SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2000

Commission file number: 0-21213

LCC INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its
Charter)


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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

Based upon the closing price of the registrants common
stock as of March 26, 2001, the aggregate market value of
the common stock held by non-affiliates of the registrant is
$42,449,067.*

As of March 26, 2001, the registrant had outstanding
12,086,709 shares of Class A Common Stock, par value $.01
per share, (the Class A Common Stock) and
8,446,833 shares of Class B Common Stock, par value $.01
per share (the Class B Common Stock).

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents incorporated by reference
and the Part of the Form 10-K into which the document is
incorporated:

(1)  Portions of the definitive Proxy Statement for the
Annual Meeting of the Stockholders to be held on May 24,
2001 (the Proxy Statement) to be filed within
120 days after the end of the registrants fiscal year
are incorporated by reference into Part III, Items 10 13
of this Form 10-K.
















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This Annual Report on Form 10-K
(Form 10-K) contains certain forward-looking
statements within the meaning of Section 21E of the
Securities and Exchange Act of 1934, which 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. The Companys 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. Definitions of
technical and other terms are set forth in the Glossary
appearing elsewhere herein.

PART I

Item 1.  Business

Overview

The Company is one of the worlds largest independent
providers of wireless network services, including the planning,
design, deployment, ongoing management and operations of
wireless networks, to an increasingly broad range of companies,
including wireless carriers, satellite service providers,
telecommunication equipment vendors, tower companies and
Internet content providers. Since its inception in 1983, the
Company has delivered wireless network solutions to more than
200 customers in over 50 countries. Customers in the United
States include wireless carriers such as AT&T Wireless
Services, Nextel Communications, Sprint PCS, Ubiquitel and
Verizon. Fixed broadband wireless access is another emerging
sector in the telecommunications industry. The Company had a
lead role in assisting broadband wireless carriers such as
airBand/ Cisco/ Getronics, Nucentrix, Sprint Broadband, Teligent
and WorldCom Wireless in the design and deployment of wireless
solutions in the Local Multipoint Distribution System,
Multichannel Multipoint Distribution System and Unlicensed
National Information Infrastructure, commonly referred to as
LMDS, MMDS and UNII, respectively. Internationally-based
customers accounted for approximately 29% of the Companys
revenues for the year ended December 31, 2000 and include
large international wireless carriers, such as Ben Netherlands,
BT Cellnet, Click Vodafone, Hutchinson, Omnitel and Telfort. The
Company also provides services globally to large
telecommunication equipment vendors such as Ericsson, Lucent and
Nokia. In addition, the Company currently is implementing an end
to end solution for XM Satellite Radio Inc., a satellite service
provider, as well as providing high level technical consulting
services for companies such as AOL Time Warner to facilitate
their development of mobile commerce or m-commerce solutions.

The Company provides integrated end-to-end solutions for
wireless voice and data communications networks with offerings
ranging from high level technical consulting, system design and
deployment and ongoing management and optimization services. As
part of its strategy, the Company leverages initial
opportunities to provide high level technical consulting
services to secure later-stage system design and deployment
contracts. Long-term engagements to provide design and
deployment services also enable the Company to secure ongoing
management and operations projects. For example, the Company
recently expanded its service offerings to XM Satellite to
deliver ongoing management services following the anticipated
launch of its satellite-based radio network in 2001. Providing
ongoing operations and management services also positions the
Company well for additional opportunities as new technologies
continue to be developed and wireless network operators must
either upgrade their existing networks or deploy new networks
utilizing the latest available technologies.

Industry Background

Wireless Telecommunications Networks

Wireless networks are telecommunication systems built using
radio equipment. The life cycle of a wireless network
continually evolves and consists of several phases including
strategic planning, design, deployment, expansion and
optimization. During the strategic planning phase, operators
pursue the licenses

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Following acceptance of a wireless network design, access to
land or building rooftops must be secured for towers or
telecommunication equipment, including radio base stations,
antennas and supporting electronics. Each site must be qualified
in a number of areas, including zoning ordinance requirements,
regulatory compliance and suitability for construction. Detailed
site location designs are prepared and radio frequency engineers
review interference to or from co-located antennae. Construction
and equipment installation then must be performed and site
performance is measured after completion of construction.
Finally, professional technicians commission the new radio
equipment, test it, integrate it with existing networks and tune
the components to optimize performance.

Once a wireless network becomes operational and the number of
subscribers increases, the system must be expanded to increase
system coverage and capacity. In addition, the wireless system
must be continually updated and optimized to address changes in
traffic patterns, interference from neighboring or competing
networks or other radio sources. Optimization also involves
tuning the network to enable operators to compete more
effectively in areas where there are multiple system operators.

Finally, as new technologies are continuously developed,
wireless operators must determine whether to upgrade their
existing networks or deploy new networks utilizing the latest
available technologies. Overlaying new technologies, such as 2.5
generation and third generation protocols, commonly referred to
as 2.5G and 3G, respectively, with an existing network or
deploying a new network requires operators to reengage in the
strategic planning, design, deployment, expansion and
optimization phases of a new cycle in the life of an existing or
new network.

Growth and Evolution of the Wireless
Telecommunication Industry

Worldwide use of wireless telecommunications has grown rapidly
as cellular and other emerging wireless communications services
have become more widely available and affordable for the mass
business and consumer markets. International Data Corporation,
in an industry report dated March 2000, projects that the
number of worldwide wireless subscribers will increase from
427 million in 1999 to greater than one billion in 2003.
The rapid growth in wireless telecommunications is driven by the
dramatic increase in wireless telephone usage, as well as strong
demand for wireless Internet and other data services, also known
as wireless broadband services.

Wireless access to the Internet is in an early stage of
development and growing rapidly as web-enabled devices become
more widely accessible and affordable. Cahners In-Stat Group, in
an industry report dated August 2000, predicts that the
number of worldwide wireless Internet subscribers will increase
from 3.8 million as of 1999 to more than 742 million
by the end of 2004. Demand for wireless Internet access and
other data services is accelerating the adoption of new
technologies such as those embodied in the emerging
third-generation standard, known as 3G, to enable wireless
networks to deliver enhanced data capabilities.

Current Challenges Confronting Wireless
Carriers, Telecommunication Equipment Vendors and Satellite
Service Providers

Due to an increasingly competitive environment, wireless
carriers, telecommunication equipment vendors, satellite service
providers and others are focused on satisfying customer demand
for enhanced services, seamless and comprehensive coverage,
better service quality, more robust content and application
offerings, faster data transmission and lower prices. The
proliferation of wireless carriers and new technologies has
created a competitive environment in which speed to market and
client acquisition and retention are key factors influencing a
wireless carriers success. Network operations and
management is becoming increasingly complex due to an increasing
need to provide services through networks that rely on diverse
technologies, heterogeneous network components and existing
legacy applications. For example, the introduction of wireless
Internet technologies and the growth in broadband wireless
services requiring the transmission of large

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Equipment vendors are also confronting multiple challenges as
they introduce new generations of equipment with increased
features and functionality. Vendors are required to provide
equipment that is both compatible with a carriers existing
network and can be integrated with equipment offered by other
vendors. As a result of rapid technological changes, the Company
believes that equipment vendors have increasingly focused on
offering competitive product solutions while outsourcing
services such as network design, deployment and management.

The Need for Outsourcing

Although wireless carriers traditionally have relied upon their
internal engineering workforces to address a significant portion
of their wireless network needs, the current challenges in the
wireless market have required wireless carriers and equipment
vendors to focus on their core competencies and therefore
outsource an increasing portion of their network services. The
Company believes that wireless carriers that are seeking to
outsource an increasing portion of their wireless network needs
are engaging service providers that:



| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | have expertise with all major wireless technologies;                                                                     
|
| |  | have experience working with all major equipment vendors;                                                                
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| |  | offer turnkey solutions; and                                                                                             
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| |  | have sufficient numbers of highly skilled employees capable of
	handling large-scale domestic and international projects.

The LCC Solution

In addressing the need for wireless carriers, telecommunications
equipment vendors, satellite service providers and others to
outsource an increasing portion of their wireless network
services, the Company believes that it distinguishes itself
through several competitive advantages:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Expertise and Experience With All Major Wireless Technologies
	and Equipment Vendors.The Company has experience in all
	major wireless technologies, including migration from analog
	systems to digital systems and from digital voice to digital
	data systems; digital systems, including Personal Communications
	Services, commonly referred to as PCS, Global System for Mobile
	Communications, commonly referred to as GSM, Time Division
	Multiple Access, commonly referred to as TDMA, Code Division
	Multiple Access, commonly referred to as CDMA, and Integrated
	Dispatch Enhanced Network, commonly referred to as iDEN; and
	wireless Internet, emerging broadband wireless technologies such
	as LMDS and MMDS, and emerging mobile data technologies such as
	wide-band CDMA (WCDMA), 2.5G and 3G solutions. The Company is
	actively engaged in developing new and emerging technologies in
	the wireless telecommunications industry through participation
	in industry panels, industry association forums and through
	independent research. For example, the Company has been engaged
	by wireless carriers as well as Internet content providers such
	as AOL Time Warner to provide high level technical consulting
	services to develop m-commerce solutions. The Companys
	Wireless Institute is an integral part of its technical
	development activities and has become one of the premier
	training schools for the wireless industry. In addition, the
	Company has experience installing telecommunications equipment
	from almost every major wireless equipment vendor.
|
| |  | Ability to Deliver Turnkey Solutions. The Companys
	ability to provide end-to-end, or turnkey, services enables its
	wireless customers to engage a single responsible party who is
	accountable for delivering and managing its wireless network
	under a single contract. The Company coordinates its use of
	resources for each phase of the project from planning to design
	and deployment to optimization and management of the wireless
	network, enabling it to reduce the time and cost of its
	services. The Company provides its customers with a primary
	point of accountability and reduces the inefficiencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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| |   | associated with coordinating multiple subcontractors. For
	example, the Company is successfully implementing an end to end
	solution for XM Satellite in the development of its
	satellite-based radio network.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Worldwide Depth of Resources. During the past
	17 years, the Company has designed wireless networks in
	North America, Europe, Asia, Latin America, the Middle East and
	Africa employing all major wireless technologies. As of
	December 31, 2000, the Company had approximately 270 highly
	qualified and experienced engineers and system deployment
	professionals. The Companys 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, 2000,
	approximately 27% of the Companys employees were on the
	ground overseas and represented approximately 50 different
	nationalities.

LCC Services

The Company offers to its wireless customers a complete range of
wireless network services, including: (1) high level
technical consulting services; (2) design services;
(3) deployment services; and (4) ongoing operations
and management services.

Consulting Services

Applying its extensive technical and operational expertise and
experience, the Company often is first engaged by a wireless
customer to analyze the engineering and technology issues
related to a proposed network deployment project. Consulting
services include developing adoption strategies for emerging
technologies, such as 2.5G and 3G, preparing regulatory
strategies, conducting field trials and performing network
audits. In the pre-deployment phase, the Company also assists
wireless carriers in preparing applications for licenses in
formal government license grant processes. For example, the
Company was recently engaged by Nucentrix to assist in its
efforts to obtain new licenses from the Federal Communications
Commission, which has subsequently led to a design and
deployment engagement by Nucentrix in various markets throughout
the United States.

The recent introduction and expected growth of wireless data
services has generated significant opportunities for the
Company. For example, in connection with the development of
broadband, i.e.,high capacity, high speed data systems
in the United States, the Company provides consulting services
to Cisco in the development of wireless Internet networks based
on Ciscos Vector Orthogonal Frequency Division
Multiplexing (VOFDM) technology and equipment. In addition,
in Europe the Company is assisting wireless carriers in
connection with their initial efforts to adopt 2.5G and 3G
technologies.

Design and Deployment Services

Program management. The Company manages all aspects of a
design and deployment project, including site acquisition, radio
frequency engineering, fixed network engineering and
construction management. Project managers utilize the
Companys proprietary software system, Web Integrated
Network Deployment System (WINDS), to manage all phases of an
engagement. Utilizing WINDS, all information regarding a project
is stored in one location, enabling project managers to track
and retrieve information across all project phases, including
site acquisition and leasing, zoning, construction, materials
management, radio frequency engineering and installation and
optimization. The WINDS system generates a visual presentation
of the network in process, provides customers with
look-in capabilities using remote connectivity and
an internet browser and forecasts timelines for each phase of
the project.

Design services. The Companys design services
consist of two primary areas: radio frequency engineering and
fixed network engineering:



| |                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Radio frequency engineering. Radio frequency engineers
	design each wireless network based upon the customers
	transmission requirements, which are determined based upon the
	projected level of subscriber density, estimated traffic demand
	and the scope of the operators license coverage area. The

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Companys engineers perform the calculations, measurements
	and tests necessary to optimize placement of wireless equipment,
	to optimize use of radio frequency and to deliver the highest
	possible signal quality for the greatest portion of subscriber
	usage within existing constraints. Typical constraints that must
	be addressed include cost parameters, terrain and license
	limitations, interference from other operators, site
	availability limitations and applicable zoning restrictions as
	well as other factors.                                                                                                                                                                                                                                                                                                                   
|
| | Competitive benchmarking. The Company provides system
	analysis to its wireless customers for the measurement of
	network performance, including benchmarking versus
	competitors based upon a set of parameters such as call quality,
	drop call rates, signal strength and coverage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | Fixed network engineering. Because most wireless calls
	are ultimately routed through a wireline network, traffic from
	wireless networks must be connected with switching centers
	within wireline networks. The Companys engineers provide
	the most effective method to connect call sites to the wireless
	backbone. The Company is addressing the new demand for
	specialized engineering skills resulting from the conveyance of
	voice and data networks, including wireless broadband
	technologies such as LMDS, MMDS and Fast Ethernet. In addition,
	the Company is expanding its services to cover the entire core
	network including interconnect, switching and microwave
	engineering for all access technologies and into Local Exchange
	Carrier, Competitive Local Exchange Carrier and Incumbent Local
	Exchange Carrier communities.

Deployment Services. The Companys deployment
services are organized into four primary areas: (1) site
acquisition and development, (2) regulatory compliance,
(3) architecture and engineering and (4) construction
management.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Site acquisition and development. The Companys
	local experts in each market study the feasibility and
	desirability of locating base stations in the proposed area
	according to the wireless customers requirements,
	including zoning ordinance requirements, leasing constraints and
	building access issues.                                                                                                                 
|
| | Regulatory compliance.The Company develops a regulatory
	compliance program in the United States designed to satisfy FCC
	and Occupational Safety and Health Act requirements with respect
	to radio frequency emissions.                                                                                                                                                                                                           
|
| | Architecture and engineering. The Company provides a
	complete structural analysis of each site to confirm that the
	infrastructure has the structural capacity to accommodate the
	design of the wireless network. In particular, the Company
	implements location, software and capacity changes necessary to
	satisfy the customers performance specifications for its
	wireless network.                                       
|
| | Construction and procurement management. The Company
	manages various construction subcontractors to prepare the
	rooftop or tower site and secure the proper electrical and
	telecommunication connections. The Company also manages the
	procurement of materials and equipment for its wireless
	customers. The Company manages the installation of radio
	frequency equipment, including base station electronics and
	antennas.

Operations and Management Services

The Company recently began providing operations and management
services to wireless carriers with ongoing outsourcing needs.
Depending on customers needs, the scope of such
arrangements varies greatly  the Company may assume
responsibility for all or part of the day-to-day operation and
maintenance of wireless networks. The Company is currently
engaged to provide ongoing operations and management services to
wireless carriers such as Click Vodafone, satellite service
providers such as XM Satellite and tower management companies
such as Pinnacle Holdings. In particular, the Company provides
the staffing for XM Satellite necessary to perform all services
required for ongoing optimization, operations, maintenance and
repair of critical network elements, including redistribution or
elimination of cell sites, cost management and measurement of
network performance. In addition, services provided to Pinnacle
Holdings include auditing existing and new tower sites,
performing site maintenance and implementing capacity upgrades.

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Customers and Backlog

The Company provides consulting, design, deployment and
operating and management services to wireless carriers,
telecommunication equipment vendors, satellite service
providers, tower companies and Internet content providers. The
Companys top ten customers, listed below, accounted for
approximately 81% of total revenues for the fiscal year ended
December 31, 2000:



| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | AT&T Wireless Services 
	 Ben Netherlands 
	 BT Cellnet 
	 Ericcson 
	 Misrfone 
	 Nextel 
	 Sprint PCS 
	 Telfort Mobile 
	 Ubiquitel 
	 XM Satellite

For the year ended December 31, 2000, sales to XM
Satellite, Ubiquitel and Misrfone comprised 38.8%, 12.6% and
10.2%, respectively of the Companys total revenues.

The Company had a total backlog of $134.3 million as of
December 31, 2000, including renewals and extensions from
existing customers, compared with $135 million as of
December 31, 1999. Since significant uncertainty exists
regarding the timing of filling backlog orders, the Company
cannot accurately predict the portion of the backlog that will
be filled during 2001. The Company cannot provide assurances
that the contracts included in the backlog as of
December 31, 2000 will actually generate the revenues
anticipated or that actual revenues will be achieved within any
particular period. The Companys contracts typically
include provisions that permit customers to terminate their
contracts under various circumstances, including nonperformance
by the Company.

The principal portion of the Companys backlog arises from
contracts with two customers, XM Satellite and Pinnacle Tower
Inc. The Companys backlog as of December 31, 2000,
includes $33 million from XM Satellite, which represents 25% of
the total backlog and $48.4 million from Pinnacle Tower
Inc., which represents 36% of the total backlog. The
Companys tower services agreement with Pinnacle Tower
provides that on an annual basis in June of each year, either
party may renegotiate the pricing and scope of services to be
provided, including a reduction or elimination of services to be
provided. Therefore, there are no guarantees the current
contract with Pinnacle Tower will generate specified revenues or
produce the minimum payments of $10.0 million per year for five
years from the date of the agreement.

In addition to backlog, the Company derives significant revenue
from master service agreements and similar arrangements. Work
derived from such arrangements do not provide a long-term
contractual commitment and therefore are excluded from the
Companys backlog calculations.

Sales, Alliances and Marketing

The Company sells and markets its consulting, design, deployment
and operations and management services through the collaborative
efforts of its direct sales force, senior management, its
marketing group and its Wireless Institute.

Direct Sales

The Company has established direct sales forces in two regions
of the world: North America and Latin America; and Europe, the
Middle East and Africa, which also manages the Companys
sales efforts in Asia. The Companys professional sales
force works in conjunction with it senior executives to develop
new client relationships. Sales personnel and the Companys
senior management proactively establish contact with targeted
prospects to identify potential sales opportunities and work to
establish awareness and preference for

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Marketing

The Companys marketing staff supports its business
strategy through articles, publications, analyst meetings and
conferences. The marketing group conducts market and competitive
analysis, defines industry-specific business requirements and
identifies potential sales opportunities. The Companys
marketing group helps position service offerings, creates
awareness/brand recognition, and manages joint marketing efforts
with strategic alliance partners.

Strategic Alliances

An important element of the Companys sales and marketing
strategy is to develop and expand the scope of its strategic
alliances to further promote the Companys services. In
particular, the Company has entered into strategic alliances
with companies such as Mobilocity to jointly provide strategic
consulting and deployment services for third generation wireless
technology and mobile commerce. The Company has entered into
strategic alliances with providers of management consulting
services such as The Management Network Group, Inc. and the Dean
Group to provide comprehensive wireless solutions. The Company
also has made strategic investments in companies such as
Plan+Design Netcare AG, a German-based wireless network
deployment company and Tecnosistemi S.p.A., an Italian-based
wireless network deployment company. The Company has also
entered into joint marketing agreements with companies like
Plan+Design Netcare to pursue sales opportunities in different
regions of Europe and Asia. In addition, the Company recently
entered into an agreement with Transmast, Ltd. to target
additional sales opportunities in Europe and parts of Asia. The
Company has entered into a strategic alliance with Cisco as a
member of the Cisco System Preferred Services Partner Program in
wireless specialization. The Company assists Cisco in the
development of wireless Internet networks based on Ciscos
Vector Orthogonal Frequency Division Multiplexing
(VOFDM) technology and equipment. The Company also recently
entered into an agreement to partner with TESSCO, an equipment
provider to the wireless industry. The Company has also
established strategic relationships with major
telecommunications equipment vendors pursuant to which the
Company provides radio frequency engineering and other services
on a subcontract basis. The Company continually seeks to enter
into additional strategic alliances to further promote the
Companys services.

As of December 31, 2000, the Company employed 21 full-time
sales and marketing staff.

Competition

The market for technical consulting, design and deployment and
operations and management is highly competitive and fragmented
and includes numerous service providers. In particular, the
Company believes that the competition in Europe is particularly
fragmented with numerous small regional independent service
providers. The Companys competitors fall into five broad
categories:



| |   |                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | internal staffs of wireless network operators;                                                                                                                                                                                                   
|
| |  | telecommunication equipment vendors, which provide design and
	deployment services as part of an equipment sale;                                                                                                                                 
|
| |  | independent service companies such as Wireless Facilities, Inc.
	and o2wireless Solutions, Inc., each of whom provides 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 Fluor Daniel Inc. for the deployment of wireless
	networks;                                                                                                       

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| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | tower ownership and management companies, such as Crown Castle
	International and American Tower Corporation that provide tower
	deployment service capabilities; and                                       
|
| |  | information technology and consulting companies such as KPMG
	Consulting, Inc., Logica and others, which have developed
	capabilities to deliver network consulting services to wireless
	service providers.

Many of these competitors have significantly greater financial,
technical and marketing resources, generate greater revenues and
have greater name recognition than the Company.

The Company believes that the principal competitive factors in
its market include: expertise in new and evolving technologies,
industry experience, ability to deliver end-to-end services,
ability to deliver results within budget and on time,
reputation, and competitive pricing. In particular, the Company
believes that its ability to integrate new technologies and
equipment from multiple vendors and its ability to provide
training for its customers through its Wireless Institute
provides it with a competitive advantage.

The Company believes its ability to compete also depends on a
number of additional factors, which are outside of its control,
including:



| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | the willingness of competitors to finance customers
	projects on favorable terms, particularly among competitors in
	Europe; and
|
| |  | the ability and willingness of customers to rely on their
	internal staffs to perform services themselves.                       

Employees and Culture

Recognizing the critical importance of employee retention for
its business, the Company works closely with its employees to
develop and enhance the technical, professional and management
skills required to be successful in the Company. Senior
management of the Company believes it is critically important to
create and maintain an open culture that encourages learning,
responsibility and collaboration. C. Thomas Faulders, III, the
Companys chief executive officer, hosts monthly
teleconference meetings with all employees to foster an open
working environment. The Company recognizes that preserving its
culture requires its employees to have a stake in the success of
its business. For that reason, the Company has granted stock
options to 97% of its employees, including its clerical and
administrative support staff.

The Company invests in all of its professionals to expand their
professional education. In particular, the Company allocates
substantial resources to its Wireless Institute, which provides
training for its engineers covering the latest technologies
developed and employed throughout the world. For example, the
Companys Wireless Institute recently launched 3G training
seminars throughout Europe. In addition, the Companys
engineers receive continuous on-the-job exposure to the latest
wireless technologies.

As of December 31, 2000, the Company had 918 full-time
employees worldwide. The Company believes that relations with
its employees are good. None of the Companys employees are
represented by a labor union, and the Company has not
experienced any work stoppages. The Company believes that its
future growth and success will depend upon its ability to
attract and retain skilled and motivated personnel.

