##### Table of Contents



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

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2007ORo

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

33-0811062(State or other jurisdiction
    of
    incorporation or organization)

(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 reported)
   þ o
  Rule 12b-2
  Large
    accelerated filer
    þ
    Accelerated
    filer
    o
    Non-accelerated
    filer
    o  Rule 12b-2 o þ
  þ o




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##### Table of Contents



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




---



##### 



LEAP
    WIRELESS INTERNATIONAL, INC.
  QUARTERLY
    REPORT ON FORM 10-Q/A
 (Amendment No. 1)
 For the Quarter Ended June 30, 2007
  TABLE OF CONTENTS
  PagePART I  FINANCIAL
    INFORMATIONItem 1.

Financial Statements


1Item 2.

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


35Item 4.

Controls and Procedures


50PART II  OTHER
    INFORMATIONItem 1A.

Risk Factors


52Item 6.

Exhibits


69EXHIBIT 31EXHIBIT 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)
  June 30,


December 31,2007


2006(Unaudited)


(As Restated)(As Restated)


(See Note 2)(See Note 2)AssetsCash and cash equivalents

$
326,332


$
372,812Short-term investments


357,444



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


12,747



13,581Inventories


90,343



90,185Other current assets


47,608



52,981Total current assets


834,474



595,959Property and equipment, net


1,146,402



1,078,521Wireless licenses


1,857,312



1,563,958Assets held for sale






8,070Goodwill


425,782



425,782Other intangible assets, net


62,965



79,828Deposits for wireless licenses


758



274,084Other assets


49,556



58,745Total assets

$
4,377,249


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

$
212,633


$
317,093Current maturities of long-term debt


9,000



9,000Other current liabilities


99,027



84,675Total current liabilities


320,660



410,768Long-term debt


2,042,249



1,676,500Deferred tax liabilities


152,030



148,335Other long-term liabilities


50,041



47,608Total liabilities


2,564,980



2,283,211Minority interests


33,948



29,943Commitments and contingencies (Note 8)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, 68,217,849 and 67,892,512 shares
    issued and outstanding at June 30, 2007 and
    December 31, 2006, respectively


7



7Additional paid-in capital


1,791,961



1,769,772Retained earnings (accumulated deficit)


(14,358
)


228Accumulated other comprehensive income


711



1,786Total stockholders equity


1,778,321



1,771,793Total liabilities and stockholders equity

$
4,377,249


$
4,084,947   1




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##### Table of Contents



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


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(As Restated)


(As Restated)


(As Restated)


(As Restated)(See Note 2)


(See Note 2)


(See Note 2)


(See Note 2)Revenues:Service revenues

$
347,253


$
227,160


$
668,944


$
445,245Equipment revenues


50,661



50,299



122,395



114,064Total revenues


397,914



277,459



791,339



559,309Operating expenses:Cost of service (exclusive of items shown separately below)


(90,559
)


(61,255
)


(180,999
)


(117,465
)Cost of equipment


(90,818
)


(65,396
)


(213,483
)


(137,373
)Selling and marketing


(47,011
)


(35,942
)


(95,780
)


(65,044
)General and administrative


(66,407
)


(46,576
)


(131,641
)


(95,666
)Depreciation and amortization


(72,415
)


(53,337
)


(141,215
)


(107,373
)Impairment of indefinite-lived intangible assets






(3,211
)






(3,211
)Total operating expenses


(367,210
)


(265,717
)


(763,118
)


(526,132
)Net gain on sale of wireless licenses and disposal of operating
    assets










940



Operating income


30,704



11,742



29,161



33,177Minority interests in consolidated subsidiaries


673



(134
)


2,252



(209
)Interest income


7,134



5,533



12,419



9,727Interest expense


(27,090
)


(8,423
)


(53,586
)


(15,854
)Other expense, net






(5,918
)


(637
)


(5,383
)Income (loss) before income taxes and cumulative effect of
    change in accounting principle


11,421



2,800



(10,391
)


21,458Income tax expense


(1,783
)






(4,195
)


Income (loss) before cumulative effect of change in accounting
    principle


9,638



2,800



(14,586
)


21,458Cumulative effect of change in accounting principle














623Net income (loss)

$
9,638


$
2,800


$
(14,586
)

$
22,081Basic earnings (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
0.14


$
0.05


$
(0.22
)

$
0.36Cumulative effect of change in accounting principle














0.01Basic earnings (loss) per share

$
0.14


$
0.05


$
(0.22
)

$
0.37Diluted earnings (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
0.14


$
0.05


$
(0.22
)

$
0.35Cumulative effect of change in accounting principle














0.01Diluted earnings (loss) per share

$
0.14


$
0.05


$
(0.22
)

$
0.36Shares used in per share calculations:Basic


67,124



60,282



66,998



60,282Diluted


68,800



61,757



66,998



61,651    2




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited
    and in thousands)
  Six Months Ended June 30,2007


2006(As Restated)


(As Restated)(See Note 2)


(See Note 2)Operating activities:Net cash provided by operating activities

$
108,795


$
101,019Investing activities:Purchases of property and equipment


(239,413
)


(187,004
)Change in prepayments for purchases of property and equipment


11,187



5,683Purchases of and deposits for wireless licenses


(2,361
)


(532
)Proceeds from sale of wireless licenses


9,500



Purchases of investments


(380,743
)


(88,535
)Sales and maturities of investments


91,360



123,657Purchase of minority interest


(4,706
)


Purchase of membership units


(13,182
)


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


834



(101
)Net cash used in investing activities


(527,524
)


(146,832
)Financing activities:Proceeds from long-term debt


370,480



900,000Repayment of long-term debt


(4,500
)


(594,444
)Payment of debt issuance costs


(1,319
)


(3,268
)Payment of fees related to forward equity sale






(219
)Minority interest contributions






2,222Proceeds from issuance of common stock, net


7,588



725Net cash provided by financing activities


372,249



305,016Net increase (decrease) in cash and cash equivalents


(46,480
)


259,203Cash and cash equivalents at beginning of period


372,812



293,073Cash and cash equivalents at end of period

$
326,332


$
552,276Supplementary cash flow information:Cash paid for interest

$
72,295


$
23,641Cash paid for income taxes

$
341


$
218    3




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
  Note 1.
    The
    Company  ® tm
      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 overstatement of service revenues of
    $2.2 million and $5.0 million in the three and six
    months ended June 30, 2007, respectively, and an
    overstatement of service revenues of $5.3 million and
    $4.1 million in the three and six months ended
    June 30, 2006, respectively.
    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 4




