Leap Reports First Quarter Results

                      Leap Reports First Quarter Results

-- Customer experience initiatives beginning to drive improved front door and
churn performance

-- Increased adjusted OIBDA margin reflects improving mix of customers on
higher-ARPU service plans

-- Company near free cash flow positive for the quarter

Note: A webcast of Leap's conference call and accompanying presentation slides
will be available at 5:00 p.m. EDT today at http://investor.leapwireless.com.

PR Newswire

SAN DIEGO, April 30, 2013

SAN DIEGO, April 30, 2013 /PRNewswire/ -- Leap Wireless International, Inc.
(NASDAQ: LEAP) today reported operational and financial results for the first
quarter ended March31, 2013. Total revenues for the first quarter of 2013
decreased 4.3 percent to $789.9 million and service revenues decreased 11.6
percent to $684.6 million. The Company reported $121.1 million of adjusted
operating income before depreciation and amortization (OIBDA) for the first
quarter of 2013, compared to $130.5 million for the prior year quarter. First
quarter 2013 operating loss was $29.4 million, compared to an operating loss
of $15.8 million for the first quarter of 2012.

(Logo: http://photos.prnewswire.com/prnh/20101220/MM20546LOGO-a)

The Company reported approximately 393,000 core wireless gross customer
additions for the first quarter of 2013 and approximately 9,000 core wireless
net customer losses. Core wireless churn for the first quarter of 2013 was 2.9
percent. "Core wireless" refers to the Company's traditional, monthly voice
service (Cricket Wireless) and excludes customers for Cricket Broadband and
Cricket PAYGo™.

The Company reported a total of approximately 474,000 gross customer additions
and a total of approximately 93,000 net customer losses for the first quarter
of 2013. Total churn for the first quarter of 2013 was 3.6 percent.

"The Company's results reflect the early improvements we expected from our
focus on enhancing the customer experience," said S. Douglas Hutcheson, Leap's
chief executive officer. "The year-over-year percentage decline in gross
customer additions, for both total customers and core wireless customers,
improved from the fourth quarter. While the transition we are making to
higher-quality smartphones and increased out-the-door device pricing is
contributing to lower gross additions in the near term, these initiatives and
other customer experience improvements we have introduced are leading to
expected improvements in core wireless churn levels. We are continuing to
introduce initiatives to drive front-door activity, including a new family
plan and add-a-line promotion. We are also seeing improved sales of our
iPhone^® offering, having worked with Apple on new advertising, pricing plans
and other promotions, and we look forward to continuing to collaborate with
them. Looking ahead to the rest of 2013, we expect to continue to improve our
device line-up with new handsets like the Samsung Galaxy S^® ^ 4 and to expand
the device financing options we offer."



Financial Results and Operating Metrics ^(1)
(Unaudited; in millions ^ (2), except for customer data, operating metrics and
per share amounts)
                                              Three Months Ended March 31,
                                              2013        2012        Change
Service revenues                              $ 684.6     $ 774.0     (11.6)%
Total revenues                                $ 789.9     $ 825.6     (4.3)%
Operating loss                                $ (29.4)    $ (15.8)    86.1%
Adjusted OIBDA                                $ 121.1     $ 130.5     (7.2)%
Adjusted OIBDA as a percentage of service     18%         17%         —
revenues
Net loss                                      $ (109.6)   $ (94.3)    16.2%
Net loss attributable to common stockholders  $ (111.3)   $ (98.4)    13.1%
Diluted loss per share attributable to        $ (1.43)    $ (1.28)    11.7%
common stockholders
Gross customer additions^(3)                  473,881     859,547     (44.9)%
Net customer additions (losses)               (93,037)    258,060     *
End of period customers                       5,203,747   6,192,073   (16.0)%
Weighted-average customers                    5,213,605   6,025,427   (13.5)%
Churn                                         3.6%        3.3%        —
End of period covered POPS                    ~96.2       ~95.7       —
Average revenue per user (ARPU)               $ 43.72     $ 42.59     2.7%
Cash cost per user (CCU)                      $ 26.36     $ 24.55     7.4%
Cost per gross addition (CPGA)                $ 317       $ 228       39.0%
Free cash flow                                $ (0.8)     $ (111.0)   (99.3)%
Cash purchases of property and equipment      $ 26.4      $ 146.3     (82.0)%
Unrestricted cash, cash equivalents and       $ 667.1     $ 636.7     4.8%
short-term investments
Core Wireless Metrics
Core wireless gross customer additions        392,984     631,912     (37.8)%
Core wireless net customer additions          (8,502)     163,613     *
(losses)
Core wireless end of period customers         4,636,867   5,172,093   (10.3)%
Core wireless churn                           2.9%        3.1%        —

