Article 43

 

Sprint’s Merger Washout

Sprint May Record $31 Billion Writedown

The Associated Press
January 31, 2008

Sprint Nextel Corp., the nation’s third-largest wireless provider, said today it may have to writeoff up to $31 billion in value. 

The company said an annual review of its goodwill what a company is worth beyond its assets ח determined that the actual value of its wireless goodwill was less than what is recorded on its books, currently valued at $31 billion.

Now the company is determining how much of a blow the balance sheet will take.

Based on the work completed to date, Sprint Nextel will be required to record a material, non-cash impairment charge that will represent a substantial portion, and potentially all, of the goodwill recorded on its balance sheet,Ӕ the company said in a securities filing.

The charge would be reported as part of its fourth-quarter financial results, expected to be released on Feb. 28.

Sprint Nextel said a writedown wouldnt affect the companyҒs cash balance or future cash flows or leave the company in danger of violating its debt covenants.

The company, based in Reston, Va., with operational headquarters in Overland Park, has struggled SINCE BUYING Nextel Communications Inc. in 2005, falling far behind rivals AT&T and Verizon Wireless to attract and retain customers.

The problems led to the resignation of Chief Executive Officer GARY FORSEE in October. The company in December appointed DAN HESSE, the former chief executive officer of Sprints local telephone service spinoff Embarq Corp., to take over and attempt to revive the company.

SOURCE

Posted by Elvis on 02/07/08 •
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