##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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Form 10-Q

|   |  |                                                                                                 
|-- |  | ------------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|  
|   |  | For the quarterly period ended June 30,
    2002                                                
|  
|or
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from           to                                                 

Commission file no. 333-71051



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Dobson/Sygnet

Communications Company


(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Oklahoma                                                           |  | 73-1547216                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

|                                             |  |           
|-------------------------------------------- |  | ----------
|14201 Wireless Way                           |  | 73134     
|Oklahoma City, Oklahoma                      |  | (Zip Code)
|(Address of principal executive
    offices) |  |           

(405) 529-8500

(Registrants telephone number, including
area code)


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

The registrant is not subject to the filing
requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, but files reports required by those
sections pursuant to contractual obligations.

As of August 2, 2002, there were
100 shares of the registrants $1.00 par value
common stock outstanding, all of which were beneficially owned
by Dobson Communications Corporation.



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TABLE OF CONTENTS



|                             |                                                                                              |                                                                  |  |  |  |  |  | 
|---------------------------- | -------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|INDEX TO FORM 10-Q          
|PART I FINANCIAL INFORMATION
|                             | Item 1. Financial Statements                                                                
|                             |                                                                                              | CONDENSED CONSOLIDATED BALANCE SHEETS                           
|                             |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                 
|                             |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|                             |                                                                                              | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|                             | Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
|                             | Item 3. Quantitative and Qualitative Disclosure About Market Risk                           
|PART II OTHER INFORMATION   
|                             | Item 1. Legal Proceedings                                                                   
|                             | Item 2. Changes in Securities and Use of Proceeds                                           
|                             | Item 3. Defaults Upon Senior Securities                                                     
|                             | Item 4. Submission of Matters to a Vote of Security Holders                                 
|                             | Item 5. Other Information                                                                   
|                             | Item 6. Exhibits and Reports on Form 8-K                                                    
|SIGNATURES                  



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##### Table of Contents



DOBSON/SYGNET COMMUNICATIONS COMPANY






INDEX TO FORM 10-Q


|                      |   |  |  |                                                                                                               |  |  |    | 
|--------------------- | - |  |  | ------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|Item                  |   |  |  |                                                                                                              
|Number                |   |  |  | Page                                                                                                         
|                      |   |  |  |                                                                                                              
|PART I               
|FINANCIAL INFORMATION
|                      | 1 |  |  | Condensed Consolidated Financial Statements
    (Unaudited):                                                  |  |  |    | 
|                      |   |  |  | Condensed Consolidated Balance Sheets as of
    June 30, 2002 and December 31, 2001                           |  |  | 2  | 
|                      |   |  |  | Condensed Consolidated Statements of Operations
    for the Three and Six Months Ended June 30, 2002 and 2001 |  |  | 3  | 
|                      |   |  |  | Condensed Consolidated Statement of Cash Flows
    for the Six Months Ended June 30, 2002 and 2001            |  |  | 4  | 
|                      |   |  |  | Notes to Condensed Consolidated Financial
    Statements                                                      |  |  | 5  | 
|                      | 2 |  |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations                     |  |  | 7  | 
|                      | 3 |  |  | Quantitative and Qualitative Disclosure about
    Market Risk                                                 |  |  | 15 | 
|PART II              
|OTHER INFORMATION    
|                      | 1 |  |  | Legal Proceedings                                                                                             |  |  | 16 | 
|                      | 2 |  |  | Changes in Securities and Use of Proceeds                                                                     |  |  | 16 | 
|                      | 3 |  |  | Defaults Upon Senior Securities                                                                               |  |  | 16 | 
|                      | 4 |  |  | Submission of Matters to a Vote of Security
    Holders                                                       |  |  | 16 | 
|                      | 5 |  |  | Other Information                                                                                             |  |  | 16 | 
|                      | 6 |  |  | Exhibits and Reports on Form 8-K                                                                              |  |  | 16 | 

1



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##### Table of Contents






PART I

FINANCIAL INFORMATION




Item 1.     Financial
Statements

DOBSON/ SYGNET COMMUNICATIONS
COMPANY






CONDENSED CONSOLIDATED BALANCE
SHEETS


|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |              |             |             | 
|-------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------------------------------------- | ------------ | ----------- | ----------- | ---------- | ------------ | ----------- | ----------- | 
|                                                   |                                                                                                    | June 30,                             |                                                          | December 31,
|                                                   |                                                                                                    | 2002                                 |                                                          | 2001        
|                                                   |                                                                                                    |                                      |                                                          |             
|                                                   |                                                                                                    | (Unaudited)                          |                                                          |             
|ASSETS                                            
|CURRENT ASSETS:                                    |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Cash and cash equivalents                                                                          |                                      | $                                                        | 2,425,167    |             |             | $          | 4,286,325    |            
|                                                   | Accounts receivable, net                                                                           |                                      |                                                          | 20,425,541   |             |             |            | 19,326,750   |            
|                                                   | Inventory                                                                                          |                                      |                                                          | 2,736,251    |             |             |            | 4,873,736    |            
|                                                   | Prepaid expenses and other                                                                         |                                      |                                                          | 1,158,494    |             |             |            | 1,151,506    |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total current assets                 |                                                          |              | 26,745,453  |             |            |              | 29,638,317  |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|PROPERTY, PLANT AND EQUIPMENT, net                 |                                                                                                    |                                      | 79,894,277                                               |              |             |             | 75,529,567 |             
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|OTHER ASSETS:                                      |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Wireless license acquisition costs, net                                                            |                                      |                                                          | 350,688,085  |             |             |            | 572,988,085  |            
|                                                   | Deferred financing costs, net                                                                      |                                      |                                                          | 32,873,820   |             |             |            | 35,441,469   |            
|                                                   | Customer list, net                                                                                 |                                      |                                                          | 13,282,886   |             |             |            | 17,676,488   |            
|                                                   | Other                                                                                              |                                      |                                                          | 78,631       |             |             |            | 84,189       |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total other assets                   |                                                          |              | 396,923,422 |             |            |              | 626,190,231 |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    |                                      | Total assets                                             |              | $           | 503,563,152 |            |              | $           | 731,358,115 | 
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                  
|LIABILITIES AND STOCKHOLDERS
    (DEFICIT) EQUITY
|CURRENT LIABILITIES:                               |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Accounts payable                                                                                   |                                      | $                                                        | 7,418,851    |             |             | $          | 10,240,868   |            
|                                                   | Accrued expenses                                                                                   |                                      |                                                          | 5,578,687    |             |             |            | 6,232,911    |            
|                                                   | Deferred revenue and customer deposits                                                             |                                      |                                                          | 5,304,382    |             |             |            | 4,842,107    |            
|                                                   | Current portion of long-term debt                                                                  |                                      |                                                          | 21,250,000   |             |             |            | 14,250,000   |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total current liabilities            |                                                          |              | 39,551,920  |             |            |              | 35,565,886  |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|OTHER LIABILITIES:                                 |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Payables  affiliates                                                                              |                                      |                                                          | 282,816      |             |             |            | 1,400,227    |            
|                                                   | Long-term debt, net of current portion                                                             |                                      |                                                          | 474,761,754  |             |             |            | 485,886,754  |            
|                                                   | Deferred income taxes                                                                              |                                      |                                                          | 16,638,517   |             |             |            | 100,228,803  |            
|STOCKHOLDERS (DEFICIT) EQUITY:                    |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Common stock, $1.00 par value,
    500 shares authorized and 100 shares issued and
    outstanding |                                      |                                                          | 100          |             |             |            | 100          |            
|                                                   | Additional paid-in capital                                                                         |                                      |                                                          | 239,632,804  |             |             |            | 239,632,804  |            
|                                                   | Retained deficit                                                                                   |                                      |                                                          | (267,304,759 | )           |             |            | (131,356,459 | )          
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total stockholders (deficit) equity |                                                          |              | (27,671,855 | )           |            |              | 108,276,445 |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    |                                      | Total liabilities and stockholders
    (deficit) equity |              | $           | 503,563,152 |            |              | $           | 731,358,115 | 
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             

The accompanying notes are an integral part of
these condensed consolidated balance sheets.