* Percentage change not meaningful.
         For a reconciliation of non-GAAP financial measures, please refer to
         the section entitled "Definition of Terms and Reconciliation of
(1)      Non-GAAP Financial Measures" included at the end of this release.
         Information relating to population and potential customers (POPs) is
         based on population estimates provided by Claritas Inc. for the
         relevant year.
(2)      Minor calculation differences may exist in percentage changes due to
         rounding.
         The Company recognizes a gross customer addition for each Cricket
(3)      Wireless, Cricket Broadband and Cricket PAYGo line of service
         activated by a customer.



Discussion of Financial and Operational Results for the Quarter

Customer Activity

  oEnd-of-period customers for the first quarter of 2013 were 5,203,747, a
    16.0 percent decrease from end-of-period customers for the first quarter
    of 2012.
  oThe Company reported a net loss of 93,037 customers for the first quarter
    of 2013, compared to net additions of 258,060 customers for the first
    quarter of 2012.

       oNet customer losses reflect the discontinuation of sales of the
         Company's daily PAYGo product to new customers in October 2012, a
         narrowing of the Company's focus in national retail to fewer, more
         productive retailers and locations, and continued de-emphasis of the
         Company's broadband service.
       oCore wireless net customer losses of approximately 9,000 reflect
         lower gross customer additions.

  oTotal churn for the first quarter of 2013 was 3.6 percent, compared to 3.3
    percent for the first quarter of 2012, and reflect the discontinuation of
    sales of the Company's daily PAYGo product to new customers in October
    2012 and continued de-emphasis of the Company's broadband service.

       oCore wireless churn for the first quarter of 2013 was 2.9 percent,
         compared to 3.1 percentfor the comparable period of the prior year.

  o71 percent of the Company's new handset sales in the first quarter of 2013
    were for smartphones and approximately 12 percent of the Company's voice
    customer base upgraded their handsets during the quarter.

Revenues and ARPU

  oTotal revenues for the first quarter of 2013 were $789.9 million, a 4.3
    percent decrease over the comparable period of the prior year, primarily
    due to a lower average number of subscribers, partially offset by sales of
    higher-priced devices.
  oService revenues for the first quarter of 2013 were $684.6 million, a 11.6
    percent decrease over the comparable period of the prior year, primarily
    due to a lower average number of subscribers resulting from net customer
    losses.
  oARPU for the first quarter of 2013 was $43.72, an increase of $1.13 over
    the comparable period of the prior year. The year-over-year increase in
    ARPU primarily reflected a reduction in the number of customers for the
    Company's daily PAYGo product and better churn performance for our core
    wireless service.

Adjusted OIBDA, Operating Expense & Financial Metrics

  oAdjusted OIBDA for the first quarter of 2013 was $121.1 million, a
    decrease of 7.2 percent over the comparable period of the prior year. The
    year-over-year decrease was primarily driven by lower revenues due to net
    customer losses, partially offset by lower operating expenses, including
    lower device subsidy.
  oFirst quarter 2013 operating loss was $29.4 million, compared to an
    operating loss of $15.8 million for the comparable period of the prior
    year. The year-over-year increase in operating loss was primarily driven
    by lower revenues due to net customer losses.
  oCCU for the first quarter of 2013 increased 7.4 percent over the prior
    year quarter to $26.36, reflecting the year-over-year reduction in the
    weighted-average number of customers.
  oCPGA for the first quarter of 2013 increased by 39.0 percent over the
    prior year quarter to $317, reflecting lower gross customer additions,
    changes in dealer compensation and the sale of lower-cost, excess
    inventory in the first quarter of 2012.
  oNet loss attributable to common stockholders for the first quarter of 2013
    was $111.3 million, or ($1.43) per diluted share, compared to a net loss
    attributable to common stockholders of $98.4 million, or ($1.28) per
    diluted share, for the first quarter of 2012. The year-over-year increase
    in net loss attributable to common stockholders was primarily driven by
    lower revenues due to net customer losses.

