##### Table of Contents



UNITED
    STATES
    SECURITIES AND EXCHANGE COMMISSIONWashington, 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
    September 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission File
    Number: 0-29752
  Leap Wireless International,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

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

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

92121(Zip Code)   (858) 882-6000
 (Registrants telephone
    number, including area code)
  Not applicable
 (Former name, former address and
    former fiscal year, if changed since last reported)
  þ o
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
  þ o




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##### Table of Contents



EXPLANATORY
    NOTE
  Form 10-K Form 10-Q Form 10-Q
    Form 10-Q, Form 10-K Form 10-Q




---



##### 



LEAP
    WIRELESS INTERNATIONAL, INC.
  QUARTERLY
    REPORT ON
    FORM 10-Q
    For the Quarter Ended September 30, 2007
  TABLE OF
    CONTENTS
   
 PagePART I  FINANCIAL
    INFORMATIONItem 1.


Financial Statements


1Item 2.


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


51Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


69Item 4.


Controls and Procedures


69Item 4T.


Controls and Procedures


71PART II  OTHER
    INFORMATIONItem 1.


Legal Proceedings


72Item 1A.


Risk Factors


75Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


94Item 3.


Defaults Upon Senior Securities


94Item 4.


Submission of Matters to a Vote of Security
    Holders


94Item 5.


Other Information


94Item 6.


Exhibits


94EXHIBIT 10.17EXHIBIT 31EXHIBIT 32




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##### Table of Contents



PART I
    FINANCIAL INFORMATION
  Item 1.
    Financial
    Statements.  LEAP
    WIRELESS INTERNATIONAL, INC.
  CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited and in thousands, except share amounts)
  September 30,


December 31,2007


2006(As Restated)(See Note 2)AssetsCash and cash equivalents

$
356,724


$
372,812Short-term investments


298,991



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


15,529



13,581Inventories


79,983



90,185Other current assets


56,966



52,981Total current assets


808,193



595,959Property and equipment, net


1,197,524



1,078,521Wireless licenses


1,861,399



1,563,958Assets held for sale






8,070Goodwill


425,782



425,782Other intangible assets, net


54,534



79,828Deposits for wireless licenses






274,084Other assets


48,913



58,745Total assets

$
4,396,345


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

$
207,858


$
317,093Current maturities of long-term debt


10,000



9,000Other current liabilities


128,264



84,675Total current liabilities


346,122



410,768Long-term debt


2,039,084



1,676,500Deferred tax liabilities


176,981



148,335Other long-term liabilities


55,451



47,608Total liabilities


2,617,638



2,283,211Minority interests


41,163



29,943Commitments and contingencies (Note 8)Stockholders equity:Preferred stock  authorized 10,000,000 shares;
    $.0001 par value, no shares issued and outstanding






Common stock  authorized 160,000,000 shares;
    $.0001 par value, 68,204,679 and 67,892,512 shares
    issued and outstanding at September 30, 2007 and
    December 31, 2006, respectively


7



7Additional paid-in capital


1,799,256



1,769,772Retained earnings (accumulated deficit)


(57,647
)


228Accumulated other comprehensive income (loss)


(4,072
)


1,786Total stockholders equity


1,737,544



1,771,793Total liabilities and stockholders equity

$
4,396,345


$
4,084,947    1




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##### Table of Contents



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


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(As Restated)





(As Restated)(See Note 2)





(See Note 2)Revenues:Service revenues

$
354,495


$
240,554


$
1,023,439


$
685,799Equipment revenues


55,161



52,712



177,556



166,776Total revenues


409,656



293,266



1,200,995



852,575Operating expenses:Cost of service (exclusive of items shown separately below)


(100,907
)


(71,575
)


(281,906
)


(189,040
)Cost of equipment


(97,218
)


(83,457
)


(310,701
)


(220,830
)Selling and marketing


(54,265
)


(42,948
)


(150,045
)


(107,992
)General and administrative


(68,686
)


(49,116
)


(200,327
)


(144,782
)Depreciation and amortization


(77,781
)


(56,409
)


(218,996
)


(163,782
)Impairment of assets


(1,368
)


(4,701
)


(1,368
)


(7,912
)Total operating expenses


(400,225
)


(308,206
)


(1,163,343
)


(834,338
)Gain (loss) on sale or disposal of assets


(38
)


21,990



902



21,990Operating income


9,393



7,050



38,554



40,227Minority interests in consolidated subsidiaries


182



418



2,434



209Equity in net loss of investee


(807
)






(807
)


Interest income


10,148



5,491



22,567



15,218Interest expense


(33,336
)


(15,753
)


(86,922
)


(31,607
)Other income (expense), net


(4,207
)


272



(4,844
)


(5,111
)Income (loss) before income taxes and cumulative effect of
    change in accounting principle


(18,627
)


(2,522
)


(29,018
)


18,936Income tax benefit (expense)


(24,662
)


1,721



(28,857
)


1,721Income (loss) before cumulative effect of change in accounting
    principle


(43,289
)


(801
)


(57,875
)


20,657Cumulative effect of change in accounting principle














623Net income (loss)

$
(43,289
)

$
(801
)

$
(57,875
)

$
21,280Basic earnings (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
(0.64
)

$
(0.01
)

$
(0.86
)

$
0.34Cumulative effect of change in accounting principle














0.01Basic earnings (loss) per share

$
(0.64
)

$
(0.01
)

$
(0.86
)

$
0.35Diluted earnings (loss) per share:Income (loss) before cumulative effect of change in accounting
    principle

$
(0.64
)

$
(0.01
)

$
(0.86
)

$
0.33Cumulative effect of change in accounting principle














0.01Diluted earnings (loss) per share

$
(0.64
)

$
(0.01
)

$
(0.86
)

$
0.34Shares used in per share calculations:Basic


67,194



60,295



67,064



60,286Diluted


67,194



60,295



67,064



61,866    2




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##### Table of Contents



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


2006(As Restated)(See Note 2)Operating activities:Net cash provided by operating activities

$
195,841


$
221,697Investing activities:Purchases of property and equipment


(345,195
)


(348,911
)Change in prepayments for purchases of property and equipment


12,010



2,770Purchases of and deposits for wireless licenses and spectrum
    clearing costs


(4,418
)


(307,128
)Proceeds from sale of wireless licenses and operating assets


9,500



27,968Purchases of investments


(518,916
)


(120,398
)Sales and maturities of investments


287,066



165,982Purchase of minority interest


(4,706
)


Purchase of membership units


(17,921
)


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


317



(3,443
)Net cash used in investing activities


(582,263
)


(583,160
)Financing activities:Proceeds from long-term debt


370,480



900,000Repayment of long-term debt


(6,750
)


(596,694
)Payment of debt issuance costs


(5,257
)


(8,058
)Payment of fees related to forward equity sale






(1,066
)Minority interest contributions


4,014



5,767Proceeds from issuance of common stock, net


7,847



725Net cash provided by financing activities


370,334



300,674Net decrease in cash and cash equivalents


(16,088
)


(60,789
)Cash and cash equivalents at beginning of period


372,812



293,073Cash and cash equivalents at end of period

$
356,724


$
232,284Supplementary cash flow information:Cash paid for interest

$
89,992


$
41,942Cash paid for income taxes

$
365


$
327    3




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
  Note 1.
    The
    Company  ® tm
    90-7, (SOP 90-7)
  Note 2.
    Restatement
    of Previously Reported Consolidated Financial
    Statements      
    Errors in the Timing of Recognition of Service Revenues
    (Revenue  Timing
    Adjustments)   The Company identified
    several timing errors in the recognition of service revenues
    that generally resulted from errors in the processes that the
    Company used to ensure that revenues were not recognized until
    service had 4




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##### Table of Contents




    Other Errors in the Recognition of Service Revenues
    (Other  Revenue
    Adjustments)  The Company incorrectly
    recognized revenue for a group of customers who voluntarily
    disconnected their service. For these customers, approximately
    one month of deferred revenue that was recorded when the
    customers monthly bills were generated was mistakenly
    recognized as revenue after their service was disconnected, due
    to the fact that one of the key reports used to validate that
    revenue is not recognized for customers who have not yet paid
    erroneously excluded this subset of disconnected customer
    balances. These customers comprised a small percentage of the
    Companys disconnected customers, and the error arose in
    connection with the Companys re-implementation of the
    pay-in-advance
    billing method for new and reactivating customers in May 2006.
    This error resulted in an overstatement of service revenues of
    $2.8 million, $2.0 million and $2.6 million in
    the year ended December 31, 2006 and the quarters ended
    March 31, 2007 and June 30, 2007, respectively. In
    addition, certain other errors were made in the recognition of
    revenue and revenue-related accounts, resulting in an
    understatement of service revenues of $0.8 million in the
    year ended December 31, 2005, an overstatement of
    service revenues of $2.3 million and $1.8 million in
    the year ended December 31, 2006 and the quarter ended
    March 31, 2007, respectively, and an understatement of
    service revenues of $0.3 million in the quarter ended
    June 30, 2007.
    Errors in the Classification of Certain Components of Service
    Revenues, Equipment Revenues and Operating Expenses
    (Reclassification Adjustments)  The
    Company identified errors relating to the classification of
    certain components of service revenues, equipment revenues and
    operating expenses. The Company incorrectly classified certain
    customer service fees as equipment revenue rather than service
    revenue. The Company incorrectly classified certain costs
    related to handset insurance purchased by some
    pay-in-arrears
    customers as a reduction of service revenues rather than as a
    cost of service. The Company incorrectly classified certain
    revenues received by the Company in connection with handsets
    sold to Company customers under insurance or other handset
    replacement programs as a reduction in handset costs rather than
    as equipment revenues. These classification errors resulted from
    deficiencies in certain account analyses that resulted in the
    Company incorrectly analyzing certain types of transactions for
    their classification impacts. The errors resulted in a net
    understatement of total revenues and understatement of operating
    expenses of $4.9 million, $4.2 million,
    $41.4 million, $51.7 million, $10.5 million and
    $9.9 million in the seven months ended July 31, 2004,
    the five months ended December 31, 2004, the years ended
    December 31, 2005 and 2006 and the quarters ended
    March 31, 2007 and June 30, 2007, respectively. These
    errors had no impact on operating income or net income.
    Other Non-Material Items (Other
    Adjustments)  The Company identified other
    errors that were not material, individually or in the aggregate,
    to its financial statements taken as a whole. However, because
    the Company is restating its financial statements for the
    effects of the items noted above, the Company revised its
    previously reported financial statements to correct all
    identified errors, including those that were not material. These
    items resulted in a net understatement of operating expenses of
    $0.5 million in the year ended December 31, 2005, a
    net overstatement of operating expenses of $1.1 million in
    the year ended December 31, 2006, a net overstatement
    of operating expenses of $0.5 million in the three months
    ended March 31, 2007 and a net understatement of operating
    expenses of $1.0 million in the three months ended
    June 30, 2007. 5




