##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended September 30, 2005                                           
|          
|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 number: 000-29633


NEXTEL PARTNERS, INC.


(Exact Name of Registrant as Specified in Its Charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 91-1930918                              
|(State or Other Jurisdiction of
    Incorporation or Organization) |  | (I.R.S. Employer
    Identification No.)

4500 Carillon Point


Kirkland, Washington 98033


(425) 576-3600


(Address of principal executive offices, zip code and
registrants telephone number, including area code)


þ o


þ o


o þ




|                                              |  |                                         
|--------------------------------------------- |  | ----------------------------------------
|Outstanding Title of Class                    |  | Number of Shares on October 31, 2005    
|                                              |  |                                         
|Class A Common Stock
    Class B Common Stock |  | 186,069,711 shares
    84,632,604 shares









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NEXTEL PARTNERS, INC.


FORM 10-Q


TABLE OF CONTENTS


|                             |  |                                                                                                                 |    |          |    | 
|---------------------------- |  | --------------------------------------------------------------------------------------------------------------- | -- | -------- | -- | 
|                             |  |                                                                                                                 |    | Page No. |   
|                             |  |                                                                                                                 |    |          |   
|PART I FINANCIAL INFORMATION
|Item 1.                      |  | Financial Statements                                                                                            |    |          |    | 
|                             |  | Consolidated Condensed Balance Sheets As of
    September 30, 2005 and December 31, 2004                        |    |          | 3  | 
|                             |  | Consolidated Condensed Statements of
    Operations Three and nine months ended September 30, 2005
    and 2004 |    |          | 4  | 
|                             |  | Consolidated Condensed Statements of Cash
    Flows Nine months ended September 30, 2005 and 2004               |    |          | 5  | 
|                             |  | Notes to Consolidated Condensed Financial
    Statements                                                        |    |          | 6  | 
|Item 2.                      |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                       |    |          | 26 | 
|Item 3.                      |  | Quantitative and Qualitative Disclosures
    about Market Risk                                                  |    |          | 47 | 
|Item 4.                      |  | Controls and Procedures                                                                                         |    |          | 48 | 
|PART II OTHER INFORMATION   
|Item 1.                      |  | Legal Proceedings                                                                                               |    |          | 49 | 
|Item 2.                      |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                                                 |    |          | 52 | 
|Item 4.                      |  | Submission of Matters to a Vote of Security
    Holders                                                         |    |          | 52 | 
|Item 5.                      |  | Other Information                                                                                               |    |          | 52 | 
|Item 6.                      |  | Exhibits                                                                                                        |    |          | 53 | 
|Signatures                   |  |                                                                                                                 | 54 |         
|EXHIBIT 10.20               
|EXHIBIT 31.1                
|EXHIBIT 31.2                
|EXHIBIT 32.1                
|EXHIBIT 32.2                



2



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##### Table of Contents






PART I  FINANCIAL INFORMATION







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

NEXTEL PARTNERS, INC. AND SUBSIDIARIES





Consolidated Condensed Balance Sheets


|                                           |                                                                                                                                                                                            |                                    |           |           |              |   |           |            |           | 
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------- | --------- | --------- | ------------ | - | --------- | ---------- | --------- | 
|                                           |                                                                                                                                                                                            | September 30,                      |           |           | December 31, |  
|                                           |                                                                                                                                                                                            | 2005                               |           |           | 2004         |  
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|                                           |                                                                                                                                                                                            | (Dollars in thousands, except      |          
|                                           |                                                                                                                                                                                            | per share amounts)                 |          
|                                           |                                                                                                                                                                                            | (Unaudited)                        |          
|ASSETS                                    
|CURRENT ASSETS:                            |                                                                                                                                                                                            |                                    |           |           |              |   |           |           
|                                           | Cash and cash equivalents                                                                                                                                                                  |                                    | $         | 195,675   |              |   | $         | 147,484    |          
|                                           | Short-term investments                                                                                                                                                                     |                                    |           | 29,402    |              |   |           | 117,095    |          
|                                           | Accounts and notes receivable, net of allowance $29,516 and
    $15,874, respectively                                                                                                      |                                    |           | 250,957   |              |   |           | 190,954    |          
|                                           | Subscriber equipment inventory                                                                                                                                                             |                                    |           | 103,916   |              |   |           | 49,595     |          
|                                           | Deferred current income taxes                                                                                                                                                              |                                    |           | 37,539    |              |   |           |           |          
|                                           | Other current assets                                                                                                                                                                       |                                    |           | 35,370    |              |   |           | 31,388     |          
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|Total current assets                       |                                                                                                                                                                                            |                                    | 652,859   |           |              |   | 536,516   |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|PROPERTY, PLANT AND EQUIPMENT, at cost     |                                                                                                                                                                                            |                                    | 1,701,136 |           |              |   | 1,546,685 |           
|                                           | Less  accumulated depreciation and amortization                                                                                                                                           |                                    |           | (623,120  | )            |   |           | (503,967   | )        
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|                                           |                                                                                                                                                                                            | Property, plant and equipment, net |           |           | 1,078,016    |   |           |            | 1,042,718 | 
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|OTHER NON-CURRENT ASSETS:                  |                                                                                                                                                                                            |                                    |           |           |              |   |           |           
|                                           | FCC licenses, net of accumulated amortization of $8,744                                                                                                                                    |                                    |           | 376,203   |              |   |           | 375,470    |          
|                                           | Deferred non-current income taxes                                                                                                                                                          |                                    |           | 250,600   |              |   |           |           |          
|                                           | Debt issuance costs and other, net of accumulated amortization
    of $8,963 and $6,456, respectively                                                                                      |                                    |           | 17,960    |              |   |           | 20,995     |          
|                                           | Goodwill                                                                                                                                                                                   |                                    |           | 1,514     |              |   |           |           |          
|                                           | Other intangible assets, net of accumulated amortization of $9
    and $0, respectively                                                                                                    |                                    |           | 96        |              |   |           |           |          
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|Total non-current assets                   |                                                                                                                                                                                            |                                    | 646,373   |           |              |   | 396,465   |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|TOTAL ASSETS                               |                                                                                                                                                                                            | $                                  | 2,377,248 |           |              | $ | 1,975,699 |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|                                          
|LIABILITIES AND STOCKHOLDERS EQUITY      
|CURRENT LIABILITIES:                       |                                                                                                                                                                                            |                                    |           |           |              |   |           |           
|                                           | Accounts payable                                                                                                                                                                           |                                    | $         | 73,413    |              |   | $         | 82,833     |          
|                                           | Accrued expenses and other current liabilities                                                                                                                                             |                                    |           | 121,901   |              |   |           | 115,447    |          
|                                           | Current portion of long-term debt                                                                                                                                                          |                                    |           | 140,094   |              |   |           |            |          
|                                           | Due to Nextel WIP                                                                                                                                                                          |                                    |           | 4,636     |              |   |           | 7,379      |          
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|Total current liabilities                  |                                                                                                                                                                                            |                                    | 340,044   |           |              |   | 205,659   |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|LONG-TERM OBLIGATIONS:                     |                                                                                                                                                                                            |                                    |           |           |              |   |           |           
|                                           | Long-term debt                                                                                                                                                                             |                                    |           | 1,339,226 |              |   |           | 1,632,518  |          
|                                           | Deferred income taxes                                                                                                                                                                      |                                    |           |          |              |   |           | 53,964     |          
|                                           | Other long-term liabilities                                                                                                                                                                |                                    |           | 37,196    |              |   |           | 32,243     |          
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|Total long-term obligations                |                                                                                                                                                                                            |                                    | 1,376,422 |           |              |   | 1,718,725 |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|TOTAL LIABILITIES                          |                                                                                                                                                                                            |                                    | 1,716,466 |           |              |   | 1,924,384 |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|COMMITMENTS AND CONTINGENCIES (See Note 8) |                                                                                                                                                                                            |                                    |           |           |              |   |           |           
|STOCKHOLDERS EQUITY:                      |                                                                                                                                                                                            |                                    |           |           |              |   |           |           
|                                           | Preferred stock, no par value, 100,000,000 shares
    authorized, no shares issued and outstanding                                                                                         |                                    |           |          |              |   |           |           |          
|                                           | Series B Preferred stock, par value $.001 per share,
    13,110,000 shares authorized, no shares outstanding                                                                               |                                    |           |          |              |   |           |           |          
|                                           | Common stock, Class A, par value $.001 per share,
    500,000,000 shares authorized, 185,886,368 and
    181,557,105 shares, respectively, issued and outstanding,
    and paid-in capital |                                    |           | 1,074,579 |              |   |           | 1,029,193  |          
|                                           | Common stock, Class B, par value $.001 per share
    convertible, 600,000,000 shares authorized,
    84,632,604 shares, issued and outstanding, and paid-in
    capital                    |                                    |           | 172,697   |              |   |           | 172,697    |          
|                                           | Accumulated deficit                                                                                                                                                                        |                                    |           | (587,873  | )            |   |           | (1,150,806 | )        
|                                           | Deferred compensation                                                                                                                                                                      |                                    |           | (124      | )            |   |           | (440       | )        
|                                           | Accumulated other comprehensive income                                                                                                                                                     |                                    |           | 1,503     |              |   |           | 671        |          
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|Total stockholders equity                 |                                                                                                                                                                                            |                                    | 660,782   |           |              |   | 51,315    |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                                                                            | $                                  | 2,377,248 |           |              | $ | 1,975,699 |           
|                                           |                                                                                                                                                                                            |                                    |           |           |              |  



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##### Table of Contents



NEXTEL PARTNERS, INC. AND SUBSIDIARIES





Consolidated Condensed Statements of Operations


|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |             |           |   |         |             |           | 
|-------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ------- | ------------- | ------------------------- | - | ------ | ----------- | ------------- | - | ------- | ----------- | --------- | - | ------- | ----------- | --------- | 
|                                                                                 |                                                                                                                                                                                                                                                                                               | For the Three Months Ended                       |         |               | For the Nine Months Ended |  
|                                                                                 |                                                                                                                                                                                                                                                                                               | September 30,                                    |         |               | September 30,             |  
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |  
|                                                                                 |                                                                                                                                                                                                                                                                                               | 2005                                             |         |               | 2004                      |   |        | 2005        |               |   | 2004    |            
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         | (As restated) |                           |   |        |             | (As restated) |  
|                                                                                 |                                                                                                                                                                                                                                                                                               | (Dollars in thousands, except per share amounts) |        
|                                                                                 |                                                                                                                                                                                                                                                                                               | (Unaudited)                                      |        
|REVENUES:                                                                        |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |             |           |   |         |            
|                                                                                 | Service revenues (earned from Nextel WIP $57,809, $42,738,
    $153,392 and $113,315 respectively)                                                                                                                                                                                            |                                                  | $       | 445,235       |                           |   | $      | 337,152     |               |   | $       | 1,234,513   |           |   | $       | 936,646     |          
|                                                                                 | Equipment revenues                                                                                                                                                                                                                                                                            |                                                  |         | 27,904        |                           |   |        | 22,676      |               |   |         | 77,532      |           |   |         | 65,954      |          
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|                                                                                 |                                                                                                                                                                                                                                                                                               | Total revenues                                   |         |               | 473,139                   |   |        |             | 359,828       |   |         |             | 1,312,045 |   |         |             | 1,002,600 | 
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|OPERATING EXPENSES:                                                              |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |             |           |   |         |            
|                                                                                 | Cost of service revenues (excludes depreciation of $34,981,
    $30,337, $101,174 and $89,614 respectively) (incurred from
    Nextel WIP $36,638, $31,258, $103,474 and $86,292; American
    Tower $2,892, $2,896, $8,949 and $7,835 and Sprint Nextel $433,
    $0, $433, $0 respectively) |                                                  |         | 115,600       |                           |   |        | 93,718      |               |   |         | 318,097     |           |   |         | 266,253     |          
|                                                                                 | Cost of equipment revenues                                                                                                                                                                                                                                                                    |                                                  |         | 47,093        |                           |   |        | 36,534      |               |   |         | 138,007     |           |   |         | 114,358     |          
|                                                                                 | Selling, general and administrative (Incurred from Nextel WIP
    $10,356, $4,595, $31,217 and $16,223 and Sprint Nextel $149, $0,
    $149, $0, respectively)                                                                                                                                |                                                  |         | 151,380       |                           |   |        | 127,160     |               |   |         | 434,767     |           |   |         | 358,390     |          
|                                                                                 | Stock based compensation (primarily selling, general and
    administrative related)                                                                                                                                                                                                          |                                                  |         | 319           |                           |   |        | (22         | )             |   |         | 567         |           |   |         | 532         |          
|                                                                                 | Depreciation and amortization                                                                                                                                                                                                                                                                 |                                                  |         | 43,779        |                           |   |        | 37,311      |               |   |         | 125,965     |           |   |         | 110,510     |          
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|                                                                                 |                                                                                                                                                                                                                                                                                               | Total operating expenses                         |         |               | 358,171                   |   |        |             | 294,701       |   |         |             | 1,017,403 |   |         |             | 850,043   | 
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|INCOME FROM OPERATIONS                                                           |                                                                                                                                                                                                                                                                                               |                                                  | 114,968 |               |                           |   | 65,127 |             |               |   | 294,642 |             |           |   | 152,557 |            
|                                                                                 | Interest expense, net                                                                                                                                                                                                                                                                         |                                                  |         | (23,404       | )                         |   |        | (23,460     | )             |   |         | (73,630     | )         |   |         | (81,708     | )        
|                                                                                 | Interest income                                                                                                                                                                                                                                                                               |                                                  |         | 2,009         |                           |   |        | 823         |               |   |         | 5,662       |           |   |         | 1,802       |          
|                                                                                 | Loss on early retirement of debt                                                                                                                                                                                                                                                              |                                                  |         |              |                           |   |        |            |               |   |         | (824        | )         |   |         | (54,971     | )        
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|INCOME BEFORE INCOME TAX PROVISION                                               |                                                                                                                                                                                                                                                                                               |                                                  | 93,573  |               |                           |   | 42,490 |             |               |   | 225,850 |             |           |   | 17,680  |            
|                                                                                 | Income tax (provision) benefit                                                                                                                                                                                                                                                                |                                                  |         | 340,943       |                           |   |        | (8,081      | )             |   |         | 337,083     |           |   |         | (246        | )        
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS                                   |                                                                                                                                                                                                                                                                                               | $                                                | 434,516 |               |                           | $ | 34,409 |             |               | $ | 562,933 |             |           | $ | 17,434  |            
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|NET INCOME PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS, BASIC
    AND DILUTED: |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |             |           |   |         |            
|                                                                                 | Basic                                                                                                                                                                                                                                                                                         |                                                  | $       | 1.61          |                           |   | $      | 0.13        |               |   | $       | 2.10        |           |   | $       | 0.07        |          
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|                                                                                 | Diluted                                                                                                                                                                                                                                                                                       |                                                  | $       | 1.41          |                           |   | $      | 0.12        |               |   | $       | 1.83        |           |   | $       | 0.06        |          
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|Weighted average number of shares outstanding                                    |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |             |           |   |         |            
|                                                                                 | Basic                                                                                                                                                                                                                                                                                         |                                                  |         | 269,902,776   |                           |   |        | 263,945,444 |               |   |         | 268,569,342 |           |   |         | 263,134,769 |          
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            
|                                                                                 | Diluted                                                                                                                                                                                                                                                                                       |                                                  |         | 308,648,741   |                           |   |        | 304,833,454 |               |   |         | 309,438,709 |           |   |         | 269,973,801 |          
|                                                                                 |                                                                                                                                                                                                                                                                                               |                                                  |         |               |                           |   |        |             |               |   |         |            



