##### Table of Contents



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

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934.For the quarterly period ended
    March 31, 2007ORo

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

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

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




---



##### 



LEAP
    WIRELESS INTERNATIONAL, INC.
    QUARTERLY REPORT ON
    FORM 10-Q
    For the Quarter Ended March 31, 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


21Item 3.

Quantitative and
    Qualitative Disclosures About Market Risk


30Item 4.

Controls and
    Procedures


30PART II 
    OTHER INFORMATIONItem 1.

Legal
    Proceedings


31Item 1A.

Risk
    Factors


32Item 2.

Unregistered Sales
    of Equity Securities and Use of Proceeds


47Item 3.

Defaults Upon
    Senior Securities


47Item 4.

Submission of
    Matters to a Vote of Security Holders


47Item 5.

Other
    Information


47Item 6.

Exhibits


48EXHIBIT 10.4.6EXHIBIT 10.5.2EXHIBIT 10.11.19Exhibit 10.13EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32




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##### Table of Contents



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


December 31,2007


2006(Unaudited)AssetsCash and cash equivalents

$
303,784


$
374,939Short-term investments


25,432



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


12,479



13,581Inventories


75,985



90,185Other current assets


55,038



53,527Total current assets


472,718



598,632Property and equipment, net


1,107,314



1,077,755Wireless licenses


1,564,381



1,563,958Assets held for sale






8,070Goodwill


431,896



431,896Other intangible assets, net


71,397



79,828Deposits for wireless licenses


274,084



274,084Other assets


39,054



58,745Total assets

$
3,960,844


$
4,092,968Liabilities and
    Stockholders EquityAccounts payable and accrued
    liabilities

$
173,606


$
316,494Current maturities of long-term
    debt


9,000



9,000Other current liabilities


96,897



74,637Total current liabilities


279,503



400,131Long-term debt


1,674,250



1,676,500Deferred tax liabilities


141,439



149,728Other long-term liabilities


49,038



47,608Total liabilities


2,144,230



2,273,967Minority interests


23,849



30,000Commitments and contingencies
    (Note 7)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,
    68,051,029 and 67,892,512 shares issued and outstanding at
    March 31, 2007 and December 31, 2006, respectively


7



7Additional paid-in capital


1,782,880



1,769,772Retained earnings


9,313



17,436Accumulated other comprehensive
    income


565



1,786Total stockholders equity


1,792,765



1,789,001Total liabilities and
    stockholders equity

$
3,960,844


$
4,092,968    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 March 31,2007


2006Revenues:Service revenues

$
326,809


$
215,840Equipment revenues


62,613



50,848Total revenues


389,422



266,688Operating expenses:Cost of service (exclusive of
    items shown separately below)


(90,949
)


(55,204
)Cost of equipment


(112,482
)


(58,886
)Selling and marketing


(48,560
)


(29,102
)General and administrative


(65,199
)


(49,582
)Depreciation and amortization


(68,800
)


(54,036
)Total operating expenses


(385,990
)


(246,810
)Net gain on sale of wireless
    licenses and disposal of operating assets


940



Operating income


4,372



19,878Minority interests in consolidated
    subsidiaries


1,520



(75
)Interest income


5,285



4,194Interest expense


(26,496
)


(7,431
)Other income (expense), net


(637
)


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


(15,956
)


17,101Income tax benefit


7,833



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


(8,123
)


17,101Cumulative effect of change in
    accounting principle






623Net income (loss)

$
(8,123
)

$
17,724Basic earnings (loss) per share:Earnings (loss) before cumulative
    effect of change in accounting principle

$
(0.12
)

$
0.28Cumulative effect of change in
    accounting principle






0.01Basic earnings (loss) per share

$
(0.12
)

$
0.29Diluted earnings (loss) per share:Earnings (loss) before cumulative
    effect of change in accounting principle

$
(0.12
)

$
0.28Cumulative effect of change in
    accounting principle






0.01Diluted earnings (loss) per share

$
(0.12
)

$
0.29Shares used in per share
    calculations:Basic


66,870



61,203Diluted


66,870



61,961    2




---



##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited
    and in thousands)
  Three Months Ended March 31,2007


2006Operating activities:Net cash provided by operating
    activities

$
4,900


$
38,290Investing activities:Purchases of property and equipment


(131,737
)


(60,894
)Change in prepayments for
    purchases of property and equipment


7,409



4,573Purchases of and deposits for
    wireless licenses


(423
)


