|  |
|--|
|  |
|  |
|  |
|  |

UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549

FORM 10-Q

(Mark One)

|        |                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   | QUARTERLY REPORTUNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 forthe quarterly period ended September 30, 2005 |

OR

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

COMMISSION FILE NUMBER: 333-123755

AIRGATE PCS, INC.

(Exact nameof registrant as specified in its charter)

|                                                              |  |                                     |  |  |  |  |
|--------------------------------------------------------------|--|-------------------------------------|--|--|--|--|
| DELAWARE                                                     |  | 20-2156350                          |
| (State or other jurisdictionofincorporation or organization) |  | (I.R.S. EmployerIdentification No.) |
|                                                              |

5225 SOUTHLOOP 289, SUITE 120 LUBBOCK, TEXAS 79424

(Address of principal executive offices,including zip code)

(806) 722-1100

(Registrant's telephone number,including area code)

Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

YES       NO   

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES       NO   

Indicate by check mark whether the registrant is a shellcompany (as defined in Rule 12b-2 of the Exchange Act).

YES       NO   

There is currently no public market for theregistrant's common stock.

As of November 7,2005, 1,000 shares of common stock, $0.01 par value per share, wereissued and outstanding.

The registrant meets theconditions set forth in General Instructions H(1)(a) and (b) of Form10-Q and is therefore filing this form with the reduced disclosureformat.

|  |
|--|
|  |
|  |
|  |
|  |

----

AIRGATE PCS, INC.

TABLE OFCONTENTS

|                |  |                                                                                                                                                                                                                                                                     |  |        |        |        |        |        |  |  |  |  |  |  |
|----------------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------|--------|--------|--------|--------|--|--|--|--|--|--|
|           |  |                                                                                                                                                                                                                                                                |  | PAGE   |        |   |   |   |
| PARTI          |  | FINANCIALINFORMATION                                                                                                                                                                                                                                                |  |   |        |   |   |   |
| Item1.         |  | FinancialStatements                                                                                                                                                                                                                                                 |  |   |        |   |   |   |
|           |  | Consolidated BalanceSheets at September 30, 2005 and December 31, 2004(unaudited)                                                                                                                                                                                   |  | 3      |        |   |   |   |
|           |  | ConsolidatedStatements of Operations for the three months ended September 30, 2005and 2004,for the period from acquisition to September 30, 2005, for theperiod from January 1, 2005 toFebruary 15, 2005 and for the nine monthsended September 30, 2004(unaudited) |  | 4      |        |   |   |   |
|           |  | ConsolidatedStatements of Cash Flows for the period from acquisition to September30, 2005, for the period from January 1, 2005 to February 15, 2005 andfor the nine months endedSeptember 30, 2004(unaudited)                                                       |  | 5      |        |   |   |   |
|           |  | Notes to theConsolidated FinancialStatements                                                                                                                                                                                                                        |  | 6      |        |   |   |   |
| Item2.         |  | Management's Discussion and Analysis of FinancialCondition and Results ofOperations                                                                                                                                                                                 |  | 26     |        |   |   |   |
| Item3.         |  | Quantitative and Qualitative Disclosures About MarketRisk                                                                                                                                                                                                           |  | 36     |        |   |   |   |
| Item 4.        |  | ControlsandProcedures                                                                                                                                                                                                                                               |  | 36     |        |   |   |   |
| PARTII         |  | OTHER INFORMATION                                                                                                                                                                                                                                                   |  |   |        |   |   |   |
| Item1.         |  | LegalProceedings                                                                                                                                                                                                                                                    |  | 37     |        |   |   |   |
| Item2.         |  | Unregistered Sales of Equity Securities and Use ofProceeds                                                                                                                                                                                                          |  | 37     |        |   |   |   |
| Item3.         |  | Defaults Upon SeniorSecurities                                                                                                                                                                                                                                      |  | 37     |        |   |   |   |
| Item4.         |  | Submission of Matters to a Vote of SecurityHolders                                                                                                                                                                                                                  |  | 37     |        |   |   |   |
| Item 5.        |  | OtherInformation                                                                                                                                                                                                                                                    |  | 37     |        |   |   |   |
| Item6.         |  | Exhibits                                                                                                                                                                                                                                                            |  | 37     |        |   |   |   |
| **SIGNATURES** |  | 38                                                                                                                                                                                                                                                                  |  |   |   |   |
|                |

2

----

PART I – FINANCIALINFORMATION ITEM 1. FINANCIAL STATEMENTS

AIRGATEPCS, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in thousands, except shareinformation)

|                                                                                                                                                   |  |                   |         |                  |  |        |            |         |  |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--|-------------------|---------|------------------|--|--------|------------|---------|--|--|
|                                                                                                                                              |  | Company           |         | OldAirGate       |
|                                                                                                                                              |  | September 30,2005 |         | December 31,2004 |
| ASSETS                                                                                                                                            |  |              |    |             |  |   |       |    |
| Currentassets:                                                                                                                                    |  |              |    |             |  |   |       |    |
| Cash and cashequivalents                                                                                                                          |  | $                 | 17,372  |             |  | $      | 15,917     |    |
| Shortterminvestments                                                                                                                              |  |              | 35,520  |             |  |   | 94,059     |    |
| Customeraccounts receivable,net                                                                                                                   |  |              | 21,994  |             |  |   | 20,848     |    |
| ReceivablefromSprint                                                                                                                              |  |              | 5,066   |             |  |   | 5,671      |    |
| Inventory                                                                                                                                         |  |              | 3,183   |             |  |   | 4,672      |    |
| Prepaidexpenses and otherassets                                                                                                                   |  |              | 7,366   |             |  |   | 3,991      |    |
| Deferredcustomer acquisitioncosts                                                                                                                 |  |              | 417     |             |  |   | —    |    |
| Deferredtaxasset                                                                                                                                  |  |              | 11,711  |             |  |   | —    |    |
| Totalcurrentassets                                                                                                                                |  |              | 102,629 |             |  |   | 145,158    |    |
| Propertyand equipment,net                                                                                                                         |  |              | 101,426 |             |  |   | 130,809    |    |
| Debt issuancecosts,net                                                                                                                            |  |              | — |             |  |   | 4,621      |    |
| Goodwill                                                                                                                                          |  |              | 255,628 |             |  |   | —    |    |
| Intangibleassets, net                                                                                                                             |  |              | 370,426 |             |  |   | —    |    |
| Othernoncurrentassets                                                                                                                             |  |              | 1,628   |             |  |   | 2,645      |    |
| Totalassets                                                                                                                                       |  | $                 | 831,737 |             |  | $      | 283,233    |    |
| LIABILITIESAND STOCKHOLDERS' EQUITY(DEFICIT)                                                                                                      |  |              |    |             |  |   |       |    |
| Currentliabilities:                                                                                                                               |  |              |    |             |  |   |       |    |
| Accountspayable                                                                                                                                   |  | $                 | 3,506   |             |  | $      | 1,275      |    |
| Accruedexpenses                                                                                                                                   |  |              | 15,331  |             |  |   | 17,245     |    |
| PayabletoSprint                                                                                                                                   |  |              | 13,610  |             |  |   | 24,348     |    |
| PayabletoParent                                                                                                                                   |  |              | 2,984   |             |  |   | —    |    |
| Interestpayable                                                                                                                                   |  |              | 6,407   |             |  |   | 9,388      |    |
| Deferredrevenue                                                                                                                                   |  |              | 8,552   |             |  |   | 9,567      |    |
| Totalcurrentliabilities                                                                                                                           |  |              | 50,390  |             |  |   | 61,823     |    |
| Longterm liabilities:                                                                                                                             |  |              |    |             |  |   |       |    |
| Othernoncurrentliabilities                                                                                                                        |  |              | 1,358   |             |  |   | 3,363      |    |
| Deferredtaxliability                                                                                                                              |  |              | 27,700  |             |  |   | —    |    |
| Seniornotes                                                                                                                                       |  |              | 346,352 |             |  |   | 312,478    |    |
| Totallong termliabilities                                                                                                                         |  |              | 375,410 |             |  |   | 315,841    |    |
| Totalliabilities                                                                                                                                  |  |              | 425,800 |             |  |   | 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                                                                                                                          |  |              | 424,560 |             |  |   | 1,047,676  |    |
| Accumulateddeficit                                                                                                                                |  |              | (18,623 | )           |  |   | (1,142,225 | )  |
| Totalstockholders' equity(deficit)                                                                                                                |  |              | 405,937 |             |  |   | (94,431    | )  |
| Totalliabilities and stockholders' equity(deficit)                                                                                                |  | $                 | 831,737 |             |  | $      | 283,233    |    |
|                                                                                                                                                   |

|  |                                                                                     |
|--|-------------------------------------------------------------------------------------|
|  | Theaccompanying notes are an integral part of the consolidated financialstatements. |

3

----

AIRGATE PCS, INC CONSOLIDATEDSTATEMENTS OF OPERATIONS (UNAUDITED)

(dollars in thousands, except per shareamounts)

|                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |         |                                          |  |                                                              |            |                                                    |  |                                        |         |         |  |        |            |         |  |        |            |         |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-----------------------------------------|---------|------------------------------------------|--|--------------------------------------------------------------|------------|----------------------------------------------------|--|----------------------------------------|---------|---------|--|--------|------------|---------|--|--------|------------|---------|--|--|
|                                                                                                                                                                                                                                                                                                                                                                              |  | Company                                 |         | OldAirGate                               |  | Company                                                      |            | OldAirGate                                         |
|                                                                                                                                                                                                                                                                                                                                                                              |  | ForthethreemonthsendedSeptember 30,2005 |         | For thethreemonthsendedSeptember30, 2004 |  | For theperiod fromacquisition(see Note4) toSeptember30, 2005 |            | For theperiodfromJanuary 1,2005 toFebruary 15,2005 |  | Forthe ninemonthsendedSeptember30,2004 |
| Revenues:                                                                                                                                                                                                                                                                                                                                                                         |  |                                    |    |                                     |  |                                                         |       |                                               |  |                                   |    |    |  |   |       |    |  |   |       |    |
| Subscriberrevenues                                                                                                                                                                                                                                                                                                                                                                |  | $                                       | 72,624  |                                     |  | $                                                            | 65,622     |                                               |  | $                                      | 181,394 |    |  | $      | 34,680     |    |  | $      | 192,315    |    |
| Roamingand wholesalerevenues                                                                                                                                                                                                                                                                                                                                                      |  |                                    | 27,729  |                                     |  |                                                         | 22,338     |                                               |  |                                   | 60,645  |    |  |   | 10,972     |    |  |   | 53,225     |    |
| Servicerevenues                                                                                                                                                                                                                                                                                                                                                                   |  |                                    | 100,353 |                                     |  |                                                         | 87,960     |                                               |  |                                   | 242,039 |    |  |   | 45,652     |    |  |   | 245,540    |    |
| Productsales                                                                                                                                                                                                                                                                                                                                                                      |  |                                    | 3,338   |                                     |  |                                                         | 3,571      |                                               |  |                                   | 7,991   |    |  |   | 3,191      |    |  |   | 10,065     |    |
| Totalrevenue                                                                                                                                                                                                                                                                                                                                                                      |  |                                    | 103,691 |                                     |  |                                                         | 91,531     |                                               |  |                                   | 250,030 |    |  |   | 48,843     |    |  |   | 255,605    |    |
| Costsandexpenses:                                                                                                                                                                                                                                                                                                                                                                 |  |                                    |    |                                     |  |                                                         |       |                                               |  |                                   |    |    |  |   |       |    |  |   |       |    |
| Costof service and operations (excluding depreciation shown separatelybelow of $4,607 and $11,440 for the three months ended September 30,2005 and 2004, respectively, and $13,739 $7,594 and $33,824 for theperiod from acquisition to September 30, 2005, for the period fromJanuary 1, 2005 to February 15, 2005 and for the nine months endedSeptember 30, 2004,respectively) |  |                                    | 55,565  |                                     |  |                                                         | 36,251     |                                               |  |                                   | 130,005 |    |  |   | 23,782     |    |  |   | 118,965    |    |
| Costof productssold                                                                                                                                                                                                                                                                                                                                                               |  |                                    | 8,073   |                                     |  |                                                         | 8,651      |                                               |  |                                   | 20,199  |    |  |   | 6,528      |    |  |   | 22,523     |    |
| Sellingandmarketing                                                                                                                                                                                                                                                                                                                                                               |  |                                    | 13,737  |                                     |  |                                                         | 13,928     |                                               |  |                                   | 34,887  |    |  |   | 9,261      |    |  |   | 36,734     |    |
| Generaland administrativeexpenses                                                                                                                                                                                                                                                                                                                                                 |  |                                    | 4,566   |                                     |  |                                                         | 4,624      |                                               |  |                                   | 13,388  |    |  |   | 2,885      |    |  |   | 15,917     |    |
| Mergerrelatedexpenses                                                                                                                                                                                                                                                                                                                                                             |  |                                    | — |                                     |  |                                                         | —    |                                               |  |                                   | — |    |  |   | 23,803     |    |  |   | —    |    |
| Depreciationandamortization                                                                                                                                                                                                                                                                                                                                                       |  |                                    | 26,608  |                                     |  |                                                         | 12,155     |                                               |  |                                   | 68,711  |    |  |   | 7,914      |    |  |   | 36,062     |    |
| Losson disposal of property andequipment                                                                                                                                                                                                                                                                                                                                          |  |                                    | 120     |                                     |  |                                                         | 55         |                                               |  |                                   | 120     |    |  |   | 20         |    |  |   | 50         |    |
| Totalcosts andexpenses                                                                                                                                                                                                                                                                                                                                                            |  |                                    | 108,669 |                                     |  |                                                         | 75,664     |                                               |  |                                   | 267,310 |    |  |   | 74,193     |    |  |   | 230,251    |    |
| Income(loss) fromoperations                                                                                                                                                                                                                                                                                                                                                       |  |                                    | (4,978  | )                                   |  |                                                         | 15,867     |                                               |  |                                   | (17,280 | )  |  |   | (25,350    | )  |  |   | 25,354     |    |
| Interestand otherincome                                                                                                                                                                                                                                                                                                                                                           |  |                                    | 694     |                                     |  |                                                         | 237        |                                               |  |                                   | 1,719   |    |  |   | 346        |    |  |   | 590        |    |
| Interestexpense                                                                                                                                                                                                                                                                                                                                                                   |  |                                    | (6,275  | )                                   |  |                                                         | (7,428     | )                                             |  |                                   | (14,772 | )  |  |   | (4,111     | )  |  |   | (24,969    | )  |
|                                                                                                                                                                                                                                                                                                                                                                              |  |                                    |    |                                     |  |                                                         |       |                                               |  |                                   |    |    |  |   |       |    |  |   |       |    |
| Income(loss) before income taxbenefit                                                                                                                                                                                                                                                                                                                                             |  |                                    | (10,559 | )                                   |  |                                                         | 8,676      |                                               |  |                                   | (30,333 | )  |  |   | (29,115    | )  |  |   | 975        |    |
| Incometaxbenefit                                                                                                                                                                                                                                                                                                                                                                  |  |                                    | 4,099   |                                     |  |                                                         | —    |                                               |  |                                   | 11,710  |    |  |   | —    |    |  |   | —    |    |
| Netincome(loss)                                                                                                                                                                                                                                                                                                                                                                   |  | $                                       | (6,460  | )                                   |  | $                                                            | 8,676      |                                               |  | $                                      | (18,623 | )  |  | $      | (29,115    | )  |  | $      | 975        |    |
| Netincome (loss) per commonshare:                                                                                                                                                                                                                                                                                                                                                 |  |                                    |    |                                     |  |                                                         |       |                                               |  |                                   |    |    |  |   |       |    |  |   |       |    |
| Basic                                                                                                                                                                                                                                                                                                                                                                             |  |                                    |    |                                     |  | $                                                            | 0.74       |                                               |  |                                   |    |    |  | $      | (2.46      | )  |  | $      | 0.09       |    |
| Diluted                                                                                                                                                                                                                                                                                                                                                                           |  |                                    |    |                                     |  | $                                                            | 0.73       |                                               |  |                                   |    |    |  | $      | (2.46      | )  |  | $      | 0.09       |    |
| Weightedaverage common sharesoutstanding:                                                                                                                                                                                                                                                                                                                                         |  |                                    |    |                                     |  |                                                         |       |                                               |  |                                   |    |    |  |   |       |    |  |   |       |    |
| Basic                                                                                                                                                                                                                                                                                                                                                                             |  |                                    |    |                                     |  |                                                         | 11,771,036 |                                               |  |                                   |    |    |  |   | 11,831,973 |    |  |   | 10,568,083 |    |
| Diluted                                                                                                                                                                                                                                                                                                                                                                           |  |                                    |    |                                     |  |                                                         | 11,837,163 |                                               |  |                                   |    |    |  |   | 11,831,973 |    |  |   | 10,628,056 |    |
|                                                                                                                                                                                                                                                                                                                                                                                   |

