MetroPCS Reports Second Quarter 2008 Results

"We are very pleased to see strong financial and operational results during the seasonally slow second quarter and in the current challenging economic environment. With year over year Consolidated Adjusted EBITDA growth of approximately 17%, and second quarter net subscriber additions of approximately 184 thousand, we are confident that our outlook for 2008 is achievable. We have been able to continue to grow our business and effectively manage our costs, while delivering profitable growth that builds long-term shareholder value. While continuing to invest in growing our market footprint and aggressively acquiring customers, consistent with our low-cost strategy, we again reported industry-leading low consolidated CPGA and CPU," said Roger D. Linquist, Chairman, President and Chief Executive Officer of MetroPCS.

"Not only have we continued to add new markets, but we continue to innovate and add to our service offerings. During the quarter we introduced MetroFlash; an exciting service that allows consumers to bring their existing compatible CDMA handsets and use them on the MetroPCS network. With rising prices, consumers are looking for ways to cut expenses and MetroFlash, along with our low cost, flat-rate, unlimited service plans, makes MetroPCS an affordable and compelling option.

"Our buildout of our Auction 66 Markets continues, and we look forward to our future launches of service in the New York and Boston metropolitan areas. We were very pleased to reach an important milestone in early July with the launch of service in our first Northeast market, Philadelphia, ahead of schedule. Similar to our upcoming launches of service in New York and Boston, the Philadelphia metropolitan area is a densely populated market and is ideal for MetroPCS' predictable, affordable and flexible service. We expect our Northeast markets represent a significant area of future growth for the Company," Linquist concluded.

For the second quarter of 2008, MetroPCS reported total revenues of approximately $679 million, an increase of 23% over the second quarter of 2007, and income from operations of approximately $136 million, an increase of approximately 3% when compared to the second quarter of 2007. The Company reported second quarter 2008 consolidated net income of $50 million, or $0.14 per common share, as compared to consolidated net income of $58 million for the same period in 2007. The second quarter 2008 results include an impairment charge of approximately $9 million related to the Company's previous investment in auction rate securities. On a non-GAAP basis excluding the impairment charge, consolidated net income would have been approximately $59 million, or $0.17 per common share.

Key Consolidated Financial and Operating Metrics

(in millions, except percentages, per share, per subscriber and subscriber amounts) Three Three Months Months Six Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Service revenues $ 599 $ 479 $ 1,161 $ 919 Total revenues $ 679 $ 551 $ 1,341 $ 1,088 Income from operations $ 136 $ 132 $ 248 $ 235 Net income $ 50 $ 58 $ 90 $ 94 Diluted net income per common share $ 0.14 $ 0.17 $ 0.25 $ 0.28 Consolidated Adjusted EBITDA(1) $ 210 $ 180 $ 388 $ 330 Consolidated Adjusted EBITDA as a percentage of service revenues 35.1% 37.6% 33.4% 35.9% ARPU(1) $ 41.77 $ 43.18 $ 41.98 $ 43.46 CPGA(1) $ 135.90 $ 124.79 $ 127.86 $ 115.87 CPU(1) $ 18.23 $ 18.01 $ 18.53 $ 18.28 Churn-Average Monthly Rate 4.5% 4.8% 4.3% 4.4% Consolidated Subscribers End of Period 4,598,049 3,549,916 4,598,049 3,549,916 Net Additions 183,530 154,713 635,263 608,930

(1) - For a reconciliation of Non-GAAP financial measures, please refer to the section entitled "Definition of Terms and Reconciliation of Non-GAAP Financial Measures" included at the end of this release.

Consolidated Comparison of Second Quarter Ended June 2008 versus Second Quarter Ended June 2007

MetroPCS reported service revenues of approximately $599 million, a 25% increase when compared to the prior year second quarter, which was primarily attributable to the net addition of over 1 million subscribers since the second quarter of 2007. Equipment revenues increased by $8 million, or approximately 12%, for the quarter primarily as a result of a 20% increase in consolidated gross additions as well as an increase in the sale of handsets to existing subscribers, partially offset by the sale of lower priced handsets.

Income from operations increased approximately $4 million, or approximately 3%, for the quarter ended June 30, 2008 as compared to the prior year's second quarter. This was due in part to an increase in total revenues of approximately $128 million, which was offset by a higher cost of service of $44 million, higher cost of equipment of approximately $27 million, higher selling, general and administrative expenses of approximately $31 million and higher depreciation and amortization expense of approximately $20 million. The increase in cost of service was primarily related to the increase in total subscribers, as well as the continued build-out of the Auction 66 Markets. Cost of equipment increased as a result of increases in gross additions as well as an increase in sales of handsets to existing subscribers, partially offset by the sale of lower priced handsets. Selling, general and administrative expenses increased primarily as a result of the Company's continued growth in the Expansion Markets, including our continued build-out of the Auction 66 Markets. Depreciation and amortization increased by approximately $20 million due to a larger amount of property, plant and equipment in service, primarily within the Expansion Markets as a result of the launch of service in the Los Angeles, Las Vegas and Jacksonville metropolitan areas. Consolidated Adjusted EBITDA of $210 million increased approximately $30 million when compared to the same period in the previous year.

