Leap Adopts Tax Benefit Preservation Plan

Leap Wireless International, Inc. LEAP announced today that its Board of Directors has adopted a tax benefit preservation plan intended to preserve the long-term value of the Company's net operating loss carryforwards. As of June 30, 2011, Leap had net operating loss carryforwards of approximately $2.3 billion, which could be used to reduce future federal and state income tax obligations. However, the Company's ability to use these NOLs may be substantially limited if it were to experience an "ownership change" as defined under Section 382 of the Internal Revenue Code. In general, an ownership change would occur if stockholders that own (or are deemed to own) at least 5 percent of Leap's outstanding common stock increased their cumulative ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.