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Taylor Swift dances to The Darkness in latest Apple Music ad

Taylor Swift is continuing her partnership with Apple Music, with yet another ad featuring the singer and the streaming service. The new minute-long commercial features Taylor Swift dancing around to ‘I Believe In A Thing Called Love’ by The Darkness.

Swift demonstrates using the Apple Music discovery features (via the ‘Friday Night Rocks!’ playlist) to find the track. The ad ends with the slogan ‘Dance like no one’s watching’.  Watch the ad after the jump …

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Filed under: AAPL Company, Apple Music, iOS, iOS Devices, Tech Industry Tagged: Apple Music, Music, streaming, subscribers, Taylor Swift

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Benjamin Mayo

May 12th

Apple

Mac

Deezer Music app gets CarPlay support for paid subscribers

Deezer-Carplay

Deezer Music, the music streaming service with around six million subscribers, is today launching support for Apple’s CarPlay platform.

The service has both free, ad-supported and paid plans, but the CarPlay feature will be limited to its Premium+ and Elite subscribers. Premium+ is the company’s paid monthly plan that removes advertising and adds a few features, while Elite is an upgraded plan with high definition audio available only to Sonos users currently.

Some might remember that Deezer briefly added support for CarPlay before removing it earlier this year, but with today’s official launch the feature is here to stay (at least for premium subscribers).

Some features you’ll find in the app for CarPlay include:

  • Listen to albums, playlists and tracks
  • Use Flow to discover new music or hear your favourites based on your individual
  • listening behaviour
  • Listen to one of Deezer’s many Mixes to suit your mood
  • Access your music in offline mode

Deezer has around 35 millions songs and 40,000 podcasts and it’s available in 180 countries. In the US the service is currently only available for Cricket Wireless subscribers, and Sonos and Bose customers.

The updated Deezer Music iOS app with CarPlay support should hit the App Store sometime today.


Filed under: Apps Tagged: app, App Store, CarPlay, Deezer Music, iOS, Podcasts, premium, subscribers, update

For more news on Apps, iOS, and App Store continue reading at 9to5Mac.

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Jordan Kahn

December 9th

Apple

Mac

Pandora blames Apple Music launch for low listener growth, but says impact was ‘muted’

Cue-Jimmy-apple-music

Eddy Cue and Jimmy Iovine at Code Conference via Re/code

Pandora is announcing its Q2 2015 financial results today and as expected blamed the launch of Apple Music in June for low growth in listeners and an overall loss vs last quarter. While the company confirmed that it did indeed witness lower than normal growth numbers for the quarter, it described the overall impact of Apple Music as “muted”:

…we expected some short‐term impact to our audience  growth as listeners tried this highly‐promoted new service. I am pleased to say that, given the scale of press and consumer attention on this launch, the impact on our active users and listening hours was muted

Pandora officially reported 78.1 million monthly active users, an increase of 2% from last year, while its total listener hours increased 3% from last year to 5.14B. The company pointed out that the numbers mark an overall increase from the year ago quarter, but it also represents around 1 million fewer listeners since the previous quarter and launch of Apple Music.

The company previously warned investors that it would likely notice a drop in audience growth due to the launch of Apple’s new service during its Q2 earnings call.

Despite a clear impact from Apple Music, today the company’s CEO and president Brian McAndrews noted that the June 30th Apple Music launch impact was on par with what the company “experienced during the launch of Apple’s radio service in 2013,” seemingly downplaying the overall success of the service and any potential loss of market share to Apple.

Earlier this week Apple CEO Tim Cook revealed the first official Apple Music numbers confirming the service has gained 6.5 million paid subscribers and 15 million total subscribers since its launch on June 30th. Apple is offering a 3 month free trial, which is one of the reasons Pandora expected to take a hit on its listener numbers. For the earliest adopters of the service free trials ran out on September 30, but it’s likely Apple will convert more users that were late to sign-up for the service in the months to come as more free trials expire.

Apple is also yet to launch the Android version of Apple Music, which it confirmed is on the way and just today leaked in some screenshots from an early beta.


Filed under: Apple Music Tagged: active listeners, Apple Music, audience, growth, loss, muted, Pandora, Q2 2015, subscribers

Check out 9to5Mac for more breaking coverage of Apple Music, Apple Music, and Pandora.

What do you think? Discuss "Pandora blames Apple Music launch for low listener growth, but says impact was ‘muted’" with our community.

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Jordan Kahn

October 23rd

Apple

Mac

AT&T U-Verse customers now have access to WatchESPN and FOX NOW iOS apps

FOX-Now-iPad-app Watch-ESPN-app-iOS

AT&T U-Verse customers will be pleased to learn that today they have access to new content on their iPhone and iPad. The WatchESPN app was previously available to most that subscribe to an ESPN package, but up until today AT&T U-Verse subscribers were not included. With update to version 1.6.6 today, U-Verse customers can now access live streaming feeds from ESPN, ESPN2, ESPN3 and ESPNU directly from within the universal iOS app for iPhone and iPad.

More great TV content is available on iOS devices today for AT&T U-Verse subscribers. The FOX Now iPhone and iPad app, which provides access to latest episodes from popular FOX shows like Family Guy, American Dad, and Hell’s Kitchen, was updated today providing access to both AT&T U-Verse and Suddenlink subscribers. The app also gets a bunch of new features including automatic full screen for videos, a streamlined universal navigation drawer, filters, and much more.


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Jordan Kahn

May 1st

Apple

Mac

comScore: Apple increases lead as top smartphone vendor in US, iOS steals market share from Android

comScore-Feb-2013-Apple-OEMs

Research firm comScore is out with its usual monthly report that ranks the top smartphone OEMs and platforms for the three-month period ending in February. Apple continues to grow its lead this month as top OEM in the U.S., jumping 3.9-percent from November to 38.9-percent of the market and increasing its lead on the second biggest OEM by subscribers, Samsung:

Samsung ranked second with 21.3 percent market share (up 1 percentage point), followed by HTC with 9.3 percent share, Motorola with 8.4 percent and LG with 6.8 percent.

Feb-Comscore-Apple-PlatformsIt’s important to point out that the shipped vs. sold argument doesn’t apply to comScore’s results, as its data comes from surveys tracking smartphone subscribers and usage and not sales or units shipped. Google grabs the spot as top smartphone platform at the end of February, but Apple continues to close the gap capturing 38.9-percent of the market (up from 35 percent) compared to Google’s 51.7-percent (down from 53.7-percent):

Google Android ranked as the top smartphone platform with 51.7 percent market share, while Apple’s share increased 3.9 percentage points to 38.9 percent. BlackBerry ranked third with 5.4 percent share, followed by Microsoft (3.2 percent) and Symbian (0.5 percent).


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Jordan Kahn

April 4th

Apple

Mac

comScore: Apple increases lead as top smartphone vendor in US, iOS steals market share from Android

comScore-Feb-2013-Apple-OEMs

Research firm comScore is out with its usual monthly report ranking the top smartphone OEMs and platforms for the three month period ending in February. Apple continues to grow its lead this month as top OEM in the US, jumping 3.9 percentage points from November to 38.9 percent of the market and increasing its lead on the second biggest OEM by subscribers, Samsung:

Samsung ranked second with 21.3 percent market share (up 1 percentage point), followed by HTC with 9.3 percent share, Motorola with 8.4 percent and LG with 6.8 percent.

Feb-Comscore-Apple-PlatformsIt’s important to point out that the shipped vs sold argument doesn’t apply to comScore’s results, as its data comes from surveys tracking smartphone subscribers and usage rather than sales or units shipped. Google grabs the spot as top smartphone platform at the end of February, but Apple continues to close the gap capturing 38.9% of the market (up from 35%) compared to Google’s 51.7% (down from 53.7%):

Google Android ranked as the top smartphone platform with 51.7 percent market share, while Apple’s share increased 3.9 percentage points to 38.9 percent. BlackBerry ranked third with 5.4 percent share, followed by Microsoft (3.2 percent) and Symbian (0.5 percent).


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Jordan Kahn

April 4th

Apple

Mac

Pandora touts more than 150 million users

Pandora has more than 150 million listeners

According to CEO Joe Kennedy, Pandora has surpassed 150 million users in the United States and is the second most downloaded app in the history of Apple’s App Store, CNET reported on Wednesday. The Internet radio service has big plans for the future and is working with automakers to integrate the service into virtually all future vehicles. “We truly believe this is just the beginning,” Kennedy said at the CTIA Wireless trade show in New Orleans. Over the past year, the company has faced increased competition from streaming service Spotify, however it doesn’t seem to have affected Pandora’s continued growth.

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Dan Graziano

May 10th

Uncategorized

Sprint posts $863 million loss in Q1, adds 263,000 net Sprint subscribers

Sprint posted its first-quarter financial results on Wednesday ahead of the bell. Analysts were anticipating another rough quarter, and Wall Street’s consensus had the nation’s No.3 carrier losing $0.42 per share on revenue of $8.71 billion. The numbers are now in and Sprint beat analysts’ expectations, reported a loss of $0.29 per share, or a net loss of $863 million, on $8.73 billion in sales. Sprint’s subscriber count was also in the spotlight ahead of Tuesday morning’s earnings report, and estimates suggested Sprint would shed anywhere from 22,000 to 125,000 net subscribers. Sprint has now confirmed that it added 263,000 net postpaid subscribers under the Sprint brand during the quarter thanks to iPhone sales totaling 1.5 million units, but it lost 192,000 net contract subscribers as its Nextel platform shed 455,000 postpaid customers. The carrier posted a massive $1.3 billion loss in the fourth quarter last year though the addition of Apple’s iPhone helped it add 1.6 million net subscribers, and it reported a loss of $439 million while adding 310,000 net subscribers in the first quarter of 2011. Sprint’s full press release follows below.

