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Document and Entity Information
9 Months Ended
Sep. 30, 2011
Oct. 28, 2011
Document Information [Line Items]
Document Type 10-Q
Amendment Flag false
Document Period End Date Sep 30, 2011
Document Fiscal Year Focus 2011
Document Fiscal Period Focus Q3
Entity Registrant Name METROPCS COMMUNICATIONS INC
Entity Central Index Key 0001283699
Current Fiscal Year End Date --12-31
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 362,259,788
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Condensed Consolidated Balance Sheets (USD  $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
CURRENT ASSETS:
Cash and cash equivalents  $ 1,840,761  $ 796,531
Short-term investments 299,981 374,862
Inventories 147,002 161,049
Accounts receivable (net of allowance for uncollectible accounts of  $611 and  $2,494 at September 30, 2011 and December 31, 2010, respectively) 65,048 58,056
Prepaid expenses 66,763 50,477
Deferred charges 81,178 83,485
Deferred tax assets 6,290 6,290
Other current assets 42,795 63,135
Total current assets 2,549,818 1,593,885
Property and equipment, net 4,009,265 3,659,445
Restricted cash and investments 2,576 2,876
Long-term investments 6,319 16,700
FCC licenses 2,538,600 2,522,241
Other assets 173,023 123,433
Total assets 9,279,601 7,918,580
CURRENT LIABILITIES:
Accounts payable and accrued expenses 476,324 521,788
Current maturities of long-term debt 32,860 21,996
Deferred revenue 243,696 224,471
Other current liabilities 26,458 34,165
Total current liabilities 779,338 802,420
Long-term debt, net 4,710,992 3,757,287
Deferred tax liabilities 756,362 643,058
Deferred rents 114,766 101,411
Other long-term liabilities 92,673 72,828
Total liabilities 6,454,131 5,377,004
COMMITMENTS AND CONTINGENCIES (See Note 9)    
STOCKHOLDERS' EQUITY:
Preferred stock, par value  $0.0001 per share, 100,000,000 shares authorized; no shares of preferred stock issued and outstanding at September 30, 2011 and December 31, 2010 0 0
Common stock, par value  $0.0001 per share, 1,000,000,000 shares authorized, 362,219,229 and 355,318,666 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively 36 36
Additional paid-in capital 1,776,506 1,686,761
Retained earnings 1,068,148 858,108
Accumulated other comprehensive loss (12,947) (1,415)
Less treasury stock, at cost, 537,395 and 237,818 treasury shares at September 30, 2011 and December 31, 2010, respectively (6,273) (1,914)
Total stockholders' equity 2,825,470 2,541,576
Total liabilities and stockholders' equity  $ 9,279,601  $ 7,918,580
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Condensed Consolidated Balance Sheets Parentheticals (USD  $)
In Thousands, except Share data
Sep. 30, 2011
Dec. 31, 2010
Allowance for uncollectible accounts  $ 611  $ 2,494
Preferred stock, par value  $ 0.0001  $ 0.0001
Preferred stock, shares authorized 100,000,000 100,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value  $ 0.0001  $ 0.0001
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 362,219,229 355,318,666
Common stock, shares outstanding 362,219,229 355,318,666
Treasury stock, shares 537,395 237,818
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Condensed Consolidated Statements of Income and Comprehensive Income (USD  $)
In Thousands, except Share data
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
REVENUES:
Service revenues  $ 1,131,054  $ 942,251  $ 3,294,563  $ 2,717,671
Equipment revenues 74,334 78,538 314,654 286,156
Total revenues 1,205,388 1,020,789 3,609,217 3,003,827
OPERATING EXPENSES:
Cost of service (excluding depreciation and amortization expense of  $120,362,  $99,706,  $347,645, and  $290,532 shown separately below) 382,033 313,688 1,089,480 906,508
Cost of equipment 343,473 256,265 1,095,269 805,357
Selling, general and administrative expenses (excluding depreciation and amortization expense of  $18,947,  $14,098,  $54,883, and  $40,374 shown separately below) 162,459 147,431 486,786 465,940
Depreciation and amortization 139,309 113,804 402,528 330,906
Loss (gain) on disposal of assets 1,283 (18,333) 2,731 (16,461)
Total operating expenses 1,028,557 812,855 3,076,794 2,492,250
Income from operations 176,831 207,934 532,423 511,577
OTHER EXPENSE (INCOME):
Interest expense 69,511 65,726 193,051 198,710
Interest income (531) (497) (1,557) (1,353)
Other (income) expense, net (93) 462 (534) 1,396
Loss on extinguishment of debt 0 15,590 9,536 15,590
Total other expense (68,887) (81,281) (200,496) (214,343)
Income before provision for income taxes 107,944 126,653 331,927 297,234
Provision for income taxes (38,618) (49,366) (121,887) (117,370)
Net income 69,326 77,287 210,040 179,864
Other comprehensive income (loss):
Unrealized gains on available-for-sale securities, net of tax of  $25,  $89,  $127 and  $167, respectively 40 137 204 261
Unrealized losses on cash flow hedging derivatives, net of tax benefit of  $5,790,  $2,237,  $13,713, and  $8,674, respectively (9,286) (3,355) (22,060) (13,573)
Reclassification adjustment for gains on available-for-sale securities included in net income, net of tax of  $47,  $49,  $169, and  $132, respectively (75) (74) (272) (207)
Reclassification adjustment for losses on cash flow hedging derivatives included in net income, net of tax benefit of  $2,468,  $1,884,  $6,587, and  $9,320, respectively 3,956 2,780 10,596 14,584
Total other comprehensive (loss) income (5,365) (512) (11,532) 1,065
Comprehensive income  $ 63,961  $ 76,775  $ 198,508  $ 180,929
Net income per common share:
Basic  $ 0.19  $ 0.22  $ 0.58  $ 0.51
Diluted  $ 0.19  $ 0.22  $ 0.57  $ 0.5
Weighted average shares:
Basic 362,019,205 353,954,532 359,763,082 353,342,910
Diluted 364,865,226 356,423,216 363,717,798 355,593,779
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Condensed Consolidated Statements of Income and Comprehensive Income Parentheticals (USD  $)
In Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Depreciation and amortization  $ 139,309  $ 113,804  $ 402,528  $ 330,906
Unrealized gain (loss) on available-for-sale securities, taxes 25 89 127 167
Unrealized gain (loss) on cash flow hedging derivatives, taxes (5,790) (2,237) (13,713) (8,674)
Reclassification adjustment for sale of available-for-sale securities included in net income, taxes (47) (49) (169) (132)
Reclassification adjustment on cash flow hedging derivatives included in net income, taxes 2,468 1,884 6,587 9,320
Cost of Service
Depreciation and amortization 120,362 99,706 347,645 290,532
Selling, General and Administrative Expenses
Depreciation and amortization  $ 18,947  $ 14,098  $ 54,883  $ 40,374
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Condensed Consolidated Statements of Cash Flows (USD  $)
In Thousands
9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income  $ 210,040  $ 179,864
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 402,528 330,906
Provision for uncollectible accounts receivable 382 38
Deferred rent expense 13,457 15,648
Cost of abandoned cell sites 650 1,450
Stock-based compensation expense 32,142 35,103
Non-cash interest expense 6,141 10,049
Loss (gain) on disposal of assets 2,731 (16,461)
Loss on extinguishment of debt 9,536 15,590
Gain on sale of investments (441) (340)
Accretion of asset retirement obligations 4,198 2,772
Other non-cash expense 0 1,455
Deferred income taxes 119,290 114,105
Changes in assets and liabilities:
Inventories 14,047 21,199
Accounts receivable, net (7,373) 4,761
Prepaid expenses (16,289) (11,885)
Deferred charges 2,307 (4,263)
Other assets 24,755 15,730
Accounts payable and accrued expenses (90,087) (50,921)
Deferred revenue 19,225 10,474
Other liabilities 6,421 4,117
Net cash provided by operating activities 753,660 679,391
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (699,625) (547,943)
Change in prepaid purchases of property and equipment (65,241) 60,348
Proceeds from sale of property and equipment 845 7,643
Purchase of investments (462,289) (1,174,773)
Proceeds from maturity of investments 537,500 387,500
Change in restricted cash and investments 300 1,262
Acquisitions of FCC licenses and microwave clearing costs (4,003) (3,686)
Cash used in asset acquisitions (7,495) 0
Net cash used in investing activities (700,008) (1,269,649)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in book overdraft 14,081 (78,765)
Proceeds from debt issuance, net of discount 1,497,500 992,770
Debt issuance costs (15,351) (24,250)
Repayment of debt (17,945) (12,000)
Retirement of long-term debt (535,792) (327,529)
Payments on capital lease obligations (6,222) (2,923)
Purchase of treasury stock (4,359) (1,586)
Proceeds from exercise of stock options 58,666 4,944
Net cash provided by financing activities 990,578 550,661
INCREASE (DECREASE) CASH AND CASH EQUIVALENTS 1,044,230 (39,597)
CASH AND CASH EQUIVALENTS, beginning of period 796,531 929,381
CASH AND CASH EQUIVALENTS, end of period  $ 1,840,761  $ 889,784
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Basis of Presentation
9 Months Ended
Sep. 30, 2011
Basis of Presentation and Significant Accounting Policies [Abstract]
Basis of Presentation
Basis of Presentation:
The accompanying unaudited condensed consolidated interim financial statements include the balances and results of operations of MetroPCS Communications, Inc. (“MetroPCS”) and its consolidated subsidiaries (collectively, the “Company”).
The condensed consolidated balance sheets as of September 30, 2011 and December 31, 2010, the condensed consolidated statements of income and comprehensive income and cash flows for the periods ended September 30, 2011 and 2010, and the related footnotes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. Certain amounts reported in previous periods have been reclassified to conform to the current period presentation. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The Company has thirteen operating segments based on geographic region within the United States: Atlanta, Boston, Dallas/Ft. Worth, Detroit, Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville, Philadelphia, Sacramento, San Francisco and Tampa/Sarasota. In accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280 (Topic 280, “Segment Reporting”), the Company aggregates its thirteen operating segments into one reportable segment.
Federal Universal Service Fund (“FUSF”), E-911 and various other fees are assessed by various governmental authorities in connection with the services that the Company provides to its customers. The Company offers a family of service plans, which include all applicable taxes and regulatory fees (“tax inclusive plans”). The Company reports regulatory fees for the tax inclusive plans in cost of service on the accompanying condensed consolidated statements of income and comprehensive income. When the Company separately assesses these regulatory fees on its customers, the Company reports these regulatory fees on a gross basis in service revenues and cost of service on the accompanying condensed consolidated statements of income and comprehensive income. For the three months ended September 30, 2011 and 2010, the Company recorded  $16.8 million and  $18.5 million, respectively, of FUSF, E-911 and other fees on a gross basis. For the nine months ended September 30, 2011 and 2010, the Company recorded  $52.3 million and  $63.1 million, respectively, of FUSF, E-911 and other fees on a gross basis. Sales, use and excise taxes for all service plans are reported on a net basis in selling, general and administrative expenses on the accompanying condensed consolidated statements of income and comprehensive income.
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Asset Acquisition
9 Months Ended
Sep. 30, 2011
Significant Asset Acquisition [Abstract]
Asset Acquisition
Asset Acquisition:
In October 2010, the Company entered into an asset purchase agreement to acquire 10 MHz of AWS spectrum and certain related network assets adjacent to the Northeast metropolitan areas for a total purchase price of  $49.2 million. In November 2010, the Company closed on the acquisition of the network assets and paid a total of  $41.1 million in cash. In February 2011, the Company closed on the acquisition of the 10 MHz of AWS spectrum and paid  $8.0 million in cash. In June 2011, the Company completed its final settlement of costs and received  $0.5 million in cash as reimbursement for pre-acquisition payments made on behalf of the seller. The Company used the relative fair values of the assets acquired to allocate the purchase price, of which  $35.6 million was allocated to property and equipment and  $13.6 million was allocated to Federal Communications Commission (“FCC”) licenses.
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Short-term Investments
9 Months Ended
Sep. 30, 2011
Investments, Debt and Equity Securities [Abstract]
Short-term Investments
Short-term Investments:
The Company’s short-term investments consist of securities classified as available-for-sale, which are stated at fair value. The securities include U.S. Treasury securities with an original maturity of over 90 days. Unrealized gains, net of related income taxes, for available-for-sale securities are reported in accumulated other comprehensive income (loss), a component of stockholders’ equity, until realized. The estimated fair values of investments are based on quoted market prices as of the end of the reporting period. The U.S. Treasury securities reported as of September 30, 2011 have contractual maturities of less than one year.
Short-term investments, with an original maturity of over 90 days, consisted of the following (in thousands):
 
 
As of September 30, 2011
 
 
Amortized
Cost
 
Unrealized
Gain in
Accumulated
OCI
 
Unrealized
Loss in
Accumulated
OCI
 
Aggregate
Fair
Value
Equity securities
 
 $
7

 
 $

 
 $
(6
)
 
 $
1

U.S. Treasury securities
 
299,910

 
70

 

 
299,980

Total short-term investments
 
 $
299,917

 
 $
70

 
 $
(6
)
 
 $
299,981

 
 
 
As of December 31, 2010
 
 
Amortized
Cost
 
Unrealized
Gain in
Accumulated
OCI
 
Unrealized
Loss in
Accumulated
OCI
 
Aggregate
Fair
Value
Equity securities
 
 $
7

 
 $

 
 $
(6
)
 
 $
1

U.S. Treasury securities
 
374,681

 
180

 

 
374,861

Total short-term investments
 
 $
374,688

 
 $
180

 
 $
(6
)
 
