Cricket Wireless 2010 Annual Report Download - page 80

continues to grow. We believe that our existing unrestricted cash, cash equivalents and short-term investments,
together with cash generated from operations, provide us with sufficient liquidity to meet the future operating and
capital requirements for our current business operations, as well as our current business expansion efforts. From
time to time, we may generate additional liquidity by selling certain non-core assets or through future capital market
transactions.
Our current business expansion efforts include activities to enhance our network capacity in our existing
markets, thereby allowing us to offer our customers an even higher-quality service area. In addition, we plan to
begin deployment of next-generation LTE network technology, with a commercial trial market scheduled to be
launched in late 2011. We also plan to continue to strengthen and expand our distribution, including through the
wholesale agreement we have entered into, which permits us to offer Cricket services outside of our current network
footprint.
We currently plan to deploy LTE network technology over the next few years, and we may pursue other
activities to build our business. Future business expansion efforts could also include the launch of additional new
product and service offerings, the acquisition of additional spectrum through private transactions or FCC auctions,
the build-out and launch of new markets, entering into partnerships with others or the acquisition of other wireless
communications companies or complementary businesses. We do not intend to pursue any of these other business
expansion activities at a significant level unless we believe we have sufficient liquidity to support the operating and
capital requirements for our current business operations, our current business expansion efforts and any such other
activities.
We determine our future capital and operating requirements and liquidity based, in large part, upon our
projected financial and operating performance, and we regularly review and update these projections due to changes
in general economic conditions, our current and projected financial and operating results, the competitive landscape
and other factors. In evaluating our liquidity and managing our financial resources, we plan to maintain what we
consider to be a reasonable surplus of unrestricted cash, cash equivalents and short-term investments to be available,
if necessary, to address unanticipated variations or changes in working capital, operating and capital requirements,
and our financial and operating performance. If cash generated from operations were to be adversely impacted by
substantial changes in our projected financial and operating performance (for example, as a result of changes in
general economic conditions, increased competition in our markets, slower-than-anticipated growth or customer
acceptance of our products or services, increased churn or other factors), we believe that we could manage our
expenditures, including capital expenditures, and the pace and timing of our business expansion efforts to the extent
we deemed necessary, to match our available liquidity. Our projections regarding future capital and operating
requirements and liquidity are based upon current operating, financial and competitive information and projections
regarding our business and its financial performance. There are a number of risks and uncertainties (including the
risks to our business described above and others set forth in this report in Part I — Item 1A. under the heading
entitled “Risk Factors”) that could cause our financial and operating results and capital requirements to differ
materially from our projections and that could cause our liquidity to differ materially from the assessment set forth
above.
As of December 31, 2010, we had $2,841 million in senior indebtedness outstanding, which comprised
$250 million in aggregate principal amount of 4.5% convertible senior notes due 2014, $300 million in aggregate
principal amount of 10.0% unsecured senior notes due 2015, $45.5 million in principal amount of a non-negotiable
promissory note maturing in 2015, $1,100 million in aggregate principal amount of 7.75% senior secured notes due
2016 and $1,200 million in aggregate principal amount of 7.75% unsecured senior notes due 2020, as more fully
described below. The indentures governing Cricket’s secured and unsecured senior notes contain covenants that
restrict the ability of Leap, Cricket and their restricted subsidiaries to take certain actions, including incurring
additional indebtedness beyond specified thresholds.
Although our significant outstanding indebtedness results in certain risks to our business that could materially
affect our financial condition and performance, we believe that these risks are manageable and that we are taking
appropriate actions to monitor and address them. For example, in connection with our financial planning process
and capital raising activities, we seek to maintain an appropriate balance between our debt and equity capitalization
and we review our business plans and forecasts to monitor our ability to service our debt and to assess our capacity
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