##### Table of Contents





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

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2009ORo

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(State or other jurisdiction of
    incorporation or organization)

33-0811062(I.R.S. Employer
    Identification No.)5887 Copley Drive, San Diego, CA(Address of principal executive
    offices)

92111(Zip
    Code)   (858) 882-6000
 (Registrants telephone
    number, including area code)
  10307
    Pacific Center Court, San Diego, CA 92121
 (Former name, former address and
    former fiscal year, if changed since last report)
  þ o
  Regulation S-T o o
    Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
  þ o




---



##### 





LEAP
    WIRELESS INTERNATIONAL, INC.
  QUARTERLY
    REPORT ON
    FORM 10-Q
    For the Quarter Ended September 30, 2009
    TABLE OF CONTENTS
   
 PagePART I  FINANCIAL
    INFORMATIONItem 1.


Financial Statements

1Item 2.


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

38Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk

64Item 4.


Controls and Procedures

64Item 4T.


Controls and Procedures

65PART II  OTHER
    INFORMATIONItem 1.


Legal Proceedings

66Item 1A.


Risk Factors

69Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds

90Item 3.


Defaults Upon Senior Securities

90Item 4.


Submission of Matters to a Vote of Security
    Holders

90Item 5.


Other Information

90Item 6.


Exhibits

90EX-31.1EX-31.2EX-32




---



##### Table of Contents



PART I



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


December 31,2009


2008(Unaudited)AssetsCash and cash equivalents

$
222,961


$
357,708Short-term investments


391,148



238,143Restricted cash, cash equivalents and short-term investments


3,248



4,780Inventories


88,380



99,086Deferred charges


36,238



27,207Other current assets


62,077



51,948Total current assets


804,052



778,872Property and equipment, net


2,092,954



1,842,718Wireless licenses


1,919,294



1,841,798Assets held for sale


4,015



45,569Goodwill


430,101



430,101Intangible assets, net


25,749



29,854Other assets


92,878



83,945Total assets

$
5,369,043


$
5,052,857Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
244,162


$
325,294Current maturities of long-term debt


7,000



13,000Other current liabilities


217,963



162,002Total current liabilities


469,125



500,296Long-term debt


2,752,779



2,566,025Deferred tax liabilities


242,463



217,631Other long-term liabilities


88,614



84,350Total liabilities


3,552,981



3,368,302Redeemable noncontrolling interests


75,792



71,879Commitments and contingencies (Note 10)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; 77,410,189 and 69,515,526 shares
    issued and outstanding at September 30, 2009 and
    December 31, 2008, respectively


8



7Additional paid-in capital


2,134,348



1,835,468Accumulated deficit


(394,672
)


(216,877
)Accumulated other comprehensive income (loss)


586



(5,922
)Total stockholders equity


1,740,270



1,612,676Total liabilities and stockholders equity

$
5,369,043


$
5,052,857    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 30,2009


2008


2009


2008Revenues:Service revenues

$
541,268


$
434,523


$
1,596,858


$
1,250,595Equipment revenues


58,200



62,174



187,005



189,344Total revenues


599,468



496,697



1,783,863



1,439,939Operating expenses:Cost of service (exclusive of items shown separately below)


156,707



129,708



455,618



359,735Cost of equipment


133,502



113,057



419,073



332,405Selling and marketing


111,702



77,407



311,913



209,783General and administrative


87,077



87,522



274,192



240,662Depreciation and amortization


107,876



86,033



297,230



254,839Impairment of assets


639



177



639



177Total operating expenses


597,503



493,904



1,758,665



1,397,601Gain (loss) on sale or disposal of assets


(591
)


(402
)


1,436



559Operating income


1,374



2,391



26,634



42,897Equity in net income (loss) of investee


996



230



2,990



(1,127
)Interest income


727



4,072



2,314



11,439Interest expense


(59,129
)


(45,352
)


(150,040
)


(109,110
)Other income (expense), net


(17
)


1,115



(126
)


(3,228
)Loss on extinguishment of debt










(26,310
)


Loss before income taxes


(56,049
)


(37,544
)


(144,538
)


(59,129
)Income tax expense


(9,358
)


(9,726
)


(29,412
)


(29,683
)Net loss


(65,407
)


(47,270
)


(173,950
)


(88,812
)Accretion of redeemable noncontrolling interests, net of tax


834



(1,992
)


(3,670
)


(5,825
)Net loss attributable to common stockholders

$
(64,573
)

$
(49,262
)

$
(177,620
)

$
(94,637
)Loss per share attributable to common stockholders:Basic

$
(0.85
)

$
(0.72
)

$
(2.49
)

$
(1.39
)Diluted

$
(0.85
)

$
(0.72
)

$
(2.49
)

$
(1.39
)Shares used in per share calculations:Basic


75,598



68,071



71,469



67,999Diluted


75,598



68,071



71,469



67,999    2




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited and in thousands)
  Nine Months EndedSeptember 30,2009


2008Operating activities:Net cash provided by operating activities

$
194,825


$
271,269Investing activities:Acquisition of a business, net of cash acquired






(31,201
)Purchases of property and equipment


(577,542
)


(528,333
)Change in prepayments for purchases of property and equipment


5,377



(4,867
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs


(34,311
)


(74,698
)Return of deposit for wireless licenses






70,000Proceeds from sale of wireless licenses and operating assets


2,965



Purchases of investments


(640,193
)


(446,590
)Sales and maturities of investments


487,270



341,239Purchase of membership units of equity method investment






(1,033
)Change in restricted cash


706



(1,980
)Net cash used in investing activities


(755,728
)


(677,463
)Financing activities:Proceeds from issuance of long-term debt


1,057,474



535,750Repayment of long-term debt


(880,904
)


(7,750
)Payment of debt issuance costs


(15,094
)


(7,507
)Proceeds from issuance of common stock, net


265,907



7,068Other


(1,227
)


(12,900
)Net cash provided by financing activities


426,156



514,661Net increase (decrease) in cash and cash equivalents


(134,747
)


108,467Cash and cash equivalents at beginning of period


357,708



433,337Cash and cash equivalents at end of period

$
222,961


$
541,804Supplementary disclosure of cash flow information:Cash paid for interest

$
133,379


$
107,924Cash paid for income taxes

$
2,490


$
1,916    3




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##### Table of Contents



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




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##### Table of Contents



Principles
    of Consolidation
    Subsequent
    Events
    Segment
    and Geographic Data
  tm
  Revenues
  month-to-month
   5