 $
374,862

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Derivative Instruments and Hedging Activities
9 Months Ended
Sep. 30, 2011
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities:
In March 2009, MetroPCS Wireless, Inc. (“Wireless”) entered into three separate two-year interest rate protection agreements to manage the Company’s interest rate risk exposure under Wireless’ senior secured credit facility, as amended (the “Senior Secured Credit Facility”). These agreements were effective on February 1, 2010 and cover a notional amount of  $1.0 billion and effectively convert this portion of Wireless’ variable rate debt to fixed rate debt at a weighted average annual rate of 5.927%. These agreements expire on February 1, 2012.
In October 2010, Wireless entered into three separate two-year interest rate protection agreements to manage its interest rate risk exposure under its Senior Secured Credit Facility. These agreements will be effective on February 1, 2012 and will cover a notional amount of  $950.0 million and effectively convert this portion of Wireless’ variable rate debt to fixed rate debt at a weighted average annual rate of 4.933%. The monthly interest settlement periods will begin on February 1, 2012. These agreements expire on February 1, 2014.
In April 2011, Wireless entered into three separate three-year interest rate protection agreements to manage its interest rate risk exposure under its Senior Secured Credit Facility. These agreements were effective on April 15, 2011 and cover a notional amount of  $450.0 million and effectively convert this portion of Wireless’ variable rate debt to fixed rate debt at a weighted average annual rate of 5.242%. The monthly interest settlement periods began on April 15, 2011. These agreements expire on April 15, 2014.
Interest rate protection agreements are entered into to manage interest rate risk associated with Wireless’ variable-rate borrowings under the Senior Secured Credit Facility. The interest rate protection agreements have been designated as cash flow hedges. If a derivative is designated as a cash flow hedge and the hedging relationship qualifies for hedge accounting under the provisions of ASC 815 (Topic 815, “Derivatives and Hedging”), the effective portion of the change in fair value of the derivative is recorded in accumulated other comprehensive income (loss) and reclassified to interest expense in the period in which the hedged transaction affects earnings. The ineffective portion of the change in fair value of a derivative qualifying for hedge accounting is recognized in earnings in the period of the change. For the three and nine months ended September 30, 2011, the change in fair value did not result in ineffectiveness.
At the inception of the cash flow hedges and quarterly thereafter, the Company performs an assessment to determine whether changes in the fair values or cash flows of the derivatives are deemed highly effective in offsetting changes in the fair values or cash flows of the hedged transaction. If at any time subsequent to the inception of the cash flow hedges, the assessment indicates that the derivative is no longer highly effective as a hedge, the Company will discontinue hedge accounting and recognize all subsequent derivative gains and losses in results of operations. The Company estimates that approximately  $15.1 million of net losses that are reported in accumulated other comprehensive loss at September 30, 2011 are expected to be reclassified into earnings within the next 12 months.
Cross-default Provisions
Wireless’ interest rate protection agreements contain cross-default provisions to its Senior Secured Credit Facility. Wireless’ Senior Secured Credit Facility allows interest rate protection agreements to become secured if the counterparty to the agreement is a current lender under the facility. If Wireless were to default on the Senior Secured Credit Facility, it would trigger these provisions, and the counterparties to the interest rate protection agreements could request immediate payment on interest rate protection agreements in net liability positions, similar to their existing rights as a lender. There are no collateral requirements in the interest rate protection agreements. The aggregate fair value of interest rate protection agreements with cross-default provisions that are in a net liability position on September 30, 2011 is  $26.9 million.

Fair Values of Derivative Instruments
(in thousands)
 
Liability Derivatives
 
 
As of September 30, 2011
 
As of December 31, 2010
 
 
Balance Sheet Location
 
Fair Value
 
Balance Sheet Location
 
Fair Value
Derivatives designated as hedging
instruments under ASC 815
 
 
 
 
 
 
 
 
Interest rate protection agreements
 
Long-term investments
 
 $

 
Long-term investments
 
 $
10,381

Interest rate protection agreements
 
Other current liabilities
 
(15,086
)
 
Other current liabilities
 
(17,508
)
Interest rate protection agreements
 
Other long-term liabilities
 
(11,815
)
 
Other long-term liabilities
 
(1,182
)
Total derivatives designated as
hedging instruments under ASC
815
 
 
 
 $
(26,901
)
 
 
 
 $
(8,309
)



The Effect of Derivative Instruments on the Condensed Consolidated Statement of Income and Comprehensive Income
For the Three Months Ended September 30,
Derivatives in ASC 815 Cash
Flow Hedging Relationships
 
Amount of Gain (Loss)
Recognized in OCI on Derivative
(Effective Portion)
 
Location of Gain (Loss) Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
2011
 
2010
 
2011
 
2010
Interest rate protection agreements
 
 $
(15,076
)
 
 $
(5,591
)
 
Interest expense
 
 $
(6,424
)
 
 $
(4,663
)



The Effect of Derivative Instruments on the Condensed Consolidated Statement of Income and Comprehensive Income
For the Nine Months Ended September 30,
Derivatives in ASC 815 Cash
Flow Hedging Relationships
 
Amount of Gain (Loss)
Recognized in OCI on Derivative
(Effective Portion)
 
Location of Gain (Loss) Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
2011
 
2010
 
2011
 
2010
Interest rate protection agreements
 
 $
(35,774
)
 
 $
(22,246
)
 
Interest expense
 
 $
(17,182
)
 
 $
(23,904
)
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Intangible Assets
9 Months Ended
Sep. 30, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets
Intangible Assets:

The Company operates wireless broadband mobile networks under licenses granted by the FCC for a particular geographic area on spectrum allocated by the FCC for terrestrial wireless broadband services. The Company holds personal communications services (“PCS”) licenses, advanced wireless services (“AWS”) licenses, and 700 MHz licenses granted or acquired on various dates. The PCS licenses previously included, and the AWS licenses currently include, the obligation and resulting costs to relocate existing fixed microwave users of the Company's licensed spectrum if the Company's use of its spectrum interferes with their systems and/or reimburse other carriers (according to FCC rules) that relocated prior users if the relocation benefits the Company's system. Accordingly, the Company incurs costs related to microwave relocation in constructing its PCS and AWS networks. FCC Licenses and related microwave relocation costs are recorded at cost.
The change in the carrying value of intangible assets during the nine months ended September 30, 2011 is as follows (in thousands):
 
 
FCC Licenses
 
Microwave
Relocation
Costs
Balance at January 1, 2011
 
 $
2,500,192

 
 $
22,049

Additions
 
13,579

 
2,780

Disposals
 

 

Balance at September 30, 2011
 
 $
2,513,771

 
 $
24,829



Although PCS, AWS and 700 MHz licenses are issued with a stated term between ten and fifteen years, the renewal of PCS, AWS and 700 MHz licenses is generally a routine matter without substantial cost and the Company has determined that no legal, regulatory, contractual, competitive, economic, or other factors currently exist that limit the useful life of its PCS, AWS and 700 MHz licenses. As such, under the provisions of ASC 350, (Topic 350, “Intangibles-Goodwill and Other”), the Company's PCS, AWS and 700 MHz licenses and microwave relocation costs (collectively, the "indefinite-lived intangible assets") are not amortized because they are considered to have indefinite lives, but are tested at least annually for impairment.

In accordance with the requirements of ASC 350, the Company performs its annual indefinite-lived intangible assets impairment test as of each September 30th or more frequently if events or changes in circumstances indicate that the carrying value of the indefinite-lived intangible assets might be impaired. The impairment test consists of a comparison of estimated fair value with the carrying value. The Company estimates the fair value of its indefinite-lived intangible assets using a direct value methodology. The direct value approach determines fair value using a discounted cash flow model. Cash flow projections involve assumptions by management that include a degree of uncertainty including future cash flows, long-term growth rates, appropriate discount rates, and other inputs. The Company believes that its estimates are consistent with assumptions that marketplace participants would use to estimate fair value. An impairment loss would be recorded as a reduction in the carrying value of the related indefinite-lived intangible assets and charged to results of operations.

For the purpose of performing the annual impairment test as of September 30, 2011, the indefinite-lived intangible assets were aggregated and combined into a single unit of accounting, consistent with the management of the business on a national scope. No impairment was recognized as a result of the test performed at September 30, 2011 as the fair value of the indefinite-lived intangible assets was in excess of the carrying value. Although the Company does not expect its estimates or assumptions to change significantly in the future, the use of different estimates or assumptions within the discounted cash flow model when determining the fair value of the indefinite-lived intangible assets or using a methodology other than a discounted cash flow model could result in different values for the indefinite-lived intangible assets and may affect any related impairment charge. The most significant assumptions within the Company's discounted cash flow model are the discount rate, the projected growth rate, and projected cash flows. A one percent decline in annual revenue growth rates, a one percent decline in annual net cash flows or a one percent increase in discount rate would not result in an impairment as of September 30, 2011.

Furthermore, if any of the indefinite-lived intangible assets are subsequently determined to have a finite useful life, such assets would be tested for impairment in accordance with ASC 360 (Topic 360, “Property, Plant, and Equipment”), and the intangible assets would then be amortized prospectively over the estimated remaining useful life.
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Long-term Debt
9 Months Ended
Sep. 30, 2011
Debt Disclosure [Abstract]
Long-term Debt
Long-term Debt:
Long-term debt consisted of the following (in thousands):
 
 
September 30,
2011
 
December 31,
2010
Senior Secured Credit Facility
 
 $
2,478,263

 
 $
1,532,000

7 7/8% Senior Notes
 
1,000,000

 
1,000,000

5/8% Senior Notes
 
1,000,000

 
1,000,000

Capital Lease Obligations
 
274,451

 
254,336

Total long-term debt
 
4,752,714

 
3,786,336

Add: unamortized discount on debt
 
(8,862
)
 
(7,053
)
Total debt
 
4,743,852

 
3,779,283

Less: current maturities
 
(32,860
)
 
(21,996
)
Total long-term debt
 
 $
4,710,992

 
 $
3,757,287


7 7/8% Senior Notes due 2018
In September 2010, Wireless completed the sale of  $1.0 billion of principal amount of 7 7/8% Senior Notes due 2018 (“7 7/8% Senior Notes”). The terms of the 7 7/8% Senior Notes are governed by the indenture, the first supplemental indenture, dated September 21, 2010, and the third supplemental indenture, dated December 23, 2010, among Wireless, the guarantors party thereto and the trustee. The net proceeds of the sale of the 7 7/8% Senior Notes were  $974.0 million after underwriter fees, discounts and other debt issuance costs of  $26.0 million.
6 5/8% Senior Notes due 2020
In November 2010, Wireless completed the sale of  $1.0 billion of principal amount of 6 5/8% Senior Notes due 2020 (“6 5/8% Senior Notes”). The terms of the 6 5/8% Senior Notes are governed by the indenture, the second supplemental indenture, dated November 17, 2010, and the fourth supplemental indenture, dated December 23, 2010, among Wireless, the guarantors party thereto and the trustee. The net proceeds of the sale of the 6 5/8% Senior Notes were  $988.1 million after underwriter fees, discounts and other debt issuance costs of approximately  $11.9 million.
Senior Secured Credit Facility
In November 2006, Wireless entered into the senior secured credit facility, which consisted of a  $1.6 billion term loan facility and a  $100.0 million revolving credit facility. In November 2006, Wireless borrowed  $1.6 billion under the senior secured credit facility. The term loan facility was repayable in quarterly installments in annual aggregate amounts equal to 1% of the initial aggregate principal amount of  $1.6 billion.
In July 2010, Wireless entered into an Amendment and Restatement and Resignation and Appointment Agreement (the “Amendment”) which amended and restated the senior secured credit facility to, among other things, extend the maturity of  $1.0 billion of existing term loans (“Tranche B-2 Term Loans”) under the Senior Secured Credit Facility to November 2016, increase the interest rate to LIBOR plus 3.50% on the extended portion only and reduce the revolving credit facility from  $100.0 million to  $67.5 million. The remaining term loans (“Tranche B-1 Term Loans”) under the Senior Secured Credit Facility will mature in November 2013 and the interest rate continues to be LIBOR plus 2.25%. This modification did not result in a loss on extinguishment of debt.
In March 2011, Wireless entered into an Amendment and Restatement Agreement (the “New Amendment”) which further amends and restates the Senior Secured Credit Facility. The New Amendment amended the Senior Secured Credit Facility to, among other things, provide for a new tranche of term loans in the amount of  $500.0 million (“Tranche B-3 Term Loans”), with an interest rate of LIBOR plus 3.75% which will mature in March 2018, and increase the interest rate to LIBOR plus 3.821% on the existing Tranche B-1 and Tranche B-2 Term Loans. The Tranche B-3 Term Loans are repayable in quarterly installments of  $1.25 million. In addition, the aggregate amount of the revolving credit facility was increased from  $67.5 million to  $100.0 million and the maturity of the revolving credit facility was extended to March 2016. The net proceeds from the Tranche B-3 Term Loans were  $490.2 million after underwriter fees, discounts and other debt issuance costs of approximately  $9.8 million.

In May 2011, Wireless entered into an Incremental Commitment Agreement (the “Incremental Agreement”) which supplements the New Amendment to provide for an additional  $1.0 billion of Tranche B-3 Term Loans (the “Incremental Tranche B-3 Terms Loans”), which amount was borrowed on May 10, 2011. The Incremental Tranche B-3 Term Loans have an interest rate of LIBOR plus 3.75% and will mature in March 2018. The Incremental Tranche B-3 Term Loans are repayable in quarterly installments of  $2.5 million. A portion of the proceeds from the Incremental Tranche B-3 Term Loans were used to prepay the  $535.8 million in outstanding principal under the Tranche B-1 Term Loans, with the remaining proceeds to be used for general corporate purposes, including opportunistic spectrum acquisitions. The net proceeds from the Incremental Tranche B-3 Term Loans were  $455.9 million after prepayment of the Tranche B-1 Term Loans, underwriter fees, and other debt issuance costs of approximately  $8.3 million. The prepayment of the Tranche B-1 Term Loans resulted in a loss on extinguishment of debt in the amount of  $9.5 million. The Incremental Agreement did not modify the interest rate, maturity date or any of the other terms of the New Amendment applicable to the Tranche B-2 Term Loans or the existing Tranche B-3 Term Loans.
The facilities under the Senior Secured Credit Facility are guaranteed by MetroPCS, MetroPCS, Inc. and each of Wireless’ direct and indirect present and future wholly-owned domestic subsidiaries. The Senior Secured Credit Facility contains customary events of default, including cross-defaults. The obligations under the Senior Secured Credit Facility are also secured by the capital stock of Wireless as well as substantially all of Wireless’ present and future assets and the capital stock and substantially all of the assets of each of its direct and indirect present and future wholly-owned subsidiaries (except as prohibited by law and certain permitted exceptions).
The New Amendment modified certain limitations under the Senior Secured Credit Facility, including limitations on Wireless' ability to incur additional debt, make certain restricted payments, sell assets, make certain investments or acquisitions, grant liens and pay dividends. In addition, Wireless is no longer subject to certain financial covenants, including maintaining a maximum senior secured consolidated leverage ratio, except under certain circumstances.
The interest rate on the outstanding debt under the Senior Secured Credit Facility is variable. The weighted average rate as of September 30, 2011 was 5.028%, which includes the impact of the interest rate protection agreements (See Note 4).
Capital Lease Obligations
The Company has entered into various non-cancelable capital lease agreements, with varying expiration terms through 2026. Assets and future obligations related to capital leases are included in the accompanying condensed consolidated balance sheets in property and equipment and long-term debt, respectively. Depreciation of assets held under capital leases is included in depreciation and amortization expense. As of September 30, 2011, the Company had  $7.5 million and  $267.0 million of capital lease obligations recorded in current maturities of long-term debt and long-term debt, respectively.
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Fair Value Measurements
9 Months Ended
Sep. 30, 2011
Fair Value Disclosures [Abstract]
Fair Value Measurements
Fair Value Measurements:
The Company follows the provisions of ASC 820 (Topic 820, “Fair Value Measurements and Disclosures”) which establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:
 
Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
Level 3 - Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use.
ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation. The Company’s financial assets and liabilities measured at fair value on a recurring basis include cash and cash equivalents, short and long-term investments securities and derivative financial instruments.
 
