##### Table of Contents





UNITED
    STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
    FORM 10-Q
     (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2009ORo

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)

33-0811062(I.R.S. Employer
    Identification No.)10307 Pacific Center Court, San Diego, CA(Address of principal executive
    offices)

92121(Zip
    Code)   (858) 882-6000
 (Registrants telephone
    number, including area code)
  Not Applicable
 (Former name, former address and
    former fiscal year, if changed since last report)
  þ o
  Regulation S-T o o
  Rule 12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o (Do not check if a smaller
    reporting company)
  Rule 12b-2 o þ
  þ o




---



##### 





LEAP
    WIRELESS INTERNATIONAL, INC.
  QUARTERLY
    REPORT ON
    FORM 10-Q
 For the Quarter Ended March 31, 2009
  TABLE OF CONTENTS
   
 PagePART I  FINANCIAL
    INFORMATIONItem 1.


Financial Statements

1Item 2.


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

33Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk

53Item 4.


Controls and Procedures

53Item 4T.


Controls and Procedures

54PART II  OTHER
    INFORMATIONItem 1.


Legal Proceedings

55Item 1A.


Risk Factors

58Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds

78Item 3.


Defaults Upon Senior Securities

78Item 4.


Submission of Matters to a Vote of Security
    Holders

78Item 5.


Other Information

78Item 6.


Exhibits

79EX-31.1EX-31.2EX-32




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 Item 1. Financial
    Statements.  LEAP
    WIRELESS INTERNATIONAL, INC.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
 (In thousands, except share amounts)
  March 31,


December 31,2009


2008(Unaudited)AssetsCash and cash equivalents

$
181,883


$
357,708Short-term investments


306,229



238,143Restricted cash, cash equivalents and short-term investments


4,559



4,780Inventories


103,917



126,293Other current assets


59,185



51,948Total current assets


655,773



778,872Property and equipment, net


1,956,566



1,842,718Wireless licenses


1,892,182



1,841,798Assets held for sale






45,569Goodwill


430,101



430,101Intangible assets, net


28,409



29,854Other assets


87,759



83,945Total assets

$
5,050,790


$
5,052,857Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
328,591


$
325,294Current maturities of long-term debt


14,000



13,000Other current liabilities


185,499



162,002Total current liabilities


528,090



500,296Long-term debt


2,561,046



2,566,025Deferred tax liabilities


224,060



217,631Other long-term liabilities


87,182



84,350Total liabilities


3,400,378



3,368,302Redeemable noncontrolling interests


74,815



71,879Commitments and contingencies (Note 9)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, 70,161,914 and 69,515,526 shares
    issued and outstanding at March 31, 2009 and
    December 31, 2008, respectively


7



7Additional paid-in capital


1,844,950



1,835,468Accumulated deficit


(264,237
)


(216,877
)Accumulated other comprehensive loss


(5,123
)


(5,922
)Total stockholders equity


1,575,597



1,612,676Total liabilities and stockholders equity

$
5,050,790


$
5,052,857    1




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited and in thousands, except per share data)
  Three Months EndedMarch 31,2009


2008Revenues:Service revenues

$
514,005


$
398,929Equipment revenues


72,982



69,455Total revenues


586,987



468,384Operating expenses:Cost of service (exclusive of items shown separately below)


144,344



111,170Cost of equipment


157,796



114,221Selling and marketing


103,523



58,100General and administrative


96,177



75,907Depreciation and amortization


89,733



82,639Total operating expenses


591,573



442,037Gain (loss) on sale or disposal of assets


3,581



(291
)Operating income (loss)


(1,005
)


26,056Equity in net income (loss) of investee


1,479



(1,062
)Interest income


945



4,781Interest expense


(41,851
)


(33,357
)Other expense, net


(63
)


(4,036
)Loss before income taxes


(40,495
)


(7,618
)Income tax expense


(6,865
)


(9,278
)Net loss


(47,360
)


(16,896
)Accretion of redeemable noncontrolling interests


(2,936
)


(1,923
)Net loss attributable to common stockholders

$
(50,296
)

$
(18,819
)Loss per share attributable to common stockholders:Basic

$
(0.74
)

$
(0.28
)Diluted

$
(0.74
)

$
(0.28
)Shares used in per share calculations:Basic


68,189



67,529Diluted


68,189



67,529    2




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited and in thousands)
  Three Months EndedMarch 31,2009


2008Operating activities:Net cash provided by operating activities

$
99,952


$
135,680Investing activities:Purchases of property and equipment


(201,785
)


(157,237
)Change in prepayments for purchases of property and equipment


(1,494
)


(2,601
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs


(2,545
)


(70,877
)Proceeds from sale of wireless licenses and operating assets


2,965



Purchases of investments


(234,563
)


(19,744
)Sales and maturities of investments


165,914



124,341Purchase of membership units of equity method investment






(1,033
)Change in restricted cash


(1,134
)


(251
)Net cash used in investing activities


(272,642
)


(127,402
)Financing activities:Repayment of long-term debt


(3,654
)


