Sprint - Nextel 2012 Annual Report Download - page 65

Table of Contents
permitted under certain circumstances. We early adopted the provisions of this standard as part of our annual assessment of indefinite - lived intangible
assets with no effect on our financial statements.
FINANCIAL STRATEGIES
General Risk Management Policies
Our board of directors has adopted a financial risk management policy that authorizes us to enter into derivative transactions, and all
transactions comply with the policy. We do not purchase or hold any derivative financial instruments for speculative purposes with the exception of
equity rights obtained in connection with commercial agreements or strategic investments, usually in the form of warrants to purchase common shares.
Derivative instruments are primarily used for hedging and risk management purposes. Hedging activities may be done for various
purposes, including, but not limited to, mitigating the risks associated with an asset, liability, committed transaction or probable forecasted transaction.
We seek to minimize counterparty credit risk through stringent credit approval and review processes, credit support agreements, continual review and
monitoring of all counterparties, and thorough legal review of contracts. Exposure to market risk is controlled by regularly monitoring changes in
hedge positions under normal and stress conditions to ensure they do not exceed established limits.
FORWARD - LOOKING STATEMENTS
We include certain estimates, projections and other forward
- looking statements in our annual, quarterly and current reports, and in other
publicly available material. Statements regarding expectations, including performance assumptions and estimates relating to capital requirements, as
well as other statements that are not historical facts, are forward
- looking statements.
These statements reflect management's judgments based on currently available information and involve a number of risks and uncertainties
that could cause actual results to differ materially from those in the forward - looking statements. With respect to these forward - looking statements,
management has made assumptions regarding, among other things, subscriber and network usage, subscriber growth and retention, pricing, operating
costs, the timing of various events, and the economic and regulatory environment.
Future performance cannot be assured. Actual results may differ materially from those in the forward - looking statements. Some factors that
could cause actual results to differ include:
60
•
our ability to retain and attract subscribers and to manage credit risks associated with our subscribers;
•
the ability of our competitors to offer products and services at lower prices due to lower cost structures;
•
the uncertainties related to our proposed transactions with SoftBank and Clearwire;
•
the uncertainties related to certain restrictions placed on Sprint under the Merger Agreement with SoftBank;
•
the effects of vigorous competition on a highly penetrated market, including the impact of competition on the price we are able to
charge subscribers for services and equipment we provide and on the geographic areas served by Sprint's wireless networks; the
impact of equipment net subsidy costs; the impact of increased purchase commitments; the overall demand for our service offerings,
including the impact of decisions of new or existing subscribers between our postpaid and prepaid service offerings and between our
two network platforms; and the impact of new, emerging and competing technologies on our business;
•
our ability to provide the desired mix of integrated services to our subscribers;
•
the ability to generate sufficient cash flow to fully implement our network modernization plan, Network Vision, to improve and
enhance our networks and service offerings, improve our operating margins, implement our business strategies and provide
competitive new technologies;
•
the effective implementation of Network Vision, including timing, execution, technologies, costs, and performance of our network;
•
our ability to retain Nextel platform subscribers on the Sprint platform and mitigate related increases in churn;