Included in the Company’s cash equivalents are investments in money market funds consisting of U.S. Treasury securities with an original maturity of 90 days or less. Included in the Company’s short-term investments are securities classified as available-for-sale, which are stated at fair value. These securities include U.S. Treasury securities with an original maturity of over 90 days. Fair value is determined based on observable quotes from banks and unadjusted quoted market prices from identical securities in an active market at the reporting date. Significant inputs to the valuation are observable in the active markets and are classified as Level 1 in the hierarchy.
Included in the Company’s long-term investments are certain auction rate securities, some of which are secured by collateralized debt obligations with a portion of the underlying collateral being mortgage securities or related to mortgage securities. Due to the lack of availability of observable market quotes on the Company’s investment portfolio of auction rate securities, the fair value was estimated based on valuation models that rely exclusively on unobservable Level 3 inputs including those that are based on expected cash flow streams and collateral values, including assessments of counterparty credit quality, default risk underlying the security, discount rates and overall capital market liquidity. The valuation of the Company’s investment portfolio is subject to uncertainties that are difficult to predict. Factors that may impact the Company’s valuation include changes to credit ratings of the securities as well as the underlying assets supporting those securities, rates of default of the underlying assets, underlying collateral values, discount rates, counterparty risk and ongoing strength and quality of market credit and liquidity. Significant inputs to the investments valuation are unobservable in the active markets and are classified as Level 3 in the hierarchy.
Included in the Company’s derivative financial instruments are interest rate swaps. Derivative financial instruments are valued in the market using discounted cash flow techniques. These techniques incorporate Level 1 and Level 2 inputs such as interest rates. These market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation for interest rate swaps are observable in the active markets and are classified as Level 2 in the hierarchy.
The following table summarizes assets and liabilities measured at fair value on a recurring basis at September 30, 2011, as required by ASC 820 (in thousands):
 
 
Fair Value Measurements
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash equivalents
 
 $
1,713,379

 
 $

 
 $

 
 $
1,713,379

Short-term investments
 
299,981

 

 

 
299,981

Restricted cash and investments
 
2,576

 

 

 
2,576

Long-term investments
 

 

 
6,319

 
6,319

Total assets measured at fair value
 
 $
2,015,936

 
 $

 
 $
6,319

 
 $
2,022,255

Liabilities
 

 

 

 

Derivative liabilities
 
 $

 
 $
26,901

 
 $

 
 $
26,901

Total liabilities measured at fair value
 
 $

 
 $
26,901

 
 $

 
 $
26,901

 
The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2010, as required by ASC 820 (in thousands):
 
 
Fair Value Measurements
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash equivalents
 
 $
787,829

 
 $

 
 $

 
 $
787,829

Short-term investments
 
374,862

 

 

 
374,862

Restricted cash and investments
 
2,876

 

 

 
2,876

Long-term investments
 

 

 
6,319

 
6,319

Derivative assets
 

 
10,381

 

 
10,381

Total assets measured at fair value
 
 $
1,165,567

 
 $
10,381

 
 $
6,319

 
 $
1,182,267

Liabilities
 

 

 

 

Derivative liabilities
 
 $

 
 $
18,690

 
 $

 
 $
18,690

Total liabilities measured at fair value
 
 $

 
 $
18,690

 
 $

 
 $
18,690


The following table summarizes the changes in fair value of the Company’s net derivative liabilities included in Level 2 assets (in thousands):
Fair Value Measurements of Net Derivative Liabilities Using Level 2 Inputs
 
Net Derivative Liabilities
 
 
Three Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
18,249

 
 $
22,273

Total losses (realized or unrealized):
 

 

Included in earnings (1)
 
6,424

 
4,663

Included in accumulated other comprehensive income (loss)
 
(15,076
)
 
(5,591
)
Transfers in and/or out of Level 2
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
26,901

 
 $
23,201

 ————————————
(1)
Losses included in earnings that are attributable to the reclassification of the effective portion of those derivative liabilities still held at the reporting date as reported in interest expense in the condensed consolidated statements of income and comprehensive income.

Fair Value Measurements of Net Derivative Liabilities Using Level 2 Inputs
 
Net Derivative Liabilities
 
 
Nine Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
8,309

 
 $
24,859

Total losses (realized or unrealized):
 

 

Included in earnings (2)
 
17,182

 
23,904

Included in accumulated other comprehensive income (loss)
 
(35,774
)
 
(22,246
)
Transfers in and/or out of Level 2
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
26,901

 
 $
23,201

 ————————————
(2)
Losses included in earnings that are attributable to the reclassification of the effective portion of those derivative liabilities still held at the reporting date as reported in interest expense in the condensed consolidated statements of income and comprehensive income.
The following table summarizes the changes in fair value of the Company’s Level 3 assets (in thousands):
Fair Value Measurements of Assets Using Level 3 Inputs
 
Long-Term Investments
 
 
Three Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
6,319

 
 $
6,319

Total losses (realized or unrealized):
 

 

Included in earnings
 

 

Included in accumulated other comprehensive income (loss)
 

 

Transfers in and/or out of Level 3
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
6,319

 
 $
6,319


Fair Value Measurements of Assets Using Level 3 Inputs
 
Long-Term Investments
 
 
Nine Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
6,319

 
 $
6,319

Total losses (realized or unrealized):
 

 

Included in earnings
 

 

Included in accumulated other comprehensive income (loss)
 

 

Transfers in and/or out of Level 3
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
6,319

 
 $
6,319


The carrying value of the Company’s financial instruments, with the exception of long-term debt including current maturities, reasonably approximate the related fair values as of September 30, 2011 and December 31, 2010. The fair value of the Company’s long-term debt, excluding capital lease obligations, is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. As of September 30, 2011, the carrying value and fair value of long-term debt, including current maturities, were  $4.5 billion and approximately  $4.2 billion, respectively. As of December 31, 2010, the carrying value and fair value of long-term debt, including current maturities, were  $3.5 billion and  $3.5 billion, respectively.
 
Although the Company has determined the estimated fair value amounts using available market information and commonly accepted valuation methodologies, considerable judgment is required in interpreting market data to develop fair value estimates. The fair value estimates are based on information available at September 30, 2011 and December 31, 2010 and have not been revalued since those dates. As such, the Company’s estimates are not necessarily indicative of the amount that the Company, or holders of the instruments, could realize in a current market exchange and current estimates of fair value could differ significantly.
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Net Income Per Common Share
9 Months Ended
Sep. 30, 2011
Earnings Per Share [Abstract]
Net Income Per Common Share
Net Income Per Common Share:
The following table sets forth the computation of basic and diluted net income per common share for the periods indicated (in thousands, except share and per share data):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2011
 
2010
 
2011
 
2010
Basic EPS:
 
 
 
 
 
 
 
 
Net income applicable to common stock
 
 $
69,326

 
 $
77,287

 
 $
210,040

 
 $
179,864

Amount allocable to common shareholders
 
99.1
%
 
99.2
%
 
99.1
%
 
99.2
%
Rights to undistributed earnings
 
 $
68,686

 
 $
76,695

 
 $
208,106

 
 $
178,482

Weighted average shares outstanding—basic
 
362,019,205

 
353,954,532

 
359,763,082

 
353,342,910

Net income per common share—basic
 
 $
0.19

 
 $
0.22

 
 $
0.58

 
 $
0.51

Diluted EPS:
 

 

 

 

Rights to undistributed earnings
 
 $
68,686

 
 $
76,695

 
 $
208,106

 
 $
178,482

Weighted average shares outstanding—basic
 
362,019,205

 
353,954,532

 
359,763,082

 
353,342,910

Effect of dilutive securities:
 

 

 

 

Stock options
 
2,846,021

 
2,468,684

 
3,954,716

 
2,250,869

Weighted average shares outstanding—diluted
 
364,865,226

 
356,423,216

 
363,717,798

 
355,593,779

Net income per common share—diluted
 
 $
0.19

 
 $
0.22

 
 $
0.57

 
 $
0.50


In accordance with ASC 260 (Topic 260, “Earnings Per Share”), unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents, whether paid or unpaid, are considered a “participating security” for purposes of computing earnings or loss per common share and the two-class method of computing earnings per share is required for all periods presented. During the three and nine months ended September 30, 2011 and 2010, the Company issued restricted stock awards. Unvested shares of restricted stock are participating securities such that they have rights to receive non-forfeitable dividends. In accordance with ASC 260, the unvested restricted stock was considered a “participating security” for purposes of computing earnings per common share and was therefore included in the computation of basic and diluted earnings per common share.
Under certain of the Company's restricted stock award agreements, unvested shares of restricted stock have rights to receive non-forfeitable dividends. For the three and nine months ended September 30, 2011 and 2010, the Company has calculated diluted earnings per share under both the treasury stock method and the two-class method. There was not a significant difference in the per share amounts calculated under the two methods, and the two-class method is disclosed. For the three and nine months ended September 30, 2011, approximately 3.4 million of restricted common shares issued to employees have been excluded from the computation of basic net income per common share since the shares are not vested and remain subject to forfeiture. For the three and nine months ended September 30, 2010, approximately 2.7 million of restricted common shares issued to employees have been excluded from the computation of basic net income per common share since the shares are not vested and remain subject to forfeiture.
For the three months ended September 30, 2011 and 2010, 18.5 million and 22.3 million, respectively, of stock options were excluded from the calculation of diluted net income per common share since the effect was anti-dilutive. For the nine months ended September 30, 2011 and 2010, 17.8 million and 25.2 million, respectively, of stock options were excluded from the calculation of diluted net income per common share since the effect was anti-dilutive.
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Commitments and Contingencies
9 Months Ended
Sep. 30, 2011
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies
Commitments and Contingencies:

Litigation

The Company is involved in litigation from time to time, including litigation regarding intellectual property claims, that it considers to be in the normal course of business. The Company is not currently party to any pending legal proceedings that the Company believes could, individually or in the aggregate, have a material adverse effect on the Company's financial condition,
results of operations or liquidity. However, legal proceedings are inherently unpredictable, and the matters in which the Company is involved often present complex legal and factual issues. The Company intends to vigorously defend litigation in which it is involved and engage in discussions where possible to resolve these matters on terms favorable to the Company. The Company believes that any amounts which parties to such litigation allege the Company is liable are not necessarily meaningful indicators of the Company’s potential liability. The Company determines whether it should accrue an estimated loss for a contingency in a particular legal proceeding by assessing whether a loss is probable and can be reasonably estimated. The Company reassesses its views on estimated losses on a quarterly basis to reflect the impact of any developments in the matters in which it is involved. It is possible, however, that the Company’s business, financial condition and results of operations in future periods could be materially adversely affected by increased expense, significant settlement costs and/or unfavorable damage awards relating to such matters.
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Supplemental Cash Flow Information
9 Months Ended
Sep. 30, 2011
Supplemental Cash Flow Information [Abstract]
Supplemental Cash Flow Information
Supplemental Cash Flow Information:
 
 
Nine Months Ended September 30,
 
 
2011
 
2010
 
 
(in thousands)
Cash paid for interest
 
 $
183,728

 
 $
160,741

Cash paid for income taxes
 
4,113

 
2,359


Non-cash investing and financing activities
The Company’s accrued purchases of property and equipment were  $136.5 million and  $71.1 million as of September 30, 2011 and 2010, respectively. Included within the Company’s accrued purchases are estimates by management for construction services received based on a percentage of completion.
Assets acquired under capital lease obligations were  $25.0 million and  $23.6 million for the nine months ended September 30, 2011 and 2010, respectively.
During the nine months ended September 30, 2010, the Company returned obsolete network infrastructure assets to one of its vendors in exchange for  $19.9 million in credits towards the purchase of additional network infrastructure assets with the vendor.
During the nine months ended September 30, 2010, the Company received  $22.0 million in fair value of FCC licenses in exchanges with other parties.
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Related-Party Transactions
9 Months Ended
Sep. 30, 2011
Related Party Transactions [Abstract]
Related-Party Transactions
Related-Party Transactions:
One of the Company’s current directors is a managing director of various investment funds affiliated with one of the Company’s greater than 5% stockholders. These funds own interest in a company that provides services to the Company’s customers, including handset insurance programs. Pursuant to the Company’s agreement with this related-party, the Company bills its customers directly for these services and remits the fees collected from its customers for these services to the related-party. In addition, the Company receives compensation for selling handsets to the related-party.
One of the Company’s current directors is the chairman of an equity firm that owns interest in a company that provides wireless caller ID with name services to the Company. Pursuant to an additional agreement with this related-party, the Company receives compensation for providing access to the Company’s line information database/calling name data storage to the related-party.
One of the Company’s current directors is a managing director of various investment funds affiliated with one of the Company’s greater than 5% stockholders. These funds own interest in a company that provides advertising services to the Company.
One of the Company’s current directors is a managing director of various investment funds affiliated with one of the Company’s greater than 5% stockholders. These funds own interest in a company that provides distributed antenna systems ("DAS") leases and maintenance to wireless carriers, including the Company. In addition, another of the Company’s current directors is a general partner of various investment funds which own interest in the same company. These DAS leases are accounted for as capital or operating leases in the Company’s financial statements.
Transactions associated with the related-parties described above are included in various line items in the accompanying condensed consolidated balance sheets, condensed consolidated statements of income and comprehensive income, and condensed consolidated statements of cash flows. The following tables summarize the transactions with related-parties (in millions):
 