2



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS
COMPANY






CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS


|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |             |            | 
|----------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ------------------------ | ---------- | ---------------- | ---------- | ---- | ----------- | ----------- | ---------- | - | ------------ | ------------ | ---------- | - | ----------- | ----------- | ---------- | 
|                                                                                    |                                                                                                            |                          |            |                 
|                                                                                    |                                                                                                            | Three Months Ended       |            | Six Months Ended
|                                                                                    |                                                                                                            | June 30,                 |            | June 30,        
|                                                                                    |                                                                                                            |                          |            |                 
|                                                                                    |                                                                                                            | 2002                     |            | 2001             |            | 2002 |             | 2001       
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |            
|                                                                                    |                                                                                                            |                          |            |                 
|                                                                                    |                                                                                                            | (Unaudited)              |            | (Unaudited)     
|OPERATING REVENUE:                                                                  |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|                                                                                    | Service revenue                                                                                            |                          | $          | 37,096,881       |            |      | $           | 33,403,511  |            |   | $            | 71,172,977   |            |   | $           | 64,359,488  |           
|                                                                                    | Roaming revenue                                                                                            |                          |            | 12,516,007       |            |      |             | 10,996,509  |            |   |              | 22,834,844   |            |   |             | 20,793,484  |           
|                                                                                    | Equipment and other revenue                                                                                |                          |            | 1,298,334        |            |      |             | 1,667,348   |            |   |              | 2,667,981    |            |   |             | 3,625,393   |           
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|                                                                                    |                                                                                                            | Total operating revenue  |            |                  | 50,911,222 |      |             |             | 46,067,368 |   |              |              | 96,675,802 |   |             |             | 88,778,365 | 
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|OPERATING EXPENSES:                                                                 |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|                                                                                    | Cost of service                                                                                            |                          |            | 11,588,973       |            |      |             | 11,133,622  |            |   |              | 22,541,568   |            |   |             | 20,705,861  |           
|                                                                                    | Cost of equipment                                                                                          |                          |            | 4,430,887        |            |      |             | 4,802,291   |            |   |              | 8,858,489    |            |   |             | 10,747,983  |           
|                                                                                    | Marketing and selling                                                                                      |                          |            | 6,481,982        |            |      |             | 6,191,838   |            |   |              | 12,516,989   |            |   |             | 12,506,028  |           
|                                                                                    | General and administrative                                                                                 |                          |            | 6,979,876        |            |      |             | 6,995,560   |            |   |              | 13,490,123   |            |   |             | 14,060,195  |           
|                                                                                    | Depreciation and amortization                                                                              |                          |            | 7,011,233        |            |      |             | 18,954,091  |            |   |              | 13,750,991   |            |   |             | 37,472,686  |           
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|                                                                                    |                                                                                                            | Total operating expenses |            |                  | 36,492,951 |      |             |             | 48,077,402 |   |              |              | 71,158,160 |   |             |             | 95,492,753 | 
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|OPERATING INCOME (LOSS)                                                             |                                                                                                            |                          | 14,418,271 |                  |            |      | (2,010,034  | )           |            |   | 25,517,642   |              |            |   | (6,714,388  | )          
|OTHER INCOME (EXPENSE):                                                             |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|                                                                                    | Interest expense                                                                                           |                          |            | (11,245,875      | )          |      |             | (15,445,605 | )          |   |              | (22,492,335  | )          |   |             | (30,700,351 | )         
|                                                                                    | Other income, net                                                                                          |                          |            | 2,889            |            |      |             | 184,630     |            |   |              | 3,242        |            |   |             | 584,396     |           
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|INCOME (LOSS) BEFORE INCOME TAXES                                                   |                                                                                                            |                          | 3,175,285  |                  |            |      | (17,271,009 | )           |            |   | 3,028,549    |              |            |   | (36,830,343 | )          
|                                                                                    | Income tax (expense) benefit                                                                               |                          |            | (1,206,609       | )          |      |             | 6,562,983   |            |   |              | (1,150,849   | )          |   |             | 13,995,530  |           
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
    CHANGE IN ACCOUNTING PRINCIPLE        |                                                                                                            |                          | 1,968,676  |                  |            |      | (10,708,026 | )           |            |   | 1,877,700    |              |            |   | (22,834,813 | )          
|                                                                                    | Cumulative effect of change in accounting
    principle, net of income tax benefit of $84,474,000 (Note 4) |                          |            |                 |            |      |             |            |            |   |              | (137,826,000 | )          |   |             |            |           
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|NET INCOME (LOSS)                                                                   |                                                                                                            | $                        | 1,968,676  |                  |            | $    | (10,708,026 | )           |            | $ | (135,948,300 | )            |            | $ | (22,834,813 | )          
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|BASIC NET INCOME (LOSS) APPLICABLE TO COMMON
    STOCKHOLDER PER COMMON SHARE:      |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|                                                                                    | Continuing operations                                                                                      |                          | $          | 19,687           |            |      | $           | (107,080    | )          |   | $            | 18,777       |            |   | $           | (228,348    | )         
|                                                                                    | Cumulative effect of change in accounting
    principle                                                    |                          |            |                 |            |      |             |            |            |   |              | (1,378,260   | )          |   |             |            |           
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|TOTAL BASIC NET INCOME (LOSS) APPLICABLE TO
    COMMON STOCKHOLDER PER COMMON SHARE |                                                                                                            | $                        | 19,687     |                  |            | $    | (107,080    | )           |            | $ | (1,359,483   | )            |            | $ | (228,348    | )          
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            
|BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                    |                                                                                                            |                          | 100        |                  |            |      | 100         |             |            |   | 100          |              |            |   | 100         |            
|                                                                                    |                                                                                                            |                          |            |                  |            |      |             |             |            |   |              |              |            |   |             |            

The accompanying notes are an integral part of
these condensed consolidated financial statements.

