##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      FORM 10-K/A
 (Amendment No. 1)
      (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to
    .   Commission file number 0-29752
  LEAP WIRELESS INTERNATIONAL,
    INC.
 (Exact Name of Registrant as
    Specified in its Charter)
  Delaware(State or Other Jurisdiction of
    Incorporation or Organization)10307 Pacific Center Court, San Diego, CA(Address of Principal Executive
    Offices)

33-0811062(I.R.S. Employer Identification
    No.)92121(Zip
    Code)   (858) 882-6000
 (Registrants Telephone
    Number, Including Area Code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class
    Common Stock, $.0001 par value

Name of Each Exchange on Which Registered
    The NASDAQ Stock Market, LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None.
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 Large
    accelerated filer
    þ
    Accelerated
    filer
    o
    Non-accelerated
    filer o  Rule 12b-2 o þ
    þ o




---



##### Table of Contents





EXPLANATORY
    NOTE
  Form 10-K/A Form 10-K Form 10-K Form 10-K).
    Form 10-K Form 10-K
  Rule 12b-15 Form 10-K
  Form 8-K Form 10-K Form 10-K Form 10-Q




---



##### 



LEAP
    WIRELESS INTERNATIONAL, INC.
    ANNUAL REPORT ON
    FORM 10-K/A
    (Amendment No. 1)
    For the Year Ended December 31, 2006
  TABLE OF
    CONTENTS
   
 PagePART IItem 1A.


Risk Factors


1PART IIItem 6.


Selected Financial Data


18Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


20Item 8.


Financial Statements and Supplementary Data


64Item 9A.


Controls and Procedures


110PART IVItem 15.


Exhibits and Financial Statement Schedules


112EXHIBIT 23EXHIBIT 31EXHIBIT 32   i




---



##### Table of Contents



PART I
    Cautionary
    Statement Regarding Forward-Looking Statements
    
    our ability to attract and retain customers in an extremely
    competitive marketplace;
    changes in economic conditions that could adversely affect the
    market for wireless services;
    the impact of competitors initiatives;
    our ability to successfully implement product offerings and
    execute market expansion plans;
    failure of the Federal Communications Commission, or FCC, to
    approve the transfer to Denali Spectrum License, LLC of the
    wireless license for which it was named the winning bidder in
    Auction #66;
    delays in our market expansion plans resulting from delays in
    the availability of network equipment and handsets for the AWS
    spectrum we acquired in Auction #66, or resulting from
    requirements to clear the AWS spectrum of existing
    U.S. government and other private sector wireless
    operations, some of which are permitted to continue using the
    spectrum for several years;
    our ability to attract, motivate and retain an experienced
    workforce;
    our ability to comply with the covenants in our senior secured
    credit facilities, indenture and any future credit agreement,
    indenture or similar instrument;
    failure of our network or information technology systems to
    perform according to expectations; and
    other factors detailed in Item 1A. Risk Factors
    below.    Item 1A.
    Risk
    Factors  Risks
    Related to Our Business and Industry
  We Have
    Experienced Net Losses, and We May Not Be Profitable in the
    Future.
   1




---



##### Table of Contents



We May
    Not Be Successful in Increasing Our Customer Base Which Would
    Negatively Affect Our Business Plans and Financial
    Outlook.
  quarter-by-quarter
  If We
    Experience High Rates of Customer Turnover, Our Ability to
    Become Profitable Will Decrease.
    We Have
    Made Significant Investment, and Will Continue to Invest, in
    Joint Ventures That We Do Not Control.
     2




---



##### Table of Contents



We Face
    Increasing Competition Which Could Have a Material Adverse
    Effect on Demand for the Cricket Service.
  and/or
         3




---



##### Table of Contents



We May Be
    Unable to Obtain the Roaming Services We Need From Other
    Carriers to Remain Competitive
    We Have
    Restated Our Prior Consolidated Financial Statements, Which May
    Lead to Additional Risks and Uncertainties, Including
    Shareholder Litigation.
    and/or
  Our
    Business and Stock Price May Be Adversely Affected If Our
    Internal Controls Are Not Effective.
     4




---



##### Table of Contents



Our
    Primary Business Strategy May Not Succeed in the Long
    Term.
    We Expect
    to Incur Substantial Costs in Connection with the Build-Out of
    Our New Markets, and any Delays or Cost Increases in the
    Build-Out of Our New Markets Could Adversely Affect Our
    Business.
   5




---



##### Table of Contents



and/or
      If We Are
    Unable to Manage Our Planned Growth, Our Operations Could Be
    Adversely Impacted.
    Our
    Significant Indebtedness Could Adversely Affect Our Financial
    Health and Prevent Us From Fulfilling Our Obligations.
   6




---



##### Table of Contents




    make it more difficult for us to satisfy our debt obligations;
    increase our vulnerability to general adverse economic and
    industry conditions;
    impair our ability to obtain additional financing in the future
    for working capital needs, capital expenditures, building out
    our network, acquisitions and general corporate purposes;
    require us to dedicate a substantial portion of our cash flows
    from operations to the payment of principal and interest on our
    indebtedness, thereby reducing the availability of our cash
    flows to fund working capital needs, capital expenditures,
    acquisitions and other general corporate purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate;
    place us at a disadvantage compared to our competitors that have
    less indebtedness; and
    expose us to higher interest expense in the event of increases
    in interest rates because indebtedness under our senior secured
    credit facility bears interest at a variable rate. For a
    description of our senior secured credit facility, see
    Item 7. Managements Discussion and Analysis of
    Financial Condition and Results of Operations 
    Liquidity and Capital Resources  Senior Secured
    Credit Facilities in Part II of this report.    Despite
    Current Indebtedness Levels, We May Incur Substantially More
    Indebtedness. This Could Further Increase the Risks Associated
    with Our Leverage.
      To
    Service Our Indebtedness and Fund Our Working Capital and
    Capital Expenditures, We Will Require a Significant Amount of
    Cash. Our Ability to Generate Cash Depends on Many Factors
    Beyond Our Control.
   7




---



##### Table of Contents



We May Be
    Unable to Refinance Our Indebtedness.
    Covenants
    in Our Indenture and Credit Agreement and Other Credit
    Agreements or Indentures That We May Enter Into in the Future
    May Limit Our Ability to Operate Our Business.
    
    incur additional indebtedness;
    create liens or other encumbrances;
    place limitations on distributions from restricted subsidiaries;
    pay dividends, make investments, prepay subordinated
    indebtedness or make other restricted payments;
    issue or sell capital stock of restricted subsidiaries;
    issue guarantees;
    sell or otherwise dispose of all or substantially all of our
    assets;
    enter into transactions with affiliates; and
    make acquisitions or merge or consolidate with another entity.    Form 10-Q
 8




---



##### Table of Contents



Form 10-Q Form 10-K
  Form 10-K/A Form 10-Q/A
  Form 10-K Form 10-Q Form 10-K
    Rises in
    Interest Rates Could Adversely Affect our Financial
    Condition.
    The
    Wireless Industry is Experiencing Rapid Technological Change,
    and We May Lose Customers if We Fail to Keep Up with These
    Changes.
     9




---



##### Table of Contents



The Loss
    of Key Personnel and Difficulty Attracting and Retaining
    Qualified Personnel Could Harm Our Business.
      Risks
    Associated with Wireless Handsets Could Pose Product Liability,
    Health and Safety Risks That Could Adversely Affect Our
    Business.
          We Rely
    Heavily on Third Parties to Provide Specialized Services; a
    Failure by Such Parties to Provide the Agreed Upon Services
    Could Materially Adversely Affect Our Business, Results of
    Operations and Financial Condition.
   10




---



##### Table of Contents



System
    Failures Could Result in Higher Churn, Reduced Revenue and
    Increased Costs, and Could Harm Our Reputation.
      We May
    Not be Successful in Protecting and Enforcing Our Intellectual
    Property Rights.
    No. 2-06-CV-00240-TJW, Method for Providing Wireless Communication Services
    and Network and System for Delivering Same,
 11




---



##### Table of Contents



No. 8:06-CV-01754-T-23TBM, Method for
    Providing Wireless Communication Services and Network and System
    for Delivering Same
  No. 3-06CV1399-D, Operations Method for Providing
    Wireless Communication Services and Network and System for
    Delivering Same
    We May Be
    Subject to Claims of Infringement Regarding Telecommunications
    Technologies That Are Protected by Patents and Other
    Intellectual Property Rights.
     12




---



##### Table of Contents



Regulation
    by Government Agencies May Increase Our Costs of Providing
    Service or Require Us to Change Our Services.
        If Call
    Volume under Our Cricket and Jump Mobile Services Exceeds Our
    Expectations, Our Costs of Providing Service Could Increase,
    Which Could Have a Material Adverse Effect on Our Competitive
    Position.
   13




---



##### Table of Contents



We May Be
    Unable to Acquire Additional Spectrum in the Future at a
    Reasonable Cost or on a Timely Basis.
    Our
    Wireless Licenses are Subject to Renewal and Potential
    Revocation in the Event that We Violate Applicable
    Laws.
  15-year
  Future
    Declines in the Fair Value of Our Wireless Licenses Could Result
    in Future Impairment Charges.
  90-7, SOP 90-7,
    
    consolidation in the wireless industry allows or requires
    carriers to sell significant portions of their wireless spectrum
    holdings;
    a sudden large sale of spectrum by one or more wireless
    providers occurs; or
    market prices decline as a result of the sales prices in FCC
    auctions.     14




---



##### Table of Contents



Declines
    in Our Operating Performance Could Ultimately Result in an
    Impairment of Our
    Indefinite-Lived
    Assets, Including Goodwill, or Our Long-Lived Assets, Including
    Property and Equipment.
  and/or and/or
  We May
    Incur Higher Than Anticipated Intercarrier Compensation
    Costs.
      Because
    Our Consolidated Financial Statements Reflect Fresh-Start
    Reporting Adjustments Made Upon Our Emergence From Bankruptcy,
    Financial Information in Our Current and Future Financial
    Statements Will Not Be Comparable to Our Financial Information
    for Periods Prior to Our Emergence from Bankruptcy.
    If We
    Experience High Rates of Credit Card, Subscription or Dealer
    Fraud, Our Ability to Become Profitable Will Decrease.
   15




---



##### Table of Contents



Risks
    Related to Ownership of Our Common Stock
  Our Stock
    Price May Be Volatile, and You May Lose All or Some of Your
    Investment.
    
    variations in our operating results;
    announcements of technological innovations, new services or
    service enhancements, strategic alliances or significant
    agreements by us or by our competitors;
    recruitment or departure of key personnel;
    changes in the estimates of our operating results or changes in
    recommendations by any securities analysts that elect to follow
    Leap common stock; and
    market conditions in our industry and the economy as a whole.  The
    16,460,077 Shares of Leap Common Stock Registered for
    Resale By Our Shelf Registration Statement May Adversely Affect
    The Market Price of Leaps Common Stock.
    Your
    Ownership Interest in Leap Will Be Diluted Upon Issuance of
    Shares We Have Reserved for Future Issuances, and Future
    Issuances or Sales of Such Shares May Adversely Affect The
    Market Price of Leaps Common Stock.
     16




---



##### Table of Contents



Our
    Directors and Affiliated Entities Have Substantial Influence
    over Our Affairs.
    Provisions
    in Our Amended and Restated Certificate of Incorporation and
    Bylaws or Delaware Law Might Discourage, Delay or Prevent a
    Change in Control of Our Company or Changes in Our Management
    and, Therefore, Depress The Trading Price of Our Common
    Stock.
    
    require super-majority voting to amend some provisions in our
    amended and restated certificate of incorporation and bylaws;
    authorize the issuance of blank check preferred
    stock that our board of directors could issue to increase the
    number of outstanding shares to discourage a takeover attempt;
    prohibit stockholder action by written consent, and require that
    all stockholder actions be taken at a meeting of our
    stockholders;
    provide that the board of directors is expressly authorized to
    make, alter or repeal our bylaws; and
    establish advance notice requirements for nominations for
    elections to our board or for proposing matters that can be
    acted upon by stockholders at stockholder meetings.   17




---



##### Table of Contents



PART II
  Item 6.
    Selected
    Financial Data (in thousands, except per share
    data)    Successor Company


Predecessor CompanyFive Months


Seven MonthsYear Ended


Ended


Ended


Year EndedDecember 31,


December 31,


July 31,


December 31,2006


2005


2004


2004


2003(2)


2002(As Restated)


(As Restated)


(As Restated)


(As Restated)


(As Restated)Statement of Operations Data:Revenues

$
1,167,187


$
957,771


$
350,847


$
492,756


$
752,937


$
618,475Operating income (loss)


23,725



71,002



12,729



(34,412
)


(360,925
)


(454,100
)Income (loss) before reorganization items, income taxes and
    cumulative effect of change in accounting principle


(15,703
)


52,300



(2,170
)


(38,900
)


(443,682
)


(640,978
)Reorganization items, net














962,444



(146,242
)


Income tax expense


(9,277
)


(21,615
)


(3,930
)


(4,166
)


(8,052
)


(23,821
)Income (loss) before cumulative effect of change in accounting
    principle


(24,980
)


30,685



(6,100
)


919,378



(597,976
)


(664,799
)Cumulative effect of change in accounting principle


623



















Net income (loss)

$
(24,357
)

$
30,685


$
(6,100
)

$
919,378


$
(597,976
)

$
(664,799
)Net income (loss) per share:Basic net income (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
(0.41
)

$
0.51


$
(0.10
)

$
15.68


$
(10.20
)

$
(14.91
)Cumulative effect of change in accounting principle


0.01



















Basic net income (loss) per share(1)

$
(0.40
)

$
0.51


$
(0.10
)

$
15.68


$
(10.20
)

$
(14.91
)Diluted net income (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
(0.41
)

$
0.50


$
(0.10
)

$
15.68


$
(10.20
)

$
(14.91
)Cumulative effect of change in accounting principle


0.01



















Diluted net income (loss) per share(1)

$
(0.40
)

$
0.50


$
(0.10
)

$
15.68


$
(10.20
)

$
(14.91
)Shares used in per share calculations:(1)Basic


61,645



60,135



60,000



58,623



58,604



44,591Diluted


61,645



61,003



60,000



58,623



58,604



44,591  18




---



##### Table of Contents



As of December 31,Successor Company


Predecessor Company2006


2005


2004


2003


2002(As Restated)


(As Restated)


(As Restated)


(As Restated)Balance Sheet Data:Cash and cash equivalents

$
372,812


$
293,073


$
141,141


$
84,070


$
100,860Working capital (deficit)(3)


185,191



245,366



150,868



(2,255,349
)


(2,144,420
)Restricted cash, cash equivalents and short-term investments


13,581



13,759



31,427



55,954



25,922Total assets


4,084,947



2,499,946



2,213,312



1,756,843



2,163,702Long-term debt(3)


1,676,500



588,333



371,355







Total stockholders equity (deficit)


1,771,793



1,517,601



1,472,347



(893,895
)


(296,786
)     (1)
    
    Refer to Notes 3 and 6 to the
    consolidated financial statements included in Item 8 of
    this report for an explanation of the calculation of basic and
    diluted earnings (loss) per share.(2)
    
    Our consolidated financial
    statements for the year ended December 31, 2003 were
    restated to correct errors that resulted in understatements of
    revenues and operating expenses of $1.6 million and
    $2.1 million, respectively.(3)
    
    We have presented the principal and
    interest balances related to our outstanding debt obligations as
    current liabilities in the consolidated balance sheets as of
    December 31, 2003 and 2002, as a result of the then
    existing defaults under the underlying agreements. 19




