Sprint - Nextel 2006 Annual Report Download - page 59

cash paid to acquire three PCS Affiliates in 2005, offset by net cash received in 2005 of $1.2 billion
related to the Sprint-Nextel merger;
ka $2.5 billion net increase in cash paid for capital expenditures, including a $481 million decrease
related to discontinued operations; and
k$866 million in cash used to collateralize securities loan agreements; partially offset by
k$6.3 billion in proceeds in connection with the spin off of our Local segment, including $1.8 billion
received from Embarq at the time it was spun-off net of cash contributed and proceeds from the sale
of Embarq notes of about $4.4 billion.
Capital expenditures increased due to higher spending in our Wireless segment, in part related to spending on
our iDEN network acquired in the Sprint-Nextel merger. We invested in our Wireless segment primarily to
enhance network reliability, meet capacity demands and upgrade capabilities for providing new products and
services, including the deployment of EV-DO technology, as well as to improve iDEN network reliability to
meet capacity demands and fulfill our obligations under the Report and Order. We invested in our Long
Distance segment to maintain network reliability, upgrade capabilities for providing new products and services
and meet capacity demands.
Financing Activities
Net cash used in financing activities of $6.4 billion during 2006 consisted primarily of:
k$1.6 billion for the purchase of our outstanding common shares pursuant to our share repurchase
program that commenced in the third quarter 2006;
k$3.7 billion paid for the retirement of our term loan and Nextel Partners bank credit facility; and
k$4.3 billion in payments and retirements related to our capital lease obligations and senior notes;
partially offset by
knet proceeds from the sale of $2.0 billion in principal amount of 6.0% senior serial redeemable notes
due in 2016;
kproceeds of $866 million from a securities loan agreement;
knet proceeds of $514 million from issuance of commercial paper; and
k$405 million in proceeds from common share issuances, primarily resulting from exercises of stock
options by employees.
We paid cash dividends of $296 million in 2006 compared to $525 million in 2005. The decrease in cash
dividends paid is due to a decrease in the dividend rate from $0.125 per common share per quarter in the first
two quarters of 2005 to $0.025 per common share per quarter beginning in the third quarter 2005. This
dividend rate decrease was partially offset by an increase in the average number of common shares outstanding
in the year ended December 31, 2006 compared to the year ended December 31, 2005, primarily as a result of
the Sprint-Nextel merger.
Capital Requirements
We currently anticipate that future funding needs in the near term will principally relate to:
koperating expenses relating to our networks;
kcapital expenditures, particularly with respect to the expansion of the coverage and capacity of our
wireless networks and the deployment of new technologies in those networks, including our plans to
build a new broadband wireless network;
kscheduled interest and principal payments related to our debt and any purchases or redemptions of our
debt securities;
kdividend payments as declared by our board of directors, and purchases of our common shares
pursuant to our share repurchase program;
kamounts required to be expended in connection with the Report and Order;
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