<PAGE>




--------------------------------------------------------------------------------

ALAMOSA (DELAWARE), INC.


INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                                        <C>
Report of Independent Auditors ........................................................... F-2
Consolidated Balance Sheets as of December 31, 2002 and December 31, 2001 ................ F-3
Consolidated Statements of Operations for the years ended December 31, 2002, 2001 and
  2000 ................................................................................... F-4
Consolidated Statements of Stockholder's Equity for the period from December 31, 1999 to
 December 31, 2002 ....................................................................... F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and
  2000 ................................................................................... F-6
Notes to Consolidated Financial Statements ............................................... F-7
Report of Independent Auditors on Financial Statement Schedule ........................... F-44
Consolidated Valuation and Qualifying Accounts ........................................... F-45
</TABLE>



--------------------------------------------------------------------------------
                                                                             F-1
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholder of Alamosa (Delaware), Inc.:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholder's equity and cash flows
present fairly, in all material respects, the financial position of Alamosa
(Delaware), Inc. and its subsidiaries at December 31, 2002 and 2001, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

As discussed in Note 3 to the consolidated financial statements, the Company
has changed its method of accounting for goodwill and other intangible assets
as a result of adopting SFAS No. 142 as of January 1, 2002.


PricewaterhouseCoopers LLP

Dallas, Texas
February 21, 2003, except for Note 20, which is as of September 3, 2003 and
Note 21, which is as of December 29, 2003

--------------------------------------------------------------------------------
F-2
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                   -----------------------------
                                                                        2002            2001
                                                                   -------------   -------------
<S>                                                                <C>             <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents .....................................    $   60,525      $  104,672
 Short term investments ........................................            --           1,300
 Restricted cash ...............................................        34,725          51,687
 Customer accounts receivable, net .............................        27,926          38,717
 Receivable from Sprint ........................................        30,322          13,160
 Interest receivable ...........................................           973           2,393
 Inventory .....................................................         7,410           4,802
 Prepaid expenses and other assets .............................         7,239           4,749
 Deferred customer acquisition costs ...........................         7,312           5,181
 Deferred tax asset ............................................         5,988           8,112
                                                                    ----------      ----------
   Total current assets ........................................       182,420         234,773
 Property and equipment, net ...................................       458,946         455,695
 Debt issuance costs, net ......................................        33,351          36,654
 Restricted cash ...............................................            --          43,006
 Goodwill ......................................................            --         293,353
 Intangible assets, net ........................................       488,421         528,840
 Other noncurrent assets .......................................         7,802           6,087
                                                                    ----------      ----------
   TOTAL ASSETS ................................................    $1,170,940      $1,598,408
                                                                    ==========      ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
 Accounts payable ..............................................    $   27,203      $   44,012
 Accrued expenses ..............................................        34,903          29,291
 Payable to Sprint .............................................        24,649          16,133
 Interest payable ..............................................        22,242          22,123
 Deferred revenue ..............................................        18,901          15,479
 Current installments of capital leases ........................         1,064             596
                                                                    ----------      ----------
   Total current liabilities ...................................       128,962         127,634
                                                                    ----------      ----------
LONG TERM LIABILITIES
 Capital lease obligations .....................................         1,355           1,983
 Other noncurrent liabilities ..................................        10,641           7,496
 Deferred tax liability ........................................        27,694          98,940
 Senior secured debt ...........................................       200,000         187,162
 12 7/8% senior discount notes .................................       268,862         237,207
 12 1/2% senior notes ..........................................       250,000         250,000
 13 5/8% senior notes ..........................................       150,000         150,000
                                                                    ----------      ----------
   Total long term liabilities .................................       908,552         932,788
                                                                    ----------      ----------
   TOTAL LIABILITIES ...........................................     1,037,514       1,060,422
                                                                    ----------      ----------
COMMITMENTS AND CONTINGENCIES (SEE NOTE 17)
STOCKHOLDER'S EQUITY:
 Preferred stock, $.01 par value; 1,000 shares authorized; no
   shares issued ...............................................            --              --
 Common stock, $.01 par value; 9,000 shares authorized, 100
   and 100 shares issued and outstanding, respectively .........            --              --
 Additional paid-in capital ....................................       799,403         800,293
 Accumulated deficit ...........................................      (664,133)       (261,371)
 Unearned compensation .........................................          (294)             --
 Accumulated other comprehensive income, net of tax ............        (1,550)           (936)
                                                                    ----------      ----------
   Total stockholder's equity ..................................       133,426         537,986
                                                                    ----------      ----------
   TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ..................    $1,170,940      $1,598,408
                                                                    ==========      ==========
</TABLE>

               THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
                       CONSOLIDATED FINANCIAL STATEMENTS.

--------------------------------------------------------------------------------
                                                                             F-3
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                                  --------------------------------------------
                                                                       2002            2001           2000
                                                                  -------------   -------------   ------------
<S>                                                               <C>             <C>             <C>
Revenues:
 Subscriber revenues ..........................................    $  391,927      $  231,145      $  56,154
 Roaming revenues .............................................       139,843          99,213         17,346
                                                                   ----------      ----------      ---------
 Service revenues .............................................       531,770         330,358         73,500
 Product sales ................................................        23,922          26,781          9,201
                                                                   ----------      ----------      ---------
   Total revenue ..............................................       555,692         357,139         82,701
                                                                   ----------      ----------      ---------
Costs and expenses:
 Cost of service and operation (excluding non-cash
   compensation of $4, $0 and $836 for 2002, 2001 and 2000,
   respectively) ..............................................       343,468         237,843         55,701
 Cost of products sold ........................................        50,974          53,911         20,524
 Selling and marketing (excluding non-cash of $4, $0 and $0 for
   2002, 2001 and 2000, respectively) .........................       119,059         110,052         45,407
 General and administrative expenses (excluding non-cash
   compensation of $21, ($916), and $4,815 for 2002, 2001 and
   2000, respectively) ........................................        14,656          13,853          9,538
 Depreciation and amortization ................................       105,121          94,722         12,530
 Terminated merger and acquisition costs ......................            --              --          2,247
 Impairment of goodwill .......................................       291,635              --             --
 Impairment of property and equipment .........................         1,194              --             --
 Non-cash compensation ........................................            29            (916)         5,651
                                                                   ----------      ----------      ---------
   Total costs and expenses ...................................       926,136         509,465        151,598
                                                                   ----------      ----------      ---------
   Loss from operations .......................................      (370,444)       (152,326)       (68,897)
 Loss on debt extinguishment ..................................            --          (5,472)            --
Interest and other income .....................................         3,459          11,664         14,483
Interest expense ..............................................      (102,863)        (81,730)       (25,775)
                                                                   ----------      ----------      ---------
 Loss before income tax benefit ...............................      (469,848)       (227,864)       (80,189)
Income tax benefit ............................................        67,086          80,441             --
                                                                   ----------      ----------      ---------
 Net loss .....................................................    $ (402,762)     $ (147,423)     $ (80,189)
                                                                   ==========      ==========      =========
</TABLE>

               THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
                       CONSOLIDATED FINANCIAL STATEMENTS.

--------------------------------------------------------------------------------
F-4
<PAGE>
ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

(Dollars in thousands, except share amounts)

FOR THE PERIOD FROM DECEMBER 31, 1999 TO DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                PREFERRED STOCK            COMMON STOCK
                                                             ---------------------- --------------------------
                                              COMPREHENSIVE
                                              INCOME (LOSS)    SHARES      AMOUNT        SHARES        AMOUNT
                                             --------------- ---------- ----------- ---------------- ---------
<S>                                          <C>             <C>        <C>         <C>              <C>
Balance December 31, 1999 ..................                       --    $      --      48,500,008    $   485
Net loss ...................................   $   (80,189)
                                               -----------
 Total comprehensive loss ..................   $   (80,189)
                                               ===========
Initial public offering ....................                                            12,321,100        123
Exercise of stock options ..................                                               538,748          5
Capital reorganization .....................                                           (61,359,756)      (613)
Amortization of unearned compensation ......
Unearned compensation ......................
                                                              -------    ---------     -----------    -------
Balance December 31, 2000 ..................                       --           --             100         --
Net loss ...................................   $  (147,423)
Net change in fair value of derivative
 instruments qualifying as cash flow
 hedges, net of tax benefit of $540 ........          (936)
                                               -----------
Total comprehensive loss ...................   $  (148,359)
                                               ===========
Capital infusion from Alamosa Holdings,
 Inc. ......................................
Amortization of unearned compensation ......
Unearned compensation ......................
                                                              -------    ---------     -----------    -------
Balance December 31, 2001 ..................                       --           --             100         --
Net loss ...................................   $  (402,762)
Net change in fair value of Derivative
 instruments qualifying as cash flow
 hedges, net of tax benefit of $376 ........          (614)
                                               -----------
  Total comprehensive loss .................   $  (403,376)
                                               ===========
Capital distribution to Alamosa
 Holdings, Inc. ............................
Unearned compensation ......................
Amortization of unearned compensation ......
                                                              -------    ---------     -----------    -------
Balance December 31, 2002 ..................                       --    $      --             100    $    --
                                                              =======    =========     ===========    =======
<CAPTION>
                                              ADDITIONAL                                ACCUMULATED OTHER
                                                PAID-IN    ACCUMULATED     UNEARNED       COMPREHENSIVE
                                                CAPITAL      DEFICIT     COMPENSATION        INCOME           TOTAL
                                             ------------ ------------- -------------- ------------------ -------------
<S>                                          <C>          <C>           <C>            <C>                <C>
Balance December 31, 1999 ..................   $ 50,825    $  (33,759)     $ (6,110)        $     --       $    11,441
Net loss ...................................                  (80,189)                                         (80,189)
 Total comprehensive loss ..................
Initial public  offering ...................    193,664                                                        193,787
Exercise of stock options ..................        703                                                            708
Capital reorganization .....................        613                                                             --
Amortization of unearned compensation ......                                  5,651                              5,651
Unearned compensation ......................        653                        (653)                                --
                                               --------    ----------      --------         --------       -----------
Balance December 31, 2000 ..................    246,458      (113,948)       (1,112)              --           131,398
Net loss ...................................                 (147,423)                                        (147,423)
Net change in fair value of derivative
 instruments qualifying as cash flow
 hedges, net of tax benefit of $540 ........                                                    (936)             (936)
Total comprehensive loss ...................
Capital infusion from Alamosa Holdings,
 Inc. ......................................    555,863                                                        555,863
Amortization of unearned compensation ......                                   (916)                              (916)
Unearned compensation ......................     (2,028)                      2,028                                 --
                                               --------    ----------      --------         --------       -----------
Balance December 31, 2001 ..................    800,293      (261,371)                          (936)          537,986
Net loss ...................................                 (402,762)                                        (402,762)
Net change in fair value of Derivative
 instruments qualifying as cash flow
 hedges, net of tax benefit of $376 ........                                                    (614)             (614)
  Total comprehensive loss .................
Capital distribution to Alamosa
 Holdings, Inc. ............................     (1,213)                                                        (1,213)
Unearned compensation ......................        323                        (323)                                --
Amortization of unearned compensation ......                                     29                                 29
                                               --------    ----------      --------         --------       -----------
Balance December 31, 2002 ..................   $799,403    $ (664,133)     $   (294)        $ (1,550)      $   133,426
                                               ========    ==========      ========         ========       ===========
</TABLE>
               THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
                       CONSOLIDATED FINANCIAL STATEMENTS.
                                                                             F-5
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                           YEAR ENDED DECEMBER 31,
                                                                                 -------------------------------------------
                                                                                      2002           2001           2000
                                                                                 -------------- -------------- -------------
<S>                                                                              <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .......................................................................   $ (402,762)    $ (147,423)   $  (80,189)
Adjustments to reconcile net loss to net cash used in operating activities:
 Non-cash compensation .........................................................           29           (916)        5,651
 Non-cash interest expense on derivative instruments ...........................          464            656            --
 Provision for bad debts .......................................................       40,285         17,490         1,107
 Depreciation and amortization of property and equipment .......................       64,702         45,963        12,530
 Amortization of goodwill and intangibles ......................................       40,419         48,759            --
 Amortization of financing costs included in interest expense ..................        4,259          3,274         1,664
 Amortization of discounted interest ...........................................          395            165            --
 Loss on debt extinguishment ...................................................           --          5,472            --
 Deferred tax benefit ..........................................................      (67,086)       (80,441)           --
 Interest accreted on discount notes ...........................................       31,655         27,927        23,052
 Impairment of property and equipment ..........................................        1,194             --            --
 Impairment of goodwill ........................................................      291,635             --            --
 Loss from asset disposition ...................................................           41            102            81
 (Increase) decrease in, net of effects from acquisitions:
  Receivables ..................................................................      (45,236)       (47,895)      (14,178)
  Inventory ....................................................................       (2,608)         1,275         3,024
  Prepaid expenses and other assets ............................................       (6,440)        (6,655)       (4,296)
 Increase in, net of effects from acquisitions:
  Accounts payable and accrued expenses ........................................       23,105         18,594        22,336
                                                                                   ----------     ----------    ----------
  NET CASH USED IN OPERATING ACTIVITIES ........................................      (25,949)      (113,653)      (29,218)
                                                                                   ----------     ----------    ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from sale of assets ..................................................          451             --            --
 Purchases of property and equipment ...........................................      (89,476)      (143,731)     (136,904)
 Change in restricted cash .....................................................       59,968        (94,693)          518
 Repayment (issuance) of notes receivable ......................................           --         11,860       (46,865)
 Acquisition related costs .....................................................           58        (37,617)       (3,156)
 Net change in short term investments ..........................................        1,300            300        (1,600)
 Repayment (issuance) of note receivable from officer ..........................           --             --           100
 Purchase of minority interest in subsidiary ...................................           --             --          (255)
                                                                                   ----------     ----------    ----------
  NET CASH USED IN INVESTING ACTIVITIES ........................................      (27,699)      (263,881)     (188,162)
                                                                                   ----------     ----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Equity offering proceeds ......................................................           --             --       208,589
 Equity offering costs .........................................................           --             --       (13,599)
 Proceeds from issuance of senior discount notes ...............................           --             --       187,096
 Proceeds from issuance of senior notes ........................................           --        384,046            --
 Capital contributions (distributions) .........................................       (1,213)         9,665            --
 Borrowings under senior secured debt ..........................................       12,838        253,000        57,758
 Repayments of borrowings under senior secured debt ............................           --       (289,421)      (76,239)
 Debt issuance costs ...........................................................       (1,351)       (16,503)      (10,763)
 Stock options exercised .......................................................           --             --           708
 Payments on capital leases ....................................................         (773)          (349)          (31)
 Interest rate cap premiums ....................................................           --             --           (27)
                                                                                   ----------     ----------    ----------
  NET CASH PROVIDED BY FINANCING ACTIVITIES ....................................        9,501        340,438       353,492
                                                                                   ----------     ----------    ----------
Net increase (decrease) in cash and cash equivalents ...........................      (44,147)       (37,096)      136,112
Cash and cash equivalents at beginning of period ...............................      104,672        141,768         5,656
                                                                                   ----------     ----------    ----------
Cash and cash equivalents at end of period .....................................   $   60,525     $  104,672    $  141,768
                                                                                   ==========     ==========    ==========
Supplemental disclosure -- cash paid for interest ..............................   $   70,890     $   27,804    $    1,731
                                                                                   ==========     ==========    ==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
 FINANCING ACTIVITIES:
 Capitalized lease obligations incurred ........................................   $      613     $    1,242    $      257
 Change in accounts payable for purchase of property and equipment .............      (20,450)         1,844        23,464
 Liabilities assumed in connection with debt issuance costs ....................           --         15,954            --
 Capital infusion from parent received in connection with acquisitions .........           --        546,175            --
 Obligations assumed in connection with acquisitions ...........................           --        253,686            --
</TABLE>

               THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
                       CONSOLIDATED FINANCIAL STATEMENTS.

--------------------------------------------------------------------------------
F-6
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands, except as noted)


1. ORGANIZATION AND BUSINESS OPERATIONS

Alamosa (Delaware), Inc. is a wholly owned subsidiary of Alamosa PCS Holdings,
Inc. and an indirect wholly owned subsidiary of Alamosa Holdings, Inc.
("Alamosa Holdings"). Alamosa Holdings was formed in July 2000. Alamosa
Holdings is a holding company and through its subsidiaries provides wireless
personal communications services, commonly referred to as PCS, in the
Southwestern, Northwestern and Midwestern United States. Alamosa (Delaware),
Inc. ("Alamosa (Delaware)"), was formed in October 1999 under the name "Alamosa
PCS Holdings, Inc." to operate as a holding company in anticipation of its
initial public offering. On February 3, 2000, Alamosa (Delaware) completed its
initial public offering. Immediately prior to the initial public offering,
shares of Alamosa (Delaware) were exchanged for Alamosa PCS LLC's ("Alamosa
LLC") membership interests, and Alamosa LLC became wholly owned by Alamosa
(Delaware). These financial statements are presented as if the reorganization
had occurred as of the beginning of the periods presented. Alamosa (Delaware)
and its subsidiaries are collectively referred to in these financial statements
as the "Company."

On December 14, 2000, Alamosa (Delaware) formed a new holding company pursuant
to Section 251(g) of the Delaware General Corporation Law. In that transaction,
each share of Alamosa (Delaware) was converted into one share of the new
holding company, and the former public company, which was renamed "Alamosa
(Delaware), Inc." became a wholly owned subsidiary of the new holding company,
which was renamed "Alamosa PCS Holdings, Inc."

On February 14, 2001, Alamosa Holdings became the new public holding company of
Alamosa PCS Holdings, Inc. ("Alamosa PCS Holdings") and its subsidiaries
pursuant to a reorganization transaction in which a wholly owned subsidiary of
Alamosa Holdings was merged with and into Alamosa PCS Holdings. As a result of
this reorganization, Alamosa PCS Holdings became a wholly owned subsidiary of
Alamosa Holdings, and each share of Alamosa PCS Holdings common stock was
converted into one share of Alamosa Holdings common stock. Alamosa Holdings'
common stock is quoted on The New York Stock Exchange under the symbol "APS."
Alamosa (Delaware) remains the issuer of the Company's public debt.


2. LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has financed its operations through capital
contributions from owners, through debt financing and through proceeds
generated from public offerings of common stock. The Company has incurred
substantial net losses and negative cash flow from operations since inception.
Expenses are expected to exceed revenues until the Company establishes a
sufficient subscriber base. Management expects operating losses to continue for
the foreseeable future. However, management expects operating losses to
decrease in the future as the Company obtains more subscribers.

