Sprint - Nextel 2008 Annual Report Download - page 85

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Financial Instruments
Cash and cash equivalents, accounts and notes receivable, and accounts payable are carried at cost
which approximates fair value and, as such, are not included in the table below. Short-term investments
(consisting primarily of time deposits and treasury securities) and marketable equity securities are measured on a
recurring basis at amounts which approximate fair value. Any changes in fair value of assets or liabilities carried
at fair value are recognized in other comprehensive income (loss) each period. The following table presents
information regarding the method of valuation bases for assets and liabilities measured at fair value on a
recurring basis as of December 31, 2009:
Quoted Prices in
Active Markets for
Identical Assets
Significant
Other Observable
Inputs
Unobservable
Inputs
Balance
December 31,
2009
(in millions)
Short-term investments ..................... $105 $— $— $105
Marketable equity securities ................. 43 — — 43
$148 $— $— $148
The estimated fair value of long-term debt, financing and capital lease obligations, including current
maturities is based on current market prices or interest rates. The following table presents carrying amounts and
estimated fair values for these financial instruments:
December 31,
2009 2008
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
(in millions)
Long-term debt, financing and capital lease obligations ........... $21,061 $20,014 $21,610 $14,449
Note 6. Property, Plant and Equipment
Network equipment, site costs and related software includes switching equipment, cell site towers, site
development costs, radio frequency equipment, network software, digital fiber optic cable, transport facilities and
transmission-related equipment. Buildings and improvements principally consists of owned general office
facilities, retail stores and leasehold improvements. Non-network internal use software, office equipment and
other primarily consists of furniture, information technology systems and equipment and vehicles. Construction
in progress, which is not depreciated until placed in service, primarily includes materials, transmission and
related equipment, labor, engineering, site development costs, interest and other costs relating to the construction
and development of our network. Interest incurred in connection with the construction of long-lived assets totaled
$12 million, $123 million and $127 million for the years ended December 31, 2009, 2008 and 2007, respectively.
The components of property, plant and equipment, and the related accumulated depreciation were as
follows:
December 31,
2009
December 31,
2008
(in millions)
Land ................................................. $ 332 $ 328
Network equipment, site costs and related software ............ 36,992 38,273
Buildings and improvements .............................. 4,792 4,757
Non-network internal use software, office equipment and other . . 2,966 3,268
Construction in progress ................................. 1,111 1,840
Less accumulated depreciation ............................ (27,913) (26,093)
Property, plant and equipment, net ..................... $18,280 $ 22,373
F-19