##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

Form 10-Q

|  |  |                                                                                                 
|- |  | ------------------------------------------------------------------------------------------------
|þ |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
| 
|  |  | For the quarterly period ended March 31,
    2002                                               
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the transition period
    from           to                                                 

Commission file no. 333-59322 and
333-63454



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American Cellular Corporation

(Exact name of registrant as specified in its
charter)


|                                                                                           |  |                                                   
|------------------------------------------------------------------------------------------ |  | --------------------------------------------------
|Delaware(State or other jurisdiction of
    incorporation or organization)                 |  | 22-3043811(I.R.S. Employer
    Identification No.)
|                                                                                          
|14201 Wireless Way
    Oklahoma City, Oklahoma(Address of principal executive
    offices) |  | 73134(Zip Code)                                   

(405) 529-8500

(Registrants telephone number, including
area code)




---

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

As of May 10, 2002, there were
100 shares of registrants $.01 par value
Class A Common Stock outstanding, which are owned of record
by ACC Acquisition LLC, which is equally and beneficially
owned by Dobson Communications Corporation and AT&T
Wireless, Inc.



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TABLE OF CONTENTS



|                                             |                                                                                               |                                                                  |  |  |  |  |  | 
|-------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION               
|                                             |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                           
|                                             |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                 
|                                             |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY       
|                                             |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|                                             |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|                                             | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                             | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|PART II. OTHER INFORMATION                  
|                                             | Item 1. Legal Proceedings                                                                    
|                                             | Item 2. Changes in Securities and Use of Proceeds                                            
|                                             | Item 3. Defaults Upon Senior Securities                                                      
|                                             | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                             | Item 5. Other Information                                                                    
|                                             | Item 6. Exhibits and Reports on Form 8K                                                      
|EX-10.4.4 Limited Waiver to Credit Agreement



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##### Table of Contents



AMERICAN CELLULAR CORPORATION

INDEX TO FORM 10-Q

|                              |   |  |  |                                                                                                            |  |  |    | 
|----------------------------- | - |  |  | ---------------------------------------------------------------------------------------------------------- |  |  | -- | 
|Item                          |   |  |  |                                                                                                           
|Number                        |   |  |  | Page                                                                                                      
|                              |   |  |  |                                                                                                           
|PART I. FINANCIAL INFORMATION
|                              | 1 |  |  | Condensed Consolidated Financial Statements
    (Unaudited):                                               |  |  |    | 
|                              |   |  |  | Condensed Consolidated Balance Sheets as of
    March 31, 2002 and December 31, 2001                       |  |  | 2  | 
|                              |   |  |  | Condensed Consolidated Statements of Operations
    for the Three Months Ended March 31, 2002 and 2001     |  |  | 3  | 
|                              |   |  |  | Condensed Consolidated Statement of
    Stockholders Equity for the Three Months Ended
    March 31, 2002 |  |  | 4  | 
|                              |   |  |  | Condensed Consolidated Statements of Cash Flows
    for the Three Months Ended March 31, 2002 and 2001     |  |  | 5  | 
|                              |   |  |  | Notes to Condensed Consolidated Financial
    Statements                                                   |  |  | 6  | 
|                              | 2 |  |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations                  |  |  | 12 | 
|                              | 3 |  |  | Quantitative and Qualitative Disclosure about
    Market Risk                                              |  |  | 19 | 
|PART II. OTHER INFORMATION   
|                              | 1 |  |  | Legal Proceedings                                                                                          |  |  | 20 | 
|                              | 2 |  |  | Changes in Securities and Use of Proceeds                                                                  |  |  | 20 | 
|                              | 3 |  |  | Defaults Upon Senior Securities                                                                            |  |  | 20 | 
|                              | 4 |  |  | Submission of Matters to a Vote of Security
    Holders                                                    |  |  | 20 | 
|                              | 5 |  |  | Other Information                                                                                          |  |  | 20 | 
|                              | 6 |  |  | Exhibits and Reports on Form 8-K                                                                           |  |  | 20 | 

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


|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |               |               |               | 
|---------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------------- | ------------- | ------------- | ----------- | ------------- | ------------- | ------------- | 
|                                         |                                                                                                                                                            | March 31,                  |                                            | December 31, 
|                                         |                                                                                                                                                            | 2002                       |                                            | 2001         
|                                         |                                                                                                                                                            |                            |                                            |              
|                                         |                                                                                                                                                            |                           
|                                         |                                                                                                                                                            | (Unaudited)               
|ASSETS                                  
|CURRENT ASSETS:                          |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         | Cash and cash equivalents                                                                                                                                  |                            | $                                          | 4,032,593     |               |               | $           | 5,962,148     |              
|                                         | Accounts receivable, net                                                                                                                                   |                            |                                            | 36,506,531    |               |               |             | 43,548,758    |              
|                                         | Restricted cash and investments                                                                                                                            |                            |                                            | 98,801,508    |               |               |             | 65,678,101    |              
|                                         | Inventory                                                                                                                                                  |                            |                                            | 7,844,871     |               |               |             | 8,013,595     |              
|                                         | Prepaid expenses and other                                                                                                                                 |                            |                                            | 8,496,178     |               |               |             | 8,244,902     |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         |                                                                                                                                                            | Total current assets       |                                            |               | 155,681,681   |               |             |               | 131,447,504   |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|PROPERTY, PLANT AND EQUIPMENT, net       |                                                                                                                                                            |                            | 203,276,670                                |               |               |               | 203,168,050 |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|OTHER ASSETS:                            |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         | Restricted investments                                                                                                                                     |                            |                                            | 8,198,910     |               |               |             | 32,184,495    |              
|                                         | Wireless license acquisition costs, net                                                                                                                    |                            |                                            | 569,168,796   |               |               |             | 1,039,523,681 |              
|                                         | Goodwill, net                                                                                                                                              |                            |                                            | 1,077,106,989 |               |               |             | 1,077,123,680 |              
|                                         | Deferred financing costs and other, net                                                                                                                    |                            |                                            | 44,540,544    |               |               |             | 45,410,003    |              
|                                         | Customer list, net                                                                                                                                         |                            |                                            | 27,862,630    |               |               |             | 30,318,297    |              
|                                         | Assets of discontinued operations                                                                                                                          |                            |                                            |              |               |               |             | 139,854,463   |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         |                                                                                                                                                            | Total other assets         |                                            |               | 1,726,877,869 |               |             |               | 2,364,414,619 |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         |                                                                                                                                                            |                            | Total assets                               |               | $             | 2,085,836,220 |             |               | $             | 2,699,030,173 | 
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|LIABILITIES AND STOCKHOLDERS
    EQUITY
|CURRENT LIABILITIES:                     |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         | Accounts payable                                                                                                                                           |                            | $                                          | 23,358,558    |               |               | $           | 21,375,257    |              
|                                         | Accounts payable  affiliates                                                                                                                              |                            |                                            | 31,973,554    |               |               |             | 17,729,679    |              
|                                         | Accrued expenses                                                                                                                                           |                            |                                            | 10,730,299    |               |               |             | 10,475,570    |              
|                                         | Accrued interest payable                                                                                                                                   |                            |                                            | 43,806,768    |               |               |             | 31,308,522    |              
|                                         | Deferred revenue and customer deposits                                                                                                                     |                            |                                            | 11,231,728    |               |               |             | 11,745,161    |              
|                                         | Current portion of long-term debt                                                                                                                          |                            |                                            | 42,578,038    |               |               |             | 46,909,091    |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         |                                                                                                                                                            | Total current liabilities  |                                            |               | 163,678,945   |               |             |               | 139,543,280   |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|OTHER LIABILITIES:                       |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         | Long-term debt, net of current portion                                                                                                                     |                            |                                            | 1,552,430,325 |               |               |             | 1,760,208,032 |              
|                                         | Deferred tax liabilities                                                                                                                                   |                            |                                            | 51,784,376    |               |               |             | 186,382,124   |              
|                                         | Liabilities of discontinued operations                                                                                                                     |                            |                                            |              |               |               |             | 7,495,882     |              
|                                         | Other non-current liabilities                                                                                                                              |                            |                                            | 8,826,195     |               |               |             | 23,698,750    |              
|                                         | Commitments (Note 5)                                                                                                                                       |                            |                                            |               |               |               |             |               |              
|                                         | Series A preferred stock                                                                                                                                   |                            |                                            | 38,252,871    |               |               |             | 37,138,711    |              
|STOCKHOLDERS EQUITY:                    |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         | Class A Common Stock, $.01 par value,
    475,000 shares authorized and 100 issued                                                                         |                            |                                            | 1             |               |               |             | 1             |              
|                                         | Paid-in capital                                                                                                                                            |                            |                                            | 797,827,564   |               |               |             | 797,827,564   |              
|                                         | Retained deficit                                                                                                                                           |                            |                                            | (522,312,091  | )             |               |             | (239,044,921  | )            
|                                         | Accumulated other comprehensive loss, net of
    income tax benefit of $3,101,310 and $9,479,500 at
    March 31, 2002 and December 31, 2001, respectively |                            |                                            | (4,651,966    | )             |               |             | (14,219,250   | )            
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         |                                                                                                                                                            | Total stockholders equity |                                            |               | 270,863,508   |               |             |               | 544,563,394   |              
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              
|                                         |                                                                                                                                                            |                            | Total liabilities and stockholders equity |               | $             | 2,085,836,220 |             |               | $             | 2,699,030,173 | 
|                                         |                                                                                                                                                            |                            |                                            |               |               |               |             |              

