##### 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 EXCHANGE ACT OF 1934
 For the quarterly period ended August 31, 2009
 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
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 3349 Route 138
Wall, NJ 07719  (Address of principal executive offices)
(Zip Code)
 (732) 556-2200  (Registrants telephone number,
including area code)
 þ o
 o o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



TABLE OF CONTENTS
 Part I  Financial InformationItem 1.
    
    Financial Statements
    
    
    3Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 4.
    
    Controls and Procedures
    
    
    37Part II  Other InformationItem 1.
    
    Legal Proceedings
    
    
    38Item 1A.
    
    Risk Factors
    
    
    38Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 3.
    
    Defaults Upon Senior Securities
    
    
    38Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    38Item 5.
    
    Other Information
    
    
    38Item 6.
    
    Exhibits
    
    
    38EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### 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)
 August 31,
    
    
    May 31,2009
    
    
    2009ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    247,626
    
    
    $
    217,494Accounts receivable, less allowance for doubtful accounts of $6,261 and $5,881, respectively
    
    
    109,482
    
    
    
    105,474Inventory  phones and accessories, net
    
    
    27,499
    
    
    
    31,104Prepaid expenses and other current assets
    
    
    23,859
    
    
    
    22,131Total Current Assets
    
    
    408,466
    
    
    
    376,203Property, plant and equipment, net
    
    
    564,331
    
    
    
    572,131Debt issuance costs, less accumulated amortization of $40,825 and $38,843, respectively
    
    
    24,722
    
    
    
    26,704Restricted cash
    
    
    568
    
    
    
    124U.S. wireless licenses
    
    
    402,395
    
    
    
    402,395Puerto Rico wireless licenses, net
    
    
    54,159
    
    
    
    54,159Goodwill
    
    
    10,989
    
    
    
    10,989Customer lists, net
    
    
    4,819
    
    
    
    4,896Cable facility, net
    
    
    2,950
    
    
    
    3,010Other assets
    
    
    7,504
    
    
    
    4,893TOTAL ASSETS
    
    $
    1,480,903
    
    
    $
    1,455,504LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIES:Current portion of long-term debt
    
    
    275,000
    
    
    
    Accounts payable
    
    
    21,751
    
    
    
    12,679Accrued expenses and other current liabilities
    
    
    163,795
    
    
    
    182,544Total Current Liabilities
    
    
    460,546
    
    
    
    195,223Long-term debt
    
    
    1,750,524
    
    
    
    2,021,180Deferred income taxes
    
    
    165,064
    
    
    
    155,526Other liabilities
    
    
    30,659
    
    
    
    31,968Commitments 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 111,219,613
and 111,165,870 shares, respectively; and outstanding 111,419,110 and 111,095,367 shares,
respectively
    
    
    1,112
    
    
    
    1,112Additional paid-in capital
    
    
    64,503
    
    
    
    62,197Accumulated deficit
    
    
    (991,377
    )
    
    
    (1,010,835
    )Accumulated other comprehensive loss
    
    
    (480
    )
    
    
    (1,232
    )Less: cost of 70,503 common shares in treasury
    
    
    (1,077
    )
    
    
    (1,077
    )Total Stockholders Deficit attributable to Centennial
    
    
    (927,319
    )
    
    
    (949,835
    )Noncontrolling interest in subsidiaries
    
    
    1,429
    
    
    
    1,442Total Stockholders Deficit
    
    
    (925,890
    )
    
    
    (948,393
    )TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
    
    $
    1,480,903
    
    
    $
    1,455,504
  3




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CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands, except per share data)
 Three Months EndedAugust 31,
    
    
    August 31,2009
    
    
    2008REVENUE:Service revenue
    
    $
    247,089
    
    
    $
    249,003Equipment sales
    
    
    11,835
    
    
    
    16,210258,924
    
    
    
    265,213COSTS AND EXPENSES:Cost of services (exclusive of depreciation
and amortization shown below)
    
    
    51,923
    
    
    
    50,676Cost of equipment sold
    
    
    31,251
    
    
    
    42,149Sales and marketing
    
    
    23,470
    
    
    
    25,869General and administrative
    
    
    48,139
    
    
    
    48,096Depreciation and amortization
    
    
    31,687
    
    
    
    35,544Loss (gain) on disposition of assets
    
    
    122
    
    
    
    (47
    )186,592
    
    
    
    202,287Operating income
    
    
    72,332
    
    
    
    62,926Interest expense, net
    
    
    (39,952
    )
    
    
    (44,880
    )Income from continuing operations before income tax expense
    
    
    32,380
    
    
    
    18,046Income tax expense
    
    
    (12,692
    )
    
    
    (10,056
    )Income from continuing operations
    
    
    19,688
    
    
    
    7,990Net loss from discontinued operations
    
    
    (94
    )
    
    
    (337
    )Net income
    
    
    19,594
    
    
    
    7,653Less: Net income attributable to noncontrolling interest
    
    
    (136
    )
    
    
    (167
    )Net income attributable to Centennial
    
    $
    19,458
    
    
    $
    7,486Earnings per share:BasicEarnings per share from continuing operations
    
    $
    0.18
    
    
    $
    0.07Loss per share from discontinued operations
    
    
    0.00
    
    
    
    0.00Net income per share attributable to Centennial
    
    $
    0.18
    
    
    $
    0.07DilutedEarnings per share from continuing operations
    
    $
    0.17
    
    
    $
    0.07Loss per share from discontinued operations
    
    
    0.00
    
    
    
    0.00Net income per share attributable to Centennial
    
    $
    0.17
    
    
    $
    0.07Weighted-average number of shares outstanding:Basic
    
    
    111,135
    
    
    
    108,038Diluted
    
    
    112,005
    
    
    
    110,200
  4




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CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
 Three Months EndedAugust 31,
    
    
    August 31,2009
    
    
    2008OPERATING ACTIVITIES:Net income
    
    $
    19,594
    
    
    $
    7,653Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    31,687
    
    
    
    35,544Stock-based compensation
    
    
    2,029
    
    
    
    2,870Excess tax benefits from stock-based compensation
    
    
    (16
    )
    
    
    (102
    )Loss (gain) on disposition of assets
    
    
    122
    
    
    
    (47
    )Changes in assets and liabilities
    
    
    (5,666
    )
    
    
    (7,130
    )Net cash provided by operating activities
    
    
    47,750
    
    
    
    38,788INVESTING ACTIVITIES:Proceeds from disposition of assets, net of cash expenses
    
    
    22
    
    
    
    21Payments for purchase of wireless spectrum
    
    
    
    
    
    
    (2
    )Capital expenditures
    
    
    (17,008
    )
    
    
    (20,664
    )Net cash used in investing activities
    
    
    (16,986
    )
    
    
    (20,645
    )FINANCING ACTIVITIES:Repayment of debt
    
    
    (898
    )
    
    
    (724
    )Proceeds from the exercise of stock options
    
    
    250
    
    
    
