<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                               ----------------

                                   FORM 10-Q
(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

  For the quarterly period ended May 31, 2000 or

[_] 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: 333-37186

                               ----------------

                     CRICKET COMMUNICATIONS HOLDINGS, INC.
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
 <S>                              <C>
            DELAWARE                                33-0820981
 (State or Other Jurisdiction of                 (I.R.S. Employer
 Incorporation or Organization)                Identification No.)
</TABLE>

              10307 PACIFIC CENTER COURT, SAN DIEGO, CA 92121-2779
              (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 Report)

                               ----------------

   Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past ninety days. Yes [X] No [_]

   The number of shares of registrant's common stock outstanding on November 9,
2000 was 1,000.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                                     PART I

                             FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands, except share data)

<TABLE>
<CAPTION>
                                                           May 31,   August 31,
                                                            2000        1999
                                                         ----------- ----------
                                                         (Unaudited)
<S>                                                      <C>         <C>
                         ASSETS
                         ------

Cash and cash equivalents...............................  $  22,664   $    --
Short-term investments..................................      5,015        --
Accounts receivable, net................................        838        --
Inventories.............................................      1,367        --
Other current assets....................................        225        --
                                                          ---------   --------
    Total current assets................................     30,109        --
Property and equipment, net.............................     88,396        --
Goodwill and intangible assets, net.....................     37,093        --
Deferred financing costs and other assets...............      2,048        --
                                                          ---------   --------
    Total assets........................................  $ 157,646   $    --
                                                          =========   ========
     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
     ----------------------------------------------

Accounts payable and accrued liabilities................  $   7,368   $  6,924
Accounts payable--related party.........................        634        --
                                                          ---------   --------
    Total current liabilities...........................      8,002      6,924
Long-term debt..........................................    111,002        --
                                                          ---------   --------
    Total liabilities...................................    119,004      6,924
                                                          ---------   --------
Commitments and contingencies (Note 5)
Stockholders' equity (deficit):
  Preferred stock--authorized 200,000 shares; $.0001 par
   value, no shares issued and outstanding..............         --        --
  Common stock--authorized 75,000,000 shares; $.0001 par
   value, 65,162,433 and 52,000,100 shares issued and
   outstanding at May 31, 2000 (unaudited) and August
   31, 1999, respectively...............................          6          5
  Additional paid-in capital............................    143,349     52,029
  Parent's investment and advances......................         --      4,115
  Notes receivable from stockholders....................       (967)      (906)
  Deferred compensation.................................        (22)       (34)
  Accumulated deficit...................................   (103,724)   (62,133)
                                                          ---------   --------
    Total stockholders' equity (deficit)................     38,642     (6,924)
                                                          ---------   --------
    Total liabilities and stockholders' equity
     (deficit)..........................................  $ 157,646   $    --
                                                          =========   ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>
                                          Three Months
                                             Ended         Nine Months Ended
                                        -----------------  ------------------
                                                     May 31,
                                        -------------------------------------
                                          2000     1999      2000      1999
                                        --------  -------  --------  --------
<S>                                     <C>       <C>      <C>       <C>
Operating revenues..................... $  4,849  $   --   $  4,849  $    --
                                        --------  -------  --------  --------
Operating expenses:
  Cost of operating revenues and
   operations..........................   (4,252)     --     (4,252)      --
  Selling, general and administrative..   (8,495)  (2,896)  (15,073)   (5,328)
  Depreciation and amortization........   (2,439)     --     (2,439)      --
                                        --------  -------  --------  --------
    Total operating expenses...........  (15,186)  (2,896)  (21,764)   (5,328)
                                        --------  -------  --------  --------
  Operating loss.......................  (10,337)  (2,896)  (16,915)   (5,328)
Equity in net loss of unconsolidated
 wireless operating company............      --    (3,698)  (20,162)  (14,899)
Interest income........................      548      --      1,579       --
Interest expense.......................   (3,173)     --     (6,093)      --
                                        --------  -------  --------  --------
  Net loss............................. $(12,962) $(6,594) $(41,591) $(20,227)
                                        ========  =======  ========  ========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                               Nine Months
                                                              Ended May 31,
                                                             -----------------
                                                               2000     1999
                                                             --------  -------
<S>                                                          <C>       <C>
Operating activities:
  Net cash used in operating activities..................... $(21,776) $(5,328)
                                                             --------  -------
Investing activities:
  Purchase of property and equipment........................   (4,283)     --
  Investments in and loans to unconsolidated wireless
   operating company........................................  (17,009) (14,899)
  Purchase of held-to-maturity investments..................   (5,015)     --
  Acquisition, net of cash acquired.........................   (1,327)     --
                                                             --------  -------
Net cash used in investing activities.......................  (27,634) (14,899)
                                                             --------  -------
Financing activities:
  Proceeds from long-term debt..............................      302      --
  Net proceeds from issuance of common stock................      419      --
  Parent's investment and advances..........................   71,353   20,227
                                                             --------  -------
Net cash provided by financing activities...................   72,074   20,227
                                                             --------  -------
Net increase in cash and cash equivalents...................   22,664      --
Cash and cash equivalents at beginning of period............      --       --
                                                             --------  -------
Cash and cash equivalents at end of period.................. $ 22,664  $   --
                                                             ========  =======

Supplemental disclosure of non-cash investing and financing
 activities:
  Long-term financing for loans to unconsolidated wireless
   operating company........................................ $ 19,707
  Long-term financing to settle liabilities assumed on
   acquisition.............................................. $ 33,608
  Long-term financing to purchase property and equipment.... $ 51,174
  Facility fee due on long-term debt........................ $  1,800
Supplemental disclosure of cash used for acquisition:
  Total purchase price...................................... $ 80,911
  Warrant issued for common stock...........................  (15,353)
  Liabilities assumed.......................................  (59,258)
  Cash acquired.............................................   (4,973)
                                                             --------
  Cash used for acquisition................................. $  1,327
                                                             ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. The Company and Basis of Presentation

 The Company and Nature of Business

   Cricket Communications Holdings, Inc. (the "Company" or "Cricket
Communications Holdings"), a wholly owned subsidiary of Leap Wireless
International, Inc. ("Leap"), is a wireless communications carrier that is
deploying and operating a low-cost, flat-rate wireless service in the United
States. The Company's service is operated by its wholly owned subsidiary
Cricket Communications, Inc. ("Cricket Communications") and is marketed under
the name "Cricket." Cricket service was introduced in March 1999 in Tennessee
using the existing infrastructure of Chase Telecommunications, Inc. ("Chase
Telecommunications"), a company that Leap and Cricket Communications Holdings
acquired in March 2000 (See Note 2). The Company has introduced Cricket service
in other markets in Tennessee in 2000 and plans to introduce Cricket service to
additional markets in the United States in the future. The Company is comprised
of one business segment and all of its customers and long-lived assets are
located in the United States.