|  |                                                                                     |
|--|-------------------------------------------------------------------------------------|
|  | Theaccompanying notes are an integral part of the consolidated financialstatements. |

4

----

AIRGATE PCS, INCCONSOLIDATEDSTATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars inthousands)

|                                                                                         |  |                                                               |          |                                                      |  |                                           |         |         |  |        |          |         |  |  |
|-----------------------------------------------------------------------------------------|--|---------------------------------------------------------------|----------|------------------------------------------------------|--|-------------------------------------------|---------|---------|--|--------|----------|---------|--|--|
|                                                                                    |  | Company                                                       |          | OldAirGate                                           |
|                                                                                    |  | For theperiodfrom acquisition(see Note 4) toSeptember 30,2005 |          | For theperiod fromJanuary 1, 2005toFebruary 15, 2005 |  | For the ninemonthsendedSeptember 30, 2004 |
| Cash flowsfrom operatingactivities:                                                     |  |                                                          |     |                                                 |  |                                      |    |    |  |   |     |    |
| Netloss                                                                                 |  | $                                                             | (18,623  | )                                               |  | $                                         | (29,115 | )  |  | $      | 975      |    |
| Adjustmentsto reconcile net loss to net cash provided by (used in) operatingactivities: |  |                                                          |     |                                                 |  |                                      |    |    |  |   |     |    |
| Non-cashcompensation expense(benefit)                                                   |  |                                                          | —  |                                                 |  |                                      | (823    | )  |  |   | 560      |    |
| Non-cashaccretion of asset retirementobligations                                        |  |                                                          | 44       |                                                 |  |                                      | 56      |    |  |   | —  |    |
| Provisionfor baddebts                                                                   |  |                                                          | 3,250    |                                                 |  |                                      | (955    | )  |  |   | (224     | )  |
| Depreciationand amortization of property andequipment                                   |  |                                                          | 14,136   |                                                 |  |                                      | 7,914   |    |  |   | 36,062   |    |
| Amortizationof intangibleassets                                                         |  |                                                          | 54,574   |                                                 |  |                                      | — |    |  |   | —  |    |
| Amortizationof financing costs included in interestexpense                              |  |                                                          | —  |                                                 |  |                                      | 457     |    |  |   | 690      |    |
| Amortizationof debtpremium                                                              |  |                                                          | (2,039   | )                                               |  |                                      | — |    |  |   | —  |    |
| Deferredincometaxes                                                                     |  |                                                          | (11,710  | )                                               |  |                                      | — |    |  |   | —  |    |
| Interestaccreted on discountnotes                                                       |  |                                                          | —  |                                                 |  |                                      | — |    |  |   | 6,976    |    |
| Losson disposal of property andequipment                                                |  |                                                          | 120      |                                                 |  |                                      | 20      |    |  |   | 50       |    |
| (Increase)decreasein:                                                                   |  |                                                          |     |                                                 |  |                                      |    |    |  |   |     |    |
| Receivablefrom/payable toParent                                                         |  |                                                          | 2,986    |                                                 |  |                                      | — |    |  |   | —  |    |
| Receivables                                                                             |  |                                                          | 10,469   |                                                 |  |                                      | (2,892  | )  |  |   | (6,981   | )  |
| Inventory                                                                               |  |                                                          | 1,148    |                                                 |  |                                      | 341     |    |  |   | (446     | )  |
| Prepaidexpenses and otherassets                                                         |  |                                                          | (3,690   | )                                               |  |                                      | (2,329  | )  |  |   | 6,374    |    |
| Increase(decrease)in:                                                                   |  |                                                          |     |                                                 |  |                                      |    |    |  |   |     |    |
| Accountspayable and accruedexpenses                                                     |  |                                                          | (27,483  | )                                               |  |                                      | 8,708   |    |  |   | 2,298    |    |
| Netcash provided by (used in) operatingactivities                                       |  |                                                          | 23,182   |                                                 |  |                                      | (18,618 | )  |  |   | 46,334   |    |
| Cashflows from investingactivities:                                                     |  |                                                          |     |                                                 |  |                                      |    |    |  |   |     |    |
| Purchasesof property andequipment                                                       |  |                                                          | (36,134  | )                                               |  |                                      | (8,611  | )  |  |   | (12,484  | )  |
| Acquisitionof business, net of cashpaid                                                 |  |                                                          | 36,220   |                                                 |  |                                      | — |    |  |   | —  |    |
| Changein short terminvestments                                                          |  |                                                          | 9,104    |                                                 |  |                                      | 49,435  |    |  |   | (55,000  | )  |
| Netcash provided by (used in) investingactivities                                       |  |                                                          | 9,190    |                                                 |  |                                      | 40,824  |    |  |   | (67,484  | )  |
| Cashflows from financingactivities:                                                     |  |                                                          |     |                                                 |  |                                      |    |    |  |   |     |    |
| Repaymentsof borrowings under senior secureddebt                                        |  |                                                          | —  |                                                 |  |                                      | — |    |  |   | (19,769  | )  |
| Debtissuancecosts                                                                       |  |                                                          | —  |                                                 |  |                                      | (1,629  | )  |  |   | (947     | )  |
| Capitaldistribution toParent                                                            |  |                                                          | (15,000  | )                                               |  |                                      | — |    |  |   | —  |    |
| Stockoptionsexercised                                                                   |  |                                                          | —  |                                                 |  |                                      | 12      |    |  |   | 30       |    |
| Equityissuancecosts                                                                     |  |                                                          | —  |                                                 |  |                                      | — |    |  |   | (4,754   | )  |
| Netcash used in financingactivities                                                     |  |                                                          | (15,000  | )                                               |  |                                      | (1,617  | )  |  |   | (25,440  | )  |
| Netincrease (decrease) in cash and cashequivalents                                      |  |                                                          | 17,372   |                                                 |  |                                      | 20,589  |    |  |   | (46,590  | )  |
| Cashand cash equivalents at beginning ofperiod                                          |  |                                                          | —  |                                                 |  |                                      | 15,917  |    |  |   | 60,043   |    |
| Cashand cash equivalents at end ofperiod                                                |  | $                                                             | 17,372   |                                                 |  | $                                         | 36,506  |    |  | $      | 13,453   |    |
| Supplementaldisclosure of non-cash financing and investingactivities:                   |  |                                                          |     |                                                 |  |                                      |    |    |  |   |     |    |
| Capitalinfusion in businesscombination                                                  |  | $                                                             | 333,416  |                                                 |  | $                                         | — |    |  | $      | —  |    |
| Fairvalue of assets recorded in businesscombination                                     |  |                                                          | 879,074  |                                                 |  |                                      | — |    |  |   | —  |    |
| Fairvalue of liabilities recorded in businesscombination                                |  |                                                          | (449,829 | )                                               |  |                                      | — |    |  |   | —  |    |
| Assetretirement obligationscapitalized                                                  |  |                                                          | 60       |                                                 |  |                                      | — |    |  |   | —  |    |
| Changein accounts payable for purchases of property andequipment                        |  |                                                          | 2,403    |                                                 |  |                                      | — |    |  |   | —  |    |
| Capitalizedinterest                                                                     |  |                                                          | —  |                                                 |  |                                      | — |    |  |   | 45       |    |
| 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. |

5

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS (UNAUDITED)(dollars in thousands,except asnoted)

|          |                                                                 |
|----------|-----------------------------------------------------------------|
| 1.  | BASIS OF PRESENTATION OF UNAUDITEDINTERIM FINANCIAL INFORMATION |

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. AirGate is referred to in these consolidated financialstatements as the "Company,""we," "us" or"our."

The unaudited consolidatedbalance sheets at September 30, 2005 and December 31, 2004, theunaudited consolidated statements of operations for the three monthsended September 30, 2005 and 2004, for the period from acquisition toSeptember 30, 2005, for the period from January 1, 2005 to February 15,2005 and for the nine months ended September 30, 2004, the unauditedconsolidated statements of cash flows for the period from acquisitionto September 30, 2005, for the period from January 1, 2005 to February15, 2005 and for the nine months ended September 30, 2004 and relatedfootnotes have been prepared in accordance with accounting principlesgenerally accepted in the United States of America for interimfinancial information and Article 10 of Regulation S-X. Accordingly,they do not include all of the information and footnotes requiredannually by accounting principles generally accepted in the UnitedStates of America. In the opinion of management, the interim dataincludes all adjustments (consisting of only normally recurringadjustments) necessary for a fair statement of the results for theinterim periods. Operating results for the period ended September 30,2005 are not necessarily indicative of results that may be expected forthe year ending December 31, 2005.

Old AirGate basic and dilutednet loss per share of common stock for the period from January 1, 2005to February 15, 2005 is computed by dividing net loss attributable tocommon stockholders by the weighted-average outstanding number ofcommon shares. No conversion of common stock equivalents has beenassumed in the calculations for this period since the effect would beantidilutive. As a result, the number of weighted-average outstandingcommon shares as well as the amount of net loss per share are the samefor basic and diluted net loss per share calculations. For the threeand nine months ended September 30, 2004, the diluted weighted averagenumber of common shares outstanding include 66,127 and 59,973 shares,respectively, related to stock options and warrants with exerciseprices below the weighted average fair value of Old AirGate stockduring the period using the treasury stock method. All outstandingoptions were terminated on February 15, 2005.

Company basic anddiluted net loss per share for the period from acquisition to September30, 2005 is not presented as the Company is now a wholly-ownedsubsidiary of Alamosa Holdings.

