Sprint - Nextel 2006 Annual Report Download - page 133
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We generally account for transactions between segments based on fully distributed costs, which we believe
approximate fair value. In certain transactions, pricing is set using market rates. Segment financial information
is as follows:
Statement of Operations Information
Wireless
Long
Distance
Corporate and
Eliminations
(1)
Consolidated
(in millions)
2006
Net operating external revenues .................... $35,111 $ 5,830 $ 87
(1)
$ 41,028
Inter-segment revenues .......................... 4 741 (745) —
Total segment operating expenses .................. (23,426) (5,595) 689 (28,332)
Segment earnings .............................. $11,689 $ 976 $ 31
(1)
12,696
Less:
Depreciation ................................ (5,738)
Amortization ................................ (3,854)
Severance, lease exit costs and asset impairments
(2)
. . . (207)
Merger and integration costs .................... (413)
Operating income .............................. 2,484
Interest expense ............................... (1,533)
Interest income ................................ 301
Equity in losses of unconsolidated investees, net ....... (6)
Realized gain on sale or exchange of investments....... 205
Other, net .................................... 32
Income from continuing operations before income taxes . . $ 1,483
2005
Net operating external revenues .................... $22,322 $ 6,193 $ 274
(1)
$ 28,789
Inter-segment revenues .......................... 6 641 (647) —
Total segment operating expenses .................. (15,384) (5,812) 471 (20,725)
Segment earnings .............................. $ 6,944 $ 1,022 $ 98
(1)
8,064
Less:
Depreciation ................................ (3,864)
Amortization ................................ (1,336)
Severance, lease exit costs and asset impairments
(2)
. . . (43)
Merger and integration costs .................... (580)
Other expense
(3)
............................. (100)
Operating income .............................. 2,141
Interest expense ............................... (1,294)
Interest income ................................ 236
Equity in earnings of unconsolidated investees, net...... 107
Realized gain on sale or exchange of investments....... 62
Other, net .................................... 39
Income from continuing operations before income taxes . . $ 1,291
F-56
SPRINT NEXTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)