Recent Developments

Earlier this year, the Company and XM Satellite entered into
Amendment No. 6 to the Terrestrial Repeater Network System,
dated as of January 8, 2001. This amendment modified the
terms of the August 18, 1999 contract with XM Satellite and
provided that the Company would supply continuing engineering
support, including initial and ongoing operating and maintenance
services, for XMs terrestrial based digital satellite
network, and that the Company would construct a smaller number
of repeater sites than originally anticipated. The initial
deployment of XM Satellites terrestrial repeater network
is scheduled for completion during the second quarter of 2001.

On March 28, 2001, the United States Bankruptcy Court,
District of Maryland, Northern Division, entered an order
confirming the Amended Joint Plan Of Reorganization Under
Chapter 11, referred to as the Plan, for Pocket
Communications, Inc. and DCR PCS, Inc. The Plan provides that the

9



---





On March 15, 2001, the Company received payment of $2.1
million, net of taxes withheld at source of $0.4 million, as
complete settlement relative to receivable balances the Company
took a charge in 1997 from a client in Malaysia who successfully
emerged from bankruptcy.

International Operations

The further development of the Companys international
operations requires the Company to research and comply with
local laws and regulations, including employment, corporate and
tax laws. For example, if the Company enters into a longer term
contract overseas, it is often required to establish a local
presence in country, either as a branch or subsidiary and, if
hiring locally, to comply with all local employment recruiting,
hiring and benefit requirements. When not hiring locally the
Company faces the task of obtaining visas and work permits for
its assigned employees and must comply with withholding
requirements.

Research and Development

The Companys Research & Development group keeps pace
with the rapidly changing technology developments in the
wireless industry. Ongoing development of expertise in emerging
technologies allows the Company to modify service offerings, as
well as create new services to meet client needs. Such services
include 3G network design and dimensioning, engineering packet
switched backbones, and design and testing of location based
services, such as enhanced 911 systems, which are commonly
referred to as E911. The Research & Development
group also provides strategic consulting to assist wireless data
clients in issues such as business case planning, technology and
vendor evaluation, capital expenditure and operating expenditure
evaluation and due diligence.

Risk Factors

The Company may not be able to hire or
retain a sufficient number of qualified engineers and other
employees to meet the contract commitments or maintain the
quality of its services

The success of the Companys business depends significantly
on its ability to attract, train and retain highly skilled
engineering, system deployment, managerial, marketing and sales
personnel. Competition within the wireless industry for skilled
employees has been and continues to be intense, particularly for
radio frequency engineers and has at times made it difficult to
recruit and retain qualified technical personnel to properly and
quickly staff large customer projects. In addition to
recruitment difficulties, the Company must fully and properly
train its employees according to the customers technology
requirements and deploy and fully integrate each employee into
the customers project. Resource constraints may impede the
Companys ability to quickly and effectively train and
deploy all of the personnel required to staff a large project.

The Company, consistent with the wireless industry generally,
has experienced significant attrition in the last several years.
To the extent the Company continues to experience high turnover
rates, it will continue to incur significant expenses in
training and hiring its professional staff.

Departure of key personnel would
significantly harm the Companys business

The Companys future success depends to a significant
extent upon the continued services of its executive officers and
other key personnel. With the exception of its Chief Executive
Officer, none of its executive

10



---





Delays in the adoption and deployment of
new technologies such as 3G in Europe and broadband in the
United States appear likely, which would negatively affect the
Companys opportunity to generate future revenues

Wireless carriers in Europe and broadband carriers in the United
States may delay or fail to make the significant capital
commitments necessary to begin deployment of their wireless
networks. The costs to acquire 3G/ Universal Mobile
Telecommunications Service (UMTS) licenses that have been
issued in Europe to date have been substantial and wireless
carriers currently may not have the capital required to begin
deployment of their networks based on 3G technology. In
addition, in certain countries in Europe, such as France,
auctions of wireless spectrum for 3G have generated less
interest from wireless carriers than originally anticipated. In
the United States, capital investments for the development of
broadband technology appear to have slowed given recent market
conditions in the wireless industry. Therefore, it appears
unlikely that wireless carriers will begin making substantial
investments for the deployment of wireless networks based on 3G
and broadband technology in 2001. Any such delay or abandonment
of deployment projects would negatively affect the
Companys opportunity to generate significant revenues.

The Company may experience significant
fluctuations in its quarterly results and uncertainties relating
to backlog

The Companys quarterly and annual operating results have
varied considerably in the past and are likely to vary
considerably in the future due to a number of factors, many of
which are outside of the Companys control. The factors
outside the Companys control include, among others:



| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | the timing of receipt of new licenses or financing by potential
	customers;
|
| |  | the length of sales cycles;                                                
|
| |  | changes in pricing policy by our competitors;                              
|
| |  | the timing of contracts;                                                   
|
| |  | customer budget changes; and                                               
|
| |  | the availability of capital for wireless carriers to fund
	build-outs.     

The factors within the Companys control include, among
others:



| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | changes in the actual and estimated costs and timing to complete
	fixed-price, time-certain projects; and
|
| |  | changes in the prices of services offered by the Company.                                                

Due to the above factors, quarterly revenues, expenses and
results of operations could vary significantly in the future and
therefore the Companys results may not meet the
expectations of securities analysts and investors, which could
cause the price of the Companys common stock to decline
significantly. Even after contracts are entered into, the timing
of delivery of services depends in part on the customers
readiness to receive the services and the pace of the build-out
of the customers network. The timing of build-out in turn
depends on many business decisions by the customer and provision
of services and equipment by other providers. The Company
generally establishes its expenditure levels for other operating
expenses based in large part on its expected future revenues. If
revenues fall below its expectations, the Companys
operating results likely would be adversely affected.

11



---



An increasing percentage of the
Companys revenue is contracted on a fixed price basis
which could cause its quarterly results to fluctuate

An increasing percentage of the Companys revenue is
derived from fixed price contracts which are accounted for on a
percentage of completion basis. The portion of the
Companys revenue from fixed price contracts has grown
significantly as a percentage of total revenues. With the
percentage-of-completion method, in each period the Company
recognizes expenses as they are incurred and recognizes revenue
based on the ratio of the current costs incurred for the project
to the then estimated total costs of the project. Accordingly,
the revenue the Company recognizes in a given quarter depends
on, among other things, costs it has incurred for individual
projects and its then current estimate of the total remaining
costs to complete individual projects. Changes in total contract
cost estimates result in a cumulative adjustment to revenue
recognized. As a result, the Companys gross profit in such
period and in future periods may be significantly reduced or
eliminated. If the total contract cost estimates indicate that
there is a loss, such loss is recognized in the period such
determination is made. The portion of the Companys revenue
from fixed price contracts has grown significantly as a
percentage of revenues. To the extent that the Companys
estimates fluctuate over time or differ from actual
requirements, the Companys results may be materially
affected.

Operating results may suffer because of
intense competition in the wireless services industry in the
United States and internationally

The Company faces intense competition in the United States and
internationally in the market for wireless network design and
system deployment services. Many other companies offer these
services, and the Company believes that the number of other
independent firms providing these services to wireless network
operators throughout the world is increasing. Wireless operators
themselves and system equipment vendors are also developing
capabilities competitive with those we provide.

Competitors that offer wireless customers
financing pose a threat to the Companys ability to compete
for business, particularly in international markets

Wireless network operators, particularly new operators and new
licensees, depend increasingly on wireless telecommunication
equipment vendors to supply and to finance the deployment of
entire wireless networks. Frequently, those vendors only make
financing available for services or products if they are
contracted to provide the services themselves. For services the
vendors do not provide directly, financing is provided only if
they have the right to select the providers of those services
and products, including radio frequency engineering and network
deployment services. The Company faces similar competition in
the United States and internationally from tower ownership and
management companies that provide tower deployment service
capabilities as part of their overall leasing package or as part
of a build-to-suit financing package. The Company has not
provided, and does not intend to provide, financing to its
wireless customers. To the extent that future wireless companies
continue to seek such financing, it would harm the
Companys ability to compete for such business.

Equipment telecommunication vendors and
tower companies have greater resources than the Company does and
pose a substantial threat to the Companys business

Many equipment telecommunication vendors and tower companies
have substantially greater financial and other resources than
the Company does. The ability of such competitors to leverage
their greater resources to more effectively deliver a full
turnkey solution, i.e. by providing equipment as part of their
solution or quickly deploying a large number of personnel for a
project, poses a competitive threat to the Companys
business. In addition, any consolidation of equipment vendors
may lead to a greater ability among equipment vendors to provide
a full suite of wireless network services and could simplify
integration and installation, which may lead to a reduction in
demand for the Companys services.

12



---



The Companys failure to anticipate
or adapt to changes in technology may harm its business

The Company operates in a highly competitive environment that is
subject to rapid technological changes and the emergence of new
technologies. Future revenues for the Company depend
significantly upon the adoption and deployment by wireless
customers of new technologies. Any failure of the Company to
anticipate technological trends or evolving industry standards
or to adequately train its professional staff to implement
emerging technologies could materially harm its business.

The Companys business may be harmed
if demand for outsourced wireless network services decreases

The wireless telecommunication industry is undergoing
significant changes that has reduced, and may continue to
reduce, the demand for the Companys services. Those
changes include:



| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | operators of mature wireless networks are employing their own
	engineers instead of engaging the Company; and  
|
| |  | equipment vendors and tower companies are offering design
	services and financing bundled with their equipment.

Over the last few years, operators of several mature wireless
networks have reduced the amount of engineering services they
buy from us and have been using their own engineers. The Company
expects this trend to continue and to affect other types of
wireless networks in the U.S. and internationally.

Fluctuations in international operating
results may harm the Companys business

Approximately 29% of the Companys revenues for the year
ended December 31, 2000 were generated outside of the United
States, and the Company currently expects this segment of its
business to increase as a percentage of its revenues in 2001.
Selling services in foreign countries are subject to various
risks inherent in international business activities. Such risks
include:



| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | the general economic and political conditions in each country;            
|
| |  | the effect of applicable foreign tax structures;                          
|
| |  | tariff and trade regulations;                                             
|
| |  | difficulties in obtaining local business licenses;                        
|
| |  | management of a geographically diverse organization; and                  
|
| |  | difficulties in complying with a variety of foreign laws and
	regulations.

In addition, changes in the regulatory environments in foreign
countries, including delays in deregulation or privatization
affecting the pace at which licenses are awarded to wireless
network system operators, affect the level and timing of the
demand for our services and products.

Providing services outside the United States carries the
additional risk of currency fluctuations and foreign exchange
controls imposed by certain countries. We try to address these
issues at the onset of an agreement and establish proper
reserves. In addition, when entering into agreements with
foreign customers, many of those customers will not agree to US
style payment terms or payment in US dollars.

The Companys failure to secure
significant customers and large contracts could cause a
significant decrease in net revenues

The Company has derived, and believes that it will continue to
derive, a significant portion of revenues from a limited number
of customers. For example, for the year ended December 31,
2000, the Company derived approximately 81% of its revenues from
its ten largest customers. Although its major customers
generally have differed from year to year as the Company
completes work under existing contracts and begins providing
services under new contracts, the Company depends upon securing
new large contracts from some customers each year to achieve a
substantial portion of its revenues. For example, the initial
deployment of

13



---





In addition, the Companys contracts typically have
provisions that permit customers to terminate their contracts
under various circumstances, which include nonperformance or
unsatisfactory performance by the Company. Customers under
long-term contracts may attempt to cancel or renegotiate those
contracts. If a large project is delayed or cancelled, the
Companys revenues may be negatively impacted and the
Company may encounter difficulty in shifting its personnel to
another project.

Because the Company has experienced, and
expects to continue to experience, long sales cycles, the
Company expects to incur significant costs to generate new
business and its customer base may not experience rapid
growth

Purchases of its services by customers often entail a lengthy
decision-making process for the customer. Selecting wireless
network deployment services involves substantial costs and has
strategic implications. Senior management of the customer is
often involved in this process, given the importance of the
decision, as well as the risks faced by the customer if the
services do not meet the customers particular needs.
Therefore, large procurements of its services involve lengthy
selling cycles, resulting in a relatively high cost for the
Company to generate new business.

The Company depends on proprietary
technology of others

The Company does not own proprietary software and field test
measurement equipment products used to perform radio frequency
engineering services. Instead, the Company licenses these
technologies from third parties pursuant to agreements which may
not be perpetual in duration. While these products are available
from multiple sources, the termination of one or more of these
licenses, their renewal on terms materially less favorable to
the Company or any other loss of the right to use such
technologies (including loss of intellectual property rights by
a licensor) could adversely affect the Companys business.

In addition, effective copyright, trademark or trade secret
protection may be unavailable to the Companys licensors or
limited in certain circumstances. Third parties may assert
infringement claims against the Company in the future that may
require it to enter into royalty arrangements or result in
costly litigation, damages or injunctive relief against us for
which the Company may not be compensated by its licensors.

RF Investors voting control may
result in the taking of certain unilateral actions

RF Investors owns all of the outstanding shares of our
Class B Common Stock, which represents 87.5% of the
combined voting power of both classes of common stock. These
shares may be sold without your participation in the sale.
Accordingly, RF Investors, its parent company Telcom Ventures
and its equity holders are able, without your approval, to
control our management and operations and the outcome of
virtually all matters submitted for a stockholder vote.

RF Investors may also, by converting its shares of Class B
Common Stock into shares of Class A Common Stock, obtain a
sufficient number of shares of Class A Common Stock (41% of
the total outstanding shares of Class A Common Stock on
March 26, 2001) to influence the outcome of any vote on
which the holders of Class A Common Stock are entitled to
vote together as a class.

Dr. Rajendra and Neera Singh, who with certain Singh family
trusts indirectly own 75% of Telcom Ventures, are directors or
executive officers. Gregory Ledford, a designee of the Carlyle
Investors, 25% owners of Telcom Ventures, is also one of our
directors.

14



---



The Telcom Ventures and RF Investors limited liability company
agreements provide that, for as long as the Carlyle Investors
collectively owns at least 5% of the total membership interests
of Telcom Ventures, Telcom Ventures and RF Investors must vote
their stock in us:



| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | to elect as our directors up to two persons recommended by the
	Carlyle Investors, upon the request of the Carlyle Investors; and
|
| |  | not to take any of the following actions without the consent of
	the Carlyle Investors:                                          



| |     |                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | approve any amendment to our certificate of incorporation or
	bylaws;                                                                                                                                                                                                                                                                                                            
|
| | (b) | approve our incurrence of any debt (or the granting of security
	relating to the incurrence of debt) if as a result of the debt
	incurrence, our debt to equity ratio exceeds 6:1 or, if as a
	result of the debt incurrence, our total outstanding debt
	exceeds $50 million plus or minus, as the case may be, our
	cumulative net income or our net losses after January 1994;
|
| | (c) | approve any new affiliated party transactions between us and RF
	Investors, Telcom Ventures or the Singh family in excess of
	$150,000 or modifications to existing transactions, subject to
	certain limited exceptions;                                                                                                                                                        
|
| | (d) | approve the appointment as our independent accountants of a firm
	other than one of the big five accounting firms; or                                                                                                                                                                                                                                                          
|
| | (e) | approve certain events relating to our bankruptcy or insolvency.                                                                                                                                                                                                                                                                                                                 

The RF Investors and Telcom Ventures limited liability company
agreements provide for certain rights of the Carlyle Investors
to cause the distribution to the Carlyle Investors, beginning
September 30, 1999, of up to 25% of the common stock held
by RF Investors. Such a distribution would still leave RF
Investors with voting control over us.

The Companys relationship with
Telcom Ventures may result in potential conflicts of interest

Telcom Ventures, RF Investors parent company, is
principally engaged in making investments in wireless system
operators and emerging wireless and internet technologies.
Directors of Telcom Ventures and its subsidiaries who are also
our directors or officers have certain fiduciary obligations to
each organization. Telcom Ventures and directors of Telcom
Ventures and its subsidiaries who are also our directors and
officers may be subject to conflicts of interest in transactions
concerning the Company.

The Company has entered, and will enter, into arrangements with
Telcom Ventures and certain of Telcom Ventures
subsidiaries which provide for transactions and relationships
between the parties or which otherwise affect the Company. The
Company, RF Investors, Telcom Ventures, and the Telcom Ventures
owners (the Singh family, including companies they own, and the
Carlyle Investors) have entered into an intercompany agreement,
by which, among other things, (i) the Singh Family group is
limited in its ability to compete with the Company in its
traditional lines of business and (ii) Telcom Ventures is
limited in its ability to invest in entities whose primary
business is to compete with the Company in its traditional lines
of business, in each case until the earlier of (i) the date
on which those owners no longer possess 51% or more of the
outstanding voting power of the Company or (ii) the
occurrence of certain termination events specified in the
intercompany agreement.

Each of the Carlyle Investors (but not its affiliates) is
limited in its ability to invest in entities whose primary
business is to compete with the Company in its traditional line
of business (excluding the program management and tower
businesses) until the earlier of (i) the date on which the
Carlyle Investor no longer owns, directly or indirectly, an
interest in the Company or (ii) the occurrence of certain
termination events specified in the intercompany agreement.

The Company is free to pursue investment opportunities on its
own, but it is obligated to refer to Telcom Ventures investment
opportunities prior to offering the opportunities to any other
third party. If Telcom Ventures does not elect to pursue the
investment opportunity within five days, the Company will then
be free

15



---





Item 2.  Properties

The Company leases approximately 155,000 square feet of office
space in McLean, Virginia, under a ten-year lease expiring in
2006. The Company occupies approximately 106,000 square feet of
the leased space and subleases the remaining 49,000 square feet
to other tenants. The Company also leases an additional 29,500
square feet of office space in McLean, Virginia, under a
five-year lease expiring in May 2001. This lease is
renewable for additional five-year terms, and the Company
subleases portions of this space to other tenants. In addition,
the Company leases a total of 11 local and regional offices in
North and South America, including New York, New York and leases
five local and regional offices in Europe, including London,
England.

Item 3.  Legal Proceedings

The Company is party to various non-material legal proceeding
and claims incidental to its business.

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

None

16



---



PART II

Item 5.  Market for Registrants
Common Stock and Related Stockholder Matters

Since completion of the Companys initial public offering
in September 1996, its Class A Common Stock has been
quoted on the Nasdaq National Market under the trading symbol
LCC. As of March 26, 2001, there were 101
stockholders of record of the Class A Common Stock and, in
excess of 5,220 beneficial holders thereof, and two stockholders
of record of the Class B Common Stock. The following table
summarizes the high and low closing sale prices of the
Class A Common Stock by fiscal quarter for 1999 and 2000 as
reported on the Nasdaq National Market:

|               |  |      |         |  |  |   |       | 
|-------------- |  | ---- | ------- |  |  | - | ----- | 
|               |  |     
|Quarter Ended: |  | 1999
|               |  |     
|               |  |      |         | 
|              
|              
|              
|              
|March 31       |  | $    | 3.78 to |  |  | $ | 6.00  | 
|              
|              
|              
|              
|June 30        |  | $    | 3.50 to |  |  | $ | 5.97  | 
|              
|              
|              
|              
|September 30   |  | $    | 4.19 to |  |  | $ | 7.81  | 
|              
|              
|              
|              
|December 31    |  | $    | 5.50 to |  |  | $ | 19.94 | 

|               |  |      |          |  |  |   |       | 
|-------------- |  | ---- | -------- |  |  | - | ----- | 
|               |  |     
|Quarter Ended: |  | 2000
|               |  |     
|               |  |      |          | 
|              
|              
|              
|              
|March 31       |  | $    | 16.00 to |  |  | $ | 45.25 | 
|              
|              
|              
|              
|June 30        |  | $    | 13.13 to |  |  | $ | 39.63 | 
|              
|              
|              
|              
|September 30   |  | $    | 14.38 to |  |  | $ | 28.06 | 
|              
|              
|              
|              
|December 31    |  | $    | 6.56 to  |  |  | $ | 15.81 | 

The Company has never paid any cash dividends on Common Stock
and the Company does not anticipate paying dividends on the
Common Stock, cash or otherwise, in the foreseeable future.
Future dividends, if any, will be at the discretion of the Board
of Directors and will depend upon, among other things, the
Companys operations, capital requirements and surplus,
general financial condition, contractual restrictions and such
other factors as the Board of Directors may deem relevant.

Item 6.  Selected Financial Data

Set forth below are (i) selected consolidated financial
data as of and for each of the years in the five-year period
ended December 31, 2000, which have been derived from the
Companys audited consolidated financial statements and
(ii) unaudited pro forma net loss per share data prepared
as if the Company were treated as a Subchapter C Corporation for
Federal and state income tax purposes in 1996. The selected
consolidated financial data set forth below should be read in
conjunction with Item 7, Managements Discussion
and Analysis of Financial Condition and Results of
Operations and the consolidated financial statements and
related notes thereto included, or incorporated by reference,
elsewhere in this Form 10-K.

