Sprint - Nextel 2011 Annual Report Download - page 102

Table of Contents
SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
We define segment earnings as wireless or wireline operating (loss) income before other segment expenses such as depreciation, amortization, severance, exit
costs, and goodwill and asset impairments solely and directly attributable to the segment. Expense and income items excluded from segment earnings are managed at the
corporate level. Transactions between segments are generally accounted for based on market rates, which we believe approximate fair value. The Company generally re-
establishes these rates at the beginning of each fiscal year. Over the past several years, there has been an industry-wide trend of lower rates due to increased competition
from other wireline and wireless communications companies as well as cable and Internet service providers. Segment financial information is as follows:
F-35
Statement of Operations Information Wireless Wireline
Corporate,
Other and
Eliminations Consolidated
(in millions)
2011
Net operating revenues $ 30,301 $ 3,370 $ 8 $ 33,679
Inter-segment revenues(1)
—
956 (956)
—
Total segment operating expenses (26,034) (3,526) 953 (28,607)
Segment earnings $4,267
$ 800 $5
5,072
Less:
Depreciation and amortization (4,858)
Other, net(2) (106)
Operating income 108
Interest expense (1,011)
Equity in losses of unconsolidated
investments, net $ (1,730) (1,730)
Other expense, net (3)
Loss before income taxes $ (2,636)
Statement of Operations Information Wireless Wireline
Corporate,
Other and
Eliminations Consolidated
(in millions)
2010
Net operating revenues $ 28,597 $ 3,959 $ 7 $ 32,563
Inter-segment revenues(1)
—
1,081 (1,081)
—
Total segment operating expenses (24,066) (3,950) 1,086 (26,930)
Segment earnings $4,531
$ 1,090 $12
5,633
Less:
Depreciation and amortization (6,248)
Other, net(2) 20
Operating loss (595)
Interest expense (1,464)
Equity in losses of unconsolidated
investments, net $ (1,286) (1,286)
Other income, net 46
Loss before income taxes $ (3,299)