##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C. 20549
     FORM 10-Q/A
 (Amendment
    No. 1)
     (Mark One)
  þ
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934.  For the quarterly period ended September 30, 2005
  OR
  o
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934.  For the transition period from
    
    to
    .
  Commission
    File Number 0-29752
   Leap Wireless International,
    Inc.
 (Exact name of registrant as
    specified in its charter)
   Delaware

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

(I.R.S. Employer
    Identification No.)10307 Pacific Center Court,
    San Diego, CA

92121(Address of principal executive
    offices)

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




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##### Table of Contents



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




---



##### 



LEAP
    WIRELESS INTERNATIONAL, INC.
    QUARTERLY REPORT ON
    FORM 10-Q/A
    For the Quarter Ended September 30, 2005
    TABLE OF CONTENTS
  
  PagePART I  FINANCIAL
    INFORMATIONItem 1.


Financial
    Statements


1Item 2.


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


20Item 4.


Controls and
    Procedures


40PART II  OTHER
    INFORMATIONItem 6.


Exhibits


43EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32




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##### Table of Contents



PART I
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements.  LEAP
    WIRELESS INTERNATIONAL, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
  Successor CompanySeptember 30,


December 31,2005


2004(Unaudited)


(As Restated)(As Restated)


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

$
168,288


$
141,141Short-term investments


223,497



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


21,588



31,427Inventories


22,979



25,816Other current assets


28,669



37,531Total current assets


465,021



348,998Property and equipment, net


532,744



575,486Wireless licenses


829,512



652,653Assets held for sale (Note 7)


9,756



Goodwill


437,382



457,637Other intangible assets, net


123,617



151,461Deposits for wireless licenses






24,750Other assets


18,244



9,902Total assets

$
2,416,276


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

$
76,185


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


6,111



40,373Other current liabilities


59,066



71,770Total current liabilities


141,362



203,236Long-term debt (Note 5)


589,861



371,355Other long-term liabilities


177,105



176,240Total liabilities


908,328



750,831Minority interest


1,730



Commitments and contingencies
    (Notes 2, 5 and 8)Stockholders equity:Preferred
    stock  authorized 10,000,000 shares;
    $.0001 par value, no shares issued and outstanding






Common
    stock  authorized 160,000,000 shares;
    $.0001 par value, 61,160,538 and 60,000,000 shares
    issued and outstanding at September 30, 2005 and
    December 31, 2004, respectively


6



6Additional paid-in capital


1,511,648



1,478,392Unearned stock-based compensation


(23,405
)


Retained earnings (accumulated
    deficit)


16,625



(8,391
)Accumulated other comprehensive
    income


1,344



49Total stockholders equity


1,506,218



1,470,056Total liabilities and
    stockholders equity

$
2,416,276


$
2,220,887    1




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##### Table of Contents



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


CompanyThree Months


Two Months


One MonthEnded


Ended


EndedSeptember 30,


September 30,


July 31,2005


2004


2004(As Restated)


(As Restated)(See Note 3)


(See Note 3)Revenues:Service revenues

$
193,675


$
113,011


$
57,375Equipment revenues


36,852



24,772



11,749Total revenues


230,527



137,783



69,124Operating expenses:Cost of service (exclusive of
    items shown separately below)


(50,304
)


(32,873
)


(18,161
)Cost of equipment


(49,576
)


(31,383
)


(12,770
)Selling and marketing


(25,535
)


(16,769
)


(6,805
)General and administrative


(41,306
)


(21,707
)


(8,982
)Depreciation and amortization


(49,076
)


(29,547
)


(26,273
)Impairment of indefinite-lived
    intangible assets


(689
)






Total operating expenses


(216,486
)


(132,279
)


(72,991
)Gain on sale of wireless licenses
    and operating assets (Note 7)


14,593







532Operating income (loss)


28,634



5,504



(3,335
)Interest income


2,991



608



Interest expense (contractual
    interest expense was $22.7 million for the one month ended
    July 31, 2004)


(6,679
)


(5,545
)


(464
)Other income (expense), net


2,352



155



303Income (loss) before
    reorganization items and income taxes


27,298



722



(3,496
)Reorganization items, net










963,156Income before income taxes


27,298



722



959,660Income taxes


(10,901
)


(2,556
)


(295
)Net income (loss)


16,397



(1,834
)


959,365Other comprehensive income (loss):Unrealized holding gains (losses)
    on investments, net


120



(110
)


Unrealized gains on derivative
    instruments


2,007







Comprehensive income (loss)

$
18,524


$
(1,944
)

$
959,365Net income (loss) per share:Basic

$
0.27


$
(0.03
)