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Restatement
    of Previously Reported Audited Annual and Unaudited Interim
    Condensed Consolidated Financial Information
    Company
    Overview
  ® tm
       20




---



##### Table of Contents




    In July 2006, we acquired a non-controlling membership interest
    in LCW Wireless, which held a license for the Portland, Oregon
    market and to which we contributed, among other things, our
    existing Eugene and Salem, Oregon markets to create a new Oregon
    cluster of licenses covering 3.2 million POPs.
    In August 2006, we exchanged our wireless license in Grand
    Rapids, Michigan for a wireless license in Rochester, New York
    to form a new market cluster with our existing Buffalo and
    Syracuse markets in upstate New York. These three licenses cover
    3.1 million POPs.
    In September 2006, Denali License was named the winning bidder
    for one wireless license covering 59.8 million POPs (which
    includes markets covering 5.7 million POPs which overlap
    with certain licenses we purchased in Auction #66). The
    post-Auction grant of the license for which Denali License was
    named the winning bidder remains subject to FCC approval, and we
    cannot assure you that the FCC will award this license to Denali
    License.
    In November 2006, we completed the purchase of 13 wireless
    licenses in North Carolina and South Carolina for an aggregate
    purchase price of $31.8 million. These licenses cover
    5.0 million POPs.
    In December 2006, we purchased 99 wireless licenses in
    Auction #66 covering 123.1 million POPs (adjusted to
    eliminate duplication among certain overlapping Auction #66
    licenses). The use of the licenses that we acquired or that
    Denali License might acquire in Auction #66 may be affected
    by the requirements to clear the spectrum of existing
    U.S. government and other private sector wireless
    operations, some of which are permitted to continue for several
    years.
    We, ANB 1 License and LCW Operations launched 14 markets in
    2006, and we currently expect to launch Cricket service covering
    approximately 3.0 million new covered POPs in Rochester, NY
    and areas in North Carolina and South Carolina during 2007.     21




---



##### Table of Contents



22




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
      Principles
    of Consolidation
    Revenues
    No. 00-21, No. 00-21, No. 00-21
   23




---



##### Table of Contents



and/or
    Costs
    and Expenses
    Cost of Service.
  Cost of Equipment.
  Selling and Marketing.
  General and Administrative.
  Depreciation and Amortization.
  DepreciableLifeNetwork equipment:Switches


10Switch power equipment


15Cell site equipment, and site acquisitions and improvements


7Towers


15Antennae


3Computer hardware and software


3-5Furniture, fixtures, retail and office equipment


3-7    24




---



##### Table of Contents



Wireless
    Licenses
    Goodwill
    and Other Intangible Assets
    Impairment
    of Long-Lived Assets
    Impairment
    of Indefinite-Lived Intangible Assets
    Share-Based
    Compensation
     25




---



##### Table of Contents



Income
    Taxes
    90-7,
  Subscriber
    Recognition and Disconnect Policies
   26




---



##### Table of Contents



Seasonality
    Results
    of Operations
   27




---



##### Table of Contents



Operating
    Items
    Year Ended


% of 2006


Year Ended


% of 2005


Change fromDecember 31,


Service


December 31,


Service


Prior Year2006


Revenues


2005


Revenues


Dollars


Percent(As Restated)





(As Restated)Revenues:Service revenues

$
956,365






$
768,916






$
187,449



24.4
%Equipment revenues


210,822







188,855







21,967



11.6
%Total revenues


1,167,187







957,771







209,416



21.9
%Operating expenses:Cost of service (exclusive of items shown separately below)


264,162



27.6
%


203,548



26.5
%


60,614



29.8
%Cost of equipment


310,834



32.5
%


230,520



30.0
%


80,314



34.8
%Selling and marketing


159,257



16.7
%


100,042



13.0
%


59,215



59.2
%General and administrative


196,604



20.6
%


159,741



20.8
%


36,863



23.1
%Depreciation and amortization


226,747



23.7
%


195,462



25.4
%


31,285



16.0
%Impairment of indefinite-lived intangible assets


7,912



0.8
%


12,043



1.6
%


(4,131
)


(34.3
)%Total operating expenses


1,165,516



121.9
%


901,356



117.2
%


264,160



29.3
%Gains on sales of wireless licenses and operating assets


22,054



2.3
%


14,587



1.9
%


7,467



51.2
%Operating income

$
23,725



2.5
%

$
71,002



9.2
%

$
(47,277
)


(66.6
)%   28




---



##### Table of Contents



Year Ended


% of 2005


Year Ended


% of 2004


Change fromDecember 31,


Service


December 31,


Service


Prior Year2005


Revenues


2004


Revenues


Dollars


Percent(As Restated)





(As Restated)Revenues:Service revenues

$
768,916






$
695,205






$
73,711



10.6
%Equipment revenues


188,855







148,398







40,457



27.3
%Total revenues


957,771







843,603







114,168



13.5
%Operating expenses:Cost of service (exclusive of items shown separately below)


203,548



26.5
%


194,914



28.0
%


8,634



4.4
%Cost of equipment


230,520



30.0
%


186,901



26.9
%


43,619



23.3
%Selling and marketing


100,042



13.0
%


91,935



13.2
%


8,107



8.8
%General and administrative


159,741



20.8
%


138,624



19.9
%


21,117



15.2
%Depreciation and amortization


195,462



25.4
%


253,444



36.5
%


(57,982
)


(22.9
)%Impairment of indefinite-lived intangible assets


12,043



1.6
%










12,043



100.0
%Total operating expenses


901,356



117.2
%


865,818



124.5
%


35,538



4.1
%Gains on sales of wireless licenses and operating assets


14,587



1.9
%


532



0.1
%


14,055



2641.9
%Operating income (loss)

$
71,002



9.2
%

$
(21,683
)


(3.1
)%

$
92,685



427.5
%     Year Ended December 31,2006


2005


2004Gross customer additions


1,455,810



872,271



807,868Net customer additions


592,237



117,376



97,090Weighted-average number of customers


1,861,477



1,610,170



1,529,020Total customers, end of period


2,229,826



1,668,293



1,569,630   Service
    Revenues
      Equipment
    Revenues
   29




---



##### Table of Contents



Cost of
    Service
      Cost of
    Equipment
      Selling
    and Marketing Expenses
      General
    and Administrative Expenses
   30




---



##### Table of Contents



Depreciation
    and Amortization
      Impairment
    Charges
    Gains on
    Sales of Wireless Licenses and Operating Assets
     31




---



##### Table of Contents



Non-Operating
    Items
    Year Ended December 31,2006


2005


Change(As Restated)


(As Restated)Minority interests in consolidated subsidiaries

$
1,493


$
(31
)

$
1,524Interest income


23,063



9,957



13,106Interest expense


(61,334
)


(30,051
)


(31,283
)Other income (expense), net


(2,650
)


1,423



(4,073
)Income tax expense


(9,277
)


(21,615
)


12,338   Year Ended December 31,2005


2004


Change(As Restated)


(As Restated)Minority interests in consolidated subsidiaries

$
(31
)

$



$
(31
)Interest income


9,957



1,812



8,145Interest expense


(30,051
)


(20,789
)


(9,262
)Other income (expense), net


1,423



(410
)


1,833Reorganization items, net






962,444



(962,444
)Income tax expense


(21,615
)


(8,096
)


(13,519
)   Minority
    Interests in Consolidated Subsidiaries
    Interest
    Income
    Interest
    Expense
   32




---



##### Table of Contents



SOP 90-7
  Other
    Income (Expense), Net
    Reorganization
    Items, Net
    Income
    Tax Expense
  pay-in-kind
   33




---



##### Table of Contents



Quarterly
    Financial Data (Unaudited)
    Three Months EndedMarch 31,


June 30,


September 30,


December 31,2006


2006


2006


2006(As Restated)


(As Restated)


(As Restated)


(As Restated)Revenues

$
281,850


$
277,459


$
293,266


$
314,612Operating income (loss)(1)


21,435



11,742



7,050



(16,502
)Income (loss) before cumulative effect of change in accounting
    principle(1)


18,658



2,800



(801
)


(45,637
)Cumulative effect of change in accounting principle


623











Net income (loss)(1)

$
19,281


$
2,800


$
(801
)

$
(45,637
)Basic net income (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
0.30


$
0.05


$
(0.01
)

$
(0.69
)Cumulative effect of change in accounting principle


0.01











Basic net income (loss) per share

$
0.31


$
0.05


$
(0.01
)

$
(0.69
)Diluted net income (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
0.30


$
0.05


$
(0.01
)

$
(0.69
)Cumulative effect of change in accounting principle


0.01











Diluted net income (loss) per share

$
0.31


$
0.05


$
(0.01
)

$
(0.69
)   Three Months EndedMarch 31,


June 30,


September 30,


December 31,2005


2005


2005


2005(As Restated)


(As Restated)


(As Restated)


(As Restated)Revenues

$
235,639


$
239,725


$
242,990


$
239,417Operating income(2)


21,844



9,821



28,674



10,663Net income(2)


7,511



1,860



16,424



4,890Basic net income per share


0.13



0.03



0.27



0.08Diluted net income per share


0.13



0.03



0.27



0.08     (1)
    
    During the quarter ended September 30, 2006, we recognized
    a gain of $21.5 million (subsequently increased by
    $0.1 million due to post-closing adjustments during the
    quarter ended December 31, 2006) from our sale of
    wireless licenses and operating assets in our Toledo and
    Sandusky, Ohio markets.(2)
    
    During the quarter ended September 30, 2005, we recognized
    a gain of $14.6 million from our sale of wireless licenses
    and operating assets in our Michigan markets. 34




---



##### Table of Contents



Quarterly
    Results of Operations Data (Unaudited)
    Three Months EndedMarch 31,


June 30,


September 30,


December 31,2006


2006


2006


2006(As Restated)


(As Restated)


(As Restated)


(As Restated)Revenues:Service revenues

$
218,085


$
227,160


$
240,554


$
270,566Equipment revenues


63,765



50,299



52,712



44,046Total revenues


281,850



277,459



293,266



314,612Operating expenses:Cost of service (exclusive of items shown separately below)


(56,210
)


(61,255
)


(71,575
)


(75,122
)Cost of equipment


(71,977
)


(65,396
)


(83,457
)


(90,004
)Selling and marketing


(29,102
)


(35,942
)


(42,948
)


(51,265
)General and administrative


(49,090
)


(46,576
)


(49,116
)


(51,822
)Depreciation and amortization


(54,036
)


(53,337
)


(56,409
)


(62,965
)Impairment of indefinite-lived intangible assets






(3,211
)


(4,701
)


Total operating expenses


(260,415
)


(265,717
)


(308,206
)


(331,178
)Gains on sales of wireless licenses and operating assets










21,990



64Operating income (loss)


21,435



11,742



7,050



(16,502
)Minority interests in consolidated subsidiaries


(75
)


(134
)


418



1,284Interest income


4,194



5,533



5,491



7,845Interest expense


(7,431
)


(8,423
)


(15,753
)


(29,727
)Other income (expense), net


535



(5,918
)


272



2,461Income (loss) before income taxes and cumulative effect of
    change in accounting principle


18,658



2,800



(2,522
)


(34,639
)Income tax benefit (expense)










1,721



(10,998
)Income (loss) before cumulative effect of change in accounting
    principle


18,658



2,800



(801
)


(45,637
)Cumulative effect of change in accounting principle


623











Net income (loss)

$
19,281


$
2,800


$
(801
)

$
(45,637
)   35




---



##### Table of Contents



Three Months EndedMarch 31,


June 30,


September 30,


December 31,2005


2005


2005


2005(As Restated)


(As Restated)


(As Restated)


(As Restated)Revenues:Service revenues

$
186,672


$
191,811


$
194,703


$
195,730Equipment revenues


48,967



47,914



48,287



43,687Total revenues


235,639



239,725



242,990



239,417Operating expenses:Cost of service (exclusive of items shown separately below)


(50,857
)


(50,338
)


(51,139
)


(51,214
)Cost of equipment


(55,804
)


(53,698
)


(61,164
)


(59,854
)Selling and marketing


(22,995
)


(24,810
)


(25,535
)


(26,702
)General and administrative


(36,035
)


(42,423
)


(41,306
)


(39,977
)Depreciation and amortization


(48,104
)


(47,281
)


(49,076
)


(51,001
)Impairment of indefinite-lived intangible assets






(11,354
)


(689
)


Total operating expenses


(213,795
)


(229,904
)


(228,909
)


(228,748
)Gain (loss) on sale of wireless licenses and operating assets










14,593



(6
)Operating income (loss)


21,844



9,821



28,674



10,663Minority interest in loss of consolidated subsidiary














(31
)Interest income


1,903



1,176



2,991



3,887Interest expense


(9,123
)


(7,566
)


(6,679
)


(6,683
)Other income (expense), net


(1,286
)


(39
)


2,352



396Income before income taxes


13,338



3,392



27,338



8,232Income taxes


(5,827
)


(1,532
)


(10,914
)


(3,342
)Net income

$
7,511


$
1,860


$
16,424


$
4,890   Adjustments
    to Quarterly Condensed Consolidated Financial Statements
    (Unaudited)
     36




---



##### Table of Contents



Three Months Ended December 31, 2006Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
277,074


$
(5,088
)

$
(2,599
)

$
1,179


$



$



$
270,566Equipment revenues


37,471



(36
)






6,611











44,046Total revenues


314,545



(5,124
)


(2,599
)


7,790











314,612Operating expenses:






















Cost of service (exclusive of items shown separately below)


(75,433
)










(438
)


749







(75,122
)Cost of equipment


(82,652
)










(7,352
)










(90,004
)Selling and marketing


(51,265
)






















(51,265
)General and administrative


(51,802
)














(20
)






(51,822
)Depreciation and amortization


(62,965
)






















(62,965
)Impairment of assets






















Total operating expenses


(324,117
)










(7,790
)


729







(331,178
)Gain on sale or disposal of assets


64























64Operating loss


(9,508
)


(5,124
)


(2,599
)






729







(16,502
)Minority interests in consolidated subsidiaries


1,783















(499
)






1,284Interest income


7,845























7,845Interest expense


(29,727
)






















(29,727
)Other income, net


2,461























2,461Loss before income taxes


(27,146
)


(5,124
)


(2,599
)






230







(34,639
)Income tax expense


(12,206
)


















1,208



(10,998
)Net loss

$
(39,352
)

$
(5,124
)

$
(2,599
)

$



$
230


$
1,208


$
(45,637
)Basic and diluted loss per share:Basic loss per share

$
(0.60
)

$
(0.07
)

$
(0.04
)

$



$



$
0.02


$
(0.69
)Diluted loss per share

$
(0.60
)

$
(0.07
)

$
(0.04
)

$



$



$
0.02


$
(0.69
)Shares used in per share calculations:Basic


65,675























65,675Diluted


65,675























65,675   37




---



##### Table of Contents



September 30, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
233,594


$
(1,310
)

$
232,284Short-term investments


47,096







47,096Restricted cash, cash equivalents and short-term investments


10,009







10,009Inventories


50,937







50,937Other current assets


41,657



(824
)


40,833Total current assets


383,293



(2,134
)


381,159Property and equipment, net


870,779







870,779Wireless licenses


821,338







821,338Assets held for sale


20,354







20,354Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


88,260







88,260Deposits for wireless licenses


305,000







305,000Other assets


43,631







43,631Total assets

$
2,964,551


$
(8,248
)

$
2,956,303Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
238,369


$
(229
)

$
238,140Current maturities of long-term debt


9,000







9,000Other current liabilities


55,782



6,673



62,455Total current liabilities


303,151



6,444



309,595Long-term debt


888,750







888,750Deferred tax liabilities


138,755



(3,213
)


