Sprint - Nextel 2012 Annual Report Download - page 156

Table of Contents
SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Per Share Data
Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the
period. Diluted earnings (loss) per common share adjusts basic earnings (loss) per common share, computed using the treasury stock method, for the
effects of potentially dilutive common shares, if the effect is not antidilutive. Potentially dilutive common shares issuable under our equity
- based
compensation plans where the average market price exceeded the exercise price were
44 million , 27 million , and 30 million shares as of December 31,
2012, 2011 , and 2010 , respectively. In addition, all approximately 590 million shares issuable upon the conversion of our convertible bond would also be
dilutive to earnings per common share. However, all such potentially dilutive shares were antidilutive for
2012, 2011 and 2010 and, therefore, have no
effect on our determination of dilutive weighted average number of shares outstanding.
Sprint operates two reportable segments: Wireless and Wireline.
We define segment earnings as wireless or wireline operating (loss) income before other segment expenses such as depreciation,
amortization, severance, exit costs, goodwill impairments, asset impairments, and other items, if any, solely and directly attributable to the segment
representing items of a non
- recurring or unusual nature. Expense and income items excluded from segment earnings are managed at the corporate level.
Transactions between segments are generally accounted for based on market rates, which we believe approximate fair value. The Company generally
re
- establishes these rates at the beginning of each fiscal year. Over the past several years, there has been an industry - wide trend of lower rates due to
increased competition from other wireline and wireless communications companies as well as cable and Internet service providers.
F - 35
Note 15.
Segments
•
Wireless primarily includes retail, wholesale and affiliate 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.
•
Wireline primarily 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
- use
subscribers.