Sprint - Nextel 2005 Annual Report Download - page 135

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
also included $84 million of Local’s first mortgage bonds with interest rates ranging from 9.1% to 9.3% and
maturity dates ranging from 2019 to 2021. We recorded a loss due to a premium paid of $2 million associated
with these prepayments. We also completed a tender offer to purchase $1.1 billion principal amount of our senior
notes before their scheduled maturities. The notes had interest rates ranging from 5.7% to 5.9% and maturity
dates ranging from 2003 to 2004. A loss was recorded due to a premium paid of $19 million associated with
these prepayments.
Future Maturities of Long-term Debt and Capital Lease Obligations
For the years subsequent to December 31, 2005, scheduled annual principal payments of long-term debt,
including our bank credit facility and capital lease obligations outstanding, as of December 31, 2005 are as
follows:
(in millions)
2006 ............................................................................ $ 5,027
2007 ............................................................................ 1,650
2008 ............................................................................ 1,368
2009 ............................................................................ 608
2010 ............................................................................ 748
Thereafter ........................................................................ 16,007
25,408
Add net deferred premium ........................................................... 271
$ 25,679
Included in the above schedule are payments to be made in connection with various capital lease obligations. A
substantial portion of the capital lease payments will be in Japanese yen and we already satisfied this obligation
by depositing the present value of the future yen payment obligations at various banks. These amounts are
included on the accompanying consolidated balance sheet in other assets.
Note 10. Equity Unit Notes
In 2001, we completed a registered offering of 69 million equity units, each with a stated amount of $25. Each
equity unit initially consisted of a corporate unit. Each corporate unit consisted of a forward purchase contract
and $25 principal amount of senior notes, or Notes, of our wholly-owned subsidiary, Sprint Capital Corporation.
The corporate unit could be converted by the holder into a treasury unit consisting of the forward purchase
contract and a treasury portfolio of zero-coupon U.S. treasury securities by substituting the treasury securities for
the Notes. The underlying Notes, or treasury portfolio, were pledged to us to secure the holder’s obligations
under the forward purchase contract.
Forward Purchase Contract
As a component of the equity units, the forward purchase contracts originally obligated the holders to purchase,
and obligated us to sell, on August 17, 2004, a variable number of newly issued shares of PCS common stock,
which became FON common stock as a result of the recombination. These forward purchase contracts included a
provision permitting the equity unit holders to benefit from or “participate” in any dividends declared on the
common stock during the contract period. On August 17, 2004 the forward purchase contracts were settled by the
issuance of approximately 35 million shares of FON common stock in exchange for $1.7 billion in cash.
F-40