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##### Table of Contents



NEXTEL PARTNERS, INC. AND SUBSIDIARIES





Consolidated Condensed Statements of Cash Flows


|                                                     |                                                                               |                                                                  |                                    |               |          |         |         |          |         |         | 
|---------------------------------------------------- | ----------------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------------- | ------------- | -------- | ------- | ------- | -------- | ------- | ------- | 
|                                                     |                                                                               | For the Nine Months Ended                                        |                                   
|                                                     |                                                                               | September 30,                                                    |                                   
|                                                     |                                                                               |                                                                  |                                   
|                                                     |                                                                               | 2005                                                             |                                    |               | 2004     |        
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|                                                     |                                                                               |                                                                  |                                    | (As restated) |         
|                                                     |                                                                               | (Dollars in thousands)                                           |                                   
|                                                     |                                                                               | (Unaudited)                                                      |                                   
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                               |                                                                  |                                    |               |          |         |         |         
|                                                     | Net income                                                                    |                                                                  | $                                  | 562,933       |          |         | $       | 17,434   |        
|                                                     | Adjustments to reconcile net income to net cash from operating
    activities |                                                                  |                                    |               |          |         |         |          |        
|                                                     | Deferred income tax provision (benefit)                                       |                                                                  |                                    | (343,081      | )        |         |         | 246      |        
|                                                     | Depreciation and amortization                                                 |                                                                  |                                    | 125,965       |          |         |         | 110,510  |        
|                                                     | Amortization of debt issuance costs                                           |                                                                  |                                    | 2,640         |          |         |         | 3,009    |        
|                                                     | Interest accretion for senior discount notes                                  |                                                                  |                                    |              |          |         |         | 20       |        
|                                                     | Bond discount amortization                                                    |                                                                  |                                    | 835           |          |         |         | 720      |        
|                                                     | Loss on early retirement of debt                                              |                                                                  |                                    | 824           |          |         |         | 54,971   |        
|                                                     | Fair value adjustments of derivative instruments and investments              |                                                                  |                                    | (2,326        | )        |         |         | (2,760   | )      
|                                                     | Stock based compensation                                                      |                                                                  |                                    | 567           |          |         |         | 532      |        
|                                                     | Other, net                                                                    |                                                                  |                                    | 1,391         |          |         |         | (233     | )      
|                                                     | Changes in current assets and liabilities:                                    |                                                                  |                                    |               |          |         |         |          |        
|                                                     |                                                                               | Accounts and notes receivable, net                               |                                    |               | (60,003  | )       |         |          | (33,624 | )      
|                                                     |                                                                               | Subscriber equipment inventory                                   |                                    |               | (54,307  | )       |         |          | (17,483 | )      
|                                                     |                                                                               | Other current and long-term assets                               |                                    |               | (2,125   | )       |         |          | (5,523  | )      
|                                                     |                                                                               | Accounts payable, accrued expenses and other current liabilities |                                    |               | 22,757   |         |         |          | 6,590   |        
|                                                     |                                                                               | Operating advances due to (from) Nextel WIP                      |                                    |               | (5,003   | )       |         |          | (2,691  | )      
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|                                                     |                                                                               |                                                                  | Net cash from operating activities |               |          | 251,067 |         |          |         | 131,718 | 
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                               |                                                                  |                                    |               |          |         |         |         
|                                                     | Capital expenditures                                                          |                                                                  |                                    | (192,492      | )        |         |         | (103,372 | )      
|                                                     | FCC licenses                                                                  |                                                                  |                                    | (618          | )        |         |         | (3,650   | )      
|                                                     | Proceeds from maturities of short-term investments                            |                                                                  |                                    | 118,567       |          |         |         | 77,603   |        
|                                                     | Proceeds from sales of short-term investments                                 |                                                                  |                                    | 19,659        |          |         |         | 313,611  |        
|                                                     | Purchases of short-term investments                                           |                                                                  |                                    | (49,672       | )        |         |         | (360,365 | )      
|                                                     | Other                                                                         |                                                                  |                                    | (1,662        | )        |         |         |         |        
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|                                                     |                                                                               | Net cash from investing activities                               |                                    |               | (106,218 | )       |         |          | (76,173 | )      
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                               |                                                                  |                                    |               |          |         |         |         
|                                                     | Proceeds from borrowings                                                      |                                                                  |                                    | 550,000       |          |         |         | 724,565  |        
|                                                     | Stock options exercised                                                       |                                                                  |                                    | 43,147        |          |         |         | 10,774   |        
|                                                     | Proceeds from stock issued for employee stock purchase plan                   |                                                                  |                                    | 1,982         |          |         |         | 1,827    |        
|                                                     | Proceeds from sale lease-back transactions                                    |                                                                  |                                    | 13,036        |          |         |         | 1,211    |        
|                                                     | Debt repayments                                                               |                                                                  |                                    | (701,221      | )        |         |         | (788,909 | )      
|                                                     | Capital lease payments                                                        |                                                                  |                                    | (2,595        | )        |         |         | (2,380   | )      
|                                                     | Debt and equity issuance costs                                                |                                                                  |                                    | (1,007        | )        |         |         | (3,308   | )      
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|                                                     |                                                                               | Net cash from financing activities                               |                                    |               | (96,658  | )       |         |          | (56,220 | )      
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                               |                                                                  | 48,191                             |               |          |         | (675    | )       
|CASH AND CASH EQUIVALENTS, beginning of period       |                                                                               |                                                                  | 147,484                            |               |          |         | 122,620 |         
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|CASH AND CASH EQUIVALENTS, end of period             |                                                                               | $                                                                | 195,675                            |               |          | $       | 121,945 |         
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|SUPPLEMENTAL DISCLOSURES                             |                                                                               |                                                                  |                                    |               |          |         |         |         
|                                                     | Cash paid for income taxes                                                    |                                                                  | $                                  | 4,615         |          |         | $       |         |        
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|                                                     | Retirement of long-term debt with common stock                                |                                                                  | $                                  | 45            |          |         | $       |         |        
|                                                     |                                                                               |                                                                  |                                    |               |          |        
|                                                     | Cash paid for interest, net of capitalized amount                             |                                                                  | $                                  | 76,488        |          |         | $       | 94,762   |        
|                                                     |                                                                               |                                                                  |                                    |               |          |        



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES





Notes to Consolidated Condensed Financial Statements


September 30, 2005


(unaudited)




|   |                      
|-- | ---------------------
|1. | BASIS OF PRESENTATION



Accounting for Leases, Accounting for Operating
Leases with Scheduled Rent Increases.






|   |           
|-- | ----------
|2. | OPERATIONS



| |                        
| | -----------------------
| | Description of Business





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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




|   |                                
|-- | -------------------------------
|3. | SIGNIFICANT ACCOUNTING POLICIES



| |                      
| | ---------------------
| | Concentration of Risk











| |                 
| | ----------------
| | Use of Estimates





| |                            
| | ---------------------------
| | Principles of Consolidation





| |                     
| | --------------------
| | Net Income per Share

Computation
of Earnings Per Share,


7



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |            |   |   |             |           |  
|---------------------------------------------------------------------------------- | --------------------------------------------------- | -------------------------------------------------- | ----------- | ------------- | ------------------------- | - | ----------- | ---------- | ------------- | - | ----------- | ---------- | - | - | ----------- | --------- | -
|                                                                                   |                                                     | For the Three Months Ended                         |             |               | For the Nine Months Ended |  
|                                                                                   |                                                     | September 30,                                      |             |               | September 30,             |  
|                                                                                   |                                                     |                                                    |             |               |                           |  
|                                                                                   |                                                     | 2005                                               |             |               | 2004                      |   |             | 2005       |               |   | 2004        |           
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           
|                                                                                   |                                                     |                                                    |             | (As restated) |                           |   |             |            | (As restated) |  
|                                                                                   |                                                     | (In thousands, except share and per share amounts) |            
|Income attributable to common stockholders (numerator for basic)                   |                                                     | $                                                  | 434,516     |               |                           | $ | 34,409      |            |               | $ | 562,933     |            |   | $ | 17,434      |          
|                                                                                   | Effect of dilutive securities:                      |                                                    |             |               |                           |   |             |            |               |   |             |            |   |   |             |           |  
|                                                                                   | Convertible Senior Notes                            |                                                    |             | 673           |                           |   |             | 1,125      |               |   |             | 2,020      |   |   |             |          |  
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           
|Adjusted Income attributable to common stockholders (numerator
    for diluted)    |                                                     | $                                                  | 435,189     |               |                           | $ | 35,534      |            |               | $ | 564,953     |            |   | $ | 17,434      |          
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           
|Gross weighted average common shares outstanding                                   |                                                     |                                                    | 269,940,276 |               |                           |   | 264,056,776 |            |               |   | 268,606,842 |            |   |   | 263,236,913 |          
|                                                                                   | Less: Weighted average shares subject to repurchase |                                                    |             | (37,500       | )                         |   |             | (111,332   | )             |   |             | (37,500    | ) |   |             | (102,144  | )
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           
|Weighted average common shares outstanding  basic
    (denominator for basic)     |                                                     |                                                    | 269,902,776 |               |                           |   | 263,945,444 |            |               |   | 268,569,342 |            |   |   | 263,134,769 |          
|                                                                                   | Effect of dilutive securities:                      |                                                    |             |               |                           |   |             |            |               |   |             |            |   |   |             |           |  
|                                                                                   | Stock options                                       |                                                    |             | 5,842,140     |                           |   |             | 7,944,490  |               |   |             | 7,926,732  |   |   |             | 6,769,395 |  
|                                                                                   | Restricted stock (unvested)                         |                                                    |             | 34,064        |                           |   |             | 70,936     |               |   |             | 71,843     |   |   |             | 69,637    |  
|                                                                                   | Convertible senior notes                            |                                                    |             | 32,869,761    |                           |   |             | 32,872,584 |               |   |             | 32,870,792 |   |   |             |          |  
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           
|Weighted average common shares outstanding  diluted
    (denominator for diluted) |                                                     |                                                    | 308,648,741 |               |                           |   | 304,833,454 |            |               |   | 309,438,709 |            |   |   | 269,973,801 |          
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           
|Net income per share, basic                                                        |                                                     | $                                                  | 1.61        |               |                           | $ | 0.13        |            |               | $ | 2.10        |            |   | $ | 0.07        |          
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           
|Net income per share, diluted                                                      |                                                     | $                                                  | 1.41        |               |                           | $ | 0.12        |            |               | $ | 1.83        |            |   | $ | 0.06        |          
|                                                                                   |                                                     |                                                    |             |               |                           |   |             |            |               |   |             |           

1 2






| |                          
| | -------------------------
| | Cash and Cash Equivalents



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




| |                       
| | ----------------------
| | Short-Term Investments





| |                            
| | ---------------------------
| | Sale-Leaseback Transactions





| |       
| | ------
| | Leases





| |                  
| | -----------------
| | Intangible Assets

Goodwill and Other Intangible
Assets,








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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)


Unit of Accounting for Testing
Impairment of Indefinite-Lived Intangible Assets.




| |             
| | ------------
| | Income Taxes

Accounting for Income
Taxes.






