Metro PCS 2011 Annual Report Download - page 67

56
Our substantial debt service obligations could have important material consequences to you, including the following:
• limiting our ability to borrow money or sell stock to fund working capital, capital expenditures, debt service
requirements, acquisitions, technological initiatives and other general corporate purposes;
• making it more difficult for us to make payments on our indebtedness;
• increasing our vulnerability to general economic downturns and industry conditions and limiting our ability to
withstand competitive pressure;
• limiting our flexibility in planning for, or reacting to, changes in our business or the telecommunications industry;
• limiting our ability to increase our capital expenditures to roll out new services or to upgrade our networks to new
technologies;
• limiting our ability to purchase additional spectrum or develop new metropolitan areas in the future;
• reducing the amount of cash available for working capital needs, capital expenditures for existing and new markets
and other corporate purposes by requiring us to dedicate a substantial portion of our cash flow from operations to the
payment of principal of, and interest on, our indebtedness; and
• placing us at a competitive disadvantage to our competitors who are less leveraged than we are.
Any of these risks could impair our ability to fund our operations or limit our ability to expand our business as planned,
which could have a material adverse effect on our business, financial condition, and operating results. In addition, a substantial
portion of our debt, including borrowings under our senior secured credit facility, bears interest at variable rates. If market
interest rates increase, variable-rate debt will create higher debt service requirements, which could adversely affect our cash
flow. While we have and may enter into agreements limiting our exposure to higher interest rates in the future, any such
agreements may not offer complete protection from this risk, and any portion not subject to such agreements would have full
exposure to higher interest rates.
Settlements, judgments, restraints on our current or future manner of doing business or legal costs resulting from
pending or future litigation could have an adverse effect on our business, financial condition, and operating results.
We are regularly involved in a number of legal proceedings before various state and federal courts, the FCC, and state and
local regulatory agencies. Such legal proceedings can be complex, costly, protracted and highly disruptive to business
operations by diverting the attention and energies of management and other key personnel. Also, changes in the law or legal
interpretations can affect the outcome of existing rules. The assessment of the outcome of legal proceedings, including our
potential liability, if any, is a highly subjective process that requires judgments about future events that are not within our
control. The outcome of litigation, including amounts ultimately received or paid upon settlement or other resolution of
litigation and other contingencies may differ materially from amounts accrued in the financial statements. In addition, litigation
or similar proceedings could impose restraints on our current or future manner of doing business. Further, litigation could be
costly to defend, divert management's attention from our business, and could subject us to substantial liability. Such potential
outcomes could have a material adverse effect on our business financial condition, of operating results, or ability to do
business. We believe that any losses in excess of the amounts we accrue for such potential liability are remote, but as litigation
is uncertain and any outcome thereof is uncertain, there is the potential for a material adverse effect on our business, financial
condition and operating results as a result of one or more proceedings being resolved in a particular period in an amount in
excess of that accrued by us.
A portion of the voting power of our common stock is concentrated in limited number of stockholders, and their interests
may be different from yours.
A certain portion of the voting power of our capital stock is concentrated in the hands of a few stockholders some of which
also have representatives who are members of our board of directors. As a result, if such persons act together, they may have
the ability to significantly influence whether required consents can be obtained and may have substantial control over all
matters submitted to our stockholders for approval, including the election and removal of directors, changes in our capital
structure, governance, stockholder approvals and the approval of any merger, consolidation or sales of all or substantially all of
our assets. These stockholders may have different interests than the other holders of our common stock and may make
decisions that are adverse to your interests.