$
16.36Diluted

$
0.27


$
(0.03
)

$
16.36Shares used in per share
    calculations:Basic


60,246



60,000



58,631Diluted


61,395



60,000



58,631    2




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##### Table of Contents



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


CompanyNine Months


Two Months


Seven MonthsEnded


Ended


EndedSeptember 30,


September 30,


July 31,2005


2004


2004(As Restated)


(As Restated)(See Note 3)


(See Note 3)Revenues:Service revenues

$
569,360


$
113,011


$
398,451Equipment revenues


116,366



24,772



83,196Total revenues


685,726



137,783



481,647Operating expenses:Cost of service (exclusive of
    items shown separately below)


(150,109
)


(32,873
)


(113,988
)Cost of equipment


(141,553
)


(31,383
)


(97,160
)Selling and marketing


(73,340
)


(16,769
)


(51,997
)General and administrative


(119,764
)


(21,707
)


(81,514
)Depreciation and amortization


(144,461
)


(29,547
)


(178,120
)Impairment of indefinite-lived
    intangible assets


(12,043
)






Total operating expenses


(641,270
)


(132,279
)


(522,779
)Gain on sale of wireless licenses
    and operating assets (Note 7)


14,593







532Operating income (loss)


59,049



5,504



(40,600
)Interest income


6,070



608



Interest expense (contractual
    interest expense was $156.3 million for the seven months
    ended July 31, 2004)


(23,368
)


(5,545
)


(4,195
)Other income (expense), net


1,027



155



(293
)Income (loss) before
    reorganization items and income taxes


42,778



722



(45,088
)Reorganization items, net










962,444Income before income taxes


42,778



722



917,356Income taxes


(17,762
)


(2,556
)


(4,166
)Net income (loss)


25,016



(1,834
)


913,190Other comprehensive income (loss):Unrealized holding gains (losses)
    on investments, net


82



(110
)


Unrealized gains on derivative
    instruments


1,213







Comprehensive income (loss)

$
26,311


$
(1,944
)

$
913,190Net income (loss) per share:Basic

$
0.42


$
(0.03
)

$
15.58Diluted

$
0.41


$
(0.03
)

$
15.58Shares used in per share
    calculations:Basic


60,093



60,000



58,623Diluted


60,727



60,000



58,623    3




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##### Table of Contents



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


CompanyNine Months


Two Months


Seven MonthsEnded


Ended


EndedSeptember 30,


September 30,


July 31,2005


2004


2004Operating activities:Net cash provided by operating
    activities

$
191,191


$
27,045


$
120,623Investing activities:Purchases of property and equipment


(82,259
)


(13,568
)


(34,456
)Prepayments for purchases of
    property and equipment


(1,137
)


3,135



1,215Purchases of and deposits for
    wireless licenses


(243,987
)






Proceeds from sale of wireless
    licenses and operating assets


99,050







2,000Purchases of investments


(270,587
)


(12,798
)


(87,201
)Sales and maturities of investments


158,501



7,300



58,333Restricted cash, cash equivalents
    and short-term investments, net


83



11,453



9,810Net cash used in investing
    activities


(340,336
)


(4,478
)


(50,299
)Financing activities:Proceeds from long-term debt


600,000







Repayment of long-term debt


(416,757
)


(36,727
)


Payment of debt issuance costs


(6,951
)






Net cash provided by (used in)
    financing activities


176,292



(36,727
)


Net increase (decrease) in cash
    and cash equivalents


27,147



(14,160
)


70,324Cash and cash equivalents at
    beginning of period


141,141



154,394



84,070Cash and cash equivalents at end
    of period

$
168,288


$
140,234


$
154,394Supplementary disclosure of cash
    flow information:Cash paid for interest

$
44,951


$
8,227


$
Cash paid for income taxes


280



140



76Cash provided by (paid for)
    reorganization activities (included in net cash provided by
    operating activities):Payments to Leap Creditor Trust










(990
)Payments for professional fees










(7,975
)Cash received from vendor
    settlements, net of cure amounts paid










1,984Interest income










1,485Supplementary disclosure of
    non-cash investing and financing activities:Issuance of restricted stock
    awards under stock compensation plan


3,897







    4




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##### Table of Contents



LEAP
    WIRELESS INTERNATIONAL, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
  Note 1.
    The
    Company and Nature of Business  ®
    Note 2.
    Reorganization
    and Fresh-Start Reporting  pay-in-kind Form 10-K Form 10-K
  SOP 90-7,
  SOP 90-7
 5




