EXHIBIT 99.1
[LEAP LOGO]
Bock Communications, Inc. Leap contacts:
Stacee Lewis, Media Relations Jen Carroll, Media Relations
714-540-1030 858-882-9266
slewis@bockpr.com jcarroll@leapwireless.com
Jim Seines, Investor Relations
858-882-6084
jseines@leapwireless.com
LEAP REPORTS FINANCIAL RESULTS FOR FOURTH QUARTER AND FISCAL YEAR 2002
~Total Revenues Exceed $600 million for 2002;
Cricket Reports First EBITDA Positive Quarter~
SAN DIEGO - April 15, 2003 - Leap Wireless International, Inc. (OTCBB: LWIN), an
innovator of wireless communications services, today announced financial and
operating results for the fourth quarter and fiscal year 2002. The Company
reported total revenues of more than $618 million for the year ended 2002,
EBITDA of $8.6 million for Leap's Cricket operations during the fourth quarter
of 2002 and approximately 1.512 million Cricket(R) customers as of year end. The
results for the fourth quarter of fiscal year 2002 reflect the Company's
continued provision of quality service to its customers while maintaining its
focus on cost control as it adjusted its business activities to changes in the
overall economic environment.
The reported results for the fourth quarter of fiscal 2002 provide support to a
restructuring process that the Company previously announced and that it believes
will enable Leap and Cricket to reduce their debt and allow Cricket to emerge
from bankruptcy as a stronger business, offering high quality, affordable
wireless service to customers and good opportunities for employees.
"We are proud to deliver positive EBITDA for our Cricket business for the fourth
quarter of 2002 and believe this is a major accomplishment for the Company,
especially in the face of tough economic times," said Harvey P. White, Leap's
chairman and CEO. "The achievement of this key milestone in our financial
performance is the result of the efforts of our team and their dedication to our
business. It demonstrates the strength of our business strategy and our
differentiated product offering."
-more-
Leap Reports Financial Results for Fourth Quarter and Page 2 of 11
Fiscal Year 2002
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FINANCIAL RESULTS
In accordance with recently adopted Securities and Exchange Commission (SEC)
Regulation G, a reconciliation of non-GAAP financial measures used in this
release can be found in the section entitled "Definition of Terms and
Reconciliation of Non-GAAP Financial Measures" included at the end of this
release.
Highlights of the Company's operational results include:
- - Total revenues of $618.5 million for fiscal year 2002.
- - Earnings before interest, taxes, depreciation and amortization (EBITDA) of
$8.6 million for Leap's Cricket operations during the fourth quarter of
2002.
- - Approximately 1.512 million Cricket customers at the end of 2002.
- - Average revenue per user per month (ARPU), based on service revenue, was
approximately $33.26 for the fourth quarter.
- - Overall non-selling cash costs per user per month (CCU) for Leap's
consolidated business was approximately $21.43 for the fourth quarter.
- - Cost per gross customer addition (CPGA) was approximately $277 for the
fourth quarter.
- - Churn was approximately 3.96% for the fourth quarter.
"The financial and operational results of the fourth quarter reflect our
continued focus on executing our business plan and improving operational
efficiencies," said Susan G. Swenson, Leap's president and chief operating
officer. "We continue to concentrate on initiatives that have resulted in
positive impacts on retention, net customer growth and EBITDA and the results we
are reporting today represent the first measure of their success. During 2003,
we will continue providing our customers with high quality, innovative service
offerings that meet their communications needs."
Key consolidated financial performance measures were as follows:
- Total revenues for the fourth quarter of 2002 were $172.0 million, an
increase of $68.1 million over the comparable period in the prior year.
Total revenues for fiscal year 2002 were $618.5 million, an increase of
$363.3 million over the total revenues of $255.2 million reported for
fiscal year 2001.
Leap Reports Financial Results for Fourth Quarter and Page 3 of 11
Fiscal Year 2002
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- - EBITDA loss for the fourth quarter of 2002 was $15.0 million, which
included a $16.3 million impairment charge for certain assets that the
Company is not currently using and does not expect to use in the future.
Adjusted EBITDA for the fourth quarter of 2002 was $1.3 million, an
improvement of $120.2 million over the adjusted EBITDA loss reported for
the comparable period in the prior year. Adjusted EBITDA loss for fiscal
year 2002 was $123.3 million, an improvement of $185.7 million from the
adjusted EBITDA loss of $309.0 million reported for fiscal year 2001.