Sprint Nextel Reports First Quarter 2012 Results

  • Best ever Sprint platform postpaid ARPU increase of $4.03, or 6.9 percent, year-over-year drives Sprint platform wireless service revenue growth of 16 percent year-over-year
  • Operating loss of $255 million; Adjusted OIBDA* of $1.2 billion, which includes $104 million in Network Vision related operating expense
  • 263,000 postpaid net additions on the Sprint platform in the quarter – eighth consecutive quarter of postpaid subscriber growth on the Sprint platform
  • Total company net additions of more than 1 million for the sixth consecutive quarter
  • Strong iPhone sales of more than 1.5 million – 44 percent to new customers
  • Network Vision deployment continues on track
    • Continue to expect six major cities to launch 4G LTE by mid-year
    • Continue to expect 12,000 sites on air by end of 2012
    • To date work has begun on 25 percent of planned 2012 sites; 5 percent are on air
    • Nearly 1,300 iDEN sites taken off air to date; expect 9,600 total by the end of the third quarter

The company’s first quarter 2012 earnings conference call will be held at 8 a.m. ET today. Participants may dial 800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and provide the following ID: 68178739 or may listen via the Internet at www.sprint.com/investor.

OVERLAND PARK, Kan.–(BUSINESS WIRE)–Sprint Nextel Corp. (NYSE: S) today reported a net loss of $863 million and a diluted net loss of $.29 per share for the first quarter of 2012. This compares to a net loss of $439 million and a diluted net loss of $.15 per share in the first quarter of 2011 and includes depreciation of approximately $543 million, or negative $.18 cents per share, primarily due to accelerated depreciation related to the expected shut down of the Nextel platform and a one-time net benefit of $170 million, or approximately $.06 per share, related to the spectrum hosting contract termination with LightSquared. The company had wireless service revenues of $7.2 billion during the quarter, an increase of more than 7 percent year-over-year, driven primarily by Sprint platform postpaid ARPU growth of $4.03 – the largest year-over-year increase on record for the U.S. wireless industry. The company reported total net subscriber additions of nearly 1.1 million during the first quarter, bringing total ending subscribers to a record 56 million.

“The value and simplicity of our unlimited data, talk and text plans, combined with an unsurpassed customer experience and our increasingly robust device portfolio make for a strong combination.”

The total number of customers on the Sprint platform grew almost 4 percent sequentially including 263,000 postpaid net subscriber additions, 870,000 prepaid net subscriber additions and 785,000 wholesale and affiliate net subscriber additions. Sprint recorded more than 1.5 million iPhone® sales in the first quarter with 44 percent going to new customers. Prepaid churn on the Sprint platform improved to 2.92 percent, the tenth consecutive quarter of year-over-year improvement.

“The continuing revenue growth on the Sprint platform, which represents the future of our company, driven by record ARPU improvement and strong net subscriber growth, contributed to our Adjusted OIBDA* performance of $1.2 billion,” said Dan Hesse, Sprint CEO. “The value and simplicity of our unlimited data, talk and text plans, combined with an unsurpassed customer experience and our increasingly robust device portfolio make for a strong combination.”

NETWORK VISION HIGHLIGHTS

Sprint’s Network Vision initiative remains on track. To date, the company has approximately 600 sites on air, which are meeting speed and coverage enhancement targets. Zoning requirements are completed for approximately 9,700 sites and leasing agreements have been completed for close to 7,700 sites. More than 3,200 sites are in notice to proceed status and work has started on approximately 3,000. Sprint expects to bring approximately 12,000 sites on air by the end of 2012 and to complete the majority of its Network Vision roll-out in 2013. The company has also taken approximately 1,300 iDEN sites off air to date and expects to shut down a total of 9,600 before the end of the third quarter.

In addition, as part of Network Vision, Sprint continues to expect to launch 4G LTE in six major cities by mid-year 2012 including Houston, Dallas, San Antonio, Atlanta, Kansas City and Baltimore. This week, Sprint launched its first two 4G LTE smartphones – Galaxy Nexus™ and LG Viper™ 4G LTE with eco-friendly features – and earlier this month also announced the upcoming launch of HTC EVO 4G LTE™.

“We continue to hit our key internal milestones and make significant progress on Network Vision,” said Hesse.

CUSTOMER EXPERIENCE AND BRAND HIGHLIGHTS

During the first quarter, Sprint recorded its lowest level of calls to customer care per postpaid subscriber on record, consistent with more third-party recognition of Sprint’s customer experience. Sprint was ranked by J.D. Power and Associates highest among full-service providers in its 2012 Wireless Purchase Experience Study, Volume 1. Boost Mobile was ranked highest among non-contract providers in the same study and Virgin Mobile USA received the highest ranking in the J.D. Power and Associates 2012 Wireless Customer Care Non-Contract Study – Volume 1, with Boost placing second. This month, Sprint Wholesale collected four 2012 Domestic Best-In-Class Awards from Atlantic-ACM in the categories of Network, Provisioning, Customer Service and Sales Representatives. Sprint also received the ATLANTIC ACM Best-in-Class Network Award for Global Wholesale Excellence earlier this year and Frost & Sullivan identified Sprint as an excellent example of an end-to-end mobile solution provider for the small business sector.

Sprint also launched several innovative products and services in addition to its 4G LTE devices. Sprint introduced its first tablet for under $100 with a two year agreement, ZTE Optik™ as well as ZTE Fury™, a family-friendly Android-powered device. Boost Mobile began offering LG Rumor Reflex™ – the fifth device from Sprint with eco-friendly attributes and the second from Boost. Additionally, the company introduced Sprint Complete Collaboration, the most comprehensive hosted and fully managed unified communications bundle available for businesses and launched additional Sprint Biz 360 solutions, phone and applications for small businesses. Sprint also created New Ventures, a new organization focused on delivering new business models that leverage open platforms to drive revenue and overall customer satisfaction for the global marketplace.

LIQUIDITY

During the first quarter, Sprint raised additional financing of $2 billion to help fund the Network Vision deployment, debt maturities and working capital requirements over the next few years. This followed financing of $4 billion raised in the fourth quarter of 2011. Sprint’s next scheduled debt maturities include $300 million due in May 2013 and $1.5 billion due in October 2013. As of March 31, 2012, the company’s total liquidity was approximately $8.8 billion, consisting of $7.6 billion in cash, cash equivalents and short-term investments and $1.2 billion of undrawn borrowing capacity available under its revolving bank credit facility. Sprint generated $978 million of net cash provided by operating activities and $138 million of Free Cash Flow* in the quarter.

CONSOLIDATED RESULTS

TABLE NO. 1 Selected Consolidated Financial Data (Unaudited) (dollars in millions, except per share data)
Quarter To Date
Financial Data March 31,
2012
March 31,
2011
%
Net operating revenues $ 8,734 $ 8,313 5 %
Operating (loss) income $ (255 ) $ 259 NM
Adjusted OIBDA* $ 1,213 $ 1,514 (20 ) %
Adjusted OIBDA margin* 15.2 % 19.9 %
Net loss (1) $ (863 ) $ (439 ) (97 ) %
Diluted net loss per common share (1) $ (0.29 ) $ (0.15 ) (93 ) %
Capital expenditures (2) $ 800 $ 555 44 %
Net cash provided by operating activities $ 978 $ 919 6 %
Free Cash Flow* $ 138 $ 178 (22 ) %
  • Consolidated net operating revenues of $8.7 billion for the quarter were 5 percent higher than in the first quarter of 2011 and nearly unchanged from the fourth quarter of 2011. The quarterly year-over-year improvement was primarily due to higher wireless service revenues, partially offset by a reduction in wireline revenue. Sequentially, higher wireless service revenues were offset by lower wireless equipment revenue and lower wireline revenue.
  • Operating loss was $255 million compared to operating income of $259 million for the first quarter of 2011 and an operating loss of $438 million for fourth quarter of 2011. The quarterly year-over-year and sequential impacts to operating loss were driven by items identified below in Adjusted OIBDA* coupled with a first quarter 2012 increase in depreciation expense resulting primarily from accelerated depreciation related to the expected decommissioning of the Nextel network and a one-time net gain associated with the termination of our spectrum hosting contract in the first quarter of 2012.
  • Adjusted OIBDA* was $1.2 billion for the quarter, compared to $1.5 billion for the first quarter of 2011 and $842 million in the fourth quarter of 2011. The quarterly year-over-year decline in Adjusted OIBDA* was primarily due to higher equipment net subsidy, higher wireless cost of service and lower wireline revenues, partially offset by higher postpaid and prepaid wireless service revenues. Sequentially, Adjusted OIBDA* increased primarily as a result of higher wireless service revenues and lower equipment net subsidy and sales expense primarily associated with fewer handset sales.
  • Capital expenditures(2), excluding capitalized interest of $115 million, were $800 million in the quarter, compared to $555 million in the first quarter of 2011 and $900 million in the fourth quarter of 2011. Wireless capital expenditures were $710 million in the first quarter of 2012, compared to $449 million in the first quarter of 2011 and $774 million in the fourth quarter of 2011. During the quarter, the company invested approximately $315 million for our Network Vision program and approximately $250 million in data capacity related to both legacy network and Network Vision equipment. Wireline capital expenditures were $45 million in the first quarter of 2012, compared to $53 million in the first quarter of 2011 and $34 million in the fourth quarter of 2011. Corporate capital expenditures were $45 million in the first quarter of 2012, compared to $53 million in the first quarter of 2011 and $92 million in the fourth quarter of 2011, primarily related to IT infrastructure to support our Wireless and Wireline businesses.
  • Net cash provided by operating activities was $978 million for the quarter, compared to $919 million for the first quarter of 2011 and $1.1 billion for the fourth quarter of 2011.
  • Free Cash Flow* was $138 million for the quarter, compared to $178 million for the first quarter of 2011 and $257 million for the fourth quarter of 2011.

