##### 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,
    2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission File Number:
    000-29752
  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.)5887 Copley Drive, San Diego, CA(Address of Principal Executive
    Offices)Delaware

92111(Zip Code)33-0811062   (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   Rule 12b-2 o þ




---



##### 





LEAP
    WIRELESS INTERNATIONAL, INC.
    QUARTERLY REPORT ON
    FORM 10-Q
    For the Quarter Ended March 31, 2010
    TABLE OF CONTENTS
   
 PagePART I  FINANCIAL
    INFORMATIONItem 1.


Financial Statements

1Item 2.


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

32Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk

51Item 4.


Controls and Procedures

51Item 4T.


Controls and Procedures

51PART II  OTHER
    INFORMATIONItem 1.


Legal Proceedings

52Item 1A.


Risk Factors

55Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds

76Item 3.


Defaults Upon Senior Securities

76Item 5.


Other Information

76Item 6.


Exhibits

76EX-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 31,2010


2009(Unaudited)AssetsCash and cash equivalents

$
173,121


$
174,999Short-term investments


352,807



389,154Restricted cash, cash equivalents and short-term investments


3,866



3,866Inventories


55,189



107,912Deferred charges


35,998



38,872Other current assets


83,956



73,204Total current assets


704,937



788,007Property and equipment, net


2,093,904



2,121,094Wireless licenses


1,923,097



1,921,973Assets held for sale






2,381Goodwill


430,101



430,101Intangible assets, net


23,399



24,535Other assets


84,268



83,630Total assets

$
5,259,706


$
5,371,721Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
228,575


$
310,386Current maturities of long-term debt


16,096



8,000Other current liabilities


231,363



196,647Total current liabilities


476,034



515,033Long-term debt


2,725,772



2,735,318Deferred tax liabilities


271,369



259,512Other long-term liabilities


105,357



99,696Total liabilities


3,578,532



3,609,559Redeemable non-controlling interests


51,768



71,632Commitments 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, 78,226,957 and 77,524,040 shares
    issued and outstanding at March 31, 2010 and
    December 31, 2009, respectively


8



8Additional paid-in capital


2,152,772



2,148,194Accumulated deficit


(524,132
)


(458,685
)Accumulated other comprehensive income


758



1,013Total stockholders equity


1,629,406



1,690,530Total liabilities and stockholders equity

$
5,259,706


$
5,371,721    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 EndedMarch 31,2010


2009Revenues:Service revenues

$
584,822


$
514,005Equipment revenues


69,132



72,982Total revenues


653,954



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


165,934



144,344Cost of equipment


168,053



157,796Selling and marketing


111,884



103,523General and administrative


92,256



96,177Depreciation and amortization


109,246



89,733Total operating expenses


647,373



591,573Gain (loss) on sale or disposal of assets


(1,453
)


3,581Operating income (loss)


5,128



(1,005
)Equity in net income of investees, net


571



1,479Interest income


428



945Interest expense


(60,295
)


(41,851
)Other income (expense), net


15



(63
)Loss before income taxes


(54,153
)


(40,495
)Income tax expense


(11,294
)


(6,865
)Net loss


(65,447
)


(47,360
)Accretion of redeemable non-controlling interests, net of tax


(2,587
)


(2,936
)Net loss attributable to common stockholders

$
(68,034
)

$
(50,296
)Loss per share attributable to common stockholders:Basic

$
(0.90
)

$
(0.74
)Diluted

$
(0.90
)

$
(0.74
)Shares used in per share calculations:Basic


75,794



68,189Diluted


75,794



68,189    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 31,2010


2009Operating activities:Net cash provided by operating activities

$
93,551


$
99,952Investing activities:Purchases of property and equipment


(107,206
)


(201,785
)Change in prepayments for purchases of property and equipment


234



(1,494
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs


(1,124
)


(2,545
)Proceeds from sale of wireless licenses and operating assets






2,965Purchases of investments


(122,483
)


(234,563
)Sales and maturities of investments


158,425



165,914Change in restricted cash


185



(1,134
)Net cash used in investing activities


(71,969
)


(272,642
)Financing activities:Repayment of long-term debt


(2,000
)


(3,654
)Purchase of non-controlling interest


(20,973
)


Proceeds from the issuance of common stock, net






853Other


(487
)


(334
)Net cash used in financing activities


(23,460
)


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


(1,878
)