Average revenue per user (ARPU) of $41.77 represents a decrease of $1.41 when compared to the second quarter of 2007 and a decrease of $0.45 when compared to the first quarter of 2008. The change in ARPU from the second quarter of the prior year and from the first quarter of 2008 is primarily attributable to higher participation in our Family Plans as well as reduced revenue from certain features now included in our service plans that were previously provided a la carte. The Company's cost per gross addition (CPGA) of $135.90 for the quarter represents an increase of $11.11 when compared to the prior year's second quarter and was primarily driven by the Company's continued growth in the Expansion Markets, including the launch of service in the Los Angeles, Las Vegas and Jacksonville metropolitan areas. Cost per user (CPU) increased to $18.23 in the second quarter, or 1%, over the second quarter of 2007 primarily due to expenses related to the construction of the New York, Philadelphia and Boston metropolitan areas, partially offset by a decrease in Core Markets CPU, demonstrating the Company's continued ability to scale the business.

Core Markets Segment Results

(in millions, except percentages and subscriber amounts) Three Three Six Months Six Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Service revenues $ 378 $ 356 $ 747 $ 694 Total revenues $ 426 $ 409 $ 855 $ 814 Income from operations $ 148 $ 136 $ 284 $ 254 Adjusted EBITDA $ 187 $ 168 $ 358 $ 318 Adjusted EBITDA as a percentage of service revenues 49.6% 47.1% 47.9% 45.9% Subscribers End of Period 2,815,353 2,542,290 2,815,353 2,542,290 Net Additions 19,437 57,479 156,448 241,332

Core Markets Comparison of Second Quarter Ended June 2008 versus Second Quarter Ended June 2007

The Core Markets continued to grow and ended the quarter with 2.8 million subscribers. The additional 273 thousand subscribers acquired since June 30, 2007, partially offset by the higher participation in our Family Plans and reduced revenue from certain features now included in our service plans that were previously provided a la carte, generated an additional $22 million of service revenue for the quarter ended June 30, 2008 when compared to second quarter of 2007. Sales of lower-priced handset models coupled with a decrease in Core Markets gross additions resulted in a $4 million decrease in equipment revenues for the quarter.

Income from operations increased $12 million, or 9%, for the quarter ended June 30, 2008 as compared to the second quarter of 2007. This increase was due in part to growth in total revenues of $17 million coupled with lower cost of equipment in the quarter of approximately $2 million due primarily to the sale of lower priced handsets and a decrease in Core Markets gross additions. Depreciation and amortization increased $4 million due to a larger amount of property, plant and equipment in service primarily to support our continued growth. Cost of service as well as selling, general and administrative expenses remained relatively flat for the quarter ended June 30, 2008 when compared to the second quarter of 2007.

Expansion Markets Segment Results

(in millions, except percentages and subscriber amounts) Three Three Six Months Six Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Service revenues $ 221 $ 123 $ 414 $ 225 Total revenues $ 253 $ 142 $ 486 $ 274 Loss from operations $ (9) $ (3) $ (27) $ (16) Adjusted EBITDA $ 23 $ 12 $ 30 $ 12 Adjusted EBITDA as a percentage of service revenues 10.3% 10.2% 7.3% 5.1% Subscribers End of Period 1,782,696 1,007,626 1,782,696 1,007,626 Net Additions 164,093 97,234 478,815 367,598

Expansion Markets Comparison of Second Quarter Ended June 2008 versus Second Quarter Ended June 2007

The Expansion Markets ended the quarter with approximately 1.8 million subscribers representing an increase of 775 thousand subscribers since June 30, 2007. This increase in subscribers as well as an increase in E-911, FUSF, vendor's compensation and activation revenues partially offset by the higher participation in our Family Plans and reduced revenue from certain features now included in our service plans that were previously provided a la carte, generated an additional $98 million of service revenues for the quarter ended June 30, 2008 when compared to the second quarter of 2007. An increase in gross additions as well as an increase in the sale of handsets to existing subscribers, partially offset by the sale of lower priced handsets, resulted in an increase in equipment revenues of $12 million for the quarter.

