Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________

FORM 8-K

_______________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 27, 2020

_______________________________________

SPRINT CORPORATION

(Exact name of Registrant as specified in its charter)

_______________________________________




Delaware	1-04721	46-1170005
(State of Incorporation)	(Commission File Number)	(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 (913) 794-1091

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



☒	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value	S	New York Stock Exchange

Item 2.02 Results of Operations and Financial Condition.

On January 27, 2020, Sprint Corporation announced its results for the fiscal third quarter ended December 31, 2019. The press release is furnished as Exhibit 99.1, its Quarterly Investor Update is attached as Exhibit 99.2, and the Message from Management is attached as Exhibit 99.3.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished with this report:




Exhibit No.			Description
99.1			Press Release Announcing Results for the Fiscal Third Quarter Ended December 31, 2019
99.2			Quarterly Investor Update
99.3			Message from Management
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	SPRINT CORPORATION

Date: January 27, 2020			/s/ Stefan K. Schnopp
		By:	Stefan K. Schnopp
			Corporate Secretary

EXHIBIT INDEX




Number			Exhibit
99.1			Press Release Announcing Results for the Fiscal Third Quarter Ended December 31, 2019
99.2			Quarterly Investor Update
99.3			Message from Management
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)



News Release

SPRINT REPORTS FISCAL YEAR 2019 THIRD QUARTER RESULTS


•	Wireless service revenue of $5.2 billion


◦	Postpaid wireless service revenue of $4.2 billion was stable sequentially and year-over-year


◦	Postpaid average revenue per account (ARPA) of $124.80 and postpaid phone average revenue per user (ARPU) of $50.37 were stable sequentially and year-over-year


•	Net loss of $120 million, operating income of $66 million, and adjusted EBITDA* of $2.5 billion


•	Postpaid net additions of 494,000


◦	10^th consecutive quarter of net additions


◦	Data device net additions of 609,000 were partially offset by phone net losses of 115,000


◦	Average postpaid accounts of 11.3 million grew sequentially and year-over-year for the third consecutive quarter


•	Digital capabilities driving higher sales, better customer experience, and cost efficiencies


◦	Postpaid gross additions in digital channels increased 80 percent year-over-year


◦	More than 25 percent of all targeted customer care web chats are performed by virtual agents using artificial intelligence


•	Continued execution of Next-Gen Network plan


◦	Second fastest network and most improved operator based on national average download speeds


◦	True Mobile 5G coverage expanded to 20 million people

OVERLAND PARK, Kan. - Jan. 27, 2020 - Sprint Corporation (NYSE: S) today reported results for the fiscal year 2019 third quarter, including stability in postpaid wireless service revenue and continued growth in postpaid net additions. The company also reported a net loss of $120 million, operating income of $66 million, and adjusted EBITDA* of $2.5 billion.

“I continue to be impressed by the commitment of Sprint employees to deliver results during this period of uncertainty,” said Sprint CEO Michel Combes. “As we await a decision in the state attorneys general lawsuit, I continue to believe the merger with T-Mobile is the best way to deliver the benefits of competition to American consumers.”

Stable Wireless Service Revenue and Cost Optimization

Postpaid wireless service revenue of $4.2 billion remained stable sequentially and year-over-year as Sprint continued to focus on promoting its feature-rich Unlimited Plus and Unlimited Premium rate plans, selling additional data devices, and being more selective in its acquisition of postpaid phone customers. Postpaid net additions of 494,000 and average postpaid accounts of 11.3 million improved sequentially and year-over-year, while postpaid ARPA of $124.80 remained stable.

Total wireless service revenue of $5.2 billion was negatively impacted by the continued amortization of prepaid contract balances as a result of adopting the new revenue standard last year, while the year-ago period included Lifeline revenue related to federal and state government subsidies claimed as a result of an inadvertent coding error. Adjusting for these impacts, total wireless service revenue was stable year-over-year and sequentially.



News Release

The company continued its focus on cost optimization during the quarter by driving year-over-year gross reductions in cost of services and selling, general and administrative expenses, with most of the reductions coming from network optimization. These reductions have been offset by incremental costs associated with network coverage and capacity improvements, along with other customer experience initiatives.

Digital Capabilities Driving Higher Sales, Better Customer Experience, and Cost Efficiencies

Sprint continued to enhance its digital capabilities and transform the way it engages with customers.


•	Postpaid gross additions in digital channels increased 80 percent year-over-year.


•	Postpaid upgrades in digital channels increased more than 40 percent year-over-year.


•	More than 25 percent of all targeted customer care web chats are performed by virtual agents using artificial intelligence.


•	Web conversions improved and orders from digital media more than doubled year-over-year.

These digital initiatives have contributed to more efficient acquisition of new customers, along with lower customer care costs.

Network Improves and True Mobile 5G Coverage Expands to 20 Million People

Sprint made continued progress on executing its focused Next-Gen Network plan.


•	Sprint has 2.5 GHz spectrum substantially deployed on its existing macro sites.


•	The company has continued the rollout of Massive MIMO, a breakthrough technology that improves network capacity, enhances LTE performance, and allows for simultaneous use of spectrum for LTE and 5G. The company has thousands of Massive MIMO sites on-air across the country.


•	Sprint has approximately 37,000 outdoor small cells deployed including both mini macros and strand mounts.

These deployments have driven performance improvements and increased capacity in Sprint’s network, as seen in Ookla Speedtest Intelligence data which shows Sprint having the second fastest network¹ and being the most improved operator in calendar 2019 with a 45 percent year-over-year increase in its national average download speeds.² Additionally, the company is focused on improving the end-to-end network quality for its customers.

Sprint expanded its True Mobile 5G network coverage to approximately 20 million people within nine metropolitan areas - Atlanta, Chicago, Dallas-Fort Worth, Houston, Kansas City, Los Angeles, New York City, Phoenix and Washington, D.C. In these areas, customers with 5G devices are experiencing dramatically faster speeds with Sprint’s average 5G download speed of 215 Mbps more than 5X faster than Sprint LTE.³

Additional Information


•	Additional information about results, including a message from management, is available on the Investor Relations website at www.sprint.com/investors.