3



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##### Table of Contents



DOBSON/SYGNET COMMUNICATIONS COMPANY






CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |             |             |            | 
|-------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------------------------- | ----------- | ----------- | ---------- | ---------- | ----------- | ----------- | ---------- | 
|                                                   |                                                                                                                                                          |                                       
|                                                   |                                                                                                                                                          | Six Months Ended June 30,             
|                                                   |                                                                                                                                                          |                                       
|                                                   |                                                                                                                                                          | 2002                                   |                                                         | 2001       
|                                                   |                                                                                                                                                          |                                        |                                                         |            
|                                                   |                                                                                                                                                          |                                       
|                                                   |                                                                                                                                                          | (Unaudited)                           
|CASH FLOWS FROM OPERATING ACTIVITIES:              |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|                                                   | Income (loss) before cumulative effect of change
    in accounting principle                                                                             |                                        | $                                                       | 1,877,700   |             |            | $          | (22,834,813 | )          
|                                                   | Adjustments to reconcile income (loss) before
    cumulative effect of change in accounting principle to net cash
    provided by operating activities  |                                        |                                                         |             |             |            |            |             |            
|                                                   |                                                                                                                                                          | Depreciation and amortization          |                                                         |             | 13,750,991  |            |            |             | 37,472,686  |           
|                                                   |                                                                                                                                                          | Amortization of financing costs        |                                                         |             | 2,623,275   |            |            |             | 2,617,504   |           
|                                                   |                                                                                                                                                          | Deferred income taxes                  |                                                         |             | 883,714     |            |            |             | (14,262,305 | )         
|                                                   |                                                                                                                                                          | Loss on disposition of assets, net     |                                                         |             | 19,365      |            |            |             | 120,226     |           
|                                                   | Changes in current assets and
    liabilities                                                                                                           |                                        |                                                         |             |             |            |            |             |            
|                                                   |                                                                                                                                                          | Accounts receivable                    |                                                         |             | (1,098,791  | )          |            |             | (10,719     | )         
|                                                   |                                                                                                                                                          | Other current assets                   |                                                         |             | 2,130,497   |            |            |             | (339,393    | )         
|                                                   |                                                                                                                                                          | Accounts payable                       |                                                         |             | (2,925,109  | )          |            |             | (2,024,730  | )         
|                                                   |                                                                                                                                                          | Accrued expenses                       |                                                         |             | (654,224    | )          |            |             | (687,949    | )         
|                                                   |                                                                                                                                                          | Deferred revenue and customer deposits |                                                         |             | 462,275     |            |            |             | 404,480     |           
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|                                                   |                                                                                                                                                          |                                        | Net cash provided by operating activities               |             |             | 17,069,693 |            |             |             | 454,987    | 
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|CASH FLOWS FROM INVESTING ACTIVITIES:              |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|                                                   | Capital expenditures                                                                                                                                     |                                        |                                                         | (13,638,373 | )           |            |            | (15,021,497 | )          
|                                                   | Decrease in payable  affiliates                                                                                                                         |                                        |                                                         | (1,117,411  | )           |            |            | (11,293,259 | )          
|                                                   | Other investing activities                                                                                                                               |                                        |                                                         | 5,559       |             |            |            | 158,304     |            
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|                                                   |                                                                                                                                                          | Net cash used in investing activities  |                                                         |             | (14,750,225 | )          |            |             | (26,156,452 | )         
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|CASH FLOWS FROM FINANCING ACTIVITIES:              |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|                                                   | Repayments of long-term debt                                                                                                                             |                                        |                                                         | (11,625,000 | )           |            |            | (63,625,000 | )          
|                                                   | Proceeds from long-term debt                                                                                                                             |                                        |                                                         | 7,500,000   |             |            |            | 55,500,000  |            
|                                                   | Proceeds from capital contributions                                                                                                                      |                                        |                                                         |            |             |            |            | 15,000,000  |            
|                                                   | Maturity of restricted investments, net of
    interest                                                                                                  |                                        |                                                         |            |             |            |            | 12,250,000  |            
|                                                   | Other financing activities                                                                                                                               |                                        |                                                         | (55,626     | )           |            |            | (55,490     | )          
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|                                                   |                                                                                                                                                          |                                        | Net cash (used in) provided by financing
    activities |             |             | (4,180,626 | )          |             |             | 19,069,510 | 
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|NET DECREASE IN CASH AND CASH EQUIVALENTS          |                                                                                                                                                          |                                        | (1,861,158                                              | )           |             |            | (6,631,955 | )          
|CASH AND CASH EQUIVALENTS, beginning of period     |                                                                                                                                                          |                                        | 4,286,325                                               |             |             |            | 8,871,817  |            
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|CASH AND CASH EQUIVALENTS, end of period           |                                                                                                                                                          | $                                      | 2,425,167                                               |             |             | $          | 2,239,862  |            
|                                                   |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |                                                                                                                                                          |                                        |                                                         |             |             |            |            |            
|                                                   | Cash paid for                                                                                                                                           |                                        |                                                         |             |             |            |            |             |            
|                                                   |                                                                                                                                                          | Interest, net of amounts capitalized   |                                                         | $           | 19,625,790  |            |            | $           | 29,597,679  |           

The accompanying notes are an integral part of
these condensed consolidated financial statements.

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DOBSON/ SYGNET COMMUNICATIONS
COMPANY






NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)


The condensed consolidated balance sheets of
Dobson/ Sygnet Communications Company (the Company)
as of June 30, 2002, the condensed consolidated statements
of operations for the three and six months ended June 30,
2002 and 2001 and the condensed consolidated statements of cash
flows for the six months ended June 30, 2002 and 2001 are
unaudited. In the opinion of management, such financial
statements include all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of
financial position, results of operations, and cash flows for
the periods presented, except for those related to the adoption
of new accounting principles as described below.

The condensed consolidated balance sheet data at
December 31, 2001 was derived from audited financial
statements, but does not include all disclosures required by
generally accepted accounting principles. The financial
statements presented herein should be read in connection with
the Companys December 31, 2001 consolidated financial
statements included in the Companys Form 10-K for the
fiscal year ended December 31, 2001.

1.     Organization

The Company was incorporated under the name Front
Nine Holdings, Inc. as an Oklahoma corporation on July 23,
1998. The Company was formed to acquire the operations of Sygnet
Wireless, Inc. Subsequently, the Company changed its name to
Dobson/ Sygnet Communications Company and amended its
certificate of incorporation on December 2, 1998 to reflect
this change. On December 23, 1998, the Company completed
the acquisition of Sygnet Wireless, Inc. for
$337.5 million. The Company is a wholly-owned subsidiary of
Dobson Communications Corporation (Dobson
Communications) and is a provider of rural and suburban
wireless telephone services.

The Company operates in one business segment
pursuant to Statement of Financial Accounting Standards
(SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information.

2.     Long-Term
Debt

The Company, through its wholly-owned subsidiary,
Sygnet Wireless, Inc., has credit facilities for an aggregate of
$325.9 million, consisting of a $37.4 million
revolving credit facility and $288.5 million of term loan
facilities. Interest on the revolving credit facility and the
term loan facilities is based on a prime rate or a LIBOR
formula, and has ranged between 4.4% and 10.5% since inception.
As of June 30, 2002, the Company had $296.0 million
outstanding under its credit facility and it had
$29.9 million of availability. Obligations under the credit
facility are secured by a pledge of the capital stock of its
subsidiary as well as a lien on substantially all of its assets
and the assets of its operating subsidiary. The credit facility
requires the maintenance of certain financial ratios. The
failure to maintain such ratios would constitute an event of
default, notwithstanding the Companys ability to meet its
debt service obligations. As of June 30, 2002, the Company
was in compliance with the required financial ratios. In
addition, the Companys ability to borrow under the credit
facility is limited by the requirement that, on a quarterly
basis, the amount available under the credit facility will
reduce until it terminates.

As of June 30, 2002, the Company had
outstanding $200.0 million principal amount of senior notes
that bear interest at an annual rate of 12.25% and mature in
2008.

The principal stockholder of Dobson
Communications, Dobson CC Limited Partnership, or DCCLP, and
certain of its affiliates, are parties to credit agreements with
Bank of America, N.A. These credit agreements have aggregate
principal amounts outstanding of approximately $280 million
as of June 30, 2002. To secure their obligations under
these credit agreements, DCCLP and these affiliates individually
pledged certain assets, which include beneficial ownership of
securities representing controlling interests in DCCLP and
Dobson Communications. These loans will mature on March 31,
2003, unless extended. If any of the loans are not paid at
maturity or if an event of default occurs under any of the loan
agreements and the lender elects to

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DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


foreclose on the collateral, the Company could
experience a change of control under its indenture governing its
outstanding senior notes. Upon a change of control, the Company
would be required to offer to purchase its outstanding senior
notes at 101% of the principal amount plus accrued and unpaid
interest. There can be no assurance that the Company would have
the funds necessary to complete the repurchase. If the Company
failed to complete the purchase of the tendered senior notes,
the senior noteholders or the indenture trustee would be
entitled to accelerate the maturity of the Companys
outstanding senior notes. A foreclosure on DCCLPs pledged
shares could also result in an event of default under the credit
facility of Dobson Operating Company, a subsidiary of Dobson
Communications. An event of default under the Dobson Operating
Company credit facility would result in an event of default
under the Companys credit facility, potentially resulting
in the acceleration of all outstanding indebtedness under the
Companys credit facility.

3.     Stockholders
(Deficit) Equity

The Company received an equity contribution of
$15.0 million during the six months ended June 30,
2001 from its parent company, Dobson Communications. This
contribution was used to repay debt under the Companys
credit facility.

4.     Change in
Accounting Principles and Practices

In July 2001, the Financial Accounting Standards
Board (FASB) issued SFAS No. 141,
Business Combinations and No. 142,
Goodwill and Other Intangible Assets. These
standards prohibit the application of the pooling-of-interests
method of accounting for business combinations effective
June 30, 2001 and require companies to cease amortization
of existing goodwill and intangible assets with indefinite lives
effective January 1, 2002. As required under the new
standards, the Company treats its wireless license acquisition
costs as indefinite life intangible assets. As a result,
effective January 1, 2002, the Company ceased the
amortization of its wireless license acquisition costs. Instead,
the Company now tests its indefinite life intangible assets for
impairment at least annually and will only adjust the carrying
amount of these intangible assets upon an impairment of the
indefinite life intangible assets. During the three and six
months ended June 30, 2001, the Company recorded
approximately $7.4 million and $14.8 million of
amortization expense, net of income tax benefit, related to its
wireless license acquisition costs, respectively. Without this
amortization, the Companys net loss applicable to common
stockholders would have been $3.3 million and
$8.0 million for the three and six months ended
June 30, 2001, respectively.

