Metro PCS 2011 Annual Report Download - page 119

MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
F-13
Recent Accounting Pronouncements
In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement - Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs," addressing how to measure fair value and what
disclosures to provide about fair value measurements. This amendment is largely consistent with the existing GAAP guidance,
but aligned the international guidance and eliminated unnecessary wording differences between GAAP and International
Financial Reporting Standards ("IFRS"). The amendment is effective for interim and annual periods beginning after December
15, 2011, and should be applied prospectively. The implementation of this standard will not affect the Company's financial
condition, results of operations, or cash flows.
In June 2011, the FASB issued ASU 2011-05 "Statement of Comprehensive Income," which revises the manner in which
entities present comprehensive income in their financial statements, requiring entities to report components of comprehensive
income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The
amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011 and
should be applied retrospectively. The implementation of this standard will not affect the Company's financial condition, results
of operations, or cash flows.
3. Asset Acquisition:
In October 2010, the Company entered into an asset purchase agreement to acquire 10 MHz of AWS spectrum and certain
related network assets adjacent to the Northeast metropolitan areas for a total purchase price of $49.2 million. In November
2010, the Company closed on the acquisition of the network assets and paid a total of $41.1 million in cash. In February 2011,
the Company closed on the acquisition of the 10 MHz of AWS spectrum and paid $8.0 million in cash. In June 2011, the
Company completed its final settlement of costs and received $0.5 million in cash as reimbursement for pre-acquisition
payments made on behalf of the seller. The Company used the relative fair values of the assets acquired to allocate the
purchase price, of which $35.6 million was allocated to property and equipment and $13.6 million was allocated to FCC
licenses.
4. Short-term Investments:
Short-term investments, with an original maturity of over 90 days, consisted of the following (in thousands):
As of December 31, 2011
Amortized
Cost
Unrealized
Gain in
Accumulated
OCI
Unrealized
Loss in
Accumulated
OCI
Aggregate
Fair
Value
Equity securities $ 7 $ — $ (6) $ 1
U.S. Treasury securities 299,939 32 — 299,971
Total short-term investments $ 299,946 $ 32 $ (6) $ 299,972
As of December 31, 2010
Amortized
Cost
Unrealized
Gain in
Accumulated
OCI
Unrealized
Loss in
Accumulated
OCI
Aggregate
Fair
Value
Equity securities $ 7 $ — $ (6) $ 1
U.S. Treasury securities 374,681 180 — 374,861
Total short-term investments $ 374,688 $ 180 $ (6) $ 374,862
5. Derivative Instruments and Hedging Activities:
In March 2009, MetroPCS Wireless, Inc. (“Wireless”) entered into three separate two-year interest rate protection
agreements to manage the Company’s interest rate risk exposure under Wireless’ senior secured credit facility, as amended (the
“Senior Secured Credit Facility”). These agreements were effective on February 1, 2010 and cover a notional amount of $1.0
billion and effectively convert this portion of Wireless’ variable rate debt to fixed rate debt at a weighted average annual rate of
5.927%. These agreements expired on February 1, 2012.