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##### Table of Contents



SOP 90-7, Form 10-K Form 10-K
    Note 3.
    Basis of
    Presentation and Significant Accounting Policies  Interim
    Financial Statements
  Form 10-Q Form 10-K
  Principles
    of Consolidation
  No. 46-R,
  Restatement
    of Previously Reported Unaudited Interim Consolidated Financial
    Information
   6




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##### Table of Contents




    The tax bases of several wireless licenses were inaccurately
    compiled by the Company during its adoption of fresh-start
    reporting as of July 31, 2004, which had the effect in the
    aggregate of understating wireless license deferred tax
    liabilities and overstating wireless license deferred tax
    assets. In addition, the misstatement of the tax bases of
    operating licenses with deferred tax liabilities had the net
    effect of overstating deferred income tax expense in the periods
    subsequent to July 31, 2004.
    The Company incorrectly accounted for tax-deductible goodwill
    upon the adoption of fresh-start reporting as of July 31,
    2004, which had the effect of understating deferred tax
    liabilities and understating deferred income tax expense in the
    periods subsequent to July 31, 2004.
    In connection with the adoption of fresh-start reporting as of
    July 31, 2004, the Company adopted the practice of netting
    deferred tax assets associated with wireless licenses against
    deferred tax liabilities associated with wireless licenses and,
    as a result, did not record valuation allowances on its wireless
    license deferred tax assets. However, because the Companys
    wireless licenses have indefinite useful lives, the deferred tax
    liabilities related to the licenses will not reverse until some
    indefinite future period when a license is either sold or
    written down due to impairment. As a result, the wireless
    license deferred tax liabilities may not be used to support the
    realization of the wireless license deferred tax assets and,
    thus, may not be used to offset the wireless license deferred
    tax assets. Accordingly, the Company has now determined that the
    netting of deferred tax assets associated with wireless licenses
    against deferred tax liabilities associated with wireless
    licenses was not appropriate. Instead, valuation allowances
    should have been recorded on the wireless license deferred tax
    assets.
    The Company incorrectly accounted for the release of valuation
    allowances on deferred tax assets recorded in fresh-start
    reporting. The Company previously concluded that there had been
    no release of fresh-start valuation allowances during the three
    and nine months ended September 30, 2005. However, the
    reversal of deferred tax assets recorded in fresh-start
    reporting resulted in a release of the related fresh-start
    valuation allowances. As restated, the release of fresh-start
    valuation allowances is recorded as a reduction of goodwill and
    resulted in deferred income tax expense for the three and nine
    months ended September 30, 2005.    As of and for the Two Months
    EndedSeptember 30,
    2004PreviouslyReported


Adjustment


As Restated(Unaudited)


(Unaudited)


(Unaudited)Consolidated Balance Sheet
    Data:Other current assets

$
33,656


$
2,903


$
36,559Goodwill

$
328,820


$
128,225


$
457,045Other current liabilities

$
67,271


$
(159
)

$
67,112Other long-term liabilities

$
31,194


$
131,139


$
162,333Accumulated deficit

$
(1,982
)

$
148


$
(1,834
)Consolidated Statement of
    Operations Data:Income tax expense

$
2,704


$
(148
)

$
2,556Net loss

$
(1,982
)

$
148


$
(1,834
)Comprehensive loss

$
(2,092
)

$
148


$
(1,944
)Basic and diluted net loss per
    share

$
(0.03
)

$
0.00


$
(0.03
)   7




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##### Table of Contents



As of December 31,
    2004PreviouslyReported


Adjustment


As RestatedConsolidated Balance Sheet
    Data:Other current assets

$
35,144


$
2,387


$
37,531Goodwill

$
329,619


$
128,018


$
457,637Other current liabilities

$
71,965


$
(195
)

$
71,770Other long-term liabilities

$
45,846


$
130,394


$
176,240Accumulated deficit

$
(8,629
)

$
238


$
(8,391
)Accumulated other comprehensive
    income

$
81


$
(32
)

$
49   As of and for the Three Months
    EndedSeptember 30,
    2005PreviouslyReported


Adjustment


As Restated(Unaudited)


(Unaudited)


(Unaudited)Consolidated Balance Sheet
    Data:Other current assets

$
26,282


$
2,387


$
28,669Goodwill

$
329,619


$
107,763


$
437,382Other current liabilities

$
59,513


$
(447
)

$
59,066Other long-term liabilities

$
83,286


$
93,819


$
177,105Retained earnings (accumulated
    deficit)

$
(1,016
)

$
17,641


$
16,625Accumulated other comprehensive
    income

$
2,207


$
(863
)

$
1,344Consolidated Statement of
    Operations Data:Income tax expense

$
34,860


$
(23,959
)

$
10,901Net income (loss)

$
(7,562
)

$
23,959


$
16,397Comprehensive income (loss)