17



---



|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |         |         | 
|--------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------- | ------- | -------- | ------ | -------- | ------ | -------- | ------ | ---- | ------- | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------- | ------- | 
|                                                                                  |                                                         |                                      
|                                                                                  |                                                         | Years Ended December 31,             
|                                                                                  |                                                         |                                      
|                                                                                  |                                                         | 1996 (2)                              |         | 1997 (2) |        | 1998 (2) |        | 1999 (2) |        | 2000
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |     
|                                                                                  |                                                         |                                      
|                                                                                  |                                                         | (in thousands, except per share data)
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Revenues:                                                                         |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Service                                                 |                                       | $       | 93,156   |        |          | $      | 91,289   |        |      | $       | 86,328 |        |   | $      | 73,289 |        |   | $      | 149,385 |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Tower ownership and management                          |                                       |         |         |        |          |        |         |        |      |         | 860    |        |   |        | 2,504  |        |   |        | 1,008   |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  |                                                         | Total revenues                        |         |          | 93,156 |          |        |          | 91,289 |      |         |        | 87,188 |   |        |        | 75,793 |   |        |         | 150,393 | 
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Cost of revenues:                                                                 |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Service                                                 |                                       |         | 61,581   |        |          |        | 62,263   |        |      |         | 66,238 |        |   |        | 53,080 |        |   |        | 109,952 |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Tower ownership and management                          |                                       |         |         |        |          |        |         |        |      |         | 521    |        |   |        | 1,176  |        |   |        | 333     |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  |                                                         | Total cost of revenues                |         |          | 61,581 |          |        |          | 62,263 |      |         |        | 66,759 |   |        |        | 54,256 |   |        |         | 110,285 | 
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Gross profit                                                                      |                                                         |                                       | 31,575  |          |        |          | 29,026 |          |        |      | 20,429  |        |        |   | 21,537 |        |        |   | 40,108 |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Operating expenses:                                                               |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Sales and marketing                                     |                                       |         | 1,200    |        |          |        | 2,466    |        |      |         | 3,843  |        |   |        | 5,464  |        |   |        | 7,833   |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | General and administrative                              |                                       |         | 13,030   |        |          |        | 18,314   |        |      |         | 22,063 |        |   |        | 18,128 |        |   |        | 19,673  |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Special charge (credit)                                 |                                       |         | 28,920   |        |          |        | (3,894   | )      |      |         |       |        |   |        |       |        |   |        |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Restructuring charge                                    |                                       |         |         |        |          |        |         |        |      |         | 1,256  |        |   |        |       |        |   |        | (108    | )      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Non-cash compensation                                   |                                       |         | 6,831    |        |          |        | 514      |        |      |         | 362    |        |   |        | (12    | )      |   |        |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Gain on sale of tower portfolio and administration, net |                                       |         |         |        |          |        |         |        |      |         |       |        |   |        |       |        |   |        | (26,437 | )      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Depreciation and amortization                           |                                       |         | 2,330    |        |          |        | 3,410    |        |      |         | 2,409  |        |   |        | 3,628  |        |   |        | 2,899   |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  |                                                         | Total operating expenses              |         |          | 52,311 |          |        |          | 20,810 |      |         |        | 29,933 |   |        |        | 27,208 |   |        |         | 3,860   | 
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Operating income (loss)                                                           |                                                         |                                       | (20,736 | )        |        |          | 8,216  |          |        |      | (9,504  | )      |        |   | (5,671 | )      |        |   | 36,248 |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Other income (expense)                                                            |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Interest, net                                           |                                       |         | (2,125   | )      |          |        | (2,553   | )      |      |         | (1,397 | )      |   |        | (1,827 | )      |   |        | 1,688   |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Other                                                   |                                       |         | 2,385    |        |          |        | 1,275    |        |      |         | (618   | )      |   |        | (1,391 | )      |   |        | (787    | )      
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  |                                                         | Total other income (expense)          |         |          | 260    |          |        |          | (1,278 | )    |         |        | (2,015 | ) |        |        | (3,218 | ) |        |         | 901     | 
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Income (loss)from continuing operations before income taxes                       |                                                         |                                       | (20,476 | )        |        |          | 6,938  |          |        |      | (11,519 | )      |        |   | (8,889 | )      |        |   | 37,149 |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Provision (benefit) for income taxes                                              |                                                         |                                       | (8,745  | )        |        |          | 1,548  |          |        |      | (4,561  | )      |        |   | (2,677 | )      |        |   | 16,531 |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Income (loss) from continuing operations                                          |                                                         |                                       | (11,731 | )        |        |          | 5,390  |          |        |      | (6,958  | )      |        |   | (6,212 | )      |        |   | 20,618 |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income (loss) from discontinued operations net of tax
        provision (benefit) |                                                         |                                       | 447     |          |        |          | 2,185  |          |        |      | (17,785 | )      |        |   |       |        |        |   |       |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Gain on disposal of discontinued operations net of tax provision                  |                                                         |                                       |        |          |        |          |       |          |        |      |        |        |        |   | 803    |        |        |   |       |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Net income (loss)                                                                 |                                                         | $                                     | (11,284 | )        |        | $        | 7,575  |          |        | $    | (24,743 | )      |        | $ | (5,409 | )      |        | $ | 20,618 |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Income (loss) per share:                                                          |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Continuing operations:                                                            |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Basic                                                   |                                       |         |          |        |          | $      | 0.37     |        |      | $       | (0.45  | )      |   | $      | (0.36  | )      |   | $      | 1.01    |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  | Diluted                                                 |                                       |         |          |        |          | $      | 0.34     |        |      | $       | (0.45  | )      |   | $      | (0.36  | )      |   | $      | 0.93    |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Discontinued operations:                                                          |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Basic                                                   |                                       |         |          |        |          | $      | 0.15     |        |      | $       | (1.15  | )      |   | $      | 0.05   |        |   |        |        |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  | Diluted                                                 |                                       |         |          |        |          | $      | 0.14     |        |      | $       | (1.15  | )      |   | $      | 0.05   |        |   |        |        |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Net income (loss) per share:                                                      |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Basic                                                   |                                       |         |          |        |          | $      | 0.51     |        |      | $       | (1.60  | )      |   | $      | (0.31  | )      |   | $      | 1.01    |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  | Diluted                                                 |                                       |         |          |        |          | $      | 0.47     |        |      | $       | (1.60  | )      |   | $      | (0.31  | )      |   | $      | 0.93    |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Unaudited Pro Forma Data:                                                         |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Pro forma loss from continuing operations                                         |                                                         | $                                     | (18,693 | ) (1)    |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Pro forma loss from discontinued operations                                       |                                                         | $                                     | (2,076  | ) (1)    |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Pro forma net loss                                                                |                                                         | $                                     | (20,769 | ) (1)    |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Pro forma loss per share:                                                         |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Continuing operations:                                                            |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Basic and diluted                                       |                                       | $       | (1.53    | )      |          |        |          |        |      |         |        |        |   |        |        |        |   |        |         |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Discontinued operations:                                                          |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Basic and diluted                                       |                                       | $       | (0.17    | )      |          |        |          |        |      |         |        |        |   |        |        |        |   |        |         |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Pro forma net loss                                                                |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Basic and diluted                                       |                                       | $       | (1.70    | ) (1)  |          |        |          |        |      |         |        |        |   |        |        |        |   |        |         |        
|                                                                                  |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|Consolidated Balance Sheet Data (at year-end):                                    |                                                         |                                       |         |          |        |          |        |          |        |      |         |        |        |   |        |        |        |   |        |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Working capital                                         |                                       | $       | 49,840   |        |          | $      | 59,155   |        |      | $       | 14,471 |        |   | $      | (8,039 | )      |   | $      | 59,460  |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Intangibles, net                                        |                                       |         | 354      |        |          |        | 368      |        |      |         | 572    |        |   |        | 430    |        |   |        | 57      |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Total assets                                            |                                       |         | 89,363   |        |          |        | 95,420   |        |      |         | 84,204 |        |   |        | 82,868 |        |   |        | 110,045 |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Long term liabilities                                   |                                       |         | 50,807   |        |          |        | 50,210   |        |      |         | 50,115 |        |   |        | 1,006  |        |   |        | 5,944   |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Equity                                                  |                                       |         | 8,477    |        |          |        | 20,202   |        |      |         | 229    |        |   |        | 42,426 |        |   |        | 68,416  |        

18



---






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Unaudited pro forma net loss has been adjusted to
	reflect the pro forma effects as if the Company were treated as
	a Subchapter C Corporation in 1996. Unaudited pro forma net loss
	is net of a benefit for income taxes at an assumed effective
	income tax rate of 40%. The total amount of the pro forma
	benefit for income taxes was $1,886,000 for the year ended
	December 31, 1996. Weighted average shares, basic and
	diluted, used in the computation of pro forma net loss per share
	were 12,211 shares.
|   
|(2) | In March 1999, the Companys Board of
	Directors adopted a plan to dispose of the operations comprising
	its hardware and software segments (see note 3 to the
	Consolidated Financial Statements) which were sold to Ericsson
	Radio Systems AB in October 1999. Prior year balances have
	been restated to reflect these segments as discontinued
	operations.                                                                                                                                                       

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 the Companys consolidated financial
statements and the notes thereto and the other financial data
appearing elsewhere in this Form 10-K.

Overview

The Company provides integrated end-to-end solutions for
wireless voice and data communications networks with offerings
ranging from high level technical consulting, system design and
deployment and ongoing management and optimization services.
Since its inception in 1983, the Company has delivered wireless
network solutions to more than 200 customers in over 50
countries. Internationally-based customers accounted for
approximately 29% of the Companys revenues for the year
ended December 31, 2000.

In the last two years, the Company has made several strategic
decisions that have enabled it to return to its core competency
in providing end-to-end wireless services. In October 1999,
the Company disposed of its software product business and, in
March 2000, the Company sold its telecommunication tower
business. In addition, during the last two years, the Company
has entered into a number of joint ventures and strategic
investments to enhance its wireless capabilities with a
particular focus on certain international markets.

The Company operates in a highly competitive environment subject
to rapid technological change and emergence of new technologies.
Historically, the key drivers of growth in the Companys
wireless services business have been (1) the issuance of
new or additional licenses to wireless operators; (2) the
introduction of new services or technologies; (3) increases
in the number of subscribers served by wireless operators; and
(4) the increasing complexity of wireless systems in
operation.

Sources of Revenue and Revenue Recognition Policy

The Companys principal source of revenues consist of
design services and system deployment services. The Company
provides design services on a contract basis, usually in a
customized plan for each client and generally charges for
engineering services on a time and materials or fixed price
basis. The Company generally offers its deployment services on a
fixed-price, time-certain basis. Revenues are recognized for
such contracts using the percentage-of-completion method. Under
the percentage-of-completion method, expenses on each project
are recognized as incurred, and revenues are recognized based on
the ratio of the current costs incurred for the project to the
then estimated total costs of the project. Accordingly, revenue
recognized in a given period depends on, among other things, the
costs incurred on each individual project and the current
estimate of the total costs to complete a project. If cost
estimates increase, gross profit for any single project may be
significantly reduced or eliminated. If the total contract cost
estimates indicate that there is a loss, such loss is recognized
in the period such determination is made.

Cost of revenues consists of costs associated with engineering
design and program management services. Sales and marketing
expenses consist of salaries, sales commissions, bonuses, travel
and other expenses required to implement the Companys
marketing, sales and customer support plans. General and
administrative expenses consist of the compensation, benefits,
office and occupancy, and other costs required for the finance,
human resources, information systems and executive office
functions. Non-cash compensation consists of awards under a
program for key employees adopted in 1994. Such plan was
accounted for as a variable plan, and therefore, to the extent
that the deemed fair market value of the Company increased,

19



---





Results of Operations

Continuing Operations

The following table sets forth certain items as a percentage of
revenues from the Companys audited consolidated statements
of operations for the years ended December 31, 1998, 1999,
and 2000. The table and discussion which follow provide
information which management believes is relevant to an
assessment and understanding of the Companys consolidated
results of operations and financial condition. The discussion
should be read in conjunction with the consolidated financial
statements and accompanying notes thereto included elsewhere
herein.

|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |       |       | 
|------------------------------------------------------------- | -------------------------------------------- | ---------------------------- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | - | ---- | ----- | ----- | 
|                                                              |                                              |                             
|                                                              |                                              | Years Ended December 31,    
|                                                              |                                              |                             
|                                                              |                                              | 1998                         |       | 1999 |       | 2000
|                                                              |                                              |                              |       |      |       |     
|Revenues:                                                     |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Service                                      |                              |       | 99.0 | %     |      |       | 96.7 | %     |   |      | 99.3  | %    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Tower ownership and management               |                              |       | 1.0  |       |      |       | 3.3  |       |   |      | 0.7   |      
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                              |                                              | Total revenues               |       |      | 100.0 |      |       |      | 100.0 |   |      |       | 100.0 | 
|                                                             
|                                                             
|                                                             
|                                                             
|Cost of revenues:                                             |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Service                                      |                              |       | 76.0 |       |      |       | 70.0 |       |   |      | 73.1  |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Tower ownership and management               |                              |       | 0.6  |       |      |       | 1.6  |       |   |      | 0.2   |      
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                              |                                              | Total cost of revenues       |       |      | 76.6  |      |       |      | 71.6  |   |      |       | 73.3  | 
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|Gross profit:                                                 |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Service                                      |                              |       | 23.0 |       |      |       | 26.7 |       |   |      | 26.2  |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Tower ownership and management               |                              |       | 0.4  |       |      |       | 1.7  |       |   |      | 0.5   |      
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|Gross profit                                                  |                                              |                              | 23.4  |      |       |      | 28.4  |      |       |   | 26.7 |      
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|Operating expenses:                                           |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Sales and marketing                          |                              |       | 4.4  |       |      |       | 7.2  |       |   |      | 5.2   |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | General and administrative                   |                              |       | 25.3 |       |      |       | 23.9 |       |   |      | 13.1  |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Restructuring charge                         |                              |       | 1.4  |       |      |       |     |       |   |      | (0.1  | )    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Non-cash compensation                        |                              |       | 0.4  |       |      |       |     |       |   |      |      |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Tower portfolio sale and administration, net |                              |       |     |       |      |       |     |       |   |      | (17.5 | )    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Depreciation and amortization                |                              |       | 2.8  |       |      |       | 4.8  |       |   |      | 1.9   |      
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                              |                                              | Total operating expenses     |       |      | 34.3  |      |       |      | 35.9  |   |      |       | 2.6   | 
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|Operating income (loss)                                       |                                              |                              | (10.9 | )    |       |      | (7.5  | )    |       |   | 24.1 |      
|                                                             
|                                                             
|                                                             
|                                                             
|Other income (expense):                                       |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Interest income                              |                              |       | 1.0  |       |      |       | 0.4  |       |   |      | 1.3   |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Interest expense                             |                              |       | (2.6 | )     |      |       | (2.8 | )     |   |      | (0.2  | )    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Other                                        |                              |       | (0.7 | )     |      |       | (1.8 | )     |   |      | (0.5  | )    
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|                                                              |                                              | Total other income (expense) |       |      | (2.3  | )    |       |      | (4.2  | ) |      |       | 0.6   | 
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|Income (loss) from continuing operations
	before income taxes |                                              |                              | (13.2 | )    |       |      | (11.7 | )    |       |   | 24.7 |      
|                                                             
|                                                             
|                                                             
|                                                             
|Provision (benefit) for income taxes                          |                                              |                              | (5.2  | )    |       |      | (3.5  | )    |       |   | 11.0 |      
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      
|Income (loss) from continuing operations                      |                                              |                              | (8.0  | )%   |       |      | (8.2  | )%   |       |   | 13.7 | %    
|                                                              |                                              |                              |       |      |       |      |       |      |       |   |      |      

20



---



Year Ended December 31, 2000 Compared to Year Ended
December 31, 1999

Revenues

Revenues for the twelve months ended December 31, 2000 were
$150.4 million compared to $75.8 million for the prior
year, an increase of $74.6 million or 98%. Increased
revenue in North America of $68.1 million was the largest
contributor to the growth, with the XM Satellite contract
providing 71% of the North American increase. Other North
American growth of $20 million was derived from radio
frequency design ($6.3 million) and deployment
($13.7 million) services. Also contributing to the
increased service revenue, was growth in the Middle East, Asia,
and Europe ($12.4 million), offset by declines in Central
and Latin America ($4.0 million).

Cost of Revenues

Cost of revenues for the twelve months ended December 31,
2000 was $110.3 million compared to $54.3 million for
the prior year, an increase of $56.0 million or 103%.
During the year, the Company evaluated certain employment
related tax accruals recorded in prior years. This evaluation
included the effect of systems and procedures implemented by the
Company, as well as, assumed reductions in exposure due to
changed circumstances and the passage of time. As a result, the
Company reduced contract costs by $2.4 million during the year.
As a percentage of total revenues, cost of revenues was 73.3%
and 71.6% for December 31, 2000 and 1999, respectively.

Gross Profit

Gross profit for the twelve months ended December 31, 2000
was $40.1 million compared to $21.5 million for the
prior year, an increase of $18.6 million or 86.5%. The
gross profit increase is largely attributable to the increase in
revenues. As a percentage of total revenues, gross profit was
26.7% and 28.4% for December 31, 2000 and 1999,
respectively. The largest single factor contributing to the
decline in gross profit margin is the reduction in tower rental
revenue, which accounts for 70% of the gross profit margin
decline. Tower Ownership and Management revenues generate larger
gross profits, but higher depreciation and administrative costs
than revenues derived from services. The balance of the margin
decrease is attributable to large fixed price contracts,
including a cost of revenue increase of $0.8 million to
reflect an increase in contract cost estimates in the fourth
quarter of 2000. The contract cost increases in 2000 were offset
by the reduction in employment related tax accruals discussed in
cost of revenues.

Sales and Marketing

Sales and marketing expenses were $7.8 million for the
twelve months ended December 31, 2000 compared to
$5.5 million for the prior year, an increase of
$2.3 million. As a percentage of total revenues, sales and
marketing was 5.2% and 7.2% for 2000 and 1999, respectively. The
increased revenue from large, end-to-end service contracts
enabled sales and marketing costs to increase at a lower rate
than revenue growth.

General and
Administrative

General and administrative expenses were $19.7 million for
the twelve months ended December 31, 2000 compared to
$18.1 million for the prior year, an increase of
$1.6 million. As a percentage of total revenues general and
administrative cost was 13.1% and 23.9% for 2000 and 1999,
respectively. General and administrative expenditures as a
percent of revenue were unusually high due to large legal
expenditures in 1999 relative to litigation with minority
shareholders of Microcell and support relative to the sale of
discontinued operations. Additionally, the increased revenue
from large, end-to-end service contracts enabled general and
administrative costs to increase at a lower rate than revenue
growth.

Tower Portfolio Sale and
Administration, Net

During February 2000, the Company entered into an agreement
for the sale of up to 197 tower sites owned or to be constructed
for a total purchase price of up to $80.0 million when the
sites are conveyed. Through the end of December 2000, 177
tower sites were successfully conveyed resulting in a net gain
of $26.4 million. As part of the sale agreement the Company
agreed to lease unoccupied space on the towers,

21



---





Depreciation and
Amortization

Depreciation and amortization expense was $2.9 million for
the twelve months ended December 31, 2000 compared to
$3.6 million for the prior year. The decrease is a result
of a reduction in assets due to the Companys tower
portfolio sale.

Interest
Income/Expense

Interest income, net of interest expense, was $1.7 million
for the twelve months ended December 31, 2000 compared to
an expense of $1.8 million for the prior year. The interest
expense in 1999 was largely attributed to borrowings under the
Companys credit facility to finance the construction of
towers. The proceeds from the sale of the towers in 2000
provided sufficient proceeds to repay the Companys credit
facility and provide cash balances that generated interest
income.

Other Expense

Other expense was $0.8 million for the twelve months ended
December 31, 2000 compared to an expense of
$1.4 million for the prior year. The other expense in the
current year is attributable to losses using the equity method
of accounting for the Companys investment in Tecnosistemi
of $0.8 million and to foreign currency losses of
$0.3 million, offset by a one-time gain of
$0.3 million. The loss in 1999 was largely driven by
foreign currency transaction losses of approximately
$1.4 million relative to the Companys Latin America
operations.

Provision (Benefit) for
Income Taxes

The provision for income taxes was $16.5 million for the
twelve months ended December 31, 2000 compared to a benefit
of $2.7 million for the prior year. The provision for
income taxes was recorded for the twelve months ended
December 31, 2000, using an effective income tax rate of
44.5%. The effective income tax rate in excess of the statutory
rate reflects the effect of non-deductible expenses resulting
from the tower portfolio sale. The benefit for income taxes was
recorded in 1999 based on an effective income tax rate of 30.1%.
The change in effective income tax rates is due both to the
impact of the sale of the telecommunication tower portfolio and
to the conversion of the MCI note during the third quarter of
1999.

Net Income (Loss)

Net income was $20.6 million for the twelve months ended
December 31, 2000 compared to a net loss of
$5.4 million for the prior year. The increase in net income
was due to income generated from the sale of the
telecommunications towers conveyed during the year and
additional gross profit generated by increased revenues.

Year Ended December 31, 1999 Compared to Year Ended
December 31, 1998

Revenues

Revenues for the twelve months ended December 31, 1999 were
$75.8 million compared to $87.2 million for the prior
year, a decrease of $11.4 million or 13.1%. The 1999
revenue decline reflects the slowdown in contract awards in late
1998 for new network deployment contracts. The 1998 revenue
remained high as several large contracts were completed from
existing backlog. Engineering and design services revenue
constituted $13.0 million of the revenue decline, with
$10.8 million (83%) of this decline attributable to the
softened market conditions in Asia Pacific and Brazil. The
decline in service revenue was offset by other revenue growth,
included in tower ownership and management revenues, of
$1.6 million.

22



---



Cost of Revenues

Cost of revenues for the twelve months ended December 31,
1999 was $54.3 million compared to $66.8 million for
the prior year, a decrease of $12.5 million or 18.7%. As a
percentage of total revenues, cost of revenues was 71.6% and
76.6% for 1999 and 1998, respectively. The 1998 contract costs
contained a large amount of non-billable expenditures making
cost of revenue as a percent of revenue significantly higher in
1998 than 1999.

Gross Profit

Gross profit for the twelve months ended December 31, 1999
was $21.5 million compared to $20.4 million for the
prior year, an increase of $1.1 million or 5.4%. As a
percentage of total revenues, gross profit was 28.4% and 23.4%
for 1999 and 1998, respectively. Gross profit was significantly
higher in 1999, due to reductions on non-billable expenditures,
including an increase in utilization of professional staff.

Sales and Marketing

Sales and marketing expenses were $5.5 million for the
twelve months ended December 31, 1999 compared to
$3.8 million for the prior year, an increase of
$1.7 million. The increase is due primarily to business
development efforts related to the Companys Europe/ Middle
East/ Africa regional office.

General and
Administrative

General and administrative expenses were $18.1 million for
the twelve months ended December 31, 1999 compared to
$22.0 million for the prior year, a decrease of
$3.9 million or 17.8%. General and administrative
expenditures in 1998 were unusually high, driven by several
large accounting transactions. These 1998 expenditures include a
large increase in the allowance for doubtful accounts of
approximately $2.0 million, largely attributed to the
Companys Asia-Pacific customers and costs associated with
the growth of the Companys tower ownership and management
business, which declined approximately $1.0 million in 1999.

Restructuring Charge

In October 1998, the Companys Board of Directors
approved a restructuring plan that resulted in a total fourth
quarter charge of approximately $2.5 million. The charge
contained $1.3 million relative to the Companys
discontinued operations and $1.2 million relative to
continuing operations.

Depreciation and
Amortization

Depreciation and amortization expense was $3.6 million for
the twelve months ended December 31, 1999 compared to
$2.4 million for the prior year, an increase of
$1.2 million or 50.6%. The increased depreciation is
largely related to the Companys tower ownership and
management business, reflecting the increased number of towers
that were constructed and placed-in-service. The company
completed construction of 169 microcell towers as of
December 31, 1999 compared to 65 as of December 31,
1998.

Interest Expense

Interest expense was $2.2 million for the twelve months
ended December 31, 1999 compared to $2.3 million for
the prior year, a decrease of $0.1 million or 6.1%.
Interest expense was reduced $1.0 million attributable to
MCI Worldcom converting its $50.0 million convertible note
into equity on July 27, 1999. This savings was offset by
increased borrowings under the Companys credit facility
during the twelve months, as well as interest associated with
the $5.0 million convertible promissory note with Telcom
Ventures.

Other Income
(Expense)

Other expense was $1.4 million for the twelve months ended
December 31, 1999 compared to $0.6 million for the
prior year, an increase of $0.8 million. The increase is
due primarily to foreign currency transaction losses of
approximately $1.4 million relative to the Companys
Latin American operations. The

23



---





Benefit for Income
Taxes

The benefit for income taxes was $2.7 million for the
twelve months ended December 31, 1999 compared to a benefit
of $4.6 million for the prior year, a reduction of
$1.9 million. The benefit for income taxes was recorded for
the twelve months ended December 31, 1999 using an
effective tax rate of 30.1%, compared to 39.6% in 1998. The
difference in the effective tax rate reflects both a valuation
reserve for tax benefits related to the losses from foreign
operations and a permanent difference arising from the
deductibility of interest expense from the MCI Worldcom
convertible note. The decreased tax benefit in 1999 is
attributable to the decrease in loss from continuing operations
and the difference in the effective tax rates.

Loss from Continuing
Operations

The loss from continuing operations was $6.2 million for
the twelve months ended December 31, 1999 compared to
$7.0 million for the prior year, a reduction of
$0.8 million. The largest reduction in loss was driven by
the decline of operating expenses of $2.7 million,
primarily general and administrative expenses. Offsetting the
increase in pre-tax earnings was a reduction of tax benefit of
$1.9 million.

Discontinued Operations

In March 1999, the Companys Board of Directors
adopted a plan to discontinue the operations comprising its
products businesses. Included in the assets of discontinued
operations was a loss of $8.9 million on 1999 discontinued
operations revenue of $19.5 million. On October 22,
1999, the Company closed on the sale of the products businesses
for $22.3 million. The gain on disposal in 1999 was
$0.8 million, which was net of the loss from discontinued
operations and includes $1.9 million of certain accounts
receivable to be remitted to the Company upon collection. (see
note 3 to the Consolidated Financial Statements). The
products business had a net loss of $17.8 million in 1998
on revenue of $33.8 million.

