Cricket Wireless 2010 Annual Report Download - page 138

Download and view the complete annual report

Please find page 138 of the 2010 Cricket Wireless annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 172

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172

Other Litigation, Claims and Disputes
In addition to the matters described above, the Company is often involved in certain other matters which
generally arise in the ordinary course of business and seek monetary damages and other relief. Based upon
information currently available to the Company, none of these other matters is expected to have a material adverse
effect on the Company’s business, financial condition or results of operations.
Indemnification Agreements
From time to time, the Company enters into indemnification agreements with certain parties in the ordinary
course of business, including agreements with manufacturers, licensors and suppliers who provide it with
equipment, software and technology that it uses in its business, as well as with purchasers of assets, lenders,
lessors and other vendors. Indemnification agreements are generally entered into in commercial and other
transactions in an attempt to allocate potential risk of loss.
Device Purchase Agreements
The Company has entered into agreements with various suppliers for the purchase of wireless devices. These
agreements require the Company to purchase specified quantities of devices based on minimum commitment levels
through July 2012. The total aggregate commitments outstanding under these agreements were approximately
$218.1 million as of December 31, 2010.
Capital and Operating Leases
The Company has entered into non-cancelable operating lease agreements to lease its administrative and retail
facilities, and sites for towers, equipment and antennae required for the operation of its wireless network. These
leases typically include renewal options and escalation clauses, some of which escalation clauses are based on the
consumer price index. In general, site leases have five- to ten-year initial terms with four five-year renewal options.
The following table summarizes the approximate future minimum rentals under non-cancelable operating leases,
including renewals that are reasonably assured, and future minimum capital lease payments in effect at
December 31, 2010 (in thousands):
Years Ended December 31:
Capital
Leases
Operating
Leases
2011 ..................................................... $ 2,466 $ 251,556
2012 ..................................................... 2,466 248,200
2013 ..................................................... 2,466 248,218
2014 ..................................................... 2,466 246,857
2015 ..................................................... 1,521 237,843
Thereafter ................................................. 5 514,000
Total minimum lease payments .................................. $11,390 $1,746,674
Less amount representing interest ................................ (1,083)
Present value of minimum lease payments ......................... $10,307
Outstanding Letters of Credit and Surety Bonds
As of December 31, 2010 and 2009, the Company had approximately $10.5 million of letters of credit
outstanding, which were collateralized by restricted cash, related to contractual commitments under certain of its
administrative facility leases and surety bond programs and its workers’ compensation insurance program. The
132
LEAP WIRELESS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)