 
September 30,
2011
 
December 31,
2010
Network service fees included in prepaid expenses
 
 $
1.5

 
 $
1.5

Receivables from related-party included in other current assets
 
1.0

 
0.6

DAS equipment included in property and equipment, net
 
379.3

 
366.4

Deferred network service fees included in other assets
 
8.6

 
9.9

Payments due to related-party included in accounts payable and accrued expenses
 
8.8

 
7.8

Current portion of capital lease obligations included in current maturities of long-term debt
 
6.5

 
5.2

Non-current portion of capital lease obligations included in long-term debt, net
 
233.9

 
215.4

Deferred DAS service fees included in other long-term liabilities
 
1.4

 
1.2


 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2011
 
2010
 
2011
 
2010
Fees received by the Company as compensation included in service revenues
 
 $
4.0

 
 $
3.4

 
 $
11.4

 
 $
8.5

Fees received by the Company as compensation included in equipment revenues
 
4.9

 
5.4

 
16.2

 
15.4

Fees paid by the Company for services and related expenses included in cost of service
 
6.7

 
5.7

 
17.7

 
16.3

Fees paid by the Company for services included in selling, general and administrative expenses
 
0.6

 
1.2

 
3.2

 
4.0

DAS equipment depreciation included in depreciation expense
 
8.7

 
6.0

 
27.2

 
17.7

Capital lease interest included in interest expense
 
4.9

 
3.6

 
14.3

 
10.6


 
 
Nine Months Ended September 30,
 
 
2011
 
2010
Capital lease payments included in financing activities
 
 $
5.5

 
 $
2.3

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Guarantor Subsidiaries
9 Months Ended
Sep. 30, 2011
Guarantor Subsidiaries [Abstract]
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 subsidiaries, 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 9 1/4% Senior Notes due 2014 , or 9 1/4% Senior Notes, 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 sheets as of September 30, 2011 and December 31, 2010, condensed consolidating statements of income for the three and nine months ended September 30, 2011 and 2010, and condensed consolidating statements of cash flows for the nine months ended September 30, 2011 and 2010 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 Consolidated Balance Sheet
As of September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
CURRENT ASSETS:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 $
1,610,336

 
 $
229,705

 
 $
720

 
 $

 
 $
1,840,761

Short-term investments
 
299,981

 

 

 

 
299,981

Inventories
 

 
131,835

 
15,167

 

 
147,002

Prepaid expenses
 
86

 
694

 
65,983

 

 
66,763

Advances to subsidiaries
 

 
1,405,498

 

 
(1,405,498
)
 

Other current assets
 
77

 
171,289

 
23,945

 

 
195,311

Total current assets
 
1,910,480

 
1,939,021

 
105,815

 
(1,405,498
)
 
2,549,818

Property and equipment, net
 

 
1,462

 
4,007,803

 

 
4,009,265

Long-term investments
 
6,319

 

 

 

 
6,319

Investment in subsidiaries
 
1,203,431

 
4,516,223

 

 
(5,719,654
)
 

FCC licenses
 

 
3,800

 
2,534,800

 

 
2,538,600

Other assets
 

 
141,951

 
33,648

 

 
175,599

Total assets
 
 $
3,120,230

 
 $
6,602,457

 
 $
6,682,066

 
 $
(7,125,152
)
 
 $
9,279,601

CURRENT LIABILITIES:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
 $

 
 $
94,142

 
 $
382,182

 
 $

 
 $
476,324

Advances from subsidiaries
 
292,154

 

 
1,113,344

 
(1,405,498
)
 

Other current liabilities
 

 
87,753

 
215,261

 

 
303,014

Total current liabilities
 
292,154

 
181,895

 
1,710,787

 
(1,405,498
)
 
779,338

Long-term debt
 

 
4,444,011

 
266,981

 

 
4,710,992

Deferred credits
 
2,606

 
753,756

 
114,766

 

 
871,128

Other long-term liabilities
 

 
19,364

 
73,309

 

 
92,673

Total liabilities
 
294,760

 
5,399,026

 
2,165,843

 
(1,405,498
)
 
6,454,131

STOCKHOLDERS’ EQUITY:
 
 
 
 
 
 
 
 
 
 
Common stock
 
36

 

 

 

 
36

Other stockholders’ equity
 
2,825,434

 
1,203,431

 
4,516,223

 
(5,719,654
)
 
2,825,434

Total stockholders’ equity
 
2,825,470

 
1,203,431

 
4,516,223

 
(5,719,654
)
 
2,825,470

Total liabilities and stockholders’ equity
 
 $
3,120,230

 
 $
6,602,457

 
 $
6,682,066

 
 $
(7,125,152
)
 
 $
9,279,601


 

Condensed Consolidated Balance Sheet
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

Short-term investments
 
374,862

 

 

 

 
374,862

Inventories
 

 
145,260

 
15,789

 

 
161,049

Prepaid expenses
 

 
249

 
50,228

 

 
50,477

Advances to subsidiaries
 
647,701

 
462,518

 

 
(1,110,219
)
 

Other current assets
 
94

 
171,083

 
39,789

 

 
210,966

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:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
 $

 
 $
150,994

 
 $
370,794

 
 $

 
 $
521,788

Advances from subsidiaries
 

 

 
1,110,219

 
(1,110,219
)
 

Other current liabilities
 

 
82,684

 
197,948

 

 
280,632

Total current liabilities
 

 
233,678

 
1,678,961

 
(1,110,219
)
 
802,420

Long-term debt
 

 
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 Consolidated Statement of Income
Three Months Ended September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
4,558

 
 $
1,208,170

 
 $
(7,340
)
 
 $
1,205,388

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
4,180

 
728,666

 
(7,340
)
 
725,506

Selling, general and administrative expenses
 

 
378

 
162,081

 

 
162,459

Other operating expenses
 

 
91

 
140,501

 

 
140,592

Total operating expenses
 

 
4,649

 
1,031,248

 
(7,340
)
 
1,028,557

(Loss) income from operations
 

 
(91
)
 
176,922

 

 
176,831

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
64,750

 
4,761

 

 
69,511

Non-operating expenses
 
(452
)
 
(47
)
 
(125
)
 

 
(624
)
Earnings from consolidated subsidiaries
 
(68,874
)
 
(171,801
)
 

 
240,675

 

Total other (income) expense
 
(69,326
)
 
(107,098
)
 
4,636

 
240,675

 
68,887

Income (loss) before provision for income taxes
 
69,326

 
107,007

 
172,286

 
(240,675
)
 
107,944

Provision for income taxes
 

 
(38,133
)
 
(485
)
 

 
(38,618
)
Net income (loss)
 
 $
69,326

 
 $
68,874

 
 $
171,801

 
 $
(240,675
)
 
 $
69,326



Condensed Consolidated Statement of Income
Three Months Ended September 30, 2010
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
4,437

 
 $
1,075,390

 
 $
(59,038
)
 
 $
1,020,789

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
4,118

 
624,873

 
(59,038
)
 
569,953

Selling, general and administrative expenses
 

 
320

 
147,111

 

 
147,431

Other operating expenses
 

 
53

 
95,418

 

 
95,471

Total operating expenses
 

 
4,491

 
867,402

 
(59,038
)
 
812,855

(Loss) income from operations
 

 
(54
)
 
207,988

 

 
207,934

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
63,136

 
42,899

 
(40,309
)
 
65,726

Non-operating expenses
 
(456
)
 
(24,237
)
 
(61
)
 
40,309

 
15,555

Earnings from consolidated subsidiaries
 
(76,831
)
 
(165,150
)
 

 
241,981

 

Total other (income) expense
 
(77,287
)
 
(126,251
)
 
42,838

 
241,981

 
81,281

Income (loss) before provision for income taxes
 
77,287

 
126,197

 
165,150

 
(241,981
)
 
126,653

Provision for income taxes
 

 
(49,366
)
 

 

 
(49,366
)
Net income (loss)
 
 $
77,287

 
 $
76,831

 
 $
165,150

 
 $
(241,981
)
 
 $
77,287


 
Condensed Consolidated Statement of Income
Nine Months Ended September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
15,483

 
 $
3,616,464

 
 $
(22,730
)
 
 $
3,609,217

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
14,389

 
2,193,090

 
(22,730
)
 
2,184,749

Selling, general and administrative expenses
 

 
1,094

 
485,692

 

 
486,786

Other operating expenses
 

 
245

 
405,014

 

 
405,259

Total operating expenses
 

 
15,728

 
3,083,796

 
(22,730
)
 
3,076,794

(Loss) income from operations
 

 
(245
)
 
532,668

 

 
532,423

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
180,044

 
13,007

 

 
193,051

Non-operating expenses
 
(1,439
)
 
9,462

 
(578
)
 

 
7,445

Earnings from consolidated subsidiaries
 
(208,601
)
 
(521,670
)
 

 
730,271

 

Total other (income) expense
 
(210,040
)
 
(332,164
)
 
12,429

 
730,271

 
200,496

Income (loss) before provision for income taxes
 
210,040

 
331,919

 
520,239

 
(730,271
)
 
331,927

Provision for income taxes
 

 
(123,318
)
 
1,431

 

 
(121,887
)
Net income (loss)
 
 $
210,040

 
 $
208,601

 
 $
521,670

 
 $
(730,271
)
 
 $
210,040



Condensed Consolidated Statement of Income
Nine Months Ended September 30, 2010
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
13,908

 
 $
3,151,627

 
 $
(161,708
)
 
 $
3,003,827

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
13,153

 
1,860,420

 
(161,708
)
 
1,711,865

Selling, general and administrative expenses
 

 
756

 
465,184

 

 
465,940

Other operating expenses
 

 
118

 
314,327

 

 
314,445

Total operating expenses
 

 
14,027

 
2,639,931

 
(161,708
)
 
2,492,250

(Loss) income from operations
 

 
(119
)
 
511,696

 

 
511,577

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
191,338

 
123,800

 
(116,428
)
 
198,710

Non-operating expenses
 
(1,279
)
 
(99,417
)
 
(99
)
 
116,428

 
15,633

Earnings from consolidated subsidiaries
 
(178,585
)
 
(387,995
)
 

 
566,580

 

Total other (income) expense
 
(179,864
)
 
(296,074
)
 
123,701

 
566,580

 
214,343

Income (loss) before provision for income taxes
 
179,864

 
295,955

 
387,995

 
(566,580
)
 
297,234

Provision for income taxes
 

 
(117,370
)
 

 

 
(117,370
)
Net income (loss)
 
 $
179,864

 
 $
178,585

 
 $
387,995

 
 $
(566,580
)
 
 $
179,864


 
Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
 
 $
930

 
 $
(240,366
)
 
 $
993,096

 
 $

 
 $
753,660

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
 

 
(5,790
)
 
(693,835
)
 

 
(699,625
)
Purchase of investments
 
(462,289
)
 

 

 

 
(462,289
)
Proceeds from maturity of investments
 
537,500

 

 

 

 
537,500

Change in advances – affiliates
 
679,885

 
(689,633
)
 

 
9,748

 

Other investing activities, net
 

 
(64,941
)
 
(10,653
)
 

 
(75,594
)
Net cash provided by (used in) investing activities
 
755,096

 
(760,364
)
 
(704,488
)
 
9,748

 
(700,008
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Change in advances – affiliates
 
292,154

 

 
(282,406
)
 
(9,748
)
 

Change in book overdraft
 

 
14,081

 

 

 
14,081

Proceeds from debt issuance, net of discount
 

 
1,497,500

 

 

 
1,497,500

Retirement of long-term debt
 

 
(535,792
)
 

 

 
(535,792
)
Other financing activities, net
 
54,307

 
(33,296
)
 
(6,222
)
 

 
14,789

Net cash provided by (used in) financing activities
 
346,461

 
942,493

 
(288,628
)
 
(9,748
)
 
990,578

INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS
 
1,102,487

 
(58,237
)
 
(20
)
 

 
1,044,230

CASH AND CASH EQUIVALENTS, beginning of period
 
507,849

 
287,942

 
740

 

 
796,531

CASH AND CASH EQUIVALENTS, end of period
 
 $
1,610,336

 
 $
229,705

 
 $
720

 
 $

 
 $
1,840,761


 

Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2010
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
 
 $
1,057

 
 $
(4,846
)
 
 $
683,180

 
 $

 
 $
679,391

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
 

 
(141,945
)
 
(405,998
)
 

 
(547,943
)
Purchase of investments
 
(537,003
)
 
(637,770
)
 

 

 
(1,174,773
)
Proceeds from maturity of investments
 
387,500

 

 

 

 
387,500

Change in advances - affiliates
 
3,497

 
428,393

 

 
(431,890
)
 

Proceeds from affiliate debt
 

 
385,664

 

 
(385,664
)
 

Issuance of affiliate debt
 

 
(543,000
)
 

 
543,000

 

Other investing activities, net
 

 
61,610

 
3,957

 

 
65,567

Net cash (used in) provided by investing activities
 
(146,006
)
 
(447,048
)
 
(402,041
)
 
(274,554
)
 
(1,269,649
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Change in book overdraft
 

 
(80,263
)
 
1,498

 

 
(78,765
)
Proceeds from debt issuance, net of discount
 

 
992,770

 

 

 
992,770

Retirement of long-term debt
 

 
(327,529
)
 

 

 
(327,529
)
Proceeds from long-term loan
 

 

 
543,000

 
(543,000
)
 

Change in advances - affiliates
 

 

 
(431,890
)
 
431,890

 

Repayment of debt
 

 
(12,000
)
 
(385,664
)
 
385,664

 
(12,000
)
Other financing activities, net
 
3,358

 
(24,250
)
 
(2,923
)
 

 
(23,815
)
Net cash provided by (used in) financing activities
 
3,358

 
548,728

 
(275,979
)
 
274,554

 
550,661

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
 
(141,591
)
 
96,834

 
5,160

 

 
(39,597
)
CASH AND CASH EQUIVALENTS,
beginning of period
 
642,089

 
269,836

 
17,456

 