Through December 31, 2001, the
Companys accounting policy was to evaluate the carrying
value of its intangible assets based on its undiscounted cash
flows. However, as a result of implementing SFAS No. 142,
the Company is now required to evaluate the carrying value of
its indefinite life intangible assets using their fair values.
As a result of the implementation of SFAS No. 142 on
January 1, 2002, the Company recorded a charge, net of
income tax benefit, of approximately $137.8 million to
reflect the write down of its wireless license acquisition costs
to their fair value.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

The following discussion and analysis presents
factors, which we believe are relevant to an assessment and
understanding of our condensed consolidated financial position
and results of operations. This financial and business analysis
should be read in conjunction with our condensed consolidated
financial statements and the related notes.

Overview

We own and operate rural and suburban wireless
communication systems serving a large cluster of properties. As
of June 30, 2002, our systems covered a total population of
approximately 2.4 million and we had 303,900 subscribers.
Our wireless systems are located in Youngstown, Ohio and Erie,
Pennsylvania, and in primarily rural and suburban areas between
the Cleveland, Akron-Canton, Pittsburgh, Buffalo and Rochester
metropolitan areas.

Revenue

Our operating revenue consists of service
revenue, roaming revenue and equipment and other revenue.

We derive service revenue primarily by providing
wireless services to our subscribers. The industry has
experienced a trend of declining average revenue per minute as
competition among wireless service providers has led to
reductions in rates for airtime. The yield on our service
revenue (service revenue divided by subscriber minutes of use)
was $0.23 and $0.32 per minute for the three months ended
June 30, 2002 and 2001, respectively, and $0.24 and
$0.32 per minute for the six months ended June 30,
2002 and 2001, respectively. These declines have been generally
offset by increases in average minutes-of-use per subscriber.
The average minute-of-use per subscriber increased 37.4% and
32.0% for the three and six months ended June 30, 2002,
compared to the same periods in 2001, respectively. We believe
that the industry trend of increasing minutes of use per
subscriber will continue to offset declining revenues per minute
of use due to the continued popularity of single rate calling
plans and the enhanced service capacity of recently developed
digital networks.

We derive roaming revenue by providing service to
subscribers of other wireless providers when those subscribers
roam into our markets and use our systems to carry
their calls. Roaming revenue accounted for 24.6% and 23.9% of
our operating revenue for the three months ended June 30,
2002 and 2001, respectively, and 23.6% and 23.4% for the six
months ended June 30, 2002 and 2001, respectively. Roaming
revenue typically yields higher average per minute rates and
higher margins than revenues from our subscribers. We achieve
these higher margins because we incur relatively lower
incremental costs related to network operation, billing,
customer service and collections in servicing roaming customers
as compared to our home subscribers. However, even though
roaming revenue yields have offered higher margins than revenue
from our subscribers, the yields are declining due to increased
market pressures and competition between wireless providers. Our
roaming yield (roaming revenue, which includes airtime, toll
charges and surcharges, divided by roaming minutes of use) was
$0.25 and $0.32 for the three months ended June 30, 2002
and 2001, respectively, and $0.25 and $0.33 for the six months
ended June 30, 2002 and 2001, respectively. We believe that
the trend of increasing roaming minutes will continue to offset
declining roaming yields. Roaming minutes increased 45.2% and
44.0% for the three and six months ended June 30, 2002,
compared to the same periods in 2001, respectively. Roaming
yields are decreasing as a result of new contracts and scheduled
rate reductions in existing contracts. We believe these roaming
contracts are beneficial because they secure existing traffic
and provide opportunity for a continuing increase in the volume
of traffic. Roaming revenue tends to be impacted by seasonality.
We typically have higher roaming revenue during the second and
third quarters of each year, as users tend to travel more and,
therefore, use their wireless phones more during the spring and
summer months.

We include any toll, or long-distance, revenues
related to our wireless and roaming services in service revenue
and roaming revenue. Equipment revenue is revenue from selling
wireless equipment to our subscribers.

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Costs and Expenses

Our primary operating expense categories include
cost of service, cost of equipment, marketing and selling costs,
general and administrative costs and depreciation and
amortization.

Our cost of service consists primarily of costs
to operate and maintain our facilities utilized in providing
service to customers and amounts paid to third-party wireless
providers for providing service to our subscribers when our
subscribers roam into their markets. As discussed above with
regard to service revenue, there is a continuing trend toward
increasing minutes-of-use per subscriber. This includes minutes
used by our subscribers when they roam into other
providers markets. Consistent with this trend, our roaming
expense per minute has declined. This decline in expense per
minute has helped offset the increased expense from growth in
minutes-of-use per subscriber.

Our cost of equipment represents the cost
associated with telephone equipment and accessories sold to
customers. In recent years, we and other wireless providers have
increased the use of discounts on phone equipment and free phone
promotions, as competition between service providers has
intensified. As a result, we have incurred, and expect to
continue to incur, losses on equipment sales. While we expect to
continue these discounts and promotions, we believe that these
promotions will result in increased revenue from increases in
the number of wireless subscribers.

Our marketing and selling costs include
advertising, compensation paid to sales personnel and
independent agents and all other costs to market and sell
wireless products and services, and certain costs related to
customer retention. We pay commissions to sales personnel and
independent agents for new business generated.

Our general and administrative costs include all
infrastructure costs, including costs for customer support,
billing, collections, and corporate administration.

Our depreciation and amortization expense
represents the costs associated with the depreciation of our
fixed assets and the amortization of certain intangible assets.
Through December 31, 2001, these intangible assets
primarily consisted of wireless license acquisition costs and
customer lists. However, with the implementation of SFAS
No. 142, Goodwill and Other Intangible Assets,
we have ceased the amortization of wireless license acquisition
costs effective January 1, 2002. See Critical
Accounting Policies and Practices below for further
details.

Critical Accounting Policies and
Practices

We must necessarily use estimates in the
presentation of our financial statements with respect to the
effect of matters that are inherently uncertain. Our use of
estimates and assumptions affects the reported amounts of
assets, liabilities, and the amount of revenues and expenses we
recognize for and during the reporting period.

Our general and administrative expenses and
certain other operating expenses include all infrastructure
costs, including costs for customer support, billing,
collections and corporate administration, all of which is
provided by our parent, Dobson Communications. Dobson
Communications shares these costs with us based primarily on the
estimated subscribers and populations in our respective licensed
areas. If there were a change in the method used to allocate
shared costs between Dobson Communications and us, the change
could have a significant impact on our results of operations.

We depreciate our property, plant and equipment
and amortize our customer lists and certain other intangible
assets over their useful lives. These useful lives are based on
our estimates of the period that the assets will generate
revenue. We review our intangible assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. With the
implementation of SFAS No. 142, Goodwill and Other
Intangible Assets, which requires companies to cease the
amortization of existing goodwill and intangible assets with
indefinite lives, we treat our wireless license acquisition
costs as indefinite life intangibles. As a result, effective
January 1, 2002, we ceased the amortization of our wireless
license acquisition costs. Instead, we now test these licenses
for impairment at

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least annually. This change in policy has and may
continue to have a significant impact to our results of
operations and financial position. For the three and six months
ended June 30, 2001, the aggregate amount of amortization
expense, net of income tax benefit, attributable to our wireless
license acquisition costs was approximately $7.4 million
and $14.8 million, respectively. Without this amortization,
our net loss applicable to common stockholders would have been
$3.3 million and $8.0 million for the three and six
months ended June 30, 2001, respectively.


Through December 31, 2001, our accounting
policy was to evaluate the carrying value of our intangible
assets based on our undiscounted cash flows. However, as a
result of implementing SFAS No. 142, we are now required to
evaluate the carrying value of our indefinite life intangible
assets using their fair values. Upon implementation of this new
pronouncement, we recorded a charge, net of income tax benefit,
of approximately $137.8 million to reflect the write-down
of our wireless license acquisition costs to their fair value.

Results of Operations

In the text below, financial statement numbers
have been rounded; however, the percentage changes are based on
the actual financial statement numbers.