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

2



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS


|                                                                      |                                                                                                                               |                            |              |              |            |   |             |             |             | 
|--------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------ | ------------ | ---------- | - | ----------- | ----------- | ----------- | 
|                                                                      |                                                                                                                               |                           
|                                                                      |                                                                                                                               | For the Three Months Ended
|                                                                      |                                                                                                                               | March 31,                 
|                                                                      |                                                                                                                               |                           
|                                                                      |                                                                                                                               | 2002                       |              | 2001        
|                                                                      |                                                                                                                               |                            |              |             
|                                                                      |                                                                                                                               |                           
|                                                                      |                                                                                                                               | (Unaudited)               
|OPERATING REVENUE:                                                    |                                                                                                                               |                            |              |              |            |   |             |            
|                                                                      | Service revenue                                                                                                               |                            | $            | 70,186,614   |            |   | $           | 59,116,546  |            
|                                                                      | Roaming revenue                                                                                                               |                            |              | 26,593,463   |            |   |             | 26,727,394  |            
|                                                                      | Equipment and other revenue                                                                                                   |                            |              | 3,102,707    |            |   |             | 4,445,702   |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|                                                                      |                                                                                                                               | Total operating revenue    |              |              | 99,882,784 |   |             |             | 90,289,642  | 
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|OPERATING EXPENSES:                                                   |                                                                                                                               |                            |              |              |            |   |             |            
|                                                                      | Cost of service                                                                                                               |                            |              | 27,374,418   |            |   |             | 23,343,144  |            
|                                                                      | Cost of equipment                                                                                                             |                            |              | 7,445,819    |            |   |             | 10,968,301  |            
|                                                                      | Marketing and selling                                                                                                         |                            |              | 13,574,378   |            |   |             | 14,102,460  |            
|                                                                      | General and administrative                                                                                                    |                            |              | 16,681,680   |            |   |             | 14,080,560  |            
|                                                                      | Depreciation and amortization                                                                                                 |                            |              | 15,982,039   |            |   |             | 43,104,830  |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|                                                                      |                                                                                                                               | Total operating expenses   |              |              | 81,058,334 |   |             |             | 105,599,295 | 
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|OPERATING INCOME (LOSS)                                               |                                                                                                                               |                            | 18,824,450   |              |            |   | (15,309,653 | )          
|OTHER INCOME (EXPENSE):                                               |                                                                                                                               |                            |              |              |            |   |             |            
|                                                                      | Interest expense                                                                                                              |                            |              | (40,540,745  | )          |   |             | (38,956,454 | )          
|                                                                      | Other (expense) income, net                                                                                                   |                            |              | (502,389     | )          |   |             | 320,593     |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|LOSS BEFORE INCOME TAXES AND DISCONTINUED
    OPERATIONS              |                                                                                                                               |                            | (22,218,684  | )            |            |   | (53,945,514 | )          
|                                                                      | Income tax benefit                                                                                                            |                            |              | 8,887,474    |            |   |             | 15,760,181  |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|LOSS FROM CONTINUING OPERATIONS                                       |                                                                                                                               |                            | (13,331,210  | )            |            |   | (38,185,333 | )          
|DISCONTINUED OPERATIONS: (Note 2)                                     |                                                                                                                               |                            |              |              |            |   |             |            
|                                                                      | Loss from discontinued operations, net of income
    tax benefit of $435,838 and $207,551 for 2002 and 2001,
    respectively |                            |              | (653,909     | )          |   |             | (505,928    | )          
|                                                                      | Gain from sale of discontinued operations, net of
    income tax expense of $50,282,976 for 2002                              |                            |              | 13,472,110   |            |   |             |            |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE   |                                                                                                                               |                            | (513,009     | )            |            |   | (38,691,261 | )          
|                                                                      | Cumulative effect of change in accounting
    principle, net of income tax benefit of $187,760,000
    (Note 6)               |                            |              | (281,640,000 | )          |   |             |            |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|NET LOSS                                                              |                                                                                                                               |                            | (282,153,009 | )            |            |   | (38,691,261 | )          
|DIVIDENDS ON PREFERRED STOCK                                          |                                                                                                                               |                            | (1,114,161   | )            |            |   |            |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|NET LOSS APPLICABLE TO COMMON STOCKHOLDER                             |                                                                                                                               | $                          | (283,267,170 | )            |            | $ | (38,691,261 | )          
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDER
    PER COMMON SHARE: |                                                                                                                               |                            |              |              |            |   |             |            
|                                                                      | Continuing operations                                                                                                         |                            |              | (133,312     | )          |   |             | (381,854    | )          
|                                                                      | Discontinued operations                                                                                                       |                            |              | 128,182      |            |   |             | (5,059      | )          
|                                                                      | Cumulative effect of change in accounting
    principle                                                                       |                            |              | (2,816,400   | )          |   |             |            |            
|                                                                      | Dividends on preferred stock                                                                                                  |                            |              | (11,142      | )          |   |             |            |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDER
    PER COMMON SHARE  |                                                                                                                               | $                          | (2,832,672   | )            |            | $ | (386,913    | )          
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            
|BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                      |                                                                                                                               |                            | 100          |              |            |   | 100         |            
|                                                                      |                                                                                                                               |                            |              |              |            |   |             |            

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

3



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS EQUITY


|                                                                                 |                                                                          |               |              |                      |  |         |     |             |  |               |   |               |  |   |             |   |  |   |              |   |  |   |             |           |  |   |              |           | 
|-------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------- | ------------ | -------------------- |  | ------- | --- | ----------- |  | ------------- | - | ------------- |  | - | ----------- | - |  | - | ------------ | - |  | - | ----------- | --------- |  | - | ------------ | --------- | 
|                                                                                 |                                                                          |               |              |                     
|                                                                                 |                                                                          |               |              | Stockholders Equity
|                                                                                 |                                                                          |               |              |                     
|                                                                                 |                                                                          |               |              |                      |  |         |     | Accumulated |  |              
|                                                                                 |                                                                          |               |              | Class A              |  |         |     | Other       |  | Total        
|                                                                                 |                                                                          | Comprehensive |              | Common               |  | Paid in |     | Retained    |  | Comprehensive |   | Stockholders
|                                                                                 |                                                                          | Loss          |              | Stock                |  | Capital |     | Deficit     |  | Loss          |   | Equity       
|                                                                                 |                                                                          |               |              |                      |  |         |     |             |  |               |   |              
|                                                                                 |                                                                          |               |              |                      |  |         |     |             |  |               |   |               |  |  
|                                                                                 |                                                                          |              
|                                                                                 |                                                                          | (Unaudited)  
|DECEMBER 31, 2001                                                                |                                                                          |               |              |                      |  |         | 100 |             |  | $             | 1 |               |  | $ | 797,827,564 |   |  | $ | (239,044,921 | ) |  | $ | (14,219,250 | )         |  | $ | 544,563,394  |          
|Net loss                                                                         |                                                                          | $             | (282,153,009 | )                    |  |         |    |             |  |               |  |               |  |   |            |   |  |   | (282,153,009 | ) |  |   |            |           |  |   | (282,153,009 | )        
|Amounts related to hedge transactions
    reclassified into earnings, net of tax |                                                                          |               | 7,055,312    |                      |  |         |    |             |  |               |  |               |  |   |            |   |  |   |             |   |  |   | 7,055,312   |           |  |   | 7,055,312    |          
|                                                                                 | Ineffective hedge transaction reclassified into
    earnings, net of tax |               |              | 643,751              |  |         |     |            |  |               |   |              |  |   |             |  |  |   |              |  |  |   |             | 643,751   |  |   |              | 643,751   | 
|                                                                                 | Change in fair value of hedge transactions, net
    of tax               |               |              | 1,868,221            |  |         |     |            |  |               |   |              |  |   |             |  |  |   |              |  |  |   |             | 1,868,221 |  |   |              | 1,868,221 | 
|                                                                                 |                                                                          |               |              |                      |  |         |     |             |  |               |   |               |  |   |             |   |  |   |              |   |  |   |             |           |  |   |              |          
|Total comprehensive loss                                                         |                                                                          | $             | (272,585,725 | )                    |  |         |     |             |  |               |   |               |  |   |             |   |  |   |              |   |  |   |             |           |  |   |              |          
|                                                                                 |                                                                          |               |              |                      |  |         |     |             |  |               |   |               |  |   |             |   |  |   |              |   |  |   |             |           |  |   |              |          
|Preferred stock dividends                                                        |                                                                          |               |              |                      |  |         |    |             |  |               |  |               |  |   |            |   |  |   | (1,114,161   | ) |  |   |            |           |  |   | (1,114,161   | )        
|                                                                                 |                                                                          |               |              |                      |  |         |     |             |  |               |   |               |  |   |             |   |  |   |              |   |  |   |             |           |  |   |              |          
|MARCH 31, 2002                                                                   |                                                                          |               |              |                      |  |         | 100 |             |  | $             | 1 |               |  | $ | 797,827,564 |   |  | $ | (522,312,091 | ) |  | $ | (4,651,966  | )         |  | $ | 270,863,508  |          
|                                                                                 |                                                                          |               |              |                      |  |         |     |             |  |               |   |               |  |   |             |   |  |   |              |   |  |   |             |           |  |   |              |          

