##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2006o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to   Commission File
    No. 333-60639
      American Cellular
    Corporation
 (Exact name of registrant as
    specified in its charter)
  Delaware

22-3043811(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)14201 Wireless Way
    Oklahoma City, Oklahoma

73134(Zip Code)(Address of principal executive
    offices)   (405) 529-8500
 (Registrants telephone
    number, including area code)
     þ o
    Rule 12b-2
 o o þ
  Rule 12b-2 o þ




---



##### 



AMERICAN
    CELLULAR CORPORATION
  INDEX TO
    FORM 10-Q
  ItemNumber



PagePART I.
    FINANCIAL INFORMATION1

Condensed
    Consolidated Financial Statements (Unaudited):Condensed
    Consolidated Balance Sheets as of September 30, 2006 and
    December 31, 2005


2Condensed
    Consolidated Statements of Operations for the Three and Nine
    Months Ended September 30, 2006 and 2005


3Condensed
    Consolidated Statements of Cash Flows for the Nine Months Ended
    September 30, 2006 and 2005


4Notes to Condensed
    Consolidated Financial Statements


52

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


93

Quantitative and
    Qualitative Disclosures about Market Risk


204

Controls and
    Procedures


20PART II.
    OTHER INFORMATION1

Legal
    Proceedings


211A

Risk
    Factors


212

Unregistered Sales
    of Equity Securities and Use of Proceeds


213

Defaults Upon
    Senior Securities


214

Submission of
    Matters to a Vote of Security Holders


215

Other
    Information


216

Exhibits


21Certification by our Principal Executive OfficerCertification of our Principal Financial OfficerCertification by our Principal Executive OfficerCertification of our Principal Financial Officer   1




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##### Table of Contents



PART I.



FINANCIAL
    INFORMATION  Item 1.
    Financial
    Statements  AMERICAN
    CELLULAR CORPORATION AND SUBSIDIARIES
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
  September 30, 2006


December 31, 2005(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
114,126,385


$
76,610,593Accounts receivable, net


51,806,633



47,268,967Inventory


3,990,346



5,066,257Deferred tax assets


2,480,000



3,324,000Prepaid expenses and other


3,493,476



1,543,322Total current assets


175,896,840



133,813,139PROPERTY, PLANT AND EQUIPMENT, net
    (Note 3)


160,211,457



158,285,766OTHER ASSETS:Accounts receivable-affiliates


2,389,923



2,777,611Wireless license acquisition costs


706,986,381



681,424,159Goodwill


583,825,442



574,813,057Deferred financing costs, net


13,650,621



13,427,299Customer list, net


22,750,170



41,278,292Other non-current assets


18,387,773



664,602Total other assets


1,347,990,310



1,314,385,020Total assets

$
1,684,098,607


$
1,606,483,925LIABILITIES AND
    STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable

$
21,401,729


$
18,076,266Accrued expenses


8,301,550



9,710,379Accrued interest payable


15,987,075



37,863,006Deferred revenue and customer
    deposits


14,255,520



12,680,381Current portion of credit facility
    and notes payable


1,000,000



Total current liabilities


60,945,874



78,330,032OTHER LIABILITIES:Credit facility and notes payable,
    net (Note 4)


1,014,558,246



914,793,408Deferred tax liabilities


154,969,088



157,685,899Deferred gain on disposition of
    operating assets and other non-current liabilities


29,280,289



30,743,034Commitments (Note 5)STOCKHOLDERS EQUITY:Class A common stock,
    $.01 par value, 350 shares authorized and issued at
    September 30, 2006 and 50 shares authorized and issued
    at December 31, 2005


4



1Class B common stock,
    $.01 par value, zero shares authorized and issued at
    September 30, 2006 and 300 shares authorized and
    issued at December 31, 2005






3Paid-in capital


474,547,248



474,547,248Accumulated deficit


(50,202,142
)


(49,615,700
)Total stockholders equity


424,345,110



424,931,552Total liabilities and
    stockholders equity

$
1,684,098,607


$
1,606,483,925    2




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##### Table of Contents



AMERICAN
    CELLULAR CORPORATION AND SUBSIDIARIES



CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS  For the Nine Months EndedFor the Three Months Ended September 30,


September 30,2006


2005


2006


2005(Unaudited)