$
(4,148
)

$
22,672


$
18,524Basic and diluted net income
    (loss) per share

$
(0.13
)

$
0.40


$
0.27   For the Nine Months EndedSeptember 30,
    2005PreviouslyReported


Adjustment


As Restated(Unaudited)


(Unaudited)


(Unaudited)Consolidated Statement of
    Operations Data:Income tax expense

$
35,165


$
(17,403
)

$
17,762Net income

$
7,613


$
17,403


$
25,016Comprehensive income

$
9,739


$
16,572


$
26,311Basic net income per share

$
0.13


$
0.29


$
0.42Diluted net income per share

$
0.13


$
0.28


$
0.41   Reorganization
    Items
   8




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##### Table of Contents



Restricted
    Cash, Cash Equivalents and Short-Term Investments
    Revenues
    and Cost of Revenues
  month-to-month
  and/or
  Property
    and Equipment
     9




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##### Table of Contents



construction-in-progress construction-in-progress,
    Impairment
    of Long-Lived Assets
    Wireless
    Licenses
    Goodwill
    and Other Intangible Assets
    Impairment
    of Indefinite-lived Intangible Assets
   10




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##### Table of Contents



Basic
    and Diluted Net Income (Loss) Per Share
      PredecessorSuccessor Company


CompanyThree Months


Two Months


One MonthEnded


Ended


EndedSeptember 30,


September 30,


July 31,2005


2004


2004(As Restated)Weighted average shares
    outstanding  basic earnings per share


60,246



60,000



58,631Effect of dilutive securities


1,149







Adjusted weighted average shares
    outstanding  diluted earnings per share


61,395



60,000



58,631   PredecessorSuccessor Company


CompanyNine Months


Two Months


Seven MonthsEnded


Ended


EndedSeptember 30,


September 30,


July 31,2005


2004


2004Weighted average shares
    outstanding  basic earnings per share


60,093



60,000



58,623Effect of dilutive securities:Non-qualified stock options


62







Restricted stock awards


327







Warrants to MCG


245







Adjusted weighted average shares
    outstanding  diluted earnings per share


60,727



60,000



58,623     Stock-based
    Compensation
   11




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##### Table of Contents



30-day
      Three Months


Nine MonthsEnded


EndedSeptember 30,
    2005Stock-based compensation expense
    included in:Cost of service

$
217


$
1,014Selling and marketing expenses


203



896General and administrative expenses


2,301



7,941Total stock-based compensation
    expense

$
2,721


$
9,851  12




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##### Table of Contents



PredecessorSuccessor Company


CompanyThree Months


Two Months


One MonthEnded


Ended


EndedSeptember 30,


September 30,


July 31,2005


2004


2004(As Restated)


(As Restated)As reported net income (loss)

$
16,397


$
(1,834
)

$
959,365Add back stock-based compensation
    expense included in net income (loss)


2,721







18Less net pro forma compensation
    (expense) benefit


(4,962
)






1,336Pro forma net income (loss)

$
14,156


$
(1,834
)

$
960,719Basic net income (loss) per share:As reported

$
0.27


$
(0.03
)

$
16.36Pro forma

$
0.24


$
(0.03
)

$
16.39Diluted net income (loss) per
    share:As reported

$
0.27


$
(0.03
)

$
16.36Pro forma

$
0.23


$
(0.03
)

$
16.39   PredecessorSuccessor Company


CompanyNine Months


Two Months


Seven MonthsEnded


Ended


EndedSeptember 30,


September 30,


July 31,2005


2004


2004(As Restated)


(As Restated)As reported net income (loss)

$
25,016


$
(1,834
)

$
913,190Add back stock-based compensation
    (benefit) expense included in net income (loss)


9,851







(837
)Less net pro forma compensation
    (expense) benefit


(15,002
)






6,209Pro forma net income (loss)

$
19,865


$
(1,834
)

$
918,562Basic net income (loss) per share:As reported

$
0.42


$
(0.03
)

$
15.58Pro forma

$
0.33


$
(0.03
)

$
15.67Diluted net income (loss) per
    share:As reported

$
0.41


$
(0.03
)

$
15.58Pro forma

$
0.33


$
(0.03
)

$
15.67  13




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##### Table of Contents



Three Months


Nine MonthsEnded


EndedSeptember 30,
    2005Risk free interest rate


3.93
%


3.61
%Expected dividend yield






Expected volatility


87
%


87
%Expected life (in years)


6.5



5.7   Employee
    Stock Purchase Plan
    Reclassifications
    Recent
    Accounting Pronouncements
  No. FAS 13-1, No. FAS 13-1
 14