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

4



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |              |             |             |  
|--------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------------------------- | ------------ | ---------- | ------------ | ---------- | ------------ | ----------- | ----------- | -
|                                                                            |                                                                                                                               |                                                                 
|                                                                            |                                                                                                                               | For the Three Months Ended                                      
|                                                                            |                                                                                                                               |                                                                 
|                                                                            |                                                                                                                               | March 31,                                                        |                                                         | March 31,   
|                                                                            |                                                                                                                               | 2002                                                             |                                                         | 2001        
|                                                                            |                                                                                                                               |                                                                  |                                                         |             
|                                                                            |                                                                                                                               |                                                                 
|                                                                            |                                                                                                                               | (Unaudited)                                                     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            | Net loss from continuing operations                                                                                           |                                                                  | $                                                       | (13,331,210  | )          |              | $          | (38,185,333  | )          
|                                                                            | Adjustments to reconcile net loss from continuing
    operations to net cash provided by (used in) operating
    activities  |                                                                  |                                                         |              |            |              |            |              |            
|                                                                            |                                                                                                                               | Depreciation and amortization                                    |                                                         |              | 15,982,039 |              |            |              | 43,104,830  |            
|                                                                            |                                                                                                                               | Amortization of bond premium and financing costs                 |                                                         |              | 1,351,193  |              |            |              | 940,152     |            
|                                                                            |                                                                                                                               | Deferred income taxes and investment tax credits,
    net        |                                                         |              | (3,498,914 | )            |            |              | (17,046,947 | )          
|                                                                            |                                                                                                                               | Cash used in operating activities of discontinued
    operations |                                                         |              | (7,175,022 | )            |            |              |            |            
|                                                                            |                                                                                                                               | Loss on ineffective hedge transaction                            |                                                         |              | 1,072,919  |              |            |              |            |            
|                                                                            | Changes in current assets and
    liabilities                                                                                |                                                                  |                                                         |              |            |              |            |              |            
|                                                                            |                                                                                                                               | Accounts receivable                                              |                                                         |              | 7,042,227  |              |            |              | 3,975,479   |            
|                                                                            |                                                                                                                               | Inventory                                                        |                                                         |              | 168,724    |              |            |              | (2,559,559  | )          
|                                                                            |                                                                                                                               | Prepaid expenses and other                                       |                                                         |              | (1,190,188 | )            |            |              | (3,026,382  | )          
|                                                                            |                                                                                                                               | Accounts payable                                                 |                                                         |              | 15,807,124 |              |            |              | 13,090,784  |            
|                                                                            |                                                                                                                               | Accrued expenses                                                 |                                                         |              | 12,752,975 |              |            |              | (6,889,013  | )          
|                                                                            |                                                                                                                               | Deferred revenue and customer deposits                           |                                                         |              | (513,433   | )            |            |              | 368,481     |            
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            |                                                                                                                               |                                                                  | Net cash provided by (used in) operating
    activities |              |            | 28,468,434   |            |              |             | (6,227,508  | )
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            | Capital expenditures                                                                                                          |                                                                  |                                                         | (13,214,939  | )          |              |            | (22,125,731  | )          
|                                                                            | Increase in payable affiliates                                                                                                |                                                                  |                                                         |             |            |              |            | (9,193,025   | )          
|                                                                            | Net proceeds from sale of discontinued operations                                                                             |                                                                  |                                                         | 194,452,561  |            |              |            |             |            
|                                                                            | Change in receivable from discontinued operations                                                                             |                                                                  |                                                         |             |            |              |            | 3,048,635    |            
|                                                                            | Other investing activities                                                                                                    |                                                                  |                                                         | 950,967      |            |              |            | (1,136,893   | )          
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            |                                                                                                                               |                                                                  | Net cash provided by (used in) investing
    activities |              |            | 182,188,589  |            |              |             | (29,407,014 | )
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            | Proceeds from long-term debt                                                                                                  |                                                                  |                                                         | 87,000,000   |            |              |            | 37,500,000   |            
|                                                                            | Repayments of long-term debt                                                                                                  |                                                                  |                                                         | (299,297,699 | )          |              |            | (372,131,420 | )          
|                                                                            | Proceeds from senior subordinated notes                                                                                       |                                                                  |                                                         |             |            |              |            | 446,665,500  |            
|                                                                            | Deferred financing costs                                                                                                      |                                                                  |                                                         | (288,879     | )          |              |            | (15,190,206  | )          
|                                                                            | Capital cash contribution                                                                                                     |                                                                  |                                                         |             |            |              |            | 16,413,783   |            
|                                                                            | Purchase of restricted investments                                                                                            |                                                                  |                                                         |             |            |              |            | (85,235,243  | )          
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            |                                                                                                                               |                                                                  | Net cash (used in) provided by financing
    activities |              |            | (212,586,578 | )          |              |             | 28,022,414  |  
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                   |                                                                                                                               |                                                                  | (1,929,555                                              | )            |            |              | (7,612,108 | )           
|CASH AND CASH EQUIVALENTS, beginning of period                              |                                                                                                                               |                                                                  | 5,962,148                                               |              |            |              | 14,880,667 |             
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|CASH AND CASH EQUIVALENTS, end of period                                    |                                                                                                                               | $                                                                | 4,032,593                                               |              |            | $            | 7,268,559  |             
|                                                                            |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                          |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            | Cash paid for                                                                                                                |                                                                  |                                                         |              |            |              |            |              |            
|                                                                            |                                                                                                                               | Interest, net of amounts capitalized                             |                                                         | $            | 28,079,845 |              |            | $            | 40,108,722  |            
|SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND
    FINANCING ACTIVITIES: |                                                                                                                               |                                                                  |                                                         |              |            |              |            |             
|                                                                            | Capital contribution of PCS licenses and certain
    other assets                                                             |                                                                  |                                                         |             |            |              | $          | 16,413,783   |            

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

5



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES






NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)


The condensed consolidated balance sheets of
American Cellular Corporation (ACC) and subsidiaries
(collectively with ACC, the Company) as of
March 31, 2002 and December 31, 2001, the condensed
consolidated statement of operations for the three months ended
March 31, 2002 and 2001, the condensed consolidated
statement of stockholders equity for the three months
ended March 31, 2002 and the condensed consolidated
statements of cash flows for the three months ended
March 31, 2002 and 2001 are unaudited. In the opinion of
management, such financial statements include all adjustments,
consisting only of normal recurring adjustments necessary for a
fair presentation of financial position, results of operations,
and cash flows for the periods presented.

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

1.     Organization

American Cellular Corporation was originally
formed on February 26, 1998, to acquire the operations of
PriCellular Corporation. On February 25, 2000, American
Cellular Corporation and its subsidiaries (the
Company) were acquired by ACC Acquisition LLC, an equally
owned joint venture between Dobson Communications and AT&T
Wireless Services, Inc. (the Joint Venture). The
acquisition costs as of February 25, 2000 were pushed down
to the Company, thus creating a new basis in the assets and
liabilities of the Company. The Company is a provider of rural
and suburban wireless telephone services in portions of
Illinois, Kansas, Kentucky, Michigan, Minnesota, New York, Ohio,
Oklahoma, Pennsylvania, West Virginia and Wisconsin.

2.     Discontinued
Operations

On February 8, 2002, two of the
Companys wholly-owned, indirect subsidiaries completed the
sale of Tennessee 4 RSA for a total purchase price of
$202.0 million to Verizon Wireless. Proceeds from this
transaction were primarily used to pay down bank debt. The
Tennessee 4 RSA covers a total population of approximately
290,800 and had a subscriber base of approximately 24,900. As a
result of this agreement, the results of operations for
Tennessee 4 RSA during the periods presented are
included in the Companys condensed consolidated financial
statements as discontinued operations.

Pursuant to SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, which
replaces APB Opinion No. 30 for the disposal of segments of
a business, the condensed consolidated financial statements have
been restated for all periods presented to reflect the
Tennessee 4 RSA operations, assets and liabilities as
discontinued operations. The assets and liabilities of such
operations have been classified as

6



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


Assets of discontinued operations and
Liabilities of discontinued operations,
respectively, on the December 31, 2001 condensed
consolidated balance sheets and consist of the following:

|                                        |                                              |                  |        |         | 
|--------------------------------------- | -------------------------------------------- | ---------------- | ------ | ------- | 
|                                        |                                              | December 31,    
|                                        |                                              | 2001            
|                                        |                                              |                 
|                                        |                                              | ($ in thousands)
|Cash and cash equivalents               |                                              | $                | 85     |        
|Other current assets                    |                                              |                  | 4,442  |        
|Property, plant and equipment, net      |                                              |                  | 9,647  |        
|Goodwill, net                           |                                              |                  | 63,044 |        
|Wireless license acquisition costs, net |                                              |                  | 61,303 |        
|Other assets                            |                                              |                  | 1,333  |        
|                                        |                                              |                  |        |        
|                                        | Total assets of discontinued operations      |                  | $      | 139,854 | 
|                                        |                                              |                  |        |        
|Current liabilities                     |                                              | $                | 1,744  |        
|Other liabilities                       |                                              |                  | 5,752  |        
|                                        |                                              |                  |        |        
|                                        | Total liabilities of discontinued operations |                  | $      | 7,496   | 
|                                        |                                              |                  |        |        

The net loss from discontinued operations was
classified on the condensed consolidated statement of operations
as Loss from discontinued operations. Summarized
results of discontinued operations are as follows:

|                                  |  |                     |        |                      |  |   |       |  
|--------------------------------- |  | ------------------- | ------ | -------------------- |  | - | ----- | -
|                                  |  | For the Period From |        |                     
|                                  |  | January 1, 2002     |        | For the Three Months
|                                  |  | Through February 8, |        | Ended March 31,     
|                                  |  | 2002                |        | 2001                
|                                  |  |                     |        |                     
|                                  |  |                    
|                                  |  | ($ in thousands)   
|Operating revenues                |  | $                   | 2,319  |                      |  | $ | 7,112 |  
|Loss before income taxes          |  |                     | (1,090 | )                    |  |   | (298  | )
|Income tax benefit (provision)    |  |                     | 436    |                      |  |   | (208  | )
|Loss from discontinued operations |  |                     | (654   | )                    |  |   | (506  | )

The long-term debt of the Company is at the
consolidated level, and is not reflected by each individual
market. Thus, the Company has allocated a portion of interest
expense to the discontinued operations to properly reflect the
interest that was incurred to finance the Tennessee 4 RSA
operations. The interest expense allocated to this market was
$1.0 million for the period from January 1, 2002
through disposition (February 8, 2002) and
$2.3 million for the three months ended March 31, 2001.

The Company completed the sale of Tennessee 4 RSA
on February 8, 2002, and recorded losses incurred through
the period and the related gain on the sale, which totaled
approximately $12.8 million, net of tax expense.

7



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


3.     Long-Term
Debt

The Companys long-term debt consists of the
following:

|                                           |                      |                |             |                   |  |   |               |               | 
|------------------------------------------ | -------------------- | -------------- | ----------- | ----------------- |  | - | ------------- | ------------- | 
|                                           |                      | March 31, 2002 |             | December 31, 2001
|                                           |                      |                |             |                  
|Credit facility                            |                      | $              | 901,306,757 |                   |  | $ | 1,113,604,456 |              
|Senior Subordinated Notes, net of discount |                      |                | 693,701,606 |                   |  |   | 693,512,667   |              
|                                           |                      |                |             |                   |  |   |               |              
|                                           | Total debt           |                |             | 1,595,008,363     |  |   |               | 1,807,117,123 | 
|Less  Current maturities                  |                      |                | 42,578,038  |                   |  |   | 46,909,091    |              
|                                           |                      |                |             |                   |  |   |               |              
|                                           | Total long-term debt |                | $           | 1,552,430,325     |  |   | $             | 1,760,208,032 | 
|                                           |                      |                |             |                   |  |   |               |              



| |                
| | ---------------
| | Credit Facility

On February 25, 2000, the Company obtained a
$1.75 billion credit facility to retire existing debt and
complete the acquisition of the Company by the Joint Venture.
This credit facility included a $300.0 million revolving
credit facility and $1.45 billion of term loan facilities.
On March 2, 2001, the Company and its lenders agreed to an
amendment to the credit facility. This amendment became
effective on March 14, 2001, when the Company permanently
repaid $200.0 million of the term notes under the credit
facility. The Company used proceeds from the issuance of
$450.0 million Senior Subordinated Notes due 2009, to
reduce the credit facility to $1.55 billion. On
May 31, 2001, the Company and its lenders agreed to a
second amendment to the credit facility. This amendment became
effective on June 4, 2001, when the Company permanently
repaid $201.3 million of the term notes under the credit
facility with proceeds from the issuance of $250.0 million
Senior Subordinated Notes due 2009, which reduced the credit
facility to $1.34 billion. On September 27, 2001, the
Company and its lenders agreed to a third amendment of the
credit facility, which modifies certain financial covenants (as
described below). The maximum availability of the credit
facility is limited by restrictions, such as certain financial
ratios. The maximum availability subject to these restrictions
is $906.2 million. As of March 31, 2002, the Company
had outstanding borrowings under the credit facility of
$901.3 million, and approximately $4.9 million of
credit availability.

