##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, 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 1934.  For the quarterly period ended March 31, 2005
  OR
  o
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934.  For 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

92121(Address of principal executive
    offices)

(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
   þ o o
  þ o




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##### Table of Contents



EXPLANATORY
    NOTE
    Form 10-Q Form 10-Q),
  Form 10-Q Form 10-Q,




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##### 



LEAP
    WIRELESS INTERNATIONAL, INC.
    QUARTERLY REPORT ON
    FORM 10-Q/A
    For the Quarter Ended March 31, 2005
  
  TABLE OF CONTENTS
  PagePART I  FINANCIAL
    INFORMATIONItem 1.

Financial
    Statements


1Item 2.

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


17Item 4.

Controls and
    Procedures


34PART II  OTHER
    INFORMATIONItem 6.

Exhibits


38EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 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)
  Successor CompanyMarch 31,


December 31,2005


2004(Unaudited)


(As Restated)(As Restated)


(See Note 3)(See Note 3)AssetsCash and cash equivalents

$
22,211


$
141,141Short-term investments


99,402



113,083Restricted cash, cash equivalents
    and short-term investments


30,903



31,427Inventories


28,982



25,816Other current assets


36,662



37,531Total current assets


218,160



348,998Property and equipment, net


548,166



575,486Wireless licenses


581,828



652,653Assets held for sale (Note 7)


88,057



Goodwill


453,956



457,637Other intangible assets, net


140,824



151,461Deposits for wireless licenses
    (Notes 7 and 8)


236,845



24,750Other assets


14,184



9,902Total assets

$
2,282,020


$
2,220,887Liabilities and
    Stockholders EquityAccounts payable and accrued
    liabilities

$
73,421


$
91,093Current maturities of long-term
    debt (Note 5)


5,000



40,373Other current liabilities


70,511



71,770Total current liabilities


148,932



203,236Long-term debt (Note 5)


493,750



371,355Other long-term liabilities


160,812



176,240Total liabilities


803,494



750,831Minority interest


1,000



Commitments and contingencies
    (Notes 2, 5 and 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, 60,000,000 shares issued and
    outstanding


6



6Additional paid-in capital


1,478,392



1,478,392Accumulated deficit


(875
)


(8,391
)Accumulated other comprehensive
    income


3



49Total stockholders equity


1,477,526



1,470,056Total liabilities and
    stockholders equity

$
2,282,020


$
2,220,887    1




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
    COMPREHENSIVE INCOME (LOSS)
    (UNAUDITED)
    (In thousands, except per share data)
  Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


2004(As Restated)(See Note 3)Revenues:Service revenues

$
185,981


$
169,051Equipment revenues


42,389



37,771Total revenues


228,370



206,822Operating expenses:Cost of service (exclusive of
    items shown separately below)


(50,197
)


(48,000
)Cost of equipment


(49,178
)


(43,755
)Selling and marketing


(22,995
)


(23,253
)General and administrative


(36,035
)


(38,610
)Depreciation and amortization


(48,104
)


(75,461
)Total operating expenses


(206,509
)


(229,079
)Operating income (loss)


21,861



(22,257
)Interest income


1,903



Interest expense (contractual
    interest expense was $66.4 million for the three months
    ended March 31, 2004)


(9,123
)


(1,823
)Other income (expense), net


(1,286
)


19Income (loss) before
    reorganization items and income taxes


13,355



(24,061
)Reorganization items, net






(2,025
)Income (loss) before income taxes


13,355



(26,086
)Income taxes


(5,839
)


(1,944
)Net income (loss)


7,516



(28,030
)Other comprehensive income (loss):Unrealized holding gains (losses)
    on investments, net


(46
)


265Comprehensive income (loss)

$
7,470


$
(27,765
)Net income (loss) per share:Basic

$
0.13


$
(0.48
)Diluted

$
0.12


$
(0.48
)Shares used in per share
    calculations:Basic


60,000



58,645Diluted


60,236



58,645    2




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LEAP
    WIRELESS INTERNATIONAL, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (UNAUDITED)
    (In thousands)
  Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


2004Operating activities:Net cash provided by operating
    activities

$
23,462


$
40,760Investing activities:Purchase of property and equipment


(24,487
)


(16,157
)Deposits for wireless licenses


(212,095
)


Purchase of investments


(69,025
)