As of December 31, 2002, the Company had $60,525 in cash and cash equivalents
plus an additional $34,725 in restricted cash held in escrow for debt service
requirements. The Company also had $25,000 remaining on the revolving portion
of the Senior Secured Credit Facility subject to the restrictions discussed
below.

On September 26, 2002 the Company entered into the sixth amendment to the
amended and restated credit agreement relative to the Senior Secured Credit
Facility which among other things, extended Stage I covenants for an additional
quarter and modified certain financial and statistical covenants as discussed
in Note 9. As a result of the amendment, the Company is required to maintain a
minimum cash balance of $10,000. In addition to the covenant modifications, the
overall interest rate was increased by 25 basis points such that the interest
margin as a result of the amendment is 4.25% for LIBOR borrowings and 3.25% for
base rate borrowings. In connection with a scheduled interest rate reset on
September 30, 2002, the interest margin was reset to 4.00% for LIBOR borrowings
and 3.00% for base rate borrowings.

The September 26, 2002 amendment also placed restrictions on the ability to
draw on the $25,000 revolving portion of the Senior Secured Credit Facility.
The first $10,000 can be drawn if cash balances fall below $15,000 and the
Company substantiates through tangible evidence the need for such advances. The
remaining $15,000 is available only at such time as the leverage ratio is less
than or equal to 5.5 to 1. As of December 31, 2002, the Company's leverage
ratio was 24.9 to 1.


--------------------------------------------------------------------------------
                                                                             F-7
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Although management does not currently anticipate the need to raise additional
capital in the upcoming year, the Company's funding status is dependent on a
number of factors influencing projections of operating cash flows including
those related to subscriber growth, average revenue per user ("ARPU"), churn
and cost per gross addition ("CPGA"). Should actual results differ
significantly from these assumptions, the Company's liquidity position could be
adversely affected and the Company could be in a position that would require it
to raise additional capital which may or may not be available on terms
acceptable to the Company, if at all, and could have a material adverse effect
on the Company's ability to achieve its intended business objectives.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include
the accounts of the Company and its subsidiaries. All intercompany accounts and
transactions are eliminated.

CASH AND CASH EQUIVALENTS -- Cash and cash equivalents include cash, money
market funds, and commercial paper with minimal interest rate risk and original
maturities of three months or less at the date of acquisition.

The carrying amount approximates fair value.

SHORT-TERM INVESTMENTS -- The Company invests in highly liquid debt instruments
with strong credit ratings. Commercial paper investments with a maturity
greater than three months, but less than one year, at the time of purchase are
considered to be short-term investments. The carrying amount of the investments
approximates fair value due to their short maturity. The Company maintains cash
and cash equivalents and short-term investments with certain financial
institutions. The Company performs periodic evaluations of the relative credit
standing of those financial institutions that are considered in the Company's
investment strategy.

INVENTORY -- Inventory consists of handsets and related accessories.
Inventories purchased for resale are carried at the lower of cost or market
using the first-in first-out method. Market is determined using replacement
cost which is consistent with industry practices. The Company also performs an
analysis to identify obsolete or excess handset inventory for models that are
no longer manufactured or are technologically obsolete and records a reserve,
as appropriate.

RESTRICTED CASH -- Restricted cash of $34,725 at December 31, 2002 is held in
escrow to secure payment on certain of the Company's debt obligations. The
entire amount is expected to be liquidated during 2003 and is classified as a
current asset in the accompanying consolidated balance sheets.

PROPERTY AND EQUIPMENT -- Property and equipment are reported at cost less
accumulated depreciation. Costs incurred to design and construct the wireless
network in a market are classified as construction in progress. When the
wireless network for a particular market is completed and placed into service,
the related costs begin to be depreciated. Repair and maintenance costs are
charged to expense as incurred; significant renewals and betterments are
capitalized. When depreciable assets are retired or otherwise disposed of, the
related costs and accumulated depreciation are removed from the respective
accounts, and any gains or losses on disposition are recognized in income.
Property and equipment are depreciated using the straight-line method based on
estimated useful lives of the assets.

Asset lives are as follows:

<TABLE>
<S>                                            <C>
  Buildings ................................     10 years
  Network equipment ........................   5-10 years
  Vehicles .................................      5 years
  Furniture and office equipment ...........   7-10 years
</TABLE>

Leasehold improvements are depreciated over the shorter of the remaining term
of the lease or the estimated useful life of the improvement.

Interest is capitalized in connection with the construction of the wireless
network. The capitalized interest is recorded as part of the asset to which it
relates and will be amortized over the asset's estimated useful life.


--------------------------------------------------------------------------------
F-8

<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

During 2002, approximately $265 in interest costs were capitalized. During
2001, approximately $1,752 in interest costs were capitalized. No interest
costs were capitalized during 2000. The remaining unamortized balance of
capitalized interest was approximately $2,077 as of December 31, 2002.

Microwave relocation includes costs and the related obligation incurred to
relocate incumbent microwave frequencies in the Company's service area.
Microwave relocation costs are amortized on a straight-line basis over 20 years
beginning upon commencement of services in respective markets. The amortization
of microwave relocation costs was approximately $287, $231 and $189 for the
years ended December 31, 2002, 2001 and 2000, respectively.

SOFTWARE COSTS -- In accordance with Statement of Position ("SOP") 98-1,
"Accounting for Costs of Computer Software Developed or Obtained for Internal
Use," certain costs related to the development or purchase of internal-use
software are capitalized and amortized over the estimated useful life of the
software. During fiscal 2002, 2001 and 2000, the Company capitalized
approximately $838, $1,228, and $1,626, respectively, in software costs under
SOP 98-1, which are being amortized over a five-year life. The Company
amortized computer software costs of approximately $720, $533, and $225 during
2002, 2001 and 2000, respectively.

ADVERTISING COSTS -- Advertising costs are expensed as incurred. Advertising
expenses totaled approximately $26,574, $25,857 and $14,118 during 2002, 2001
and 2000, respectively.

INCOME TAXES -- The Company presents income taxes pursuant to Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes."
SFAS No. 109 uses an asset and liability approach to account for income taxes,
wherein deferred taxes are provided for book and tax basis differences for
assets and liabilities. In the event differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities
result in deferred tax assets, an evaluation of the probability of being able
to realize the future benefits indicated by such assets is required. A
valuation allowance is provided for a portion or all of the deferred tax assets
when there is sufficient uncertainty regarding the Company's ability to
recognize the benefits of the assets in future years. See Note 11.

REVENUE RECOGNITION -- The Company recognizes revenue as services are
performed. Sprint handles the Company's billings and collections and retains 8%
of collected service revenues from the Company's subscribers and from
non-Sprint wireless subscribers who roam onto the Company's portion of the PCS
network of Sprint. The amount retained by Sprint is recorded in Cost of Service
and Operations. Revenues generated from the sale of handsets and accessories
and from roaming services provided to Sprint wireless customers who are not
based in the Company's territories are not subject to the 8% charge.

The Company defers customer activation fee revenue and an equal amount of
customer acquisition related expenses. These deferred amounts are amortized
over a three or one-year period depending on the credit class of the respective
customer, which approximates the average life of that customer. Prior to
October 1, 2000, the Company was not charging activation fees to its customers.
For the year ended December 31, 2000, the Company deferred approximately $1,180
of activation fee revenue and acquisition related expenses and amortized
approximately $77. For the year ended December 31, 2001, the Company deferred
approximately $11,544 of activation fee revenue and acquisition related
expenses and amortized approximately $2,315. For the year ended December 31,
2002, the Company deferred approximately $11,846 of activation fee revenue and
acquisition related expenses and amortized approximately $7,920. At December
31, 2002, approximately $7,023 of the remaining deferral was classified as
long-term.

Sprint and other PCS Affiliates of Sprint pay the Company a roaming fee for
each minute that a Sprint wireless subscriber based outside of the Company's
territories roams on the Company's portion of the PCS network of Sprint.
Revenue from these services is recognized as the services are performed.
Similarly, the Company pays roaming fees to Sprint and other PCS Affiliates of
Sprint, when the Company's wireless subscribers roam on the PCS network of
Sprint outside of the Company's territories. These costs are recorded as a cost
of service when incurred.

Product revenues, consisting of proceeds from sales of handsets and
accessories, are recorded net of an allowance for sales returns. The allowance
is estimated based on Sprint's handset return policy that allows customers to
return handsets for a full refund within 14 days of purchase. When handsets are
returned to


--------------------------------------------------------------------------------
                                                                             F-9
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

the Company, the Company may be able to reissue the handsets to customers at
little additional cost. However, when handsets are returned to Sprint for
refurbishing, the Company will receive a credit from Sprint, which will be less
than the amount the Company originally paid for the handset. The cost of
products sold includes the total cost of accessories and handsets sold through
the Company's retail stores (including sales to local indirect retailers). The
cost of handsets exceeds the retail sales price because the Company subsidizes
the price of handsets for competitive reasons. For handsets sold through
national indirect retailers (such as Radio Shack, Circuit City, Best Buy, etc.)
and other channels controlled by Sprint, the Company reimburses Sprint for the
subsidy incurred on such handsets activated within the Company's territory and
this cost is reflected in selling and marketing expenses.

GOODWILL AND INTANGIBLE ASSETS -- Goodwill and other intangible assets were
recorded in connection with the acquisitions discussed in Note 4. Identifiable
intangibles consist of the Sprint agreements and the respective subscriber
bases in place at the time of acquisition. The intangible assets related to the
Sprint agreements are being amortized over the remaining original term of the
underlying Sprint agreements or approximately 17.6 years. The subscriber base
intangible asset is being amortized over the estimated life of the acquired
subscribers or approximately 3 years.

The Company adopted the provisions of SFAS No. 142, "Goodwill and Other
Intangible Assets," on January 1, 2002. SFAS No. 142 primarily addresses the
accounting for goodwill and intangible assets subsequent to their initial
recognition. The provisions of SFAS No. 142 (i) prohibit the amortization of
goodwill and indefinite-lived intangible assets, (ii) require that goodwill and
indefinite-lived intangible assets be tested annually for impairment (and in
interim periods if certain events occur indicating that the carrying value of
goodwill and indefinite-lived intangible assets may be impaired), (iii) require
that reporting units be identified for the purpose of assessing potential
future impairments of goodwill and (iv) remove the forty-year limitation on the
amortization period of intangible assets that have finite lives. As of December
31, 2001, the Company had recorded $15.9 million in accumulated amortization of
goodwill. Upon the adoption of SFAS No. 142 the amortization of goodwill was
discontinued. As discussed in Note 7, in connection with the first annual
impairment testing of goodwill as of July 31, 2002 the Company recorded an
impairment charge of $291,635 and goodwill has no carrying value at December
31, 2002.

IMPAIRMENT OF LONG-LIVED ASSETS -- If facts or circumstances indicate the
possibility of impairment of long-lived assets, including intangibles, the
Company will prepare a projection of future operating cash flows, undiscounted
and without interest. If based on this projection, the Company does not expect
to recover its carrying cost, an impairment loss equal to the difference
between the fair value of the asset and its carrying value will be recognized
in operating income.

STOCK BASED COMPENSATION -- The Company has elected to follow Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees" and related interpretations in accounting for its employee stock
options. The Company has implemented the disclosure-only provisions of SFAS No.
123, "Accounting for Stock Based Compensation." See Note 15.

For fixed stock options granted under these plans, the exercise price of the
option equals or exceeds the market value of Alamosa Holdings common stock on
the date of grant. Accordingly, the Company does not record compensation
expense for any of the fixed stock options granted. For performance-based
options, compensation expense was recognized over the expected vesting period
of the options and was adjusted for changes in the number of options expected
to vest and the market value of Alamosa Holdings common stock. Compensation
expense (credit) for the performance-based options amounted to $0 in 2002,
$(916) in 2001 and $5,651 in 2000.

--------------------------------------------------------------------------------
F-10
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table illustrates the effects on net loss had the Company applied
the fair value recognition provisions of SFAS No. 123 to its stock-based
employee compensation plans:

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                   -----------------------------------------------
                                                        2002             2001             2000
                                                   --------------   --------------   -------------
<S>                                                <C>              <C>              <C>
Net loss -- as reported ........................     $ (402,762)      $ (147,423)      $ (80,189)
 Less stock-based employee compensation expense
   determined under fair value method for all
   awards, net of related tax effects ..........         (5,832)          (6,555)         (6,588)
                                                     ----------       ----------       ---------
Net loss -- pro forma ..........................     $ (408,594)      $ (153,978)      $ (86,777)
                                                     ==========       ==========       =========
</TABLE>

The pro forma amounts presented above may not be representative of the future
effects on reported net loss, since the pro forma compensation expense is
allocated over the periods in which options become exercisable, and new option
awards may be granted each year.

USE OF ESTIMATES -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities on the date of the financial
statements and the reported amounts of expenses during the period. The most
significant of such estimates include:

o  Allowance for uncollectible accounts;

o  Estimated customer life in terms of amortization of deferred revenue and
   direct costs of acquisition;

o  Likelihood of realizing benefits associated with temporary differences
   giving rise to deferred tax assets; and

o  Impairment of long-lived assets.

Actual results could differ from those estimates.

CONCENTRATION OF RISK -- The Company maintains cash and cash equivalents in
accounts with financial institutions in excess of the amount insured by the
Federal Deposit Insurance Corporation. The Company monitors the financial
stability of these institutions regularly and management does not believe there
is significant credit risk associated with deposits in excess of federally
insured amounts.

The Company relies on Sprint to provide certain back-office functions such as
billing and customer care, activation of new subscribers, handset logistics and
technology development. Should Sprint be unable to provide these services, the
Company could be negatively impacted. See Note 12.

DERIVATIVE FINANCIAL INSTRUMENTS -- The Company enters into derivative
financial instruments for the purpose of hedging specific exposures as part of
its risk management program and holds all derivatives for purposes other than
trading. To date, the Company's use of such instruments has been limited to
interest rate swaps and collars. The Company currently uses hedge accounting as
prescribed in SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities" with respect to its interest rate swaps. As such, the fair values
of these arrangements are recorded in the consolidated balance sheet with
changes in fair value being reported as a component of other comprehensive
income.

The interest rate collar arrangement does not qualify for hedge accounting
under SFAS No. 133 and as such, the fair value of the respective asset and
liability is recorded in the consolidated balance sheet with any change during
the period being reflected in the consolidated statement of operations.

RECLASSIFICATION -- Certain reclassifications have been made to prior year
amounts to conform to the current year presentation. These reclassifications
had no effect on the results of operations or stockholder's equity as
previously reported.

EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS -- In June 2001, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires the fair value of a liability
for an asset retirement obligation to be recognized in the period that it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of


--------------------------------------------------------------------------------
                                                                            F-11
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

the carrying amount of the long-lived asset. SFAS No. 143 is effective for
fiscal years beginning after June 15, 2002. For the Company's leased
telecommunication and operating facilities, primarily consisting of cell sites,
office and retail locations, the Company has evaluated the impact of the
adoption of SFAS No. 143 as of Jnuary 1, 2003 and determined that the impact to
the Company will not be material.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections as
of April 2002," which rescinded or amended various existing standards. One
change addressed by this standard pertains to treatment of extinguishments of
debt as an extraordinary item. SFAS No. 145 rescinds SFAS No. 4, "Reporting
Gains and Losses from Extinguishment of Debt" and states that an extinguishment
of debt cannot be classified as an extraordinary item unless it meets the
unusual or infrequent criteria outlined in Accounting Principles Board Opinion
No. 30 "Reporting the Results of Operations--Reporting the Effects of Disposal
of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions." The provisions of this statement are
effective for fiscal years beginning after May 15, 2002 and extinguishments of
debt that were previously classified as an extraordinary item in prior periods
that do not meet the criteria in Opinion 30 for classification as an
extraordinary item shall be reclassified. The adoption of SFAS No. 145 in the
quarter ending March 31, 2003 has resulted in a reclassification of the
extinguishment of debt that the Company previously reported as an extraordinary
item in 2001.

In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated
with Exit or Disposal Activities," which requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. The provisions of this
statement are effective for exit or disposal activities initiated after
December 31, 2002 and are not expected to have a material impact on the
Company's results of operations, financial position or cash flows.

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation-Transition and Disclosure," which is an amendment of SFAS No. 123
"Accounting for Stock-Based Compensation." This statement provides alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this statement
amends the disclosure requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The provisions of this statement are effective for
fiscal years ending after and interim periods beginning after December 15,
2002. As the Company continues to account for stock-based employee compensation
using the intrinsic value method under APB Opinion No. 25, the Company, as
required, has only adopted the revised disclosure requirements of SFAS No. 148
as of December 31, 2002. (See Stock-Based Compensation section of this note.)


The Emerging Issues Task Force ("EITF") of the FASB issued EITF Abstract No.
00-21 "Accounting for Revenue Arrangements with Multiple Deliverables" in
January, 2003. This Abstract addresses certain aspects of the accounting by a
vendor for arrangements under which it will perform multiple revenue-generating
activities. Specifically, it addresses how consideration should be measured and
allocated to the separate units of accounting in the arrangement. The guidance
in this Abstract is effective for revenue arrangements entered into in fiscal
periods beginning after June 15, 2003 and the Company is in the process of
evaluating the impact of this Abstract.


In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." FIN 45 requires that upon
issuance of a guarantee, a guarantor must recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 are effective for guarantees issued after
December 31, 2002, while the disclosure requirements were effective for
financial statements for periods ending after December 15, 2002. At December
31, 2002, the Company had not entered into any material arrangement that would
be subject to the disclosure requirements of FIN 45. The Company does not
believe that the adoption of FIN 45 will have a material impact on its
consolidated financial statements.

--------------------------------------------------------------------------------
F-12
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

On January 17, 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46" or
the "Interpretation"), "Consolidation of Variable Interest Entities, an
interpretation of ARB 51." The primary objectives of FIN 46 are to provide
guidance on the identification of entities for which control is achieved
through means other than through voting rights ("variable interest entities" or
"VIEs") and how to determine when and which business enterprise should
consolidate the VIE (the "primary beneficiary"). This new model for
consolidation applies to an entity which either (1) the equity investors (if
any) do not have a controlling financial interest or (2) the equity investment
at risk is insufficient to finance that entity's activities without receiving
additional subordinated financial support from other parties. In addition, FIN
46 requires that both the primary beneficiary and all other enterprises with a
significant variable interest in a VIE make additional disclosures. For public
entities with VIEs created before February 1, 2003, the implementation and
disclosure requirements of FIN 46 are effective no later than the beginning of
the first interim or annual reporting period beginning after June 15, 2003. For
VIEs created after January 31, 2003, the requirements are effective
immediately. The Company does not believe that the adoption of FIN 46 will have
a material impact on its consolidated financial statements.