The Companys amended credit facility
imposes a number of restrictive covenants that, among other
things, limit the Companys ability to incur additional
indebtedness, create liens and pay dividends. In addition, the
Company is required to maintain certain financial ratios,
including, but not limited to:



| |   |                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a ratio of senior indebtedness to operating cash
    flow of 7.00 to 1 at December 31, 2001, decreasing to 5.75
    to 1 at December 31, 2002 and decreasing over time to 2.50
    to 1;                                    
|
| |  | a ratio of total indebtedness to operating cash
    flow of 10.10 to 1 at December 31, 2001, decreasing to 7.75
    to 1 at December 31, 2002 and decreasing over time to 4.00
    to 1;                                    
|
| |  | a ratio of operating cash flow to debt service
    requirements of 1.20 to 1 at December 31, 2001, increasing
    to 1.35 to 1 at December 31, 2002 and decreasing over time
    to 1.20 to 1;                              
|
| |  | a ratio of operating cash flow to interest
    expense requirement of 1.45 to 1 at December 31, 2001,
    increasing to 1.80 to 1 at December 31, 2002 and increasing
    over time to 2.50 to 1;                           
|
| |  | beginning on December 31, 2002, a ratio of
    operating cash flow minus capital expenditures to the sum of
    debt service requirements and cash distributions of 1.00 to 1
    and continuing over time at 1.00 to 1; and
|
| |  | a limitation on capital expenditures.                                                                                                                                                                                       

8



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


Interest on the revolving credit facility and the
term loan facilities is variable and is based on a prime rate or
a LIBOR formula. The weighted average interest rate at
March 31, 2002 was 4.8%, and interest rates have ranged in
total between 4.4% and 10.1% since inception. This credit
facility is collateralized by substantially all of the assets of
the Company.

The Companys credit facility includes a
financial covenant requiring the Company to not exceed a total
debt leverage ratio ranging from 9.25 to 1.00 in the first
quarter to 7.75 to 1.00 in the fourth quarter 2002. Absent debt
reduction from projected debt levels or an amendment to the
credit facility modifying this covenant, the Company will likely
be unable to comply with this covenant during 2002. Management
is currently in discussions with the lenders regarding an
amendment to the credit facility. However, if the Company is
unable to comply with the total debt leverage ratio or is unable
to renegotiate the credit facility and there is a covenant
violation, the lenders would have the right, but not the
obligation, to accelerate the repayment of the entire amount
outstanding under the credit facility. An acceleration under the
credit facility would allow the holders of the Senior
Subordinated Notes to declare the principal and interest of the
Senior Subordinated Notes immediately due and payable. The
Company would then be required to either refinance the debt or
repay the amounts due. If this were to occur, management would
attempt to renegotiate the debt with the holders to provide,
among other things, for an extended repayment term. There is no
assurance that management would be able to renegotiate the debt
under these conditions or meet its obligation under the
accelerated repayment terms. As a result, there may be
substantial doubt about the Companys ability to continue
as a going concern. In the independent auditors report on the
Companys 2001 financial statements, the auditors expressed
concern about the Companys ability to continue as a going
concern, if in the future, the Company does not meet certain
financial ratios required under the terms of the Companys
credit facility. In addition, a debt compliance certificate from
the auditors was not delivered to the administrative agent for
the Companys credit facility until 3 days after the
certificate was due. Finally, the interest payment due to the
lender banks on April 8, 2002 was actually paid on
April 10, 2002. Because of these events and the concern by
the administrative agent for the lender banks that any or all of
such events might be deemed a material adverse change which, if
such occurred, would be an event of default under the
Companys credit facility, the administrative agent for the
lender banks provided the Company with a waiver for these
occurrences, which expires May 17, 2002.



| |                          
| | -------------------------
| | Senior Subordinated Notes

On March 14, 2001, the Company completed the
sale of $450.0 million Senior Subordinated Notes due 2009.
These notes were sold at a discount of $3.3 million and
carry an interest rate of 9.5%. The discount will be amortized
over the life of the notes. On June 4, 2001, the Company
completed the sale of $250.0 million of Senior Subordinated
Notes due 2009. These notes were sold at a discount of
$3.6 million and carry an interest rate of 9.5%. The
discount will be amortized over the life of the notes.

Restricted cash and investments consist of
interest pledge deposits for the Senior Subordinated Notes. The
interest pledge deposits include the initial deposit of
$85.2 million for the $450.0 million Senior
Subordinated Notes, net of interest earned and payments issued
to bondholders and the additional deposit of $48.0 million
for the $250.0 million Senior Subordinated Notes, net of
interest earned and payments issued to bondholders.



| |                     
| | --------------------
| | Interest Rate Hedges

The Company pays interest on its bank credit
facility based on a variable factor, such as LIBOR or prime
rate. The Company will from time-to-time enter into derivative
contracts to reduce exposure against rising interest rates.

During 2000, the Company entered into a
$1.03 billion derivative contract on its credit facility,
in order to hedge its interest rate exposure, whereby the
interest rate on the facility was effectively fixed at a rate of
7.3%.

9



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


This derivative contract expired in June 2001 and
was replaced with another derivative contract. The new
derivative contract expires June 4, 2002 and sets the
interest rate on $1.03 billion of debt at a rate
of 6.7%.

In accordance with SFAS No. 133, the Company
periodically assesses the effectiveness of its hedge
transactions. During February 2002, the Company used a portion
of the proceeds from the sale of the Tennessee 4 RSA to pay down
bank debt. As a result, the Company determined that one of its
hedge transactions, totaling $125.0 million was
ineffective, thus, reducing the total derivative contracts to
$900.0 million. The Company recorded a loss of
approximately $1.1 million representing the fair value of
this transaction as of March 31, 2002, which is reflected
in other (expense) income in the accompanying statement of
operations.

4.     Stockholders
Equity

On June 29, 2001, the Company received
$35.0 million from one of its principal owners, Dobson
Communications, for the purchase of 35,000 shares of its
Series A Preferred Stock. Each share of Series A
Preferred Stock is entitled to cumulative annual dividends on
the liquidation preference of $1,000 per share, subject to
certain adjustments. Dividends will accrue but will not be
payable until the fifth anniversary of the issuance of the
Series A Preferred Stock.

On January 18, 2001, the Company received a
$32.8 million capital contribution from its shareholder.
This contribution consisted of cash, PCS licenses relating to
areas in northeast Oklahoma and southeast Kansas, and certain
other assets.

5.     Commitments

Effective November 16, 2001, the Company
entered into an equipment supply agreement with Nortel Networks
Inc., in which the Company agreed to purchase approximately
$49.5 million of cell site and switching equipment between
November 16, 2001 and December 31, 2004. Of the
commitment, approximately $34.9 million remained at
March 31, 2002.

6.     Change in
Accounting Principles and Practices

In July 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards
No. 141, Business Combinations and
No. 142, Goodwill and Other Intangible Assets.
These standards prohibit the application of the
pooling-of-interests method of accounting for business
combinations effective June 30, 2001 and require companies
to cease the amortization of existing goodwill and intangible
assets with indefinite lives effective January 1, 2002.
Under the new rules, the Company is treating its wireless
license acquisition costs as indefinite life intangible assets.
As a result, effective January 1, 2002, the Company ceased
the amortization of goodwill and wireless license acquisition
costs. Instead, the Company now tests for impairment of goodwill
or indefinite life intangible assets at least annually and will
only adjust the carrying amount of these intangible assets upon
an impairment of the goodwill or indefinite life intangible
assets. For the three months ended March 31, 2001, the
Company recorded approximately $14.5 million and
approximately $8.2 million of amortization expense, net of
income tax benefit, related to its goodwill and wireless license
acquisition costs, respectively. Through December 31, 2001,
the Companys accounting policy was to evaluate the
carrying value of its intangible assets based on its
undiscounted cash flows. However, as a result of implementing
SFAS No. 142, the Company is now required to evaluate the
carrying value of its indefinite life intangible assets using
their fair values. Upon implementation of SFAS No. 142 on
January 1, 2002, the Company recorded charges, net of
income tax benefit, of approximately $281.6 million to
reflect the write-down of its wireless license acquisition costs
to their fair value.

10



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. This statement replaces SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.
However, it maintains the fundamental provisions of SFAS
No. 121 for recognition and measurement of the impairment
of long-lived assets to be held and used and for measurement of
long-lived assets to be disposed of by sale. This statement
applies to all long-lived assets, including discontinued
operations, and replaces the provisions of APB Opinion
No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of
a Segment of a Business, for the disposal of segments of a
business. This statement requires that those long-lived assets
be measured at the lower of carrying amount or fair value less
cost to sell. During the fourth quarter 2001, two of the
Companys wholly-owned, indirect subsidiaries, entered into
a definitive agreement to sell Tennessee 4 RSA. With this sale,
the Company decided to early adopt this standard during the
fourth quarter 2001, effective January 1, 2001, to properly
reflect the results of operations, assets and liabilities of
Tennessee 4 RSA as discontinued operations, see Note 2
above.

7.     Subsequent
Events

On May 8, 2002, the Company signed an
extension to its preferred roaming agreement with one of its
principal owners, AT&T Wireless. AT&T Wireless is the
Companys largest roaming partner. This new agreement
covers TDMA and establishes the roaming rates for the parties
through June 30, 2007.

11



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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, which we believe are relevant to an assessment and
understanding of our condensed consolidated financial position
and results of operations. This financial and business analysis
should be read in conjunction with our condensed consolidated
financial statements and the notes thereto included in
Item 8.

