þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-0836269
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(State or other jurisdiction
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(I.R.S. Employer
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of incorporation or organization)
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Identification No.)
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|
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2250 Lakeside Boulevard
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Richardson, Texas
|
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75082-4304
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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PART I. FINANCIAL INFORMATION
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PART II. OTHER INFORMATION
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*
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*
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*
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*
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No reportable information under this item.
|
|
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September 30,
2012 |
|
December 31,
2011 |
||||
CURRENT ASSETS:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
2,057,339
|
|
|
$
|
1,943,282
|
|
Short-term investments
|
|
507,943
|
|
|
299,972
|
|
||
Inventories
|
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312,632
|
|
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239,648
|
|
||
Accounts receivable (net of allowance for uncollectible accounts of $490 and $601 at September 30, 2012 and December 31, 2011, respectively)
|
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95,263
|
|
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78,023
|
|
||
Prepaid expenses
|
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80,040
|
|
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55,712
|
|
||
Deferred charges
|
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71,590
|
|
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74,970
|
|
||
Deferred tax assets
|
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7,666
|
|
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7,214
|
|
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Other current assets
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52,349
|
|
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44,772
|
|
||
Total current assets
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3,184,822
|
|
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2,743,593
|
|
||
Property and equipment, net
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4,197,399
|
|
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4,017,999
|
|
||
Restricted cash and investments
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2,076
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|
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2,576
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Long-term investments
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1,679
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6,319
|
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FCC licenses
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2,562,315
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2,539,041
|
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Other assets
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123,618
|
|
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173,403
|
|
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Total assets
|
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$
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10,071,909
|
|
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$
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9,482,931
|
|
CURRENT LIABILITIES:
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
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$
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450,087
|
|
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$
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512,346
|
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Current maturities of long-term debt
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36,112
|
|
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33,460
|
|
||
Deferred revenue
|
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232,307
|
|
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245,705
|
|
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Other current liabilities
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66,144
|
|
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25,212
|
|
||
Total current liabilities
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784,650
|
|
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816,723
|
|
||
Long-term debt, net
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4,731,174
|
|
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4,711,021
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Deferred tax liabilities
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1,008,870
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|
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817,106
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Deferred rents
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133,272
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120,028
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Other long-term liabilities
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91,496
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|
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90,453
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Total liabilities
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6,749,462
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6,555,331
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COMMITMENTS AND CONTINGENCIES (See Note 10)
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STOCKHOLDERS’ EQUITY:
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|
||||
Preferred stock, par value $0.0001 per share, 100,000,000 shares authorized; no shares of preferred stock issued and outstanding at September 30, 2012 and December 31, 2011
|
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—
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|
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—
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|
||
Common stock, par value $0.0001 per share, 1,000,000,000 shares authorized, 363,875,489 and 362,460,395 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively
|
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36
|
|
|
36
|
|
||
Additional paid-in capital
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1,815,315
|
|
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1,784,273
|
|
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Retained earnings
|
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1,521,925
|
|
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1,159,418
|
|
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Accumulated other comprehensive loss
|
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(4,625
|
)
|
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(9,295
|
)
|
||
Less treasury stock, at cost, 965,021 and 602,881 treasury shares at September 30, 2012 and December 31, 2011, respectively
|
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(10,204
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)
|
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(6,832
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)
|
||
Total stockholders’ equity
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3,322,447
|
|
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2,927,600
|
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Total liabilities and stockholders’ equity
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$
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10,071,909
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$
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9,482,931
|
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For the Three Months Ended September 30,
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For the Nine Months Ended September 30,
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||||||||||||
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||||||||||||||
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2012
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2011
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2012
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2011
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||||||||
REVENUES:
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||||||||
Service revenues
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$
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1,121,957
|
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$
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1,131,054
|
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$
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3,439,678
|
|
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$
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3,294,563
|
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Equipment revenues
|
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137,203
|
|
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74,334
|
|
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377,252
|
|
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314,654
|
|
||||
Total revenues
|
|
1,259,160
|
|
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1,205,388
|
|
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3,816,930
|
|
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3,609,217
|
|
||||
OPERATING EXPENSES:
|
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||||||||
Cost of service (excluding depreciation and amortization expense of $142,892, $120,362, $408,852 and $347,645 shown separately below)
|
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373,032
|
|
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382,033
|
|
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1,130,377
|
|
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1,089,480
|
|
||||
Cost of equipment
|
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265,940
|
|
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343,473
|
|
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1,002,726
|
|
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1,095,269
|
|
||||
Selling, general and administrative expenses (excluding depreciation and amortization expense of $20,197, $18,947, $60,406 and $54,883 shown separately below)
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163,409
|
|
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162,459
|
|
|
507,497
|
|
|
486,786
|
|
||||
Depreciation and amortization
|
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163,089
|
|
|
139,309
|
|
|
469,258
|
|
|
402,528
|
|
||||
Loss on disposal of assets
|
|
1,452
|
|
|
1,283
|
|
|
4,618
|
|
|
2,731
|
|
||||
Total operating expenses
|
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966,922
|
|
|
1,028,557
|
|
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3,114,476
|
|
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3,076,794
|
|
||||
Income from operations
|
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292,238
|
|
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176,831
|
|
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702,454
|
|
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532,423
|
|
||||
OTHER EXPENSE (INCOME):
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|
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|
|
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||||||||
Interest expense
|
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66,655
|
|
|
69,511
|
|
|
206,224
|
|
|
193,051
|
|
||||
Interest income
|
|
(460
|
)
|
|
(531
|
)
|
|
(1,208
|
)
|
|
(1,557
|
)
|
||||
Other (income) expense, net
|
|
(105
|
)
|
|
(93
|
)
|
|
(418
|
)
|
|
(534
|
)
|
||||
Gain on settlement
|
|
(52,500
|
)
|
|
—
|
|
|
(52,500
|
)
|
|
—
|
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,536
|
|
||||
Total other expense
|
|
13,590
|
|
|
68,887
|
|
|
152,098
|
|
|
200,496
|
|
||||
Income before provision for income taxes
|
|
278,648
|
|
|
107,944
|
|
|
550,356
|
|
|
331,927
|
|
||||
Provision for income taxes
|
|
(85,981
|
)
|
|
(38,618
|
)
|
|
(187,849
|
)
|
|
(121,887
|
)
|
||||
Net income
|
|
$
|
192,667
|
|
|
$
|
69,326
|
|
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$
|
362,507
|
|
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$
|
210,040
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains on available-for-sale securities, net of tax of $49, $25, $100 and $127, respectively
|
|
3,512
|
|
|
40
|
|
|
3,593
|
|
|
204
|
|
||||
Unrealized losses on cash flow hedging derivatives, net of tax benefit of $1,002, $5,790, $3,608 and $13,713, respectively
|
|
(1,748
|
)
|
|
(9,286
|
)
|
|
(5,913
|
)
|
|
(22,060
|
)
|
||||
Reclassification adjustment for gains on available-for-sale securities included in net income, net of tax of $33, $47, $58 and $169, respectively
|
|
(56
|
)
|
|
(75
|
)
|
|
(96
|
)
|
|
(272
|
)
|
||||
Reclassification adjustment for losses on cash flow hedging derivatives included in net income, net of tax benefit of $1,301, $2,468, $4,324 and $6,587, respectively
|
|
2,254
|
|
|
3,956
|
|
|
7,086
|
|
|
10,596
|
|
||||
Total other comprehensive income (loss)
|
|
3,962
|
|
|
(5,365
|
)
|
|
4,670
|
|
|
(11,532
|
)
|
||||
Comprehensive income
|
|
$
|
196,629
|
|
|
$
|
63,961
|
|
|
$
|
367,177
|
|
|
$
|
198,508
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.53
|
|
|
$
|
0.19
|
|
|
$
|
0.99
|
|
|
$
|
0.58
|
|
Diluted
|
|
$
|
0.52
|
|
|
$
|
0.19
|
|
|
$
|
0.99
|
|
|
$
|
0.57
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
363,584,552
|
|
|
362,019,205
|
|
|
363,190,434
|
|
|
359,763,082
|
|
||||
Diluted
|
|
365,019,836
|
|
|
364,865,226
|
|
|
364,440,115
|
|
|
363,717,798
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
|
|||||||
|
|
2012
|
|
2011
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
362,507
|
|
|
$
|
210,040
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
469,258
|
|
|
402,528
|
|
||
Provision for uncollectible accounts receivable
|
|
3,155
|
|
|
382
|
|
||
Deferred rent expense
|
|
13,432
|
|
|
13,457
|
|
||
Cost of abandoned cell sites
|
|
1,357
|
|
|
650
|
|
||
Stock-based compensation expense
|
|
28,756
|
|
|
32,142
|
|
||
Non-cash interest expense
|
|
5,563
|
|
|
6,141
|
|
||
Loss on disposal of assets
|
|
4,618
|
|
|
2,731
|
|
||
Gain on settlement
|
|
(52,500
|
)
|
|
—
|
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
9,536
|
|
||
Gain on sale of investments
|
|
(154
|
)
|
|
(441
|
)
|
||
Accretion of asset retirement obligations
|
|
4,900
|
|
|
4,198
|
|
||
Deferred income taxes
|
|
191,243
|
|
|
119,290
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Inventories
|
|
(72,984
|
)
|
|
14,047
|
|
||
Accounts receivable, net
|
|
(17,152
|
)
|
|
(7,373
|
)
|
||
Prepaid expenses
|
|
(24,279
|
)
|
|
(16,289
|
)
|
||
Deferred charges
|
|
3,379
|
|
|
2,307
|
|
||
Other assets
|
|
16,469
|
|
|
24,755
|
|
||
Accounts payable and accrued expenses
|
|
(82,100
|
)
|
|
(90,087
|
)
|
||
Deferred revenue
|
|
(13,398
|
)
|
|
19,225
|
|
||
Other liabilities
|
|
6,398
|
|
|
6,421
|
|
||
Net cash provided by operating activities
|
|
848,468
|
|
|
753,660
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(588,332
|
)
|
|
(699,625
|
)
|
||
Change in prepaid purchases of property and equipment
|
|
39,330
|
|
|
(65,241
|
)
|
||
Proceeds from sale of property and equipment
|
|
897
|
|
|
845
|
|
||
Purchases of investments
|
|
(692,147
|
)
|
|
(462,289
|
)
|
||
Proceeds from maturity of investments
|
|
492,500
|
|
|
537,500
|
|
||
Proceeds from gain on settlement
|
|
52,500
|
|
|
—
|
|
||
Change in restricted cash and investments
|
|
500
|
|
|
300
|
|
||
Acquisitions of FCC licenses and microwave clearing costs
|
|
(22,998
|
)
|
|
(4,003
|
)
|
||
Cash used in asset acquisitions
|
|
—
|
|
|
(7,495
|
)
|
||
Net cash used in investing activities
|
|
(717,750
|
)
|
|
(700,008
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Change in book overdraft
|
|
9,131
|
|
|
14,081
|
|
||
Proceeds from debt issuance, net of discount
|
|
—
|
|
|
1,497,500
|
|
||
Debt issuance costs
|
|
—
|
|
|
(15,351
|
)
|
||
Repayment of debt
|
|
(19,042
|
)
|
|
(17,945
|
)
|
||
Retirement of senior secured credit facility debt
|
|
—
|
|
|
(535,792
|
)
|
||
Payments on capital lease obligations
|
|
(6,668
|
)
|
|
(6,222
|
)
|
||
Purchase of treasury stock
|
|
(3,373
|
)
|
|
(4,359
|
)
|
||
Proceeds from exercise of stock options
|
|
3,291
|
|
|
58,666
|
|
||
Net cash (used in) provided by financing activities
|
|
(16,661
|
)
|
|
990,578
|
|
||
INCREASE CASH AND CASH EQUIVALENTS
|
|
114,057
|
|
|
1,044,230
|
|
||
CASH AND CASH EQUIVALENTS, beginning of period
|
|
1,943,282
|
|
|
796,531
|
|
||
CASH AND CASH EQUIVALENTS, end of period
|
|
$
|
2,057,339
|
|
|
$
|
1,840,761
|
|
1.
