Cricket Wireless 2012 Annual Report Download - page 37

new product or service offerings or other business investment initiatives will decrease 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.
In addition, we cannot guarantee that we will be able to refinance all or any portion of our indebtedness
prior to its maturity. We currently expect that we will need to refinance all or substantially all of our $1.1 billion
of senior secured notes due 2016 before they mature. If we are unable to repay or refinance our indebtedness as
planned, we will likely be required to take additional actions to generate liquidity such as delaying or reducing
capital expenditures, reducing operating expenses, selling assets or seeking additional equity capital. There can
be no assurance, however, that we will be able to obtain sufficient funds to enable us to repay or refinance any of
our indebtedness on commercially reasonable terms or at all.
Despite Current Indebtedness Levels, We May Incur Additional Indebtedness, Which Could Further
Increase the Risks Associated with Our Leverage.
The terms of our Credit Agreement, and 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 credit or capital markets. If new indebtedness is added to our current
levels of indebtedness, the related risks that we now face could intensify. In addition, depending on the timing
and extent of any additional indebtedness that we could incur and our then-current consolidated leverage ratio,
such additional amounts could potentially result in the issuance of adverse credit ratings affecting us and/or our
outstanding indebtedness. Any future adverse credit ratings could make it more difficult or expensive for us to
borrow in the future and could affect the trading prices of our secured and unsecured senior notes, our convertible
senior notes and our common stock.
Covenants in Our Credit Agreement and Indentures or in Credit Agreements or Indentures That We May
Enter into in the Future May Limit Our Ability to Operate Our Business.
Our Credit Agreement and the indentures governing Cricket’s secured and unsecured senior notes contain
covenants that restrict the ability of Leap, Cricket and their restricted subsidiaries to make distributions or other
payments to our investors or subordinated creditors unless we satisfy certain financial tests or other criteria. In
addition, our Credit Agreement and indentures include covenants restricting, among other things, the ability of
Leap, Cricket and their restricted subsidiaries to:
• incur additional indebtedness;
• create liens or other encumbrances;
• place limitations on distributions from restricted subsidiaries;
• pay dividends, make investments, prepay subordinated indebtedness or make other restricted payments;
• issue or sell capital stock of restricted subsidiaries;
• issue guarantees;
• sell or otherwise dispose of all or substantially all of our assets;
• enter into transactions with affiliates; and
• make acquisitions or merge or consolidate with another entity.
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