Adjusted EBITDA reflects adjustments to remove the effect non-recurring
gains or charges (such as gains on the sale of wireless license(s) and
non-cash impairment charges) to this measure of financial performance. A
reconciliation of EBITDA and adjusted EBITDA to consolidated operating loss
can be found in the section entitled "Definition of Terms and
Reconciliation of Non-GAAP Financial Measures" included at the end of this
release.
- - EBITDA for Cricket operations during the fourth quarter of 2002 was $8.6
million, an improvement of $114.6 million over the Cricket EBITDA loss for
the comparable period in the prior year. EBITDA loss for Cricket operations
for fiscal year 2002 was $90.7 million, an improvement of $175.3 million
from Cricket's EBITDA loss of $266.0 million reported for fiscal year 2001.
A reconciliation of Cricket EBITDA to consolidated operating loss can be
found in the section entitled "Definition of Terms and Reconciliation of
Non-GAAP Financial Measures" included at the end of this release.
- - Net loss during the fourth quarter of 2002 was $166.6 million, or a loss of
$2.84 per share, which compares to a net loss of $79.6 million, or a loss
of $2.17 per share, for the comparable period in the prior year. Net loss
during the fourth quarter of 2001 was positively impacted by a $136.3
million gain on sale of wireless licenses. Net loss for fiscal year 2002
was $664.8 million, or a loss of $14.91 per share, an increase of $181.5
million from the net loss of $483.3 million, or a loss of $14.27 per share,
reported for fiscal year 2001. Net loss for fiscal 2002 includes a $39.5
million gain on sale of an unconsolidated wireless operating company and an
approximately $364,000 gain on sale of wireless licenses, offset by a $26.9
million impairment charge equal to the remaining goodwill balance resulting
from Leap's June 2000 acquisition of the remaining interest in Cricket
Communications Holdings, Inc. that it did not already own and a $16.3
million impairment charge for assets that the Company is not currently
using and does not expect to use in the future. Net loss during the fourth
quarter of 2001 was positively impacted by a $143.6 million gain on sale of
wireless licenses.
Leap Reports Financial Results for Fourth Quarter and Page 4 of 11
Fiscal Year 2002
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- - Total cash and equivalents and unrestricted investments as of December 31,
2002 were $181.1 million, of which $86.5 million was held at Leap Wireless
International, Inc. and its subsidiaries whose assets are not used in the
Cricket business, and $94.6 million was held at Cricket Communications,
Inc. and the subsidiaries of Leap that hold assets that are used in the
Cricket business or hold assets pledged under Cricket's secured vendor
credit facilities. Cricket currently has more than $100 million in cash and
short term investments.
- - Leap Wireless International, Inc. conducts operations through its
subsidiaries and has no independent operations or sources of operating
revenue other than through dividends, if any, from its operating
subsidiaries.
As previously announced, Leap, Cricket and substantially all of their
subsidiaries, filed voluntary petitions for reorganization under Chapter 11 of
the Bankruptcy Code on April 13 in the U.S. Bankruptcy Court for the Southern
District of California, in San Diego, Calif. Over the past month, Leap and
Cricket have been engaged in active and constructive negotiations with their
major creditor groups and believe that they are close to reaching an agreement
on a plan to restructure their outstanding indebtedness, as indicated by the
support of informal committees of creditors for all the first day motions which
were granted by the Court on April 14.
CONFERENCE CALL NOTE
The Company will not host a conference call in conjunction with its earnings
release for the fourth quarter of 2002.
ABOUT LEAP
Leap, headquartered in San Diego, Calif., is a customer-focused company
providing innovative communications services for the mass market. Leap pioneered
the Cricket Comfortable Wireless(R) service that lets customers make all of
their local calls from within their local calling area and receive calls from
anywhere for one low, flat rate. For more information, please visit
www.leapwireless.com.