(91
)Proceeds from sale of wireless
    licenses


9,500



Purchases of investments


(42,727
)


(46,865
)Sales and maturities of investments


84,293



72,657Purchase of minority interest


(4,706
)


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


1,102



(50
)Net cash used in investing
    activities


(77,289
)


(30,670
)Financing activities:Repayment of long-term debt


(2,250
)


(1,527
)Payment of debt issuance costs


(881
)


(91
)Minority interest contributions






668Proceeds from issuance of common
    stock, net


4,365



233Net cash provided by (used in)
    financing activities


1,234



(717
)Net increase (decrease) in cash
    and cash equivalents


(71,155
)


6,903Cash and cash equivalents at
    beginning of period


374,939



293,073Cash and cash equivalents at end
    of period

$
303,784


$
299,976Supplementary cash flow
    information:Cash paid for interest

$
18,373


$
11,098Cash paid for income taxes

$
332


$
168    3




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
  Note 1.
    The
    Company  ® TM
      Note 2.
    Basis of
    Presentation and Significant Accounting Policies  Basis
    of Presentation
  Form 10-Q Form 10-K
    Revenues
  month-to-month
 4




---



##### Table of Contents



and/or
  Costs
    and Expenses
    Cost of Service.
  Cost of Equipment.
  Selling and Marketing.
  General and Administrative.
  Property
    and Equipment
   5




---



##### Table of Contents



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,
    Wireless
    Licenses
    Concentrations
    Share-Based
    Compensation
   6




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##### Table of Contents



Three MonthsEnded March 31,2007


2006Cost of service

$
679


$
258Selling and marketing expenses


1,001



327General and administrative expenses


7,063



4,141Share-based compensation expense
    before tax


8,743



4,726Related income tax benefit


(3,432
)


Share-based compensation expense,
    net of tax

$
5,311


$
4,726Net share-based compensation
    expense per share:Basic

$
0.08


$
0.08Diluted

$
0.08


$
0.08   Income
    Taxes
        90-7,
   7




---



##### Table of Contents



Comprehensive
    Income (Loss)
    Three MonthsEnded March 31,2007


2006Net income (loss)

$
(8,123
)

$
17,724Other comprehensive income (loss):Net unrealized holding losses on
    investments, net of tax


(27
)


(17
)Unrealized gains (losses) on
    interest rate swaps, net of tax


(1,194
)


2,149Comprehensive income (loss)

$
(9,344
)

$
19,856     March 31,


December 31,2007


2006Net unrealized holding losses on
    investments, net of tax

$
(31
)

$
(4
)Unrealized gains on interest rate
    swaps, net of tax


596



1,790Accumulated other comprehensive
    income

$
565


$
1,786   Recent
    Accounting Pronouncements
     8




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##### Table of Contents



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


December 31,2007


2006Other current assets:Accounts receivable, net

$
27,931


$
37,422Prepaid expenses


22,622



11,808Other


4,485



4,297$
55,038


$
53,527Property and equipment, net:Network equipment

$
1,196,582


$
1,134,807Computer equipment and other


102,594



93,816Construction-in-progress


255,743



237,8131,554,919



1,466,436Accumulated depreciation


(447,605
)


(388,681
)$
1,107,314


$
1,077,755Accounts payable and accrued
    liabilities:Trade accounts payable

$
87,693


$
218,019Accrued payroll and related
    benefits


24,557



29,450Other accrued liabilities


61,356



69,025$
173,606


$
316,494Other current liabilities:Accrued sales, telecommunications,
    property and other taxes payable

$
25,985


$
26,899Deferred revenue


33,108



27,933Accrued interest


31,060



13,671Other


6,744



6,134$
96,897


$
74,637   Note 4.
    Basic and
    Diluted Earnings (Loss) Per Share   9




---



##### Table of Contents



Three Months Ended March 31,2007


2006Weighted-average shares
    outstanding  basic earnings per share


66,870



61,203Effect of dilutive securities:Stock options






31Restricted stock awards






381Warrants






346Adjusted weighted-average shares
    outstanding  diluted earnings per share


66,870



61,961     Note 5.
    Long-Term
    Debt    March 31,


December 31,2007


2006Term loans under senior secured
    credit facilities

$
933,250


$
935,500Senior notes


750,000



750,0001,683,250



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


(9,000
)