 
929,381

CASH AND CASH EQUIVALENTS, end of period
 
 $
500,498

 
 $
366,670

 
 $
22,616

 
 $

 
 $
889,784

------=_NextPart_3778b06a_0daf_4f44_87a8_1611ab77c7fa Content-Location: file:///C:/3778b06a_0daf_4f44_87a8_1611ab77c7fa/Worksheets/Sheet19.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Significant Accounting Policies
9 Months Ended
Sep. 30, 2011
Basis of Presentation and Significant Accounting Policies [Abstract]
Consolidation Policy
The accompanying unaudited condensed consolidated interim financial statements include the balances and results of operations of MetroPCS Communications, Inc. (“MetroPCS”) and its consolidated subsidiaries (collectively, the “Company”).
Basis of Accounting Policy
The condensed consolidated balance sheets as of September 30, 2011 and December 31, 2010, the condensed consolidated statements of income and comprehensive income and cash flows for the periods ended September 30, 2011 and 2010, and the related footnotes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates Policy
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Segment Reporting Policy
The Company has thirteen operating segments based on geographic region within the United States: Atlanta, Boston, Dallas/Ft. Worth, Detroit, Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville, Philadelphia, Sacramento, San Francisco and Tampa/Sarasota. In accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280 (Topic 280, “Segment Reporting”), the Company aggregates its thirteen operating segments into one reportable segment.
Gross and Net Revenue Presentation Policy
Federal Universal Service Fund (“FUSF”), E-911 and various other fees are assessed by various governmental authorities in connection with the services that the Company provides to its customers. The Company offers a family of service plans, which include all applicable taxes and regulatory fees (“tax inclusive plans”). The Company reports regulatory fees for the tax inclusive plans in cost of service on the accompanying condensed consolidated statements of income and comprehensive income. When the Company separately assesses these regulatory fees on its customers, the Company reports these regulatory fees on a gross basis in service revenues and cost of service on the accompanying condensed consolidated statements of income and comprehensive income. For the three months ended September 30, 2011 and 2010, the Company recorded  $16.8 million and  $18.5 million, respectively, of FUSF, E-911 and other fees on a gross basis. For the nine months ended September 30, 2011 and 2010, the Company recorded  $52.3 million and  $63.1 million, respectively, of FUSF, E-911 and other fees on a gross basis. Sales, use and excise taxes for all service plans are reported on a net basis in selling, general and administrative expenses on the accompanying condensed consolidated statements of income and comprehensive income.
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Short-term Investments (Tables)
9 Months Ended
Sep. 30, 2011
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-sale Securities
Short-term investments, with an original maturity of over 90 days, consisted of the following (in thousands):
 
 
As of September 30, 2011
 
 
Amortized
Cost
 
Unrealized
Gain in
Accumulated
OCI
 
Unrealized
Loss in
Accumulated
OCI
 
Aggregate
Fair
Value
Equity securities
 
 $
7

 
 $

 
 $
(6
)
 
 $
1

U.S. Treasury securities
 
299,910

 
70

 

 
299,980

Total short-term investments
 
 $
299,917

 
 $
70

 
 $
(6
)
 
 $
299,981

 
 
 
As of December 31, 2010
 
 
Amortized
Cost
 
Unrealized
Gain in
Accumulated
OCI
 
Unrealized
Loss in
Accumulated
OCI
 
Aggregate
Fair
Value
Equity securities
 
 $
7

 
 $

 
 $
(6
)
 
 $
1

U.S. Treasury securities
 
374,681

 
180

 

 
374,861

Total short-term investments
 
 $
374,688

 
 $
180

 
 $
(6
)
 
 $
374,862

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Derivative Instruments and Hedging Activities (Tables)
9 Months Ended
Sep. 30, 2011
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair Values of Derivative Instruments
Fair Values of Derivative Instruments
(in thousands)
 
Liability Derivatives
 
 
As of September 30, 2011
 
As of December 31, 2010
 
 
Balance Sheet Location
 
Fair Value
 
Balance Sheet Location
 
Fair Value
Derivatives designated as hedging
instruments under ASC 815
 
 
 
 
 
 
 
 
Interest rate protection agreements
 
Long-term investments
 
 $

 
Long-term investments
 
 $
10,381

Interest rate protection agreements
 
Other current liabilities
 
(15,086
)
 
Other current liabilities
 
(17,508
)
Interest rate protection agreements
 
Other long-term liabilities
 
(11,815
)
 
Other long-term liabilities
 
(1,182
)
Total derivatives designated as
hedging instruments under ASC
815
 
 
 
 $
(26,901
)
 
 
 
 $
(8,309
)
Effect of Derivative Instruments on the Condensed Consolidated Statement of Income and Comprehensive Income
The Effect of Derivative Instruments on the Condensed Consolidated Statement of Income and Comprehensive Income
For the Three Months Ended September 30,
Derivatives in ASC 815 Cash
Flow Hedging Relationships
 
Amount of Gain (Loss)
Recognized in OCI on Derivative
(Effective Portion)
 
Location of Gain (Loss) Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
2011
 
2010
 
2011
 
2010
Interest rate protection agreements
 
 $
(15,076
)
 
 $
(5,591
)
 
Interest expense
 
 $
(6,424
)
 
 $
(4,663
)



The Effect of Derivative Instruments on the Condensed Consolidated Statement of Income and Comprehensive Income
For the Nine Months Ended September 30,
Derivatives in ASC 815 Cash
Flow Hedging Relationships
 
Amount of Gain (Loss)
Recognized in OCI on Derivative
(Effective Portion)
 
Location of Gain (Loss) Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective Portion)
 
2011
 
2010
 
2011
 
2010
Interest rate protection agreements
 
 $
(35,774
)
 
 $
(22,246
)
 
Interest expense
 
 $
(17,182
)
 
 $
(23,904
)
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Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Acquired Indefinite-lived Intangible Assets
 
 
FCC Licenses
 
Microwave
Relocation
Costs
Balance at January 1, 2011
 
 $
2,500,192

 
 $
22,049

Additions
 
13,579

 
2,780

Disposals
 

 

Balance at September 30, 2011
 
 $
2,513,771

 
 $
24,829

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Long-term Debt (Tables)
9 Months Ended
Sep. 30, 2011
Debt Disclosure [Abstract]
Schedule of Long-term Debt
Long-term debt consisted of the following (in thousands):
 
 
September 30,
2011
 
December 31,
2010
Senior Secured Credit Facility
 
 $
2,478,263

 
 $
1,532,000

7 7/8% Senior Notes
 
1,000,000

 
1,000,000

5/8% Senior Notes
 
1,000,000

 
1,000,000

Capital Lease Obligations
 
274,451

 
254,336

Total long-term debt
 
4,752,714

 
3,786,336

Add: unamortized discount on debt
 
(8,862
)
 
(7,053
)
Total debt
 
4,743,852

 
3,779,283

Less: current maturities
 
(32,860
)
 
(21,996
)
Total long-term debt
 
 $
4,710,992

 
 $
3,757,287

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Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2011
Fair Value Disclosures [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table summarizes assets and liabilities measured at fair value on a recurring basis at September 30, 2011, as required by ASC 820 (in thousands):
 
 
Fair Value Measurements
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash equivalents
 
 $
1,713,379

 
 $

 
 $

 
 $
1,713,379

Short-term investments
 
299,981

 

 

 
299,981

Restricted cash and investments
 
2,576

 

 

 
2,576

Long-term investments
 

 

 
6,319

 
6,319

Total assets measured at fair value
 
 $
2,015,936

 
 $

 
 $
6,319

 
 $
2,022,255

Liabilities
 

 

 

 

Derivative liabilities
 
 $

 
 $
26,901

 
 $

 
 $
26,901

Total liabilities measured at fair value
 
 $

 
 $
26,901

 
 $

 
 $
26,901

 
The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2010, as required by ASC 820 (in thousands):
 
 
Fair Value Measurements
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash equivalents
 
 $
787,829

 
 $

 
 $

 
 $
787,829

Short-term investments
 
374,862

 

 

 
374,862

Restricted cash and investments
 
2,876

 

 

 
2,876

Long-term investments
 

 

 
6,319

 
6,319

Derivative assets
 

 
10,381

 

 
10,381

Total assets measured at fair value
 
 $
1,165,567

 
 $
10,381

 
 $
6,319

 
 $
1,182,267

Liabilities
 

 

 

 

Derivative liabilities
 
 $

 
 $
18,690

 
 $

 
 $
18,690

Total liabilities measured at fair value
 
 $

 
 $
18,690

 
 $

 
 $
18,690

Fair Value, Derivatives Measured On Recurring Basis Observable Input Reconciliation
The following table summarizes the changes in fair value of the Company’s net derivative liabilities included in Level 2 assets (in thousands):
Fair Value Measurements of Net Derivative Liabilities Using Level 2 Inputs
 
Net Derivative Liabilities
 
 
Three Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
18,249

 
 $
22,273

Total losses (realized or unrealized):
 

 

Included in earnings (1)
 
6,424

 
4,663

Included in accumulated other comprehensive income (loss)
 
(15,076
)
 
(5,591
)
Transfers in and/or out of Level 2
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
26,901

 
 $
23,201

 ————————————
(1)
Losses included in earnings that are attributable to the reclassification of the effective portion of those derivative liabilities still held at the reporting date as reported in interest expense in the condensed consolidated statements of income and comprehensive income.

Fair Value Measurements of Net Derivative Liabilities Using Level 2 Inputs
 
Net Derivative Liabilities
 
 
Nine Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
8,309

 
 $
24,859

Total losses (realized or unrealized):
 

 

Included in earnings (2)
 
17,182

 
23,904

Included in accumulated other comprehensive income (loss)
 
(35,774
)
 
(22,246
)
Transfers in and/or out of Level 2
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
26,901

 
 $
23,201

 ————————————
(2)
Losses included in earnings that are attributable to the reclassification of the effective portion of those derivative liabilities still held at the reporting date as reported in interest expense in the condensed consolidated statements of income and comprehensive income.
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following table summarizes the changes in fair value of the Company’s Level 3 assets (in thousands):
Fair Value Measurements of Assets Using Level 3 Inputs
 
Long-Term Investments
 
 
Three Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
6,319

 
 $
6,319

Total losses (realized or unrealized):
 

 

Included in earnings
 

 

Included in accumulated other comprehensive income (loss)
 

 

Transfers in and/or out of Level 3
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
6,319

 
 $
6,319


Fair Value Measurements of Assets Using Level 3 Inputs
 
Long-Term Investments
 
 
Nine Months Ended September 30,
 
 
2011
 
2010
Beginning balance
 
 $
6,319

 
 $
6,319

Total losses (realized or unrealized):
 

 

Included in earnings
 

 

Included in accumulated other comprehensive income (loss)
 

 

Transfers in and/or out of Level 3
 

 

Purchases, sales, issuances and settlements
 

 

Ending balance
 
 $
6,319

 
 $
6,319

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Net Income Per Common Share (Tables)
9 Months Ended
Sep. 30, 2011
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted
The following table sets forth the computation of basic and diluted net income per common share for the periods indicated (in thousands, except share and per share data):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2011
 
2010
 
2011
 
2010
Basic EPS:
 
 
 
 
 
 
 
 
Net income applicable to common stock
 
 $
69,326

 
 $
77,287

 
 $
210,040

 
 $
179,864

Amount allocable to common shareholders
 
99.1
%
 
99.2
%
 
99.1
%
 
99.2
%
Rights to undistributed earnings
 
 $
68,686

 
 $
76,695

 
 $
208,106

 
 $
178,482

Weighted average shares outstanding—basic
 
362,019,205

 
353,954,532

 
359,763,082

 
353,342,910

Net income per common share—basic
 
 $
0.19

 
 $
0.22

 
 $
0.58

 
 $
0.51

Diluted EPS:
 

 

 

 

Rights to undistributed earnings
 
 $
68,686

 
 $
76,695

 
 $
208,106

 
 $
178,482

Weighted average shares outstanding—basic
 
362,019,205

 
353,954,532

 
359,763,082

 
353,342,910

Effect of dilutive securities:
 

 

 

 

Stock options
 
2,846,021

 
2,468,684

 
3,954,716

 
2,250,869

Weighted average shares outstanding—diluted
 
364,865,226

 
356,423,216

 
363,717,798

 
355,593,779

Net income per common share—diluted
 
 $
0.19

 
 $
0.22

 
 $
0.57

 
 $
0.50

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Supplemental Cash Flow Information (Tables)
9 Months Ended
Sep. 30, 2011
Supplemental Cash Flow Information [Abstract]
Schedule of Supplemental Cash Flow Disclosures
 
 
Nine Months Ended September 30,
 
 
2011
 
2010
 
 
(in thousands)
Cash paid for interest
 
 $
183,728

 
 $
160,741

Cash paid for income taxes
 
4,113

 
2,359

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Related-Party Transactions (Tables)
9 Months Ended
Sep. 30, 2011
Related Party Transactions [Abstract]
Schedule of Related Party Transactions
Transactions associated with the related-parties described above are included in various line items in the accompanying condensed consolidated balance sheets, condensed consolidated statements of income and comprehensive income, and condensed consolidated statements of cash flows. The following tables summarize the transactions with related-parties (in millions):
 
 
September 30,
2011
 
December 31,
2010
Network service fees included in prepaid expenses
 
 $
1.5

 
 $
1.5

Receivables from related-party included in other current assets
 
1.0

 
0.6

DAS equipment included in property and equipment, net
 
379.3

 
366.4

Deferred network service fees included in other assets
 
8.6

 
9.9

Payments due to related-party included in accounts payable and accrued expenses
 
8.8

 
7.8

Current portion of capital lease obligations included in current maturities of long-term debt
 
6.5

 
5.2

Non-current portion of capital lease obligations included in long-term debt, net
 
233.9

 
215.4

Deferred DAS service fees included in other long-term liabilities
 
1.4

 
1.2


 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2011
 
2010
 
2011
 
2010
Fees received by the Company as compensation included in service revenues
 
 $
4.0

 
 $
3.4

 
 $
11.4

 
 $
8.5

Fees received by the Company as compensation included in equipment revenues
 
4.9

 
5.4

 
16.2

 
15.4

Fees paid by the Company for services and related expenses included in cost of service
 
6.7

 
5.7

 
17.7

 
16.3

Fees paid by the Company for services included in selling, general and administrative expenses
 
0.6

 
1.2

 
3.2

 
4.0

DAS equipment depreciation included in depreciation expense
 
8.7

 
6.0

 
27.2

 
17.7

Capital lease interest included in interest expense
 
4.9

 
3.6

 
14.3

 
10.6


 
 
Nine Months Ended September 30,
 
 
2011
 
2010
Capital lease payments included in financing activities
 
 $
5.5

 
 $
2.3

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Guarantor Subsidiaries (Tables)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Dec. 31, 2010
Guarantor Subsidiaries [Abstract]
Schedule of Condensed Consolidated Statements of Financial Position
Condensed Consolidated Balance Sheet
As of September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
CURRENT ASSETS:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 $
1,610,336