4. MERGERS AND ACQUISITIONS

The Company completed the acquisitions of three PCS affiliates of Sprint during
the first quarter of 2001. On February 14, 2001, the Company completed its
acquisitions of Roberts Wireless Communications, L.L.C. ("Roberts") and
Washington Oregon Wireless, LLC ("WOW"). On March 30, 2001, the Company
completed its acquisition of Southwest PCS Holdings, Inc. ("Southwest"). Each
of these transactions was accounted for under the purchase method of accounting
and the results of the acquired companies are included in these consolidated
financial statements from the date of acquisition.


The merger consideration in the Roberts acquisition consisted of 13.5 million
shares of Alamosa Holdings common stock and approximately $4.0 million in cash.
The Company also assumed the net debt of Roberts in the transaction, which
amounted to approximately $57 million as of February 14, 2001.

The merger consideration in the WOW acquisition consisted of 6.05 million
shares of Alamosa Holdings common stock and approximately $12.5 million in
cash. The Company also assumed the net debt of WOW in the transaction, which
amounted to approximately $31 million as of February 14, 2001.

The merger consideration in the Southwest acquisition consisted of 11.1 million
shares of Alamosa Holdings common stock and approximately $5.0 million in cash.
The Company also assumed the net debt of Southwest in the transaction, which
amounted to approximately $81 million as of March 30, 2001.

The Company obtained independent valuations of Roberts, WOW and Southwest to
allocate the purchase price. The results of the allocations are as follows:

<TABLE>
<CAPTION>
                                                               ROBERTS          WOW         SOUTHWEST         TOTAL
                                                            -------------   -----------   -------------   -------------
<S>                                                         <C>             <C>           <C>             <C>
Consideration:
Alamosa Holdings common stock issued ....................    $  291,060      $ 130,438     $  123,543      $  545,041
Alamosa Holdings stock options granted ..................         1,134             --             --           1,134
Cash (including merger related costs) ...................         8,940         15,962         12,715          37,617
                                                             ----------      ---------     ----------      ----------
 Total ..................................................       301,134        146,400        136,258         583,792
                                                             ----------      ---------     ----------      ----------
Allocated to:
Current assets ..........................................         4,545          1,969          5,923          12,437
Property, plant and equipment ...........................        53,506         35,732         36,722         125,960
Intangible assets (other than goodwill) .................       258,300        116,400        187,000         561,700
Liabilities acquired (including deferred taxes) .........      (185,452)       (85,433)      (152,955)       (423,840)
                                                             ----------      ---------     ----------      ----------
 Goodwill ...............................................    $  170,235      $  77,732     $   59,568      $  307,535
                                                             ==========      =========     ==========      ==========
</TABLE>


--------------------------------------------------------------------------------
                                                                            F-13
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The unaudited pro forma condensed consolidated statements of operations for the
years ended December 31, 2001 and 2000 set forth below, present the results of
operations as if the acquisitions had occurred at the beginning of each period
and are not necessarily indicative of future results or actual results that
would have been achieved had these acquisitions occurred as of the beginning of
the period.

<TABLE>
<CAPTION>
                                                 FOR THE YEAR ENDED
                                                    DECEMBER 31,
                                           -------------------------------
                                                2001             2000
                                           --------------   --------------
                                                     (UNAUDITED)
<S>                                        <C>              <C>
Total revenues .........................     $  376,061       $  131,203
                                             ==========       ==========
Loss before income tax benefit .........     $ (251,600)      $ (204,742)
Income tax benefit .....................         88,258           71,660
                                             ----------       ----------
Net loss ...............................     $ (163,342)      $ (133,082)
                                             ==========       ==========
</TABLE>

5. ACCOUNTS RECEIVABLE

CUSTOMER ACCOUNTS RECEIVABLE -- Customer accounts receivable represent amounts
owed to the Company by subscribers for PCS service. The amounts presented in
the consolidated balance sheets are net of an allowance for uncollectible
accounts of $8.5 million and $5.9 million at December 31, 2002 and 2001,
respectively.

RECEIVABLE FROM SPRINT -- Receivable from Sprint in the accompanying
consolidated balance sheets consists of the following:

<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                                 -----------------------
                                                                     2002         2001
                                                                 -----------   ---------
<S>                                                              <C>           <C>
Net roaming receivable .......................................     $ 3,554     $ 1,731
Access and interconnect revenue receivable (payable) .........        (188)      3,252
Accrued service revenue ......................................       3,345       4,154
Customer payments due from Sprint ............................      21,136       4,023
Other amounts due from Sprint ................................       2,475          --
                                                                   -------     -------
                                                                   $30,322     $13,160
                                                                   =======     =======
</TABLE>

Net roaming receivable includes net travel revenue due from Sprint relative to
PCS subscribers based outside of the Company's licensed territory who utilize
the Company's portion of the PCS network of Sprint. The travel revenue
receivable is net of amounts owed to Sprint relative to the Company's
subscribers who utilize the PCS network of Sprint outside of the Company's
licensed territory. In addition, net roaming receivable also includes amounts
due from Sprint which have been collected from other PCS providers for their
customers' usage of the Company's portion of the PCS network of Sprint.

Access and interconnect revenue receivable represents net amounts due from
Sprint for calls originated by a local exchange carrier ("LEC") or an
interexchange carrier ("IXC") that terminate on the Company's network. Under
the Company's affiliation agreements with Sprint, Sprint collects this revenue
from other carriers and remits 92% of those collections to the Company. The
$188 amount owed to Sprint at December 31, 2002 is the result of rate
adjustments on previously collected amounts.

On July 3, 2002, the Federal Communications Commission issued a ruling on a
dispute between AT&T, as an IXC, and Sprint. This ruling addressed wireless
carrier's ability to charge terminating access fees to the IXC for calls
terminated on a wireless network indicating that such fees could be assessed;
however the IXC would only be obligated to pay such fees if a contract was in
place providing for the payment of access charges. As a result of this ruling,
Sprint has requested that the Company refund approximately $5.6 million in
amounts that had been previously paid to the Company by Sprint relative to
terminating access fees. Although the Company has contested the refund of these
amounts, a liability has been recorded in the consolidated financial statements
as of December 31, 2002.

--------------------------------------------------------------------------------
F-14
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Accrued service revenue receivable represents the Company's estimate of airtime
usage charges that have been earned but not billed at the end of the period.

Customer payments due from Sprint relate to amounts that have been collected by
Sprint at the end of the period which were not remitted to the Company until
the subsequent period. Customer payments are processed daily by Sprint and the
Company receives its share of such collections on a weekly basis under the
terms of the affiliation agreements.

Included in the December 31, 2002 balance of customer payments due from Sprint
is $12,209 in amounts that were received by the Company subsequent to year end
related to payments that Sprint had collected from customers from April 2000 to
December 2002 that had not been passed on to the Company due to the methodology
that had been previously used by Sprint to allocate cash received from
customers.

Other amounts due from Sprint at December 31, 2002 related to a refund of fees
paid to Sprint during 2002 for services such as billing and customer care.
These fees are determined at the beginning of each year based on estimated
costs and are adjusted based on actual costs incurred by Sprint in providing
the respective services.


6. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                   DECEMBER 31,
                                           ----------------------------
                                                2002           2001
                                           -------------   ------------
<S>                                        <C>             <C>
Land and buildings .....................    $   12,086      $  11,492
Network equipment ......................       535,672        463,440
Vehicles ...............................         1,756          1,787
Furniture and office equipment .........        18,062         16,826
                                            ----------      ---------
                                               567,576        493,545
Accumulated depreciation ...............      (122,060)       (60,414)
                                            ----------      ---------
   Subtotal ............................       445,516        433,131
                                            ----------      ---------
Microwave relocation costs .............         5,773          5,639
Accumulated amortization ...............          (792)          (504)
                                            ----------      ---------
   Subtotal ............................         4,981          5,135
                                            ----------      ---------
Construction in progress:
 Network equipment .....................         7,673         16,126
 Leasehold improvements ................           776          1,303
                                            ----------      ---------
   Subtotal ............................         8,449         17,429
                                            ----------      ---------
   Total ...............................    $  458,946      $ 455,695
                                            ==========      =========
</TABLE>

During the year ended December 31, 2002 the Company recorded $1,194 in
impairments of property and equipment related to the abandonment of a switching
facility. The impairment charge represents the net book value of leasehold
improvements at the physical location of the leased facility.


7. GOODWILL AND INTANGIBLE ASSETS

In connection with the acquisitions completed during 2001 discussed in Note 4,
the Company allocated portions of the respective purchase prices to
identifiable intangible assets consisting of (i) the value of the Sprint
agreements in place at the acquired companies and (ii) the value of the
subscriber base in place at the acquired companies. In addition to the
identifiable intangibles, goodwill was recorded in the amount by
which the purchase price exceeded the fair value of the net assets acquired
including identified intangibles.

--------------------------------------------------------------------------------
                                                                            F-15
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The value assigned to the Sprint agreements is being amortized using the
straight-line method over the remaining original terms of the agreements that
were in place at the time of acquisition or approximately 17.6 years. The value
assigned to the subscriber bases acquired is being amortized using the
straight-line method over the estimated life of the acquired subscribers or
approximately 3 years.

The Company adopted the provisions of SFAS No. 142, "Goodwill and Other
Intangible Assets," on January 1, 2002. SFAS No. 142 primarily addresses the
accounting for goodwill and intangible assets subsequent to their initial
recognition. The provisions of SFAS No. 142 (i) prohibit the amortization of
goodwill and indefinite-lived intangible assets, (ii) require that goodwill and
indefinite-lived intangible assets be tested annually for impairment (and in
interim periods if certain events occur indicating that the carrying value may
be impaired), (iii) require that reporting units be identified for the purpose
of assessing potential future impairments of goodwill and (iv) remove the forty
year limitation on the amortization period of intangible assets that have
finite lives. As of December 31, 2001, the Company had recorded $15.9 million
in accumulated amortization of goodwill. Upon the adoption of SFAS No. 142 the
amortization of goodwill was discontinued. A purchase price allocation
adjustment of $1,718 was recorded in the first quarter of 2002 which reduced
goodwill by that amount.

SFAS No. 142 requires that goodwill and indefinite-lived intangible assets be
tested annually for impairment using a two-step process. The first step is to
identify a potential impairment by comparing the fair value of reporting units
to their carrying value and, upon adoption, must be measured as of the
beginning of the fiscal year. As of January 1, 2002, the results of the first
step indicated no potential impairment of the Company's goodwill. The Company
will perform this assessment annually and the first such assessment was done as
of July 31, 2002.

The annual assessment as of July 31, 2002 was performed with the assistance of
a nationally recognized appraisal firm. In performing the evaluation, the
appraisal firm used information from various sources including, but not limited
to, current stock price, transactions involving similar companies, the business
plan prepared by management and current and past operating results of the
Company. The appraisal firm used a combination of the guideline transaction
approach, the discounted cash flow approach and the public price approach to
determine the fair value of the Company which had been determined to be the
single reporting unit. The guideline transaction approach used a sample of
recent wireless service provider transactions to determine an average price per
POP and price per customer. The discounted cash flow approach used the
projected discounted future cash flows and residual values of the Company to
determine the indicated value of invested capital. The public price approach
was based on the market price for the Company's publicly traded equity
securities along with an estimated premium for control. This was combined with
the carrying value of the Company's debt securities to arrive at the indicated
value of invested capital. The results of this valuation indicated that the
fair value of the reporting unit was less than the carrying amount.

Based on the indicated impairment resulting from this valuation, the Company
proceeded to the second step of the annual impairment testing which involves
allocating the fair value of the reporting unit to its identifiable assets and
liabilities as if the reporting unit had been acquired in a business
combination where the purchase price is considered to be the fair value of the
reporting unit. Any unallocated purchase price is considered to be the implied
fair value of goodwill. The second step of this impairment test indicated that
goodwill had no value and an impairment charge of $291,635 was recorded in the
third quarter of 2002. This impairment charge is included as a separate line
item in the consolidated statements of operations for the year ended December
31, 2002.

The impairment of goodwill was deemed to be a "triggering event" requiring
impairment testing of the Company's other long-lived assets under SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." In performing
this test, assets are grouped according to identifiable cash flow streams and
the undiscounted cash flow over the life of the asset group is compared to the
carrying value of the asset group. No additional impairment was recorded as a
result of this test.

--------------------------------------------------------------------------------
F-16
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Goodwill and intangible assets consist of:

<TABLE>
<CAPTION>
                                                        DECEMBER 31, 2002    DECEMBER 31, 2001
                                                      -------------------   ------------------
<S>                                                   <C>                   <C>
Goodwill ..........................................        $      --            $ 293,353
                                                           =========            =========
Intangible assets:
 Sprint affiliation and other agreements ..........        $ 532,200            $ 532,200
 Accumulated amortization .........................          (55,458)             (25,768)
                                                           ---------            ---------
   Subtotal .......................................          476,742              506,432
                                                           ---------            ---------
 Subscriber base acquired .........................           29,500               29,500
 Accumulated amortization .........................          (17,821)              (7,092)
                                                           ---------            ---------
   Subtotal .......................................           11,679               22,408
                                                           ---------            ---------
 Intangible assets, net ...........................        $ 488,421            $ 528,840
                                                           =========            =========
</TABLE>

Amortization expense relative to intangible assets was $40,419 and $32,860 for
the years ended December 31, 2002 and 2001, respectively.

Aggregate amortization expense relative to intangible assets for the periods
shown will be as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
<S>                                 <C>
  2003 ..........................   $ 40,067
  2004 ..........................     32,079
  2005 ..........................     30,234
  2006 ..........................     30,234
  2007 ..........................     30,234
  Thereafter ....................    325,573
                                    --------
                                    $488,421
                                    ========
</TABLE>

The following tables present net loss as if the provisions of SFAS 142 had been
adopted January 1, 2000:

<TABLE>
<CAPTION>
                                                      FOR YEAR ENDED DECEMBER 31,
                                            -----------------------------------------------
                                                 2002             2001             2000
                                            --------------   --------------   -------------
<S>                                         <C>              <C>              <C>
Reported net loss .......................    $  (402,762)     $  (147,423)      $ (80,189)
Add back: goodwill amortization .........             --           15,899              --
                                             -----------      -----------       ---------
Adjusted net loss .......................    $  (402,762)     $  (131,524)      $ (80,189)
                                             ===========      ===========       =========
</TABLE>

8. LEASES

OPERATING LEASES -- The Company has various operating leases, primarily related
to rentals of tower sites and offices. These leases range from 5 to 10 years in
length and generally provide for annual rent escalation based on pre-determined
amounts or percentages. The estimated increases in rent are being recognized
over the term of the leases using the straight-line method. Rental expense was
$33,520, $26,548 and $6,177 for 2002, 2001 and 2000, respectively. At December
31, 2002, the aggregate minimum rental commitments under noncancelable
operating leases for the periods shown are as follows:


--------------------------------------------------------------------------------
                                                                            F-17
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<CAPTION>
YEARS:
---------------------------------
<S>                                 <C>
  2003 ..........................   $ 28,973
  2004 ..........................     29,534
  2005 ..........................     30,047
  2006 ..........................     30,834
  2007 ..........................     31,481
  Thereafter ....................     90,191
                                    --------
  Total .........................   $241,060
                                    ========
</TABLE>

CAPITAL LEASES -- Capital leases consist of leases for rental of retail space
and switch usage. The net present value of the leases was $2,419 and $2,579 at
December 31, 2002 and 2001, respectively, and was included in property and
equipment. Accumulated amortization recorded under these leases was $570 and
$292 at December 31, 2002 and 2001, respectively. At December 31, 2002 the
future payments under capital lease obligations, less imputed interest, are as
follows:

<TABLE>
<CAPTION>
YEARS:
---------------------------------------------------------------------------
<S>                                                                           <C>
        2003 ..............................................................    $  1,305
        2004 ..............................................................         586
        2005 ..............................................................         160
        2006 ..............................................................         162
        2007 ..............................................................         163
        Thereafter ........................................................         857
                                                                               --------
        Total minimum lease payments ......................................       3,233
        Less: imputed interest ............................................        (814)
                                                                               --------
        Present value of minimum lease payments ...........................       2,419
        Less: current installments ........................................      (1,064)
                                                                               --------
        Long-term capital lease obligations at December 31, 2002 ..........    $  1,355
                                                                               ========
</TABLE>

9. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                          -------------------------
                                                              2002          2001
                                                          -----------   -----------
<S>                                                       <C>           <C>
12 7/8% Senior Discount Notes, net of discount ........    $268,862      $237,207
12 1/2% Senior Notes ..................................     250,000       250,000
13 5/8% Senior Notes ..................................     150,000       150,000
Senior Secured Credit Facility ........................     200,000       187,162
                                                           --------      --------
Total debt ............................................     868,862       824,369
Less current maturities ...............................          --            --
                                                           --------      --------
Long term debt, excluding current maturities ..........    $868,862      $824,369
                                                           ========      ========
</TABLE>

Senior Unsecured Obligations

SENIOR DISCOUNT NOTES -- On December 23, 1999, Alamosa (Delaware) filed a
registration statement with the Securities and Exchange Commission for the
issuance of $350 million face amount of Senior Discount Notes (the "12 7/8%
Notes Offering"). The 12 7/8% Notes Offering was completed on February 8, 2000
and generated net proceeds of approximately $181 million after underwriters'
commissions and expenses of approximate $6.1 million. The 12 7/8% senior
discount notes ("12 7/8% Senior Discount Notes") mature in ten years (February
15, 2010) and carry a coupon rate of 12 7/8% Senior Discount Notes, and provide
for


--------------------------------------------------------------------------------
F-18
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

interest deferral for the first five years. The 12 7/8% Senior Discount Notes
will accrete to their $350 million face amount by February 8, 2005, after
which, interest will be paid in cash semiannually. The proceeds of the 12 7/8%
Senior Discount Notes Offering were used to prepay the existing credit
facility, to pay costs to build out additional areas within the Company's
existing territories, to fund operating working capital needs and for other
general corporate purposes.

12 1/2% SENIOR NOTES -- On January 31, 2001, Alamosa (Delaware) consummated the
offering (the "12 1/2% Notes Offering") of $250 million aggregate principal
amount of senior notes (the "12 1/2% Senior Notes").

The 12 1/2% Senior Notes mature in ten years (February 1, 2011), carry a coupon
rate of 12 1/2%, payable semiannually on February 1 and August 1, beginning on
August 1, 2001. The net proceeds from the sale of the 12 1/2% Senior Notes were
approximately $241 million, after deducting the commissions and estimated
offering expenses.

