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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
 
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
  /X/    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
 
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
 
  / /    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. 333-23769
 
                     LOGIX COMMUNICATIONS ENTERPRISES, INC.
 
             (Exact name of registrant as specified in its charter)
 
                  OKLAHOMA                             73-1533356
      (State or other jurisdiction of               (I.R.S. Employer
       incorporation or organization)              Identification No.)
 
                3555 NW 58TH
                TENTH FLOOR
          OKLAHOMA CITY, OKLAHOMA                         73112
  (Address of principal executive offices)             (Zip Code)
 
                                 (405) 516-8400
              (Registrant's telephone number, including area code)
 
            Securities registered pursuant to 12(b) of the Act: NONE
 
            Securities registered pursuant to 12(g) of the Act: NONE
 
    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 /X/  No / /
 
    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
 
    As of March 15, 1999, there were 71,250,000 shares of the registrant's $.01
par value Class A Common Stock outstanding. The Common Stock is privately held
by one holder.
 
    Documents incorporated by reference: NONE
 
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<PAGE>
                     LOGIX COMMUNICATIONS ENTERPRISES, INC.
 
                           ANNUAL REPORT ON FORM 10-K
 
                      FOR THE YEAR ENDED DECEMBER 31, 1998
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
ITEM NUMBER                                                                                                        PAGE
-----------                                                                                                        -----
<S>          <C>                                                                                                <C>
                                                          PART I
 
         1   Business.........................................................................................           3
         2   Properties.......................................................................................          23
         3   Legal Proceedings................................................................................          23
         4   Submission of Matters to a Vote of Security Holders..............................................          23
 
                                                          PART II
 
         5   Market for Registrant's Common Equity and Related Stockholder Matters............................          23
         6   Selected Financial Data..........................................................................          24
         7   Management's Discussion and Analysis of Financial Condition and Results of Operations............          26
        7A   Quantitative and Qualitative Disclosure About Market Risk........................................          35
         8   Financial Statements and Supplementary Data......................................................          36
         9   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............          57
 
                                                         PART III
 
        10   Directors and Executive Officers of the Registrant...............................................          57
        11   Executive Compensation...........................................................................          61
        12   Security Ownership of Certain Beneficial Owners and Management...................................          64
        13   Certain Relationships and Related Transactions...................................................          64
 
                                                          PART IV
 
        14   Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................          66
</TABLE>
 
                                       2
<PAGE>
                                     PART I
 
ITEM 1. BUSINESS
 
                                    GENERAL
 
    Logix Communications Enterprises, Inc., together with its subsidiaries
("Logix" or the "Company") is a leading provider of integrated local, long
distance, data and other telecommunications services to small and medium-sized
business customers throughout the Southwest United States. Since 1936, the
Company, through its predecessor and subsidiaries, has provided incumbent local
exchange carrier ("ILEC") services in Oklahoma. In addition, Logix operates
long-haul fiber optic facilities in Oklahoma, Texas and Colorado, providing
wholesale long-haul services. Logix currently offers switch-based services as an
integrated communications provider ("ICP") in Oklahoma City, Tulsa, Houston,
Dallas, Ft. Worth, San Antonio and Austin. With approximately 200 direct sales
professionals, Logix has one of the largest direct sales forces of
communications services in the Texas and Oklahoma region.
 
SERVICES STRATEGY
 
    The Company's objective is to be the dominant alternative provider of
integrated local, long distance and data services packaged with customer premise
equipment offerings to small and medium-sized business customers in the
Southwest. The Company has developed customer focused strategies to build market
share in existing and new markets while utilizing innovative and efficient
network deployment techniques to maximize customer satisfaction and financial
returns. The principal elements of the Company's services strategy include:
 
    DELIVERING INNOVATIVE TELECOMMUNICATIONS SOLUTIONS FOR BUSINESS
CUSTOMERS.  The Company believes that there is substantial demand from small and
medium-sized businesses for bundled telecommunications services provided on a
single monthly bill and with a single point of contact for all sales and
service. The Company offers under its LOGIX-TM- brand name local, long distance,
enhanced data, Internet, and systems integration services to customers with
convenient integrated billing through its "DIRECT T-SM-" bundled service
offering. The Company believes that its DIRECT T-SM- products allow the Company
to improve customer retention, increase sales force productivity and rapidly
increase penetration in its target markets. The Company's sales professionals
are trained to provide customers with sales and customer service relating to all
of the Company's DIRECT T-SM- products. Once a customer contracts with LOGIX-TM-
for services, the Company assigns a single account relations manager who has the
responsibility of proactively contacting the customer to confirm satisfaction
with existing products and to promote new services and programs.
 
    FOCUSING ON THE SOUTHWEST.  In order to leverage its extensive
telecommunications networks and long-standing customer and business
relationships in the region, the Company continues to focus on the Southwest,
initially targeting Oklahoma and Texas. The Company believes that this regional
focus will enable it to take advantage of economies of scale in management,
network operations, sales and marketing. This regional concentration of the
Company's network is also expected to result in improved profit margins based on
management's belief that a significant percentage of the Company's customers'
telecommunications traffic will originate and terminate within the region.
 
    In order to accelerate the expansion of its ICP business in Texas, the
Company acquired Houston-based American Telco, Inc. and American Telco Network
Services, Inc. (collectively, "American Telco") on June 15, 1998, for $131.5
million ("American Telco Acquisition"). As of the closing of the acquisition,
American Telco provided long distance and local telecommunications services to
approximately 22,400 customers in Houston, Dallas, Fort Worth, San Antonio, and
Austin, of which approximately 16,400 were business customers. On June 22, 1998,
the Company acquired certain long distance customers and related assets of Zenex
Long Distance, Inc. ("Zenex"), an Oklahoma City based reseller of long distance
and value added services, for approximately $4.7 million ("Zenex Acquisition").
In connection with the Zenex
 
                                       3
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Acquisition, the Company entered into a long term contract with WorldCom Network
Services, Inc. ("WorldCom") for the resale of long distance services. In June
1998, the Company entered into a carrier service agreement with a minimum
commitment totaling $18 million for a period of 36 months. Under this agreement,
the Company agreed to purchase on a take-or-pay basis, $.5 million of monthly
services, beginning in January 1999. Additionally, the Company must purchase at
least 80 percent of its monthly services as defined in the agreement from the
carrier until the earlier of the purchasing cumulative monthly services of $36
million or reaching the end of the agreement. On November 20, 1998, the Company
purchased substantially all of the assets of SysComm Design, Inc. ("SysComm")
for $4.1 million (the "SysComm Acquisition"). The SysComm Acquisition increased
the Company's customer base and direct sales force in Dallas, Corpus Christi and
Houston and expanded the Company's customer premise equipment product line
offerings. The Company expects to expand primarily through internal growth,
though it will consider acquisitions to extend either its product line,
geographic footprint or customer base.
 
    BUILDING MARKET SHARE THROUGH DIRECT SALES AND SUPERIOR CUSTOMER
SERVICE.  The Company believes that the key to revenue growth in its target
markets is to acquire customers through direct sales efforts and retain those
customers by offering a high level of customer service. The Company believes
that servicing the small and medium-sized business market using a consultative,
face-to-face sales and service strategy with a single point of contact is a
highly effective method of acquiring customers and developing long-term customer
relationships. The Company's branch offices provide comprehensive support to the
Company's customers. At year end, the Company had approximately 200 direct sales
professionals with branch offices located in Oklahoma City, Tulsa, Houston,
Dallas, Austin, Ft. Worth, San Antonio and Amarillo which will accelerate the
Company's direct sales strategy. The Company expects to expand its direct sales
force and open additional branch offices in the Southwest.
 
    INCREASING PRODUCTIVITY AND EFFICIENCY THROUGH CONTINUED ENHANCEMENT OF
OSS.  The Company believes that fully integrated and scalable operations support
systems ("OSS") will increase productivity and efficiency and provide a
competitive advantage. An integrated approach to OSS will allow the Company to
synchronize multiple tasks such as provisioning, order taking, customer service
and billing and provide management with timely operating and financial data to
allow it to efficiently direct network, sales and customer service resources.
The Company currently deploys tailored systems and procedures for its OSS and
other back office systems and customer service, and is currently replacing its
existing OSS with a fully integrated, scalable system which can be expanded as
the Company grows its customer base.
 
NETWORK STRATEGY
 
    The Company seeks to efficiently expand its network infrastructure to offer
facilities-based services in attractive markets while minimizing its up front
capital expenditures. The Company believes that its facilities-based services
will enable it to achieve higher gross network margins than could be obtained by
reselling such services, accelerate provisioning and to maintain better control
over the quality of the services provided to its customers. The principal
elements of the Company's network strategy include:
 
    MAXIMIZING OPERATING MARGINS WITH A TARGETED SERVICE AREA.  The Company
targets customers within a specified geographic zone surrounding its network
infrastructure, thereby controlling the cost of services. By focusing its sales
efforts on customers within these zones and bypassing the ILEC's switch and
directly connecting these customers to a LOGIX-TM- switch using unbundled loops
or high capacity circuits, the Company believes it can generate higher gross
margins than could be obtained by reselling ILEC services.
 
    EMPLOYING ADVANCED REMOTE SWITCHING TECHNOLOGY.  As it enters new markets,
the Company deploys an advanced network presence ("ANP") unit (i.e., a smaller
switch) that is linked via leased lines to the Company's core network. The ANP
unit enables the Company to provide digital local and long distance switched
services and asynchronous transfer mode ("ATM")-based data services to customers
in the market area at significantly lower initial capital costs than are
required for a full featured Class V (i.e. a larger) switch. As customer
telecommunications traffic warrants, the Company will install a full featured
 
                                       4
<PAGE>
Class V switch and redeploy the ANP to a new market area. By using ANP units and
full featured Class V switches, the Company believes it will have lower
operating costs than reselling. This strategy enables the Company to optimize
its capital expenditure, rapidly expand into new markets, and generate the
operating margins and quality of service provided by dedicated facilities.
 
    CONTROLLING SERVICE QUALITY.  The Company's strategy is to have direct
control of the quality of service and responsiveness to its customers by
utilizing the Company's own switches and by providing direct connections, which
eliminate the reliance on other switching providers, in contrast to reselling.
 
LEVERAGING EXISTING OPERATIONS AND PROVEN MANAGEMENT TEAM
 
    The Company believes that its ability to leverage its existing local
exchange and fiber operations and to draw upon its senior management's extensive
experience and expertise in facilities-based telecommunications services will
provide it with a competitive advantage. Everett R. Dobson, the Company's
Chairman of the Board and Chief Executive Officer, and Chairman, President and
Chief Executive Officer of Dobson Communications Corporation ("Dobson
Communications"), the Company's parent, has directed Dobson Communications'
rural cellular expansion. Stephen T. Dobson, President of Logix, has operated
Logix's ILEC business since 1990 and initiated the Company's expansion into ICP
services. William J. Hoffman, Jr., the Company's Chief Operating Officer, joined
Dobson Communications in October 1997 from Intermedia Communications, where he
was Division Vice President of its Florida markets.
 
MARKET OPPORTUNITIES
 
    Historically, businesses throughout the United States have purchased their
telecommunication services from different vendors: local services from Regional
Bell Operating Companies ("RBOCs"), long distance and wide area data services
from interexchange carriers ("IXCs"), internet services from internet service
providers, and wireless services from a wireless service providers. The use of
multiple vendors and the lack of availability of bundled services have resulted
in customers receiving multiple invoices for these services.
 
    The Company believes that small and medium-sized businesses desire a fully
integrated package of services, with one monthly invoice and a single point of
contact for all sales and service. The Company further believes that regulatory
changes introduced by the Telecommunications Act of 1996, (the
"Telecommunications Act"), advances in technology, and its experience and
expertise in providing facilities-based communications services place it in a
unique position to take advantage of the large telecommunications market in the
Southwest United States.
 
SERVICES
 
ILEC
 
    Since 1936, the Company has provided ILEC services and currently owns and
operates nine contiguous local exchanges in western Oklahoma and three
contiguous local exchanges adjacent to and east of the Oklahoma City
metropolitan area. At December 31, 1998 the Company's local telephone exchanges
served approximately 13,423 access lines. The Company provides local and long
distance telecommunications services with enhanced and value-added calling and
billing features.
 
    The Company's ILEC operations receive high cost support funds ("HCF") from
Oklahoma state jurisdictions and the federal universal service funds ("USF") due
to factors such as the geographic conditions and subscriber density in the areas
in which it provides service. Approximately 36.1%, 35.6% and 31.1% of the
Company's ILEC revenues for the years ended December 31, 1996, 1997, and 1998,
respectively, were from these two sources. The Company's other primary sources
of ILEC revenues consisted of end user and access revenues. End user revenues
consist of charges for local service and
 
                                       5
<PAGE>
enhanced services such as call waiting and call forwarding. Access revenue
represents amounts charged to IXCs for providing access from the IXC's point of
presence to the end user who makes or receives a long distance call.
 
ICP
 
    Logix's ICP services include: (i) local exchange services, (ii) enterprise
network services, (iii) Internet and intranet services, (iv) intrastate and
interstate toll services, (v) private line services, (vi) integration services,
and (vii) fiber operation services.
 
    LOCAL EXCHANGE SERVICES.  These include telephone services that connect a
customer's telephone or PBX to the public network and provide the customer with
access to long distance services, operator and directory assistance services,
911 service, integrated service digital network ("ISDN") services, voice mail
and other enhanced local features.
 
    ENTERPRISE NETWORK SERVICES.  These include the switching and transport of
digitized data (and voice) over a network designed to provide highly reliable,
flexible service and support of many data transmission protocols. The Company's
enterprise network services are provided over a network of frame relay and ATM
data switches owned and leased by the Company. The Company is also able to
provide remote access to businesses providing connectivity to corporate
networks.
 
    INTERNET AND INTRANET SERVICES.  The Company offers dedicated access to the
Internet and web page hosting, and provides additional services such as intranet
services. Examples of the Company's services are listed below:
 
<TABLE>
<CAPTION>
SERVICE OR FEATURE                                                      DESCRIPTION
---------------------------------------  -------------------------------------------------------------------------
<S>                                      <C>
Dedicated Internet Access..............  Connection to the Internet via the Company's data network.
 
Web Page Hosting.......................  The Company provides Web hosting services.
 
Intranet Service.......................  The Company provides customers with "private" equivalents of the Internet
                                         allowing secure, closed user access to the customer's private web sites,
                                         file transfer capabilities, etc.
</TABLE>
 
    INTRASTATE AND INTERSTATE SERVICES.  These services include the origination
and termination of telephone calls between users in different cities or
exchanges. The Company provides these services on a usage basis, utilizing its
local/long distance switches, its inter-city network and services provided by
other carriers. The Company also offers inbound "800" and "888" long distance
services and nationwide calling card services.
 
    PRIVATE LINE SERVICES.  The Company provides dedicated communications
channels connecting discreet end points. These non-switched services can be
provided to two locations within the same city, or between locations in
different cities (interexchange private lines). The Company also provides
special access services connecting a customer to an IXC for the purpose of
delivering long distance calls to the IXC.
 
    INTEGRATION SERVICES.  These services include initial evaluation of a
customer's needs, the provision and custom configuration of network devices,
normally located at the customer's premises, which may include any special
engineering, installation, or service functions provided by the Company and
ongoing maintenance and training.
 
    FIBER OPERATION SERVICES.  The Company provides long-haul transport services
in Texas, Oklahoma and Colorado (i) on a wholesale basis as a "carriers'
carrier", (ii) to private business and government end-users, and (iii) for other
subsidiaries of Dobson Communications. The Company has long-haul service
contracts with various long-distance carriers, including AT&T, SWBT, Sprint and
NTS Communications,
 
                                       6
<PAGE>
Inc. ("NTS"). NTS, which, in turn, resells to WorldCom, is the largest customer
of the Company's fiber services, accounting for approximately 49%, 41% and 31%
of its gross fiber revenue for the years ended December 31, 1996, 1997 and 1998,
respectively. The Company also provides services to the State of Oklahoma and
Vyvx, Inc.
 
NETWORK INFRASTRUCTURE
 
    The Company installed a Nortel DMS 500 supernode switch in Oklahoma City in
1997 for its ICP services in Oklahoma City. Recently, the Company moved all of
the ILEC traffic to this DMS 500 switch. In order to accomplish this change, the
Company has replaced several ILEC Nortel DMS 10s with remote switching devices
("RSLMs"). The ILEC switches that are being replaced with RSLMs will be
decommissioned. At December 31, 1998, the Company also had a DSC DEX-600 long
distance switch and a Siemens-Stromberg Carlson DCO local switch in Houston, a
Siemens-Stromberg Carlson DCO local switch and two ANPs (Nortel DMS 10s) in
Dallas, as well as two ANPs in Austin. At December 31, 1998, the Company was in
the process of installing DMS 500s in Dallas, Austin, and Houston to replace the
DCOs, the DEX-600, and the ANPs. The Company is also in the process of
installing DMS 100s in Tulsa and San Antonio and installing a DMS 10 in
Amarillo. All of the new switches that are being installed are expected to be
in-service in the second quarter of 1999, at which point the ANPs will likely be
relocated to other smaller cities in Texas. Some former American Telco customers
utilize call processors which belong to the Company but are located at the
customer premises. These call processors have enhanced routing, disaster
recovery and accounting features and can be remotely managed by the Company.
 
    The Company's Interconnection Agreements with SBC Communications, Inc.,
("SBC") and GTE Corporation and its affiliates ("GTE") allow it to (i) resell
SBC's and GTE's local exchange services in Oklahoma and Texas and (ii)
interconnect the Company's network with SBC's and GTE's networks for the purpose
of immediately gaining access to all of SBC's and GTE's unbundled network
elements. Based on these agreements, the Company is able to deploy its network
to enter new markets and offer local exchange services.
 
    The Company has agreements with various long-haul transport carriers to
transport the data and voice signals of its customers through its switches. The
Company also enters into agreements with various carriers to provide
transmission and termination services for its long distance traffic. Such
agreements typically provide for the resale of long distance services on a per
minute basis, with some agreements containing minimum volume commitments.
 
    In connection with the Company's enterprise network services, the Company
has been expanding its ATM network by installing ATM data switches, Internet
protocol ("IP") nodes, and related equipment in the Southwest. This expanded
network will enable the Company to market its enterprise network services to
businesses with branch offices throughout the Southwest. The Company will lease
additional fiber capacity to connect these ATM switches. Below is a schedule
listing all of the Company's switching devices (including the ILEC) that were
operational at December 31, 1998:
 
<TABLE>
<S>                                              <C>
Voice Switches
  DCO..........................................          2
  DMS 500......................................          1
  DMS 100......................................          0
  DMS 10.......................................         13
  DEX 600......................................          1
  RSLM.........................................         21
                                                        --
Total Voice Switches...........................         38
                                                        --
ATM Switches...................................         14
                                                        --
                                                        --
</TABLE>
 
                                       7
<PAGE>
    The Company operates 819 route miles of long-haul fiber optic facilities.
The Company entered the fiber business in 1990 when it joined with AT&T
Corporation ("AT&T") to place fiber between Oklahoma City and Amarillo, which
links the Company's local exchanges. The Company and AT&T each has its own
cable, sharing in all legal rights to the private right-of-way where the cables
are located. The Company's cable between Oklahoma City and Amarillo covers
approximately 364 route miles and consists of 36 strands of fiber. In 1991, the
Company acquired a 20% interest in Forte of Colorado Partnership which has 24
strands of fiber from Springfield, Colorado, to Colorado Springs, approximately
230 miles in length. One of the Company's partners in Forte of Colorado is NTS.
To enhance the revenue potential for the above segments, the Company, Forte of
Colorado and other segment providers have interconnected their networks and
currently offer fiber-based transport services among Albuquerque, Amarillo,
Cheyenne, Colorado Springs, Dallas, Denver, Des Moines, El Paso, Kansas City,
Las Cruces, Lubbock, Oklahoma City, Omaha, Midland, Wichita and Wichita Falls.
Other segment providers have expressed interest in interconnecting to this
network and expansion may occur north to Chicago, south to Houston and San
Antonio, and east toward Atlanta. There can be no assurance that such expansion
will occur to all or any of these cities, or if such expansion does occur, when
it may occur or on what terms and conditions. The ILEC operations have 225 route
miles consisting primarily of 24 strands of fiber used to connect their RSLMs.
While the Company currently has no plans to build significant amounts of
additional fiber capacity, it will continually evaluate the economic feasibility
of adding limited fiber optic lines in high capacity areas to eliminate costs
and/or improve provisioning of services. In addition, the Company may seek to
expand its network to additional cities through new interconnection agreements.
 
SALES AND MARKETING
 
    The Company believes there is substantial demand from small and medium-sized
business for bundled telecommunications services provided with a single monthly
bill and a single point of contact. While the Company's customer focus is on
small and medium-sized businesses, it also markets to large corporations,
financial services companies, government departments and agencies, and academic,
scientific and other major institutions.
 
    The Company's ICP services, are sold through the Company's existing sales
force supported by sales engineers, and often in cooperation with agents and
value added resellers (independent providers of communications hardware to
customers) and other business associates. This approach enables the Company to
emphasize the applications solutions aspects of its services and utilize the
expertise and resources of other vendors. The Company intends to continue
expanding its sales and engineering support staff and other technical
specialists in order to meet the expected demand for ICP services.
 
    The Company's sales force includes specialized professionals who focus on
sales to commercial and carrier consumers and alternate channels (agents and
value added resellers). The Company's sales staff works to gain a better
understanding of the customer's operations in order to develop innovative,
application-specific solutions to each customer's needs. Sales personnel locate
potential business customers by several methods, including customer referral,
market research, cold calling and other networking alliances. The Company's
sales group also seeks to obtain building entry agreements with owners of
multiple office building complexes.
 
    The Company has approximately 200 sales professionals with branch offices
located in Oklahoma City, Tulsa, Amarillo, Houston, Dallas, Austin, Fort Worth
and San Antonio. Each branch office is staffed by personnel capable of marketing
all of the Company's products and providing comprehensive support to the
Company's customers. Deploying this number of sales professionals located at
various branch offices in its target markets allows the Company to execute its
strategy of face-to-face sales and a single point of contact for all its
customers.
 
    The Company markets its fiber services through its direct and indirect sales
force. The Company intends to initiate additional marketing programs to increase
its customer base and the use of its fiber network by its existing customers.
 
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    The Company believes that it has a competitive advantage in the market area
that it serves because it has the only long-haul fiber network between Oklahoma
City and Amarillo, other than AT&T. AT&T's network, however, does not branch off
to small communities between Oklahoma City and Amarillo. By expanding its
network through interconnect agreements to access other major population centers
(including routes which may be attractive to major carriers) and providing
high-quality, reliable transmission services on a fixed-cost basis at
competitive rates, the Company believes it can increase its fiber revenue.
 
CUSTOMER SERVICE
 
    The Company's sales and marketing approach is to build long-term business
relationships with its customers, with the intent of becoming the single source
provider of all of their telecommunications services. To this end, the Company
assigns a dedicated account relations manager to each business account who is
responsible for proactively contacting the customer on a monthly basis. These
managers ensure that customers are satisfied with their current services and
promote new services and programs. Management believes that this activity
improves customer retention, enhances penetration within the existing customer
base and provides the Company with qualified sales leads through referrals.
 
    The Company's service delivery staff is primarily responsible for
coordinating service and installation activities. Service delivery activities
include surveying the site to assess ambient conditions and power, and space
requirements, as well as coordinating installation dates and equipment delivery
and testing. The Company's customer service and technical staff plans,
engineers, monitors and maintains the integrity, quality and availability of the
Company's networks. The Company's customer service and technical staff are
available to customers 24 hours every day.
 
COMPETITION
 
    GENERAL.  The telecommunications industry is highly competitive and the
Company faces intense current and potential competition with respect to its
service offerings. Many of the Company's current and potential competitors have
financial, technical, personnel and other resources, including brand name
recognition, substantially greater than those of the Company. There has also
been, and the Company believes there will continue to be, significant merger and
joint venture activity and the creation of strategic alliances within the
telecommunications industry that will result in competitors with even greater
financial resources and other competitive advantages. In addition, rapidly
evolving technology, and new applications of existing technology, may also
provide competitors in the Company's markets with significant competitive
advantages over the Company. The Company believes that various legislative
initiatives, including the Telecommunications Act and certain state initiatives,
will facilitate the ability of RBOCs, other ILECs and IXCs to offer bundled
services, allowing such entities to leverage their extensive existing networks
and provide customers with single source telecommunications services similar to
the services provided by the Company. There can be no assurance that the Company
will be able to respond to such competitive pressures or that competition will
not have a material adverse effect on the Company.
 
    LOCAL SERVICES.  In each of its markets where the Company operates as an
ICP, the Company faces significant competition for the local services it offers
from RBOCs and other ILECs, which currently dominate their local
telecommunications markets. In particular, SBC is the dominant local services
provider in most of the markets currently served by the Company. These companies
all have long-standing relationships with their customers and have financial,
personnel and technical resources substantially greater than those of the
Company. As a recent ICP market entrant, the Company has not achieved, and does
not expect to achieve in the near future a significant market share for its
services.
 