135,542Other long-term liabilities


44,582







44,582Total liabilities


1,375,238



3,231



1,378,469Minority interests


25,099



(556
)


24,543Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,505,217







1,505,217Retained earnings


56,788



(10,923
)


45,865Accumulated other comprehensive income


2,203







2,203Total stockholders equity


1,564,214



(10,923
)


1,553,291Total liabilities and stockholders equity

$
2,964,551


$
(8,248
)

$
2,956,303   38




---



##### Table of Contents



Three Months Ended September 30, 2006Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
249,081


$
(6,952
)

$
(2,788
)

$
1,213


$



$



$
240,554Equipment revenues


38,532



(129
)






14,309











52,712Total revenues


287,613



(7,081
)


(2,788
)


15,522











293,266Operating expenses:Cost of service (exclusive of items shown separately below)


(70,722
)










(776
)


(77
)






(71,575
)Cost of equipment


(68,711
)










(14,746
)










(83,457
)Selling and marketing


(42,948
)






















(42,948
)General and administrative


(49,110
)














(6
)






(49,116
)Depreciation and amortization


(56,409
)






















(56,409
)Impairment of assets


(4,701
)






















(4,701
)Total operating expenses


(292,601
)










(15,522
)


(83
)






(308,206
)Gain on sale or disposal of assets


21,990























21,990Operating income


17,002



(7,081
)


(2,788
)






(83
)






7,050Minority interests in consolidated subsidiaries


(138
)














556







418Interest income


5,491























5,491Interest expense


(15,753
)






















(15,753
)Other income, net


272























272Income (loss) before income taxes


6,874



(7,081
)


(2,788
)






473







(2,522
)Income tax benefit


3,105



















(1,384
)


1,721Net income (loss)

$
9,979


$
(7,081
)

$
(2,788
)

$



$
473


$
(1,384
)

$
(801
)Basic and diluted earnings (loss) per share:Basic earnings (loss) per share

$
0.17


$
(0.12
)

$
(0.05
)

$



$
0.01


$
(0.02
)

$
(0.01
)Diluted earnings (loss) per share

$
0.16


$
(0.12
)

$
(0.04
)

$



$
0.01


$
(0.02
)

$
(0.01
)Shares used in per share calculations:Basic


60,295























60,295Diluted


62,290







(1,995
)














60,295   39




---



##### Table of Contents



June 30, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
553,038


$
(762
)

$
552,276Short-term investments


57,382







57,382Restricted cash, cash equivalents and short-term investments


9,758







9,758Inventories


63,820







63,820Other current assets


40,545



(1,328
)


39,217Total current assets


724,543



(2.090
)


722,453Property and equipment, net


780,852







780,852Wireless licenses


795,046







795,046Assets held for sale


38,658







38,658Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


96,690







96,690Other assets


35,852







35,852Total assets

$
2,903,537


$
(8,204
)

$
2,895,333Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
210,274


$
(1,760
)

$
208,514Current maturities of long-term debt


9,000







9,000Other current liabilities


53,007



(1,704
)


51,303Total current liabilities


272,281



(3,464
)


268,817Long-term debt


891,000







891,000Deferred tax liabilities


141,935



(4,593
)


137,342Other long-term liabilities


41,837



(4
)


41,833Total liabilities


1,347,053



(8,061
)


1,338,992Minority interests


4,151







4,151Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,500,154







1,500,154Retained earnings


46,809



(143
)


46,666Accumulated other comprehensive income


5,364







5,364Total stockholders equity


1,552,333



(143
)


1,552,190Total liabilities and stockholders equity

$
2,903,537


$
(8,204
)

$
2,895,333   40




---



##### Table of Contents



Three Months Ended June 30, 2006Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
230,786


$
(5,305
)

$
474


$
1,205


$



$



$
227,160Equipment revenues


37,068



137







13,094











50,299Total revenues


267,854



(5,168
)


474



14,299











277,459Operating expenses:






















Cost of service (exclusive of items shown separately below)


(60,255
)










(984
)


(16
)






(61,255
)Cost of equipment


(52,081
)










(13,315
)










(65,396
)Selling and marketing


(35,942
)






















(35,942
)General and administrative


(46,576
)






















(46,576
)Depreciation and amortization


(53,337
)






















(53,337
)Impairment of assets


(3,211
)






















(3,211
)Total operating expenses


(251,402
)










(14,299
)


(16
)






(265,717
)Operating income


16,452



(5,168
)


474







(16
)






11,742Minority interests in consolidated subsidiaries


(134
)






















(134
)Interest income


5,533























5,533Interest expense


(8,423
)






















(8,423
)Other expense, net


(5,918
)






















(5,918
)Income before income taxes


7,510



(5,168
)


474







(16
)






2,800Income tax expense


























Net income

$
7,510


$
(5,168
)

$
474


$



$
(16
)

$



$
2,800Basic and diluted earnings per share:Basic earnings per share

$
0.12


$
(0.08
)

$
0.01


$



$



$



$
0.05Diluted earnings per share

$
0.12


$
(0.08
)

$
0.01


$



$



$



$
0.05Shares used in per share calculations:Basic


60,282























60,282Diluted


61,757























61,757   41




---



##### Table of Contents



March 31, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
299,976


$
(381
)

$
299,595Short-term investments


65,975







65,975Restricted cash, cash equivalents and short-term investments


10,687







10,687Inventories


39,710







39,710Other current assets


35,160



(282
)


34,878Total current assets


451,508



(663
)


450,845Property and equipment, net


642,858







642,858Wireless licenses


821,339







821,339Assets held for sale


15,135







15,135Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


105,123







105,123Other assets


35,651







35,651Total assets

$
2,503,510


$
(6,777
)

$
2,496,733Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
136,460


$
(10
)

$
136,450Current maturities of long-term debt


6,111







6,111Other current liabilities


53,266



(6,737
)


46,529Total current liabilities


195,837



(6,747
)


189,090Long-term debt


586,806







586,806Deferred tax liabilities


141,935



(4,593
)


137,342Other long-term liabilities


37,920



(4
)


37,916Total liabilities


962,498



(11,344
)


951,154Minority interests


2,463







2,463Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,494,974







1,494,974Retained earnings


39,299



4,567



43,866Accumulated other comprehensive income


4,270







4,270Total stockholders equity


1,538,549



4,567



1,543,116Total liabilities and stockholders equity

$
2,503,510


$
(6,777
)

$
2,496,733   42




---



##### Table of Contents



Three Months Ended March 31, 2006Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
215,840


$
1,255


$
(143
)

$
1,133


$



$



$
218,085Equipment revenues


50,848











12,917











63,765Total revenues


266,688



1,255



(143
)


14,050











281,850Operating expenses:






















Cost of service (exclusive of items shown separately below)


(55,204
)










(959
)


(47
)






(56,210
)Cost of equipment


(58,886
)










(13,091
)










(71,977
)Selling and marketing


(29,102
)






















(29,102
)General and administrative


(49,582
)














492







(49,090
)Depreciation and amortization


(54,036
)






















(54,036
)Total operating expenses


(246,810
)










(14,050
)


445







(260,415
)Operating income


19,878



1,255



(143
)






445







21,435Minority interests in consolidated subsidiaries


(75
)






















(75
)Interest income


4,194























4,194Interest expense


(7,431
)






















(7,431
)Other income, net


535























535Income before income taxes and cumulative effect of change in
    accounting principle


17,101



1,255



(143
)






445







18,658Income tax expense


























Income before cumulative effect of change in accounting principle


17,101



1,255



(143
)






445







18,658Cumulative effect of change in accounting principle


623























623Net income

$
17,724


$
1,255


$
(143
)

$



$
445


$



$
19,281Basic earnings per share:Income before cumulative effect of change in accounting principle

$
0.28


$
0.01


$



$



$
0.01


$



$
0.30Cumulative effect of change in accounting principle


0.01























0.01Basic earnings per share

$
0.29


$
0.01


$



$



$
0.01


$



$
0.31Diluted earnings per share:Income before cumulative effect of change in accounting principle

$
0.28


$
0.01


$



$



$
0.01


$



$
0.30Cumulative effect of change in accounting principle


0.01























0.01Diluted earnings per share

$
0.29


$
0.01


$



$



$
0.01


$



$
0.31Shares used in per share calculations:Basic


61,203























61,203Diluted


61,961























61,961  43




---



##### Table of Contents



Three Months Ended December 31, 2005Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
194,320


$
142


$
243


$
1,025


$



$



$
195,730Equipment revenues


34,617











9,070











43,687Total revenues


228,937



142



243



10,095











239,417Operating expenses:Cost of service (exclusive of items shown separately below)


(50,321
)










(893
)










(51,214
)Cost of equipment


(50,652
)










(9,202
)










(59,854
)Selling and marketing


(26,702
)






















(26,702
)General and administrative


(39,485
)














(492
)






(39,977
)Depreciation and amortization


(51,001
)






















(51,001
)Total operating expenses


(218,161
)










(10,095
)


(492
)






(228,748
)Loss on sale or disposal of assets


(6
)






















(6
)Operating income


10,770



142



243







(492
)






10,663Minority interests in consolidated subsidiaries


(31
)






















(31
)Interest income


3,887























3,887Interest expense


(6,683
)






















(6,683
)Other expense, net


396























396Income before income taxes


8,339



142



243







(492
)






8,232Income tax expense


(3,389
)


















47



(3,342
)Net income

$
4,950


$
142


$
243


$



$
(492
)

$
47


$
4,890Basic and diluted earnings per share:Basic earnings per share

$
0.08


$



$
0.01


$



$
(0.01
)

$



$
0.08Diluted earnings per share

$
0.08


$



$
0.01


$



$
(0.01
)

$



$
0.08Shares used in per share calculations:Basic


60,261























60,261Diluted


61,843























61,843   44




---



##### Table of Contents



September 30, 2005PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
168,288


$



$
168,288Short-term investments


223,497







223,497Restricted cash, cash equivalents and short-term investments


21,588







21,588Inventories


22,979







22,979Other current assets


28,669



231



28,900Total current assets


465,021



231



465,252Property and equipment, net


532,744







532,744Wireless licenses


829,512







829,512Assets held for sale


9,756







9,756Goodwill


437,382



(5,649
)


431,733Other intangible assets, net


123,617







123,617Other assets


18,244







18,244Total assets

$
2,416,276


$
(5,418
)

$
2,410,858Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
76,185


$



$
76,185Current maturities of long-term debt


6,111







6,111Other current liabilities


59,066



(8,999
)


50,067Total current liabilities


141,362



(8,999
)


132,363Long-term debt


589,861







589,861Other long-term liabilities


177,105



511



177,616Total liabilities


908,328



(8,488
)


899,840Minority interests


1,730







1,730Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,511,648







1,511,648Unearned share-based compensation


(23,405
)






(23,405
)Retained earnings


16,625



3,070



19,695Accumulated other comprehensive income


1,344







1,344Total stockholders equity


1,506,218



3,070



1,509,288Total liabilities and stockholders equity

$
2,416,276


$
(5,418
)

$
2,410,858   45




---



##### Table of Contents



Three Months Ended September 30, 2005Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
193,675


$
(187
)

$
227


$
988


$



$



$
194,703Equipment revenues


36,852











11,435











48,287Total revenues


230,527



(187
)


227



12,423











242,990Operating expenses:Cost of service (exclusive of items shown separately below)


(50,304
)










(835
)










(51,139
)Cost of equipment


(49,576
)










(11,588
)










(61,164
)Selling and marketing


(25,535
)






















(25,535
)General and administrative


(41,306
)






















(41,306
)Depreciation and amortization


(49,076
)






















(49,076
)Impairment of assets


(689
)






















(689
)Total operating expenses


(216,486
)










(12,423
)










(228,909
)Gain on sale or disposal of assets


14,593























14,593Operating income


28,634



(187
)


227















28,674Minority interests in consolidated subsidiaries


























Interest income


2,991























2,991Interest expense


(6,679
)






















(6,679
)Other expense, net


2,352























2,352Income before income taxes


27,298



(187
)


227















27,338Income tax expense


(10,901
)


















(13
)


(10,914
)Net income

$
16,397


$
(187
)

$
227


$



$



$
(13
)

$
16,424Basic and diluted earnings per share:Basic earnings per share

$
0.27


$



$



$



$



$



$
0.27Diluted earnings per share

$
0.27


$



$



$



$



$



$
0.27Shares used in per share calculations:Basic


60,246























60,246Diluted


61,395























61,395  46




---



##### Table of Contents



June 30, 2005PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
82,396


$



$
82,396Short-term investments


75,258







75,258Restricted cash, cash equivalents and short-term investments


25,737







25,737Inventories


30,081







30,081Other current assets


30,065



253



30,318Total current assets


243,537



253



243,790Property and equipment, net


534,458







534,458Wireless licenses


766,187







766,187Assets held for sale


87,961







87,961Goodwill


449,438



(5,649
)


443,789Other intangible assets, net


132,245







132,245Deposits for wireless licenses


68,221







68,221Other assets


13,416







13,416Total assets

$
2,295,463


$
(5,396
)

$
2,290,067Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
79,571


$



$
79,571Current maturities of long-term debt


5,000







5,000Other current liabilities


64,791



(8,937
)


55,854Total current liabilities


149,362



(8,937
)


140,425Long-term debt


492,500







492,500Other long-term liabilities


167,628



498



168,126Total liabilities


809,490



(8,439
)


801,051Minority interests


1,000







1,000Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,507,751







1,507,751Unearned share-based compensation


(22,229
)






(22,229
)Retained earnings


228



3,043



3,271Accumulated other comprehensive income


(783
)






(783
)Total stockholders equity


1,484,973



3,043



1,488,016Total liabilities and stockholders equity

$
2,295,463


$
(5,396
)

$
2,290,067   47




---



##### Table of Contents



Three Months Ended June 30, 2005Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
189,704


$
1,088


$
179


$
840


$



$



$
191,811Equipment revenues


37,125











10,789











47,914Total revenues


226,829



1,088



179



11,629











239,725Operating expenses:






















Cost of service (exclusive of items shown separately below)


(49,608
)










(730
)










(50,338
)Cost of equipment


(42,799
)










(10,899
)










(53,698
)Selling and marketing


(24,810
)






















(24,810
)General and administrative


(42,423
)






















(42,423
)Depreciation and amortization


(47,281
)






















(47,281
)Impairment of assets


(11,354
)






















(11,354
)Total operating expenses


(218,275
)










(11,629
)










(229,904
)Operating income


8,554



1,088



179















9,821Interest income


1,176























1,176Interest expense


(7,566
)






















(7,566
)Other expense, net


(39
)






















(39
)Income before income taxes


2,125



1,088



179















3,392Income tax expense


(1,022
)


















(510
)


(1,532
)Net income

$
1,103


$
1,088


$
179


$



$



$
(510
)

$
1,860Basic and diluted earnings per share:Basic earnings per share

$
0.02


$
0.02


$



$



$



$
(0.01
)

$
0.03Diluted earnings per share

$
0.02


$
0.02


$



$



$



$
(0.01
)

$
0.03Shares used in per share calculations:Basic


60,030























60,030Diluted


60,242























60,242   48




---



##### Table of Contents



March 31, 2005PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
22,211


$



$
22,211Short-term investments


99,402







99,402Restricted cash, cash equivalents and short-term investments


30,903







30,903Inventories


28,982







28,982Other current assets


36,662



185



36,847Total current assets


218,160



185



218,345Property and equipment, net


548,166







548,166Wireless licenses


581,828







581,828Assets held for sale


88,057







88,057Goodwill


453,956



(5,649
)


448,307Other intangible assets, net


140,824







140,824Deposits for wireless licenses


236,845







236,845Other assets


14,184







14,184Total assets

$
2,282,020


$
(5,464
)

