Sprint - Nextel 2007 Annual Report Download - page 72

Equity Risk
We are exposed to market risk as it relates to changes in the market value of our investments. We invest in
equity instruments of public and private companies for operational and strategic business purposes. These
securities are subject to significant fluctuations in fair market value due to volatility of the stock market and
industries in which the companies operate. These securities, which are classified in investments and marketable
securities on the consolidated balance sheets, include equity method investments, investments in private
securities, available-for-sale securities and equity derivative instruments.
Additional information regarding our derivative instruments can be found in note 9 of the Notes to
Consolidated Financial Statements.
In certain business transactions, we are granted warrants to purchase the securities of other companies at
fixed rates. These warrants are supplemental to the terms of the business transaction and are not designated as
hedging instruments.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements required by this item begin on page F-1 of this annual report on
Form 10-K and are incorporated herein by reference. The financial statement schedule required under
Regulation S-X is filed pursuant to Item 15 of this annual report on Form 10-K and is incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required
to be disclosed in our reports under the Securities Exchange Act of 1934, such as this Form 10-K, is reported in
accordance with the SEC’s rules. Disclosure controls are also designed with the objective of ensuring that such
information is accumulated and communicated to management, including the Chief Executive Officer and Acting
Chief Financial Officer to allow timely decisions regarding required disclosure.
In connection with the preparation of this Form 10-K as of December 31, 2007, under the supervision and
with the participation of our management, including our Chief Executive Officer and Acting Chief Financial
Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls
and procedures. Based on this evaluation, the Chief Executive Officer and Acting Chief Financial Officer
concluded that the design and operation of the disclosure controls and procedures were effective as of
December 31, 2007 in providing reasonable assurance that information required to be disclosed in reports we file
or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management,
including the Chief Executive Officer and Acting Chief Financial Officer to allow timely decisions regarding
required disclosure and in providing reasonable assurance that the information is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms.
We continue to update our internal control over financial reporting as necessary to accommodate any
modifications to our business processes or accounting procedures. During the fourth quarter 2007, we migrated
certain customers onto a single billing platform. There have been no other changes in our internal control over
financial reporting that occurred during the fourth quarter 2007 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
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