Approximately $59.0 million of the proceeds of the 12 1/2% Senior Notes Offering
were used by Alamosa (Delaware) to establish a security account (with cash or
U.S. government securities) to secure on a pro rata basis the payment
obligations under the 12 1/2% Senior Notes and the 12 7/8% Senior Discount
Notes, and the balance was used for general corporate purposes of Alamosa
(Delaware), including, accelerating coverage within the existing territories of
Alamosa (Delaware); the build-out of additional areas within its existing
territories expanding its existing territories; and pursuing additional
telecommunications business opportunities or acquiring other telecommunications
businesses or assets.

13 5/8% SENIOR NOTES -- On August 15, 2001, Alamosa (Delaware) issued $150
million face amount of Senior Notes (the "13 5/8% Senior Notes"). The 13 5/8%
Senior Notes mature in ten years (August 15, 2011) and carry a coupon rate of
13 5/8% payable semiannually on February 15 and August 15, beginning on February
15, 2002. The net proceeds from the sale of the 135/8% Senior Notes were
approximately $141.5 million, after deducting the commissions and estimated
offering expenses. Approximately $66 million of the proceeds were used to pay
down a portion of the Senior Secured Credit Facility. Approximately $39.1
million of the proceeds of the 13 5/8% Senior Notes were used by Alamosa
(Delaware) to establish a security account to secure on a pro rata basis the
payment obligations under all of the Company's unsecured borrowings. The
balance was used for general corporate purposes.

Significant terms of the senior unsecured obligations include:

o RANKING -- The senior unsecured obligations of Alamosa (Delaware) are equal
  in right of payment to all future senior debt of Alamosa (Delaware) and
  senior in right of payment to all future subordinated debt of Alamosa
  (Delaware).

o GUARANTEES -- The senior unsecured obligations will rank equally with all
  existing and future senior debt and senior to all existing and future
  subordinated debt. The obligations are fully and unconditionally, jointly
  and severally guaranteed on a senior subordinated, unsecured basis, by all
  the existing and any future restricted subsidiaries of Alamosa (Delaware)
  with the exception of Alamosa Operations, Inc. a wholly owned subsidiary of
  Alamosa (Delaware). The financial statements of Alamosa (Delaware), Inc. and
  financial information related to its guarantor subsidiaries are set forth
  below.

o OPTIONAL REDEMPTION -- During the first thirty-six months after the
  respective Notes offerings, the Company may use net proceeds of an equity
  offering to redeem up to 35% of the accreted value of the notes at a
  redemption price of 112.875%, 112.500% and 113.625% for the 12 7/8% Senior
  Discount Notes, 12 1/2% Senior Notes and 13 5/8% Senior Notes, respectively.

--------------------------------------------------------------------------------
                                                                            F-19
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Additionally, the senior unsecured obligations contain call options as follows:


<TABLE>
<CAPTION>
                                                       REDEMPTION PRICE
                       --------------------------------------------------------------------------------
                            SENIOR DISCOUNT NOTES        12 1/2% SENIOR NOTES      13 5/8% SENIOR NOTES
                       --------------------------   -------------------------   -----------------------
                         YEAR ENDING FEBRUARY 15,     YEAR ENDING JANUARY 31,    YEAR ENDING AUGUST 15,
                       --------------------------   -------------------------   -----------------------
<S>                    <C>                          <C>                         <C>
2006 ...............             106.438%                       N/A                        N/A
2007 ...............             104.292%                     106.250%                   106.813%
2008 ...............             102.146%                     104.167%                   104.542%
2009 ...............             100.000%                     102.083%                   102.271%
Thereafter .........             100.000%                     100.000%                   100.000%
</TABLE>

o CHANGE OF CONTROL -- Upon a change of control as defined by the respective
  offerings, the Company will be required to make an offer to purchase the
  notes at a price equal to 101% of the accreted value for the 12 7/8% Senior
  Discount Notes and 101% of the face amount for the 12 1/2% Senior Notes and
  13 5/8% Senior Notes.

o RESTRICITVE COVENANTS -- The indentures governing the senior unsecured
  obligations contain covenants that, among other things and subject to
  important exceptions, limit our ability and the ability of our subsidiaries
  to incur additional debt, issue preferred stock, pay dividends, redeem
  capital stock or make other restricted payments or investments as defined by
  the indentures, create liens on assets, merge, consolidate or dispose of
  assets, or enter into transactions with affiliates and change lines of
  business. The indentures contain cross-default provisions relative to other
  material indebtedness.

o SECURITY AGREEMENT -- Concurrently with the closing of the 12 1/2% Senior
  Notes, Alamosa (Delaware) deposited $59.0 million with the collateral agent,
  to secure on a pro rata basis the payment obligations of Alamosa (Delaware)
  under the 12 1/2% Senior Notes and the 12 7/8% Senior Discount Notes. The
  amount deposited in the security account, together with the proceeds from
  the investment thereof, will be sufficient to pay when due the first four
  interest payments on the 12 1/2% Senior Notes. Funds will be released from
  the security account to make interest payments on the 12 1/2% Senior Notes or
  the 12 7/8% Senior Discount Notes as they become due, so long as there does
  not exist an event of default with respect to the 12 1/2% Senior Notes or the
  12 7/8% Senior Discount Notes. Approximately $39.1 million of the proceeds of
  the 13 5/8% Notes Offering were similarly used to establish a security
  account to secure on a pro rata basis the payment obligations under the
  13 5/8% Senior Notes, the 12 1/2% Senior Notes and the 12 7/8% Senior Discount
  Notes.


SENIOR SECURED OBLIGATIONS

SENIOR SECURED CREDIT FACILITY -- On February 14, 2001, Alamosa Holdings,
Alamosa (Delaware) and Alamosa Holdings, LLC, as borrower, entered into a $280
million senior secured credit facility (the "Senior Secured Credit Facility")
with Citicorp USA, as administrative agent, and collateral agent, Toronto
Dominion (Texas), Inc., as syndication agent; EDC as co-documentation agent;
First Union National Bank, as documentation agent, and a syndicate of banking
and financial institutions. On March 30, 2001, the Senior Secured Credit
Facility was amended to increase the facility to $333 million in relation to
the acquisition of Southwest. The Senior Secured Credit Facility was again
amended in August 2001 to reduce the maximum borrowing to $225 million
consisting of a 7-year senior secured 12-month delayed draw term loan facility
of $200 million and a 7-year senior secured revolving credit facility in an
aggregate principal amount of up to $25 million.

On September 26, 2002, the Company further amended the Senior Secured Credit
Facility, to among other things, extend Stage I covenants for an additional
quarter and modify certain financial and statistical covenants. Under the
Senior Secured Credit Facility, interest will accrue, at Alamosa Holdings,
LLC's option: (i) at the London Interbank Offered Rate adjusted for any
statutory reserves ("LIBOR"), or (ii) the base rate which is generally the
higher of the administrative agent's base rate, the federal funds effective
rate plus 0.50% or the administrative agent's base CD rate plus 0.50%, in each
case plus an interest margin which was initially 4.00% for LIBOR borrowings and
3.00% for base rate borrowings. In connection with the September 26, 2002
amendment, the initial margin was increased to 4.25% for LIBOR borrowings and


--------------------------------------------------------------------------------
F-20
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.25% for base rate borrowings. The applicable interest margins are subject to
reductions under a pricing grid based on ratios of Alamosa Holdings, LLC's
total debt to its earnings before interest, taxes, depreciation and
amortization ("EBITDA"). The interest rate margins will increase by an
additional 200 basis points in the event Alamosa Holdings, LLC fails to pay
principal, interest or other amounts as they become due and payable under the
Senior Secured Credit Facility. In connection with a scheduled interest rate
reset on September 30, 2002, the interest margin was reset to 4.00% for LIBOR
borrowings and 3.00% for base rate borrowings.

The weighted average interest rate on the outstanding borrowings under this
facility at December 31, 2002 is 5.65%. Alamosa Holdings, LLC is also required
to pay quarterly in arrears a commitment fee on the unfunded portion of the
commitment of each lender. The commitment fee accrues at a rate per annum equal
to (i) 1.50% on each day when the utilization (determined by dividing the total
amount of loans plus outstanding letters of credit under the Senior Secured
Credit Facility by the total commitment amount under the Senior Secured Credit
Facility) of the Senior Secured Credit Facility is less than or equal to
33.33%, (ii) 1.25% on each day when utilization is greater than 33.33% but less
than or equal to 66.66% and (iii) 1.00% on each day when utilization is greater
than 66.66%. The Company has entered into derivative hedging instruments to
hedge a portion of the interest rate risk associated with borrowings under the
Senior Secured Credit Facility as discussed in Note 16.

Alamosa Holdings, LLC is also required to pay a separate annual administration
fee and a fee on the aggregate face amount of outstanding letters of credit, if
any, under the revolving credit facility.

As of December 31, 2002, Alamosa Holdings, LLC had drawn $200 million under the
term portion of the Senior Secured Credit Facility. Any amount outstanding at
the end of the 12-month period will amortize quarterly beginning May 14, 2004.
The September 26, 2002 amendment placed restrictions on the ability to draw the
$25 million revolving portion. The first $10 million can be drawn if cash
balances fall below $15 million and the Company substantiates through tangible
evidence the need for such advances. The remaining $15 million is available
only at such time as the leverage ratio is less than or equal to 5.5 to 1. No
advances have been drawn on the revolving portion of the Senior Secured Credit
Facility. The revolving portion of the Senior Secured Credit Facility will
begin reducing quarterly in amounts to be agreed beginning May 14, 2004.

Loans under the term loan portion of the Senior Secured Credit Facility will be
subject to mandatory prepayments from 50% of excess cash flow for each fiscal
year commencing with the fiscal year ending December 31, 2003, 100% of the net
cash proceeds (subject to exceptions and reinvestment rights of asset sales or
other dispositions, including insurance and condemnation proceeds) of sales of
property by Alamosa (Delaware) and its subsidiaries, and 100% of the net
proceeds of issuances of debt obligations of Alamosa (Delaware) and its
subsidiaries (subject to exceptions). After the term loans are repaid in full,
mandatory prepayments will be applied to permanently reduce commitments under
the revolving portion of the Senior Secured Credit Facility.

All obligations of Alamosa Holdings, LLC under the Senior Secured Credit
Facility are unconditionally guaranteed on a senior basis by Alamosa Holdings,
Alamosa (Delaware) and, subject to certain exceptions, by each current and
future direct and indirect subsidiary of Alamosa (Delaware), including Alamosa
PCS, Inc., Roberts, WOW and Southwest.

The Senior Secured Credit Facility is secured by a first priority pledge of all
of the capital stock of Alamosa Holdings, LLC and subject to certain
exceptions, each current and future direct and indirect subsidiary of Alamosa
(Delaware), as well as a first priority security interest in substantially all
of the assets (including all five of the Sprint affiliation agreements with the
Company) of Alamosa (Delaware) and, subject to certain exceptions, each current
and future direct and indirect subsidiary of Alamosa (Delaware).

The Senior Secured Credit Facility contains customary events of default,
including, but not limited to:

o the non-payment of the principal, interest and other obligations under the
  new Senior Secured Credit Facility;

o the inaccuracy of representations and warranties contained in the credit
  agreement or the violation of covenants contained in the credit agreement;


--------------------------------------------------------------------------------
                                                                            F-21
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

o cross default and cross acceleration to other material indebtedness;

o bankruptcy;

o material judgments and certain events relating to compliance with the
  Employee Retirement Income Security Act of 1974 and related regulations;

o actual or asserted invalidity of the security documents or guaranties of the
  Senior Secured Credit Facility;

o the occurrence of a termination event under the management, licenses and
  other agreements between any of the Company, WOW, Roberts, Southwest and
  their subsidiaries and Sprint or a breach or default under the consent and
  agreement entered into between Citicorp USA, Inc., as administrative agent
  for the lenders, and Sprint;

o loss of rights to benefit of or the occurrence of any default under other
  material agreements that could reasonably be expected to result in a
  material adverse effect on Alamosa Holdings, LLC;

o the occurrence of a change of control;

o any termination, revocation or non-renewal by the FCC of one or more
  material licenses; and

o the failure by Alamosa (Delaware) to make a payment, if that could
  reasonably be expected to result in the loss, termination, revocation,
  non-renewal or material impairment of any material licenses or otherwise
  result in a material adverse affect on Alamosa Holdings, LLC.

The Senior Secured Credit Facility contains numerous affirmative and negative
covenants customary for credit facilities of a similar nature, including, but
not limited to, negative covenants imposing limitations on the ability of
Alamosa (Delaware), Alamosa Holdings, LLC and their subsidiaries, and as
appropriate, Alamosa Holdings, to, among other things (i) declare dividends or
repurchase stock; (ii) prepay, redeem or repurchase debt; (iii) incur liens and
engage in sale-leaseback transactions; (iv) make loans and investments; (v)
incur additional debt, hedging agreements and contingent obligations; (vi)
issue preferred stock of subsidiaries; (vii) engage in mergers, acquisitions
and asset sales; (viii) engage in certain transactions with affiliates; (ix)
amend, waive or otherwise alter material agreements or enter into restrictive
agreements; and (x) alter the businesses they conduct.

Pursuant to the Senior Secured Credit Facility, the Company is required to
maintain a minimum cash balance of $10 million, and future draws are
conditioned, among other things, on the Company maintaining a ratio of senior
debt to net property and equipment that does not exceed 1 to 1. The Company is
also subject to covenants with respect to the ratio of EBITDA to total cash
interest expense. Alamosa (Delaware) is also subject to the following financial
and statistical covenants (Stage I covenants), which will apply until March 31,
2003:

o minimum numbers of subscribers;

o providing coverage to a minimum number of residents;

o minimum service revenue;

o minimum EBITDA;

o ratio of senior debt to total capital;

o ratio of total debt to total capital; and

o maximum capital expenditures;

After March 31, 2003, the financial and statistical covenants will be the
following (Stage II covenants):

o ratio of senior debt to EBITDA;

o ratio of total debt to EBITDA;

o ratio of EBITDA to total fixed charges (the sum of debt service, capital
  expenditures and taxes); and

o ratio of EBITDA to pro forma debt service.

--------------------------------------------------------------------------------
F-22
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unless waived by the Senior Secured Credit Facility lenders, the failure of the
Company, Alamosa Holdings, LLC and their subsidiaries to satisfy or comply with
any of the financial or other covenants, or the occurrence of an event of
default under the Senior Secured Credit Facility, will entitle the lenders to
declare the outstanding borrowings under the Senior Secured Credit Facility
immediately due and payable and exercise all or any of their other rights and
remedies. Any such acceleration or other exercise of rights and remedies would
likely have a material adverse effect on Alamosa Holdings, Alamosa (Delaware),
Alamosa Holdings, LLC and their subsidiaries.


CONSENT AND AGREEMENT FOR THE BENEFIT OF THE HOLDERS OF THE SENIOR SECURED
CREDIT FACILITY

Sprint entered into a consent and agreement with Citicorp, that modifies
Sprint's rights and remedies under our affiliation agreements with Sprint, for
the benefit of Citicorp and the holders of the Senior Secured Credit Facility
and any refinancing thereof. The consent and agreement with Citicorp generally
provides, among other things, Sprint's consent to the pledge of substantially
all of our assets, including our rights in our affiliation agreements with
Sprint, and that our affiliation agreements with Sprint generally may not be
terminated by Sprint until the Senior Secured Credit Facility is satisfied in
full pursuant to the terms of the consents and agreement.

Subject to the requirements of applicable law, so long as the Senior Secured
Credit Facility remains outstanding, Sprint has the right to purchase our
operating assets or the partnership interests, membership interests or other
equity interests of our operating subsidiaries, upon its receipt of notice of
an acceleration of the Senior Secured Credit Facility, under certain terms.

If Sprint does not purchase our operating assets or the partnership interests,
membership interests or other equity interests of our operating subsidiaries
after an acceleration of the obligations under the Senior Secured Credit
Facility, then the administrative agent may sell the operating assets or the
partnership interests, membership interests or other equity interests of our
operating subsidiaries.

Aggregate minimum annual principal payments due on all issues of long-term debt
for the next five years are as follows:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,
------------------------------
<S>                              <C>
  2003 .......................    $     --
  2004 .......................      22,500
  2005 .......................      45,000
  2006 .......................      50,000
  2007 .......................      65,000
  Thereafter .................     767,500
                                  --------
                                  $950,000
                                  ========
</TABLE>

10. STOCKHOLDER'S EQUITY

On October 29, 1999, Alamosa (Delaware) filed a registration statement with the
Securities and Exchange Commission for the sale of 10,714,000 shares of its
common stock (the "Stock Offering"). The Stock Offering became effective and
the shares were issued on February 2, 2000 at the initial price of $17.00 per
share. Subsequently, the underwriters exercised their over-allotment option of
1,607,100 shares. The Company received net proceeds of approximately $193.8
million after commissions of $13.3 million and expenses of approximately $1.5
million. The proceeds of the Stock Offering were used for the build out of the
system, to fund operating capital needs and for other corporate purposes.

As described in Note 1, in December 2000, Alamosa (Delaware)'s capital stock was
converted into shares of a new holding company. Following this transaction,
Alamosa (Delaware)'s capital stock consisted of 9,000 shares of common stock,
par value $0.01 per share authorized and 100 shares outstanding, and 1,000
shares of preferred stock, $0.01 par value per share authorized and no shares
outstanding. As a result of this transaction, all of Alamosa (Delaware)'s common
stock is owned by Alamosa PCS Holdings, Inc.