$
2,276,556Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
73,421


$



$
73,421Current maturities of long-term debt


5,000







5,000Other current liabilities


70,511



(7,738
)


62,773Total current liabilities


148,932



(7,738
)


141,194Long-term debt


493,750







493,750Other long-term liabilities


160,812



(12
)


160,800Total liabilities


803,494



(7,750
)


795,744Minority interests


1,000







1,000Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,478,392







1,478,392Retained earnings


(875
)


2,286



1,411Accumulated other comprehensive income


3







3Total stockholders equity


1,477,526



2,286



1,479,812Total liabilities and stockholders equity

$
2,282,020


$
(5,464
)

$
2,276,556  49




---



##### Table of Contents



Three Months Ended March 31, 2005Revenue


OtherPreviously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
185,981


$
(153
)

$
136


$
708


$



$



$
186,672Equipment revenues


42,389











6,578











48,967Total revenues


228,370



(153
)


136



7,286











235,639Operating expenses:Cost of service (exclusive of items shown separately below)


(50,197
)










(660
)










(50,857
)Cost of equipment


(49,178
)










(6,626
)










(55,804
)Selling and marketing


(22,995
)






















(22,995
)General and administrative


(36,035
)






















(36,035
)Depreciation and amortization


(48,104
)






















(48,104
)Total operating expenses


(206,509
)










(7,286
)










(213,795
)Operating income


21,861



(153
)


136















21,844Interest income


1,903























1,903Interest expense


(9,123
)






















(9,123
)Other expense, net


(1,286
)






















(1,286
)Income before income taxes


13,355



(153
)


136















13,338Income tax expense


(5,839
)


















12



(5,827
)Net income

$
7,516


$
(153
)

$
136


$



$



$
12


$
7,511Basic and diluted earnings per share:Basic earnings per share

$
0.13


$



$



$



$



$



$
0.13Diluted earnings per share

$
0.13


$



$



$



$



$



$
0.13Shares used in per share calculations:Basic


60,000























60,000Diluted


60,236























60,236   Performance
    Measures
   50




---



##### Table of Contents



Regulation S-K
 51




---



##### Table of Contents



52




---



##### Table of Contents



Three Months Ended


Year EndedMarch 31,


June 30,


September 30,


December 31,


December 31,2006


2006


2006


2006


2006(As Restated)


(As Restated)


(As Restated)


(As Restated)


(As Restated)ARPU

$
42.31


$
42.30


$
42.87


$
43.63


$
42.81CPGA

$
128


$
195


$
176


$
179


$
171CCU

$
19.86


$
19.51


$
21.05


$
20.32


$
20.20Churn


3.3
%


3.6
%


4.3
%


4.1
%


3.9
%   Three Months Ended


Year EndedMarch 31,


June 30,


September 30,


December 31,


December 31,2005


2005


2005


2005


2005(As Restated)


(As Restated)


(As Restated)


(As Restated)


(As Restated)ARPU

$
39.17


$
39.67


$
40.43


$
40.03


$
39.79CPGA

$
126


$
134


$
140


$
156


$
140CCU

$
19.17


$
18.72


$
19.83


$
19.03


$
19.17Churn


3.3
%


3.9
%


4.4
%


4.1
%


3.9
%   Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
    Three Months Ended


Year EndedMarch 31,


June 30,


September 30,


December 31,


December 31,2006


2006


2006


2006


2006(As Restated)


(As Restated)


(As Restated)


(As Restated)


(As Restated)Selling and marketing expense

$
29,102


$
35,942


$
42,948


$
51,265


$
159,257Less share-based compensation expense included in selling and
    marketing expense


(327
)


(473
)


(637
)


(533
)


(1,970
)Plus cost of equipment


71,977



65,396



83,457



90,004



310,834Less equipment revenue


(63,765
)


(50,299
)


(52,712
)


(44,046
)


(210,822
)Less net loss on equipment transactions unrelated to initial
    customer acquisition


(1,247
)


(1,139
)


(1,822
)


(3,988
)


(8,196
)Total costs used in the calculation of CPGA

$
35,740


$
49,427


$
71,234


$
92,702


$
249,103Gross customer additions


278,370



253,033



405,178



519,229



1,455,810CPGA

$
128


$
195


$
176


$
179


$
171   53




---



##### Table of Contents



Three Months Ended


Year EndedMarch 31,


June 30,


September 30,


December 31,


December 31,2005


2005


2005


2005


2005(As Restated)


(As Restated)


(As Restated)


(As Restated)


(As Restated)Selling and marketing expense

$
22,995


$
24,810


$
25,535


$
26,702


$
100,042Less share-based compensation expense included in selling and
    marketing expense






(693
)


(203
)


(125
)


(1,021
)Plus cost of equipment


55,804



53,698



61,164



59,854



230,520Less equipment revenue


(48,967
)


(47,914
)


(48,287
)


(43,687
)


(188,855
)Less net loss on equipment transactions unrelated to initial
    customer acquisition


(4,466
)


(4,174
)


(5,555
)


(4,376
)


(18,571
)Total costs used in the calculation of CPGA

$
25,366


$
25,727


$
32,654


$
38,368


$
122,115Gross customer additions


201,467



191,288



233,699



245,817



872,271CPGA

$
126


$
134


$
140


$
156


$
140     Three Months Ended


Year EndedMarch 31,


June 30,


September 30,


December 31,


December 31,2006


2006


2006


2006


2006(As Restated)


(As Restated)


(As Restated)


(As Restated)


(As Restated)Cost of service

$
56,210


$
61,255


$
71,575


$
75,122


$
264,162Plus general and administrative expense


49,090



46,576



49,116



51,822



196,604Less share-based compensation expense included in cost of
    service and general and administrative expense


(4,165
)


(4,215
)


(4,426
)


(4,949
)


(17,755
)Plus net loss on equipment transactions unrelated to initial
    customer acquisition


1,247



1,139



1,822



3,988



8,196Total costs used in the calculation of CCU

$
102,382


$
104,755


$
118,087


$
125,983


$
451,207Weighted-average number of customers


1,718,349



1,790,232



1,870,204



2,067,122



1,861,477CCU

$
19.86


$
19.51


$
21.05


$
20.32


$
20.20   54




---



##### Table of Contents



Three Months Ended


Year EndedMarch 31,


June 30,


September 30,


December 31,


December 31,2005


2005


2005


2005


2005(As Restated)


(As Restated)


(As Restated)


(As Restated)


(As Restated)Cost of service

$
50,857


$
50,338


$
51,139


$
51,214


$
203,548Plus general and administrative expense


36,035



42,423



41,306



39,977



159,741Less share-based compensation expense included in cost of
    service and general and administrative expense






(6,436
)


(2,518
)


(2,504
)


(11,458
)Plus net loss on equipment transactions unrelated to initial
    customer acquisition


4,466



4,174



5,555



4,376



18,571Total costs used in the calculation of CCU

$
91,358


$
90,499


$
95,482


$
93,063


$
370,402Weighted-average number of customers


1,588,372



1,611,524



1,605,222



1,630,011



1,610,170CCU

$
19.17


$
18.72


$
19.83


$
19.03


$
19.17   Liquidity
    and Capital Resources
  Overview
  short-term
       55




---



##### Table of Contents



Cash
    Flows
    Year Ended December 31,2006


2005


2004(As Restated)Net cash provided by operating activities

$
289,871


$
308,280


$
190,375Net cash used in investing activities


(1,550,624
)


(332,112
)


(96,577
)Net cash provided by (used in) financing activities


1,340,492



175,764



(36,727
)   Operating
    Activities
     56




---



##### Table of Contents



pay-in-kind
  Investing
    Activities
    
    During July and October 2006, we paid to the FCC
    $710.2 million for the purchase of 99 licenses acquired in
    Auction #66, and Denali License paid $274.1 million as
    a deposit for the license for which it was named the winning
    bidder in Auction #66.
    During November 2006, we purchased 13 wireless licenses in North
    Carolina and South Carolina for an aggregate purchase price of
    $31.8 million.
    During the year ended December 31, 2006, we, ANB 1
    License and LCW Operations made over $590 million in
    purchases of property and equipment for the build-out of our new
    markets.    
    During the year ended December 31, 2005, we paid
    $208.8 million for the purchase of property and equipment.
    During the year ended December 31, 2005, subsidiaries of
    Cricket and ANB 1 paid $244.0 million for the purchase
    of wireless licenses, partially offset by proceeds received of
    $108.8 million from the sale of wireless licenses and
    operating assets.    Financing
    Activities
    
    In June 2006, we replaced our previous $710 million senior
    secured credit facility with a new amended and restated senior
    secured credit facility consisting of a $900 million term
    loan and a $200 million revolving credit facility. The
    replacement term loan generated net proceeds of approximately
    $307 million, after repayment of the principal balances of
    the old term loan and prior to the payment of fees and expenses.
    See  Senior Secured Credit Facilities
    below.
    In October 2006, we physically settled 6,440,000 shares of
    Leap common stock pursuant to our forward sale agreements and
    received aggregate cash proceeds of $260 million (before
    expenses) from such physical settlements. See
     Forward Sale Agreements below.
    In October 2006, we borrowed $570 million under our
    $850 million unsecured bridge loan facility to finance a
    portion of the remaining amounts owed by us and Denali License
    to the FCC for Auction #66 licenses.
    In October 2006, we issued $750 million of
    9.375% senior notes due 2014, and we used a portion of the
    approximately $739 million of cash proceeds (after
    commissions and before expenses) from the sale to repay our
    outstanding obligations, including accrued interest, under our
    bridge loan facility. Upon repayment of our outstanding
    indebtedness, the bridge loan facility was terminated. See
     Senior Notes below.
    In October 2006, LCW Operations entered into a senior secured
    credit agreement consisting of two term loans for
    $40 million in the aggregate. The loans bear interest at
    LIBOR plus the applicable margin ranging from 2.70% to 6.33% and
    must be repaid in varying quarterly installments beginning in
    2008, with the final payment due in 2011. The loans are
    non-recourse to Leap, Cricket and their other subsidiaries. See
     Senior Secured Credit Facilities below. 57




---



##### Table of Contents



pay-in-kind
    Senior
    Secured Credit Facilities
  Cricket
    Communications
          Form 10-Q
   58




---



##### Table of Contents



Form 10-Q Form 10-K Form 10-K/A Form 10-Q/A
    LCW
    Operations
    Forward
    Sale Agreements
   59




---



##### Table of Contents



Senior
    Notes
         60




---



##### Table of Contents



Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  Capital
    Expenditures
        Auction
    #66 Properties and Build-Outs
    Other
    Acquisitions and Dispositions
     61




---



##### Table of Contents



Contractual
    Obligations
    2007


2008-2009


2010-2011


Thereafter


TotalLong-term debt(1)

$
9,000


$
23,500


$
52,500


$
1,600,500


$
1,685,500Contractual interest(2)


145,544



288,930



284,539



287,582



1,006,595Operating leases


88,275



171,917



165,548



371,809



797,549Purchase obligations(3)


204,482



89,935



53,800







348,217Origination fees for ANB 1 investment


2,700















2,700Total

$
450,001


$
574,282


$
556,387


$
2,259,891


$
3,840,561     (1)
    
    Amounts shown for Crickets long-term debt include
    principal only. Interest on the debt, calculated at the current
    interest rate, is stated separately.(2)
    
    Contractual interest is based on the current interest rates in
    effect at December 31, 2006 for debt outstanding as of that
    date.(3)
    
    Purchase obligations are defined as agreements to purchase goods
    or services that are enforceable and legally binding on us and
    that specify all significant terms including (a) fixed or
    minimum quantities to be purchased, (b) fixed, minimum or
    variable price provisions, and (c) the approximate timing
    of the transaction.        Off-Balance
    Sheet Arrangements
   62




---



##### Table of Contents



Recent
    Accounting Pronouncements
     63




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Consolidated
    financial statements
            Internal
    control over financial reporting
  Internal Control 
    Integrated Framework
   64




---



##### Table of Contents




    There were deficiencies in the Companys internal controls
    over the existence, completeness and accuracy of revenues, cost
    of revenues and deferred revenues. Specifically, the design of
    controls over the preparation and review of the account
    reconciliations and analysis of revenues, cost of revenues and
    deferred revenues did not detect the errors in revenues, cost of
    revenues and deferred revenues. A contributing factor was the
    ineffective operation of the Companys user acceptance
    testing (i.e., ineffective testing) of changes made to its
    revenue and billing systems in connection with the introduction
    or modification of service offerings. This material weakness
    resulted in the accounting errors which have caused the Company
    to restate its consolidated financial statements as of and for
    the years ended December 31, 2006 and 2005 (including
    interim periods therein), for the period from August 1,
    2004 to December 31, 2004 and for the period from
    January 1, 2004 to July 31, 2004, and its condensed
    consolidated financial statements as of and for the quarterly
    periods ended June 30, 2007 and March 31, 2007. In
    addition, this material weakness could result in a misstatement
    of revenues, cost of revenues and deferred revenues that would
    result in a material misstatement to the Companys interim
    or annual consolidated financial statements that would not be
    prevented or detected on a timely basis.      Internal Control  Integrated Framework Internal Control  Integrated Framework
      65




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
              66




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except share data)
  December 31,


December 31,2006


2005(As Restated)


(As Restated)(See Note 2)


(See Note 2)AssetsCash and cash equivalents

$
372,812


$
293,073Short-term investments


66,400



90,981Restricted cash, cash equivalents and short-term investments


13,581



13,759Inventories


90,185



37,320Other current assets


52,981



28,718Total current assets


595,959



463,851Property and equipment, net


1,078,521



622,207Wireless licenses


1,563,958



821,288Assets held for sale


8,070



15,145Goodwill


425,782



425,782Other intangible assets, net


79,828



113,554Deposits for wireless licenses


274,084



Other assets


58,745



38,119Total assets

$
4,084,947


$
2,499,946Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
317,093


$
168,431Current maturities of long-term debt


9,000



6,111Other current liabilities


84,675



43,943Total current liabilities


410,768



218,485Long-term debt


1,676,500



588,333Deferred tax liabilities


148,335



137,342Other long-term liabilities


47,608



36,424Total liabilities


2,283,211



980,584Minority interests


29,943



1,761Commitments and contingencies (Note 14)Stockholders equity:Preferred stock  authorized 10,000,000 shares,
    $.0001 par value; no shares issued and outstanding






Common stock  authorized 160,000,000 shares,
    $.0001 par value; 67,892,512 and 61,202,806 shares
    issued and outstanding at December 31, 2006 and 2005,
    respectively


7



6Additional paid-in capital


1,769,772



1,511,814Unearned share-based compensation






(20,942
)Retained earnings


228



24,585Accumulated other comprehensive income


1,786



2,138Total stockholders equity


1,771,793



1,517,601Total liabilities and stockholders equity

$
4,084,947


$
2,499,946    67




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In
    thousands, except per share data)
  PredecessorSuccessor Company


CompanyFive Months


Seven MonthsYear Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


July 31,2006


2005


2004


2004(As Restated)


(As Restated)


(As Restated)


(As Restated)(See Note 2)


(See Note 2)


(See Note 2)


(See Note 2)Revenues:Service revenues

$
956,365


$
768,916


$
289,355


$
405,850Equipment revenues


210,822



188,855



61,492



86,906Total revenues


1,167,187



957,771



350,847



492,756Operating expenses:Cost of service (exclusive of items shown separately below)


(264,162
)


(203,548
)


(80,286
)


(114,628
)Cost of equipment


(310,834
)


(230,520
)


(85,460
)


(101,441
)Selling and marketing


(159,257
)


(100,042
)


(39,938
)


(51,997
)General and administrative


(196,604
)


(159,741
)


(57,110
)