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


174,999



357,708Cash and cash equivalents at end of period

$
173,121


$
181,883Supplementary disclosure of cash flow information:Cash paid for interest

$
20,993


$
41,187Cash paid for income taxes

$
79


$
3Non-cash investing and financing activities:Contribution of wireless licenses in exchange for an equity
    interest

$
2,381


$
    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
    Segment
    and Geographic Data
   4




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##### Table of Contents



Revenues
  month-to-month
        and/or
    E-911
  Fair
    Value of Financial Instruments
   5




---



##### Table of Contents



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 construction-in-progress construction-in-progress
     6




---



##### Table of Contents



Wireless
    Licenses
    and/or
  Goodwill
    and Other Intangible Assets
    Impairment
    of Indefinite-Lived Intangible Assets
   7




---



##### Table of Contents



Wireless
    Licenses
            Goodwill
   8




---



##### Table of Contents



Investments
    in Other Entities
    other-than-temporary
 9




---



##### Table of Contents



other-than-temporary,
  Concentrations
      Share-Based
    Compensation
      Three MonthsEnded March 31,2010


2009Cost of service

$
597


$
844Selling and marketing expenses


1,106



1,583General and administrative expenses


5,462



9,228Share-based compensation expense

$
7,165


$
11,655Share-based compensation expense per share:Basic

$
0.09


$
0.17Diluted

$
0.09


$
0.17   Income
    Taxes
   10




---



##### Table of Contents



year-to-date
                 11




---



##### Table of Contents



Comprehensive
    Loss
    Three MonthsEnded March 31,2010


2009Net loss

$
(65,447
)

$
(47,360
)Other comprehensive loss:Net unrealized holding gains (losses) on investments, net of tax


(255
)


4Comprehensive loss

$
(65,702
)

$
(47,356
)   Note 3.
    Supplementary
    Balance Sheet Information (in thousands):  March 31,


December 31,2010


2009Other current assets:Accounts receivable, net(1)

$
30,832


$
37,456Prepaid expenses


38,219



21,109Other


14,905



14,639$
83,956


$
73,204Property and equipment, net(2):Network equipment

$
2,774,644


$
2,722,863Computer hardware and software


264,675



246,546Construction-in-progress


305,721



303,167Other


103,862



101,6163,448,902



3,374,192Accumulated depreciation


(1,354,998
)


(1,253,098
)$
2,093,904


$
2,121,094Intangible assets, net:Customer relationships

$
7,347


$
7,347Trademarks


37,000



37,00044,347



44,347Accumulated amortization of customer relationships


(5,971
)


(5,496
)Accumulated amortization of trademarks


(14,977
)


(14,316
)$
23,399


$
24,535Accounts payable and accrued liabilities:Trade accounts payable

$
82,978


$
180,711Accrued payroll and related benefits


57,098



47,651Other accrued liabilities


88,499



82,024$
228,575


$
310,386Other current liabilities:Deferred service revenue(3)

$
94,140


$
82,403Deferred equipment revenue(4)


22,904



28,218Accrued sales, telecommunications, property and other taxes
    payable


24,852



33,712Accrued interest


83,883



47,101Other


5,584



5,213$
231,363


$
196,647  12




---



##### Table of Contents



(1)
    
    Accounts receivable, net consists primarily of amounts billed to
    third-party dealers for devices and accessories net of an
    allowance for doubtful accounts.(2)
    
    As of March 31, 2010 and December 31, 2009,
    approximately $8.5 million of assets were held by the
    Company under capital lease arrangements. Accumulated
    amortization relating to these assets totaled $4.0 million
    and $3.8 million as of March 31, 2010 and
    December 31, 2009, respectively.(3)
    
    Deferred service revenue consists primarily of cash received
    from customers in advance of their service period.(4)
    
    Deferred equipment revenue relates to devices 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, 2010 or December 31, 2009.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 as of March 31, 2010 and
    December 31, 2009 included its cash equivalents, its
    short-term investments in obligations of the
    U.S. government and government agencies and a majority of
    its short-term investments in commercial paper.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, 2010 and
    December 31, 2009 was a short-term investment in
    asset-backed commercial paper. 13