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##### Table of Contents




    Income Tax Adjustments   The State of Texas
    made certain technical corrections to the Texas Margins Tax
    (TMT) credit in June 2007 which confirmed that the Company was
    eligible for a $2.5 million TMT credit against future tax
    liabilities. The Company believes that it is more likely than
    not that the TMT credit will be realized and therefore a
    valuation allowance should not have been established for this
    item during the second quarter of 2007. Accordingly, the Company
    has recorded an adjustment to release that valuation allowance
    in the second quarter of 2007, which resulted in the realization
    of a $2.5 million income tax benefit and a
    $2.5 million increase in net income for such period.   6




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##### Table of Contents



June 30, 2007PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
327,328


$
(996
)

$
326,332Short-term investments


357,444







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


12,747







12,747Inventories


90,343







90,343Other current assets


46,613



995



47,608Total current assets


834,475



(1
)


834,474Property and equipment, net


1,144,131



2,271



1,146,402Wireless licenses


1,857,312







1,857,312Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


62,965







62,965Deposits for wireless licenses


758







758Other assets


49,556







49,556Total assets

$
4,381,093


$
(3,844
)

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

$
209,584


$
3,049


$
212,633Current maturities of long-term debt


9,000







9,000Other current liabilities


75,212



23,815



99,027Total current liabilities


293,796



26,864



320,660Long-term debt


2,042,249







2,042,249Deferred tax liabilities


155,684



(3,654
)


152,030Other long-term liabilities


50,041







50,041Total liabilities


2,541,770



23,210



2,564,980Minority interests


34,084



(136
)


33,948Stockholders equity:Preferred stock










Common stock


7







7Additional paid-in capital


1,791,961







1,791,961Retained earnings (accumulated deficit)


12,560



(26,918
)


(14,358
)Accumulated other comprehensive income


711







711Total stockholders equity


1,805,239



(26,918
)


1,778,321Total liabilities and stockholders equity

$
4,381,093


$
(3,844
)

$
4,377,249   7.1




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##### Table of Contents



Three Months Ended June 30, 2007Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
350,212


$
(2,213
)

$
(2,333
)

$
1,587


$



$



$
347,253Equipment revenues


42,997



(677
)






8,341











50,661Total revenues


393,209



(2,890
)


(2,333
)


9,928











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


(89,622
)










(233
)


(704
)






(90,559
)Cost of equipment


(81,052
)










(9,695
)


(71
)






(90,818
)Selling and marketing


(46,861
)














(150
)






(47,011
)General and administrative


(66,371
)














(36
)






(66,407
)Depreciation and amortization


(72,415
)






















(72,415
)Total operating expenses


(356,321
)










(9,928
)


(961
)






(367,210
)Operating income


36,888



(2,890
)


(2,333
)






(961
)






30,704Minority interests in consolidated subsidiaries


652















21







673Interest income


7,134























7,134Interest expense


(27,090
)






















(27,090
)Income before income taxes


17,584



(2,890
)


(2,333
)






(940
)






11,421Income tax expense


(14,337
)


















12,554



(1,783
)Net income

$
3,247


$
(2,890
)

$
(2,333
)

$



$
(940
)

$
12,554


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

$
0.05


$
(0.04
)

$
(0.04
)

$



$
(0.01
)

$
0.18


$
0.14Diluted earnings per share

$
0.05


$
(0.04
)

$
(0.04
)

$



$
(0.01
)

$
0.18


$
0.14Shares used in per share calculations:Basic


67,124























67,124Diluted


68,800























68,800   8




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##### Table of Contents



March 31, 2007PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
303,784


$
(3,463
)

$
300,321Short-term investments


25,432







25,432Restricted cash, cash equivalents and short-term investments


12,479







12,479Inventories


75,985







75,985Other current assets


55,038



184



55,222Total current assets


472,718



(3,279
)


469,439Property and equipment, net


1,107,314



2,324



1,109,638Wireless licenses


1,564,381







1,564,381Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


71,397







71,397Deposits for wireless licenses


274,084







274,084Other assets


39,054







39,054Total assets

$
3,960,844


$
(7,069
)

$
3,953,775Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
173,606


$
1,700


$
175,306Current maturities of long-term debt


9,000







9,000Other current liabilities


96,897



15,397



112,294Total current liabilities


279,503



17,097



296,600Long-term debt


1,674,250







1,674,250Deferred tax liabilities


141,439



9,258



150,697Other long-term liabilities


49,038







49,038Total liabilities


2,144,230



26,355



2,170,585Minority interests


23,849



(115
)


23,734Stockholders equity:Preferred stock










Common stock


7







7Additional paid-in capital


1,782,880







1,782,880Retained earnings (accumulated deficit)


9,313



(33,309
)


(23,996
)Accumulated other comprehensive income


565







565Total stockholders equity


1,792,765



(33,309
)


1,759,456Total liabilities and stockholders equity

$
3,960,844


$
(7,069
)

$
3,953,775   9




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##### Table of Contents



Three Months Ended March 31, 2007Revenue 


Other 








IncomePreviously


Timing


Revenue


Reclassification


Other


Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
326,809


$
(2,805
)

$
(3,765
)

$
1,452


$



$



$
321,691Equipment revenues


62,613



123







8,998











71,734Total revenues


389,422



(2,682
)


(3,765
)


10,450











393,425Operating expenses:Cost of service (exclusive of items shown separately below)


(90,949
)










(313
)


822







(90,440
)Cost of equipment


(112,482
)










(10,137
)


(46
)






(122,665
)Selling and marketing


(48,560
)














(209
)






(48,769
)General and administrative


(65,199
)














(35
)






(65,234
)Depreciation and amortization


(68,800
)






















(68,800
)Total operating expenses


(385,990
)










(10,450
)


532







(395,908
)Gain on sale or disposal of assets


940























940Operating income (loss)


4,372



(2,682
)


(3,765
)






532







(1,543
)Minority interests in consolidated subsidiaries


1,520















59







1,579Interest income


5,285























5,285Interest expense


(26,496
)






















(26,496
)Other expense, net


(637
)






















(637
)Loss before income taxes


(15,956
)


(2,682
)


(3,765
)






591







(21,812
)Income tax benefit (expense)


7,833



















(10,245
)


(2,412
)Net loss

$
(8,123
)

$
(2,682
)

$
(3,765
)

$



$
591


$
(10,245
)

$
(24,224
)Basic and diluted loss per share:Basic loss per share

$
(0.12
)

$
(0.04
)

$
(0.06
)

$



$
0.01


$
(0.15
)

$
(0.36
)Diluted loss per share

$
(0.12
)

$
(0.04
)

$
(0.06
)

$



$
0.01


$
(0.15
)

$
(0.36
)Shares used in per share calculations:Basic


66,870























66,870Diluted


66,870























66,870   10




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##### Table of Contents



December 31, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
374,939


$
(2,127
)

$
372,812Short-term investments


66,400







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


13,581







13,581Inventories


90,185







90,185Other current assets


53,527



(546
)


52,981Total current assets


598,632



(2,673
)


595,959Property and equipment, net


1,077,755



766



1,078,521Wireless licenses


1,563,958







1,563,958Assets held for sale


8,070







8,070Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


79,828







79,828Deposits for wireless licenses


274,084







274,084Other assets


58,745







58,745Total assets

$
4,092,968


$
(8,021
)

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

$
316,494


$
599


$
317,093Current maturities of long-term debt


9,000







9,000Other current liabilities


74,637



10,038



84,675Total current liabilities


400,131



10,637



410,768Long-term debt


1,676,500







1,676,500Deferred tax liabilities


149,728



(1,393
)


148,335Other long-term liabilities


47,608







47,608Total liabilities


2,273,967



9,244



2,283,211Minority interests


30,000



(57
)


29,943Stockholders equity:Preferred stock










Common stock


7







7Additional paid-in capital


1,769,772







1,769,772Retained earnings


17,436



(17,208
)


228Accumulated other comprehensive income


1,786







1,786Total stockholders equity


1,789,001



(17,208
)


1,771,793Total liabilities and stockholders equity

$
4,092,968


$
(8,021
)

$
4,084,947   11




---



##### Table of Contents



Year Ended December 31, 2006Revenue 


Other 








IncomePreviously


Timing


Revenue


Reclassification


Other


Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
972,781


$
(16,090
)

$
(5,056
)

$
4,730


$



$



$
956,365Equipment revenues


163,919



(28
)






46,931











210,822Total revenues


1,136,700



(16,118
)


(5,056
)


51,661











1,167,187Operating expenses:Cost of service (exclusive of items shown separately below)


(261,614
)










(3,157
)


609







(264,162
)Cost of equipment


(262,330
)










(48,504
)










(310,834
)Selling and marketing


(159,257
)






















(159,257
)General and administrative


(197,070
)














466







(196,604
)Depreciation and amortization


(226,747
)






















(226,747
)Impairment of assets


(7,912
)






















(7,912
)Total operating expenses


(1,114,930
)










(51,661
)


1,075







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


22,054























22,054Operating income


43,824



(16,118
)


(5,056
)






1,075







23,725Minority interests in consolidated subsidiaries


1,436















57







1,493Interest income


23,063























23,063Interest expense


(61,334
)






















(61,334
)Other expense, net


(2,650
)






















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


4,339



(16,118
)


(5,056
)






1,132







(15,703
)Income tax expense


(9,101
)


















(176
)


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


(4,762
)


(16,118
)


(5,056
)






1,132



(176
)


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


623























623Net loss

$
(4,139
)

$
(16,118
)

$
(5,056
)

$



$
1,132


$
(176
)

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

$
(0.08
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



$
(0.41
)Cumulative effect of change in accounting principle


0.01























0.01Basic loss per share

$
(0.07
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



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

$
(0.08
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



$
(0.41
)Cumulative effect of change in accounting principle


0.01























0.01Diluted loss per share

$
(0.07
)

$
(0.26
)

$
(0.08
)