(81,514
)Depreciation and amortization


(226,747
)


(195,462
)


(75,324
)


(178,120
)Impairment of indefinite-lived intangible assets


(7,912
)


(12,043
)






Total operating expenses


(1,165,516
)


(901,356
)


(338,118
)


(527,700
)Gains on sales of wireless licenses and operating assets


22,054



14,587







532Operating income (loss)


23,725



71,002



12,729



(34,412
)Minority interests in consolidated subsidiaries


1,493



(31
)






Interest income


23,063



9,957



1,812



Interest expense (contractual interest expense was
    $156.3 million for the seven months ended July 31,
    2004)


(61,334
)


(30,051
)


(16,594
)


(4,195
)Other income (expense), net


(2,650
)


1,423



(117
)


(293
)Income (loss) before reorganization items, income taxes and
    cumulative effect of change in accounting principle


(15,703
)


52,300



(2,170
)


(38,900
)Reorganization items, net














962,444Income (loss) before income taxes and cumulative effect of
    change in accounting principle


(15,703
)


52,300



(2,170
)


923,544Income tax expense


(9,277
)


(21,615
)


(3,930
)


(4,166
)Income (loss) before cumulative effect of change in accounting
    principle


(24,980
)


30,685



(6,100
)


919,378Cumulative effect of change in accounting principle


623











Net income (loss)

$
(24,357
)

$
30,685


$
(6,100
)

$
919,378Basic earnings (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
(0.41
)

$
0.51


$
(0.10
)

$
15.68Cumulative effect of change in accounting principle


0.01











Basic earnings (loss) per share

$
(0.40
)

$
0.51


$
(0.10
)

$
15.68Diluted earnings (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
(0.41
)

$
0.50


$
(0.10
)

$
15.68Cumulative effect of change in accounting principle


0.01











Diluted earnings (loss) per share

$
(0.40
)

$
0.50


$
(0.10
)

$
15.68Shares used in per share calculations:Basic


61,645



60,135



60,000



58,623Diluted


61,645



61,003



60,000



58,623    68




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
  PredecessorSuccessor Company


CompanyFive Months


Seven MonthsYear Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


July 31,2006


2005


2004


2004(As Restated)


(As Restated)


(As Restated)


(As Restated)(See Note 2)


(See Note 2)


(See Note 2)


(See Note 2)Operating activities:Net income (loss)

$
(24,357
)

$
30,685


$
(6,100
)

$
919,378Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Share-based compensation expense


19,725



12,479







Depreciation and amortization


226,747



195,462



75,324



178,120Amortization of debt issuance costs


2,491



565







Loss on extinguishment of debt


6,897



1,219







Deferred income tax expense


8,831



21,552



3,823



3,370Impairment of indefinite-lived intangible assets


7,912



12,043







Gains on sales of wireless licenses and operating assets


(22,054
)


(14,587
)






(532
)Minority interest activity


(1,493
)


31







Cumulative effect of change in accounting principle


(623
)










Reorganization items, net














(962,444
)Other














(805
)Changes in assets and liabilities:Inventories


(52,898
)


(11,504
)


8,923



(17,059
)Other assets


(29,669
)


4,223



(21,266
)


(5,343
)Accounts payable and accrued liabilities


95,502



57,514



(4,421
)


4,761Other liabilities


52,860



(1,402
)


13,469



6,673Net cash provided by operating activities before reorganization
    activities


289,871



308,280



69,752



126,119Net cash used for reorganization activities














(5,496
)Net cash provided by operating activities


289,871



308,280



69,752



120,623Investing activities:Purchases of property and equipment


(591,295
)


(208,808
)


(49,043
)


(34,456
)Prepayments for purchases of property and equipment


(3,846
)


(9,828
)


5,102



1,215Purchases of and deposits for wireless licenses


(1,018,832
)


(243,960
)






Proceeds from sales of wireless licenses and operating assets


40,372



108,800







2,000Purchases of investments


(150,488
)


(307,021
)


(47,368
)


(87,201
)Sales and maturities of investments


177,932



329,043



32,494



58,333Changes in restricted cash, cash equivalents and short-term
    investments, net


(4,467
)


(338
)


12,537



9,810Net cash used in investing activities


(1,550,624
)


(332,112
)


(46,278
)


(50,299
)Financing activities:Proceeds from long-term debt


2,260,000



600,000







Repayment of long-term debt


(1,168,944
)


(418,285
)


(36,727
)


Payment of debt issuance costs


(22,864
)


(6,951
)






Minority interest contributions


12,402



1,000







Proceeds from issuance of common stock, net


1,119











Proceeds from physical settlement of forward equity sale


260,036











Payment of fees related to forward equity sale


(1,257
)










Net cash provided by (used in) financing activities


1,340,492



175,764



(36,727
)


Net increase (decrease) in cash and cash equivalents


79,739



151,932



(13,253
)


70,324Cash and cash equivalents at beginning of period


293,073



141,141



154,394



84,070Cash and cash equivalents at end of period

$
372,812


$
293,073


$
141,141


$
154,394    69




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
 (In
    thousands, except share data)
  AccumulatedRetained


OtherAdditional


Unearned


Earnings


ComprehensiveCommon Stock


Paid-In


Share-Based


(Accumulated


IncomeShares


Amount


Capital


Compensation


Deficit)


(Loss)


Total(As Restated)





(As Restated)





(As Restated)(See Note 2)





(See Note 2)





(See Note 2)Predecessor Company balance at December 31, 2003


58,704,224


$
6


$
1,156,410


$
(421
)

$
(2,048,970
)

$
(920
)

$
(893,895
)Components of comprehensive income:Net income


















919,378







919,378Net unrealized holding gains on investments






















47



47Comprehensive income


























919,425Issuance of common stock under share-based compensation plans










31















31Unearned share-based compensation










(1,205
)


1,205











Amortization of share-based compensation














(837
)










(837
)Application of fresh-start reporting:Elimination of Predecessor Company common stock


(58,704,224
)


(6
)


(1,155,236
)


53







873



(1,154,316
)Issuance of Successor Company common stock and fresh-start
    adjustments


60,000,000



6



1,478,392







1,129,592







2,607,990Successor Company balance at August 1, 2004


60,000,000



6



1,478,392















1,478,398Components of comprehensive loss:Net loss


















(6,100
)






(6,100
)Net unrealized holding gains on investments






















49



49Comprehensive loss


























(6,051
)Successor Company balance at December 31, 2004


60,000,000



6



1,478,392







(6,100
)


49



1,472,347Components of comprehensive income:Net income


















30,685







30,685Net unrealized holding losses on investments






















(57
)


(57
)Unrealized gains on derivative instruments






















2,146



2,146Comprehensive income


























32,774Issuance of common stock under share-based compensation plans,
    net of repurchases


1,202,806







7,105















7,105Unearned share-based compensation










26,317



(26,317
)










Amortization of share-based compensation














5,375











5,375Successor Company balance at December 31, 2005


61,202,806



6



1,511,814



(20,942
)


24,585



2,138



1,517,601Components of comprehensive loss:Net loss


















(24,357
)






(24,357
)Net unrealized holding gains on investments






















4



4Unrealized losses on derivative instruments






















(356
)


(356
)Comprehensive loss


























(24,709
)Cumulative effect of change in accounting principle










(623
)














(623
)Reclassification of unearned share-based compensation related to
    the adoption of SFAS No. 123R










(20,942
)


20,942











Issuance of common stock under forward sale agreements


6,440,000



1



258,679















258,680Share-based compensation expense










19,725















19,725Issuance of common stock under share-based compensation plans,
    net of repurchases


249,706







1,119















1,119Successor Company balance at December 31, 2006


67,892,512


$
7


$
1,769,772


$



$
228


$
1,786


$
1,771,793    70




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Note 1.
    The
    Company  ® tm
    90-7, (SOP 90-7)
  Note 2.
    Restatement
    of Previously Reported Consolidated Financial
    Statements      
    Errors in the Timing of Recognition of Service Revenues
    (Revenue  Timing
    Adjustments)  The Company identified
    several timing errors in the recognition of service revenues
    that generally resulted from errors in the processes that the
    Company used to ensure that revenues were not recognized until
    service had been provided to customers and cash had been
    received from them. The nature of these timing errors generally
    was that revenue that was recognized in a particular month
    should have been recognized in either the preceding or the
    following month. These errors resulted in an understatement of
    service revenues of $6.2 million, $2.3 million and
    $0.9 million in the seven months ended July 31, 2004,
    the five months ended 71




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2004 and the year ended December 31,
    2005, respectively, and an overstatement of service revenues of
    $16.1 million in the year ended December 31, 2006.  
    Other Errors in the Recognition of Service Revenues
    (Other  Revenue
    Adjustments)  The Company incorrectly
    recognized revenue for a group of customers who voluntarily
    disconnected their service. For these customers, approximately
    one month of deferred revenue that was recorded when the
    customers monthly bills were generated was mistakenly
    recognized as revenue after their service was disconnected, due
    to the fact that one of the key reports used to validate that
    revenue is not recognized for customers who have not yet paid
    erroneously excluded this subset of disconnected customer
    balances. These customers comprised a small percentage of the
    Companys disconnected customers, and the error arose in
    connection with the Companys re-implementation of the
    pay-in-advance
    billing method for new and reactivating customers in May 2006.
    This error resulted in an overstatement of service revenues of
    $2.8 million in the year ended December 31, 2006. In
    addition, certain other errors were made in the recognition of
    revenue and revenue-related accounts, resulting in an
    understatement of service revenues of $0.8 million in the
    year ended December 31, 2005 and an overstatement of
    service revenues of $2.3 million in the year ended
    December 31, 2006.
    Errors in the Classification of Certain Components of Service
    Revenues, Equipment Revenues and Operating Expenses
    (Reclassification Adjustments)  The
    Company identified errors relating to the classification of
    certain components of service revenues, equipment revenues and
    operating expenses. The Company incorrectly classified certain
    customer service fees as equipment revenue rather than service
    revenue. The Company incorrectly classified certain costs
    related to handset insurance purchased by some
    pay-in-arrears
    customers as a reduction of service revenues rather than as a
    cost of service. The Company incorrectly classified certain
    revenues received by the Company in connection with handsets
    sold to Company customers under insurance or other handset
    replacement programs as a reduction in handset costs rather than
    as equipment revenues. These classification errors resulted from
    deficiencies in certain account analyses that resulted in the
    Company incorrectly analyzing certain types of transactions for
    their classification impacts. The errors resulted in a net
    understatement of total revenues and understatement of operating
    expenses of $4.9 million, $4.2 million,
    $41.4 million and $51.7 million in the seven months
    ended July 31, 2004, the five months ended
    December 31, 2004 and the years ended December 31,
    2005 and 2006, respectively. These errors had no impact on
    operating income or net income.
    Other Non-Material Items (Other
    Adjustments)  The Company identified other
    errors that were not material, individually or in the aggregate,
    to its financial statements taken as a whole. However, because
    the Company has restated its financial statements for the
    effects of the items noted above, the Company revised its
    previously reported financial statements to correct all
    identified errors, including those that were not material. These
    items resulted in a net understatement of operating expenses of
    $0.5 million in the year ended December 31, 2005 and a
    net overstatement of operating expenses of $1.1 million in
    the year ended December 31, 2006.   72




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31, 2006PreviouslyReported


Adjustments


As RestatedAssetsCash and cash equivalents

$
374,939


$
(2,127
)

$
372,812Short-term investments


66,400







66,400Restricted cash, cash equivalents and short-term investments


13,581







13,581Inventories


90,185







90,185Other current assets


53,527



(546
)


52,981Total current assets


598,632



(2,673
)


595,959Property and equipment, net


1,077,755



766



1,078,521Wireless licenses


1,563,958







1,563,958Assets held for sale


8,070







8,070Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


79,828







79,828Deposits for wireless licenses


274,084







274,084Other assets


58,745







58,745Total assets

$
4,092,968


$
(8,021
)

$
4,084,947Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
316,494


$
599


$
317,093Current maturities of long-term debt


9,000







9,000Other current liabilities


74,637



10,038



84,675Total current liabilities


400,131



10,637



410,768Long-term debt


1,676,500







1,676,500Deferred tax liabilities


149,728



(1,393
)


148,335Other long-term liabilities


47,608







47,608Total liabilities


2,273,967



9,244



2,283,211Minority interests


30,000



(57
)


29,943Stockholders equity:Preferred stock










Common stock


7







7Additional paid-in capital


1,769,772







1,769,772Retained earnings


17,436



(17,208
)


228Accumulated other comprehensive income


1,786







1,786Total stockholders equity


1,789,001



(17,208
)


1,771,793Total liabilities and stockholders equity

$
4,092,968


$
(8,021
)

$
4,084,947  73




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2006Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


RestatedRevenues:Service revenues

$
972,781


$
(16,090
)

$
(5,056
)

$
4,730


$



$



$
956,365Equipment revenues


163,919



(28
)






46,931











210,822Total revenues


1,136,700



(16,118
)


(5,056
)


51,661











1,167,187Operating expenses:






















Cost of service (exclusive of items shown separately below)


(261,614
)










(3,157
)


609







(264,162
)Cost of equipment


(262,330
)










(48,504
)










(310,834
)Selling and marketing


(159,257
)






















(159,257
)General and administrative


(197,070
)














466







(196,604
)Depreciation and amortization


(226,747
)






















(226,747
)Impairment of assets


(7,912
)






















(7,912
)Total operating expenses


(1,114,930
)










(51,661
)


1,075







(1,165,516
)Gain on sale or disposal of assets


22,054























22,054Operating income


43,824



(16,118
)


(5,056
)






1,075







23,725Minority interests in consolidated subsidiaries


1,436















57







1,493Interest income


23,063























23,063Interest expense


(61,334
)






















(61,334
)Other expense, net


(2,650
)






















(2,650
)Income (loss) before income taxes and cumulative effect of
    change in accounting principle


4,339



(16,118
)


(5,056
)






1,132







(15,703
)Income tax expense


(9,101
)


















(176
)


(9,277
)Loss before cumulative effect of change in accounting principle


(4,762
)


(16,118
)


(5,056
)






1,132



(176
)


(24,980
)Cumulative effect of change in accounting principle


623























623Net loss

$
(4,139
)

$
(16,118
)

$
(5,056
)

$



$
1,132


$
(176
)

$
(24,357
)Basic earnings (loss) per share:Loss before cumulative effect of change in accounting principle

$
(0.08
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



$
(0.41
)Cumulative effect of change in accounting principle


0.01























0.01Basic loss per share

$
(0.07
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



$
(0.40
)Diluted earnings (loss) per share:Loss before cumulative effect of change in accounting principle

$
(0.08
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



$
(0.41
)Cumulative effect of change in accounting principle


0.01























0.01Diluted loss per share

$
(0.07
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



$
(0.40
)Shares used in per share calculations:Basic


61,645























61,645Diluted


61,645























61,645   74




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2006PreviouslyReported


Adjustments


As RestatedOperating activities:Net loss

$
(4,139
)

$
(20,218
)

$
(24,357
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Share-based compensation expense


19,959



(234
)


19,725Depreciation and amortization


226,747







226,747Amortization of debt issuance costs


2,491







2,491Loss on extinguishment of debt


6,897







6,897Deferred income tax expense


8,367



464



8,831Impairment of indefinite-lived intangible assets


7,912







7,912Gains on sales of wireless licenses and operating assets


(22,054
)






(22,054
)Minority interest activity


(1,436
)


(57
)


(1,493
)Cumulative effect of change in accounting principle


(623
)






(623
)Changes in assets and liabilities:Inventories


(52,898
)






(52,898
)Other assets


(30,270
)


