##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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Form 10-Q

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

Commission file no. 333-59322 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     o          No     þ

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

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).
Yes     o          No     þ

As of November 1, 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                                      
|                                                                    | Item 1. Financial Statements                                                                 
|CONDENSED CONSOLIDATED BALANCE SHEETS                              
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                    
|CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                    
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS               
|                                                                    | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                    | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                                    | Item 4. Controls and Procedures                                                              
|PART II.                                                           
|                                                                    | Item 1. Legal Proceedings                                                                    
|                                                                    | Item 2. Changes in Securities and Use of Proceeds                                            
|                                                                    | Item 3. Defaults Upon Senior Securities                                                      
|                                                                    | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                                    | Item 5. Other Information                                                                    
|                                                                    | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                                         
|CERTIFICATIONS FOR FORM 10-Q                                       
|CERTIFICATIONS FOR FORM 10-Q                                       
|INDEX TO EXHIBITS                                                  
|EX-10.6.1 Amendment to Purchase/License Agreement                  



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##### Table of Contents



AMERICAN CELLULAR CORPORATION

INDEX TO FORM 10-Q

|                                  |   |  |  |                                                                                                                         |  |  |    | 
|--------------------------------- | - |  |  | ----------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|Item No.                          |   |  |  | Page                                                                                                                   
|                                  |   |  |  |                                                                                                                        
|PART I.
    FINANCIAL INFORMATION
|                                  | 1 |  |  | Condensed Consolidated Financial Statements
    (Unaudited):                                                            |  |  |    | 
|                                  |   |  |  | Condensed Consolidated Balance Sheets as of
    September 30, 2002 and December 31, 2001                                |  |  | 2  | 
|                                  |   |  |  | Condensed Consolidated Statements of Operations
    for the Three and Nine Months Ended September 30, 2002 and 2001     |  |  | 3  | 
|                                  |   |  |  | Condensed Consolidated Statement of
    Stockholders (Deficit) Equity for the Nine Months Ended
    September 30, 2002 |  |  | 4  | 
|                                  |   |  |  | Condensed Consolidated Statements of Cash Flows
    for the Nine Months Ended September 30, 2002 and 2001               |  |  | 5  | 
|                                  |   |  |  | Notes to Condensed Consolidated Financial
    Statements                                                                |  |  | 6  | 
|                                  | 2 |  |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations                               |  |  | 13 | 
|                                  | 3 |  |  | Quantitative and Qualitative Disclosures about
    Market Risk                                                          |  |  | 24 | 
|                                  | 4 |  |  | Controls and Procedures                                                                                                 |  |  | 24 | 
|PART II.
    OTHER INFORMATION   
|                                  | 1 |  |  | Legal Proceedings                                                                                                       |  |  | 25 | 
|                                  | 2 |  |  | Changes in Securities and Use of Proceeds                                                                               |  |  | 25 | 
|                                  | 3 |  |  | Defaults Upon Senior Securities                                                                                         |  |  | 25 | 
|                                  | 4 |  |  | Submission of Matters to a Vote of Security
    Holders                                                                 |  |  | 25 | 
|                                  | 5 |  |  | Other Information                                                                                                       |  |  | 25 | 
|                                  | 6 |  |  | Exhibits and Reports on Form 8-K                                                                                        |  |  | 25 | 

1



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##### Table of Contents






PART I.

FINANCIAL INFORMATION






|        |                     
|------- | --------------------
|Item 1. | Financial Statements

AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED BALANCE
SHEETS


|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |               |               |               | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------------------------------------- | ------------- | ------------- | ------------- | ----------- | ------------- | ------------- | ------------- | 
|                                                   |                                                                                                         | September 30,                        |                                                          | December 31, 
|                                                   |                                                                                                         | 2002                                 |                                                          | 2001         
|                                                   |                                                                                                         |                                      |                                                          |              
|                                                   |                                                                                                         | (Unaudited)                          |                                                          |              
|ASSETS                                            
|Current Assets:                                    |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   | Cash and cash equivalents                                                                               |                                      | $                                                        | 6,018,875     |               |               | $           | 5,962,148     |              
|                                                   | Accounts receivable, net                                                                                |                                      |                                                          | 46,703,585    |               |               |             | 43,548,758    |              
|                                                   | Restricted cash and investments                                                                         |                                      |                                                          | 66,950,365    |               |               |             | 65,678,101    |              
|                                                   | Inventory                                                                                               |                                      |                                                          | 3,907,767     |               |               |             | 8,013,595     |              
|                                                   | Prepaid expenses and other                                                                              |                                      |                                                          | 8,117,925     |               |               |             | 7,983,596     |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   |                                                                                                         | Total current assets                 |                                                          |               | 131,698,517   |               |             |               | 131,186,198   |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|Property, Plant and Equipment, net                 |                                                                                                         |                                      | 199,516,809                                              |               |               |               | 203,168,050 |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|Other Assets:                                      |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   | Restricted investments                                                                                  |                                      |                                                          | 8,213,484     |               |               |             | 32,184,495    |              
|                                                   | Wireless license acquisition costs, net                                                                 |                                      |                                                          | 569,168,796   |               |               |             | 1,039,523,681 |              
|                                                   | Goodwill, net                                                                                           |                                      |                                                          | 700,106,989   |               |               |             | 1,077,123,680 |              
|                                                   | Deferred financing costs, net                                                                           |                                      |                                                          | 42,676,381    |               |               |             | 45,166,918    |              
|                                                   | Customer list, net                                                                                      |                                      |                                                          | 22,995,628    |               |               |             | 30,318,297    |              
|                                                   | Other non-current assets                                                                                |                                      |                                                          | 536,788       |               |               |             | 504,391       |              
|                                                   | Assets of discontinued operations                                                                       |                                      |                                                          |              |               |               |             | 139,854,463   |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   |                                                                                                         | Total other assets                   |                                                          |               | 1,343,698,066 |               |             |               | 2,364,675,925 |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   |                                                                                                         |                                      | Total assets                                             |               | $             | 1,674,913,392 |             |               | $             | 2,699,030,173 | 
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|LIABILITIES AND STOCKHOLDERS
    (DEFICIT) EQUITY
|Current Liabilities:                               |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   | Accounts payable                                                                                        |                                      | $                                                        | 23,860,832    |               |               | $           | 21,375,257    |              
|                                                   | Accounts payable  affiliates                                                                           |                                      |                                                          |              |               |               |             | 17,729,679    |              
|                                                   | Accrued expenses                                                                                        |                                      |                                                          | 10,774,198    |               |               |             | 10,475,570    |              
|                                                   | Accrued interest payable                                                                                |                                      |                                                          | 40,143,088    |               |               |             | 31,308,522    |              
|                                                   | Accrued dividends payable                                                                               |                                      |                                                          | 5,582,471     |               |               |             | 2,138,711     |              
|                                                   | Deferred revenue and customer deposits                                                                  |                                      |                                                          | 10,796,560    |               |               |             | 11,745,161    |              
|                                                   | Current portion of long-term debt                                                                       |                                      |                                                          | 1,598,980,876 |               |               |             | 46,909,091    |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   |                                                                                                         | Total current liabilities            |                                                          |               | 1,690,138,025 |               |             |               | 141,681,991   |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|Other Liabilities:                                 |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   | Long-term debt, net of current portion                                                                  |                                      |                                                          |              |               |               |             | 1,760,208,032 |              
|                                                   | Deferred tax liabilities                                                                                |                                      |                                                          | 53,925,422    |               |               |             | 186,382,124   |              
|                                                   | Liabilities of discontinued operations                                                                  |                                      |                                                          |              |               |               |             | 7,495,882     |              
|                                                   | Other non-current liabilities                                                                           |                                      |                                                          |              |               |               |             | 23,698,750    |              
|                                                   | Commitments (Note 7)                                                                                    |                                      |                                                          |               |               |               |             |               |              
|                                                   | Series A preferred stock (Note 5)                                                                       |                                      |                                                          | 35,000,000    |               |               |             | 35,000,000    |              
|Stockholders (Deficit) Equity:                    |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   | Class A common stock, $.01 par value,
    3,000 shares authorized and 100 issued                        |                                      |                                                          | 1             |               |               |             | 1             |              
|                                                   | Paid-in capital                                                                                         |                                      |                                                          | 797,827,564   |               |               |             | 797,827,564   |              
|                                                   | Retained deficit                                                                                        |                                      |                                                          | (901,977,620  | )             |               |             | (239,044,921  | )            
|                                                   | Accumulated other comprehensive loss, net of
    income tax benefit of $9,479,500 at December 31, 2001. |                                      |                                                          |              |               |               |             | (14,219,250   | )            
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   |                                                                                                         | Total stockholders (deficit) equity |                                                          |               | (104,150,055  | )             |             |               | 544,563,394   |              
|                                                   |                                                                                                         |                                      |                                                          |               |               |               |             |              
|                                                   |                                                                                                         |                                      | Total liabilities and stockholders
    (deficit) equity |               | $             | 1,674,913,392 |             |               | $             | 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