Certain reclassifications havebeen made to Old AirGate balances to conform to Companypresentation.

|          |                                     |
|----------|-------------------------------------|
| 2.  | ORGANIZATION AND BUSINESSOPERATIONS |

AirGate is a wholly-owned subsidiary of AlamosaHoldings and a PCS Affiliate of Sprint with the exclusive right toprovide wireless personal communications services under the Sprintbrand name in a territory encompassing approximately 7.4 millionresidents. The Company was formed in December 2004 as A-Co. Merger Sub,Inc. in anticipation of the acquisition of Old 

6

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

AirGate on February 15, 2005, as discussed inNote 4. Subsequent to the closing of the transaction, A-Co. changed itsname to AirGate PCS, Inc. The Company provides wireless personalcommunications services, commonly referred to as PCS, in thesoutheastern United States. The accompanying consolidated financialstatements include the accounts of AirGate and its wholly-ownedrestricted subsidiaries, AGW Leasing Company, Inc., AirGate ServiceCompany, Inc. and AirGate Network Services, LLC.

|          |                                 |
|----------|---------------------------------|
| 3.  | LIQUIDITY AND CAPITAL RESOURCES |

OldAirGate financed its operations through debt financing and throughproceeds generated from public offerings of Old AirGate common stockand cash provided by operations. The proceeds from these transactionsand cash provided by operations have been used to fund the build-out ofthe Company's portion of the PCS network of Sprint, subscriberacquisition costs and working capital.

As of September 30, 2005,the Company had $17 million in cash and cash equivalents as well as $36million 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 |

As discussed in Note 1, Old AirGate was acquired by Alamosa Holdingson February 15, 2005. The transaction was accounted for under thepurchase method of accounting and the results of the Company areincluded in the consolidated financial statements of Alamosa Holdingsfrom the date of acquisition.

The merger consideration consistedof 26.1 million shares of Alamosa Holdings common stock valued at$12.66 per share, representing the average closing price of AlamosaHoldings common stock from February 10, 2005 to February 15, 2005, andapproximately $100.0 million in cash plus direct transaction costs ofapproximately $6.4 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 obtained anindependent valuation of certain assets to facilitate the allocation ofthe purchase price. The preliminary result of the allocation is asfollows:

7

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

|                                                    |  |        |         |        |  |  |
|----------------------------------------------------|--|--------|---------|--------|--|--|
| Consideration:                                     |  |   |    |   |
| AlamosaHoldings common stock issued                |  | $      | 330,848 |   |
| Commonstock warrants assumed by AlamosaHoldings    |  |   | 2,568   |   |
| Cashconsideration                                  |  |   | 100,001 |   |
| Totalconsideration                                 |  |   | 433,417 |   |
|                                               |  |   |    |   |
| Directtransaction costs                            |  |   | 6,429   |   |
| Long-termdebt assumed (at fairvalue)               |  |   | 348,391 |   |
| Other liabilitiesassumed (including deferredtaxes) |  |   | 101,438 |   |
| Totalpurchaseprice                                 |  |   | 889,675 |   |
|                                               |  |   |    |   |
| Allocatedto:                                       |  |   |    |   |
| Currentassets                                      |  |   | 130,996 |   |
| Property andequipment                              |  |   | 77,085  |   |
| Other tangible non-currentassets                   |  |   | 966     |   |
| Intangible assets (other thangoodwill)             |  |   | 425,000 |   |
| Goodwill                                           |  | $      | 255,628 |   |
|                                                    |

Asa result of the acquisition of Old AirGate by Alamosa Holdings, theCompany implemented a plan to terminate certain employees of OldAirGate as well as to close certain locations. In connection with thisplan, the Company established reserves for severance and related costssuch as payments in connection with cancellation of employee stockoptions and restricted stock units as well as reserves for future leasepayments associated with an operating lease on a facility to be closed(net of estimated sub-lease income) in May 2005. Activity with respectto these reservesfollows:

|                              |  |                                            |         |                                                    |  |                                                     |         |         |  |        |         |         |  |  |
|------------------------------|--|--------------------------------------------|---------|----------------------------------------------------|--|-----------------------------------------------------|---------|---------|--|--------|---------|---------|--|--|
|                         |  | Company                                    |         | OldAirGate                                         |
|                         |  | For thethreemonths endedSeptember 30, 2005 |         | For theperiodfrom acquisition toSeptember 30, 2005 |  | For theperiodfrom January 1,2005 to February15,2005 |
| Severance and relatedcosts:  |  |                                       |    |                                               |  |                                                |    |    |  |   |    |    |
|                         |  |                                       |    |                                               |  |                                                |    |    |  |   |    |    |
| Balanceat beginning ofperiod |  | $                                          | 8       |                                               |  | $                                                   | 2,184   |    |  | $      | — |    |
| Netcharges(benefit)          |  |                                       | — |                                               |  |                                                | — |    |  |   | 16,778  |    |
| Payments                     |  |                                       | (5      | )                                             |  |                                                | (2,181  | )  |  |   | (14,594 | )  |
| Balanceat end ofperiod       |  | $                                          | 3       |                                               |  | $                                                   | 3       |    |  | $      | 2,184   |    |
|                         |  |                                       |    |                                               |  |                                                |    |    |  |   |    |    |
| Futurelease payments,net:    |  |                                       |    |                                               |  |                                                |    |    |  |   |    |    |
| Balance atbeginning ofperiod |  | $                                          | 1,390   |                                               |  | $                                                   | 1,474   |    |  | $      | — |    |
| Netcharges(benefit)          |  |                                       | — |                                               |  |                                                | — |    |  |   | 1,474   |    |
| Payments                     |  |                                       | (126    | )                                             |  |                                                | (210    | )  |  |   | — |    |
| Balanceat end ofperiod       |  | $                                          | 1,264   |                                               |  | $                                                   | 1,264   |    |  | $      | 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

8

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

included in Old AirGate's consolidatedstatements of operations for the period from January 1, 2005 toFebruary 15, 2005 of $823 represents the reversal of previouslyrecorded variable non-cash compensation expense associated withrestricted stock unit awards that were cancelled and settled in cash onFebruary 15, 2005 by Old AirGate immediately prior to the merger withAlamosa Holdings. Non-cash compensation expense in the three month andnine month periods ended September 30, 2004 is related to the vestingof employee stock options that had been issued with an exercise priceless than the market price on the date of grant. No stock-basedcompensation expense was recorded in the period from acquisition toSeptember 30, 2005. The following table illustrates the effect on OldAirGate net loss and Old AirGate net loss per share if Old AirGate hadapplied the fair value recognition provisions of Statement of FinancialAccounting Standards ("SFAS") No. 123,"Accounting for Stock-Based Compensation," tostock-based employee compensation:

|                                                                                                                              |  |                                                     |         |                                            |  |                                            |        |        |  |        |        |        |  |  |
|------------------------------------------------------------------------------------------------------------------------------|--|-----------------------------------------------------|---------|--------------------------------------------|--|--------------------------------------------|--------|--------|--|--------|--------|--------|--|--|
|                                                                                                                         |  | OldAirGate                                          |
|                                                                                                                         |  | For theperiodfrom January 1,2005 to February15,2005 |         | For the threemonths endedSeptember 30,2004 |  | For the nine months endedSeptember 30,2004 |
|                                                                                                                         |  |                                                |    |                                       |  |                                       |   |   |  |   |   |   |
| Netincome (loss) – asreported                                                                                          |  | $                                                   | (29,115 | )                                     |  | $                                          | 8,676  |   |  | $      | 975    |   |
| Add:stock-based employee compensation included in reported net loss, net ofrelatedtax                                        |  |                                                | 9,870   |                                       |  |                                       | 181    |   |  |   | 560    |   |
| Deduct:stock-based employee compensation expense determined under fair valuemethod for all awards, net of related taxeffects |  |                                                | (9,870  | )                                     |  |                                       | 3,123  |   |  |   | 75     |   |
| Netincome (loss) – proforma                                                                                            |  | $                                                   | (29,115 | )                                     |  | $                                          | 11,980 |   |  | $      | 1,610  |   |
| Netincome (loss) per share – asreportedBasic                                                                           |  | $                                                   | (2.46   | )                                     |  | $                                          | 0.74   |   |  | $      | 0.09   |   |
| Diluted                                                                                                                      |  | $                                                   | (2.46   | )                                     |  | $                                          | 0.73   |   |  | $      | 0.09   |   |
| Netincome (loss) per share – proformaBasic                                                                             |  | $                                                   | (2.46   | )                                     |  | $                                          | 1.02   |   |  | $      | 0.15   |   |
| Diluted                                                                                                                      |  | $                                                   | (2.46   | )                                     |  | $                                          | 1.01   |   |  | $      | 0.15   |   |
|                                                                                                                              |

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 No. 123 and compensation expense had been recorded as anadjustment to equity. As the units were terminated without shares beingissued, the cumulative compensation recorded up to the settlement dateas an adjustment to equity was reversed and a non-cash compensationbenefit of 

9

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

$823 was recorded in the period from January1, 2005 to February 15, 2005. As a result of the above cancellations,the Company has no outstanding stock-based compensation awards as ofSeptember 30, 2005.

|          |                    |
|----------|--------------------|
| 6.  | ACCOUNTSRECEIVABLE |

Customer accounts receivable —Customer accounts receivable represent amounts owed to the Companyby subscribers for PCS service. Customer accounts receivable do notbear interest.

The amounts presented in the consolidated balancesheets are net of an allowance for uncollectible accounts of $3,176 and$6,220 at September 30, 2005 and December 31, 2004, respectively.Estimates are used in determining the allowance for uncollectibleaccounts and are based on historical collection experience, currenttrends, credit policy, a percentage of accounts receivable by agingcategory and expectations of future bad debts based on currentcollection activities. In determining the allowance, the Companyconsiders historical write-offs of its receivables as well ashistorical changes in its credit policies. The Company also takes intoconsideration current trends in the credit quality of its customerbase.

Receivable from Sprint — Receivable fromSprint in the accompanying consolidated balance sheets consists of thefollowing:

|                             |  |                   |       |                   |  |        |       |        |  |  |
|-----------------------------|--|-------------------|-------|-------------------|--|--------|-------|--------|--|--|
|                        |  | Company           |       | OldAirGate        |
|                        |  | September 30,2005 |       | December 31, 2004 |
| Net roamingreceivable       |  | $                 | 2,261 |              |  | $      | 2,818 |   |
| Accruedservice revenue      |  |              | 2,483 |              |  |   | 2,038 |   |
| Otheramounts due fromSprint |  |              | 322   |              |  |   | 815   |   |
|                        |  | $                 | 5,066 |              |  | $      | 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. Thereceivable is recorded net due to a right of offset with respect to thereceivable from/payable to Sprint with respect to travel and the factthat the activity has historically been settled on a net basis bySprint. In addition, net roaming receivable also includes amounts duefrom Sprint, which have been collected from other PCS providers andwholesale customers for their customers' usage of theCompany's portion of the PCS network of 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 September 30,2005 and December 31, 2004 primarily consist of universal service fundrecoveries and interconnect revenue receivable.

|          |                        |
|----------|------------------------|
| 7.  | PROPERTY AND EQUIPMENT |

Property andequipment are stated net of accumulated depreciation and amortizationof $14.2 million and $192.8 million at September 30, 2005 and December31, 2004, respectively. In connection with the purchase priceallocation on February 15, 2005, as discussed in Note 4, property andequipment acquired was allocated approximately $77.1 million in fairvalue based on an independent appraisal of the assets.

|          |                              |
|----------|------------------------------|
| 8.  | ASSET RETIREMENT OBLIGATIONS |

For theCompany's leased telecommunications facilities, primarilyconsisting of cell sites and switch site operating leases and operatingleases for retail and office space, the Company has 

10

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

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 has estimated the costs by type of lease to be incurred uponthe termination of the lease for restoration costs, as adjusted forexpected inflation. These costs have been discounted back to theorigination 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 ratemethod. A corresponding asset is recorded at the inception of the leasein the same 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 threemonths ended September 30, 2005 and 2004, for the period fromacquisition to September 30, 2005, for the period from January 1, 2005to February 15, 2005 and for the nine months ended September 30,2004:

|                                             |  |                                        |         |                                        |  |                                                              |         |                                                    |  |                                        |         |        |  |        |         |        |  |        |         |        |  |  |
|---------------------------------------------|--|----------------------------------------|---------|----------------------------------------|--|--------------------------------------------------------------|---------|----------------------------------------------------|--|----------------------------------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                        |  | Company                                |         | OldAirGate                             |  | Company                                                      |         | OldAirGate                                         |
|                                        |  | ForthethreemonthsendedSeptember30,2005 |         | ForthethreemonthsendedSeptember30,2004 |  | For theperiod fromacquisition(see Note4)to September30, 2005 |         | For theperiodfromJanuary 1,2005 toFebruary15, 2005 |  | Forthe ninemonthsendedSeptember30,2004 |
|                                        |  |                                   |    |                                   |  |                                                         |    |                                               |  |                                   |    |   |  |   |    |   |  |   |    |   |
| Balanceat beginning ofperiod                |  | $                                      | 633     |                                   |  | $                                                            | 468     |                                               |  | $                                      | 575     |   |  | $      | 519     |   |  | $      | 416     |   |
| Initialobligation recorded during theperiod |  |                                   | 32      |                                   |  |                                                         | — |                                               |  |                                   | 60      |   |  |   | — |   |  |   | — |   |
| Obligationssettled during theperiod         |  |                                   | — |                                   |  |                                                         | — |                                               |  |                                   | — |   |  |   | — |   |  |   | — |   |
| Accretionof obligation during theperiod     |  |                                   | 15      |                                   |  |                                                         | 26      |                                               |  |                                   | 45      |   |  |   | 13      |   |  |   | 78      |   |
| Impactof revision inestimates               |  |                                   | — |                                   |  |                                                         | — |                                               |  |                                   | — |   |  |   | 43      |   |  |   | — |   |
| Balanceat end ofperiod                      |  | $                                      | 680     |                                   |  | $                                                            | 494     |                                               |  | $                                      | 680     |   |  | $      | 575     |   |  | $      | 494     |   |
|                                             |

|          |                               |
|----------|-------------------------------|
| 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 Companyallocated $215,000 of the purchase price to the value of the subscriberbase in place at Old AirGate at the time of acquisition and allocated$210,000 to the value of the Sprint agreements in place at Old AirGateat the time of acquisition. The values were based on an independentappraisal. The subscriber base intangible will be amortized over theestimated life of the subscribers acquired, or approximately 3 years,and the intangible associated with the Sprint agreements in place willbe amortized over the remaining original term of the Sprint agreementsassumed in the acquisition, or approximately 13 years.

