Sprint - Nextel 2015 Annual Report Download

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
—————————————————————
FORM 10-K
—————————————————————
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2016
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File number 1-04721
—————————————————————
SPRINT CORPORATION
(Exact name of registrant as specified in its charter)
—————————————————————
Delaware 46-1170005
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
6200 Sprint Parkway, Overland Park, Kansas 66251
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (855) 848-3280
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common stock, $0.01 par value
New York Stock Exchange
—————————————————————
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act
Large accelerated filer xAccelerated filer o
Non-accelerated filer (Do not check if smaller reporting company) oSmaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x
Aggregate market value of voting and non-voting common stock equity held by non-affiliates of Sprint Corporation at September 30, 2015 was $2,342,009,176
COMMON STOCK OUTSTANDING AT MAY 13, 2016 : 3,974,592,358 shares

Table of contents

  • Page 1
    ... is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x Aggregate market value of voting and non-voting common stock equity held by non-affiliates of Sprint Corporation at September 30, 2015 was $2,342,009,176 COMMON STOCK OUTSTANDING AT MAY 13, 2016 : 3,974,592,358 shares

  • Page 2
    ... about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of...

  • Page 3
    ... in Sprint Corporation, and subsequent open market stock purchases, SoftBank owned approximately 83% of the outstanding common stock of Sprint Corporation as of March 31, 2016 . Successor and Predecessor Periods and Reporting Obligations In connection with the close of the SoftBank Merger (as...

  • Page 4
    ..., real-time and reliable wireless two-way data connection across a broad range of connected devices. Services and Products Data & Voice Services Wireless data communications services are provided throughout the U.S. and include mobile productivity applications, such as Internet access, messaging and...

  • Page 5
    ... LTE wireless technologies. We served customers utilizing WiMAX technology until the network was shutdown on March 31, 2016. Our 3G CDMA wireless technology uses a digital spread-spectrum technique that allows a large number of users to access the band by assigning a code to all voice and data bits...

  • Page 6
    ... cost of the device will be offset by future service revenue. Wireless carriers now also offer plans that allow subscribers to purchase or lease a device at or near full retail price in exchange for lower monthly service fees, early upgrade options, or both. AT&T, Verizon Wireless and T-Mobile also...

  • Page 7
    ... our costs. The FCC does not currently regulate rates for services offered by commercial mobile radio service (CMRS) providers, and states are legally preempted from regulating such rates and entry into any market, although states may regulate other terms and conditions. The Communications Act...

  • Page 8
    ...applicable FCC rules and policies and the Communications Act. 2.5 GHz License Conditions We hold licenses for or lease spectrum located within the 2496 to 2690 MHz band, commonly referred to as the 2.5 GHz band, which is designated for Broadband Radio Services (BRS) and Educational Broadband Service...

  • Page 9
    ... of, or the rates charged by, wireless carriers, certain state PUCs and local governments regulate customer billing, termination of service arrangements, advertising, certification of operation, use of handsets when driving, service quality, sales practices, management of customer call records and...

  • Page 10
    ... The FCC has opened several proceedings to address issues of consumer protection, including the use of early termination fees, "bill shock" ( i.e. , overage charges for voice, data and text usage) and has proposed new rules to address cramming. The wireless industry has proactively addressed many of...

  • Page 11
    ...annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed with or furnished to the SEC under the Exchange Act. These documents may be accessed free of charge on our website at the following address: http://www.sprint.com/investors...

  • Page 12
    ... of mobile devices into a global business with more than $10 billion in gross revenue for the year ended 2013. Mr. Claure serves as vice chairman of the board of directors of CTIA-The Wireless Association. He also is a member of the board of directors of My Brother's Keeper Alliance. Chief Financial...

  • Page 13
    ... USA, Boost Mobile and Assurance Wireless as well as Sprint's overall Wholesale business. Previously, he was Senior Vice President and General Manager of Retail for CLEAR, the retail brand of Clearwire, where he oversaw the brand's sales, marketing, customer care and product development. He served...

  • Page 14
    ... a director on its Mergers and Acquisitions team. Before joining Sprint, Mr. Schieber was a senior manager with the public accounting firm Ernst & Young, where he worked as an auditor and a tax consultant. In addition, he served as corporate controller for a small publicly held company. 12 2013 58

  • Page 15
    ...wireless service plans without any long-term commitment. Furthermore, some service providers are reimbursing contract termination fees, including paying off the outstanding balance on devices, incurred by new customers in connection with such customers terminating service with their current wireless...

  • Page 16
    ... contract payable over a period of up to 24 months. Subscribers who take advantage of these plans are no longer required to sign a fixed-term service contract to obtain postpaid service; rather, their service is provided on a month to month contract basis with no early termination fee. These service...

  • Page 17
    ... business model. Subscribers who have financed their devices through these plans have the option to pay for their devices in installments over a period of up to 24 months. This program subjects us to increased risks relating to consumer credit issues, which could result in increased costs, including...

  • Page 18
    ... and the prices that we will be able to charge for these services. As services, technology, and devices evolve, we also expect continued pressure on voice, text, and other service revenues. Rapid changes in technology may lead to the development of wireless communications technologies, products, or...

  • Page 19
    ... towers; the development and maintenance of certain systems necessary for the operation of our business; customer service, related support to our wireless subscribers, outsourcing aspects of our wireline network and back office functions; and to provide network equipment, handsets, devices...

  • Page 20
    ..., location data, or other personal information may be compromised by a malicious third-party penetration of our network security or impacted by advertent or inadvertent actions or inactions by our employees and agents. As a result, our subscribers' information may be lost, disclosed, accessed, used...

  • Page 21
    ..., including: • diversion of management attention from running our existing business; • possible material weaknesses in internal control over financial reporting; • increased costs to integrate the networks, spectrum, technology, personnel, subscriber base, and business practices of the company...

  • Page 22
    ... certain corporate opportunities that may be attractive to the Company. SoftBank's ability to eventually control our board of directors may make it difficult for us to recruit independent directors. For so long as SoftBank and its controlled affiliates hold shares of our common stock representing at...

  • Page 23
    ..., transmission-related equipment and network buildings. Item 3. Legal Proceedings In March 2009, a stockholder brought suit, Bennett v. Sprint Nextel Corp. , in the U.S. District Court for the District of Kansas, alleging that Sprint Communications and three of its former officers violated Section...

  • Page 24
    ... class actions typical for a large business enterprise and intellectual property matters, are possible or pending against us. If our interpretation of certain laws or regulations, including those related to various federal or state matters such as sales, use or property taxes, or other charges were...

  • Page 25
    ... of Sprint Corporation. We currently have no non-voting common stock outstanding. The high and low common stock prices, as reported on the NYSE composite, were as follows: Year Ended March 31, 2016 High Low Year Ended March 31, 2015 High Low Common stock market price First quarter Second quarter...

  • Page 26
    ... years ended March 31, 2015 and 2016. Because Sprint Corporation common stock did not commence trading until after the SoftBank Merger, the graph below reflects the cumulative total shareholder return on the Series 1 common stock of Sprint Communications, Inc., our predecessor, through July 10, 2013...

  • Page 27
    ... 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...

  • Page 28
    ...to You service that brings the Sprint store experience to our customers. We have demonstrated our value proposition through our new price plans, promotions, and payment programs and have deployed new local marketing and civic engagement initiatives in key markets. Our alternative financial structure...

  • Page 29
    ... financial information represents the historical basis of presentation for Sprint Communications for all periods prior to the SoftBank Merger. As a result of the SoftBank Merger, and in order to present Management's Discussion and Analysis in a way that offers investors a more meaningful period...

  • Page 30
    ... consideration transferred to assets acquired and liabilities assumed were based on estimated fair values as of the date of the SoftBank Merger, as described further in the Notes to the Consolidated Financial Statements. As a result, the following estimated impacts of purchase price accounting are...

  • Page 31
    ... the purchase accounting adjustment to unrecognized net periodic pension and other post-retirement benefits. Predecessor 191-Day Period Ended July 10, 2013 Significant changes in the underlying trends affecting the Company's consolidated results of operations and net loss for the 191 days ended July...

  • Page 32
    ...result of the SoftBank Merger in 2013. Amortization Expense Successor Year Ended March 31, 2016 and Successor Year Ended March 31, 2015 Amortization expense decreased $258 million , or 17% , in the year ended March 31, 2016 compared to the same period in 2015 , primarily due to customer relationship...

  • Page 33
    ... $216 million of severance primarily associated with reductions in our work force and $195 million of lease and access exit costs primarily associated with tower and cell site leases and backhaul access contracts for which we will no longer be receiving any economic benefit, of which $2 million...

  • Page 34
    ... in force and $8 million of lease exit costs associated with taking certain Nextel platform sites off-air. A favorable ruling by the Texas Supreme Court in connection with the taxation of E911 services resulted in a non-cash benefit of $22 million in the quarter ended March 31, 2013. Interest...

  • Page 35
    ...190-day period ended July 9, 2013, include a $65 million derivative loss associated with the change in fair value of the embedded derivative. Other income (expense), net The following table provides additional information on items included in "Other income (expense), net." Successor Year Ended March...

  • Page 36
    ...of sale along with the related cost of products, lease revenue is recorded monthly over the term of the lease and the cost of the device is depreciated to its estimated residual value generally over the lease term. During the years ended March 31, 2016 and 2015 , we leased devices through our Sprint...

  • Page 37
    ... usage charges and miscellaneous fees such as activation fees, directory assistance, roaming, equipment protection, late payment and early termination charges, and certain regulatory related fees, net of service credits. The ability of our Wireless segment to generate service revenue is primarily...

  • Page 38
    ... in revenues resulting from acquisitions in 2013. Approximately 53% of our total wholesale and affiliate subscribers represent connected devices. Successor Three-Month Transition Period Ended March 31, 2014 and Predecessor Three-Month Period Ended March 31, 2013 Retail service revenue slightly...

  • Page 39
    ... in the applicable service category. Changes in average monthly service revenue reflect subscribers for either the postpaid or prepaid service category who change rate plans, the level of voice and data usage, the amount of service credits which are offered to subscribers, plus the net effect of...

  • Page 40
    ... total subscribers, and (c) end of period connected device subscribers as of the end of each quarterly period beginning with the quarter ended March 31, 2013. March 31, 2013 June 30, 2013 Sept 30, 2013 Dec 31, 2013 March 31, 2014 June 30, 2014 Sept 30, 2014 Dec 31, 2014 March 31, 2015 June 30, 2015...

  • Page 41
    ...where the subscriber's service is terminated due to a lack of payment or other reasons. In the quarter ended June 30, 2015, the Company revised its prepaid subscriber reporting to remove one of its rules that matches customers who disconnect and then re-engage within a specified period of time. This...

  • Page 42
    ... Acquisition. Represents the recapture rate defined as the Nextel platform postpaid or prepaid subscribers, as applicable, that switched from the Nextel platform but activated service on the Sprint platform during each period over the total Nextel platform subscriber deactivations in the period for...

  • Page 43
    ...days in a limited number of states). However, subscribers could re-apply prior to being deactivated and also had the ability to receive bythe-minute service at their own expense. We deactivated the accounts of approximately 1.2 million subscribers in the quarter ended June 30, 2013 primarily related...

  • Page 44
    ... and variable costs relating to payments to third parties for the subscriber use of their proprietary data applications, such as messaging, music and cloud services and connected vehicle fees. Successor Year Ended March 31, 2016 and Successor Year Ended March 31, 2015 Cost of services increased $124...

  • Page 45
    ....) The net impact to equipment revenue and cost of products from the sale of devices under our installment billing program is relatively neutral except for the impact from the time value of money element related to the imputed interest on the installment receivables. Under the leasing program, lease...

  • Page 46
    ... ended March 31, 2014 compared to the same Predecessor period in 2013 . The increase in equipment revenue was primarily due to higher average sales prices per postpaid and prepaid device sold combined with the impact of a different revenue recognition model related to our installment billing program...

  • Page 47
    ... to the scheduled customer lease terms where customers did not return the devices to us. If customers continue to not return devices, we may have material losses in future periods. Similar charges are and have been incurred for devices sold under our subsidy program as equipment net subsidy. Segment...

  • Page 48
    ... represented 39% of total voice revenues for the Successor year ended March 31, 2016 compared to 31% in the year ended March 31, 2015 . Data Revenues Data revenues reflect sales of data services, primarily Private Line and managed network services bundled with non-IP-based data access. Data revenues...

  • Page 49
    ... represented 31% of total voice revenues for the Successor year ended March 31, 2015 compared to 33% in the Successor year ended December 31, 2013 . Data Revenues Data revenues reflect sales of data services, primarily Private Line and managed network services bundled with non-IP-based data access...

  • Page 50
    ...access costs paid to local phone companies, other domestic service providers and foreign phone companies to complete calls made by our domestic subscribers, costs to operate and maintain our networks, and costs of equipment. Successor Year Ended March 31, 2016 and Successor Year Ended March 31, 2015...

  • Page 51
    ... average revenue per subscriber, which was offset by the $1.5 billion increase in operating cash flows resulting from the net changes in accounts and notes receivables and Deferred Purchase Price (DPP) during the Successor year ended March 31, 2016 compared to the same period in 2015. In addition...