|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |              |             | 
|-------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ---------- | ----------------- | ----------- | ---- | ----------- | ----------- | ----------- | - | ------------ | ------------ | ----------- | - | ------------ | ------------ | ----------- | 
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                  
|                                                                                       |                                                                                                                                                                                                                                                    | Three Months Ended       |            | Nine Months Ended
|                                                                                       |                                                                                                                                                                                                                                                    | September 30,            |            | September 30,    
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                  
|                                                                                       |                                                                                                                                                                                                                                                    | 2002                     |            | 2001              |             | 2002 |             | 2001       
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |            
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                  
|                                                                                       |                                                                                                                                                                                                                                                    | (Unaudited)              |            | (Unaudited)      
|Operating Revenue:                                                                     |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|                                                                                       | Service revenue                                                                                                                                                                                                                                    |                          | $          | 79,430,083        |             |      | $           | 71,812,475  |             |   | $            | 225,877,101  |             |   | $            | 198,118,311  |            
|                                                                                       | Roaming revenue                                                                                                                                                                                                                                    |                          |            | 40,237,474        |             |      |             | 40,154,259  |             |   |              | 102,422,849  |             |   |              | 101,201,303  |            
|                                                                                       | Equipment and other revenue                                                                                                                                                                                                                        |                          |            | 4,534,483         |             |      |             | 4,582,823   |             |   |              | 11,594,931   |             |   |              | 13,626,294   |            
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|                                                                                       |                                                                                                                                                                                                                                                    | Total operating revenue  |            |                   | 124,202,040 |      |             |             | 116,549,557 |   |              |              | 339,894,881 |   |              |              | 312,945,908 | 
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Operating Expenses:                                                                    |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|                                                                                       | Cost of service (exclusive of items shown
    separately below)                                                                                                                                                                                    |                          |            | 28,392,059        |             |      |             | 28,375,126  |             |   |              | 85,039,681   |             |   |              | 77,899,125   |            
|                                                                                       | Cost of equipment                                                                                                                                                                                                                                  |                          |            | 9,053,094         |             |      |             | 8,762,195   |             |   |              | 24,202,783   |             |   |              | 29,630,173   |            
|                                                                                       | Marketing and selling                                                                                                                                                                                                                              |                          |            | 15,031,214        |             |      |             | 14,618,758  |             |   |              | 43,418,395   |             |   |              | 42,417,518   |            
|                                                                                       | General and administrative                                                                                                                                                                                                                         |                          |            | 18,395,427        |             |      |             | 15,993,130  |             |   |              | 52,033,296   |             |   |              | 44,990,483   |            
|                                                                                       | Depreciation and amortization                                                                                                                                                                                                                      |                          |            | 16,951,001        |             |      |             | 46,461,049  |             |   |              | 49,695,596   |             |   |              | 134,923,710  |            
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|                                                                                       |                                                                                                                                                                                                                                                    | Total operating expenses |            |                   | 87,822,795  |      |             |             | 114,210,258 |   |              |              | 254,389,751 |   |              |              | 329,861,009 | 
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Operating income (loss)                                                                |                                                                                                                                                                                                                                                    |                          | 36,379,245 |                   |             |      | 2,339,299   |             |             |   | 85,505,130   |              |             |   | (16,915,101  | )           
|Other (expense) income:                                                                |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|                                                                                       | Interest expense                                                                                                                                                                                                                                   |                          |            | (29,925,510       | )           |      |             | (42,855,027 | )           |   |              | (109,247,715 | )           |   |              | (123,800,194 | )          
|                                                                                       | Impairment of goodwill                                                                                                                                                                                                                             |                          |            |                  |             |      |             |            |             |   |              | (377,000,000 | )           |   |              |             |            
|                                                                                       | Other income, net                                                                                                                                                                                                                                  |                          |            | 679,678           |             |      |             | 672,890     |             |   |              | 964,027      |             |   |              | 2,478,095    |            
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Income (loss) before income taxes and
    discontinued operations                      |                                                                                                                                                                                                                                                    |                          | 7,133,413  |                   |             |      | (39,842,838 | )           |             |   | (399,778,558 | )            |             |   | (138,237,200 | )           
|                                                                                       | Income tax (expense) benefit                                                                                                                                                                                                                       |                          |            | (2,853,369        | )           |      |             | 10,013,267  |             |   |              | 9,111,420    |             |   |              | 37,729,540   |            
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Income (loss) from continuing operations                                               |                                                                                                                                                                                                                                                    |                          | 4,280,044  |                   |             |      | (29,829,571 | )           |             |   | (390,667,138 | )            |             |   | (100,507,660 | )           
|Discontinued operations: (Note 2)                                                      |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|                                                                                       | Loss from discontinued operations, net of income
    tax (expense) benefit of $(244,485) for the three months
    ended September 30, 2001 and $435,838 and $(762,625) for
    the nine months ended September 30, 2002 and 2001,
    respectively |                          |            |                  |             |      |             | (445,666    | )           |   |              | (653,909     | )           |   |              | (1,289,406   | )          
|                                                                                       | Gain from sale of discontinued operations, net of
    income tax expense of $50,282,976 for the nine months ended
    September 30, 2002                                                                                                           |                          |            |                  |             |      |             |            |             |   |              | 13,472,110   |             |   |              |             |            
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Income (loss) before cumulative effect of
    change in accounting principle           |                                                                                                                                                                                                                                                    |                          | 4,280,044  |                   |             |      | (30,275,237 | )           |             |   | (377,848,937 | )            |             |   | (101,797,066 | )           
|                                                                                       | Cumulative effect of change in accounting
    principle, net of income tax benefit of $187,760,000
    (Note 8)                                                                                                                                    |                          |            |                  |             |      |             |            |             |   |              | (281,640,000 | )           |   |              |             |            
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Net income (loss)                                                                      |                                                                                                                                                                                                                                                    |                          | 4,280,044  |                   |             |      | (30,275,237 | )           |             |   | (659,488,937 | )            |             |   | (101,797,066 | )           
|Dividends on preferred stock                                                           |                                                                                                                                                                                                                                                    |                          | (1,182,015 | )                 |             |      | (875,000    | )           |             |   | (3,443,762   | )            |             |   | (875,000     | )           
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Earnings applicable to common stockholder                                              |                                                                                                                                                                                                                                                    | $                        | 3,098,029  |                   |             | $    | (31,150,237 | )           |             | $ | (662,932,699 | )            |             | $ | (102,672,066 | )           
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Basic earnings applicable to common stockholder
    per common share:                  |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|                                                                                       | Continuing operations                                                                                                                                                                                                                              |                          |            | 42,800            |             |      |             | (298,296    | )           |   |              | (3,906,671   | )           |   |              | (1,005,077   | )          
|                                                                                       | Discontinued operations                                                                                                                                                                                                                            |                          |            |                  |             |      |             | (4,456      | )           |   |              | 128,182      |             |   |              | (12,894      | )          
|                                                                                       | Cumulative effect of change in accounting
    principle                                                                                                                                                                                            |                          |            |                  |             |      |             |            |             |   |              | (2,816,400   | )           |   |              |             |            
|                                                                                       | Dividends on preferred stock                                                                                                                                                                                                                       |                          |            | (11,820           | )           |      |             | (8,750      | )           |   |              | (34,438      | )           |   |              | (8,750       | )          
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Total basic and diluted earnings applicable to
    common stockholder per common share |                                                                                                                                                                                                                                                    | $                        | 30,980     |                   |             | $    | (311,502    | )           |             | $ | (6,629,327   | )            |             | $ | (1,026,721   | )           
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             
|Basic and diluted weighted average common shares
    outstanding                       |                                                                                                                                                                                                                                                    |                          | 100        |                   |             |      | 100         |             |             |   | 100          |              |             |   | 100          |             
|                                                                                       |                                                                                                                                                                                                                                                    |                          |            |                   |             |      |             |             |             |   |              |              |             |   |              |             

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

3



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS (DEFICIT) EQUITY


For the nine months ended September 30,
2002

|                          |                                                                                  |               |              |                                |  |         |     |             |  |               |   |           |  |   |             |   |  |   |              |   |  |   |             |            |  |   |              |            | 
|------------------------- | -------------------------------------------------------------------------------- | ------------- | ------------ | ------------------------------ |  | ------- | --- | ----------- |  | ------------- | - | --------- |  | - | ----------- | - |  | - | ------------ | - |  | - | ----------- | ---------- |  | - | ------------ | ---------- | 
|                          |                                                                                  |               |              |                               
|                          |                                                                                  |               |              | Stockholders (Deficit) Equity
|                          |                                                                                  |               |              |                               
|                          |                                                                                  |               |              |                                |  |         |     | Total      
|                          |                                                                                  |               |              | Class A                        |  |         |     | Accumulated |  | Stockholders
|                          |                                                                                  | Comprehensive |              | Common                         |  | Paid-in |     | Retained    |  | Other         |   | (Deficit)
|                          |                                                                                  | Loss          |              | Stock                          |  | Capital |     | Deficit     |  | Comprehensive |   | Equity   
|                          |                                                                                  |               |              |                                |  |         |     |             |  |               |   |          
|                          |                                                                                  |               |              |                                |  |         |     |             |  |               |   |           |  |  
|                          |                                                                                  |              
|                          |                                                                                  | (Unaudited)  
|DECEMBER 31, 2001         |                                                                                  |               |              |                                |  |         | 100 |             |  | $             | 1 |           |  | $ | 797,827,564 |   |  | $ | (239,044,921 | ) |  | $ | (14,219,250 | )          |  | $ | 544,563,394  |           
|Net loss                  |                                                                                  | $             | (659,488,937 | )                              |  |         |    |             |  |               |  |           |  |   |            |   |  |   | (659,488,937 | ) |  |   |            |            |  |   | (659,488,937 | )         
|                          | Amounts related to hedge transactions
    reclassified into earnings, net of tax |               |              | 12,595,376                     |  |         |     |            |  |               |   |          |  |   |             |  |  |   |              |  |  |   |             | 12,595,376 |  |   |              | 12,595,376 | 
|                          | Ineffective hedge transaction reclassified into
    earnings, net of tax         |               |              | 643,751                        |  |         |     |            |  |               |   |          |  |   |             |  |  |   |              |  |  |   |             | 643,751    |  |   |              | 643,751    | 
|                          | Changes in fair value of hedge transactions, net
    of tax                      |               |              | 980,123                        |  |         |     |            |  |               |   |          |  |   |             |  |  |   |              |  |  |   |             | 980,123    |  |   |              | 980,123    | 
|                          |                                                                                  |               |              |                                |  |         |     |             |  |               |   |           |  |   |             |   |  |   |              |   |  |   |             |            |  |   |              |           
|Total comprehensive loss  |                                                                                  | $             | (645,269,687 | )                              |  |         |     |             |  |               |   |           |  |   |             |   |  |   |              |   |  |   |             |            |  |   |              |           
|                          |                                                                                  |               |              |                                |  |         |     |             |  |               |   |           |  |   |             |   |  |   |              |   |  |   |             |            |  |   |              |           
|Preferred stock dividends |                                                                                  |               |              |                                |  |         |    |             |  |               |  |           |  |   |            |   |  |   | (3,443,762   | ) |  |   |            |            |  |   | (3,443,762   | )         
|                          |                                                                                  |               |              |                                |  |         |     |             |  |               |   |           |  |   |             |   |  |   |              |   |  |   |             |            |  |   |              |           
|SEPTEMBER 30, 2002        |                                                                                  |               |              |                                |  |         | 100 |             |  | $             | 1 |           |  | $ | 797,827,564 |   |  | $ | (901,977,620 | ) |  | $ |            |            |  | $ | (104,150,055 | )         
|                          |                                                                                  |               |              |                                |  |         |     |             |  |               |   |           |  |   |             |   |  |   |              |   |  |   |             |            |  |   |              |           