    In the Texas markets, the Company also faces competition in most markets in
which it operates from one or more entities, including Allegiance Telecom, Inc.
("Allegiance"), Caprock Communications Corporation ("Caprock"), e-spire
Communications, Inc. ("e-spire"), ICG Communications, Inc. ("ICG"), Intermedia
Communications, Inc. ("Intermedia"), Teligent Inc. ("Teligent") and Winstar
Communications, Inc. ("Winstar"). Other local service providers may also be
initiating operations within one or more of the
 
                                       9
<PAGE>
Company's service areas. The Company expects long distance carriers, including
AT&T, Sprint and WorldCom, to offer local services together with their long
distance services in certain markets. At least two of these competitors, AT&T
and WorldCom, have entered or announced plans to enter a number of the Company's
service areas.
 
    In addition, the recent trend toward mergers and strategic alliances among
RBOCs and larger telecommunications carriers since passage of the
Telecommunications Act raises serious questions about the adverse effect of
these mergers and alliances upon the development of competition in the
telecommunications industry. On March 9, 1999, AT&T consummated its acquisition
of Tele-Communications, Inc. In February 1999 the FCC approved the proposed
merger of SBC and Ameritech Corporation ("Ameritech") which, if consummated,
would reduce the seven original RBOCs to four. This merger would leave one RBOC,
SBC, with control of a significant portion of the local exchange and business
access lines in the U.S. It also will significantly reduce competition between
RBOCs, on some markets such as Ameritech's previously announced plans to launch
local service in Texas and St. Louis, Missouri in 1998 and in other markets
within SBC's region. At the same time, SBC's competitors have won less than two
percent of SBC's market share in its local markets as a whole. SBC already has
merged with Pacific Bell and with Southern New England Telecommunications. Two
other RBOCs, Bell Atlantic and NYNEX have merged. WorldCom has acquired MFS
Communications Co., Inc., Brooks Fiber Properties, Inc. and MCI. AT&T has
acquired another ICP, Teleport. In June 1998 Qwest Communications International,
Inc. ("Qwest") acquired LCI International Telecom Corporation ("LCI").
 
    In March 1997 BellSouth Corporation ("BellSouth") and International Business
Machines ("IBM") also announced an alliance to provide Internet and intranet
services to businesses in the southern United States. In February 1999, SBC
announced a strategic alliance with the Williams Corporation relating to
transport services.
 
    The Company also expects certain cable television providers to enter its
local service markets. Other potential competitors of the Company include
utility companies and wireless telephone systems operators and private networks
built by large end-users. The Company cannot predict the number of competitors
that will emerge as a result of existing or any new federal and state regulatory
or legislative actions.
 
    In the market areas where the Company operates as an ILEC, the Company is
the sole provider of local services. The Telecommunications Act requires the
Company to interconnect its ILEC networks with the networks of other ICPs at
rates that are reasonable and non-discriminatory. As a result, other ICPs,
including SBC, could negotiate interconnection agreements with the Company and
resell or provide as unbundled network elements the Company's local exchange
services in its market areas.
 
    Competition in all of the Company's geographic market areas is based on
price, quality, reliability, customer service and responsiveness and service
features. The Company has kept its prices at levels competitive with those of
the ILECs while providing, in the opinion of the Company, a higher level of
service and responsiveness to its customers.
 
    Although the ILECs are generally subject to greater pricing and regulatory
constraints than other local network service providers, ILECs are achieving
increasing pricing flexibility for their local services as a result of recent
legislative and regulatory developments. The ILECs have continued to lower
rates, resulting in downward pressure on certain dedicated and switched access
transport rates. This price erosion has decreased operating margins for these
services. However, the Company believes this effect will be more than offset by
the increased revenues available as a result of access to customers provided
through interconnection co-carrier agreements and the opening of local exchange
service to competition. In addition, the Company believes that lower rates for
dedicated access will benefit other services offered by the Company.
 
                                       10
<PAGE>
    ENHANCED DATA SERVICES.  The Company faces competition in its enhanced data
services business from ILECs, IXCs, very small aperture terminal ("VSAT")
providers, internet service providers ("ISPs"), Internet software providers and
others. Many of the Company's existing and potential competitors, such as
satellite-based providers, have financial and other resources significantly
greater than those of the Company.
 
    The Company competes with the larger IXCs on the basis of price, service
responsiveness and a rapid response to technology and service trends. All of the
major IXCs, including AT&T, Sprint and WorldCom offer frame relay services and
several of the major IXCs have announced plans to provide Internet services. The
Company believes it competes favorably with these providers in its markets,
based on the features and functions of its services and its experience and
in-house expertise. Continued aggressive pricing is expected to support
continued rapid growth, but will place increasing pressure on operating margins.
 
    The Company also competes with VSAT services on the basis of price and data
capacity. The Company believes that the relatively low bandwidth of each VSAT
terminal and the cost of purchasing and installing VSAT equipment limits the
ability of VSAT to compete with the frame relay services provided by the
Company.
 
    Many of the ILECs now offer services similar to the Company's enhanced data
services, so called "advanced services," but offer RBOCs advanced services only
on an intra local access and transport area ("intraLATA") basis. While the ILECs
generally cannot interconnect their frame relay networks with each other, the
Company has interconnected its frame relay network with those of various ILECs.
The Company may also provide, as unbundled network elements, or resell the
advanced services of ILECs. As a result, the Company can use certain ILEC
services to keep its own costs down when distributing into areas that cannot be
more economically serviced on its own network. The Company expects the ILECs to
aggressively expand their enhanced data services as regulatory developments
permit them to deploy interLATA long distance networks. When the ILECs are
permitted to provide such services, they will be in a position to offer single
source service similar to that being offered by the Company. In February 1998,
the RBOCs, US WEST Communications, Inc. ("US WEST"), Bell Atlantic and
Ameritech, petitioned the Federal Communications Commission ("FCC") under
Section 706 of the Telecommunications Act to allow them to build and operate
packet- and cell-switched data networks across LATA boundaries, to permit them
to carry interLATA data traffic incident to their provision of digital
subscriber line services, to not require them to make those data services
available on a discounted resale basis, and to not require them to make the
non-bottleneck elements of such services available on an unbundled basis. The
Company provides or may provide certain services with which these proposed
services (or similar services offered by other RBOCs) would compete if these
petitions are granted by the FCC. In a proceeding initiated in August 1998, the
FCC denied the RBOCs' request for large scale interLATA relief, proposing
instead limited modifications of LATA boundaries and the ILECs be relieved of
certain connection obligations if advanced services are provided via a separate
affiliate and subject to structural and non-discrimination safeguards. This
proceeding remains pending.
 
    LONG DISTANCE.  The long distance market has relatively insignificant
barriers to entry, high average churn rate, numerous entities competing for the
same customers and prices that have declined and are expected to continue to
decline. The Company believes that it competes on the basis of price, customer
service, accurate billing, clear pricing policies and, to a lesser extent,
variety of services. The numerous current and potential competitors in the
market include AT&T, Sprint, WorldCom, Excel Communications, Inc. ("Excel"),
Qwest, other ICPs, microwave and satellite carriers and private networks owned
by large end-users. The Company also may increasingly face competition from
firms offering long distance data and voice services over the Internet, which
firms could enjoy a significant cost advantage because they currently do not pay
carrier access charges or universal service fees.
 
    RBOCs, such as SBC, are currently allowed to provide interLATA long distance
services outside their regions, as well as interLATA mobile services within
their regions. Under the Telecommunications Act, the
 
                                       11
<PAGE>
RBOCs will be allowed to provide interLATA long distance services within their
regions after meeting certain requirements intended to foster opportunities for
local telephone competition. While some RBOCs have applied for in region,
interLATA approval, no such applications have been approved to date. See
"--Regulation."
 
    In providing interexchange services, the Company focuses on quality service
and economy to distinguish itself in a very competitive marketplace. The Company
has built a loyal customer base by emphasizing its customer service. The
additional new services that are offered as the Company implements its local
exchange services should further support this position by allowing the Company
to market a wide array of fully integrated telecommunications services. While
these services are subject to highly competitive pricing pressures, the
Company's cost to provide these services is decreasing as it deploys more
local/long distance voice switches and interexchange network facilities.
 
FIBER
 
    In providing bulk long-haul fiber capacity the Company's primary competitors
are IXC Communications, Inc., Qwest and AT&T. AT&T is the largest supplier of
long distance voice and data transmission services in the United States and has
a transmission line adjacent to the Company's between Oklahoma City and
Amarillo. The Company also competes with other facilities-based IXCs, such as
WorldCom and Sprint, all of which have substantially greater financial resources
than the Company and a far more extensive transmission network than the
Company's network. In Oklahoma, the Company's principal competitor is a
subsidiary of SBC. The Company may also face competition from the RBOCs, GTE and
others such as electric utilities and cable television companies, including both
wireless and satalite.
 
REGULATION
 
    OVERVIEW.  The Company's services are subject to federal, state and local
regulation. The Company, through its subsidiaries, holds various federal and
state regulatory authorizations. The FCC exercises jurisdiction over
telecommunications common carrier services to the extent the carriers provide,
originate or terminate interstate or international communications. The FCC also
establishes rules and has other authority over certain issues related to local
telephone competition. State regulatory commissions retain jurisdiction over
telecommunications carriers to the extent they provide, originate or terminate
intrastate communications. Local governments may require the Company to obtain
licenses, permits or franchises in order to use the public rights of way or
obtain zoning approvals necessary to install and operate its networks.
 
    FEDERAL REGULATION.  The Company is categorized as a non-dominant carrier by
the FCC, and as a result is subject to relatively limited regulation of its
interstate and international services. Tariffing and certain general policies
and rules apply, as well as certain reporting requirements, but the Company's
rates are not subject to prior FCC approval. The Company has all the operating
authority required by the FCC to conduct its long distance business at present.
As a non-dominant carrier, the Company may install and operate additional
facilities for the transmission of domestic and international interstate
communications without prior FCC authorization, except to the extent that radio
licenses or international authorizations are required.
 
    The FCC also imposes prior approval requirements on transfers of control and
assignments of radio and microwave licenses and authorizations for the provision
of international telecommunications services. The FCC has the authority
generally to condition, modify, cancel, terminate or revoke licenses and
operating authority for failure to comply with federal laws and/or the rules,
regulations and policies of the FCC. Fines or other penalties also may be
imposed for such violations. There can be no assurance that the FCC or third
parties will not raise issues with regard to the Company's compliance with
applicable laws and regulations.
 
                                       12
<PAGE>
    The FCC also regulates the interstate access rates charged by ILECs for the
origination and termination of interstate long distance traffic. Those access
rates make up a significant portion of the cost of providing long distance
service. The FCC has recently implemented changes to its interstate access rules
that result in restructuring of the access charge system and changes in access
charge rate levels. These changes reduce per-minute access charges and
substitute new per-line flat-rate monthly charges. These actions, and additional
anticipated access charge reductions ordered by regulatory commissions in the
future, are expected to reduce access rates, and hence the cost of providing
long distance service, especially to business customers. These rules were
affirmed by the Eighth Circuit Court of Appeals and further proceedings at the
FCC are ongoing. A related FCC proceeding involving price-cap recognition of
access charge rates is currently pending before the U.S. Court of Appeals for
the District of Columbia Circuit. The full impact of the FCC's new decisions
will not be known until those decisions are implemented over the next several
years, during which time those decisions may be revised or subject to judicial
review. In a related proceeding, the FCC has adopted changes to the methodology
by which access has been used in part to subsidize universal telephone service
and other public policy goals. Telecommunications providers like the Company
must pay a fee calculated as a percentage of their end user gross revenues
derived from telecommunication services to support these goals. The full
implications of this decision also remain uncertain and subject to change. In
addition, the FCC and the courts are considering related questions regarding the
applicability of access charge, and universal service fees to Internet service
providers. Currently such providers are not subject to these expenses. ILECs and
other parties argue that this exemption unfairly advantages Internet service
providers, particularly when they provide data, voice or other services in
direct competition with conventional telecommunications. The Company is not in a
position to determine how these access and universal service matters will be
resolved, and whether or not such resolution will be harmful to its competitive
position.
 
    In October 1996, the FCC adopted an order in which it eliminated the
requirement that non-dominant interstate carriers such as the Company maintain
tariffs on file with the FCC for domestic interstate services. This order
applies to all non-dominant interstate carriers, including AT&T. The order does
not apply to the switched and special access services of the RBOCs or other
local exchange providers. The FCC order was issued pursuant to authority granted
to the FCC in the Telecommunications Act to "forbear" from regulating any
telecommunications services provider if the FCC determines that the public
interest will be served. Several parties have filed notices for reconsideration
of the FCC order and other parties appealed the decision. On February 13, 1997,
the U.S. Court of Appeals for the District of Columbia Circuit stayed the
implementation of the FCC order pending its review of the order on the merits.
Currently, that temporary stay remains in effect.
 
    If the stay is lifted and the FCC order becomes effective,
telecommunications carriers such as the Company may have greater pricing
flexibility but will no longer be able to rely on the filing of tariffs with the
FCC as a means of providing notice to customers of prices, terms and conditions
on which they offer their interstate services. The obligation to provide
non-discriminatory, just and reasonable prices remains unchanged under the
Communications Act of 1934, as amended by the Telecommunications Act. While
tariffs provided a means of providing notice of prices, terms and conditions,
the Company intends to rely primarily on its sales force and direct marketing to
provide such information to its customers.
 
    The Telecommunications Act also gives the FCC and state Public Utilities
Commission ("PUCs") roles in establishing rules for the implementation of local
telephone competition. The Telecommunications Act imposes a variety of new
duties on ILECs in order to promote competition in local exchange and access
services, and the FCC has authority to develop rules to implement these duties.
Some smaller independent ILECs may seek suspension or modification of these
obligations, and some companies serving rural areas are exempt from them.
 
    In that regard, on August 8, 1996, the FCC released the Local Competition
Order to implement the interconnection, network unbundling and resale provisions
of the Telecommunications Act. The Local Competition Order established rules
pursuant to which ILECs interconnect their networks with the
 
                                       13
<PAGE>
networks of competitive local exchange carriers at rates that are reasonable and
non-discriminatory. The Local Competition Order also established rules governing
the rights of ICPs to obtain and use elements of the ILECs' networks at
cost-based rates either to supplement or substitute for alternative local
network facilities that the ICP would otherwise be required to install. The
Local Competition Order set rules governing competitive local exchange carrier
access to wholesale versions of the ILECs' retail local services for resale. The
ILECs are required to establish operational support systems so that these
services and functionalities can be made available to other carriers on a
nondiscriminatory basis. The Local Competition Order also created rules to deal
with Reciprocal Compensation for the transport and termination of local
telecommunications, non-discriminatory access to rights of way, and related
matters. A related FCC order adopted the same day established rules implementing
the Telecommunications Act with respect to local and toll dialing parity among
competitors; nondiscriminatory access to telephone numbers, operator services,
directory assistance and listings, and network information; and reform of
numbering administration.
 
    The Local Competition Order was challenged in the federal courts by GTE, the
RBOCs, large independent ILECs and state regulatory commissions. On October 15,
1996, the U.S. Court of Appeals for the Eighth Circuit issued a stay of the
implementation of certain of the FCC's rules and on July 18 and October 14,
1997, the Eighth Circuit issued decisions finding that the FCC lacked statutory
authority under the Telecommunications Act for a major portion of its rules. The
U.S. Supreme Court in January 1999 largely upheld the FCC's rules, but remanded
the case for further proceedings on the issue of which ILEC network elements
must be made available to competitive local exchange carriers. A number of state
commissions, in the interim, have set prices for unbundled network elements that
are substantially higher and wholesale discount rates lower for resold services
than the Local Competition Order provided on an interim basis. Other FCC rules
related to local telephone competition remain the subject of legal challenges.
 
    For example, many new carriers, including the Company, have experienced
problems with respect to the OSS used by new carriers to order and receive
network elements and wholesale services from the ILECs. These systems are
necessary for new carriers like the Company to provide local service to
customers on a timely and competitive basis. The FCC created a task force to
examine problems that have slowed the development of local telephone
competition.
 
    In connection with offering local exchange services, the Company has entered
into approved interconnection agreements with SBC and GTE in Texas and Oklahoma
permitting the Company to (i) resell SBC's and GTE's local exchange services in
Oklahoma, Texas, Kansas, Missouri, and Arkansas (ii) interconnect the Company's
network with SBC's and GTE's networks for the purpose of exchanging local
traffic with ILEC customers, and (iii) immediately gain access to all of SBC's
and GTE's unbundled network elements.
 
    As a general matter, no assurance is possible regarding how quickly or how
adequately the Company will be able to take advantage of the opportunities
created by the Telecommunications Act.
 
    The Telecommunications Act also imposes certain duties on non-ILECs, such as
the Company. These duties include the obligation to complete calls originated by
competing carriers under reciprocal arrangements or through mutual exchange of
traffic without explicit payment; the obligation to permit resale of their
telecommunications services without unreasonable restrictions or conditions; and
the duty to provide dialing parity, number portability, and access to rights of
way. The Company does not anticipate that these obligations will impose a
material burden on its operations. However, in view of the fact that local
telephone competition is still in its infancy and implementation of the
Telecommunications Act has just begun, there can be no assurance in this regard.
 
    The Telecommunications Act also establishes the foundation for substantial
new future competition for the Company's long distance operations through
elimination or modification of previous prohibitions on the provision of
interLATA long distance services by the RBOCs. The RBOCs are now permitted to
provide interLATA long distance service outside those states disignated as their
"in region states" in which
 
                                       14
<PAGE>
they offer local exchange service ("out-of-region long distance service") upon
receipt of any necessary state and/or federal regulatory approvals. They also
are allowed to provide long distance services incidental to their cellular and
other mobile services within the regions in their in-region states which they
also provide local exchange service ("in-region service"). Under the
Telecommunications Act, the RBOCs will be allowed to provide in-region interLATA
services upon specific approval of the FCC and satisfaction of other conditions,
including a checklist intended to facilitate competitive entry into local
exchange markets. GTE is permitted to enter the long distance market without
regard to limitations by region. GTE is also subject to the provisions of the
Telecommunications Act that impose interconnection and other requirements on
local exchange carriers. SBC and other RBOCs have begun to take actions directed
towards obtaining authority from the FCC to offer in-region long distance
services in certain of the states in their respective regions. The FCC forced
the withdrawal of the first RBOC request for in-region long distance authority
to date, and has rejected all subsequent applications. However, there can be no
assurance that the RBOCs will be prevented from offering in-region long distance
service until local competition is established. If the RBOCs are allowed to
enter the long distance market prior to establishing local competition, absent
additional safeguards it would remove the incentive RBOCs have to cooperate with
the Company's efforts to offer local exchange services.
 
    The ability of the RBOCs to provide interLATA services will enable them to
provide customers with a full range of local and long distance
telecommunications services. The provision of interLATA services by RBOCs is
expected to reduce the market share of the major long distance carriers, which
are the Company's networks' primary customers. Consequently, the entry of the
RBOCs into the long distance market may have adverse consequences on the ability
of ICPs both to generate access revenues from the IXCs and to compete in
offering a package of local and long distance services. To date FCC authority to
provide in-region interLATA service has been sought by Ameritech in Michigan,
SBC in Oklahoma and BellSouth in South Carolina and Louisiana. In March 1998,
the U.S. Court of Appeals for the District of Columbia Circuit affirmed the
FCC's denial of SBC's application for long distance authority in Oklahoma. The
Department of Justice opposed each of these requests, and the FCC denied them.
More RBOC requests to provide in-region interLATA service are expected to be
filed with state commissions and the FCC in the near future. SBC has
applications pending with state commissions through its in-region states,
including Oklahoma. On June 3, 1998, the Texas PUC rejected SBC's application to
provide in-region interLATA service. Although SBC can be expected to refile its
application with the Texas PUC, this is a significant short-term development for
IXCs and ICPs operating in Texas and in neighboring states in SBC's region.
 
    The FCC has granted ILECs certain flexibility in pricing their interstate
special and switched access services. Under this pricing scheme, local exchange
carriers may establish pricing zones based on access traffic density and charge
different prices for access provided in each zone. The Company anticipates that
the FCC will grant ILECs increasing pricing flexibility as the number of
interconnection agreements and competitors increases. In a pending rulemaking
proceeding scheduled for completion soon, the FCC is expected to announce new
and more specific policies regarding the conditions and timing under which ILECs
will be eligible for such increased pricing flexibility. This proceeding is
presently pending before the U.S. Court of Appeals for the District of Columbia
Circuit. There can be no assurance that such pricing flexibility will not place
the Company at a competitive disadvantage, either as a purchaser of access for
its long distance operations, or as a vendor of access to other carriers or end
user customers.
 
    The Telecommunications Act repeals the telco/cable cross-ownership
prohibition and permits ILECs to provide cable television service. Prior to the
Telecommunications Act repeal, some ILECs were investing in fiber optic networks
on a limited basis through the FCC's "video dialtone" regulatory regime. With
the telco/cable cross ownership prohibition removed, ILECs are more likely to
invest in fiber optic networks because those facilities will be able to generate
a revenue stream previously unavailable on a widespread basis to the ILECs.
While ILEC entry into the video market may be a motivating factor for
construction of
 
                                       15
<PAGE>
new facilities, these facilities also can be used by an ILEC to provide services
that compete with the Company's networks.
 
    On May 8, 1997, the FCC released the Universal Service Order establishing a
significantly expanded federal telecommunications subsidy regime. Pursuant to
the Telecommunications Act, the FCC established new subsidies for
telecommunications and information services provided to qualifying schools and
libraries, for services provided to rural health care providers. The FCC also
expanded the federal subsidies to low-income consumers and customers high-cost
areas. Providers of interstate telecommunications service, such as the Company,
as well as certain other entities, must pay for these programs. The Company's
share of these federal subsidy funds will be based on its pro-rata share of
intrastate, interstate and international "end user" gross telecommunications
revenues. Several parties have appealed the May 8th order. Such appeals have
been consolidated and transferred to the U.S. Court of Appeals for the Fifth
Circuit where they are currently pending.
 
    In addition, on May 16, 1997, the FCC released the Access Charge Reform
Order revising its access charge rate structure. The new rules substantially
increase the costs that local exchange carriers which are subject to the FCC's
price cap rules, recover through monthly, non-traffic sensitive access charges
and substantially decrease the costs that price cap LECs recover through traffic
sensitive access charges. In the order, the FCC also announced its plan to bring
interstate access rate levels more in line with cost. The FCC has stated that
this plan will grant price cap LECs increased pricing flexibility upon
demonstrations of increased competition (or potential competition) in relevant
markets. The manner in which the FCC further implements this approach to
lowering access charge levels could have a material effect on the Company's
ability to compete in providing interstate access services and on the Company's
ILEC operations. An October 1997 FCC access charge decision, for example,
requires local exchange carriers to provide interexchange carriers with certain
information about the number and types of charges they impose on interexchange
carriers' presubscribed customers. Several parties have appealed the Access
Charge Reform Order.
 
    The Telecommunications Act potentially affects the Company's ILEC
operations. Under previous regulations access charges contained implicit support
for high-cost areas. The FCC has initiated proceedings to overhaul the
contribution mechanism for federal support revenue. On May 16, 1997, the FCC
issued the Access Charge Reform Order that would remove implicit universal
service support from access revenues and place more emphasis for such support on
HCF/USF. The Eighth Circuit Court of Appeals largely affirmed these rules in
August 1998. These rules were affirmed by the Eighth Circuit Court of Appeals
and further proceedings at the FCC are ongoing. A related FCC proceeding
involving price-cap recognition of access charge rates is currently pending
before the U.S. Court of Appeals for the District of Columbia Circuit. To the
extent reductions in access charges are not offset by explicit universal service
subsidies, this could have a materially adverse effect upon the Company's ILEC
operations. Until such time as the appeals of the Universal Service Order and/or
Access Charge Reform Order are decided, there can be no assurance of how either
of these Orders will be implemented or enforced or what effect the Orders will
have on competition within the telecommunications industry generally, or on the
competitive position of the Company, in particular.
 
    A number of ILECs, including SBC and BellSouth, have been contesting whether
the obligation to pay reciprocal compensation to ICP's should apply to local
telephone calls terminating to ISPs. The ILECs claim that this traffic is
interstate in nature and therefore should be exempt from compensation
arrangements applicable to local, intrastate calls. Currently, the commissions
of 29 states, including Maryland, Michigan, New York, Oklahoma, Tennessee, Texas
and Virginia, have ruled that reciprocal compensation arrangements do apply to
ISP traffic. On June 16, 1998, a federal district court in Texas denied SBC's
appeal of the Texas PUC's decision that local calls to ISPs are entitled to
payment of reciprocal compensation. Disputes over the appropriate treatment of
ISP traffic are pending in other states. In a February 1999 decision, the FCC
affirmed the ISP exemption from interstate access charges, but also determined
that Internet traffic is interstate and therefore subject to federal
jurisdiction. The FCC did not
 
                                       16
<PAGE>
determine whether calls to ISPs are subject to reciprocal compenstation, and
left existing state rules in place. The FCC tentatively concluded that
inter-carrier compensation for Internet traffic should be governed prospectively
by interconnection agreements negotiated and arbitrated proceeding and its
implications for the Company is uncertain, and ILECs reportedly hope that state
commissions will revisit their earlier decisions in light of the FCC's
determination that Internet traffic is interstate in nature. The Company could
be adversely affected by state and federal decisions on this matter.
 
