| Guarantor Subsidiaries |
Guarantor Subsidiaries: In connection with Wireless’ 7 7/8% Senior Notes, 6 5/8% Senior Notes, and the Senior Secured Credit Facility, MetroPCS, together with its wholly-owned subsidiary, MetroPCS, Inc., and each of Wireless’ direct and indirect present and future wholly-owned domestic subsidiaries (the “guarantor subsidiaries”), provided guarantees which are full and unconditional as well as joint and several. Certain provisions of the Senior Secured Credit Facility, the indentures and the supplemental indentures relating to the 7 7/8% Senior Notes and 6 5/8% Senior Notes restrict the ability of Wireless to loan funds to MetroPCS or MetroPCS, Inc. However, Wireless is allowed to make certain permitted payments to MetroPCS under the terms of the Senior Secured Credit Facility, the indentures and the supplemental indentures relating to the 7 7/8% Senior Notes and 6 5/8% Senior Notes. Prior to December 2010, Royal Street Communications, LLC and its subsidiaries (“Royal Street Communications”) and MetroPCS Finance, Inc. (“MetroPCS Finance”) (collectively, the “non-guarantor subsidiaries”) were not guarantors of the 7 7/8% Senior Notes, 6 5/8% Senior Notes or the Senior Secured Credit Facility. In December 2010, Wireless completed the acquisition of the remaining limited liability company member interest in Royal Street Communications, making Royal Street Communications a wholly-owned subsidiary. In addition, MetroPCS Finance was merged with a subsidiary of Wireless. Therefore, the Company no longer had any non-guarantors of any of its outstanding debt as of December 31, 2010. As a result, the comparative historical condensed consolidating financial information has been revised to present this information as if the new guarantor structure existed for all periods presented with the results of Royal Street Communications and MetroPCS Finance being reported as guarantor subsidiaries. The following information presents condensed consolidating balance sheet information as of December 31, 2011 and 2010, condensed consolidating statement of income information for the years ended December 31, 2011, 2010 and 2009, and condensed consolidating statement of cash flows information for the years ended December 31, 2011, 2010 and 2009 of the parent company (MetroPCS), the issuer (Wireless), and the guarantor subsidiaries. Investments in subsidiaries held by the parent company and the issuer have been presented using the equity method of accounting. Condensed Consolidating Balance Sheet Information As of December 31, 2011 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | CURRENT ASSETS: | | | | | | | | | | | Cash and cash equivalents | | $ | 657,289 |
| | $ | 1,285,266 |
| | $ | 727 |
| | $ | — |
| | $ | 1,943,282 |
| Inventories | | — |
| | 226,124 |
| | 13,524 |
| | — |
| | 239,648 |
| Accounts receivable, net | | — |
| | 77,396 |
| | 627 |
| | — |
| | 78,023 |
| Advances to subsidiaries | | 671,193 |
| | 245,866 |
| | — |
| | (917,059 | ) | | — |
| Other current assets | | 300,068 |
| | 102,845 |
| | 79,727 |
| | — |
| | 482,640 |
| Total current assets | | 1,628,550 |
| | 1,937,497 |
| | 94,605 |
| | (917,059 | ) | | 2,743,593 |
| Property and equipment, net | | — |
| | 1,378 |
| | 4,016,621 |
| | — |
| | 4,017,999 |
| Long-term investments | | 6,319 |
| | — |
| | — |
| | — |
| | 6,319 |
| Investment in subsidiaries | | 1,297,957 |
| | 4,728,985 |
| | — |
| | (6,026,942 | ) | | — |
| FCC licenses | | — |
| | 3,800 |
| | 2,535,241 |
| | — |
| | 2,539,041 |
| Other assets | | — |
| | 137,985 |
| | 39,612 |
| | (1,618 | ) | | 175,979 |
| Total assets | | $ | 2,932,826 |
| | $ | 6,809,645 |