|                                      |         |                      |         |         |                     |   |        |        |   |   |         |         |   |   |      |      |  
|------------------------------------- | ------- | -------------------- | ------- | ------- | ------------------- | - | ------ | ------ | - | - | ------- | ------- | - | - | ---- | ---- | -
|                                      |         | For the Three Months |         |         | For the Nine Months |  
|                                      |         | Ended September 30,  |         |         | Ended September 30, |  
|                                      |         |                      |         |         |                     |  
|                                      |         | 2005                 |         |         | 2004                |   |        | 2005   |   |   | 2004    |        
|                                      |         |                      |         |         |                     |   |        |        |   |   |         |        
|                                      |         | (In thousands)       |        
|Current Tax (Provision)/ Benefit:     |         |                      |         |         |                     |   |        |        |   |   |         |         |   |   |      |     
|                                      | Federal |                      | $       | (578    | )                   |   | $      |       |   |   | $       | (2,560  | ) |   | $    |     |  
|                                      | State   |                      |         | (3,396  | )                   |   |        |       |   |   |         | (3,438  | ) |   |      |     |  
|                                      |         |                      |         |         |                     |   |        |        |   |   |         |        
|                                      | Total   |                      |         | (3,974  | )                   |   |        |       |   |   |         | (5,998  | ) |   |      |     |  
|Deferred Tax (Provision)/ Benefit:    |         |                      |         |         |                     |   |        |        |   |   |         |         |   |   |      |     
|                                      | Federal |                      |         | 316,978 |                     |   |        | (6,869 | ) |   |         | 315,680 |   |   |      | (147 | )
|                                      | State   |                      |         | 27,939  |                     |   |        | (1,212 | ) |   |         | 27,401  |   |   |      | (99  | )
|                                      |         |                      |         |         |                     |   |        |        |   |   |         |        
|                                      | Total   |                      |         | 344,917 |                     |   |        | (8,081 | ) |   |         | 343,081 |   |   |      | (246 | )
|                                      |         |                      |         |         |                     |   |        |        |   |   |         |        
|Total Income Tax (Provision)/ Benefit |         | $                    | 340,943 |         |                     | $ | (8,081 | )      |   | $ | 337,083 |         |   | $ | (246 | )   
|                                      |         |                      |         |         |                     |   |        |        |   |   |         |        



| |                              
| | -----------------------------
| | Interest Rate Risk Management



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)


Accounting for Derivative
Instruments and Hedging Activities,




| |                                  
| | ---------------------------------
| | Non-Cash Flow Hedging Instruments





|                                                 |  |                |       |  
|------------------------------------------------ |  | -------------- | ----- | -
|Non-Cash Flow Hedging Instruments                |  |               
|                                                 |  |               
|                                                 |  | (In thousands) |      
|Fair value of liability as of December 31, 2004  |  | $              | 1,117 |  
|Change in fair value  interest rate changes     |  |                | (597  | )
|Final settlement of swap agreement               |  |                | (520  | )
|                                                 |  |                |      
|Fair value of liability as of September 30, 2005 |  | $              | 0     |  
|                                                 |  |                |      

Cash Flow Hedging
Instruments






|                                              |  |                |       | 
|--------------------------------------------- |  | -------------- | ----- | 
|Cash Flow Hedging Instruments                 |  |               
|                                              |  |               
|                                              |  | (In thousands) |      
|Fair value of assets as of December 31, 2004  |  | $              | 579   | 
|Change in fair value  interest rate changes  |  |                | 1,197 | 
|                                              |  |                |      
|Fair value of assets as of September 30, 2005 |  | $              | 1,776 | 
|                                              |  |                |      

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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




| |                    
| | -------------------
| | Revenue Recognition





Accounting for Revenue
Arrangements with Multiple Deliverables, Revenue
Recognition in Financial Statements,




|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           |  |  |   |         | 
|------------------------------------------------------------- |  | ---------------------------------------- | ------- | ------------- | ------------------------- | - | ------- | ---- | ------------- | - | --------- |  |  | - | ------- | 
|                                                              |  | For the Three Months Ended               |         |               | For the Nine Months Ended |  
|                                                              |  | September 30,                            |         |               | September 30,             |  
|                                                              |  |                                          |         |               |                           |  
|                                                              |  | 2005                                     |         |               | 2004                      |   |         | 2005 |               |   | 2004      | 
|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           | 
|                                                              |  |                                          |         | (As restated) |                           |   |         |      | (As restated) |  
|                                                              |  | (In thousands, except per share amounts) |        
|Service revenues                                              |  | $                                        | 444,791 |               |                           | $ | 336,239 |      |               | $ | 1,232,804 |  |  | $ | 933,709 | 
|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           | 
|Equipment revenues                                            |  | $                                        | 25,337  |               |                           | $ | 17,798  |      |               | $ | 68,006    |  |  | $ | 50,096  | 
|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           | 
|Cost of equipment revenues                                    |  | $                                        | 44,082  |               |                           | $ | 30,743  |      |               | $ | 126,772   |  |  | $ | 95,563  | 
|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           | 
|Income attributable to common stockholders                    |  | $                                        | 434,516 |               |                           | $ | 34,409  |      |               | $ | 562,933   |  |  | $ | 17,434  | 
|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           | 
|Income per share attributable to common stockholders, basic   |  | $                                        | 1.61    |               |                           | $ | 0.13    |      |               | $ | 2.10      |  |  | $ | 0.07    | 
|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           | 
|Income per share attributable to common stockholders, diluted |  | $                                        | 1.41    |               |                           | $ | 0.12    |      |               | $ | 1.83      |  |  | $ | 0.06    | 
|                                                              |  |                                          |         |               |                           |   |         |      |               |   |           | 

12



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




| |                  
| | -----------------
| | Reclassifications





| |                  
| | -----------------
| | Long-Lived Assets

Accounting
for the Impairment or Disposal of Long-Lived Assets.




| |                         
| | ------------------------
| | Stock-Based Compensation

Accounting for Stock Based Compensation 
Transition and Disclosure. Accounting for Stock-Based
Compensation, Accounting for Stock
Issued to Employees.




|                                                                                                                                                                               |  |                                          |         |               |                           |   |        |      |               |   |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------- | ------- | ------------- | ------------------------- | - | ------ | ---- | ------------- | - | ------- | - |  | - | ------- | -
|                                                                                                                                                                               |  | For the Three Months Ended               |         |               | For the Nine Months Ended |  
|                                                                                                                                                                               |  | September 30,                            |         |               | September 30,             |  
|                                                                                                                                                                               |  |                                          |         |               |                           |  
|                                                                                                                                                                               |  | 2005                                     |         |               | 2004                      |   |        | 2005 |               |   | 2004    |  
|                                                                                                                                                                               |  |                                          |         |               |                           |   |        |      |               |   |         |  
|                                                                                                                                                                               |  |                                          |         | (As restated) |                           |   |        |      | (As restated) |  
|                                                                                                                                                                               |  | (In thousands, except per share amounts) |        
|Net income, as reported                                                                                                                                                        |  | $                                        | 434,516 |               |                           | $ | 34,409 |      |               | $ | 562,933 |   |  | $ | 17,434  |  
|Add: stock-based employee compensation expense included in
    reported net income, net of tax of $124, $0, $124 and $0,
    respectively                                      |  |                                          | 195     |               |                           |   | (22    | )    |               |   | 443     |   |  |   | 532     |  
|Deduct: total stock-based employee compensation expense
    determined under fair-value-based method for all awards, net of
    tax of $6,101, $0, $6,101 and $0, respectively |  |                                          | (9,618  | )             |                           |   | (6,212 | )    |               |   | (24,564 | ) |  |   | (19,016 | )
|Add: prior periods tax effects recognized in September 2005                                                                                                                   |  |                                          | 35,724  |               |                           |   |       |      |               |   | 35,724  |   |  |   |        |  
|                                                                                                                                                                               |  |                                          |         |               |                           |   |        |      |               |   |         |  
|As adjusted, net income                                                                                                                                                        |  | $                                        | 460,817 |               |                           | $ | 28,175 |      |               | $ | 574,536 |   |  | $ | (1,050  | )
|                                                                                                                                                                               |  |                                          |         |               |                           |   |        |      |               |   |         |  

13



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)


|                                                              |  |                                          |      |               |                           |   |      |      |               |   |      |  |  |   |      | 
|------------------------------------------------------------- |  | ---------------------------------------- | ---- | ------------- | ------------------------- | - | ---- | ---- | ------------- | - | ---- |  |  | - | ---- | 
|                                                              |  | For the Three Months Ended               |      |               | For the Nine Months Ended |  
|                                                              |  | September 30,                            |      |               | September 30,             |  
|                                                              |  |                                          |      |               |                           |  
|                                                              |  | 2005                                     |      |               | 2004                      |   |      | 2005 |               |   | 2004 | 
|                                                              |  |                                          |      |               |                           |   |      |      |               |   |      | 
|                                                              |  |                                          |      | (As restated) |                           |   |      |      | (As restated) |  
|                                                              |  | (In thousands, except per share amounts) |     
|Basic income per share attributable to common stockholders:   |  |                                          |      |               |                           |   |      |      |               |   |      |  |  |   |      | 
|As reported                                                   |  | $                                        | 1.61 |               |                           | $ | 0.13 |      |               | $ | 2.10 |  |  | $ | 0.07 | 
|                                                              |  |                                          |      |               |                           |   |      |      |               |   |      | 
|As adjusted                                                   |  | $                                        | 1.71 |               |                           | $ | 0.11 |      |               | $ | 2.14 |  |  | $ | 0.00 | 
|                                                              |  |                                          |      |               |                           |   |      |      |               |   |      | 
|Diluted income per share attributable to common stockholders: |  |                                          |      |               |                           |   |      |      |               |   |      |  |  |   |      | 
|As reported                                                   |  | $                                        | 1.41 |               |                           | $ | 0.12 |      |               | $ | 1.83 |  |  | $ | 0.06 | 
|                                                              |  |                                          |      |               |                           |   |      |      |               |   |      | 
|As adjusted                                                   |  | $                                        | 1.49 |               |                           | $ | 0.10 |      |               | $ | 1.86 |  |  | $ | 0.00 | 
|                                                              |  |                                          |      |               |                           |   |      |      |               |   |      | 
|Weighted average fair value per share of options granted      |  |                                          | N/A  |               |                           | $ | 7.76 |      |               | $ | 7.64 |  |  | $ | 8.38 | 
|                                                              |  |                                          |      |               |                           |   |      |      |               |   |      | 



|                                |  |                           |             |  |      |  |             | 
|------------------------------- |  | ------------------------- | ----------- |  | ---- |  | ----------- | 
|                                |  | For the Nine Months Ended |            
|                                |  | September 30,             |            
|                                |  |                           |            
|                                |  | 2005                      |             |  | 2004 | 
|                                |  |                           |             |  |      | 
|Expected stock price volatility |  |                           | 34% - 43%   |  |      |  | 53% - 71%   | 
|Risk-free interest rate         |  |                           | 3.7% - 4.0% |  |      |  | 3.1% - 3.4% | 
|Expected life in years          |  |                           | 4 years     |  |      |  | 5 years     | 
|Expected dividend yield         |  |                           | 0.00%       |  |      |  | 0.00%       | 





| |                                          
| | -----------------------------------------
| | Recently Issued Accounting Pronouncements

Inventory Costs, Inventory Pricing.


Share Based Payment, Accounting for Stock-Based
Compensation, Accounting for Stock Issued to Employees. Accounting for Stock Based
Compensation-Transition and Disclosure, Share Based
Payment, Classification and
Measurement of Freestanding Financial Instruments


14



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)


Originally Issued in Exchange for Employee Services under
SFAS No. 123R,


Exchange of Nonmonetary Assets, Accounting for Nonmonetary Transactions,


Accounting for Conditional Asset Retirement
Obligations


Accounting Changes and Error Corrections, Accounting Changes, Reporting Accounting Changes in Interim Financial
Statements.


Determining the Amortization Period
for Leasehold Improvements,


Accounting for Rental Costs Incurred
during a Construction Period,




|   |                                                 
|-- | ------------------------------------------------
|4. | RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

Accounting for Leases, Accounting for Operating
Leases with Scheduled Rent Increases.


15



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




|                           |                                      |                          |   |            |             |  |   |             |   |  |   |            |  
|-------------------------- | ------------------------------------ | ------------------------ | - | ---------- | ----------- |  | - | ----------- | - |  | - | ---------- | -
|                           |                                      | As of September 30, 2004 |  
|                           |                                      |                          |  
|                           |                                      | As Reported              |   |            | Adjustments |  |   | As Restated |  
|                           |                                      |                          |   |            |             |  |   |             |  
|                           |                                      | (Dollars in thousands)   |  
|Consolidated Balance Sheet |                                      |                          |   |            |             |  |   |             |   |  |   |           
|                           | Other long-term liabilities          |                          | $ | 15,331     |             |  | $ | 17,265      |   |  | $ | 32,596     |  
|                           | Total long-term liabilities          |                          |   | 1,694,307  |             |  |   | 17,265      |   |  |   | 1,711,572  |  
|                           | Total liabilities                    |                          |   | 1,875,563  |             |  |   | 17,265      |   |  |   | 1,892,828  |  
|                           | Accumulated deficit                  |                          |   | (1,169,853 | )           |  |   | (17,265     | ) |  |   | (1,187,118 | )
|                           | Total stockholders equity (deficit) |                          |   | 20,990     |             |  |   | (17,265     | ) |  |   | 3,725      |  

|                                     |                                                                  |                                         |   |         |             |  |   |             |   |  |   |         | 
|------------------------------------ | ---------------------------------------------------------------- | --------------------------------------- | - | ------- | ----------- |  | - | ----------- | - |  | - | ------- | 
|                                     |                                                                  | For the Three Months Ended              |  
|                                     |                                                                  | September 30, 2004                      |  
|                                     |                                                                  |                                         |  
|                                     |                                                                  | As Reported                             |   |         | Adjustments |  |   | As Restated |  
|                                     |                                                                  |                                         |   |         |             |  |   |             |  
|                                     |                                                                  | (Dollars in thousands, except per share |  
|                                     |                                                                  | amounts)                                |  
|Consolidated Statement of Operations |                                                                  |                                         |   |         |             |  |   |             |   |  |   |        
|                                     | Cost of service revenues                                         |                                         | $ | 92,606  |             |  | $ | 1,112       |   |  | $ | 93,718  | 
|                                     | Total operating expenses(1)                                      |                                         |   | 291,303 |             |  |   | 1,112       |   |  |   | 292,415 | 
|                                     | Income from operations                                           |                                         |   | 66,239  |             |  |   | (1,112      | ) |  |   | 65,127  | 
|                                     | Income before deferred income tax provision                      |                                         |   | 43,602  |             |  |   | (1,112      | ) |  |   | 42,490  | 
|                                     | Net income attributable to common stockholders                   |                                         |   | 35,521  |             |  |   | (1,112      | ) |  |   | 34,409  | 
|                                     | Basic net income per share attributable to common stockholders   |                                         | $ | 0.13    |             |  | $ |            |   |  | $ | 0.13    | 
|                                     | Diluted net income per share attributable to common stockholders |                                         | $ | 0.12    |             |  | $ |            |   |  | $ | 0.12    | 






|    |                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Total operating expenses for the three months ended
    September 30, 2004 presented in this table does not reflect
    certain amounts that have been reclassified to conform to the
    current year presentation. Including reclassifications, total
    operating expenses for the three months ended September 30,
    2004 was $294.7 million.

