Sprint - Nextel 2006 Annual Report Download - page 21

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 14 of the Notes to Consolidated
Financial Statements appearing at the end of this annual report on Form 10-K.
Item 1A. Risk Factors
In addition to the other information contained in this Form 10-K, the following risk factors should be
considered carefully in evaluating us. Our business, financial condition, liquidity or results of operations could
be materially adversely affected by any of these risks.
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, the acquired PCS Affiliates or
Nextel Partners with ours and realize the anticipated benefits of the merger and acquisitions.
We continue to devote significant management attention and resources 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:
kintegrating 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;
kdeveloping and deploying next generation wireless technologies;
kcombining and simplifying diverse product and service offerings, subscriber plans and sales and
marketing approaches;
kpreserving subscriber, supplier and other important relationships;
kconsolidating and integrating duplicative facilities and operations, including back-office systems; and
kaddressing differences in business cultures, preserving employee morale and retaining key employees,
while maintaining focus on providing consistent, high quality customer service and meeting our
operational and financial goals.
The process of integrating Nextel’s operations with ours has caused, and may in the future cause, interruptions
of, or loss of momentum in, our business and financial performance. The diversion of management’s attention
and any delays or difficulties encountered in connection with the integration of the two companies’ operations
has had, and could continue to have, an adverse effect on our business, financial condition or results of
operations. We may also incur additional and unforeseen expenses in connection with the integration efforts.
There can be no assurance that the expense savings and synergies that we anticipate from the merger will be
realized fully or within our expected timeframe.
During 2005 and 2006, we also acquired six PCS Affiliates and Nextel Partners. The process of integrating the
business practices, operations and support functions of these companies involves challenges similar to those
identified above and could add to those challenges by placing a greater strain on our management and
employees.
We are subject to exclusivity provisions and other restrictions under our arrangements with the
remaining independent PCS Affiliates. Continued compliance with those restrictions may limit our
ability to achieve synergies and fully integrate the operations of Nextel and Nextel Partners in the
geographic areas served by those PCS Affiliates, and we could incur significant costs to resolve issues
related to the merger under these arrangements.
The arrangements with the four independent PCS Affiliates restrict our and their ability to own, operate, build
or manage specified wireless communication networks or to sell certain wireless services within specified
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