Guarantor Financial Information

9 Months Ended

Sep. 30, 2011

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

The $3,000 million of senior notes issued by Cricket (the “Issuing Subsidiary”) are comprised of $300 million of unsecured senior notes due 2015, $1,100 million of senior secured notes due 2016 and $1,600 million of unsecured senior notes due 2020. The notes are jointly and severally guaranteed on a full and unconditional basis by Leap (the “Guarantor Parent Company”) and Cricket License Company, LLC, a wholly-owned subsidiary of Cricket (the “Guarantor Subsidiary”).

The indentures governing these notes limit, among other things, the Guarantor Parent Company's, Cricket's and the Guarantor Subsidiary's ability to: incur additional debt; create liens or other encumbrances; place limitations on distributions from restricted subsidiaries; pay dividends; make investments; prepay subordinated indebtedness or make other restricted payments; issue or sell capital stock of restricted subsidiaries; issue guarantees; sell assets; enter into transactions with affiliates; and make acquisitions or merge or consolidate with another entity.

Condensed consolidating financial information of the Guarantor Parent Company, the Issuing Subsidiary, the Guarantor Subsidiary, Non-Guarantor Subsidiaries (STX Wireless, Savary Island, Cricket Music and Music Operations) and total consolidated Leap and subsidiaries as of September 30, 2011 and December 31, 2010 and for the three and nine months ended September 30, 2011 and 2010 is presented below. The equity method of accounting is used to account for ownership interests in subsidiaries, where applicable.

At December 31, 2010, LCW Wireless and Denali and their respective subsidiaries were wholly owned subsidiaries of the Issuing Subsidiary and reported as Non-Guarantor Subsidiaries in the condensed consolidating financial statements. LCW Wireless and Denali and their respective subsidiaries were merged with and into the Issuing Subsidiary on February 28, 2011 and March 31, 2011, respectively. As a result of these transactions, the financial position, results of operations and cash flows of these entities have been consolidated into the Issuing Subsidiary. All prior period consolidating financial statements have been revised to reflect this reorganization.

Condensed Consolidating Balance Sheet as of September 30, 2011 (unaudited and in thousands):



	Guarantor Parent Company		Issuing Subsidiary		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Consolidating and Eliminating Adjustments			Consolidated

Assets
Cash and cash equivalents	$	90	$	344,871	$	—	$	79,778	$	—		$	424,739
Short-term investments	—		375,292		—		—		—			375,292
Inventories	—		82,725		—		5,578		—			88,303
Deferred charges	—		46,279		—		37		—			46,316
Other current assets	2,369		140,941		—		1,450		(1,107		)	143,653
Total current assets	2,459		990,108		—		86,843		(1,107		)	1,078,303
Property and equipment, net	—		1,842,651		—		86,847		—			1,929,498
Investments in and advances to affiliates and consolidated subsidiaries	991,160		2,255,195		54,504		—		(3,300,859		)	—
Wireless licenses	—		—		1,748,775		192,049		—			1,940,824
Assets held for sale	—		—		1,376		29,033		—			30,409
Goodwill	—		11,240		—		20,414		—			31,654
Intangible assets, net	—		18,126		—		28,563		—			46,689
Other assets	4,254		56,249		—		2,267		—			62,770
Total assets	$	997,873	$	5,173,569	$	1,804,655	$	446,016	$	(3,301,966	)	$	5,120,147
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities	$	268	$	316,341	$	—	$	9,318	$	—		$	325,927
Current maturities of long-term debt	—		8,500		—		—		—			8,500
Intercompany payables	51,892		302,123		—		39,520		(393,535		)	—
Other current liabilities	2,420		276,108		—		13,446		(1,107		)	290,867
Total current liabilities	54,580		903,072		—		62,284		(394,642		)	625,294
Long-term debt	250,000		2,968,856		—		226,930		(226,930		)	3,218,856
Deferred tax liabilities	—		325,286		—		—		—			325,286
Other long-term liabilities	—		139,304		—		24,604		—			163,908
Total liabilities	304,580		4,336,518		—		313,818		(621,572		)	4,333,344
Redeemable non-controlling interests	—		93,510		—		—		—			93,510
Stockholders' equity	693,293		743,541		1,804,655		132,198		(2,680,394		)	693,293
Total liabilities and stockholders' equity	$	997,873	$	5,173,569	$	1,804,655	$	446,016	$	(3,301,966	)	$	5,120,147

