Sprint - Nextel 2006 Annual Report Download - page 86

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SPRINT NEXTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Operations, Significant Accounting Policies and Other Information
Summary of Operations
We are a global communications company offering a comprehensive range of wireless and wireline commu-
nications products and services that are designed to meet the needs of individual consumers, businesses and
government customers. We have organized our operations to meet the needs of our targeted customer groups
through focused communications solutions that incorporate the capabilities of our wireless and wireline
services. We are one of the three largest wireless companies in the United States based on the number of
wireless subscribers. We own extensive wireless networks and a global long distance, Tier 1 Internet backbone.
Our Series 1 voting common stock trades on the New York Stock Exchange, or NYSE, under the symbol “S.”
We offer digital wireless service in all 50 states, Puerto Rico and the U.S. Virgin Islands, in part through
commercial affiliation arrangements between us and third party affiliates, each referred to as a PCS Affiliate.
We, together with the four remaining PCS Affiliates, provide code division multiple access, or CDMA, based
personal communications services, or PCS, under the Sprint»brand name. The PCS Affiliates offer digital
wireless service mainly in and around smaller U.S. metropolitan areas on wireless networks built and operated
at their expense, in most instances using spectrum licensed to and controlled by us. We also offer numerous
sophisticated data messaging, imaging, entertainment and location-based applications, marketed as Power
Vision
SM
, across our CDMA network that utilize high-speed evolution data optimized, or EV-DO, technology.
We also offer digital wireless services under our Nextel»and Boost Mobile»brands using integrated Digital
Enhanced Network, or iDEN», technology. Both brands feature our industry-leading walkie-talkie services, or
Direct Connect», which give subscribers the ability to communicate instantly across the continental United
States and to and from Hawaii, and, through agreements with other iDEN-based providers, to and from
selected markets in Canada, Latin America and Mexico, as well as a variety of digital wireless mobile
telephone and wireless data transmission services. In order to offer subscribers of our iDEN services all of the
benefits of applications on our CDMA network and our walkie-talkie features, we have introduced a new line
of combined CDMA-iDEN devices, marketed as PowerSource
TM
, that feature voice applications over our
CDMA network and our walkie-talkie applications over our iDEN network.
Our operations include the results of several companies acquired during 2006 and 2005, including Nextel
Communications, Inc., beginning either as of the date that each respective company was acquired or from the
start of the month closest to the acquisition. Accordingly, these transactions affect the comparability of our
reported results with those reported for prior periods. See note 3 for additional information regarding these
transactions.
On May 17, 2006, we spun-off to our shareholders our local communications business, which is now known as
Embarq Corporation and is comprised primarily of what was our Local segment as reported in our
consolidated financial statements in prior periods. The results of operations, balance sheets and the operating
cash flows from this business are presented as discontinued operations for all periods presented. The footnotes
accompanying these consolidated financial statements reflect our continuing operations and, unless otherwise
noted, exclude information related to Embarq. See note 2 for additional information regarding this transaction.
Consolidation Policies, Estimates and Reclassifications
The consolidated financial statements include our accounts, and those of our wholly owned subsidiaries, and
subsidiaries we control, as well as variable interest entities where we are the primary beneficiary. All
significant intercompany transactions and balances have been eliminated in consolidation. We use the equity
method to account for equity investments in unconsolidated entities in which we have the ability to exercise
significant influence over operating and financial policies. We recognize all changes in our proportionate share
of the equity of these entities resulting from their equity transactions as adjustments to our investment and
shareholders’ equity balances.
F-9