WIRELESS RESULTS

Wireless Customers

  • The company served more than 56 million customers at the end of the first quarter of 2012. This includes 32.8 million postpaid subscribers (29 million on the Sprint platform and 3.8 million on the Nextel platform), 15.3 million prepaid subscribers (13.7 million on the Sprint platform and 1.6 million on the Nextel platform) and approximately 8 million wholesale and affiliate subscribers, all of whom utilize the Sprint platform.
  • The Sprint platform added 263,000 net postpaid customers during the quarter. The Nextel platform lost 455,000 net postpaid customers in the quarter. Sprint platform postpaid net additions and Nextel platform postpaid net subscriber losses include 228,000 net subscribers who migrated from the Nextel platform to the Sprint platform.
  • The company added 489,000 net prepaid subscribers during the quarter, which includes net additions of 870,000 prepaid Sprint platform customers, offset by net losses of 381,000 prepaid Nextel platform customers. Sprint platform prepaid net additions and Nextel platform prepaid net losses include 137,000 net subscribers who migrated from the Nextel platform to the Sprint platform.
  • For the quarter, the company added net additions of 785,000 wholesale and affiliate subscribers (all of which are on the Sprint platform) as a result of growth in MVNOs reselling prepaid services.
  • The credit quality of Sprint’s end-of-period postpaid customers was approximately 82 percent prime, relatively flat as compared to the fourth quarter of 2011.

Sprint Platform Churn and Nextel Recapture

  • For the quarter, the company reported Sprint platform postpaid churn of 2.00 percent, compared to 1.78 percent for the year-ago period and 1.99 percent for the fourth quarter of 2011. Quarterly, Sprint platform postpaid churn increased year-over-year primarily due to higher involuntary deactivations, which occur when Sprint disconnects a customer due to lack of payment or violations of terms and conditions. This is expected to be a temporary increase, the majority of which was associated with pricing actions taken in the second and third quarters of 2011 primarily through indirect channels. Sprint tightened its credit standards during the third and fourth quarters of 2011 to stem further impacts of these types of promotional activities by our indirect dealers.
  • Approximately 46 percent of total subscribers that left the postpaid Nextel platform during the period were retained on the Sprint postpaid platform as compared to 27 percent in the first quarter of 2011 and 39 percent in the fourth quarter of 2011.
  • Approximately 8 percent of Sprint platform postpaid customers upgraded their handsets during the first quarter as compared to 9 percent in the first quarter of 2011 and in the fourth quarter of 2011. The sequential decline was primarily driven by seasonality and is typical in the first quarter following fourth quarter holiday sales. The year-over-year decline was primarily due to changes in our upgrade eligibility policies.
  • Sprint platform prepaid churn for the first quarter was 2.92 percent, compared to 3.41 percent for the year-ago period and 3.07 percent for the fourth quarter of 2011. The quarterly year-over-year and sequential improvements in the Sprint platform prepaid churn were primarily a result of improvements in the Virgin Mobile and Boost brands, and continued changes in the mix of our subscriber base as a result of strong growth in the number of Assurance Wireless® customers, who on average have lower churn than the remainder of our Sprint platform subscriber base.
TABLE NO. 2 Wireless Operating Statistics (Unaudited)
Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Net Additions (Losses) (in thousands)
Sprint platform:
Postpaid (a) 263 539 253
Prepaid (b) 870 899 1,406
Wholesale and affiliate 785 954 389
Total Sprint platform 1,918 2,392 2,048
Nextel platform:
Postpaid (a) (455 ) (378 ) (367 )
Prepaid (b) (381 ) (392 ) (560 )
Total Nextel platform (836 ) (770 ) (927 )
Total retail postpaid net (losses) additions (192 ) 161 (114 )
Total retail prepaid net additions 489 507 846
Total wholesale and affiliate net additions 785 954 389
Total Wireless Net Additions 1,082 1,622 1,121
End of Period Subscribers (in thousands)
Sprint platform:
Postpaid (a) 28,992 28,729 27,699
Prepaid (b) 13,698 12,828 9,941
Wholesale and affiliate 8,003 7,218 4,910
Total Sprint platform 50,693 48,775 42,550
Nextel platform:
Postpaid (a) 3,830 4,285 5,299
Prepaid (b) 1,580 1,961 3,182
Total Nextel platform 5,410 6,246 8,481
Total retail postpaid end of period subscribers 32,822 33,014 32,998
Total retail prepaid end of period subscribers 15,278 14,789 13,123
Total wholesale and affiliate end of period subscribers 8,003 7,218 4,910
Total End of Period Subscribers 56,103 55,021 51,031
Supplemental Data – Connected Devices
End of Period Subscribers (in thousands)
Retail postpaid 791 783 715
Wholesale and affiliate 2,217 2,077 1,883
Total 3,008 2,860 2,598
Churn
Sprint platform:
Postpaid 2.00 % 1.99 % 1.78 %
Prepaid 2.92 % 3.07 % 3.41 %
Nextel platform:
Postpaid 2.09 % 1.89 % 1.95 %
Prepaid 8.73 % 7.18 % 6.94 %
Total retail postpaid churn 2.01 % 1.98 % 1.81 %
Total retail prepaid churn 3.61 % 3.68 % 4.36 %
ARPU (c)
Sprint platform:
Postpaid $ 62.55 $ 61.22 $ 58.52
Prepaid $ 25.64 $ 25.16 $ 25.76
Nextel platform:
Postpaid $ 40.94 $ 41.91 $ 44.35
Prepaid $ 35.68 $ 34.91 $ 35.46
Total retail postpaid ARPU $ 59.88 $ 58.59 $ 56.17
Total retail prepaid ARPU $ 26.82 $ 26.62 $ 28.39
Postpaid Nextel Recapture Rate (d) 46 % 39 % 27 %
(a) Postpaid subscribers on the Sprint platform are defined as retail postpaid subscribers on the CDMA network, including subscribers with PowerSource devices, and those utilizing WiMax technology. Postpaid subscribers on the Nextel platform are defined as retail postpaid subscribers on the iDEN network.
(b) Prepaid subscribers on the Sprint platform are defined as retail prepaid subscribers who utilize CDMA technology via our multi-brand offerings. Prepaid subscribers on the Nextel platform are defined as retail prepaid subscribers who utilize iDEN technology via our multi-brand offerings.
(c) ARPU is calculated by dividing service revenue by the sum of the average number of subscribers 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 average monthly revenue generated by new subscribers and deactivating subscribers.
(d) The Postpaid Nextel Recapture Rate is defined as the portion of total subscribers that left the postpaid Nextel platform during the quarter and were retained on the postpaid Sprint platform.
TABLE NO. 3 Selected Wireless Financial Data (Unaudited) (dollars in millions)
Quarter To Date
Financial Data March 31,
2012
March 31,
2011
%
Net operating revenues $ 7,950 $ 7,413 7 %
Operating (loss) income $ (331 ) $ 140 NM
Adjusted OIBDA* $ 1,052 $ 1,283 (18 ) %
Adjusted OIBDA margin* 14.6 % 19.1 %
Capital expenditures (2) $ 710 $ 449 58 %

Wireless Service Revenues

  • Wireless retail service revenues of $7.1 billion for the quarter represent an increase of 7 percent compared to the first quarter of 2011 and an increase of approximately 3 percent compared to the fourth quarter of 2011. The quarterly year-over-year improvement was primarily due to higher postpaid ARPU as well as an increased number of net prepaid subscribers due to continued growth of Assurance Wireless and Virgin Mobile Beyond Talk customers, partially offset by lower prepaid ARPU. Sequentially, wireless retail service revenues increased, primarily as a result of higher postpaid ARPU and growth in the number of prepaid subscribers.
  • Wireless postpaid ARPU increased year-over-year from $56.17 to $59.88, the largest year-over-year postpaid ARPU growth in the company’s history, while sequentially ARPU increased from $58.59 to $59.88. Quarterly year-over-year and sequential ARPU benefited from higher monthly recurring revenues primarily as a result of the premium data add-on charges for smartphones introduced in the first quarter of 2011.
  • Prepaid ARPU of $26.82 for the quarter declined from $28.39 in the first quarter of 2011 and increased slightly from $26.62 in the fourth quarter of 2011. The decline in the year-over-year period is a result of a greater mix of Assurance Wireless customers who on average have lower ARPU than the remainder of our prepaid subscriber base, partially offset by improvements in Boost and Virgin Mobile ARPU.
  • Quarterly wholesale, affiliate and other revenues of $103 million increased by $34 million, compared to the year-ago period and increased by $29 million sequentially, resulting primarily from growth in MVNOs reselling prepaid services.

