Sprint - Nextel 2006 Annual Report Download - page 28

communications industry. Further research and studies are ongoing, and we cannot be sure that additional
studies will not demonstrate a link between radio frequency emissions and health concerns.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
We currently lease our corporate headquarters offices in Reston, Virginia. These facilities total about 801,000
square feet and the related operating leases have initial terms expiring in 2009, 2010 and 2014. Such facilities
have renewal options, which we may, or may not, exercise. Our operational headquarters campus is located in
Overland Park, Kansas and consists of about 4 million square feet.
Our gross property, plant and equipment at December 31, 2006 totaled $42.4 billion, distributed among the
business segments as follows:
2006
(in billions)
Wireless .................................................................... $37.0
Long Distance ............................................................... 3.3
Other ...................................................................... 2.1
Total ...................................................................... $42.4
Properties utilized by our Wireless segment consist of base transceiver stations, switching equipment and
towers, as well as leased and owned general office facilities and retail stores. We lease space for base station
towers and switch sites for our wireless network. At December 31, 2006, we had 61,000 cell sites on air.
In May 2005, we closed a transaction with Global Signal under which Global Signal has exclusive rights to
lease or operate about 6,500 communication towers owned by us for a negotiated lease term which is the
greater of the remaining terms of the underlying ground leases or up to 32 years, assuming successful re-
negotiation of the underlying ground leases at the end of their current lease terms. We have committed to
sublease space on about 6,400 of the towers from Global Signal. We will maintain ownership of the towers
and will continue to reflect the towers on our consolidated balance sheet.
Properties utilized by our Long Distance segment generally consist of land, buildings, switching equipment,
digital fiber-optic network and other transport facilities. We have been granted easements, rights-of-way and
rights-of-occupancy by railroads and other private landowners for our fiber-optic network.
As of December 31, 2006, about $621 million of outstanding debt, comprised of certain secured notes, capital
lease obligations and mortgages, is secured by $1.9 billion of gross property, plant and equipment, and other
assets.
Additional information regarding our commitments related to operating leases can be found in note 13 of the
Notes to Consolidated Financial Statements appearing at the end of this annual report on Form 10-K.
Item 3. Legal Proceedings
In March 2004, eight purported class action lawsuits relating to the recombination of our tracking stocks were
filed against us and our directors by holders of PCS common stock. Seven of the lawsuits were consolidated in
the District Court of Johnson County, Kansas. The eighth, pending in New York, has been voluntarily stayed.
The consolidated lawsuit alleges breach of fiduciary duty in connection with allocations between the wireline
operations and the wireless operations before the recombination of the tracking stocks and breach of fiduciary
duty in the recombination. The lawsuit seeks to rescind the recombination and monetary damages. In
December 2006, the court denied defendants’ motions to dismiss the complaint and for summary judgment,
and granted a motion to certify the class. In February 2007, the court upon reconsideration dismissed a count
of the complaint related to intracompany allocations, which requires dismissal of the complaint against three
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