##### 









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2004                                                 
|          
|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: 0-21213


LCC International, Inc.


(Exact Name of Registrant as Specified in Its Charter)


|                                                                               |  |                                         
|------------------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                                       |  | 54-1807038                              
|(State or Other Jurisdiction of
    Incorporation or Organization)             |  | (I.R.S. Employer
    Identification No.)
|                                                                              
|7925 Jones Branch Drive
    McLean, VA(Address of Principal Executive Offices) |  | 22102(Zip Code)                         

Registrants Telephone Number, Including Area Code:


(703) 873-2000


Securities registered pursuant to Section 12(b) of the
Act:


Not Applicable


Securities registered pursuant to Section 12(g) of the
Act:


Class A Common Stock, par value $.01 per share


(Title of Class)


Indicate by check mark whether the registrant: þ o


o


þ o






DOCUMENTS INCORPORATED BY REFERENCE














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TABLE OF CONTENTS


|         |  |                                                                                                                  |  |      |    | 
|-------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                                                  |  | Page |   
|         |  |                                                                                                                  |  |      |   
|PART I  
|Item 1.  |  | Business                                                                                                         |  |      | 3  | 
|Item 2.  |  | Properties                                                                                                       |  |      | 21 | 
|Item 3.  |  | Legal Proceedings                                                                                                |  |      | 21 | 
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                              |  |      | 21 | 
|        
|PART II 
|Item 5.  |  | Market for Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities |  |      | 22 | 
|Item 6.  |  | Selected Financial Data                                                                                          |  |      | 23 | 
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition
    and Results of Operations                        |  |      | 24 | 
|Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                                                       |  |      | 35 | 
|Item 8.  |  | Financial Statements and Supplementary Data                                                                      |  |      | 37 | 
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure                         |  |      | 69 | 
|Item 9A. |  | Controls and Procedures                                                                                          |  |      | 69 | 
|        
|PART III
|Item 10. |  | Directors and Executive Officers of the Registrant                                                               |  |      | 70 | 
|Item 11. |  | Executive Compensation                                                                                           |  |      | 70 | 
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters               |  |      | 70 | 
|Item 13. |  | Certain Relationships and Related Transactions                                                                   |  |      | 70 | 
|Item 14. |  | Principal Accountant Fees and Services                                                                           |  |      | 70 | 
|        
|PART IV 
|Item 15. |  | Exhibits and Financial Statement Schedules                                                                       |  |      | 70 | 

2



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This Annual Report on Form 10-K contains certain
forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. We
intend our forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements in these
sections. These statements can be identified by the use of
forward looking terminology, such as may,
will, expect, anticipate,
estimate, or continue or the negative
thereof or other variations thereon or comparable terminology.
Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of
certain factors, including those set forth elsewhere in this
Form  10-K. See the Risk Factors section
of Item 1 Business for cautionary statements
identifying important factors with respect to such
forward-looking statements, including certain risks and
uncertainties that could cause actual results to differ
materially from results referred to in forward-looking
statements.





PART I







|        |         
|------- | --------
|Item 1. | Business

Overview








Industry Background




| |                                     
| | ------------------------------------
| | Wireless Telecommunications Networks





3



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| |                                                                     
| | --------------------------------------------------------------------
| | Growth and Evolution of the Wireless Telecommunications
    Industry







| |                                      
| | -------------------------------------
| | Key Drivers of Change in Our Business





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The issuance of new or additional licenses to wireless
    service providers. After receiving new or additional
    licenses necessary to build out their wireless systems, wireless
    service providers must make decisions about what type of
    technology and equipment will be used, where it will be located
    and how it will be configured. In addition, detailed site
    location designs must be prepared and radio frequency engineers
    must review interference to or from co-located antennae.
    Construction and equipment installation then must be performed
    and professional technicians must install and commission the new
    radio equipment, test and integrate it with existing networks
    and tune the components to optimize performance.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | The introduction of new services or technologies.
    Although wireless service providers traditionally have relied
    upon their internal engineering workforces to address a
    significant portion of their wireless network needs, the rapid
    introduction of new services or technologies in the wireless
    market and the need to reduce operating costs in many cases has
    resulted in wireless service providers and equipment vendors
    focusing on their core competencies and, as a result,
    outsourcing an increasing portion of their network services.
    Recently, several wireless service providers have upgraded or
    have begun upgrading their networks to reduce the rate at which
    customers deactivate their wireless services and to accommodate
    two recently introduced services: (i) push-to-talk, which
    allows wireless callers to instantly connect directly with other
    wireless callers using the same network simply by pressing a
    button on their handset (similar to a two-way radio); and
    (ii) multimedia messaging, which allows wireless users to
    send and receive messages with a combination of media elements
    such as text, image, sound and video.

4



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The increases in the number of wireless subscribers, the
    increase in usage by those subscribers, and the scarcity of
    wireless spectrum. The increases in the number of
    subscribers served by wireless service providers, the increase
    in usage by those subscribers, and the scarcity of wireless
    spectrum require wireless service providers to expand and
    optimize system coverage and capacity to maintain network
    quality. The wireless system also must be continually updated
    and optimized to address changes in traffic patterns and
    interference from neighboring or competing networks or other
    radio sources.                                                                                                                     
|
| |  | The increasing complexity of wireless systems. As new
    technologies are developed, wireless service providers must
    determine whether to upgrade their existing networks or deploy
    new networks utilizing the latest available technologies in
    order to maintain their market share. For example, overlaying
    new technologies such as 2.5G and 3G with an existing network or
    deploying a new network requires wireless service providers to
    reengage in the strategic planning, design, deployment,
    expansion, and operations and maintenance phases of a new cycle
    in the life of an existing or new network. The consolidation of
    networks also drives a need for resources to plan, optimize and
    implement change in existing networks.



| |                         
| | ------------------------
| | The Need for Outsourcing





| |   |                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------
| |  | offer turnkey solutions through in-country presence in the
    markets to be served;                                        
|
| |  | have expertise with all major wireless technologies;                                                                        
|
| |  | offer speed to market and cost effective network implementation;                                                            
|
| |  | have experience working with all major equipment
    vendors; and                                                           
|
| |  | have sufficient numbers of highly skilled employees capable of
    handling large-scale domestic and international projects.

The LCC Solution






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Ability to deliver turnkey solutions. Our ability to
    provide the full range of design, deployment, consulting and
    operations and maintenance services for wireless networks, which
    we refer to as end-to-end or turnkey services, enables our
    wireless customers to engage us as a single responsible party
    accountable for delivering and managing its wireless network
    under a single contract. We coordinate our use of resources for
    each phase of the project from planning to design and deployment
    to operations and maintenance of the wireless network, enabling
    us to reduce the time and cost of our services. In order to
    supplement such services, we have established a presence in
    Algeria, Brazil, China, Greece, Italy, Spain, The Netherlands
    and the United Kingdom. We provide our customers with a primary
    point of accountability and reduce the inefficiencies associated
    with coordinating multiple subcontractors to enable projects to
    be transitioned from discipline to discipline in an efficient
    manner.
|
| |  | Expertise and experience with all major wireless
    technologies, system protocols and equipment vendors. We
    have experience working with all major wireless access
    technologies, including second generation, or 2G, 2.5G and 3G
    digital system protocols and their respective migration paths,
    including: (i) Global System for Mobile Communications
    (GSM); (ii) Time Division Multiple Access (TDMA);
    (iii) Code Division Multiple Access (CDMA);
    (iv) Integrated Dispatch Enhanced Network (iDEN);
    (v) broadbands Local Multipoint Distribution System
    (LMDS), Multichannel                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

5



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| |  |                                                                                                                                                                                                
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Multipoint Distribution Service (MMDS), 802.11x(Wi-Fi)
    and 802.16 (WiMax) technologies; (vi) Europes
    equivalent to iDEN referred to as Tetra; and (vii) core
    network technologies.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Speed to market. Our expertise, global presence and
    processes enable us to respond quickly to support our
    customers deployment objectives. Members of our technical,
    design and deployment teams often work together with the
    customer at the initial stage of a project in order to plan an
    effective and efficient solution for the customers needs.                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Worldwide depth of resources. Our system deployment
    professionals collectively have experience deploying networks in
    the major markets in the United States as well as many countries
    throughout the world. As of December 31, 2004,
    approximately 54% of our billable employees were employed
    outside the United States and represented 49 different
    nationalities. During the past 20 years, our professionals
    have designed wireless networks employing all major technologies
    in North America, Europe, Asia, Latin America, the Middle East
    and Africa. Our professional staff is highly educated with many
    of our engineering professionals holding masters degrees or
    doctorates.

LCC Services






| |                              
| | -----------------------------
| | Technical Consulting Services





| |                
| | ---------------
| | Design Services

Radio frequency and fixed network engineering.


6



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Competitive benchmarking.




| |                    
| | -------------------
| | Deployment Services

Program management.


Site acquisition and development.


Regulatory compliance.


Architecture and engineering.


Construction and procurement management.




| |                                    
| | -----------------------------------
| | Operations and Maintenance Services



Geographic Organization




7



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Business Strategy






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Provide end-to-end services. We provide integrated
    end-to-end solutions ranging from high level technical
    consulting, to system design and deployment, to ongoing
    operations and maintenance services. Our ability to provide
    end-to-end, or turnkey, services enables our wireless customers
    to engage a single, responsible party who is accountable for
    delivering and managing its wireless network under a single
    contract. Accordingly, we leverage initial consulting
    opportunities to secure later-stage system design and deployment
    contracts. Engagements to provide design and deployment services
    help us secure ongoing operations and maintenance projects,
    which is an emerging market segment. Providing ongoing
    operations and maintenance services, in turn, positions us well
    for additional opportunities as wireless service providers must
    either upgrade their existing networks or deploy new networks to
    benefit from the latest available technologies. For example,
    during 2003, we were engaged to perform turnkey services for
    U.S. Cellular and Sprint. In U.S. Cellulars
    case, we were retained to provide network design, site
    acquisition, zoning, permitting, civil engineering and
    construction services. In Sprints case, our history of
    performance in engineering engagements helped us secure work for
    the remaining turnkey activities. Many clients initially engage
    us to perform specific services, such as engineering services.
    Once we secure a client relationship, we work to expand our
    relationship to provide additional services offered by the
    company. We do this by understanding the clients needs and
    leveraging our reputation and demonstrated performance on client
    engagements. We typically self-perform network design, site
    acquisition and zoning services and hire subcontractors to
    perform civil engineering and construction services under our
    direct management. Self-performed work generally carries higher
    profit margins than subcontracted work.
|
| |  | Increase our presence in new geographic areas to capture
    additional growth opportunities. In order to realize the
    full benefit of wireless deployment worldwide, we target areas
    with strong potential growth by creating a localized presence.
    We pursue this effort through establishing a local presence,
    pursuing strategic acquisitions or entering into partnerships to
    reach new markets. We currently have a localized presence in
    Algeria, Brazil, China, Germany, Saudi Arabia, Greece, Italy,
    Spain, The Netherlands and the United Kingdom in addition to the
    United States, and are considering expansion into other markets.
    To increase our local presence in emerging areas, we have
    entered into several strategic acquisitions and investments. In
    particular: (i) in January 2002 we acquired Smith Woolley
    Telecom, a consulting firm in the United Kingdom specializing in
    site search, acquisition, design, build, management and
    maintenance services; (ii) in July 2002 we acquired 51% of
    Detron LCC Network Services, B.V., or Detron, a newly formed
    consulting firm in The Netherlands specializing in deployment,
    management and maintenance services; and (iii) we have
    opened a marketing office in Dubai from which we have pursued
    and secured projects in Saudi Arabia and Qatar. We intend to
    continue to pursue organic growth in new markets as well as take
    advantage of such opportunities as                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

8



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | may occur to acquire or partner with high quality company that
    accelerate our access to, and provide us with a local presence
    in, new markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Benefit from parallel market opportunities using our current
    knowledge base. We actively seek to expand into new markets
    through the use of our comprehensive knowledge of wireless voice
    and data communications networks. We also believe that the rapid
    growth in the worldwide use of wireless telecommunications has
    created a need for our services in related fields. For example,
    because most wireless calls are ultimately routed through a
    wireline network, traffic from wireless networks must be
    connected with switching centers within wireline networks.
    Because our fixed network engineers determine the most effective
    method to connect cell sites to the wireline backbone, and
    because many of the types of engineering services provided to
    wireline operators are similar to the types of services we
    provide in the wireless area, we have been engaged to provide
    wireline-related services by wireless service providers and
    equipment vendors. We also are exploring fixed and mobile
    wireless opportunities in the government and enterprise sectors.
    The United States government is exploring ways to provide
    reliable wireless connectivity for all
    first-responders and other law enforcement and
    public safety agencies using both existing and new networks and
    technologies. Large enterprises also are beginning to explore
    how wireless technologies such as the existing cellular and
    personal communication system, or PCS, services, as well as the
    new Wi-Fi and WiMax technologies, may be used to enhance
    productivity and reduce operating expenses. We have already
    provided consulting services to both government agencies and
    corporate customers and we intend to expand our opportunities in
    these areas.                                      
|
| |  | Attract and retain highly qualified personnel. As a
    service business, our success depends on our ability to attract,
    train and retain highly skilled professionals. As a result, we
    seek to recruit highly skilled personnel, facilitate their
    professional development and create a business atmosphere that
    encourages their continued employment. As of December 31,
    2004, we had 960 employees, of which 792 were billable
    employees. As of that date, approximately 54% of our billable
    employees were employed outside of the United States. Our
    professional staff is highly educated with many of our
    engineering professionals holding masters degrees or doctorates.
    Recognizing the critical importance of retaining highly
    qualified personnel for our business, we work closely with our
    employees to develop and enhance the technical, professional and
    management skills required to be successful at our company. Our
    senior management believes it is critically important to create
    and maintain an open culture that encourages learning,
    responsibility and collaboration. For example, C. Thomas
    Faulders, III, our chief executive officer, hosts monthly
    teleconference meetings with all employees to foster an open
    working environment. We recognize that preserving our culture
    requires our employees to have a stake in the success of our
    business. For that reason, we have granted stock options to a
    significant majority of our employees, including our clerical
    and administrative support staff. We also invest in all of our
    professionals by expanding their professional education through
    our Wireless Institute, which provides training for our
    engineers and our customers covering the latest technologies
    developed and deployed throughout the world.

9



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Customers and Backlog






| |              
| | -------------
| | Cingular     
| | Ericsson     
| | H3G          
| | Nextel       
| | O2           
| | Sprint       
| | T-Mobile     
| | U.S. Cellular





Sales and Marketing






| |      
| | -----
| | Sales





| |          
| | ---------
| | Marketing



10



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| |                   
| | ------------------
| | Wireless Institute



Competition






| |   |                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | internal staffs of wireless and wireline service providers;                                                                                                                                                                             
|
| |  | telecommunications equipment vendors, such as Ericsson and
    Nortel, which frequently provide design and deployment services
    as part of an equipment sale or pursue large scale outsourcing
    contracts on an independent basis;
|
| |  | independent service companies, such as Wireless Facilities,
    Inc., which provide a full range of wireless network services,
    and a large number of other companies that provide limited
    wireless services;                    
|
| |  | construction and project management companies, such as Bechtel
    Group Inc. and General Dynamics, for the deployment of wireless
    networks;                                                                                        
|
| |  | tower ownership and management companies, such as Crown Castle
    International and American Tower Corporation, which provide
    tower deployment service capabilities; and                                                           
|
| |  | information technology and consulting companies such as Bearing
    Point, Inc., Logica and others, which have developed
    capabilities to deliver network consulting services to wireless
    service providers.                     







11



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Employees




International Operations










Government Regulation




Risk Factors




| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In any given year, we derive a significant portion of our
    revenues from a limited number of large projects, and, if we are
    unable to replace these large projects upon completion, we could
    have a significant decrease in our revenues which would
    negatively impact our ability to generate income.





| |                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We generate a substantial portion of our revenues from a
    limited number of customers, and if our relationships with these
    customers were harmed our business would suffer.



12



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Recent and continuing consolidations among wireless
    service providers may result in a significant reduction in our
    existing and potential customer base, and, if we are unable to
    maintain our existing relations with such providers or expand
    such relationships, we could have a significant decrease in our
    revenues, which would negatively impact our ability to generate
    income as well as result in lower profitability.





| |                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Many of our customers face difficulties in obtaining
    financing to fund the expansion of their wireless networks,
    including deployments and upgrades, which may reduce demand for
    our services.





| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Further delays in the adoption and deployment of next
    generation wireless networks could negatively affect the demand
    for our services and our ability to grow our revenues.





13



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| |                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may experience significant fluctuations in our
    quarterly results as a result of uncertainties relating to our
    ability to generate additional revenues, manage our expenditures
    and other factors, certain of which are outside of our
    control.





| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | the timing of receipt of new licenses, use of existing spectrum
    for new services, or financing by potential customers;                 
|
| |  | service and price competition;                                                                                                             
|
| |  | the commencement, progress, completion or termination of
    contracts during any particular quarter;                                      
|
| |  | the availability of equipment to deploy new technologies such as
    3G and broadband;                                                     
|
| |  | the growth rate of wireless subscribers, which has a direct
    impact on the rate at which new cell sites are developed and
    built; and
|
| |  | telecommunications market conditions and economic conditions
    generally.                                                                





| |                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our contracts typically contain provisions giving
    customers the ability to terminate their contracts under various
    circumstances and we may not be able to replace the revenues
    from such projects which may have an adverse effect on our
    operating results due to our decreased revenues.





| |                                                                                      
| | -------------------------------------------------------------------------------------
| | We may not receive the full amount of our backlog, which
    could harm our business.





| |   |                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the price of the work to be done is fixed;                                                                                                                                           
|
| |  | the scope of the work to be done is fixed, both in definition
    and amount (for example, the number of sites has been
    determined); and                                         
|
| |  | there is a written contract, purchase order, agreement or other
    documentary evidence which represents a firm commitment by the
    client to pay us for the work to be performed.





14



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| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | A large percentage of our revenues comes from fixed price
    contracts, which require us to bear the risk of cost
    overruns.





| |                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because we recognize revenues on fixed price contracts
    using the percentage-of-completion method of accounting,
    increases in estimated project costs could cause fluctuations in
    our quarterly results and adversely affect our operating
    results.





| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | If the percentage of our revenues derived from
    construction related activities increases, our gross margins and
    our net income may suffer.





| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to collect receivables from development
    stage customers and other telecommunications companies, our
    operating results may be materially harmed.