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##### Table of Contents



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


December 31,2005


2004(Unaudited)(As Restated)


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

$
642,943


$
599,598Computer equipment and other


33,247



26,285Construction-in-progress


33,584



10,517709,774



636,400Accumulated depreciation


(177,030
)


(60,914
)$
532,744


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

$
28,337


$
35,184Accrued payroll and related
    benefits


11,557



13,579Other accrued liabilities


36,291



42,330$
76,185


$
91,093Other current liabilities:Accrued taxes

$
33,002


$
49,665Deferred revenue


20,645



18,145Accrued interest






1,025Other


5,419



2,935$
59,066


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

$
143,962


$
145,673Other


33,143



30,567$
177,105


$
176,240   Note 5.
    Debt  Credit
    Agreement
     15




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##### Table of Contents



pay-in-kind
            Senior
    Secured
    Pay-In-Kind
    Notes Issued Under Plan of Reorganization
  pay-in-kind
 16




---



##### Table of Contents



US
    Government Financing
    Note 6.
    Income
    Taxes  SOP 90-7,
  Note 7.
    Significant
    Acquisitions and Dispositions           17




---



##### Table of Contents



Note 8.
    Commitments
    and Contingencies    and/or
  and/or
   18




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##### Table of Contents



Year Ended
    December 31:Remainder of 2005

$
13,6302006


39,1442007


25,7962008


23,0922009


20,788Thereafter


103,231Total

$
225,681  19




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  As used in this report, the terms we,
    our, ours, and us refer to
    Leap Wireless International, Inc., a Delaware corporation, and
    its subsidiaries, unless the context suggests otherwise.
    Leap refers to Leap Wireless International, Inc.,
    and Cricket refers to Cricket Communications, Inc.
    Unless otherwise specified, information relating to population
    and potential customers, or POPs, is based on 2005 population
    estimates provided by Claritas Inc.
  Form 10-K
    
    our ability to attract and retain customers in an extremely
    competitive marketplace;
    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;
    our ability to comply with the covenants in our senior secured
    credit facilities;
    our ability to attract, motivate and retain an experienced
    workforce;
    failure of network systems to perform according to
    expectations; and
    other factors detailed in the section entitled Risk
    Factors included in this report.    Overview
  Restatement of Previously Reported Unaudited Interim
    Consolidated Financial Information.
  Our Business.
 20




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Form 10-K
  Voluntary Reorganization Under
    Chapter 11.
  pay-in-kind pay-in-kind
  Fresh-Start Reporting. Position 90-7, SOP 90-7, SOP 90-7, Form 10-K Form 10-K
 21




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Form 10-K
  Results
    of Operations
   22




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##### Table of Contents



Financial
    Performance
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2005


2004


2005


2004(As Restated)


(As Restated)


(As Restated)


(As Restated)Revenues:Service revenues

$
193,675


$
170,386


$
569,360


$
511,462Equipment revenues


36,852



36,521



116,366



107,968Total revenues


230,527



206,907



685,726



619,430Operating expenses:Cost of service (exclusive of
    items shown separately below)


(50,304
)


(51,034
)


(150,109
)


(146,861
)Cost of equipment


(49,576
)


(44,153
)


(141,553
)


(128,543
)Selling and marketing


(25,535
)


(23,574
)


(73,340
)


(68,766
)General and administrative


(41,306
)


(30,689
)


(119,764
)


(103,221
)Depreciation and amortization


(49,076
)


(55,820
)


(144,461
)


(207,667
)Impairment of indefinite-lived
    intangible assets


(689
)






(12,043
)


Total operating expenses


(216,486
)


(205,270
)


(641,270
)


(655,058
)Gains on sale of wireless licenses
    and operating assets


14,593



532



14,593



532Operating income (loss)


28,634



2,169



59,049



(35,096
)Interest income


2,991



608



6,070



608Interest expense


(6,679
)


(6,009
)


(23,368
)


(9,740
)Other income (expense), net


2,352



458



1,027



(138
)Income (loss) before
    reorganization items and income taxes


27,298



(2,774
)


42,778



(44,366
)Reorganization items, net






963,156







962,444Income before income taxes


27,298



960,382



42,778



918,078Income taxes


(10,901
)


(2,851
)


(17,762
)


(6,722
)Net income (loss)

$
16,397


$
957,531


$
25,016


$
911,356   Three
    and Nine Months Ended September 30, 2005 Compared to the
    Three and Nine Months Ended September 30,
    2004
   23