Wireless Operating Expenses

  • Total wireless net operating expenses were $8.3 billion in the first quarter, compared to $7.3 billion in the year-ago period and $8.4 billion in the fourth quarter of 2011.
  • Wireless equipment net subsidy in the first quarter was approximately $1.6 billion (equipment revenue of $735 million, less cost of products of $2.3 billion), compared to approximately $1.1 billion in the year-ago period and approximately $1.7 billion in the fourth quarter of 2011. The quarterly year-over-year increase in net subsidy is primarily due to the launch of the iPhone, which on average carries a higher subsidy rate per handset as compared to other handsets. The sequential decline in net subsidy is primarily due to a decline in postpaid handset sales typical for the first quarter following the fourth quarter holiday sales activity.
  • Wireless cost of service was flat sequentially, primarily due to lower 4G data costs, offset by higher Network Vision related expenses. Wireless cost of service increased approximately 12 percent year-over-year primarily due to higher 4G data costs, Network Vision related expenses, service and repair expenses and backhaul costs driven by higher data usage, partially offset by lower licenses and fees.
  • Wireless SG&A expenses increased approximately 2 percent year-over-year and declined by approximately 1 percent sequentially. Quarterly year-over-year SG&A expenses increased primarily due to higher bad debt and selling expenses, partially offset by lower marketing costs. Sales expenses increased year-over-year primarily due to iPhone point-of- sale discounts (subsidy) for devices directly sold by the manufacturer to indirect dealers in which Sprint does not take device title, as well as higher postpaid gross additions. The impact from the iPhone was partially offset by improvements in sales channel mix with a larger portion of activations coming from direct retail channels. Bad debt expense increased year-over-year by $60 million driven primarily by an increase in the agings of accounts receivable outstanding combined with a higher average write-off per account. Sequentially, SG&A expenses decreased primarily as a result of lower sales and bad debt expenses, partially offset by seasonally higher marketing expense. Sequentially, bad debt expense declined $50 million due to a seasonal improvement in the agings of accounts receivable outstanding.
  • Wireless depreciation and amortization expense increased $421 million year-over-year and $494 million sequentially primarily related to a reduction in estimated useful lives of certain assets. The year-over-year and sequential increase is primarily associated with accelerated depreciation on Nextel platform assets related to our decision to decommission that platform.

WIRELINE RESULTS

TABLE NO. 4 Selected Wireline Financial Data (Unaudited) (dollars in millions)
Quarter To Date
Financial Data March 31,
2012
March 31,
2011
%
Net operating revenues $ 998 $ 1,120 (11 ) %
Operating income $ 78 $ 119 (35 ) %
Adjusted OIBDA* $ 161 $ 228 (29 ) %
Adjusted OIBDA margin* 16.1 % 20.4 %
Capital expenditures (2) $ 45 $ 53 (15 ) %
  • Wireline revenues of $1 billion for the quarter declined 11 percent year-over-year primarily as a result of an intercompany rate reduction based on current market prices for voice and IP services sold to the wireless segment as well as the scheduled migration of wholesale cable VoIP customers off of Sprint’s IP platform. Sequentially, first quarter wireline revenues declined 5 percent primarily due to a reduction in intercompany rates resulting from the decline in market-based prices for wireline services.
  • Total wireline net operating expenses were $920 million in the first quarter of 2012. Net operating expenses declined approximately 8 percent year-over-year and 7 percent sequentially due to lower cost of service from continued declines in voice and cable IP volumes, improvement in SG&A expenses and lower depreciation expenses.

Forecast

The company expects 2012 Adjusted OIBDA* to be at the high-end of the previous forecast of between $3.7 billion and $3.9 billion. Within that Adjusted OIBDA* expectation, we continue to anticipate full year consolidated net service revenue growth of 4 to 6 percent (consolidated revenue less wireless equipment revenue). Sprint continues to expect full year capital expenditures of approximately $6 billion in 2012, excluding capitalized interest.