Capital Expenditures and Free Cash Flow

  oCapital expenditures during the first quarter of 2013 were $26.4 million,
    compared to $146.3 million for the prior year quarter.
  oFree cash flow for the first quarter of 2013 was $(0.8) million, compared
    to $(111.0) million for the prior year quarter. The improvement to free
    cash flow was primarily driven by lower capital expenditures, partially
    offset by a decrease in cash from operations resulting from a lower
    average number of customers. Free cash flow for the quarter was also
    impacted by the timing of inventory purchases in connection with the
    transition of supply chain activities with a third-party logistics
    provider.

Updated Business Outlook

  oTotal capital expenditures for 2013 are expected to be between $250
    million and $300 million, including up to $100 million which may be spent
    to deploy next-generation LTE network technology.

       oThe Company is exploring cost-effective ways to deliver LTE services
         to additional customers, which may include deploying additional
         facilities-based coverage and entering into possible partnerships or
         joint ventures with others.
       oThe Company may elect to cover up to approximately 10 million
         additional POPs with LTE in 2013 (which is reflected in projected
         total capital expenditures for 2013 above).

"We continue to remain focused on improving our financial performance," said
R. Perley McBride, Leap's chief financial officer. "Our focus on higher-ARPU
customers over the past few quarters has driven improvements in contribution
margin, adjusted OIBDA margin and free cash flow. We also continue to
thoughtfully manage our balance sheet and cash resources. We recently closed a
$1.425 billion senior secured term loan facility, which enabled us to
refinance existing debt and will lower our annual interest expense by almost
$30 million after we retire the remaining 4.50% convertible senior notes due
2014. We also generated significant year-over-year improvement in free cash
flow due to lower capital expenditures, partially offset by lower cash from
operations due to inventory purchases we made in connection with the
transition of supply chain activities with a third-party logistics provider.
We remain focused on improving free cash flow and plan to continue our focus
on making smart investments in our business."

Other Business & Operational Highlights

  oEntered into a 4G LTE roaming agreement with a national carrier to provide
    Cricket's customers with nationwide 4G coverage.
  oBecame the first carrier in the U.S. to introduce the HTC One SV
    smartphone. Also introduced the Alcatel Authority and Kyocera Hydro
    smartphones.
  oAnnounced the successful syndication and closing of a $1.425 billion
    senior secured term loan facility, primarily to refinance existing
    indebtedness.
  oReceived Editors' Choice award from PC Mag.com for Samsung Galaxy S III.
  oAnnounced in early March that Muve Music was available to more than 1.4
    million customers, with a library of more than ten million songs.
  oEntered into a licensing arrangement to provide Muve Music to customers of
    TIM Brazil, one of Brazil's largest mobile carriers.
  oLaunched Cricket Lifeline service to customers in Georgia. Cricket
    Lifeline is now available in 29 states.

Webcast Information
As previously announced, Leap management will host a live webcast at
approximately 5:00 p.m. EDT / 2:00 p.m. PDT today to discuss these results.
Other forward-looking and material information may also be discussed during
this call.

To listen live via telephone, dial 1-800-728-2056 (domestic) or 1-212-271-4651
(international). No participant pass code number is required for this call.

More information about this event including a live webcast, the accompanying
presentation slides and other supporting materials may be accessed by visiting
http://earnings.leapwireless.com. These materials will be available for
download at approximately 5:00 p.m. EDT/2:00 p.m. PDT.

A replay of the conference call will be available for a limited time via
webcast, MP3 or telephone and may be accessed by visiting
http://earnings.leapwireless.comor dialing 1-800-633-8284 (domestic) or
1-402-977-9140 (international) and entering reservation number 21655555.

