EXHIBIT 99.1
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED*
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
I. CASH RECEIPTS AND DISBURSEMENTS
A. (GENERAL ACCOUNT)
** This report reflects activity for all bank accounts of Leap Wireless
International, Inc. - Combined. - see Exhibit B.
BEGINNING BALANCE as of April 1, 2003: $ 99,443,990
-------------
1. TOTAL RECEIPTS PER ALL PRIOR GENERAL ACCOUNT REPORTS $ 225,800
-------------
2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR GENERAL pre-petition $ 724,298
ACCOUNT REPORTS post-petition $ 150,757
-------------
$ 875,056
3. BEGINNING BALANCE: $ 98,794,734
-------------
4. RECEIPTS DURING CURRENT PERIOD:
ACCOUNTS RECEIVABLE - PRE-FILING $ -
-------------
ACCOUNTS RECEIVABLE - POST-FILING $ -
-------------
GENERAL SALES $ -
-------------
INVESTMENT $ 90,561
-------------
INTEREST $ 1,056
-------------
Intercompany Payments - from Cricket Communications, Inc. $ 668,371
-------------
OTHER** (SPECIFY
-------------
TOTAL RECEIPTS THIS PERIOD: $ 759,989
-------------
5. BALANCE: $ 99,554,723
-------------
6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD $ 14,254,721
(Total from Page 2) -------------
7. ENDING BALANCE **: $ 85,300,002
-------------
8. GENERAL ACCOUNT NUMBER_________________________
DEPOSITORY NAME AND LOCATION
__________________________________________________
*THIS OPERATING REPORT INCLUDES INFORMATION RELATING TO THE FOLLOWING
DEBTORS:
Leap Wireless International, Inc.
Backwire.com, Inc.
Telephone Entertainment Network, Inc.
Cricket Licensee III, Inc.
Cricket Licensee V, Inc.
Cricket Licensee VI, Inc.
Cricket Licensee VII, Inc.
Cricket Licensee VIII, Inc.
Cricket Licensee IX, Inc.
Cricket Licensee X, Inc.
Cricket Licensee XI, Inc.
Cricket Licensee XII, Inc.
MCG PCS Licensee Corporation, Inc.
Leap PCS Mexico, Inc.
** THIS BALANCE INCLUDES CASH AND CASH EQUIVALENTS, SHORT TERM
INVESTMENTS AND RESTRICTRED CASH. DIFFERENCES FROM THE BALANCE SHEET
ARE DUE TO TIMING ISSUES (I.E. OUTSTANDING CHECKS VS CLEARED CHECKS,
DEPOSITS IN TRANSIT, ETC.).
Leap Wireless International, Inc. - Combined
Exhibit B
THIS OPERATING REPORT INCLUDES INFORMATION RELATING TO THE FOLLOWING
BANK ACCOUNTS:*
Bank Account Account #
- ------------------------- ---------
Wells Fargo 4758372452
Credit Suisse Asset Mgmt. 247005507
US Bank 124125099
* Includes petty cash.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED*
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
I. CASH RECEIPTS AND DISBURSEMENTS
A. (GENERAL ACCOUNT)
TOTAL DISBURSEMENTS FROM GENERAL ACCOUNT FOR CURRENT PERIOD
Payment Date Payment Number Vendor Name Payment Activity
06/12/03 28860 GLENBOROUGH FUND V 11,386.31
06/12/03 28874 GLENBOROUGH FUND V 18,977.19
06/10/03 28875 PITNEY BOWES INC. 158.16
06/05/03 28876 SBC CA-PACIFIC BELL 47.10
06/13/03 28877 TARGOFF, MICHAEL B 4,360.78
06/04/03 28878 BOWNE OF LOS ANGELE 671.00
06/11/03 28880 WESTCORE SPIDG, LLC 113,130.18
06/16/03 28881 BOWNE OF LOS ANGELES INC 34,482.50
06/30/03 28885 CORT FURNITURE RENTAL 5,347.92
05/07/03 State Street Escrow interest 14,062,500.00 *
Other Payments/ Bank Charges
06/30/03 Service Charge Leap 27.50
06/20/03 Client Service Charge 3,631.89
-------------
Total 14,254,720.53
=============
* May, 2003 disbursement; not reported previously.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
I. CASH RECEIPTS AND DISBURSEMENTS
D. SUMMARY SCHEDULE OF CASH**
Ending Balance Wells Fargo $ 3,374,199
Credit Swiss Asset Management $ 81,606,655
-------------
Subtotal Cash in Bank $ 84,980,854
Checks Outstanding $ (28,354)
-------------
Available Cash $ 84,952,500
Restricted Cash* $ 199,327
-------------
Total Cash*** $ 85,151,826
* Pledged to provide for the payment of scheduled interest payments on long-term
notes payable.