---



##### Table of Contents



At Fair Value as of March 31, 2010Level 1


Level 2


Level 3


TotalAssets:Money markets and certificates of deposit

$



$
85,697


$



$
85,697Commercial paper






69,195







69,195Asset-backed commercial paper










2,498



2,498U.S. government or government agency securities






353,319







353,319Total

$



$
508,211


$
2,498


$
510,709   At Fair Value as of December 31, 2009Level 1


Level 2


Level 3


TotalAssets:Money markets and certificates of deposit

$



$
81,432


$



$
81,432Commercial paper






108,952







108,952Asset-backed commercial paper










2,731



2,731U.S. government or government agency securities






350,435







350,435Total

$



$
540,819


$
2,731


$
543,550       Three MonthsEnded March 31,2010Beginning balance, January 1

$
2,731Total gains (losses):Included in net loss


67Included in comprehensive loss


(223
)Purchases and Sales:Purchases


Sales


(77
)Transfers into Level 3


Transfers out of Level 3


Ending balance, March 31

$
2,498     Cash
    Equivalents and Short-Term Investments
  available-for-sale.
 14




---



##### Table of Contents



time-to-maturity
  Available-for-sale
  As of March 31, 2010Cost


Fair ValueMoney markets and certificates of deposits

$
85,697


$
85,697Commercial paper


69,195



69,195Asset-backed commercial paper


1,041



2,498U.S. government or government agency securities


353,320



353,319$
509,253


$
510,709   As of December 31, 2009Cost


Fair ValueMoney markets and certificates of deposits

$
81,432


$
81,432Commercial paper


108,955



108,952Asset-backed commercial paper


1,051



2,731U.S. government or government agency securities


350,402



350,435$
541,840


$
543,550   Long-Term
    Debt
    Note 6.
    Long-Term
    Debt    March 31,


December 31,2010


2009Unsecured senior notes due 2014 and 2015

$
1,400,000


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


14,468



15,111Senior secured notes due 2016


1,100,000



1,100,000Unamortized discount on $1,100 million senior secured notes
    due 2016


(38,696
)


(39,889
)Convertible senior notes due 2014


250,000



250,000Term loans under LCW senior secured credit agreement


16,096



18,0962,741,868



2,743,318Current maturities of long-term debt


(16,096
)


(8,000
)$
2,725,772


$
2,735,318  15




---



##### Table of Contents



Senior
    Notes
  Unsecured
    Senior Notes Due 2014
          Convertible
    Senior Notes Due 2014
   16




---



##### Table of Contents



Unsecured
    Senior Notes Due 2015
     17




---



##### Table of Contents



Senior
    Secured Notes Due 2016
        pari passu
       18




---



##### Table of Contents



LCW
    Operations Senior Secured Credit Agreement
      Note 7.
    Significant
    Acquisitions and Dispositions     19




---



##### Table of Contents



1 2
    Note 8.
    Arrangements
    with Variable Interest Entities    Arrangements
    with LCW Wireless
    Limited
    Liability Company Agreement
  30-day
  Line of
    Credit Agreement
  30-day
  Management
    Agreement
  mark-up
 20




---



##### Table of Contents



Other
    Arrangements
    with Denali
    Limited
    Liability Company Agreement
    Senior
    Secured Credit Agreement
  sub-facility sub-facility sub-facility
  Management
    Agreement
     21




---



##### Table of Contents



and/or
    Three MonthsEnded March 31,2010


2009Beginning balance, January 1

$
71,632


$
71,879Purchase of CSM membership units


(20,973
)


Accretion of redeemable non-controlling interests, before tax


1,109



2,936Ending balance, March 31

$
51,768


$
74,815   Note 9.
    Commitments
    and Contingencies      and/or
  Patent
    Litigation
  Freedom
    Wireless
   22




---



##### Table of Contents



® tm
  DNT
  and/or
  Digital
    Technology Licensing
  and/or ® and/or and/or
  On The
    Go
    DownUnder
    Wireless
   23




---



##### Table of Contents



Securities
    and Derivative Litigation
    and/or
  Rule 10b-5, class-wide
   24




---



##### Table of Contents



Department
    of Justice Inquiry
    Other
    Litigation, Claims and Disputes
    Indemnification
    Agreements
    Tower
    Provider Commitments
    Outstanding
    Letters of Credit and Surety Bonds
      Note 10.
    Guarantor
    Financial Information     25




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of March 31, 2010 (unaudited
    and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiary


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
48


$
154,560


$



$
18,513


$



$
173,121Short-term investments






350,309







2,498







352,807Restricted cash, cash equivalents and short-term investments


2,231



1,625







10







3,866Inventories






52,043







3,146







55,189Deferred charges






35,998















35,998Other current assets


53



80,469







5,192



(1,758
)