    1,161Excess tax benefits from stock-based compensation
    
    
    16
    
    
    
    102Net cash (used in) provided by financing activities
    
    
    (632
    )
    
    
    539Net increase in cash and cash equivalents
    
    
    30,132
    
    
    
    18,682Cash and cash equivalents, beginning of period
    
    
    217,494
    
    
    
    105,161Cash and cash equivalents, end of period
    
    $
    247,626
    
    
    $
    123,843SUPPLEMENTAL CASH FLOW DISCLOSURE:Cash (paid) received during the period for:Interest
    
    $
    (52,810
    )
    
    $
    (58,556
    )Income taxes
    
    $
    26
    
    
    $
    (384
    )NON-CASH TRANSACTION:Fixed assets acquired under capital leases
    
    $
    4,223
    
    
    $
    1,938
  5




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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
  As of
    
    
    As ofAugust 31, 2009
    
    
    May 31, 2009U.S. wireless licenses
    
    $
    402,395
    
    
    $
    402,395Puerto Rico wireless licenses
    
    
    54,159
    
    
    
    54,159Total
    
    $
    456,554
    
    
    $
    456,554
 Goodwill and Other Intangible Assets
   6




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Disclosures about Segments of an
Enterprise and Related Information
   As of August 31, 2009
    
    As of May 31, 2009Estimated
    
    Gross
    
    
    
    
    
    GrossUseful
    
    Carrying
    
    Accumulated
    
    Carrying
    
    AccumulatedLife
    
    Amount
    
    Amortization
    
    Amount
    
    AmortizationCable facility
    
    25 years
    
    
    6,000
    
    
    3,050
    
    
    6,000
    
    
    2,990Customer lists
    
    10 years
    
    
    6,500
    
    
    1,681
    
    
    6,500
    
    
    1,604
  Goodwill
  NOTE 3. DEBT
  As of
    
    
    As ofAugust 31, 2009
    
    
    May 31, 2009Senior Secured Credit Facility  Term Loans
    
    $
    550,000
    
    
    $
    550,0008 1/8% Senior Unsecured Notes due 2014 (the 2014 Senior Notes)
    
    
    325,000
    
    
    
    325,00010 1/8% Senior Unsecured Notes due 2013 (the 2013 Senior Notes)
    
    
    500,000
    
    
    
    500,000Senior Unsecured Holdco Floating Rate Notes due 2013 (the 2013 Holdco Floating Rate
Notes), net of unamortized discount of $1,665 and $1,790, respectively
    
    
    348,335
    
    
    
    348,21010% Senior Unsecured Holdco Fixed Rate Notes due 2013 (the 2013 Holdco Fixed Rate Notes)
    
    
    200,000
    
    
    
    200,000Capital Lease Obligations
    
    
    91,045
    
    
    
    86,692Financing Obligation  Tower Sale
    
    
    11,144
    
    
    
    11,278Total Long-Term Debt
    
    
    2,025,524
    
    
    
    2,021,180Current Portion of Long-Term Debt
    
    
    (275,000
    )
    
    
    Net Long-Term Debt
    
    $
    1,750,524
    
    
    $
    2,021,180
 Senior Secured Credit Facility
   7




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High-Yield Notes
    Derivative Financial Instruments
  Collar
    
    CollarFixed
    
    FixedVariable Interest
    
    
    
    
    
    Interest
    
    InterestRate Loan
    
    Amount
    
    Rate
    
    Rate
    
    Trade
    
    Effective
    
    ExpirationBeing Hedged
    
    Hedged
    
    Floor
    
    Cap
    
    Date
    
    Date
    
    DateNovember 2008 CCOC
Collar 1
    
    Senior Secured Credit Facility
    
    $
    200,000
    
    
    
    1.76
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    12/31/2008
    
    
    
    9/30/20092008 CPROC Collar
    
    Senior Secured Credit Facility
    
    $
    250,000
    
    
    
    2.43
    %
    
    
    4.00
    %
    
    
    9/26/2008
    
    
    
    9/30/2008
    
    
    
    6/30/2009November 2008 CPROC
Collar
    
    Senior Secured Credit Facility
    
    $
    35,500
    
    
    
    1.76
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    12/31/2008
    
    
    
    9/30/2009November 2008 CCOC
Collar 2
    
    Senior Secured Credit Facility
    
    $
    25,000
    
    
    
    1.76
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    12/31/2008
    
    
    
    9/30/2009November 2008 CCOC
Collar 3
    
    Senior Secured Credit Facility
    
    $
    39,500
    
    
    
    1.81
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    11/30/2008
    
    
    
    8/31/2009
 8




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August 31, 2010
    
    $
    274,650August 31, 2011
    
    
    274,799August 31, 2012
    
    
    26August 31, 2013
    
    
    1,050,368August 31, 2014
    
    
    325,637August 31, 2015 and thereafter
    
    
    101,7092,027,189Less: unamortized discount
    
    
    (1,665
    )$
    2,025,524
  NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS
  August 31, 2009
    
    May 31, 2009Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair ValueLong-term debt
    
    $
    2,025,524
    
    
    $
    2,031,578
    
    
    $
    2,021,180
    
    
    $
    2,056,095Derivative financial instruments:Interest rate swap and collar agreements liability
    
    $
    774
    
    
    $
    774
    
    
    $
    1,952
    
    
    $
    1,952
  9




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NOTE 5. TAXES
 Accounting for Income Taxes Interim Financial Reporting Accounting for Income Taxes in Interim
Periods  An Interpretation of APB Opinion No. 28
  Accounting
for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
  10




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NOTE 6. DISCONTINUED OPERATIONS
 Accounting for the
Impairment or Disposal of Long-Lived Assets
 NOTE 7. RECENT ACCOUNTING PRONOUNCEMENTS
 The FASB Accounting Standards Codification tm and the Hierarchy of Generally Accepted Accounting Principles, a replacement
of FASB Statement No. 162
 Amendments to FASB Interpretation No. 46(R)
 Subsequent Events
 Accounting for Assets
Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies Business Combinations,
 Interim Disclosures about Fair Value of Financial Instruments Disclosures about Fair Value of Financial Instruments Interim Financial Reporting
 11




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Determining Fair Value When the Volume and Level
of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly
 Determination of the Useful Life of Intangible
Assets
 Disclosures about Derivative Instruments and
Hedging Activities
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Business Combinations
 Fair Value Measurement
   12




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NOTE 8. COMMITMENTS AND CONTINGENCIES AND NONCONTROLLING INTEREST
 Legal Proceedings:
   Guarantees:
  Lease Commitments:
   13




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Other Commitments and Contingencies:
  Noncontrolling interest:
  2009
    
    
    2008Noncontrolling interest at June 1
    
    $
    1,442
    
    
    $
    4,898Income attributable to noncontrolling interest
    
    
    136
    
    
    
