Sprint - Nextel 2007 Annual Report Download - page 68

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, 2007. 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 generally accepted accounting principles, or 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 2008 2009 2010 2011 2012
2013 and
Thereafter
(in millions)
Senior notes, bank credit facilities,
debentures and commercial paper(1) .... $36,673 $ 3,175 $2,024 $2,730 $2,917 $4,312 $21,515
Capital leases(2) ...................... 174 29 17 12 12 12 92
Operating leases(3) .................... 16,276 1,567 1,638 1,493 1,347 1,224 9,007
Purchase orders and other
commitments(4) .................... 15,388 7,957 2,436 1,381 886 602 2,126
Total .............................. $68,511 $12,728 $6,115 $5,616 $5,162 $6,150 $32,740
(1) Includes principal and estimated interest payments. Interest payments are based on management’s
expectations for future interest rates.
(2) Represents capital lease payments including interest.
(3) Includes future lease costs related to cell and switch sites, real estate, network equipment and office space.
(4) Includes service, spectrum, network capacity and other executory contracts. Excludes blanket purchase
orders in the amount of $2.4 billion. See below for further discussion.
The table above does not include remaining costs to be paid in connection with the fulfillment of our
obligation under the Report and Order. The total minimum cash obligation for the Report and Order is
$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 TA under the Report and Order.
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 TA and the FCC have not yet reached an agreement on the methodology for
calculating certain amounts of property, plant and equipment to be submitted for credit associated with
reconfiguration activity related to our own network, we cannot provide assurance that we will be granted full
credit for certain of these network costs. However we believe that if we are successful in our appeal of the Third
MO&O, we estimate, based on our experience to date with the reconfiguration program and on information
currently available, that our total direct costs attributable to complete the spectrum reconfiguration will range
between $2.7 billion and $3.4 billion. This estimate is dependent on significant assumptions including the final
licensee costs, and costs associated with relocating licensees in the Canadian and Mexican border regions for
which there are currently no approved border plans. In addition, depending on the outcome of our discussions
with the TA regarding the calculation of the credit for our internal network costs, our total approved costs would
increase. Actual results could differ from such estimates. In addition, we are entitled to receive reimbursement
from the mobile-satellite service licensees for their pro rata portion of our costs of clearing a portion of the 1.9
GHz spectrum. Those licensees may be unable or unwilling to reimburse us for their share of the costs, which we
estimate to be approximately $200 million. If we are unsuccessful in our appeal of the Third MO&O, we
anticipate that our costs could exceed $3.4 billion, by an amount that would likely be material. However, we
believe that it is unlikely we will be required to make a payment to the U.S. Treasury. From the inception of the
program and through December 31, 2007, we have incurred approximately $1.1 billion of costs directly
attributable to the spectrum reconfiguration program. This amount does not include any of our apportioned
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