  • Page 52
    ...proceeds from sales and maturities of short-term investments and 2013 increases related to the SoftBank Merger of $14.1 billion, net of cash acquired. These decreases were partially offset by increased capital expenditures of $2.2 billion, which included $582 million of leased devices purchased from...

  • Page 53
    ... subject to the total availability under the Receivables Facility. Wireless service and installment receivables sold are treated as a sale of financial assets and Sprint derecognizes these receivables, as well as the related allowances, and recognizes the net proceeds received in cash provided by...

  • Page 54
    ... change in the fair value of the DPP. Wireless Service Receivable Sales On March 31, 2015, we sold approximately $1.8 billion of wireless service receivables in exchange for $500 million in cash (reflected within the change in accounts and notes receivable on the consolidated statement of cash...

  • Page 55
    ... device at the end of the customer lease term, to MLS in exchange for proceeds totaling $1.1 billion (Cash Purchase Price) and a DPP of $126 million. The difference between the fair value and the net book value of the devices sold was recognized as a loss on disposal of property, plant and equipment...

  • Page 56
    ...in May 2016, Sprint sold and leased-back approximately $1.3 billion in book value of leased devices for proceeds totaling $1.1 billion (Cash Purchase Price) and a DPP of $186 million , which will be settled at the end of the arrangement and is subject to certain device losses incurred by MLS. Credit...

  • Page 57
    ... credit facility, which will expire in 2018 and has no outstanding balance, (ii) all capital leases and other financing obligations, and (iii) net premiums and debt financing costs. Liquidity and Capital Resources As of March 31, 2016 , our liquidity, including cash and cash equivalents, short-term...

  • Page 58
    ... devices in exchange for lower monthly service fees, early upgrade options, or both. While a majority of the revenue associated with installment sales is recognized at the time of sale along with the related cost of products, lease revenue is recorded monthly over the term of the lease and the cost...

  • Page 59
    ... we may make to our pension plan; • any scheduled principal payments on debt, secured equipment credit facilities and EDC, including approximately $13.2 billion coming due over the next five fiscal years; • estimated residual values of devices related to our device lease program; and • other...

  • Page 60
    ... payments are based on management's expectations for future interest rates in the case of any variable rate debt. Represents capital lease payments including interest and financing obligation related to the sale and subsequent leaseback of multiple tower sites. Includes future lease payments related...

  • Page 61
    ... Lessees then sold the devices and transferred certain specified customer lease end rights and obligations to MLS in exchange for proceeds totaling $1.1 billion and a DPP of $126 million in December 2015. See the detailed Accounts Receivables Facility and Handset Sale-Leaseback Tranche 1 discussions...

  • Page 62
    ... unit using income-based, market-based and assetbased valuation models. The determination of the fair value of the reporting unit requires significant estimates and assumptions, including significant unobservable inputs. The key inputs included, but were not limited to, discount rates, terminal...

  • Page 63
    ... In May 2014, the Financial Accounting Standards Board (FASB) issued new authoritative literature, Revenue from Contracts with Customers. The issuance is part of a joint effort by the FASB and the International Accounting Standards Board (IASB) to enhance financial reporting by creating...

  • Page 64
    ... on our website at www.sprint.com/investors . Information contained on or accessible through our website is not part of this annual report. FORWARD-LOOKING STATEMENTS We include certain estimates, projections and other forward-looking statements in our annual, quarterly and current reports, and in...

  • Page 65
    ...change in the ability or willingness of such parties to provide service and products, including distribution, or infrastructure equipment for our network; • the costs and business risks associated with providing new services and entering new geographic markets; • the effects of any future merger...

  • Page 66
    ... have had an annual pre-tax impact of $26 million on our consolidated statements of operations and cash flows for the Successor year ended March 31, 2016 . We also perform a sensitivity analysis on the fair market value of our outstanding debt. A 10% decline in market interest rates is estimated to...

  • Page 67
    ... annual report on Form 10-K, is reported in accordance with the SEC's rules. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely...

  • Page 68
    ... is or may be a government-controlled entity. During the fiscal year ended March 31, 2016 , SoftBank had no gross revenues from such services and no net profit was generated. This subsidiary also provided telecommunications services in the ordinary course of business to accounts affiliated with the...

  • Page 69
    ...and Executive Officers" in our proxy statement relating to our 2016 annual meeting of stockholders, which will be filed with the SEC. Compensation Plan Information Currently we sponsor two active equity incentive plans, the 2015 Omnibus Incentive Plan (2015 Plan) and our Employee Stock Purchase Plan...

  • Page 70
    ..., each eligible employee may purchase common stock at quarterly intervals at a purchase price per share equal to 95% of the market value on the last business day of the offering period. Included in the total of 77,942,352 shares are 14,120,829 restricted stock units under the 2007 Plan, which will...

  • Page 71
    ...and Financial Statement Schedules The consolidated financial statements of Sprint Corporation filed as part of this annual report are listed in the Index to Consolidated Financial Statements. The consolidated financial statements of Clearwire Corporation through the date of acquisition filed as part...

  • Page 72
    ..., thereunto duly authorized. SPRINT CORPORATION (Registrant) By /s/ M ARCELO C LAURE Marcelo Claure Chief Executive Officer and President Date: May 17, 2016 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 73
    Table of Contents SIGNATURES SPRINT CORPORATION (Registrant) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 17 th day of May, 2016 . /s/ M ASAYOSHI S ON...

  • Page 74
    ... No. Exhibit Description Form SEC File No. Exhibit Filing Date Filed/Furnished Herewith (2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession 2.1** Agreement and Plan of Merger, dated as of October 15, 2012, by and among Sprint Nextel Corporation, SoftBank Corp., Starburst...

  • Page 75
    ... Sprint Corporation, Sprint Communications, Inc. and The Bank of New York Mellon Trust Company, N.A. Ninth Supplemental Indenture, dated as of June 26, 2014, by and between Bright PCS Holdings, Inc., Bright Personal Communications Services, LLC, Horizon Personal Communications, Inc., iPCS Equipment...

  • Page 76
    .../2015 (10) Material Contracts 10.1 Credit Agreement, dated as of February 28, 2013, by and among Sprint Nextel Corporation, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders named therein Incremental Amendment No. 1, dated as of April 2, 2013, to the Credit Agreement...

  • Page 77
    ...by Reference Exhibit No. Exhibit Description Form SEC File No. Exhibit Filing Date Filed/Furnished Herewith 10.6 Amended and Restated Receivables Purchase Agreement, dated as of April 24, 2015, among Sprint Spectrum L.P., individually and as Servicer, the Sellers party thereto, the various Conduit...

  • Page 78
    ... Form SEC File No. Exhibit Filing Date Filed/Furnished Herewith 10.16 Master Lease Agreement, dated as of March 31, 2016 (effective as of April 5, 2016), among the purchasers party thereto and the lessees party thereto Guaranty, dated as of March 31, 2016 (effective as of April 5, 2016), by Sprint...

  • Page 79
    ... Form SEC File No. Exhibit Filing Date Filed/Furnished Herewith 10.30 10.31 10.32 10.33 10.34 Amended Summary of 2014 Short-Term Incentive Compensation Plan Summary of 2014 Long-Term Incentive Plan STI and LTI Plan Information Form of Evidence of Award Agreement (awarding restricted stock units...

  • Page 80
    ...SEC File No. Exhibit Filing Date Filed/Furnished Herewith 10.45 Form of Award Agreement (awarding stock options) under the 2014 Long-Term Incentive Plan for executive officers with Sprint employment agreements Form of Award Agreement (awarding stock options) under the 2014 Long-Term Incentive Plan...

  • Page 81
    ... 6, 2013 by and between Sprint Corporation and Brandon Dow Draper Brandon Dow Draper Sign-On Award of Restricted Stock Units First Amendment to Employment Agreement, dated February 21, 2014, by and between Sprint Corporation and Brandon Dow Draper Employment Agreement, dated January 2, 2016, by...

  • Page 82
    ... Corporation Change in Control Severance Plan Sprint Corporation Deferred Compensation Plan, as amended and restated effective September 26, 2014 Executive Deferred Compensation Plan, as amended and restated effective January 1, 2008 Summary of Director Compensation Programs Director's Deferred Fee...

  • Page 83
    ... Form SEC File No. Exhibit Filing Date Filed/Furnished Herewith 10.93 10.94 10.95 10.96 10.97 10.98 Form of Award Agreement (awarding restricted stock units) under the 2007 Omnibus Incentive Plan for non-employee directors Form of Award Agreement (awarding restricted stock units) under the 2015...

  • Page 84
    ...Exhibit Description Form SEC File No. Exhibit Filing Date Filed/Furnished Herewith (101) Formatted in XBRL (Extensible Business Reporting Language)...Filed or furnished, as required. Schedules and/or exhibits not filed will be furnished to the SEC upon request, pursuant to Item 601(b)(2) of Regulation...

  • Page 85
    Table of Contents SPRINT CORPORATION Index to Consolidated Financial Statements Page Reference Sprint Consolidated Financial Statements Reports of Independent Registered Public Accounting Firms Successor Consolidated Balance Sheets as of March 31, 2016 and 2015 Successor Consolidated Statements of ...

  • Page 86
    ... financial statements, on July 10, 2013, SoftBank Corp. completed a merger with Sprint Communications, Inc. (formerly Sprint Nextel Corporation) by which Sprint Corporation was the acquiring company of Sprint Communications, Inc. and applied the acquisition method of accounting as of the merger date...

  • Page 87
    ... Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders Sprint Corporation: We have audited the accompanying consolidated statements of operations, comprehensive loss, cash flows and stockholders' equity of Sprint Communications...

  • Page 88
    ...Consolidated Financial Statements SPRINT CORPORATION CONSOLIDATED BALANCE SHEETS March 31, 2016 2015 (in millions, except share and per share data) ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts and notes receivable, net Device and accessory inventory Deferred tax...

  • Page 89
    ...Ended March 31, 2015 Three Months Ended March 31, 2014 2013 (Unaudited) Year Ended December 31, 2013 191 Days Ended July 10, 2013 Predecessor Three Months Ended March 31, 2013 (Unaudited) (in millions, except per share amounts) Net operating revenues: Service Equipment Net operating expenses: Cost...

  • Page 90
    ... Index to Consolidated Financial Statements SPRINT CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Successor Year Ended March 31, 2016 Year Ended March 31, 2015 Three Months Ended March 31, 2014 2013 (Unaudited) Year Ended December 31, 2013 191 Days Ended July 10, 2013 Predecessor Three...

  • Page 91
    ... net loss to net cash provided by (used in) operating activities: Impairments Depreciation and amortization Provision for losses on accounts receivable Share-based and long-term incentive compensation expense Deferred income tax expense (benefit) Equity in losses of unconsolidated investments, net...

  • Page 92
    ...Contents Index to Consolidated Financial Statements SPRINT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Successor Year Ended March 31, 2016 Year Ended March 31, 2015 2014 Three Months Ended March 31, 2013 (Unaudited) (in millions) Year Ended December 31, 2013 191 Days Ended July 10...

  • Page 93
    ...approximately 3 million shares of Class B common stock of Starburst II, Inc. issued and outstanding with an immaterial value. These shares were exchanged in connection with the issuance of common stock to SoftBank upon completion of the Merger. See Notes to the Consolidated Financial Statements F-9

  • Page 94
    ..., Plant and Equipment Intangible Assets Long-Term Debt, Financing and Capital Lease Obligations Severance and Exit Costs Supplemental Financial Information Income Taxes Commitments and Contingencies Stockholders' Equity and Per Share Data Segments Quarterly Financial Data Related-Party Transactions...

  • Page 95
    ... 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...

  • Page 96
    ... financial statements. Change in Estimate When estimating the value of returned inventory, we evaluate many factors and obtain information to support the estimated value of used devices and their useful lives. During the year ended March 31, 2015, we observed sustained value and extended useful...

  • Page 97
    ... FINANCIAL STATEMENTS government-sponsored debt securities, corporate debt securities, municipal securities, bank-related securities, and credit and debit card transactions in process. The carrying amounts approximate fair value. Installment Receivables Beginning in October 2015, Sprint sold...

  • Page 98
    ...improvements and network equipment, site costs and related software and 3 to 12 years for non-network internal use software, office equipment and other. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the respective assets. Leased devices are...

  • Page 99
    ...defined in the investment policy. Investments of the Plan are measured at fair value on a recurring basis which is determined using quoted market prices or estimated fair values. As of March 31, 2016 , 31% of the investment portfolio was valued at quoted prices in active markets for identical assets...

  • Page 100
    ..., future returns, mail-in rebates on device sales, the fair value of a trade-in right and the total arrangement consideration. Dealer Commissions Cash consideration given by us to a dealer or end-use subscriber is presumed to be a reduction of equipment revenue unless we receive, or will receive, an...

  • Page 101
    ... (2015 Plan); the 2007 Omnibus Incentive Plan (2007 Plan); and the 1997 Long-Term Incentive Program (1997 Program)(together, "Compensation Plans"). Sprint also sponsors an Employee Stock Purchase Plan (ESPP). Under the 2015 Plan, we may grant share and non-share based awards, including stock options...