|
Basis of Presentation:
|
2.
|
Asset Acquisition:
|
3.
|
Short-term Investments:
|
|
|
As of September 30, 2012
|
||||||||||||||
|
|
Amortized
Cost
|
|
Unrealized
Gain in
Accumulated
OCI
|
|
Unrealized
Loss in
Accumulated
OCI
|
|
Aggregate
Fair
Value
|
||||||||
Equity securities
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
U.S. Treasury securities
|
|
499,731
|
|
|
142
|
|
|
—
|
|
|
499,873
|
|
||||
Auction rate securities
|
|
1,210
|
|
|
6,859
|
|
|
—
|
|
|
8,069
|
|
||||
Total short-term investments
|
|
$
|
500,948
|
|
|
$
|
7,001
|
|
|
$
|
(6
|
)
|
|
$
|
507,943
|
|
|
|
As of December 31, 2011
|
||||||||||||||
|
|
Amortized
Cost
|
|
Unrealized
Gain in
Accumulated
OCI
|
|
Unrealized
Loss in
Accumulated
OCI
|
|
Aggregate
Fair
Value
|
||||||||
Equity securities
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
U.S. Treasury securities
|
|
299,939
|
|
|
32
|
|
|
—
|
|
|
299,971
|
|
||||
Total short-term investments
|
|
$
|
299,946
|
|
|
$
|
32
|
|
|
$
|
(6
|
)
|
|
$
|
299,972
|
|
4.
|
Derivative Instruments and Hedging Activities:
|
(in thousands)
|
|
Liability Derivatives
|
||||||||||
|
|
As of September 30, 2012
|
|
As of December 31, 2011
|
||||||||
|
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
Derivatives designated as hedging
instruments under ASC 815
|
|
|
|
|
|
|
|
|
||||
Interest rate protection agreements
|
|
Other current liabilities
|
|
$
|
(13,630
|
)
|
|
Other current liabilities
|
|
$
|
(11,644
|
)
|
Interest rate protection agreements
|
|
Other long-term liabilities
|
|
(5,496
|
)
|
|
Other long-term liabilities
|
|
(9,371
|
)
|
||
Total derivatives designated as
hedging instruments under ASC
815
|
|
|
|
$
|
(19,126
|
)
|
|
|
|
$
|
(21,015
|
)
|
Derivatives in ASC 815 Cash
Flow Hedging Relationships
|
|
Amount of Gain (Loss)
Recognized in OCI on Derivative
(Effective Portion)
|
|
Location of Gain (Loss) Reclassified from
Accumulated OCI into
Income (Effective Portion)
|
|
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective Portion)
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|||||||||||
Interest rate protection agreements
|
|
$
|
(2,751
|
)
|
|
$
|
(15,076
|
)
|
|
Interest expense
|
|
$
|
(3,555
|
)
|
|
$
|
(6,424
|
)
|
Derivatives in ASC 815 Cash
Flow Hedging Relationships
|
|
Amount of Gain (Loss)
Recognized in OCI on Derivative
(Effective Portion)
|
|
Location of Gain (Loss) Reclassified from
Accumulated OCI into
Income (Effective Portion)
|
|
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective Portion)
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|||||||||||
Interest rate protection agreements
|
|
$
|
(9,521
|
)
|
|
$
|
(35,774
|
)
|
|
Interest expense
|
|
$
|
(11,410
|
)
|
|
$
|
(17,182
|
)
|
5.
|
Intangible Assets:
|
|
|
FCC Licenses
|
|
Microwave
Relocation
Costs
|
||||
Balance at January 1, 2012
|
|
$
|
2,513,770
|
|
|
$
|
25,271
|
|
Additions
|
|
21,946
|
|
|
1,328
|
|
||
Disposals
|
|
—
|
|
|
—
|
|
||
Balance at September 30, 2012
|
|
$
|
2,535,716
|
|
|
$
|
26,599
|
|
6.
|
Supplemental Balance Sheet Information:
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||
|
|
(in thousands)
|
||||||
Other current liabilities:
|
|
|
|
|
||||
Deferred vendor credits
(1)
|
|
$
|
40,209
|
|
|
$
|
—
|
|
Derivative liabilities
|
|
13,630
|
|
|
11,644
|
|
||
Other
|
|
12,305
|
|
|
13,568
|
|
||
|
|
$
|
66,144
|
|
|
$
|
25,212
|
|
(1)
|
Deferred vendor credits consists of credit memos received from a vendor that will be earned upon the return of certain network equipment.
|
7.
|
Long-term Debt:
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
Senior Secured Credit Facility
|
|
$
|
2,452,873
|
|
|
$
|
2,471,916
|
|
7
7
/
8
% Senior Notes
|
|
1,000,000
|
|
|
1,000,000
|
|
||
6
5
/
8
% Senior Notes
|
|
1,000,000
|
|
|
1,000,000
|
|
||
Capital Lease Obligations
|
|
322,204
|
|
|
281,167
|
|
||
Total long-term debt
|
|
4,775,077
|
|
|
4,753,083
|
|
||
Add: unamortized discount on debt
|
|
(7,791
|
)
|
|
(8,602
|
)
|
||
Total debt
|
|
4,767,286
|
|
|
4,744,481
|
|
||
Less: current maturities
|
|
(36,112
|
)
|
|
(33,460
|
)
|
||
Total long-term debt
|
|
$
|
4,731,174
|
|
|
$
|
4,711,021
|
|
8.
|
Fair Value Measurements:
|
•
|
Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.
|
•
|
Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
|
•
|
Level 3 - Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use.
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
$
|
1,903,369
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,903,369
|
|
Short-term investments
|
|
499,874
|
|
|
—
|
|
|
8,069
|
|
|
507,943
|
|
||||
Restricted cash and investments
|
|
2,076
|
|
|
—
|
|
|
—
|
|
|
2,076
|
|
||||
Long-term investments
|
|
—
|
|
|
—
|
|
|
1,679
|
|
|
1,679
|
|
||||
Total assets measured at fair value
|
|
$
|
2,405,319
|
|
|
$
|
—
|
|
|
$
|
9,748
|
|
|
$
|
2,415,067
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
$
|
—
|
|
|
$
|
19,126
|
|
|
$
|
—
|
|
|
$
|
19,126
|
|
Total liabilities measured at fair value
|
|
$
|
—
|
|
|
$
|
19,126
|
|
|
$
|
—
|
|
|
$
|
19,126
|
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
$
|
1,815,538
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,815,538
|
|
Short-term investments
|
|
299,972
|
|
|
—
|
|
|
—
|
|
|
299,972
|
|
||||
Restricted cash and investments
|
|
2,576
|
|
|
—
|
|
|
—
|
|
|
2,576
|
|
||||
Long-term investments
|
|
—
|
|
|
—
|
|
|
6,319
|
|
|
6,319
|
|
||||
Total assets measured at fair value
|
|
$
|
2,118,086
|
|
|
$
|
—
|
|
|
$
|
6,319
|
|
|
$
|
2,124,405
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
$
|
—
|
|
|
$
|
21,015
|
|
|
$
|
—
|
|
|
$
|
21,015
|
|
Total liabilities measured at fair value
|
|
$
|
—
|
|
|
$
|
21,015
|
|
|
$
|
—
|
|
|
$
|
21,015
|
|
Fair Value Measurements of Net Derivative Liabilities Using Level 2 Inputs
|
|
Net Derivative Liabilities
|
||||||
|
|
Three Months Ended September 30,
|
||||||
|
|
2012
|
|
2011
|
||||
Beginning balance
|
|
$
|
19,930
|
|
|
$
|
18,249
|
|
Total losses (realized or unrealized):
|
|
|
|
|
||||
Included in earnings (1)
|
|
3,555
|
|
|
6,424
|
|
||
Included in accumulated other comprehensive loss
|
|
(2,751
|
)
|
|
(15,076
|
)
|
||
Transfers in and/or out of Level 2
|
|
—
|
|
|
—
|
|
||
Purchases, sales, issuances and settlements
|
|
—
|
|
|
—
|
|
||
Ending balance
|
|
$
|
19,126
|
|
|
$
|
26,901
|
|
(1)
|
Losses included in earnings that are attributable to the reclassification of the effective portion of those derivative liabilities still held at the reporting date as reported in interest expense in the condensed consolidated statements of income and comprehensive income.
|
Fair Value Measurements of Net Derivative Liabilities Using Level 2 Inputs
|
|
Net Derivative Liabilities
|
||||||
|
|
Nine Months Ended September 30,
|
||||||
|
|
2012
|
|
2011
|
||||
Beginning balance
|
|
$
|
21,015
|
|
|
$
|
8,309
|
|
Total losses (realized or unrealized):
|
|
|
|
|
||||
Included in earnings (2)
|
|
11,410
|
|
|
17,182
|
|
||
Included in accumulated other comprehensive loss
|
|
(9,521
|
)
|
|
(35,774
|
)
|
||
Transfers in and/or out of Level 2
|
|
—
|
|
|
—
|
|
||
Purchases, sales, issuances and settlements
|
|
—
|
|
|
—
|
|
||
Ending balance
|
|
$
|
19,126
|
|
|
$
|
26,901
|
|
(2)
|
Losses included in earnings that are attributable to the reclassification of the effective portion of those derivative liabilities still held at the reporting date as reported in interest expense in the condensed consolidated statements of income and comprehensive income.