** See Exhibit B for bank account detail.
*** Differences from other cash balances reported within are related to timing
issues (I.e. outstanding checks vs cleared checks, deposits in transit, etc.).
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
II. STATUS OF PAYMENTS TO SECURED CREDITORS, LESSORS, AND OTHER PARTIES TO
EXECUTORY CONTRACTS
The reporting Debtors are generally current on payments for obligations arising
post-petition to creditors, lessors and other parties to executory contracts.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
III. TAX LIABILITIES
For the Reporting Period: June, 2003
Gross Service Sales Subject to Sales Tax: n/a
(for the reporting period - May-03) ----------
Total Wages Paid: n/a
----------
Amounts Owing
(Post Petition) Delinquent Balance
--------------- ------------------
Sales & Use: $ - $ -
Other Taxes: $ - $ -
* Property Taxes: $ 18,631 $ 25,955
--------------- ------------------
Total: $ 18,631 $ 25,955
=============== ==================
* $25,955 relates to property taxes with a lien date of Jan 1, 2003.
Post-petition amount owing is pro-rated annually based on the Ch. 11 filing
date.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
IV. AGING OF ACCOUNTS PAYABLE AND ACCOUNTS RECEIVABLE
ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE
(POST-PETITION ONLY) Pre-Petition Post-Petition
-------------------- ----------------------------
30 days or less $ 1,286,433.00 $ - $ -
---------------------------------------------------
31 - 61 days 2,622.48
---------------------------------------------------
61 - 90 days -
---------------------------------------------------
91 - 120 days -
---------------------------------------------------
Over 120 days -
---------------------------------------------------
TOTALS: $ 1,289,055.48 $ - $ -
---------------------------------------------------
*Accounts Payable includes accounts due to be paid and Accrued Liabilities.
Accrued Liabilities are presumed, for the purposes of this report, to be due in
30 days or less.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
VI. U.S. TRUSTEE QUARTERLY FEES (TOTAL PAYMENTS)
No fees paid to date.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
V. INSURANCE COVERAGE**
Name of Amount of Policy Premium Paid
Description Carrier Coverage Expiration Date Through
- --------------------------------------------- ------------------------------------- ---------- --------------- ------------
Package (including Property, American Manufacturers Mutual Ins Co 9/23/2003 9/23/2003
Builders Risk, Gen Liab, Crime, and Hired and (Kemper)
& Non-owned Auto)
Property/Builders 20,000,000
Commercial General 2,000,000
Business Automobile 1,000,000
Crime 500,000
International Lumbermens Mutual Casualty Co (Kemper 1,000,000 9/23/2003 9/23/2003
Umbrella Lumbermens Mutual Casualty Co (Kemper 30,000,000 9/23/2003 9/23/2003
Workers' Comp American Protection Ins Co (Kemper) 9/23/2003 9/23/2003
Each Accident 1,000,000
Each Employee 1,000,000
Fiduciary Liab National Union (AIG) 1,000,000 11/15/2003 11/15/2003
Special Risk National Union (AIG) 5,000,000 9/23/2003 9/23/2003
Storage Tank Liab Commerce and Industry Ins 5,000,000 2/1/2004 2/1/2004
Auto Liability Traveler's Indemnity Co. 1,000,000 5/1/2004 pending
Directors and Officers Liability Insurance First Union (AIG) 10,000,000 9/23/2003 9/23/2003
Chubb 10,000,000 9/23/2003 9/23/2003
Benefits Insurance
Basic Life & AD&D Met Life Monthly Monthly
Supp AD&D
Supp Life Premium
Dependent & Group Dep Life
Spousal Life
Dental
Benefit Administrative Service Benelogic Monthly Monthly
Employee Assistance Program Premium Integrated Insights Monthly Monthly
Flexible Spending Account Admin Fee Barney & Barney Monthly Monthly
Medical CIGNA Monthly Monthly
Long Term Disability Prudential Monthly Monthly
New York State Disability
Short Term Disability
Vision VSP Monthly Monthly
Individual Life Ins Empire General Monthly Monthly
Individual Life Ins Mony Life Insurance Monthly Monthly
Individual Life Ins Transamerica Monthly Monthly
Supp Exec Medical Exec-U-Care Monthly Monthly
** Insurance coverage applies to Leap and each of its subsidiaries.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
BALANCE SHEET
LEAP WIRELESS FINANCIALS
PERIOD: JUN-03 CURRENCY USD
[LEAP LOGO]
LEAP COMBINED LEAP COMBINED
LEAP COMBINED POST-PETITION* TOTAL
----------------- -------------- -----------------
ASSETS
