Sprint - Nextel 2014 Annual Report Download - page 94

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-11
Note 1. Description of Operations
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.
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 or lease of wireless devices and the sale of 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.
On July 9, 2013 (Clearwire Acquisition Date), Sprint Communications completed the acquisition of the remaining
equity interests in Clearwire (as defined below) that it did not already own for approximately $3.5 billion, net of cash
acquired, or $5.00 per share (Clearwire Acquisition). The consideration paid was allocated to assets acquired and liabilities
assumed based on their estimated fair values at the Clearwire Acquisition Date. The effects of the Clearwire Acquisition are
included in the Predecessor period financial information and are therefore included in the allocation of the consideration
transferred at the SoftBank Merger Date (as defined below).
On July 10, 2013 (SoftBank Merger Date), 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, we changed our fiscal
year end to March 31, effective March 31, 2014. As a result, this annual report also includes the three-month transition period
of January 1, 2014 through March 31, 2014 as well as the comparable three-month unaudited period of January 1, 2013
through March 31, 2013. References herein to fiscal year 2014 and 2015 refer to the twelve-month periods ending March 31,
2015 and 2016, respectively. 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 represents the
activity and accounts of Sprint Corporation, which includes the activity and accounts of Starburst II prior to the SoftBank
Merger Date and Sprint Communications, inclusive of the consolidation of Clearwire Corporation and its wholly-owned
subsidiary Clearwire Communications LLC (together, "Clearwire"), prospectively following the SoftBank Merger Date
beginning on July 11, 2013 (Post-merger period). The accounts and operating activity of Starburst II prior to the SoftBank
Merger Date 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 Date. As a result of the valuation of
assets acquired and liabilities assumed at fair value at the SoftBank Merger Date, 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.