Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
		For the quarterly period ended November 30, 2007
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission file number 0-19603

CENTENNIAL

COMMUNICATIONS CORP.

(Exact name of registrant as specified in its charter)


Delaware		06-1242753
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

3349 Route 138
Wall, NJ 07719
(Address of principal executive offices,
including zip code)

(732) 556-2200
(Registrants telephone number,
including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer o Accelerated filer þ Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock — 107,758,122 outstanding shares as of January 4, 2008

TABLE OF CONTENTS


Part I — Financial Information
	Item 1.	Financial Statements	2
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
	Item 4.	Controls and Procedures	40

Part II — Other Information
	Item 1.	Legal Proceedings	41
	Item 1A.	Risk Factors	41
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
	Item 3.	Defaults Upon Senior Securities	42
	Item 4.	Submission of Matters to a Vote of Security Holders	42
	Item 5.	Other Information	42
	Item 6.	Exhibits	43
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION
EX-32.2: CERTIFICATION

PART I — FINANCIAL INFORMATION


ITEM 1.	*FINANCIAL STATEMENTS*

CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollar amounts in thousands, except share data)


	November 30,			May 31,
	2007			2007

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	72,950		$	94,740
Accounts receivable, less allowance for doubtful accounts of $8,923 and $7,571, respectively		103,737			88,292
Inventory — phones and accessories, net		44,312			31,624
Prepaid expenses and other current assets		21,639			18,257

Total Current Assets		242,638			232,913
Property, plant and equipment, net		575,316			574,503
Debt issuance costs, less accumulated amortization of $26,999 and $25,295, respectively		38,547			42,872
Restricted cash		6,167			5,926
U.S. wireless licenses		402,386			398,783
Puerto Rico wireless licenses, net		54,159			54,159
Goodwill		4,187			4,187
Cable facility, net		3,370			3,490
Customer list, net		11,799			—
Other assets		4,616			5,148

TOTAL ASSETS	$	1,343,185		$	1,321,981


LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	44,188		$	20,839
Accrued expenses and other current liabilities		183,944			191,524
Payable to affiliates		75			125

Total Current Liabilities		228,207			212,488
Long-term debt		2,005,049			2,046,565
Deferred income taxes		134,855			124,783
Other liabilities		37,832			16,523
Minority interest in subsidiaries		4,618			4,293
Commitments and contingencies (see Note 8)
STOCKHOLDERS’ DEFICIT:
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $0.01 par value per share, 240,000,000 shares authorized; issued 107,813,680 and 106,899,286 shares, respectively; and outstanding 107,743,177 and 106,828,783 shares, respectively		1,078			1,069
Additional paid-in capital		30,244			19,832
Accumulated deficit		(1,096,492	)		(1,103,379	)
Accumulated other comprehensive (loss) income		(1,129	)		884

		(1,066,299	)		(1,081,594	)
Less: cost of 70,503 common shares in treasury		(1,077	)		(1,077	)

Total Stockholders’ Deficit		(1,067,376	)		(1,082,671	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,343,185		$	1,321,981

See notes to Condensed Consolidated Financial Statements.

CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands, except per share data)


	Three Months Ended						Six Months Ended
	November 30,			November 30,			November 30,			November 30,
	2007			2006			2007			2006

REVENUE:
Service revenue	$	230,737		$	216,743		$	465,096		$	429,779
Equipment sales		12,831			12,459			26,442			24,824

		243,568			229,202			491,538			454,603

COSTS AND EXPENSES:
Cost of services (exclusive of depreciation and amortization shown below)		44,367			43,499			90,941			86,741
Cost of equipment sold		30,262			32,411			61,784			61,095
Sales and marketing		26,728			24,115			52,314			46,793
General and administrative		52,559			43,813			99,865			84,689
Depreciation and amortization		34,255			32,695			67,611			64,913
Loss on disposition of assets		1,262			88			1,611			293

		189,433			176,621			374,126			344,524

Operating income		54,135			52,581			117,412			110,079

Interest expense, net		(47,809	)		(51,689	)		(96,393	)		(102,403	)
Income from continuing operations before income tax expense, minority interest in income of subsidiaries and income from equity investments		6,326			892			21,019			7,676
Income tax (expense) benefit		(4,707	)		48			(12,968	)		(7,033	)

Income from continuing operations before minority interest in income of subsidiaries and income from equity investments		1,619			940			8,051			643
Minority interest in income of subsidiaries		(169	)		(233	)		(321	)		(441	)
Income from equity investments		—			293			—			546

Income from continuing operations		1,450			1,000			7,730			748
Discontinued operations:
Loss		—			(1,464	)		—			(2,829	)
Loss on disposition		(525	)		(31,995	)		(1,039	)		(31,995	)
Income tax expense		—			(893	)		—			(1,435	)

Net loss from discontinued operations		(525	)		(34,352	)		(1,039	)		(36,259	)

Net income (loss)	$	925		$	(33,352	)	$	6,691		$	(35,511	)

Earnings (loss) per share:
Basic
Earnings per share from continuing operations	$	0.01		$	0.01		$	0.07		$	0.01
Loss per share from discontinued operations		(0.00	)		(0.33	)		(0.01	)		(0.35	)

Net income (loss) per share	$	0.01		$	(0.32	)	$	0.06		$	(0.34	)

Diluted
Earnings per share from continuing operations	$	0.01		$	0.01		$	0.07		$	0.01
Loss per share from discontinued operations		(0.00	)		(0.32	)		(0.01	)		(0.34	)

Net income (loss) per share	$	0.01		$	(0.31	)	$	0.06		$	(0.33	)

Weighted-average number of shares outstanding:
Basic		107,556			105,408			107,526			105,309

Diluted		110,725			107,512			110,585			107,363

See notes to Condensed Consolidated Financial Statements.

CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)


	Six Months Ended
	November 30,			November 30,
	2007			2006

OPERATING ACTIVITIES:
Net income (loss)	$	6,691		$	(35,511	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		67,611			72,045
Stock-based compensation		6,436			5,204
Excess tax benefits from stock-based compensation		(1,107	)		(66	)
Minority interest in income of subsidiaries		321			441
Income from equity investments		—			(546	)
Distributions received from equity investments		—			215
Loss on disposition of assets		2,650			32,288
Changes in assets and liabilities		(2,502	)		(4,641	)

Net cash provided by operating activities		80,100			69,429

INVESTING ACTIVITIES:
Proceeds from disposition of assets, net of cash expenses		81			583
Acquisition of minority interest, net		—			(2,500	)
Payment for acquisition, net of cash acquired		(12,519	)		—
Payment for purchase of wireless spectrum		(3,603	)		(14,920	)
Capital expenditures		(45,422	)		(41,202	)

Net cash used in investing activities		(61,463	)		(58,039	)

FINANCING ACTIVITIES:
Repayment of debt		(45,944	)		(889	)
Proceeds from the exercise of stock options		4,114			790
Proceeds from issuance of common stock under employee stock purchase plan		296			461
Excess tax benefits from stock-based compensation		1,107			66

Net cash (used in) provided by financing activities		(40,427	)		428

Net (decrease) increase in cash and cash equivalents		(21,790	)		11,818
Cash and cash equivalents, beginning of period		94,740			94,884

Cash and cash equivalents, end of period	$	72,950		$	106,702

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid during the period for:
Interest	$	95,804		$	98,321

Income taxes	$	6,109		$	3,321

NON-CASH TRANSACTION:
Fixed assets acquired under capital leases	$	3,004		$	4,791

Acquisition of minority interest included in accrued expenses and other current liabilities	$	—		$	1,000

See notes to Condensed Consolidated Financial Statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(Dollar amounts in thousands, except per share amounts)


NOTE 1.	INTERIM FINANCIAL STATEMENTS

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, these Condensed Consolidated Financial Statements do not include all disclosures required by GAAP. The results for the interim periods are not necessarily indicative of results for the full year. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s May 31, 2007 Annual Report on Form 10-K, filed on August 9, 2007, which includes a summary of significant accounting policies and other disclosures. In the opinion of management, the accompanying interim unaudited Condensed Consolidated Financial Statements contain all adjustments (consisting only of normal recurring items) necessary to present fairly the condensed consolidated financial position of Centennial Communications Corp. and Subsidiaries (the “Company”) as of November 30, 2007 and the results of its consolidated operations and consolidated cash flows for the three and six-month periods ended November 30, 2007 and 2006.


NOTE 2.	OTHER INTANGIBLE ASSETS AND GOODWILL

Other Intangible Assets

The following table presents the intangible assets not subject to amortization:


					Impairment
	As of		Assets		Loss		As of
	June 1, 2007		Acquired		Recognized		November 30, 2007

U.S. wireless licenses	$	398,783	$	3,603	$	—	$	402,386
Puerto Rico wireless licenses		54,159		—		—		54,159

Total	$	452,942	$	3,603	$	—	$	456,545

On October 23, 2007, the Company acquired 1900 MHz (PCS) wireless spectrum covering approximately 400,000 Pops in Lima and Findlay-Tiffin, Ohio, for approximately $3,603.

A significant portion of the Company’s intangible assets are licenses that provide the Company’s wireless operations with the exclusive right to utilize radio frequency spectrum designated on the license to provide wireless communication services. While wireless licenses are issued for only a fixed time, generally ten years, the U.S. wireless and Puerto Rico wireless licenses are subject to renewal by the Federal Communications Commission (“FCC”). Historically, renewals of licenses through the FCC have occurred routinely and at nominal cost. Moreover, the Company has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the estimated useful life of its U.S. wireless and Puerto Rico wireless licenses. As a result, the U.S. wireless and Puerto Rico wireless licenses are treated as indefinite-lived intangible assets under the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets (“SFAS 142”) and are not amortized, but rather are tested for impairment. The Company reevaluates the estimated useful life determination for U.S. wireless and Puerto Rico wireless licenses each reporting period to determine whether events and circumstances continue to support an indefinite useful life.

The Company tests its wireless licenses for impairment annually, and more frequently if indications of impairment exist. The Company uses a direct value approach in performing its annual impairment test on its wireless licenses, in accordance with a September 29, 2004 Staff Announcement from the staff of the SEC “Use of the Residual Method to Value Acquired Assets Other Than Goodwill.” The direct value approach determines fair value using estimates of future cash flows associated specifically with the licenses. If the fair value of the wireless licenses is less than the carrying amount of the licenses, an impairment is recognized.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill and other intangible assets with indefinite lives are subject to impairment tests. The Company currently tests goodwill for impairment using a residual value approach on an annual basis as of January 31 or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit (calculated using a discounted cash flow method) with its carrying amount, including goodwill. The Company determined that its reporting units for SFAS 142 are its operating segments determined under SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information (“SFAS 131”). If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares implied fair value (i.e., fair value of reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets) of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying value of goodwill exceeds its implied fair value, the excess is required to be recorded as an impairment.

The Company performed its annual goodwill and intangible asset impairment analyses during the third quarter of fiscal year 2007. Based upon the results of these analyses, there were no impairments.

The following table presents other intangible assets subject to amortization:

As of November 30, 2007

As of May 31, 2007

Estimated

Gross

Useful

Carrying

Accumulated

Carrying

Accumulated

Life

Amount

Amortization

Amount

Amortization

Cable facility

25 years

6,000

2,630

6,000

2,510

Customer lists

10 years

11,959

160

—

Other intangible assets amortization expense was $220 and $280 for the three and six months ended November 30, 2007, respectively. Based solely on the finite lived intangible assets existing at November 30, 2007, amortization expense is estimated to be approximately $720 for the remainder of fiscal 2008 and $1,440 per fiscal year for each of the next five fiscal years.

Goodwill

The goodwill balance in the Puerto Rico broadband segment was $4,187 at November 30, 2007 and May 31, 2007.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


NOTE 3.	DEBT

Long-term debt consisted of the following:


	As of		As of
	November 30, 2007		May 31, 2007

Senior Secured Credit Facility — Term Loans	$	550,000	$	550,000
8 1 / 8 % Senior Unsecured Notes due 2014		325,000		325,000
10 1 / 8 % Senior Unsecured Notes due 2013		500,000		500,000
Senior Unsecured Holdco Floating Rate Notes due 2013, net of unamortized discount of $2,536 and $2,785, respectively		347,464		347,215
10% Senior Unsecured Holdco Fixed Rate Notes due 2013		200,000		200,000
10 3 / 4 % Senior Subordinated Notes due 2008		—		45,000
Capital Lease Obligations		70,571		67,128
Financing Obligation — Tower Sale		12,014		12,222

Total Long-Term Debt		2,005,049		2,046,565
Current Portion of Long-Term Debt		—		—

Net Long-Term Debt	$	2,005,049	$	2,046,565

Senior Secured Credit Facility

On February 9, 2004, the Company’s wholly-owned subsidiaries, Centennial Cellular Operating Co. LLC (“CCOC”) and Centennial Puerto Rico Operations Corp. (“CPROC”), as co-borrowers, entered into a $750,000 senior secured credit facility (the “Senior Secured Credit Facility”). The Company and its direct and indirect domestic subsidiaries, including CCOC and CPROC, are guarantors under the Senior Secured Credit Facility.

The Senior Secured Credit Facility consists of a seven-year term loan, maturing in fiscal year 2011, with an original aggregate principal amount of $600,000, which requires amortization payments in an aggregate principal amount of $550,000 in two equal installments of $275,000 in August 2010 and February 2011. The Senior Secured Credit Facility also includes a six-year revolving credit facility, maturing in February 2010, with an aggregate principal amount of up to $150,000. At November 30, 2007, approximately $150,000 was available under the revolving credit facility.

On February 5, 2007, the Company amended its Senior Secured Credit Facility to lower the interest rate on term loan borrowings by 0.25% through a reduction in the London Inter-Bank Offering Rate (“LIBOR”) spread from 2.25% to 2.00%. Under the terms of the Senior Secured Credit Facility, as amended, term and revolving loan borrowings will bear interest at LIBOR (a weighted average rate of 5.20% as of November 30, 2007) plus 2.00% and LIBOR plus 3.25%, respectively. The Company’s obligations under the Senior Secured Credit Facility are collateralized by liens on substantially all of the Company’s assets.