Loss from operations increased $6 million, for the quarter ended June 30, 2008 as compared to the second quarter of 2007. This was in part due to higher cost of service of approximately $44 million due to the growth in the Expansion Market's subscriber base which also led to higher cost of equipment of $29 million, coupled with the increased sale of handsets to existing subscribers. In addition, higher selling, general and administrative expenses of approximately $31 million were principally the result of supporting Expansion Markets subscriber growth of 77% since June 30, 2007. Expenses incurred in connection with the launch of service in the Los Angeles, Las Vegas and Jacksonville metropolitan areas as well as expenses related to the construction of the New York, Philadelphia and Boston metropolitan areas also accounted for increased selling, general and administrative expenses. These increases were offset by an increase in total revenues of $111 million for the quarter. The Expansion Markets generated Adjusted EBITDA of $23 million for the quarter versus an Adjusted EBITDA of $12 million for the same quarter a year ago.

Operational and Financial Outlook

For the year ending December 31, 2008, MetroPCS today reaffirms guidance the Company originally provided on November 14, 2007, of net subscriber additions in the range of 1.25 million to 1.52 million on a consolidated basis, with 250 thousand to 320 thousand in the Core Markets and 1.0 million to 1.2 million in the Expansion Markets, which includes 75 thousand to 125 thousand in the Auction 66 Markets. The Company currently expects Consolidated Adjusted EBITDA to be in the range of $750 - $850 million for the year ending December 31, 2008 which is inclusive of an Adjusted EBITDA loss in the range of $125 - $175 million in the Auction 66 Markets.

MetroPCS currently expects to incur capital expenditures in the range of $1.1 billion to $1.3 billion for the year ending December 31, 2008 in its Core and Expansion Markets, which includes $600 million to $700 million in its Auction 66 Markets. In addition, the Company paid $313 million for the purchase of spectrum in Auction 73 for the year ended December 31, 2008.

The Company currently plans to focus on building out approximately 40 million of the total population in its Auction 66 Markets with a primary focus on the New York, Philadelphia and Boston metropolitan areas. MetroPCS launched the Philadelphia metropolitan area on July 1, 2008 and anticipates launching service in the remaining metropolitan areas as follows:

-- Boston - first quarter of 2009

-- New York - first half of 2009

Of the approximate 40 million total population in these areas, MetroPCS is targeting launch of service with an initial covered population of approximately 30 to 32 million. Initial launch dates will vary in the Auction 66 Markets and launch dates in the larger metropolitan areas will be accomplished in phases.

MetroPCS Conference Call Information

MetroPCS Communications, Inc. will host a conference call to discuss its Second Quarter 2008 Earnings Results at 9:00 a.m. (ET) on Thursday, August 7, 2008.

Date: Thursday, August 7, 2008 Time: 9:00 a.m. (ET) Call-in Numbers: Toll free: 888-464-7607 International: 706-634-9318 Participant Passcode: 52516560

Please plan on accessing the conference call ten minutes prior to the scheduled start time.

The conference call will be broadcast live via the Company's Investor Relations website at http://investor.metropcs.com. A replay of the webcast will be available on the website beginning at approximately 12:30 p.m. (ET) on August 7, 2008.

A replay of the conference call will be available for one week starting shortly after the call concludes and can be accessed by dialing 800-642-1687 (toll free) or 706-645-9291 (International). The passcode required to listen to the replay is 52516560.

To automatically receive MetroPCS financial news by e-mail, please visit the Investor Relations portion of the MetroPCS website, http://www.metropcs.com, and subscribe to E-mail Alerts.

About MetroPCS Communications, Inc.

Dallas-based MetroPCS Communications, Inc. (NYSE: PCS | Quote | Chart | News | PowerRating) is a provider of predictable, affordable and flexible unlimited wireless communications service for a flat-rate with no signed contract. MetroPCS owns or has access to licenses covering a population of approximately 149 million people in 14 of the top 25 largest metropolitan areas in the United States, including New York, Philadelphia, Boston, Miami, Tampa, Atlanta, Dallas, Detroit, Los Angeles, San Francisco and Sacramento. As of June 30, 2008, MetroPCS had approximately 4.6 million subscribers and currently offers service in the Miami, Orlando, Sarasota, Tampa, Atlanta, Dallas, Detroit, Los Angeles, San Francisco, Las Vegas, Philadelphia, and Sacramento and Shreveport - Bossier City metropolitan areas. For more information please visit www.metropcs.com.

Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Any statements made in this news release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including statements that may relate to our plans, objectives, strategies, goals, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. These forward-looking statements often include words such as "anticipate," "expect," "suggests," "plan," "believe," "intend," "estimates," "targets," "projects," "should," "would," "could," "may," "will," "forecast," and other similar expressions.