    167Distributions paid to noncontrolling interest
    
    
    (149
    )
    
    
    Noncontrolling interest at August 31
    
    $
    1,429
    
    
    $
    5,065
 NOTE 9. SEGMENT INFORMATION
    14




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Three Months EndedAugust 31,2009
    
    
    2008U.S. WIRELESSService revenue
    
    $
    116,564
    
    
    $
    120,249Roaming revenue
    
    
    21,449
    
    
    
    15,789Equipment sales
    
    
    7,921
    
    
    
    11,769Total revenue
    
    
    145,934
    
    
    
    147,807Adjusted operating income
    
    
    64,989
    
    
    
    58,588Total assets
    
    
    1,928,349
    
    
    
    1,848,983Capital expenditures
    
    
    7,556
    
    
    
    8,706PUERTO RICO WIRELESSService revenue
    
    $
    73,346
    
    
    $
    77,696Roaming revenue
    
    
    2,479
    
    
    
    2,694Equipment sales
    
    
    3,914
    
    
    
    4,442Total revenue
    
    
    79,739
    
    
    
    84,832Adjusted operating income
    
    
    22,882
    
    
    
    22,952Total assets
    
    
    284,906
    
    
    
    284,833Capital expenditures
    
    
    5,592
    
    
    
    6,730PUERTO RICO BROADBANDSwitched revenue
    
    $
    13,257
    
    
    $
    13,935Dedicated revenue
    
    
    20,185
    
    
    
    19,402Other revenue
    
    
    2,772
    
    
    
    2,330Total revenue
    
    
    36,214
    
    
    
    35,667Adjusted operating income
    
    
    19,369
    
    
    
    19,753Total assets
    
    
    213,896
    
    
    
    266,910Capital expenditures
    
    
    3,860
    
    
    
    5,228ELIMINATIONS/ADJUSTMENTSTotal revenue(1)
    
    $
    (2,963
    )
    
    $
    (3,093
    )Total assets(2)
    
    
    (946,248
    )
    
    
    (1,006,792
    )CONSOLIDATEDTotal revenue
    
    $
    258,924
    
    
    $
    265,213Adjusted operating income
    
    
    107,240
    
    
    
    101,293Total assets
    
    
    1,480,903
    
    
    
    1,393,934Capital expenditures
    
    
    17,008
    
    
    
    20,664
 
 (1)
    
    Elimination of intercompany revenue, primarily from Puerto Rico broadband to Puerto Rico
wireless.(2)
    
    Elimination of intercompany investments.  Three Months EndedAugust 31,2009
    
    
    2008Adjusted operating income
    
    $
    107,240
    
    
    $
    101,293Depreciation and amortization
    
    
    (31,687
    )
    
    
    (35,544
    )Stock-based compensation expense
    
    
    (2,029
    )
    
    
    (2,870
    )Transaction costs
    
    
    (1,070
    )
    
    
    (Loss) gain on disposition of assets
    
    
    (122
    )
    
    
    47Operating income
    
    
    72,332
    
    
    
    62,926Interest expense, net
    
    
    (39,952
    )
    
    
    (44,880
    )Income tax expense
    
    
    (12,692
    )
    
    
    (10,056
    )Income from continuing operations
    
    
    19,688
    
    
    
    7,990Loss from discontinued operations
    
    
    (94
    )
    
    
    (337
    )Net income
    
    
    19,594
    
    
    
    7,653Less: Net income attributable to noncontrolling interest
    
    
    (136
    )
    
    
    (167
    )Net income attributable to Centennial
    
    $
    19,458
    
    
    $
    7,486
 NOTE 10. CONDENSED CONSOLIDATING FINANCIAL DATA
  15




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CONDENSED CONSOLIDATING BALANCE SHEET FINANCIAL DATA
As of August 31, 2009
 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
    
    $
    68,790
    
    
    $
    
    
    
    $
    178,836
    
    
    $
    
    
    
    $
    
    
    
    $
    247,626Accounts receivable, net
    
    
    45,595
    
    
    
    
    
    
    
    63,887
    
    
    
    
    
    
    
    
    
    
    
    109,482Inventory  phones and
accessories, net
    
    
    9,411
    
    
    
    
    
    
    
    18,088
    
    
    
    
    
    
    
    
    
    
    
    27,499Prepaid expenses and other
current assets
    
    
    12,066
    
    
    
    
    
    
    
    11,793
    
    
    
    
    
    
    
    
    
    
    
    23,859Total current assets
    
    
    135,862
    
    
    
    
    
    
    
    272,604
    
    
    
    
    
    
    
    
    
    
    
    408,466Property, plant & equipment,
net
    
    
    245,998
    
    
    
    
    
    
    
    318,333
    
    
    
    
    
    
    
    
    
    
    
    564,331Debt issuance costs
    
    
    8,874
    
    
    
    
    
    
    
    15,848
    
    
    
    
    
    
    
    
    
    
    
    24,722Restricted Cash
    
    
    568
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    568U.S. wireless licenses
    
    
    
    
    
    
    
    
    
    
    402,395
    
    
    
    
    
    
    
    
    
    
    
    402,395Puerto Rico wireless licenses,
net
    
    
    
    
    
    
    
    
    
    
    54,159
    
    
    
    
    
    
    
    
    
    
    
    54,159Goodwill
    
    
    10,989
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,989Investment in subsidiaries
    
    
    
    
    
    
    1,046,290
    
    
    
    562,205
    
    
    
    (651,349
    )
    
    
    (957,146
    )
    
    
    Other assets
    
    
    13,516
    
    
    
    
    
    
    
    1,757
    
    
    
    
    
    
    
    
    
    
    
    15,273Total
    
    $
    415,807
    
    
    $
    1,046,290
    
    
    $
    1,627,301
    
    
    $
    (651,349
    )
    
    $
    (957,146
    )
    
    $
    1,480,903LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Current portion of
long-term debt
    
    $
    142,750
    
    
    $
    
    
    
    $
    132,250
    
    
    $
    
    
    
    $
    
    
    
    $
    275,000Accounts payable
    
    
    12,670
    
    
    
    
    
    
    
    9,081
    
    
    
    
    
    
    
    
    
    
    
    21,751Accrued expenses and other
current liabilities
    
    
    105,300
    
    
    
    
    
    
    
    58,495
    
    
    
    
    
    
    
    
    
    
    
    163,795Total current liabilities
    
    
    260,720
    
    
    
    
    
    
    
    199,826
    
    
    
    
    
    
    
    
    
    
    
    460,546Long-term debt
    
    
    653,029
    
    
    
    591,395
    
    
    
    (42,235
    )
    
    
    548,335
    
    
    
    
    
    
    
    1,750,524Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    165,064
    
    
    
    
    
    
    
    
    
    
    
    165,064Other liabilities
    
    
    6,665
    
    
    
    
    
    
    
    23,994
    
    
    
    
    
    
    
    
    
    
    