|
Fair Value Measurements of Assets Using Level 3 Inputs
|
|
Investments
|
||||||
|
|
Three Months Ended September 30,
|
||||||
|
|
2012
|
|
2011
|
||||
Beginning balance
|
|
$
|
6,319
|
|
|
$
|
6,319
|
|
Total losses (realized or unrealized):
|
|
|
|
|
||||
Included in earnings
|
|
—
|
|
|
—
|
|
||
Included in accumulated other comprehensive loss
|
|
3,429
|
|
|
—
|
|
||
Transfers in and/or out of Level 3
|
|
—
|
|
|
—
|
|
||
Purchases, sales, issuances and settlements
|
|
—
|
|
|
—
|
|
||
Ending balance
|
|
$
|
9,748
|
|
|
$
|
6,319
|
|
Fair Value Measurements of Assets Using Level 3 Inputs
|
|
Investments
|
||||||
|
|
Nine Months Ended September 30,
|
||||||
|
|
2012
|
|
2011
|
||||
Beginning balance
|
|
$
|
6,319
|
|
|
$
|
6,319
|
|
Total losses (realized or unrealized):
|
|
|
|
|
||||
Included in earnings
|
|
—
|
|
|
—
|
|
||
Included in accumulated other comprehensive loss
|
|
3,429
|
|
|
—
|
|
||
Transfers in and/or out of Level 3
|
|
—
|
|
|
—
|
|
||
Purchases, sales, issuances and settlements
|
|
—
|
|
|
—
|
|
||
Ending balance
|
|
$
|
9,748
|
|
|
$
|
6,319
|
|
9.
|
Net Income Per Common Share:
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Basic EPS:
|
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common stock
|
|
$
|
192,667
|
|
|
$
|
69,326
|
|
|
$
|
362,507
|
|
|
$
|
210,040
|
|
Amount allocable to common shareholders
|
|
99.5
|
%
|
|
99.1
|
%
|
|
99.4
|
%
|
|
99.1
|
%
|
||||
Rights to undistributed earnings
|
|
$
|
191,617
|
|
|
$
|
68,686
|
|
|
$
|
360,166
|
|
|
$
|
208,106
|
|
Weighted average shares outstanding—basic
|
|
363,584,552
|
|
|
362,019,205
|
|
|
363,190,434
|
|
|
359,763,082
|
|
||||
Net income per common share—basic
|
|
$
|
0.53
|
|
|
$
|
0.19
|
|
|
$
|
0.99
|
|
|
$
|
0.58
|
|
Diluted EPS:
|
|
|
|
|
|
|
|
|
||||||||
Rights to undistributed earnings
|
|
$
|
191,617
|
|
|
$
|
68,686
|
|
|
$
|
360,166
|
|
|
$
|
208,106
|
|
Weighted average shares outstanding—basic
|
|
363,584,552
|
|
|
362,019,205
|
|
|
363,190,434
|
|
|
359,763,082
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options
|
|
1,435,284
|
|
|
2,846,021
|
|
|
1,249,681
|
|
|
3,954,716
|
|
||||
Weighted average shares outstanding—diluted
|
|
365,019,836
|
|
|
364,865,226
|
|
|
364,440,115
|
|
|
363,717,798
|
|
||||
Net income per common share—diluted
|
|
$
|
0.52
|
|
|
$
|
0.19
|
|
|
$
|
0.99
|
|
|
$
|
0.57
|
|
10.
|
Commitments and Contingencies:
|
11.
|
Supplemental Cash Flow Information:
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2012
|
|
2011
|
||||
|
|
(in thousands)
|
||||||
Cash paid for interest
|
|
$
|
206,490
|
|
|
$
|
183,728
|
|
Cash paid for income taxes
|
|
4,724
|
|
|
4,113
|
|
12.
|
Related-Party Transactions:
|
•
|
A less than 20% interest in a company that provides services to the Company's customers, including handset insurance programs. Pursuant to the Company's agreement with this related-party, the Company bills its customers directly for these services and remits the fees collected from its customers for these services to the related-party. In addition, the Company receives compensation for selling handsets to the related-party;
|
•
|
A less than 20% equity interest in a company that provides advertising services to the Company; and
|
•
|
A less than 60% interest in a company that provides distributed antenna systems ("DAS") leases and maintenance to wireless carriers, including the Company. These DAS leases are accounted for as capital or operating leases in the Company's financial statements. This company is no longer a related party as of April 2012 because it is no longer owned by the affiliated fund.
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
Network service fees included in prepaid expenses
|
|
$
|
—
|
|
|
$
|
1.5
|
|
Receivables from related-party included in other current assets
|
|
3.5
|
|
|
0.7
|
|
||
DAS equipment included in property and equipment, net
|
|
—
|
|
|
383.1
|
|
||
Deferred network service fees included in other assets
|
|
—
|
|
|
8.2
|
|
||
Payments due to related-party included in accounts payable and accrued expenses
|
|
6.0
|
|
|
6.6
|
|
||
Current portion of capital lease obligations included in current maturities of long-term debt
|
|
—
|
|
|
7.1
|
|
||
Non-current portion of capital lease obligations included in long-term debt, net
|
|
—
|
|
|
240.1
|
|
||
Deferred DAS service fees included in other long-term liabilities
|
|
—
|
|
|
1.4
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Fees received by the Company as compensation included in service revenues
|
|
$
|
2.9
|
|
|
$
|
2.9
|
|
|
$
|
8.7
|
|
|
$
|
8.2
|
|
Fees received by the Company as compensation included in equipment revenues
|
|
9.8
|
|
|
4.9
|
|
|
24.1
|
|
|
16.2
|
|
||||
Fees paid by the Company for services and related expenses included in cost of service
|
|
—
|
|
|
3.3
|
|
|
3.6
|
|
|
9.6
|
|
||||
Fees paid by the Company for services included in selling, general and administrative expenses
|
|
1.9
|
|
|
0.6
|
|
|
4.7
|
|
|
3.2
|
|
||||
DAS equipment depreciation included in depreciation expense
|
|
—
|
|
|
8.7
|
|
|
9.6
|
|
|
27.2
|
|
||||
Capital lease interest included in interest expense
|
|
—
|
|
|
4.9
|
|
|
5.2
|
|
|
14.3
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2012
|
|
2011
|
||||
Capital lease payments included in financing activities
|
|
$
|
1.4
|
|
|
$
|
5.5
|
|
13.
|
Guarantor Subsidiaries:
|
|
|
Parent
As
Previously
Reported
|
|
Parent
As
Corrected
|
|
Issuer
As
Previously Reported
|
|
Issuer
As
Corrected
|
|
Eliminations
As
Previously Reported
|
|
Eliminations
As
Corrected
|
||||||
|
|
(in thousands)
|
||||||||||||||||
Change in advances - affiliates
|
|
679,885
|
|
|
18,039
|
|
|
(689,633
|
)
|
|
264,367
|
|
|
9,748
|
|
|
(282,406
|
)
|
Net cash provided by (used in) investing activities
|
|
755,096
|
|
|
93,250
|
|
|
(760,364
|
)
|
|
193,636
|
|
|
9,478
|
|
|
(282,406
|
)
|
Change in advances - affiliates
|
|
292,154
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,748
|
)
|
|
282,406
|
|
Net cash provided by (used in) financing activities
|
|
346,461
|
|
|
54,307
|
|
|
942,493
|
|
|
942,493
|
|
|
(9,748
|
)
|
|
282,406
|
|
Increase (decrease) in cash and cash equivalents
|
|
1,102,487
|
|
|
148,487
|
|
|
(58,237
|
)
|
|
895,763
|
|
|
—
|
|
|
—
|
|
Cash and cash equivalents, end of period
|
|
1,610,336
|
|
|
656,336
|
|
|
229,705
|
|
|
1,183,705
|
|
|
—
|
|
|
—
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
515,380
|
|
|
$
|
1,541,231
|
|
|
$
|
728
|
|
|
$
|
—
|
|
|
$
|
2,057,339
|
|
Short-term investments
|
|
507,943
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
507,943
|
|
|||||
Inventories
|
|
—
|
|
|
295,287
|
|
|
17,345
|
|
|
—
|
|
|
312,632
|
|
|||||
Prepaid expenses
|
|
89
|
|
|
2,421
|
|
|
77,530
|
|
|
—
|
|
|
80,040
|
|
|||||
Advances to subsidiaries
|
|
695,842
|
|
|
—
|
|
|
—
|
|
|
(695,842
|
)
|
|
—
|
|
|||||
Other current assets
|
|
67
|
|
|
194,567
|
|
|
32,234
|
|
|
—
|
|
|
226,868
|
|
|||||
Total current assets
|
|
1,719,321
|
|
|
2,033,506
|
|
|
127,837
|
|
|
(695,842
|
)
|
|
3,184,822
|
|
|||||
Property and equipment, net
|
|
—
|
|
|
1,017
|
|
|
4,196,382
|
|
|
—
|
|
|
4,197,399
|
|
|||||
Long-term investments
|
|
1,679
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,679
|
|
|||||
Investment in subsidiaries
|
|
1,607,677
|
|
|
5,417,110
|
|
|
—
|
|
|
(7,024,787
|
)
|
|
—
|
|
|||||
FCC licenses
|
|
—
|
|
|
3,800
|
|
|
2,558,515
|
|
|
—
|
|
|
2,562,315
|
|
|||||
Other assets
|
|
—
|
|
|
97,689
|
|
|
30,183
|
|
|
(2,178
|
)
|
|
125,694
|
|
|||||
Total assets
|
|
$
|
3,328,677
|
|
|
$
|
7,553,122
|
|
|
$
|
6,912,917
|
|
|
$
|
(7,722,807
|
)
|
|
$
|
10,071,909
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advances from subsidiaries
|
|
—
|
|
|
260,898
|
|
|
434,944
|
|
|
(695,842
|
)
|
|
—
|
|
|||||
Other current liabilities
|
|
—
|
|
|
246,594
|
|
|
538,056
|
|
|
—
|
|
|
784,650
|
|
|||||
Total current liabilities
|
|
—
|
|
|
507,492
|
|
|
973,000
|
|
|
(695,842
|
)
|
|
784,650
|
|
|||||
Long-term debt, net
|
|
—
|
|
|
4,419,692
|
|
|
311,482
|
|
|
—
|
|
|
4,731,174
|
|
|||||
Deferred credits
|
|
6,230
|
|
|
1,004,818
|
|
|
133,272
|
|
|
(2,178
|
)
|
|
1,142,142
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
13,443
|
|
|
78,053
|
|
|
—
|
|
|
91,496
|
|
|||||
Total liabilities
|
|
6,230
|
|
|
5,945,445
|
|
|
1,495,807
|
|
|
(698,020
|
)
|
|
6,749,462
|
|
|||||
STOCKHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||
Other stockholders’ equity
|
|
3,322,411
|
|
|
1,607,677
|
|
|
5,417,110
|
|
|
(7,024,787
|
)
|
|
3,322,411
|
|
|||||
Total stockholders’ equity
|
|
3,322,447
|
|
|
1,607,677
|
|
|
5,417,110
|
|
|
(7,024,787
|
)
|
|
3,322,447
|
|
|||||
Total liabilities and stockholders’ equity
|
|
$
|
3,328,677
|
|
|
$
|
7,553,122
|
|
|