83,956Total current assets


2,332



675,004







29,359



(1,758
)


704,937Property and equipment, net


2



1,837,797







256,105







2,093,904Investments in and advances to affiliates and consolidated
    subsidiaries


1,905,358



2,167,243



23,837



7,778



(4,104,216
)


Wireless licenses






7,890



1,580,994



334,213







1,923,097Goodwill






430,101















430,101Other intangible assets, net






23,399















23,399Other assets


6,332



75,909







2,027







84,268Total assets

$
1,914,024


$
5,217,343


$
1,604,831


$
629,482


$
(4,105,974
)

$
5,259,706Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
28


$
223,672


$



$
4,875


$



$
228,575Current maturities of long-term debt














16,096







16,096Intercompany payables


32,261



279,234







8,200



(319,695
)


Other current liabilities


2,329



212,656







18,136



(1,758
)


231,363Total current liabilities


34,618



715,562







47,307



(321,453
)


476,034Long-term debt


250,000



2,475,772







744,215



(744,215
)


2,725,772Deferred tax liabilities






271,369















271,369Other long-term liabilities






93,954







11,403







105,357Total liabilities


284,618



3,556,657







802,925



(1,065,668
)


3,578,532Redeemable non-controlling interests






2,951







48,817







51,768Stockholders equity (deficit)


1,629,406



1,657,735



1,604,831



(222,260
)


(3,040,306
)


1,629,406Total liabilities and stockholders equity

$
1,914,024


$
5,217,343


$
1,604,831


$
629,482


$
(4,105,974
)

$
5,259,706  26




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of December 31, 2009 (in
    thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiary


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
66


$
160,834


$



$
14,099


$



$
174,999Short-term investments






386,423







2,731







389,154Restricted cash, cash equivalents and short-term investments


2,231



1,625







10







3,866Inventories






102,883







5,029







107,912Deferred charges






38,872















38,872Other current assets


83



69,009







3,619



493



73,204Total current assets


2,380



759,646







25,488



493



788,007Property and equipment, net


2



1,853,898







267,194







2,121,094Investments in and advances to affiliates and consolidated
    subsidiaries


1,965,842



2,233,669



86,405



7,381



(4,293,297
)


Wireless licenses






7,889



1,580,174



333,910







1,921,973Assets held for sale










2,381











2,381Goodwill






430,101















430,101Intangible assets, net






24,535















24,535Other assets


6,663



74,558







2,409







83,630Total assets

$
1,974,887


$
5,384,296


$
1,668,960


$
636,382


$
(4,292,804
)

$
5,371,721Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
16


$
303,520


$



$
6,850


$



$
310,386Current maturities of long-term debt














8,000







8,000Intercompany payables


29,194



347,468







19,416



(396,078
)


Other current liabilities


5,147



172,202







18,803



495



196,647Total current liabilities


34,357



823,190







53,069



(395,583
)


515,033Long-term debt


250,000



2,475,222







714,640



(704,544
)


2,735,318Deferred tax liabilities






259,512















259,512Other long-term liabilities






90,233







9,463







99,696Total liabilities


284,357



3,648,157







777,172



(1,100,127
)


3,609,559Redeemable non-controlling interests






23,981







47,651







71,632Stockholders equity (deficit)


1,690,530



1,712,158



1,668,960



(188,441
)


(3,192,677
)


1,690,530Total liabilities and stockholders equity

$
1,974,887


$
5,384,296


$
1,668,960


$
636,382


$
(4,292,804
)

$
5,371,721  27




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    March 31, 2010 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiary


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
536,808


$



$
47,998


$
16


$
584,822Equipment revenues






62,702







6,430







69,132Other revenues






(103
)


23,925



754



(24,576
)


Total revenues






599,407



23,925



55,182



(24,560
)


653,954Operating expenses:Cost of service (exclusive of items shown separately below)






175,023







15,574



(24,663
)


165,934Cost of equipment






150,636







17,417







168,053Selling and marketing






98,363







13,521







111,884General and administrative


3,119



84,199



173



4,662



103



92,256Depreciation and amortization






98,071







11,175







109,246Total operating expenses


3,119



606,292



173



62,349



(24,560
)


647,373Gain on sale or disposal of assets






(705
)






(748
)






(1,453
)Operating income (loss)


(3,119
)


(7,590
)