Contact Information


•	Media contact: Lisa Belot, Media.Relations@sprint.com


•	Investor contact: Jud Henry, Investor.Relations@sprint.com

_____________________________

¹ Based on analysis by Ookla® of Speedtest Intelligence® data average download speeds from Q4 2019 for All Mobile Results. Ookla® trademarks used under license and reprinted with permission.

²Based on analysis by Ookla® of Speedtest Intelligence® data average download speeds from December 2018 to December 2019 for All Mobile Results. Ookla® trademarks used under license and reprinted with permission.

³ Based on analysis by Ookla® of Speedtest Intelligence® data average download speeds for December 2019 of 4G (LTE) and 5G Beta (NR) results. Ookla® trademarks used under license and reprinted with permission.



News Release

Wireless Operating Statistics (Unaudited)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18
Net additions (losses) (in thousands)
Postpaid^(a)	494			273			309			901			541
Postpaid phone	(115		)	(91		)	(26		)	(334		)	27
Prepaid ^(a)	(174		)	(207		)	(173		)	(550		)	(184		)
Wholesale and affiliate	(71		)	(462		)	(88		)	(673		)	(272		)
Total wireless net additions (losses)	249			(396		)	48			(322		)	85

End of period connections (in thousands)
Postpaid ^{(a) (b) (c) (d)}	33,842			33,348			32,605			33,842			32,605
Postpaid phone ^{(b) (c)}	26,264			26,379			26,787			26,264			26,787
Prepaid ^{(a) (b) (c)}	8,266			8,440			8,846			8,266			8,846
Wholesale and affiliate ^{(c) (d) (e)}	12,057			12,128			13,044			12,057			13,044
Total end of period connections	54,165			53,916			54,495			54,165			54,495

Churn
Postpaid	1.98		%	1.87		%	1.85		%	1.87		%	1.75		%
Postpaid phone	2.06		%	1.91		%	1.84		%	1.91		%	1.71		%
Prepaid	4.92		%	4.94		%	4.83		%	4.70		%	4.58		%

Supplemental data - connected devices
End of period connections (in thousands)
Retail postpaid	4,050			3,718			2,821			4,050			2,821
Wholesale and affiliate	9,419			9,585			10,563			9,419			10,563
Total	13,469			13,303			13,384			13,469			13,384

ARPU^(f)
Postpaid	$	42.02		$	42.30		$	43.64		$	42.29		$	43.73
Postpaid phone	$	50.37		$	50.10		$	50.01		$	50.11		$	49.91
Prepaid	$	29.63		$	30.97		$	34.53		$	30.93		$	35.40

ARPA ^(g)
Average postpaid accounts (in thousands)	11,295			11,265			11,196			11,256			11,193
Postpaid ARPA	$	124.80		$	124.81		$	126.14		$	124.83		$	125.87

^(a)During the three and nine-month periods ended December 31, 2019, net subscriber additions under the non-Sprint branded postpaid plan offering were 108,000 and 331,000, respectively, and are included in total retail postpaid subscribers above. As of December 31, 2019, end of period subscribers under the non-Sprint branded postpaid plan offering were 885,000 and are included in total retail postpaid subscribers above.

^(b)During the three-month period ended June 30, 2018, we ceased selling devices in our installment billing program under one of our brands and as a result, 45,000 subscribers were migrated back to prepaid from postpaid.

^(c)As a result of our affiliate agreement with Shentel, certain subscribers have been transferred from postpaid and prepaid to affiliates. During the three-month period ended June 30, 2018, 10,000 and 4,000 subscribers were transferred from postpaid and prepaid, respectively, to affiliates.

^(d)During the three-month period ended June 30, 2019, one of our postpaid customers purchased a wholesale MVNO and as a result, 167,000 subscribers were transferred from the wholesale to postpaid subscriber base.

^(e)On April 1, 2018, approximately 115,000 wholesale subscribers were removed from the subscriber base with no impact to revenue. During the three-month period ended December 31, 2018, an additional 100,000 wholesale subscribers were removed from the subscriber base with no impact to revenue.

^(f)ARPU is calculated by dividing service revenue by the sum of the monthly average number of connections in the applicable service category. Changes in average monthly service revenue reflect connections 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 connections, plus the net effect of average monthly revenue generated by new connections and deactivating connections. Postpaid phone ARPU represents revenues related to our postpaid phone connections.

^(g)ARPA is calculated by dividing postpaid service revenue by the sum of the monthly average number of retail postpaid accounts.



News Release

Wireless Device Financing Summary (Unaudited)

(Millions, except sales, connections, and leased devices in property, plant and equipment)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18

Postpaid activations (in thousands)	4,773			3,983			4,462			12,231			11,707
Postpaid activations financed	80		%	78		%	81		%	79		%	82		%
Postpaid activations - operating leases	61		%	59		%	63		%	60		%	64		%

Installment plans
Installment sales financed	$	541		$	433		$	357		$	1,391		$	825
Installment billings	$	230		$	214		$	251		$	653		$	868
Installment receivables, net	$	1,250		$	1,110		$	894		$	1,250		$	894

Equipment rentals and depreciation - equipment rentals
Equipment rentals	$	1,292		$	1,330		$	1,313		$	3,981		$	3,778
Depreciation - equipment rentals	$	1,011		$	1,056		$	1,137		$	3,096		$	3,454

Leased device additions
Cash paid for capital expenditures - leased devices	$	2,147		$	1,786		$	2,215		$	5,449		$	5,739

Leased devices
Leased devices in property, plant and equipment, net	$	6,748		$	6,378		$	6,683		$	6,748		$	6,683

Leased device units
Leased devices in property, plant and equipment (units in thousands)	15,714			15,566			15,897			15,714			15,897

Leased device and receivables financings net proceeds
Proceeds	$	1,350		$	2,080		$	2,200		$	4,550		$	5,083
Repayments	(747		)	(2,210		)	(1,900		)	(3,847		)	(4,170		)
Net proceeds (repayments) of financings related to devices and receivables	$	603		$	(130	)	$	300		$	703		$	913



News Release

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Millions, except per share data)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18