(33,651
)Sale and maturity of investments


83,568



16,850Restricted cash, cash equivalents
    and investments, net


407



2,600Net cash used in investing
    activities


(221,632
)


(30,358
)Financing activities:Proceeds from long-term debt


500,000



Repayment of long-term debt


(413,979
)


Payment of debt financing costs


(6,781
)


Net cash provided by financing
    activities


79,240



Net increase (decrease) in cash
    and cash equivalents


(118,930
)


10,402Cash and cash equivalents at
    beginning of year


141,141



84,070Cash and cash equivalents at end
    of period

$
22,211


$
94,472    3




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
  Note 1.
    The
    Company and Nature of Business  ®
    Note 2.
    Reorganization
    and Fresh-Start Reporting  pay-in-kind Form 10-K Form 10-K
  SOP 90-7,
  SOP 90-7
 4




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SOP 90-7, Form 10-K Form 10-K
    Note 3.
    Basis of
    Presentation and Significant Accounting Policies  Interim
    Financial Statements
  Form 10-Q Form 10-K
  Principles
    of Consolidation
  No. 46-R,
  Restatement
    of Previously Reported Unaudited Interim Financial
    Information
   5




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##### Table of Contents




    The tax bases of several wireless licenses were inaccurately
    compiled by the Company during its adoption of fresh-start
    reporting as of July 31, 2004, which had the effect in the
    aggregate of understating wireless license deferred tax
    liabilities and overstating wireless license deferred tax
    assets. In addition, the misstatement of the tax bases of
    operating licenses with deferred tax liabilities had the net
    effect of overstating deferred income tax expense in the periods
    subsequent to July 31, 2004.
    The Company incorrectly accounted for tax-deductible goodwill
    upon the adoption of fresh-start reporting as of July 31,
    2004, which had the effect of understating deferred tax
    liabilities and understating deferred income tax expense in the
    periods subsequent to July 31, 2004.
    In connection with the adoption of fresh-start reporting as of
    July 31, 2004, the Company adopted the practice of netting
    deferred tax assets associated with wireless licenses against
    deferred tax liabilities associated with wireless licenses and,
    as a result, did not record valuation allowances on its wireless
    license deferred tax assets. However, because the Companys
    wireless licenses have indefinite useful lives, the deferred tax
    liabilities related to the licenses will not reverse until some
    indefinite future period when a license is either sold or
    written down due to impairment. As a result, the wireless
    license deferred tax liabilities may not be used to support the
    realization of the wireless license deferred tax assets and,
    thus, may not be used to offset the wireless license deferred
    tax assets. Accordingly, the Company has now determined that the
    netting of deferred tax assets associated with wireless licenses
    against deferred tax liabilities associated with wireless
    licenses was not appropriate. Instead, valuation allowances
    should have been recorded on the wireless license deferred tax
    assets.
    The Company incorrectly accounted for the release of valuation
    allowances on deferred tax assets recorded in fresh-start
    reporting. The Company previously concluded that there had been
    no release of fresh-start valuation allowances during the three
    months ended March 31, 2005. However, the reversal of
    deferred tax assets recorded in fresh-start reporting resulted
    in a release of the related fresh-start valuation allowances. As
    restated, the release of fresh-start valuation allowances is
    recorded as a reduction of goodwill and resulted in deferred
    income tax expense for the three months ended March 31,
    2005.    As of December 31,
    2004PreviouslyReported


Adjustment


As RestatedConsolidated Balance Sheet
    Data:Other current assets

$
35,144


$
2,387


$
37,531Goodwill

$
329,619


$
128,018


$
457,637Other current liabilities

$
71,965


$
(195
)

$
71,770Other long-term liabilities

$
45,846


$
130,394


$
176,240Accumulated deficit

$
(8,629
)

$
238


$
(8,391
)Accumulated other comprehensive
    income

$
81


$
(32
)

$
49   6




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As of and for the Three Months
    EndedMarch 31, 2005PreviouslyReported


Adjustment


As Restated(Unaudited)


(Unaudited)


(Unaudited)Consolidated Balance Sheet
    Data:Other current assets

$
34,275


$
2,387


$
36,662Goodwill

$
329,619


$
124,337


$
453,956Other current liabilities

$
70,753


$
(242
)

$
70,511Other long-term liabilities

$
28,951


$
131,861


$
160,812Retained earnings (accumulated
    deficit)