23,752



(7,915
)






5,128Equity in net loss of consolidated subsidiaries


(67,834
)


(10,004
)










77,838



Equity in net income of investees, net






571















571Interest income


6,063



25,096







351



(31,082
)


428Interest expense


(3,144
)


(63,206
)






(25,027
)


31,082



(60,295
)Other expense, net






15















15Income (loss) before income taxes


(68,034
)


(55,118
)


23,752



(32,591
)


77,838



(54,153
)Income tax expense






(11,294
)














(11,294
)Net income (loss)


(68,034
)


(66,412
)


23,752



(32,591
)


77,838



(65,447
)Accretion of redeemable non-controlling interests






(1,422
)






(1,165
)






(2,587
)Net income (loss) attributable to common stockholders

$
(68,034
)

$
(67,834
)

$
23,752


$
(33,756
)

$
77,838


$
(68,034
)  28




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##### 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


Subsidiary


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
)


591,573Loss 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


(52,171
)


(4,678
)










56,849



Equity in net loss of investees, net






1,479















1,479Interest income


6,064



19,056







1,326



(25,501
)


945Interest expense


(3,088
)


(49,797
)






(14,467
)


25,501



(41,851
)Other income (expense), net






(63
)














(63
)Income (loss) before income taxes


(50,296
)


(43,425
)


21,611



(25,234
)


56,849



(40,495
)Income tax expense






(6,865
)














(6,865
)Net income (loss)


(50,296
)


(50,290
)


21,611



(25,234
)


56,849



(47,360
)Accretion of redeemable non-controlling interests






(1,881
)






(1,055
)






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

$
(50,296
)

$
(52,171
)

$
21,611


$
(26,289
)

$
56,849


$
(50,296
)  29




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##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Three Months Ended
    March 31, 2010 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiary


Subsidiaries


Adjustments


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

$
(18
)

$
101,052


$



$
(7,416
)

$
(67
)

$
93,551Investing activities:Purchases of property and equipment






(106,381
)






(825
)






(107,206
)Changes in prepayments for purchases of property and equipment






234















234Purchases of and deposits for wireless licenses and spectrum
    clearing costs






(821
)






(303
)






(1,124
)Purchases of investments






(122,483
)














(122,483
)Sales and maturities of investments






158,400







25







158,425Change in restricted cash






185















185Net cash used in investing activities






(70,866
)






(1,103
)






(71,969
)Financing activities:Issuance of related party debt






(15,000
)






15,000







Repayment of long-term debt














(2,000
)






(2,000
)Minority interest distribution














(67
)


67



Purchase of non-controlling interest






(20,973
)














(20,973
)Other






(487
)














(487
)Net cash provided by (used in) financing activities






(36,460
)






12,933



67



(23,460
)Net increase (decrease) in cash and cash equivalents


(18
)


(6,274
)






4,414







(1,878
)Cash and cash equivalents at beginning of period


66



160,834







14,099







174,999Cash and cash equivalents at end of period

$
48


$
154,560


$



$
18,513


$



$
173,121  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


Subsidiary


Subsidiaries


Adjustments


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

$
53


$
122,581


$



$
(22,651
)

$
(31
)

$
99,952Investing activities:Purchases property and equipment






(170,696
)






(31,089
)






(201,785
)Changes in prepayments for purchases of property and equipment






(1,494
)














(1,494
)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



Change in restricted cash


(1
)


(1,163
)






30







(1,134
)Net cash used in investing activities


(854
)


(240,812
)






(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
)


853Non-controlling 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




---



##### 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 economic downturn 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 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;
    our ability to attract, motivate and retain an experienced
    workforce;
    our ability to comply with the covenants in any credit
    agreement, indenture or similar instrument governing any of our
    existing or future indebtedness;
    failure of our network or information technology systems to
    perform according to expectations and risks associated with the
    upgrade or transition of certain of those systems, including our
    customer billing system; and
    other factors detailed in Part II 
    Item 1A. Risk Factors below.   32




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##### Table of Contents



Overview
  Company
    Overview
  ®
         33




---



##### Table of Contents



voice-over-internet-protocol
    end-of-period
 34




---



##### Table of Contents



Results
    of Operations
  Operating
    Items
    Three Months Ended March 31,% of 2010





% of 2009


Change fromService





Service


Prior Year2010


Revenues


2009


Revenues


Dollars


PercentRevenues:Service revenues

$
584,822






$
514,005






$
70,817



13.8
%Equipment revenues


69,132







72,982







(3,850
)