   The wireless licenses used by the Company to offer Cricket service are owned
by Leap. The Company plans to enter into long-term licensing agreements with
Leap for the use of the licenses. In 1999 and 2000, Leap has acquired or agreed
to acquire a number of additional wireless licenses throughout the United
States. Each of the pending agreements is subject to customary closing
conditions, including Federal Communications Commission ("FCC") approval, but
no assurance can be given that they will be closed on schedule or at all.

   In July 1999, the FCC issued an opinion and order that found Leap was
qualified to acquire and operate C-Block and F-Block PCS spectrum licenses in
the United States, subject to specified conditions. The order also approved
Leap's acquisition of 36 licenses in the federal government's reauction of
broadband PCS spectrum licenses and approved the transfer of three licenses in
North Carolina to Leap. Another wireless company has appealed the FCC's order.
Although Leap believes that the appeal will be denied, there can be no
assurance that it will prevail in connection with any further judicial review
of the order or that it will otherwise remain qualified to hold C-Block or F-
Block spectrum licenses.

   The FCC's grants of Leap's C-Block and F-Block licenses are subject to
certain conditions which have been satisfied. Leap has a continuing obligation,
during the designated entity holding period for its C-Block and F-Block
licenses, to limit its debt to Qualcomm Incorporated ("Qualcomm") to 50% or
less of its outstanding debt and to ensure that persons who are or were
previously officers or directors of Qualcomm do not comprise a majority of
Leap's board of directors or a majority of its officers. If Leap fails to
continue to meet any of the conditions imposed by the FCC or otherwise fails to
maintain its qualification to own C-Block and F-Block licenses, that failure
could have a material adverse effect on the Company's financial condition and
business prospects.

 Incorporation, Capitalization and Basis of Presentation

   Cricket Communications Holdings was incorporated in Delaware on August 24,
1998. On June 22, 1999, Leap transferred to the Company its 7.2% equity
interest in Chase Telecommunications Holdings, Inc. ("Chase Telecommunications
Holdings") and indebtedness of Chase Telecommunications, a subsidiary of Chase
Telecommunications Holdings, owed to Leap, as well as certain additional assets
and liabilities (the "Transfer"). Leap purchased its equity interest in Chase
Telecommunications Holdings in December 1996. The financial statements reflect
the financial position, results of operations, cash flows and changes in
stockholders' deficit of the business that was transferred to the Company from
Leap as if: (i) the Company was a separate entity for all periods presented,
and (ii) the investment in Chase Telecommunications Holdings and loans to Chase
Telecommunications were entered into by the Company. The financial statements
have been prepared using the historical basis in the assets and liabilities and
historical results of operations related to the Company's business. The Company
had no cash from December 1, 1996 (inception) through December 15,

                                       5
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

1999. During this period, when Company purchases were made, liabilities paid or
investments and loans made, the cash used by the Company was provided by Leap.
Leap's investment and advances have been converted into common stock of the
Company.

   The accompanying interim condensed consolidated financial statements have
been prepared by the Company without audit, in accordance with the instructions
to Form 10-Q and, therefore, do not include all information and footnotes
necessary for a fair presentation of its financial position, results of
operations, cash flows and stockholders' equity in accordance with generally
accepted accounting principles. In the opinion of management, the unaudited
financial information for the interim periods presented reflects all
adjustments (which include only normal, recurring adjustments) necessary for a
fair presentation. These condensed consolidated financial statements and notes
thereto should be read in conjunction with the Company's consolidated financial
statements and notes thereto included in the Company's Transition Report on
Form 10-K, filed with the Securities and Exchange Commission on October 30,
2000. Operating results for interim periods are not necessarily indicative of
operating results for an entire fiscal year.

   The condensed consolidated financial statements are prepared using generally
accepted accounting principles. These principles require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported amounts of revenues and expenses. Actual results could differ from
those estimates.

 Change in Fiscal Year

   On July 31, 2000, the Board of Directors of the Company elected to change
its fiscal year from a year ending on August 31 to a year ending on December
31. The first new twelve-month fiscal year will end on December 31, 2000. As a
result of the change in year end, the Company has issued consolidated financial
statements as of December 31, 1999 and for the transition period from September
1, 1999 to December 31, 1999.

 Future Accounting Requirements

   In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which is effective for the
Company's year ending December 31, 2001. In June 2000, the FASB issued SFAS No.
138 which amended SFAS No. 133 for certain derivative instruments and hedging
activities. Under SFAS No. 133, all derivatives must be recognized as assets
and liabilities and measured at fair value. The Company does not expect that
the adoption of SFAS No. 133 will have a material impact on its consolidated
financial position or results of operations.

   In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 summarizes certain of the Staff's interpretations in
applying generally accepted accounting principles to revenue recognition. The
provisions of SAB No. 101 are effective for the Company's quarter ending
December 31, 2000. The Company does not expect that the adoption of SAB No. 101
will have a material impact on its consolidated financial position or results
of operations.

   In March 2000, the FASB issued Financial Accounting Standards Interpretation
("FIN") No. 44, "Accounting for Certain Transactions Involving Stock
Compensation--an Interpretation of APB 25." FIN No. 44 clarifies the
application of Opinion 25 for (a) the definition of employee for purposes of
applying Opinion 25, (b) the criteria for determining whether a stock option or
award qualifies as a non compensatory plan, (c) the accounting consequences of
various modifications to the terms of a previously fixed stock option

                                       6
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

or award, and (d) the accounting for an exchange of stock compensation awards
in a business combination. FIN 44 is effective July 1, 2000, but certain
conclusions cover specific events that occur after either December 15, 1998 or
January 12, 2000. The Company does not expect that the adoption of FIN No. 44
will have a material effect on its consolidated financial position or results
of operations.