15



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| |                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If more of our customers require fixed price contracts
    with fewer milestones than in previous years, we may not have
    sufficient access to working capital to fund the operating
    expenses incurred in connection with such contracts, and we may
    not be able to perform under our existing contracts or accept
    new contracts with similar terms.





| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | The extent of our dependence on international operations
    may give rise to increased management challenges and could harm
    our results of operations.





| |   |                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the effects of terrorism;                                                                                                                                                                                    
|
| |  | the general economic and political conditions in each country;                                                                                                                                               
|
| |  | the effect of applicable foreign tax structures, including tax
    rates that may be higher than tax rates in the United States;                                                                             
|
| |  | tariff and trade regulations;                                                                                                                                                                                
|
| |  | management of a geographically diverse organization;                                                                                                                                                         
|
| |  | difficulties and increased expenses in complying with a variety
    of foreign laws and regulations, including labor, employment and
    immigration laws;                                                   
|
| |  | changes in the applicable industry regulatory environments in
    foreign countries, including delays in deregulation or
    privatization affecting the pace at which wireless licenses are
    awarded; and
|
| |  | the inability to benefit from tax losses incurred in different
    foreign jurisdictions.                                                                                                                    





| |                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Providing services outside the United States carries the
    additional risk of currency fluctuations and foreign exchange
    controls imposed by certain countries since many of our
    non-U.S. projects are undertaken in local currency.



16



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| |                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We face intense competition from many competitors that
    have greater resources than we do, which could result in price
    reductions, reduced profitability and loss of market
    share.













| |                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we fail to manage the size of our billable workforce to
    anticipate increases or decreases in market demand for our
    services, it could harm our competitive position and financial
    results.





| |                                                                              
| | -----------------------------------------------------------------------------
| | Our ability to reduce our general and administrative
    expenses is limited.



17



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| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Competitors that offer financing to wireless customers
    pose a threat to our ability to compete for business.





| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our inability to anticipate or adapt to changes in
    technology may harm our competitive position, reputation and
    opportunities for revenue growth.





| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not be able to hire or retain a sufficient number
    of qualified engineers and other employees to meet our
    contractual commitments or maintain the quality of our
    services.





| |                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because we have experienced, and expect to continue to
    experience, long sales cycles, we expect to incur significant
    costs to generate new business and our customer base may not
    experience growth commensurate with such costs.



18



---



##### 







| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If wireless service providers, network equipment vendors
    and enterprises perform more network deployment services
    themselves, our business will suffer.





| |                                                              
| | -------------------------------------------------------------
| | Government regulations may adversely affect our
    business.





| |                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be unable to satisfy the accounting guidelines that
    govern the determination of the realizable value of a deferred
    tax asset in a given tax jurisdiction, thus eliminating our
    ability to recognize as an asset the tax benefit of operating
    losses in the same jurisdiction and causing a reduction in our
    overall consolidated profitability.





| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we fail to retain our key personnel and attract and
    retain additional qualified personnel, our ability to operate
    our business may be adversely affected.





| |                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | RF Investors, L.L.C., whose interests may not be aligned
    with yours, controls our company, which could result in actions
    of which you or other stockholders do not approve.



19



---



##### 











| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | Significant sales of class A common stock in the
    future may depress the trading price of our class A common
    stock.







| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | Our relationship with Telcom Ventures may result in
    potential conflicts of interest.





| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | Our stock price and trading volume are volatile and could
    decline, resulting in a substantial loss on your
    investment.





| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | our operating performance and the performance of other similar
    companies or companies deemed to be similar;

20



---



##### 





| |   |                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | actual or anticipated differences in our quarterly operating
    results;                                                                                                                  
|
| |  | changes in our revenues or earnings estimates or recommendations
    by securities analysts;                                                                                               
|
| |  | publication of research reports about us or our industry by
    securities analysts;                                                                                                       
|
| |  | additions and departures of key personnel;                                                                                                                                                 
|
| |  | strategic decisions by us or our competitors, such as
    acquisitions, consolidations, divestments, spin-offs, joint
    ventures, strategic investments, or changes in business strategy;
|
| |  | the passage of legislation or other regulatory developments that
    adversely affect us or our industry;                                                                                  
|
| |  | speculation in the press or investment community;                                                                                                                                          
|
| |  | changes in accounting principles;                                                                                                                                                          
|
| |  | terrorist acts;                                                                                                                                                                            
|
| |  | general market conditions, including economic factors unrelated
    to our performance; and                                                                                                
|
| |  | political or military events related to international conflicts,
    wars, or otherwise.                                                                                                   



Additional Information









|        |           
|------- | ----------
|Item 2. | Properties














|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings








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



21



---



##### 



PART II




|        |                                                                                                                      
|------- | ---------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuers Purchases of Equity
    Securities



|               |  |      |               | 
|-------------- |  | ---- | ------------- | 
|Quarter Ended: |  | 2003 |              
|               |  |      |              
|March 31       |  | $    | 1.87 to $2.67 | 
|June 30        |  | $    | 2.05 to $3.15 | 
|September 30   |  | $    | 2.48 to $6.00 | 
|December 31    |  | $    | 4.15 to $6.85 | 

|               |  |      |               | 
|-------------- |  | ---- | ------------- | 
|Quarter Ended: |  | 2004 |              
|               |  |      |              
|March 31       |  | $    | 5.06 to $9.81 | 
|June 30        |  | $    | 3.36 to $6.48 | 
|September 30   |  | $    | 3.02 to $4.98 | 
|December 31    |  | $    | 3.06 to $6.05 | 



Equity Compensation Plan Information




|                                                           |                                                     |                      |           |           |                      |                      |                         |                              |  |  |           |           | 
|---------------------------------------------------------- | --------------------------------------------------- | -------------------- | --------- | --------- | -------------------- | -------------------- | ----------------------- | ---------------------------- |  |  | --------- | --------- | 
|                                                           |                                                     |                      |           |           |                      | Number of securities |                        
|                                                           |                                                     | Number of securities |           |           |                      |                      | remaining available for |                             
|                                                           |                                                     | to be issued upon    |           |           | Weighted-average     |                      |                         | future issuance under equity | 
|                                                           |                                                     | exercise of          |           |           | exercise price of    |                      |                         | compensation plans           | 
|                                                           |                                                     | outstanding options, |           |           | outstanding options, |                      |                         | (excluding securities        | 
|                                                           |                                                     | warrants and rights  |           |           | warrants and rights  |                      |                         | reflected in column (a))     | 
|Plan category                                              |                                                     | (a)                  |           |           | (b)                  |                      |                         | (c)                          | 
|                                                           |                                                     |                      |           |           |                      |                      |                         |                              | 
|Equity compensation plans approved by securities holders   |                                                     |                      |           |           |                      |                      |                         |                              |  |  |           |          
|                                                           | Employee Stock Option Plan                          |                      |           | 3,531,418 |                      |                      | $                       | 4.83                         |  |  |           | 2,694,612 | 
|                                                           | Directors Stock Option Plan (Class A Common Stock)  |                      |           | 158,400   |                      |                      |                         | 8.11                         |  |  |           | 91,600    | 
|                                                           | Directors Stock Option Plan (Class B Common Stock)* |                      |           | 45,000    |                      |                      |                         | 16.88                        |  |  |           |          | 
|                                                           | Employee Stock Purchase Plan                        |                      |           |          |                      |                      |                         |                             |  |  |           | 411,928   | 
|Equity compensation plans not approved by security holders |                                                     |                      |          |           |                      |                      |                        |                              |  |  |          |          
|                                                           |                                                     |                      |           |           |                      |                      |                         |                              | 
|Total                                                      |                                                     |                      | 3,734,818 |           |                      | $                    | 5.12                    |                              |  |  | 3,198,140 |          
|                                                           |                                                     |                      |           |           |                      |                      |                         |                              | 






|  |                                                                                                                                                                                                                                             
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Although the directors stock option plan authorizes the issuance
    of up to 250,000 shares of class B common stock, the
    final grant of such options occurred in May 2000 pursuant to the
    terms of the directors stock option plan.

Note:


22



---



##### 





|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

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


|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |         |         | 
|---------------------------------------------- | ------------------------------------------------------- | ------------------------------------- | ------ | ------- | ------- | - | ------ | ------- | ------- | - | ------- | ------ | ------ | ---- | ------ | ------- | ------- | - | ------ | ------- | ------- | 
|                                               |                                                         | Years Ended December 31,              |       
|                                               |                                                         |                                       |       
|                                               |                                                         | 2000                                  |        |         | 2001    |   |        | 2002    |         |   | 2003    |        |        | 2004 |       
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|                                               |                                                         | (in thousands, except per share data) |       
|Revenues:                                      |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |        
|                                               | Service                                                 |                                       | $      | 149,385 |         |   | $      | 130,609 |         |   | $       | 67,069 |        |      | $      | 108,439 |         |   | $      | 198,607 |        
|                                               | Tower ownership and management                          |                                       |        | 1,008   |         |   |        |        |         |   |         |       |        |      |        |        |         |   |        |        |        
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|                                               |                                                         | Total revenues                        |        |         | 150,393 |   |        |         | 130,609 |   |         |        | 67,069 |      |        |         | 108,439 |   |        |         | 198,607 | 
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Cost of revenues:                              |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |        
|                                               | Service                                                 |                                       |        | 109,952 |         |   |        | 103,535 |         |   |         | 58,429 |        |      |        | 88,998  |         |   |        | 162,930 |        
|                                               | Tower ownership and management                          |                                       |        | 333     |         |   |        |        |         |   |         |       |        |      |        |        |         |   |        |        |        
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|                                               |                                                         | Total cost of revenues                |        |         | 110,285 |   |        |         | 103,535 |   |         |        | 58,429 |      |        |         | 88,998  |   |        |         | 162,930 | 
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Gross profit                                   |                                                         |                                       | 40,108 |         |         |   | 27,074 |         |         |   | 8,640   |        |        |      | 19,441 |         |         |   | 35,677 |        
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Operating expenses:                            |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |        
|                                               | Sales and marketing                                     |                                       |        | 7,833   |         |   |        | 7,068   |         |   |         | 8,095  |        |      |        | 6,624   |         |   |        | 7,986   |        
|                                               | General and administrative                              |                                       |        | 19,673  |         |   |        | 15,978  |         |   |         | 20,311 |        |      |        | 18,508  |         |   |        | 27,555  |        
|                                               | Restructuring charge                                    |                                       |        | (108    | )       |   |        |        |         |   |         | 13,522 |        |      |        | (2      | )       |   |        | (1,166  | )      
|                                               | Gain on sale of tower portfolio and administration, net |                                       |        | (26,437 | )       |   |        | (2,998  | )       |   |         | (2,000 | )      |      |        |        |         |   |        |        |        
|                                               | Depreciation and amortization                           |                                       |        | 2,899   |         |   |        | 3,012   |         |   |         | 2,884  |        |      |        | 3,860   |         |   |        | 2,715   |        
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|                                               |                                                         | Total operating expenses              |        |         | 3,860   |   |        |         | 23,060  |   |         |        | 42,812 |      |        |         | 28,990  |   |        |         | 37,090  | 
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Operating income (loss)                        |                                                         |                                       | 36,248 |         |         |   | 4,014  |         |         |   | (34,172 | )      |        |      | (9,549 | )       |         |   | (1,413 | )      
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Other income (expense)                         |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |        
|                                               | Interest income (expense), net                          |                                       |        | 1,688   |         |   |        | 1,886   |         |   |         | 818    |        |      |        | 325     |         |   |        | (79     | )      
|                                               | Other                                                   |                                       |        | (787    | )       |   |        | 22,113  |         |   |         | (3,767 | )      |      |        | 1,218   |         |   |        | 1,395   |        
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|                                               |                                                         | Total other income (expense)          |        |         | 901     |   |        |         | 23,999  |   |         |        | (2,949 | )    |        |         | 1,543   |   |        |         | 1,316   | 
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Income (loss) before income taxes              |                                                         |                                       | 37,149 |         |         |   | 28,013 |         |         |   | (37,121 | )      |        |      | (8,006 | )       |         |   | (97    | )      
|Provision (benefit) for income taxes           |                                                         |                                       | 16,531 |         |         |   | 11,041 |         |         |   | (8,451  | )      |        |      | (1,483 | )       |         |   | 5,215  |        
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Net income (loss)                              |                                                         | $                                     | 20,618 |         |         | $ | 16,972 |         |         | $ | (28,670 | )      |        | $    | (6,523 | )       |         | $ | (5,312 | )      
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Net income (loss) per share:                   |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |        
|                                               | Basic                                                   |                                       | $      | 1.01    |         |   | $      | 0.83    |         |   | $       | (1.37  | )      |      | $      | (0.31   | )       |   | $      | (0.22   | )      
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|                                               | Diluted                                                 |                                       | $      | 0.93    |         |   | $      | 0.81    |         |   | $       | (1.37  | )      |      | $      | (0.31   | )       |   | $      | (0.22   | )      
|                                               |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |       
|Weighted average shares outstanding:           |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |        
|                                               | Basic                                                   |                                       |        | 20,360  |         |   |        | 20,571  |         |   |         | 20,902 |        |      |        | 21,292  |         |   |        | 24,381  |        
|                                               | Diluted                                                 |                                       |        | 22,110  |         |   |        | 20,916  |         |   |         | 20,902 |        |      |        | 21,292  |         |   |        | 24,381  |        
|Consolidated Balance Sheet Data (at year-end): |                                                         |                                       |        |         |         |   |        |         |         |   |         |        |        |      |        |         |         |   |        |        
|                                               | Cash and short-term investments                         |                                       | $      | 42,335  |         |   | $      | 53,142  |         |   | $       | 39,329 |        |      | $      | 31,031  |         |   | $      | 22,982  |        
|                                               | Working capital                                         |                                       |        | 59,460  |         |   |        | 72,134  |         |   |         | 49,959 |        |      |        | 54,980  |         |   |        | 51,531  |        
|                                               | Goodwill and intangibles, net                           |                                       |        | 57      |         |   |        | 637     |         |   |         | 11,273 |        |      |        | 11,958  |         |   |        | 12,848  |        
|                                               | Total assets                                            |                                       |        | 110,045 |         |   |        | 112,231 |         |   |         | 96,723 |        |      |        | 118,591 |         |   |        | 126,380 |        
|                                               | Total debt                                              |                                       |        |        |         |   |        |        |         |   |         |       |        |      |        | 1,840   |         |   |        | 147     |        
|                                               | Shareholders equity                                    |                                       |        | 68,416  |         |   |        | 85,804  |         |   |         | 61,088 |        |      |        | 69,768  |         |   |        | 68,720  |        

23



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##### 





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

The following discussion and analysis should be read in
conjunction with our consolidated financial statements and the
notes thereto and the other financial data appearing elsewhere
in this Form 10-K.


Overview






Americas:


EMEA:


Asia & other:










24



---



##### 









Trends That Have Affected or May Affect Results of Operations
and Financial Condition






| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | project related revenues derived from a limited set of customers
    in each market where we do business;                                             
|
| |  | our customers have faced difficulties in obtaining financing to
    fund the development, expansion and upgrade of their networks;                    
|
| |  | the acceleration or the delay associated with the introduction
    of new technologies and services by our customers;                                 
|
| |  | the management and the services composition of our fixed price
    contracts;                                                                         
|
| |  | the impact of the percentage of subcontracted work (versus self
    perform work) on our large programs and the associated margin
    degradation; and
|
| |  | increased spending by wireless service providers in the areas of
    network design, deployment and optimization.                                     







25



---



##### 











Results of Operations




Revenues, Cost of Revenues and Gross Margins


|          |                |                          |        |        |      |  |                |      |  |   |         |                |  |  |  |  |  |   |         |         |  |  |  |  | 
|--------- | -------------- | ------------------------ | ------ | ------ | ---- |  | -------------- | ---- |  | - | ------- | -------------- |  |  |  |  |  | - | ------- | ------- |  |  |  |  | 
|          |                | Years Ended December 31, |       
|          |                |                          |       
|          |                | 2002                     |        |        | 2003 |  |                | 2004 | 
|          |                |                          |        |        |      |  |                |      | 
|          |                | (in thousands)           |        |        |      |  | (in thousands) |      |  |   |         | (in thousands) |  |  | 
|Revenues: |                |                          |        |        |      |  |                |      |  |   |         |                |  |  |  |  |  |   |         |         |  |  |  | 
|          | Americas       |                          | $      | 29,706 |      |  |                |      |  |   | $       | 53,086         |  |  |  |  |  |   | $       | 115,344 |  |  |  |  | 
|          | EMEA           |                          |        | 34,755 |      |  |                |      |  |   |         | 53,296         |  |  |  |  |  |   |         | 78,285  |  |  |  |  | 
|          | Asia and other |                          |        | 2,608  |      |  |                |      |  |   |         | 2,057          |  |  |  |  |  |   |         | 4,978   |  |  |  |  | 
|          |                |                          |        |        |      |  |                |      |  |   |         |                |  |  |  |  |  |  
|          |                | $                        | 67,069 |        |      |  |                |      |  | $ | 108,439 |                |  |  |  |  |  | $ | 198,607 |         |  |  |  | 
|          |                |                          |        |        |      |  |                |      |  |   |         |                |  |  |  |  |  |  

|                  |                |   |        |                |  |  |      |      |                |   |        |        |  |                |      |      |   |   |         |        |  |  |      |      |  
|----------------- | -------------- | - | ------ | -------------- |  |  | ---- | ---- | -------------- | - | ------ | ------ |  | -------------- | ---- | ---- | - | - | ------- | ------ |  |  | ---- | ---- | -
|                  |                |   |        | (% of revenue) |  |  |      |      | (% of revenue) |   |        |        |  | (% of revenue) |     
|Cost of revenues: |                |   |        |                |  |  |      |      |                |   |        |        |  |                |      |      |   |   |         |        |  |  |      |     
|                  | Americas       |   | $      | 26,965         |  |  |      | 90.8 | %              |   | $      | 45,334 |  |                |      | 85.4 | % |   | $       | 98,747 |  |  |      | 85.6 | %
|                  | EMEA           |   |        | 29,600         |  |  |      | 85.2 |                |   |        | 42,196 |  |                |      | 79.2 |   |   |         | 60,511 |  |  |      | 77.3 |  
|                  | Asia and other |   |        | 1,864          |  |  |      | 71.5 |                |   |        | 1,468  |  |                |      | 71.4 |   |   |         | 3,672  |  |  |      | 73.8 |  
|                  |                |   |        |                |  |  |      |      |                |   |        |        |  |                |      |      |   |  
|                  |                | $ | 58,429 |                |  |  | 87.1 | %    |                | $ | 88,998 |        |  |                | 82.1 | %    |   | $ | 162,930 |        |  |  | 82.0 | %   
|                  |                |   |        |                |  |  |      |      |                |   |        |        |  |                |      |      |   |  
|Gross margin:     |                |   |        |                |  |  |      |      |                |   |        |        |  |                |      |      |   |   |         |        |  |  |      |     
|                  | Americas       |   | $      | 2,741          |  |  |      | 9.2  | %              |   | $      | 7,752  |  |                |      | 14.6 | % |   | $       | 16,597 |  |  |      | 14.4 | %
|                  | EMEA           |   |        | 5,155          |  |  |      | 14.8 |                |   |        | 11,100 |  |                |      | 20.8 |   |   |         | 17,774 |  |  |      | 22.7 |  
|                  | Asia and other |   |        | 744            |  |  |      | 28.5 |                |   |        | 589    |  |                |      | 28.6 |   |   |         | 1,306  |  |  |      | 26.2 |  
|                  |                |   |        |                |  |  |      |      |                |   |        |        |  |                |      |      |   |  
|                  |                | $ | 8,640  |                |  |  | 12.9 | %    |                | $ | 19,441 |        |  |                | 17.9 | %    |   | $ | 35,677  |        |  |  | 18.0 | %   
|                  |                |   |        |                |  |  |      |      |                |   |        |        |  |                |      |      |   |  