(5.3
)%Total revenues


653,954







586,987







66,967



11.4
%Operating expenses:Cost of service


165,934



28.4
%


144,344



28.1
%


21,590



15.0
%Cost of equipment


168,053



28.7
%


157,796



30.7
%


10,257



6.5
%Selling and marketing


111,884



19.1
%


103,523



20.1
%


8,361



8.1
%General and administrative


92,256



15.8
%


96,177



18.7
%


(3,921
)


(4.1
)%Depreciation and amortization


109,246



18.7
%


89,733



17.5
%


19,513



21.7
%Total operating expenses


647,373



110.7
%


591,573



115.1
%


55,800



9.4
%Gain (loss) on sale or disposal of assets


(1,453
)


(0.2
)%


3,581



0.7
%


(5,034
)


(140.6
)%Operating income (loss)

$
5,128



0.9
%

$
(1,005
)


(0.2
)%

$
6,133



610.2
%  35




---



##### Table of Contents



ChangeFor the Three Months Ended March 31(1):

2010


2009


Amount


PercentGross customer additions


1,132,998



889,911



243,087



27.3
%Net customer additions


445,768



492,753



(46,985
)


(9.5
)%Weighted-average number of customers


5,135,102



4,058,819



1,076,283



26.5
%As of March 31:Total customers


5,399,872



4,337,426



1,062,446



24.5
%     (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, 2010 Compared to Three Months Ended
    March 31, 2009
  Service
    Revenues
    Equipment
    Revenues
    Cost of
    Service
  quarter-over-quarter.
  Cost of
    Equipment
    Selling
    and Marketing Expenses
   36




---



##### Table of Contents



General
    and Administrative Expenses
    Depreciation
    and Amortization
    Gain
    (Loss) on Sale or Disposal of Assets
    Non-Operating
    Items
    Three Months Ended March 31,2010


2009


ChangeEquity in net income of investees, net

$
571


$
1,479


$
(908
)Interest income


428



945



(517
)Interest expense


(60,295
)


(41,851
)


(18,444
)Other income (expense), net


15



(63
)


78Income tax expense


(11,294
)


(6,865
)


(4,429
)   Three
    Months Ended March 31, 2010 Compared to Three Months Ended
    March 31, 2009
  Equity in
    Net Income of Investees, Net
    Interest
    Income
   37




---



##### Table of Contents



Interest
    Expense
    Income
    Tax Expense
  year-to-date
       38




---



##### Table of Contents



Subscriber
    Recognition and Disconnect Policies
  Pay-in-advance
    Performance
    Measures
  Regulation S-K
   39




---



##### Table of Contents



pay-in-advance
 40




---



##### Table of Contents




    it does not reflect capital expenditures;
    although it does not include depreciation and amortization, the
    assets being depreciated and amortized will often have to be
    replaced in the future and adjusted OIBDA does not reflect cash
    requirements for such replacements;
    it does not reflect costs associated with share-based awards
    exchanged for employee services;
    it does not reflect the interest expense necessary to service
    interest or principal payments on current or future indebtedness;
    it does not reflect expenses incurred for the payment of income
    taxes and other taxes; and
    other companies, including companies in our industry, may
    calculate this measure differently than we do, limiting its
    usefulness as a comparative measure.      Three Months EndedMarch 31,2010


2009ARPU

$
37.96


$
42.21CPGA

$
171


$
195CCU

$
17.41


$
20.03Churn


4.5
%


3.3
%Adjusted OIBDA

$
122,992


$
96,802  41




---



##### Table of Contents



Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
    Three Months EndedMarch 31,2010


2009Selling and marketing expense

$
111,884


$
103,523Less share-based compensation expense included in selling and
    marketing expense


(1,106
)


(1,583
)Plus cost of equipment


168,053



157,796Less equipment revenue


(69,132
)


(72,982
)Less net loss on equipment transactions unrelated to initial
    customer acquisition


(16,141
)


(13,448
)Total costs used in the calculation of CPGA

$
193,558


$
173,306Gross customer additions


1,132,998



889,911CPGA

$
171


$
195     Three Months EndedMarch 31,2010


2009Cost of service

$
165,934


$
144,344Plus general and administrative expense


92,256



96,177Less share-based compensation expense included in cost of
    service and general and administrative expense


(6,059
)