--------------------------------------------------------------------------------
                                                                            F-23
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. INCOME TAXES

Income tax expense (benefit) is comprised of the following:

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                    ----------------------------------------
                                                        2002           2001          2000
                                                    ------------   ------------   ----------
<S>                                                 <C>            <C>            <C>
Current:
 U.S. Federal ...................................    $      --      $      --      $    --
 Foreign ........................................           --             --           --
 State ..........................................           --             --           --
                                                     ---------      ---------      -------
   Total current expense ........................           --             --           --
                                                     ---------      ---------      -------
Deferred:
 U.S. Federal ...................................      (58,938)       (70,569)          --
 Foreign ........................................           --             --           --
 State ..........................................       (8,148)        (9,872)          --
                                                     ---------      ---------      -------
   Total deferred expense (benefit) .............      (67,086)       (80,441)          --
                                                     ---------      ---------      -------
   Total income taxes expense (benefit) .........    $ (67,086)     $ (80,441)     $    --
                                                     =========      =========      =======
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below:

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                  -----------------------------
                                                       2002            2001
                                                  -------------   -------------
<S>                                               <C>             <C>
Deferred tax assets:
 Net operating loss carryforwards .............     $ 170,791       $ 101,890
 Original issue discount ......................        30,045          18,795
 Non-cash compensation ........................         1,728           1,741
 Start-up expenses ............................           472             781
 Deferred rent ................................         1,898           2,128
 Bad debt allowance ...........................         3,468           3,622
 Capitalized loan costs .......................         2,593           3,227
 Deferred revenue .............................            --           1,969
 Other comprehensive income ...................           916             580
 Other ........................................         1,295             828
                                                    ---------       ---------
   Gross deferred tax assets ..................       213,206         135,561
Deferred Tax liabilities:
 Intangible assets ............................       185,600         200,959
 Depreciation .................................        45,802          25,383
 Other ........................................         3,510              47
                                                    ---------       ---------
Net deferred tax assets (liabilities) .........       (21,706)        (90,828)
Valuation allowance ...........................            --              --
                                                    ---------       ---------
Deferred tax balance ..........................     $ (21,706)      $ (90,828)
                                                    =========       =========
</TABLE>

The net deferred tax asset was fully reserved as of December 31, 2000 because
of uncertainty regarding the Company's ability to recognize the benefit of the
asset in future years. In connection with the acquisitions in 2001 discussed in
Note 4, a significant deferred tax liability was recorded. The reversal of the
timing differences which gave rise to the deferred tax liability will allow the
Company to benefit from the deferred tax assets. As such, the valuation
allowance was released in 2001 with a corresponding reduction to goodwill
associated with the acquisitions. Due to the Company's limited operating
history and lack of positive taxable earnings it is likely that a valuation
allowance will be established during 2003 when the deferred tax asset is
expected to exceed the deferred tax liabilities recorded in 2001. Prior to
February 1,


--------------------------------------------------------------------------------
F-24
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2000, the Company's predecessor operated as a Limited Liability Company ("LLC")
under which losses for income tax purposes were utilized by the LLC members on
their separate income tax returns. Subsequent to January 31, 2000, the Company
became a C-Corp for federal income tax purposes and therefore subsequent losses
from operations became net operating loss carryforwards of the Company.

The provision for income taxes is different than the amount computed using the
applicable statutory federal income tax rate due to the differences summarized
below:

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                              ------------------------------------------------
                                                                   2002             2001             2000
                                                              --------------   --------------   --------------
<S>                                                           <C>              <C>              <C>
Federal tax benefit at statutory rate .....................        (35.00)%         (35.00)%         (35.00)%
                                                                   ======           ======           ======
Goodwill impairment .......................................         21.70%              --%              --%
Other permanent differences ...............................          0.11             2.51               --
State taxes ...............................................         (1.13)           (2.79)              --
Predecessor Limited Liability Company .....................            --               --             1.45
Adjustment due to increase in valuation allowance .........            --               --            33.40
Other .....................................................          0.04            (0.02)            0.15
                                                                   ------           ------           ------
Provision (benefit) for income taxes ......................        (14.28)%         (35.30)%           0.00%
                                                                   ======           ======           ======
</TABLE>

As of December 31, 2002, the Company has available net operating loss
carryforwards totaling approximately $449 million which expire beginning in
2020. Utilization of net operating loss carryforwards may be limited by
ownership changes which could occur in the future.


12. SPRINT AGREEMENTS

In accordance with the Company's affiliation agreements with Sprint, Sprint
provides the company various services including billing, customer care,
collections and inventory logistics. In addition, Sprint bills the Company for
various pass-through items such as commissions to national retail merchants,
handset subsidies on handsets activated in the Company's territory but not sold
by the Company and long distance charges.

In addition to the fees discussed above, the Company pays Sprint an affiliation
fee equal to 8% of collected revenue as it is defined in the affiliate
agreements. This fee is withheld from amounts collected from subscribers when
such collections are remitted to the Company.

Expenses reflected in the consolidated statements of operations related to the
Sprint affiliation agreements are:

<TABLE>
<CAPTION>
                                                 YEAR ENDED DECEMEBR 31,
                                          --------------------------------------
                                              2002          2001         2000
                                          -----------   -----------   ----------
<S>                                       <C>           <C>           <C>
Cost of service and operation .........    $219,866      $152,724      $33,005
Cost of products sold .................      50,974        53,911       20,524
Selling and marketing .................      46,132        27,421       10,763
                                           --------      --------      -------
   Total ..............................    $316,972      $234,056      $64,292
                                           ========      ========      =======
</TABLE>

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

The Company relies upon Sprint as a service provider to provide accurate
information for the settlement of revenue and expense items. The Company makes
estimates used in connection with the preparation of financial statements based
on the financial and statistical information provided by Sprint. The Company
assesses the accuracy of this information through analytic review and reliance
on the service auditor report on Sprint's internal control processes prepared by
Sprint's external service auditor. Inaccurate or incomplete data from Sprint in
connection with the services provided to the Company by Sprint could have a
material effect on the Company's financial position, results of operation or
cash flow.

--------------------------------------------------------------------------------
                                                                            F-25
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. RELATED PARTY TRANSACTIONS

AGREEMENTS WITH CHR SOLUTIONS, INC. -- The Company has entered into a number of
agreements with CHR Solutions, Inc. ("CHR") to perform various consulting and
engineering services. CHR resulted from a merger between Hicks & Ragland
Engineering Co., Inc., and Cathey, Hutton & Associates, Inc. effective as of
November 1, 1999. At the time the agreements were executed, the Company's CEO
was the President and Chief Executive Officer of Hicks & Ragland. As of
December 2000, the Company's CEO resigned his position on the Board of CHR, and
is no longer an employee of CHR. Total amounts paid under the above agreements
were $1,063, $3,596 and $6,334 for the years ended December 31, 2002, 2001 and
2000, respectively. Amounts included in accounts payable for the above
agreement totaled $0 and $423 at December 31, 2002 and 2001, respectively.

AGREEMENTS WITH TECH TELEPHONE COMPANY -- The Company entered into a
telecommunications service agreement with Tech Telephone Company Limited
Partnership ("TechTel") to install and provide telecommunications lines between
Sprint PCS and the Company's Lubbock-based operations and between the Company's
Lubbock-based operations and other markets. TechTel is a limited partnership
whose general partner is an entity controlled by the CEO of the Company. The
original term of the agreement is three years, but the agreement automatically
renews upon expiration for additional successive 30-day terms by either party.
The Company has also entered into a distribution agreement with TechTel,
authorizing it to become a third party distributor of Sprint PCS products and
services for the Company in Lubbock, Texas. The total amount paid for these
contracts was $1,157, $1,315 and $1,707 during the years ended December 31,
2002, 2001 and 2000, respectively. The amounts included in accounts payable
relative to these contracts were $89 and $92 at December 31, 2002 and 2001,
respectively. TechTel was sold to an unrelated third party in October 2002.


AGREEMENTS WITH MESSRS. MICHAEL V. ROBERTS AND STEVEN C. ROBERTS

In connection with the acquisition of Roberts, Alamosa Holdings entered into a
number of arrangements with Messrs. Michael V. Roberts and Steven C. Roberts
and certain companies affiliated with them as described in more detail below.
Michael V. Roberts and Steven C. Roberts became directors of the Company in
February 2001.

JOINT VENTURE DEVELOPMENT AGREEMENT -- On October 30, 2000, Alamosa Holdings
entered into a joint venture development agreement with Messrs. Michael V.
Roberts and Steven C. Roberts. Pursuant to the agreement, if either Mr. Michael
V. Roberts or Mr. Steven C. Roberts undertakes an international
telecommunications business venture and desires for Alamosa Holdings to be
involved in that project, then before either Mr. Michael V. Roberts or Mr.
Steven C. Roberts enters into a letter of intent or binding agreement of any
nature with another person regarding the project, they must give Alamosa
Holdings written notice. Alamosa Holdings has 60 days to notify them of its
desire to participate in the project. During such 60-day period, Alamosa
Holdings has the exclusive right with respect to the project. Promptly after
Alamosa Holdings gives a notice of participation, Alamosa Holdings and either
Mr. Michael V. Roberts or Mr. Steven C. Roberts must form a project entity and
execute an agreement setting forth the terms, covenants, conditions and
provisions for the purpose, ownership, management, financing and operation of
the project. Unless Alamosa Holdings and either Mr. Michael V. Roberts or Mr.
Steven C. Roberts agree to a different arrangement, Alamosa Holdings will have
a 50% interest in each project entity and will have full managerial control of
each project entity. Except as described above, neither Alamosa Holdings nor
Messrs. Michael V. Roberts and Steven C. Roberts is obligated to bring to the
other any opportunity to participate in a project or any activity, domestic or
international.

CONSULTING AGREEMENTS -- On January 29, 2001, Alamosa Holdings entered into
five-year consulting agreements with each of Messrs. Michael V. Roberts and
Steven C. Roberts. The consulting agreements provide each of them with an
annual compensation of $125, which is paid monthly.

RIGHT OF FIRST NEGOTIATION AGREEMENT -- On February 14, 2001, Alamosa Holdings
entered into a right of first negotiation agreement with Roberts Tower which
grants Roberts Tower a right to negotiate tower leases on a "build-to-suit"
basis with Alamosa Holdings' present and future territory. During the term of
the agreement, whenever Alamosa Holdings or one of its subsidiaries is required
to "build-to-suit" communications towers within the present or future
territories in which Alamosa Holdings operates,


--------------------------------------------------------------------------------
F-26
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Alamosa Holdings must notify Roberts Tower and Roberts Tower will have the
exclusive right for a period of 30 days to negotiate with the company to
provide such towers. After such 30-day period, if Alamosa Holdings has not
reached an agreement with Roberts Tower, Alamosa Holdings may obtain such tower
sites from other third parties. The term of this agreement is five years.

RESALE AGREEMENT -- On February 14, 2001, Alamosa Holdings entered into a
resale agreement with Messrs. Michael V. Roberts and Steven C. Roberts which
permits Messrs. Michael V. Roberts and Steven C. Roberts to buy air time at a
discount for resale on a basis no less favorable than any other similar
agreement to which Alamosa Holdings may be a party. Messrs. Michael V. Roberts
and Steven C. Roberts may resell such airtime anywhere such resales are
permitted under applicable law. Any arrangement between Alamosa Holdings and
Messrs. Michael V. Roberts and Steven C. Roberts for resales and use of air
time will be subject to all required approvals of Sprint, Sprint Spectrum and
Sprint PCS and/or any other applicable Sprint entities.

MASTER LEASE AGREEMENT -- On February 14, 2001, Roberts and Roberts Tower
entered into a master lease agreement which provides for the lease from Roberts
Tower by Roberts of certain buildings, towers, tanks and/or improvements
thereon for the purpose of installing, operating and maintaining communications
facilities and services thereon. The initial term of the master lease agreement
expires in February 2006, and Roberts has the right to extend the initial term
of the lease for four additional terms of five years each. The agreement
provides for monthly payments aggregating to approximately $17 per tower per
year at inception, subject to an annual adjustment of 4% per annum. Roberts
subsequently assigned all of its right, title and interest in the master lease
agreement to its wholly owned subsidiary, Alamosa Missouri Properties, LLC
(formerly Roberts Wireless Properties, L.L.C). During the years ended December
31, 2002 and 2001, approximately $2,688 and $2,264, respectively, in rental
expense was recorded under this agreement.

In addition to the specific agreements discussed above, the Company paid $346
and $361 in 2002 and 2001, respectively, to Roberts Tower for other items
including the lease of retail space and switching facility space.

OTHER RELATED PARTY TRANSACTIONS -- In November 1998, the Company entered into
an agreement to lease space for telephone switching equipment in Albuquerque
with SASR Limited Partnership which was then 50% owned by one of the Company's
then directors who was also a manager of West Texas PCS, LLC and Budagher
Family LLC, two of Alamosa Holdings' stockholders. The lease has a term of five
years with two optional five-year terms. The lease provides for monthly
payments aggregating to $19 per year at inception with a 10% increase at the
beginning of the two option periods, as well as a pro rata portion of real
estate taxes on the property. This lease was transferred to an unrelated entity
by SASR Limited Partnership in July, 2001. This director resigned from the
board in 2002.

On December 28, 1998, the Company entered into a long-term agreement to lease
space for a retail store in Lubbock, Texas with Lubbock HLH, Ltd., principally
owned by one of the Company's directors and the general manager of South Plains
Advance Communications & Electronics, Inc. ("SPACE"). SPACE is a stockholder of
Alamosa Holdings. This lease has a term of 15 years and provides for monthly
payments subject to adjustment based on the Consumer Price Index on the first
day of the sixth lease year and on the first day of the eleventh lease year.
During the years ended December 31, 2002, 2001 and 2000, $110 per year in
rental expense was recorded in connection with this lease. No amount was
payable at December 31, 2002. In addition to rental, $20, $38 and $0 was paid
to Lubbock HLH, Ltd. In 2002, 2001 and 2000, respectively, for taxes and other
expenses related to the leased property.


14. EMPLOYEE BENEFITS

Effective November 13, 1998, the Company elected to participate in the NTCA
Savings Plan, a defined contribution employee savings plan sponsored by the
National Telephone Cooperative Association under Section 401(k) of the Internal
Revenue Code. No employer contributions were made to this plan for the period
ended December 31, 2000 or 1999.

Effective July 1, 2000, the Company formed the Alamosa PCS Contributions
Savings Plan ("Company Plan"), a defined contribution employee savings plan
sponsored by the Company under Section 401(k) of the Internal Revenue Code.
Existing balances held in the NTCA Savings Plan were transferred to the


--------------------------------------------------------------------------------
                                                                            F-27
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Company Plan on July 1, 2000 and all contributions to the NTCA Savings Plan
ceased at that time. During the years ended December 31, 2002, 2001 and 2000,
the Company made contributions of $1,058, $900 and $188, respectively to the
Company Plan.

In connection with the acquisition of WOW discussed in Note 4, employees who
were formerly employees of WOW continue to participate in the Washington Oregon
Wireless 401(k) Savings & Investment Plan, a defined contribution employee
savings plan sponsored by the Company under Section 401(k) of the Internal
Revenue Code. During the years ended December 31, 2002 and 2001, the Company
made contributions of $36 and $41, respectively, to the WOW plan. Effective
January 1, 2003 the WOW plan was merged into the Company Plan.

Effective March 1, 2001, Alamosa Holdings adopted the Alamosa Holdings, Inc.
Employee Stock Purchase Plan ("ESPP"). The ESPP provides that eligible
employees may contribute up to 10% of their earnings towards the purchase of
Alamosa Holdings common stock. The employee per share purchase price is 85% of
the fair market value of Alamosa Holdings shares on (i) the offering date or
(ii) the exercise date, whichever is lower. During the years ended December 31,
2002 and 2001, Alamosa Holdings shares totaling 585,191 and 40,706,
respectively, were issued in connection with purchases by employees under the
ESPP. As of December 31, 2002 and 2001, 174,103 and 559,294 Alamosa Holdings
shares were reserved for issuance under the ESPP.


15. STOCK-BASED COMPENSATION

The Company adopted an Incentive Stock Option Plan (the "Plan") effective
November 12, 1999, which provides for the granting of either incentive stock
options or nonqualified stock options to purchase shares of Alamosa Holdings'
common stock and for other stock-based awards to officers, directors and key
employees for the direction and management of the Company and to non-employee
consultants and independent contractors. At December 31, 2002, 6,176,559 shares
of Alamosa Holdings common stock were reserved for issuance under the Plan. The
stock option committee of the Board of Directors of Alamosa Holdings
administers the Plan and determines grant prices and vesting periods.
Generally, the options under the Plan vest in varying increments over a three
to five-year period, expire ten years from the date of grant and are issued at
exercise prices no less than 100% of the fair market value of common stock at
the time of the grant.

The Company applies APB No. 25, "Accounting for Stock Issued to Employees" and
related interpretation, in accounting for its employee stock options. The
Company initially recorded unearned compensation totaling $14,963 relative to
the intrinsic value of options granted. This amount was being recognized over
the vesting period in accordance with FASB Interpretation No. 28 when
applicable. For the year ended December 31, 2000, non-cash compensation of
$5,651 was recognized. Non-cash compensation for 2001 was a negative $916 due
to the forfeiture of unvested options. No non-cash compensation was recorded in
2002 relative to options as all unvested options for which unearned
compensation had been recorded were forfeited in 2001.

The weighted-average fair value for all stock options granted in 2000 and 2001
was $12.18 and $9.01 per share, respectively. The weighted-average fair value
for stock options granted during 2002 with an exercise price equal to the fair
market value at the date of grant ("at the money") was $1.85 per share. The
weighted-average fair value for stock options granted during 2002 with an
exercise price greater than the fair market value at the date of grant ("out of
the money") was $0.23 per share. The fair value of each stock option granted is
estimated on the date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions:

<TABLE>
<CAPTION>
                                              YEAR ENDED DECEMBER 31,
                                     -----------------------------------------
                                         2002           2001           2000
                                     ------------   ------------   -----------
<S>                                  <C>            <C>            <C>
Dividend yield ...................       0%              0%             0%
Expected volatility ..............     106%             81%            72%
Risk-free rate of return .........     3.0%            4.6%           6.3%
Expected life ....................    4.00 years      4.00 years     4.07 years
</TABLE>

--------------------------------------------------------------------------------
F-28
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following summarizes activity under the Company's stock option plans:

<TABLE>
<CAPTION>
                                                                                           WEIGHTED AVERAGE EXERCISE
                                                                                      -----------------------------------
                                                       NUMBER OF OPTIONS                        PRICE PER SHARE
                                          ------------------------------------------- -----------------------------------
                                                     YEAR END DECEMBER 31,                   YEAR END DECEMBER 31,
                                          ------------------------------------------- -----------------------------------
                                               2002           2001           2000         2002        2001        2000
                                          ------------- --------------- ------------- ----------- ----------- -----------
<S>                                       <C>           <C>             <C>           <C>         <C>         <C>
Options outstanding at beginning of the
 period .................................   5,505,878       6,788,752     5,282,000    $  16.55    $  16.87    $  12.47
Granted:
 At the money ...........................   1,370,195         635,061     2,131,750        2.57       14.87       17.17
 Out of the money .......................   1,500,046              --            --        0.38          --          --
Exercised ...............................        (250)        (15,945)     (538,748)       3.90       14.95        1.48
Canceled/forfeited ......................    (507,374)     (1,901,990)      (86,250)      15.20       16.85       12.35
                                            ---------      ----------     ---------    --------    --------    --------
Options outstanding at the end of the
 period .................................   7,868,495       5,505,878     6,788,752    $  11.12    $  16.55    $  16.87
                                            =========      ==========     =========    ========    ========    ========
Options exercisable at end of the period    4,216,112       2,602,368     1,615,502    $  14.66    $  16.33    $  16.75
                                            =========      ==========     =========    ========    ========    ========
</TABLE>

The following table summarizes information for stock options at December 31,
2002:

<TABLE>
<CAPTION>
                                       OUTSTANDING                        EXERCISABLE
                         ----------------------------------------   -----------------------
                                        WEIGHTED                                   WEIGHTED
                                         AVERAGE      REMAINING                    AVERAGE
       RANGE OF           NUMBER OF     EXERCISE     CONTRACTUAL     NUMBER OF     EXERCISE
    EXERCISE PRICE         OPTIONS        PRICE          LIFE         OPTIONS       PRICE
----------------------   -----------   ----------   -------------   -----------   ---------
<S>          <C>         <C>           <C>          <C>             <C>           <C>
$ 0.23           0.33      322,812      $  0.29           9.8         138,850     $  0.24
  0.38           0.45    1,521,546         0.38           9.8         120,006        0.38
  0.84           1.25      391,741         0.91           9.4          64,666        1.19
  1.41           1.42       85,833         1.42           8.6          85,833        1.42
  3.52           5.04      522,543         4.90           9.3         172,240        4.65
  6.46           8.00       29,610         7.68           8.2          17,590        8.00
 10.25          15.31      678,078        13.39           7.8         370,189       13.04
 15.67          23.25    4,247,332        17.10           6.4       3,219,138       17.09
 26.25          28.50       69,000        26.87           7.6          27,600       26.87
                         ---------      -------           ---       ---------     -------
$ 0.23          28.50    7,868,495      $ 11.12           7.7       4,216,112     $ 14.66
                         =========      =======           ===       =========     =======
</TABLE>

16. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash, accounts payable, and accrued expenses
approximate fair value because of the short maturity of these items.