26



---



##### 



Americas










EMEA








27



---



##### 







Asia and other






Operating Expenses


|                    |                                    |                                  |        |        |        |   |        |        |        |   |        |        |        | 
|------------------- | ---------------------------------- | -------------------------------- | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                    |                                    | Years Ended December 31,         |       
|                    |                                    |                                  |       
|                    |                                    | 2002                             |        |        | 2003   |   |        | 2004   |       
|                    |                                    |                                  |        |        |        |   |        |        |       
|                    |                                    | (in thousands)                   |       
|Operating expenses: |                                    |                                  |        |        |        |   |        |        |        |   |        |       
|                    | Net bad debt expense or (recovery) |                                  | $      | 2,729  |        |   | $      | (2,419 | )      |   | $      | 145    |       
|                    | Shareholder note compensation      |                                  |        | 156    |        |   |        |       |        |   |        | 1,240  |       
|                    | General and administrative         |                                  |        | 17,426 |        |   |        | 20,927 |        |   |        | 26,170 |       
|                    |                                    |                                  |        |        |        |   |        |        |       
|                    |                                    | Total general and administrative |        |        | 20,311 |   |        |        | 18,508 |   |        |        | 27,555 | 
|                    |                                    |                                  |        |        |        |   |        |        |       
|                    | Sales and marketing                |                                  |        | 8,095  |        |   |        | 6,624  |        |   |        | 7,986  |       
|                    | Restructuring                      |                                  |        | 13,522 |        |   |        | (2     | )      |   |        | (1,166 | )     
|                    | Tower gain                         |                                  |        | (2,000 | )      |   |        |       |        |   |        |       |       
|                    | Depreciation                       |                                  |        | 2,884  |        |   |        | 3,860  |        |   |        | 2,715  |       
|                    |                                    |                                  |        |        |        |   |        |        |       
|                    |                                    | $                                | 42,812 |        |        | $ | 28,990 |        |        | $ | 37,090 |       
|                    |                                    |                                  |        |        |        |   |        |        |       



| |                                
| | -------------------------------
| | Net bad debt expense (recovery)





| |                              
| | -----------------------------
| | Shareholder note compensation



28



---



##### 







| |                                    
| | -----------------------------------
| | General and administrative expenses





| |                             
| | ----------------------------
| | Sales and marketing expenses





| |              
| | -------------
| | Restructuring





| |           
| | ----------
| | Tower gain





| |             
| | ------------
| | Depreciation



29



---



##### 



Other Income and Expense


|                        |                  |                            |        |     |        |   |       |      |       |   |       |      |      |  
|----------------------- | ---------------- | -------------------------- | ------ | --- | ------ | - | ----- | ---- | ----- | - | ----- | ---- | ---- | -
|                        |                  | Years Ended December 31,   |       
|                        |                  |                            |       
|                        |                  | 2002                       |        |     | 2003   |   |       | 2004 |      
|                        |                  |                            |        |     |        |   |       |      |      
|                        |                  | (In thousands)             |       
|Other income (expense): |                  |                            |        |     |        |   |       |      |       |   |       |     
|                        | Interest income  |                            | $      | 840 |        |   | $     | 447  |       |   | $     | 174  |     
|                        | Interest expense |                            |        | (22 | )      |   |       | (122 | )     |   |       | (253 | )   
|                        | Other:           |                            |        |     |        |   |       |      |       |   |       |      |     
|                        |                  | Gain (loss) on investments |        |     | 1,104  |   |       |      | 1,000 |   |       |      | 766  |  
|                        |                  | Impairment of investments  |        |     | (5,139 | ) |       |      |      |   |       |      | (181 | )
|                        |                  | Other                      |        |     | 268    |   |       |      | 218   |   |       |      | 810  |  
|                        |                  |                            |        |     |        |   |       |      |      
|                        |                  |                            | (3,767 | )   |        |   | 1,218 |      |       |   | 1,395 |     
|                        |                  |                            |        |     |        |   |       |      |      
|                        |                  | $                          | (2,949 | )   |        | $ | 1,543 |      |       | $ | 1,316 |     
|                        |                  |                            |        |     |        |   |       |      |      



| |                
| | ---------------
| | Interest income





| |                           
| | --------------------------
| | Gain (loss) on investments





| |                          
| | -------------------------
| | Impairment of investments





| |             
| | ------------
| | Other income



Tax Expense








30



---



##### 





Net Loss








Liquidity and Capital Resources






| |                         
| | ------------------------
| | Sources and Uses of Cash

|                                                    |                                           |                          |         |         |      |   |         |        |   |   |        |        |  
|--------------------------------------------------- | ----------------------------------------- | ------------------------ | ------- | ------- | ---- | - | ------- | ------ | - | - | ------ | ------ | -
|                                                    |                                           | Years Ended December 31, |        
|                                                    |                                           |                          |        
|                                                    |                                           | 2002                     |         |         | 2003 |   |         | 2004   |  
|                                                    |                                           |                          |         |         |      |   |         |        |  
|                                                    |                                           | (in thousands)           |        
|Net cash used in operating activities               |                                           | $                        | (2,830  | )       |      | $ | (19,584 | )      |   | $ | (4,583 | )     
|Net cash used in investing activities               |                                           |                          | (11,841 | )       |      |   | (2,770  | )      |   |   | (3,169 | )     
|Net cash provided by (used in) financing activities |                                           |                          | (480    | )       |      |   | 13,790  |        |   |   | 629    |       
|                                                    |                                           |                          |         |         |      |   |         |        |  
|                                                    | Net decrease in cash and cash equivalents |                          | $       | (15,151 | )    |   | $       | (8,564 | ) |   | $      | (7,123 | )
|                                                    |                                           |                          |         |         |      |   |         |        |  





31



---



##### 







| |                  
| | -----------------
| | Cash Requirements

|                          |                                       |                          |        |        |      |   |        |        | 
|------------------------- | ------------------------------------- | ------------------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                          |                                       | Years Ended December 31, |       
|                          |                                       |                          |       
|                          |                                       | 2003                     |        |        | 2004 |  
|                          |                                       |                          |        |        |      |  
|                          |                                       | (in thousands)           |       
|Cash and cash equivalents |                                       | $                        | 28,943 |        |      | $ | 21,820 |       
|Restricted cash           |                                       |                          | 1,568  |        |      |   | 1,162  |       
|Short-term investments    |                                       |                          | 520    |        |      |   |       |       
|                          |                                       |                          |        |        |      |  
|                          | Total cash and short-term investments |                          | $      | 31,031 |      |   | $      | 22,982 | 
|                          |                                       |                          |        |        |      |  
|                          | Line of credit                        |                          | $      | 1,840  |      |   | $      | 147    | 
|                          |                                       |                          |        |        |      |  
|                          | Working capital                       |                          | $      | 54,980 |      |   | $      | 51,531 | 
|                          |                                       |                          |        |        |      |  





|                            |  |                       |        |           |        |   |       |           |           |   |           |  |  |         |       |  |  |   |       | 
|--------------------------- |  | --------------------- | ------ | --------- | ------ | - | ----- | --------- | --------- | - | --------- |  |  | ------- | ----- |  |  | - | ----- | 
|                            |  | Payment Due by Period |       
|                            |  |                       |       
|                            |  |                       |        | Less than |        |   |       |           | More than |  
|Contractual Obligations     |  | Total                 |        |           | 1 year |   |       | 1-3 years |           |   | 4-5 years |  |  | 5 years |      
|                            |  |                       |        |           |        |   |       |           |           |   |           |  |  |         |      
|Operating lease obligations |  | $                     | 18,810 |           |        | $ | 6,054 |           |           | $ | 9,395     |  |  | $       | 1,262 |  |  | $ | 2,099 | 
|Sublease income             |  | $                     | 7,160  |           |        | $ | 1,341 |           |           | $ | 3,390     |  |  | $       | 810   |  |  | $ | 1,619 | 







32



---



##### 







Critical Accounting Policies






| |   |                                 
| | - | --------------------------------
| |  | revenue recognition;            
|
| |  | allowance for doubtful accounts;
|
| |  | accounting for income taxes; and
|
| |  | restructuring charge.           



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





| |                                
| | -------------------------------
| | Allowance for Doubtful Accounts



33



---



##### 







| |                            
| | ---------------------------
| | Accounting for Income Taxes







| |                     
| | --------------------
| | Restructuring Charge



Related Party Transactions






34



---



##### 







Recent Accounting Pronouncements


Share-Based
Payment Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees.




|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures about Market
    Risk









35



---



##### 







36



---



##### 





|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

Managements Report on Internal Control Over Financial
Reporting






| |   |                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the company;                                                                                                                                                                                        
|
| |  | provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the company are being made
    only in accordance with authorizations of management and
    directors of the company; and
|
| |  | provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use, or disposition of
    the companys assets that could have a material effect on
    the financial statements.                                                                                                                                      







37



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM






.










38



---



##### 







|         | 
|-------- | 
|KPMG LLP | 





39



---



##### 



Report of Independent Registered Public Accounting Firm
















|         | 
|-------- | 
|KPMG LLP | 





40



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


Years ended December 31, 2002, 2003 and 2004


(In thousands, except per share data)


|                                                                       |                                                                      |      |         |        |      |   |         |        |   |   |         |        |  
|---------------------------------------------------------------------- | -------------------------------------------------------------------- | ---- | ------- | ------ | ---- | - | ------- | ------ | - | - | ------- | ------ | -
|                                                                       |                                                                      | 2002 |         |        | 2003 |   |         | 2004   |  
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Revenues                                                               |                                                                      | $    | 67,069  |        |      | $ | 108,439 |        |   | $ | 198,607 |       
|Cost of revenues                                                       |                                                                      |      | 58,429  |        |      |   | 88,998  |        |   |   | 162,930 |       
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Gross profit                                                           |                                                                      |      | 8,640   |        |      |   | 19,441  |        |   |   | 35,677  |       
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Operating expenses:                                                    |                                                                      |      |         |        |      |   |         |        |   |   |         |       
|                                                                       | Sales and marketing                                                  |      |         | 8,095  |      |   |         | 6,624  |   |   |         | 7,986  |  
|                                                                       | General and administrative                                           |      |         | 20,311 |      |   |         | 18,508 |   |   |         | 27,555 |  
|                                                                       | Restructuring charge (note 7)                                        |      |         | 13,522 |      |   |         | (2     | ) |   |         | (1,166 | )
|                                                                       | Gain on sale of tower portfolio and administration, net
    (note 3) |      |         | (2,000 | )    |   |         |       |   |   |         |       |  
|                                                                       | Depreciation and amortization                                        |      |         | 2,884  |      |   |         | 3,860  |   |   |         | 2,715  |  
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Total operating expenses                                               |                                                                      |      | 42,812  |        |      |   | 28,990  |        |   |   | 37,090  |       
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Operating loss                                                         |                                                                      |      | (34,172 | )      |      |   | (9,549  | )      |   |   | (1,413  | )     
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Other income (expense):                                                |                                                                      |      |         |        |      |   |         |        |   |   |         |       
|                                                                       | Interest income                                                      |      |         | 840    |      |   |         | 447    |   |   |         | 174    |  
|                                                                       | Interest expense                                                     |      |         | (22    | )    |   |         | (122   | ) |   |         | (253   | )
|                                                                       | Other (notes 9 and 10)                                               |      |         | (3,767 | )    |   |         | 1,218  |   |   |         | 1,395  |  
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Total other income (expense)                                           |                                                                      |      | (2,949  | )      |      |   | 1,543   |        |   |   | 1,316   |       
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Loss from operations before income taxes                               |                                                                      |      | (37,121 | )      |      |   | (8,006  | )      |   |   | (97     | )     
|Provision (benefit) for income taxes (note 13)                         |                                                                      |      | (8,451  | )      |      |   | (1,483  | )      |   |   | 5,215   |       
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Net loss                                                               |                                                                      | $    | (28,670 | )      |      | $ | (6,523  | )      |   | $ | (5,312  | )     
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Net loss per share:                                                    |                                                                      |      |         |        |      |   |         |        |   |   |         |       
|                                                                       | Basic                                                                |      | $       | (1.37  | )    |   | $       | (0.31  | ) |   | $       | (0.22  | )
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|                                                                       | Diluted                                                              |      | $       | (1.37  | )    |   | $       | (0.31  | ) |   | $       | (0.22  | )
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|Weighted average shares used in calculation of net loss per
    share: |                                                                      |      |         |        |      |   |         |        |   |   |         |       
|                                                                       | Basic                                                                |      |         | 20,902 |      |   |         | 21,292 |   |   |         | 24,381 |  
|                                                                       |                                                                      |      |         |        |      |   |         |        |  
|                                                                       | Diluted                                                              |      |         | 20,902 |      |   |         | 21,292 |   |   |         | 24,381 |  
|                                                                       |                                                                      |      |         |        |      |   |         |        |  



41



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


(In thousands, except per share data)


|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |        |         |         |        |         | 
|------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | ------- | ------ | ------ | ------- | ------- | ------ | ------- | 
|                                                                                      |                                                                                                                      | December 31,                                                                                                                         |                           
|                                                                                      |                                                                                                                      |                                                                                                                                      |                           
|                                                                                      |                                                                                                                      | 2003                                                                                                                                 |                            |         | 2004   |       
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|ASSETS:                                                                              
|Current assets:                                                                       |                                                                                                                      |                                                                                                                                      |                            |         |        |        |         |        
|                                                                                      | Cash and cash equivalents (note 4)                                                                                   |                                                                                                                                      | $                          | 28,943  |        |        | $       | 21,820  |       
|                                                                                      | Restricted cash                                                                                                      |                                                                                                                                      |                            | 1,568   |        |        |         | 1,162   |       
|                                                                                      | Short-term investments                                                                                               |                                                                                                                                      |                            | 520     |        |        |         |        |       
|                                                                                      | Receivables, net of allowance for doubtful accounts of $466 and
    $620 at December 31, 2003 and 2004, respectively |                                                                                                                                      |                            |         |        |        |         |         |       
|                                                                                      |                                                                                                                      | Trade accounts receivable                                                                                                            |                            |         | 27,456 |        |         |         | 46,298 |        
|                                                                                      |                                                                                                                      | Unbilled receivables                                                                                                                 |                            |         | 35,007 |        |         |         | 34,279 |        
|                                                                                      |                                                                                                                      | Due from related parties and affiliates (note 5)                                                                                     |                            |         | 180    |        |         |         | 96     |        
|                                                                                      | Deferred income taxes, net (note 13)                                                                                 |                                                                                                                                      |                            | 3,547   |        |        |         | 1,148   |       
|                                                                                      | Prepaid expenses and other current assets                                                                            |                                                                                                                                      |                            | 1,726   |        |        |         | 1,586   |       
|                                                                                      | Prepaid tax receivable and prepaid taxes                                                                             |                                                                                                                                      |                            | 662     |        |        |         | 683     |       
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|                                                                                      |                                                                                                                      |                                                                                                                                      | Total current assets       |         |        | 99,609 |         |         |        | 107,072 | 
|Property and equipment, net (note 6)                                                  |                                                                                                                      |                                                                                                                                      | 3,818                      |         |        |        | 4,218   |        
|Investments in affiliates (note 11)                                                   |                                                                                                                      |                                                                                                                                      | 764                        |         |        |        | 677     |        
|Deferred income taxes, net (note 13)                                                  |                                                                                                                      |                                                                                                                                      | 1,407                      |         |        |        |        |        
|Goodwill (note 11)                                                                    |                                                                                                                      |                                                                                                                                      | 11,115                     |         |        |        | 12,246  |        
|Other intangibles (note 11)                                                           |                                                                                                                      |                                                                                                                                      | 843                        |         |        |        | 602     |        
|Other assets                                                                          |                                                                                                                      |                                                                                                                                      | 1,035                      |         |        |        | 1,565   |        
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|                                                                                      |                                                                                                                      | $                                                                                                                                    | 118,591                    |         |        | $      | 126,380 |        
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|LIABILITIES AND SHAREHOLDERS EQUITY:                                                
|Current liabilities:                                                                  |                                                                                                                      |                                                                                                                                      |                            |         |        |        |         |        
|                                                                                      | Line of credit (note 12)                                                                                             |                                                                                                                                      | $                          | 1,840   |        |        | $       | 147     |       
|                                                                                      | Accounts payable                                                                                                     |                                                                                                                                      |                            | 11,485  |        |        |         | 19,790  |       
|                                                                                      | Accrued expenses                                                                                                     |                                                                                                                                      |                            | 21,152  |        |        |         | 26,285  |       
|                                                                                      | Accrued employee compensation and benefits                                                                           |                                                                                                                                      |                            | 5,525   |        |        |         | 4,850   |       
|                                                                                      | Deferred revenue                                                                                                     |                                                                                                                                      |                            | 471     |        |        |         | 985     |       
|                                                                                      | Income taxes payable (note 13)                                                                                       |                                                                                                                                      |                            | 967     |        |        |         | 1,683   |       
|                                                                                      | Accrued restructuring current (note 7)                                                                               |                                                                                                                                      |                            | 2,903   |        |        |         | 1,562   |       
|                                                                                      | Other current liabilities                                                                                            |                                                                                                                                      |                            | 286     |        |        |         | 239     |       
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|                                                                                      |                                                                                                                      |                                                                                                                                      | Total current liabilities  |         |        | 44,629 |         |         |        | 55,541  | 
|Accrued restructuring noncurrent (note 7)                                             |                                                                                                                      |                                                                                                                                      | 3,432                      |         |        |        | 1,339   |        
|Other liabilities                                                                     |                                                                                                                      |                                                                                                                                      | 762                        |         |        |        | 780     |        
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|                                                                                      |                                                                                                                      |                                                                                                                                      | Total liabilities          |         |        | 48,823 |         |         |        | 57,660  | 
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|Commitments and contingencies (notes 12, 16, and 17)                                  |                                                                                                                      |                                                                                                                                      |                            |         |        |        |         |        
|Shareholders equity:                                                                 |                                                                                                                      |                                                                                                                                      |                            |         |        |        |         |        
|                                                                                      | Preferred stock:                                                                                                     |                                                                                                                                      |                            |         |        |        |         |         |       
|                                                                                      |                                                                                                                      | 10,000 shares authorized; -0- shares issued and outstanding                                                                          |                            |         |       |        |         |         |       |        
|                                                                                      | Class A common stock; $.01 par value:                                                                                |                                                                                                                                      |                            |         |        |        |         |         |       
|                                                                                      |                                                                                                                      | 70,000 shares authorized; 19,549 shares and
    20,209 shares issued and outstanding at December 31,
    2003 and 2004, respectively |                            |         | 195    |        |         |         | 202    |        
|                                                                                      | Class B common stock; $.01 par value:                                                                                |                                                                                                                                      |                            |         |        |        |         |         |       
|                                                                                      |                                                                                                                      | 20,000 shares authorized; 4,638 shares and
    4,428 shares issued and outstanding at December 31,
    2003 and 2004, respectively   |                            |         | 46     |        |         |         | 44     |        
|                                                                                      | Paid-in capital                                                                                                      |                                                                                                                                      |                            | 106,262 |        |        |         | 107,773 |       
|                                                                                      | Accumulated deficit                                                                                                  |                                                                                                                                      |                            | (36,602 | )      |        |         | (41,914 | )     
|                                                                                      | Note receivable from shareholder (note 5)                                                                            |                                                                                                                                      |                            | (1,557  | )      |        |         |        |       
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|                                                                                      |                                                                                                                      |                                                                                                                                      | Subtotal                   |         |        | 68,344 |         |         |        | 66,105  | 
|Accumulated other comprehensive income  foreign
    currency translation adjustments |                                                                                                                      |                                                                                                                                      | 1,424                      |         |        |        | 3,497   |        
|Treasury stock (159,209 shares)                                                       |                                                                                                                      |                                                                                                                                      |                           |         |        |        | (882    | )      
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|                                                                                      |                                                                                                                      |                                                                                                                                      | Total shareholders equity |         |        | 69,768 |         |         |        | 68,720  | 
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       
|                                                                                      |                                                                                                                      | $                                                                                                                                    | 118,591                    |         |        | $      | 126,380 |        
|                                                                                      |                                                                                                                      |                                                                                                                                      |                            |         |        |       