(Unaudited)OPERATING REVENUE:Service revenue

$
91,612,664


$
92,712,559


$
268,606,316


$
270,120,374Roaming revenue


39,495,571



34,658,745



91,974,106



83,341,930Equipment and other revenue


5,582,874



4,794,133



17,510,944



15,740,661Total operating revenue


136,691,109



132,165,437



378,091,366



369,202,965OPERATING EXPENSES:Cost of service (exclusive of
    depreciation and amortization shown separately below)


35,648,793



30,871,850



96,252,358



87,380,767Cost of equipment


12,475,625



13,448,679



38,621,649



37,875,095Marketing and selling


17,197,344



15,003,570



49,259,700



44,270,890General and administrative


21,343,661



22,296,760



63,835,477



66,715,318Depreciation and amortization


19,342,866



20,356,770



60,745,077



62,773,512Gain on disposition of operating
    assets


(716,232
)


(648,566
)


(2,200,676
)


(1,587,704
)Total operating expenses


105,292,057



101,329,063



306,513,585



297,427,878OPERATING INCOME


31,399,052



30,836,374



71,577,781



71,775,087OTHER EXPENSE:Interest expense


(24,539,929
)


(23,781,690
)


(72,103,694
)


(71,343,502
)Other expense, net


(591,986
)


(399,924
)


(1,333,340
)


(1,498,253
)INCOME (LOSS) BEFORE INCOME TAXES


6,267,137



6,654,760



(1,859,253
)


(1,066,668
)Income tax (expense) benefit


(1,784,422
)


(2,099,129
)


1,272,811



835,014NET INCOME (LOSS)

$
4,482,715


$
4,555,631


$
(586,442
)

$
(231,654
)    3




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##### Table of Contents



AMERICAN
    CELLULAR CORPORATION AND SUBSIDIARIES



CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS  For the Nine Months EndedSeptember 30,2006


2005(Unaudited)CASH FLOWS FROM OPERATING
    ACTIVITIES:Net loss

$
(586,442
)

$
(231,654
)Adjustments to reconcile net loss
    to net cash provided by operating activities, net of effects of
    acquisitions Depreciation and amortization


60,745,077



62,773,512Amortization of bond premium and
    deferred financing costs


2,554,825



2,536,824Deferred income taxes


(1,872,811
)


(820,923
)Gain on disposition of operating
    assets


(2,200,676
)


(1,587,704
)Other operating activities


35,043



5,928Changes in current assets and
    liabilities Accounts receivable


(4,537,666
)


(12,633,108
)Inventory


1,075,911



698,123Prepaid expenses and other


(1,349,765
)


(895,503
)Accounts payable


3,325,463



4,508,101Accrued expenses


(23,284,760
)


(22,234,011
)Deferred revenue and customer
    deposits


1,575,139



(96,255
)Net cash provided by operating
    activities


35,479,338



32,023,330CASH FLOWS FROM INVESTING
    ACTIVITIES:Capital expenditures


(40,030,493
)


(36,266,014
)Purchase of wireless licenses and
    properties


(35,594,607
)


(15,174,662
)Deposit on FCC licenses


(17,000,000
)


Proceeds from the sale of assets


5,450



30,948,317Change in
    receivable/payable  affiliates


(2,607,029
)


2,980,411Other investing activities


(723,558
)


(289,494
)Net cash used in investing
    activities


(95,950,237
)


(17,801,442
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Proceeds from credit facility


100,000,000



Deferred financing costs


(2,013,309
)


Other financing activities






(27,287
)Net cash provided by (used in)
    financing activities


97,986,691



(27,287
)NET INCREASE IN CASH AND CASH
    EQUIVALENTS


37,515,792



14,194,601CASH AND CASH EQUIVALENTS,
    beginning of period


76,610,593



41,488,979CASH AND CASH EQUIVALENTS, end of
    period

$
114,126,385


$
55,683,580SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION:Cash paid for Interest

$
91,416,180


$
90,875,165Income taxes

$
525,448


$
62,050SUPPLEMENTAL DISCLOSURES OF
    NON-CASH INVESTING AND FINANCING ACTIVITIES:Transfer of fixed assets from
    affiliates

$
2,994,717


$
35,323    4




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##### Table of Contents



AMERICAN
    CELLULAR CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
    Form 10-K
  1.
    Organization    2.
    Business
    Combinations  Recent
    Acquisitions
         5




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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.  Property,
    Plant and Equipment
    September 30,