---



##### Table of Contents



and/or
    E-911
  Fair
    Value of Financial Instruments
     6




---



##### Table of Contents



Property
    and Equipment
      DepreciableLifeNetwork equipment:Switches


10Switch power equipment


15Cell site equipment and site improvements


7Towers


15Antennae


5Computer hardware and software


3-5Furniture, fixtures, retail and office equipment


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




---



##### Table of Contents



and/or
  Goodwill
    and Other Intangible Assets
    Impairment
    of Indefinite-Lived Intangible Assets
    Wireless
    Licenses
   8




---



##### Table of Contents



Goodwill
           9




---



##### Table of Contents



Derivative
    Instruments and Hedging Activities
        Investments
    in Other Entities
    other-than-temporary
 10




---



##### Table of Contents



other-than-temporary,
  Concentrations
      Share-Based
    Compensation
      Three Months


Nine MonthsEnded September 30,


Ended September 30,2009


2008


2009


2008Cost of service

$
865


$
628


$
2,510


$
2,145Selling and marketing expense


1,866



871



4,915



3,406General and administrative expense


8,276



6,967



25,644



19,951Share-based compensation expense

$
11,007


$
8,466


$
33,069


$
25,502Share-based compensation expense per share:Basic

$
0.15


$
0.12


$
0.46


$
0.38Diluted

$
0.15


$
0.12


$
0.46


$
0.38   Income
    Taxes
   11




---



##### Table of Contents



year-to-date
          Comprehensive
    Loss
    Three Months


Nine MonthsEnded September 30,


Ended September 30,2009


2008


2009


2008Net loss

$
(65,407
)

$
(47,270
)

$
(173,950
)

$
(88,812
)Other comprehensive loss:Net unrealized holding gains (losses) on investments, net of tax


(219
)


(123
)


389



683Unrealized losses on interest rate swaps














(1,470
)Reclassification of losses included in earnings, including tax
    effect










6,119



Comprehensive loss

$
(65,626
)

$
(47,393
)

$
(167,442
)

$
(89,599
)  12




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##### Table of Contents



September 30,


December 31,2009


2008Net unrealized holding gains on investments, net of tax

$
586


$
197Unrealized losses on interest rate swaps, net of tax and swaplet
    amortization






(6,119
)Accumulated other comprehensive income (loss)

$
586


$
(5,922
)   Recent
    Accounting Pronouncements
      Note 3.
    Supplementary
    Balance Sheet Information (in thousands):  September 30,


December 31,2009


2008Other current assets:Accounts receivable, net(1)

$
28,649


$
31,177Prepaid expenses


31,038



19,367Other


2,390



1,404$
62,077


$
51,948Property and equipment, net(2):Network equipment

$
2,626,509


$
1,911,173Computer hardware and software


228,424



203,720Construction-in-progress


297,936



574,773Other


93,949



60,9723,246,818



2,750,638Accumulated depreciation


(1,153,864
)


(907,920
)$
2,092,954


$
1,842,718 13




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##### Table of Contents



September 30,


December 31,2009


2008Intangible assets, net:Customer relationships

$
7,347


$
7,347Trademarks


37,000



37,00044,347



44,347Accumulated amortization customer relationships


(4,943
)


(2,820
)Accumulated amortization trademarks


(13,655
)


(11,673
)$
25,749


$
29,854Accounts payable and accrued liabilities:Trade accounts payable

$
112,975


$
201,843Accrued payroll and related benefits


59,574



50,462Other accrued liabilities


71,613



72,989$
244,162


$
325,294Other current liabilities:Deferred service revenue(3)

$
72,334


$
62,998Deferred equipment revenue(4)


25,545



20,614Accrued sales, telecommunications, property and other taxes
    payable


33,964



32,799Accrued interest


79,147



38,500Other


6,973



7,091$
217,963


$
162,002     (1)
    
    Accounts receivable, net consists primarily of amounts billed to
    third-party dealers for handsets and accessories net of an
    allowance for doubtful accounts.(2)
    
    As of September 30, 2009 and December 31, 2008,
    approximately $8.7 million of assets were held by the
    Company under capital lease arrangements. Accumulated
    amortization relating to these assets totaled $3.7 million
    and $3.2 million as of September 30, 2009 and
    December 31, 2008, respectively.(3)
    
    Deferred service revenue consists primarily of cash received
    from customers in advance of their service period.(4)
    
    Deferred equipment revenue relates to handsets sold to
    third-party dealers.  Note 4.
    Basic and
    Diluted Earnings (Loss) Per Share      Note 5.
    Fair
    Value of Financial Instruments   14




---



##### Table of Contents



Level 1
    Quoted prices in active markets for identical assets or
    liabilities. The Company did not have any Level 1 assets or
    liabilities as of September 30, 2009 or December 31,
    2008.Level 2
    Observable inputs other than Level 1 prices, such as quoted
    prices for similar assets or liabilities, quoted prices in
    markets that are not active or other inputs that are observable
    or can be corroborated by observable market data for
    substantially the full term of the assets or liabilities. The
    Companys Level 2 assets and liabilities as of
    September 30, 2009 and December 31, 2008 included its
    cash equivalents, its short-term investments in obligations of
    the U.S. government and government agencies, a majority of
    its short-term investments in commercial paper and, as of
    December 31, 2008, its interest rate swaps.Level 3
    Unobservable inputs that are supported by little or no market
    activity and that are significant to the fair value of the
    assets or liabilities. Such assets and liabilities may have
    values determined using pricing models, discounted cash flow
    methodologies, or similar techniques, and include instruments
    for which the determination of fair value requires significant
    management judgment or estimation. The Companys
    Level 3 asset as of September 30, 2009 and
    December 31, 2008 comprised its short-term investment in
    asset-backed commercial paper.    At Fair Value as of September 30, 2009Level 1


Level 2


Level 3


TotalAssets:Cash equivalents

$



$
177,649


$



$
177,649Short-term investments






388,798



2,350



391,148Total

$



$
566,447


$
2,350


$
568,797   At Fair Value as of December 31, 2008Level 1


Level 2


Level 3


TotalAssets:Cash equivalents

$



$
175,280


$



$
175,280Short-term investments






236,893



1,250



238,143Total

$



$
412,173


$
1,250


$
413,423Liabilities:Interest rate swaps

$



$
(11,045
)

$



$
(11,045
)Total

$



$
(11,045
)

$



$
(11,045
)    15




---



##### Table of Contents



Three Months


Nine MonthsEnded September 30,


Ended September 30,2009


2008


2009


2008Beginning balance

$
2,550


$
9,933


$
1,250


$
16,200Total losses (realized/unrealized):Included in net loss

$



$
1,162


$



$
(3,763
)Included in comprehensive loss


(200
)