Note 2. Investment in and Loans to Chase Telecommunications Holdings

   In March 2000, Leap and the Company completed the acquisition of
substantially all of the assets of Chase Telecommunications Holdings, including
wireless licenses. The purchase price included approximately $6.3 million in
cash, the assumption of principal amounts of liabilities that totaled
approximately $138.0 million (with a fair value of $131.3 million), a warrant
to purchase 1% of the common stock of the Company at an exercise price of $1.0
million (which had a fair value of approximately $15.3 million at the
acquisition date determined using the Black Scholes option pricing model), and
contingent earn-out payments of up to $41.0 million (plus certain expenses)
based on the earnings of the business acquired during the fifth full year
following the closing of the acquisition. Leap purchased the wireless licenses
and related FCC debt and the Company acquired all the outstanding capital stock
of Chase Telecommunications, a subsidiary of Chase Telecommunications Holdings.
Under the purchase method of accounting, the total estimated fair value of the
Company's acquisition of Chase Telecommunications was $80.9 million, of which
$43.2 million has been allocated to property and equipment and other assets and
$37.7 million has been allocated to intangible assets, primarily goodwill,
which is being amortized over 20 years. Unaudited pro forma results of
operations are provided to reflect the acquisition as if it had occurred as of
September 1, 1998 (in thousands):

<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                                  May 31,
                                                             ------------------
                                                               2000      1999
                                                             --------  --------
                                                                (Unaudited)
   <S>                                                       <C>       <C>
   Operating revenues....................................... $ 10,112  $  1,917
   Net loss................................................. $(54,174) $(16,625)
</TABLE>

   The unaudited pro forma results of operations have been prepared for
comparative purposes only and do not purport to be indicative of the results of
operations which actually would have resulted had the acquisition occurred on
the date indicated, or which may result in the future.

   Prior to Leap's and the Company's acquisition of substantially all the
assets of Chase Telecommunications Holdings in March 2000, the Company's
investment in Chase Telecommunications Holdings was accounted for under the
equity method. The Company recorded equity losses from Chase Telecommunications
Holdings of $0.0 million and $20.2 million during the three and nine months
ended May 31, 2000, respectively, and $3.7 million and $14.9 million during the
three and nine months ended May 31, 1999, respectively.

                                       7
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Condensed financial information for Chase Telecommunications Holdings is
summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                    August 31,
                                                                       1999
                                                                    ----------
     <S>                                                            <C>
     Current assets................................................ $   5,963
     Non-current assets............................................    87,282
     Current liabilities...........................................    (4,063)
     Non-current liabilities.......................................  (148,501)
                                                                    ---------
       Total stockholders' deficit.................................   (59,319)
     Other stockholders' share of deficit..........................   (55,048)
                                                                    ---------
     Company's share of deficit....................................    (4,271)
                                                                    ---------
       Investments in and loans receivable from Chase
        Telecommunications Holdings................................ $     --
                                                                    =========
</TABLE>

<TABLE>
<CAPTION>
                                               Three
                                           Months Ended     Nine Months Ended
                                          ----------------  ------------------
                                                       May 31,
                                          ------------------------------------
                                          2000(1)   1999      2000      1999
                                          -------  -------  --------  --------
                                                     (Unaudited)
<S>                                       <C>      <C>      <C>       <C>
Operating revenues....................... $   825  $ 1,093  $  6,113  $  1,917
                                          -------  -------  --------  --------
Operating losses.........................  (1,786)  (4,315)  (38,126)  (10,769)
Other income (expense), net..............  (1,524)  (3,682)   (9,539)   (6,518)
                                          -------  -------  --------  --------
  Net loss...............................  (3,310)  (7,997)  (47,665)  (17,287)
Other stockholders' share of net loss....  (3,310)  (3,499)  (25,504)     (373)
                                          -------  -------  --------  --------
Company's share of net loss..............     --    (4,498)  (22,161)  (16,914)
Elimination of intercompany
 transactions............................     --       800     1,999     2,015
                                          -------  -------  --------  --------
  Equity in net loss of Chase
   Telecommunications Holdings........... $   --   $(3,698) $(20,162) $(14,899)
                                          =======  =======  ========  ========
</TABLE>
--------
(1) Period up to March 2000 acquisition date.

Note 3. Long Term Debt

 Lucent Credit Agreement

   In September 1999, Cricket Communications agreed to purchase up to $330.0
million of infrastructure products and services from Lucent Technologies, Inc.
("Lucent"), and in June 2000, increased the value of products and services that
can be purchased under the agreement to up to $900.0 million. The purchase
agreement is subject to early termination at Cricket Communications'
convenience subject to payments for products and services purchased by Cricket
Communications. Lucent agreed to finance these purchases plus additional
working capital under a credit facility. The credit facility originally
permitted up to $641.0 million in total borrowings, which was increased to up
to $1,350.0 million in June 2000, with borrowing availability generally based
on a ratio of the total amount of products and services purchased from Lucent.
Lucent is not required to make loans under the facility if the total of the
loans held directly or supported by Lucent is an amount greater than $815.0
million. The credit agreement contains various covenants and conditions typical
for a loan of this type, including minimum levels of customers and covered
potential customers that must increase over time, limits on annual capital
expenditures, dividend restrictions and other financial ratio tests. The
obligations under the credit agreement, together with the obligations under
similar facilities from Nortel

                                       8
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Networks, Inc. ("Nortel") and Ericsson Wireless Communications, Inc.
("Ericsson") (see Note 6), are secured by all of the stock of Cricket
Communications, its subsidiaries and the stock of each special purpose
subsidiary of Leap formed to hold wireless licenses used in Cricket
Communications' business, and all of their respective assets. Borrowings under
the credit facility accrue interest at a rate equal to LIBOR plus 3.5% to 4.25%
or a bank base rate plus 2.5% to 3.25%, in each case with the specific rate
based on the ratio of total indebtedness to EBITDA. Cricket Communications must
pay Lucent a commitment fee equal to 1.25% per annum on the unused commitment
under the facility, decreasing to 0.75% per annum. Principal payments are
scheduled to begin after three years with a final maturity after eight years.
Repayment is weighted to the later years of the repayment schedule. At May 31,
2000, the Company had $111.0 million outstanding under the Lucent credit at an
interest rate of 10.63%.

Note 4. Related Party Transactions

 Leap Wireless International, Inc.

   The unaudited condensed consolidated financial statements include the
allocation of shared general and administrative costs with Leap subsequent to
the Transfer. Labor and other direct costs of Leap have been allocated to the
Company based on estimates of incremental efforts expended and incremental
costs incurred related to the Company's business. The Company's share of these
costs was $0.7 million and $2.0 million for the three and nine months ended May
31, 2000. Management believes these allocations reasonably approximate costs
incurred by Leap on behalf of the Company's operations. However, the costs as
allocated to the Company are not necessarily indicative of the costs that would
have been incurred if the Company had performed these functions as a stand-
alone entity.

   In conjunction with Leap's and the Company's acquisition of substantially
all the assets of Chase Telecommunications Holdings in March 2000, Leap granted
the Company the right to use wireless licenses acquired from Chase
Telecommunications Holdings and held by another subsidiary of Leap. The Company
recorded $0.2 million for the three months ended May 31, 2000 for its right to
use wireless licenses.

   In November and December 1999, the Company issued 2,133,067 shares of its
common stock to Leap related to the conversion of investments and advances
totaling $15.2 million provided to the Company from June 22, 1999 to December
15, 1999 and 9,700,266 shares of its common stock to Leap for a promissory note
of $51.3 million and the settlement of accounts payable in the amount of $4.5
million. The promissory note bore interest at the rate of 10.0% per annum and
was payable on demand. In March and April 2000, Leap repaid the promissory note
in full.