These forward-looking statements or projections are based on reasonable assumptions at the time they are made, including our current expectations, plans and assumptions that have been made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Forward-looking statements or projections are not guarantees of future performance or results. Actual financial results, performance or results of operations may differ materially from those expressed in the forward-looking statements and projections. Factors that may materially affect such forward-looking statements and projections include:

-- the highly competitive nature of our industry;

-- the rapid technological changes in our industry;

-- our ability to maintain adequate customer care and manage our churn rate;

-- our ability to sustain the growth rates we are projecting;

-- our ability to access the funds necessary to build and operate our Auction 66 Markets;

-- the costs associated with being a public company and our ability to comply with the internal financial and disclosure control and reporting obligations of public companies;

-- our ability to manage our rapid growth, train additional personnel and improve our financial and disclosure controls and procedures;

-- our ability to secure the necessary spectrum and network infrastructure equipment;

-- our ability to clear the Auction 66 Market spectrum of incumbent licensees;

-- our ability to adequately enforce or protect our intellectual property rights and defend against suits filed by others;

-- governmental regulation of our services and the costs of compliance and our failure to comply with such regulations;

-- our capital structure, including our indebtedness amounts;

-- changes in consumer preferences or demand for our products;

-- our ability to attract and retain key members of management; and

-- other factors described or referenced from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2007 and our Quarterly Reports on Form 10-Q, in Part I, Item 1A, "Risk Factors".

The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions, many of which are beyond our ability to control or ability to predict. You should not place undue reliance on these forward-looking statements and projections, which are based on current expectations and speak only as of the date of this release. MetroPCS Communications, Inc. is not obligated to, and does not undertake a duty to, update any forward-looking statement or projection to reflect events after the date of this release, except as required by law. The Company does not plan to update nor reaffirm guidance except through formal public disclosure pursuant to Regulation FD.

MetroPCS Communications, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share and per share information) (Unaudited) June 30, December 31, 2008 2007 ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $ 1,128,937 $ 1,470,208 Inventories, net 43,146 109,139 Accounts receivable (net of allowance for uncollectible accounts of $3,533 and $2,908 at June 30, 2008 and December 31, 2007, respectively) 38,445 31,809 Prepaid charges 53,944 60,469 Deferred charges 31,334 34,635 Deferred tax asset 4,921 4,920 Other current assets 20,778 21,704 ------------ ------------- Total current assets 1,321,505 1,732,884 Property and equipment, net 2,263,223 1,891,411 Long-term investments 21,348 36,050 FCC licenses 2,390,959 2,072,895 Microwave relocation costs 10,969 10,105 Other assets 70,775 62,785 ------------ ------------- Total assets $ 6,078,779 $ 5,806,130 ============ ============= CURRENT LIABILITIES: Accounts payable and accrued expenses $ 479,025 $ 439,449 Current maturities of long-term debt 16,411 16,000 Deferred revenue 127,286 120,481 Other current liabilities 5,158 4,560 ------------ ------------- Total current liabilities 627,880 580,490 Long-term debt, net 3,003,521 2,986,177 Deferred tax liabilities 349,952 290,128 Deferred rents 48,746 35,779 Redeemable minority interest 5,652 5,032 Other long-term liabilities 74,995 59,778 ------------ ------------- Total liabilities 4,110,746 3,957,384 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, par value $0.0001 per share, 100,000,000 shares authorized; no shares of preferred stock issued and outstanding at June 30, 2008 and December 31, 2007 -- -- Common Stock, par value $0.0001 per share, 1,000,000,000 shares authorized, 349,898,967 and 348,108,027 shares issued and outstanding at June 30, 2008 and December 31, 2007, respectively 35 35 Additional paid-in capital 1,553,234 1,524,769 Retained earnings 428,395 338,411 Accumulated other comprehensive loss (13,631) (14,469) ------------ ------------- Total stockholders' equity 1,968,033 1,848,746 ------------ ------------- Total liabilities and stockholders' equity $ 6,078,779 $ 5,806,130 ============ =============

