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UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549

FORM 10-Q

(MarkOne)

|        |                                                                                                                               |
|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   | QUARTERLYREPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934for the quarterly period ended March 31, 2005 |

OR

|        |                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for thetransition period from                          to                         |

COMMISSION FILENUMBER: 333-123755

AIRGATE PCS,INC.

(Exact name of registrant asspecified in its charter)

|                                |  |                                     |  |  |  |  |
|--------------------------------|--|-------------------------------------|--|--|--|--|
| DELAWARE                       |  | 20-2156350                          |
| (Stateor other jurisdiction of |  | (I.R.S. Employer IdentificationNo.) |
| incorporation ororganization)  |  |
|                                |

5225 SOUTH LOOP 289, SUITE120LUBBOCK, TEXAS79424

(Address of principalexecutive offices, including zip code)

(806)722-1100

(Registrant'stelephone number, including areacode)

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filingrequirements for the past 90 days.

YES     NO

Indicate by check mark whether the registrant isan accelerated filer (as defined in Rule 12b-2 of the ExchangeAct).

YES     NO 

There iscurrently no public market for the registrant's commonstock.

As of May 13, 2005, 1,000 shares of common stock,$0.01 par value per share, were issued andoutstanding.

The registrant meets the conditions set forthin General Instructions H(1)(a) and (b) of Form 10-Q and is thereforefiling this form with the reduced disclosureformat.

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AIRGATEPCS, INC.

TABLE OFCONTENTS

|            |  |                                                                                                                                                                                                            |    |        |        |        |  |  |  |  |
|------------|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|--------|--------|--------|--|--|--|--|
|       |  |                                                                                                                                                                                                       |    | PAGE   |
| PARTI      |  | FINANCIALINFORMATION                                                                                                                                                                                       |    |   |   |   |
| Item 1.    |  | FinancialStatements                                                                                                                                                                                        |    |   |   |   |
|       |  | Consolidated BalanceSheets at March 31, 2005 and December 31, 2004(unaudited)                                                                                                                              |    |   | 3      |   |
|       |  | ConsolidatedStatements of Operations for the period from acquisition toMarch 31, 2005 and for the period from January 1, 2005 toFebruary 15, 2005 and for the three months ended March 31,2004 (unaudited) |    |   | 4      |   |
|       |  | ConsolidatedStatements of Cash Flows for the period from acquisition toMarch 31, 2005 and for the period from January 1, 2005 toFebruary 15, 2005 and for the three months ended March 31, 2004(unaudited) |    |   | 5      |   |
|       |  | Notes to theConsolidated FinancialStatements                                                                                                                                                               |    |   | 6      |   |
| Item2.     |  | Management's Discussion and Analysis of FinancialCondition and Results of Operations                                                                                                                       |    |   | 18     |   |
| Item3.     |  | Quantitative and Qualitative Disclosures About MarketRisk                                                                                                                                                  |    |   | 26     |   |
| Item 4.    |  | Controls andProcedures                                                                                                                                                                                     |    |   | 26     |   |
| PARTII     |  | OTHER INFORMATION                                                                                                                                                                                          |    |
| Item 1.    |  | LegalProceedings                                                                                                                                                                                           |    |   | 28     |   |
| Item 2.    |  | UnregisteredSales of Equity Securities and Use ofProceeds                                                                                                                                                  |    |   | 28     |   |
| Item 3.    |  | Defaults UponSenior Securities                                                                                                                                                                             |    |   | 28     |   |
| Item4.     |  | Submission of Matters to a Vote of SecurityHolders                                                                                                                                                         |    |   | 28     |   |
| Item 5.    |  | OtherInformation                                                                                                                                                                                           |    |   | 28     |   |
| Item6.     |  | Exhibits                                                                                                                                                                                                   |    |   | 28     |   |
| SIGNATURES |  |                                                                                                                                                                                                       | 29 |   |
|            |

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PART I –FINANCIAL INFORMATIONITEM 1.    FINANCIALSTATEMENTS

AIRGATE PCS, INC. CONSOLIDATED BALANCESHEETS (UNAUDITED)(dollars in thousands, except shareinformation)

|                                                                                                                                                   |  |               |         |                  |  |        |            |         |  |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--|---------------|---------|------------------|--|--------|------------|---------|--|--|
|                                                                                                                                              |  | Company       |         | OldAirGate       |
|                                                                                                                                              |  | March31, 2005 |         | December 31,2004 |
| ASSETS                                                                                                                                            |  |          |    |             |  |   |       |    |
| Currentassets:                                                                                                                                    |  |          |    |             |  |   |       |    |
| Cash and cashequivalents                                                                                                                          |  | $             | 13,229  |             |  | $      | 15,917     |    |
| Shortterminvestments                                                                                                                              |  |          | 44,566  |             |  |   | 94,059     |    |
| Customeraccounts receivable,net                                                                                                                   |  |          | 21,704  |             |  |   | 20,848     |    |
| ReceivablefromSprint                                                                                                                              |  |          | 5,566   |             |  |   | 5,671      |    |
| Inventory                                                                                                                                         |  |          | 5,566   |             |  |   | 4,672      |    |
| Prepaidexpenses and otherassets                                                                                                                   |  |          | 6,772   |             |  |   | 3,991      |    |
| Deferredcustomer acquisitioncosts                                                                                                                 |  |          | 120     |             |  |   | —    |    |
| Deferredtaxasset                                                                                                                                  |  |          | 3,645   |             |  |   | —    |    |
| Totalcurrentassets                                                                                                                                |  |          | 101,168 |             |  |   | 145,158    |    |
| Propertyand equipment,net                                                                                                                         |  |          | 81,109  |             |  |   | 130,809    |    |
| Debtissuance costs,net                                                                                                                            |  |          | — |             |  |   | 4,621      |    |
| Goodwill                                                                                                                                          |  |          | 253,161 |             |  |   | —    |    |
| Intangibleassets,net                                                                                                                              |  |          | 409,293 |             |  |   | —    |    |
| Othernoncurrentassets                                                                                                                             |  |          | 1,192   |             |  |   | 2,645      |    |
| Totalassets                                                                                                                                       |  | $             | 845,923 |             |  | $      | 283,233    |    |
| LIABILITIESAND STOCKHOLDERS' EQUITY(DEFICIT)                                                                                                      |  |          |    |             |  |   |       |    |
| Currentliabilities:                                                                                                                               |  |          |    |             |  |   |       |    |
| Accountspayable                                                                                                                                   |  | $             | 6,177   |             |  | $      | 1,275      |    |
| Accruedexpenses                                                                                                                                   |  |          | 14,719  |             |  |   | 17,245     |    |
| PayabletoSprint                                                                                                                                   |  |          | 20,373  |             |  |   | 24,348     |    |
| PayabletoParent                                                                                                                                   |  |          | 2,809   |             |  |   | —    |    |
| Interestpayable                                                                                                                                   |  |          | 6,064   |             |  |   | 9,388      |    |
| Deferredrevenue                                                                                                                                   |  |          | 6,426   |             |  |   | 9,567      |    |
| Totalcurrentliabilities                                                                                                                           |  |          | 56,568  |             |  |   | 61,823     |    |
| Longterm liabilities:                                                                                                                             |  |          |    |             |  |   |       |    |
| Othernoncurrentliabilities                                                                                                                        |  |          | 821     |             |  |   | 3,363      |    |
| Deferredtaxliability                                                                                                                              |  |          | 32,045  |             |  |   | —    |    |
| Seniornotes                                                                                                                                       |  |          | 347,950 |             |  |   | 312,478    |    |
| Totallong termliabilities                                                                                                                         |  |          | 380,816 |             |  |   | 315,841    |    |
| Totalliabilities                                                                                                                                  |  |          | 437,384 |             |  |   | 377,664    |    |
| Commitmentsand contingencies (see Note14)                                                                                                         |  |          | — |             |  |   | —    |    |
| Stockholders'equity (deficit):                                                                                                                    |  |          |    |             |  |   |       |    |
| Preferredstock, $.01 par value; 1,000,000 shares authorized; no sharesissued                                                                      |  |          | — |             |  |   | —    |    |
| Commonstock, $.01 par value; 1,000 and 30,000,000 shares authorized,respectively; 1,000 and 11,827,483 shares issued and outstanding,respectively |  |          | — |             |  |   | 118        |    |
| Additionalpaid-incapital                                                                                                                          |  |          | 414,356 |             |  |   | 1,047,676  |    |
| Accumulateddeficit                                                                                                                                |  |          | (5,817  | )           |  |   | (1,142,225 | )  |
| Totalstockholders' equity(deficit)                                                                                                                |  |          | 408,539 |             |  |   | (94,431    | )  |
| Totalliabilities and stockholders' equity(deficit)                                                                                                |  | $             | 845,923 |             |  | $      | 283,233    |    |
|                                                                                                                                                   |

Theaccompanying notes are an integral part of the consolidated financialstatements.

3

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AIRGATE PCS, INC. CONSOLIDATEDSTATEMENTS OF OPERATIONS (UNAUDITED)(dollars inthousands, except per shareamounts)

|                                                                                   |  |                                                              |         |                                                         |  |                                         |            |         |  |        |           |         |  |  |
|-----------------------------------------------------------------------------------|--|--------------------------------------------------------------|---------|---------------------------------------------------------|--|-----------------------------------------|------------|---------|--|--------|-----------|---------|--|--|
|                                                                              |  | Company                                                      |         | OldAirGate                                              |
|                                                                              |  | For theperiod from acquisition (see Note 4) to March 31,2005 |         | For the period from January 1, 2005 toFebruary 15, 2005 |  | For the three months endedMarch 31,2004 |
| Revenues:                                                                         |  |                                                         |    |                                                    |  |                                    |       |    |  |   |      |    |
| Subscriberrevenues                                                                |  | $                                                            | 34,949  |                                                    |  | $                                       | 34,680     |    |  | $      | 61,656    |    |
| Roamingand wholesalerevenues                                                      |  |                                                         | 8,140   |                                                    |  |                                    | 10,972     |    |  |   | 13,498    |    |
| Servicerevenues                                                                   |  |                                                         | 43,089  |                                                    |  |                                    | 45,652     |    |  |   | 75,154    |    |
| Productsales                                                                      |  |                                                         | 1,648   |                                                    |  |                                    | 3,211      |    |  |   | 2,882     |    |
| Totalrevenue                                                                      |  |                                                         | 44,737  |                                                    |  |                                    | 48,863     |    |  |   | 78,036    |    |
| Costsand expenses:                                                                |  |                                                         |    |                                                    |  |                                    |       |    |  |   |      |    |
| Costof service and operations (excluding depreciation shown separatelybelow)      |  |                                                         | 21,361  |                                                    |  |                                    | 23,280     |    |  |   | 39,422    |    |
| Costof products sold (excluding depreciation shown separatelybelow)               |  |                                                         | 4,428   |                                                    |  |                                    | 5,699      |    |  |   | 7,202     |    |
| Sellingand marketing (excluding depreciation shown separatelybelow)               |  |                                                         | 8,757   |                                                    |  |                                    | 9,372      |    |  |   | 11,916    |    |
| Generaland administrative expenses (excluding depreciation shown separatelybelow) |  |                                                         | 2,899   |                                                    |  |                                    | 3,046      |    |  |   | 6,337     |    |
| Mergerrelatedexpenses                                                             |  |                                                         | — |                                                    |  |                                    | 23,748     |    |  |   | —   |    |
| Depreciationandamortization                                                       |  |                                                         | 14,305  |                                                    |  |                                    | 7,914      |    |  |   | 11,892    |    |
| (Gain)loss on disposal of property andequipment                                   |  |                                                         | — |                                                    |  |                                    | 20         |    |  |   | (3        | )  |
| Totalcosts andexpenses                                                            |  |                                                         | 51,750  |                                                    |  |                                    | 73,079     |    |  |   | 76,766    |    |
| Income(loss) fromoperations                                                       |  |                                                         | (7,013  | )                                                  |  |                                    | (24,216    | )  |  |   | 1,270     |    |
| Interestand otherincome                                                           |  |                                                         | 319     |                                                    |  |                                    | 346        |    |  |   | 165       |    |
| Interestexpense                                                                   |  |                                                         | (2,768  | )                                                  |  |                                    | (3,921     | )  |  |   | (11,311   | )  |
| Lossbefore incometaxes                                                            |  |                                                         | (9,462  | )                                                  |  |                                    | (27,791    | )  |  |   | (9,876    | )  |
| Incometaxbenefit                                                                  |  |                                                         | 3,645   |                                                    |  |                                    | —    |    |  |   | —   |    |
| Netloss                                                                           |  | $                                                            | (5,817  | )                                                  |  | $                                       | (27,791    | )  |  | $      | (9,876    | )  |
| Netloss per common share, basic anddiluted                                        |  |                                                         |    |                                                    |  | $                                       | (2.35      | )  |  | $      | (1.21     | )  |
| Weightedaverage common shares outstanding, basic anddiluted                       |  |                                                         |    |                                                    |  |                                    | 11,831,973 |    |  |   | 8,152,162 |    |
|                                                                                   |

Theaccompanying notes are an integral part of the consolidated financialstatements.

