Metro PCS 2007 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2007 Metro PCS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

– approximately 40% lower than the average CPU of the national wireless carriers.
With our industry leading low cost structure, we have also generated superior
Adjusted EBITDA growth while maintaining stable Average Revenue Per User
(ARPU). For a discussion of defined terms and GAAP reconciliation, see
“Managements Discussion and Analysis” in the annual report on Form-10K included
herein.
As we continue to grow, we remain focused on balancing this growth with profitability.
For this reason, we actively monitor and manage our Cost Per Gross Addition
(CPGA). We reported consolidated CPGA of approximately $124 for the full year
2007. This is nearly two thirds lower than the average CPGA of the national wireless
carriers.
With our unlimited service plans and laser-focus on managing costs to maintain a low
CPU and CPGA, we are proud to say that we have profitability characteristics similar
to the largest national wireless carriers in the industry. Our 2007 average monthly
Core Market Adjusted EBITDA was $22 per subscriber. Our full year Core Market
Adjusted EBITDA margin was 46%. On a consolidated basis, we reported average
monthly Adjusted EBITDA of nearly $16 per subscriber and a margin of approximately
35%. Over time, as markets mature, we believe our consolidated Adjusted EBITDA
per subscriber as well as our consolidated Adjusted EBITDA margin will continue to
improve.
Continued customer penetration within our Core Markets is also an important part of
the growth of our business, and at the end of 2007, we reported Core Market
penetration of 11.3%, representing a year-over-year gain of approximately 1.1%. We
are pleased to see that growth in our Core Markets continues to be robust. After
passing the 1 million subscriber milestone in our Expansion Markets during the
second quarter, we recorded over 100% subscriber growth for the full year 2007,
resulting in customer penetration of approximately 4.3%.
Reflecting on the past year, 2007 was an exciting and groundbreaking time for
MetroPCS for a number of reasons, some which I’d like to outline in more detail:
First, our strong growth and expansion since 2002 culminated with the successful
completion our Initial Public Offering in April of 2007. In June 2007, we completed an
additional Senior Notes offering, resulting in additional capital that further
strengthened our balance sheet. It is important to note that we have a fully funded
business plan which is of critical importance given current debt and equity market
conditions. We continue to invest in building and expanding our network and
launching service in new markets.
In September of 2007, we launched service in Los Angeles, our largest market to
date. This launch required months of hard work and planning and I am proud of the
results we have seen. After launching service with approximately 11 million covered
POPs, the system has continued to be aggressively expanded and we expect our