Sprint - Nextel 2012 Annual Report Download - page 154

Table of Contents
SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Operating Leases
We lease various equipment, office facilities, retail outlets and kiosks, switching facilities and cell sites under operating leases. The non
-
cancelable portion of these leases generally ranges from monthly up to 15 years. These leases, with few exceptions, provide for automatic renewal
options and escalations that are either fixed or based on the consumer price index. Any rent abatements, along with rent escalations, are included in
the computation of rent expense calculated on a straight
- line basis over the lease term. Our lease term for most leases includes the initial non -
cancelable term plus at least one renewal period, if the non - cancelable term is less than ten years, as the exercise of the related renewal option or
options is reasonably assured. Our cell site leases generally provide for an initial non
- cancelable term of five to twelve years with up to five renewal
options for five years each.
During 2011 and 2012, we renegotiated cell site leases in connection with Network Vision. As a result, future operating lease payments
related to cell sites that were disclosed in 2011 decreased slightly in 2012. The decrease is primarily due to having fewer sites as a result of the shut -
down of certain Nextel network cell sites in conjunction with Network Vision. 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.
As of
December 31, 2012 , operating lease commitments in future years were as follows:
Total rental expense was $2.0 billion in 2012, $1.9 billion in 2011 , and $1.8 billion in 2010 . Total rent expense increased in 2012 as compared
to 2011 primarily as a result of rent leveling charges associated with renegotiated cell site leases in 2011 and 2012.
Commitments
We are a party to other commitments, which includes, among other things, service, spectrum, network capacity and other executory
contracts in connection with conducting our business. As of December 31, 2012 , the minimum estimated amounts due under other commitments were
as follows:
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.
F - 33
(in millions)
2013
$
1,880
2014
1,863
2015
1,668
2016
1,542
2017
1,437
2018 and thereafter
7,276
$
15,666
(in millions)
2013
$
17,464
2014
5,357
2015
4,798
2016
1,046
2017
643
2018 and thereafter
1,156
$
30,464