MetroPCS Communications, Inc. and Subsidiaries Condensed Consolidated Statements of Income and Comprehensive Income (in thousands, except share and per share information) (Unaudited) For the three months ended June 30, ------------------------------ 2008 2007 -------------- -------------- REVENUES: Service revenues $ 598,562 $ 479,341 Equipment revenues 80,245 71,835 -------------- -------------- Total revenues 678,807 551,176 OPERATING EXPENSES: Cost of service (excluding depreciation and amortization expense of $53,061, $36,653, $101,717 and $71,827, shown separately below) 206,140 162,227 Cost of equipment 160,088 133,439 Selling, general and administrative expenses (excluding depreciation and amortization expense of $7,827, $4,471, $16,471 and $8,677, shown separately below) 113,419 82,717 Depreciation and amortization 60,888 41,124 Loss (gain) on disposal of assets 2,628 (393) -------------- -------------- Total operating expenses 543,163 419,114 -------------- -------------- Income from operations 135,644 132,062 OTHER EXPENSE (INCOME): Interest expense 45,664 49,168 Accretion of put option in majority- owned subsidiary 317 254 Interest and other income (5,372) (14,494) Impairment loss on investment securities 9,079 -- -------------- -------------- Total other expense 49,688 34,928 Income before provision for income taxes 85,956 97,134 Provision for income taxes (35,491) (39,040) -------------- -------------- Net income 50,465 58,094 Accrued dividends on Series D Preferred Stock -- (1,319) Accrued dividends on Series E Preferred Stock -- (189) Accretion on Series D Preferred Stock -- (30) Accretion on Series E Preferred Stock -- (22) -------------- -------------- Net income applicable to Common Stock $ 50,465 $ 56,534 ============== ============== Net income $ 50,465 $ 58,094 Other comprehensive income: Unrealized gains on available-for- sale securities, net of tax 504 1,807 Unrealized gains (losses) on cash flow hedging derivative, net of tax 11,118 6,898 Reclassification adjustment for losses (gains) included in net income, net of tax 3,124 (1,487) -------------- -------------- Comprehensive income $ 65,211 $ 65,312 ============== ============== Net income per common share: Basic $ 0.14 $ 0.17 ============== ============== Diluted $ 0.14 $ 0.17 ============== ============== Weighted average shares: Basic 349,051,983 296,670,880 ============== ============== Diluted 356,177,866 306,484,317 ============== ============== For the six months ended June 30, ------------------------------ 2008 2007 -------------- -------------- REVENUES: Service revenues $ 1,160,532 $ 918,857 Equipment revenues 180,629 169,005 -------------- -------------- Total revenues 1,341,161 1,087,862 OPERATING EXPENSES: Cost of service (excluding depreciation and amortization expense of $53,061, $36,653, $101,717 and $71,827, shown separately below) 394,614 307,562 Cost of equipment 360,245 306,747 Selling, general and administrative expenses (excluding depreciation and amortization expense of $7,827, $4,471, $16,471 and $8,677, shown separately below) 217,793 155,654 Depreciation and amortization 118,188 80,504 Loss (gain) on disposal of assets 2,649 2,657 -------------- -------------- Total operating expenses 1,093,489 853,124 -------------- -------------- Income from operations 247,672 234,738 OTHER EXPENSE (INCOME): Interest expense 93,083 98,144 Accretion of put option in majority- owned subsidiary 620 492 Interest and other income (15,254) (21,651) Impairment loss on investment securities 17,080 -- -------------- -------------- Total other expense 95,529 76,985 Income before provision for income taxes 152,143 157,753 Provision for income taxes (62,159) (63,307) -------------- -------------- Net income 89,984 94,446 Accrued dividends on Series D Preferred Stock -- (6,499) Accrued dividends on Series E Preferred Stock -- (929) Accretion on Series D Preferred Stock -- (148) Accretion on Series E Preferred Stock -- (107) -------------- -------------- Net income applicable to Common Stock $ 89,984 $ 86,763 ============== ============== Net income $ 89,984 $ 94,446 Other comprehensive income: Unrealized gains on available-for- sale securities, net of tax 504 2,402 Unrealized gains (losses) on cash flow hedging derivative, net of tax (4,508) 5,129 Reclassification adjustment for losses (gains) included in net income, net of tax 4,842 (2,528) -------------- -------------- Comprehensive income $ 90,822 $ 99,449 ============== ============== Net income per common share: Basic $ 0.26 $ 0.29 ============== ============== Diluted $ 0.25 $ 0.28 ============== ============== Weighted average shares: Basic 348,608,037 227,238,734 ============== ============== Diluted 355,440,059 235,898,089 ============== ==============

