
(1,135
)
(1,428
)
(1,011
)
Equity in losses of unconsolidated investments, net
(482
)
—
—
(482
)
(1,114
)
(1,730
)
Gain on previously-held equity interests
2,926
—
—
2,926
—
—
Other income (expense), net
92
73
10
19
190
(3
)
Income tax expense
(1,646
)
(45
)
(4
)
(1,601
)
(154
)
(254
)
Net loss
$
(3,018
)
$
(1,860
)
$
(27
)
$
(1,158
)
$
(4,326
)
$
(2,890
)