$



$
0.01


$



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


61,645























61,645Diluted


61,645























61,645  12




---



##### Table of Contents



September 30, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
233,594


$
(1,310
)

$
232,284Short-term investments


47,096







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


10,009







10,009Inventories


50,937







50,937Other current assets


41,657



(824
)


40,833Total current assets


383,293



(2,134
)


381,159Property and equipment, net


870,779







870,779Wireless licenses


821,338







821,338Assets held for sale


20,354







20,354Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


88,260







88,260Deposits for wireless licenses


305,000







305,000Other assets


43,631







43,631Total assets

$
2,964,551


$
(8,248
)

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

$
238,369


$
(229
)

$
238,140Current maturities of long-term debt


9,000







9,000Other current liabilities


55,782



6,673



62,455Total current liabilities


303,151



6,444



309,595Long-term debt


888,750







888,750Deferred tax liabilities


138,755



(3,213
)


135,542Other long-term liabilities


44,582







44,582Total liabilities


1,375,238



3,231



1,378,469Minority interests


25,099



(556
)


24,543Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,505,217







1,505,217Retained earnings


56,788



(10,923
)


45,865Accumulated other comprehensive income


2,203







2,203Total stockholders equity


1,564,214



(10,923
)


1,553,291Total liabilities and stockholders equity

$
2,964,551


$
(8,248
)

$
2,956,303  13




---



##### Table of Contents



Three Months Ended September 30, 2006Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
249,081


$
(6,952
)

$
(2,788
)

$
1,213


$



$



$
240,554Equipment revenues


38,532



(129
)






14,309











52,712Total revenues


287,613



(7,081
)


(2,788
)


15,522











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


(70,722
)










(776
)


(77
)






(71,575
)Cost of equipment


(68,711
)










(14,746
)










(83,457
)Selling and marketing


(42,948
)






















(42,948
)General and administrative


(49,110
)














(6
)






(49,116
)Depreciation and amortization


(56,409
)






















(56,409
)Impairment of assets


(4,701
)






















(4,701
)Total operating expenses


(292,601
)










(15,522
)


(83
)






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


21,990























21,990Operating income


17,002



(7,081
)


(2,788
)






(83
)






7,050Minority interests in consolidated subsidiaries


(138
)














556







418Interest income


5,491























5,491Interest expense


(15,753
)






















(15,753
)Other income, net


272























272Income (loss) before income taxes


6,874



(7,081
)


(2,788
)






473







(2,522
)Income tax benefit


3,105



















(1,384
)


1,721Net income (loss)

$
9,979


$
(7,081
)

$
(2,788
)

$



$
473


$
(1,384
)

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

$
0.17


$
(0.12
)

$
(0.05
)

$



$
0.01


$
(0.02
)

$
(0.01
)Diluted earnings (loss) per share

$
0.16


$
(0.12
)

$
(0.04
)

$



$
0.01


$
(0.02
)

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


60,295























60,295Diluted


62,290







(1,995
)














60,295  14




---



##### Table of Contents



Nine Months Ended September 30, 2006Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
695,707


$
(11,002
)

$
(2,457
)

$
3,551


$



$



$
685,799Equipment revenues


126,448



8







40,320











166,776Total revenues


822,155



(10,994
)


(2,457
)


43,871











852,575Operating expenses:Cost of service (exclusive of items shown separately below)


(186,181
)










(2,719
)


(140
)






(189,040
)Cost of equipment


(179,678
)










(41,152
)










(220,830
)Selling and marketing


(107,992
)






















(107,992
)General and administrative


(145,268
)














486







(144,782
)Depreciation and amortization


(163,782
)






















(163,782
)Impairment of assets


(7,912
)






















(7,912
)Total operating expenses


(790,813
)










(43,871
)


346







(834,338
)Gain on sale or disposal of assets


21,990























21,990Operating income


53,332



(10,994
)


(2,457
)






346







40,227Minority interests in consolidated subsidiaries


(347
)














556







209Interest income


15,218























15,218Interest expense


(31,607
)






















(31,607
)Other expense, net


(5,111
)






















(5,111
)Income before income taxes and cumulative effect of change in
    accounting principle


31,485



(10,994
)


(2,457
)






902







18,936Income tax benefit


3,105



















(1,384
)


1,721Income before cumulative effect of change in accounting principle


34,590



(10,994
)


(2,457
)






902



(1,384
)


20,657Cumulative effect of change in accounting principle


623























623Net income

$
35,213


$
(10,994
)

$
(2,457
)

$



$
902


$
(1,384
)

$
21,280Basic earnings per share:Income before cumulative effect of change in accounting principle

$
0.57


$
(0.18
)

$
(0.04
)

$



$
0.01


$
(0.02
)

$
0.34Cumulative effect of change in accounting principle


0.01























0.01Basic earnings per share

$
0.58


$
(0.18
)

$
(0.04
)

$



$
0.01


$
(0.02
)

$
0.35Diluted earnings per share:Income before cumulative effect of change in accounting principle

$
0.56


$
(0.18
)

$
(0.04
)

$



$
0.01


$
(0.02
)

$
0.33Cumulative effect of change in accounting principle


0.01























0.01Diluted earnings per share

$
0.57


$
(0.18
)

$
(0.04
)

$



$
0.01


$
(0.02
)

$
0.34Shares used in per share calculations:Basic


60,286























60,286Diluted


61,866























61,866  15




---



##### Table of Contents



Nine Months Ended September 30, 2006PreviouslyReported


Adjustments


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

$
223,007


$
(1,310
)

$
221,697Investing activities:Purchases of property and equipment


(348,911
)






(348,911
)Change in prepayments for purchases of property and equipment


2,770







2,770Purchases of and deposits for wireless licenses and spectrum
    clearing costs


(307,128
)






(307,128
)Proceeds from sale of wireless licenses and operating assets


27,968







27,968Purchases of investments


(120,398
)






(120,398
)Sales and maturities of investments


165,982







165,982Changes in restricted cash, cash equivalents and short-term
    investments, net


(3,443
)






(3,443
)Net cash used in investing activities


(583,160
)






(583,160
)Financing activities:Proceeds from long-term debt


900,000







900,000Repayment of long-term debt


(596,694
)






(596,694
)Payment of debt issuance costs


(8,058
)






(8,058
)Payment of fees related to forward equity sale


(1,066
)






(1,066
)Minority interest contributions


5,767







5,767Proceeds from issuance of common stock, net


725







725Net cash provided by financing activities


300,674







300,674Net decrease in cash and cash equivalents


(59,479
)


(1,310
)


(60,789
)Cash and cash equivalents at beginning of period


293,073







293,073Cash and cash equivalents at end of period

$
233,594


$
(1,310
)

$
232,284Supplementary cash flow information:Cash paid for interest

$
41,942


$



$
41,942Cash paid for income taxes

$
327


$



$
327  16




---



##### Table of Contents



June 30, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
553,038


$
(762
)

$
552,276Short-term investments


57,382







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


9,758







9,758Inventories


63,820







63,820Other current assets


40,545



(1,328
)


39,217Total current assets


724,543



(2,090
)


722,453Property and equipment, net


780,852







780,852Wireless licenses


795,046







795,046Assets held for sale


38,658







38,658Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


96,690







96,690Other assets


35,852







35,852Total assets

$
2,903,537


$
(8,204
)

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

$
210,274


$
(1,760
)

$
208,514Current maturities of long-term debt


9,000







9,000Other current liabilities


53,007



(1,704
)


51,303Total current liabilities


272,281



(3,464
)


268,817Long-term debt


891,000







891,000Deferred tax liabilities


141,935



(4,593
)


137,342Other long-term liabilities


41,837



(4
)


41,833Total liabilities


1,347,053



(8,061
)


1,338,992Minority interests


4,151







4,151Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,500,154







1,500,154Retained earnings


46,809



(143
)


46,666Accumulated other comprehensive income


5,364







5,364Total stockholders equity


1,552,333



(143
)


1,552,190Total liabilities and stockholders equity

$
2,903,537


$
(8,204
)

$
2,895,333  17




---



##### Table of Contents



Three Months Ended June 30, 2006Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
230,786


$
(5,305
)

$
474


$
1,205


$



$



$
227,160Equipment revenues


37,068



137







13,094











50,299Total revenues


267,854



(5,168
)


474



14,299











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


(60,255
)










(984
)


(16
)






(61,255
)Cost of equipment


(52,081
)










(13,315
)










(65,396
)Selling and marketing


(35,942
)






















(35,942
)General and administrative


(46,576
)






















(46,576
)Depreciation and amortization


(53,337
)






















(53,337
)Impairment of assets


(3,211
)






















(3,211
)Total operating expenses


(251,402
)










(14,299
)


(16
)






(265,717
)Operating income


16,452



(5,168
)


474







(16
)






11,742Minority interests in consolidated subsidiaries


(134
)






















(134
)Interest income


5,533























5,533Interest expense


(8,423
)






















(8,423
)Other expense, net


(5,918
)






















(5,918
)Income before income taxes


7,510



(5,168
)


474







(16
)






2,800Income tax expense


























Net income

$
7,510


$
(5,168
)

$
474


$



$
(16
)

$



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

$
0.12


$
(0.08
)

$
0.01


$



$



$



$
0.05Diluted earnings per share

$
0.12


$
(0.08
)

$
0.01


$



$



$



$
0.05Shares used in per share calculations:Basic


60,282























60,282Diluted


61,757























61,757  18




---



##### Table of Contents



March 31, 2006PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
299,976


$
(381
)

$
299,595Short-term investments


65,975







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


10,687







10,687Inventories


39,710







39,710Other current assets


35,160



(282
)


34,878Total current assets


451,508



(663
)


450,845Property and equipment, net


642,858







642,858Wireless licenses


821,339







821,339Assets held for sale


15,135







15,135Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


105,123







105,123Other assets


35,651







35,651Total assets

$
2,503,510


$
(6,777
)

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

$
136,460


$
(10
)

$
136,450Current maturities of long-term debt


6,111







6,111Other current liabilities


53,266



(6,737
)


46,529Total current liabilities


195,837



(6,747
)


189,090Long-term debt


586,806







586,806Deferred tax liabilities


141,935



(4,593
)


137,342Other long-term liabilities


37,920



(4
)


37,916Total liabilities


962,498



(11,344
)


951,154Minority interests


2,463







2,463Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,494,974







1,494,974Retained earnings


39,299



4,567



43,866Accumulated other comprehensive income


4,270







4,270Total stockholders equity


1,538,549



4,567



1,543,116Total liabilities and stockholders equity

$
2,503,510


$
(6,777
)

