Sprint - Nextel 2010 Annual Report Download - page 20

We may be unable to sell some or all of our investment in Clearwire quickly or at all.
Clearwire's publicly traded Class A common stock is volatile. In addition, the daily trading volume of Clearwire's
Class A common stock is lower than the number of shares of Class A common stock we would hold if we exchanged all of our
Clearwire Class B common stock and interests. If we should decide to sell some or all of our equity securities of Clearwire,
there may not be purchasers available for any or all of our stock, or we may be forced to sell at a price that is below the then
current trading price or over a significant period of time. We are also subject to certain restrictions with respect to the sale of
our equity securities of Clearwire.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our corporate headquarters are located in Overland Park, Kansas and consists of about 3,853,000 square feet.
Our gross property, plant and equipment at December 31, 2010 totaled $46.1 billion, as follows:
Wireless
Wireline
Corporate and other
Total
2010
(in billions)
$ 39.2
4.5
2.4
$ 46.1
Properties utilized by our Wireless segment generally consist of base transceiver stations, switching equipment and
towers, as well as leased and owned general office facilities and retail stores. We lease space for base station towers and switch
sites for our wireless network.
Properties utilized by our Wireline segment generally consist of land, buildings, switching equipment, digital fiber
optic network and other transport facilities. We have been granted easements, rights-of-way and rights-of-occupancy by
railroads and other private landowners for our fiber optic network.
As of December 31, 2010, about $1.3 billion of outstanding debt, comprised of certain secured notes, financing and
capital lease obligations and mortgages, is secured by $1.1 billion of gross property, plant and equipment, and other assets.
Item 3. Legal Proceedings
In December 2010, the U.S. District Court for the District of Kansas granted summary judgment in favor of Sprint
and the other defendants, in a class action lawsuit filed in 2003, which alleged that our 2001 and 2002 proxy statements were
false and misleading in violation of federal securities laws to the extent they described new employment agreements with
certain senior executives without disclosing that, according to the allegations, replacement of those executives was inevitable.
No appeal was taken from that decision, and the case is now closed.
On January 6, 2011, the U.S. District Court for the District of Kansas denied our motion to dismiss a shareholder
lawsuit, Bennett v. Sprint Nextel Corp., that alleges that the Company and three of our former officers violated Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 by failing adequately to disclose certain alleged operations difficulties
subsequent to the Sprint-Nextel merger, and by purportedly issuing false and misleading statements regarding the write-down
of goodwill. The complaint was originally filed in March 2009 and is allegedly brought on behalf of purchasers of company
stock from October 26, 2006 to February 27, 2008. On January 20, 2011, we moved to certify the January 6th order for
interlocutory appeal. We believe the complaint is without merit and intend to defend the matter vigorously. We do not expect
the resolution of this matter to have a material adverse effect on our consolidated financial position or results of operations.
Two related shareholder derivative suits were filed against the Company and certain of our present and/or former
officers and directors. The first, Murphy v. Forsee, was filed in state court in Kansas in April 2009, was removed to federal
court, and was stayed by the court pending resolution of the motion to dismiss the Bennett case. The second, Randolph v.
Forsee, was filed in July 2010 in state court in Kansas, was removed to federal court, and was remanded back to state court.
The parties are discussing a schedule for these cases going forward in light of the pendency of the Bennett case.
We are currently engaged in an arbitration with Clearwire relating to the pricing of service on Clearwire's 4G network
for dual-mode wireless handsets used by Sprint customers, pursuant to our MVNO agreement with Clearwire. We do not expect
the resolution of this matter will have a material adverse effect on our consolidated financial position or results of operations.
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