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Three Months Ended June 30, 2002
    Compared to Three Months ended June 30, 2001

Operating revenues.For the three months ended
June 30, 2002, our total operating revenue increased
$4.8 million, or 10.5%, to $50.9 million from
$46.1 million for the comparable period in 2001. Our total
service revenue, roaming revenue and equipment and other revenue
represented 72.9%, 24.6% and 2.5%, respectively, of our total
operating revenue during the three months ended June 30,
2002 and 72.5%, 23.9% and 3.6%, respectively, of our total
operating revenue during the three months ended June 30,
2001.

The following table sets forth the components of
our revenue for the periods indicated:

|                   |                             |                    |   |        |        |  |   |        |        | 
|------------------ | --------------------------- | ------------------ | - | ------ | ------ |  | - | ------ | ------ | 
|                   |                             |                   
|                   |                             | Three Months Ended
|                   |                             | June 30,          
|                   |                             |                   
|                   |                             | 2002               |   | 2001  
|                   |                             |                    |   |       
|                   |                             |                   
|                   |                             | ($ in thousands)  
|Operating revenue: |                             |                    |   |        |        |  |   |       
|                   | Service revenue             |                    | $ | 37,097 |        |  | $ | 33,404 |       
|                   | Roaming revenue             |                    |   | 12,516 |        |  |   | 10,996 |       
|                   | Equipment and other revenue |                    |   | 1,298  |        |  |   | 1,667  |       
|                   |                             |                    |   |        |        |  |   |       
|                   |                             | Total              |   | $      | 50,911 |  |   | $      | 46,067 | 
|                   |                             |                    |   |        |        |  |   |       

For the three months ended June 30, 2002,
our service revenue increased $3.7 million, or 11.1%, to
$37.1 million from $33.4 million for the three months
ended June 30, 2001. This increase was attributable to
increased penetration and usage. Our subscriber base increased
13.4% to 303,900 at June 30, 2002 from 268,100 at
June 30, 2001. Even though we have experienced increased
competition and market pressure, our average monthly service
revenue per subscriber remained constant at $42 for the
three months ended June 30, 2002 and 2001, because our
service revenue has been positively impacted by changes in the
mix of digital and analog subscribers in our subscriber base. On
June 30, 2002, 85.6% of our subscriber base was on
digital rate plans compared to 64.9% at June 30, 2001.
Our digital subscribers tend to use more minutes in a larger
home area than our analog subscribers.

For the three months ended June 30, 2002,
our roaming revenue increased $1.5 million, or 13.8%, to
$12.5 million from $11.0 million for the three months
ended June 30, 2001. This increase was primarily
attributable to a 45.2% increase in roaming minutes in our
markets due to expanded coverage areas and increased usage,
offset by a 21.9% decline in our roaming revenue per
minute-of-use.

For the three months ended June 30, 2002,
our equipment and other revenue decreased $0.4 million, or
22.1%, to $1.3 million from $1.7 million for the three
months ended June 30, 2001. This decrease primarily
resulted from increased phone discounts due to competitive
market pressures and a slow-down in the

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migration of existing subscribers from analog to
digital service. We migrated 1,400 subscribers from analog
to digital during the three months ended June 30, 2002,
compared to 11,000 subscribers for the same period in 2001.


Cost of service.For
the three months ended June 30, 2002, our total cost of
service increased $0.5 million, or 4.1%, to
$11.6 million from $11.1 million for the comparable
period in 2001. As described with our service revenue above, on
average, our digital subscribers use more minutes than our
analog subscribers. The increase of $0.5 million was
primarily the result of increased networking costs associated
with increases in our network capacity necessary to handle
minute-of-use growth. Minutes-of-use on our network increased
approximately 59.8% for the three months ended
June 30, 2002 compared to the same period in 2001.

Cost of equipment.For the three months ended
June 30, 2002, our cost of equipment decreased
$0.4 million, or 7.7%, to $4.4 million from
$4.8 million for the three months ended June 30, 2001,
primarily as a result of decreases in the number of phones sold
due to the slow-down in the migration of subscribers from analog
to digital service.

Marketing and selling costs.For the three months ended
June 30, 2002, our marketing and selling costs increased
slightly to $6.5 million from $6.2 million for the
three months ended June 30, 2001. This increase was the
result of an increase in gross subscriber additions, which
totaled 23,000 for the three months ended June 30, 2002
compared to gross subscriber additions of 20,100 for the three
months ended June 30, 2001. In addition, as a percentage of
total operating revenue, marketing and selling costs decreased
to 12.7% for the three months ended June 30, 2002 from
13.4% for the three months ended June 30, 2001, as a result
of continued efficiencies gained from centralized marketing
functions with our parent, Dobson Communications.

General and administrative costs.For the three months ended
June 30, 2002 and 2001, our general and administrative
costs remained constant at $7.0 million. This was the
result of continued efficiencies gained from centralized
administrative functions with our parent, Dobson Communications.
Our overall monthly general and administrative costs per average
subscriber decreased to $8 for the three months ended
June 30, 2002 compared to $9 for the three months ended
June 30, 2001.

Depreciation and amortization expense.For the three months ended
June 30, 2002, our depreciation and amortization expense
decreased $12.0 million, or 63.0%, to $7.0 million
from $19.0 million for the comparable period in 2001. This
decrease is a result of implementing SFAS No. 142,
Goodwill and Other Intangible Assets, which required
companies to stop amortizing existing goodwill and intangible
assets with indefinite lives effective January 1, 2002.
Under this new rule, we treat our wireless license acquisition
costs as indefinite life intangible assets. For the three months
ended June 30, 2001, the aggregate amount of amortization
expense attributable to our wireless license acquisition costs
was approximately $12.0 million.

Interest expense.For the three months ended
June 30, 2002, our interest expense decreased
$4.2 million, or 27.2%, to $11.2 million from
$15.4 million for the three months ended June 30,
2001. This decrease is a result of decreased variable interest
rates and the reduction of the outstanding balance on our
revolving credit facility.

Net income (loss).For the three months ended
June 30, 2002, our net income was $2.0 million
compared to net loss of $10.7 million for the three months
ended June 31, 2001. This increase in income was primarily
a result of our decrease in depreciation and amortization as a
result of the implementation of SFAS No. 142, as well as a
decrease in interest expense as described above.



| |                                                                              
| | -----------------------------------------------------------------------------
| | Six Months Ended June 30, 2002
    Compared to Six Months ended June 30, 2001

Operating revenues.For the six months ended June 30,
2002, our total operating revenue increased $7.9 million,
or 8.9%, to $96.7 million from $88.8 million for the
comparable period in 2001. Our total service revenue, roaming
revenue and equipment and other revenue represented 73.6%, 23.6%
and 2.8%, respectively, of our total operating revenue during
the six months ended June 30, 2002 and 72.5%, 23.4% and
4.1%, respectively, of our total operating revenue during the
six months ended June 30, 2001.

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The following table sets forth the components of
our revenue for the periods indicated:

|                   |                             |                  |   |        |        |  |   |        |        | 
|------------------ | --------------------------- | ---------------- | - | ------ | ------ |  | - | ------ | ------ | 
|                   |                             |                 
|                   |                             | Six Months Ended
|                   |                             | June 30,        
|                   |                             |                 
|                   |                             | 2002             |   | 2001  
|                   |                             |                  |   |       
|                   |                             |                 
|                   |                             | ($ in thousands)
|Operating revenue: |                             |                  |   |        |        |  |   |       
|                   | Service revenue             |                  | $ | 71,173 |        |  | $ | 64,360 |       
|                   | Roaming revenue             |                  |   | 22,835 |        |  |   | 20,793 |       
|                   | Equipment and other revenue |                  |   | 2,668  |        |  |   | 3,625  |       
|                   |                             |                  |   |        |        |  |   |       
|                   |                             | Total            |   | $      | 96,676 |  |   | $      | 88,778 | 
|                   |                             |                  |   |        |        |  |   |       

For the six months ended June 30, 2002, our
service revenue increased $6.8 million, or 10.6%, to
$71.2 million from $64.4 million for the six months
ended June 30, 2001. This increase was attributable to
increased penetration and usage. Our subscriber base increased
13.4% to 303,900 at June 30, 2002 from 268,100 at
June 30, 2001. Even though we have experienced increased
competition and market pressure, our average monthly service
revenue per subscriber remained constant at $41 for the six
months ended June 30, 2002 and 2001, because our average
monthly service revenue per subscriber has been positively
impacted by changes in the mix of digital and analog subscribers
in our subscriber base. On June 30, 2002, 85.6% of our
subscriber base was on digital rate plans compared to 64.9% at
June 30, 2001. Our digital rate plans typically produce
higher service revenue per subscriber and allow subscribers to
use more minutes in a larger home area than our analog rate
plans.

