Metro PCS 2008 Annual Report Download - page 137

MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2008, 2007 and 2006
F-35
Year Ended December 31, 2007
Core
Markets
Expansion
Markets Other Total
Service revenues ....................................................................... $ 1,414,917 $ 504,280 $ — $ 1,919,197
Equipment revenues.................................................................. 220,364 96,173 — 316,537
Total revenues........................................................................... 1,635,281 600,453 — 2,235,734
Cost of service(1)...................................................................... 439,162 208,348 — 647,510
Cost of equipment..................................................................... 385,100 212,133 — 597,233
Selling, general and administrative expenses(2)....................... 167,542 184,478 — 352,020
Adjusted EBITDA(3)................................................................ 654,112 12,883 —
Depreciation and amortization.................................................. 117,344 53,851 7,007 178,202
(Gain) loss on disposal of assets ............................................... (3,061
)
461 3,255 655
Stock-based compensation expense.......................................... 10,635 17,389 — 28,024
Income (loss) from operations .................................................. 529,194 (58,818) (10,262) 460,114
Interest expense ........................................................................ — — 201,746 201,746
Accretion of put option in majority-owned subsidiary.............. — — 1,003 1,003
Interest and other income.......................................................... — — (63,936) (63,936)
Impairment loss on investment securities ................................. — — 97,800 97,800
Income (loss) before provision for income taxes...................... 529,194 (58,818) (246,875) 223,501
Capital expenditures ................................................................. 220,490 436,567 110,652 767,709
Total assets ............................................................................... 1,064,384 2,883,832 1,857,914 5,806,130
Year Ended December 31, 2006
Core
Markets
Expansion
Markets Other Total
Service revenues ....................................................................... $ 1,138,019 $ 152,928 $ — $ 1,290,947
Equipment revenues.................................................................. 208,333 47,583 — 255,916
Total revenues........................................................................... 1,346,352 200,511 — 1,546,863
Cost of service(1)...................................................................... 338,923 106,358 — 445,281
Cost of equipment..................................................................... 364,281 112,596 — 476,877
Selling, general and administrative expenses(2)....................... 158,100 85,518 — 243,618
Adjusted EBITDA (deficit)(3).................................................. 492,773 (97,214) —
Depreciation and amortization.................................................. 109,626 21,941 3,461 135,028
Loss on disposal of assets ......................................................... 8,313 485 8 8,806
Stock-based compensation expense.......................................... 7,725 6,747 — 14,472
Income (loss) from operations .................................................. 367,109 (126,387) (3,469) 237,253
Interest expense ........................................................................ — — 115,985 115,985
Accretion of put option in majority-owned subsidiary.............. — — 770 770
Interest and other income.......................................................... — — (21,543) (21,543)
Loss on extinguishment of debt ................................................ — — 51,518 51,518
Income (loss) before provision for income taxes...................... 367,109 (126,387) (150,199) 90,523
Capital expenditures ................................................................. 217,215 314,308 19,226 550,749
Total assets(4)........................................................................... 945,699 1,064,243 2,143,180 4,153,122
_____________________________
(1) Cost of service includes stock-based compensation expense disclosed separately. For the years ended December 31, 2008, 2007 and 2006,
cost of service includes $2.9 million, $1.8 million and $1.3 million, respectively, of stock-based compensation expense.
(2) Selling, general and administrative expenses include stock-based compensation expense disclosed separately. For the years ended
December 31, 2008, 2007 and 2006, selling, general and administrative expenses include $38.2 million, $26.2 million and $13.2 million,
respectively, of stock-based compensation expense.
(3) Adjusted EBITDA (deficit) is presented in accordance with SFAS No. 131 as it is the primary financial measure utilized by management
to facilitate evaluation of each segments’ ability to meet future debt service, capital expenditures and working capital requirements and to
fund future growth.
(4) Total assets as of December 31, 2006 include the Auction 66 AWS licenses that the Company was granted on November 29, 2006 for a
total aggregate purchase price of approximately $1.4 billion. These AWS licenses are presented in the “Other” column as the Company
had not allocated the Auction 66 licenses to its reportable segments as of December 31, 2006. As of December 31, 2008 and 2007, the
Auction 66 AWS licenses are included in Expansion Markets total assets.