Cricket Wireless 2012 Annual Report Download - page 67
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activation and in a subsequent month does not pay all amounts due within 30 days of the due date, the account is
disconnected and counted as churn. For Cricket Wireless customers who have elected to use BridgePay to receive
an additional seven days of service, those customers must still pay all amounts otherwise due on their account
within 30 days of the original due date or their account will also be disconnected and counted as churn. Pay-in-
advance customers who ask to terminate their service are disconnected when their paid service period ends.
Customers for our Cricket PAYGo service generally have 60 days from the date they activated their
account, were charged a daily or monthly access fee for service or last “topped-up” their account (whichever is
later) to do so again, or they will have their account suspended for a subsequent 60-day period before being
disconnected.
Customer turnover, frequently referred to as churn, is an important business metric in the
telecommunications industry because it can have significant financial effects. Because we do not require
customers to sign fixed-term contracts or pass a credit check, our service is available to a broad customer base
and, as a result, some of our customers may be more likely to have their service terminated due to an inability to
pay.
Results of Operations
Operating Items
The following tables summarize operating data for our consolidated operations (in thousands, except
percentages):
Year Ended December 31,
2012
%of
Service
Revenues 2011
%of
Service
Revenues
Change from
Prior Year
Dollars Percent
Revenues:
Service revenues ................... $2,947,457 $2,829,281 $118,176 4.2%
Equipment revenues ................. 194,884 241,850 (46,966) (19.4)%
Total revenues ................... 3,142,341 3,071,131 71,210 2.3%
Operating expenses:
Cost of service ..................... 1,034,167 35.1% 981,203 34.7% 52,964 5.4%
Cost of equipment .................. 816,226 27.7% 817,920 28.9% (1,694) (0.2)%
Selling and marketing ............... 349,970 11.9% 369,257 13.1% (19,287) (5.2)%
General and administrative ........... 348,934 11.8% 355,529 12.6% (6,595) (1.9)%
Depreciation and amortization ......... 625,596 21.2% 548,426 19.4% 77,170 14.1%
Impairments and other charges ........ 39,399 1.3% 26,770 0.9% 12,629 47.2%
Total operating expenses ........... 3,214,292 109.1% 3,099,105 109.5% 115,187 3.7%
Gain on sale, exchange or disposal of
assets, net ......................... 229,714 7.8% 2,622 0.1% 227,092 *
Operating income (loss) .............. $ 157,763 5.4% $ (25,352) (0.9)% $183,115 *
* Percentage change is not meaningful.
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