$
2,496,733  19




---



##### Table of Contents



Three Months Ended March 31, 2006Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
215,840


$
1,255


$
(143
)

$
1,133


$



$



$
218,085Equipment revenues


50,848











12,917











63,765Total revenues


266,688



1,255



(143
)


14,050











281,850Operating expenses:Cost of service (exclusive of items shown separately below)


(55,204
)










(959
)


(47
)






(56,210
)Cost of equipment


(58,886
)










(13,091
)










(71,977
)Selling and marketing


(29,102
)






















(29,102
)General and administrative


(49,582
)














492







(49,090
)Depreciation and amortization


(54,036
)






















(54,036
)Total operating expenses


(246,810
)










(14,050
)


445







(260,415
)Operating income


19,878



1,255



(143
)






445







21,435Minority interests in consolidated subsidiaries


(75
)






















(75
)Interest income


4,194























4,194Interest expense


(7,431
)






















(7,431
)Other income, net


535























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


17,101



1,255



(143
)






445







18,658Income tax expense


























Income before cumulative effect of change in accounting principle


17,101



1,255



(143
)






445







18,658Cumulative effect of change in accounting principle


623























623Net income

$
17,724


$
1,255


$
(143
)

$



$
445


$



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

$
0.28


$
0.01


$



$



$
0.01


$



$
0.30Cumulative effect of change in accounting principle


0.01























0.01Basic earnings per share

$
0.29


$
0.01


$



$



$
0.01


$



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

$
0.28


$
0.01


$



$



$
0.01


$



$
0.30Cumulative effect of change in accounting principle


0.01























0.01Diluted earnings per share

$
0.29


$
0.01


$



$



$
0.01


$



$
0.31Shares used in per share calculations:Basic


61,203























61,203Diluted


61,961























61,961   20




---



##### Table of Contents



December 31, 2005PreviouslyReported


Adjustments


As Restated(Unaudited)AssetsCash and cash equivalents

$
293,073


$



$
293,073Short-term investments


90,981







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


13,759







13,759Inventories


37,320







37,320Other current assets


29,237



(519
)


28,718Total current assets


464,370



(519
)


463,851Property and equipment, net


621,946



261



622,207Wireless licenses


821,288







821,288Assets held for sale


15,145







15,145Goodwill


431,896



(6,114
)


425,782Other intangible assets, net


113,554







113,554Other assets


38,119







38,119Total assets

$
2,506,318


$
(6,372
)

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

$
167,770


$
661



168,431Current maturities of long-term debt


6,111







6,111Other current liabilities


49,627



(5,684
)


43,943Total current liabilities


223,508



(5,023
)


218,485Long-term debt


588,333







588,333Deferred tax liabilities


141,935



(4,593
)


137,342Other long-term liabilities


36,424







36,424Total liabilities


990,200



(9,616
)


980,584Minority interests


1,761







1,761Stockholders equity:Preferred stock










Common stock


6







6Additional paid-in capital


1,511,580



234



1,511,814Unearned share-based compensation


(20,942
)






(20,942
)Retained earnings


21,575



3,010



24,585Accumulated other comprehensive income


2,138







2,138Total stockholders equity


1,514,357



3,244



1,517,601Total liabilities and stockholders equity

$
2,506,318


$
(6,372
)

$
2,499,946   21




---



##### Table of Contents



Year Ended December 31, 2005Revenue 


Other 








IncomePreviously


Timing


Revenue


Reclassification


Other


Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
763,680


$
890


$
785


$
3,561


$



$



$
768,916Equipment revenues


150,983











37,872











188,855Total revenues


914,663



890



785



41,433











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


(200,430
)










(3,118
)










(203,548
)Cost of equipment


(192,205
)










(38,315
)










(230,520
)Selling and marketing


(100,042
)






















(100,042
)General and administrative


(159,249
)














(492
)






(159,741
)Depreciation and amortization


(195,462
)






















(195,462
)Impairment of assets


(12,043
)






















(12,043
)Total operating expenses


(859,431
)










(41,433
)


(492
)






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


14,587























14,587Operating income


69,819



890



785







(492
)






71,002Minority interests in consolidated subsidiaries


(31
)






















(31
)Interest income


9,957























9,957Interest expense


(30,051
)






















(30,051
)Other income, net


1,423























1,423Income before income taxes


51,117



890



785







(492
)






52,300Income tax expense


(21,151
)


















(464
)


(21,615
)Net income

$
29,966


$
890


$
785


$



$
(492
)

$
(464
)

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

$
0.50


$
0.02


$
0.01


$



$
(0.01
)

$
(0.01
)

$
0.51Diluted earnings per share

$
0.49


$
0.02


$
0.01


$



$
(0.01
)

$
(0.01
)

$
0.50Shares used in per share calculations:Basic


60,135























60,135Diluted


61,003























61,003   22




---



##### Table of Contents



Successor CompanyFive Months Ended December 31, 2004Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
285,647


$
2,291


$



$
1,417


$



$



$
289,355Equipment revenues


58,713











2,779











61,492Total revenues


344,360



2,291







4,196











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


(79,148
)










(1,138
)










(80,286
)Cost of equipment


(82,402
)










(3,058
)










(85,460
)Selling and marketing


(39,938
)






















(39,938
)General and administrative


(57,110
)






















(57,110
)Depreciation and amortization


(75,324
)






















(75,324
)Total operating expenses


(333,922
)










(4,196
)










(338,118
)Operating income


10,438



2,291



















12,729Interest income


1,812























1,812Interest expense


(16,594
)






















(16,594
)Other expense, net


(117
)






















(117
)Loss before income taxes


(4,461
)


2,291



















(2,170
)Income tax expense


(3,930
)






















(3,930
)Net loss

$
(8,391
)

$
2,291


$



$



$



$



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

$
(0.14
)

$
0.04


$



$



$



$



$
(0.10
)Diluted loss per share

$
(0.14
)

$
0.04


$



$



$



$



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


60,000























60,000Diluted


60,000























60,000   23




---



##### Table of Contents



Predecessor CompanySeven Months Ended July 31, 2004Revenue 


Other Previously


Timing


Revenue


Reclassification


Other


Income Tax


AsReported


Adjustments


Adjustments


Adjustments


Adjustments


Adjustments


Restated(Unaudited)Revenues:Service revenues

$
398,451


$
6,188


$



$
1,211


$



$



$
405,850Equipment revenues


83,196











3,710











86,906Total revenues


481,647



6,188







4,921











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


(113,988
)










(640
)










(114,628
)Cost of equipment


(97,160
)










(4,281
)










(101,441
)Selling and marketing


(51,997
)






















(51,997
)General and administrative


(81,514
)






















(81,514
)Depreciation and amortization


(178,120
)






















(178,120
)Total operating expenses


(522,779
)










(4,921
)










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


532























532Operating loss


(40,600
)


6,188



















(34,412
)Interest expense


(4,195
)






















(4,195
)Other expense, net


(293
)






















(293
)Loss before reorganization items and income taxes


(45,088
)


6,188



















(38,900
)Reorganization items, net


962,444























962,444Income before income taxes


917,356



6,188



















923,544Income tax expense


(4,166
)






















(4,166
)Net income

$
913,190


$
6,188


$



$



$



$



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

$
15.58


$
0.10


$



$



$



$



$
15.68Diluted earnings per share

$
15.58


$
0.10


$



$



$



$



$
15.68Shares used in per share calculations:Basic


58,623























58,623Diluted


58,623























58,623   Note 3.
    Basis of
    Presentation and Significant Accounting Policies  Basis
    of Presentation
  Form 10-Q
 24




---



##### Table of Contents



Revenues
    No. 00-21, No. 00-21, No. 00-21
      and/or
   25




---



##### Table of Contents



Costs
    and Expenses
    Cost of Service.
  Cost of Equipment.
  Selling and Marketing.
  General and Administrative.
  Cash
    and Cash Equivalents
    Short-Term
    Investments
       26




---



##### Table of Contents



Property
    and Equipment
      DepreciableLifeNetwork equipment:Switches


10Switch power equipment


15Cell site equipment, and site acquisitions and improvements


7Towers


15Antennae


3Computer hardware and software


3-5Furniture, fixtures, retail and office equipment


3-7   construction-in-progress construction-in-progress construction-in-progress
    Wireless
    Licenses
   27




---



##### Table of Contents



Goodwill
    and Other Intangible Assets
    Impairment
    of Indefinite-Lived Intangible Assets
         28




---



##### Table of Contents



Investments
    in Other Entities
    other-than-temporary,
  Concentrations
      Share-Based
    Compensation
      Three Months


Nine MonthsEnded September 30,


Ended September 30,2007


2006


2007


2006(As Restated)Cost of service

$
535


$
311


$
1,679


$
830Selling and marketing expenses


843



637



2,403



1,437General and administrative expenses


5,696



4,115



17,630



11,976Share-based compensation expense

$
7,074


$
5,063


$
21,712


$
14,243Share-based compensation expense per share:Basic

$
0.11


$
0.08


$
0.32


$
0.24Diluted

$
0.11


$
0.08


$
0.32


$
0.23  29




---



##### Table of Contents



Income
    Taxes
        SOP 90-7,
     30




---



##### Table of Contents



Comprehensive
    Income (Loss)
    Three Months


Nine MonthsEnded September 30,


Ended September 30,2007


2006


2007


2006(As Restated)





(As Restated)Net income (loss)

$
(43,289
)

$
(801
)

$
(57,875
)

$
21,280Other comprehensive income (loss):Net unrealized holding gains (losses) on investments, net of tax


27



(128
)


15



(170
)Unrealized gains (losses) on interest rate swaps


(4,809
)


(3,033
)


(5,873
)


235Comprehensive income (loss)

$
(48,071
)

$
(3,962
)

$
(63,733
)

$
21,345     September 30,


December 31,2007


2006Net unrealized holding losses on investments, net of tax

$
(1,373
)

$
(4
)Unrealized gains (losses) on interest rate swaps


(2,699
)


1,790Accumulated other comprehensive income (loss)

$
(4,072
)

$
1,786   Recent
    Accounting Pronouncements
       31




---



##### Table of Contents



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


December 31,2007


2006(As Restated)Other current assets:Accounts receivable, net(1)