ABOUT CRICKET SERVICE
With Cricket(R) service, customers can make unlimited calls over their service
area for a low, flat rate. Cricket customers can call long distance anywhere for
a little more - just 8 cents per minute to anywhere in the United States and
just 18 cents per minute anytime to anywhere in Mexico or
Leap Reports Financial Results for Fourth Quarter and Page 5 of 11
Fiscal Year 2002
[LEAP LOGO]
Canada. The service offers text messaging, voicemail, caller ID, three-way
calling and call waiting for a small additional monthly fee. The extra value
Cricket(R) Talk rate plan is $39.99 per month plus tax, which includes unlimited
local calls, 500 free minutes of U.S. long distance and a three-feature package
(including caller ID, call waiting and three-way calling). Cricket service is an
affordable wireless alternative to traditional landline service, and appeals to
people completely new to wireless - from students to young families and local
business people. For more information, please visit
www.cricketcommunications.com.
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 cause a Chapter 11 plan of reorganization to be finalized
and be confirmed by the Bankruptcy Court, and our ability to successfully
implement the plan;
- - our ability to continue as a going concern;
- - our ability to obtain Bankruptcy Court approval with respect to motions
prosecuted by us in our Chapter 11 cases from time to time;
- - risks associated with third parties seeking and obtaining Bankruptcy Court
approval to terminate or shorten the exclusivity period for Leap, Cricket
and substantially all of their subsidiaries to propose and confirm one or
more plans of reorganization, for the appointment of a Chapter 11 trustee
or to convert the Chapter 11 cases of Leap, Cricket and substantially all
of their subsidiaries to Chapter 7 cases;
- - our ability to obtain and maintain normal terms with vendors and service
providers;
- - our ability to maintain contracts that are critical to our operations;
- - the potential adverse impacts of the Chapter 11 cases on the liquidity or
results of operations of Leap and Cricket;
- - our ability to attract, motivate and/or retain key executives and other
employees;
- - our ability to attract and retain customers;
- - the unsettled nature of the wireless market, the current economic slowdown,
service offerings of increasingly large bundles of minutes of use at
increasingly low prices by some major carriers, other issues facing the
telecommunications industry in general, and our announcement of
restructuring discussions, and our subsequent Chapter 11 filing, which have
created a level of uncertainty that adversely affects our ability to
predict future customer growth, as well as other key operating metrics;
- - changes in economic conditions that could adversely affect the market for
wireless services;
- - the acceptance of our product offering by our prospective customers;
- - the effects of actions beyond our control in our distribution network;
- - rulings by courts or the Federal Communications Commission (FCC) adversely
affecting our rights to own and/or operate certain wireless licenses, or
changes in our ownership that could adversely affect our status as an
"entrepreneur" under FCC rules and regulations;
- - our ability to maintain our cost, market penetration and pricing structure
in the face of competition;
- - failure of network systems to perform according to expectations;
- - the effects of competition;
- - global political unrest, including the threat or occurrence of war or acts
of terrorism; and
- - other factors detailed in the section entitled "Risk Factors" included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2002
and in our other SEC filings.
The forward-looking statements should be considered in the context of these risk
factors. Investors and prospective investors are cautioned not to place undue
reliance on such forward-looking statements. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. Leap and the Leap logo design are
trademarks of Leap Wireless International, Inc. Cricket and Comfortable Wireless
are registered trademarks of Cricket Communications, Inc.
Leap Reports Financial Results for Fourth Quarter and Page 6 of 11
Fiscal Year 2002
[LEAP LOGO]
LEAP WIRELESS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
DECEMBER 31,
-----------------------------
2002 2001
------------ ------------
ASSETS
Cash and cash equivalents................................................... $ 100,860 $ 242,979
Short-term investments...................................................... 80,205 81,105
Restricted cash equivalents and short-term investments...................... 25,922 27,628
Inventories................................................................. 30,403 45,338
Other current assets........................................................ 28,504 22,044
------------ ------------
Total current assets.................................................... 265,894 419,094
Property and equipment, net(6).............................................. 1,106,856 1,112,284
Wireless licenses, net(4)................................................... 729,200 718,222
Goodwill, net(1)............................................................ -- 26,919
Other intangible assets, net(6)............................................. -- 16,694
Restricted investments...................................................... -- 13,127
Deposits for wireless licenses.............................................. -- 85,000
Other assets................................................................ 61,752 59,555
