Sprint - Nextel 2012 Annual Report Download - page 193

Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The following is the description of the fair value for financial instruments we hold that are not subject to fair value recognition.
Debt Instruments
The 2015 Senior Secured Notes, the 2016 Senior Secured Notes, the Second
- Priority Secured Notes and the Exchangeable Notes are classified as
Level 2 of the valuation hierarchy. To estimate the fair value of the 2015 Senior Secured Notes, the 2016 Senior Secured Notes, the Second
- Priority
Secured Notes and the Exchangeable Notes, we used the average indicative price from several market makers.
To estimate the fair value of the Vendor Financing Notes, we used an income approach based on the contractual terms of the notes and market
-
based parameters such as interest rates. As a result, they are classified as Level 3 of the valuation hierarchy. A level of subjectivity is applied to
estimate the discount rate used to calculate the present value of the estimated cash flows.
The following table presents the carrying value and the approximate fair value of our outstanding debt instruments at December 31, 2012 and
2011 (in thousands):
_______________________________________
Future minimum cash payments under obligations for our continuing operations listed below (including all optional expected renewal periods on
operating leases) as of December 31, 2012, are as follows (in thousands):
_____________________________________
F - 71
December 31, 2012
December 31, 2011
Carrying
Value
Fair Value
Carrying
Value
Fair Value
Notes:
2015 Senior Secured Notes
$
2,919,594
$
3,180,238
$
2,912,222
$
2,799,820
2016 Senior Secured Notes
$
300,000
$
414,375
$
—
$
—
Second - Priority Secured Notes
$
500,000
$
591,565
$
500,000
$
425,000
Exchangeable Notes(1)
$
464,200
$
689,598
$
519,991
$
446,134
Vendor Financing Notes
$
32,005
$
31,802
$
48,276
$
44,133
(1)
Carrying value as of December 31, 2012 and 2011 is net of $165.1 million and $209.3 million discount, respectively, arising from the separation of the Exchange
Options from the debt host instrument. The fair value of the Exchangeable Notes incorporates the value of the exchange feature which we have recognized
separately as a derivative on our consolidated balance sheets.
13.
Commitments and Contingencies
Total
2013
2014
2015
2016
2017
Thereafter,
including all
renewal periods
Long -term debt obligations(1)
$
4,408,800
$
21,710
$
8,052
$
2,949,788
$
300,000
$
500,000
$
629,250
Interest payments on long-term
debt obligations(1)
2,993,616
511,353
510,234
509,951
156,163
111,913
1,194,002
Operating lease obligations(2)
1,608,258
359,897
355,660
279,144
187,579
119,753
306,225
Operating lease payments for
assumed renewal periods(2)
7,873,690
2,414
31,521
110,132
197,886
263,397
7,268,340
Spectrum lease obligations
6,630,476
178,796
181,291
181,810
188,394
203,786
5,696,399
Spectrum service credits and
signed spectrum agreements
102,799
4,853
3,896
3,896
3,896
3,896
82,362
Capital lease obligations(3)
135,874
24,771
24,737
23,299
12,418
8,239
42,410
Purchase agreements
148,116
115,292
17,871
6,301
1,899
1,884
4,869
Total
$
23,901,629
$
1,219,086
$
1,133,262
$
4,064,321
$
1,048,235
$
1,212,868
$
15,223,857