(933
)


1,100



Settlements






(5,062
)






(7,337
)Transfers in (out) of Level 3














Ending balance

$
2,350


$
5,100


$
2,350


$
5,100     Cash
    Equivalents and Short-Term Investments
  available-for-sale.
  Interest
    Rate Swaps
      Long-Term
    Debt
   16




---



##### Table of Contents



Note 6.
    Long-Term
    Debt    September 30,


December 31,2009


2008Term loans under senior secured credit facilities

$
35,096


$
916,000Unamortized deferred lender fees






(4,527
)Unsecured senior notes due 2014 and 2015


1,400,000



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


15,740



17,552Senior secured notes due 2016


1,100,000



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


(41,057
)


Convertible senior notes due 2014


250,000



250,0002,759,779



2,579,025Current maturities of long-term debt


(7,000
)


(13,000
)$
2,752,779


$
2,566,025   Senior
    Secured Credit Facilities
  Cricket
    Communications
    LCW
    Operations
   17




---



##### Table of Contents



Senior
    Notes
  Unsecured
    Senior Notes Due 2014
          Convertible
    Senior Notes Due 2014
   18




---



##### Table of Contents



Unsecured
    Senior Notes Due 2015
   19




---



##### Table of Contents



Senior
    Secured Notes Due 2016
     20




---



##### Table of Contents



pari passu
         21




---



##### Table of Contents



90-day 90-day Form S-4
  Note 7.
    Significant
    Acquisitions and Dispositions      Note 8.
    Common
    Stock Offering    Note 9.
    Arrangements
    with Variable Interest Entities    mark-to-market)
 22




---



##### Table of Contents



Arrangements
    with LCW Wireless
    Limited
    Liability Company Agreement
  30-day
      Management
    Agreement
  mark-up
 23




---



##### Table of Contents



Other
    Arrangements
    with Denali
    Limited
    Liability Company Agreement
    Senior
    Secured Credit Agreement
  sub-facility sub-facility sub-facility sub-facility.
  Management
    Agreement
    Values
    of Redeemable Noncontrolling Interests
    Nine MonthsEnded September 30,2009


2008Beginning balance, January 1

$
71,879


$
61,868Accretion of redeemable noncontrolling interests, before tax


3,913



6,572Ending balance, September 30

$
75,792


$
68,440  24




---



##### Table of Contents



Note 10.
    Commitments
    and Contingencies      and/or
  Patent
    Litigation
  Freedom
    Wireless
  ® tm
  Electronic
    Data Systems
    DNT
  and/or
 25




---



##### Table of Contents



Digital
    Technology Licensing
  and/or ® and/or and/or
  On The
    Go
    American
    Wireless Group
  and/or
  and/or
 26




---



##### Table of Contents



Securities
    and Derivative Litigation
  and/or
  Rule 10b-5, class-wide
  and/or
 27




---



##### Table of Contents



Department
    of Justice Inquiry
    Other
    Litigation
    Indemnification
    Agreements
    Spectrum
    Clearing Obligations
  and/or
  System
    Equipment Purchase Agreements
  and/or
 28




---



##### Table of Contents



Tower
    Provider Commitments
    Outstanding
    Letters of Credit and Surety Bonds
      Note 11.
    Guarantor
    Financial Information       29




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of September 30, 2009
    (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
38


$
194,218


$



$
28,705


$



$
222,961Short-term investments






388,798







2,350







391,148Restricted cash, cash equivalents and short-term investments


1,613



1,625







10







3,248Inventories






84,568







3,812







88,380Deferred charges






36,238















36,238Other current assets


133



57,805







4,165



(26
)


62,077Total current assets


1,784



763,252







39,042



(26
)


804,052Property and equipment, net


2



1,815,945







277,007







2,092,954Investments in and advances to affiliates and consolidated
    subsidiaries


2,006,542



2,301,566



150,321



9,127



(4,467,556
)


Wireless licenses






7,889



1,577,450



333,955







1,919,294Assets held for sale










4,015











4,015Goodwill






430,101















430,101Intangible assets, net






25,749















25,749Other assets


7,161



83,026







2,691







92,878Total assets

$
2,015,489


$
5,427,528


$
1,731,786


$
661,822


$
(4,467,582
)

$
5,369,043Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
143


$
236,342


$



$
7,677


$



$
244,162Current maturities of long-term debt














7,000







7,000Intercompany payables


22,773



407,067







16,432



(446,272
)


Other current liabilities


2,303



199,937







15,749



(26
)


217,963Total current liabilities


25,219



843,346







46,858



(446,298
)


469,125Long-term debt


250,000



2,474,684







701,707



(673,612
)


2,752,779Deferred tax liabilities






242,463















242,463Other long-term liabilities






78,836







9,778







88,614Total liabilities


275,219



3,639,329







758,343



(1,119,910
)


3,552,981Redeemable noncontrolling interests






29,278







46,514







75,792Stockholders equity (deficit)


1,740,270



1,758,921



1,731,786



(143,035
)


(3,347,672
)


1,740,270Total liabilities and stockholders equity

$
2,015,489


$
5,427,528


$
1,731,786


$
661,822


$
(4,467,582
)

$
5,369,043  30




---



##### Table of Contents



Condensed
    Consolidating Balance Sheet as of December 31, 2008 (in
    thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedAssetsCash and cash equivalents

$
27


$
333,119


$



$
24,562


$



$
357,708Short-term investments






236,893







1,250







238,143Restricted cash, cash equivalents and short-term investments


1,611



3,129







40







4,780Inventories






97,512







1,574







99,086Deferred charges






27,207















27,207Other current assets


83



50,915







2,062



(1,112
)


51,948Total current assets


1,721



748,775







29,488



(1,112
)


778,872Property and equipment, net


2



1,586,346







256,370







1,842,718Investments in and advances to affiliates and consolidated
    subsidiaries


1,892,457



2,172,085



81,793



9,227



(4,155,562
)


Wireless licenses






7,889



1,501,632



332,277







1,841,798Assets held for sale










45,569











45,569Goodwill






430,101















430,101Intangible assets, net






29,854















29,854Other assets


8,043



72,434







3,468







83,945Total assets

$
1,902,223


$
5,047,484


$
1,628,994


$
630,830


$
(4,156,674
)

$
5,052,857Liabilities and Stockholders EquityAccounts payable and accrued liabilities

$
20


$
297,461


$



$
27,813


$



$
325,294Current maturities of long-term debt






9,000







4,000







13,000Intercompany payables


33,714



346,049







23,687



(403,450
)


