Sprint - Nextel 2005 Annual Report Download - page 132

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 9. Long-term Debt and Capital Lease Obligations
Our long-term debt and capital lease obligations at year-end were as follows:
December 31, 2004
Acquired Debt
and
Borrowings
Retirements and
Repayments of
Principal
and Other December 31, 2005
(in millions)
Senior notes due 2007 to 2032
4.78% to 9.50%, including fair value hedge
adjustments of $19 and $(17), and
deferred premiums of $0 and $332 net of
unamortized discounts of $31 and $65 . . $ 15,919 $ 6,559 $ (1,039) $ 21,439
Bank credit facilities due 2006 and 2010
4.775%, including deferred premium of $0
and $15 net of an unamortized discount
of$0and$9 ....................... — 6,406 (3,200) 3,206
Debentures and notes due 2013 to 2022
6.75% to 9.25% ...................... 400 — — 400
First mortgage bonds due 2008 to 2025
6.75% to 9.79%, net of unamortized
discounts of $2 and $2 ............... 579 — (114) 465
Capital lease obligations
4.11% to 11.174% .................... 215 43 (95) 163
Other ................................ 91 6 (91) 6
17,204 $ 13,014 $ (4,539) 25,679
Current maturities of long-term debt ..... (1,288) (5,047)
Long-term debt and capital lease
obligations .......................... $ 15,916 $ 20,632
Senior Notes
As of December 31, 2005, we have $21.4 billion in principal amount of convertible and senior serial redeemable
notes. This balance primarily consists of newly acquired debt from the merger with Nextel of $5.8 billion, the
acquisition of PCS Affiliates of $659 million and the existing debt of one of our subsidiaries of $14.9 billion.
Cash interest on these notes is payable semiannually in arrears. We may choose to redeem some or all of these
notes at the then applicable redemption price, plus accrued and unpaid interest. The $607 million in aggregate
principal amount of our 5.25% notes are convertible at the option of the holders into our Series 1 common stock
at any time prior to redemption, repurchase or maturity at an effective conversion price of $57.23 per share. As of
December 31, 2005, senior notes also included $130 million of debt associated with a consolidated variable
interest entity.
Our weighted average effective interest rate related to these borrowings was 7.0% for the year-ended
December 31, 2005 and 7.1% for the year-ended 2004. The effective interest rate includes the effect of interest
rate swap agreements accounted for as fair value hedges. See note 12 for more details regarding interest rate
swaps.
In February 2006, we completed the redemption of all of our outstanding 9.5% senior redeemable notes due
2011, of which $85 million in aggregate principal amount was outstanding as of December 31, 2005. As of
December 31, 2005, we have recorded $93 million of restricted cash in prepaid expenses and other current assets
to satisfy this obligation.
F-37