$
|
6,912,917
|
|
|
$
|
(7,722,807
|
)
|
|
$
|
10,071,909
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
657,289
|
|
|
$
|
1,285,266
|
|
|
$
|
727
|
|
|
$
|
—
|
|
|
$
|
1,943,282
|
|
Short-term investments
|
|
299,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299,972
|
|
|||||
Inventories
|
|
—
|
|
|
226,124
|
|
|
13,524
|
|
|
—
|
|
|
239,648
|
|
|||||
Prepaid expenses
|
|
—
|
|
|
386
|
|
|
55,326
|
|
|
—
|
|
|
55,712
|
|
|||||
Advances to subsidiaries
|
|
671,193
|
|
|
245,866
|
|
|
—
|
|
|
(917,059
|
)
|
|
—
|
|
|||||
Other current assets
|
|
96
|
|
|
179,855
|
|
|
25,028
|
|
|
—
|
|
|
204,979
|
|
|||||
Total current assets
|
|
1,628,550
|
|
|
1,937,497
|
|
|
94,605
|
|
|
(917,059
|
)
|
|
2,743,593
|
|
|||||
Property and equipment, net
|
|
—
|
|
|
1,378
|
|
|
4,016,621
|
|
|
—
|
|
|
4,017,999
|
|
|||||
Long-term investments
|
|
6,319
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,319
|
|
|||||
Investment in subsidiaries
|
|
1,297,957
|
|
|
4,728,985
|
|
|
—
|
|
|
(6,026,942
|
)
|
|
—
|
|
|||||
FCC licenses
|
|
—
|
|
|
3,800
|
|
|
2,535,241
|
|
|
—
|
|
|
2,539,041
|
|
|||||
Other assets
|
|
—
|
|
|
137,985
|
|
|
39,612
|
|
|
(1,618
|
)
|
|
175,979
|
|
|||||
Total assets
|
|
$
|
2,932,826
|
|
|
$
|
6,809,645
|
|
|
$
|
6,686,079
|
|
|
$
|
(6,945,619
|
)
|
|
$
|
9,482,931
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advances from subsidiaries
|
|
—
|
|
|
—
|
|
|
917,059
|
|
|
(917,059
|
)
|
|
—
|
|
|||||
Other current liabilities
|
|
—
|
|
|
243,247
|
|
|
573,476
|
|
|
—
|
|
|
816,723
|
|
|||||
Total current liabilities
|
|
—
|
|
|
243,247
|
|
|
1,490,535
|
|
|
(917,059
|
)
|
|
816,723
|
|
|||||
Long-term debt, net
|
|
—
|
|
|
4,437,924
|
|
|
273,097
|
|
|
—
|
|
|
4,711,021
|
|
|||||
Deferred credits
|
|
5,226
|
|
|
813,498
|
|
|
120,028
|
|
|
(1,618
|
)
|
|
937,134
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
17,019
|
|
|
73,434
|
|
|
—
|
|
|
90,453
|
|
|||||
Total liabilities
|
|
5,226
|
|
|
5,511,688
|
|
|
1,957,094
|
|
|
(918,677
|
)
|
|
6,555,331
|
|
|||||
STOCKHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||
Other stockholders’ equity
|
|
2,927,564
|
|
|
1,297,957
|
|
|
4,728,985
|
|
|
(6,026,942
|
)
|
|
2,927,564
|
|
|||||
Total stockholders’ equity
|
|
2,927,600
|
|
|
1,297,957
|
|
|
4,728,985
|
|
|
(6,026,942
|
)
|
|
2,927,600
|
|
|||||
Total liabilities and stockholders’ equity
|
|
$
|
2,932,826
|
|
|
$
|
6,809,645
|
|
|
$
|
6,686,079
|
|
|
$
|
(6,945,619
|
)
|
|
$
|
9,482,931
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Revenues
|
|
$
|
—
|
|
|
$
|
9,026
|
|
|
$
|
1,257,474
|
|
|
$
|
(7,340
|
)
|
|
$
|
1,259,160
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenues
|
|
—
|
|
|
8,263
|
|
|
638,049
|
|
|
(7,340
|
)
|
|
638,972
|
|
|||||
Selling, general and administrative expenses
|
|
—
|
|
|
763
|
|
|
162,646
|
|
|
—
|
|
|
163,409
|
|
|||||
Other operating expenses
|
|
—
|
|
|
53
|
|
|
164,488
|
|
|
—
|
|
|
164,541
|
|
|||||
Total operating expenses
|
|
—
|
|
|
9,079
|
|
|
965,183
|
|
|
(7,340
|
)
|
|
966,922
|
|
|||||
(Loss) income from operations
|
|
—
|
|
|
(53
|
)
|
|
292,291
|
|
|
—
|
|
|
292,238
|
|
|||||
OTHER EXPENSE (INCOME):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
—
|
|
|
62,798
|
|
|
3,857
|
|
|
—
|
|
|
66,655
|
|
|||||
Non-operating (income) expenses
|
|
(52,911
|
)
|
|
(3
|
)
|
|
(151
|
)
|
|
—
|
|
|
(53,065
|
)
|
|||||
Earnings from consolidated subsidiaries
|
|
(139,756
|
)
|
|
(287,870
|
)
|
|
—
|
|
|
427,626
|
|
|
—
|
|
|||||
Total other (income) expense
|
|
(192,667
|
)
|
|
(225,075
|
)
|
|
3,706
|
|
|
427,626
|
|
|
13,590
|
|
|||||
Income (loss) before provision for income taxes
|
|
192,667
|
|
|
225,022
|
|
|
288,585
|
|
|
(427,626
|
)
|
|
278,648
|
|
|||||
Provision for income taxes
|
|
—
|
|
|
(85,266
|
)
|
|
(715
|
)
|
|
—
|
|
|
(85,981
|
)
|
|||||
Net income (loss)
|
|
$
|
192,667
|
|
|
$
|
139,756
|
|
|
$
|
287,870
|
|
|
$
|
(427,626
|
)
|
|
$
|
192,667
|
|
Total other comprehensive income (loss)
|
|
3,962
|
|
|
506
|
|
|
—
|
|
|
(506
|
)
|
|
3,962
|
|
|||||
Comprehensive income (loss)
|
|
$
|
196,629
|
|
|
$
|
140,262
|
|
|
$
|
287,870
|
|
|
$
|
(428,132
|
)
|
|
$
|
196,629
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Revenues
|
|
$
|
—
|
|
|
$
|
4,558
|
|
|
$
|
1,208,170
|
|
|
$
|
(7,340
|
)
|
|
$
|
1,205,388
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenues
|
|
—
|
|
|
4,180
|
|
|
728,666
|
|
|
(7,340
|
)
|
|
725,506
|
|
|||||
Selling, general and administrative expenses
|
|
—
|
|
|
378
|
|
|
162,081
|
|
|
—
|
|
|
162,459
|
|
|||||
Other operating expenses
|
|
—
|
|
|
91
|
|
|
140,501
|
|
|
—
|
|
|
140,592
|
|
|||||
Total operating expenses
|
|
—
|
|
|
4,649
|
|
|
1,031,248
|
|
|
(7,340
|
)
|
|
1,028,557
|
|
|||||
(Loss) income from operations
|
|
—
|
|
|
(91
|
)
|
|
176,922
|
|
|
—
|
|
|
176,831
|
|
|||||
OTHER EXPENSE (INCOME):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
—
|
|
|
64,750
|
|
|
4,761
|
|
|
—
|
|
|
69,511
|
|
|||||
Non-operating (income) expenses
|
|
(452
|
)
|
|
(47
|
)
|
|
(125
|
)
|
|
—
|
|
|
(624
|
)
|
|||||
Earnings from consolidated subsidiaries
|
|
(68,874
|
)
|
|
(171,801
|
)
|
|
—
|
|
|
240,675
|
|
|
—
|
|
|||||
Total other (income) expense
|
|
(69,326
|
)
|
|
(107,098
|
)
|
|
4,636
|
|
|
240,675
|
|
|
68,887
|
|
|||||
Income (loss) before provision for income taxes
|
|
69,326
|
|
|
107,007
|
|
|
172,286
|
|
|
(240,675
|
)
|
|
107,944
|
|
|||||
Provision benefit for income taxes
|
|
—
|
|
|
(38,133
|
)
|
|
(485
|
)
|
|
—
|
|
|
(38,618
|
)
|
|||||
Net income (loss)
|
|
$
|
69,326
|
|
|
$
|
68,874
|
|
|
$
|
171,801
|
|
|
$
|
(240,675
|
)
|
|
$
|
69,326
|
|
Total other comprehensive (loss) income
|
|
(5,365
|
)
|
|
(5,330
|
)
|
|
—
|
|
|
5,330
|
|
|
(5,365
|
)
|
|||||
Comprehensive income (loss)
|
|
$
|
63,961
|
|
|
$
|
63,544
|
|
|
$
|
171,801
|
|
|
$
|
(235,345
|
)
|
|
$
|
63,961
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Revenues
|
|
$
|
—
|
|
|
$
|
22,264
|
|
|
$
|
3,816,686
|
|
|
$
|
(22,020
|
)
|
|
$
|
3,816,930
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenues
|
|
—
|
|
|
21,165
|
|
|
2,133,958
|
|
|
(22,020
|
)
|
|
2,133,103
|
|
|||||
Selling, general and administrative expenses
|
|
—
|
|
|
1,099
|
|
|
506,398
|
|
|
—
|
|
|
507,497
|
|
|||||
Other operating expenses
|
|
—
|
|
|
167
|
|
|
473,709
|
|
|
—
|
|
|
473,876
|
|
|||||
Total operating expenses
|
|
—
|
|
|
22,431
|
|
|
3,114,065
|
|
|
(22,020
|
)
|
|
3,114,476
|
|
|||||
(Loss) income from operations
|
|
—
|
|
|
(167
|
)
|
|
702,621
|
|
|
—
|
|
|
702,454
|
|
|||||
OTHER EXPENSE (INCOME):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
—
|
|
|
191,080
|
|
|
15,144
|
|
|
—
|
|
|
206,224
|
|
|||||
Non-operating (income) expenses
|
|
(53,643
|
)
|
|
(8
|
)
|
|
(475
|
)
|
|
—
|
|
|
(54,126
|
)
|
|||||
Earnings from consolidated subsidiaries
|
|
(308,864
|
)
|
|
(688,126
|
)
|
|
—
|
|
|
996,990
|
|
|
—
|
|
|||||
Total other (income) expense
|
|
(362,507
|
)
|
|
(497,054
|
)
|
|
14,669
|
|
|
996,990
|
|
|
152,098
|
|
|||||
Income (loss) before provision for income taxes
|
|
362,507
|
|
|
496,887
|
|
|
687,952
|
|
|
(996,990
|
)
|
|
550,356
|
|
|||||
(Provision) benefit for income taxes
|
|
—
|
|
|
(188,023
|
)
|
|
174
|
|
|
—
|
|
|
(187,849
|
)
|
|||||
Net income (loss)
|
|
$
|
362,507
|
|
|
$
|
308,864
|
|
|
$
|
688,126
|
|
|
$
|
(996,990
|
)
|
|
$
|
362,507
|
|
Total other comprehensive income (loss)
|
|
4,670
|
|
|
1,173
|
|
|
—
|
|
|
(1,173
|
)
|
|
4,670
|
|
|||||
Comprehensive income (loss)
|
|
$
|
367,177
|
|
|
$
|
310,037
|
|
|
$
|
688,126
|
|
|
$
|
(998,163
|
)
|
|
$
|
367,177
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Revenues
|
|
$
|
—
|
|
|
$
|
15,483
|
|
|
$
|
3,616,464
|
|
|
$
|
(22,730
|
)
|
|
$
|
3,609,217
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenues
|
|
—
|
|
|
14,389
|
|
|
2,193,090
|
|
|
(22,730
|
)
|
|
2,184,749
|
|
|||||
Selling, general and administrative expenses
|
|
—
|
|
|
1,094
|
|
|
485,692
|
|
|
—
|
|
|
486,786
|
|
|||||
Other operating expenses
|
|
—
|
|
|
245
|
|
|
405,014
|
|
|
—
|
|
|
405,259
|
|
|||||
Total operating expenses
|
|
—
|
|
|
15,728
|
|
|
3,083,796
|
|
|
(22,730
|
)
|
|
3,076,794
|
|
|||||
(Loss) income from operations
|
|
—
|
|
|
(245
|
)
|
|
532,668
|
|
|
—
|
|
|
532,423
|
|
|||||
OTHER EXPENSE (INCOME):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
—
|
|
|
180,044
|
|
|
13,007
|
|
|
—
|
|
|
193,051
|
|
|||||
Non-operating (income) expenses
|
|
(1,439
|
)
|
|
9,462
|
|
|
(578
|
)
|
|
—
|
|
|
7,445
|
|
|||||
Earnings from consolidated subsidiaries
|
|
(208,601
|
)
|
|
(521,670
|
)
|
|
—
|
|
|
730,271
|
|
|
—
|
|
|||||
Total other (income) expense
|
|
(210,040
|
)
|
|
(332,164
|
)
|
|
12,429
|
|
|
730,271
|
|
|
200,496
|
|
|||||
Income (loss) before provision for income taxes
