Sprint - Nextel 2008 Annual Report Download - page 75

SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Description of Operations
Sprint Nextel Corporation and its subsidiaries (“Sprint,” “we,” “us,” “our” or the “Company”) is a
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, government subscribers
and resellers. We have organized our operations to meet the needs of our targeted subscriber groups through
focused communications solutions that incorporate the capabilities of our wireless and wireline services. As a
result of the acquisition of Virgin Mobile USA, Inc. (VMU) on November 24, 2009 and iPCS, Inc. (iPCS) on
December 4, 2009 (See Note 3), the operations of VMU and iPCS are consolidated prospectively from their
respective acquisition dates.
The Wireless segment includes retail and wholesale revenue from a wide array of wireless mobile
telephone and wireless data transmission services and the sale of wireless devices and accessories in the U.S.,
Puerto Rico and the U.S. Virgin Islands.
The wireline segment includes revenue from domestic and international wireline voice and data
communication services, including services to the cable multiple systems operators that resell our local and long
distance service and use our back office systems and network assets in support of their telephone services
provided over cable facilities.
Sprint’s fourth generation (4G) technology capabilities exist through our mobile virtual network
operator (MVNO) relationship with and 56% ownership interests in Clearwire Corporation and its consolidated
subsidiary, Clearwire Communications LLC (together, Clearwire). Clearwire is deploying Worldwide
Interoperability for Microwave Access (WiMAX) technology as a new network in markets that we serve. The
services supported by this technology gives subscribers with compatible devices high-speed access to the Internet
and a variety of increasingly sophisticated data services (See Note 4).
Note 2. Summary of Significant Accounting Policies and Other Information
Consolidation Policies and Estimates
The consolidated financial statements include our accounts, those of our wholly owned subsidiaries, and
subsidiaries we control or in which we have a controlling financial interest. All significant intercompany
transactions and balances have been eliminated in consolidation. Investments where Sprint maintains majority
ownership, but lacks full decision making ability over all major issues, are accounted for using the equity
method. Governance for Sprint’s major unconsolidated investment in Clearwire is based on our Board
representation for which Sprint does not maintain majority vote or the ability to control operating and financial
policies.
The consolidated financial statements are prepared in conformity with accounting principles generally
accepted in the United States (GAAP). This requires management of the Company to make estimates and
assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of
contingent assets and liabilities as of the date of the consolidated financial statements. These estimates are
inherently subject to judgment and actual results could differ.
Certain prior period amounts have been reclassified to conform to the current period presentation.
Subsequent events were evaluated for disclosure through the date on which the financial statements were filed
with the Securities and Exchange Commission.
Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash equivalents generally include highly liquid investments with maturities at the time of purchase of
three months or less. These investments include money market funds, certificates of deposit, U.S. government
and government-sponsored debt securities, corporate debt securities, municipal securities, bank-related securities,
and credit and debit card transactions in process.
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