Filed by Alamosa Holdings, Inc. pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended Subject Company: AirGate PCS, Inc. Exchange Act File Number of Subject Company: 000-27455 This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, (1) statements about the benefits of the proposed merger between Alamosa Holdings, Inc. ("Alamosa") and AirGate PCS, Inc. ("AirGate"), including future financial and operating results; (2) statements with respect to Alamosa's plans, objectives, expectations and intentions and other statements that are not historical facts; and (3) other statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions. Such statements are based upon the current beliefs and expectations of Alamosa's and AirGate's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (1) the businesses of Alamosa and AirGate may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (2) expected combination benefits from the Alamosa/AirGate transaction may not be fully realized or realized within the expected time frame; (3) the failure of AirGate and Alamosa stockholders to approve the merger and/or the failure to obtain approvals from regulators or other groups; (4) disruption from the merger making it more difficult to maintain relationships with clients, employees or suppliers; (5) Alamosa's and AirGate's dependence on their affiliation with Sprint; (6) shifts in populations or network focus; (7) changes or advances in technology; (8) changes in Sprint's national service plans or fee structure with Alamosa or AirGate; (9) change in population; (10) difficulties in network construction; (11) increased competition in Alamosa's and AirGate's markets; and (12) adverse changes in financial position, condition or results of operations. Additional factors that could cause Alamosa's and AirGate's results to differ materially from those described in the forward-looking statements can be found in the 2003 Annual Report on Form 10-K and in the Quarterly Reports on Form 10-Q of Alamosa and AirGate filed with the Securities and Exchange Commission (the "Commission") and available at the Commission's internet site (http://www.sec.gov). The forward-looking statements in this document speak only as of the date of the document, and Alamosa and AirGate assume no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about Alamosa and AirGate, without charge, at the Securities and Exchange Commission's internet site (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the Securities and Exchange Commission that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained without charge, when they become available, by directing a request to Alamosa Holdings, Inc., 5225 S. Loop 289, Lubbock, Texas 79424, Attention: Jon Drake (806-722-1100); or AirGate PCS, Inc., Harris Tower, 233 Peachtree Street, N.E. Suite 1700, Atlanta, Georgia 30303, Attention: Bill Loughman (404-525-7272). The respective directors and executive officers of Alamosa and AirGate and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed merger. Information regarding Alamosa's directors and executive officers is available in the proxy statement filed with the Securities and Exchange Commission by Alamosa on April 23, 2004, and information regarding AirGate's directors and executive officers is available in the proxy statement filed with the Securities and Exchange Commission by AirGate on March 5, 2004. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the Securities and Exchange Commission when they become available. #### The following are the slides used in a conference call conducted by Alamosa Holdings, Inc. on December 9, 2004:
Building
the Premier
Sprint Affiliate
December
9, 2004
1
Safe Harbor Provisions
This document
contains forward-looking statements within the meaning of the Private
Securities Litigation
Reform Act of 1995. Such statements include, but are
not limited to, (1) statements about the benefits of the
proposed merger
between Alamosa Holdings, Inc. ("Alamosa") and AirGate PCS, Inc.
("AirGate"), including
future financial and operating results; (2)
statements with respect to Alamosa's plans, objectives,
expectations and
intentions and other statements that are not historical facts; and (3) other
statements
identified by words such as "believes," "expects,"
"anticipates," "estimates," "intends," "plans," "targets,"
"projects" and
similar expressions. Such statements are based upon the current beliefs and
expectations of
Alamosa's and AirGate's management and are subject to
significant risks and uncertainties. Actual results
may differ from those
set forth in the forward-looking statements.
The following
factors, among others, could cause actual results to differ from those set
forth in the forward-
looking statements: (1) the businesses of Alamosa and
AirGate may not be integrated successfully or such
integration may be more
difficult, time-consuming or costly than expected; (2) expected combination
benefits from the Alamosa/AirGate transaction may not be fully realized or
realized within the expected time
frame; (3) the failure of AirGate and
Alamosa stockholders to approve the merger and/or the failure to obtain
approvals from regulators or other groups; (4) disruption from the merger
making it more difficult to
maintain relationships with clients, employees
or suppliers; (5) Alamosa's and AirGate's dependence on their
affiliation
with Sprint; (6) shifts in populations or network focus; (7) changes or
advances in technology; (8)
changes in Sprint's national service plans or
fee structure with Alamosa or AirGate; (9) change in population;
(10)
difficulties in network construction; (11) increased competition in Alamosa's
and AirGate's markets; and
(12) adverse changes in financial position,
condition or results of operations. Additional factors that could
cause
Alamosa's and AirGate's results to differ materially from those described in
the forward-looking
statements can be found in the 2003 Annual Report on
Form 10-K and in the Quarterly Reports on Form 10-
Q of Alamosa and AirGate
filed with the Securities and Exchange Commission (the "Commission") and
available at the Commission's internet site (http://www.sec.gov). The
forward-looking statements in this
document speak only as of the date of
the document, and Alamosa and AirGate assume no obligation to
update the
forward-looking statements or to update the reasons why actual results could
differ from those
contained in the forward-looking statements.
