Sprint - Nextel 2005 Annual Report Download - page 134

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In June 2005, we entered into a revolving credit facility of $1.0 billion. This facility is unsecured and is
structured as a 364-day credit line with a subsequent one-year, $1.0 billion term-out option. In connection with
the execution of the new credit agreement, on December 16, 2005, we amended this facility to allow Nextel to
participate in the new facility. We had no outstanding borrowings against this facility as of December 31, 2005.
Debentures
As of December 31, 2005, we have $400 million in principal amount of debentures. This balance is comprised of
$50 million in principal amount of our 6.75% debentures due 2013, $150 million in principal amount of our
9.00% debentures due 2019 and $200 million in principal amount of our 9.25% debentures due 2022. Cash
interest on these debentures is payable semiannually in arrears. These debentures are not redeemable prior to
maturity.
Mortgage Bonds
As of December 31, 2005, we have $465 million in first mortgage bonds. Cash interest on these bonds is payable
semiannually in arrears. These bonds are made up of redeemable and non-redeemable bonds and are secured by
$13.6 billion of gross property, plant and equipment.
Capital Lease Obligations
As of December 31, 2005, we have $163 million in capital lease obligations primarily for the use of
communication switches, which are secured by $415 million of gross property, plant and equipment.
Other
In December 2005, we terminated two accounts receivable asset securitization facilities that provided us with up
to $1.2 billion of additional liquidity. Neither facility had an outstanding balance when it was terminated, and
both were scheduled to expire during 2006.
The indentures and financing agreements of certain of our subsidiaries contain provisions limiting cash dividend
payments on subsidiary common stock held by us. As a result, $432 million of those subsidiaries’ $2.7 billion
total retained earnings were restricted as of December 31, 2005. The flow of cash in the form of advances from
the subsidiaries to us is generally not restricted.
We are currently in compliance with all restrictive and financial covenants associated with our borrowings. There
is no provision under any of our indebtedness that requires repayment in the event of a downgrade by any ratings
service.
2004 Retirements
In 2004, we purchased and retired a total of $1.4 billion of our senior notes before their scheduled maturities in
exchange for cash. As a result, we recorded a loss due to the premium paid of $60 million and wrote-off $12
million of unamortized debt costs associated with this repayment. We also paid $13 million in cash to complete
an early buy out on certain capital lease obligations.
2003 Retirements
In 2003, we purchased and retired $1.5 billion of our long-term debt before scheduled maturities. The
prepayments consisted of current maturities of a $300 million Export Development Canada loan with an interest
rate of 2.8% and $34 million of our senior notes with interest rates ranging from 5.7% to 5.9%. The prepayments
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