CASH AND CASH EQUIVALENTS 52,258,805.93 0.00 52,258,805.93
SHORT-TERM INVESTMENTS 32,680,673.05 0.00 32,680,673.05
RESTRICTED CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 199,326.72 0.00 199,326.72
INVENTORIES 0.00 0.00 0.00
OTHER CURRENT ASSETS 28,356,624.71 0.00 28,356,624.71
---------------- ------------ ----------------
TOTAL CURRENT ASSETS 113,495,430.41 0.00 113,495,430.41
PROPERTY AND EQUIPMENT, NET 3,847,659.75 0.00 3,847,659.75
WIRELESS LICENSES, NET 5,514,060.12 0.00 5,514,060.12
GOODWILL, NET 0.00 0.00 0.00
OTHER INTANGIBLE ASSETS, NET 0.00 0.00 0.00
RESTRICTED INVESTMENTS 0.00 0.00 0.00
OTHER ASSETS 50,657,604.57 0.00 50,657,604.57
---------------- ------------ ----------------
TOTAL ASSETS 173,514,754.85 0.00 173,514,754.85
================ ============ ================
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 6,007,116.66 1,289,055.48 7,296,172.14
CURRENT PORTION OF LONG-TERM DEBT 615,769,858.21 0.00 615,769,858.21
OTHER CURRENT LIABILITIES 1,756,507.91 0.00 1,756,507.91
---------------- ------------ ----------------
TOTAL CURRENT LIABILITIES 623,533,482.78 1,289,055.48 624,822,538.26
LONG-TERM DEBT 0.00 0.00 0.00
OTHER LONG-TERM LIABILITIES 49,697,152.80 0.00 49,697,152.80
---------------- ------------ ----------------
TOTAL LIABILITIES 673,230,635.58 1,289,055.48 674,519,691.06
---------------- ------------ ----------------
STOCKHOLDER'S EQUITY (DEFICIT):
PREFERRED STOCK
COMMON STOCK 6,269.60 0.00 6,269.60
ADDITIONAL PAID-IN CAPITAL 1,155,732,709.57 0.00 1,155,732,709.57
UNEARNED STOCK-BASED COMPENSATION (224,889.19) 0.00 (224,889.19)
ACCUMULATED DEFICIT (1,655,416,282.15) 0.00 (1,655,416,282.15)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (1,105,675.81) 0.00 (1,105,675.81)
---------------- ------------ ----------------
TOTAL STOCKHOLDER'S EQUITY (DEFICIT) (501,007,867.98) 0.00 (501,007,867.98)
---------------- ------------ ----------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) 172,222,767.60 1,289,055.48 173,511,823.08
================ ============ ================
*Presents post-petition accounts payable and accounts receivable only.
Note 1: Due to timing issues and GAAP based accounting, the balance sheet is
slightly different than the cash receipts/disbursement disclosures. Differences
are primarily due to timing differences associated with outstanding checks,
deposits in transit, etc. which are not included in the cash analysis.
LEAP - COMBINED INCOME STATEMENT
LEAP WIRELESS FINANCIALS
PERIOD: JUN-03 CURRENCY USD
[LEAP LOGO]
LIFE TO DATE
JUNE, 2003 BEGINNING APRIL, 2003
ACTUAL ACTUAL
-------------- ---------------------
REVENUES
SERVICE REVENUES 0.00 0.00
EQUIPMENT REVENUES 0.00 0.00
OTHER REVENUES 0.00 0.00
-------------- --------------
TOTAL REVENUES 0.00 0.00
OPERATING EXPENSES
COST OF SERVICE 0.00 0.00
COST OF EQUIPMENT 0.00 0.00
COST OF OTHER REVENUES 0.00 0.00
-------------- --------------
TOTAL OPERATING EXPENSES 0.00 0.00
-------------- --------------
GROSS PROFIT
SERVICE 0.00 0.00
EQUIPMENT 0.00 0.00
OTHER 0.00 0.00
-------------- --------------
TOTAL GROSS PROFIT 0.00 0.00
CUSTOMER CARE 0.00 0.00
GENERAL AND ADMINISTRATIVE (246,039.55) * 1,538,834.73
SALES AND MARKETING 0.00 0.00
FIXED ASSET WRITE-OFFS 0.00 0.00
EBITDA 246,039.55 (1,538,834.73)
DEPRECIATION AND AMORTIZATION 279,470.34 576,386.95
DEBT ACCRETION 0.00 0.00
-------------- --------------
TOTAL OPERATING EXPENSE 33,430.79 2,115,221.68
-------------- --------------
OPERATING LOSS (33,430.79) (2,115,221.68)
EQUITY IN NET INCOME (LOSS) (25,571,375.71) (61,529,155.35)
INTEREST INCOME 122,041.71 294,766.41
INTEREST EXPENSE (1,406,300.49) ** (5,285,768.37)
FOREIGN CURRENCY TRANSACTION GAINS (LOSSES), NET 0.00 0.00
GAIN (LOSS) ON SUBSIDIARIES 0.00 0.00
OTHER EXPENSES 76,585.05 44,010.30
OTHER EXPENSE - RESTRUCTURING (1,668,236.00) * (2,292,936.00)
-------------- --------------
INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS (28,480,716.23) (70,884,304.69)
INCOME TAXES 0.00 0.00
-------------- --------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS (28,480,716.23) (70,884,304.69)
EXTRAORDINARY ITEMS 0.00 0.00
NET INCOME (LOSS) (28,480,716.23) (70,884,304.69)
* During the month ended June 30, 2003 the Company recorded an adjustment to
reclassify $1.0 million from General and Administrative expense to Other Expense
- - Restructuring for costs incurred prior to the petition date that were directly
related to the restructuring.