Sprint Nextel Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Millions, except per Share Data)
TABLE NO. 5
Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Net Operating Revenues $ 8,734 $ 8,722 $ 8,313
Net Operating Expenses
Cost of services 2,787 2,788 2,584
Cost of products 2,298 2,631 1,812
Selling, general and administrative 2,436 2,461 2,403
Depreciation 1,590 1,098 1,122
Amortization 76 76 133
Other, net (198 ) 106 -
Total net operating expenses 8,989 9,160 8,054
Operating (Loss) Income (255 ) (438 ) 259
Interest expense (298 ) (287 ) (249 )
Equity in losses of unconsolidated investments and other, net (3) (273 ) (472 ) (412 )
Loss before Income Taxes (826 ) (1,197 ) (402 )
Income tax expense (37 ) (106 ) (37 )
Net Loss (1) $ (863 ) $ (1,303 ) $ (439 )
Basic and Diluted Net Loss Per Common Share (1) $ (0.29 ) $ (0.43 ) $ (0.15 )
Weighted Average Common Shares outstanding 2,999 2,997 2,992
Effective Tax Rate -4.5 % -8.9 % -9.2 %
NON-GAAP RECONCILIATION – NET LOSS TO ADJUSTED OIBDA* (Unaudited)
(Millions)
TABLE NO. 6
Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Net Loss (1) $ (863 ) $ (1,303 ) $ (439 )
Income tax expense (37 ) (106 ) (37 )
Loss before Income Taxes (826 ) (1,197 ) (402 )
Equity in losses of unconsolidated investments and other, net (3) 273 472 412
Interest expense 298 287 249
Operating (Loss) Income (255 ) (438 ) 259
Depreciation and amortization 1,666 1,174 1,255
OIBDA* 1,411 736 1,514
Severance and exit costs (4) - 28 -
Gains from asset dispositions and exchanges (5) (29 ) - -
Asset impairments and abandonments (6) 18 78 -
Spectrum hosting contract termination, net (7) (170 ) - -
Access costs (8) (17 ) - -
Adjusted OIBDA* 1,213 842 1,514
Capital expenditures (2) 800 900 555
Adjusted OIBDA* less Capex $ 413 $ (58 ) $ 959
Adjusted OIBDA Margin* 15.2 % 10.8 % 19.9 %
Selected item:
Deferred tax asset valuation allowance $ 348 $ 569 $ 196
Sprint Nextel Corporation
WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
TABLE NO. 7
Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Net Operating Revenues
Service revenue
Sprint platform:
Postpaid (a) $ 5,408 $ 5,217 $ 4,842
Prepaid (b) 1,016 929 712
Wholesale, affiliate and other 103 74 69
Total Sprint platform 6,527 6,220 5,623
Nextel platform:
Postpaid (a) 500 563 729
Prepaid (b) 188 227 366
Total Nextel platform 688 790 1,095
Equipment revenue 735 910 695
Total net operating revenues 7,950 7,920 7,413
Net Operating Expenses
Cost of services 2,289 2,291 2,047
Cost of products 2,298 2,631 1,812
Selling, general and administrative 2,311 2,330 2,271
Depreciation 1,488 988 1,012
Amortization 76 82 131
Other, net (181 ) 98 -
Total net operating expenses 8,281 8,420 7,273
Operating (Loss) Income $ (331 ) $ (500 ) $ 140
Supplemental Revenue Data
Total retail service revenue $ 7,112 $ 6,936 $ 6,649
Total service revenue $ 7,215 $ 7,010 $ 6,718
(a) Postpaid subscribers on the Sprint platform are defined as retail postpaid subscribers on the CDMA network, including subscribers with PowerSource devices, and those utilizing WiMax technology. Postpaid subscribers on the Nextel platform are defined as retail postpaid subscribers on the iDEN network.
(b) Prepaid subscribers on the Sprint platform are defined as retail prepaid subscribers who utilize CDMA technology via our multi-brand offerings. Prepaid subscribers on the Nextel platform are defined as retail prepaid subscribers who utilize iDEN technology via our multi-brand offerings.
NON-GAAP RECONCILIATION Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Operating (Loss) Income $ (331 ) $ (500 ) $ 140
Severance and exit costs (4) - 25 -
Gains from asset dispositions and exchanges (5) (29 ) - -
Asset impairments and abandonments (6) 18 73 -
Spectrum hosting contract termination, net (7) (170 ) - -
Depreciation 1,488 988 1,012
Amortization 76 82 131
Adjusted OIBDA* 1,052 668 1,283
Capital expenditures (2) 710 774 449
Adjusted OIBDA* less Capex $ 342 $ (106 ) $ 834
Adjusted OIBDA Margin* 14.6 % 9.5 % 19.1 %
Sprint Nextel Corporation
WIRELINE STATEMENTS OF OPERATIONS (Unaudited)
(Millions)
TABLE NO. 8
Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Net Operating Revenues
Voice $ 417 $ 475 $ 486
Data 108 103 116
Internet 453 459 497
Other 20 17 21
Total net operating revenues 998 1,054 1,120
Net Operating Expenses
Costs of services and products 716 748 759
Selling, general and administrative 121 128 133
Depreciation 100 109 109
Other, net (17 ) 9 -
Total net operating expenses 920 994 1,001
Operating Income $ 78 $ 60 $ 119
NON-GAAP RECONCILIATION Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Operating Income $ 78 $ 60 $ 119
Severance and exit costs (4) - 3 -
Asset impairments and abandonments (6) - 6 -
Access costs (8) (17 ) - -
Depreciation 100 109 109
Adjusted OIBDA* 161 178 228
Capital expenditures (2) 45 34 53
Adjusted OIBDA* less Capex $ 116 $ 144 $ 175
Adjusted OIBDA Margin* 16.1 % 16.9 % 20.4 %
Sprint Nextel Corporation
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
(Millions)
TABLE NO. 9
Quarter Ended
March 31,
2012
December 31,
2011
March 31,
2011
Operating Activities
Net loss $ (863 ) $ (1,303 ) $ (439 )
Asset impairments 18 78 -
Depreciation and amortization 1,666 1,174 1,255
Provision for losses on accounts receivable 136 189 73
Share-based compensation expense 17 22 18
Deferred income taxes 32 117 27
Equity in losses of unconsolidated investments and other, net (3) 273 472 412
Gains from asset dispositions and exchanges (29 ) - -
Contribution to pension plan (92 ) (12 ) (100 )
Spectrum hosting contract termination, net (7) (170 ) - -
Other working capital changes, net 26 640 (369 )
Other, net (36 ) (288 ) 42
Net cash provided by operating activities 978 1,089 919
Investing Activities
Capital expenditures (2) (783 ) (909 ) (644 )
Expenditures relating to FCC licenses (56 ) (59 ) (74 )
Reimbursements relating to FCC licenses (9) - 135 -
Change in short-term investments, net (327 ) 90 (40 )
Investment in Clearwire (128 ) (331 ) -
Other, net (1 ) 1 (23 )
Net cash used in investing activities (1,295 ) (1,073 ) (781 )
Financing Activities
Proceeds from debt and financings 2,000 4,000 -
Debt financing costs (36 ) (83 ) (3 )
Repayments of debt and capital lease obligations (2 ) (2,251 ) (1,652 )
Other, net 3 4 2
Net cash provided by (used in) financing activities 1,965 1,670 (1,653 )
Net Increase (Decrease) in Cash and Cash Equivalents 1,648 1,686 (1,515 )
Cash and Cash Equivalents, beginning of period 5,447 3,761 5,173
Cash and Cash Equivalents, end of period $ 7,095 $ 5,447 $ 3,658
RECONCILIATION TO FREE CASH FLOW* (NON-GAAP) (Unaudited)
(Millions)
TABLE NO. 10
Quarter Ended
March 31,
2012
December 31,
2011
March 31,
2011
Net Cash Provided by Operating Activities $ 978 $ 1,089 $ 919
Capital expenditures (2) (783 ) (909 ) (644 )
Expenditures relating to FCC licenses, net (9) (56 ) 76 (74 )
Other investing activities, net (1 ) 1 (23 )
Free Cash Flow* 138 257 178
Debt financing costs (36 ) (83 ) (3 )
Increase (decrease) in debt and other, net 1,998 1,749 (1,652 )
Investment in Clearwire (128 ) (331 ) -
Other financing activities, net 3 4 2
Net Increase (Decrease) in Cash, Cash Equivalents and Short-Term Investments $ 1,975 $ 1,596 $ (1,475 )
Sprint Nextel Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Millions)
TABLE NO. 11
March 31,
2012
December 31,
2011
Assets
Current assets
Cash and cash equivalents $ 7,095 $ 5,447
Short-term investments 477 150
Accounts and notes receivable, net 3,216 3,206
Device and accessory inventory 693 913
Deferred tax assets 115 130
Prepaid expenses and other current assets 628 491
Total current assets 12,224 10,337
Investments and other assets 2,453 2,609
Property, plant and equipment, net 13,500 14,009
Goodwill 359 359
FCC licenses and other 20,540 20,453
Definite-lived intangible assets, net 1,541 1,616
Total $ 50,617 $ 49,383
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable $ 2,847 $ 2,495
Accrued expenses and other current liabilities 3,584 3,996
Current portion of long-term debt, financing and capital lease obligations 8 8
Total current liabilities 6,439 6,499
Long-term debt, financing and capital lease obligations 22,260 20,266
Deferred tax liabilities 7,013 6,986
Other liabilities 4,314 4,205
Total liabilities 40,026 37,956
Shareholders’ equity
Common shares 5,995 5,992
Paid-in capital 46,723 46,716
Treasury shares, at cost - -
Accumulated deficit (41,352 ) (40,489 )
Accumulated other comprehensive loss (775 ) (792 )
Total shareholders’ equity 10,591 11,427
Total $ 50,617 $ 49,383
NET DEBT* (NON-GAAP) (Unaudited)
(Millions)
TABLE NO. 12
March 31,
2012
December 31,
2011
Total Debt $ 22,268 $ 20,274
Less: Cash and cash equivalents (7,095 ) (5,447 )
Less: Short-term investments (477 ) (150 )
Net Debt* $ 14,696 $ 14,677
Sprint Nextel Corporation
SCHEDULE OF DEBT (Unaudited)
(Millions)
TABLE NO. 13
March 31,
2012
ISSUER COUPON MATURITY PRINCIPAL
Sprint Nextel Corporation
Export Development Canada Facility (Tranche 2) 5.486% 12/15/2015 $ 500
6% Senior Notes due 2016 6.000% 12/01/2016 2,000
9.125% Senior Notes due 2017 9.125% 03/01/2017 1,000
8.375% Senior Notes due 2017 8.375% 08/15/2017 1,300
9% Guaranteed Notes due 2018 9.000% 11/15/2018 3,000
7% Guaranteed Notes due 2020 7.000% 03/01/2020 1,000
11.5% Senior Notes due 2021 11.500% 11/15/2021 1,000
9.25% Debentures due 2022 9.250% 04/15/2022 200
Sprint Nextel Corporation 10,000
Sprint Capital Corporation
6.9% Senior Notes due 2019 6.900% 05/01/2019 1,729
6.875% Senior Notes due 2028 6.875% 11/15/2028 2,475
8.75% Senior Notes due 2032 8.750% 03/15/2032 2,000
Sprint Capital Corporation 6,204
Nextel Communications Inc.
6.875% Senior Serial Redeemable Notes due 2013 6.875% 10/31/2013 1,473
5.95% Senior Serial Redeemable Notes due 2014 5.950% 03/15/2014 1,170
7.375% Senior Serial Redeemable Notes due 2015 7.375% 08/01/2015 2,137
Nextel Communications Inc. 4,780
iPCS Inc.
First Lien Senior Secured Floating Rate Notes due 2013 2.672% 05/01/2013 300
Second Lien Senior Secured Floating Rate Notes due 2014 3.797% 05/01/2014 181
iPCS Inc. 481
Tower financing obligation 9.500% 01/15/2030 698
Capital lease obligations and other 2014 – 2022 69
TOTAL PRINCIPAL 22,232
Net premiums 36
TOTAL DEBT $ 22,268
Sprint Nextel Corporation
RECONCILIATION OF RETAIL POSTPAID NET (LOSSES) ADDITIONS
TO ADJUSTED SPRINT PLATFORM POSTPAID NET ADDITIONS
(Thousands)
TABLE NO. 14
Quarter To Date
March 31,
2012
December 31,
2011
March 31,
2011
Retail postpaid net (losses) additions (192 ) 161 (114 )
Less: Nextel platform net losses (455 ) (378 ) (367 )
Sprint platform net additions 263 539 253
Less adjustments:
Nextel PowerSource (30 ) (33 ) (57 )
Helio - -
Adjusted Sprint platform net additions 293 572 310
Sprint Nextel Corporation
NOTES TO THE FINANCIAL INFORMATION (Unaudited)
(1) Results include pre-tax, non-cash equity in losses of unconsolidated investments and other, net of $273 million ($.09 per share), $472 million ($.16 per share) and $412 million ($.14 per share) in the first quarter of 2012 and the fourth and first quarters of 2011, respectively.
(2) Capital expenditures is an accrual based amount that includes the changes in unpaid capital expenditures and excludes capitalized interest. Cash paid for capital expenditures for the first quarter 2012 and fourth quarter 2011, respectively, includes $115 million and $99 million of total capitalized interest and can be found in the condensed consolidated cash flow information on Table No. 9 and the reconciliation to Free Cash Flow* on Table No. 10.
(3) The fourth quarter 2011 includes a non-cash impairment of $135 million to reflect a reduction of our investment in Clearwire to its estimated fair value, and a dilution loss of approximately $27 million associated with the fourth quarter reduction of Sprint’s economic interest from 53.5% to 51.5% as a result of Clearwire’s fourth quarter 2011 equity offering.
(4) Severance and exit costs are primarily related to work force reductions, lease termination charges, and organizational realignment initiatives.
(5) For the first quarter 2012, gains from asset dispositions and exchanges are primarily due to spectrum exchange transactions.
(6) For the first quarter 2012, asset impairments and abandonments relate to a change in our backhaul architecture in connection to our Network Vision design from microwave to a more cost effective fiber backhaul.
(7) On March 16, 2012, we elected to terminate the arrangement with LightSquared LP and LightSquared, Inc. (LightSquared). As we have no future service obligations with respect to the arrangement with LightSquared, we recognized $236 million of the advanced payments as other operating income in the first quarter of 2012. As a result of the termination of the hosting agreement, we impaired capitalized costs specific to LightSquared’s 1.6 GHz spectrum that the Company no longer intends to deploy which totaled $66 million.
(8) Favorable developments during the first quarter of 2012 relating to disagreements with local exchange carriers resulted in a reduction in expected access costs of $17 million.
(9) $135 million in reimbursements were received in the fourth quarter of 2011 from the mobile satellite service (MSS) entrants for their pro rata share of our costs of clearing a portion of the 1.9 GHz spectrum related to spectrum reconfiguration under FCC’s Report and Order.