(2,250
)Proceeds from issuance of common stock, net


853



2,977Other


(334
)


(5,158
)Net cash used in financing activities


(3,135
)


(4,431
)Net increase (decrease) in cash and cash equivalents


(175,825
)


3,847Cash and cash equivalents at beginning of period


357,708



433,337Cash and cash equivalents at end of period

$
181,883


$
437,184Supplementary disclosure of cash flow information:Cash paid for interest

$
41,187


$
19,767Cash paid for income taxes

$
3


$
52    3




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
  Note 1.
    The
    Company  ®
  Note 2.
    Basis of
    Presentation and Significant Accounting Policies  Basis
    of Presentation
  Form 10-Q Form 10-K
    No. D-98, D-98).
 4




---



##### Table of Contents



Segment
    and Geographic Data
  tm
  Revenues
    No. 00-21, (EITF 00-21), EITF 00-21, EITF 00-21
      and/or
 5




---



##### Table of Contents



E-911
  Fair
    Value of Financial Instruments
      Property
    and Equipment
      DepreciableLifeNetwork equipment:Switches


10Switch power equipment


15Cell site equipment and site improvements


7Towers


15Antennae


5Computer hardware and software


3-5Furniture, fixtures, retail and office equipment


3-7   construction-in-progress
 6




---



##### Table of Contents



construction-in-progress construction-in-progress
  No. 98-1, (SOP 98-1),
  Wireless
    Licenses
    and/or
 7




---



##### Table of Contents



Derivative
    Instruments and Hedging Activities
          Investments
    in Other Entities
     8




---



##### Table of Contents



Concentrations
      Share-Based
    Compensation
      Three MonthsEnded March 31,2009


2008Cost of service

$
844


$
903Selling and marketing expenses


1,583



1,356General and administrative expenses


9,228



7,443Share-based compensation expense

$
11,655


$
9,702Share-based compensation expense per share:Basic

$
0.17


$
0.14Diluted

$
0.17


$
0.14   Income
    Taxes
     9




---



##### Table of Contents



Comprehensive
    Loss
    Three MonthsEnded March 31,2009


2008Net loss

$
(47,360
)

$
(16,896
)Other comprehensive loss:Net unrealized holding gains on investments, net of tax


4



91Unrealized losses on interest rate swaps






(6,892
)Comprehensive loss

$
(47,356
)

$
(23,697
)     March 31,


December 31,2009


2008Net unrealized holding gains on investments, net of tax

$
201


$
197Unrealized losses on interest rate swaps, net of tax and swaplet
    amortization


(5,324
)


(6,119
)Accumulated other comprehensive loss

$
(5,123
)

$
(5,922
)  10




---



##### Table of Contents



Recent
    Accounting Pronouncements
  No. SFAS 157-4, SFAS 157-4), No. SFAS 115-2 SFAS 124-2, SFAS 115-2 SFAS 124-2) No. SFAS 107-1 28-1, SFAS 107-1 28-1). SFAS 157-4 SFAS 157-4 SFAS 115-2 SFAS 124-2 SFAS 107-1 28-1
  Note 3.
    Supplementary
    Balance Sheet Information (in thousands):  March 31,


December 31,2009


2008Other current assets:Accounts receivable, net(1)

$
27,372


$
31,177Prepaid expenses


30,206



19,367Other


1,607



1,404$
59,185


$
51,948Property and equipment, net(2):Network equipment

$
2,272,074


$
1,911,173Computer hardware and software


213,555



203,720Construction-in-progress


366,803



574,773Other


76,761



60,9722,929,193



2,750,638Accumulated depreciation


(972,627
)


(907,920
)$
1,956,566


$
1,842,718Intangible assets, net:Customer relationships

$
7,347


$
7,347Trademarks


37,000



37,00044,347



44,347Accumulated amortization customer relationships


(3,604
)


(2,820
)Accumulated amortization trademarks


(12,334
)


(11,673
)$
28,409


$
29,854 11




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##### Table of Contents



March 31,


December 31,2009


2008Accounts payable and accrued liabilities:Trade accounts payable

$
183,510


$
201,843Accrued payroll and related benefits


63,029



50,462Other accrued liabilities


82,052



72,989$
328,591


$
325,294Other current liabilities:Deferred service revenue(3)

$
73,847


$
62,998Deferred equipment revenue(4)


24,531



20,614Accrued sales, telecommunications, property and other taxes
    payable


28,337



32,799Accrued interest


51,677



38,500Other


7,107



7,091$
185,499


$
162,002     (1)
    
    Accounts receivable consists primarily of amounts billed to
    third-party dealers for handsets and accessories net of an
    allowance for doubtful accounts.(2)
    
    As of March 31, 2009 and December 31, 2008,
    approximately $8.7 million of assets were held by the
    Company under capital lease arrangements. Accumulated
    amortization relating to these assets totaled $3.4 million
    and $3.2 million as of March 31, 2009 and
    December 31, 2008, respectively.(3)
    
