Sprint - Nextel 2005 Annual Report Download - page 78

• potential costs of compliance with regulatory mandates, including E911; and
• other general corporate expenditures.
Future Contractual Obligations
The following table sets forth our best estimates as to the amounts and timing of contractual payments for our
most significant contractual obligations as of December 31, 2005. The information in the table reflects future
unconditional payments and is based upon, among other things, the terms of the relevant agreements, appropriate
classification of items under GAAP currently in effect and certain assumptions, such as future interest rates.
Future events, including additional purchases of our securities and refinancing of those securities, could cause
actual payments to differ significantly from these amounts. See “— Forward-Looking Statements.”
Future Contractual Obligations Total 2006 2007 2008 2009 2010
2011 and
Thereafter
(in millions)
Long-term debt(1) (2) ........... $ 42,393 $ 6,595 $ 3,053 $ 2,719 $ 1,867 $ 1,969 $ 26,190
Redeemable preferred stock(3) . . . 266 7 7 252 — — —
Capital leases ................ 207 112 12 186653
Operating leases .............. 16,379 1,475 1,423 1,325 1,237 1,105 9,814
Acquisitions(4)(5) ............. 10,178 10,178———— —
Purchase obligations and other . . 8,090 2,428 1,886 1,413 1,181 604 578
Total ....................... $ 77,513 $ 20,795 $ 6,381 $ 5,727 $ 4,291 $ 3,684 $ 36,635
(1) Includes principal maturities and estimated interest payments for the bank credit facility based on
management’s expectation as to future interest rates, assume the current payment schedule and exclude any
additional drawdown under the revolving loan commitment.
(2) Includes the effect of our fourth quarter 2005 decision to defease and redeem the entire outstanding
aggregate principal amount of our 9.5% senior notes.
(3) Amounts do not reflect the impact of our February 28, 2006 notice to redeem our Seventh series preferred
stock, which we expect to take place on March 31, 2006.
(4) Includes amounts that we are required to pay to purchase the remaining equity interest in Nextel Partners
that we do not currently own, including amounts payable upon conversion of debt securities and upon
settlement of options; as of December 31, 2005, we held approximately 30% of the common stock equity
interest in Nextel Partners. Amounts do not include any debt to be assumed as part of this transaction.
(5) Includes obligations related to our 2006 acquisitions of Alamosa, Enterprise Communications and Velocita
that we announced in the fourth quarter 2005. Amounts associated with our Alamosa acquisition do not
include any debt assumed as part of the transaction.
The table above does not include the costs to be paid in connection with the Report and Order over the next
approximately two and one half years. The total minimum cash obligation is approximately $2.8 billion. Costs
incurred under the Report and Order associated with the reconfiguration of the 800 MHz band may be applied
against the $2.8 billion obligation, subject to approval by the Transition Administrator under the Report and
Order. In addition, costs associated with the reconfiguration of the 1.9 GHz spectrum are not fully approved for
credit until the completion of the entire reconfiguration process. Because the final reconciliation and audit of the
entire reconfiguration obligation outlined in the Report and Order will not take place until after the completion of
all aspects of the reconfiguration process, there can be no assurance that we will be given full credit for the
expenditures that we have incurred under the Report and Order. Additionally, since we, the Transition
Administrator and the FCC have not yet reached an agreement on our methodology for calculating certain
amounts of property, plant and equipment to be submitted for credit, we cannot provide assurance that we will be
granted full credit for certain of these network costs. As of December 31, 2005, we had incurred, on a cash basis,
approximately $338 million of costs under the Report and Order.
67