Net operating revenues
Service revenue	$	5,416		$	5,273		$	5,699		$	16,252		$	17,201
Equipment sales	1,372			1,192			1,589			3,784			4,180
Equipment rentals	1,292			1,330			1,313			3,981			3,778
Total net operating revenues	8,080			7,795			8,601			24,017			25,159
Net operating expenses
Cost of services (exclusive of depreciation and amortization below)	1,718			1,775			1,648			5,203			5,019
Cost of equipment sales	1,646			1,359			1,734			4,346			4,521
Cost of equipment rentals (exclusive of depreciation below)	201			240			182			666			457
Selling, general and administrative	2,045			1,936			2,003			5,888			5,731
Depreciation - network and other	1,071			1,065			1,088			3,256			3,132
Depreciation - equipment rentals	1,011			1,056			1,137			3,096			3,454
Amortization	474			106			145			698			475
Other, net	(152		)	21			185			106			298
Total net operating expenses	8,014			7,558			8,122			23,259			23,087
Operating income	66			237			479			758			2,072
Interest expense	(589		)	(594		)	(664		)	(1,802		)	(1,934		)
Other (expense) income, net	(6		)	14			32			36			153
(Loss) income before income taxes	(529		)	(343		)	(153		)	(1,008		)	291
Income tax benefit (expense)	408			64			8			494			(56		)
Net (loss) income	(121		)	(279		)	(145		)	(514		)	235
Less: Net loss (income) attributable to noncontrolling interests	1			5			4			9			(4		)
Net (loss) income attributable to Sprint Corporation	$	(120	)	$	(274	)	$	(141	)	$	(505	)	$	231

Basic net (loss) income per common share attributable to Sprint Corporation	$	(0.03	)	$	(0.07	)	$	(0.03	)	$	(0.12	)	$	0.06
Diluted net (loss) income per common share attributable to Sprint Corporation	$	(0.03	)	$	(0.07	)	$	(0.03	)	$	(0.12	)	$	0.06
Basic weighted average common shares outstanding	4,109			4,098			4,078			4,098			4,050
Diluted weighted average common shares outstanding	4,109			4,098			4,078			4,098			4,110

Effective tax rate	77.1		%	18.7		%	5.2		%	49.0		%	19.2		%

NON-GAAP RECONCILIATION - NET (LOSS) INCOME TO ADJUSTED EBITDA* (Unaudited)

(Millions)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18

Net (loss) income	$	(121	)	$	(279	)	$	(145	)	$	(514	)	$	235
Income tax (benefit) expense	(408		)	(64		)	(8		)	(494		)	56
(Loss) income before income taxes	(529		)	(343		)	(153		)	(1,008		)	291
Other expense (income), net	6			(14		)	(32		)	(36		)	(153		)
Interest expense	589			594			664			1,802			1,934
Operating income	66			237			479			758			2,072
Depreciation - network and other	1,071			1,065			1,088			3,256			3,132
Depreciation - equipment rentals	1,011			1,056			1,137			3,096			3,454
Amortization	474			106			145			698			475
EBITDA* ⁽¹⁾	2,622			2,464			2,849			7,808			9,133
Asset impairments ⁽²⁾	19			2			—			231			—
Loss from asset dispositions, exchanges, and other, net ⁽³⁾	22			—			105			22			173
Severance and exit costs⁽⁴⁾	20			19			30			66			63
Contract terminations costs ⁽⁵⁾	—			—			—			—			34
Merger costs ⁽⁶⁾	78			69			67			230			216
Litigation expenses and other contingencies ⁽⁷⁾	(270		)	—			50			(270		)	50
Partial pension settlement ⁽⁸⁾	57			—			—			57			—
Hurricanes ⁽⁹⁾	—			—			—			—			(32		)
Adjusted EBITDA*⁽¹⁾	$	2,548		$	2,554		$	3,101		$	8,144		$	9,637

Adjusted EBITDA margin*	47.0		%	48.4		%	54.4		%	50.1		%	56.0		%

Selected items:
Cash paid for capital expenditures - network and other	$	1,062		$	1,109		$	1,416		$	3,360		$	3,814
Cash paid for capital expenditures - leased devices	$	2,147		$	1,786		$	2,215		$	5,449		$	5,739



News Release

WIRELESS STATEMENTS OF OPERATIONS (Unaudited)

(Millions)



	Quarter To Date							Year To Date
	12/31/19			9/30/19		12/31/18		12/31/19		12/31/18

Net operating revenues
Service revenue
Postpaid	$	4,229		$	4,218	$	4,236	$	12,646	$	12,679
Prepaid	740			792		924		2,375		2,860
Wholesale, affiliate and other	226			35		289		541		868
Total service revenue	5,195			5,045		5,449		15,562		16,407

Equipment sales	1,372			1,192		1,589		3,784		4,180
Equipment rentals	1,292			1,330		1,313		3,981		3,778
Total net operating revenues	7,859			7,567		8,351		23,327		24,365

Net operating expenses
Cost of services (exclusive of depreciation and amortization below)	1,554			1,591		1,439		4,664		4,334
Cost of equipment sales	1,646			1,359		1,734		4,346		4,521
Cost of equipment rentals (exclusive of depreciation below)	201			240		182		666		457
Selling, general and administrative	1,923			1,815		1,885		5,517		5,338
Depreciation - network and other	1,023			1,023		1,035		3,116		2,975
Depreciation - equipment rentals	1,011			1,056		1,137		3,096		3,454
Amortization	474			106		145		698		475
Other, net	110			20		185		360		280
Total net operating expenses	7,942			7,210		7,742		22,463		21,834
Operating (loss) income	$	(83	)	$	357	$	609	$	864	$	2,531

WIRELESS NON-GAAP RECONCILIATION (Unaudited)

