Metro PCS 2010 Annual Report Download - page 121

MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2010, 2009 and 2008
F-15
Fair Values of Derivative Instruments
(in thousands) Liability Derivatives
As of December 31, 2010 As of December 31, 2009
Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives designated as hedging
instruments under ASC 815
Interest rate protection agreements Long-term investments $ 10,381 Long-term investments $ 0
Interest rate protection agreements Other current liabilities (17,508) Other current liabilities (24,157)
Interest rate protection agreements Other long-term liabilities (1,182) Other long-term liabilities (702)
Total derivatives designated as
hedging instruments under ASC
815
$ (8,309)
$ (24,859)
The Effect of Derivative Instruments on the Consolidated Statement of Income and Comprehensive Income
For the Years Ended December 31,
(in thousands)
Derivatives in ASC
815 Cash Flow
Hedging Relationships
Amount of Loss Recognized in OCI
on Derivative (Effective Portion)
Location of Loss
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
Amount of Loss Reclassified from
Accumulated OCI into Income (Effective
Portion)
2010 2009 2008 2010 2009 2008
Interest rate protection
agreements
$ (12,146) $ (24,230) $ (50,866) Interest expense $ (28,696) $ (54,334) $ (19,406)
6. Intangible Assets:
The changes in the carrying value of intangible assets during the years ended December 31, 2010 and 2009 are as
follows (in thousands):
FCC Licenses
Microwave
Relocation
Costs
Balance at Januar
y
1, 2009 .............................................................................................. $ 2,406,596 $ 16,478
Additions ............................................................................................................................ 64,879 2,160
Disposals ............................................................................................................................ (19,931) 0
Balance at December 31, 2009 ......................................................................................... $ 2,451,544 $ 18,638
Additions ............................................................................................................................ 56,451 4,183
Disposals ............................................................................................................................ (7,803) (772)
Balance at December 31, 2010 ......................................................................................... $ 2,500,192 $ 22,049
FCC licenses represent the PCS licenses acquired by the Company in the FCC auction in May 1996, the AWS
licenses acquired in FCC Auction 66, the 700 MHz license acquired in FCC Auction 73 and FCC licenses acquired
from other licensees.
The grant of the licenses by the FCC subjects the Company to certain FCC ongoing ownership restrictions.
Should the Company cease to continue to qualify under such ownership restrictions, the PCS, AWS and 700 MHz
licenses may be subject to revocation or require the payment of fines or forfeitures. Although PCS, AWS and 700
MHz licenses are issued with a stated term, ten years in the case of the PCS licenses, fifteen years in the case of the
AWS licenses and approximately ten years for 700 MHz licenses, the renewal of PCS, AWS and 700 MHz licenses
is generally a routine matter without substantial cost and the Company has determined that no legal, regulatory,
contractual, competitive, economic, or other factors exist as of December 31, 2010 that limit the useful life of its
PCS, AWS and 700 MHz licenses.
The Company participated as a bidder in FCC Auction 73, and on June 26, 2008, the Company was granted one
12 MHz 700 MHz license for a total aggregate purchase price of approximately $313.3 million. This 700 MHz
license supplements the 10 MHz of AWS spectrum previously granted to the Company in the Boston-Worcester,