Sprint - Nextel 2007 Annual Report Download - page 93

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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
communications 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 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 three 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, photo and video offerings, entertainment and location-based applications, marketed as Power VisionSM,
across our CDMA network that utilize high-speed evolution data optimized, or EV-DO, technology.
We also offer digital wireless services under our Nextel
®
brand name using integrated Digital Enhanced
Network, or iDEN
®
, technology. The brand features 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 a 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. We
also offer wireless services that focus on the youth market, including the Boost Mobile
®
prepaid wireless service on
our iDEN network and Boost Unlimited, a local calling prepaid service on our CDMA network.
Our operations include the results of several companies acquired principally during 2006 and 2005,
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 2 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 15 for additional information regarding this transaction.
Consolidation Policies, Estimates, Adoption of SAB No. 108 and Reclassifications
Consolidation Policies
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
F-8