Liquidity and Capital Resources

Cash and cash equivalents were $22.3 million at
December 31, 2000 compared to $2.0 million at
December 31, 1999, an increase of $20.3 million. Cash
combined with short-term investments at December 31, 2000
provides total liquid assets of $42.3 million. This
increase in liquidity stems from cash received from the tower
portfolio sale of $72.2 million. The tower proceeds were
largely used to redeem the interests of the minority
shareholders in the tower subsidiary ($7.2 million),
eliminate debt ($4.5 million), invest in affiliates
($3.4 million) and fund operating activities
($16.1 million). Cash used in operating activities was
primarily related to receivable growth as a result of increased
revenue. Based upon an order entered on March 28, 2001 by
the United States Bankruptcy Court, District of Maryland,
Northern Division, the Company currently expects to receive
$5.0 million in cash on or before March 30, 2001, or
as soon as practicable thereafter, from its claim against DCR
PCS, Inc. in connection with the bankruptcy and reorganization
plan for Pocket Communications, Inc. and DCR PCS, Inc. For more
information regarding this claim, please see Recent
Developments on page 9.

Working capital was $59.5 million at December 31, 2000
compared to $(8.0) million at December 31, 1999, an
increase of $67.5 million. The increase in working capital
was primarily due to the proceeds received-to-date from the sale
of the Companys telecommunication tower portfolio. The
Company believes it has sufficient working capital for the next
year.

Foreign Currency

During the two month period ended February 28, 1999, the
Company recognized total foreign currency transaction losses of
approximately $2.1 million related to its Latin American
operations. The majority of the losses were from the
Companys 1998 Brazilian operations as a result of the
devaluation of the Real in 1999.

24



---



Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board
issued SFAS No. 133,Accounting for Derivative
Instruments and Hedging Activities, which is effective for
fiscal years beginning after June 15, 2000. This statement,
as amended, establishes accounting and reporting standards for
derivative instruments and for activities and requires that an
entity recognize all derivatives as either assets or liabilities
in the statement of financial position and measure those
instruments at fair value. The adoption of this new standard
does not have a material impact on its financial position or
results of operations.

25



---



Item 8.  Financial Statements and
Supplementary Data

INDEPENDENT AUDITORS REPORT

The Board of Directors



We have audited the accompanying consolidated balance sheets of
LCC International, Inc. and Subsidiaries (the
Company) as of December 31, 1999 and 2000, and
the related consolidated statements of operations,
shareholders equity, and cash flows for each of the years
in the three-year period ended December 31, 2000. In
connection with our audits of the consolidated financial
statements, we have also audited the related financial statement
schedule. These consolidated financial statements and financial
statement schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of LCC International, Inc. and Subsidiaries as of
December 31, 1999 and 2000, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United
States of America. Also in our opinion, the related financial
statement schedule, when considered in relation to the
consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth
therein.

KPMG LLP

McLean, Virginia



26



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 1998, 1999, 2000


(In thousands, except per share data)


|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |         |  
|------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------- | ---- | ------- | ------- | - | ---- | ------ | ------ | - | - | ------- | ------- | -
|                                                             |                                                                                                                                           | 1998 |         | 1999    |   | 2000
|                                                             |                                                                                                                                           |      |         |         |   |     
|Revenues (note 6):                                           |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Service                                                                                                                                   |      | $       | 86,328  |   |      | $      | 73,289 |   |   | $       | 149,385 |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Tower ownership and management                                                                                                            |      |         | 860     |   |      |        | 2,504  |   |   |         | 1,008   |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Total revenues                                               |                                                                                                                                           |      | 87,188  |         |   |      | 75,793 |        |   |   | 150,393 |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Cost of revenues:                                            |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Service                                                                                                                                   |      |         | 66,238  |   |      |        | 53,080 |   |   |         | 109,952 |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Tower ownership and management                                                                                                            |      |         | 521     |   |      |        | 1,176  |   |   |         | 333     |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Total cost of revenues                                       |                                                                                                                                           |      | 66,759  |         |   |      | 54,256 |        |   |   | 110,285 |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Gross profit                                                 |                                                                                                                                           |      | 20,429  |         |   |      | 21,537 |        |   |   | 40,108  |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Operating expenses:                                          |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Sales and marketing                                                                                                                       |      |         | 3,843   |   |      |        | 5,464  |   |   |         | 7,833   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | General and administrative                                                                                                                |      |         | 22,063  |   |      |        | 18,128 |   |   |         | 19,673  |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Restructuring charge (note 8)                                                                                                             |      |         | 1,256   |   |      |        |       |   |   |         | (108    | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Non-cash compensation (note 14)                                                                                                           |      |         | 362     |   |      |        | (12    | ) |   |         |        |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Gain on sale of tower portfolio and administration, net
	(note 4)                                                                         |      |         |        |   |      |        |       |   |   |         | (26,437 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Depreciation and amortization                                                                                                             |      |         | 2,409   |   |      |        | 3,628  |   |   |         | 2,899   |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Total operating expenses                                     |                                                                                                                                           |      | 29,933  |         |   |      | 27,208 |        |   |   | 3,860   |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Operating income (loss)                                      |                                                                                                                                           |      | (9,504  | )       |   |      | (5,671 | )      |   |   | 36,248  |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Other income (expense):                                      |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Interest income                                                                                                                           |      |         | 898     |   |      |        | 327    |   |   |         | 1,951   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Interest expense                                                                                                                          |      |         | (2,295  | ) |      |        | (2,154 | ) |   |         | (263    | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Other                                                                                                                                     |      |         | (618    | ) |      |        | (1,391 | ) |   |         | (787    | )
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Total other income (expense)                                 |                                                                                                                                           |      | (2,015  | )       |   |      | (3,218 | )      |   |   | 901     |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Income (loss) from continuing operations before income taxes |                                                                                                                                           |      | (11,519 | )       |   |      | (8,889 | )      |   |   | 37,149  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Provision (benefit) for income taxes (note 10)               |                                                                                                                                           |      | (4,561  | )       |   |      | (2,677 | )      |   |   | 16,531  |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Income (loss) from continuing operations                     |                                                                                                                                           |      | (6,958  | )       |   |      | (6,212 | )      |   |   | 20,618  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Discontinued operations (note 3):                            |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Loss from discontinued operations net of tax benefits                                                                                     |      |         | (17,785 | ) |      |        |       |   |   |         |        |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Gain on disposal of discontinued operations, including operating
	losses during phase out period of $8,866 (net of tax benefits of
	$346) |      |         |        |   |      |        | 803    |   |   |         |        |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Net income (loss)                                            |                                                                                                                                           | $    | (24,743 | )       |   | $    | (5,409 | )      |   | $ | 20,618  |        
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Net income (loss) per share:                                 |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Continuing operations                                        |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic                                                                                                                                     |      | $       | (0.45   | ) |      | $      | (0.36  | ) |   | $       | 1.01    |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                             | Diluted                                                                                                                                   |      | $       | (0.45   | ) |      | $      | (0.36  | ) |   | $       | 0.93    |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Discontinued operations                                      |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic                                                                                                                                     |      | $       | (1.15   | ) |      | $      | 0.05   |   |   |         |        |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                             | Diluted                                                                                                                                   |      | $       | (1.15   | ) |      | $      | 0.05   |   |   |         |        |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|Net income (loss) per share:                                 |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic                                                                                                                                     |      | $       | (1.60   | ) |      | $      | (0.31  | ) |   | $       | 1.01    |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        
|                                                             | Diluted                                                                                                                                   |      | $       | (1.60   | ) |      | $      | (0.31  | ) |   | $       | 0.93    |  
|                                                             |                                                                                                                                           |      |         |         |   |      |        |        |   |   |         |        

The accompanying notes are an integral part of the Consolidated
Financial Statements.

27



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)


|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |         |        |        | 
|-------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ----- | ------ | ------- | ------- | ------ | ------ | 
|                                                                                 |                                                                                                                                                  |                                                                                                                                
|                                                                                 |                                                                                                                                                  | December 31,                                                                                                                   
|                                                                                 |                                                                                                                                                  |                                                                                                                                
|                                                                                 |                                                                                                                                                  | 1999                                                                                                                            |                            | 2000   
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |        
|ASSETS:                                                                          |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Current assets:                                                                  |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Cash and cash equivalents (note 5)                                                                                                               |                                                                                                                                 | $                          | 1,951   |       |        | $       | 22,271  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Short-term investments (note 2)                                                                                                                  |                                                                                                                                 |                            | 86      |       |        |         | 20,064  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Receivables, net of allowance for doubtful accounts of $7,860
	and $1,829 at December 31, 1999 and 2000, respectively
	Trade accounts receivable |                                                                                                                                 |                            | 15,052  |       |        |         | 31,306  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                                                  | Due from related parties and affiliates (note 6)                                                                                |                            |         | 836   |        |         |         | 746    |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                                                  | Unbilled receivables                                                                                                            |                            |         | 5,187 |        |         |         | 17,050 |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Deferred income taxes, net (note 10)                                                                                                             |                                                                                                                                 |                            | 5,083   |       |        |         | 1,850   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Prepaid expenses and other current assets                                                                                                        |                                                                                                                                 |                            | 3,202   |       |        |         | 1,858   |       
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 | Total current assets       |         |       | 31,397 |         |         |        | 95,145 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Property and equipment, net (note 7)                                             |                                                                                                                                                  |                                                                                                                                 | 37,762                     |         |       |        | 5,638   |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Investments (note 9)                                                             |                                                                                                                                                  |                                                                                                                                 | 1,095                      |         |       |        | 3,650   |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Deferred income taxes, net (note 10)                                             |                                                                                                                                                  |                                                                                                                                 | 11,562                     |         |       |        | 5,066   |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other assets                                                                     |                                                                                                                                                  |                                                                                                                                 | 1,052                      |         |       |        | 546     |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                 |                                                                                                                                                  | $                                                                                                                               | 82,868                     |         |       | $      | 110,045 |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|LIABILITIES AND SHAREHOLDERS EQUITY:                                            |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Current liabilities:                                                             |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Line of credit                                                                                                                                   |                                                                                                                                 | $                          | 4,535   |       |        | $       |        |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accounts payable                                                                                                                                 |                                                                                                                                 |                            | 4,565   |       |        |         | 5,926   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accrued expenses                                                                                                                                 |                                                                                                                                 |                            | 7,567   |       |        |         | 10,465  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accrued employee compensation and benefits                                                                                                       |                                                                                                                                 |                            | 13,516  |       |        |         | 12,420  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Deferred revenue                                                                                                                                 |                                                                                                                                 |                            | 780     |       |        |         | 332     |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Income taxes payable (note 10)                                                                                                                   |                                                                                                                                 |                            | 5,844   |       |        |         | 5,725   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Other current liabilities (note 8)                                                                                                               |                                                                                                                                 |                            | 2,629   |       |        |         | 817     |       
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 | Total current liabilities  |         |       | 39,436 |         |         |        | 35,685 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other liabilities                                                                |                                                                                                                                                  |                                                                                                                                 | 1,006                      |         |       |        | 5,944   |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 | Total liabilities          |         |       | 40,442 |         |         |        | 41,629 | 
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|Commitments and contingencies (notes 1, 4, 14, 15 and 16)
	Shareholders Equity: |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Preferred Stock:                                                                                                                                 |                                                                                                                                 |                            |         |       |        |         |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                                                  | 10,000 shares authorized; -0- shares issued and outstanding                                                                     |                            |         |      |        |         |         |       |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Class A common stock; $.01 par value:                                                                                                            |                                                                                                                                 |                            |         |       |        |         |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                                                  | 70,000 shares authorized; 11,630 shares and
	12,040  shares issued and outstanding at December 31,
	1999 and 2000, respectively |                            |         | 116   |        |         |         | 120    |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Class B common stock; $.01 par value:                                                                                                            |                                                                                                                                 |                            |         |       |        |         |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                                                  | 20,000 shares authorized; 8,461 shares and 8,450 
	shares issued and outstanding at December 31, 1999 and
	2000, respectively   |                            |         | 85    |        |         |         | 85     |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Paid-in capital                                                                                                                                  |                                                                                                                                 |                            | 85,846  |       |        |         | 91,407  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accumulated deficit                                                                                                                              |                                                                                                                                 |                            | (38,999 | )     |        |         | (18,381 | )     
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Notes receivable from shareholders (note 6)                                                                                                      |                                                                                                                                 |                            | (3,025  | )     |        |         | (2,325  | )     
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 | Subtotal                   |         |       | 44,023 |         |         |        | 70,906 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Accumulated other comprehensive loss  foreign
	currency translation adjustments |                                                                                                                                                  |                                                                                                                                 | (1,597                     | )       |       |        | (2,490  | )      
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 | Total shareholders equity |         |       | 42,426 |         |         |        | 68,416 | 
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        
|                                                                                 |                                                                                                                                                  | $                                                                                                                               | 82,868                     |         |       | $      | 110,045 |        
|                                                                                 |                                                                                                                                                  |                                                                                                                                 |                            |         |       |        |         |        

The accompanying notes are an integral part of the Consolidated
Financial Statements.

28



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

Years ended December 31, 1998, 1999 and 2000


(In thousands)


|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|---------------------------------------------------------------------- |  | --------- | - | ------------ |  | ------- | --- | ------------- |  | ----------- | -- | ------------ |  | -------- | ------ |  |  | - | ------- | - |  | - | ------- | - |  | - | ------ | -
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  | Notes   
|                                                                       |  |           |   |              |  |         |     |               |  |             |    | Receivable  
|                                                                       |  |           |   | Common Stock |  |         |     | Comprehensive |  |             |    | from        
|                                                                       |  | Preferred |   |              |  | Paid-in |     | Income        |  | Accumulated |    | Shareholders
|                                                                       |  | Stock     |   | Class A      |  | Class B |     | Capital       |  | (Loss)      |    | Deficit      |  | (note 6)
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |         
|Balances at December 31, 1997                                          |  |           |  |              |  | $       | 66  |               |  | $           | 85 |              |  | $        | 33,210 |  |  |   |         |   |  | $ | (8,847  | ) |  | $ | (2,800 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |           |  |              |  |         |    |               |  |             |   |              |  |          | 209    |  |  |   |         |   |  |   |        |   |  |   | 700    |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of
	stock options                                    |  |           |  |              |  |         | 4   |               |  |             |   |              |  |          | 3,012  |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |           |  |              |  |         | 2   |               |  |             |   |              |  |          | 699    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net loss                                                               |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  | $ | (24,743 | ) |  |   | (24,743 | ) |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive income  foreign currency
	translation adjustments |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  |   | 144     |   |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Comprehensive loss                                                     |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  | $ | (24,599 | ) |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Balances at December 31, 1998                                          |  |           |  |              |  |         | 72  |               |  |             | 85 |              |  |          | 37,130 |  |  |   |         |   |  |   | (33,590 | ) |  |   | (2,100 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |           |  |              |  |         |    |               |  |             |   |              |  |          | 164    |  |  |   |         |   |  |   |        |   |  |   | 700    |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Loan to shareholder                                                    |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  |   |         |   |  |   |        |   |  |   | (1,625 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Conversion of debt                                                     |  |           |  |              |  |         | 37  |               |  |             |   |              |  |          | 46,484 |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of
	stock options                                    |  |           |  |              |  |         | 7   |               |  |             |   |              |  |          | 1,833  |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |           |  |              |  |         |    |               |  |             |   |              |  |          | 235    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net loss                                                               |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  | $ | (5,409  | ) |  |   | (5,409  | ) |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive loss  foreign currency
	translation adjustments   |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  |   | (229    | ) |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Comprehensive loss                                                     |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  | $ | (5,638  | ) |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Balances at December 31, 1999                                          |  |           |  |              |  |         | 116 |               |  |             | 85 |              |  |          | 85,846 |  |  |   |         |   |  |   | (38,999 | ) |  |   | (3,025 | )
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Payment from shareholder                                               |  |           |  |              |  |         |    |               |  |             |   |              |  |          | 100    |  |  |   |         |   |  |   |        |   |  |   | 700    |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of
	stock options                                    |  |           |  |              |  |         | 4   |               |  |             |   |              |  |          | 4,868  |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |           |  |              |  |         |    |               |  |             |   |              |  |          | 593    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net income                                                             |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  | $ | 20,618  |   |  |   | 20,618  |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive loss  foreign currency
	translation adjustments   |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  |   | (893    | ) |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Comprehensive income                                                   |  |           |  |              |  |         |    |               |  |             |   |              |  |          |       |  |  | $ | 19,725  |   |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Balances at December 31, 2000                                          |  |           |  |              |  | $       | 120 |               |  | $           | 85 |              |  | $        | 91,407 |  |  |   |         |   |  | $ | (18,381 | ) |  | $ | (2,325 | )
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |              |  |          |        |  |  |   |         |   |  |   |         |   |  |   |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                       |  |               |        |       |  |   |         |  
|---------------------------------------------------------------------- |  | ------------- | ------ | ----- |  | - | ------- | -
|                                                                       |  | Accumulated   |        |      
|                                                                       |  | Other         |        |      
|                                                                       |  | Comprehensive |        |      
|                                                                       |  | Income        |        |      
|                                                                       |  | (Loss)        |        | Total
|                                                                       |  |               |        |      
|Balances at December 31, 1997                                          |  | $             | (1,512 | )     |  | $ | 20,202  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |               |       |       |  |   | 909     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of
	stock options                                    |  |               |       |       |  |   | 3,016   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |               |       |       |  |   | 701     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net loss                                                               |  |               |       |       |  |   | (24,743 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive income  foreign currency
	translation adjustments |  |               | 144    |       |  |   | 144     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Comprehensive loss                                                     |  |               |       |       |  |   |        |  
|                                                                       |  |               |        |       |  |   |         |  
|Balances at December 31, 1998                                          |  |               | (1,368 | )     |  |   | 229     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |               |       |       |  |   | 864     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Loan to shareholder                                                    |  |               |       |       |  |   | (1,625  | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Conversion of debt                                                     |  |               |       |       |  |   | 46,521  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of
	stock options                                    |  |               |       |       |  |   | 1,840   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |               |       |       |  |   | 235     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net loss                                                               |  |               |       |       |  |   | (5,409  | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive loss  foreign currency
	translation adjustments   |  |               | (229   | )     |  |   | (229    | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Comprehensive loss                                                     |  |               |       |       |  |   |        |  
|                                                                       |  |               |        |       |  |   |         |  
|Balances at December 31, 1999                                          |  |               | (1,597 | )     |  |   | 42,426  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |               |       |       |  |   | 800     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of
	stock options                                    |  |               |       |       |  |   | 4,872   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |               |       |       |  |   | 593     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net income                                                             |  |               |       |       |  |   | 20,618  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive loss  foreign currency
	translation adjustments   |  |               | (893   | )     |  |   | (893    | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Comprehensive income                                                   |  |               |       |       |  |   |        |  
|                                                                       |  |               |        |       |  |   |         |  
|Balances at December 31, 2000                                          |  | $             | (2,490 | )     |  | $ | 68,416  |  
|                                                                       |  |               |        |       |  |   |         |  

The accompanying notes are an integral part of the Consolidated
Financial Statements.

29



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 1998, 1999, and 2000


(In thousands)


|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |         |         |  
|------------------------------------------------------------------------------------------------------------ | --------------------------------------------------- | --------------------------------------- | ------- | ------- | ------- | ---- | ------- | ------- | ------ | - | ------- | ------- | ------- | -
|                                                                                                             |                                                     | 1998                                    |         | 1999    |         | 2000
|                                                                                                             |                                                     |                                         |         |         |         |     
|Cash flows from operating activities:                                                                        |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Income (loss) from continuing operations                                                                     |                                                     | $                                       | (6,958  | )       |         | $    | (6,212  | )       |        | $ | 20,618  |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Adjustments to reconcile income (loss) from continuing
	operations to net cash used in operating activities: |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Depreciation and amortization                       |                                         |         | 2,409   |         |      |         | 3,628   |        |   |         | 2,899   |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Provision (recovery) for doubtful accounts          |                                         |         | 2,047   |         |      |         |        |        |   |         | (306    | )      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Non-cash compensation                               |                                         |         | 362     |         |      |         | (12     | )      |   |         |        |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Loss from investments in joint ventures, net        |                                         |         | 267     |         |      |         |        |        |   |         | 796     |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Gain on sale of discontinued operations             |                                         |         |        |         |      |         | 803     |        |   |         |        |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Gain on sale of tower portfolio                     |                                         |         |        |         |      |         |        |        |   |         | (26,437 | )      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Changes in operating assets and liabilities:        |                                         |         |         |         |      |         |         |        |   |         |         |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             |                                                     | Trade, unbilled, and other receivables  |         |         | (869    | )    |         |         | (1,527 | ) |         |         | (28,275 | )
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             |                                                     | Accounts payable and accrued expenses   |         |         | 7,426   |      |         |         | 3,396  |   |         |         | 2,593   |  
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             |                                                     | Other current assets and liabilities    |         |         | (2,780  | )    |         |         | 5,395  |   |         |         | 7,165   |  
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             |                                                     | Other noncurrent assets and liabilities |         |         | (10,796 | )    |         |         | (9,639 | ) |         |         | 4,828   |  
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Net cash used in operating activities                                                                        |                                                     |                                         | (8,892  | )       |         |      | (4,168  | )       |        |   | (16,119 | )      
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Cash flows from investing activities:                                                                        |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Proceeds from sales of investment securities        |                                         |         | 8,506   |         |      |         | 27      |        |   |         | 31,282  |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Purchases of investment securities                  |                                         |         |        |         |      |         |        |        |   |         | (51,260 | )      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Purchases of property and equipment                 |                                         |         | (16,735 | )       |      |         | (17,100 | )      |   |         | (3,870  | )      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Proceeds from sale of property and equipment        |                                         |         |        |         |      |         |        |        |   |         | 209     |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Investments                                         |                                         |         | 289     |         |      |         | (1,100  | )      |   |         | (3,386  | )      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Purchase of minority interest                       |                                         |         |        |         |      |         |        |        |   |         | (7,174  | )      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Proceeds from tower portfolio sale, net of expenses |                                         |         |        |         |      |         |        |        |   |         | 72,176  |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Disposal of discontinued operations, net            |                                         |         |        |         |      |         | 8,164   |        |   |         |        |        
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Net cash provided by (used in) investing activities                                                          |                                                     |                                         | (7,940  | )       |         |      | (10,009 | )       |        |   | 37,977  |        
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Cash flows from financing activities:                                                                        |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Proceeds from issuance of common stock, net         |                                         |         | 701     |         |      |         | 235     |        |   |         | 593     |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Proceeds from exercise of options                   |                                         |         | 2,655   |         |      |         | 4,006   |        |   |         | 1,604   |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Proceeds from line of credit/note                   |                                         |         |        |         |      |         | 32,961  |        |   |         | 9,700   |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Payments on line of credit/note                     |                                         |         |        |         |      |         | (23,426 | )      |   |         | (14,235 | )      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Repayment of loan to shareholder                    |                                         |         | 909     |         |      |         | 864     |        |   |         | 800     |        
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Net cash provided by (used in) financing activities                                                          |                                                     |                                         | 4,265   |         |         |      | 14,640  |         |        |   | (1,538  | )      
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Net increase (decrease) in cash and cash
	equivalents  continuing operations                                |                                                     |                                         | (12,567 | )       |         |      | 463     |         |        |   | 20,320  |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Net (decrease) increase in cash and cash
	equivalents  discontinued operations                              |                                                     |                                         | 1,929   |         |         |      | (2,752  | )       |        |   |        |        
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Net increase (decrease) in cash and cash equivalents                                                         |                                                     |                                         | (10,638 | )       |         |      | (2,289  | )       |        |   | 20,320  |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Cash and cash equivalents at beginning of period                                                             |                                                     |                                         | 14,878  |         |         |      | 4,240   |         |        |   | 1,951   |        
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Cash and cash equivalents at end of period                                                                   |                                                     | $                                       | 4,240   |         |         | $    | 1,951   |         |        | $ | 22,271  |        
|                                                                                                             |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|Supplemental disclosures of cash flow information:                                                           |                                                     |                                         |         |         |         |      |         |         |        |   |         |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             | Cash paid during the year for:                      |                                         |         |         |         |      |         |         |        |   |         |         |        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             |                                                     | Interest                                |         | $       | 2,250   |      |         | $       | 2,154  |   |         | $       | 148     |  
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                             |                                                     | Income taxes                            |         |         | 1,995   |      |         |         | 3,540  |   |         |         | 2,781   |  

Supplemental disclosures of non-cash investing
and financing activities:

In July 1999, the Company issued
approximately 2.8 million shares of Class A Common
Stock to MCI/ Worldcom in exchange for its 4.4% convertible
subordinated notes. As a result, both long-term debt and
long-term deferred tax assets were reduced by $50.0 million
and $12.6 million, respectively, and shareholders
equity increased $37.4 million.

