Ribbit LEAP Limited 8-K Leap Reports Results for Third Quarter of 2005

EXHIBIT 99.1

Bock Communications, Inc.	Leap contacts:
Delona Lang, Media Relations 714-540-1030 ext. 22 dlang@bockpr.com	Kristin Atkins, Media Relations 858-882-9105 katkins@leapwireless.com
	Jim Seines, Investor Relations 858-882-6084 jseines@leapwireless.com

Leap Reports Results for Third Quarter of 2005

~ Solid Performance Marked by Strong Year-Over-Year Growth in Customers, Total Revenues
and Adjusted EBITDA ~

SAN DIEGO — November 9, 2005 — Leap Wireless International, Inc. [NASDAQ: LEAP], a leading provider of innovative and value-driven wireless communications services, today announced strong financial results for the third quarter of 2005. These results reflect continued strong year-over-year growth in total revenues and adjusted consolidated earnings before interest, taxes, depreciation and amortization (EBITDA).

Total consolidated revenues for the third quarter were $230.5 million, an increase of $23.6 million over the total consolidated revenues of $206.9 million for the third quarter of 2004. Consolidated operating income for the third quarter was $28.6 million, an increase of $26.4 million over consolidated operating income of $2.2 million for the third quarter of 2004. Consolidated net loss for the third quarter totaled $7.6 million, or a loss of $0.13 per diluted share. This compares to consolidated net income in the third quarter of 2004 of $957.3 million, which included $963.2 million of reorganization items, net, reflecting the net impact of fresh-start reporting and other bankruptcy related items.

Adjusted consolidated EBITDA for the third quarter of 2005 was $66.5 million, representing a 16% percent increase over the adjusted consolidated EBITDA of $57.5 million for the third quarter of 2004. Adjusted consolidated EBITDA represents consolidated EBITDA adjusted to exclude the effects of: reorganization items, net; other income (expense), net; gain/loss on sale of wireless licenses and operating assets; impairment of indefinite-lived intangible assets; impairment of long-lived assets and related charges; and stock-based compensation expense. The adoption of fresh-start reporting as of July 31, 2004 resulted in material adjustments to the historical carrying values of the Company’s assets and liabilities. As a result, the Company’s

Leap Reports Results for Third Quarter of 2005	Page 2 of 16

post-emergence balance sheets, statements of operations and statements of cash flows are not comparable in many respects to the Company’s financial statements for periods ending prior to the Company’s emergence from Chapter 11.

“Our performance during the third quarter reflects an overall strengthening of our business as our product development activities, distribution improvements and marketing strategies have taken effect,” said Doug Hutcheson, president and chief executive officer of Leap. “Once again, we have demonstrated an ability to generate solid operational performance, even while supporting the costs associated with our new market launch activities and systems upgrades to meet regulatory requirements and to support future improvements in efficiency. We are on track to meet our goals for 2005 while implementing our strategic plans, and we are looking toward the coming year with great anticipation.”

“As 2006 approaches, well-managed growth becomes a priority and it is our goal to continue the strong performance shown in our operational markets throughout 2005 as we launch new markets in key clusters across the country,” continued Hutcheson. “To provide insight into our expectations for the coming year, we are providing an outlook for adjusted consolidated EBITDA and capital spending for 2006. We intend to capitalize on the momentum of each new market launch and our new services and products throughout the year while maintaining a well-balanced approach to managing our cost performance.”

Key operational and financial performance measures for the third quarter of 2005 are as follows:

• Gross customer additions for the quarter were approximately 234,000, an improvement of over 33,000 from the approximately 200,000 gross customer additions for the third quarter of 2004.

• Reflecting both net new customer growth in both Leap’s older markets and in its new market cluster in the Central Valley of California, net customer additions for the quarter were approximately 23,000 compared to a net customer reduction of approximately 8,000 for the third quarter of 2004, bringing total customers at the end of the current period to approximately 1,623,000. The Company’s net customer additions for the third quarter of 2005 exclude the effect of the transfer of approximately 19,000 customers from the Company’s network as a result of closing the sale on the Company’s operating markets in Michigan.