(10,072
)Plus net loss on equipment transactions unrelated to initial
    customer acquisition


16,141



13,448Total costs used in the calculation of CCU

$
268,272


$
243,897Weighted-average number of customers


5,135,102



4,058,819CCU

$
17.41


$
20.03  42




---



##### Table of Contents



Three Months EndedMarch 31,2010


2009Operating income (loss)

$
5,128


$
(1,005
)Plus depreciation and amortization


109,246



89,733OIBDA

$
114,374


$
88,728Less (gain) loss on sale or disposal of assets


1,453



(3,581
)Plus share-based compensation expense


7,165



11,655Adjusted OIBDA

$
122,992


$
96,802   Liquidity
    and Capital Resources
  Overview
      slower-than-anticipated
   43




---



##### Table of Contents



Cash
    Flows
  Operating
    Activities
   44




---



##### Table of Contents



Investing
    Activities
    
    During the three months ended March 31, 2010, we and our
    consolidated joint ventures purchased $107.2 million of
    property and equipment for the ongoing growth and development of
    markets in commercial operation and other internal capital
    projects.
    During the three months ended March 31, 2010, we made
    investment purchases of $122.5 million, offset by sales or
    maturities of investments of $158.4 million.  Financing
    Activities
    Senior
    Notes
  Unsecured
    Senior Notes Due 2014
       45




---



##### Table of Contents



Convertible
    Senior Notes Due 2014
        Unsecured
    Senior Notes Due 2015
   46




---



##### Table of Contents



Senior
    Secured Notes Due 2016
     47




---



##### Table of Contents



pari passu
           48




---



##### Table of Contents



LCW
    Operations Senior Secured Credit Agreement
      Fair
    Value of Financial Instruments
       49




---



##### Table of Contents



Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  Capital
    Expenditures
        Other
    Acquisitions and Dispositions
    1 2
  then-applicable
 50




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.  Interest
    Rate Risk
      Item 4.
    Controls
    and Procedures.  (a) Evaluation of Disclosure Controls and Procedures
    Rule 13a-15(b), Form 10-Q, Rule 13a-15(e)
  (b) Changes in Internal Control over Financial
    Reporting
    Item 4T.
    Controls
    and Procedures.   51




---



##### Table of Contents



PART II  OTHER
    INFORMATION
  Item 1.
    Legal
    Proceedings.      and/or
  Patent
    Litigation
  Freedom
    Wireless
  ® tm
  DNT
  and/or
 52




---



##### Table of Contents



Digital
    Technology Licensing
  and/or ® and/or and/or
  On The
    Go
    DownUnder
    Wireless
    Securities
    and Derivative Litigation
     53




---



##### Table of Contents



and/or
  Rule 10b-5, class-wide
    Department
    of Justice Inquiry
    Other
    Litigation, Claims and Disputes
   54




---



##### Table of Contents



Item 1A.
    Risk
    Factors  Form 10-K
  
    changes to the risk factor below entitled We Have Made
    Significant Investment, and May Continue to Invest, in Joint
    Ventures That We Do Not Control, which has been updated to
    reflect developments with our Denali joint venture;
    changes to the risk factor below entitled We May Be Unable
    to Obtain the Roaming Services We Need From Other Carriers to
    Remain Competitive, which has been updated to reflect
    additional risks related to our ability to provide roaming
    services; and
    changes to the risk factor below entitled If We Are Unable
    to Manage Our Planned Growth, Our Operations Could Be Adversely
    Impacted, which has been updated to reflect additional
    risks related to partnerships we may enter into or businesses we
    may acquire.  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
  We Face
    Increasing Competition Which Could Have a Material Adverse
    Effect on Demand for Cricket Service.
  voice-over-internet-protocol
 55




---



##### Table of Contents



T-Mobile T-Mobile
  and/or
   56




---



##### Table of Contents



General
    Economic Conditions May Adversely Affect Our Business, Financial
    Performance or Ability to Obtain Debt or Equity Financing on
    Reasonable Terms or at All.
        If We
    Experience Low Rates of Customer Acquisition or High Rates of
    Customer Turnover, Our Ability to Become Profitable Will
    Decrease.
   57




---



##### Table of Contents



We Have
    Made Significant Investment, and May Continue to Invest, in
    Joint Ventures That We Do Not Control.
    and/or
     58