High-Yield Notes

On December 21, 2005, the Company issued $550,000 in aggregate principal amount of senior notes due 2013 (the “2013 Holdco Notes”). The 2013 Holdco Notes were issued in two series consisting of (i) $350,000 of floating rate notes that bear interest at three-month LIBOR (5.23% as of November 30, 2007) plus 5.75% and mature in January 2013 (the “2013 Holdco Floating Rate Notes”) and (ii) $200,000 of 2013 Holdco Fixed Rate Notes that bear interest at 10% and mature in January 2013. The 2013 Holdco Floating Rate Notes were issued at a 1% discount with the Company receiving net proceeds of $346,500. The Company used the net proceeds from the offering, together with a portion of its available cash, to pay a special cash dividend of $5.52 per share to the Company’s common stockholders and to prepay $39,500 of term loans under the Senior Secured Credit Facility. In connection with the completion of the 2013 Holdco Notes offering, the Company entered into an amendment to the Senior Secured Credit Facility to permit, among other things, the issuance of the 2013 Holdco Notes and the payment of the

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

special cash dividend. Additionally, the Company capitalized $15,447 of debt issuance costs in connection with the issuance of the 2013 Holdco Notes.

On February 9, 2004, concurrent with the Senior Secured Credit Facility, the Company and its wholly-owned subsidiaries, CCOC and CPROC, as co-issuers, issued $325,000 aggregate principal amount of 8 1 / 8 % senior unsecured notes due 2014 (the “2014 Senior Notes”). The Company used the net proceeds from the 2014 Senior Notes offering to refinance outstanding indebtedness.

On June 20, 2003, the Company and CCOC, as co-issuers, issued $500,000 aggregate principal amount of 10 1 / 8 % senior unsecured notes due 2013 (the “2013 Senior Notes”). CPROC is a guarantor of the 2013 Senior Notes.

In December 1998, the Company and CCOC issued $370,000 of 10 3 / 4 % Senior Subordinated Notes due 2008 (the “2008 Senior Subordinated Notes”). An affiliate of Welsh, Carson, Anderson & Stowe (“Welsh Carson”), the Company’s principal stockholder, owned approximately $189,000 principal amount of the 2008 Senior Subordinated Notes. CPROC is a guarantor of the 2008 Senior Subordinated Notes. As of November 30, 2007, the Company had repurchased or redeemed all such notes.

Derivative Financial Instruments

On December 22, 2005, the Company, through its wholly-owned subsidiary, CCOC, entered into an interest rate swap agreement (the “CCOC Swap”) to hedge variable interest rate risk on $200,000 of the Company’s outstanding variable interest rate term loans under the Senior Secured Credit Facility. The CCOC Swap became effective March 31, 2006, and expired on December 31, 2007. The fixed interest rate on the CCOC Swap was 6.84%. On May 1, 2007, the Company entered into an interest rate collar agreement (the “May 2007 CCOC Collar”), through its wholly-owned subsidiary, CCOC, to hedge variable interest rate risk on $200,000 of the Company’s variable interest rate term loans under the Senior Secured Credit Facility. The May 2007 CCOC Collar became effective December 31, 2007, the date that the CCOC Swap expired, and expires on December 31, 2008. The May 2007 CCOC Collar has a fixed interest rate floor of 4.24% and a fixed interest rate cap of 5.35%.

On March 10, 2006, the Company, through its wholly owned subsidiary, CPROC, entered into an agreement to hedge variable interest rate risk on $250,000 of variable interest rate term loans for one year (the “2007 CPROC Swap”). The 2007 CPROC Swap became effective March 30, 2007 and will expire on March 31, 2008, at a fixed interest rate of 7.13%. On September 18, 2007, the Company, through its wholly owned subsidiary, CPROC, entered into an additional agreement to hedge variable interest rate risk on $250,000 of the Company’s $550,000 of variable interest rate term loans under the Senior Secured Credit Facility for six months (the “2008 CPROC Swap”). The 2008 CPROC Swap will become effective March 31, 2008, the date that the 2007 CPROC Swap expires, and expire on September 30, 2008, and has a fixed interest rate of 6.45%.

On October 31, 2006, the Company entered into an interest rate collar agreement (the “CPROC Collar”), through its wholly-owned subsidiary, CPROC, to hedge variable interest rate risk on $35,500 of the Company’s variable interest rate term loans under the Senior Secured Credit Facility. The CPROC Collar became effective as of December 29, 2006 and expires June 30, 2008. The CPROC Collar has a fixed interest rate floor of 4.66% and a fixed interest rate cap of 5.50%.

On October 31, 2006, the Company entered into an interest rate collar agreement (the “CCOC Collar”), through its wholly owned subsidiary, CCOC, to hedge variable interest rate risk on $25,000 of the Company’s variable interest rate term loans under the Senior Secured Credit Facility. The CCOC Collar became effective as of December 29, 2006 and expires June 30, 2008. The CCOC Collar has a fixed interest rate floor of 4.66% and a fixed interest rate cap of 5.50%.

On April 12, 2007, the Company entered into an interest rate collar agreement (the “April 2007 CCOC Collar”), through its wholly-owned subsidiary, CCOC, to hedge variable interest rate risk on $39,500 of the Company’s variable interest rate term loans under the Senior Secured Credit Facility. The April 2007 CCOC Collar became effective as of May 31, 2007 and expires May 31, 2008. The April 2007 CCOC Collar has a fixed interest rate floor of 4.95% and a fixed interest rate cap of 5.40%.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On October 31, 2007, the Company entered into an agreement to hedge variable interest rate risk on $200,000 of the Company’s $350,000 of variable interest rate 2013 Holdco Floating Rate Notes for six months (the “Holdco Swap”). The Holdco Swap became effective December 31, 2007 and will expire on June 30, 2008, and has an all-in fixed interest rate of 10.46%.

At November 30, 2007, $750,000 of the Company’s $900,000 of variable rate debt was hedged by interest rate swaps or collars described above. All the Company’s swaps and collars have been designated as cash flow hedges.

At November 30, 2007, the fair value of the swaps and collars was approximately $(2,059). The Company recorded a liability, which is included in other liabilities in the condensed consolidated balance sheet, for the fair value of the swaps and collars. For the six months ended November 30, 2007, the Company recorded $1,128, net of tax, in accumulated other comprehensive loss attributable to the fair value adjustments of the swaps and collars.

Under certain of the agreements relating to long-term debt, the Company is required to maintain certain financial and operating covenants, and is limited in its ability to, among other things, incur additional indebtedness and enter into transactions with affiliates. Under certain circumstances, the Company is prohibited from paying cash dividends on its common stock under certain of such agreements. The Company was in compliance with all financial and operating covenants of its debt agreements at November 30, 2007.

The aggregate annual principal payments for the next five years and thereafter under the Company’s long-term debt at November 30, 2007 are summarized as follows:


November 30, 2008	$	—
November 30, 2009		—
November 30, 2010		274,626
November 30, 2011		275,153
November 30, 2012		367
November 30, 2013 and thereafter		1,457,439

		2,007,585
Unamortized discount		(2,536	)

	$	2,005,049

Interest expense, as reflected on the Condensed Consolidated Financial Statements, has been partially offset by interest income. The gross interest expense was approximately $48,874 and $98,614 for the three and six months ended November 30, 2007, respectively, and approximately $52,677 and $104,430 for the three and six months ended November 30, 2006, respectively.


NOTE 4.	TAXES

In accordance with SFAS No. 109, Accounting for Income Taxes (“SFAS 109”), Accounting Principles Board (“APB”) Opinion No. 28, Interim Financial Reporting (“APB 28”), and Financial Accounting Standards Board (“FASB”) Interpretation No. 18, Accounting for Income Taxes in Interim Periods — An Interpretation of APB Opinion No. 28 (“FIN 18”), the Company has recorded its tax provision from continuing operations for the quarter ended November 30, 2007 based on its projected annual worldwide effective tax rate (the “effective tax rate”) of 57.3%.

The Company’s effective tax rate of 57.3% is primarily due to U.S. federal taxes, state taxes net of federal tax benefit and foreign taxes for which the Company cannot claim a foreign tax credit.

On June 1, 2007, the Company adopted the provision of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48, which provides clarification with respect to the accounting for uncertainty in income taxes, contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with SFAS 109. The first step is to

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

Tax positions are analyzed on a quarterly basis and adjusted based upon changes in facts and circumstances, such as the conclusion of federal and state audits, expiration of the statute of limitations for the assessment of tax, case law and emerging legislation. The Company’s effective tax rate includes the effect of tax contingency reserves and changes to the reserves in accordance with FIN 48.

As a result of the implementation of FIN 48, the Company decreased the liability for net unrecognized tax benefits by $196, and accounted for the increase as a cumulative effect of a change in accounting principle that resulted in an increase to retained earnings of $196. The total amount of gross unrecognized tax benefits as of the date of adoption was $15,100. These gross unrecognized tax benefits would affect the effective tax rate if recognized.

The Company’s policy to include interest related to unrecognized tax benefits within the provision for taxes on the consolidated condensed statements of income did not change as a result of implementing the provisions of FIN 48. As of the date of adoption of FIN 48, the Company had accrued $1,500 for the payment of interest relating to unrecognized tax benefits. During the three and six months ended November 30, 2007, the Company recorded approximately $202 and $202, respectively, in potential interest associated with uncertain tax positions.

The Company and/or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to US federal income tax examinations for years before 2003 and generally, is no longer subject to states and foreign income tax examinations by tax authorities for years before 2002. In the second quarter of fiscal 2008, the IRS commenced an audit of the Company’s tax return for the year ended May 31, 2006 and the state of Michigan commenced an audit of the Company’s tax returns for the years ended May 31, 2003 through May 31, 2006. The Company’s income tax returns are not currently under examination in any other taxing jurisdiction.

Management has concluded that it is reasonably possible that the unrecognized tax benefits will increase by approximately $1,700 within the next 12 months. The increase is primarily related to additional foreign and state taxes and interest accruals net of any expiring statutes of limitations.


NOTE 5.	DISCONTINUED OPERATIONS

On March 13, 2007, the Company sold its wholly-owned subsidiary, All American Cables and Radio Inc. (“Centennial Dominicana”), to Trilogy International Partners (“Trilogy”) for approximately $83,298 in cash, which consisted of a purchase price of $81,000 and an estimated working capital adjustment of $2,298, which resulted in a loss on disposition of assets of $33,132. The disposition has been accounted for by the Company as a discontinued operation in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”). No tax benefit has been recognized on the sale as management does not believe that realization of the benefit resulting from the capital loss is more likely than not.

Summarized financial information for the discontinued operations of Centennial Dominicana is as follows:


	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2007			2006			2007			2006

Revenue	$	—		$	18,600		$	—		$	37,436
(Loss) income from discontinued operations		—			(1,464	)		—			(2,829	)
Loss on disposition		(525	)		(31,995	)		(1,039	)		(31,995	)
Income tax expense		—			(893	)		—			(1,435	)

Net loss from discontinued operations	$	(525	)	$	(34,352	)	$	(1,039	)	$	(36,259	)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


NOTE 6.	RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after December 15, 2008. The Company believes that this new pronouncement will not have a material effect on the Company’s consolidated results of operations, consolidated financial position and consolidated cash flows.

In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations (“SFAS 141R”). SFAS 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after December 15, 2008. The Company believes that this new pronouncement will not have a material effect on the Company’s consolidated results of operations, consolidated financial position and consolidated cash flows.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of SFAS 115 (“SFAS 159”). SFAS 159 provides entities with the option to measure financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 is effective with fiscal years beginning after November 15, 2007, provided that the entity also elects to apply the provisions of SFAS No. 157, Fair Value Measurement (“SFAS 157”). The Company is currently evaluating the impact that the implementation of SFAS 159 will have on our consolidated results of operations, consolidated financial position and consolidated cash flows.

In September 2006, the FASB issued SFAS 157. SFAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, SFAS 157 does not require any new fair value measurements. However, for some companies, the application of SFAS 157 will change current practice. SFAS 157 is effective with fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact that the implementation of SFAS 157 will have on our consolidated results of operations, consolidated financial position and consolidated cash flows.

In September 2006, the Emerging Issues Task Force (“EITF”) issued EITF No. 06-1, Accounting for Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary for an End-Customer to Receive Service from the Service Provider (“EITF 06-1”), which states how a service provider company that depends on specialized equipment should account for consideration paid to the manufacturers and resellers of such equipment. EITF 06-1 requires that the service provider recognize payments based on the form of benefit the end-customer receives from the manufacturer or reseller. If the form of benefit is “other than cash” or the service provider does not control the form of benefit provided to the customer, the consideration would be classified as an expense. If the form of benefit is cash, the consideration would be classified as an offset to revenue. EITF 06-1 requires retrospective application to all prior periods as of the beginning of the first annual reporting period beginning after June 15, 2007 (which is the fiscal year beginning June 1, 2008 for the Company). EITF 06-1 will be effective for the Company for the first annual reporting period beginning after June 15, 2007. The Company is currently evaluating the impact that the implementation of EITF 06-1 will have on its consolidated results of operations, consolidated financial position and consolidated cash flows.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


NOTE 7.	ACQUISITIONS AND DISPOSITIONS

On October 23, 2007, the Company acquired 1900 MHz (PCS) wireless spectrum covering approximately 400,000 Pops in Lima and Findlay-Tiffin, Ohio, markets contiguous to the Company’s existing footprint in Ft. Wayne, Indiana, for $3,603.

On September 18, 2007, the Company completed the acquisition of Islanet Communications (“Islanet”), a provider of data and voice communications to business and residential customers in Puerto Rico for $15,000, exclusive of a positive $2,369 working capital adjustment and direct costs of $456, for a net aggregate purchase price of $13,087. The Company has included the operations of Islanet in its results since the acquisition date.

Preliminary Purchase Price Allocation

The acquisition was accounted for under the purchase method of accounting with the Company treated as the acquiring entity in accordance with SFAS No. 141, Business Combinations (“SFAS 141”). Accordingly, the consideration paid by the Company to complete the acquisition has been allocated preliminarily to the assets and liabilities acquired based upon their estimated fair values as of the date of the acquisition. The allocation of purchase price is based upon certain valuations and other analyses that have not been completed as of the date of this filing due to the timing of the closing of the acquisition. Accordingly, the purchase price allocations are preliminary and are subject to future adjustments during the allocation period as defined in SFAS No. 141.