December 31,2006


2005($ in thousands)Gross property, plant and equipment

$
359,449


$
315,158Accumulated depreciation


(199,238
)


(156,872
)Property, plant and equipment, net

$
160,211


$
158,286   4.
    Credit
    Facility and Notes Payable    September 30,


December 31,2006


2005($ in thousands)9.5% senior subordinated notes

$
15,558


$
14,794Credit facility


100,000



10.0% senior notes


900,000



900,000Total credit facility and notes
    payable

$
1,015,558


$
914,794   Credit
    Facility
    
    a 5-year
    $50.0 million senior secured revolving credit facility;
    a 7-year
    $100.0 million senior secured multiple draw term loan
    facility; and
    a 7-year
    $100.0 million senior secured delayed draw term loan
    facility.       6




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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            
    make capital expenditures;
    sell or dispose of assets;
    incur additional debt;
    create liens;
    merge with or acquire other companies;
    pay dividends;
    engage in transactions with affiliates;
    make loans, investments, advances or stock repurchases;
    prepay certain debt;
    amend certain material agreements; and
    undergo a change of control.  5.
    Commitments
    and Contingencies  Commitments
   7




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##### Table of Contents



Contingencies
    6.
    Subsequent
    Event   8




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis presents factors that
    we believe are relevant to an assessment and understanding of
    our condensed consolidated financial position and results of
    operations. This financial and business analysis should be read
    in conjunction with our December 31, 2005 consolidated
    financial statements included in our Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2005 and our
    condensed consolidated financial statements and the notes
    thereto included in Item 1.
  OVERVIEW
      CRITICAL
    ACCOUNTING POLICIES AND PRACTICES
  Form 10-K
    ACQUISITIONS
    FCC
    Auction 66
    Acquisition
    of Highland Cellular LLC
   9




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##### Table of Contents



Acquisition
    of Texas 15 RSA
      Acquisition
    of Pennsylvania 4 RSA
      RESULTS
    OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
    SEPTEMBER 30, 2006 AND SEPTEMBER 30, 2005
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2006


2005


2006


2005Market population(1)


5,328,000



5,166,500



5,328,000



5,166,500Ending subscribers


667,100



682,200



667,100



682,200Market penetration(2)


12.5
%


13.2
%


12.5
%


13.2
%Post-paid and pre-paid gross
    subscriber additions(3)


46,100



41,000



128,400



120,200Gross subscriber additions


50,800



54,600



145,500



159,800Average subscribers


666,000



688,600



665,500



696,800Average monthly service revenue
    per subscriber(4)

$
46


$
45


$
45


$
43Average monthly post-paid churn(5)


1.9
%


2.9
%


1.9
%


2.5
%     (1)
    
    Represents the population in our
    licensed areas for the period indicated. The results are based
    upon the 2003 population estimates provided by MapInfo
    Corporation, a location software company, adjusted to exclude
    those portions of our RSAs and metropolitan statistical areas
    not covered by our licenses.(2)
    
    Market penetration is calculated by
    dividing ending subscribers by market population.(3)
    
    Represents gross subscriber
    additions added during the period, excluding reseller additions.
    We typically do not incur commission and equipment costs or
    receive equipment revenue from reseller additions.(4)
    
    Average monthly service revenue per
    subscriber is calculated by dividing service revenue by average
    subscribers and dividing by the number of months in the period.
    We exclude roaming revenue from this calculation, since roaming
    revenue is not derived from our subscribers.(5)
    
    Average monthly post-paid churn
    represents the percentage of the post-paid subscribers which
    deactivate service each month. The calculation divides the total
    post-paid deactivations during the period by the average
    post-paid subscribers for the period. 10




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##### Table of Contents



Basis
    of Presentation
    Percentage ChangeThree Months


Nine MonthsThree Months Ended


Nine Months Ended


Ended


EndedSeptember 30,


September 30,


September 30,


September 30,2006


2005


2006


2005


06 vs.05


06 vs. 05($ in thousands)


($ in thousands)Operating Revenue:Service revenue

$
91,613


$
92,712


$
268,607


$
270,120



(1.2
)%


(0.6
)%Roaming revenue


39,496



34,659



91,974



83,342



14.0
%


10.4
%Equipment and other revenue


5,583



4,794



17,511



15,741



16.5
%


11.2
%Total operating revenue


136,692



132,165



378,092



369,203



3.4
%


2.4
%Operating Expenses:Cost of service (exclusive of
    depreciation and amortization shown separately below)