    30,659Intercompany
    
    
    34,179
    
    
    
    1,087,595
    
    
    
    1,052,653
    
    
    
    (272,845
    )
    
    
    (1,901,582
    )
    
    
    Redeemable preferred stock
    
    
    653,038
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (653,038
    )
    
    
    Stockholders (deficit) equity:Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,112
    
    
    
    
    
    
    
    1,112Additional paid-in capital
    
    
    (818,497
    )
    
    
    
    
    
    
    818,497
    
    
    
    64,503
    
    
    
    
    
    
    
    64,503Accumulated (deficit) equity
    
    
    (373,258
    )
    
    
    (632,289
    )
    
    
    (591,927
    )
    
    
    (991,377
    )
    
    
    1,597,474
    
    
    
    (991,377
    )Accumulated other
comprehensive loss
    
    
    (69
    )
    
    
    (411
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (480
    )Less: treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,077
    )
    
    
    
    
    
    
    (1,077
    )Total stockholders
(deficit) equity
attributable to Centennial
    
    
    (1,191,824
    )
    
    
    (632,700
    )
    
    
    226,570
    
    
    
    (926,839
    )
    
    
    1,597,474
    
    
    
    (927,319
    )Noncontrolling interest in
subsidiaries
    
    
    
    
    
    
    
    
    
    
    1,429
    
    
    
    
    
    
    
    
    
    
    
    1,429Total stockholders
(deficit) equity
    
    
    (1,191,824
    )
    
    
    (632,700
    )
    
    
    227,999
    
    
    
    (926,839
    )
    
    
    1,597,474
    
    
    
    (925,890
    )Total
    
    $
    415,807
    
    
    $
    1,046,290
    
    
    $
    1,627,301
    
    
    $
    (651,349
    )
    
    $
    (957,146
    )
    
    $
    1,480,903
 16




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
For the Three Months Ended August 31, 2009
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    Subsidiaries(Amounts in thousands)Revenue
    
    $
    107,001
    
    
    $
    
    
    
    $
    154,885
    
    
    $
    
    
    
    $
    (2,962
    )
    
    $
    258,924Costs and expenses:Cost of services (exclusive
of depreciation and
amortization shown below)
    
    
    23,495
    
    
    
    
    
    
    
    31,222
    
    
    
    
    
    
    
    (2,794
    )
    
    
    51,923Cost of equipment sold
    
    
    13,204
    
    
    
    
    
    
    
    18,047
    
    
    
    
    
    
    
    
    
    
    
    31,251Sales and marketing
    
    
    10,991
    
    
    
    
    
    
    
    12,479
    
    
    
    
    
    
    
    
    
    
    
    23,470General and administrative
    
    
    23,402
    
    
    
    
    
    
    
    24,905
    
    
    
    
    
    
    
    (168
    )
    
    
    48,139Depreciation and amortization
    
    
    15,187
    
    
    
    
    
    
    
    16,500
    
    
    
    
    
    
    
    
    
    
    
    31,687Loss on disposition of assets
    
    
    114
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    12286,393
    
    
    
    
    
    
    
    103,161
    
    
    
    
    
    
    
    (2,962
    )
    
    
    186,592Operating income
    
    
    20,608
    
    
    
    
    
    
    
    51,724
    
    
    
    
    
    
    
    
    
    
    
    72,332Income (loss) from investments
in subsidiaries
    
    
    
    
    
    
    19,458
    
    
    
    (8,427
    )
    
    
    19,458
    
    
    
    (30,489
    )
    
    
    Interest expense, net
    
    
    (23,786
    )
    
    
    (10,142
    )
    
    
    (4,344
    )
    
    
    (10,980
    )
    
    
    9,300
    
    
    
    (39,952
    )Intercompany interest allocation
    
    
    
    
    
    
    10,142
    
    
    
    (11,822
    )
    
    
    10,980
    
    
    
    (9,300
    )
    
    
    (Loss) income from continuing
operations before income tax
expense
    
    
    (3,178
    )
    
    
    19,458
    
    
    
    27,131
    
    
    
    19,458
    
    
    
    (30,489
    )
    
    
    32,380Income tax expense
    
    
    (5,249
    )
    
    
    
    
    
    
    (7,443
    )
    
    
    
    
    
    
    
    
    
    
    (12,692
    )(Loss) income from continuing
operations
    
    
    (8,427
    )
    
    
    19,458
    
    
    
    19,688
    
    
    
    19,458
    
    
    
    (30,489
    )
    
    
    19,688Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (94
    )
    
    
    
    
    
    
    
    
    
    
    (94
    )Net (loss) income
    
    
    (8,427
    )
    
    
    19,458
    
    
    
    19,594
    
    
    
    19,458
    
    
    
    (30,489
    )
    
    
    19,594Less: Net income attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    (136
    )
    
    
    
    
    
    
    
    
    
    
    (136
    )Net (loss) income attributable
to Centennial
    
    $
    (8,427
    )
    
    $
    19,458
    
    
    $
    19,458
    
    
    $
    19,458
    
    
    $
    (30,489
    )
    
    $
    19,458
 17




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
For the Three Months Ended August 31, 2009
 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
    
    $
    (8,427
    )
    
    $
    19,458
    
    
    $
    19,594
    
    
    $
    19,458
    
    
    $
    (30,489
    )
    
    $
    19,594Adjustments to reconcile net (loss)
income to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    15,187
    
    
    
    
    
    
    
    16,500
    
    
    
    
    
    
    
    
    
    
    
    31,687Stock-based compensation expense
    
    
    978
    
    
    
    
    
    
    
    1,051
    
    
    
    
    
    
    
    
    
    
    
    2,029Excess tax benefit from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )Equity in undistributed earnings
(loss) of subsidiaries
    
    
    
    
    
    
    19,458
    
    
    
    (8,427
    )
    
    
    19,458
    
    
    
    (30,489
    )
    
    
    Loss on disposition of assets
    
    
    114
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    122Changes in assets and liabilities, net
of effects of acquisitions and
dispositions and other
    
    
    12,716
    
    
    
    (31,531
    )
    
    
    (15,516
    )
    
    
    (41,613
    )
    
    
    70,278
    
    
    
    (5,666
    )NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
    
    
    20,568
    
    
    
    7,385
    
    
    
    13,194
    
    
    
    (2,697
    )
    
    
    9,300
    
    
    
    47,750INVESTING ACTIVITIES:Proceeds from disposition of assets,
net of cash expenses
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22Capital expenditures
    
    
    (9,372
    )
    
    
    (7,636
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,008
    )NET CASH USED IN INVESTING
ACTIVITIES
    
    
    (9,372
    )
    
    
    (7,614
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,986
    )FINANCING ACTIVITIES:Repayment of debt
    
    
    
    
    
    
    
    
    
    
    (898
    )
    
    
    
    
    
    
    
    
    
    
    (898
    )Proceeds from the exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250
    
