Cricket Wireless 2012 Annual Report Download - page 93

Savary Island Venture
Cricket formerly owned an 85% non-controlling membership interest in Savary Island, which held wireless
spectrum in the upper Midwest portion of the U.S. and which leased a portion of that spectrum to us. The
remaining 15% controlling interest was held by Ring Island Wireless, LLC, or Ring Island. In May 2012, Ring
Island exercised its right to put its entire controlling membership interest in Savary Island to Cricket, and in
October 2012, Cricket acquired Ring Island’s 15% controlling interest for approximately $5.3 million in cash. In
December 2012, Savary Island and its subsidiaries were merged with and into Cricket, with Cricket as the
surviving entity.
Cricket, Savary Island and Savary Island’s wholly-owned subsidiaries were party to an Amended and
Restated Credit Agreement, dated as of December 27, 2010, or the Savary Island Credit Agreement, pursuant to
which Savary Island had assumed approximately $211.6 million of the outstanding loans then owed to Cricket by
a subsidiary of Denali in connection with the contribution of certain wireless spectrum by a subsidiary of Denali
to Savary Island. Under the Savary Island Credit Agreement, Cricket had also agreed to loan Savary Island up to
$5.0 million to fund its working capital needs. Immediately prior to Cricket’s acquisition of Ring Island’s
controlling membership interest in Savary Island, the outstanding borrowings under the Savary Island Credit
Agreement (including accrued interest), after giving effect to various repayments and debt cancellations made in
connection with the closing of spectrum transactions involving Savary Island, totaled approximately $12.5
million. In connection with Cricket’s acquisition of Ring Island’s controlling membership interest, all remaining
indebtedness under the Savary Island Credit Agreement was converted into equity in Savary Island and the
Savary Island Credit Agreement and all related loan and security documents were terminated.
Contractual Obligations
The following table sets forth estimated amounts and timing of our minimum contractual payments as of
December 31, 2012 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.
2013 2014-2015 2016-2017 Thereafter Total
Long-term debt(1) ........ $ 4,000 $ 258,000 $1,108,000 $1,980,000 $3,350,000
Capital leases(2) ......... 9,492 18,039 12,299 16,344 56,174
Operating leases ......... 266,301 521,980 386,820 334,897 1,509,998
Purchase obligations(3) .... 761,187 768,920 121,622 — 1,651,729
Contractual interest(4) ..... 239,500 462,594 317,969 379,944 1,400,007
Total .................. $1,280,480 $2,029,533 $1,946,710 $2,711,185 $7,967,908
(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, $1,600 million of 7.75% senior
notes due 2020 and $400 million senior secured term loans under the Credit Agreement. 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. These amounts exclude purchase orders already reflected in our current liabilities. These
amounts also include our estimated purchase commitment with Apple for iPhones as discussed above under
— “iPhone Purchase Commitment.”
(4) Contractual interest is based on the current interest rates in effect at December 31, 2012 for debt outstanding
as of that date.
79