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Leap Wireless International Management Discusses Q2 2012 Results - Earnings Call Transcript

On the call today to discuss our second quarter results are Doug Hutcheson, Leap's President and Chief Executive Officer; and Jerry Elliott, Leap's Chief Financial Officer. Following our prepared remarks, the call operator will come back on the line for the Q&A portion of the call, and then Doug will return for a few closing remarks.

I'd now like to turn the call over to Doug.

Stewart Douglas Hutcheson

Welcome, and thank you for joining us today. Over the past several months, Leap has been planning and implementing a transition in our business that we believe is fundamentally necessary and will significantly advance our strategy, strengthen our competitiveness and improve our financial performance. This transition is based upon 2 elements: First, over the second half of this year, we will introduce a number of new products, plans and services, and we'll make changes to improve customer experience. Second, we have been looking and continue to look at all options to drive free cash flow, improve margins and optimize the value of our lower performing assets. To some extent, second quarter's results reflect and we expect third quarter results will reflect that we're already in the middle of this transition. Operationally, customer additions did not meet our expectations for reasons we'll explain later in the call. On the financial side, our progress has produced some of the best results in terms of OIBDA and margins, although more progress is essential on this front.

We'll discuss those results in detail shortly, but before I do, I'd like to take a step back to provide you with an overview of how we're looking at our business and responding to the evolving marketplace. As you know, 2 years ago, we refocused our business to provide attractive all-inclusive plans with sophisticated devices such as smartphones and advanced services such as Muve Music that operate over a fast nationwide network. Following that transition, we made dramatic improvements in the business and we continue to believe that it's fundamentally the right strategy. In fact, while we're making some important refinements to our strategy, a lot of what we're seeing in the marketplace is telling us that we're on the right path and need to keep moving forward, albeit with improved execution.

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