    STATE REGULATION.  The Company is also subject to various state laws and
regulations. Most PUCs require providers such as the Company to obtain authority
from the commission prior to the initiation of intrastate service. The Company
has been certified to provide intrastate telecommunications services in Oklahoma
and Texas, Kansas, Missouri, Tennessee, Colorado, Iowa, Michigan, New York, New
Jersey, Montana, New Mexico, Florida, North Carolina, South Carolina, Kentucky,
Ohio, South Dakota, Georgia, Idaho, Indiana, Maryland, Minnesota, Utah,
Virginia, Alabama, Arkansas, Colorado, Georgia, Iowa, Ohio, Tennessee, South
Dakota, and Wisconsin. The Company has pending applications in Louisiana,
California, The certification permits the Company to provide a range of local
communications services, including basic local exchange service, resold
inter-exchange service, and competitive access service. In most states,
including Texas and Oklahoma, the Company also is required to file tariffs
setting forth the terms, conditions and prices for services that are classified
as intrastate. The Company also is required to update or amend its tariffs when
it adjusts its rates or adds new products, and is subject to various reporting
and record-keeping requirements.
 
    The Company's ILEC subsidiary, Dobson Telephone Company, is subject to the
regulatory authority of the OCC, which sets rates, terms and conditions of
service, and mandates minimum service and quality of service requirements for
telephone companies in Oklahoma. Telephone companies in Oklahoma have elected to
be access providers, providing long distance service only between their own
exchanges. Interexchange carriers, including SBC, provide all other long
distance services for other customers. Logix has received authority to provide
competitive local exchange telecommunications services and to resell intrastate
long distance services within Oklahoma and has received authority to resell
intrastate long distance services within Texas. American Telco has received
authority to provide competitive local exchange telecommunication services and
to resell intrastate long distance services within Texas.
 
    Many states also require prior approval for transfers of control of
certified carriers, corporate reorganizations, acquisitions of
telecommunications operations, assignment of carrier assets, carrier stock
offerings and incurrence by carriers of significant debt obligations.
Certificates of authority can generally be conditioned, modified, canceled,
terminated or revoked by state regulatory authorities for failure to comply with
state law and/or the rules, regulations and policies of state regulatory
authorities. Fines or other penalties also may be imposed for such violations.
There can be no assurance that state utilities commissions or third parties will
not raise issues with regard to the Company's compliance with applicable laws or
regulations.
 
    Many issues remain open regarding how new local telephone carriers will be
regulated at the state level. For example, although the Telecommunications Act
preempts the ability of states to forbid local service competition, the
Telecommunications Act preserves the ability of states to impose reasonable
terms and conditions of service, to regulate right-of-way use, to promote
univeral service, and to impose other regulatory requirements. These statutes
and related questions arising from the Telecommunications Act will be elaborated
further through rules and policy decisions made by the FCC, courts and PUCs in
the process of addressing local service competition issues.
 
    The Company also will be heavily affected by state commission decisions
related to the ILECs. For example, state commissions have significant
responsibility under the Telecommunications Act to oversee relationships between
ILECs and ICPs with respect to use of the ILECs' network elements and wholesale
local services. State commissions arbitrate interconnection agreements between
the incumbent local exchange carrier pricing issues in major proceedings now
underway. They will also determine how
 
                                       17
<PAGE>
competitors can take advantage of the terms and conditions of interconnection
agreements that ILECs reach with other carriers. It is too early to evaluate how
these matters will be resolved, or their impact on the ability of the Company to
pursue its business plan.
 
    States also regulate the intrastate carrier access services of the ILECs.
The Company is required to pay such access charges to originate and terminate
its intrastate long distance traffic. The Company could be adversely affected by
high access charges, particularly to the extent that the ILECs do not incur the
same level of costs with respect to their own intrastate long distance services.
In a related development, states also will be developing intrastate universal
service charges parallel to the interstate charges created by the FCC. For
example, ILECs such as SBC are proposing that states create funds that would be
supported by potentially large payments by firms such as the Company based on
their total intrastate revenues. Another issue is use by certain ILECs, with the
approval of PUCs, of extended local area calling that converts otherwise
competitive intrastate toll service to flat rate local service. States also are
or will be addressing various intraLATA dialing parity issues that may affect
competition. The Company's business could be adversely affected by these or
other developments.
 
    The Company's ILEC operations have been determined by the Oklahoma
Corporation Commission ("OCC") to be eligible to receive both federal universal
funds and OUSF and HCF funds. The Oklahoma Telecom Act of 1997 ("Oklahoma
Telecom Act") specifically provides that eligible local exchange
telecommunications service providers are to receive OUSF funding to reimburse
them for their reasonable investment and expenses incurred in providing
universal services which are not recovered from the federal universal service
fund or any other state or federal fund, for infrastructure expenditures or
costs incurred in response to facility or service requirements established by
governmental mandate and for other purposes deemed necessary by the OCC to
preserve and advance universal service. The OCC has promulgated rules to
implement the Oklahoma Telecom Act.
 
    The Company also will be affected by how states regulate the retail prices
of the ILECs with which it competes. The Company believes that, as the degree of
intrastate competition increases, the states will offer the ILECs increasing
pricing flexibility. This flexibility may present the ILECs with an opportunity
to subsidize services that compete with the Company's services with revenues
generated from non-competitive services, thereby allowing ILECs to offer
competitive services at lower prices than they otherwise could. In a related
development, certain RBOCs are seeking authority to create ICP affiliates that
would operate on a much less regulated basis and therefore could provide
significant competition in the business market whether or not the traditional
ILEC local business receives more pricing flexibility. The Company cannot
predict the extent to which these developments may occur or their impact on the
Company's business.
 
    LOCAL GOVERNMENT AUTHORIZATIONS AND RELATED RIGHTS OF WAY.  The Company is
required to obtain street use and construction permits and licenses and/or
franchises to install and expand its fiber optic networks using municipal rights
of way. In some municipalities where the Company has installed or anticipates
constructing networks, it will be required to pay license or franchise fees
based on a percentage of gross revenues or on a per linear foot basis. There can
be no assurance that, following the expiration of existing franchises, fees will
remain at their current levels. In many markets, the ILECs do not pay such
franchise fees or pay fees that are substantially less than those required to be
paid by the Company, although the Telecommunications Act requires that in the
future such fees be applied in a competitively neutral manner. To the extent
that, notwithstanding the Telecommunications Act, competitors do not pay the
same level of fees as the Company, the Company could be at a competitive
disadvantage. Termination of the existing franchise or license agreements prior
to their expiration dates or a failure to renew the franchise or license
agreements and a requirement that the Company remove its facilities or abandon
its network in place could have a material adverse effect on the Company. In
addition, the Company would be adversely affected if it is unable to obtain
additional authorization for new construction on reasonable
 
                                       18
<PAGE>
terms. Furthermore, open issues exist regarding the ability of new local service
providers to gain access to commercial office buildings to serve tenants. Two
favorable federal district court decisions interpreting the Telecommunications
Act limit the extent to which Texas localities may impose right-of-way
regulations and fees on the Company where the Company resells the services of
ILECs and other facilities-based carriers. However, no assurance can be given
that these decisions will not be subject to appeal or that future court
decisions, either in Texas or other states, will prove favorable to the Company.
 
    GENERAL.  The telecommunications market is in a period of substantial change
and uncertainty. As the Telecommunications Act and related FCC and state actions
are implemented, new issues are likely to arise that can affect the Company and
its business plan. No assurance can be given that future regulatory developments
will not have a materially adverse impact on the Company.
 
    The Telecommunications Act imposes a number of other regulatory requirements
on the Company. The Act restricts a telecommunications carrier's use of customer
proprietary network information, which may impose burdens on the Company's
current marketing activities. The Act also requires telecommunications carriers
to make their services accessible to persons with disabilities. The Act also
restricts the manner in which telecommunications carriers obtain consent to
change a customers primary interexchange/long distance carrier. These
requirements, and others, could subject the Company to additional costs.
 
EMPLOYEES AND AGENTS
 
    As of December 31, 1998, the Company had approximately 740 employees. In
addition, the Company also enters into agreements with independent sales agents
to market its products. None of the Company's employees are represented by a
labor organization, and the Company considers its employee relations to be good.
 
CERTAIN TERMS
 
    ACCESS--Telecommunications services that permit long distance carriers to
use local exchange facilities to originate and/or terminate long distance
service.
 
    ACCESS CHARGE REFORM ORDER--An order released by the FCC on May 16, 1997
that revised its access charge structure.
 
    ANP--Advanced network presence.
 
    ACCESS CHARGES--The fees paid by long distance carriers to local exchange
carriers for originating and terminating long distance calls on their local
network.
 
    ADVANCED NETWORK PRESENCE UNIT ("ANP")--A unit that links the Company's
leased lines to its switches and enables the Company to provide digital local
and long distance switch services and ATM-based data services in a market area.
 
    ALLEGIANCE--Allegiance Telecom, Inc.
 
    AMERICAN TELCO--collectively, American Telco, Inc. and American Telco
Network Services, Inc.
 
    AMERICAN TELCO ACQUISITION--The acquisition of American Telco, Inc. and
American Telco Network Services, Inc. by Logix Communications Enterprises, Inc.
 
    AMERITECH--Ameritech Corporation.
 
    AT&T--AT&T Corporation.
 
    ATM (ASYNCHRONOUS TRANSFER MODE)--A switching and transmission technology
that is one of a general class of packet technologies that relay traffic by way
of an address contained within the first five bits of a standard 53 bit-long
packet or cell. ATM-based packet transport was specifically developed to allow
switching and transmission of mixed voice, data and video (sometimes referred to
as "multimedia" information) at varying rates. The ATM format can be used by
many different information systems.
 
                                       19
<PAGE>
    BELL ATLANTIC--Bell Atlantic Corporation.
 
    BELLSOUTH--BellSouth Corporation.
 
    CAPROCK--Caprock Communications Corporation.
 
    CENTRAL OFFICES--The switching centers or central switching facilities for
the Company and other CLECs and/or ILECs.
 
    CLASS V SWITCH(ES)--Central office switching system operated by local
telephone companies.
 
    CO-LOCATION--The ability of a competitor carrier to connect its network to
the local exchange carrier's central offices. Physical co-location occurs when a
competitor carrier places its network connection equipment inside the local
exchange company's central offices. Virtual co-location is an alternative to
physical co-location pursuant to which the local exchange company permits a
competitor carrier to connect its network to the local exchange company's
central offices on comparable terms, even though the competitor carrier's
network connection equipment is not physically located inside the central
offices.
 
    CTIA--Cellular Telecommunications Industry Association.
 
    DIGITAL--A method of storing, processing and transmitting information
through the use of distance electronic or optical pulses that represent the
binary digits 0 and 1. Digital transmission and switching technologies employ a
sequence of these pulses to represent information as opposed to the continuously
variable analog signal. The precise digital numbers minimize distortion (such as
graininess or snow in the case of video transmission, or static or other
background distortion in the case of audio transmission).
 
    DIRECT T-SM---Bundled services and integrated billing offered under its
LOGIX brand name.
 
    DS3 OR DIGITAL SERVICES LEVEL 3--The equivalent of 28 T-1 fiber optic
channels, a standard unit of measurement in the industry.
 
    DOBSON COMMUNICATIONS--Dobson Communications, Inc., the Company's parent.
 
    E'SPIRE--e'spire Communications, Inc. (formerly known as American
Communications Services, Inc.)
 
    EXCEL--Excel Communications, Inc.
 
    FCC--Federal Communications Commission.
 
    GTE--GTE Corporation and its affiliates.
 
    HCF--High cost support funds.
 
    IBM--International Business Machines Corporation.
 
    ICG--ICG Communications, Inc.
 
    ICP--Integrated communications provider.
 
    ILEC--Incumbent local exchange carrier.
 
    INTERCONNECTION--Interconnection of facilities between or among local
exchange carrier, including potential physical co-location of one carrier's
equipment in the other carrier's premises to facilitate such interconnection.
 
    INTERCONNECTION AGREEMENT--The Company's interconnection agreements with SBC
and GTE.
 
    INTEREXCHANGE CARRIER, OR IXC--Usually referred to as long distance
providers. Long distance carriers provide services between local exchanges on an
interstate or intrastate basis. A long distance carrier may offer services over
its own or another carrier's facilities. There are many facilities-based IXCs,
including, AT&T, MCI, WorldCom, Sprint and IXC Communications, Inc., as well as
many resellers that are authorized to provide IXC service.
 
    INTERLATA--Telecommunications services originating in one LATA and
terminating in another LATA.
 
                                       20
<PAGE>
    INTERMEDIA COMMUNICATIONS--Intermedia Communications, Inc.
 
    INTRALATA--Telecommunications services originating and terminating in the
same LATA.
 
    IP--Internet protocol.
 
    ISDN--Integrated service digital network.
 
    ISP (INTERNET SERVICE PROVIDER)--A company that provides subscribers basic
access to the Internet, along with additional services that may include E-mail,
site hosting, web page development, and other Internet-related services, along
with technical support of these services.
 
    LATA (LOCAL ACCESS AND TRANSPORT AREA)--A geographic area composed of
contiguous local exchanges, usually but not always within a single state. There
are approximately 200 LATAs in the United States.
 
    LCI--LCI International Telecom Corporation.
 
    LOCAL COMPETITION ORDER--Adoption by the FCC on August 8, 1996 of rules and
policies which implemented the local competition provisions of the
Telecommunications Act.
 
    LOGIX-TM---The brand name under which the Company 's subsidiary, Logix
Communications Corporation, offers bundled services and integrated billing.
 
    LOCAL EXCHANGE--A geographic area determined by the local exchange carrier
in which calls generally are transmitted without toll charges to the calling or
called party.
 
    LOCAL EXCHANGE CARRIER OR LEC--A company providing local telephone services,
including the RBOCs, GTE and independent companies such as the Company.
 
    MCI--MCI Communications Corporation.
 
    NTS--NTS Communications, Inc.
 
    NYNEX--NYNEX Corporation.
 
    OCC--Oklahoma Corporation Commission.
 
    OKLAHOMA TELECOM ACT--Oklahoma Telecommunications Act of 1997.
 
    OSS--Operations support systems.
 
    OTA--Oklahoma Telephone Association.
 
    OUSF--Oklahoma Universal Service Fund.
 
    PACIFIC BELL--A subsidiary of SBC.
 
    PRICE CAP LECS--Local exchange carriers subject to FCC's price cap rules.
 
    "PUC" OR "PUBLIC UTILITIES COMMISSION"--A state regulatory body, established
in most states, which regulates utilities, including telephone companies
providing intrastate services.
 
    QWEST--Qwest Communications International Inc.
 
    RBOC(S)--The five remaining of the seven original Regional Bell Operating
Companies established by the Department of Justice's 1982 breakup of the Bell
System. The 1982 breakup created two distinct segments of telecommunication
service: local and long distance.
 
    RECIPROCAL COMPENSATION--Compensation paid by a local carrier for
termination of a local call on the network of a competing carrier which is
obligated to pay a comparable charge to terminate traffic on the network of the
first carrier. Reciprocal compensation is distinct from the one-way access
charges by which IXCs compensate LECs for originating and terminating traffic.
 
    RESALE--Resale by a provider of telecommunications services (such as a local
exchange carrier) of such services to other providers or carriers on a wholesale
or a retail basis.
 
                                       21
<PAGE>
    RUS/RTB FACILITY--Loan agreements between and among Dobson Telephone, the
United States of America, Rural Utilities Services ("RUS") and the Rural
Telephone Bank ("RTB").
 
    SBC--SBC Communications, Inc.
 
    SENIOR NOTES--The Company's 12 1/4% Senior Notes due 2008.
 
    SPRINT--Sprint Corporation.
 
    SOUTHERN NEW ENGLAND TELECOMMUNICATIONS--Southern New England
Telecommunications Corporation.
 
    SWBT--Southwestern Bell, a subsidiary of SBC.
 
    SWITCH--Sophisticated computer that accepts instructions from a caller in
the form of a telephone number. Like an address on an envelope, the numbers tell
the switch where to route the call. The switch opens or closes circuits or
selects the paths or circuits to be used for transmission of information.
Switching is a process of interconnecting circuits to form a transmission path
between users. Switches allow local telecommunications service providers to
connect calls directly to their destination, while providing advanced features
and recording connection information for future billing.
 
    TELECOMMUNICATIONS ACT--The Telecommunications Act of 1996.
 
    SYSCOMM--SysComm Design, Inc., a Texas based customer premise equipment
lessor and supplier.
 
    SYSCOMM ACQUISITION--The Company's acquisition of substantially all of the
assets of SysComm for $4.1 million.
 
    TELEPORT--Teleport Communications Group, Inc.
 
    TELIGENT--Teligent Inc.
 
    UNBUNDLED NETWORK ELEMENTS--Elements of a telecommunications services
provider's network, including network facilities, equipment, features, functions
and capabilities.
 
    UNIVERSAL SERVICE ORDER--An order released by the FCC on May 8, 1997 which
established an expanded federal universal service subsidy regime.
 
    US WEST--US WEST Communications, Inc.
 
    USF--Universal service funds.
 
    VSAT--Very small aperture terminal with a low band width.
 
    WILLRUSS--WillRuss Limited Liability Company, owner of the building from
which the Company leases its headquarters.
 
    WINSTAR--Winstar Communications, Inc.
 
    WORLDCOM--WorldCom Network Services, Inc.
 
    WRTA--Western Rural Telephone Association.
 
    ZENEX ACQUISITION--The Company's acquisition of certain long distance
customers and related assets of Zenex for approximately $4.7 million.
 
    ZENEX--Zenex Communications, Inc., an Oklahoma City based reseller of long
distance and value-added services.
 
                                       22
<PAGE>
ITEM 2. PROPERTIES
 
    Logix maintains its corporate headquarters in Oklahoma City, Oklahoma. The
Company leases this space, which is approximately 30,000 square feet, at a
monthly rental of $25,000. The Company also owns 32 switch sites and leases 19
sales and administrative offices and seven switch sites at aggregate annual
rentals of approximately $1.5 million. The Company anticipates that it will
review these leases from time to time and may, in the future, lease or acquire
new facilities as needed. The Company expects to lease or purchase additional
sales and administrative office spaces and switch sites in connection with the
expansion of its business. The Company does not anticipate that it will
encounter any material difficulties in meeting its future needs for any leased
space.
 
ITEM 3. LEGAL PROCEEDINGS
 
    The Company is not currently involved in any pending legal proceedings that
individually or in the aggregate are material to the Company. The Company is a
party to routine filings and customary regulatory proceedings with the FCC, OCC
and other state PUCs relating to its operations.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    None.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
    There is no established trading market for the Company's Common Stock. As of
March 15, 1999, Dobson Operating Company, a subsidiary of Dobson Communications,
was the only shareholder of the Company's Common Stock. The Company sold no
equity securities during 1998.
 
    During 1998, the Company granted options to 13 persons to purchase an
aggregate of 1,652,500 shares of the Company's common stock pursuant to the
Company's stock option plan. Each of the persons to whom the options were
granted was a key employee, director or officer of the Company, and each person
represented that the shares to be acquired upon exercise of the option would be
acquired for investment and not with a view to distribution. The Company relied
upon the exemption from registration contained in Section 4(2) of the Securities
Act of 1933, as amended, in connection with the issuance of such options.
 
    On June 12, 1998, the Company issued $350 million aggregate principal amount
of its 12 1/4% Senior Notes due 2008 (the "Senior Notes") in exchange for $350
million in cash. All of the notes were issued pursuant to the exemption provided
by Section 4(2) of the Securities Act of 1933, as amended. The initial
purchasers resold the Notes in reliance upon Rule 144A promulgated under the
Securities Act of 1933.
 
                                       23
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
 
    The following table sets forth certain historical consolidated financial
data for Logix. The selected consolidated financial data as of and for the years
ended December 31, 1994, 1995, 1996, 1997 and 1998 were derived from the
Company's audited consolidated financial statements which have been audited by
Arthur Andersen LLP, independent public accountants. The historical consolidated
financial data should be read in conjunction with Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
Company's audited consolidated financial statements and the related notes
thereto included in Item 8, Financial Statements and Supplementary Data.
 
<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                      --------------------------------------------------------
                                                        1994         1995        1996       1997       1998
                                                      ---------  ------------  ---------  ---------  ---------
                                                              ($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                   <C>        <C>           <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
  Revenue:
    ILEC............................................  $  12,316  $     13,697  $  14,365  $  15,361  $  15,604
    ICP(3)..........................................      1,555         2,568      3,543      4,816     52,099
                                                      ---------  ------------  ---------  ---------  ---------
      Total revenue.................................     13,871        16,265     17,908     20,177     67,703
  Operating expenses:
    Cost of service.................................      2,195         2,471      2,823      3,269     41,879
    Selling, general and administrative.............      6,158         6,532      7,815      8,735     33,539
    Depreciation and amortization...................      3,649         4,124      4,479      4,931     12,387
                                                      ---------  ------------  ---------  ---------  ---------
      Total operating expenses......................     12,002        13,127     15,117     16,935     87,805
                                                      ---------  ------------  ---------  ---------  ---------
  Operating income (loss)...........................      1,869         3,138      2,791      3,242    (20,102)
  Interest expense..................................     (1,775)       (1,980)    (2,194)    (2,459)   (25,906)
  Interest income...................................          5             5         --         15      5,794
  Other income (expense), net.......................       (258)         (272)       (83)        88        142
                                                      ---------  ------------  ---------  ---------  ---------
  Income (loss) before income taxes, extraordinary
    items and cumulative effect of change in
    accounting principle............................       (159)          891        514        886    (40,072)
  Income tax (provision) benefit....................         49          (391)      (183)      (337)     1,271
                                                      ---------  ------------  ---------  ---------  ---------
  Income (loss) before extraordinary items and
    cumulative effect of change in accounting
    principle.......................................       (110)          500        331        549    (38,801)
  Extraordinary item, net of income taxes(1)........         --            --         --       (217)        --
                                                      ---------  ------------  ---------  ---------  ---------
  Income (loss) before cumulative effect of change
    in accounting principle.........................       (110)          500        331        332    (38,801)
  Cumulative effect of change in accounting
    principle, net of income taxes(2)...............         --            --         --         --       (699)
                                                      ---------  ------------  ---------  ---------  ---------
  Net income (loss).................................  $    (110) $        500  $     331  $     332  $ (39,500)
                                                      ---------  ------------  ---------  ---------  ---------
                                                      ---------  ------------  ---------  ---------  ---------
  Basic net income (loss) per common share:
    Before extraordinary expense....................      (.002)         .007       .005       .008      (.545)
    Extraordinary expense...........................         --            --         --      (.003)        --
    Cumulative effect of change in accounting
      principle.....................................         --            --         --         --      (.009)
                                                      ---------  ------------  ---------  ---------  ---------
                                                      $   (.002) $       .007  $    .005  $    .005  $   (.554)
                                                      ---------  ------------  ---------  ---------  ---------
                                                      ---------  ------------  ---------  ---------  ---------
 
  Basic weighted average common shares
    outstanding.....................................  71,250,000   71,250,000  71,250,000 71,250,000 71,250,000
                                                      ---------  ------------  ---------  ---------  ---------
                                                      ---------  ------------  ---------  ---------  ---------
</TABLE>
 
                                       24
<PAGE>
 
<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
                                                                   -----------------------------------------------------
                                                                     1994       1995       1996       1997       1998
                                                                   ---------  ---------  ---------  ---------  ---------
                                                                                     ($ IN THOUSANDS)
<S>                                                                <C>        <C>        <C>        <C>        <C>
OTHER FINANCIAL DATA:
  Adjusted EBITDA(4):
    ILEC.........................................................  $   4,791  $   5,550  $   5,532  $   7,031  $   8,414
    ICP..........................................................        727      1,712      1,738      1,142    (16,129)
                                                                   ---------  ---------  ---------  ---------  ---------
      Total......................................................  $   5,518  $   7,262  $   7,270  $   8,173  $  (7,715)
                                                                   ---------  ---------  ---------  ---------  ---------
                                                                   ---------  ---------  ---------  ---------  ---------
  Income (loss) before income taxes extraordinary items and
    cumulative effect of change in accounting principle
    ILEC.........................................................  $     481  $     894  $     925  $   2,475  $   4,662
    ICP..........................................................       (640)        (3)      (411)    (1,589)   (44,734)
                                                                   ---------  ---------  ---------  ---------  ---------
      Total......................................................  $    (159) $     891  $     514  $     886    (40,072)
                                                                   ---------  ---------  ---------  ---------  ---------
                                                                   ---------  ---------  ---------  ---------  ---------
  Cash flow provided by (used in):
    Operating activities.........................................  $   2,459  $   3,659  $   6,349  $   3,704  $ (10,815)
    Investing activities.........................................     (5,337)    (4,191)    (5,485)    (3,460)  (195,751)
    Financing activities.........................................      3,299       (239)      (619)      (619)   237,988
    Capital expenditures.........................................  $   2,648  $   2,357  $   3,902  $   5,442  $  55,220
 
OTHER DATA (AT PERIOD END):
  Access lines...................................................     11,322     11,806     11,959     12,724     52,265
  Route miles(5).................................................        485        661        690        692        819
  Fiber miles(6).................................................     10,817     14,285     14,633     14,698     21,186
  Switches.......................................................         34         34         34         35         38
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                    DECEMBER 31,
                                                                                                        1998
                                                                                                  -----------------
                                                                                                  ($ IN THOUSANDS)
<S>                                                                                               <C>
BALANCE SHEET DATA:
  Cash and cash equivalents.....................................................................      $  31,675
  Property, plant and equipment, net............................................................         89,508
  Total assets..................................................................................        392,421
  Total debt....................................................................................        377,638
  Stockholder's deficit.........................................................................        (19,423)
</TABLE>
 
------------------------------
 
(1) Extraordinary items reflect expense associated with early extinguishment of
    debt, net of income tax benefit.
 