The preliminary purchase price allocations as of the date of acquisition are as follows:


Current assets	$	561
Property, plant and equipment, net		3,431
Customer lists		11,959
Deferred tax asset		2,596

Total Assets Acquired		18,547
Current liabilities assumed		3,050
Deferred tax liability		2,410

Net assets acquired	$	13,087

Customer lists assets are amortized on a straight-line basis over their remaining expected useful lives of approximately 10 years.

This acquisition did not have a material effect on the Company’s results of operations for the three and six months ended November 30, 2007, nor would it have had a material effect on the Company’s results of operations for the fiscal year ended May 31, 2007.


NOTE 8.	COMMITMENTS AND CONTINGENCIES

Legal Proceedings:

In March 2007, a shareholder derivative action was filed in Delaware Chancery Court by DD Equity Trading Co., against each of the members of the Company’s board of directors, certain stockholders of the Company (affiliates of Welsh Carson and The Blackstone Group) (the “Defendants”) and the Company, as a nominal defendant. The suit alleged, among other things, breach of fiduciary duty in connection with a recapitalization transaction consummated in January 2006 pursuant to which the Company issued $550,000 of senior notes due 2013 and used the proceeds to, among other things, pay a special cash dividend of $5.52 per share to its common stockholders. The suit also alleged that the stockholder defendants were unjustly enriched by the payment of the dividend to the detriment of the Company because, among other things, of the increase in the Company’s debt caused by the recapitalization. The suit also alleged waste of corporate assets in connection with certain monitoring fees paid to the stockholder defendants. The complaint sought damages against the defendants for the benefit of the

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company, as well as attorney’s fees and costs and other relief as may be just and proper. The Defendants filed a motion to dismiss the lawsuit. Prior to oral argument on the motion to dismiss, on November 1, 2007, the Plaintiffs voluntarily dismissed the action against all defendants.

The Company is party to several lawsuits in which plaintiffs have alleged, depending on the case, breach of contract, misrepresentation or unfair practice claims relating to its billing practices, including rounding up of partial minutes of use to full-minute increments, billing send to end, and billing for unanswered and dropped calls. The plaintiffs in these cases have not alleged any specific monetary damages and are seeking certification as a class action. One of these actions was recently dismissed after a long period of non-prosecution by the plaintiff. A hearing on class certification in another one of these cases was held on September 2, 2003 in a state court in Louisiana. Subsequent to such hearing, a new judge was assigned to the case and the plaintiffs renewed their motion seeking class action status. The decision of the court with respect to class certification is still pending. All activity in such case has been effectively stayed as a result of the parties recently entering into a proposed settlement. On October 19, 2007, the court granted preliminary approval of the proposed settlement and scheduled a hearing to consider final approval of the settlement for April 2008. The settlement provides for the certification of a class consisting of all current and former customers of Centennial. In general, under the terms of the settlement, class members may elect to receive a settlement benefit consisting of one of the following: (i) additional minutes of Centennial airtime, (ii) a service credit on their wireless telephone bill in exchange for extending their wireless contract, (iii) a discount on certain accessories or (iv) a pre-paid long distance calling card. In connection with the settlement, the Company has recorded a charge of $2,950, included in general and administrative expense on the Consolidated Statement of Operations for the three and six months ended November 30, 2007, to cover all expected costs of the settlement.

In 2001, the Company’s previously sold Dominican Republic subsidiary, Centennial Dominicana, commenced litigation against International Telcom, Inc. (“ITI”) to collect an approximate $1,800 receivable owing under a traffic termination agreement between the parties relating to international long distance traffic terminated by Centennial Dominicana in the Dominican Republic. Subsequently, ITI counterclaimed against Centennial Dominicana claiming that Centennial Dominicana breached the traffic termination agreement and is claiming damages in excess of $20,000. The matter is subject to arbitration in Miami, Florida and a decision of the arbitration panel is expected in the next 12 months. In connection with the sale of Centennial Dominicana (see Note 5), the Company has agreed to indemnify Trilogy with respect to liabilities arising as a result of the ITI litigation. The Company does not believe that any damage payments would have a material adverse effect on the Company’s consolidated results of operations, consolidated financial position or consolidated cash flows.

The Company is subject to other claims and legal actions that arise in the ordinary course of business. The Company does not believe that any of these other pending claims or legal actions will have a material adverse effect on its consolidated results of operations, consolidated financial position or consolidated cash flows.

Guarantees:

The Company currently does not guarantee the debt of any entity outside of its consolidated group. In the ordinary course of its business, the Company enters into agreements with third parties that provide for indemnification of counter parties. Examples of these types of agreements are underwriting agreements entered into in connection with securities offerings and agreements relating to the sale or purchase of assets. The duration, triggering events, maximum exposure and other terms under these indemnification provisions vary from agreement to agreement. In general, the indemnification provisions require the Company to indemnify the other party to the agreement against losses it may suffer as a result of the Company’s breach of its representations and warranties contained in the underlying agreement or for misleading information contained in a securities offering document. The Company is unable to estimate the maximum potential liability for these types of indemnifications as the agreements generally do not specify a maximum amount, and the actual amounts are dependant on future events, the nature and likelihood of which cannot be determined at this time. Historically, the Company has never incurred any material costs relating to these indemnification agreements. Accordingly, the Company believes the estimated fair value of these agreements is minimal.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Lease Commitments:

The Company leases facilities and equipment under noncancelable operating and capital leases. Terms of the leases, including renewal options and escalation clauses, vary by lease. When determining the term of a lease, the Company includes renewal options that are reasonably assured. Rent expense is recorded on a straight-line basis over the initial lease term and those renewal periods that are reasonably assured. The difference between rent expense and rent paid is recorded as deferred rent. Leasehold improvements are depreciated over the shorter of their economic lives, which begins once the assets are ready for their intended use, or the lease term.

Additionally, during both fiscal years ended May 31, 2004 and 2003, the Company entered into sale-leaseback transactions where the Company sold telecommunication towers and leased back the same telecommunications towers. As a result of provisions in the sale and lease-back agreements that provide for continuing involvement by the Company, the Company accounted for the sale and lease-back of certain towers as a finance obligation. For the sale and lease-back of towers determined to have no continuing involvement, sale-leaseback accounting has been followed. The Company has recognized a deferred gain on the sale of such telecommunications towers and is accounting for substantially all of its leases under the lease-backs as capital leases. As such, the deferred gain is being amortized in proportion to the amortization of the leased telecommunications towers.

Other Commitments and Contingencies:

In June 2004, the Company signed an amendment to its billing services agreement with Convergys Information Management Group, Inc. (“Convergys”). The agreement has a term of seven years and Convergys agreed to provide billing services, facilitate network fault detection, correction and management performance and usage monitoring and security for the Company’s wireless operations. Subject to the terms of the agreement, which include a requirement to meet certain performance standards, the Company has committed to purchase a total of approximately $74,642 of services through 2011 under this agreement. As of November 30, 2007, the Company has paid approximately $38,240 in connection with this agreement.


NOTE 9.	SEGMENT INFORMATION

The Company’s Condensed Consolidated Financial Statements include three reportable segments: U.S. wireless, Puerto Rico wireless, and Puerto Rico broadband. The Company determines its reportable segments based on the aggregation criteria of SFAS 131 (e.g., types of services offered and geographic location). U.S. wireless represents the Company’s wireless systems in the United States that it owns and manages. Puerto Rico wireless represents the Company’s wireless operations in Puerto Rico and the U.S. Virgin Islands. Puerto Rico broadband represents the Company’s offering of broadband services including switched voice, dedicated (private line) and other services in Puerto Rico. The Company measures the operating performance of each segment based on adjusted operating income. Adjusted operating income is defined as net income (loss) before loss from discontinued operations, income from equity investments, minority interest in income of subsidiaries, income tax (expense) benefit, interest expense, net, loss on disposition of assets, strategic alternatives/recapitalization costs, litigation settlement expense, stock-based compensation expense and depreciation and amortization.

The results of operations presented below exclude Centennial Dominicana due to its classification as a discontinued operation (see Note 5). Prior to the classification of Centennial Dominicana as a discontinued operation, the results of its operations were included in the Puerto Rico Wireless Segment (previously the Caribbean Wireless Segment) and the Puerto Rico Broadband Segment (previously the Caribbean Broadband Segment).

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Information about the Company’s operations in its three business segments as of, and for the three and six months ended, November 30, 2007 and 2006 is as follows:


	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2007			2006			2007			2006

U.S. WIRELESS
Service revenue	$	108,797		$	95,910		$	218,137		$	187,619
Roaming revenue		14,233			16,993			32,185			36,315
Equipment sales		9,777			8,611			20,089			18,001

Total revenue		132,807			121,514			270,411			241,935
Adjusted operating income		51,372			42,049			104,511			85,740
Total assets		1,808,612			1,898,413			1,808,612			1,898,413
Capital expenditures		11,767			11,142			18,818			16,545
PUERTO RICO WIRELESS
Service revenue	$	76,281		$	73,613		$	153,185		$	146,711
Roaming revenue		1,463			1,432			2,599			2,899
Equipment sales		3,055			3,848			6,353			6,823

Total revenue		80,799			78,893			162,137			156,433
Adjusted operating income		27,195			28,249			55,888			59,862
Total assets		269,432			314,277			269,432			314,277
Capital expenditures		9,285			7,567			16,758			14,796
PUERTO RICO BROADBAND
Switched revenue	$	13,777		$	13,601		$	27,379		$	27,436
Dedicated revenue		17,527			15,353			33,801			29,805
Other revenue		1,702			2,877			3,830			4,901

Total revenue		33,006			31,831			65,010			62,142
Adjusted operating income		17,416			17,937			35,621			34,786
Total assets		217,729			168,933			217,729			168,933
Capital expenditures		4,374			4,749			9,846			8,492
ELIMINATIONS/ADJUSTMENTS
Total revenue(1)	$	(3,044	)	$	(3,036	)	$	(6,020	)	$	(5,907	)
Total assets(2)(3)		(952,588	)		(959,214	)		(952,588	)		(959,214	)
CONSOLIDATED
Total revenue	$	243,568		$	229,202		$	491,538		$	454,603
Adjusted operating income		95,983			88,235			196,020			180,388
Total assets		1,343,185			1,422,409			1,343,185			1,422,409
Capital expenditures		25,426			23,458			45,422			39,833


(1)		Elimination of intercompany revenue, primarily from Puerto Rico broadband to Puerto Rico wireless.

(2)		Elimination of intercompany investments.

(3)		Includes assets held for sale of $94,772 as of November 30, 2006.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Reconciliation of adjusted operating income to net income (loss):


	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2007			2006			2007			2006

Adjusted operating income	$	95,983		$	88,235		$	196,020		$	180,388
Depreciation and amortization		(34,255	)		(32,695	)		(67,611	)		(64,913	)
Stock-based compensation expense		(3,381	)		(2,869	)		(6,436	)		(4,818	)
Strategic alternatives/recapitalization costs		—			(2	)		—			(285	)
Litigation settlement expense		(2,950	)		—			(2,950	)		—
Loss on disposition of assets		(1,262	)		(88	)		(1,611	)		(293	)

Operating income		54,135			52,581			117,412			110,079
Interest expense, net		(47,809	)		(51,689	)		(96,393	)		(102,403	)
Income tax (expense) benefit		(4,707	)		48			(12,968	)		(7,033	)
Minority interest in income of subsidiaries		(169	)		(233	)		(321	)		(441	)
Income from equity investments		—			293			—			546

Income from continuing operations		1,450			1,000			7,730			748
Loss from discontinued operations		(525	)		(34,352	)		(1,039	)		(36,259	)

Net income (loss)	$	925		$	(33,352	)	$	6,691		$	(35,511	)


NOTE 10.	CONDENSED CONSOLIDATING FINANCIAL DATA

CCOC and CPROC are wholly-owned subsidiaries of the Company. CCOC is a joint and several co-issuer on both the 2008 Senior Subordinated Notes and the 2013 Senior Notes issued by the Company, and CPROC has unconditionally guaranteed both the 2008 Senior Subordinated Notes and the 2013 Senior Notes. The Company, CCOC and CPROC are joint and several co-issuers of the 2014 Senior Notes. Separate financial statements and other disclosures concerning CCOC and CPROC are not presented because they are not material to investors.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET FINANCIAL DATA
As of November 30, 2007


	Centennial			Centennial												Centennial
	Puerto Rico			Cellular						Centennial						Communications
	Operations			Operating			Non-			Communications						Corp. and
	Corp.			Co. LLC			Guarantors			Corp.			Eliminations			Subsidiaries
							(Amounts in thousands)

ASSETS
Current assets:
Cash and cash equivalents	$	34,115		$	—		$	38,835		$	—		$	—		$	72,950
Accounts receivable, net		48,770			—			54,967			—			—			103,737
Inventory — phones and accessories, net		10,194			—			34,118			—			—			44,312
Prepaid expenses and other current assets		14,779			—			6,860			—			—			21,639

Total current assets		107,858			—			134,780			—			—			242,638
Property, plant & equipment, net		250,745			—			324,571			—			—			575,316
Debt issuance costs		13,868			—			24,679			—			—			38,547
Restricted Cash		6,167			—			—			—			—			6,167
U.S. wireless licenses		—			—			402,386			—			—			402,386
Puerto Rico wireless licenses, net		—			—			54,159			—			—			54,159
Goodwill		4,187			—			—			—			—			4,187
Investment in subsidiaries		—			941,175			604,793			(756,464	)		(789,504	)		—
Other assets, net		17,889			—			1,896			—			—			19,785

Total	$	400,714		$	941,175		$	1,547,264		$	(756,464	)	$	(789,504	)	$	1,343,185


LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	16,982		$	—		$	27,206		$	—		$	—		$	44,188
Accrued expenses and other current liabilities		88,548			—			95,396			—			—			183,944
Payable to affiliates		—			—			75			—			—			75