  • Page 102
    ... stock units, including those with market conditions, with a weighted average grant date fair value of $3.06 per share. At March 31, 2016 , approximately 33 million restricted stock unit awards were outstanding. Compensation Costs The cost of employee services received in exchange for share-based...

  • Page 103
    ... SPRINT CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS New Accounting Pronouncements In May 2014, the FASB issued new authoritative literature, Revenue from Contracts with Customers. The issuance is part of a joint effort by the FASB and the International Accounting Standards Board...

  • Page 104
    ... estimated fair value of Clearwire shares held by Sprint Communications immediately preceding the acquisition and (c) approximately $59 million of share-based payment awards (replacement awards) exchanged for awards held by Clearwire employees. Purchase Price Allocation The consideration transferred...

  • Page 105
    ...of Sprint Communications, Inc. common stock at $5.25 per share immediately prior to the SoftBank Merger Date. As a result of the completion of the SoftBank Merger and subsequent open market stock purchases, SoftBank owned approximately 83% of the outstanding voting common stock of Sprint Corporation...

  • Page 106
    ... combination of Sprint, Sprint Communications and Clearwire using the consideration transferred as of each acquisition date as though the acquisition date for each transaction occurred on January 1, 2013. The preparation of the pro forma financial information also assumed a purchase price allocation...

  • Page 107
    ... receivables sold, the estimated timing of upgrades and upgrade payment amounts for those with upgrade options. Accretable yield on the DPP is recognized as interest revenue within net operating service revenue on the consolidated statements of operations and other changes in the fair value...

  • Page 108
    ... change in the fair value of the DPP. Wireless Service Receivable Sales On March 31, 2015, we sold approximately $1.8 billion of wireless service receivables in exchange for $500 million in cash (reflected within the change in accounts and notes receivable on the consolidated statement of cash...

  • Page 109
    ... sold the devices and transferred certain specified customer lease end rights and obligations, such as the right to receive the proceeds from customers who elect to purchase the device at the end of the customer lease term, to MLS in exchange for proceeds totaling $1.1 billion (Cash Purchase Price...

  • Page 110
    ... SPRINT CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 5. Installment Receivables Certain subscribers have the option to purchase their devices in installments up to a 24 -month period. Short-term installment receivables were recorded in "Accounts and notes receivable, net...

  • Page 111
    ... the periods ended March 31, 2016 and 2015 , respectively, are measured on a recurring basis using quoted prices in active markets. The estimated fair value of the majority of our current and long-term debt, excluding our credit facilities and future lease receivables, is determined based on quoted...

  • Page 112
    ...transaction, which represented the difference between the fair value and net book value of the devices sold and $256 million in losses from the write-off of leased devices associated with lease cancellations prior to the scheduled customer lease terms where customers did not return the devices to us...

  • Page 113
    ..." in our consolidated statements of operations. The stock price at March 31, 2016 of $3.48 was below the net book value per share price of $4.98 . Subsequent to the balance sheet date, the stock price has decreased further to $3.44 at May 13, 2016 . The quoted market price of our stock is not the...

  • Page 114
    ... related to favorable spectrum and tower leases is recognized in "Cost of services" in our consolidated statements of operations. March 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value March 31, 2015 Accumulated Amortization Net Carrying Value Useful...

  • Page 115
    ... Corporation, guaranteed notes issued by Sprint Communications, Inc., exchangeable notes issued by Clearwire Communications LLC, the EDC agreement, the secured equipment credit facilities and installment payment obligations, totaling $21.6 billion in principal amount of our long-term debt issued...

  • Page 116
    .... In 2013, we had fully drawn and began to repay the EKN secured equipment credit facility totaling $1.0 billion , which was used to finance certain network-related purchases from Ericsson. We made regularly scheduled principal repayments totaling $254 million during the year ended March 31, 2016...

  • Page 117
    ... are primarily for the use of wireless network equipment. In February and March 2016, we sold approximately $1.2 billion in total of future amounts due from customers who lease certain devices from us in exchange for cash proceeds of $600 million through our Accounts Receivable Facility ( see Note...

  • Page 118
    ... of lease exit costs primarily associated with tower and cell sites, access exit costs related to payments that will continue to be made under our backhaul access contracts for which we will no longer be receiving any economic benefit, and severance costs associated with reductions in our work force...

  • Page 119
    ...purchase price for Handset Sale-Leaseback Tranche 1 Unbilled trade installment receivables, net Investments Other $ Accounts payable Trade Accrued interconnection costs Capital expenditures and other $ Accrued expenses and other current liabilities Deferred revenues Accrued taxes Payroll and related...

  • Page 120
    ...state tax returns with certain other SoftBank affiliates beginning with the year ended March 31, 2016. State tax expense or benefit has been determined utilizing the separate return approach as if Sprint and its subsidiaries file on a stand-alone basis. We also file income tax returns in a number of...

  • Page 121
    ...Statements SPRINT CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Income tax (expense) benefit allocated to other items was as follows: Successor Year Ended March 31, 2016 Year Ended March 31, 2015 Three Months Ended March 31, 2014 (in millions) Year Ended December 31, 2013 191 Days Ended...

  • Page 122
    ... Statements SPRINT CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Predecessor 191-day period ended July 10, 2013 and unaudited three-month period ended March 31, 2013, respectively, on deferred tax assets primarily related to losses incurred during the period that are not currently...

  • Page 123
    ... with the Appeals or Exam division of the Internal Revenue Service (IRS) for examination issues in dispute for years prior to 2010. The issues were immaterial to our consolidated financial statements. As of March 31, 2016 , there are no federal income tax examinations being handled by the IRS Exam...

  • Page 124
    ... been set for May 26, 2016. On April 19, 2012, the New York Attorney General filed a complaint alleging that Sprint Communications has fraudulently failed to collect and pay more than $100 million in New York sales taxes on receipts from its sale of wireless telephone services since July 2005. The...

  • Page 125
    ... as eligible by the transition administrator. During the year ended March 31, 2015, we received a cash payment of approximately $95 million which represented a reimbursement of prior reconfiguration costs incurred by us that also benefited spectrum recently auctioned by the FCC. We do not expect...

  • Page 126
    ... 191-day period ended July 10, 2013 and unaudited three-month period ended March 31, 2013, respectively. Spectrum Leases and Service Credits Certain of the spectrum leases provide for minimum lease payments, additional charges, renewal options and escalation clauses. Leased spectrum agreements...

  • Page 127
    ... -year term. Note 15. 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 (handset...

  • Page 128
    ...3 Operating income Interest expense Other income, net Loss before income taxes Corporate, Other and Eliminations (in millions) $ (1,854) Statement of Operations Information Wireless Wireline Consolidated Year Ended March 31, 2015 Net operating revenues Inter-segment revenues Segment earnings...

  • Page 129
    ...-segment revenues Segment earnings Other income, net Loss before income taxes Corporate, Other and Eliminations (in millions) (1) $ - - - $ - - - $ - - (14) $ - - (14) (14) 6 Total segment operating expenses $ - $ - $ (14) $ (8) Statement of Operations Information Wireless Wireline...

  • Page 130
    ... Statements SPRINT CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Successor Other Information Wireless Wireline Corporate and Other (in millions) Consolidated As of and for the year ended March 31, 2016 Capital expenditures Total assets As of and for the year ended March 31, 2015...

  • Page 131

  • Page 132
    ...and equipment related to network equipment assets no longer necessary for management's strategic plans. Other, net for the Successor year ended December 31, 2013 consists of $309 million of severance and exit costs and $100 million of business combination fees paid to unrelated parties in connection...

  • Page 133
    ... SPRINT CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Successor Operating Revenues by Service and Products Wireless Wireline Corporate, Other and Eliminations (1) (in millions) Consolidated Year Ended March 31, 2016 Wireless services Wireless equipment Voice Data Internet Other Total...

  • Page 134
    ...CONSOLIDATED FINANCIAL STATEMENTS Predecessor Operating Revenues by Service and Products Wireless Wireline Corporate, Other and Eliminations (1) (in millions) Consolidated 191 Days Ended July 10, 2013 Wireless services Wireless equipment Voice Data Internet Other Total net operating revenues $ $ 15...

  • Page 135
    ... statements of operations related to our agreement to purchase 4G services from Clearwire totaled $207 million and $101 million for the Predecessor 190-day period ended July 9, 2013 and Predecessor unaudited three-month period ended March 31, 2013, respectively. Summarized financial information...

  • Page 136
    ...: Accounts receivable Accounts payable $ $ 2016 (in millions) 2015 197 96 $ $ 430 96 March 31, Consolidated statements of operations: Equipment revenues (1) Cost of products (1) (1) _____ 2016 (in millions) 2015 $ $ 1,731 1,743 $ $ 1,818 1,887 Amounts for all other reported periods...

  • Page 137
    ... the Parent/Issuer column represents the activities of Sprint Corporation (formerly Starburst II), no Parent/Issuer financial information exists for the Predecessor periods, which are prior to the SoftBank Merger. We have accounted for investments in subsidiaries using the equity method. Presented...

  • Page 138
    ... ASSETS Current assets: Cash and cash equivalents Accounts and notes receivable, net Device and accessory inventory Prepaid expenses and other current assets Total current assets Investments in subsidiaries Property, plant and equipment, net Due from consolidated affiliate Note receivable from...

  • Page 139
    ... ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts and notes receivable, net Device and accessory inventory Deferred tax assets Prepaid expenses and other current assets Total current assets Investments in subsidiaries Property, plant and equipment, net Due...

  • Page 140
    ...: Service Equipment Net operating expenses: Cost of services (exclusive of depreciation and amortization below) Cost of products (exclusive of depreciation and amortization below) Selling, general and administrative Severance and exit costs Depreciation Amortization Other, net Operating income Other...

  • Page 141
    ... revenues: Service Equipment Net operating expenses: Cost of services (exclusive of depreciation and amortization below) Cost of products (exclusive of depreciation and amortization below) Selling, general and administrative Impairments Severance and exit costs Depreciation Amortization Other, net...

  • Page 142
    ...: Service Equipment Net operating expenses: Cost of services (exclusive of depreciation and amortization below) Cost of products (exclusive of depreciation and amortization below) Selling, general and administrative Severance and exit costs Depreciation Amortization Other, net Operating income Other...

  • Page 143
    ... Consolidated Net operating revenues: Service Equipment Net operating expenses: Cost of services (exclusive of depreciation and amortization below) Cost of products (exclusive of depreciation and amortization below) Selling, general and administrative Severance and exit costs Depreciation...

  • Page 144
    ... SPRINT CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS Predecessor 191 Days Ended July 10, 2013 Subsidiary Guarantor Non-Guarantor Subsidiaries (in millions) Eliminations Consolidated Net operating revenues: Service Equipment Net...

  • Page 145
    ...: Service Equipment Net operating expenses: Cost of services (exclusive of depreciation and amortization below) Cost of products (exclusive of depreciation and amortization below) Selling, general and administrative Severance and exit costs Depreciation Amortization Other, net Operating income Other...

  • Page 146
    ...: Net cash (used in) provided by operating activities Cash flows from investing activities: Capital expenditures - network and other Capital expenditures - leased devices Expenditures relating to FCC licenses Proceeds from sales and maturities of short-term investments Purchases of short-term...

  • Page 147
    ... Cash flows from investing activities: Capital expenditures - network and other Capital expenditures - leased devices Expenditures relating to FCC licenses Reimbursements relating to FCC licenses Proceeds from sales and maturities of short-term investments Purchases of short-term investments Change...

  • Page 148
    ... short-term investments Change in amounts due from/due to consolidated affiliates Proceeds from sales of assets and FCC licenses Other, net Net cash (used in) provided by investing activities Cash flows from financing activities: Repayments of debt and capital lease obligations Debt financing costs...

  • Page 149
    ...: Net cash provided by (used in) operating activities Cash flows from investing activities: Capital expenditures Expenditures relating to FCC licenses Acquisitions, net of cash acquired Proceeds from sales and maturities of short-term investments Purchases of short-term investments Change in...

  • Page 150
    ... flows from investing activities: Capital expenditures Expenditures relating to FCC licenses Acquisitions, net of cash acquired Investment in Clearwire (including debt securities) Proceeds from sales and maturities of short-term investments Purchases of short-term investments Change in amounts due...

  • Page 151
    ... relating to FCC licenses Investment in Clearwire (including debt securities) Proceeds from sales and maturities of short-term investments Purchases of short-term investments Change in amounts due from/due to consolidated affiliates Proceeds from sales of assets and FCC licenses Other, net Net cash...

  • Page 152
    ... , on a net present value basis, of notes payable to Shentel. Sprint will satisfy its obligations under the notes payable over an expected term of five to six years. Approximately $110 million of the total purchase price will be recorded as a loss in the quarter ended June 30, 2016, which related to...

  • Page 153
    ... in the United States of America. Emphasis of Matter As discussed in Note 1 to the consolidated financial statements, effective July 9, 2013, Sprint Communications, Inc. acquired all of the outstanding stock of Clearwire Corporation in a business combination accounted for as a purchase. As a result...

  • Page 154
    ...of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and...

  • Page 155
    ... to Consolidated Financial Statements CLEARWIRE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS July 9, 2013 December 31, 2012 (In thousands, except par value) ASSETS Current assets: Cash and cash equivalents Short-term investments Restricted cash Accounts receivable, net of allowance...