For the six months ended June 30, 2002, our
roaming revenue increased $2.0 million, or 9.8%, to
$22.8 million from $20.8 million for the six months
ended June 30, 2001. This increase was primarily
attributable to a 44.0% increase in roaming minutes in our
markets due to expanded coverage areas and increased usage,
offset by a 24.2% decline in our roaming revenue per
minute-of-use.

For the six months ended June 30, 2002, our
equipment and other revenue decreased $0.9 million, or
26.4%, to $2.7 million from $3.6 million for the six
months ended June 30, 2001. This decrease primarily
resulted from increased phone discounts due to competitive
market pressures and a slow-down in the migration of existing
subscribers from analog to digital service. We migrated
7,300 subscribers from analog to digital during the six
months ended June 30, 2002, compared to
17,700 subscribers for the same period in 2001.

Cost of service.For
the six months ended June 30, 2002, our total cost of
service increased $1.8 million, or 8.9%, to
$22.5 million from $20.7 million for the comparable
period in 2001. As described above with our service revenue, on
average, our digital subscribers use more minutes than our
analog subscribers. This increased usage also increases the
minutes used by our subscribers outside of our markets, thus
increasing the expenses we are charged by third-party wireless
providers. Our cost of service increased approximately
$0.1 million due to increased charges by third-party
wireless providers. The remaining increase of $1.7 million
was primarily the result of increased networking costs
associated with increases in our network capacity necessary to
handle minute-of-use growth. Minute-of-use on our network
increased approximately 52.9% for the six months ended
June 30, 2002 compared to the same period in 2001.

Cost of equipment.For the six months ended June 30,
2002, our cost of equipment decreased $1.8 million, or
17.6%, to $8.9 million from $10.7 million for the six
months ended June 30, 2001, primarily as a result of
decreases in the number of phones sold due to the slow-down in
the migration of subscribers from analog to digital service.

Marketing and selling costs.For the six months ended June 30,
2002 and 2001, our marketing and selling costs remained constant
at $12.5 million. In addition, as a percentage of total
operating revenue, marketing and selling costs decreased to
12.9% for the six months ended June 30, 2002 from 14.1% for
the six months ended June 30, 2001, as a result of
continued efficiencies gained from centralized marketing
functions with our parent, Dobson Communications. With these
efficiencies gained, we were able to stabilize marketing

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and selling costs while slightly increasing our
gross subscriber additions. Gross subscriber additions totaled
45,500 for the six months ended June 30, 2002 compared to
gross subscriber additions of 42,400 for the six months ended
June 30, 2001.


General and administrative costs.For the six months ended June 30,
2002, our general and administrative costs decreased
$0.6 million, or 4.1%, to $13.5 million from
$14.1 million for the six months ended June 30, 2001.
This decrease was the result of continued efficiencies gained
from centralized administrative functions with our parent,
Dobson Communications. In addition, our overall monthly general
and administrative costs per average subscriber decreased to $8
for the six months ended June 30, 2002 compared to $9 for
the six months ended June 30, 2001.

Depreciation and amortization expense.For the six months ended June 30,
2002, our depreciation and amortization expense decreased
$23.7 million, or 63.3%, to $13.8 million from
$37.5 million for the comparable period in 2001. This
decrease is a result of implementing SFAS No. 142,
Goodwill and Other Intangible Assets, which required
companies to stop amortizing existing goodwill and intangible
assets with indefinite lives effective January 1, 2002.
Under this new rule, we treat our wireless license acquisition
costs as indefinite life intangible assets. For the six months
ended June 30, 2001, the aggregate amount of amortization
expense attributable to our wireless license acquisition costs
was approximately $23.9 million.

Interest expense.For the six months ended June 30,
2002, our interest expense decreased $8.2 million, or
26.7%, to $22.5 million from $30.7 million for the six
months ended June 30, 2001. This decrease is a result of
decreased variable interest rates and the reduction of the
outstanding balance on our revolving credit facility.

Cumulative effect of change in accounting
principle.For the six months ended
June 30, 2002, we recognized an impairment on our wireless
license acquisition costs of approximately $137.8 million,
net of tax benefit, as a result of implementing SFAS
No. 142 Goodwill and Other Intangible Assets.

Net loss.For the
six months ended June 30, 2002, our net loss was
$135.9 million. Our net loss increased $113.1 million,
or 495.4%, from $22.8 million for the six months ended
June 30, 2001. This increase in net loss was primarily a
result of our impairment recognized with the implementation of
SFAS No. 142.

Liquidity and Capital Resources

We have required, and will likely continue to
require, substantial capital to further develop, expand and
upgrade our wireless systems and those we may acquire. We have
financed our operations through cash flows from operating
activities, capital contributions from our parent, bank debt and
the sale of debt securities.

At June 30, 2002, we had a working capital
deficit of $12.8 million (a ratio of current assets to
current liabilities of 0.7:1) and an unrestricted cash balance
of $2.4 million, which compares to working capital deficit
of $5.9 million (a ratio of current assets to current
liabilities of 0.8:1) and an unrestricted cash balance of
$4.3 million at December 31, 2001.

Our net cash provided by operating activities
totaled $17.1 million for the six months ended
June 30, 2002 compared to $0.5 million for the six
months ended June 30, 2001. The increase is primarily due
to the increase in our income before cumulative effect of change
in accounting principle and the increase from our deferred
income taxes, offset by a decrease in depreciation and
amortization.

Our net cash used in investing activities totaled
$14.8 million for the six months ended June 30, 2002
compared to $26.2 million for the six months ended
June 30, 2001. The decrease of $11.4 million related
primarily to a decrease in capital expenditures and the decrease
in payable-affiliates. Capital expenditures for the six months
ended June 30, 2002 were $13.6 million compared to
$15.0 million for the six months ended June 30, 2001.

Net cash used in financing activities was
$4.2 million for the six months ended June 30, 2002
compared to net cash provided by financing activities of
$19.1 million for the six months ended June 30, 2001.
Financing activity uses for the six months ended June 30,
2002 consisted primarily of repayments of long-term debt of
$11.6 million offset by proceeds from long-term debt of
$7.5 million. Financing activity sources for the six

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months ended June 30, 2001, consisted
primarily of proceeds from long-term debt of $55.5 million,
a capital contribution from our parent company, Dobson
Communications, of $15.0 million and maturity of restricted
investments of $12.3 million, which were offset by
repayments of long-term debt totaling $63.6 million.


Our capital expenditures were $13.6 million
for the six months ended June 30, 2002. We have budgeted
approximately $18.0 to $20.0 million for capital
expenditures in 2002. The amount and timing of capital
expenditures may vary depending on the rate at which we expand
and develop our wireless systems and whether we consummate
additional acquisitions.

Through our wholly-owned subsidiary, Sygnet
Wireless, Inc., we have credit facilities, for an aggregate of
$325.9 million, consisting of a $37.4 million
revolving credit facility and $288.5 million of term loan
facilities. Interest on the revolving credit facility and the
term loan facilities is based on a prime rate or a LIBOR
formula, and has ranged between 4.4% and 10.5% since inception.
As of June 30, 2002, we had $296.0 million outstanding
under our credit facility and we had $29.9 million of
availability. Obligations under our facility are secured by a
pledge of the capital stock of our subsidiary as well as a lien
on substantially all of our assets and the assets of our
operating subsidiary. The credit facility requires that we
maintain certain financial ratios. The failure to maintain such
ratios would constitute an event of default, notwithstanding our
ability to meet our debt service obligations. As of
June 30, 2002, we were in compliance with the required
financial ratios. In addition, our ability to borrow under our
credit facility is limited by the requirement that, on a
quarterly basis, the amount available under our credit facility
will reduce until it terminates.