|                                     |                                                                  |                                         |   |         |             |  |   |             |   |  |   |         | 
|------------------------------------ | ---------------------------------------------------------------- | --------------------------------------- | - | ------- | ----------- |  | - | ----------- | - |  | - | ------- | 
|                                     |                                                                  | For the Nine Months Ended               |  
|                                     |                                                                  | September 30, 2004                      |  
|                                     |                                                                  |                                         |  
|                                     |                                                                  | As Reported                             |   |         | Adjustments |  |   | As Restated |  
|                                     |                                                                  |                                         |   |         |             |  |   |             |  
|                                     |                                                                  | (Dollars in thousands, except per share |  
|                                     |                                                                  | amounts)                                |  
|Consolidated Statement of Operations |                                                                  |                                         |   |         |             |  |   |             |   |  |   |        
|                                     | Cost of service revenues                                         |                                         | $ | 262,897 |             |  | $ | 3,356       |   |  | $ | 266,253 | 
|                                     | Total operating expenses(2)                                      |                                         |   | 840,159 |             |  |   | 3,356       |   |  |   | 843,515 | 
|                                     | Income from operations                                           |                                         |   | 155,913 |             |  |   | (3,356      | ) |  |   | 152,557 | 
|                                     | Income before deferred income tax provision                      |                                         |   | 21,036  |             |  |   | (3,356      | ) |  |   | 17,680  | 
|                                     | Net income attributable to common stockholders                   |                                         |   | 20,790  |             |  |   | (3,356      | ) |  |   | 17,434  | 
|                                     | Basic net income per share attributable to common stockholders   |                                         | $ | 0.08    |             |  | $ | (0.01       | ) |  | $ | 0.07    | 
|                                     | Diluted net income per share attributable to common stockholders |                                         | $ | 0.08    |             |  | $ | (0.02       | ) |  | $ | 0.06    | 

16



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##### Table of Contents



NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




|    |                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Total operating expenses for the nine months ended
    September 30, 2004 presented in this table does not reflect
    certain amounts that have been reclassified to conform to the
    current year presentation. Including reclassifications, total
    operating expenses for the nine months ended September 30,
    2004 was $850.0 million.



|   |                       
|-- | ----------------------
|5. | PROPERTY AND EQUIPMENT

|                                                 |  |                |           |   |              |   |           |  
|------------------------------------------------ |  | -------------- | --------- | - | ------------ | - | --------- | -
|                                                 |  | As of          |          
|                                                 |  |                |          
|                                                 |  | September 30,  |           |   | December 31, |  
|                                                 |  | 2005           |           |   | 2004         |  
|                                                 |  |                |           |   |              |  
|                                                 |  | (In thousands) |          
|Equipment                                        |  | $              | 1,482,424 |   |              | $ | 1,358,969 |  
|Furniture, fixtures and software                 |  |                | 141,007   |   |              |   | 125,299   |  
|Building and improvements                        |  |                | 13,681    |   |              |   | 9,870     |  
|Less  accumulated depreciation and amortization |  |                | (623,120  | ) |              |   | (503,967  | )
|                                                 |  |                |           |   |              |  
|Subtotal                                         |  |                | 1,013,992 |   |              |   | 990,171   |  
|Construction in progress                         |  |                | 64,024    |   |              |   | 52,547    |  
|                                                 |  |                |           |   |              |  
|Total property and equipment                     |  | $              | 1,078,016 |   |              | $ | 1,042,718 |  
|                                                 |  |                |           |   |              |  



|   |                                          
|-- | -----------------------------------------
|6. | INTANGIBLE ASSETS SUBJECT TO AMORTIZATION

|                                                |  |                |     |   |              |   |   | 
|----------------------------------------------- |  | -------------- | --- | - | ------------ | - | - | 
|                                                |  | As of         
|                                                |  |               
|                                                |  | September 30,  |     |   | December 31,
|                                                |  | 2005           |     |   | 2004        
|                                                |  |                |     |   |             
|                                                |  | (In thousands)
|Other intangible assets subject to amortization |  | $              | 105 |   |              | $ |  | 
|Less  accumulated amortization                 |  |                | (9  | ) |              |   |  | 
|                                                |  |                |     |   |              |  
|Total intangible assets subject to amortization |  | $              | 96  |   |              | $ |  | 
|                                                |  |                |     |   |              |  





|   |                                      
|-- | -------------------------------------
|7. | NON-CURRENT PORTION OF LONG-TERM DEBT

|                                                                                                                                                                         |  |                |           |  |              |   |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | --------- |  | ------------ | - | --------- | 
|                                                                                                                                                                         |  | As of          |          
|                                                                                                                                                                         |  |                |          
|                                                                                                                                                                         |  | September 30,  |           |  | December 31, |  
|                                                                                                                                                                         |  | 2005           |           |  | 2004         |  
|                                                                                                                                                                         |  |                |           |  |              |  
|                                                                                                                                                                         |  | (In thousands) |          
|Bank Credit Facility  tranche C and D loans,
    interest, at our option, calculated on Administrative
    Agents alternate base rate or reserve adjusted LIBOR        |  | $              | 550,000   |  |              | $ | 700,000   | 
|81/8% Senior
    Notes due 2011, net of $0.4 million discount at
    September 30, 2005 and December 31, 2004, interest
    payable semi-annually in cash and in arrears |  |                | 474,630   |  |              |   | 474,593   | 
|11/2% Convertible
    Senior Notes due 2008, interest payable semi-annually in cash
    and in arrears                                                                   |  |                | 299,955   |  |              |   | 300,000   | 
|121/2% Senior
    Discount Notes due 2009, net discount of $0 and
    $7.0 million, respectively                                                                         |  |                |          |  |              |   | 139,296   | 
|11% Senior Notes due 2010, interest payable semi-annually
    in cash and in arrears                                                                                     |  |                |          |  |              |   | 1,157     | 
|Capital leases                                                                                                                                                           |  |                | 14,641    |  |              |   | 17,472    | 
|                                                                                                                                                                         |  |                |           |  |              |  
|Total non-current portion of long-term debt                                                                                                                              |  | $              | 1,339,226 |  |              | $ | 1,632,518 | 
|                                                                                                                                                                         |  |                |           |  |              |  

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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




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









| |                                
| | -------------------------------
| | 81/8% Senior
    Notes Due 2011

1 8 1 8 1 8


1 8 1 8 1 8


1 8 1 8


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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




| |                                            
| | -------------------------------------------
| | 11/2% Convertible
    Senior Notes Due 2008

1 2 1 2 1 2 1 2 1 2


1 2 1 2 1 2 1 2 1 2 1 2


1 2 1 2




| |                                          
| | -----------------------------------------
| | 121/2% Senior
    Discount Notes Due 2009

1 2 1 2 1 2 1 2


1 2 1 2


1 2


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##### Table of Contents



NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




1 2




| |                          
| | -------------------------
| | 11% Senior Notes Due 2010





|   |                              
|-- | -----------------------------
|8. | COMMITMENTS AND CONTINGENCIES



| |                  
| | -----------------
| | Legal Proceedings

et al


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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




et al


et
al et
al et al et al et al et al


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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




et al. et al et al






| |   |                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The changes that Nextel and Sprint have announced they are
    planning to make with respect to branding after the close of the
    Sprint-Nextel merger would violate the joint venture agreement
    if we cannot use the same brand identity that Nextel will use
    after the merger, i.e., the Sprint brand.
|
| |  | Other operational changes that we believe Nextel and Sprint plan
    to implement after the Sprint-Nextel merger (including, without
    limitation, changes with respect to marketing and national
    accounts) would violate the joint venture agreement.                                                      
|
| |  | The operations of the combined Sprint-Nextel could violate our
    exclusivity rights under the joint venture agreement.                                                                                                                                                                                          
|
| |  | Nextel and Nextel WIP have not complied with their obligation to
    permit us to participate in and contribute to discussions
    regarding branding and a variety of other operational matters.                                                                                                                 





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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)








et al








|   |                           
|-- | --------------------------
|9. | RELATED PARTY TRANSACTIONS



| |                            
| | ---------------------------
| | Nextel Operating Agreements



23



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)












| |                      
| | ---------------------
| | Business Relationship





24



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NEXTEL PARTNERS, INC. AND SUBSIDIARIES


Notes to Consolidated Condensed Financial
Statements  (Continued)




|    |                     
|--- | --------------------
|10. | COMPREHENSIVE INCOME

|                                 |                                                                                                                     |                                                                                            |         |                |                     |   |        |        |   |   |         |         |     |   |        |        |   | 
|-------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------- | -------------- | ------------------- | - | ------ | ------ | - | - | ------- | ------- | --- | - | ------ | ------ | - | 
|                                 |                                                                                                                     | For the Three Months                                                                       |         |                | For the Nine Months |  
|                                 |                                                                                                                     | Ended September 30,                                                                        |         |                | Ended September 30, |  
|                                 |                                                                                                                     |                                                                                            |         |                |                     |  
|                                 |                                                                                                                     | 2005                                                                                       |         |                | 2004                |   |        | 2005   |   |   | 2004    |        
|                                 |                                                                                                                     |                                                                                            |         |                |                     |   |        |        |   |   |         |        
|                                 |                                                                                                                     |                                                                                            |         | (In thousands) |                     |   |       
|                                 | Net income attributable to common stockholders (as reported on
    Consolidated Condensed Statements of Operations) |                                                                                            | $       | 434,516        |                     |   | $      | 34,409 |   |   | $       | 562,933 |     |   | $      | 17,434 |  
|                                 |                                                                                                                     | Unrealized gain (loss) on investments, net of $5, $0, $5, $0
    tax, respectively         |         |                | (20                 | ) |        |        |  |   |         |         | 7   |   |        |        |  | 
|                                 |                                                                                                                     | Unrealized gain (loss) on cash flow hedge, net of $948, $0,
    $948, $0 tax, respectively |         |                | (320                | ) |        |        |  |   |         |         | 825 |   |        |        |  | 
|                                 |                                                                                                                     |                                                                                            |         |                |                     |   |        |        |   |   |         |        
|                                 | Other comprehensive income (loss)                                                                                   |                                                                                            |         | (340           | )                   |   |        |       |   |   |         | 832     |     |   |        |       |  
|Comprehensive income, net of tax |                                                                                                                     | $                                                                                          | 434,176 |                |                     | $ | 34,409 |        |   | $ | 563,765 |         |     | $ | 17,434 |       
|                                 |                                                                                                                     |                                                                                            |         |                |                     |   |        |        |   |   |         |        



|    |                    
|--- | -------------------
|11. | RECENT DEVELOPMENTS

1 2


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##### Table of Contents








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





Accounting for Leases, Accounting for Operating
Leases with Scheduled Rent Increases.


Overview








| |   |                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | digital cellular voice, including advanced calling features such
    as speakerphone, conference calling, voicemail, call forwarding
    and additional line service;                                                                                                                         
|
| |  | Direct Connect service, the digital walkie-talkie service that
    allows customers to instantly connect with business associates,
    family and friends without placing a phone call;                                                                                                       
|
| |  | short messaging, the service that utilizes the Internet to keep
    customers connected to clients, colleagues and family with text,
    numeric and two-way messaging; and                                                                                                                   
|
| |  | Nextel Online services, which provide customers with
    Internet-ready handsets access to the World Wide Web and an
    organizations internal database, as well as web-based
    applications such as e-mail, address books, calendars and
    advanced Java enabled business applications.

26



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##### Table of Contents













| |   |                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Growing our subscriber base approximately 27% in a twelve-month
    period by adding approximately 404,800 net new customers to
    end the third quarter of 2005 at 1,912,300 subscribers as
    compared to 1,507,500 as of September 30, 2004.
|
| |  | Growing our service revenues approximately 32% from
    $337.2 million for the prior years third quarter to
    $445.2 million for third quarter 2005.                                                                                          
|
| |  | Increasing Adjusted EBITDA by 55% from $102.4 million for
    the three months ended September 30, 2004 to
    $159.1 million for the three months ended
    September 30, 2005.                                                                 
|
| |  | Lowering our customer churn rate to 1.3% for the three months
    ended September 30, 2005 compared to 1.4% for the same
    period ended September 30, 2004.                                                                                    
|
| |  | Remaining one of the industry leaders in LRS with an LRS of
    $5,308 for the third quarter of 2005 compared to $4,857 for the
    third quarter of 2004.                                                                                       







| |   |                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |  | Introduced the i850 camera phone; the i760 handset with
    cutting-edge features; and the i560, a rugged flip-style handset.      
|
| |  | Opened 19 new company-owned stores bringing the total stores
    operating throughout the country to 110 at September 30,
    2005.