In August 1999, the Company issued
approximately 0.9 million shares of Class A Common
Stock to Telcom Ventures in exchange for its 9.0% convertible
notes payable. As a result, current debt was reduced by
$5.0 million, accrued interest was reduced by
$0.2 million, and shareholders equity increased
$5.2 million.

In December 1999, the Company issued
approximately 0.108 million shares of Class A Common
Stock in exchange for a $1.625 million note receivable from
the Companys President and Chief Executive Officer. As a
result, common stock and paid-in capital increased, offset by an
increase in notes receivable from shareholders.

The accompanying notes are an integral part of the Consolidated
Financial Statements.

30



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 1998, 1999 and 2000


(1)  Description of Operations

The Company provides integrated end-to-end solutions for
wireless voice and data communications networks with offerings
ranging from high level technical consulting, system design and
deployment and ongoing management and optimization services.
Telcom Ventures owns the Class B Common Stock shares
outstanding, which has preferential voting rights over the
Class A Common Stock shares outstanding ten-to-one
representing approximately 88% of voting control. Since its
inception in 1983, the Company has delivered wireless network
solutions to more than 200 customers in over 50 countries.

The Company operates in a highly competitive environment subject
to rapid technological change and emergence of new technologies.
Historically, the key drivers of growth in the Companys
wireless services business have been (1) the issuance of
new or additional licenses to wireless operators; (2) the
introduction of new services or technologies; (3) increases
in the number of subscribers served by wireless operators; and
(4) the increasing complexity of wireless systems in
operation. Although the Company believes that its services are
transferable to emerging technologies, rapid changes in
technology could have an adverse financial impact on the Company.

(2)  Summary of Significant Accounting Policies

Principles of
Consolidation

The accompanying consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant
intercompany transactions and balances have been eliminated in
consolidation.

Cash Equivalents

Cash equivalents include all highly liquid investments purchased
with original maturities of three months or less.

Short-Term
Investments

Short-term investments consist primarily of municipal bonds with
maturity dates of more than three months from the date of
acquisition. The portfolio of municipal bonds held by the
Company has been classified based on managements
intentions as to future investment activity. Such investments
are not intended to be held to maturity and are classified as
available for sale and carried at market value with
temporary unrealized gains (losses) charged directly to
shareholders equity. At December 31, 1999 and 2000,
the market value of the municipal bonds held by the Company
approximated its cost. Other short-term investments are carried
at cost plus accrued interest, which approximates their market
value. All short-term investments have maturity dates of one
year or less.

Concentration of Credit
Risk

Financial instruments that potentially expose the Company to
concentration of credit risk consist primarily of trade
receivables. The Company sells its services globally. Generally,
the Company does not require collateral or other security to
support customer receivables. The Company performs ongoing
credit evaluations of its customers financial condition
and maintains reserves for potential credit losses. The

31



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Company had the following significant concentrations of trade
receivables from customers located outside the United States at
December 31, 1999 and 2000:

|                   |  |                |       |      |  |   |       | 
|------------------ |  | -------------- | ----- | ---- |  | - | ----- | 
|                   |  | 1999           |       | 2000
|                   |  |                |       |     
|                   |  |               
|                   |  | (In thousands)
|                  
|                  
|                  
|                  
|Latin America      |  | $              | 1,086 |      |  | $ | 671   | 
|                  
|                  
|                  
|                  
|North America      |  |                |      |      |  |   | 63    | 
|                  
|                  
|                  
|                  
|Europe             |  |                | 5,412 |      |  |   | 4,894 | 
|                  
|                  
|                  
|                  
|Middle East/Africa |  |                | 2,245 |      |  |   | 7,775 | 
|                  
|                  
|                  
|                  
|Asia-Pacific       |  |                | 583   |      |  |   | 577   | 

The Companys existing and potential customer base is
diverse and includes start-up companies and foreign enterprises.
The Company derived approximately 66% and 81% of its revenues
from its ten largest customers for the years ended
December 31, 1999 and 2000, respectively. Although the
Company believes that the diversity of its customer base has
historically minimized the risk of incurring material losses due
to concentrations of credit risk, it may be exposed to a
declining customer base in periods of market downturns, severe
competition, exchange rate fluctuations or other international
developments (see note 18).

Revenues from two customers were approximately $15.0 million or
17.2% and $13.9 million or 15.9%, of total revenues for 1998.
Revenues generated from another customer were approximately
$8.5 million or 11.2% of 1999 revenues. Revenues from
another customer were approximately $10.3 million and
$58.4 million, or 13.6% and 38.8% of total revenues for
1999 and 2000, respectively. Revenues from two other customers
were approximately $19.0 million or 12.6% and $15.3 million
or 10.2% of total revenues for 2000.

Property and
Equipment

Property and equipment are stated at cost, less an allowance for
depreciation. Replacements and major improvements are
capitalized; maintenance and repairs are charged to expense as
incurred.

Depreciation is calculated using the straight-line method over
the estimated useful lives of the related assets. Furniture and
equipment are depreciated over useful lives, which range from
eighteen months to seven years. The costs of leasehold
improvements are capitalized and amortized using the
straight-line method over the shorter of their estimated useful
lives or the terms of the respective leases.

Recovery of Long-Lived
Assets

The Companys policy is to review its long-lived assets for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The
Company recognizes an impairment loss when the sum of the
expected undiscounted future cash flows is less than the
carrying amount of the asset. The measurement of the impairment
losses to be recognized is based upon the difference between the
fair value and the carrying amount of the assets.

Investments in Joint
Ventures

The Company uses the equity method of accounting for its
investments in, advances to and equity in the earnings and
losses of its joint ventures.

Revenue Recognition

The Companys principal sources of revenues are design
services and system deployment services, and, prior to the sale
of its tower business, tower lease revenues (see note 4).
The Company recognizes revenues from long-term fixed price
contracts using the percentage-of-completion method; based on
individual contract costs incurred to date compared with total
estimated contract costs. Anticipated contract losses are
recognized

32



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

as soon as they become known and estimable. The Company also
recognizes revenues on time and materials contracts as the
services are performed. Lease revenues from the tower business
are recognized over the term of the related lease. Revenues
earned but not yet billed are reflected as unbilled receivables
in the accompanying consolidated balance sheets. The Company
expects substantially all unbilled and billed receivables to be
collected within one year.

Income Taxes

Income taxes are determined in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109.
Under this statement, temporary differences arise as a result of
the differences between the reported amounts of assets and
liabilities and their tax basis. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it
is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.

Certain of the Companys international operations are
subject to local income taxation. Currently, the Company is
subject to taxation on income from certain operations in Europe,
Latin America, the Far East, the Middle East and the
non-U.S. portions of North America where the Company has
subsidiaries, has established branch offices or has performed
significant services that constitute a permanent
establishment for tax reporting purposes. Foreign taxes
account for a significant portion of the provision for income
taxes as reflected in the Companys consolidated statements
of operations (see note 10). The foreign taxes paid or
accrued by the Company represent a potential credit for the
Company against its Federal income taxes.

Foreign Currency
Translation

Gains and losses on translation of the accounts of the
Companys foreign operations where the local currency is
the functional currency are accumulated and included in other
comprehensive loss within the accompanying consolidated
statement of shareholders equity. Foreign currency
transaction gains and losses are recognized currently in the
consolidated statements of operations.

Pervasiveness of
Estimates

The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the
United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Stock-Based
Compensation

The Company accounts for equity-based compensation arrangements
in accordance with the provisions of Accounting Principles Board
(APB) Opinion No. 25,Accounting for
Stock Issued to Employees, and related
interpretations, and complies with the disclosure provisions of
Statement of Financial Accounting Standards (SFAS)
No. 123,Accounting for Stock-Based
Compensation. Under APB No. 25, compensation
expense is based upon the difference, if any, on the date of
grant, between the fair value of the Companys stock and
the exercise price. All equity-based awards to non-employees are
accounted for at their fair value in accordance with SFAS
No. 123.

Other Comprehensive Income
(Loss)

Comprehensive income is defined as net income plus the changes
in equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner
sources. Other comprehensive

33



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

income refers to revenues, expenses, gains and losses that under
generally accepted accounting principles are included in
comprehensive income, but excluded from net income. Other
comprehensive income (loss) consists solely of foreign currency
translation adjustments in 1998, 1999 and 2000. Changes in
components of other comprehensive income (loss) are
reported net of income tax, as follows (in thousands).

|                                         |  |        |     |          |  |        |    |        |  |          |     |        |  |        |      |          |  |        |     |   |  |   |      |   |  |   |        |   |  |   |      |   |  |   |      |  
|---------------------------------------- |  | ------ | --- | -------- |  | ------ | -- | ------ |  | -------- | --- | ------ |  | ------ | ---- | -------- |  | ------ | --- | - |  | - | ---- | - |  | - | ------ | - |  | - | ---- | - |  | - | ---- | -
|                                         |  |        |     |          |  |       
|                                         |  | 1998   |     | 1999     |  | 2000  
|                                         |  |        |     |          |  |       
|                                         |  |        |     | Tax      |  |        |    |        |  | Tax      |     |        |  |        |      | Tax      |  |       
|                                         |  | Pretax |     | Expense  |  | Net    |    | Pretax |  | Expense  |     | Net    |  | Pretax |      | Expense  |  | Net   
|                                         |  | Amount |     | (Credit) |  | Amount |    | Amount |  | (Credit) |     | Amount |  | Amount |      | (Credit) |  | Amount
|                                         |  |        |     |          |  |        |    |        |  |          |     |        |  |        |      |          |  |       
|Foreign currency translation adjustments |  | $      | 222 |          |  | $      | 78 |        |  | $        | 144 |        |  | $      | (327 | )        |  | $      | (98 | ) |  | $ | (229 | ) |  | $ | (1,609 | ) |  | $ | (716 | ) |  | $ | (893 | )
|                                         |  |        |     |          |  |        |    |        |  |          |     |        |  |        |      |          |  |        |     |   |  |   |      |   |  |   |        |   |  |   |      |   |  |   |      |  

(3)  Discontinued Operations

In March 1999, the Companys Board of Directors
adopted a plan to discontinue the operations comprising its
software and hardware products segments. On October 22,
1999, the Company sold its products businesses, which consist of
the design, development, manufacture, marketing, sale and
servicing of field testing and measurement products (and related
software) and network planning software for the wireless
communications industry (the Products Businesses),
to Ericsson Radio Systems AB, a Swedish corporation, and certain
of its affiliates (Ericsson), pursuant to an Asset
Purchase Agreement, dated as of August 25, 1999.

Pursuant to the Asset Purchase Agreement, the company
transferred substantially all of the assets of the Products
Businesses for a purchase price of approximately
$22.3 million, which included an estimate of approximately
$1.9 million for the collection of certain accounts
receivable of the Products Businesses sold to Ericsson. In
addition, Ericsson assumed certain of the liabilities of the
Products Businesses, including, among others, certain
liabilities arising with respect to the Products Businesses in
the ordinary course of business consistent with past practice
and certain liabilities arising under assumed contracts. As part
of the transaction, the Company entered into product supply
agreements and a software license and related support agreement
with Ericsson pursuant to which the Company will purchase or
license certain of the products which were sold to Ericsson.

Revenues from the Products Businesses were approximately
$64.0 million for the year ended December 31, 1998 and
approximately $19.5 million for the period from
January 1, 1999 to October 22, 1999. Net loss was
approximately $17.8 million for the year ended
December 31, 1998. The gain on disposal in 1999 was
approximately $0.8 million, net of losses during the phase
out period of approximately $8.9 million, and tax expense
of approximately $0.3 million and includes
$1.9 million of receivables to be remitted to the Company
upon collection.

(4)  Tower Portfolio Sale and Administration

During March 2000, Microcell Management, Inc.
(Microcell), a subsidiary of the Company, completed
the initial closing of the sale of its telecommunication tower
portfolio to Pinnacle Towers Inc. (Pinnacle)
pursuant to an Asset Purchase Agreement between Pinnacle and
Microcell. Pursuant to the Asset Purchase Agreement, Microcell
agreed to sell up to 197 tower sites owned or to be constructed
by Microcell for a total purchase price of up to
$80 million in cash payable as the sites are conveyed to
Pinnacle. As of December 31, 2000, 177 tower sites were
conveyed to Pinnacle for net proceeds of $72.2 million.
While some portion of the remaining towers may convey in the
future, the Company believes substantially all of the towers
that will convey have been conveyed to Pinnacle. As a part of
the sale transaction, Microcell and Pinnacle entered into a
Master Antenna Site Lease pursuant to which Microcell has agreed
to lease, until December 31, 2002, the unoccupied space on
each telecommunication tower sold to Pinnacle. The Company has
recognized $26.4 million of the gain as of December 31,
2000 and deferred $5.0 million of the gain which

34



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

relates to the maximum lease obligations under the Master
Antenna Site Lease as of December 31, 2000. These amounts
are included in other long-term liabilities. Microcell and
Pinnacle have also entered into a Tower Services Agreement
pursuant to which Microcell will provide Pinnacle with audit,
maintenance, and program management services regarding site
improvements and capacity upgrades for an initial 204 sites and
additional sites that may be added by mutual agreement. The
Services Agreement provides for minimum annual payments to
Microcell of $10 million for project management and audit
services; it also provides for approximately $1.0 million
per year for maintenance services based on the current number of
sites as to which Microcell has been engaged. In each case, the
pricing and scope of services are subject to annual review and
re-negotiation on or around June 1 of each year.

On February 15, 2000, Microcell and the Company entered
into a Settlement and Release Agreement (Settlement
Agreement) with the minority shareholders of Microcell.
Pursuant to the Settlement Agreement, concurrent with the
Pinnacle tower sale, the aggregate 16.25% minority shareholder
interests were redeemed and other costs paid and/or reimbursed
for $7.2 million. The payment was capitalized as part of
the cost of acquiring the Microcell assets and will be expensed
as sites are conveyed to Pinnacle. As part of the settlement,
all pending claims of the minority shareholders were settled and
dismissed with prejudice.

(5)  Cash and Cash Equivalents

At December 31, 1999 and 2000, cash and cash equivalents
consisted of the following (in thousands):

|                                |  |      |       |      |  |   |        | 
|------------------------------- |  | ---- | ----- | ---- |  | - | ------ | 
|                                |  | 1999 |       | 2000
|                                |  |      |       |     
|Cash in banks                   |  | $    | 1,644 |      |  | $ | 8,652  | 
|                               
|                               
|                               
|                               
|Overnight repurchase agreements |  |      | 307   |      |  |   | 6,715  | 
|                               
|                               
|                               
|                               
|Short-term commercial paper     |  |      |      |      |  |   | 6,904  | 
|                                |  |      |       |      |  |   |        | 
|                                |  | $    | 1,951 |      |  | $ | 22,271 | 
|                                |  |      |       |      |  |   |        | 

The fair value of overnight repurchase agreements, short-term
commercial paper and short-term money market funds approximate
their carrying value.

(6)  Related Party Transactions

During 1998, 1999, and 2000, the Company provided services to
Telcom Ventures and various other companies owned, in part, by
Telcom Ventures or its members. Revenues earned during 1998,
1999 and 2000 for services provided to these customers were
approximately $0.8 million, $1.6 million, and
$1.9 million, respectively. Receivables from these related
parties were $299,000 and $178,000 at December 31, 1999 and
2000, respectively, and are included in due from related parties
and affiliates in the accompanying consolidated balance sheets.
Also included in due from related parties and affiliates are
unbilled receivables and advances to employees aggregating
approximately $291,000 and $304,000 at December 31, 1999
and 2000, respectively.

During 1999 and 2000, the Company made certain payments on
behalf of Telcom Ventures which consisted primarily of fringe
benefit payments. At December 31, 1999 and 2000,
outstanding amounts associated with these payments, totaling
$246,000 and $264,000, respectively, are included in due from
related parties and affiliates within the accompanying
consolidated balance sheets.

In September 1996, the Company lent $3.5 million to
Telcom Ventures to assist in the payment of taxes due in
connection with the assumption by the Company of
$30.0 million of convertible subordinated debt from Telcom
Ventures (see note 12). The note is payable over five years
with equal annual principal payments over the term. Interest
accrues at the rate of LIBOR, plus 1.75% and is payable
annually. In October 1998, the Company received a payment
of approximately $1.0 million from Telcom Ventures
representing payment of $0.7 million principal and
approximately $0.3 million interest under the terms of the
note. In November 1999,

35



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

$0.7 million of principal and approximately
$0.2 million of interest were offset against the
Companys $1.1 million promissory note with Telcom
Ventures (see below). In September 2000, the Company
received a payment of approximately $0.8 million
representing payment of $0.7 million principal and
approximately $0.1 million of interest. The note is
reflected as a reduction of shareholders equity in the
accompanying statement of shareholders equity.

In January 1999, the Company entered into a
$5.0 million convertible promissory note with Telcom
Ventures. Under the terms of the note, anytime after
August 1, 1999, the entire principal balance and accrued
interest thereon at a rate of 9.0 percent could be
converted into shares of the Companys Class A Common
Stock based on a conversion price of $6.22 per share,
subject to adjustment for stock split, stock dividend,
recapitalization or similar events. On August 24, 1999
Telcom Ventures elected to convert its note into
845,087 shares of the Companys Class A Common Stock.

On September 10, 1999, the Company entered into a
$1.1 million promissory note with Telcom Ventures. Under
the terms of the note, the entire principal balance and accrued
interest thereon would be due on September 1, 2000. The
interest was initially established at 10.5%, with increments in
the interest rate of 1.5% every 3 months beginning
March 1, 2000. The proceeds of the note were used to
finance the Companys investment in Tecnosistemi S.p.A.
(see note 9). The note was paid in full in
November 1999.

In December 1999, the Company issued approximately
108,000 shares of Class A Common Stock in exchange for a
$1.625 million note receivable from the Companys
President and Chief Executive Officer. The note is payable in
December 2004 or the date he is no longer the
Companys President and Chief Executive Officer. Upon the
event of a change in control of ownership of the Company, the
note will be forgiven. Interest accrues at the federal mid-term
rate on the date of the note and is payable quarterly. The note
is reflected as a reduction of shareholders equity in the
accompanying statement of shareholders equity. As of
December 2000, the unpaid balance of the note is
$1.717 million.

(7)  Property and Equipment

At December 31, 1999 and 2000, property and equipment
consisted of the following:

|                                               |  |                |         |      |  |   |         |  
|---------------------------------------------- |  | -------------- | ------- | ---- |  | - | ------- | -
|                                               |  | 1999           |         | 2000
|                                               |  |                |         |     
|                                               |  |               
|                                               |  | (In thousands)
|                                              
|                                              
|                                              
|                                              
|Computer equipment and software                |  | $              | 12,964  |      |  | $ | 14,274  |  
|                                              
|                                              
|                                              
|                                              
|Furniture and office equipment                 |  |                | 6,371   |      |  |   | 5,975   |  
|                                              
|                                              
|                                              
|                                              
|Purchased computer software                    |  |                | 1,248   |      |  |   | 1,355   |  
|                                              
|                                              
|                                              
|                                              
|RF transmission towers                         |  |                | 32,785  |      |  |   |        |  
|                                              
|                                              
|                                              
|                                              
|Leasehold improvements                         |  |                | 3,152   |      |  |   | 3,360   |  
|                                              
|                                              
|                                              
|                                              
|Vehicles                                       |  |                | 380     |      |  |   | 227     |  
|                                               |  |                |         |      |  |   |         |  
|                                               |  |                | 56,900  |      |  |   | 25,191  |  
|                                              
|                                              
|                                              
|                                              
|Less accumulated depreciation and amortization |  |                | (19,138 | )    |  |   | (19,553 | )
|                                               |  |                |         |      |  |   |         |  
|                                               |  | $              | 37,762  |      |  | $ | 5,638   |  
|                                               |  |                |         |      |  |   |         |  

36



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(8)  Restructuring Charge

On October 20, 1998, the Companys Board of Directors
approved a restructuring plan that resulted in a total fourth
quarter charge of approximately $2.5 million, including
approximately $1.2 million related to continuing
operations. The restructuring charge included $0.1 million
related to the Companys Services businesses,
$1.1 million related to corporate general and
administrative expenses and $1.3 million related to the
Companys products businesses. The charge was taken to
cover the one-time costs associated with the closure of the
Companys office in Dusseldorf, Germany, a reduction in
non-billable positions of approximately 70 full and
part-time employees and approximately 30 contractors. As of
December 31, 1999, a total liability of approximately
$108,000 remained. The $108,000 is included in other current
liabilities in the accompanying consolidated 1999 balance sheet.
The remaining balance of $108,000 was reversed during 2000.

(9)  Investments

In September 1999, the Company, through its wholly-owned
subsidiary, LCC, United Kingdom, Limited, acquired 19.9% of
Tecnosistemi S.p.A. (formerly, Italtel
Sistemi, S.p.A.) for $1.1 million. Tecnosistemi is an
Italian telecommunications services company, and is a recently
spun off division of the Italtel Group whose major shareholders
were Siemens and Telecommunication Italia. Tecneudosia, a market
leader in the design and manufacturing of shelters for fixed and
mobile telecommunication operators and suppliers acquired 22% of
Tecnosistemi; and the right to acquire the 30% interest retained
by the Italtel Group. The Italtel Group will maintain a 30%
interest in Tecnosistemi for a period of one year from the
closing at which time Tecneudosia intends to assume such
interest. The Company, until September 2000, applied the equity
method to account for its investment in Tecnosistemi.
Tecnosistemi incurred cumulative losses since the date of
acquisition through September 30, 2000 of
$3.4 million. The Company recorded a loss in other income
(expense) of $0.8 million related to is pro-rata share
of the losses generated by Tecnosistemi since the date of
acquisition. During September 2000, Tecnosistemi merged into
Tecneudosia S.p.A. As a result of the merger, the Companys
ownership percentage was decreased to 9.4% and the Company
discontinued application of the equity method and now accounts
for its investment using the cost method. During 2000, the
Company earned revenues of approximately $0.5 million from
Tecnosistemi.

In June 2000, the Company acquired 18.2% of Mobilocity,
Inc. (Mobilocity) for $0.5 million. Mobilocity
provides mobile-business strategic consulting and implementation
services. During August 2000, the Companys ownership
percentage was diluted to 3.1% as Mobilocity raised additional
capital, as planned, through issuance of additional stock. The
Company uses the cost method to account for this investment.

In August 2000, the Company acquired 15.0% of Plan +
Design Netcare AG, a German wireless network deployment firm
(PDN) for $2.9 million. In February 2001, the
Company invested an additional $1.6 million to maintain its
15.0% interest in PDN. In addition to the investment, the
Company entered into a five-year joint marketing agreement with
PDN. The Company uses the cost method to account for this
investment. The Company earned revenues of approximately $11,000
in revenues during 2000.