    
    
    
    
    
    
    250Excess tax benefit from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    16Cash (paid to) received from affiliates
    
    
    (10,204
    )
    
    
    229
    
    
    
    16,844
    
    
    
    2,431
    
    
    
    (9,300
    )
    
    
    NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES
    
    
    (10,204
    )
    
    
    229
    
    
    
    15,946
    
    
    
    2,697
    
    
    
    (9,300
    )
    
    
    (632
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    992
    
    
    
    
    
    
    
    29,140
    
    
    
    
    
    
    
    
    
    
    
    30,132CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
    
    
    67,798
    
    
    
    
    
    
    
    149,696
    
    
    
    
    
    
    
    
    
    
    
    217,494CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    68,790
    
    
    $
    
    
    
    $
    178,836
    
    
    $
    
    
    
    $
    
    
    
    $
    247,626
 18




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##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEET FINANCIAL DATA
As of May 31, 2009
(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
    
    $
    67,798
    
    
    $
    
    
    
    $
    149,696
    
    
    $
    
    
    
    $
    
    
    
    $
    217,494Accounts receivable, net
    
    
    47,723
    
    
    
    
    
    
    
    57,751
    
    
    
    
    
    
    
    
    
    
    
    105,474Inventory  phones and accessories,
net
    
    
    7,340
    
    
    
    
    
    
    
    23,764
    
    
    
    
    
    
    
    
    
    
    
    31,104Prepaid expenses and other current
assets
    
    
    13,767
    
    
    
    
    
    
    
    8,364
    
    
    
    
    
    
    
    
    
    
    
    22,131Total current assets
    
    
    136,628
    
    
    
    
    
    
    
    239,575
    
    
    
    
    
    
    
    
    
    
    
    376,203Property, plant & equipment, net
    
    
    249,137
    
    
    
    
    
    
    
    322,994
    
    
    
    
    
    
    
    
    
    
    
    572,131Debt issuance costs
    
    
    9,589
    
    
    
    
    
    
    
    17,115
    
    
    
    
    
    
    
    
    
    
    
    26,704Restricted cash
    
    
    124
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    124U.S. wireless licenses
    
    
    
    
    
    
    
    
    
    
    402,395
    
    
    
    
    
    
    
    
    
    
    
    402,395Puerto Rico wireless licenses, net
    
    
    
    
    
    
    
    
    
    
    54,159
    
    
    
    
    
    
    
    
    
    
    
    54,159Goodwill
    
    
    10,989
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,989Investment in subsidiaries
    
    
    
    
    
    
    1,026,832
    
    
    
    570,632
    
    
    
    (670,807
    )
    
    
    (926,657
    )
    
    
    Other assets
    
    
    11,017
    
    
    
    
    
    
    
    1,782
    
    
    
    
    
    
    
    
    
    
    
    12,799Total
    
    $
    417,484
    
    
    $
    1,026,832
    
    
    $
    1,608,652
    
    
    $
    (670,807
    )
    
    $
    (926,657
    )
    
    $
    1,455,504LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Accounts payable
    
    $
    6,226
    
    
    $
    
    
    
    $
    6,453
    
    
    $
    
    
    
    $
    
    
    
    $
    12,679Accrued expenses and other current
liabilities
    
    
    120,273
    
    
    
    
    
    
    
    62,271
    
    
    
    
    
    
    
    
    
    
    
    182,544Total current liabilities
    
    
    126,499
    
    
    
    
    
    
    
    68,724
    
    
    
    
    
    
    
    
    
    
    
    195,223Long-term debt
    
    
    794,966
    
    
    
    591,395
    
    
    
    86,609
    
    
    
    548,210
    
    
    
    
    
    
    
    2,021,180Deferred income taxes
    
    
    4,623
    
    
    
    
    
    
    
    150,903
    
    
    
    
    
    
    
    
    
    
    
    155,526Other liabilities
    
    
    7,436
    
    
    
    
    
    
    
    24,532
    
    
    
    
    
    
    
    
    
    
    
    31,968Intercompany
    
    
    23,975
    
    
    
    1,087,824
    
    
    
    1,069,497
    
    
    
    (270,414
    )
    
    
    (1,910,882
    )
    
    
    Redeemable preferred stock
    
    
    643,738
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (643,738
    )
    
    
    Stockholders (deficit) equity:Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,112
    
    
    
    
    
    
    
    1,112Additional paid-in capital
    
    
    (818,330
    )
    
    
    
    
    
    
    818,330
    
    
    
    62,197
    
    
    
    
    
    
    
    62,197Accumulated (deficit) equity
    
    
    (364,831
    )
    
    
    (651,747
    )
    
    
    (611,385
    )
    
    
    (1,010,835
    )
    
    
    1,627,963
    
    
    
    (1,010,835
    )Accumulated other comprehensive loss
    
    
    (592
    )
    
    
    (640
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,232
    )Less: treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,077
    )
    
    
    
    
    
    
    (1,077
    )Total stockholders (deficit)
equity attributable to Centennial
    
    
    (1,183,753
    )
    
    
    (652,387
    )
    
    
    206,945
    
    
    
    (948,603
    )
    
    
    1,627,963
    
    
    
    (949,835
    )Noncontrolling interest in subsidiaries
    
    
    
    
    
    
    
    
    
    
    1,442
    
    
    
    
    
    
    
    
    
    
    
    1,442Total stockholders (deficit) equity
    
    
    (1,183,753
    )
    
    
    (652,387
    )
    
    
    208,387
    
    
    
    (948,603
    )
    
    
    1,627,963
    
    
    
    (948,393
    )Total
    
    $
    417,484
    
    
    $
    1,026,832
    
    
    $
    1,608,652
    
    
    $
    (670,807
    )
    
    $
    (926,657
    )
    
    $
    1,455,504
 19




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
For the Three Months Ended August 31, 2008
 Centennial
    
    
    Centennial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CentennialPuerto Rico
    
    
    Cellular
    
    
    
    
    
    
    Centennial
    
    
    
    
    
    
    CommunicationsOperations
    
    
    Operating
    
    
    Non-
    
    
    Communications
    
    
    
    
    
    
    Corp. andCorp.
    
    
    Co. LLC
    
    
    Guarantors
    
    
    Corp.
    
