Cricket Wireless 2011 Annual Report Download - page 37

costs. Our failure to effectively manage and integrate STX Wireless or other new partnerships that we may enter
into or companies or businesses that we could acquire could have a material adverse effect on our business,
financial condition and results of operations.
Our Significant Indebtedness Could Adversely Affect Our Financial Health and Prevent Us From
Fulfilling Our Obligations.
We have now and will continue to have a significant amount of indebtedness. As of December 31, 2011, our
total outstanding indebtedness was $3,220.7 million, including $250 million in aggregate principal amount of
convertible senior notes due 2014, $300 million in aggregate principal amount of senior notes due 2015, $21.9
million in principal amount of a non-negotiable promissory note maturing in 2015, $1,100 million in aggregate
principal amount of senior secured notes due 2016 and $1,600 million in aggregate principal amount of senior
notes due 2020.
Our significant indebtedness could have material consequences. For example, it could:
• make it more difficult for us to service all of our debt obligations;
• increase our vulnerability to general adverse economic and industry conditions;
• impair our ability to obtain additional financing in the future for working capital needs, capital
expenditures, network build-out and other activities, including acquisitions and general corporate
purposes;
• require us to dedicate a substantial portion of our cash flows from operations to the payment of principal
and interest on our indebtedness, thereby reducing the availability of our cash flows to fund working
capital needs, capital expenditures, acquisitions and other general corporate purposes;
• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we
operate; and
• place us at a disadvantage compared to our competitors that have less indebtedness.
Any of these risks could impact our ability to fund our operations or limit our ability to expand our business,
which could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, any significant capital expenditures or increased operating expenses associated with the launch of
new product or service offerings or other business investment initiatives will decrease operating income before
depreciation and amortization, or OIBDA, and free cash flow for the periods in which we incur such costs,
increasing the risk that we may not be able to service our indebtedness.
Despite Current Indebtedness Levels, We May Incur Additional Indebtedness. This Could Further
Increase the Risks Associated with Our Leverage.
The terms of the indentures governing Cricket’s secured and unsecured senior notes permit us, subject to
specified limitations, to incur additional indebtedness, including secured indebtedness. The indenture governing
Leap’s convertible senior notes does not limit our ability to incur debt.
We may incur additional indebtedness in the future, as market conditions permit, to enhance our liquidity
and to provide us with additional flexibility to pursue business investment initiatives, which could consist of debt
financing from the public and/or private capital markets. To provide flexibility with respect to any future capital
raising alternatives, we filed a universal shelf registration statement with the SEC to register various debt, equity
and other securities, including debt securities, common stock, preferred stock, depository shares, rights and
warrants. The securities under this registration statement may be offered from time to time, separately or
together, directly by us or through underwriters, at amounts, prices, interest rates and other terms to be
determined at the time of any offering. This universal shelf registration statement is scheduled to expire in March
2012, and we expect to file a similar registration statement in the near future to register various debt, equity and
other securities.
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