 
 $
229,705

 
 $
720

 
 $

 
 $
1,840,761

Short-term investments
 
299,981

 

 

 

 
299,981

Inventories
 

 
131,835

 
15,167

 

 
147,002

Prepaid expenses
 
86

 
694

 
65,983

 

 
66,763

Advances to subsidiaries
 

 
1,405,498

 

 
(1,405,498
)
 

Other current assets
 
77

 
171,289

 
23,945

 

 
195,311

Total current assets
 
1,910,480

 
1,939,021

 
105,815

 
(1,405,498
)
 
2,549,818

Property and equipment, net
 

 
1,462

 
4,007,803

 

 
4,009,265

Long-term investments
 
6,319

 

 

 

 
6,319

Investment in subsidiaries
 
1,203,431

 
4,516,223

 

 
(5,719,654
)
 

FCC licenses
 

 
3,800

 
2,534,800

 

 
2,538,600

Other assets
 

 
141,951

 
33,648

 

 
175,599

Total assets
 
 $
3,120,230

 
 $
6,602,457

 
 $
6,682,066

 
 $
(7,125,152
)
 
 $
9,279,601

CURRENT LIABILITIES:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
 $

 
 $
94,142

 
 $
382,182

 
 $

 
 $
476,324

Advances from subsidiaries
 
292,154

 

 
1,113,344

 
(1,405,498
)
 

Other current liabilities
 

 
87,753

 
215,261

 

 
303,014

Total current liabilities
 
292,154

 
181,895

 
1,710,787

 
(1,405,498
)
 
779,338

Long-term debt
 

 
4,444,011

 
266,981

 

 
4,710,992

Deferred credits
 
2,606

 
753,756

 
114,766

 

 
871,128

Other long-term liabilities
 

 
19,364

 
73,309

 

 
92,673

Total liabilities
 
294,760

 
5,399,026

 
2,165,843

 
(1,405,498
)
 
6,454,131

STOCKHOLDERS’ EQUITY:
 
 
 
 
 
 
 
 
 
 
Common stock
 
36

 

 

 

 
36

Other stockholders’ equity
 
2,825,434

 
1,203,431

 
4,516,223

 
(5,719,654
)
 
2,825,434

Total stockholders’ equity
 
2,825,470

 
1,203,431

 
4,516,223

 
(5,719,654
)
 
2,825,470

Total liabilities and stockholders’ equity
 
 $
3,120,230

 
 $
6,602,457

 
 $
6,682,066

 
 $
(7,125,152
)
 
 $
9,279,601

Condensed Consolidated Balance Sheet
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

Short-term investments
 
374,862

 

 

 

 
374,862

Inventories
 

 
145,260

 
15,789

 

 
161,049

Prepaid expenses
 

 
249

 
50,228

 

 
50,477

Advances to subsidiaries
 
647,701

 
462,518

 

 
(1,110,219
)
 

Other current assets
 
94

 
171,083

 
39,789

 

 
210,966

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:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
 $

 
 $
150,994

 
 $
370,794

 
 $

 
 $
521,788

Advances from subsidiaries
 

 

 
1,110,219

 
(1,110,219
)
 

Other current liabilities
 

 
82,684

 
197,948

 

 
280,632

Total current liabilities
 

 
233,678

 
1,678,961

 
(1,110,219
)
 
802,420

Long-term debt
 

 
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

Schedule of Condensed Consolidated Statements of Income
Condensed Consolidated Statement of Income
Three Months Ended September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
4,558

 
 $
1,208,170

 
 $
(7,340
)
 
 $
1,205,388

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
4,180

 
728,666

 
(7,340
)
 
725,506

Selling, general and administrative expenses
 

 
378

 
162,081

 

 
162,459

Other operating expenses
 

 
91

 
140,501

 

 
140,592

Total operating expenses
 

 
4,649

 
1,031,248

 
(7,340
)
 
1,028,557

(Loss) income from operations
 

 
(91
)
 
176,922

 

 
176,831

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
64,750

 
4,761

 

 
69,511

Non-operating expenses
 
(452
)
 
(47
)
 
(125
)
 

 
(624
)
Earnings from consolidated subsidiaries
 
(68,874
)
 
(171,801
)
 

 
240,675

 

Total other (income) expense
 
(69,326
)
 
(107,098
)
 
4,636

 
240,675

 
68,887

Income (loss) before provision for income taxes
 
69,326

 
107,007

 
172,286

 
(240,675
)
 
107,944

Provision for income taxes
 

 
(38,133
)
 
(485
)
 

 
(38,618
)
Net income (loss)
 
 $
69,326

 
 $
68,874

 
 $
171,801

 
 $
(240,675
)
 
 $
69,326

Condensed Consolidated Statement of Income
Three Months Ended September 30, 2010
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
4,437

 
 $
1,075,390

 
 $
(59,038
)
 
 $
1,020,789

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
4,118

 
624,873

 
(59,038
)
 
569,953

Selling, general and administrative expenses
 

 
320

 
147,111

 

 
147,431

Other operating expenses
 

 
53

 
95,418

 

 
95,471

Total operating expenses
 

 
4,491

 
867,402

 
(59,038
)
 
812,855

(Loss) income from operations
 

 
(54
)
 
207,988

 

 
207,934

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
63,136

 
42,899

 
(40,309
)
 
65,726

Non-operating expenses
 
(456
)
 
(24,237
)
 
(61
)
 
40,309

 
15,555

Earnings from consolidated subsidiaries
 
(76,831
)
 
(165,150
)
 

 
241,981

 

Total other (income) expense
 
(77,287
)
 
(126,251
)
 
42,838

 
241,981

 
81,281

Income (loss) before provision for income taxes
 
77,287

 
126,197

 
165,150

 
(241,981
)
 
126,653

Provision for income taxes
 

 
(49,366
)
 

 

 
(49,366
)
Net income (loss)
 
 $
77,287

 
 $
76,831

 
 $
165,150

 
 $
(241,981
)
 
 $
77,287

Condensed Consolidated Statement of Income
Nine Months Ended September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
15,483

 
 $
3,616,464

 
 $
(22,730
)
 
 $
3,609,217

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
14,389

 
2,193,090

 
(22,730
)
 
2,184,749

Selling, general and administrative expenses
 

 
1,094

 
485,692

 

 
486,786

Other operating expenses
 

 
245

 
405,014

 

 
405,259

Total operating expenses
 

 
15,728

 
3,083,796

 
(22,730
)
 
3,076,794

(Loss) income from operations
 

 
(245
)
 
532,668

 

 
532,423

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
180,044

 
13,007

 

 
193,051

Non-operating expenses
 
(1,439
)
 
9,462

 
(578
)
 

 
7,445

Earnings from consolidated subsidiaries
 
(208,601
)
 
(521,670
)
 

 
730,271

 

Total other (income) expense
 
(210,040
)
 
(332,164
)
 
12,429

 
730,271

 
200,496

Income (loss) before provision for income taxes
 
210,040

 
331,919

 
520,239

 
(730,271
)
 
331,927

Provision for income taxes
 

 
(123,318
)
 
1,431

 

 
(121,887
)
Net income (loss)
 
 $
210,040

 
 $
208,601

 
 $
521,670

 
 $
(730,271
)
 
 $
210,040

Condensed Consolidated Statement of Income
Nine Months Ended September 30, 2010
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
REVENUES:
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 $

 
 $
13,908

 
 $
3,151,627

 
 $
(161,708
)
 
 $
3,003,827

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 

 
13,153

 
1,860,420

 
(161,708
)
 
1,711,865

Selling, general and administrative expenses
 

 
756

 
465,184

 

 
465,940

Other operating expenses
 

 
118

 
314,327

 

 
314,445

Total operating expenses
 

 
14,027

 
2,639,931

 
(161,708
)
 
2,492,250

(Loss) income from operations
 

 
(119
)
 
511,696

 

 
511,577

OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
 
Interest expense
 

 
191,338

 
123,800

 
(116,428
)
 
198,710

Non-operating expenses
 
(1,279
)
 
(99,417
)
 
(99
)
 
116,428

 
15,633

Earnings from consolidated subsidiaries
 
(178,585
)
 
(387,995
)
 

 
566,580

 

Total other (income) expense
 
(179,864
)
 
(296,074
)
 
123,701

 
566,580

 
214,343

Income (loss) before provision for income taxes
 
179,864

 
295,955

 
387,995

 
(566,580
)
 
297,234

Provision for income taxes
 

 
(117,370
)
 

 

 
(117,370
)
Net income (loss)
 
 $
179,864

 
 $
178,585

 
 $
387,995

 
 $
(566,580
)
 
 $
179,864

Schedule of Condensed Consolidated Statements of Cash Flows
Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2011
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
 
 $
930

 
 $
(240,366
)
 
 $
993,096

 
 $

 
 $
753,660

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
 

 
(5,790
)
 
(693,835
)
 

 
(699,625
)
Purchase of investments
 
(462,289
)
 

 

 

 
(462,289
)
Proceeds from maturity of investments
 
537,500

 

 

 

 
537,500

Change in advances – affiliates
 
679,885

 
(689,633
)
 

 
9,748

 

Other investing activities, net
 

 
(64,941
)
 
(10,653
)
 

 
(75,594
)
Net cash provided by (used in) investing activities
 
755,096

 
(760,364
)
 
(704,488
)
 
9,748

 
(700,008
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Change in advances – affiliates
 
292,154

 

 
(282,406
)
 
(9,748
)
 

Change in book overdraft
 

 
14,081

 

 

 
14,081

Proceeds from debt issuance, net of discount
 

 
1,497,500

 

 

 
1,497,500

Retirement of long-term debt
 

 
(535,792
)
 

 

 
(535,792
)
Other financing activities, net
 
54,307

 
(33,296
)
 
(6,222
)
 

 
14,789

Net cash provided by (used in) financing activities
 
346,461

 
942,493

 
(288,628
)
 
(9,748
)
 
990,578

INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS
 
1,102,487

 
(58,237
)
 
(20
)
 

 
1,044,230

CASH AND CASH EQUIVALENTS, beginning of period
 
507,849

 
287,942

 
740

 

 
796,531

CASH AND CASH EQUIVALENTS, end of period
 
 $
1,610,336

 
 $
229,705

 
 $
720

 
 $

 
 $
1,840,761

Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2010
 
 
 
Parent
 
Issuer
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
 
 $
1,057

 
 $
(4,846
)
 
 $
683,180

 
 $

 
 $
679,391

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
 

 
(141,945
)
 
(405,998
)
 

 
(547,943
)
Purchase of investments
 
(537,003
)
 
(637,770
)
 

 

 
(1,174,773
)
Proceeds from maturity of investments
 
387,500

 

 

 

 
387,500

Change in advances - affiliates
 
3,497

 
428,393

 

 
(431,890
)
 

Proceeds from affiliate debt
 

 
385,664

 

 
(385,664
)
 

Issuance of affiliate debt
 

 
(543,000
)
 

 
543,000

 

Other investing activities, net
 

 
61,610

 
3,957

 

 
65,567

Net cash (used in) provided by investing activities
 
(146,006
)
 
(447,048
)
 
(402,041
)
 
(274,554
)
 
(1,269,649
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Change in book overdraft
 

 
(80,263
)
 
1,498

 

 
(78,765
)
Proceeds from debt issuance, net of discount
 

 
992,770

 

 

 
992,770

Retirement of long-term debt
 

 
(327,529
)
 

 

 
(327,529
)
Proceeds from long-term loan
 

 

 
543,000

 
(543,000
)
 

Change in advances - affiliates
 

 

 
(431,890
)
 
431,890

 

Repayment of debt
 

 
(12,000
)
 
(385,664
)
 
385,664

 
(12,000
)
Other financing activities, net
 
3,358

 
(24,250
)
 
(2,923
)
 

 
(23,815
)
Net cash provided by (used in) financing activities
 
3,358

 
548,728

 
(275,979
)
 
274,554

 
550,661

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
 
(141,591
)
 
96,834

 
5,160

 

 
(39,597
)
CASH AND CASH EQUIVALENTS,
beginning of period
 
642,089

 
269,836

 
17,456

 