    Deferred service revenue consists primarily of cash received
    from customers in advance of their service period.(4)
    
    Deferred equipment revenue relates to handsets sold to
    third-party dealers.  Note 4.
    Basic and
    Diluted Earnings (Loss) Per Share      Note 5.
    Fair
    Value of Financial Instruments    Level 1
    Quoted prices in active markets for identical assets or
    liabilities. The Company did not have any Level 1 assets or
    liabilities as of March 31, 2009 or December 31, 2008. 12




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##### Table of Contents



Level 2
    Observable inputs other than Level 1 prices, such as quoted
    prices for similar assets or liabilities, quoted prices in
    markets that are not active or other inputs that are observable
    or can be corroborated by observable market data for
    substantially the full term of the assets or liabilities. The
    Companys Level 2 assets and liabilities as of
    March 31, 2009 and December 31, 2008 included its cash
    equivalents, its short-term investments in obligations of the
    U.S. government, a majority of its short-term investments
    in commercial paper and its interest rate swaps.Level 3
    Unobservable inputs that are supported by little or no market
    activity and that are significant to the fair value of the
    assets or liabilities. Such assets and liabilities may have
    values determined using pricing models, discounted cash flow
    methodologies, or similar techniques, and include instruments
    for which the determination of fair value requires significant
    management judgment or estimation. The Companys
    Level 3 asset as of March 31, 2009 and
    December 31, 2008 comprised its short-term investment in
    asset-backed commercial paper.    At Fair Value as of March 31, 2009Level 1


Level 2


Level 3


TotalAssets:Cash equivalents

$



$
49,931


$



$
49,931Short-term investments






304,729



1,500



306,229Total

$



$
354,660


$
1,500


$
356,160Liabilities:Interest rate swaps

$



$
(8,077
)

$



$
(8,077
)Total

$



$
(8,077
)

$



$
(8,077
)   At Fair Value as of December 31, 2008Level 1


Level 2


Level 3


TotalAssets:Cash equivalents

$



$
175,280


$



$
175,280Short-term investments






236,893



1,250



238,143Total

$



$
412,173


$
1,250


$
413,423Liabilities:Interest rate swaps

$



$
(11,045
)

$



$
(11,045
)Total

$



$
(11,045
)

$



$
(11,045
)  13




---



##### Table of Contents



Three MonthsEnded March 31,2009


2008Beginning balance, January 1

$
1,250


$
16,200Total losses (realized/unrealized):Included in net loss

$



$
(4,325
)Included in comprehensive income


250



Settlements






Transfers in (out) of Level 3






Ending balance, March 31

$
1,500


$
11,875     Cash
    Equivalents and Short-Term Investments
    Interest
    Rate Swaps
    Long-Term
    Debt
   14




---



##### Table of Contents



Note 6.
    Long-Term
    Debt    March 31,


December 31,2009


2008Term loans under senior secured credit facilities

$
912,346


$
916,000Unamortized deferred lender fees


(4,260
)


(4,527
)Senior notes


1,400,000



1,400,000Unamortized premium on $350 million senior notes due 2014


16,960



17,552Convertible senior notes


250,000



250,0002,575,046



2,579,025Current maturities of long-term debt


(14,000
)


(13,000
)$
2,561,046


$
2,566,025   Senior
    Secured Credit Facilities
  Cricket
    Communications
         15




---



##### Table of Contents



LCW
    Operations
    Senior
    Notes
  Senior
    Notes Due 2014
     16




---



##### Table of Contents



Convertible
    Senior Notes Due 2014
       17




---



##### Table of Contents



90-day
  Senior
    Notes Due 2015
     18




---



##### Table of Contents



90-day 90-day
  Note 7.
    Significant
    Acquisitions and Dispositions    Note 8.
    Arrangements
    with Variable Interest Entities     19




---



##### Table of Contents



Arrangements
    with LCW Wireless
    Limited
    Liability Company Agreement
  30-day
    Management
    Agreement
  mark-up
  Other
   20




---



##### Table of Contents



Arrangements
    with Denali
    Limited
    Liability Company Agreement
    Senior
    Secured Credit Agreement
    Management
    Agreement.
      Three MonthsEnded March 31,2009


2008Beginning balance, January 1

$
71,879


$
61,868Accretion of redeemable noncontrolling interests


2,936



1,923Ending balance, March 31

$
74,815


$
63,791   Note 9.
    Commitments
    and Contingencies     21




---



##### Table of Contents



and/or
  Patent
    Litigation
  Freedom
    Wireless
  ® tm
  Electronic
    Data Systems
    EMSAT
    Advanced Geo-Location Technology
  and/or and/or
 22




---



##### Table of Contents



DNT
  and/or
  American
    Wireless Group
  and/or
  and/or
    Securities
    and Derivative Litigation
   23




---



##### Table of Contents



and/or
  Rule 10b-5, class-wide
  and/or
  Department
    of Justice Inquiry
    Other
    Litigation
    Indemnification
    Agreements
   24