Condensed Consolidating Balance Sheet as of December 31, 2010 (unaudited and in thousands):



	Guarantor Parent Company		Issuing Subsidiary		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Consolidating and Eliminating Adjustments			Consolidated

Assets
Cash and cash equivalents	$	85	$	269,140	$	—	$	81,565	$	—		$	350,790
Short-term investments	—		68,367		—		—		—			68,367
Inventories	—		98,763		—		5,478		—			104,241
Deferred charges	—		47,343		—		—		—			47,343
Other current assets	2,261		86,040		—		3,009		(300		)	91,010
Total current assets	2,346		569,653		—		90,052		(300		)	661,751
Property and equipment, net	—		1,946,209		—		90,436		—			2,036,645
Investments in and advances to affiliates and consolidated subsidiaries	1,200,613		2,269,613		47,069		49		(3,517,344		)	—
Wireless licenses	—		—		1,747,108		220,967		—			1,968,075
Goodwill	—		10,680		—		20,414		—			31,094
Intangible assets, net	—		20,455		—		44,388		—			64,843
Other assets	5,315		66,195		—		905		—			72,415
Total assets	$	1,208,274	$	4,882,805	$	1,794,177	$	467,211	$	(3,517,644	)	$	4,834,823
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities	$	79	$	333,514	$	—	$	13,276	$	—		$	346,869
Current maturities of long-term debt	—		8,500		—		5,101		(5,101		)	8,500
Intercompany payables	41,734		300,800		—		55,054		(397,588		)	—
Other current liabilities	5,179		199,698		—		16,500		(300		)	221,077
Total current liabilities	46,992		842,512		—		89,931		(402,989		)	576,446
Long-term debt	250,000		2,582,070		—		211,875		(211,875		)	2,832,070
Deferred tax liabilities	—		295,703		—		—		—			295,703
Other long-term liabilities	—		110,800		—		3,734		—			114,534
Total liabilities	296,992		3,831,085		—		305,540		(614,864		)	3,818,753
Redeemable non-controlling interests	—		104,788		—		—		—			104,788
Stockholders' equity	911,282		946,932		1,794,177		161,671		(2,902,780		)	911,282
Total liabilities and stockholders' equity	$	1,208,274	$	4,882,805	$	1,794,177	$	467,211	$	(3,517,644	)	$	4,834,823

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2011 (unaudited and in thousands):



	Guarantor Parent Company			Issuing Subsidiary			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated

Revenues:
Service revenues	$	—		$	634,494		$	—	$	82,786		$	16		$	717,296
Equipment revenues	—			41,195			—		4,788			—			45,983
Other revenues	—			3,728			27,672		1,041			(32,441		)	—
Total revenues	—			679,417			27,672		88,615			(32,425		)	763,279
Operating expenses:
Cost of service (exclusive of items shown separately below)	—			260,490			—		23,919			(28,510		)	255,899
Cost of equipment	—			166,357			—		24,007			—			190,364
Selling and marketing	—			68,878			—		11,017			—			79,895
General and administrative	4,274			70,223			188		13,129			(3,915		)	83,899
Depreciation and amortization	—			127,429			—		17,475			—			144,904
Impairments and other charges	—			1,069			377		22,247			—			23,693
Total operating expenses	4,274			694,446			565		111,794			(32,425		)	778,654
Loss on sale or disposal of assets	—			(649		)	—		(29		)	—			(678		)
Operating income (loss)	(4,274		)	(15,678		)	27,107		(23,208		)	—			(16,053		)
Equity in net loss of consolidated subsidiaries	(67,448		)	(1,241		)	—		—			68,689			—
Equity in net income of investees, net	—			764			—		—			—			764
Interest income	6,062			5,132			—		1			(11,136		)	59
Interest expense	(3,170		)	(69,853		)	—		(5,141		)	11,136			(67,028		)
Other income, net	—			32			—		—			—			32
Income (loss) before income taxes	(68,830		)	(80,844		)	27,107		(28,348		)	68,689			(82,226		)
Income tax expense	—			(11,899		)	—		—			—			(11,899		)
Net income (loss)	(68,830		)	(92,743		)	27,107		(28,348		)	68,689			(94,125		)
Accretion of redeemable non-controlling interests and distributions, net of tax	—			25,295			—		—			—			25,295
Net income (loss) attributable to common stockholders	$	(68,830	)	$	(67,448	)	$	27,107	$	(28,348	)	$	68,689		$	(68,830	)

Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2011 (unaudited and in thousands):



	Guarantor Parent Company			Issuing Subsidiary			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated

Revenues:
Service revenues	$	—		$	1,849,551		$	—	$	250,195		$	48		$	2,099,794
Equipment revenues	—			177,612			—		26,325			—			203,937
Other revenues	—			12,125			78,571		3,051			(93,747		)	—
Total revenues	—			2,039,288			78,571		279,571			(93,699		)	2,303,731
Operating expenses:
Cost of service (exclusive of items shown separately below)	—			746,356			—		71,696			(81,338		)	736,714
Cost of equipment	—			524,959			—		77,877			—			602,836
Selling and marketing	—			235,624			—		41,284			—			276,908
General and administrative	10,283			231,005			563		41,897			(12,361		)	271,387
Depreciation and amortization	—			366,049			—		41,666			—			407,715
Impairments and other charges	—			1,301			377		22,646			—			24,324
Total operating expenses	10,283			2,105,294			940		297,066			(93,699		)	2,319,884
Loss on sale or disposal of assets	—			(5,591		)	—		(82		)	—			(5,673		)
Operating income (loss)	(10,283		)	(71,597		)	77,631		(17,577		)	—			(21,826		)
Equity in net income (loss) of consolidated subsidiaries	(228,660		)	44,917			—		—			183,743			—
Equity in net income of investees, net	—			2,953			—		—			—			2,953
Interest income	18,188			15,249			—		3			(33,258		)	182
Interest expense	(9,497		)	(196,391		)	—		(15,140		)	33,258			(187,770		)
Income (loss) before income taxes	(230,252		)	(204,869		)	77,631		(32,714		)	183,743			(206,461		)
Income tax expense	—			(32,546		)	—		—			—			(32,546		)
Net income (loss)	(230,252		)	(237,415		)	77,631		(32,714		)	183,743			(239,007		)
Accretion of redeemable non-controlling interests and distributions, net of tax	—			8,755			—		—			—			8,755
Net income (loss) attributable to common stockholders	$	(230,252	)	$	(228,660	)	$	77,631	$	(32,714	)	$	183,743		$	(230,252	)

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2010 (unaudited and in thousands):



	Guarantor Parent Company			Issuing Subsidiary			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Consolidating and Eliminating Adjustments			Consolidated