(2) Cumulative effect of change in accounting principle reflects the charge
    taken, net of income tax benefit, as a result of the implementation of AICPA
    Statement of Position 98-5 "Reporting on the Costs of Start-up Activities,"
    effective January 1, 1998.
 
(3) ICP revenue includes network management services provided to affiliates of
    Logix. These services accounted for $100,000, $67,000, $113,000, $124,000,
    and $112,000 of ICP revenue in 1994, 1995, 1996, 1997, and 1998,
    respectively.
 
(4) Adjusted EBITDA represents earnings before interest expense, income taxes,
    depreciation and amortization, other income, extraordinary items, and
    changes in accounting principles. Adjusted EBITDA is provided because it is
    a measure commonly used in the industry and by the Company to assess a
    company's operating performance and its ability to incur or service debt. In
    addition, the indenture governing the Notes contains certain covenant
    requirements that are based on Adjusted EBITDA. Adjusted EBITDA is not
    derived pursuant to generally accepted accounting principles and should not
    be construed as an alternative to net income, as a measure of performance,
    or to cash flows, as a measure of liquidity. Adjusted EBITDA, as measured by
    the Company, may differ significantly from similarly named measurements of
    other companies and, as a consequence, may not provide any degree of
    reliable comparability. The calculation of Adjusted EBITDA does not include
    the Company's commitments for capital expenditures or payments of debts and
    should not be deemed to represent funds available to the Company.
 
(5) Route miles refers to the number of miles over which fiber optic cables are
    installed.
 
(6) Fiber miles refers to the number of route miles multiplied by the number of
    fibers installed along that path.
 
                                       25
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
GENERAL
 
    Logix is a leading provider of integrated local, long distance, data and
other telecommunications services to small and medium-sized business customers
throughout the Southwest United States. Since 1936, the Company has provided
incumbent local exchange carrier ("ILEC") services in Oklahoma. In addition,
Logix operates long-haul fiber optic facilities in Oklahoma, Texas, and
Colorado, providing wholesale long-haul services. Logix currently offers
switch-based services as an integrated communications provider ("ICP") services
in Oklahoma City, Tulsa, Houston, Dallas, Ft. Worth, San Antonio, and Austin.
 
REVENUE
 
    ILEC OPERATIONS.  The Company's predecessor began providing ILEC services in
1936, and the Company currently owns and operates nine contiguous exchanges in
western Oklahoma and three contiguous exchanges adjacent to and east of the
Oklahoma City metropolitan area. As of December 31, 1996, 1997 and 1998, the
ILEC operations served 11,959, 12,633, and 13,423 access lines, respectively.
Logix's local exchange revenues consist of (i) end user revenue, which includes
charges for local service and enhanced services such as call waiting and call
forwarding; (ii) access revenue, which is paid by IXCs for providing access from
the IXCs point of presence to the end user who makes or receives a long distance
call; and (iii) support revenue, which is paid by federal and state agencies to
companies, such as Logix, which operate in areas where, due to factors such as
geographic conditions or subscriber density, the cost to provide service is
higher than normal.
 
    Support revenue, which consists of HCF funds from state agencies and USF
funds from federal and state agencies, accounted for approximately 36.1%, 35.6%,
and 31.1% of Logix's revenue from its ILEC operations, or $5.2 million, $5.5
million, and $4.9 million, for the years ended December 31, 1996, 1997, and
1998, respectively.
 
    The Telecommunications Act potentially impacts the Company's sources of
support revenue. Under previous regulation, access charges contained implicit
support for high cost areas. Regulations adopted pursuant to the
Telecommunications Act would remove implicit support from access charges and
place more emphasis for such support on HCF/USF. In May 1997, the FCC adopted
changes that may, over time, reduce or eliminate subsidies to telephone
companies in areas where the cost of connecting and maintaining phone lines is
demonstrated to be above the industry or area norm. The Company will continue to
pursue its strategy to lessen the impact of any future regulatory changes by
reducing its operating costs through consolidation of operational functions at
the Company level in order to achieve economies of scale.
 
    ICP OPERATIONS.  The Company began offering facilities-based ICP services in
October 1997 and currently provides these services to customers in major markets
in Oklahoma and Texas. The Company's ICP operation generates revenue from local
exchange, long distance, enhanced data, Internet, intranet and extranet
services, private line, integration services and fiber operation services. As of
December 31, 1998, the Company's ICP operations served 38,842 access lines. The
Company typically obtains a one-year contract with minimum monthly usage from
its business ICP customers.
 
    ICP revenue includes network management services provided to Company
affiliates. Network management services accounted for $113,000, $124,000 and
$112,000 of ICP revenue in 1996, 1997 and 1998, respectively. ICP revenues also
include revenue from fiber services, which are generated from three different
sources of long-haul transport services including: (i) "carrier's carrier"
services, (ii) private businesses and government agencies network services, and
(iii) services for Dobson Communications' other subsidiaries.
 
    For the years ended December 31, 1996, 1997, and 1998, approximately 49%,
41% and 31%, respectively, of Logix's gross fiber revenue was attributable to
NTS and approximately 34%, 25% and 33%,
 
                                       26
<PAGE>
respectively, of its fiber revenue was attributable to Dobson Communications'
other subsidiaries. The total number of DS3 equivalent fiber lines leased as of
December 31, 1996, 1997, and 1998 were 46, 53, and 94, respectively.
 
    Although the Company currently has excess capacity and does not currently
plan to construct any significant amount of additional fiber optic mileage, the
Company will seek to expand its network through interconnect agreements to
access other major population centers (including routes which may be attractive
to major carriers). The Company believes that the pricing of fiber for its route
may decline over the next few years as pricing is declining in the industry
generally. However, the Company believes that pricing declines will be modest on
its route due to its short distance and unique nature with relatively few
competing providers.
 
    The Company incurred operating losses and negative cash flows from
operations and Adjusted EBITDA related to its ICP services in 1998. Such
negative cash flows from operations and Adjusted EBITDA are expected to continue
until Logix develops and expands its ICP operations and subscriber base. These
losses were primarily a result of selling, general and administrative ("SG&A")
expenses. As a result of the continued expansion of its ICP operations, the
Company will continue to incur significant increases in expenses associated with
these activities. The Company also expects that the addition of ICP services
will have an adverse impact on its combined gross margins, because the gross
margins on the ICP services are expected to be lower than the gross margins on
its ILEC operations.
 
    The Company offers ICP services at prices that are competitive to the ILECs.
The Company believes that while pricing is an important element in the marketing
of their services, small and medium-sized businesses are also focused on the
benefits from customer care, bundled telecommunications services with one point
of contact for sales and service, and consistent quality of service when making
their purchase decisions.
 
    During the past several years the market prices for many telecommunications
services have been declining. The Company believes that this trend is likely to
continue and will have a negative effect on the Company's gross margins that may
not be offset completely by savings from the decrease in the Company's cost of
service.
 
    Current industry statistics demonstrate that there is a significant churn
for customers within the industry. The Company believes that the churn is
especially high when customers are buying resold services or only long distance
services. The Company believes that by offering an integrated package of
telecommunications services, and by providing superior customer care, it will be
able to minimize customer churn.
 
COSTS AND EXPENSES
 
    The Company's primary expense categories include cost of service, SG&A, and
depreciation and amortization.
 
    Cost of service for Logix's ILEC operations consists primarily of costs
associated with operating and maintaining the Company's facilities.
 
    Cost of service for the ICP operations consists of fixed costs for leased
lines, the variable costs of transport origination, termination and access
services provided through ILECs and other telecommunications companies, and
internal costs associated with operating and maintaining the Company's
facilities.
 
    The Company intends to deploy digital switching platforms with local and
long distance capability and initially lease fiber trunking capacity from ILECs
and CLECs to connect the Company's switches with its transmission equipment
co-located in ILEC central offices. The Company will lease unbundled loop and
high capacity digital lines from the ILECs to connect its customers and other
carriers' networks to the Company's network. These charges vary by ILEC and are
regulated by state authorities pursuant to the Telecommunications Act. ILECs
typically charge both a startup fee as well as a monthly recurring fee for
 
                                       27
<PAGE>
use of their central offices for co-location. The Company will use its own fiber
network, where available, to carry long distance traffic and will also enter
into resale agreements with long distance carriers for transmission services.
Such agreements typically provide for the resale of long distance services on a
per-minute basis and may contain minimum volume commitments. The Company may be
obligated to pay underutilization charges in the event it over-estimates its
requirements; however, in the event it underestimates its need for transmission
capacity, the Company may be required to obtain capacity through more expensive
means. Also, the Company will need to increase the capacity of its switches and
add additional ANP devices and switches as market demand warrants.
 
    SG&A includes all infrastructure costs such as selling, customer support,
corporate administration, personnel, and network maintenance. Selling expenses
include commissions for the Company's sales program. Commissions are paid to
direct sales persons for new business generated with additional incentives for
multiple service offerings and long-term contracts. Independent sales agents
receive commissions for generating new sales and ongoing sales to existing
customers. As the Company's customer base grows, and as the Company continues to
expand into new geographic markets, adds new sales offices and facilities and
enlarges its current product offerings, the cost of services and SG&A are
expected to increase substantially.
 
    Depreciation and amortization relates primarily to switching equipment,
facilities, computers and software, and goodwill, and is expected to increase as
the Company incurs significant capital expenditures to install additional
switches.
 
RESULTS OF OPERATIONS
 
    In the text below, financial statement numbers have been rounded; however,
the percentage changes are based on the actual financial statements.
 
    YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
 
    REVENUE.  For the year ended December 31, 1998, total revenue increased
$47.5 million, or 235.5% to $67.7 million from $20.2 million in 1997. The
following table sets forth the components of the Company's revenue for the years
ended December 31:
 
<TABLE>
<CAPTION>
                                                      1997       1998
                                                    ---------  ---------
                                                      ($ IN THOUSANDS)
<S>                                                 <C>        <C>
ILEC..............................................  $  15,361  $  15,604
ICP...............................................      4,816     52,099
                                                    ---------  ---------
                                                    $  20,177  $  67,703
                                                    ---------  ---------
                                                    ---------  ---------
</TABLE>
 
    ILEC.  ILEC revenue increased $.2 million, or 1.6%, to $15.6 million in
1998, compared to $15.4 million for the year ended December 31, 1998, due
primarily to an increase in toll charges and an increase in the number of access
lines from 12,633 as of December 31, 1997, to 13,423 as of December 31, 1998.
 
    ICP.  ICP revenue increased $47.3 million to $52.1 million for the year
ended December 31, 1998, from $4.8 million for 1997, primarily due to the
acquisition of American Telco combined with growth in local and long distance
revenue, equipment sales, and fiber operation revenue. Excluding the acquisition
of American Telco, revenue growth was principally due to access line growth,
increases in the number of long distance minutes of use sold, increased
equipment sales, and increased sales by the company's fiber operations. Fiber
revenues grew by approximately 29.3% primarily due to the addition of new
customers. At December 31, 1998, the total number of leased fiber lines was
equivalent to 94 DS3s compared to 53 DS3s equivalents at December 31, 1997.
 
                                       28
<PAGE>
    COST OF SERVICE.  For the year ended December 31, 1998, the total cost of
service increased $38.6 million, to $41.9 million from $3.3 million in the
comparable period of 1997.
 
    The following table sets forth the components of the Company's cost of
service for the years ended December 31:
 
<TABLE>
<CAPTION>
                                                       1997       1998
                                                     ---------  ---------
                                                       ($ IN THOUSANDS)
<S>                                                  <C>        <C>
ILEC...............................................  $   1,868  $   1,961
ICP................................................      1,400     39,917
                                                     ---------  ---------
    Total..........................................  $   3,268  $  41,878
                                                     ---------  ---------
                                                     ---------  ---------
</TABLE>
 
    ILEC.  Cost of ILEC service increased $.1 million, or 5.0%, to $2.0 million
for the year ended December 31, 1998, from $1.9 million for the year ended
December 31, 1997.
 
    ICP.  Cost of ICP service increased $38.5 million to $39.9 million for the
year ended December 31, 1998, from $1.4 million for 1997 due to increased
engineering costs related to the decommissioning of the ILEC DMS-10S and
installation of remotes to switch the ILEC traffic off of the ICP Oklahoma City
DMS-500. The increase was primarily due to the acquisition of American Telco
combined with increases in wholesale local, long distance, and equipment
charges. Excluding the acquisition of American Telco, wholesale cost increases
were due to growth in the number of access lines and long distance minutes of
use sold combined with increases in equipment sales. Included in ICP cost of
service is $.1 million of costs related to network management services provided
to affiliates of Dobson Communications during 1998.
 
    SELLING, GENERAL AND ADMINISTRATIVE.  For the year ended December 31, 1998,
SG&A costs increased $24.8 million, or 284.0%, to $33.5 million compared to $8.7
million for the year ended December 31, 1997. The increase was primarily due to
increased revenue combined with the acquisition of American Telco combined with
increased salary costs resulting from additional sales, administrative and
marketing personnel in the Company's ICP operations. Total employees increased
from 107 at December 31, 1997, to 743 at December 31, 1998. American Telco had
approximately 300 employees when the Company acquired it in June 1998.
 
    DEPRECIATION AND AMORTIZATION EXPENSE.  For the year ended December 31,
1998, depreciation and amortization expense increased $7.5 million, or 151.2%,
to $12.4 million from $4.9 million for the year ended December 31, 1997. The
ILEC segment's depreciation remained relatively consistent from 1997 to 1998
with a $.2 million decrease to $3.1 million, from $3.3 million. The ICP
segment's depreciation and amortization expense increased $7.6 million, from
$1.7 million, to $9.3 million. This increase is primarily a result of
depreciation and amortization on assets purchased for the Company's recently
launched Logix business and assets acquired, including goodwill, in its
acquisition of American Telco.
 
    OPERATING INCOME (LOSS).  As a result of the items discussed above,
operating income for the year ended December 31, 1998, decreased $23.3 million
to a loss of $20.1 million from an income of $3.2 million in 1997.
 
    INTEREST INCOME.  Interest income for the year ended December 31, 1998
increased $5.8 million, to $5.8 million from a minimal amount earned for the
year ended December 31, 1997. The increase in interest income was attributable
to funds held in escrow and cash on hand from the issuance of the 12 1/4% Senior
Notes due 2008.
 
    INTEREST EXPENSE.  Interest expense for the year ended December 31, 1998
increased $23.4 million, to $25.9 million from $2.5 million for the year ended
December 31, 1997. The ILEC segment's interest expense remained consistent at
$1.3 million in 1997 and 1998. The ICP segment's interest expense
 
                                       29
<PAGE>
increased $23.4 million, to $24.6 million in 1998, from $1.2 million in 1997.
The increase related to increased interest expense as a result of the issuance
of the Senior Notes.
 
    INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS.  As a result of the
items discussed above, income before income taxes and extraordinary items,
decreased $41.0 million to a loss of $40.1 million from an income of $.9 million
in 1997.
 
    ILEC.  Income before income taxes and extraordinary items from the Company's
ILEC operations increased $2.2 million to $4.7 million for the year ended
December 31, 1998 from $2.5 million in 1997. This is primarily due to increased
revenue combined with decreased SG&A costs applicable to the ILEC business as a
result of the separation of the ILEC business from Dobson Communications and
changes in the allocation procedures for certain management expenses.
 
    ICP.  Income before income taxes and extraordinary items from the Company's
ICP operations decreased $43.1 million to a loss of $44.7 million for 1998 from
a loss of $1.6 million in 1997. This is a result of increased SG&A from the
start up of the ICP operations and increased depreciation and interest expense
related to funding the American Telco Acquisition.
 
    EXTRAORDINARY EXPENSE.  Extraordinary expense in 1997 of $.2 million is due
to the write-off of deferred debt costs associated with the the Company's fiber
operations.
 
    CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE.  Cumulative effect of
change in accounting principle for the year ended December 31, 1998 reflects the
charge taken as a result of implementation of AICPA Statement of Position 98-5
"Reporting on the Costs of Start-up Activities" on January 1, 1998.
 
    YEAR ENDED DECEMBER 31, 1997, COMPARED TO YEAR ENDED DECEMBER 31, 1996
 
    REVENUE.  For the year ended December 31, 1997, total revenue increased $2.3
million, or 12.7%, to $20.2 million from $17.9 million in 1996. The following
table sets forth the components of Logix's revenue for the years ended December
31:
 
<TABLE>
<CAPTION>
                                                      1996       1997
                                                    ---------  ---------
                                                      ($ IN THOUSANDS)
<S>                                                 <C>        <C>
ILEC..............................................  $  14,365  $  15,361
ICP...............................................      3,543      4,816
                                                    ---------  ---------
                                                    $  17,908  $  20,177
                                                    ---------  ---------
                                                    ---------  ---------
</TABLE>
 
    ILEC.  ILEC revenue increased $1.0 million, or 6.9%, to $15.4 million for
1997 compared to $14.4 million for 1996 due primarily to a $.3 million increase
in support revenue, an increase in toll charges and an increase in the number of
access lines from 11,959 as of December 31, 1996 to 12,633 as of December 31,
1997.
 
    ICP.  The Company launched its LOGIX-TM- operations in October 1997,
generating $.2 million of revenue. Of the $.2 million, $.1 million of service
revenue primarily related to equipment, local and long distance sales, and $.1
million relates to network management services provided to affiliates of Dobson
Communications. The remaining $4.6 million in 1997 relates to revenue from the
Company's fiber operations, as compared to $3.4 million in 1996. The increase in
fiber revenues of 33.8% is due primarily to the addition of a new customer that
generated $.7 million of revenue and additional revenue of $.5 million from
existing customers in 1997. At December 31, 1997, the number of leased fiber
lines was equivalent to a total of 53 DS3s compared to 46 at December 31, 1996.
 
    COST OF SERVICE.  For the year ended December 31, 1997, the total cost of
service increased $.5 million, or 15.8%, to $3.3 million from $2.8 million in
1996.
 
                                       30
<PAGE>
    The following table sets forth the components of the Company's cost of
service for the years ended December 31:
 
<TABLE>
<CAPTION>
                                                        1996       1997
                                                      ---------  ---------
                                                        ($ IN THOUSANDS)
<S>                                                   <C>        <C>
ILEC................................................  $   1,877  $   1,868
ICP.................................................        946      1,400
                                                      ---------  ---------
    Total...........................................  $   2,823  $   3,268
                                                      ---------  ---------
                                                      ---------  ---------
</TABLE>
 
    ILEC.  Cost of ILEC service remained consistent at $1.9 million for both
1997 and 1996. As a percentage of ILEC revenue, cost of ILEC service decreased
slightly from 13.1% in 1996 to 12.2% in 1997.
 
    ICP.  Cost of ICP service increased $.5 million to $1.4 million in 1997 from
$.9 million in 1996. Cost of CLEC service associated with the Company's October
1997 launch of its LOGIX-TM- operations totaled $.4 million. These costs
primarily consisted of wholesale charges from third party services providers and
salaries for technical personnel. Included in the cost of services for the ICP
operations is $.4 million for both 1996 and 1997, respectively, relating to
network management services provided to affiliates of Dobson Communications.
Cost of service for the Company's fiber operations remained relatively
consistent from 1996 to 1997, at $.6 million and $.7 million, respectively.
 
    SELLING, GENERAL AND ADMINISTRATIVE.  For the year ended December 31, 1997,
SG&A costs increased $.9 million, or 11.8%, to $8.7 million in 1997 from $7.8
million in 1996. The increase was primarily due to increased salary costs
resulting from additional administrative and marketing personnel in the
Company's ICP operations. As a percentage of total revenue, SG&A costs decreased
to 43.3% in 1997 from 43.6% in 1996.
 
    DEPRECIATION AND AMORTIZATION EXPENSE.  For the year ended December 31,
1997, depreciation and amortization expense increased $.4 million, or 10.1%, to
$4.9 million from $4.5 million in 1996. The ILEC segment's depreciation and
amortization expense remained consistent between periods at $3.3 million. The
ICP segment's depreciation and amortization expense increased $.4 million, or
26.3% to $1.7 million as of December 31, 1997. This increase was primarily a
result of depreciation and amortization on assets purchased for its recently
launched LOGIX-TM- business and fixed asset additions in its fiber operations.
 
    OPERATING INCOME (LOSS).  As a result of the items discussed above,
operating income for the year ended December 31, 1997, increased $.4 million to
$3.2 million from $2.8 million in 1996.
 
    INTEREST EXPENSE.  Interest expense for the year ended December 31, 1997
increased $.3 million, or 12.1%, to $2.5 million from $2.2 million for 1996. The
ILEC segment's interest expense remained consistent between periods at $1.3
million. The ICP segment's interest expense increased $.3 million, or 36.2%, to
$1.2 million in 1997 from $.9 million in 1996. The increase was a result of the
increased outstanding portion of the revolving credit facility and related
interest expense payable to Dobson Communications.
 
    INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS.  As a result of the
items discussed above, income before income taxes and extraordinary items for
the year ended December 31, 1997, increased $.4 million to $.9 million from $.5
million in 1996.
 
                                       31
<PAGE>
    ILEC.  Income before income taxes and extraordinary items from the Company's
ILEC operations increased $1.6 million to $2.5 million for the year ended
December 31, 1997 from $.9 million in 1996. The majority of this increase is
from increased revenues of approximately $1.0 million. The remainder of the
increase in income before taxes and extraordinary items is a result of a
decrease in SG&A costs applicable to the ILEC operations.
 
    ICP.  Income before income taxes and extraordinary items from the Company's
ICP operations decreased $1.2 million to a loss of $1.6 million for the year
ended December 31, 1997 from a loss of $.4 million in 1996. This is a result of
increased SG&A from the start up of the ICP operations.
 
    EXTRAORDINARY EXPENSE.  Extraordinary expense in 1997 of $.2 million is due
to the write-off of deferred debt costs associated with the Company's ICP
operations.
 
IMPACT OF YEAR 2000 ISSUE
 
    In April 1998, Logix Communications in conjunction with Dobson
Communications established a multi-disciplined team to perform a Year 2000
impact analysis for the corporation. The team consists of representatives from
each of the lines of business, as well as representatives from key corporate
departments and is headed by a full time Year 2000 compliance manager. The team
created a Year 2000 assessment methodology which brought a structured approach
to the assessment and management reporting process.
 
    To date, Logix Communications has completed an inventory of Logix's
automated systems and services and an impact analysis that identified
significant risk areas by line of business, identified specific compliance
requirements, and estimated costs and completion dates for affected systems.
 
    The Company does not have large scale legacy applications used by many
telecommunications providers. From an information systems standpoint, the
Company has historically relied on outsourcing relationships for most of its
business and operational support applications. Those applications that have not
been outsourced to service providers have been deployed using packaged software
from outside vendors. As a result, the remediation approach is not focused on a
large scale in-house effort, but on identifying those systems and services that
are not currently Year 2000 compliant and either upgrading to a compliant
version or replacing with an alternative compliant product or service. The
results of the impact analysis revealed that for most of the Company's
information systems, services and telecommunications infrastructure, Year 2000
compliant releases will be included as a part of existing maintenance and/or
service agreements at no additional cost to the Company and should be in place
by the second quarter of 1999. Management has also focused on evaluating
software systems of acquired companies. Management has determined that American
Telco's OSS is not Year 2000 compliant; however, the Company believes its new
OSS which will replace American Telco's, will be Year 2000 compliant and will be
in place by 2000. The total costs identified to upgrade or replace those systems
that are not Year 2000 compliant and will not be upgraded through existing
maintenance or service agreements are approximately $.1 million. Additionally,
such costs will be expensed as incurred, which could have an adverse effect on
the current operating results.
 
    The Company will continue to analyze systems and services that utilize date
embedded codes that may experience operational problems when the Year 2000 is
reached. The Company will continue communicating with third party vendors of
systems software and equipment, suppliers of telecommunications capacity and
equipment, customers and others with which it does business to coordinate Year
2000 compliance. To further mitigate risks, if a critical vendor does not
provide adequate assurance that its product is Year 2000 compliant through test
plans, test results or third party audit results, the Company will either
replace the product with one that has provided proof of compliance or will
conduct its own Year 2000 tests. In addition, the Company will conduct its own
Year 2000 tests on mission critical systems as their Year 2000 compliant
versions are released by vendors.
 