---



##### Table of Contents



Spectrum
    Clearing Obligations
  and/or
  System
    Equipment Purchase Agreements
  and/or
  Tower
    Provider Commitments
    Outstanding
    Letters of Credit and Surety Bonds
     25




---



##### Table of Contents



Note 10.
    Guarantor
    Financial Information       26




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of March 31, 2009 (unaudited
    and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
79


$
153,157


$



$
28,647


$



$
181,883Short-term investments






304,729







1,500







306,229Restricted cash, cash equivalents and short-term investments


1,612



2,937







10







4,559Inventories






99,424







4,493







103,917Other current assets


33



56,588







3,342



(778
)


59,185Total current assets


1,724



616,835







37,992



(778
)


655,773Property and equipment, net


2



1,679,956







287,359



(10,751
)


1,956,566Investments in and advances to affiliates and consolidated
    subsidiaries


1,829,253



2,130,948



40,865



9,426



(4,010,492
)


Wireless licenses






19,956



1,539,095



333,131







1,892,182Goodwill






430,101















430,101Other intangible assets, net






28,409















28,409Other assets


7,765



77,398







2,596







87,759Total assets

$
1,838,744


$
4,983,603


$
1,579,960


$
670,504


$
(4,022,021
)

$
5,050,790Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
2


$
305,435


$



$
23,154


$



$
328,591Current maturities of long-term debt






9,000







5,000







14,000Intercompany payables


10,717



297,910



7,684



13,508



(329,819
)


Other current liabilities


2,428



175,731







8,118



(778
)


185,499Total current liabilities


13,147



788,076



7,684



49,780



(330,597
)


528,090Long-term debt


250,000



2,278,950







599,763



(567,667
)


2,561,046Deferred tax liabilities






224,060















224,060Other long-term liabilities






80,392







6,790







87,182Total liabilities


263,147



3,371,478



7,684



656,333



(898,264
)


3,400,378Redeemable noncontrolling interests






30,491







44,324







74,815Stockholders equity (deficit)


1,575,597



1,581,634



1,572,276



(30,153
)


(3,123,757
)


1,575,597Total liabilities and stockholders equity

$
1,838,744


$
4,983,603


$
1,579,960


$
670,504


$
(4,022,021
)

$
5,050,790  27




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of December 31, 2008 (in
    thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
27


$
333,119


$



$
24,562


$



$
357,708Short-term investments






236,893







1,250







238,143Restricted cash, cash equivalents and short-term investments


1,611



3,129







40







4,780Inventories






124,719







1,574







126,293Other current assets


83



50,915







2,062



(1,112
)


51,948Total current assets


1,721



748,775







29,488



(1,112
)


778,872Property and equipment, net


2



1,594,502







256,370



(8,156
)


1,842,718Investments in and advances to affiliates and consolidated
    subsidiaries


1,866,196



2,065,102



19,133



9,227



(3,959,658
)


Wireless licenses






19,957



1,489,564



332,277







1,841,798Assets held for sale










45,569











45,569Goodwill






430,101















430,101Intangible assets, net






29,854















29,854Other assets


8,043



72,434







3,468







83,945Total assets

$
1,875,962


$
4,960,725


$
1,554,266


$
630,830


$
(3,968,926
)

$
5,052,857Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
20


$
297,461


$



$
27,813


$



$
325,294Current maturities of long-term debt






9,000







4,000







13,000Intercompany payables


9,615



277,327



7,440



23,687



(318,069
)


Other current liabilities


3,651



153,081







6,382



(1,112
)


162,002Total current liabilities


13,286



736,869



7,440



61,882



(319,181
)


500,296Long-term debt


250,000



2,281,525







524,007



(489,507
)


2,566,025Deferred tax liabilities






217,631















217,631Other long-term liabilities






78,861







5,489







84,350Total liabilities


263,286



3,314,886



7,440



591,378



(808,688
)


3,368,302Redeemable noncontrolling interests






28,610







43,269







71,879Stockholders equity (deficit)


1,612,676



1,617,229



1,546,826



(3,817
)


(3,160,238
)


1,612,676Total liabilities and stockholders equity

$
1,875,962


$
4,960,725


$
1,554,266


$
630,830


$
(3,968,926
)

$
5,052,857  28




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    March 31, 2009 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
497,505


$



$
16,500


$



$
514,005Equipment revenues






69,120







3,862







72,982Other revenues






340



21,854



333



(22,527
)


Total revenues






566,965



21,854



20,695



(22,527
)


586,987Operating expenses:Cost of service (exclusive of items shown separately below)






165,958







476



(22,090
)


144,344Cost of equipment






145,010







12,786







157,796Selling and marketing






99,198







4,325







103,523General and administrative


1,101



87,386



243



7,884



(437
)


96,177Depreciation and amortization






82,416







7,317







89,733Total operating expenses


1,101



579,968



243



32,788



(22,527
)


591,573Gain on sale or disposal of assets






3,581















3,581Operating income (loss)


(1,101
)


(9,422
)