  • Page 156
    ... Index to Consolidated Financial Statements CLEARWIRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS 190 Days Ended July 9, 2013 Year ended December 31, 2012 (In thousands) 2011 Revenues Operating expenses: Cost of goods and services and network costs (exclusive of items...

  • Page 157
    ...Index to Consolidated Financial Statements CLEARWIRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS 190 Days Ended July 9, 2013 Year ended December 31, 2012 (In thousands) 2011 Net loss: Net loss from continuing operations Less: non-controlling interests in net loss from...

  • Page 158
    ... operations Net cash provided by (used in) investing activities Cash flows from financing activities: Principal payments on long-term debt Proceeds from issuance of long-term debt Debt financing fees Equity investment by strategic investors Proceeds from issuance of common stock Net cash provided...

  • Page 159
    Non-cash investing activities: Fixed asset purchases in accounts payable and accrued expenses Fixed asset purchases financed by long-term debt Non-cash financing activities: Vendor financing obligations Capital lease obligations Class A common stock issued for repayment of long-term debt Repayment ...

  • Page 160
    ... STATEMENTS OF STOCKHOLDERS' EQUITY For the 190 Days Ended July 9, 2013 and the Years Ended December 31, 2012 and 2011 Class A Common Stock Class B Common Stock Additional Paid In Capital Accumulated Other Comprehensive Income (Loss) Non-controlling Interests Total Stockholders' Equity Shares...

  • Page 161
    ...2012, we entered into an agreement and plan of merger with Sprint Nextel Corporation, which we refer to as the Merger Agreement, pursuant to which Sprint Nextel Corporation agreed to acquire all of the outstanding shares of Clearwire Corporation Class A and Class B common stock, which we refer to as...

  • Page 162
    ... historical experience, terms of existing contracts, observance of trends in the industry, information provided by our subscribers and information available from other outside sources, as appropriate. Additionally, changes in accounting estimates are reasonably likely to occur from period to period...

  • Page 163
    ... including market price, investment ratings, the financial condition and nearterm prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost basis, and our intent and ability to hold the investment until maturity or for a period of time sufficient...

  • Page 164
    ... value. In addition, changes in market conditions may reduce the availability and reliability of quoted prices or observable data. See Note 11, Fair Value, for further information. Accounts Receivable - Accounts receivables are stated at amounts due from subscribers and our wholesale partners net...

  • Page 165
    ...recoverable. The carrying value of spectrum leases are amortized on a straight-line basis over their estimated useful lives or lease term, including expected renewal periods, as applicable. There were no impairment losses for favorable spectrum leases in the 190 days ended July 9, 2013 and the years...

  • Page 166
    ...or interest income. We recognize penalties as additional income tax expense. Revenue Recognition - We primarily earn revenue by providing access to our high-speed wireless networks. Also included in revenue are sales of CPE and additional add-on services. In our 4G mobile broadband markets, we offer...

  • Page 167
    ... authorize the provision of certain communications services on the EBS channels in certain markets throughout the United States. We account for these spectrum leases as executory contracts which are similar to operating leases. Signed leases which have unmet conditions required to become effective...

  • Page 168
    ... positions. The amendments will be effective beginning in the first quarter of 2014 with early adoption permitted, will be applied prospectively to all unrecognized tax benefits that exist at the effective date, and are not expected to have a material effect on our consolidated financial statements...

  • Page 169
    ...During the first quarter of 2012, we sold the Auction Market Preferred securities and recorded a gain of $3.3 million to Other income (expense), net on the consolidated statements of operations representing the total proceeds received. We no longer own any collateralized debt obligations or Auction...

  • Page 170
    ... and the related costs written down. In addition, any network equipment not required to support our network deployment plans or sparing requirements were written down to estimated salvage value. We incurred the following charges associated with PP&E for the 190 days ended July 9, 2013 and the...

  • Page 171
    ... costs and is expensed over the term of the lease agreement, including expected renewal terms, as applicable. Favorable spectrum leases of $1.0 billion were recorded as an asset as a result of purchase accounting in November 2008 and are amortized over the lease term. 190 Days Ended July 9, 2013...

  • Page 172
    ... Statements CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED) Remainder of 2013 2014 2015 2016 2017 Thereafter Total 190 Days Ended July 9, 2013 $ 5,822 7,740 3,874 329 329 110 $ Year Ended December 31, 2012 2011 18,204 Supplemental Information...

  • Page 173
    ... tax rate computed using the federal statutory rates is reconciled to the reported effective income tax rate as follows: For the 190 Days Ended July 9, 2013 Year Ended December 31, 2012 2011 Federal statutory income tax rate State income taxes (net of federal benefit) Non-controlling interest Basis...

  • Page 174
    ...differences between the financial statement and tax bases of assets and liabilities using the tax rates expected to be in effect when any temporary differences reverse or when the net operating loss, which we refer to as NOL, capital loss or tax credit carry-forwards are utilized. As of July 9, 2013...

  • Page 175
    ... subsequent changes of ownership for purposes of Sections 382 and 383 of the Internal Revenue Code could further diminish our use of remaining United States tax attributes. We have recognized a deferred tax liability for the difference between the financial statement carrying value and the tax basis...

  • Page 176
    ... Rates Effective Rate (1) Maturities Par Amount Net Discount Carrying Value Notes: 2015 Senior Secured Notes 2016 Senior Secured Notes Second-Priority Secured Notes Exchangeable Notes Sprint Notes Vendor Financing Notes (3) Capital lease obligations and other (3) Total debt, net Less: Current...

  • Page 177
    ..., 2012 Interest Rates Effective Rate (1) Maturities Par Amount Net Discount Carrying Value Notes: 2015 Senior Secured Notes 2016 Senior Secured Notes Second-Priority Secured Notes Exchangeable Notes Vendor Financing Notes (3) Capital lease obligations Total debt, net Less: Current portion of Vendor...

  • Page 178
    ... Common Stock, at any time, prior to the maturity date. We have the right to settle the exchange by delivering cash or shares of Class A Common Stock, subject to certain conditions. The initial exchange rate for each note is 141.2429 shares per $1,000 note, equivalent to an initial exchange price of...

  • Page 179
    ... Sprint has the right to exchange notes held in connection with the Note Purchase Agreement for Clearwire Class A common stock or Clearwire Class B common stock and Clearwire Communications Class B common units at the applicable exchange rate at any time prior to the maturity date after July 9, 2013...

  • Page 180
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED) date of each draw of the Sprint Notes, the BCF will be calculated based on the closing price on settlement date less the exchange price of $1.50 per share multiplied by the number of shares of Clearwire Class A common stock issued. The amount...

  • Page 181
    ... valuation hierarchy. To estimate the fair value of the Exchange Options, we used an income approach based on valuation models, including option pricing models and discounted cash flow models. We maximized the use of market-based observable inputs in the models and developed our own assumptions for...

  • Page 182
    ...): Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Financial assets: Cash and cash equivalents Short-term investments Other assets - derivative warrant assets Financial liabilities: Other current...

  • Page 183
    ... financial instruments we hold that are not subject to fair value recognition. Debt Instruments To estimate the fair value of the 2015 Senior Secured Notes, the 2016 Senior Secured Notes, the Second-Priority Secured Notes and the Exchangeable Notes, we used the average indicative price from several...

  • Page 184
    ... minimum cash payments under obligations for our continuing operations listed below (including all optional expected renewal periods on operating leases) as of July 9, 2013 , are as follows (in thousands): Thereafter, including all renewal periods Total 2013 2014 2015 2016 2017 Long-term debt...

  • Page 185
    ...agreements for backhaul, subscriber devices and IT related and other services. In addition, we are party to various arrangements that are conditional in nature and create an obligation to make payments only upon the occurrence of certain events, such as the actual delivery and acceptance of products...

  • Page 186
    ... filed an amended complaint, naming as defendants Sprint Corporation, Sprint Communications, Inc., the former directors of the Company, Starburst I, Inc., and SoftBank Corp. The amended ACP Action alleges that the directors of the Company breached their fiduciary duties in connection with the Sprint...

  • Page 187
    ...information currently available to us, none of these other claims are expected to have a material effect on our business, financial condition or results of operations. 13. Share-Based Payments As of July 9, 2013 , there were 25,226,048 shares available for grant under the Clearwire Corporation 2008...

  • Page 188
    ...granted options to certain officers and employees under the 2008 Plan. All options generally vest over a four-year period and expire no later than ten years after the date of grant. The fair value of option grants was estimated on the date of grant using the Black-Scholes option pricing model. F-102

  • Page 189
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED) A summary of option activity from January 1, 2011 through July 9, 2013 is presented below: WeightedAverage Remaining Contractual Term (Years) Number of Options WeightedAverage Exercise Price Options outstanding - January 1, 2011 Granted...

  • Page 190
    .... The total fair value of options vested during the 190 days ended July 9, 2013 and the years ended December 31, 2012 and 2011 was $0.5 million , $0.7 million and $6.6 million , respectively. The total unrecognized share based compensation costs related to nonvested stock options outstanding at July...

  • Page 191
    ... and a corresponding number of shares of Class B Common Stock for an equal number of shares of Class A Common Stock pursuant to the Amended and Restated Operating Agreement dated as of November 28, 2008 governing Clearwire Communications. On July 9, 2013, Intel completed the exchange of 65.6 million...

  • Page 192
    ... to the outstanding non-controlling interests. The conversion of Class B Common Interests and the corresponding number of Class B Common Stock to Class A Common Stock is recorded in Issuance of common stock, net of issuance costs, and other capital transactions on our consolidated statement of...

  • Page 193
    ... quarter of 2013, we issued a warrant to purchase 2.0 million shares of Class A Common Stock at an exercise price of $1.75 per share related to a spectrum lease agreement. The warrants expire January 29, 2019. In connection with the Sprint Acquisition, the warrants were settled for a lump sum cash...

  • Page 194
    ... November 24, 2009, we issued notes to Sprint and Comcast with identical terms as the 2015 Senior Secured Notes. From time to time, other related parties may hold portions of our long-term debts, and as debtholders, would be entitled to receive interest payments from us. Relationships among Certain...

  • Page 195
    ... Spectrum, which we refer to as the 3G MVNO Agreement, whereby Sprint agrees to sell its code division multiple access and mobile voice and data communications service for the purpose of resale to our retail customers. The data communications service includes Sprint's existing core network services...

  • Page 196
    ... price of such option, less applicable withholding taxes. In connection with the Sprint Acquisition, each RSU granted to a non-employee member of our board of directors, which we refer to as a Director RSU, was canceled in exchange for a lump sum cash payment equal to the product of the Merger...

  • Page 197
    ...a 2013 Restricted Cash Account will also be paid a pro-rata portion of the 2013 Restricted Cash Account upon an involuntary termination of the holder's employment. Other Related Party Transactions On July 19, 2013, Clearwire Corporation entered into a services agreement with Sprint/United Management...

  • Page 198
    Exhibit 10.10 Execution Copy _____ AMENDED AND RESTATED FIRST STEP TRANSFER AGREEMENT (TRANCHE 1) dated as of April 28, 2016 among THE ORIGINATORS FROM TIME TO TIME PARTY HERETO, as Transferors THE LESSEES FROM TIME TO TIME PARTY HERETO, as Transferees and SPRINT SPECTRUM L.P., as Servicer _____

  • Page 199
    ... and Assumption of Related Customer Lease Distributions No Recourse Intention of the Parties Like-Kind Exchanges Repurchase Transfers of Rights in Customer Leases Upon Device Redistribution Upon Transfer of Title of Device 5 Servicer Power of Attorney Continuation Statements Mutual Representations...

  • Page 200
    ..., Etc Survival Costs and Expenses Governing Law Waiver of Jury Trial Confidentiality No Proceedings Severability 15 15 15...Parties ANNEX 1 UCC Details Schedule ANNEX 2 Related Originators; Related Lessees SCHEDULE I Lease Closing Date Devices SCHEDULE II Related Customer Leases SCHEDULE III Related...

  • Page 201
    ...an " LESSEE ") and SPRINT SPECTRUM L.P., as servicer (in such capacity, the " Servicer "). W I T N E S S E T H: WHEREAS, the Lessees and Originators are parties to the First Step Transfer Agreement, dated as of November 19, 2015 and effective as of the Lease Closing Date (as amended, supplemented or...

  • Page 202
    ...the Servicing Agreement. " Devices " means the Lease Closing Date Devices and each wireless mobile device contributed to a Lessee in connection with a Like-Kind Exchange for any of the foregoing Devices. " Lease Closing Date Devices " means the wireless mobiles device identified on Schedule I hereto...

  • Page 203
    ...all Customer Receivables in connection with such Related Customer Leases, all rights to discontinue the leasing program for such Lease Closing Date Devices under the Related Customer Leases and all servicing rights with respect to such Lease Closing Date Devices and such Related Customer Leases. All...

  • Page 204
    ... Device. SECTION 2.7 Transfers of Rights in Customer Leases Upon Device Repurchase . On each Purchase Date, simultaneously with the sale of any Devices by MLS to an Originator pursuant to the Device Repurchase Agreement, the applicable Lessee shall automatically make a distribution to its Related...

