Metro PCS 2010 Annual Report Download - page 127

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MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2010, 2009 and 2008
F-21
The estimated fair values of the Company’s financial instruments are as follows (in thousands):
December 31, 2010 December 31, 2009
Carrying
Amount Fair Value
Carrying
Amount Fair Value
Senior Secured Credit Facility ...........................................................
.
$ 1,532,000 $ 1,535,059 $ 1,548,000 $ 1,470,600
9¼% Senior Notes .............................................................................
.
0 0 1,950,000 1,979,250
7Ǭ% Senior Notes .............................................................................
.
992,947 1,032,500 0 0
6з% Senior Notes .............................................................................
.
1,000,000 955,000 0 0
Cash flow hedging derivative liabilities ............................................
.
18,690 18,690 24,859 24,859
Cash flow hedging derivative assets ..................................................
.
10,381 10,381 0 0
Short-term investments ......................................................................
.
374,862 374,862 224,932 224,932
Long-term investments ......................................................................
.
6,319 6,319 6,319 6,319
Although the Company has determined the estimated fair value amounts using available market information and
commonly accepted valuation methodologies, considerable judgment is required in interpreting market data to
develop fair value estimates. The fair value estimates are based on information available at December 31, 2010 and
2009 and have not been revalued since those dates. As such, the Company’s estimates are not necessarily indicative
of the amount that the Company, or holders of the instruments, could realize in a current market exchange and
current estimates of fair value could differ significantly.
10. Concentrations:
The Company purchases a substantial portion of its wireless infrastructure equipment and handset equipment
from only a few major suppliers. Further, the Company generally relies on one or two key vendors in each of the
following areas: network infrastructure equipment, billing services, payment services, customer care, handset
logistics and long distance services. Loss of any of these suppliers could adversely affect operations temporarily
until a comparable substitute could be found.
Local and long distance telephone and other companies provide certain communication services to the Company.
Disruption of these services could adversely affect operations in the short term until an alternative
telecommunication provider was found.
Concentrations of credit risk with respect to trade accounts receivable are limited due to the diversity of the
Company’s indirect retailer base.
11. Commitments and Contingencies:
The Company has entered into pricing agreements with various handset manufacturers for the purchase of
wireless handsets at specified prices. The terms of these agreements expire on June 30, 2011. The total aggregate
commitment outstanding under these pricing agreements is $9.4 million.
Operating and Capital Leases
The Company has entered into non-cancelable operating lease agreements to lease facilities, certain equipment
and sites for towers and antennas required for the operation of its wireless networks. Total rent expense for the years
ended December 31, 2010, 2009 and 2008 was $325.1 million, $281.2 million and $199.1 million, respectively.
The Company entered into various non-cancelable distributed antenna systems (“DAS”) capital lease agreements,
with varying expiration terms through 2025.
Future annual minimum rental payments required for all non-cancelable operating and capital leases at
December 31, 2010 are as follows (in thousands):