42



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND
COMPREHENSIVE LOSS


Years ended December 31, 2002, 2003 and 2004


(In thousands)


|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |   |        |   |  |   |      |   |  |   |         |  
|------------------------------------------------------------------------- |  | --------- | - | ------------ | ------- | - | --- | ------- |  | - | ------------- | ---------- | ---- | ----------- | ------- | ------------- | ------------ | - | ------- | -------- |  | - | -------- | - |  | ----- | ------ | - | ----- | - | ------ | - |  | - | ---- | - |  | - | ------- | -
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      | Notes       |         |               | Accumulated  |   |         |          |  |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               | Receivable |      |             | Other   |               |              |   |         |         
|                                                                          |  |           |   | Common Stock |         |   |     |         |  |   |               |            | from |             |         | Comprehensive |              |   |         |          | 
|                                                                          |  | Preferred |   |              |         |   |     | Paid-in |  |   | Comprehensive |            |      | Accumulated |         |               | Shareholders |   |         | Income   |  |   | Treasury |   |  |      
|                                                                          |  | Stock     |   |              | Class A |   |     | Class B |  |   | Capital       |            |      | Loss        |         |               | Deficit      |   |         | (note 5) |  |   | (Loss)   |   |  | Stock |        |   | Total |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  
|Balances at December 31, 2001                                             |  |           |  |              |         | $ | 123 |         |  | $ | 84            |            |      | $           | 92,428  |               |              |   |         |          |  | $ | (1,409   | ) |  | $     | (2,325 | ) |       | $ | (3,097 | ) |  |   |     |   |  | $ | 85,804  |  
|Exercise/issuance of stock options                                        |  |           |  |              |         |   |    |         |  |   |              |            |      |             | 183     |               |              |   |         |          |  |   |         |   |  |       |       |   |       |   |       |   |  |   |     |   |  |   | 183     |  
|Issuance of common stock                                                  |  |           |  |              |         |   | 23  |         |  |   | (21           | )          |      |             | 1,521   |               |              |   |         |          |  |   |         |   |  |       |       |   |       |   |       |   |  |   |     |   |  |   | 1,523   |  
|Payment from shareholder                                                  |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   |         |          |  |   |         |   |  |       | 700    |   |       |   |       |   |  |   |     |   |  |   | 700     |  
|Net loss                                                                  |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              | $ | (28,670 | )        |  |   | (28,670  | ) |  |       |       |   |       |   |       |   |  |   |     |   |  |   | (28,670 | )
|Other comprehensive income  foreign currency
    translation adjustments |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   | 1,548   |          |  |   |         |   |  |       |       |   |       |   | 1,548  |   |  |   |     |   |  |   | 1,548   |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  
|Comprehensive loss                                                        |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              | $ | (27,122 | )        |  |   |         |   |  |       |       |   |       |   |       |   |  |   |     |   |  |   |        |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  
|Balances at December 31, 2002                                             |  |           |  |              |         |   | 146 |         |  |   | 63            |            |      |             | 94,132  |               |              |   |         |          |  |   | (30,079  | ) |  |       | (1,625 | ) |       |   | (1,549 | ) |  |   |     |   |  |   | 61,088  |  
|Exercise/issuance of stock options                                        |  |           |  |              |         |   | 2   |         |  |   |              |            |      |             | 588     |               |              |   |         |          |  |   |         |   |  |       |       |   |       |   |       |   |  |   |      |   |  |   | 590     |  
|Issuance of common stock                                                  |  |           |  |              |         |   | 47  |         |  |   | (17           | )          |      |             | 11,542  |               |              |   |         |          |  |   |         |   |  |       |       |   |       |   |       |   |  |   |     |   |  |   | 11,572  |  
|Payment from shareholder                                                  |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   |         |          |  |   |         |   |  |       | 68     |   |       |   |       |   |  |   |     |   |  |   | 68      |  
|Net loss                                                                  |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              | $ | (6,523  | )        |  |   | (6,523   | ) |  |       |       |   |       |   |       |   |  |   |     |   |  |   | (6,523  | )
|Other comprehensive income  foreign currency
    translation adjustments |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   | 2,973   |          |  |   |         |   |  |       |       |   |       |   | 2,973  |   |  |   |     |   |  |   | 2,973   |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  
|Comprehensive loss                                                        |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              | $ | (3,550  | )        |  |   |         |   |  |       |       |   |       |   |       |   |  |   |     |   |  |   |        |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  
|Balances at December 31, 2003                                             |  |           |  |              |         |   | 195 |         |  |   | 46            |            |      |             | 106,262 |               |              |   |         |          |  |   | (36,602  | ) |  |       | (1,557 | ) |       |   | 1,424  |   |  |   |     |   |  |   | 69,768  |  
|Exercise/issuance of stock options                                        |  |           |  |              |         |   | 5   |         |  |   |              |            |      |             | 1,410   |               |              |   |         |          |  |   |         |   |  |       |       |   |       |   |       |   |  |   |      |   |  |   | 1,415   |  
|Issuance of common stock                                                  |  |           |  |              |         |   | 2   |         |  |   | (2            | )          |      |             | 101     |               |              |   |         |          |  |   |         |   |  |       |       |   |       |   |       |   |  |   |     |   |  |   | 101     |  
|Discharge of shareholder note                                             |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   |         |          |  |   |         |   |  |       | 1,557  |   |       |   |       |   |  |   |     |   |  |   | 1,557   |  
|Net loss                                                                  |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   | (5,312  | )        |  |   | (5,312   | ) |  |       |       |   |       |   |       |   |  |   |     |   |  |   | (5,312  | )
|Other comprehensive income  foreign currency
    translation adjustments |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   | 2,073   |          |  |   |         |   |  |       |       |   |       |   | 2,073  |   |  |   |      |   |  |   | 2,073   |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  
|Treasury stock                                                            |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              |   |         |          |  |   |         |   |  |       |       |   |       |   |       |   |  |   | (882 | ) |  |   | (882    | )
|Comprehensive loss                                                        |  |           |  |              |         |   |    |         |  |   |              |            |      |             |        |               |              | $ | (3,239  | )        |  |   |         |   |  |       |       |   |       |   |       |   |  |   |     |   |  |   |        |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  
|Balances at December 31, 2004                                             |  |           |   |              |         | $ | 202 |         |  | $ | 44            |            |      | $           | 107,773 |               |              |   |         |          |  | $ | (41,914  | ) |  | $     |       |   |       | $ | 3,497  |   |  | $ | (882 | ) |  | $ | 68,720  |  
|                                                                          |  |           |   |              |         |   |     |         |  |   |               |            |      |             |         |               |              |   |         |          |  |   |          |   |  |       |        |   |       |  



43



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##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


Years ended December 31, 2002, 2003, and 2004


(In thousands)


|                                                                                |                                                        |                                         |         |        |        |   |         |        |         |   |        |         |         |  
|------------------------------------------------------------------------------- | ------------------------------------------------------ | --------------------------------------- | ------- | ------ | ------ | - | ------- | ------ | ------- | - | ------ | ------- | ------- | -
|                                                                                |                                                        | 2002                                    |         |        | 2003   |   |         | 2004   |        
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Cash flows from operating activities:                                           |                                                        |                                         |         |        |        |   |         |        |         |   |        |        
|Net loss                                                                        |                                                        | $                                       | (28,670 | )      |        | $ | (6,523  | )      |         | $ | (5,312 | )      
|Adjustments to reconcile net loss to net cash used in operating
    activities: |                                                        |                                         |         |        |        |   |         |        |         |   |        |        
|                                                                                | Depreciation and amortization                          |                                         |         | 2,884  |        |   |         | 3,860  |         |   |        | 2,715   |        
|                                                                                | Provision (recovery) for doubtful accounts (note 8)    |                                         |         | 4,317  |        |   |         | (2,419 | )       |   |        | 146     |        
|                                                                                | Non-cash compensation attributable to shareholder note |                                         |         |       |        |   |         |       |         |   |        | 675     |        
|                                                                                | Loss from investments in joint ventures, net           |                                         |         |       |        |   |         | 126    |         |   |        | 446     |        
|                                                                                | Impairment of assets                                   |                                         |         | 5,140  |        |   |         |       |         |   |        |        |        
|                                                                                | Restructuring charge (reversal)                        |                                         |         | 13,522 |        |   |         | (2     | )       |   |        | (1,166  | )      
|                                                                                | Gain on sale of tower portfolio                        |                                         |         | (2,000 | )      |   |         |       |         |   |        |        |        
|                                                                                | Changes in operating assets and liabilities:           |                                         |         |        |        |   |         |        |         |   |        |         |        
|                                                                                |                                                        | Trade, unbilled, and other receivables  |         |        | 10,963 |   |         |        | (34,732 | ) |        |         | (18,223 | )
|                                                                                |                                                        | Accounts payable and accrued expenses   |         |        | 902    |   |         |        | 13,666  |   |        |         | 12,763  |  
|                                                                                |                                                        | Other current assets and liabilities    |         |        | (8,560 | ) |         |        | 7,129   |   |        |         | 1,960   |  
|                                                                                |                                                        | Other noncurrent assets and liabilities |         |        | (1,328 | ) |         |        | (689    | ) |        |         | 1,413   |  
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Net cash used in operating activities                                           |                                                        |                                         | (2,830  | )      |        |   | (19,584 | )      |         |   | (4,583 | )      
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Cash flows from investing activities:                                           |                                                        |                                         |         |        |        |   |         |        |         |   |        |        
|                                                                                | Purchases of property and equipment                    |                                         |         | (2,854 | )      |   |         | (1,812 | )       |   |        | (2,839  | )      
|                                                                                | Proceeds from sale of property and equipment           |                                         |         | 34     |        |   |         | 69     |         |   |        | 30      |        
|                                                                                | Business acquisitions and investments                  |                                         |         | (9,021 | )      |   |         | (1,027 | )       |   |        | (360    | )      
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Net cash used in investing activities                                           |                                                        |                                         | (11,841 | )      |        |   | (2,770  | )      |         |   | (3,169 | )      
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Cash flows from financing activities:                                           |                                                        |                                         |         |        |        |   |         |        |         |   |        |        
|                                                                                | Proceeds from issuance of common stock, net            |                                         |         | 49     |        |   |         | 11,572 |         |   |        | 100     |        
|                                                                                | Purchases of short-term investments                    |                                         |         | (30    | )      |   |         | (20    | )       |   |        | 520     |        
|                                                                                | Proceeds from exercise of options                      |                                         |         | 109    |        |   |         | 590    |         |   |        | 1,416   |        
|                                                                                | Decrease (increase) in restricted cash                 |                                         |         | (1,308 | )      |   |         | (260   | )       |   |        | 406     |        
|                                                                                | Proceeds from line of credit                           |                                         |         |       |        |   |         | 10,831 |         |   |        | 21,230  |        
|                                                                                | Payments on line of credit                             |                                         |         |       |        |   |         | (8,991 | )       |   |        | (23,043 | )      
|                                                                                | Repayment of loan to shareholder                       |                                         |         | 700    |        |   |         | 68     |         |   |        |        |        
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Net cash provided by (used in) financing activities                             |                                                        |                                         | (480    | )      |        |   | 13,790  |        |         |   | 629    |        
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Net decrease in cash and cash equivalents                                       |                                                        |                                         | (15,151 | )      |        |   | (8,564  | )      |         |   | (7,123 | )      
|Cash and cash equivalents at beginning of period                                |                                                        |                                         | 52,658  |        |        |   | 37,507  |        |         |   | 28,943 |        
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Cash and cash equivalents at end of period                                      |                                                        | $                                       | 37,507  |        |        | $ | 28,943  |        |         | $ | 21,820 |        
|                                                                                |                                                        |                                         |         |        |        |   |         |        |        
|Supplemental disclosures of cash flow information:                              |                                                        |                                         |         |        |        |   |         |        |         |   |        |        
|                                                                                | Cash paid during the year for:                         |                                         |         |        |        |   |         |        |         |   |        |         |        
|                                                                                |                                                        | Interest                                |         | $      | 22     |   |         | $      | 47      |   |        | $       | 40      |  
|                                                                                |                                                        | Income taxes                            |         |        | 1,545  |   |         |        | 288     |   |        |         | 266     |  









44



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Years ended December 31, 2002, 2003 and 2004




|    |                          
|--- | -------------------------
|(1) | Description of Operations









|    |                                           
|--- | ------------------------------------------
|(2) | Summary of Significant Accounting Policies



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





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





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





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



|                    |  |                |        |  |      |   |        | 
|------------------- |  | -------------- | ------ |  | ---- | - | ------ | 
|                    |  | 2003           |        |  | 2004 |  
|                    |  |                |        |  |      |  
|                    |  | (In thousands) |       
|Europe              |  | $              | 10,922 |  |      | $ | 12,497 | 
|Middle East/ Africa |  | $              | 8,186  |  |      | $ | 13,257 | 
|Asia-Pacific        |  | $              |       |  |      | $ | 797    | 

45



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                                    
| | -----------------------------------
| | Fair Value of Financial Instruments





| |                       
| | ----------------------
| | Property and Equipment





|                               |  |                                                          
|------------------------------ |  | ---------------------------------------------------------
|Computer equipment             |  | 3 years                                                  
|Software                       |  | 3 years                                                  
|Furniture and office equipment |  | 3 to 7 years                                             
|Leasehold improvements         |  | Shorter of the term of the lease or estimated useful life
|Vehicles                       |  | 5 years                                                  



| |                                
| | -------------------------------
| | Impairment of Long-Lived Assets

Accounting for Impairment or
Disposal of Long-Lived Assets.




| |                                     
| | ------------------------------------
| | Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets,


46



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                          
| | -------------------------
| | Investments in Affiliates





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





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

Accounting for Income
Taxes.






| |                             
| | ----------------------------
| | Foreign Currency Translation





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



47



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






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

Accounting for
Stock Issued to Employees, Accounting for Stock-Based Compensation.




