##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
 For the quarterly period ended February 29, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission file number 0-19603
 CENTENNIAL COMMUNICATIONS CORP.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    06-1242753(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer
Identification No.)
 3349 Route 138
Wall, NJ 07719  (Address of principal executive offices,
including zip code)
 (732) 556-2200  (Registrants telephone number,
including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



TABLE OF CONTENTS
 Part I  Financial InformationItem 1.
    
    Financial Statements
    
    
    3Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    37Item 4.
    
    Controls and Procedures
    
    
    38Part II  Other InformationItem 1.
    
    Legal Proceedings
    
    
    39Item 1A.
    
    Risk Factors
    
    
    39Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    40Item 3.
    
    Defaults Upon Senior Securities
    
    
    40Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    40Item 5.
    
    Other Information
    
    
    40Item 6.
    
    Exhibits
    
    
    41EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION
  2




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollar amounts in thousands, except share data)
 February 29,
    
    
    May 31,2008
    
    
    2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    84,208
    
    
    $
    94,740Accounts receivable, less allowance for doubtful accounts of $9,462 and $7,571, respectively
    
    
    90,933
    
    
    
    88,292Inventory  phones and accessories, net
    
    
    40,508
    
    
    
    31,624Prepaid expenses and other current assets
    
    
    21,528
    
    
    
    18,257Total Current Assets
    
    
    237,177
    
    
    
    232,913Property, plant and equipment, net
    
    
    578,254
    
    
    
    574,503Debt issuance costs, less accumulated amortization of $28,968 and $25,295, respectively
    
    
    36,578
    
    
    
    42,872Restricted cash
    
    
    6,501
    
    
    
    5,926U.S. wireless licenses
    
    
    402,387
    
    
    
    398,783Puerto Rico wireless licenses, net
    
    
    54,159
    
    
    
    54,159Goodwill
    
    
    4,187
    
    
    
    4,187Cable facility, net
    
    
    3,310
    
    
    
    3,490Customer list, net
    
    
    11,635
    
    
    
    Other assets
    
    
    6,265
    
    
    
    5,148TOTAL ASSETS
    
    $
    1,340,453
    
    
    $
    1,321,981LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIES:Accounts payable
    
    $
    35,037
    
    
    $
    20,839Accrued expenses and other current liabilities
    
    
    181,716
    
    
    
    191,524Payable to affiliates
    
    
    75
    
    
    
    125Total Current Liabilities
    
    
    216,828
    
    
    
    212,488Long-term debt
    
    
    2,008,323
    
    
    
    2,046,565Deferred income taxes
    
    
    135,079
    
    
    
    124,783Other liabilities
    
    
    37,823
    
    
    
    16,523Minority interest in subsidiaries
    
    
    4,785
    
    
    
    4,293Commitments and contingencies (see Note 8)STOCKHOLDERS DEFICIT:Preferred stock, $0.01 par value per share, 10,000,000 shares authorized, no shares issued
or outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value per share, 240,000,000 shares authorized; issued 107,828,625
and 106,899,286 shares, respectively; and outstanding 107,758,122 and 106,828,783 shares,
respectively
    
    
    1,078
    
    
    
    1,069Additional paid-in capital
    
    
    32,451
    
    
    
    19,832Accumulated deficit
    
    
    (1,091,077
    )
    
    
    (1,103,379
    )Accumulated other comprehensive (loss) income
    
    
    (3,760
    )
    
    
    884(1,061,308
    )
    
    
    (1,081,594
    )Less: cost of 70,503 common shares in treasury
    
    
    (1,077
    )
    
    
    (1,077
    )Total Stockholders Deficit
    
    
    (1,062,385
    )
    
    
    (1,082,671
    )TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
    
    $
    1,340,453
    
    
    $
    1,321,981
  3




---



##### Table of Contents



CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedFebruary 29,
    
    
    February 28,
    
    
    February 29,
    
    
    February 28,2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUE:Service revenue
    
    $
    233,361
    
    
    $
    212,434
    
    
    $
    698,457
    
    
    $
    642,213Equipment sales
    
    
    17,792
    
    
    
    16,678
    
    
    
    44,234
    
    
    
    41,502251,153
    
    
    
    229,112
    
    
    
    742,691
    
    
    
    683,715COSTS AND EXPENSES:Cost of services (exclusive of depreciation
and amortization shown below)
    
    
    45,034
    
    
    
    42,388
    
    
    
    135,975
    
    
    
    129,129Cost of equipment sold
    
    
    34,047
    
    
    
    34,852
    
    
    
    95,831
    
    
    
    95,947Sales and marketing
    
    
    25,503
    
    
    
    24,643
    
    
    
    77,817
    
    
    
    71,436General and administrative
    
    
    49,573
    
    
    
    44,481
    
    
    
    149,438
    
    
    
    129,170Depreciation and amortization
    
    
    35,262
    
    
    
    32,624
    
    
    
    102,873
    
    
    
    97,537Loss (gain) on disposition of assets
    
    
    120
    
    
    
    (265
    )
    
    
    1,731
    
    
    
    28189,539
    
    
    
    178,723
    
    
    
    563,665
    
    
    
    523,247Operating income
    
    
    61,614
    
    
    
    50,389
    
    
    
    179,026
    
    
    
    160,468Interest expense, net
    
    
    (47,508
    )
    
    
    (50,540
    )
    
    
    (143,901
    )
    
    
    (152,943
    )Gain on sale of equity investments
    
    
    
    
    
    
    4,730
    
    
    
    
    
    
    
    4,730Income from continuing operations before
income tax expense, minority interest in
income of subsidiaries and income from equity
investments
    
    
    14,106
    
    
    
    4,579
    
    
    
    35,125
    
    
    
    12,255Income tax expense
    
    
    (7,302
    )
    
    
    (4,252
    )
    
    
    (20,270
    )
    
    
    (11,285
    )Income from continuing operations before
minority interest in income of subsidiaries
and income from equity investments
    
    
    6,804
    
    
    
    327
    
    
    
    14,855
    
    
    
    970Minority interest in income of subsidiaries
    
    
    (171
    )
    
    
    (264
    )
    
    
    (492
    )
    
    
    (705
    )Income from equity investments
    
    
    
    
    
    
    258
    
    
    
    
    
    
    
    804Income from continuing operations
    
    
    6,633
    
    
    
    321
    
    
    
    14,363
    
    
    
    1,069Discontinued operations:Gain (loss)
    
    
    
    
    
    
    2,170
    
    
    
    
    
    
    
    (659
    )Loss on disposition
    
    
    (1,218
    )
    
    
    (266
    )
    
    
    (2,257
    )
    
    
    (32,261
    )Income tax expense
    
    
    
    
    
    
    (3,573
    )
    
    
    
    
    
    
    (5,008
    )Net loss from discontinued operations
    
    
    (1,218
    )
    
    
    (1,669
    )
    
    
    (2,257
    )
    
    
    (37,928
    )Net income (loss)
    
    $
    5,415
    
    
    $
    (1,348
    )
    
    $
    12,106
    
    
    $
    (36,859
    )Earnings (loss) per share:BasicEarnings per share from continuing operations
    
    $
    0.06
    
    
    $
    0.00
    
    
    $
    0.13
    
    
    $
    0.01Loss per share from discontinued operations
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.02
    )
    
    
    (0.36
    )Net income (loss) per share
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    0.11
    
    
    $
    (0.35
    )DilutedEarnings per share from continuing operations
    
    $
    0.06
    
    
    $
    0.00
    
    
    $
    0.13
    
    
    $
    0.01Loss per share from discontinued operations
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.02
    )
    
    
    (0.35
    )Net income (loss) per share
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    0.11
    
    
    $
    (0.34
    )Weighted-average number of shares outstanding:Basic
    
    
    107,755
    
    
    
    105,698
    
    
    
    107,457
    
    
    
    105,437Diluted
    
    
    109,987
    
    
    
    108,637
    
    
    
    110,240
    
    
    
    107,786
  4




---



##### Table of Contents



CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
 Nine Months EndedFebruary 29,
    
    
    February 28,2008
    
    
    2007OPERATING ACTIVITIES:Net income (loss)
    
    $
    12,106
    
    
    $
    (36,859
    )Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    102,873
    
    
    
    104,704Stock-based compensation
    
    
    8,548
    
    
    
    7,211Excess tax benefits from stock-based compensation
    
    
    (1,113
    )
    
    
    (224
    )Minority interest in income of subsidiaries
    
    
    492
    
    
    
    705Income from equity investments
    
    
    
    
    
    
    (804
    )Distributions received from equity investments
    
    
    
    
    
    
    386Loss on disposition of assets
    
    
    3,988
    
    
    
    32,244Gain on sale of equity investment
    
    
    
