New Threads Only:  Add to Google Reader or Homepage
New Threads & Replies:  Add to Google Reader or Homepage
Forums are for serious investors only. GuruFocus Forum Rules.

Forum List » Business News and Headlines
SEC Filings, Earing Reports, Press Releases
New Topic Search
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicSearchLog In
Sprint Nextel Corp. Series 1 Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 5, 2010 09:32AM

Sprint Nextel Corp. Series 1 (S) filed Quarterly Report for the period ended 2010-09-30. Sprint Nextel Corp. Series 1 has a market cap of $12.46 billion; its shares were traded at around $4.09 with and P/S ratio of 0.5.

S is in the portfolios of Francis Chou of Chou Associates Management Inc., Private Capital of Private Capital Management, Dodge & Cox, Mario Gabelli of GAMCO Investors, PRIMECAP Management, Brian Rogers of T Rowe Price Equity Income Fund, John Paulson of Paulson & Co., Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors, Kenneth Fisher of Fisher Asset Management, LLC.

Highlight of Business Operations:

Depreciation expense decreased $172 million, or 12%, and $506 million, or 12%, for the three and nine-month periods ended September 30, 2010 compared to the same periods in 2009, primarily due to a reduction in the replacement rate of capital additions resulting from reduced capital spending associated with our cost control actions beginning in 2008. Amortization expense declined $96 million, or 28%, and $246 million, or 19%, for the three and nine-month periods ended September 30, 2010 as compared to the same periods in 2009, primarily due to reductions in amortization of customer relationships, which are amortized using the sum-of-the-years’-digits method, resulting in higher amortization rates in early periods that decline over time. These reductions were partially offset by an increase in amortization related to the iPCS and Virgin Mobile acquisitions.

Other, net decreased by $60 million and improved by $326 million for the three and nine-month periods ended September 30, 2010 compared to the same periods in 2009. Other, net consists primarily of severance and exit costs, gains from asset dispositions and exchanges and benefits resulting from favorable developments relating to access cost disputes with certain exchange carriers. Severance and exit costs decreased by $25 million for the three-month period ended September 30, 2010 compared to the same period in 2009 due to continued organizational realignment initiatives that occurred in the third quarter 2009. Severance and exit costs decreased $327 million for the nine-month period ended September 30, 2010, compared to the same period in 2009 primarily as a result of costs incurred in 2009 for the workforce reduction announced in January 2009 which were not incurred in 2010. The three and nine-month periods ended September 30, 2009 benefited by $60 million related to gains from an asset exchange in which we exchanged spectrum assets in the third quarter 2009. Benefits resulting from favorable developments relating to access cost disputes with certain exchange carriers totaled $84 million in 2010 as compared to $25 million in 2009.

Interest expense, net remained relatively flat for the three-month period ended September 30, 2010, and increased $31 million, or 3%, for the nine-month period ended September 30, 2010 compared to the same periods in 2009. The increase for the nine-month period was primarily due to higher effective interest rates on our average long-term debt balances and increased costs on our revolving credit facilities which include the accelerated amortization of previously unamortized debt issuance costs from the retirement of our former credit facility. The effective interest rate on the average long-term debt balance of $20.3 billion and $21.5 billion was 7.2% and 6.8% for the three-month periods ended September 30, 2010 and 2009, respectively. The effective interest rate on the average long-term debt balance of $20.8 billion and $21.5 billion was 7.2% and 6.7% for the nine-month periods ended September 30, 2010 and 2009, respectively. See “Liquidity and Capital Resources” for more information on the Company’s financing activities. Interest income was unchanged in the three and nine-month periods ended September 30, 2010 as compared to the same periods in 2009.

This item consists mainly of our proportionate share of losses from our equity method investments and also includes other miscellaneous income/(expense). Equity losses associated with the investment in Clearwire consists of Sprint’s share of Clearwire’s net loss and other adjustments such as gains or losses associated with the dilution of Sprint’s ownership interest resulting from Clearwire’s equity issuances. Equity in losses from Clearwire were $298 million and $156 million for the three-month periods ended September 30, 2010 and 2009, and $848 million and $572 million for the nine-month periods ended September 30, 2010 and 2009, respectively.

The prior year equity in losses of Clearwire include a pre-tax dilution loss of $154 million ($96 million after tax) recognized in the first quarter 2009, representing the finalization of ownership percentages associated with the formation of Clearwire, which was subject to change based on the trading price of Clearwire stock during the 90 days subsequent to the November 2008 closing.

The consolidated effective tax rate was an expense of approximately 7% and a benefit of 42% for the nine-month periods ended September 30, 2010 and 2009, respectively. The income tax expense for the nine-month period ended September 30, 2010 includes a $1 billion net increase to the valuation allowance for federal and state deferred tax assets related to net operating loss carryforwards generated during the period. We do not expect to record tax benefits on future net operating losses until our circumstances justify the recognition of such benefits. The income tax benefit for the nine-month period ended September 30, 2009 includes a $55 million state income tax benefit net of the federal tax effect, plus a $25 million net decrease to the valuation allowance and an $84 million reduction in the liability for unrecognized tax benefits, both as a result of favorable income tax settlements. Additional information related to items impacting the effective tax rates can be found in Note 10 of Notes to the Consolidated Financial Statements.

Read the The complete Report



Stocks Discussed: S,
Rate this post:




Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't




Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial