Sprint - Nextel 2012 Annual Report Download - page 54

Table of Contents
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
Operating Activities
Net cash provided by operating activities of
$3.0 billion in 2012 decreased $692 million from the same period in 2011 . The decrease resulted
from increases in vendor and labor
- related payments of $1.5 billion, which primarily related to an increase in the average cost of postpaid and prepaid
devices sold and increased cash paid for interest of $339 million primarily due to an increase in the weighted average long
- term debt balance and
effective interest rate. This was partially offset by increased cash received from customers of $1.1 billion primarily due to increases in postpaid ARPU
and total net subscribers. Included in our vendor and labor related payments was $108 million in pension contribution payments made during
2012.
Net cash provided by operating activities of
$3.7 billion in 2011 decreased by $1.1 billion from the same period in 2010 . The decrease
resulted from an increase in vendor and labor
- related payments of $2.6 billion, which primarily related to an increase in the average cost of postpaid
and prepaid devices sold and related increases in inventory, increased roaming due to higher 3G and 4G data usage, as well as $136 million in pension
contribution payments. This was offset by $1.2 billion of increased cash received from customers primarily due to increases in total subscriber net
additions and $310 million received for spectrum hosting. In addition, cash paid for interest decreased by $430 million, of which $395 million was
associated with interest capitalization as a result of Network Vision and was reflected as an investing activity.
Investing Activities
Net cash used in investing activities for
2012 increased by $2.9 billion from 2011 , primarily due to increases of $2.4 billion in purchases of
short
- term investments and $1.1 billion in capital expenditures, partially offset by an increase of $533 million in proceeds from sales and maturities of
short
- term investments. Increases in capital expenditures were primarily related to Network Vision spend, partially offset by reductions to legacy
equipment spend. We also recognized $128 million in the form of a note receivable from Clearwire in 2012 as a result of the additional investment
provided through our amended agreement in the fourth quarter 2011. In addition, we purchased Clearwire Corporation Class A Common Stock and
Clearwire Communications LLC Class B Interests from Eagle River for $100 million in December 2012.
Net cash used in investing activities for
2011 increased by $887 million from 2010 , due to increases of $480 million in purchases of short -
term investments and $1.2 billion in capital expenditures. Increases in capital expenditures are related to the addition of data capacity to our wireless
networks and Network Vision and also include $395 million due to the recognition of capitalized interest on qualifying activities associated with
Network Vision primarily related to the carrying value of spectrum licenses not yet placed in service. These increases in use of cash were offset by
increases of $825 million in proceeds from sales and maturities of short
- term investments and a decrease of $201 million in expenditures associated with
our obligations under the FCC Report and Order. In 2012 we also received $135 million in reimbursements from the mobile satellite service (MSS)
entrants for their pro rata portion of our costs of clearing a portion of the
1.9 GHz spectrum. In addition, during the fourth quarter 2011, Sprint invested
an additional
$331 million in Clearwire as a result of an amendment to our agreements and Clearwire's successful offering of additional Class A shares
to the market.
Financing Activities
Net cash provided by financing activities was
$4.3 billion during 2012 . During 2012 , the Company issued debt for senior notes, guaranteed
notes, convertible bonds, and had drawdowns on the secured equipment credit facility totaling, in the aggregate, approximately $9.2 billion and
redeemed the remaining Nextel
49
Year Ended December 31,
2012
2011
2010
(in millions)
Net cash provided by operating activities
$
2,999
$
3,691
$
4,815
Net cash used in investing activities
(6,375
)
(3,443
)
(2,556
)
Net cash provided by (used in) financing activities
4,280
26
(905
)
Net change in cash
$
904
$
274
$
1,354