    
    
    
    (4,730
    )Changes in assets and liabilities
    
    
    (5,000
    )
    
    
    (3,692
    )Net cash provided by operating activities
    
    
    121,894
    
    
    
    98,941INVESTING ACTIVITIES:Proceeds from disposition of assets, net of cash expenses
    
    
    91
    
    
    
    322Acquisition of minority interest, net
    
    
    
    
    
    
    (2,500
    )Payment for acquisition, net of cash acquired
    
    
    (12,519
    )
    
    
    Payment for purchase of wireless spectrum
    
    
    (3,604
    )
    
    
    (14,920
    )Payment from sales of equity investment
    
    
    
    
    
    
    7,100Capital expenditures
    
    
    (75,595
    )
    
    
    (78,352
    )Net cash used in investing activities
    
    
    (91,627
    )
    
    
    (88,350
    )FINANCING ACTIVITIES:Repayment of debt
    
    
    (46,417
    )
    
    
    (21,334
    )Debt issuance costs paid
    
    
    
    
    
    
    (562
    )Proceeds from the exercise of stock options
    
    
    4,209
    
    
    
    2,264Proceeds from issuance of common stock under employee stock purchase plan
    
    
    296
    
    
    
    461Excess tax benefits from stock-based compensation
    
    
    1,113
    
    
    
    224Net cash used in financing activities
    
    
    (40,799
    )
    
    
    (18,947
    )Net decrease in cash and cash equivalents
    
    
    (10,532
    )
    
    
    (8,356
    )Cash and cash equivalents, beginning of period
    
    
    94,740
    
    
    
    94,884Cash and cash equivalents, end of period
    
    $
    84,208
    
    
    $
    86,528SUPPLEMENTAL CASH FLOW DISCLOSURE:Cash paid during the period for:Interest
    
    $
    156,340
    
    
    $
    165,726Income taxes
    
    $
    10,048
    
    
    $
    4,991NON-CASH TRANSACTION:Fixed assets acquired under capital leases
    
    $
    6,021
    
    
    $
    6,962Acquisition of fixed assets
    
    $
    4,140
    
    
    $
    Acquisition of minority interest included in accrued expenses and other current liabilities
    
    $
    
    
    
    $
    1,000
  5




---



##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollar amounts in thousands, except per share amounts)
 NOTE 1. INTERIM FINANCIAL STATEMENTS
  NOTE 2. OTHER INTANGIBLE ASSETS AND GOODWILL
 Other Intangible Assets
  ImpairmentAs of
    
    
    Assets
    
    
    Loss
    
    
    As ofJune 1, 2007
    
    
    Acquired
    
    
    Recognized
    
    
    February 29, 2008U.S. wireless licenses
    
    $
    398,783
    
    
    $
    3,604
    
    
    $
    
    
    
    $
    402,387Puerto Rico wireless licenses
    
    
    54,159
    
    
    
    
    
    
    
    
    
    
    
    54,159Total
    
    $
    452,942
    
    
    $
    3,604
    
    
    $
    
    
    
    $
    456,546
  Goodwill and Other Intangible Assets
   6




---



##### Table of Contents



Disclosures about Segments of an
Enterprise and Related Information
   As of February 29, 2008
    
    As of May 31, 2007Estimated
    
    Gross
    
    
    
    
    
    GrossUseful
    
    Carrying
    
    Accumulated
    
    Carrying
    
    AccumulatedLife
    
    Amount
    
    Amortization
    
    Amount
    
    AmortizationCable facility
    
    25 years
    
    
    6,000
    
    
    
    2,690
    
    
    
    6,000
    
    
    
    2,510Customer lists
    
    10 years
    
    
    12,085
    
    
    
    450
    
    
    
    
    
    
    
    
  Goodwill
  NOTE 3. DEBT
  As of
    
    
    As ofFebruary 29, 2008
    
    
    May 31, 2007Senior Secured Credit Facility  Term Loans
    
    $
    550,000
    
    
    $
    550,0008 1/8% Senior Unsecured Notes due 2014
    
    
    325,000
    
    
    
    325,00010 1/8% Senior Unsecured Notes due 2013
    
    
    500,000
    
    
    
    500,000Senior Unsecured Holdco Floating Rate Notes due
2013, net of unamortized discount of $2,412 and
$2,785, respectively
    
    
    347,588
    
    
    
    347,21510% Senior Unsecured Holdco Fixed Rate Notes due 2013
    
    
    200,000
    
    
    
    200,00010 3/4% Senior Subordinated Notes due 2008
    
    
    
    
    
    
    45,000Capital Lease Obligations
    
    
    73,832
    
    
    
    67,128Financing Obligation  Tower Sale
    
    
    11,903
    
    
    
    12,222Total Long-Term Debt
    
    
    2,008,323
    
    
    
    2,046,565Current Portion of Long-Term Debt
    
    
    
    
    
    
    Net Long-Term Debt
    
    $
    2,008,323
    
    
    $
    2,046,565
 Senior Secured Credit Facility
  7




---



##### Table of Contents



High-Yield Notes
     Derivative Financial Instruments
   8




---



##### Table of Contents



February 28, 2009
    
    $
    February 28, 2010
    
    
    February 28, 2011
    
    
    549,642February 29, 2012
    
    
    160February 28, 2013
    
    
    550,418February 28, 2014 and thereafter
    
    
    910,5152,010,735Unamortized discount
    
    
    (2,412
    )$
    2,008,323
  NOTE 4. TAXES
 Accounting for Income Taxes Interim Financial Reporting Accounting for Income Taxes in Interim
Periods  An Interpretation of APB Opinion No. 28
 9




---



##### Table of Contents



Accounting
for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
      NOTE 5. DISCONTINUED OPERATIONS
 Accounting for the Impairment or Disposal of Long-Lived Assets
  Three Months Ended
    
    
    Nine Months EndedFebruary 29, 2008
    
    
    February 28, 2007
    
    
    February 29, 2008
    
    
    February 28, 2007Revenue
    
    $
    
    
    
    $
    18,505
    
    
    $
    
    
    
    $
    55,941Income (loss) from discontinued operations
    
    
    
    
    
    
    2,170
    
    
    
    
    
    
    
    (659
    )Loss on disposition
    
    
    (1,218
    )
    
    
    (266
    )
    
    
    (2,257
    )
    
    
    (32,261
    )Income tax expense
    
    
    
    
    
    
    (3,573
    )
    
    
    
    
    
    
    (5,008
    )Net loss from discontinued operations
    
    $
    (1,218
    )
    
    $
    (1,669
    )
    
    $
    (2,257
    )
    
    $
    (37,928
    )
 10




---



##### Table of Contents



NOTE 6. RECENT ACCOUNTING PRONOUNCEMENTS
 Disclosures about Derivative Instruments and
Hedging Activities
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Business Combinations
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of SFAS 115 Fair Value Measurement
  Accounting
for Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary
for an End-Customer to Receive Service from the Service Provider
 NOTE 7. ACQUISITIONS AND DISPOSITIONS
 11




---



##### Table of Contents



Preliminary Purchase Price Allocation
 Business Combinations
  Current assets
    
    $
    561Property, plant and equipment, net
    
    
    3,431Customer lists
    
    
    12,085Deferred tax asset
    
    
    2,596Total Assets Acquired
    
    
    18,673Current liabilities assumed
    
    
    3,050Deferred tax liability
    
    
    2,410Net assets acquired
    
    $
    13,213
   NOTE 8. COMMITMENTS AND CONTINGENCIES
 Legal Proceedings:
   12




---



##### Table of Contents



Guarantees:
  Lease Commitments:
   Other Commitments and Contingencies:
 13




---



##### Table of Contents



14




---



##### Table of Contents



NOTE 9. SEGMENT INFORMATION
    Three Months Ended
    
    
    Nine Months EndedFebruary 29, 2008
    
    
    February 28, 2007
    
    
    February 29, 2008
    
    
    February 28, 2007U.S. WIRELESSService revenue
    
    $
    111,619
    
    
    $
    99,612
    
    
    $
    329,756
    
    
    $
    287,231Roaming revenue
    
    
    12,526
    
    
    
    14,195
    
    
    
    44,711
    
    
    
    50,510Equipment sales
    
    
    13,657
    
    
    
    12,680
    
    
    
    33,746
    
    
    
    30,681Total revenue
    
    
    137,802
    
    
    
    126,487
    
    
    
    408,213
    
    
    
    368,422Adjusted operating income
    
    
    50,497
    
    
    
    44,713
    
    
    
    155,008
    
    
    
    130,453Total assets
    
    
    1,795,918
    
    
    
    1,865,120
    
    
    
    1,795,918
    
    
    
    1,865,120Capital expenditures
    
    
    16,156
    
    
    
    17,898
    
    
    
    34,974
    
    
    
    34,443PUERTO RICO WIRELESSService revenue
    
    $
    76,708
    
    
    $
    70,428
    
    
    $
    229,893
    
    
    $
    217,139Roaming revenue
    
    
    1,838
    
    
    
    783
    
    
    
    4,437
    
    
    
    3,682Equipment sales
    
    
    4,135
    
    
    
    3,998
    
    
    
    10,488
    
    
    
    10,821Total revenue
    
    
    82,681
    
    
    
    75,209
    
    
    
    244,818
    
    
    
    231,642Adjusted operating income
    
    
    30,958
    
    
    
    23,600
    
    
    
    86,846
    
    
    
    83,462Total assets
    
    
    262,800
    
    
    
    309,363
    
    
    
    262,800
    
    
    
    309,363Capital expenditures
    
    
    10,264
    
    
    
    10,558
    
    
    
    27,022
    
    
    
    25,354PUERTO RICO BROADBANDSwitched revenue
    
    $
    13,905
    
    
    $
    13,114
    
    
    $
    41,284
    
    
    $
    40,550Dedicated revenue
    
    
    18,384
    
    
    
    15,815
    
    
    
    52,185
    
    
    
    45,620Other revenue
    
    
    1,630
    
    
    
    1,407
    
    
    
    5,460
    
    
    
    6,308Total revenue
    
    
    33,919
    
    
    
    30,336
    
    
    
    98,929
    
    
    
    92,478Adjusted operating income
    
    
    17,653
    
    
    
    16,286
    
    
    
    53,274
    
    
    
    51,072Total assets
    
    
    218,724
    
    
    
    170,956
    
    
    
    218,724
    
    
    
    170,956Capital expenditures
    
    
    3,753
    
    
    
    6,355
    
    
    
    13,599
    
    
    
    14,847ELIMINATIONS/ADJUSTMENTSTotal revenue(1)
    
    $
    (3,249
    )
    
    $
    (2,920
    )
    
    $
    (9,269
    )
    
    $
    (8,827
    )Total assets(2)(3)
    
    
    (936,989
    )
    
    
    (952,415
    )
    
    
    (936,989
    )
    
    
    (952,415
    )CONSOLIDATEDTotal revenue
    
    $
    251,153
    
    
    $
    229,112
    
    
    $
    742,691
    
    
    $
    683,715Adjusted operating income
    
    
    99,108
    
    
    
    84,599
    
    
    
    295,128
    
    
    
    264,987Total assets
    
    
    1,340,453
    
    
    
    1,393,024
    
    
    
    1,340,453
    
    
    
    1,393,024Capital expenditures
    
    
    30,173
    
    
    
    34,811
    
    
    
    75,595
    
    
    
    74,644
 15




---



##### Table of Contents



(1)
    
    Elimination of intercompany revenue, primarily from Puerto Rico
broadband to Puerto Rico wireless.(2)
    
    Elimination of intercompany investments.(3)
    
    Includes assets held for sale of $96,762 as of February 28, 2007.  Three Months Ended
    
    
    Nine Months EndedFebruary 29, 2008
    
    
    February 28, 2007
    
    
    February 29, 2008
    
    
    February 28, 2007Adjusted operating income
    
    $
    99,108
    
    
    $
    84,599
    
    
    $
    295,128
    
    
    $
    264,987Depreciation and amortization
    
    
    (35,262
    )
    
    
    (32,624
    )
    
    
    (102,873
    )
    
    
    (97,537
    )Stock-based compensation expense
    
    
    (2,112
    )
    
    
    (1,851
    )
    
    
    (8,548
    )
    
    
    (6,669
    )Strategic alternatives/recapitalization costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (285
    )Litigation settlement expense
    
    
    
    
    
    
    
    
    
    
    (2,950
    )
    
    
    (Loss) gain on disposition of assets
    
    
    (120
    )
    
    
    265
    
    
    
    (1,731
    )
    
    
    (28
    )Operating income
    
    
    61,614
    
    
    
    50,389
    
    
    
    179,026
    
    
    
    160,468Interest expense, net
    
    
    (47,508
    )
    
    
    (50,540
    )
    
    
    (143,901
    )
    
    
    (152,943
    )Gain on sale of equity investments
    
    
    
    
    
    
    4,730
    
    
    
    
    
    
    
    4,730Income tax expense
    
    
    (7,302
    )
    
    
    (4,252
    )
    
    
    (20,270
    )
    
    
    (11,285
    )Minority interest in income of subsidiaries
    
    
    (171
    )
    
    
    (264
    )
    
    
    (492
    )
    
    
    (705
    )Income from equity investments
    
    
    
    
    
    
    258
    
    
    
    
    
    
    
    804Income from continuing operations
    
    
    6,633
    
    
    
    321
    
    
    
    14,363
    
    
    
    1,069Loss from discontinued operations
    
    
    (1,218
    )
    
    
    (1,669
    )
    
    
    (2,257
    )
    
    
    (37,928
    )Net income (loss)
    
    $
    5,415
    
    
    $
    (1,348
    )
    
    $
    12,106
    
    
    $
    (36,859
    )
 NOTE 10. CONDENSED CONSOLIDATING FINANCIAL DATA
  16




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEET FINANCIAL DATA
As of February 29, 2008
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    Subsidiaries(Amounts in thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    30,060
    
    
    $
    
    
    
    $
    54,148
    
    
    $
    
    
    
    $
    
    
    
    $
    84,208Accounts receivable, net
    
    
    44,516
    
    
    
    
    
    
    
    46,417
    
    
    
    
    
    
    
    
    
    
    
    90,933Inventory  phones and accessories, net
    
    
    12,780
    
    
    
    
    
    
    
    27,728
    
    
    
    
    
    
    
    
    
    
    
    40,508Prepaid expenses and other current assets
    
    
    14,862
    
    
    
    
    
    
    
    6,666
    
    
    
    
    
    
    
    
    
    
    
    21,528Total current assets
    
    
    102,218
    
    
    
    
    
    
    
    134,959
    
    
    
    
    
    
    
    
    
    
    
    237,177Property, plant & equipment, net
    
    
    252,616
    
    
    
    
    
    
    
    325,638
    
    
    
    
    
    
    
    
    
    
    
    578,254Debt issuance costs
    
    
    13,156
    
    
    
    
    
    
    
    23,422
    
    
    
    
    
    
    
    
    
    
    
    36,578Restricted Cash
    
    
    6,501
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,501U.S. wireless licenses
    
    
    
    
    
    
    
    
    
    
    402,387
    
    
    
    
    
    
    
    
    
    
    
    402,387Puerto Rico wireless licenses, net
    
    
    
    
    
    
    
    
    
    
    54,159
    
    
    
    
    
    
    
    
    
    
    
    54,159Goodwill
    
    
    4,187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,187Investment in subsidiaries
    
    
    
    
    
    
    946,590
    
    
    
    602,893
    
    
    
    (751,049
    )
    
    
    (798,434
    )
    
    
    Other assets, net
    
    
    17,753
    
    
    
    
    
    
    
    3,457
    
    
    
    
    
    
    
    
    
    
    
    21,210Total
    
    $
    396,431
    
    
    $
    946,590
    
    
    $
    1,546,915
    
    
    $
    (751,049
    )
    
    $
    (798,434
    )
    
    $
    1,340,453LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Accounts payable
    
    $
    14,144
    
    
    $
    
    
    
    $
    20,893
    
    
    $
    
    
    
    $
    
    
    
    $
    35,037Accrued expenses and other current liabilities
    
    
    97,618
    
    
    
    
    
    
    
    84,098
    
    
    
    
    
    
    
    
    
    
    
    181,716Payable to affiliates
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    75Total current liabilities
    
    
    111,762
    
    
    
    
    
    
    
    105,066
    
    
    
    
    
    
    
    
    
    
    
    216,828Long-term debt
    
    
    793,138
    
    
    
    591,395
    
    
    
    547,588
    
    
    
    76,202
    
    
    
    
    
    
    
    2,008,323Deferred income taxes
    
    
    1,549
    
    
    
    
    
    
    
    133,530
    
    
    
    
    
    
    
    
    
    
    
    135,079Other liabilities
    
    
    8,582
    
    
    
    
    
    
    
    29,241
    
    
    
    
    
    
    
    
    
    
    
    37,823Intercompany
    
    
    3,942
    
    
    
    1,087,184
    
    
    
    625,582
    
    
    
    231,374
    
    
    
    (1,948,082
    )
    
    
    Minority interest in subsidiaries
    
    
    
    
    
    
    
    
    
    
    4,785
    
    
    
    
    
    
    