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AIRGATE PCS, INC. CONSOLIDATEDSTATEMENTS OF CASH FLOWS (UNAUDITED)(dollars inthousands)

|                                                                                         |  |                                                              |          |                                                         |  |                                          |         |         |  |        |          |         |  |  |
|-----------------------------------------------------------------------------------------|--|--------------------------------------------------------------|----------|---------------------------------------------------------|--|------------------------------------------|---------|---------|--|--------|----------|---------|--|--|
|                                                                                    |  | Company                                                      |          | OldAirGate                                              |
|                                                                                    |  | For theperiod from acquisition (see Note 4) to March 31,2005 |          | For the period from January 1, 2005 toFebruary 15, 2005 |  | For the three months endedMarch 31, 2004 |
| Cash flows fromoperatingactivities:                                                     |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Netloss                                                                                 |  | $                                                            | (5,817   | )                                                  |  | $                                        | (27,791 | )  |  | $      | (9,876   | )  |
| Adjustmentsto reconcile net loss to net cash provided by (used in) operatingactivities: |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Non-cashcompensation expense(benefit)                                                   |  |                                                         | —  |                                                    |  |                                     | (823    | )  |  |   | 196      |    |
| Non-cashaccretion of asset retirementobligations                                        |  |                                                         | 15       |                                                    |  |                                     | 56      |    |  |   | 26       |    |
| Provisionfor baddebts                                                                   |  |                                                         | (54      | )                                                  |  |                                     | (955    | )  |  |   | (1,123   | )  |
| Depreciationand amortization of property andequipment                                   |  |                                                         | 3,599    |                                                    |  |                                     | 7,914   |    |  |   | 11,892   |    |
| Amortizationof intangibleassets                                                         |  |                                                         | 10,707   |                                                    |  |                                     | — |    |  |   | —  |    |
| Amortizationof financing costs included in interestexpense                              |  |                                                         | —  |                                                    |  |                                     | 457     |    |  |   | 324      |    |
| Amortizationof debtpremium                                                              |  |                                                         | (441     | )                                                  |  |                                     | — |    |  |   | —  |    |
| Deferredincometaxes                                                                     |  |                                                         | (3,645   | )                                                  |  |                                     | — |    |  |   | —  |    |
| Interestaccreted on discountnotes                                                       |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | 5,216    |    |
| (Gain)loss on disposal of property andequipment                                         |  |                                                         | —  |                                                    |  |                                     | 20      |    |  |   | (3       | )  |
| (Increase)decreasein:                                                                   |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Receivablefrom/payable toParent                                                         |  |                                                         | 2,809    |                                                    |  |                                     | — |    |  |   | —  |    |
| Receivables                                                                             |  |                                                         | 13,565   |                                                    |  |                                     | (2,892  | )  |  |   | 1,414    |    |
| Inventory                                                                               |  |                                                         | (1,235   | )                                                  |  |                                     | 341     |    |  |   | (863     | )  |
| Prepaidexpenses and otherassets                                                         |  |                                                         | (2,560   | )                                                  |  |                                     | (2,132  | )  |  |   | 511      |    |
| Increase(decrease)in:                                                                   |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Accountspayable and accruedexpenses                                                     |  |                                                         | (21,562  | )                                                  |  |                                     | 7,070   |    |  |   | 5,299    |    |
| Netcash provided by (used in) operatingactivities                                       |  |                                                         | (4,619   | )                                                  |  |                                     | (18,735 | )  |  |   | 13,013   |    |
| Cashflows from investingactivities:                                                     |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Purchasesof property andequipment                                                       |  |                                                         | (3,599   | )                                                  |  |                                     | (8,611  | )  |  |   | (5,762   | )  |
| Cashrecorded in businesscombination                                                     |  |                                                         | 36,389   |                                                    |  |                                     | — |    |  |   | —  |    |
| Changein short terminvestments                                                          |  |                                                         | 58       |                                                    |  |                                     | 49,435  |    |  |   | —  |    |
| Netcash provided by (used in) investingactivities                                       |  |                                                         | 32,848   |                                                    |  |                                     | 40,824  |    |  |   | (5,762   | )  |
| Cashflows from financingactivities:                                                     |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Repaymentsof borrowings under senior secureddebt                                        |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | (13,255  | )  |
| Debtissuancecosts                                                                       |  |                                                         | —  |                                                    |  |                                     | (1,629  | )  |  |   | (693     | )  |
| Capitaldistribution toParent                                                            |  |                                                         | (15,000  | )                                                  |  |                                     | — |    |  |   | —  |    |
| Stockoptionsexercised                                                                   |  |                                                         | —  |                                                    |  |                                     | 12      |    |  |   | 5        |    |
| Equityissuancecosts                                                                     |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | (4,758   | )  |
| Netcash used in financingactivities                                                     |  |                                                         | (15,000  | )                                                  |  |                                     | (1,617  | )  |  |   | (18,701  | )  |
|                                                                                    |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Netincrease (decrease) in cash and cashequivalents                                      |  |                                                         | 13,229   |                                                    |  |                                     | 20,472  |    |  |   | (11,450  | )  |
| Cashand cash equivalents at beginning ofperiod                                          |  |                                                         | —  |                                                    |  |                                     | 15,917  |    |  |   | 60,043   |    |
| Cashand cash equivalents at end ofperiod                                                |  | $                                                            | 13,229   |                                                    |  | $                                        | 36,389  |    |  | $      | 48,593   |    |
| Supplementaldisclosure of non-cash financing and investingactivities:                   |  |                                                         |     |                                                    |  |                                     |    |    |  |   |     |    |
| Capitalinfusion in businesscombination                                                  |  | $                                                            | 333,416  |                                                    |  | $                                        | — |    |  | $      | —  |    |
| Fair value of assets recorded inbusinesscombination                                     |  |                                                         | 881,511  |                                                    |  |                                     | — |    |  |   | —  |    |
| Fairvalue of liabilities recorded in businesscombination                                |  |                                                         | (442,335 | )                                                  |  |                                     | — |    |  |   | —  |    |
| Assetretirement obligationscapitalized                                                  |  |                                                         | 6        |                                                    |  |                                     | — |    |  |   | —  |    |
| Changein accounts payable for purchases of property andequipment                        |  |                                                         | 4,018    |                                                    |  |                                     | — |    |  |   | —  |    |
| Capitalizedinterest                                                                     |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | 41       |    |
| Netcarrying value of notesexchanged                                                     |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | (264,888 | )  |
| Unamortizedfinancing costs of old notesexchanged                                        |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | 3,755    |    |
| Issuanceof newnotes                                                                     |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | 159,035  |    |
| Carryingvalue difference on newnotes                                                    |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | (24,686  | )  |
| Commonstock issued in exchange of oldnotes                                              |  |                                                         | —  |                                                    |  |                                     | — |    |  |   | 126,784  |    |
|                                                                                         |

Theaccompanying notes are an integral part of the consolidated financialstatements.

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AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS(UNAUDITED)

(dollarsin thousands, except as noted)

1.    BASIS OF PRESENTATION OF UNAUDITED INTERIM FINANCIALINFORMATION

On December 7, 2004, AirGate PCS, Inc.("Old AirGate") entered into an Agreement andPlan of Merger with Alamosa Holdings, Inc. ("AlamosaHoldings") and A-Co. Merger Sub, Inc.("A-Co."), a direct wholly-owned subsidiaryof Alamosa Holdings. Pursuant to the merger agreement, Old AirGatemerged with and into A-Co. on February 15, 2005 with A-Co. survivingthe merger. Immediately after the closing of the transaction, A-Co. wasrenamed AirGate PCS, Inc. ("AirGate") andremains a wholly-owned subsidiary of Alamosa Holdings. In connectionwith the acquisition of Old AirGate, the purchase price was allocatedto the assets and liabilities of AirGate based on fair value resultingin a new basis of accounting. AirGate is referred to in theseconsolidated financial statements as the"Company," "we,""us" or "our."

The unaudited consolidated balance sheets at March 31, 2005 andDecember 31, 2004, the unaudited consolidated statements of operationsfor the period from acquisition to March 31, 2005 and for the periodfrom January 1, 2005 to February 15, 2005 and for the three monthsended March 31, 2004, the unaudited consolidated statements of cashflows for the period from acquisition to March 31, 2005 and for theperiod from January 1, 2005 to February 15, 2005 and for the threemonths ended March 31, 2004 and related footnotes have been prepared inaccordance with accounting principles generally accepted in the UnitedStates of America for interim financial information and Article 10 ofRegulation S-X. Accordingly, they do not include all of the informationand footnotes required annually by accounting principles generallyaccepted in the United States of America. In the opinion of management,the interim data includes all adjustments (consisting of only normallyrecurring adjustments) necessary for a fair statement of the resultsfor the interim periods. Operating results for the period ended March31, 2005 are not necessarily indicative of results that may be expectedfor the year ending December 31, 2005.

Old AirGate basic anddiluted net loss per share of common stock for the three months endedMarch 31, 2004 and for the period from January 1, 2005 to February 15,2005 is computed by dividing net loss attributable to commonstockholders for each period by the weighted-average outstanding numberof common shares. No conversion of common stock equivalents has beenassumed in the calculations since the effect would be antidilutive. Asa result, the number of weighted-average outstanding common shares aswell as the amount of net loss per share are the same for basic anddiluted net loss per share calculations. Common stock equivalentsexcluded from diluted net loss per share calculations for the threemonths ended March 31, 2004 included outstanding options to purchase186,292 shares of common stock at March 31, 2004. All outstandingoptions were terminated on February 15, 2005. Additionally, commonstock equivalents excluded from diluted net loss per share calculationsconsists of the impact of outstanding warrants to purchase 137,530shares of common stock as of March 31, 2004 and 135,515 shares ofcommon stock as of February 15, 2005.

Company basic and dilutednet loss per share for the period from inception to March 31, 2005 isnot presented as the Company is now a wholly-owned subsidiary ofAlamosa Holdings.

Certain reclassifications have been made toOld AirGate balances to conform to Company presentation.

2.    ORGANIZATION AND BUSINESS OPERATIONS

AirGate is awholly-owned subsidiary of Alamosa Holdings and a PCS Affiliate ofSprint with the exclusive right to provide wireless personalcommunications services under the Sprint brand name in a territoryencompassing approximately 7.4 million residents. The Company wasformed in December 2004 as A-Co. Merger Sub, Inc. in anticipation ofthe acquisition of Old AirGate on February 15, 2005, as discussed inNote 4. Subsequent to the closing of the transaction, A-Co. changedit's name to 

6

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AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

AirGate PCS, Inc. The Company provideswireless personal communications services, commonly referred to as PCS,in the southeastern United States. The accompanying consolidatedfinancial statements include the accounts of AirGate and itswholly-owned restricted subsidiaries, AGW Leasing Company, Inc.,AirGate Service Company, Inc. and AirGate Network Services, LLC.

3.    LIQUIDITY AND CAPITAL RESOURCES

Old AirGatefinanced their operations through debt financing and through proceedsgenerated from public offerings of Old AirGate common stock and cashprovided by operations. The proceeds from these transactions and cashprovided by operations have been used to fund the build-out of theCompany's portion of the PCS network of Sprint, subscriberacquisition costs and working capital.

As of March 31, 2005, theCompany had $13 million in cash and cash equivalents as well as $45million in short-term investments which the Company believes will besufficient to fund expected capital expenditures and to cover itsworking capital and debt service requirements for at least the next 12months.

The Company's future liquidity will be dependenton a number of factors influencing its projections of operating cashflows, including those related to subscriber growth, average revenueper user, average monthly churn and cost per gross addition. Shouldactual results differ significantly from these assumptions, theCompany's liquidity position could be adversely affected and itcould be in a position that would require it to raise additionalcapital which may or may not be available on terms acceptable to theCompany, if at all, and could have a material adverse effect on theCompany's ability to achieve its intended businessobjectives.

4.    MERGERS AND ACQUISITIONS

Asdiscussed in Note 1, Old AirGate was acquired by Alamosa Holdings onFebruary 15, 2005. The transaction was accounted for under the purchasemethod of accounting and the results of the Company are included in theconsolidated financial statements of Alamosa Holdings from the date ofacquisition.

The merger consideration consisted of 26.1 millionshares of Alamosa Holdings' common stock valued at $12.66 pershare, representing the average closing price of Alamosa Holdingscommon stock from February 10, 2005 to February 15, 2005, andapproximately $100.0 million in cash plus direct transaction costs ofapproximately $6.1 million. Alamosa Holdings also assumed the debt ofOld AirGate in the transaction, which had a fair value of approximately$348.4 million as of February 15, 2005.

The Company is in theprocess of obtaining an independent valuation to allocate the purchaseprice. The preliminary result of the allocation is asfollows:

7

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

|                                                    |  |        |         |        |  |  |
|----------------------------------------------------|--|--------|---------|--------|--|--|
| Consideration:                                     |  |
| AlamosaHoldings common stock issued                |  | $      | 330,848 |   |
| Commonstock warrants assumed by AlamosaHoldings    |  |   | 383     |   |
| Cashconsideration                                  |  |   | 100,000 |   |
| Totalconsideration                                 |  |   | 431,231 |   |
| Directtransaction costs                            |  |   | 6,143   |   |
| Long-termdebt assumed (at fairvalue)               |  |   | 348,391 |   |
| Other liabilitiesassumed (including deferredtaxes) |  |   | 96,129  |   |
| Totalpurchase price                                |  |   | 881,894 |   |
| Allocatedto:                                       |  |   |    |   |
| Currentassets                                      |  |   | 130,682 |   |
| Property andequipment                              |  |   | 77,085  |   |
| Other tangible non-currentassets                   |  |   | 966     |   |
| Intangible assets (other thangoodwill)             |  |   | 420,000 |   |
| Goodwill                                           |  | $      | 253,161 |   |
|                                                    |

Theinformation presented above is preliminary and is based on theCompany's estimates of fair value. These estimates may changeupon the completion of the independent valuation.