Overview

Our predecessor, PriCellular, was formed on
February 21, 1990. We were formed on February 26, 1998
and acquired PriCellular, for accounting purposes, on
June 25, 1998. On February 25, 2000, we were acquired
by a joint venture equally owned by AT&T Wireless and Dobson
Communications. We provide rural and suburban wireless telephone
services in portions of Illinois, Kansas, Kentucky, Michigan,
Minnesota, New York, Ohio, Oklahoma, Pennsylvania, West Virginia
and Wisconsin. At March 31, 2002, our wireless systems
covered a population of approximately 5.0 million and we
had approximately 642,200 subscribers.

Discontinued Operations

On February 8, 2002, we sold Tennessee 4 RSA
to Verizon Wireless for a total purchase price of
$202.0 million. The Tennessee 4 RSA covers a population of
approximately 290,800 and had a subscriber base of approximately
24,900. As a result of this sale, the results of operations for
Tennessee 4 RSA during the periods presented are included
as discontinued operations in our condensed consolidated
financial statements. We used the proceeds primarily to pay down
our bank debt.

Revenue

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

We derive service revenue primarily by providing
wireless services to our subscribers. The industry has
experienced declining average revenue per minute as competition
among wireless service providers has led to reductions in rates
for airtime. The per minute yield on our service revenue
(service revenue divided by subscriber minutes of use) was
$0.19 per minute for the three months ended March 31,
2002 and $0.25 per minute for the three months ended
March 31, 2001. These declines have been generally offset
by significant increases in average minutes of use per
subscriber. We believe that the industry trend toward increasing
minutes of use per subscriber will continue to offset declining
revenues per minute of use due to the continued popularity of
single rate calling plans and the enhanced service capacity of
recently developed digital networks.

We derive roaming revenue by providing service to
subscribers of other wireless providers when those subscribers
roam into our markets and use our systems to carry
their calls. Roaming accounted for 26.6% of our operating
revenue for the three months ended March 31, 2002 and 29.6%
of our operating revenue for the three months ended
March 31, 2001. Roaming revenues typically yield higher
average per minute rates and higher margins than revenues from
our subscribers. We achieve these higher margins because we
incur relatively lower incremental costs related to network
operations, billing, customer service and collections in
servicing roaming customers as compared to our home subscribers.
However, even though roaming revenue yields have offered higher
margins than revenue from our subscribers, the yields are
declining and are becoming more comparable to yields from our
subscribers due to increased market pressures and competition
between wireless providers. Our roaming yield (roaming revenue,
which includes airtime, toll charges and surcharges, divided by
roaming minutes of use) was $0.30 per minute for the three
months ended March 31, 2002 and $0.42 per minute for
the three months ended March 31, 2001. We believe that the
trend of increasing roaming minutes will continue to at least
partially offset declining roaming yields. Roaming revenue tends
to be impacted by seasonality. We typically have higher roaming
revenue during the second and third quarters of each year, as
users tend to travel more and, therefore, use their wireless
phones more during the spring and summer months.

We include long-distance revenue in service and
roaming revenue. Equipment revenue is revenue from selling
wireless equipment to our subscribers.

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Costs and Expenses

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

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

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

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

Our general and administrative costs include all
infrastructure costs, including costs for customer support,
billing, collections, and corporate administration. One of our
principal owners, Dobson Communications provides management and
certain other services to us in accordance with a management
agreement. We share corporate and shared call center costs
incurred by Dobson Communications and us primarily based on the
estimated populations in our respective licensed areas and
subscribers.

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

Critical Accounting Policies and
Practices

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

Our general and administrative expenses and
certain other operating expenses include all infrastructure
costs, including costs for customer support, billing,
collections and corporate administration. One of our principal
owners, Dobson Communications, provides management and certain
other services to us in accordance with a management agreement.
We share corporate and shared call center costs with Dobson
Communications based primarily on the estimated subscribers and
populations in our respective licensed areas. If there were a
change in the method used to allocate shared costs among us and
Dobson Communications, the change could have a significant
impact on our results of operations.

We depreciate our property, plant and equipment,
and amortize our customer lists and certain other intangible
assets over their useful lives. These useful lives are based on
our estimates of the period that the assets will generate
revenue. We review our intangible assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. With the
implementation of Statements of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets,
which

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requires companies to cease the amortization of
existing goodwill and intangible assets with indefinite lives,
we are treating our wireless license acquisition costs as
indefinite life intangible assets. As a result, effective
January 1, 2002, we ceased the amortization of goodwill and
wireless license acquisition costs. Instead, we now test our
goodwill and wireless license acquisition costs for impairment
at least annually. This change in policy has and may continue to
have a significant impact on our results of operations and
financial position. For the three months ended March 31,
2001, the aggregate amount of amortization expense, net of
income tax benefit, attributable to our goodwill and wireless
license acquisition costs was approximately $14.5 million
and approximately $8.2 million, respectively. Through
December 31, 2001, our accounting policy was to evaluate
the carrying value of our intangible assets based on our
undiscounted cash flows. However, as a result of implementing
SFAS No. 142, we are now required to evaluate the carrying
value of our indefinite life intangible assets using their fair
values. Upon implementation of this new pronouncement, we
recorded charges, net of income tax benefit of approximately
$281.6 million to reflect the write-down of our wireless
license acquisition costs to their fair values.


Results of Operations

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



| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Three Months Ended March 31, 2002
    Compared to Three Months Ended March 31, 2001

Operating revenue.For the three months ended
March 31, 2002, our total operating revenue increased
$9.6 million, or 10.6%, to $99.9 million from
$90.3 million for the comparable period in 2001. Our total
service revenue, roaming revenue and equipment and other revenue
represented 70.3%, 26.6% and 3.1%, respectively, of our total
operating revenue during the three months ended March 31,
2002 and 65.5%, 29.6% and 4.9%, respectively, of our total
operating revenue during the three months ended March 31,
2001.

The following table sets forth the components of
our operating revenue for the three months ended March 31,
2002 and 2001.

|                   |                             |                    |   |        |        |  |   |        |        | 
|------------------ | --------------------------- | ------------------ | - | ------ | ------ |  | - | ------ | ------ | 
|                   |                             |                   
|                   |                             | Three Months Ended
|                   |                             | March 31,         
|                   |                             |                   
|                   |                             | 2002               |   | 2001  
|                   |                             |                    |   |       
|                   |                             |                   
|                   |                             | ($ in thousands)  
|Operating revenue: |                             |                    |   |        |        |  |   |       
|                   | Service revenue             |                    | $ | 70,187 |        |  | $ | 59,117 |       
|                   | Roaming revenue             |                    |   | 26,593 |        |  |   | 26,727 |       
|                   | Equipment and other revenue |                    |   | 3,103  |        |  |   | 4,446  |       
|                   |                             |                    |   |        |        |  |   |       
|                   |                             | Total              |   | $      | 99,883 |  |   | $      | 90,290 | 
|                   |                             |                    |   |        |        |  |   |       

For the three months ended March 31, 2002,
our service revenue increased $11.1 million, or 18.7%, to
$70.2 million from $59.1 million for the three months
ended March 31, 2001. The increase was primarily
attributable to increased penetration and usage. Our subscriber
base increased 14.7% to 642,200 at March 31, 2002 from
560,000 at March 31, 2001. Our average monthly service
revenue per subscriber increased 2.8% to $37 for the three
months ended March 31, 2002 from $36 for the comparable
period in 2001. Our average monthly service revenue per
subscriber has been positively impacted by changes in the mix of
digital and analog subscribers in our subscriber base. On
March 31, 2002, 76.6% of our subscriber base was on digital
rate plans compared to 53.8% at March 31, 2001. Our digital
rate plans typically produce higher service revenue per
subscriber and allow subscribers to use more minutes in a larger
home area than our analog rate plan.

For the three months ended March 31, 2002,
our roaming revenue decreased $0.1 million, or 0.5%, to
$26.6 million from $26.7 million for the three months
ended March 31, 2001. Roaming minutes have increased by
38.3% from March 31, 2001 to March 31, 2002, however,
our roaming revenue per minute-of-use has decreased by 28.6%.
Decreases in our revenue per minute-of-use are a result of new
lower rate contracts that were entered into and scheduled rate
reductions in existing contracts.

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For the three months ended March 31, 2002,
our equipment and other revenue decreased $1.3 million, or
30.2%, to $3.1 million from $4.4 million for the three
months ended March 31, 2001. This decrease was a result of
increased phone discounts due to more competitive markets.

Cost of service.For
the three months ended March 31, 2002, our total cost of
service increased $4.1 million, or 17.3%, to
$27.4 million from $23.3 million for the comparable
period in 2001. As described with our service revenue above, on
average, our digital subscribers use more minutes than our
analog subscribers. This increased usage also increases the
minutes used by our subscribers outside our markets, thus
increasing the expenses we are charged by third-party wireless
providers. Our cost of service increased approximately
$2.5 million due to increased charges by third-party
wireless providers. The remaining increase of $1.6 million
was primarily the result of increased networking costs
associated with our increased build-out of cell sites and
continual upgrades to our digital network.

Cost of equipment.For the three months ended
March 31, 2002, our cost of equipment decreased
$3.6 million, or 32.1%, to $7.4 million during 2002
from $11.0 million in 2001. This decrease resulted from a
slow down in the migration of subscribers from analog to digital
service and handsets, along with the overall decrease in the
cost of wireless handsets.

Marketing and selling costs.For the three months ended
March 31, 2002, our marketing and selling costs decreased
$0.5 million, or 3.7%, to $13.6 million from
$14.1 million for the three months ended March 31,
2001 due to efficiencies gained from centralized marketing
functions with one of our principal owners, Dobson
Communications, and a decrease in gross subscriber additions.
Gross subscriber additions were 52,500 for the three months
ended March 31, 2002 compared to 60,200 for the three
months ended March 31, 2001.

General and administrative costs.For the three months ended
March 31, 2002, our general and administrative costs
increased $2.6 million, or 18.5%, to $16.7 million
from $14.1 million for the three months ended
March 31, 2001. This increase is a result of increased
infrastructure costs such as customer service, billing,
collections and administrative costs as a result of the overall
growth of our business. Our overall monthly general and
administrative costs per subscriber remained constant at $9 for
the three-month periods ended March 31, 2002 and 2001.