35,648



30,872



96,252



87,381



15.5
%


10.2
%Cost of equipment


12,476



13,448



38,622



37,875



(7.2
)%


2.0
%Marketing and selling


17,198



15,004



49,260



44,271



14.6
%


11.3
%General and administrative


21,344



22,296



63,836



66,715



(4.3
)%


(4.3
)%Depreciation and amortization


19,343



20,358



60,745



62,774



(5.0
)%


(3.2
)%Gain on disposition of operating
    assets


(716
)


(649
)


(2,201
)


(1,588
)


10.3
%


38.6
%Total operating expenses


105,293



101,329



306,514



297,428



3.9
%


3.1
%Operating income


31,399



30,836



71,578



71,775



1.8
%


(0.3
)%Interest expense


(24,540
)


(23,782
)


(72,104
)


(71,344
)


3.2
%


1.1
%Other expense, net


(592
)


(400
)


(1,333
)


(1,498
)


48.0
%


(11.0
)%Income (loss) before income taxes


6,267



6,654



(1,859
)


(1,067
)


(5.8
)%


74.2
%Income tax (expense) benefit


(1,784
)


(2,099
)


1,273



835



(15.0
)%


52.5
%Net income (loss)

$
4,483


$
4,555


$
(586
)

$
(232
)


(1.6
)%


152.6
%   Subscribers
    line-up
 11




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##### Table of Contents



Operating
    Revenue
    Service
    revenue
      Roaming
    revenue
  minutes-of-use) minutes-of-use
 12




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##### Table of Contents



minutes-of-use minutes-of-use
  minute-of-use minute-of-use
  Equipment
    and other revenue
      Three Months Ended September 30,


Nine Months Ended September 30,2006


2005


2006


2005Amount


Percentage


Amount


Percentage


Amount


Percentage


Amount


Percentage($ in thousands)


($ in thousands)Equipment revenue

$
5,380



96.4
%

$
4,666



97.3
%

$
16,684



95.3
%

$
14,130



89.8
%Other revenue


203



3.6
%


128



2.7
%


827



4.7
%


1,611



10.2
%Total equipment and other revenue

$
5,583



100.0
%

$
4,794



100.0
%

$
17,511



100.0
%

$
15,741



100.0
%       Operating
    Expenses
   13




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##### Table of Contents



Cost of
    service
  minute-of-use minutes-of-use
    Three Months Ended September 30,


Nine Months Ended September 30,2006


2005


2006


2005Amount


Percentage


Amount


Percentage


Amount


Percentage


Amount


Percentage($ in thousands)


($ in thousands)Network and other operating costs

$
26,715



74.9
%

$
22,584



73.1
%

$
72,657



75.5
%

$
61,724



70.6
%Roaming costs


8,933



25.1
%


8,288



26.9
%


23,595



24.5
%


25,657



29.4
%Total cost of service

$
35,648



100.0
%

$
30,872



100.0
%

$
96,252



100.0
%

$
87,381



100.0
%     minute-of-use, minute-of-use
  Cost of
    equipment
   14




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##### Table of Contents



Marketing
    and selling costs
      General
    and administrative costs
      Depreciation
    and amortization
     15




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##### Table of Contents



Gain on
    disposition of operating assets
    Non-Operating
    Results
  Interest
    expense
    LIQUIDITY
    AND CAPITAL RESOURCES
      Working
    Capital and Net Cash Flow
  September 30,


December 31,


Percentage2006


2005


Change($ in thousands)Cash and cash equivalents

$
114,127


$
76,611



49.0
%Other current assets


61,770



57,202



8.0
%Total current assets


175,897



133,813



31.4
%Current liabilities


60,946



78,330



(22.2
)%Working capital

$
114,951


$
55,483



107.2
%Ratio of current assets to current
    liabilities


2.9:1



1.7:1    16




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##### Table of Contents



Form 10-K
  Capital
    Resources
  Senior
    Secured Credit Facility
    
    a 5-year
    $50.0 million senior secured revolving credit facility;
    a 7-year
    $100.0 million senior secured multiple draw term loan
    facility; and
    a 7-year
    $100.0 million senior secured delayed draw term loan
    facility.           17