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24




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##### Table of Contents



SOP 90-7 pay-in-kind pay-in-kind
   25




---



##### Table of Contents



pay-in-kind
  Performance
    Measures
  Regulation S-K
     26




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##### Table of Contents



Three Months EndedSeptember 30,2005


2004ARPU

$
40.22


$
36.97CPGA

$
142


$
141CCU

$
19.52


$
18.38Churn


4.4
%


4.5
%   Reconciliation
    of Non-GAAP Financial Measures
  Regulation S-K
 27




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##### Table of Contents



Three Months EndedSeptember 30,2005


2004Selling and marketing expense

$
25,535


$
23,574Less stock-based compensation
    expense included in selling and marketing expense


(203
)


Plus cost of equipment


49,576



44,153Less equipment revenue


(36,852
)


(36,521
)Less net loss on equipment
    transactions unrelated to initial customer acquisition


(4,917
)


(2,971
)Total costs used in the
    calculation of CPGA

$
33,139


$
28,235Gross customer additions


233,699



200,315CPGA

$
142


$
141     Three Months EndedSeptember 30,2005


2004Cost of service

$
50,304


$
51,034Plus general and administrative
    expense


41,306



30,689Less stock-based compensation
    expense included in cost of service and general and
    administrative expense


(2,518
)


Plus net loss on equipment
    transactions unrelated to initial customer acquisition


4,917



2,971Total costs used in the
    calculation of CCU

$
94,009


$
84,694Weighted-average number of
    customers


1,605,222



1,536,314CCU

$
19.52


$
18.38   Liquidity
    and Capital Resources
  and/or
 28




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##### Table of Contents



pay-in-kind
    pay-in-kind
  New
    Credit Agreement
      pay-in-kind
   29




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##### Table of Contents



Capital
    Expenditures and Other Asset Acquisitions and
    Dispositions
  2005
    Capital Expenditures
    Auction #58
    Properties and Build-Out
     30




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##### Table of Contents



Form 10-K
  Other
    Acquisitions and Dispositions
         31




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##### Table of Contents



Certain
    Contractual Obligations and Commitments
    Remainder


Year Ended
    December 31,Total


of 2005


2006


2007


2008


2009


ThereafterLong-term debt(1)

$
595,972


$
1,528


$
6,111


$
6,111


$
6,111


$
6,111


$
570,000Origination fees for ANB 1
    investment


4,700







750



1,000



1,000



1,000



950Contractual interest(2)


186,875



9,900



39,352



38,729



38,106



37,560



23,228Operating leases


225,681



13,630



39,144



25,796



23,092



20,788



103,231Total

$
1,013,228


$
25,058


$
85,357


$
71,636


$
68,309


$
65,459


$
697,409     (1)
    
    Amounts shown for Crickets term loan include principal
    only. Interest on this term loan, calculated at the current
    interest rate, is stated separately.(2)
    
    Contractual interest is based on the current interest rates in
    effect at September 30, 2005 for debt outstanding as of
    that date.    
    Contractual obligations to purchase a minimum of
    $90.5 million of products and services from Nortel Networks
    Inc. from October 11, 2005 through October 10, 2008.
    Contractual obligations to purchase a minimum of
    $119 million of products and services from Lucent
    Technologies Inc. from October 1, 2005 through
    September 30, 2008.  No. 46-R:
  Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
  No. FAS 13-1, No. FAS 13-1
 32




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##### Table of Contents



RISK
    FACTORS
  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
    Force Us To Change Our Business Plans And Financial Outlook And
    Would Likely Negatively Affect The Price Of Our Stock
    If We
    Experience High Rates Of Customer Turnover or Credit Card,
    Subscription or Dealer Fraud, Our Ability To Become Profitable
    Will Decrease
      We Face
    Increasing Competition Which Could Have A Material Adverse
    Effect On Demand For The Cricket Service
   33




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##### Table of Contents



and/or
    We Have
    Identified Material Weaknesses In Our Internal Control Over
    Financial Reporting, And Our Business And Stock Price May Be
    Adversely Affected If We Do Not Remediate All Of These Material
    Weaknesses, Or If We Have Other Material Weaknesses In Our
    Internal Control Over Financial Reporting
    Our
    Internal Control Over Financial Reporting Was Not Effective as
    of December 31, 2005, and Our Business May Be Adversely
    Affected if We Are Not Able to Implement Effective Control Over
    Financial Reporting.
  Form 10-K
 34




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##### Table of Contents



Our
    Primary Business Strategy May Not Succeed In The Long
    Term
    Our
    Indebtedness Could Adversely Affect Our Financial Health, And If
    We Fail To Maintain Compliance With The Covenants Under Our
    Senior Secured Credit Facilities, Any Such Failure Could
    Materially Adversely Affect Our Liquidity And Financial
    Condition
    