37



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(10)  Income Taxes

The provision (benefit) for income taxes from continuing
operations consists of the following:

|          |                 |                |        |        |        |      |        |        |        |   |        |       |        | 
|--------- | --------------- | -------------- | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ----- | ------ | 
|          |                 | 1998           |        | 1999   |        | 2000
|          |                 |                |        |        |        |     
|          |                 |               
|          |                 | (In thousands)
|         
|         
|         
|         
|Current:  |                 |                |        |        |        |      |        |        |        |   |        |      
|         
|         
|         
|         
|          | Federal         |                | $      |       |        |      | $      | 100    |        |   | $      | 4,009 |       
|         
|         
|         
|         
|          | State and local |                |        |       |        |      |        |       |        |   |        | 522   |       
|         
|         
|         
|         
|          | Foreign         |                |        | 1,582  |        |      |        | 919    |        |   |        | 1,115 |       
|          |                 |                |        |        |        |      |        |        |        |   |        |      
|          |                 |                | 1,582  |        |        |      | 1,019  |        |        |   | 5,646  |      
|          |                 |                |        |        |        |      |        |        |        |   |        |      
|Deferred: |                 |                |        |        |        |      |        |        |        |   |        |      
|         
|         
|         
|         
|          | Federal         |                |        | (5,782 | )      |      |        | (3,568 | )      |   |        | 9,730 |       
|         
|         
|         
|         
|          | State and local |                |        | (361   | )      |      |        | (128   | )      |   |        | 1,155 |       
|         
|         
|         
|         
|          | Foreign         |                |        |       |        |      |        |       |        |   |        |      |       
|          |                 |                |        |        |        |      |        |        |        |   |        |      
|          |                 |                | (6,143 | )      |        |      | (3,696 | )      |        |   | 10,885 |      
|          |                 |                |        |        |        |      |        |        |        |   |        |      
|          |                 | Total          |        | $      | (4,561 | )    |        | $      | (2,677 | ) |        | $     | 16,531 | 
|          |                 |                |        |        |        |      |        |        |        |   |        |      

The 1999 and 2000 income tax provision related to operations
does not include a $0.6 million tax charge and a
$3.3 million tax benefit, respectively, related to
exercising stock options which was recorded directly to paid-in
capital. In addition, the 1999 income tax provision related to
continuing operations does not include a tax charge of $12.6
million related to the cancellation of indebtedness income from
the conversion of the note payable to MCI. The tax charge was
recorded directly to paid-in capital.

Income (loss) before income taxes from continuing
operations includes the following components:

|         |       |                |         |         |   |      |        |        |   |   |        |        | 
|-------- | ----- | -------------- | ------- | ------- | - | ---- | ------ | ------ | - | - | ------ | ------ | 
|         |       | 1998           |         | 1999    |   | 2000
|         |       |                |         |         |   |     
|         |       |               
|         |       | (In thousands)
|        
|        
|        
|        
|Domestic |       | $              | (16,203 | )       |   | $    | (5,248 | )      |   | $ | 34,184 |       
|        
|        
|        
|        
|Foreign  |       |                | 4,684   |         |   |      | (3,641 | )      |   |   | 2,965  |       
|         |       |                |         |         |   |      |        |        |   |   |        |       
|         | Total |                | $       | (11,519 | ) |      | $      | (8,889 | ) |   | $      | 37,149 | 
|         |       |                |         |         |   |      |        |        |   |   |        |       

A reconciliation of the statutory Federal income tax rate and
the effective income tax rate from continuing operations for the
years ended December 31, 1998, 1999 and 2000 follows.

|                                  |                                                          |      |       |       |   |      |       |       |   |  |       |      |  
|--------------------------------- | -------------------------------------------------------- | ---- | ----- | ----- | - | ---- | ----- | ----- | - |  | ----- | ---- | -
|                                  |                                                          | 1998 |       | 1999  |   | 2000
|                                  |                                                          |      |       |       |   |     
|Statutory Federal income tax rate |                                                          |      | (35.0 | )%    |   |      | (35.0 | )%    |   |  | 35.0% |     
|                                 
|                                 
|                                 
|                                 
|Effect of:                        |                                                          |      |       |       |   |      |       |       |   |  |       |     
|                                 
|                                 
|                                 
|                                 
|                                  | State and local income taxes, net of federal tax benefit |      |       | (2.0  | ) |      |       | (1.1  | ) |  |       | 2.9  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Foreign                                                  |      |       | 10.0  |   |      |       | 14.6  |   |  |       | 0.2  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Tax credits                                              |      |       | (10.0 | ) |      |       | (2.6  | ) |  |       | (0.6 | )
|                                 
|                                 
|                                 
|                                 
|                                  | Non deductible expenses                                  |      |       | 9.0   |   |      |       | 8.5   |   |  |       | 7.4  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Other                                                    |      |       | 1.1   |   |      |       | 8.3   |   |  |       | 2.6  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Valuation Allowance                                      |      |       | (12.7 | ) |      |       | (28.0 | ) |  |       | (3.0 | )
|                                  |                                                          |      |       |       |   |      |       |       |   |  |       |     
|Effective income tax rate         |                                                          |      | (39.6 | )%    |   |      | (30.1 | )%    |   |  | 44.5% |     
|                                  |                                                          |      |       |       |   |      |       |       |   |  |       |     

38



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The tax effects of temporary differences that give rise to
significant portions of the net deferred tax assets at
December 31, 1999 and 2000 are presented below:

|                                                                         |                                  |                |        |        |   |   |        |        |  
|------------------------------------------------------------------------ | -------------------------------- | -------------- | ------ | ------ | - | - | ------ | ------ | -
|                                                                         |                                  | 1999           |        | 2000  
|                                                                         |                                  |                |        |       
|                                                                         |                                  |               
|                                                                         |                                  | (In thousands)
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Deferred tax assets:                                                     |                                  |                |        |        |   |   |        |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Accounts receivable, principally due to allowance for doubtful
	accounts |                                  | $              | 75     |        |   | $ | 381    |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Other receivables                                                        |                                  |                | 939    |        |   |   | 1,567  |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Property and equipment                                                   |                                  |                | 225    |        |   |   |       |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Non-cash compensation                                                    |                                  |                | 265    |        |   |   | 1,283  |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Accrued expenses                                                         |                                  |                | 4,599  |        |   |   | 2,719  |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Deferred revenue                                                         |                                  |                | 73     |        |   |   |       |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net operating loss carry-forward                                         |                                  |                | 8,347  |        |   |   |       |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Foreign tax credit carry-forward                                         |                                  |                | 6,302  |        |   |   | 4,596  |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Foreign temporary differences                                            |                                  |                | 155    |        |   |   |       |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Research tax credit carryover                                            |                                  |                | 217    |        |   |   | 281    |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Other                                                                    |                                  |                | 506    |        |   |   | 353    |       
|                                                                         |                                  |                |        |        |   |   |        |       
|                                                                         | Total gross deferred tax assets  |                |        | 21,703 |   |   |        | 11,180 |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Less valuation allowance                                                 |                                  |                | (4,954 | )      |   |   | (3,831 | )     
|                                                                         |                                  |                |        |        |   |   |        |       
|Deferred tax assets net of valuation allowance                           |                                  |                | 16,749 |        |   |   | 7,349  |       
|                                                                         |                                  |                |        |        |   |   |        |       
|Deferred tax liabilities:                                                |                                  |                |        |        |   |   |        |       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Property and equipment                                                   |                                  |                |       |        |   |   | (192   | )     
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Deferred revenue                                                         |                                  |                |       |        |   |   | (170   | )     
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Other                                                                    |                                  |                | (104   | )      |   |   | (71    | )     
|                                                                         |                                  |                |        |        |   |   |        |       
|                                                                         | Total gross deferred liabilities |                |        | (104   | ) |   |        | (433   | )
|                                                                         |                                  |                |        |        |   |   |        |       
|Net deferred tax assets                                                  |                                  | $              | 16,645 |        |   | $ | 6,916  |       
|                                                                         |                                  |                |        |        |   |   |        |       

The components giving rise to the net deferred tax assets
described above have been included in the accompanying balance
sheet as of December 31, 1999 and 2000 as follows:

|                 |  |      |        |      |  |   |       | 
|---------------- |  | ---- | ------ | ---- |  | - | ----- | 
|                 |  | 1999 |        | 2000
|                 |  |      |        |     
|Current asset    |  | $    | 5,083  |      |  | $ | 1,850 | 
|                
|                
|                
|                
|Noncurrent asset |  |      | 11,562 |      |  |   | 5,066 | 
|                 |  |      |        |      |  |   |       | 
|                 |  | $    | 16,645 |      |  | $ | 6,916 | 
|                 |  |      |        |      |  |   |       | 

At December 31, 2000, the Company had foreign tax credits
for U.S. tax purposes of $4.6 million, which expire
between 2001 and 2004. The Company also had $4.0 million of
foreign operating loss carry-forwards from operations, which
expire between 2006 and 2008.

In addressing the realizability of deferred tax assets,
management considers whether it is more likely than not that
some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during
the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income and
tax planning strategies in making this assessment. A valuation
allowance has been provided for deferred tax assets which
management believes are not more likely than not to be realized.

39



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Foreign income tax expense is generated from business conducted
in countries where the Company has subsidiaries or has
established branch offices or has performed significant services
that constitute a permanent establishment for tax
reporting purposes.

(11)  Note Payable

In March 1999, the Company amended and restated the credit
facility with the Chase Manhattan Bank, as Administrative Agent
(Chase), (together with the LCC Europe Credit
Facility, the Credit Facility), which was
established in 1996. The Credit Facility consisted of a
revolving loan and letter of credit facility in an aggregate
principal amount not to exceed $20.0 million for the
Company and $2.5 million for LCC Europe (the LCC
Europe Credit Facility).

Approximately $4.5 million was outstanding under the Credit
Facility at December 31, 1999. Outstanding letters of
credit were $0.8 million at December 31, 1999. In
March 2000, the Credit facility was paid-off in its
entirety.

(12)  Convertible Subordinated Debt

In June 1994, the Company issued to MCI Worldcom
(MCI) a $20.0 million convertible Subordinated Note
(the Subordinated Note). The Subordinated Note bore
interest at a rate equal to 6.8%, payable semiannually. The
entire principal amount of the Subordinated Note was due in
June 2000.

In June 1994, Telcom Ventures issued a $30.0 million
convertible Subordinated Note (the Telcom Ventures
Subordinated Note) to MCI. The Telcom Ventures
Subordinated Note bore interest at a rate equal to 6.8%, payable
semiannually. Effective September 27, 1996, in connection
with the Companys initial public offering of Class A
Common Stock, the Company assumed the $30.0 million Telcom
Ventures Subordinated Note from Telcom Ventures. As a result of
this assumption, the Company has the exclusive right to exercise
all Telcom Ventures rights under the Telcom Ventures
Subordinated Note and is solely responsible for the payment of
interest and principal thereunder.

On October 23, 1997, the Company announced it had agreed
with MCI to defer the Companys option to convert the notes
in 1997. As per the arrangement, interest payable was reduced
from 6.8% to 4.4% per annum.

On July 13, 1999, the Company received notice of conversion
from MCI of its convertible subordinated notes in the aggregate
principal amount of $50.0 million. The notes were converted
into 2,841,099 shares of the Companys Class A Common
Stock on July 27, 1999.

(13)  Health and Retirement Plans

The Company has a defined contribution profit sharing plan under
Section 401(k) of the IRC that provides for voluntary
employee contributions of 1.0 to 15.0 percent of
compensation for substantially all employees. The Company makes
a matching contribution of 50.0 percent of an
employees contribution up to 6.0 percent of each
employees compensation. Company contributions and other
expenses associated with the plan were approximately $652,000,
$482,000 and $601,000 for the years ended December 31,
1998, 1999, and 2000, respectively.

The Companys subsidiary, LCC UK, has a defined
contribution pension plan under Chapter 1 Part XIV of
the Income and Corporation Taxes Act, 1988. The plan provides
for voluntary employee contributions of 1.0 to 5.0 percent
of an employees base salary. It is available to all full
time employees who have completed their three-month probation
period. The Company contributes 5.0 percent of an
employees base salary and matches the employees
contribution up to 5.0 percent. LCC UK contributions and
other expenses related to the plan were approximately $66,000
and $220,000 for the years ended December 31, 1999 and
2000, respectively.

40



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The Company is self-insured for group health, life, and short
and long-term disability claims up to certain stop losses.

(14)  Incentive Plans

At December 31, 1998, 1999, and 2000, the Company had two
stock-based incentive plans, an employee stock purchase plan and
an employee stock option plan, which are described below. The
Company applies APB Opinion No. 25 and related
interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized for its fixed stock option
plans and employee stock purchase plan. Had compensation cost
for the Companys stock-based compensation plans and
employee stock purchase plan been determined on the fair value
at the grant dates for awards under those plans, consistent with
Financial Accounting Standards Board Statement No. 123
(SFAS No. 123), the Companys income
(loss) from continuing operations and income
(loss) from continuing operations per share would have been
reduced to the pro forma amounts indicated below.

|                                                   |              |                       |   |        |       |      |   |        |       |   |   |        |      | 
|-------------------------------------------------- | ------------ | --------------------- | - | ------ | ----- | ---- | - | ------ | ----- | - | - | ------ | ---- | 
|                                                   |              | 1998                  |   | 1999   |       | 2000
|                                                   |              |                       |   |        |       |     
|                                                   |              |                      
|                                                   |              | (In thousands, except
|                                                   |              | per share data)      
|Income (loss) from continuing operations           |              |                       |   |        |       |      |   |        |       |   |   |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | As reported  |                       | $ | (6,958 | )     |      | $ | (6,212 | )     |   | $ | 20,618 |     
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Pro forma    |                       |   | (9,312 | )     |      |   | (7,613 | )     |   |   | 17,257 |     
|Income (loss) from continuing operations per share |              |                       |   |        |       |      |   |        |       |   |   |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | As reported: |                       |   |        |       |      |   |        |       |   |   |        |     
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Basic                 |   | $      | (0.45 | )    |   | $      | (0.36 | ) |   | $      | 1.01 | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Diluted               |   |        | (0.45 | )    |   |        | (0.36 | ) |   |        | 0.93 | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Pro forma:   |                       |   |        |       |      |   |        |       |   |   |        |     
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Basic                 |   | $      | (0.60 | )    |   | $      | (0.44 | ) |   | $      | 0.85 | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Diluted               |   |        | (0.60 | )    |   |        | (0.44 | ) |   |        | 0.78 | 

The per share weighted-average fair value of stock options
granted during 1998, 1999 and 2000 was $10.02, $3.88, and
$10.93, respectively, on the date of grant using the Black
Scholes option-pricing model with the following weighted-average
assumptions:

|                        |  |           |  |           |  |          
|----------------------- |  | --------- |  | --------- |  | ---------
|                        |  | 1998      |  | 1999      |  | 2000     
|                        |  |           |  |           |  |          
|Expected dividend yield |  | 0%        |  | 0%        |  | 0%       
|                       
|                       
|                       
|                       
|Risk-free interest rate |  | 5.0%      |  | 6.0%      |  | 6.0%     
|                       
|                       
|                       
|                       
|Expected life           |  | 2-8 years |  | 3-5 years |  | 3-7 years
|                       
|                       
|                       
|                       
|Volatility              |  | 65.0%     |  | 60.0%     |  | 75100%  

Under the Companys Employee Stock Purchase Plan,
360,000 shares of Class A Common Stock were available
for purchase by eligible employees of the Company beginning in
1997. Rights to purchase shares are deemed granted to
participating employees as of the beginning of each applicable
period, as specified by the Compensation and Stock Option
Committee of the Companys Board of Directors. The purchase
price for each share is not less than 85% of the fair market
value of the share of Class A Common Stock on the first or
last trading day of such period, whichever is lower. Under the
Employee Stock Purchase Plan, the Company sold
100,710 shares to employees in 1998, 55,898 shares in
1999, and 43,888 shares in 2000. Compensation cost of
approximately $175,000, $54,000, and $138,000, respectively,
would have been recognized under SFAS

41



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

No. 123 for the fair value of the employees purchase rights
and is included in proforma net income above. Compensation cost
was estimated using the Black Scholes model with the following
assumptions.

|                        |  |          |  |            |  |        
|----------------------- |  | -------- |  | ---------- |  | -------
|                        |  | 1998     |  | 1999       |  | 2000   
|                        |  |          |  |            |  |        
|Expected dividend yield |  | 0%       |  | 0%         |  | 0%     
|                       
|                       
|                       
|                       
|Risk-free interest rate |  | 2.5-3.0% |  | 3%         |  | 3%     
|                       
|                       
|                       
|                       
|Expected life           |  | 3 months |  | 1-3 months |  | 1 month
|                       
|                       
|                       
|                       
|Volatility              |  | 65%      |  | 60-70%     |  | 75-100%

The weighted average fair value of the purchase rights granted
in 1998, 1999, and 2000 was $1.74, $0.96, and $3.15 respectively.

In connection with its initial public offering, the Company
established the 1996 Employee Stock Option Plan, which
authorized the issuance of up to 3,224,000 shares of
Class A Common Stock pursuant to options granted under the
plan. An additional 1,501,000 shares of Class A Common
Stock were reserved under the 1996 Employee Stock Option Plan in
1998. In late 1999 and early 2000, the Board of Directors
adopted amendments to the 1996 Employee Stock Option Plan, which
was subsequently approved by the stockholders at the 2000 annual
meeting, increasing the total number of shares reserved by
4,100,000 shares so that the aggregate number of shares
reserved for issuance is 8,825,000.

Also in connection with the Companys initial public
offering, the Company established the 1996 Directors Stock
Option Plan. The Directors Plan provides for the
formula grant of options, and authorizes the
issuance of up to 60,000 shares of Class A Common
Stock and 250,000 shares of Class B Common Stock. An
additional 80,000 shares of Class A Common Stock were
reserved under the Directors Plan in 1998 and an
additional 110,000 shares of Class A Common Stock were
reserved under the Directors Plan in 2000. The option
exercise price for options granted under the Directors
Plan is 100% of the fair value of the shares on the date of
grant. Each eligible director who is not eligible to hold shares
of Class B Common Stock was granted an initial option to
purchase 10,000 shares of Class A Common Stock in
connection with the offering. Each eligible director who is
eligible to hold shares of Class B Common Stock and who was
a director as of the offering was granted an initial option to
purchase 35,000 shares of Class B Common Stock in
connection with the offering, and was granted additional options
to purchase 22,500 shares of Class B Common Stock as
of each of the next four annual meetings of the stockholders of
the Company if the director continued to be an eligible
director. Options granted with respect to Class A Common
Stock become immediately exercisable with respect to directors
who were directors of the Company prior to July 1, 1996,
and become exercisable with respect to one-third of the shares
of Class A Common Stock that are subject to the options on
each of the first three anniversaries of the date of grant
subject to acceleration of vesting on a change of control with
respect to directors who became directors of the Company after
July 1, 1996.

The Company has reserved 85,000 shares of Class A
Common Stock for issuance pursuant to options to be granted to a
person or entity designated by The Carlyle Group. The option
exercise price for these options are and will be 100% of the
fair market value of the Class A Common Stock on the date
of grant of the option. An initial option to purchase
25,000 shares of Class A Common Stock was granted in
connection with the offering, and was granted an additional
option to purchase 15,000 shares of Class A Common
Stock on each of the four anniversaries of the initial date of
grant. Options granted vested immediately. The options will
expire no later than the fifth anniversary of the date of grant.

On December 11, 1998, the Company re-priced substantially
all options previously granted under the 1996 Employee Stock
Option Plan to $5.00 per share which exceeded the fair
market value of the stock on that date. Approximately
887,000 share options were subject to repricing.

42



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Changes in stock options outstanding were as follows:

|                             |  |           |        |                |  |           |       |                |  |           |       |                |  |   |      |  |  |  |       |  |  |   |       | 
|---------------------------- |  | --------- | ------ | -------------- |  | --------- | ----- | -------------- |  | --------- | ----- | -------------- |  | - | ---- |  |  |  | ----- |  |  | - | ----- | 
|                             |  |           |        |                |  |          
|                             |  | 1998      |        | 1999           |  | 2000     
|                             |  |           |        |                |  |          
|                             |  |           |        | Weighted-      |  |           |       | Weighted-      |  |           |       | Weighted-     
|                             |  | Number of |        | Average        |  | Number of |       | Average        |  | Number of |       | Average       
|                             |  | Shares    |        | Exercise Price |  | Shares    |       | Exercise Price |  | Shares    |       | Exercise Price
|                             |  |           |        |                |  |           |       |                |  |           |       |               
|Balance at beginning of year |  |           | 2,509  |                |  | $         | 9.89  |                |  |           | 2,213 |                |  | $ | 7.42 |  |  |  | 2,799 |  |  | $ | 7.62  | 
|                            
|                            
|                            
|                            
|Granted                      |  |           | 1,342  |                |  |           | 18.31 |                |  |           | 2,078 |                |  |   | 7.46 |  |  |  | 2,645 |  |  |   | 16.06 | 
|                            
|                            
|                            
|                            
|Exercised                    |  |           | (431   | )              |  |           | 6.74  |                |  |           | (584  | )              |  |   | 4.68 |  |  |  | 361   |  |  |   | 4.48  | 
|                            
|                            
|                            
|                            
|Terminated                   |  |           | (1,207 | )              |  |           | 17.95 |                |  |           | (908  | )              |  |   | 8.93 |  |  |  | 622   |  |  |   | 13.18 | 
|                             |  |           |        |                |  |           |       |                |  |           |       |                |  |   |      |  |  |  |       |  |  |   |       | 
|Balance at end of year       |  |           | 2,213  |                |  |           | 7.42  |                |  |           | 2,799 |                |  |   | 7.62 |  |  |  | 4,461 |  |  |   | 12.11 | 
|                             |  |           |        |                |  |           |       |                |  |           |       |                |  |   |      |  |  |  |       |  |  |   |       | 

The following table summarizes information about options at
December 31, 2000.

|                |  |                     |       |                     |  |               |      |                   |  |               |       |  |  |  |       |  |  |   |       | 
|--------------- |  | ------------------- | ----- | ------------------- |  | ------------- | ---- | ----------------- |  | ------------- | ----- |  |  |  | ----- |  |  | - | ----- | 
|                |  |                     |       |                    
|                |  | Options Outstanding |       | Options Exercisable
|                |  |                     |       |                    
|                |  |                     |       | Weighted Avg.       |  | Weighted Avg. |      |                   |  | Weighted Avg.
|Range of        |  | Number at           |       | Remaining           |  | Exercise      |      | Number at         |  | Exercise     
|Exercise Prices |  | December 31, 2000   |       | Contractual Life    |  | Price         |      | December 31, 2000 |  | Price        
|                |  |                     |       |                     |  |               |      |                   |  |              
|                |  | (In thousands)      |       | (In years)          |  |               |      | (In thousands)    |  |              
|               
|               
|               
|               
|$ 4.00   4.25  |  |                     | 212   |                     |  |               | 6.82 |                   |  | $             | 4.20  |  |  |  | 135   |  |  | $ | 4.17  | 
|               
|               
|               
|               
|$ 5.00   5.75  |  |                     | 1,277 |                     |  |               | 7.91 |                   |  |               | 5.31  |  |  |  | 552   |  |  |   | 5.22  | 
|               
|               
|               
|               
|$ 7.94   8.25  |  |                     | 97    |                     |  |               | 9.46 |                   |  |               | 8.15  |  |  |  | 11    |  |  |   | 7.94  | 
|               
|               
|               
|               
|$11.56  13.56  |  |                     | 828   |                     |  |               | 8.66 |                   |  |               | 13.28 |  |  |  | 259   |  |  |   | 13.09 | 
|               
|               
|               
|               
|$16.00  16.88  |  |                     | 1,718 |                     |  |               | 8.62 |                   |  |               | 16.11 |  |  |  | 145   |  |  |   | 16.33 | 
|               
|               
|               
|               
|$18.25  21.00  |  |                     | 292   |                     |  |               | 8.24 |                   |  |               | 19.49 |  |  |  | 66    |  |  |   | 18.73 | 
|               
|               
|               
|               
|$26.75  39.00  |  |                     | 37    |                     |  |               | 9.39 |                   |  |               | 32.24 |  |  |  |      |  |  |   |      | 
|                |  |                     |       |                     |  |               |      |                   |  |               |       |  |  |  |       |  |  |   |       | 
|                |  |                     | 4,461 |                     |  |               | 8.34 |                   |  |               | 12.11 |  |  |  | 1,168 |  |  |   | 9.02  | 
|                |  |                     |       |                     |  |               |      |                   |  |               |       |  |  |  |       |  |  |   |       | 

(15)  Lease Commitments

The Company leases office facilities and certain equipment,
principally in the United States, under operating leases
expiring on various dates over the next eight years. The lease
agreements include renewal options and provisions for rental
escalations based on the Consumer Price Index and require the
Company to pay for executory costs such as taxes and insurance.
The lease agreements also allow the Company to elect an early
out provision by giving notice and paying certain lease
termination penalties.