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##### Table of Contents



pay-in-advance
  
    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 $9.9 million and $20.4 million in the
    three and six months ended June 30, 2007, respectively, and
    a net understatement of total revenues and understatement of
    operating expenses of $14.3 million and $28.3 million
    in the three and six months ended June 30, 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 is
    restating 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 $1.0 million and
    $0.4 million in the three and six months ended
    June 30, 2007, respectively, and a net understatement of
    operating expenses of $0.02 million and $0.4 million
    in the three and six months ended June 30, 2006,
    respectively.
    Income Tax Adjustments The State of Texas
    made certain technical corrections to the Texas Margins Tax
    (TMT) credit in June 2007 which confirmed that the Company was
    eligible for a $2.5 million TMT credit against future tax
    liabilities. The Company believes that it is more likely than
    not that the TMT credit will be realized and therefore a
    valuation allowance should not have been established for this
    item during the second quarter of 2007. Accordingly, the Company
    has recorded an adjustment to release that valuation allowance
    in the second quarter of 2007, which resulted in the realization
    of a $2.5 million income tax benefit and a
    $2.5 million increase in net income for such period.   5




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##### Table of Contents



June 30, 2007PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
327,328


$
(996
)

$
326,332Short-term investments


357,444







357,444Restricted cash, cash equivalents and short-term investments


12,747







12,747Inventories


90,343







90,343Other current assets


46,613



995



47,608Total current assets


834,475



(1
)


834,474Property and equipment, net


1,144,131



2,271



1,146,402Wireless licenses


1,857,312







1,857,312Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


62,965







62,965Deposits for wireless licenses


758







758Other assets


49,556







49,556Total assets

$
4,381,093


$
(3,844
)

$
4,377,249Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
209,584


$
3,049


$
212,633Current maturities of long-term debt


9,000







9,000Other current liabilities


75,212



23,815



99,027Total current liabilities


293,796



26,864



320,660Long-term debt


2,042,249







2,042,249Deferred tax liabilities


155,684



(3,654
)


152,030Other long-term liabilities


50,041







50,041Total liabilities


2,541,770



23,210



2,564,980Minority interests


34,084



(136
)


33,948Stockholders equity:Preferred stock










Common stock


7







7Additional paid-in capital


1,791,961







1,791,961Retained earnings (accumulated deficit)


12,560



(26,918
)


(14,358
)Accumulated other comprehensive income


711







711Total stockholders equity


1,805,239



(26,918
)


1,778,321Total liabilities and stockholders equity

$
4,381,093


$
(3,844
)

$
4,377,249  6




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##### Table of Contents



Three Months Ended June 30, 2007Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
350,212


$
(2,213
)

$
(2,333
)

$
1,587


$



$



$
347,253Equipment revenues


42,997



(677
)






8,341











50,661Total revenues


393,209



(2,890
)


(2,333
)


9,928











397,914Operating expenses:Cost of service (exclusive of items shown separately below)


(89,622
)










(233
)


(704
)






(90,559
)Cost of equipment


(81,052
)










(9,695
)


(71
)






(90,818
)Selling and marketing


(46,861
)














(150
)






(47,011
)General and administrative


(66,371
)














(36
)






(66,407
)Depreciation and amortization


(72,415
)






















(72,415
)Total operating expenses


(356,321
)










(9,928
)


(961
)






(367,210
)Operating income


36,888



(2,890
)


(2,333
)






(961
)






30,704Minority interests in consolidated subsidiaries


652















21







673Interest income


7,134























7,134Interest expense


(27,090
)






















(27,090
)Income before income taxes


17,584



(2,890
)


(2,333
)






(940
)






11,421Income tax expense


(14,337
)


















12,554



(1,783
)Net income

$
3,247


$
(2,890
)

$
(2,333
)

$



$
(940
)

$
12,554


$
9,638Basic and diluted earnings per share:Basic earnings per share

$
0.05


$
(0.04
)

$
(0.04
)

$



$
(0.01
)

$
0.18


$
0.14Diluted earnings per share

$
0.05


$
(0.04
)

$
(0.04
)

$



$
(0.01
)

$
0.18


$
0.14Shares used in per share calculations:Basic


67,124























67,124Diluted


68,800























68,800  7




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##### Table of Contents



Six Months Ended June 30, 2007Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
677,021


$
(5,018
)

$
(6,098
)

$
3,039


$



$



$
668,944Equipment revenues


105,610



(554
)






17,339











122,395Total revenues


782,631



(5,572
)


(6,098
)


20,378











791,339Operating expenses:Cost of service (exclusive of items shown separately below)


(180,571
)










(546
)


118







(180,999
)Cost of equipment


(193,534
)










(19,832
)


(117
)






(213,483
)Selling and marketing


(95,421
)














(359
)






(95,780
)General and administrative


(131,570
)














(71
)






(131,641
)Depreciation and amortization


(141,215
)






















(141,215
)Total operating expenses


(742,311
)










(20,378
)


(429
)






(763,118
)Net gain on sale of wireless licenses and disposal of operating
    assets


940























940Operating income


41,260



(5,572
)


(6,098
)






(429
)






29,161Minority interests in consolidated subsidiaries


2,172















80







2,252Interest income


12,419























12,419Interest expense


(53,586
)






















(53,586
)Other expense, net


(637
)






















(637
)Income (loss) before income taxes


1,628



(5,572
)


(6,098
)






(349
)






(10,391
)Income tax expense


(6,504
)


















2,309



(4,195
)Net loss

$
(4,876
)

$
(5,572
)

$
(6,098
)

$



$
(349
)

$
2,309


$
(14,586
)Basic and diluted loss per share:Basic loss per share

$
(0.07
)

$
(0.08
)

$
(0.09
)

$



$
(0.01
)

$
0.03


$
(0.22
)Diluted loss per share

$
(0.07
)

$
(0.08
)

$
(0.09
)

$



$
(0.01
)

$
0.03


$
(0.22
)Shares used in per share calculations:Basic


66,998























66,998Diluted


66,998























66,998  8




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##### Table of Contents



Six Months Ended June 30, 2007PreviouslyReported


Adjustments


As Restated(Unaudited)Operating activities:Net cash provided by operating activities

$
106,159


$
2,636


$
108,795Investing activities:Purchases of property and equipment


(237,908
)


(1,505
)


(239,413
)Change in prepayments for purchases of property and equipment


11,187







11,187Purchases of and deposits for wireless licenses and spectrum
    clearing costs


(2,361
)






(2,361
)Proceeds from sale of wireless licenses and operating assets


9,500







9,500Purchases of investments


(380,743
)