As a result ofthe acquisition of Old AirGate by Alamosa Holdings, the Companyimplemented a plan to terminate certain employees of Old AirGate aswell as to close certain locations. In connection with this plan, theCompany established reserves for severance and related costs such aspayments in connection with cancellation of employee stock options andrestricted stock units as well as reserves for future lease paymentsassociated with an operating lease on a facility to be closed (net ofestimated sub-lease income) in May 2005. Activity with respect to thesereservesfollows:

|                               |  |                                                            |         |                                                       |  |        |         |         |  |  |
|-------------------------------|--|------------------------------------------------------------|---------|-------------------------------------------------------|--|--------|---------|---------|--|--|
|                          |  | Company                                                    |         | OldAirGate                                            |
|                          |  | For theperiod fromacquisition (see Note4) to March 31,2005 |         | For the period fromJanuary 1, 2005 toFebruary15, 2005 |
| Severance and relatedcosts:   |  |
| Balance at beginning ofperiod |  | $                                                          | 2,184   |                                                  |  | $      | — |    |
| Netcharges(benefit)           |  |                                                       | — |                                                  |  |   | 16,778  |    |
| Payments                      |  |                                                       | (1,555  | )                                                |  |   | (14,594 | )  |
| Balanceat end ofperiod        |  | $                                                          | 629     |                                                  |  | $      | 2,184   |    |
| Futurelease payments,net:     |  |                                                       |    |                                                  |  |   |    |    |
| Balance at beginningof period |  | $                                                          | 1,474   |                                                  |  | $      | — |    |
| Netcharges(benefit)           |  |                                                       | — |                                                  |  |   | 1,474   |    |
| Payments                      |  |                                                       | — |                                                  |  |   | — |    |
| Balanceat end ofperiod        |  | $                                                          | 1,474   |                                                  |  | $      | 1,474   |    |
|                               |

5.    STOCK-BASEDCOMPENSATION

The Company and Old AirGate have elected to followAccounting Principles Board ("APB") OpinionNo. 25, "Accounting for Stock Issued toEmployees" and related interpretations in accounting forits employee stock options. The non-cash compensation benefit includedin Old AirGate's consolidated statements of operations for theperiod from January 1, 2005 to February 15, 2005 of $823 represents thereversal of previously recorded variable non-cash compensation expense

8

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

associated with restricted stock unit awardsthat were cancelled and settled in cash on February 15, 2005 by OldAirGate immediately prior to the merger with Alamosa Holdings. Non-cashcompensation expense in the three month period ended March 31, 2004 isrelated to the vesting of employee stock options that had been issuedwith an exercise price less than the market price on the date of grant.No stock-based compensation expense was recorded in the period fromacquisition to March 31, 2005. The following table illustrates theeffect on Old AirGate net loss and Old AirGate net loss per share ifOld AirGate had applied the fair value recognition provisions ofStatement of Financial Accounting Standards("SFAS") No. 123, "Accountingfor Stock-Based Compensation," to stock-based employeecompensation:

|                                                                                                                              |  |                                                   |         |                                       |  |        |         |         |  |  |
|------------------------------------------------------------------------------------------------------------------------------|--|---------------------------------------------------|---------|---------------------------------------|--|--------|---------|---------|--|--|
|                                                                                                                         |  | OldAirGate                                        |
|                                                                                                                         |  | Fortheperiod fromJanuary 1,2005 toFebruary15,2005 |         | For the threemonths endedMarch31,2004 |
| Net loss – asreported                                                                                                  |  | $                                                 | (27,791 | )                                |  | $      | (9,876  | )  |
| Add:stock-based employee compensation included in reported net loss, net ofrelated tax                                       |  |                                              | 9,870   |                                  |  |   | 196     |    |
| Deduct:stock-based employee compensation expense determined under fair valuemethod for all awards, net of related taxeffects |  |                                              | (9,870  | )                                |  |   | (1,397  | )  |
| Netloss – proforma                                                                                                     |  | $                                                 | (27,791 | )                                |  | $      | (11,077 | )  |
| Netloss per share – as reported Basic anddiluted                                                                       |  | $                                                 | (2.35   | )                                |  | $      | (1.21   | )  |
| Netloss per share – pro forma Basic anddiluted                                                                         |  | $                                                 | (2.35   | )                                |  | $      | (1.36   | )  |
|                                                                                                                              |

Alloutstanding Old AirGate stock options were terminated prior to closingthe acquisition on February 15, 2005. Options that had exercise pricesbelow the market price of Old AirGate common stock at that date weresettled in cash. The compensation expense associated with this payoutof approximately $6.7 million is included in merger related expenses inthe period from January 1, 2005 to February 15, 2005. Additionally, alloutstanding Old AirGate restricted stock units were cancelled onFebruary 15, 2005 and the fair market value of such units was settledin cash at that point. The compensation expense associated with thispayout of approximately $3.8 million is included in merger relatedexpenses in the period from January 1, 2005 to February 15, 2005. Therestricted stock units had been accounted for as variable awards underSFAS 123 and compensation expense had been recorded as an adjustment toequity. As the units were terminated without shares being issued, thecumulative compensation recorded up to the settlement date as anadjustment to equity was reversed and a non-cash compensation benefitof $823 was recorded in the period from January 1, 2005 to February 15,2005. As a result of the above cancellations, the Company has nooutstanding stock-based compensation awards as of March 31, 2005.

6.    ACCOUNTS RECEIVABLE

Customer accountsreceivable – Customer accounts receivable represent amountsowed to the Company by subscribers for PCS service. Customer accountsreceivable do not bear interest.

The amounts presented in theconsolidated balance sheets are net of an allowance for uncollectibleaccounts of $3,054 and $6,220 at March 31, 2005 and December 31, 2004,respectively. 

9

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

Estimates are used in determining theallowance for uncollectible accounts and are based on historicalcollection experience, current trends, credit policy, a percentage ofaccounts receivable by aging category and expectations of future baddebts based on current collection activities. In determining theallowance, the Company considers historical write-offs of itsreceivables as well as historical changes in its credit policies. TheCompany also takes into consideration current trends in the creditquality of its customer base.

Receivable from Sprint –Receivable from Sprint in the accompanying consolidated balancesheets consists of the following:

|                             |  |               |       |                   |  |        |       |        |  |  |
|-----------------------------|--|---------------|-------|-------------------|--|--------|-------|--------|--|--|
|                        |  | Company       |       | OldAirGate        |
|                        |  | March 31,2005 |       | December 31, 2004 |
| Net roamingreceivable       |  | $             | 2,607 |              |  | $      | 2,818 |   |
| Accruedservice revenue      |  |          | 1,360 |              |  |   | 2,038 |   |
| Otheramounts due fromSprint |  |          | 1,599 |              |  |   | 815   |   |
|                        |  | $             | 5,566 |              |  | $      | 5,671 |   |
|                             |

Netroaming receivable includes net travel revenue due from Sprint relativeto PCS subscribers based outside of the Company's licensedterritory who utilize the Company's portion of the PCS network ofSprint. The net roaming receivable is net of amounts owed to Sprintrelative to the Company's subscribers who utilize the PCS networkof Sprint outside of the Company's licensed territory. Inaddition, net roaming receivable also includes amounts due from Sprint,which have been collected from other PCS providers and wholesalecustomers for their customers' usage of the Company'sportion of the PCS network of Sprint. The receivable is recorded netdue to a right of offset with respect to the receivable from/payable toSprint with respect to travel and the fact that the activity hashistorically been settled on a net basis by Sprint.

Accruedservice revenue represents the Company's estimate of airtimeusage and other charges that have been earned but not billed at the endof the period.

Other amounts due from Sprint at March 31, 2005primarily consist of proceeds from the sale of previously charged offcustomer accounts, universal service fund recoveries and interconnectrevenue receivable. Other amounts due from Sprint at December 31, 2004primarily consist of universal service fund recoveries and interconnectrevenue receivable.

7.    PROPERTY AND EQUIPMENT

Property and equipment are stated net of accumulated depreciationand amortization of $3.6 million and $192.8 million at March 31, 2005and December 31, 2004, respectively. In connection with the purchaseprice allocation on February 15, 2005, as discussed in Note 4, propertyand equipment acquired was allocated an estimate of approximately $77.1million in fair value. The final purchase price allocation will bebased on an independent appraisal of the assets.

8.    ASSETRETIREMENT OBLIGATIONS

For the Company's leasedtelecommunications facilities, primarily consisting of cell sites andswitch site operating leases and operating leases for retail and officespace, the Company has adopted the provisions of SFAS No. 143,"Accounting for Asset RetirementObligations." The obligations associated with theCompany's operating leases primarily relate to the restoration ofthe leased sites to specified conditions described in the respectivelease agreements. For purposes of determining the amounts recorded asasset retirement obligations associated with the respective leases, theCompany 

10

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

has estimated the costs by type of lease tobe incurred upon the termination of the lease for restoration costs, asadjusted for expected inflation. These costs have been discounted backto the origination of the lease using an appropriate discount rate todetermine the amount of obligation to be recorded upon the inception ofthe lease. The liability is accreted up to the expected settlementamount over the life of the lease using the effective interest method.A corresponding asset is recorded at the inception of the lease in thesame amount as the asset retirement obligation. This asset isdepreciated using the same method and life of similar network assets orleasehold improvements.

The following table illustrates theactivity with respect to asset retirement obligations for the periodfrom acquisition to March 31, 2005, for the period from January 1, 2005to February 15, 2005 and for the three months ended 2004:

|                                             |  |                                                         |         |                                                    |  |                                        |         |        |  |        |         |        |  |  |
|---------------------------------------------|--|---------------------------------------------------------|---------|----------------------------------------------------|--|----------------------------------------|---------|--------|--|--------|---------|--------|--|--|
|                                        |  | Company                                                 |         | OldAirGate                                         |
|                                        |  | Fortheperiod fromacquisition(See Note 4)to March31,2005 |         | For theperiod fromJanuary 1,2005toFebruary 15,2005 |  | For the threemonthsendedMarch 31, 2004 |
| Balance at beginningofperiod                |  | $                                                       | 575     |                                               |  | $                                      | 519     |   |  | $      | 416     |   |
| Initialobligation recorded during theperiod |  |                                                    | 6       |                                               |  |                                   | — |   |  |   | — |   |
| Obligationssettled during theperiod         |  |                                                    | — |                                               |  |                                   | — |   |  |   | — |   |
| Accretionof obligation during theperiod     |  |                                                    | 15      |                                               |  |                                   | 13      |   |  |   | 26      |   |
| Impact ofrevision inestimates               |  |                                                    | — |                                               |  |                                   | 43      |   |  |   | — |   |
| Balanceat end ofperiod                      |  | $                                                       | 596     |                                               |  | $                                      | 575     |   |  | $      | 442     |   |
|                                             |

9.    GOODWILLAND INTANGIBLE ASSETS

In connection with the merger discussedin Note 4, the Company allocated portions of the purchase price toidentifiable intangible assets consisting of (i) the value of theSprint agreements in place at Old AirGate and (ii) the value of thesubscriber base in place at Old AirGate. In addition to theidentifiable intangibles, goodwill has been recorded in the amount bywhich the purchase price exceeded the fair value of the net assetsacquired, including identified intangibles.

The Company haspreliminarily allocated $210,000 of the purchase price to the value ofthe subscriber base in place at Old AirGate at the time of acquisitionand preliminarily allocated $210,000 to the value of the Sprintagreements in place at Old AirGate at the time of acquisition. Thefinal values will be based on an independent appraisal which iscurrently underway. The subscriber base intangible will be amortizedover the estimated life of the subscribers acquired, or approximately 3years, and the intangible associated with the Sprint agreements inplace will be amortized over the remaining original term of the Sprintagreements assumed in the acquisition, or approximately 13 years.

The Company accounts for goodwill and intangible assets inaccordance with the provisions of SFAS No. 142, "Goodwilland Other Intangible Assets." The provisions of SFAS No.142 (i) prohibit the amortization of goodwill and indefinite-livedintangible assets, (ii) require that goodwill and indefinite-livedintangible assets be tested annually for impairment (and in interimperiods if certain events occur indicating that the carrying value maybe impaired), and (iii) require that reporting units be identified forthe purpose of assessing potential future impairments of goodwill.

11

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

Goodwill and intangible assets consistof:

|                                        |  |              |         |         |  |  |
|----------------------------------------|--|--------------|---------|---------|--|--|
|                                   |  | Company      |
|                                   |  | March31,2005 |
| Goodwill                               |  | $            | 253,161 |    |
| Intangibleassets:                      |  |
| Sprint affiliation and otheragreements |  | $            | 210,000 |    |
| Accumulatedamortization                |  |         | (1,957  | )  |
| Subtotal                               |  |         | 208,043 |    |
| Subscriberbase acquired                |  |         | 210,000 |    |
| Accumulatedamortization                |  |         | (8,750  | )  |
| Subtotal                               |  |         | 201,250 |    |
| Intangibleassets,net                   |  | $            | 409,293 |    |
|                                        |

Amortizationexpense related to intangible assets was $10,707 for the period frominception to March 31, 2005.

Aggregate amortization expenserelative to intangible assets for the periods shown will be asfollows:

|                        |  |        |         |        |  |  |
|------------------------|--|--------|---------|--------|--|--|
| Yearsended December31, |  |
| 2005                   |  | $      | 74,946  |   |
| 2006                   |  |   | 85,652  |   |
| 2007                   |  |   | 85,652  |   |
| 2008                   |  |   | 24,402  |   |
| 2009                   |  |   | 15,652  |   |
| Thereafter             |  |   | 133,696 |   |
|                   |  | $      | 420,000 |   |
|                        |

10.    LONG-TERMDEBT

Long-term debt consists of the following:

|                                                |  |               |         |                  |  |        |         |        |  |  |
|------------------------------------------------|--|---------------|---------|------------------|--|--------|---------|--------|--|--|
|                                           |  | Company       |         | OldAirGate       |
|                                           |  | March 31,2005 |         | December 31,2004 |
| 9 3/8% SeniorNotes                             |  | $             | 168,344 |             |  | $      | 137,478 |   |
| FloatingRateNotes                              |  |          | 179,606 |             |  |   | 175,000 |   |
| **TotalDebt**                                  |  |          | 347,950 |             |  |   | 312,478 |   |
| Lesscurrentmaturities                          |  |          | — |             |  |   | — |   |
| **Longterm debt, excluding currentmaturities** |  | $             | 347,950 |             |  | $      | 312,478 |   |
|                                                |

SENIORNOTES

9 3/8% Senior Notes –The 9 3/8% Senior Notes were originallyissued in February 2004 by Old AirGate, have a face value of $159,035,mature September 1, 2009 and carry a coupon rate of9 3/8%, payable semiannually on January 1 andJuly 1. The 9 3/8% Senior Notes are secured by asecond priority lien on the assets of AirGate. The9 3/8% Senior Notes were recorded at a fair valueof 

12

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

$168,676 in the purchase price allocationdiscussed in Note 4. The premium to face amount will be amortized overthe remaining life of the notes as an adjustment to the effectiveinterest rate.