| | $ | 6,686,079 |
| | $ | (6,945,619 | ) | | $ | 9,482,931 |
| CURRENT LIABILITIES: | | | | | | | | | | | Advances from subsidiaries | | $ | — |
| | $ | — |
| | $ | 917,059 |
| | $ | (917,059 | ) | | $ | — |
| Other current liabilities | | — |
| | 243,247 |
| | 573,476 |
| | — |
| | 816,723 |
| Total current liabilities | | — |
| | 243,247 |
| | 1,490,535 |
| | (917,059 | ) | | 816,723 |
| Long-term debt, net | | — |
| | 4,437,924 |
| | 273,097 |
| | — |
| | 4,711,021 |
| Deferred credits | | 5,226 |
| | 813,498 |
| | 120,028 |
| | (1,618 | ) | | 937,134 |
| Other long-term liabilities | | — |
| | 17,019 |
| | 73,434 |
| | — |
| | 90,453 |
| Total liabilities | | 5,226 |
| | 5,511,688 |
| | 1,957,094 |
| | (918,677 | ) | | 6,555,331 |
| STOCKHOLDERS’ EQUITY: | | | | | | | | | | | Common stock | | 36 |
| | — |
| | — |
| | — |
| | 36 |
| Other stockholders’ equity | | 2,927,564 |
| | 1,297,957 |
| | 4,728,985 |
| | (6,026,942 | ) | | 2,927,564 |
| Total stockholders’ equity | | 2,927,600 |
| | 1,297,957 |
| | 4,728,985 |
| | (6,026,942 | ) | | 2,927,600 |
| Total liabilities and stockholders’ equity | | $ | 2,932,826 |
| | $ | 6,809,645 |
| | $ | 6,686,079 |
| | $ | (6,945,619 | ) | | $ | 9,482,931 |
|
Condensed Consolidating Balance Sheet Information As of December 31, 2010 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | CURRENT ASSETS: | | | | | | | | | | | Cash and cash equivalents | | $ | 507,849 |
| | $ | 287,942 |
| | $ | 740 |
| | $ | — |
| | $ | 796,531 |
| Inventories | | — |
| | 145,260 |
| | 15,789 |
| | — |
| | 161,049 |
| Accounts receivable, net | | — |
| | 57,047 |
| | 1,009 |
| | — |
| | 58,056 |
| Advances to subsidiaries | | 647,701 |
| | 462,518 |
| | — |
| | (1,110,219 | ) | | — |
| Other current assets | | 374,956 |
| | 114,285 |
| | 89,008 |
| | — |
| | 578,249 |
| Total current assets | | 1,530,506 |
| | 1,067,052 |
| | 106,546 |
| | (1,110,219 | ) | | 1,593,885 |
| Property and equipment, net | | — |
| | 246,249 |
| | 3,413,196 |
| | — |
| | 3,659,445 |
| Long-term investments | | 6,319 |
| | 10,381 |
| | — |
| | — |
| | 16,700 |
| Investment in subsidiaries | | 1,006,295 |
| | 3,994,553 |
| | — |
| | (5,000,848 | ) | | — |
| FCC licenses | | — |
| | 3,800 |
| | 2,518,441 |
| | — |
| | 2,522,241 |
| Other assets | | — |
| | 75,085 |
| | 51,224 |
| | — |
| | 126,309 |
| Total assets | | $ | 2,543,120 |
| | $ | 5,397,120 |
| | $ | 6,089,407 |
| | $ | (6,111,067 | ) | | $ | 7,918,580 |
| CURRENT LIABILITIES: | | | | | | | | | | | Advances from subsidiaries | | $ | — |
| | $ | — |
| | $ | 1,110,219 |
| | $ | (1,110,219 | ) | | $ | — |
| Other current liabilities | | — |
| | 233,678 |
| | 568,742 |
| | — |
| | 802,420 |
| Total current liabilities | | — |
| | 233,678 |
| | 1,678,961 |
| | (1,110,219 | ) | | 802,420 |
| Long-term debt, net | | — |
| | 3,508,948 |
| | 248,339 |
| | — |
| | 3,757,287 |
| Deferred credits | | 1,544 |
| | 639,766 |
| | 103,159 |
| | — |
| | 744,469 |
| Other long-term liabilities | | — |
| | 8,433 |
| | 64,395 |
| | — |
| | 72,828 |
| Total liabilities | | 1,544 |
| | 4,390,825 |
| | 2,094,854 |
| | (1,110,219 | ) | | 5,377,004 |
| STOCKHOLDERS’ EQUITY: | | | | | | | | | | | Common stock | | 36 |
| | — |
| | — |
| | — |
| | 36 |
| Other stockholders’ equity | | 2,541,540 |
| | 1,006,295 |
| | 3,994,553 |
| | (5,000,848 | ) | | 2,541,540 |
| Total stockholders’ equity | | 2,541,576 |
| | 1,006,295 |
| | 3,994,553 |
| | (5,000,848 | ) | | 2,541,576 |
| Total liabilities and stockholders’ equity | | $ | 2,543,120 |
| | $ | 5,397,120 |
| | $ | 6,089,407 |
| | $ | (6,111,067 | ) | | $ | 7,918,580 |
|
