Sprint - Nextel 2005 Annual Report Download - page 31

we license intellectual property could be forced to pay significant damages, which could increase the cost of
these products and services or force them to stop providing certain products or services to us. We also could enter
into licenses with unfavorable terms, including royalty payments, which could adversely affect our business.
Employee Relations
As of December 31, 2005, we had approximately 79,900 active employees, an increase of about 20,000 since
December 31, 2004 due primarily to the Sprint-Nextel merger. Approximately 7,000 of these employees were
represented by unions. It is anticipated that Embarq will have approximately 20,000 employees at the time of the
spin-off.
In 2003 and continuing throughout 2004, we recognized charges from organizational realignment initiatives. The
restructuring was a company-wide effort to create a more customer-focused organization. These decisions
included work force reductions in each segment and corporate functions.
In 2003, we announced the wind-down of our web hosting services. Restructurings of other Long Distance
operations also occurred in the continuing effort to create a more efficient cost structure. These decisions
included work force reductions.
Additional information regarding the impacts of these decisions can be found in note 8 of the Notes to the
Consolidated Financial Statements appearing at the end of this annual report on Form 10-K.
Management
For information concerning our executive officers, see “Executive Officers of the Registrant” in this document.
Information as to Business Segments
For information regarding our business segments, see “Part II, Item 7 Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and also refer to note 20 of the Notes to the Consolidated
Financial Statements appearing at the end of this annual report on Form 10-K.
Item 1A. Risk Factors
Risks Related to the Sprint-Nextel Merger and the Spin-off of Embarq
We may not be able to successfully integrate the businesses of Nextel with ours and realize the anticipated
benefits of the merger.
Significant management attention and resources are being devoted to integrating the Nextel wireless network and
other wireless technologies with ours, as well as the business practices, operations and support functions of the
two companies. The challenges we are facing and/or may face in the future in connection with these integration
efforts include the following:
• integrating our CDMA and iDEN wireless networks, which operate on different technology platforms and
use different spectrum bands, and developing wireless devices and other products and services that
operate seamlessly on both technology platforms;
• developing and deploying next generation wireless technologies;
• combining and simplifying diverse product and service offerings, subscriber plans and sales and
marketing approaches;
• preserving subscriber, supplier and other important relationships;
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