Other current liabilities


5,813



150,919







6,382



(1,112
)


162,002Total current liabilities


39,547



803,429







61,882



(404,562
)


500,296Long-term debt


250,000



2,281,525







524,007



(489,507
)


2,566,025Deferred tax liabilities






217,631















217,631Other long-term liabilities






78,861







5,489







84,350Total liabilities


289,547



3,381,446







591,378



(894,069
)


3,368,302Redeemable noncontrolling interests






28,610







43,269







71,879Stockholders equity (deficit)


1,612,676



1,637,428



1,628,994



(3,817
)


(3,262,605
)


1,612,676Total liabilities and stockholders equity

$
1,902,223


$
5,047,484


$
1,628,994


$
630,830


$
(4,156,674
)

$
5,052,857  31




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    September 30, 2009 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
500,430


$



$
40,822


$
16


$
541,268Equipment revenues






52,973







5,227







58,200Other revenues






2,404



22,194



418



(25,016
)


Total revenues






555,807



22,194



46,467



(25,000
)


599,468Operating expenses:Cost of service (exclusive of items shown separately below)






161,686







17,616



(22,595
)


156,707Cost of equipment






117,119







16,383







133,502Selling and marketing






93,843







17,859







111,702General and administrative


871



76,682



27



11,902



(2,405
)


87,077Depreciation and amortization






95,839







12,037







107,876Impairment of assets










639











639Total operating expenses


871



545,169



666



75,797



(25,000
)


597,503Gain (loss) on sale or disposal of assets






(5,013
)


4,426



(4
)






(591
)Operating income (loss)


(871
)


5,625



25,954



(29,334
)






1,374Equity in net loss of consolidated subsidiaries


(66,670
)


(25,321
)










91,991



Equity in net income of investee






996















996Interest income


6,062



23,277







405



(29,017
)


727Interest expense


(3,094
)


(63,815
)






(23,136
)


30,916



(59,129
)Other expense, net






(17
)














(17
)Income (loss) before income taxes


(64,573
)


(59,255
)


25,954



(52,065
)


93,890



(56,049
)Income tax expense






(9,358
)














(9,358
)Net income (loss)


(64,573
)


(68,613
)


25,954



(52,065
)


93,890



(65,407
)Accretion of redeemable noncontrolling interests, net of tax






1,943







(1,109
)






834Net income (loss) attributable to common stockholders

$
(64,573
)

$
(66,670
)

$
25,954


$
(53,174
)

$
93,890


$
(64,573
)  32




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Nine Months Ended
    September 30, 2009 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
1,506,487


$



$
90,345


$
26


$
1,596,858Equipment revenues






172,743







14,262







187,005Other revenues






4,514



66,533



1,084



(72,131
)


Total revenues






1,683,744



66,533



105,691



(72,105
)


1,783,863Operating expenses:Cost of service (exclusive of items shown separately below)






486,903







36,213



(67,498
)


455,618Cost of equipment






368,975







50,098







419,073Selling and marketing






275,873







36,040







311,913General and administrative


2,813



244,774



308



30,904



(4,607
)


274,192Depreciation and amortization






266,459







30,771







297,230Impairment of assets










639











639Total operating expenses


2,813



1,642,984



947



184,026



(72,105
)


1,758,665Gain (loss) on sale or disposal of assets






(2,881
)


4,426



(109
)






1,436Operating income (loss)


(2,813
)


37,879



70,012



(78,444
)






26,634Equity in net loss of consolidated subsidiaries


(183,723
)


(69,096
)










252,819



Equity in net income of investee






2,990















2,990Interest income


18,189



63,347







2,130



(81,352
)


2,314Interest expense


(9,273
)


(162,571
)






(59,548
)


81,352



(150,040
)Other expense, net






(126
)














(126
)Loss on extinguishment of debt






(26,310
)














(26,310
)Income (loss) before income taxes


(177,620
)


(153,887
)


70,012



(135,862
)


252,819



(144,538
)Income tax expense






(29,412
)














(29,412
)Net income (loss)


(177,620
)


(183,299
)


70,012



(135,862
)


252,819



(173,950
)Accretion of redeemable noncontrolling interests, net of tax






(424
)






(3,246
)






(3,670
)Net income (loss) attributable to common stockholders

$
(177,620
)

$
(183,723
)

$
70,012


$
(139,108
)

$
252,819


$
(177,620
)  33




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Three Months Ended
    September 30, 2008 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
421,635


$



$
12,907


$
(19
)

$
434,523Equipment revenues






61,080







1,094







62,174Other revenues










18,444







(18,444
)


Total revenues






482,715



18,444



14,001



(18,463
)


496,697Operating expenses:Cost of service (exclusive of items shown separately below)






137,129







10,941



(18,362
)


129,708Cost of equipment






110,479







2,578







113,057Selling and marketing






70,134







7,273







77,407General and administrative


1,105



79,118



223



7,177



(101
)


87,522Depreciation and amortization


5



83,798







2,230







86,033Impairment of assets










177











177Total operating expenses


1,110



480,658



400



30,199



(18,463
)


493,904Loss on sale or disposal of assets






(402
)














(402
)Operating income (loss)


(1,110
)


1,655



18,044



(16,198
)






2,391Equity in net loss of consolidated subsidiaries


(51,137
)


(15,345
)










66,482



Equity in net income of investee






230















230Interest income


6,067



16,020







876



(18,891
)


4,072Interest expense


(3,082
)


(51,489
)






(7,844
)


17,063



(45,352
)Other income, net






1,115















1,115Income (loss) before income taxes


(49,262
)


(47,814
)


18,044



(23,166
)


64,654



(37,544
)Income tax expense






(2,335
)


(7,391
)










(9,726
)Net income (loss)


(49,262
)


(50,149
)


10,653



(23,166
)


64,654



(47,270
)Accretion of redeemable noncontrolling interests, net of tax






(988
)






(1,004
)






(1,992
)Net income (loss) attributable to common stockholders

$
(49,262
)

$
(51,137
)

$
10,653


$
(24,170
)

$
64,654


$
(49,262
)  34




---



##### Table of Contents



Condensed
    Consolidating Statement of Operations for the Nine Months Ended
    September 30, 2008 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedRevenues:Service revenues

$



$
1,213,172


$



$
37,461


$
(38
)

$
1,250,595Equipment revenues






186,149







3,195







189,344Other revenues










53,376







(53,376
)


Total revenues






1,399,321



53,376



40,656



(53,414
)


1,439,939Operating expenses:Cost of service (exclusive of items shown separately below)