Benefits associated with a rent abatement period and certain
lease incentives for office facilities are reflected ratably
over the period of the lease. For leases which have been
terminated (see below), the applicable portion of the benefit
has been offset against the lease termination penalty. The total
deferred rent was approximately $874,000 and $978,000 at
December 31, 1999 and 2000, respectively.

43



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Future minimum rental payments and receivables under
non-cancelable operating leases, excluding executory costs, are
as follows:

|           |  |                |        |                    |  |   |       | 
|---------- |  | -------------- | ------ | ------------------ |  | - | ----- | 
|           |  |                |        | Rental Receivables
|           |  | Rental Payable |        | Under Subleases   
|           |  |                |        |                   
|           |  |               
|           |  | (In thousands)
|          
|          
|          
|          
|2001       |  | $              | 6,256  |                    |  | $ | 2,045 | 
|          
|          
|          
|          
|2002       |  |                | 7,646  |                    |  |   | 441   | 
|          
|          
|          
|          
|2003       |  |                | 3,404  |                    |  |   | 5     | 
|          
|          
|          
|          
|2004       |  |                | 3,358  |                    |  |   |      | 
|          
|          
|          
|          
|2005       |  |                | 3,424  |                    |  |   |      | 
|          
|          
|          
|          
|Thereafter |  |                | 5,257  |                    |  |   |      | 
|           |  |                |        |                    |  |   |       | 
|           |  | $              | 29,345 |                    |  | $ | 2,491 | 
|           |  |                |        |                    |  |   |       | 

Rent expense under operating leases was approximately,
$6.9 million, $6.2 million, and $8.7 million for
the years ended December 31, 1998, 1999, and 2000,
respectively.

(16)  Contingencies

The Company is party to various non-material legal proceedings
and claims incidental to its business. Management does not
believe that these matters will have a material adverse effect
on the consolidated results of operations or financial condition
of the Company.

(17)  Income (Loss) Per Share

Income (loss) per share is presented on both a basic and
diluted basis in accordance with the provisions of Financial
Accounting Standards Board Statement No. 128,Earnings per Share (SFAS
No. 128). Basic earnings per share excludes dilution
and is computed by dividing income available to common
stockholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects
the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into
common stock or resulted in the issuance of common stock that
shared in the earnings of the Company. The reconciliation of the
basic and diluted earnings per share computations for the years
ended December 31, 1998, 1999 and 2000 are as follows:

|                                                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |   |      | 
|--------------------------------------------------- | ------------------ | ------------------------------------- |  | --------- |  | --------- | ------ | ------ | ----- | ------ | ----- | --------- | ------ | ------ | ------ | ------ |  | --------- | ------ | - | ----- | - | ----- | - | ------ | - | ------ |  |  | ----- | ------ | - | ---- | - | ---- | 
|                                                    |                    |                                       |  |           |  |          
|                                                    |                    | 1998                                  |  | 1999      |  | 2000     
|                                                    |                    |                                       |  |           |  |          
|                                                    |                    | Net                                   |  |           |  | Per Share |        | Net    |       |        |       | Per Share |        | Net    |        |        |  | Per Share
|                                                    |                    | (Loss)                                |  | Shares    |  | Amount    |        | (Loss) |       | Shares |       | Amount    |        | Income |        | Shares |  | Amount   
|                                                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |          
|                                                    |                    |                                      
|                                                    |                    | (in thousands, except per share data)
|                                                   
|                                                   
|                                                   
|                                                   
|Basic EPS                                           |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  
|                                                   
|                                                   
|                                                   
|                                                   
|Net income (loss) available to common shareholders: |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  
|                                                   
|                                                   
|                                                   
|                                                   
|Continuing operations                               |                    | $(6,958)                              |  |           |  |           |        |        |       |        |       | $         | (6,212 | )      |        |        |  |           |        |   |       |   |       | $ | 20,618 |   |        |  |  |       |        |   |      |  
|                                                   
|                                                   
|                                                   
|                                                   
|Discontinued Operations                             |                    | (17,785)                              |  |           |  |           |        |        |       |        |       |           |       |        |        |        |  |           |        |   |       |   |       |   |       |   |        |  |  |       |        |   |      |  
|                                                   
|                                                   
|                                                   
|                                                   
|Gain on disposal                                    |                    |                                      |  |           |  |           |        |        |       |        |       |           | 803    |        |        |        |  |           |        |   |       |   |       |   |       |   |        |  |  |       |        |   |      |  
|                                                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  
|                                                    |                    | Total                                 |  | $(24,743) |  |           | 15,509 |        |       |        |       |           |        | $      | (5,409 | )      |  |           | 17,302 |   |       |   |       |   |        | $ | 20,618 |  |  |       | 20,360 |   |      |   |      | 
|                                                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  
|Continuing Operations                               |                    |                                       |  |           |  |           |        | $      | (0.45 | )      |       |           |        |        |        |        |  |           |        | $ | (0.36 | ) |       |   |        |   |        |  |  |       |        | $ | 1.01 |  
|                                                   
|                                                   
|                                                   
|                                                   
|Discontinued Operations                             |                    |                                       |  |           |  |           |        |        | (1.15 | )      |       |           |        |        |        |        |  |           |        |   | 0.05  |   |       |   |        |   |        |  |  |       |        |   |     |  
|                                                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  
|                                                    |                    | Total                                 |  |           |  |           |        |        |       | $      | (1.60 | )         |        |        |        |        |  |           |        |   |       | $ | (0.31 | ) |        |   |        |  |  |       |        |   |      | $ | 1.01 | 
|                                                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  
|Effective of Dilutive Securities                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Stock option plans |                                       |  |           |  |          |        |        |       |        |       |           |        |        |        |        |  |          |        |   |       |   |       |   |        |   |        |  |  | 1,750 |        |   |      |   |     
|                                                    |                    |                                       |  |           |  |           |        |        |       |        |       |           |        |        |        |        |  |           |        |   |       |   |       |   |        |   |        |  |  |       |        |   |      |  

44



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

|             |                                                                               |                                       |          |           |  |           |        |        |   |        |       |           |   |        |        |        |  |           |        |  |   |       |       |   |   |        |        |  |  |  |        |  |   |      |      | 
|------------ | ----------------------------------------------------------------------------- | ------------------------------------- | -------- | --------- |  | --------- | ------ | ------ | - | ------ | ----- | --------- | - | ------ | ------ | ------ |  | --------- | ------ |  | - | ----- | ----- | - | - | ------ | ------ |  |  |  | ------ |  | - | ---- | ---- | 
|             |                                                                               |                                       |          |           |  |          
|             |                                                                               | 1998                                  |          | 1999      |  | 2000     
|             |                                                                               |                                       |          |           |  |          
|             |                                                                               | Net                                   |          |           |  | Per Share |        | Net    |   |        |       | Per Share |   | Net    |        |        |  | Per Share
|             |                                                                               | (Loss)                                |          | Shares    |  | Amount    |        | (Loss) |   | Shares |       | Amount    |   | Income |        | Shares |  | Amount   
|             |                                                                               |                                       |          |           |  |           |        |        |   |        |       |           |   |        |        |        |  |          
|             |                                                                               |                                      
|             |                                                                               | (in thousands, except per share data)
|            
|            
|            
|            
|Dilutive EPS |                                                                               |                                       |          |           |  |           |        |        |   |        |       |           |   |        |        |        |  |           |        |  |   |       |       |   |   |        |        |  |  |  |        |  |   |     
|            
|            
|            
|            
|             | Net income (loss)  available to common stockholders and
	assumed conversions: |                                       |          |           |  |           |        |        |   |        |       |           |   |        |        |        |  |           |        |  |   |       |       |   |   |        |        |  |  |  |        |  |   |      |     
|            
|            
|            
|            
|             | Continuing Operations                                                         |                                       | $(6,958) |           |  |           |        |        | $ | (0.45  | )     |           | $ | (6,212 | )      |        |  |           |        |  | $ | (0.36 | )     |   | $ | 20,618 |        |  |  |  |        |  | $ | 0.93 |     
|            
|            
|            
|            
|             | Discontinued Operations                                                       |                                       | (17,785) |           |  |           |        |        |   | (1.15  | )     |           |   |       |        |        |  |           |        |  |   |      |       |   |   |       |        |  |  |  |        |  |   |     |     
|            
|            
|            
|            
|             | Gain on disposal                                                              |                                       |         |           |  |           |        |        |   |       |       |           |   | 803    |        |        |  |           |        |  |   | 0.05  |       |   |   |       |        |  |  |  |        |  |   |     |     
|             |                                                                               |                                       |          |           |  |           |        |        |   |        |       |           |   |        |        |        |  |           |        |  |   |       |       |   |   |        |        |  |  |  |        |  |   |     
|             |                                                                               | Total                                 |          | $(24,743) |  |           | 15,509 |        |   | $      | (1.60 | )         |   | $      | (5,409 | )      |  |           | 17,302 |  |   | $     | (0.31 | ) |   | $      | 20,618 |  |  |  | 22,110 |  |   | $    | 0.93 | 
|             |                                                                               |                                       |          |           |  |           |        |        |   |        |       |           |   |        |        |        |  |           |        |  |   |       |       |   |   |        |        |  |  |  |        |  |   |     

The Companys convertible subordinated debt was exchanged
into 2.8 million shares of the Companys Class A
Common Stock during 1999. The convertible subordinated debt, was
outstanding during calendar 1998 and 1999, but was not included
in the computation of diluted earnings per share because the
effect of which would have been anti-dilutive. Options to
purchase 2.2 million, 2.8 million and
120,100 shares of Class A Common Stock were
outstanding during 1998, 1999 and 2000, respectively, but were
not included in the computation of diluted earnings per share
because the effect of which would have been anti-dilutive.

(18)  Segment Reporting

The Company adopted SFAS No. 131,Disclosures about
Segments of an Enterprise and Related Information
(SFAS No. 131). SFAS No. 131 established
standards for reporting information about the operating segments
in interim and annual financial reports issued to stockholders.
It also established standards for related disclosures about
products and services and geographic areas. Operating segments
are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly
by the chief operating decision maker, or decision making group,
in deciding how to allocate resources and assess performance.
The Companys chief operating decision-making group is the
Executive Committee, which is comprised of the Chief Operating
Officer and the lead executives of each of the Companys
operating segments. The operating segments are managed
separately because each operating segment represents a strategic
business unit that offers distinct services.

The Companys operating segments include Services (Design
Services and Deployment Services) and Tower ownership and
management. Design Services provides engineering and design
services for cellular phone system operators, personal
communication system (PCS) operators and other
wireless communication systems providers. Deployment Services
provides program and construction management services related to
the build-out of wireless communication systems.

The accounting policies of the operating segments are the same
as those described in the summary of significant accounting
policies. The Company evaluates performance based on stand alone
operating segment profit or loss from operations before income
taxes not including nonrecurring gains and losses, and generally
accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market
prices. Interdivisional transactions are eliminated in
consolidation. Revenues are attributed to geographic areas based
on the location of the assignment.

45



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Operating Segments:

(In thousands)


|     |                                     |          |   |            |  |       |   |        |   |  |   |         | 
|---- | ----------------------------------- | -------- | - | ---------- |  | ----- | - | ------ | - |  | - | ------- | 
|     |                                     |          |   | Tower      |  |      
|     |                                     |          |   | Ownership  |  |      
|     |                                     |          |   | and        |  |      
|     |                                     | Services |   | Management |  | Total
|     |                                     |          |   |            |  |      
|1998 |                                     |          |   |            |  |       |   |        |   |  |   |        
|    
|    
|    
|    
|     | Net revenue from external customers |          | $ | 86,328     |  |       | $ | 860    |   |  | $ | 87,188  | 
|    
|    
|    
|    
|     | Intersegment revenues               |          |   | 1,180      |  |       |   |       |   |  |   | 1,180   | 
|     |                                     |          |   |            |  |       |   |        |   |  |   |        
|     | Total revenues                      |          | $ | 87,508     |  |       | $ | 860    |   |  | $ | 88,368  | 
|     |                                     |          |   |            |  |       |   |        |   |  |   |        
|     | Depreciation and amortization       |          | $ | 1,185      |  |       | $ | 451    |   |  | $ | 1,636   | 
|    
|    
|    
|    
|     | Interest income                     |          |   | 338        |  |       |   |       |   |  |   | 338     | 
|    
|    
|    
|    
|     | Interest expense                    |          |   |           |  |       |   | 1,016  |   |  |   | 1,016   | 
|    
|    
|    
|    
|     | Income tax expense (benefit)        |          |   | 4,361      |  |       |   | (1,692 | ) |  |   | 2,669   | 
|    
|    
|    
|    
|     | Net income (loss)                   |          |   | 6,650      |  |       |   | (2,581 | ) |  |   | 4,069   | 
|    
|    
|    
|    
|     | Segment assets                      |          |   | 26,899     |  |       |   | 18,250 |   |  |   | 45,149  | 
|    
|    
|    
|    
|     | Expenditures for Property           |          |   | 757        |  |       |   | 14,860 |   |  |   | 15,617  | 
|    
|    
|    
|    
|1999 |                                     |          |   |            |  |       |   |        |   |  |   |        
|    
|    
|    
|    
|     | Net revenue from external customers |          | $ | 73,289     |  |       | $ | 2,504  |   |  | $ | 75,793  | 
|    
|    
|    
|    
|     | Intersegment revenues               |          |   | 268        |  |       |   |       |   |  |   | 268     | 
|     |                                     |          |   |            |  |       |   |        |   |  |   |        
|     | Total revenues                      |          | $ | 73,557     |  |       | $ | 2,504  |   |  | $ | 76,061  | 
|     |                                     |          |   |            |  |       |   |        |   |  |   |        
|     | Depreciation and amortization       |          |   | 1,112      |  |       |   | 1,220  |   |  |   | 2,332   | 
|    
|    
|    
|    
|     | Interest income                     |          |   | 192        |  |       |   |       |   |  |   | 192     | 
|    
|    
|    
|    
|     | Interest expense                    |          |   | 9          |  |       |   | 1,785  |   |  |   | 1,794   | 
|    
|    
|    
|    
|     | Income tax expense (benefit)        |          |   | 2,672      |  |       |   | (1,238 | ) |  |   | 1,434   | 
|    
|    
|    
|    
|     | Net income (loss)                   |          |   | 8,875      |  |       |   | (4,111 | ) |  |   | 4,764   | 
|    
|    
|    
|    
|     | Segment assets                      |          |   | 24,070     |  |       |   | 31,098 |   |  |   | 55,168  | 
|    
|    
|    
|    
|     | Expenditures for property           |          |   | 1,691      |  |       |   | 15,240 |   |  |   | 16,931  | 
|    
|    
|    
|    
|2000 |                                     |          |   |            |  |       |   |        |   |  |   |        
|    
|    
|    
|    
|     | Net revenue from external customers |          | $ | 149,385    |  |       | $ | 1,008  |   |  | $ | 150,393 | 
|    
|    
|    
|    
|     | Intersegment revenues               |          |   |           |  |       |   |       |   |  |   |        | 
|     |                                     |          |   |            |  |       |   |        |   |  |   |        
|     | Total revenues                      |          | $ | 149,385    |  |       | $ | 1,008  |   |  | $ | 150,393 | 
|     |                                     |          |   |            |  |       |   |        |   |  |   |        
|     | Depreciation and amortization       |          |   | 1,812      |  |       |   | 265    |   |  |   | 2,077   | 
|    
|    
|    
|    
|     | Interest income                     |          |   | 277        |  |       |   |       |   |  |   | 277     | 
|    
|    
|    
|    
|     | Interest expense                    |          |   | 10         |  |       |   |       |   |  |   | 10      | 
|    
|    
|    
|    
|     | Income tax expense (benefit)        |          |   | 7,580      |  |       |   | 11,857 |   |  |   | 19,437  | 
|    
|    
|    
|    
|     | Net income (loss)                   |          |   | 9,454      |  |       |   | 14,788 |   |  |   | 24,242  | 
|    
|    
|    
|    
|     | Segment assets                      |          |   | 108,655    |  |       |   | 1,390  |   |  |   | 110,045 | 
|    
|    
|    
|    
|     | Expenditures for property           |          |   | 3,774      |  |       |   | 96     |   |  |   | 3,780   | 

46



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

A reconciliation of the totals reported for the operating
segments to the applicable line items in the consolidated
financial statements is as follows (in thousands):

|         |                                      |      |   |        |   |      |   |        |   |  |   |         | 
|-------- | ------------------------------------ | ---- | - | ------ | - | ---- | - | ------ | - |  | - | ------- | 
|         |                                      | 1998 |   | 1999   |   | 2000
|         |                                      |      |   |        |   |     
|Revenues |                                      |      |   |        |   |      |   |        |   |  |   |        
|        
|        
|        
|        
|         | Revenues for reportable segments     |      | $ | 88,368 |   |      | $ | 76,061 |   |  | $ | 150,393 | 
|        
|        
|        
|        
|         | Eliminations                         |      |   | (1,180 | ) |      |   | (268   | ) |  |   |        | 
|         |                                      |      |   |        |   |      |   |        |   |  |   |        
|         | Total consolidated revenues          |      | $ | 87,188 |   |      | $ | 75,793 |   |  | $ | 150,393 | 
|         |                                      |      |   |        |   |      |   |        |   |  |   |        
|Assets   |                                      |      |   |        |   |      |   |        |   |  |   |        
|        
|        
|        
|        
|         | Total assets for reportable segments |      | $ | 45,149 |   |      | $ | 55,168 |   |  |   | 110,045 | 
|        
|        
|        
|        
|         | Unallocated corporate assets         |      |   | 39,055 |   |      |   | 27,700 |   |  |   |        | 
|         |                                      |      |   |        |   |      |   |        |   |  |   |        
|         | Total consolidated assets            |      | $ | 84,204 |   |      | $ | 82,868 |   |  | $ | 110,045 | 
|         |                                      |      |   |        |   |      |   |        |   |  |   |        

|                        |                               |         |   |              |  |              |   |              |   |  |   |      |   |  |   |        |  
|----------------------- | ----------------------------- | ------- | - | ------------ |  | ------------ | - | ------------ | - |  | - | ---- | - |  | - | ------ | -
|                        |                               |         |   | Unallocated  |  |              |   |             
|                        |                               | Segment |   | Corporate    |  |              |   | Consolidated
|Other Significant Items |                               | Total   |   | Expenditures |  | Eliminations |   | Total       
|                        |                               |         |   |              |  |              |   |             
|1998                    |                               |         |   |              |  |              |   |              |   |  |   |      |   |  |   |       
|                       
|                       
|                       
|                       
|                        | Depreciation and amortization |         | $ | 1,636        |  |              | $ | 773          |   |  | $ |     |   |  | $ | 2,409  |  
|                       
|                       
|                       
|                       
|                        | Interest income               |         |   | 338          |  |              |   | 560          |   |  |   |     |   |  |   | 898    |  
|                       
|                       
|                       
|                       
|                        | Interest expense              |         |   |             |  |              |   | 2,295        |   |  |   |     |   |  |   | 2,295  |  
|                       
|                       
|                       
|                       
|                        | Income taxes                  |         |   | 2,669        |  |              |   | (7,089       | ) |  |   | (141 | ) |  |   | (4,561 | )
|                       
|                       
|                       
|                       
|                        | Expenditures for property     |         |   | 15,617       |  |              |   | 1,118        |   |  |   |     |   |  |   | 16,735 |  
|                       
|                       
|                       
|                       
|1999                    |                               |         |   |              |  |              |   |              |   |  |   |      |   |  |   |       
|                       
|                       
|                       
|                       
|                        | Depreciation and amortization |         | $ | 2,332        |  |              | $ | 1,296        |   |  | $ |     |   |  | $ | 3,628  |  
|                       
|                       
|                       
|                       
|                        | Interest income               |         |   | 192          |  |              |   | 135          |   |  |   |     |   |  |   | 327    |  
|                       
|                       
|                       
|                       
|                        | Interest expense              |         |   | 9            |  |              |   | 2,145        |   |  |   |     |   |  |   | 2,154  |  
|                       
|                       
|                       
|                       
|                        | Income taxes                  |         |   | 1,434        |  |              |   | (4,111       | ) |  |   |     |   |  |   | (2,677 | )
|                       
|                       
|                       
|                       
|                        | Expenditures for property     |         |   | 16,931       |  |              |   | 169          |   |  |   |     |   |  |   | 17,100 |  
|                       
|                       
|                       
|                       
|2000                    |                               |         |   |              |  |              |   |              |   |  |   |      |   |  |   |       
|                       
|                       
|                       
|                       
|                        | Depreciation and amortization |         | $ | 2,077        |  |              | $ | 822          |   |  |   |     |   |  | $ | 2,899  |  
|                       
|                       
|                       
|                       
|                        | Interest income               |         |   | 277          |  |              |   | 1,674        |   |  |   |     |   |  |   | 1,951  |  
|                       
|                       
|                       
|                       
|                        | Interest expense              |         |   | 10           |  |              |   | 253          |   |  |   |     |   |  |   | 263    |  
|                       
|                       
|                       
|                       
|                        | Income taxes                  |         |   | 19,437       |  |              |   | (2,906       | ) |  |   |     |   |  |   | 16,531 |  
|                       
|                       
|                       
|                       
|                        | Expenditures for property     |         |   | 3,780        |  |              |   |             |   |  |   |     |   |  |   | 3,780  |  