Depreciation and amortization expense.For the three months ended
March 31, 2002, our depreciation and amortization expense
decreased $27.1 million, or 62.9%, to $16.0 million
from $43.1 million for 2001. The decrease is a result of
the implementation of SFAS No. 142, Goodwill and
other Intangible Assets, which required companies to stop
amortizing existing goodwill and intangible assets with
indefinite lives effective January 1, 2002. Under this new
rule we treat our wireless licenses as indefinite life
intangibles assets.

Interest expense.For the three months ended
March 31, 2002, our interest expense increased
$1.5 million, or 4.1%, to $40.5 million from $39.0 for
the three months ended March 31, 2001. The increase
primarily resulted from an overall increase in our interest
expense incurred as a result of our interest rate hedges on our
credit facility.

Loss from discontinued
operations.For the three months ended
March 31, 2002, we had a net loss from discontinued
operations of $0.7 million, compared to $0.5 million
for the three months ended March 31, 2001. This increase of
$0.2 million in our loss from discontinued operations
reflects our increased losses from Tennessee 4 RSA, which we
sold to Verizon Wireless on February 8, 2002.

Gain from sale of discontinued operations.For the three months ended
March 31, 2002, we had a gain from sale of discontinued
operations of $13.5 million, net of tax. This gain reflects
our sale of our Tennessee 4 RSA market, which we sold to
Verizon Wireless on February 8, 2002.

Cumulative effect of change in accounting
principle.For the three months ended
March 31, 2002 we recognized an impairment on our wireless
license acquisition costs of approximately $281.6 million,
net of tax benefit, as a result of implementing SFAS
No. 142 Goodwill and Other Intangible Assets.

Net loss.For the
three months ended March 31, 2002, our net loss was
$282.2 million. Our net loss increased $243.5 million,
or 629.2%, from $38.7 million for the three months ended
March 31, 2001. The

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increase in our net loss was primarily
attributable to our cumulative effect of change in accounting
principle related to the implementation of SFAS No. 142, as
described above.


Dividends on preferred stock.For the three months ended
March 31, 2002, our dividends on preferred stock were
$1.1 million. They are the result of the purchase of
35,000 shares of our preferred stock by one of our
principal owners, Dobson Communications, on June 29, 2001.

Liquidity and Capital Resources

We have required, and will likely continue to
require, substantial capital to further develop, expand and
upgrade our wireless systems and those we may acquire. We have
financed our operations through cash flows from operating
activities, bank debt, the sale of debt securities and infusions
of equity capital from one of our parents and its affiliates.
Neither Dobson Communications nor AT&T Wireless is obligated
to contribute equity capital or other financing to us or our
subsidiaries.



| |              
| | -------------
| | Net Cash Flow

At March 31, 2002, we had a working capital
deficit of $8.0 million, a ratio of current assets to
current liabilities of 1:1 and an unrestricted cash balance of
$4.0 million, which compares to a working capital deficit
of $8.1 million, a ratio of current assets to current
liabilities of 1:1 and an unrestricted cash balance of
$6.0 million at December 31, 2001.

Our net cash provided by operating activities
totaled $28.5 million for the three months ended
March 31, 2002 compared to net cash used in operating
activities of $6.2 million for the three months ended
March 31, 2001. The increase is primarily due to the
decrease in our loss from continuing operations and our change
in current assets and liabilities.

Our net cash provided by investing activities
totaled $182.2 million for the three months ended
March 31, 2002 compared to net cash used in investing
activities of $29.4 million for the three months ended
March 31, 2001. This increase is related primarily to the
net proceeds from the sale of Tennessee 4 RSA to Verizon
Wireless for a total of approximately $202.6 million, less
approximately $8.1 million reserved in escrow. Capital
expenditures were $13.2 million for the three months ended
March 31, 2002 and $22.1 million for the three months
ended March 31, 2001.

Net cash used in financing activities was
$212.6 million for the three months ended March 31,
2002 compared to net cash provided by financing activities of
$28.0 million for the three months ended March 31,
2001. This decrease is primarily due to proceeds from senior
subordinated notes of $446.7 million, offset by purchase of
restricted investment of $85.2 million and deferred
financing costs of $15.2 million for the three months ended
March 31, 2001. Financing activity sources for the three
months ended March 31, 2002 consisted of proceeds from
long-term debt of $87.0 million, which was offset by
repayments of long-term debt totaling $299.3 million.



| |                  
| | -----------------
| | Capital Resources

On February 25, 2000, we obtained a
$1.75 billion bank credit facility that included a
$300.0 million revolving credit facility and
$1.45 billion of term loan facilities. Our credit facility
was amended on March 14, 2001, when we permanently repaid
$200.0 million of the term loan. We used proceeds from the
issuance of our $450.0 million Senior Subordinated Notes
due 2009, to reduce our credit facility to $1.55 billion.
We further amended our credit facility on June 4, 2001,
when we permanently repaid $201.3 million of the term loan
with proceeds from our issuance of $250.0 million Senior
Subordinated Notes due 2009, which reduced our credit facility
to $1.34 billion. On September 27, 2001, our lenders
and we agreed to a third amendment of the credit facility, which
modifies certain financial covenants (as described below). In
addition to our financial covenants, we are required to make
prepayments of proceeds received from significant asset sales,
new borrowings and a portion of excess cash flow. Therefore,
when we completed the sale of Tennessee 4 RSA to Verizon
Wireless for a total purchase price of $202.0 million
during February 2002, we permanently prepaid approximately
$190.0 million of this credit facility. The maximum
availability of the credit facility is limited

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by restrictions, such as certain financial
ratios. The maximum availability subject to these restrictions
is $906.2 million. As of March 31, 2002, we had
outstanding borrowings under our credit facility of
$901.3 million, and approximately $4.9 million of
credit availability.


Our amended credit facility imposes a number of
restrictive covenants that, among other things, limit our
ability to incur additional indebtedness, create liens and pay
dividends. In addition, we are required to maintain certain
financial ratios, including, but not limited to:



| |   |                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a ratio of senior indebtedness to operating cash
    flow of 7.00 to 1 at December 31, 2001, decreasing to 5.75
    to 1 at December 31, 2002 and decreasing over time to 2.50
    to 1;                                    
|
| |  | a ratio of total indebtedness to operating cash
    flow of 10.10 to 1 at December 31, 2001, decreasing to 7.75
    to 1 at December 31, 2002 and decreasing over time to 4.00
    to 1;                                    
|
| |  | a ratio of operating cash flow to debt service
    requirements of 1.20 to 1 at December 31, 2001, increasing
    to 1.35 to 1 at December 31, 2002 and decreasing over time
    to 1.20 to 1;                              
|
| |  | a ratio of operating cash flow to interest
    expense requirement of 1.45 to 1 at December 31, 2001,
    increasing to 1.80 to 1 at December 31, 2002 and increasing
    over time to 2.50 to 1;                           
|
| |  | beginning on December 31, 2002, a ratio of
    operating cash flow minus capital expenditures to the sum of
    debt service requirements and cash distributions of 1.00 to 1
    and continuing over time at 1.00 to 1; and
|
| |  | a limitation on capital expenditures.                                                                                                                                                                                       

Interest on the revolving credit facility and the
term loan facilities is variable and is based on a prime rate or
a LIBOR formula. The weighted average interest rate for the
three months ended March 31, 2002 was 4.8% and interest
rates have ranged in total between 4.4% and 10.1% since
inception. We are required to reduce the outstanding principal
balances of our term loans by a maximum of $42.6 million
during the next twelve months.

Our credit facility includes a financial covenant
requiring that we not exceed a total debt leverage ratio ranging
from 9.25 to 1.00 in the first quarter to 7.75 to 1.00 in the
fourth quarter 2002. Absent debt reduction from projected debt
levels or an amendment to the credit facility modifying this
covenant, we will likely be unable to comply with this covenant
during 2002. We are currently in discussions with our lenders
regarding an amendment to our credit facility. However, if we
are unable to comply with the total debt leverage ratio or
renegotiate the credit facility, and there is a covenant
violation, our lenders would have the right, but not the
obligation, to accelerate the repayment of the entire amount
outstanding under the credit facility. An acceleration under the
credit facility would allow the holders of our Senior
Subordinated Notes to declare the principal and interest of the
Senior Subordinated Notes immediately due and payable. We would
then be required to either refinance the debt or repay the
amounts due. If this were to occur, we would attempt to
renegotiate the debt with the holders to provide, among other
things, for an extended repayment term. We can provide no
assurance that we would be able to renegotiate the debt under
these conditions or meet our obligation under the accelerated
repayment terms. As a result, there may be substantial doubt
about our ability to continue as a going concern. In the
independent auditors report on our 2001 financial statements,
the auditors expressed concern about our ability to continue as
a going concern, if in the future, we do not meet certain
financial ratios required under the terms of our credit
facility. In addition, a debt compliance certificate from the
auditors was not delivered to the administrative agent for our
credit facility until 3 days after the certificate was due.
Finally, the interest payment due to the lender banks on
April 8, 2002 was actually paid on April 10, 2002.
Because of these events and the concern by the administrative
agent for the lender banks that any or all of such events might
be deemed a material adverse change which, if such occurred,
would be an event of default under our credit facility, the
administrative agent for the lender banks provided us with a
waiver for these occurrences, which expires May 17, 2002.

On March 14, 2001, we sold
$450.0 million Senior Subordinated Notes due 2009 at a
discount of $3.3 million that carry an interest rate of
9.5%. The discount will be amortized over the life of the notes.
On June 4, 2001, we sold $250.0 million of Senior
Subordinated Notes due 2009 at a discount of $3.6 million
that carry an interest rate of 9.5%. The discount will be
amortized over the life of the notes.

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On June 29, 2001, we received
$35.0 million from Dobson Communications from its purchase
of 35,000 shares of our 12.0% Series A Preferred Stock.



| |                    
| | -------------------
| | Capital Commitments

We had capital expenditures of $13.2 million
for the three month ended March 31, 2002. We have budgeted
approximately $50.0 to $55.0 million for capital
expenditures in 2002, of which, approximately $5.0 million
to $10.0 million will be used to begin our GSM/ GPRS
overlay. We may also require additional financing for future
acquisitions and to refinance our debt at its final maturities.
The amount and timing of capital expenditures may vary depending
on the rate at which we expand and develop our wireless systems
and whether we consummate additional acquisitions.

