We know the customer experience isn't just one thing – it's everything. That is why we are intensifying our customer focus to reduce churn and increase brand consideration. In 2010, we transformed our business by giving customers exactly what they want: smart devices, nationwide 3G coverage and value-rich rate plans that include taxes and fees. Then in 2011, we executed on our strategy across the board, with promising results.

Meanwhile, we continued to streamline our processes and make each decision to keep customers with us longer. For example, last year we implemented a customer care strategy focused on first call resolution, which allowed us to deliver a better customer experience at a lower cost. It was just one reason we improved churn by 100 basis points year over year, while increasing our customer lifetime value.

Today we are providing more self-service options and systematically looking at ways to improve each stage in the customer lifecycle – from activation, billing and payment options to upgrades, and every touch point in between.

In 2011, our care organization made a major shift to focus on first call resolution. This means we reward our call center representatives - not for average handle time - but for resolving customer issues on the very first call. We also began targeted outbound calling programs, which welcome new customers on our higher-value rate plans and make sure people know exactly what to expect from their first bill.

Overall, we are focused on anticipating our customers' needs and resolving issues faster. As a result, our call centers saw repeat call volume drop, along with the average number of calls per subscriber, at the same time that customer satisfaction scores for calls increased. The end result was better for the customer and better for the bottom line.

Last year we reformulated our distribution model to reach a broader economic cross-section of the communities we serve. We targeted areas where value-seeking consumers live, work, play and shop. To make it even easier to choose Cricket, we opened Cricket-branded locations in new neighborhoods and made a big move into national retail.

National retailers now represent the largest channel for U.S. prepaid wireless carriers industry-wide. Leading with our highly differentiated Muve Music service, we significantly expanded our national retail distribution with Best Buy, Dollar General and Walmart. We also partnered for the first time with multimedia retailer HSN and online with Amazon.com, with good initial uptake.

In addition, we added more than 400 Cricket-branded locations – most of them premier dealers, which look and feel just like our company-owned stores, but with a much more efficient, variable cost structure. Going forward, we will continue to add distribution both in and out of our network footprint to maximize our customer growth nationwide.

Cricket dealers remain one of our most productive retail channels – and a key part of our strategy to expand our distribution cost-effectively nationwide. To better serve our growing customer base, last year we introduced a compensation model that we call "premier dealers with service." This provides a new revenue stream to select, high-performing dealers who offer service to our customers. It also shifts service traffic away from company-owned stores, increases dealer productivity and prepares us for further expansion.

In 2011, we attracted customers with our best device lineup yet, dramatically increasing our customer lifetime value in a device-driven world. We delivered a wide range of Android smartphones and Muve Music-enabled devices, along with our first tablet and our first 4G USB modem. We ended the year with 2 million smartphone customers and growing – representing approximately 40 percent of our voice customer base.

We unveiled the Huawei Mercury, a high-end device that PC Magazine called the best prepaid smartphone in America. It was just one of the iconic devices we launched with leading manufacturers, from Huawei and ZTE to Samsung, Kyocera, LG and PCD.

In 2012, we are partnering with a host of vendors to deliver what customers want: bigger screens, faster processors and better cameras. By implementing a "good, better, best" device strategy, we will offer a full range of quality handsets at different price points so customers can upgrade and stay with us as their needs evolve over time.

To keep standards high, we worked with our vendors' design and development teams to bring proven, world-class device platforms to our customers at the lowest possible cost. We even delivered what some said couldn't be done: smartphones priced below $100 for the holidays, while securing vendor support to keep subsidy levels manageable. Going forward, we will continue using global sourcing and scale to bring more choices, quality and mobile operating systems to our device portfolio.

With our diverse customer base, we are always looking for ways to keep people connected globally. Last year we launched a new suite of unique international calling products designed to do just that, while increasing penetration, generating revenue and building loyalty.

With our Cricket Local Number product, customers can set up a local number in one of more than 40 different countries. This means when friends and family call the in-country number, they are charged only for a local call, and the call then rings through to the customer's Cricket phone.

We also introduced Mexico and global rate plans, which offer the features of our other Cricket plans along with a bucket of voice minutes to make calls in the country of your choice. In addition, we unveiled unlimited global messaging, which lets customers send unlimited text, picture and video messages across the United States and around the globe.

For a small monthly fee, Cricket customers can choose from two options: Mexico Local Number or Global Local Number. Either way, they can set up a local phone number in another country that forwards calls to their Cricket phone. The calling feature gives Cricket customers unlimited calls to select cities in the country of their choice. Meanwhile, since friends and family are calling a local number in their country, they save on expensive international phone charges.

