Sprint enjoys a strong balance sheet with approximately $4.3 billion in cash and short-term investments at the end of 2Q11 compared with $5.5 billion at the end of 2010. Long-term debt declined to $16.3 billion from $18.5 billion in 4Q10.

The Company spent $640 million in 2Q11 compared with $437 million in 2Q10. Sprint generated free cash flow of $267 million, down 62% from $709 million in 2Q10.

Management continues to expect capital expenditure, excluding capitalized interest, to be approximately $3.0 billion for FY11. In addition, it expects to generate positive free cash flow for the remainder of 2011.
 

• Wireless Competition: Given more than 95% U.S. wireless penetration, Wireless competition is likely to remain intense, which could pressure top and bottom line results.

• High Capital Spending: Sprint may invest hugely over the next 2–3 years to address its 4G needs and its network upgrade, potentially utilizing its free cash flow.

• Delay in 4G Deployment: With AT&T and Verizon investing heavily to launch 4G networks, Sprint will face pressure to deploy its 4G network technology on a large scale with significant adoption from customers.

• Clearwire Uncertainties: Sprint has a 54% non-controlling interest in Clearwire, its partner in rolling out its 4G WiMAX network. Clearwire's business plan continues to be underfunded, which implies that further investments from Sprint will be necessary. Given that Sprint does not have a controlling interest in Clearwire, changes in corporate strategy could adversely affect Sprint or diminish the value of its investment.