21,611



(12,093
)






(1,005
)Equity in net loss of consolidated subsidiaries


(49,235
)


(5,522
)










54,757



Equity in net income of investee






1,479















1,479Interest income


6,064



19,056







1,326



(25,501
)


945Interest expense


(3,088
)


(47,898
)






(14,467
)


23,602



(41,851
)Other expense, net






(63
)














(63
)Income (loss) before income taxes


(47,360
)


(42,370
)


21,611



(25,234
)


52,858



(40,495
)Income tax expense






(6,865
)














(6,865
)Net income (loss)


(47,360
)


(49,235
)


21,611



(25,234
)


52,858



(47,360
)Accretion of redeemable noncontrolling interests






(1,881
)






(1,055
)






(2,936
)Net income (loss) attributable to common stockholders

$
(47,360
)

$
(51,116
)

$
21,611


$
(26,289
)

$
52,858


$
(50,296
)  29




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##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    March 31, 2008 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
386,898


$



$
12,031


$



$
398,929Equipment revenues






68,350







1,105







69,455Other revenues










17,171







(17,171
)


Total revenues






455,248



17,171



13,136



(17,171
)


468,384Operating expenses:Cost of service (exclusive of items shown separately below)






122,959







5,284



(17,073
)


111,170Cost of equipment






111,411







2,810







114,221Selling and marketing






55,414







2,686







58,100General and administrative


1,399



71,186



247



3,173



(98
)


75,907Depreciation and amortization


11



80,483







2,145







82,639Total operating expenses


1,410



441,453



247



16,098



(17,171
)


442,037Loss on sale or disposal of assets






(291
)














(291
)Operating income (loss)


(1,410
)


13,504



16,924



(2,962
)






26,056Equity in net loss of consolidated subsidiaries


(15,568
)


(881
)










16,449



Equity in net loss of investee






(1,062
)














(1,062
)Interest income


7



14,243







1,098



(10,567
)


4,781Interest expense






(34,449
)






(8,150
)


9,242



(33,357
)Other income (expense), net


75



(4,111
)














(4,036
)Income (loss) before income taxes


(16,896
)


(12,756
)


16,924



(10,014
)


15,124



(7,618
)Income tax expense






(2,812
)


(6,466
)










(9,278
)Net income (loss)


(16,896
)


(15,568
)


10,458



(10,014
)


15,124



(16,896
)Accretion of redeemable noncontrolling interests






(968
)






(955
)






(1,923
)Net income (loss) attributable to common stockholders

$
(16,896
)

$
(16,536
)

$
10,458


$
(10,969
)

$
15,124


$
(18,819
)  30




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##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Three Months Ended
    March 31, 2009 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedOperating activities:Net cash provided by (used in) operating activities

$
53


$
120,806


$
1,775


$
(22,651
)

$
(31
)

$
99,952Investing activities:Purchases of and changes in prepayments for property and
    equipment






(172,190
)






(31,089
)






(203,279
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs










(1,775
)


(770
)






(2,545
)Proceeds from the sale of wireless licenses






2,965















2,965Purchases of investments






(234,563
)














(234,563
)Sales and maturities of investments






165,914















165,914Investments in and advances to affiliates and consolidated
    subsidiaries


(853
)














853



Purchase of membership units






















Change in restricted cash


(1
)


(1,163
)






30







(1,134
)Net cash used in investing activities


(854
)


(239,037
)


(1,775
)


(31,829
)


853



(272,642
)Financing activities:Proceeds from long-term debt














60,000



(60,000
)


Issuance of related party debt






(60,000
)










60,000



Repayment of long-term debt






(2,250
)






(1,404
)






(3,654
)Capital contributions, net


853



853











(853
)


853Noncontrolling interests distribution














(31
)


31



Other






(334
)














(334
)Net cash provided by (used in) financing activities


853



(61,731
)






58,565



(822
)


(3,135
)Net increase (decrease) in cash and cash equivalents


52



(179,962
)






4,085







(175,825
)Cash and cash equivalents at beginning of period


27



333,119







24,562







357,708Cash and cash equivalents at end of period

$
79


$
153,157


$



$
28,647


$



$
181,883  31




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##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Three Months Ended
    March 31, 2008 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedOperating activities:Net cash provided by operating activities

$
513


$
111,533


$
805


$
22,829


$



$
135,680Investing activities:Purchases of and changes in prepayments for property and
    equipment






(120,681
)






(39,157
)






(159,838
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs






(70,022
)


(805
)


(50
)






(70,877
)Purchases of investments






(19,744
)














(19,744
)Sales and maturities of investments






124,341















124,341Investments in and advances to affiliates and consolidated
    subsidiaries


(2,977
)














2,977



Purchase of membership units






(1,033
)














(1,033
)Change in restricted cash


(575
)


324















(251
)Net cash used in investing activities


(3,552
)


(86,815
)


(805
)


(39,207
)


2,977



(127,402
)Financing activities:Repayment of long-term debt






(2,250
)