|
|
210,040
|
|
|
331,919
|
|
|
520,239
|
|
|
(730,271
|
)
|
|
331,927
|
|
|||||
(Provision) benefit for income taxes
|
|
—
|
|
|
(123,318
|
)
|
|
1,431
|
|
|
—
|
|
|
(121,887
|
)
|
|||||
Net income (loss)
|
|
$
|
210,040
|
|
|
$
|
208,601
|
|
|
$
|
521,670
|
|
|
$
|
(730,271
|
)
|
|
$
|
210,040
|
|
Total other comprehensive (loss) income
|
|
(11,532
|
)
|
|
(11,464
|
)
|
|
—
|
|
|
11,464
|
|
|
(11,532
|
)
|
|||||
Comprehensive income (loss)
|
|
$
|
198,508
|
|
|
$
|
197,137
|
|
|
$
|
521,670
|
|
|
$
|
(718,807
|
)
|
|
$
|
198,508
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
938
|
|
|
$
|
(311,239
|
)
|
|
$
|
1,158,769
|
|
|
$
|
—
|
|
|
$
|
848,468
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
|
—
|
|
|
(443
|
)
|
|
(587,889
|
)
|
|
—
|
|
|
(588,332
|
)
|
|||||
Purchase of investments
|
|
(692,147
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(692,147
|
)
|
|||||
Proceeds from maturity of investments
|
|
492,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
492,500
|
|
|||||
Change in advances – affiliates
|
|
4,382
|
|
|
245,866
|
|
|
—
|
|
|
(250,248
|
)
|
|
—
|
|
|||||
Other investing activities, net
|
|
52,500
|
|
|
39,830
|
|
|
(22,101
|
)
|
|
—
|
|
|
70,229
|
|
|||||
Net cash (used in) provided by investing activities
|
|
(142,765
|
)
|
|
285,253
|
|
|
(609,990
|
)
|
|
(250,248
|
)
|
|
(717,750
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in advances – affiliates
|
|
—
|
|
|
291,862
|
|
|
(542,110
|
)
|
|
250,248
|
|
|
—
|
|
|||||
Change in book overdraft
|
|
—
|
|
|
9,131
|
|
|
—
|
|
|
—
|
|
|
9,131
|
|
|||||
Other financing activities, net
|
|
(82
|
)
|
|
(19,042
|
)
|
|
(6,668
|
)
|
|
—
|
|
|
(25,792
|
)
|
|||||
Net cash (used in) provided by financing activities
|
|
(82
|
)
|
|
281,951
|
|
|
(548,778
|
)
|
|
250,248
|
|
|
(16,661
|
)
|
|||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
|
(141,909
|
)
|
|
255,965
|
|
|
1
|
|
|
—
|
|
|
114,057
|
|
|||||
CASH AND CASH EQUIVALENTS, beginning of period
|
|
657,289
|
|
|
1,285,266
|
|
|
727
|
|
|
—
|
|
|
1,943,282
|
|
|||||
CASH AND CASH EQUIVALENTS, end of period
|
|
$
|
515,380
|
|
|
$
|
1,541,231
|
|
|
$
|
728
|
|
|
$
|
—
|
|
|
$
|
2,057,339
|
|
|
|
Parent
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
930
|
|
|
$
|
(240,366
|
)
|
|
$
|
993,096
|
|
|
$
|
—
|
|
|
$
|
753,660
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
|
—
|
|
|
(5,790
|
)
|
|
(693,835
|
)
|
|
—
|
|
|
(699,625
|
)
|
|||||
Purchase of investments
|
|
(462,289
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(462,289
|
)
|
|||||
Proceeds from maturity of investments
|
|
537,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
537,500
|
|
|||||
Change in advances - affiliates
|
|
18,039
|
|
|
264,367
|
|
|
—
|
|
|
(282,406
|
)
|
|
—
|
|
|||||
Other investing activities, net
|
|
—
|
|
|
(64,941
|
)
|
|
(10,653
|
)
|
|
—
|
|
|
(75,594
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
93,250
|
|
|
193,636
|
|
|
(704,488
|
)
|
|
(282,406
|
)
|
|
(700,008
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in advances - affiliates
|
|
—
|
|
|
—
|
|
|
(282,406
|
)
|
|
282,406
|
|
|
—
|
|
|||||
Change in book overdraft
|
|
—
|
|
|
14,081
|
|
|
—
|
|
|
—
|
|
|
14,081
|
|
|||||
Proceeds from debt issuance, net of discount
|
|
—
|
|
|
1,497,500
|
|
|
—
|
|
|
—
|
|
|
1,497,500
|
|
|||||
Retirement of long-term debt
|
|
—
|
|
|
(535,792
|
)
|
|
—
|
|
|
—
|
|
|
(535,792
|
)
|
|||||
Other financing activities, net
|
|
54,307
|
|
|
(33,296
|
)
|
|
(6,222
|
)
|
|
—
|
|
|
14,789
|
|
|||||
Net cash provided by (used in) financing activities
|
|
54,307
|
|
|
942,493
|
|
|
(288,628
|
)
|
|
282,406
|
|
|
990,578
|
|
|||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
148,487
|
|
|
895,763
|
|
|
(20
|
)
|
|
—
|
|
|
1,044,230
|
|
|||||
CASH AND CASH EQUIVALENTS,
beginning of period
|
|
507,849
|
|
|
287,942
|
|
|
740
|
|
|
—
|
|
|
796,531
|
|
|||||
CASH AND CASH EQUIVALENTS, end of period
|
|
$
|
656,336
|
|
|
$
|
1,183,705
|
|
|
$
|
720
|
|
|
$
|
—
|
|
|
$
|
1,840,761
|
|
14.
|
Subsequent Events:
|
•
|
the ability of our vendors to supply the handsets we need in the time frames we require;
|
•
|
our and our competitors' current and planned promotions and marketing, sales and other initiatives and our ability to respond to and support them;
|
•
|
our ability to manage our networks to deliver the services, content, service quality and speed our customers expect and demand and to maintain and increase the capacity of our networks and business systems to satisfy the demands of our customers and the demands placed by devices on our networks;
|
•
|
the highly competitive nature of our industry and changes in the competitive landscape;
|
•
|
our ability to successfully combine with T-Mobile and achieve the cost and capital expenditures savings and synergies we expect;
|
•
|
our ability to remain focused and keep all employees focused on the business during the pendency of the T-Mobile transaction;
|
•
|
the current economic environment in the United States; disruptions to the credit and financial markets in the United States; and contractions or limited growth on consumer spending as a result of the uncertainty in the United States economy;
|
•
|
our ability to manage our growth, achieve planned growth, manage churn rates, maintain our cost structure and achieve additional economies of scale;
|
•
|
our ability to negotiate and maintain acceptable agreements with our suppliers and vendors, including roaming arrangements;
|
•
|
the seasonality of our business and any failure to have strong customer growth in the first and fourth quarters;
|
•
|
the rates, nature, collectability and applicability of taxes and regulatory fees on the services we provide and increases or changes in taxes and regulatory fees or the services to, or the manner in, which such taxes and fees are applied, calculated, or collected;
|
•
|
the rapid technological changes in our industry, our ability to adapt, respond and deploy new technologies and successfully offer new services using such new technology;
|
•
|
our ability to fulfill the demands and expectations of our customers, provide the customer care our customers want, expect, or demand, secure the products, services, applications, content and network infrastructure equipment we need, or which our customers or potential customers want, expect or demand;
|
•
|
the availability of additional spectrum, our ability to secure additional spectrum, or secure it at acceptable prices, when we need it;
|
•
|
our ability to adequately defend against suits filed by others and to enforce or protect our intellectual property rights;
|
•
|
our capital structure, including our indebtedness amounts, the limitations imposed by the covenants in the documents governing our indebtedness and the maintenance of our financial and disclosure controls and procedures;
|
•
|
our ability to attract and retain key members of management and train personnel;
|
•
|
our reliance on third parties to provide distribution, products, software content and services that are integral, used or sold by our business and the ability of our suppliers to perform, develop and timely provide us with technological developments, products and services we need to remain competitive;
|
•
|
possible disruptions or intrusions of our network, billing, operational support and customer care systems which may limit or disrupt our ability to provide service or which may cause disclosure or improper use of our customer's information and the associated harm to our customers, our systems, our reputation and our goodwill;
|
•
|
governmental regulation affecting our services and changes in government regulation, and the costs of compliance and our failure to comply with such regulations; and
|
•
|
other factors described under “Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2011
as updated or supplemented under “Part II, Item 1A. Risk Factors” in each of our subsequent Quarterly Reports on Form 10-Q as filed with the SEC, including this Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.
|
•
|
Cell Site Costs.
We incur expenses for the rent of cell sites, network facilities, engineering operations, field technicians and related utility and maintenance charges.
|
•
|
Interconnection Costs.
We pay other telecommunications companies and third-party providers for leased facilities and usage-based charges for transporting and terminating network traffic from our cell sites and switching centers. We have pre-negotiated rates for transport and termination of calls originated by our customers, including negotiated interconnection agreements with relevant exchange carriers in each of our service areas.
|
•
|
Variable Long Distance.
