Metro PCS 2010 Annual Report Download - page 65

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could have a material adverse effect on our business, financial condition and operating results. Any restatement of
our financial statements could have adverse consequences, including the triggering of an event of default under our
senior secured credit facility and the indentures and supplemental indentures governing our senior notes, our credit
rating could be downgraded, which could result in an increase in our borrowing costs and make it more difficult to
borrow funds on reasonable terms or at all, the NYSE could begin delisting proceedings, and we could have
stockholder litigation or SEC enforcement action, all of which could have an adverse effect on our business,
financial condition and operating results.
The value of our FCC licenses may drop in the future as a result of volatility in the marketplace and the sale of
additional spectrum by the FCC.
The market value of FCC licenses has been subject to significant volatility in the past and the value of our licenses
may continue to fluctuate based on market conditions, the availability of spectrum, whether through consolidation in
the industry, by FCC regulatory action or auction, the availability of buyers and sellers, and the inability to ascertain
the value of any license due to such volatility. The impact of the availability of spectrum from any future actions and
auctions on license values is uncertain. There can be no assurance of the market value of our FCC licenses or that
the market value of our FCC licenses will not be volatile in the future, whether as a result of consolidation in the
industry, the sale of spectrum by one or more carriers or an FCC auction. If the value of our licenses was to decline
significantly, we could be forced to record non-cash impairment charges that could impact our ability to borrow
additional funds. A significant impairment loss could have a material adverse effect on our net income and on the
carrying value of our licenses on our balance sheet, which could have a material adverse effect on our business,
financial condition and operating results.
Declines in our operating performance could ultimately result in an impairment of our indefinite-lived assets,
including FCC licenses, or our long-lived assets, including property and equipment.
We assess potential impairments to our long-lived assets, including property and equipment and certain intangible
assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be
recoverable. We assess potential impairments to indefinite-lived intangible assets, including FCC licenses, annually
and when there is evidence that events or changes in circumstances indicate that an impairment condition may exist.
The estimation of fair values or carrying values requires assumptions by management about factors that are highly
uncertain and possibly volatile, including future cash flow, stock prices, discount rates and other factors. If adverse
economic conditions, poor consumer confidence, reduced consumer spending, volatile and decreasing stock prices,
including our stock, continues for a period of time or we do not achieve our planned operating results, these factors
may ultimately result in a non-cash impairment charge related to our long-lived assets and/or our indefinite-lived
intangible assets. A significant impairment loss could have a material adverse effect on our operating results and on
the carrying value of our FCC licenses and/or our long-lived assets on our balance sheet, which could have a
material adverse effect on our business, financial condition and operating results.
Changes in interpretations of accounting requirements, changes in industry practice, the identification of
errors or changes in management assumptions could require amendments to or restatements of financial
information or disclosures included in this or prior filings with the SEC.
We prepare our consolidated financial statement in accordance with GAAP and file such financial statements with
the SEC in accordance with the SEC’s rules and regulations. The preparation of financial statements requires our
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. We base our estimates on historical experience, our perceptions
of historical trends, current conditions, expected future developments and other various assumptions and information
that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities. Actual results may differ from estimates under different
assumptions or conditions. Changes in accounting requirements or in guidance or interpretations related to such
requirements, changes in industry practice, the identification of errors or changes in estimates or assumptions could
require restatements of financial information or amendments to disclosures included in this or prior filings with the
SEC.
Even with our current levels of indebtedness, we may incur additional indebtedness.
The terms of the agreements governing our long-term indebtedness, subject to specified limitations, allow for the
incurrence of additional indebtedness by us and our subsidiaries. Although we have substantial indebtedness, we
may still be able to incur significantly more debt under our senior secured credit facility and our indentures