    
    Eliminations
    
    
    Subsidiaries(Amounts in thousands)Revenue
    
    $
    110,496
    
    
    $
    
    
    
    $
    157,809
    
    
    $
    
    
    
    $
    (3,092
    )
    
    $
    265,213Costs and expenses:Cost of services (exclusive of
depreciation and amortization shown
below)
    
    
    22,601
    
    
    
    
    
    
    
    30,999
    
    
    
    
    
    
    
    (2,924
    )
    
    
    50,676Cost of equipment sold
    
    
    16,470
    
    
    
    
    
    
    
    25,679
    
    
    
    
    
    
    
    
    
    
    
    42,149Sales and marketing
    
    
    11,481
    
    
    
    
    
    
    
    14,388
    
    
    
    
    
    
    
    
    
    
    
    25,869General and administrative
    
    
    22,810
    
    
    
    
    
    
    
    25,454
    
    
    
    
    
    
    
    (168
    )
    
    
    48,096Depreciation and amortization
    
    
    17,649
    
    
    
    
    
    
    
    17,895
    
    
    
    
    
    
    
    
    
    
    
    35,544Loss (gain) on disposition of assets
    
    
    12
    
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    (47
    )91,023
    
    
    
    
    
    
    
    114,356
    
    
    
    
    
    
    
    (3,092
    )
    
    
    202,287Operating income
    
    
    19,473
    
    
    
    
    
    
    
    43,453
    
    
    
    
    
    
    
    
    
    
    
    62,926Income (loss) from investments in
subsidiaries
    
    
    
    
    
    
    7,486
    
    
    
    (11,987
    )
    
    
    7,486
    
    
    
    (2,985
    )
    
    
    Interest expense, net
    
    
    (25,738
    )
    
    
    (11,443
    )
    
    
    (4,261
    )
    
    
    (12,738
    )
    
    
    9,300
    
    
    
    (44,880
    )Intercompany interest allocation
    
    
    
    
    
    
    11,443
    
    
    
    (14,881
    )
    
    
    12,738
    
    
    
    (9,300
    )
    
    
    (Loss) income from continuing
operations before income tax expense
    
    
    (6,265
    )
    
    
    7,486
    
    
    
    12,324
    
    
    
    7,486
    
    
    
    (2,985
    )
    
    
    18,046Income tax expense
    
    
    (5,722
    )
    
    
    
    
    
    
    (4,334
    )
    
    
    
    
    
    
    
    
    
    
    (10,056
    )(Loss) income from continuing
operations
    
    
    (11,987
    )
    
    
    7,486
    
    
    
    7,990
    
    
    
    7,486
    
    
    
    (2,985
    )
    
    
    7,990Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (337
    )
    
    
    
    
    
    
    
    
    
    
    (337
    )Net (loss) income
    
    
    (11,987
    )
    
    
    7,486
    
    
    
    7,653
    
    
    
    7,486
    
    
    
    (2,985
    )
    
    
    7,653Less: Net income attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    (167
    )
    
    
    
    
    
    
    
    
    
    
    (167
    )Net (loss) income attributable to
Centennial
    
    $
    (11,987
    )
    
    $
    7,486
    
    
    $
    7,486
    
    
    $
    7,486
    
    
    $
    (2,985
    )
    
    $
    7,486
 20




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
For the Three Months Ended August 31, 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
    
    $
    (11,987
    )
    
    $
    7,486
    
    
    $
    7,653
    
    
    $
    7,486
    
    
    $
    (2,985
    )
    
    $
    7,653Adjustments to reconcile net (loss)
income to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    17,649
    
    
    
    
    
    
    
    17,895
    
    
    
    
    
    
    
    
    
    
    
    35,544Stock-based compensation expense
    
    
    1,451
    
    
    
    
    
    
    
    1,419
    
    
    
    
    
    
    
    
    
    
    
    2,870Excess tax benefit from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (102
    )
    
    
    
    
    
    
    
    
    
    
    (102
    )Equity in undistributed earnings
(loss) of subsidiaries
    
    
    
    
    
    
    7,486
    
    
    
    (11,987
    )
    
    
    7,486
    
    
    
    (2,985
    )
    
    
    Loss (gain) on disposition of assets
    
    
    12
    
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    (47
    )Changes in assets and liabilities, net
of effects of acquisitions and
dispositions and other
    
    
    24,458
    
    
    
    (14,089
    )
    
    
    (11,818
    )
    
    
    (20,951
    )
    
    
    15,270
    
    
    
    (7,130
    )NET CASH PROVIDED BY (USED
IN)OPERATING ACTIVITIES
    
    
    31,583
    
    
    
    883
    
    
    
    3,001
    
    
    
    (5,979
    )
    
    
    9,300
    
    
    
    38,788INVESTING ACTIVITIES:Proceeds from disposition of assets,
net of cash expenses
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    21Payments for purchase of wireless
spectrum
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )Capital expenditures
    
    
    (11,958
    )
    
    
    
    
    
    
    (8,706
    )
    
    
    
    
    
    
    
    
    
    
    (20,664
    )NET CASH USED IN INVESTING
ACTIVITIES
    
    
    (11,958
    )
    
    
    
    
    
    
    (8,687
    )
    
    
    
    
    
    
    
    
    
    
    (20,645
    )FINANCING ACTIVITIES:Repayment of debt
    
    
    
    
    
    
    
    
    
    
    (724
    )
    
    
    
    
    
    
    
    
    
    
    (724
    )Proceeds from the exercise of employee
stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,161
    
    
    
    
    
    
    
    1,161Excess tax benefit from stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    102Cash (paid to) received from affiliates
    
    
    (8,660
    )
    
    
    (883
    )
    
    
    14,127
    
    
    
    4,716
    
    
    
    (9,300
    )
    
    
    NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES
    
    
    (8,660
    )
    
    
    (883
    )
    
    
    13,403
    
    
    
    5,979
    
    
    
    (9,300
    )
    
    
    539NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    10,965
    
    
    
    
    
    
    
    7,717
    
    
    
    
    
    
    
    
    
    
    
    18,682CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
    
    
    36,630
    
    
    
    
    
    
    
    68,531
    
    
    
    
    
    
    
    
    
    
    
    105,161CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    47,595
    
    
    $
    
    
    
    $
    76,248
    
    
    $
    
    
    
    $
    
    
    
    $
    123,843
 NOTE 11. SUBSEQUENT EVENTS
  21




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 EXECUTIVE OVERVIEW
 Company Overview
     Managements Summary
      22




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##### Table of Contents




    
    Gross postpaid and prepaid wireless additions
    
    Net additions  wireless subscribers
    
    ARPU
    
    Roaming revenue
    
    Penetration  wireless
    
    Postpaid churn  wireless
    
    Average monthly minutes of use per wireless voice 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
      23




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##### Table of Contents



Instant Internet
      CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   
    
    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
 24




---



##### Table of Contents




    
    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
 25




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##### Table of Contents



Stock-Based Compensation
 Share-Based Payment
  Income Taxes
     Accounting for Uncertainty in Income Taxes  an interpretation of SFAS No. 109
 26




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##### Table of Contents



RESULTS OF OPERATIONS
 U.S. Wireless Operations
 Three Months EndedAugust 31,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change(In thousands)Revenue:Service revenue
    
    $
    116,564
    
    
    $
    120,249
    
    
    $
    (3,685
    )
    
    
    (3
    )%Roaming revenue
    
    
    21,449
    
    
    
    15,789
    
    
    
    5,660
    
    
    