601



(29,669
)Accounts payable and accrued liabilities


95,303



199



95,502Other liabilities


34,976



17,884



52,860Net cash provided by operating activities


291,232



(1,361
)


289,871Investing activities:Purchases of property and equipment


(590,529
)


(766
)


(591,295
)Prepayments for purchases of property and equipment


(3,846
)






(3,846
)Purchases of and deposits for wireless licenses


(1,018,832
)






(1,018,832
)Proceeds from sales of wireless licenses and operating assets


40,372







40,372Purchases of investments


(150,488
)






(150,488
)Sales and maturities of investments


177,932







177,932Changes in restricted cash, cash equivalents and short-term
    investments, net


(4,467
)






(4,467
)Net cash used in investing activities


(1,549,858
)


(766
)


(1,550,624
)Financing activities:Proceeds from long-term debt


2,260,000







2,260,000Repayment of long-term debt


(1,168,944
)






(1,168,944
)Payment of debt issuance costs


(22,864
)






(22,864
)Minority interest contributions


12,402







12,402Proceeds from issuance of common stock, net


1,119







1,119Proceeds from physical settlement of forward equity sale


260,036







260,036Payment of fees related to forward equity sale


(1,257
)






(1,257
)Net cash provided by financing activities


1,340,492







1,340,492Net increase in cash and cash equivalents


81,866



(2,127
)


79,739Cash and cash equivalents at beginning of period


293,073







293,073Cash and cash equivalents at end of period

$
374,939


$
(2,127
)

$
372,812   75




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2005PreviouslyReported


Adjustments


As RestatedAssetsCash and cash equivalents

$
293,073


$



$
293,073Short-term investments


90,981







90,981Restricted cash, cash equivalents and short-term investments


13,759







13,759Inventories


37,320







37,320Other current assets


29,237



(519
)


28,718Total current assets


464,370



(519
)


463,851Property and equipment, net


621,946



261



622,207Wireless licenses


821,288







821,288Assets held for sale


15,145







15,145Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


113,554







113,554Other assets


38,119







38,119Total assets

$
2,506,318


$
(6,372
)

$
2,499,946Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
167,770


$
661



168,431Current maturities of long-term debt


6,111







6,111Other current liabilities


49,627



(5,684
)


43,943Total current liabilities


223,508



(5,023
)


218,485Long-term debt


588,333







588,333Deferred tax liabilities


141,935



(4,593
)


137,342Other long-term liabilities


36,424







36,424Total liabilities


990,200



(9,616
)


980,584Minority interests


1,761







1,761Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,511,580



234



1,511,814Unearned share-based compensation


(20,942
)






(20,942
)Retained earnings


21,575



3,010



24,585Accumulated other comprehensive income


2,138







2,138Total stockholders equity


1,514,357



3,244



1,517,601Total liabilities and stockholders equity

$
2,506,318


$
(6,372
)

$
2,499,946  76




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2005Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


RestatedRevenues:Service revenues

$
763,680


$
890


$
785


$
3,561


$



$



$
768,916Equipment revenues


150,983











37,872











188,855Total revenues


914,663



890



785



41,433











957,771Operating expenses:Cost of service (exclusive of items shown separately below)


(200,430
)










(3,118
)










(203,548
)Cost of equipment


(192,205
)










(38,315
)










(230,520
)Selling and marketing


(100,042
)






















(100,042
)General and administrative


(159,249
)














(492
)






(159,741
)Depreciation and amortization


(195,462
)






















(195,462
)Impairment of assets


(12,043
)






















(12,043
)Total operating expenses


(859,431
)










(41,433
)


(492
)






(901,356
)Gain on sale or disposal of assets


14,587























14,587Operating income


69,819



890



785







(492
)






71,002Minority interests in consolidated subsidiaries


(31
)






















(31
)Interest income


9,957























9,957Interest expense


(30,051
)






















(30,051
)Other income, net


1,423























1,423Income before income taxes


51,117



890



785







(492
)






52,300Income tax expense


(21,151
)


















(464
)


(21,615
)Net income

$
29,966


$
890


$
785


$



$
(492
)

$
(464
)

$
30,685Basic and diluted earnings per share:Basic earnings per share

$
0.50


$
0.02


$
0.01


$



$
(0.01
)

$
(0.01
)

$
0.51Diluted earnings per share

$
0.49


$
0.02


$
0.01


$



$
(0.01
)

$
(0.01
)

$
0.50Shares used in per share calculations:Basic


60,135























60,135Diluted


61,003























61,003  77




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2005PreviouslyReported


Adjustments


As RestatedOperating activities:Net income

$
29,966


$
719


$
30,685Adjustments to reconcile net income to net cash provided by
    operating activities:Share-based compensation expense


12,245



234



12,479Depreciation and amortization


195,462







195,462Amortization of debt issuance costs


565







565Loss on extinguishment of debt


1,219







1,219Deferred income tax expense


21,088



464



21,552Impairment of indefinite-lived intangible assets


12,043







12,043Gains on sales of wireless licenses and operating assets


(14,587
)






(14,587
)Minority interest activity


31







31Changes in assets and liabilities:Inventories


(11,504
)






(11,504
)Other assets


3,570



653



4,223Accounts payable and accrued liabilities


57,101



413



57,514Other liabilities


1,081



(2,483
)


(1,402
)Net cash provided by operating activities


308,280







308,280Investing activities:Purchases of property and equipment


(208,808
)






(208,808
)Prepayments for purchases of property and equipment


(9,828
)






(9,828
)Purchases of and deposits for wireless licenses


(243,960
)






(243,960
)Proceeds from sales of wireless licenses and operating assets


108,800







108,800Purchases of investments


(307,021
)






(307,021
)Sales and maturities of investments


329,043







329,043Changes in restricted cash, cash equivalents and short-term
    investments, net


(338
)






(338
)Net cash used in investing activities


(332,112
)






(332,112
)Financing activities:Proceeds from long-term debt


600,000







600,000Repayment of long-term debt


(418,285
)






(418,285
)Payment of debt issuance costs


(6,951
)






(6,951
)Minority interest contributions


1,000







1,000Net cash provided by financing activities


175,764







175,764Net increase in cash and cash equivalents


151,932







151,932Cash and cash equivalents at beginning of period


141,141







141,141Cash and cash equivalents at end of period

$
293,073


$



$
293,073  78




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Successor CompanyFive Months Ended December 31, 2004Revenue -


Other -Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


RestatedRevenues:Service revenues

$
285,647


$
2,291


$



$
1,417


$



$



$
289,355Equipment revenues


58,713











2,779











61,492Total revenues


344,360



2,291







4,196











350,847Operating expenses:Cost of service (exclusive of items shown separately below)


(79,148
)










(1,138
)










(80,286
)Cost of equipment


(82,402
)










(3,058
)










(85,460
)Selling and marketing


(39,938
)






















(39,938
)General and administrative


(57,110
)






















(57,110
)Depreciation and amortization


(75,324
)






















(75,324
)Total operating expenses


(333,922
)










(4,196
)










(338,118
)Operating income


10,438



2,291



















12,729Interest income


1,812























1,812Interest expense


(16,594
)






















(16,594
)Other expense, net


(117
)






















(117
)Loss before income taxes


(4,461
)


2,291



















(2,170
)Income tax expense


(3,930
)






















(3,930
)Net loss

$
(8,391
)

$
2,291


$



$



$



$



$
(6,100
)Basic and diluted loss per share:Basic loss per share

$
(0.14
)

$
0.04


$



$



$



$



$
(0.10
)Diluted loss per share

$
(0.14
)

$
0.04


$



$



$



$



$
(0.10
)Shares used in per share calculations:Basic


60,000























60,000Diluted


60,000























60,000   79




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Successor CompanyFive Months Ended December 31, 2004As PreviouslyReported


Adjustments


As RestatedOperating activities:Net loss

$
(8,391
)

$
2,291


$
(6,100
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Depreciation and amortization


75,324







75,324Deferred income tax expense


3,823







3,823Changes in assets and liabilities:Inventories


8,923







8,923Other assets


(21,132
)


(134
)


(21,266
)Accounts payable and accrued liabilities


(4,421
)






(4,421
)Other liabilities


15,626



(2,157
)


13,469Net cash provided by operating activities


69,752







69,752Investing activities:Purchases of property and equipment


(49,043
)






(49,043
)Prepayments for purchases of property and equipment


5,102







5,102Purchases of investments


(47,368
)






(47,368
)Sales and maturities of investments


32,494







32,494Changes in restricted cash, cash equivalents and short-term
    investments, net


12,537







12,537Net cash used in investing activities


(46,278
)






(46,278
)Financing activities:Repayment of long-term debt


(36,727
)






(36,727
)Net cash used in financing activities


(36,727
)






(36,727
)Net decrease in cash and cash equivalents


(13,253
)






(13,253
)Cash and cash equivalents at beginning of period


154,394







154,394Cash and cash equivalents at end of period

$
141,141


$



$
141,141   80




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Predecessor CompanySeven Months Ended July 31, 2004Revenue-


Other-Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


RestatedRevenues:Service revenues

$
398,451


$
6,188


$



$
1,211


$



$



$
405,850Equipment revenues


83,196











3,710











86,906Total revenues


481,647



6,188







4,921











492,756Operating expenses:Cost of service (exclusive of items shown separately below)


(113,988
)










(640
)










(114,628
)Cost of equipment


(97,160
)










(4,281
)










(101,441
)Selling and marketing


(51,997
)






















(51,997
)General and administrative


(81,514
)






















(81,514
)Depreciation and amortization


(178,120
)






















(178,120
)Total operating expenses


(522,779
)










(4,921
)










(527,700
)Gain on sale or disposal of assets


532























532Operating loss


(40,600
)


6,188



















(34,412
)Interest expense


(4,195
)






















(4,195
)Other expense, net


(293
)






















(293
)Loss before reorganization items and income taxes


(45,088
)


6,188



















(38,900
)Reorganization items, net


962,444























962,444Income before income taxes


917,356



6,188



















923,544Income tax expense


(4,166
)






















(4,166
)Net income

$
913,190


$
6,188


$



$



$



$



$
919,378Basic and diluted earnings per share:Basic earnings per share

$
15.58


$
0.10


$



$



$



$



$
15.68Diluted earnings per share

$
15.58


$
0.10


$



$



$



$



$
15.68Shares used in per share calculations:Basic


58,623























58,623Diluted


58,623























58,623   81




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Predecessor CompanySeven Months Ended July 31, 2004As PreviouslyReported


Adjustments


As RestatedOperating activities:Net income

$
913,190


$
6,188


$
919,378Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


178,120







178,120Deferred income tax expense


3,370







3,370Gains on sales of wireless licenses and operating assets


(532
)






(532
)Reorganization items, net


(962,444
)






(962,444
)Other


(805
)






(805
)Changes in assets and liabilities:Inventories


(17,059
)






(17,059
)Other assets


(5,343
)






(5,343
)Accounts payable and accrued liabilities


4,761







4,761Other liabilities


12,861



(6,188
)


6,673Net cash provided by operating activities before reorganization
    activities


126,119







126,119Net cash used for reorganization activities


(5,496
)






(5,496
)Net cash provided by operating activities


120,623







120,623Investing activities:Purchases of property and equipment


(34,456
)






(34,456
)Prepayments for purchases of property and equipment


1,215







1,215Proceeds from sales of wireless licenses and operating assets


2,000







2,000Purchases of investments


(87,201
)






(87,201
)Sales and maturities of investments


58,333







58,333Changes in restricted cash, cash equivalents and short-term
    investments, net


9,810







9,810Net cash used in investing activities


(50,299
)






(50,299
)Net increase in cash and cash equivalents


70,324







70,324Cash and cash equivalents at beginning of period


84,070







84,070Cash and cash equivalents at end of period

$
154,394


$



$
154,394   Note 3.
    Basis of
    Presentation and Significant Accounting Policies  Basis
    of Presentation
   82




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Revenues
    No. 00-21, No. 00-21, No. 00-21
      and/or
   83




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Costs
    and Expenses
    Cost of Service.
  Cost of Equipment.
  Selling and Marketing.
  General and Administrative.
  Cash
    and Cash Equivalents
    Short-Term
    Investments
      Restricted
    Cash, Cash Equivalents and Short-Term Investments
   84




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Inventories
  first-in,
  Property
    and Equipment
      Depreciable LifeNetwork equipment:Switches


10Switch power equipment


15Cell site equipment, and site acquisitions and improvements


7Towers


15Antennae


3Computer hardware and software


3-5Furniture, fixtures, retail and office equipment


3-7   construction-in-progress construction-in-progress construction-in-progress No. FAS 13-1, construction-in-progress. construction-in-progress
    Wireless
    Licenses
   85




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
    and Other Intangible Assets
    Impairment
    of Long-Lived Assets
    Impairment
    of Indefinite-Lived Intangible Assets
      Derivative
    Instruments and Hedging Activities
   86




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Concentrations
    Operating
    Leases
    Asset
    Retirement Obligations
   87




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2006


2005Asset retirement obligations, beginning of year

$
13,961


$
12,726Liabilities incurred


5,174



615Liabilities settled


(263
)


(703
)Accretion expense


1,617



1,323Asset retirement obligations, end of year

$
20,489


$
13,961   Debt
    Issuance Costs
    Fair
    Value of Financial Instruments
    Advertising
    Costs
    Share-Based
    Compensation
     88




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Income
    Taxes
    SOP 90-7,
  Basic
    and Diluted Earnings (Loss) Per Share
    Fresh-Start
    Reporting and Reorganization Items
  SOP 90-7. SOP 90-7,
  SOP 90-7
 89




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SOP 90-7,
    Seven MonthsEndedJuly 31, 2004Professional fees

$
(5,005
)Gain on settlement of liabilities


2,500Adjustment of liabilities to allowed amounts


(360
)Post-petition interest income


1,436Net gain on discharge of liabilities and the net effect of
    application of fresh-start reporting


963,873Total reorganization items, net

$
962,444   Recent
    Accounting Pronouncements
     90




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 4.
    Financial
    Instruments  Short-Term
    Investments
    As of December 31, 2006Unrealized


UnrealizedCost


Gain


Loss


Fair ValueAsset-backed commercial paper

$
42,498


$



$
(5
)

$
42,493Commercial paper


8,238











8,238Certificate of deposit


15,669











15,669$
66,405


$



$
(5
)

$
66,400   As of December 31, 2005Unrealized


UnrealizedCost


Gain


Loss


Fair ValueCommercial paper

$
49,884


$



$
(2
)

$
49,882U.S. government or government agency securities


40,857



3



(11
)


40,849Certificate of deposit


250











250$
90,991


$
3


$
(13
)

$
90,981   Note 5.
    Supplementary
    Financial Information  Supplementary
    Balance Sheet Information (in thousands):
  As of December 31,2006


2005(As Restated)


(As Restated)Other current assets:Accounts receivable, net(1)

$
38,257


$
18,832Prepaid expenses


11,808



9,884Other


2,916



2$
52,981


$
28,718Property and equipment, net:Network equipment

$
1,128,127


$
650,998Computer equipment and other


100,496



42,774Construction-in-progress


238,579



135,1891,467,202



828,961Accumulated depreciation


(388,681
)


(206,754
)$
1,078,521


$
622,207 91




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  As of December 31,2006


2005(As Restated)


(As Restated)Other intangible assets, net:Customer relationships

$
124,715


$
124,715Trademarks


37,000



37,000161,715



161,715Accumulated amortization customer relationships(2)


(75,500
)


(44,417
)Accumulated amortization trademarks(2)


(6,387
)


(3,744
)$
79,828


$
113,554Accounts payable and accrued liabilities:Trade accounts payable

$
218,020


$
117,140Accrued payroll and related benefits


29,450



13,185Other accrued liabilities


69,623



38,106$
317,093


$
168,431Other current liabilities:Deferred service revenue(3)

