Sprint - Nextel 2011 Annual Report Download - page 49

Table of Contents
FUTURE CONTRACTUAL OBLIGATIONS
The following table sets forth our best estimates as to the amounts and timing of contractual payments as of December 31, 2011. 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.”
________________
“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 we take delivery. These amounts do not represent
our entire anticipated purchases in the future, but generally represent only our estimate of those items for which we are committed. Our estimates are based on
assumptions about the variable components of the contracts such as hours contracted, number of subscribers, pricing, 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 approximately $24 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 $225
million as of December 31, 2011. 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. From the inception of the program through December 31, 2011, we have incurred
approximately $3.1 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 $3.6 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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Future Contractual Obligations Total 2012 2013 2014 2015 2016 2017 and
thereafter
(in millions)
Notes, bank credit facilities and debentures(1) $ 32,496 $ 1,476 $ 3,238 $ 2,672 $ 3,930 $ 3,097 $ 18,083
Capital leases and financing obligation(2) 1,759 95 95 87 88 90 1,304
Operating leases(3) 18,140 1,891 1,922 1,881 1,725 1,573 9,148
Purchase orders and other commitments(4) 29,505 11,075 6,240 5,657 4,896 716 921
Total
$ 81,900 $ 14,537 $ 11,495 $ 10,297 $ 10,639 $5,476
$ 29,456
(1)
I
ncludes principal and estimated interest payments. Interest payments are based on management's expectations for future interest rates.
(2)
R
epresents capital lease payments including interest and financing obligation related to the sale and subsequent leaseback of multiple tower sites.
(3)
I
ncludes future lease costs related to cell and switch sites, real estate, network equipment and office space.
(4)
I
ncludes service, spectrum, network capacity and other executory contracts. Excludes blanket purchase orders in the amount of $24 million. See below for further discussion.