*FINANCIAL MEASURES

Sprint Nextel provides financial measures determined in accordance with accounting principles generally accepted in the United States (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 Nextel provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint Nextel 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 Nextel does not provide reconciliations to GAAP of its forward-looking financial measures.

The measures used in this release include the following:

OIBDA is operating income/(loss) before depreciation and amortization. Adjusted OIBDA is OIBDA excluding severance, exit costs, and other special items. Adjusted OIBDA Marginrepresents Adjusted OIBDA divided by non-equipment net operating revenues for Wireless and Adjusted OIBDA divided by net operating revenues for Wireline. We believe that Adjusted OIBDA and Adjusted OIBDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, spectrum acquisitions and other investments and our ability to incur and service debt. 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 OIBDA and Adjusted OIBDA 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 during the period. We believe that Free Cash Flow provides useful information to investors, analysts and our management about the cash generated by our core operations 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, short-term investments and if any, restricted cash. 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 news release includes “forward-looking statements” within the meaning of the securities laws. The statements in this news release regarding the business outlook, expected performance and forward-looking guidance, as well as other statements that are not historical facts, are forward-looking statements. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “believe,” “anticipate,” “target,” “providing guidance” and similar expressions are intended to identify 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, customer and network usage, customer growth and retention, pricing, operating costs, the timing of various events and the economic and regulatory environment.

Future performance cannot be assured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:

  • our ability to retain and attract subscribers;
  • the ability of our competitors to offer products and services at lower prices due to lower cost structures;
  • the effects of vigorous competition on a highly penetrated market, including the impact of competition on the price we are able to charge subscribers for services and equipment we provide and our ability to retain existing subscribers and attract new subscribers; the impact of equipment net subsidy costs; the impact of increased purchase commitments; the overall demand for our service offerings, including the impact of decisions of new or existing subscribers between our postpaid and prepaid services offerings and between our two network platforms; and the impact of new, emerging and competing technologies on our business;
  • the ability to generate sufficient cash flow to fully implement our network modernization plan, Network Vision, to improve and enhance our networks and service offerings, improve our operating margins, implement our business strategies and provide competitive new technologies;
  • the effective implementation of Network Vision, including timing, execution, technologies, and costs;
  • our ability to migrate subscribers off the Nextel platform and mitigate related increases in churn;
  • our ability to access additional spectrum capacity, including through spectrum hosting arrangements;
  • changes in available technology and the effects of such changes, including product substitutions and deployment costs;
  • our ability to obtain additional financing on terms acceptable to us, or at all;
  • volatility in the trading price of our common stock, current economic conditions and our ability to access capital;
  • the impact of unrelated parties not meeting our business requirements, including a significant adverse change in the ability or willingness of such parties to provide devices or infrastructure equipment for our networks;
  • the costs and business risks associated with providing new services and entering new geographic markets;
  • the financial performance of Clearwire and its ability to fund, build, operate, and maintain its 4G network, including an LTE network;
  • our ability to access Clearwire’s spectrum capacity;
  • the compatibility of Sprint’s LTE network with Clearwire’s LTE network;
  • the effects of mergers and consolidations and new entrants in the communications industry and unexpected announcements or developments from others in the communications industry;
  • unexpected results of litigation filed against us or our suppliers or vendors;
  • the impact of adverse network performance;
  • the costs or potential customer impacts of compliance with regulatory mandates including, but not limited to, compliance with the FCC’s Report and Order to reconfigure the 800 MHz band;
  • equipment failure, natural disasters, terrorist acts or other breaches of network or information technology security;
  • one or more of the markets in which we compete being impacted by changes in political, economic or other factors such as monetary policy, legal and regulatory changes or other external factors over which we have no control; and
  • other risks referenced from time to time in our filings with the Securities and Exchange Commission, including the “Risk Factors” described in our annual report on Form 10-K for the year ended Dec. 31, 2011.

Sprint Nextel 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 of this release. Sprint Nextel is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release.

Clearwire’s first quarter 2012 results from operations have not yet been finalized. As a result, the amount reflected for Sprint’s share of Clearwire’s results of operations for the quarter ended March 31, 2012, is an estimate and, based upon the finalization of Clearwire’s results, may need to be revised if our estimate materially differs from Clearwire’s actual results. Changes in our estimate, if any, would affect the carrying value of our investment in Clearwire, net loss, basic and diluted net loss per common share, and comprehensive loss but would have no effect on Sprint’s operating income, OIBDA*, Adjusted OIBDA* or consolidated statement of cash flows.

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Zach Epstein

April 25th

Uncategorized

AT&T posts better-than-expected profit in Q1, sells record 5.5 million smartphones

AT&T on Tuesday reported its results for the first quarter of 2012. Following a record holiday quarter that saw the nation’s No.2 carrier pull in $0.42 per share excluding one-time charges on sales of $32.5 billion, analysts were expecting first-quarter EPS of $0.57 on revenue totaling $31.85 billion. The company beat expectations, posting a profit of $0.60 per share on in-line sales of $31.8 billion. AT&T activated 3.6 million iPhones during the first quarter last year, and that number climbed to 4.3 million in the first quarter of 2012, down seasonally from a record 7.6 million during the holiday quarter. Total smartphone sales for the first quarter this year came in at 5.5 million, in line with the 5.5 million smartphones it sold in the first quarter of 2011, though AT&T says that its first-quarter smartphone sales set a new record this year. The carrier added 726,000 net subscribers last quarter as its total subscriber count reached 103.9 million, up from 103.2 million in the December quarter. AT&T’s stock is trading up 0.5% ahead of the bell. The company’s full press release follows below.

Solid Growth in Earnings, Revenues and Margins, and $4.7 Billion Returned to Shareholders Highlight AT&T’s First-Quarter Results

Wireless Margins Expand and Smartphone Sales Set First-Quarter Record; 30 Percent of Smartphone Customers are on 4G-Capable Devices

DallasTexasApril 24, 2012

  • $0.60 diluted EPS compared to $0.57 diluted EPS in the first quarter of 2011
  • Consolidated revenues of $31.8 billion, up $575 million, or 1.8 percent, versus the year-earlier period
  • Wireless operating income margin up to 27.2 percent; wireless EBITDA service margin up significantly to 41.6 percent even with strong smartphone sales
  • More than $2 billion in stock buybacks; 67.7 million shares repurchased
  • AT&T’s growth engines — wireless, wireline data and managed services — represented 78 percent of total revenues and grew 6.2 percent versus the same quarter a year ago, led by:
    • 19.9 percent growth in wireless data revenues, up more than $1 billion versus the year-earlier quarter
    • 19.0 percent growth in strategic business services revenues
    • 38.2 percent growth in consumer U-verse revenues
  • Smartphone sales of 5.5 million, exceeding the previous first-quarter record, with about 30 percent of all postpaid smartphone subscribers on 4G-capable devices
  • 726,000 total wireless net adds, with gains in every customer category
  • Postpaid wireless churn of 1.1 percent, lowest level in seven quarters
  • Record first-quarter branded computing (tablets, tethering plans, etc.) net adds of 460,000 to reach a total of 5.8 million, up almost 70 percent versus a year ago
  • Postpaid wireless subscriber ARPU (average monthly revenues per subscriber), up 1.7 percent to $64.46
  • Wireline business year-over-year revenue comparisons continue to improve
  • Wireline consumer revenues up 1.0 percent versus the year-earlier period; seventh consecutive quarter of year-over-year growth
  • AT&T U-verse® subscribers (TV and high speed Internet) top 6 million; U-verse TV subscribers reach 4 million in service

Note: AT&T’s first-quarter earnings conference call will be broadcast live via the Internet at 10 a.m. ET on Tuesday, April 24, 2012, at www.att.com/investor.relations.

Consolidated Statements of Income
Statements of Segment Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Supplementary Operating and Financial Data
Reconciliation of EBITDA
Reconciliation of Free Cash Flow
Net-Debt-to-EBITDA Ratio
Non-GAAP Discussions

AT&T Inc. (NYSE:T) today reported first-quarter results highlighted by strong 4G mobile data sales and wireless margins, and solid revenue and earnings growth. “We continue to capitalize on our terrific momentum in mobile Internet,” said Randall Stephenson, AT&T chairman and chief executive officer. “Smartphone and branded computing device sales continue to set a record pace, mobile data revenues were up nearly 20 percent, and we achieved this growth with expanding margins. These results add confidence in our outlook for the year.”

First-Quarter Financial Results
For the quarter ended March 31, 2012, AT&T’s consolidated revenues totaled $31.8 billion, up $575 million, or 1.8 percent, versus the year-earlier quarter.

Compared with results for the first quarter of 2011, operating expenses were $25.7 billion versus $25.4 billion; operating income was $6.1 billion, up from $5.8 billion; and operating income margin was 19.2 percent, compared to 18.6 percent.

First-quarter 2012 net income attributable to AT&T totaled $3.6 billion, or $0.60 per diluted share, up from $3.4 billion, or $0.57 per diluted share, in the year-earlier quarter.