11

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

The Company accounts for goodwill andintangible assets in accordance with the provisions of SFAS No. 142,"Goodwill and Other Intangible Assets." Theprovisions of SFAS No. 142 (i) prohibit the amortization of goodwilland indefinite-lived intangible assets, (ii) require that goodwill andindefinite-lived intangible assets be tested annually for impairment(and in interim periods if certain events occur indicating that thecarrying value may be impaired), and (iii) require that reporting unitsbe identified for the purpose of assessing potential future impairmentsof goodwill.

Goodwill and intangible assets consist of:

|                                        |  |                             |         |         |  |  |
|----------------------------------------|--|-----------------------------|---------|---------|--|--|
|                                   |  | Company**September30,2005** |
| Goodwill                               |  | $                           | 255,628 |    |
| Intangibleassets:                      |  |                        |    |    |
| Sprint affiliation and otheragreements |  | $                           | 210,000 |    |
| Accumulatedamortization                |  |                        | (9,782  | )  |
| Subtotal                               |  |                        | 200,218 |    |
| Subscriberbase acquired                |  |                        | 215,000 |    |
| Accumulatedamortization                |  |                        | (44,792 | )  |
| Subtotal                               |  |                        | 170,208 |    |
| Intangibleassets,net                   |  | $                           | 370,426 |    |
|                                        |

Amortizationexpense related to intangible assets was $21,829 for the three monthsended September 30, 2005 and $54,574 for the period from acquisition toSeptember 30, 2005.

Aggregate amortization expense relative tointangible assets for the periods shown is estimated to be asfollows:

|                        |  |        |         |        |  |  |
|------------------------|--|--------|---------|--------|--|--|
| Yearsended December31, |  |   |
| 2005                   |  | $      | 76,404  |   |
| 2006                   |  |   | 87,319  |   |
| 2007                   |  |   | 87,319  |   |
| 2008                   |  |   | 24,611  |   |
| 2009                   |  |   | 15,652  |   |
| Thereafter             |  |   | 133,695 |   |
|                   |  | $      | 425,000 |   |
|                        |

12

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

|           |               |
|-----------|---------------|
| 10.  | LONG-TERMDEBT |

Long-term debt consists of the following:

|                                                |  |                   |         |                  |  |        |         |        |  |  |
|------------------------------------------------|--|-------------------|---------|------------------|--|--------|---------|--------|--|--|
|                                           |  | Company           |         | OldAirGate       |
|                                           |  | September 30,2005 |         | December 31,2004 |
|                                           |  |              |    |             |  |   |    |   |
| 9 3/8%SeniorNotes                              |  | $                 | 167,062 |             |  | $      | 137,478 |   |
| FloatingRateNotes                              |  |              | 179,290 |             |  |   | 175,000 |   |
| **TotalDebt**                                  |  |              | 346,352 |             |  |   | 312,478 |   |
| Lesscurrentmaturities                          |  |              | — |             |  |   | — |   |
| **Longterm debt, excluding currentmaturities** |  | $                 | 346,352 |             |  | $      | 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 fairvalue of $168,676 in the purchase price allocation as discussed in Note4. The premium to face amount will be amortized over the remaining lifeof the notes as an adjustment to the effective interest rate.

Floating Rate Notes — The Floating Rate Notes wereoriginally issued in October 2004 by Old AirGate, have a face value of$175,000, mature October 15, 2011 and bear interest at LIBOR plus3.75%, payable quarterly on January 15, April 15, July 15 andOctober 15. The Floating Rate Notes are secured by a first prioritylien on the assets of AirGate. The Floating Rate Notes were recorded ata fair value of $179,715 in the purchase price allocation as discussedin Note 4. The premium to face amount will be amortized over theremaining life of the notes as an adjustment to the effective interestrate.

On January 11, 2005, Old AirGate began soliciting consentsfrom holders of the outstanding 9 3/8% SeniorNotes and Floating Rate Notes to amend certain provisions of indenturesgoverning the respective notes. On January 25, 2005, the expirationdate of the consent solicitation, Old AirGate received the necessaryconsents to amend the respective indentures and paid a consent fee of0.25% of the principal amount of the notes to thenoteholders.

|           |                     |
|-----------|---------------------|
| 11.  | STOCKHOLDERS'EQUITY |

As discussed in Note 4, the acquisition of Old AirGateby Alamosa Holdings was completed on February 15, 2005. Stockholders ofOld AirGate received approximately 26.1 million shares of AlamosaHoldings common stock and approximately $100 million in cashconsideration. As a result, Old AirGate stockholders' deficit of$124,358 was eliminated on February 15, 2005. In connection with thepurchase price allocation discussed in Note 4, the Company recordedcontributed capital consisting of $330,848 in value of Alamosa Holdingscommon stock issued, $100,001 cash consideration plus $6,143 in directtransaction costs incurred by Alamosa Holdings and $2,568 in value ofcommon stock purchase warrants assumed by Alamosa Holdings. The totalcontributed capital of $439,846 was reduced by $15,000 in cashdistributions from the Company to Alamosa Holdings.

Old AirGatehad three sets of common stock purchase warrants outstanding prior tothe acquisition by Alamosa Holdings. All of these warrants were assumedby Alamosa Holdings in the acquisition.

13

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

AirGate Warrants — TheAirGate Warrants were originally issued by Old AirGate in connectionwith an offering of Old AirGate notes in 1999. As of September 30,2005, 8,620 AirGate Warrants were outstanding. Each warrant entitlesthe holder to receive 0.9482 shares of Alamosa Holdings common stockand $3.64 in cash at an exercise price of $0.02 per share and expireson October 1, 2009. Due to the fact that these warrants requiresettlement with registered shares of Alamosa Holdings common stock,these warrants are reflected as a liability in the consolidated balancesheet of Alamosa Holdings at fair market value. Changes in fair marketvalue are reflected in earnings of Alamosa Holdings for the period. Thefair value of the AirGate Warrants at September 30, 2005 isapproximately $171.

iPCS Note Warrants — The iPCSNote Warrants were originally issued by iPCS, Inc.("iPCS") in 2000 and assumed by Old AirGateupon its acquisition of iPCS in 2001. As of September 30, 2005, 300,000iPCS Note Warrants were outstanding. Each warrant entitles the holderto receive 0.6996 shares of Alamosa Holdings common stock at anexercise price of $74.34 per share and expires on July 15, 2010. Due tothe fact that these warrants require settlement with registered sharesof Alamosa Holdings common stock, these warrants are reflected as aliability in the consolidated balance sheet of Alamosa Holdings at fairmarket value. Changes in fair market value are reflected in earnings ofAlamosa Holdings for the period. The fair value of the iPCS NoteWarrants at September 30, 2005 is approximately $1,583.

iPCSSprint Warrant — The iPCS Sprint Warrant was originallyissued by iPCS in 2000 and assumed by Old AirGate upon its acquisitionof iPCS in 2001. As of September 30, 2005, the iPCS Sprint Warrant topurchase 81,050 shares of Alamosa Holdings common stock at an exerciseprice of $66.52 per share was outstanding. This warrant expires on July15, 2007 and is not reflected as a liability in the consolidatedbalance sheet of Alamosa Holdings as it was included in the fair valueof equity issued in the transaction.

|           |              |
|-----------|--------------|
| 12.  | INCOME TAXES |

The Company'seffective income tax rate is based on statutory tax rates, tax planningopportunities, expected future taxable income and expected reversals oftaxable temporary differences. The forecasted annual rate is thenapplied to the 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 nine months ended September 30, 2004. Due to thedifference in basis for book and tax purposes after the purchase priceallocation as discussed in Note 4, the Company established a netdeferred tax liability of $27,700 in connection with the merger. Thereversal of the timing differences which give rise to this deferred taxliability will allow the Company to realize the benefit of certaindeferred tax assets such that the valuation allowance was reduced. Theeffective tax rate for the period from acquisition to September 30,2005 is 38.6 percent. The difference between the statutory rate of 35percent and the projected rate is primarily due to state incometaxes.

The company is included in the consolidated federal incometax return filed by Alamosa Holdings, Inc. As a result, income taxexpense and related income tax balances included in the accompanyingconsolidated financial statements have been calculated as if theCompany had operated as a separate entity.

14

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

|           |                  |
|-----------|------------------|
| 13.  | SPRINTAGREEMENTS |

In accordance with the Company's affiliationagreements with Sprint, Sprint provides the Company various servicesincluding billing, customer care, collections and inventory logistics.In addition, Sprint bills the Company for various pass-through itemssuch as commissions and rebates to national retail merchants, handsetsubsidies on handsets activated in the Company's territory butnot sold by the Company and long distance charges.

In 2004, OldAirGate executed amendments to its affiliation agreements with Sprint.The amendments, among other things, established fixed per subscribercosts for services that the Company purchases from Sprint throughDecember 31, 2006 in the form of two new fees. The amendments created anew combined service bureau fee, which consolidates numerous fees thatwere previously settled separately, for back office services such asbilling and customer care. The combined service bureau fee was set at$7.00 per average subscriber per month through December 31, 2006 andwill be recorded in cost of service and operations in the consolidatedstatement of operations. The amendments also created a newper-activation fee, which consolidates numerous fees that werepreviously settled separately, for marketing services, such assubscriber activation and handset logistics. The per-activation fee is$23.00 per activation and will be applied to the actual number of grosssubscriber 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:

|                              |  |                                        |        |                                        |  |                                                            |        |                                                  |  |                                       |         |        |  |        |        |        |  |        |         |        |  |  |
|------------------------------|--|----------------------------------------|--------|----------------------------------------|--|------------------------------------------------------------|--------|--------------------------------------------------|--|---------------------------------------|---------|--------|--|--------|--------|--------|--|--------|---------|--------|--|--|
|                         |  | Company                                |        | OldAirGate                             |  | Company                                                    |        | OldAirGate                                       |
|                         |  | ForthethreemonthsendedSeptember30,2005 |        | ForthethreemonthsendedSeptember30,2004 |  | For theperiodfromacquisition(see Note4)toSeptember30, 2005 |        | FortheperiodfromJanuary 1,2005 toFebruary15,2005 |  | FortheninemonthsendedSeptember30,2004 |
|                         |  |                                   |   |                                   |  |                                                       |   |                                             |  |                                  |    |   |  |   |   |   |  |   |    |   |
| Costof service andoperations |  | $                                      | 41,779 |                                   |  | $                                                          | 26,062 |                                             |  | $                                     | 97,370  |   |  | $      | 17,122 |   |  | $      | 82,474  |   |
| Costof productssold          |  |                                   | 8,073  |                                   |  |                                                       | 8,651  |                                             |  |                                  | 20,199  |   |  |   | 6,528  |   |  |   | 22,523  |   |
| Sellingandmarketing          |  |                                   | 5,813  |                                   |  |                                                       | 3,265  |                                             |  |                                  | 13,366  |   |  |   | 3,269  |   |  |   | 8,644   |   |
| Total                        |  | $                                      | 55,665 |                                   |  | $                                                          | 37,978 |                                             |  | $                                     | 130,935 |   |  | $      | 26,919 |   |  | $      | 113,641 |   |
|                              |

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 

15

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

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 ("Sprint") andNextel Communications, Inc. ("Nextel")announced a proposed merger of their two companies. Nextel operated awireless mobility communications network in certain territories inwhich the Company also provides digital wireless mobilitycommunications network services under the Sprint or affiliated brands.Sprint and Nextel closed the merger on August 12, 2005.

Basedupon the terms of the exclusivity covenants contained in the managementagreement between Sprint and AirGate PCS, Inc., the Company believesthat Nextel's operation of a wireless mobility communicationsnetwork in territories in which AirGate operates from and after theclosing of the Sprint-Nextel merger constitutes a breach of theexclusivity covenants in the AirGate management agreement with Sprint.Moreover, based upon public statements and disclosures made by Sprintand Nextel, Alamosa Holdings believes that actions that Sprint andNextel may take in connection with the integration of their operationsfollowing completion of the merger may constitute a breach of theexclusivity and certain other provisions of the management agreementsbetween Sprint and Alamosa Holdings' other operatingsubsidiaries.