    
    
    
    
    4,785Redeemable preferred stock
    
    
    615,838
    
    
    
    
    
    
    
    (9,300
    )
    
    
    
    
    
    
    (606,538
    )
    
    
    Stockholders (deficit) equity:Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,078
    
    
    
    
    
    
    
    1,078Additional paid-in capital
    
    
    (818,497
    )
    
    
    
    
    
    
    818,497
    
    
    
    32,451
    
    
    
    
    
    
    
    32,451Accumulated (deficit) equity
    
    
    (318,571
    )
    
    
    (731,989
    )
    
    
    (705,626
    )
    
    
    (1,091,077
    )
    
    
    1,756,186
    
    
    
    (1,091,077
    )Accumulated other comprehensive income
    
    
    (1,312
    )
    
    
    
    
    
    
    (2,448
    )
    
    
    
    
    
    
    
    
    
    
    (3,760
    )(1,138,380
    )
    
    
    (731,989
    )
    
    
    110,423
    
    
    
    (1,057,548
    )
    
    
    1,756,186
    
    
    
    (1,061,308
    )Less: treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,077
    )
    
    
    
    
    
    
    (1,077
    )Total stockholders (deficit) equity
    
    
    (1,138,380
    )
    
    
    (731,989
    )
    
    
    110,423
    
    
    
    (1,058,625
    )
    
    
    1,756,186
    
    
    
    (1,062,385
    )Total
    
    $
    396,431
    
    
    $
    946,590
    
    
    $
    1,546,915
    
    
    $
    (751,049
    )
    
    $
    (798,434
    )
    
    $
    1,340,453
 17




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
For the Nine Months Ended February 29, 2008
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    Subsidiaries(Amounts in thousands)Revenue
    
    $
    315,574
    
    
    $
    
    
    
    $
    436,386
    
    
    $
    
    
    
    $
    (9,269
    )
    
    $
    742,691Costs and expenses:Cost of services (exclusive of depreciation
and amortization shown below)
    
    
    60,500
    
    
    
    
    
    
    
    84,240
    
    
    
    
    
    
    
    (8,765
    )
    
    
    135,975Cost of equipment sold
    
    
    25,814
    
    
    
    
    
    
    
    70,017
    
    
    
    
    
    
    
    
    
    
    
    95,831Sales and marketing
    
    
    31,343
    
    
    
    
    
    
    
    46,474
    
    
    
    
    
    
    
    
    
    
    
    77,817General and administrative
    
    
    74,487
    
    
    
    
    
    
    
    75,455
    
    
    
    
    
    
    
    (504
    )
    
    
    149,438Depreciation and amortization
    
    
    51,242
    
    
    
    
    
    
    
    51,631
    
    
    
    
    
    
    
    
    
    
    
    102,873Loss on disposition of assets
    
    
    787
    
    
    
    
    
    
    
    944
    
    
    
    
    
    
    
    
    
    
    
    1,731244,173
    
    
    
    
    
    
    
    328,761
    
    
    
    
    
    
    
    (9,269
    )
    
    
    563,665Operating income
    
    
    71,401
    
    
    
    
    
    
    
    107,625
    
    
    
    
    
    
    
    
    
    
    
    179,026Income (loss) from investments in subsidiaries
    
    
    
    
    
    
    12,106
    
    
    
    (8,497
    )
    
    
    12,106
    
    
    
    (15,715
    )
    
    
    Interest expense, net
    
    
    (79,543
    )
    
    
    (40,939
    )
    
    
    (6,822
    )
    
    
    (44,497
    )
    
    
    27,900
    
    
    
    (143,901
    )Intercompany interest allocation
    
    
    
    
    
    
    40,939
    
    
    
    (57,536
    )
    
    
    44,497
    
    
    
    (27,900
    )
    
    
    (Loss) income from continuing operations
before income tax expense, minority interest
in income of subsidiaries and income from
equity investments
    
    
    (8,142
    )
    
    
    12,106
    
    
    
    34,770
    
    
    
    12,106
    
    
    
    (15,715
    )
    
    
    35,125Income tax expense
    
    
    (355
    )
    
    
    
    
    
    
    (19,915
    )
    
    
    
    
    
    
    
    
    
    
    (20,270
    )(Loss) income from continuing operations
before minority interest in income of
subsidiaries and income from equity
investments
    
    
    (8,497
    )
    
    
    12,106
    
    
    
    14,855
    
    
    
    12,106
    
    
    
    (15,715
    )
    
    
    14,855Minority interest in income of subsidiaries
    
    
    
    
    
    
    
    
    
    
    (492
    )
    
    
    
    
    
    
    
    
    
    
    (492
    )(Loss) income from continuing operations
    
    
    (8,497
    )
    
    
    12,106
    
    
    
    14,363
    
    
    
    12,106
    
    
    
    (15,715
    )
    
    
    14,363Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (2,257
    )
    
    
    
    
    
    
    
    
    
    
    (2,257
    )Net (loss) income
    
    $
    (8,497
    )
    
    $
    12,106
    
    
    $
    12,106
    
    
    $
    12,106
    
    
    $
    (15,715
    )
    
    $
    12,106
 18




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
For the Nine Months Ended February 29, 2008
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    Subsidiaries(Amounts in thousands)OPERATING ACTIVITIES:Net (loss) income
    
    $
    (8,497
    )
    
    $
    12,106
    
    
    $
    12,106
    
    
    $
    12,106
    
    
    $
    (15,715
    )
    
    $
    12,106Adjustments to reconcile net (loss) income
to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    51,242
    
    
    
    
    
    
    
    51,631
    
    
    
    
    
    
    
    
    
    
    
    102,873Stock-based compensation expense
    
    
    4,338
    
    
    
    
    
    
    
    4,210
    
    
    
    
    
    
    
    
    
    
    
    8,548Excess tax benefit from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (1,113
    )
    
    
    
    
    
    
    
    
    
    
    (1,113
    )Minority interest in income of subsidiaries
    
    
    
    
    
    
    
    
    
    
    492
    
    
    
    
    
    
    
    
    
    
    
    492Equity in undistributed earnings (loss) of
subsidiaries
    
    
    
    
    
    
    12,106
    
    
    
    (8,497
    )
    
    
    12,106
    
    
    
    (15,715
    )
    
    
    Loss on disposition of assets
    
    
    787
    
    
    
    
    
    
    
    3,201
    
    
    
    
    
    
    
    
    
    
    
    3,988Changes in assets and liabilities, net of
effects of acquisitions and dispositions
and other
    
    
    (3,276
    )
    
    
    104,991
    
    
    
    (594,404
    )
    
    
    428,359
    
    
    
    59,330
    
    
    
    (5,000
    )NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
    
    
    44,594
    
    
    
    129,203
    
    
    
    (532,374
    )
    
    
    452,571
    
    
    
    27,900
    
    
    
    121,894INVESTING ACTIVITIES:Proceeds from disposition of assets, net
of cash expenses
    
    
    72
    
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    91Payment for acquisition
    
    
    (12,519
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,519
    )Payments for purchase of wireless spectrum
    
    
    
    
    
    
    (3,604
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,604
    )Capital expenditures
    
    
    (40,621
    )
    
    
    (34,974
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75,595
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    (53,068
    )
    
    
    (38,559
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91,627
    )FINANCING ACTIVITIES:Repayment of debt
    
    
    
    
    
    
    (45,000
    )
    
    
    (1,417
    )
    
    
    
    
    
    
    
    
    
    
    (46,417
    )Proceeds from the exercise of employee
stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,209
    
    
    
    
    
    
    
    4,209Excess tax benefit from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,113
    
    
    
    
    
    
    
    1,113Proceeds from issuance of common stock
under employee stock purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    296
    
    
    
    
    
    
    
    296Cash received from (paid to) affiliates
    
    
    7,377
    
    
    
    (45,644
    )
    
    
    524,356
    
    
    
    (458,189
    )
    
    
    (27,900
    )
    
    
    NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
    
    
    7,377
    
    
    
    (90,644
    )
    
    
    522,939
    
    
    
    (452,571
    )
    
    
    (27,900
    )
    
    
    (40,799
    )NET DECREASE IN CASH AND CASH
EQUIVALENTS
    
    
    (1,097
    )
    
    
    
    
    
    
    (9,435
    )
    
    
    
    
    
    
    
    
    
    
    (10,532
    )CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
    
    
    31,157
    
    
    
    
    
    
    
    63,583
    
    
    
    
    
    
    
    
    
    
    
    94,740CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    30,060
    
    
    $
    
    
    
    $
    54,148
    
    
    $
    
    
    
    $
    
    
    
    $
    84,208
 19




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEET FINANCIAL DATA
As of May 31, 2007
(Amounts in thousands)
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    SubsidiariesASSETSCurrent assets:Cash and cash equivalents
    