The carrying amount of the Senior Secured Credit Facility approximates fair
value at December 31, 2002 because the interest rate changes with market
interest rates.

Selected information related to the Company's senior notes is a follows:

<TABLE>
<CAPTION>
                                        DECEMBER 31,
                                  -------------------------
                                      2002          2001
                                  -----------   -----------
<S>                               <C>           <C>
Book value ....................    $668,862      $637,207
Fair value ....................     187,500       629,500
                                   --------      --------
Net unrecognized gain .........    $481,362      $  7,707
                                   ========      ========
</TABLE>

The Company adopted the provisions of SFAS No. 133, "Accounting for Derivatives
and Hedging Activities," effective January 1, 2001. This statement requires
that all derivatives be recorded on the balance sheet at fair value. If the
derivative is a hedge, depending on the nature of the hedge, changes in the
fair


--------------------------------------------------------------------------------
                                                                            F-29
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

value of the derivatives are either recognized in earnings or are recognized in
other comprehensive income until the hedged item is recognized in earnings.

In order to manage interest costs and exposure to changing interest rates, the
Company enters into interest rate hedges to hedge exposure to variable interest
rates on a portion of the Senior Secured Credit Facility. At December 31, 2002,
the Company had entered into the following interest rate swaps.

<TABLE>
<CAPTION>
                                                                FAIR VALUE
                                                              AT DECEMBER 31,
                                                        ---------------------------
         INSTRUMENT             NOTIONAL       TERM         2002           2001
----------------------------   ----------   ---------   ------------   ------------
<S>                            <C>          <C>         <C>            <C>
4.9475% Interest rate swap      $21,690     3 years       $ (1,121)      $   (650)
4.9350% Interest rate swap      $28,340     3 years         (1,385)          (865)
                                                          --------       --------
                                                          $ (2,506)      $ (1,515)
                                                          ========       ========
</TABLE>

These swaps are designated as cash flow hedges such that the fair value is
recorded as a liability in the consolidated balance sheets with changes in fair
value (net of tax) shown as a component of other comprehensive income.

The Company also maintains an interest rate collar with the following terms:

<TABLE>
<CAPTION>
                                                                               FAIR VALUE
                                                                            AT DECEMBER 31,
                                                                       --------------------------
 NOTIONAL      MATURITY     CAP STRIKE PRICE     FLOOR STRIKE PRICE         2002          2001
----------   -----------   ------------------   --------------------   -------------   ----------
<S>          <C>           <C>                  <C>                    <C>             <C>
$28,340      5/15/2004             7.00%                 4.12%           $  (1,112)      $ (656)
</TABLE>

This collar does not receive hedge accounting treatment such that the fair
value is reflected as a liability in the consolidated balance sheets and the
decrease in fair value of $456 and $656 has been reflected as an increase to
interest expense for the years ended December 31, 2002 and 2001, respectively.

Approximately $2,188 and $1,286 in settlements under the above hedging
instruments are included in interest expense for the years ended December 31,
2002 and 2001, respectively.

In addition to the swaps and collar discussed above, the Company purchased an
interest rate cap in February 2002 with a notional amount of $5,000 and a
strike price of 7.00%. This cap does not receive hedge accounting treatment and
the fair value reflected in the consolidated balance sheet is less than $1.

These fair value estimates were obtained from the institutions the Company
entered into the agreements with and are subjective in nature and involve
uncertainties and matters of considerable judgment and therefore, cannot be
determined with precision. Changes in assumptions could significantly affect
these estimates.


17. COMMITMENTS AND CONTINGENCIES

EMPLOYMENT AGREEMENTS -- On October 14, 1998, the then Board of Members of the
Company approved an Incentive Ownership Plan. The plan consisted of 3,500 units
comprised of 1,200 Series 8, 1,150 Series 15 and 1,150 Series 25 units. The
exercise price for each series was based on a pre-defined strike price which
increased by an annual rate of 8%, 15% or 25% compounded monthly beginning July
1, 2000. The initial exercise prices were $564.79, $623.84 and $711.88 for
Series 8, Series 15 and Series 25 options, respectively. Each unit provided the
holder an option to purchase an interest in the Company. Vested units could
have been exercised any time from July 1, 2000 to December 31, 2006.

On October 29, 1998, under an employment agreement with the Company's then
Chief Technology Officer, 300 units were granted under this plan. The options
to acquire membership interests described above were to be exchanged for
options to acquire an equivalent number of common shares: 48,500 at $1.13 per
share, 48,500 at $1.25 per share and 48,500 at $1.42 per share. Effective as of
the IPO, these options were converted into options of the Company and were
amended such that the original options with exercise prices that increased by
an annual rate of 8%, 15%, or 25% (compounded monthly beginning July 1, 2000)
were exchanged for options to purchase an equivalent number of common shares at
fixed exercise prices


--------------------------------------------------------------------------------
F-30
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

equal to $1.13, $1.25 and $1.42 per share, which would not increase over the
term of the options. These amendments resulted in a new measurement date. The
Company recorded compensation expense totaling $2,096 in connection with these
options. Compensation expense recorded for the year ended December 31, 2000 was
$836. No compensation expense was recorded in 2001 or 2002.

Effective October 1, 1999, the Company entered into a three-year employment
agreement with its Chief Executive Officer ("CEO"), and Chairman of the Board.
In addition, in December 1999, the Company granted options to the CEO to
acquire 242,500 common shares at an exercise price of $1.15 per share which
vested immediately prior to the completion of the initial public offering and
1,455,000 shares at an exercise price equal to the initial public offering
price which vest 33% per year beginning September 30, 2000. The options expire
January 5, 2009. The Company recognized compensation expense of $3,116 related
to the 242,500 options issued with an exercise price below the initial public
offering price over the options vesting period. Compensation expense recorded
for the year ended December 31, 2000 was $2,765. No compensation expense was
recorded in 2001 or 2002. Alamosa Holdings entered into a new employment
agreement with its CEO and Chairman of the Board on October 1, 2002 as
discussed below.

On October 2, 1998, the Company entered into an employment agreement with its
then Chief Operating Officer ("COO"). The agreement provided for the granting
of stock options in three series. The initial exercise price was determined
based on the following formula: $48,500, committed capital at September 30,
1998, multiplied by the percentage interest represented by the option
exercised. The exercise price for each series increased by an annual rate of
8%, 15% or 25% compounded monthly beginning at the date of grant as specified
by the agreement. Options could be exercised any time from January 1, 2004 to
January 5, 2008. The options vested over a three-year period. During 1998, one
option from each series was granted under this agreement. The options to
acquire membership interests described above were to be exchanged for options
in Holdings to acquire an equivalent number of common shares: 242,500 at $1.08
per share, 242,500 at $1.15 per share and 242,500 at $1.25 per share. Effective
December 1999, the Company amended the COO's options such that each of the
COO's three series of original options were exchanged for two options to
acquire a total of 1,697,500 shares of common stock. The first option to
acquire 242,500 shares of common stock had a fixed exercise price of $1.15 per
share and vested immediately prior to completion of the initial public
offering. The second option to acquire 1,455,000 shares of common stock had an
exercise price equal to the initial public offering price and vested 25% per
year beginning September 30, 2000. The expiration date of all of the COO's
options was extended from January 5, 2008 to January 5, 2009. These amendments
resulted in a new measurement date. The Company was to record compensation
expense totaling $9,341 in connection with these options. Compensation expense
recorded for the year ended December 31, 2000 was $1,640. This individual left
the Company in January 2001 and forfeited all unexercised options. As such,
compensation expense in 2001 was negative $916 due to the forfeiture of these
option. The former COO initiated litigation against the Company in 2002 as
discussed under "Litigation" below. No compensation expense was recorded in
2002.

Effective December 1, 1999, the Company entered into a five-year employment
agreement with its Chief Financial Officer ("CFO"). In addition, the Company
granted the CFO options to purchase 1,455,000 shares at the initial public
offering price and that will expire January 5, 2009. There is no compensation
cost related to these options. Alamosa Holdings entered into a new employment
agreement with its CFO and other executives on October 1, 2002 as discussed
below.

Effective October 1, 2002, Alamosa Holdings entered into employment agreements
with its CEO, CFO, Chief Technology Officer ("CTO"), Chief Marketing Officer
("CMO") and Senior Vice President of Corporate Finance ("SVP"). The terms of
the agreements were five years for the CEO and three years for the other
officers. In connection with these employment agreements, options were granted
to the executives to acquire a total of 1,700,000 Alamosa Holdings common
shares at an exercise price equal to the fair market value at the date of grant
such that no compensation expense was recognized in connection with these
options. These options vest over the terms of the respective agreements.

In addition to the option grants, the respective executives were also awarded a
total of 700,000 shares of restricted Alamosa Holdings stock for which the
Company received $0.01 per share at the date of grant. These restricted shares
vest over a three year period and compensation expense will be recorded during
the vesting period totaling $224.


--------------------------------------------------------------------------------
                                                                            F-31
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Effective December 1, 2002, Alamosa Holdings entered into an employment
agreement with its Chief Operating Officer ("COO"). The terms of this agreement
are similar to the October 1, 2002 agreements entered into with the other
officers of the Company. The length of the agreement is three years. Options to
acquire 300,000 Alamosa Holdings common shares were awarded with an exercise
price equal to the fair market value at the date of grant. Alamosa Holdings
restricted stock totaling 100,000 shares were awarded that vest over a three
year period for which the Company received $0.01 per share. Compensation
expense of $99 will be recognized over the vesting period.

LITIGATION -- Alamosa PCS Holdings, Inc. has been named as a defendant in a
number of purported securities class actions in the United States District
Court for the Southern District of New York, arising out of its initial public
offering (the "IPO"). Various underwriters of the IPO also are named as
defendants in the actions. The action against Alamosa PCS Holdings, Inc. is one
of more than 300 related class actions which have been consolidated and are
pending in the same court. The complainants seek to recover damages and allege,
among other things, that the registration statement and prospectus filed with
the Securities and Exchange Commission for purposes of the IPO were false and
misleading because they failed to disclose that the underwriters allegedly (i)
solicited and received commissions from certain investors in exchange for
allocating to them shares of common stock in connection with the IPO, and (ii)
entered into agreements with their customers to allocate such stock to those
customers in exchange for the customers agreeing to purchase additional Alamosa
PCS Holdings, Inc. shares in the aftermarket at pre-determined prices.

On February 19, 2003, the Court granted motions by Alamosa PCS Holdings, Inc.
and 115 other issuers to dismiss the the claims under Rule 10b-5 of the
Exchange Act which had been asserted against them. The Court denied the motions
by Alamosa PCS Holdings, Inc. and virtually all of the other issuers to dismiss
the claims asserted against them under Section 11 of the Securities Act. The
Company maintains insurance coverage which may mitigate its exposure to loss in
the event that this claim is not resolved in the Company's favor.

On January 23, 2001, Jerry Brantley, then President and COO of the Company,
terminated his employment with the Company at the unanimous request of the
board of directors. On April 29, 2002, Mr. Brantley initiated litigation
against Alamosa PCS Holdings, Inc. and the Chairman of the Company, David E.
Sharbutt in the District Court of Lubbock County, Texas, 22nd Judicial
District, alleging wrongful termination among other things. On September 27,
2002, the Court entered an Agreed Order Compelling Arbitration. The parties are
in the process of selecting a panel of three arbitrators. The Company believes
that there is no basis for Mr. Brantley's claim and intends to vigorously
defend the lawsuit.

On January 8, 2003 a claim was made against Alamosa Holdings by Southwest
Antenna and Tower, Inc. ("SWAT") in the Second Judicial District Court, County
of Bernalillo, State of New Mexico, for monies due on an open account. SWAT
seeks to recover approximately $1.6 million from the Company relative to work
performed by SWAT during 2000 for Roberts Wireless Communications, LLC which
was acquired by the Company in the first quarter of 2001. The Company is in the
process of gathering information relative to this claim and has recorded an
estimated liability relative to this contingency in the consolidated financial
statements at December 31, 2002.

The Company is involved in various claims and legal actions arising in the
ordinary course of business. The ultimate disposition of these matters are not
expected to have a material adverse impact on the Company's financial position,
results of operations or liquidity.

--------------------------------------------------------------------------------
F-32
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The quarterly results of operations (unaudited) for 2001 and 2002 by quarter
are as follows:

<TABLE>
<CAPTION>
                                                                    QUARTER ENDED
                                             -----------------------------------------------------------
                                               MARCH 31        JUNE 30      SEPTEMBER 30     DECEMBER 31
                                             ------------   ------------   --------------   ------------
(in thousands, except per share amounts)
<S>                                          <C>            <C>            <C>              <C>
2001:
 Net sales ...............................    $  45,835      $  83,535       $  107,874      $ 119,895
 Operating loss ..........................      (28,791)       (34,303)         (38,622)       (50,610)
 Net loss ................................      (27,431)       (34,336)         (37,712)       (47,944)
2002:
 Net sales ...............................    $ 128,387      $ 130,789       $  147,428      $ 149,088
 Operating loss ..........................      (21,754)       (21,302)        (313,173)       (14,215)
 Net loss ................................      (28,133)       (28,736)        (320,847)       (25,046)
</TABLE>

As discussed in Note 7, the Company recorded a charge relative to its first
annual impairment test of goodwill under SFAS 142 in the third quarter of 2002.
The amount of this charge was $291,635 and is reflected in the operating loss
for the third quarter of 2002.


19. GUARANTOR FINANCIAL STATEMENTS

Set forth below are consolidating financial statements of the issuer and
grantor subsidiaries and Alamosa Operations, Inc. ("Operations") which is the
Company's non-guarantor subsidiary (the "Non-Guarantor Subsidiary") of the
12 7/8% Senior Discount Notes, the 12 1/2% Senior Notes and the 13 5/8% Senior
Notes as of December 31, 2002 and 2001 and for the years ended December 31,
2002, 2001 and 2000. Separate financial statements of each guarantor subsidiary
have not been provided because management has determined that they are not
material to investors.


--------------------------------------------------------------------------------
                                                                            F-33
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

(Dollars in thousands, except as noted)


CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2002
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                           GUARANTOR
                                                              ISSUER     SUBSIDIARIES
                                                          ------------- --------------
<S>                                                       <C>           <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents ..............................  $    17,821    $   42,681
 Short term investments .................................           --            --
 Restricted cash ........................................       34,725            --
 Customer accounts receivable, net ......................           --        27,926
 Receivable from Sprint .................................           --        30,322
 Interest receivable ....................................          973            --
 Intercompany receivable ................................       93,191           587
 Inventory ..............................................           --         7,410
 Investment in subsidiary ...............................      656,369            --
 Prepaid expenses and other assets ......................           --         7,239
 Deferred customer acquisition costs ....................           --         7,312
 Deferred tax asset .....................................           --         5,988
                                                           -----------    ----------
  Total current assets ..................................      803,079       129,465
Notes receivable ........................................           --        35,005
Property and equipment, net .............................           --       458,946
Debt issuance costs, net ................................       20,484        12,867
Intangible assets, net ..................................           --       488,421
Other noncurrent assets .................................           --         7,802
                                                           -----------    ----------
  Total assets ..........................................  $   823,563    $1,132,506
                                                           ===========    ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
 Accounts payable .......................................  $        --    $   27,203
 Accrued expenses .......................................            3        34,900
 Payable to Sprint ......................................           --        24,649
 Interest payable .......................................       20,685         1,557
 Deferred revenue .......................................           --        18,901
 Intercompany payable ...................................          587        93,585
 Current installments of capital leases .................           --         1,064
                                                           -----------    ----------
  TOTAL CURRENT LIABILITIES .............................       21,275       201,859
Capital lease obligations ...............................           --         1,355
Other noncurrent liabilities ............................           --        45,646
Senior secured debt .....................................           --       200,000
12 7/8% senior discounts notes ..........................      268,862            --
12 1/2% senior notes ....................................      250,000            --
13 5/8% senior notes ....................................      150,000            --
Deferred tax liability ..................................           --        27,694
                                                           -----------    ----------
  Total liabilities .....................................      690,137       476,554
                                                           -----------    ----------
STOCKHOLDER'S EQUITY:
 Preferred stock ........................................           --            --
 Common stock ...........................................           --           485
 Additional paid-in capital .............................      799,403     1,162,593
 Accumulated (deficit) earnings .........................     (664,133)     (505,282)
 Unearned compensation ..................................         (294)         (294)
 Accumulated other comprehensive income, net of tax .....       (1,550)       (1,550)
                                                           -----------    ----------
  Total stockholder's equity ............................      133,426       655,952
                                                           -----------    ----------
  TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ............  $   823,563    $1,132,506
                                                           ===========    ==========



