##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

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 March 31,
    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(Address of principal executive
    offices) |  | (Zip Code)                          

(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 þ          No o

As of May 10, 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



|                              |                                                                                               |                                                      |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                              | 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                                                     



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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
    March 31, 2002 and December 31, 2001                   |  |  | 2  | 
|                              |   |  |  | Condensed Consolidated Statements of Operations
    for the Three Months Ended March 31, 2002 and 2001 |  |  | 3  | 
|                              |   |  |  | Condensed Consolidated Statements of Cash Flows
    for the Three Months Ended March 31, 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                                          |  |  | 13 | 
|PART II. OTHER INFORMATION   
|                              | 1 |  |  | Legal Proceedings                                                                                      |  |  | 14 | 
|                              | 2 |  |  | Changes in Securities and Use of Proceeds                                                              |  |  | 14 | 
|                              | 3 |  |  | Defaults Upon Senior Securities                                                                        |  |  | 14 | 
|                              | 4 |  |  | Submission of Matters to a Vote of Security
    Holders                                                |  |  | 14 | 
|                              | 5 |  |  | Other Information                                                                                      |  |  | 14 | 
|                              | 6 |  |  | Exhibits and Reports on Form 8-K                                                                       |  |  | 14 | 

1



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##### Table of Contents






PART I. FINANCIAL INFORMATION

Item 1.     Financial
Statements

DOBSON/ SYGNET COMMUNICATIONS
COMPANY




CONDENSED CONSOLIDATED BALANCE
SHEETS

|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |              |             |             | 
|-------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------------------------------------- | ------------ | ----------- | ----------- | ---------- | ------------ | ----------- | ----------- | 
|                                                   |                                                                                                    | March 31,                            |                                                          | December 31,
|                                                   |                                                                                                    | 2002                                 |                                                          | 2001        
|                                                   |                                                                                                    |                                      |                                                          |             
|                                                   |                                                                                                    |                                     
|                                                   |                                                                                                    | (Unaudited)                         
|ASSETS                                            
|CURRENT ASSETS:                                    |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Cash and cash equivalents                                                                          |                                      | $                                                        | 4,509,353    |             |             | $          | 4,286,325    |            
|                                                   | Accounts receivable                                                                               |                                      |                                                          |              |             |             |            |              |            
|                                                   |                                                                                                    | Customers, net                       |                                                          |              | 16,965,305  |             |            |              | 19,326,750  |            
|                                                   |                                                                                                    | Affiliates                           |                                                          |              | 1,338,655   |             |            |              |            |            
|                                                   | Inventory                                                                                          |                                      |                                                          | 4,368,608    |             |             |            | 4,873,736    |            
|                                                   | Prepaid expenses and other                                                                         |                                      |                                                          | 1,232,808    |             |             |            | 1,151,506    |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total current assets                 |                                                          |              | 28,414,729  |             |            |              | 29,638,317  |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|PROPERTY, PLANT AND EQUIPMENT, net                 |                                                                                                    |                                      | 74,916,164                                               |              |             |             | 75,529,567 |             
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|OTHER ASSETS:                                      |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Wireless license acquisition costs, net                                                            |                                      |                                                          | 350,688,085  |             |             |            | 572,988,085  |            
|                                                   | Deferred financing costs, net                                                                      |                                      |                                                          | 34,156,297   |             |             |            | 35,441,469   |            
|                                                   | Customer list, net                                                                                 |                                      |                                                          | 15,479,687   |             |             |            | 17,676,488   |            
|                                                   | Other                                                                                              |                                      |                                                          | 78,631       |             |             |            | 84,189       |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total other assets                   |                                                          |              | 400,402,700 |             |            |              | 626,190,231 |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    |                                      | Total assets                                             |              | $           | 503,733,593 |            |              | $           | 731,358,115 | 
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|LIABILITIES AND STOCKHOLDERS
    (DEFICIT) EQUITY
|                                                  
|CURRENT LIABILITIES:                               |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Accounts payable                                                                                   |                                      | $                                                        | 8,802,209    |             |             | $          | 10,240,868   |            
|                                                   | Accrued expenses                                                                                   |                                      |                                                          | 12,019,209   |             |             |            | 6,232,911    |            
|                                                   | Deferred revenue and customer deposits                                                             |                                      |                                                          | 4,973,959    |             |             |            | 4,842,107    |            
|                                                   | Current portion of long-term debt                                                                  |                                      |                                                          | 17,750,000   |             |             |            | 14,250,000   |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total current liabilities            |                                                          |              | 43,545,377  |             |            |              | 35,565,886  |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|OTHER LIABILITIES:                                 |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   | Payables  affiliates                                                                              |                                      |                                                          |             |             |             |            | 1,400,227    |            