                                       32
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
 
    The Company has historically generated positive cash flow from operations
and Adjusted EBITDA in its ILEC business and historically financed its ILEC
business through government loans. The Company's ILEC business has also
historically generated income before income taxes, extraordinary items and
cumulative effect of change in accounting principle. The Company's ILEC business
receives support revenue from federal and state agencies that accounted for
approximately 36.1%, 35.6%, and 31.1% of its revenues for the years ended
December 31, 1996, 1997 and 1998. This support revenue contributes significantly
to the ILEC's positive cash flow from operations, Adjusted EBITDA and income
before income taxes, extraordinary items and cumulative effect of change in
accounting principle.
 
    The Company has experienced negative cash flow from operations and Adjusted
EBITDA and a loss before income taxes, extraordinary items and cumulative effect
of change in accounting principle in 1997 and 1998 in its ICP business. The
Company expects negative cash flow and Adjusted EBITDA on a consolidated basis
for a substantial portion of 1999 and could experience negative cash flow and
Adjusted EBITDA for all of 1999. These negative cash flows from operations and
Adjusted EBITDA and loss before income taxes, extraordinary items and cumulative
effect of change in accounting principle are primarily the result of selling,
general and administrative expenses incurred as the Company works to expand this
business. The Company will continue to incur losses before income taxes,
extraordinary items and cumulative effect of change in accounting principle and
will continue to generate negative cash flow from operations and Adjusted EBITDA
until it develops and expands its ICP operations and customer base.
 
    The successful implementation of the Company's strategy, including the
expansion of its networks and customer base, and significant and sustained
growth in the Company's cash flows is necessary for the Company to meet its debt
service requirements, including its obligations on the Senior Notes.
 
    The Company's net cash provided by (used in) operating activities was $6.3
million, $3.7 million, and $(10.8) million for the years ended December 31,
1996, 1997, and 1998, respectively. The Company's net cash used in investing
activities was $5.5 million, $3.5 million, and $195.8 million for the years
ended December 31, 1996, 1997, and 1998, respectively, primarily related to
capital expenditures, and the funding of the American Telco Acquisition. Net
cash provided by (used in) financing activities was $(.6) million, $(.6) million
and $238.0 million for the years ended December 31, 1996, 1997 and 1998. The net
cash provided by financing activities during 1998 primarily resulted from the
issuance of the Senior Notes offset by the purchase of restricted investments to
fund the first six semi-annual interest payments of the Senior Notes. The net
cash used in financing activities during the years ended December 31, 1996 and
1997 primarily resulted from repayments of long-term debt offset by proceeds
from long-term debt.
 
    Capital expenditures (excluding cost of acquisitions) for the years ended
December 31, 1996, 1997, and 1998 were $3.9 million, $5.4 million and $55.2
million, respectively. The Company expects its capital expenditures (excluding
cost of acquisitions) to total approximately $41 million for 1999, of which $31
million relates to the ICP operations. The capital expenditures will be
primarily for the purchase of: 1) remote switching equipment for the ILEC to
enable switching of the ILEC off of the Oklahoma City DMS 500; 2) customer
premise equipment channel banks required to service Direct T-SM- customers; 3)
switches and related equipment and infrastructure enhancements, including
expenditures for limited co-location equipment and space ("co-locates"); 4)
expenditures related to the replacement of OSS and back office systems. The
Company may also expand its rollout and expenditures for co-locates in 1999,
which could add up to an additional $30 million in capital expenditures
depending upon certain regulatory decisions regarding co-locates and timing. The
Company currently does not plan to add any significant amount of fiber optic
mileage to its long-haul network through construction, although it will seek to
expand to additional cities through interconnection agreements with other
carriers and/or long term buying arrangements of fiber optic capacity. Continued
significant capital expenditures for the ICP operations are expected to be made
after 1999, primarily for customer premise equipment, maintenance, switch
expansion and/or upgrades and co-locates. The amount and timing of capital
expenditures may differ materially from
 
                                       33
<PAGE>
the foregoing estimate depending on numerous factors, including the rate at
which the Company expands and develops its networks and customer base, the
Company's ability to negotiate favorable prices for purchases of equipment and
to acquire and integrate necessary OSS and other back office systems, whether
the Company consummates additional acquisitions and factors beyond the Company's
control, such as economic conditions, competition, market and regulatory
developments and availability of capital.
 
    In May 1998 the Company entered into a two year carrier service agreement
with Sprint for long distance capacity which provides for a minimum commitment
of $9.75 million, subject to upward adjustment depending on actual use. In
connection with the Zenex Acquisition, the Company entered into an agreement
with WorldCom whereby the Company will lease long distance capacity for
thirty-six months with an aggregate minimum commitment during the term of the
lease of $36 million. On June 30, 1998, the Company agreed to purchase $25.2
million of switching equipment prior to June 30, 2000 for the Company's ICP
operations. Also on June 30, 1998, the Company agreed to purchase certain
customer support services over a 60 month period ending in July 2000 for $13.7
million.
 
    Upon consummation of the Senior Note offering, the Company purchased $122
million of restricted investments, consisting of U.S. government securities,
that are held as security for the payment of the first six scheduled payments of
interest on the Senior Notes. The restricted investments are held by a trustee
security for the benefit of the holders of the Senior Notes.
 
    As of December 31, 1998, the Company had $377.5 million of indebtedness
(including $27.5 million of secured indebtedness under the RUS/RTB Facility).
The RUS/RTB existing loans have scheduled maturities between 1999 and 2028. On
October 14, 1998, RUS/RTB approved an additional 17 year loan facility to the
Company that will provide $16.9 million in loan funds, of which $10.7 million
and $6.2 million is being provided by RUS and RTB, respectively. As of December
31, 1998, no new loan funds were borrowed against this new facility. On March
29, 1999, the Company obtained a commitment from NationsBank, N.A. to be the
administrative agent for a credit facility of up to a $75 million ("Credit
Facility") and to commit to lend $25 million of the Credit Facility. Borrowings
under the Credit Facility will be used to fund general corporate operations and
future acquisitions, as the Company continues to enhance its existing market
presence. The Company anticipates the Credit Facility will close early in the
second quarter 1999. Although there can be no assurance, management believes
that cash flow from operations and borrowings under the RUS/RTB Facility and the
Credit Facility will be sufficient to fund the replacement of its OSS and the
expansion of its business as currently planned, including its negative cash flow
from its ICP operations.
 
    Although the Company cannot provide any assurance, the Company believes
that, upon the successful completion of the credit facility discussed above, the
net proceeds available will be sufficient to satisfy the Company's currently
expected capital expenditures, working capital and potential future
acquisitions. If the Company is unable to complete the Credit Facility or is
unable to complete the Credit Facility in a timely manner Management believes
that it will be able to manage it's capital expenditures and working capital
throughout 1999. The credit facility will require the Company to maintain
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. The credit facility will begin to amortize in 2002 and
terminate in 2006. The actual amount and timing of the Company's future capital
requirements may differ materially from the Company's estimates as a result of,
among other things, the demand for the Company's 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. Because of the restrictions in the lending agreements and note
indentures of Dobson Communications, capital contributions to the Company by
Dobson Communications will be limited or prohibited. The Company cannot assure
you that any such financing will be available on acceptable terms or at all.
 
                                       34
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS
 
    In April 1998, the Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up
Activities," effective for fiscal years beginning after December 15, 1998. The
Company adopted this SOP as of January 1, 1998. SOP 98-5 requires costs of
start-up activities and organization costs to be expensed as incurred. The
Company recognized a pretax loss of approximately $1.1 million in the first
quarter of 1998 as cumulative effect of accounting change as a result of
adopting this SOP.
 
    In March, 1998, the AcSEC issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use," effective for fiscal
years beginning after December 15, 1998. The Company adopted SOP 98-1 as of
January 1, 1998. It requires capitalization of the development costs of software
to be used internally (e.g. administrative processes). The adoption of this SOP
did not materially impact the Company's net income.
 
FORWARD-LOOKING STATEMENTS
 
    The description of the Company's plans set forth herein, including the
Company's plans and strategies, its anticipation of revenues from designated
markets, the markets for the Company's services and products, planned capital
expenditures and possible regulatory requirements, and other statements which
predict or forecast future events which are dependent on future events for their
accuracy, 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, or the Company's performance to differ materially
from plans include, without limitation, the Company's ability to satisfy the
financial covenants of its existing debt instruments and to raise additional
capital; the Company's ability to integrate acquired operations with existing
operations, to manage its rapid growth successfully and to compete effectively
in its ILEC and ICP businesses 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 the Company; the Company's ability to
successfully market its services to current and new customers, interconnect with
ILECs, expand or replace its OSS and other back office systems, provision new
customers, access markets, install facilities, including switching electronics,
and obtain leased trunking capacity, rights-of-way, building access rights and
any required governmental authorizations, franchises and permits, all in a
timely manner, at reasonable costs and on satisfactory terms and conditions; as
well as unexpected regulatory, legislative and judicial developments. No
assurance can be given that the future results will be achieved; actual events
or results may differ materially as a result of risks facing the Company.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date hereof. The Company undertakes no
obligation to update or revise these forward-looking statements to reflect
events or circumstances after the date hereof including, without limitation,
changes in the Company's business strategy or planned capital expenditures, or
to reflect the occurrence of unanticipated events.
 
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 
    Market risk is the potential loss arising from adverse changes in market
prices and rates, including interest rates. The Company does 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.
 
    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 rise. The
estimated fair values of our total long-term fixed rate debt are shown in Note
13 to the Consolidated Financial Statements. Based on our market risk sensitive
instruments outstanding at December 31, 1998, we have determined that there was
no material market risk exposure to our consolidated financial position, results
of operations or cash flows as of such date.
 
                                       35
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                               PAGE
                                                                               -----
<S>                                                                         <C>
Financial Statements:
 
  Report of independent public accountants................................          37
 
  Consolidated balance sheets as of December 31, 1997 and 1998............          38
 
  Consolidated statements of operations for the years ended December 31,
    1996,
    1997 and 1998.........................................................          39
 
  Consolidated statements of stockholders' equity (deficit) for the years
    ended December 31, 1996, 1997 and 1998................................          40
 
  Consolidated statements of cash flows for the years ended December 31,
    1996, 1997 and 1998...................................................          41
 
  Notes to consolidated financial statements..............................          42
</TABLE>
 
                                       36
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To the Board of Directors of
 
Logix Communications Enterprises, Inc.:
 
    We have audited the accompanying consolidated balance sheets of Logix
Communications Enterprises, Inc. (an Oklahoma corporation) and subsidiaries as
of December 31, 1997 and 1998, and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for each of the three
years in the period ended December 31, 1998. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
 
    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Logix
Communications Enterprises, Inc. and subsidiaries as of December 31, 1997 and
1998, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles.
 
                                          ARTHUR ANDERSEN LLP
 
Oklahoma City, Oklahoma,
March 15, 1999 (except with respect to
 
the matter discussed in Note 13,
 
as to which the date is March 29, 1999)
 
                                       37
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
                           DECEMBER 31, 1997 AND 1998
 
<TABLE>
<CAPTION>
                                                                                        1997            1998
                                                                                    -------------  --------------
<S>                                                                                 <C>            <C>
                                                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.......................................................  $     254,269  $   31,675,250
  Restricted cash and investments.................................................             --      37,572,428
  Accounts receivable, net of allowance for doubtful accounts of $16,258 and
    $347,405 in 1997 and 1998, respectively.......................................      1,792,231      16,837,387
  Receivables-affiliates..........................................................             --       5,081,327
  Prepaid expenses and other......................................................        965,295       2,329,627
                                                                                    -------------  --------------
    Total current assets..........................................................      3,011,795      93,496,019
                                                                                    -------------  --------------
PROPERTY, PLANT AND EQUIPMENT, net................................................     35,976,412      89,507,537
                                                                                    -------------  --------------
OTHER ASSETS:
  Receivables--Affiliates.........................................................      8,206,935              --
  Restricted cash and investments.................................................             --      61,988,152
  Goodwill, net...................................................................             --     126,244,216
  Deferred costs, net of accumulated amortization of $221,332 and $615,263 in 1997
    and 1998, respectively........................................................      1,128,447      10,869,497
  Excess of cost over original cost of assets acquired, net of accumulated
    amortization of $1,130,769 and $1,226,009 in 1997 and 1998, respectively......      2,676,203       2,580,963
  Investment in unconsolidated partnership and other..............................        953,564       2,521,426
  Other intangibles, net..........................................................             --       5,213,504
                                                                                    -------------  --------------
    Total other assets............................................................     12,965,149     209,417,758
                                                                                    -------------  --------------
    Total assets..................................................................  $  51,953,356  $  392,421,314
                                                                                    -------------  --------------
                                                                                    -------------  --------------
 
                                 LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES:
  Accounts payable................................................................  $   1,131,185  $   29,477,206
  Accrued expenses................................................................        204,380       4,336,981
  Deferred revenue and customer deposits..........................................         67,448         424,268
  Current portion of long-term debt...............................................      1,140,824       1,171,303
                                                                                    -------------  --------------
    Total current liabilities.....................................................      2,543,837      35,409,758
                                                                                    -------------  --------------
LONG-TERM DEBT, net of current portion............................................     27,498,535     376,327,217
DEFERRED CREDITS:
  Income taxes....................................................................      1,700,000              --
  Investment tax credits and other................................................        133,817         107,504
                                                                                    -------------  --------------
    Total deferred credits........................................................      1,833,817         107,504
                                                                                    -------------  --------------
COMMITMENTS (Note 12)
STOCKHOLDER'S EQUITY (DEFICIT):
  Common stock, $.01 par value, 100,000,000 shares authorized and 71,250,000
    shares issued and outstanding in 1997 and 1998................................        712,500         712,500
  Paid-in capital.................................................................     11,447,926      11,447,926
  Retained earnings (deficit).....................................................      7,916,741     (31,583,591)
                                                                                    -------------  --------------
    Total stockholder's equity (deficit)..........................................     20,077,167     (19,423,165)
                                                                                    -------------  --------------
    Total liabilities and stockholder's equity (deficit)..........................  $  51,953,356  $  392,421,314
                                                                                    -------------  --------------
                                                                                    -------------  --------------
</TABLE>
 
   The accompanying notes are an integral part of these consolidated balance
                                    sheets.
 
                                       38
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                FOR THE YEARS ENDED DECEMBER 1996, 1997 AND 1998
 
<TABLE>
<CAPTION>
                                                                         1996           1997            1998
                                                                     -------------  -------------  --------------
<S>                                                                  <C>            <C>            <C>
REVENUE............................................................  $  17,908,178  $  20,176,710  $   67,702,627
 
OPERATING EXPENSES:
  Cost of service..................................................      2,822,531      3,268,343      41,878,247
  Selling, general and administrative..............................      7,815,864      8,734,923      33,539,163
  Depreciation and amortization....................................      4,478,933      4,931,315      12,387,102
                                                                     -------------  -------------  --------------
    Total operating expenses.......................................     15,117,328     16,934,581      87,804,512
                                                                     -------------  -------------  --------------
 
OPERATING INCOME (LOSS)............................................      2,790,850      3,242,129     (20,101,885)
                                                                     -------------  -------------  --------------
 
OTHER INCOME (EXPENSES):
  Equity in income (loss) of unconsolidated partnership............        (80,520)        82,121         155,758
  Interest income..................................................             --         14,674       5,794,439
  Interest expense.................................................     (2,194,169)    (2,458,588)    (25,906,382)
  Other............................................................         (2,591)         6,163         (13,815)
                                                                     -------------  -------------  --------------
    Total other expenses...........................................     (2,277,280)    (2,355,630)    (19,970,000)
                                                                     -------------  -------------  --------------
 
INCOME (LOSS) BEFORE INCOME TAXES, EXTRAORDINARY ITEMS AND
  CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE..............        513,570        886,499     (40,071,885)
 
INCOME TAX (PROVISION) BENEFIT.....................................       (182,512)      (336,870)      1,271,000
                                                                     -------------  -------------  --------------
 
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF
  CHANGE IN ACCOUNTING PRINCIPLE...................................        331,058        549,629     (38,800,885)
 
EXTRAORDINARY EXPENSE, net of income tax benefit of $133,300 in
  1997 (Note 5)....................................................             --       (217,488)             --
                                                                     -------------  -------------  --------------
 
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, net of income
  tax benefit of $429,000 in 1998..................................             --             --        (699,447)
                                                                     -------------  -------------  --------------
 
NET INCOME (LOSS)..................................................  $     331,058  $     332,141  $  (39,500,332)
                                                                     -------------  -------------  --------------
                                                                     -------------  -------------  --------------
 
BASIC NET (LOSS) INCOME PER SHARE:
  Before extraordinary expense, and cumulative effect of change in
    accounting principle...........................................           .005           .008           (.545)
  Extraordinary expense............................................             --          (.003)             --
  Cumulative effect of change in accounting principle..............             --             --           (.009)
                                                                     -------------  -------------  --------------
 
BASIC NET INCOME (LOSS) PER SHARE..................................  $        .005  $        .005  $        (.554)
                                                                     -------------  -------------  --------------
                                                                     -------------  -------------  --------------
 
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING...................     71,250,000     71,250,000      71,250,000
                                                                     -------------  -------------  --------------
                                                                     -------------  -------------  --------------
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       39
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
           CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
 
                FOR THE YEARS ENDED DECEMBER 1996, 1997 AND 1998
 
<TABLE>
<CAPTION>
                                                                COMMON STOCK                          RETAINED
                                                          ------------------------     PAID-IN        EARNINGS
                                                             SHARES       AMOUNT       CAPITAL       (DEFICIT)
                                                          ------------  ----------  -------------  --------------
<S>                                                       <C>           <C>         <C>            <C>
DECEMBER 31, 1995.......................................    71,250,000  $  712,500  $          --  $    7,253,542
 
  Net income............................................            --          --             --         331,058
                                                          ------------  ----------  -------------  --------------
 
DECEMBER 31, 1996.......................................    71,250,000     712,500             --       7,584,600
 
  Net income............................................            --          --             --         332,141
  Capital contribution for Logix Communications
    Corporation.........................................            --          --          1,000              --
  Capital contribution from parent company (Note 5).....            --          --     11,446,926              --
                                                          ------------  ----------  -------------  --------------
 
DECEMBER 31, 1997.......................................    71,250,000     712,500     11,447,926       7,916,741
 
  Net loss..............................................            --          --             --     (39,500,332)
                                                          ------------  ----------  -------------  --------------
 
DECEMBER 31, 1998.......................................    71,250,000  $  712,500  $  11,447,926  $  (31,583,591)
                                                          ------------  ----------  -------------  --------------
                                                          ------------  ----------  -------------  --------------
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       40
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                FOR THE YEARS ENDED DECEMBER 1996, 1997 AND 1998
 
<TABLE>
<CAPTION>
                                                                         1996           1997           1998
                                                                     -------------  ------------  --------------
<S>                                                                  <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)................................................  $     331,058  $    332,141  $  (39,500,332)
  Adjustments to reconcile net income (loss) to net cash provided
    by operating activities--
    Depreciation and amortization..................................      4,478,933     4,931,315      12,387,102
    Amortization of bond premium and financing costs...............             --            --         441,256
    Deferred credits...............................................       (263,716)       36,205      (1,726,313)
    Extraordinary loss on financing cost...........................             --       350,788              --
    Cumulative effect of change in accounting principle............             --            --       1,128,447
    Equity in loss (income) of unconsolidated partnership..........        103,424       (82,121)       (155,758)
  Changes in current assets and liabilities--
    Accounts receivable............................................        728,890       262,104      (6,122,156)
    Prepaid expenses and other.....................................         70,778      (771,535)       (364,499)
    Accounts payable...............................................        594,131      (535,368)     18,905,403
    Accrued expenses...............................................        334,583      (843,810)      3,973,794
    Deferred revenue and customer deposits.........................        (29,503)       24,648         217,597
                                                                     -------------  ------------  --------------
      Net cash provided by (used in) operating activities..........      6,348,578     3,704,367     (10,815,459)
                                                                     -------------  ------------  --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures.............................................     (3,902,015)   (5,442,417)    (55,219,637)
  Acquisitions of businesses.......................................             --            --    (141,810,632)
  Purchase of customer lists.......................................             --            --        (536,481)
  (Increase) decrease in receivable--affiliate.....................     (1,421,790)    3,307,421       3,125,608
  Deferred start-up costs..........................................       (124,739)   (1,101,322)             --
  Investment in unconsolidated partnership and other...............        (36,857)     (223,740)     (1,310,246)
                                                                     -------------  ------------  --------------
      Net cash used in investing activities........................     (5,485,401)   (3,460,058)   (195,751,388)
                                                                     -------------  ------------  --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable......................................        100,000            --              --
  Repayments of notes payable......................................       (800,000)           --              --
  Proceeds from long-term debt.....................................     12,011,306            --     350,000,000
  Repayments of long-term debt.....................................    (11,591,611)   (1,669,747)     (1,140,839)
  Purchase of restricted investments...............................             --            --    (121,971,851)
  Maturities of restricted investments.............................             --            --      23,297,608
  Proceeds from restricted investments.............................             --            --        (717,580)
  Redemption of RTFC subordinated capital certificates.............         57,632     1,051,057              --
  Deferred financing costs.........................................       (396,184)           --     (11,479,510)
                                                                     -------------  ------------  --------------
      Net cash provided by (used in) financing activities..........       (618,857)     (618,690)    237,987,828
                                                                     -------------  ------------  --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...............        244,320      (374,381)     31,420,981
CASH AND CASH EQUIVALENTS, beginning of year.......................        384,330       628,650         254,269
                                                                     -------------  ------------  --------------
CASH AND CASH EQUIVALENTS, end of year.............................  $     628,650  $    254,269  $   31,675,250
                                                                     -------------  ------------  --------------
                                                                     -------------  ------------  --------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for--
    Interest (net of amounts capitalized)..........................  $   1,728,405  $  2,820,797  $   23,981,912
    Income taxes...................................................  $     375,000  $         --  $           --
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING
  ACTIVITIES:
  1997
  Capital contribution from parent company through forgiveness of
    long-term debt (Note 5)........................................  $          --  $ 11,446,926  $           --
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       41
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1. ORGANIZATION:
 
    Logix was incorporated as an Oklahoma corporation under the name "Dobson
Wireline Company" in December 1997, as part of a reorganization by its parent
company, Dobson Communications Corporation ("Dobson Communications"). Its name
was changed to Logix Communications Enterprises, Inc. in October 1998. Logix is
a wholly owned subsidiary of Dobson Communications and is a leading provider of
integrated local and long distance, data and other telecommunications services
to small and medium-sized business customers throughout its region. The Company
provides these services through two business segments: incumbent local exchange
carrier ("ILEC") operations and integrated communications provider ("ICP")
operations. The consolidated financial statements of the Company include the
accounts of Logix Communications Enterprises, Inc., Dobson Telephone Company,
Inc. ("Dobson Telephone"), Logix Communications Corporation ("LCC") Dobson
Fiber/FORTE of Colorado, Inc. Dobson Telephone and LCC are collectively referred
to herein as the "Subsidiaries."
 
REORGANIZATION OF LOGIX
 
    In October 1998, Logix transferred all of the common stock of Dobson Fiber
Company, Inc. ("Dobson Fiber"), American Telco, Inc. ("ATI"), American Telco
Network Services, Inc. and Dobson Network Management, Inc. to LCC. The
transaction was considered a reorganization of entities under common control
under which the accounting treatment of the reorganization is similar to a
pooling-of-interests. The effects of all intercompany transactions, including
the transactions prior to the reorganization, have been eliminated.
 
RECAPITALIZATION
 
    On September 30, 1998, the Company approved its Amended and Restated
Certificate of Incorporation, which increased the number of authorized shares of
capital stock to 100,000,000. The Company also approved a stock split on the
same date increasing the number of outstanding shares of common stock to
71,250,000. The accompanying financial statements have been retroactively
restated to reflect this stock split. In addition, as of August 1, 1998, the
Company approved a stock option plan covering 3,750,000 shares of common stock,
of which the Company granted options covering 1,652,500 shares of common stock
to employees at an option price of $2 per share.
 
REORGANIZATION OF DOBSON COMMUNICATION
 
    In January 1998, Dobson Communication and its subsidiary, Dobson Operating
Company, transferred all of the common stock of the Subsidiaries to Logix. The
transaction was considered a reorganization of entities under common control
under which the accounting treatment of the reorganization is similar to a
pooling-of-interests. Concurrent with the reorganization, the number of shares
and par value of the Company's authorized stock changed. All share and per share
data are stated to reflect the common stock changes. The effects of all
intercompany transactions, including the transactions prior to the
reorganization, have been eliminated.
 
CAPITAL RESOURCES AND GROWTH
 
    The Company's total indebtedness and debt service requirements substantially
increased as a result of the borrowing described in Note 5 and the Company is
subject to significant financial restrictions and limitations.
 
                                       42
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
1. ORGANIZATION: (CONTINUED)
    The Company's ability to manage future growth will depend upon its continued
ability to monitor operations, control costs and maintain effective quality
controls which could result in higher operating expenses. Any failure to
adequately manage these areas and to implement and improve such systems,
procedures and controls in an efficient manner at a pace consistent with the
growth of the Company's business could have an adverse effect on the Company's
business, financial condition and results of operations.
 
