Cricket Wireless 2012 Annual Report Download - page 6

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4
Leap Wireless International, Inc.
S. Douglas Hutcheson
Chief Executive Officer and Director
Leap Wireless International, Inc.
Spectrum swaps have strengthened our balance
sheet, raising nearly $120 million in 2012 while
providing us an attractive, valuable and more
focused spectrum portfolio.
IMPROVING OUR POSITION
Financially, our focus remains on increasing revenues while improving operating
efficiencies and driving cost reductions throughout the business, all with the goal of
achieving free cash flow. Last year we increased ARPU and aggressively managed
our cost structure, allowing us to deliver higher adjusted Operating Income Before
Depreciation and Amortization (OIBDA) even with fewer customers. Overall, we achieved
more than $600 million of adjusted OIBDA in 2012, up 6.9 percent year over year. Driving
free cash flow remains a top priority in the year ahead.
In October, we improved our financial position by refinancing $300 million of senior
indebtedness due in 2015 through a new $400 million senior secured term loan facility
maturing in 2019. Subsequent to the end of the year, in March 2013, we entered into
another $1,425 million senior secured term loan facility to refinance outstanding
indebtedness, lower our interest rates and further strengthen our balance sheet.
We also completed several spectrum swaps – raising nearly $120 million – to give us an
attractive, valuable and more focused spectrum portfolio. We now own wireless licenses
covering 137 million people, with holdings primarily in the AWS and PCS spectrum bands,
and currently utilize approximately 40 percent of our portfolio. In our operating markets,
we have on average about 23 megahertz (MHz) of spectrum depth. With a total of 2.2
billion MHz POPs, we believe our spectrum assets are worth approximately $3 billion.
In closing, I want to recognize our employees for being agile, dedicated and committed
to our customers in a time of change. I also want to thank our vendors – from our
high-performing dealers to our call centers and our IT partners – for maximizing our
efficiencies and positioning us to deliver stronger results in the year ahead.
As a company, we remain completely focused on creating shareholder value. We believe
we are taking the right steps by making smart investments with the highest returns,
while at the same time staying focused on improving the customer experience to drive
profitable growth. I look forward to updating you on our progress in the year ahead.
Sincerely,