Revenues:
Service revenues	$	—		$	600,567		$	—		$	—	$	16		$	600,583
Equipment revenues	—			37,478			—			—		—			37,478
Other revenues	—			165			22,665			—		(22,830		)	—
Total revenues	—			638,210			22,665			—		(22,814		)	638,061
Operating expenses:
Cost of service (exclusive of items shown separately below)	—			238,792			—			—		(23,403		)	215,389
Cost of equipment	—			120,273			—			—		—			120,273
Selling and marketing	—			98,942			—			—		—			98,942
General and administrative	3,737			84,703			173			—		589			89,202
Depreciation and amortization	—			114,055			—			—		—			114,055
Impairments and other charges	—			476,561			766			—		—			477,327
Total operating expenses	3,737			1,133,326			939			—		(22,814		)	1,115,188
Loss on sale or disposal of assets	—			(755		)	(168		)	—		—			(923		)
Operating income (loss)	(3,737		)	(495,871		)	21,558			—		—			(478,050		)
Equity in net income (loss) of consolidated subsidiaries	(535,457		)	21,558			—			—		513,899			—
Equity in net income of investees, net	—			(316		)	—			—		—			(316		)
Interest income	6,063			211			—			—		(6,062		)	212
Interest expense	(3,152		)	(63,381		)	—			—		6,062			(60,471		)
Other income, net	—			135			—			—		—			135
Income (loss) before income taxes	(536,283		)	(537,664		)	21,558			—		513,899			(538,490		)
Income tax benefit	—			5,154			—			—		—			5,154
Net income (loss)	(536,283		)	(532,510		)	21,558			—		513,899			(533,336		)
Accretion of redeemable non-controlling interests and distributions, net of tax	—			(2,947		)	—			—		—			(2,947		)
Net income (loss) attributable to common stockholders	$	(536,283	)	$	(535,457	)	$	21,558		$	—	$	513,899		$	(536,283	)

Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2010 (unaudited and in thousands):



	Guarantor Parent Company			Issuing Subsidiary			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Consolidating and Eliminating Adjustments			Consolidated

Revenues:
Service revenues	$	—		$	1,845,967		$	—		$	—	$	48		$	1,846,015
Equipment revenues	—			143,152			—			—		—			143,152
Other revenues	—			495			70,805			—		(71,300		)	—
Total revenues	—			1,989,614			70,805			—		(71,252		)	1,989,167
Operating expenses:
Cost of service (exclusive of items shown separately below)	—			693,758			—			—		(73,021		)	620,737
Cost of equipment	—			399,367			—			—		—			399,367
Selling and marketing	—			307,275			—			—		—			307,275
General and administrative	10,137			257,978			518			—		1,769			270,402
Depreciation and amortization	—			333,950			—			—		—			333,950
Impairments and other charges	—			476,561			766			—		—			477,327
Total operating expenses	10,137			2,468,889			1,284			—		(71,252		)	2,409,058
Loss on sale or disposal of assets	—			(3,696		)	(168		)	—		—			(3,864		)
Operating income (loss)	(10,137		)	(482,971		)	69,353			—		—			(423,755		)
Equity in net income (loss) of consolidated subsidiaries	(621,163		)	69,353			—			—		551,810			—
Equity in net income of investees, net	—			1,142			—			—		—			1,142
Interest income	18,188			933			—			—		(18,187		)	934
Interest expense	(9,443		)	(189,806		)	—			—		18,187			(181,062		)
Other income, net	—			3,207			—			—		—			3,207
Income (loss) before income taxes	(622,555		)	(598,142		)	69,353			—		551,810			(599,534		)
Income tax expense	—			(18,537		)	—			—		—			(18,537		)
Net income (loss)	(622,555		)	(616,679		)	69,353			—		551,810			(618,071		)
Accretion of redeemable non-controlling interests and distributions, net of tax	—			(4,484		)	—			—		—			(4,484		)
Net income (loss) attributable to common stockholders	$	(622,555	)	$	(621,163	)	$	69,353		$	—	$	551,810		$	(622,555	)

Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2011 (unaudited and in thousands):



	Guarantor Parent Company			Issuing Subsidiary			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated

Operating activities:
Net cash provided by (used in) operating activities	$	5		$	248,616		$	—	$	25,259		$	(5,746	)	$	268,134
Investing activities:
Acquisition of a business	—			(850		)	—		—			—			(850		)
Purchases of property and equipment	—			(276,066		)	—		(13,238		)	—			(289,304		)
Change in prepayments for purchases of property and equipment	—			(2,281		)	—		—			—			(2,281		)
Purchases of wireless licenses and spectrum clearing costs	—			(3,420		)	—		(115		)	—			(3,535		)
Proceeds from sales of wireless licenses and operating assets	—			1,611			—		276			—			1,887
Purchases of investments	—			(521,909		)	—		—			—			(521,909		)
Sales and maturities of investments	—			214,726			—		—			—			214,726
Investments in and advances to affiliates and consolidated subsidiaries	(712		)	—			—		—			712			—
Dividend received from equity investee	—			11,606			—		—			—			11,606
Change in restricted cash	—			(220		)	—		(700		)	—			(920		)
Net cash used in investing activities	(712		)	(576,803		)	—		(13,777		)	712			(590,580		)
Financing activities:
Proceeds from issuance of long-term debt	—			396,772			—		—			—			396,772
Repayment of long-term debt	—			(10,089		)	—		(5,000		)	—			(15,089		)
Payment of debt issuance costs	—			(7,177		)	—		—			—			(7,177		)
Capital contributions, net	—			712			—		—			(712		)	—
Proceeds from issuance of common stock, net	712			—			—		—			—			712
Proceeds from sale lease-back financing	—			25,815			—		—			—			25,815
Other	—			(2,115		)	—		(8,269		)	5,746			(4,638		)
Net cash provided by (used in) financing activities	712			403,918			—		(13,269		)	5,034			396,395
Net increase (decrease) in cash and cash equivalents	5			75,731			—		(1,787		)	—			73,949
Cash and cash equivalents at beginning of period	85			269,140			—		81,565			—			350,790
Cash and cash equivalents at end of period	$	90		$	344,871		$	—	$	79,778		$	—		$	424,739

Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2010 (unaudited and in thousands):



	Guarantor Parent Company			Issuing Subsidiary			Guarantor Subsidiary		Non-Guarantor Subsidiaries		Consolidating and Eliminating Adjustments			Consolidated

Operating activities:
Net cash provided (used in) by operating activities	$	(10	)	$	326,264		$	—	$	—	$	—		$	326,254
Investing activities:
Purchases of property and equipment	—			(298,927		)	—		—		—			(298,927		)
Change in prepayments for purchases of property and equipment	—			57			—		—		—			57
Purchases of wireless licenses and spectrum clearing costs	—			(2,969		)	—		—		—			(2,969		)
Purchases of investments	—			(481,435		)	—		—		—			(481,435		)
Sales and maturities of investments	—			621,449			—		—		—			621,449
Investments in and advances to affiliates and consolidated subsidiaries	(660		)	—			—		—		660			—
Purchase of membership units of equity investment	—			(967		)	—		—		—			(967		)
Change in restricted cash	—			811			—		—		—			811
Net cash used in investing activities	(660		)	(161,981		)	—		—		660			(161,981		)
Financing activities:
Repayment of long-term debt	—			(6,000		)	—		—		—			(6,000		)
Purchase of non-controlling interest	—			(24,161		)	—		—		—			(24,161		)
Capital contributions, net	—			660			—		—		(660		)	—
Proceeds from the issuance of common stock, net	660			—			—		—		—			660
Other	—			(1,476		)	—		—		—			(1,476		)
Net cash provided by (used in) financing activities	660			(30,977		)	—		—		(660		)	(30,977		)
Net increase (decrease) in cash and cash equivalents	(10		)	133,306			—		—		—			133,296
Cash and cash equivalents at beginning of period	66			174,933			—		—		—			174,999
Cash and cash equivalents at end of period	$	56		$	308,239		$	—	$	—	$	—		$	308,295

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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