Sprint - Nextel 2014 Annual Report Download - page 113

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-30
and year ended December 31, 2013, respectively, and 8.9%, 7.1%, and 7.5% for the Predecessor 191-day period ended July
10, 2013, unaudited three-month period ended March 31, 2013 and year ended December 31, 2012, respectively.
Notes As of March 31, 2015, our outstanding notes consisted of senior notes, guaranteed notes, and exchangeable notes,
all of which are unsecured, as well as secured notes of Clearwire Communications LLC, which are secured solely by assets of
Clearwire Communications LLC and certain of its subsidiaries. Cash interest on all of the notes is generally payable semi-
annually in arrears. As of March 31, 2015, $30.1 billion aggregate principal amount of the notes was redeemable at the
Company's discretion at the then-applicable redemption prices plus accrued interest.
As of March 31, 2015, $21.6 billion aggregate principal amount of our senior notes and guaranteed notes provide
holders with the right to require us to repurchase the notes if a change of control triggering event (as defined in the applicable
indentures and supplemental indentures) occurs. As of March 31, 2015, $300 million aggregate principal amount of
Clearwire Communications LLC notes provide holders with the right to require us to repurchase the notes if a change of
control occurs (as defined in the applicable indentures and supplemental indentures). If we are required to make such a
change of control offer, we will offer a cash payment equal to 101% of the aggregate principal amount of notes repurchased
plus accrued and unpaid interest.
Upon the close of the Clearwire Acquisition, the Clearwire Communications, LLC 8.25% Exchangeable Notes
due 2040 became exchangeable at any time, at the holder’s option, for a fixed amount of cash equal to $706.21 for each
$1,000 principal amount of notes surrendered. As a result, $444 million, which is the total cash consideration payable upon
an exchange of all $629 million principal amount of notes outstanding, is now classified as a current debt obligation. The
remaining carrying value of these notes is classified as a long-term debt obligation.
Debt Issuances
On February 24, 2015, Sprint Corporation issued $1.5 billion aggregate principal amount of 7.625% notes due
2025. Interest on the notes is payable semi-annually on February 15 and August 15. The notes are guaranteed by Sprint
Communications, Inc.
Debt Retirements
On May 1, 2014, the Company retired the remaining $181 million aggregate principal amount upon maturity of its
outstanding iPCS, Inc. Second Lien Secured Floating Rate Notes due 2014 plus accrued and unpaid interest.
Credit Facilities
Bank credit facility
The Company has a $3.3 billion unsecured revolving bank credit facility that expires in February 2018.
Borrowings under the revolving bank credit facility bear interest at a rate equal to the London Interbank Offered Rate
(LIBOR) plus a spread that varies depending on the Company’s credit ratings. As of March 31, 2015, approximately $470
million in letters of credit were outstanding under this credit facility, including the letter of credit required by the Report and
Order (see Note 12. Commitments and Contingencies). As a result of the outstanding letters of credit, which directly reduce
the availability of borrowings, the Company had $2.8 billion of borrowing capacity available under the revolving bank credit
facility as of March 31, 2015. In October 2014, we amended our revolving bank credit facility to, among other things, modify
the required ratio (Leverage Ratio) of total indebtedness to trailing four quarters earnings before interest, taxes, depreciation
and amortization and other non-recurring items, as defined by the credit facility (adjusted EBITDA), to provide that it may not
exceed 6.5 to 1.0 through the quarter ending December 31, 2015, 6.25 to 1.0 through the quarter ending December 31, 2016
and 6.0 to 1.0 each fiscal quarter ending thereafter through expiration of the facility. The amended revolving bank credit
facility allows us to reduce our total indebtedness for purposes of calculating the Leverage Ratio by subtracting from total
indebtedness the amount of any cash contributed into a segregated reserve account, provided that, after such cash contribution,
our cash remaining on hand for operations exceeds $2.0 billion. Upon transfer, the cash contribution will remain restricted
until and to the extent it is no longer required for the Leverage Ratio to remain in compliance. The amendment also added
Sprint Corporation as a guarantor of the revolving bank credit facility.