(380,743
)Sales and maturities of investments


91,360







91,360Purchase of minority interest


(4,706
)






(4,706
)Purchase of membership units


(13,182
)






(13,182
)Changes in restricted cash, cash equivalents and short-term
    investments, net


834







834Net cash used in investing activities


(526,019
)


(1,505
)


(527,524
)Financing activities:Proceeds from long-term debt


370,480







370,480Repayment of long-term debt


(4,500
)






(4,500
)Payment of debt issuance costs


(1,319
)






(1,319
)Proceeds from issuance of common stock, net


7,588







7,588Net cash provided by financing activities


372,249







372,249Net decrease in cash and cash equivalents


(47,611
)


1,131



(46,480
)Cash and cash equivalents at beginning of period


374,939



(2,127
)


372,812Cash and cash equivalents at end of period

$
327,328


$
(996
)

$
326,332Supplementary cash flow information:Cash paid for interest

$
72,295


$



$
72,295Cash paid for income taxes

$
341


$



$
341  9




---



##### Table of Contents



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  10




---



##### 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  11




---



##### Table of Contents



Six Months Ended June 30, 2006Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
446,626


$
(4,050
)

$
331


$
2,338


$



$



$
445,245Equipment revenues


87,916



137







26,011











114,064Total revenues


534,542



(3,913
)


331



28,349











559,309Operating expenses:Cost of service (exclusive of items shown separately below)


(115,459
)










(1,943
)


(63
)






(117,465
)Cost of equipment


(110,967
)










(26,406
)










(137,373
)Selling and marketing


(65,044
)






















(65,044
)General and administrative


(96,158
)














492







(95,666
)Depreciation and amortization


(107,373
)






















(107,373
)Impairment of indefinite-lived intangible assets


(3,211
)






















(3,211
)Total operating expenses


(498,212
)










(28,349
)


429







(526,132
)Operating income


36,330



(3,913
)


331







429







33,177Minority interests in consolidated subsidiaries


(209
)






















(209
)Interest income


9,727























9,727Interest expense


(15,854
)






















(15,854
)Other expense, net


(5,383
)






















(5,383
)Income before income taxes and cumulative effect of change in
    accounting principle


24,611



(3,913
)


331







429







21,458Income tax expense


























Income before cumulative effect of change in accounting principle


24,611



(3,913
)


331







429







21,458Cumulative effect of change in accounting principle


623























623Net income

$
25,234


$
(3,913
)

$
331


$



$
429


$



$
22,081Basic earnings per share:Income before cumulative effect of change in accounting principle

$
0.41


$
(0.07
)

$
0.01


$



$
0.01


$



$
0.36Cumulative effect of change in accounting principle


0.01























0.01Basic earnings per share

$
0.42


$
(0.07
)

$
0.01


$



$
0.01


$



$
0.37Diluted earnings per share:Income before cumulative effect of change in accounting principle

$
0.40


$
(0.07
)

$
0.01


$



$
0.01


$



$
0.35Cumulative effect of change in accounting principle


0.01























0.01Diluted earnings per share

$
0.41


$
(0.07
)

$
0.01


$



$
0.01


$



$
0.36Shares used in per share calculations:Basic


60,282























60,282Diluted


61,651























61,651  12




---



##### Table of Contents



Six Months Ended June 30, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)Operating activities:Net cash provided by operating activities

$
101,781


$
(762
)

$
101,019Investing activities:Purchases of property and equipment


(187,004
)






(187,004
)Change in prepayments for purchases of property and equipment


5,683







5,683Purchases of and deposits for wireless licenses and spectrum
    clearing costs


(532
)






(532
)Purchases of investments


(88,535
)






(88,535
)Sales and maturities of investments


123,657







123,657Changes in restricted cash, cash equivalents and short-term
    investments, net


(101
)






(101
)Net cash used in investing activities


(146,832
)






(146,832
)Financing activities:Proceeds from long-term debt


900,000







900,000Repayment of long-term debt


(594,444
)






(594,444
)Payment of debt issuance costs


(3,268
)






(3,268
)Payment of fees related to forward equity sale


(219
)






(219
)Minority interest contributions


2,222







2,222Proceeds from issuance of common stock, net


725







725Net cash provided by financing activities


305,016







305,016Net increase in cash and cash equivalents


259,965



(762
)


259,203Cash and cash equivalents at beginning of period


293,073







293,073Cash and cash equivalents at end of period

$
553,038


$
(762
)

$
552,276Supplementary cash flow information:Cash paid for interest

$
23,641


$



$
23,641Cash paid for income taxes

$
218


$



$
218   Note 3.
    Basis of
    Presentation and Significant Accounting Policies  Basis
    of Presentation
  Form 10-Q Form 10-K/A
   13




---



##### Table of Contents



FIN 46-R,
  Revenues
    No. 00-21, No. 00-21, No. 00-21
      and/or
    Costs
    and Expenses
    Cost of Service.
 14




---



##### Table of Contents



Cost of Equipment.
  Selling and Marketing.
  General and Administrative.
  Property
    and Equipment
      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   construction-in-progress construction-in-progress construction-in-progress
    Wireless
    Licenses
   15




---



##### Table of Contents



Investments
    in Other Entities
      Concentrations
    Share-Based
    Compensation
      Three Months


Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006(As Restated)





(As Restated)


(As Restated)Cost of service

$
466


$
261


$
1,145


$
519Selling and marketing expenses


560



473



1,561



800General and administrative expenses


4,869



3,954



11,933



7,861Share-based compensation expense before tax


5,895



4,688



14,639



9,180Related income tax benefit














Share-based compensation expense, net of tax

$
5,895


$
4,688


$
14,639


$
9,180Net share-based compensation expense per share:Basic

$
0.09


$
0.08


$
0.22


$
0.15Diluted

$
0.09


$
0.08


$
0.22


$
0.15  16




---



##### Table of Contents



Income
    Taxes
        90-7,
   17




---



##### Table of Contents



Comprehensive
    Income (Loss)
    Three Months


Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006(As Restated)


(As Restated)


(As Restated)


(As Restated)Net income (loss)

$
9,638


$
2,800


$
(14,856
)

$
22,081Other comprehensive income (loss):Net unrealized holding gains (losses) on investments


16



(25
)


(11
)


(42
)Unrealized gains (losses) on interest rate swaps


130



1,119



(1,064
)


3,268Comprehensive income (loss)

$
9,784


$
3,894


$
(15,931
)

$
25,307     June 30,


December 31,2007


2006Net unrealized holding losses on investments, net of tax

$
(1,400
)

