Union withdraws from regulatory review of new local service company
Overland Park, Kan. — 02/13/2006
Sprint Nextel Corp. (NYSE: S) and the Communications Workers of America (CWA) today announced an agreement covering labor relations issues for employees of Sprint Nextel’s local communications company. The separation of the local communications company, which will be known as Embarq Corporation, from Sprint Nextel is expected to occur in the second quarter of this year.
CWA Telecommunications Vice President Jimmy Gurganus said in recent talks with Sprint Nextel that, "We received assurances over questions we had regarding the financial characteristics of the new company and the transfer of pension assets." As a result, he said, CWA has withdrawn its interventions in state regulatory proceedings.
"We wanted to make sure that the new company would have the resources to invest in the future, have the ability to compete successfully and provide quality service and secure jobs," Gurganus said. "As a result of our talks, we are now satisfied on that score."
"We are pleased that we were able to address the CWA’s questions regarding the structure of the separation from Sprint Nextel," said Mike Fuller, Chief Operating Officer designee of Embarq. "We look forward to continuing to partner with the CWA to offer our customers the great products and services they have come to expect," he said.
CWA represents approximately 3,800 workers in the local telecommunications operations at Sprint Nextel in 12 states.
Among the terms of the agreement:
- Joint strategic committees will be set up at both national and regional levels to share information, address mutual concerns and problems, and foster a better working relationship.
- The new company and union agreed to renew efforts to arrive at a national understanding on health care plan design.
- Before dividing and allocating pension assets to the new company, Sprint Nextel will share its actuary’s report with CWA and give the union an opportunity to comment.
- CWA employees now will participate in the company’s Short Term Incentive program, which provides bonuses based on meeting specific business goals.
- The company agreed that it will seek cost-effective ways to increase rather than decrease the ratio of employees to contractors and to provide employees continued access to training opportunities.
About the Local Communications Company
Upon the separation from Sprint Nextel, the local telecommunications company, which will be known as Embarq Corporation, is expected to be a NYSE-listed company with approximately $6 billion in annual revenues, rank among the Fortune 500 and serve as the fifth largest local communications company in the United States based on the company’s 7.4 million access lines as of Sept. 30, 2005. The company will provide a suite of communications services, consisting of local and long distance voice and data services, including high-speed Internet access. The company expects to have approximately 20,000 employees at the time of the separation from Sprint Nextel.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services to consumer, business and government customers. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks offering industry leading mobile data services; instant national and international walkie-talkie capabilities; and an award-winning and global Tier 1 Internet backbone. For more information, visit www.sprint.com/mr.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
The matters discussed in this press release that are not historical or current facts deal with potential future circumstances and developments, in particular relating to completion of the separation. This discussion is qualified by the inherent risks and uncertainties surrounding future events generally and also may differ materially from actual future experience involving any one or more of such matters. Such risks and uncertainties include: the result of the review of the proposed separation by various regulatory agencies and any conditions imposed on Embarq Corporation or Sprint Nextel in connection with consummation of the separation, the approval of the separation by the Sprint Nextel board of directors, the receipt of satisfactory tax opinions and the risks that are described in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" contained in the Form 10 Registration Statement of Embarq Corporation, as filed with the Securities and Exchange Commission on January 23, 2006 under the name LTD Holding Company and in Sprint Nextel’s filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2004, as amended, and its quarterly reports on Form 10-Q filed in 2005. In addition to the factors mentioned above and within the Form 10 Registration Statement and in Sprint Nextel’s filings with the Securities and Exchange Commission, economic, governmental, technological, capital market and other factors could affect the forward-looking statements in this press release. Forward-looking statements speak only as of the date they were made, and neither Sprint Nextel nor Embarq Corporation undertakes an obligation to update or revise any forward-looking statements in light of new information or future events.