We pay charges to other telecommunications companies for long distance service provided to our customers. These variable charges are based on our customers’ usage, applied at pre-negotiated rates with the long distance carriers.
|
•
|
Customer Support.
We pay charges to nationally recognized third-party providers for customer care, billing and payment processing services.
|
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
|
2012
|
|
2011
|
|
Change
|
|||||
|
|
(in thousands)
|
|
|
|||||||
REVENUES:
|
|
|
|
|
|
|
|||||
Service revenues
|
|
$
|
1,121,957
|
|
|
$
|
1,131,054
|
|
|
(1
|
%)
|
Equipment revenues
|
|
137,203
|
|
|
74,334
|
|
|
85
|
%
|
||
Total revenues
|
|
1,259,160
|
|
|
1,205,388
|
|
|
4
|
%
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||
Cost of service (excluding depreciation and amortization disclosed separately below)
(1)
|
|
373,032
|
|
|
382,033
|
|
|
(2
|
%)
|
||
Cost of equipment
|
|
265,940
|
|
|
343,473
|
|
|
(23
|
%)
|
||
Selling, general and administrative expenses (excluding depreciation and amortization disclosed separately below)
(1)
|
|
163,409
|
|
|
162,459
|
|
|
1
|
%
|
||
Depreciation and amortization
|
|
163,089
|
|
|
139,309
|
|
|
17
|
%
|
||
Loss on disposal of assets
|
|
1,452
|
|
|
1,283
|
|
|
13
|
%
|
||
Total operating expenses
|
|
966,922
|
|
|
1,028,557
|
|
|
(6
|
%)
|
||
Income from operations
|
|
$
|
292,238
|
|
|
$
|
176,831
|
|
|
65
|
%
|
(1)
|
Cost of service and selling, general and administrative expenses include stock-based compensation expense. For the
three months ended
September 30, 2012
, cost of service includes $0.7 million and selling, general and administrative expenses includes $8.5 million of stock-based compensation expense. For the
three months ended
September 30, 2011
, cost of service includes $0.8 million and selling, general and administrative expenses includes $9.1 million of stock-based compensation expense.
|
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
|
2012
|
|
2011
|
|
Change
|
|||||
|
|
(in thousands)
|
|
|
|||||||
Interest expense
|
|
$
|
66,655
|
|
|
$
|
69,511
|
|
|
(4
|
%)
|
Gain on settlement
|
|
52,500
|
|
|
—
|
|
|
100
|
%
|
||
Provision for income taxes
|
|
85,981
|
|
|
38,618
|
|
|
123
|
%
|
||
Net income
|
|
192,667
|
|
|
69,326
|
|
|
178
|
%
|
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
|
2012
|
|
2011
|
|
Change
|
|||||
|
|
(in thousands)
|
|
|
|||||||
REVENUES:
|
|
|
|
|
|
|
|||||
Service revenues
|
|
$
|
3,439,678
|
|
|
$
|
3,294,563
|
|
|
4
|
%
|
Equipment revenues
|
|
377,252
|
|
|
314,654
|
|
|
20
|
%
|
||
Total revenues
|
|
3,816,930
|
|
|
3,609,217
|
|
|
6
|
%
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||
Cost of service (excluding depreciation and amortization disclosed separately below)
(1)
|
|
1,130,377
|
|
|
1,089,480
|
|
|
4
|
%
|
||
Cost of equipment
|
|
1,002,726
|
|
|
1,095,269
|
|
|
(8
|
%)
|
||
Selling, general and administrative expenses (excluding depreciation and amortization disclosed separately below)
(1)
|
|
507,497
|
|
|
486,786
|
|
|
4
|
%
|
||
Depreciation and amortization
|
|
469,258
|
|
|
402,528
|
|
|
17
|
%
|
||
Loss on disposal of assets
|
|
4,618
|
|
|
2,731
|
|
|
69
|
%
|
||
Total operating expenses
|
|
3,114,476
|
|
|
3,076,794
|
|
|
1
|
%
|
||
Income from operations
|
|
$
|
702,454
|
|
|
$
|
532,423
|
|
|
32
|
%
|
(1)
|
Cost of service and selling, general and administrative expenses include stock-based compensation expense. For the
nine months ended
September 30, 2012
, cost of service includes $2.3 million and selling, general and administrative expenses includes $26.4 million of stock-based compensation expense. For the
nine months ended
September 30, 2011
, cost of service includes $2.6 million and selling, general and administrative expenses includes $29.5 million of stock-based compensation expense.
|
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
|
2012
|
|
2011
|
|
Change
|
|||||
|
|
(in thousands)
|
|
|
|||||||
Interest expense
|
|
$
|
206,224
|
|
|
$
|
193,051
|
|
|
7
|
%
|
Gain on settlement
|
|
52,500
|
|
|
—
|
|
|
100
|
%
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
9,536
|
|
|
(100
|
%)
|
||
Provision for income taxes
|
|
187,849
|
|
|
121,887
|
|
|
54
|
%
|
||
Net income
|
|
362,507
|
|
|
210,040
|
|
|
73
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Customers:
|
|
|
|
|
|
|
|
|
||||||||
End of period
|
|
8,979,960
|
|
|
9,149,249
|
|
|
8,979,960
|
|
|
9,149,249
|
|
||||
Net additions (losses)
|
|
(312,291
|
)
|
|
69,384
|
|
|
(366,699
|
)
|
|
994,139
|
|
||||
Churn:
|
|
|
|
|
|
|
|
|
||||||||
Average monthly rate
|
|
3.7
|
%
|
|
4.5
|
%
|
|
3.4
|
%
|
|
3.9
|
%
|
||||
ARPU
|
|
$
|
40.50
|
|
|
$
|
40.80
|
|
|
$
|
40.56
|
|
|
$
|
40.57
|
|
CPGA
|
|
$
|
202.24
|
|
|
$
|
193.95
|
|
|
$
|
211.98
|
|
|
$
|
175.30
|
|
CPU
|
|
$
|
18.38
|
|
|
$
|
19.52
|
|
|
$
|
19.90
|
|
|
$
|
19.41
|
|
Adjusted EBITDA (in thousands)
|
|
$
|
466,035
|
|
|
$
|
327,321
|
|
|
$
|
1,205,086
|
|
|
$
|
969,824
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
(in thousands, except average number of customers and ARPU)
|
||||||||||||||
Calculation of Average Revenue Per User (ARPU):
|
|
|
|
|
|
|
|
|
||||||||
Service revenues
|
|
$
|
1,121,957
|
|
|
$
|
1,131,054
|
|
|
$
|
3,439,678
|
|
|
$
|
3,294,563
|
|
Less: Pass through charges
|
|
(12,507
|
)
|
|
(19,785
|
)
|
|
(44,656
|
)
|
|
(61,795
|
)
|
||||
Net service revenues
|
|
$
|
1,109,450
|
|
|
$
|
1,111,269
|
|
|
$
|
3,395,022
|
|
|
$
|
3,232,768
|
|
Divided by: Average number of customers
|
|
9,131,181
|
|
|
9,079,982
|
|
|
9,300,428
|
|
|
8,853,141
|
|
||||
ARPU
|
|
$
|
40.50
|
|
|
$
|
40.80
|
|
|
$
|
40.56
|
|
|
$
|
40.57
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
(in thousands, except gross customer additions and CPGA)
|
||||||||||||||
Calculation of Cost Per Gross Addition (CPGA):
|
|
|
|
|
|
|
|
|
||||||||
Selling expenses
|
|
$
|
78,770
|
|
|
$
|
88,702
|
|
|
$
|
253,481
|
|
|
$
|
259,086
|
|
Less: Equipment revenues
|
|
(137,203
|
)
|
|
(74,334
|
)
|
|
(377,252
|
)
|
|
(314,654
|
)
|
||||
Add: Equipment revenue not associated with new customers
|
|
96,911
|
|
|
58,026
|
|
|
275,561
|
|
|
192,615
|
|
||||
Add: Cost of equipment
|
|
265,940
|
|
|
343,473
|
|
|
1,002,726
|
|
|
1,095,269
|
|
||||
Less: Equipment costs not associated with new customers
|
|
(164,521
|
)
|
|
(163,610
|
)
|
|
(629,915
|
)
|
|
(515,743
|
)
|
||||
Gross addition expenses
|
|
$
|
139,897
|
|
|
$
|
252,257
|
|
|
$
|
524,601
|
|
|
$
|
716,573
|
|
Divided by: Gross customer additions
|
|
691,736
|
|
|
1,300,611
|
|
|
2,474,721
|
|
|
4,087,582
|
|
||||
CPGA
|
|
$
|
202.24
|
|
|
$
|
193.95
|
|
|
$
|
211.98
|
|
|
$
|
175.30
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
(in thousands, except average number of customers and CPU)
|
||||||||||||||
Calculation of Cost Per User (CPU):
|
|
|
|
|
|
|
|
|
||||||||
Cost of service
|
|
$
|
373,032
|
|
|
$
|
382,033
|
|
|
$
|
1,130,377
|
|
|
$
|
1,089,480
|
|
Add: General and administrative expense
|
|
84,639
|
|
|
73,757
|
|
|
254,016
|
|
|
227,700
|
|
||||
Add: Net loss on equipment transactions unrelated to initial customer acquisition
|
|
67,610
|
|
|
105,584
|
|
|
354,354
|
|
|
323,128
|
|
||||
Less: Stock-based compensation expense included in cost of service and general and administrative expense
|
|
(9,256
|
)
|
|
(9,898
|
)
|
|
(28,756
|
)
|
|
(32,142
|
)
|
||||
Less: Pass through charges
|
|
(12,507
|
)
|
|
(19,785
|
)
|
|
(44,656
|
)
|
|
(61,795
|
)
|
||||
Total costs used in the calculation of CPU
|
|
$
|
503,518
|
|
|
$
|
531,691
|
|
|
$
|
1,665,335
|
|
|
$
|
1,546,371
|
|
Divided by: Average number of customers
|
|
9,131,181
|
|
|
9,079,982
|
|
|
9,300,428
|
|
|
8,853,141
|
|
||||
CPU
|
|
$
|
18.38
|
|
|
$
|
19.52
|
|
|
$
|
19.90
|
|
|
$
|
19.41
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Calculation of Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
192,667
|
|
|
$
|
69,326
|
|
|
$
|
362,507
|
|
|
$
|
210,040
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
163,089
|
|
|
139,309
|
|
|
469,258
|
|
|
402,528
|
|
||||
Loss on disposal of assets
|
|
1,452
|
|
|
1,283
|
|
|
4,618
|
|
|
2,731
|
|
||||
Stock-based compensation expense
|
|
9,256
|
|
|
9,898
|
|
|
28,756
|
|
|
32,142
|
|
||||
Interest expense
|
|
66,655
|
|
|
69,511
|
|
|
206,224
|
|
|
193,051
|
|
||||
Interest income
|
|
(460
|
)
|
|
(531
|
)
|
|
(1,208
|
)
|
|
(1,557
|
)
|
||||
Other (income) expense, net
|
|
(105
|
)
|
|
(93
|
)
|
|
(418
|
)
|
|
(534
|
)
|
||||
Gain on settlement
|
|
(52,500
|
)
|
|
—
|
|
|
(52,500
|
)
|
|
—
|
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,536
|
|
||||
Provision for income taxes
|
|
85,981
|
|
|
38,618
|
|
|
187,849
|
|
|
121,887
|
|
||||
Adjusted EBITDA
|
|
$
|
466,035
|
|
|
$
|
327,321
|
|
|
$
|
1,205,086
|
|
|
$
|
969,824
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
$
|
391,898
|
|
|
$
|
271,560
|
|
|
$
|
848,468
|
|
|
$
|
753,660
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
66,655
|
|
|
69,511
|
|
|
206,224
|
|
|
193,051
|
|
||||
Non-cash interest expense
|
|
(1,899
|
)
|
|
(2,125
|
)
|
|
(5,563
|
)
|
|
(6,141
|
)
|
||||
Interest income
|
|
(460
|
)
|
|
(531
|
)
|
|
(1,208
|
)
|
|
(1,557
|
)
|
||||
Other (income) expense, net
|
|
(105
|
)
|
|
(93
|
)
|
|
(418
|
)
|
|
(534
|
)
|
||||
Benefit (provision) for uncollectible accounts receivable
|
|
82
|
|
|
(121
|
)
|
|
(3,155
|
)
|
|
(382
|
)
|
||||
Deferred rent expense
|
|
(4,058
|
)
|
|
(5,626
|
)
|
|
(13,432
|
)
|
|
(13,457
|
)
|
||||
Cost of abandoned cell sites
|
|
(417
|
)
|
|
(270
|
)
|
|
(1,357
|
)
|
|
(650
|
)
|
||||
Gain on sale and maturity of investments
|
|
89
|
|
|
122
|
|
|
154
|
|
|
441
|
|
||||
Accretion of asset retirement obligations
|
|
(1,681
|
)
|
|
(1,436
|
)
|
|
(4,900
|
)
|
|
(4,198
|
)
|
||||
Provision for income taxes
|
|
85,981
|
|
|
38,618
|
|
|
187,849
|
|
|
121,887
|
|
||||
Deferred income taxes
|
|
(84,005
|
)
|
|
(37,895
|
)
|
|
(191,243
|
)
|
|
(119,290
|
)
|
||||
Changes in working capital
|
|
13,955
|
|
|
(4,393
|
)
|
|
183,667
|
|
|
46,994
|
|
||||
Adjusted EBITDA
|
|
$
|
466,035
|
|
|
$
|
327,321
|
|
|
$
|
1,205,086
|
|
|
$
|
969,824
|
|
•
|
