Sprint - Nextel 2007 Annual Report Download - page 36

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severance, asset impairments and executive separation agreements, partially offset by recoveries of fully
reserved MCI (now Verizon) receivables.
(3) In 2005, we recorded a charge of $16 million due to the adoption of Financial Accounting Standards Board,
or FASB, Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, and in 2003, we
recorded a credit of $258 million as a result of the adoption of SFAS No. 143, Accounting for Asset
Retirement Obligations. Both resulted in a cumulative effect of change in accounting principle.
(4) All per share amounts have been restated, for all periods before 2004, to reflect the recombination of our
common stock and PCS common stock as of the earliest period presented at an identical conversion ratio
(0.50 shares of our common stock for each share of PCS common stock). The conversion ratio was also
applied to dilutive PCS securities (mainly stock options, employees stock purchase plan shares, convertible
preferred stock and restricted stock units) to determine diluted weighted average shares on a consolidated
basis.
(5) In the first and second quarter 2005, a dividend of $0.125 per share was paid. In the third and fourth
quarter 2005 and for each quarter of 2006 and 2007, the dividend was $0.025 per share. Before the
recombination of our two tracking stocks, shares of PCS common stock did not receive dividends. For each
of the years in the two year period ended December 31, 2004, shares of our common stock (before the
conversion of shares of PCS common stock) received dividends of $0.50 per share. In the first quarter 2004,
shares of our common stock received a dividend of $0.125 per share. In the second, third and fourth quarter
2004, shares of our common stock, which included shares resulting from the conversion of shares of PCS
common stock, received quarterly dividends of $0.125 per share.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
We include certain estimates, projections and other forward-looking statements in our annual, quarterly and
current reports, and in other publicly available material. Statements regarding expectations, including
performance assumptions and estimates relating to capital requirements, as well as other statements that are not
historical facts, are forward-looking statements.
These statements reflect management’s judgments based on currently available information and involve a
number of risks and uncertainties that could cause actual results to differ materially from those in the forward-
looking statements. With respect to these forward-looking statements, management has made assumptions
regarding, among other things, customer and network usage, customer growth and retention, pricing, operating
costs, the timing of various events and the economic and regulatory environment.
Future performance cannot be assured. Actual results may differ materially from those in the forward-
looking statements. Some factors that could cause actual results to differ include:
• the effects of vigorous competition, including the impact of competition on the price we are able to
charge customers for services and equipment we provide and our ability to attract new customers and
retain existing customers; the overall demand for our service offerings, including the impact of
decisions of new subscribers between our post-paid and prepaid services offerings and between our two
network platforms; and the impact of new, emerging and competing technologies on our business;
• the impact of overall wireless market penetration on our ability to attract and retain customers with
good credit standing and the intensified competition among wireless carriers for those customers;
• the impact of difficulties we may continue to encounter in connection with the integration of the
pre-merger Sprint and Nextel businesses, and the integration of the businesses and assets of Nextel
Partners and the PCS Affiliates that provide wireless PCS under the Sprint®brand name, that we have
acquired, including the risk that these difficulties may limit our ability to fully integrate the operations
of these businesses and the risk that we will be unable to continue to retain key employees;
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