  • Page 205
    ... the Lease Closing Date, each Originator shall maintain its accounting records to evidence that as of, (x) in the case of the Lease Closing Date Devices and Related Customer Leases, the Lease Closing Date and (y) in the case of each Like-Kind Exchange Device, the Like-Kind Exchange Transfer Date for...

  • Page 206
    ..., as of the Lease Closing Date and as of the Amendment Effective Date, as follows: (a) Organization and Good Standing . It has been duly organized or incorporated in, and is validly existing as a corporation, exempted company, partnership or limited liability company, as applicable, in good standing...

  • Page 207
    ...Kind Exchange Device transferred as of the applicable Like-Kind Exchange Transfer Date, as follows: (a) Absolute Assignment . This Agreement constitutes an absolute and irrevocable assignment by way of capital contribution of the Devices and the Related Customer Leases to its Related Lessee. (b) Use...

  • Page 208
    ...acquired them for fair consideration and reasonably equivalent value, free and clear of any Lien (other than Permitted Device Liens); and no valid effective financing statement or other instrument similar in effect covering any Device and any Related Customer Lease is on file in any recording office...

  • Page 209
    ... Device or Related Customer Lease as of the date such representations and warranties are made, then, to the extent the Servicer is required to make a payment in a respect of a Deemed Collection pursuant to Section 2.14(b) of the Servicing Agreement, the Related Originator agrees to make such payment...

  • Page 210
    ... of Devices and Related Customer Leases to be deposited directly in a Servicer Collection Account covered by an Account Control Agreement. In the event such Originator or any of its Affiliates receives any Collections such Person will promptly (but not later than three (3) Business Days following...

  • Page 211
    ... designated accountants for each annual agreed-upon procedures report required pursuant to Section 8.1(i) of the Servicing Agreement. (h) Location . Each Originator shall at all times maintain its jurisdiction of organization and its chief executive office within a jurisdiction in the United States...

  • Page 212
    ...or its name, identity or corporate organization structure or make any other change such that any financing statement filed or other action taken to perfect its Related Lessee's or MLS's interests hereunder and under the Second Step Transfer Agreement, as applicable, would become seriously misleading...

  • Page 213
    ..., (y) constituting recourse with respect to the market or residual value of a Device or the value of a Customer Lease or a Customer Receivable by reason of bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Customer or as a result of an Insolvency...

  • Page 214
    ... at the time of any purchase or acquisition, as applicable, or at any time thereafter; (vi) any suit or claim related to the Devices or Related Customer Leases transferred, or purported to be transferred, to any Lessee pursuant to this Agreement (including any products liability or environmental...

  • Page 215
    ...' rights under this Agreement and rights in the Devices and Related Customer Leases may be sold outright or assigned as collateral to MLS under the Second Step Transfer Agreement and may be further assigned as collateral to the Collateral Agent on behalf of the Financing Parties, and the Originators...

  • Page 216
    ...the fees and charges of any nationally recognized statistical rating agency or any independent accountants, auditors, consultants or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under this Agreement in connection...

  • Page 217
    ...Recourse Against Other Parties . No recourse under any obligation, covenant or agreement of any Lessee contained in this Agreement shall be had against any stockholder, employee, officer, director, member, manager incorporator or organizer of any Lessee. SECTION 7.14 Severability . Any provisions of...

  • Page 218
    ...SPRINT SPECTRUM L.P. SPRINTCOM, INC. NORTHERN PCS SERVICES, LLC SPRINT TELEPHONY PCS, L.P. AMERICAN PCS COMMUNICATIONS, LLC PHILLIECO, LLC TEXAS TELECOMMUNICATIONS, LLC ALAMOSA WISCONSIN, LLC AIRGATE PCS, INC. LOUISIANA UNWIRED, LLC GEORGIA PCS MANAGEMENT, L.L.C. INDEPENDENT WIRELESS ONE CORPORATION...

  • Page 219
    ... Title: Vice President and Treasurer By: SprintCom, Inc., as Partner By:____ /s/ Janet M. Duncan _____ Name: Janet M. Duncan Title: Vice President and Treasurer S-2 First Step Transfer Agreement

  • Page 220
    SPRINT SPECTRUM L.P. , as Servicer By: /s/ Janet M. Duncan Name: Janet M. Duncan Title: Vice President and Treasurer S-3 First Step Transfer Agreement

  • Page 221
    ... - XVIII LLC SLV - XIX LLC SLV - XX LLC SLV - XXI LLC SLV - XXII LLC , each a Lessee By:____ /s/ Stefan K. Schnopp _____ Name: Stefan K. Schnopp Title: Director

  • Page 222
    Exhibit 10.11 EXECUTION COPY _____ AMENDED AND RESTATED SECOND STEP TRANSFER AGREEMENT (TRANCHE 1) dated as of April 28, 2016 among THE LESSEES FROM TIME TO TIME PARTY HERETO, as Sellers and MOBILE LEASING SOLUTIONS, LLC, as Buyer _____

  • Page 223
    ... Page 2 ARTICLE I DEFINITIONS AND RELATED MATTERS SECTION 1.1 SECTION 1.2 ARTICLE II SECTION 2.1 SECTION 2.2 Defined Terms 2 Other Interpretive Matters 10 10 Purchase and Sale 10 AGREEMENT TO PURCHASE AND SELL Assignment and Assumption of Customer Lease-End Rights Obligations and 11 SECTION...

  • Page 224
    ... No Proceedings Severability 30 30 30 30 Consent to Jurisdiction; Waiver of Immunities Lessee Representative Limited Recourse 31 Mobile Leasing Solutions as Series LLC 31 Schedule II Customer Leases Schedule III Cash Purchase Price and Deferred Purchase Price Schedule IV UCC Details Schedule...

  • Page 225
    ... terms hereof; WHEREAS, the Devices and the Customer Lease-End Rights and Obligations under the Related Customer Leases will be held in the name of Mobile Leasing Solutions on behalf of Series 1; WHEREAS, the Buyer has agreed to pay to the Lessees the Cash Purchase Price, the Deferred Purchase Price...

  • Page 226
    ... and local income tax purposes, and thus specifically that (i) the Cash Purchase Price paid under this Agreement at closing be treated for such purposes as amounts loaned by the Buyer for which the Devices provide security and (ii) the Rental Payments payable to the Buyer under the Device Leases be...

  • Page 227
    ...assets of Mobile Leasing Solutions arising in the ordinary course of business. " Cash Purchase Price " shall have the meaning provided in Section 2.3(i) of this Agreement. " Collections " shall have the meaning provided in the Servicing Agreement. " Contingent Device Purchase Price " means an amount...

  • Page 228
    ...Settlement Date and (y) the date on which the Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in lieu thereof) for such Device are actually received by the Buyer at the rate set forth in the applicable...

  • Page 229
    ... period during the Scheduled Customer Lease Term. " Customer Purchase Price Amounts " means with respect to any Device, all purchase price payments and payments in lieu of delivery of such Device received by the Buyer, directly or indirectly from the relevant Customers under the applicable Related...

  • Page 230
    ...Settlement Date and (y) the date on which the Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in lieu thereof) for such Device are actually received by the Buyer at the rate set forth in the applicable...

  • Page 231
    ... the Device Handling Fee payable with respect to such sale. " Device Repayment Purchase Price " shall have the meaning provided in the Servicing Agreement. " Devices " means the Lease Closing Date Devices and each wireless mobile device received by the Buyer in connection with a Like-Kind Exchange...

  • Page 232
    ... relief under any applicable federal or state law relating to bankruptcy and (2) has at least three years of relevant employment experience. " Investment Company Act " means the Investment Company Act of 1940, as amended. " Lease Closing Date Devices " means the wireless mobile device identified on...

  • Page 233
    ...51) of the Investment Company " Related Customer Leases " means each Customer Lease with respect to a Lease Closing Date Device identified on Schedule II hereto. " Related Originator " shall have the meaning provided in the First Step Transfer Agreement. " Related Purchase Price " shall have the...

  • Page 234
    ... the Originator Device Fee, Delivery Costs and sales and transfer Taxes (not including any Income Taxes), if any, payable with respect to such transfer incurred in connection with such sale, (ii) a Device for which any Lessee has made payment under Section 2.11(c) of the Master Lease Agreement, the...

  • Page 235
    ...the Lease Closing Date until the Term of a Device Lease for such Device has terminated or expired, the relevant Lessee shall be the lessor of record of the Device under the Related Customer Lease and own the right to receive all scheduled Customer Receivables in connection with such Related Customer...

  • Page 236
    ...-Kind Exchange Transfer Date for such Like-Kind Exchange Device in exchange for the Related Purchase Price for such Device that was or would have been payable in respect of the original Device, provided, however, the Contingent Purchase Price calculation for net disposal proceeds shall be made using...

  • Page 237
    ... of Marketing Services Provider's collection of Device Net Sale Proceeds occurring after the Final Settlement Date and/or (ii) Forward Purchaser's failure to timely pay to the Buyer all amounts due and owing under the Forward Purchase Agreement (the " Insufficient Amount "), the Lessees hereby agree...

  • Page 238
    ... Section 4.2(k) and (b) in the case of clause (iii), each Lessee only makes the representation and warranty in Section 4.2(k)(i) and only in respect of the Like-Kind Exchange Device transferred as of the applicable Like-Kind Exchange Transfer Date, as follows: (a) Organization and Good Standing . It...

  • Page 239
    ... Related Customer Lease, is owned by it free and clear of any Adverse Claim (other than Permitted Device Liens); when the Buyer purchases such Devices and Customer Lease-End Rights and Obligations, the Buyer shall have acquired them for fair consideration and reasonably equivalent value, free and...

  • Page 240
    ...) each Related Customer Lease is an Eligible Lease. SECTION 4.3 Additional Representations and Warranties of the Buyer . The Buyer represents and warrants to the Lessees as of Lease Closing Date and as of the Amendment Closing Date, as follows: (a) Organization and Good Standing . (i) Mobile Leasing...

  • Page 241
    ... The Parties acknowledge that the Buyer has entered into the Tax Services Agreement with the Servicer and Sprint, which will govern responsibility for filing any Tax Returns and paying any Taxes that are due with respect to any payment made or any transfer of Devices or Customer Lease-End Rights and...

  • Page 242
    ... to Servicer), all documents, books, records and other information necessary or advisable for the collection of all Collections in respect of all Devices and the Related Customer Leases. (c) Location of Records . Keep its chief executive office and principal place of business at the address of...

  • Page 243
    ... Adverse Effect. (h) Mergers, Sales, Etc . Not consolidate or merge with or into any other Person or sell, lease or transfer all or substantially any portion of its property and assets, or agree to do any of the foregoing, unless (i) the Buyer shall have received 30 days' prior notice thereof...

  • Page 244
    ... later than one (1) Business Day) after request by any Sprint Party, provide such Sprint Party with the fair market value in relation to a Customer's purchase option of a Device under a Related Customer Lease for any period after the relevant Scheduled Customer Lease Term, provided, however, the...

  • Page 245
    ...any other action under the Related Customer Leases other than through the Servicer. (q) Information . Provide and cause Marketing Services Provider to provide (i) to the Servicer all data and other information necessary to permit the Servicer to prepare and deliver each Servicer Report in accordance...

  • Page 246
    ... in its memorandum and articles of association to: (i) acquiring, owning, holding or selling interests in (x) the Devices and Related Customer Leases in accordance with the Transaction Documents and (y) any wireless mobile devices and related customer leases in accordance with any Lessee Permitted...

  • Page 247
    ...board of directors' (or managers') meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts...

  • Page 248
    ... hand, have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and such Lessee shall bear its fair share of such expenses, which may be paid through the Servicing Fee or otherwise; (l) Identification . Each Lessee shall at all times hold...

  • Page 249
    ... Document to which it is a party); (v) no Lessee shall make, declare or otherwise commence or become obligated in respect of, any dividend, stock or other security redemption or purchase from, or any distribution or other payment to, or for the account or benefit of, any owner of any equity...

  • Page 250
    ... as of the Amendment Closing Date and makes the agreements in Section 7.2(b) and (f) from the Lease Closing Date to the Final Settlement Date. (a) Assuming the correctness of the representations and agreements of the Lessees in Section 7.1, the Buyer represents that it is a Qualified Purchaser. 26

  • Page 251
    ... and agreed that any subsequent Transfers of such Device Lease shall only be made to a Qualified Purchaser). (c) The Buyer is acquiring the Device Leases for its own account, for investment purposes only and not with a view to distribute or resell such Device Leases in whole or in part. (d) The...

  • Page 252
    ...of such Persons and the reasonable and documented fees and charges of any independent accountants, auditors, consultants or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under this Agreement in connection with any...

  • Page 253
    ... UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS...

  • Page 254
    ... account control agreement with respect to any such security interest granted by a Lessee in the Servicer Collection Accounts or other deposit accounts in the name of any Lessee, (vi) take any such action on behalf of the Lessees as the Lessee Representative deems appropriate to effectuate the sale...

  • Page 255
    ... Representative and the term "Lessee Representative" shall mean such successor Lessee Representative and the retiring or terminated Lessee Representative's appointment, powers and duties as Lessee Representative shall be terminated. SECTION 8.15 Mobile Leasing Solutions as Series LLC . Each Party...