(2,250
)Capital contributions, net


2,977



2,977











(2,977
)


2,977Other






(5,158
)














(5,158
)Net cash provided by (used in) financing activities


2,977



(4,431
)










(2,977
)


(4,431
)Net increase (decrease) in cash and cash equivalents


(62
)


20,287







(16,378
)






3,847Cash and cash equivalents at beginning of period


62



399,153







34,122







433,337Cash and cash equivalents at end of period

$



$
419,440


$



$
17,744


$



$
437,184  32




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.    Form 10-K
  Cautionary
    Statement Regarding Forward-Looking Statements
    
    our ability to attract and retain customers in an extremely
    competitive marketplace;
    the duration and severity of the current recession in the United
    States and changes in economic conditions, including interest
    rates, consumer credit conditions, consumer debt levels,
    consumer confidence, unemployment rates, energy costs and other
    macro-economic factors that could adversely affect demand for
    the services we provide;
    the impact of competitors initiatives;
    our ability to successfully implement product offerings and
    execute effectively on our planned coverage expansion, launches
    of markets we acquired in the Federal Communications
    Commissions, or FCCs, auction for Advanced Wireless
    Services, or Auction #66, and other strategic activities;
    our ability to obtain roaming services from other carriers at
    cost-effective rates;
    our ability to maintain effective internal control over
    financial reporting;
    delays in our market expansion plans, including delays resulting
    from any difficulties in funding such expansion through our
    existing cash, cash generated from operations or additional
    capital, or delays by existing U.S. government and other
    private sector wireless operations in clearing the Advanced
    Wireless Services, or AWS, spectrum, some of which users 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, indentures 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 Part II 
    Item 1A. Risk Factors below.   33




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##### Table of Contents



Overview
  Company
    Overview
  ®
        tm
 34




---



##### Table of Contents



tm
         35




---



##### Table of Contents



36




---



##### Table of Contents



Results
    of Operations
  Operating
    Items
    Three Months Ended March 31,% of 2009





% of 2008


Change fromService





Service


Prior Year2009


Revenues


2008


Revenues


Dollars


PercentRevenues:Service revenues

$
514,005






$
398,929






$
115,076



28.8
%Equipment revenues


72,982







69,455







3,527



5.1
%Total revenues


586,987







468,384







118,603



25.3
%Operating expenses:Cost of service


144,344



28.1
%


111,170



27.9
%


33,174



29.8
%Cost of equipment


157,796



30.7
%


114,221



28.6
%


43,575



38.1
%Selling and marketing


103,523



20.1
%


58,100



14.6
%


45,423



78.2
%General and administrative


96,177



18.7
%


75,907



19.0
%


20,270



26.7
%Depreciation and amortization


89,733



17.5
%


82,639



20.7
%


7,094



8.6
%Total operating expenses


591,573



115.1
%


442,037



110.8
%


149,536



33.8
%Gain (loss) on sale or disposal of assets


3,581



0.7
%


(291
)


(0.1
)%


3,872



1,330.6
%Operating income (loss)

$
(1,005
)


(0.2
)%

$
26,056



6.5
%

$
(27,061
)


(103.9
)%     ChangeFor the Three Months Ended March 31(1):

2009

2008

Amount

PercentGross customer additions


889,911



550,520



339,391



61.6
%Net customer additions


492,753



230,062



262,691



114.2
%Weighted-average number of customers


4,058,819



2,956,477



1,102,342



37.3
%As of March 31:Total customers


4,337,426



3,093,581



1,243,845



40.2
%     (1)
    
    We recognize a gross customer addition for each Cricket
    Wireless, Cricket Broadband and Cricket PAYGo line of service
    activated by a customer.  Three
    Months Ended March 31, 2009 Compared to Three Months Ended
    March 31, 2008
  Service
    Revenues
   37




---



##### Table of Contents



Equipment
    Revenues
    Cost of
    Service
    Cost of
    Equipment
    Selling
    and Marketing Expenses
    General
    and Administrative Expenses
    Depreciation
    and Amortization
    Gain
    (Loss) on Sale or Disposal of Assets
   38




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##### Table of Contents



Non-Operating
    Items
    Three Months Ended March 31,2009


2008


ChangeEquity in net income (loss) of investee


1,479



(1,062
)


2,541Interest income


945



4,781



(3,836
)Interest expense


(41,851
)


(33,357
)


(8,494
)Other expense, net


(63
)


(4,036
)


3,973Income tax expense


(6,865
)


(9,278
)


2,413   Three
    Months Ended March 31, 2009 Compared to Three Months Ended
    March 31, 2008
  Equity in
    Net Income (Loss) of Investee
    Interest
    Income
    Interest
    Expense
    Other
    Expense, Net
    Income
    Tax Expense
   39




