Sprint - Nextel 2015 Annual Report Download - page 29

Table of Contents
customers. In addition, we have established a Customer Experience Office to support our focus on net promoter score as our key measure in customer satisfaction.
Network
We will continue to take advantage of our deep spectrum position to deploy our 4G LTE Plus network. LTE Plus is currently available in over 200
markets leveraging carrier aggregation and beamforming for better data performance. Our deep 2.5GHz holdings will allow us to dedicate spectrum to deploy
60MHz wide channels for even faster data speeds. We plan to densify the network through the use of small cell technology, femto cells, in-building solutions and
repeaters as well as continuing to use traditional macro sites. This approach builds the foundation for deployment of 5G wireless technology in the future while
continuing to enhance the customer experience by adding data capacity, increasing the wireless data speeds available to our customers and improving network
coverage for both voice and data services. As we continue to refine our network strategy and evaluate other potential network initiatives, we may incur future
material charges associated with lease and access exit costs, loss from asset dispositions or accelerated depreciation, among others.
Shentel Transaction
On August 10, 2015, Shenandoah Telecommunications Company (Shentel) entered into a definitive agreement to acquire one of our wholesale partners,
NTELOS Holdings Corp (nTelos). In connection with this definitive agreement, we entered into a series of agreements with Shentel, subject to regulatory
approval, to, among other things, acquire certain assets such as spectrum, terminate our existing wholesale arrangement with nTelos, and amend our existing
affiliate agreement with Shentel to include, among other things, the subscribers formerly under the wholesale arrangement with nTelos. The agreements will also
expand the area in which Shentel provides wireless service to Sprint customers and will provide for more favorable economic terms. In April 2016, we received
regulatory approval and the transaction was closed in May 2016. The total consideration for this transaction included approximately $195 million, 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 the termination of our pre-existing wholesale
arrangement with nTelos.
RESULTS OF OPERATIONS
On July 9, 2013, Sprint Nextel Corporation (Sprint Nextel) completed the acquisition of the remaining equity interests in Clearwire Corporation and its
consolidated subsidiary Clearwire Communications LLC (together "Clearwire") that it did not previously own (Clearwire Acquisition) in an all cash transaction.
On July 10, 2013, SoftBank Corp. , which subsequently changed its name to SoftBank Group Corp., and certain of its wholly-owned subsidiaries (together,
"SoftBank") completed the merger (SoftBank Merger) with Sprint Nextel contemplated by the Agreement and Plan of Merger, dated as of October 15, 2012 (as
amended, the Merger Agreement), and the Bond Purchase Agreement, dated as of October 15, 2012 (as amended, the Bond Agreement). As a result of the
SoftBank Merger, Starburst II became the parent company of Sprint Nextel. Immediately thereafter, Starburst II changed its name to Sprint Corporation and Sprint
Nextel changed its name to Sprint Communications, Inc.
As a result of these transactions, the assets and liabilities of Sprint Communications and Clearwire were adjusted to estimated fair value on the
respective closing dates. The Company's financial statement presentations distinguish between the predecessor period (Predecessor) relating to Sprint
Communications for periods prior to the SoftBank Merger and the successor period (Successor) relating to Sprint Corporation, formerly known as Starburst II, for
periods subsequent to the incorporation of Starburst II on October 5, 2012. The Successor financial information includes the activity and accounts of Sprint
Corporation, which includes the activity and accounts of Starburst II prior to the close of the SoftBank Merger on July 10, 2013 and Sprint Communications,
inclusive of the consolidation of Clearwire Corporation, prospectively following completion of the SoftBank Merger, beginning on July 11, 2013 (Post-merger
period). The accounts and operating activity of Starburst II prior to the close of the SoftBank Merger primarily related to merger expenses that were incurred in
connection with the SoftBank Merger (recognized in selling, general and administrative expense) and interest related to the $3.1 billion Bond Sprint
Communications, Inc. issued to Starburst II. The Predecessor financial information represents the historical basis of presentation for Sprint Communications for all
periods prior to the SoftBank Merger.
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 to period comparison, in addition to presenting and discussing our historical results of operations as reported in our consolidated financial statements in
accordance with accounting principles generally accepted in the United States (U.S. GAAP), we have combined the 2013 Predecessor financial information with
the 2013 Successor financial information, on an unaudited combined basis (Combined). The unaudited Combined data consists of Predecessor
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