First-quarter 2012 cash from operating activities totaled $7.8 billion, and capital expenditures totaled $4.3 billion. Free cash flow — cash from operating activities minus capital expenditures — totaled $3.5 billion. During the first quarter, AT&T began repurchasing shares under its outstanding 300 million share buyback authorization. The company repurchased 67.7 million of its shares for $2.1 billion in the quarter.

WIRELESS OPERATIONAL HIGHLIGHTS
Led by mobile data growth in the first quarter, AT&T delivered strong smartphone and branded computing device sales with solid data revenue growth, lower postpaid churn and expanding margins. Highlights included:

Wireless Data Revenues Increase $1 Billion. Total wireless revenues, which include equipment sales, were up 5.4 percent year over year to $16.1 billion. Wireless service revenues increased 4.3 percent, to $14.6 billion, in the first quarter. Wireless data revenues — driven by Internet access, access to applications, messaging and related services — increased by more than $1 billion, or 19.9 percent, from the year-earlier quarter to $6.1 billion. First-quarter wireless operating expenses totaled $11.7 billion, up 3.4 percent versus the year-earlier quarter, and wireless operating income was $4.4 billion, up 11.3 percent year over year.

Wireless Margins Expand Even With Strong Smartphone Sales. First-quarter wireless margins grew significantly, driven by improved operating efficiencies and further revenue gains from the company’s 41 million high-quality smartphone subscribers. AT&T’s first-quarter wireless operating income margin was 27.2 percent versus 25.8 percent in the year-earlier quarter, and AT&T’s wireless EBITDA service margin was 41.6 percent, compared with 39.0 percent in the first quarter of 2011.(EBITDA service margin is operating income before depreciation and amortization, divided by total service revenues.)

Subscriber Gains in Every Category. AT&T posted a net increase in total wireless subscribers of 726,000 in the first quarter to reach 103.9 million in service. This included gains in every customer category. Subscriber additions for the quarter include postpaid net adds of 187,000. Prepaid net adds were 125,000, connected device net adds were 230,000 and reseller net adds were 184,000. First-quarter net adds reflect continued adoption of smartphones and sales of tablets.

Smartphone Sales Exceed First-Quarter Record. AT&T sold 5.5 million smartphones, exceeding a first-quarter sales record set last year. Smartphones represented more than 78 percent of postpaid device sales. At the end of the quarter, 59.3 percent, or 41.2 million, of AT&T’s postpaid subscribers had smartphones, up from 46.2 percent and 31.5 million a year earlier. AT&T’s ARPU for smartphones is 90 percent higher than for non-smartphone subscribers. About 88 percent of smartphone subscribers are on FamilyTalk® or business plans. Churn levels for these subscribers are significantly lower than for other postpaid subscribers. About 30 percent of AT&T’s postpaid smartphone customers use a 4G-capable device.

Both Android and iPhone device sales remain strong. iPhone sales were helped by AT&T’s 4G network, which lets iPhone 4S download three-times faster than other U.S. carriers’ networks. In the quarter, the company activated 4.3 million iPhones, with 21 percent new to AT&T.

Strong Branded Computing Sales. AT&T had its best-ever first-quarter sales for branded computing subscribers, a new wireless data revenue growth area for the company that includes tablets, tethering plans, aircards, mobile Wi-Fi hot spots and other data-only devices. AT&T added 460,000 of these devices to reach 5.8 million, up almost 70 percent in total subscribers from a year ago. During the quarter, 240,000 tablets were added, about three-quarters of which were postpaid.

61 Percent of Smartphone Subscribers on Tiered Data Plans. The number of subscribers on tiered data plans also continues to increase. About 25 million, or 61 percent, of all smartphone subscribers are on tiered data plans compared to 38 percent a year ago, and more than 70 percent have chosen the higher-tiered plans. AT&T’s postpaid wireless subscribers on data plans increased by 15.1 percent over the past year.

Industry-Leading Postpaid ARPU Continues Growth. Postpaid subscriber ARPU increased 1.7 percent versus the year-earlier quarter to $64.46. AT&T continues to lead the industry with postpaid subscriber ARPU. This marked the 13th consecutive quarter AT&T has posted a year-over-year increase in postpaid ARPU. Postpaid data ARPU reached $26.92, up 15.3 percent versus the year-earlier quarter.

Postpaid Churn Improves. Postpaid churn reached its lowest level in seven quarters. For the first quarter, postpaid churn was 1.10 percent, compared to 1.18 percent in the year-ago first quarter and 1.21 percent in the fourth quarter of 2011. Total churn was up, at 1.47 percent versus 1.36 percent in the first quarter of 2011 and 1.39 percent in the fourth quarter of 2011, due to higher reseller and connected device churn.

WIRELINE OPERATIONAL HIGHLIGHTS
AT&T’s first-quarter wireline results were led by continued improving trends in business and strong growth in U-verse revenues. Highlights included:

Wireline Operating Income Improves. AT&T’s wireline operating income totaled $1.8 billion, 2.4 percent higher than the first quarter of 2011 and down 1.2 percent versus the fourth quarter of 2011. First-quarter wireline operating income margin was 12.2 percent, compared to 11.8 percent in the year-earlier quarter. Total first-quarter wireline revenues were $14.9 billion, down 0.8 percent versus the year-earlier quarter and down slightly sequentially. First-quarter wireline operating expenses were $13.1 billion, down 1.2 percent versus the first quarter of 2011 and down slightly sequentially. Improved consumer and business strategic services revenue trends and execution of cost initiatives helped to partially offset declines in voice revenues.

Business Revenues Continue Improving Trends. Business revenues had their best year-over-year comparison in the last three years. Total business revenues were $9.2 billion, down 0.8 percent versus the year-earlier quarter. Business service revenues declined 0.3 percent year over year, compared to a year-over-year decline of 4.4 percent in the year-ago quarter, and were essentially flat sequentially. Declines in legacy products were largely offset by continued strong growth in strategic business services.

Business Data Revenue Growth Accelerates. Revenues from strategic business services, the new-generation capabilities that lead AT&T’s most advanced business solutions — including Ethernet, VPNs, hosting, IP conferencing and application services — grew 19.0 percent versus the year-earlier quarter, continuing strong trends in this area. This now represents a $6.2 billion annualized revenue stream. Total business data revenue growth accelerated to 4.2 percent year over year, the strongest showing in four years.

U-verse Drives Consumer Revenue Growth. Continued strong growth in consumer IP data services in the first quarter offset lower revenues from voice and legacy products. Driven by strength in IP data services, revenues from residential customers totaled $5.4 billion, an increase of 1.0 percent versus the first quarter a year ago. The first quarter marked the seventh consecutive quarter of year-over-year growth in wireline consumer revenues. U-verse continues to drive a transformation in wireline consumer, reflected by the fact that consumer broadband, video and voice over IP revenues now represent 55 percent of wireline consumer revenues, up from 47 percent in the year-earlier quarter. Increased AT&T U-verse penetration and a significant number of subscribers on triple- or quad-play options drove 17.5 percent year-over-year growth in IP revenues from residential customers (broadband, U-verse TV and U-verse Voice) and 3.8 percent sequential quarterly growth. Consumer U-verse revenues grew 38.2 percent compared with the year-ago first quarter and were up 8.5 percent versus the fourth quarter of 2011.

U-verse Tops 6 Million Subscriber Mark. Total AT&T U-verse subscribers (TV and High Speed Internet) reached 6.2 million in the first quarter. AT&T U-verse TV added 200,000 subscribers to reach 4.0 million in service. In the first quarter, the AT&T U-verse High Speed Internet attach rate was more than 90 percent and about half of new subscribers took AT&T U-verse Voice. About three-fourths of AT&T U-verse TV subscribers have a triple- or quad-play option from AT&T. ARPU for U-verse triple-play customers was $169, up slightly year over year. Penetration of eligible living units continues to grow and was at 16.8 percent in the first quarter, and 27.1 percent across areas marketed to for 42 months or more. AT&T U-verse High Speed Internet delivered a first-quarter net gain of 718,000 subscribers to reach a total of 5.9 million, more than offsetting losses from DSL. Overall, AT&T added 103,000 wireline broadband connections. About 45 percent of consumers have a broadband plan delivering speeds up to 6 Mbps or higher versus 35 percent in the year-ago quarter.

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Zach Epstein

April 24th

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Verizon reports Q1: Earnings up 16%, 734,000 net subscriber additions

Verizon on Wednesday reported earnings for the first quarter that narrowly beat analysts’ expectations. The nation’s top carrier posted a profit of $0.59 per share, up about 16% over the same quarter last year and $0.01 above Wall Street’s consensus. Revenue grew 4.6% year over year to $28.2 billion, and net subscriber additions totaled 734,000. Verizon said that 47% of its postpaid subscriber base owned smartphones at the end of the first quarter, up from 43.5% in the same quarter last year. Monthly average revenue per user grew 3.4% to $53.66. ”Verizon delivered double-digit earnings growth and strong cash flow this quarter,” Verizon CEO Lowell McAdam said. “We built momentum coming out of 2011, and our results show that we continue to execute in the key growth areas of our business. Verizon Wireless produced both great growth and great margins, and we produced another strong quarter of FiOS growth. We are confident we will improve Wireline margins for the full year. Our repositioning of Verizon Enterprise Solutions has better aligned our strengths in high-growth markets, and we expect our enterprise business to contribute even more to overall Wireline revenue growth and profitability over time.” Verizon’s full press release follows below.