$
(1,389
)Unrealized gains on interest rate swaps


2,111



3,175Accumulated other comprehensive income

$
711


$
1,786   Recent
    Accounting Pronouncements
     18




---



##### Table of Contents



Note 4.
    Supplementary
    Balance Sheet Information (in thousands):  June 30,


December 31,2007


2006(As Restated)


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

$
24,350


$
38,257Prepaid expenses


20,219



11,808Other


3,039



2,916$
47,608


$
52,981Property and equipment, net:Network equipment

$
1,263,026


$
1,128,127Computer equipment and other


121,431



100,496Construction-in-progress


272,952



238,5791,657,409



1,467,202Accumulated depreciation


(511,007
)


(388,681
)$
1,146,402


$
1,078,521Accounts payable and accrued liabilities:Trade accounts payable

$
96,511


$
218,020Accrued payroll and related benefits


29,923



29,450Other accrued liabilities


86,199



69,623$
212,633


$
317,093Other current liabilities:Deferred service revenue(2)

$
42,346


$
32,929Deferred equipment revenue(3)


15,938



16,589Accrued sales, telecommunications, property and other taxes
    payable


21,105



15,865Accrued interest


13,421



13,671Other


6,217



5,621$
99,027


$
84,675     (1)
    
    Accounts receivable consists primarily of amounts billed to
    third-party dealers for handsets and accessories.(2)
    
    Deferred service revenue consists primarily of cash received
    from customers in advance of their service period.(3)
    
    Deferred equipment revenue relates to handsets and accessories
    sold to third-party dealers.  Note 5.
    Basic and
    Diluted Earnings (Loss) Per Share   19




---



##### Table of Contents



Three Months


Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006Basic weighted-average shares outstanding


67,124



60,282



66,998



60,282Effect of dilutive common share equivalents:Non-qualified stock options


717



176







96Restricted stock awards


479



926







913Employee stock purchase rights


5











Warrants


475



373







360Diluted weighted-average shares outstanding


68,800



61,757



66,998



61,651     Note 6.
    Long-Term
    Debt    June 30,


December 31,2007


2006Term loans under senior secured credit facilities

$
931,000


$
935,500Senior notes


1,120,249



750,0002,051,249



1,685,500Current maturities of long-term debt


(9,000
)


(9,000
)$
2,042,249


$
1,676,500   Senior
    Secured Credit Facilities
   20




---



##### Table of Contents



Form 10-Q
    Form 10-Q Form 10-K Form 10-Q/A Form 10-K/A Form 10-Q/A
 21




---



##### Table of Contents



Senior
    Notes
     22




---



##### Table of Contents



90-day 90-day
  Note 7.
    Significant
    Acquisitions and Dispositions   23




---



##### Table of Contents



Note 8.
    Commitments
    and Contingencies  Patent
    Litigation
  Method for Providing Wireless Communication Services
    and Network and System for Delivering Same,
     24




---



##### Table of Contents



Mobile Entertainment and Communication
    Device. System for
    Controlling the Supply of Utility Services to
    Consumers
    American
    Wireless Group
  and/or
  and/or
 25




---



##### Table of Contents



Other
    Note 9.
    Guarantor
    Financial Information       26




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of June 30, 2007 (as
    restated; unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
27


$
287,211


$
23,251


$
15,843


$



$
326,332Short-term investments






357,444















357,444Restricted cash, cash equivalents and short-term investments


7,654



4,454



639











12,747Inventories






88,027



1,732



584







90,343Other current assets


225



43,735



2,978



670







47,608Total current assets


7,906



780,871



28,600



17,097







834,474Property and equipment, net


72



950,961



143,222



52,147







1,146,402Investments in and advances to affiliates and consolidated
    subsidiaries


1,780,013



2,021,196



160,666







(3,961,875
)


Wireless licenses






11,070



1,525,264



320,978







1,857,312Goodwill






425,782















425,782Other intangible assets, net






62,678







287







62,965Deposits for wireless licenses






758















758Other assets


1,117



44,863



2,217



2,433



(1,074
)


49,556Total assets

$
1,789,108


$
4,298,179


$
1,859,969


$
392,942


$
(3,962,949
)

$
4,377,249Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
6,336


$
191,458


$
10,154


$
4,685


$



$
212,633Current maturities of long-term debt






9,000















9,000Intercompany payables


4,451



160,666



25,458



5,092



(195,667
)


Other current liabilities






89,656



8,187



2,258



(1,074
)


99,027Total current liabilities


10,787



450,780



43,799



12,035



(196,741
)


320,660Long-term debt






2,002,250



310,535



292,149



(562,685
)


2,042,249Deferred tax liabilities






9,093



142,937











152,030Other long-term liabilities






44,492



4,362



1,187







50,041Total liabilities


10,787



2,506,615



501,633



305,371



(759,426
)


2,564,980Minority interests






11,551











22,397



33,948Membership units subject to repurchase














20,098



(20,098
)


Stockholders equity


1,778,321



1,780,013



1,358,336



67,473



(3,205,822
)


1,778,321Total liabilities and stockholders equity

$
1,789,108


$
4,298,179


$
1,859,969


$
392,942


$
(3,962,949
)

$
4,377,249  27




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of December 31, 2006 (as
    restated, in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
206


$
316,398


$
12,842


$
43,366


$



$
372,812Short-term investments






66,400















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


8,093



4,258



495



735







13,581Inventories






87,303



2,080



802







90,185Other current assets


105



50,307



2,097



472







52,981Total current assets


8,404



524,666



17,514



45,375







595,959Property and equipment, net


117



892,859



147,521



38,024







1,078,521Investments in and advances to affiliates and consolidated
    subsidiaries


1,779,514



2,013,023



144,966







(3,937,503
)


Wireless licenses










1,527,574



36,384







1,563,958Assets held for sale










8,070











8,070Goodwill






425,782















425,782Other intangible assets, net






79,409







419







79,828Deposits for wireless licenses














274,084







274,084Other assets


815



45,616



11,259



1,827



(772
)


58,745Total assets

$
1,788,850


$
3,981,355


$
1,856,904


$
396,113


$
(3,938,275
)

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

$
6,792


$
274,764


$
25,306


$
10,231


$



$
317,093Current maturities of long-term debt






9,000















9,000Intercompany payables


10,265



144,965



11,844



9,893



(176,967
)


Other current liabilities






80,265



4,579



604



(773
)


84,675Total current liabilities


17,057



508,994



41,729



20,728



(177,740
)