About Leap
Leap provides innovative, high-value wireless services to a young and
ethnically diverse customer base. With the value of unlimited wireless
services as the foundation of its business, Leap pioneered its Cricket
service. Cricket products and services are available nationwide through
company-owned stores, dealers, national retailers and at
MyCricket.com.Through its affordable, flat-rate service plans, Cricket offers
customers a choice of unlimited voice, text, data and mobile Web services.
Headquartered in San Diego, Calif., Leap is traded on the NASDAQ Global Select
Market under the ticker symbol "LEAP." For more information, please visit
www.leapwireless.com.

Notes Regarding Non-GAAP Financial Measures
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 Item 10 of Regulation S-K promulgated by the Securities and
Exchange Commission (SEC), 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, which are included in
the most directly comparable measure calculated and presented in accordance
with GAAP in the condensed consolidated balance sheets, condensed consolidated
statements of comprehensive income or condensed consolidated statements of
cash flows; or (b) includes amounts, or is subject to adjustments that have
the effect of including amounts, which 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 OIBDA, free cash flow, CPGA, ARPU 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.

Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements reflect
management's current expectations based on currently available operating,
financial and competitive information, but are subject to risks, uncertainties
and assumptions that could cause actual results to differ materially from
those anticipated in or implied by the forward-looking statements. Our
forward-looking statements include our discussions about planned product and
service plan developments, expected customer activity, future capital
expenditures and LTE deployment and expected financial and operational
performance, and are generally identified with words such as "believe,"
"expect," "intend," "plan," "could," "may" and similar expressions. Risks,
uncertainties and assumptions that could affect our forward-looking statements
include, among other things:

  oour ability to attract and retain customers in an extremely competitive
    marketplace;
  oour ability to successfully implement product and service plan offerings
    and execute effectively on our other strategic activities;
  othe impact of competitors' initiatives and our ability to anticipate and
    respond to such initiatives;
  ochanges in economic conditions, including interest rates, consumer credit
    conditions, consumer debt levels, consumer confidence, unemployment rates,
    energy and transportation costs and other macro-economic factors that
    could adversely affect demand for the services we provide;
  oour ability to meet significant purchase and revenue commitments under
    agreements we have entered into;
  oour ability to refinance our indebtedness under, and comply with the
    covenants in, any credit agreement, indenture or similar instrument
    governing our existing indebtedness or any future indebtedness;
  ofuture customer usage of our wireless services, which could exceed our
    expectations, and our ability to manage or increase network capacity to
    meet increasing customer demand, in particular demand for data services;
  oour ability to offer customers cost-effective LTE services;
  oour ability to obtain and maintain 3G and 4G roaming and wholesale
    services from other carriers at cost-effective rates;
  oour ability to acquire or obtain access to additional spectrum in the
    future at a reasonable cost or on a timely basis;
  ofailure of our network or information technology systems to perform
    according to expectations and risks associated with the upgrade or
    transition of certain of those systems, including our customer billing
    system;
  oour ability to attract, integrate, motivate and retain an experienced
    workforce, including members of senior management;
  oour ability to maintain effective internal control over financial
    reporting; and
  oother factors detailed in the section entitled "Risk Factors" included in
    our periodic reports filed with the SEC, including our Annual Report on
    Form 10-K for the year ended December 31, 2012 filed with the SEC on
    February 25, 2013 and our Quarterly Report on Form 10-Q for the quarter
    ended March31, 2013, which we expect to file shortly with the SEC.

All forward-looking statements included in this news release should be
considered in the context of these risks. All forward-looking statements speak
only as of April 30, 2013, and we undertake no obligation to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise. Investors and prospective investors are cautioned not to
place undue reliance on our forward-looking statements.

Leap is a U.S.registered trademark and the Leap logo is a trademark of Leap.
Cricket, Cricket Wireless, Cricket Clicks, Muve Music, Muve First, Muve
Headliner, MyPerks, Flex Bucket, Real Unlimited Unreal Savings and the Cricket
"K" are U.S.registered trademarks of Cricket. In addition, the following are
trademarks or service marks of Cricket: BridgePay, Cricket By Week, Cricket
Choice, Cricket Connect, Cricket Nation, Cricket PAYGo, Muve, Muve Money,
Cricket Crosswave, Seek Music, Cricket MyPerks and Cricket Wireless Internet
Service. All other trademarks are the property of their respective owners.