Floating Rate Notes – The FloatingRate Notes were originally issued in October 2004 by Old AirGate, havea face value of $175,000, mature October 15, 2011 and bear interest atLIBOR plus 3.75%, payable quarterly on January 15, April 15,July 15 and October 15. The Floating Rate Notes are secured by a firstpriority lien on the assets of AirGate. The Floating Rate Notes wererecorded at a fair value of $179,715 in the purchase price allocationas discussed in Note 4. The premium to face amount will be amortizedover the remaining life of the notes as an adjustment to the effectiveinterest rate.

On January 11, 2005, Old AirGate began solicitingconsents from holders of the outstanding 9 3/8%Senior Notes and Floating Rate Notes to amend certain provisions ofindentures governing the respective notes. On January 25, 2005, theexpiration date of the consent solicitation, Old AirGate received thenecessary consents to amend the respective indentures and paid aconsent fee of 0.25% of the principal amount of the notes to thenote holders.

11.    STOCKHOLDERS' EQUITY

Asdiscussed in Note 4, the acquisition of Old AirGate by Alamosa Holdingswas completed on February 15, 2005. Stockholders of Old AirGatereceived approximately 26.1 million shares of Alamosa Holdings commonstock and approximately $100 million in cash consideration. As a resultOld AirGate stockholders' deficit of $123,035 was eliminated onFebruary 15, 2005. In connection with the purchase price allocationdiscussed in Note 4, the Company recorded contributed capitalconsisting of $330,848 in value of Alamosa Holdings common stockissued, $100,000 cash consideration plus $6,143 in direct transactioncosts incurred by Alamosa Holdings and $2,568 in value of common stockpurchase warrants assumed by Alamosa Holdings. The total contributedcapital of $439,559 was reduced by $10,203 in benefit received byAlamosa Holdings in the form of a reduction of valuation allowanceagainst its deferred tax assets and $15,000 in cash distributions fromthe Company to Alamosa Holdings.

Old AirGate had three sets ofcommon stock purchase warrants outstanding prior to the acquisition byAlamosa Holdings.

AirGate Warrants – The AirGateWarrants were originally issued by Old AirGate in connection with anoffering of Old AirGate notes in 1999. As of March 31, 2005, 8,620AirGate Warrants were outstanding. Each warrant entitles the holder toreceive 0.9482 shares of Alamosa Holdings common stock and $3.64 incash at an exercise price of $0.02 per share and expires on October 1,2009. Due to the fact that these warrants require settlement withregistered shares of Alamosa Holdings common stock, these warrants arereflected as a liability in the consolidated balance sheet of AlamosaHoldings at fair market value. Changes in fair market value arereflected in earnings of Alamosa Holdings for the period. The fairvalue of the AirGate Warrants at March 31, 2005 is approximately$127.

iPCS Note Warrants – The iPCS Note Warrantswere originally issued by iPCS, Inc. ("iPCS")in 2000 and assumed by Old AirGate upon its acquisition of iPCS in2001. As of March 31, 2005, 300,000 iPCS Note Warrants wereoutstanding. Each warrant entitles the holder to receive 0.6996 sharesof Alamosa Holdings common stock at an exercise price of $74.34 pershare and expires on July 15, 2011. Due to the fact that these warrantsrequire settlement with registered shares of Alamosa Holdings commonstock, these warrants are reflected as a liability in the consolidatedbalance sheet of Alamosa Holdings at fair market value. Changes in fairmarket value are reflected in earnings of Alamosa Holdings for theperiod. The fair value of the iPCS Note Warrants at March 31, 2005 isapproximately $1,841.

iPCS Sprint Warrant – TheiPCS Sprint Warrant was originally issued by iPCS in 2000 and assumedby Old AirGate upon its acquisition of iPCS in 2001. As of March 31,2005, the iPCS Sprint 

13

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

Warrant to purchase 81,050 shares of AlamosaHoldings common stock at an exercise price of $66.52 per share wasoutstanding. This warrant expires on July 15, 2007 and is not reflectedas a liability in the consolidated balance sheet.

12.    INCOME TAXES

The Company's effective incometax rate is based on statutory tax rates, tax planning opportunities,expected future taxable income, and expected reversals of taxabletemporary differences. The forecasted annual rate is then applied tothe Company's quarterly operating results. The Companyestablishes a valuation allowance for deferred tax assets when it ismore likely than not that the deferred tax assets will not be realized.Due to a limited operating history and lack of positive taxableearnings, a valuation allowance was established by Old AirGate asdeferred tax assets were expected to exceed deferred tax liabilities.The establishment of this valuation allowance resulted in an effectivetax rate of zero for the period from January 1, 2005 to February 15,2005 and for the three months ended March 31, 2004. Due to thedifference in basis for book and tax purposes after the purchase priceallocation discussed in Note 4, the Company established a net deferredtax liability of $32,045 in connection with the merger. The reversal ofthe timing differences which give rise to this deferred tax liabilitywill allow the Company to realize the benefit of certain deferred taxassets such that the valuation allowance was reduced. The effective taxrate for the period from inception to March 31, 2005 is 38.5 percent.The difference between the statutory rate of 35 percent and theprojected rate is primarily due to state income taxes.

13.    SPRINT AGREEMENTS

In accordance with theCompany's affiliation agreements with Sprint, Sprint provides theCompany various services including billing, customer care, collectionsand inventory logistics. In addition, Sprint bills the Company forvarious pass-through items such as commissions and rebates to nationalretail merchants, handset subsidies on handsets activated in theCompany's territory but not sold by the Company and long distancecharges.

In 2004, Old AirGate executed amendments to itsaffiliation agreements with Sprint. The amendments, among other things,established fixed per subscriber costs for services that the Companypurchases from Sprint through December 31, 2006 in the form of two newfees. The amendments created a new combined service bureau fee, whichconsolidates numerous fees that were previously settled separately, forback office services such as billing and customer care. The combinedservice bureau fee was set at $7.00 per average subscriber per monththrough December 31, 2006 and will be recorded in costs of services andoperations in the consolidated statement of operations. The amendmentsalso created a new per-activation fee, which consolidates numerous feesthat were previously settled separately, for marketing services, suchas subscriber activation and handset logistics. The per-activation feeis $23.00 per activation and will be applied to the actual number ofgross subscriber activations the Company experiences on a monthly basisthrough December 31, 2006. The per-activation fee is recorded inselling and marketing expenses in the consolidated statement ofoperations.

In addition to the new fees, the amendments changedthe methodology used for settling cash received from subscribers.Historically, actual weekly cash receipts were passed through to OldAirGate by Sprint based on a calculation of an estimate of the portionof that cash related to Old AirGate's activity. Under the newmethodology, the Company receives its portion of billed revenue (net ofan 8% affiliation fee) less actual written off accounts in themonth subsequent to billing regardless of when Sprint collects the cashfrom the subscriber.

Expenses reflected in the consolidatedstatements of operations related to the Sprint affiliation agreementsare:

14

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

|                                     |  |                                                          |        |                                                      |  |                                        |        |        |  |        |        |        |  |  |
|-------------------------------------|--|----------------------------------------------------------|--------|------------------------------------------------------|--|----------------------------------------|--------|--------|--|--------|--------|--------|--|--|
|                                |  | Company                                                  |        | OldAirGate                                           |
|                                |  | For theperiodfromacquisition (SeeNote 4) toMarch 31,2005 |        | For the periodfrom January1, 2005 toFebruary 15,2005 |  | For the threemonths endedMarch31, 2004 |
| Cost of service and otheroperations |  | $                                                        | 14,897 |                                                 |  | $                                      | 17,122 |   |  | $      | 27,751 |   |
| Costof productssold                 |  |                                                     | 4,428  |                                                 |  |                                   | 5,699  |   |  |   | 7,202  |   |
| Sellingandmarketing                 |  |                                                     | 3,661  |                                                 |  |                                   | 3,269  |   |  |   | 2,629  |   |
| Total                               |  | $                                                        | 22,986 |                                                 |  | $                                      | 26,090 |   |  | $      | 37,582 |   |
|                                     |

Inconnection with the billing services provided to the Company by Sprint,the Company relies on Sprint to provide information as to monthlybilling activity relative to all subscriber revenues. In addition,Sprint provides the information utilized for the settlement of allroaming revenue.

The Company relies upon Sprint as a serviceprovider to provide accurate information for the settlement of revenueand expense items. The Company makes estimates used in connection withthe preparation of financial statements based on the financial andstatistical information provided by Sprint. The Company assesses theaccuracy of this information through analytic review and reliance onthe service auditor report on Sprint's internal control processesprepared by Sprint's external service auditor.

On December15, 2004, Sprint Corporation and Nextel Communications, Inc. announcedthat their boards of directors unanimously approved a definitiveagreement for a merger of equals. Nextel Communications currentlyoperates a wireless mobility communications network in certainterritories in which the Company also provides digital wirelessmobility communications network services under the Sprint or affiliatedbrands.

The Company and Sprint have had only very preliminarycommunications regarding the potential impact on the Company of thepending Sprint-Nextel transaction. The Company believes that, based oncurrently available information, and assuming that no changes areeffected with respect to Sprint's agreements with the Company,Sprint could be in violation of the exclusivity provisions of certainof the Company's agreements with Sprint upon completion of theSprint-Nextel transaction and Sprint could be in violation of theexclusivity provisions of the other agreements with Sprint at somepoint following completion of the Sprint-Nextel transaction.

Sprint's agreements with the Company provide for specificremedies in the event of a material violation by Sprint of suchagreements if not cured within an applicable time period. Neither wenor any of our executives have made any definitive determination as tothe impact on the value to us or our business of any of such remediesor whether any such remedy would be more or less favorable to us or ourshareholders than our existing arrangements with Sprint or any possiblerenegotiated arrangement with Sprint.

The Company is committedto working with Sprint to reach mutually agreeable arrangements withrespect to these matters. However, there can be no assurances that theCompany and Sprint will be able to reach mutually acceptablearrangements or as to the terms of any such arrangements or the likelyimpact on the Company of any such arrangement.

14.    COMMITMENTS AND CONTINGENCIES

Litigation– In May 2002, putative class action complaints were filedin the United States District Court for the Northern District ofGeorgia against AirGate PCS, Inc., Thomas M. Dougherty, Barbara L.Blackford, Alan B. Catherall, Credit Suisse First Boston, LehmanBrothers, UBS Warburg LLC, 

15

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

William Blair & Company, Thomas WieselPartners LLC and TD Securities. The complaints alleged that theprospectus used in connection with the secondary offering of OldAirGate stock by certain former stockholders of iPCS, a formersubsidiary of AirGate, on December 18, 2001 contained materially falseand misleading statements and omitted material information necessary tomake the statements in the prospectus not false and misleading. Afterinitially denying motions for appointment of lead plaintiffs and leadplaintiffs' counsel, the Court granted a modified renewed motionfor appointment of lead plaintiffs and lead plaintiffs' counselon August 17, 2004. Pursuant to a consent scheduling order, leadplaintiffs filed a consolidated amended class action complaint onOctober 15, 2004, naming the same defendants (the"Consolidated Complaint"). 

TheConsolidated Complaint  asserts claims under Sections 11,12(a)(2) and 15 of the Securities Act of 1933 based on a number ofpurported false or misleading statements in the prospectus.Plaintiffs' claims are premised on allegations, among others,that (1) AirGate's business plan was not "fullyfunded," contrary to what was asserted in the prospectus;(2) disclosures in the prospectus regarding the churn rate experiencedby AirGate were untrue and/or misleading; (3) AirGate did not havestrong future revenue and profit growth prospects based on its rapidcustomer growth, contrary to what was allegedly asserted in theprospectus; (4) AirGate's allowance for doubtful accounts wasunderstated in its fiscal 2001 financial statements, and hence AirGateunderstated its net losses for 2001 and the prospectus incorrectlystated that AirGate's financial statements complied withgenerally accepted accounting principles; (5) iPCS's networkbuild-out was not nearly complete, contrary to what was allegedlyasserted in the prospectus; and (6) the iPCS merger did notsignificantly enhance shareholder value, contrary to alleged assertionsin the prospectus.

On December 30, 2004, defendants filedmotions to dismiss the Consolidated Complaint, which are presentlypending before the Court. The Company believes that AirGate and theother defendants have meritorious defenses to the claims asserted inthe Consolidated Complaint and intends to defend the action vigorously.However, the ultimate outcome of the litigation is not currentlypredictable, there can be no assurance that the litigation will beresolved in our favor, and an adverse outcome could adversely affectour financial condition, results of operations or cash flows. Wemaintain insurance coverage which could mitigate our exposure to lossin the event of an adverse outcome.

 On February23, 2003, iPCS and its two subsidiaries, iPCS Wireless, Inc. and iPCSEquipment, Inc. (the "Debtors") filedvoluntary petitions for relief under Chapter  11 of theBankruptcy Code. During the bankruptcy cases, iPCS filed a motion andobtained an order authorizing it to assume a management agreementbetween iPCS, AirGate PCS and AirGate Services Co., as amended. AirGatePCS subsequently filed an administrative expense priority claim foramounts that it contends were owed by the Debtors under the assumedmanagement agreement. The claim was for amounts that AirGate PCS mightbe liable to certain third party vendors for goods and servicesprovided by such vendors to or for the benefit of the Debtors. In theirdisclosure statement, the Debtors indicated that they might seek todefend against the claim by arguing, among other things, that AirGatePCS has failed to disgorge an alleged preferential transfer in theamount of $3,079 and that Old AirGate, its affiliates, officers, anddirectors may be subject to claims of the Debtors for mismanagement,breach of fiduciary duties, officer and director liability, and similarclaims. The parties engaged in settlement discussions in an effort toresolve all of the disputes between them and on or about April 8, 2005,AirGate PCS and the Debtors entered into a settlement agreementresolving the claims between them. Under the settlement, the Companywill receive 8,200 shares of the common stock issued by the Debtorsunder their confirmed plan of reorganization.