<CAPTION>
                                                           NON-GUARANTOR
                                                            SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                          -------------- --------------- -------------
<S>                                                       <C>            <C>             <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents ..............................   $      23     $          --   $   60,525
 Short term investments .................................          --                --           --
 Restricted cash ........................................          --                --       34,725
 Customer accounts receivable, net ......................          --                --       27,926
 Receivable from Sprint .................................          --                --       30,322
 Interest receivable ....................................          --                --          973
 Intercompany receivable ................................         394           (94,172)          --
 Inventory ..............................................          --                --        7,410
 Investment in subsidiary ...............................          --          (656,369)          --
 Prepaid expenses and other assets ......................          --                --        7,239
 Deferred customer acquisition costs ....................          --                --        7,312
 Deferred tax asset .....................................          --                --        5,988
                                                            ---------     -------------   ----------
  Total current assets ..................................         417          (750,541)     182,420
Notes receivable ........................................          --           (35,005)          --
Property and equipment, net .............................          --                --      458,946
Debt issuance costs, net ................................          --                --       33,351
Intangible assets, net ..................................          --                --      488,421
Other noncurrent assets .................................          --                --        7,802
                                                            ---------     -------------   ----------
  Total assets ..........................................   $     417     $    (785,546)  $1,170,940
                                                            =========     =============   ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
 Accounts payable .......................................   $      --     $          --   $   27,203
 Accrued expenses .......................................          --                --       34,903
 Payable to Sprint ......................................          --                --       24,649
 Interest payable .......................................          --                --       22,242
 Deferred revenue .......................................          --                --       18,901
 Intercompany payable ...................................          --           (94,172)          --
 Current installments of capital leases .................          --                --        1,064
                                                            ---------     -------------   ----------
  TOTAL CURRENT LIABILITIES .............................          --           (94,172)     128,962
Capital lease obligations ...............................          --                --        1,355
Other noncurrent liabilities ............................          --           (35,005)      10,641
Senior secured debt .....................................          --                --      200,000
12 7/8% senior discounts notes ..........................          --                --      268,862
12 1/2% senior notes ....................................          --                --      250,000
13 5/8% senior notes ....................................          --                --      150,000
Deferred tax liability ..................................          --                --       27,694
                                                            ---------     -------------   ----------
  Total liabilities .....................................          --          (129,177)   1,037,514
                                                            ---------     -------------   ----------
STOCKHOLDER'S EQUITY:
 Preferred stock ........................................          --                --           --
 Common stock ...........................................          --              (485)          --
 Additional paid-in capital .............................      (4,000)       (1,158,593)     799,403
 Accumulated (deficit) earnings .........................       4,417           500,865     (664,133)
 Unearned compensation ..................................          --               294         (294)
 Accumulated other comprehensive income, net of tax .....          --             1,550       (1,550)
                                                            ---------     -------------   ----------
  Total stockholder's equity ............................         417          (656,369)     133,426
                                                            ---------     -------------   ----------
  TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ............   $     417     $    (785,546)  $1,170,940
                                                            =========     =============   ==========
</TABLE>



--------------------------------------------------------------------------------
F-34
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                 GUARANTOR    NON-GUARANTOR
                                                    ISSUER     SUBSIDIARIES    SUBSIDIARY    ELIMINATIONS   CONSOLIDATED
                                                ------------- -------------- -------------- -------------- -------------
<S>                                             <C>           <C>            <C>            <C>            <C>
REVENUES:
 Subscriber revenues ..........................  $       --     $  391,927          $--        $     --     $  391,927
 Roaming revenues .............................          --        139,843           --              --        139,843
                                                 ----------     ----------          ---        --------     ----------
  Service revenues ............................          --        531,770           --              --        531,770
 Product sales ................................          --         23,922           --              --         23,922
                                                 ----------     ----------          ---        --------     ----------
  Total revenue ...............................          --        555,692           --              --        555,692
COSTS AND EXPENSES:
 Cost of services and operations ..............          --        343,468           --              --        343,468
 Cost of products sold ........................          --         50,974           --              --         50,974
 Selling and marketing ........................          --        119,059           --              --        119,059
 General and administrative expenses ..........         162         14,497           (3)             --         14,656
 Depreciation and amortization ................          --        105,121           --              --        105,121
 Impairment of goodwill .......................          --        291,635           --              --        291,635
 Impairment of property and equipment .........          --          1,194           --              --          1,194
 Non-cash compensation ........................          --             29           --              --             29
                                                 ----------     ----------          ---        --------     ----------
  Income (loss) from operations ...............        (162)      (370,285)           3              --       (370,444)
Equity in loss of subsidiaries ................    (319,154)            --           --         319,154             --
Interest and other income .....................       2,261          1,110           88              --          3,459
Interest expense ..............................     (85,707)       (17,156)          --              --       (102,863)
                                                 ----------     ----------          ---        --------     ----------
  Income (loss) before income tax benefit .....    (402,762)      (386,331)          91         319,154       (469,848)
Income tax benefit ............................          --         67,086           --              --         67,086
                                                 ----------     ----------          ---        --------     ----------
  Net income (loss) ...........................  $ (402,762)    $ (319,245)         $91        $319,154     $ (402,762)
                                                 ==========     ==========          ===        ========     ==========
</TABLE>


--------------------------------------------------------------------------------
                                                                            F-35
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2002
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                   GUARANTOR    NON-GUARANTOR
                                                     ISSUER      SUBSIDIARIES    SUBSIDIARY    ELIMINATIONS   CONSOLIDATED
                                                 -------------- -------------- -------------- -------------- -------------
<S>                                              <C>            <C>            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ..............................   $ (402,762)    $ (319,245)    $      91      $  319,154    $ (402,762)
Adjustments to reconcile net income (loss) to
 net cash provided by (used in) operating
 activities:
 Equity in loss of subsidiaries ................      319,154             --            --        (319,154)           --
 Non-cash compensation expense .................           --             29            --              --            29
 Non-cash interest on derivatives ..............           --            464            --              --           464
 Provision for bad debt ........................           --         40,285            --              --        40,285
 Depreciation and amortization of property
  and equipment ................................           --         64,702            --              --        64,702
 Amortization of intangibles ...................           --         40,419            --              --        40,419
 Amortization of financing costs included
  in interest expense ..........................        1,969          2,290            --              --         4,259
 Amortization of discounted interest ...........          395             --            --              --           395
 Deferred tax benefit ..........................           --        (67,086)           --              --       (67,086)
 Interest accreted on discount note ............       31,655             --            --              --        31,655
 Impairment of property and equipment ..........           --          1,194            --              --         1,194
 Impairment of goodwill ........................           --        291,635            --              --       291,635
 Loss from asset disposition ...................           --             41            --              --            41
 (Increase) decrease in:
  Receivables ..................................        1,420        (46,656)           --              --       (45,236)
  Inventory ....................................           --         (2,608)           --              --        (2,608)
  Prepaid expenses and other assets ............           16         (6,456)           --              --        (6,440)
 Increase (decrease) in:
  Accounts payable and accrued
   expenses ....................................         (720)        23,825            --              --        23,105
                                                   ----------     ----------     ---------      ----------    ----------
  NET CASH PROVIDED BY (USED IN)
   OPERATING ACTIVITIES ........................      (48,873)        22,833            91              --       (25,949)
                                                   ----------     ----------     ---------      ----------    ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from sale of assets ..................           --            451            --              --           451
 Purchases of property and equipment ...........           --        (89,476)           --              --       (89,476)
 Change in restricted cash .....................       48,115         11,853            --              --        59,968
 Intercompany receivable .......................       15,951           (868)      (15,083)             --            --
 Acquisition related costs .....................           --             58            --              --            58
 Net change in short term investments ..........        1,300             --            --              --         1,300
                                                   ----------     ----------     ---------      ----------    ----------
  NET CASH PROVIDED BY (USED IN) INVESTING
   ACTIVITIES ..................................       65,366        (77,982)      (15,083)             --       (27,699)
                                                   ----------     ----------     ---------      ----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Capital distributions .........................       (1,213)            --            --              --        (1,213)
 Borrowings under senior secured debt ..........           --         12,838            --              --        12,838
 Debt issuance cost ............................           --         (1,351)           --              --        (1,351)
 Payments on capital leases ....................           --           (773)           --              --          (773)
   NET CASH PROVIDED BY (USED IN) FINANCING
                                                   ----------     ----------     ---------      ----------    ----------
   ACTIVITIES ..................................       (1,213)        10,714            --              --         9,501
                                                   ----------     ----------     ---------      ----------    ----------
  Net increase (decrease) in cash and cash
   equivalents .................................       15,280        (44,435)      (14,992)             --       (44,147)
Cash and cash equivalents at beginning of
 period ........................................        2,541         87,116        15,015              --       104,672
                                                   ----------     ----------     ---------      ----------    ----------
Cash and cash equivalents at end of period .....   $   17,821     $   42,681     $      23      $       --    $   60,525
                                                   ==========     ==========     =========      ==========    ==========
</TABLE>



--------------------------------------------------------------------------------
F-36
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2001
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                     GUARANTOR    NON-GUARANTOR
                                                       ISSUER      SUBSIDIARIES    SUBSIDIARY      ELIMINATIONS    CONSOLIDATED
                                                   -------------- -------------- -------------- ----------------- -------------
<S>                                                <C>            <C>            <C>            <C>               <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents .......................   $    2,541     $   87,116      $ 15,015      $          --    $  104,672
 Short term investments ..........................        1,300             --            --                 --         1,300
 Restricted cash .................................       51,687             --            --                 --        51,687
 Customer accounts receivable, net ...............           --         38,717            --                 --        38,717
 Receivable from Sprint ..........................           --         13,160            --                 --        13,160
 Interest receivable .............................        2,393             --            --                 --         2,393
 Intercompany receivable .........................      109,140             --            --           (109,140)           --
 Inventory .......................................           --          4,802            --                 --         4,802
 Investment in subsidiary ........................      975,523             --            --           (975,523)           --
 Prepaid expenses and other assets ...............           16          4,733            --                 --         4,749
 Deferred customer acquisition costs .............           --          5,181            --                 --         5,181
 Deferred tax asset ..............................           --          8,112            --                 --         8,112
                                                     ----------     ----------      --------      -------------    ----------
  Total current assets ...........................    1,142,600        161,821        15,015         (1,084,663)      234,773
Notes receivable .................................           --         35,005            --            (35,005)           --
Property and equipment, net ......................           --        455,695            --                 --       455,695
Debt issuance costs, net .........................       22,848         13,806            --                 --        36,654
Restricted cash ..................................       31,153         11,853            --                 --        43,006
Goodwill, net ....................................           --        293,353            --                 --       293,353
Intangible assets, net ...........................           --        528,840            --                 --       528,840
Other noncurrent assets ..........................           --          6,087            --                 --         6,087
                                                     ----------     ----------      --------      -------------    ----------
  TOTAL ASSETS ...................................   $1,196,601     $1,506,460      $ 15,015      $  (1,119,668)   $1,598,408
                                                     ==========     ==========      ========      =============    ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
 Accounts payable ................................   $       --     $   44,012      $     --      $          --    $   44,012
 Accrued expenses ................................          723         28,568            --                 --        29,291
 Payable to Sprint ...............................           --         16,133            --                 --        16,133
 Interest payable ................................       20,685          1,438            --                 --        22,123
 Deferred revenue ................................           --         15,479            --                 --        15,479
 Intercompany payable ............................           --         94,451        14,689           (109,140)           --
 Current installments of capital leases ..........           --            596            --                 --           596
                                                     ----------     ----------      --------      -------------    ----------
  Total current liabilities ......................       21,408        200,677        14,689           (109,140)      127,634
Capital lease obligations ........................           --          1,983            --                 --         1,983
Other noncurrent liabilities .....................           --         42,501            --            (35,005)        7,496
Senior secured debt ..............................           --        187,162            --                 --       187,162
12 7/8% senior discounts notes ...................      237,207             --            --                 --       237,207
12 1/2% senior notes .............................      250,000             --            --                 --       250,000
13 5/8% senior notes .............................      150,000             --            --                 --       150,000
Deferred tax liability ...........................           --         98,940            --                 --        98,940
                                                     ----------     ----------      --------      -------------    ----------
  Total liabilities ..............................      658,615        531,263        14,689           (144,145)    1,060,422
                                                     ----------     ----------      --------      -------------    ----------
STOCKHOLDER'S EQUITY:
 Preferred stock .................................           --             --            --                 --            --
 Common stock ....................................           --            485            --               (485)           --
 Additional paid-in capital ......................      800,293      1,161,685        (4,000)        (1,157,685)      800,293
 Accumulated (deficit) earnings ..................     (261,371)      (186,037)        4,326            181,711      (261,371)
 Accumulated other comprehensive income, net
  of tax .........................................         (936)          (936)           --                936          (936)
                                                     ----------     ----------      --------      -------------    ----------
  Total stockholder's equity .....................      537,986        975,197           326           (975,523)      537,986
                                                     ----------     ----------      --------      -------------    ----------
  TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY .....   $1,196,601     $1,506,460      $ 15,015      $  (1,119,668)   $1,598,408
                                                     ==========     ==========      ========      =============    ==========
</TABLE>


--------------------------------------------------------------------------------
                                                                            F-37
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                  GUARANTOR    NON-GUARANTOR
                                                    ISSUER      SUBSIDIARIES    SUBSIDIARY    ELIMINATIONS   CONSOLIDATED
                                                -------------- -------------- -------------- -------------- -------------
<S>                                             <C>            <C>            <C>            <C>            <C>
REVENUES:
 Subscriber revenues ..........................   $       --     $  231,145       $   --         $    --     $  231,145
 Roaming revenues .............................           --         99,213           --              --         99,213
                                                  ----------     ----------       ------         -------     ----------
  Service revenues ............................           --        330,358           --              --        330,358
 Product sales ................................           --         26,781           --              --         26,781
                                                  ----------     ----------       ------         -------     ----------
  Total revenue ...............................           --        357,139           --              --        357,139
COSTS AND EXPENSES:
 Cost of services and operations ..............           --        237,843           --              --        237,843
 Cost of products sold ........................           --         53,911           --              --         53,911
 Selling and marketing ........................           --        110,052           --              --        110,052
 General and administrative expenses ..........          795         13,046           12              --         13,853
 Depreciation and amortization ................           --         94,722           --              --         94,722
 Non-cash compensation ........................           --           (916)          --              --           (916)
                                                  ----------     ----------       ------         -------     ----------
  Loss from operations ........................         (795)      (151,519)         (12)             --       (152,326)
Equity in loss of subsidiaries ................      (85,128)            --           --          85,128             --
Loss on debt extinguishment ...................           --         (5,472)          --              --         (5,472)
Interest and other income .....................        3,797          5,435        2,432              --         11,664
Interest expense ..............................      (65,297)       (16,433)          --              --        (81,730)
                                                  ----------     ----------       ------         -------     ----------
  Income (loss) before income tax benefit .....     (147,423)      (167,989)       2,420          85,128       (227,864)
Income tax benefit ............................           --         80,441           --              --         80,441
                                                  ----------     ----------       ------         -------     ----------
  Net income (loss) ...........................   $ (147,423)    $  (87,548)      $2,420         $85,128     $ (147,423)
                                                  ==========     ==========       ======         =======     ==========
</TABLE>



--------------------------------------------------------------------------------
F-38
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2001
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                              GUARANTOR
                                                                ISSUER      SUBSIDIARIES
                                                            -------------- --------------
<S>                                                         <C>            <C>
Cash flows from operating activities:
Net income (loss) .........................................   $ (147,423)    $  (87,548)
Adjustments to reconcile net income (loss) to net cash
 provided by (used in) operating activities:
 Equity in loss of subsidiaries ...........................       85,128             --
 Non-cash compensation expense ............................           --           (916)
 Non-cash interest on derivatives .........................           --            656
 Provision for bad debt ...................................           --         17,490
 Depreciation and amortization of property and
  equipment ...............................................           --         45,963
 Amortization of goodwill and intangibles .................           --         48,759
 Amortization of financing costs included in interest
  expense .................................................        1,529          1,745
 Amortization of discounted interest ......................          165             --
 Loss on debt extinguishment ..............................           --          5,472
 Deferred tax benefit .....................................           --        (80,441)
 Interest accreted on discount note .......................       27,927             --
 Loss from asset disposition ..............................           --            102
 (Increase) decrease in, net of effects from
  acquisitions:
  Receivables .............................................           --        (48,795)
  Inventory ...............................................           --          1,275
  Prepaid expenses and other assets .......................          926         (8,627)
 Increase (decrease) in, net of effects from
  acquisitions:
  Accounts payable and accrued expenses ...................       20,845         (2,212)
                                                              ----------     ----------
  Net cash provided by (used in) operating activities .....      (10,903)      (107,077)
                                                              ----------     ----------
Cash flows from investing activities:
 Purchases of property and equipment ......................           --       (143,731)
 Change in restricted cash ................................      (82,840)       (11,853)
 Intercompany receivable ..................................      (96,907)        98,790
 Equity investment in subsidiary ..........................     (302,777)            --
 Equity investment from parent ............................           --        306,777
 Repayment (issuance) of notes receivable .................           --             --
 Acquisition related costs ................................           --        (37,617)
 Net change in short term investments .....................          300             --
                                                              ----------     ----------
  Net cash provided by (used in) investing activities .....     (482,224)       212,366
                                                              ----------     ----------
Cash flows from financing activities:
 Proceeds from issuance of senior notes ...................      384,046             --
 Capital contributions ....................................           --          9,665
 Borrowings under senior secured debt .....................           --        253,000
 Repayments of borrowings under senior
  secured debt ............................................           --       (289,421)
 Debt issuance cost .......................................       (2,381)       (14,122)
 Payments on capital leases ...............................           --           (349)
                                                              ----------     ----------
   Net cash provided by (used in) financing
   activities .............................................      381,665        (41,277)
                                                              ----------     ----------
  Net increase (decrease) in cash and cash
   equivalents ............................................     (111,462)        64,062
Cash and cash equivalents at beginning of period ..........      114,003         23,054
                                                              ----------     ----------
Cash and cash equivalents at end of period ................   $    2,541     $   87,116
                                                              ==========     ==========



