Sprint - Nextel 2007 Annual Report Download - page 139

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SPRINT NEXTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 14. Quarterly Financial Data (Unaudited)
During 2006, we acquired several companies and the financial results of those acquired companies are
included in our quarterly financial data either from the date of their respective acquisition or from the start of the
month closest to the acquisitions. We also acquired Northern PCS in August 2007 whose results are not material
to our consolidated results of operations. See note 2 for information regarding these business combinations.
Quarter
1st 2nd 3rd 4th
(in millions, except per share data)
2007
Net operating revenues ..................................... $10,092 $10,163 $10,044 $ 9,847
Operating income (loss)(1) ................................... 1 316 398 (29,625)
Income (loss) from continuing operations(1)(2) .................... (211) 19 64 (29,452)
Net income (loss)(1)(2) ....................................... (211) 19 64 (29,452)
Basic earnings (loss) per common share from continuing
operations(1)(3) ........................................... (0.07) 0.01 0.02 (10.36)
Diluted earnings (loss) per common share from continuing
operations(1)(3) ........................................... (0.07) 0.01 0.02 (10.36)
Quarter
1st 2nd 3rd 4th
(in millions, except per share data)
2006
Net operating revenues ..................................... $10,068 $10,008 $10,489 $ 10,438
Operating income .......................................... 484 712 719 569
Income from continuing operations ............................ 164 291 279 261
Net income ............................................... 419 370 279 261
Basic earnings per common share from continuing operations(3) ..... 0.05 0.10 0.09 0.09
Diluted earnings per common share from continuing operations(3) .... 0.05 0.10 0.09 0.09
(1) In the fourth quarter 2007, we performed our annual assessment of impairment for goodwill. As a result of
these analyses, which are described in note 3, we recorded a non-cash goodwill impairment charge of
$29.7 billion.
(2) The net loss for the first quarter is primarily due to increased wireless equipment subsidy and an increase in
severance costs related to our workforce reductions.
(3) The sum of the quarterly earnings per share amounts may not equal the annual amounts because of the
changes in the weighted average number of shares outstanding during the year.
Note 15. Discontinued Operations
On May 17, 2006, we completed the spin-off of our local communications business, which is now known as
Embarq Corporation. Embarq offers regulated local communications services as an incumbent local exchange
carrier and provides a suite of communications services, consisting of local and long distance voice and data
services, including high-speed Internet access. As required by SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, and as permitted by SFAS No. 95, Statement of Cash Flows, the results of
operations and cash flows from operating activities of this business are presented as discontinued operations for
all periods presented.
F-54