(9,000
)$
1,674,250


$
1,676,500   Senior
    Secured Credit Facilities
       10




---



##### Table of Contents



Senior
    Notes
   11




---



##### Table of Contents



Note 6.
    Significant
    Acquisitions and Dispositions    Note 7.  Commitments
    and Contingencies
  Outstanding
    Bankruptcy Claims
  03-03470-All 03-035335-All
  Patent
    Litigation
  Method for
    Providing Wireless Communication Services and Network and System
    for Delivering Same,
 12




---



##### Table of Contents



Other
  and/or
 13




---



##### Table of Contents



and/or
      Note 8.
    Guarantor
    Financial Information       14




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of March 31, 2007 (in
    thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
132


$
258,236


$
24,281


$
21,135


$



$
303,784Short-term investments






25,432















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


7,579



4,260



640











12,479Inventories






73,571



1,858



556







75,985Other current assets


1,091



28,972



24,512



463







55,038Total current assets


8,802



390,471



51,291



22,154







472,718Property and equipment, net


96



916,285



144,803



46,130







1,107,314Investments in and advances to
    affiliates and consolidated subsidiaries


1,819,979



2,074,993



162,440







(4,057,412
)


Wireless licenses










1,528,012



36,369







1,564,381Goodwill






431,896















431,896Other intangible assets, net






71,044







353







71,397Deposits for wireless licenses














274,084







274,084Other assets


43



34,093



2,304



2,614







39,054Total assets

$
1,828,920


$
3,918,782


$
1,888,850


$
381,704


$
(4,057,412
)

$
3,960,844Liabilities and
    Stockholders EquityAccounts payable and accrued
    liabilities

$
6,241


$
155,230


$
7,407


$
4,728


$



$
173,606Current maturities of long-term
    debt






9,000















9,000Intercompany payables


29,914



180,926



90,965



4,705



(306,510
)


Other current liabilities






76,598



19,046



1,253







96,897Total current liabilities


36,155



421,754



117,418



10,686



(306,510
)


279,503Long-term debt






1,634,250



301,288



281,567



(542,855
)


1,674,250Deferred tax liabilities






10,502



130,937











141,439Other long-term liabilities






43,050



4,840



1,148







49,038Total liabilities


36,155



2,109,556



554,483



293,401



(849,365
)


2,144,230Minority interests






1,553











22,296



23,849Stockholders equity


1,792,765



1,807,673



1,334,367



88,303



(3,230,343
)


1,792,765Total liabilities and
    stockholders equity

$
1,828,920


$
3,918,782


$
1,888,850


$
381,704


$
(4,057,412
)

$
3,960,844  15




---



##### Table of Contents



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











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
206


$
318,290


$
13,052


$
43,391


$



$
374,939Short-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


877



39,827



12,432



391







53,527Total current assets


9,176



516,078



28,059



45,319







598,632Property and equipment, net


117



892,093



147,521



38,024







1,077,755Investments in and advances to
    affiliates and consolidated subsidiaries


1,815,873



2,047,241



154,253







(4,017,367
)


Wireless licenses










1,527,574



36,384







1,563,958Assets held for sale










8,070











8,070Goodwill






431,896















431,896Other intangible assets, net






79,409







419







79,828Deposits for wireless licenses














274,084







274,084Other assets


43



45,616



11,259



1,827







58,745Total assets

$
1,825,209


$
4,012,333


$
1,876,736


$
396,057


$
(4,017,367
)

$
4,092,968Liabilities and
    Stockholders EquityAccounts payable and accrued
    liabilities

$
6,789


$
274,356


$
25,104


$
10,245


$



$
316,494Current maturities of long-term
    debt






9,000















9,000Intercompany payables


29,419



169,794



70,776



9,862



(279,851
)


Other current liabilities






60,167



14,006



464







74,637Total current liabilities


36,208



513,317



109,886



20,571



(279,851
)


400,131Long-term debt






1,636,500



277,955



271,442



(509,397
)


1,676,500Deferred tax liabilities






10,502



139,226











149,728Other long-term liabilities






42,467



4,155



986







47,608Total liabilities


36,208



2,202,786



531,222



292,999



(789,248
)


2,273,967Minority interests






5,978











24,022



30,000Stockholders equity


1,789,001



1,803,569



1,345,514



103,058



(3,252,141
)


1,789,001Total liabilities and
    stockholders equity

$
1,825,209


$
4,012,333


$
1,876,736


$
396,057


$
(4,017,367
)

$
4,092,968  16




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    March 31, 2007 (in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
292,532


