Cricket Wireless 2010 Annual Report Download - page 92

Contractual Obligations
The following table sets forth estimated amounts and timing of our minimum contractual payments as of
December 31, 2010 for the next five years and thereafter (in thousands). Future events, including potential
refinancing of our long-term debt, could cause actual payments to differ significantly from these amounts.
2011 2012-2013 2014-2015 Thereafter Total
Long-term debt(1) .......... $ 8,500 $ 17,000 $ 570,000 $2,300,000 $2,895,500
Capital leases(2) ........... 2,466 4,932 3,987 5 11,390
Operating leases ........... 251,556 496,418 484,700 514,000 1,746,674
Purchase obligations(3) ...... 321,152 305,085 56,687 — 682,924
Contractualinterest(4)....... 222,411 443,733 411,938 477,594 1,555,676
Total.................... $806,085 $1,267,168 $1,527,312 $3,291,599 $6,892,164
(1) Amounts shown for Cricket’s long-term debt include principal only and exclude the effects of discount
accretion on our $1,100 million of 7.75% senior secured notes due 2016 and $1,200 million of 7.75% unsecured
senior notes due 2020. Interest on the debt, calculated at the current interest rate, is stated separately.
(2) Amounts shown for Cricket’s capital leases include principal and interest.
(3) Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally
binding on us and that specify all significant terms including (a) fixed or minimum quantities to be purchased,
(b) fixed, minimum or variable price provisions, and (c) the approximate timing of the transaction.
(4) Contractual interest is based on the current interest rates in effect at December 31, 2010 for debt outstanding as
of that date.
The table above does not include the following contractual obligations relating to STX Wireless: (1) Cricket’s
obligation to pay to Pocket, if Pocket exercises its right to sell its membership interest in STX Wireless to Cricket,
an amount equal to 24.25% of the product of Leap’s enterprise value-to-revenue multiple for the four most recently
completed fiscal quarters multiplied by the total revenues of STX Wireless and its subsidiaries over that same
period, which amount is estimated to be approximately $99.5 million as of December 31, 2010; and (2) STX
Wireless’ obligation to make quarterly limited-recourse loans to Pocket out of excess cash in an aggregate principal
amount not to exceed $30 million.
Additionally, the table above does not include the following contractual obligations relating to Savary Island:
(1) Cricket’s obligation to pay to Ring Island, if Ring Island exercises its right to sell its membership interest in
Savary Island, an amount equal to Ring Island’s equity contributions to Savary Island less any optional distributions
made to Ring Island plus $150,000, which amount is estimated to be approximately $5.3 million as of December 31,
2010; and (2) Cricket’s obligation under the Savary Island Credit Agreement to loan Savary Island up to
$5.0 million to fund its working capital needs.
Off-Balance Sheet Arrangements
We do not have and have not had any material off-balance sheet arrangements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Risk
Our senior secured, senior and convertible senior notes all bear interest at fixed rates, and our non-negotiable
promissory note bears interest that varies year-to-year at rates ranging from approximately 5.0%-8.3% and
compounds annually. On October 28, 2010, LCW Operations repaid all amounts outstanding under its variable
rate senior secured credit facility. As a result, we do not expect fluctuations in interest rates to have a material
adverse effect on our business, financial condition or results of operations.
Our investment portfolio consists of highly liquid, fixed-income investments with contractual maturities of
less than one year. The fair value of such a portfolio is less sensitive to market fluctuations than a portfolio of longer
term securities. Accordingly, we believe that a sharp change in interest rates would not have a material effect on our
investment portfolio.
86