2
Safe Harbor Provisions
Stockholders
are urged to read the joint proxy statement/prospectus regarding the proposed
transaction
when it becomes available because it will contain important
information. Stockholders will be able to obtain a
free copy of the joint
proxy statement/prospectus, as well as other filings containing information
about
Alamosa and AirGate, without charge, at the Securities and Exchange
Commission's internet site
(http://www.sec.gov). Copies of the joint proxy
statement/prospectus and the filings with the Securities and
Exchange
Commission that will be incorporated by reference in the joint proxy
statement/prospectus can also
be obtained without charge, when they become
available, by directing a request to Alamosa Holdings, Inc.,
5225 S. Loop
289, Lubbock, Texas 79424, Attention: Jon Drake (806-722-1100); or AirGate
PCS, Inc., Harris
Tower, 233 Peachtree Street, N.E. Suite 1700, Atlanta, Georgia 30303,
Attention: Bill Loughman (404-525-
7272).
The respective
directors and executive officers of Alamosa and AirGate and other persons may
be deemed to
be participants in the solicitation of proxies in respect of
the proposed merger. Information regarding
Alamosa's directors and
executive officers is available in the proxy statement filed with the
Securities and
Exchange Commission by Alamosa on April 23,
2004, and
information regarding AirGate's directors and
executive officers is
available in the proxy statement filed with the Securities and Exchange
Commission by
AirGate on March 5,
2004. Other
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the
joint proxy statement/prospectus and
other relevant materials to be filed with the Securities and Exchange
Commission when they become available.
3
Transaction Summary
4
Creation of
the Premier
Sprint Affiliate
Sector leading combination
Creation of the premier Sprint Affiliate
Over 23 million total POPs, 18 million covered POPs and 1.25 million subscribers
Pro forma size should appeal to a broader investor base
Alamosa is the strongest Sprint Affiliate
Consistently strong operating results - strongest balance sheet
Enables
combined company to further rationalize pro forma capital structure to the
benefit of each companies shareholders
Management team with a proven track record of successful integrations of acquisitions
Integrated over $690 million1 of acquisitions since 2000
Earnings power better than sum of parts
Estimated annual operational synergies of approximately $10.0 million
Additional scale benefits
Lower cost of capital
Platform for future organic and external growth
Pro forma company will be far and away the largest Sprint Affiliate on all metrics
Enhances relationship with Sprint
Note:
1 Based on Alamosas stock price prior to the announcement of each transaction
5
Merger
Beneficial to
All Shareholders
AirGate Shareholders
Attractive valuation
Immediate increase in liquidity
Opportunity
to receive a portion
of proceeds in cash
Strong Alamosa currency offered
Most liquid
stock in Sprint Affiliate
sector
Largest
market capitalization of the
Sprint Affiliates
Best trading
fundamentals of any
Sprint Affiliate
Significant
coverage from Wall
Street research analysts
Alamosa Shareholders
Pro forma
Company is better
positioned to grow and create
shareholder value
Accretive on all key metrics
POPs, Subscribers, EBITDA, FCF
Positions
Alamosa as the sector
consolidator
Proven track
record of value
creation through acquisitions
Roberts Wireless Communications
Washington Oregon Wireless
Southwest PCS
6
AirGate Overview
7.4 million total POPs
6.1 million covered POPs
384,2411 subscribers - 9/30/04
Strong market demographics
Major AirGate markets include:
Greenville, SC (935,800 POPs)
Savannah, GA (775,800 POPs)
Charleston, SC (690,200 POPs)