---



##### Table of Contents



Subscriber
    Recognition and Disconnect Policies
   40




---



##### Table of Contents



Pay-in-advance
    Performance
    Measures
  Regulation S-K
     41




---



##### Table of Contents



pay-in-advance
    Three Months EndedMarch 31,2009


2008ARPU

$
42.21


$
44.98CPGA

$
195


$
159CCU

$
20.03


$
21.73Churn


3.3
%


3.6
%   Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
 42




---



##### Table of Contents



Three Months EndedMarch 31,2009


2008Selling and marketing expense

$
103,523


$
58,100Less share-based compensation expense included in selling and
    marketing expense


(1,583
)


(1,356
)Plus cost of equipment


157,796



114,221Less equipment revenue


(72,982
)


(69,455
)Less net loss on equipment transactions unrelated to initial
    customer acquisition


(13,448
)


(14,020
)Total costs used in the calculation of CPGA

$
173,306


$
87,490Gross customer additions


889,911



550,520CPGA

$
195


$
159     Three Months EndedMarch 31,2009


2008Cost of service

$
144,344


$
111,170Plus general and administrative expense


96,177



75,907Less share-based compensation expense included in cost of
    service and general and administrative expense


(10,072
)


(8,346
)Plus net loss on equipment transactions unrelated to initial
    customer acquisition


13,448



14,020Total costs used in the calculation of CCU

$
243,897


$
192,751Weighted-average number of customers


4,058,819



2,956,477CCU

$
20.03


$
21.73   Liquidity
    and Capital Resources
  Overview
     43




---



##### Table of Contents



44




---



##### Table of Contents



and/or
         45




---



##### Table of Contents



Cash
    Flows
  Operating
    Activities
    Investing
    Activities
    
    During the three months ended March 31, 2009, we and our
    consolidated joint ventures purchased $201.8 million of
    property and equipment for the build-out of our new markets and
    the expansion and improvement of our existing markets.
    During the three months ended March 31, 2009, we made
    investment purchases of $234.6 million, offset by sales or
    maturities of investments of $165.9 million.  Financing
    Activities
    
    During the three months ended March 31, 2009, we made
    payments of $2.3 million on our $895.5 million senior
    secured term loan and LCW Operations made a payment of
    $1.4 million on its $40 million senior secured term
    loans.  Senior
    Secured Credit Facilities
  Cricket
    Communications
     46




---



##### Table of Contents



LCW
    Operations
   47




---



##### Table of Contents



Senior
    Notes
  Senior
    Notes Due 2014
           48




---



##### Table of Contents



Convertible
    Senior Notes Due 2014
        90-day
 49




---



##### Table of Contents



Senior
    Notes Due 2015
           50




---



##### Table of Contents



90-day 90-day
  Fair
    Value of Financial Instruments
         51




---



##### Table of Contents



System
    Equipment Purchase Agreements
  and/or
  Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  Capital
    Expenditures and Build-Out Plans
        Other
    Acquisitions and Dispositions
    Off-Balance
    Sheet Arrangements
   52




---



##### Table of Contents



Recent
    Accounting Pronouncements
  No. SFAS 157-4, SFAS 157-4, No. SFAS 115-2 SFAS 124-2, SFAS 115-2 SFAS 124-2 No. SFAS 107-1 28-1, SFAS 107-1 28-1. SFAS 157-4 SFAS 157-4 SFAS 115-2 SFAS 124-2 SFAS 107-1 28-1
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.  Interest
    Rate Risk
      Hedging
    Policy
    Item 4.
    Controls
    and Procedures.  (a)  Evaluation of Disclosure Controls and
    Procedures
   53




---



##### Table of Contents



Rule 13a-15(b), Form 10-Q, Rule 13a-15(e)
  (b)  Changes in Internal Control over Financial
    Reporting
    Item 4T.
    Controls
    and Procedures.   54




---



##### Table of Contents



PART II  OTHER
    INFORMATION
  Item 1.
    Legal
    Proceedings.      and/or
  Patent
    Litigation
  Freedom
    Wireless
  ®
  Electronic
    Data Systems
    EMSAT
    Advanced Geo-Location Technology
   55




---



##### Table of Contents



and/or and/or
  DNT
  and/or
  American
    Wireless Group
  and/or
  and/or
   56




---



##### Table of Contents



Securities
    and Derivative Litigation
  and/or
  Rule 10b-5, class-wide
  and/or
  Department
    of Justice Inquiry
    Other
    Litigation
   57




---



##### Table of Contents



Item 1A.
    Risk
    Factors.  Form 10-K
  Risks
    Related to Our Business and Industry
  We Have
    Experienced Net Losses, and We May Not Be Profitable in the
    Future.
    We May
    Not Be Successful in Increasing Our Customer Base Which Would
    Negatively Affect Our Business Plans and Financial
    Outlook.
  quarter-by-quarter
  General
    Economic Conditions May Adversely Affect Our Business, Financial
    Performance or Ability to Obtain Debt or Equity Financing on
    Reasonable Terms or at All.
   58




---



##### Table of Contents



If We
    Experience Low Rates of Customer Acquisition or High Rates of
    Customer Turnover, Our Ability to Become Profitable Will
    Decrease.
   59