As previously disclosed, Alamosa Holdings has beenengaged in discussions with Sprint in an attempt to reach a mutuallyacceptable resolution of the issues related to the Sprint-Nextel mergerand its effect on the existing management agreements between Sprint andAlamosa Holdings' subsidiaries. On August 8, 2005, AirGate fileda lawsuit against Sprint, certain of its affiliates and Nextel in theDelaware Court of Chancery alleging, among other things, that followingthe completion of the merger, Sprint would be in breach of theexclusivity covenants contained in its management agreement withAirGate and that Nextel unlawfully interfered with AirGate'sexclusive rights under such agreement. The complaint seeks, among otherthings, an order directing Sprint and its affiliates to specificallyperform their contractual obligations under their agreements withAirGate, an injunction preventing Sprint and Nextel from taking anyaction or entering into any agreement that would violate theexclusivity covenants contained in the agreements, a declaratoryjudgment declaring the rights, remedies and obligations of the partiesunder the agreements, and damages. Alamosa Holdings' otheroperating subsidiaries also may decide to pursue remedies againstSprint and Nextel, including bringing a lawsuit against Sprint andNextel.

Under the Company's affiliation agreements withSprint, an event of termination can be declared by the Company after amaterial breach by Sprint is not cured within the applicable graceperiod, which, without extension by the Company, could be as much as180 days. If the Company has the right to terminate its managementagreements because of an event of termination caused by Sprint,generally the Company may (i) require Sprint to purchase all of itsoperating assets used in connection with its portion of the PCS networkof Sprint, (ii) in all areas in the Company's territory whereSprint is the licensee for 20 MHz or more of the spectrum on the dateit terminates our management agreements, require Sprint to assign tothe Company, subject to governmental approval, up to 10 MHz of licensedspectrum or (iii) choose not to terminate its management agreements andsue Sprint for damages or other relief or submit the matter toarbitration.

Should the breach not be cured by Sprint or amodification, waiver or extension not be granted by the Company, theelection by the Company to terminate the affiliation agreements wouldconstitute an event of default under each series of the Company'soutstanding senior notes. Upon an event of default, the holders of thesenior notes would have the right to demand 

16

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

payment and the Company may not haveadequate liquidity to satisfy this obligation. At this point in time,management of the Company does not anticipate that an event oftermination of the affiliation agreements will occur.

|           |                               |
|-----------|-------------------------------|
| 14.  | COMMITMENTS AND CONTINGENCIES |

Litigation — In May 2002, putative class actioncomplaints were filed in the United States District Court for theNorthern District of Georgia against (a) AirGate PCS, Inc., Thomas M.Dougherty, Barbara L. Blackford, and Alan B. Catherall (the"AirGate Defendants"), and (b) Credit SuisseFirst Boston, Lehman Brothers, UBS Warburg LLC, William Blair &Company, Thomas Wiesel Partners LLC and TD Securities (the"Underwriter Defendants").  Thecomplaints alleged that the prospectus used in connection with thesecondary offering of AirGate stock by certain former stockholders ofiPCS, a former subsidiary of AirGate, on December 18, 2001 containedmaterially false and misleading statements and omitted materialinformation necessary to make the statements in the prospectus notfalse and misleading. After initially denying motions for appointmentof lead plaintiffs and lead plaintiffs' counsel, the Courtgranted a modified renewed motion for appointment of lead plaintiffsand lead plaintiffs' counsel on August 17, 2004.  Pursuantto a consent scheduling order, lead plaintiffs filed a consolidatedamended class action complaint on October 15, 2004, naming the samedefendants (the "ConsolidatedComplaint").

The Consolidated Complaint assertedclaims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933based on a number of purported false or misleading statements in theprospectus. Plaintiffs' claims are premised on allegations, amongothers, that (i) AirGate's business plan was not"fully funded," contrary to what was assertedin the prospectus; (ii) disclosures in the prospectus regarding thechurn rate experienced by AirGate were untrue and/or misleading; (iii)AirGate did not have strong future revenue and profit growth prospectsbased on its rapid customer growth, contrary to what was allegedlyasserted in the prospectus; (iv) AirGate's allowance for doubtfulaccounts was understated in its fiscal 2001 financial statements, andhence AirGate understated its net losses for 2001 and the prospectusincorrectly stated that AirGate's financial statements compliedwith generally accepted accounting principles; (v) iPCS's networkbuild-out was not nearly complete, contrary to what was allegedlyasserted in the prospectus; and (vi) the iPCS merger did notsignificantly enhance shareholder value, contrary to alleged assertionsin the prospectus.

On December 30, 2004, the AirGate Defendantsand the Underwriter Defendants filed motions to dismiss theConsolidated Complaint. On September 30, 2005, the Court issued anopinion and order (the "Order") ruling onthese motions. As to the AirGate Defendants, the Court (a) dismissedplaintiffs' claims under Section 12(a)(2) of the Securities Act,and (b) also dismissed the remaining Section 11 and Section 15 claimsas to five of the six alleged misstatements pled in the ConsolidatedComplaint, while declining to dismiss the claims related to allegation(v) above, concerning the iPCS network build-out. As to the UnderwriterDefendants, the Court granted the motion to dismiss in its entirety.The Order permitted plaintiffs to file a further amended complaint,which plaintiffs did on October 19, 2005 (the "SecondAmended Complaint"). The Second Amended Complaint repeatsthe allegations of the Consolidated Complaint, and adds certainadditional allegations regarding the Underwriter Defendants andregarding plaintiffs' "allowance for doubtfulaccounts" claim. Defendants' responses to the SecondAmended Complaint have not yet been filed.

The Company believesthat AirGate and the other defendants have meritorious defenses to theclaims that remain at issue in the litigation, and the Company intendsto defend the action vigorously. However, the ultimate outcome of thelitigation is not currently predictable, there can 

17

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

be no assurance that the litigation will beresolved in our favor, and an adverse outcome could adversely affectour financial condition. We maintain insurance coverage which couldmitigate our exposure to loss in the event of an adverse outcome.

On February 23, 2003, iPCS and its two subsidiaries, iPCS Wireless,Inc. and iPCS Equipment, Inc. (the "Debtors")filed voluntary 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.

OnAugust 8, 2005, AirGate PCS, Inc. ("AirGate")filed suit in the Delaware Court of Chancery against SprintCorporation, Sprint Spectrum L.P., Sprint Communications Company L.P.,Sprintcom, Inc., and S-N Merger Corp. (collectively"Sprint"), and Nextel Communications, Inc.("Nextel"). AirGate's lawsuit alleges,among other things, that Sprint breached the terms of its ManagementAgreement with AirGate by merging with Nextel, which resulted in Sprintowning, managing, and operating a competing wireless mobilitycommunications network in AirGate's exclusive service area. Thesuit also alleges that (i) Sprint has access to competitive businessinformation of AirGate and that the use of that information in theoperation of the competing Nextel network following the merger wouldcause irreparable harm to AirGate, (ii) the post-merger distributionand sale by Sprint Nextel of Sprint PCS wireless products and servicesin AirGate's exclusive service area will violate the exclusivityprovisions of AirGate's Management Agreement with Sprint, and(iii) Nextel unlawfully interfered with AirGate's rights underthe Management Agreement. AirGate also alleges in the lawsuit thatbreaches by Sprint of the Management Agreement will cause AirGate tosuffer irreparable harm for which specific performance is the onlyappropriate remedy. AirGate's lawsuit seeks, among other things,an injunction prohibiting the defendants from violating AirGate'sexclusivity rights under the Management Agreement, including an orderrequiring Sprint Nextel to divest itself of the newly-acquired Nextelassets within AirGate's exclusive service area or otherwise toconduct its business in AirGate's exclusive service area in amanner consistent with AirGate's exclusivity rights under itsManagement Agreement with Sprint. The case is currently set for trialin February 2006.

|           |                                |
|-----------|--------------------------------|
| 15.  | PRO FORMA FINANCIALINFORMATION |

The unaudited pro forma condensed consolidatedstatements of operations for the nine months ended September 30, 2005and for the three and nine months ended September 30, 2004

18

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

set forth below present the results ofoperations as if the acquisition of Old AirGate by Alamosa Holdings hadoccurred at the beginning of each period and are not necessarilyindicative of future results or actual results that would have beenachieved had this acquisition occurred as of the beginning of theperiod.

|                              |  |                                           |         |                                            |  |                                          |         |         |  |        |         |         |  |  |
|------------------------------|--|-------------------------------------------|---------|--------------------------------------------|--|------------------------------------------|---------|---------|--|--------|---------|---------|--|--|
|                         |  | Forthe ninemonths endedSeptember 30, 2005 |         | For thethreemonths endedSeptember 30, 2004 |  | For theninemonths endedSeptember 30,2004 |
|                         |  |                                      |         |                                       |  |                                     |
| Totalrevenues                |  | $                                         | 298,873 |                                       |  | $                                        | 91,094  |    |  | $      | 255,168 |    |
| Lossbefore income taxbenefit |  | $                                         | (41,303 | )                                     |  | $                                        | (2,714  | )  |  | $      | (31,227 | )  |
| Incometaxbenefit             |  |                                      | 15,945  |                                       |  |                                     | — |    |  |   | — |    |
| Netloss                      |  | $                                         | (25,358 | )                                     |  | $                                        | (2,714  | )  |  | $      | (31,227 | )  |
|                              |

|           |                                                     |
|-----------|-----------------------------------------------------|
| 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.

In June 2005,the FASB issued SFAS No. 154, "Accounting Changes andError Corrections a replacement of APB Opinion No. 20 and FASBStatement No. 3." This Statement changes the requirementsfor the accounting for and reporting of a change in accountingprinciple. This Statement applies to voluntary changes as well as thosechanges required by an accounting pronouncement if that pronouncementdoes not include specific transition provisions. This Statementrequires retrospective application to prior periods' financialstatements of changes in accounting principle as opposed to being shownas a cumulative adjustment in the period of change. The Statement iseffective for all changes and corrections of errors made in fiscalyears beginning after December 15, 2005. The adoption of this standardis not expected to materially impact the Company.

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 

19

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

years ending after December 15, 2005. TheCompany is currently assessing the impact of adopting FIN 47 to itsconsolidated results of operations.

|           |                                             |
|-----------|---------------------------------------------|
| 17.  | CONDENSED CONSOLIDATING FINANCIALSTATEMENTS |

Set forth below are consolidating financialstatements of the Company and guarantor subsidiaries as of September30, 2005 and December 31, 2004, for the three months ended September30, 2005 and 2004, for the period from acquisition to September 30,2005, for the period from January 1, 2005 to February 15, 2005 and forthe nine months ended September 30, 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.

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 interests 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 (see Note 10). Service Cowas formed to provide management services to Old AirGate and iPCS. Atthe time of the acquisition of Old AirGate by Alamosa Holdings onFebruary 15, 2005, Service Co had no assets or liabilities.

20

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

CONDENSED CONSOLIDATING BALANCESHEET AS OF SEPTEMBER 30, 2005

|                                          |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |        |  |  |
|------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                     |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Cashand cashequivalents                  |  | $      | 17,372  |                  |  | $            | — |         |  | $      | — |   |  | $      | 17,372  |   |
| Shortterminvestments                     |  |   | 35,520  |                  |  |         | — |         |  |   | — |   |  |   | 35,520  |   |
| Othercurrentassets                       |  |   | 49,737  |                  |  |         | — |         |  |   | — |   |  |   | 49,737  |   |
| Totalcurrentassets                       |  |   | 102,629 |                  |  |         | — |         |  |   | — |   |  |   | 102,629 |   |
|                                     |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |   |
| Propertyand equipment,net                |  |   | 101,426 |                  |  |         | — |         |  |   | — |   |  |   | 101,426 |   |
| Othernoncurrentassets                    |  |   | 627,682 |                  |  |         | — |         |  |   | — |   |  |   | 627,682 |   |
| Totalassets                              |  | $      | 831,737 |                  |  | $            | — |         |  | $      | — |   |  | $      | 831,737 |   |
|                                     |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |   |
| Currentliabilities                       |  | $      | 50,390  |                  |  | $            | — |         |  | $      | — |   |  | $      | 50,390  |   |
| Long-termdebt                            |  |   | 346,352 |                  |  |         | — |         |  |   | — |   |  |   | 346,352 |   |
| Otherlong-termliabilities                |  |   | 29,058  |                  |  |         | — |         |  |   | — |   |  |   | 29,058  |   |
| Investmentinsubsidiaries                 |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |   |
| Totalliabilities                         |  |   | 425,800 |                  |  |         | — |         |  |   | — |   |  |   | 425,800 |   |
|                                     |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |   |
| Stockholders'equity                      |  |   | 405,937 |                  |  |         | — |         |  |   | — |   |  |   | 405,937 |   |
| Totalliabilities and stockholders'equity |  | $      | 831,737 |                  |  | $            | — |         |  | $      | — |   |  | $      | 831,737 |   |
|                                          |

CONDENSEDCONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2004

|                                           |  |        |          |                       |  |              |          |              |  |        |          |         |  |        |         |         |  |  |
|-------------------------------------------|--|--------|----------|-----------------------|--|--------------|----------|--------------|--|--------|----------|---------|--|--------|---------|---------|--|--|
|                                      |  | Issuer |          | GuarantorSubsidiaries |  | Eliminations |          | Consolidated |
| Cashand cashequivalents                   |  | $      | 15,927   |                  |  | $            | (10      | )       |  | $      | —  |    |  | $      | 15,917  |    |
| Shortterminvestments                      |  |   | 94,059   |                  |  |         | —  |         |  |   | —  |    |  |   | 94,059  |    |
| Othercurrentassets                        |  |   | 96,596   |                  |  |         | 529      |         |  |   | (61,943  | )  |  |   | 35,182  |    |
| Totalcurrentassets                        |  |   | 206,582  |                  |  |         | 519      |         |  |   | (61,943  | )  |  |   | 145,158 |    |
|                                      |  |   |     |                  |  |         |     |         |  |   |     |    |  |   |    |    |
| Propertyand equipment,net                 |  |   | 105,522  |                  |  |         | 25,287   |         |  |   | —  |    |  |   | 130,809 |    |
| Othernoncurrentassets                     |  |   | 7,266    |                  |  |         | —  |         |  |   | —  |    |  |   | 7,266   |    |
| Totalassets                               |  | $      | 319,370  |                  |  | $            | 25,806   |         |  | $      | (61,943  | )  |  | $      | 283,233 |    |
|                                      |  |   |     |                  |  |         |     |         |  |   |     |    |  |   |    |    |
| Currentliabilities                        |  | $      | 62,352   |                  |  | $            | 61,414   |         |  | $      | (61,943  | )  |  | $      | 61,823  |    |
| Intercompany                              |  |   | (134,537 | )                |  |         | 134,537  |         |  |   | —  |    |  |   | — |    |
| Long-termdebt                             |  |   | 312,478  |                  |  |         | —  |         |  |   | —  |    |  |   | 312,478 |    |
| Otherlong-termliabilities                 |  |   | 3,363    |                  |  |         | —  |         |  |   | —  |    |  |   | 3,363   |    |
| Investmentinsubsidiaries                  |  |   | 170,145  |                  |  |         | —  |         |  |   | (170,145 | )  |  |   | — |    |
| Totalliabilities                          |  |   | 413,801  |                  |  |         | 195,951  |         |  |   | (232,088 | )  |  |   | 377,664 |    |
|                                      |  |   |     |                  |  |         |     |         |  |   |     |    |  |   |    |    |
| Stockholders'deficit                      |  |   | (94,431  | )                |  |         | (170,145 | )       |  |   | 170,145  |    |  |   | (94,431 | )  |
| Totalliabilities and stockholders'deficit |  | $      | 319,370  |                  |  | $            | 25,806   |         |  | $      | (61,943  | )  |  | $      | 283,233 |    |
|                                           |

21

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

CONDENSED CONSOLIDATING STATEMENT OFOPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005

|                                   |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|-----------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                              |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
|                              |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Revenue                           |  | $      | 103,691 |                  |  | $            | — |         |  | $      | — |   |  | $      | 103,691 |    |
| Costofrevenue                     |  |   | 63,638  |                  |  |         | — |         |  |   | — |   |  |   | 63,638  |    |
| Sellingandmarketing               |  |   | 13,737  |                  |  |         | — |         |  |   | — |   |  |   | 13,737  |    |
| Generaland administrativeexpenses |  |   | 4,566   |                  |  |         | — |         |  |   | — |   |  |   | 4,566   |    |
| Depreciationandamortization       |  |   | 26,608  |                  |  |         | — |         |  |   | — |   |  |   | 26,608  |    |
| Losson disposal ofassets          |  |   | 120     |                  |  |         | — |         |  |   | — |   |  |   | 120     |    |
| Lossfromoperations                |  |   | (4,978  | )                |  |         | — |         |  |   | — |   |  |   | (4,978  | )  |
| Equityin loss ofsubsidiaries      |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Interestand otherincome           |  |   | 694     |                  |  |         | — |         |  |   | — |   |  |   | 694     |    |
| Interestexpense                   |  |   | (6,275  | )                |  |         | — |         |  |   | — |   |  |   | (6,275  | )  |
| Lossbefore income taxbenefit      |  |   | (10,559 | )                |  |         | — |         |  |   | — |   |  |   | (10,559 | )  |
| Incometaxbenefit                  |  |   | 4,099   |                  |  |         | — |         |  |   | — |   |  |   | 4,099   |    |
| Netloss                           |  | $      | (6,460  | )                |  | $            | — |         |  | $      | — |   |  | $      | (6,460  | )  |
|                                   |

CONDENSEDCONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDEDSEPTEMBER 30, 2004

|                                          |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                     |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Revenue                                  |  | $      | 91,531  |                  |  | $            | — |         |  | $      | — |   |  | $      | 91,531  |    |
| Costofrevenue                            |  |   | 39,905  |                  |  |         | 4,997   |         |  |   | — |   |  |   | 44,902  |    |
| Sellingandmarketing                      |  |   | 13,278  |                  |  |         | 650     |         |  |   | — |   |  |   | 13,928  |    |
| Generaland administrativeexpenses        |  |   | 4,500   |                  |  |         | 124     |         |  |   | — |   |  |   | 4,624   |    |
| Depreciationandamortization              |  |   | 9,726   |                  |  |         | 2,429   |         |  |   | — |   |  |   | 12,155  |    |
| Gainon disposal of property andequipment |  |   | 55      |                  |  |         | — |         |  |   | — |   |  |   | 55      |    |
| Incomefromoperations                     |  |   | 24,067  |                  |  |         | (8,200  | )       |  |   | — |   |  |   | 15,867  |    |
| Equityin loss ofsubsidiaries             |  |   | (8,237  | )                |  |         | — |         |  |   | 8,237   |   |  |   | — |    |
| Interestand otherincome                  |  |   | 237     |                  |  |         | — |         |  |   | — |   |  |   | 237     |    |
| Interestexpense                          |  |   | (7,391  | )                |  |         | (37     | )       |  |   | — |   |  |   | (7,428  | )  |
| Incomebefore incometaxes                 |  |   | 8,676   |                  |  |         | (8,237  | )       |  |   | 8,237   |   |  |   | 8,676   |    |
| Incometaxes                              |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Netincome                                |  | $      | 8,676   |                  |  | $            | (8,237  | )       |  | $      | 8,237   |   |  | $      | 8,676   |    |
|                                          |

22

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

CONDENSED CONSOLIDATING STATEMENT OFOPERATIONS FOR THE PERIOD FROM ACQUISITION TO SEPTEMBER 30,2005

|                                   |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|-----------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                              |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
|                              |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Revenue                           |  | $      | 250,030 |                  |  | $            | — |         |  | $      | — |   |  | $      | 250,030 |    |
| Costofrevenue                     |  |   | 150,204 |                  |  |         | — |         |  |   | — |   |  |   | 150,204 |    |
| Sellingandmarketing               |  |   | 34,887  |                  |  |         | — |         |  |   | — |   |  |   | 34,887  |    |
| Generaland administrativeexpenses |  |   | 13,388  |                  |  |         | — |         |  |   | — |   |  |   | 13,388  |    |
| Mergerrelatedexpenses             |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Depreciationandamortization       |  |   | 68,711  |                  |  |         | — |         |  |   | — |   |  |   | 68,711  |    |
| Losson disposal ofassets          |  |   | 120     |                  |  |         | — |         |  |   | — |   |  |   | 120     |    |
| Lossfromoperations                |  |   | (17,280 | )                |  |         | — |         |  |   | — |   |  |   | (17,280 | )  |
| Interestand otherincome           |  |   | 1,719   |                  |  |         | — |         |  |   | — |   |  |   | 1,719   |    |
| Interestexpense                   |  |   | (14,772 | )                |  |         | — |         |  |   | — |   |  |   | (14,772 | )  |
| Lossbefore income taxbenefit      |  |   | (30,333 | )                |  |         | — |         |  |   | — |   |  |   | (30,333 | )  |
| Incometaxbenefit                  |  |   | 11,710  |                  |  |         | — |         |  |   | — |   |  |   | 11,710  |    |
| Netloss                           |  | $      | (18,623 | )                |  | $            | — |         |  | $      | — |   |  | $      | (18,623 | )  |
|                                   |

CONDENSEDCONSOLIDATING STATEMENT OF OPERATIONS FOR THE PERIOD FROM JANUARY1, 2005 TO FEBRUARY 15,2005

|                                          |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                     |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
|                                     |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Revenue                                  |  | $      | 48,843  |                  |  | $            | — |         |  | $      | — |   |  | $      | 48,843  |    |
| Costofrevenue                            |  |   | 27,968  |                  |  |         | 2,342   |         |  |   | — |   |  |   | 30,310  |    |
| Sellingandmarketing                      |  |   | 9,068   |                  |  |         | 193     |         |  |   | — |   |  |   | 9,261   |    |
| Generaland administrativeexpenses        |  |   | 2,810   |                  |  |         | 75      |         |  |   | — |   |  |   | 2,885   |    |
| Mergerrelatedexpenses                    |  |   | 23,803  |                  |  |         | — |         |  |   | — |   |  |   | 23,803  |    |
| Depreciationandamortization              |  |   | 6,709   |                  |  |         | 1,205   |         |  |   | — |   |  |   | 7,914   |    |
| Losson disposal of property andequipment |  |   | 20      |                  |  |         | — |         |  |   | — |   |  |   | 20      |    |
| Lossfromoperations                       |  |   | (21,535 | )                |  |         | (3,815  | )       |  |   |    |   |  |   | (25,350 | )  |
| Equityin earnings ofsubsidiaries         |  |   | (3,815  | )                |  |         | — |         |  |   | 3,815   |   |  |   | — |    |
| Interestand otherincome                  |  |   | 346     |                  |  |         | — |         |  |   | — |   |  |   | 346     |    |
| Interestexpense                          |  |   | (4,111  | )                |  |         | — |         |  |   | — |   |  |   | (4,111  | )  |
| Incomebefore incometaxes                 |  |   | (29,115 | )                |  |         | (3,815  | )       |  |   | 3,815   |   |  |   | (29,115 | )  |
| Incometaxes                              |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Netloss                                  |  | $      | (29,115 | )                |  | $            | (3,815  | )       |  | $      | 3,815   |   |  | $      | (29,115 | )  |
|                                          |

23

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

CONDENSED CONSOLIDATING STATEMENT OFOPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004

|                                          |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                     |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
|                                     |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Revenue                                  |  | $      | 255,605 |                  |  | $            | — |         |  | $      | — |   |  | $      | 255,605 |    |
| Costofrevenue                            |  |   | 127,972 |                  |  |         | 13,516  |         |  |   | — |   |  |   | 141,488 |    |
| Sellingandmarketing                      |  |   | 35,002  |                  |  |         | 1,732   |         |  |   | — |   |  |   | 36,734  |    |
| Generaland administrativeexpenses        |  |   | 15,512  |                  |  |         | 405     |         |  |   | — |   |  |   | 15,917  |    |
| Depreciationandamortization              |  |   | 28,869  |                  |  |         | 7,193   |         |  |   | — |   |  |   | 36,062  |    |
| Gainon disposal of property andequipment |  |   | 50      |                  |  |         | — |         |  |   | — |   |  |   | 50      |    |
| Incomefromoperations                     |  |   | 48,200  |                  |  |         | (22,846 | )       |  |   | — |   |  |   | 25,354  |    |
| Equityin loss ofsubsidiaries             |  |   | (22,801 | )                |  |         | — |         |  |   | 22,801  |   |  |   | — |    |
| Interestand otherincome                  |  |   | 590     |                  |  |         | — |         |  |   | — |   |  |   | 590     |    |
| Interestexpense                          |  |   | (25,014 | )                |  |         | 45      |         |  |   | — |   |  |   | (24,969 | )  |
| Incomebefore incometaxes                 |  |   | 975     |                  |  |         | (22,801 | )       |  |   | 22,801  |   |  |   | 975     |    |
| Incometaxes                              |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Netincome                                |  | $      | 975     |                  |  | $            | (22,801 | )       |  | $      | 22,801  |   |  | $      | 975     |    |
|                                          |

CONSOLIDATINGSTATEMENT OF CASH FLOWS FOR THE PERIOD FROM ACQUISITION TOSEPTEMBER 30,2005

|                                                |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                           |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
|                                           |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Operatingactivities,net                        |  | $      | 23,182  |                  |  | $            | — |         |  | $      | — |   |  | $      | 23,182  |    |
| Investingactivities,net                        |  |   | 9,190   |                  |  |         | — |         |  |   | — |   |  |   | 9,190   |    |
| Financingactivities,net                        |  |   | (15,000 | )                |  |         | — |         |  |   | — |   |  |   | (15,000 | )  |
| Netincrease in cash and cashequivalents        |  |   | 17,372  |                  |  |         | — |         |  |   | — |   |  |   | 17,372  |    |
| Cashand cash equivalents at beginning ofperiod |  |   | — |                  |  |         | — |         |  |   | — |   |  |   | — |    |
| Cashand cash equivalents at end ofperiod       |  | $      | 17,372  |                  |  | $            | — |         |  | $      | — |   |  | $      | 17,372  |    |
|                                                |

24

----

AIRGATEPCS, INC.NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTS  (CONTINUED) (UNAUDITED)(dollars in thousands,except asnoted)