$
28,343


$
5,934


$



$
326,809Equipment revenues






67,457



3,452



1,226



(9,522
)


62,613Other revenues






13



13,028







(13,041
)


Total revenues






360,002



44,823



7,160



(22,563
)


389,422Operating expenses:Cost of service (exclusive of
    items shown separately below)






(88,427
)


(12,448
)


(3,102
)


13,028



(90,949
)Cost of equipment






(107,514
)


(9,711
)


(4,779
)


9,522



(112,482
)Selling and marketing


(8
)


(39,553
)


(6,597
)


(2,402
)






(48,560
)General and administrative


(321
)


(55,028
)


(8,692
)


(1,171
)


13



(65,199
)Depreciation and amortization


(23
)


(60,864
)


(6,006
)


(1,907
)






(68,800
)Total operating expenses


(352
)


(351,386
)


(43,454
)


(13,361
)


22,563



(385,990
)Net gain (loss) on sale of
    wireless licenses and disposal of operating assets






(311
)


1,251











940Operating income (loss)


(352
)


8,305



2,620



(6,201
)






4,372Minority interests in consolidated
    subsidiaries






(180
)










1,700



1,520Equity in net loss of consolidated
    subsidiaries


(7,781
)


(24,483
)










32,264



Interest income


10



21,179



176



376



(16,456
)


5,285Interest expense






(25,410
)


(8,331
)


(9,211
)


16,456



(26,496
)Other expense, net






(625
)


(12
)










(637
)Loss before income taxes


(8,123
)


(21,214
)


(5,547
)


(15,036
)


33,964



(15,956
)Income tax (expense) benefit






13,433



(5,600
)










7,833Net loss

$
(8,123
)

$
(7,781
)

$
(11,147
)

$
(15,036
)

$
33,964


$
(8,123
)  17




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    March 31, 2006 (in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
214,318


$
1,522


$



$



$
215,840Equipment revenues






50,253



1,399







(804
)


50,848Other revenues






52



9,557







(9,609
)


Total revenues






264,623



12,478







(10,413
)


266,688Operating expenses:Cost of service (exclusive of
    items shown separately below)






(62,671
)


(2,090
)






9,557



(55,204
)Cost of equipment






(56,489
)


(3,201
)






804



(58,886
)Selling and marketing






(26,159
)


(2,943
)










(29,102
)General and administrative


(1,010
)


(43,657
)


(4,967
)






52



(49,582
)Depreciation and amortization


(30
)


(53,350
)


(656
)










(54,036
)Total operating expenses


(1,040
)


(242,326
)


(13,857
)






10,413



(246,810
)Operating income (loss)


(1,040
)


22,297



(1,379
)










19,878Minority interests in consolidated
    subsidiaries






(75
)














(75
)Equity in net income (loss) of
    consolidated subsidiaries


18,756



(6,176
)










(12,580
)


Interest income


8



5,250



38







(1,102
)


4,194Interest expense






(7,431
)


(1,102
)






1,102



(7,431
)Other income (expense), net






537



(2
)










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


17,724



14,402



(2,445
)






(12,580
)


17,101Income tax (expense) benefit






3,731



(3,731
)










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


17,724



18,133



(6,176
)






(12,580
)


17,101Cumulative effect of change in
    accounting principle






623















623Net income (loss)

$
17,724


$
18,756


$
(6,176
)

$



$
(12,580
)

$
17,724  18




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##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Three Months Ended
    March 31, 2007 (in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


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

$
(589
)

$
31,787


$
(9,399
)

$
(16,899
)

$



$
4,900Investing activities:Purchases of and changes in
    prepayments for property and equipment






(112,948
)


(3,288
)


(8,092
)






(124,328
)Purchases of and deposits for
    wireless licenses










(438
)


15







(423
)Proceeds from sale of wireless
    licenses










9,500











9,500Purchases of investments






(42,727
)














(42,727
)Sales and maturities of investments






84,293















84,293Investments in and advances to
    affiliates and consolidated subsidiaries


(4,365
)


(4,706
)










4,365



(4,706
)Other


515



(2
)


(146
)


735







1,102Net cash provided by (used in)
    investing activities


(3,850
)


(76,090
)


5,628



(7,342
)


4,365



(77,289
)Financing activities:Issuance of related party debt






(17,000
)










17,000



Proceeds from related party debt










15,000



2,000



(17,000
)


Repayment of long-term debt






(2,250
)