    36Equipment sales
    
    
    7,921
    
    
    
    11,769
    
    
    
    (3,848
    )
    
    
    (33
    )Total revenue
    
    
    145,934
    
    
    
    147,807
    
    
    
    (1,873
    )
    
    
    (1
    )Costs and expenses:Cost of services
    
    
    29,108
    
    
    
    28,765
    
    
    
    343
    
    
    
    1Cost of equipment sold
    
    
    15,849
    
    
    
    21,946
    
    
    
    (6,097
    )
    
    
    (28
    )Sales and marketing
    
    
    12,236
    
    
    
    14,154
    
    
    
    (1,918
    )
    
    
    (14
    )General and administrative
    
    
    23,752
    
    
    
    24,354
    
    
    
    (602
    )
    
    
    (2
    )Total costs and expenses
    
    
    80,945
    
    
    
    89,219
    
    
    
    (8,274
    )
    
    
    (9
    )Adjusted operating income(1)
    
    $
    64,989
    
    
    $
    58,588
    
    
    $
    6,401
    
    
    
    11
    %
 
 (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.
  27




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##### Table of Contents



Puerto Rico Wireless Operations
 Three Months EndedAugust 31,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change(In thousands)Revenue:Service revenue
    
    $
    73,346
    
    
    $
    77,696
    
    
    $
    (4,350
    )
    
    
    (6
    )%Roaming revenue
    
    
    2,479
    
    
    
    2,694
    
    
    
    (215
    )
    
    
    (8
    )Equipment sales
    
    
    3,914
    
    
    
    4,442
    
    
    
    (528
    )
    
    
    (12
    )Total revenue
    
    
    79,739
    
    
    
    84,832
    
    
    
    (5,093
    )
    
    
    (6
    )Costs and expenses:Cost of services
    
    
    15,978
    
    
    
    14,767
    
    
    
    1,211
    
    
    
    8Cost of equipment sold
    
    
    15,161
    
    
    
    19,939
    
    
    
    (4,778
    )
    
    
    (24
    )Sales and marketing
    
    
    9,304
    
    
    
    9,614
    
    
    
    (310
    )
    
    
    (3
    )General and administrative
    
    
    16,414
    
    
    
    17,560
    
    
    
    (1,146
    )
    
    
    (7
    )Total costs and expenses
    
    
    56,857
    
    
    
    61,880
    
    
    
    (5,023
    )
    
    
    (8
    )Adjusted operating income(1)
    
    $
    22,882
    
    
    $
    22,952
    
    
    $
    (70
    )
    
    
    (0
    )%
 
 (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. Instant Internet
     Costs and expenses.
  28




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##### Table of Contents



Puerto Rico Broadband Operations
 Three Months EndedAugust 31,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change(In thousands)Revenue:Switched revenue
    
    $
    13,257
    
    
    $
    13,935
    
    
    $
    (678
    )
    
    
    (5
    )%Dedicated revenue
    
    
    20,185
    
    
    
    19,402
    
    
    
    783
    
    
    
    4Other revenue
    
    
    2,772
    
    
    
    2,330
    
    
    
    442
    
    
    
    19Total revenue
    
    
    36,214
    
    
    
    35,667
    
    
    
    547
    
    
    
    2Costs and expenses:Cost of services
    
    
    9,416
    
    
    
    9,754
    
    
    
    (338
    )
    
    
    (3
    )Cost of equipment sold
    
    
    242
    
    
    
    265
    
    
    
    (23
    )
    
    
    (9
    )Sales and marketing
    
    
    1,809
    
    
    
    1,934
    
    
    
    (125
    )
    
    
    (6
    )General and administrative
    
    
    5,378
    
    
    
    3,961
    
    
    
    1,417
    
    
    
    36Total costs and expenses
    
    
    16,845
    
    
    
    15,914
    
    
    
    931
    
    
    
    6Adjusted operating income(1)
    
    $
    19,369
    
    
    $
    19,753
    
    
    $
    (384
    )
    
    
    (2
    )%
 
 (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.
  29




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Weighted Average Debt Outstanding and Interest Expense
 Three Months EndedAugust 31,2009
    
    
    2008
    
    
    Change(In millions)Weighted Average Debt Outstanding
    
    $
    2,022.5
    
    
    $
    2,011.3
    
    
    $
    11.2Weighted Average Gross Interest Rate(1)
    
    
    7.9
    
    
    
    9.0
    %
    
    
    (1.1
    )%Weighted Average Gross Interest Rate(2)
    
    
    7.5
    
    
    
    8.6
    %
    
    
    (1.1
    )%Gross Interest Expense(1)
    
    $
    39.97
    
    
    $
    45.36
    
    
    $
    (5.39
    )Interest Income
    
    $
    .02
    
    
    $
    .48
    
    
    $
    (0.46
    )Net Interest Expense
    
    $
    39.95
    
    
    $
    44.88
    
    
    $
    (4.93
    )
 
 (1)
    
    Including amortization of debt issuance costs of $2.0 million for the three months ended
August 31, 2009 and 2008.(2)
    
    Excluding amortization of debt issuance costs $2.0 million for the three months ended August
31, 2009 and 2008.   30




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##### Table of Contents



Senior Secured Credit Facility
    High-Yield Notes
    Derivative Financial Instruments
   31




---



##### Table of Contents



Collar
    
    CollarFixed
    
    FixedVariable Interest
    
    
    
    
    
    Interest
    
    InterestRate Loan
    
    Amount
    
    Rate
    
    Rate
    
    Trade
    
    Effective
    
    ExpirationBeing Hedged
    
    Hedged
    
    Floor
    
    Cap
    
    Date
    
    Date
    
    DateNovember 2008 CCOC Collar 1
    
    Senior Secured Credit Facility
    
    $
    200.0
    
    
    
    1.76
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    12/31/2008
    
    
    
    9/30/20092008 CPROC Collar
    
    Senior Secured Credit Facility
    
    $
    250.0
    
    
    
    2.43
    %
    
    
    4.00
    %
    
    
    9/26/2008
    
    
    
    9/30/2008
    
    
    
    6/30/2009November 2008 CPROC Collar
    
    Senior Secured Credit Facility
    
    $
    35.5
    
    
    
    1.76
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    12/31/2008
    
    
    
    9/30/2009November 2008 CCOC Collar 2
    
    Senior Secured Credit Facility
    
    $
    25.5
    
    
    
    1.76
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    12/31/2008
    
    
    
    9/30/2009November 2008 CCOC Collar 3
    
    Senior Secured Credit Facility
    
    $
    39.5
    
    
    
    1.81
    %
    
    
    2.25
    %
    
    
    11/25/2008
    
    
    
    11/30/2008
    
    
    
    8/31/2009
       Three Months Ended
    
    
    % of Total CapitalAugust 31, 2009
    
    
    Expenditures(dollar amounts in thousands)U.S. Wireless
    
    $
    7,556
    
    
    