27



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##### Table of Contents



SELECTED CONSOLIDATED FINANCIAL DATA (Unaudited)




|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |           |         |   |           |         |         | 
|-------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ---------------------------------------- | ------- | ------------- | ----------------- | - | ------- | ------- | ------------- | - | --------- | --------- | ------- | - | --------- | ------- | ------- | 
|                                                         |                                                                                                              | For the                                  |         |               | For the           |  
|                                                         |                                                                                                              | Three Months Ended                       |         |               | Nine Months Ended |  
|                                                         |                                                                                                              | September 30,                            |         |               | September 30,     |  
|                                                         |                                                                                                              |                                          |         |               |                   |  
|                                                         |                                                                                                              | 2005                                     |         |               | 2004              |   |         | 2005    |               |   | 2004      |          
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|                                                         |                                                                                                              |                                          |         | (As restated) |                   |   |         |         | (As restated) |  
|                                                         |                                                                                                              | (In thousands, except per share amounts) |        
|Consolidated Statements of Operations Data:              |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |           |         |   |           |        
|Operating revenues:                                      |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |           |         |   |           |        
|                                                         | Service revenues(1)                                                                                          |                                          | $       | 445,235       |                   |   | $       | 337,152 |               |   | $         | 1,234,513 |         |   | $         | 936,646 |        
|                                                         | Equipment revenues(1)                                                                                        |                                          |         | 27,904        |                   |   |         | 22,676  |               |   |           | 77,532    |         |   |           | 65,954  |        
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Total revenues                                           |                                                                                                              |                                          | 473,139 |               |                   |   | 359,828 |         |               |   | 1,312,045 |           |         |   | 1,002,600 |        
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Operating expenses:                                      |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |           |         |   |           |        
|                                                         | Cost of service revenues (excludes depreciation of $34,981,
    $30,337, $101,174 and $89,614, respectively) |                                          |         | 115,600       |                   |   |         | 93,718  |               |   |           | 318,097   |         |   |           | 266,253 |        
|                                                         | Cost of equipment revenues(1)                                                                                |                                          |         | 47,093        |                   |   |         | 36,534  |               |   |           | 138,007   |         |   |           | 114,358 |        
|                                                         | Selling, general and administrative                                                                          |                                          |         | 151,380       |                   |   |         | 127,160 |               |   |           | 434,767   |         |   |           | 358,390 |        
|                                                         | Stock-based compensation (primarily selling, general and
    administrative related)                         |                                          |         | 319           |                   |   |         | (22     | )             |   |           | 567       |         |   |           | 532     |        
|                                                         | Depreciation and amortization                                                                                |                                          |         | 43,779        |                   |   |         | 37,311  |               |   |           | 125,965   |         |   |           | 110,510 |        
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Total operating expenses                                 |                                                                                                              |                                          | 358,171 |               |                   |   | 294,701 |         |               |   | 1,017,403 |           |         |   | 850,043   |        
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Income from operations                                   |                                                                                                              |                                          | 114,968 |               |                   |   | 65,127  |         |               |   | 294,642   |           |         |   | 152,557   |        
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Other income (expense):                                  |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |           |         |   |           |        
|                                                         | Interest expense, net                                                                                        |                                          |         | (23,404       | )                 |   |         | (23,460 | )             |   |           | (73,630   | )       |   |           | (81,708 | )      
|                                                         | Interest income                                                                                              |                                          |         | 2,009         |                   |   |         | 823     |               |   |           | 5,662     |         |   |           | 1,802   |        
|                                                         | Loss on early retirement of debt                                                                             |                                          |         |              |                   |   |         |        |               |   |           | (824      | )       |   |           | (54,971 | )      
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Total other income (expense)                             |                                                                                                              |                                          | (21,395 | )             |                   |   | (22,637 | )       |               |   | (68,792   | )         |         |   | (134,877  | )      
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Income before income tax provision                       |                                                                                                              |                                          | 93,573  |               |                   |   | 42,490  |         |               |   | 225,850   |           |         |   | 17,680    |        
|Income tax (provision) benefit                           |                                                                                                              |                                          | 340,943 |               |                   |   | (8,081  | )       |               |   | 337,083   |           |         |   | (246      | )      
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Net income attributable to common stockholders           |                                                                                                              | $                                        | 434,516 |               |                   | $ | 34,409  |         |               | $ | 562,933   |           |         | $ | 17,434    |        
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Net income per share attributable to common stockholders |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |           |         |   |           |        
|                                                         |                                                                                                              | Basic                                    |         | $             | 1.61              |   |         | $       | 0.13          |   |           | $         | 2.10    |   |           | $       | 0.07    | 
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|                                                         |                                                                                                              | Diluted                                  |         | $             | 1.41              |   |         | $       | 0.12          |   |           | $         | 1.83    |   |           | $       | 0.06    | 
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|Weighted average number of shares outstanding            |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |           |         |   |           |        
|                                                         |                                                                                                              | Basic                                    |         |               | 269,903           |   |         |         | 263,945       |   |           |           | 268,569 |   |           |         | 263,135 | 
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          
|                                                         |                                                                                                              | Diluted                                  |         |               | 308,649           |   |         |         | 304,833       |   |           |           | 309,439 |   |           |         | 269,974 | 
|                                                         |                                                                                                              |                                          |         |               |                   |   |         |         |               |   |           |          

28



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|                                                      |  |                |           |  |              |   |           | 
|----------------------------------------------------- |  | -------------- | --------- |  | ------------ | - | --------- | 
|                                                      |  | As of          |           |  | As of        |  
|                                                      |  | September 30,  |           |  | December 31, |  
|                                                      |  | 2005           |           |  | 2004         |  
|                                                      |  |                |           |  |              |  
|                                                      |  | (In thousands) |          
|Consolidated Balance Sheet Data:                      |  |                |           |  |              |   |           | 
|Cash and cash equivalents, and short-term investments |  | $              | 225,077   |  |              | $ | 264,579   | 
|Property, plant and equipment, net                    |  |                | 1,078,016 |  |              |   | 1,042,718 | 
|FCC operating licenses, net                           |  |                | 376,203   |  |              |   | 375,470   | 
|Total assets                                          |  | $              | 2,377,248 |  |              | $ | 1,975,699 | 
|Current liabilities                                   |  |                | 340,044   |  |              |   | 205,659   | 
|Long-term debt                                        |  |                | 1,339,226 |  |              |   | 1,632,518 | 
|Total stockholders equity                            |  |                | 660,782   |  |              |   | 51,315    | 
|Total liabilities and stockholders equity            |  | $              | 2,377,248 |  |              | $ | 1,975,699 | 

|                        |  |               |           |  |      |  |           | 
|----------------------- |  | ------------- | --------- |  | ---- |  | --------- | 
|                        |  | As of         |          
|                        |  | September 30, |          
|                        |  |               |          
|                        |  | 2005          |           |  | 2004 | 
|                        |  |               |           |  |      | 
|Other Data:             |  |               |           |  |      |  |           | 
|Covered Pops (millions) |  |               | 42        |  |      |  | 39        | 
|Subscribers             |  |               | 1,912,300 |  |      |  | 1,507,500 | 

|                                   |  |                    |         |               |                   |   |         |      |               |   |          |   |  |   |         |  
|---------------------------------- |  | ------------------ | ------- | ------------- | ----------------- | - | ------- | ---- | ------------- | - | -------- | - |  | - | ------- | -
|                                   |  | For the            |         |               | For the           |  
|                                   |  | Three Months Ended |         |               | Nine Months Ended |  
|                                   |  | September 30,      |         |               | September 30,     |  
|                                   |  |                    |         |               |                   |  
|                                   |  | 2005               |         |               | 2004              |   |         | 2005 |               |   | 2004     |  
|                                   |  |                    |         |               |                   |   |         |      |               |   |          |  
|                                   |  |                    |         | (As restated) |                   |   |         |      | (As restated) |  
|                                   |  | (In thousands)     |        
|Other Data:                        |  |                    |         |               |                   |   |         |      |               |   |          |   |  |   |         |  
|Statements of Cash Flows Data:     |  |                    |         |               |                   |   |         |      |               |   |          |   |  |   |         |  
|Net cash from operating activities |  | $                  | 27,205  |               |                   | $ | 50,872  |      |               | $ | 251,067  |   |  | $ | 131,718 |  
|Net cash from investing activities |  | $                  | (37,824 | )             |                   | $ | (71,334 | )    |               | $ | (106,218 | ) |  | $ | (76,173 | )
|Net cash from financing activities |  | $                  | 18,675  |               |                   | $ | 4,227   |      |               | $ | (96,658  | ) |  | $ | (56,220 | )
|Adjusted EBITDA(2)                 |  | $                  | 159,066 |               |                   | $ | 102,416 |      |               | $ | 421,174  |   |  | $ | 263,599 |  
|Net capital expenditures(3)        |  | $                  | 36,672  |               |                   | $ | 38,390  |      |               | $ | 155,539  |   |  | $ | 97,411  |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Effective July 1, 2003, we adopted EITF Issue
    No. 00-21, Accounting for Revenue Arrangements
    with Multiple Deliverables,and elected to apply the
    provisions prospectively to our existing customer arrangements.
    See discussion below for a more detailed description of the
    impact of our adoption of this policy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(2) | The term EBITDA refers to a financial measure that
    is defined as earnings (loss) before interest, taxes,
    depreciation and amortization; we use the term Adjusted
    EBITDA to reflect that our financial measure also excludes
    cumulative effect of change in accounting principle, loss from
    disposal of assets, gain (loss) from early retirement of debt
    and stock-based compensation. Adjusted EBITDA is commonly used
    to analyze companies on the basis of leverage and liquidity.
    However, Adjusted EBITDA is not a measure determined under
    generally accepted accounting principles, or GAAP, in the United
    States of America and may not be comparable to similarly titled
    measures reported by other companies. Adjusted EBITDA should not
    be construed as a substitute for operating income or as a better
    measure of liquidity than cash flow from operating activities,
    which are determined in accordance with GAAP. We have presented
    Adjusted EBITDA to provide additional information with respect
    to our ability to meet future debt service, capital expenditure
    and working capital requirements. The following schedule
    reconciles

29



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##### Table of Contents



| |                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Adjusted EBITDA to net cash from operating activities reported
    on our Consolidated Condensed Statements of Cash Flows, which we
    believe is the most directly comparable GAAP measure:

|                                                                                                        |  |                    |         |               |                   |   |         |      |               |   |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | ------------- | ----------------- | - | ------- | ---- | ------------- | - | ------- | - |  | - | ------- | -
|                                                                                                        |  | For the            |         |               | For the           |  
|                                                                                                        |  | Three Months Ended |         |               | Nine Months Ended |  
|                                                                                                        |  | September 30,      |         |               | September 30,     |  
|                                                                                                        |  |                    |         |               |                   |  
|                                                                                                        |  | 2005               |         |               | 2004              |   |         | 2005 |               |   | 2004)   |  
|                                                                                                        |  |                    |         |               |                   |   |         |      |               |   |         |  
|                                                                                                        |  |                    |         | (As restated) |                   |   |         |      | (As restated) |  
|                                                                                                        |  | (In thousands)     |        
|Net cash from operating activities (as reported on Consolidated
    Condensed Statements of Cash Flows) |  | $                  | 27,205  |               |                   | $ | 50,872  |      |               | $ | 251,067 |   |  | $ | 131,718 |  
|Adjustments to reconcile to Adjusted EBITDA:                                                            |  |                    |         |               |                   |   |         |      |               |   |         |   |  |   |         |  
|Cash paid interest expense, net of capitalized amount                                                   |  |                    | 26,003  |               |                   |   | 24,711  |      |               |   | 76,488  |   |  |   | 94,762  |  
|Interest income                                                                                         |  |                    | (2,009  | )             |                   |   | (823    | )    |               |   | (5,662  | ) |  |   | (1,802  | )
|Change in working capital and other                                                                     |  |                    | 107,867 |               |                   |   | 27,656  |      |               |   | 99,281  |   |  |   | 38,921  |  
|                                                                                                        |  |                    |         |               |                   |   |         |      |               |   |         |  
|Adjusted EBITDA                                                                                         |  | $                  | 159,066 |               |                   | $ | 102,416 |      |               | $ | 421,174 |   |  | $ | 263,599 |  
|                                                                                                        |  |                    |         |               |                   |   |         |      |               |   |         |  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Net capital expenditures exclude capitalized interest and are
    offset by net proceeds from the sale and leaseback transactions
    of telecommunication towers and related assets to third parties
    accounted for as operating leases. Net capital expenditures as
    defined are not a measure determined under GAAP in the United
    States of America and may not be comparable to similarly titled
    measures reported by other companies. Net capital expenditures
    should not be construed as a substitute for capital expenditures
    reported on the Consolidated Condensed Statements of Cash Flows,
    which is determined in accordance with GAAP. We report net
    capital expenditures in this manner because we believe it
    reflects the net cash used by us for capital expenditures and to
    satisfy the reporting requirements for our debt covenants. The
    following schedule reconciles net capital expenditures to
    capital expenditures reported on our Consolidated Condensed
    Statements of Cash Flows, which we believe is the most directly
    comparable GAAP measure:

|                                                                                                |  |                    |        |   |                   |   |        |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                                |  | For the            |        |   | For the           |  
|                                                                                                |  | Three Months Ended |        |   | Nine Months Ended |  
|                                                                                                |  | September 30,      |        |   | September 30,     |  
|                                                                                                |  |                    |        |   |                   |  
|                                                                                                |  | 2005               |        |   | 2004              |   |        | 2005 |  |   | 2004    |  
|                                                                                                |  |                    |        |   |                   |   |        |      |  |   |         |  
|                                                                                                |  | (In thousands)     |       
|Capital expenditures (as reported on Consolidated Condensed
    Statements of Cash Flows)       |  | $                  | 54,169 |   |                   | $ | 39,054 |      |  | $ | 192,492 |   |  | $ | 103,372 |  
|Less: cash paid portion of capitalized interest                                                 |  |                    | (444   | ) |                   |   | (318   | )    |  |   | (1,300  | ) |  |   | (824    | )
|Less: cash proceeds from sale and lease-back transactions
    accounted for as operating leases |  |                    | (8,610 | ) |                   |   | (432   | )    |  |   | (13,036 | ) |  |   | (1,211  | )
|Change in capital expenditures accrued or unpaid                                                |  |                    | (8,443 | ) |                   |   | 86     |      |  |   | (22,617 | ) |  |   | (3,926  | )
|                                                                                                |  |                    |        |   |                   |   |        |      |  |   |         |  
|Net capital expenditures                                                                        |  | $                  | 36,672 |   |                   | $ | 38,390 |      |  | $ | 155,539 |   |  | $ | 97,411  |  
|                                                                                                |  |                    |        |   |                   |   |        |      |  |   |         |  

