Sprint - Nextel 2007 Annual Report Download - page 66
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Net cash used in financing activities of $6.4 billion during 2006 increased $5.2 billion from 2005 primarily
due to
• $1.6 billion for the purchase of our outstanding common shares pursuant to our share repurchase
program that commenced in the third quarter 2006;
• $3.7 billion paid for the retirement of our term loan and Nextel Partners bank credit facility compared
to 2005 when we retired a $2.2 billion term loan and a $1.0 billion revolving credit loan with a new
$3.2 billion loan;
• $4.3 billion in payments and retirements related to our capital lease obligations and senior notes
compared to $1.2 billion in 2005;
partially offset by
• net proceeds from the sale of $2.0 billion in principal amount of 6.0% senior serial redeemable notes
due in 2016;
• proceeds of $866 million from securities loan agreements;
• net proceeds of $514 million from issuance of commercial paper; and
• $405 million in proceeds from common share issuances in 2006 compared to $432 million in 2005.
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:
• operating expenses relating to our segment operations;
• capital 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 next generation broadband wireless network;
• scheduled interest and principal payments related to our debt and any purchases or redemptions of our
debt securities;
• amounts required to be expended in connection with the Report and Order;
• increasing expenditures for income taxes, after utilization of available tax net operating loss and tax
credit carryforwards;
• potential costs of compliance with regulatory mandates; and
• other general corporate expenditures.
Liquidity
As of December 31, 2007, our cash and cash equivalents and marketable securities totaled $2.4 billion.
We have a $6.0 billion revolving credit facility, which expires in December 2010 and provides for interest
rates equal to the London Interbank Offered Rate, or LIBOR, or prime rate plus a spread that varies depending on
our parent company’s credit ratings. There is no rating trigger that would allow the lenders to terminate this
facility in the event of a credit rating downgrade.
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