CONSOLIDATING STATEMENT OF CASHFLOWS FOR THE PERIOD FROM JANUARY 1, 2005 TO FEBRUARY 15,2005

|                                                |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                           |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
|                                           |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Operatingactivities,net                        |  | $      | (18,630 | )                |  | $            | 12      |         |  | $      | — |   |  | $      | (18,618 | )  |
| Investingactivities,net                        |  |   | 40,824  |                  |  |         | — |         |  |   | — |   |  |   | 40,824  |    |
| Financingactivities,net                        |  |   | (1,617  | )                |  |         | — |         |  |   | — |   |  |   | (1,617  | )  |
| Netincrease in cash and cashequivalents        |  |   | 20,577  |                  |  |         | 12      |         |  |   | — |   |  |   | 20,589  |    |
| Cashand cash equivalents at beginning ofperiod |  |   | 15,929  |                  |  |         | (12     | )       |  |   | — |   |  |   | 15,917  |    |
| Cashand cash equivalents at end ofperiod       |  | $      | 36,506  |                  |  | $            | — |         |  | $      | — |   |  | $      | 36,506  |    |
|                                                |

CONSOLIDATINGSTATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,2004

|                                                |  |        |         |                       |  |              |         |              |  |        |         |        |  |        |         |         |  |  |
|------------------------------------------------|--|--------|---------|-----------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                           |  | Issuer |         | GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
|                                           |  |   |    |                  |  |         |    |         |  |   |    |   |  |   |    |    |
| Operatingactivities,net                        |  | $      | 46,136  |                  |  | $            | 198     |         |  | $      | — |   |  | $      | 46,334  |    |
| Investingactivities,net                        |  |   | (67,283 | )                |  |         | (201    | )       |  |   | — |   |  |   | (67,484 | )  |
| Financingactivities,net                        |  |   | (25,440 | )                |  |         | — |         |  |   | — |   |  |   | (25,440 | )  |
| Netdecrease in cash and cashequivalents        |  |   | (46,587 | )                |  |         | (3      | )       |  |   | — |   |  |   | (46,590 | )  |
| Cashand cash equivalents at beginning ofperiod |  |   | 60,043  |                  |  |         | — |         |  |   | — |   |  |   | 60,043  |    |
| Cashand cash equivalents at end ofperiod       |  | $      | 13,456  |                  |  | $            | (3      | )       |  | $      | — |   |  | $      | 13,453  |    |
|                                                |

25

----

|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| 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. |

26

----

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 September 30, 2005, we had total licensed POPs of over7.4 million, covered POPs of approximately 6.4 million and totalsubscribers of approximately 437,000.

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 

27

----

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 termdebt assumed and (iv) deferred income tax assets and liabilitiesattributable to the assets and liabilities acquired. The operations ofthe acquired company are included in the consolidated results ofoperations of Alamosa Holdings, from the date of acquisition.

Allowance for doubtful accounts — Estimates are usedin determining our allowance for doubtful accounts and are based on ourhistorical collection experience, current trends, credit policy, apercentage of our accounts receivable by aging category andexpectations of future bad debts based on current collectionactivities. In determining the allowance, we consider historicalwrite-offs of our receivables as well as historical changes in ourcredit policies. We also look at current trends in the credit qualityof our customer base.

Revenue recognition — Werecord equipment revenue for the sale of handsets and accessories tocustomers in our retail stores and to local resellers in ourterritories. We do not record equipment revenue on handsets andaccessories purchased by our customers from national resellers ordirectly from Sprint. Our customers pay an activation fee when theyinitiate service. We allocate amounts charged to customers at the pointof sale between the sale of handsets and other equipment and the saleof wireless telecommunications services in those transactions takingplace in distribution channels that we directly control. Activationfees charged in transactions outside of our directly controlleddistribution channels continue to be deferred and amortized over theaverage life of the subscriber base.

We recognize revenue fromour customers as they use the service. Additionally, we provide areduction of recorded revenue for billing adjustments and billingcorrections.

The cost of handsets sold generally exceeds theretail sales price, as it is common in our industry to subsidize theprice of handsets for competitive reasons. For handsets sold throughchannels controlled by Sprint that are activated by a subscriber in ourterritory, we reimburse Sprint for the 

28

----

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 atSeptember 30, 2005. Changes in technology or in our intended use ofthese assets may cause the estimated period of use or the value ofthese assets to change. In addition, changes in general industryconditions could cause the value of certain of these assets to change.We monitor the appropriateness of the estimated useful lives of theseassets. Whenever events or changes in circumstances indicate that thecarrying amounts 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 

29

----

Sprint. We obtain assurance as to theaccuracy of this data through analytic review and reliance on theservice auditor report on Sprint's internal control processesprepared by Sprint's external service auditor. Inaccurate orincomplete data from Sprint could have a material adverse effect on ourresults of operations and cash flow.

Consolidated Results ofOperations (dollars in thousands)

The discussion of the resultsof operations below is significantly affected by the acquisition of OldAirGate by Alamosa Holdings on February 15, 2005 and the resultingallocation of purchase price to the assets and liabilities of theCompany. The results of operations for the three months ended September30, 2005 are not comparable with the results of operations for thethree months ended September 30, 2004 and the results of operationsfrom acquisition through September 30, 2005 are not comparable with theresults of operations for the period from January 1, 2005 to February15, 2005 nor with the results of operations for the nine months endedSeptember 30, 2004 as Old AirGate periods are pre-acquisition resultsand do not include the impact of the purchase price allocationresulting from the acquisition of Old AirGate by Alamosa Holdings.

For the three month period ended September 30, 2005and the combined period from acquisition through September 30, 2005 andthe period from January 1, 2005 to February 15, 2005, compared to thethree and nine month periods ended September 30, 2004

Subscriber growth and key performance indicators — Wehad total subscribers of approximately 437,000 at September 30, 2005compared to approximately 385,000 at September 30, 2004. This growth ofapproximately 52,000 subscribers represents 13 percent year over yearcompared to 7 percent growth from September 30, 2003 to September 30,2004. The increase in growth is primarily attributable to an increasein our distribution channels, primarily in our own Sprint retail storesand branded dealers in our territory as well as overall growth in thewireless telecommunications industry.

Average monthly churn forthe quarter ended September 30, 2005 was approximately 2.9 percentcompared to approximately 2.8 percent for the quarter ended September30, 2004. We incur significant up front costs in acquiring customerssuch that if churn were to increase, it could negatively impact ouroperations.

Service revenues — Service revenuesconsist of revenues from our subscribers and roaming and wholesalerevenue earned when subscribers from other carriers or resellers of PCSservice use our portion of the PCS network of Sprint.

Subscriberrevenue consists of payments received from our subscribers for monthlyservice under their service plans. Subscriber revenue also includesamortization of deferred activation fees and charges for the use ofvarious features including PCS Vision, the wireless web and voiceactivated dialing. Subscriber revenues were $72,624 for the quarterended September 30, 2005 compared to $65,622 for the quarter endedSeptember 30, 2004. This increase of 11 percent was primarily due tothe increase in our subscriber base discussed above. Subscriberrevenues were $181,394 for the period from acquisition to September 30,2005 and $34,680 for the period from January 1, 2005 to February15, 2005. This combined subscriber revenue of $216,074 wasapproximately 12 percent higher than $192,315 for the nine months endedSeptember 30, 2004. This increase was primarily due to the increase inour subscriber base discussed above. Base ARPU (which does not includeroaming revenue) in the quarter ended September 30, 2005 was $56, whichwas consistent with the quarter ended September 30, 2004. Base ARPU forthe period from acquisition to September 30, 2005 was $57, which wasapproximately the same as base ARPU of $56 in the first nine months of2004.

Roaming and wholesale revenue is comprised of revenue fromSprint and other PCS subscribers based outside of our territory whoroam onto our portion of the PCS network of Sprint as well as revenuefrom resellers of PCS service whose subscribers use our portion of thePCS network of Sprint.

Roaming and wholesale revenue was $27,729for the quarter ended September 30, 2005, which was 24 percent higherthan $22,338 for the quarter ended September 31, 2004. Roaming andwholesale revenue was $60,645 for the period from acquisition toSeptember 30, 2005 and $10,972 for the period 

30

----

from January 1, 2005 to February 15, 2005.This combined roaming and wholesale revenue of $71,617 wasapproximately 35 percent higher than $53,225 for the nine months endedSeptember 30, 2004. The increase in both the quarter and nine monthsended September 30, 2005 was due to a combination of an increase ininbound 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 providersother than Sprint. This traffic is settled at rates separatelynegotiated by Sprint on our behalf with the other PCS providers andthese rates have declined in some cases during 2005 compared to2004.

Product sales and cost of products sold —We record revenue from the sale of handsets and accessories, netof an allowance for returns, as product sales. Product sales revenueand cost of products sold are recorded for all products that are soldthrough our retail stores as well as those sold to our local indirectagents. The cost of handsets sold generally exceeds the retail salesprice as we subsidize the price of handsets for competitive reasons.Sprint's handset return policy allows customers to return theirhandsets for a full refund within 14 days of purchase. When handsetsare returned to us, we may be able to reissue the handsets to customersat little additional cost to us. However, when handsets are returned toSprint for refurbishing, we may receive a credit from Sprint, which isless than the amount we originally paid for the handset.

Productsales revenue for the quarter ended September 30, 2005 was $3,338compared to $3,571 for the quarter ended September 30, 2004. Cost ofproducts sold for the quarter ended September 30, 2005 was $8,073compared to $8,651 for the quarter ended September 30, 2004. As such,the subsidy on handsets sold through our retail and local indirectchannels was $4,735 in the quarter ended September 30, 2005 and $5,080for the quarter ended September 30, 2004. The decrease in subsidies of$345 is due to a decrease in the number of activations through ourretail and local indirect channels. Product sales revenue for theperiod from acquisition to September 30, 2005 was $7,991 and for theperiod from January 1, 2005 to February 15, 2005 was $3,191. Thiscombined product sales revenue of $11,182 compares to $10,065 for thenine months ended September 30, 2004. Cost of products sold for theperiod from acquisition to September 30, 2005 was $20,199 and for theperiod from January 1, 2005 to February 15, 2005 was $6,528. Thiscombined cost of products sold of $26,727 compares to $22,523 for thenine months ended September 30, 2004. As such, the subsidy on handsetssold through our retail and local indirect channels on a combined basiswas $15,545 for the nine months ended September 30, 2005 compared to$12,458 for the nine months ended September 30, 2004. The increase insubsidies of $3,087 in the first nine months of 2005 is primarily dueto an increase in the number of activations through our retail andlocal indirect channels.

Cost of service and operations— Cost of service and operations includes the costs ofoperating our portion of the PCS network of Sprint. These costs includeitems such as tower operating leases and maintenance as well asbackhaul costs, which are costs associated with transporting wirelesscalls across our portion of the PCS network of Sprint to anothercarrier's network. In addition, cost of service and operationsincludes outbound roaming costs, long distance charges, the fees we payto Sprint for our 8 percent affiliation fee, back office services suchas billing and customer care, as well as our provision for estimateduncollectible accounts. Expenses were $55,565 in the quarter endedSeptember 30, 2005, which was approximately 53 percent higher than$36,251 in the quarter ended September 30, 2004. Expenses were $130,005in the period from acquisition to September 30, 2005 and $23,782 fromJanuary 1, 2005 to February 15, 2005. This combined cost of service andoperations of $153,787 in the nine months ended September 30, 2005 wasapproximately 29 percent higher than the $118,965 incurred in the ninemonths ended September 30, 2004. The increase in expenses in 2005 wasdue to the increased volume of traffic carried on our network due bothto the increase in both our subscribers as well as wholesale and resalecustomers.

Selling and marketing expenses —Selling and marketing expenses include advertising, promotion,sales commissions and expenses related to our distribution channels,including our retail store 

31

----

expenses. In addition, we reimburse Sprintfor the subsidy on handsets sold through national retail stores due tothe fact that these retailers purchase their handsets from Sprint. Thissubsidy is recorded as a selling and marketing expense. Selling andmarketing expenses were $13,737 in the quarter ended September 30, 2005and $13,928 in the quarter ended September 30, 2004. Selling andmarketing expenses were $34,887 in the period from acquisition toSeptember 30, 2005 and $9,261 from January 1, 2005 to February 15,2005. These combined selling and marketing expenses of $44,148 in thenine months ended September 30, 2005 were 20 percent higher than the$36,734 incurred in the nine months ended September 30, 2004. Theincrease experienced in 2005 is attributable to an increase in variablecosts resulting from increases in gross activations.

Generaland administrative expenses — General and administrativeexpenses include corporate costs and expenses such as administrationand finance. General and administrative expenses were $4,566 in thequarter ended September 30, 2005 and $4,624 in the quarter endedSeptember 30, 2004. General and administrative expenses were $13,388 inthe period from acquisition to September 30, 2005 and $2,885 fromJanuary 1, 2005 to February 15, 2005. These combined general andadministrative expenses of $16,273 in the nine months ended September30, 2005 were consistent with the $15,917 incurred in the nine monthsended September 30, 2004.

Merger related expenses —Merger related expense in the period from January 1, 2005 toFebruary 15, 2005 related to the acquisition of Old AirGate by AlamosaHoldings and was $23,803. Approximately $10,693 was related to thepayment for cancellation of employee stock options and restricted stockunits. Approximately $6,133 related to employee severance costsassociated with terminating employees, including those to be terminatedafter the close of the acquisition. Approximately $4,269 related toinvestment banking fees. Approximately $1,474 related to future leasepayments (net of expected sublease income) for a facility to be closedin May 2005. The remaining $1,234 related to legal and otherprofessional fees incurred in connection with the acquisition.