MetroPCS Communications, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) For the six months ended June 30, --------------------------- 2008 2007 ------------ ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 89,984 $ 94,446 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 118,188 80,504 Provision for uncollectible accounts receivable 121 23 Deferred rent expense 12,967 4,265 Cost of abandoned cell sites 2,322 3,832 Stock-based compensation expense 19,472 11,864 Non-cash interest expense 1,205 2,048 Loss on disposal of assets 2,649 2,657 Gain on sale of investments -- (2,241) Impairment loss on investment securities 17,080 -- Accretion of asset retirement obligation 1,248 572 Accretion of put option in majority- owned subsidiary 620 492 Deferred income taxes 59,794 62,158 Changes in assets and liabilities: Inventories 65,993 2,741 Accounts receivable (6,757) (1,415) Prepaid charges (17,920) (7,625) Deferred charges 3,300 1,086 Other assets (335) (9,332) Accounts payable and accrued expenses (46,872) 7,212 Deferred revenue 6,832 12,383 Other liabilities 1,527 1,639 ------------ ------------- Net cash provided by operating activities 331,418 267,309 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (388,502) (347,114) Change in prepaid purchases of property and equipment 24,446 (3,389) Proceeds from sale of property and equipment 400 188 Purchase of investments -- (2,371,757) Proceeds from sale of investments 37 1,226,823 Change in restricted cash and investments -- 556 Purchases of and deposits for FCC licenses (313,267) -- Cash used in business acquisitions (25,162) -- Microwave relocation costs (1,117) (400) ------------ ------------- Net cash used in investing activities (703,165) (1,495,093) CASH FLOWS FROM FINANCING ACTIVITIES: Change in book overdraft 29,479 59,076 Proceeds from 9 1/4% Senior Notes -- 423,500 Proceeds from initial public offering -- 862,500 Debt issuance costs -- (3,008) Cost of raising capital -- (44,266) Repayment of debt (8,000) (8,000) Proceeds from exercise of stock options 8,997 4,320 ------------ ------------- Net cash provided by financing activities 30,476 1,294,122 ------------ ------------- (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (341,271) 66,338 CASH AND CASH EQUIVALENTS, beginning of period 1,470,208 161,498 ------------ ------------- CASH AND CASH EQUIVALENTS, end of period $1,128,937 $ 227,836 ============ =============

Definition of Terms and Reconciliation of Non-GAAP Financial Measures

The Company utilizes certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company's financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the statement of income or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented.

Average revenue per user, or ARPU, cost per gross addition, or CPGA, and cost per user, or CPU, are non-GAAP financial measures utilized by the Company's management to judge the Company's ability to meet its liquidity requirements and to evaluate its operating performance. Management believes that these measures are important in understanding the performance of the Company's operations from period to period, and although every company in the wireless industry does not define each of these measures in precisely the same way, management believes that these measures (which are common in the wireless industry) facilitate key liquidity and operating performance comparisons with other companies in the wireless industry. The following tables reconcile non-GAAP financial measures with the Company's financial statements presented in accordance with GAAP.

ARPU -- The Company utilizes ARPU to evaluate per-customer service revenue realization and to assist in forecasting future service revenues. ARPU is calculated exclusive of activation revenues, as these amounts are a component of costs of acquiring new customers and are included in the calculation of CPGA. ARPU is also calculated exclusive of E-911, FUSF and vendor's compensation charges, as these are generally pass through charges that the Company collects from its customers and remits to the appropriate government agencies.

Average number of customers for any measurement period is determined by dividing (a) the sum of the average monthly number of customers for the measurement period by (b) the number of months in such period. Average monthly number of customers for any month represents the sum of the number of customers on the first day of the month and the last day of the month divided by two. The following table shows the calculation of ARPU for the periods indicated.

Three Months Six Months Ended June 30, Ended June 30, ----------------------- ----------------------- 2008 2007 2008 2007 ----------- ----------- ----------- ----------- (in thousands, except average number of customers and ARPU) Calculation of Average Revenue Per User (ARPU): Service revenues $ 598,562 $ 479,341 $1,160,532 $ 918,857 Less: Activation revenues (3,899) (2,683) (7,525) (5,142) E-911, FUSF and vendor's compensation charges (30,583) (25,721) (57,137) (45,992) ----------- ----------- ----------- ----------- Net service revenues $ 564,080 $ 450,937 $1,095,870 $ 867,723 Divided by: Average number of customers 4,501,980 3,480,780 4,350,387 3,328,032 ----------- ----------- ----------- ----------- ARPU $ 41.77 $ 43.18 $ 41.98 $ 43.46 =========== =========== =========== ===========

CPGA -- The Company utilizes CPGA to assess the efficiency of its distribution strategy, validate the initial capital invested in its customers and determine the number of months to recover customer acquisition costs. This measure also allows management to compare the Company's average acquisition costs per new customer to those of other wireless broadband PCS providers. Activation revenues and equipment revenues related to new customers are deducted from selling expenses in this calculation as they represent amounts paid by customers at the time their service is activated that reduce the acquisition cost of those customers. Additionally, equipment costs associated with existing customers, net of related revenues, are excluded as this measure is intended to reflect only the acquisition costs related to new customers. The following table reconciles total costs used in the calculation of CPGA to selling expenses, which the Company considers to be the most directly comparable GAAP financial measure to CPGA.