|                                                   | Long-term debt, net of current portion                                                             |                                      |                                                          | 474,324,254  |             |             |            | 485,886,754  |            
|                                                   | Deferred income taxes                                                                              |                                      |                                                          | 15,504,493   |             |             |            | 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                                                                                   |                                      |                                                          | (269,273,435 | )           |             |            | (131,356,459 | )          
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    | Total stockholders (deficit) equity |                                                          |              | (29,640,531 | )           |            |              | 108,276,445 |            
|                                                   |                                                                                                    |                                      |                                                          |              |             |             |            |             
|                                                   |                                                                                                    |                                      | Total liabilities and stockholders
    (deficit) equity |              | $           | 503,733,593 |            |              | $           | 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 March 31,
|                                                                      |                                                                                                            |                             
|                                                                      |                                                                                                            | 2002                         |              | 2001        
|                                                                      |                                                                                                            |                              |              |             
|                                                                      |                                                                                                            |                             
|                                                                      |                                                                                                            | (Unaudited)                 
|OPERATING REVENUE:                                                    |                                                                                                            |                              |              |              |            |   |             |            
|                                                                      | Service revenue                                                                                            |                              | $            | 34,076,096   |            |   | $           | 30,955,977  |           
|                                                                      | Roaming revenue                                                                                            |                              |              | 10,318,837   |            |   |             | 9,796,975   |           
|                                                                      | Equipment and other revenue                                                                                |                              |              | 1,369,647    |            |   |             | 1,958,045   |           
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|                                                                      |                                                                                                            | Total operating revenue      |              |              | 45,764,580 |   |             |             | 42,710,997 | 
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|OPERATING EXPENSES:                                                   |                                                                                                            |                              |              |              |            |   |             |            
|                                                                      | Cost of service                                                                                            |                              |              | 10,952,595   |            |   |             | 9,572,239   |           
|                                                                      | Cost of equipment                                                                                          |                              |              | 4,427,602    |            |   |             | 5,945,692   |           
|                                                                      | Marketing and selling                                                                                      |                              |              | 6,035,007    |            |   |             | 6,314,190   |           
|                                                                      | General and administrative                                                                                 |                              |              | 6,510,247    |            |   |             | 7,064,635   |           
|                                                                      | Depreciation and amortization                                                                              |                              |              | 6,739,758    |            |   |             | 18,518,595  |           
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|                                                                      |                                                                                                            | Total operating expenses     |              |              | 34,665,209 |   |             |             | 47,415,351 | 
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|OPERATING INCOME (LOSS)                                               |                                                                                                            |                              | 11,099,371   |              |            |   | (4,704,354  | )          
|                                                                      | Interest expense                                                                                           |                              |              | (11,246,460  | )          |   |             | (15,254,746 | )         
|                                                                      | Other income, net                                                                                          |                              |              | 353          |            |   |             | 399,766     |           
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|LOSS BEFORE INCOME TAXES                                              |                                                                                                            |                              | (146,736     | )            |            |   | (19,559,334 | )          
|                                                                      | Income tax benefit                                                                                         |                              |              | 55,760       |            |   |             | 7,432,547   |           
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE   |                                                                                                            |                              | (90,976      | )            |            |   | (12,126,787 | )          
|                                                                      | Cumulative effect of change in accounting
    principle, net of income tax benefit of $84,474,000 (Note 4) |                              |              | (137,826,000 | )          |   |             |            |           
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|NET LOSS                                                              |                                                                                                            | $                            | (137,916,976 | )            |            | $ | (12,126,787 | )          
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDER
    PER COMMON SHARE: |                                                                                                            |                              |              |              |            |   |             |            
|                                                                      | Continuing operations                                                                                      |                              | $            | (910         | )          |   | $           | (121,268    | )         
|                                                                      | Cumulative effect of change in accounting
    principle                                                    |                              |              | (1,378,260   | )          |   |             |            |           
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDER
    PER COMMON SHARE  |                                                                                                            | $                            | (1,379,170   | )            |            | $ | (121,268    | )          
|                                                                      |                                                                                                            |                              |              |              |            |   |             |            
|BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                      |                                                                                                            |                              | 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