Launched in early 2011, our Muve Music is the first digital music experience designed specifically for the mobile phone – with no synching, no computers and no cords needed. By pioneering the first wireless plan to include unlimited music, we delivered an exceptional customer experience and added a key differentiator to our portfolio. This unique service is moving business metrics in meaningful ways and contributing significantly to higher customer lifetime value.

Available on our higher-value rate plans, Muve Music quickly became the lead product in our national retail expansion starting last September. By year end it had surpassed 500,000 customers, exceeding our expectations and making it the nation's second-largest digital music subscription service in less than a year. Approximately half of Muve Music customers were new to Cricket, demonstrating its broad appeal. Best of all, its customer satisfaction and engagement were off the charts – giving us "sticky" customers who are likely to stay with us longer. In 2012, we expect to explore opportunities to expand Muve Music with other carriers internationally.

Each month, the average Muve Music customer listens to 40 hours of music on their phone and downloads roughly 300 songs over Cricket's 3G network. The service has the highest customer satisfaction scores of any new product in our company's history, and 95 percent of Muve Music customers would recommend the service to a friend. Last year Muve Music helped us deliver higher ARPU and lower churn, while attracting a new set of customers to Cricket. At the end of 2011, Muve Music was available on two feature phones and three Android smartphones and sold through Best Buy, HSN and Amazon.com, along with Cricket-branded stores and MyCricket.com.

Last year we began to reap the benefits of our nationwide wholesale agreement with Sprint. In the near term, our national coverage enabled our major expansion in national retail, backed by a national advertising campaign. That, in turn, gave us key advantages in both existing and new markets -- from preferential shelf space to the marketing muscle of our retail partners.

Meanwhile, our growing volumes let us negotiate better pricing on everything from devices to packaging, giving us cost efficiencies and opening doors to partner with leading vendors.

Longer term, our wholesale agreement positions us for continued growth as a national carrier – both in and out of our footprint. Going forward, we are positioned to attract customers outside our footprint without the considerable capital expense of buying spectrum and building networks. By keeping our capital costs low and expanding our distribution cost effectively, we plan to bring Cricket's value-rich products and services to even more customers across the country.

Our wholesale agreements give us national voice and 3G data coverage and a wide range of strategic benefits, both over the near and long term. It has allowed us to expand our distribution in the highly productive national retail channel, while building and leveraging a nationwide brand. It gives us efficiencies of scale, with more purchasing power and better access to best-selling and exclusive devices. It lets us manage our capital efficiently, giving us the flexibility to offload 3G and voice traffic as needed in existing markets to facilitate our transition to 4G LTE technology. Because coverage provided outside of Cricket's footprint requires almost no capital investment, it gives us speed to market – allowing us to enter potential new markets without significant upfront capital expenditures.

Our owned and operated 3G data networks give us a distinct competitive advantage over other prepaid providers and a strategic path for growth. Last year we continued to reap the rewards of our infrastructure investment, which supported strong smartphone adoption, the demand for high-speed data services and the growing popularity of our Muve Music service.

Today we continue to ride the current 3G wave. At the same time, we have begun a multi-year transition to 4G technology, which delivers speeds up to 10 times faster than 3G. In December 2011 we launched our first LTE network in Tucson, Arizona. Through a prudent roll out designed to minimize capital expenditures, we plan to deploy 4G networks covering up to 25 million potential customers (POPs) in 2012, representing more than a quarter of our current network footprint. Over the next two to three years, we expect to deploy LTE technology to about two-thirds of our network footprint.

The Huawei Boltz is Cricket's first 4G LTE modem for our mobile broadband customers. Cricket's LTE device roadmap is expected to grow steadily from modems to smartphones and ultimately to other devices such as tablets, as they become available from vendors at more affordable price points over time.

In 2011, strong results gave us a stronger position. We capitalized on new opportunities to increase our penetration – by growing our retail presence, enhancing our lineup of smart devices, broadening our message to value-seeking consumers, and expanding our differentiated Muve Music service nationwide.

Year over year, we increased net additions by 67 percent, lowered churn and improved ARPU by nearly $4, an industry-leading accomplishment. At the same time we significantly grew our service revenues and cash flow, while aggressively managing our balance sheet for the future. Thanks to our strong cost management and cash generation, we ended 2011 with approximately $750 million in unrestricted cash and short-term investments. In addition, we and our Savary Island venture entered into spectrum transactions with Verizon that we expect to increase our bandwidth in a key market – Chicago – while adding more than $100 million in cash to our balance sheet.

Driven by new customer growth, the migration to smart devices and our industry-leading improvement in ARPU, we generated service revenues of $2.8 billion in 2011, up 14 percent year over year. We achieved adjusted operating income before debt and amortization (adjusted OIBDA) of $562.6 million for the year, up 7.1 percent from 2010. In addition, we generated an operating loss of $25.4 million.