|                                                                                                    |                    |                                       |         |         |       |   |        |        |       |   |        |        |       |  
|--------------------------------------------------------------------------------------------------- | ------------------ | ------------------------------------- | ------- | ------- | ----- | - | ------ | ------ | ----- | - | ------ | ------ | ----- | -
|                                                                                                    |                    | 2002                                  |         |         | 2003  |   |        | 2004   |      
|                                                                                                    |                    |                                       |         |         |       |   |        |        |      
|                                                                                                    |                    | (In thousands, except per share data) |        
|Net loss as reported                                                                                |                    | $                                     | (28,670 | )       |       | $ | (6,523 | )      |       | $ | (5,312 | )     
|Deduct total stock-based employee compensation expense
    determined under fair value based method |                    |                                       | (2,562  | )       |       |   | (2,399 | )      |       |   | (2,236 | )     
|                                                                                                    |                    |                                       |         |         |       |   |        |        |      
|                                                                                                    | Pro forma net loss |                                       | $       | (31,232 | )     |   | $      | (8,922 | )     |   | $      | (7,548 | )    
|                                                                                                    |                    |                                       |         |         |       |   |        |        |      
|Net loss share                                                                                      |                    |                                       |         |         |       |   |        |        |       |   |        |       
|                                                                                                    | As reported:       |                                       |         |         |       |   |        |        |       |   |        |        |      
|                                                                                                    |                    | Basic                                 |         | $       | (1.37 | ) |        | $      | (0.31 | ) |        | $      | (0.22 | )
|                                                                                                    |                    | Diluted                               |         | $       | (1.37 | ) |        | $      | (0.31 | ) |        | $      | (0.22 | )
|                                                                                                    | Pro forma:         |                                       |         |         |       |   |        |        |       |   |        |        |      
|                                                                                                    |                    | Basic                                 |         | $       | (1.49 | ) |        | $      | (0.42 | ) |        | $      | (0.31 | )
|                                                                                                    |                    | Diluted                               |         | $       | (1.49 | ) |        | $      | (0.42 | ) |        | $      | (0.31 | )



| |                                  
| | ---------------------------------
| | Other Comprehensive Income (Loss)



|                                         |  |        |       |  |         |   |     |        |  |   |        |  |  |         |       |  |        |   |     |        |  |   |         |  |        |   |       |  |  |   |   |  |  |   |       | 
|---------------------------------------- |  | ------ | ----- |  | ------- | - | --- | ------ |  | - | ------ |  |  | ------- | ----- |  | ------ | - | --- | ------ |  | - | ------- |  | ------ | - | ----- |  |  | - | - |  |  | - | ----- | 
|                                         |  | 2002   |       |  | 2003    |   |     | 2004   | 
|                                         |  |        |       |  |         |   |     |        | 
|                                         |  | Pretax |       |  | Tax     |   |     | Net    |  |   | Pretax |  |  | Tax     |       |  | Net    |   |     | Pretax |  |   | Tax     |  | Net    |  
|                                         |  | Amount |       |  | Expense |   |     | Amount |  |   | Amount |  |  | Expense |       |  | Amount |   |     | Amount |  |   | Expense |  | Amount |  
|                                         |  |        |       |  |         |   |     |        |  |   |        |  |  |         |       |  |        |   |     |        |  |   |         |  |        |  
|Foreign currency translation adjustments |  | $      | 2,003 |  |         | $ | 455 |        |  | $ | 1,548  |  |  | $       | 3,649 |  |        | $ | 676 |        |  | $ | 2,973   |  |        | $ | 2,073 |  |  | $ |  |  |  | $ | 2,073 | 
|                                         |  |        |       |  |         |   |     |        |  |   |        |  |  |         |       |  |        |   |     |        |  |   |         |  |        |   |      

48



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements

Share-Based
Payment Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees.




|    |                                        
|--- | ---------------------------------------
|(3) | Tower Portfolio Sale and Administration









|    |                          
|--- | -------------------------
|(4) | Cash and Cash Equivalents



|               |  |      |        |  |      |   |        | 
|-------------- |  | ---- | ------ |  | ---- | - | ------ | 
|               |  | 2003 |        |  | 2004 |  
|               |  |      |        |  |      |  
|Cash in banks  |  | $    | 25,443 |  |      | $ | 21,820 | 
|Treasury bills |  |      | 3,500  |  |      |   |       | 
|               |  |      |        |  |      |  
|               |  | $    | 28,943 |  |      | $ | 21,820 | 
|               |  |      |        |  |      |  

49



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                           
|--- | --------------------------
|(5) | Related Party Transactions















50



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                       
|--- | ----------------------
|(6) | Property and Equipment



|                                               |  |                |         |   |      |   |         |  
|---------------------------------------------- |  | -------------- | ------- | - | ---- | - | ------- | -
|                                               |  | 2003           |         |   | 2004 |  
|                                               |  |                |         |   |      |  
|                                               |  | (In thousands) |        
|Computer equipment                             |  | $              | 15,195  |   |      | $ | 15,910  |  
|Software                                       |  |                | 3,075   |   |      |   | 4,816   |  
|Furniture and office equipment                 |  |                | 10,075  |   |      |   | 10,964  |  
|Leasehold improvements                         |  |                | 1,632   |   |      |   | 1,645   |  
|Vehicles                                       |  |                | 198     |   |      |   | 199     |  
|                                               |  |                |         |   |      |  
|                                               |  |                | 30,175  |   |      |   | 33,534  |  
|Less accumulated depreciation and amortization |  |                | (26,357 | ) |      |   | (29,316 | )
|                                               |  |                |         |   |      |  
|                                               |  | $              | 3,818   |   |      | $ | 4,218   |  
|                                               |  |                |         |   |      |  



|    |                     
|--- | --------------------
|(7) | Restructuring Charge



51



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                                                   |                                                          |                |       |      |            |   |        |        |   |   |        |        |  
|-------------------------------------------------- | -------------------------------------------------------- | -------------- | ----- | ---- | ---------- | - | ------ | ------ | - | - | ------ | ------ | -
|                                                   |                                                          | Severance      |       |      | Facilities |   |        | Total  |  
|                                                   |                                                          |                |       |      |            |   |        |        |  
|                                                   |                                                          | (in thousands) |      
|Restructuring charge                               |                                                          | $              | 1,030 |      |            | $ | 12,492 |        |   | $ | 13,522 |       
|Reclassification of deferred rent                  |                                                          |                |      |      |            |   | 639    |        |   |   | 639    |       
|                                                   |                                                          |                |       |      |            |   |        |        |  
|                                                   |                                                          |                | 1,030 |      |            |   | 13,131 |        |   |   | 14,161 |       
|Charges against the provision:                     |                                                          |                |       |      |            |   |        |        |   |   |        |       
|                                                   | Payments for excess office space, net of sublease income |                |       |     |            |   |        | (2,152 | ) |   |        | (2,152 | )
|                                                   | Severance and associated costs paid                      |                |       | (878 | )          |   |        |       |   |   |        | (878   | )
|                                                   | Leasehold improvements and other assets written-off      |                |       |     |            |   |        | (1,461 | ) |   |        | (1,461 | )
|                                                   | Other                                                    |                |       |     |            |   |        | 53     |   |   |        | 53     |  
|                                                   |                                                          |                |       |      |            |   |        |        |  
|Restructuring payable as of December 31, 2002      |                                                          | $              | 152   |      |            | $ | 9,571  |        |   | $ | 9,723  |       
|                                                   |                                                          |                |       |      |            |   |        |        |  
|Reversal of excess severance                       |                                                          |                | (152  | )    |            |   |       |        |   |   | (152   | )     
|Reversal for reoccupied space                      |                                                          |                |      |      |            |   | (385   | )      |   |   | (385   | )     
|Additional charge for reduction of sublease income |                                                          |                |      |      |            |   | 535    |        |   |   | 535    |       
|                                                   |                                                          |                |       |      |            |   |        |        |  
|                                                   | Restructuring charge                                     |                |       | (152 | )          |   |        | 150    |   |   |        | (2     | )
|Charges against the provision:                     |                                                          |                |       |      |            |   |        |        |   |   |        |       
|                                                   | Payments for excess office space, net of sublease income |                |       |     |            |   |        | (2,971 | ) |   |        | (2,971 | )
|                                                   | Leasehold improvements and other assets written-off      |                |       |     |            |   |        | (564   | ) |   |        | (564   | )
|                                                   | Other                                                    |                |       |     |            |   |        | 149    |   |   |        | 149    |  
|                                                   |                                                          |                |       |      |            |   |        |        |  
|Restructuring payable as of December 31, 2003      |                                                          | $              |      |      |            | $ | 6,335  |        |   | $ | 6,335  |       
|                                                   |                                                          |                |       |      |            |   |        |        |  
|Reversal for reoccupied space                      |                                                          |                |      |      |            |   | (1,166 | )      |   |   | (1,166 | )     
|Charges against the provision:                     |                                                          |                |       |      |            |   |        |        |   |   |        |       
|                                                   | Payments for excess office space, net of sublease income |                |       |     |            |   |        | (2,131 | ) |   |        | (2,131 | )
|                                                   | Leasehold improvements and other assets written-off      |                |       |     |            |   |        | (214   | ) |   |        | (214   | )
|                                                   | Other                                                    |                |       |     |            |   |        | 77     |   |   |        | 77     |  
|                                                   |                                                          |                |       |      |            |   |        |        |  
|Restructuring payable as of December 31, 2004      |                                                          | $              |      |      |            | $ | 2,901  |        |   | $ | 2,901  |       
|                                                   |                                                          |                |       |      |            |   |        |        |  

52



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                  |  |             |       |  |             |   |       | 
|--------------------------------- |  | ----------- | ----- |  | ----------- | - | ----- | 
|                                  |  | December 31 |       |  | December 31 |  
|                                  |  | 2003        |       |  | 2004        |  
|                                  |  |             |       |  |             |  
|Accrued restructuring current     |  | $           | 2,903 |  |             | $ | 1,562 | 
|Accrued restructuring non-current |  |             | 3,432 |  |             |   | 1,339 | 
|                                  |  |             |       |  |             |  
|Accrued restructuring total       |  | $           | 6,335 |  |             | $ | 2,901 | 
|                                  |  |             |       |  |             |  



|    |                        
|--- | -----------------------
|(8) | Recovery of Receivables







|    |                                                 
|--- | ------------------------------------------------
|(9) | Impairment of Investments and Business Disposals









|     |            
|---- | -----------
|(10) | Investments



53



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##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|     |                      
|---- | ---------------------
|(11) | Business Combinations



54



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|     |  |                      |     | 
|---- |  | -------------------- | --- | 
|     |  | Amortization Expense |    
|     |  |                      |    
|2005 |  | $                    | 261 | 
|2006 |  | $                    | 261 | 
|2007 |  | $                    | 58  | 
|     |  |                      |    
|     |  | $                    | 580 | 
|     |  |                      |    

55



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                   |                          |                   |        |        |      |   |        |        |     | 
|------------------ | ------------------------ | ----------------- | ------ | ------ | ---- | - | ------ | ------ | --- | 
|                   |                          | 2003              |        |        | 2004 |  
|                   |                          |                   |        |        |      |  
|Goodwill           |                          | $                 | 11,115 |        |      | $ | 12,246 |       
|                   |                          |                   |        |        |      |  
|Other intangibles: |                          |                   |        |        |      |   |        |       
|                   | Backlog                  |                   | $      | 940    |      |   | $      | 1,028  |    
|                   | Customer relationships   |                   |        | 998    |      |   |        | 1,092  |    
|                   | Trade names              |                   |        | 190    |      |   |        | 213    |    
|                   | Organizational Cost      |                   |        |       |      |   |        | 21     |    
|                   | Accumulated amortization |                   |        | (1,285 | )    |   |        | (1,752 | )  
|                   |                          |                   |        |        |      |  
|                   |                          | Other intangibles |        | $      | 843  |   |        | $      | 602 | 
|                   |                          |                   |        |        |      |  



|                                         |  |      |         |  
|---------------------------------------- |  | ---- | ------- | -
|                                         |  | 2002 |        
|                                         |  |      |        
|Revenues                                 |  | $    | 68,146  |  
|Loss from operations before income taxes |  | $    | (36,845 | )
|Net loss                                 |  | $    | (28,393 | )
|Net loss per share:                      |  |      |         |  
|Basic                                    |  | $    | (1.36   | )
|Diluted                                  |  | $    | (1.36   | )



|     |               
|---- | --------------
|(12) | Line of Credit



56



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |             
|---- | ------------
|(13) | Income Taxes



|          |                 |                |        |        |        |   |      |      |        |   |       |       |       | 
|--------- | --------------- | -------------- | ------ | ------ | ------ | - | ---- | ---- | ------ | - | ----- | ----- | ----- | 
|          |                 | 2002           |        |        | 2003   |   |      | 2004 |       
|          |                 |                |        |        |        |   |      |      |       
|          |                 | (in thousands) |       
|Current:  |                 |                |        |        |        |   |      |      |        |   |       |      
|          | Federal         |                | $      | (8,885 | )      |   | $    | (633 | )      |   | $     |      |      
|          | State and local |                |        | (560   | )      |   |      |     |        |   |       | 215   |      
|          | Foreign         |                |        | 590    |        |   |      | (332 | )      |   |       | 1,194 |      
|          |                 |                |        |        |        |   |      |      |       
|          |                 |                | (8,855 | )      |        |   | (965 | )    |        |   | 1,409 |      
|          |                 |                |        |        |        |   |      |      |       
|Deferred: |                 |                |        |        |        |   |      |      |        |   |       |      
|          | Federal         |                |        | 433    |        |   |      | (442 | )      |   |       | 3,216 |      
|          | State and local |                |        | (29    | )      |   |      | (76  | )      |   |       | 590   |      
|          |                 |                |        |        |        |   |      |      |       
|          |                 |                | 404    |        |        |   | (518 | )    |        |   | 3,806 |      
|          |                 |                |        |        |        |   |      |      |       
|          |                 | Total          |        | $      | (8,451 | ) |      | $    | (1,483 | ) |       | $     | 5,215 | 
|          |                 |                |        |        |        |   |      |      |       





|         |       |                |         |         |      |   |        |        |   |   |      |     |  
|-------- | ----- | -------------- | ------- | ------- | ---- | - | ------ | ------ | - | - | ---- | --- | -
|         |       | 2002           |         |         | 2003 |   |        | 2004   |  
|         |       |                |         |         |      |   |        |        |  
|         |       | (in thousands) |        
|Domestic |       | $              | (30,613 | )       |      | $ | (5,509 | )      |   | $ | 639  |    
|Foreign  |       |                | (6,508  | )       |      |   | (2,497 | )      |   |   | (736 | )  
|         |       |                |         |         |      |   |        |        |  
|         | Total |                | $       | (37,121 | )    |   | $      | (8,006 | ) |   | $    | (97 | )
|         |       |                |         |         |      |   |        |        |  



|                                                             |                                                          |      |         |       |      |   |        |       |   |   |       |        |  
|------------------------------------------------------------ | -------------------------------------------------------- | ---- | ------- | ----- | ---- | - | ------ | ----- | - | - | ----- | ------ | -
|                                                             |                                                          | 2002 |         |       | 2003 |   |        | 2004  |  
|                                                             |                                                          |      |         |       |      |   |        |       |  
|Tax provision (benefit) at statutory federal income tax rate |                                                          | $    | (12,992 | )     |      | $ | (2,802 | )     |   | $ | (34   | )     
|Effect of:                                                   |                                                          |      |         |       |      |   |        |       |   |   |       |       
|                                                             | State and local income taxes, net of federal tax benefit |      |         | (383  | )    |   |        | (114  | ) |   |       | 523    |  
|                                                             | Foreign and tax credits                                  |      |         | 2,868 |      |   |        | (753  | ) |   |       | (1,371 | )
|                                                             | Non deductible expenses and permanent items              |      |         | 356   |      |   |        | 174   |   |   |       | 524    |  
|                                                             | Other                                                    |      |         | 359   |      |   |        | (96   | ) |   |       | (583   | )
|                                                             | Valuation allowance of deferred tax assets               |      |         | 1,341 |      |   |        | 2,108 |   |   |       | 6,156  |  
|                                                             |                                                          |      |         |       |      |   |        |       |  
|Effective income tax provision (benefit)                     |                                                          | $    | (8,451  | )     |      | $ | (1,483 | )     |   | $ | 5,215 |       
|                                                             |                                                          |      |         |       |      |   |        |       |  

57



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                               |                                           |                                  |        |       |        |   |         |       |        |  
|---------------------------------------------- | ----------------------------------------- | -------------------------------- | ------ | ----- | ------ | - | ------- | ----- | ------ | -
|                                               |                                           | 2003                             |        |       | 2004   |  
|                                               |                                           |                                  |        |       |        |  
|                                               |                                           | (In thousands)                   |       
|Deferred tax assets:                           |                                           |                                  |        |       |        |   |         |      
|                                               | Accrued compensation                      |                                  | $      | 1,340 |        |   | $       | 768   |       
|                                               | Accrued expenses                          |                                  |        | 3,936 |        |   |         | 2,344 |       
|                                               | Foreign tax credit carry-forward          |                                  |        | 3,049 |        |   |         | 3,049 |       
|                                               | Foreign net operating loss carry-forwards |                                  |        | 3,932 |        |   |         | 6,505 |       
|                                               | Research tax credit carryover             |                                  |        | 340   |        |   |         | 340   |       
|                                               | Alternative minimum tax credit            |                                  |        | 519   |        |   |         | 519   |       
|                                               | Net operating loss carryover              |                                  |        | 1,459 |        |   |         | 3,515 |       
|                                               | Other                                     |                                  |        | 176   |        |   |         | 86    |       
|                                               |                                           |                                  |        |       |        |  
|                                               |                                           | Total gross deferred tax assets  |        |       | 14,751 |   |         |       | 17,126 |  
|Less valuation allowance                       |                                           |                                  | (8,321 | )     |        |   | (14,477 | )    
|                                               |                                           |                                  |        |       |        |  
|Deferred tax assets net of valuation allowance |                                           |                                  | 6,430  |       |        |   | 2,649   |      
|                                               |                                           |                                  |        |       |        |  
|Deferred tax liabilities:                      |                                           |                                  |        |       |        |   |         |      
|                                               | Property and equipment                    |                                  |        | (585  | )      |   |         | (812  | )     
|                                               | Deferred revenue                          |                                  |        | (147  | )      |   |         | (144  | )     
|                                               | Other                                     |                                  |        | (744  | )      |   |         | (545  | )     
|                                               |                                           |                                  |        |       |        |  
|                                               |                                           | Total gross deferred liabilities |        |       | (1,476 | ) |         |       | (1,501 | )
|                                               |                                           |                                  |        |       |        |  
|Net deferred tax assets                        |                                           | $                                | 4,954  |       |        | $ | 1,148   |      
|                                               |                                           |                                  |        |       |        |  



|                  |  |      |       |  |      |   |       | 
|----------------- |  | ---- | ----- |  | ---- | - | ----- | 
|                  |  | 2003 |       |  | 2004 |  
|                  |  |      |       |  |      |  
|Current asset     |  | $    | 3,547 |  |      | $ | 1,148 | 
|Non-current asset |  |      | 1,407 |  |      |   |      | 
|                  |  |      |       |  |      |  
|                  |  | $    | 4,954 |  |      | $ | 1,148 | 
|                  |  |      |       |  |      |  







58



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##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|     |                            
|---- | ---------------------------
|(14) | Health and Retirement Plans