$
4,017


$
(4,892
)

$
(875
)Accumulated other comprehensive
    income

$
6


$
(3
)

$
3Consolidated Statement of
    Operations Data:Income tax expense

$
709


$
5,130


$
5,839Net income

$
12,646


$
(5,130
)

$
7,516Comprehensive income

$
12,652


$
(5,182
)

$
7,470Basic net income per share

$
0.21


$
(0.08
)

$
0.13Diluted net income per share

$
0.21


$
(0.09
)

$
0.12   Reorganization
    Items
    Restricted
    Cash, Cash Equivalents and Short-Term Investments
    Revenues
    and Cost of Revenues
  month-to-month
 7




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and/or
  Property
    and Equipment
      construction-in-progress construction-in-progress,
    Impairment
    of Long-Lived Assets
    Wireless
    Licenses
   8




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Goodwill
    and Other Intangible Assets
    Impairment
    of Indefinite-lived Intangible Assets
    Basic
    and Diluted Net Income (Loss) Per Share
      Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


2004Weighted average shares
    outstanding  basic earnings per share


60,000



58,645Effect of dilutive securities:Employee stock options


9



Warrants to MCG


227



Adjusted weighted average shares
    outstanding  diluted earnings per share


60,236



58,645     Stock-based
    Compensation
   9




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Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


2004(As Restated)As reported net income (loss)

$
7,516


$
(28,030
)Add back stock-based compensation
    benefit included in net loss






(654
)Less net pro forma compensation
    (expense) benefit


(1,526
)


6,677Pro forma net income (loss)

$
5,990


$
(22,007
)Basic net income (loss) per share:As reported

$
0.13


$
(0.48
)Pro forma

$
0.10


$
(0.38
)Diluted net income (loss) per
    share:As reported

$
0.12


$
(0.48
)Pro forma

$
0.10


$
(0.38
)     Three MonthsEndedMarch 31, 2005Risk free interest rate


3.48
%Expected dividend yield


Expected volatility


87
%Expected life (in years)


5.4   Reclassifications
   10




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##### Table of Contents



Note 4.
    Supplementary
    Financial Information  Supplementary
    Balance Sheet Information (in thousands):
  Successor CompanyMarch 31,


December 31,2005


2004(Unaudited)


(As Restated)(As Restated)Property and equipment, net:Network equipment

$
598,188


$
599,598Computer equipment and other


28,099



26,285Construction-in-progress


19,823



10,517646,110



636,400Accumulated depreciation


(97,944
)


(60,914
)$
548,166


$
575,486Accounts payable and accrued
    liabilities:Trade accounts payable

$
16,892


$
35,184Accrued payroll and related
    benefits


14,218



13,579Other accrued liabilities


42,311



42,330$
73,421


$
91,093Other current liabilities:Accrued taxes

$
41,709


$
49,665Deferred revenue


22,755



18,145Accrued interest






1,025Other


6,047



2,935$
70,511


$
71,770Other long-term liabilities:Deferred tax liabilities

$
147,786


$
145,673Other


13,026



30,567$
160,812


$
176,240   Supplementary
    Cash Flow Information (unaudited) (in thousands):
  Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


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

$
27,142


$
Cash paid for income taxes

$
52


$
8   Note 5.
    Debt  Credit
    Agreement
   11




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pay-in-kind
         12




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Senior
    Secured
    Pay-in-Kind
    Notes Issued Under Plan of Reorganization
  pay-in-kind pay-in-kind
  US
    Government Financing
    Note 6.
    Income
    Taxes  SOP 90-7,
  Note 7.
    Significant
    Acquisitions and Dispositions  40-day
   13




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Note 8.
    Commitments
    and Contingencies  40-day
      and/or
 14