Total current liabilities		105,530			—			122,677			—			—			228,207
Long-term debt		793,107			591,395			73,083			547,464			—			2,005,049
Deferred income taxes		2,989			—			131,866			—			—			134,855
Other liabilities		10,899			—			26,933			—			—			37,832
Intercompany		17,268			1,086,890			1,080,631			(236,707	)		(1,948,082	)		—
Minority interest in subsidiaries		—			—			4,618			—			—			4,618
Redeemable preferred stock		606,538			—			—			—			(606,538	)		—
Stockholders’ (deficit) equity:
Common stock		—			—			—			1,078			—			1,078
Additional paid-in capital		(818,497	)		—			818,497			30,244			—			30,244
Accumulated (deficit) equity		(316,671	)		(737,404	)		(711,041	)		(1,096,492	)		1,765,116			(1,096,492	)
Accumulated other comprehensive income		(449	)		294			—			(974	)		—			(1,129	)

		(1,135,617	)		(737,110	)		107,456			(1,066,144	)		1,765,116			(1,066,299	)
Less: treasury shares		—			—			—			(1,077	)		—			(1,077	)

Total stockholders’ (deficit) equity		(1,135,617	)		(737,110	)		107,456			(1,067,221	)		1,765,116			(1,067,376	)

Total	$	400,714		$	941,175		$	1,547,264		$	(756,464	)	$	(789,504	)	$	1,343,185

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
For the Six Months Ended November 30, 2007


	Centennial			Centennial												Centennial
	Puerto Rico			Cellular						Centennial						Communications
	Operations			Operating			Non-			Communications						Corp. and
	Corp.			Co. LLC			Guarantors			Corp.			Eliminations			Subsidiaries
	(Amounts in thousands)

Revenue	$	207,785		$	—		$	289,773		$	—		$	(6,020	)	$	491,538

Costs and expenses:
Cost of services (exclusive of depreciation and amortization shown below)		40,224			—			56,401			—			(5,684	)		90,941
Cost of equipment sold		17,533			—			44,251			—			—			61,784
Sales and marketing		21,293			—			31,021			—			—			52,314
General and administrative		49,972			—			50,229			—			(336	)		99,865
Depreciation and amortization		33,478			—			34,133			—			—			67,611
Loss on disposition of assets		593			—			1,018			—			—			1,611

		163,093			—			217,053			—			(6,020	)		374,126

Operating income		44,692			—			72,720			—			—			117,412

Income (loss) from investments in subsidiaries		—			6,691			(6,597	)		6,691			(6,785	)		—
Interest expense, net		(52,169	)		(28,014	)		(1,434	)		(14,776	)		—			(96,393	)
Intercompany interest allocation		—			28,014			(42,790	)		14,776			—			—

(Loss) income from continuing operations before income tax expense, minority interest in income of subsidiaries and income from equity investments		(7,477	)		6,691			21,899			6,691			(6,785	)		21,019
Income tax benefit (expense)		880			—			(13,848	)		—			—			(12,968	)

(Loss) income from continuing operations before minority interest in income of subsidiaries and income from equity investments		(6,597	)		6,691			8,051			6,691			(6,785	)		8,051
Minority interest in income of subsidiaries		—			—			(321	)		—			—			(321	)

Loss (income) from continuing operations		(6,597	)		6,691			7,730			6,691			(6,785	)		7,730
Loss from discontinued operations		—			—			(1,039	)		—			—			(1,039	)

Net (loss) income	$	(6,597	)	$	6,691		$	6,691		$	6,691		$	(6,785	)	$	6,691

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
For the Six Months Ended November 30, 2007


	Centennial			Centennial												Centennial
	Puerto Rico			Cellular						Centennial						Communications
	Operations			Operating			Non-			Communications						Corp. and
	Corp.			Co. LLC			Guarantors			Corp.			Eliminations			Subsidiaries
	(Amounts in thousands)

OPERATING ACTIVITIES:
Net (loss) income	$	(6,597	)	$	6,691		$	6,691		$	6,691		$	(6,785	)	$	6,691
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		33,478			—			34,133			—			—			67,611
Stock-based compensation expense		3,322			—			3,114			—			—			6,436
Excess tax benefit from stock-based compensation		—			—			(1,107	)		—			—			(1,107	)
Minority interest in income of subsidiaries		—			—			321			—			—			321
Equity in undistributed earnings (loss) of subsidiaries		—			6,691			(6,597	)		6,691			(6,785	)		—
Loss on disposition of assets		593			—			2,057			—			—			2,650
Changes in assets and liabilities, net of effects of acquisitions and dispositions and other		17,162			99,380			(131,723	)		(28,791	)		41,470			(2,502	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		47,958			112,762			(93,111	)		(15,409	)		27,900			80,100

INVESTING ACTIVITIES:
Proceeds from disposition of assets, net of cash expenses		72			9			—			—			—			81
Payment for acquisition		(12,519	)		—			—			—			—			(12,519	)
Payments for purchase of wireless spectrum		—			(3,603	)		—			—			—			(3,603	)
Capital expenditures		(26,604	)		(18,818	)		—			—			—			(45,422	)

NET CASH USED IN INVESTING ACTIVITIES		(39,051	)		(22,412	)		—			—			—			(61,463	)

FINANCING ACTIVITIES:
Repayment of debt		—			(45,000	)		(944	)		—			—			(45,944	)
Proceeds from the exercise of employee stock options		—			—			—			4,114			—			4,114
Excess tax benefit from stock-based compensation		—			—			—			1,107			—			1,107
Proceeds from issuance of common stock under employee stock purchase plan		—			—			—			296			—			296
Cash (paid to) received from affiliates		(5,949	)		(45,350	)		69,307			9,892			(27,900	)		—

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(5,949	)		(90,350	)		68,363			15,409			(27,900	)		(40,427	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		2,958			—			(24,748	)		—			—			(21,790	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		31,157			—			63,583			—			—			94,740

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	34,115		$	—		$	38,835		$	—		$	—		$	72,950

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET FINANCIAL DATA

As of May 31, 2007

(Amounts in thousands)


	Centennial			Centennial												Centennial
	Puerto Rico			Cellular						Centennial						Communications
	Operations			Operating			Non-			Communications						Corp. and
	Corp.			Co. LLC			Guarantors			Corp.			Eliminations			Subsidiaries

ASSETS
Current assets:
Cash and cash equivalents	$	31,157		$	—		$	63,583		$	—		$	—		$	94,740
Accounts receivable, net		41,999			—			46,293			—			—			88,292
Inventory — phones and accessories, net		11,641			—			19,983			—			—			31,624
Prepaid expenses and other current assets		11,856			—			6,401			—			—			18,257

Total current assets		96,653			—			136,260			—			—			232,913
Property, plant & equipment, net		249,297			—			325,206			—			—			574,503
Debt issuance costs		15,288			—			27,584			—			—			42,872
Restricted cash		5,926			—			—			—			—			5,926
U.S. wireless licenses		—			—			398,783			—			—			398,783
Puerto Rico wireless licenses, net		—			—			54,159			—			—			54,159
Goodwill		4,187			—			—			—			—			4,187
Investment in subsidiaries		—			934,484			611,390			(763,155	)		(782,719	)		—
Other assets		5,777			—			2,861			—			—			8,638

Total	$	377,128		$	934,484		$	1,556,243		$	(763,155	)	$	(782,719	)	$	1,321,981


LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	14,183		$	—		$	6,656		$	—		$	—		$	20,839
Accrued expenses and other current liabilities		89,143			—			102,381			—			—			191,524
Payable to affiliates		—			—			125			—			—			125

Total current liabilities		103,326			—			109,162			—			—			212,488
Long-term debt		792,985			636,395			69,970			547,215			—			2,046,565
Deferred income taxes		4,422			—			120,361			—			—			124,783
Other liabilities		5,469			—			11,054			—			—			16,523
Intercompany		11,319			1,041,540			1,149,938			(226,815	)		(1,975,982	)		—
Minority interest in subsidiaries		—			—			4,293			—			—			4,293
Redeemable preferred stock		587,938			—			(9,300	)		—			(578,638	)		—
Stockholders’ (deficit) equity:
Common stock		—			—			—			1,069			—			1,069
Additional paid-in capital		(818,497	)		—			818,497			19,832			—			19,832
Accumulated (deficit) equity		(310,074	)		(744,095	)		(717,732	)		(1,103,379	)		1,771,901			(1,103,379	)
Accumulated other comprehensive loss		240			644			—			—						884

		(1,128,331	)		(743,451	)		100,765			(1,082,478	)		1,771,901			(1,081,594	)
Less: treasury shares		—			—			—			(1,077	)		—			(1,077	)

Total stockholders’ (deficit) equity		(1,128,331	)		(743,451	)		100,765			(1,083,555	)		1,771,901			(1,082,671	)

Total	$	377,128		$	934,484		$	1,556,243		$	(763,155	)	$	(782,719	)	$	1,321,981

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
For the Six Months Ended November 30, 2006


	Centennial			Centennial												Centennial
	Puerto Rico			Cellular						Centennial						Communications
	Operations			Operating			Non-			Communications						Corp. and
	Corp.			Co. LLC			Guarantors			Corp.			Eliminations			Subsidiaries
	(Amounts in thousands)

Revenue	$	200,974		$	—		$	255,746		$	—		$	(2,117	)	$	454,603

Costs and expenses:
Cost of services (exclusive of depreciation and amortization shown below)		36,189			—			51,902			—			(1,350	)		86,741
Cost of equipment sold		15,611			—			45,484			—			—			61,095
Sales and marketing		19,572			—			27,221			—			—			46,793
General and administrative		43,599			—			41,857			—			(767	)		84,689
Depreciation and amortization		33,242			—			31,671			—			—			64,913
Loss (gain) on disposition of assets		798			—			(505	)		—			—			293

		149,011			—			197,630			—			(2,117	)		344,524

Operating income		51,963			—			58,116			—			—			110,079

(Loss) income from investments in subsidiaries		—			(35,511	)		(13,685	)		(35,511	)		84,707			—
Interest expense, net		(51,458	)		(34,651	)		31,956			(29,650	)		(18,600	)		(102,403	)
Other (expense) income		(1,123	)		—			1,123			—			—			—
Intercompany interest allocation		—			34,651			(82,901	)		29,650			18,600			—

(Loss) income from continuing operations before income tax expense, minority interest in income of subsidiaries and income from equity investments		(618	)		(35,511	)		(5,391	)		(35,511	)		84,707			7,676
Income tax (expense) benefit		(13,067	)		—			6,034			—			—			(7,033	)

(Loss) income from continuing operations before minority interest in income of subsidiaries and income from equity investments		(13,685	)		(35,511	)		643			(35,511	)		84,707			643
Minority interest in income of subsidiaries		—			—			(441	)		—			—			(441	)
Income from equity investments		—			—			546			—			—			546

Loss (income) from continuing operations		(13,685	)		(35,511	)		748			(35,511	)		84,707			748
Loss from discontinued operations		—			—			(36,259	)		—			—			(36,259	)

Net (loss) income	$	(13,685	)	$	(35,511	)	$	(35,511	)	$	(35,511	)	$	84,707		$	(35,511	)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA

For the Six Months Ended November 30, 2006


	Centennial			Centennial												Centennial
	Puerto Rico			Cellular						Centennial						Communications
	Operations			Operating			Non-			Communications						Corp. and
	Corp.			Co. LLC			Guarantors			Corp.			Eliminations			Subsidiaries
	(Amounts in thousands)

OPERATING ACTIVITIES:
Net (loss) income	$	(13,685	)	$	(35,511	)	$	(35,511	)	$	(35,511	)	$	84,707		$	(35,511	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		33,242			—			38,803			—			—			72,045
Stock-based compensation expense		2,479			—			2,725			—			—			5,204
Excess tax benefit from stock-based compensation		—			—			(66	)		—			—			(66	)
Minority interest in income of subsidiaries		—			—			441			—			—			441
Income from equity investments		—			—			(546	)		—			—			(546	)
Equity in undistributed (loss) earnings of subsidiaries		—			(35,511	)		(13,685	)		(35,511	)		84,707			—
Distribution received from equity investment		—			—			215			—			—			215
Loss on disposition of assets		798			—			31,490			—			—			32,288
Changes in assets and liabilities, net of effects of acquisitions and dispositions and other		30,612			71,052			(20,316	)		63,069			(149,058	)		(4,641	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		53,446			30			3,550			(7,953	)		20,356			69,429

INVESTING ACTIVITIES:
Proceeds from disposition of assets, net of cash expenses		—			582			1			—			—			583
Acquisition of minority interest, net		—			—			(2,500	)		—			—			(2,500	)
Payments for purchase of wireless spectrum		—			—			(14,920	)		—			—			(14,920	)
Capital expenditures		(21,020	)		—			(20,182	)		—			—			(41,202	)

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(21,020	)		582			(37,601	)		—			—			(58,039	)

FINANCING ACTIVITIES:
Repayment of debt		—			—			(889	)		—			—			(889	)
Proceeds from the exercise of employee stock options		—			—			—			790			—			790
Excess tax benefit from stock-based compensation		—			—			66			—			—			66
Proceeds from issuance of common stock under employee stock purchase plan		—			—			—			461			—			461
Cash received from (paid to) affiliates		(9,188	)		(612	)		23,454			6,702			(20,356	)		—

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(9,188	)		(612	)		22,631			7,953			(20,356	)		428

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		23,238			—			(11,420	)		—			—			11,818
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		26,129			—			68,755			—			—			94,884

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	49,367		$	—		$	57,335		$	—		$	—		$	106,702


ITEM 2.	*MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS*

EXECUTIVE OVERVIEW

Company Overview

We are a leading regional wireless and broadband telecommunications service provider serving over 1.1 million wireless customers and approximately 460,700 access line equivalents in markets covering over 13 million Net Pops in the United States and Puerto Rico. In the United States, we are a regional wireless service provider in small cities and rural areas in two geographic clusters covering parts of six states in the Midwest and Southeast. In our Puerto Rico-based service area, which also includes operations in U.S. Virgin Islands, we are a facilities-based, fully integrated communications service provider offering both wireless services and, in Puerto Rico, broadband communications services to business and residential customers.

As discussed in Note 5 to the unaudited Condensed Consolidated Financial Statements, the results of operations presented below exclude our Dominican Republic operations (“Centennial Dominicana”) due to its classification as a discontinued operation.