<CAPTION>
                                                             NON-GUARANTOR
                                                              SUBSIDIARY    ELIMINATIONS   CONSOLIDATED
                                                            -------------- -------------- -------------
<S>                                                         <C>            <C>            <C>
Cash flows from operating activities:
Net income (loss) .........................................    $  2,420     $    85,128    $ (147,423)
Adjustments to reconcile net income (loss) to net cash
 provided by (used in) operating activities:
 Equity in loss of subsidiaries ...........................          --         (85,128)           --
 Non-cash compensation expense ............................          --              --          (916)
 Non-cash interest on derivatives .........................          --              --           656
 Provision for bad debt ...................................          --              --        17,490
 Depreciation and amortization of property and
  equipment ...............................................          --              --        45,963
 Amortization of goodwill and intangibles .................          --              --        48,759
 Amortization of financing costs included in interest
  expense .................................................          --              --         3,274
 Amortization of discounted interest ......................          --              --           165
 Loss on debt extinguishment ..............................          --              --         5,472
 Deferred tax benefit .....................................          --              --       (80,441)
 Interest accreted on discount note .......................          --              --        27,927
 Loss from asset disposition ..............................          --              --           102
 (Increase) decrease in, net of effects from
  acquisitions:
  Receivables .............................................         900              --       (47,895)
  Inventory ...............................................          --              --         1,275
  Prepaid expenses and other assets .......................       1,046              --        (6,655)
 Increase (decrease) in, net of effects from
  acquisitions:
  Accounts payable and accrued expenses ...................         (39)             --        18,594
                                                               --------     -----------    ----------
  Net cash provided by (used in) operating activities .....       4,327              --      (113,653)
                                                               --------     -----------    ----------
Cash flows from investing activities:
 Purchases of property and equipment ......................          --              --      (143,731)
 Change in restricted cash ................................          --              --       (94,693)
 Intercompany receivable ..................................      (1,883)             --            --
 Equity investment in subsidiary ..........................      (4,000)        306,777            --
 Equity investment from parent ............................          --        (306,777)           --
 Repayment (issuance) of notes receivable .................      11,860              --        11,860
 Acquisition related costs ................................          --              --       (37,617)
 Net change in short term investments .....................          --              --           300
                                                               --------     -----------    ----------
  Net cash provided by (used in) investing activities .....       5,977              --      (263,881)
                                                               --------     -----------    ----------
Cash flows from financing activities:
 Proceeds from issuance of senior notes ...................          --              --       384,046
 Capital contributions ....................................          --              --         9,665
 Borrowings under senior secured debt .....................          --              --       253,000
 Repayments of borrowings under senior
  secured debt ............................................          --              --      (289,421)
 Debt issuance cost .......................................          --              --       (16,503)
 Payments on capital leases ...............................          --              --          (349)
                                                               --------     -----------    ----------
   Net cash provided by (used in) financing
   activities .............................................          --              --       340,438
                                                               --------     -----------    ----------
  Net increase (decrease) in cash and cash
   equivalents ............................................      10,304              --       (37,096)
Cash and cash equivalents at beginning of period ..........       4,711              --       141,768
                                                               --------     -----------    ----------
Cash and cash equivalents at end of period ................    $ 15,015     $        --    $  104,672
                                                               ========     ===========    ==========
</TABLE>


--------------------------------------------------------------------------------
                                                                            F-39
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                GUARANTOR    NON-GUARANTOR
                                                   ISSUER     SUBSIDIARIES    SUBSIDIARY    ELIMINATIONS   CONSOLIDATED
                                               ------------- -------------- -------------- -------------- -------------
<S>                                            <C>           <C>            <C>            <C>            <C>
Revenues:
 Subscriber revenues .........................   $      --     $  56,154        $   --         $    --      $  56,154
 Roaming revenues ............................          --        17,346            --              --         17,346
                                                 ---------     ---------        ------         -------      ---------
  Service revenues ...........................          --        73,500            --              --         73,500
 Product sales ...............................          --         9,201            --              --          9,201
                                                 ---------     ---------        ------         -------      ---------
  Total revenue ..............................          --        82,701            --              --         82,701
Costs and expenses:
 Cost of services and operations .............          --        55,701            --              --         55,701
 Cost of products sold .......................          --        20,524            --              --         20,524
 Selling and marketing .......................          --        45,407            --              --         45,407
 General and administrative expenses .........       1,050         8,449            39              --          9,538
 Depreciation and amortization ...............          --        12,530            --              --         12,530
 Terminated merger and acquisition costs .....       2,247            --            --              --          2,247
 Non-cash compensation .......................          --         5,651            --              --          5,651
                                                 ---------     ---------        ------         -------      ---------
  Loss from operations .......................      (3,297)      (65,561)          (39)             --        (68,897)
Equity in loss of subsidiaries ...............     (62,823)           --            --          62,823             --
Interest and other income ....................       8,488         4,050         1,945              --         14,483
Interest expense .............................     (22,557)       (3,218)           --              --        (25,775)
                                                 ---------     ---------        ------         -------      ---------
 Income (loss) before income taxes ...........     (80,189)      (64,729)        1,906          62,823        (80,189)
Income taxes .................................          --            --            --              --             --
                                                 ---------     ---------        ------         -------      ---------
 Net income (loss) ...........................   $ (80,189)    $ (64,729)       $1,906         $62,823      $ (80,189)
                                                 =========     =========        ======         =======      =========
</TABLE>



--------------------------------------------------------------------------------
F-40
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2000
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                             GUARANTOR
                                                                ISSUER     SUBSIDIARIES
                                                            ------------- --------------
<S>                                                         <C>           <C>
Cash flows from operating activities:
Net income (loss) .........................................  $  (80,189)    $  (64,729)
Adjustments to reconcile net income (loss) to net cash
 provided by (used in) operating activities:
 Equity in loss of subsidiaries ...........................      62,823             --
 Non-cash compensation expense ............................          --          5,651
 Provision for bad debt ...................................          --          1,107
 Depreciation and amortization of property and
  equipment ...............................................          --         12,530
 Amortization of financing costs included in interest
  expense .................................................         373          1,291
 Interest accreted on discount note .......................      22,184            868
 Loss from asset disposition ..............................          --             81
 (Increase) decrease in:
  Receivables .............................................          --        (13,278)
  Inventory ...............................................          --          3,024
  Prepaid expenses and other assets .......................        (179)        (3,071)
 Increase in:
  Accounts payable and accrued expenses ...................         566         21,731
                                                             ----------     ----------
  Net cash provided by (used in) operating
   activities .............................................       5,578        (34,795)
                                                             ----------     ----------
Cash flows from investing activities:
 Purchases of property and equipment ......................          --       (136,904)
 Change in restricted cash ................................          --            518
 Intercompany receivable ..................................     (47,239)        (4,338)
 Equity investment in subsidiary ..........................    (214,590)            --
 Equity investment from parent ............................          --        214,590
 Issuance of notes receivable .............................          --             --
 Acquisition related costs ................................      (3,156)            --
 Net change in short term investments .....................      (1,600)            --
 Repayment of note receivable from officer ................          --            100
 Purchase of minority interest in subsidiary ..............          --           (255)
                                                             ----------     ----------
  Net cash provided by (used in) investing activities .....    (266,585)        73,711
                                                             ----------     ----------
Cash flows from financing activities:
 Equity offering proceeds .................................     208,589             --
 Equity offering costs ....................................     (14,802)         1,203
 Proceeds from issuance of senior discounts notes .........     187,096             --
 Borrowings under senior secured debt .....................          --         57,758
 Repayments of borrowings under senior
  secured debt ............................................          --        (76,239)
 Debt issuance cost .......................................      (6,581)        (4,182)
 Stock options exercised ..................................         708             --
 Payments on capital leases ...............................          --            (31)
 Interest rate cap premiums ...............................          --            (27)
                                                             ----------     ----------
  Net cash provided by (used in) financing
   activities .............................................     375,010        (21,518)
                                                             ----------     ----------
  Net increase in cash and cash equivalents ...............     114,003         17,398
Cash and cash equivalents at beginning of period ..........          --          5,656
                                                             ----------     ----------
Cash and cash equivalents at end of period ................  $  114,003     $   23,054
                                                             ==========     ==========



<CAPTION>
                                                             NON-GUARANTOR
                                                              SUBSIDIARY    ELIMINATIONS   CONSOLIDATED
                                                            -------------- -------------- -------------
<S>                                                         <C>            <C>            <C>
Cash flows from operating activities:
Net income (loss) .........................................   $   1,906     $    62,823    $  (80,189)
Adjustments to reconcile net income (loss) to net cash
 provided by (used in) operating activities:
 Equity in loss of subsidiaries ...........................          --         (62,823)           --
 Non-cash compensation expense ............................          --              --         5,651
 Provision for bad debt ...................................          --              --         1,107
 Depreciation and amortization of property and
  equipment ...............................................          --              --        12,530
 Amortization of financing costs included in interest
  expense .................................................          --              --         1,664
 Interest accreted on discount note .......................          --              --        23,052
 Loss from asset disposition ..............................          --              --            81
 (Increase) decrease in:
  Receivables .............................................        (900)             --       (14,178)
  Inventory ...............................................          --              --         3,024
  Prepaid expenses and other assets .......................      (1,046)             --        (4,296)
 Increase in:
  Accounts payable and accrued expenses ...................          39              --        22,336
                                                              ---------     -----------    ----------
  Net cash provided by (used in) operating
   activities .............................................          (1)             --       (29,218)
                                                              ---------     -----------    ----------
Cash flows from investing activities:
 Purchases of property and equipment ......................          --              --      (136,904)
 Change in restricted cash ................................          --              --           518
 Intercompany receivable ..................................      51,577              --            --
 Equity investment in subsidiary ..........................          --         214,590            --
 Equity investment from parent ............................          --        (214,590)           --
 Issuance of notes receivable .............................     (46,865)             --       (46,865)
 Acquisition related costs ................................          --              --        (3,156)
 Net change in short term investments .....................          --              --        (1,600)
 Repayment of note receivable from officer ................          --              --           100
 Purchase of minority interest in subsidiary ..............          --              --          (255)
                                                              ---------     -----------    ----------
  Net cash provided by (used in) investing activities .....       4,712              --      (188,162)
                                                              ---------     -----------    ----------
Cash flows from financing activities:
 Equity offering proceeds .................................          --              --       208,589
 Equity offering costs ....................................          --              --       (13,599)
 Proceeds from issuance of senior discounts notes .........          --              --       187,096
 Borrowings under senior secured debt .....................          --              --        57,758
 Repayments of borrowings under senior
  secured debt ............................................          --              --       (76,239)
 Debt issuance cost .......................................          --              --       (10,763)
 Stock options exercised ..................................          --              --           708
 Payments on capital leases ...............................          --              --           (31)
 Interest rate cap premiums ...............................          --              --           (27)
                                                              ---------     -----------    ----------
  Net cash provided by (used in) financing
   activities .............................................          --              --       353,492
                                                              ---------     -----------    ----------
  Net increase in cash and cash equivalents ...............       4,711              --       136,112
Cash and cash equivalents at beginning of period ..........          --              --         5,656
                                                              ---------     -----------    ----------
Cash and cash equivalents at end of period ................   $   4,711     $        --    $  141,768
                                                              =========     ===========    ==========
</TABLE>



--------------------------------------------------------------------------------
                                                                            F-41
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

20. SUBSEQUENT EVENT AS OF SEPTEMBER 3, 2003

In an effort to proactively manage its capital structure and align it with
recent operating trends in the wireless telecommunications sector, the
Company's Board of Directors authorized management, on August 29, 2003, to
pursue an offer to exchange (the "Exchange Offer" or "Out-of-Court
Alternative"):

o   11.0% Senior Notes due 2011 and Units (each to consist of One Share of
    Preferred Stock and 73.61 Contingent Value Rights, collectively defined as
    "Units") for all of the Company's 12.5% Senior Notes due 2011 (CUSIP No.
    011588AB6, stated value of $250,000 as of December 31, 2002) and 13.625%
    Senior Notes due 2011 (CUSIP No. 011588AD2, stated value of $150,000 as of
    December 31, 2002),

o   12.0% Senior Discount Notes due 2011 and Units for all of the Company's
    12.875% Senior Discount Notes due 2010 (CUSIP No. 011593AA8, stated value
    of $268,862 as of December 31, 2002).

The Exchange Offer is subject to certain minimum Tender and Consent Conditions
including (i) the exchange of at least 97% of the outstanding aggregate
principal amount of the existing notes subject to the exchange offer, (ii) the
receipt of the requisite consents eliminating substantially all of the
covenants in the existing indentures and execution of supplemental indentures
implementing such amendments, (iii) the execution of an amendment to the Senior
Secured Credit Facility modifying certain restrictive covenants and (iv) the
execution of definitive amendments to certain agreements with Sprint PCS. In
the event that the terms of the restructuring transactions outlined above are
not acceptable to enough holders of the existing Notes to satisfy the minimum
Tender Condition, the Company may seek to forego the Exchange Offer and instead
accomplish the above restructuring transactions by means of a prepackaged plan
of reorganization pursuant to Chapter 11 of the United States Bankruptcy Code
(the "Prepackaged Plan").

The consummation of the exchange transaction under the Out-of-Court Alternative
is expected to result in an ownership change under the provisions of Section
382 of the Internal Revenue Code. Accordingly, the Company would be subject to
an annual limitation on the use of net operating losses generated prior to the
ownership change. Based on this limitation, and excluding potential built-in
gains that may be realized after the consummation of the Exchange Offer,
management has estimated that approximately $190 million in net operating
losses would expire unused. Additionally, as a result of the exchange
transaction, the Company may not receive a tax deduction for all interest that
had been accreted on the old senior discount notes that are being settled in
the exchange transaction. The non-cash interest accreted on these notes had
been reflected as a deferred tax asset in the Company's historical financial
statements. As a result of these two items, management has estimated that the
Out-of-Court Alternative would require the establishment of a valuation
allowance against the Company's existing deferred tax assets of approximately
$73 million in 2003.

Although management expects the restructuring transactions to be effected
either through the Exchange Offer or the Prepackaged Plan, there can be no
assurance that these alternatives will be successful. In the event the Company
is not able to adjust its capital structure through a financial restructuring,
there is a risk that the Company's capital structure cannot continue to be
supported by the Company's operations and financial performance in the future.
The Company's funding status is dependent on a number of factors influencing
projections of operating cash flows, including those related to subscriber
growth, ARPU, churn and CPGA. Should actual results differ significantly from
these assumptions, the Company's liquidity position could be adversely affected
and the Company could be in a position that would require it to raise
additional capital which may or may not be available on terms acceptable to the
Company, if at all, and could have a material adverse effect on the Company's
ability to achieve its intended business objectives.

Since inception, the Company has financed its operations through capital
contributions from owners, through debt financing and through proceeds
generated from public offerings of common stock. The Company has incurred
substantial net losses and negative cash flow from operations since inception.
Expenses are expected to exceed revenues until the Company establishes a
sufficient subscriber base. Management expects operating losses to continue for
the foreseeable future. However, management expects operating losses to
decrease in the future as the Company obtains more subscribers.

In addition, the Company has adopted, on January 1, 2003, the provisions of
SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of
FASB Statement No. 13, and Technical Corrections as of April 2002." As a
result, and as required by the statement, the Company has reclassified the
extinguishment


--------------------------------------------------------------------------------
F-42
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

of debt, previously reported as an extraordinary item in the year ended
December 31, 2001, as a component of its Loss Before Income Tax Benefit.


21. SUBSEQUENT EVENT AS OF NOVEMBER 10, 2003

On November 10, 2003, the Company successfully completed the exchange offer for
approximately 97% of its outstanding 12 1/2% senior notes due 2011, 13 5/8%
senior notes due 2011 and 12 7/8% senior discount notes due 2010, as described
in Note 20. In the exchange offer, the Company issued approximately $250.8
million aggregate principal amount of its 11% senior notes due 2010, $190.8
million aggregate original issue amount of its 12% senior discount notes due
2009 and issued 679,495 shares of Alamosa Holdings' Series B Preferred Stock.

Management believes that the Company will have an "ownership change" as that
term is defined under Internal Revenue Code Section 382 as a result of the
exchange transaction; however, due to recent guidance issued by the Treasury
Department, management believes that IRC Section 382 will not have a material
impact on the financial statements of the Company. Additionally, as a result of
the exchange transaction, the Company may not receive a tax deduction for all
interest that had been accreted on the old senior discount notes that are being
settled in the exchange transaction. The interest accreted on these notes had
been reflected as a deferred tax asset in the Company's historical financial
statements. Management has estimated this will require the establishment of a
valuation allowance against the Company's existing deferred tax assets of
approximately $12 million in 2003.



--------------------------------------------------------------------------------
                                                                            F-43
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
                 REPORT OF INDEPENDENT AUDITORS ON CONSOLIDATED
                          FINANCIAL STATEMENT SCHEDULE

TO THE BOARD OF DIRECTORS AND STOCKHOLDER OF ALAMOSA (DELAWARE), INC.:

Our audits of the consolidated financial statements referred to in our report
dated February 21, 2003, except for Note 20, which is as of September 3, 2003,
and Note 21, which is as of December 29, 2003, appearing in this Form 8-K also
included an audit of the consolidated financial statement schedule included in
this Form 8-K. In our opinion, this consolidated financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.


PricewaterhouseCoopers LLP


Dallas, Texas
February 21, 2003


--------------------------------------------------------------------------------
F-44
<PAGE>

ALAMOSA (DELAWARE), INC.
--------------------------------------------------------------------------------
SCHEDULE II


                 CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

For the Period December 31, 2000 Through
December 31, 2002 (In Thousands)

<TABLE>
<CAPTION>
                                                             ADDITIONS     ADDITIONS
                                              BALANCE AT    CHARGED TO     CHARGED TO
                                             BEGINNING OF    COSTS AND       OTHER                           BALANCE AT
               CLASSIFICATION                   PERIOD       EXPENSES       ACCOUNTS        DEDUCTIONS      END OF PERIOD
------------------------------------------- -------------- ------------ --------------- ------------------ --------------
<S>                                         <C>            <C>          <C>             <C>                <C>
December 31, 2000
 Allowance for doubtful accounts ..........     $   162       $ 1,341      $     --        $       --          $ 1,503
 Deferred tax valuation allowance .........          --        26,985            --                --           26,985
December 31, 2001
 Allowance for doubtful accounts ..........     $ 1,503       $17,490      $  1,213(1)     $  (14,314)         $ 5,892
 Deferred tax valuation allowance .........      26,985            --         2,313(2)        (29,298)(3)           --
December 31, 2002
 Allowance for doubtful accounts ..........     $ 5,892       $40,285      $     --        $  (37,726)         $ 8,451
 Deferred tax valuation allowance .........          --            --            --                --               --
</TABLE>

This schedule should be read in conjunction with the Company's audited
consolidated financial statements and related notes thereto that appear in this
Form 8-K.

(1)   For the year ended December 31, 2001, amount represents allowance for
      doubtful accounts recorded in connection with acquisitions accounted for
      under the purchase method of accounting.

(2)   Addition represents increase in valuation allowance due to the increase
      in the effective tax rate applied to deferred tax items.

(3)   This amount represents the reversal of the valuation allowance recorded
      by the Company against goodwill as a result of the business combinations
      with Roberts, WOW and Southwest (see Note 4).


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