Additional Reconciliations of Non-GAAP Financial Measures
(Unaudited)




30



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##### Table of Contents



ARPU  Average Revenue Per Unit




|                                                                                      |  |                             |         |   |                   |   |         |      |  |   |           |   |  |   |          |  
|------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ----------------- | - | ------- | ---- |  | - | --------- | - |  | - | -------- | -
|                                                                                      |  | For the                     |         |   | For the           |  
|                                                                                      |  | Three Months Ended          |         |   | Nine Months Ended |  
|                                                                                      |  | September 30,               |         |   | September 30,     |  
|                                                                                      |  |                             |         |   |                   |  
|                                                                                      |  | 2005                        |         |   | 2004              |   |         | 2005 |  |   | 2004      |  
|                                                                                      |  |                             |         |   |                   |   |         |      |  |   |           |  
|                                                                                      |  | (In thousands, except ARPU) |        
|ARPU (without roaming revenues)                                                       |  |                             |         |   |                   |   |         |      |  |   |           |   |  |   |          |  
|Service revenues (as reported on Consolidated Condensed
    Statements of Operations) |  | $                           | 445,235 |   |                   | $ | 337,152 |      |  | $ | 1,234,513 |   |  | $ | 936,646  |  
|Adjust: activation fees deferred and recognized for
    SAB No. 101                   |  |                             | (444    | ) |                   |   | (913    | )    |  |   | (1,709    | ) |  |   | (2,937   | )
|Add: activation fees reclassed for EITF No. 00-21(1)                                  |  |                             | 6,220   |   |                   |   | 3,054   |      |  |   | 14,548    |   |  |   | 8,190    |  
|Less: roaming and other revenues                                                      |  |                             | (64,667 | ) |                   |   | (43,327 | )    |  |   | (170,889  | ) |  |   | (114,993 | )
|                                                                                      |  |                             |         |   |                   |   |         |      |  |   |           |  
|Service revenue for ARPU                                                              |  | $                           | 386,344 |   |                   | $ | 295,966 |      |  | $ | 1,076,463 |   |  | $ | 826,906  |  
|                                                                                      |  |                             |         |   |                   |   |         |      |  |   |           |  
|Average units (subscribers)                                                           |  |                             | 1,862   |   |                   |   | 1,458   |      |  |   | 1,757     |   |  |   | 1,364    |  
|                                                                                      |  |                             |         |   |                   |   |         |      |  |   |           |  
|ARPU                                                                                  |  | $                           | 69      |   |                   | $ | 68      |      |  | $ | 68        |   |  | $ | 67       |  
|                                                                                      |  |                             |         |   |                   |   |         |      |  |   |           |  

|                                                                                     |  |                             |         |   |                   |   |         |      |  |   |           |   |  |   |         |  
|------------------------------------------------------------------------------------ |  | --------------------------- | ------- | - | ----------------- | - | ------- | ---- |  | - | --------- | - |  | - | ------- | -
|                                                                                     |  | For the                     |         |   | For the           |  
|                                                                                     |  | Three Months Ended          |         |   | Nine Months Ended |  
|                                                                                     |  | September 30,               |         |   | September 30,     |  
|                                                                                     |  |                             |         |   |                   |  
|                                                                                     |  | 2005                        |         |   | 2004              |   |         | 2005 |  |   | 2004      |  
|                                                                                     |  |                             |         |   |                   |   |         |      |  |   |           |  
|                                                                                     |  | (In thousands, except ARPU) |        
|ARPU (including roaming revenues)                                                    |  |                             |         |   |                   |   |         |      |  |   |           |   |  |   |         |  
|Service revenues (as reported on Consolidated Condensed
    Statements of Operations |  | $                           | 445,235 |   |                   | $ | 337,152 |      |  | $ | 1,234,513 |   |  | $ | 936,646 |  
|Adjust: activation fees deferred and recognized for
    SAB No. 101                  |  |                             | (444    | ) |                   |   | (913    | )    |  |   | (1,709    | ) |  |   | (2,937  | )
|Add: activation fees reclassed for EITF No. 00-21(1)                                 |  |                             | 6,220   |   |                   |   | 3,054   |      |  |   | 14,548    |   |  |   | 8,190   |  
|Less: other revenues                                                                 |  |                             | (6,858  | ) |                   |   | (588    | )    |  |   | (17,497   | ) |  |   | (1,678  | )
|                                                                                     |  |                             |         |   |                   |   |         |      |  |   |           |  
|Service revenue for ARPU                                                             |  | $                           | 444,153 |   |                   | $ | 338,705 |      |  | $ | 1,229,855 |   |  | $ | 940,221 |  
|                                                                                     |  |                             |         |   |                   |   |         |      |  |   |           |  
|Average units (subscribers)                                                          |  |                             | 1,862   |   |                   |   | 1,458   |      |  |   | 1,757     |   |  |   | 1,364   |  
|                                                                                     |  |                             |         |   |                   |   |         |      |  |   |           |  
|ARPU                                                                                 |  | $                           | 80      |   |                   | $ | 77      |      |  | $ | 78        |   |  | $ | 77      |  
|                                                                                     |  |                             |         |   |                   |   |         |      |  |   |           |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Since implementation of EITF Issue No. 00-21,
    Accounting for Revenue Arrangements with Multiple
    Deliverables,each month we recognize the activation
    fees, handset equipment revenues and equipment costs that had
    been previously deferred in accordance with Staff Accounting
    Bulletin, or SAB, No. 101. Based on EITF Issue
    No. 00-21, we now recognize the activation fees that were
    formerly deferred and recognized as services revenues as
    equipment revenues.

31



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##### Table of Contents



LRS  Lifetime Revenue Per Subscriber




|                                      |  |                    |       |   |      |   |       |  
|------------------------------------- |  | ------------------ | ----- | - | ---- | - | ----- | -
|                                      |  | For the            |      
|                                      |  | Three Months Ended |      
|                                      |  | September 30,      |      
|                                      |  |                    |      
|                                      |  | 2005               |       |   | 2004 |  
|                                      |  |                    |       |   |      |  
|ARPU                                  |  | $                  | 69    |   |      | $ | 68    |  
|Divided by: churn                     |  |                    | 1.3   | % |      |   | 1.4   | %
|                                      |  |                    |       |   |      |  
|Lifetime revenue per subscriber (LRS) |  | $                  | 5,308 |   |      | $ | 4,857 |  
|                                      |  |                    |       |   |      |  



RESULTS OF OPERATIONS




| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Three Months Ended September 30, 2005 Compared to
    Three Months Ended September 30, 2004



| |         
| | --------
| | Revenues





32



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##### Table of Contents





|                             |  |                                     |         |  |              |  |              |               |  |   |              |  |  |              |     |   |          |   |         |  |  |  |    |  
|---------------------------- |  | ----------------------------------- | ------- |  | ------------ |  | ------------ | ------------- |  | - | ------------ |  |  | ------------ | --- | - | -------- | - | ------- |  |  |  | -- | -
|                             |  | For the                             |         |  |              |  | For the      |               |  |   |              |  |  |             
|                             |  | Three Months                        |         |  |              |  | Three Months |               |  |   |              | 
|                             |  | Ended                               |         |  | % of         |  |              | Ended         |  |   | % of         |  |  | 2005 vs 2004 |    
|                             |  | September 30,                       |         |  | Consolidated |  |              | September 30, |  |   | Consolidated |  |  |              |    
|                             |  | 2005                                |         |  | Revenues     |  |              | 2004          |  |   | Revenues     |  |  | $ Change     |     |   | % Change |  
|                             |  |                                     |         |  |              |  |              |               |  |   |              |  |  |              |     |   |          |  
|                             |  | (Dollars in thousands, expect ARPU) |        
|Service and roaming revenues |  | $                                   | 445,235 |  |              |  | 94           | %             |  | $ | 337,152      |  |  |              | 94  | % |          | $ | 108,083 |  |  |  | 32 | %
|Equipment revenues           |  |                                     | 27,904  |  |              |  | 6            | %             |  |   | 22,676       |  |  |              | 6   | % |          |   | 5,228   |  |  |  | 23 | %
|                             |  |                                     |         |  |              |  |              |               |  |   |              |  |  |              |     |   |          |  
|Total revenues               |  | $                                   | 473,139 |  |              |  | 100          | %             |  | $ | 359,828      |  |  |              | 100 | % |          | $ | 113,311 |  |  |  | 31 | %
|                             |  |                                     |         |  |              |  |              |               |  |   |              |  |  |              |     |   |          |  
|ARPU(1)                      |  | $                                   | 69      |  |              |  |              |               |  | $ | 68           |  |  |              |     |   |          |   |         |  |  |  |    |  
|                             |  |                                     |         |  |              |  |              |               |  |   |              |  |  |              |     |   |          |  






|    |                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See  Selected Consolidated Financial
    Data  Additional Reconciliations of Non-GAAP
    Financial Measures (Unaudited) for more information
    regarding our use of ARPU as a non-GAAP financial measure.



33



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##### Table of Contents



Accounting for Revenue
Arrangements with Multiple Deliverables,


|                                                                                                |  |                    |         |   |      |   |         |  
|----------------------------------------------------------------------------------------------- |  | ------------------ | ------- | - | ---- | - | ------- | -
|                                                                                                |  | For the            |        
|                                                                                                |  | Three Months Ended |        
|                                                                                                |  | September 30,      |        
|                                                                                                |  |                    |        
|                                                                                                |  | 2005               |         |   | 2004 |  
|                                                                                                |  |                    |         |   |      |  
|                                                                                                |  | (In thousands)     |        
|Revenues:                                                                                       |  |                    |         |   |      |   |         |  
|Service revenues (as reported on Consolidated Condensed
    Statements of Operations)           |  | $                  | 445,235 |   |      | $ | 337,152 |  
|Previously deferred activation fees recognized
    (SAB No. 101)                                |  |                    | (444    | ) |      |   | (913    | )
|Activation fees to equipment revenues (EITF No. 00-21)                                          |  |                    | 6,220   |   |      |   | 3,054   |  
|                                                                                                |  |                    |         |   |      |  
|Total service revenues without SAB No. 101 and EITF
    No. 00-21                               |  | $                  | 451,011 |   |      | $ | 339,293 |  
|                                                                                                |  |                    |         |   |      |  
|Equipment revenues (as reported on Consolidated Condensed
    Statements of Operations)         |  | $                  | 27,904  |   |      | $ | 22,676  |  
|Previously deferred equipment revenues recognized
    (SAB No. 101)                             |  |                    | (2,567  | ) |      |   | (4,878  | )
|Activation fees from service revenues (EITF No. 00-21)                                          |  |                    | (6,220  | ) |      |   | (3,054  | )
|                                                                                                |  |                    |         |   |      |  
|Total equipment revenues without SAB No. 101 and
    EITF No. 00-21                             |  | $                  | 19,117  |   |      | $ | 14,744  |  
|                                                                                                |  |                    |         |   |      |  
|Cost of equipment revenues (as reported on Consolidated
    Condensed Statements of Operations) |  | $                  | 47,093  |   |      | $ | 36,534  |  
|Previously deferred cost of equipment revenues recognized
    (SAB No. 101)                     |  |                    | (3,011  | ) |      |   | (5,791  | )
|                                                                                                |  |                    |         |   |      |  
|Total cost of equipment revenues without
    SAB No. 101 and EITF No. 00-21                     |  | $                  | 44,082  |   |      | $ | 30,743  |  
|                                                                                                |  |                    |         |   |      |  





| |                         
| | ------------------------
| | Cost of Service Revenues





34



---



##### Table of Contents









| |                           
| | --------------------------
| | Cost of Equipment Revenues





|                                  |  |                    |         |   |      |   |         |  
|--------------------------------- |  | ------------------ | ------- | - | ---- | - | ------- | -
|                                  |  | For the            |        
|                                  |  | Three Months Ended |        
|                                  |  | September 30,      |        
|                                  |  |                    |        
|                                  |  | 2005               |         |   | 2004 |  
|                                  |  |                    |         |   |      |  
|                                  |  | (In thousands)     |        
|Equipment revenues billed         |  | $                  | 19,117  |   |      | $ | 14,744  |  
|Cost of equipment revenues billed |  |                    | (44,082 | ) |      |   | (30,743 | )
|                                  |  |                    |         |   |      |  
|Total gross subsidy for equipment |  | $                  | (24,965 | ) |      | $ | (15,999 | )
|                                  |  |                    |         |   |      |  



| |                                             
| | --------------------------------------------
| | Selling, General and Administrative Expenses







| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $3.5 million increase in commissions, commission bonuses
    and residuals paid to account representatives and the indirect
    sales channel;               
|
| |  | $0.7 million increase in facility and lease costs primarily
    for the additional retail stores put in operation in the third
    quarter of 2005; offset by