------------ ------------
Total assets............................................................ $ 2,163,702 $ 2,450,895
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) (2)
Accounts payable and accrued liabilities.................................... $ 85,358 $ 147,695
Amounts payable to equipment vendors(3)..................................... 55,077 --
Debt in default and current portion of long-term debt(3).................... 2,209,984 26,049
Other current liabilities................................................... 59,895 55,843
------------ ------------
Total current liabilities............................................... 2,410,314 229,587
Long-term debt(3)........................................................... -- 1,676,845
Other long-term liabilities................................................. 50,174 186,023
------------ ------------
Total liabilities....................................................... 2,460,488 2,092,455
------------ ------------
Stockholders' equity (deficit):
Preferred stock........................................................... -- --
Common stock.............................................................. 6 4
Additional paid-in capital................................................ 1,156,379 1,148,337
Unearned stock-based compensation......................................... (986) (5,138)
Accumulated deficit....................................................... (1,450,994) (786,195)
Accumulated other comprehensive income (loss)............................. (1,191) 1,432
------------ ------------
Total stockholders' equity (deficit).................................... (296,786) 358,440
------------ ------------
Total liabilities and stockholders' equity (deficit).................... $ 2,163,702 $ 2,450,895
============ ============
Leap Reports Financial Results for Fourth Quarter and Page 7 of 11
Fiscal Year 2002
[LEAP LOGO]
LEAP WIRELESS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- -----------------------------
2002 2001 2002 2001
--------- --------- ----------- ----------
(UNAUDITED)
Revenues:
Service revenues ............................... $ 151,723 $ 93,468 $ 567,694 $ 215,917
Equipment revenues ............................. 20,256 10,404 50,781 39,247
--------- -------- ---------- ---------
Total revenues ............................ 171,979 103,872 618,475 255,164
--------- -------- ---------- ---------
Operating expenses:
Cost of service (exclusive of items shown
separately below) ............................ (44,467) (37,507) (181,404) (94,510)
Cost of equipment .............................. (49,567) (85,723) (252,344) (202,355)
Selling and marketing .......................... (26,456) (44,240) (122,092) (115,222)
General and administrative ..................... (50,216) (55,360) (185,915) (152,051)
Depreciation and amortization(4) ............... (86,737) (50,385) (287,942) (119,177)
Impairment of long-lived assets(6) ............. (16,323) -- (16,323) --
Impairment of goodwill(1) ...................... -- -- (26,919) --
--------- -------- ---------- ---------
Total operating expenses .................. (273,766) (273,215) (1,072,939) (683,315)
Gains on sale of wireless licenses .............. -- 136,258 364 143,633
--------- -------- ---------- ---------
Operating loss ............................... (101,787) (33,085) (454,100) (284,518)
Equity in net loss of investments in and loans
receivable from unconsolidated wireless
operating companies .... ...................... -- 3,562 -- (54,000)
Gain on sale of unconsolidated wireless operating
company(5) ................................. -- -- 39,518 --
Interest income ................................. 1,629 2,801 6,345 26,424
Interest expense ................................ (61,212) (54,358) (229,740) (178,067)
Other income (loss), net ........................ (3,014) (281) (3,001) 7,186
--------- -------- ---------- ---------
Loss before income taxes ........................ (164,384) (81,361) (640,978) (482,975)
Income taxes(4) ................................. (2,192) 1,721 (23,821) (322)
--------- -------- ---------- ---------
Net loss ................................ $(166,576) $(79,640) $ (664,799) $(483,297)
========= ======== ========== =========
Basic and diluted net loss per common share: $ (2.84) $ (2.17) $ (14.91) $ (14.27)
========= ======== ========== =========
Shares used in per share calculations:
Basic and diluted .... ........................ 58,751 36,683 44,591 33,861
========= ======== ========== =========
Leap Reports Financial Results for Fourth Quarter and Page 8 of 11
Fiscal Year 2002
[LEAP LOGO]
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Because of Cricket's existing defaults under the senior secured vendor
credit facilities and the fact that Cricket has been unable to raise
new funds which would enable it to repay such amounts, the substantial
risk that the stock of the Cricket companies has no value to Leap, and
the substantial risk that Leap's existing stockholders will lose all of
their value in Leap common stock in connection with any reorganization,
the Company recorded an estimated impairment charge during the year
ended December 31, 2002 equal to its remaining goodwill balance of
$26.9 million. The goodwill resulted from Leap's June 2000 acquisition
of the remaining interest in Cricket Communications Holdings that it
did not already own.
(2) Substantially all of the Company's liabilities are currently subject to
compromise as a result of the Company's filing for protection under
Chapter 11 of the Bankruptcy Code.