The information contained in this Part I, Item 2, updates, and should be read in conjunction with, information set forth in Part II, Items 7 and 8, in our Annual Report on Form 10-K for the fiscal year ended May 31, 2007, filed on August 9, 2007, and should also be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and accompanying notes presented in Part 1, Item 1 of this Quarterly Report on Form 10-Q. Those statements in the following discussion that are not historical in nature should be considered to be forward-looking statements that are inherently uncertain. Please see “Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995” and the “Risk Factors” section of our 2007 Annual Report on Form 10-K.

Management’s Summary

Our vision is to be the premier regional telecommunications service provider, by tailoring the ultimate customer experience, in the markets we serve. We deliver our tailored approach by serving local markets with high quality networks, company-owned stores and well-trained sales and service associates. Our local scale and knowledge have led to a strong track record of success.

In the United States, we provide digital wireless service in two geographic clusters, covering approximately 9.0 million Net Pops. Our Midwest cluster includes parts of Indiana, Michigan and Ohio, and our Southeast cluster includes parts of Louisiana, Mississippi and Texas. Our clusters are comprised of small cities and rural areas.

In Puerto Rico, we offer wireless and broadband communications services. We also offer wireless services in the U.S. Virgin Islands. Puerto Rico is a U.S. dollar-denominated and Federal Communications Commission (“FCC”) regulated commonwealth of the United States. San Juan, the capital of Puerto Rico, is currently one of the 25 largest and 5 most dense U.S. wireless markets based on population.

We tailor the ultimate customer experience by focusing on attractive local markets with growth opportunities and customizing our sales, marketing and customer support functions to customer needs in these markets. For both the three and six months ended November 30, 2007, approximately 89% of our postpaid wireless sales in the United States and Puerto Rico and substantially all of our broadband sales were made through our own employees, which allows us to have a high degree of control over the customer experience. We invest significantly in training for our customer-facing employees and believe this extensive training and controlled distribution allows us to deliver an experience that we believe is unique and valued by the customers in our various markets. We target high quality postpaid wireless customers which generate high ARPU (revenue per average wireless subscriber, including roaming revenue) in our U.S. and Puerto Rico operations.

Our business strategy also requires that our networks are of the highest quality in all our locations. Capital expenditures for our U.S. wireless operations were used to expand our coverage areas and upgrade our cell sites and call switching equipment in existing wireless markets. In Puerto Rico, these investments were used to add capacity

and services, to continue the development and expansion of our Puerto Rico wireless systems and to continue the expansion of our Puerto Rico broadband network infrastructure.

In our Puerto Rico wireless operations, we sell or loan phones to our customers. When we sell a phone to a customer, the cost of the phone sold is charged to cost of equipment sold, whereas the cost of a phone we loan to a customer is recorded as an asset within property, plant and equipment and is charged to depreciation expense over the life of the phone.

We believe that the success of our business is a function of our performance relative to a number of key drivers. The drivers can be summarized in our ability to attract and retain customers by profitably providing superior service at competitive rates. We continually monitor our performance against these key drivers by evaluating several metrics. In addition to adjusted operating income (adjusted operating income represents the profitability measure of our segments — see Note 9 to the unaudited Condensed Consolidated Financial Statements for reconciliation to the appropriate measure under accounting principles generally accepted in the United States of America, or “GAAP” measure), the following key metrics, among other factors, are monitored by management in assessing the performance of our business:


	•	Gross postpaid and prepaid wireless additions

	•	Net gain — wireless subscribers

	•	ARPU

	•	Roaming revenue

	•	Penetration — wireless

	•	Postpaid churn — wireless

	•	Average monthly minutes of use per wireless subscriber

	•	Data revenue per average wireless subscriber

	•	Fiber route miles — Puerto Rico broadband

	•	Switched access lines — Puerto Rico broadband

	•	Dedicated access line equivalents — Puerto Rico broadband

	•	On-net buildings — Puerto Rico broadband

	•	Capital expenditures

Gross postpaid and prepaid wireless additions represent the number of new subscribers we are able to add during the period. Growing our subscriber base by adding new subscribers is a fundamental element of our long-term growth strategy. We must maintain a competitive offering of products and services to sustain our subscriber growth. We focus on postpaid customers in our U.S. and Puerto Rico operations.

Net gain— wireless subscribers represents the number of subscribers we were able to add to our service during the period after deducting the number of disconnected or terminated subscribers. By monitoring our growth against our forecast, we believe we are better able to anticipate our future operating performance.

ARPU represents the average monthly subscriber revenue generated by a typical subscriber (determined as subscriber revenues divided by average number of retail subscribers). We monitor trends in ARPU to ensure that our rate plans and promotional offerings are attractive to customers and profitable. The majority of our revenues are derived from subscriber revenues. Subscriber revenues include, among other things: monthly access charges; charges for airtime used in excess of plan minutes; Universal Service Fund (“USF”) support payment revenues; long distance revenues derived from calls placed by our customers; roaming revenue; and other charges such as activation, voice mail, call waiting, call forwarding and regulatory charges.

Roaming revenues represent the amount of revenue we receive from other wireless carriers for providing service to their subscribers who “roam” into our markets and use our systems to carry their calls. The per minute rate

paid to us is established by an agreement between the roamer’s wireless provider and us. The amount of roaming revenue we generate is often dependent upon usage patterns of our roaming partners’ subscribers and the rate plan mix and technology mix of our roaming partners. We closely monitor trends in roaming revenues because usage patterns by our roaming partners’ subscribers can be difficult to predict.

Penetration — wireless represents a percentage, which is calculated by dividing the number of our subscribers by the total population of potential subscribers available in the markets that we serve.

Postpaid churn represents the number of postpaid subscribers that disconnect or are terminated from our service. Churn is calculated by dividing the aggregate number of wireless retail subscribers who cancel service during each month in a period by the total number of wireless retail subscribers as of the beginning of the month. Churn is stated as the average monthly churn rate for the applicable period. We monitor and seek to control churn so that we can grow our business without incurring significant sales and marketing costs needed to replace disconnected subscribers. We must continue to ensure that we offer excellent network quality and customer service so that our churn rates remain low.

Average monthly minutes of use per wireless customer represents the average number of minutes (“MOUs”) used by our customers during a period. We monitor growth in MOUs to ensure that the access and overage charges we are collecting are consistent with that growth. In addition, growth in subscriber usage may indicate a need to invest in additional network capacity.

Data revenue per average wireless subscriber represents the portion of ARPU generated by our retail subscribers using data services such as text, picture, and multi-media messaging, wireless Internet browsing, wireless e-mail, instant internet, data cards and downloading content and applications.

Fiber route miles are the number of miles of fiber cable that we have laid. Fiber is installed to connect our equipment to our customer premises equipment. As a facilities-based carrier, the number of fiber route miles is an indicator of the strength of our network, our coverage and our potential market opportunity.

Switched access lines represent the number of lines connected to our switching center and serving customers for incoming and outgoing calls. Growing our switched access lines is a fundamental element of our strategy. We monitor the trends in our switched access line growth against our forecast to be able to anticipate future operating performance. In addition, this measurement allows us to compute our current market penetration in the markets we serve.

Dedicated access line equivalents represents the amount of Voice Grade Equivalent (“VGE”) lines used to connect two end points. We monitor the trends in our dedicated service using VGE against our forecast to anticipate future operating performance, network capacity requirements and overall growth of our business.

On-net buildings are locations where we have established a point of presence to serve one or more customers. Tracking the number of on-net buildings allows us to size our addressable market and determine the appropriate level of capital expenditures. As a facilities-based broadband operator, it is a critical performance measurement of our growth and a clear indication of our increased footprint.

Capital expenditures represent the amount spent on upgrades, additions and improvements to our telecommunications network and back office infrastructure. We monitor our capital expenditures as part of our overall financing plan and to ensure that we receive an appropriate rate of return on our capital investments. This statistic is also used to ensure that capital investments are in line with network usage trends and consistent with our objective of offering a high quality network to our customers.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our unaudited Condensed Consolidated Financial Statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the financial statements and revenues and expenses during the periods reported. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions.

There are certain critical estimates that we believe require significant judgment in the preparation of our unaudited Condensed Consolidated Financial Statements. We consider an accounting estimate to be critical if:


	•	it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time we were making the estimate, and

	•	changes in the estimate or different estimates that we could have selected may have had a material effect on our consolidated financial condition or consolidated results of operations.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses, which result from our customers not making required payments. We base our allowance on the likelihood of recoverability of our subscriber accounts receivable based on past experience and by reviewing current collection trends. A worsening of economic or industry trends beyond our estimates could result in an increase in our allowance for doubtful accounts by recording additional expense.

Property, Plant and Equipment — Depreciation

The telecommunications industry is capital intensive. Depreciation of property, plant and equipment constitutes a substantial operating cost for us. The cost of our property, plant and equipment, principally telecommunications equipment, is charged to depreciation expense over estimated useful lives. We depreciate our telecommunications equipment using the straight-line method over its estimated useful lives. We periodically review changes in our technology and industry conditions, asset retirement activity and salvage values to determine adjustments to the estimated remaining useful lives and depreciation rates. Actual economic lives may differ from our estimated useful lives as a result of changes in technology, market conditions and other factors. Such changes could result in a change in our depreciable lives and therefore our depreciation expense in future periods.

Valuation of Long-Lived Assets

Long-lived assets such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In our estimation of fair value, we consider current market values of properties similar to our own, competition, prevailing economic conditions, government policy, including taxation, and the historical and current growth patterns of both our business and the industry. We also consider the recoverability of the cost of our long-lived assets based on a comparison of estimated undiscounted operating cash flows for the related businesses with the carrying value of the long-lived assets. Considerable management judgment is required to estimate the fair value of an impairment, if any, of our assets. These estimates are very subjective in nature; we believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. Estimates related to recoverability of assets are critical accounting policies as management must make assumptions about future revenue and related expenses over the life of an asset, and the effect of recognizing impairment could be material to our consolidated financial position as well as our consolidated results of operations. Actual revenue and costs could vary significantly from such estimates.

Goodwill and Wireless Licenses — Valuation of Goodwill and Indefinite-Lived Intangible Assets

We review goodwill and wireless licenses for impairment based on the requirements of Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). In accordance with SFAS 142, goodwill is tested for impairment at the reporting unit level on an annual basis as of January 31 or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. We have determined that our reporting units for SFAS 142 are our operating segments determined under SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information (“SFAS 131”). In analyzing goodwill for potential impairment, we use projections of future cash flows from each reporting unit to determine whether its estimated value exceeds its carrying value. These projections of cash flows are based on our

views of growth rates, time horizons of cash flow forecasts, assumed terminal value, estimates of our future cost structures and anticipated future economic conditions and the appropriate discount rates relative to risk and estimates of residual values. These projections are very subjective in nature. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. The use of different estimates or assumptions within our discounted cash flow model (e.g., growth rates, future economic conditions or discount rates and estimates of terminal values) when determining the fair value of the reporting unit are subjective and could result in different values and may affect any related goodwill or wireless licenses impairment charge.

Stock-Based Compensation

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS 123(R)”), which establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period.

We adopted SFAS 123(R) using the modified prospective transition method beginning June 1, 2006. Accordingly, during the six months ended November 30, 2007, we recorded stock-based compensation expense for awards of options granted prior to, but not yet vested, as of June 1, 2006, as if the fair value method calculated for purposes of pro forma disclosure under SFAS 123 were in effect for expense recognition purposes, adjusted for estimated forfeitures. For awards of options granted after June 1, 2006, we recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For these awards, compensation expense was recognized on a straight-line basis over their respective vesting periods, net of estimated forfeitures.

In the process of implementing SFAS 123(R), we analyzed certain key variables, such as expected volatility and expected life to determine an accurate estimate of these variables. For the six months ended November 30, 2007, we utilized an expected volatility with a range of 67.01%-70.53% and an expected term of 6.25 years. The expected life of the option is calculated using the simplified method set out in Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 107 using the vesting term of 3 or 4 years and the contractual term of 7 or 10 years. The simplified method defines the expected life as the average of the contractual term of the options and the weighted average vesting period for all option tranches. SFAS 123(R) requires that stock-based compensation expense be based on awards that are ultimately expected to vest. Accordingly, stock-based compensation expense for the six months ended November 30, 2007 has been reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors as well as trends of actual option forfeitures.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes (“SFAS 109”). The computation of income taxes is subject to estimation due to the significant judgment required with respect to the tax positions we have taken that have been or could be challenged by taxing authorities.

Our income tax provision is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is used to evaluate our tax positions. We establish reserves at the time we determine it is probable that we will be liable to pay additional taxes related to certain matters. We adjust these reserves as facts and circumstances change.

A number of years may elapse before a particular matter, for which we have established a reserve, is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we record a reserve when we determine the likelihood of loss is probable. Favorable resolutions of tax matters for which we have previously established reserves are recognized as a reduction to our income tax expense when the amounts involved become known.

Tax law requires items to be included in the tax return at different times than when these items are reflected in the Condensed Consolidated Financial Statements. As a result, our annual tax rate reflected in our Condensed Consolidated Financial Statements is different than that reported in our tax return (our cash tax rate). Some of these

differences are permanent, such as expenses that are not deductible in our tax return, while other differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities. The tax rates used to determine deferred tax assets or liabilities are the enacted tax rates in effect for the year in which the differences are expected to reverse. Based on the evaluation of all available information, we recognize future tax benefits, such as net operating loss carryforwards, to the extent that realizing these benefits is considered more likely than not.

We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing our forecasted taxable income using both historical and projected future operating results, the reversal of existing temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. A valuation allowance is required to be established unless management determines that it is more likely than not that we will ultimately realize the tax benefit associated with a deferred tax asset.

We adjust our income tax provision in the period it is determined that actual results will differ from our estimates. The income tax provision reflects tax law and rate changes in the period such changes are enacted.

RESULTS OF OPERATIONS

Consolidated Operations

The table below summarizes the consolidated results of operations for each period:


	Three Months Ended									Six Months Ended
	November 30,									November 30,
	2007		2006		$ Change		% Change			2007		2006		$ Change		% Change
	(In thousands, except per share data)

Operating income	$	54,135	$	52,581	$	1,554		3	%	$	117,412	$	110,079	$	7,333		7	%
Income from continuing operations		1,450		1,000		450		45	%		7,730		748		6,982			*
Earnings per share from continuing operations:
Basic		0.01		0.01		0.00			*		0.07		0.01		0.06			*
Diluted		0.01		0.01		0.00			*		0.07		0.01		0.06			*


*		Percentage not meaningful

We had over 1,118,500 wireless subscribers, including approximately 50,200 wholesale subscribers, at November 30, 2007, as compared to 1,058,700, including approximately 51,300 wholesale subscribers, at November 30, 2006, an increase of 6%.