410,768Long-term debt






1,636,500



277,955



271,443



(509,398
)


1,676,500Deferred tax liabilities






9,057



139,278











148,335Other long-term liabilities






42,467



4,155



986







47,608Total liabilities


17,057



2,197,018



463,117



293,157



(687,138
)


2,283,211Minority interests






4,821











25,122



29,943Stockholders equity


1,771,793



1,779,516



1,393,787



102,956



(3,276,259
)


1,771,793Total liabilities and stockholders equity

$
1,788,850


$
3,981,355


$
1,856,904


$
396,113


$
(3,938,275
)

$
4,084,947  28




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    June 30, 2007
 (as restated; unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
303,719


$
35,280


$
8,254


$



$
347,253Equipment revenues






59,978



3,108



1,280



(13,705
)


50,661Other revenues






13



13,593







(13,606
)


Total revenues






363,710



51,981



9,534



(27,311
)


397,914Operating expenses:Cost of service (exclusive of items shown separately below)






(87,749
)


(12,809
)


(3,594
)


13,593



(90,559
)Cost of equipment






(89,546
)


(11,595
)


(3,382
)


13,705



(90,818
)Selling and marketing






(37,970
)


(6,805
)


(2,236
)






(47,011
)General and administrative


(492
)


(55,084
)


(9,178
)


(1,666
)


13



(66,407
)Depreciation and amortization


(23
)


(64,259
)


(5,984
)


(2,149
)






(72,415
)Total operating expenses


(515
)


(334,608
)


(46,371
)


(13,027
)


27,311



(367,210
)Operating income (loss)


(515
)


29,102



5,610



(3,493
)






30,704Minority interests in consolidated subsidiaries






(369
)










1,042



673Equity in net income (loss) of consolidated subsidiaries


10,143



(20,006
)










9,863



Interest income


10



24,575



174



203



(17,828
)


7,134Interest expense






(26,696
)


(9,247
)


(8,387
)


17,240



(27,090
)Income (loss) before income taxes


9,638



6,606



(3,463
)


(11,677
)


10,317



11,421Income tax (expense) benefit






3,537



(5,320
)










(1,783
)Net income (loss)

$
9,638


$
10,143


$
(8,783
)

$
(11,677
)

$
10,317


$
9,638  29




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Six Months Ended
    June 30, 2007
    (as restated; unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
591,664


$
63,466


$
13,814


$



$
668,944Equipment revenues






139,425



7,620



2,776



(27,426
)


122,395Other revenues






26



26,621







(26,647
)


Total revenues






731,115



97,707



16,590



(54,073
)


791,339Operating expenses:Cost of service (exclusive of items shown separately below)






(175,798
)


(25,155
)


(6,667
)


26,621



(180,999
)Cost of equipment






(210,173
)


(22,492
)


(8,244
)


27,426



(213,483
)Selling and marketing


(8
)


(77,732
)


(13,402
)


(4,638
)






(95,780
)General and administrative


(813
)


(110,113
)


(17,892
)


(2,849
)


26



(131,641
)Depreciation and amortization


(23
)


(125,146
)


(11,990
)


(4,056
)






(141,215
)Total operating expenses


(844
)


(698,962
)


(90,931
)


(26,454
)


54,073



(763,118
)Net gain (loss) on sale of wireless licenses and disposal of
    operating assets






(311
)


1,251











940Operating income (loss)


(844
)


31,842



8,027



(9,864
)






29,161Minority interests in consolidated subsidiaries






(549
)










2,801



2,252Equity in net loss of consolidated subsidiaries


(13,762
)


(44,803
)










58,565



Interest income


20



45,754



350



579



(34,284
)


12,419Interest expense






(52,106
)


(17,578
)


(17,598
)


33,696



(53,586
)Other expense, net






(625
)


(12
)










(637
)Loss before income taxes


(14,586
)


(20,487
)


(9,213
)


(26,883
)


60,778



(10,391
)Income tax (expense) benefit






6,725



(10,920
)










(4,195
)Net loss

$
(14,586
)

$
(13,762
)

$
(20,133
)

$
(26,883
)

$
60,778


$
(14,586
)  30




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    June 30, 2006
    (as restated; unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
221,763


$
5,397


$



$



$
227,160Equipment revenues






51,861



1,597







(3,159
)


50,299Other revenues






156



9,937







(10,093
)


Total revenues






273,780



16,931







(13,252
)


277,459Operating expenses:Cost of service (exclusive of items shown separately below)






(66,601
)


(4,591
)






9,937



(61,255
)Cost of equipment






(64,683
)


(3,872
)






3,159



(65,396
)Selling and marketing






(29,646
)


(6,296
)










(35,942
)General and administrative


(1,111
)


(41,052
)


(4,569
)






156



(46,576
)Depreciation and amortization


(24
)


(51,624
)


(1,689
)










(53,337
)Impairment of indefinite-lived intangible assets










(3,211
)










(3,211
)Total operating expenses


(1,135
)


(253,606
)


(24,228
)






13,252



(265,717
)Operating income (loss)


(1,135
)


20,174



(7,297
)










11,742Minority interests in consolidated subsidiaries






(134
)














(134
)Equity in net income (loss) of consolidated subsidiaries


3,926



(12,353
)










8,427



Interest income


9



7,940



146







(2,562
)


5,533Interest expense






(8,423
)


(2,562
)






2,562



(8,423
)Other expense, net






(5,918
)














(5,918
)Income (loss) before income taxes


2,800



1,286



(9,713
)






8,427



2,800Income tax (expense) benefit






2,640



(2,640
)










Net income (loss)

$
2,800


$
3,926


$
(12,353
)

$



$
8,427


$
2,800  31




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Six Months Ended
    June 30, 2006
    (as restated; unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
438,304


$
6,941


$



$



$
445,245Equipment revenues






115,081



2,946







(3,963
)


114,064Other revenues






208



19,494







(19,702
)


Total revenues






553,593



29,381







(23,665
)


559,309Operating expenses:Cost of service (exclusive of items shown separately below)






(130,278
)


(6,681
)






19,494



(117,465
)Cost of equipment






(134,313
)


(7,023
)






3,963



(137,373
)Selling and marketing






(55,805
)


(9,239
)










(65,044
)General and administrative


(2,121
)


(84,217
)


(9,536
)






208



(95,666
)Depreciation and amortization


(54
)


(104,974
)


(2,345
)










(107,373
)Impairment of indefinite-lived intangible assets










(3,211
)










(3,211
)Total operating expenses


(2,175
)


(509,587
)


(38,035
)