LEAP WIRELESS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS ^(1)
(In thousands, except share amounts)
                                                    March 31,     December 31,
                                                    2013          2012
Assets                                              (Unaudited)
Cash and cash equivalents                           $ 526,734     $ 515,550
Short-term investments                              140,404       159,426
Inventories                                         102,028       121,601
Deferred charges                                    60,947        60,963
Other current assets                                149,173       139,242
Total current assets                                979,286       996,782
Property and equipment, net                         1,628,827     1,762,090
Wireless licenses                                   2,090,654     1,947,333
Assets held for sale                                —             136,222
Goodwill                                            31,886        31,886
Intangible assets, net                              21,429        24,663
Other assets                                        80,548        68,284
Total assets                                        $ 4,832,630   $ 4,967,260
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities            $ 287,862     $ 396,110
Current maturities of long-term debt                4,000         4,000
Other current liabilities                           289,469       216,880
Total current liabilities                           581,331       616,990
Long-term debt, net                                 3,299,593     3,298,463
Deferred tax liabilities                            397,429       385,111
Other long-term liabilities                         166,828       169,047
Total liabilities                                   4,445,181     4,469,611
Redeemable non-controlling interests                63,519        64,517
Stockholders' equity:
Preferred stock- authorized 10,000,000shares,     —             —
$.0001par value; no shares issued and outstanding
Common stock - authorized 160,000,000 shares,
$.0001 par value; 79,054,530 and 79,194,750 shares  8             8
issued and outstanding at March 31, 2013 and
December 31, 2012, respectively
Additional paid-in capital                          2,182,912     2,182,503
Accumulated deficit                                 (1,858,301)   (1,748,694)
Accumulated other comprehensive loss                (689)         (685)
Total stockholders' equity                          323,930       433,132
Total liabilities and stockholders' equity          $ 4,832,630   $ 4,967,260



LEAP WIRELESS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ^(1)
(in thousands, except per share data)
                                                     Three Months Ended

                                                     March 31,
                                                     2013          2012
                                                     (Unaudited)   (Unaudited)
Revenues:
Service revenues                                     $ 684,622     $ 773,998
Equipment revenues                                   105,236       51,621
 Total revenues                                    789,858       825,619
Operating expenses:
Cost of service (exclusive of items shown            250,858       261,311
separately below)
Cost of equipment                                    258,968       247,847
Selling and marketing                                78,838        95,554
General and administrative                           82,225        89,699
Depreciation and amortization                        152,573       146,543
Impairments and other charges                        735           —
 Total operating expenses                          824,197       840,954
Gain (loss) on sale, exchange or disposal of         4,988         (468)
assets, net
 Operating loss                                    (29,351)      (15,803)
Equity in net income (loss) of investees, net        (1,158)       193
Interest income                                      47            29
Interest expense                                     (64,725)      (67,042)
 Loss before income taxes                          (95,187)      (82,623)
Income tax expense                                   (14,420)      (11,711)
 Net loss                                          (109,607)     (94,334)
Accretion of redeemable non-controlling interests    (1,705)       (4,105)
and distributions, net of tax
 Net loss attributable to common stockholders      $ (111,312)   $ (98,439)
Loss per share attributable to common stockholders:
Basic                                                $ (1.43)      $ (1.28)
Diluted                                              $ (1.43)      $ (1.28)
Shares used in per share calculations:
Basic                                                77,714        77,025
Diluted                                              77,714        77,025
Other comprehensive loss:
 Net loss                                           $ (109,607)   $ (94,334)
 Net unrealized holding gains (losses) on           (3)           2
investments and other
Comprehensive loss                                   $ (109,610)   $ (94,332)



LEAP WIRELESS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ^ (1)
(in thousands)
                                                      Three Months Ended March