---



##### Table of Contents



We May Be
    Unable to Obtain the Roaming Services We Need From Other
    Carriers to Remain Competitive.
        We
    Restated Certain of Our Prior Consolidated Financial Statements,
    Which Led to Additional Risks and Uncertainties, Including
    Shareholder Litigation.
  Form 10-K,
 59




---



##### Table of Contents



Our
    Business and Stock Price May Be Adversely Affected If Our
    Internal Controls Are Not Effective.
    Form 10-K Form 10-K
      Our
    Primary Business Strategy May Not Succeed in the Long
    Term.
   60




---



##### Table of Contents



We Expect
    to Incur Higher Operating Expenses in Recently Launched Markets,
    and We Could Incur Substantial Costs if We Were to Elect to
    Build Out Additional New Markets.
    and/or
    If We Are
    Unable to Manage Our Planned Growth, Our Operations Could Be
    Adversely Impacted.
   61




---



##### Table of Contents



Our
    Significant Indebtedness Could Adversely Affect Our Financial
    Health and Prevent Us From Fulfilling Our Obligations.
      
    make it more difficult for us to service all of 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; and
    place us at a disadvantage compared to our competitors that have
    less indebtedness.   62




---



##### Table of Contents



Despite
    Current Indebtedness Levels, We Are Permitted to Incur
    Additional Indebtedness. This Could Further Increase the Risks
    Associated With Our Leverage.
    and/or
    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.
    We or Our
    Joint Ventures May Be Unable to Refinance Our
    Indebtedness.
    Covenants
    in Our 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; 63




---



##### Table of Contents




    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
  Our
    Ability to Use Net Operating Loss Carryforwards to Reduce Future
    Tax Payments Could be Negatively Impacted if There is an
    Ownership Change as Defined Under Section 382
    of the Internal Revenue Code.
  20-year
     64




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A
    Significant Portion of Our Assets Consists of Goodwill, Wireless
    Licenses and Other 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.
        The Loss
    of Key Personnel and Difficulty Attracting and Retaining
    Qualified Personnel Could Harm Our Business.
   65




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Risks
    Associated With Wireless Devices 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 Products or
    Services Could Materially Adversely Affect Our Business, Results
    of Operations and Financial Condition.
   66




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System
    Failures, Security Breaches, Business Disruptions and
    Unauthorized Use or Interference with our Network or other
    Systems Could Result in Higher Churn, Reduced Revenue and
    Increased Costs, and Could Harm Our Reputation.
    We Are in
    the Process of Upgrading a Number of Significant Business
    Systems, including our Customer Billing System, and Any
    Unanticipated Difficulties, Delays or Interruptions with the
    Transition Could Negatively Impact Our Business.
  point-of-sale
  point-of-sale
 67




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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.
     68




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Action by
    Congress or Government Agencies May Increase Our Costs of
    Providing Service or Require Us to Change Our
    Services.
        non-U.S. citizens non-U.S. citizens
 69




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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.
     70




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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
  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. 71




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Declines
    in Our Operating or Financial Performance Could Result in an
    Impairment of Our
    Indefinite-Lived
    Assets, Including Goodwill.
  and/or
  We May
    Incur Higher Than Anticipated Intercarrier Compensation
    Costs.
     72




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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 Leap 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, changes in product
    and service offerings by us or our competitors, or changes in
    the prices charged for product and service offerings by us or
    our competitors;
    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 any of the indentures governing our secured or
    unsecured senior notes or convertible senior notes because of a
    covenant breach or otherwise;
    rumors or speculation in the marketplace regarding acquisitions
    or consolidation in our industry, including regarding
    transactions involving Leap; and
    market conditions in our industry and the economy as a whole. 73




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We Could
    Elect to Raise Additional Equity Capital Which Could 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.
       74




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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 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.     75




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Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Maximum Number (orTotal Number of

Approximate DollarTotal



Shares Purchased

Value) of SharesNumber

Average

as Part of Publicly

that May Yet Beof Shares

Price Paid

Announced Plans or

Purchased UnderPeriod

Purchased

Per Share

Programs

the Plans or ProgramsFebruary 28, 2010


4,054


$
14.27







March 25, 2010


5,018


$
16.40







Total Three Months Ended March 31, 2010


9,072











   Item 3.
    Defaults
    Upon Senior Securities.    Item 5.
    Other
    Information.    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. 76




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SIGNATURES
       By:
    /s/  S.
    Douglas Hutcheson       By:
    /s/  Walter
    Z. Berger    77