SPRINT NEXTEL CORPORATION (Exact Name of Registrant As Specified in Its Charter)
Total Page：16
File Type：pdf, Size：1020Kb
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2007 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-04721 SPRINT NEXTEL CORPORATION (Exact name of registrant as specified in its charter) KANSAS 48 -0457967 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 6200 Sprint Parkway, Overland Park, Kansas 66251 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (800) 829-0965 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Series 1 common stock, $2.00 par value New York Stock Exchange Guarantees of Sprint Capital Corporation 6.875% Notes due 2028 New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes No Aggregate market value of voting and non-voting common stock equity held by non-affiliates at June 30, 2007, was $59,118,357,225 COMMON SHARES OUTSTANDING AT FEBRUARY 21, 2008: VOTING COMMON STOCK Series 1 2,774,113,035 Series 2 74,831,333 Documents incorporated by reference Portions of the registrant’s definitive proxy statement filed under Regulation 14A promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, which definitive proxy statement is to be filed within 120 days after the end of registrant’s fiscal year ended December 31, 2007, are incorporated by reference in Part III hereof. Table of Contents SPRINT NEXTEL CORPORATION TABLE OF CONTENTS Page Reference Item PART I 1. Business 1 1A. Risk Factors 19 1B. Unresolved Staff Comments 27 2. Properties 28 3. Legal Proceedings 28 4. Submission of Matters to a Vote of Security Holders 29 PART II 5. Market for Registrant ’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31 6. Selected Financial Data 33 7. Management ’s Discussion and Analysis of Financial Condition and Results of Operations 34 7A. Quantitative and Qualitative Disclosures about Market Risk 68 8. Financial Statements and Supplementary Data 70 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 70 9A. Controls and Procedures 70 9B. Other Information 71 PART III 10. Directors, Executive Officers and Corporate Governance 72 11. Executive Compensation 72 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 72 13. Certain Relationships and Related Transactions, and Director Independence 74 14. Principal Accountant Fees and Services 74 PART IV 15. Exhibits and Financial Statement Schedules 75 See pages 29 and 30 for “Executive Officers of the Registrant ” Table of Contents SPRINT NEXTEL CORPORATION SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT ON FORM 10-K PART I Item 1. Business Overview The Corporation Sprint Nextel Corporation, incorporated in 1938 under the laws of Kansas, is mainly a holding company, with its operations primarily conducted by its subsidiaries. Unless the context otherwise requires, references to “Sprint Nextel,” “we,” “us” and “our” mean Sprint Nextel Corporation and its subsidiaries. We are a global 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 and government customers. We have organized our operations to meet the needs of our targeted customer groups through focused communications solutions that incorporate the capabilities of our wireless and wireline services to meet their specific needs. We are one of the three largest wireless companies in the United States based on the number of wireless subscribers. We own extensive wireless networks and a global long distance, Tier 1 Internet backbone. We, together with three third party affiliates, or PCS Affiliates, offer digital wireless service in all 50 states, Puerto Rico and the U.S. Virgin Islands under the Sprint ® brand name utilizing wireless code division multiple access, or CDMA, technology. The PCS Affiliates, through commercial arrangements with us, provide wireless services mainly in and around smaller U.S. metropolitan areas on CDMA-based wireless networks built and operated at their expense, in most instances using spectrum licensed to and controlled by us. We offer digital wireless services under our Nextel ® brand name using integrated Digital Enhanced Network, or iDEN ® , technology. We also offer wireless services that focus on the youth market, including our Boost Mobile ® prepaid wireless service on our iDEN network and Boost Unlimited, a local calling prepaid service on our CDMA network. We are one of the largest providers of long distance services and one of the largest carriers of Internet traffic in the nation. On December 17, 2007, Daniel R. Hesse joined our company as President and Chief Executive Officer. Senior management is currently reviewing our operations and assessing our strategies and future business plans. This process is still ongoing and, depending on the outcome our operations, future capital requirements and future valuation of our long-lived assets could be affected. Our Series 1 voting common stock trades on the New York Stock Exchange, or NYSE, under the symbol “S.” Business Combinations & Spin -off We merged with Nextel Communications, Inc. and acquired Nextel Partners, Inc. in 2005 and 2006, respectively. We also have acquired seven former PCS Affiliates. We paid a premium over the fair value of the net tangible and intangible assets that we acquired in each of these business combinations. As a result, in connection with these business combinations, we recorded $26.3 billion of goodwill in addition to the $4.4 billion of goodwill previously recorded on our balance sheet. All of the goodwill was allocated to our Wireless segment. In the fourth quarter 2007, we conducted our annual assessment of goodwill for impairment. As a result, we recorded a $29.7 billion non-cash goodwill impairment charge in the fourth quarter 2007 in accordance with Statement of Financial Accounting Standards, or SFAS, No. 142 Goodwill and Other Intangible Assets. Refer to note 3 of the Notes to Consolidated Financial Statements for additional information. 1 Table of Contents On May 17, 2006, we spun-off to our shareholders our local communications business, which is now known as Embarq Corporation and is comprised primarily of what was our Local segment prior to the spin-off. The results of Embarq for periods before the spin-off are presented as discontinued operations, and we have recast information for our Wireless and Wireline segments for the periods presented in note 12 of the Notes to Consolidated Financial Statements. Access to Public Filings and Board Committee Charters Our website address is www.sprint.com. Information contained on our website is not part of this annual report. We provide public access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed with the Securities and Exchange Commission, or SEC, under the Securities Exchange Act of 1934. These documents may be accessed free of charge on our website at the following address: www.sprint.com/sprint/ir. These documents are available promptly after filing with the SEC. These documents also may be found at the SEC’s website at www.sec.gov. We also provide public access to our Code of Ethics, entitled the Sprint Nextel Code of Conduct, our Corporate Governance Guidelines and the charters of the following committees of our board of directors: the Audit Committee, the Human Capital and Compensation Committee, the Executive Committee, the Finance Committee, and the Nominating and Corporate Governance Committee. The Code of Conduct, corporate governance guidelines and committee charters may be viewed free of charge on our website at the following address: www.sprint.com/governance. You may obtain copies of any of these documents free of charge by writing to: Sprint Nextel Shareholder Relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B424, Overland Park, Kansas 66251 or by email at [email protected] . If a provision of the Code of Conduct required under the NYSE corporate governance standards is materially modified, or if a waiver of the Code of Conduct is granted to a director or executive officer, we will post a notice of such action on our website at the following address: www.sprint.com/governance.