Sprint - Nextel 2014 Annual Report Download - page 126

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-43
Per Share Data
Basic net loss per common share is calculated by dividing net loss by the weighted average number of common
shares outstanding during the period. Diluted net loss per common share adjusts basic net loss per common share, computed
using the treasury stock method, for the effects of potentially dilutive common shares, if the effect is not antidilutive.
Outstanding options and restricted stock units (exclusive of participating securities) that had no effect on our computation of
dilutive weighted average number of shares outstanding as their effect would have been antidilutive were approximately 56
million, 60 million and 70 million as of the Successor periods ended March 31, 2015, March 31, 2014, and December 31,
2013, respectively, and 61 million, 74 million and 78 million shares for the Predecessor 191-day period ended July 10, 2013,
unaudited three-month period ended March 31, 2013 and year ended December 31, 2012, respectively. In addition, as of all
periods subsequent to the SoftBank Merger, all 55 million shares issuable under the warrant which was issued to SoftBank at
the close of the SoftBank Merger were treated as potentially dilutive securities but did not impact our computation of dilutive
weighted average number of shares outstanding as their effect would have been antidilutive. The warrant is exercisable at
$5.25 per share at the option of Softbank, in whole or in part, at any time within the five-year term.
Note 14. Segments
Sprint operates two reportable segments: Wireless and Wireline.
• Wireless primarily includes retail, wholesale, and affiliate 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.
• Wireline primarily 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 services provided over cable facilities primarily to residential end-use subscribers.
We define segment earnings as wireless or wireline operating (loss) income before other segment expenses such
as depreciation, amortization, severance, exit costs, goodwill impairments, asset impairments, and other items, if any, solely
and directly attributable to the segment representing items of a non-recurring or unusual nature. Expense and income items
excluded from segment earnings are managed at the corporate level. Transactions between segments are generally accounted
for based on market rates, which we believe approximate fair value. The Company generally re-establishes these rates at the
beginning of each calendar year. Over the past several years, there has been an industry-wide trend of lower rates due to
increased competition from other wireline and wireless communications companies as well as cable and Internet service
providers.