U.S. Wireless Operations


	Three Months Ended										Six Months Ended
	November 30,										November 30,
	2007		2006		$ Change			% Change			2007		2006		$ Change			% Change
	(In thousands)

Revenue:
Service revenue	$	108,797	$	95,910	$	12,887			13	%	$	218,137	$	187,619	$	30,518			16	%
Roaming revenue		14,233		16,993		(2,760	)		(16	)		32,185		36,315		(4,130	)		(11	)
Equipment sales		9,777		8,611		1,166			14			20,089		18,001		2,088			12

Total revenue		132,807		121,514		11,293			9			270,411		241,935		28,476			12

Costs and expenses:
Cost of services		25,702		26,541		(839	)		(3	)		54,069		52,873		1,196			2
Cost of equipment sold		16,559		20,455		(3,896	)		(19	)		35,338		39,470		(4,132	)		(10	)
Sales and marketing		15,674		13,572		2,102			15			30,638		26,792		3,846			14
General and administrative		23,500		18,897		4,603			24			45,855		37,060		8,795			24

Total costs and expenses		81,435		79,465		1,970			2			165,900		156,195		9,705			6

Adjusted operating income(1)	$	51,372	$	42,049	$	9,323			22	%	$	104,511	$	85,740	$	18,771			22	%


(1)		Adjusted operating income represents the profitability measure of the segment — see Note 9 to the unaudited Condensed Consolidated Financial Statements for a reconciliation of consolidated adjusted operating income to the appropriate GAAP measure.

Revenue. U.S. wireless service revenue increased in the three and six months ended November 30, 2007, as compared to the three and six months ended November 30, 2006. The increase was primarily due to an increase in the number of subscribers and sales of value-added features, such as phone insurance and data services (including short message services, multimedia services and downloads), and an increase in recurring access fees primarily due to increased subscribers on our Blue Nation (nationwide) and Blue Region (regional) plans, which generally have a higher ARPU than older plans.

U.S. wireless roaming revenue decreased for the three and six months ended November 30, 2007, as compared to the three and six months ended November 30, 2006. The decrease in the three months ended November 30, 2007 as compared to the same period last year was primarily due to a decrease in the average roaming rate per minute, partially offset by an increase in roaming minutes as well as an increase in revenue from data roaming. The decrease in the six months ended November 30, 2007 as compared to the same period last year was primarily due to a decrease in the average roaming rate per minute, partially offset by an increase in revenue from data roaming.

Equipment sales increased during the three and six months ended November 30, 2007, as compared to the three and six months ended November 30, 2006, due primarily to an increase in new activations and deductibles associated with our phone insurance program.

Our U.S. wireless operations had approximately 700,300 and 666,400 subscribers at November 30, 2007 and 2006, respectively, including approximately 50,200 and 51,300 wholesale subscribers, respectively. Wholesale subscribers are customers who use our network and services but are billed by a third party (reseller) who has effectively resold our services to the end user. Postpaid subscribers account for 96% of total U.S. wireless retail subscribers as of November 30, 2007. During the twelve months ended November 30, 2007, increases in retail subscribers from new activations of 200,700 were offset by subscriber cancellations of 165,700. The monthly postpaid churn rate was 2.0% for both the three and six months ended November 30, 2007, as compared to 1.9% for both the three and six months ended November 30, 2006, respectively. The cancellations experienced by our U.S. wireless operations were primarily due to non-payment and competition.

U.S. wireless ARPU was $68 and $70 for the three and six months ended November 30, 2007, respectively, as compared to $67 for both of the same periods last year. The increase in U.S. wireless ARPU was primarily due to the aforementioned increases in service revenue and equipment sales driven by increased subscribers on our Blue Nation and Blue Region plans, which generally have a higher ARPU than older plans, offset by lower roaming revenue. Average MOUs per subscriber were 1,051 and 1,046 per month for the three and six months ended November 30, 2007, respectively, as compared to 895 and 879 for the same periods last year.

Costs and expenses. Cost of services decreased during the three months ended November 30, 2007 and increased during the six months ended November 30, 2007, as compared to the same periods last year. The decrease in the three months ended November 30, 2007 was primarily due to a decrease in roamer service costs (amounts that we pay other wireless carriers when our subscribers use their networks) due to reduced rates, partially offset by increases in expenses to provide data services resulting from greater data usage and increased compensation costs. The increase in the six months ended November 30, 2007 was primarily due to increases in tower site rent associated with additional sites, expenses associated with providing data services and compensation costs. This was partially offset by a decrease in roamer service costs due to reduced rates.

Cost of equipment sold decreased for the three and six months ended November 30, 2007, as compared to the same periods last year. The decrease was primarily due to a lower average cost per phone in the three and six months ended November 30, 2007 as compared to the same periods last year, partially offset by a greater number of phones used for customer acquisition and retention in the three and six months ended November 30, 2007 as compared to the same period last year.

Sales and marketing expenses increased for the three and six months ended November 30, 2007, as compared to the same periods last year, primarily due to increased advertising associated with the launch of our New Blue Nation rate plans.

General and administrative expenses increased for the three and six months ended November 30, 2007, as compared to the same periods in the prior year. The increase was primarily due to increases in bad debt expense, compensation costs, costs related to employee benefits and training and rent expense.

Puerto Rico Wireless Operations


	Three Months Ended										Six Months Ended
	November 30,										November 30,
	2007		2006		$ Change			% Change			2007		2006		$ Change			% Change
	(In thousands)

Revenue:
Service revenue	$	76,281	$	73,613	$	2,668			4	%	$	153,185	$	146,711	$	6,474			4	%
Roaming revenue		1,463		1,432		31			2			2,599		2,899		(300	)		(10	)
Equipment sales		3,055		3,848		(793	)		(21	)		6,353		6,823		(470	)		(7	)

Total revenue		80,799		78,893		1,906			2			162,137		156,433		5,704			4

Costs and expenses:
Cost of services		12,971		12,401		570			5			26,062		24,820		1,242			5
Cost of equipment sold		13,459		11,902		1,557			13			26,137		21,522		4,615			21
Sales and marketing		9,209		8,505		704			8			18,209		16,235		1,974			12
General and administrative		17,965		17,836		129			1			35,841		33,994		1,847			5

Total costs and expenses		53,604		50,644		2,960			6			106,249		96,571		9,678			10

Adjusted operating income(1)	$	27,195	$	28,249	$	(1,054	)		(4	)%	$	55,888	$	59,862	$	(3,974	)		(7	)%


(1)		Adjusted operating income represents the profitability measure of the segment — see Note 9 to the unaudited Condensed Consolidated Financial Statements for a reconciliation of consolidated adjusted operating income to the appropriate GAAP measure.

Revenue. Puerto Rico wireless service revenue increased for the three and six months ended November 30, 2007, as compared to the three and six months ended November 30, 2006. The increase primarily relates to an increase in subscribers in the three and six months ended November 30, 2007 as compared to the same periods last year, partially offset by a decrease in ARPU. Our Puerto Rico wireless operations had approximately 418,200 subscribers at November 30, 2007, an increase of 7% from subscribers at November 30, 2006. During the twelve months ended November 30, 2007, increases from new activations of 147,800 were offset by subscriber cancellations of 121,900. The cancellations experienced by our Puerto Rico wireless operations were primarily due to competition and non-payment.

The monthly postpaid churn rate decreased to 2.6% and 2.4% for three and six months ended November 30, 2007, respectively, from 2.8% and 2.6% for the same periods last year. The decrease in churn was primarily due to the “Unlimited Plan,” which is more appealing to subscribers than our previous offering, causing fewer cancellations by subscribers choosing competitive offerings. Our postpaid subscribers represented approximately 99% of our total Puerto Rico wireless subscribers at November 30, 2007 and November 30, 2006.

Puerto Rico wireless ARPU was $65 and $66 for the three and six months ended November 30, 2007, respectively, as compared to $68 and $67 for the three and six months ended November 30, 2006, respectively. The decrease in ARPU was primarily due to lower airtime revenue and equipment revenue per subscriber, partially offset by an increase in data revenue per subscriber.

Our subscribers used an average of 1,758 and 1,741 MOUs during the three and six months ended November 30, 2007, respectively, compared to 1,536 and 1,527 MOUs during the three and six months ended November 30, 2006, respectively. We believe the increase in MOUs is due to our unlimited rate plan which provides customers in Puerto Rico with unlimited local MOUs for a flat fee at $49.99 per month.

Equipment sales decreased during the three and six months ended November 30, 2007, as compared to the three and six months ended November 30, 2006, due primarily to market pressure to more heavily subsidize more expensive higher-end handsets to attract and retain customers.

Costs and expenses. Cost of services increased during the three and six months ended November 30, 2007 as compared to the three and six months ended November 30, 2006. The increase was primarily due to increased costs associated with a larger subscriber base, including tower site rent, maintenance contracts, and long distance costs.

Cost of equipment sold increased during the three and six months ended November 30, 2007 as compared to the same periods last year. The increase was primarily due to an increase in phone expenses associated with customer retention and acquisition as well as an increase in the cost per phone due to the sales of more expensive higher-end handsets in the three and six months ended November 30, 2007, as compared to the same periods last year.

Sales and marketing expenses increased during the three and six months ended November 30, 2007, as compared to the same periods last year. The increase was due to increases in advertising, compensation costs, and agent commissions.

General and administrative expenses increased during the three and six months ended November 30, 2007, as compared to the same periods last year. The increase was primarily due to increases in other taxes and licenses, compensation costs, and customer service costs. These increases were partially offset by a decrease in bad debt expense.

Puerto Rico Broadband Operations


	Three Months Ended										Six Months Ended
	November 30,										November 30,
	2007		2006		$ Change			% Change			2007		2006		$ Change			% Change
	(In thousands)

Revenue:
Switched revenue	$	13,777	$	13,601	$	176			1	%	$	27,379	$	27,436	$	(57	)		0	%
Dedicated revenue		17,527		15,353		2,174			14			33,801		29,805		3,996			13
Other revenue		1,702		2,877		(1,175	)		(41	)		3,830		4,901		(1,071	)		(22	)

Total revenue		33,006		31,831		1,175			4			65,010		62,142		2,868			5

Costs and expenses:
Cost of services		8,278		7,224		1,054			15			15,877		14,201		1,676			12
Cost of equipment sold		244		54		190			*			309		103		206			*
Sales and marketing		1,736		1,716		20			1			3,161		3,285		(124	)		(4	)
General and administrative		5,332		4,900		432			9			10,042		9,767		275			3

Total costs and expenses		15,590		13,894		1,696			12			29,389		27,356		2,033			7

Adjusted operating income(1)	$	17,416	$	17,937	$	(521	)		(3	)%	$	35,621	$	34,786	$	835			2	%


*		Percentage not meaningful

(1)		Adjusted operating income represents the profitability measure of the segment — see Note 9 to the unaudited condensed consolidated financial statements for a reconciliation of consolidated adjusted operating income to the appropriate GAAP measure.

Revenue. Total Puerto Rico broadband revenue increased for the three and six months ended November 30, 2007, as compared to the three and six months ended November 30, 2006. This increase was primarily due to a 19% increase in total access lines and equivalents to 460,700, partially offset by a decrease in recurring revenue per line and lower intercarrier compensation revenue due to a favorable adjustment in the three months ended November 30, 2006.

Switched revenue increased for the three months ended November 30, 2007 and decreased for the six months ended November 30, 2007 as compared to the same periods last year. The increase in the three months ended November 30, 2007 was primarily due to a 20% increase in switched access lines to 85,900 as of November 30, 2007, partially offset by a decrease in recurring revenue per line. The decrease in the six months ended November 30, 2007 relates to a lower recurring revenue per line partially offset by an increase in switched access lines. The increase in switched access lines has primarily come from VOIP lines added through our agreements with certain cable television operators in Puerto Rico.

Dedicated revenue increased for the three and six months ended November 30, 2007, as compared to the same periods last year. The increase was primarily the result of a 19% increase in voice grade equivalent dedicated lines to 374,800 as of November 30, 2007, partially offset by a decrease in recurring revenue per line.

Other revenue decreased for the three and six months ended November 30, 2007, as compared to the same periods last year. The decrease was primarily due to a decrease in revenue resulting from installation and new construction and intercarrier compensation revenue partially due to a favorable adjustment in the three months ended November 30, 2006.

Costs and expenses. Cost of services increased during the three and six months ended November 30, 2007, as compared to the same periods last year. The increase primarily related to increases in telephone service and network costs due to access line growth and to expenses for the deployment of network capacity in consideration of customer contracts for future service.

General and administrative expenses increased during the three and six months ended November 30, 2007, as compared to the same periods the prior year. The increase was primarily due to increases in bad debt expense and other taxes and licenses.

LIQUIDITY AND CAPITAL RESOURCES

Weighted Average Debt Outstanding and Interest Expense


	Three Months Ended									Six Months Ended
	November 30,									November 30,
	2007			2006			Change			2007			2006			Change
	(In millions)

Weighted Average Debt Outstanding	$	2,020.26		$	2,138.26		$	(118.00	)	$	2,033.62		$	2,136.83		$	(103.21	)
Weighted Average Gross Interest Rate(1)		9.7	%		9.9	%		(0.2	)%		9.7	%		9.8	%		(0.1	)%
Weighted Average Gross Interest Rate(2)		9.2	%		9.4	%		(0.2	)%		9.3	%		9.3	%		—
Gross Interest Expense(1)	$	48.87		$	52.68		$	(3.81	)	$	98.61		$	104.43		$	(5.82	)
Interest Income	$	1.06		$	0.99		$	0.07		$	2.22		$	2.03		$	0.19

Net Interest Expense	$	47.81		$	51.69		$	(3.88	)	$	96.39		$	102.40		$	(6.01	)


(1)		Including amortization of debt issuance costs of $2.3 million and $4.3 million for the three and six months ended November 30, 2007, respectively and $2.3 million and $4.6 million for the three and six months ended November 30, 2006, respectively.