                                                      31,
                                                      2013         2012
                                                      (Unaudited)  (Unaudited)
Operating activities:
 Net cash provided by operating activities          $ 25,557     $ 35,357
Investing activities:
Purchases of property and equipment                   (26,362)     (146,314)
Change in prepayments for purchases of property and   —            (1,940)
equipment
Purchases of wireless licenses and spectrum clearing  (335)        (976)
costs
Proceeds from sales of wireless licenses and          321          855
operating assets, net
Purchases of investments                              (65,767)     (77,149)
Sales and maturities of investments                   84,716       202,107
Net cash used in investing activities                 (7,427)      (23,417)
Financing activities:
Repayment of long-term debt                           (1,000)      —
Payment of debt issuance costs                        (552)        —
Payments made to joint venture partners               (3,750)      (255)
Other                                                 (1,644)      (1,010)
Net cash used in financing activities                 (6,946)      (1,265)
Net increase in cash and cash equivalents             11,184       10,675
Cash and cash equivalents at beginning of period      515,550      345,243
Cash and cash equivalents at end of period            $ 526,734    $ 355,918
Supplementary disclosure of cash flow information:
Cash paid for interest                                $ (11,209)   $ (21,372)
Net wireless licenses received in exchange            (6,809)      —
transaction



Explanatory Notes to Financial Statements
    The condensed consolidated financial statements and the tables of results
    and operating and financial metrics included at the beginning of this
    release include the operating results and financial position of Leap and
(1) its wholly-owned subsidiaries and consolidated joint ventures. The Company
    consolidates STX Wireless, LLC in accordance with the authoritative
    guidance for consolidations based on the voting interest model. All
    intercompany accounts and transactions have been eliminated in the
    condensed consolidated financial statements.
    The following table summarizes operating data for the Company's
    consolidated operations for the three months ended March 31, 2013 and 2012
    (in thousands, except percentages):



                Three Months Ended March 31,
                                                              Change from Prior
                                                              Year
                             % of                   % of
                2013         2013      2012         2012      Dollars      Percent
                             Service                Service
                             Revenues               Revenues
                (Unaudited)            (Unaudited)
Revenues:
Service         $ 684,622              $ 773,998              $ (89,376)   (11.5)%
revenues
Equipment       105,236                51,621                 53,615       103.9%
revenues
Total revenues  789,858                825,619                (35,761)     (4.3)%
Operating
expenses:
Cost of         250,858      36.6%     261,311      33.8%     (10,453)     (4.0)%
service
Cost of         258,968      37.8%     247,847      32.0%     11,121       4.5%
equipment
Selling and     78,838       11.5%     95,554       12.3%     (16,716)     (17.5)%
marketing
General and     82,225       12.0%     89,699       11.6%     (7,474)      (8.3)%
administrative
Depreciation
and             152,573      22.3%     146,543      18.9%     6,030        4.1%
amortization
Impairments
and other       735          0.1%      —            —         735          *
charges
Total
operating       824,197      120.4%    840,954      108.7%    (16,757)     (2.0)%
expenses
Gain (loss) on
sale, exchange  4,988        0.7%      (468)        (0.1)%    5,456        *
or disposal of
assets, net
Operating loss  $ (29,351)   (4.3)%    $ (15,803)   (2.0)%    $ (13,548)   85.7%

*Percentage change not meaningful.

Definition of Terms and Reconciliation of Non-GAAP Financial Measures
The Company utilizes certain financial measures that are widely used in the
telecommunications industry 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.
    Churn, which 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. Customers who do not pay the first bill
    they receive following initial activation are deducted from our gross
    customer additions in the month in which they are disconnected; as a
    result, these customers are not included in churn. Customers of our
    Cricket Wireless and Cricket Broadband service are generally disconnected
    from service approximately 30days after failing to pay a monthly bill,
    and pay-in-advance customers who ask to terminate their service are
    disconnected when their paid service period ends. Cricket PAYGo customers
(1) generally have 60 days from the date they activated their account, were
    charged a daily or monthly access fee for service or last "topped-up"
    their account (whichever is later) to do so again, or they will have their
    account suspended for a subsequent 60-day period before being
    disconnected. 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. Other companies may calculate this
    measure differently.
    ARPU is service revenues, less pass-through regulatory fees and
    telecommunications taxes, 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,
    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. Our customers are generally disconnected from service after a
(2) specified period following their failure to either pay a monthly bill or
    replenish, or "top-up," their account. Because our calculation of
    weighted-average number of customers includes customers who are not
    currently paying for service but who have not yet been disconnected from
    service because they have not paid their last bill or have not replenished
    their account, ARPU may appear lower during periods in which we have
    significant disconnect activity. 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. Other companies may calculate this measure
    differently.
    The following table reconciles total service revenues used in the
    calculation of ARPU to service revenues, which we consider to be the most
    directly comparable GAAP financial measure to ARPU (unaudited; in
    thousands, except weighted-average number of customers and ARPU):