Leap Reports Results for Third Quarter of 2005	Page 3 of 16

• Churn for the quarter was 4.4%, 0.1% lower than the churn rate of 4.5% for the third quarter of 2004.

• Average revenue per user per month (ARPU) for the third quarter, based on service revenue, was $40.22, an improvement of $3.25 from the ARPU of $36.97 for the third quarter of 2004.

• Cost per gross customer addition (CPGA) for the third quarter was $142, comparable to the CPGA of $141 reported for the third quarter of 2004.

• Non-selling cash costs per user per month (CCU) was $19.52 for the third quarter, an increase of $1.14 from the CCU of $18.38 for the third quarter of 2004.

• Average minutes of use per customer per month (MOU) during the third quarter of 2005 was approximately 1,450, reflecting typical seasonal variations from the MOU data reported for the first two quarters of 2005

• Purchases of property and equipment (capital expenditures) for the three months ended September 30, 2005, were $38.7 million, bringing cumulative capital expenditures for 2005 to $82.3 million, excluding prepayments for purchases.

“The strength of our business is evidenced by our financial performance, confirming the value of pursuing growth in targeted markets and focusing on developing products for an underserved customer segment,” said Dean Luvisa, Leap’s acting chief financial officer. “With nearly $400 million in cash at the close of the third quarter, we believe that our current cash position, combined with our expected cash flow from operations, adequately positions us for the significant capital investments ahead of us as we build-out the planned new markets. Looking forward, we expect to maintain good liquidity and relatively low leverage positions, while opportunistically drawing on the capital markets to position ourselves to capture future opportunities that enhance the value of the company.”

Revised 2005 Business Outlook and Initial Outlook for 2006

The following forward-looking statements are based on management’s existing plans and its review of current information, which is dynamic and subject to rapid, even abrupt change. These forward-looking statements are qualified by that fact and speak only of management’s views as of the date of this release. Leap does not undertake any obligation to update this information. Actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with Leap’s business. Factors that could cause actual results to differ from these forward-looking statements are described later in this release.

Leap Reports Results for Third Quarter of 2005	Page 4 of 16

The Company’s current outlook for fiscal year 2005 is for:

• Total net customer additions (excluding the transfer of approximately 19,000 customers resulting from the Company’s August 2005 sale of its Michigan markets) to be between 125,000 and 150,000, revised from between 125,000 and 175,000;

• Annual churn to be between 3.8 percent and 4.0 percent, revised from between 3.7 percent and 4.0 percent;

• Total consolidated revenue to be between $910 million and $940 million, revised from a range of $910 million to $950 million;

• Adjusted consolidated EBITDA (including costs associated with new market development activities) to be between $270 million and $280 million, revised from a range of $265 million to $285 million; and,

• Capital expenditures, excluding capitalized interest, to be between $150 million and $200 million for fiscal year 2005 revised from a range of $175 million to $230 million.

The Company also provided its initial outlook for fiscal year 2006:

• Adjusted consolidated EBITDA is expected to be between $240 million and $300 million, reflecting the Company’s expectation for adjusted EBITDA growth in the markets in operation at the end of 2005 and the anticipated operational and financial performance of the markets Leap and its joint venture, Alaska Native Broadband 1 (ANB1), expect to launch in 2006.

• Consolidated capital expenditures are expected to be between $410 million and $500 million, reflecting both Leap and ANB1’s investment in the development of their respective Auction 58 properties and the expected introduction of EVDO technology in Leap markets during 2006.

Leap’s initial outlook for 2006 does not include the effect of the proposed sale and joint venture transactions announced on November 8, 2005.

Leap Reports Results for Third Quarter of 2005	Page 5 of 16

Conference Call Note

As previously announced, Leap will hold a conference call to discuss these results, the outlook for 2005 and the initial outlook for 2006 at 5:00 p.m. Eastern Standard Time, on Wednesday, November 9, 2005. Forward-looking and other material information may also be discussed during this call. Interested parties may listen to the call live by dialing 1-866-831-6234 or 1-617-213-8854 and entering reservation number 88826394. This call is also being web cast and can be accessed at the Investor Relations section of Leap’s website, www.leapwireless.com, or by accessing the following external websites: www.fulldisclosure.com or www.streetevents.com.