(3) As a result of Cricket's default on its senior secured vendor credit
facilities, the Company has classified the principal and accrued
interest balances outstanding under those facilities and amounts
payable to its vendors for the purchase of equipment and services as
short-term obligations in the consolidated balance sheet as of December
31, 2002. In addition, the Company has classified the principal and
interest balances outstanding under its senior and senior discount
notes, U.S. government financing and other financing arrangements as
short-term obligations in the consolidated balance sheet as of December
31, 2002 as a result of its Chapter 11 filing in April 2003, which
constituted an event of default of the underlying agreements.
Unamortized debt discounts and debt issuance costs of $187.1 million at
December 31, 2002 may be subject to accelerated amortization or
immediate expense if the Chapter 11 proceedings result in a significant
modification of the amounts payable under any of these credit
facilities.
(4) Leap adopted Statement of Financial Accounting Standard No. 142,
"Goodwill and Other Intangible Assets" on January 1, 2002. Accordingly,
amortization of goodwill and wireless licenses ceased as of that date
because they are indefinite-lived intangible assets. Furthermore, Leap
recorded a non-cash charge of $15.9 million to income tax expense for
the three months ended March 31, 2002 to increase the valuation
allowance related to Leap's net operating losses in connection with the
adoption of SFAS No. 142. The Company's wireless licenses will be
subject to periodic impairment tests.
(5) In September 2002, Leap completed the sale of its 20.1% interest in
Pegaso Telecomunicaciones to Telefonica Moviles S.A. and recognized a
gain of $39.5 million.
(6) During the three months ended December 31, 2002, the Company recorded
an impairment charge of $16.3 million for certain of its property and
equipment and intangible assets, which assets are not currently being
used in the business and are not expected to be used in the future.
Leap Reports Financial Results for Fourth Quarter and Page 9 of 11
Fiscal Year 2002
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LEAP WIRELESS INTERNATIONAL, INC.
SUPPLEMENTARY DISCLOSURES
OPERATIONAL METRICS
(UNAUDITED)
AS OF AND FOR THE THREE MONTHS ENDED
----------------------------------------------------------------------
DECEMBER SEPTEMBER JUNE MARCH DECEMBER
31, 30, 30, 31, 31,
2002 2002 2002 2002 2001
---------- ---------- ---------- ---------- ----------
Gross additions ............................ 193,899 246,197 258,146 391,417 473,372
Deactivations .............................. 178,512 201,052 194,383 122,698 78,724
Net additions .............................. 15,387 45,145 63,763 268,719 394,648
End of period customers .................... 1,512,120 1,496,733 1,451,588 1,387,825 1,119,106
Weighted average customers ................. 1,504,315 1,475,457 1,414,259 1,260,679 898,876
Cost per gross addition .................... $ 277 $ 312 $ 316 $ 246 $ 246
Consolidated cash costs per user per month.. $ 21.43 $ 21.10 $ 22.30 $ 25.80 $ 35.40
Cell sites in service ...................... 2,446 2,424 2,366 2,323 2,186
Leap Reports Financial Results for Fourth Quarter and Page 10 of 11
Fiscal Year 2002
[LEAP LOGO]
DEFINITION OF TERMS AND RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
In this press release, the Company has provided certain financial measures that
are calculated based on industry conventions, including EBITDA and adjusted
EBITDA, which are measures of liquidity and performance commonly used in the
telecommunications industry. These financial measures are not calculated based
on accounting principles generally accepted in the United States of America
(GAAP). Certain of these financial measures, including EBITDA and adjusted
EBITDA, are considered "non-GAAP" financial measures within the meaning of SEC
Regulation G. The non-GAAP financial measures and other operating measures used
in this release include the following:
(1) Earning before interest, taxes, depreciation and amortization (EBITDA):
EBITDA represents operating income (loss) before net interest expense,
income tax expense, and depreciation and amortization. EBITDA is a
non-GAAP financial measure and may not be similar to EBITDA measures of
other companies. EBITDA is commonly used in our industry to measure
core operating performance and the ability of a company's operations to
contribute to its liquidity. EBITDA should not be considered in
isolation or as a substitute for operating income (loss) or as a better
indicator of liquidity than cash flow from operating activities or any
other measure for determining operating performance or liquidity that
is calculated in accordance with GAAP. Adjusted EBITDA reflects
adjustments to remove the effect non-recurring gains or charges to this
measure of financial performance.