    $
    31,157
    
    
    $
    
    
    
    $
    63,583
    
    
    $
    
    
    
    $
    
    
    
    $
    94,740Accounts receivable, net
    
    
    41,999
    
    
    
    
    
    
    
    46,293
    
    
    
    
    
    
    
    
    
    
    
    88,292Inventory  phones and accessories, net
    
    
    11,641
    
    
    
    
    
    
    
    19,983
    
    
    
    
    
    
    
    
    
    
    
    31,624Prepaid expenses and other current assets
    
    
    11,856
    
    
    
    
    
    
    
    6,401
    
    
    
    
    
    
    
    
    
    
    
    18,257Total current assets
    
    
    96,653
    
    
    
    
    
    
    
    136,260
    
    
    
    
    
    
    
    
    
    
    
    232,913Property, plant & equipment, net
    
    
    249,297
    
    
    
    
    
    
    
    325,206
    
    
    
    
    
    
    
    
    
    
    
    574,503Debt issuance costs
    
    
    15,288
    
    
    
    
    
    
    
    27,584
    
    
    
    
    
    
    
    
    
    
    
    42,872Restricted cash
    
    
    5,926
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,926U.S. wireless licenses
    
    
    
    
    
    
    
    
    
    
    398,783
    
    
    
    
    
    
    
    
    
    
    
    398,783Puerto Rico wireless licenses, net
    
    
    
    
    
    
    
    
    
    
    54,159
    
    
    
    
    
    
    
    
    
    
    
    54,159Goodwill
    
    
    4,187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,187Investment in subsidiaries
    
    
    
    
    
    
    934,484
    
    
    
    611,390
    
    
    
    (763,155
    )
    
    
    (782,719
    )
    
    
    Other assets
    
    
    5,777
    
    
    
    
    
    
    
    2,861
    
    
    
    
    
    
    
    
    
    
    
    8,638Total
    
    $
    377,128
    
    
    $
    934,484
    
    
    $
    1,556,243
    
    
    $
    (763,155
    )
    
    $
    (782,719
    )
    
    $
    1,321,981LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Accounts payable
    
    $
    14,183
    
    
    $
    
    
    
    $
    6,656
    
    
    $
    
    
    
    $
    
    
    
    $
    20,839Accrued expenses and other current liabilities
    
    
    89,143
    
    
    
    
    
    
    
    102,381
    
    
    
    
    
    
    
    
    
    
    
    191,524Payable to affiliates
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    125Total current liabilities
    
    
    103,326
    
    
    
    
    
    
    
    109,162
    
    
    
    
    
    
    
    
    
    
    
    212,488Long-term debt
    
    
    792,985
    
    
    
    636,395
    
    
    
    69,970
    
    
    
    547,215
    
    
    
    
    
    
    
    2,046,565Deferred income taxes
    
    
    4,422
    
    
    
    
    
    
    
    120,361
    
    
    
    
    
    
    
    
    
    
    
    124,783Other liabilities
    
    
    5,469
    
    
    
    
    
    
    
    11,054
    
    
    
    
    
    
    
    
    
    
    
    16,523Intercompany
    
    
    11,319
    
    
    
    1,041,540
    
    
    
    1,149,938
    
    
    
    (226,815
    )
    
    
    (1,975,982
    )
    
    
    Minority interest in subsidiaries
    
    
    
    
    
    
    
    
    
    
    4,293
    
    
    
    
    
    
    
    
    
    
    
    4,293Redeemable preferred stock
    
    
    587,938
    
    
    
    
    
    
    
    (9,300
    )
    
    
    
    
    
    
    (578,638
    )
    
    
    Stockholders (deficit) equity:Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,069
    
    
    
    
    
    
    
    1,069Additional paid-in capital
    
    
    (818,497
    )
    
    
    
    
    
    
    818,497
    
    
    
    19,832
    
    
    
    
    
    
    
    19,832Accumulated (deficit) equity
    
    
    (310,074
    )
    
    
    (744,095
    )
    
    
    (717,732
    )
    
    
    (1,103,379
    )
    
    
    1,771,901
    
    
    
    (1,103,379
    )Accumulated other comprehensive loss
    
    
    240
    
    
    
    644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    884(1,128,331
    )
    
    
    (743,451
    )
    
    
    100,765
    
    
    
    (1,082,478
    )
    
    
    1,771,901
    
    
    
    (1,081,594
    )Less: treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,077
    )
    
    
    
    
    
    
    (1,077
    )Total stockholders (deficit) equity
    
    
    (1,128,331
    )
    
    
    (743,451
    )
    
    
    100,765
    
    
    
    (1,083,555
    )
    
    
    1,771,901
    
    
    
    (1,082,671
    )Total
    
    $
    377,128
    
    
    $
    934,484
    
    
    $
    1,556,243
    
    
    $
    (763,155
    )
    
    $
    (782,719
    )
    
    $
    1,321,981
 20




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
For the Nine Months Ended February 28, 2007
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    Subsidiaries(Amounts in thousands)Revenue
    
    $
    297,092
    
    
    $
    
    
    
    $
    389,893
    
    
    $
    
    
    
    $
    (3,270
    )
    
    $
    683,715Costs and expenses:Cost of services (exclusive of depreciation
and amortization shown below)
    
    
    27,924
    
    
    
    
    
    
    
    102,920
    
    
    
    
    
    
    
    (1,715
    )
    
    
    129,129Cost of equipment sold
    
    
    33,075
    
    
    
    
    
    
    
    62,872
    
    
    
    
    
    
    
    
    
    
    
    95,947Sales and marketing
    
    
    29,861
    
    
    
    
    
    
    
    41,575
    
    
    
    
    
    
    
    
    
    
    
    71,436General and administrative
    
    
    85,018
    
    
    
    
    
    
    
    45,707
    
    
    
    
    
    
    
    (1,555
    )
    
    
    129,170Depreciation and amortization
    
    
    49,339
    
    
    
    
    
    
    
    48,198
    
    
    
    
    
    
    
    
    
    
    
    97,537Loss (gain) on disposition of assets
    
    
    896
    
    
    
    
    
    
    
    (868
    )
    
    
    
    
    
    
    
    
    
    
    28226,113
    
    
    
    
    
    
    
    300,404
    
    
    
    
    
    
    
    (3,270
    )
    
    
    523,247Operating income
    
    
    70,979
    
    
    
    
    
    
    
    89,489
    
    
    
    
    
    
    
    
    
    
    
    160,468(Loss) income from investments in subsidiaries
    
    
    
    
    
    
    (36,859
    )
    
    
    (19,494
    )
    
    
    (36,859
    )
    
    
    93,212
    
    
    
    Interest expense, net
    
    
    (78,249
    )
    
    
    (51,869
    )
    
    
    49,574
    
    
    
    (44,499
    )
    
    
    (27,900
    )
    
    
    (152,943
    )Gain on sale of equity investments
    
    
    
    
    
    
    
    
    
    
    4,730
    
    
    
    
    
    
    
    
    
    
    
    4,730Other (expense) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Intercompany interest allocation
    
    
    
    
    
    
    51,869
    
    
    
    (124,268
    )
    
    
    44,499
    
    
    
    27,900
    
    
    
    (Loss) income from continuing operations
before income tax expense, minority interest
in income of subsidiaries and income from
equity investments
    
    
    (7,270
    )
    
    
    (36,859
    )
    
    
    31
    
    
    
    (36,859
    )
    
    
    93,212
    
    
    
    12,255Income tax (expense) benefit
    
    
    (12,224
    )
    
    
    
    
    
    
    939
    
    
    
    
    
    
    
    
    
    
    
    (11,285
    )(Loss) income from continuing operations
before minority interest in income of
subsidiaries and income from equity
investments
    
    
    (19,494
    )
    
    
    (36,859
    )
    
    
    970
    
    
    
    (36,859
    )
    
    
    93,212
    
    
    
    970Minority interest in income of subsidiaries
    
    
    
    
    
    
    
    
    
    
    (705
    )
    
    
    
    
    
    
    
    
    
    
    (705
    )Income from equity investments
    
    
    
    
    
    
    
    
    
    
    804
    
    
    
    
    
    
    
    
    
    
    
    804(Loss) income from continuing operations
    
    
    (19,494
    )
    
    
    (36,859
    )
    
    
    1,069
    
    
    
    (36,859
    )
    
    
    93,212
    
    
    
    1,069Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (37,928
    )
    
    
    
    
    
    
    
    
    
    
    (37,928
    )Net (loss) income
    
    $
    (19,494
    )
    
    $
    (36,859
    )
    
    $
    (36,859
    )
    