Condensed Consolidating Statement of Income Information Year Ended December 31, 2011 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | REVENUES: | | | | | | | | | | | Total Revenues | | $ | — |
| | $ | 18,802 |
| | $ | 4,858,650 |
| | $ | (30,070 | ) | | $ | 4,847,382 |
| OPERATING EXPENSES: | | | | | | | | | | | Cost of revenues | | — |
| | 17,452 |
| | 2,926,049 |
| | (30,070 | ) | | 2,913,431 |
| Selling, general and administrative expenses | | — |
| | 1,350 |
| | 642,609 |
| | — |
| | 643,959 |
| Other operating expenses | | — |
| | 264 |
| | 542,190 |
| | — |
| | 542,454 |
| Total operating expenses | | — |
| | 19,066 |
| | 4,110,848 |
| | (30,070 | ) | | 4,099,844 |
| (Loss) income from operations | | — |
| | (264 | ) | | 747,802 |
| | — |
| | 747,538 |
| OTHER EXPENSE (INCOME): | | | | | | | | | | | Interest expense | | — |
| | 243,163 |
| | 17,910 |
| | — |
| | 261,073 |
| Non-operating expenses | | (1,859 | ) | | 9,414 |
| | (746 | ) | | — |
| | 6,809 |
| Earnings from consolidated subsidiaries | | (299,451 | ) | | (734,432 | ) | | — |
| | 1,033,883 |
| | — |
| Total other (income) expense | | (301,310 | ) | | (481,855 | ) | | 17,164 |
| | 1,033,883 |
| | 267,882 |
| Income (loss) before provision for income taxes | | 301,310 |
| | 481,591 |
| | 730,638 |
| | (1,033,883 | ) | | 479,656 |
| Provision for income taxes | | — |
| | (182,140 | ) | | 3,794 |
| | — |
| | (178,346 | ) | Net income (loss) | | $ | 301,310 |
| | $ | 299,451 |
| | $ | 734,432 |
| | $ | (1,033,883 | ) | | $ | 301,310 |
|
Condensed Consolidating Statement of Income Information Year Ended December 31, 2010 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | REVENUES: | | | | | | | | | | | Total Revenues | | $ | — |
| | $ | 16,036 |
| | $ | 4,277,726 |
| | $ | (224,409 | ) | | $ | 4,069,353 |
| OPERATING EXPENSES: | | | | | | | | | | | Cost of revenues | | — |
| | 15,200 |
| | 2,527,084 |
| | (224,409 | ) | | 2,317,875 |
| Selling, general and administrative expenses | | — |
| | 835 |
| | 620,825 |
| | — |
| | 621,660 |
| Other operating expenses | | — |
| | 16,773 |
| | 394,147 |
| | — |
| | 410,920 |
| Total operating expenses | | — |
| | 32,808 |
| | 3,542,056 |
| | (224,409 | ) | | 3,350,455 |
| (Loss) income from operations | | — |
| | (16,772 | ) | | 735,670 |
| | — |
| | 718,898 |
| OTHER EXPENSE (INCOME): | | | | | | | | | | | Interest expense | | — |
| | 252,661 |
| | 153,672 |
| | (143,208 | ) | | 263,125 |
| Non-operating expenses | | (1,797 | ) | | 2,233 |
| | (165 | ) | | 143,208 |
| | 143,479 |
| Earnings from consolidated subsidiaries | | (191,546 | ) | | (581,027 | ) | | — |
| | 772,573 |
| | — |
| Total other (income) expense | | (193,343 | ) | | (326,133 | ) | | 153,507 |
| | 772,573 |
| | 406,604 |
| Income (loss) before provision for income taxes | | 193,343 |
| | 309,361 |
| | 582,163 |
| | (772,573 | ) | | 312,294 |
| Provision for income taxes | | 72 |
| | (117,815 | ) | | (1,136 | ) | | — |
| | (118,879 | ) | Net income (loss) | | $ | 193,415 |
| | $ | 191,546 |
| | $ | 581,027 |
| | $ | (772,573 | ) | | $ | 193,415 |
|
Condensed Consolidating Statement of Income Information Year Ended December 31, 2009 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | REVENUES: | | | | | | | | | | | Total Revenues | | $ | — |
| | $ | 16,409 |
| | $ | 3,628,698 |
| | $ | (164,592 | ) | | $ | 3,480,515 |
| OPERATING EXPENSES: | | | | | | | | | | | Cost of revenues | | — |
| | 15,336 |
| | 2,153,580 |
| | (164,592 | ) | | 2,004,324 |
| Selling, general and administrative expenses | | — |
| | 1,074 |
| | 566,656 |
| | — |
| | 567,730 |
| Other operating expenses | | — |
| | 228 |
| | 372,945 |
| | — |
| | 373,173 |
| Total operating expenses | | — |
| | 16,638 |
| | 3,093,181 |