35



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##### Table of Contents





| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | $0.6 million decrease in advertising and media expenses,
    which we expect to spend in the fourth quarter.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $13.6 million increase in expenses for service and repair,
    billing, collection and customer retention expenses, including
    handset upgrades to support a larger and growing customer
    base; and                                                                                                                                                                                                                                                                                     
|
| |  | $7.0 million increase in support of our information
    systems, facilities and corporate expenses, including
    approximately $0.8 million in expenses incurred in
    conjunction with the put process and legal proceedings with
    Sprint Nextel and Nextel WIP (see our Annual Report on
    Form 10-K for the year ended December 31, 2004,
    Note 8 to the accompanying consolidated condensed financial
    statements, and Part II, Item 1 below for additional
    information).





| |                                 
| | --------------------------------
| | Stock-Based Compensation Expense





| |                                      
| | -------------------------------------
| | Depreciation and Amortization Expense





| |                                     
| | ------------------------------------
| | Interest Expense and Interest Income





36



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##### Table of Contents





| |                               
| | ------------------------------
| | Income Tax (Provision) Benefit







| |                                               
| | ----------------------------------------------
| | Net Income Attributable to Common Stockholders





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Nine Months Ended September 30, 2005 Compared to Nine
    Months Ended September 30, 2004



| |         
| | --------
| | Revenues





|                             |  |                                     |           |  |              |  |             |               |  |   |              |  |  |              |     |   |          |   |         |  |  |  |    |  
|---------------------------- |  | ----------------------------------- | --------- |  | ------------ |  | ----------- | ------------- |  | - | ------------ |  |  | ------------ | --- | - | -------- | - | ------- |  |  |  | -- | -
|                             |  | For the                             |           |  |              |  | For the     |               |  |   |              |  |  |             
|                             |  | Nine Months                         |           |  |              |  | Nine Months |               |  |   |              | 
|                             |  | Ended                               |           |  | % of         |  |             | Ended         |  |   | % of         |  |  | 2005 vs 2004 |    
|                             |  | September 30,                       |           |  | Consolidated |  |             | September 30, |  |   | Consolidated |  |  |              |    
|                             |  | 2005                                |           |  | Revenues     |  |             | 2004          |  |   | Revenues     |  |  | $ Change     |     |   | % Change |  
|                             |  |                                     |           |  |              |  |             |               |  |   |              |  |  |              |     |   |          |  
|                             |  | (Dollars in thousands, expect ARPU) |          
|Service and roaming revenues |  | $                                   | 1,234,513 |  |              |  | 94          | %             |  | $ | 936,646      |  |  |              | 93  | % |          | $ | 297,867 |  |  |  | 32 | %
|Equipment revenues           |  |                                     | 77,532    |  |              |  | 6           | %             |  |   | 65,954       |  |  |              | 7   | % |          |   | 11,578  |  |  |  | 18 | %
|                             |  |                                     |           |  |              |  |             |               |  |   |              |  |  |              |     |   |          |  
|Total revenues               |  | $                                   | 1,312,045 |  |              |  | 100         | %             |  | $ | 1,002,600    |  |  |              | 100 | % |          | $ | 309,445 |  |  |  | 31 | %
|                             |  |                                     |           |  |              |  |             |               |  |   |              |  |  |              |     |   |          |  
|ARPU(1)                      |  | $                                   | 68        |  |              |  |             |               |  | $ | 67           |  |  |              |     |   |          |   |         |  |  |  |    |  
|                             |  |                                     |           |  |              |  |             |               |  |   |              |  |  |              |     |   |          |  






|    |                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See  Selected Consolidated Financial
    Data  Additional Reconciliations of Non-GAAP
    Financial Measures (Unaudited) for more information
    regarding our use of ARPU as a non-GAAP financial measure.



37



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|                                                                                                |  |                   |           |   |      |   |         |  
|----------------------------------------------------------------------------------------------- |  | ----------------- | --------- | - | ---- | - | ------- | -
|                                                                                                |  | For the           |          
|                                                                                                |  | Nine Months Ended |          
|                                                                                                |  | September 30,     |          
|                                                                                                |  |                   |          
|                                                                                                |  | 2005              |           |   | 2004 |  
|                                                                                                |  |                   |           |   |      |  
|                                                                                                |  | (In thousands)    |          
|Revenues:                                                                                       |  |                   |           |   |      |   |         |  
|Service revenues (as reported on Consolidated Condensed
    Statements of Operations)           |  | $                 | 1,234,513 |   |      | $ | 936,646 |  
|Previously deferred activation fees recognized
    (SAB No. 101)                                |  |                   | (1,709    | ) |      |   | (2,937  | )
|Activation fees to equipment revenues (EITF No. 00-21)                                          |  |                   | 14,548    |   |      |   | 8,190   |  
|                                                                                                |  |                   |           |   |      |  
|Total service revenues without SAB No. 101 and EITF
    No. 00-21                               |  | $                 | 1,247,352 |   |      | $ | 941,899 |  
|                                                                                                |  |                   |           |   |      |  
|Equipment revenues (as reported on Consolidated Condensed
    Statements of Operations)         |  | $                 | 77,532    |   |      | $ | 65,954  |  
|Previously deferred equipment revenues recognized
    (SAB No. 101)                             |  |                   | (9,526    | ) |      |   | (15,858 | )
|Activation fees from service revenues (EITF No. 00-21)                                          |  |                   | (14,548   | ) |      |   | (8,190  | )
|                                                                                                |  |                   |           |   |      |  
|Total equipment revenues without SAB No. 101 and
    EITF No. 00-21                             |  | $                 | 53,458    |   |      | $ | 41,906  |  
|                                                                                                |  |                   |           |   |      |  
|Cost of equipment revenues (as reported on Consolidated
    Condensed Statements of Operations) |  | $                 | 138,007   |   |      | $ | 114,358 |  
|Previously deferred cost of equipment revenues recognized
    (SAB No. 101)                     |  |                   | (11,235   | ) |      |   | (18,795 | )
|                                                                                                |  |                   |           |   |      |  
|Total cost of equipment revenues without
    SAB No. 101 and EITF No. 00-21                     |  | $                 | 126,772   |   |      | $ | 95,563  |  
|                                                                                                |  |                   |           |   |      |  





| |                         
| | ------------------------
| | Cost of Service Revenues



38



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##### Table of Contents





| |                           
| | --------------------------
| | Cost of Equipment Revenues





|                                  |  |                   |          |   |      |   |         |  
|--------------------------------- |  | ----------------- | -------- | - | ---- | - | ------- | -
|                                  |  | For the           |         
|                                  |  | Nine Months Ended |         
|                                  |  | September 30,     |         
|                                  |  |                   |         
|                                  |  | 2005              |          |   | 2004 |  
|                                  |  |                   |          |   |      |  
|                                  |  | (In thousands)    |         
|Equipment revenues billed         |  | $                 | 53,458   |   |      | $ | 41,906  |  
|Cost of equipment revenues billed |  |                   | (126,772 | ) |      |   | (95,563 | )
|                                  |  |                   |          |   |      |  
|Total gross subsidy for equipment |  | $                 | (73,314  | ) |      | $ | (53,657 | )
|                                  |  |                   |          |   |      |  



| |                                             
| | --------------------------------------------
| | Selling, General and Administrative Expenses





| |                                 
| | --------------------------------
| | Stock-Based Compensation Expense





| |                                      
| | -------------------------------------
| | Depreciation and Amortization Expense





| |                                     
| | ------------------------------------
| | Interest Expense and Interest Income



39



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##### Table of Contents







| |                                 
| | --------------------------------
| | Loss on Early Retirement of Debt





| |                               
| | ------------------------------
| | Income Tax (Provision) Benefit







| |                                               
| | ----------------------------------------------
| | Net Income Attributable to Common Stockholders



Liquidity and Capital Resources




40



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| |                                   
| | ----------------------------------
| | Statement of Cash Flows Discussion

|                                   |  |                        |          |   |      |   |         |          |  |   |          |   |  |  |    |  
|---------------------------------- |  | ---------------------- | -------- | - | ---- | - | ------- | -------- |  | - | -------- | - |  |  | -- | -
|                                   |  | For the                |          |   |      |   |        
|                                   |  | Nine Months Ended      |          |   |      |   |        
|                                   |  | September 30,          |          |   |      |   |        
|                                   |  |                        |          |   |      |   |        
|                                   |  | 2005                   |          |   | 2004 |   |         | $ Change |  |   | % Change |  
|                                   |  |                        |          |   |      |   |         |          |  |   |          |  
|                                   |  | (Dollars in thousands) |         
|Net cash from operating activities |  | $                      | 251,067  |   |      | $ | 131,718 |          |  | $ | 119,349  |   |  |  | 91 | %
|Net cash from investing activities |  | $                      | (106,218 | ) |      | $ | (76,173 | )        |  | $ | (30,045  | ) |  |  | 39 | %
|Net cash from financing activities |  | $                      | (96,658  | ) |      | $ | (56,220 | )        |  | $ | (40,438  | ) |  |  | 72 | %





| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a $165.3 million increase in income generated from
    operating activities, excluding changes in current assets and
    liabilities; and             
|
| |  | a $13.9 million increase in accounts payable and other
    current liabilities and advances to Nextel WIP due to the timing
    of payments; offset by
|
| |  | a $33.4 million increase in our on-hand subscriber
    equipment inventory and other current assets; and                                              
|
| |  | a $26.4 million increase in our accounts receivable balance
    from customers due to the growth in number of subscribers.                            





| |   |                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a $89.1 million increase in capital expenditures; offset by                                                                                                                          
|
| |  | a $1.4 million decrease in FCC licenses acquired and other
    investing activities; and                                                                                             
|
| |  | a $310.7 million decrease in purchases of short-term
    investments offset by a $253.0 million decrease in cash
    proceeds from the sale and maturities of short-term investments.





| |   |                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a $499.0 million decrease in proceeds from refinancing the
    credit facility and issuing $25.0 million of
    81/8% senior
    notes due 2011 in May 2004; offset by                                                                   
|
| |  | a $32.5 million increase in proceeds from stock options
    exercised and employee purchases of stock;                                                                                                                                   
|
| |  | a $11.8 million increase in proceeds from sale lease-back
    transactions;                                                                                                                                                              
|
| |  | a $412.0 million increase from cash used in 2004 for
    redemption of the remainder of our outstanding 14% senior
    discount notes due 2009 and repurchase for cash in open-market
    purchases of our 11% senior notes due 2010; and
|
| |  | a $2.2 million decrease in debt and equity issuance costs
    and other financing activities.                                                                                                                                            



| |                                  
| | ---------------------------------
| | Capital Needs and Funding Sources



41



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|                              |  |                        |         |  |      |   |         |      |  |   |         |  |  |      |         |  |            |   |         |       |  |   |           |  |  |   |           | 
|----------------------------- |  | ---------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- |  |  | ---- | ------- |  | ---------- | - | ------- | ----- |  | - | --------- |  |  | - | --------- | 
|                              |  | Payments Due by Period |        
|                              |  |                        |        
|                              |  | Remainder              |         |  |     
|Contractual Obligations       |  | of 2005                |         |  | 2006 |   |         | 2007 |  |   | 2008    |  |  | 2009 |         |  | Thereafter |   |         | Total | 
|                              |  |                        |         |  |      |   |         |      |  |   |         |  |  |      |         |  |            |   |         |       | 
|                              |  | (In thousands)         |        
|Long-term debt                |  | $                      | 146,250 |  |      | $ |        |      |  | $ | 4,125   |  |  | $    | 305,455 |  |            | $ | 5,500   |       |  | $ | 1,009,875 |  |  | $ | 1,471,205 | 
|Interest on long-term debt(1) |  |                        | 18,593  |  |      |   | 73,735  |      |  |   | 75,129  |  |  |      | 76,253  |  |            |   | 72,172  |       |  |   | 148,685   |  |  |   | 464,567   | 
|Operating leases              |  |                        | 25,263  |  |      |   | 93,292  |      |  |   | 79,189  |  |  |      | 67,960  |  |            |   | 56,975  |       |  |   | 76,300    |  |  |   | 398,979   | 
|Capital lease obligations(2)  |  |                        | 1,307   |  |      |   | 5,227   |      |  |   | 5,227   |  |  |      | 5,227   |  |            |   | 5,227   |       |  |   |          |  |  |   | 22,215    | 
|Purchase obligations(3)       |  |                        | 500     |  |      |   | 292     |      |  |   |        |  |  |      |        |  |            |   |        |       |  |   |          |  |  |   | 792       | 
|                              |  |                        |         |  |      |   |         |      |  |   |         |  |  |      |         |  |            |   |         |       | 
|Total contractual obligations |  | $                      | 191,913 |  |      | $ | 172,546 |      |  | $ | 163,670 |  |  | $    | 454,895 |  |            | $ | 139,874 |       |  | $ | 1,234,860 |  |  | $ | 2,357,758 | 
|                              |  |                        |         |  |      |   |         |      |  |   |         |  |  |      |         |  |            |   |         |       | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes interest on swaps of approximately ($389,000) and
    ($714,000) for the remainder of 2005 and 2006, respectively.
    These amounts include estimated payments based on
    managements expectation as to future interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(2) | Includes interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | Included in the Purchase obligations caption above
    are minimum amounts due under our most significant agreements
    for telecommunication services required for back-office support.
    Amounts actually paid under some of these agreements may be
    higher due to variable components of these agreements. In
    addition to the amounts reflected in the table, we expect to pay
    significant amounts to Motorola for infrastructure, handsets and
    related services in future years. Potential amounts payable to
    Motorola are not shown above due to the uncertainty surrounding
    the timing and extent of these payments. See notes to the
    consolidated condensed financial statements appearing elsewhere
    in this Quarterly Report on Form 10-Q and notes to the
    consolidated financial statements in our Annual Report on
    Form 10-K for the year ended December 31, 2004 for
    amounts paid to Motorola.