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 Nine Months Ended                                       
|                                                                            |                                                                                                                 | September 30,                                                   
|                                                                            |                                                                                                                 |                                                                 
|                                                                            |                                                                                                                 | 2002                                                             |                                                         | 2001        
|                                                                            |                                                                                                                 |                                                                  |                                                         |             
|                                                                            |                                                                                                                 |                                                                 
|                                                                            |                                                                                                                 | (Unaudited)                                                     
|Cash Flows from Operating
    Activities:                                   |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            | Net loss from continuing operations                                                                             |                                                                  | $                                                       | (390,667,138 | )           |              | $          | (100,507,660 | )          
|                                                                            | Adjustments to reconcile net loss from continuing
    operations to net cash provided by operating activities  |                                                                  |                                                         |              |             |              |            |              |            
|                                                                            |                                                                                                                 | Depreciation and amortization                                    |                                                         |              | 49,695,596  |              |            |              | 134,923,710 |            
|                                                                            |                                                                                                                 | Amortization of bond premium and financing costs                 |                                                         |              | 4,707,810   |              |            |              | 4,064,725   |            
|                                                                            |                                                                                                                 | Deferred income taxes and investment tax credits,
    net        |                                                         |              | (5,532,097  | )            |            |              | (38,934,031 | )          
|                                                                            |                                                                                                                 | Cash used in operating activities of discontinued
    operations |                                                         |              | (7,175,022  | )            |            |              |            |            
|                                                                            |                                                                                                                 | Loss on ineffective hedge transaction                            |                                                         |              | 1,072,919   |              |            |              |            |            
|                                                                            |                                                                                                                 | Impairment of goodwill                                           |                                                         |              | 377,000,000 |              |            |              |            |            
|                                                                            |                                                                                                                 | Gain on sale of assets                                           |                                                         |              | 14,845      |              |            |              | 456,996     |            
|Changes in current assets and liabilities                                  |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            |                                                                                                                 | Accounts receivable                                              |                                                         |              | (3,154,827  | )            |            |              | (9,633,868  | )          
|                                                                            |                                                                                                                 | Inventory                                                        |                                                         |              | 4,105,828   |              |            |              | (22,201     | )          
|                                                                            |                                                                                                                 | Prepaid expenses and other                                       |                                                         |              | (2,462,069  | )            |            |              | (3,077,015  | )          
|                                                                            |                                                                                                                 | Accounts payable                                                 |                                                         |              | (15,231,910 | )            |            |              | 1,140,169   |            
|                                                                            |                                                                                                                 | Accrued expenses                                                 |                                                         |              | 9,133,194   |              |            |              | 23,157,123  |            
|                                                                            |                                                                                                                 | Deferred revenue and customer deposits                           |                                                         |              | (948,601    | )            |            |              | 1,439,294   |            
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            |                                                                                                                 |                                                                  | Net cash provided by operating activities               |              |             | 20,558,528   |            |              |             | 13,007,242  |  
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|Cash Flows from Investing
    Activities:                                   |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            | Capital expenditures                                                                                            |                                                                  |                                                         | (38,779,344  | )           |              |            | (63,378,700  | )          
|                                                                            | Decrease in payable affiliates                                                                                  |                                                                  |                                                         |             |             |              |            | (9,193,025   | )          
|                                                                            | Net proceeds from sale of discontinued operations                                                               |                                                                  |                                                         | 194,427,958  |             |              |            |             |            
|                                                                            | Change in receivable from discontinued operations                                                               |                                                                  |                                                         |             |             |              |            | 9,131,349    |            
|                                                                            | Other investing activities                                                                                      |                                                                  |                                                         | 953,105      |             |              |            | (1,337,504   | )          
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            |                                                                                                                 |                                                                  | Net cash provided by (used in) investing
    activities |              |             | 156,601,719  |            |              |             | (64,777,880 | )
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|Cash Flows from Financing
    Activities:                                   |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            | Proceeds from long-term debt                                                                                    |                                                                  |                                                         | 127,800,000  |             |              |            | 163,000,000  |            
|                                                                            | Repayments of long-term debt                                                                                    |                                                                  |                                                         | (336,486,718 | )           |              |            | (709,074,169 | )          
|                                                                            | Proceeds from senior subordinated notes                                                                         |                                                                  |                                                         |             |             |              |            | 693,020,500  |            
|                                                                            | Deferred financing costs                                                                                        |                                                                  |                                                         | (1,666,802   | )           |              |            | (18,178,943  | )          
|                                                                            | Capital cash contribution                                                                                       |                                                                  |                                                         |             |             |              |            | 16,413,783   |            
|                                                                            | Purchase of restricted investments                                                                              |                                                                  |                                                         |             |             |              |            | (133,191,937 | )          
|                                                                            | Maturities of restricted investments                                                                            |                                                                  |                                                         | 33,250,000   |             |              |            |             |            
|                                                                            | Other financing activities                                                                                      |                                                                  |                                                         |             |             |              |            |             |            
|                                                                            | Investment from Dobson Communications                                                                           |                                                                  |                                                         |             |             |              |            | 35,000,000   |            
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            |                                                                                                                 |                                                                  | Net cash (used in) provided by financing
    activities |              |             | (177,103,520 | )          |              |             | 46,989,234  |  
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|Net increase (decrease) in cash and cash
    equivalents                    |                                                                                                                 |                                                                  | 56,727                                                  |              |             |              | (4,781,404 | )           
|Cash and cash equivalents, beginning of period                              |                                                                                                                 |                                                                  | 5,962,148                                               |              |             |              | 14,880,667 |             
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|Cash and cash equivalents, end of period                                    |                                                                                                                 | $                                                                | 6,018,875                                               |              |             | $            | 10,099,263 |             
|                                                                            |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|Supplemental Disclosures of Cash Flow
    Information:                      |                                                                                                                 |                                                                  |                                                         |              |             |              |            |             
|                                                                            | Cash paid for                                                                                                  |                                                                  |                                                         |              |             |              |            |              |            
|                                                                            |                                                                                                                 | Interest, net of amounts capitalized                             |                                                         | $            | 97,073,008  |              |            | $            | 100,246,161 |            
|                                                                            |                                                                                                                 | Income taxes                                                     |                                                         | $            | 3,871,125   |              |            | $            | 559,000     |            
|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
September 30, 2002, the condensed consolidated statement of
operations for the three and nine months ended
September 30, 2002 and 2001, the condensed consolidated
statement of stockholders (deficit) equity for the
nine months ended September 30, 2002 and the condensed
consolidated statements of cash flows for the nine months ended
September 30, 2002 and 2001 are unaudited. In the opinion
of management, such financial statements include all
adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of financial position, results
of operations, and cash flows for the periods presented, except
for those related to the adoption of new accounting principles
as described below.

The condensed consolidated balance sheet 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, the Company
was acquired by ACC Acquisition LLC (the Joint
Venture), an equally owned joint venture between Dobson
Communications Corporation (Dobson Communications)
and AT&T Wireless Services, Inc. (AT&T
Wireless). 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.

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

2.     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 covered a total 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 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
replaced Accounting Principles Board (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 Assets of discontinued operations and
Liabilities of discontinued

6



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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:

|                                  |  |                  |        |                  |  |               |       |   |  |   |        |  
|--------------------------------- |  | ---------------- | ------ | ---------------- |  | ------------- | ----- | - |  | - | ------ | -
|                                  |  | 2002             |        |                 
|                                  |  |                  |        | 2001            
|                                  |  | Period from      |        |                 
|                                  |  | January 1,       |        | Three Months     |  | Nine Months  
|                                  |  | 2002 through     |        | Ended            |  | Ended        
|                                  |  | disposition      |        | September 30,    |  | September 30,
|                                  |  |                  |        |                  |  |              
|                                  |  |                  |        |                 
|                                  |  | ($ in thousands) |        | ($ in thousands)
|Operating revenue                 |  | $                | 2,319  |                  |  | $             | 8,403 |   |  | $ | 23,685 |  
|Loss before income taxes          |  |                  | (1,090 | )                |  |               | (201  | ) |  |   | (527   | )
|Income tax benefit (provision)    |  |                  | 436    |                  |  |               | (245  | ) |  |   | (762   | )
|Loss from discontinued operations |  |                  | (654   | )                |  |               | (446  | ) |  |   | (1,289 | )

The long-term debt of the Company is recorded 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), $2.5 million
for the three months ended September 30, 2001 and
$7.2 million for the nine months ended September 30,
2001.

