Sprint - Nextel 2008 Annual Report Download - page 48

FUTURE CONTRACTUAL OBLIGATIONS
The following table sets forth our best estimates as to the amounts and timing of contractual payments
as of December 31, 2009. 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 2010 2011 2012 2013 2014
2015 and
thereafter
(in millions)
Senior notes, bank credit facilities and
debentures(1) .......................... $32,854 $ 2,158 $2,993 $3,932 $2,848 $2,269 $18,654
Capital leases and financing obligation(2) ..... 1,826 93 78 79 81 83 1,412
Operating leases(3) ....................... 13,998 1,651 1,622 1,484 1,350 1,186 6,705
Purchase orders and other commitments(4) .... 13,598 6,635 2,038 1,743 1,389 894 899
Total ................................. $62,276 $10,537 $6,731 $7,238 $5,668 $4,432 $27,670
(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 and financing obligation related to the sale and
subsequent leaseback of multiple tower sites.
(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 $50 million. See below for further discussion.
“Purchase orders and other commitments” include minimum purchases we commit to purchase from
suppliers over time and/or the unconditional purchase obligations where we guarantee to make a minimum
payment to suppliers for goods and services regardless of whether suppliers fully deliver them. Amounts actually
paid under some of these “other” agreements will likely be higher due to variable components of these
agreements. The more significant variable components that determine the ultimate obligation owed include hours
contracted, subscribers and other factors. In addition, we are party to various arrangements that are conditional in
nature and create an obligation to make payments only upon the occurrence of certain events, such as the delivery
of functioning software or products. Because it is not possible to predict the timing or amounts that may be due
under these conditional arrangements, no such amounts have been included in the table above. The table above
also excludes about $50 million of blanket purchase order amounts since their agreement terms are not specified.
No time frame is set for these purchase orders and they are not legally binding. As a result, they are not firm
commitments. Our liability for uncertain tax positions was $284 million as of December 31, 2009. Due to the
inherent uncertainty of the timing of the resolution of the underlying tax positions, it is not practicable to assign
this liability to any particular year(s) in the table.
The table above does not include remaining costs to be paid in connection with the fulfillment of our
obligations under the Report and Order. The Report and Order requires us to make a payment to the U.S.
Treasury at the conclusion of the band reconfiguration process to the extent that the value of the 1.9 GHz
spectrum we received exceeds the total of the value of licenses for spectrum in the 700 MHz and 800 MHz bands
that we surrendered under the decision plus the actual costs, or qualifying costs, that we incur to retune
incumbents and our own facilities. The total minimum cash obligation for the Report and Order is $2.8 billion.
From the inception of the program through December 31, 2009, we have incurred approximately $2.4 billion of
costs directly attributable to the spectrum reconfiguration program. This amount does not include any of our
internal network costs that we have preliminarily allocated to the reconfiguration program for capacity sites and
modifications for which we may request credit under the reconfiguration program. 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 reconfigurations will range between $3.4 and $3.7 billion.
Accordingly, we believe that it is unlikely that we will be required to make a payment to the U.S. Treasury.
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