(Millions)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18

Operating (loss) income	$	(83	)	$	357		$	609		$	864		$	2,531
Asset impairments ⁽²⁾	19			1			—			223			—
Loss from asset dispositions, exchanges, and other, net ⁽³⁾	22			—			105			22			173
Severance and exit costs ⁽⁴⁾	22			19			30			68			45
Contract terminations costs ⁽⁵⁾	—			—			—			—			34
Litigation expenses and other contingencies ⁽⁷⁾	5			—			50			5			50
Partial pension settlement ⁽⁸⁾	42			—			—			42			—
Hurricanes ⁽⁹⁾	—			—			—			—			(32		)
Depreciation - network and other	1,023			1,023			1,035			3,116			2,975
Depreciation - equipment rentals	1,011			1,056			1,137			3,096			3,454
Amortization	474			106			145			698			475
Adjusted EBITDA*⁽¹⁾	$	2,535		$	2,562		$	3,111		$	8,134		$	9,705

Adjusted EBITDA margin*	48.8		%	50.8		%	57.1		%	52.3		%	59.2		%

Selected items:
Cash paid for capital expenditures - network and other	$	921		$	963		$	1,242		$	2,911		$	3,362
Cash paid for capital expenditures - leased devices	$	2,147		$	1,786		$	2,215		$	5,449		$	5,739



News Release

WIRELINE STATEMENTS OF OPERATIONS (Unaudited)

(Millions)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18

Net operating revenues	$	296		$	300		$	316		$	903		$	982

Net operating expenses
Cost of services (exclusive of depreciation and amortization below)	238			256			280			756			886
Selling, general and administrative	46			49			52			140			174
Depreciation and amortization	48			42			51			137			151
Other, net	(262		)	1			—			(254		)	18
Total net operating expenses	70			348			383			779			1,229
Operating income (loss)	$	226		$	(48	)	$	(67	)	$	124		$	(247	)

WIRELINE NON-GAAP RECONCILIATION (Unaudited)

(Millions)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18

Operating income (loss)	$	226		$	(48	)	$	(67	)	$	124		$	(247	)
Asset impairments ⁽²⁾	—			1			—			8			—
Severance and exit costs ⁽⁴⁾	(2		)	—			—			(2		)	18
Litigation expenses and other contingencies ⁽⁷⁾	(275		)	—			—			(275		)	—
Partial pension settlement ⁽⁸⁾	15			—			—			15			—
Depreciation and amortization	48			42			51			137			151
Adjusted EBITDA*	$	12		$	(5	)	$	(16	)	$	7		$	(78	)

Adjusted EBITDA margin*	4.1		%	-1.7		%	-5.1		%	0.8		%	-7.9		%

Selected items:
Cash paid for capital expenditures - network and other	$	34		$	30		$	64		$	92		$	170



News Release

CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)

(Millions)



	Year To Date
	12/31/19			12/31/18
Operating activities
Net (loss) income	$	(514	)	$	235
Asset impairments⁽²⁾	231			—
Depreciation and amortization	7,050			7,061
Provision for losses on accounts receivable	435			278
Share-based and long-term incentive compensation expense	90			101
Deferred income tax (benefit) expense	(532		)	25
Amortization of long-term debt premiums, net	(47		)	(94		)
Loss on disposal of property, plant and equipment	692			642
Deferred purchase price from sale of receivables	—			(223		)
Other changes in assets and liabilities:
Accounts and notes receivable	(754		)	65
Inventories and other current assets	650			248
Operating lease right-of-use assets	1,280			—
Accounts payable and other current liabilities	(436		)	(530		)
Current and long-term operating lease liabilities	(1,433		)	—
Non-current assets and liabilities, net	(172		)	(601		)
Other, net	225			375
Net cash provided by operating activities	6,765			7,582

Investing activities
Capital expenditures - network and other	(3,360		)	(3,814		)
Capital expenditures - leased devices	(5,449		)	(5,739		)
Expenditures relating to FCC licenses	(24		)	(145		)
Change in short-term investments, net	5			1,467
Proceeds from sales of assets and FCC licenses	819			416
Proceeds from deferred purchase price from sale of receivables	—			223
Proceeds from corporate owned life insurance policies	5			110
Other, net	(27		)	52
Net cash used in investing activities	(8,031		)	(7,430		)

Financing activities
Proceeds from debt and financings	4,731			6,416
Repayments of debt, financing and finance lease obligations	(7,188		)	(6,937		)
Debt financing costs	(12		)	(286		)
Proceeds from issuance of common stock, net	(29		)	281
Acquisition of noncontrolling interest	(33		)	—
Other, net	1			—
Net cash used in financing activities	(2,530		)	(526		)

Net decrease in cash, cash equivalents and restricted cash	(3,796		)	(374		)

Cash, cash equivalents and restricted cash, beginning of period	7,063			6,659
Cash, cash equivalents and restricted cash, end of period	$	3,267		$	6,285

RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)

(Millions)



	Quarter To Date									Year To Date
	12/31/19			9/30/19			12/31/18			12/31/19			12/31/18

Net cash provided by operating activities	$	1,955		$	2,566		$	2,225		$	6,765		$	7,582

Capital expenditures - network and other	(1,062		)	(1,109		)	(1,416		)	(3,360		)	(3,814		)
Capital expenditures - leased devices	(2,147		)	(1,786		)	(2,215		)	(5,449		)	(5,739		)
Expenditures relating to FCC licenses, net	(8		)	(7		)	(75		)	(24		)	(145		)
Proceeds from sales of assets and FCC licenses	220			417			144			819			416
Proceeds from deferred purchase price from sale of receivables	—			—			—			—			223
Other investing activities, net	6			4			129			10			189
Free cash flow*	$	(1,036	)	$	85		$	(1,208	)	$	(1,239	)	$	(1,288	)
Net proceeds (repayments) of financings related to devices and receivables	603			(130		)	300			703			913
Adjusted free cash flow*	$	(433	)	$	(45	)	$	(908	)	$	(536	)	$	(375	)



News Release

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(Millions)



	12/31/19			3/31/19
ASSETS
Current assets
Cash and cash equivalents	$	3,179		$	6,982
Short-term investments	62			67
Accounts and notes receivable, net	3,873			3,554
Device and accessory inventory	1,117			999
Prepaid expenses and other current assets	1,224			1,289
Total current assets	9,455			12,891

Property, plant and equipment, net	20,827			21,201
Costs to acquire a customer contract	1,808			1,559
Operating lease right-of-use assets	6,713			—
Goodwill	4,598			4,598
FCC licenses and other	41,492			41,465
Definite-lived intangible assets, net	918			1,769
Other assets	1,091			1,118
Total assets	$	86,902		$	84,601

LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	3,396		$	3,961
Accrued expenses and other current liabilities	3,335			3,597
Current operating lease liabilities	1,860			—
Current portion of long-term debt, financing and finance lease obligations	3,880			4,557
Total current liabilities	12,471			12,115

Long-term debt, financing and finance lease obligations	33,507			35,366
Long-term operating lease liabilities	5,423			—
Deferred tax liabilities	7,038			7,556
Other liabilities	2,708			3,437
Total liabilities	61,147			58,474

Stockholders' equity
Common stock	41			41
Treasury shares, at cost	(9		)	—
Paid-in capital	28,402			28,306
Accumulated deficit	(2,226		)	(1,883		)
Accumulated other comprehensive loss	(453		)	(392		)
Total stockholders' equity	25,755			26,072
Noncontrolling interests	—			55
Total equity	25,755			26,127
Total liabilities and equity	$	86,902		$	84,601

NET DEBT* (NON-GAAP) (Unaudited)

(Millions)



	12/31/19			3/31/19

Total debt	$	37,387		$	39,923
Less: Cash and cash equivalents	(3,179		)	(6,982		)
Less: Short-term investments	(62		)	(67		)
Net debt*	$	34,146		$	32,874



News Release

SCHEDULE OF DEBT (Unaudited)

(Millions)



		12/31/19
ISSUER	MATURITY	PRINCIPAL
Sprint Corporation
7.25% Senior notes due 2021	09/15/2021	$	2,250
7.875% Senior notes due 2023	09/15/2023	4,250
7.125% Senior notes due 2024	06/15/2024	2,500
7.625% Senior notes due 2025	02/15/2025	1,500
7.625% Senior notes due 2026	03/01/2026	1,500
Sprint Corporation		12,000

Sprint Spectrum Co LLC, Sprint Spectrum Co II LLC, and Sprint Spectrum Co III LLC
3.36% Senior secured notes due 2021	09/20/2021	1,531
4.738% Senior secured notes due 2025	03/20/2025	2,100
5.152% Senior secured notes due 2028	03/20/2028	1,838
Sprint Spectrum Co LLC, Sprint Spectrum Co II LLC, and Sprint Spectrum Co III LLC		5,469

Sprint Communications, Inc.
7% Guaranteed notes due 2020	03/01/2020	1,000
7% Senior notes due 2020	08/15/2020	1,500
11.5% Senior notes due 2021	11/15/2021	1,000
6% Senior notes due 2022	11/15/2022	2,280
Sprint Communications, Inc.		5,780

Sprint Capital Corporation
6.875% Senior notes due 2028	11/15/2028	2,475
8.75% Senior notes due 2032	03/15/2032	2,000
Sprint Capital Corporation		4,475

Credit facilities
Secured equipment credit facilities	2021 - 2022	505
Secured term loans due 2024	02/03/2024	5,870
Credit facilities		6,375

Accounts receivable facility	2021	3,310

Financing obligations, finance leases and other obligations	2020 - 2026	349
Total principal		37,758

Net premiums and debt financing costs		(371		)
Total debt		$	37,387



News Release

NOTES TO THE FINANCIAL INFORMATION (Unaudited)

⁽¹⁾

For customers that elect to lease a device rather than purchasing one under our subsidized program, there is a positive impact to EBITDA* and Adjusted EBITDA* from direct channel sales primarily due to the fact the cost of the device is not recorded as cost of equipment sales but rather is depreciated over the customer lease term. Under our device leasing program for the direct channel, devices are transferred from inventory to property and equipment and the cost of the leased device is recognized as depreciation expense over the customer lease term to an estimated residual value. The customer payments are recognized as revenue over the term of the lease. Under our subsidy model, we recognize revenue from the sale of devices as equipment sales at the point of sale and the cost of the device is recognized as cost of equipment sales. During the three and nine month periods ended December 31, 2019, we leased devices through our Sprint direct channels totaling approximately $1,686 million and $4,015 million, respectively, which would have increased cost of equipment sales and reduced EBITDA* if they had been purchased under our subsidized program.

The impact to EBITDA* and Adjusted EBITDA* resulting from the sale of devices under our installment billing program is generally neutral except for the impact in our indirect channels from the time value of money element related to the imputed interest on the installment receivable.


⁽²⁾	During the third quarter of fiscal year 2019, we recognized $19 million of impairment charges primarily related to an inbound roaming arrangement with a third party in Puerto Rico. During the second and first quarters of fiscal year 2019, the company recognized asset impairment expense primarily related to the sale and leaseback of our Overland Park, Kansas campus.

⁽³⁾

During the third quarter of fiscal year 2019, the company recorded losses on disposals of property, plant and equipment primarily related to network costs that are no longer recoverable as a result of changes in the company's network plans. During the third and second quarters of fiscal year 2018, the company recorded losses on disposals of property, plant and equipment primarily related to cell site construction costs and other network costs that are no longer recoverable as a result of changes in the company's network plans.


⁽⁴⁾	During the third, second and first quarters of fiscal year 2019 and third, second and first quarters of fiscal year 2018, severance and exit costs consist primarily of exit costs related to access termination charges and severance costs associated with reductions in work force.


⁽⁵⁾	During the first quarter of fiscal year 2018, we recognized contract termination costs associated with the purchase of certain leased spectrum assets, which upon termination of the spectrum leases resulted in the accelerated recognition of the unamortized favorable lease balances.


⁽⁶⁾	During the third, second and first quarters of fiscal year 2019 and third, second and first quarters of fiscal year 2018, we recorded merger costs of $78 million, $69 million, $83 million, $67 million, $56 million and $93 million, respectively, due to the proposed Business Combination Agreement with T-Mobile.


⁽⁷⁾	During the third quarter of fiscal year 2019, we had favorable developments in litigation and other contingencies of $270 million primarily associated with legal recoveries for patent infringement lawsuits. During the third quarter of fiscal year 2018, litigation expenses and other contingencies consist of tax matters settled with the State of New York.