The Company completed the sale of Tennessee 4 RSA
on February 8, 2002, and recorded operating losses totaling
approximately $0.7 million incurred through
February 8, 2002, and the related gain on the sale totaling
approximately $13.5 million, net of tax expense.



|   |                              
|-- | -----------------------------
|3. | Property, Plant and Equipment

Property, plant and equipment are recorded at
cost. Newly constructed wireless systems are added to property,
plant and equipment at cost, which includes contracted services,
direct labor, materials and overhead. Existing property, plant
and equipment purchased through acquisitions is recorded at its
fair value at the date of the purchase. Repairs, minor
replacements and maintenance are charged to operations as
incurred. The provisions for depreciation are provided using the
straight-line method based on the estimated useful lives

7



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

of the various classes of depreciable property.
Depreciation expense for the nine months ended
September 30, 2002 and 2001 totaled $42.4 million and
$40.8 million. Listed below are the gross property, plant
and equipment amounts and the related accumulated depreciation
for the periods described.

|                                    |  |               |              |      |  |   |             |  
|----------------------------------- |  | ------------- | ------------ | ---- |  | - | ----------- | -
|                                    |  |              
|                                    |  | September 30,
|                                    |  |              
|                                    |  | 2002          |              | 2001
|                                    |  |               |              |     
|Gross property, plant and equipment |  | $             | 337,174,835  |      |  | $ | 287,341,636 |  
|Accumulated depreciation            |  |               | (137,658,026 | )    |  |   | (79,175,315 | )
|                                    |  |               |              |      |  |   |             |  
|Property, plant and equipment, net  |  | $             | 199,516,809  |      |  | $ | 208,166,321 |  
|                                    |  |               |              |      |  |   |             |  

4.     Long-Term
Debt

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

|                                           |                      |                    |               |                   |  |   |               |               | 
|------------------------------------------ | -------------------- | ------------------ | ------------- | ----------------- |  | - | ------------- | ------------- | 
|                                           |                      | September 30, 2002 |               | December 31, 2001
|                                           |                      |                    |               |                  
|Credit facility                            |                      | $                  | 904,917,738   |                   |  | $ | 1,113,604,456 |              
|Senior Subordinated Notes, net of discount |                      |                    | 694,063,138   |                   |  |   | 693,512,667   |              
|                                           |                      |                    |               |                   |  |   |               |              
|                                           | Total debt           |                    |               | 1,598,980,876     |  |   |               | 1,807,117,123 | 
|Less  Current amounts payable on demand   |                      |                    | 1,598,980,876 |                   |  |   | 46,909,091    |              
|                                           |                      |                    |               |                   |  |   |               |              
|                                           | Total long-term debt |                    | $             |                  |  |   | $             | 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 modified certain financial covenants (as
described below). The maximum availability of the credit
facility is limited by restrictions, such as certain financial
ratios. As of September 30, 2002, the Company had
outstanding borrowings under the credit facility of
$904.9 million, with no additional amounts available for
future borrowings.

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;

8



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##### Table of Contents



AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |   |                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 nine
months ended September 30, 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. At
June 30, 2002 and September 30, 2002, the Company
failed to comply with this covenant. Management has had and will
continue to have discussions with the lenders regarding the
credit facility. The lenders presently have the right, but not
the obligation, to accelerate the repayment of the entire amount
outstanding under the credit facility. 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. Therefore, as of June 30, 2002
and as of September 30, 2002, the Company has classified
all of its long-term debt as current. Unless such non-compliance
is resolved, there continues to be substantial doubt about the
Companys ability to continue as a going concern, as
expressed in the independent auditors report on the
Companys 2001 financial statements. Also as a result of
the Companys non-compliance, subsequent to
September 30, 2002, all borrowings under its credit
facility are only available based on prime rate, which will
increase the Companys borrowing rate in the future.

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 totaling
$67.0 million as of September 30, 2002, consist of the
remaining balance 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 interest 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 interest payments issued to bondholders.

Interest Rate
Hedges

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

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AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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%. This derivative contract expired in June 2001 and was
replaced with another derivative contract that expired
June 4, 2002, which set the interest rate on
$1.03 billion of debt at a rate of 6.7%. As of
September 30, 2002 the Company does not have any derivative
contracts related to its credit facility.

On January 1, 2001, the Company implemented
SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activity. With this implementation, the
Company began recording a liability and a transition adjustment,
net of income tax benefit, to other comprehensive loss during
2001 in connection with these derivative contracts. The
Companys accumulated other comprehensive loss, net of
income tax benefit, was $14.2 million as of
December 31, 2001 and decreased to $0 at June 4, 2002,
as a result of the expiration of the Companys interest
rate swap agreement.

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 for the nine months ended September 30,
2002, which is reflected in other income in the accompanying
statement of operations.

5.     Redeemable
Preferred Stock

On June 29, 2001, the Company received
$35.0 million from one of its principal owners, Dobson
Communications, from its purchase of 35,000 shares of the
Companys Series A Preferred Stock. The Company has
350,000 authorized shares of its Series A Preferred Stock,
which has a par value of $0.01 per share and is mandatorily
redeemable on June 29, 2011 for $1,000 per share, plus
accrued and unpaid dividends. Each share of Series A
Preferred Stock is entitled to 12% 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. At
September 30, 2002, the Company had approximately
$5.6 million in accrued dividends relating to its
Series A Preferred Stock. Shareholders of the Series A
Preferred Stock have no voting rights.

6.     Stockholders
(Deficit) Equity

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

7.     Commitments

Effective November 16, 2001 (as amended
through August 5, 2002), the Company became a party to 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 July 15, 2005. Of the commitment, approximately
$25.7 million remained at September 30, 2002. If the
Company fails to fully meet this commitment by July 15,
2005, it could be forced to pay a penalty of up to 20% of the
unfulfilled commitment. The Company expects to fulfill its
purchase commitment under this agreement prior to its completion
date.

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AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

8.     Change in
Accounting Principles and Practices

In July 2001, the Financial Accounting Standards
Board (FASB) issued SFAS No. 141,
Business Combinations and No. 142,
Goodwill and Other Intangible Assets. These
standards prohibit the application of the pooling-of-interests
method of accounting for business combinations effective
June 30, 2001 and require companies to cease the
amortization of existing goodwill and intangible assets with
indefinite lives effective January 1, 2002. As a result of
the adoption of SFAS No. 142, the Company reassessed the
useful lives of it intangible assets. A significant portion of
its intangible assets are classified as Wireless license
acquisition costs, which represents the costs associated
with acquiring its FCC licenses. These licenses allow the
Company to provide wireless services by giving the Company the
exclusive right to utilize certain radio frequency spectrum.
Although the FCC licenses are issued for only a fixed time,
generally ten years, these licenses are renewed by the FCC on a
routine basis and for a nominal fee. In addition, the Company
has determined that there are no legal, regulatory, contractual,
competitive, economic or other factors that limit the useful
life of these FCC licenses. As a result, the Companys
wireless license acquisition costs are treated as indefinite
life intangible assets. Therefore, upon implementing SFAS
No. 142 in its entirety on January 1, 2002, the
Company ceased the amortization of both goodwill and wireless
license acquisition costs and now tests for impairment of
goodwill and wireless license acquisition costs at least
annually and only adjusts the carrying amount of these
intangible assets upon an impairment of the goodwill or wireless
license acquisition costs. The Company also determines on an
annual basis whether facts and circumstances continue to support
an indefinite useful life. For the three and nine months ended
September 30, 2001, the Company recorded approximately
$14.8 million and $43.8 million of amortization
expense related to its goodwill and approximately
$8.9 million and $25.9 million of amortization
expense, net of income tax benefit, related to its wireless
license acquisition costs. Without this amortization, the
Companys earnings applicable to common stockholder would
have been $7.5 million and $33.0 million for the three
and nine months ended September 30, 2001.

Through December 31, 2001, the
Companys accounting policy for impairment of long-lived
assets was based on the provisions of SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. In accordance with
SFAS No. 121, the Companys policy was to review the
carrying value of long-lived assets and certain identifiable
intangibles whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. If such
circumstances were deemed to exist, the carrying value of the
asset would be compared to the estimated undiscounted future
cash flows generated by the asset. In accordance with SFAS
No. 121, the Companys definite life assets will
continue to be amortized over their estimated useful lives and
are subject to SFAS No. 121 impairment criteria. As a
result of fully implementing SFAS No. 142 on
January 1, 2002, the Company is now required to evaluate
the carrying value of its indefinite life intangible assets
using their fair values, at least annually. If the carrying
amount of the intangible asset exceeds its fair value, an
impairment loss shall be recognized in an amount equal to that
excess.

Upon implementation of SFAS No. 142 on
January 1, 2002, the Company first performed a comparison
of the carrying amount of its wireless license acquisition costs
to the fair value of those assets. For purposes of this
comparison, it is the Companys policy to aggregate its
wireless license acquisition costs. The Company determined the
fair value of its wireless license acquisition costs based on
their estimated future discounted cash flows. Based on the
comparison, the Company determined that the carrying amount of
its wireless license acquisition costs exceeded their estimated
fair value. As a result, the Company recorded a charge in the
first quarter of 2002, 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. The
Company then assessed the carrying amount of its goodwill for
possible impairment. For goodwill, there is a two-step approach
for assessing impairment. The first step requires a comparison
of the fair value of the Company to its carrying amount,
including goodwill. The Companys fair value was determined
based on estimated future discounted cash flows. It was
determined that the estimated fair value of the Company exceeded
its carrying amount and thus, its goodwill was not

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AMERICAN CELLULAR CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

deemed to be impaired. Since the Companys
goodwill was not deemed to be impaired, the second step of the
impairment test, which is used to measure the amount of
impairment loss was not required to be completed upon
implementation of SFAS No. 142. See Note 9.

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.

9.     Goodwill
Impairment

Based on factors and circumstances impacting the
Company and the business climate in which it operates, as of
June 30, 2002, the Company determined that it was necessary
to re-evaluate the carrying value of its goodwill and indefinite
life intangible assets in accordance with SFAS No. 142. The
legal factors include the non-compliance with the Companys
total leverage ratio covenant in its senior credit facility,
which gave the Companys lenders the right to accelerate
the repayment of the entire amount outstanding under the credit
facility. In addition, the Companys business climate was
impacted due to the fact that the rural wireless industry had
continued to experience a significant deterioration in public
equity valuations during the second quarter of 2002. As a result
of the re-evaluation of the Companys wireless license
acquisition costs and goodwill, the Company concluded that the
fair value of its wireless license acquisition costs, as
determined upon implementation of SFAS No. 142, had not
changed and deemed that there was no further impairment of these
assets. In performing the impairment test on its goodwill, the
Company concluded that the overall assumptions used in first
quarter 2002 were still valid with the exception of the
risk-based discount factor and enterprise valuations. With the
revised assumptions at June 30, 2002, the Company
determined that its carrying value of its goodwill exceeded its
fair value. In accordance with SFAS 142, the Company proceeded
with determining the implied fair value of its goodwill and
based on a comparison of the implied fair value of its goodwill
to its carrying amount, the Company recorded an impairment loss
totaling $377.0 million.

