Control Number: 18662 Item Number: 66

Control Number: 18662 Item Number: 66 Addendum StartPage: 0 Scott Stringer Director- Regulatory Affairs 400 West 15"' Street, . >.-_ Suite 1400 Austin, Texas 78701 512-867-1 056 May 11, 2006 James Galloway, Filing Clerk Public Utility Commission of Texas 1701 N. Congress Avenue Austin, Texas 78701 Re: Project No. 18662 - Telephone Securities and Exchange (SEC) Form 10-Q Pursuant to Subst. R. 26.73(C) Please find enclosed four (4) copies of Sprint Nextel Corporation's SEC Form 10-Q. If you have questions or need additional information, please do not hesitate to contact me. Sincerely , Scott Stringer UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM l0-Q (Mark One) [XI QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31,2006 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR lyd) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-04721 SPRINT NEXTEL CORPORATION (Exact name of registrant as specikd in ih charter) Kansas 4-457967 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) IdentificationNo.) 2001 Edmund Halley Drive, Reston, Virginia 20191 (Address of principalexecutive offices) (Zip Code) Registrant's telephone number, including area code: (703) 433-4000 (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (I) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90'days. Yes El No 0 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated tiler, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (check one): Large accelerated filer El Accelerated Filer 0 Non-accelerated Filer 0 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes 0 No COMMON SHARES OUTSTANDING AT APRIL 28,2006: VOTING COMMON STOCK Series I 2,861,598,562 Series 2 79,831,333 NON-VOTING COMMON STOCK 37,594,109 2 SPRINT NEXTEL CORPORATION TABLE OF CONTENTS Page -Reference Part I - Financial Information Item I. Financial Statements Consolidated Statements of Ooerations 1 Consolidated Balance Sheets 2 Consolidated Statements of Cash Flows 3 Consolidated Statement of Shareholders’ Eauity 4 Notes to Consolidated Financial Statements 5 Reoort of Indeoendent Registered Public Accounting Finn 27 Item 2. Management’s Discussion and Analvsis of Financial Condition and Results of Ooerations 28 Item 3. Ouantitative and Oualitative Disclosures About Market Risk 51 Item 4. Controls and Procedures 53 Part I1 - Other Information Item I. &a1 Proceedines 54 Item 1A. Risk Factors 54 Item 2. Unregistered Sales of Eauitv Securities and Use of Proceeds 54 Item 3. Defaults Uoon Senior Securities 55 Item 4. Submission of Matters to a Vote of Securitv Holders 55 Item 5. Other Information 56 Item 6. Exhibits 57 Signatures 59 3 '1 1 Part I - FINANCIAL INFORMATION Item 1. Financial Statements SPRINT NEXTEL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS For the Quarters Ended March 31,2006 and 2085 (in millions, except per share amounts) Unaudited Operating expenses Costs of services and pmdu#s (exchive iatian included Mw) Selling, general and administrative Restnlchaing(andsruct~ts Depreciation AllWtiZatiOtl Operattug income Other income (expense) Interest expense Interest income Equity in earnings (losses) of uncansoliW Other, net Income before income faxes Income tax expense Net income Preferred stock dividends Income avnilable to common shareholders Basic earnings per common share Basic weighted average common shares outstanding Diluted earnings per common share Diluted weighted average commoa shared outstanding See accompanying Notes to Consolihted Financial Statements (Unaudited) 1 4 SPRINT NEXTEL CORPORATION CONSOLIDATED BALANCE SHEETS As of March 31,2006 and December 31,2005 2006 2005 (UnauaWd) (in milUons) ASSETS C Accsunts receivable. net of sllowsnce fix doubtful Inventories Dcferrodt8xmet Prepaid expenses and other current assets Total cumt assets Investments PrePHtg, pknthsd equipment, Intangible assets ooodwill FCC licenses customer relationships, net er intangible assets, net SHAREHOLDERS’ EQ and other Cunent portion of long-teim debt and capital lease obligations Total current liabilities Lengterm debt and capital lease obligations Deferred income taxes Postretirement amd other benet& obligationr Other liabilities Total liabilities Seventh series redeemable preferred stock Sharehdders’ equity Common stock .00 per share, 6,500 billion shares authorized, 2.937 billion and 2.923 billion