Metro PCS 2011 Annual Report Download - page 97

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86
During the year ended December 31, 2009, we received $52.3 million in fair value of FCC licenses in exchanges with
other parties.
During the year ended December 31, 2010, we closed on various agreements for the exchange of spectrum in the net
aggregate amount of $3.0 million in cash. The spectrum exchanges resulted in a gain on disposal of assets in the amount of
$45.8 million.
In October 2010, we entered into an asset purchase agreement to acquire 10 MHz of AWS spectrum and certain related
network assets adjacent to the Northeast metropolitan areas and surrounding areas for a total purchase price of $49.2 million. In
November 2010, we closed on the acquisition of the network assets and paid a total of $41.1 million in cash. In February 2011,
we closed on the acquisition of the 10 MHz of AWS spectrum and paid $8.0 million in cash. In June 2011, we completed a
final settlement of costs and received $0.5 million in cash as reimbursement for pre-acquisition payments made on behalf of the
seller.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Contractual Obligations and Commercial Commitments
The following table provides aggregate information about our contractual obligations as of December 31, 2011. Also, see
Note 11 to our annual consolidated financial statements included elsewhere in this report.
Payments Due by Period
Total
Less
Than
1 Year 1 - 3 Years 3 - 5 Years
More
Than
5 Years
(In thousands)
Contractual Obligations:
Long-term debt, including current portion $ 4,471,916 $ 25,390 $ 50,780 $ 983,246 $ 3,412,500
Interest expense on long-term debt(1) 1,705,268 259,906 504,194 478,798 462,370
Purchase obligations (2) 181,590 157,907 11,938 11,745 —
Contractual tax obligations (3) 6,084 6,084 — — —
Capital lease obligations 520,802 34,333 71,755 76,126 338,588
Operating leases 2,602,739 339,765 687,464 656,851 918,659
Total cash contractual obligations $ 9,488,399 $ 823,385 $ 1,326,131 $ 2,206,766 $ 5,132,117
————————————
(1) Interest expense on long-term debt includes future interest payments on outstanding obligations under our senior secured credit facility, as amended,
7 7/8% Senior Notes and the 6 5/8% Senior Notes. The senior secured credit facility, as amended, bears interest at a floating rate tied to a fixed spread
to LIBOR. The interest expense for the senior secured credit facility, as amended, presented in this table is based on rates at December 31, 2011 and
includes the impact of our interest rate protection agreements.
(2) Includes expected commitments for future capital lease obligations and purchases of network equipment.
(3) Represents the liability reported in accordance with the provisions of ASC 740 (Topic 740, “Income Taxes”). For further information related to
unrecognized tax benefits, see Note 14, “Income Taxes,” to the consolidated financial statements included in this Report.
Inflation
We believe that inflation has not materially affected our operations.
Effect of New Accounting Standards
Effective January 1, 2011, the Company prospectively adopted Accounting Standards Update (“ASU”) 2009-13,
“Multiple Deliverable Revenue Arrangements – a consensus of the EITF,” (“ASU 2009-13”) which amended ASC 605 (Topic
605, “Revenue Recognition”) to require overall arrangement consideration be allocated to each element in the multiple
deliverable arrangement based on their relative selling prices, regardless of whether those selling prices are evidenced by
vendor-specific objective evidence (“VSOE”) or third party evidence (“TPE”). In the absence of VSOE or TPE, entities are
required to estimate the selling prices of deliverables using management’s best estimates of the prices that would be charged on
a standalone basis. The residual method of allocating arrangement consideration is eliminated; however the balance of revenue
that can be recognized for the delivered element is limited to the non-contingent amount. The implementation of this standard
did not have a material impact on the Company’s financial condition, results of operations or cash flows.