ILEC
 
    The Company, through Dobson Telephone, provides wireline telephone service
to nine contiguous exchanges in western Oklahoma and three contiguous exchanges
adjacent to and east of the Oklahoma City metropolitan area. Dobson Telephone
operates under the authority of the Federal Communications Commission ("FCC").
Rates charged by Dobson Telephone are regulated by the FCC and the Oklahoma
Corporation Commission. Dobson Telephone, like other wireline companies that
operate in rural areas where the cost to provide service is higher than normal,
receives high cost support funds from state jurisdictions and the federal
universal service fund. Approximately 36%, 36% and 31% of the Company's revenue
from its ILEC operations for the year ended December 31, 1996, 1997 and 1998,
respectively, was from these two sources.
 
ICP
 
    The Company commenced its ICP operations in October 1997 through its
subsidiary, LCC. LCC provides facilities based and resells integrated services
including local exchange, long distance, data, wireless, paging, Internet and
fiber optic telecommunications service in Oklahoma City and Texas. Until October
1997, LCC's principal activities included developing its business plans,
procuring governmental authorizations, hiring management and other key
personnel, working on the design and development of its competitive local
exchange telephone networks and operations support systems ("OSS"), acquiring
equipment and facilities and negotiating interconnection agreements.
Accordingly, Logix has incurred operating losses and operating cash flow
deficits. In addition, the Company has a 20% interest in and manages the Forte
of Colorado, General Partnership which provides fiber optic telecommunication
service between Springfield, Colorado and Colorado Springs, Colorado (see Note
11).
 
    LCC's operations will be affected by the problems, expenses and delays
encountered in connection with the formation of a new business, and the
competitive environment in which LCC operates. LCC's performance will further be
affected by its ability to implement expanded co-location with ILEC facilities,
lease adequate trunking capacity from ILECs or other ICPs, purchase and install
switches in additional markets, complete the integration of its OSS and other
back office systems, develop a sufficient customer base, and attract, retain,
and motivate qualified personnel. LCC's networks and telecommunications services
are subject to significant regulation at the federal, state and local levels.
Delays in receiving required regulatory approvals or the enactment of new
adverse regulation or regulatory requirements may have an adverse effect upon
LCC. Although management believes that LCC will be able to successfully mitigate
these risks, there is no assurance that LCC will be able to do so or that LCC
will operate profitably in the near future. Expenses are expected to exceed
revenues in each location in which LCC offers service until a sufficient
customer base is established.
 
                                       43
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SIGNIFICANT ACCOUNTING POLICIES:
 
PRINCIPLES OF CONSOLIDATION
 
    The consolidated financial statements of the Company include the accounts of
all majority owned subsidiaries. For financial reporting purposes, the Company
consolidates each subsidiary and partnership in which it has a controlling
interest. Significant intercompany accounts and transactions have been
eliminated. Investments in unconsolidated partnerships where the Company does
not have a controlling interest are accounted for under the equity method.
 
CASH AND CASH EQUIVALENTS
 
    Cash and cash equivalents on the accompanying consolidated balance sheets
includes cash and short-term investments with original maturities of three
months or less.
 
RESTRICTED CASH AND INVESTMENTS
 
    Restricted cash and investments consists of an initial $122.0 million of
pledged securities purchased to fund the first six semi-annual interest payments
on the Company's 12 1/4% Senior Notes due 2008 ("Senior Notes"), net of
maturities and amortization of bond premium of $22.4 million in 1998.
 
GOODWILL
 
    Goodwill consists of amounts paid in excess of the fair market value of the
assets acquired by the Company in its business acquisitions. Goodwill is being
amortized on a straight-line basis over a period of thirty years. Amortization
expense of $4,638,706 was recorded in 1998.
 
    The ongoing value and remaining useful lives of intangible and other
long-term assets are subject to periodic evaluation and the Company currently
expects the carrying amounts to be fully recoverable.
 
IMPAIRMENT OF LONG-LIVED ASSETS
 
    The Company assesses potential impairments of long-lived assets, certain
identifiable intangibles and excess of cost over original cost of assets
acquired when there is evidence that events or changes in circumstances indicate
that an asset's carrying value may not be recoverable. An impairment loss is
recognized when the sum of the expected future net cash flows is less than the
carrying amount of the asset. The amount of any recognized impairment would be
based on the estimated fair value of the asset subject to impairment compared to
the carrying amount of such asset. No such losses have been identified by the
Company.
 
DEFERRED COSTS
 
    Deferred costs consist primarily of fees incurred to secure long-term debt.
Deferred financing costs are being amortized on a straight-line basis over the
term of the debt of eight years. Amortization expense related to these costs of
$3,622, $163,510 and $610,013 was recorded in 1996, 1997 and 1998, respectively.
 
EXCESS OF COST OVER ORIGINAL COST OF ASSETS ACQUIRED
 
    The excess of cost over the original cost of assets acquired relates to
Dobson Telephone's acquisition of McLoud Telephone Company in 1985 and is being
amortized using the straight-line method over 40 years. Amortization expense of
$95,240 was recorded in 1996, 1997 and 1998. As the excess cost over
 
                                       44
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
original cost of assets acquired is a term defined and required by regulatory
accounting practices applicable to Dobson Telephone, such amounts are presented
separately from amounts included in the caption "Goodwill."
 
ADVERTISING COSTS
 
    Advertising costs are expensed as incurred and are included as selling,
general and administrative expenses in the accompanying consolidated statements
of operations. Advertising expense of $7,877, $221,473 and $1,929,806 was
incurred in 1996, 1997 and 1998, respectively.
 
INCOME TAXES
 
    The Company files a consolidated income tax return with its parent, Dobson
Communications. Income taxes are allocated among the various entities included
in the consolidated tax return, as agreed, based on the ratio of each entity's
taxable income (loss) to consolidated taxable income (loss). Deferred income
taxes reflect the estimated future tax effects of temporary differences between
financial statement and tax bases of assets and liabilities at year-end. Amounts
owed to Dobson Communications for income taxes are reflected in
receivables-affiliates and deferred credits in the accompanying balance sheets.
 
REVENUE RECOGNITION
 
    The Company records service revenues over the period they are earned. The
cost of providing service is recognized as incurred.
 
    Toll revenue is billed in arrears. The Company accrued estimated unbilled
revenues for services provided of approximately $271,000 and $529,000 as of
December 31, 1997 and 1998, respectively, which are included in accounts
receivable in the accompanying consolidated balance sheets. Monthly access
charges are billed in advance and are reflected in deferred revenue and customer
deposits on the accompanying consolidated balance sheets.
 
EARNINGS PER SHARE
 
    Basic income (loss) per common share is computed by using the weighted
average number of common stock shares outstanding during the year. The Company
has not presented diluted earnings per share as it has no potentially dilutive
securities in 1996 and 1997 and the impact of potentially dilutive securities
outstanding in 1998 would be anti-dilutive.
 
USE OF ESTIMATES
 
    The preparation of these consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
    In March 1998, the Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use," effective for fiscal years
beginning after December 15, 1998. The Company adopted SOP
 
                                       45
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
98-1 as of January 1, 1998. It requires capitalization of the development costs
of software to be used internally (e.g. administrative processes). The adoption
of this SOP did not materially impact the Company's net income.
 
    In April 1998, the AcSEC issued SOP 98-5, "Reporting on the Costs of
Start-Up Activities." The Company adopted SOP 98-5 as of January 1, 1998. SOP
98-5 requires costs of start-up activities and organization costs to be expensed
as incurred. The Company has recognized a pretax loss of approximately $1.1
million as a result of adopting this SOP. This loss has been reflected as a
cumulative effect of change in accounting principle, net of tax, in the
accompanying consolidated statement of operations for the year ended December
31, 1998.
 
3. ACQUISITIONS:
 
    On June 15, 1998, the Company purchased the common stock of American Telco,
Inc. and American Telco Network Services, Inc. (collectively, "ATI") for $131.5
million (the "ATI Acquisition"). The ATI Acquisition expanded the Company's ICP
operations to five major Texas markets: Houston, Dallas, Fort Worth, San Antonio
and Austin.
 
    On June 22, 1998, the Company purchased certain long distance customers and
related assets of Zenex Long Distance, Inc. d/b/a Zenex Communications, Inc.
("Zenex") for $4.7 million. The Zenex Acquisition increased the Company's
customer base in Oklahoma City.
 
    On November 20, 1998, the Company purchased substantially all of the assets
of SysComm Design, Inc. ("SysComm') for $4.1 million (the "SysComm
Acquisition"). The SysComm Acquisition increased the Company's customer base and
direct sales force in Dallas, Corpus Christi, Austin and Houston and expanded
the Company's customer premise equipment product line offerings.
 
    The acquisition transactions were accounted for as purchases, and
accordingly, their results of operations have been included in the accompanying
consolidated statements of operations from the respective dates of acquisition.
The unaudited pro forma information set forth below includes all acquisitions
for the years ended 1997 and 1998, respectively, as if the purchases occurred at
the beginning of each year. The unaudited pro forma information is presented for
informational purposes only and is not necessarily indicative of the results of
operations that actually would have been achieved had the acquisitions been
consummated at that time:
 
<TABLE>
<CAPTION>
($ IN THOUSANDS, EXCEPT PER SHARE DATA)                                    1997        1998
                                                                        ----------  ----------
                                                                             (UNAUDITED)
<S>                                                                     <C>         <C>
Operating revenue.....................................................  $   82,315  $  106,163
Loss before extraordinary items and cumulative effect.................  $  (50,532) $  (56,608)
Net loss..............................................................  $  (50,749) $  (57,307)
Basic net loss per share..............................................  $    (.712) $    (.804)
</TABLE>
 
4. PROPERTY, PLANT AND EQUIPMENT:
 
    Property, plant and equipment are recorded at cost. Newly constructed
telephone systems and fiber optic cable systems are added to property, plant and
equipment at cost which includes contracted services, direct labor, materials
overhead and capitalized interest. For the years ended December 31, 1996, 1997
and 1998, interest capitalized was not significant. Existing property, plant and
equipment purchased through
 
                                       46
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
4. PROPERTY, PLANT AND EQUIPMENT: (CONTINUED)
acquisitions is recorded at its fair value at the date of the purchase. Repairs,
minor replacements and maintenance are charged to operations as incurred. The
provisions for depreciation are provided using the straight-line method based on
the estimated useful lives of the various classes of depreciable property.
 
    Listed below are the major classes of property, plant and equipment and
their estimated useful lives, in years, as of December 31, 1997 and 1998:
 
<TABLE>
<CAPTION>
                                                   USEFUL LIFE       1997            1998
                                                   -----------  --------------  --------------
<S>                                                <C>          <C>             <C>
Telephone systems and equipment..................    5 - 40     $   46,115,237  $   65,148,964
Fiber systems and equipment......................    5 - 22         15,956,178      19,662,642
Buildings and improvements.......................    20 - 40         3,379,420       8,229,871
Vehicles and other work equipment................    3 - 10          2,774,902       4,219,875
Furniture and office equipment...................    5 - 10          2,167,201      24,247,295
Under construction...............................                       61,612       9,142,654
Land.............................................                      211,494         211,494
                                                                --------------  --------------
  Property, plant and equipment..................                   70,666,044     130,862,795
Accumulated depreciation.........................                  (34,689,632)    (41,355,258)
                                                                --------------  --------------
  Property, plant and equipment, net.............               $   35,976,412  $   89,507,537
                                                                --------------  --------------
                                                                --------------  --------------
</TABLE>
 
5. LONG-TERM DEBT:
 
    The Company's long-term debt as of December 31, 1997 and 1998, consisted of
the following:
 
<TABLE>
<CAPTION>
                                                                    1997            1998
                                                                -------------  --------------
<S>                                                             <C>            <C>
Senior Notes..................................................  $          --  $  350,000,000
Mortgage notes payable........................................     28,639,359      27,498,520
                                                                -------------  --------------
  Total debt..................................................     28,639,359     377,498,520
Less--Current maturities......................................      1,140,824       1,171,303
                                                                -------------  --------------
  Total long-term debt........................................  $  27,498,535  $  376,327,217
                                                                -------------  --------------
                                                                -------------  --------------
</TABLE>
 
SENIOR NOTES
 
    On June 12, 1998, the Company issued $350 million of 12.25% Senior Notes
maturing in 2008 ("Senior Notes"). The net proceeds were used to finance the ATI
Acquisition described in Note 3, to purchase $122.0 million of securities
pledged to secure payment of the first six semi-annual interest payments on the
Senior Notes, which began on December 15, 1998, to fund capital expenditures and
for general corporate operations. The pledged securities are reflected as
restricted cash and investments in the Company's consolidated balance sheets.
The Notes are redeemable at the option of the Company in whole or in part, on or
after June 15, 2003, initially at 106.125%. Prior to June 15, 2001, the Company
may redeem up to 35% of the principal amount of the Notes at 112.250% with
proceeds from equity offerings, provided that at least $227.5 million remains
outstanding.
 
                                       47
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
5. LONG-TERM DEBT: (CONTINUED)
MORTGAGE NOTES
 
    The mortgage notes payable to the United States of America, through the
Rural Utilities Service ("RUS") and the Rural Telephone Bank ("RTB") with
interest rates ranging from 2% to 10.75% (weighted average of 4.43% as of
December 31, 1998) are due in quarterly or monthly installments maturing at
various dates from 1999 to 2028. The mortgage notes are secured by substantially
all the assets of Dobson Telephone and contain, among other things, restrictions
on the payment of dividends and redemption of capital stock, as defined. Under
the long-term debt agreements, Dobson Telephone is restricted, without RUS
approval for Dobson Telephone, from making any loans to, or in any manner
extending its credit to various affiliates. The agreements also prohibit payment
of dividends or distributions or new investments in affiliated companies unless
after such action Dobson Telephone's current assets exceed its current
liabilities and its adjusted net worth (as defined in the agreement) is at least
40% of its adjusted assets (as defined in the agreement), or, (ii) if smaller,
the sum of 10% of its adjusted assets, plus 30% of the excess of its adjusted
net worth over 10% of its adjusted assets, if any, plus 30% of the amount of any
reduction of its adjusted net worth resulting from the declaration or payment of
dividends or other distributions.
 
    Minimum future payments of long-term debt for years subsequent to December
31, 1998, are as follows:
 
<TABLE>
<S>                                                           <C>
1999........................................................  $ 1,171,303
2000........................................................    1,208,963
2001........................................................    1,230,142
2002........................................................    1,273,959
2003........................................................    1,312,726
2004 and thereafter.........................................  371,301,427
                                                              -----------
                                                              $377,498,520
                                                              -----------
                                                              -----------
</TABLE>
 
REVOLVING CREDIT FACILITY
 
    On March 29, 1999, the Company received a commitment from Nations Bank, N.A.
to be the administrative agent for a $75 million credit facility ("Credit
Facility") and to commit to lend $25 million of the Credit Facility. See Note 14
for further discussion.
 
    On February 28, 1997, the Dobson Communications' bank credit agreement was
amended and restated to provide Dobson Communications with a $200 million
revolving credit facility maturing in 2005. The Company's portion of the initial
proceeds were used to refinance existing indebtedness, and for general corporate
purposes. In connection with the closing of the revolving credit facility,
Dobson Communications extinguished its then existing credit facility, and the
Company recognized a pretax loss of approximately $351,000 as a result of
writing off previously capitalized financing costs associated with the old
revolving credit facility which had been allocated to the Company. This loss has
been reflected as an extraordinary item, net of tax, in the Company's
consolidated statement of operations for the year ended December 31, 1997.
 
    Effective December 31, 1997, Dobson Communications made a capital
contribution to the Company of approximately $11,447,000, which represented the
Company's outstanding portion of the revolving credit facility payable to Dobson
Communications.
 
                                       48
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
6. EMPLOYEE BENEFIT PLAN:
 
401(K) PLAN
 
    Dobson Communications maintains a 401(k) plan (the "Plan") in which
substantially all employees of the Company are eligible to participate. The Plan
requires the Company to match 100% of employees' contributions up to 4% of their
salary. Contributions to the Plan charged to the Company's operations were
approximately $40,000, $47,000 and $77,700 during the years ended December 31,
1996, 1997 and 1998, respectively.
 
STOCK OPTION PLAN
 
    The Company has adopted a stock option plan, the Logix Communications
Enterprises, Inc. 1998 Stock Option Plan (the "Logix Plan"). The Company
accounts for the Logix Plan under APB Opinion 25, under which no compensation
cost is recognized in the accompanying consolidated financial statements if the
option price is equal to or greater than the fair market value of the stock at
the time the option is granted.
 
    Under the Logix Plan, the Board of Directors may grant both incentive stock
options and nonqualified stock options to key employees and directors. Since the
Logix Plan's adoption, stock options have been issued at the market price on the
date of grant with an expiration of ten years from the grant date. All of the
options vest at a rate of 20% per year. The Company has reserved 3,750,000
shares of authorized but unissued common stock for issuance under the Logix
Plan.
 
    Stock options outstanding under the Logix Plan are presented for the periods
indicated.
 
<TABLE>
<CAPTION>
                                                         NUMBER OF SHARES   OPTION PRICE RANGE
                                                         -----------------  -------------------
<S>                                                      <C>                <C>
Outstanding December 31, 1997..........................              --                 --
Granted................................................       1,652,500          $    2.00
Exercised..............................................              --                 --
Canceled...............................................              --                 --
Outstanding December 31, 1998..........................       1,652,500          $    2.00
Exercisable at December 31, 1998.......................              --                 --
</TABLE>
 
    The following schedule shows the Company's net loss and net loss per share
for the last year had compensation expense been determined consistent with the
Statement on Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation. The pro forma information presented below is based on several
assumptions and should not be viewed as indicative of the Company in future
periods.
 
<TABLE>
<CAPTION>
($ IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)                                       1998
------------------------------------------------------------------------------  --------------
<S>                                                                             <C>
Net loss:
  As reported.................................................................  $  (39,500,332)
  Pro forma...................................................................  $  (39,646,021)
 
Basic net loss per common share:
  As reported.................................................................  $        (.554)
  Pro forma...................................................................  $        (.556)
</TABLE>
 
    Diluted net loss per common share had been omitted because the impact of
common stock equivalents is anti-dilutive.
 
                                       49
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
6. EMPLOYEE BENEFIT PLAN: (CONTINUED)
 
    The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions used for grants in 1998:
 
<TABLE>
<CAPTION>
                                                                                        1998
                                                                                      ---------
<S>                                                                                   <C>
Interest rate.......................................................................      5.60%
Dividend yield......................................................................         --
Expected volatility.................................................................     40.72%
</TABLE>
 
    The weighted average fair value of options granted using the Black-Scholes
option pricing model was $1.24, assuming an expected life of ten years.
 
7. TAXES:
 
    Provision (benefit) for income taxes for the years ended December 31, 1996,
1997 and 1998, was as follows:
 
<TABLE>
<CAPTION>
                                                           1996         1997         1998
                                                        -----------  ----------  -------------
<S>                                                     <C>          <C>         <C>
Federal income taxes--
  Current.............................................  $   407,512  $  302,870  $          --
  Deferred............................................     (197,000)     38,000     (1,070,000)
  Deferred investment tax credits amortized...........      (48,000)    (39,000)       (26,000)
 
State income taxes (current and deferred).............       20,000      35,000       (201,000)
                                                        -----------  ----------  -------------
    Total income tax provision (benefit)..............  $   182,512  $  336,870  $  (1,271,000)
                                                        -----------  ----------  -------------
                                                        -----------  ----------  -------------
</TABLE>
 
    The provisions for income taxes for the years ended December 31, 1996, 1997
and 1998, differ from amounts computed at the statutory rate as follows:
 
<TABLE>
<CAPTION>
                                                          1996        1997          1998
                                                       ----------  ----------  --------------
<S>                                                    <C>         <C>         <C>
Income taxes at statutory rate (34%).................  $  174,614  $  301,410  $  (13,384,000)
Deferred investment credits amortized................     (48,000)    (39,000)        (26,000)
Amortization of excess of cost over original cost of
  assets acquired....................................      32,000      32,000          73,000
State income taxes, net of Federal income tax
  effect.............................................      13,200      23,100      (1,574,000)
Other, net...........................................      10,698      19,360           3,000
Losses not benefitted................................          --          --      13,637,000
                                                       ----------  ----------  --------------
                                                       $  182,512  $  336,870  $   (1,271,000)
                                                       ----------  ----------  --------------
                                                       ----------  ----------  --------------
</TABLE>
 
                                       50
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
7. TAXES: (CONTINUED)
    The tax effects of the temporary differences which gave rise to deferred tax
assets and liabilities at December 31, 1997 and 1998, were as follows:
 
<TABLE>
<CAPTION>
                                                                      1997           1998
                                                                  -------------  -------------
<S>                                                               <C>            <C>
Current deferred income taxes:
  Allowance for doubtful accounts...............................  $          --  $     252,000
  Accrued liabilities...........................................          9,000         97,000
  Deferred expenses.............................................         17,000             --
  Valuation allowance...........................................             --       (349,000)
                                                                  -------------  -------------
    Net current deferred income tax asset.......................         26,000             --
                                                                  -------------  -------------
Noncurrent deferred income taxes:
  Fixed assets..................................................     (1,700,000)    (1,821,000)
  Intangibles...................................................             --        142,000
  Net operating loss............................................             --     14,967,000
  Valuation allowance...........................................             --    (13,288,000)
                                                                  -------------  -------------
    Net noncurrent deferred income tax asset (liability)........     (1,700,000)            --
                                                                  -------------  -------------
    Total deferred income taxes.................................  $  (1,674,000) $          --
                                                                  -------------  -------------
                                                                  -------------  -------------
</TABLE>
 
    The investment tax credits previously recorded by the Company for book
purposes have been deferred and are being amortized over the average lives of
the property giving rise to the credits. The investment tax credit amortization
used to offset income tax expense was $48,000 for the year ended December 31,
1996, $39,000 in 1997 and $26,000 in 1998. The Company had net operating loss
carryforwards of $39,387,000 at December 31, 1998 which begin to expire in 2013.
 
    At December 31, 1997, the Company had investment tax credit carryforwards
for tax purposes of $134,000, which may be utilized to reduce future Federal
income taxes payable. Unless utilized, the remaining investment tax credit
carryforwards will expire in 1999.
 
8. RELATED PARTY TRANSACTIONS:
 
    Beginning in 1997, Dobson Communications began to provide certain
administrative services, including accounting, information systems management,
human resource management and marketing to the company. Additionally, officers
of the Company have also been or are currently officers of Dobson Communications
and various of its other subsidiaries. The Company reimburses Dobson
Communications based on Dobson Communications' cost of providing the services.
Dobson Communications allocates these costs based on the subsidiaries' usage of
corporate services. Management of the Company believes this is the most
reasonable method to allocate such costs. The total amount charged to the
Company for these administrative services and officer compensation was
$3,245,000, $2,644,000 and $4,312,000 in 1996, 1997 and 1998, respectively.
Management believes these costs would not have been significantly different had
the costs been incurred directly by the Company.
 
    The Company had receivables from Dobson Communications and certain of its
subsidiaries totaling $8,206,935 and $5,081,327 at December 31, 1997 and 1998,
respectively. These receivables represent advances to these entities net of
repayments and intercompany allocations. The net receivables from these
affiliates have been reflected as receivables-affiliates in the accompanying
balance sheets.
 
                                       51
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
8. RELATED PARTY TRANSACTIONS: (CONTINUED)
    The Company carries telephone traffic, provides long-haul fiber transport
services and provides network monitoring for affiliated companies of Dobson
Communications. Fees of approximately $1,658,000, $1,722,000 and $1,308,000 were
earned from the affiliated companies for services provided during 1996, 1997 and
1998, respectively, and are reflected in revenue in the accompanying statements
of operations.
 
    The Company is a party to a tax sharing agreement with Dobson Communications
and its other subsidiaries. The Company, as a member of the affiliated group
with Dobson Communications, joins with Dobson Communications and its other
subsidiaries in filing a consolidated federal income tax return. Under the tax
sharing agreement, each subsidiary's contribution toward the group's
consolidated federal income tax liability is determined as if such party were at
all times a separate taxpayer not included in the group. Based on this
determination of separate tax liability, each subsidiary pays to Dobson
Communications an amount in lieu of taxes equal to the amount the subsidiary
would be obligated to pay if it filed returns as a separate taxpayer. If, but
only to the extent that, the group realizes a tax benefit for any taxable year
as a result of the inclusion of a subsidiary's tax items in the determination of
tax liability of the group, Dobson Communications will pay to the subsidiary an
amount equal to such tax benefits realized.
 