    $
    (36,859
    )
    
    $
    93,212
    
    
    $
    (36,859
    )
 21




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
For the Nine Months Ended February 28, 2007
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    Subsidiaries(Amounts in thousands)OPERATING ACTIVITIES:Net (loss) income
    
    
    (19,494
    )
    
    
    (36,859
    )
    
    
    (36,859
    )
    
    
    (36,859
    )
    
    
    93,212
    
    
    
    (36,859
    )Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    49,339
    
    
    
    
    
    
    
    55,365
    
    
    
    
    
    
    
    
    
    
    
    104,704Stock-based compensation expense
    
    
    3,426
    
    
    
    
    
    
    
    3,785
    
    
    
    
    
    
    
    
    
    
    
    7,211Excess tax benefit from stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    
    
    
    
    (224
    )Minority interest in income of subsidiaries
    
    
    
    
    
    
    
    
    
    
    705
    
    
    
    
    
    
    
    
    
    
    
    705Income from equity investments
    
    
    
    
    
    
    
    
    
    
    (804
    )
    
    
    
    
    
    
    
    
    
    
    (804
    )Equity in undistributed (loss) earnings of
subsidiaries
    
    
    
    
    
    
    (36,859
    )
    
    
    (19,494
    )
    
    
    (36,859
    )
    
    
    93,212
    
    
    
    Distribution received from equity investments
    
    
    
    
    
    
    
    
    
    
    386
    
    
    
    
    
    
    
    
    
    
    
    386Loss on disposition of assets
    
    
    896
    
    
    
    
    
    
    
    31,348
    
    
    
    
    
    
    
    
    
    
    
    32,244Gain on sale of equity investment
    
    
    
    
    
    
    
    
    
    
    (4,730
    )
    
    
    
    
    
    
    
    
    
    
    (4,730
    )Changes in assets and liabilities, net of
effects of acquisitions and dispositions and
other
    
    
    14,546
    
    
    
    94,247
    
    
    
    (11,685
    )
    
    
    60,687
    
    
    
    (161,487
    )
    
    
    (3,692
    )NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
    
    
    48,713
    
    
    
    20,529
    
    
    
    17,793
    
    
    
    (13,031
    )
    
    
    24,937
    
    
    
    98,941INVESTING ACTIVITIES:Proceeds from disposition of assets, net of
cash expenses
    
    
    
    
    
    
    322
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    322Acquisition of minority interest, net
    
    
    
    
    
    
    
    
    
    
    (2,500
    )
    
    
    
    
    
    
    
    
    
    
    (2,500
    )Payments for purchase of wireless spectrum
    
    
    
    
    
    
    
    
    
    
    (14,920
    )
    
    
    
    
    
    
    
    
    
    
    (14,920
    )Proceeds from sale of equity investment
    
    
    
    
    
    
    
    
    
    
    7,100
    
    
    
    
    
    
    
    
    
    
    
    7,100Capital expenditures
    
    
    (37,068
    )
    
    
    
    
    
    
    (41,284
    )
    
    
    
    
    
    
    
    
    
    
    (78,352
    )NET CASH (USED IN) PROVIDED BY INVESTING
ACTIVITIES
    
    
    (37,068
    )
    
    
    322
    
    
    
    (51,604
    )
    
    
    
    
    
    
    
    
    
    
    (88,350
    )FINANCING ACTIVITIES:Repayment of debt
    
    
    (20,000
    )
    
    
    
    
    
    
    (1,334
    )
    
    
    
    
    
    
    
    
    
    
    (21,334
    )Proceeds from the exercise of employee stock
options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,264
    
    
    
    
    
    
    
    2,264Debt issuance costs paid
    
    
    (278
    )
    
    
    (284
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (562
    )Excess tax benefit from stock-based compensation
    
    
    
    
    
    
    
    
    
    
    224
    
    
    
    
    
    
    
    
    
    
    
    224Proceeds from issuance of common stock under
employee stock purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    461
    
    
    
    
    
    
    
    461Cash received from (paid to) affiliates
    
    
    11,110
    
    
    
    (20,567
    )
    
    
    24,088
    
    
    
    10,306
    
    
    
    (24,937
    )
    
    
    NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES
    
    
    (9,168
    )
    
    
    (20,851
    )
    
    
    22,978
    
    
    
    13,031
    
    
    
    (24,937
    )
    
    
    (18,947
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    2,477
    
    
    
    
    
    
    
    (10,833
    )
    
    
    
    
    
    
    
    
    
    
    (8,356
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    26,129
    
    
    
    
    
    
    
    68,755
    
    
    
    
    
    
    
    
    
    
    
    94,884CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    
    28,606
    
    
    
    
    
    
    
    57,922
    
    
    
    
    
    
    
    
    
    
    
    86,528
 22




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 EXECUTIVE OVERVIEW
 Company Overview
    Managements Summary
      23




---



##### Table of Contents




    
    Gross postpaid and prepaid wireless additions
    
    Net gain  wireless subscribers
    
    ARPU
    
    Roaming revenue
    
    Penetration  wireless
    
    Postpaid churn  wireless
    
    Average monthly minutes of use per wireless subscriber
    
    Data revenue per average wireless subscriber
    
    Fiber route miles  Puerto Rico broadband
    
    Switched access lines  Puerto Rico broadband
    
    Dedicated access line equivalents  Puerto Rico broadband
    
    On-net buildings  Puerto Rico broadband
    
    Capital expenditures
    24




---



##### Table of Contents



CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  25




---



##### Table of Contents




    
    it requires us to make assumptions because information was not available at the time or
it included matters that were highly uncertain at the time we were making the estimate, and
    
    changes in the estimate or different estimates that we could have selected may have had a
material effect on our consolidated financial condition or consolidated results of
operations.
 Allowance for Doubtful Accounts
  Property, Plant and Equipment  Depreciation
  Valuation of Long-Lived Assets
  Goodwill and Wireless Licenses  Valuation of Goodwill and Indefinite-Lived Intangible Assets
 Goodwill and Other Intangible Assets Disclosures about Segments of an Enterprise and
Related Information
 26




---



##### Table of Contents



Stock-Based Compensation
 Share-Based Payment
   Income Taxes
 Accounting for Income Taxes
     27




---



##### Table of Contents



RESULTS OF OPERATIONS
 Consolidated Operations
  Three Months Ended
    
    
    
    
    
    
    
    
    
    Nine Months EndedFebruary
    
    February
    
    
    
    
    
    
    
    
    
    February
    
    February29, 2008
    
    28, 2007
    
    $ Change
    
    % Change
    
    29, 2008
    
    28, 2006
    
    $ Change
    
    % Change(In thousands, except per share data)Operating income
    
    $
    61,614
    
    
    $
    50,389
    
    
    $
    11,225
    
    
    
    22
    %
    
    $
    179,026
    
    
    $
    160,468
    
    
    $
    18,558
    
    
    
    12
    %Income from continuing operations
    
    
    6,633
    
    
    
    321
    
    
    
    6,312
    
    
    
    *
    
    
    
    14,363
    
    
    
    1,069
    
    
    
    13,294
    
    
    
    *Earnings per share from
continuing operations:Basic
    
    
    0.06
    
    
    
    0.00
    
    
    
    0.06
    
    
    
    *
    
    
    
    0.13
    
    
    
    0.01
    
    
    
    0.12
    
    
    
    *Diluted
    
    
    0.06
    
    
    
    0.00
    
    
    
    0.06
    
    
    
    *
    
    
    
    0.13
    
    
    
    0.01
    
    
    
    0.12
    
    
    
    *
 
 *
    
    Percentage not meaningful  U.S. Wireless Operations
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedFebruary
    
    
    February
    
    
    
    
    
    
    
    
    
    
    February
    
    
    February29, 2008
    
    
    28, 2007
    
    
    $ Change
    
    
    % Change
    
    
    29, 2008
    
    
    28, 2007
    
    
    $ Change
    
    
    % Change(In thousands)Revenue:Service revenue
    
    $
    111,619
    
    
    $
    99,612
    
    
    $
    12,007
    
    
    
    12
    %
    
    $
    329,756
    
    
    $
    287,231
    
    
    $
    42,525
    
    
    
    15
    %Roaming revenue
    
    
    12,526
    
    
    
    14,195
    
    
    
    (1,669
    )
    
    
    (12
    )
    
    
    44,711
    
    
    
    50,510
    
    
    
    (5,799
    )
    
    
    (11
    )Equipment sales
    
    
    13,657
    
    
    
    12,680
    
    
    
    977
    
    
    
    8
    
    
    
    33,746
    
    
    
    30,681
    
    
    
    3,065
    
    
    
    10Total revenue
    
    
    137,802
    
    
    
    126,487
    
    
    