|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |             |            |           |             |  
|-------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------ | ------------------------------------------------------- | ---------- | --------- | ---------- | ----------- | ---------- | --------- | ----------- | -
|                                                         |                                                                                                                                                 |                                       
|                                                         |                                                                                                                                                 | Three Months Ended March 31,          
|                                                         |                                                                                                                                                 |                                       
|                                                         |                                                                                                                                                 | 2002                                   |                                      | 2001                                                   
|                                                         |                                                                                                                                                 |                                        |                                      |                                                        
|                                                         |                                                                                                                                                 |                                       
|                                                         |                                                                                                                                                 | (Unaudited)                           
|CASH FLOWS FROM OPERATING ACTIVITIES:                    |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|                                                         | Loss before cumulative effect of change in
    accounting principle                                                                             |                                        | $                                    | (90,976                                                 | )          |           | $          | (12,126,787 | )         
|                                                         | Adjustments to reconcile loss before cumulative
    effect of change in accounting principle to net cash provided by
    operating activities  |                                        |                                      |                                                         |            |           |            |             |           
|                                                         |                                                                                                                                                 | Depreciation and amortization          |                                      |                                                         | 6,739,758  |           |            |             | 18,518,595 |          
|                                                         |                                                                                                                                                 | Amortization of financing costs        |                                      |                                                         | 1,311,344  |           |            |             | 1,308,431  |          
|                                                         |                                                                                                                                                 | Deferred income taxes                  |                                      |                                                         | (250,310   | )         |            |             | (7,557,047 | )        
|                                                         |                                                                                                                                                 | Loss on disposition of assets, net     |                                      |                                                         | 9,291      |           |            |             |           |          
|                                                         | Changes in current assets and
    liabilities                                                                                                  |                                        |                                      |                                                         |            |           |            |             |           
|                                                         |                                                                                                                                                 | Accounts receivable                    |                                      |                                                         | 2,361,445  |           |            |             | 1,500,920  |          
|                                                         |                                                                                                                                                 | Other current assets                   |                                      |                                                         | 423,826    |           |            |             | 17,745     |          
|                                                         |                                                                                                                                                 | Accounts payable                       |                                      |                                                         | (1,438,659 | )         |            |             | (2,397,887 | )        
|                                                         |                                                                                                                                                 | Accrued expenses                       |                                      |                                                         | 5,786,298  |           |            |             | 6,647,772  |          
|                                                         |                                                                                                                                                 | Deferred revenue and customer deposits |                                      |                                                         | 131,852    |           |            |             | 199,963    |          
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|                                                         |                                                                                                                                                 |                                        |                                      | Net cash provided by operating activities               |            |           | 14,983,869 |             |            |           | 6,111,705   |  
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                    |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|                                                         | Capital expenditures                                                                                                                            |                                        |                                      | (3,938,846                                              | )          |           |            | (7,218,389  | )         
|                                                         | Increase in receivable  affiliates                                                                                                             |                                        |                                      | (1,338,655                                              | )          |           |            |            |           
|                                                         | Decrease in payable  affiliates                                                                                                                |                                        |                                      | (1,400,227                                              | )          |           |            | (13,807,584 | )         
|                                                         | Other investing activities                                                                                                                      |                                        |                                      | 5,559                                                   |            |           |            | 85,686      |           
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|                                                         |                                                                                                                                                 |                                        |                                      | Net cash used in investing activities                   |            |           | (6,672,169 | )           |            |           | (20,940,287 | )
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|CASH FLOWS FROM FINANCING ACTIVITIES:                    |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|                                                         | Repayments of long-term debt                                                                                                                    |                                        |                                      | (8,062,500                                              | )          |           |            | (44,062,500 | )         
|                                                         | Proceeds from long-term debt                                                                                                                    |                                        |                                      |                                                        |            |           |            | 37,000,000  |           
|                                                         | Proceeds from capital contributions                                                                                                             |                                        |                                      |                                                        |            |           |            | 15,000,000  |           
|                                                         | Other financing activities                                                                                                                      |                                        |                                      | (26,172                                                 | )          |           |            | (29,445     | )         
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|                                                         |                                                                                                                                                 |                                        |                                      | Net cash (used in) provided by financing
    activities |            |           | (8,088,672 | )           |            |           | 7,908,055   |  
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS |                                                                                                                                                 |                                        | 223,028                              |                                                         |            |           | (6,920,527 | )          
|CASH AND CASH EQUIVALENTS, beginning of period           |                                                                                                                                                 |                                        | 4,286,325                            |                                                         |            |           | 8,871,817  |            
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|CASH AND CASH EQUIVALENTS, end of period                 |                                                                                                                                                 | $                                      | 4,509,353                            |                                                         |            | $         | 1,951,290  |            
|                                                         |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:       |                                                                                                                                                 |                                        |                                      |                                                         |            |           |            |            
|                                                         | Cash paid for                                                                                                                                  |                                        |                                      |                                                         |            |           |            |             |           
|                                                         |                                                                                                                                                 |                                        | Interest, net of amounts capitalized |                                                         | $          | 3,697,118 |            |             | $          | 7,642,545 |            