$
25,490


$
38,257Prepaid expenses


30,597



11,808Other


879



2,916$
56,966


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

$
1,346,983


$
1,128,127Computer equipment and other


132,481



100,496Construction-in-progress


297,393



238,5791,776,857



1,467,202Accumulated depreciation


(579,333
)


(388,681
)$
1,197,524


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

$
102,093


$
218,020Accrued payroll and related benefits


27,302



29,450Other accrued liabilities


78,463



69,623$
207,858


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

$
42,625


$
32,929Deferred equipment revenue(3)


14,886



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


21,424



15,865Accrued interest


42,864



13,671Other


6,465



5,621$
128,264


$
84,675  32




---



##### Table of Contents



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


Nine MonthsEnded September 30,


Ended September 30,2007


2006


2007


2006(As Restated)





(As Restated)Basic weighted-average shares outstanding


67,194



60,295



67,064



60,286Effect of dilutive common share equivalents:Non-qualified stock options














147Restricted stock awards














933Warrants














367Common shares issuable upon physical settlement of forward sale
    agreements














133Diluted weighted-average shares outstanding


67,194



60,295



67,064



61,866     Note 6.
    Long-Term
    Debt    September 30,


December 31,2007


2006Term loans under senior secured credit facilities

$
928,750


$
935,500Senior notes


1,120,334



750,0002,049,084



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


(10,000
)


(9,000
)$
2,039,084


$
1,676,500  33




---



##### Table of Contents



Senior
    Secured Credit Facilities
  Cricket
    Communications
          Form 10-Q.
   34




---



##### Table of Contents



Form 10-K Form 10-K Form 10-Q
      LCW
    Operations
   35




---



##### Table of Contents



Senior
    Notes
           36




---



##### Table of Contents



90-day 90-day
  Note 7.
    Significant
    Acquisitions and Dispositions      Note 8.
    Commitments
    and Contingencies  Patent
    Litigation
  Method for Providing Wireless Communication Services
    and Network and System for Delivering Same,
 37




---



##### Table of Contents



Mobile Entertainment and
    Communication Device. System for Controlling the Supply of Utility Services
    to Consumers
   38




---



##### Table of Contents



Videophone
    Mailbox Interactive Facility System and Method of Processing
    Information Videophone Mailbox Interactive Facility System
    and Method of Processing Information
  Security Cellular
    Telecommunications System, Security Cellular
    Telecommunications System, Prepaid Security Cellular
    Telecommunications System.
  American
    Wireless Group
  and/or
  and/or
 39




---



##### Table of Contents



Securities
    Litigation
  and/or
    Spectrum
    Clearing Obligations
  and/or
  FCC
    Hurricane Katrina Order
   40




---



##### Table of Contents



back-up
  System
    Equipment Purchase Agreements
  and/or
  Other
    Note 9.
    Guarantor
    Financial Information       41




---



##### Table of Contents



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











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$



$
305,069


$
22,036


$
29,619


$



$
356,724Short-term investments






275,109







23,882







298,991Restricted cash, cash equivalents and short-term investments


7,319



7,541



639



30







15,529Inventories






77,299



1,996



688







79,983Other current assets


163



52,566



3,402



835







56,966Total current assets


7,482



717,584



28,073



55,054







808,193Property and equipment, net


49



1,000,178



145,351



51,946







1,197,524Investments in and advances to affiliates and consolidated
    subsidiaries


1,739,268



2,040,631



170,164







(3,950,063
)


Wireless licenses






14,452



1,522,848



324,099







1,861,399Goodwill






425,782















425,782Other intangible assets, net






54,313







221







54,534Deposits for wireless licenses






















Other assets


1,109



44,560



2,022



3,472



(2,250
)


48,913Total assets

$
1,747,908


$
4,297,500


$
1,868,458


$
434,792


$
(3,952,313
)

$
4,396,345Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
6,390


$
188,830


$
11,957


$
681


$



$
207,858Current maturities of long-term debt






9,000







1,000







10,000Intercompany payables


3,974



170,165



31,204







(205,343
)


Other current liabilities






117,754



8,825



2,749



(1,064
)


128,264Total current liabilities


10,364



485,749



51,986



4,430



(206,407
)


346,122Long-term debt






2,000,084



319,928



302,138



(583,066
)


2,039,084Deferred tax liabilities






7,705



169,276











176,981Other long-term liabilities






49,214



4,838



1,399







55,451Total liabilities


10,364



2,542,752



546,028



307,967



(789,473
)


2,617,638Minority interests






15,480











25,683



41,163Membership units subject to repurchase














28,002



(28,002
)


Stockholders equity


1,737,544



1,739,268



1,322,430



98,823



(3,160,521
)


1,737,544Total liabilities and stockholders equity

$
1,747,908


$
4,297,500


$
1,868,458


$
434,792


$
(3,952,313
)

$
4,396,345  42




---



##### Table of Contents



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











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
206


$
316,398


$
12,842


$
43,366


$



$
372,812Short-term investments






66,400















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


8,093



4,258



495



735







13,581Inventories






87,303



2,080



802







90,185Other current assets


105



50,307



2,097



472







52,981Total current assets


8,404



524,666



17,514



45,375







595,959Property and equipment, net


117



892,859



147,521



38,024







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


1,779,514



2,013,023



144,966







(3,937,503
)


Wireless licenses










1,527,574



36,384







1,563,958Assets held for sale










8,070











8,070Goodwill






425,782















425,782Other intangible assets, net






79,409







419







79,828Deposits for wireless licenses














274,084







274,084Other assets


815



45,616



11,259



1,827



(772
)


58,745Total assets

$
1,788,850


$
3,981,355


$
1,856,904


$
396,113


$
(3,938,275
)

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

$
6,792


$
274,764


$
25,306


$
10,231


$



$
317,093Current maturities of long-term debt






9,000















9,000Intercompany payables


10,265



144,965



11,844



9,893



(176,967
)


Other current liabilities






80,265



4,579



604



(773
)


84,675Total current liabilities


17,057



508,994



41,729



20,728



(177,740
)


410,768Long-term debt






1,636,500



277,955



271,443



(509,398
)


1,676,500Deferred tax liabilities






9,057



139,278











148,335Other long-term liabilities






42,467



4,155



986







47,608Total liabilities


17,057



2,197,018



463,117



293,157



(687,138
)


2,283,211Minority interests






4,821











25,122



29,943Stockholders equity


1,771,793



1,779,516



1,393,787



102,956



(3,276,259
)


1,771,793Total liabilities and stockholders equity

$
1,788,850


$
3,981,355


$
1,856,904


$
396,113


$
(3,938,275
)

$
4,084,947  43




---



##### Table of Contents



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











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
306,728


$
37,967


$
9,813


$
(13
)

$
354,495Equipment revenues






65,503



2,138



885



(13,365
)


55,161Other revenues










13,633







(13,633
)


Total revenues






372,231



53,738



10,698



(27,011
)


409,656Operating expenses:Cost of service (exclusive of items shown separately below)






(97,164
)


(13,522
)


(3,854
)


13,633



(100,907
)Cost of equipment






(98,097
)


(9,639
)


(2,847
)


13,365



(97,218
)Selling and marketing






(44,047
)


(7,976
)


(2,242
)






(54,265
)General and administrative


(263
)


(56,729
)


(9,725
)


(1,982
)


13



(68,686
)Depreciation and amortization


(22
)


(68,911
)


(6,620
)


(2,228
)






(77,781
)Impairment of assets






(383
)


(985
)










(1,368
)Total operating expenses


(285
)


(365,331
)


(48,467
)


(13,153
)


27,011



(400,225
)Loss on sale or disposal of assets






(38
)














(38
)Operating income (loss)


(285
)


6,862



5,271



(2,455
)






9,393Minority interests in consolidated subsidiaries






(548
)










730



182Equity in net loss of consolidated subsidiaries


(43,014
)


(19,419
)










62,433



Equity in net loss of investee






(807
)














(807
)Interest income


10



28,207



132



180



(18,381
)


10,148Interest expense






(33,350
)


(9,393
)


(8,185
)


17,592



(33,336
)Other expense, net






(4,207
)














(4,207
)Loss before income taxes


(43,289
)


(23,262
)


(3,990
)


(10,460
)


62,374



(18,627
)Income tax expense






(19,752
)


(4,910
)










(24,662
)Net loss

$
(43,289
)

$
(43,014
)

$
(8,900
)

$
(10,460
)

$
62,374


$
(43,289
)  44




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Nine Months Ended
    September 30, 2007
    (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
898,392


$
101,433


$
23,627


$
(13
)

$
1,023,439Equipment revenues






204,928



9,758



3,661



(40,791
)


177,556Other revenues






26



40,254







(40,280
)


Total revenues






1,103,346



151,445



27,288



(81,084
)


1,200,995Operating expenses:Cost of service (exclusive of items shown separately below)






(272,962
)


(38,677
)


(10,521
)


40,254



(281,906
)Cost of equipment






(308,270
)


(32,131
)


(11,091
)


40,791



(310,701
)Selling and marketing


(8
)


(121,779
)


(21,378
)


(6,880
)






(150,045
)General and administrative


(1,076
)


(166,842
)


(27,617
)


(4,831
)


39



(200,327
)Depreciation and amortization


(45
)


(194,057
)


(18,610
)


(6,284
)






(218,996
)Impairment of assets






(383
)


(985
)










(1,368
)Total operating expenses


(1,129
)


(1,064,293
)


(139,398
)


(39,607
)


81,084



(1,163,343
)Gain (loss) on sale or disposal of assets






(349
)


1,251











902Operating income (loss)


(1,129
)


38,704



13,298



(12,319
)






38,554Minority interests in consolidated subsidiaries






(1,097
)










3,531



2,434Equity in net loss of consolidated subsidiaries


(56,776
)


(64,222
)










120,998



Equity in net loss of investee






(807
)














(807
)Interest income


30



73,961



482



759



(52,665
)


22,567Interest expense






(85,456
)


(26,971
)


(25,783
)


51,288



(86,922
)Other expense, net






(4,832
)


(12
)










(4,844
)Loss before income taxes


(57,875
)


(43,749
)


(13,203
)


(37,343
)


123,152



(29,018
)Income tax expense






(13,027
)


(15,830
)










(28,857
)Net loss

$
(57,875
)

$
(56,776
)

$
(29,033
)

$
(37,343
)

$
123,152


$
(57,875
)  45




---



##### Table of Contents



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











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
227,089


$
11,846


$
1,619


$



$
240,554Equipment revenues






58,807



1,124



387



(7,606
)