 Other Related Parties

   In December 1999, the Company issued 473,333 shares of its common stock to
three directors of the Company and a director of Leap for promissory notes
totaling $2.8 million. The promissory notes bore interest at the rate of 10.0%
per annum and were payable on demand. In April and May 2000, the promissory
notes were paid in full.

Note 5. Commitments and Contingencies

   Various claims arising in the course of business, seeking monetary damages
and other relief, are pending. The amount of the liability, if any, from such
claims cannot be determined with certainty; however, in the opinion of
management, the ultimate liability for such claims will not have a material
adverse effect on the Company's consolidated financial position, results of
operations or cash flows.


                                       9
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Note 6. Subsequent Events

 Leap Acquisition and Funding

   On June 15, 2000, through a subsidiary merger, Leap acquired the remaining
5.11% of the Company that it did not already own. These shares were owned by
individuals and entities, including directors and employees of Leap and the
Company. Each issued and outstanding share of the Company's common stock not
held by Leap was converted into the right to receive 0.315 of a fully paid and
nonassessable share of Leap's common stock. As a result, 1,048,635 shares of
Leap's common stock were issued. Leap also assumed Chase Telecommunications
Holdings' warrant to purchase 1% of the common stock of Cricket Communications
Holdings, which was converted into a warrant to acquire 202,566 shares of
Leap's common stock, for an aggregate exercise price of $1.0 million. In
addition, Leap assumed all unexpired and unexercised stock options of the
Company outstanding at the time of the merger, whether vested or unvested,
which upon conversion amounted to options to purchase 407,784 shares of Leap's
common stock.

   In June 2000, subsequent to the acquisition, Leap contributed $369.7 million
in cash funding and other assets to the Company.

 Nortel Supply and Credit Agreement

   In August 2000, Cricket Communications entered into a three-year supply
agreement with Nortel for the purchase of infrastructure products and services.
Nortel agreed to finance these purchases plus additional working capital under
a credit facility. The credit facility permits up to $525.0 million in total
borrowings, with borrowing availability generally based on a ratio of the total
amount of products and services purchased from Nortel. The credit agreement
contains various covenants and conditions typical for a loan of this type,
including minimum levels of customers and covered potential customers that must
increase over time, limits on annual capital expenditures and other financial
ratio tests. The obligations under the credit agreement, together with the
obligations under similar facilities with Lucent and Ericsson, are secured by
all of the stock of Cricket Communications, its subsidiaries, and the stock of
each special purpose subsidiary of Leap formed to hold wireless licenses used
in Cricket Communications' business, and all of their respective assets.
Borrowings under the credit facility accrue interest at a rate equal to LIBOR
plus 3.5% to 4.25% or a bank base rate plus 2.5% to 3.25%, in each case with
the specific rate based on the ratio of total indebtedness to EBITDA. Cricket
Communications must pay a commitment fee equal to 1.25% per annum on the unused
commitment under the credit facility, decreasing to 0.75% per annum. Principal
payments are scheduled to begin after three years with a final maturity after
eight years. Repayment is weighted to the later years of the repayment
schedule.

 Ericsson Supply and Credit Agreement

   In October 2000, Cricket Communications entered into a three-year supply
agreement with Ericsson for the purchase of up to $330.0 million of
infrastructure products and services. Ericsson Credit AB agreed to finance
these purchases plus additional working capital under a credit facility. These
agreements amended and replaced the binding memorandum of agreement between the
parties dated September 20, 1999. The credit facility permits up to $495.0
million in total borrowings, with borrowing availability generally based on a
ratio of the total amount of products and services purchased from Ericsson. The
credit agreement contains various covenants and conditions typical for a loan
of this type, including minimum levels of customers and covered potential
customers that must increase over time, limits on annual capital expenditures,
dividend restrictions and other financial ratio tests. The obligations under
the credit agreement, together with the obligations under similar facilities
from Lucent and Nortel, are secured by all of the stock of Cricket
Communications, its subsidiaries and the stock of each special purpose
subsidiary of Leap formed to hold wireless licenses used in the Cricket
Communications' business, and all of their respective assets. Borrowings under
the credit facility

                                       10
<PAGE>

                     CRICKET COMMUNICATIONS HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

accrue interest at a rate equal to LIBOR plus 3.5% to 4.25% or a bank base rate
plus 2.5% to 3.25%, in each case with the specific rate based on the ratio of
total indebtedness to EBITDA. Cricket Communications must pay a commitment fee
equal to 1.25% per annum on the unused commitment under the credit facility,
decreasing to 0.75% per annum. Principal payments are scheduled to begin after
three years with a final maturity after eight years. Repayment is weighted to
the later years of the repayment schedule.

   Cricket Communications, Lucent, Nortel and Ericsson have entered into an
agreement pursuant to which Lucent, Nortel and Ericsson agreed to share
collateral and the parties agreed that the Cricket Communications' total
outstanding balance of loans to the three vendors shall not exceed $1,845.0
million.

                                       11
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

   The following information should be read in conjunction with the condensed
consolidated financial statements and notes thereto included in Item 1 of this
Quarterly Report and the audited consolidated financial statements and notes
thereto and Management's Discussion and Analysis of Financial Condition and
Results of Operations included in the Company's Transition Report on Form 10-K
for the transition period from September 1, 1999 to December 31, 1999, filed
with the Securities and Exchange Commission on October 30, 2000.

   Except for the historical information contained herein, this document
contains forward-looking statements reflecting management's current forecast of
certain aspects of Cricket's future. It is based on current information, which
Cricket has assessed but which by its nature is dynamic and subject to rapid
and even abrupt changes. Cricket's actual results could differ materially from
those stated or implied by such forward looking statements due to risks and
uncertainties associated with Cricket's business. Factors that could cause
actual results to differ include but are not limited to: changes in the
economic conditions of the various markets Cricket serves which could adversely
affect the market for wireless services; the ability of Leap or its operating
companies, including Cricket, to access capital markets; Cricket's ability to
roll out networks in accordance with its plans; failure of the systems to
perform according to expectations; the effect of competition; the acceptance of
the product offering by our target customers; Cricket's ability to retain
customers; our ability to maintain our cost, market penetration and pricing
structure in the face of competition; uncertainties relating to negotiating and
executing definitive agreements and the closing of transactions described in
this report; rulings by courts or the FCC adversely affecting Leap's rights to
own and/or operate certain wireless licenses; as well as other factors detailed
in our SEC filings. The forward-looking statements should be considered in the
context of these and other risk factors detailed in the section entitled "Risk
Factors" detailed in the Company's Transition Report on Form 10-K for the
transition period from September 1, 1999 to December 31, 1999, filed with the
Securities and Exchange Commission on October 30, 2000. Investors and
prospective investors are cautioned not to place undue reliance on such
forward-looking statements. We disclaim any obligation to update the forward-
looking statements contained herein to reflect future events or developments.