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

4



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##### Table of Contents



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 March 31, 2002 and December 31, 2001, the
condensed consolidated statements of operations for the three
months ended March 31, 2002 and 2001 and the condensed
consolidated statements of cash flows for the three months ended
March 31, 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.

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.

2.     Long-Term
Debt

The Company, through its wholly-owned subsidiary,
Sygnet Wireless, Inc., has credit facilities for an aggregate of
$332.4 million, consisting of a $40.4 million
revolving credit facility and $292.0 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 March 31, 2002, the Company had $292.1 million
outstanding under its credit facility and it had
$35.6 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 March 31, 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 March 31, 2002, the Company had
outstanding $200.0 principal amount of senior notes that bear
interest at an annual rate of 12.25% and mature in 2008. The
Company used approximately $67.7 million of the net
proceeds from the sale of its senior notes to purchase
securities pledged to secure the first six semi-annual interest
payments, which began June 15, 1999 and ended with the
payment the Company made on December 15, 2001.

The principal stockholder of Dobson
Communications, Dobson CC Limited Partnership, or DCCLP, and
certain of its affiliates have entered into credit agreements
with Bank of America, N.A. These credit agreements have
aggregate principal amounts outstanding of approximately
$280 million as of March 31, 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

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DOBSON/ SYGNET COMMUNICATIONS
COMPANY


NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(unaudited)


lender elects to 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 three months ended March 31,
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 issued Statements of Financial Accounting Standards
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. Under the
new rules, the Company is treating 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 months ended
March 31, 2001, the Company recorded approximately
$7.4 million of amortization expense, net of income tax
benefit, related to its wireless license acquisition costs.
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.

5.     Subsequent
Events

On May 8, 2002, the Company extended its
nationwide preferred roaming agreement with
AT&T Wireless, which covers all of the operations of
Dobson Communications Corporation, including Sygnet
Communications, Inc. AT&T Wireless is the
Companys largest roaming partner. This new agreement
covers TDMA and extends the preferred agreement and establishes
the roaming rates for the parties through June 30, 2007.

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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 March 31, 2002, our systems covered a total population
of approximately 2.4 million and we had 294,600
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 $0.25 per minute for the three months ended
March 31, 2002 and $0.33 per minute for the three
months ended March 31, 2001. These declines have been
generally offset by increases in average minutes of use per
subscriber. 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 accounted for 22.5% of our operating
revenue for the three months ended March 31, 2002 and 22.9%
for the three months ended March 31, 2001. Roaming revenues
have typically had higher average per minute rates and continue
to have 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 produce 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 for the three months ended March 31, 2002 and $0.34
for the three months ended March 31, 2001. We believe that
the trend of increasing roaming minutes will continue to offset
declining roaming yields. 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.

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

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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 us and Dobson Communications, 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 Statements of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets,
which requires companies to cease the amortization of existing
goodwill and intangible assets with indefinite lives, we are
treating 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
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 months ended March 31,
2001, the aggregate amount of amortization expense, net of
income tax benefit, attributable to our wireless license
acquisition costs was approximately $7.4 million. 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.

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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 March 31, 2002 Compared to Three Months ended
March 31, 2001

Operating revenues.For the three months ended
March 31, 2002, our total operating revenue increased
$3.1 million, or 7.1%, to $45.8 million from
$42.7 million for the comparable period in 2001. Our total
service revenue, roaming revenue and equipment and other revenue
represented 74.5%, 22.5% and 3.0%, respectively, of our total
operating revenue during the three months ended March 31,
2002 and 72.5%, 22.9% and 4.6%, respectively, of our total
operating revenue during the three months ended March 31,
2001.