  • Page 256
    IN WITNESS WHEREOF , the parties have caused this Agreement to be executed by their respective duly authorized signatories, as of the date first above written. For... Name: Stefan K. Schnopp Title: Director SLV- III LLC , as Lessee Representative By: /s/ Stefan K. Schnopp Name: Stefan K. Schnopp Title...

  • Page 257
    MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company, acting for itself and on behalf of Series 1 thereof as Buyer By: /s/ Jeff Krisel Name: Jeff Krisel Title: President, Chief Executive Officer and Secretary -33-

  • Page 258
    ... 10.12 AMENDED AND RESTATED MASTER LEASE AGREEMENT (TRANCHE 1) Dated as of April 28, 2016 among MOBILE LEASING SOLUTIONS, LLC, as Lessor and LESSEES FROM TIME TO TIME PARTY HERETO, as Lessee and SPRINT SPECTRUM L.P. as Servicer and Mizuho Bank, LTD. as Collateral Agent COUNTERPART NO. [____] OF...

  • Page 259
    ...14 SECTION 2.15 Agreement to Lease 3 Deemed Delivery 4 Ownership of the Devices 4 Subleasing 4 Software and Other Rights 5 Approved Devices 5 Term 6 Rent and Other Payments 6 Termination of a Device Lease 7 Title Transfer 8 Returned Devices 9 Non-Return Remedies 10 Like-Kind Exchanges 10 Updates to...

  • Page 260
    ..., etc. 24 No Waiver 24 Notices 25 Data File 25 Binding Effect 25 Third Party Rights 25 Execution in Counterparts; Integration 25 Governing Law 25 Waiver of Jury Trial 26 Consent to Jurisdiction; Waiver of Immunities No Proceedings 26 Severability 26 Mobile Leasing Solutions as Series LLC 27 Limited...

  • Page 261
    Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 Schedule 6 Device Lease Schedule Device Residual Values Schedule Of Approved Devices Forms Of Customer Leases Additional Information Repair Costs iii

  • Page 262
    ...the Customer Lease-End Rights and Obligations under the Related Customer Leases will be held in the name of Mobile Leasing Solutions on behalf of Series 1; and WHEREAS, the leasing of the Devices shall be governed by the terms and conditions in this Agreement, as well as the terms and conditions set...

  • Page 263
    ... time amended or supplemented, or as the terms of such agreement are waived or modified, in each case in accordance with the terms of such agreement or document; (h) references to any Party include that Party's successors and permitted assigns; (i) headings in this Agreement or in any other Sprint...

  • Page 264
    .... On the Lease Closing Date, Lessor agreed to lease the Devices transferred from Lessees to Lessor pursuant to the Second Step Transfer Agreement to Lessees and Lessees agreed to lease such Devices from Lessor on the terms and conditions set forth in this Agreement and the Device Lease Schedule with...

  • Page 265
    ..., notwithstanding the possession and use thereof by Lessees or any Customers. Lessees and Servicer each agree that at all times during the Term of each Device Lease for each Device, it shall not (i) imply or represent that any Person other than Lessor owns the Devices, (ii) sell or dispose of or...

  • Page 266
    ... the owner or has rights in software related to the Devices and such rights are transferable by Lessor, Lessor hereby grants to Lessees such rights that Lessor has (if any) to use such software during the Term of the applicable Device Lease. No separate license fee is payable by Lessees to Lessor in...

  • Page 267
    ... applicable Device Lease Payment Date shall be deemed satisfaction, first, of Lessees' obligation to make a scheduled Rental Payment on the relevant Device Lease Payment Date and second, any other payment due and owing or elected to be paid under any Sprint Transaction Document by any Sprint Party...

  • Page 268
    ... the Scheduled Device Lease Term, if any, plus (3) the Device Residual Value for such Device as of the Expected Sales Date. (iii) Non-Returned Device. If the Customer has not returned such Device (other than as a result of an exercise by the Customer of its purchase option or by making a payment in...

  • Page 269
    ... at any time after the last day of the Scheduled Customer Lease Term of the related Customer Lease the Customer exercises a purchase option in relation to such Device under the Customer Lease, payment to Lessor of the purchase option price as of the purchase option exercise date plus all previously...

  • Page 270
    ... to Lessor (or its Nominated Agent) by the earlier of (x) the Final Settlement Date and (y) the later of the end of the applicable Required Return Period and the applicable Device Lease Expiration Date, any Device returned to any Sprint Party by a Customer, the relevant Lessee shall pay to Lessor...

  • Page 271
    ... date of such breach under contract (including pursuant to applicable terms and conditions) to such Customer (by sale, lease or otherwise) until such breach is remedied (the " Non-Return Remedies "), provided that paragraphs (a) and (b) above shall not apply if Servicer terminates the Customer Lease...

  • Page 272
    ... Account (Tranche 1) all Customer Receivables received by such Lessee in satisfaction of any Rental Payment obligation on the due date thereof or (ii) any Lessee (or the Guarantor on its behalf) fails to make any Rental Payment on or before the Business Day prior to the Scheduled Monthly Reporting...

  • Page 273
    ... to provide wireless telephony services is terminated and not replaced; the occurrence of an Insolvency Event with respect to a Sprint Party; (j) the Guarantor fails to pay any amount due and payable under the Sprint Guarantee, or the Sprint Guarantee is terminated or ceases to be in full force and...

  • Page 274
    ..., based on the facts and circumstances that exist at Device Lease inception, that the Lease Event of Default will not occur. In applying this condition, it is expected that any Person making such determination would consider recent trends in Lessees' operations. Upon payment of the Present Value...

  • Page 275
    ...case, any Lessee; the sublease of any Devices to a Customer; (iv) any information provided by or on behalf of a Sprint Party or any Affiliate for inclusion in a Device Lease Schedule being incorrect; (v) a Device Lease terminating in relation to some or all of the Devices before the end of the Term...

  • Page 276
    ...all Agreed Start-Up Costs have been paid or will be paid simultaneously with the consummation of the Transaction; (k) receipt of the Data File which contains all information for each Device Lease Schedule to which each Lessee and Lessor agree; and (l) Lessees shall have obtained any approvals, legal...

  • Page 277
    ... company action, as applicable, the execution, delivery and performance of this Agreement. SECTION 6.4 Binding Obligations This Agreement constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to applicable bankruptcy...

  • Page 278
    ... of the First Step Transfer Agreement and the Second Step Transfer Agreement do not infringe any licenses or other agreements for the use of the software connected to the Devices. ARTICLE VII COVENANTS At all times from the Lease Closing Date to the Final Settlement Date, unless Lessor shall...

  • Page 279
    ... Data subject to Section 7.1(h) ( Personal Data ) (it being understood and agreed that this Section 7.1(a) ( Reporting Requirements ) shall not be applied to augment the periodic reporting obligations of Sprint under Section 4(e) of the Performance Support Agreement). (b) Change in Accountants...

  • Page 280
    ...to discuss matters reasonably related to the Customer Leases and Device Leases or Lessees' performance hereunder, and under the other Transaction Documents to which any Lessee is a party, with any of the officers, directors, relevant employees or independent public accountants of the relevant Lessee...

  • Page 281
    ... and contact details of the Customers, control compliance with underwriting standards, and compliance with relevant policies and laws, and (iii) SECTION 7.2 access to database to confirm the existence and details of the Customer Leases. Negative Covenants At all times from the Lease Closing Date to...

  • Page 282
    ... Lessee in accordance with the relevant Customer Lease. (c) If the supplier or manufacturer of Devices has given Lessor warranties for those Devices then, to the full extent permitted by Law, the relevant Lessee or Servicer may during the Term make any claim on the supplier or manufacturer that...

  • Page 283
    ...the Transfer Agreements; and (8) all accessions to, substitutions for and replacements, proceeds, insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related...

  • Page 284
    ... and agree, for all U.S. federal, state and local income tax purposes, the parties intend (i) to treat the Cash Purchase Price under the Second Step Transfer Agreement at closing as amounts loaned by Lessor for which the Devices provide security, and to treat the Rental Payments payable to...

  • Page 285
    ...Services Agreement with Servicer and Sprint and that such agreement addresses matters covered by this Agreement, and, specifically, provides an indemnity to Lessor for Lessee Covered Taxes. The Parties agree that indemnities calculated in respect of the Tax Services Agreement shall take into account...

  • Page 286
    ... into this Agreement by way of reference. SECTION 11.4 Data File The parties agree that the Data File to be delivered on or about the Lease Closing Date shall become an integral part of this Agreement on the Lease Closing Date. SECTION 11.5 Binding Effect The parties to this Agreement may not...

  • Page 287
    ... UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS...

  • Page 288
    ... the other Parties to receive any further amounts in respect of such obligations and liabilities shall be extinguished and none of the other Parties may take any further action to recover such amounts. For the avoidance of doubt, no recourse shall be had to the assets of Mobile Leasing Solutions or...

  • Page 289
    SIGNATURE PAGE (MASTER LEASE AGREEMENT) IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized signatories as of the day and year first above written. For and on behalf of: SLV - I LLC SLV - II LLC SLV - III LLC SLV - ...

  • Page 290
    MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company, acting for itself and on behalf of Series 1 thereof, as Lessor By: /s/ Jeff Krisel _____ Name: Jeff Krisel Title: President, Chief Executive Officer and Secretary This is Counterpart No. 1 of a total of 5 counterparts. Only ...

  • Page 291
    SPRINT SPECTRUM L.P. as Servicer By: /s/ Janet M. Duncan _____ Name: Janet M. Duncan Title: Vice President and Treasurer This is Counterpart No. 1 of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security ...

  • Page 292
    MIZUHO BANK, LTD. as Collateral Agent By: /s/ Richard A. Burke Name: Richard A. Burke Title: Managing Director This is Counterpart No. 1 of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security interest may be ...

  • Page 293
    ... - III LLC , as Lessee Representative By: /s/ Stefan K. Schnopp _____ Name: Stefan K. Schnopp Title: Director This is Counterpart No. 1 of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security interest may be...

  • Page 294
    ... Party; " Agreed Schedule Information " means, with respect to a Device Lease: (a) (b) (c) (d) (e) (f) (g) a description of the Device to be subject to such Device Lease; the Device Lease Commencement Date; the Scheduled Customer Lease Term; the Device Lease Expiration Date; the Device Lease Payment...

  • Page 295
    ... not authorized or required to be closed for business; " Cash Purchase Price " has the meaning given to that term in the Second Step Transfer Agreement; " Change in Law " means any amendment to or change in the Tax laws (or any regulations or rulings thereunder) of a jurisdiction or any political...

  • Page 296
    ... and agreed to by Lessees and Lessor on the Lease Closing Date as the same may be amended from time to time in accordance with Section 2.14 ( Updates to Devices Subject to Device Leases and Data File) of this Agreement; " Defaulted Customer Receivable " means any Customer Receivable, or any part...

  • Page 297
    ... Device Lease Schedule; " Device Lease Payment Date " means the last Business Day of a calendar month unless otherwise provided in the Device Lease Schedules; " Device Lease Schedule " means a schedule substantially in the form of Schedule 1 to this Agreement and initially included in the Data File...

  • Page 298
    ... to normal use. Functional Criteria (i) (ii) (iii) (iv) (v) (c) such Device must be in a standard "working" condition, able to charge and power on and perform all core functions; such Device has no activation locks (i.e. not network or iCloud locked); Customer data must be cleared; such Device's LCD...

  • Page 299
    ... rental payments under any Customer Lease; and agrees to the terms of a return that are less favorable to Lessor than as set out in the returns policy at www.sprint.com/returns (as in existence on the Lease Closing Date); (b) (c) (d) (e) (f) (g) (h) " Eligible Devices " means Apple: (a) iPhone...

  • Page 300
    ...Lease"; the transfer of which pursuant to the Transfer Agreements does not violate or contravene any Law or any related Transaction Document; which is denominated and payable only in U.S. Dollars in the United States to any Sprint Party; that (i) is in full force and effect and constitutes the legal...

  • Page 301
    ...the iPhone Forever Program; all sales taxes to be paid in connection with the origination of such Customer Receivable have been fully paid or will be scheduled to be fully paid upon payment of installments on such Customer Lease to the extent required by applicable Laws; the Customer Receivable with...

  • Page 302
    ...outstanding) agree on a different date; " Finance Parties " has the meaning given to that term in the Servicing Agreement; " First Step Transfer Agreement " means the Amended and Restated First Step Transfer Agreement (Tranche 1), dated as of the date hereof and effective as of the Amendment Closing...

  • Page 303
    ...of directors (or any board or Person holding similar rights to control the activities of such Person) shall vote to implement any of the foregoing; " iPhone Forever Program " means the program offered by the Originators or the Servicer pursuant to which a Customer may, if such Customer has agreed to...

  • Page 304
    ..., and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law; " Lease Closing Date " means December 2, 2015; " Lease Default " means an event or...

  • Page 305
    ...the Device Return Condition, is the same Type (or a Type with a higher Device Residual Value) as the exchanged Device, and with respect to which the scheduled Customer Receivables under the modified Customer Lease are not less in amount, frequency and number than under the Customer Lease immediately...