387,937







24,904



(53,106
)


359,735Cost of equipment






324,715







7,690







332,405Selling and marketing






195,831







13,952







209,783General and administrative


3,926



219,440



682



16,922



(308
)


240,662Depreciation and amortization


24



248,348







6,467







254,839Impairment of assets










177











177Total operating expenses


3,950



1,376,271



859



69,935



(53,414
)


1,397,601Gain (loss) on sale or disposal of assets






(715
)


1,274











559Operating income (loss)


(3,950
)


22,335



53,791



(29,279
)






42,897Equity in net loss of consolidated subsidiaries


(94,249
)


(22,465
)










116,714



Equity in net loss of investee






(1,127
)














(1,127
)Interest income


6,483



43,788







2,032



(40,864
)


11,439Interest expense


(3,288
)


(121,175
)






(24,405
)


39,758



(109,110
)Other income (expense), net


367



(3,595
)














(3,228
)Income (loss) before income taxes


(94,637
)


(82,239
)


53,791



(51,652
)


115,608



(59,129
)Income tax expense






(9,123
)


(20,560
)










(29,683
)Net income (loss)


(94,637
)


(91,362
)


33,231



(51,652
)


115,608



(88,812
)Accretion of redeemable noncontrolling interests, net of tax






(2,887
)






(2,938
)






(5,825
)Net income (loss) attributable to common stockholders

$
(94,637
)

$
(94,249
)

$
33,231


$
(54,590
)

$
115,608


$
(94,637
)  35




---



##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Nine Months Ended
    September 30, 2009 (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

$
11


$
265,465


$



$
(70,523
)

$
(128
)

$
194,825Investing activities:Purchases of and changes in prepayments for property and
    equipment






(528,927
)






(43,238
)






(572,165
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs






(32,717
)






(1,594
)






(34,311
)Proceeds from the sale of wireless licenses






2,965















2,965Purchases of investments






(640,193
)














(640,193
)Sales and maturities of investments






487,270















487,270Investments in and advances to affiliates and consolidated
    subsidiaries


(265,907
)














265,907



Purchase of membership units of equity method investment






















Change in restricted cash






676







30







706Net cash used in investing activities


(265,907
)


(710,926
)






(44,802
)


265,907



(755,728
)Financing activities:Issuance of long-term debt






1,057,474















1,057,474Issuance of related party debt






(123,000
)






123,000







Repayment of long-term debt






(877,500
)






(3,404
)






(880,904
)Payment of debt issuance costs






(15,094
)














(15,094
)Capital contributions, net


265,907



265,907











(265,907
)


265,907Noncontrolling interests distribution






















Other






(1,227
)






(128
)


128



(1,227
)Net cash provided by financing activities


265,907



306,560







119,468



(265,779
)


426,156Net increase (decrease) in cash and cash equivalents


11



(138,901
)






4,143







(134,747
)Cash and cash equivalents at beginning of period


27



333,119







24,562







357,708Cash and cash equivalents at end of period

$
38


$
194,218


$



$
28,705


$



$
222,961  36




---



##### Table of Contents



Condensed
    Consolidating Statement of Cash Flows for the Nine Months Ended
    September 30, 2008 (unaudited and in thousands):
  ConsolidatingGuarantor











andParent


Issuing


Guarantor


Non-Guarantor


EliminatingCompany


Subsidiary


Subsidiaries


Subsidiaries


Adjustments


ConsolidatedOperating activities:Net cash provided by operating activities

$
999


$
250,306


$



$
20,011


$
(47
)

$
271,269Investing activities:Acquisition of a business, net of cash acquired






(31,201
)














(31,201
)Purchases of and changes in prepayments for property and
    equipment






(406,120
)






(127,080
)






(533,200
)Purchases of and deposits for wireless licenses and spectrum
    clearing costs






(74,167
)






(531
)






(74,698
)Return of deposit for wireless licenses






70,000















70,000Purchases of investments






(446,590
)














(446,590
)Sales and maturities of investments






329,939







11,300







341,239Investments in and advances to affiliates and consolidated
    subsidiaries


(7,068
)














7,068



Purchase of membership units of equity method investment






(1,033
)














(1,033
)Change in restricted cash


68



(2,393
)






345







(1,980
)Net cash used in investing activities


(7,000
)


(561,565
)






(115,966
)


7,068



(677,463
)Financing activities:Issuance of long-term debt


242,500



293,250















535,750Issuance of related party debt


(242,500
)


134,866







107,634







Repayment of long-term debt






(6,750
)






(1,000
)






(7,750
)Payment of debt issuance costs


(1,049
)


(6,458
)














(7,507
)Capital contributions, net


7,068



7,068











(7,068
)


7,068Noncontrolling interests distribution














(47
)


47



Other






(12,900
)














(12,900
)Net cash provided by financing activities


6,019



409,076







106,587



(7,021
)


514,661Net increase in cash and cash equivalents


18



97,817







10,632







108,467Cash and cash equivalents at beginning of period


62



399,153







34,122







433,337Cash and cash equivalents at end of period

$
80


$
496,970


$



$
44,754


$



$
541,804  37




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.    Form 10-K
  Cautionary
    Statement Regarding Forward-Looking Statements
    
    our ability to attract and retain customers in an extremely
    competitive marketplace;
    the duration and severity of the current economic downturn in
    the United States and changes in economic conditions, including
    interest rates, consumer credit conditions, consumer debt
    levels, consumer confidence, unemployment rates, energy costs
    and other macro-economic factors that could adversely affect
    demand for the services we provide;
    the impact of competitors initiatives;
    our ability to successfully implement product offerings and
    execute effectively on our other strategic activities;
    our ability to obtain roaming services from other carriers at
    cost-effective rates;
    our ability to maintain effective internal control over
    financial reporting;
    our ability to attract, motivate and retain an experienced
    workforce;
    our ability to comply with the covenants in any credit
    agreement, indenture or similar instrument governing any of our
    existing or future indebtedness;
    failure of our network or information technology systems to
    perform according to expectations; and
    other factors detailed in Part II 
    Item 1A. Risk Factors below.   38




---



##### Table of Contents



Overview
  Company
    Overview
  ®
      tm tm
   39




---



##### Table of Contents



voice-over-internet-protocol
     40




---



##### Table of Contents



end-of-period
        Critical
    Accounting Policies and Estimates
   41




---



##### Table of Contents



Wireless
    Licenses
    and/or
  Goodwill
    and Other Intangible Assets
    Impairment
    of Indefinite-Lived Intangible Assets
   42