shares i ar value $0.01 per share, 100 million shares authorized, 38 million shares issued and outstandin other comprehensive loss Total shareholders’ equity See accornpoqing Notes to Consolidated Financial Statements (Unoudited). L 5 SPRINT NEXTEL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the Quarters Ended March 31,2006 and 2005 (in millions) Unaudited Cabfitnn from epenttng aetivitb Net income Adjustments to dlenet income to net cab pwjdodby opemthgactivities: Provision for losses on accounts receivable iabilities, net ofeffects of acqubiiioas: urrent liabilities Noncurrent assets and liabititi- net d by operating activities 2.967 1.384 and Veldta, net of cash acquired ProCGeds from maturities and sales of mwkefable securities m sales of assets and investments 17Z ash used in investing activities flaanciug acWtka Retirement of redeemable preferred stock Purchase and retirements of debt Proceeds from issuance of common stock Dividends paid Other, net --- 13 Net cash used in financing activities Net decrease in cash and cash equivalents Cssh and 4equivalents, beginning of period Cash and cash equivalents, end of period --$ 6.604 $ 3.687 See accompanying Nates to Consolidated Financial Statements (Unaudited). 3 6 t ~~~ SPRINT NEXTEL CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUlTY For the Qnsrter Ended March 31,2006 (in millions) Unaudited venng Non-voHng Accumulated Common Stock Common Stock Other Paid-in Retained Comprehensive Sbrrerr.AlnnllatSLIlpM fw.arr,Jatlarryl,fBoQ 2923 S 5,846 38 S - S Net income Common stock dividends Preferred stock dividends Common stack hued, net 14 28 Stock-based compensation expense Aocelerated ves- of Nextel stpcl;-based awardg Other, net Balance+March 31,2W See accornpn.ving Notes to Consolidated Financial Statements (Unaudited). 4 7 SPRINT NEXTEL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Our unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and reflect all adjustments that are necessary for a fair presentation of the results for interim periods. All adjustments made were of a normal recurring nature, except as described in the notes below. Certain information and footnote disclosures normally included in consolidated financial statements prepared according to accounting principles generally accepted in the United States have been condensed or omitted. As a result, you should read these consolidated financial statements along with the consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 3 1, 2005, as amended. Operating results for the interim period should not be viewed as representative of results that may be expected for the year ending December 3 1,2006. Note 1. Basis of Consolidation and Presentation Consolidation and Comparative Presentation e On January 3 1,2006, we acquired Enterprise Communications Partnership for $77 million in cash. On February I, 2006, we acquired Alamosa Holdings, Inc. for $3.4 billion in cash. In August 2005, a subsidiary of ours merged with Nextel Communications, Inc. We also acquired US Unwired Inc., Gulf Coast Wireless Limited Partnership and IWO Holdings, Inc. in the second half of 2005. Each of these companies is now our wholly owned subsidiary. In addition, on February 21,2006, we acquired 94% of the voting stock of Velocita Wireless Holding Corporation for $157 million in cash, and expect to acquire the remaining 6% in May 2006. See note 2 for further discussion of these transactions. The accompanying consolidated financial statements include our accounts, those of our wholly owned subsidiaries, and subsidiaries we control, as well as variable interest entities where we are the primary beneficiary. All significant intercompany transactions and balances have been eliminated in consolidation. We use the equity method to account for equity investments in unconsolidated entities in which we exercise significant influence over operating and financial policies but do not control. We recognize all changes in our proportionate share of the unconsolidated subsidiaries’ equity resulting from their equity transactions as adjustments to our investment and shareholders’ equity balances. We use the cost method to account for equity investments in all other unconsolidated entities. See note 4 for additional information. We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, which require management

Load more