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##### Table of Contents




    make capital expenditures;
    sell or dispose of assets;
    incur additional debt;
    create liens;
    merge with or acquire other companies;
    pay dividends;
    engage in transactions with affiliates;
    make loans, investments, advances or stock repurchases;
    prepay certain debt;
    amend certain material agreements; and
    undergo a change of control.  Notes Payable
      
    incur indebtedness;
    incur or assume liens;
    pay dividends or make other restricted payments;
    impose dividend or other payment restrictions affecting our
    restricted subsidiaries;
    issue and sell capital stock of our restricted subsidiaries;
    issue certain capital stock;
    issue guarantees of indebtedness;
    enter into transactions with affiliates;
    sell assets;
    engage in unpermitted lines of business; 18




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##### Table of Contents




    enter into sale and leaseback transactions; and
    merge or consolidate with or transfer substantial assets to
    another entity.  Capital
    Expenditures and Commitments
  E-911.
      Contractual
    Obligations
      Form 10-K
  IMPACT OF
    NEWLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED
     19




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS
    Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk      Item 4.
    Controls
    and Procedures  Rule 13a-15(e) Rule 15d-15(e)
 20




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##### Table of Contents



PART II.



OTHER
    INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information    Item 6.
    Exhibits    Exhibit



Method ofNumbers

Description

Filing4
.1

Supplemental Indenture dated
    August 7, 2006 to Indenture dated August 8, 2003.

(1)[4.1]10
.1

Credit Agreement dated
    August 7, 2006.

(1)[10.1]10
.2

Guarantee and Collateral Agreement
    dated August 7, 2006.

(1)[10.2]10
.3

Amendment No. 3 to Purchase
    and License Agreement with Nortel Networks, Inc., dated
    August 29, 2006.

(2)[10.1]31
.1

Rule 15d-14(a)
    Certification by our principal executive officer.

(3)31
.2

Rule 15d-14(a)
    Certification by our principal financial officer.

(3)32
.1

Section 1350 Certification by
    our principal executive officer.

(3)32
.2

Section 1350 Certification by
    our principal financial officer.

(3)     
    
    Confidential treatment has been requested for a portion of this
    document.(1)
    
    Filed as an exhibit to Dobson Communications Corporations
    (Commission File Number
    000-29225)
    Current Report on
    Form 8-K
    filed on August 10, 2006, as the exhibit number indicated
    in brackets and incorporated by reference herein.(2)
    
    Filed as an exhibit to Dobson Communications Corporations
    Current Report on
    Form 8-K/A
    filed on November 7, 2006, as the exhibit number indicated
    in brackets and incorporated by reference herein.(3)
    
    Filed herewith. 21




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##### Table of Contents



SIGNATURES
    American
    Cellular Corporation
   Steven
    P. Dussek
   Chief Executive Officer and
 principal executive officer
   Bruce
    R. Knooihuizen
   Executive Vice President,
 Chief Financial Officer and
 principal financial officer
 22




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##### Table of Contents



INDEX TO
    EXHIBITS
  Exhibit



Method ofNumbers

Description

Filing4
.1

Supplemental Indenture dated
    August 7, 2006 to Indenture dated August 8, 2003.

(1)[4.1]10
.1

Credit Agreement dated
    August 7, 2006.

(1)[10.1]10
.2

Guarantee and Collateral Agreement
    dated August 7, 2006.

(1)[10.2]10
.3

Amendment No. 3 to Purchase
    and License Agreement with Nortel Networks, Inc., dated
    August 29, 2006.

(2)[10.1]31
.1

Rule 15d-14(a)
    Certification by our principal executive officer.

(3)31
.2

Rule 15d-14(a)
    Certification by our principal financial officer.

(3)32
.1

Section 1350 Certification by
    our principal executive officer.

(3)32
.2

Section 1350 Certification by
    our principal financial officer.

(3)     
    
    Confidential treatment has been requested for a portion of this
    document.(1)
    
    Filed as an exhibit to Dobson Communications Corporations
    (Commission File Number
    000-29225)
    Current Report on
    Form 8-K
    filed on August 10, 2006, as the exhibit number indicated
    in brackets and incorporated by reference herein.(2)
    
    Filed as an exhibit to Dobson Communications Corporations
    Current Report on
    Form 8-K/A
    filed on November 7, 2006, as the exhibit number indicated
    in brackets and incorporated by reference herein.(3)
    
    Filed herewith.