52,712Other revenues






156



10,137







(10,293
)


Total revenues






286,052



23,107



2,006



(17,899
)


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






(71,216
)


(9,261
)


(1,235
)


10,137



(71,575
)Cost of equipment






(82,266
)


(8,380
)


(417
)


7,606



(83,457
)Selling and marketing






(33,169
)


(9,290
)


(489
)






(42,948
)General and administrative


(1,260
)


(42,152
)


(5,159
)


(701
)


156



(49,116
)Depreciation and amortization


(23
)


(50,068
)


(4,590
)


(1,728
)






(56,409
)Impairment of assets










(4,701
)










(4,701
)Total operating expenses


(1,283
)


(278,871
)


(41,381
)


(4,570
)


17,899



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






21,546



444











21,990Operating income (loss)


(1,283
)


28,727



(17,830
)


(2,564
)






7,050Minority interests in consolidated subsidiaries






(220
)










638



418Equity in net income (loss) of consolidated subsidiaries


472



(27,507
)










27,035



Interest income


10



11,045



204



158



(5,926
)


5,491Interest expense






(15,753
)


(5,926
)






5,926



(15,753
)Other income, net






272















272Loss before income taxes


(801
)


(3,436
)


(23,552
)


(2,406
)


27,673



(2,522
)Income tax (expense) benefit






3,908



(2,187
)










1,721Net income (loss)

$
(801
)

$
472


$
(25,739
)

$
(2,406
)

$
27,673


$
(801
)  46




---



##### Table of Contents



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











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
665,393


$
18,787


$
1,619


$



$
685,799Equipment revenues






173,888



4,070



387



(11,569
)


166,776Other revenues






364



29,631







(29,995
)


Total revenues






839,645



52,488



2,006



(41,564
)


852,575Operating expenses:Cost of service (exclusive of items shown separately below)






(201,494
)


(15,942
)


(1,235
)


29,631



(189,040
)Cost of equipment






(216,579
)


(15,403
)


(417
)


11,569



(220,830
)Selling and marketing






(88,974
)


(18,529
)


(489
)






(107,992
)General and administrative


(3,381
)


(126,369
)


(14,695
)


(701
)


364



(144,782
)Depreciation and amortization


(77
)


(155,042
)


(6,935
)


(1,728
)






(163,782
)Impairment of assets










(7,912
)










(7,912
)Total operating expenses


(3,458
)


(788,458
)


(79,416
)


(4,570
)


41,564



(834,338
)Gain on sale or disposal of assets






21,546



444











21,990Operating income (loss)


(3,458
)


72,733



(26,484
)


(2,564
)






40,227Minority interests in consolidated subsidiaries






(429
)










638



209Equity in net income (loss) of consolidated subsidiaries


24,711



(46,014
)










21,303



Interest income


27



24,235



388



158



(9,590
)


15,218Interest expense






(31,607
)


(9,590
)






9,590



(31,607
)Other expense, net






(5,109
)


(2
)










(5,111
)Income (loss) before income taxes and cumulative effect of
    change in accounting principle


21,280



13,809



(35,688
)


(2,406
)


21,941



18,936Income tax (expense) benefit






10,279



(8,558
)










1,721Income (loss) before cumulative effect of change in accounting
    principle


21,280



24,088



(44,246
)


(2,406
)


21,941



20,657Cumulative effect of change in accounting principle






623















623Net income (loss)

$
21,280


$
24,711


$
(44,246
)

$
(2,406
)

$
21,941


$
21,280  47




---



##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Nine Months Ended
    September 30, 2007
    (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


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

$
(979
)

$
198,438


$
5,339


$
(20,802
)

$
13,845


$
195,841Investing activities:Purchases of and changes in prepayments for property and
    equipment






(299,446
)


(16,516
)


(17,223
)






(333,185
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs






(890
)


(3,985
)


457







(4,418
)Proceeds from sale of wireless licenses and operating assets










9,500











9,500Purchases of investments






(518,916
)














(518,916
)Sales and maturities of investments






287,066















287,066Investments in and advances to affiliates and consolidated
    subsidiaries


(7,847
)


(4,706
)










7,847



(4,706
)Purchase of membership units






(17,921
)














(17,921
)Other


773



(282
)


(144
)


(30
)






317Net cash used in investing activities


(7,074
)


(555,095
)


(11,145
)


(16,796
)


7,847



(582,263
)Financing activities:Proceeds from long-term debt






370,480



15,000



6,000



(21,000
)


370,480Issuance of related party debt






(21,000
)










21,000



Repayment of long-term debt






(6,750
)














(6,750
)Payment of debt issuance costs






(5,249
)






(8
)






(5,257
)Capital contributions, net






7,847







17,859



(21,692
)


4,014Proceeds from issuance of common stock, net


7,847



















7,847Net cash provided by financing activities


7,847



345,328



15,000



23,851



(21,692
)


370,334Net increase (decrease) in cash and cash equivalents


(206
)


(11,329
)


9,194



(13,747
)






(16,088
)Cash and cash equivalents at beginning of period


206



316,398



12,842



43,366







372,812Cash and cash equivalents at end of period

$



$
305,069


$
22,036


$
29,619


$



$
356,724  48




---



##### Table of Contents



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











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


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

$
4,488


$
(19,641
)

$
233,253


$
3,597


$



$
221,697Investing activities:Purchases of and changes in prepayments for property and
    equipment






(238,908
)


(100,501
)


(6,732
)






(346,141
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs










(257,128
)


(50,000
)






(307,128
)Proceeds from sales of wireless licenses and operating assets






27,968















27,968Purchases of investments






(120,398
)














(120,398
)Sales and maturities of investments






165,982















165,982Investments in and advances to affiliates and consolidated
    subsidiaries


(725
)


(32,888
)










33,613



Other


(3,443
)


















(3,443
)Net cash used in investing activities


(4,168
)


(198,244
)


(357,629
)


(56,732
)


33,613



(583,160
)Financing activities:Proceeds from long-term debt






900,000



127,150



40,750



(167,900
)


900,000Issuance of related party debt






(167,900
)










167,900



Repayment of long-term debt






(596,694
)














(596,694
)Payment of debt issuance costs






(8,058
)














(8,058
)Payment of fees related to forward equity sale


(1,066
)


















(1,066
)Capital contributions, net






725



8,885



29,770



(33,613
)


5,767Proceeds from issuance of common stock, net


725



















725Net cash provided by (used in) financing activities


(341
)


128,073



136,035



70,520



(33,613
)


300,674Net increase (decrease) in cash and cash equivalents


(21
)


(89,812
)


11,659



17,385







(60,789
)Cash and cash equivalents at beginning of period


46



291,456



1,571











293,073Cash and cash equivalents at end of period

$
25


$
201,644


$
13,230


$
17,385


$



$
232,284  49




---



##### Table of Contents



Note 10.
    Subsequent
    Events  Amendment
    to Credit Agreement
  Form 10-Q.
  Form 10-K Form 10-K Form 10-Q
    Notice
    from The NASDAQ Stock Market
  Form 10-Q Form 10-Q,
 50




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  As used in this report, unless the context suggests
    otherwise, the terms we, our,
    ours, and us refer to Leap Wireless
    International, Inc., or Leap, and its subsidiaries, including
    Cricket Communications, Inc., or Cricket, and Alaska Native
    Broadband 1 License, LLC, or ANB 1 License. Leap, Cricket
    and ANB 1 License and their subsidiaries are sometimes
    collectively referred to herein as the Company.
    Unless otherwise specified, information relating to population
    and potential customers, or POPs, is based on 2007 population
    estimates provided by Claritas Inc.
  Form 10-K Form 10-Q, Form 10-K
  Cautionary
    Statement Regarding Forward-Looking Statements
    
    our ability to attract and retain customers in an extremely
    competitive marketplace;
    changes in economic conditions, including interest rates,
    consumer credit conditions, unemployment and other
    macro-economic factors that could adversely affect the market
    for wireless services;
    the impact of competitors initiatives;
    our ability to successfully implement product offerings and
    execute effectively on our planned coverage expansion, launches
    of markets we acquired in the Federal Communications
    Commissions, or FCCs, auction for Advanced Wireless
    Services, or Auction #66, market trials and introductions of
    higher-speed data services and other strategic activities;
    our ability to obtain roaming services from other carriers at
    cost-effective rates;
    delays in our market expansion plans, including delays resulting
    from any difficulties in funding such expansion through cash
    from operations, our revolving credit facility or additional
    capital, delays in the availability of network equipment and
    handsets for the AWS spectrum we acquired in Auction #66,
    or delays by existing U.S. government and other private
    sector wireless operations in clearing the AWS spectrum, some of
    which users are permitted to continue using the spectrum for
    several years;
    our ability to attract, motivate and retain an experienced
    workforce;
    our ability to comply with the covenants in our senior secured
    credit facilities, indenture and any future credit agreement,
    indenture or similar instrument;
    failure of our network or information technology systems to
    perform according to expectations; and
    other factors detailed in Part II 
    Item 1A. Risk Factors below.   51




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Overview
  Restatement
    of Previously Reported Consolidated Financial
    Information
    Company
    Overview
  ® tm
        and/or
 52




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##### Table of Contents



and/or
           53




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##### Table of Contents



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





% of 2006


Change fromService





Service


Prior Year2007


Revenues


2006


Revenues


Dollars


Percent(As Restated)Revenues:Service revenues

$
354,495






$
240,554






$
113,941



47.4
%Equipment revenues


55,161







52,712







2,449



4.6
%Total revenues


409,656







293,266







116,390



39.7
%Operating expenses:Cost of service


100,907



28.5
%


71,575



29.8
%


29,332



41.0
%Cost of equipment


97,218



27.4
%


83,457



34.7
%


13,761



16.5
%Selling and marketing


54,265



15.3
%


42,948



17.9
%


11,317



26.4
%General and administrative


68,686



19.4
%


49,116



20.4
%


19,570



39.8
%Depreciation and amortization


77,781



21.9
%


56,409



23.4
%


21,372



37.9
%Impairment of assets


1,368



0.4
%


4,701



2.0
%


(3,333
)


(70.9
)%Total operating expenses


400,225



112.9
%


308,206



128.1
%


92,019



29.9
%Gain (loss) on sale of wireless licenses and disposal of
    operating assets


(38
)


0.0
%


21,990



9.1
%


(22,028
)