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

|                   |                             |                    |   |        |        |  |   |        |        | 
|------------------ | --------------------------- | ------------------ | - | ------ | ------ |  | - | ------ | ------ | 
|                   |                             |                   
|                   |                             | Three Months Ended
|                   |                             | March 31,         
|                   |                             |                   
|                   |                             | 2002               |   | 2001  
|                   |                             |                    |   |       
|                   |                             |                   
|                   |                             | ($ in thousands)  
|Operating revenue: |                             |                    |   |        |        |  |   |       
|                   | Service revenue             |                    | $ | 34,076 |        |  | $ | 30,956 |       
|                   | Roaming revenue             |                    |   | 10,319 |        |  |   | 9,797  |       
|                   | Equipment and other revenue |                    |   | 1,370  |        |  |   | 1,958  |       
|                   |                             |                    |   |        |        |  |   |       
|                   |                             | Total              |   | $      | 45,765 |  |   | $      | 42,711 | 
|                   |                             |                    |   |        |        |  |   |       

For the three months ended March 31, 2002,
our service revenue increased $3.1 million, or 10.1%, to
$34.1 million from $31.0 million for the three months
ended March 31, 2001. This increase was attributable to
increased penetration and usage. Our subscriber base increased
11.8% to 294,600 at March 31, 2002 from 263,400 at
March 31, 2001. Our average monthly service revenue per
subscriber decreased 2.5% to $39 for the three months ended
March 31, 2002 compared to $40 for the three months ended
March 31, 2001, due to increased competition and market
pressure.

For the three months ended March 31, 2002,
our roaming revenue increased $0.5 million, or 5.3%, to
$10.3 million from $9.8 million for the three months
ended March 31, 2001. This increase was primarily
attributable to a 42.5% increase in roaming minutes in our
markets due to expanded coverage areas and increased usage,
offset by a 26.5% decline in our roaming revenue per
minute-of-use.

For the three months ended March 31, 2002,
our equipment and other revenue decreased $0.6 million, or
30.1%, to $1.4 million from $2.0 million for the three
months ended March 31, 2001. This decrease resulted from a
slow down in the migration of subscribers from analog to digital
service and handsets, along with the overall decrease in the
cost of wireless handsets.

Cost of service.For
the three months ended March 31, 2002, our total cost of
service increased $1.4 million, or 14.4%, to
$11.0 million from $9.6 million for the comparable
period in 2001. This increase is primarily the result of the
increased number of subscribers and the migration of our
subscribers from analog rate plans to new digital rate plans. On
March 31, 2002, 83.4% of our subscribers were on digital
rate plans compared to 56.4% at March 31, 2001. 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.

Cost of equipment.For the three months ended
March 31, 2002, our cost of equipment decreased
$1.5 million, or 25.5%, to $4.4 million from
$5.9 million for the three months ended March 31,
2001, primarily as a result of decreases in the cost of wireless
equipment due to new technology.

Marketing and selling costs.For the three months ended
March 31, 2002, our marketing and selling costs decreased
slightly to $6.0 million from $6.3 million for the
three months ended March 31, 2001. In addition, as a
percentage of total operating revenue, marketing and selling
costs decreased to 13.2% for the

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three months ended March 31, 2002 from 14.8%
for the three months ended March 31, 2001, as a result of
efficiencies gained from centralized marketing functions with
our parent, Dobson Communications. With these efficiencies
gained, we were able to decrease overall marketing and selling
costs while slightly increasing our gross subscriber additions.
Gross subscriber additions totaled 22,400 for the three months
ended March 31, 2002 compared to gross subscriber additions
of 22,300 for the three months ended March 31, 2001.


General and administrative costs.For the three months ended
March 31, 2002, our general and administrative costs
decreased $0.6 million, or 7.8%, to $6.5 million from
$7.1 million for the three months ended March 31,
2001. This decrease was the result of efficiencies gained from
centralized administrative functions with our parent, Dobson
Communications. Our overall monthly general and administrative
costs per average subscriber decreased to $7 for the three
months ended March 31, 2002 compared to $9 for the three
months ended March 31, 2001.

Depreciation and amortization expense.For the three months ended
March 31, 2002, our depreciation and amortization expense
decreased $11.8 million, or 63.6%, to $6.7 million
from $18.5 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 licenses as
indefinite life intangibles.