23,665



(526,132
)Operating income (loss)


(2,175
)


44,006



(8,654
)










33,177Minority interests in consolidated subsidiaries






(209
)














(209
)Equity in net income (loss) of consolidated subsidiaries


24,239



(18,507
)










(5,732
)


Interest income


17



13,190



184







(3,664
)


9,727Interest expense






(15,854
)


(3,664
)






3,664



(15,854
)Other expense, net






(5,381
)


(2
)










(5,383
)Income (loss) before income taxes and cumulative effect of
    change in accounting principle


22,081



17,245



(12,136
)






(5,732
)


21,458Income tax (expense) benefit






6,371



(6,371
)










Income (loss) before cumulative effect of change in accounting
    principle


22,081



23,616



(18,507
)






(5,732
)


21,458Cumulative effect of change in accounting principle






623















623Net income (loss)

$
22,081


$
24,239


$
(18,507
)

$



$
(5,732
)

$
22,081  32




---



##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Six Months Ended
    June 30, 2007 
    (as restated; 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

$
(1,159
)

$
134,143


$
(4,514
)

$
(19,675
)

$



$
108,795Investing activities:Purchases of and changes in prepayments for property and
    equipment






(208,425
)


(7,770
)


(12,031
)






(228,226
)Purchases of and deposits for wireless licenses






(890
)


(1,663
)


192







(2,361
)Proceeds from sale of wireless licenses










9,500











9,500Purchases of investments






(380,743
)














(380,743
)Sales and maturities of investments






91,360















91,360Investments in and advances to affiliates and consolidated
    subsidiaries


(7,588
)


(4,706
)










7,588



(4,706
)Purchase of membership units






(13,182
)














(13,182
)Other


980



(2
)


(144
)










834Net cash used in investing activities


(6,608
)


(516,588
)


(77
)


(11,839
)


7,588



(527,524
)Financing activities:Proceeds from long-term debt






370,480



15,000



4,000



(19,000
)


370,480Issuance of related party debt






(19,000
)










19,000



Repayment of long-term debt






(4,500
)














(4,500
)Payment of debt issuance costs






(1,310
)






(9
)






(1,319
)Proceeds from issuance of common stock, net


7,588



7,588











(7,588
)


7,588Net cash provided by financing activities


7,588



353,258



15,000



3,991



(7,588
)


372,249Net increase (decrease) in cash and cash equivalents


(179
)


(29,187
)


10,409



(27,523
)






(46,480
)Cash and cash equivalents at beginning of period


206



316,398



12,842



43,366







372,812Cash and cash equivalents at end of period

$
27


$
287,211


$
23,251


$
15,843


$



$
326,332  33




---



##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Six Months Ended
    June 30, 2006
    (as restated; unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedOperating activities:Net cash provided by operating activities

$
288


$
94,326


$
6,405


$



$



$
101,019Investing activities:Purchases of and changes in prepayments for property and
    equipment






(98,771
)


(82,550
)










(181,321
)Purchases of and deposits for wireless licenses










(532
)










(532
)Purchases of investments






(88,535
)














(88,535
)Sales and maturities of investments






123,657















123,657Investments in and advances to affiliates and consolidated
    subsidiaries


(506
)


(6,663
)










7,169



Other


(101
)


















(101
)Net cash used in investing activities


(607
)


(70,312
)


(83,082
)






7,169



(146,832
)Financing activities:Proceeds from long-term debt






900,000



71,406







(71,406
)


900,000Issuance of related party debt






(71,406
)










71,406



Repayment of long-term debt






(594,444
)














(594,444
)Payment of debt issuance costs






(3,268
)














(3,268
)Payment of fees related to forward equity sale


(219
)


















(219
)Capital contributions, net






506



8,885







(7,169
)


2,222Proceeds from issuance of common stock, net


725



















725Net cash provided by financing activities


506



231,388



80,291







(7,169
)


305,016Net increase in cash and cash equivalents


187



255,402



3,614











259,203Cash and cash equivalents at beginning of period


46



291,456



1,571











293,073Cash and cash equivalents at end of period

$
233


$
546,858


$
5,185


$



$



$
552,276  34




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  As used in this report, unless the context suggests
    otherwise, the terms we, our,
    ours, and us refer to Leap Wireless
    International, Inc., or Leap, and its subsidiaries, including
    Cricket Communications, Inc., or Cricket, and Alaska Native
    Broadband 1 License, LLC, or ANB 1 License. Leap, Cricket
    and ANB 1 License and their subsidiaries are sometimes
    collectively referred to herein as the Company.
    Unless otherwise specified, information relating to population
    and potential customers, or POPs, is based on 2007 population
    estimates provided by Claritas Inc.
  Form 10-K
  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;
    delays in our market expansion plans, including delays resulting
    from any difficulties in funding such expansion through cash
    from operations, our revolving credit facility or additional
    capital, delays in the availability of network equipment and
    handsets for the AWS spectrum we acquired in Auction #66,
    or delays by existing U.S. government and other private
    sector wireless operations in clearing the 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, 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 Part II 
    Item 1A. Risk Factors below.   35




---



##### Table of Contents



Overview
  Restatement
    of Previously Reported Consolidated Financial
    Information
    Company
    Overview
  ® tm
        and/or
   36




---



##### Table of Contents



37




---



##### Table of Contents



Results
    of Operations
  Operating
    Items
    Three Months Ended June 30,% of 2007





% of 2006


Change fromService





Service


Prior Year2007


Revenues


2006


Revenues


Dollars


Percent(As Restated)





(As Restated)Revenues:Service revenues

$
347,253






$
227,160






$
120,093



52.9
%Equipment revenues


50,661







50,299







362



0.7
%Total revenues


397,914







277,459







120,455



43.4
%Operating expenses:Cost of service


90,559



26.1
%


61,255



27.0
%


29,304



47.8
%Cost of equipment


90,818



26.2
%


65,396



28.8
%


25,422



38.9
%Selling and marketing


47,011



13.5
%


35,942



15.8
%


11,069



30.8
%General and administrative


66,407



19.1
%


46,576



20.5
%


19,831



42.6
%Depreciation and amortization


72,415



20.9
%


53,337



23.5
%


19,078



35.8
%Impairment of indefinite-lived intangible assets






0.0
%


3,211



1.4
%


(3,211
)


(100
)%Total operating expenses


367,210



105.7
%


265,717



117.0
%


101,493



38.2
%Operating income

$
30,704



8.8
%

$
11,742



5.2
%

$
18,962



161.5
%   Six Months Ended June 30,% of 2007





% of 2006


Change fromService





Service


Prior Year2007


Revenues


2006


Revenues


Dollars


Percent(As Restated)