---



##### Table of Contents



Wireless
    Licenses
         43




---



##### Table of Contents



Goodwill
           44




---



##### Table of Contents



Results
    of Operations
  Operating
    Items
    Three Months Ended September 30,% of 2009





% of 2008


Change fromService





Service


Prior Year2009


Revenues


2008


Revenues


Dollars


PercentRevenues:Service revenues

$
541,268






$
434,523






$
106,745



24.6
%Equipment revenues


58,200







62,174







(3,974
)


(6.4
)%Total revenues


599,468







496,697







102,771



20.7
%Operating expenses:Cost of service


156,707



29.0
%


129,708



29.9
%


26,999



20.8
%Cost of equipment


133,502



24.7
%


113,057



26.0
%


20,445



18.1
%Selling and marketing


111,702



20.6
%


77,407



17.8
%


34,295



44.3
%General and administrative


87,077



16.1
%


87,522



20.1
%


(445
)


(0.5
)%Depreciation and amortization


107,876



19.9
%


86,033



19.8
%


21,843



25.4
%Impairment of assets


639



0.1
%


177



0.0
%


462



261.0
%Total operating expenses


597,503



110.4
%


493,904



113.7
%


103,599



21.0
%Loss on sale or disposal of assets


(591
)


(0.1
)%


(402
)


(0.1
)%


(189
)


(47.0
)%Operating income

$
1,374



0.3
%

$
2,391



0.6
%

$
(1,017
)


(42.5
)%   45




---



##### Table of Contents



Nine Months Ended September 30,% of 2009





% of 2008


Change fromService





Service


Prior Year2009


Revenues


2008


Revenues


Dollars


PercentRevenues:Service revenues

$
1,596,858






$
1,250,595






$
346,263



27.7
%Equipment revenues


187,005







189,344







(2,339
)


(1.2
)%Total revenues


1,783,863







1,439,939







343,924



23.9
%Operating expenses:Cost of service


455,618



28.5
%


359,735



28.8
%


95,883



26.7
%Cost of equipment


419,073



26.2
%


332,405



26.6
%


86,668



26.1
%Selling and marketing


311,913



19.5
%


209,783



16.8
%


102,130



48.7
%General and administrative


274,192



17.2
%


240,662



19.2
%


33,530



13.9
%Depreciation and amortization


297,230



18.6
%


254,839



20.4
%


42,391



16.6
%Impairment of assets


639



0.0
%


177



0.0
%


462



261.0
%Total operating expenses


1,758,665



110.1
%


1,397,601



111.8
%


361,064



25.8
%Gain on sale or disposal of assets


1,436



0.1
%


559



0.0
%


877



156.9
%Operating income

$
26,634



1.7
%

$
42,897



3.4
%

$
(16,263
)


(37.9
)%     ChangeFor the Three Months Ended September 30(1):

2009

2008

Amount

PercentGross customer additions


851,230



593,619



257,611



43.4
%Net customer additions


116,182



155,779



(39,597
)


25.4
%Weighted-average number of customers


4,555,605



3,371,932



1,183,673



35.1
%   ChangeFor the Nine Months Ended September 30(1):

2009

2008

Amount

PercentGross customer additions


2,532,074



1,686,143



845,931



50.2
%Net customer additions


811,702



557,012



254,690



45.7
%Weighted-average number of customers


4,348,973



3,163,480



1,185,493



37.5
%As of September
    30:Total customers


4,656,362



3,460,140



1,196,222



34.6
%     (1)
    
    We recognize a gross customer addition for each Cricket
    Wireless, Cricket Broadband and Cricket PAYGo line of service
    activated by a customer.  Three
    and Nine Months Ended September 30, 2009 Compared to Three
    and Nine Months Ended September 30, 2008
  Service
    Revenues
   46




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Equipment
    Revenues
      Cost of
    Service
      Cost of
    Equipment
   47




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##### Table of Contents



Selling
    and Marketing Expenses
      General
    and Administrative Expenses
      Depreciation
    and Amortization
    Impairment
    of Assets
   48




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Gain
    (Loss) on Sale or Disposal of Assets
      Non-Operating
    Items
    Three Months Ended September 30,2009

2008

ChangeEquity in net income of investee

$
996


$
230


$
766Interest income


727



4,072



(3,345
)Interest expense


(59,129
)


(45,352
)


(13,777
)Other income (expense), net


(17
)


1,115



(1,132
)Income tax expense


(9,358
)


(9,726
)


368   Nine Months Ended September 30,2009

2008

ChangeEquity in net income (loss) of investee

$
2,990


$
(1,127
)

$
4,117Interest income


2,314



11,439



(9,125
)Interest expense


(150,040
)


(109,110
)


(40,930
)Other expense, net


(126
)


(3,228
)


3,102Loss on extinguishment of debt


(26,310
)






(26,310
)Income tax expense


(29,412
)


(29,683
)


271   Three
    and Nine Months Ended September 30, 2009 Compared to Three
    and Nine Months Ended September 30, 2008
  Equity in
    Net Income (Loss) of Investee
    Interest
    Income
      Interest
    Expense
   49




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Loss on
    Extinguishment of Debt
    Income
    Tax Expense
  year-to-date
   50




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Subscriber
    Recognition and Disconnect Policies
  Pay-in-advance
   51




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##### Table of Contents



Performance
    Measures
  Regulation S-K
       52




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##### Table of Contents



pay-in-advance
    Three Months EndedSeptember 30,2009

2008ARPU

$
39.60


$
42.95CPGA

$
208


$
201CCU

$
17.73


$
21.50Churn


5.4
%


4.2
%   Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
 53




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##### Table of Contents



Three Months Ended September 30,2009


2008Selling and marketing expense

$
111,702


$
77,407Less share-based compensation expense included in selling and
    marketing expense


(1,866
)


(871
)Plus cost of equipment


133,502



113,057Less equipment revenue


(58,200
)


(62,174
)Less net loss on equipment transactions unrelated to initial
    customer acquisition


(7,708
)


(7,880
)Total costs used in the calculation of CPGA

$
177,430


$
119,539Gross customer additions


851,230



593,619CPGA

$
208


$
201     Three Months EndedSeptember 30,2009


2008Cost of service

$
156,707


$
129,708Plus general and administrative expense


87,077



87,522Less share-based compensation expense included in cost of
    service and general and administrative expense


(9,141
)


(7,595
)Plus net loss on equipment transactions unrelated to initial
    customer acquisition


7,708



7,880Total costs used in the calculation of CCU

$
242,351


$
217,515Weighted-average number of customers


4,555,605



3,371,932CCU

$
17.73


$
21.50   Liquidity
    and Capital Resources
  Overview
     54




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slower-than-anticipated
         55