To listen to the call, please go to the website at least 15 minutes prior to the start time to register, and download and install any necessary audio software. An online replay is planned to follow shortly after the live conference call and will be available until December 14, 2005. The telephonic rebroadcast will be available shortly after the completion of the call and will be available until midnight on November 16, 2005. Interested parties can access the rebroadcast by dialing 1-888-286-8010 or 1-617-801-6888 and entering the reservation number 16390325.

About Leap

Leap, headquartered in San Diego, Calif., is a customer-focused company providing innovative mobile wireless services targeted to meet the needs of customers under-served by traditional communications companies. With the value of unlimited wireless services as the foundation of its business, Leap pioneered both the Cricket^® and Jump^TM Mobile services. Through a variety of low, flat rate, service plans, Cricket service offers customers a choice of unlimited anytime local voice minutes, unlimited anytime domestic long distance voice minutes, unlimited text, instant and picture messaging and additional value-added services over a high-quality, all-digital CDMA network. Designed for the urban youth market, Jump Mobile is a unique prepaid wireless service that offers customers free unlimited incoming calls from anywhere with outgoing calls at an affordable 10 cents per minute and free incoming and outgoing text messaging. Both Cricket and Jump Mobile services are offered without long-term commitments or credit checks. For more information, please visit www.leapwireless.com.

Leap Reports Results for Third Quarter of 2005	Page 6 of 16

Notes Regarding Non-GAAP Financial Measures

The information presented in this press release and in the attached financial tables includes financial information prepared in accordance with generally accepted accounting principles in the U.S., or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure, within the meaning of Securities and Exchange Commission (SEC) Item 10 to Regulation S-K, is a numerical measure of a company’s financial performance or cash flows that (a) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated balance sheet, consolidated statement of operations or consolidated statement of cash flows; or (b) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. As described more fully in the notes to the attached financial tables, management supplements the information provided by financial statement measures with several customer-focused performance metrics that are widely used in the telecommunications industry. Adjusted consolidated EBITDA, CPGA, and CCU are non-GAAP financial measures. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Reconciliations of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures can be found in the section entitled “Definition of Terms and Reconciliation of Non-GAAP Financial Measures” included toward the end of this release.

Except for the historical information contained herein, this news release contains “forward-looking statements” reflecting management’s current forecast of certain aspects of Leap’s future. Some forward-looking statements can be identified by forward-looking words such as “believe,” “think,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” “would” and similar expressions. This news release is based on current information, which we have assessed but which by its nature is dynamic and subject to rapid and even abrupt changes. Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. Factors that could cause actual results to differ include, but are not limited to:

• 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 our Form 10-Q for the fiscal quarter ended June 30, 2005 and in our other SEC filings.

All forward-looking statements included in this news release should be considered in the context of these risk factors. We undertake no obligation to publicly update or revise any forward-looking statements,

Leap Reports Results for Third Quarter of 2005	Page 7 of 16

whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

Leap and the Leap logo design are registered trademarks of Leap Wireless International, Inc. Cricket is a registered trademark of Cricket Communications, Inc. Cricket Unlimited Access, Cricket Unlimited Plus, Cricket Unlimited Classic, Jump Mobile, Travel Time, Cricket Clicks and the Cricket K are trademarks of Cricket Communications, Inc.