As of June 30, 2002, we had outstanding
$200.0 million principal amount of senior notes that bear
interest at an annual rate of 12.25% and mature in 2008.

The principal stockholder of Dobson
Communications, Dobson CC Limited Partnership, or DCCLP,
and certain of its affiliates, are parties to credit agreements
with Bank of America, N.A. These credit agreements have
aggregate principal amounts outstanding of approximately
$280 million as of June 30, 2002. To secure their
obligations under these credit agreements, DCCLP and these
affiliates individually pledged certain assets, which include
beneficial ownership of securities representing controlling
interests in DCCLP and Dobson Communications. These loans will
mature on March 31, 2003, unless extended. If any of the
loans are not paid at maturity or if an event of default occurs
under any of the loan agreements and the lender elects to
foreclose on the collateral, we could experience a change of
control under the indenture governing our outstanding senior
notes. Upon a change of control, we would be required to offer
to purchase our outstanding senior notes at 101% of the
principal amount plus accrued and unpaid interest. There can be
no assurance that we would have the funds necessary to complete
the repurchase. If we failed to complete the purchase of the
tendered senior notes, the senior noteholders or the indenture
trustee would be entitled to accelerate the maturity of the
senior notes. A foreclosure on DCCLPs pledged shares could
also result in an event of default under the credit facility of
Dobson Operating Company, a subsidiary of Dobson Communications.
An event of default under the Dobson Operating Company credit
facility would result in an event of default under our credit
facility, potentially resulting in the acceleration of all
outstanding indebtedness under our credit facility.

Although we cannot provide you any assurance, we
believe that borrowings under our bank facility and cash flow
from operations will be sufficient to satisfy our capital
expenditure, working capital and debt service obligations for
the next twelve months. We will need to refinance our bank
facility and the senior notes at their maturities, which begin
in 2007. Our ability to do so will depend on, among other
things, our financial condition at the time, the restrictions in
the instruments governing our indebtedness and other factors,
including market conditions beyond our control. The actual
amount and timing of our future capital requirements may differ
materially from our estimates as a result of, among other
things, the demand for our services and regulatory,
technological and competitive developments. Sources of
additional financing may include commercial bank borrowings,
vendor financing and the sale of equity or debt securities. We
cannot assure you that any such financing will be available on
acceptable terms or at all.

Effect of New Accounting Standards

In July 2001, the FASB issued SFAS No. 141,
Business Combinations and No. 142,
Goodwill and Other Intangible Assets. These
standards prohibit the application of the pooling-of-interests
method of

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accounting for business combinations effective
June 30, 2001 and require companies to stop amortizing
existing goodwill and intangible assets with indefinite lives
effective January 1, 2002. As required under the new
standards, we treat our wireless license acquisition costs as
indefinite life intangible assets. As a result, effective
January 1, 2002, we ceased the amortization of wireless
license acquisition costs. Instead, we will test our indefinite
life intangible assets for impairment at least annually and will
only adjust the carrying amount of these intangible assets upon
an impairment of the indefinite life intangible assets. During
the three and six months ended June 30, 2001, we recorded
approximately $7.4 million and $14.8 million of
amortization expense, net of income tax benefit, related to our
wireless license acquisition costs, respectively. Without this
amortization, our net loss applicable to common stockholder
would have been $3.3 million and $8.0 million for the
three and six months ended June 30, 2001, respectively.


Through December 31, 2001, our accounting
policy was to evaluate the carrying value of our intangible
assets based on our undiscounted cash flows. However, as a
result of implementing SFAS No. 142, we are now required to
evaluate the carrying value of our indefinite life intangible
assets using their fair values. As a result of our
implementation of SFAS No. 142 on January 1, 2002, we
recorded a charge, net of income tax benefit, of approximately
$137.8 million to reflect the write-down of our wireless
license acquisition costs to their fair value.

In July 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations. This
statement provides accounting and reporting standards for costs
associated with the retirement of long-lived assets. It requires
entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred.
When the liability is initially recorded, the entity capitalizes
a cost by increasing the carrying amount of the related
long-lived asset. Over time, the liability is accreted to its
present value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon
settlement. We have not yet determined the effect that this new
accounting standard may have on our results of operations,
financial position and cash flows. We will be required to
implement this standard effective January 1, 2003.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. This statement replaces
SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of. However, it maintains the fundamental provisions of
SFAS No. 121 for recognition and measurement of the
impairment of long-lived assets to be held and used and for
measurement of long-lived assets to be disposed of by sale. This
statement applies to all long-lived assets, including
discontinued operations, and replaces the provisions of APB
Opinion No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a
Segment of a Business, for the disposal of segments of a
business. This statement requires that those long-lived assets
be measured at the lower of carrying amount or fair value less
cost to sell. We implemented this standard in the fourth quarter
of 2001, effective January 1, 2001, with no impact to our
financial statements.

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. SFAS No. 145 will be effective for
fiscal years beginning after May 15, 2002, and upon
adoption, we must reclassify extraordinary losses on
extinguishment of debt as interest expense in the prior periods
that have had extraordinary losses on debt extinguishments.

In July 2002, the FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. The provisions of SFAS No. 146 are
effective for exit or disposal activities that are initiated
after December 31, 2002. We do not expect the adoption of
SFAS No. 146 to have a material effect on our financial
condition or operations.

Forward-Looking Statements

The description of our plans set forth herein,
including planned capital expenditures and acquisitions, are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. These plans involve a number of risks and uncertainties.
Important factors that could

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cause actual capital expenditures, acquisition
activity or our performance to differ materially from the plans
include, without limitation, our ability to satisfy the
financial covenants of our outstanding debt instruments and to
raise additional capital; our ability to manage our rapid growth
successfully and to compete effectively in our wireless business
against competitors with greater financial, technical, marketing
and other resources; changes in end-user requirements and
preferences; the development of other technologies and products
that may gain more commercial acceptance than those of ours; and
adverse regulatory changes. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. We undertake no obligation to update
or revise these forward-looking statements to reflect events or
circumstances after the date hereof including, without
limitation, changes in our business strategy or planned capital
expenditures, or to reflect the occurrence of unanticipated
events.





Item 3.     Quantitative
and Qualitative Disclosure About Market Risk

Our primary market risk relates to changes in
interest rates. Market risk is the potential loss arising from
adverse changes in market prices and rates, including interest
rates. We do not enter into derivatives or other financial
instruments for trading or speculative purposes. The objective
of our financial risk management is to minimize the negative
impact of interest rate fluctuations on our earnings and equity.
We currently are not involved with any derivatives or other
financial instruments.

At June 30, 2002, we had long-term debt
outstanding of $496.0 million, of which,
$296.0 million bears interest at floating rates. These
rates averaged 5.0% for the six months ended June 30, 2002.
One percentage point of an interest rate adjustment would change
our interest expense on an annual basis by approximately
$3.0 million.

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PART II

OTHER INFORMATION




Item 1.     Legal
Proceedings

See Item 1, Part 3. of our
Form 10-K for the fiscal year ended December 31, 2001.