(2,250
)Payment of debt issuance costs






(866
)






(15
)






(881
)Capital contributions, net


4,365



4,365











(4,365
)


4,365Net cash provided by (used in)
    financing activities


4,365



(15,751
)


15,000



1,985



(4,365
)


1,234Net increase (decrease) in cash
    and cash equivalents


(74
)


(60,054
)


11,229



(22,256
)






(71,155
)Cash and cash equivalents at
    beginning of period


206



318,290



13,052



43,391







374,939Cash and cash equivalents at end
    of period

$
132


$
258,236


$
24,281


$
21,135


$



$
303,784  19




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##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Three Months Ended
    March 31, 2006 (in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedOperating activities:Net cash provided by operating
    activities

$
270


$
34,752


$
3,268


$



$



$
38,290Investing activities:Purchases of and changes in
    prepayments for property and equipment






(28,328
)


(27,993
)










(56,321
)Purchases of and deposits for
    wireless licenses










(91
)










(91
)Purchases of investments






(46,865
)














(46,865
)Sales and maturities of investments






72,657















72,657Investments in and advances to
    affiliates and consolidated subsidiaries


(233
)


(2,002
)










2,235



Other


(299
)


(1
)


250











(50
)Net cash used in investing
    activities


(532
)


(4,539
)


(27,834
)






2,235



(30,670
)Financing activities:Issuance of related party debt






(34,750
)










34,750



Proceeds from related party debt










34,750







(34,750
)


Repayment of long-term debt






(1,527
)














(1,527
)Payment of debt issuance costs






(91
)














(91
)Capital contributions, net


233



233



2,670







(2,235
)


901Net cash provided by (used in)
    financing activities


233



(36,135
)


37,420







(2,235
)


(717
)Net increase (decrease) in cash
    and cash equivalents


(29
)


(5,922
)


12,854











6,903Cash and cash equivalents at
    beginning of period


46



291,456



1,571











293,073Cash and cash equivalents at end
    of period

$
17


$
285,534


$
14,425


$



$



$
299,976  20




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  As used in this report, unless the context suggests
    otherwise, the terms we, our,
    ours, and us refer to Leap Wireless
    International, Inc., or Leap, and its subsidiaries, including
    Cricket Communications, Inc., or Cricket, and Alaska Native
    Broadband 1 License, LLC, or ANB 1 License. Leap, Cricket
    and ANB 1 License and their subsidiaries are sometimes
    collectively referred to herein as the Company.
    Unless otherwise specified, information relating to population
    and potential customers, or POPs, is based on 2007 population
    estimates provided by Claritas Inc.
  Form 10-K
  Cautionary
    Statement Regarding Forward-Looking Statements
    
    our ability to attract and retain customers in an extremely
    competitive marketplace;
    changes in economic conditions that could adversely affect the
    market for wireless services;
    the impact of competitors initiatives;
    our ability to successfully implement product offerings and
    execute market expansion plans;
    delays in our market expansion plans 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.   21




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##### Table of Contents



Overview
  ® tm
              and/or
   22




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##### Table of Contents



Results
    of Operations
  Operating
    Items
    Three Months Ended March 31,% of 2007





% of 2006


Change fromService





Service


Prior Year2007


Revenues


2006


Revenues


Dollars


PercentRevenues:Service revenues

$
326,809






$
215,840






$
110,969



51.4
%Equipment revenues


62,613







50,848







11,765



23.1
%Total revenues


389,422







266,688







122,734



46.0
%Operating expenses:Cost of service (exclusive of
    items shown separately below)


90,949



27.8
%


55,204



25.6
%


35,745



64.8
%Cost of equipment


112,482



34.4
%


58,886



27.3
%


53,596



91.0
%Selling and marketing


48,560



14.9
%


29,102



13.5
%


19,458



66.9
%General and administrative


65,199



20.0
%


49,582



23.0
%


15,617



31.5
%Depreciation and amortization


68,800



21.1
%


54,036



25.0
%


14,764



27.3
%Total operating expenses


385,990



118.1
%


246,810



114.3
%


139,180



56.4
%Net gain on sale of wireless
    licenses and disposal of operating assets


940



0.3
%










940



100.0
%Operating income

$
4,372



1.3
%

$
19,878



9.2
%

$
(15,506
)