    44.4
    %Puerto Rico Wireless
    
    
    5,592
    
    
    
    32.9Puerto Rico Broadband
    
    
    3,860
    
    
    
    22.7Total capital expenditures
    
    $
    17,008
    
    
    
    100.0
    %Property, plant and equipment, net at August 31, 2009
    
    $
    564,331
     32




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##### 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)
    
    $
    1,925,000
    
    
    $
    275,000
    
    
    $
    275,000
    
    
    $
    1,375,000
    
    
    $
    Interest on long-term debt obligations(1)
    
    
    508,414
    
    
    
    140,222
    
    
    
    265,706
    
    
    
    102,486
    
    
    $
    Operating lease obligations
    
    
    276,983
    
    
    
    33,281
    
    
    
    53,547
    
    
    
    40,409
    
    
    
    149,746Capital lease obligations
    
    
    274,533
    
    
    
    9,094
    
    
    
    18,869
    
    
    
    20,103
    
    
    
    226,467Purchase obligations
    
    
    109,170
    
    
    
    11,702
    
    
    
    23,725
    
    
    
    24,153
    
    
    
    49,590Total contractual cash obligations
    
    
    3,094,100
    
    
    
    469,299
    
    
    
    636,847
    
    
    
    1,562,151
    
    
    
    425,803Sublessor agreements
    
    
    (3,452
    )
    
    
    (1,335
    )
    
    
    (1,611
    )
    
    
    (490
    )
    
    
    (16
    )Net
    
    $
    3,090,648
    
    
    $
    467,964
    
    
    $
    635,236
    
    
    $
    1,561,661
    
    
    $
    425,787
 
 (1)
    
    Interest payments are based on the Companys projected interest rates and estimated principal
amounts outstanding for the periods presented.The liability for income taxes under FIN 48 as of August 31, 2009 of $12,485 is excluded from the
contractual obligations table as the Company is unable to make reasonably reliable estimates of
the period of cash settlement, if any with the respective taxing authority. SUBSEQUENT EVENTS
  33




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CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
 PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
   
    
    the occurrence of any event, change or other circumstance that could give rise to the
termination of our agreement to be acquired by AT&T Inc. (the AT&T Transaction) or the
failure of the AT&T Transaction to close for any other reason;
    
    the outcome of any legal proceeding that has been or may be instituted against Centennial
and others relating to the AT&T Transaction;
    
    the inability to complete the AT&T Transaction due to the failure to satisfy conditions
to consummate the AT&T Transaction;
    
    risks that the AT&T Transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the AT&T Transaction;
    
    business uncertainty and contractual restrictions during the pendency of the AT&T
Transaction, which may adversely affect our relationships with our employees, customers and
suppliers;
    
    the diversion of managements attention to the AT&T Transaction from ongoing business
concerns;
    
    the effect of the announcement and pendency of the AT&T Transaction on our customer and
supplier relationships, operating results and business generally;
    
    the amount of the costs, fees, expenses and charges related to the AT&T Transaction;
    
    the timing of the completion of the AT&T Transaction or the impact of the AT&T
Transaction on our capital resources, cash requirements, profitability, management resources
and liquidity;
    
    the effects of the current recession in the United States and general downturn in the
economy, including the effects on unemployment, consumer confidence, consumer debt levels,
consumer spending and other macroeconomic conditions that could impact the demand for the
products and services we provide and our customers ability to pay for them;
    
    our need to refinance or amend existing indebtedness on or prior to its stated maturity
and the difficulties and illiquidity experienced by the debt/capital markets;
    
    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;
    
    our ability to gain access to the latest technology handsets in a timeframe and at a cost
similar to our competitors;
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##### Table of Contents




    
    our ability to acquire, and the cost of acquiring, additional spectrum in our markets to
support growth and deployment of advanced technologies, including 3G and 4G services;
    
    our ability to successfully deploy and deliver wireless data services to our customers,
including next generation 3G and 4G technology;
    
    the effect of changes in the level of support provided to us by the Universal Service
Fund, or USF;
    
    our ability to grow our subscriber base at a reasonable cost to acquire;
    
    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 ability to successfully integrate any acquired markets or businesses;
    
    the effects of higher than anticipated handset subsidy costs;
    
    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;
    
    the effects of adding new subscribers with lower credit ratings;
    
    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;
    
    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;
    
    the effects of a decline in the market for our Code Division Multiple Access (CDMA)
-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 downturns in the economy, world events, terrorism,
hurricanes, tornadoes, wind storms and other natural disasters;
    
    our ability to generate cash and the availability and cost of additional capital to fund
our operations and our significant planned capital expenditures;
    
    the effects of governmental regulation of the telecommunications industry;
    
    our ability to attract and retain qualified personnel;
    
    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 or our vendors,
including litigation relating to wireless billing, using wireless telephones while operating
an automobile and litigation relating to infringement of patents;
    
    the effects of scientific reports that may demonstrate possible health effects of radio
frequency transmission from use of wireless telephones; and
    
    the influence on us by our significant stockholder and anti-takeover provisions.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    Fiscal Year Ended August 31,2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    Total
    
    
    Fair Value(In thousands)Long-term debt:Fixed rate
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    700,000
    
    
    $
    325,000
    
    
    $
    102,078
    
    
    $
    1,127,078
    
    
    $
    1,142,078Average fixed
interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.0
    %
    
    
    8.1
    %
    
    
    10.0
    %
    
    
    9.5
    %
    
    
    Variable rate
    
    $
    275,000
    
    
    $
    275,000
    
    
    $
    
    
    
    $
    350,000
    
    
    $
    
    
    
    $
    
    
    
    $
    900,000
    
    
    $
    889,500Average variable
interest rate(1)
    
    
    1.3
    %
    
    
    3.1
    %
    
    
    3.8
    %
    
    
    4.2
    %
    
    
    4.5
    %
    
    
    4.7
    %
    
    
    3.0
    %
    
    
    Interest
rate collars:Notional amount
    
    $
    260,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (774
    )Cap (Highest)
    
    
    2.25  4.00
    %Floor (Lowest)
    
    
    1.76  2.43
    %
 
 (1)
    
    Represents the average interest rate before applicable margin on the Senior Secured Credit
Facility debt and the 2013 Holdco Floating Rate Notes.  36




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ITEM 4. CONTROLS AND PROCEDURES
   37




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PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
   
 ITEM 1A. RISK FACTORS
  There are risks and uncertainties associated with our proposed acquisition by AT&T.
   
 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
  
 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.
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##### Table of Contents



SIGNATURES
   CENTENNIAL COMMUNICATIONS CORP.By:
    /s/ Thomas J. FitzpatrickThomas J. FitzpatrickExecutive Vice President,
Chief Financial Officer
(Chief Financial Officer)By:
    /s/ Francis P. HuntFrancis P. HuntSenior Vice President  Controller
(Chief Accounting Officer) 39