Sprint - Nextel 2005 Annual Report Download - page 126

Download and view the complete annual report

Please find page 126 of the 2005 Sprint - Nextel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 161

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161

SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The carrying amounts and estimated fair values of our financial instruments at year-end were as follows:
December 31,
2005 2004
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
(in millions)
Cash and cash equivalents ............................. $ 8,902 $ 8,902 $ 4,176 $ 4,176
Investments in securities .............................. 1,906 1,906 693 693
Restricted cash and deposits ........................... 174 174 148 148
Total debt, including current portion ..................... 25,679 27,999 17,204 19,568
Redeemable preferred stock ........................... 247 261 247 284
Cash and Cash Equivalents, Marketable Securities, Restricted Cash, Accounts Receivable, Deposits, Accounts
Payable and Accrued Expenses
Due to the short term nature of these items, the carrying amounts are reasonable estimates of fair value.
Marketable Debt and Equity Securities
We estimate the fair value of these securities based on quoted market prices. As of December 31, 2005 and 2004,
marketable debt and equity securities included within marketable securities and investments consist of the
following:
Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
(in millions)
2005
Available-for-sale marketable debt and equity securities ...... $ 1,763 $ 143 $ — $ 1,906
2004
Available-for-sale marketable debt and equity securities ...... $ 627 $ 67 $ 1 $ 693
Long-Term Debt
The fair value of our long-term debt, including the current portion, is estimated based on available market prices
of our senior notes and loans under our bank credit facility.
Derivative Instruments
The fair value of these instruments is based on estimates using available market information and appropriate
valuation methodologies. See note 12 for additional information.
Redeemable Preferred Stock
We estimate the fair value of these securities by using available market data to value a debt instrument with
embedded optionality.
Letters of Credit
Outstanding letters of credit totaled $2.6 billion as of December 31, 2005 and $123 million as of December 31,
2004. Pursuant to the terms of the Report and Order described in note 15 below, we were required to establish a
F-31