Metro PCS 2011 Annual Report Download - page 93

82
investments is due to various financing activities as detailed below. We believe that, based on our current level of cash, cash
equivalents and short-term investments, and our anticipated cash flows from operations, we have adequate liquidity, cash flow
and financial flexibility to fund our operations for the near-term.
In July 2010, Wireless entered into an Amendment and Restatement and Resignation and Appointment Agreement, or the
Amendment, which amended and restated the senior secured credit facility to, among other things, extend the maturity of $1.0
billion of existing term loans, or Tranche B-2 Term Loans, under the senior secured credit facility to November 2016 as well as
increase the interest rate to LIBOR plus 3.50% on the extended portion only and reduce the revolving credit facility from
$100.0 million to $67.5 million.
In September 2010, Wireless completed the sale of $1.0 billion of principal amount of 7 7/8% Senior Notes due 2018, or
the 7 7/8% Senior Notes. The net proceeds from the sale of the 7 7/8% Senior Notes were $974.0 million. Net proceeds from the
sale of the 7 7/8% Senior Notes were used to redeem a portion of the outstanding 9 1/4% Senior Notes.
In November 2010, Wireless completed the sale of $1.0 billion of principal amount of 6 5/8% Senior Notes due 2020, or
the 6 5/8% Senior Notes. The net proceeds of the sale of the 6 5/8% Senior Notes were $988.1 million.
In November 2010, Wireless completed the redemption of the remaining outstanding 9 1/4% Senior Notes.
In March 2011, Wireless entered into an Amendment and Restatement, or the New Amendment, which further amended
and restated the senior secured credit facility to, among other things, provide for the Tranche B-3 Term Loans, which will
mature in March 2018 and have an interest rate of LIBOR plus 3.75%. The New Amendment also increases the interest rate on
the existing Tranche B-2 Term Loans under the senior secured credit facility, as amended, to LIBOR plus 3.821%. In addition,
the aggregate amount of the revolving credit facility was increased from $67.5 million to $100.0 million and the maturity of the
revolving credit facility was extended to March 2016. The New Amendment modified certain limitations under the senior
secured credit facility, as amended, including limitations on our ability to incur additional debt, make certain restricted
payments, sell assets, make certain investments or acquisitions, grant liens and pay dividends. In addition, Wireless is no longer
subject to certain financial covenants, including maintaining a maximum senior secured consolidated leverage ratio. However,
under certain circumstances, we could be subject to certain financial covenants that contain ratios based on consolidated
Adjusted EBITDA as defined by the senior secured credit facility, as amended. Under the New Amendment, the definition of
consolidated Adjusted EBITDA has changed and no longer excludes interest and other income.
In May 2011, Wireless entered into an Incremental Commitment Agreement, or the Incremental Agreement, which
supplements the New Amendment to provide for the Incremental Tranche B-3 Term Loans which amount was borrowed on
May 10, 2011. The Incremental Tranche B-3 Term Loans have an interest rate of LIBOR plus 3.75% and will mature in March
2018. The Incremental Tranche B-3 Term Loans are repayable in quarterly installments of $2.5 million. A portion of the
proceeds from the Incremental Tranche B-3 Term Loans were used to prepay the $535.8 million in outstanding principal under
the Tranche B-1 Term Loans, with the remaining proceeds to be used for general corporate purposes, including opportunistic
spectrum acquisitions. The net proceeds from the Incremental Tranche B-3 Term Loans were $455.5 million after prepayment
of the Tranche B-1 Term Loans, underwriter fees, other debt issuance costs of approximately $7.9 million. The Incremental
Agreement did not modify the interest rate, maturity date or any of the other terms of the New Amendment applicable to the
Tranche B-2 Term Loans or the existing Tranche B-3 Term Loans.
Our strategy has been to offer our services in major metropolitan areas and their surrounding areas, which we refer to as
operating segments. We are seeking opportunities to enhance our current operating segments and to provide service in new
geographic areas generally adjacent to existing coverage areas. From time to time, we may purchase spectrum and related
assets from third parties or the FCC. We believe that our existing cash, cash equivalents and short-term investments and our
anticipated cash flows from operations will be sufficient to fully fund planned capital investments including geographical
expansion.
The construction of our network and the marketing and distribution of our wireless communications products and
services have required, and will continue to require, substantial capital investment. Capital outlays have included license
acquisition costs, capital expenditures for construction, increasing the capacity, or upgrade of our network infrastructure,
including network infrastructure for 4G LTE, costs associated with clearing and relocating non-governmental incumbent
licenses, funding of operating cash flow losses incurred as we launch services in new metropolitan areas and other working
capital costs, debt service and financing fees and expenses. Our capital expenditures for the years ended December 31, 2011,
2010 and 2009 were $889.8 million, $790.4 million and $831.7 million, respectively. The expenditures for the years ended
December 31, 2011 and 2010 were primarily associated with our efforts to increase the service area and capacity of our existing
network and the upgrade of our network to 4G LTE. The expenditures for the year ended December 31, 2009 were primarily
associated with the construction of the network infrastructure in the Philadelphia, New York and Boston metropolitan areas and