(78.0
)%     Change2007


2006


Amount


PercentFor the Three Months Ended
    March 31:Gross customer additions


565,055



278,370



286,685



103.0
%Net customer additions


318,346



110,409



207,937



188.3
%Weighted average number of
    customers


2,393,161



1,718,349



674,812



39.3
%As of
    March 31:Total customers


2,548,172



1,778,704



769,468



43.3
%   Three
    Months Ended March 31, 2007 Compared to Three Months Ended
    March 31, 2006
     23




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##### Table of Contents



Non-Operating
    Items
    Three Months Ended March 31,2007


2006


ChangeMinority interests in consolidated
    subsidiaries

$
1,520


$
(75
)

$
1,595Interest income


5,285



4,194



1,091Interest expense


(26,496
)


(7,431
)


(19,065
)Other income (expense), net


(637
)


535



(1,172
)Income tax benefit


7,833







7,833   Three
    Months Ended March 31, 2007 Compared to Three Months Ended
    March 31, 2006
       24




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##### Table of Contents



Performance
    Measures
  Regulation S-K
     25




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##### Table of Contents



Three Months  EndedMarch 31,2007


2006ARPU

$
45.52


$
41.87CPGA

$
166


$
130CCU

$
21.16


$
19.57Churn


3.4
%


3.3
%  26




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##### Table of Contents



Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
    Three Months Ended March 31,2007


2006Selling and marketing expense

$
48,560


$
29,102Less share-based compensation
    expense included in selling and marketing expense


(1,001
)


(327
)Plus cost of equipment


112,482



58,886Less equipment revenue


(62,613
)


(50,848
)Less net loss on equipment
    transactions unrelated to initial customer acquisition


(3,503
)


(521
)Total costs used in the
    calculation of CPGA

$
93,925


$
36,292Gross customer additions


565,055



278,370CPGA

$
166


$
130     Three Months Ended March 31,2007


2006Cost of service

$
90,949


$
55,204Plus general and administrative
    expense


65,199



49,582Less share-based compensation
    expense included in cost of service and general and
    administrative expense


(7,742
)


(4,399
)Plus net loss on equipment
    transactions unrelated to initial customer acquisition


3,503



521Total costs used in the
    calculation of CCU

$
151,909


$
100,908Weighted-average number of
    customers


2,393,161



1,718,349CCU

$
21.16


$
19.57   Liquidity
    and Capital Resources
  Overview
   27




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##### Table of Contents



Cash
    Flows
      
    During the three months ended March 31, 2007, we and LCW
    Operations purchased $131.7 million of property and
    equipment for the build-out of our new markets and the expansion
    and improvement of our existing markets.
    During March 2007, Cricket acquired the remaining 25% of the
    membership interests in ANB 1, following Alaska Native
    Broadband, LLCs exercise of its option to sell its entire
    25% controlling interest in ANB 1 to Cricket, for
    $4.7 million.
    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 the three months ended March 31, 2007, we issued
    common stock resulting in net proceeds of $4.4 million.
    During March 2007, we made a payment of $2.3 million on our
    $895.5 million term loan.  Senior
    Secured Credit Facilities
       28




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##### Table of Contents



Senior
    Notes
    Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  Capital
    Expenditures
        Other
    Acquisitions and Dispositions
    Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
     29




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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    Rule 13a-15(b), Form 10-Q, Rule 13a-15(e)
  (b)
    Changes
    in Internal Control over Financial Reporting   30




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##### Table of Contents



PART II  OTHER INFORMATION
  Item 1.
    Legal
    Proceedings.  Form 10-K
  Outstanding
    Bankruptcy Claims
  03-03470-All 03-035335-All
  Patent
    Litigation
  No. 2-06H-CV-00240-TJW, Method for Providing Wireless Communication Services
    and Network and System for Delivering Same, No. 8:06-CV-01754-T-23TBM, Method for
    Providing Wireless Communication Services and Network and System
    for Delivering Same
   31