  • Page 306
    ...-Return Remedies Commencement Date " means: (a) (b) (c) in relation to a non-payment of any amount due under a Customer Lease, the date on which Servicer suspends service to the relevant Customer in accordance with the Credit and Collection Policies; in relation to Device that is Non-Returned Device...

  • Page 307
    ... applies to such debtor's Customer Receivables under Section 362 of the Bankruptcy Code; " PUK " means personal identification number unlock key; " Records " means all contracts (including the Customer Lease), if any, and other documents, purchase orders, invoices, agreements, books, records and any...

  • Page 308
    ... " means to the extent a Sprint Party has received a Device from a Customer, the period ending 30 days after the earlier of (a) the last day of the Scheduled Customer Lease Term for such Device, and (b) the actual receipt by a Sprint Party of such Device; " Responsible Officer " means, as applicable...

  • Page 309
    ... " Scheduled Device Lease Term " means, with respect to any Device Lease, the period commencing on the Device Lease Commencement Date and ending on the last day of the Scheduled Customer Lease Term; " Scheduled Monthly Reporting Date " has the meaning given to that term under the Servicing Agreement...

  • Page 310
    ... the Amendment Closing Date, among Lessor, Servicer, Lessees and Collateral Agent; " Settlement Date " has the meaning given to that term in the MLS Intercreditor Agreement; " SoftBank " means SoftBank Corp.; " Sprint " means Sprint Corporation, a Delaware corporation; " Sprint Guarantee " means the...

  • Page 311
    ... directors, managers, trustees or other voting members of the governing body of such Person (other than stock or other ownership or equity interests having such power only by reason of the happening of a contingency); and " Waterfall " has the meaning given to that term under the Servicing Agreement...

  • Page 312
    ... meanings assigned to such terms in the Master Lease Agreement), by and among the Lessees, Servicer, Performance Beneficiary and Collateral Agent, as supplemented by each Device Lease Schedule (the Master Lease Agreement, together with each Device Lease Schedule agreed as of the Lease Closing Date...

  • Page 313
    ... and local income tax purposes, and thus specifically that (i) the Cash Purchase Price paid under the Second Step Transfer Agreement at closing be treated for such purposes as amounts loaned by Performance Beneficiary for which the Devices provide security and (ii) the Rental Payments payable to...

  • Page 314
    ... with, the Master Lease Agreement, the other Transaction Documents or any documents related hereto or thereto, (b) any change in the existence, formation or ownership of, or the bankruptcy or insolvency of, any Covered Entity, (c) any extension, renewal, settlement, compromise, exchange, waiver or...

  • Page 315
    ... Warranties . Performance Support Provider represents and warrants to Performance Beneficiary as of the Lease Closing Date and as of the Amendment Closing Date, as follows: (a) Organization and Good Standing . It has been duly organized and is validly existing as a corporation in good standing under...

  • Page 316
    ...March 31, 2015, there has been no material adverse change in the business, assets, operations or financial condition of Performance Support Provider and its Subsidiaries, taken as a whole. (i) Accurate Reports . None of the reports, financial statements, certificates or other information (other than...

  • Page 317
    ... Effect. As used in this Section 3(j) , the following terms shall have the following meanings: " Code " means the Internal Revenue Code of 1986, as amended. " ERISA " means the U.S. Employee Retirement Income Security Act of 1974. " ERISA Affiliate " means, with respect to any Person, any trade...

  • Page 318
    ... means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. (k) Tax Returns and Payments . It has filed all federal income tax returns and all other material tax returns...

  • Page 319
    ... first three fiscal quarters of each fiscal year, its Form 10-Q as filed with the SEC. (ii) Annual Financial Statements . Within 75 days after the end of each of its fiscal years, the audited consolidated statements of operations, changes in stockholders' equity and cash flows of Performance Support...

  • Page 320
    ... and conditions, purchase order or invoice) related to any rights or obligations of any party under a Customer Lease, subject to the Credit and Collection Policy. (g) Leasing Program . It will not and will cause its Affiliates not to discontinue the leasing program relating to the Devices or Related...

  • Page 321
    ... condition of any Customer Lease except in accordance with Section 8.2(a) of the Servicing Agreement. Section 5. Miscellaneous . (a) Each of Performance Support Provider and Performance Beneficiary agrees that any payments hereunder will be made to the MLS Collection Account (Tranche 1) on the date...

  • Page 322
    ... ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENT, (B) AGREES THAT ALL CLAIMS IN...

  • Page 323
    ... hereto hereby agrees that no party hereto shall be deemed to be the drafter of this Agreement. Section 9. Expenses . Performance Support Provider agrees to pay on demand: (a) all reasonable and documented out-of-pocket costs and expenses incurred by Performance Beneficiary in connection with any...

  • Page 324
    ... have hereunder or under applicable Law, Performance Support Provider agrees to indemnify and hold harmless each Lessee Indemnitee forthwith and on demand from and against any and all damages, losses, claims, liabilities and related costs and expenses (including all filing fees, if any), including...

  • Page 325
    ... financial or credit condition or financial default, of the related Customer. Section 11. Addresses for Notices . The provisions of Section 21 (Notices) of the MLS Intercreditor Agreement shall apply as if fully set forth herein. Section 12. Mobile Leasing Solutions as Series LLC . Each Party hereto...

  • Page 326
    IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date first written above. SPRINT CORPORATION By: /s/ Janet M. Duncan Name: Janet M. Duncan Title: Vice President and Treasurer MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company, acting for itself and on...

  • Page 327
    ... the meanings assigned to such terms in the Master Lease Agreement), by and among the Lessees, Servicer, Guaranty Beneficiary and Collateral Agent, as supplemented by each Device Lease Schedule (the Master Lease Agreement, together with each Device Lease Schedule agreed as of the Lease Closing Date...

  • Page 328
    ... and local income tax purposes, and thus specifically that (i) the Cash Purchase Price paid under the Second Step Transfer Agreement at closing be treated for such purposes as amounts loaned by Guaranty Beneficiary for which the Devices provide security and (ii) Rental Payments payable to Guaranty...

  • Page 329
    ...by any Lessee under the Second Step Transfer Agreement) or by any party to this Guaranty, the Device Leases, any other Transaction Document or any related documents, (d) the existence of any claim, set-off, counterclaim or other right that Guarantor or any other Person may have against any Lessee or...

  • Page 330
    ...shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. The parties hereto may not assign, delegate or otherwise transfer any rights or obligations hereunder except as permitted under Section 11.5 of the Master Lease Agreement, and, in any event, except...

  • Page 331
    ... ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS IN...

  • Page 332
    ... of the parties hereto hereby agrees that no party hereto shall be deemed to be the drafter of this Guaranty. Section 7. Expenses . Guarantor agrees to pay on demand: (a) all reasonable and documented out-of-pocket costs and expenses incurred by Guaranty Beneficiary in connection with any amendment...

  • Page 333
    ...of the Sprint Parties to receive any further amounts in respect of such obligations and liabilities shall be extinguished and none of the Sprint Parties may take any further action to recover such amounts. For the avoidance of doubt, no recourse shall be had to the assets of Mobile Leasing Solutions...

  • Page 334
    other than the Series 1 Pledged Assets to satisfy the obligations and liabilities of Guaranty Beneficiary under this Guaranty or any other Transaction Document. [Signatures Follow] 8

  • Page 335
    ... hereto have executed this Guaranty as of the date first written above. SPRINT CORPORATION as Guarantor By: /s/ Janet M. Duncan Name: Janet M. Duncan Title: Vice President and Treasurer MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company, acting for itself and on behalf of Series...

  • Page 336
    ... intent to terminate employment with the Company at least 30 days prior to the effective date of such termination. 3. Position and Duties of the Executive. (a) The Executive shall serve as Chief Experience Officer and President National Sales of the Company, and agrees to serve as an officer of any...

  • Page 337
    ... such service, and the Company shall not reduce his compensation by the amount of such fees. 4. Compensation . (a) Base Salary . During the Employment Term, the Company shall pay to the Executive an annual base salary of $500,000 (the "Base Salary"), which Base Salary shall be payable at the times...

  • Page 338
    ... applicable plan or program. (d) Sign-on Compensation (i) Conditioned on the Executive providing evidence verifying the forfeiture of his long-term incentive from his previous employer , the Executive shall receive a sign-on bonus of $500,000 (the "Sign-on Bonus"), less applicable tax withholdings...

  • Page 339
    ... receive 312,500 restricted stock units subject to the terms and conditions specified in the form of Evidence of Award attached as Exhibit A. 5. Benefits . (a) During the Employment Term, the Company shall make available to the Executive, subject to the terms and conditions of the applicable plans...

  • Page 340
    ... any Employee Plans with respect to future periods after the date of such termination or resignation except for the right to receive accrued but unpaid cash compensation and vested benefits under any Employee Plan in accordance with the terms of such Employee Plan and applicable law. (b) Termination...

  • Page 341
    ... date that the Executive becomes eligible to receive comparable benefits from a new employer; (iv) continue for the Payment Period participation in the Company's employee life insurance plans at thenexisting participation and coverage levels, comparable to the terms in effect from time to time for...

  • Page 342
    ...Employment Term expires and during the CIC Severance Protection Period, and the termination constitutes a Separation from Service, subject to the terms of the CIC Severance Plan, the Executive will become entitled to severance compensation and benefits under the CIC Severance Plan as of (x) the date...

  • Page 343
    ... may receive from any other source. The Executive's coverage under the Company's medical, dental, vision and employee life insurance plans will terminate as of the date that the Executive is eligible for comparable benefits from a new employer. The Executive shall notify the Company within 30 days...

  • Page 344
    ... exception, inventions, products, processes, methods, techniques, formulas, compositions, compounds, projects, developments, sales strategies, plans, research data, clinical data, financial data, personnel data, computer programs, customer and supplier lists, trademarks, service marks, copyrights...

  • Page 345
    ... has not already returned) in good condition, on or before five business days subsequent to the earlier of: (i) a request by the Company or (ii) the Executive's termination of employment for any reason or Cause, including for nonrenewal of this Agreement, Disability, termination by the Company...

  • Page 346
    (h) During the Employment Term and following his termination of employment: (i) the Executive shall not, directly or indirectly, make or cause to be made any statements, including but not limited to, comments in books or printed media, to any third parties criticizing or disparaging the Company ...

  • Page 347
    ... person who is an employee, officer or agent of the Company Group, or any of its affiliated, related or subsidiary entities to terminate such relationship; (c) solicit any customer of the Company Group, or any person or entity whose business the Company Group had solicited during the 180-day period...

  • Page 348
    ... Group to personnel or agents employed by competitors, suppliers or customers of the Company Group, and (iv) initiating communications with any person or entity relating to a possible Change in Control. 13. Developments. (a) The Executive acknowledges and agrees that he will make full and prompt...

  • Page 349
    ...within ten days of notice of such termination of payment, the Executive shall return all severance compensation and the value of such benefits, or profits derived or received from such benefits. 15. Continued Availability and Cooperation. (a) Following termination of the Executive's employment, the...

  • Page 350
    ... award attorneys' fees or costs to any Party. (c) The arbitrator shall have no power or authority to make awards or orders granting relief that would not be available to a Party in a court of law. The arbitrator's award is limited by and must comply with this Agreement and applicable federal, state...

  • Page 351
    ... payable under this Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant to any law or government regulation or ruling. 19. Successors and Binding Agreement. (a) The Company will require any successor (whether direct or indirect, by purchase, merger...

  • Page 352
    ... state and federal courts located in Overland Park, Johnson County, Kansas, as well as to the jurisdiction of all courts of which an appeal may be taken from such courts, for the purpose of any suit, action, or other proceeding arising out of, or in connection with, this Agreement or that otherwise...

  • Page 353
    ... of legal fees in connection with execution of this Agreement. (e) The Executive hereby represents and agrees that, during the Restricted Period, if the Executive is offered employment or the opportunity to enter into any business activity, whether as owner, investor, executive, manager, employee...

  • Page 354
    ...and Restated Sprint Corporation Bylaws, as may be amended from (f) "Capped Bonus Award" shall mean the lesser of the annual Target Bonus or actual performance for such fiscal year in accordance with the then existing terms of the STIP, which shall not be payable until the Compensation Committee has...

  • Page 355
    ... for his personal benefit or in connection with his duties for the Company or any Subsidiary; (viii) (ix) current alcohol or prescription drug abuse affecting work performance; current illegal use of drugs; or (x) violation of the Company's Code of Conduct, with written notice of termination by the...

  • Page 356
    ...Plan. "Chief Executive Officer" has the meaning set forth in Section 3(a). (j) "CIC Severance Plan" means the Company's Change in Control Severance Plan, as may be amended from time to time, or any successor plan, program or arrangement thereto. (k) "CIC Severance Protection Period" has the meaning...

  • Page 357
    .... The costs of such qualified medical doctor shall be paid for by the Company. (t) (u) (v) (w) "Effective Date" has the meaning set forth in the preamble. "Employee Plans" has the meaning set forth in Section 5(a). "Employment Term" means the Initial Employment Term and any Renewal Term. "Executive...