Columbia, SC (685,100 POPs)
Adjacent
to major Sprint PCS
southeastern markets
Sprint PCS markets include:
Atlanta, GA
Raleigh, NC
Charlotte, NC
Significant
overlap with Sprint
Local Telephone Division
Note:
1 Based on the midpoint of AirGates CY 3Q announced guidance on September 30, 2004
7
Strong Pro Forma Footprint
The pro forma Company will be the premier and largest Sprint Affiliate
8
Positioned for Sector Leadership
Industry leading combination with significantly increased scale
18.4
12.3
8.1
7.9
6.1
5.9
5.7
4.8
0.0
4.0
8.0
12.0
16.0
20.0
APCS +
PCSA
APCS
UNWR
UPCS
PCSA
IPCX
HZPS
IWO
9
EOP Subscribers (000s) Q3 04
23.2
15.8
11.3
10.0
7.8
7.5
7.4
6.3
0.0
4.0
8.0
12.0
16.0
20.0
24.0
APCS +
PCSA
APCS
UNWR
UPCS
IPCX
HZPS
PCSA
IWO
Net Adds (000s) Q3 04
Covered POPs (mm)
Total POPs (mm)
62
53
18
9
8
7
5
(6)
-10
10
30
50
70
APCS +
PCSA
APCS
UPCS
PCSA
IPCX
UNWR
IWO
HZPS
1,250
866
449
384
383
241
231
185
0
200
400
600
800
1,000
1,200
1,400
APCS +
PCSA
APCS
UNWR
PCSA
UPCS
IPCX
IWO
HZPS
$247
$180
$76
$71
$67
$32
$27
$0
$50
$100
$150
$200
$250
APCS +
PCSA
APCS
UNWR
UPCS
PCSA
IPCX
HZPS¹
10
CY 2004 EBITDA Capex (mm)
LTM EBITDA Capex (mm)
$228
$166
$79
$63
$62
$31
$28
$0
$50
$100
$150
$200
$250
APCS +
PCSA
APCS
UNWR
UPCS
PCSA
IPCX
HZPS¹
Positioned for Sector Leadership
Source: Alamosas 2004 data per Companys guidance. AirGates 2004 data per consensus Wall Street research
Strong pro forma cash flow generation
Does not reflect pro forma impact of estimated annual synergies
Note: As of latest
publicly released quarterly data
1 Excludes effects of
operations in NTELOS markets
LTM EBITDA (mm)
$136
$90
$48
$46
$44
$17
$0
$50
$100
$150
APCS +
PCSA
APCS
UNWR
PCSA
UPCS
IPCX
$132
$86
$60
$46
$31
$19
$0
$50
$100
$150
APCS +
PCSA
APCS
UNWR
PCSA
UPCS
IPCX
CY 2004 EBITDA (mm)
Financial Summary
11
Transaction Terms
Q2 2005
Expected Closing:
Alamosa and AirGate shareholders
Sprint
Hart-Scott-Rodino antitrust approval
Required Approvals:
$630 million,
based on closing prices of Alamosa & AirGate
on December 7, 2004
Includes assumption of approximately $238 million of net debt
AirGate shareholders can elect cash consideration if desired
Based on
Alamosas trailing 10-day average price prior to
closing
Cash consideration capped at $100 million subject to proration
Restricted stock & options settled in cash
Election
period from mailing of proxy to day prior to AirGate
shareholder meeting
Purchase Price:
Cash Election:
2.87 Alamosa shares per AirGate share
$33.01 per
AirGate share based on Alamosa closing price of
$11.50 on December 7, 2004
Consideration:
12
Implied Valuation
Assuming 100%
stock consideration, AirGate shareholders will own
approximately
18.1%1 of the pro
forma company
Alamosa would issue approximately 33.8 million shares2 to AirGate shareholders
Implied valuation based on 12/7/04 Alamosa share price
Price per AirGate share of $33.01
Equity value of $392 million
Enterprise value of $630 million
Implied market multiples:
Enterprise value / Total POPs = $85
Enterprise value / Covered POPs = $103
Enterprise value / LTM EBITDA = 10.1x
Enterprise value / LTM EBITDA - Capex = 13.6x
Note:
1 Alamosas convertible preferred stock included on an as-converted basis
2
Restricted stock units will receive cash consideration and in-the-money options
outstanding will receive a cash payment equal to the
excess of
the per share price over the exercise price
13
Pro Forma Corporate Structure
14
Alamosa
Operations, Inc.
Alamosa Holdings, Inc.
Alamosa PCS Holdings, Inc.
Alamosa Holdings, LLC
Alamosa (Delaware), Inc.
Missouri
WOW
Southwest
Alamosa
PCS
Public Stock
Public Debt
AirGate
PCS, Inc.
(Operating Company)
LLC (Softco)
AirGate Leasing, Inc.
(Equipment Company)
Public Debt
100% Ownership
Alamosa
Operations, Inc.
Alamosa Holdings, Inc.