⁽⁸⁾	During the third quarter of fiscal year 2019 the partial pension settlement is the result of a plan amendment to the Sprint Retirement Pension Plan to offer certain terminated participants who had not begun receiving Plan benefits the opportunity to voluntarily elect to receive their benefits as an immediate lump sum distribution.


⁽⁹⁾	During the second quarter of fiscal year 2018 we recognized hurricane-related reimbursements of $32 million.



News Release

*FINANCIAL MEASURES

Sprint provides financial measures determined in accordance with GAAP and adjusted GAAP (non-GAAP). The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. These measurements should be considered in addition to, but not as a substitute for, financial information prepared in accordance with GAAP. We have defined below each of the non-GAAP measures we use, but these measures may not be synonymous to similar measurement terms used by other companies.

Sprint provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint does not predict special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, Sprint does not provide reconciliations to GAAP of its forward-looking financial measures.

The measures used in this release include the following:

EBITDA is operating income/(loss) before depreciation and amortization. Adjusted EBITDA is EBITDA excluding severance, exit costs, and other special items. Adjusted EBITDA Margin represents Adjusted EBITDA divided by non-equipment net operating revenues for Wireless and Adjusted EBITDA divided by net operating revenues for Wireline. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations. While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent non-cash current period costs associated with the use of long-lived tangible and definite-lived intangible assets. Adjusted EBITDA and Adjusted EBITDA Margin are calculations commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry.

Free Cash Flow is the cash provided by operating activities less the cash used in investing activities other than short-term investments and equity method investments. Adjusted Free Cash Flow is Free Cash Flow plus the proceeds from device financings and sales of receivables, net of repayments. We believe that Free Cash Flow and Adjusted Free Cash Flow provide useful information to investors, analysts and our management about the cash generated by our core operations and net proceeds obtained to fund certain leased devices, respectively, after interest and dividends, if any, and our ability to fund scheduled debt maturities and other financing activities, including discretionary refinancing and retirement of debt and purchase or sale of investments.

Net Debt is consolidated debt, including current maturities, less cash and cash equivalents and short-term investments. We believe that Net Debt provides useful information to investors, analysts and credit rating agencies about the capacity of the company to reduce the debt load and improve its capital structure.



News Release

SAFE HARBOR

This release includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan”, “outlook,” “providing guidance,” and similar expressions are intended to identify information that is not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future - including statements relating to our network, subscriber growth, and liquidity; and statements expressing general views about future operating results - are forward-looking statements. Forward-looking statements are estimates and projections reflecting management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, the development and deployment of new technologies and services such as 5G; efficiencies and cost savings of new technologies and services; customer and network usage; subscriber additions and churn rates; service, speed, capacity, coverage and quality; availability of devices; availability of various financings; and the timing of various events and the economic environment. Sprint believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date when made. Sprint undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our company's historical experience and our present expectations or projections. Factors that might cause such differences include, but are not limited to, those discussed in Sprint Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019 and, when filed, our Quarterly Report on Form 10-Q for the quarter ended December 31, 2019. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

About Sprint:

Sprint (NYSE: S) is a communications services company that creates more and better ways to connect its customers to the things they care about most. Sprint served 54.2 million connections as of December 31, 2019 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; leading no-contract brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Today, Sprint’s legacy of innovation and service continues with an increased investment to dramatically improve coverage, reliability, and speed across its nationwide network and commitment to launching a 5G mobile network in the U.S. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.