| | (164,592 | ) | | 2,945,227 |
| (Loss) income from operations | | — |
| | (229 | ) | | 535,517 |
| | — |
| | 535,288 |
| OTHER EXPENSE (INCOME): | | | | | | | | | | | Interest expense | | — |
| | 270,662 |
| | 135,039 |
| | (135,416 | ) | | 270,285 |
| Non-operating expenses | | (2,456 | ) | | (131,512 | ) | | (124 | ) | | 135,416 |
| | 1,324 |
| Earnings from consolidated subsidiaries | | (174,388 | ) | | (402,358 | ) | | — |
| | 576,746 |
| | — |
| Total other (income) expense | | (176,844 | ) | | (263,208 | ) | | 134,915 |
| | 576,746 |
| | 271,609 |
| Income (loss) before provision for income taxes | | 176,844 |
| | 262,979 |
| | 400,602 |
| | (576,746 | ) | | 263,679 |
| Provision for income taxes | | — |
| | (88,591 | ) | | 1,756 |
| | — |
| | (86,835 | ) | Net income (loss) | | $ | 176,844 |
| | $ | 174,388 |
| | $ | 402,358 |
| | $ | (576,746 | ) | | $ | 176,844 |
|
Condensed Consolidating Statement of Cash Flows Information Year Ended December 31, 2011 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | Net cash provided by (used in) operating activities | | $ | 1,363 |
| | $ | (331,843 | ) | | $ | 1,392,288 |
| | $ | — |
| | $ | 1,061,808 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | Purchases of property and equipment | | — |
| | (5,944 | ) | | (883,825 | ) | | — |
| | (889,769 | ) | Purchase of investments | | (599,765 | ) | | — |
| | — |
| | — |
| | (599,765 | ) | Proceeds from maturity of investments | | 675,000 |
| | — |
| | — |
| | — |
| | 675,000 |
| Change in advances – affiliates | | 18,683 |
| | 471,116 |
| | — |
| | (489,799 | ) | | — |
| Other investing activities, net | | — |
| | (61,515 | ) | | (10,822 | ) | | — |
| | (72,337 | ) | Net cash provided by (used in) investing activities | | 93,918 |
| | 403,657 |
| | (894,647 | ) | | (489,799 | ) | | (886,871 | ) | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | Change in advances – affiliates | | — |
| | — |
| | (489,799 | ) | | 489,799 |
| | — |
| Change in book overdraft | | — |
| | 3,445 |
| | — |
| | — |
| | 3,445 |
| Proceeds from debt issuance, net of discount | | — |
| | 1,497,500 |
| | — |
| | — |
| | 1,497,500 |
| Retirement of long-term debt | | — |
| | (535,792 | ) | | — |
| | — |
| | (535,792 | ) | Repayment of debt | | — |
| | (24,292 | ) | | — |
| | — |
| | (24,292 | ) | Other financing activities, net | | 54,159 |
| | (15,351 | ) | | (7,855 | ) | | — |
| | 30,953 |
| Net cash provided by (used in) financing activities | | 54,159 |
| | 925,510 |
| | (497,654 | ) | | 489,799 |
| | 971,814 |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | 149,440 |
| | 997,324 |
| | (13 | ) | | — |
| | 1,146,751 |
| CASH AND CASH EQUIVALENTS, beginning of period | | 507,849 |
| | 287,942 |
| | 740 |
| | — |
| | 796,531 |
| CASH AND CASH EQUIVALENTS, end of period | | $ | 657,289 |
| | $ | 1,285,266 |
| | $ | 727 |
| | $ | — |
| | $ | 1,943,282 |
|
Condensed Consolidating Statement of Cash Flows Information Year Ended December 31, 2010 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | Net cash provided by (used in) operating activities | | $ | 1,401 |
| | $ | (37,976 | ) | | $ | 1,031,075 |
| | $ | — |
| | $ | 994,500 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| |
| |
| |
| |
| Purchases of property and equipment | | — |
| | (173,162 | ) | | (617,223 | ) | | — |
| | (790,385 | ) | Purchase of investments | | (711,827 | ) | | — |
| | — |
| | — |
| | (711,827 | ) | Proceeds from maturity of investments | | 562,500 |
| | — |
| | — |
| | — |
| | 562,500 |
| Change in advances - affiliates | | 5,477 |
| | 555,390 |
| | — |
| | (560,867 | ) | | — |
| Proceeds from affiliate debt | | — |
| | 505,481 |
| | — |
| | (505,481 | ) | | — |