   As used in this report, the terms "we," "our" or "us" refer to Cricket
Communications Holdings and its subsidiaries, unless the context suggests
otherwise.

Overview

   Cricket Communications Holdings, a wholly owned subsidiary of Leap Wireless
International, Inc., is a wireless communications carrier with an innovative
approach to providing digital wireless service that is designed to appeal to
the mass market. We intend to transform wireless into a mass consumer product
by deploying customer-oriented, low-cost, simple wireless services. We
generally seek to address a much broader population segment than incumbent
wireless operators have addressed to date. In the United States, we are
employing an innovative business strategy to extend the benefits of mobility to
the mass market by offering digital wireless service under the brand name
Cricket that is as simple as, and priced at rates competitive with, traditional
landline service. Chase Telecommunications, Inc., a company we acquired in
March 2000, introduced Cricket service in Chattanooga and Nashville, Tennessee
in March 1999 and January 2000, respectively. Cricket service is operated by
Cricket Communications, Inc., our wholly owned subsidiary.

   In June 2000, through a subsidiary merger, Leap acquired the 5.11% of
Cricket Communications Holdings that it did not already own. These shares were
owned by individuals and entities, including directors and employees of Leap
and Cricket Communications Holdings. Under the terms of the merger, each issued
and outstanding share of our common stock not held by Leap was converted into
the right to receive 0.315 of a fully paid and non-assessable share of Leap
common stock. As a result, an aggregate of 1,048,635 shares of Leap common
stock were issued. Leap also assumed Chase Telecommunications Holdings' warrant
to purchase 1% of the common stock of Cricket Communications Holdings, which
was converted into a warrant to acquire

                                       12
<PAGE>

202,566 shares of its common stock, at an aggregate exercise price of $1.0
million. In addition, Leap assumed all unexpired and unexercised Cricket
Communications Holdings stock options outstanding at the time of the merger,
whether vested or unvested, which upon conversion amounted to options to
purchase 407,784 shares of Leap common stock.

   We are in the early stages of launching our networks and our financial
results continue to reflect the considerable investment associated with
completion of our network build-outs and the initial launch of commercial
service in new markets. As we continue to expand our operations, our net
operating losses are expected to grow.

Recent Acquisitions

   Chase Telecommunications. In March 2000, Leap and Cricket Communications
Holdings completed the acquisition of substantially all of the assets of Chase
Telecommunications Holdings, including wireless licenses. The purchase price
included approximately $6.3 million in cash, the assumption of principal
amounts of liabilities that totaled approximately $138.0 million (with a fair
value of approximately $131.3 million), a warrant to purchase 1% of our common
stock (which has been converted into a right to acquire 202,566 shares of Leap
common stock) at an exercise price of $1.0 million (which had a fair value of
approximately $15.3 million at the acquisition date determined using the Black
Scholes option pricing model), and contingent earn-out payments of up to $41.0
million (plus certain expenses) based on the earnings of the business acquired
during the fifth full year following the closing of the acquisition. Leap
purchased the wireless licenses and related FCC debt and Cricket Communications
Holdings acquired all the outstanding common stock of Chase Telecommunications,
Inc., a subsidiary of Chase Telecommunications Holdings. Under the purchase
method of accounting, the total estimated fair value of the acquisition of
Chase Telecommunications by Cricket Communications Holdings was $80.9 million,
of which $43.2 million has been allocated to property and equipment and other
assets and $37.7 million has been allocated to intangible assets, primarily
goodwill, which is being amortized over 20 years.

   Wireless licenses. Our business is substantially dependent on the use of
various licenses which Leap has acquired or agreed to acquire.

   In July 1999, the FCC issued an opinion and order that found that Leap was
qualified to acquire C-Block and F-Block licenses. The order also approved
Leap's acquisition of the 36 C-Block licenses for which Leap was the high
bidder in the FCC's 1999 spectrum reauction, and approved the transfer to Leap
of three F-Block licenses covering portions of North Carolina, in each case
subject to the fulfillment of some conditions. In October 1999, the FCC issued
the 36 licenses Leap acquired in the reauction.

   The FCC's grants of Leap's C-Block and F-Block licenses are subject to
certain conditions. Each of the conditions imposed by the FCC in the opinion
and order has been satisfied. Leap has a continuing obligation, during the
designated entity holding period for its C-Block and F-Block licenses, to limit
its debt to Qualcomm to 50% or less of its outstanding debt and to ensure that
persons who are or were previously officers or directors of Qualcomm do not
comprise a majority of Leap's board of directors or a majority of its officers.
If Leap fails to continue to meet any of the conditions imposed by the FCC or
otherwise fails to maintain its qualification to own C-Block and F-Block
licenses, that failure could have a material adverse effect on our financial
condition and business prospects.

   Various parties previously challenged Leap's qualification to hold C-Block
and F-Block licenses, which challenges were rejected in the FCC's July 1999
order. One of these parties, a wireless operating company, requested that the
FCC review its order, as well as the order consenting to the transfer of
licenses to Leap from Chase Telecommunications and PCS Devco. That wireless
operating company also has opposed all of Leap's pending assignment or transfer
applications at the FCC. In July 2000, the FCC affirmed its July 1999 order as
well as the order consenting to the transfer of licenses to Leap from Chase
Telecommunications and PCS Devco, and the wireless operating company
subsequently appealed the FCC's decision to the Court of Appeal

                                       13
<PAGE>

for the D.C. Circuit, which appeal is currently pending. In addition, Nextel
Communications, Inc. has opposed one of Leap's pending FCC applications,
alleging that Leap may no longer be compliant with C- and F-Block "total asset"
eligibility requirements. Further judicial review of the FCC's orders granting
Leap licenses is possible. In addition, licenses awarded to Leap at auction may
be subject to the outcome of pending judicial proceedings by parties
challenging the auction process or the FCC's decision or authority to auction
or reauction certain C- or F-Block licenses. Leap may also be affected by other
pending or future FCC, legislative or judicial proceedings that generally
affect the rules governing C- and F-Block licenses or other designated
entities. For example, recent FCC rules changes have made it easier for large
companies to acquire C- and F-Block licenses at auction and in the aftermarket.

   Leap may not prevail in connection with any such appeals or proceedings and
Leap may not remain qualified to hold C-Block or F-Block licenses. If the FCC
determines that Leap is not qualified to hold C-Block or F-Block licenses, it
could take the position that all of Leap's licenses should be divested,
cancelled or reauctioned.