    11,315
    
    
    
    9
    
    
    
    408,213
    
    
    
    368,422
    
    
    
    39,791
    
    
    
    11Costs and expenses:Cost of services
    
    
    25,569
    
    
    
    25,515
    
    
    
    54
    
    
    
    0
    
    
    
    79,638
    
    
    
    78,388
    
    
    
    1,250
    
    
    
    2Cost of equipment sold
    
    
    22,170
    
    
    
    22,080
    
    
    
    90
    
    
    
    0
    
    
    
    57,508
    
    
    
    61,550
    
    
    
    (4,042
    )
    
    
    (7
    )Sales and marketing
    
    
    15,233
    
    
    
    14,309
    
    
    
    924
    
    
    
    6
    
    
    
    45,871
    
    
    
    41,101
    
    
    
    4,770
    
    
    
    12General and administrative
    
    
    24,333
    
    
    
    19,870
    
    
    
    4,463
    
    
    
    22
    
    
    
    70,188
    
    
    
    56,930
    
    
    
    13,258
    
    
    
    23Total costs and expenses
    
    
    87,305
    
    
    
    81,774
    
    
    
    5,531
    
    
    
    7
    
    
    
    253,205
    
    
    
    237,969
    
    
    
    15,236
    
    
    
    6Adjusted operating income(1)
    
    $
    50,497
    
    
    $
    44,713
    
    
    $
    5,784
    
    
    
    13
    %
    
    $
    155,008
    
    
    $
    130,453
    
    
    $
    24,555
    
    
    
    19
    %
 
 (1)
    
    Adjusted operating income represents the profitability measure of the
segment  see Note 9 to the unaudited Condensed Consolidated
Financial Statements for a reconciliation of consolidated adjusted
operating income to the appropriate GAAP measure. Revenue.
  28




---



##### Table of Contents



Costs and expenses.
    Puerto Rico Wireless Operations
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedFebruary
    
    
    February
    
    
    
    
    
    
    
    
    
    
    February
    
    
    February29, 2008
    
    
    28, 2007
    
    
    $ Change
    
    
    % Change
    
    
    29, 2008
    
    
    28, 2007
    
    
    $ Change
    
    
    % Change(In thousands)Revenue:Service revenue
    
    $
    76,708
    
    
    $
    70,428
    
    
    $
    6,280
    
    
    
    9
    %
    
    $
    229,893
    
    
    $
    217,139
    
    
    $
    12,754
    
    
    
    6
    %Roaming revenue
    
    
    1,838
    
    
    
    783
    
    
    
    1,055
    
    
    
    *
    
    
    
    4,437
    
    
    
    3,682
    
    
    
    755
    
    
    
    21Equipment sales
    
    
    4,135
    
    
    
    3,998
    
    
    
    137
    
    
    
    3
    
    
    
    10,488
    
    
    
    10,821
    
    
    
    (333
    )
    
    
    (3
    )Total revenue
    
    
    82,681
    
    
    
    75,209
    
    
    
    7,472
    
    
    
    10
    
    
    
    244,818
    
    
    
    231,642
    
    
    
    13,176
    
    
    
    6Costs and expenses:Cost of services
    
    
    13,141
    
    
    
    12,232
    
    
    
    909
    
    
    
    7
    
    
    
    39,203
    
    
    
    37,052
    
    
    
    2,151
    
    
    
    6Cost of equipment sold
    
    
    11,725
    
    
    
    12,291
    
    
    
    (566
    )
    
    
    (5
    )
    
    
    37,862
    
    
    
    33,813
    
    
    
    4,049
    
    
    
    12Sales and marketing
    
    
    8,462
    
    
    
    8,745
    
    
    
    (283
    )
    
    
    (3
    )
    
    
    26,671
    
    
    
    24,980
    
    
    
    1,691
    
    
    
    7General and administrative
    
    
    18,395
    
    
    
    18,341
    
    
    
    54
    
    
    
    0
    
    
    
    54,236
    
    
    
    52,335
    
    
    
    1,901
    
    
    
    4Total costs and expenses
    
    
    51,723
    
    
    
    51,609
    
    
    
    114
    
    
    
    0
    
    
    
    157,972
    
    
    
    148,180
    
    
    
    9,792
    
    
    
    7Adjusted operating income(1)
    
    $
    30,958
    
    
    $
    23,600
    
    
    $
    7,358
    
    
    
    31
    %
    
    $
    86,846
    
    
    $
    83,462
    
    
    $
    3,384
    
    
    
    4
    %
 
 *
    
    Percentage not meaningful(1)
    
    Adjusted operating income represents the profitability measure of the
segment  see Note 9 to the unaudited Condensed Consolidated
Financial Statements for a reconciliation of consolidated adjusted
operating income to the appropriate GAAP measure. 29




---



##### Table of Contents



Revenue.
     Costs and expenses.
    30




---



##### Table of Contents



Puerto Rico Broadband Operations
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedFebruary
    
    
    February
    
    
    
    
    
    
    
    
    
    
    February
    
    
    February29, 2008
    
    
    28, 2007
    
    
    $ Change
    
    
    % Change
    
    
    29, 2008
    
    
    28, 2007
    
    
    $ Change
    
    
    % Change(In thousands)Revenue:Switched revenue
    
    $
    13,905
    
    
    $
    13,114
    
    
    $
    791
    
    
    
    6
    %
    
    $
    41,284
    
    
    $
    40,550
    
    
    $
    734
    
    
    
    2
    %Dedicated revenue
    
    
    18,384
    
    
    
    15,815
    
    
    
    2,569
    
    
    
    16
    
    
    
    52,185
    
    
    
    45,620
    
    
    
    6,565
    
    
    
    14Other revenue
    
    
    1,630
    
    
    
    1,407
    
    
    
    223
    
    
    
    16
    
    
    
    5,460
    
    
    
    6,308
    
    
    
    (848
    )
    
    
    (13
    )Total revenue
    
    
    33,919
    
    
    
    30,336
    
    
    
    3,583
    
    
    
    12
    
    
    
    98,929
    
    
    
    92,478
    
    
    
    6,451
    
    
    
    7Costs and expenses:Cost of services
    
    
    9,140
    
    
    
    7,066
    
    
    
    2,074
    
    
    
    29
    
    
    
    25,017
    
    
    
    21,267
    
    
    
    3,750
    
    
    
    18Cost of equipment sold
    
    
    151
    
    
    
    481
    
    
    
    (330
    )
    
    
    (69
    )
    
    
    460
    
    
    
    584
    
    
    
    (124
    )
    
    
    (21
    )Sales and marketing
    
    
    1,678
    
    
    
    1,587
    
    
    
    91
    
    
    
    6
    
    
    
    4,839
    
    
    
    4,872
    
    
    
    (33
    )
    
    
    (1
    )General and administrative
    
    
    5,297
    
    
    
    4,916
    
    
    
    381
    
    
    
    8
    
    
    
    15,339
    
    
    
    14,683
    
    
    
    656
    
    
    
    4Total costs and expenses
    
    
    16,266
    
    
    
    14,050
    
    
    
    2,216
    
    
    
    16
    
    
    
    45,655
    
    
    
    41,406
    
    
    
    4,249
    
    
    
    10Adjusted operating income(1)
    
    $
    17,653
    
    
    $
    16,286
    
    
    $
    1,367
    
    
    
    8
    %
    
    $
    53,274
    
    
    $
    51,072
    
    
    $
    2,202
    
    
    
    4
    %
 
 (1)
    
    Adjusted operating income represents the profitability measure of the
segment  see Note 9 to the unaudited Condensed Consolidated
Financial Statements for a reconciliation of consolidated adjusted
operating income to the appropriate GAAP measure. Revenue.
    Costs and expenses.
  31




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Weighted Average Debt Outstanding and Interest Expense
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedFebruary
    
    
    February
    
    
    
    
    
    
    February
    
    
    February29, 2008
    
    
    28, 2007
    
    
    Change
    
    
    29, 2008
    
    
    2.8, 2007
    
    
    Change(In millions)Weighted Average Debt Outstanding
    
    $
    2,006.14
    
    
    $
    2,127.50
    
    
    $
    (121.36
    )
    
    $
    2,024.49
    
    
    $
    2,133.80
    
    
    $
    (109.31
    )Weighted Average Gross Interest Rate(1)
    
    
    9.6
    %
    
    
    9.7
    %
    
    
    (0.1
    %)
    
    
    9.7
    %
    
    
    9.7
    %
    
    
    0.0
    %Weighted Average Gross Interest Rate(2)
    
    
    9.2
    %
    
    
    9.3
    %
    
    
    (0.1
    %)
    
    
    9.2
    %
    
    
    9.3
    %
    
    
    (0.1
    %)Gross Interest Expense(1)
    