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and/or
       15




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##### Table of Contents



Year Ended
    December 31:Remainder of 2005

$
41,8472006


36,7012007


21,2892008


18,7512009


16,303Thereafter


81,610Total

$
216,501  16




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  As used in this report, the terms we,
    our, ours and us refer to
    Leap Wireless International, Inc., a Delaware corporation, and
    its subsidiaries, unless the context suggests otherwise. Leap
    refers to Leap Wireless International, Inc., and Cricket refers
    to Cricket Communications, Inc. Unless otherwise specified,
    information relating to population and potential customers, or
    POPs, is based on 2005 population estimates provided by Claritas
    Inc.
  Form 10-K
    
    our ability to attract and retain customers in an extremely
    competitive marketplace;
    our ability to attract, motivate
    and/or
    retain an experienced workforce;
    changes in economic conditions that could adversely affect the
    market for wireless services;
    the impact of competitors initiatives;
    our ability to successfully implement product offerings and
    execute market expansion plans;
    failure of network systems to perform according to expectations;
    our ability to comply with the covenants in our senior secured
    credit facilities;
    failure of the Federal Communications Commission, or the FCC, to
    approve the transfers: (a) to a third party of the wireless
    licenses covered by the asset purchase agreement between Cricket
    Communications, Inc., the third party and the other parties to
    such agreement; and (b) to Alaska Native Broadband 1
    License, LLC, or ANB 1 License, of the wireless licenses
    for which it was the winning bidder in the FCCs
    Auction #58;
    global political unrest, including the threat or occurrence of
    war or acts of terrorism; and
    other factors detailed in the section entitled Risk
    Factors included in this report.    Overview
  Restatement of Previously Reported Unaudited Interim
    Consolidated Financial Information.
  Our Business.
 17




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Form 10-K
  Voluntary Reorganization Under
    Chapter 11.
  pay-in-kind pay-in-kind
  Fresh-Start Reporting. Position 90-7, SOP 90-7, SOP 90-7, Form 10-K Form 10-K
 18




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Form 10-K
  Results
    of Operations
    Financial
    Performance
    Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


2004(As Restated)Revenues:Service revenues

$
185,981


$
169,051Equipment revenues


42,389



37,771Total revenues


228,370



206,822Operating expenses:Cost of service (exclusive of
    items shown separately below)


(50,197
)


(48,000
)Cost of equipment


(49,178
)


(43,755
)Selling and marketing


(22,995
)


(23,253
)General and administrative


(36,035
)


(38,610
)Depreciation and amortization


(48,104
)


(75,461
)Total operating expenses


(206,509
)


(229,079
)Operating income (loss)


21,861



(22,257
)Interest income


1,903



Interest expense


(9,123
)


(1,823
)Other income (expense), net


(1,286
)


19Income (loss) before
    reorganization items and income taxes


13,355



(24,061
)Reorganization items, net






(2,025
)Income (loss) before income taxes


13,355



(26,086
)Income taxes


(5,839
)


(1,944
)Net income (loss)

$
7,516


$
(28,030
)  19




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Three
    Months Ended March 31, 2005 Compared to the Three Months
    Ended March 31, 2004
                 20




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SOP 90-7 pay-in-kind pay-in-kind pay-in-kind pay-in-kind
    pay-in-kind
  Performance
    Measures
  Regulation S-K
   21




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Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


2004ARPU

$
39.03


$
37.45CPGA

$
128


$
124CCU

$
18.94


$
20.08Churn


3.3
%


3.1
%  22




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##### Table of Contents



Reconciliation
    of tNon-GAAP Financial Measures
  Regulation S-K
    Successor


PredecessorCompany


CompanyThree Months Ended,March 31,2005


2004Selling and marketing expense

$
22,995


$
23,253Plus cost of equipment


49,178



43,755Less equipment revenue


(42,389
)


(37,771
)Less net loss on equipment
    transactions unrelated to initial customer acquisition


(4,012
)


(3,667
)Total costs used in the
    calculation of CPGA

$
25,772


$
25,570Gross customer additions


201,467



206,941CPGA

$
128


$
124     Successor


PredecessorCompany


CompanyThree Months EndedMarch 31,2005


2004Cost of service

$
50,197


$
48,000Plus general and administrative
    expense


36,035



38,610Plus net loss on equipment
    transactions unrelated to initial customer acquisition


4,012



3,667Total costs used in the
    calculation of CCU

$
90,244


$
90,277Weighted-average number of
    customers


1,588,372



1,498,449CCU

$
18.94


$
20.08   Liquidity
    and Capital Resources
  and/or
 23




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pay-in-kind
    pay-in-kind
  New
    Credit Agreement
      pay-in-kind
   24




---



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Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
           25




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Form 10-K
    Certain
    Contractual Obligations and Commitments
    Remainder


Year Ended
    December 31,Total


of 2005


2006


2007


2008


2009


ThereafterLong-term debt(1)

