Metro PCS 2009 Annual Report Download - page 99

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87
The following table shows the calculation of our consolidated Adjusted EBITDA, as defined in our senior secured
credit facility, for the years ended December 31, 2007, 2008 and 2009.
Year Ended December 31,
2009 2008 2007
(In Thousands)
Calculation of Consolidated Adjusted EBITDA:
Net income............................................................................................................ $ 176,844 $ 149,438 $ 100,403
Adjustments:
Depreciation and amortization............................................................................. 377,856 255,319 178,202
(Gain) loss on disposal of assets .......................................................................... (4,683) 18,905 655
Stock-based compensation expense(1) ................................................................ 47,783 41,142 28,024
Interest expense ................................................................................................... 270,285 179,398 201,746
Accretion of put option in majority-owned subsidiary(1).................................... 1,567 1,258 1,003
Interest and other income..................................................................................... (2,629) (23,170) (63,936)
Impairment loss on investment securities ............................................................ 2,386 30,857 97,800
Provision for income taxes................................................................................... 86,835 129,986 123,098
Consolidated Adjusted EBITDA ....................................................................... $ 956,244 $ 783,133 $ 666,995
_______________________
(1) Represents a non-cash expense, as defined by our senior secured credit facility.
In addition, for further information, the following table reconciles consolidated Adjusted EBITDA, as defined in
our senior secured credit facility, to cash flows from operating activities for the years ended December 31, 2007,
2008 and 2009.
Year Ended December 31,
2009 2008 2007
(In Thousands)
Reconciliation of Net Cash Provided by Operating Activities to
Consolidated Adjusted EBITDA:
Net cash provided by operating activities ............................................................. $ 899,349 $ 447,490 $ 589,306
Adjustments:
Interest expense ................................................................................................... 270,285 179,398 201,746
Non-cash interest expense.................................................................................... (11,309) (2,550) (3,259)
Interest and other income..................................................................................... (2,629) (23,170) (63,936)
Provision for uncollectible accounts receivable................................................... (199) (8) (129)
Deferred rent expense.......................................................................................... (24,222) (20,646) (13,745)
Cost of abandoned cell sites................................................................................. (8,286) (8,592) (6,704)
Accretion of asset retirement obligation .............................................................. (5,111) (3,542) (1,439)
Gain on sale and maturity of investments............................................................ 644 — 10,506
Provision for income taxes................................................................................... 86,835 129,986 123,098
Deferred income taxes ......................................................................................... (110,161) (124,347) (118,524)
Changes in working capital.................................................................................. (138,952) 209,114 (49,925)
Consolidated Adjusted EBITDA ....................................................................... $ 956,244 $ 783,133 $ 666,995
Operating Activities
Cash provided by operating activities increased approximately $451.9 million to approximately $899.3 million
during the year ended December 31, 2009 from $447.5 million for the year ended December 31, 2008. The increase
was primarily attributable to an increase in cash flows from working capital changes and an increase in net income
during the year ended December 31, 2009 compared to the same period in 2008.
Cash provided by operating activities decreased $141.8 million to $447.5 million during the year ended
December 31, 2008 from $589.3 million for the year ended December 31, 2007. The decrease was primarily
attributable to a decrease in working capital during the year ended December 31, 2008 compared to the same period
in 2007, partially offset by an approximately 49% increase in net income as a result of the growth experienced over
the last twelve months.
Cash provided by operating activities increased $224.5 million to $589.3 million during the year ended
December 31, 2007 from $364.8 million for the year ended December 31, 2006. The increase was primarily
attributable to an 87% increase in net income as well as a 266% increase in deferred income taxes during the year
ended December 31, 2007 compared to the same period in 2006.