59



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|     |                
|---- | ---------------
|(15) | Incentive Plans





|                        |  |      |           |  |      |  |            |      |  |  |            | 
|----------------------- |  | ---- | --------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                        |  | 2002 |           |  | 2003 |  |            | 2004 | 
|                        |  |      |           |  |      |  |            |      | 
|Expected dividend yield |  |      | 0%        |  |      |  | 0%         |      |  |  | 0%         | 
|Risk-free interest rate |  |      | 4.0%      |  |      |  | 3.254.05% |      |  |  | 4.004.40% | 
|Expected life           |  |      | 27 years |  |      |  | 37 years  |      |  |  | 37 years  | 
|Volatility              |  |      | 55115%   |  |      |  | 4085%     |      |  |  | 3898%     | 



|                        |  |      |          |  |      |  |            |      |  |  |            | 
|----------------------- |  | ---- | -------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                        |  | 2002 |          |  | 2003 |  |            | 2004 | 
|                        |  |      |          |  |      |  |            |      | 
|Expected dividend yield |  |      | 0%       |  |      |  | 0%         |      |  |  | 0%         | 
|Risk-free interest rate |  |      | 1.1%     |  |      |  | 0.951.00% |      |  |  | 0.902.10% | 
|Expected life           |  |      | 1  month |  |      |  | 1 month    |      |  |  | 1 month    | 
|Volatility              |  |      | 55115%  |  |      |  | 4080%     |      |  |  | 3893%     | 







60



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##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








61



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                             |  |                |        |           |                |   |                |           |           |  |                |                |  |           |      |  |                |  |        |   |  |   |      | 
|---------------------------- |  | -------------- | ------ | --------- | -------------- | - | -------------- | --------- | --------- |  | -------------- | -------------- |  | --------- | ---- |  | -------------- |  | ------ | - |  | - | ---- | 
|                             |  | 2002           |        |           | 2003           |   |                | 2004      |          
|                             |  |                |        |           |                |   |                |           |          
|                             |  |                |        | Weighted- |                |   |                |           | Weighted- |  |                |                |  | Weighted- |     
|                             |  | Number of      |        |           | Average        |   |                | Number of |           |  | Average        |                |  | Number of |      |  | Average        | 
|                             |  | Shares         |        |           | Exercise Price |   |                | Shares    |           |  | Exercise Price |                |  | Shares    |      |  | Exercise Price | 
|                             |  |                |        |           |                |   |                |           |           |  |                |                |  |           |      |  |                | 
|                             |  | (in thousands) |        |           |                |   | (in thousands) |           |           |  |                | (in thousands) |  |           |     
|Balance at beginning of year |  |                | 3,596  |           |                | $ | 9.83           |           |           |  | 4,376          |                |  | $         | 7.18 |  |                |  | 4,421  |   |  | $ | 6.03 | 
|Granted                      |  |                | 2,097  |           |                |   | 3.14           |           |           |  | 1,269          |                |  |           | 2.56 |  |                |  | 1,199  |   |  |   | 5.89 | 
|Exercised                    |  |                | (22    | )         |                |   | 4.84           |           |           |  | (155           | )              |  |           | 3.14 |  |                |  | (423   | ) |  |   | 2.86 | 
|Cancelled                    |  |                | (1,295 | )         |                |   | 8.05           |           |           |  | (1,069         | )              |  |           | 7.03 |  |                |  | (1,447 | ) |  |   | 9.05 | 
|                             |  |                |        |           |                |   |                |           |           |  |                |                |  |           |      |  |                | 
|Balance at end of year       |  |                | 4,376  |           |                |   | 7.18           |           |           |  | 4,421          |                |  |           | 6.03 |  |                |  | 3,750  |   |  |   | 5.17 | 
|                             |  |                |        |           |                |   |                |           |           |  |                |                |  |           |      |  |                | 
|Exercisable at end of year   |  |                | 2,369  |           |                |   | 8.91           |           |           |  | 2,474          |                |  |           | 8.03 |  |                |  | 2,128  |   |  |   | 5.94 | 
|                             |  |                |        |           |                |   |                |           |           |  |                |                |  |           |      |  |                | 



|                |  |                     |       |               |                     |  |      |                |  |                |                   |  |  |          |       |  |  |   |       | 
|--------------- |  | ------------------- | ----- | ------------- | ------------------- |  | ---- | -------------- |  | -------------- | ----------------- |  |  | -------- | ----- |  |  | - | ----- | 
|                |  | Options Outstanding |       |               | Options Exercisable | 
|                |  |                     |       |               |                     | 
|                |  |                     |       | Weighted Avg. |                     |  |      |                |  |                | Weighted Avg.     | 
|Range of        |  | Number at           |       |               | Remaining           |  |      | Weighted Avg.  |  |                | Number at         |  |  | Exercise |      
|Exercise Prices |  | December 31, 2004   |       |               | Contractual Life    |  |      | Exercise Price |  |                | December 31, 2004 |  |  | Price    |      
|                |  |                     |       |               |                     |  |      |                |  |                |                   |  |  |          |      
|                |  | (in thousands)      |       |               | (In years)          |  |      |                |  | (in thousands) |                   |  | 
|$1.67   2.12   |  |                     | 456   |               |                     |  | 7.57 |                |  | $              | 2.06              |  |  |          | 224   |  |  | $ | 2.07  | 
|$2.20   2.38   |  |                     | 600   |               |                     |  | 8.10 |                |  |                | 2.38              |  |  |          | 159   |  |  |   | 2.38  | 
|$2.45   4.35   |  |                     | 560   |               |                     |  | 6.66 |                |  |                | 3.46              |  |  |          | 399   |  |  |   | 3.46  | 
|$4.54   5.64   |  |                     | 580   |               |                     |  | 4.44 |                |  |                | 5.16              |  |  |          | 509   |  |  |   | 5.15  | 
|$5.75   5.76   |  |                     | 137   |               |                     |  | 4.84 |                |  |                | 5.75              |  |  |          | 132   |  |  |   | 5.75  | 
|$5.84   5.84   |  |                     | 883   |               |                     |  | 9.23 |                |  |                | 5.84              |  |  |          | 289   |  |  |   | 5.84  | 
|$5.90  19.81   |  |                     | 534   |               |                     |  | 6.24 |                |  |                | 11.49             |  |  |          | 416   |  |  |   | 12.88 | 
|                |  |                     |       |               |                     |  |      |                |  |                |                   |  |  |          |      
|                |  |                     | 3,750 |               |                     |  | 7.14 |                |  |                | 5.17              |  |  |          | 2,128 |  |  |   | 5.94  | 
|                |  |                     |       |               |                     |  |      |                |  |                |                   |  |  |          |      



|     |                  
|---- | -----------------
|(16) | Lease Commitments





62



---



##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|           |  |                |        |                    |                 |   |       | 
|---------- |  | -------------- | ------ | ------------------ | --------------- | - | ----- | 
|           |  |                |        | Rental Receivables |                
|           |  | Rental Payable |        |                    | Under Subleases |  
|           |  |                |        |                    |                 |  
|           |  | (In thousands) |       
|2005       |  | $              | 6,054  |                    |                 | $ | 1,341 | 
|2006       |  |                | 5,457  |                    |                 |   | 1,938 | 
|2007       |  |                | 3,131  |                    |                 |   | 1,047 | 
|2008       |  |                | 807    |                    |                 |   | 405   | 
|2009       |  |                | 628    |                    |                 |   | 405   | 
|Thereafter |  |                | 2,733  |                    |                 |   | 2,024 | 
|           |  |                |        |                    |                 |  
|           |  | $              | 18,810 |                    |                 | $ | 7,160 | 
|           |  |                |        |                    |                 |  





|     |                              
|---- | -----------------------------
|(17) | Commitments and Contingencies





|     |                        
|---- | -----------------------
|(18) | Income (Loss) Per Share

Earnings per
Share


|                                          |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |        |        |   |  |        |        |  |   |       |       |  
|----------------------------------------- | ----------------------------------------------------------------- | ------------------------------------- | ------- | --------- | ------ |  | ------ | ------ |  | - | ----- | --------- | - | ------ | ------ | ------ | ------ |  | ------ | --------- |  | - | ------ | ----- | - | ------ | ------ | ------ | - |  | ------ | ------ |  | - | ----- | ----- | -
|                                          |                                                                   | 2002                                  |         |           | 2003   |  |        | 2004   | 
|                                          |                                                                   |                                       |         |           |        |  |        |        | 
|                                          |                                                                   |                                       |         | Per Share |        |  | Net    |        |  |   |       | Per Share |   |        | Net    |        |        |  |        | Per Share | 
|                                          |                                                                   | Net Loss                              |         |           | Shares |  |        | Amount |  |   | Loss  |           |   | Shares |        |        | Amount |  |        | Loss      |  |   | Shares |       |   | Amount |       
|                                          |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |       
|                                          |                                                                   | (In thousands, except per share data) |        
|Basic EPS                                 |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |        |        |   |  |        |        |  |   |       |      
|Net loss available to common shareholders |                                                                   | $                                     | (28,670 | )         |        |  | 20,902 |        |  | $ | (1.37 | )         |   | $      | (6,523 | )      |        |  | 21,292 |           |  | $ | (0.31  | )     |   | $      | (5,312 | )      |   |  | 24,381 |        |  | $ | (0.22 | )    
|                                          |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |       
|Effect of Dilutive Securities             |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |        |        |   |  |        |        |  |   |       |      
|                                          | Stock option plans                                                |                                       |         |           |        |  |        |       |  |   |       |           |   |        |        |        |        |  |        |          |  |   |        |       |   |        |        |        |   |  |        |       |  |   |       |       |  
|                                          |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |       
|Dilutive EPS                              |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |        |        |   |  |        |        |  |   |       |      
|                                          | Net loss available to common shareholders and assumed conversions |                                       | $       | (28,670   | )      |  |        | 20,902 |  |   | $     | (1.37     | ) |        | $      | (6,523 | )      |  |        | 21,292    |  |   | $      | (0.31 | ) |        | $      | (5,312 | ) |  |        | 24,381 |  |   | $     | (0.22 | )
|                                          |                                                                   |                                       |         |           |        |  |        |        |  |   |       |           |   |        |        |        |        |  |        |           |  |   |        |       |   |        |       



63



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##### 



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                  
|---- | -----------------
|(19) | Segment Reporting

Disclosures about Segments of an
Enterprise and Related Information






64



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LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Operating Segments:


(In thousands)


|     |                                     |                |   |         |         |  |   |        |        |  |   |         |         | 
|---- | ----------------------------------- | -------------- | - | ------- | ------- |  | - | ------ | ------ |  | - | ------- | ------- | 
|     |                                     | Americas       |   |         | EMEA    |  |   | Total  |       
|     |                                     |                |   |         |         |  |   |        |       
|2002 |                                     |                |   |         |         |  |   |        |        |  |   |        
|     | Net revenue from external customers |                | $ | 29,706  |         |  | $ | 34,755 |        |  | $ | 64,461  |        
|     | Intersegment revenues               |                |   |        |         |  |   |       |        |  |   |        |        
|     |                                     |                |   |         |         |  |   |        |       
|     |                                     | Total revenues |   | $       | 29,706  |  |   | $      | 34,755 |  |   | $       | 64,461  | 
|     |                                     |                |   |         |         |  |   |        |       
|     | Depreciation and amortization       |                | $ | 717     |         |  | $ | 1,372  |        |  | $ | 2,089   |        
|     | Interest income                     |                |   | 62      |         |  |   | 41     |        |  |   | 103     |        
|     | Interest expense                    |                |   | 15      |         |  |   |       |        |  |   | 15      |        
|     | Loss before taxes                   |                |   | (4,244  | )       |  |   | (5,038 | )      |  |   | (9,282  | )      
|     | Segment assets                      |                |   | 7,153   |         |  |   | 37,942 |        |  |   | 45,095  |        
|     | Expenditures for property           |                |   | 50      |         |  |   | 2,242  |        |  |   | 2,292   |        
|2003 |                                     |                |   |         |         |  |   |        |        |  |   |        
|     | Net revenue from external customers |                | $ | 53,086  |         |  | $ | 53,296 |        |  | $ | 106,382 |        
|     | Intersegment revenues               |                |   |        |         |  |   |       |        |  |   |        |        
|     |                                     |                |   |         |         |  |   |        |       
|     |                                     | Total revenues |   | $       | 53,086  |  |   | $      | 53,296 |  |   | $       | 106,382 | 
|     |                                     |                |   |         |         |  |   |        |       
|     | Depreciation and amortization       |                | $ | 401     |         |  | $ | 2,873  |        |  | $ | 3,274   |        
|     | Interest income                     |                |   | 23      |         |  |   | 143    |        |  |   | 166     |        
|     | Interest expense                    |                |   | 6       |         |  |   | 116    |        |  |   | 122     |        
|     | Income before taxes                 |                |   | 1,821   |         |  |   | 573    |        |  |   | 2,394   |        
|     | Segment assets                      |                |   | 33,043  |         |  |   | 51,368 |        |  |   | 84,411  |        
|     | Expenditures for property           |                |   | 707     |         |  |   | 1,040  |        |  |   | 1,747   |        
|2004 |                                     |                |   |         |         |  |   |        |        |  |   |        
|     | Net revenue from external customers |                | $ | 115,344 |         |  | $ | 78,285 |        |  | $ | 193,629 |        
|     | Intersegment revenues               |                |   |        |         |  |   |       |        |  |   |        |        
|     |                                     |                |   |         |         |  |   |        |       
|     |                                     | Total revenues |   | $       | 115,344 |  |   | $      | 78,285 |  |   | $       | 193,629 | 
|     |                                     |                |   |         |         |  |   |        |       
|     | Depreciation and amortization       |                | $ | 493     |         |  | $ | 1,817  |        |  | $ | 2,310   |        
|     | Interest income                     |                |   | 27      |         |  |   | 29     |        |  |   | 56      |        
|     | Interest expense                    |                |   | 6       |         |  |   | 243    |        |  |   | 249     |        
|     | Income before taxes                 |                |   | 10,509  |         |  |   | 964    |        |  |   | 11,473  |        
|     | Segment assets                      |                |   | 41,924  |         |  |   | 62,789 |        |  |   | 104,713 |        
|     | Expenditures for property           |                |   | 817     |         |  |   | 1836   |        |  |   | 2,653   |        

65



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LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                          |                                                 |                                 |        |        |        |   |         |         |        |   |         |         |        | 
|------------------------- | ----------------------------------------------- | ------------------------------- | ------ | ------ | ------ | - | ------- | ------- | ------ | - | ------- | ------- | ------ | 
|                          |                                                 | 2002                            |        |        | 2003   |   |         | 2004    |       
|                          |                                                 |                                 |        |        |        |   |         |         |       
|Revenues                  |                                                 |                                 |        |        |        |   |         |         |        |   |         |        
|                          | Revenues for reportable segments                |                                 | $      | 64,461 |        |   | $       | 106,382 |        |   | $       | 193,629 |       
|                          | Revenues for non-reportable segments            |                                 |        | 2,608  |        |   |         | 2,057   |        |   |         | 4,978   |       
|                          | Eliminations                                    |                                 |        |       |        |   |         |        |        |   |         |        |       
|                          |                                                 |                                 |        |        |        |   |         |         |       
|                          | Total consolidated revenues                     |                                 | $      | 67,069 |        |   | $       | 108,439 |        |   | $       | 198,607 |       
|                          |                                                 |                                 |        |        |        |   |         |         |       
|Assets                    |                                                 |                                 |        |        |        |   |         |         |        |   |         |        
|                          | Total assets for reportable segments            |                                 | $      | 45,095 |        |   | $       | 84,411  |        |   | $       | 104,713 |       
|                          | Assets not attributable to reportable segments: |                                 |        |        |        |   |         |         |        |   |         |         |       
|                          |                                                 | Cash and cash equivalents       |        |        | 34,405 |   |         |         | 25,225 |   |         |         | 15,874 | 
|                          |                                                 | Restricted cash                 |        |        |       |   |         |         |       |   |         |         | 232    | 
|                          |                                                 | Short-term investments          |        |        | 514    |   |         |         | 520    |   |         |         |       | 
|                          |                                                 | Deferred and prepaid tax assets |        |        | 12,720 |   |         |         | 5,616  |   |         |         | 1,832  | 
|                          |                                                 | Property and equipment          |        |        | 1,612  |   |         |         | 1,048  |   |         |         | 834    | 
|                          |                                                 | Receivables                     |        |        | 624    |   |         |         | 333    |   |         |         | 1,946  | 
|                          |                                                 | Prepaids                        |        |        | 1,480  |   |         |         | 550    |   |         |         | 230    | 
|                          |                                                 | Investments                     |        |        |       |   |         |         | 764    |   |         |         | 662    | 
|                          |                                                 | Related parties                 |        |        | 10     |   |         |         | 45     |   |         |         | 57     | 
|                          |                                                 | Other                           |        |        | 263    |   |         |         | 79     |   |         |         |        | 
|                          |                                                 |                                 |        |        |        |   |         |         |       
|Total consolidated assets |                                                 | $                               | 96,723 |        |        | $ | 118,591 |         |        | $ | 126,380 |        
|                          |                                                 |                                 |        |        |        |   |         |         |       

|                                                          |                                                         |      |         |         |      |   |        |         |   |   |        |         |  
|--------------------------------------------------------- | ------------------------------------------------------- | ---- | ------- | ------- | ---- | - | ------ | ------- | - | - | ------ | ------- | -
|                                                          |                                                         | 2002 |         |         | 2003 |   |        | 2004    |  
|                                                          |                                                         |      |         |         |      |   |        |         |  
|Income (loss) before income taxes for reportable segments |                                                         | $    | (9,282  | )       |      | $ | 2,394  |         |   | $ | 11,473 |        
|                                                          | Gain on sale of tower portfolio and administration, net |      |         | 2,000   |      |   |        |        |   |   |        |        |  
|                                                          | Restructuring charge                                    |      |         | (13,522 | )    |   |        | 2       |   |   |        | 1,166   |  
|                                                          | Impairment of investments                               |      |         | (5,139  | )    |   |        |        |   |   |        |        |  
|                                                          | Bankruptcy recoveries                                   |      |         | 1,589   |      |   |        |        |   |   |        |        |  
|                                                          | General corporate expenses                              |      |         | (12,767 | )    |   |        | (10,402 | ) |   |        | (12,736 | )
|                                                          |                                                         |      |         |         |      |   |        |         |  
|Loss from operations before income taxes                  |                                                         | $    | (37,121 | )       |      | $ | (8,006 | )       |   | $ | (97    | )      
|                                                          |                                                         |      |         |         |      |   |        |         |  

|                        |                               |         |   |       |              |  |   |              |  |              |   |   |  |  |   |       | 
|----------------------- | ----------------------------- | ------- | - | ----- | ------------ |  | - | ------------ |  | ------------ | - | - |  |  | - | ----- | 
|                        |                               | Segment |   |       | Unallocated  |  |   |              |  | Consolidated |  
|Other Significant Items |                               | Total   |   |       | Expenditures |  |   | Eliminations |  | Total        |  
|                        |                               |         |   |       |              |  |   |              |  |              |  
|2002                    |                               |         |   |       |              |  |   |              |  |              |   |   |  |  |   |      
|                        | Depreciation and amortization |         | $ | 2,089 |              |  | $ | 795          |  |              | $ |  |  |  | $ | 2,884 | 
|                        | Interest income               |         |   | 103   |              |  |   | 737          |  |              |   |  |  |  |   | 840   | 
|                        | Interest expense              |         |   | 15    |              |  |   | 7            |  |              |   |  |  |  |   | 22    | 
|                        | Expenditures for property     |         |   | 2,292 |              |  |   | 562          |  |              |   |  |  |  |   | 2,854 | 
|2003                    |                               |         |   |       |              |  |   |              |  |              |   |   |  |  |   |      
|                        | Depreciation and amortization |         | $ | 3,274 |              |  | $ | 586          |  |              | $ |  |  |  | $ | 3,860 | 
|                        | Interest income               |         |   | 166   |              |  |   | 281          |  |              |   |  |  |  |   | 447   | 
|                        | Interest expense              |         |   | 122   |              |  |   |             |  |              |   |  |  |  |   | 122   | 
|                        | Expenditures for property     |         |   | 1,747 |              |  |   | 65           |  |              |   |  |  |  |   | 1,812 | 
|2004                    |                               |         |   |       |              |  |   |              |  |              |   |   |  |  |   |      
|                        | Depreciation and amortization |         | $ | 2,310 |              |  | $ | 405          |  |              | $ |  |  |  | $ | 2,715 | 
|                        | Interest income               |         |   | 56    |              |  |   | 118          |  |              |   |  |  |  |   | 174   | 
|                        | Interest expense              |         |   | 249   |              |  |   | 4            |  |              |   |  |  |  |   | 253   | 
|                        | Expenditures for property     |         |   | 2,653 |              |  |   | 186          |  |              |   |  |  |  |   | 2,839 | 