(2)		Excluding amortization of debt issuance costs of $2.3 million and $4.3 million for the three and six months ended November 30, 2007, respectively and $2.3 million and $4.6 million for the three and six months ended November 30, 2006, respectively.

The $3.9 million and $6.0 million decrease in net interest expense for the three and six months ended November 30, 2007, respectively, as compared to the three and six months ended November 30, 2006, resulted primarily from lower weighted average debt outstanding.

At November 30, 2007, we had total liquidity of $223.0 million, consisting of cash and cash equivalents totaling $73.0 million and approximately $150 million available under our revolving credit facility. Additionally, at November 30, 2007, we had restricted cash of $6.2 million, which is held in escrow as the result of a reciprocal escrow agreement with one of our customers.

Senior Secured Credit Facility

On February 9, 2004, our wholly-owned subsidiaries, Centennial Cellular Operating Co. LLC (“CCOC”) and Centennial Puerto Rico Operations Corp. (“CPROC”), as co-borrowers, entered into a $750.0 million senior secured credit facility (the “Senior Secured Credit Facility”). We and each of our direct and indirect domestic subsidiaries, including CCOC and CPROC, are guarantors under the Senior Secured Credit Facility. The Senior Secured Credit Facility consists of a seven-year term loan, maturing in February 2011, with an original aggregate principal amount of $600.0 million, of which $550.0 million remained outstanding at November 30, 2007. The Senior Secured Credit Facility requires amortization payments in an aggregate principal amount of $550.0 million in two equal installments of $275.0 million in August 2010 and February 2011. The Senior Secured Credit Facility also includes a six-year revolving credit facility, maturing in February 2010, with an aggregate principal amount of up to $150.0 million. At November 30, 2007, approximately $150.0 million was available under the revolving credit facility.

On February 5, 2007, we amended our Senior Secured Credit Facility to, among other things, lower the interest rate on term loan borrowings by 0.25% through a reduction in the London Inter-Bank Offering Rate (“LIBOR”) spread from 2.25% to 2.00%. Under the terms of the Senior Secured Credit Facility, as amended, term and revolving loan borrowings bear interest at LIBOR (a weighted average rate of 5.20% as of November 30, 2007) plus 2.00%

and LIBOR plus 3.25%, respectively. Our obligations under the Senior Secured Credit Facility are collateralized by liens on substantially all of our assets.

High-Yield Notes

On December 21, 2005 we issued $550.0 million in aggregate principal amount of senior notes due 2013 (the “2013 Holdco Notes”). The 2013 Holdco Notes were issued in two series consisting of (i) $350.0 million of floating rate notes that bear interest at three-month LIBOR (5.23% as of November 30, 2007) plus 5.75% and mature in January 2013 (the “2013 Holdco Floating Rate Notes”) and (ii) $200.0 million of fixed rate notes that bear interest at 10% and mature in January 2013 (the “2013 Holdco Fixed Rate Notes”). The 2013 Holdco Floating Rate Notes were issued at a 1% discount and we received net proceeds of $346.5 million. We used the net proceeds from the offering, together with a portion of our available cash, to pay a special cash dividend of $5.52 per share to our common stockholders and prepay $39.5 million of term loans under the Senior Secured Credit Facility. In connection with the completion of the 2013 Holdco Notes offering, we amended our Senior Secured Credit Facility to permit, among other things, the issuance of the 2013 Holdco Notes and payment of the special cash dividend. Additionally, we capitalized $15.4 million of debt issuance costs in connection with the issuance of the 2013 Holdco Notes.

On February 9, 2004, concurrent with our entering into the Senior Secured Credit Facility, we and our wholly-owned subsidiaries, CCOC and CPROC, as co-issuers, issued $325.0 million aggregate principal amount of 8 1 / 8 % senior unsecured notes due 2014 (the “2014 Senior Notes”). We used the net proceeds from the 2014 Senior Notes offering to refinance outstanding indebtedness.

On June 20, 2003, we and CCOC, as co-issuers, issued $500.0 million aggregate principal amount of 10 1 / 8 % senior unsecured notes due 2013 (the “2013 Senior Notes”). CPROC is a guarantor of the 2013 Senior Notes.

In December 1998, we and CCOC issued $370.0 million of 2008 Senior Subordinated Notes. An affiliate of Welsh, Carson, Anderson & Stowe (“Welsh Carson”) owned approximately $189.0 million principal amount of the 2008 Senior Subordinated Notes. CPROC is a guarantor of the 2008 Senior Subordinated Notes. As of November 30, 2007, we had repurchased or redeemed all such notes.

Derivative Financial Instruments

On December 22, 2005 we entered into an interest rate swap agreement (the “CCOC Swap”) through our wholly-owned subsidiary, CCOC, to hedge variable interest rate risk on $200.0 million of variable interest rate term loans under the Senior Secured Credit Facility. The CCOC Swap became effective March 31, 2006, and expired on December 31, 2007. The fixed interest rate on the CCOC Swap was 6.84%. On May 1, 2007, we entered into an interest rate collar agreement (the “May 2007 CCOC Collar”), through our wholly-owned subsidiary, CCOC, to hedge variable interest rate risk on $200.0 million of our variable interest rate term loans under the Senior Secured Credit Facility. The May 2007 CCOC Collar became effective December 31, 2007, the date that the original CCOC Swap expired, and expires December 31, 2008. The May 2007 CCOC collar has a fixed interest rate floor of 4.24% and a fixed interest rate cap of 5.35%.

On March 10, 2006, we, through our wholly owned subsidiary, CPROC, entered into an agreement to hedge variable interest rate risk on $250.0 million of variable interest rate term loans for one year (the “2007 CPROC Swap”). The 2007 CPROC Swap became effective March 30, 2007 and will expire on March 31, 2008. The fixed interest rate on the 2007 CPROC Swap is 7.13%. On September 18, 2007, we, through our wholly owned subsidiary, CPROC, entered into an additional agreement to hedge variable interest rate risk on $250.0 million of our $550.0 million of variable interest rate term loans under the Senior Secured Credit Facility for six months (the “2008 CPROC Swap”). The 2008 CPROC Swap will become effective March 31, 2008, the date that the 2007 CPROC Swap expires, and expire on September 30, 2008, and has a fixed interest rate of 6.45%.

On October 31, 2006, we entered into an interest rate collar agreement (the “CPROC Collar”), through our wholly-owned subsidiary, CPROC, to hedge variable interest rate risk on $35.5 million of our variable interest rate term loans under the Senior Secured Credit Facility. The CPROC Collar became effective as of December 29, 2006

and expires June 30, 2008. The CPROC Collar has a fixed interest rate floor of 4.66% and a fixed interest rate cap of 5.50%.

On October 31, 2006, we entered into an interest rate collar agreement (the “CCOC Collar”), through our wholly-owned subsidiary, CCOC, to hedge variable interest rate risk on $25.0 million of our variable interest rate term loans under the Senior Secured Credit Facility. The CCOC Collar became effective as of December 29, 2006 and expires June 30, 2008. The CCOC Collar has a fixed interest rate floor of 4.66% and a fixed interest rate cap of 5.50%.

On April 12, 2007, we entered into an interest rate collar agreement (the “April 2007 CCOC Collar”), through our wholly-owned subsidiary, CCOC, to hedge variable interest rate risk on $39.5 million of our variable interest rate term loans under the Senior Secured Credit Facility. The April 2007 CCOC Collar became effective as of May 31, 2007 and expires May 31, 2008. The April 2007 CCOC Collar has a fixed interest rate floor of 4.95% and a fixed interest rate cap of 5.40%.

On October 31, 2007, we entered into an agreement to hedge variable interest rate risk on $200.0 million of our $350.0 million of variable interest rate 2013 Holdco Floating Rate Notes for six months (the “Holdco Swap”). The Holdco Swap became effective December 31, 2007 and will expire on June 30, 2008, and has an all-in fixed interest rate of 10.46%.

At November 30, 2007, $750.0 million of our $900.0 million of variable debt was hedged by interest rate swaps or collars described above. All our swaps and collars have been designated as cash flow hedges.

At November 30, 2007, the fair value of our swaps and collars was approximately $(2.1) million. We recorded a liability, which is included in other liabilities in the condensed consolidated balance sheet, for the fair value of the swaps and collars. For the six months ended November 30, 2007, we recorded $1.1 million, net of tax, in accumulated other comprehensive loss attributable to the fair value adjustments of the swaps and collars.

Under certain of the agreements relating to our long-term debt, we are required to maintain certain financial and operating covenants, and are limited in our ability to, among other things, incur additional indebtedness and enter into transactions with affiliates. Under certain circumstances, we are prohibited from paying cash dividends on our common stock under certain of such agreements. We were in compliance with all covenants of our debt agreements at November 30, 2007.

For the three and six months ended November 30, 2007, the ratio of earnings to fixed charges was 1.12 and 1.20, respectively. Fixed charges consist of interest expense, including amortization of debt issuance costs, loss on extinguishment of debt, and the portion of rents deemed representative of the interest portion of leases.

At November 30, 2007, we had no off-balance sheet obligations.

Our capital expenditures for the three and six months ended November 30, 2007 were as follows:


	Three Months Ended		% of Total Capital			Six Months Ended		% of Total Capital
	November 30, 2007		Expenditures			November 30, 2007		Expenditures
	(Amounts in thousands)

U.S. Wireless	$	11,767		46.3	%	$	18,818		41.4	%
Puerto Rico Wireless		9,285		36.5			16,758		36.9
Puerto Rico Broadband		4,374		17.2			9,846		21.7

Total capital expenditures	$	25,426		100.0	%	$	45,422		100.0	%

Capitalized phones in Puerto Rico (included above in Puerto Rico Wireless)	$	4,896				$	11,134
Property, plant and equipment, net at November 30, 2007	$	575,316				$	575,316

Capital expenditures for our U.S. wireless operations were used to expand our coverage areas and upgrade our cell sites and call switching equipment of existing wireless properties. In Puerto Rico, these investments were used

to add capacity and services, to continue the development and expansion of our Puerto Rico wireless systems, expand the EV-DO network, and to continue the expansion of our Puerto Rico Broadband network infrastructure.

In our Puerto Rico wireless operations, we sell or loan phones to our customers. When we sell a phone to a customer, the cost of the phone sold is charged to cost of equipment sold, whereas the cost of a phone which is loaned to a customer is recorded as an asset within property, plant and equipment and is charged to depreciation expense over the life of the phone.

We expect to finance our capital expenditures primarily from cash flow generated from operations, borrowings under our existing credit facilities and proceeds from the sale of assets. We may also seek various other sources of external financing, including additional bank financing, joint ventures, partnerships and issuance of debt or equity securities.

To meet our obligations with respect to our operating needs, capital expenditures and debt service obligations, it is important that we continue to improve operating cash flow. Increases in revenue will be dependent upon, among other things, continued growth in the number of customers and maximizing revenue per subscriber. We have continued the construction and upgrade of wireless and broadband systems in our markets to achieve these objectives. There is no assurance that growth in customers or revenue will occur.

Based upon existing market conditions and our present capital structure, we believe that cash flows from operations and funds from currently available credit facilities will be sufficient to enable us to meet required cash commitments through the next twelve-month period.

Centennial, its subsidiaries, affiliates and significant stockholders (including Welsh Carson and its affiliates) may from time to time, depending upon market conditions, seek to purchase certain of Centennial’s or its subsidiaries’ securities in the open market or by other means, in each case to the extent permitted by existing covenant restrictions.

ACQUISITIONS AND DISPOSITIONS

Our primary acquisition strategy is to obtain controlling ownership interests in communications systems serving markets that are proximate to or share a community of interest with our current markets. We may pursue acquisitions of communications businesses that we believe will enhance our scope and scale. Our strategy of clustering our operations in proximate geographic areas enables us to achieve operating and cost efficiencies, as well as joint marketing benefits, and also allows us to offer our subscribers more areas of uninterrupted service as they travel. In addition to expanding our existing clusters, we also may seek to acquire interests in communications businesses in other geographic areas. The consideration for such acquisitions may consist of shares of stock, cash, assumption of liabilities, a combination thereof or other forms of consideration.

On September 18, 2007, we completed the purchase of Islanet Communications (“Islanet”), a provider of data and voice communications to business and residential customers in Puerto Rico, for $15 million.

On October 23, 2007, we acquired 1900 MHz (PCS) wireless spectrum covering approximately 400,000 Pops in Lima and Findlay-Tiffin, Ohio, markets contiguous to the Company’s existing footprint in Ft. Wayne, Indiana, for $3.6 million.

COMMITMENTS AND CONTINGENCIES

In June 2004, we signed an amendment to our billing services agreement with Convergys Information Management Group, Inc. (“Convergys”). The agreement has a term of seven years and Convergys agreed to provide billing services, facilitate network fault detection, correction and management performance and usage monitoring and security for our wireless operations throughout the Company. Subject to the terms of the agreement, which include a requirement to meet certain performance standards, we have committed to purchase a total of approximately $74.6 million of services through 2011 under this agreement. These commitments are classified as purchase obligations in the Contractual Obligations table below. As of November 30, 2007, we have paid approximately $38.2 million in connection with this agreement.

We have filed a shelf registration statement with the SEC for the sale of up to 72,000,000 shares of our common stock that may be offered from time to time in connection with acquisitions. The SEC declared the registration statement effective on July 14, 1994. As of November 30, 2007, 37,613,079 shares remain available for issuance under the shelf.

On July 7, 2000, the SEC declared effective our universal shelf registration statement, which registered our sale of up to an aggregate of $750.0 million of securities (debt, common stock, preferred stock and warrants). As of November 30, 2007, we have sold $38.5 million of securities under the shelf. In addition, we have registered under separate shelf registration statements an aggregate of approximately 43,000,000 shares of our common stock for resale by affiliates of Welsh Carson.

The following table summarizes our scheduled contractual cash obligations and commercial commitments at November 30, 2007 (unless otherwise noted), and the effect that such obligations are expected to have on liquidity and cash flow in future periods.