(100.2
)%Operating income

$
9,393



2.6
%

$
7,050



2.9
%

$
2,343



33.2
%   Nine Months Ended September 30,% of 2007





% of 2006


Change fromService





Service


Prior Year2007


Revenues


2006


Revenues


Dollars


Percent(As Restated)Revenues:Service revenues

$
1,023,439






$
685,799






$
337,640



49.2
%Equipment revenues


177,556







166,776







10,780



6.5
%Total revenues


1,200,995







852,575







348,420



40.9
%Operating expenses:Cost of service


281,906



27.5
%


189,040



27.6
%


92,866



49.1
%Cost of equipment


310,701



30.4
%


220,830



32.2
%


89,871



40.7
%Selling and marketing


150,045



14.7
%


107,992



15.7
%


42,053



38.9
%General and administrative


200,327



19.6
%


144,782



21.1
%


55,545



38.4
%Depreciation and amortization


218,996



21.4
%


163,782



23.9
%


55,214



33.7
%Impairment of assets


1,368



0.1
%


7,912



1.2
%


(6,544
)


(82.7
)%Total operating expenses


1,163,343



113.7
%


834,338



121.7
%


329,005



39.4
%Gain on sale of wireless licenses and disposal of operating
    assets


902



0.1
%


21,990



3.2
%


(21,088
)


(95.9
)%Operating income

$
38,554



3.8
%

$
40,227



5.9
%

$
(1,673
)


(4.2
)%  54




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##### Table of Contents



ChangeFor the Three Months Ended September 30:

2007


2006


Amount


PercentGross customer additions


450,954



405,178



45,776



11.3
%Net customer additions


36,484



161,688



(125,204
)


(77.4
)%Weighted-average number of customers


2,654,555



1,870,204



784,351



41.9
%As of September
    30:Total customers


2,711,447



1,967,369



744,078



37.8
%   ChangeFor the Nine Months Ended September 30:

2007


2006


Amount


PercentGross customer additions


1,478,443



936,581



541,862



57.9
%Net customer additions


481,621



329,780



151,841



46.0
%Weighted-average number of customers


2,544,872



1,792,928



751,944



41.9
%   Three
    and Nine Months Ended September 30, 2007 Compared to Three
    and Nine Months Ended September 30, 2006
  Service
    Revenues
      Equipment
    Revenues
      Cost of
    Service
     55




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Cost of
    Equipment
      Selling
    and Marketing Expenses
      General
    and Administrative Expenses
      Depreciation
    and Amortization
   56




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Non-Operating
    Items
    Three Months Ended September 30,2007


2006


Change(As Restated)Minority interests in consolidated subsidiaries

$
182


$
418


$
(236
)Equity in net loss of investee


(807
)






(807
)Interest income


10,148



5,491



4,657Interest expense


(33,336
)


(15,753
)


(17,583
)Other income (expense), net


(4,207
)


272



(4,479
)Income tax (expense) benefit


(24,662
)


1,721



(26,383
)   Nine Months Ended September 30,2007


2006


Change(As Restated)Minority interests in consolidated subsidiaries

$
2,434


$
209


$
2,225Equity in net loss of investee


(807
)






(807
)Interest income


22,567



15,218



7,349Interest expense


(86,922
)


(31,607
)


(55,315
)Other expense, net


(4,844
)


(5,111
)


267Income tax (expense) benefit


(28,857
)


1,721



(30,578
)   Three
    and Nine Months Ended September 30, 2007 Compared to Three
    and Nine Months Ended September 30, 2006
  Minority
    Interests in Consolidated Subsidiaries
    Equity in
    Net Loss of Investee
    Interest
    Income
   57




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Interest
    Expense
      Other
    Income (Expense), Net
      Income
    Tax Expense
   58




---



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59




---



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Performance
    Measures
  Regulation S-K
       60




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pay-in-advance
    Three Months EndedSeptember 30,2007


2006(As Restated)ARPU

$
44.51


$
42.87CPGA

$
199


$
176CCU

$
21.23


$
21.04Churn


5.2
%


4.3
%   Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
 61




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Three Months Ended September 30,2007


2006(As Restated)Selling and marketing expense

$
54,265


$
42,948Less share-based compensation expense included in selling and
    marketing expense


(843
)


(637
)Plus cost of equipment


97,218



83,457Less equipment revenue


(55,161
)


(52,712
)Less net loss on equipment transactions unrelated to initial
    customer acquisition


(5,715
)


(1,804
)Total costs used in the calculation of CPGA

$
89,764


$
71,252Gross customer additions


450,954



405,178CPGA

$
199


$
176     Three Months Ended September 30,2007


2006(As Restated)Cost of service

$
100,907


$
71,575Plus general and administrative expense


68,686



49,116Less share-based compensation expense included in cost of
    service and general and administrative expense


(6,231
)


(4,426
)Plus net loss on equipment transactions unrelated to initial
    customer acquisition


5,715



1,804Total costs used in the calculation of CCU

$
169,077


$
118,069Weighted-average number of customers


2,654,555



1,870,204CCU

$
21.23


$
21.04   Liquidity
    and Capital Resources
  Overview
    and/or and/or
 62




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and/or
         63




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##### Table of Contents



Cash
    Flows
      
    During January 2007, we completed the sale of three wireless
    licenses that we were not using to offer commercial service for
    an aggregate sales price of $9.5 million.
    During March 2007, Cricket acquired the remaining 25% of the
    membership interests in ANB 1 for $4.7 million,
    following Alaska Native Broadband, LLCs exercise of its
    option to sell its entire 25% controlling interest in ANB 1
    to Cricket.
    During June and August 2007, we purchased approximately 20% of
    the outstanding membership units of a regional wireless service
    provider for an aggregate purchase price of $17.9 million.
    During the nine months ended September 30, 2007, we made
    investment purchases of $518.9 million from proceeds
    received from the issuances of our unsecured senior notes due
    2014, offset by sales or maturities of investments of
    $287.1 million.
    During the nine months ended September 30, 2007, we and our
    consolidated joint ventures purchased $345.2 million of
    property and equipment for the build-out of our new markets and
    the expansion and improvement of our existing markets.    
    During the nine months ended September 30, 2007, we issued
    an additional $350 million of unsecured senior notes due
    2014 at an issue price of 106% of the principal amount, which
    resulted in gross proceeds of $371 million, offset by
    payments of $6.8 million on our $895.5 million senior
    secured term loan. 64




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##### Table of Contents




    During the nine months ended September 30, 2007, we issued
    common stock upon the exercise of stock options held by our
    employees and upon employee purchases of common stock under our
    Employee Stock Purchase Plan, resulting in aggregate net
    proceeds of $7.8 million.  Senior
    Secured Credit Facilities
  Cricket
    Communications
          Form 10-Q.
  Form 10-K
 65




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##### Table of Contents



Form 10-K Form 10-Q
  LCW
    Operations
    Senior
    Notes
        90-day
 66




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##### Table of Contents



90-day
  System
    Equipment Purchase Agreements
  and/or
  Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  Capital
    Expenditures
      Other
    Acquisitions and Dispositions
      Short-Term
    Investments
   67




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##### Table of Contents



Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
         68




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##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.  Interest Rate Risk.
      Hedging Policy.
  Item 4.
    Controls
    and Procedures.  (a)
    Evaluation of Disclosure Controls and Procedures   69




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##### Table of Contents



Rule 13a-15(b), Form 10-Q, Rule 13a-15(e)
    Form 10-Q
      (b)
    Managements Remediation Initiatives    
    We performed a detailed review of our billing and revenue
    systems, and processes for recording revenue. We are
    implementing stronger account reconciliations and analyses
    surrounding our revenue recording processes which are designed
    to detect any material errors in the completeness and accuracy
    of the underlying data.
    We intend to design and implement automated enhancements to our
    billing and revenue systems to reduce the need for manual
    processes and estimates and thereby streamline the processes for
    ensuring revenue is recorded only when payment is received and
    services are provided. 70




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##### Table of Contents




    We intend to further improve our user acceptance testing related
    to system changes by ensuring the user acceptance testing
    encompasses a complete population of scenarios of possible
    customer activity.    (c)
    Changes in Internal Control over Financial Reporting    Item 4T.
    Controls
    and Procedures.   71




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PART II
  OTHER
    INFORMATION
  Item 1.
    Legal
    Proceedings.  Form 10-K Form 10-Q
  Patent
    Litigation
  Method for Providing Wireless
    Communication Services and Network and System for Delivering
    Same,
   72




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##### Table of Contents



Mobile
    Entertainment and Communication Device. System for
    Controlling the Supply of Utility Services to
    Consumers
    Videophone Mailbox
    Interactive Facility System and Method of Processing
    Information Videophone Mailbox Interactive Facility System
    and Method of Processing Information
  Security Cellular Telecommunications System, Security
    Cellular Telecommunications System, Prepaid
    Security Cellular Telecommunications System.
 73




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##### Table of Contents



American
    Wireless Group
  and/or
  and/or
    Securities
    Litigation
  and/or
   74




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Other
    Item 1A.
    Risk
    Factors.  Form 10-Q
  
    the Risk Factor below entitled Our Business Could Be
    Adversely Affected By General Economic Conditions and Financial
    and Lending Market Fluctuations, which has been included
    to reflect economic risks that could affect our business;
    the Risk Factor entitled We May Be Unable to Obtain the
    Roaming Services We Need From Other Carriers to Remain
    Competitive, which has updated to reflect additional risks
    related to a recent order and report issued by the FCC;
    the Risk Factor entitled We Have Filed
    Short-Form Applications To Bid In Auctions #73 and #76,
    Which May Restrict Certain Business and Commercial Arrangements
    That We May Enter Into, which has been added to describe
    risks related to our potential participation in Auctions #73 and
    #76;
    the Risk Factor entitled We Have Restated Our Prior
    Consolidated Financial Statements, Which May Lead to Additional
    Risks and Uncertainties, Including Shareholder Litigation,
    which has been added to describe certain risks related to the
    restatement of our financial statements;
    the Risk Factor entitled Our Business and Stock Price May
    Be Adversely Affected If Our Internal Controls Are Not
    Effective, which has been updated to reflect additional
    risks related to the restatement of our financial statements;
    the Risk Factor entitled We Expect to Incur Substantial
    Costs in Connection with the Build-Out of Our New Markets, and
    Any Delays or Cost Increases in the Build-Out of Our New Markets
    Could Adversely Affect Our Business, which has been
    updated to reflect additional risks related to spectrum clearing;
    the Risk Factor entitled Covenants in Our Existing
    Indenture and Credit Agreement and Other Credit Agreements or
    Indentures That We May Enter Into in the Future May Limit Our
    Ability to Operate Our Business, which has been updated to
    reflect risks related to the waiver we received from our lenders;
    the Risk Factor entitled The Loss of Key Personnel and
    Difficulty Attracting and Retaining Qualified Personnel Could
    Harm Our Business, which has been updated to reflect the
    appointment of S. Douglas Hutcheson as our acting chief
    financial officer;
    the Risk Factor entitled System Failures Could Result in
    Higher Churn, Reduced Revenue and Increased Costs, and Could
    Harm Our Reputation, which has been updated to reflect
    risks related to our billing system;
    the Risk Factor entitled We May Not Be Successful in
    Protecting and Enforcing Our Intellectual Property Rights,
    which has been updated to reflect the current status of certain
    litigation in which we are involved;
    the Risk Factor entitled We and Our Suppliers May Be
    Subject to Claims of Infringement Regarding Telecommunications
    Technologies That Are Protected By Patents and Other
    Intellectual Property Rights, 75