    $
    47.96
    
    
    $
    51.53
    
    
    $
    (3.57
    )
    
    $
    146.57
    
    
    $
    155.96
    
    
    $
    (9.39
    )Interest Income
    
    $
    0.45
    
    
    $
    0.99
    
    
    $
    (0.54
    )
    
    $
    2.67
    
    
    $
    3.01
    
    
    $
    (0.34
    )Net Interest Expense
    
    $
    47.51
    
    
    $
    50.54
    
    
    $
    (3.03
    )
    
    $
    143.90
    
    
    $
    152.95
    
    
    $
    (9.05
    )
 
 (1)
    
    Including amortization of debt issuance costs of $2.0 million and $6.3
million for the three and nine months ended February 29, 2008,
respectively and $2.1 million and $6.7 million for the three and nine
months ended February 28, 2007, respectively.(2)
    
    Excluding amortization of debt issuance costs of $2.0 million and $6.3
million for the three and nine months ended February 29, 2008,
respectively and $2.1 million and $6.7 million for the three and nine
months ended February 28, 2007, respectively.   Senior Secured Credit Facility
   High-Yield Notes
  32




---



##### Table of Contents



Derivative Financial Instruments
       33




---



##### Table of Contents



Three Months Ended
    
    
    % of Total Capital
    
    
    Nine Months Ended
    
    
    % of Total CapitalFebruary 29, 2008
    
    
    Expenditures
    
    
    February 29, 2008
    
    
    Expenditures(in thousands)U.S. Wireless
    
    $
    16,156
    
    
    
    53.6
    %
    
    $
    34,974
    
    
    
    46.3
    %Puerto Rico Wireless
    
    
    10,264
    
    
    
    34.0
    
    
    
    27,022
    
    
    
    35.7Puerto Rico Broadband
    
    
    3,753
    
    
    
    12.4
    
    
    
    13,599
    
    
    
    18.0Total capital expenditures
    
    $
    30,173
    
    
    
    100.0
    %
    
    $
    75,595
    
    
    
    100.0
    %Capitalized phones in
Puerto Rico (included
above in Puerto Rico
Wireless)
    
    $
    5,516
    
    
    
    
    
    
    $
    14,719Property, plant and
equipment, net at
February 29, 2008
    
    $
    578,254
    
    
    
    
    
    
    $
    578,254
      34




---



##### Table of Contents



ACQUISITIONS AND DISPOSITIONS
    COMMITMENTS AND CONTINGENCIES
     Less than
    
    
    1-3
    
    
    3-5
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsLong-term debt obligations (net of unamortized discount)
    
    $
    2,008,323
    
    
    $
    
    
    
    $
    549,642
    
    
    $
    548,166
    
    
    $
    910,515Interest on long-term debt obligations(1)
    
    
    761,339
    
    
    
    148,576
    
    
    
    313,811
    
    
    
    257,871
    
    
    
    41,081Operating lease obligations
    
    
    270,422
    
    
    
    30,662
    
    
    
    52,459
    
    
    
    36,941
    
    
    
    150,360Capital lease obligations
    
    
    229,358
    
    
    
    7,382
    
    
    
    15,438
    
    
    
    16,287
    
    
    
    190,251Purchase obligations
    
    
    43,758
    
    
    
    10,582
    
    
    
    21,879
    
    
    
    11,297
    
    
    
    Total contractual cash obligations
    
    
    3,313,200
    
    
    
    197,202
    
    
    
    953,229
    
    
    
    870,562
    
    
    
    1,292,207Sublessor agreements
    
    
    (3,950
    )
    
    
    (1,293
    )
    
    
    (1,902
    )
    
    
    (745
    )
    
    
    (10
    )Net
    
    $
    3,309,250
    
    
    $
    195,909
    
    
    $
    951,327
    
    
    $
    869,817
    
    
    $
    1,292,197
 
 (1)
    
    Interest payments are based on the Companys projected interest rates
and estimated principle amounts outstanding for the periods presented. 35




---



##### Table of Contents



CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
 PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
   
    
    the effects of vigorous competition in our markets, which may make it difficult for us to
attract and retain customers and to grow our customer base and revenue and which may
increase churn, which could reduce our revenue and increase our costs;
    
    the fact that many of our competitors are larger than we are, have greater financial
resources than we do, are less leveraged than we are, have more extensive coverage areas
than we do, and may offer less expensive and more technologically advanced products and
services than we do;
    
    changes and developments in technology, including our ability to upgrade our networks to
remain competitive and our ability to anticipate and react to frequent and significant
technological changes which may render certain technologies used by us obsolete;
    
    our substantial debt obligations, including restrictive covenants, which place
limitations on how we conduct business;
    
    market prices for the products and services we offer may decline in the future;
    
    the effect of changes in the level of support provided to us by the Universal Service
Fund;
    
    the effects of a decline in the market for our Code Division Multiple Access-based
technology;
    
    the effects of consolidation in the telecommunications industry;
    
    general economic, business, political and social conditions in the areas in which we
operate, including the effects of world events, terrorism, hurricanes, tornadoes, wind
storms and other natural disasters;
    
    our access to the latest technology handsets in a timeframe and at a cost similar to our
competitors;
    
    our ability to successfully deploy and deliver wireless data services to our customers,
including next generation 3G and 4G technology;
    
    our ability to generate cash and the availability and cost of additional capital to fund
our operations and our significant planned capital expenditures, including the need to
refinance or amend existing indebtedness;
    
    our dependence on roaming agreements for a significant portion of our wireless revenue
and the expected decline in roaming revenue over the long term;
    
    our dependence on roaming agreements for our ability to offer our wireless customers
competitively priced regional and nationwide rate plans that include areas for which we do
not own wireless licenses;
 36




---



##### Table of Contents




    
    our ability to attract and retain qualified personnel;
    
    the effects of governmental regulation of the telecommunications industry;
    
    our ability to acquire, and the cost of acquiring, additional spectrum in our markets to
support growth and advanced technologies;
    
    the effects of network disruptions and system failures;
    
    our ability to manage, implement and monitor billing and operational support systems;
    
    the results of litigation filed or which may be filed against us, including litigation
relating to wireless billing, using wireless telephones while operating an automobile or
possible health effects of radio frequency transmission;
    
    the relative liquidity and corresponding volatility of our common stock and our ability
to raise future equity capital; and
    
    the influence on us by our significant stockholder and anti-takeover provisions.
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   37




---



##### Table of Contents



Fiscal Year Ended February 28(9),2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    Thereafter
    
    Total
    
    Fair Value(In thousands)Long-term debt:Fixed rate
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    200,220
    
    
    $
    910,515
    
    
    $
    1,110,735
    
    
    $
    1,090,860Average fixed Interest rate
    
    
    10.0
    %
    
    
    10.0
    %
    
    
    10.0
    %
    
    
    10.0
    %
    
    
    10.0
    %
    
    
    9.4
    %
    
    
    9.5
    %
    
    
    Variable rate
    
    $
    
    
    
    $
    
    
    
    $
    550,000
    
    
    $
    
    
    
    $
    350,000
    
    
    $
    
    
    
    $
    900,000
    
    
    $
    865,000Average variable Interest
rate(1)
    
    
    2.3
    %
    
    
    3.3
    %
    
    
    4.0
    %
    
    
    4.5
    %
    
    
    4.9
    %
    
    
    5.2
    %
    
    
    4.4
    %
    
    
    Interest rate swap (pay
fixed, receive variable):Notional amount
    
    $
    450,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (3,536
    )Average pay rate
    
    
    7.77
    %Average receive rate
    
    
    5.94
    %Interest rate collar:Notional amount
    
    $
    300,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (3,235
    )Cap (Highest)
    
    
    5.50
    %Floor (Lowest)
    
    
    4.24
    %
 
 (1)
    
    Represents the average interest rate before applicable margin on the
Senior Secured Credit Facility debt.  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
   38




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
     
 ITEM 1A.
    
    RISK FACTORS
  39




---



##### Table of Contents



ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  40




---



##### Table of Contents



ITEM 6.
    
    EXHIBITS
  ExhibitNo.
    
    Description31.1
    
    Certification of Michael J. Small, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Thomas J. Fitzpatrick, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1
    
    Certification of Michael J. Small, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Thomas J. Fitzpatrick, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
 41




---



##### Table of Contents



SIGNATURES
   CENTENNIAL COMMUNICATIONS CORP./s/  Thomas J. FitzpatrickThomas J. FitzpatrickExecutive Vice President,
Chief Financial Officer
(Chief Financial Officer)/s/  Francis P. HuntFrancis P. HuntSenior Vice President  Controller
(Chief Accounting Officer) 42