Presentation

   The wireless licenses used by us to offer Cricket service are owned by Leap.
We plan to enter into long-term licensing agreements with Leap for the use of
the licenses. In 1999 and 2000, Leap has acquired or agreed to acquire a number
of additional wireless licenses throughout the United States. Each of the
pending agreements is subject to customary closing conditions, including FCC
approval, but no assurance can be given that they will be closed on schedule or
at all.

   On July 31, 2000, our Board of Directors elected to change our fiscal year
from a year ending on August 31 to a year ending on December 31. The first new
twelve-month fiscal year will end on December 31, 2000. As a result of the
change in year end, we have issued consolidated financial statements as of
December 31, 1999 and for the period from September 1, 1999 to December 31,
1999.

Results of Operations

Three and Nine Months Ended May 31, 2000 Compared to Three and Nine Months
Ended May 31, 1999

   We incurred a net loss of $13.0 million and $41.6 million, respectively,
during the three and nine-month periods ended May 31, 2000 compared to a net
loss of $6.6 million and $20.2 million, respectively, in the corresponding
periods of the prior year. The increase in net loss relates primarily to
increased operating expenses associated with the development of new markets and
the launch of commercial service in new markets. Cricket wireless service was
launched in Nashville, Tennessee in late January 2000. As a result, total
subscribers on our networks reached approximately 46,000 subscribers at May 31,
2000.

   As a direct result of the purchase of Chase Telecommunications in March
2000, we recorded $4.0 million of operating revenues, $3.2 million of cost of
operating revenues, $3.5 million of additional selling, general and
administrative expenses, $2.0 million of additional depreciation and
amortization and $1.4 million of additional net interest expense during the
three and nine months ended May 31, 2000.

   We generated $4.8 million in operating revenue during the three and nine
month periods ended May 31, 2000 from Cricket service in Nashville and
Chattanooga, Tennessee, since our March 2000 acquisition of Chase
Telecommunications. During the nine month period ended May 31, 1999, we did not
report any operating revenues because our investment in Chase
Telecommunications Holdings was accounted for under the equity method of
accounting. Chase Telecommunications generated revenues of $1.9 million in the
nine month period ended May 31, 1999.

   We incurred $8.5 million and $15.1 million of selling, general and
administrative expenses during the three and nine-month periods ended May 31,
2000, respectively, compared to $2.9 million and $5.3 million in the
corresponding periods of the prior year. Selling, general and administrative
expenses increased by

                                       14
<PAGE>

$5.6 million and $9.8 million, respectively, over the corresponding three and
nine-month periods of the prior year due to the development and support of
commercial service in new markets.

   We incurred operating losses of $10.3 million and $16.9 million during the
three and nine-month periods ended May 31, 2000, respectively, compared to
operating losses of $2.9 million and $5.3 million in the corresponding periods
of the prior year. The increase in our operating losses compared to the prior
periods reflects the consolidation of Chase Telecommunications and the
development and launch of commercial service in new markets. We expect
continued substantial growth in subscribers, operating revenues and operating
expenses as a result of our planned development and launch of Cricket service
in additional U.S. markets.

   Equity in net loss of Chase Telecommunications Holdings was $0.0 million and
$20.2 million during the three and nine-month periods ended May 31, 2000,
respectively, compared to $3.7 million and $14.9 million in the corresponding
periods of the prior year.

   Interest expense was $3.2 million and $6.1 million during the three and
nine-month periods ended May 31, 2000, respectively. Interest expense relates
primarily to the financing of our wireless communications networks. There was
no consolidated interest expense during the prior periods. We expect interest
expense to increase substantially in the future due to expected additional
borrowings used to fund the construction of wireless networks in various
markets across the United States.

Liquidity and Capital Resources

   Over the next twelve months from November 2000, we have budgeted a total of
approximately $1,233.0 million for capital expenditures for the build-out of
Cricket networks and to fund operating losses. Our actual expenditures may vary
significantly depending upon the progress of the build-out of our networks and
other factors, including unforeseen delays, cost overruns, unanticipated
expenses, regulatory expenses, engineering design changes and other
technological risks.

   As of September 30, 2000, we had a total of approximately $1,916.4 million
in unused capital resources for our future cash needs as follows:

  .  approximately $380.2 million in consolidated cash, cash equivalents and
     investments on hand; and

  .  approximately $1,536.2 million in commitments under vendor financing
     arrangements with Lucent Technologies, Nortel Networks and Ericsson,
     with availability based on a ratio of the total amounts of products and
     services purchased.

   Accordingly, we believe that we have adequate capital resources to fund our
operations for the next twelve months.

   We expect to incur significant operating losses and to generate significant
negative cash flow from operating activities in the future while we continue to
build-out our networks and build our customer base. Our ability to satisfy our
debt repayment obligations and covenants depends upon our future performance,
which is subject to a number of factors, many of which are beyond our control.
We cannot guarantee that we will generate sufficient cash flow from our
operating activities to meet our debt service and working capital requirements,
and we may need to refinance our indebtedness. However, our ability to
refinance our indebtedness will depend on, among other things, our financial
condition, the state of the public and private debt and equity markets, the
restrictions in the instruments governing our indebtedness and other factors,
some of which may be beyond our control. In addition, if we do not generate
sufficient cash flow to meet our debt service requirements or if we fail to
comply with the covenants governing our indebtedness, we may need additional
financing in order to service or extinguish our indebtedness. We may not be
able to obtain financing or refinancing on terms that are acceptable to us, or
at all.

   We expect that we will require significant additional financing over the
next several years to substantially complete the build-out of our planned
wireless networks in the U.S. These capital requirements include capital

                                       15
<PAGE>

expenditures for network construction, operating cash flow losses and other
working capital costs and debt service. As is typical for start-up
telecommunications networks, we expect our networks to incur operating expenses
significantly in excess of revenues in their early years of operations. Leap is
exploring other debt and equity financing alternatives, including the sale from
time to time of convertible preferred stock, convertible debentures and other
debt and equity securities. However, Leap may not be able to raise additional
capital on terms that are acceptable to it, or at all.

   Leap has announced that it intends to use a substantial portion of the net
proceeds from its February 2000 equity offering and units offering for capital
expenditures for the build out of Cricket networks, to fund operating losses
expected to be incurred by the Company, for the completed acquisition of
substantially all of the assets of Chase Telecommunications Holdings in March
2000 and to acquire additional wireless licenses to be used by the Company to
offer Cricket service. In June 2000, Leap contributed $369.7 million in cash
funding and other assets to us subsequent to our merger with Leap.