The following table reconciles Leap EBITDA, Leap adjusted EBITDA and
EBITDA for Cricket operations reported in this press release to the
Company's consolidated operating loss (unaudited)(in thousands):
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- ---------------------------
2002 2001 2002 2001
--------------------------- ---------------------------
Leap consolidated operating loss ... $(101,787) $ (33,085) $(454,100) $(284,518)
Depreciation and amortization ..... 86,737 50,385 287,942 119,177
--------- --------- --------- ---------
Leap consolidated EBITDA ........... (15,050) 17,300 (166,158) (165,341)
Gains on sale of wireless
licenses .......................... -- (136,258) (364) (143,633)
Long-lived asset impairment
charge ............................ 16,323 -- 16,323 --
Goodwill impairment charge ........ -- -- 26,919 --
--------- --------- --------- ---------
Leap adjusted consolidated
EBITDA .......................... 1,273 (118,958) (123,280) (308,974)
Leap corporate expenses ......... 7,312 12,965 32,583 42,984
--------- --------- --------- ---------
EBITDA for Cricket operations .... $ 8,585 $(105,993) $ (90,697) $(265,990)
========= ========= ========= =========
(2) Average revenue per user per month (ARPU): ARPU is an industry term
that measures service revenue divided by the weighted average number of
customers, divided by the number of months during the period being
measured. ARPU is not a non-GAAP financial measure within the meaning
of SEC Regulation G, but the Company's calculation of ARPU may not be
similar to ARPU measurements calculated by other companies.
Leap Reports Financial Results for Fourth Quarter and Page 11 of 11
Fiscal Year 2002
[LEAP LOGO]
(3) Cost per gross customer addition (CPGA): CPGA is an industry term that
measures the cost of acquiring a new customer. CPGA represents selling
and marketing costs and the loss on sale of handsets (generally defined
as cost of equipment less equipment revenue), excluding the loss on
sale of handsets to existing customers, divided by the total number of
gross new customer additions during the period being measured. CPGA is
a non-GAAP financial measure and may not be similar to CPGA
measurements as calculated by other companies.
The following table reconciles selling and marketing to total costs
used in the calculation of CPGA (unaudited)(in thousands except gross
additions and CGPA):
THREE MONTHS ENDED
-----------------------------------------------------------
DECEMBER SEPTEMBER JUNE MARCH DECEMBER
31, 2002 30, 2002 30, 2002 31, 2002 31, 2001
-------- -------- -------- -------- ---------
Selling and marketing ............... $ 26,456 $ 32,719 $ 32,758 $ 30,159 $ 44,240
Cost of equipment .................. 49,567 58,603 60,163 84,011 85,723
Equipment revenues ................. (20,256) (11,612) (6,752) (12,161) (10,404)
Loss on sale of equipment to
existing customers ............... (2,008) (2,871) (4,387) (5,652) (2,665)
Selling and marketing not associated
with new customers ................ -- (19) (89) (101) (390)
-------- -------- -------- -------- ---------
Total costs used in calculation of
CPGA ............................. $ 53,759 $ 76,820 $ 81,693 $ 96,256 $ 116,504
======== ======== ======== ======== =========
Gross additions ..................... 193,899 246,197 258,146 391,417 473,372
CPGA ................................ $ 277 $ 312 $ 316 $ 246 $ 246
======== ======== ======== ======== =========
CPGA calculated based on unadjusted selling and marketing, cost of
equipment and equipment revenues would have been $288, $324, $334, $261
and $253 for the three months ended December 31, September 30, June 30
and March 31, 2002 and December 31, 2001, respectively.
(4) Cash costs per user per month (CCU): CCU represents cost of service,
general and administrative costs, and the loss on sale of handsets to
existing customers, divided by the weighted average number of
customers, divided by the number of months during the period being
measured. CCU is a non-GAAP financial measure and may not be similar to
CCU measurements as calculated by other companies.
The loss on sale of handsets to existing customers included in the
calculation of CCU was $2.0 million, $2.9 million, $4.4 million, $5.7
million and $2.7 million for the three months ended December 31,
September 30, June 30 and March 31, 2002 and December 31, 2001,
respectively. CCU calculated based on unadjusted cost of service and
general and administrative costs would have been $20.98, $20.45,
$21.27, $24.30 and $34.03 for the three months ended December 31,
September 30, June 30 and March 31, 2002 and December 31, 2001,
respectively.
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