the effects of the Transaction on our dealers, vendors, suppliers, customers, our equity and debt holders and our employees, including our ability to retain our key employees and members of management;
|
•
|
T-Mobile's and our ability to integrate successfully our and their business and realize the expected cost and capital expenditures savings and synergies and other benefits from the Transaction within the expected time frames;
|
•
|
the intense competition from larger competitors that have greater resources than the combined company;
|
•
|
the difficulty migrating our customers to the T-Mobile network or retaining customers on our network, using the combined Company's services, customer care and billing platforms;
|
•
|
the combined company's ability to manage the expanded and geographically dispersed business, operations and employee base of the combined company following the Transaction;
|
•
|
the incurrence of substantial expenses related to the Transaction and integration, which are difficult to estimate; and
|
•
|
the incurrence of substantial indebtedness in connection with the Transaction and the terms of that indebtedness.
|
•
|
uncertain revenues and expenses, including difficulty in achieving projected synergies, with the result that we may not realize the growth in revenues, anticipated cost structure, profitability, or return on investment that we expect;
|
•
|
difficulty integrating the acquired business, technologies, services, spectrum, products, operations and personnel of the acquired businesses;
|
•
|
difficulty maintaining uniform standards, controls, policies and procedures;
|
•
|
difficulty converting customers to or retaining customers with our network, services, customer care and billing platforms;
|
•
|
disruption of ongoing business;
|
•
|
impact on our cash and available credit lines for use in financing future growth and working capital needs;
|
•
|
triggering the change in control provision in our senior secured credit facility, the indentures and supplemental indentures governing our senior notes, and the change in control agreements of our officers, and acceleration of vesting equity and other incentive awards under our equity incentive plans;
|
•
|
obligations imposed on us by counterparties in such transactions that limit our ability to obtain additional financing, our ability to compete in geographic areas or specific lines of business, or other aspects of our operational flexibility;
|
•
|
increasing cost and complexity of assuring the implementation and maintenance of adequate internal control and disclosure controls and procedures, and of obtaining the reports and attestations required under the Exchange Act;
|
•
|
loss of or inability to attract and retain key personnel;
|
•
|
delayed implementation of services, products and technology pending any regulatory approval of such transaction;
|
•
|
impairment of relationships with employees, customers, suppliers, distribution channels or vendors;
|
•
|
difficulties in consolidating and preparing our financial statements due to poor accounting records, weak financial controls and, in some cases, procedures at acquired entities not based on U.S. GAAP or in compliance with financial or disclosure controls required under Sarbanes-Oxley;
|
•
|
changes to our business, our distribution strategies, our business model or our service plans;
|
•
|
inability to predict or anticipate market developments and capital commitments relating to the transaction; and
|
•
|
with respect to any spectrum acquisition in a foreign country, difficulties and expenditures associated with operating in a foreign jurisdiction.
|
•
|
the different types of products, services, applications and content offered and the prices for and range of service plans, products, services, applications and content;
|
•
|
service content, features, data speeds, technology, coverage, compatible handset options, distribution, service areas, network speed, capacity, coverage, operability and quality;
|
•
|
customer perceptions;
|
•
|
competition and competitive offers;
|
•
|
economic conditions;
|
•
|
the pricing structures used by our competitors; and
|
•
|
customer care levels.
|
•
|
our customers' demand for our products and services and our ability, or our suppliers' ability, to obtain or offer and provide products, services, applications or content which our current or prospective customers demand, want, expect or need, or for prices that they are willing to pay;
|
•
|
competition from existing or new competitors;
|
•
|
our ability to differentiate our products, services, applications or content from the products, services, applications or content offered by our competitors;
|
•
|
higher than anticipated churn, or lower than anticipated gross additions;
|
•
|
our ability to increase our network capacity, manage our network, or maintain network reliability to keep up with and meet increasing customer demand;
|
•
|
our ability to upgrade our network in the future to provide the products, services, applications or content that our customers want, expect or demand;
|
•
|
our ability to offer data services at speeds and prices with capacity that our customers want, expect or demand and that are attractive compared to the data services offered by our competitors;
|
•
|
limitations in our customer service, billing and other systems;
|
•
|
our ability to manage our inventory and adequately forecast our inventory needs, such as handset quantity, quality and type, and to meet customer demand for our products, services, applications or content;
|
•
|
our ability to provide service in areas or provide applications or content wanted, expected or demanded by our current and prospective customers;
|
•
|
our ability to attract, retain and appropriately incentivize our distribution channels, including our indirect agents and dealers for our products and services;
|
•
|
our ability to increase the relevant coverage areas in our existing markets, to enter into or expand our roaming arrangements to areas that are important to our customers or to allow us to offer services at all or at rates which are attractive to our current and prospective customers;
|
•
|
our ability to maintain our desired average revenue per user (ARPU);
|
•
|
our ability to overcome market saturation or competition;
|
•
|
our ability to manage the costs and usage of our services;
|
•
|
unfavorable United States economic conditions, which may have a disproportionately negative impact on certain portions of our customer base including an impact on their ability to buy new handsets or pay for our services;
|
•
|
changes in the demographics of our markets; and
|
•
|
adverse changes in the legislative and regulatory environment that may limit our ability to differentiate our services or grow our customer base.
|
•
|
network issues, including network coverage, network reliability, technology upgrades, data speeds, network capacity, network technology, network responsiveness, network security breaches, network congestion and network availability;
|
•
|
poor call quality, lack of in-building coverage and dropped and blocked calls;
|
•
|
limitations in our customer service, billing and other systems;
|
•
|
geographic coverage, including roaming coverage, for all our services, including 4G LTE, at affordable rates, which has historically been less extensive than our competitors;
|
•
|
affordability and unfavorable United States economic conditions, which may have a disproportionately negative impact on certain portions of our customer base including an impact on their ability to buy new handsets or pay for our services;
|
•
|
supplier, vendor and distributor failures;
|
•
|
customer perceptions of, demand for, and our prices for, our products, services, content, applications and offerings;
|
•
|
customer care concerns, including reliance on automated customer service solutions that may not provide customers with the personal attention they desire;
|
•
|
our ability to differentiate our products and services from our competitors;
|
•
|
our ability to offer products, including smartphones, tablets, connected devices, services, content, applications and data services, with features, applications, content, and operating systems that our customers expect, want or demand at prices our customers will pay;
|
•
|
our rate of growth;
|
•
|
our rate plans, distribution model, and incentives to our direct dealers and agents;
|
•
|
handset, application, and content selection and related issues, including lack of access, or early access, to the newest or iconic handsets, innovative wireless applications, and content, and handset prices and handset problems, including greater demand by our customers;
|
•
|
the types, make-up and nature of our service plans and our marketing and promotional offers;
|
•
|
wireless number portability requirements that allow customers to keep their wireless phone numbers when switching between service providers;
|
•
|
our inability to offer bundled services or services offered by our competitors; and
|
•
|
competition and competitive offers by other wireless broadband mobile service providers.
|
•
|
physical damage, power surges or outages or equipment failure;
|
•
|
vendor or supplier failures or delays;
|
•
|
viruses, malware, worms, software defects, Trojan horses, unsolicited mass advertising, denial of service and other malicious or abusive attacks by third parties, including cyber attacks or other breaches of network or information technology security;
|
•
|
fraud, including customer credit card fraud, subscription or dealer fraud;
|
•
|
unauthorized use of our or our provider's networks;
|
•
|
unauthorized access to our information technology, billing, customer care, provisioning systems and networks and those of our vendors and other providers;
|
•
|
human error;
|
•
|
demands placed on our network by devices, services or content demanded by our customers;
|
•
|
disruptions, damage or unauthorized access beyond our control, including disruptions or damage, or unauthorized access caused by criminal or terrorist activities, theft, natural disasters, such as earthquakes, hurricanes, floods, or fire, power surges, or equipment failure; and
|
•
|
failures in operational support systems.