The Company isinvolved in various claims and legal actions arising in the ordinarycourse of business. The ultimate disposition of these matters is notexpected to have a material adverse impact on the Company'sfinancial position, results of operations or liquidity.

16

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

15.    PRO FORMA FINANCIALINFORMATION

The unaudited pro forma condensed consolidatedstatements of operations for the three months ended March 31, 2005 and2004 set forth below present the results of operations as if theacquisition of Old AirGate by Alamosa Holdings had occurred at thebeginning of each period and are not necessarily indicative of futureresults or actual results that would have been achieved had thisacquisition occurred as of the beginning of the period.

|                              |  |                                   |         |         |  |        |         |         |  |  |
|------------------------------|--|-----------------------------------|---------|---------|--|--------|---------|---------|--|--|
|                         |  | Forthe three months endedMarch31, |
|                         |  | 2005                              |         | 2004    |
| Totalrevenues                |  | $                                 | 93,600  |    |  | $      | 78,036  |    |
| Lossbefore income taxbenefit |  | $                                 | (20,338 | )  |  | $      | (23,542 | )  |
| Incometax (expense)benefit   |  |                              | 7,835   |    |  |   | 9,069   |    |
| Netloss                      |  | $                                 | (12,503 | )  |  | $      | (14,473 | )  |
|                              |

16.    EFFECTSOF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2004,the Financial Accounting Standards Board("FASB") issued SFAS No. 123(R),"Share-Based Payment," which is a revision ofSFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123(R)requires all share-based payments to employees, including grants ofemployee stock options, to be valued at fair value on the date ofgrant, and to be expensed over the applicable vesting period. Pro formadisclosures of the income statement effects of share-based payments isno longer an alternative. SFAS No. 123(R) is effective for allstock-based awards granted on or after July 1, 2005. In addition,companies must also recognize compensation expense related to anyawards that are not fully vested as of July 1, 2005. Compensationexpense for the unvested awards will be measured based on the fairvalue of the awards previously calculated in developing the pro formadisclosures in accordance with the provisions of SFAS No. 123. On April14, 2005, the SEC announced the adoption of a new rule that amends thecompliance dates for SFAS No. 123(R). The new rule allows registrantsto implement SFAS No. 123(R) at the beginning of their next fiscal yearthat begins after June 15, 2005. As a result, the Company will berequired to adopt the provisions of SFAS No. 123(R) on January 1, 2006.The Company is currently assessing the impact of adopting SFAS No.123(R) to its consolidated results of operations.

On March 31,2005, the FASB issued Interpretation No.("FIN") 47, "Accounting forConditional Asset Retirement Obligations" which is aninterpretation of SFAS No. 143, "Accounting for AssetRetirement Obligations." FIN 47 clarifies that therecognition and measurement provisions of SFAS No. 143 apply to assetretirement obligations in which the timing and/or method of settlementmay be conditional on a future event, including obligations toremediate asbestos at the end of a building's useful life andobligations to dispose of chemically-treated telephone poles at the endof their useful lives. FIN 47 is effective for fiscal years endingafter December 15, 2005. The Company is currently assessing the impactof adopting FIN 47 to its consolidated results ofoperations.

17.    CONDENSED CONSOLIDATING FINANCIALSTATEMENTS

Set forth below are consolidating financialstatements of the Company and guarantor subsidiaries as of March 31,2005 and December 31, 2004 and for the three periods from acquisitionto March 31, 2005, the period from January 1, 2005 to February 15, 2005and the three months ended March 31, 2004. The guarantor subsidiariesare all 100% owned by the Company and the guarantees are fulland unconditional. Separate financial statements of each guarantorsubsidiary have not been provided because management has determinedthat they are not material to investors.

17

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

AGW Leasing Company, Inc.("AGW") is a wholly-owned restrictedsubsidiary of AirGate. AGW has fully and unconditionally guaranteed theSenior Notes (see Note 10). AGW was formed to hold the real estateinterests for the Company's PCS network and retail operations.After the acquisition of Old AirGate by Alamosa Holdings on February15, 2005, all interest were transferred to the Company.

AirGateNetwork Services LLC ("ANS") is awholly-owned restricted subsidiary of AirGate. ANS has fully andunconditionally guaranteed the Senior Notes (See Note 10). ANS wasformed to provide construction management services for theCompany's PCS network. All assets and liabilities of ANS wereassumed by the Company in connection with the acquisition of OldAirGate by Alamosa Holdings on February 15, 2005.

AirGateService Company, Inc. ("Service Co") is awholly-owned restricted subsidiary of AirGate. Service Co has fully andunconditionally guaranteed the Senior Notes. Service Co was formed toprovide management services to Old AirGate and iPCS. At the time of theacquisition of Old AirGate by Alamosa Holdings on February 15, 2005,Service Co had no assets or liabilities.

CONDENSEDCONSOLIDATING BALANCE SHEET AS OF MARCH 31,2005

|                                                    |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |        |  |  |
|----------------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                               |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Cashand cashequivalents                            |  | $      | 13,229  |                  |  | $            | — |         |  | $      | — |   |  | $      | 13,229  |   |
| Shortterminvestments                               |  |   | 44,566  |                  |  |         | — |         |  |   | — |   |  |   | 44,566  |   |
| Othercurrentassets                                 |  |   | 43,373  |                  |  |         | — |         |  |   | — |   |  |   | 43,373  |   |
| Totalcurrentassets                                 |  |   | 101,168 |                  |  |         | — |         |  |   | — |   |  |   | 101,168 |   |
|                                               |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |   |
| Propertyand equipment,net                          |  |   | 81,109  |                  |  |         | — |         |  |   | — |   |  |   | 81,109  |   |
| Othernoncurrentassets                              |  |   | 663,646 |                  |  |         | — |         |  |   | — |   |  |   | 663,646 |   |
| Totalassets                                        |  | $      | 845,923 |                  |  | $            | — |         |  | $      | — |   |  | $      | 845,923 |   |
| Currentliabilities                                 |  | $      | 56,568  |                  |  | $            | — |         |  | $      | — |   |  | $      | 56,568  |   |
| Long-termdebt                                      |  |   | 347,950 |                  |  |         | — |         |  |   | — |   |  |   | 347,950 |   |
| Otherlong-termliabilities                          |  |   | 32,866  |                  |  |         | — |         |  |   | — |   |  |   | 32,866  |   |
| Investmentinsubsidiaries                           |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |   |
| Totalliabilities                                   |  |   | 437,384 |                  |  |         | — |         |  |   | — |   |  |   | 437,384 |   |
|                                               |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |   |
| Stockholders'equity(deficit)                       |  |   | 408,539 |                  |  |         | — |         |  |   | — |   |  |   | 408,539 |   |
| Totalliabilities and stockholders' equity(deficit) |  | $      | 845,923 |                  |  | $            | — |         |  | $      | — |   |  | $      | 845,923 |   |
|                                                    |

18

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

CONDENSED CONSOLIDATING BALANCESHEET AS OF DECEMBER 31,2004

|                                                    |  |        |          |                       |  |              |          |              |  |        |          |         |  |        |         |         |  |  |
|----------------------------------------------------|--|--------|----------|-----------------------|--|--------------|----------|--------------|--|--------|----------|---------|--|--------|---------|---------|--|--|
|                                               |  | Issuer |          | GuarantorSubsidiaries |  | Eliminations |          | Consolidated |
| Cashand cashequivalents                            |  | $      | 15,927   |                  |  | $            | (10      | )       |  | $      | —  |    |  | $      | 15,917  |    |
| Shortterminvestments                               |  |   | 94,059   |                  |  |         | —  |         |  |   | —  |    |  |   | 94,059  |    |
| Othercurrentassets                                 |  |   | 112,202  |                  |  |         | 529      |         |  |   | (61,943  | )  |  |   | 50,788  |    |
| Totalcurrentassets                                 |  |   | 222,188  |                  |  |         | 519      |         |  |   | (61,943  | )  |  |   | 160,764 |    |
| Propertyand equipment,net                          |  |   | 105,522  |                  |  |         | 25,287   |         |  |   | —  |    |  |   | 130,809 |    |
| Othernoncurrentassets                              |  |   | 7,266    |                  |  |         | —  |         |  |   | —  |    |  |   | 7,266   |    |
| Totalassets                                        |  | $      | 334,976  |                  |  | $            | 25,806   |         |  | $      | (61,943  | )  |  | $      | 298,839 |    |
| Currentliabilities                                 |  | $      | 75,302   |                  |  | $            | 61,414   |         |  | $      | (61,943  | )  |  | $      | 74,773  |    |
| Intercompany                                       |  |   | (134,537 | )                |  |         | 134,537  |         |  |   | —  |    |  |   | — |    |
| Long-termdebt                                      |  |   | 312,478  |                  |  |         | —  |         |  |   | —  |    |  |   | 312,478 |    |
| Otherlong-termliabilities                          |  |   | 6,019    |                  |  |         | —  |         |  |   | —  |    |  |   | 6,019   |    |
| Investmentinsubsidiaries                           |  |   | 170,145  |                  |  |         | —  |         |  |   | (170,145 | )  |  |   | — |    |
| Totalliabilities                                   |  |   | 429,407  |                  |  |         | 195,951  |         |  |   | (232,088 | )  |  |   | 393,270 |    |
| Stockholders'equity(deficit)                       |  |   | (94,431  | )                |  |         | (170,145 | )       |  |   | 170,145  |    |  |   | (94,431 | )  |
| Totalliabilities and stockholders' equity(deficit) |  | $      | 334,976  |                  |  | $            | 25,806   |         |  | $      | (61,943  | )  |  | $      | 298,839 |    |
|                                                    |

CONDENSEDCONSOLIDATING STATEMENT OF OPERATIONS FOR THE PERIOD FROMACQUISITION TO MARCH 31,2005

|                                    |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                               |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Revenue                            |  | $      | 44,737  |                  |  | $            | — |         |  | $      | — |   |  | $      | 44,737  |    |
| Costofrevenue                      |  |   | 25,789  |                  |  |         | — |         |  |   | — |   |  |   | 25,789  |    |
| Sellingandmarketing                |  |   | 8,757   |                  |  |         | — |         |  |   | — |   |  |   | 8,757   |    |
| Generaland administrativeexpenses  |  |   | 2,899   |                  |  |         | — |         |  |   | — |   |  |   | 2,899   |    |
| Mergerrelatedexpenses              |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Depreciationandamortization        |  |   | 14,305  |                  |  |         | — |         |  |   | — |   |  |   | 14,305  |    |
| Impairmentof property andequipment |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Lossfromoperations                 |  |   | (7,013  | )                |  |         | — |         |  |   | — |   |  |   | (7,013  | )  |
| Interestand otherincome            |  |   | 319     |                  |  |         | — |         |  |   | — |   |  |   | 319     |    |
| Interestexpense                    |  |   | (2,768  | )                |  |         | — |         |  |   | — |   |  |   | (2,768  | )  |
|                               |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Incomebefore income taxexpense     |  |   | (9,462  | )                |  |         | — |         |  |   | — |   |  |   | (9,462  | )  |
| Incometaxexpense                   |  |   | 3,645   |                  |  |         | — |         |  |   | — |   |  |   | 3,645   |    |
| Netincome                          |  |   | (5,817  | )                |  | $            | — |         |  | $      | — |   |  | $      | (5,817  | )  |
|                                    |

19

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

CONDENSED CONSOLIDATING STATEMENT OFOPERATIONS FOR THE PERIOD FROM JANUARY 1, 2005 TO FEBRUARY 15,2005

|                                    |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                               |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Revenue                            |  | $      | 48,863  |                  |  | $            | — |         |  | $      | — |   |  | $      | 48,863  |    |
| Costofrevenue                      |  |   | 26,637  |                  |  |         | 2,342   |         |  |   | — |   |  |   | 28,979  |    |
| Sellingandmarketing                |  |   | 9,179   |                  |  |         | 193     |         |  |   | — |   |  |   | 9,372   |    |
| Generaland administrativeexpenses  |  |   | 2,971   |                  |  |         | 75      |         |  |   | — |   |  |   | 3,046   |    |
| Mergerrelatedexpenses              |  |   | 23,748  |                  |  |         | — |         |  |   | — |   |  |   | 23,748  |    |
| Depreciationandamortization        |  |   | 6,709   |                  |  |         | 1,205   |         |  |   | — |   |  |   | 7,914   |    |
| Impairmentof property andequipment |  |   | 20      |                  |  |         | — |         |  |   | — |   |  |   | 20      |    |
| Income(loss) fromoperations        |  |   | (20,401 | )                |  |         | (3,815  | )       |  |   |    |   |  |   | (24,216 | )  |
| Equityin earnings ofsubsidiaries   |  |   | (3,815  | )                |  |         | — |         |  |   | 3,815   |   |  |   | — |    |
| Interestand otherincome            |  |   | 346     |                  |  |         | — |         |  |   | — |   |  |   | 346     |    |
| Interestexpense                    |  |   | (3,921  | )                |  |         | — |         |  |   | — |   |  |   | (3,921  | )  |
| Incomebefore income taxexpense     |  |   | (27,791 | )                |  |         | (3,815  | )       |  |   | 3,815   |   |  |   | 27,791  |    |
| Incometaxexpense                   |  |   | — |                  |  |         | — |         |  |   |    |   |  |   | — |    |
| Netincome                          |  |   | (27,791 | )                |  | $            | (3,815  | )       |  | $      | 3,815   |   |  | $      | 27,291  |    |
|                                    |

CONDENSEDCONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDEDMARCH 31,2004

|                                    |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                               |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Revenue                            |  | $      | 78,036  |                  |  | $            | — |         |  | $      | — |   |  | $      | 78,036  |    |
| Costofrevenue                      |  |   | 42,426  |                  |  |         | 4,198   |         |  |   | — |   |  |   | 46,624  |    |
| Sellingandmarketing                |  |   | 11,347  |                  |  |         | 569     |         |  |   | — |   |  |   | 11,916  |    |
| Generaland administrativeexpenses  |  |   | 6,180   |                  |  |         | 157     |         |  |   | — |   |  |   | 6,337   |    |
| Depreciationandamortization        |  |   | 9,508   |                  |  |         | 2,384   |         |  |   | — |   |  |   | 11,892  |    |
| Impairmentof property andequipment |  |   | (3      | )                |  |         | — |         |  |   | — |   |  |   | (3      | )  |
| Income(loss) fromoperations        |  |   | 8,578   |                  |  |         | (7,308  | )       |  |   | — |   |  |   | 1,270   |    |
| Equityin loss ofsubsidiaries       |  |   | (7,267  | )                |  |         | — |         |  |   | 7,267   |   |  |   | — |    |
| Interestand otherincome            |  |   | 165     |                  |  |         | — |         |  |   | — |   |  |   | 165     |    |
| Interestexpense                    |  |   | (11,352 | )                |  |         | 41      |         |  |   | — |   |  |   | (11,311 | )  |
| Lossbefore incometaxes             |  |   | (9,876  | )                |  |         | (7,267  | )       |  |   | 7,267   |   |  |   | (9,876  | )  |
| Incometaxes                        |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Netloss                            |  |   | (9,876  | )                |  | $            | (7,267  | )       |  | $      | 7,267   |   |  | $      | (9,876  | )  |
|                                    |

20

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED)(UNAUDITED)

(dollarsin thousands, except as noted)

CONSOLIDATING STATEMENT OF CASHFLOWS FOR THE PERIOD FROM ACQUISITION TO MARCH 31,2005

|                                                |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                           |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Operatingactivities,net                        |  | $      | (4,619  | )                |  | $            | — |         |  | $      | — |   |  | $      | (4,619  | )  |
| Investingactivities,net                        |  |   | 32,848  |                  |  |         | — |         |  |   | — |   |  |   | 32,848  |    |
| Financingactivities,net                        |  |   | (15,000 | )                |  |         | — |         |  |   | — |   |  |   | (15,000 | )  |
| Netincrease in cash and cashequivalents        |  |   | 13,229  |                  |  |         | — |         |  |   | — |   |  |   | 13,229  |    |
| Cashand cash equivalents at beginning ofperiod |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Cashand cash equivalents at end ofperiod       |  | $      | 13,229  |                  |  | $            | — |         |  | $      | — |   |  | $      | 13,229  |    |
|                                                |

CONSOLIDATINGSTATEMENT OF CASH FLOWS FOR THE PERIOD FROM JANUARY 1, 2005 TOFEBRUARY 15,2005

|                                                |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                           |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Operatingactivities,net                        |  | $      | (18,747 | )                |  | $            | 12      |         |  | $      | — |   |  | $      | (18,735 | )  |
| Investingactivities,net                        |  |   | 40,824  |                  |  |         | — |         |  |   | — |   |  |   | 40,824  |    |
| Financingactivities,net                        |  |   | (1,617  | )                |  |         | — |         |  |   | — |   |  |   | (1,617  | )  |
| Netincrease in cash and cashequivalents        |  |   | 20,460  |                  |  |         | 12      |         |  |   | — |   |  |   | 20,472  |    |
| Cashand cash equivalents at beginning ofperiod |  |   | 15,929  |                  |  |         | (12     | )       |  |   | — |   |  |   | 15,917  |    |
| Cashand cash equivalents at end ofperiod       |  | $      | 36,389  |                  |  | $            | — |         |  | $      | — |   |  | $      | 36,389  |    |
|                                                |

CONSOLIDATINGSTATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31,2004

|                                                |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                           |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Operatingactivities,net                        |  | $      | 21,151  |                  |  | $            | 123     |         |  | $      | — |   |  | $      | 21,274  |    |
| Investingactivities,net                        |  |   | (7,226  | )                |  |         | (135    | )       |  |   | — |   |  |   | (7,361  | )  |
| Financingactivities,net                        |  |   | (19,398 | )                |  |         | — |         |  |   | — |   |  |   | (19,398 | )  |
| Netdecrease in cash and cashequivalents        |  |   | (5,473  | )                |  |         | (12     | )       |  |   | — |   |  |   | (5,485  | )  |
| Cashand cash equivalents at beginning ofperiod |  |   | 54,078  |                  |  |         | — |         |  |   | — |   |  |   | 54,078  |    |
| Cashand cash equivalents at end ofperiod       |  | $      | 48,605  |                  |  | $            | (12     | )       |  | $      | — |   |  | $      | 48,593  |    |
|                                                |

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|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| ITEM2.  | MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS |

Forward-LookingStatements

This quarterly report on Form 10-Q includes"forward-looking statements" within themeaning of Section 27A of the Securities Act of 1933, as amended (the"Securities Act"), and Section 21E of theSecurities Exchange Act of 1934, as amended (the "ExchangeAct"), which can be identified by the use offorward-looking terminology such as "may,""might," "could,""would," "believe,""expect," "intend,""plan," "seek,""anticipate,""estimate,""project" or"continue" or the negative thereof or othervariations thereon or comparable terminology. All statements other thanstatements of historical fact included in this quarterly report on Form10-Q regarding our financial position and liquidity may be deemed to beforward-looking statements. These forward-looking statementsinclude:

|              |                                                 |
|--------------|-------------------------------------------------|
| •  | forecasts of population growthin our territory; |

|              |                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------|
| •  | statements regardingour anticipated revenues, expense levels, liquidity, capital resourcesand operating losses; and |

|              |                                                                                  |
|--------------|----------------------------------------------------------------------------------|
| •  | statementsregarding expectations or projections about markets in ourterritories. |

Although we believe that the expectations reflectedin such forward-looking statements are reasonable, we can give noassurance that such expectations will prove to have been correct.Important factors that could cause actual results to differ materiallyfrom those in the forward-looking statements include, but are notlimited to:

|              |                                               |
|--------------|-----------------------------------------------|
| •  | our dependence on ouraffiliation with Sprint; |

|              |                                                                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the abilityof Sprint to alter the terms of our affiliation agreements with it,including fees paid or charged to us and other programrequirements; |

|              |                                   |
|--------------|-----------------------------------|
| •  | our anticipation offuture losses; |

|              |                                                                                              |
|--------------|----------------------------------------------------------------------------------------------|
| •  | our dependence on backoffice services, such as billing and customer care, provided bySprint; |

|              |                                                         |
|--------------|---------------------------------------------------------|
| •  | inaccuracies in financialinformation provided bySprint; |

|              |                                                 |
|--------------|-------------------------------------------------|
| •  | potential fluctuations in ouroperating results; |

|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| •  | our ability topredict future customer growth, as well as other key operatingmetrics; |

|              |                                   |
|--------------|-----------------------------------|
| •  | changes or advances intechnology; |

|              |                                                               |
|--------------|---------------------------------------------------------------|
| •  | the ability to leveragethird generation products andservices; |

|              |                                                            |
|--------------|------------------------------------------------------------|
| •  | competition in the industryand markets in which weoperate; |

|              |                           |
|--------------|---------------------------|
| •  | subscriber creditquality; |

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | our ability to attract andretain skilled personnel; |

|              |                                                                                            |
|--------------|--------------------------------------------------------------------------------------------|
| •  | our potentialneed for additional capital or the need for refinancing existingindebtedness; |

|              |                                                                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | our potential inabilityto expand our services and related products in the event of substantialincreases in demand for these services and relatedproducts; |

|              |                                                                         |
|--------------|-------------------------------------------------------------------------|
| •  | our inability to predict theoutcomes of potentially materiallitigation; |

|              |                                                                   |
|--------------|-------------------------------------------------------------------|
| •  | the potential impact ofwireless local number portability, orWLNP; |

|              |                                  |
|--------------|----------------------------------|
| •  | changes in governmentregulation; |

|              |                     |
|--------------|---------------------|
| •  | futureacquisitions; |

|              |                                              |
|--------------|----------------------------------------------|
| •  | general economic andbusiness conditions; and |

|              |                                                                                                                                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | effects ofmergers and consolidations within the telecommunications industry andunexpected announcements or developments from others in thetelecommunications industry. |

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All subsequent written and oralforward-looking statements attributable to us or persons acting on ourbehalf are expressly qualified in their entirety by the cautionarystatements set forth above.

Definitions of OperatingMetrics

We discuss the following operating metrics relating toour business in this section:

|              |                                                                                                                                                                                                                                                                                                                                                            |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | ARPU, oraverage monthly revenue per user, is a measure used to determine themonthly subscriber revenue earned for subscribers based in ourterritory. This measure is calculated by dividing subscriber revenuesin our consolidated statement of operations by our average dailysubscribers during the period divided by the number of months in theperiod. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Average monthly churn is usedto measure the rate at which subscribers based in our territorydeactivate service on a voluntary or involuntary basis. We calculateaverage monthly churn based on the number of subscribers deactivatedduring the period (net of transfers out of our service area and thosewho deactivated within 30 days of activation) as a percentage of ouraverage daily subscriber base during the period divided by the numberof months during the period. |

|              |                                                                                                                                                                                                                                                                                                                                                                            |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | LicensedPOPs represent the number of residents (usually expressed in millions)in our territory in which we have an exclusive right to providewireless mobility communications services under the Sprint brand name.The number of residents located in our territory does not represent thenumber of wireless subscribers that we serve or expect to serve in ourterritory. |

|              |                                                                                                                                                                                                                                                                                                         |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Covered POPs represent thenumber of residents (usually expressed in millions) covered by ourportion of the PCS network of Sprint in our territory. The number ofresidents covered by our network does not represent the number ofwireless subscribers that we serve or expect to serve in ourterritory. |

General

On December 7, 2004, AirGate PCS,Inc. ("Old AirGate") entered into anAgreement and Plan of Merger with Alamosa Holdings, Inc.("Alamosa Holdings") and A-Co. Merger Sub,Inc. ("A-Co."), a direct wholly-ownedsubsidiary of Alamosa Holdings. Pursuant to the merger agreement, OldAirGate merged with and into A-Co. on February 15, 2005 with A-Co.surviving the merger. Immediately after the closing of the transaction,A-Co. was renamed AirGate PCS, Inc.("AirGate") and remains a wholly-ownedsubsidiary of Alamosa Holdings. In connection with the acquisition ofOld AirGate, the purchase price was allocated to the assets andliabilities of AirGate based on fair value resulting in a new basis ofaccounting.

As a PCS Affiliate of Sprint, we have the exclusiveright to provide wireless mobility communications services under theSprint brand name in our licensed territory. We own and are responsiblefor building, operating and managing the portion of the PCS network ofSprint located in our territory. We offer national plans designed bySprint as well as local plans tailored to our market demographics. Ourportion of the PCS network of Sprint is designed to offer a seamlessconnection with the 100% digital PCS nationwide wireless networkof Sprint. We market Sprint PCS products and services through a numberof distribution outlets located in our territory, including our ownretail stores, major national distributors and local third partydistributors. At March 31, 2005, we had total licensed POPs of over 7.4million, covered POPs of approximately 6.4 million and totalsubscribers of approximately 425,000.

We recognize revenues fromour subscribers for the provision of wireless telecommunicationsservices, proceeds from the sales of handsets and accessories throughchannels controlled by us and fees from Sprint and other wirelessservice providers and resellers when their customers roam onto ourportion of the PCS network of Sprint. Sprint retains 8% of allservice revenue collected from our subscribers (not including productssales and roaming charges billed to our subscribers) and all feescollected from other wireless service providers and resellers whentheir customers use our portion of 

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the PCS network of Sprint. We report theamount retained by Sprint as an operating expense. In addition, Sprintbills our subscribers for taxes, handset insurance, equipment andUniversal Service Fund charges and other surcharges which we do notrecord. Sprint collects these amounts from the subscribers and remitsthem to the appropriate tax authority.

As part of ouraffiliation agreements with Sprint, we have contracted with Sprint toprovide back office services such as customer activation, handsetlogistics, billing, customer care and network monitoring services. Weinitially elected to delegate the performance of these services toSprint to take advantage of their economies of scale, to accelerate ourbuild-out and market launches and to lower our initial capitalrequirements. We continue to contract with Sprint for these servicestoday and are obligated to continue using Sprint to provide theseservices through December 31, 2006. The cost for these services isprimarily on a per-subscriber or per-transaction basis and is recordedas an operating expense.

Critical Accounting Policies

The fundamental objective of financial reporting is to provideuseful information that allows a reader to comprehend the businessactivities of an entity. To aid in that understanding, we haveidentified our "critical accountingpolicies." These policies have the potential to have amore significant impact on our consolidated financial statements,either because of the significance of the financial statement item towhich they relate or because they require judgment and estimation dueto the uncertainty involved in measuring, at a specific point in time,events which are continuous in nature.

Accounting forBusiness Combinations – The acquisition of Old AirGate byAlamosa Holdings on February 15, 2005 has been accounted for as abusiness combination in accordance with the provisions of SFAS No. 141,"Business Combinations." Significantassumptions used in connection with allocating the purchase price toidentifiable tangible and intangible assets and liabilities as well asunidentifiable goodwill include (i) the value of Alamosa Holdingscommon stock issued in the transaction, (ii) the value of identifiableintangible assets including value assigned to acquired subscribers andvalue assigned to the Sprint agreements assumed, (iii) the value ofproperty and equipment acquired, (iv) the value of long term debtassumed and (v) deferred income tax assets and liabilities attributableto the assets and liabilities acquired. The operations of the acquiredcompany are included in the consolidated results of operations ofAlamosa Holdings, from the date of acquisition.

Allowancefor doubtful accounts – Estimates are used in determiningour allowance for doubtful accounts and are based on our historicalcollection experience, current trends, credit policy, a percentage ofour accounts receivable by aging category and expectations of futurebad debts based on current collection activities. In determining theallowance, we consider historical write-offs of our receivables as wellas historical changes in our credit policies. We also look at currenttrends in the credit quality of our customer base.