    Increase our vulnerability to general adverse economic and
    industry conditions;
    Require us to dedicate a substantial portion of our cash flows
    from operations to payments on our indebtedness, thereby
    reducing the availability of our cash flows to fund working
    capital, capital expenditures, acquisitions and other general
    corporate purposes;
    Limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate; and
    Reduce the value of stockholders investments in Leap
    because debt holders have priority regarding our assets in the
    event of a bankruptcy or liquidation.  Form 10-K Form 10-Q
  We Expect
    To Be Able To Incur Substantially More Debt; This Could Increase
    The Risks Associated With Our Leverage
   35




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##### Table of Contents



The
    Wireless Industry Is Experiencing Rapid Technological Change,
    And We May Lose Customers If We Fail To Keep Up With These
    Changes
    The Loss
    Of Key Personnel And Difficulty Attracting And Retaining
    Qualified Personnel Could Harm Our Business
    Risks
    Associated With Wireless Handsets Could Pose Product Liability,
    Health And Safety Risks That Could Adversely Affect Our
    Business
         36




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##### Table of Contents



We Rely
    Heavily On Third Parties To Provide Specialized Services; A
    Failure By Such Parties To Provide The Agreed Services Could
    Materially Adversely Affect Our Business, Results Of Operations
    And Financial Condition
    We May Be
    Subject To Claims Of Infringement Regarding Telecommunications
    Technologies That Are Protected By Patents And Other
    Intellectual Property Rights
      Regulation By
    Government Agencies May Increase Our Costs Of Providing Service
    Or Require Us To Change Our Services
   37




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##### Table of Contents



If Call
    Volume Under Our Cricket Flat Price Plans Exceeds Our
    Expectations, Our Costs Of Providing Service Could Increase,
    Which Could Have A Material Adverse Effect On Our Competitive
    Position
      Future
    Declines In The Fair Value Of Our Wireless Licenses Could Result
    In Future Impairment Charges
  SOP 90-7,
    
    consolidation in the wireless industry allowed or required
    carriers to sell significant portions of their wireless spectrum
    holdings;
    a sudden large sale of spectrum by one or more wireless
    providers occurs; or
    market prices decline as a result of the bidding activity in
    recently concluded or upcoming FCC auctions.    Declines
    In Our Operating Performance Could Ultimately Result In An
    Impairment Of Our Indefinite-Lived Assets, Including Goodwill,
    Or Our Long-Lived Assets, Including Property and
    Equipment
  and/or and/or
 38




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##### Table of Contents



Because
    Our Consolidated Financial Statements Reflect Fresh-Start
    Reporting Adjustments Made Upon Our Emergence From Bankruptcy,
    Financial Information In Our Current And Future Financial
    Statements Will Not Be Comparable To Our Financial Information
    From Periods Prior To Our Emergence From Bankruptcy
    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
    our common stock; and
    market conditions in our industry and the economy as a whole.  The
    17,198,252 Shares Of Our Common Stock Registered For
    Resale By Our Shelf Registration Statement on
    Form S-1 May
    Adversely Affect The Market Price Of Our Common Stock
  Form S-1,
  Our
    Directors and Affiliated Entities Have Substantial Influence
    Over Our Affairs
   39




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##### Table of Contents



Provisions
    In Our Amended And Restated Certificate Of Incorporation And
    Bylaws Or Delaware Law Might Discourage, Delay Or Prevent A
    Change In Control Of Our Company Or Changes In Our Management
    And Therefore Depress The Trading Price Of Our Common
    Stock
    
    require super-majority voting to amend some provisions in our
    amended and restated certificate of incorporation and bylaws;
    authorize the issuance of blank check preferred
    stock that our board of directors could issue to increase the
    number of outstanding shares to discourage a takeover attempt;
    prohibit stockholder action by written consent, and require that
    all stockholder actions be taken at a meeting of our
    stockholders;
    provide that the board of directors is expressly authorized to
    make, alter or repeal our bylaws; and
    establish advance notice requirements for nominations for
    elections to our board or for proposing matters that can be
    acted upon by stockholders at stockholder meetings.    Item 4.
    Controls
    and Procedures.  (a) Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(b), Form 10-Q/A,
      Insufficient Staffing in the Accounting, Financial Reporting
    and Tax Functions.
 40




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##### Table of Contents




    The Company hired a new vice president, chief accounting officer
    in May 2005. This individual is a certified public accountant
    with over 19 years of experience as an accounting
    professional, including over 14 years of Big Four public
    accounting experience. He possesses a strong background in
    technical accounting and the application of generally accepted
    accounting principles.
    The Company has hired a number of key accounting personnel since
    February 2005 that are appropriately qualified and experienced
    to identify and apply technical accounting literature, including
    several new directors and managers.      Errors in the Accounting for Income Taxes.
    