|
•
|
actual or anticipated fluctuations in our or our competitors' operating and financial results;
|
•
|
introduction of new products and services by us or our competitors or changes in service plans or pricing by us or our competitors;
|
•
|
analyst projections, predictions and forecasts, analyst target prices for our securities and changes in, or our failure to meet, securities analysts' expectations;
|
•
|
entry of new competitors into our markets or perceptions of increased price competition, including a price war;
|
•
|
our performance, including subscriber growth, and our financial and operational metric performance;
|
•
|
concentration of offered services and assets in the U.S., in particular limited major metropolitan areas;
|
•
|
changes in our credit rating or future prospects;
|
•
|
disruptions of our operations or service providers necessary to our network operations;
|
•
|
seasonal effects on, or other variations in, our customer base and our business metrics, including churn and net gains;
|
•
|
market perceptions relating to our services, network, handsets and deployment of our 4G LTE platform and our access to iconic handsets, services, applications or content;
|
•
|
our ability to develop and market new and enhanced products and services on a timely basis that are attractive to our customers or that meet our customer's expectations or demands;
|
•
|
challenges to our intellectual property rights or claims that we infringe the intellectual property rights of others;
|
•
|
pending or threatened litigation or regulatory investigations;
|
•
|
adoption of or changes in governmental regulations and new accounting standards;
|
•
|
conditions and trends in the communications and high technology markets;
|
•
|
adverse publicity regarding our Company;
|
•
|
announcements of, rumors of, predictions of, or the consummation of mergers, acquisitions, sales, strategic alliances or significant agreements, or resources of, or lack of, any of the foregoing, by us, about us, or by or about our competitors, including the current announcement regarding the transaction with T-Mobile;
|
•
|
announcements by us or competitors of significant contracts, commercial relationships or capital commitments;
|
•
|
announcement by us regarding the entering into, or termination of, material transactions or agreements;
|
•
|
sales of our common stock by our directors, executive officers, affiliates, significant stockholders, or us;
|
•
|
the amount of short interest in our securities;
|
•
|
volatility in stock market prices and volumes, which is particularly common among securities of telecommunications companies;
|
•
|
market perceptions of the wireless telecommunications industry and valuation models for us and the industry;
|
•
|
the general state of the U.S. and world economies;
|
•
|
the availability or perceived availability of additional capital in general and our access to such capital;
|
•
|
availability of additional spectrum, whether by the announcement, commencement, bidding and closing of auctions for new spectrum or acquisitions of other businesses;
|
•
|
recruitment or departure of key personnel, management or board members; and
|
•
|
failure to timely file periodic reports or reports of material weaknesses in financial or disclosure controls.
|
•
|
incurring additional debt;
|
•
|
paying dividends, redeeming capital stock or making other restricted payments or investments;
|
•
|
selling or buying assets, properties or licenses;
|
•
|
developing assets, properties or licenses which we have or in the future may procure;
|
•
|
creating liens on assets;
|
•
|
participating in future FCC auctions of spectrum or private sales of spectrum;
|
•
|
engaging in mergers, acquisitions, business combinations, or other transactions such as the T-Mobile transaction;
|
•
|
merging, consolidating or disposing of assets;
|
•
|
entering into transactions with affiliates; and
|
•
|
placing restrictions on the ability of subsidiaries to pay dividends or make other payments.
|
•
|
introduction of new products and services by us or our competitors, changes in service plans or pricing by us or our competitors, or promotional offers;
|
•
|
our ability to maintain our current cost structure; and
|
•
|
our ability to continue to grow our customer base and maintain our projected levels of churn.
|
•
|
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 competition, 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 communications 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.
|
•
|
authorize the issuance of preferred stock that can be created and issued by the board of directors without prior stockholder approval to increase the number of outstanding shares and deter or prevent a takeover attempt;
|
•
|
prohibit stockholder action by written consent, requiring all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
require stockholder meetings to be called only by the President or at the written request of a majority of the directors then in office and not the stockholders;
|
•
|
prohibit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;
|
•
|
provide that our board of directors is divided into three classes, each serving three-year terms; and
|
•
|
establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
|
Issuer Purchases of Equity Securities
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
Period
|
|
Total Number of
Shares Purchased
During Period
|
|
Average Price Paid
Per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Maximum Number
of Shares That May
Yet Be Purchased
Under the Plans or
Programs
|
|||||
July 1 – July 31
|
|
7,884
|
|
|
$
|
6.56
|
|
|
—
|
|
|
—
|
|
August 1 - August 31
|
|
42,314
|
|
|
$
|
9.48
|
|
|
—
|
|
|
—
|
|
September 1 – September 30
|
|
41,815
|
|
|
$
|
9.88
|
|
|
—
|
|
|
—
|
|
Total
|
|
92,013
|
|
|
$
|
9.41
|
|
|
—
|
|
|
—
|
|
Exhibit
Number
|
|
Description
|
2.1*
|
|
Business Combination Agreement, by and among Deutsche Telekom AG, T-Mobile USA, Inc., T-Mobile Global Zwischenholding GmbH, T-Mobile Global Holding GmbH and MetroPCS Communications, Inc., dated October 3, 2012 (Filed as Exhibit 2.1 to MetroPCS Communications, Inc.'s Current Report on Form 8-K filed on October 3, 2012, and incorporated by reference herein).
|
|
|
|
4.1*
|
|
Amendment No. 1 to the Rights Agreement, between MetroPCS Communications, Inc. and American Stock Transfer & Trust Company (Filed as Exhibit 4.1 to MetroPCS Communications, Inc.'s Current Report on Form 8-K filed on October 3, 2012, and incorporated by reference herein).
|
|
|
|
10.1
|
|
Form Change in Control Agreement Amendment
|
|
|
|
10.2
|
|
Form Amendment to the [Non-Employee Director][Employee] Restricted Stock Grant Agreement
|
|
|
|
10.3
|
|
Employee Restricted Stock Grant Agreement Pursuant to the Terms of the MetroPCS Communications, Inc. 2010 Equity Incentive Compensation Plan
|
|
|
|
10.4
|
|
Officer Annual Cash Performance Award Agreement
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
|
|
|
|
101
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
|
|
METROPCS COMMUNICATIONS, INC.
|
||
|
|
|
|
|
|
|
Date: October 30, 2012
|
|
|
|
By:
|
|
/s/ Roger D. Linquist
|
|
|
|
|
|
|
Roger D. Linquist
Chief Executive Officer and
Chairman of the Board
|
|
|
|
|
|
|
|
Date: October 30, 2012
|
|
|
|
By:
|
|
/s/ J. Braxton Carter
|
|
|
|
|
|
|
J. Braxton Carter
Chief Financial Officer and Vice Chairman
|
Exhibit
Number
|
|
Description
|
2.1*
|
|
Business Combination Agreement, by and among Deutsche Telekom AG, T-Mobile USA, Inc., T-Mobile Global Zwischenholding GmbH, T-Mobile Global Holding GmbH and MetroPCS Communications, Inc., dated October 3, 2012 (Filed as Exhibit 2.1 to MetroPCS Communications, Inc.'s Current Report on Form 8-K filed on October 3, 2012, and incorporated by reference herein).
|
|
|
|
4.1*
|
|
Amendment No. 1 to the Rights Agreement, between MetroPCS Communications, Inc. and American Stock Transfer & Trust Company (Filed as Exhibit 4.1 to MetroPCS Communications, Inc.'s Current Report on Form 8-K filed on October 3, 2012, and incorporated by reference herein).
|
|
|
|
10.1
|
|
Form Change in Control Agreement Amendment
|
|
|
|
10.2
|
|
Form Amendment to the [Non-Employee Director][Employee] Restricted Stock Grant Agreement
|
|
|
|
10.3
|
|
Employee Restricted Stock Grant Agreement Pursuant to the Terms of the MetroPCS Communications, Inc. 2010 Equity Incentive Compensation Plan
|
|
|
|
10.4
|
|
Officer Annual Cash Performance Award Agreement
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
|
|
|
|
101
|
|
XBRL Instance Document.
|
METROPCS COMMUNICATIONS, INC.
|
|
EMPLOYEE
|
||
|
|
|
|
|
Name (print):
|
|
|
Name (print):
|
|
Title:
|
|
|
|
|
1.
|
Any capitalized term used herein, and not otherwise defined herein, shall have the meaning set forth in the Agreements or the respective Plan attributable to each such Agreement.
|
|
|
|
METROPCS COMMUNICATIONS, INC.
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
||
|
|
|
Its:
|
Vesting Dates
|
Percentage of Restricted Stock
Vested on Such Vesting Date
|
Vesting Commencement Date
|
—%
|
12-month anniversary of Vesting Commencement Date
|
25%
|
Following the 12-month anniversary of the Vesting Commencement Date, each quarterly anniversary of the Vesting Commencement Date for 12 successive quarters
|
6.25%
|
|
|
|
METROPCS COMMUNICATIONS, INC.
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ J. Braxton Carter
|
||
|
|
|
J. Braxton Carter
CFO & Vice Chairman
|
1.
|
Plan Framework
|
2013 Annual Cash Performance Award
Target Opportunity
1
|
XXX% of Annual
Base Salary
2
|
||
2013 Measures
|
|
Metric Weightings
|
Allocation between Company and Individual Performance
|
Company/team Performance*
|
Gross Margin
|
30%
|
70%
|
Adjusted EBITDA per average subscriber
|
25%
|
||
Net Subscriber Additions
|
25%
|
||
Capital expenditures per ending subscriber
|
10%
|
||
Discretionary
|
10%
|
||
Individual Performance
|
|
30%
|
•
|
Achieving
minimum
performance - 0% payout
|
•
|
Achieving
target
performance - 100% payout
|
•
|
Achieving
maximum
performance - 200% payout
|
2013 Measure
|
Minimum Performance Amount/Level
|
Target Performance Amount/Level
|
Maximum Performance Amount/Level
|
Gross Margin
|
|
|
|
Adjusted EBITDA per average subscriber
|
|
|
|
Net Subscriber Additions
|
|
|
|
Capital expenditures per ending subscriber
|
|
|
|
2.
|
Eligibility
|
3.
|
Proration
|
4.
|
Leaves of Absence
|
5.
|
Repayments
|
6.
|
Award Not Exclusive
|
7.
|
No Guarantee of Employment
|
8.
|
Taxes
|
9.
|
Severability
|
10.
|
Assignment
|
11.
|
Amendment and Waiver
|
12.
|
Entire Agreement
|
13.
|
Governing Law: Venue
|
|
EMPLOYEE
:
Name:
Title:
|
|
|
|
COMPANY
:
[METROPCS COMMUNICATIONS, INC.]
By: Thomas Currier
Its: SVP Human Resources
|
|
|
|
COMPANY:
[Subsidiary entity, as applicable]
By:
Its:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of MetroPCS Communications, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: October 30, 2012
|
|
|
|
By:
|
/s/ Roger D. Linquist
|
|
|
|
|
|
|
Roger D. Linquist
Chief Executive Officer and
Chairman of the Board
|
1.
|
I have reviewed this quarterly report on Form 10-Q of MetroPCS Communications, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: October 30, 2012
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By:
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/s/ J. Braxton Carter
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J. Braxton Carter
Chief Financial Officer
and Vice Chairman
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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By:
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/s/ Roger D. Linquist
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Roger D. Linquist
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||||
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Chief Executive Officer and Chairman of the Board
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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By:
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/s/ J. Braxton Carter
|
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J. Braxton Carter
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||||
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Chief Financial Officer and Vice Chairman
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