Revenuerecognition – We record equipment revenue for the sale ofhandsets and accessories to customers in our retail stores and to localresellers in our territories. We do not record equipment revenue onhandsets and accessories purchased by our customers from nationalresellers or directly from Sprint. Our customers pay an activation feewhen they initiate service. We allocate amounts charged to customers atthe point of sale between the sale of handsets and other equipment andthe sale of wireless telecommunications services in those transactionstaking place in distribution channels that we directly control.Activation fees charged in transactions outside of our directlycontrolled distribution channels continue to be deferred and amortizedover the average life of the subscriber base.

We recognizerevenue from our customers as they use the service. Additionally, weprovide a reduction of recorded revenue for billing adjustments andbilling corrections.

The cost of handsets sold generally exceedsthe retail sales price, as it is common in our industry to subsidizethe price of handsets for competitive reasons. For handsets soldthrough channels controlled by Sprint that are activated by asubscriber in our territory, we reimburse Sprint for the 

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amount of subsidy incurred by them inconnection with the sale of these handsets. This reimbursement paid toSprint is reflected in our selling and marketing expenses in theconsolidated statements of operations.

Accounting forgoodwill and intangible assets – We have recorded certainintangible assets in connection with the purchase price allocationresulting from the acquisition of Old AirGate by Alamosa Holdings,including both identifiable intangibles and goodwill. Identifiableintangibles consist of the Sprint agreements and the subscriber base inplace at the time of acquisition. The intangible assets related to theSprint agreements are being amortized on a straight line basis over theremaining original term of the underlying Sprint agreements. Thesubscriber base intangible asset is amortized on a straight line basisover the estimated life of the acquired subscribers. We account forgoodwill in accordance with the provisions of SFAS No. 142,"Goodwill and Other Intangible Assets." Inaccordance with SFAS No. 142, goodwill is tested annually forimpairment.

Long-lived asset recovery –Long-lived assets, consisting primarily of property, equipment andintangibles, comprised approximately 88 percent of our total assets atMarch 31, 2005. Changes in technology or in our intended use of theseassets may cause the estimated period of use or the value of theseassets to change. In addition, changes in general industry conditionscould cause the value of certain of these assets to change. We monitorthe appropriateness of the estimated useful lives of these assets.Whenever events or changes in circumstances indicate that the carryingamounts of these assets may not be recoverable, we review therespective assets for impairment. In performing this review, assets aregrouped according to identifiable cash flow streams and theundiscounted cash flow over the life of the asset group is compared tothe carrying value of the asset group. We have determined that we haveone asset grouping related to cash flows generated by our subscriberbase, which includes all of our assets. The life of this asset groupfor purposes of these impairment tests is assumed to be ten years.Estimates and assumptions used in both estimating the useful life andevaluating potential impairment issues require a significant amount ofjudgment.

Operating leases – Operating leases andrelated leasehold improvement costs are accounted for based on theprovisions of SFAS No. 13, "Accounting forLeases." We have a significant number of leases primarilyassociated with towers and other locations on which we install ournetwork equipment. These leases are considered operating leases and themonthly rentals are expensed as incurred while any capital expendituresassociated with preparing the site for our use are capitalized anddepreciated. These capital expenditures are depreciated over theshorter of the lease term or the economic life of the respectiveassets. Additionally, certain of these operating leases contain rentescalation provisions over the term of the respective leases. For thoseleases with escalation provisions, the periodic rental expense isrecorded on a straight line basis over the lease term.

Income taxes – We account for income taxes inaccordance with SFAS No. 109, "Accounting for IncomeTaxes." Under this method, we utilize an asset andliability approach to accounting for income taxes, wherein deferredtaxes are provided for book and tax basis differences for assets andliabilities. In the event differences exist between the book and taxbasis of our assets and liabilities that result in deferred assets, anevaluation of the probability of being able to realize the futurebenefits indicated by such assets is made. A valuation allowance isprovided for the portion of deferred tax assets for which there issufficient uncertainty regarding our ability to recognize the benefitsof those assets in future years.

On a quarterly basis, weevaluate the need for and adequacy of the valuation allowance basedupon the expected realizability of our deferred tax assets and adjustthe amount of such allowance, if necessary. The factors used to assessthe likelihood of realization are the latest forecast of future taxableincome, available tax planning strategies and the future reversal ofexisting taxable temporary differences.

Reliance on thetimeliness and accuracy of data received from Sprint – Weplace significant reliance on Sprint as a service provider in terms ofthe timeliness and accuracy of financial and statistical data relatedto customers based in our service territory that we receive on aperiodic basis from Sprint. We make significant estimates in terms ofrevenue, cost of service, selling and marketing costs and the adequacyof our allowance for uncollectible accounts based on this data wereceive from Sprint. We 

26

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obtain assurance as to the accuracy of thisdata through analytic review and reliance on the service auditor reporton Sprint's internal control processes prepared by Sprint'sexternal service auditor. Inaccurate or incomplete data from Sprintcould have a material adverse effect on our results of operations andcash flow.

Consolidated Results of Operations (dollars inthousands)

The discussion of the results of operations below issignificantly affected by the acquisition of Old AirGate by AlamosaHoldings on February 15, 2005 and the resulting allocation of purchaseprice to the assets and liabilities of the Company. The results ofoperations from acquisition through March 31, 2005 are not comparablewith the results of operations for the period from January 1, 2005 toFebruary 15, 2005 nor with the results of operations for the threemonths ended March 31, 2004 as Old AirGate periods are pre-acquisitionresults and do not include the impact of the purchase price allocationresulting from the acquisition of Old AirGate by Alamosa Holdings.

For the combined period from acquisition through March 31, 2005 andthe period from January 1, 2005 to February 15, 2005, compared to thethree month period ended March 31, 2004

Subscriber growthand key performance indicators – We had total subscribers ofapproximately 425,000 at March 31, 2005 compared to approximately368,000 at March 31, 2004. This growth of approximately 57,000subscribers represents 15 percent year over year and compares to 3percent growth from March 31, 2003 to March 31, 2004. The increase ingrowth is primarily attributable to an increase in our distributionchannels, primarily in our own Sprint retail stores and branded dealersin our territory as well as overall growth in the wirelesstelecommunications industry.

Average monthly churn for the firstquarter of 2005 was approximately 2.5 percent compared to approximately2.9 percent for the first quarter of 2004. We incur significant upfront costs in acquiring customers such that if churn were to increase,it could negatively impact our operations.

Service Revenues– Service revenues consist of revenues from our subscribersand roaming and wholesale revenue earned when subscribers from othercarriers or resellers of PCS service use our portion of the PCS networkof Sprint.

Subscriber revenue consists of payments received fromour subscribers for monthly service under their service plans.Subscriber revenue also includes amortization of deferred activationfees and charges for the use of various features including PCS Vision,the wireless web and voice activated dialing. Subscriber revenues were$34,949 for the period from acquisition to March 31, 2005 and $34,680for the period from January 1, 2005 to February 15, 2005. This combinedsubscriber revenue of $69,629 was approximately 13 percent higher than$61,656 for the quarter ended March 31, 2004. This increase wasprimarily due to the increase in our subscriber base discussed above.Base ARPU (which does not include roaming revenue) for the period fromacquisition to March 31, 2005 was $57, compared to $56 in the quarterended March 31, 2004.

Roaming and wholesale revenue is comprisedof revenue from Sprint and other PCS subscribers based outside of ourterritory who roam onto our portion of the PCS network of Sprint aswell as revenue from resellers of PCS service whose subscribers use ourportion of the PCS network of Sprint.

Roaming and wholesalerevenue was $8,140 for the period from acquisition to March 31, 2005and $10,972 for the period from January 1, 2005 to February 15, 2005.This combined roaming and wholesale revenue of $19,112 wasapproximately 42 percent higher than $13,498 for the quarter endedMarch 31, 2004. This increase was due to a combination of an increasein inbound roaming minutes and an increase in our reciprocal rate withSprint to 5.8 cents per minute in connection with entering into theamendments to the Sprint agreements in August of 2004. The reciprocalrate with Sprint is fixed at 5.8 cents per minute until December 31,2006. We are currently a net receiver of roaming with Sprint, meaningthat the minute volume from other Sprint subscribers roaming onto ournetwork is greater than the minute volume from our subscribers roamingonto other portions of the PCS network of Sprint. We have experiencedan increase in the volume of inbound roaming traffic from PCS

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providers other than Sprint. This traffic issettled at rates separately negotiated by Sprint on our behalf with theother PCS providers and these rates have declined in some cases during2005 compared to 2004.

Product sales and cost of productssold – We record revenue from the sale of handsets andaccessories, net of an allowance for returns, as product sales. Productsales revenue and cost of products sold are recorded for all productsthat are sold through our retail stores as well as those sold to ourlocal indirect agents. The cost of handsets sold generally exceeds theretail sales price as we subsidize the price of handsets forcompetitive reasons. Sprint's handset return policy allowscustomers to return their handsets for a full refund within 14 days ofpurchase. When handsets are returned to us, we may be able to reissuethe handsets to customers at little additional cost to us. However,when handsets are returned to Sprint for refurbishing, we may receive acredit from Sprint, which is less than the amount we originally paidfor the handset.

Product sales revenue for the period fromacquisition to March 31, 2005 was $1,648 and for the period fromJanuary 1, 2005 to February 15, 2005 was $3,211. This combined productsales revenue of $4,859 compares to $2,882 for the first quarter of2004. Cost of products sold for the period from acquisition to March31, 2005 was $4,428 and for the period from January 1, 2005 to February15, 2005 was $5,699. This combined cost of products sold of $10,127compares to $7,202 for the first quarter of 2004. As such, the subsidyon handsets sold through our retail and local indirect channels on acombined basis was $5,268 in the first quarter of 2005 compared to$4,320 in the first quarter of 2004. The increase in subsidies of $948in 2005 is primarily due to an increase in the number of activationsthrough our retail and local indirect channels.

Cost ofservice and operations – Cost of service and operationsincludes the costs of operating our portion of the PCS network ofSprint. These costs include items such as tower operating leases andmaintenance as well as backhaul costs, which are costs associated withtransporting wireless calls across our portion of the PCS network ofSprint to another carrier's network. In addition, cost of serviceand operations includes outbound roaming costs, long distance charges,the fees we pay to Sprint for our 8 percent affiliation fee, backoffice services such as billing and customer care, as well as ourprovision for estimated uncollectible accounts. Expenses were $21,361in the period from acquisition to March 31, 2005 and $23,280 fromJanuary 1, 2005 to February 15, 2005. This combined cost of service andoperations of $44,641 in the first quarter of 2005 was approximately 13percent higher than the $39,422 incurred in the first quarter of 2004.The increase in expenses in 2005 was due to the increased volume oftraffic carried on our network due both to the increase in both oursubscribers as well as wholesale and resale customers.

Selling and marketing expenses – Selling andmarketing expenses include advertising, promotion, sales commissionsand expenses related to our distribution channels, including our retailstore expenses. In addition, we reimburse Sprint for the subsidy onhandsets sold through national retail stores due to the fact that theseretailers purchase their handsets from Sprint. This subsidy is recordedas a selling and marketing expense. Selling and marketing expenses were$8,757 in the period from acquisition to March 31, 2005, and $9,372from January 1, 2005 to February 15, 2005. These combined selling andmarketing expenses of $18,129 in the first quarter of 2005 were 52percent higher than the $11,916 incurred in the first quarter of 2004.The increase experienced in 2005 is attributable to an increase invariable costs resulting from increases in gross activations.

General and administrative expenses – General andadministrative expenses include corporate costs and expenses such asadministration and finance. General and administrative expenses were$2,899 in the period from acquisition to March 31, 2005, and $3,046from January 1, 2005 to February 15, 2005. These combined general andadministrative expenses of $5,945 in the first quarter of 2005 wereconsistent with the $6,337 incurred in the first quarter of 2004.

Merger related expenses – Merger related expense inthe period from January 1, 2005 to February 15, 2005 related to theacquisition of Old AirGate by Alamosa Holdings and was $23,748.Approximately $10,693 was related to the payment for cancellation ofemployee stock options and restricted stock units. Approximately $6,133related to employee severance costs associated with terminatingemployees, including those to be terminated after the close of theacquisition. 

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Approximately $4,269 related to investmentbanking fees. Approximately $1,474 related to future lease payments(net of expected sublease income) for a facility to be closed in May2005. The remaining $1,179 related to legal and other professional feesincurred in connection with the acquisition.

Depreciationand amortization – Depreciation and amortization includesdepreciation of our property and equipment as well as amortization ofintangibles. Depreciation is calculated on the straight-line methodover the estimated useful lives of the underlying assets and totaled$3,599 in the period from acquisition to March 31, 2005 based on thevalue allocated to property and equipment in the purchase priceallocation. Depreciation and amortization was $7,914 from January 1,2005 to February 15, 2005 and was based on the historical cost ofproperty and equipment. Depreciation and amortization of $11,892recorded in the first quarter of 2004 was also based on the historicalcost of property and equipment.

Amortization expense relates toidentifiable intangible assets we have recorded related to valueassigned to the agreements with Sprint and the customer base inconnection with purchase accounting associated with the acquisition ofOld AirGate by Alamosa Holdings. Amortization expense was $10,707 inthe period from inception to March 31, 2005.

Income (loss)from operations – Our operating loss for the period fromacquisition to March 31, 2005 was $7,013 and for the period fromJanuary 1, 2005 to February 15, 2005 was $24,216. This combinedoperating loss of $31,229 for the first quarter of 2005 compares tooperating income for the first quarter of 2004 of $1,270. The decreasein operating income of $32,499 is primarily due to $23,748 in mergerrelated expenses plus $10,707 in amortization of intangibles.

Interest and other income – Interest and other incomerepresents amounts earned on the investment of excess cash. Income was$319 in the period from acquisition to March 31, 2005 and $346 in theperiod from January 1, 2005 to February 15, 2005. This combinedinterest income of $665 in the first quarter of 2005 was significantlyhigher than the $165 earned in the first quarter of 2004. The increasein interest and other income is primarily due to the fact that inOctober 2004, the Company completed an offering of Floating Rate Notesin the amount of $175,000 and used the proceeds to pay off existingdebt of approximately $131,200 resulting in a net increase in cash tothe Company of approximately $43,800.