10.     Reclassifications

Certain items have been reclassified in the 2001
and 2002 condensed consolidated financials to conform to the
current presentation.

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

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

Overview

We 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 September 30, 2002, our wireless systems
covered a population of approximately 5.0 million and we
had approximately 673,100 subscribers. We are owned by a
joint venture, which is equally owned by AT&T Wireless and
Dobson Communications.

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 covered 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.

Subscribers

Our subscriber base contains three types of
subscribers; post-paid, reseller and pre-paid. Post-paid
subscribers account for the largest portion of our subscriber
base, at 95.5%. These subscribers pay a monthly access fee for a
wireless service plan that generally includes a fixed amount of
minutes and certain service features. In addition to the monthly
access fee, these subscribers are typically billed in arrears
for long-distance charges, roaming charges and rate plan
overages. Our reseller subscribers are similar to our post-paid
subscribers in that they pay monthly fees to utilize our network
and services, however, these subscribers are billed by a third
party (reseller), who has effectively resold our service to the
end user (subscriber). We in turn bill the third party for the
monthly usage of the end user. The reseller base accounts for
3.9% of our total subscriber base. Our pre-paid subscribers,
which account for less than 1% of our subscriber base, are
subscribers that pre-pay for an agreed upon amount of minutes.

Our average monthly revenue per subscriber and
total gross additions are calculated and reported based only on
post-paid subscriber information.

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 $0.18
and $0.22 per minute for the three months ended
September 30, 2002 and 2001, and $0.18 and $0.23 per minute
for the nine months ended September 30, 2002 and 2001.
These declines have generally been offset by significant
increases in average minutes-of-use per subscriber. The average
minute-of-use per subscriber increased 23.2% and 27.4% for the
three and nine months ended September 30, 2002, compared to
the same periods in 2001. 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 revenue accounted for

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32.4% and 34.5% of our operating revenue for the
three months ended September 30, 2002 and 2001, and 30.1%
and 32.3% of our operating revenue for the nine months ended
September 30, 2002 and 2001. Roaming revenue typically
yields slightly 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
$0.26 and $0.38 per minute for the three months ended
September 30, 2002 and 2001, and $0.28 and $0.39 per minute
for the nine months ended September 30, 2002 and 2001. We
believe that the trend of increasing roaming minutes will
continue to at least partially offset declining roaming yields.
Roaming minutes increased 45.8% and 43.3% for the three and nine
months ended September 30, 2002, compared to the same
periods in 2001. Roaming yields are decreasing as a result of
new contracts and scheduled rate reductions in existing
contracts. We believe these roaming contracts are beneficial
because they secure existing traffic and provide opportunity for
a continuing increase in the volume of traffic. Roaming revenue
tends to be impacted by seasonality. We typically have higher
roaming revenue during the second and third quarters of each
year, as users tend to travel more and, therefore, use their
wireless phones more during the spring and summer months.


We include long-distance revenue in service and
roaming revenue. Equipment revenue is revenue from selling
wireless equipment to our subscribers. Equipment revenue is
recognized when the equipment is delivered to the customer. Our
ability to sell wireless equipment is independent of our ability
to offer wireless services to our customer; therefore, we
consider equipment sales a separate earnings process and account
for it accordingly.

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

Our marketing and selling costs include
advertising, compensation paid to sales personnel and
independent agents and all other costs to market and sell
wireless products and services, and certain costs related to
customer retention. We pay commissions to 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 subscribers and populations in our respective licensed
areas.

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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 Dobson
Communications and us, the change could have a significant
impact on our results of operations.

We depreciate our property, plant and equipment,
and amortize our customer lists and other definite life
intangible assets over their useful lives. These useful lives
are based on our estimates of the period that the assets will
generate revenue. In accordance with SFAS No. 121, our
policy was to review the carrying value of our long-lived assets
and certain identifiable intangibles whenever events or changes
in circumstances indicate that the carrying value may not be
recoverable. With the implementation of SFAS No. 142,
Goodwill and Other Intangible Assets, which requires
companies to cease the amortization of existing goodwill and
intangible assets with indefinite lives, we treat our wireless
license acquisition costs as indefinite life intangible assets.
Therefore, upon implementing SFAS No. 142 in its entirety
on January 1, 2002, we ceased the amortization of both
goodwill and wireless license acquisition costs and now test for
impairment of the goodwill and wireless license acquisition
costs at least annually and only adjust the carrying amount of
these intangible assets upon an impairment of the goodwill or
wireless license acquisition costs. We also determine on an
annual basis whether facts and circumstances continue to support
an indefinite useful life. This change in policy has and may
continue to have a significant impact on our results of
operations and financial position. For the three and nine months
ended September 30, 2001, the aggregate amount of
amortization expense attributable to our goodwill, was
approximately $14.8 million and $43.8 million and the
aggregate amount of amortization expense, net of income tax
benefit, attributable to our wireless license acquisition costs
was approximately $8.9 million and $25.9 million.
Without this amortization, our earnings applicable to common
stockholder would have been $7.5 million and
$33.0 million for the three and nine months ended
September 30, 2001.

Through December 31, 2001, our accounting
policy for impairment of long-lived assets was based on the
provisions of SFAS No. 121. In accordance with SFAS
No. 121, our policy was to review the carrying value of our
long-lived assets and certain identifiable intangible assets
whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. If such circumstances
were deemed to exist, the carrying value of the asset would be
compared to the estimated undiscounted future cash flows
generated by the asset. In accordance with SFAS No. 121,
our definite life assets will continue to be amortized over
their estimated useful lives and are subject to SFAS
No. 121 impairment criteria. As a result of fully
implementing SFAS No. 142 on January 1, 2002, we are
now required to evaluate the carrying value of our indefinite
life intangible assets using their fair values, at least
annually. If the carrying amount of the intangible asset exceeds
its fair value, an impairment loss shall be recognized in an
amount equal to that excess. Upon implementation of this new
pronouncement in its entirety, we recorded charges during the
first quarter 2002, net of income tax benefit of approximately
$281.6 million to reflect the write-down of our wireless
license acquisition costs to their fair value.

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Based on factors and circumstances impacting us
and the business climate in which we operate as of June 30,
2002, we determined that it was necessary to re-evaluate the
carrying value of our goodwill and indefinite life intangible
assets in accordance with SFAS No. 142. The legal factors
include the non-compliance with the our total leverage ratio
covenant in our senior credit facility, which gave our
lenders the right to accelerate the repayment of the
entire amount outstanding under our credit facility. In
addition, our business climate was impacted due to the fact that
the rural wireless industry had continued to experience a
significant deterioration in public equity valuations during the
second quarter of 2002. As a result of the re-evaluation of our
wireless license acquisition costs and goodwill, we concluded
that the fair value of our wireless license acquisition costs,
as determined upon implementation of SFAS No. 142, had not
changed and deemed that there was no further impairment of these
assets. In performing the impairment test on our goodwill, we
concluded that the overall assumptions used in first quarter
2002 were still valid with the exception of the risk-based
discount factor and enterprise valuations. With the revised
assumptions at June 30, 2002, we determined that our
goodwill was impaired and as a result, we recorded an impairment
loss totaling $377.0 million.

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 September 30, 2002
    Compared to Three Months Ended September 30,
    2001

Operating revenue.For the three months ended
September 30, 2002, our total operating revenue increased
$7.6 million, or 6.6%, to $124.2 million from
$116.6 million for the comparable period in 2001.

The following table sets forth the components of
our operating revenue for the three months ended
September 30, 2002 and 2001.

|                   |                             |                                  |   |            |         |        |  |            |       |   |   |        |         |  |  |      |       |  
|------------------ | --------------------------- | -------------------------------- | - | ---------- | ------- | ------ |  | ---------- | ----- | - | - | ------ | ------- |  |  | ---- | ----- | -
|                   |                             |                                 
|                   |                             | Three Months Ended September 30,
|                   |                             |                                 
|                   |                             |                                  |   |           
|                   |                             | 2002                             |   | 2001      
|                   |                             |                                  |   |           
|                   |                             | Amount                           |   | Percentage |         | Amount |  | Percentage
|                   |                             |                                  |   |            |         |        |  |           
|                   |                             |                                 
|                   |                             | ($ in thousands)                
|Operating revenue: |                             |                                  |   |            |         |        |  |            |       |   |   |        |         |  |  |     
|                   | Service revenue             |                                  | $ | 79,430     |         |        |  | 63.9       | %     |   | $ | 71,813 |         |  |  | 61.6 | %    
|                   | Roaming revenue             |                                  |   | 40,237     |         |        |  | 32.4       | %     |   |   | 40,154 |         |  |  | 34.5 | %    
|                   | Equipment and other revenue |                                  |   | 4,535      |         |        |  | 3.7        | %     |   |   | 4,583  |         |  |  | 3.9  | %    
|                   |                             |                                  |   |            |         |        |  |            |       |   |   |        |         |  |  |     
|                   |                             | Total                            |   | $          | 124,202 |        |  |            | 100.0 | % |   | $      | 116,550 |  |  |      | 100.0 | %
|                   |                             |                                  |   |            |         |        |  |            |       |   |   |        |         |  |  |     

For the three months ended September 30,
2002, our service revenue increased $7.6 million, or 10.6%,
to $79.4 million from $71.8 million for the three
months ended September 30, 2001. The increase was primarily
attributable to increased market penetration and subscriber
usage. Our subscriber base increased 10% to 673,100 at
September 30, 2002 from 610,400 at September 30, 2001.
Even though we have experienced increased competition and market
pressure, our average monthly service revenue per subscriber
remained constant at $41 for the three months ended
September 30, 2002 and 2001, because our service revenue
has been positively impacted by changes in the mix of digital
and analog subscribers in our subscriber base. On
September 30, 2002, 84.1% of our subscriber base was on
digital rate plans compared to 67.7% at September 30, 2001.
Our digital subscribers tend to use more minutes in a larger
home area than our analog subscribers.

