Metro PCS 2011 Annual Report Download - page 65

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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 when
made, 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. For a discussion of our critical accounting policies, see “Management's Discussion and Analysis of
Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in Item 7 of this Annual Report. If
future events or assumptions differ significantly from the judgments, assumptions and estimates in our critical accounting
policies, these events or assumptions could have a material impact on our consolidated financial statements and related
disclosures.
Taxing authorities may determine we owe additional taxes relating to various matters, which could adversely affect our
financial results.
As a taxpayer, we are subject to frequent and regular audits and examinations by the Internal Revenue Service, as well as
state and local tax authorities. These tax audits and examinations may result in tax liabilities that differ materially from those
that we have recorded in our consolidated financial statements. Because the ultimate outcomes of these matters are uncertain,
we can give no assurance as to whether an adverse result from one or more of them will have a material effect on our business,
financial condition or operating results.
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 and supplemental indentures governing our
senior notes, which could further reduce the cash we have available to invest in our operations as a result of our increased debt
service obligations. In addition, the more leveraged we become, the more we, and in turn the holders of our securities, become
exposed to the risks described above in the risk factor entitled “Our operations require continued capital expenditures and a
failure to make such capital expenditures could have a material adverse effect on our business, financial condition and
operating results.”
In order to provide additional flexibility, we have filed a universal shelf registration statement with the SEC to register debt,
equity and other securities, including common stock, preferred stock, debt securities and guarantees of debt securities. The
securities registered under this universal shelf registration statement could be offered from time to time with little or no
advance notice, separately or together, directly by us or through underwriters, at amounts, prices, interest rates and other terms
and conditions to be determined at the time of any offering. There can be no assurance that sufficient funds will be available to
us under our existing indebtedness or otherwise. Further, should we need to raise additional capital, the foreign ownership
restrictions mandated by the FCC, and applicable to us, could limit our ability to attract additional equity financing outside the
United States. If we were able to obtain funds, it may not be on terms and conditions acceptable to us, which could limit or
preclude our ability to pursue new opportunities, expand our service, upgrade our networks, engage in acquisitions, or purchase
additional spectrum, thus limiting our ability to expand our business which could have a material adverse effect on our
business, financial condition and operating results.
To service our debt, we will require a significant amount of cash, which may not be available to us.
Our ability to meet our existing or future debt obligations and to reduce our indebtedness will depend on our future
performance and the other cash requirements of our business. Our performance, to a certain extent, is subject to general
economic conditions, financial, competitive, business, political, regulatory and other factors that are beyond our control. In
addition, our ability to borrow funds in the future to make payment on our debt will depend on the satisfaction of covenants in
our senior secured credit facility, the indentures and supplemental indentures governing our senior notes, other debt agreements
and other agreements we may enter into in the future. Specifically, we will need to maintain certain financial ratios and satisfy
certain financial condition tests. We cannot assure you that we will continue to generate sufficient cash flow from operations at
or above current levels or that future borrowings will be available to us under our senior secured credit facility or from other
sources in an amount sufficient to enable us to service our debt or repay all of our indebtedness in a timely manner or on
favorable or commercially reasonable terms, or at all. If we are unable to satisfy our financial covenants or generate sufficient
cash to timely repay our debt, the lenders could accelerate the maturity of some or all of our outstanding indebtedness. As a
result, we believe we may need to refinance all or a portion of our remaining existing indebtedness prior to its maturity.
Disruptions in the financial markets or the general amount of debt refinancings occurring at the same time could make it more