---



##### Table of Contents



We Have
    Made Significant Investment, and Will Continue to Invest, in
    Joint Ventures That We Do Not Control.
      We Face
    Increasing Competition Which Could Have a Material Adverse
    Effect on Demand for the Cricket Service.
     60




---



##### Table of Contents



T-Mobile T-Mobile T-Mobile
  and/or
    We May Be
    Unable to Obtain the Roaming Services We Need From Other
    Carriers to Remain Competitive.
     61




---



##### Table of Contents



We
    Restated Certain of Our Prior Consolidated Financial Statements,
    Which Has Led to Additional Risks and Uncertainties, Including
    Shareholder Litigation.
  Form 10-K,
  and/or
  Our
    Business and Stock Price May Be Adversely Affected If Our
    Internal Controls Are Not Effective.
     62




---



##### Table of Contents



Form 10-K Form 10-K
      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.
   63




---



##### 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.
   64




---



##### Table of Contents



and/or
    
    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, network
    build-out and other activities, including 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 Credit
    Agreement bears interest at a variable rate.    Despite
    Current Indebtedness Levels, We May Incur Additional
    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.
   65




---



##### Table of Contents



We May Be
    Unable to Refinance Our Indebtedness.
    Covenants
    in Our Credit Agreement and Indentures 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.     66




---



##### Table of Contents



Form 10-Q Form 10-K,
  Rises in
    Interest Rates Could Adversely Affect Our Financial
    Condition.
    A
    Significant Portion of Our Assets Consists of Goodwill and
    Intangible Assets.
    The
    Wireless Industry is Experiencing Rapid Technological Change,
    Which May Require Us to Significantly Increase Capital
    Investment, and We May Lose Customers If We Fail to Keep Up With
    These Changes.
     67




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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.
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We Rely
    Heavily on Third Parties to Provide Specialized Services; a
    Failure by Such Parties to Provide the Agreed Upon Products or
    Services Could Materially Adversely Affect Our Business, Results
    of Operations and Financial Condition.
    System
    Failures, Security Breaches, Business Disruptions and
    Unauthorized Use or Interference with our Network Could Result
    in Higher Churn, Reduced Revenue and Increased Costs, and Could
    Harm Our Reputation.
   69




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We May
    Not Be Successful in Protecting and Enforcing Our Intellectual
    Property Rights.
        We and
    Our Suppliers May Be Subject to Claims of Infringement Regarding
    Telecommunications Technologies That Are Protected By Patents
    and Other Intellectual Property Rights.
   70




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Regulation
    by Government Agencies May Increase Our Costs of Providing
    Service or Require Us to Change Our Services.
       71




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non-U.S. citizens non-U.S. citizens
  truth-in-billing;
    If Call
    Volume or Wireless Broadband Usage Exceeds Our Expectations, Our
    Costs of Providing Service Could Increase, Which Could Have a
    Material Adverse Effect on Our Operating Expenses.
   72




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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 May Be Revoked in
    the Event that We Violate Applicable Laws.
  10-year 15-year
 73




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Future
    Declines in the Fair Value of Our Wireless Licenses Could Result
    in Future Impairment Charges.
      
    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 sale prices in FCC
    auctions.      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.
   74




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If We
    Experience High Rates of Credit Card, Subscription or Dealer
    Fraud, Our Ability to Generate Cash Flow Will
    Decrease.
    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 or those of our competitors;
    announcements of technological innovations, new services or
    service enhancements, strategic alliances or significant
    agreements by us or by our competitors;
    entry of new competitors into our markets;
    significant developments with respect to intellectual property,
    securities or related litigation;
    announcements of and bidding in auctions for new spectrum;
    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;
    any default under our Credit Agreement or any of the indentures
    governing our senior notes and convertible senior notes because
    of a covenant breach or otherwise; and
    market conditions in our industry and the economy as a whole.   75




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We May
    Elect to Raise Additional Equity Capital Which May Dilute
    Existing Stockholders.
  and/or
  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 Common Stock.
         76




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Our
    Directors and Affiliated Entities Have Substantial Influence
    over Our Affairs, and Our Ownership Is Highly Concentrated.
    Sales of a Significant Number of Shares by Large Stockholders
    May Adversely Affect the Market Price of Leap Common
    Stock.
      Provisions
    in Our Amended and Restated Certificate of Incorporation and
    Bylaws, under Delaware Law, or in Our Credit Agreement and
    Indentures Might Discourage, Delay or Prevent a Change in
    Control of Our Company or Changes in Our Management and,
    Therefore, Depress the Trading Price of Leap 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.     77




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Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Item 3.
    Defaults
    Upon Senior Securities.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.    Item 5.
    Other
    Information.         78




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Item 6.
    Exhibits.  Index to Exhibits:
  ExhibitNumber

Description of Exhibit31.1*

Certification of Chief Executive Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.31.2*

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

Certification of 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
    quarterly report pursuant to 18 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. 79




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SIGNATURES
       By:
    /s/  S.
    Douglas Hutcheson       By:
    /s/  Walter
    Z. Berger    80