  • Page 358
    ... Information" has the meaning set forth in Section 10(a)(i). (jj) "Release" means a release of claims in a form provided to the Executive by the Company in connection with the payment of benefits under this Agreement. (kk) "Release Consideration Period" means the period of time pursuant to the terms...

  • Page 359
    ... to time, or any successor plan, program, arrangement or agreement thereto. (qq) "Specified Employee" shall mean an Executive who is a "specified employee" for purposes of Code Section 409A, as administratively determined by the Board in accordance with the guidance and Treasury regulations issued...

  • Page 360
    ..., the Company has caused this Agreement to be signed by an officer pursuant to the authority of its Board, and the Executive has executed this Agreement, as of the day and year first written above. SPRINT CORPORATION By: /s/ Sandra J. Price Sandra J. Price Senior Vice President - Human Resources...

  • Page 361
    ... relocation policy applicable to senior executives , except that the requirement to list his home in the vicinity of Overland Park for a period of at least 90 days before a corporate buyout of the property commences will be reduced to at least 20 days . In all other respects, the terms, conditions...

  • Page 362
    Exhibit 10.88 SPRINT CORPORATION CHANGE IN CONTROL SEVERANCE PLAN (Effective January 1, 2007 and Amended and Restated Effective January 1, 2008, September 17, 2013, and November 6, 2015)

  • Page 363
    SPRINT CORPORATION CHANGE IN CONTROL SEVERANCE PLAN (Amended and Restated Effective January 1, 2008, September 17, 2013, and November 6, 2015) ... PARTICIPATION SEVERANCE BENEFITS MISCELLANEOUS 21 29 AMENDMENT AND TERMINATION PLAN PARTICIPANTS APPLICABLE BENEFITS AND PERIODS PARTICIPATING EMPLOYERS 31...

  • Page 364
    ...such key employees to make career decisions without undue time pressure and financial uncertainty. The Plan is intended to provide severance compensation and benefits pursuant to the Plan if a Change in Control of the Corporation has occurred and the Participant's employment is either (a) terminated...

  • Page 365
    ... Committee") shall administer the Plan; provided , however , that none of the members of the Compensation Committee will be a Participant. The powers and duties of the Compensation Committee in administering the Plan are set forth in Section 6.02. CIC Severance Plan Revision Date: 11.6.15 2

  • Page 366
    ... Four means such annual base salary in effect (i) on the date immediately preceding the date of the relevant Change in Control or (ii) on the date of the Participant's termination of employment with a Company, whichever is higher. " Board " means the Board of Directors of the Corporation. " Business...

  • Page 367
    ...by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary, and (4) any acquisition of Voting Stock of the Corporation by any Person pursuant to a Business Transaction that complies with clauses...

  • Page 368
    ...majority of the members of the board of directors of the entity resulting from such Business Transaction were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction; or CIC Severance Plan Revision Date: 11.6.15...

  • Page 369
    ... Corporation, a Delaware corporation, or any successor company. " Director " means a member of the Board. " Effective Date " means January 1, 2007. " Employment Agreement " means any written employment agreement between a Company and a Participant. " ERISA " means the Employee Retirement Income...

  • Page 370
    ... section or subsection. " Excise Tax " shall mean, collectively, (i) the tax imposed by Section 4999 of the Code by reason of being "contingent on a change in ownership or control" of the Corporation, within the meaning of Section 280G of the Code, or (ii) any similar tax imposed by state or local...

  • Page 371
    ... " has the meaning set forth in Section 6.08(a). " Parties " has the meaning set fourth in Section 6.08(a). " Participant " means each full-time employee of a Company who is recommended to the Compensation Committee by the Chief Executive Officer for participation in the Plan and whose participation...

  • Page 372
    .... " Renewal Term " has the meaning set forth in Section 5.02. " Separation from Service " means "separation from service" from an Employer as described under Code Section 409A and any governing Internal Revenue Service guidance and Treasury regulations. A Participant who is a Board member does not...

  • Page 373
    ... employee" of the Corporation for purposes of Code Section 409A, as administratively determined by the Board of Directors of the Corporation in accordance with the guidance and Treasury regulations issued under Code Section 409A. " STIP " means the Corporation's short term incentive plan, under...

  • Page 374
    (tt) (uu) " Target Bonus " means a Participant's target (i.e., based on 100% attainment of stated objectives) short-term incentive opportunity under the STIP. " Voting Stock " means securities entitled to vote generally in the election of directors. CIC Severance Plan Revision Date: 11.6.15 11

  • Page 375
    ...any time prior to the six (6) month period preceding the occurrence of a Change in Control, the Compensation Committee may authorize a Company to provide a Participant with written notice of termination of the Participant's designation as a Participant in the Plan . CIC Severance Plan Revision Date...

  • Page 376
    ... the definition of Separation from Service, and such termination of employment or change in status constitutes a Separation from Service. In addition, as a condition of receiving Severance Benefits, the Participant must execute a Release within the Release Consideration Period and deliver it to the...

  • Page 377
    ... to Base Salary and annual short term incentive compensation under an Employment Agreement or Separation Plan to the Participant for any period after the Separation from Service. The CIC Severance Amount is payable on (x) the Executive's Separation from Service date; or (y) for a Pre-CIC Termination...

  • Page 378
    ... from Service occurs before a Change in Control under circumstances constituting a PreCIC Termination, any Base Severance Amount payable under this Plan is reduced by amounts previously paid with respect to Base Salary and annual short term incentive compensation under an Employment Agreement or...

  • Page 379
    ... Service (the "Delay Period"). The postponed payments will be paid to the Participant on the last day of the Delay Period. No Representations or Warranties . The Corporation does not, however, assume any economic burdens associated with Code Section 409A. Although the (b) (c) CIC Severance Plan...

  • Page 380
    ...Participant for such fees, costs and expenses, promptly upon presentment of appropriate documentation, but only if, to the extent and at the earliest date(s) such payment or reimbursement does not violate Code Section 409A. 4.05 Applicable Provisions if Excise Tax Applies Anything in the Plan to the...

  • Page 381
    ...'s federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Corporation, evidencing such filing and payment. The Corporation...

  • Page 382
    ...to comply with changes in applicable laws or regulations, including as set forth in Section 4.02. 5.02 Termination The term of the Plan shall be for an initial term of two (2) years commencing on the Effective Date and shall continue through December 31, 2008 (the "Initial Term"); provided , however...

  • Page 383
    ... questions relating to the eligibility of Participants; determine the amount of benefits, if any, payable to Participants under the Plan and determine the time and manner in which such benefits are to be paid; engage any administrative, legal, tax, actuarial, accounting, clerical, or other services...

  • Page 384
    ... was based, and provide any other additional information, as applicable, required by 29 Code of Federal Regulations Section 2560.503-1 applicable to the Plan. With respect to any claim for benefits which, under the terms of the Plan, are provided under another employee benefit plan maintained...

  • Page 385
    ... related documents on file in its administrative offices, and such documents will be available for review by a Participant or a designated representative of the Participant at any reasonable time during regular business hours. Reasonable copying charges for such documents will be paid by the party...

  • Page 386
    ..., the location will be Kansas, unless the Parties agree otherwise. (b) Such Company shall reimburse the Participant for legal fees and expenses incurred in connection with a dispute resolved under this Section 6.08. The arbitrator shall not have authority to award attorneys' fees or costs to either...

  • Page 387
    ... employee benefit plan offered to him by the Corporation or a Subsidiary or affiliate of the Corporation (as appropriate) as of the date of the Participant's termination of employment, except that effective with respect to any benefits payable to a Participant in connection with a Change in Control...

  • Page 388
    ... communicated to the Corporation in writing or (ii) in the case of a Participant who is an employee, distributed to the employee at his or her place of employment in compliance with 29 Code of Federal Regulations Section 2520.104b-1(c). In the case of any Company, mailed notices shall be addressed...

  • Page 389
    ... and employee life insurance plans will terminate as of the date that the Participant becomes eligible for comparable benefits of another employer. 6.17 Withholding of Taxes Any Company will withhold from any amounts payable under this Plan all federal, state and local tax or other taxes as such...

  • Page 390
    ... (1) the annual meeting of Sprint shareholders in 2017, (2) one year from the Date of Grant, and (3) your Separation from Service with the Board because of your death, Disability or involuntary Separation from Service following a Change in Control of the Corporation. /2/ The number of shares is not...

  • Page 391
    ... millions) 191 Days Ended July 10, 2013 Predecessor Three Months Ended March 31, 2013 Years Ended December 31, 2012 2011 Earnings (loss): (Loss) income from continuing operations before income taxes $ (1,854) Equity in losses of unconsolidated investments, net - Fixed charges Interest capitalized...

  • Page 392
    ... Alamosa Wisconsin, LLC Alda Wireless Holdings, LLC American PCS Communications, LLC American PCS, L.P. American Personal Communications Holdings, Inc. American Telecasting Development, LLC American Telecasting of Anchorage, LLC American Telecasting of Bend, LLC American Telecasting of Columbus, LLC...

  • Page 393
    .... Bright Personal Communications Services, LLC Broadcast Cable, LLC C FON Corporation Caroline Ventures, Inc. Cedar TowerCo, LLC Clear Global Services LLC Clear Management Services LLC Clear Partner Holdings LLC Clear Share I, LLC Clear Share II, LLC Clear Share III, LLC Clear Wireless LLC Clearwire...

  • Page 394
    ... One Leased Realty Corporation iPCS Equipment, Inc. iPCS Wireless, Inc. IWO Holdings, Inc. Kennewick Licensing, LLC Louisiana Unwired, LLC Machine License Holding, LLC MinorCo, L.P. Nextel Communications of the Mid-Atlantic, Inc. Nextel Communications, Inc. Nextel Data Investments 1, Inc. Nextel...

  • Page 395
    ...XXII LLC SN Holdings (BR I) LLC SN UHC 1, Inc. SN UHC 2, Inc. SN UHC 3, Inc. SN UHC 4, Inc. SN UHC 5, Inc. Southwest PCS Properties, LLC ...Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Mexico Kansas ...

  • Page 396
    ...Inc. Sprint Communications, Inc. (formerly Sprint Nextel Corporation) Sprint Corporation Sprint Corporation (Inactive) Sprint eBusiness, Inc. Sprint Enterprise Mobility, Inc. Sprint Enterprise Network Services, Inc. Sprint Enterprises, L.P. Sprint eWireless, Inc. Sprint Federal Management LLC Sprint...

  • Page 397
    ...Spectrum L.P. Sprint Spectrum Realty Company, L.P. Sprint TELECENTERs, Inc. Sprint Telecom India Private Limited Sprint Telephony PCS, L.P. Sprint (Thailand) Limited Sprint Ventures, Inc. Sprint Wavepath Holdings, Inc. Sprint WBC of New York, Inc. Sprint/United Management Company SprintCom Equipment...

  • Page 398
    ... Acquisition Corporation TDI Acquisition Sub, LLC Texas Telecommunications, LLC Texas Unwired Transworld Telecom II, LLC UCOM, Inc. United Telecommunications, Inc. Unrestricted Subsidiary Funding Company US Telecom, Inc. USST of Texas, Inc. Utelcom, Inc. Velocita Wireless Holding Corp. Virgin Mobile...

  • Page 399
    ..., 2013, SoftBank Corp. completed a merger with Sprint Communications, Inc. (formerly Sprint Nextel Corporation) by which Sprint Corporation was the acquiring company of Sprint Communications, Inc. and applied the acquisition method of accounting as of the merger date) appearing in the Annual Report...

  • Page 400
    ... 190 days ended July 9, 2013 (which report expresses an unmodified opinion on the consolidated financial statements and includes an Emphasis of Matter paragraph relating to the acquisition of Clearwire Corporation by Sprint Communications, Inc. on July 9, 2013) appearing in the Annual Report on Form...

  • Page 401
    ... our report dated February 21, 2014, relating to the consolidated financial statements of Clearwire Corporation and subsidiaries as of December 31, 2012 and for the two years ending December 31, 2012 appearing in the Annual Report on Form 10-K of Sprint Corporation for the year ended March 31, 2016...

  • Page 402
    ...' equity of Sprint Communications, Inc. (formerly Sprint Nextel Corporation) and subsidiaries (the Predecessor Company) for the 191 day period ended July 10, 2013, which report appears in the March 31, 2016 annual report on Form 10-K of Sprint Corporation. /s/ KPMG LLP Kansas City, Missouri...

  • Page 403
    ...summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 17, 2016 /s/ Marcelo Claure Marcelo Claure Chief Executive Officer

  • Page 404
    ...summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 17, 2016 /s/ Tarek Robbiati Tarek Robbiati Chief Financial Officer

  • Page 405
    ... Sarbanes-Oxley Act of 2002 In connection with the annual report of Sprint Corporation (the "Company") on Form 10-K for the period ended March 31, 2016 , as filed with the Securities and Exchange Commission (the "Report"), I, Marcelo Claure, Chief Executive Officer of the Company, certify, pursuant...

  • Page 406
    ... Sarbanes-Oxley Act of 2002 In connection with the annual report of Sprint Corporation (the "Company") on Form 10-K for the period ended March 31, 2016 , as filed with the Securities and Exchange Commission (the "Report"), I, Tarek Robbiati, Chief Financial Officer of the Company, certify, pursuant...