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##### Table of Contents



Cash
    Flows
  Operating
    Activities
    Investing
    Activities
    
    During the nine months ended September 30, 2009, we and our
    consolidated joint ventures purchased $577.5 million of
    property and equipment for the build-out of our new markets and
    the expansion and improvement of our existing markets.
    In June 2009, we completed our purchase of certain wireless
    spectrum in St. Louis for approximately $27.2 million.
    During the nine months ended September 30, 2009, we made
    investment purchases of $640.2 million, offset by sales or
    maturities of investments of $487.3 million.  Financing
    Activities
    
    During the nine months ended September 30, 2009, we issued
    $1,100 million of senior secured notes, and we used a
    portion of the $1,057.5 million net cash proceeds from the
    issuance to repay all principal amounts outstanding under our
    Credit Agreement, which amounted to $875.3 million. In
    addition, we incurred $15.1 million in debt issuance costs
    in connection with the issuance of the senior secured notes.
    Additionally, we made payments of $2.3 million under our
    former Credit Agreement during the first quarter of 2009 and LCW
    Operations made payments of $3.4 million under its senior
    secured credit agreement during the nine months ended
    September 30, 2009. 56




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##### Table of Contents




    During the nine months ended September 30, 2009, we sold an
    aggregate of 7,000,000 shares of Leap common stock in an
    underwritten public offering, resulting in aggregate net
    proceeds of $263.7 million. In addition, during the nine
    months ended September 30, 2009, we issued common stock
    upon the exercise of stock options held by our employees,
    resulting in aggregate net proceeds of $2.2 million.  Senior
    Secured Credit Facilities
  Cricket
    Communications
    LCW
    Operations
    Senior
    Notes
  Unsecured
    Senior Notes Due 2014
     57




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##### Table of Contents



Convertible
    Senior Notes Due 2014
     58




---



##### Table of Contents



Unsecured
    Senior Notes Due 2015
     59




---



##### Table of Contents



Senior
    Secured Notes Due 2016
       60




---



##### Table of Contents



pari passu
           61




---



##### Table of Contents



90-day 90-day Form S-4
  Fair
    Value of Financial Instruments
         62




---



##### Table of Contents



System
    Equipment Purchase Agreements
  and/or
  Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  Capital
    Expenditures
        Other
    Acquisitions and Dispositions
      Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
   63




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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)
 64




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##### Table of Contents



(b) Changes in Internal Control over Financial
    Reporting
    Item 4T.
    Controls
    and Procedures.   65




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##### Table of Contents



PART II



OTHER
    INFORMATION  Item 1.
    Legal
    Proceedings.      and/or
  Patent
    Litigation
  Freedom
    Wireless
  ® tm
  Electronic
    Data Systems
    DNT
  and/or
 66




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##### Table of Contents



Digital
    Technology Licensing
  and/or ® and/or and/or
  On The
    Go
    American
    Wireless Group
  and/or
  and/or
 67




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##### Table of Contents



Securities
    and Derivative Litigation
  and/or
  Rule 10b-5, class-wide
  and/or
 68




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##### Table of Contents



Department
    of Justice Inquiry
    Other
    Litigation
    Item 1A.
    Risk
    Factors.  Form 10-K Form 10-Q Form 10-Q
  
    changes in the Risk Factors below entitled We Have Made
    Significant Investment, and May Continue to Invest, in Joint
    Ventures That We Do Not Control and Your Ownership
    Interest in Leap Will Be Diluted Upon Issuance of Shares We
    Have Reserved for Future Issuances, and Future Issuances or
    Sales of Such Shares May Adversely Affect the Market Price
    of Leap Common Stock, which have been updated to reflect
    CSMs exercise of its right to put its entire membership
    interest in LCW Wireless to Cricket;
    changes to the Risk Factor below entitled We Expect to
    Incur Higher Operating Expenses in Recently Launched Markets,
    and We May Incur Substantial Costs if We Elect to Build Out
    Additional New Markets, which has been updated to reflect
    our current plans with respect to the launch of additional new
    markets; and
    changes in the Risk Factor below entitled 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, which
    has been updated to reflect declines in the trading price of
    Leap common stock.  Risks
    Related to Our Business and Industry
  We Have
    Experienced Net Losses, and We May Not Be Profitable in the
    Future.
   69




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##### Table of Contents



We May
    Not Be Successful in Increasing Our Customer Base Which Would
    Negatively Affect Our Business Plans and Financial
    Outlook.
  quarter-by-quarter
  General
    Economic Conditions May Adversely Affect Our Business, Financial
    Performance or Ability to Obtain Debt or Equity Financing on
    Reasonable Terms or at All.
       70




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##### Table of Contents



If We
    Experience Low Rates of Customer Acquisition or High Rates of
    Customer Turnover, Our Ability to Become Profitable Will
    Decrease.
    We Have
    Made Significant Investment, and May Continue to Invest, in
    Joint Ventures That We Do Not Control.
   71




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##### Table of Contents



We Face
    Increasing Competition Which Could Have a Material Adverse
    Effect on Demand for Cricket Service.
  voice-over-internet-protocol
    T-Mobile
 72




---



##### Table of Contents



T-Mobile
  and/or
    We May Be
    Unable to Obtain the Roaming Services We Need From Other
    Carriers to Remain Competitive.
     73




---



##### Table of Contents



We
    Restated Certain of Our Prior Consolidated Financial Statements,
    Which Has Led to Additional Risks and Uncertainties, Including
    Shareholder Litigation.
  Form 10-K,
  and/or
  Our
    Business and Stock Price May Be Adversely Affected If Our
    Internal Controls Are Not Effective.
    Form 10-K
 74




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##### Table of Contents



Form 10-K
      Our
    Primary Business Strategy May Not Succeed in the Long
    Term.
    We Expect
    to Incur Higher Operating Expenses in Recently Launched Markets,
    and We May Incur Substantial Costs if We Elect to Build Out
    Additional New Markets.
     75




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##### 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.
   76