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##### Table of Contents




    the Risk Factor entitled We May Elect To Raise Additional
    Equity Capital Which May Dilute Existing Stockholders,
    which has been added to reflect additional risks regarding our
    potentially raising equity financing.  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
  If We
    Experience High Rates of Customer Turnover, Our Ability to
    Remain Profitable Will Decrease.
   76




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We Have
    Made Significant Investment, and Will Continue to Invest, in
    Joint Ventures That We Do Not Control.
      We Face
    Increasing Competition Which Could Have a Material Adverse
    Effect on Demand for the Cricket Service.
     77




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##### Table of Contents



and/or
  T-Mobile
  and/or
    Our
    Business Could Be Adversely Affected By General Economic
    Conditions and Financial and Lending Market
    Fluctuations.
   78




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##### Table of Contents



We May Be
    Unable to Obtain the Roaming Services We Need From Other
    Carriers to Remain Competitive.
        We Have
    Filed Short-Form Applications To Bid in Auctions #73 and
    #76, Which May Restrict Certain Business and Commercial
    Arrangements That We May Enter Into.
  and/or
   79




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##### Table of Contents



We Have
    Restated Our Prior Consolidated Financial Statements, Which May
    Lead to Additional Risks and Uncertainties, Including
    Shareholder Litigation.
  Form 10-Q
  and/or
  Our
    Business and Stock Price May Be Adversely Affected If Our
    Internal Controls Are Not Effective
         80




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##### Table of Contents



Our
    Primary Business Strategy May Not Succeed in the Long
    Term.
    We Expect
    to Incur Substantial Costs in Connection With the Build-Out of
    Our New Markets, and Any Delays or Cost Increases in the
    Build-Out of Our New Markets Could Adversely Affect Our
    Business.
    and/or
   81




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##### Table of Contents



If We Are
    Unable to Manage Our Planned Growth, Our Operations Could Be
    Adversely Impacted.
    Our
    Significant Indebtedness Could Adversely Affect Our Financial
    Health and Prevent Us From Fulfilling Our Obligations.
  and/or
    
    make it more difficult for us to satisfy our debt obligations;
    increase our vulnerability to general adverse economic and
    industry conditions;
    impair our ability to obtain additional financing in the future
    for working capital needs, capital expenditures, building out
    our network, acquisitions and general corporate purposes;
    require us to dedicate a substantial portion of our cash flows
    from operations to the payment of principal and interest on our
    indebtedness, thereby reducing the availability of our cash
    flows to fund working capital needs, capital expenditures,
    acquisitions and other general corporate purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate;
    place us at a disadvantage compared to our competitors that have
    less indebtedness; and
    expose us to higher interest expense in the event of increases
    in interest rates because indebtedness under our senior secured
    credit facility bears interest at a variable rate.   82




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##### Table of Contents



Despite
    Current Indebtedness Levels, We May Incur Substantially More
    Indebtedness. This Could Further Increase The Risks Associated
    With Our Leverage.
      To
    Service Our Indebtedness and Fund Our Working Capital and
    Capital Expenditures, We Will Require a Significant Amount of
    Cash. Our Ability to Generate Cash Depends on Many Factors
    Beyond Our Control.
    We May Be
    Unable to Refinance Our Indebtedness.
    Covenants
    in Our Existing Indenture and Credit Agreement and Other Credit
    Agreements or Indentures That We May Enter Into in The Future
    May Limit Our Ability To Operate Our Business.
    
    incur additional indebtedness;
    create liens or other encumbrances;
    place limitations on distributions from restricted subsidiaries;
    pay dividends, make investments, prepay subordinated
    indebtedness or make other restricted payments;
    issue or sell capital stock of restricted subsidiaries;
    issue guarantees;
    sell or otherwise dispose of all or substantially all of our
    assets;
    enter into transactions with affiliates; and
    make acquisitions or merge or consolidate with another entity. 83




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##### Table of Contents



Form 10-Q Form 10-K
  Form 10-K Form 10-Q
  Rises in
    Interest Rates Could Adversely Affect Our Financial
    Condition.
    A
    Majority of our Assets Consists of Goodwill and Other Tangible
    Assets.
   84




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##### Table of Contents



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.
     85




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##### Table of Contents



We Rely
    Heavily on Third Parties to Provide Specialized Services; a
    Failure by Such Parties to Provide the Agreed Upon Services
    Could Materially Adversely Affect Our Business, Results of
    Operations and Financial Condition.
    System
    Failures Could Result in Higher Churn, Reduced Revenue and
    Increased Costs, and Could Harm Our Reputation.
     86




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##### Table of Contents



We May
    Not Be Successful in Protecting and Enforcing Our Intellectual
    Property Rights.
    Method for Providing Wireless Communication Services
    and Network and System for Delivering Same,
  Operations Method for Providing Wireless Communication
    Services and Network and System for Delivering Same
   87




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##### Table of Contents



We and
    Our Suppliers May Be Subject to Claims of Infringement Regarding
    Telecommunications Technologies That Are Protected By Patents
    and Other Intellectual Property Rights.
    Mobile Entertainment and
    Communication Device System for Controlling the Supply of Utility Services
    to Consumers
 88




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##### Table of Contents



Videophone
    Mailbox Interactive Facility System and Method of Processing
    Information Videophone Mailbox Interactive Facility System
    and Method of Processing Information
  Security
    Cellular Telecommunications System, Security Cellular
    Telecommunications System, Prepaid Security Cellular
    Telecommunications System.
    Regulation
    by Government Agencies May Increase Our Costs of Providing
    Service or Require Us to Change Our Services.
  back-up
 89




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##### Table of Contents



If Call
    Volume Under Our Cricket and Jump Mobile Services Exceeds Our
    Expectations, Our Costs of Providing Service Could Increase,
    Which Could Have a Material Adverse Effect on Our Competitive
    Position.
    We May Be
    Unable to Acquire Additional Spectrum in the Future at a
    Reasonable Cost or on a Timely Basis.
    Our
    Wireless Licenses are Subject to Renewal and Potential
    Revocation in the Event that We Violate Applicable
    Laws.
  10-year 15-year
 90




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##### Table of Contents



Future
    Declines in the Fair Value of Our Wireless Licenses Could Result
    in Future Impairment Charges.
      
    consolidation in the wireless industry allows or requires
    carriers to sell significant portions of their wireless spectrum
    holdings;
    a sudden large sale of spectrum by one or more wireless
    providers occurs; or
    market prices decline as a result of the sale prices in FCC
    auctions.      Declines
    in Our Operating Performance Could Ultimately Result in an
    Impairment of Our Indefinite-Lived Assets, Including Goodwill,
    or Our Long-Lived Assets, Including Property and
    Equipment.
  and/or and/or
  We May
    Incur Higher Than Anticipated Intercarrier Compensation
    Costs.
   91




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##### Table of Contents



If We
    Experience High Rates of Credit Card, Subscription or Dealer
    Fraud, Our Ability to Generate Cash Flow Will
    Decrease.
    Risks
    Related to Ownership of Our Common Stock
  Our Stock
    Price May Be Volatile, and You May Lose All or Some of Your
    Investment.
    
    variations in our operating results or those of our competitors;
    announcements of technological innovations, new services or
    service enhancements, strategic alliances or significant
    agreements by us or by our competitors;
    entry of new competitors into our markets;
    significant developments with respect to our intellectual
    property or related litigation;
    the announcements and bidding of auctions for new spectrum;
    recruitment or departure of key personnel;
    changes in the estimates of our operating results or changes in
    recommendations by any securities analysts that elect to follow
    Leap common stock; and
    market conditions in our industry and the economy as a whole.  We May
    Elect To Raise Additional Equity Capital Which May Dilute
    Existing Stockholders.
  and/or and/or
  The
    16,460,077 Shares of Leap Common Stock Registered for
    Resale By Our Shelf Registration Statement May Adversely Affect
    The Market Price of Leaps Common Stock.
   92




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##### Table of Contents



Your
    Ownership Interest in Leap Will Be Diluted Upon Issuance of
    Shares We Have Reserved for Future Issuances, and Future
    Issuances or Sales of Such Shares May Adversely Affect The
    Market Price of Leaps Common Stock.
        Our
    Directors and Affiliated Entities Have Substantial Influence
    over Our Affairs.
    Provisions
    in Our Amended and Restated Certificate of Incorporation and
    Bylaws or Delaware Law Might Discourage, Delay or Prevent a
    Change in Control of Our Company or Changes in Our Management
    and, Therefore, Depress The Trading Price of Our Common
    Stock.
    
    require super-majority voting to amend some provisions in our
    amended and restated certificate of incorporation and bylaws; 93




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
    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 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Item 3.
    Defaults
    Upon Senior Securities.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.    Item 5.
    Other
    Information.    Item 6.
    Exhibits.  Index to Exhibits:
  ExhibitNumber

Description of Exhibit10.17*

Resignation Agreement, dated September 6, 2007, by and
    between Leap Wireless International, Inc., Cricket
    Communications, Inc. and Amin Khalifa.31*

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

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.     *
    
    Filed herewith.**
    
    This certification is being furnished solely to accompany this
    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. 94




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##### Table of Contents



SIGNATURES
       By:
    /s/  S.
    Douglas Hutcheson   
 95