 
929,381

CASH AND CASH EQUIVALENTS, end of period
 
 $
500,498

 
 $
366,670

 
 $
22,616

 
 $

 
 $
889,784

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Basis of Presentation (Details) (USD  $)
In Millions
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
FUSF, E-911, and other fees included in gross revenue  $ 16.8  $ 18.5  $ 52.3  $ 63.1
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Asset Acquisition (Details) (USD  $)
In Millions
1 Months Ended
Jun. 30, 2011
Feb. 28, 2011
Nov. 30, 2010
Oct. 31, 2010
Significant Acquisitions
Asset Acquisition, Purchase Price  $ 49.2
Asset Acquisition, Cash Payments 8 41.1
Asset Acquisition, Purchase Price Adjustment 0.5
Asset Acquisition, Acquired Property and Equipment, Amount 35.6
Asset Acquisition, Acquired Intangible Assets, Amount  $ 13.6
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Short-term Investments (Details) (USD  $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
Schedule of Available-for-sale Securities
Amortized Cost  $ 299,917  $ 374,688
Unrealized Gain in Accumulated OCI 70 180
Unrealized Loss in Accumulated OCI (6) (6)
Aggregate Fair Value 299,981 374,862
Equity securities
Schedule of Available-for-sale Securities
Amortized Cost 7 7
Unrealized Gain in Accumulated OCI 0 0
Unrealized Loss in Accumulated OCI (6) (6)
Aggregate Fair Value 1 1
U.S. Treasury securities
Schedule of Available-for-sale Securities
Amortized Cost 299,910 374,681
Unrealized Gain in Accumulated OCI 70 180
Unrealized Loss in Accumulated OCI 0 0
Aggregate Fair Value  $ 299,980  $ 374,861
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Derivative Instruments and Hedging Activities (Details) (Interest Rate Swap, USD  $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2011
Derivative
Derivatives, Expected net loss to be transferred from accumulated OCI to earnings within 12 months  $ 15.1
Designated as Hedging Instrument
Derivative
Derivative, Net Liability Position, Aggregate Fair Value 26.9
Swaps Effective February 2010
Derivative
Notional Amount of Interest Rate Derivatives 1,000
Derivative, Weighted Average Fixed Interest Rate 5.93%
Derivative, Maturity Date Feb 1, 2012
Swaps Effective February 2012
Derivative
Notional Amount of Interest Rate Derivatives 950
Derivative, Weighted Average Fixed Interest Rate 4.93%
Derivative, Maturity Date Feb 1, 2014
Swaps Effective April 2011
Derivative
Notional Amount of Interest Rate Derivatives  $ 450
Derivative, Weighted Average Fixed Interest Rate 5.24%
Derivative, Maturity Date Apr 15, 2014
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Derivative Instruments and Hedging Activities Schedule of Derivative Instruments in Statement of Financial Position (Details) (Designated as Hedging Instrument, Interest Rate Swap, USD  $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
Derivatives, Fair Value
Derivatives, net fair value  $ (26,901)  $ (8,309)
Long-term investments
Derivatives, Fair Value
Derivative asset, fair value 0 10,381
Other current liabilities
Derivatives, Fair Value
Derivative liability, fair value (15,086) (17,508)
Other long-term liabilities
Derivatives, Fair Value
Derivative liability, fair value  $ (11,815)  $ (1,182)
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Derivative Instruments and Hedging Activities Effect of Derivative Instruments on Statement of Income and Comprehenive Income (Details) (Interest Rate Swap, Cash Flow Hedging Relationships, USD  $)
In Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Interest Rate Swap | Cash Flow Hedging Relationships
Derivative Instruments, Gain (Loss)
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)  $ (15,076)  $ (5,591)  $ (35,774)  $ (22,246)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)  $ (6,424)  $ (4,663)  $ (17,182)  $ (23,904)
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Intangible Assets (Details) (USD  $)
9 Months Ended
Sep. 30, 2011
Indefinite-lived Intangible Assets Rollforward
Impairment of indefinite-lived intangible assets  $ 0
Sensitivity Analysis of Fair Value, Indefinite-Lived Intangible Assets, Impairment Impact of Adverse Change in Significant Assumptions 0
FCC Licenses
Indefinite-lived Intangible Assets Rollforward
Indefinite-lived intangible assets, beginning balance 2,500,192,000
Additions 13,579,000
Disposals 0
Indefinite-lived intangible assets, ending balance 2,513,771,000
Microwave Relocation Costs
Indefinite-lived Intangible Assets Rollforward
Indefinite-lived intangible assets, beginning balance 22,049,000
Additions 2,780,000
Disposals 0
Indefinite-lived intangible assets, ending balance  $ 24,829,000
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Long-term Debt (Details) (USD  $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
Debt Instrument
Total long-term debt  $ 4,752,714  $ 3,786,336
Unamortized discount on debt (8,862) (7,053)
Total debt 4,743,852 3,779,283
Current maturities of long-term debt (32,860) (21,996)
Long-term debt, net 4,710,992 3,757,287
Senior Secured Credit Facility
Debt Instrument
Total long-term debt 2,478,263 1,532,000
7 7/8% Senior Notes
Debt Instrument
Total long-term debt 1,000,000 1,000,000
6 5/8% Senior Notes
Debt Instrument
Total long-term debt 1,000,000 1,000,000
Capital lease obligations
Debt Instrument
Total long-term debt  $ 274,451  $ 254,336
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Long-term Debt Instruments (Details) (USD  $)
3 Months Ended 9 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2010
7 7/8% Senior Notes
Nov. 30, 2010
6 5/8% Senior Notes
Sep. 30, 2011
Term Loans - Senior Secured Credit Facility
Nov. 30, 2006
Term Loans - Senior Secured Credit Facility
Senior Secured Credit Facility - November 2006
Jul. 31, 2010
Tranche B-1 [Member]
Senior Secured Credit Facility - November 2006
May 31, 2011
Tranche B-1 [Member]
Incremental Agreement May 2011 - Senior Secured Credit Facility
Jul. 31, 2010
Tranche B-1 [Member]
Jul. 31, 2010
Tranche B-2 [Member]
Amendment July 2010 - Senior Secured Credit Facility
Mar. 31, 2011
Tranche B-2 [Member]
Amendment March 2011 - Senior Secured Credit Facility
Mar. 31, 2011
Tranche B-3 [Member]
Amendment March 2011 - Senior Secured Credit Facility
May 31, 2011
Incremental Tranche B-3 [Member]
Incremental Agreement May 2011 - Senior Secured Credit Facility
Nov. 30, 2006
Revolver - Senior Secured Credit Facility
Senior Secured Credit Facility - November 2006
Jul. 31, 2010
Revolver - Senior Secured Credit Facility
Amendment July 2010 - Senior Secured Credit Facility
Mar. 31, 2011
Revolver - Senior Secured Credit Facility
Amendment March 2011 - Senior Secured Credit Facility
Jul. 31, 2010
Amendment July 2010 - Senior Secured Credit Facility
Debt Instrument
Principal Amount  $ 1,000,000,000  $ 1,000,000,000  $ 1,600,000,000  $ 500,000,000  $ 1,000,000,000
Maturity Date Sep 1, 2018 Nov 15, 2020 Nov 3, 2013 Nov 3, 2016 Mar 17, 2018 Mar 17, 2018 Mar 17, 2016
Outstanding Principal Amended 1,000,000,000
Proceeds from Issuance 974,000,000 988,100,000 490,200,000
Debt Issuance Fees 26,000,000 11,900,000 9,800,000 8,300,000
Stated Interest Rate 7.88% 6.63%
Maximum Borrowing Capacity 1,600,000,000 100,000,000 67,500,000 100,000,000
Basis Spread on Variable Rate 2.25% 3.50% 3.82% 3.75% 3.75%
Periodic Payment - Annual Aggregate Percent of Principal 1.00%
Periodic Payment Amount 1,250,000 2,500,000
Extinguishment of Debt, Amount 535,800,000
Loss on extinguishment of debt 0 15,590,000 9,536,000 15,590,000 9,500,000 0
Net Proceeds from Issuance and Repayment of Debt 455,900,000
Weighted Average Interest Rate 5.03%
Capital Lease Obligations, Current 7,500,000 7,500,000
Capital Lease Obligations, Noncurrent  $ 267,000,000  $ 267,000,000
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Fair Value Measurements (Details) (USD  $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents  $ 1,713,379  $ 787,829
Short-term investments 299,981 374,862
Restricted cash and investments 2,576 2,876
Long-term investments 6,319 6,319
Derivative assets 10,381
Total assets measured at fair value 2,022,255 1,182,267
Derivative liabilities 26,901 18,690
Total liabilities measured at fair value 26,901 18,690
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents 1,713,379 787,829
Short-term investments 299,981 374,862
Restricted cash and investments 2,576 2,876
Long-term investments 0 0
Derivative assets 0
Total assets measured at fair value 2,015,936 1,165,567
Derivative liabilities 0 0
Total liabilities measured at fair value 0 0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents 0 0
Short-term investments 0 0
Restricted cash and investments 0 0
Long-term investments 0 0
Derivative assets 10,381
Total assets measured at fair value 0 10,381
Derivative liabilities 26,901 18,690
Total liabilities measured at fair value 26,901 18,690
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents 0 0
Short-term investments 0 0
Restricted cash and investments 0 0
Long-term investments 6,319 6,319
Derivative assets 0
Total assets measured at fair value 6,319 6,319
Derivative liabilities 0 0
Total liabilities measured at fair value  $ 0  $ 0
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Fair Value Measurements Derivatives Observable Inputs Reconciliation (Details) (Level 2, USD  $)
In Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Level 2
Derivatives Measured on a Recurring Basis, Observable Input Rollforward
Beginning Balance  $ 18,249  $ 22,273  $ 8,309  $ 24,859
Gain (loss) included in earnings 6,424 4,663 17,182 23,904
Gain (loss) included in other comprehensive income (15,076) (5,591) (35,774) (22,246)
Transfers in and/or out of Level 2 0 0 0 0
Purchases, sales, issuances, settlements 0 0 0 0
Ending Balance  $ 26,901  $ 23,201  $ 26,901  $ 23,201
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Fair Value Measurements Unobservable Inputs Reconciliation (Details) (Level 3, USD  $)
In Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Level 3
Assets Measured on Recurring Basis, Unobservable Input Rollforward
Beginning Balance  $ 6,319  $ 6,319  $ 6,319  $ 6,319
Gain (loss) included in earnings 0 0 0 0
Gain (loss) included in other comprehensive income 0 0 0 0
Transfers in and/or out of Level 3 0 0 0 0
Purchases, sales, issuances, settlements 0 0 0 0
Ending Balance  $ 6,319  $ 6,319  $ 6,319  $ 6,319
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Fair Value Measurements Fair Value Disclosure, Fair Value and Carrying Amounts (Details) (USD  $)
In Billions
Sep. 30, 2011
Dec. 31, 2010
Carrying value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Long-term Debt, Fair Value Disclosure  $ 4.5  $ 3.5
Estimated fair value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Long-term Debt, Fair Value Disclosure  $ 4.2  $ 3.5
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Net Income Per Common Share (Details) (USD  $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Basic EPS:
Net income applicable to common stock  $ 69,326  $ 77,287  $ 210,040  $ 179,864
Amount allocable to common shareholders 99.10% 99.20% 99.10% 99.20%
Rights to undistributed earnings 68,686 76,695 208,106 178,482
Weighted average shares outstanding- basic 362,019,205 353,954,532 359,763,082 353,342,910
Net income per common share - basic  $ 0.19  $ 0.22  $ 0.58  $ 0.51
Restricted common shares issued, not vested, excluded from basic net income per common share 3,400,000 2,700,000 2,700,000
Diluted EPS:
Rights to undistribued earnings  $ 68,686  $ 76,695  $ 208,106  $ 178,482
Weighted average shares outstanding- basic 362,019,205 353,954,532 359,763,082 353,342,910
Effect of dilutive securities, stock options 2,846,021 2,468,684 3,954,716 2,250,869
Weighted average shares outstanding - diluted 364,865,226 356,423,216 363,717,798 355,593,779
Net Income Per Common Share, Diluted  $ 0.19  $ 0.22  $ 0.57  $ 0.5
Stock Options [Member]
Diluted EPS:
Antidilutive securities excluded from calculation of diluted net income per common share 18,500,000 22,300,000 17,800,000 25,200,000
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Supplemental Cash Flow Information (Details) (USD  $)
9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Cash paid for interest  $ 183,728,000  $ 160,741,000
Cash paid for income taxes 4,113,000 2,359,000
Non-cash investing and financing activities
Accrued purchases of property and equipment 136,500,000 71,100,000
Assets acquired under capital lease obligations 25,000,000 23,600,000
Equipment returned for credit applicable for additional equipment 19,900,000
Noncash acquisition of intangible assets  $ 22,000,000
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Related-Party Transactions (Details) (USD  $)
In Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
Dec. 31, 2010
Related Party Transactions
Network Service Fees Included in Prepaid Expense  $ 66,763  $ 66,763  $ 50,477
Related Party Receivables in Other Current Assets 42,795 42,795 63,135
DAS Equipment Included in Property and Equipment 4,009,265 4,009,265 3,659,445
Deferred Network Service Fees Included in Other Noncurrent Assets 173,023 173,023 123,433
Payments Due to Related Parties in Accounts Payable and Accrued Expenses 476,324 476,324 521,788
Related Party Capital Lease Obligations in Current Maturities of Long-term Debt 32,860 32,860 21,996
Related Party Capital Lease Obligations in Long-term Debt 4,710,992 4,710,992 3,757,287
Deferred DAS Service Fees in Other Long Term Liabilities 92,673 92,673 72,828
Related Party Fees in Service Revenues 1,131,054 942,251 3,294,563 2,717,671
Related Party Fees in Equipment Revenue 74,334 78,538 314,654 286,156
Related Party Fees Paid in Cost of Service 382,033 313,688 1,089,480 906,508
Related Party Fees Paid in Selling, General, and Administrative Expenses 162,459 147,431 486,786 465,940
DAS Equipment Depreciation in Depreciation Expense 139,309 113,804 402,528 330,906
Related Party Capital Lease Interest Expense 69,511 65,726 193,051 198,710
Related Party Capital Lease Payments Included in Financing Activities 6,222 2,923
Affiliate
Related Party Transactions
Network Service Fees Included in Prepaid Expense 1,500 1,500 1,500
Related Party Receivables in Other Current Assets 1,000 1,000 600
DAS Equipment Included in Property and Equipment 379,300 379,300 366,400
Deferred Network Service Fees Included in Other Noncurrent Assets 8,600 8,600 9,900
Payments Due to Related Parties in Accounts Payable and Accrued Expenses 8,800 8,800 7,800
Related Party Capital Lease Obligations in Current Maturities of Long-term Debt 6,500 6,500 5,200
Related Party Capital Lease Obligations in Long-term Debt 233,900 233,900 215,400
Deferred DAS Service Fees in Other Long Term Liabilities 1,400 1,400 1,200
Related Party Fees in Service Revenues 4,000 3,400 11,400 8,500
Related Party Fees in Equipment Revenue 4,900 5,400 16,200 15,400
Related Party Fees Paid in Cost of Service 6,700 5,700 17,700 16,300
Related Party Fees Paid in Selling, General, and Administrative Expenses 600 1,200 3,200 4,000