Interest expense.For the three months ended
March 31, 2002, our interest expense decreased
$4.1 million, or 26.3%, to $11.2 million from
$15.3 million for the three months ended March 31,
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 three months ended
March 31, 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
three months ended March 31, 2002, our net loss was
$137.9 million. This 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 March 31, 2002, we had a working capital
deficit of $15.1 million (a ratio of current assets to
current liabilities of 0.7:1) and an unrestricted cash balance
of $4.5 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 $15.0 million for the three months ended
March 31, 2002 compared to $6.1 million for the three
months ended March 31, 2001. The increase is primarily due
to the decrease in our loss before cumulative effect of change
in accounting principle.

Our net cash used in investing activities totaled
$6.7 million for the three months ended March 31, 2002
compared to $20.9 million for the three months ended
March 31, 2001. The decrease of $14.2 million related
primarily to a decrease in capital expenditures and the decrease
in payable-affiliates. Capital expenditures for the three months
ended March 31, 2002 were $3.9 million compared to
$7.2 million for the three months ended March 31, 2001.

Net cash used in financing activities was
$8.1 million for the three months ended March 31, 2002
compared to net cash provided by financing activities of
$7.9 million for the three months ended March 31,
2001. Financing activity uses for the three months ended
March 31, 2002 consisted primarily of repayments of
long-term debt. Financing activity sources for the three months
ended March 31, 2001, consisted primarily of

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proceeds from long-term debt of
$37.0 million and a capital contribution from our parent
company, Dobson Communications, of $15.0 million, which was
offset by repayments of long-term debt totaling
$44.1 million.


Our capital expenditures were $3.9 million
for the three months ended March 31, 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
$332.4 million, consisting of a $40.4 million
revolving credit facility and $292.0 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 March 31, 2002, we had $292.1 million
outstanding under our credit facility and we had
$35.6 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 March 31, 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 March 31, 2002, we had outstanding
$200.0 principal amount of senior notes that bear interest at an
annual rate of 12.25% and mature in 2008. We used approximately
$67.7 million of the net proceeds from the sale of our
senior notes to purchase securities pledged to secure the first
six semi-annual interest payments, which began June 15,
1999 and ended with the payment we made on December 15,
2001.

The principal stockholder of Dobson
Communications, Dobson CC Limited Partnership, or DCCLP, and
certain of its affiliates have entered into credit agreements
with Bank of America, N.A. These credit agreements have
aggregate principal amounts outstanding of approximately
$280 million as of March 31, 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, assuming successful implementation of our
strategy, including the further development of our wireless
systems and significant and sustained growth in our cash flow,
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.

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Effect of New Accounting Standards

In July 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards
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 stop amortizing existing goodwill and intangible assets with
indefinite lives effective January 1, 2002. Under the new
rules, we are treating 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
would only adjust the carrying amount of these intangible assets
upon an impairment of the indefinite life intangible assets.
During the three months ended March 31, 2001, we recorded
approximately $7.4 million of amortization expense, net of
income tax benefit, related to our wireless license acquisition
costs. 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.

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 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

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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.

The fair market value of long-term fixed interest
rate debt is subject to interest rate risk. Generally, the fair
market value of fixed interest rate debt will increase as
interest rates fall and decrease as interest rates raise. Since
we are not currently involved with any derivative or other
financial instrument, we have determined that there is no
material market risk exposure to our condensed consolidated
financial position, results of operations or cash flows.

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PART II. OTHER INFORMATION




Item 1.     Legal
Proceedings

Our wholly-owned subsidiary, Sygnet
Communications Inc. is currently involved in a pending legal
proceeding with the Commonwealth of Pennsylvania. This lawsuit
was brought by the Attorney General of Pennsylvania
(AG) against Sygnet Communications, and alleges that Sygnet
Communications violated the Pennsylvania Unfair Trade Practices
Act. We deny any wrongdoing and intend to vigorously defend the
claim. Total damages sought are estimated at $5.0 million.




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] | 

14



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##### Table of Contents



|        |    |             |  |                                                                                                                                                     |  |  |             | 
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | 
|Exhibit |    |             |  | Method of                                                                                                                                          
|Numbers |    | Description |  | Filing                                                                                                                                             
|        |    |             |  |                                                                                                                                                    
|        | 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.                           

15



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##### Table of Contents



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: May 14, 2002 |  | /s/ EVERETT R. DOBSON
    ------------------------------------------------
    Everett R. DobsonChairman of the Board and
    Chief Executive Officer                             
|                  
|Date: May 14, 2002 |  | /s/ BRUCE R. KNOOIHUIZEN
    ------------------------------------------------
    Bruce R. KnooihuizenVice President and Chief Financial Officer
    (principal financial officer)

16