Leap Reports Results for Third Quarter of 2005	Page 8 of 16

LEAP WIRELESS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS⁽¹⁾
(In Thousands)

	Successor Company
	September 30,			December 31,
	2005			2004
	(Unaudited)
Assets
Cash and cash equivalents	$	168,288		$	141,141
Short-term investments		223,497			113,083
Restricted cash, cash equivalents and short-term investments		21,588			31,427
Inventories		22,979			25,816
Other current assets		26,282			35,144
Total current assets		462,634			346,611
Property and equipment, net		532,744			575,486
Wireless licenses		829,512			652,653
Assets held for sale		9,756			—
Goodwill		329,619			329,619
Other intangible assets, net		123,617			151,461
Deposits for wireless licenses		—			24,750
Other assets		18,244			9,902
Total assets	$	2,306,126		$	2,090,482
Liabilities and Stockholders’ Equity
Accounts payable and accrued liabilities	$	76,185		$	91,093
Current maturities of long-term debt		6,111			40,373
Other current liabilities		59,513			71,965
Total current liabilities		141,809			203,431
Long-term debt		589,861			371,355
Other long-term liabilities		83,286			45,846
Total liabilities		814,956			620,632
Minority interest		1,730			—
Commitments and contingencies
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			6
Additional paid-in capital		1,511,648			1,478,392
Unearned stock-based compensation		(23,405	)		—
Accumulated deficit		(1,016	)		(8,629	)
Accumulated other comprehensive income		2,207			81
Total stockholders’ equity		1,489,440			1,469,850
Total liabilities and stockholders’ equity	$	2,306,126		$	2,090,482

Leap Reports Results for Third Quarter of 2005	Page 9 of 16

LEAP WIRELESS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)⁽¹⁾
(UNAUDITED)
(In thousands, except per share data)

							Predecessor
	Successor Company						Company
	Three Months			Two Months			One Month
	Ended			Ended			Ended
	September 30,			September 30,			July 31,
	2005			2004			2004
Revenues:
Service revenues	$	193,675		$	113,011		$	57,375
Equipment revenues		36,852			24,772			11,749
Total revenues		230,527			137,783			69,124
Operating expenses(2):
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		14,593			—			532
Operating 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			303
Income (loss) before reorganization items and income taxes		27,298			722			(3,496	)
Reorganization items, net		—			—			963,156
Income before income taxes		27,298			722			959,660
Income taxes		(34,860	)		(2,704	)		(295	)
Net income (loss)		(7,562	)		(1,982	)		959,365
Other comprehensive income (loss):
Unrealized holding gains (losses) on investments, net		111			(110	)		—
Unrealized gains on derivative instruments		3,303			—			—
Comprehensive income (loss)	$	(4,148	)	$	(2,092	)	$	959,365
Net income (loss) per share:
Basic	$	(0.13	)	$	(0.03	)	$	16.36
Diluted	$	(0.13	)	$	(0.03	)	$	16.36
Shares used in per share calculations:
Basic		60,246			60,000			58,631
Diluted		60,246			60,000			58,631

Leap Reports Results for Third Quarter of 2005	Page 10 of 16

LEAP WIRELESS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)⁽¹⁾
(UNAUDITED)
(In thousands, except per share data)

							Predecessor
	Successor Company						Company
	Nine Months			Two Months			Seven Months
	Ended			Ended			Ended
	September 30,			September 30,			July 31,
	2005			2004			2004
Revenues:
Service revenues	$	569,360		$	113,011		$	398,451
Equipment revenues		116,366			24,772			83,196
Total revenues		685,726			137,783			481,647
Operating expenses(2):
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		14,593			—			532
Operating 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		—			—			962,444
Income before income taxes		42,778			722			917,356
Income taxes		(35,165	)		(2,704	)		(4,166	)
Net income (loss)		7,613			(1,982	)		913,190
Other comprehensive income (loss):
Unrealized holding gains (losses) on investments, net		130			(110	)		—
Unrealized gains on derivative instruments		1,996			—			—
Comprehensive income (loss)	$	9,739		$	(2,092	)	$	913,190
Net income (loss) per share:
Basic	$	0.13		$	(0.03	)	$	15.58
Diluted	$	0.13		$	(0.03	)	$	15.58
Shares used in per share calculations:
Basic		60,093			60,000			58,623
Diluted		60,727			60,000			58,623

Leap Reports Results for Third Quarter of 2005	Page 11 of 16

LEAP WIRELESS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS⁽¹⁾
(UNAUDITED)
(In thousands)