Although we cannot provide any assurance,
assuming successful implementation of our strategy, including
the further development of our wireless systems, growth in our
cash flows, and renegotiation of our credit facility, if
necessary to avoid a default as described above, we believe that
borrowings under our credit facility, the proceeds from the sale
of $35.0 million of Series A preferred stock on
June 29, 2001, the sale of our license for Tennessee 4
RSA in February 2002 and cash flows from operations are expected
to be sufficient to satisfy our currently expected capital
expenditures, working capital and debt service obligations over
the next year. The actual amount and timing of our future
capital requirements may differ materially from our estimates as
a result of, among other things, the demand for our services and
regulatory, technological and competitive developments. We
currently expect that we may have to refinance our indebtedness
at their respective maturities commencing in 2007. Sources of
additional financing may include commercial bank borrowings,
vendor financing and the sale of equity or debt securities. We
cannot assure you that any such financing will be available on
acceptable terms or at all.

Effect of New Accounting Standards

In July 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards
No. 141, Business Combinations and
No. 142, Goodwill and Other Intangible Assets.
These standards prohibit the application of the
pooling-of-interests method of accounting for business
combinations effective June 30, 2001 and require companies
to cease the amortization of existing goodwill and intangible
assets with indefinite lives effective January 1, 2002.
Under the new rules, we are treating our wireless license
acquisition costs as indefinite life intangible assets. As a
result, effective January 1, 2002, we no longer amortize
goodwill and wireless license acquisition costs. Instead, we are
testing for impairment of goodwill or indefinite life intangible
assets at least annually and will only adjust the carrying
amount of these intangible assets upon an impairment of the
goodwill or indefinite life intangible assets. For the three
months ended March 31, 2001, we recorded approximately
$14.5 million and approximately $8.2 million of
amortization expense, net of income tax benefit, related to our
goodwill and wireless license acquisition costs, respectively.
Through December 31, 2001, our accounting policy was to
evaluate the carrying value of our intangible assets based on
our undiscounted cash flows. However, as a result of
implementing SFAS No. 142, we are now required to evaluate
the carrying value of our indefinite life intangible assets
using their fair values. Upon the implementation of SFAS
No. 142 on January 1, 2002, we recorded charges, net
of income tax benefit, of approximately $281.7 million, to
reflect the write-down of our wireless license acquisition costs
to their fair value.

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

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In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. This statement replaces SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.
However, it maintains the fundamental provisions of SFAS
No. 121 for recognition and measurement of the impairment
of long-lived assets to be held and used and for measurement of
long-lived assets to be disposed of by sale. This statement
applies to all long-lived assets, including discontinued
operations, and replaces the provisions of APB Opinion
No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of
a Segment of a Business, for the disposal of segments of a
business. This statement requires that those long-lived assets
be measured at the lower of carrying amount or fair value less
cost to sell. During the fourth quarter 2001, two of our
wholly-owned, indirect subsidiaries, entered into a definitive
agreement to sell Tennessee 4 RSA. As a result of this sale, we
elected to early adopt this standard during the fourth quarter
2001, effective January 1, 2001 to properly reflect the
operations, assets and liabilities of Tennessee 4 RSA as
discontinued operations in our condensed consolidated financial
statements. Tennessee 4 RSA was sold to Verizon Wireless on
February 8, 2002 and proceeds were used to pay down
long-term debt.

Forward-Looking Statements

The description of our plans set forth herein,
including planned capital expenditures and acquisitions, are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. These plans involve a number of risks and uncertainties.
Important factors that could cause actual capital expenditures,
acquisition activity or our performance to differ materially
from the plans include, without limitation, our ability to
satisfy the financial covenants of our outstanding debt and
preferred stock instruments and to raise additional capital; our
ability to manage our rapid growth successfully and to compete
effectively in our wireless business against competitors with
greater financial, technical, marketing and other resources;
changes in end-user requirements and preferences; the
development of other technologies and products that may gain
more commercial acceptance than those of ours; and adverse
regulatory changes. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only
as of the date hereof. We undertake no obligation to update or
revise these forward-looking statements to reflect events or
circumstances after the date hereof including, without
limitation, changes in our business strategy or planned capital
expenditures, or to reflect the occurrence of unanticipated
events.




Item 3.     Quantitative
and Qualitative Disclosures About Market Risk

Our primary market risk relates to changes in
interest rates. Market risk is the potential loss arising from
adverse changes in market prices and rates, including interest
rates. We do not enter into derivatives or other financial
instruments for trading or speculative purposes. The objective
of our financial risk management is to minimize the negative
impact of interest rate fluctuations on our earnings and equity.
The counterparty is a major financial institution. As of
March 31, 2002, we had interest rate swaps under various
derivative contracts totaling $900.0 billion on our
$1.34 billion credit facility. The terms of these
agreements expire in June 2002. Increases in interest expense
related to the interest rate hedge for the three months ended
March 31, 2002 and 2001 were reflected in our results of
operations. For the three months ended March 31, 2002 and
2001, the interest expense related to the hedge was
approximately $11.8 million and $3.8 million due to
the decline in current market interest rates. As a result of our
paydown of our outstanding bank debt with the proceeds from our
sale of Tennessee 4 RSA, we determined that one of our
hedge transactions, totaling $125.0 million, was
ineffective. Therefore, we recorded a loss of $1.1 million
representing the fair value of this transaction as of
March 31, 2002.

The fair market value of long-term fixed interest
rate debt is subject to interest rate risk. Generally, the fair
market value of fixed interest rate debt will increase as
interest rates fall and decrease as interest rates raise. Based
on our market risk sensitive instruments outstanding at
March 31, 2002, we have determined that there was no
material market risk exposure to our condensed consolidated
financial position, results of operations or cash flows as of
such date.

19



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##### Table of Contents






PART II. OTHER INFORMATION




Item 1.     Legal
Proceedings

Not applicable




Item 2.     Changes
in Securities and Use of Proceeds

Not applicable




Item 3.     Defaults
Upon Senior Securities

Not applicable




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

Not applicable




Item 5.     Other
Information

Not applicable




Item 6.     Exhibits
and Reports on Form 8K

(a) Exhibits

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

|        |      |             |  |                                                                                                                                                                                          |  |  |            | 
|------- | ---- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ---------- | 
|Exhibit |      |             |  | Method of                                                                                                                                                                               
|Numbers |      | Description |  | Filing                                                                                                                                                                                  
|        |      |             |  |                                                                                                                                                                                         
|        | 3.1  |             |  | Fourth Restated Certificate of Incorporation of
    American Cellular Corporation                                                                                                        |  |  | (1)[3.1]   | 
|        | 3.1. | 1           |  | Amendment to Fourth Restated Certificate of
    Incorporation of American Cellular Corporation                                                                                           |  |  | (5)[3.1.1] | 
|        | 3.1. | 2           |  | Certificate of Designation for the Series A
    Preferred Stock of American Cellular Corporation                                                                                         |  |  | (5)[3.1.2] | 
|        | 3.2  |             |  | Amended and Restated Bylaws of Registrant                                                                                                                                                |  |  | (1)[3.2]   | 
|        | 4.1  |             |  | Second Amended and Restated Limited Liability
    Company Agreement of ACC Acquisition LLC, dated
    February 25, 2000, between AT&T Wireless Services
    JV Co. and Dobson JV Company |  |  | (1)[4.1]   | 
|        | 4.2  |             |  | Indenture dated March 14, 2001 between
    American Cellular Corporation and United States Trust Company of
    New York                                                                 |  |  | (1)[4.2]   | 
|        | 4.3  |             |  | Escrow and Security Agreement dated
    March 14, 2001 between American Cellular Corporation and
    United States Trust Company of New York                                             |  |  | (1)[4.3]   | 
|        | 4.4  |             |  | Registration Rights Agreement dated
    March 14, 2001 between American Cellular Corporation,
    Lehman Brothers, Inc. and Banc of America Securities LLC                               |  |  | (1)[4.4]   | 
|        | 4.5  |             |  | Escrow and Security Agreement dated June 4,
    2001 between American Cellular Corporation and United States
    Trust Company of New York                                               |  |  | (4)[4.5]   | 
|        | 4.6  |             |  | Registration Rights Agreement dated June 4,
    2001 between American Cellular Corporation, Banc of America
    Securities LLC and Lehman Brothers, Inc.                                 |  |  | (4)[4.6]   | 
|        | 10.1 |             |  | Amended and Restated Management Agreement, dated
    February 25, 2000, between Dobson Cellular Systems, Inc.
    and of ACC Acquisition LLC                                             |  |  | (1)[10.1]  | 
|        | 10.2 |             |  | Amended and Restated Operating Agreement, dated
    February 25, 2000, between Dobson Cellular Systems, Inc.
    (and its affiliates) and ACC Acquisition LLC (and its affiliates)       |  |  | (1)[10.2]  | 

20



---



##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                            |  |  |             | 
|------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | 
|Exhibit |       |             |  | Method of                                                                                                                                                                                                                 
|Numbers |       | Description |  | Filing                                                                                                                                                                                                                    
|        |       |             |  |                                                                                                                                                                                                                           
|        | 10.3  |             |  | Amended and Restated Operating Agreement, dated
    February 25, 2000, between AT&T Wireless Services, Inc.
    (and its affiliates) and ACC Acquisition LLC (and its affiliates)                                          |  |  | (1)[10.3]   | 
|        | 10.4  |             |  | Credit Agreement, dated February 25, 2000,
    among American Cellular Corporation, Bank of America, N.A., CIBC
    World Market Corp., Barclays Bank PLC, Lehman Commercial Paper
    Inc., TD Securities Inc. and others |  |  | (1)[10.4]   | 
|        | 10.4. | 1           |  | First Amendment to Credit Agreement dated
    March 2, 2001                                                                                                                                                                |  |  | (1)[10.4.1] | 
|        | 10.4. | 2           |  | Second Amendment to Credit Agreement dated
    May 31, 2001                                                                                                                                                                |  |  | (2)[10.4.2] | 
|        | 10.4. | 3           |  | Third Amendment to Credit Agreement dated
    September 27, 2001                                                                                                                                                           |  |  | (5)[10.4.3] | 
|        | 10.4. | 4           |  | Limited Waiver to Credit Agreement dated
    April 10, 2002                                                                                                                                                                |  |  | (6)         | 
|        | 10.5* |             |  | License Agreement, dated October 8, 2001, by
    and between H.O. Systems, Inc. and American Cellular Corporation                                                                                                          |  |  | (5)[10.5]   | 
|        | 10.6* |             |  | Purchase and License Agreement between Nortel
    Networks, Inc. and Dobson Communications Corporation, dated
    November 16, 2001                                                                                        |  |  | (5)[10.6]   | 
|        | 10.7  |             |  | Form of License Agreement among Cellular One
    Group and various subsidiaries of American Cellular Corporation                                                                                                           |  |  | (1)[10.7]   | 
|        | 10.8  |             |  | Intercarrier Roamer Service Agreement, dated
    January 23, 1997, between American Cellular Corporation, as
    successor to PriCellular Corporation and United States Cellular
    Corporation                           |  |  | (1)[10.8]   | 
|        | 10.9. | 1           |  | Letter Agreement dated July 5, 2000
    accepting American Cellular Corporation as an affiliate of
    Dobson Cellular Systems, Inc.                                                                                       |  |  | (1)[10.9.1] | 
|        | 10.11 |             |  | Intercarrier Roamer Service Agreement, dated
    January 16, 1997, between Licensees and Permittees (as
    defined in the Agreement) and American Cellular Corporation,
    successor to PriCellular Corporation          |  |  | (1)[10.16]  | 
|        | 10.12 |             |  | Asset Purchase Agreement dated October 30,
    2001 by and between ACC of Tennessee LLC, and Cellco
    Partnership, a Delaware general partnership, d/b/a Verizon
    Wireless                                            |  |  | (3)[10.17]  | 
|        | 10.13 | *           |  | InterCarrier Multi-Standard Roaming Agreement
    effective as of January 25, 2002, between Cingular
    Wireless, LLC and Dobson Cellular Systems, Inc. and its
    Affiliates, including American Cellular Corporation   |  |  | (5)[10.13]  | 