For the three months ended September 30,
2002 and 2001, our roaming revenue remained constant at
$40.2 million. Roaming minutes have increased by 45.8% from
September 30, 2001 to September 30, 2002, however, our
roaming revenue per minute-of-use has decreased by 31.3%.

For the three months ended September 30,
2002, our equipment and other revenue decreased
$0.1 million, or 1.1%, to $4.5 million from
$4.6 million for the three months ended September 30,
2001,

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primarily due to the fact that our total gross
subscriber additions have decreased. Gross subscriber additions
were 49,900 for the three months ended September 30, 2002,
compared to 54,300 for the same period in 2001.


Cost of service.For
the three months ended September 30, 2002 and 2001, our
total cost of service remained constant at $28.4 million.
During the third quarter 2002, roaming costs accounted for 48%
of our total cost of service. These roaming costs decreased by
$3.8 million for the three months ended September 30,
2002, compared to the same period in 2001. This resulted from a
35% decline in rates charged by third-party wireless providers,
resulting from new lower rate agreements, offset by a 21%
increase in the minutes used by our subscribers on those
providers networks. In addition to roaming costs, the
remaining portions of our total cost of service are the costs
related to operating our wireless network. These costs increased
in total by $3.8 million, as a result of an increase of
approximately $3.2 million in network costs such as leased
circuits, interconnection charges and wholesale toll charges and
an approximate $0.6 million increase in rent related to our
cell sites. Network costs have increased due to increased
minutes-of-use on our networks.

Cost of equipment.For the three months ended
September 30, 2002, our cost of equipment increased
$0.3 million, or 3.3%, to $9.1 million during 2002
from $8.8 million in 2001. This increase is primarily a
result of writing-off approximately $0.6 million in
obsolete inventory.

Marketing and selling costs.For the three months ended
September 30, 2002, our marketing and selling costs
increased $0.4 million, or 2.8%, to $15.0 million from
$14.6 million for the three months ended September 30,
2001, due to increases in selling costs primarily as a result of
increased advertising related to the introduction of a new line
of rate plans earlier this year.

General and administrative costs.For the three months ended
September 30, 2002, our general and administrative costs
increased $2.4 million, or 15.0%, to $18.4 million
from $16.0 million for the three months ended
September 30, 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 months ended September 30, 2002 and 2001.

Depreciation and amortization expense.For the three months ended
September 30, 2002, our depreciation and amortization
expense decreased $29.5 million, or 63.5%, to
$17.0 million from $46.5 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 license acquisition
costs as indefinite life intangible assets. For the three months
ended September 30, 2001, the aggregate amount of
amortization expense attributable to our goodwill was
approximately $14.8 million and the aggregate amount of
amortization expense attributable to wireless license
acquisition costs was approximately $14.9 million.

Interest expense.For the three months ended
September 30, 2002, our interest expense decreased
$13.0 million, or 30.2%, to $29.9 million from $42.9
for the three months ended September 30, 2001. Of this
decrease, $7.5 million resulted from the expiration of our
interest rate swap agreement in June 2002. The remaining
decrease primarily resulted from an overall decrease in our
variable interest rates and the reduction of the outstanding
balance on our credit facility.

Net income (loss).For the three months ended
September 30, 2002, our net income was $4.3 million.
Our net income increased $34.6 million from a net loss of
$30.3 million for the three months ended September 30,
2001. The increase in our net income was primarily attributable
to our increase in operating income, which resulted from
decreases in interest expense and depreciation and amortization
expense, as described above.

Dividends on preferred stock.For the three months ended
September 30, 2002, our dividends on preferred stock were
$1.2 million compared to $0.9 million for the three
months ended September 30, 2001. This resulted from the
issuance of 35,000 shares of our preferred stock to one of
our principal owners, Dobson Communications, on June 29,
2001.

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| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | Nine Months Ended September 30, 2002
    Compared to Nine Months Ended September 30,
    2001

Operating revenue.For the nine months ended
September 30, 2002, our total operating revenue increased
$27.0 million, or 8.6%, to $339.9 million from
$312.9 million for the comparable period in 2001.

The following table sets forth the components of
our operating revenue for the nine months ended
September 30, 2002 and 2001.

|                   |                             |                                 |   |            |         |        |  |            |       |   |   |         |         |  |  |      |       |  
|------------------ | --------------------------- | ------------------------------- | - | ---------- | ------- | ------ |  | ---------- | ----- | - | - | ------- | ------- |  |  | ---- | ----- | -
|                   |                             |                                
|                   |                             | Nine Months Ended September 30,
|                   |                             |                                
|                   |                             |                                 |   |           
|                   |                             | 2002                            |   | 2001      
|                   |                             |                                 |   |           
|                   |                             | Amount                          |   | Percentage |         | Amount |  | Percentage
|                   |                             |                                 |   |            |         |        |  |           
|                   |                             |                                
|                   |                             | ($ in thousands)               
|Operating revenue: |                             |                                 |   |            |         |        |  |            |       |   |   |         |         |  |  |     
|                   | Service revenue             |                                 | $ | 225,877    |         |        |  | 66.5       | %     |   | $ | 198,119 |         |  |  | 63.3 | %    
|                   | Roaming revenue             |                                 |   | 102,423    |         |        |  | 30.1       | %     |   |   | 101,201 |         |  |  | 32.3 | %    
|                   | Equipment and other revenue |                                 |   | 11,595     |         |        |  | 3.4        | %     |   |   | 13,626  |         |  |  | 4.4  | %    
|                   |                             |                                 |   |            |         |        |  |            |       |   |   |         |         |  |  |     
|                   |                             | Total                           |   | $          | 339,895 |        |  |            | 100.0 | % |   | $       | 312,946 |  |  |      | 100.0 | %
|                   |                             |                                 |   |            |         |        |  |            |       |   |   |         |         |  |  |     

For the nine months ended September 30,
2002, our service revenue increased $27.8 million, or
14.0%, to $225.9 million from $198.1 million for the
nine months ended September 30, 2001. The increase was
primarily attributable to increased market penetration and
subscriber usage. Our subscriber base increased 10% to 673,100
at September 30, 2002 from 610,400 at September 30,
2001. Even though we have experienced increased competition and
market pressure, our average monthly service revenue per
subscriber increased to $40 for the nine months ended
September 30, 2002, compared to $39 for the nine months
ended September 30, 2001, because our average monthly
service revenue per subscriber has been positively impacted by
changes in the mix of digital and analog subscribers in our
subscriber base. On September 30, 2002, 84.1% of our
subscriber base was on digital rate plans compared to 67.7% at
September 30, 2001. Our digital subscribers tend to use
more minutes in a larger home area than our analog rate
subscribers.

For the nine months ended September 30,
2002, our roaming revenue increased $1.2 million, or 1.2%,
to $102.4 million from $101.2 million for the nine
months ended September 30, 2001. Roaming minutes have
increased by 43.3% from September 30, 2001 to
September 30, 2002, however, our roaming revenue per
minute-of-use has decreased by 29.4%.

For the nine months ended September 30,
2002, our equipment and other revenue decreased
$2.0 million, or 14.9%, to $11.6 million from
$13.6 million for the nine months ended September 30,
2001. This decrease primarily resulted from a slow-down in the
migration of existing subscribers from analog to digital
service, along with a decrease in gross subscriber additions.
Gross subscriber additions were 145,400 for the nine months
ended September 30, 2002 compared to 146,900 for the nine
months ended September 30, 2001.

Cost of service.For
the nine months ended September 30, 2002, our total cost of
service increased $7.1 million, or 9.2%, to
$85.0 million from $77.9 million for the comparable
period in 2001. During the nine months ended September 30,
2002, roaming costs accounted for 54% of our total cost of
service. These roaming costs decreased by $0.9 million for
the nine months ended September 30, 2002, compared to the
same period in 2001. This resulted from a 26% decline in rates
charged by third-party wireless providers, resulting from new
lower rate agreements, offset by a 32% increase in the minutes
used by our subscribers on those providers networks. In
addition to roaming costs, the remaining portions of our total
cost of service are the costs related to operating our wireless
network. These costs increased in total by $8.0 million, as
a result of an approximate $4.5 million increase in network
costs such as leased circuits, interconnection charges and
wholesale toll charges, approximately $2.3 million increase
in cost of service features and an approximate $2.5 million
increase in rent related to our cell site, offset by an
approximate $1.3 million decrease in repairs and utilities
related to our cell site. Network costs have increased due to
increased minutes-of-use on our networks.

Cost of equipment.For the nine months ended
September 30, 2002, our cost of equipment decreased
$5.4 million, or 18.3%, to $24.2 million during 2002
from $29.6 million in 2001. This decrease primarily

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resulted from a slow-down in the migration of
existing subscribers from analog to digital service, along with
a decrease in gross subscriber additions. We migrated 43,200
subscribers from analog to digital service during the nine
months ended September 30, 2002, compared to 58,400 for the
nine months ended September 30, 2001.


Marketing and selling costs.For the nine months ended
September 30, 2002, our marketing and selling costs
increased slightly by $1.0 million, or 2.4%, to
$43.4 million from $42.4 million for the nine months
ended September 30, 2001 due to a slight increase in
selling costs primarily as a result of increased advertising
related to the introduction of a new line of rate plans in the
second quarter of 2002.

General and administrative costs.For the nine months ended
September 30, 2002, our general and administrative costs
increased $7.0 million, or 15.7%, to $52.0 million
from $45.0 million for the nine months ended
September 30, 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 nine-month periods ended September 30, 2002 and 2001.