Item 2.     Changes
in Securities and Use of Proceeds

Not applicable




Item 3.     Defaults
Upon Senior Securities

Not applicable




Item 4.     Submission
of Matters to a Vote of Security Holders

Not applicable




Item 5.     Other
Information

Not applicable




Item 6.     Exhibits
and Reports on Form 8-K

(a) Exhibits

The following exhibits are filed as a part of
this report:

|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                      |  |            
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|Exhibit |    |             |  | Method of                                                                                                                                                                                                                                                                                                                                           
|Numbers |    | Description |  | Filing                                                                                                                                                                                                                                                                                                                                              
|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                     
|        | 3  | .1          |  | Registrants Amended Certificate of
    Incorporation.                                                                                                                                                                                                                                                                                               |  | (2)[3.1]   
|        | 3  | .2          |  | Registrants Amended Bylaws.                                                                                                                                                                                                                                                                                                                         |  | (2)[3.2]   
|        | 4  | .1          |  | Indenture dated December 23, 1998 between
    Registrant, as Issuer, and United States Trust Company of New
    York, as Trustee.                                                                                                                                                                                                                    |  | (1)[4.1]   
|        | 4  | .2          |  | Form of Note under Indenture (contained in
    Exhibit 4.1 hereto).                                                                                                                                                                                                                                                                                  |  | (1)[4.1]   
|        | 4  | .3          |  | Pledge Agreement dated December 23, 1998
    between Registrant, as Pledgor, and NationsBanc Montgomery
    Securities LLC, Lehman Brothers, Inc., First Union Capital
    Markets, a division of Wheat First Securities, Inc. and TD
    Securities (USA) Inc., as Initial Purchasers, and United
    States Trust Company of New York, as Trustee. |  | (2)[4.3]   
|        | 4  | .4          |  | Credit Agreement among the Agents and Lenders
    named therein and Sygnet Wireless, Inc. (f/k/a Dobson/ Sygnet
    Operating Company), dated as of December 23, 1998.                                                                                                                                                                               |  | (2)[4.5]   
|        | 10 | .1.1        |  | Cellular One License Agreement effective
    December 23, 1998, between Cellular One Group and Sygnet
    Communications, Inc. f/k/a Erie Cellular Telephone Company, as
    amended December 23, 1998.                                                                                                                                              |  | (2)[10.3]  
|        | 10 | .1.2        |  | Cellular One License Agreement, effective as of
    December 23, 1998, between Cellular One Group and Sygnet
    Communications, Inc. (PA-1).                                                                                                                                                                                                        |  | (2)[10.3.2]
|        | 10 | .1.3        |  | Cellular One License Agreement, effective as of
    December 23, 1998, between Cellular One Group and Sygnet
    Communications, Inc. (PA-6).                                                                                                                                                                                                        |  | (2)[10.3.3]
|        | 10 | .1.4        |  | Cellular One License Agreement, effective as of
    January 30, 1997, between Cellular One Group and Sygnet
    Communications, Inc. (PA-7).                                                                                                                                                                                                         |  | (2)[10.3.4]
|        | 10 | .1.5        |  | Cellular One License Agreement, effective as of
    January 1, 1997, between Cellular One Group and Sygnet
    Communications, Inc. (NY-3).                                                                                                                                                                                                          |  | (2)[10.3.5]

16



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##### Table of Contents



|        |    |             |  |                                                                                                                                                     |  |            
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|Exhibit |    |             |  | Method of                                                                                                                                          
|Numbers |    | Description |  | Filing                                                                                                                                             
|        |    |             |  |                                                                                                                                                    
|        | 10 | .1.6        |  | Cellular One License Agreement, effective as of
    June 14, 1999, between Cellular One Group and Sygnet
    Communications, Inc. (Sharon MSA).     |  | (3)[10.1.6]
|        | 10 | .1.7        |  | Cellular One License Agreement, effective as of
    June 14, 1999, between Cellular One Group and Sygnet
    Communications, Inc. (Youngstown MSA). |  | (3)[10.1.7]



---



|    |                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to the Current Report on
    Form 8-K of Dobson Communications Corporation (333-23769)
    filed on January 7, 1999, as the exhibit number indicated
    in brackets and incorporated by reference herein.   
|   
|(2) | Filed as an exhibit to Dobson/ Sygnet
    Communications Companys Registration Statement on
    Form S-4 (Registration No. 333-71051), as the exhibit
    number indicated in brackets and incorporated by reference
    herein.
|   
|(3) | Filed as an exhibit to the Registrants
    Annual Report on Form 10-K for the year ended
    December 31, 2001, as the exhibit number indicated in
    brackets and incorporated by reference herein.                           

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SIGNATURES

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

|                      |  |                                                                                                                         
|--------------------- |  | ------------------------------------------------------------------------------------------------------------------------
|                      |  | DOBSON/SYGNET COMMUNICATIONS COMPANY                                                                                    
|                     
|Date: August 13, 2002 |  | /s/ EVERETT R. DOBSONEverett R. DobsonChairman of the Board and
    Chief Executive Officer                             
|                     
|Date: August 13, 2002 |  | /s/ BRUCE R. KNOOIHUIZENBruce R. KnooihuizenVice President and Chief Financial Officer
    (principal financial officer)

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##### Table of Contents



INDEX TO EXHIBITS

|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                      |  |            
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|Exhibit |    |             |  | Method of                                                                                                                                                                                                                                                                                                                                           
|Numbers |    | Description |  | Filing                                                                                                                                                                                                                                                                                                                                              
|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                     
|        | 3  | .1          |  | Registrants Amended Certificate of
    Incorporation.                                                                                                                                                                                                                                                                                               |  | (2)[3.1]   
|        | 3  | .2          |  | Registrants Amended Bylaws.                                                                                                                                                                                                                                                                                                                         |  | (2)[3.2]   
|        | 4  | .1          |  | Indenture dated December 23, 1998 between
    Registrant, as Issuer, and United States Trust Company of New
    York, as Trustee.                                                                                                                                                                                                                    |  | (1)[4.1]   
|        | 4  | .2          |  | Form of Note under Indenture (contained in
    Exhibit 4.1 hereto).                                                                                                                                                                                                                                                                                  |  | (1)[4.1]   
|        | 4  | .3          |  | Pledge Agreement dated December 23, 1998
    between Registrant, as Pledgor, and NationsBanc Montgomery
    Securities LLC, Lehman Brothers, Inc., First Union Capital
    Markets, a division of Wheat First Securities, Inc. and TD
    Securities (USA) Inc., as Initial Purchasers, and United
    States Trust Company of New York, as Trustee. |  | (2)[4.3]   
|        | 4  | .4          |  | Credit Agreement among the Agents and Lenders
    named therein and Sygnet Wireless, Inc. (f/k/a Dobson/ Sygnet
    Operating Company), dated as of December 23, 1998.                                                                                                                                                                               |  | (2)[4.5]   
|        | 10 | .1.1        |  | Cellular One License Agreement effective
    December 23, 1998, between Cellular One Group and Sygnet
    Communications, Inc. f/k/a Erie Cellular Telephone Company, as
    amended December 23, 1998.                                                                                                                                              |  | (2)[10.3]  
|        | 10 | .1.2        |  | Cellular One License Agreement, effective as of
    December 23, 1998, between Cellular One Group and Sygnet
    Communications, Inc. (PA-1).                                                                                                                                                                                                        |  | (2)[10.3.2]
|        | 10 | .1.3        |  | Cellular One License Agreement, effective as of
    December 23, 1998, between Cellular One Group and Sygnet
    Communications, Inc. (PA-6).                                                                                                                                                                                                        |  | (2)[10.3.3]
|        | 10 | .1.4        |  | Cellular One License Agreement, effective as of
    January 30, 1997, between Cellular One Group and Sygnet
    Communications, Inc. (PA-7).                                                                                                                                                                                                         |  | (2)[10.3.4]
|        | 10 | .1.5        |  | Cellular One License Agreement, effective as of
    January 1, 1997, between Cellular One Group and Sygnet
    Communications, Inc. (NY-3).                                                                                                                                                                                                          |  | (2)[10.3.5]
|        | 10 | .1.6        |  | Cellular One License Agreement, effective as of
    June 14, 1999, between Cellular One Group and Sygnet
    Communications, Inc. (Sharon MSA).                                                                                                                                                                                                      |  | (3)[10.1.6]
|        | 10 | .1.7        |  | Cellular One License Agreement, effective as of
    June 14, 1999, between Cellular One Group and Sygnet
    Communications, Inc. (Youngstown MSA).                                                                                                                                                                                                  |  | (3)[10.1.7]



---



|    |                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to the Current Report on
    Form 8-K of Dobson Communications Corporation (333-23769)
    filed on January 7, 1999, as the exhibit number indicated
    in brackets and incorporated by reference herein.   
|   
|(2) | Filed as an exhibit to Dobson/ Sygnet
    Communications Companys Registration Statement on
    Form S-4 (Registration No. 333-71051), as the exhibit
    number indicated in brackets and incorporated by reference
    herein.
|   
|(3) | Filed as an exhibit to the Registrants
    Annual Report on Form 10-K for the year ended
    December 31, 2001, as the exhibit number indicated in
    brackets and incorporated by reference herein.