$
32,929


$
15,844Deferred equipment revenue(4)


16,589



7,423Accrued sales, telecommunications, property and other taxes
    payable


15,865



12,895Accrued interest


13,671



Other


5,621



7,781$
84,675


$
43,943     (1)
    
    Accounts receivable consists primarily of amounts billed to
    third-party dealers for handsets and accessories.(2)
    
    Amortization expense for other intangible assets for the years
    ended December 31, 2006, 2005 and 2004 was
    $33.7 million, $34.5 million and $14.5 million,
    respectively. Estimated amortization expense for intangible
    assets for 2007 through 2011 is $33.7 million,
    $20.8 million, $2.7 million, $2.7 million and
    $2.7 million, respectively, and thereafter totals
    $17.2 million.(3)
    
    Deferred service revenue consists primarily of cash received
    from customers in advance of their service period.(4)
    
    Deferred equipment revenue relates to handsets and accessories
    sold to third-party dealers. 92




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Supplementary
    Cash Flow Information (in thousands):
  PredecessorSuccessor Company


CompanyYear


Year


Five Months


Seven MonthsEnded


Ended


Ended


EndedDecember 31,


December 31,


December 31,


July 31,2006


2005


2004


2004Supplementary disclosure of cash flow information:Cash paid for interest

$
61,360


$
55,653


$
8,227


$
Cash paid for income taxes


1,034



305



240



76Cash provided by (paid for) reorganization activities:Payments to Leap Creditor Trust














(990
)Payments for professional fees














(7,975
)Cure payments, net














1,984Interest income














1,485Supplementary disclosure of non-cash investing activities:Contribution of wireless licenses

$
16,100


$



$



$
   Note 6.
    Basic and
    Diluted Earnings (Loss) Per Share    PredecessorSuccessor Company


CompanyYear


Year


Five Months


Seven MonthsEnded


Ended


Ended


EndedDecember 31,


December 31,


December 31,


July 31,2006


2005


2004


2004Basic weighted-average shares outstanding


61,645



60,135



60,000



58,623Effect of dilutive common share equivalents:Non-qualified stock options






130







Restricted stock awards






472







Warrants






266







Diluted weighted-average shares outstanding


61,645



61,003



60,000



58,623    93




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 7.
    Long-Term
    Debt    As of December 31,2006


2005Term loans under senior secured credit facilities

$
935,500


$
594,444Senior notes


750,000



1,685,500



594,444Current maturities of long-term debt


(9,000
)


(6,111
)$
1,676,500


$
588,333   Senior
    Secured Credit Facilities
  Cricket
    Communications
        Form 10-Q
 94




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Form 10-Q Form 10-K Form 10-K/A Form 10-Q/A
    LCW
    Operations
   95




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Senior
    Notes
     96




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 8.
    Income
    Taxes    PredecessorSuccessor Company


CompanyFive Months


Seven MonthsYear Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


July 31,2006


2005


2004


2004(As Restated)


(As Restated)Current provision:Federal

$
422


$



$



$
State


21



63



107



13443



63



107



13Deferred provision:Federal


7,389



17,958



3,186



3,725State


1,445



3,594



637



4288,834



21,552



3,823



4,153$
9,277


$
21,615


$
3,930


$
4,166  97




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    PredecessorSuccessor Company


CompanyFive Months


Seven MonthsYear Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


July 31,2006


2005


2004


2004(As Restated)


(As Restated)


(As Restated)


(As Restated)Amounts computed at statutory federal rate

$
(5,335
)

$
18,305


$
(324
)

$
322,806Non-deductible expenses


421



929



2,096



175State income tax, net of federal benefit


(425
)


2,335



321



287Net tax expense related to wireless licenses and tax-deductible
    goodwill










3,224



Net tax expense related to joint venture


1,751











Gain on reorganization and adoption of fresh-start reporting














(337,422
)Other






46







Change in valuation allowance


12,865







(1,387
)


18,320$
9,277


$
21,615


$
3,930


$
4,166  98




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of December 31,2006


2005(As Restated)


(As Restated)Deferred tax assets:Net operating loss carryforwards

$
171,104


$
175,237Wireless licenses


41,854



59,639Capital loss carryforwards


29,592



14,141Reserves and allowances


12,446



10,027Share-based compensation


9,006



2,202Deferred rent and deferred loan costs


6,419



Property and equipment






3,501Other


3,834



3,750Gross deferred tax assets


274,255



268,497Deferred tax liabilities:Intangible assets


(31,168
)


(45,171
)Property and equipment


(7,689
)


Deferred revenues


(2,311
)


(4,667
)Deferred tax on unrealized gains


(1,243
)


(1,382
)Other


(390
)


Net deferred tax assets


231,454



217,277Valuation allowance


(231,454
)


(217,277
)Other deferred tax liabilities:Wireless licenses


(139,278
)


(136,364
)Goodwill


(6,169
)


(3,616
)Investment in joint venture


(3,367
)


Net deferred tax liabilities

$
(148,814
)

$
(139,980
)     As of December 31,2006


2005(As Restated)(As Restated)Current deferred tax liabilities (included in other current
    liabilities)

$
(479
)

$
(2,638
)Long-term deferred tax liabilities


(148,335
)


(137,342
)$
(148,814
)

$
(139,980
)    99




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SOP 90-7,
  Note 9.
    Stockholders
    Equity  Forward
    Sale Agreements
    Warrants
    Note 10.
    Share-Based
    Compensation   100




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Options
    As of December 31,2006


2005Expected volatility


46
%


86
%Expected term (in years)


6.3



5.8Risk-free interest rate


4.72
%


3.68
%Expected dividend yield






    101




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-


Weighted-Average


AverageExercise


RemainingNumber of


Price per


Contractual


AggregateShares


Share


Term


Intrinsic Value(In years)Options outstanding at December 31, 2004





$
Options granted


2,251



28.68Options forfeited


(359
)


27.31Options exercised






Options outstanding at December 31, 2005


1,892


$
28.94Options exercisable at December 31, 2005


35


$
26.50Options granted


1,277


$
50.04Options forfeited


(99
)


34.21Options exercised






Options outstanding at December 31, 2006


3,070


$
37.55



8.87


$
67,702Options exercisable at December 31, 2006


76


$
26.50



8.19


$
2,517         Restricted
    Stock
   102




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-AverageGrant DateNumber of


Fair ValueShares


Per ShareRestricted stock awards outstanding at December 31, 2004





$
Shares issued


969



28.52Shares forfeited


(46
)


28.45Shares vested


(28
)


27.35Restricted stock awards outstanding at December 31, 2005


895


$
28.56Shares issued


286



51.86Shares forfeited


(35
)


30.40Shares vested


(28
)


27.35Restricted stock awards outstanding at December 31, 2006


1,118


$
34.50     Year Ended December 31,2006

2005

2004Fair value on vesting date of vested restricted stock awards

$
1,519


$
993


$
       Employee
    Stock Purchase Plan
    Deferred
    Stock Units
   103




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Allocation
    of Share-Based Compensation Expense
    Year Ended December 31,2006


2005(As Restated)(As Restated)Cost of service

$
1,245


$
1,204Selling and marketing expenses


1,970



1,021General and administrative expenses


16,510



10,254Share-based compensation expense before tax


19,725



12,479Related income tax benefit






Share-based compensation expense, net of tax

$
19,725


$
12,479Net share-based compensation expense per share:Basic

$
0.32


$
0.21Diluted

$
0.32


$
0.20   Effect
    of SFAS 123(R) Adoption
   104




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Pro
    Forma Information under SFAS 123 for Periods Prior to
    Fiscal 2006
    PredecessorSuccessor Company


CompanyFive Months


Seven MonthsYear Ended


Ended


EndedDecember 31,


December 31,


July 31,2005


2004


2004(As Restated)


(As Restated)


(As Restated)As reported net income (loss)

$
30,685


$
(6,100
)

$
919,378Add: Share-based compensation expense (benefit) included in net
    income (loss)


12,479







(837
)Deduct: Net pro forma compensation (expense) benefit


(20,085
)






6,209Pro forma net income (loss)

$
23,079


$
(6,100
)

$
924,750Basic net income (loss) per share:As reported

$
0.51


$
(0.10
)

$
15.68Pro forma

$
0.38


$
(0.10
)

$
15.77Diluted net income (loss) per share:As reported

$
0.50


$
(0.10
)

$
15.68Pro forma

$
0.38


$
(0.10
)

$
15.77       Note 11.
    Employee
    Savings and Retirement Plan    Note 12.
    Significant
    Acquisitions and Dispositions   105




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 13.
    Segment
    and Geographic Data    Note 14.
    Commitments
    and Contingencies  Outstanding
    Bankruptcy Claims
    Patent
    Litigation
  Method for
    Providing Wireless Communication Services and Network and System
    for Delivering Same,
 106




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Operations Method
    for Providing Wireless Communication Services and Network and
    System for Delivering Same
    Tortious
    Interference and Unfair Competition Litigation
  T-Mobile (T-Mobile) T-Mobile T-Mobile T-Mobiles
  American
    Wireless Group
   107




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  and/or
    Other
    Purchase
    Obligations
    Operating
    Leases
   108




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December
    31:2007

$
88,2752008


86,5692009


85,3482010


85,0032011


80,545Thereafter


371,809Total

$
797,549  109




---



##### Table of Contents



Item 9A.
    Controls
    and Procedures  (a)
    Evaluation
    of Disclosure Controls and Procedures (Restated)    Form 10-K/A, Rule 13a-15(b), Form 10-K/A, Rule 13a-15(e)
    (b)
    Managements
    Report on Internal Control over Financial Reporting
    (Restated)  Rule 13a-15(f).
    Internal Control 
    Integrated Framework
 110




---



##### Table of Contents



(c)
    Managements
    Remediation Initiatives    
    We performed a detailed review of our billing and revenue
    systems, and processes for recording revenue. We are
    implementing stronger account reconciliations and analyses
    surrounding our revenue recording processes which are designed
    to detect any material errors in the completeness and accuracy
    of the underlying data.
    We intend to design and implement automated enhancements to our
    billing and revenue systems to reduce the need for manual
    processes and estimates and thereby streamline the processes for
    ensuring revenue is recorded only when payment is received and
    services are provided.
    We intend to further improve our user acceptance testing related
    to system changes by ensuring the user acceptance testing
    encompasses a complete population of scenarios of possible
    customer activity.   111




---



##### Table of Contents



(d)
    Changes
    in Internal Control over Financial Reporting      
    We did not have sufficient personnel with the appropriate
    skills, training and Company-specific experience to identify and
    address the application of generally accepted accounting
    principles in complex or non-routine transactions. We also
    experienced staff turnover and an associated loss of
    Company-specific experience within our accounting, financial
    reporting and tax functions.
    We did not maintain effective controls over our accounting for
    income taxes. Specifically, we did not have adequate controls
    designed and in place to ensure the completeness and accuracy of
    the deferred income tax provision and the related deferred tax
    assets and liabilities and the related goodwill in conformity
    with generally accepted accounting principles. This control
    deficiency resulted in the restatement of our consolidated
    financial statements for the five months ended December 31,
    2004, the two months ended September 30, 2004 and the
    quarters ended March 31, 2005, June 30, 2005 and
    September 30, 2005.    
    We have filled existing vacancies and we have created and filled
    a number of new management positions within our accounting,
    financial reporting and tax functions with qualified and
    experienced individuals. These include the following positions:  
    a new vice president, chief accounting officer hired in May 2005,
    a new director of tax to lead our tax function hired in June
    2006,
    a new executive vice president, chief financial officer hired in
    August 2006,
    a new assistant controller hired in December 2006,
    a new director of financial reporting hired in December
    2006, and
    a number of other new accounting management personnel hired
    since February 2005.    
    We improved our internal controls over accounting for income
    taxes by establishing detailed procedures for the preparation
    and review of the income tax provision, including review and
    oversight by our director of tax and our chief accounting
    officer.    PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedules  (a) Financial Statements and Financial Statement
    Schedules
 112




---



##### Table of Contents



Documents filed as part of this report:
  1.  Financial Statements:
                2.  Financial Statement Schedules:
    (b)
    Exhibits  EXHIBIT INDEX
  ExhibitNumber

Description2
.1(1)

Fifth Amended Joint Plan of Reorganization dated as of
    July 30, 2003, as modified to reflect all technical
    amendments subsequently approved by the Bankruptcy Court.2
.2(2)

Disclosure Statement Accompanying Fifth Amended Joint Plan of
    Reorganization dated as of July 30, 2003.2
.3(3)

Order Confirming Debtors Fifth Amended Joint Plan of
    Reorganization dated as of July 30, 2003.3
.1(4)

Amended and Restated Certificate of Incorporation of Leap
    Wireless International, Inc.3
.2(4)

Amended and Restated Bylaws of Leap Wireless International, Inc.4
.1(5)

Form of Common Stock Certificate.4
.2(4)

Registration Rights Agreement dated as of August 16, 2004,
    by and among Leap Wireless International Inc., MHR Institutional
    Partners II LP, MHR Institutional Partners IIA LP and
    Highland Capital Management, L.P.4
.2.1(6)

Amendment No. 1 to Registration Rights Agreement dated as
    of June 7, 2005 by and among Leap Wireless International,
    Inc., MHR Institutional Partners II LP, MHR Institutional
    Partners IIA LP and Highland Capital Management, L.P.4
.3(7)

Indenture, dated as of October 23, 2006, by and among
    Cricket Communications, Inc., the Initial Guarantors (as defined
    therein) and Wells Fargo Bank, N.A., as trustee.4
.3.1(7)

Form of 9.375% Senior Note of Cricket Communications, Inc.
    due 2014 (attached as Exhibit A to the Indenture filed as
    Exhibit 4.3.1 hereto).4
.4(7)

Registration Rights Agreement, dated as of October 23,
    2006, by and among Cricket Communications, Inc., the Guarantors
    (as defined therein), Citigroup Global Markets Inc. and Goldman,
    Sachs & Co., as representatives of the Initial
    Purchasers named therein.4
.5(8)

Confirmation of Forward Sale Transaction, dated August 15,
    2006, by and between Leap Wireless International, Inc. and
    Goldman Sachs Financial Markets, L.P. 113




---



##### Table of Contents



ExhibitNumber

Description4
.6(8)

Confirmation of Forward Sale Transaction, dated August 15,
    2006, by and between Leap Wireless International, Inc. and
    Citibank, N.A.10
.1(9)

Amended and Restated System Equipment Purchase Agreement,
    entered into as of June 30, 2000, by and between Cricket
    Communications, Inc. and Lucent Technologies Inc. (including
    exhibits thereto).10
.1.1(10)

Amendment No. 1 to the Amended and Restated System
    Equipment Purchase Agreement by and between Lucent Technologies
    Inc. and Cricket Communications, Inc., entered into as of
    March 22, 2002.10
.1.2(10)

Amendment No. 2 to the Amended and Restated System
    Equipment Purchase Agreement by and between Lucent Technologies
    Inc. and Cricket Communications, Inc., entered into as of
    March 22, 2002.10
.1.3(11)

Amendment No. 3 to Amended and Restated System Equipment
    Purchase Agreement by and between Cricket Communications, Inc.
    and Lucent Technologies Inc., effective March 22, 2002.10
.1.4(11)

Amendment No. 4 to Amended and Restated System Equipment
    Purchase Agreement by and between Cricket Communications, Inc.
    and Lucent Technologies Inc., effective March 22, 2002.10
.1.5(12)

Amendment No. 5 to the Amended and Restated System
    Equipment Purchase Agreement by and between Cricket
    Communications, Inc. and Lucent Technologies Inc., executed as
    of September 23, 2003.10
.1.6(13)

