Sprint - Nextel 2012 Annual Report Download - page 145

Table of Contents
SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Covenants
As of
December 31, 2012 , the Company was in compliance with all restrictive and financial covenants associated with its borrowings. A
default under any of our borrowings could trigger defaults under our other debt obligations, which in turn could result in the maturities being
accelerated. Certain indentures that govern our outstanding notes require compliance with various covenants, including covenants that limit the
Company's ability to sell all or substantially all of its assets, covenants that limit the ability of the Company and its subsidiaries to incur indebtedness,
and covenants that limit the ability of the Company and its subsidiaries to incur liens, as defined by the terms of the indentures.
We are currently restricted from paying cash dividends because our ratio of total indebtedness to trailing four quarters earnings before
interest, taxes, depreciation and amortization and certain other non
- recurring items, as defined in the credit facilities (adjusted EBITDA), exceeds 2.5 to
1.0.
Future Maturities of Long - Term Debt, Financing Obligation and Capital Lease Obligations
Aggregate amount of maturities for long
- term debt, financing obligation and capital lease obligations outstanding as of December 31, 2012 ,
were as follows:
Severance and Exit Costs Activity
During
2012 , we recognized costs of $196 million solely attributable to our Wireless segment, primarily related to lease exit costs associated
with taking certain Nextel platform sites off
- air in 2012, for which we no longer expect to receive any economic benefit. We also recognized costs of $44
million ( $21 million Wireless; $23 million Wireline) in "Cost of services and products" related to payments that will continue to be made under our
backhaul access contracts for which we will no longer be receiving any economic benefit. Based on management's network modernization plan, and
subject to change based upon completion of proposed business transactions and acquisitions (see Note 3), we expect to incur significant additional
exit costs in the future as we continue to take Nextel platform sites off
- air and transition our existing backhaul architecture to a replacement technology
for our remaining network sites. We estimate the amount of lease exit costs to be recognized in future periods for sites estimated to be taken off - air
during 2013 to be approximately $300 to $400 million , depending upon the timing and remaining expected contractual payments. The amount of exit
costs expected to be recognized with backhaul access contracts cannot be estimated at this time.
During 2011 , we recognized $28 million ( $25 million Wireless; $3 million Wireline) in severance costs associated with actions in the fourth
quarter of 2011. During 2010 , we recognized costs of $8 million ( $11 million Wireless; offset by a benefit of $3 million Wireline) primarily related to an
increase in exit costs incurred in the second and fourth quarter 2010 associated with vacating certain office space which was no longer being utilized,
partially offset by a reduction in the estimate of total severance costs associated with our workforce reduction announced in November 2009.
F - 24
(in millions)
2013
$
379
2014
264
2015
581
2016
2,085
2017
2,354
2018 and thereafter
18,970
24,633
Net discount from beneficial conversion feature on convertible bond
(247
)
Net discounts
(45
)
$
24,341
Note 9.
Severance, Exit Costs and Asset Impairments