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##### Table of Contents




    make it more difficult for us to service all of our debt
    obligations;
    increase our vulnerability to general adverse economic and
    industry conditions;
    impair our ability to obtain additional financing in the future
    for working capital needs, capital expenditures, network
    build-out and other activities, including acquisitions and
    general corporate purposes;
    require us to dedicate a substantial portion of our cash flows
    from operations to the payment of principal and interest on our
    indebtedness, thereby reducing the availability of our cash
    flows to fund working capital needs, capital expenditures,
    acquisitions and other general corporate purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate; and
    place us at a disadvantage compared to our competitors that have
    less indebtedness.    Despite
    Current Indebtedness Levels, We Are Permitted to Incur
    Additional Indebtedness. This Could Further Increase the Risks
    Associated With Our Leverage.
    and/or
    To
    Service Our Indebtedness and Fund Our Working Capital and
    Capital Expenditures, We Will Require a Significant Amount of
    Cash. Our Ability to Generate Cash Depends on Many Factors
    Beyond Our Control.
   77




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##### Table of Contents



We or Our
    Joint Ventures May Be Unable to Refinance Our
    Indebtedness.
    Covenants
    in Our Indentures and Other Credit Agreements or Indentures That
    We May Enter Into in the Future May Limit Our Ability to Operate
    Our Business.
    
    incur additional indebtedness;
    create liens or other encumbrances;
    place limitations on distributions from restricted subsidiaries;
    pay dividends, make investments, prepay subordinated
    indebtedness or make other restricted payments;
    issue or sell capital stock of restricted subsidiaries;
    issue guarantees;
    sell or otherwise dispose of all or substantially all of our
    assets;
    enter into transactions with affiliates; and
    make acquisitions or merge or consolidate with another entity.      Form 10-Q
 78




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##### Table of Contents



A
    Significant Portion of Our Assets Consists of Goodwill and
    Intangible Assets.
    The
    Wireless Industry is Experiencing Rapid Technological Change,
    Which May Require Us to Significantly Increase Capital
    Investment, and We May Lose Customers If We Fail to Keep Up With
    These Changes.
        The Loss
    of Key Personnel and Difficulty Attracting and Retaining
    Qualified Personnel Could Harm Our Business.
   79




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##### Table of Contents



Risks
    Associated With Wireless Handsets Could Pose Product Liability,
    Health and Safety Risks That Could Adversely Affect Our
    Business.
         80




---



##### Table of Contents



We Rely
    Heavily on Third Parties to Provide Specialized Services; a
    Failure by Such Parties to Provide the Agreed Upon Products or
    Services Could Materially Adversely Affect Our Business, Results
    of Operations and Financial Condition.
    System
    Failures, Security Breaches, Business Disruptions and
    Unauthorized Use or Interference with our Network Could Result
    in Higher Churn, Reduced Revenue and Increased Costs, and Could
    Harm Our Reputation.
   81




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##### Table of Contents



We May
    Not Be Successful in Protecting and Enforcing Our Intellectual
    Property Rights.
        We and
    Our Suppliers May Be Subject to Claims of Infringement Regarding
    Telecommunications Technologies That Are Protected By Patents
    and Other Intellectual Property Rights.
     82




---



##### Table of Contents



Regulation
    by Government Agencies May Increase Our Costs of Providing
    Service or Require Us to Change Our Services.
        non-U.S. citizens non-U.S. citizens
 83




---



##### Table of Contents



truth-in-billing;
    If Call
    Volume or Wireless Broadband Usage Exceeds Our Expectations, Our
    Costs of Providing Service Could Increase, Which Could Have a
    Material Adverse Effect on Our Operating Expenses.
     84




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##### Table of Contents



We May Be
    Unable to Acquire Additional Spectrum in the Future at a
    Reasonable Cost or on a Timely Basis.
    Our
    Wireless Licenses are Subject to Renewal and May Be Revoked in
    the Event that We Violate Applicable Laws.
  10-year 15-year
  Future
    Declines in the Fair Value of Our Wireless Licenses Could Result
    in Future Impairment Charges.
      
    consolidation in the wireless industry allows or requires
    carriers to sell significant portions of their wireless spectrum
    holdings;
    a sudden large sale of spectrum by one or more wireless
    providers occurs; or
    market prices decline as a result of the sale prices in FCC
    auctions. 85




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##### Table of Contents



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
  We May
    Incur Higher Than Anticipated Intercarrier Compensation
    Costs.
   86




---



##### 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 Leap Common Stock
  Our Stock
    Price May Be Volatile, and You May Lose All or Some of Your
    Investment.
    
    variations in our operating results or those of our competitors;
    announcements of technological innovations, new services or
    service enhancements, strategic alliances or significant
    agreements by us or by our competitors;
    entry of new competitors into our markets or changes in the
    product and service offerings of our competitors;
    significant developments with respect to intellectual property,
    securities or related litigation;
    announcements of and bidding in auctions for new spectrum;
    recruitment or departure of key personnel;
    changes in the estimates of our operating results or changes in
    recommendations by any securities analysts that elect to follow
    Leap common stock;
    any default under any of the indentures governing our secured or
    unsecured senior notes or convertible senior notes because of a
    covenant breach or otherwise; 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
 87




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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 Common Stock.
         88




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##### Table of Contents



Our
    Directors and Affiliated Entities Have Substantial Influence
    over Our Affairs, and Our Ownership Is Highly Concentrated.
    Sales of a Significant Number of Shares by Large Stockholders
    May Adversely Affect the Market Price of Leap Common
    Stock.
      Provisions
    in Our Amended and Restated Certificate of Incorporation and
    Bylaws, under Delaware Law, or in Our Indentures Might
    Discourage, Delay or Prevent a Change in Control of Our Company
    or Changes in Our Management and, Therefore, Depress the Trading
    Price of Leap Common Stock.
    
    require super-majority voting to amend some provisions in our
    amended and restated certificate of incorporation and bylaws;
    authorize the issuance of blank check preferred
    stock that our board of directors could issue to increase the
    number of outstanding shares to discourage a takeover attempt;
    prohibit stockholder action by written consent, and require that
    all stockholder actions be taken at a meeting of our
    stockholders;
    provide that the board of directors is expressly authorized to
    make, alter or repeal our bylaws; and
    establish advance notice requirements for nominations for
    elections to our board or for proposing matters that can be
    acted upon by stockholders at stockholder meetings. 89




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##### Table of Contents



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 Exhibit4.1(1)

Amended and Restated Registration Rights Agreement, dated as of
    September 3, 2009, by and among Leap, MHR Capital Partners
    Master Account LP, MHR Capital Partners (100) LP, MHR
    Institutional Partners II LP, MHR Institutional Partners
    IIA LP and MHR Institutional Partners III LP.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**

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.     (1)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated September 3, 2009, filed with the SEC on
    September 4, 2009, and incorporated herein by reference.*
    
    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. 90




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##### Table of Contents



SIGNATURES
       By:
    /s/  S.
    Douglas Hutcheson       By:
    /s/  Walter
    Z. Berger    91