							Predecessor
	Successor Company						Company
	Nine Months			Two Months			Seven Months
	Ended			Ended			Ended
	September 30,			September 30,			July 31,
	2005			2004			2004
Operating activities:
Net cash provided by operating activities	$	191,191		$	27,045		$	120,623
Investing activities:
Purchases of property and equipment		(82,259	)		(13,568	)		(34,456	)
Prepayments for purchases of property and equipment		(1,137	)		3,135			1,215
Purchases of and deposits for wireless licenses		(243,987	)		—			—
Proceeds from sale of wireless licenses and operating assets		99,050			—			2,000
Purchases of investments		(270,587	)		(12,798	)		(87,201	)
Sales and maturities of investments		158,501			7,300			58,333
Restricted cash, cash equivalents and short-term investments, net		83			11,453			9,810
Net 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	)		70,324
Cash and cash equivalents at beginning of period		141,141			154,394			84,070
Cash and cash equivalents at end of period	$	168,288		$	140,234		$	154,394
Supplementary disclosure of cash flow information:
Cash paid for interest	$	44,951		$	8,227		$	—
Cash paid for income taxes		280			140			76
Cash 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		—			—			1,984
Interest income		—			—			1,485
Supplementary disclosure of non-cash investing and financing activities:
Issuance of restricted stock awards under stock compensation plan		3,897			—			—

Leap Reports Results for Third Quarter of 2005	Page 12 of 16

SCHEDULE OF SELECTED OPERATING METRICS
(Unaudited)

	Three Months Ended
	September 30,
	2005			2004
Gross customer additions		233,699			200,315
Net customer additions (losses)(3)		23,298			(7,594	)
End of period customers		1,622,526			1,539,770
Weighted average number of customers		1,605,222			1,536,314
Churn(4)		4.4	%		4.5	%
ARPU(5)	$	40.22		$	36.97
CPGA(6)	$	142		$	141
CCU(7)	$	19.52		$	18.38
Adjusted consolidated EBITDA (in thousands)(8)	$	66,528		$	57,457
Adjusted consolidated EBITDA as a percentage of service revenue		34	%		34	%

Explanatory Notes to Financial Statements

(1)

In connection with its emergence from bankruptcy, the Company adopted fresh-start reporting as of July 31, 2004. Under fresh-start reporting, a new entity is deemed to be created for financial reporting purposes. Therefore, as used in these condensed consolidated financial statements, the Company is referred to as the “Predecessor Company” for periods on or prior to July 31, 2004 and is referred to as the “Successor Company” for periods after July 31, 2004, after giving effect to the implementation of fresh-start reporting. The financial statements of the Successor Company are not comparable in many respects to the financial statements of the Predecessor Company because of the effects of the consummation of the Plan of Reorganization as well as the adjustments for fresh-start reporting. A summary of the effects of consummation of the Plan of Reorganization and a description of the adjustments to the Predecessor Company’s consolidated balance sheet at July 31, 2004 resulting from the application of fresh-start reporting is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 filed with the SEC on May 16, 2005.

(2)

The Company recorded $2.7 million and $9.9 million in stock-based compensation expense for the three and nine months ended September 30, 2005, respectively, resulting from granting of restricted common stock and deferred stock units. The total intrinsic value of the deferred stock units of $6.9 million was recorded as stock-based compensation expense during the nine months ended September 30, 2005 because the deferred stock units were immediately vested upon grant. The total intrinsic value of the restricted stock awards as of the measurement dates was recorded as unearned compensation, which is included in stockholders’ equity in the unaudited condensed consolidated balance sheet as of September 30, 2005. The unearned compensation is amortized on a straight-line basis over the maximum vesting period of the awards of either three or five years. For the three and nine months ended September 30, 2005, $2.7 million and $2.9 million, respectively, was recorded in stock-based compensation expense for the amortization of unearned compensation.