66



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LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                           |  |      |        |  |      |   |         |      |  |   |         | 
|-------------------------- |  | ---- | ------ |  | ---- | - | ------- | ---- |  | - | ------- | 
|                           |  | 2002 |        |  | 2003 |   |         | 2004 | 
|                           |  |      |        |  |      |   |         |      | 
|Design                     |  | $    | 27,202 |  |      | $ | 32,584  |      |  | $ | 56,078  | 
|Deployment                 |  |      | 36,493 |  |      |   | 64,212  |      |  |   | 117,402 | 
|Operations and maintenance |  |      | 1,089  |  |      |   | 3,135   |      |  |   | 8,569   | 
|Consulting                 |  |      | 2,285  |  |      |   | 8,508   |      |  |   | 16,558  | 
|                           |  |      |        |  |      |   |         |      | 
|Total revenues             |  | $    | 67,069 |  |      | $ | 108,439 |      |  | $ | 198,607 | 
|                           |  |      |        |  |      |   |         |      | 



|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |   |         |         |         |   |       |       |       | 
|------------------------------- | ------------------------ | ------------------------------------ | ------ | ------ | -------- | - | ----- | -------- | ----- | - | -------- | ------ | ------ | -------- | ----- | ----- | -------- | - | ------- | ------- | ------- | - | ----- | ----- | ----- | 
|                                |                          | 2002                                 |        |        | 2003     |   |       | 2004     |      
|                                |                          |                                      |        |        |          |   |       |          |      
|                                |                          |                                      |        | Net    |          |   |       |          | Net   |   |          |        |        | Net      |      
|                                |                          | Revenues                             |        |        | Property |   |       | Revenues |       |   | Property |        |        | Revenues |       |       | Property |  
|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |  
|Americas:                       |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |   |         |         |         |   |       |      
|                                | United States of America |                                      | $      | 28,812 |          |   | $     | 1,978    |       |   | $        | 53,137 |        |          | $     | 1,706 |          |   | $       | 116,520 |         |   | $     | 1,605 |      
|                                | Other                    |                                      |        | 1,807  |          |   |       | 95       |       |   |          | 1,017  |        |          |       | 81    |          |   |         | 2,910   |         |   |       | 82    |      
|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |  
|                                |                          | Total Americas                       |        |        | 30,619   |   |       |          | 2,073 |   |          |        | 54,154 |          |       |       | 1,787    |   |         |         | 119,430 |   |       |       | 1,687 | 
|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |  
|Europe, Middle East and Africa: |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |   |         |         |         |   |       |      
|                                | United Kingdom           |                                      |        | 14,864 |          |   |       | 1,430    |       |   |          | 14,594 |        |          |       | 603   |          |   |         | 17,157  |         |   |       | 279   |      
|                                | Netherlands              |                                      |        | 10,425 |          |   |       | 230      |       |   |          | 12,977 |        |          |       | 317   |          |   |         | 18,892  |         |   |       | 352   |      
|                                | Italy                    |                                      |        | 5,686  |          |   |       | 1,215    |       |   |          | 12,484 |        |          |       | 1,023 |          |   |         | 8,993   |         |   |       | 617   |      
|                                | Algeria                  |                                      |        | 2,582  |          |   |       | 18       |       |   |          | 12,467 |        |          |       | 87    |          |   |         | 14,293  |         |   |       | 37    |      
|                                | Saudi Arabia             |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |   |         | 15,775  |         |   |       |       |      
|                                | Other                    |                                      |        | 1,474  |          |   |       |         |       |   |          | 822    |        |          |       |      |          |   |         | 3,175   |         |   |       | 1,107 |      
|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |  
|                                |                          | Total Europe, Middle East and Africa |        |        | 35,031   |   |       |          | 2,893 |   |          |        | 53,344 |          |       |       | 2,030    |   |         |         | 78,285  |   |       |       | 2,392 | 
|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |  
|Asia-Pacific                    |                          |                                      | 1,419  |        |          |   | 44    |          |       |   | 941      |        |        |          | 1     |       |          |   | 892     |         |         |   | 139   |      
|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |  
|Total revenues                  |                          | $                                    | 67,069 |        |          | $ | 5,010 |          |       | $ | 108,439  |        |        | $        | 3,818 |       |          | $ | 198,607 |         |         | $ | 4,218 |      
|                                |                          |                                      |        |        |          |   |       |          |       |   |          |        |        |          |       |       |          |  



|     |                           
|---- | --------------------------
|(20) | Quarterly Data (Unaudited)

|                                  |         |                                          |        |       |         |   |        |         |   |   |         |       |   |  |        |      | 
|--------------------------------- | ------- | ---------------------------------------- | ------ | ----- | ------- | - | ------ | ------- | - | - | ------- | ----- | - |  | ------ | ---- | 
|                                  |         | 2003                                     |       
|                                  |         |                                          |       
|                                  |         | 1st                                      |        |       | 2nd     |   |        | 3rd     |   |   | 4th     |      
|                                  |         | Quarter                                  |        |       | Quarter |   |        | Quarter |   |   | Quarter |      
|                                  |         |                                          |        |       |         |   |        |         |   |   |         |      
|                                  |         | (In thousands, except per share amounts) |       
|Revenues                          |         | $                                        | 17,140 |       |         | $ | 18,187 |         |   | $ | 29,350  |       |   |  | 43,762 |     
|Operating income (loss)           |         |                                          | (4,797 | )     |         |   | (3,695 | )       |   |   | (1,314  | )     |   |  | 257    |     
|Income (loss) before income taxes |         |                                          | (3,460 | )     |         |   | (3,515 | )       |   |   | (1,451  | )     |   |  | 420    |     
|Net income (loss)                 |         |                                          | (2,162 | )     |         |   | (3,975 | )       |   |   | (1,025  | )     |   |  | 639    |     
|Net income (loss) per share:      |         |                                          |        |       |         |   |        |         |   |   |         |       |   |  |        |     
|                                  | Basic   |                                          | $      | (0.10 | )       |   | $      | (0.19   | ) |   | $       | (0.05 | ) |  | $      | 0.03 | 
|                                  |         |                                          |        |       |         |   |        |         |   |   |         |      
|                                  | Diluted |                                          | $      | (0.10 | )       |   | $      | (0.19   | ) |   | $       | (0.05 | ) |  | $      | 0.03 | 
|                                  |         |                                          |        |       |         |   |        |         |   |   |         |      

67



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LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                  |         |                                          |        |       |         |   |        |         |  |   |         |      |  |   |        |       |  
|--------------------------------- | ------- | ---------------------------------------- | ------ | ----- | ------- | - | ------ | ------- |  | - | ------- | ---- |  | - | ------ | ----- | -
|                                  |         | 2004                                     |       
|                                  |         |                                          |       
|                                  |         | 1st                                      |        |       | 2nd     |   |        | 3rd     |  |   | 4th     |     
|                                  |         | Quarter                                  |        |       | Quarter |   |        | Quarter |  |   | Quarter |     
|                                  |         |                                          |        |       |         |   |        |         |  |   |         |     
|                                  |         | (In thousands, except per share amounts) |       
|Revenues                          |         | $                                        | 45,049 |       |         | $ | 52,618 |         |  | $ | 56,345  |      |  | $ | 44,595 |      
|Operating income (loss)           |         |                                          | (1,805 | )     |         |   | 1,806  |         |  |   | 1,601   |      |  |   | (3,015 | )    
|Income (loss) before income taxes |         |                                          | (1,645 | )     |         |   | 2,186  |         |  |   | 1,647   |      |  |   | (2,285 | )    
|Net income (loss)                 |         |                                          | (1,554 | )     |         |   | 1,314  |         |  |   | 1,221   |      |  |   | (6,293 | )    
|Net income (loss) per share:      |         |                                          |        |       |         |   |        |         |  |   |         |      |  |   |        |      
|                                  | Basic   |                                          | $      | (0.06 | )       |   | $      | 0.05    |  |   | $       | 0.05 |  |   | $      | (0.26 | )
|                                  |         |                                          |        |       |         |   |        |         |  |   |         |     
|                                  | Diluted |                                          | $      | (0.06 | )       |   | $      | 0.05    |  |   | $       | 0.05 |  |   | $      | (0.26 | )
|                                  |         |                                          |        |       |         |   |        |         |  |   |         |     























|     |                 
|---- | ----------------
|(21) | Subsequent Event



68



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##### 





|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure





|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Internal Control Over Financial Reporting.




Evaluation of Disclosure Controls and Procedures.


Item 9B. Other information




69



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##### 






PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant








|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services






PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules











| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | Consolidated statements of shareholders equity and
    comprehensive loss  Years Ended December 31,
    2002, 2003, and 2004.









70



---



##### 





|        |    |             |  |  |  |                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | ----------- |  |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|        | 3  | .1          |  |  |  | Restated Certificate of Incorporation of the LCC International,
    Inc. (the Company) (incorporated by reference to
    Exhibit 3.1 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                                     
|       
|        | 3  | .2          |  |  |  | Amended and Restated Bylaws of the Company (incorporated by
    reference to Exhibit 3.2 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September 20, 1996).                                                                                                                   
|       
|        | 4  | .1          |  |  |  | Form of Class A and Class B Common Stock certificates
    (incorporated by reference to Exhibit 4.1 to Amendment
    No. 2 to the Companys Registration Statement on
    Form S-1, Registration No. 333-6067, filed with the
    SEC on September  20, 1996).                                                                                                       
|       
|        | 10 | .1          |  |  |  | 1996 Directors Stock Option Plan of the Company
    (incorporated by reference to Exhibit 10.13 to Amendment
    No. 2 to the Companys Registration Statement on
    Form S-1, Registration No. 333-6067, filed with the
    SEC on September  20, 1996).                                                                                                           
|       
|        | 10 | .2          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated April 22, 1997 (incorporated by reference to
    Exhibit 4.6 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 30, 1999).                                                                                                                                          
|       
|        | 10 | .3          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated April 16, 1998 (incorporated by reference to
    Exhibit 4.7 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 30, 1999).                                                                                                                                          
|       
|        | 10 | .4          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated February 1, 2000 (incorporated by reference
    to the Companys definitive proxy statement on
    Schedule 14A filed with the SEC on April 24, 2000).                                                                                                                                       
|       
|        | 10 | .5          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated January 30, 2001 (incorporated by reference
    to Exhibit 4.5 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                         
|       
|        | 10 | .6          |  |  |  | Amended and Restated Equity Incentive Plan of the Company
    (formerly the 1996 Employee Stock Option Plan), dated
    March 10, 2004 (incorporated by reference to the
    Companys definitive proxy statement on Schedule 14A
    filed with the SEC on April 28, 2004).                                                                                         
|       
|        | 10 | .7          |  |  |  | Form of Terms and Conditions and Option Grant Letter under the
    Companys Amended and Restated Equity Incentive Plan
    (incorporated by reference to Exhibit 10.35 to the
    Companys Annual Report on Form 10-K filed with the
    SEC on November  12, 2004).                                                                                               
|       
|        | 10 | .8          |  |  |  | 1996 Employee Stock Purchase Plan of the Company, as amended
    May 25, 1999 (incorporated by reference to Exhibit 4.7
    to the Companys Annual Report on Form 10-K filed with
    the SEC on April 2, 2001).                                                                                                                                                    
|       
|        | 10 | .9          |  |  |  | Form of the Companys Directors Stock Option Plan stock
    option agreement for directors who will receive Class A
    Common Stock other than Mark D. Ein (incorporated by reference
    to Exhibit 10.44 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September 20, 1996).
|       
|        | 10 | .10         |  |  |  | Form of the Companys Directors Stock Option Plan stock
    option agreement for Mark D. Ein (incorporated by reference to
    Exhibit 10.45 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                               
|       
|        | 10 | .11         |  |  |  | Form of the Companys Directors Stock Option Plan stock
    option agreement for directors who receive Class B Common
    Stock (incorporated by reference to Exhibit 10.35 to
    Amendment No. 2 to the Companys Registration
    Statement on Form S-1, Registration No. 333-6067,
    filed with the SEC on September 20, 1996).                                
|       
|        | 10 | .12         |  |  |  | Form of the Companys 1996 Employee Stock Option Plan
    incentive stock option agreement (incorporated by reference to
    Exhibit 10.41 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                                 

71



---



##### 



|        |    |             |  |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | -- | ----------- |  |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 10 | .13         |  |  |  | Form of the Companys 1996 Employee Stock Option Plan
    non-incentive stock option agreement (incorporated by reference
    to Exhibit 10.42 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September 20, 1996).                                                                                                                                                                                                                                                                                                                                          
|       
|        | 10 | .14         |  |  |  | Form of the Companys 1996 Employee Stock Option Plan, as
    amended, non-incentive stock option agreement for eligible
    persons who have executed grant letters on or after
    January  30, 2001 (incorporated by reference to
    Exhibit 10.26 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .15         |  |  |  | Letter Agreement dated February 22, 1999, between the
    Company and Terri Feely (incorporated by reference to
    Exhibit 10.9 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10 | .16         |  |  |  | Letter Agreement dated February 14, 2000 between the
    Company and Michael McNelly (incorporated by reference to
    Exhibit 10.11 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                        
|       
|        | 10 | .17         |  |  |  | Employee Agreement on Ideas, Inventions and Confidential
    Information between Michael S. McNelly and the Company dated
    July 20, 1998 (incorporated by reference to
    Exhibit 10.41 to Amendment No. 1 to the Companys
    Annual Report on Form 10-K filed with the SEC on
    December 20, 2001).                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .18         |  |  |  | Acknowledgement Letter dated October 6, 2003 between the
    Company and Michael S. McNelly (incorporated by reference to
    Exhibit 10.18.1 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-108575, filed with the SEC on
    November 5, 2003).                                                                                                                                                                                                                                                                                                                                           
|       
|        | 10 | .19         |  |  |  | Letter Agreement, dated December 12, 2002, between the
    Company and Graham Perkins (incorporated by reference to
    Exhibit 10.19 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 28, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .20         |  |  |  | Letter Agreement, dated February 13, 2002, between the
    Company and Vincent Gwiazdowski (incorporated by reference to
    Exhibit 10.20 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 28, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10 | .21         |  |  |  | Agreement between C. Thomas Faulders, III, and the Company
    dated as of December 10, 2004 (incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K filed with the SEC on December 10, 2004.                                                                                                                                                                                                                                                                                                                                                                                                              
|       
|        | 10 | .22         |  |  |  | Letter dated June 16, 2003, from the Company to Julie A.
    Dobson (incorporated by reference to Exhibit 10.24 to
    Amendment No. 2 to the Companys Registration
    Statement on Form S-1, Registration No. 333-108575,
    filed with the SEC on November 5, 2003).                                                                                                                                                                                                                                                                                                                                                                         
|       
|        | 10 | .23         |  |  |  | Letter dated January 11, 2001, from the Company to Susan
    Mayer (incorporated by reference to Exhibit 10.14 to the
    Companys Annual Report on Form 10-K filed with the
    SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 10 | .24         |  |  |  | Letter dated June 19, 2001, from the Company to Susan Ness
    (incorporated by reference to Exhibit 10.24 to the
    Companys Annual Report on Form 10-K filed with the
    SEC on March 28, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | .25         |  |  |  | Form of Indemnity Agreement between the Company and the current
    and former officers and directors of the Company (incorporated
    by reference to Exhibit 10.32 to Amendment No. 2 to
    the Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September  20, 1996).                                                                                                                                                                                                                                                                                                                   
|       
|        | 10 | .26         |  |  |  | Intercompany Agreement dated as of September 20, 1996 among
    Telcom Ventures, RF Investors, L.L.C., LCC, L.L.C., the Company,
    Cherrywood Holdings, Inc., Rajendra Singh, Neera Singh, certain
    trusts for the benefit of members of the Singh family,
    Carlyle-LCC Investors I, L.P., Carlyle-LCC
    Investors II, L.P., Carlyle-LCC Investors III, L.P.,
    Carlyle-LCC IV(E), L.P., MDLCC, L.L.C. and TC Group, L.L.C.
    (incorporated by reference to Exhibit 10.30 to Amendment
    No. 2 to the Companys Registration Statement on
    Form S-1, Registration No. 333-6067, filed with the
    SEC on September  20, 1996).
|       
|        | 10 | .27         |  |  |  | Registration Rights Agreement dated July 25, 1996 among the
    Company, RF Investors, L.L.C. and MCI Telecommunications
    Corporation (incorporated by reference to Exhibit 10.31 to
    Amendment No. 1 to the Companys Registration
    Statement on Form S-1, Registration No. 333-6067,
    filed with the SEC on August 16, 1996).                                                                                                                                                                                                                                                                                                       