                                                        Three Months Ended

                                                        March 31,
                                                        2013        2012
Service revenues                                        $ 684,622   $ 773,998
Less pass-through regulatory fees and                   (855)       (4,137)
telecommunications taxes
Total service revenues used in the calculation of ARPU  $ 683,767   $ 769,861
Weighted-average number of customers                    5,213,605   6,025,427
ARPU                                                    $ 43.72     $ 42.59



    CPGA is selling and marketing costs (excluding applicable share-based
    compensation expense or benefit included in selling and marketing
    expense), and equipment subsidy (generally defined as cost of equipment
    less equipment revenue), less the net loss on equipment transactions and
    third-party commissions unrelated to customer acquisition, divided by the
    total number of gross new customer additions during the period being
    measured. The net loss on equipment transactions unrelated to customer
    acquisition includes the revenues and costs associated with the sale of
    wireless devices to existing customers as well as costs associated with
    device replacements and repairs (other than warranty costs which are the
    responsibility of the device manufacturers). Third-party commissions
    unrelated to customer acquisition are commissions paid to third parties
    for certain activities related to the continuing service of customers. We
(3) deduct customers who do not pay the first bill they receive following
    initial activation from our gross customer additions in the month in which
    they are disconnected, which tends to increase CPGA because we incur the
    costs associated with a new 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. Other companies may calculate
    this measure differently.
    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 (unaudited; in
    thousands, except gross customer additions and CPGA):



                                                        Three Months Ended

                                                        March 31,
                                                        2013        2012
Selling and marketing expense                           $ 78,838    $ 95,554
Less share-based compensation expense included in       (111)       (23)
selling and marketing expense
Plus cost of equipment                                  258,968     247,847
Less equipment revenue                                  (105,236)   (51,621)
Less net loss on equipment transactions and
third-party commissions unrelated to customer           (82,072)    (96,097)
acquisition
Total costs used in the calculation of CPGA             $ 150,387   $ 195,660
Gross customer additions                                473,881     859,547
CPGA                                                    $ 317       $ 228



    CCU is cost of service and general and administrative costs (excluding
    applicable share-based compensation expense or benefit included in cost of
    service and general and administrative expense) plus net loss on equipment
    transactions and third-party commissions unrelated to customer acquisition
    (which includes the gain or loss on the sale of devices to existing
    customers, costs associated with device replacements and repairs (other
    than warranty costs which are the responsibility of the device
    manufacturers) and commissions paid to third parties for certain
    activities related to the continuing service of customers), less
    pass-through regulatory fees and telecommunications taxes, divided by the
    weighted-average number of customers, divided by the number of months
(4) 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 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. Other companies may calculate
    this measure differently.
    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 (unaudited; in thousands, except
    weighted-average number of customers and CCU):



                                                        Three Months Ended

                                                        March 31,
                                                        2013        2012
Cost of service                                         $ 250,858   $ 261,311
Plus general and administrative expense                 82,225      89,699
Less share-based compensation (expense) benefit
included in cost of service and general and             (2,003)     717
administrative expense
Plus net loss on equipment transactions and
third-party commissions unrelated to customer           82,072      96,097
acquisition
Less pass-through regulatory fees and                   (855)       (4,137)
telecommunications taxes
Total costs used in the calculation of CCU              $ 412,297   $ 443,687
Weighted-average number of customers                    5,213,605   6,025,427
CCU                                                     $ 26.36     $ 24.55