Depreciation and amortization expense.For the nine months ended
September 30, 2002, our depreciation and amortization
expense decreased $85.2 million, or 63.2%, to
$49.7 million from $134.9 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 license acquisition
costs as indefinite life intangible assets. For the nine months
ended September 30, 2001, the aggregate amount of
amortization expense attributable to our goodwill was
approximately $43.8 million and the aggregate amount of
amortization expense attributable to our wireless license
acquisition costs was approximately $43.2 million.

Interest expense.For the nine months ended
September 30, 2002, our interest expense decreased
$14.6 million, or 11.8%, to $109.2 million from $123.8
for the nine months ended September 30, 2001. The entire
decrease resulted from an overall decrease in our variable
interest rates and the reduction of the outstanding balance on
our credit facility.

Impairment on Goodwill.For the nine months ended
September 30, 2002, we recognized an impairment of our
goodwill totaling $377.0 million. This impairment was a
result of our June 30, 2002 re-evaluation of our carrying
values of goodwill and indefinite life intangible assets in
accordance with SFAS No. 142, Goodwill and Other
Intangible Assets.

Loss from discontinued operations.For the nine months ended
September 30, 2002, we had a net loss from discontinued
operations of $0.7 million, compared to $1.3 million
for the nine months ended September 30, 2001. These losses
from discontinued operations reflect our losses from Tennessee 4
RSA, which we sold to Verizon Wireless on February 8, 2002.

Gain from sale of discontinued operations.For the nine months ended
September 30, 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 nine months ended
September 30, 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
nine months ended September 30, 2002, our net loss was
$659.5 million. Our net loss increased $557.7 million
from $101.8 million for the nine months ended
September 30, 2001. The increase in our net loss was
primarily attributable to our impairment of goodwill and the
cumulative effect of change in accounting principle related to
the implementation of SFAS No. 142, both described above.

Dividends on preferred stock.For the nine months ended
September 30, 2002, our dividends on preferred stock were
$3.4 million compared to $0.9 million for the nine months
ended September 30, 2001. This resulted from the issuance
of 35,000 shares of our preferred stock to one of our principal
owners, Dobson Communications, on June 29, 2001.

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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, which may not be available to us in the
future, 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 our subsidiaries
or us.



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

At September 30, 2002, we had a working
capital deficit of $1.6 billion, a ratio of current assets
to current liabilities of 0.08:1 and an unrestricted cash
balance of $6.0 million, which compares to a working
capital deficit of $10.5 million, a ratio of current assets
to current liabilities of 0.9:1 and an unrestricted cash balance
of $6.0 million at December 31, 2001. Our working
capital deficit and ratio of current assets to current
liabilities have both been negatively impacted as a result of
our reclassification of our long-term debt to current.

Our net cash provided by operating activities
totaled $20.6 million for the nine months ended
September 30, 2002 compared to $13.0 million for the
nine months ended September 30, 2001. The increase in our
cash provided is primarily a result of our increased operating
income and reductions in interest expense, offset by changes in
current assets and liabilities.

Our net cash provided by investing activities
totaled $156.6 million for the nine months ended
September 30, 2002 compared to net cash used in investing
activities of $64.8 million for the nine months ended
September 30, 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 $8.2 million reserved in escrow and a
decrease in capital expenditures. Capital expenditures were
$38.8 million for the nine months ended September 30,
2002 and $63.4 million for the nine months ended
September 30, 2001.

Net cash used in financing activities was
$177.1 million for the nine months ended September 30,
2002 compared to net cash provided by financing activities of
$47.0 million for the nine months ended September 30,
2001. This decrease is primarily due to proceeds from senior
subordinated notes of $693.0 million, proceeds from long term
debt of $163.0 million and investment from Dobson
Communications of $35.0 million, offset by repayment of
long term debt of $709.1 million and purchase of restricted
investment of $133.2 million for the nine months ended
September 30, 2001. Financing activity sources for the nine
months ended September 30, 2002 consisted of proceeds from
long-term debt of $127.8 million and maturities of
restricted investments of $33.3 million, which were offset
by repayments of long-term debt totaling $336.5 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
modified 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 by restrictions, such as certain
financial ratios. As of September 30, 2002, we had
outstanding borrowings under our credit facility of
$904.9 million, with no additional amounts available for
future borrowings.

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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 nine
months ended September 30, 2002 was 4.8% and interest rates
have ranged in total between 4.4% and 10.1% since inception.

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. At June 30, 2002 and
September 30, 2002, we failed to comply with this covenant.
We have had and will continue to have discussions with our
lenders regarding our credit facility. Our lenders presently
have the right, but not the obligation, to accelerate the
repayment of the entire amount outstanding under the credit
facility. 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. Therefore, as of June 30, 2002
and as of September 30, 2002, we classified all of our
long-term debt as current. Unless such non-compliance is
resolved, there continues to be substantial doubt about our
ability to continue as a going concern, as expressed in the
independent auditors report on our 2001 financial statements.
Also as a result of our non-compliance, subsequent to
September 30, 2002, all borrowings under our credit
facility are only available based on prime rate, which will
increase our borrowing rate in the future.

During the nine months ended September 30,
2002, our total scheduled principal payments were approximately
$27.2 million under this facility. During the remainder of
2002, we will be required to make additional scheduled principal
payments totaling $10.6 million. In addition, during 2003,
we will be required to make scheduled principal payments
totaling $56.8 million.

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.

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

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

We had capital expenditures of $38.8 million
for the nine months ended September 30, 2002. We have
budgeted approximately $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 plan on investing in our property and equipment from
operating cash flows expected to be generated during the
remainder of 2002. The amount and timing of capital expenditures
may vary depending on the rate at which we expand and develop
our wireless systems, whether we consummate additional
acquisitions and whether we renegotiate our credit facility, as
described above.

On November 16, 2001, (as amended through
August 5, 2002), we became a party to an agreement to
purchase approximately $49.5 million of cell site and
switching equipment from Nortel Network Corp. prior to
July 15, 2005. Approximately $25.7 million of the
commitment remained outstanding at September 30, 2002. If
we fail to fully meet this commitment by July 15, 2005, we
could be forced to pay a penalty of up to 20% of the unfulfilled
commitment. We expect to substantially fulfill our purchase
commitment under this agreement prior to its scheduled
completion date. We have and will continue to finance our
purchases under this commitment using cash flows from operations
or funds available under our credit facility.

At September 30, 2002, we had
$6.0 million of unrestricted cash and $75.2 million in
restricted cash, of which $67.0 million of the restricted
cash was in escrow to pay interest. We anticipate that our cash
flow from operations, along with this cash, will be sufficient
to meet our short-term cash needs. If we are successful in
renegotiating our debt as described above, we would expect to
have sufficient resources to satisfy our expected capital
expenditures, working capital and debt service obligations over
the next year. However, we cannot provide any assurance that we
will be successful in renegotiating our debt or 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 (FASB) issued SFAS No. 141,
Business Combinations and No. 142,
Goodwill and Other Intangible Assets. These
standards prohibit the application of the pooling-of-interests
method of accounting for business combinations effective
June 30, 2001 and require companies to cease the
amortization of existing goodwill and intangible assets with
indefinite lives effective January 1, 2002. As a result of
the adoption of SFAS No. 142, we reassessed the useful
lives of our intangible assets. A significant portion of our
intangible assets are classified as Wireless license
acquisition costs, which represents the costs associated
with acquiring our FCC licenses. These licenses allow us to
provide wireless services by giving us the exclusive right to
utilize certain radio frequency spectrum. Although the FCC
licenses are issued for only a fixed time, generally
ten years, these licenses are renewed by the FCC on a
routine basis and for a nominal fee. In addition, we have
determined that there are no legal, regulatory, contractual,
competitive, economic or other factors that limit the useful
life of these FCC licenses. As a result, our wireless license
acquisition costs are treated as indefinite life intangible
assets. Therefore, upon implementing SFAS No. 142 in its
entirety on January 1, 2002, we ceased the amortization of
both goodwill and wireless license acquisition costs and now
test for impairment of goodwill and wireless license acquisition
costs at least annually and only adjust the carrying amount of
these intangible assets upon an impairment of the goodwill or
wireless license acquisition costs. We also determine on an
annual basis whether facts and circumstances continue to support
an indefinite useful life. For the three and nine months
ended September 30, 2001, we recorded approximately
$14.8 million and $43.8 million of amortization
expense related to our goodwill and approximately
$8.9 million and $25.9 million of amortization
expense, net of income tax benefit, related to our wireless
license acquisition costs. Without this amortization, our
earnings applicable to common stockholder would have been
$7.5 million and $33.0 million for the three and
nine months ended September 30, 2001.

Through December 31, 2001, our accounting
policy for impairment of long-lived assets was based on the
provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed of. In accordance with SFAS No. 121, our
policy was to review the carrying value of long-lived assets and
certain identifiable intangibles whenever events or changes in
circumstances indicate that

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the carrying value may not be recoverable. If
such circumstances were deemed to exist, the carrying value of
the asset would be compared to the estimated undiscounted future
cash flows generated by the asset. In accordance with SFAS
No. 121, our definite life assets will continue to be
amortized over their estimated useful lives and are subject to
SFAS No. 121 impairment criteria. As a result of fully
implementing SFAS No. 142 on January 1, 2002, we are
now required to evaluate the carrying value of our indefinite
life intangible assets using their fair values, at least
annually. If the carrying amount of the intangible asset exceeds
its fair value, an impairment loss shall be recognized in an
amount equal to that excess.


Upon implementation of SFAS No. 142 on
January 1, 2002, we first performed a comparison of the
carrying amount of our wireless license acquisition costs to the
fair value of those assets. For purposes of this comparison, it
is our policy to aggregate our wireless license acquisition
costs. We determined the fair value of our wireless license
acquisition costs based on their estimated future discounted
cash flows. Based on the comparison, we determined that the
carrying amount of our wireless license acquisition costs
exceeded their estimated fair value. As a result, we recorded a
charge in the first quarter of 2002, net of income tax benefit,
of approximately $281.6 million to reflect the write-down of our
wireless license acquisition costs to their fair value. We then
assessed the carrying amount of our goodwill for possible
impairment. For goodwill, there is a two-step approach for
assessing impairment. The first step requires an evaluation of
our fair value as a company to our carrying amount, including
goodwill. Our fair value was determined based on estimated
future discounted cash flows. It was determined that our
estimated fair value as a company exceeded our carrying amount
and thus, our goodwill was not deemed to be impaired. Since our
goodwill was not deemed to be impaired, the second step of the
impairment test, which is used to measure the amount of
impairment loss was not required to be completed.