Alamosa PCS Holdings, Inc.
Alamosa Holdings, LLC
Alamosa (Delaware), Inc.
Missouri
WOW
Southwest
Alamosa
PCS
Public Stock
Public Debt
AirGate
PCS, Inc.
(Operating Company)
AirGate Network Services
(Equipment Company)
Public Debt
100% Ownership
$95.7
$15.8
1
$79.9
LTM Capex
(mm)
$227.7
$62.21,2
$165.5
LTM EBITDA (mm)
$301.4
$90.01
$211.4
CY Q3 Total Revenue (mm)
Combined
AirGate
Alamosa
$62.9
$17.01,2
$45.9
CY Q3 EBITDA (mm)
$1,085.1
$335.61
$749.5
LTM Total Revenue (mm)
Financial:
62.0
9.01
53.0
CY Q3 Net Additions (000s)
6.8%
6.3%1
7.0%
Penetration of Covered POPs
1,250,241
384,2411
866,000
EOP Subscribers (9/30/04)
18.4
6.1
12.3
Covered POPs (mm)
23.2
7.4
15.8
Total POPs (mm)
Operating:
Historical
Operating &
Financial Highlights
Notes:
1 Based on the midpoint of AirGates CY 3Q announced guidance on September 30, 2004
2 Excludes an approximately $10.9 million one time adjustment related to the settlement with Sprint
15
Pro Forma Capitalization
Notes: Assumes no fees or expense associated with the transaction. Excludes preferred stock
1
Reflects Alamosa estimates and pro forma adjustment for offering of $175
million Senior Secured Floating Rate notes and related use of
proceeds
2 Based on the midpoint of AirGates CY 3Q announced guidance on September 30, 2004
3 Excludes an approximately $10.9 million one time adjustment related to the settlement with Sprint
($ in millions)
As of
9/30/2004
Est. 9/30/04
Cash
Coupon
Maturity
Alamosa
AirGate
1
Consider. Adj.
Pro Forma
Cash & Equivalents
$159.6
$102.6
($100.0)
$162.2
Capital Lease
$0.9
-
$0.9
Senior Secured Floating Rate Notes
3.750%
10/15/2011
-
$175.0
175.0
Senior Subordinated Secured Notes
9.375%
9/1/2009
-
159.0
159.0
Senior Notes
8.500%
1/31/2012
250.0
-
250.0
Senior Notes
11.000%
7/31/2010
250.9
-
250.9
Senior Notes
12.500%
2/1/2011
11.6
-
11.6
Senior Notes
13.625%
8/15/2011
2.3
-
2.3
Senior Discount Notes
12.000%
7/31/2009
211.8
-
211.8
Senior Discount Notes
12.875%
2/15/2010
6.1
-
6.1
Total Debt
$733.7
$334.0
$1,067.7
Senior Secured Debt
/ LTM EBITDA
0.0x
5.4x
1.5x
Total Debt
/ LTM EBITDA
4.4x
5.4x
4.7x
Net Debt
/ LTM EBITDA
3.5x
3.8x
4.0x
LTM EBITDA
2,3
$165.5
$62.2
$227.7
16
Accretive Transaction
The transaction is EBITDA per share accretive to Alamosas shareholders
17% accretive
to 2004 EBITDA per share on a pro forma basis (all stock
consideration)
Pro forma for the impact of estimated annual synergies
Source: Alamosas 2004 data per Companys guidance. AirGates 2004 data per consensus Wall Street research
2004E EBITDA Accretion
Note:
1 Alamosas convertible preferred stock included on an as converted basis
Alamosa Pro Forma
Alamosa
Stock &
Stand Alone
All Stock
$100mm Cash
Pro Forma Shares Outstanding (mm)
153.3
187.1
178.4
EBITDA
2004E EBITDA (mm)
$180.0
$246.5
$246.5
Operating Synergies
-
10.0
10.0
Pro Forma 2004E EBITDA (mm)
$180.0
$256.5
$256.5
EBITDA / Share
1.17
1.37
1.44
2004 EBITDA Accretion per Share
-
17%
22%
17
Summary
18
Summary
Transaction is
strategically and financially attractive to Alamosa
and AirGate
shareholders
Industry-leading combination
Attractive valuation to AirGate shareholders
Immediate increase in liquidity
Attractive currency
Accretive transaction to Alamosa shareholders
Increased scale and scope
Earnings power better than sum of parts
Platform for future growth and value creation
Proven track
record of delivering results and successful
acquisition integration
19
Building
the Premier
Sprint Affiliate
December
9, 2004
20