---



##### Table of Contents



Other
  and/or
  and/or
     32




---



##### Table of Contents



Item 1A.
    Risk
    Factors.  Form 10-K
  
    the Risk Factor below entitled We Face Increasing
    Competition Which Could Have a Material Adverse Effect on Demand
    for the Cricket Service, which has been updated to reflect
    additional risks related to the competitive landscape for our
    services;  
    the Risk Factor below 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 our
    plans to build out additional markets;  
    the Risk Factor below entitled Despite Current
    Indebtedness Levels, We May Incur Substantially More
    Indebtedness. This Could Further Increase the Risks Associated
    With Our Leverage, which has been updated to reflect
    additional risks related to our plans to raise additional
    indebtedness, including our near term plans to raise additional
    debt financing for general corporate purposes and the build-out
    of new markets;  
    the Risk Factor entitled We and Our Suppliers May Be
    Subject to Claims of Infringement Regarding Telecommunications
    Technologies That Are Protected By Patents and Other
    Intellectual Property Rights, which has been updated to
    reflect additional risks related to potential infringement
    claims that could be made against our suppliers; and  
    the Risk Factor below entitled We May Be Unable to Acquire
    Additional Spectrum in the Future at a Reasonable Cost or on a
    Timely Basis, which has been updated to reflect the
    decision by the FCC to approve the award to Denali License of
    the license that it won in Auction #66.  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
    Become Profitable Will Decrease.
   33




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##### Table of Contents



We Have
    Made Significant Investment, and Will Continue to Invest, in
    Joint Ventures That We Do Not Control.
      We Face
    Increasing Competition Which Could Have a Material Adverse
    Effect on Demand for the Cricket Service.
   34




---



##### Table of Contents



and/or
          We May Be
    Unable to Obtain the Roaming Services We Need From Other
    Carriers to Remain Competitive.
   35




---



##### Table of Contents



We
    Previously Identified Material Weaknesses in Our Internal
    Control Over Financial Reporting, and Our Business and Stock
    Price May Be Adversely Affected If Our Internal Controls Are Not
    Effective.
    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.
   36




---



##### Table of Contents



and/or
      If We Are
    Unable to Manage Our Planned Growth, Our Operations Could Be
    Adversely Impacted.
    Our
    Significant Indebtedness Could Adversely Affect Our Financial
    Health and Prevent Us From Fulfilling Our Obligations.
   37




---



##### Table of Contents




    make it more difficult for us to satisfy our debt obligations;
    increase our vulnerability to general adverse economic and
    industry conditions;
    impair our ability to obtain additional financing in the future
    for working capital needs, capital expenditures, building out
    our network, acquisitions and general corporate purposes;
    require us to dedicate a substantial portion of our cash flows
    from operations to the payment of principal and interest on our
    indebtedness, thereby reducing the availability of our cash
    flows to fund working capital needs, capital expenditures,
    acquisitions and other general corporate purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate;
    place us at a disadvantage compared to our competitors that have
    less indebtedness; and
    expose us to higher interest expense in the event of increases
    in interest rates because indebtedness under our senior secured
    credit facility bears interest at a variable rate.    Despite
    Current Indebtedness Levels, We May Incur Substantially More
    Indebtedness. This Could Further Increase The Risks Associated
    With Our Leverage.
      To
    Service Our Indebtedness and Fund Our Working Capital and
    Capital Expenditures, We Will Require a Significant Amount of
    Cash. Our Ability to Generate Cash Depends on Many Factors
    Beyond Our Control.
   38




---



##### Table of Contents



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.      Rises in
    Interest Rates Could Adversely Affect Our Financial
    Condition.
   39




---



##### 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.
     40




---



##### 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.
      We May
    Not Be Successful in Protecting and Enforcing Our Intellectual
    Property Rights.
   41




---



##### Table of Contents



No. 2-06-CV-00240-TJW, Method for Providing Wireless Communication Services
    and Network and System for Delivering Same, No. 8:06-CV-01754-T-23TBM, Method for
    Providing Wireless Communication Services and Network and System
    for Delivering Same
  No. 3-06CV1399-D, Operations Method for Providing
    Wireless Communication Services and Network and System for
    Delivering Same
    We and
    Our Suppliers May Be Subject to Claims of Infringement Regarding
    Telecommunications Technologies That Are Protected By Patents
    and Other Intellectual Property Rights.
   42




---



##### Table of Contents



Regulation
    by Government Agencies May Increase Our Costs of Providing
    Service or Require Us to Change Our Services.
       43




---



##### 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.
  15-year
  Future
    Declines in the Fair Value of Our Wireless Licenses Could Result
    in Future Impairment Charges.
  90-7, SOP 90-7,
 44




