Sprint - Nextel 2008 Annual Report Download - page 99

SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2009, our rental commitments for operating leases, including lease renewals that
are reasonably assured, consisted mainly of leases for cell and switch sites, real estate, information technology
and network equipment and office space. These commitments in future years are as follows (in millions):
2010 ............................................................... $ 1,651
2011 ............................................................... 1,622
2012 ............................................................... 1,484
2013 ............................................................... 1,350
2014 ............................................................... 1,186
Thereafter .......................................................... 6,705
$13,998
Total rental expense was $1.8 billion in 2009 and 2008 and $2.0 billion in 2007.
Commitments
On July 7, 2009, Sprint entered into a seven-year agreement with an unaffiliated party which will
assume the day-to-day execution of services, provisioning and maintenance for the Company’s wireless and
wireline networks. The agreement, which contains an option to renew, will result in payments for services
estimated to be between $4.5 billion and $5.0 billion over the initial term of the contract. We are also a party to
other commitments, which includes service, spectrum, network capacity and other executory contracts in
connection with conducting our business. As of December 31, 2009, the minimum amounts due under these
commitments were as follows (in millions):
2010 ................................................................ $ 6,635
2011 ................................................................ 2,038
2012 ................................................................ 1,743
2013 ................................................................ 1,389
2014 ................................................................ 894
Thereafter ........................................................... 899
$13,598
Amounts actually paid under some of these agreements will likely be higher due to variable components
of these agreements. The more significant variable components that determine the ultimate obligation owed
include such items as hours contracted, subscribers and other factors. In addition, we are a party to various
arrangements that are conditional in nature and obligate us to make payments only upon the occurrence of certain
events, such as the delivery of functioning software or a product.
Note 13. Compensation Plans
As of December 31, 2009, Sprint sponsored four incentive plans: the 2007 Omnibus Incentive Plan
(2007 Plan); the 1997 Long-Term Incentive Program (1997 Program); the Nextel Incentive Equity Plan (Nextel
Plan) and the Management Incentive Stock Option Plan (MISOP). Sprint also sponsors an Employee Stock
Purchase Plan (ESPP). Under the 2007 Plan, we may grant share and non-share based awards, including stock
options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units
and other equity-based and cash awards to employees, outside directors and certain other service providers.
Options are generally granted with an exercise price equal to the market value of the underlying shares on the
grant date, generally vest on an annual basis over three or four years, and generally have a contractual term of ten
years. Employees and directors who are granted restricted stock units are not required to pay for the shares but
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