Three Months Six Months Ended June 30, Ended June 30, ------------------- ----------------------- 2008 2007 2008 2007 --------- --------- ----------- ----------- (in thousands, except gross customer additions and CPGA) Calculation of Cost Per Gross Addition (CPGA): Selling expenses $ 53,180 $ 33,365 $ 99,827 $ 63,471 Less: Activation revenues (3,899) (2,683) (7,525) (5,142) Less: Equipment revenues (80,245) (71,835) (180,629) (169,005) Add: Equipment revenue not associated with new customers 37,613 33,892 83,416 75,902 Add: Cost of equipment 160,088 133,439 360,245 306,747 Less: Equipment costs not associated with new customers (58,993) (43,795) (131,204) (98,964) --------- --------- ----------- ----------- Gross addition expenses $107,744 $ 82,383 $ 224,130 $ 173,009 Divided by: Gross customer additions 792,823 660,149 1,752,906 1,493,132 --------- --------- ----------- ----------- CPGA $ 135.90 $ 124.79 $ 127.86 $ 115.87 ========= ========= =========== ===========

CPU -- CPU is cost of service and general and administrative costs (excluding applicable non-cash stock-based compensation expense included in cost of service and general and administrative expense) plus net loss on equipment transactions unrelated to initial customer acquisition (which includes the gain or loss on sale of handsets to existing customers and costs associated with handset replacements and repairs (other than warranty costs which are the responsibility of the handset manufacturers)) exclusive of E-911, FUSF and vendor's compensation charges, divided by the sum of the average monthly number of customers during such period. CPU does not include any depreciation and amortization expense. Management uses CPU as a tool to evaluate the non-selling cash expenses associated with ongoing business operations on a per customer basis, to track changes in these non-selling cash costs over time, and to help evaluate how changes in the Company's business operations affect non-selling cash costs per customer. In addition, CPU provides management with a useful measure to compare our non-selling cash costs per customer with those of other wireless providers. We believe investors use CPU primarily as a tool to track changes in our non-selling cash costs over time and to compare our non-selling cash costs to those of other wireless providers. Other wireless carriers may calculate this measure differently. The following table reconciles total costs used in the calculation of CPU to cost of service, which we consider to be the most directly comparable GAAP financial measure to CPU.

Three Months Six Months Ended June 30, Ended June 30, ----------------------- ----------------------- 2008 2007 2008 2007 ----------- ----------- ----------- ----------- (in thousands, except average number of customers and CPU) Calculation of Cost Per User (CPU): Cost of service $ 206,140 $ 162,227 $ 394,614 $ 307,562 Add: General and administrative expense 60,239 49,352 117,966 92,183 Add: Net loss on equipment transactions unrelated to initial customer acquisition 21,380 9,903 47,788 23,062 Less: Stock-based compensation expense included in cost of service and general and administrative expense (11,007) (7,653) (19,472) (11,864) Less: E-911, FUSF and vendor's compensation revenues (30,583) (25,721) (57,137) (45,992) ----------- ----------- ----------- ----------- Total costs used in the calculation of CPU $ 246,169 $ 188,108 $ 483,759 $ 364,951 Divided by: Average number of customers 4,501,980 3,480,780 4,350,387 3,328,032 ----------- ----------- ----------- ----------- CPU $ 18.23 $ 18.01 $ 18.53 $ 18.28 =========== =========== =========== ===========

The Company's senior secured credit facility calculates consolidated Adjusted EBITDA as: consolidated net income plus depreciation and amortization; gain (loss) on disposal of assets; non-cash expenses; gain (loss) on extinguishment of debt; provision for income taxes; interest expense; and certain expenses of MetroPCS minus interest and other income and non-cash items increasing consolidated net income. The Company considers Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to the Company's ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and fund future growth. The Company presents Adjusted EBITDA because covenants in its senior secured credit facility contain ratios based on this measure. If the Company's Adjusted EBITDA were to decline below certain levels, covenants in the Company's senior secured credit facility that are based on Adjusted EBITDA, including the maximum senior secured leverage ratio covenant, may be violated and could cause, among other things, an inability to incur further indebtedness and in certain circumstances a default or mandatory prepayment under the Company's senior secured credit facility. The Company's maximum senior secured leverage ratio is required to be less than 4.5 to 1.0 based on Adjusted EBITDA plus the impact of certain new markets. The lenders under the senior secured credit facility use the senior secured leverage ratio to measure the Company's ability to meet its obligations on its senior secured debt by comparing the total amount of such debt to its Adjusted EBITDA, which the Company's lenders use to estimate its cash flow from operations. The senior secured leverage ratio is calculated as the ratio of senior secured indebtedness to Adjusted EBITDA, as defined by the senior secured credit facility. Adjusted EBITDA is not a measure calculated in accordance with GAAP, and should not be considered a substitute for, operating income (loss), net income (loss), or any other measure of financial performance reported in accordance with GAAP. In addition, Adjusted EBITDA should not be construed as an alternative to, or more meaningful than cash flows from operating activities, as determined in accordance with GAAP.