$
498,750


$
3,750


$
5,000


$
5,000


$
5,000


$
5,000


$
475,000Fresno license purchase


25,800



25,800



















Origination fees for ANB 1
    investment


5,280



5,280



















Operating leases


216,501



41,847



36,701



21,289



18,751



16,303



81,610Total

$
746,331


$
76,677


$
41,701


$
26,289


$
23,751


$
21,303


$
556,610     (1)
    
    Amounts shown for Crickets term loan under the new credit
    facilities executed on January 10, 2005 include principal
    only.  46-R:
  Off-Balance
    Sheet Arrangements
   26




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RISK
    FACTORS
  Risks
    Related to Our Business and Industry
  We Have
    Experienced Net Losses Since Inception And We May Not Be
    Profitable In The Future
    We Face
    Increasing Competition Which Could Have A Material Adverse
    Effect On Demand For The Cricket Service
        We May
    Not Be Successful In Increasing Our Customer Base Which Would
    Force Us To Change Our Business Plans And Financial Outlook And
    Would Likely Negatively Affect The Price Of Our Stock
   27




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We Have
    Identified Material Weaknesses In Our Internal Control Over
    Financial Reporting, And Our Business And Stock Price May Be
    Adversely Affected If We Do Not Remediate These Material
    Weaknesses, Or If We Have Other Material Weaknesses Or
    Significant Deficiencies In Our Internal Control Over Financial
    Reporting
    Our
    Internal Control Over Financial Reporting Was Not Effective as
    of December 31, 2005, and Our Business May Be Adversely
    Affected if We Are Not Able to Implement Effective Control Over
    Financial Reporting
  Form 10-K
  If We
    Experience High Rates Of Customer Turnover or Credit Card,
    Subscription or Dealer Fraud, Our Ability To Become Profitable
    Will Decrease
   28




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Our
    Primary Business Strategy May Not Succeed In The Long
    Term
    Our
    Indebtedness Could Adversely Affect Our Financial Health, And If
    We Fail To Maintain Compliance With The Covenants Under Our
    Senior Secured Credit Facilities, Any Such Failure Could
    Materially Adversely Affect Our Liquidity And Financial
    Condition
    
    Increase our vulnerability to general adverse economic and
    industry conditions;
    Require us to dedicate a substantial portion of our cash flows
    from operations to payments on our indebtedness, thereby
    reducing the availability of our cash flows to fund working
    capital, 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
    Reduce the value of stockholders investments in Leap
    because debt holders have priority regarding our assets in the
    event of a bankruptcy or liquidation.  Form 10-K Form 10-Q
  We Expect
    To Be Able To Incur Substantially More Debt; This Could Increase
    The Risks Associated With Our Leverage
   29




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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
    Risks
    Associated With Wireless Handsets Could Pose Product Liability,
    Health And Safety Risks That Could Adversely Affect Our
    Business
         30




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We Rely
    Heavily On Third Parties To Provide Specialized Services; A
    Failure By Such Parties To Provide The Agreed Services Could
    Materially Adversely Affect Our Business, Results Of Operations
    And Financial Condition
    We May Be
    Subject To Claims Of Infringement Regarding Telecommunications
    Technologies That Are Protected By Patents And Other
    Intellectual Property Rights
      Regulation By
    Government Agencies May Increase Our Costs Of Providing Service
    Or Require Us To Change Our Services
   31




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If Call
    Volume Under Our Cricket Flat Price Plans Exceeds Our
    Expectations, Our Costs Of Providing Service Could Increase,
    Which Could Have A Material Adverse Effect On Our Competitive
    Position
      Future
    Declines In The Fair Value Of Our Wireless Licenses Could Result
    In Future Impairment Charges
  fresh-start SOP 90-7,
    
    consolidation in the wireless industry allowed or required
    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 bidding activity in
    recently concluded or upcoming 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
 32




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##### Table of Contents



Because
    Our Consolidated Financial Statements Reflect Fresh-Start
    Reporting Adjustments Made Upon Our Emergence From Bankruptcy,
    Financial Information In Our Current And Future Financial
    Statements Will Not Be Comparable To Our Financial Information
    From Prior Periods
    Risks
    Related to Our Common Stock
  Our
    Shares Are Not Listed With the NASDAQ National Market Or A
    National Securities Exchange And May Have Limited
    Trading
    Our Stock
    Price May Be Volatile
    
    variations in our operating results;
    announcements of technological innovations, new services or
    service enhancements, strategic alliances or significant
    agreements by us or by our competitors;
    recruitment or departure of key personnel;
    changes in the estimates of our operating results or changes in
    recommendations by any securities analysts that elect to follow
    our common stock; and
    market conditions in our industry and the economy as a whole.  Our
    Directors and Affiliated Entities Have Substantial Influence
    Over Our Affairs
   33




