Metro PCS 2008 Annual Report Download - page 91

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9¼% Senior Notes Due 2014
On November 3, 2006, Wireless consummated the sale of $1.0 billion principal amount of its initial senior notes.
On June 6, 2007, Wireless consummated the sale of an additional $400.0 million principal amount of additional
notes. The initial senior notes and the additional notes are referred to together as the 9¼% senior notes. The
9¼% senior notes are unsecured obligations and are guaranteed by MetroPCS Communications, Inc., MetroPCS,
Inc., and all of Wireless direct and indirect wholly-owned domestic restricted subsidiaries, but are not guaranteed by
Royal Street. Interest is payable on the initial senior notes on May 1 and November 1 of each year, beginning with
May 1, 2007, with respect to the initial senior notes, and beginning on November 1, 2007 with respect to the
additional notes. Wireless may, at its option, redeem some or all of the 9¼% senior notes at any time on or after
November 1, 2010 for the redemption prices set forth in the indenture governing the 9¼% senior notes. In addition,
Wireless may also redeem up to 35% of the aggregate principal amount of the 9¼% senior notes with the net cash
proceeds of certain sales of equity securities, including the sale of common stock.
On January 14, 2009, Wireless completed the sale of the new notes at a price equal to 89.50% of the principal
amount of such new notes. On January 20, 2009, Wireless consummated the sale of the new notes resulting in net
proceeds of $480.5 million. The net proceeds from the sale of the new notes will be used for general corporate
purposes which could include working capital, capital expenditures, future liquidity needs, additional opportunistic
spectrum acquisitions, corporate development opportunities and future technology initiatives. The new notes are
unsecured obligations and are guaranteed by MetroPCS, MetroPCS, Inc., and all of Wireless’ direct and indirect
wholly-owned subsidiaries, but are not guaranteed by Royal Street. Interest is payable on the new notes on May 1
and November 1 of each year, beginning on May 1, 2009.
Capital Lease Obligations
We have entered into various non-cancelable DAS capital lease agreements, with expirations through 2024,
covering dedicated optical fiber. Assets and future obligations related to capital leases are included in the
accompanying consolidated balance sheet in property and equipment and long-term debt, respectively. Depreciation
of assets held under capital lease obligations is included in depreciation and amortization expense.
Capital Expenditures and Other Asset Acquisitions and Dispositions
Capital Expenditures. We and Royal Street currently expect to incur capital expenditures in the range of $0.7
billion to $0.9 billion on a consolidated basis for the year ending December 31, 2009. We plan to focus on building
out networks to cover approximately 40 million of total population during 2009-2010, including the launch of the
Boston and New York metropolitan areas in February 2009.
During the year ended December 31, 2008, we and Royal Street incurred $954.6 million in capital expenditures.
These capital expenditures were primarily for the expansion and improvement of our existing network infrastructure
and costs associated with the construction of new markets.
During the year ended December 31, 2007, we and Royal Street incurred $767.7 million in capital expenditures.
These capital expenditures were primarily for the expansion and improvement of our existing network infrastructure
and costs associated with the construction of new markets.
During the year ended December 31, 2006, we had $550.7 million in capital expenditures. These capital
expenditures were primarily for the expansion and improvement of our existing network infrastructure and costs
associated with the construction of new markets.
Other Acquisitions and Dispositions. On November 29, 2006, we were granted AWS licenses as a result of FCC
Auction 66, for a total aggregate purchase price of approximately $1.4 billion.
On December 21, 2007, we executed an agreement with PTA Communications, Inc., or PTA, to purchase 10
MHz of PCS spectrum from PTA for the basic trading area of Jacksonville, Florida. We also entered into
agreements with NTCH, Inc. (dba Cleartalk PCS) and PTA-FLA, Inc. for the purchase of certain of their assets used
in providing PCS wireless telecommunications services in the Jacksonville market. On January 17, 2008, we closed
on the acquisition of the assets and paid a total of $18.6 million in cash for these assets, exclusive of transaction
costs. On May 13, 2008, we closed on the purchase of the 10 MHz of spectrum from PTA for the basic trading area
of Jacksonville, Florida for consideration of $6.5 million in cash.