Depreciation and amortization — Depreciation andamortization includes depreciation of our property and equipment aswell as amortization of intangibles. Depreciation is calculated on thestraight-line method over the estimated useful lives of the underlyingassets and totaled $4,778 for the quarter ended September 30, 2005.Depreciation was $12,155 for the quarter ended September 30, 2004 basedon the historical cost of property and equipment. Depreciation was$14,137 in the period from acquisition to September 30, 2005 based onthe value allocated to property and equipment in the purchase priceallocation. Depreciation was $7,914 from January 1, 2005 to February15, 2005 and was based on the historical cost of property andequipment. Depreciation was $36,062 for the nine months ended September30, 2004 based on the historical cost of property and equipment.

Amortization expense relates to identifiable intangible assets wehave recorded related to value assigned to the agreements with Sprintand the customer base in connection with purchase accounting associatedwith the acquisition of Old AirGate by Alamosa Holdings. Amortizationexpense was $21,830 for the quarter ended September 30, 2005 and$54,574 in the period from acquisition to September 30, 2005.

Income (loss) from operations — Our operating lossfor the quarter ended September 30, 2005 was $4,978 compared tooperating income of $15,867 for the quarter ended September 30, 2004.The decrease in operating income of $20,845 in the three months endedSeptember 30, 2005 is primarily due to $21,830 in amortization ofintangibles. Our operating loss in the period from acquisition toSeptember 30, 2005 was $17,280 and for the period from January 1, 2005to February 15, 2005 was $25,350. This combined operating loss of$42,630 for the nine months ended September 30, 2005 was significantlyhigher than operating income for the nine months ended September 30,2004 of $25,354. The increase in operating loss of $67,984 in the ninemonths ended September 30, 2005 is primarily due to $23,803 in mergerrelated expenses plus $54,574 in amortization of intangibles.

Interest and other income — Interest and other incomerepresents amounts earned on the investment of excess cash. Income was$694 in the quarter ended September 30, 2005 and $237 in the quarterended September 30, 2004. Income was $1,719 in the period fromacquisition to September 30, 2005 and $346 in the period from January1, 2005 to February 15, 2005. This combined interest 

32

----

income of $2,065 in the nine months endedSeptember 30, 2005 was significantly higher than the $590 earned in thenine months ended September 30, 2004. The increase in interest andother income is primarily due to the fact that in October 2004, theCompany completed an offering of Floating Rate Notes in the amount of$175,000 and used the proceeds to pay off existing debt ofapproximately $131,200 resulting in a net increase in cash to theCompany of approximately $43,800. Earnings on this excess cash duringthe three and nine months ended September 30, 2005 account for therespective increases in interest income.

Interest expense— Interest expense was $6,275 in the quarter ended September30, 2005 and $7,428 in the quarter ended September 30, 2004. Interestexpense for the period from acquisition to September 30, 2005 was$14,772 and for the period from January 1, 2005 to February 15, 2005was $4,111. This combined interest expense of $18,883 in the ninemonths ended September 30, 2005 was 24% lower than interestexpense of $24,969 in the nine months ended September 30, 2004. Thedecrease in interest expense was due to the debt restructuringcompleted in February 2004 resulting in a lower amount of borrowings aswell as a lower effective interest rate on borrowings.

IncomeTaxes

We account for income taxes in accordance with SFAS No.109, "Accounting for Income Taxes." Underthis method, we utilize an asset and liability approach to accountingfor income taxes, wherein deferred taxes are provided for book and taxbasis differences for assets and liabilities. In the event differencesexist between the book and tax basis of our assets and liabilities thatresult in deferred assets, an evaluation of the probability of beingable to realize the future benefits indicated by such assets is made. Avaluation allowance is provided for the portion of deferred tax assetsfor which there is sufficient uncertainty regarding our ability torecognize the benefits of those assets in future years.

On aquarterly basis, we evaluate the need for and adequacy of the valuationallowance based upon the expected realizability of our deferred taxassets and adjust the amount of such allowance, if necessary. Thefactors used to assess the likelihood of realization are the latestforecast of future taxable income, available tax planning strategiesand the future reversal of existing taxable temporary differences.

Cash Flows

Operating activities — Operatingcash flows were $23,182 in the period from acquisition to September 30,2005 and negative $18,618 from January 1, 2005 to February 15, 2005.The combined cash flows from operations of $4,564 for the nine monthsended September 30, 2005 compares to positive cash flow of $46,334 forthe nine months ended September 30, 2004. The decrease of $41,770 wasprimarily attributable to working capital changes of negative $14,825due to reductions of payables and accrued expenses as well as anincrease in net loss driven by approximately $23,803 in merger relatedexpenses during the first nine months of 2005.

Investingactivities — Our investing cash flows were $9,190 in theperiod from acquisition to September 30, 2005 including $36,220 netcash recorded in the purchase price allocation. Excluding the purchaseaccounting adjustment, the investing cash flows were negative $27,030primarily associated with purchases of property and equipment.Investing cash flows for the period from January 1, 2005 to February15, 2005 were positive $40,824 including a decrease in short terminvestments of $49,435 reduced by purchases of property and equipmentof $8,611. Investing cash flows in the nine months ended September 30,2004 were negative $67,484 due to purchases of property and equipmentof $12,484 and an increase in short term investments of $55,000.

Financing activities — Our financing cash flows inthe period from acquisition to September 30, 2005 were negative $15,000representing distributions paid to Alamosa Holdings. Financing cashflows in the period from January 1, 2005 to February 15, 2005 werenegative $1,617 due to $1,629 in debt issuance costs. Financingactivities in the nine months ended September 30, 2004 were negative$25,440 including repayments of borrowings of $19,679 and equityissuance costs of $4,754.

33

----

Liquidity and Capital Resources

Old AirGate financed their operations through debt financing andthrough proceeds generated from public offerings of Old AirGate commonstock and cash provided by operations. The proceeds from thesetransactions and cash provided by operations have been used to fund thebuild-out of our portion of the PCS network of Sprint, subscriberacquisition costs and working capital.

As of September 30, 2005,we had $17 million in cash and cash equivalents as well as $36 millionin short-term investments which we believe will be sufficient to fundexpected capital expenditures and to cover our working capital and debtservice requirements for at least the next 12 months.

Our futureliquidity will be dependent on a number of factors influencing itsprojections of operating cash flows, including those related tosubscriber growth, average revenue per user, average monthly churn andcost per gross addition. Should actual results differ significantlyfrom these assumptions, our liquidity position could be adverselyaffected and it could be in a position that would require it to raiseadditional 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

On December 15, 2004, Sprint Corporation("Sprint") and Nextel Communications, Inc.("Nextel") announced a proposed merger oftheir two companies. Nextel operated a wireless mobility communicationsnetwork in certain territories in which we also provide digitalwireless mobility communications network services under the Sprint oraffiliated brands. Sprint and Nextel closed the merger on August 12,2005.

Based upon the terms of the exclusivity covenantscontained in the management agreement between Sprint and AirGate PCS,Inc., we believe that Nextel's operation of a wireless mobilitycommunications network in territories in which AirGate operates fromand after the closing of the Sprint-Nextel merger constitutes a breachof the exclusivity covenants in the AirGate management agreement withSprint. Moreover, based upon public statements and disclosures made bySprint and Nextel, Alamosa Holdings believes that actions that Sprintand Nextel may take in connection with the integration of theiroperations following completion of the merger may constitute a breachof the exclusivity and certain other provisions of the managementagreements between Sprint and Alamosa Holdings' other operatingsubsidiaries.

As previously disclosed, Alamosa Holdings has beenengaged in discussions with Sprint in an attempt to reach a mutuallyacceptable resolution of the issues related to the Sprint-Nextel mergerand its effect on the existing management agreements between Sprint andAlamosa Holdings' subsidiaries. On August 8, 2005, AirGate fileda lawsuit against Sprint, certain of its affiliates and Nextel in theDelaware Court of Chancery alleging, among other things, that followingthe completion of the merger, Sprint would be in breach of theexclusivity covenants contained in its management agreement withAirGate and that Nextel unlawfully interfered with AirGate'sexclusive rights under such agreement. The complaint seeks, among otherthings, an order directing Sprint and its affiliates to specificallyperform their contractual obligations under their agreements withAirGate, an injunction preventing Sprint and Nextel from taking anyaction or entering into any agreement that would violate theexclusivity covenants contained in the agreements, a declaratoryjudgment declaring the rights, remedies and obligations of the partiesunder the agreements, and damages. Alamosa Holdings' otheroperating subsidiaries also may decide to pursue remedies againstSprint and Nextel, including bringing a lawsuit against Sprint andNextel.

Under our affiliation agreements with Sprint, an eventof termination can be declared by us after a material breach by Sprintis not cured within the applicable grace period, which, withoutextension by us, could be as much as 180 days. If we have the right toterminate our management agreements because of an event of terminationcaused by Sprint, generally we may (i) require Sprint to purchase allof our operating assets used in connection with our portion of the PCSnetwork of Sprint, (ii) in all areas in our territory where Sprint isthe licensee for 20 MHz or more of the spectrum on the date itterminates our management agreements, require Sprint to assign to us,subject to governmental 

34

----

approval, up to 10 MHz of licensed spectrumor (iii) choose not to terminate our management agreements and sueSprint for damages or other relief or submit the matter toarbitration.

Should the breach not be cured by Sprint or amodification, waiver or extension not be granted by us, the election byus to terminate the affiliation agreements would constitute an event ofdefault under each series of our outstanding senior notes. Upon anevent of default, the holders of the senior notes would have the rightto demand payment and we may not have adequate liquidity to satisfythis obligation. At this point in time, we do not anticipate that anevent of termination of the affiliation agreements will occur.

We may experience a higher average monthly churn rate than we arecurrently anticipating. Our average monthly churn for the quarter endedSeptember 30, 2005 was 2.9 percent compared to 2.8 percent for thequarter ended September 30, 2004. If average monthly churn increasesover the long-term, we would lose the cash flows attributable to thosecustomers.

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, moreexisting customers will begin to upgrade to new handsets to takeadvantage of these services. We have limited historical experienceregarding the rate at which existing customers upgrade their handsetsand if more customers upgrade than we are currently anticipating, itcould have a material adverse impact on our earnings and cashflows.

We may not realize the anticipated benefits of ouracquisition by Alamosa Holdings, which took place in February 2005. Ifwe are unable to effectively operate the territories acquired inconnection with the acquisition, our expected synergies and results ofoperations may not be realized, which could have a material adverseimpact on our earnings and cash flows.

We may not be able toaccess the credit or equity markets for additional capital if theliquidity discussed above is not sufficient for the cash needs of ourbusiness. 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, 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.

In June 2005,the FASB issued SFAS No. 154, "Accounting Changes andError Corrections a replacement of APB Opinion No. 20 and FASBStatement No. 3." This Statement changes the requirementsfor the accounting for and reporting of a change in accountingprinciple. This Statement applies to voluntary changes as well as thosechanges required by an accounting pronouncement if that pronouncementdoes not include specific transition provisions. This Statementrequires retrospective application to prior periods' financialstatements of changes in accounting principle as opposed to being shownas a cumulative adjustment in the period of change. The Statement is

35

----

effective for all changes and corrections oferrors made in fiscal years beginning after December 15, 2005. Theadoption of this standard is not expected to materially impact theCompany

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 toasset retirement obligations in which the timing and/or method ofsettlement may be conditional on a future event, including obligationsto remediate 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 of operations.

|               |                                                           |
|---------------|-----------------------------------------------------------|
| ITEM 3.  | QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK |

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

|              |                         |
|--------------|-------------------------|
| ITEM4.  | CONTROLS AND PROCEDURES |

|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | Evaluation of Disclosure Controls andProcedures. The Company's management with the participation ofthe Company's Chief Executive Officer and Principal Financial andAccounting Officer has evaluated the effectiveness of our disclosurecontrols and procedures (as such term is defined in Rules 13a-15(e) or15d-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. |

|           |                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)  | Changes inInternal 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.

36

----

PART II — OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

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

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OFPROCEEDS.

None.

ITEM 3.    DEFAULTS UPON SENIORSECURITIES.

None.

ITEM 4.    SUBMISSION OF MATTERS TOA VOTE OF SECURITY HOLDERS.

None.

ITEM 5.    OTHERINFORMATION.

None.

ITEM 6.    EXHIBITS.

Seethe Exhibit Index following the signature page hereto for a list of theexhibits filed pursuant to Item 601 of RegulationS-K.

37

----

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.

|  | AIRGATE PCS, INC. (Registrant) |
|--|--------------------------------|

|  | /s/ David E.Sharbutt |
|--|----------------------|

|  |
|--|
|  |  |  |
|  |

|  | DavidE. Sharbutt Chairman of the Board of Directors andChiefExecutive Officer (Principal Executive Officer) |
|--|-------------------------------------------------------------------------------------------------------------|

|  | /s/ Kendall W.Cowan |
|--|---------------------|

|  |
|--|
|  |  |  |
|  |

|  | KendallW. CowanVice President, Treasurer and Secretary(PrincipalFinancial and Accounting Officer) |
|--|---------------------------------------------------------------------------------------------------|

38

----

EXHIBITINDEX

|               |  |                                                                                                                                                                                                                                       |  |  |  |  |
|---------------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| EXHIBITNUMBER |  | EXHIBITTITLE                                                                                                                                                                                                                          |
| 3.1           |  | Certificate ofIncorporation 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 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. |

----