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       &lt;b&gt;&lt;font style="font-family: 'Times New Roman', Times"&gt;The
       Company&lt;/font&gt;&lt;/b&gt;
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       Leap Wireless International, Inc. (&amp;#8220;Leap&amp;#8221;), a Delaware
       corporation, together with its subsidiaries, is a wireless
       communications carrier that offers digital wireless services in
       the United States under the
       &amp;#8220;Cricket&lt;sup style="font-size: 85%; vertical-align: text-top"&gt;&amp;#174;&lt;/sup&gt;&amp;#8221;
       brand. Cricket service offerings provide customers with
       unlimited wireless services for a flat rate without requiring a
       fixed-term contract or a credit check. The Company&amp;#8217;s
       primary service is Cricket Wireless, which offers customers
       unlimited wireless voice and data services for a flat monthly
       rate. Leap conducts operations through its subsidiaries and has
       no independent operations or sources of income other than
       interest income and through dividends, if any, from its
       subsidiaries. Cricket service is offered by Cricket
       Communications, Inc. (&amp;#8220;Cricket&amp;#8221;), a wholly owned
       subsidiary of Leap. Cricket service is also offered in Oregon by
       LCW Wireless Operations, LLC (&amp;#8220;LCW Operations&amp;#8221;); in
       the upper Midwest by Denali Spectrum Operations, LLC
       (&amp;#8220;Denali Operations&amp;#8221;); and, commencing October&amp;#160;1,
       2010, in South Texas by STX Wireless Operations, LLC (&amp;#8220;STX
       Operations&amp;#8221;).
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       Cricket owns an indirect 100% interest in LCW Operations through
       its 100% interest in LCW Wireless, LLC (&amp;#8220;LCW
       Wireless&amp;#8221;). Cricket acquired the remaining 5.4% of the
       membership interests of LCW Wireless on August&amp;#160;25, 2010,
       resulting in LCW Wireless and its subsidiaries becoming wholly
       owned subsidiaries of Cricket.
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       Cricket owns an indirect 82.5% non-controlling interest in
       Denali Operations through an 82.5% non-controlling interest in
       Denali Spectrum, LLC (&amp;#8220;Denali&amp;#8221;). Denali was structured
       to qualify as a designated entity under Federal Communications
       Commission (&amp;#8220;FCC&amp;#8221;) regulations. On September&amp;#160;21,
       2010, Cricket entered into an agreement with Denali Spectrum
       Manager, LLC (&amp;#8220;DSM&amp;#8221;) to purchase DSM&amp;#8217;s 17.5%
       controlling interest in Denali. Upon the closing of the
       transaction, Denali and its subsidiaries will become wholly
       owned subsidiaries of Cricket. In addition, on
       September&amp;#160;21, 2010, Denali entered into an agreement to
       contribute all of its spectrum outside its Chicago and Southern
       Wisconsin operating markets and a related spectrum lease to
       Savary Island Wireless, LLC (&amp;#8220;Savary Island&amp;#8221;), a newly
       formed venture, in exchange for an 85% non-controlling interest.
       Denali will retain spectrum and assets relating to its Chicago
       and Southern Wisconsin operating markets. The closings of both
       transactions are subject to customary closing conditions,
       including the approval of the FCC, and the closing of
       Cricket&amp;#8217;s acquisition of DSM&amp;#8217;s controlling interest in
       Denali is subject to the prior closing of the Savary Island
       transaction.
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       Cricket owns an indirect 75.75% controlling interest in STX
       Operations through a 75.75% interest in STX&amp;#160;Wireless, LLC
       (&amp;#8220;STX Wireless&amp;#8221;). STX Wireless is a joint venture
       created by Cricket and various entities doing business as Pocket
       Communications (&amp;#8220;Pocket&amp;#8221;) to provide Cricket service
       in the South Texas region. On October&amp;#160;1, 2010, the Company
       and Pocket contributed substantially all of their respective
       wireless spectrum and operating assets in the South Texas region
       to the venture, with Cricket receiving a 75.75% controlling
       interest and Pocket receiving a 24.25% non-controlling interest.
       Commencing October&amp;#160;1, 2010, STX Wireless began providing
       Cricket wireless service in South Texas with a network footprint
       covering 4.4&amp;#160;million potential customers (&amp;#8220;POPs&amp;#8221;).
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       For more information regarding the transactions described above,
       see &amp;#8220;Note&amp;#160;7. Significant Acquisitions, Dispositions
       and Other Agreements.&amp;#8221;
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       Leap, Cricket and their subsidiaries and consolidated joint
       ventures, including LCW Wireless, Denali and STX&amp;#160;Wireless,
       are collectively referred to herein as the &amp;#8220;Company.&amp;#8221;
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 -Publisher AICPA
 -Name Statement of Position (SOP)
 -Number 94-6
 -Paragraph 10

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