				Less than			1-3			3-5			After
Contractual Obligations	Total			1 Year			Years			Years			5 Years

Long-term debt obligations (net of unamortized discount)	$	2,005,049		$	—		$	274,626		$	275,520		$	1,454,903
Interest on long-term debt obligations(1)		879,904			157,368			327,029			272,814			122,693
Operating lease obligations		248,718			30,696			53,181			37,347			127,494
Capital lease obligations		190,123			6,090			12,803			13,430			157,800
Purchase obligations		43,758			10,582			21,879			11,297			—

Total contractual cash obligations		3,367,552			204,736			689,518			610,408			1,862,890
Sublessor agreements		(3,950	)		(1,293	)		(1,902	)		(745	)		(10	)

Net	$	3,363,602		$	203,443		$	687,616		$	609,663		$	1,862,880


(1)		Interest payments are based on the Company’s projected interest rates and estimated principle amounts outstanding for the periods presented.

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR”

PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Statements in this report that are not historical facts are hereby identified as “forward-looking statements.” Where, in any forward-looking statement, we or our management expresses an expectation or belief as to future results or actions, there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished. Our actual results may differ materially from our expectations, plans or projections. Forward-looking statements can be identified by the use of the words “believe,” “expect,” “predict,” “estimate,” “anticipate,” “project,” “intend,” “may,” “will” and similar expressions, or by discussion of competitive strengths or strategy that involve risks and uncertainties. We warn you that these forward-looking statements are only predictions and estimates, which are inherently subject to risks and uncertainties.

Important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, us include, but are not limited to:


	•	the effects of vigorous competition in our markets, which may make it difficult for us to attract and retain customers and to grow our customer base and revenue and which may increase churn, which could reduce our revenue and increase our costs;

	•	the fact that many of our competitors are larger than we are, have greater financial resources than we do, are less leveraged than we are, have more extensive coverage areas than we do, and may offer less expensive and more technologically advanced products and services than we do;

	•	changes and developments in technology, including our ability to upgrade our networks to remain competitive and our ability to anticipate and react to frequent and significant technological changes which may render certain technologies used by us obsolete;

	•	our substantial debt obligations, including restrictive covenants, which place limitations on how we conduct business;

	•	market prices for the products and services we offer may decline in the future;

	•	the effect of changes in the level of support provided to us by the Universal Service Fund;

	•	the effects of a decline in the market for our Code Division Multiple Access-based technology;

	•	the effects of consolidation in the telecommunications industry;

	•	general economic, business, political and social conditions in the areas in which we operate, including the effects of world events, terrorism, hurricanes, tornadoes, wind storms and other natural disasters;

	•	our access to the latest technology handsets in a timeframe and at a cost similar to our competitors;

	•	our ability to successfully deploy and deliver wireless data services to our customers, including next generation 3G and 4G technology;

	•	our ability to generate cash and the availability and cost of additional capital to fund our operations and our significant planned capital expenditures, including the need to refinance or amend existing indebtedness;

	•	our dependence on roaming agreements for a significant portion of our wireless revenue and the expected decline in roaming revenue over the long term;

	•	our dependence on roaming agreements for our ability to offer our wireless customers competitively priced regional and nationwide rate plans that include areas for which we do not own wireless licenses;

	•	our ability to attract and retain qualified personnel;

	•	the effects of governmental regulation of the telecommunications industry;


	•	our ability to acquire, and the cost of acquiring, additional spectrum in our markets to support growth and advanced technologies;

	•	the effects of network disruptions and system failures;

	•	our ability to manage, implement and monitor billing and operational support systems;

	•	the results of litigation filed or which may be filed against us, including litigation relating to wireless billing, using wireless telephones while operating an automobile or possible health effects of radio frequency transmission;

	•	the relative liquidity and corresponding volatility of our common stock and our ability to raise future equity capital; and

	•	the influence on us by our significant stockholder and anti-takeover provisions.

We undertake no obligation, other than as may be required under the federal securities laws, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We do not assume responsibility for the accuracy and completeness of the forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, any or all of the forward-looking statements contained in this report and in any other public statements that are made may prove to be incorrect. This may occur as a result of inaccurate assumptions as a consequence of known or unknown risks and uncertainties. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under Item 1A, “Risk Factors”, of our 2007 Annual Report on Form 10-K filed on August 9, 2007. We caution that these risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. We cannot predict these new risk factors, nor can we assess the impact, if any, of the new risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those expressed or implied by any forward-looking statement. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur. You should carefully read this report in its entirety. It contains information that you should consider in making any investment decision in any of our securities.


ITEM 3.	*QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK*

Financial derivatives are used as part of the overall risk management strategy. These instruments are used to manage risk related to changes in interest rates. The portfolio of derivative financial instruments has consisted of interest rate swap and collar agreements. Interest rate swap agreements were used to modify variable rate obligations to fixed rate obligations, thereby reducing the exposure to higher interest rates. Interest rate collar agreements were used to lock in a maximum rate if interest rates rise, but allow us to otherwise pay lower market rates, subject to a floor. We formally document all relationships between hedging instruments and hedged items and the risk management objective and strategy for each hedge transaction. Amounts paid or received under interest rate swap and collar agreements were accrued as interest rates change with the offset recorded in interest expense. All of our derivative transactions are entered into for non-trading purposes.

We are subject to market risks due to fluctuations in interest rates. Approximately $900.0 million of our long-term debt has variable interest rates. We utilize interest rate swap and collar agreements to hedge variable interest rate risk on $750.0 million of our $900.0 million variable interest rate debt as part of our interest rate risk management program.

The table below presents principal amounts and related average interest rate by year of maturity for our long-term debt. Weighted average variable rates are based on implied forward rates in the yield curve as of November 30, 2007:


	Fiscal Year Ended November 30,
	2008			2009			2010			2011			2012			Thereafter			Total			Fair Value
	(In thousands)

Long-term debt:
Fixed rate	$	—		$	—		$	(374	)	$	153		$	367		$	1,107,439		$	1,107,585		$	1,135,710
Average fixed Interest rate		0.0	%		10.0	%		10.0	%		10.0	%		10.0	%		9.5	%		9.5	%		—
Variable rate	$	—		$	—		$	275,000		$	275,000		$	—		$	350,000		$	900,000		$	907,000
Average variable Interest rate(1)		3.2	%		4.0	%		4.4	%		4.7	%		5.0	%		5.0	%		4.7	%		—
Interest rate swap (pay fixed, receive variable):
Notional amount	$	650,000																				$	(1,011	)
Average pay rate		7.71	%
Average receive rate		5.25	%
Interest rate collar:
Notional amount	$	300,000																				$	(1,048	)
Cap (Highest)		5.50	%
Floor (Lowest)		4.66	%


(1)		Represents the average interest rate before applicable margin on the Senior Secured Credit Facility debt.

Our primary interest rate risk results from changes in LIBOR, which is used to determine the interest rates applicable on our variable rate debt under our Senior Secured Credit Facility and our 2013 Holdco Floating Rate Notes. We have variable rate debt that at both November 30, 2007 and 2006 had outstanding balances of $900.0 million. The fair value of such debt approximates the carrying value at November 30, 2007 and 2006. Of the variable rate debt, as of November 30, 2007, $750.0 million is hedged using interest rate collar and swap agreements that expire at various dates through December 2008. These swaps and collars are designated as cash flow hedges. Based on our unhedged variable rate obligations outstanding at November 30, 2007, a hypothetical increase or decrease of 10% in the weighted average variable interest rate would have increased or decreased our annual interest expense by approximately $2.4 million.


ITEM 4.	*CONTROLS AND PROCEDURES*

We carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of November 30, 2007.

There was no change in our internal control over financial reporting during the quarter ended November 30, 2007 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION


ITEM 1.	*LEGAL PROCEEDINGS*

In March 2007, a shareholder derivative action was filed in Delaware Chancery Court by DD Equity Trading Co. against each of the members of our board of directors, certain stockholders (affiliates of Welsh, Carson, Anderson & Stowe and The Blackstone Group) (collectively, the “Defendants”) and the Company, as a nominal defendant. The suit alleged, among other things, breach of fiduciary duty in connection with a recapitalization transaction consummated in January 2006 pursuant to which we issued $550 million of senior notes due 2013 and used the proceeds to, among other things, pay a special cash dividend of $5.52 per share to its common stockholders. The suit also alleged that the stockholder defendants were unjustly enriched by the payment of the dividend to our detriment because, among other things, of the increase in our debt caused by the recapitalization. The suit also alleged waste of corporate assets in connection with certain monitoring fees paid to the stockholder defendants. The complaint sought damages against the defendants for our benefit, as well as attorney’s fees and costs and other relief as may be just and proper. The Defendants filed a motion to dismiss the lawsuit. Prior to oral argument on the motion to dismiss, on November 1, 2007 the Plaintiff voluntarily dismissed the action against all defendants.

We are party to several lawsuits in which plaintiffs have alleged, depending on the case, breach of contract, misrepresentation or unfair practice claims relating to our billing practices, including rounding up of partial minutes of use to full-minute increments, billing send to end, and billing for unanswered and dropped calls. The plaintiffs in these cases have not alleged any specific monetary damages and are seeking certification as a class action. One of these actions was recently dismissed after a long period of non-prosecution by the plaintiff. A hearing on class certification in another one of these cases was held on September 2, 2003 in a state court in Louisiana. Subsequent to such hearing, a new judge was assigned to the case and the plaintiffs renewed their motion seeking class action status. The decision of the court with respect to class certification is still pending. All activity in such case has been effectively stayed as a result of the parties recently entering into a proposed settlement. On October 19, 2007, the court granted preliminary approval of the proposed settlement and scheduled a hearing to consider final approval of the settlement for April 2008. The settlement provides for the certification of a class consisting of all of our current and former customers. In general, under the terms of the settlement, class members may elect to receive a settlement benefit consisting of one of the following: (i) additional minutes of our airtime, (ii) a service credit on their wireless telephone bill in exchange for extending their wireless contract, (iii) a discount on certain accessories or (iv) a pre-paid long distance calling card. In connection with the settlement, we have recorded a charge of $2.95 million, included in general and administrative expense on the Consolidated Statement of Operations for the three and six months ended November 30, 2007, to cover all expected costs of the settlement.

In 2001, our previously sold Dominican Republic subsidiary, All American Cables and Radio Inc. (“Centennial Dominicana”), commenced litigation against International Telcom, Inc. (“ITI”) to collect an approximate $1.8 million receivable owing under a traffic termination agreement between the parties relating to international long distance traffic terminated by Centennial Dominicana in the Dominican Republic. Subsequently, ITI counterclaimed against Centennial Dominicana claiming that Centennial Dominicana breached the traffic termination agreement and is claiming damages in excess of $20.0 million. The matter is subject to arbitration in Miami, Florida and a decision of the arbitration panel is expected in the next twelve months. In connection with the sale of Centennial Dominicana, we have agreed to indemnify Trilogy International Partners with respect to liabilities arising as a result of the ITI litigation. We do not believe that any damage payments by us would have a material adverse effect on our consolidated results of operations, consolidated financial position or consolidated cash flows.

We are subject to other claims and legal actions that arise in the ordinary course of business. We do not believe that any of these other pending claims or legal actions will have a material adverse effect on our consolidated results of operations, consolidated financial position or consolidated cash flows.


ITEM 1A.	*RISK FACTORS*

See “Risk Factors” in Part 1 — Item 1A in our Annual Report on Form 10-K for the year ended May 31, 2007 for information on risk factors. There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended May 31, 2007.


ITEM 2.	*UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS*

None


ITEM 3.	*DEFAULTS UPON SENIOR SECURITIES*

None


ITEM 4.	*SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*

a) The Company’s annual meeting of stockholders was held on September 27, 2007.

b) The following persons were elected as directors at the Company’s annual meeting pursuant to the following votes:


	Number of Votes
Directors	For		Withhold

Darren C. Battistoni		97,781,049		1,583,368
Anthony J. de Nicola		92,256,195		7,108,222
Thomas E. McInerney		91,647,071		7,717,346
James P. Pellow		97,519,051		1,845,366
Raymond A. Ranelli		97,962,954		1,401,463
Robert D. Reid		96,227,980		3,136,437
Scott N. Schneider		97,084,785		2,279,632
Michael J. Small		97,786,049		1,578,368
J. Stephen Vanderwoude		97,858,956		1,505,461

c) The stockholders approved a proposal at the annual meeting to amend the Company’s 1999 Stock Option and Restricted Stock Purchase Plan to increase the number of shares issuable thereunder by 3,000,000 shares. The following sets forth the number of votes on this proposal:


For		Against		Abstain

	74,407,817		11,246,037		156,706

d) The stockholders approved a proposal at the annual meeting to ratify the appointment of Deloitte & Touche LLP as independent auditors for the Company for the fiscal year ending May 31, 2008. The following sets forth the number of votes on this proposal:


For		Against		Abstain

	99,190,806		27,437		146,173


ITEM 5.	*OTHER INFORMATION*

None


ITEM 6.	*EXHIBITS*

Each exhibit identified below is filed as a part of this report.


Exhibit
No.			Description

	31	.1	Certification of Michael J. Small, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Thomas J. Fitzpatrick, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1	Certification of Michael J. Small, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	Certification of Thomas J. Fitzpatrick, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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

January 8, 2008

CENTENNIAL COMMUNICATIONS CORP.


		/s/ Thomas J. Fitzpatrick

Thomas J. Fitzpatrick

Executive Vice President,

Chief Financial Officer

(Chief Financial Officer)


		/s/ Francis P. Hunt

Francis P. Hunt

Senior Vice President — Controller

(Chief Accounting Officer)

Exhibit 31.1

CERTIFICATION

I, Michael J. Small, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Centennial Communications Corp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 8, 2008


		/s/ Michael J. Small

Name: Michael J. Small


	Title:	Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Thomas J. Fitzpatrick, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Centennial Communications Corp;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 8, 2008


		/s/ Thomas J. Fitzpatrick

Name: Thomas J. Fitzpatrick


	Title:	Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Centennial Communications Corp. (the “Company”) for the quarter ended November 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 8, 2008


		/s/ Michael J. Small

Michael J. Small

Chief Executive Officer and Director

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 8, 2008


		/s/ Thomas J. Fitzpatrick

Thomas J. Fitzpatrick

Executive Vice President,

Chief Financial Officer