Sprint - Nextel 2008 Annual Report Download - page 88

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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 8. Long-Term Debt, Financing and Capital Lease Obligations
Interest
Rates Maturities
December 31,
2009
December 31,
2008
(in millions)
Notes
Senior notes
Sprint Nextel Corporation ............... 0.65 – 9.25% 2010 – 2022 $ 4,250 $ 2,950
Sprint Capital Corporation .............. 6.88 – 8.75% 2011 – 2032 9,854 10,454
Convertible senior notes
Nextel Communications, Inc. ............ 5.25% 2010 — 607
Serial redeemable senior notes
Nextel Communications, Inc. ............ 5.95 – 7.38% 2013 – 2015 4,780 4,780
Secured Notes
iPCS, Inc. ........................... 2.41 – 4.28% 2013 – 2014 479 —
Credit facilities – Sprint Nextel Corporation
Bank credit facility .................... 3.00% 2010 — 1,000
Export Development Canada ............ 3.39% 2012 750 750
Financing obligation .......................... 9.50% 2030 698 698
Capital lease obligations and other(1) ............ 4.11 – 15.49% 2010 – 2022 190 204
Net premiums ............................... 60 167
21,061 21,610
Less current portion .......................... (768) (618)
Long-term debt, financing and capital lease
obligations ................................ $20,293 $20,992
(1) Includes $105 million in outstanding principal related to a consolidated variable interest entity.
As of December 31, 2009, Sprint Nextel Corporation, the parent corporation, had $5.0 billion in
principal of debt outstanding, including the credit facilities. In addition, $14.6 billion in principal of our long-
term debt issued by wholly-owned subsidiaries is guaranteed by the parent, of which approximately $9.9 billion
issued by our finance subsidiary, Sprint Capital Corporation, is fully and unconditionally guaranteed. The
indentures and financing arrangements of certain subsidiaries’ debt contain provisions that limit cash dividend
payments on subsidiary common stock. The transfer of cash in the form of advances from the subsidiaries to the
parent corporation generally is not restricted.
As of December 31, 2009, about $1.4 billion of our outstanding debt, comprised of certain secured
notes, financing and capital lease obligations and mortgages, is secured by $1.2 billion of gross property, plant
and equipment and other assets. Cash interest payments were $1.4 billion, $1.4 billion and $1.5 billion during
each of the years ended December 31, 2009, 2008 and 2007.
Notes
Notes consist of senior and serial redeemable senior notes that are unsecured and secured notes of iPCS,
which are secured solely with the underlying assets of iPCS. Cash interest on these notes is generally payable
semiannually in arrears. Approximately $18.4 billion of the notes are redeemable at the Company’s discretion
including accrued interest. Our weighted average effective interest rate related to our senior notes was 6.5% in
2009 and 2008.
In December 2009, the Company assumed $417 million (net of a $62 million discount) of Secured
Floating Rate Notes due in 2013 and 2014 as part of the acquisition of iPCS. The Company may redeem some or
all of these notes at any time prior to maturity. If a change of control event (as defined in the iPCS indenture)
occurs, iPCS will be required to make an offer to repurchase the outstanding principal in cash at a price equal to
101% of their principal amount.
F-22