    Adjusted OIBDA is a non-GAAP financial measure defined as operating income
    (loss) before depreciation and amortization, adjusted to exclude the
    effects of: (gain)/loss on sale, exchange or disposal of assets, net;
(5) impairments and other charges; and share-based compensation expense or
    benefit. Adjusted OIBDA should not be construed as an alternative to
    operating income (loss) or net income (loss) as determined in accordance
    with GAAP, or as an alternative to cash flows from operating activities as
    determined in accordance with GAAP or as a measure of liquidity.
    In a capital-intensive industry such as wireless telecommunications,
    management believes that adjusted OIBDA, and the associated percentage
    margin calculations, are meaningful measures of our operating performance.
    We use adjusted OIBDA as a supplemental performance measure because
    management believes it facilitates comparisons of our operating
    performance from period to period and comparisons of our operating
    performance to that of other companies by backing out potential
    differences caused by 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 GAAP, 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 OIBDA facilitates internal comparisons of our
    historical operating performance, management also uses this metric for
    business planning purposes and to measure our performance relative to that
    of our competitors. In addition, we believe that adjusted OIBDA and
    similar measures are widely used by investors, financial analysts and
    credit rating agencies as measures of our financial performance over time
    and to compare our financial performance with that of other companies in
    our industry.
    Adjusted OIBDA 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 OIBDA does not reflect cash requirements for such
    replacements;
    •it does not reflect costs associated with share-based awards
    exchanged for employee services;
    •it does not reflect the interest expense necessary to service
    interest or principal payments on 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 OIBDA as a
    financial performance measure that supplements but does not replace the
    information provided to management by our GAAP results.
    The following table reconciles adjusted OIBDA to operating loss, which we
    consider to be the most directly comparable GAAP financial measure to
    adjusted OIBDA (unaudited; in thousands):



                                                      Three Months Ended

                                                      March31,
                                                      2013         2012
Operating loss                                        $ (29,351)   $ (15,803)
Plus depreciation and amortization                    152,573      146,543
OIBDA                                                 $ 123,222    $ 130,740
Plus (gain) loss on sale, exchange or disposal of     (4,988)      468
assets, net
Plus impairments and other charges                    735          —
Plus share-based compensation expense (benefit)       2,114        (694)
Adjusted OIBDA                                        $ 121,083    $ 130,514



    Free cash flow is a non-GAAP financial measure defined as net cash
    provided by operating activities less purchases of property and equipment.
(6) Free cash flow should not be considered as an alternative to net cash flow
    provided by operating activities as determined in accordance with GAAP or
    as a measure of liquidity.
    Management believes that free cash flow provides useful information about
    the amount of cash available to us to fund ongoing operations and working
    capital needs, service our debt, satisfy our tax obligations, strengthen
    our balance sheet and make investments in our business. Management also
    believes that the presentation of free cash flow is relevant and useful
    for investors because it allows investors to evaluate cash generated from
    our underlying operations in a manner similar to that used by management.
    In addition, free cash flow is a primary measure used externally by
    investors, analysts and peers in our industry for purposes of valuation
    and comparing our operating performance to that of other companies in our
    industry.
    Free cash flow 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. Free cash flow, as we calculate it, may not be
    comparable to similarly titled measures used by other companies. In
    addition, free cash flow (as a measure of liquidity) has certain
    limitations and does not represent funds available for discretionary use
    and is not necessarily a measure of our ability to fund our cash needs.
    The following table reconciles free cash flow to net cash provided by
    operating activities, which we consider to be the most directly comparable
    GAAP financial measure to free cash flow (unaudited; in thousands):



                                           Three Months Ended

                                           March 31,
                                           2013       2012
Net cash provided by operating activities  $ 25,557   $ 35,357
Less purchases of property and equipment   (26,362)   (146,314)
Free cash flow                             $ (805)    $ (110,957)



SOURCE Leap Wireless International, Inc.

Website: http://www.leapwireless.com
Contact: Greg Lund, Media Relations, 858-882-9238, glund@leapwireless.com, or
Amy Wakeham, Investor Relations, 858-882-9876, awakeham@leapwireless.com