(As Restated)Revenues:Service revenues

$
668,944






$
445,245






$
223,699



50.2
%Equipment revenues


122,395







114,064







8,331



7.3
%Total revenues


791,339







559,309







232,030



41.5
%Operating expenses:Cost of service


180,999



27.1
%


117,465



26.4
%


63,534



54.1
%Cost of equipment


213,483



31.9
%


137,373



30.9
%


76,110



55.4
%Selling and marketing


95,780



14.3
%


65,044



14.6
%


30,736



47.3
%General and administrative


131,641



19.7
%


95,666



21.5
%


35,975



37.6
%Depreciation and amortization


141,215



21.1
%


107,373



24.1
%


33,842



31.5
%Impairment of indefinite-lived intangible assets






0.0
%


3,211



0.7
%


(3,211
)


(100
)%Total operating expenses


763,118



114.1
%


526,132



118.2
%


236,986



45.0
%Net gain on sale of wireless licenses and disposal of operating
    assets


940



0.1
%






0.0
%


940



100.0
%Operating income

$
29,161



4.4
%

$
33,177



7.5
%

$
(4,016
)


(12.1
)%  38




---



##### Table of Contents



Change2007


2006


Amount


PercentFor the Three Months Ended
    June 30:Gross customer additions


462,434



253,033



209,401



82.8%Net customer additions


126,791



57,683



69,108



119.8%Weighted-average number of customers


2,586,900



1,790,232



796,668



44.5%As of June 30:Total customers


2,674,963



1,836,390



838,573



45.7%   Change2007


2006


Amount


PercentFor the Six Months Ended June
    30:Gross customer additions


1,027,489



531,403



496,086



93.4%Net customer additions


445,137



168,092



277,045



164.8%Weighted-average number of customers


2,490,030



1,754,290



735,740



41.9%   Three
    and Six Months Ended June 30, 2007 Compared to Three and
    Six Months Ended June 30, 2006
  Service
    Revenues
      Equipment
    Revenues
      Cost of
    Service
   39




---



##### Table of Contents



Cost of
    Equipment
      Selling
    and Marketing Expenses
      General
    and Administrative Expenses
      Depreciation
    and Amortization
   40




---



##### Table of Contents



Non-Operating
    Items
    Three Months Ended June 30,2007


2006


Change(As Restated)


(As Restated)Minority interests in consolidated subsidiaries

$
673


$
(134
)

$
807Interest income


7,134



5,533



1,601Interest expense


(27,090
)


(8,423
)


(18,667
)Other expense, net






(5,918
)


5,918Income tax expense


(1,783
)






(1,783
)   Six Months Ended June 30,2007


2006


Change(As Restated)


(As Restated)Minority interests in consolidated subsidiaries

$
2,252


$
(209
)

$
2,461Interest income


12,419



9,727



2,692Interest expense


(53,586
)


(15,854
)


(37,732
)Other expense, net


(637
)


(5,383
)


(4,746
)Income tax expense


(4,195
)






(4,195
)   Three
    and Six Months Ended June 30, 2007 Compared to Three and
    Six Months Ended June 30, 2006
  Minority
    Interests
    Interest
    Income
      Interest
    Expense
   41




---



##### Table of Contents



Income
    Tax Expense
           42




---



##### Table of Contents



Performance
    Measures
  Regulation S-K
   43




---



##### Table of Contents



pay-in-advance
    Three Months EndedJune 30,2007


2006(As Restated)


(As Restated)ARPU

$
44.75


$
42.30CPGA

$
182


$
195CCU

$
19.87


$
19.50Churn


4.3
%


3.6
%  44




---



##### Table of Contents



Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
    Three Months Ended June 30,2007


2006(As Restated)


(As Restated)Selling and marketing expense

$
47,011


$
35,942Less share-based compensation expense included in selling and
    marketing expense


(560
)


(473
)Plus cost of equipment


90,818



65,396Less equipment revenue


(50,661
)


(50,299
)Less net loss on equipment transactions unrelated to initial
    customer acquisition


(2,591
)


(1,139
)Total costs used in the calculation of CPGA

$
84,017


$
49,427Gross customer additions


462,434



253,033CPGA

$
182


$
195     Three Months Ended June 30,2007


2006(As Restated)


(As Restated)Cost of service

$
90,559


$
61,255Plus general and administrative expense


66,407



46,576Less share-based compensation expense included in cost of
    service and general and administrative expense


(5,335
)


(4,215
)Plus net loss on equipment transactions unrelated to initial
    customer acquisition


2,591



1,139Total costs used in the calculation of CCU

$
154,222


$
104,755Weighted-average number of customers


2,586,900



1,790,232CCU

$
19.87


$
19.50   Liquidity
    and Capital Resources
  Overview
   45




---



##### Table of Contents



46




---



##### Table of Contents



Cash
    Flows
      
    During January 2007, we completed the sale of three wireless
    licenses that we were not using to offer commercial service for
    an aggregate sales price of $9.5 million.
    During March 2007, Cricket acquired the remaining 25% of the
    membership interests in ANB 1 for $4.7 million,
    following Alaska Native Broadband, LLCs exercise of its
    option to sell its entire 25% controlling interest in ANB 1
    to Cricket.
    On June 22, 2007, we purchased approximately 20% of the
    outstanding membership units of a regional wireless service
    provider for an aggregate purchase price of $13.2 million.
    During the six months ended June 30, 2007, we made
    investment purchases of $380.7 million from proceeds
    received from the issuance of our unsecured senior notes, offset
    by sales or maturities of investments of $91.4 million.
    During the six months ended June 30, 2007, we and our
    consolidated joint ventures purchased $239.4 million of
    property and equipment for the build-out of our new markets and
    the expansion and improvement of our existing markets.    
    During the six months ended June 30, 2007, we issued an
    additional $350 million of unsecured senior notes at an
    issue price of 106% of the principal amount, which resulted in
    gross proceeds of $371 million, offset by payments of
    $4.5 million on our $895.5 million term loan.
    During the six months ended June 30, 2007, we issued common
    stock upon the exercise of stock options held by our employees
    and upon employee purchases of common stock under our Employee
    Stock Purchase Plan, resulting in aggregate net proceeds of
    $7.6 million.  Senior
    Secured Credit Facilities
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Form 10-Q
  Form 10-Q Form 10-K Form 10-Q/A Form 10-K/A Form 10-Q/A
    Senior
    Notes
     48