9. ACCRUED EXPENSES:
 
    The Company's accrued expenses as of December 31, 1997 and 1998, consisted
of the following:
 
<TABLE>
<CAPTION>
                                                                         1997         1998
                                                                      ----------  ------------
<S>                                                                   <C>         <C>
Interest............................................................  $   14,400  $  1,938,870
Property tax........................................................          --       393,770
Vacation, wages and other...........................................     189,980     2,004,341
                                                                      ----------  ------------
  Total accrued expenses............................................  $  204,380  $  4,336,981
                                                                      ----------  ------------
                                                                      ----------  ------------
</TABLE>
 
10. REPORT OF BUSINESS SEGMENTS:
 
    The Company operates in two reportable segments: ILEC and ICP. These
segments are strategic business units that offer different products and
services. These segments are managed separately because the ILEC segment is a
regulated public utility and the ICP segment is a competitive communications
provider. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies in Note 2. The
Company evaluates and measures performance of each segment based on Adjusted
EBITDA, which is defined below and income (loss) before income taxes,
extraordinary items and cumulative effect of changes in accounting principle.
The Company accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market prices. The Company
allocates corporate overhead, income taxes and amortization of deferred
financing
 
                                       52
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
10. REPORT OF BUSINESS SEGMENTS: (CONTINUED)
cost to both segments. The segments do not have significant noncash items other
than depreciation and amortization in reported profit or loss. A summary of the
Company's operations by segment is as follows:
<TABLE>
<CAPTION>
                                                                              1996
                                                          ---------------------------------------------
                                                              ILEC           ICP(1)          TOTAL
                                                          -------------  --------------  --------------
<S>                                                       <C>            <C>             <C>
OPERATING INFORMATION:
  Operating revenue--
    External............................................  $  14,365,436  $    3,542,742  $   17,908,178
    Intersegment........................................         85,312         192,757         278,069
    Intersegment revenue(4).............................             --              --        (278,069)
                                                          -------------  --------------  --------------
      Total operating revenue...........................  $  14,450,748  $    3,735,499  $   17,908,178
                                                          -------------  --------------  --------------
                                                          -------------  --------------  --------------
 
  Adjusted EBITDA(2)....................................  $   5,531,951  $    1,737,832  $    7,269,783
  Depreciation and amortization.........................     (3,247,313)     (1,231,620)     (4,478,933)
  Interest expense(3)...................................     (1,341,508)       (852,661)     (2,194,169)
  Other expense, net(5).................................        (18,417)        (64,694)        (83,111)
                                                          -------------  --------------  --------------
    Income (loss) before income taxes, extraordinary
      items and cumulative effect of change in
      accounting principle..............................  $     924,713  $     (411,143) $      513,570
                                                          -------------  --------------  --------------
                                                          -------------  --------------  --------------
 
<CAPTION>
 
                                                                              1997
                                                          ---------------------------------------------
                                                              ILEC           ICP(1)          TOTAL
                                                          -------------  --------------  --------------
<S>                                                       <C>            <C>             <C>
OPERATING INFORMATION:
  Operating revenue--
    External............................................  $  15,361,080  $    4,815,630  $   20,176,710
    Intersegment........................................        109,260         300,558         409,818
    Intersegment revenue (4)............................             --              --        (409,818)
                                                          -------------  --------------  --------------
      Total operating revenue...........................  $  15,470,340  $    5,116,188  $   20,176,710
                                                          -------------  --------------  --------------
                                                          -------------  --------------  --------------
 
  Adjusted EBITDA (2)...................................  $   7,031,493  $    1,141,951  $    8,173,444
  Depreciation and amortization.........................     (3,259,900)     (1,671,415)     (4,931,315)
  Interest expense(3)...................................     (1,297,384)     (1,161,204)     (2,458,588)
  Interest income.......................................         14,674              --          14,674
  Other income (expense), net (5).......................        (12,564)        100,848          88,284
                                                          -------------  --------------  --------------
    Income (loss) before income taxes, extraordinary
      items and cumulative effect of change in
      accounting principle..............................  $   2,476,319  $   (1,589,820) $      886,499
                                                          -------------  --------------  --------------
                                                          -------------  --------------  --------------
</TABLE>
 
                                       53
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
10. REPORT OF BUSINESS SEGMENTS: (CONTINUED)
<TABLE>
<CAPTION>
                                                                              1998
                                                          ---------------------------------------------
                                                              ILEC           ICP(1)          TOTAL
                                                          -------------  --------------  --------------
<S>                                                       <C>            <C>             <C>
OPERATING INFORMATION:
  Operating revenue--
    External............................................  $  15,603,731  $   52,366,097  $   67,702,627
    Intersegment........................................                        267,201         267,201
    Intersegment revenue(4).............................             --              --        (267,201)
                                                          -------------  --------------  --------------
      Total operating revenue                                15,603,731      52,366,097      67,702,627
                                                          -------------  --------------  --------------
 
  Adjusted EBITDA(2)....................................  $   8,414,439  $  (16,129,222) $   (7,714,783)
  Depreciation and amortization.........................     (3,119,593)     (9,267,509)    (12,387,102)
  Interest expense(3)...................................     (1,293,042)    (24,613,340)    (25,906,382)
  Interest income.......................................         13,206       5,781,233       5,794,439
  Other income (expense), net(5)........................        646,736        (504,793)        141,943
                                                          -------------  --------------  --------------
      Income (loss) before income taxes, extraordinary
        items and cumulative effect of change in
        accounting principle............................  $   4,661,746  $  (44,733,631) $  (40,071,885)
                                                          -------------  --------------  --------------
                                                          -------------  --------------  --------------
 
<CAPTION>
 
                                                              1996            1997            1998
                                                          -------------  --------------  --------------
<S>                                                       <C>            <C>             <C>
INVESTMENT INFORMATION:
  Segment assets--
    ILEC................................................  $  43,303,275  $   43,268,782  $   47,978,099
    ICP(1)..............................................     16,544,326      22,454,132     351,230,934
    Intersegment receivables(4).........................     (5,239,314)    (13,769,558)     (6,787,721)
                                                          -------------  --------------  --------------
      Total segment assets..............................  $  54,608,287  $   51,953,356  $  392,421,312
                                                          -------------  --------------  --------------
                                                          -------------  --------------  --------------
 
OTHER INFORMATION:
  Capital expenditures--
    ILEC................................................  $   1,145,184  $      952,061  $    2,010,262
    ICP.................................................      2,756,831       4,470,356      53,258,791
                                                          -------------  --------------  --------------
      Total capital expenditures........................  $   3,902,015  $    5,422,417  $   55,219,637
                                                          -------------  --------------  --------------
                                                          -------------  --------------  --------------
</TABLE>
 
------------------------
 
1)  In 1996 and 1997, ICP consists mainly of the fiber operations and network
    operations.
 
2)  Adjusted EBITDA, as defined by the Company, represents earnings before
    interest expense, income taxes, depreciation and amortization, other income
    (expense) and extraordinary items and the cumulative effect of changes in
    accounting principle.
 
3)  Included in interest expense is amortization expense of deferred financing
    cost. The amortization expense is allocated to the Fiber segment based on
    the segment's pro rata portion of total Dobson Communications' debt on the
    date of debt issuance.
 
4)  The intersegment eliminations were included to reconcile reportable segment
    activities to the Company's consolidated totals.
 
5)  Included in other income, net is equity in income (loss) of unconsolidated
    partnership of $(80,520), $82,121 and $155,758 for 1996, 1997 and 1998,
    respectively.
 
                                       54
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
11. INVESTMENT IN UNCONSOLIDATED PARTNERSHIP:
 
    The Company owns a 20% interest in the Forte of Colorado, General
Partnership. This investment is accounted for on the equity method. The
following is a summary of the significant financial information for the Forte of
Colorado, General Partnership as of and for the years ended December 31, 1996,
1997 and 1998:
 
<TABLE>
<CAPTION>
                                                          1996          1997          1998
                                                      ------------  ------------  ------------
<S>                                                   <C>           <C>           <C>
Current assets......................................  $    348,175  $    564,525  $  1,087,895
Other assets........................................     7,718,713     7,913,196     7,014,826
Current liabilities.................................     1,232,198     1,377,810     1,452,484
Other liabilities...................................     4,995,924     4,850,538     3,622,071
Partners' capital...................................     1,838,766     2,249,373     3,028,165
Revenue.............................................     1,171,963     2,009,634     2,556,140
Operating income (loss).............................       (48,577)      729,924     1,133,474
Net income (loss)...................................      (402,601)      410,607       778,792
</TABLE>
 
12. COMMITMENTS:
 
    In May 1998, the Company entered into a carrier service agreement with a
minimum commitment totaling $9.75 million for a period of 24 months. Under this
agreement, the Company agreed to purchase on a take-or-pay basis, $.25 million
of monthly services from October 1998 through December 1998. Beginning in
January 1999, the Company is obligated to purchase $.5 million of monthly
services through June 2000. Of this commitment, $8.4 million remained at
December 31, 1998.
 
    In June 1998, the Company entered into a carrier service agreement with a
minimum commitment totaling $18 million for a period of 36 months. Under this
agreement, the Company agreed to purchase on a take-or-pay basis, $.5 million of
monthly services, beginning in January 1999. Additionally, the Company must
purchase at least 80 percent of its monthly services as defined in the agreement
from the carrier until the earlier of the purchasing cumulative monthly services
of $36 million or reaching the end of the agreement. Of this commitment, $16.9
million remained at December 31, 1998.
 
    In June 1998, the Company entered into an equipment supply agreement in
which the Company agreed to purchase $25.2 million of switching equipment
between June 30, 1998, and June 30, 2000, for ICP operations. Of this
commitment, $11.4 million remained at December 31, 1998.
 
    In June 1998, the Company entered into an agreement to purchase certain
customer support services for a period of 60 months together with related
equipment. Under this agreement, the Company has agreed to pay $13.7 million
from July 1998 through July 2003. Of this commitment, $10.3 million remained at
December 31, 1998.
 
    Effective September 1, 1998, Dobson Communications entered into a consulting
agreement with Russell L. Dobson. Under the terms of the agreement, Mr. Dobson
will be retained by Dobson Communications from September 1, 1998, through August
31, 2008. In exchange for Mr. Dobson's services to the Company, the Company will
provide monthly compensation of $15,000 and insurance benefits commensurate with
the Company's employee plan. Mr. Dobson's responsibilities will include
consulting services in areas consistent with the responsibilities of a former
Chief Executive Officer of Dobson Communications, including the development of
goodwill for Dobson Communications and the Company.
 
                                       55
<PAGE>
            LOGIX COMMUNICATIONS ENTERPRISES, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
12. COMMITMENTS: (CONTINUED)
    Future minimum lease payments required under operating leases that have an
initial or remaining noncancellable lease term in excess of one year at December
31, 1998, are as follows:
 
<TABLE>
<S>                                                              <C>
1999...........................................................  $3,167,211
2000...........................................................   3,102,784
2001...........................................................   3,018,665
2002...........................................................   2,859,926
2003...........................................................   3,025,702
2004 and thereafter............................................  13,784,554
</TABLE>
 
    Included in the annual lease commitments is approximately $194,000, payable
annually to an affiliated entity through July 2005. Lease expense under the
above leases was approximately $199,000, $240,000 and $1,302,000 for the years
ended December 31, 1996, 1997 and 1998, respectively.
 
13. FAIR VALUE OF FINANCIAL INSTRUMENTS:
 
    Unless otherwise noted, the carrying value of the Company's financial
instruments approximates fair value. The Company estimates the fair value of its
long-term debt using a discounted cash flow analysis based on the current rates
available to the Company for debt with similar terms and remaining maturation or
based on the current quoted market price for the debt.
 
    Indicated below are the carrying amounts and estimated fair values of the
Company's financial instruments as of December 31:
 
<TABLE>
<CAPTION>
                                           1997                     1998
                                  ----------------------  ------------------------
                                   CARRYING                CARRYING
                                    AMOUNT    FAIR VALUE    AMOUNT     FAIR VALUE
                                  ----------  ----------  -----------  -----------
<S>                               <C>         <C>         <C>          <C>
Senior Notes....................  $       --  $       --  $350,000,000 $332,500,000
Mortgage notes payable..........  28,639,359  26,969,543   27,637,743   26,441,926
</TABLE>
 
14. SUBSEQUENT EVENTS:
 
    On March 29, 1999, the Company obtained a commitment from NationsBank, N.A.
to be the administrative agent for a credit facility of up to a $75 million
("Credit Facility") and to commit to lend $25 million of the Credit Facility.
Borrowings under the Credit Facility will be used to fund general corporate
operations and future acquisitions, as the Company continues to enhance its
existing market presence. The Company anticipates the Credit Facility will close
early in the second quarter 1999.
 
                                       56
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURES
 
    None.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
    The Company's Board of Directors consists of seven directors, four
designated by Dobson C.C. Limited Partnership ("the Dobson Partnership"), one
designated by J.W. Childs Equity Partners II, L.P. ("Childs") and two selected
jointly by the Dobson Partnership and Childs. See Item 12, Security Ownership of
Certain Beneficial Owners and Management.
 
    The Company's Board of Directors presently consists of six directors, with
one vacancy to be filled by an independent director jointly selected by the
Dobson partnership and Childs. On December 23, 1998, Albert H. Pharis, Jr.,
former President and Chief Executive Officer of Sygnet Wireless, Inc., and Dana
L. Schmaltz, an executive officer of Childs, became directors of the Company and
Thadeus J. Mocarski resigned as a director of the Company. Directors and
executive officers of the Company are elected to serve until they resign or are
removed, or are otherwise disqualified to serve, or until their successors are
elected and qualified. Directors of the Company are elected for one-year terms
at the annual meeting of stockholders which is held in April of each year.
Officers of the Company are appointed at the Board's first meeting after each
annual meeting of stockholders.
 
    The directors, executive officers, and other key employees of the Company
and it's subsidiaries are set forth below. Certain of the officers and directors
hold or have held positions in Dobson Communications and several of its
subsidiaries. The ages of the persons set forth below are as of December 31,
1998.
 
<TABLE>
<CAPTION>
NAME                                      AGE                                    POSITION
------------------------------------      ---      ---------------------------------------------------------------------
<S>                                   <C>          <C>
Everett R. Dobson(1)................          39   Chairman of the Board and Chief Executive Officer of Dobson
                                                     Communications and Chairman of the Board, Chief Executive Officer
                                                     and Secretary of Logix
Stephen T. Dobson(1)................          35   President and Director
William J. Hoffman, Jr..............          36   Executive Vice President and Chief Operating Officer
James R. Rutherford.................          41   President of Dobson Telephone Company and Vice President of Network
                                                     Deployment
Geoffrey M. Boyd....................          31   Executive Vice President and Chief Financial Officer
Brian W. Boone......................          28   Treasurer
Walker L. Fleming...................          47   Senior Vice President of Network Operations of Logix Communications
                                                     Corporation
Robert L. Scott.....................          35   Senior Vice President of Network and Technology Systems of Logix
                                                     Communications Corporation
Darren K. Johnston..................          25   Vice President of Sales of Logix Communications Corporation
E. Jay Emmet........................          38   Vice President of Marketing of Logix Communications Corporation
Russell L. Dobson(1)................          63   Director
Justin L. Jaschke...................          39   Director
Albert H. Pharis, Jr................          48   Director
Dana L. Schmaltz....................          31   Director
</TABLE>
 
------------------------
 
(1) Everett R. Dobson and Stephen T. Dobson are sons of Russell L. Dobson.
 
    Logix was incorporated under the name "Dobson Wireline Company" in December
1997 in connection with a corporate reorganization (the "Reorganization")
pursuant to which Dobson Communications
 
                                       57
<PAGE>
segregated its wireline and wireless activities. In October 1998, the Company
changed its name to "Logix Communications Enterprises, Inc."
 
    EVERETT R. DOBSON has served as Chairman of the Board, Chief Executive
Officer and Secretary of the Company since its formation in December 1997 and as
a director and officer of Dobson Communications since 1982. From 1990 to 1996,
he served as a director, President and Chief Operating Officer of Dobson
Communications. He was elected Chairman of the Board and Chief Executive Officer
of Dobson Communications in April 1996. Mr. Dobson devotes approximately 40% of
his time to the Company. Mr. Dobson served on the board of the Cellular
Telecommunications Industry Association ("CTIA") in 1993 and 1994. He holds a
B.A. in Economics from Southwestern Oklahoma State University ("SWOSU") where he
currently sits on the SWOSU Foundation Board and chairs the investment
committee.
 
    STEPHEN T. DOBSON has served as President and as a director of the Company
since March 1998, and has been an officer of the Company since its incorporation
in 1997. He has been a director of Dobson Communications since 1990. He has
served as Treasurer and Secretary of Dobson Communications since 1990 and
General Manager and Secretary of Dobson Telephone since 1994 and 1990,
respectively. However, Mr. Dobson devotes substantially all of his time to the
Company. He became President of Logix Communications Corporation in January
1997. Mr. Dobson is a member of the Western Rural Telephone Association
("WRTA"), National Telephone Cooperative Association and Telecommunications
Resellers Association. He holds a B.S. in business administration from the
University of Central Oklahoma.
 
    WILLIAM J. HOFFMAN, JR. has served as Executive Vice President and Chief
Operating Officer of the Company since October 1997. Prior to joining Dobson
Communications, Mr. Hoffman was employed by Intermedia Communications, Inc. as
Division Vice President--Florida Division from 1995 to 1997 and from 1987 to
1995 by Sprint Communications, serving as Branch Manager, Senior National
Account Manager, Product Marketing Manager and National Account Consultant. He
was a Captain in the U.S. Army in Europe working in military intelligence from
1983 to 1987. Mr. Hoffman holds a B.S. in electrical engineering from Auburn
University.
 
    JAMES R. RUTHERFORD became President of Dobson Telephone Company, Inc., in
March 1998. Mr. Rutherford has been employed by Dobson Telephone and its
subsidiaries since 1988 and has worked in various capacities, including manager
and coordinator of contract engineering and construction, outside plant manager,
general manager, and assisted in the start-up and development of Logix's ICP
operations. Prior to joining Dobson Telephone, Mr. Rutherford was employed by
C.H. Guernsey & Co., a telecommunications engineering firm, for ten years
working in outside plant engineering and design, and project coordination. He
serves as a director of the Oklahoma High Cost Fund Board and is actively
involved in the Oklahoma Telephone Association ("OTA") and the WRTA industry
organizations. In addition, Mr. Rutherford serves on the Oklahoma Rural
Telephone Companies technical and regulatory committees.
 
    GEOFFREY M. BOYD has served as Executive Vice President and Chief Financial
Officer for the Company since November 1998. Mr. Boyd came to the Company from
Dobson Communications where he served as Director of Mergers & Acquisitions and
strategic planning since September of 1997. He has been instrumental in handling
over $1.0 billion in acquisitions, including the acquisition of American Telco.
Prior to joining Dobson, Mr. Boyd was a Vice President of MLC Industries, Inc.,
the management company for Crowley Cellular Telecommunications LP, Mid-South
Cellular LP, and ACME Paging L.P. Mr. Boyd was also previously a Vice President
in the specialized lending division of Shawmut Bank and an Assistant Vice
President in the communications and media division of CoreStates Bank. He
graduated from Dartmouth College with a B.A. in history.
 
    BRIAN W. BOONE, CPA, has served as the Treasurer since December 1998.
Previously, Mr. Boone was an audit and business advisory manager for Arthur
Andersen LLP where he served both public and privately held companies in the
utility and telecommunications industries. He managed various projects including
annual audits, quarterly reviews, acquisition due diligence, debt and equity
public offerings and
 
                                       58
<PAGE>
various consultation matters on accounting issues. He graduated from the
University of Oklahoma with a Bachelor of Accountancy degree. In addition, Mr.
Boone is a member of the National Investor Relations Instititute ("NIRI") and
the American Institute of Certified Public Accountants ("AICPA").
 
    WALKER L. FLEMING is the Senior Vice President of Network Operations. Mr.
Fleming is responsible for overseeing regulatory, facilities, human resources,
and information systems. During 1998, Mr. Fleming served as Senior Vice
President of Business Operations. Mr. Fleming has held senior executive
positions in Fortune 50 telecommunications and aerospace companies such as
Martin Marietta Aerospace, U.S. West Communications and Tele-TV Systems. Mr.
Fleming served as Vice President of Operations and Project Management for
Tele-TV Systems. He also served as Chief of Staff for Network and Technology at
U.S. West Communications. Prior to that, Mr. Fleming served as the General
Manager of Network and Technology Services and as the Director of Martin
Marietta Aerospace. Mr. Fleming received his B.S. from the University of
Arkansas and his M.B.A. from Southern Methodist University.
 
    ROBERT L. SCOTT is the Senior Vice President of Technology Strategy and
Deployment. Mr. Scott is responsible for business strategy, technology road map
and network deployment. Mr. Scott came to Logix in March 1998 from Janssen
Pharmaceutical where he was the Director of Strategic Planning and Project
Delivery. Mr. Scott's prior experience includes managing General Electric's
corporate Information Technology World-Wide Network Operations Center. In
addition, Mr. Scott worked in Network Operations, Engineering and International
Program Management Strategies for Johnson & Johnson, General Electric and the
ABC Television Network. Prior to those positions, Mr. Scott served in the U.S.
Air Force for six years.
 
    DARREN JOHNSTON joined Logix in January 1998, and currently serves as Vice
President of Sales. His current responsibilities include managing all direct
sales efforts, including commercial and major accounts. Prior to joining Logix,
Darren served in a business development role at US LEC opening new geographical
markets. Prior to his position at US LEC, Mr. Johnston served as a Regional
Sales Director at Intermedia Communications, where he successfully launched the
firm's first competitive local service offering and assisted in the development
and implementation of the end user sales strategy. Before joining Intermedia
Communications, Mr. Johnston served as a Branch Sales Manager at WorldCom.
 
    E. JAY EMMET currently serves as the Vice President of Marketing, where he
oversees product marketing, including data, voice, systems integration and
marketing communications. Mr. Emmet joined Logix in December 1997 as Director of
Voice Marketing. Previously, Mr. Emmet was the Business Cellular Program Manager
for MCI Telecommunications, where his responsibilities included launch of the
MCI Cellular product and integration of the Nationwide Cellular acquisition.
Prior to that, Mr. Emmet was the Product Development Manager for MCI Business
Calling Card. Additional marketing product development experience at MCI
includes billing, debit card, wireless, international, integrated messaging and
electronic commerce. Mr. Emmet was previously with Andersen Consulting's systems
integration group, and served five years as a U.S. Marine Officer. He attended
St. Anselm College and received a B.A. in Liberal Arts, as well as receiving an
M.B.A. in Finance from American University.
 
    RUSSELL L. DOBSON has been a director of Dobson Communications since 1990
and was Chairman of the Board and Chief Executive Officer from 1990 to 1996. Mr.
Dobson joined his father at Dobson Telephone in 1956 and became the controlling
owner and Chief Executive Officer in 1975 when he purchased his father's
interest. He has been active in many industry-related groups, including the OTA,
WRTA and Organization for the Protection and Advancement of Small Telephone
Companies.
 
    JUSTIN L. JASCHKE has been a director of Dobson Communications since October
1996 and of the Company since its incorporation in 1997. Mr. Jaschke has been
the Chief Executive Officer of Verio, Inc., a privately held Internet access
provider, since its inception in March 1996. He is also a member of Verio,
Inc.'s Board of Directors. Prior to forming Verio, Inc., Mr. Jaschke served as
Chief Operating Officer for Nextel Communications, Inc. ("Nextel") following its
merger with OneComm Corporation ("OneComm") in July of 1995. Mr. Jaschke served
as OneComm's President and a member of its Board of
 
                                       59
<PAGE>
Directors from the time that he joined that company in April 1993 until the
merger with Nextel. Mr. Jaschke currently serves as Chairman of the Board of
Directors of V-I-A Internet, Inc. and also serves on the Board of Directors of
Metricom, Inc., a leading wireless data communications provider. From May 1990
to April 1993, Mr. Jaschke served as President and CEO of Bay Area Cellular
Telephone Company. From November 1987 to May 1990, Mr. Jaschke was Vice
President of Corporate Development of PacTel Cellular, and from 1985 to 1987 was
Director of Mergers and Acquisitions of PacTel Corporation. Prior to that, Mr.
Jaschke was a management consultant with Marakon Associates. Mr. Jaschke has a
B.S. in mathematics from the University of Puget Sound and an M.S. in Management
from the Massachusetts Institute of Technology Sloan School of Management.
 
    ALBERT H. PHARIS, JR., became a director of the Company in December 1998.
Mr. Pharis has served as President, Chief Executive Officer and Director of
Sygnet since Sygnet's inception in 1985. He has been active as a board member of
CTIA since 1985 and as a member of the CTIA Executive Committee since 1989. He
has also been Chairman of CTIA's Small Operators Caucus.
 
    DANA L. SCHMALTZ became a director of the Company in accordance with the
terms of the Stockholders' Agreement dated December 23, 1998 between Dobson
Communications and J.W. Childs Associates, L.P. Mr. Schmaltz is a Vice President
of J.W. Childs Associates, L.P. and has been at J.W. Childs Associates, L.P.
since February 1997. From 1995 to 1997, Mr. Schmaltz was an associate at DLJ
Merchant Banking, Inc. Mr. Schmaltz graduated from Dartmouth College in 1989
with a B.A. in History. He received his M.B.A. from the Harvard Graduate School
of Business Administration.
 
                                       60
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
 
    The following table sets forth the cash and non-cash compensation during
1998 earned by the Company's chief executive officer and its other four most
highly compensated executive officers as of December 31, 1998 (the "Named
Executive Officers").
 