| Issuance of affiliate debt | | — |
| | (683,000 | ) | | — |
| | 683,000 |
| | — |
| Other investing activities, net | | — |
| | 30,433 |
| | (41,139 | ) | | — |
| | (10,706 | ) | Net cash (used in) provided by investing activities | | (143,850 | ) | | 235,142 |
| | (658,362 | ) | | (383,348 | ) | | (950,418 | ) | CASH FLOWS FROM FINANCING ACTIVITIES: | |
| |
| |
| |
| |
| Change in book overdraft | | — |
| | (80,291 | ) | | (2,421 | ) | | — |
| | (82,712 | ) | Proceeds from senior note offerings | | — |
| | 1,992,770 |
| | — |
| | — |
| | 1,992,770 |
| Proceeds from long-term loan | | — |
| | — |
| | 683,000 |
| | (683,000 | ) | | — |
| Change in advances - affiliates | | — |
| | — |
| | (560,867 | ) | | 560,867 |
| | — |
| Retirement of long-term debt | | — |
| | (2,040,186 | ) | | — |
| | — |
| | (2,040,186 | ) | Repayment of debt | | — |
| | (16,000 | ) | | (505,481 | ) | | 505,481 |
| | (16,000 | ) | Other financing activities, net | | 8,209 |
| | (35,353 | ) | | (3,660 | ) | | — |
| | (30,804 | ) | Net cash provided by (used in) financing activities | | 8,209 |
| | (179,060 | ) | | (389,429 | ) | | 383,348 |
| | (176,932 | ) | (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | | (134,240 | ) | | 18,106 |
| | (16,716 | ) | | — |
| | (132,850 | ) | CASH AND CASH EQUIVALENTS, beginning of period | | 642,089 |
| | 269,836 |
| | 17,456 |
| | — |
| | 929,381 |
| CASH AND CASH EQUIVALENTS, end of period | | $ | 507,849 |
| | $ | 287,942 |
| | $ | 740 |
| | $ | — |
| | $ | 796,531 |
|
Condensed Consolidating Statement of Cash Flows Information Year Ended December 31, 2009 | | | | | | | | | | | | | | | | | | | | | | | | Parent | | Issuer | | Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (in thousands) | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | Net cash provided by (used in) operating activities | | $ | 258,785 |
| | $ | (26,058 | ) | | $ | 683,212 |
| | $ | (16,590 | ) | | $ | 899,349 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | Purchases of property and equipment | | — |
| | (9,177 | ) | | (822,497 | ) | | — |
| | (831,674 | ) | Purchase of investments | | (486,645 | ) | | — |
| | — |
| | — |
| | (486,645 | ) | Proceeds from maturity of investments | | 262,500 |
| | — |
| | — |
| | — |
| | 262,500 |
| Proceeds from affiliate debt | | — |
| | 296,700 |
| | — |
| | (296,700 | ) | | — |
| Issuance of affiliate debt | | — |
| | (465,000 | ) | | — |
| | 465,000 |
| | — |
| Other investing activities, net | | — |
| | (52,028 | ) | | (9,107 | ) | | — |
| | (61,135 | ) | Net cash (used in) provided by investing activities | | (224,145 | ) | | (229,505 | ) | | (831,604 | ) | | 168,300 |
| | (1,116,954 | ) | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | Change in book overdraft | | — |
| | (17,047 | ) | | (3,267 | ) | | — |
| | (20,314 | ) | Proceeds from long-term loan | | — |
| | — |
| | 465,000 |
| | (465,000 | ) | | — |
| Proceeds from senior note offerings | | — |
| | 492,250 |
| | — |
| | — |
| | 492,250 |
| Repayment of debt | | — |
| | (16,000 | ) | | (296,700 | ) | | 296,700 |
| | (16,000 | ) | Other financing activities, net | | 8,626 |
| | (11,925 | ) | | (20,189 | ) | | 16,590 |
| | (6,898 | ) | Net cash provided by (used in) financing activities | | 8,626 |
| | 447,278 |
| | 144,844 |
| | (151,710 | ) | | 449,038 |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | 43,266 |
| | 191,715 |
| | (3,548 | ) | | — |
| | 231,433 |
| CASH AND CASH EQUIVALENTS, beginning of period | | 598,823 |
| | 78,121 |
| | 21,004 |
| | — |
| | 697,948 |
| CASH AND CASH EQUIVALENTS, end of period | | $ | 642,089 |
| | $ | 269,836 |
| | $ | 17,456 |
| | $ | — |
| | $ | 929,381 |
|
|