Sprint Nextel Reports Fourth Quarter and Full-Year 2008 Results
Sprint Nextel Corp. (NYSE: S) today reported fourth quarter and full-year 2008 financial results. The company generated $536 million of Free Cash Flow in the quarter, and $1.8 billion for full-year 2008. During the quarter, the company repaid approximately $1 billion in principal of debt and received $213 million in proceeds at the closing of the Clearwire transaction. As of Dec. 31, 2008, the company had $3.7 billion of cash and cash equivalents and $1.4 billion of borrowing capacity available under its revolving bank credit facility, for a total liquidity of $5.1 billion.
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The company reported consolidated net operating revenues of $8.4 billion and a diluted loss per share of 57 cents. Full-year 2008 revenues were $35.6 billion. The company recorded a non-cash goodwill impairment charge of approximately $1 billion in the quarter, which finalizes the accounting for the goodwill related to the Sprint Nextel merger and other acquisitions. Adjusted EPS before Amortization, which removes the impact of non-cash goodwill and other asset impairment charges, as well as the effects of other special items and non-cash amortization expense, was a loss of 1 cent for the quarter.
“In tough economic times, we’re generating substantial cash and reducing costs to ensure we remain financially sound. We already have the cash on hand to be able to meet our debt service requirements at least through the end of 2010,” said Dan Hesse, Sprint Nextel CEO. “With this financial stability, we can build on the improvements we’ve made in customer care, strengthen our brand and maintain continued strong network performance in 2009.
“Independent evaluations report our significant improvement in customer care and network performance. Customers are responding to our messages of value, simplicity and productivity. Simply Everything provides a worry-free postpaid experience, and we are bringing the lessons learned from this success to our new family plans and to the prepaid market with the hassle-free national Boost Monthly Unlimited offer. We also have high expectations for the Palm Pre handset which will be launched later this year,” Hesse said.
On Nov. 28, 2008, the company closed a transaction with Clearwire Corporation. At closing, the company contributed assets, including its 2.5 gigahertz spectrum and WiMAX-related assets, in exchange for an ownership interest in Clearwire. Clearwire is deploying WiMAX, a 4G technology, as a new nationwide network. The services supported by these technologies will give subscribers with compatible devices high-speed access to the Internet and a variety of increasingly sophisticated data services. The company has entered into a mobile virtual network operator (MVNO) arrangement with Clearwire that enables it to resell Clearwire’s 4G wireless services under the Sprint brand name.
The full report is available as a PDF here:
http://library.corporate-ir.net/library/12/127/127149/items/325028/13C09C7E-05D6-4CA7-8536-1CCAA44F5975_4Q08EarningsRelease.pdf