Credit Facilities and Other Financing Arrangements

   Lucent Equipment Financing. In September 1999, Cricket Communications agreed
to purchase up to $330.0 million of infrastructure products and services from
Lucent Technologies, Inc., and in June 2000 increased the value of products and
services that can be purchased under the agreement to up to $900.0 million. The
purchase agreement is subject to early termination at Cricket Communications'
convenience subject to payments for products and services purchased. Lucent
agreed to finance these purchases plus additional working capital under a
credit facility. The credit facility originally permitted up to $641.0 million
in total borrowings, which was increased to up to $1,350.0 million in June
2000, with borrowing availability generally based on the total amount of
products and services purchased from Lucent. Lucent is not required to make
loans under the facility if the total of the loans held directly or supported
by Lucent is an amount greater than $815.0 million. The agreement contains
various covenants and conditions typical for a loan of this type, including
minimum levels of customers and covered potential customers that must increase
over time, limits on annual capital expenditures, dividend restrictions and
other financial ratio tests. Borrowings under the Lucent credit facility accrue
interest at a rate equal to LIBOR plus 3.5% to 4.25% or a bank base rate plus
2.5% to 3.25%, in each case with the specific rate based on the ratio of total
indebtedness to EBITDA. Cricket Communications must pay a commitment fee equal
to 1.25% per annum on the unused commitment under the facility, decreasing to
0.75% per annum. Principal payments are scheduled to begin after three years
with a final maturity after eight years. Repayment is weighted to the later
years of the repayment schedule. The obligations under the Lucent credit
agreement, together with the obligations under similar facilities from Nortel
Networks, Inc. and Ericsson Wireless Communications, Inc., are secured by all
of the stock of Cricket Communications, its subsidiaries and the stock of each
special purpose subsidiary of Leap formed to hold wireless licenses used in
Cricket Communications' business, and all of their respective assets. At May
31, 2000, Cricket Communications had $111.0 million outstanding under the
Lucent credit agreement at an interest rate of 10.63%.

   Nortel Equipment Financing. In August 2000, Cricket Communications entered
into a three-year supply agreement with Nortel for the purchase of
infrastructure products and services. Nortel agreed to finance these purchases
plus additional working capital under a credit facility. The credit facility
permits up to $525.0 million in total borrowings, with borrowing availability
based on a ratio of the total amount of products and services purchased from
Nortel. The credit agreement contains various covenants and conditions typical
for a loan of this type, including minimum levels of customers and covered
potential customers that must increase over time, limits on annual capital
expenditures and other financial ratio tests. The obligations under the credit
agreement, together with the obligations under similar facilities from Lucent
and Ericsson, are secured by all of the stock of Cricket Communications, its
subsidiaries and the stock of each special purpose subsidiary of Leap formed to
hold wireless licenses used in Cricket Communications' business, and all of
their respective assets. Borrowings under the credit facility accrue interest
at a rate equal to LIBOR plus 3.5% to 4.25% or a bank base rate plus 2.5% to
3.25%, in each case with the specific rate based on the ratio of total
indebtedness to EBITDA. Cricket Communications must pay a commitment fee equal
to 1.25% per annum on the unused commitment under the

                                       16
<PAGE>

credit facility, decreasing to 0.75% per annum. Principal payments are
scheduled to begin after three years with a final maturity after eight years.
Repayment is weighted to the later years of the repayment schedule.

   Ericsson Equipment Financing. In October 2000, Cricket Communications
entered into a three-year supply agreement with Ericsson for the purchase of up
to $330.0 million of infrastructure products and services. Ericsson Credit AB
agreed to finance these purchases plus additional working capital under a
credit facility. These agreements amended and replaced the binding memorandum
of agreement between the parties dated September 20, 1999. The credit facility
permits up to $495.0 million in total borrowings, with borrowing availability
based on a ratio of the total amount of products and services purchased from
Ericsson. The credit agreement contains various covenants and conditions
typical for a loan of this type, including minimum levels of customers and
covered potential customers that must increase over time, limits on annual
capital expenditures, dividend restrictions and other financial ratio tests.
The obligations under the credit agreement, together with the obligations under
similar facilities from Lucent and Nortel, are secured by all of the stock of
Cricket Communications, its subsidiaries and the stock of each special purpose
subsidiary of Leap formed to hold wireless licenses used in Cricket
Communications' business, and all their respective assets. Borrowings under the
credit facility accrue interest at a rate equal to LIBOR plus 3.5% to 4.25% or
a bank base rate plus 2.5% to 3.25%, in each case with the specific rate based
on the ratio of total indebtedness to EBITDA. Cricket Communications must pay a
commitment fee equal to 1.25% per annum on the unused commitment under the
credit facility, decreasing to 0.75% per annum. Principal payments are
scheduled to begin after three years with a final maturity after eight years.
Repayment is weighted to the later years of the repayment schedule.

   Cricket Communications, Lucent, Nortel and Ericsson have entered into an
agreement pursuant to which Lucent, Nortel and Ericsson agreed to share
collateral and the parties agreed that Cricket Communications' total
outstanding balance of loans to the three vendors shall not exceed $1,845.0
million.

Operating Activities

   We used $21.8 million in cash for operating activities during the nine month
period ended May 31, 2000 compared to $5.3 million in the corresponding period
of the prior year. The increase is primarily attributable to increased
marketing and other customer acquisition costs associated with the development
and launch of new markets. We expect that cash used in operating activities
will increase substantially in the future as a result of our planned
development and launch of Cricket service in multiple U.S. markets.

Investing Activities

   Cash used in investing activities was $27.6 million during the nine-month
period ended May 31, 2000 compared to $14.9 million in the corresponding period
of the prior year. Investments during the nine-month period ended May 31, 2000
consisted of loans to Chase Telecommunications of $17.0 million, the
acquisition of Chase Telecommunications for $1.3 million net of cash acquired,
the purchase of held-to-maturity investments of $5.0 million and capital
expenditures of $4.3 million. In the remainder of 2000, we expect to make
significant investments in capital assets, including network equipment.

Financing Activities

   Cash provided by financing activities during the nine-month period ended May
31, 2000, primarily from Leap's investment and advances, was $72.1 million.
Cash provided by financing activities in the corresponding period of the prior
year was $20.2 million, primarily from Leap's investment and advances.

Future Accounting Requirements

   In June 1998, the Financial Accounting Standards Board issued ("FASB")
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for the year ending
December 31, 2001. In June 2000, the FASB issued SFAS No. 138 which

                                       17
<PAGE>

amended SFAS No. 133 for certain derivative instruments and hedging activities.
Under SFAS No. 133, all derivatives must be recognized as assets and
liabilities and measured at fair value. We do not expect that the adoption of
SFAS No. 133 will have a material impact on our consolidated financial position
or results of operations.