---



| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| | * | Confidential treatment has been requested for a
    portion of this document.



|    |                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to the Registrants
    Registration Statement on Form S-4 (registration
    No. 333-59322), as the exhibit number indicated in brackets
    and incorporated by reference herein.       
|   
|(2) | Filed as an exhibit to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001, as the exhibit number indicated in brackets
    and incorporated by reference herein.    
|   
|(3) | Filed as an exhibit to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    September 31, 2001, as the exhibit number indicated in
    brackets and incorporated by reference herein.
|   
|(4) | Filed as an exhibit to the Registrants
    Registration Statement on Form S-4 (no. 333-63454) as the
    exhibit number indicated in brackets and incorporated by
    reference herein.                     
|   
|(5) | Filed as an exhibit to the Registrants
    Annual Report on Form 10-K for the year ended
    December 31, 2001, as the exhibit number indicated in
    brackets and incorporated by reference herein.       
|   
|(6) | Filed herewith.                                                                                                                                                                                              

(b) Reports on Form 8-K

Not applicable

21



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##### Table of Contents



SIGNATURES

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



| |                              
| | -----------------------------
| | AMERICAN CELLULAR CORPORATION

|                   |  |                                                                                                                                                               
|------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date: May 14, 2002 |  | /s/ EVERETT R. DOBSON
    ------------------------------------------------
    Everett R. DobsonPresident and Director                                        
|                  
|Date: May 14, 2002 |  | /s/ BRUCE R. KNOOIHUIZEN
    ------------------------------------------------
    Bruce R. KnooihuizenTreasurer and Director
    (Principal Financial Officer)

22



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##### Table of Contents



INDEX TO EXHIBITS

|        |       |             |  |                                                                                                                                                                                                                            |  |  |             | 
|------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | 
|Exhibit |       |             |  | Method of                                                                                                                                                                                                                 
|Numbers |       | Description |  | Filing                                                                                                                                                                                                                    
|        |       |             |  |                                                                                                                                                                                                                           
|        | 3.1   |             |  | Fourth Restated Certificate of Incorporation of
    American Cellular Corporation                                                                                                                                          |  |  | (1)[3.1]    | 
|        | 3.1.  | 1           |  | Amendment to Fourth Restated Certificate of
    Incorporation of American Cellular Corporation                                                                                                                             |  |  | (5)[3.1.1]  | 
|        | 3.1.  | 2           |  | Certificate of Designation for the Series A
    Preferred Stock of American Cellular Corporation                                                                                                                           |  |  | (5)[3.1.2]  | 
|        | 3.2   |             |  | Amended and Restated Bylaws of Registrant                                                                                                                                                                                  |  |  | (1)[3.2]    | 
|        | 4.1   |             |  | Second Amended and Restated Limited Liability
    Company Agreement of ACC Acquisition LLC, dated
    February 25, 2000, between AT&T Wireless Services
    JV Co. and Dobson JV Company                                   |  |  | (1)[4.1]    | 
|        | 4.2   |             |  | Indenture dated March 14, 2001 between
    American Cellular Corporation and United States Trust Company of
    New York                                                                                                   |  |  | (1)[4.2]    | 
|        | 4.3   |             |  | Escrow and Security Agreement dated
    March 14, 2001 between American Cellular Corporation and
    United States Trust Company of New York                                                                               |  |  | (1)[4.3]    | 
|        | 4.4   |             |  | Registration Rights Agreement dated
    March 14, 2001 between American Cellular Corporation,
    Lehman Brothers, Inc. and Banc of America Securities LLC                                                                 |  |  | (1)[4.4]    | 
|        | 4.5   |             |  | Escrow and Security Agreement dated June 4,
    2001 between American Cellular Corporation and United States
    Trust Company of New York                                                                                 |  |  | (4)[4.5]    | 
|        | 4.6   |             |  | Registration Rights Agreement dated June 4,
    2001 between American Cellular Corporation, Banc of America
    Securities LLC and Lehman Brothers, Inc.                                                                   |  |  | (4)[4.6]    | 
|        | 10.1  |             |  | Amended and Restated Management Agreement, dated
    February 25, 2000, between Dobson Cellular Systems, Inc.
    and of ACC Acquisition LLC                                                                               |  |  | (1)[10.1]   | 
|        | 10.2  |             |  | Amended and Restated Operating Agreement, dated
    February 25, 2000, between Dobson Cellular Systems, Inc.
    (and its affiliates) and ACC Acquisition LLC (and its affiliates)                                         |  |  | (1)[10.2]   | 
|        | 10.3  |             |  | Amended and Restated Operating Agreement, dated
    February 25, 2000, between AT&T Wireless Services, Inc.
    (and its affiliates) and ACC Acquisition LLC (and its affiliates)                                          |  |  | (1)[10.3]   | 
|        | 10.4  |             |  | Credit Agreement, dated February 25, 2000,
    among American Cellular Corporation, Bank of America, N.A., CIBC
    World Market Corp., Barclays Bank PLC, Lehman Commercial Paper
    Inc., TD Securities Inc. and others |  |  | (1)[10.4]   | 
|        | 10.4. | 1           |  | First Amendment to Credit Agreement dated
    March 2, 2001                                                                                                                                                                |  |  | (1)[10.4.1] | 
|        | 10.4. | 2           |  | Second Amendment to Credit Agreement dated
    May 31, 2001                                                                                                                                                                |  |  | (2)[10.4.2] | 
|        | 10.4. | 3           |  | Third Amendment to Credit Agreement dated
    September 27, 2001                                                                                                                                                           |  |  | (5)[10.4.3] | 
|        | 10.4. | 4           |  | Limited Waiver to Credit Agreement dated
    April 10, 2002                                                                                                                                                                |  |  | (6)         | 
|        | 10.5* |             |  | License Agreement, dated October 8, 2001, by
    and between H.O. Systems, Inc. and American Cellular Corporation                                                                                                          |  |  | (5)[10.5]   | 
|        | 10.6* |             |  | Purchase and License Agreement between Nortel
    Networks, Inc. and Dobson Communications Corporation, dated
    November 16, 2001                                                                                        |  |  | (5)[10.6]   | 
|        | 10.7  |             |  | Form of License Agreement among Cellular One
    Group and various subsidiaries of American Cellular Corporation                                                                                                           |  |  | (1)[10.7]   | 
|        | 10.8  |             |  | Intercarrier Roamer Service Agreement, dated
    January 23, 1997, between American Cellular Corporation, as
    successor to PriCellular Corporation and United States Cellular
    Corporation                           |  |  | (1)[10.8]   | 
|        | 10.9. | 1           |  | Letter Agreement dated July 5, 2000
    accepting American Cellular Corporation as an affiliate of
    Dobson Cellular Systems, Inc.                                                                                       |  |  | (1)[10.9.1] | 
|        | 10.11 |             |  | Intercarrier Roamer Service Agreement, dated
    January 16, 1997, between Licensees and Permittees (as
    defined in the Agreement) and American Cellular Corporation,
    successor to PriCellular Corporation          |  |  | (1)[10.16]  | 



---



##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                          |  |  |            | 
|------- | ----- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  | ---------- | 
|Exhibit |       |             |  | Method of                                                                                                                                                                                                               
|Numbers |       | Description |  | Filing                                                                                                                                                                                                                  
|        |       |             |  |                                                                                                                                                                                                                         
|        | 10.12 |             |  | Asset Purchase Agreement dated October 30,
    2001 by and between ACC of Tennessee LLC, and Cellco
    Partnership, a Delaware general partnership, d/b/a Verizon
    Wireless                                          |  |  | (3)[10.17] | 
|        | 10.13 | *           |  | InterCarrier Multi-Standard Roaming Agreement
    effective as of January 25, 2002, between Cingular
    Wireless, LLC and Dobson Cellular Systems, Inc. and its
    Affiliates, including American Cellular Corporation |  |  | (5)[10.13] | 



---



| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| | * | Confidential treatment has been requested for a
    portion of this document.



|    |                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to the Registrants
    Registration Statement on Form S-4 (registration
    No. 333-59322), as the exhibit number indicated in brackets
    and incorporated by reference herein.       
|   
|(2) | Filed as an exhibit to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001, as the exhibit number indicated in brackets
    and incorporated by reference herein.    
|   
|(3) | Filed as an exhibit to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    September 31, 2001, as the exhibit number indicated in
    brackets and incorporated by reference herein.
|   
|(4) | Filed as an exhibit to the Registrants
    Registration Statement on Form S-4 (no. 333-63454) as the
    exhibit number indicated in brackets and incorporated by
    reference herein.                     
|   
|(5) | Filed as an exhibit to the Registrants
    Annual Report on Form 10-K for the year ended
    December 31, 2001, as the exhibit number indicated in
    brackets and incorporated by reference herein.       
|   
|(6) | Filed herewith.