Sprint - Nextel 2011 Annual Report Download - page 75

Table of Contents
SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Sprint Nextel Corporation, including its consolidated 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. (Virgin Mobile) on November 24, 2009 and
iPCS, Inc. (iPCS) on December 4, 2009, the operations of Virgin Mobile and iPCS are consolidated prospectively from their respective acquisition dates.
The Wireless segment includes retail, wholesale, and affiliate service revenue from a wide array of wireless voice and data transmission services and
equipment revenue from 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 services and use our back office systems and network assets in support of their telephone service
provided over cable facilities primarily to residential end-user subscribers.
Sprint's fourth generation (4G) technology capabilities currently exist through our mobile virtual network operator (MVNO) wholesale relationship with
Clearwire Corporation and its consolidated subsidiary, Clearwire Communications LLC (together, "Clearwire"), in which we own a 51.5% non-controlling economic
interest. Sprint and other investors are offering 4G services that utilize Clearwire's 4G Worldwide Interoperability for Microwave Access (WiMAX) technology in
available markets. The services supported by this technology give subscribers with compatible devices high-speed access to the Internet and a variety of sophisticated data
services (See note 3). In addition, in October 2011, we announced our intention to deploy Long Term Evolution (LTE) technology as part of our network modernization
plan, Network Vision.
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. Sprint's most significant equity investment is in
Clearwire for which Sprint does not have a controlling 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 (SEC).
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 may 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.
F-8
Note 1. Description of Operations
Note 2. Summar
y
of Si
g
nificant Accountin
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Policies and Other Information