Leap Reports Results for Third Quarter of 2005	Page 13 of 16

The following table shows the amount of stock-based compensation expense included in operating expenses (allocated to the appropriate line item based on employee classification) in the condensed consolidated statements of operations for the three and nine months ended September 30, 2005 (in thousands):

	Three Months		Nine Months
	Ended		Ended
	September 30, 2005
Stock-based compensation expense included in:
Cost of service	$	217	$	1,014
Selling and marketing expenses		203		896
General and administrative expenses		2,301		7,941
Total stock-based compensation expense	$	2,721	$	9,851

(3) Net Customer additions for the three months ended September 30, 2005 exclude the effect of the transfer of approximately 19,000 customers as a result of the closing of the sale of the Company’s operating markets in Michigan in August 2005.

Definition of Terms and Reconciliation of Non-GAAP Financial Measures

	The Company utilizes certain financial measures that are calculated based on industry conventions and are not calculated based on GAAP. Certain of these financial measures are considered non-GAAP financial measures within the meaning of Item 10 of Regulation S-K promulgated by the SEC.
(4)	Churn, an industry metric that measures customer turnover, is calculated as the net number of customers that disconnect from our service divided by the weighted average number of customers divided by the number of months during the period being measured. As noted above, customers who do not pay their first monthly bill are deducted from our gross customer additions; as a result, these customers are not included in churn. Management uses churn to measure our retention of customers, to measure changes in customer retention over time, and to help evaluate how changes in our business affect customer retention. In addition, churn provides management with a useful measure to compare our customer turnover activity to that of other wireless communications providers. We believe investors use churn primarily as a tool to track changes in our customer retention over time and to compare our customer retention to that of other wireless communications providers.
(5)	ARPU is an industry metric that measures service revenue divided by the weighted average number of customers, divided by the number of months during the period being measured. Management uses ARPU to identify average revenue per customer, to track changes in average customer revenues over time, to help evaluate how changes in our business, including changes in our service offerings and fees, affect average revenue per customer, and to forecast future service revenue. In addition, ARPU provides management with a useful measure to compare our subscriber revenue to that of other wireless communications providers. We believe investors use ARPU primarily as a tool to track changes in our average revenue per customer and to compare our per customer service revenues to those of other wireless communications providers.

Leap Reports Results for Third Quarter of 2005	Page 14 of 16

(6)

CPGA is an industry metric that represents selling and marketing costs, excluding applicable stock-based compensation expense, and the gain or loss on sale of handsets (generally defined as cost of equipment less equipment revenue), excluding costs unrelated to initial customer acquisition, divided by the total number of gross new customer additions during the period being measured. Costs unrelated to initial customer acquisition include the revenues and costs associated with the sale of handsets to existing customers as well as costs associated with handset replacements and repairs (other than warranty costs which are the responsibility of the handset manufacturers). We deduct customers who do not pay their first monthly bill from our gross customer additions, which tends to increase CPGA because we incur the costs associated with this customer without receiving the benefit of a gross customer addition. Management uses CPGA to measure the efficiency of our customer acquisition efforts, to track changes in our average cost of acquiring new subscribers over time, and to help evaluate how changes in our sales and distribution strategies affect the cost-efficiency of our customer acquisition efforts. In addition, CPGA provides management with a useful measure to compare our per customer acquisition costs with those of other wireless communications providers. We believe investors use CPGA primarily as a tool to track changes in our average cost of acquiring new customers and to compare our per customer acquisition costs to those of other wireless communications providers.

The following table reconciles total costs used in the calculation of CPGA to selling and marketing expense, which we consider to be the most directly comparable GAAP financial measure to CPGA. The financial data for the three months ended September 30, 2004 presented below represents the combination of the Predecessor and Successor Companies’ results for that period (unaudited) (in thousands, except gross customer additions and CPGA):

	Three Months Ended
	September 30,
	2005			2004
Selling and marketing expense	$	25,535		$	23,574
Less stock-based compensation expense included in selling and marketing expense		(203	)		—
Plus cost of equipment		49,576			44,153
Less 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		$	28,235
Gross customer additions		233,699			200,315
CPGA	$	142		$	141

(7) CCU is an industry metric that measures cost of service and general and administrative costs, excluding applicable stock-based compensation expenses, gain or loss on sale of handsets to existing customers and costs associated with handset replacements and repairs (other than warranty costs which are the responsibility of the handset manufacturers), divided by the weighted average number of customers, divided by the number of months during the period being measured. CCU does not include any depreciation and amortization expense. Management uses CCU as a tool to evaluate the non-selling cash expenses associated with ongoing business operations on a per customer basis, to track changes in these non-selling cash costs over time, and to help evaluate how changes in our business operations affect non-selling cash costs per

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customer. In addition, CCU provides management with a useful measure to compare our non-selling cash costs per customer with those of other wireless communications providers. We believe investors use CCU primarily as a tool to track changes in our non-selling cash costs over time and to compare our non-selling cash costs to those of other wireless communications providers.