72



---



##### 



|        |    |             |  |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | -- | ----------- |  |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 10 | .28         |  |  |  | Overhead and Administrative Services Agreement dated
    August  27, 1996 between the Company and Telcom
    Ventures, L.L.C. (incorporated by reference to
    Exhibit 10.33 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on
    September  20, 1996).                                                                                                                                                                                                                                                                                                       
|       
|        | 10 | .29         |  |  |  | Agreement of Merger dated September 15, 1996 between LCC,
    L.L.C. and the Company (incorporated by reference to
    Exhibit 10.34 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10 | .30         |  |  |  | Agreement dated May 17, 1996, between LCC, L.L.C. and
    West*Park Associates Limited Partnership for office space at
    7925 Jones Branch Drive, McLean, Virginia, 22102 (incorporated
    by reference to Exhibit 10.23 to Amendment No. 1 to
    the Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    August 16, 1996).                                                                                                                                                                                                                                                             
|       
|        | 10 | .31         |  |  |  | Ericsson Radio Systems AB Asset Purchase Agreement dated
    August 25, 1999 (incorporated by reference to
    Exhibit 2.1 to the Companys Current Report on
    Form 8-K filed with the SEC on November 8, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10 | .32         |  |  |  | Letter, dated October 22, 1999, among the Company, LCC
    Europe AS and Ericsson Radio Systems AB (incorporated by
    reference to Exhibit 2.2 to the Companys Current
    Report on Form 8-K filed with the SEC on November 8,
    1999).                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 10 | .33         |  |  |  | Master Antenna Site Lease between Pinnacle Towers Inc. and
    Microcell Management, Inc., dated February 24, 2000
    (incorporated by reference to Exhibit 2.3 to the
    Companys Current Report on Form 8-K filed with the
    SEC on March 20, 2000).                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        | 10 | .34         |  |  |  | Settlement and Repurchase Agreement between the Company and
    minority shareholders of Microcell Management, Inc., dated
    February 15, 2000 (incorporated by reference to
    Exhibit 10.40 to Amendment No. 1 to the Companys
    Annual Report on Form 10-K filed with the SEC on
    December 20, 2001).                                                                                                                                                                                                                                                                                                                              
|       
|        | 10 | .35         |  |  |  | Consulting Agreement, dated as of December 23, 2004, by and
    among LCC United Kingdom and SEMAB Management Srl; Letter
    Agreement, dated as of December 23, 2004, by and among
    SEMAB Management Srl and LCC United Kingdom Limited; Letter
    Agreement, dated as of December 23, 2004, by and among
    Carlo Baravalle and LCC United Kingdom Limited; and Compromise
    Agreement, dated as of December  23, 2004, by and
    among Carlo Baravalle and LCC United Kingdom Limited
    (incorporated by reference to Exhibit 10.01 to the
    Companys Current Report on Form 8-K filed with the
    SEC on December 28, 2004).
|       
|        | 21 |             |  |  |  | List of Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 23 |             |  |  |  | Consent of KPMG LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 31 | .1          |  |  |  | Certification of Chief Executive Officer pursuant to Exchange
    Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 31 | .2          |  |  |  | Certification of Chief Financial Officer pursuant to Exchange
    Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 32 | .1          |  |  |  | Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 32 | .2          |  |  |  | Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     





73



---



##### 



SIGNATURES






| |                        
| | -----------------------
| | LCC INTERNATIONAL, INC.



| |     |                                
| | --- | -------------------------------
| | By: | /s/ C. Thomas
    Faulders, III

| |                                     
| | ------------------------------------
| |                                     
| | C. Thomas Faulders, III             
| | Chairman and Chief Executive Officer





|                                                       |  |                                                                                                                                 |  | 
|------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------- |  | 
|Signatures                                             |  | Title                                                                                                                          
|                                                       |  |                                                                                                                                
|                                                      
|/s/ C. Thomas Faulders, IIIC.
    Thomas Faulders, III |  | Chairman of the Board of Directors and Chief Executive Officer
    (Principal Executive Officer)                               
|                                                      
|/s/ Graham B. PerkinsGraham
    B. Perkins             |  | Senior Vice President, Chief Financial Officer and Treasurer
    (Principal Financial Officer and Principal Accounting Officer)
|                                                      
|/s/ Julie A. DobsonJulie
    A. Dobson                 |  | Director                                                                                                                       
|                                                      
|/s/ Mark D. EinMark
    D. Ein                         |  | Director                                                                                                                       
|                                                      
|Steven
    J. Gilbert                                  |  | Director                                                                                                                       
|                                                      
|/s/ Susan NessSusan
    Ness                           |  | Director                                                                                                                       
|                                                      
|/s/ Neera SinghNeera
    Singh                         |  | Director                                                                                                                       
|                                                      
|/s/ Rajendra SinghRajendra
    Singh                   |  | Director                                                                                                                       

74



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##### 



SCHEDULE II


VALUATION AND QUALIFYING ACCOUNTS


|                                                             |  |                |       |          |            |  |        |            |  |  |               |  |            |        |       |  |  |  |       | 
|------------------------------------------------------------ |  | -------------- | ----- | -------- | ---------- |  | ------ | ---------- |  |  | ------------- |  | ---------- | ------ | ----- |  |  |  | ----- | 
|                                                             |  |                |       | Column C |            |  |        |            | 
|                                                             |  |                |       |          |            |  |        |            | 
|Column A                                                     |  | Column B       |       |          | Additions  |  |        | Column D   |  |  | Column E      | 
|                                                             |  |                |       |          |            |  |        |            |  |  |               | 
|                                                             |  | Balance        |       |          |            |  |        |            | 
|                                                             |  | at             |       |          | Charged to |  |        | Charges to |  |  |               |  | Balance at |       
|                                                             |  | Beginning      |       |          | Costs and  |  |        | Other      |  |  |               |  | End of     |       
|Description                                                  |  | of Period      |       |          | Expenses   |  |        | Accounts   |  |  | Deductions(1) |  |            | Period |      
|                                                             |  |                |       |          |            |  |        |            |  |  |               |  |            |        |      
|                                                             |  | (In thousands) |      
|Year ended December 31, 2002 Allowance for doubtful accounts |  |                | 2,048 |          |            |  | 4,317  |            |  |  | 724           |  |            |        | 3,967 |  |  |  | 3,122 | 
|Year ended December 31, 2003 Allowance for doubtful accounts |  |                | 3,122 |          |            |  | (2,419 | )          |  |  | 253           |  |            |        | 490   |  |  |  | 466   | 
|Year ended December 31, 2004 Allowance for doubtful accounts |  |                | 466   |          |            |  | 146    |            |  |  | 87            |  |            |        | 79    |  |  |  | 620   | 






|    |                                                             
|--- | ------------------------------------------------------------
|(1) | Deduction for write-off of receivables to allowance account.

75



---



##### 



EXHIBIT INDEX


|        |    |             |  |  |  |                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | ----------- |  |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|        | 3  | .1          |  |  |  | Restated Certificate of Incorporation of the LCC International,
    Inc. (the Company) (incorporated by reference to
    Exhibit 3.1 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                                     
|       
|        | 3  | .2          |  |  |  | Amended and Restated Bylaws of the Company (incorporated by
    reference to Exhibit 3.2 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September 20, 1996).                                                                                                                   
|       
|        | 4  | .1          |  |  |  | Form of Class A and Class B Common Stock certificates
    (incorporated by reference to Exhibit 4.1 to Amendment
    No. 2 to the Companys Registration Statement on
    Form S-1, Registration No. 333-6067, filed with the
    SEC on September  20, 1996).                                                                                                       
|       
|        | 10 | .1          |  |  |  | 1996 Directors Stock Option Plan of the Company
    (incorporated by reference to Exhibit 10.13 to Amendment
    No. 2 to the Companys Registration Statement on
    Form S-1, Registration No. 333-6067, filed with the
    SEC on September  20, 1996).                                                                                                           
|       
|        | 10 | .2          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated April 22, 1997 (incorporated by reference to
    Exhibit 4.6 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 30, 1999).                                                                                                                                          
|       
|        | 10 | .3          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated April 16, 1998 (incorporated by reference to
    Exhibit 4.7 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 30, 1999).                                                                                                                                          
|       
|        | 10 | .4          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated February 1, 2000 (incorporated by reference
    to the Companys definitive proxy statement on
    Schedule 14A filed with the SEC on April 24, 2000).                                                                                                                                       
|       
|        | 10 | .5          |  |  |  | Amendment to 1996 Directors Stock Option Plan of the
    Company, dated January 30, 2001 (incorporated by reference
    to Exhibit 4.5 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                         
|       
|        | 10 | .6          |  |  |  | Amended and Restated Equity Incentive Plan of the Company
    (formerly the 1996 Employee Stock Option Plan), dated
    March 10, 2004 (incorporated by reference to the
    Companys definitive proxy statement on Schedule 14A
    filed with the SEC on April 28, 2004).                                                                                         
|       
|        | 10 | .7          |  |  |  | Form of Terms and Conditions and Option Grant Letter under the
    Companys Amended and Restated Equity Incentive Plan
    (incorporated by reference to Exhibit 10.35 to the
    Companys Annual Report on Form 10-K filed with the
    SEC on November  12, 2004).                                                                                               
|       
|        | 10 | .8          |  |  |  | 1996 Employee Stock Purchase Plan of the Company, as amended
    May 25, 1999 (incorporated by reference to Exhibit 4.7
    to the Companys Annual Report on Form 10-K filed with
    the SEC on April 2, 2001).                                                                                                                                                    
|       
|        | 10 | .9          |  |  |  | Form of the Companys Directors Stock Option Plan stock
    option agreement for directors who will receive Class A
    Common Stock other than Mark D. Ein (incorporated by reference
    to Exhibit 10.44 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September 20, 1996).
|       
|        | 10 | .10         |  |  |  | Form of the Companys Directors Stock Option Plan stock
    option agreement for Mark D. Ein (incorporated by reference to
    Exhibit 10.45 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                               
|       
|        | 10 | .11         |  |  |  | Form of the Companys Directors Stock Option Plan stock
    option agreement for directors who receive Class B Common
    Stock (incorporated by reference to Exhibit 10.35 to
    Amendment No. 2 to the Companys Registration
    Statement on Form S-1, Registration No. 333-6067,
    filed with the SEC on September 20, 1996).                                
|       
|        | 10 | .12         |  |  |  | Form of the Companys 1996 Employee Stock Option Plan
    incentive stock option agreement (incorporated by reference to
    Exhibit 10.41 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                                 

76



---



##### 



|        |    |             |  |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | -- | ----------- |  |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 10 | .13         |  |  |  | Form of the Companys 1996 Employee Stock Option Plan
    non-incentive stock option agreement (incorporated by reference
    to Exhibit 10.42 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September 20, 1996).                                                                                                                                                                                                                                                                                                                                          
|       
|        | 10 | .14         |  |  |  | Form of the Companys 1996 Employee Stock Option Plan, as
    amended, non-incentive stock option agreement for eligible
    persons who have executed grant letters on or after
    January  30, 2001 (incorporated by reference to
    Exhibit 10.26 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .15         |  |  |  | Letter Agreement dated February 22, 1999, between the
    Company and Terri Feely (incorporated by reference to
    Exhibit 10.9 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10 | .16         |  |  |  | Letter Agreement dated February 14, 2000 between the
    Company and Michael McNelly (incorporated by reference to
    Exhibit 10.11 to the Companys Annual Report on
    Form 10-K filed with the SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                        
|       
|        | 10 | .17         |  |  |  | Employee Agreement on Ideas, Inventions and Confidential
    Information between Michael S. McNelly and the Company dated
    July 20, 1998 (incorporated by reference to
    Exhibit 10.41 to Amendment No. 1 to the Companys
    Annual Report on Form 10-K filed with the SEC on
    December 20, 2001).                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .18         |  |  |  | Acknowledgement Letter dated October 6, 2003 between the
    Company and Michael S. McNelly (incorporated by reference to
    Exhibit 10.18.1 to Amendment No. 2 to the
    Companys Registration Statement on Form S-1,
    Registration No. 333-108575, filed with the SEC on
    November 5, 2003).                                                                                                                                                                                                                                                                                                                                           
|       
|        | 10 | .19         |  |  |  | Letter Agreement, dated December 12, 2002, between the
    Company and Graham Perkins (incorporated by reference to
    Exhibit 10.19 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 28, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .20         |  |  |  | Letter Agreement, dated February 13, 2002, between the
    Company and Vincent Gwiazdowski (incorporated by reference to
    Exhibit 10.20 to the Companys Annual Report on
    Form 10-K filed with the SEC on March 28, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10 | .21         |  |  |  | Agreement between C. Thomas Faulders, III, and the Company
    dated as of December 10, 2004 (incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K filed with the SEC on December 10, 2004 .                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | .22         |  |  |  | Letter dated June 16, 2003, from the Company to Julie A.
    Dobson (incorporated by reference to Exhibit 10.24 to
    Amendment No. 2 to the Companys Registration
    Statement on Form S-1, Registration No. 333-108575,
    filed with the SEC on November 5, 2003).                                                                                                                                                                                                                                                                                                                                                                         
|       
|        | 10 | .23         |  |  |  | Letter dated January 11, 2001, from the Company to Susan
    Mayer (incorporated by reference to Exhibit 10.14 to the
    Companys Annual Report on Form 10-K filed with the
    SEC on April 2, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 10 | .24         |  |  |  | Letter dated June 19, 2001, from the Company to Susan Ness
    (incorporated by reference to Exhibit 10.24 to the
    Companys Annual Report on Form 10-K filed with the
    SEC on March 28, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | .25         |  |  |  | Form of Indemnity Agreement between the Company and the current
    and former officers and directors of the Company (incorporated
    by reference to Exhibit 10.32 to Amendment No. 2 to
    the Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    September  20, 1996).                                                                                                                                                                                                                                                                                                                   
|       
|        | 10 | .26         |  |  |  | Intercompany Agreement dated as of September 20, 1996 among
    Telcom Ventures, RF Investors, L.L.C., LCC, L.L.C., the Company,
    Cherrywood Holdings, Inc., Rajendra Singh, Neera Singh, certain
    trusts for the benefit of members of the Singh family,
    Carlyle-LCC Investors I, L.P., Carlyle-LCC
    Investors II, L.P., Carlyle-LCC Investors III, L.P.,
    Carlyle-LCC IV(E), L.P., MDLCC, L.L.C. and TC Group, L.L.C.
    (incorporated by reference to Exhibit 10.30 to Amendment
    No. 2 to the Companys Registration Statement on
    Form S-1, Registration No. 333-6067, filed with the
    SEC on September  20, 1996).
|       
|        | 10 | .27         |  |  |  | Registration Rights Agreement dated July 25, 1996 among the
    Company, RF Investors, L.L.C. and MCI Telecommunications
    Corporation (incorporated by reference to Exhibit 10.31 to
    Amendment No. 1 to the Companys Registration
    Statement on Form S-1, Registration No. 333-6067,
    filed with the SEC on August 16, 1996).                                                                                                                                                                                                                                                                                                       

77



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##### 



|        |    |             |  |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | -- | ----------- |  |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 10 | .28         |  |  |  | Overhead and Administrative Services Agreement dated
    August  27, 1996 between the Company and Telcom
    Ventures, L.L.C. (incorporated by reference to
    Exhibit 10.33 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on
    September  20, 1996).                                                                                                                                                                                                                                                                                                       
|       
|        | 10 | .29         |  |  |  | Agreement of Merger dated September 15, 1996 between LCC,
    L.L.C. and the Company (incorporated by reference to
    Exhibit 10.34 to Amendment No. 2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-6067, filed with the SEC on September 20,
    1996).                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10 | .30         |  |  |  | Agreement dated May 17, 1996, between LCC, L.L.C. and
    West*Park Associates Limited Partnership for office space at
    7925 Jones Branch Drive, McLean, Virginia, 22102 (incorporated
    by reference to Exhibit 10.23 to Amendment No. 1 to
    the Companys Registration Statement on Form S-1,
    Registration No. 333-6067, filed with the SEC on
    August 16, 1996).                                                                                                                                                                                                                                                             
|       
|        | 10 | .31         |  |  |  | Ericsson Radio Systems AB Asset Purchase Agreement dated
    August 25, 1999 (incorporated by reference to
    Exhibit 2.1 to the Companys Current Report on
    Form 8-K filed with the SEC on November 8, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10 | .32         |  |  |  | Letter, dated October 22, 1999, among the Company, LCC
    Europe AS and Ericsson Radio Systems AB (incorporated by
    reference to Exhibit 2.2 to the Companys Current
    Report on Form 8-K filed with the SEC on November 8,
    1999).                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 10 | .33         |  |  |  | Master Antenna Site Lease between Pinnacle Towers Inc. and
    Microcell Management, Inc., dated February 24, 2000
    (incorporated by reference to Exhibit 2.3 to the
    Companys Current Report on Form 8-K filed with the
    SEC on March 20, 2000).                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        | 10 | .34         |  |  |  | Settlement and Repurchase Agreement between the Company and
    minority shareholders of Microcell Management, Inc., dated
    February 15, 2000 (incorporated by reference to
    Exhibit 10.40 to Amendment No. 1 to the Companys
    Annual Report on Form 10-K filed with the SEC on
    December 20, 2001) .                                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | .35         |  |  |  | Consulting Agreement, dated as of December 23, 2004, by and
    among LCC United Kingdom and SEMAB Management Srl; Letter
    Agreement, dated as of December 23, 2004, by and among
    SEMAB Management Srl and LCC United Kingdom Limited; Letter
    Agreement, dated as of December 23, 2004, by and among
    Carlo Baravalle and LCC United Kingdom Limited; and Compromise
    Agreement, dated as of December  23, 2004, by and
    among Carlo Baravalle and LCC United Kingdom Limited
    (incorporated by reference to Exhibit 10.01 to the
    Companys Current Report on Form 8-K filed with the
    SEC on December 28, 2004).
|       
|        | 21 |             |  |  |  | List of Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 23 |             |  |  |  | Consent of KPMG LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 31 | .1          |  |  |  | Certification of Chief Executive Officer pursuant to Exchange
    Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 31 | .2          |  |  |  | Certification of Chief Financial Officer pursuant to Exchange
    Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 32 | .1          |  |  |  | Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 32 | .2          |  |  |  | Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

78