Verizon Reports Double-Digit Earnings Growth and Increased Operating Cash Flow in First-Quarter 2012

Verizon Wireless Increases Service Revenues by 7.7 Percent, Expands Margins; Demand Remains Strong for FiOS and Strategic Services

1Q 2012 HIGHLIGHTS

Consolidated

  • 59 cents in diluted earnings per share (EPS), compared with 51 cents per share in 1Q 2011 – a 15.7 percent increase.
  • $6.0 billion in cash flow from operating activities, up $922 million compared with 1Q 2011.
  • 4.6 percent year-over-year quarterly revenue growth. 

Wireless

  • 7.7 percent year-over-year increase in service revenues in 1Q 2012; 8.9 percent year-over-year increase in retail service revenues; highest growth rate in three years; data revenues up 21.1 percent; 28.6 percent operating income margin and 46.3 percent Segment EBITDA margin on service revenues (non-GAAP).
  • 734,000 retail net customer additions, excluding acquisitions and adjustments, includes 501,000 retail postpaid net customer additions; continued low retail postpaid churn of 0.96 percent.
  • 93.0 million total retail customers; 88.0 million total retail postpaid customers.

Wireline

  • 193,000 FiOS Internet and 180,000 FiOS Video net additions, with increased sales penetration for both products; net increase of 104,000 broadband connections from 4Q 2011; FiOS Internet customers now total more than 5 million.
  • 8.1 percent year-over-year increase in consumer ARPU; 63 percent of consumer revenues generated by FiOS.
  • 11.6 percent increase in strategic services revenues, representing 51 percent of global enterprise revenues.

NEW YORK – Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported double-digit percentage growth in year-over-year quarterly earnings results and increased cash flow in first-quarter 2012.  Verizon Wireless posted another quarter of profitable revenue growth, while Verizon’s Wireline segment posted another quarter of customer and revenue gains for FiOS fiber-optic services, and increased sales of strategic business services.

Verizon reported 59 cents in EPS in first-quarter 2012, an increase of 15.7 percent compared with first-quarter 2011 earnings of 51 cents per share.  There were no adjustments in either period.

‘On Track to Continue to Deliver Strong Results’ 

“Verizon delivered double-digit earnings growth and strong cash flow this quarter,” said Lowell McAdam, Verizon chairman and CEO.  “We built momentum coming out of 2011, and our results show that we continue to execute in the key growth areas of our business.  Verizon Wireless produced both great growth and great margins, and we produced another strong quarter of FiOS growth.  We are confident we will improve Wireline margins for the full year.  Our repositioning of Verizon Enterprise Solutions has better aligned our strengths in high-growth markets, and we expect our enterprise business to contribute even more to overall Wireline revenue growth and profitability over time.”

He added: “We remain confident in our ability to take advantage of the growth opportunities we see, and we are focused on driving operating efficiencies.  We are on track with our plans and expect to continue to deliver strong results.”

Strong Cash Flows, Increased Capital Efficiency 

In first-quarter 2012, Verizon’s total operating revenues were $28.2 billion on a consolidated basis, an increase of 4.6 percent compared with first-quarter 2011.

Consolidated operating income was $5.2 billion in first-quarter 2012, compared with $4.5 billion in first-quarter 2011.  Consolidated EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled $9.2 billion in first-quarter 2012, compared with $8.5 billion in first-quarter 2011.

Cash flow from operating activities totaled $6.0 billion in first-quarter 2012, an increase of $922 million compared with first-quarter 2011.  Capital expenditures totaled $3.6 billion in first-quarter 2012, a decrease of $798 million compared with first-quarter 2011, as Verizon improved its capital-to-revenue efficiency.  Free cash flow (non-GAAP, cash flow from operations less capex) was $2.4 billion in first-quarter 2012, compared with $672 million in first-quarter 2011.  Verizon expects increasing free cash flow levels through 2012.

Verizon Wireless Delivers Strong Financial, Operational Results

In first-quarter 2012, Verizon Wireless delivered strong growth in revenues and retail customers; increased retail postpaid ARPU (average monthly service revenue per user) and smartphone penetration; and delivered a strong EBITDA margin.

Wireless Financial Highlights

·         Service revenues in the quarter totaled $15.4 billion, up 7.7 percent year over year.  Retail service revenues grew 8.9 percent year over year, to $14.9 billion, an increase of 110 basis points over fourth-quarter 2011 and the highest growth rate in three years.

·         Data revenues were $6.6 billion, up $1.1 billion – or 21.1 percent – year over year, and represent 42.9 percent of all service revenues.  Total revenues were $18.3 billion, up 8.2 percent year over year.

·         Retail postpaid ARPU grew 3.6 percent over first-quarter 2011, to $55.43.  Retail postpaid data ARPU increased to $23.80, up 16.0 percent year over year.  Retail service ARPU grew 3.4 percent, to $53.66.

·         Wireless operating income margin was 28.6 percent.  Segment EBITDA margin on service revenues (non-GAAP) was 46.3 percent.

Wireless Operational Highlights

·         Verizon Wireless added 734,000 retail net customers in the first quarter, including 501,000 retail postpaid net customers.  These additions exclude acquisitions and adjustments.

·         At the end of the first quarter, the company had 93.0 million retail customers, a 5.2 percent increase year over year, including 88.0 million retail postpaid customers.

·         At the end of the first quarter, nearly 47 percent of Verizon Wireless’ retail postpaid customer phone base were smartphones, up from 43.5 percent at the end of fourth-quarter 2011.

·         Retail postpaid churn was 0.96 percent, an improvement of 5 basis points year over year. Total retail churn was 1.24 percent, an improvement of 9 basis points year over year.

·         Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the largest such network in the U.S.  As of today, Verizon Wireless 4G LTE service is available to more than 200 million people in 230 markets across the U.S. – more than two-thirds of the population.

·         Verizon Wireless introduced five new 4G LTE devices in the first quarter 2012:  the Droid 4 and Droid Razr Maxx by Motorola, the Spectrum and Lucid by LG, and the Samsung Galaxy Tab 7.7.  In addition, the Apple iPad with Wi-Fi + 4G became available from Verizon Wireless in mid-March.

FiOS Continues to Add Customers, Increase Sales Penetration

In first-quarter 2012 in the Wireline segment, continued strong demand for FiOS services led to revenue growth generated by U.S. consumer wireline customers and continued gains in FiOS sales penetration.  Globally, continued strong sales of strategic services helped mitigate lower revenues resulting from Verizon’s targeted efforts to eliminate products that do not meet the company’s profitability requirements, and continued secular pressures in wholesale.

Wireline Financial Highlights

·         First-quarter 2012 operating revenues were $9.9 billion, a decline of 2.0 percent compared with first-quarter 2011.  Wireline operating income margin was 1.6 percent, compared with 2.8 percent in first-quarter 2011, and Segment EBITDA margin (non-GAAP) was 22.6 percent, compared with 23.6 percent in first-quarter 2011.

·         Consumer revenues grew 1.7 percent compared with first-quarter 2011.  Consumer ARPU for wireline services was $97.88 in first-quarter 2012, up 8.1 percent compared with first-quarter 2011.  ARPU for FiOS customers continued to total more than $148 in first-quarter 2012.  FiOS services to consumer retail customers represented 63 percent of consumer wireline revenues in first-quarter 2012.

·         Global enterprise revenues totaled $3.9 billion in the quarter, up 0.9 percent compared with first-quarter 2011.  Sales of strategic services – including Terremark cloud services, security and IT solutions, and strategic networking – increased 11.6 percent compared with first-quarter 2011 and represented 51 percent of global enterprise revenues in first-quarter 2012.

Wireline Operational Highlights

·         Verizon added 193,000 net new FiOS Internet connections and 180,000 net new FiOS Video connections in first-quarter 2012.  Verizon had a total of 5.0 million FiOS Internet and 4.4 million FiOS Video connections at the end of the quarter.

·         FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase.  FiOS Internet penetration was 36.4 percent at the end of first-quarter 2012, compared with 33.1 percent at the end of first-quarter 2011.  In the same periods, FiOS Video penetration was 32.3 percent, compared with 29.1 percent.

·         Broadband connections totaled 8.8 million at the end of first-quarter 2012, a 3.3 percent year-over-year increase.  The net increase of 104,000 broadband connections from fourth-quarter 2011 was the highest quarterly net-add total since second-quarter 2009.

·         Verizon continued to expand its next-generation 100 gigabit-per-second network, enabling several more network routes in the U.S. and two additional routes in Europe.

·         The company also took advantage of the fully activated Europe India Gateway submarine cable system. The 15,000 kilometer high-bandwidth optical system, with a design capacity of 3.84 terabits per second, provides much needed diversity for future Internet, e-commerce, data, video and voice services from the United Kingdom to India.

Strategic Agreements Unveiled for Global Sales

Verizon Enterprise Solutions, a sales and marketing organization that harnesses all of Verizon’s cloud, mobility and technology solutions for business and government customers globally, unveiled strategic agreements in first-quarter 2012 to develop offerings in mobile health, electronic health records management and secure e-prescribing.

The organization also announced a digital-signage solution for retail customers, powered by Verizon’s 4G LTE network and infrastructure; unveiled new telematics solutions for the automotive and transportation industries; and rolled out a cross-platform open video communications capability.

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Zach Epstein

April 19th

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