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90-day 90-day
  System
    Equipment Purchase Agreements
  and/or
  and/or
  Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  Capital
    Expenditures
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Other
    Acquisitions and Dispositions
      Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
      Item 4.
    Controls
    and Procedures.  (a) Evaluation of Disclosure Controls and Procedures
    Form 10-Q/A, Rule 13a-15(b), Form 10-Q/A, Rule 13a-15(e)
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##### Table of Contents



Form 10-Q/A
      (b) 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.    (c) Changes in Internal Control over Financial
    Reporting
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PART II
  OTHER
    INFORMATION
  Item 1A.
    Risk
    Factors.  Form 10-Q
  
    the Risk Factor entitled If We Experience High Rates of
    Customer Turnover, Our Ability to Remain Profitable Will
    Decrease, which has been updated to reflect additional
    risks related to customer churn;
    the Risk Factor entitled We Face Increasing Competition
    Which Could Have a Material Adverse Effect on Demand for the
    Cricket Service, which has been updated to reflect current
    competitive pressures that we face;
    the Risk Factor entitled We Have Restated Our Prior
    Consolidated Financial Statements, Which May Lead to Additional
    Risks and Uncertainties, Including Shareholder Litigation,
    which has been added to describe certain risks related to the
    restatement of our financial statements;
    the Risk Factor entitled Our Business and Stock Price May
    Be Adversely Affected If Our Internal Controls Are Not
    Effective, which was been updated to reflect the
    identification of a material weakness in connection with our
    restatement of our financial statements;
    the Risk Factor entitled Covenants in Our Existing
    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, which has been updated to
    reflect risks related to the waiver we received from our lenders;
    the Risk Factor entitled System Failures Could Result in
    Higher Churn, Reduced Revenue and Increased Costs, and Could
    Harm Our Reputation, which has been updated to reflect
    risks related to possible system failures to certain ancillary
    systems supporting our business;
    the Risk Factor entitled We May Not Be Successful in
    Protecting and Enforcing Our Intellectual Property Rights,
    which has been updated to reflect the current status of certain
    litigation in which we are involved;
    the Risk Factor entitled We and Our Suppliers May Be
    Subject to Claims of Infringement Regarding Telecommunications
    Technologies That Are Protected By Patents and Other
    Intellectual Property Rights, which has been updated to
    reflect additional risks related to potential infringement
    claims that could be made against our suppliers as well as
    recent patent lawsuits which have been filed against us;
    the Risk Factor below entitled Regulation by Government
    Agencies May Increase Our Costs of Providing Service or Require
    Us to Change Our Services, which has been updated to
    reflect risks associated with a recent order issued by the
    FCC; and
    the Risk Factor below entitled Our Stock Price May Be
    Volatile, and You May Lose All or Some of Your Investment,
    which has been updated to reflect additional risks related to
    ownership of our stock.  Risks
    Related to Our Business and Industry
  We Have
    Experienced Net Losses, and We May Not Be Profitable in the
    Future.
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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
    Remain Profitable Will Decrease.
    We Have
    Made Significant Investment, and Will Continue to Invest, in
    Joint Ventures That We Do Not Control.
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We Face
    Increasing Competition Which Could Have a Material Adverse
    Effect on Demand for the Cricket Service.
    and/or
    and/or
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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
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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.
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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.
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
    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.    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.
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We May Be
    Unable to Refinance Our Indebtedness.
    Covenants
    in Our Existing 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 Form 10-Q Form 10-K
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Form 10-Q/A Form 10-K/A Form 10-Q/A
    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.
        The Loss
    of Key Personnel and Difficulty Attracting and Retaining
    Qualified Personnel Could Harm Our Business.
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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.
    System
    Failures Could Result in Higher Churn, Reduced Revenue and
    Increased Costs, and Could Harm Our Reputation.
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We May
    Not Be Successful in Protecting and Enforcing Our Intellectual
    Property Rights.
    Method for Providing Wireless Communication Services
    and Network and System for Delivering Same,
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Operations Method for Providing Wireless Communication
    Services and Network and System for Delivering Same
        We and
    Our Suppliers May Be Subject to Claims of Infringement Regarding
    Telecommunications Technologies That Are Protected By Patents
    and Other Intellectual Property Rights.
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Mobile Entertainment and
    Communication Device System for Controlling the
    Supply of Utility Services to Consumers
      Regulation
    by Government Agencies May Increase Our Costs of Providing
    Service or Require Us to Change Our Services.
  back-up
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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.
    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
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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 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.
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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 our intellectual
    property or related litigation;
    the announcements and bidding of 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; 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.
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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.   68




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Item 6.
    Exhibits.  Index to Exhibits:
  ExhibitNumber

Description of Exhibit4.7(1)

Registration Rights Agreement, dated as of June 6, 2007, by and
    among Cricket Communications, Inc., the Guarantors (as defined
    therein), Citigroup Global Markets Inc., Goldman, Sachs &
    Co. and Deutsche Bank Securities Inc., as representatives of the
    Initial Purchasers named therein.10.11.20(2)

Second Amendment to the Leap Wireless International, Inc. 2004
    Stock Option, Restricted Stock and Deferred Stock Unit Plan.10.14(3)

Leap Wireless International, Inc. Executive Incentive Bonus Plan.10.15(2)

System Equipment Purchase Agreement, dated as of June 11, 2007,
    by and among Cricket Communications, Inc., Alaska Native
    Broadband 1 License LLC and Nortel Networks Inc.10.16(2)

System Equipment Purchase Agreement, dated as of June 14, 2007,
    by and among Cricket Communications, Inc., Alaska Native
    Broadband 1 License LLC and Lucent Technologies, Inc.31*

Certification of Chief Executive Officer and 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
    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.
    
    Portions of this exhibit (indicated by asterisks) have been
    omitted pursuant to a request for confidential treatment
    pursuant to
    Rule 24b-2
    under Securities Exchange Act of 1934.(1)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated June 6, 2007, filed with the SEC on June 6, 2007
    and incorporated herein by reference.(2)
    
    Filed as an exhibit to Leaps Quarterly Report on
    Form 10-Q,
    dated August 9, 2007, filed with the SEC on August 9,
    2007 and incorporated herein by reference.(3)
    
    Filed as Appendix B to Leaps Definitive Proxy
    Statement filed with the SEC on April 6, 2007 and
    incorporated herein by reference. 69




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SIGNATURES
      Date: December 26, 2007

By: /s/  S.
    Douglas HutchesonS.
    Douglas Hutcheson
    Chief Executive Officer, President
    and Acting Chief Financial Officer  70