Amendment No. 6 to the Amended and Restated System
    Equipment Purchase Agreement by and between Cricket
    Communications, Inc. and Lucent Technologies Inc., effective as
    of February 4, 2004.10
.1.7(14)

Amendment No. 7 to the Amended and Restated System
    Equipment Purchase Agreement by and between Cricket
    Communications, Inc. and Lucent Technologies Inc., effective as
    of January 1, 2005.10
.1.8(15)

Amendment No. 8 to Amended and Restated System Equipment
    Purchase Agreement, effective as of October 1, 2005,
    between Cricket Communications, Inc. and Lucent Technologies Inc.10
.1.9(16)

Amendment No. 9 to Amended and Restated System Equipment
    Purchase Agreement, effective as of January 11, 2006,
    between Cricket Communications, Inc. and Lucent Technologies Inc.10
.2(17)

Amended and Restated System Equipment Purchase Agreement,
    effective as of December 23, 2002, by and between Cricket
    Communications, Inc. and Nortel Networks Inc. (including
    exhibits thereto).10
.2.1(17)

Amendment No. 1 to Amended and Restated System Equipment
    Purchase Agreement, effective as of February 7, 2003, by
    and between Cricket Communications, Inc. and Nortel Networks
    Inc. (including exhibits thereto).10
.2.2(14)

Amendment No. 2 to Amended and Restated System Equipment
    Purchase Agreement, effective as of December 22, 2004, by
    and between Cricket Communications, Inc. and Nortel Networks Inc.10
.2.3(15)

Amendment No. 3 to Amended and Restated System Equipment
    Purchase Agreement, effective as of October 11, 2005, by
    and between Cricket Communications, Inc. and Nortel Networks Inc.10
.2.4(16)

Amendment No. 4 to Amended and Restated System Equipment
    Purchase Agreement, effective as of December 22, 2005, by
    and between Cricket Communications, Inc. and Nortel Networks Inc.10
.2.5(18)

Amendment No. 5 to Amended and Restated System Equipment
    Purchase Agreement, effective as of May 22, 2006, by and
    between Cricket Communications, Inc. and Nortel Networks Inc. 114




---



##### Table of Contents



ExhibitNumber

Description10
.2.6(19)

Amendment No. 6 to Amended and Restated System Equipment
    Purchase Agreement, effective as of August 31, 2006, by and
    between Cricket Communications, Inc. and Nortel Networks Inc.10
.2.7(19)

Amendment No. 7 to Amended and Restated System Equipment
    Purchase Agreement, effective as of October 18, 2006, by
    and between Cricket Communications, Inc. and Nortel Networks Inc.10
.3(20)

Amended and Restated Credit Agreement, dated June 16, 2006,
    by and among Cricket Communications, Inc., Leap Wireless
    International, Inc., the Lenders party thereto and Bank of
    America, N.A., as administrative agent and L/C issuer.10
.3.1(20)

Amended and Restated Security Agreement, dated June 16,
    2006, made by Cricket Communications, Inc., Leap Wireless
    International, Inc., and the Subsidiary Guarantors to Bank of
    America, N.A., as collateral agent.10
.3.2(19)

Letter Amendment to the Amended and Restated Security Agreement
    dated as of June 16, 2006 by and among Cricket
    Communications, Inc., Leap Wireless International, Inc. and Bank
    of America, N.A., as administrative agent, dated
    October 16, 2006.10
.3.3(20)

Amended and Restated Parent Guaranty, dated June 16, 2006,
    made by Leap Wireless International, Inc. in favor of the
    secured parties under the Credit Agreement (the Secured
    Parties).10
.3.4(20)

Amended and Restated Subsidiary Guaranty, dated June 16,
    2006, made by the Subsidiary Guarantors in favor of the Secured
    Parties.10
.4(21)

Credit Agreement, dated as of December 22, 2004, among
    Cricket Communications, Inc., Alaska Native Broadband 1 License,
    LLC, and Alaska Native Broadband 1, LLC.10
.4.1(21)

Amendment, dated January 26, 2005, to the Credit Agreement,
    dated as of December 22, 2004, among Cricket
    Communications, Inc., Alaska Native Broadband 1 License, LLC,
    and Alaska Native Broadband 1, LLC.10
.4.2(6)

Amendment No. 2, dated June 24, 2005, to the Credit
    Agreement, dated as of December 22, 2004, among Cricket
    Communications, Inc., Alaska Native Broadband 1 License, LLC,
    and Alaska Native Broadband 1, LLC.10
.4.3(15)

Amendment No. 3, dated August 26, 2005, to the Credit
    Agreement, dated as of December 22, 2004, among Cricket
    Communications, Inc., Alaska Native Broadband 1 License, LLC,
    and Alaska Native Broadband 1, LLC.10
.4.4(22)

Amendment No. 4, dated January 9, 2006, to the Credit
    Agreement, dated as of December 22, 2004, among Cricket
    Communications, Inc., Alaska Native Broadband 1 License, LLC,
    and Alaska Native Broadband 1, LLC.10
.4.5(23)

Amendment No. 5, dated April 24, 2006, to the Credit
    Agreement, dated as of December 22, 2004, among Cricket
    Communications, Inc., Alaska Native Broadband 1 License, LLC,
    and Alaska Native Broadband 1, LLC.10
.5(24)

Credit Agreement, dated as of July 13, 2006, by and among
    Cricket Communications, Inc., Denali Spectrum License, LLC and
    Denali Spectrum, LLC.10
.5.1(19)

Amendment No. 1 to Credit Agreement by and among Cricket
    Communications, Inc., Denali Spectrum License, LLC and Denali
    Spectrum, LLC, dated as of September 28, 2006, between
    Cricket Communications, Inc., Denali Spectrum License, LLC and
    Denali Spectrum, LLC.10
.6(25)#

Form of Indemnity Agreement to be entered into by and between
    Leap Wireless International, Inc. and its directors and officers.10
.7(21)#

Amended and Restated Executive Employment Agreement among Leap
    Wireless International, Inc., Cricket Communications, Inc., and
    S. Douglas Hutcheson, dated as of January 10, 2005.10
.7.1(26)#

First Amendment to Amended and Restated Executive Employment
    Agreement among Leap Wireless International, Inc., Cricket
    Communications, Inc., and S. Douglas Hutcheson, effective as of
    June 17, 2005. 115




---



##### Table of Contents



ExhibitNumber

Description10
.7.2(16)#

Second Amendment to Amended and Restated Executive Employment
    Agreement among Leap Wireless International, Inc., Cricket
    Communications, Inc., and S. Douglas Hutcheson, effective as of
    February 17, 2006.10
.8(15)#

Form of Executive Vice President and Senior Vice President
    Severance Benefits Agreement.10
.8.1(27)#

Severance Benefits Agreement, effective as of January 16,
    2006, between Leap Wireless International, Inc., Cricket
    Communications, Inc. and Dean M. Luvisa.10
.9(21)#

Employment Offer Letter dated January 31, 2005, between
    Cricket Communications, Inc. and Albin F. Moschner.10
.10(28)#

Employment Offer Letter, dated March 24, 2005, between
    Cricket Communications, Inc., and Grant Burton.10
.10.1(16)#

Retention Agreement, dated December 5, 2005, between
    Cricket Communications, Inc., and Grant Burton.10
.11(29)#

Leap Wireless International, Inc. 2004 Stock Option, Restricted
    Stock and Deferred Stock Unit Plan.10
.11.1(26)#

Form of Stock Option Grant Notice and Non-Qualified Stock Option
    Agreement (February 2008 Vesting).10
.11.2(26)#

Form of Stock Option Grant Notice and Non-Qualified Stock Option
    Agreement (Five-Year Vesting) entered into prior to
    October 26, 2005.10
.11.3(16)#

Amendment No. 1 to Form of Stock Option Grant Notice and
    Non-Qualified Stock Option Agreement (Five-Year Vesting) entered
    into prior to October 26, 2005.10
.11.4(16)#

Form of Stock Option Grant Notice and Non-Qualified Stock Option
    Agreement (Five-Year Vesting) entered into on or after
    October 26, 2005.10
.11.5(16)#

Stock Option Grant Notice and Non-Qualified Stock Option
    Agreement, effective as of October 26, 2005, Between Leap
    Wireless International, Inc. and Albin F. Moschner.10
.11.6(33)#

Form of Stock Option Grant Notice and Non-Qualified Stock Option
    Agreement (Four-Year Time Based Vesting).10
.11.7(26)#

Form of Restricted Stock Award Grant Notice and Restricted Stock
    Award Agreement (February 2008 Vesting).10
.11.8(26)#

Form of Restricted Stock Award Grant Notice and Restricted Stock
    Award Agreement (Five-Year Vesting) entered into prior to
    October 26, 2005.10
.11.9(16)#

Amendment No. 1 to Form of Restricted Stock Award Grant
    Notice and Restricted Stock Award Agreement (Five-Year Vesting)
    entered into prior to October 26, 2005.10
.11.10(30)#

Restricted Stock Award Grant Notice and Restricted Stock Award
    Agreement, dated as of July 8 2005, between Leap Wireless
    International, Inc. and David B. Davis.10
.11.11(30)#

Restricted Stock Award Grant Notice and Restricted Stock Award
    Agreement, dated as of July 8 2005, between Leap Wireless
    International, Inc. and Robert J. Irving, Jr.10
.11.12(30)#

Restricted Stock Award Grant Notice and Restricted Stock Award
    Agreement, dated as of July 8 2005, between Leap Wireless
    International, Inc. and Leonard C. Stephens.10
.11.13(16)#

Restricted Stock Award Grant Notice and Restricted Stock Award
    Agreement, effective as of October 26 2005, between Leap
    Wireless International, Inc. and Albin F. Moschner.10
.11.14(16)#

Form of Restricted Stock Award Grant Notice and Restricted Stock
    Award Agreement (Five-Year Vesting) entered into on or after
    October 26, 2005.10
.11.15(33)#

Form of Restricted Stock Award Grant Notice and Restricted Stock
    Award Agreement (Four-Year Time Based Vesting).10
.11.16(29)#

Form of Deferred Stock Unit Award Grant Notice and Deferred
    Stock Unit Award Agreement.10
.11.17(21)#

Form of Non-Employee Director Stock Option Grant Notice and
    Non-Qualified Stock Option Agreement.  116




---



##### Table of Contents



ExhibitNumber

Description10.11.18(31)#

Form of Restricted Stock Award Grant Notice and Restricted Stock
    Award Agreement (for Non-Employee Directors).10.12(32)#

2006 Cricket Non-Sales Bonus Plan.21(33)

Subsidiaries of Leap Wireless International, Inc.23*

Consent of Independent Registered Public Accounting Firm.31*

Certification of the Chief Executive Officer and Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32**

Certification of the Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.     *
    
    Filed herewith.**
    
    This certification is being furnished solely to accompany this
    report pursuant to U.S.C. § 1350, and is not being filed
    for purposes of Section 18 of the Securities Exchange Act
    of 1934, as amended, and is not to be incorporated by reference
    into any filing of Leap Wireless International, Inc. whether
    made before or after the date hereof, regardless of any general
    incorporation language in such filing.
    
    Portions of this exhibit (indicated by asterisks) have been
    omitted pursuant to a request for confidential treatment
    pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934.#
    
    Management contract or compensatory plan or arrangement in which
    one or more executive officers or directors participates.(1)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K/A,
    dated July 30, 2003, filed with the SEC on May 7,
    2004, and incorporated herein by reference.(2)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated July 30, 2003, filed with the SEC on August 11,
    2003, and incorporated herein by reference.(3)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated October 22, 2003, filed with the SEC on
    November 6, 2003, and incorporated herein by reference.(4)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated August 16, 2004, filed with the SEC on
    August 20, 2004, and incorporated herein by reference.(5)
    
    Filed as an exhibit to Leaps Annual Report on
    Form 10-K,
    for the year ended 2004, filed with the SEC on May 16,
    2005, and incorporated herein by reference.(6)
    
    Filed as an exhibit to Leaps Registration Statement on
    Form S-1
    (File
    No. 333-126246),
    as filed with the SEC on June 30, 2005, and incorporated
    herein by reference.(7)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated October 18, 2006, filed with the SEC on
    October 24, 2006, and incorporated herein by reference.(8)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated August 15, 2006, filed with the SEC on
    October 30, 2006, and incorporated herein by reference.(9)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2000, as filed with the
    SEC on November 14, 2000, and incorporated herein by
    reference.(10)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended March 31, 2002, as filed with
    the SEC on May 14, 2002, and incorporated herein by
    reference.(11)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 30, 2002, as filed
    with the SEC on November 13, 2002, and incorporated herein
    by reference.(12)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 30, 2003, as filed
    with the SEC on November 21, 2003, and incorporated herein
    by reference.(13)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended March 31, 2004, as filed with
    the SEC on May 17, 2004, and incorporated herein by
    reference. 117




---



##### Table of Contents



(14)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated December 31, 2004, filed with the SEC on
    March 28, 2005, and incorporated herein by reference.(15)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2005, as filed with the
    SEC on November 14, 2005, and incorporated herein by
    reference.(16)
    
    Filed as an exhibit to Leaps Annual Report on
    Form 10-K
    for the year ended December 31, 2005, as filed with the SEC
    on March 27, 2006, and incorporated herein by reference.(17)
    
    Filed as an exhibit to Leaps Amendment No. 1 to
    Annual Report on
    Form 10-K/A
    for the year ended December 31, 2002, as filed with the SEC
    on April 16, 2003, and incorporated herein by reference.(18)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated May 22, 2006, as filed with the SEC on August 1,
    2006, and incorporated herein by reference.(19)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 30, 2006, as filed
    with the SEC on November 9, 2006, and incorporated herein
    by reference.(20)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated June 16, 2006, as filed with the SEC on June 19,
    2006, and incorporated herein by reference.(21)
    
    Filed as an exhibit to Leaps Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2004, as filed with
    the SEC on May 16, 2005, and incorporated herein by
    reference.(22)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated January 9, 2006, filed with the SEC on
    January 12, 2006, and incorporated herein by reference.(23)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated April 24, 2006, as filed with the SEC on
    April 27, 2006, and incorporated herein by reference.(24)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended June 30, 2006, as filed with
    the SEC on August 8, 2006, and incorporated herein by
    reference.(25)
    
    Filed as an exhibit to Leaps Registration Statement on
    Form 10, as amended (File
    No. 0-29752),
    as filed with the SEC on August 21, 1998 and incorporated
    herein by reference.(26)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated June 17, 2005, filed with the SEC on June 23,
    2005, and incorporated herein by reference.(27)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated as of January 16, 2006, filed with the SEC on
    January 19, 2006, and incorporated herein by reference.(28)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended March 31, 2005, as filed with
    the SEC on June 15, 2005, and incorporated herein by
    reference.(29)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated January 5, 2005, filed with the SEC on
    January 11, 2005, and incorporated herein by reference.(30)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated July 8, 2005, filed with the SEC on July 14,
    2005, and incorporated herein by reference.(31)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated May 18, 2006, as filed with the SEC on June 6,
    2006, and incorporated herein by reference.(32)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated July 25, 2006, as filed with the SEC on
    August 2, 2006, and incorporated herein by reference.(33)
    
    Filed as an exhibit to Leaps Annual Report on
    Form 10-K, dated March 1, 2007, as filed with the SEC
    on March 1, 2007, and incorporated herein by reference. 118




---



##### Table of Contents



SIGNATURES
       By:
    /s/  S.
    Douglas Hutcheson   Chief Executive Officer, President and
 Acting Chief Financial Officer
 119