###

Message from Management January 27, 2020

Q3 Fiscal 2019 Results | January 27, 2020  We remain excited by the opportunity to provide our customers a better network and customer experience with New T-Mobile and are encouraged by the progress we have made since the merger was announced. o We have received approval from the Committee on Foreign Investment in the United States and Team Telecom. o We have received favorable outcomes from 18 of the 19 required state utility commissions, with only the California PUC still outstanding. o The Federal Communications Commission (FCC) has voted in support of the merger. o Sprint and T-Mobile entered into a consent decree with the Department of Justice and announced several agreements with DISH Network, including a divestiture of our prepaid assets (excluding the Lifeline business). o The trial related to a lawsuit filed by a group of State Attorneys General recently concluded and we are awaiting a decision from the court.  We remain optimistic about the remaining regulatory steps necessary to complete the merger as we continue to work with all stakeholders including the California PUC and various State Attorneys General.  We continued to execute our Next-Gen Network plan and now have the second fastest network based on national average download speeds. We also expanded our True Mobile 5G network coverage to approximately 20 million people.  Postpaid wireless service revenue has stabilized, as the number of accounts grew sequentially and year over year for the third consecutive quarter and average revenue per account, or ARPA, remained stable.  We delivered postpaid net additions for the 10th consecutive quarter, driven by growth in data devices.  Our digital transformation continued, as we increased our digital sales and accelerated our digital care initiatives while continuing to adopt artificial intelligence across different parts of the business.  We continued to invest in our network and execute our focused Next-Gen Network plan. o We are nearing completion on our initiative to upgrade sites with LTE bands, as 2.5 GHz spectrum is now substantially deployed on our existing macro sites. o Our Massive MIMO deployment continues to deliver improved LTE performance where available and provides the foundation for our mobile 5G network. We now have thousands of Massive MIMO sites on-air across the country. ©2019 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Q3 Fiscal 2019 Results | January 27, 2020 o Additionally, we now have approximately 37,000 small cells on air, which are delivering improvements in coverage, capacity and time on LTE to improve the customer experience in specific locations.  These deployments have driven performance improvements and increased capacity, as we now have the second fastest network1 and were the most improved operator in calendar 2019 with a 45 percent year-over-year increase in national average download speeds2, according to Ookla Speedtest Intelligence data.  While we are proud of the improvements we have made to the network, we recognize that there is still opportunity to improve the end-to-end quality of experience for our customers and we remain focused on quality metrics.  Along with our LTE improvements, we have rolled out True Mobile 5G in select metro areas in the U.S. through software upgrades on our massive MIMO sites. o We expanded our True Mobile 5G network coverage to approximately 20 million people within nine metropolitan areas – Atlanta, Chicago, Dallas-Fort Worth, Houston, Kansas City, Los Angeles, New York City, Phoenix and Washington, D.C. In these areas, customers with 5G devices are experiencing dramatically faster speeds with our average 5G download speed of 215 Mbps more than 5X faster than Sprint LTE.3 o Our device line-up includes 5G capable smartphones from LG, Samsung, and OnePlus, along with a hotspot device from HTC. We expect many more 5G devices to launch this year.  We continued our Unlimited for All approach and executed our strategy of stabilizing the total number of postpaid accounts and increasing the number of lines per account. o Average postpaid accounts grew sequentially and year over year for the third consecutive quarter. o Meanwhile, the average connections per account continued to grow both sequentially and year over year.  As part of our strategy, we are being more selective in our acquisition of new postpaid phone customers, with continued focus on growing accounts through data devices. This approach increases the total lifetime value of the customer account, as accounts generally have smartphones as the primary lines. The significant difference in device costs between smartphones and data devices for similar monthly recurring charges as additional lines on the account has the potential to deliver improved economics to Sprint and ultimately our shareholders.  We delivered postpaid net additions for the 10th consecutive quarter, with 494,000 in the fiscal third quarter. This is a result of executing our strategy to grow our relationship with customers through data devices such as tablets, watches, connected car products, and connected trackers. These data device net additions were partially offset by losses in phones. 1 Based on analysis by Ookla® of Speedtest Intelligence® data average download speeds from Q4 2019 for All Mobile Results. Ookla® trademarks used under license and reprinted with permission. 2 Based on analysis by Ookla® of Speedtest Intelligence® data average download speeds from December 2018 to December 2019 for All Mobile Results. Ookla® trademarks used under license and reprinted with permission. 3 Based on analysis by Ookla® of Speedtest Intelligence® data average download speeds for December 2019 of 4G (LTE) and 5G Beta (NR) results. Ookla® trademarks used under license and reprinted with permission. ©2019 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Q3 Fiscal 2019 Results | January 27, 2020 o Total postpaid gross additions were up year over year for the fifth consecutive quarter as we increased sales of data devices. Even though we were more selective, postpaid phone gross additions grew year over year for the second consecutive quarter while also improving the prime mix. o Postpaid churn was up year over year, as customers continued to roll off introductory promotions. We expect the seasonal sequential improvement in the fiscal fourth quarter to be similar to last year.  Our business segment delivered postpaid net additions for the 14th consecutive quarter driven by continued strength with small and medium businesses. In addition, Sprint recently won Frost and Sullivan’s 2019 North American Business Communications Solution New Product Innovation Award for Sprint Smart Messaging – a solution that helps businesses communicate with their customers through an artificial intelligence (AI)-powered text messaging system.  Our prepaid net losses of 174,000 in the quarter were similar to last year and an improvement of 33,000 compared to last quarter, as we saw lower churn and higher gross additions within our Boost brand.  We continue to drive our digital transformation of the company, with enhanced digital capabilities driving higher sales, a better customer experience, and cost efficiencies.  Because we lack the scale of the biggest wireless carriers, we must be more innovative by leveraging digital capabilities and employing advanced analytics, artificial intelligence and intelligent automation in our operations to further optimize our cost structure.  From a digital sales perspective, we have seen strong growth in both the volume and mix of customers using digital channels. o Our postpaid gross additions in digital channels increased 80 percent year over year, including a more than 300 basis point improvement in the digital percentage of total gross additions. o Our postpaid upgrades increased more than 40 percent year over year, including an approximate 650 basis point improvement in the digital percentage of total upgrades. Priority Status, an innovative app-only program from Sprint that allows customers to reserve the newest, most-wanted devices before pre-order opens, was a significant driver of this growth.  We are ramping our rollout of a cutting-edge intelligent customer experience that leverages artificial intelligence and analytics. o We have refined our approach regarding which customer issues are most appropriate to be handled digitally and now have more than 25 percent of targeted customer care web chats being handled by virtual agents. o We continued to launch voice-to-digital tools to complement our live agents, including Apple Business Chat options that allow customers calling with specific issues to resolve them digitally through an asynchronous messaging experience.  Our in-house digital marketing continues to deliver improved web conversions and orders from digital media more than doubled year over year in the fiscal third quarter.  This digital transformation and data-driven culture is expected to contribute to the evolution of our customer experience and potential cost reductions in the future. ©2019 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Q3 Fiscal 2019 Results | January 27, 2020  At the beginning of fiscal 2018, we adopted accounting standard ASC 606 for revenue recognition, which resulted in a reduction in wireless service revenue, offset by an increase in equipment sales and a deferral of commission expenses. While we have now reported for more than a year under the new standard, we would like to remind you that the impacts of this change will extend through fiscal 2019, even when comparing two results under the new standard as we applied the standard only to open contracts as of the effective date. Results will be presented under the new standard going forward, but we will also note areas where there are material ongoing impacts.  At the beginning of fiscal 2019, we adopted accounting standard ASC 842 for leases, which resulted in a $7.1 billion gross-up of assets and liabilities on the balance sheet, primarily related to recognizing right-of-use assets and related liabilities for operating leases.  