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

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

In April 2002, the FASB issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical
Corrections. SFAS No. 145 will be effective for
fiscal years beginning after May 15, 2002, and upon
adoption, we must reclassify extraordinary losses on
extinguishment of debt as interest expense in the prior periods
that have had extraordinary losses on debt extinguishments.

23



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##### Table of Contents



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

Forward-Looking Statements

The description of our plans set forth herein,
including planned capital expenditures and acquisitions, are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. These plans involve a number of risks and uncertainties.
Important factors that could 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.
At September 30, 2002, we were not involved with any
derivatives or other financial instruments, due to the fact that
our previous interest rate swaps expired on June 4, 2002.

At September 30, 2002, we had long-term debt
outstanding of $1.6 billion, of which, $904.9 million
bears interest at floating rates. These rates averaged 4.8% for
the nine months ended September 30, 2002. One percentage
point of an interest rate adjustment would change our interest
expense on an annual basis by approximately $9.0 million.






|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Within the 90-day period prior to the filing of
this report, an evaluation was performed under the supervision
and with the participation of our management, including the
Chief Executive Officer (CEO) and Chief Financial Officer
(CFO), of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in
Rule 13a-14(c) under the Securities Exchange Act of 1934).
Based on that evaluation, our management, including the CEO and
CFO, concluded that our disclosure controls and procedures were
effective.

There have been no significant changes in our
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.

24



---



##### 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

We are not in compliance with a financial
covenant contained in our $1.75 billion bank credit
facility. This 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. At September 30, 2002, we were not in
compliance with this covenant. Our lenders have the right, but
not the obligation, to accelerate the repayment of the entire
amount outstanding under the credit facility.






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

Not applicable






|        |                  
|------- | -----------------
|Item 5. | Other Information

Not applicable






|        |                                     
|------- | ------------------------------------
|Item 6. | Exhibits and Reports on
    Form 8-K



|    |         
|--- | --------
|(a) | Exhibits

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

|        |       |             |  |                                                                                                                                                                                          |  |  |             | 
|------- | ----- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | 
|Exhibit |       |             |  | Method of                                                                                                                                                                               
|Numbers |       | Description |  | Filing                                                                                                                                                                                  
|        |       |             |  |                                                                                                                                                                                         
|        | 3.1   |             |  | 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]    | 
|        | 4.7   |             |  | First Amendment to Credit Agreement dated
    March 2, 2001                                                                                                                              |  |  | (1)[10.4.1] | 
|        | 4.8   |             |  | Second Amendment to Credit Agreement dated
    May 31, 2001                                                                                                                              |  |  | (2)[10.4.2] | 
|        | 4.9   |             |  | Third Amendment to Credit Agreement dated
    September 27, 2001                                                                                                                         |  |  | (5)[10.4.3] | 

25



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##### Table of Contents



|        |         |             |  |                                                                                                                                                                                                                            |  |  |             | 
|------- | ------- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | 
|Exhibit |         |             |  | Method of                                                                                                                                                                                                                 
|Numbers |         | Description |  | Filing                                                                                                                                                                                                                    
|        |         |             |  |                                                                                                                                                                                                                           
|        | 4.9.9   |             |  | Limited Waiver to Credit Agreement dated
    April 10, 2002                                                                                                                                                                |  |  | (6)[10.4.4] | 
|        | 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]   | 
|        | 10.3.1  |             |  | Addendum to Amended and Restated Operating
    Agreement between AT&T Wireless Services, Inc. (and its
    affiliates) and ACC Acquisition, LLC (and its affiliates) dated
    May 8, 2002                                 |  |  | (7)[10.3.1] | 
|        | 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]   | 
|        | 10.5*   |             |  | 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]   | 
|        | 10.6.1* |             |  | Amendment No. 1 to the Purchase and License
    Agreement between Nortel Networks, Inc. and Dobson
    Communications Corporation, dated August 5, 2002                                                                    |  |  | (8)         | 
|        | 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.       

26



---



##### Table of Contents





|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Filed as an exhibit to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2002, as the exhibit number indicated in brackets
    and incorporated by reference herein.
|   
|(7) | Filed as an exhibit to the Registrants
    current report on Form 8-K on May 17, 2002 as the
    exhibit number indicated in brackets and incorporated by
    reference herein.                         
|   
|(8) | Filed herewith.                                                                                                                                                                                          



|    |                    
|--- | -------------------
|(b) | Reports on Form 8-K

Not Applicable

27



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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: November 14, 2002

| |                       
| | ----------------------
| | /s/ EVERETT R. DOBSON 
| |                       
| | Everett R. Dobson     
| | President and Director

Date: November 14, 2002

| |                              
| | -----------------------------
| | /s/ BRUCE R. KNOOIHUIZEN     
| |                              
| | Bruce R. Knooihuizen         
| | Treasurer and Director       
| | (Principal Financial Officer)

28



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##### Table of Contents






CERTIFICATIONS FOR FORM 10-Q

I, Everett R. Dobson, President and Director,
certify that:



| |                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. I have reviewed this quarterly report on
    Form 10-Q of American Cellular Corporation (the
    registrant);                                                                                                                                                                                                                                   
|
| | 2. Based on my knowledge, this quarterly
    report does not contain any untrue statement of a material fact
    or omit to state a material fact necessary to make the
    statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period
    covered by this quarterly report;
|
| | 3. Based on my knowledge, the financial
    statements, and other financial information included in this
    quarterly report, fairly present in all material respects the
    financial condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|
| | 4. The registrants other certifying
    officers and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                             



| |                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | (b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this quarterly
    report (the Evaluation Date); and                                                                                                      
|
| | (c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. The registrants other certifying
    officers and I have disclosed, based on our most recent
    evaluation, to the registrants auditors and the audit
    committee of registrants board of directors (or persons
    performing the equivalent function):



| |                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | (b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



| |                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. The registrants other certifying
    officers and I have indicated in this quarterly report whether
    or not there were significant changes in internal controls or in
    other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses



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

|                  |  |                                                                 
|----------------- |  | ----------------------------------------------------------------
|November 14, 2002 |  | By: /s/ EVERETT R. DOBSONEverett R. DobsonPresident and Director

29



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##### Table of Contents






CERTIFICATIONS FOR FORM 10-Q

I, Bruce R. Knooihuizen, Treasurer and
Director, certify that:



| |                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. I have reviewed this quarterly report on
    Form 10-Q of American Cellular Corporation (the
    registrant);                                                                                                                                                                                                                                   
|
| | 2. Based on my knowledge, this quarterly
    report does not contain any untrue statement of a material fact
    or omit to state a material fact necessary to make the
    statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period
    covered by this quarterly report;
|
| | 3. Based on my knowledge, the financial
    statements, and other financial information included in this
    quarterly report, fairly present in all material respects the
    financial condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|
| | 4. The registrants other certifying
    officers and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                             



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b. evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this quarterly
    report (the Evaluation Date); and                                                                                                      
|
| | c. presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. The registrants other certifying
    officers and I have disclosed, based on our most recent
    evaluation, to the registrants auditors and the audit
    committee of registrants board of directors (or persons
    performing the equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b. any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



| |                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. The registrants other certifying
    officers and I have indicated in this quarterly report whether
    or not there were significant changes in internal controls or in
    other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses



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

|                  |  |                                                                       
|----------------- |  | ----------------------------------------------------------------------
|November 14, 2002 |  | By: /s/ BRUCE R. KNOOIHUIZENBruce R. KnooihuizenTreasurer and Director

30



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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]   
|        | 4.7    |             |  | First Amendment to Credit Agreement dated
    March 2, 2001                                                                                                                                                                |  | (1)[10.4.1]
|        | 4.8    |             |  | Second Amendment to Credit Agreement dated
    May 31, 2001                                                                                                                                                                |  | (2)[10.4.2]
|        | 4.9    |             |  | Third Amendment to Credit Agreement dated
    September 27, 2001                                                                                                                                                           |  | (5)[10.4.3]
|        | 4.9.9  |             |  | Limited Waiver to Credit Agreement dated
    April 10, 2002                                                                                                                                                                |  | (6)[10.4.4]
|        | 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]  
|        | 10.3.1 |             |  | Addendum to Amended and Restated Operating
    Agreement between AT&T Wireless Services, Inc. (and its
    affiliates) and ACC Acquisition, LLC (and its affiliates)
    dated May 8, 2002                                 |  | (7)[10.3.1]
|        | 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]  
|        | 10.5*  |             |  | 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]  
|        | 10.6.1 | *           |  | Amendment No. 1 to the Purchase and License
    Agreement between Nortel Networks, Inc. and Dobson
    Communications Corporation, dated August 5, 2002                                                                    |  | (8)        
|        | 10.7   |             |  | Form of License Agreement among Cellular One
    Group and various subsidiaries of American Cellular Corporation                                                                                                           |  | (1)[10.7]  

31



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##### Table of Contents



|        |        |             |  |                                                                                                                                                                                                                          |  |            
|------- | ------ | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------
|Exhibit |        |             |  | Method of                                                                                                                                                                                                               
|Numbers |        | Description |  | Filing                                                                                                                                                                                                                  
|        |        |             |  |                                                                                                                                                                                                                         
|        | 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 as an exhibit to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2002, as the exhibit number indicated in brackets
    and incorporated by reference herein.    
|   
|(7) | Filed as an exhibit to the Registrants
    current report on Form 8-K on May 17, 2002 as the
    exhibit number indicated in brackets and incorporated by
    reference herein.                             
|   
|(8) | Filed herewith.                                                                                                                                                                                              

32