42



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| |                   
| | ------------------
| | Sources of Funding







1 2






Off-Balance Sheet Arrangements






Critical Accounting Policies




43



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| |                                 
| | --------------------------------
| | Income Taxes Valuation Allowance







Recently Issued Accounting Pronouncements




Related Party Transactions




44



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##### Table of Contents



RISK FACTORS


The following risk factors and other information included in
this Quarterly Report on Form 10-Q should be carefully
considered. The risks and uncertainties described below are not
the only ones we face. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial also
may impair our business operations. Please see our Annual Report
on Form 10-K for the year ended December 31, 2004 for
a detailed description of additional risks and uncertainties
that we face. If any of those risks were to occur, our business,
operating results and financial condition could be seriously
harmed.


Our company faces uncertainty in connection with the
Sprint-Nextel merger.










FORWARD-LOOKING STATEMENTS




45



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our business plan, its advantages and our strategy for
    implementing our plan;                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | the success of efforts to improve and enhance, and
    satisfactorily address any issues relating to, our network
    performance;                                                                                                                                                                                                                                                                                                                                 
|
| |  | the characteristics of the geographic areas and occupational
    markets that we are targeting in our portion of the Nextel
    Digital Wireless Network;                                                                                                                                                                                                                                                                                                          
|
| |  | the implementation and performance of the technology, including
    higher speed data infrastructure and software designed to
    significantly increase the speed of our network, being deployed
    or to be deployed in our various markets, including the expected
    6:1 voice coder software upgrade being developed by Motorola and
    technologies to be implemented in connection with the completed
    launch of Nationwide Direct Connect capability;
|
| |  | our ability to attract and retain customers;                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | our anticipated capital expenditures, funding requirements and
    contractual obligations, including our ability to access
    sufficient debt or equity capital to meet operating and
    financing needs;                                                                                                                                                                                                                                                       
|
| |  | the availability of adequate quantities of system infrastructure
    and subscriber equipment and components to meet our service
    deployment, marketing plans and customer demand;                                                                                                                                                                                                                                                                              
|
| |  | no significant adverse change in Motorolas ability or
    willingness to provide handsets and related equipment and
    software applications or to develop new technologies or features
    for us, or in our relationship with it;                                                                                                                                                                                                                              
|
| |  | our ability to achieve and maintain market penetration and
    average subscriber revenue levels;                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | our ability to successfully scale, in some circumstances in
    conjunction with third parties under our outsourcing
    arrangements, our billing, collection, customer care and similar
    back-office operations to keep pace with customer growth,
    increased system usage rates and growth in levels of accounts
    receivables being generated by our customers;                                                                                        
|
| |  | the development and availability of new handsets with expanded
    applications and features, including those that operate using
    the 6:1 voice coder, and market acceptance of such handsets and
    service offerings;                                                                                                                                                                                                                                        
|
| |  | the availability and cost of acquiring additional spectrum;                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | the quality and price of similar or comparable wireless
    communications services offered or to be offered by our
    competitors, including providers of PCS and cellular services
    including, for example, two-way walkie-talkie services that have
    been introduced by several of our competitors;                                                                                                                                                      
|
| |  | future legislation or regulatory actions relating to specialized
    mobile radio services, other wireless communications services or
    telecommunications services generally;                                                                                                                                                                                                                                                                                   
|
| |  | the potential impact on us of the reconfiguration of the
    800 MHz band required by the recent rebanding orders issued
    to Nextel;                                                                                                                                                                                                                                                                                                                            
|
| |  | delivery and successful implementation of any new technologies
    deployed in connection with any future enhanced iDEN or next
    generation or other advanced services we may offer; and                                                                                                                                                                                                                                                                        
|
| |  | the costs of compliance with regulatory mandates, particularly
    the requirement to deploy location-based 911 capabilities and
    wireless number portability.                                                                                                                                                                                                                                                                                                  

46



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|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk



1 2 1 8 1 2




Accounting for Derivative
Instruments and Hedging Activities,


Non-Cash Flow Hedging Instruments






Cash Flow Hedging Instruments






47



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|                            |                       |                        |   |                |      |   |   |      |     |   |      |       |     |      |   |         |            |   |   |       |     |   |            |         |     |   |   |         |     |   |   |           |  | 
|--------------------------- | --------------------- | ---------------------- | - | -------------- | ---- | - | - | ---- | --- | - | ---- | ----- | --- | ---- | - | ------- | ---------- | - | - | ----- | --- | - | ---------- | ------- | --- | - | - | ------- | --- | - | - | --------- |  | 
|                            |                       | Remainder              |   |                |      |   |   |      |     |   |      |       |     |      |   |         |           
|                            |                       | of 2005                |   |                | 2006 |   |   | 2007 |     |   | 2008 |       |     | 2009 |   |         | Thereafter |   |   | Total |     |   | Fair Value |        
|                            |                       |                        |   |                |      |   |   |      |     |   |      |       |     |      |   |         |            |   |   |       |     |   |            |        
|                            |                       | (Dollars in thousands) |  
|Long-term debt obligations: |                       |                        |   |                |      |   |   |      |     |   |      |       |     |      |   |         |            |   |   |       |     |   |            |         |     |   |   |         |     |   |   |          
|                            | Fixed-rate debt       |                        | $ | 146,250        |      |   | $ |     |     |   | $    |      |     |      | $ | 299,955 |            |   | $ |      |     |   | $          | 475,000 |     |   | $ | 921,205 |     |   | $ | 1,491,821 | 
|                            |                       | Average interest rate  |   |                | 6.2  | % |   |      | 5.6 | % |      |       | 5.6 | %    |   |         | 5.8        | % |   |       | 8.1 | % |            |         | 8.1 | % |   |         | 6.5 | % |   |           |  | 
|                            | Variable-rate debt(1) |                        | $ |               |      |   | $ |     |     |   | $    | 4,125 |     |      | $ | 5,500   |            |   | $ | 5,500 |     |   | $          | 534,875 |     |   | $ | 550,000 |     |   | $ | 550,000   | 
|                            |                       | Average interest rate  |   | (LIBOR + 1.5%) |      |   |   |      |     |   |      |       |     |      |   |         |            |   |   |       |     |   |            |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of September 30, 2005, variable-rate debt consisted of
    our bank credit facility. The bank credit facility includes a
    $550.0 million tranche D term loan, a
    $100.0 million revolving credit facility and an option to
    request an additional $200.0 million of incremental term
    loans. The tranche D term loan bears interest, at our
    option, at the administrative agents alternate base rate
    or reserve-adjusted LIBOR plus, in each case, applicable margin.
    The initial applicable margin for the tranche D term loan
    is 1.50% over LIBOR and 0.50% over the base rate. For the
    revolving credit facility, the initial applicable margin is
    3.00% over LIBOR and 2.00% over the base rate and thereafter
    will be determined on the basis of the ratio of total debt to
    annualized EBITDA and will range between 1.50% and 3.00% over
    LIBOR and between 0.50% and 2.00% over the base rate. As of
    September 30, 2005, the average interest rate on the
    tranche D term loan was 5.37%.



|                     |                                           |                        |   |     |      |  |   |         |   |      |   |      |  |            |   |       |            |  |       |            |  |           |   |   |  |  |   |         |  |  |   |       |  |  |   |   | 
|-------------------- | ----------------------------------------- | ---------------------- | - | --- | ---- |  | - | ------- | - | ---- | - | ---- |  | ---------- | - | ----- | ---------- |  | ----- | ---------- |  | --------- | - | - |  |  | - | ------- |  |  | - | ----- |  |  | - | - | 
|                     |                                           | Remainder              |   |     |      |  |   |         |   |      |   |      |  |            |   |       | Fair Value |  |       | Fair Value
|                     |                                           | of 2005                |   |     | 2006 |  |   | 2007    |   | 2008 |   | 2009 |  | Thereafter |   | Total |            |  | Asset |            |  | Liability
|                     |                                           |                        |   |     |      |  |   |         |   |      |   |      |  |            |   |       |            |  |       |            |  |          
|                     |                                           | (Dollars in thousands)
|Interest rate swaps: |                                           |                        |   |     |      |  |   |         |   |      |   |      |  |            |   |       |            |  |       |            |  |           |   |   |  |  |   |         |  |  |   |       |  |  |   |  
|                     | Notional amount(1)                        |                        | $ |    |      |  | $ | 200,000 |   |      | $ |     |  |            | $ |      |            |  | $     |           |  |           | $ |  |  |  | $ | 200,000 |  |  | $ | 1,776 |  |  | $ |  | 
|                     | Weighted-average fixed rate payable(2)    |                        |   | 3.2 | %    |  |   | 3.6     | % |      |   |     |  |            |   |      |            |  |       |           |  |           |   |  |  |  |   |         |  |  |   |       |  |  |   |   | 
|                     | Weighted-average fixed rate receivable(3) |                        |   |    |      |  |   |        |   |      |   |     |  |            |   |      |            |  |       |           |  |           |   |  |  |  |   |         |  |  |   |       |  |  |   |   | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes notional amounts of $200.0 million that will
    expire in August 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(2) | Represents the weighted-average fixed rate based on the contract
    notional amount as a percentage of total notional amounts in a
    given year.                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(3) | The initial applicable margin for the tranche D term loan
    is 1.50% over LIBOR and 0.50% over the base rate. For the
    revolving credit facility, the applicable margin is 3.00% over
    LIBOR and 2.00% over the base rate and thereafter will be
    determined on the basis of the ratio of total debt to annualized
    EBITDA and will range between 1.50% and 3.00% over LIBOR and
    between 0.50% and 2.00% over the base rate. As of
    September 30, 2005, the interest rate on the tranche D
    term loan was 5.37%.






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



48



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PART II  OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

et al


et al


49



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et
al et
al et al et al et al et al


et al et al et al


50



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| |   |                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The changes that Nextel and Sprint have announced they are
    planning to make with respect to branding after the close of the
    Sprint-Nextel merger would violate the joint venture agreement
    if we cannot use the same brand identity that Nextel will use
    after the merger, i.e., the Sprint brand.
|
| |  | Other operational changes that we believe Nextel and Sprint plan
    to implement after the Sprint-Nextel merger (including, without
    limitation, changes with respect to marketing and national
    accounts) would violate the joint venture agreement.                                                      
|
| |  | The operations of the combined Sprint-Nextel could violate our
    exclusivity rights under the joint venture agreement.                                                                                                                                                                                          
|
| |  | Nextel and Nextel WIP have not complied with their obligation to
    permit us to participate in and contribute to discussions
    regarding branding and a variety of other operational matters.                                                                                                                 











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et al











|        |                                                                
|------- | ---------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and Use of
    Proceeds








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





|                 |  |       |             | 
|---------------- |  | ----- | ----------- | 
|                 |  | Votes |            
|                 |  |       |            
|For              |  |       | 158,199,276 | 
|Against          |  |       | 57,691      | 
|Abstain          |  |       | 99,286      | 
|Broker Non-votes |  |       | 27,379,260  | 








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





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##### Table of Contents



1 2







|        |         
|------- | --------
|Item 6. | Exhibits

List of Exhibits.


| |    |         |  |                                                                                                                                                                                                                
| | -- | ------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3  | .1      |  | Restated Certificate of Incorporation (incorporated by reference
    to Exhibit 3.1.1 to Registration Statement on Form S-1
    declared effective February 22, 2000 (File
    No. 333-95473)).                
|
| | 3  | .1(a)   |  | Certificate of Amendment to the Restated Certificate of
    Incorporation of Nextel Partners, Inc. (incorporated by
    reference to Exhibit 3.1(a) to Quarterly Report on
    Form 10-Q filed August 9, 2004).
|
| | 3  | .2      |  | Amended and Restated Bylaws, effective of June 3, 2004
    (incorporated by reference to Exhibit 3.2 to Annual Report
    on Form 10-K filed March 16, 2005).                                                  
|
| | 10 | .20(a)^ |  | Amended and Restated Restricted Stock Purchase Agreement dated
    May 9, 2005 by and between Nextel Partners, Inc. and Barry
    Rowan.                                                                       
|
| | 31 | .1      |  | Certification of John Chapple, Chairman and Chief Executive
    Officer of Nextel Partners, Inc., pursuant to Exchange Act
    Rule 13a-14(a) under the Securities Exchange Act of 1934                        
|
| | 31 | .2      |  | Certification of Barry Rowan, Chief Financial Officer of Nextel
    Partners, Inc., pursuant to Exchange Act Rule 13a-14(a)
    under the Securities Exchange Act of 1934                                      
|
| | 32 | .1      |  | Certification of John Chapple, Chairman and Chief Executive
    Officer of Nextel Partners, Inc., pursuant to 18. U.S.C.
    Section 1350.                                                                     
|
| | 32 | .2      |  | Certification of Barry Rowan, Chief Financial Officer of Nextel
    Partners, Inc., pursuant to 18 U.S.C. Section 1350.                                                                                        




^


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##### Table of Contents






SIGNATURES






| |                      
| | ---------------------
| | NEXTEL PARTNERS, INC.
| | (Registrant)         



| |     |                
| | --- | ---------------
| | By: | /s/ BARRY ROWAN

| |                                                  
| | -------------------------------------------------
| |                                                  
| | Barry Rowan                                      
| | Executive Vice President, Chief Financial Officer
| | (Principal Financial Officer)                    



| |     |                
| | --- | ---------------
| | By: | /s/ LINDA ALLEN

| | 
| | 
| | 



| |                               
| | ------------------------------
| | Linda Allen                   
| | Chief Accounting Officer      
| | (Principal Accounting Officer)



54