Wireless service revenue of $5.2 billion in the quarter was down $254 million year over year, mostly driven by continued amortization of prepaid contract balances as a result of the adoption of revenue standard ASC 606 and lower Lifeline revenue, as the year-ago period included federal and state government subsidies claimed as a result of an inadvertent coding error. Adjusting for these impacts, total wireless service revenue was stable year- over-year and sequentially. We expect wireless service revenue to continue to be stable sequentially in the fiscal fourth quarter, excluding the continued non-operational revenue recognition impact to prepaid service revenue which will make it lower on a reported basis.  Postpaid service revenue of $4.2 billion was flat year over year, as average postpaid accounts of 11.3 million grew and postpaid ARPA of $124.80 was stable.  Postpaid phone ARPU of $50.37 remained stable year over year, while postpaid ARPU of $42.02 declined 4 percent year over year primarily driven by a higher mix of data devices, which generally have a lower monthly recurring charge than phones.  Prepaid service revenue of $740 million declined $184 million year over year, mostly due to the aforementioned accounting impact from implementing the new revenue standard. Prepaid ARPU remained stable year over year when excluding the non-operational accounting impact.  We continued to focus on cost optimization during the quarter by driving year over year gross reductions in cost of services and selling, general and administrative (SG&A) expenses, with most of the reductions coming from network optimization. These reductions have been ©2019 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Q3 Fiscal 2019 Results | January 27, 2020 offset by incremental costs associated with network coverage and capacity improvements, along with other customer experience initiatives.  Cost of services expenses of $1.7 billion were up $70 million year over year, driven by incremental expenses associated with network investments and higher roaming expenses, partially offset by lower wireline network costs.  SG&A expenses of $2.0 billion for the quarter were up $42 million year over year, mostly due to higher bad debt expenses associated with an increase in installment billing sales. As a reminder, merger costs, which are not included in adjusted EBITDA, are reported in the SG&A line but were not materially different this quarter compared to the prior year quarter.  Adjusted EBITDA of $2.5 billion in the quarter was down $553 million year over year, partly as a result of the adoption of revenue standard ASC 606. We expect adjusted EBITDA to remain relatively flat sequentially in the fiscal fourth quarter.  Operating income of $66 million in the quarter included several non-recurring items, with the most material being a $381 million acceleration of amortization expense related to our Virgin Mobile brand and $57 million of non-cash expense related to a partial pension settlement, partially offset by a $270 million benefit primarily associated with legal recoveries for patent infringement lawsuits.  Net loss of $120 million compared with a net loss of $141 million in the year-ago period. We recorded a non-cash tax benefit of approximately $300 million this quarter to reduce our valuation allowance related to certain historic net operating loss carryforwards. We anticipate similar non-cash tax benefits may be recorded in future quarters as well.  Network cash capital expenditures of $1.1 billion represented the seventh consecutive quarter of more than $1 billion in spend due to continued investments in our Next-Gen Network initiatives. With the continued deployment of Massive MIMO, we expect capital spending to be around $1 billion in the fiscal fourth quarter.  Adjusted free cash flow of negative $433 million was approximately $475 million higher than the year-ago period, mostly due to lower capital expenditures as 2.5 GHz has now been substantially deployed to existing macro sites. We expect adjusted free cash flow to improve sequentially in the fiscal fourth quarter, mostly due to favorable changes in working capital.  We continue to have an adequate liquidity position with more than $5 billion of general- purpose availability. However, we will continue to be opportunistic in looking at the capital markets and maintain flexibility while we are still in the merger process. ©2019 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Q3 Fiscal 2019 Results | January 27, 2020 * FINANCIAL MEASURES Sprint provides financial measures determined in accordance with GAAP and adjusted GAAP (non- GAAP).The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. These measurements should be considered in addition to, but not as a substitute for, financial information prepared in accordance with GAAP. We have defined below each of the non- GAAP measures we use, but these measures may not be synonymous to similar measurement terms used by other companies. Sprint provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint does not predict special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, Sprint does not provide reconciliations to GAAP of its forward-looking financial measures. The measures used in this release include the following: EBITDA is operating income/(loss) before depreciation and amortization. Adjusted EBITDA is EBITDA excluding severance, exit costs, and other special items. Adjusted EBITDA Margin represents Adjusted EBITDA divided by non-equipment net operating revenues for Wireless and Adjusted EBITDA divided by net operating revenues for Wireline. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations. While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent non-cash current period costs associated with the use of long-lived tangible and definite-lived intangible assets. Adjusted EBITDA and Adjusted EBITDA Margin are calculations commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry. Free Cash Flow is the cash provided by operating activities less the cash used in investing activities other than short-term investments and equity method investments. Adjusted Free Cash Flow is Free Cash Flow plus the proceeds from device financings and sales of receivables, net of repayments. We believe that Free Cash Flow and Adjusted Free Cash Flow provide useful information to investors, analysts and our management about the cash generated by our core operations and net proceeds obtained to fund certain leased devices, respectively, after interest and dividends, if any, and our ability to fund scheduled debt maturities and other financing activities, including discretionary refinancing and retirement of debt and purchase or sale of investments. Net Debt is consolidated debt, including current maturities, less cash and cash equivalents and short- term investments. We believe that Net Debt provides useful information to investors, analysts and credit rating agencies about the capacity of the company to reduce the debt load and improve its capital structure. SAFE HARBOR This release includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan”, “outlook,” “providing guidance,” and similar expressions are intended to identify information that is not historical in nature. All statements that address operating performance, ©2019 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Q3 Fiscal 2019 Results | January 27, 2020 events or developments that we expect or anticipate will occur in the future — including statements relating to our network, subscriber growth, and liquidity; and statements expressing general views about future operating results — are forward-looking statements. Forward-looking statements are estimates and projections reflecting management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward- looking statements, management has made assumptions regarding, among other things, the development and deployment of new technologies and services such as 5G; efficiencies and cost savings of new technologies and services; customer and network usage; subscriber additions and churn rates; service, speed, capacity, coverage and quality; availability of devices; availability of various financings; and the timing of various events and the economic environment. Sprint believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date when made. Sprint undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our company's historical experience and our present expectations or projections. Factors that might cause such differences include, but are not limited to, those discussed in Sprint Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019 and, when filed, our Form 10-Q for the fiscal quarter ended December 31, 2019. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. About Sprint: Sprint (NYSE: S) is a communications services company that creates more and better ways to connect its customers to the things they care about most. Sprint served 54.2 million connections as of December 31, 2019 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; leading no-contract brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Today, Sprint’s legacy of innovation and service continues with an increased investment to dramatically improve coverage, reliability, and speed across its nationwide network and commitment to launching a 5G mobile network in the U.S. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint. ©2019 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Cover Page	Jan. 27, 2020
Cover page.
Document Type	8-K
Document Period End Date	Jan. 27, 2020
Entity Registrant Name	SPRINT CORPORATION
Entity Central Index Key	0000101830
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity File Number	1-04721
Entity Tax Identification Number	46-1170005
Entity Address, Address Line One	6200 Sprint Parkway,
Entity Address, City or Town	Overland Park,
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66251
City Area Code	913
Local Phone Number	794-1091
Written Communications	true
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	S
Security Exchange Name	NYSE
Entity Emerging Growth Company	false