The following table shows the calculation of our consolidated Adjusted EBITDA, as defined in the Company's senior secured credit facility, for the three months and six months ended June 30, 2008 and 2007.

Three Months Six Months Ended June 30, Ended June 30, ------------------- ------------------- 2008 2007 2008 2007 --------- --------- --------- --------- (in thousands) Calculation of Consolidated Adjusted EBITDA: Net income $ 50,465 $ 58,094 $ 89,984 $ 94,446 Adjustments: Depreciation and amortization 60,888 41,124 118,188 80,504 Loss (gain) on disposal of assets 2,628 (393) 2,649 2,657 Stock-based compensation expense (1) 11,007 7,653 19,472 11,864 Interest expense 45,664 49,168 93,083 98,144 Accretion of put option in majority-owned subsidiary (1) 317 254 620 492 Interest and other income (5,372) (14,494) (15,254) (21,651) Impairment loss on investment securities (1) 9,079 -- 17,080 -- Provision for income taxes 35,491 39,040 62,159 63,307 --------- --------- --------- --------- Consolidated Adjusted EBITDA $210,167 $180,446 $387,981 $329,763 ========= ========= ========= =========

(1) Represents a non-cash expense, as defined by our senior secured credit facility.

In addition, for further information, the following table reconciles consolidated Adjusted EBITDA, as defined in our senior secured credit facility, to cash flows from operating activities for the three and six months ended June 30, 2008 and 2007.

Three Months Six Months Ended June 30, Ended June 30, ------------------- ------------------- 2008 2007 2008 2007 --------- --------- --------- --------- (in thousands) Reconciliation of Net Cash Provided by Operating Activities to Consolidated Adjusted EBITDA: Net cash provided by operating activities $223,969 $155,737 $331,418 $267,309 Adjustments: Interest expense 45,664 49,168 93,083 98,144 Non-cash interest expense (605) (953) (1,205) (2,048) Interest and other income (5,372) (14,494) (15,254) (21,651) (Provision for) recovery of uncollectible accounts receivable (77) 105 (121) (23) Deferred rent expense (6,970) (2,226) (12,967) (4,265) Cost of abandoned cell sites (654) (2,035) (2,322) (3,832) Accretion of asset retirement obligation (733) (289) (1,248) (572) Gain on sale of investments -- 1,281 -- 2,241 Provision for income taxes 35,491 39,040 62,159 63,307 Deferred income taxes (34,246) (38,547) (59,794) (62,158) Changes in working capital (46,300) (6,341) (5,768) (6,689) --------- --------- --------- --------- Consolidated Adjusted EBITDA $210,167 $180,446 $387,981 $329,763 ========= ========= ========= =========

The following table reconciles segment Adjusted EBITDA for the three months and six months ended June 30, 2008 and 2007 to consolidated income before provision for income taxes:

Three Months Six Months Ended June 30, Ended June 30, ------------------- -------------------- 2008 2007 2008 2007 --------- --------- ---------- --------- (in thousands) Segment Adjusted EBITDA: Core Markets Adjusted EBITDA $187,335 $167,869 $ 357,861 $318,191 Expansion Markets Adjusted EBITDA 22,832 12,577 30,120 11,572 --------- --------- ---------- --------- Total 210,167 180,446 387,981 329,763 Depreciation and amortization (60,888) (41,124) (118,188) (80,504) (Loss) gain on disposal of assets (2,628) 393 (2,649) (2,657) Stock-based compensation expense (11,007) (7,653) (19,472) (11,864) Interest expense (45,664) (49,168) (93,083) (98,144) Accretion of put option in majority-owned subsidiary (317) (254) (620) (492) Interest and other income 5,372 14,494 15,254 21,651 Impairment loss on investment securities (9,079) -- (17,080) -- --------- --------- ---------- --------- Consolidated income before provision for income taxes $ 85,956 $ 97,134 $ 152,143 $157,753 ========= ========= ========== =========

SOURCE: MetroPCS Communications, Inc.

MetroPCS Communications, Inc. Keith Terreri, 214-570-4641 Vice President - Finance & Treasurer or Jim Mathias, 214-570-4641 Manager - Investor Relations investor_relations@metropcs.com