    The Company has initiated a search for a qualified full-time tax
    department leader and continues to make this a priority. The
    Company has been actively recruiting for this position for
    several months, but has experienced difficulty in finding
    qualified applicants. Nevertheless, the Company is striving to
    fill the position as soon as possible.
    As part of its 2005 annual income tax provision, the Company
    improved its internal control over income tax accounting to
    establish detailed procedures for the preparation and review of
    the income tax provision, including review by the Companys
    chief accounting officer. 41




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##### Table of Contents




    The Company used experienced qualified consultants to assist
    management in interpreting and applying income tax accounting
    literature and preparing the Companys 2005 annual income
    tax provision, and will continue to use such consultants in the
    future to obtain access to as much income tax accounting
    expertise as it needs. The Company recognizes, however, that a
    full-time tax department leader with appropriate tax accounting
    expertise is important for the Company to maintain effective
    internal controls on an ongoing basis.
    As a result of the remediation initiatives described above, the
    Company identified certain of the errors that gave rise to the
    restatements of the consolidated financial statements for
    deferred income taxes.    Form 10-K Form 10-Q/A Form 10-Q/A
  Form 10-K Form 10-Q/A Form 10-Q/A Form 10-K Form 10-Q/A Form 10-Q/A
  (b) Changes
    in Internal Control Over Financial Reporting
   42




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##### Table of Contents



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

Description of
    Exhibit10.1.1(1)#

Form of Restricted Stock Award
    Grant Notice and Restricted Stock Award Agreement, dated as of
    July 8, 2005, between the Company and David B. Davis.10.1.2(1)#

Form of Restricted Stock Award
    Grant Notice and Restricted Stock Award Agreement, dated as of
    July 8, 2005, between the Company and Robert J.
    Irving, Jr.10.1.3(1)#

Form of Restricted Stock Award
    Grant Notice and Restricted Stock Award Agreement, dated as of
    July 8, 2005, between the Company and Leonard C. Stephens.10.1.4(1)#

Agreement, dated as of
    July 8, 2005, between the Company and Harvey P. White.10.2.1(2)

Amendment No. 1 to the Credit
    Agreement among Cricket Communications, Inc., Leap Wireless
    International, Inc., the lenders party to the Credit Agreement
    and Bank of American, N.A., as agent, dated as of July 22,
    2005.10.2.2(2)

Amendment No. 2 to the Credit
    Agreement among Cricket Communications, Inc., Leap Wireless
    International, Inc., the lenders party to the Credit Agreement
    and Bank of American, N.A., as agent, dated as of July 22,
    2005.10.3.1**

Amendment No. 3 to Amended
    and Restated System Equipment Purchase Agreement, effective as
    of October 11, 2005, between Cricket Communications, Inc.
    and Nortel Networks Inc.10.3.2**

Amendment No. 8 to Amended
    and Restated System Equipment Purchase Agreement, effective as
    of October 1, 2005, between Cricket Communications, Inc.
    and Lucent Technologies Inc.10.4**#

Form of Executive Vice President
    and Senior Vice President Severance Benefits Agreement.10.5**

Amendment No. 3 to Credit
    Agreement by and among Cricket Communications, Inc., Alaska
    Native Broadband 1 License, LLC, and Alaska Native
    Broadband 1, LLC, dated August 26, 2005.31.1*

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31.2*

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

Certifications of Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.**
    
    Previously filed.***
    
    These certifications are being furnished solely to accompany
    this quarterly report pursuant to 18 U.S.C.
    § 1350, and are not being filed for purposes of
    Section 18 of the Securities Exchange Act of 1934, as
    amended, and are not to be incorporated by reference into any
    filing of Leap Wireless International, Inc., whether made before
    or after the date hereof, regardless of any general
    incorporation language in such filing.
    
    Portions of this exhibit (indicated by asterisks) have been
    omitted pursuant to a request for confidential treatment
    pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934.#
    
    Management contract or compensatory plan or arrangement in which
    one or more executive officers or directors participates.(1)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated July 8, 2005, as filed with the SEC on July 14,
    2005, and incorporated herein by reference.(2)
    
    Filed as an exhibit to Leaps Current Report on
    Form 8-K,
    dated July 22, 2005, as filed with the SEC on July 25,
    2005, and incorporated herein by reference. 43




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##### Table of Contents



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

By:

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

By:

/s/  Dean
    M.
    LuvisaDean
    M. Luvisa
    Vice President, Finance and
    Acting Chief Financial Officer
    (Principal Financial Officer)  44