DAS Equipment Depreciation in Depreciation Expense 8,700 6,000 27,200 17,700
Related Party Capital Lease Interest Expense 4,900 3,600 14,300 10,600
Related Party Capital Lease Payments Included in Financing Activities  $ 5,500  $ 2,300
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Guarantor Subsidiaries Schedule of Condensed Consolidated Balance Sheets (Details) (USD  $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
Sep. 30, 2010
Dec. 31, 2009
CURRENT ASSETS:
Cash and cash equivalents  $ 1,840,761  $ 796,531  $ 889,784  $ 929,381
Short-term investments 299,981 374,862
Inventories 147,002 161,049
Prepaid expenses 66,763 50,477
Advances to subsidiaries 0 0
Other current assets 195,311 210,966
Total current assets 2,549,818 1,593,885
Property and equipment, net 4,009,265 3,659,445
Long-term investments 6,319 16,700
Investment in subsidiaries 0 0
FCC licenses 2,538,600 2,522,241
Other assets 175,599 126,309
Total assets 9,279,601 7,918,580
CURRENT LIABILITIES:
Accounts payable and accrued expenses 476,324 521,788
Advances from subsidiaries 0 0
Other current liabilities 303,014 280,632
Total current liabilities 779,338 802,420
Long-term debt, net 4,710,992 3,757,287
Deferred credits 871,128 744,469
Other long-term liabilities 92,673 72,828
Total liabilities 6,454,131 5,377,004
STOCKHOLDERS' EQUITY:
Common stock 36 36
Other stockholders’ equity 2,825,434 2,541,540
Total stockholders’ equity 2,825,470 2,541,576
Total liabilities and stockholders’ equity 9,279,601 7,918,580
Parent
CURRENT ASSETS:
Cash and cash equivalents 1,610,336 507,849 500,498 642,089
Short-term investments 299,981 374,862
Inventories 0 0
Prepaid expenses 86 0
Advances to subsidiaries 0 647,701
Other current assets 77 94
Total current assets 1,910,480 1,530,506
Property and equipment, net 0 0
Long-term investments 6,319 6,319
Investment in subsidiaries 1,203,431 1,006,295
FCC licenses 0 0
Other assets 0 0
Total assets 3,120,230 2,543,120
CURRENT LIABILITIES:
Accounts payable and accrued expenses 0 0
Advances from subsidiaries 292,154 0
Other current liabilities 0 0
Total current liabilities 292,154 0
Long-term debt, net 0 0
Deferred credits 2,606 1,544
Other long-term liabilities 0 0
Total liabilities 294,760 1,544
STOCKHOLDERS' EQUITY:
Common stock 36 36
Other stockholders’ equity 2,825,434 2,541,540
Total stockholders’ equity 2,825,470 2,541,576
Total liabilities and stockholders’ equity 3,120,230 2,543,120
Issuer
CURRENT ASSETS:
Cash and cash equivalents 229,705 287,942 366,670 269,836
Short-term investments 0 0
Inventories 131,835 145,260
Prepaid expenses 694 249
Advances to subsidiaries 1,405,498 462,518
Other current assets 171,289 171,083
Total current assets 1,939,021 1,067,052
Property and equipment, net 1,462 246,249
Long-term investments 0 10,381
Investment in subsidiaries 4,516,223 3,994,553
FCC licenses 3,800 3,800
Other assets 141,951 75,085
Total assets 6,602,457 5,397,120
CURRENT LIABILITIES:
Accounts payable and accrued expenses 94,142 150,994
Advances from subsidiaries 0 0
Other current liabilities 87,753 82,684
Total current liabilities 181,895 233,678
Long-term debt, net 4,444,011 3,508,948
Deferred credits 753,756 639,766
Other long-term liabilities 19,364 8,433
Total liabilities 5,399,026 4,390,825
STOCKHOLDERS' EQUITY:
Common stock 0 0
Other stockholders’ equity 1,203,431 1,006,295
Total stockholders’ equity 1,203,431 1,006,295
Total liabilities and stockholders’ equity 6,602,457 5,397,120
Guarantor Subsidiaries
CURRENT ASSETS:
Cash and cash equivalents 720 740 22,616 17,456
Short-term investments 0 0
Inventories 15,167 15,789
Prepaid expenses 65,983 50,228
Advances to subsidiaries 0 0
Other current assets 23,945 39,789
Total current assets 105,815 106,546
Property and equipment, net 4,007,803 3,413,196
Long-term investments 0 0
Investment in subsidiaries 0 0
FCC licenses 2,534,800 2,518,441
Other assets 33,648 51,224
Total assets 6,682,066 6,089,407
CURRENT LIABILITIES:
Accounts payable and accrued expenses 382,182 370,794
Advances from subsidiaries 1,113,344 1,110,219
Other current liabilities 215,261 197,948
Total current liabilities 1,710,787 1,678,961
Long-term debt, net 266,981 248,339
Deferred credits 114,766 103,159
Other long-term liabilities 73,309 64,395
Total liabilities 2,165,843 2,094,854
STOCKHOLDERS' EQUITY:
Common stock 0 0
Other stockholders’ equity 4,516,223 3,994,553
Total stockholders’ equity 4,516,223 3,994,553
Total liabilities and stockholders’ equity 6,682,066 6,089,407
Eliminations
CURRENT ASSETS:
Cash and cash equivalents 0 0 0 0
Short-term investments 0 0
Inventories 0 0
Prepaid expenses 0 0
Advances to subsidiaries (1,405,498) (1,110,219)
Other current assets 0 0
Total current assets (1,405,498) (1,110,219)
Property and equipment, net 0 0
Long-term investments 0 0
Investment in subsidiaries (5,719,654) (5,000,848)
FCC licenses 0 0
Other assets 0 0
Total assets (7,125,152) (6,111,067)
CURRENT LIABILITIES:
Accounts payable and accrued expenses 0 0
Advances from subsidiaries (1,405,498) (1,110,219)
Other current liabilities 0 0
Total current liabilities (1,405,498) (1,110,219)
Long-term debt, net 0 0
Deferred credits 0 0
Other long-term liabilities 0 0
Total liabilities (1,405,498) (1,110,219)
STOCKHOLDERS' EQUITY:
Common stock 0 0
Other stockholders’ equity (5,719,654) (5,000,848)
Total stockholders’ equity (5,719,654) (5,000,848)
Total liabilities and stockholders’ equity  $ (7,125,152)  $ (6,111,067)
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Guarantor Subsidiaries Schedule of Condensed Consolidated Statements of Income (Details) (USD  $)
In Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Sep. 30, 2010
REVENUES:
Total revenues  $ 1,205,388  $ 1,020,789  $ 3,609,217  $ 3,003,827
OPERATING EXPENSES:
Cost of revenues 725,506 569,953 2,184,749 1,711,865
Selling, general and administrative expense 162,459 147,431 486,786 465,940
Other operating expenses 140,592 95,471 405,259 314,445
Total operating expenses 1,028,557 812,855 3,076,794 2,492,250
(Loss) income from operations 176,831 207,934 532,423 511,577
OTHER EXPENSE (INCOME):
Interest expense 69,511 65,726 193,051 198,710
Non-operating expenses (624) 15,555 7,445 15,633
Earnings from consolidated subsidiaries 0 0 0 0
Total other (income) expense 68,887 81,281 200,496 214,343
Income (loss) before provision for income taxes 107,944 126,653 331,927 297,234
Provision for income taxes (38,618) (49,366) (121,887) (117,370)
Net income 69,326 77,287 210,040 179,864
Parent
REVENUES:
Total revenues 0 0 0 0
OPERATING EXPENSES:
Cost of revenues 0 0 0 0
Selling, general and administrative expense 0 0 0 0
Other operating expenses 0 0 0 0
Total operating expenses 0 0 0 0
(Loss) income from operations 0 0 0 0
OTHER EXPENSE (INCOME):
Interest expense 0 0 0 0
Non-operating expenses (452) (456) (1,439) (1,279)
Earnings from consolidated subsidiaries (68,874) (76,831) (208,601) (178,585)
Total other (income) expense (69,326) (77,287) (210,040) (179,864)
Income (loss) before provision for income taxes 69,326 77,287 210,040 179,864
Provision for income taxes 0 0 0 0
Net income 69,326 77,287 210,040 179,864
Issuer
REVENUES:
Total revenues 4,558 4,437 15,483 13,908
OPERATING EXPENSES:
Cost of revenues 4,180 4,118 14,389 13,153
Selling, general and administrative expense 378 320 1,094 756
Other operating expenses 91 53 245 118
Total operating expenses 4,649 4,491 15,728 14,027
(Loss) income from operations (91) (54) (245) (119)
OTHER EXPENSE (INCOME):
Interest expense 64,750 63,136 180,044 191,338
Non-operating expenses (47) (24,237) 9,462 (99,417)
Earnings from consolidated subsidiaries (171,801) (165,150) (521,670) (387,995)
Total other (income) expense (107,098) (126,251) (332,164) (296,074)
Income (loss) before provision for income taxes 107,007 126,197 331,919 295,955
Provision for income taxes (38,133) (49,366) (123,318) (117,370)
Net income 68,874 76,831 208,601 178,585
Guarantor Subsidiaries
REVENUES:
Total revenues 1,208,170 1,075,390 3,616,464 3,151,627
OPERATING EXPENSES:
Cost of revenues 728,666 624,873 2,193,090 1,860,420
Selling, general and administrative expense 162,081 147,111 485,692 465,184
Other operating expenses 140,501 95,418 405,014 314,327
Total operating expenses 1,031,248 867,402 3,083,796 2,639,931
(Loss) income from operations 176,922 207,988 532,668 511,696
OTHER EXPENSE (INCOME):
Interest expense 4,761 42,899 13,007 123,800
Non-operating expenses (125) (61) (578) (99)
Earnings from consolidated subsidiaries 0 0 0 0
Total other (income) expense 4,636 42,838 12,429 123,701
Income (loss) before provision for income taxes 172,286 165,150 520,239 387,995
Provision for income taxes (485) 0 1,431 0
Net income 171,801 165,150 521,670 387,995
Eliminations
REVENUES:
Total revenues (7,340) (59,038) (22,730) (161,708)
OPERATING EXPENSES:
Cost of revenues (7,340) (59,038) (22,730) (161,708)
Selling, general and administrative expense 0 0 0 0
Other operating expenses 0 0 0 0
Total operating expenses (7,340) (59,038) (22,730) (161,708)
(Loss) income from operations 0 0 0 0
OTHER EXPENSE (INCOME):
Interest expense 0 (40,309) 0 (116,428)
Non-operating expenses 0 40,309 0 116,428
Earnings from consolidated subsidiaries 240,675 241,981 730,271 566,580
Total other (income) expense 240,675 241,981 730,271 566,580
Income (loss) before provision for income taxes (240,675) (241,981) (730,271) (566,580)
Provision for income taxes 0 0 0 0
Net income  $ (240,675)  $ (241,981)  $ (730,271)  $ (566,580)
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Guarantor Subsidiaries Schedule of Condensed Consolidated Statements of Cash Flows (Details) (USD  $)
In Thousands
9 Months Ended
Sep. 30, 2011
Sep. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities  $ 753,660  $ 679,391
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (699,625) (547,943)
Purchases of investments (462,289) (1,174,773)
Proceeds from maturity of investments 537,500 387,500
Change in advances affiliates 0 0
Proceeds from affiliate debt 0
Issuance of affiliate debt 0
Other investing activities, net (75,594) 65,567
Net cash provided by (used in) investing activities (700,008) (1,269,649)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in book overdraft 14,081 (78,765)
Proceeds from debt issuance, net of discount 1,497,500 992,770
Retirement of long-term debt (535,792) (327,529)
Proceeds from affiliate long-term loan 0
Change in advances affiliates 0 0
Repayments of debt (17,945) (12,000)
Other financing activities, net 14,789 (23,815)
Net cash provided by (used in) financing activities 990,578 550,661
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,044,230 (39,597)
CASH AND CASH EQUIVALENTS, beginning of period 796,531 929,381
CASH AND CASH EQUIVALENTS, end of period 1,840,761 889,784
Parent
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities 930 1,057
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment 0 0
Purchases of investments (462,289) (537,003)
Proceeds from maturity of investments 537,500 387,500
Change in advances affiliates 679,885 3,497
Proceeds from affiliate debt 0
Issuance of affiliate debt 0
Other investing activities, net 0 0
Net cash provided by (used in) investing activities 755,096 (146,006)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in book overdraft 0 0
Proceeds from debt issuance, net of discount 0 0
Retirement of long-term debt 0 0
Proceeds from affiliate long-term loan 0
Change in advances affiliates 292,154 0
Repayments of debt 0
Other financing activities, net 54,307 3,358
Net cash provided by (used in) financing activities 346,461 3,358
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,102,487 (141,591)
CASH AND CASH EQUIVALENTS, beginning of period 507,849 642,089
CASH AND CASH EQUIVALENTS, end of period 1,610,336 500,498
Issuer
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities (240,366) (4,846)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (5,790) (141,945)
Purchases of investments 0 (637,770)
Proceeds from maturity of investments 0 0
Change in advances affiliates (689,633) 428,393
Proceeds from affiliate debt 385,664
Issuance of affiliate debt (543,000)
Other investing activities, net (64,941) 61,610
Net cash provided by (used in) investing activities (760,364) (447,048)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in book overdraft 14,081 (80,263)
Proceeds from debt issuance, net of discount 1,497,500 992,770
Retirement of long-term debt (535,792) (327,529)
Proceeds from affiliate long-term loan 0
Change in advances affiliates 0 0
Repayments of debt (12,000)
Other financing activities, net (33,296) (24,250)
Net cash provided by (used in) financing activities 942,493 548,728
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (58,237) 96,834
CASH AND CASH EQUIVALENTS, beginning of period 287,942 269,836
CASH AND CASH EQUIVALENTS, end of period 229,705 366,670
Guarantor Subsidiaries
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities 993,096 683,180
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (693,835) (405,998)
Purchases of investments 0 0
Proceeds from maturity of investments 0 0
Change in advances affiliates 0 0
Proceeds from affiliate debt 0
Issuance of affiliate debt 0
Other investing activities, net (10,653) 3,957
Net cash provided by (used in) investing activities (704,488) (402,041)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in book overdraft 0 1,498
Proceeds from debt issuance, net of discount 0 0
Retirement of long-term debt 0 0
Proceeds from affiliate long-term loan 543,000
Change in advances affiliates (282,406) (431,890)
Repayments of debt (385,664)
Other financing activities, net (6,222) (2,923)
Net cash provided by (used in) financing activities (288,628) (275,979)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (20) 5,160
CASH AND CASH EQUIVALENTS, beginning of period 740 17,456
CASH AND CASH EQUIVALENTS, end of period 720 22,616
Eliminations
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities 0 0
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment 0 0
Purchases of investments 0 0
Proceeds from maturity of investments 0 0
Change in advances affiliates 9,748 (431,890)
Proceeds from affiliate debt (385,664)
Issuance of affiliate debt 543,000
Other investing activities, net 0 0
Net cash provided by (used in) investing activities 9,748 (274,554)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in book overdraft 0 0
Proceeds from debt issuance, net of discount 0 0
Retirement of long-term debt 0 0
Proceeds from affiliate long-term loan (543,000)
Change in advances affiliates (9,748) 431,890
Repayments of debt 385,664
Other financing activities, net 0 0
Net cash provided by (used in) financing activities (9,748) 274,554
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 0 0
CASH AND CASH EQUIVALENTS, beginning of period 0 0
CASH AND CASH EQUIVALENTS, end of period  $ 0  $ 0
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