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##### Table of Contents



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.    Item 4.
    Controls
    and Procedures.  (a) Evaluation of Disclosure Controls and Procedures
  Rule 13a-15(b), Form 10-Q/A,
    Form 10-K Form 10-Q/A,
 34




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Form 10-K Form 10-Q/A,
    Insufficient Staffing in the Accounting, Financial Reporting
    and Tax Functions.
    
    The Company hired a new vice president, chief accounting officer
    in May 2005. This individual is a certified public accountant
    with over 19 years of experience as an accounting
    professional, including over 14 years of Big Four public
    accounting experience. He possesses a strong background in
    technical accounting and the application of generally accepted
    accounting principles.
    The Company has hired a number of key accounting personnel since
    February 2005 that are appropriately qualified and experienced
    to identify and apply technical accounting literature, including
    several new directors and managers.      Errors in the Accounting for Income Taxes.
 35




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
    The Company has initiated a search for a qualified full-time tax
    department leader and continues to make this a priority. The
    Company has been actively recruiting for this position for
    several months, but has experienced difficulty in finding
    qualified applicants. Nevertheless, the Company is striving to
    fill the position as soon as possible.
    As part of its 2005 annual income tax provision, the Company
    improved its internal control over income tax accounting to
    establish detailed procedures for the preparation and review of
    the income tax provision, including review by the Companys
    chief accounting officer.
    The Company used experienced qualified consultants to assist
    management in interpreting and applying income tax accounting
    literature and preparing the Companys 2005 annual income
    tax provision, and will continue to use such consultants in the
    future to obtain access to as much income tax accounting
    expertise as it needs. The Company recognizes, however, that a
    full-time tax department leader with appropriate tax accounting
    expertise is important for the Company to maintain effective
    internal controls on an ongoing basis.
    As a result of the remediation initiatives described above, the
    Company identified certain of the errors that gave rise to the
    restatements of the consolidated financial statements for
    deferred income taxes.    Errors in the Application of Lease-Related Accounting
    Principles.
    
    reviewed the terms of over 2,500 cell-site, switch and other
    leases and re-assessed lease term assumptions to assure proper
    accounting for the rent expense and asset retirement obligations
    with respect to these leases;
    corrected the errors identified in its condensed consolidated
    interim financial statements for the one and seven month periods
    ended July 31, 2004 and the two month period ended
    September 30, 2004;
    changed its internal control over financial reporting to
    identify the procedures to follow for appropriate lease
    accounting; and
    educated accounting department personnel regarding correct lease
    accounting procedures.  Form 10-Q
  Fresh-Start Reporting Adjustments.
 36




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
    reviewed the fresh-start reporting adjustments made in
    connection with the Companys emergence from
    bankruptcy; and
    corrected the errors identified in its unaudited interim
    condensed consolidated financial statements for the one and
    seven month periods ended July 31, 2004.  Form 10-Q
  Inadequate Account Reconciliation
    Procedures.
    
    established and communicated additional procedures for the
    analysis, review and approval of account reconciliations;
    instituted procedures requiring supervisory personnel to review
    and approve all account reconciliations; and
    corrected the related errors identified in its condensed
    consolidated interim financial statements for the one and seven
    month periods ended July 31, 2004 and the two month period
    ended September 30, 2004.  Form 10-Q
  (b)
    Changes
    in Internal Control Over Financial Reporting   37




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PART II
    OTHER INFORMATION  Item 6.
    Exhibits.  Index to
    Exhibits:
  ExhibitNumber

Description of
    Exhibit10.3.7(1)

Amendment No. 7 to the
    Amended and Restated System Equipment Purchase Agreement by and
    between Cricket Communications, Inc. and Lucent Technologies
    Inc., effective as of January 1, 2005.10.7(2)#

Resignation Agreement by and among
    Leap Wireless International, Inc., Cricket Communications, Inc.
    and William M. Freeman, dated February 25, 2005.10.11.1(2)

