Sprint - Nextel 2015 Annual Report Download - page 34

Table of Contents
Nextel platform. In addition, we recognized $53 million of payments that will continue to be made under our backhaul access contracts for which we will no longer
be receiving any economic benefit, and of which $19 million was recognized as "Cost of services." The $93 million reflected in "Other" included $100 million of
business combination fees paid to unrelated parties in connection with the transactions with SoftBank and Clearwire and are classified within selling, general and
administrative expense in our consolidated statements of operations. This is partially offset by $7 million of reimbursements related to 2012 hurricane-related
charges recorded as a contra expense in cost of services in our consolidated statements of operations.
Predecessor191-dayPeriodEndedJuly10,2013
Other, net reflected an expense of $683 million in the Predecessor 191-day period ended July 10, 2013. Exit costs included lease exit costs of $478
million primarily associated with taking certain Nextel platform sites off-air by June 30, 2013 and $151 million 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. Of the $151 million of future payments, $35 million was
recognized as "Cost of services" and $116 million was recognized in "Severance and exit costs." We also recognized $58 million of severance related to reductions
in force. "Other" included $53 million of business combination fees paid to unrelated parties as described above, partially offset by a favorable ruling by the Texas
Supreme Court in connection with the taxation of E911 services, which resulted in a non-cash benefit of $22 million.
PredecessorThree-MonthPeriodEndedMarch31,2013
Other, net reflected an expense of $3 million in the Predecessor three-month period ended March 31, 2013 . Severance and exit costs $17 million of
severance primarily associated with selective reductions 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 Expense
SuccessorYearEndedMarch31,2016andSuccessorYearEndedMarch31,2015
Interest expense increased $131 million , or 6% , in the year ended March 31, 2016 compared to the same period in 2015 , primarily due to interest
associated with $1.5 billion aggregate principal amount of notes issued in February 2015. The effective interest rate, which includes capitalized interest, on the
weighted average long-term debt balance of $33.8 billion was 6.5% in the year ended March 31, 2016 . See “Liquidity and Capital Resources” for more
information on the Company's financing activities.
SuccessorYearEndedMarch31,2015andSuccessorYearEndedDecember31,2013
Interest expense increased $1.1 billion , or 123% , in the year ended March 31, 2015 compared to the year ended December 31, 2013 primarily due to
interest associated with debt of $9.0 billion issued in September and December 2013 as well as comparing a full calendar year to a shortened Post-merger period.
The effective interest rate, which includes capitalized interest, on the weighted average long-term debt balance of $32.5 billion was 6.5% in the year ended
March 31, 2015 compared to 7.7% for the Combined year ended December 31, 2013. The decrease in the effective interest rate is primarily due to interest expense
of $247 million recognized in the Combined year ended December 31, 2013 related to the beneficial conversion feature on the $3.1 billion Bond. See "Liquidity
and Capital Resources" for more information on the Company's financing activities.
SuccessorThree-MonthTransitionPeriodEndedMarch31,2014andPredecessorThree-MonthPeriodEndedMarch31,2013
Interest expense increased $84 million , or 19% , in the Successor three-month transition period ended March 31, 2014 compared to the same
Predecessor period in 2013 , primarily due to interest associated with debt of $9.0 billion issued in September and December 2013 and the debt assumed as a result
of the Clearwire acquisition. This was partially offset by premium amortization which was the result of our debt being revalued in connection with the SoftBank
merger. The effective interest rate, which includes capitalized interest, on the weighted average long-term debt balance of $32.9 billion and $24.5 billion was 6.4%
and 7.3% for the Successor three-month transition period ended March 31, 2014 and the Predecessor three-month period ended March 31, 2013 , respectively. See
"Liquidity and Capital Resources" for more information on the Company's financing activities.
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