Sprint sees substantial impairment charge

Posted on ZDNet News: Jan 31, 2008 8:06:00 AM

Sprint Nextel said on Thursday it will take a material goodwill impairment charge representing a substantial portion, and potentially all, of the $31 billion goodwill on its balance sheet.

The third-largest U.S. mobile service provider said in a regulatory filing that its initial assessment found that the net book value of its wireless unit exceeds fair value of the unit. Sprint said it has to conduct a second review to measure the size of any adjustment to the accounting value of the wireless unit. The charge will be reported in its fourth-quarter results, but will not affect its current cash balance or future cash flows, nor will it result in any violation of its debt covenants, Sprint said.

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