Amendment, dated January 26,
    2005, to the Credit Agreement, dated as of December 22,
    2004, among Cricket Communications, Inc., Alaska Native
    Broadband 1 License, LLC, and Alaska Native Broadband 1,
    LLC.10.13(2)#

Amended and Restated Executive
    Employment Agreement among Leap Wireless International, Inc.,
    Cricket Communications, Inc., and S. Douglas Hutcheson, dated as
    of January 10,2005.10.14(3)

Credit Agreement, dated
    January 10, 2005, by and among Cricket Communications,
    Inc., Leap Wireless International, Inc., the lenders party
    thereto and Bank of America, N.A., as administrative agent and
    L/C issuer.10.14.1(3)

Security Agreement, dated
    January 10, 2005, by and among Cricket Communications,
    Inc., Leap Wireless International, Inc., the Subsidiary
    Guarantors and Bank of America, N.A., as collateral agent.10.14.2(3)

Parent Guaranty, dated
    January 10, 2005, made by Leap Wireless International, Inc.
    in favor of the secured parties under the Credit Agreement.10.14.3(3)

Subsidiary Guaranty, dated
    January 10, 2005, made by the Subsidiary Guarantors in
    favor of the secured parties under the Credit Agreement.10.14.4(4)

Letter from Cricket
    Communications, Inc. to the Lenders under the Credit Agreement,
    dated as of January  10, 2005,among the Company, Bank
    of America, N.A., Goldman Sachs Credit Partners L.P., Credit
    Suisse First Boston and the other lenders party thereto, dated
    April 12, 2005.10.15(2)#

Employment offer letter dated
    January 31, 2005, between Cricket Communications, Inc. and
    Albin F. Moschner.10.16.1(2)#

Emergence Bonus Agreement, dated
    February 17, 2005, between Leap Wireless International,
    Inc. and Glenn T. Umetsu.10.16.2(2)#

Emergence Bonus Agreement, dated
    February 17, 2005, between Leap Wireless International,
    Inc. and David B. Davis.10.16.3(2)#

Emergence Bonus Agreement, dated
    February 17, 2005, between Leap Wireless International,
    Inc. and Leonard C. Stephens.10.16.4(2)#

Emergence Bonus Agreement, dated
    February 17, 2005, between Leap Wireless International,
    Inc. and Robert J. Irving, Jr.10.17#**

2005 Cricket Non-Sales Bonus Plan.10.18#**

Employment Offer Letter dated
    March 24, 2005, between Cricket Communications, Inc. and
    Grant Burton.31.1*

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***

Certifications of Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.**
    
    Previously filed. 38




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***
    
    These certifications are being furnished solely to accompany
    this quarterly report pursuant to 18 U.S.C.
    § 1350, and are not being filed for purposes of
    Section 18 of the Securities Exchange Act of 1934, as
    amended, and are not to be incorporated by reference into any
    filing of Leap Wireless International, Inc., whether made before
    or after the date hereof, regardless of any general
    incorporation language in such filing.  
    
    Portions of this exhibit (indicated by asterisks)
    have been omitted pursuant to a request for confidential
    treatment pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934.#
    
    Management contract or compensatory plan or arrangement in
    which one or more executive officers or directors participates.  (1)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated December 31, 2004, filed with the SEC on
    March 28, 2005, and incorporated herein by reference.(2)
    
    Filed as an exhibit to Leaps Annual Report on
    Form 10-K,
    for the fiscal year ended December 31, 2004, filed with the
    SEC on May 16, 2005, and incorporated herein by reference.(3)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated January  10, 2005, filed with the SEC on
    January 14, 2005, and incorporated herein by reference.(4)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated April 12, 2005, as filed with the SEC on
    April 13, 2005, and incorporated herein by reference. 39




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SIGNATURES
  Form 10-Q/A
  LEAP WIRELESS INTERNATIONAL, INC.Date: April 19, 2006

By:

/s/  S.
    Douglas
    HutchesonS.
    Douglas Hutcheson
    Chief Executive Officer and President
    (Principal Executive Officer)Date: April 19, 2006

By:

/s/  Dean
    M.
    LuvisaDean
    M. Luvisa
    Vice President, Finance and
    Acting Chief Financial Officer
    (Principal Financial Officer)  40