The following table reconciles total costs used in the calculation of CCU to cost of service, which we consider to be the most directly comparable GAAP financial measure to CCU. The financial data for the three months ended September 30, 2004 presented below represents the combination of the Predecessor and Successor Companies’ results for that period (unaudited) (in thousands, except weighted-average number of customers and CCU):

	Three Months Ended
	September 30,
	2005			2004
Cost of service	$	50,304		$	51,034
Plus general and administrative expense		41,306			30,689
Less 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			2,971
Total costs used in the calculation of CCU	$	94,009		$	84,694
Weighted-average number of customers		1,605,222			1,536,314
CCU	$	19.52		$	18.38

(8)

Adjusted consolidated EBITDA represents EBITDA adjusted to exclude the effects of: reorganization items, net; other income (expense), net; gain/loss on sale of wireless licenses and operating assets; impairment of indefinite-lived intangible assets; impairment of long-lived assets and related charges; and stock-based compensation expense. We use adjusted consolidated EBITDA as a supplemental performance measure because management believes it facilitates comparisons of the Company’s operating performance from period to period and comparisons of the Company’s operating performance to that of other companies by backing out potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of fixed assets (affecting relative depreciation expenses) as well as the items described above for which additional adjustments were made. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Because adjusted consolidated EBITDA facilitates internal comparisons of our historical operating performance, management also uses adjusted consolidated EBITDA for business planning purposes and in measuring our performance relative to that of our competitors.

Also, a substantial portion of the bonuses paid to our employees under the Company’s bonus plan and of the performance-based vesting of stock options and restricted stock awards under our equity incentive plan is based on the Company’s achieving adjusted consolidated EBITDA targets. In addition, we believe that adjusted consolidated EBITDA

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and similar measures are widely used by investors, financial analysts and credit rating agencies as a measure of our financial performance over time and to compare our financial performance with that of other companies in our industry. Adjusted consolidated EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:

• it does not reflect capital expenditures;

• although it does not include depreciation and amortization, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted consolidated EBITDA does not reflect cash requirements for such replacements;

• it does not reflect the interest expense necessary to service interest or principal payments on current or future indebtedness;

• it does not reflect expenses incurred for the payment of income taxes and other taxes; and

• other companies, including companies in our industry, may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

Management understands these limitations and considers adjusted consolidated EBITDA as a financial measure that supplements but does not replace the information provided to management by our GAAP results.

The following table reconciles adjusted consolidated EBITDA to consolidated net income (loss), which we consider to be the most directly comparable GAAP financial measure to adjusted consolidated EBITDA. The financial data for the three months ended September 30, 2004 presented below represents the combination of the Predecessor and Successor Companies’ results for that period (unaudited) (in thousands):

	Three Months Ended
	September 30,
	2005			2004
Consolidated net income (loss)	$	(7,562	)	$	957,383
Plus income taxes		34,860			2,999
Plus interest expense		6,679			6,009
Less interest income		(2,991	)		(608	)
Plus depreciation and amortization		49,076			55,820
Consolidated EBITDA	$	80,062		$	1,021,603
Less reorganization items, net		—			(963,156	)
Less other income (expense), net		(2,352	)		(458	)
Less gain on sale of wireless licenses and operating assets		(14,593	)		(532	)
Plus impairment of indefinite-lived intangible assets		689			—
Plus impairment of long-lived assets and related charges		—			—
Plus stock-based compensation awards		2,721			—
Adjusted consolidated EBITDA	$	66,527		$	57,457

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