Sprint - Nextel 2007 Annual Report Download - page 142

SPRINT NEXTEL CORPORATION
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2007, 2006 and 2005
Additions
Balance
Beginning
of Year
Charged
to Income
(Loss)
Charged
to Other
Accounts
Other
Deductions
Balance
End
of Year
(in millions)
2007
Allowance for doubtful accounts ................. $ 383 $920 $ 41(1) $(952)(2) $ 392
Valuation allowance-deferred income tax assets ..... $ 816
(5) $14 $20 (6) $(127)(4) $ 723
2006
Allowance for doubtful accounts ................. $ 291 $656 $ 61(1) $(625)(2) $ 383
Valuation allowance-deferred income tax assets ..... $1,070 $ 10 $ 31(3) $(158)(4) $ 953
2005
Allowance for doubtful accounts ................. $ 240 $388 $181(1) $(518)(2) $ 291
Valuation allowance-deferred income tax assets ..... $ 669 $ 15 $386(3) $ — $1,070
The schedule above only reflects continuing operations.
(1) Amounts charged to other accounts consist of receivable reserves for billing and collection services we
provide for certain PCS Affiliates. Uncollectible accounts are recovered from affiliates. In 2005 and 2006,
the amounts include the allowance recorded in the merger of Nextel and the PCS Affiliates and Nextel
Partners acquisitions.
(2) Accounts written off, net of recoveries.
(3) Amount represents increases in the valuation allowance for deferred tax assets related primarily to the
purchase price allocations in the Sprint-Nextel merger and the PCS Affiliates and Nextel Partners
acquisitions.
(4) Amount represents valuation allowances no longer required due to the utilization or expiration of income
tax carryforwards.
(5) Amount includes a beginning balance adjustment for reclassification of valuation allowance to other
liabilities in accordance with the adoption of FIN 48.
(6) Amount represents increases in the valuation allowance for deferred tax assets related to the purchase price
allocation in the PCS Affiliate acquisitions.
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