                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                        SECURITIES UNDERLYING
                                                                                            OPTION AWARDS
                                                                                           (# OF SHARES)(4)
                                                                                     ----------------------------
                                      ANNUAL COMPENSATION                                 DOBSON
NAME AND PRINCIPAL                 --------------------------      OTHER ANNUAL       COMMUNICATIONS      LOGIX
  POSITION(1)             YEAR      SALARY($)    BONUS(2)($)    COMPENSATION($)(3)         PLAN           PLAN
----------------------  ---------  -----------  -------------  --------------------  -----------------  ---------
<S>                     <C>        <C>          <C>            <C>                   <C>                <C>
Everett R. Dobson.....       1998   $ 152,160            --                --                   --             --
  Chairman of the            1997      69,000        46,000            12,600(6)                --             --
  Board and
  Chief Executive
  Officer
 
Stephen T. Dobson.....       1998     155,200        80,000            32,600                   --             --
  President                  1997     100,000        75,000            13,800(7)                --             --
 
James R. Rutherford...       1998      85,900        34,300                --                   --             --
  President of Dobson        1997      71,400        20,000                --                1,207             --
  Telephone
 
William Hoffman,             1998     136,100        99,500            11,800(8)                --      1,042,500
  Jr..................
                             1997      37,400        14,800(9)                                 664             --
 
<CAPTION>
 
NAME AND PRINCIPAL            ALL OTHER
  POSITION(1)            COMPENSATION($)(5)
----------------------  ---------------------
<S>                     <C>
Everett R. Dobson.....        $   2,560
  Chairman of the                 2,200
  Board and
  Chief Executive
  Officer
Stephen T. Dobson.....            4,700
  President                       6,500
James R. Rutherford...            4,900
  President of Dobson             3,600
  Telephone
William Hoffman,                     --
  Jr..................
                                     --
</TABLE>
 
------------------------------
 
 (1) Certain officers of the Company are also officers of Dobson Communications
     and various of its other subsidiaries. Stephen T. Dobson and James R.
     Rutherford are full-time employees of Logix. As a result, all of the
     compensation paid to these individuals, whether by Dobson Communications or
     Logix is included in the above summary compensation table. With respect to
     Everett R. Dobson, the Chief Executive Officer, the above table only
     includes that portion of his annual compensation which is allocated to
     Logix, which is currently approximately 40%. See Item 13, Certain
     Relationships and Related Transactions.
 
 (2) The bonus amount for Everett R. Dobson with respect to services performed
     in 1998 has not yet been determined. The bonus for 1998 represents the
     bonus paid in 1999 with respect to services performed in 1998. The bonus
     for 1997 represents the bonus paid in 1998 with respect to services
     performed in 1997.
 
 (3) Represents the value of perquisites and other personal benefits in excess
     of 10% of annual salary and bonus.
 
 (4) Key employees of the Company may participate in both the Dobson
     Communications Plan and the Logix Plan.
 
 (5) Includes the matching contributions made by Dobson Communications to the
     account of the executive officer under Dobson Communications' 401(k) Profit
     Sharing Plan.
 
 (6) Includes $8,400 for personal use of Dobson Communications aircraft and
     $4,200 for a company-provided vehicle.
 
 (7) Includes $10,400 for personal use of Dobson Communications aircraft and
     $3,400 for a company-provided vehicle.
 
 (8) Includes $7,900 for personal use of Dobson Communications aircraft and
     $3,900 for a company-provided vehicle.
 
 (9) Includes $10,000 received upon commencement of employment.
 
                                       61
<PAGE>
    The Named Executive Officers listed below were granted options to purchase
shares of Dobson Communications' Class B Common Stock or Logix common stock in
1998. No stock options were exercised by the Named Executive Officers in 1998:
 
                             OPTION GRANTS IN 1998
 
<TABLE>
<CAPTION>
                                                     INDIVIDUAL GRANTS
                                                ----------------------------                POTENTIAL REALIZABLE
                                                  PERCENT OF                               VALUE AT ANNUAL RATES
                                                 TOTAL OPTIONS                             OF STOCK APPRECIATION
                                    NUMBER OF     GRANTED TO      EXERCISE                   FOR OPTION TERM(1)
                                     OPTIONS     EMPLOYEES IN       PRICE     EXPIRATION   ----------------------
NAME                                 GRANTED         1998         ($/SHARE)      DATE        5% ($)     10% ($)
----------------------------------  ----------  ---------------  -----------  -----------  ----------  ----------
<S>                                 <C>         <C>              <C>          <C>          <C>         <C>
LOGIX STOCK
  William J. Hoffman, Jr..........   1,042,500          63.1%     $    2.00      7/31/08    1,311,245   3,322,953
</TABLE>
 
------------------------
 
(1) The assumed annual rates of stock price appreciation of 5% and 10% are set
    by the Securities and Exchange Commission and are not intended as a forecast
    of possible future appreciation in stock prices.
 
                          1998 YEAR-END OPTION VALUES
 
<TABLE>
<CAPTION>
                                                                      NUMBER OF SECURITIES
                                                                           UNDERLYING        VALUE OF UNEXERCISED
                                                                           UNEXERCISED           IN-THE-MONEY
                                                                       OPTIONS AT 12/31/98   OPTIONS AT 12/31/98
                                                                        (#) EXERCISABLE/       ($) EXERCISABLE/
NAME                                                                    UNEXERCISABLE(1)        UNEXERCISABLE
--------------------------------------------------------------------  ---------------------  --------------------
<S>                                                                   <C>                    <C>
DOBSON COMMUNICATIONS STOCK
  William J. Hoffman, Jr............................................            133/531          $68,392/$273,568
  James R. Rutherford...............................................            241/966         $136,391/$545,564
 
LOGIX STOCK
  William J. Hoffman, Jr............................................        0/1,042,500               --
</TABLE>
 
------------------------
 
(1) The value of unexercised in-the-money options at December 31, 1998 is
    computed as the product of (i) stock value at December 31, 1998 less stock
    option exercise price and (ii) number of underlying securities at December
    31, 1998.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
    The Company has a separate compensation committee of two members of its
board of directors, Russell L. Dobson and Dana L. Schmaltz. The compensation
committee sets the compensation for the executive officers of the Company. Each
of the directors of the Company also serve on the board of directors of Dobson
Communications and on the boards of directors of various subsidiaries of Dobson
Communications. Mr. Schmaltz and Mr. Russell Dobson are the compensation
committee for Dobson Communications and its other subsidiaries, so they also
participate in the deliberations concerning executive officers' compensation for
Dobson Communications and its subsidiaries.
 
EMPLOYMENT AGREEMENTS
 
    In connection with the employment of William J. Hoffman, Jr., in 1997,
Dobson Communications agreed to provide compensation in the form of a
combination of some or all of the following: salary, bonus, stock options and/or
other benefits. The terms of Mr. Hoffman's employment are a $10,000 payment upon
acceptance of employment, an initial annual salary of $110,000, an annual bonus
ranging from 30% to 50%
 
                                       62
<PAGE>
of his annual salary, country club initiation fees and dues, a five-year option
to purchase 664 shares of Dobson Communications' Class B Common Stock at an
exercise price equal to its fair market value at date of grant, with 60% of the
options vesting ratably over five years and 40% vesting over five years based on
the achievement of annual performance objectives. Mr. Hoffman is also entitled
to a severance payment equal to one year's salary in the event of termination of
employment of Mr. Hoffman without cause. The options to purchase shares of Class
B Common Stock held by Mr. Hoffman become fully vested upon a change of control
of Dobson Communications. Effective August 1, 1998, and pursuant to the Logix
Stock Option Plan, the Company granted to Mr. Hoffman options to purchase an
aggregate of 1,042,500 shares of Logix common stock over a ten year term at an
exercise price of $2.00 per share, which options vest at the rate of 20% on each
anniversary date of the grant.
 
    In connection with the employment of Geoffrey M. Boyd, the Company agreed to
provide compensation in the form of a combination of salary, bonus, stock
options and other benefits. The terms of Mr. Boyd's employment are an annual
salary of $125,000, bonus of up to 25% of his annual salary, country club
initiation fees and dues and a five year option to purchase up to 210,000 shares
of the Company's common stock at an exercise price pursuant to the Logix Stock
Option Plan. After one full year of service, Mr. Boyd may receive an option to
purchase an additional 375,000 shares of the Company's common stock, based on
performance reviews. Mr. Boyd is also entitled to a severance payment equal to
one year's salary in the event of termination of employment without cause, in
addition to full vesting of any stock options that would have vested by the end
of the calendar year during which he was terminated.
 
    Effective September 1, 1998, Dobson Communications entered into a consulting
agreement with Russell L. Dobson. Under the terms of the agreement, Mr. Dobson
has been retained by Dobson Communications from September 1, 1998 through August
31, 2008. In exchange for Mr. Dobson's services, the Company will provide
monthly compensation of $15,000 and insurance benefits commensurate with the
Company's employee plan. Mr. Dobson's responsibilities will include representing
the Company at various functions, assisting with regulatory matters and
assisting executive officers of the Company in strategic planning and
forecasting. In addition, Mr. Dobson has agreed not to compete with the Company.
During 1998, Mr. Dobson was paid $195,000 by Dobson Communications and this
amount was allocated entirely to Logix.
 
    Effective December 23, 1998 Albert H. Pharis, Jr. became a consultant to
Dobson Communications, to assist Dobson Communications on an as-needed basis,
for term of five years. Mr. Pharis will receive a fee of $40,000 for the first
90 days of such consulting period and an annual fee of $60,000 thereafter to be
paid by Dobson Communications. In addition, Mr. Pharis received options to
purchase 833 shares of the Dobson Communications Class B Common Stock at an
exercise price of $665 per share. Mr. Pharis' options vests ratable over a
five-year period and fully vests upon a change of control of Dobson
Communications.
 
DIRECTOR COMPENSATION
 
    Dobson Communications reimburses directors for out-of-pocket expense
incurred in attending board meetings. Directors who are officers or consultants
to the Company receive no additional compensation for services rendered as
directors.
 
    The Compensation Committee of the Board of Directors of the Company
determines the compensation of the Company's executive officers. During fiscal
year 1998, the members of the Compensation Committee were Russell L. Dobson,
Justin L. Jaschke and a former director. Russell L. Dobson previously served as
Chairman of the Board and Chief Executive Officer of Dobson Communications from
1990 to 1996. For a description of certain transactions between Mr. Dobson,
Dobson Communications and the Company, see Item 13, Certain Relationships and
related Transactions.
 
                                       63
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    All of the issued and outstanding capital stock of the Company is owned
beneficially and of record by Dobson Operating Company which is a wholly-owned
subsidiary of Dobson Communications. The following table provides information,
as of December 31, 1998, concerning beneficial ownership of Dobson Communication
Class A Common Stock, Class D Preferred Stock, and Class G Preferred Stock by
(a) each person known by the Company to beneficially own more than 5% of such
stock, (b) each director and named executive officer of Dobson Communications
who beneficially owns any Class A Common Stock, Class D Preferred Stock, or
Class G Preferred Stock of Dobson Communications, and (c) all directors and
executive officers as a group:
 
<TABLE>
<CAPTION>
                                           CLASS A COMMON STOCK      CLASS D PREFERRED        CLASS G PREFERRED
                                                                           STOCK                    STOCK
                                          ----------------------   ----------------------   ----------------------    PERCENT OF
                                          NUMBER OF   PERCENT OF   NUMBER OF   PERCENT OF   NUMBER OF   PERCENT OF   TOTAL VOTING
NAME AND ADDRESS OF BENEFICIAL OWNER       SHARES       CLASS       SHARES       CLASS       SHARES       CLASS        POWER(1)
----------------------------------------  ---------   ----------   ---------   ----------   ---------   ----------   ------------
<S>                                       <C>         <C>          <C>         <C>          <C>         <C>          <C>
Everett R. Dobson (2)...................   471,388       95.8%       3,534         4.7%      37,853       100.0%         84.8%
  13439 N. Broadway Ext.
  Oklahoma City, OK 73114
 
Russell L. Dobson.......................     3,154          *           --          --           --          --             *
  13439 N. Broadway Ext.
  Oklahoma City, OK 73114
 
J.W. Childs Associates, L.P. (3)........    17,412        3.5%      71,560        95.3%          --          --          14.7%
 
All directors and executive officers as
  a group (11 persons)..................   491,954      100.0%      75,094       100.0%      37,853       100.0%        100.0%
</TABLE>
 
------------------------------
 
*   Less than 1%.
 
(1) In calculating the percent of total voting power, the voting power of shares
    of Class A Common Stock (one vote per share) and Class D Preferred Stock
    (presently equivalent to one vote per share) is aggregated.
 
(2) All such shares are held by the Dobson Partnership. As the president and
    sole director and shareholder of RLD, Inc., the general partner of the
    Dobson Partnership, Everett R. Dobson has voting and investment power with
    respect to such shares.
 
(3) All such shares are beneficially owned by Dana L. Schmaltz, who is a
    director of the Company.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    The Company has adopted a policy requiring that any material transaction
between the Company and persons or entities affiliated with officers, directors,
or principal stockholders of Dobson Communications be on terms no less favorable
to the Company than reasonably could have been obtained in an arm's length
transaction with independent third parties. Any other matters involving
potential conflicts of interests are to be resolved on a case-by-case basis.
 
    Prior to November 1, 1998, Dobson Communications leased its headquarters
from WillRuss Limited Liability Company ("WillRuss") pursuant to a 10-year lease
expiring in 2005. WillRuss is owned by Russell L. Dobson, a director of the
Company, and his wife. Monthly rent under the lease was approximately $23,000,
or $.93 per square foot. In October 1998, WillRuss sold this building to an
unrelated third party. As part of this sale transaction, Dobson Communications
entered into an agreement with the buyer to lease the building for a one-year
term at a monthly rent of approximately $19,000. The Company subleases a portion
of the space leased by Dobson Communications, and is allocated a portion of the
rent. The amount allocated to the Company in 1998 was $113,000.
 
    Dobson Communications owns approximately 15% of the outstanding common stock
of Zenex. On February 18, 1999, Prestige Investments, Inc., Zenex Long Distance,
Inc. and various shareholders of Zenex Long Distance, Inc. executed a Stock
Purchase Agreement which provides for the acquisition of Zenex by Prestige
Investments, Inc. Completion of the sale is subject to the completion of various
 
                                       64
<PAGE>
regulatory approvals and filings. The exact amount of consideration to be
received by Dobson Communications as a selling shareholder is presently
undetermined. Everett R. Dobson was a director of Zenex from August 1995 to
September 1997. On January 6, 1998, a subsidiary of the Company purchased
contractual rights, information data and other rights with respect to certain of
Zenex's long distance customers located in areas served by Dobson Telephone for
$105,000. In addition, the Company recently purchased certain long distance
customers and related assets for approximately $4.5 million. In connection with
the purchase of these assets of Zenex, a note payable in the amount of $284,765,
including accrued interest, from Zenex to Everett R. Dobson was paid in full.
 
    Beginning in 1997 Dobson Communications began to provide certain
administrative services, including accounting, information systems management,
human resources management and marketing. Additionally, officers of Logix have
also been or are currently officers of Dobson Communications and various of its
other subsidiaries. Logix reimburses Dobson Communications based on Dobson
Communications' cost of providing the services. Dobson Communications allocates
these costs based on the subsidiaries' usage of corporate services. In 1998, the
total amount charged to Logix for these administrative services and officer
compensation was $4,312,000. Beginning in the fourth quarter of 1998, Logix
began performing its own administrative services and, at year end, no longer
relied on Dobson Communications for administrative support. As of December 31,
1998, the only shared resources will be usage of Dobson Communications owned and
leased planes and the services of Everett R. Dobson.
 
    The Company carries telephone traffic, provides long-haul fiber transport
services and provides network monitoring for Dobson Communications and its
subsidiaries. These services amounted to $1.3 million in 1998.
 
    The Company is a party to a tax sharing agreement with Dobson Communications
and its other subsidiaries. The Company, as a member of the affiliated group
with Dobson Communications joins with Dobson Communications and its other
subsidiaries in filing a consolidated federal income tax return. Under the tax
sharing agreement, each subsidiary's contribution toward the group's
consolidated federal income tax liability is determined as if such party were at
all times a separate taxpayer not included in the group. Based on this
determination of separate tax liability, each subsidiary pays to Dobson
Communications an amount in lieu of taxes equal to the amount the subsidiary
would be obligated to pay if it filed returns as a separate taxpayer. If, but
only to the extent that, the group realizes a tax benefit for any taxable year
as a result of the inclusion of a subsidiary's tax items in the determination of
tax liability of the group, Dobson Communications will pay to the subsidiary an
amount equal to such tax benefits realized.
 
    As a result of various intercompany activities, including the tax sharing
agreement, the Company had receivables from Dobson Communications and its
subsidiaries totaling $5.1 million at December 31, 1998.
 
                                       65
<PAGE>
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
<TABLE>
<C>     <S>
(a)(1)  The following financial statements of Logix Communications Enterprises,
        Inc. are included in Item 8:
 
            Consolidated Balance Sheets as of December 31, 1997 and 1998.
 
            Consolidated Statements of Operations for the years ended December
             31, 1996, 1997 and 1998.
 
            Consolidated Statements of Stockholders' Equity (Deficit) for the
             years ended December 31, 1996, 1997 and 1998.
 
            Consolidated Statements of Cash Flows for the years ended December
             31, 1996, 1997 and 1998.
 
            Notes to Consolidated Financial Statements.
 
   (2)  Schedule of Valuation Allowance Accounts
</TABLE>
 
        All other schedules have been omitted since the required information is
    not present, or not presence in amounts sufficient to require submission of
    the schedule, or because the information required is included in the
    consolidated financial statements or notes thereto.
 
                                       66
<PAGE>
                    EPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To the Board of Directors of
 
Logix Communications Enterprises, Inc.:
 
    We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Logix Communications Enterprises, Inc.
and subsidiaries included in the Form 10-K and have issued our report thereon
dated March 15, 1999 (except with respect to the matter discussed in Note 13, as
to which the date is March 29, 1999). Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The schedule listed on
Page 68 is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic consolidated financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated statements taken as a whole.
 
                                          ARTHUR ANDERSEN LLP
 
Oklahoma City, Oklahoma,
 
March 15, 1999
 
                                       67
<PAGE>
                                                                     SCHEDULE II
 
                     LOGIX COMMUNICATIONS ENTERPRISES, INC.
                    SCHEDULE OF VALUATION ALLOWANCE ACCOUNTS
                  YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
 
<TABLE>
<CAPTION>
                                                                 BALANCE AT  CHARGED TO
                                                                 BEGINNING    COSTS AND                BALANCE AT
                                                                  OF YEAR     EXPENSES    DEDUCTIONS   END OF YEAR
                                                                 ----------  -----------  -----------  -----------
<S>                                                              <C>         <C>          <C>          <C>
Allowance for Doubtful Accounts Receivable:
1996...........................................................  $   14,348   $  29,593    $  30,416    $  13,525
1997...........................................................      13,525      23,798       21,065       16,258
1998...........................................................      16,258     353,943       22,796      347,405
</TABLE>
 
  Allowance for doubtful accounts are deducted from accounts receivable in the
                                 balance sheet.
 
                                       68
<PAGE>
(3) Exhibits
 
<TABLE>
<CAPTION>
  EXHIBIT                                                                                                   METHOD OF
  NUMBERS                                           DESCRIPTION                                               FILING
-----------  ------------------------------------------------------------------------------------------  ----------------
<C>          <S>                                                                                         <C>
       3.1   Registrant's Amended and Restated Certificate of Incorporation, as amended................        (1)[3.1]
 
       3.2   Registrant's By-laws, as amended..........................................................        (1)[3.2]
 
       4.1   Telephone Loan Contract dated as of November 7, 1958 between Dobson Telephone Company,
               Inc. and United States of America.......................................................        (2)[4.2]
 
       4.2   Telephone Loan Contract dated as of March 19, 1956 between McLoud Telephone Company and
               United States of America................................................................        (2)[4.3]
 
       4.3   Telephone Loan Contract dated as of January 15, 1993 between Dobson Telephone Company,
               Inc., Rural Telephone Bank and United States of America.................................        (2)[4.4]
 
       4.4   Restated Mortgage, Security Agreement and Financing Statement dated as of May 15, 1993
               between Dobson Telephone Company and United States of America...........................        (2)[4.5]
 
       4.5   Indenture dated as of June 12, 1998 between the Registrant, as Issuer, and United States
               Trust Company of New York, as Trustee...................................................        (1)[4.5]
 
       4.6   Escrow and Security Agreement dated June 12, 1998 among the Registrant as Pledgor, and
               Morgan Stanley & Co. Incorporated, Montgomery Securities LLC as Placement Agents, and
               United States Trust Company of New York, as Trustee.....................................        (1)[4.6]
 
       4.7   Registration Rights Agreement dated June 12, 1998 between the Registrant and Morgan
               Stanley & Co. Incorporated, and NationsBanc Montgomery Securities LLC...................        (1)[4.7]
 
      10.1   Stock Purchase Agreement, dated as of March 26, 1998, between the shareholders of American
               Telco Inc. and American Telco Network Services, Inc. and the Registrant.................        (3)[2.1]
 
      10.2   First Amendment to Stock Purchase Agreement among American Telco Inc. and American Telco
               Network Services, Inc. and the Registrant...............................................        (3)[2.2]
 
      10.3*  Letter dated September 16, 1997 from Registrant to William J. Hoffman, Jr., describing
               employment arrangement..................................................................        (4)[10.3.4]
 
      10.4*  Registrant's 1998 Stock Option Plan.......................................................        (1)[10.4]
 
      10.5*  Letter dated October 22, 1998, from the Registrant to Geoffrey M. Boyd describing
               employment arrangement..................................................................        (5)
 
      11     Statement re computation of per share earnings............................................        (5)
 
      21     Subsidiaries..............................................................................
 
      27.1   1998 Financial Data Schedule..............................................................        (5)
 
      27.2   1997 Restated Financial Data Schedule.....................................................        (5)
</TABLE>
 
------------------------
 
(1) Previously filed as an exhibit to the Company's Registration Statement on
    Form S-4 (Registration No. 333-58693), as the exhibit number indicated in
    brackets and incorporated herein by reference;
 
(2) Filed as an exhibit to the Registration Statement on Form S-4 (Registration
    No. 333-23769), as the exhibit number indicated in brackets, by Dobson
    Communications Corporation, the Company's parent, and incorporated herein by
    reference;
 
                                       69
<PAGE>
(3) Filed as an exhibit to Current Report on Form 8-K on June 30, 1998, of
    Dobson Communications Corporation, the Registrant's parent (File No.
    333-23769), as the exhibit number indicated in brackets, and incorporated
    herein by reference;
 
(4) Filed as an exhibit the Annual Report on Form 10-K for the year ended
    December 31, 1998, of Dobson Communications Corporation, the Registrant's
    parent, as the exhibit number indicated in brackets, and incorporated herein
    by reference; or
 
(5) Filed herewith.
 
*   Management contract or compensatory plan or arrangement.
 
------------------------
 
(b) The Company did not file any Current Reports on Form 8-K during the quarter
ended December 31, 1998.
 
                                       70
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of the Section 13 or 15(d) 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, on the 31st day of
March, 1999.
 
<TABLE>
<S>                             <C>  <C>
                                LOGIX COMMUNICATIONS ENTERPRISES, INC.
 
                                By:            /s/ EVERETT R. DOBSON
                                     -----------------------------------------
                                                 Everett R. Dobson
                                             CHAIRMAN OF THE BOARD AND
                                              CHIEF EXECUTIVE OFFICER
</TABLE>
 
    Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
capacities indicated on the 31(st) day of March, 1999.
 
<TABLE>
<CAPTION>
                          NAME                                                     TITLE
--------------------------------------------------------  --------------------------------------------------------
 
<C>                                                       <S>
                 /s/ EVERETT R. DOBSON                    Chairman of the Board, Chief Executive Officer
      --------------------------------------------          (Principal Executive Officer), Secretary and Director
                   Everett R. Dobson
 
                 /s/ STEPHEN T. DOBSON                    President and Director
      --------------------------------------------
                   Stephen T. Dobson
 
                  /s/ GEOFFREY M. BOYD                    Executive Vice President and Chief Financial Officer
      --------------------------------------------          (Principal Financial Officer and Principal Accounting
                    Geoffrey M. Boyd                        Officer)
 
                 /s/ RUSSELL L. DOBSON                    Director
      --------------------------------------------
                   Russell L. Dobson
 
                 /s/ JUSTIN L. JASCHKE                    Director
      --------------------------------------------
                   Justin L. Jaschke
 
               /s/ ALBERT H. PHARIS, JR.                  Director
      --------------------------------------------
                 Albert H. Pharis, Jr.
 
                  /s/ DANA L. SCHMALTZ                    Director
      --------------------------------------------
                    Dana L. Schmaltz
</TABLE>
 
                                       71
<PAGE>
    Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.
 
    The Company has not sent, and does not intend to send, an annual report to
security holders covering its last fiscal year, nor has the Company sent a proxy
statement, form of proxy or other proxy soliciting material to its security
holders with respect to any annual meeting of security holders.
 
                                       72