Interest expense– Interest expense for the period from acquisition to March31, 2005 was $2,768 and for the period from January 1, 2005 to February15, 2005 was $3,921. This combined interest expense of $6,689 in thefirst quarter of 2005 was 41% less than interest expense of$11,311 in the first quarter of 2004. The decrease in interest expensewas due to the debt restructuring completed in February 2004 resultingin a lower amount of borrowings as well as a lower effective interestrate on borrowings.

Income Taxes

We account for incometaxes in accordance with SFAS No. 109, "Accounting forIncome Taxes." Under this method, we utilize an asset andliability approach to accounting for income taxes, wherein deferredtaxes are provided for book and tax basis differences for assets andliabilities. In the event differences exist between the book and taxbasis of our assets and liabilities that result in deferred assets, anevaluation of the probability of being able to realize the futurebenefits indicated by such assets is made. A valuation allowance isprovided for the portion of deferred tax assets for which there issufficient uncertainty regarding our ability to recognize the benefitsof those assets in future years.

On a quarterly basis, weevaluate the need for and adequacy of the valuation allowance basedupon the expected realizability of our deferred tax assets and adjustthe amount of such allowance, if necessary. The factors used to assessthe likelihood of realization are the latest forecast of future taxableincome, available tax planning strategies and the future reversal ofexisting taxable temporary differences.

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Cash Flows

Operatingactivities – Operating cash flows were negative $4,619 inthe period from acquisition to March  31, 2005 and negative$18,735 from January 1, 2005 to February 15, 2005. The combinednegative cash flows from operations of $23,354 for the first quarter of2005 compares to positive cash flow of $13,013 for the first quarter of2004. The decrease of $36,367 was primarily attributable to workingcapital changes of negative $12,957 due to reductions of payables andaccrued expenses as well as an increase in net loss driven byapproximately $23,748 in merger related expenses during the firstquarter of 2005.

Investing activities – Ourinvesting cash flows were $32,848 in the period from acquisition toMarch 31, 2005 including $36,389 net cash recorded in the purchaseprice allocation. Excluding the purchase accounting adjustment, theinvesting cash flows were negative $3,541 primarily associated withpurchases of property and equipment. Investing cash flows for theperiod from January 1, 2005 to February 15, 2005 were positive $40,824including a decrease in short term investments of $49,435 reduced bypurchases of property and equipment of $8,611. Investing cash flows inthe quarter ended March 31, 2004 were negative $5,762 due to purchasesof property and equipment.

Financing activities –Our financing cash flows in the period from acquisition to March31, 2005 were negative $15,000 representing distributions paid toAlamosa Holdings. Financing cash flows in the period from January 1,2005 to February 15, 2005 were negative $1,616 due to $1,629 in debtissuance costs. Financing activities in the quarter ended March 31,2004 were negative $18,701 including repayments of borrowings of$13,255 and equity issuance costs of $4,758.

Liquidity andCapital Resources

Old AirGate financed their operations throughdebt financing and through proceeds generated from public offerings ofOld AirGate common stock and cash provided by operations. The proceedsfrom these transactions and cash provided by operations have been usedto fund the build-out of our portion of the PCS network of Sprint,subscriber acquisition costs and working capital.

As of March31, 2005, we had $13 million in cash and cash equivalents as well as$45 million in short-term investments which we believe will besufficient to fund expected capital expenditures and to cover ourworking capital and debt service requirements for at least the next 12months.

Our future liquidity will be dependent on a number offactors influencing its projections of operating cash flows, includingthose related to subscriber growth, average revenue per user, averagemonthly churn and cost per gross addition. Should actual results differsignificantly from these assumptions, our liquidity position could beadversely affected and it could be in a position that would require itto raise additional capital which may or may not be available on termsacceptable to us, if at all, and could have a material adverse effecton our ability to achieve its intended business objectives.

Future Trends That May Affect Operating Results, Liquidity andCapital Resources

During 2002 and 2003, the wireless industryexperienced overall declining net subscriber growth compared toprevious periods. This trend was attributable to increased competitionand slowing aggregate subscriber growth in the wirelesstelecommunications industry. We are continuing to incur net losses aswe continue to add subscribers, which requires a significant up-frontinvestment to acquire those subscribers. If net subscriber growth doesnot continue to improve, it will lengthen the amount of time it willtake for us to reach a sufficient number of subscribers to achieveprofitability.

We may experience a higher average monthly churnrate than we are currently anticipating. Our average monthly churn forthe period from acquisition to March 31, 2005 was 2.5 percent, comparedto 2.9 percent for the three months ended March 31, 2004. If averagemonthly churn increases over the long-term, we would lose the cashflows attributable to those customers and have greater than projectedlosses.

We may incur significant handset subsidy costs forexisting customers who upgrade to a new handset. As our customer basematures and technological advances in our services take place, more

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existing customers will begin to upgrade tonew handsets to take advantage of these services. We have limitedhistorical experience regarding the rate at which existing customersupgrade their handsets and if more customers upgrade than we arecurrently anticipating, it could have a material adverse impact on ourearnings and cash flows.

We may not realize the anticipatedbenefits of our acquisition by Alamosa Holdings, which took place inFebruary 2005. If we are unable to effectively operate the territoriesacquired in connection with the acquisition, our expected synergies andresults of operations may not be realized, which could have a materialadverse impact on our earnings and cash flows.

We may not beable to access the credit or equity markets for additional capital ifthe liquidity discussed above is not sufficient for the cash needs ofour business. We continually evaluate options for additional sources ofcapital to supplement our liquidity position and maintain maximumfinancial flexibility. If the need for additional capital arises due toour actual results differing significantly from our business plan orfor any other reason, we may be unable to raise additional capital.

Recently Issued Accounting Pronouncements

In December 2004,the Financial Accounting Standards Board("FASB") issued SFAS No. 123(R),"Share-Based Payment," which is a revision ofSFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123(R)requires all share-based payments to employees, including grants ofemployee stock options, to be valued at fair value on the date ofgrant, and to be expensed over the applicable vesting period. Pro formadisclosures of the income statement effects of share-based payments isno longer an alternative. SFAS No. 123(R) is effective for allstock-based awards granted on or after July 1, 2005. In addition,companies must also recognize compensation expense related to anyawards that are not fully vested as of July 1, 2005. Compensationexpense for the unvested awards will be measured based on the fairvalue of the awards previously calculated in developing the pro formadisclosures in accordance with the provisions of SFAS No. 123. On April14, 2005, the SEC announced the adoption of a new rule that amends thecompliance dates for SFAS No. 123(R). The new rule allows registrantsto implement SFAS No. 123(R) at the beginning of their next fiscal yearthat begins after June 15, 2005. As a result, we will be required toadopt the provisions of SFAS No. 123(R) on January 1, 2006. We arecurrently assessing the impact of adopting SFAS No. 123(R) to ourconsolidated results of operations.

On March 31, 2005, the FASBissued Interpretation No. ("FIN") 47,"Accounting for Conditional Asset RetirementObligations" which is an interpretation of SFAS No. 143,"Accounting for Asset RetirementObligations." FIN 47 clarifies that the recognition andmeasurement provisions of SFAS No. 143 apply to asset retirementobligations in which the timing and/or method of settlement may beconditional on a future event, including obligations to remediateasbestos at the end of a building's useful life and obligationsto dispose of chemically-treated telephone poles at the end of theiruseful lives. FIN 47 is effective for fiscal years ending afterDecember 15, 2005. We are currently assessing the impact of adoptingFIN 47 to its consolidated results of operations.

|              |                                                           |
|--------------|-----------------------------------------------------------|
| ITEM3.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK |

Omitted under the reduced disclosure formatpursuant to General Instruction H(2)(c) of Form  10-Q.

|               |                         |
|---------------|-------------------------|
| ITEM 4.  | CONTROLS AND PROCEDURES |

|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | Evaluation of Disclosure Controlsand Procedures. The Company's management with the participationof the Company's Chief Executive Officer and Principal Financialand Accounting Officer has evaluated the effectiveness of ourdisclosure controls and procedures (as such term is defined in Rules13a-15(e) or 15d-15(e) under the Exchange Act of 1934, as amended (the"Exchange Act")), as of the end of the periodcovered by this quarterly report. Based on such evaluation, suchofficers have concluded that, as of the end of the period covered bythis quarterly report, the Company's disclosure controls andprocedures are effective. |

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|           |                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)  | Changesin Internal Control Over Financial Reporting. There have not been anychanges in our internal controls over financial reporting (as such termis defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)during the fiscal quarter to which this report relates that havematerially affected, or are reasonably likely to materially affect, ourinternal controls over financial reporting. |

We place reliance onSprint to adequately design its internal controls with respect to theprocesses established to provide financial information and otherinformation to us and the other PCS Affiliates of Sprint. To addressthis issue, Sprint engages its independent auditors to perform aperiodic evaluation of these controls and to provide a"Report on Controls Placed in Operation and Tests ofOperating Effectiveness for Affiliates" under guidanceprovided in Statement of Auditing Standards No. 70. This report isprovided to us semi-annually.

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**PART II    OTHERINFORMATION**

|               |                   |
|---------------|-------------------|
| ITEM 1.  | LEGALPROCEEDINGS. |

See Part I, Item 1, Note 14 under the caption"Commitments and Contingencies –Litigation" for a description of legal proceedings.

|               |                                                             |
|---------------|-------------------------------------------------------------|
| ITEM 2.  | UNREGISTERED SALES OF EQUITYSECURITIES AND USE OF PROCEEDS. |

Omitted under the reduceddisclosure format pursuant to General Instruction H(2)(c) ofForm  10-Q.

|               |                                 |
|---------------|---------------------------------|
| ITEM 3.  | DEFAULTSUPON SENIOR SECURITIES. |

None.

|              |                                                     |
|--------------|-----------------------------------------------------|
| ITEM4.  | SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS. |

Omitted under the reduced disclosure format pursuantto General Instruction H(2)(c) of Form  10-Q.

|              |                    |
|--------------|--------------------|
| ITEM5.  | OTHER INFORMATION. |

None.

|               |           |
|---------------|-----------|
| ITEM 6.  | EXHIBITS. |

See the ExhibitIndex following the signature page hereto for a list of the exhibitsfiled pursuant to Item 601 of RegulationS-K.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalfby the undersigned thereunto duly authorized.

|        |  |                                                                                                              |  |  |  |  |  |  |  |  |
|--------|--|--------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--|--|--|
|   |  | AIRGATEPCS, INC. (Registrant)                                                                                |  |
|   |  | /s/   DavidE. Sharbutt                                                                        |
|   |  | David E. SharbuttChairman of the Board of Directors and Chief ExecutiveOfficer (Principal Executive Officer) |
|   |  | /s/   KendallW. Cowan                                                                         |
|   |  | Kendall W. Cowan VicePresident, Treasurer and Secretary (Principal Financial andAccounting Officer)          |
|        |

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EXHIBITINDEX

|               |      |              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |
|---------------|------|--------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|
| EXHIBITNUMBER |      | EXHIBITTITLE |
|          | 3.1  |         |  | Certificateof Incorporation of AirGate PCS, Inc., filed as Exhibit 3.1 to theRegistration Statement on Form S-4, dated April 1, 2005 of AirGate PCS,Inc. (SEC File No. 333-123755), which exhibit is incorporated herein byreference.                                                                                                                                                                                                                                                                 |
|          | 3.2  |         |  | Bylaws of AirGate PCS, Inc.,filed as Exhibit 3.2 to the Registration Statement on Form S-4, datedApril 1, 2005 of AirGate PCS, Inc. (SEC File No. 333-123755), whichexhibit is incorporated herein byreference.                                                                                                                                                                                                                                                                                       |
|          | 4.1  |         |  | First Supplemental Indenturefor 9 3/8% Senior Subordinated Secured Notes due 2009, dated asof January 25, 2005, by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantors, and The Bank of New York, as the Trustee,filed as Exhibit 4.2 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 000-16793), dated February 18, 2005, whichexhibit is incorporated herein byreference.             |
|          | 4.2  |         |  | Second Supplemental Indenturefor 9 3/8% Senior Subordinated Secured Notes due 2009, dated asof February 15, 2005 by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantor , and The Bank of New York, as the Trustee,filed as Exhibit 4.3 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 000-16793), dated February 18, 2005, whichexhibit is incorporated herein byreference.            |
|          | 4.3  |         |  | First Supplemental Indenturefor First Priority Senior Secured Floating Rate Notes due 2011, datedas of January 25, 2005, by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantors, and The Bank of New York, as the Trustee,filed as Exhibit 4.5 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 000-16793), dated February 18, 2005, whichexhibit is incorporated herein byreference.    |
|          | 4.4  |         |  | Second Supplemental Indenturefor First Priority Senior Secured Floating Rate Notes due 2011, datedas of February 15, 2005, by and among AirGate PCS, Inc., AGW LeasingCompany, Inc., AirGate Network Services LLC, and AirGate ServiceCompany, Inc., as Guarantors, and The Bank of New York, as the Trustee,filed as Exhibit 4.6 to the current report on the Form 8-K of AlamosaHoldings, Inc. (SEC File No. 000-16793), dated February 18, 2005, whichexhibit is incorporated herein by reference. |
|          | 31.1 | *       |  | Certification of CEO Pursuant to Section 302 of theSarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                        |
|          | 31.2 | *       |  | Certification of principal financial officer Pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                |
|          | 32.1 | *       |  | Certification of CEO Pursuant to 18 U.S.C. Section 1350, asadopted Pursuant to Section 906 of the Sarbanes-Oxley Act of2002.                                                                                                                                                                                                                                                                                                                                                                          |
|          | 32.2 | *       |  | Certification of principalfinancial officer Pursuant to 18 U.S.C. Section 1350, as adoptedPursuant to Section 906 of the Sarbanes-Oxley Act of2002.                                                                                                                                                                                                                                                                                                                                                   |
|               |

|  |
|--|
|  |  |
|  |

|   |                           |
|---|---------------------------|
| * | Exhibit is filedherewith. |

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