Metro PCS 2011 Annual Report Download - page 64

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our internal controls, and our independent auditors annually attest to our internal controls over financial reporting in
compliance with SOX. Material weaknesses could result in inaccurate financial statements or other disclosures or failure to
prevent fraud. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or that the degree of compliance with the policies and procedures may deteriorate.
If we fail to maintain the adequacy of our internal controls, or to successfully remediate any material weaknesses in a timely
manner, we may not comply with SOX and our independent auditors would be unable to certify as to the effectiveness of our
internal controls over financial reporting and our stock price could fall and we could be subject to investigations or sanctions by
regulatory authorities or delisting from the NYSE. Further, any material weakness or failure of our internal controls, or the
effectiveness of our internal controls, could result in a restatement of our financial statements which could also lead to a decline
in our stock price. Inadequate internal controls also could harm our reputation, cause us to lose customers, or cause investors to
lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock, all
of which 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 a material 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, changes in our business plans, 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. While the value of these licenses is determined using a market approach for purposes of
our impairment testing, those values differ from what would ultimately be realized in a sales transaction, which could be
material. Intangible assets are by their nature not readily saleable and could be subject to significant delays in their liquidation.
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, the
flexibility of options allowed for spectrum not currently used for wireless mobile broadband services, change in our business
plans, 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