** YTD reconciliation of pre-petition interest expense associated with 12.5%
senior notes.
LEAP WIRELESS INTERNATIONAL, INC. - COMBINED
OPERATING REPORT NO. 3
FOR THE MONTH ENDING: 6/30/2003
IX. QUESTIONNAIRE
1 Has the debtor-in-possession made any payments on its pre-petition
unsecured debt, except, as have been authorized by the court
No X
Yes ________
2 State what progress was made during the reporting period toward filing
a Plan of Reorganization: A PLAN OF REORGANIZATION WAS FILED ON APRIL
14, 2003 AND MODIFIED PER FILINGS DATED MAY 9, 2003, MAY 23, 2003, JULY
8, 2003 AND JULY 17, 2003.
3 Describe potential future developments which may have a significant
impact on the case. NONE.
4 Attach copies of all Orders granting relief from the automatic stay
that were entered during the reporting period. NONE.
5 Did you receive any exempt income this month, which is not set forth in
the operating report?
No X
Yes ________
I, S. Douglas Hutcheson (Name and title), declare under penalty and
perjury that I have fully read and understood the foregoing
debtor-in-possession non-business report and that the information
contained herein is true and complete to the best of my knowledge.
Date: July 21, 2003 /S/ S. Doug Hutcheson
----------------------------------
Principal for debtor-in-possession
LEAP-COMBINED INCOME STATEMENT FORECAST
The Debtors' management has developed the following forecast (the "Forecast") of
the results of operations for Leap Wireless International, Inc. and related
companies on a combined basis for the three months ending September 30, 2003
(the "Forecast Period").
The Debtors do not, as a matter of course, publish their business plans, budgets
or strategies or make external projections or forecasts of their anticipated
results of operations. Accordingly, the Debtors do not anticipate that they
will, and disclaim any obligation to, furnish updated business plans, budgets or
projections to stakeholders or to include such information in documents required
to be filed with the SEC or otherwise make such information publicly available
(except as otherwise required in connection with debtors bankruptcy filings)
The following Forecast was not prepared with a view toward compliance with
published guidelines of the SEC or the American Institute of Certified Public
Accountants regarding forecasts. The independent auditors of the Debtors have
not audited, reviewed, compiled or otherwise applied procedures to the Forecast
and consequently, do not express an opinion or any other form of assurance with
respect to the Forecast. The forecast data was not prepared on a basis
consistent with generally accepted accounting principles ("GAAP") as applied to
the Debtors' historical financial statements and should not be relied upon as
such.
The forecast provided herein has been prepared exclusively by the Debtors'
management. These projections, while presented with numerical specificity, are
necessarily based on a variety of estimates and assumptions which, though
considered reasonable by management, may not be realized, and are inherently
subject to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the Debtors' control. The Debtors
caution that no representations or warranties can be made as to their ability to
achieve the projected results. Some assumptions inevitably will not materialize.
Further, events and circumstances occurring subsequent to the date on which this
forecast was prepared may be different from those assumed or, alternatively, may
have been unanticipated, and thus the occurrence of these events may affect
financial results in a material and possibly adverse manner. The forecast,
therefore, may not be relied upon as a guaranty or other assurance of the actual
results that will occur.
The Forecast should be read in conjunction with the assumptions, qualifications
and expectations set forth in the "Business" section, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section and the
Consolidated Financial Statements (including the notes and schedules thereto) in
the 2002 Annual Report on Form 10-K/A of Leap Wireless International, Inc.,
filed with the SEC on April 16, 2003 and in Leap's Quarterly Report on Form 10-Q
for the period ending March 31 , 2003, filed with the SEC on May 15, 2003. Also
see the section entitled "Risk Factors" in Leap's Quarterly Report on Form 10-Q
for the period ending March 31, 2003.