   In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements". SAB No. 101 summarizes certain of the Staff's interpretations in
applying generally accepted accounting principles to revenue recognition. The
provisions of SAB No. 101 are effective for the Company's quarter ending
December 31, 2000. Leap does not expect that the adoption of SAB No. 101 will
have a material impact on its consolidated financial position or results of
operations.

   In March 2000, the FASB issued Financial Accounting Standards Interpretation
("FIN") No. 44, "Accounting for Certain Transactions Involving Stock
Compensation--an Interpretation of APB 25." FIN 44 clarifies the application of
Opinion 25 for (a) the definition of employee for purposes of applying Opinion
25, (b) the criteria for determining whether a stock option or award qualifies
as a non compensatory plan, (c) the accounting consequences of various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. FIN 44 is effective July 1, 2000, but certain conclusions cover
specific events that occur after either December 15, 1998 or January 12, 2000.
Leap does not expect that the adoption of FIN 44 will have a material effect on
its consolidated financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

   Our exposure to market risk for changes in interest rates relates primarily
to our variable rate long-term debt obligations. For a description of our long-
term debt obligations, see Note 3 to the Condensed Consolidated Financial
Statements, which are included elsewhere herein. The general level of U.S.
interest rates and/or LIBOR affect the interest expense that we recognize on
our variable rate long-term debt obligations. As of May 31, 2000, the principal
amounts of our variable rate long-term debt obligations amounted to
approximately $111.0 million. An increase of 10% in interest rates would
increase our interest expense for the next twelve months by approximately $1.2
million. This hypothetical amount is only suggestive of the effect of changes
in interest rates on our results of operations for the next twelve months.

                                       18
<PAGE>

                                    PART II

                               OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

   In July 1999, the FCC issued an opinion and order that found that Leap was
qualified to acquire C-Block and F-Block licenses. The order also approved
Leap's acquisition of the 36 C-Block licenses for which Leap was the high
bidder in the FCC's 1999 spectrum reauction, and approved the transfer to Leap
of three F-Block licenses covering portions of North Carolina, in each case
subject to the fulfillment of some conditions. Various parties previously
challenged Leap's qualification to hold C-Block and F-Block licenses, which
challenges were rejected in the FCC's July 1999 order. One of these parties,
Carolina PCS Limited Partnership I, L.P., a wireless operating company,
requested that the FCC review its order, as well as the order consenting to the
transfer of licenses to Leap from Chase Telecommunications and PCS Devco. In
July 2000, the FCC affirmed its July 1999 order, as well as the order
consenting to the transfer of licenses to Leap from Chase Telecommunications
and PCS Devco, and Carolina PCS subsequently appealed the FCC's decision to the
U.S. Court of Appeal for the D.C. Circuit. Leap has filed a motion seeking
summary dismissal of this appeal, based upon Leap's belief that Carolina PCS
has no standing to challenge the FCC's July 2000 order. The FCC has filed in
support of Leap's motion, which awaits disposition by the court. Leap believes
the arguments of Carolina PCS are without merit and intends to vigorously
contest the appeal.

   Various claims arising in the course of business, seeking monetary damages
and other relief, are pending. The amount of the liability, if any, from such
claims cannot be determined with certainty; however, in the opinion of
management, the ultimate liability for such claims will not have a material
adverse effect on Cricket Communications Holdings' consolidated financial
position, results of operations or cash flows

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

   (c)

   (1) In March 2000, the Company amended the stock option agreements of
certain option holders to allow for early exercise of options to purchase
unvested stock and provide a right of repurchase for the Company. The stock
vests over the remaining option vesting period. The Company may elect to
repurchase the unvested shares at the original exercise price. In March 2000,
the Company issued 855,667 shares of common stock to 12 persons at a weighted
average exercise price of $2.49 per share pursuant to such amended stock option
agreements. Of the total proceeds of approximately $2.1 million, $1.7 million
was received by Leap and reduced accounts payable to Leap.

   (2) From March 1, 2000 to May 31, 2000, the Company issued options to
approximately 93 employees to purchase a total of 74,070 shares of common stock
at a weighted average exercise price of $19.05 per share. No consideration was
paid to the Company by any recipient of any of the foregoing options for the
grant of any such options. None of the options granted during this time period
have been exercised. In June 2000, through a subsidiary merger, Leap acquired
the 5.11% of the Company that it did not already own. In connection with the
merger, Leap assumed all unexpired and unexercised Company stock options
outstanding at the time of the merger, whether vested or unvested, which upon
conversion amounted to options to purchase 407,784 shares of Leap's common
stock.

   The issuances described above were deemed exempt from registration under the
Securities Act in reliance on Rule 701 promulgated thereunder as transactions
pursuant to compensatory benefit plans and contracts relating to compensation.
The recipients of securities in each such transaction represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the stock certificates and other instruments issued in such
transactions. All recipients either received adequate information about the
registrant or had access, through employment or other relationships, to such
information.

                                       19
<PAGE>

   (3) In March 2000, the Company issued a warrant to purchase 1% of the common
stock of the Company to Chase Telecommunications Holdings at an aggregate
exercise price of $1.0 million. In connection with the merger in June 2000,
Leap assumed the Company's warrant obligation.

   The issuance of the warrant was deemed to be exempt from registration under
the Securities Act in reliance on Section 4(2) of the Securities Act as a
transaction by an issuer not involving a public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

   None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

   None.

ITEM 5. OTHER INFORMATION.

   None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

   (a) Index to Exhibits:

27.1*Financial Data Schedule.
--------
*  Filed herewith.

   (b) Reports on Form 8-K.

   A Current Report on Form 8-K was filed on August 30, 2000 announcing that on
July 31, 2000, the Board of Directors of Cricket Communications Holdings, Inc.,
a Delaware corporation (the "Company"), elected to change its fiscal year from
a year ending on August 31 to a year ending on December 31. The first new
twelve-month fiscal year will end on December 31, 2000. The four-month
transition period beginning September 1, 1999, and ending December 31, 1999,
was reported on a Transition Report on Form 10-K that was filed with the
Securities and Exchange Commission on October 30, 2000, pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

                                       20
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          CRICKET COMMUNICATIONS HOLDINGS,
                                           INC.

Date: November 13, 2000                           /s/ Harvey P. White
                                          By: _________________________________
                                                      Harvey P. White
                                                Chairman and Chief Executive
                                                          Officer

Date: November 13, 2000                          /s/ Stephen P. Dhanens
                                          By: _________________________________
                                                     Stephen P. Dhanens
                                                 Vice President, Corporate
                                                         Controller
                                                 (Chief Accounting Officer)

                                       21
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
 <C>   <S>
 27.1* Financial Data Schedule.
</TABLE>
--------
*  Filed herewith.

                                       22