---



##### Table of Contents




    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.
     45




---



##### 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;
    announcements of technological innovations, new services or
    service enhancements, strategic alliances or significant
    agreements by us or by our competitors;
    recruitment or departure of key personnel;
    changes in the estimates of our operating results or changes in
    recommendations by any securities analysts that elect to follow
    Leap common stock; and
    market conditions in our industry and the economy as a whole.  The
    16,460,077 Shares of Leap Common Stock Registered for
    Resale By Our Shelf Registration Statement May Adversely Affect
    The Market Price of Leaps Common Stock.
    Your
    Ownership Interest in Leap Will Be Diluted Upon Issuance of
    Shares We Have Reserved for Future Issuances, and Future
    Issuances or Sales of Such Shares May Adversely Affect The
    Market Price of Leaps Common Stock.
     46




---



##### Table of Contents



Our
    Directors and Affiliated Entities Have Substantial Influence
    over Our Affairs.
    Provisions
    in Our Amended and Restated Certificate of Incorporation and
    Bylaws or Delaware Law Might Discourage, Delay or Prevent a
    Change in Control of Our Company or Changes in Our Management
    and, Therefore, Depress The Trading Price of Our Common
    Stock.
    
    require super-majority voting to amend some provisions in our
    amended and restated certificate of incorporation and bylaws;
    authorize the issuance of blank check preferred
    stock that our board of directors could issue to increase the
    number of outstanding shares to discourage a takeover attempt;
    prohibit stockholder action by written consent, and require that
    all stockholder actions be taken at a meeting of our
    stockholders;
    provide that the board of directors is expressly authorized to
    make, alter or repeal our bylaws; and
    establish advance notice requirements for nominations for
    elections to our board or for proposing matters that can be
    acted upon by stockholders at stockholder meetings.    Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Item 3.
    Defaults
    Upon Senior Securities.   47




---



##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders.    Item 5.
    Other
    Information.  Adoption
    of 2007 Cricket Non-Sales Bonus Plan
  Form 10-Q, year-to-date year-to-date
    Item 6.
    Exhibits.  Index to Exhibits:
  ExhibitNumber

Description of Exhibit4
.3.2(1)

Third Supplemental Indenture,
    dated as of April 30, 2007, among Cricket Communications,
    Inc., Wells Fargo Bank, N.A., as trustee, Leap Wireless
    International, Inc. and the other guarantors under the Indenture.10
.3.5(2)

Amendment No. 1 to Amended
    and Restated Credit Agreement, dated March 15, 2007, by and
    among Cricket Communications, Inc., Leap Wireless International,
    Inc., the lenders party thereto and Bank of America, N.A., as
    administrative agent.10
.3.6(2)

Consent dated March 15, 2007
    by Leap Wireless International, Inc. and the subsidiary
    guarantors party thereto.10
.4.6*

Letter Agreement, dated as of
    March 5, 2007, regarding termination of Credit Agreement,
    dated as of December 22, 2004, among Cricket
    Communications, Inc., Alaska Native Broadband 1 License,
    LLC, and Alaska Native Broadband I, LLC.10
.5.2*

Amendment No. 2 to Credit
    Agreement by and among Cricket Communications, Inc., Denali
    Spectrum License, LLC and Denali Spectrum, LLC, dated as of
    April 16, 2007, between Cricket Communications, Inc.,
    Denali Spectrum License, LLC and Denali Spectrum, LLC.10
.11.19*

First Amendment to the Leap
    Wireless International, Inc. 2004 Stock Option, Restricted
    Stock and Deferred Stock Unit Plan.10
.13*

2007 Cricket Non-Sales Bonus Plan.31
.1*

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
    2002.31
.2*

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


Certifications of Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.**
    
    These certifications are being furnished solely to accompany
    this quarterly report pursuant to 18 U.S.C. § 1350, and are
    not being filed for purposes of Section 18 of the
    Securities Exchange Act of 1934, as amended, and are not to be
    incorporated by reference into any filing of Leap Wireless
    International, Inc., whether made before or after the date
    hereof, regardless of any general incorporation language in such
    filing. 48




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##### Table of Contents



(1)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated April 30, 2007, filed with the SEC on May 4,
    2007, and incorporated herein by reference.  (2)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated March 15, 2007, filed with the SEC on March 21,
    2007, and incorporated herein by reference. 49




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##### Table of Contents



SIGNATURES
      Date: May 10, 2007

By: /s/  Douglas
    HutchesonS.
    Douglas Hutcheson
    Chief Executive Officer and President
    (Principal Executive Officer)Date: May 10, 2007

By: /s/  Amin
    I. KhalifaAmin
    I. Khalifa
    Executive Vice President and
    Chief Financial Officer
    (Principal Financial Officer)  50