Sprint - Nextel 2006 Annual Report Download - page 137

Non-Voting Common Stock
About 38 million shares of our non-voting common stock was issued in the Sprint-Nextel merger in August
2005 to Motorola and its subsidiary, the only holders of non-voting common shares. In December 2006,
Motorola and its subsidiary exercised their right to convert the non-voting common shares into an equal
number of our Series 1 common shares, resulting in a $623 million decrease in paid-in capital and a reduction
in treasury shares, as shown in the consolidated statements of shareholders’ equity.
Dividends
We paid a dividend of $0.025 per share on the common stock, Series 1, the common stock, Series 2, and the
non-voting common stock in each of the quarters of 2006 and in the third and fourth quarters 2005. We paid a
dividend of $0.125 per share on the common stock, Series 1 in the first two quarters of 2005 and in each of
the quarters of 2004 and a dividend of $0.125 per share on the common stock, Series 2 in the first two
quarters of 2005 and in each of the last three quarters of 2004. The common stock, Series 2 was issued at the
time of the recombination of the PCS common stock and the FON common stock in April 2004.
Share Repurchase Program
On July 25, 2006, our board of directors authorized the purchase of up to $6.0 billion of our Series 1 common
stock through open market purchases. This authorization will expire upon the earlier of the full repurchase of
the authorized shares or during the first quarter 2008. The number of shares purchased and the timing of any
purchases will vary throughout the purchase period. As of December 31, 2006, we had repurchased 98 million
shares of our Series 1 common stock for $1.6 billion at an average price of $16.76 per share.
Common Stock Reserved for Future Grants
As of December 31, 2006, Series 1 common stock reserved for future grants under plans providing for the
grant of stock options and other equity-based awards, future grants under the employees stock purchase plan
or future issuances under various other arrangements included:
Shares
(in millions)
Employees stock purchase plan .................................................. 22.4
Officer and key employees’ and directors’ stock options and other equity-based awards ......... 146.7
5.25% convertible debt conversion rights ........................................... 11.3
180.4
Recombination of Tracking Stock
On April 23, 2004, we recombined our two tracking stocks. Each share of PCS common stock automatically
converted into 0.50 shares of FON common stock. The conversion of PCS common stock into FON common
stock resulted in an increase in FON common stock outstanding of 518.5 million shares as of April 23, 2004.
As of April 23, 2004, the FON Group and the PCS Group ceased to exist. Our common stock now represents
all of our operations and assets, including our Wireless and Long Distance segments. The consolidated
financial statements reflect the recombination as if it had occurred as of the earliest period presented.
Rights Plan
On March 16, 2004, we entered into an amended rights agreement. The rights plan was designed to provide
our board of directors with sufficient time, flexibility and negotiating leverage to adequately evaluate strategic
alternatives in an orderly manner, as well as to ensure equal and fair treatment for our shareholders. One half
of a right is attached to each share of common stock outstanding and becomes exercisable upon the earlier of
ten business days after a person or group has acquired, or obtained the right to acquire, in a transaction not
approved by the board of directors, 15% or more of the voting power in us or ten business days after a person
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SPRINT NEXTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)