47



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Information concerning principal geographic areas was as follows
(in thousands):

|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |       |       | 
|---------------------------- | ------------------- | -------- | ------ | -------- | ------ | -------- | ------ | -------- | ------ | -------- | ------ | -------- | ------ |  | ------ | ------ | ------ |  | ------- | ------- | ------- |  | ----- | ----- | ----- | 
|                             |                     |          |        |          |        |         
|                             |                     | 1998     |        | 1999     |        | 2000    
|                             |                     |          |        |          |        |         
|                             |                     |          |        | Net      |        |          |        | Net      |        |          |        | Net     
|                             |                     | Revenues |        | Property |        | Revenues |        | Property |        | Revenues |        | Property
|                             |                     |          |        |          |        |          |        |          |        |          |        |         
|North America                |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|                            
|                            
|                            
|                            
|                             | United States       |          | $      | 47,065   |        |          | $      | 21,721   |        |          | $      | 40,370   |        |  | $      | 35,353 |        |  | $       | 106,406 |         |  | $     | 4,215 |      
|                            
|                            
|                            
|                            
|                             | Canada and Mexico   |          |        | 3,492    |        |          |        |         |        |          |        | 1,654    |        |  |        |       |        |  |         | 375     |         |  |       |      |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Total North America          |                     |          | 50,557 |          |        |          | 21,721 |          |        |          | 42,024 |          |        |  | 35,353 |        |        |  | 106,781 |         |         |  | 4,215 |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Europe                       |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|                            
|                            
|                            
|                            
|                             | United Kingdom      |          |        | 825      |        |          |        | 3        |        |          |        | 1,476    |        |  |        | 1,896  |        |  |         | 3,859   |         |  |       | 914   |      
|                            
|                            
|                            
|                            
|                             | Belgium             |          |        | 3,384    |        |          |        |         |        |          |        | 4,261    |        |  |        |       |        |  |         | 1,780   |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Netherlands         |          |        | 7,113    |        |          |        |         |        |          |        | 8,718    |        |  |        |       |        |  |         | 10,213  |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Italy               |          |        |         |        |          |        |         |        |          |        | 2,766    |        |  |        |       |        |  |         | 2,275   |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Other               |          |        | 2,487    |        |          |        | 1        |        |          |        | 2,161    |        |  |        | 15     |        |  |         | 2,177   |         |  |       | 4     |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Total Europe                 |                     |          | 13,809 |          |        |          | 4      |          |        |          | 19,382 |          |        |  | 1,911  |        |        |  | 20,304  |         |         |  | 918   |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Middle East and Africa       |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|                            
|                            
|                            
|                            
|                             | Egypt               |          |        |         |        |          |        |         |        |          |        | 3,655    |        |  |        | 182    |        |  |         | 15,321  |         |  |       | 198   |      
|                            
|                            
|                            
|                            
|                             | Other               |          |        |         |        |          |        |         |        |          |        |         |        |  |        |       |        |  |         | 290     |         |  |       |      |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Total Middle East and Africa |                     |          |       |          |        |          |       |          |        |          | 3,655  |          |        |  | 182    |        |        |  | 15,611  |         |         |  | 198   |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Latin America                |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|                            
|                            
|                            
|                            
|                             | Brazil              |          |        | 14,516   |        |          |        | 407      |        |          |        | 6,685    |        |  |        | 316    |        |  |         | 4,230   |         |  |       | 307   |      
|                            
|                            
|                            
|                            
|                             | Argentina           |          |        | 836      |        |          |        |         |        |          |        | 120      |        |  |        |       |        |  |         | 209     |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Other Latin America |          |        | 326      |        |          |        |         |        |          |        | 522      |        |  |        |       |        |  |         | 470     |         |  |       |      |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Total Latin America          |                     |          | 15,678 |          |        |          | 407    |          |        |          | 7,327  |          |        |  | 316    |        |        |  | 4,909   |         |         |  | 307   |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Asia-Pacific                 |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|                            
|                            
|                            
|                            
|                             | Malaysia            |          |        | 4,036    |        |          |        |         |        |          |        | 289      |        |  |        |       |        |  |         |        |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Korea               |          |        | 650      |        |          |        |         |        |          |        | 78       |        |  |        |       |        |  |         | 642     |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | China               |          |        |         |        |          |        |         |        |          |        | 405      |        |  |        |       |        |  |         |        |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Philippines         |          |        | 885      |        |          |        |         |        |          |        | 1,369    |        |  |        |       |        |  |         | 114     |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Australia           |          |        |         |        |          |        |         |        |          |        | 683      |        |  |        |       |        |  |         | 1,552   |         |  |       |      |      
|                            
|                            
|                            
|                            
|                             | Other               |          |        | 1,422    |        |          |        |         |        |          |        | 581      |        |  |        |       |        |  |         | 480     |         |  |       |      |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|Total Asia-Pacific           |                     |          | 6,993  |          |        |          |       |          |        |          | 3,405  |          |        |  |       |        |        |  | 2,788   |         |         |  |      |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|All other                    |                     |          | 151    |          |        |          |       |          |        |          |       |          |        |  |       |        |        |  |        |         |         |  |      |      
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      
|                             |                     | Total    |        | $        | 87,188 |          |        | $        | 22,132 |          |        | $        | 75,793 |  |        | $      | 37,762 |  |         | $       | 150,393 |  |       | $     | 5,638 | 
|                             |                     |          |        |          |        |          |        |          |        |          |        |          |        |  |        |        |        |  |         |         |         |  |       |      

48



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(19)  Quarterly Data (Unaudited)

|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |      | 
|----------------------------------------------------------------- | ------- | ---------------------------------------- | ------ | ------- | - | ------- | ------ | ------- | - | - | ------ | ----- | - | - | ------ | ---- | 
|                                                                  |         |                                         
|                                                                  |         | 1999                                    
|                                                                  |         |                                         
|                                                                  |         | 1st                                      |        | 2nd     |   | 3rd     |        | 4th    
|                                                                  |         | Quarter                                  |        | Quarter |   | Quarter |        | Quarter
|                                                                  |         |                                          |        |         |   |         |        |        
|                                                                  |         |                                         
|                                                                  |         | (In thousands, except per share amounts)
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Revenues                                                          |         | $                                        | 17,673 |         |   | $       | 16,131 |         |   | $ | 18,242 |       |   | $ | 23,747 |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Operating income (loss)                                           |         |                                          | (338   | )       |   |         | (4,182 | )       |   |   | (1,385 | )     |   |   | 234    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Income (loss) from continuing operations before income taxes      |         |                                          | (2,218 | )       |   |         | (5,021 | )       |   |   | (1,660 | )     |   |   | 10     |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Income (loss) from continuing operations                          |         |                                          | (1,892 | )       |   |         | (3,167 | )       |   |   | (1,160 | )     |   |   | 7      |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Gain on disposal of discontinued operations, net of tax provision |         |                                          |       |         |   |         |       |         |   |   |       |       |   |   | 803    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Net income (loss)                                                 |         |                                          | (1,892 | )       |   |         | (3,167 | )       |   |   | (1,160 | )     |   |   | 810    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Income (loss) per share:                                          |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Continuing operations:                                            |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Basic   |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      |     | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                  | Diluted |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      |     | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|Discontinued operations:                                          |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Basic   |                                          | $      |        |   |         | $      |        |   |   | $      |      |   |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                  | Diluted |                                          | $      |        |   |         | $      |        |   |   | $      |      |   |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|Net income (loss) per share:                                      |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Basic   |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                  | Diluted |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     

|                                           |         |                                          |        |         |  |         |        |         |  |   |        |      |  |   |        |      | 
|------------------------------------------ | ------- | ---------------------------------------- | ------ | ------- |  | ------- | ------ | ------- |  | - | ------ | ---- |  | - | ------ | ---- | 
|                                           |         |                                         
|                                           |         | 2000                                    
|                                           |         |                                         
|                                           |         | 1st                                      |        | 2nd     |  | 3rd     |        | 4th    
|                                           |         | Quarter                                  |        | Quarter |  | Quarter |        | Quarter
|                                           |         |                                          |        |         |  |         |        |        
|                                           |         |                                         
|                                           |         | (In thousands, except per share amounts)
|                                          
|                                          
|                                          
|                                          
|Revenues                                   |         | $                                        | 30,146 |         |  | $       | 34,284 |         |  | $ | 40,937 |      |  | $ | 45,026 |     
|                                          
|                                          
|                                          
|                                          
|Operating income                           |         |                                          | 22,510 |         |  |         | 5,870  |         |  |   | 4,083  |      |  |   | 3,785  |     
|                                          
|                                          
|                                          
|                                          
|Income from operations before income taxes |         |                                          | 22,118 |         |  |         | 6,262  |         |  |   | 4,413  |      |  |   | 4,356  |     
|                                          
|                                          
|                                          
|                                          
|Net income                                 |         |                                          | 12,828 |         |  |         | 3,632  |         |  |   | 1,904  |      |  |   | 2,254  |     
|                                          
|                                          
|                                          
|                                          
|Net income per share:                      |         |                                          |        |         |  |         |        |         |  |   |        |      |  |   |        |     
|                                          
|                                          
|                                          
|                                          
|                                           | Basic   |                                          | $      | 0.64    |  |         | $      | 0.18    |  |   | $      | 0.09 |  |   | $      | 0.11 | 
|                                           |         |                                          |        |         |  |         |        |         |  |   |        |      |  |   |        |     
|                                           | Diluted |                                          | $      | 0.57    |  |         | $      | 0.16    |  |   | $      | 0.09 |  |   | $      | 0.11 | 
|                                           |         |                                          |        |         |  |         |        |         |  |   |        |      |  |   |        |     

All periods presented have been restated to reflect the hardware
and software businesses as discontinued operations (see
note 3).

During the first quarter of 2000 the Company had a gain from the
sale of tower portfolio of $21.2 million. (See note 4).

With respect to the fourth quarter of 2000, the Company
evaluated certain employment related tax accruals recorded in
prior years. This evaluation included the effect of systems and
procedures implemented by the Company, as well as, assumed
reductions in exposure due to changed circumstances and the
passage of time. As a result, the Company reduced Cost of
revenues  service by $1.6 million and increased net
income by $1.0 million.

With respect to the fourth quarter of 2000, the Company
evaluated certain of its fixed priced contracts based upon
individual contract costs incurred to date compared with total
estimated costs in accordance with the Companys revenue
recognition accounting policy for long-term fixed price
contracts. As a result, the Company determined an increase in
estimated cost has occurred in the fourth quarter and has
recorded an

49



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

increase in Cost of revenues  service of
$0.8 million and reduced net income by $0.5 million.
Additionally, the Company recorded an allowance against revenue
and accounts receivable of $0.5 million and reduced net
income by $0.3 million due to the increase in its accounts
receivable balance related to certain system deployment
contracts.

(20)  Fair Value of Financial Instruments

The following table presents the carrying amount and estimated
fair value of the Companys financial instruments in
accordance with SFAS No. 107, Disclosure about Fair
Value of Financial Instruments.

|                      |                                   |                |  |                |  |          |  |                |  |  |  |       |  |  |  |       | 
|--------------------- | --------------------------------- | -------------- |  | -------------- |  | -------- |  | -------------- |  |  |  | ----- |  |  |  | ----- | 
|                      |                                   |                |  |               
|                      |                                   | 1999           |  | 2000          
|                      |                                   |                |  |               
|                      |                                   | Carrying       |  | Estimated Fair |  | Carrying |  | Estimated Fair
|                      |                                   | Amount         |  | Value          |  | Amount   |  | Value         
|                      |                                   |                |  |                |  |          |  |               
|                      |                                   |               
|                      |                                   | (In thousands)
|                     
|                     
|                     
|                     
|Shareholders Equity: |                                   |                |  |                |  |          |  |                |  |  |  |       |  |  |  |      
|                     
|                     
|                     
|                     
|                      | Notes receivable from shareholder |                |  | 3,025          |  |          |  | 3,025          |  |  |  | 2,325 |  |  |  | 2,325 | 

The carrying amounts of financial instruments, including cash
and cash equivalents, accounts receivable, and accounts payable,
approximated fair value as of December 31, 1999 and 2000
because of the relatively short duration of these instruments.

Notes receivable from shareholders   the
carrying value of the notes receivable approximated the fair
value as the instruments included a market rate of interest.

Financial guarantees are conditional commitments issued by the
Company to guarantee the payment of certain liabilities of
unconsolidated affiliates. No such guarantees were outstanding
at December 31, 1999 or 2000.

(21)  Subsequent Events

On March 28, 2001, the United States Bankruptcy Court,
District of Maryland, Northern Division, entered an order
confirming the Amended Joint Plan of Reorganization Under
Chapter 11 (the Plan) for Pocket
Communications, Inc. (Pocket) and DCR PCS, Inc.
(DCR). The Plan provides that LCCs claim
against DCR will be allowed in the amount of $5.0 million, which
is to be paid in full in cash on or before March 30, 2001,
or as soon as practicable thereafter in accordance with the
Plan. The Plan also provides that LCCs general unsecured
claim against Pocket will be allowed in the amount filed minus
$5.0 million, or approximately $12.4 million, which is to be
paid at the same percentage recovery received by the Pocket
general unsecured creditors as a class (excluding certain
creditors which also hold secured claims under the Plan and who
have agreed to forgo recovery on the first $5.8 million in
available funds) after the resolution of certain remaining
disputed claims and the calculation of administrative fees and
expenses of the estate. Based on the estimates of the Official
Committee of Unsecured Creditors, there is a potential of
recovery on the Pocket general unsecured claims of 10% to 16% of
the allowed amount.

On March 15, 2001, the Company received payment of $2.1
million, net of taxes withheld at source of $0.4 million, as
complete settlement relative to receivable balances the Company
took a charge in 1997 from a client in Malaysia who successfully
emerged from bankruptcy.

50



---



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

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

None.

PART III

Item 10.  Directors and Executive Officers
of the Registrant

Reference is made to the information set forth under the caption
Election of Directors appearing in the Proxy
Statement to be filed within 120 days after the end of the
Companys fiscal year, which information is incorporated
herein by reference.

Item 11.  Executive Compensation

Reference is made to the information set forth under the caption
Election of Directors  Executive
Compensation appearing in the Proxy Statement to be filed
within 120 days after the end of the Companys fiscal
year, which information is incorporated herein by reference.

Item 12.  Security Ownership of Certain
Beneficial Owners and Management

Reference is made to the information set forth under the caption
Beneficial Ownership of Common Stock appearing in
the Proxy Statement to be filed within 120 days after the
end of the Companys fiscal year, which information is
incorporated herein by reference.

Item 13.  Certain Relationships and Related
Transactions

Reference is made to the information set forth under the caption
Election of Directors  Compensation Committee
Interlocks and Insider Participation and Election of
Directors  Certain Relationships and Related
Transactions appearing in the Proxy Statement to be filed
within 120 days after the end of the Companys fiscal
year, which information is incorporated herein by reference.

PART IV

Item 14.  Exhibits, Financial Statement
Schedules, and Reports on Form 8-K



| |        |                                                                                                                                                       
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)(1) | The following consolidated financial statements of registrant
	and its subsidiaries and report of independent auditors are
	included in item 8 hereof.

Report of
Independent Auditors.



| |  |                                                                                                  
| |  | -------------------------------------------------------------------------------------------------
| |  | Consolidated Statements of Operations  Years Ended
	December 31, 1998, 1999, and 2000.          
|
| |  | Consolidated Balance Sheets as of December 31, 1999 and
	2000.                                   
|
| |  | Consolidated Statements of Shareholders Equity 
	Years Ended December 31, 1998, 1999, and 2000.
|
| |  | Consolidated Statements of Cash Flows  Years Ended
	December 31, 1998, 1999, and 2000.          

Notes to
Consolidated Financial Statements.



| |        |                                                                                                                                                                                                                                                                                                                                        
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)(2) | Except as provided below, all schedules for which provision is
	made in the applicable accounting regulations of the Securities
	and Exchange Commission either have been included in the
	Consolidated Financial Statements or are not required under the
	related instructions, or are inapplicable and therefore have
	been omitted.

Schedule II  Valuation and Qualifying Accounts

51



---





| |        |                                                                                                      
| | ------ | -----------------------------------------------------------------------------------------------------
| | (a)(3) | The following exhibits are either provided with this Report or
	are incorporated herein by reference:

|        |       |  |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | ----- |  |  | ------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |  |  |                    
|Number  |       |  |  | Exhibit Description
|        |       |  |  |                    
|        | 3.1   |  |  |                    |  | Restated Certificate of Incorporation of the Company.*                                                                                                                                                                                                                                                                                                                                                            
|        | 3.2   |  |  |                    |  | Amended and Restated Bylaws of the Company.*                                                                                                                                                                                                                                                                                                                                                                      
|        | 4.1   |  |  |                    |  | Form of Class A and Class B Common Stock certificates.*                                                                                                                                                                                                                                                                                                                                                           
|        | 4.2   |  |  |                    |  | LCC International, Inc. 1996 Directors Stock Option Plan.*                                                                                                                                                                                                                                                                                                                                                        
|        | 4.3   |  |  |                    |  | Amendment to LCC International, Inc. 1996 Directors Stock Option
	Plan, dated April 22, 1997.******                                                                                                                                                                                                                                                                                                               
|        | 4.4   |  |  |                    |  | Amendment to LCC International, Inc. 1996 Directors Stock Option
	Plan, dated April 16, 1998.******                                                                                                                                                                                                                                                                                                               
|        | 4.5   |  |  |                    |  | Amendment to LCC International, Inc. 1996 Directors Stock Option
	Plan, dated January 30, 2001.                                                                                                                                                                                                                                                                                                                   
|        | 4.6   |  |  |                    |  | Amended and Restated LCC International, Inc. 1996 Employee Stock
	Option Plan, dated February 1, 2000.                                                                                                                                                                                                                                                                                                            
|        | 4.7   |  |  |                    |  | LCC International, Inc. 1996 Employee Stock Purchase Plan, as
	amended May 25, 1999.                                                                                                                                                                                                                                                                                                                              
|        | 10.1  |  |  |                    |  | 1994 LCC, L.L.C. Incentive Compensation Plan.*                                                                                                                                                                                                                                                                                                                                                                    
|        | 10.2  |  |  |                    |  | Amended and Restated Service Agreement, dated as of
	October  1, 1996, by and between TSI, a division of LCC
	International, Inc., and Nextel Communications, Inc.**                                                                                                                                                                                                                                              
|        | 10.3  |  |  |                    |  | Amended and Restated Shareholders Rights Agreement dated
	February   , 1996 between NextWave Telecom Inc.
	and LCC, L.L.C.*                                                                                                                                                                                                                                                                                      
|        | 10.4  |  |  |                    |  | Subscription Agreement dated March 12, 1996 between
	NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                      
|        | 10.5  |  |  |                    |  | Convertible Loan and Investment Agreement dated March 20,
	1996 by and between LCC, L.L.C. and DCR Communications, Inc.*                                                                                                                                                                                                                                                                                          
|        | 10.6  |  |  |                    |  | 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.*                                                                                                                                                                                                                                           
|        | 10.7  |  |  |                    |  | Agreement dated May 17, 1996, between LCC, L.L.C. and
	West*Park Associates Limited Partnership for office space at
	7927 Jones Branch Drive, McLean, Virginia, 22102.*                                                                                                                                                                                                                                           
|        | 10.8  |  |  |                    |  | Letter Agreement dated May 31, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                                                                                                                                                                           
|        | 10.9  |  |  |                    |  | Letter Agreement dated February 22, 1999, between LCC
	International, Inc. and Terri Feely.                                                                                                                                                                                                                                                                                                                       
|        | 10.10 |  |  |                    |  | Letter Agreement dated May 26, 1999, between LCC
	International, Inc. and David Walker.                                                                                                                                                                                                                                                                                                                           
|        | 10.11 |  |  |                    |  | Letter Agreement dated May 31, 1996 between LCC
	International, Inc. and Michael McNelly.                                                                                                                                                                                                                                                                                                                         
|        | 10.12 |  |  |                    |  | Service Agreement, dated January 1, 1999, between LCC
	International, Inc. and Peter Zaugg.                                                                                                                                                                                                                                                                                                                       
|        | 10.13 |  |  |                    |  | Employment Agreement, dated May 24, 1999, between LCC
	International, Inc. and C. Thomas Faulders, III.***                                                                                                                                                                                                                                                                                                        
|        | 10.14 |  |  |                    |  | Letter dated January 11, 2001, from LCC International, Inc.
	to Susan Mayer.                                                                                                                                                                                                                                                                                                                                      
|        | 10.15 |  |  |                    |  | Intercompany Agreement dated as of August 27, 1996 among
	Telcom Ventures, L.L.C., LCC, L.L.C., LCC International, Inc.,
	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.*
|        | 10.16 |  |  |                    |  | Registration Rights Agreement dated July 25, 1996 among LCC
	International, Inc., RF Investors, L.L.C. and MCI
	Telecommunications Corporation.*                                                                                                                                                                                                                                                                  

52



---



|        |        |  |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | ------ |  |  | ------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  |                    
|Number  |        |  |  | Exhibit Description
|        |        |  |  |                    
|        | 10.17  |  |  |                    |  | Form of Indemnity Agreement between LCC International, Inc. and
	each of Rajendra Singh, Neera Singh, Piyush Sodha, Mark D. Ein,
	Arno A. Penzias, Geoffrey S. Carroll, Steven J.
	Gilbert, J. Michael Bonin, Kathryn M. Condello,
	Peter A. Deliso, Richard Hozik, Frank F. Navarrete,
	Donald R. Rose, Gerard L. Vincent, Louis R.
	Olsen, Stuart P. Lawson, Michael S. McNelly, C.
	Thomas Faulders, III, David N. Walker, Gregory S. Ledford
	and Susan Mayer.*
|        | 10.18  |  |  |                    |  | Overhead and Administrative Services Agreement dated
	August  27, 1996 between LCC International, Inc. and Telcom
	Ventures, L.L.C.*                                                                                                                                                                                                                                                                                                                               
|        | 10.19  |  |  |                    |  | Agreement of Merger dated September 15, 1996 between LCC,
	L.L.C. and LCC International, Inc.*                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.20  |  |  |                    |  | Form of LCC International, Inc. Directors Stock Option Plan
	stock option agreement for directors who will receive Class B
	Common Stock.*                                                                                                                                                                                                                                                                                                                         
|        | 10.21  |  |  |                    |  | Form of Promissory Note by Telcom Ventures, L.L.C. to LCC
	International, Inc.*                                                                                                                                                                                                                                                                                                                                                                                    
|        | 10.22  |  |  |                    |  | Form of Stock Option Agreement between LCC International, Inc.
	and the Carlyle Option Designees.*                                                                                                                                                                                                                                                                                                                                                                 
|        | 10.23  |  |  |                    |  | Form of LCC International, Inc. 1996 Employee Stock Option Plan
	incentive stock option agreement.*                                                                                                                                                                                                                                                                                                                                                                
|        | 10.24  |  |  |                    |  | Form of LCC International, Inc. 1996 Employee Stock Option Plan
	non-incentive stock option agreement.*                                                                                                                                                                                                                                                                                                                                                            
|        | 10.25  |  |  |                    |  | Form of LCC International, Inc. 1996 Employee Stock Option Plan
	non-incentive stock option agreement (for employees who had been
	eligible to participate in the LCC, L.L.C. 1994 Phantom
	Membership Plan or the LCC, L.L.C. 1996 Employee Option Plan).*                                                                                                                                                                                                        
|        | 10.26  |  |  |                    |  | Form of LCC International, Inc. 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).                                                                                                                                                                                                                                                          
|        | 10.27  |  |  |                    |  | Form of LCC International, Inc. Directors Stock Option Plan
	stock option agreement for directors who will receive Class A
	Common Stock (other than Mark D. Ein).*                                                                                                                                                                                                                                                                                                
|        | 10.28  |  |  |                    |  | Form of LCC International, Inc. Directors Stock Option Plan
	stock option agreement for Mark D. Ein.*                                                                                                                                                                                                                                                                                                                                                              
|        | 10.29  |  |  |                    |  | Form of Phantom Membership Plan Exchange Agreement.*                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 10.30  |  |  |                    |  | Letter Agreement dated August 22, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                                                                                                                                                                                                                         
|        | 10.31  |  |  |                    |  | Series D Convertible Debenture Due March 27, 2001 by
	DCR Communications, Inc. dated March 27, 1996.*                                                                                                                                                                                                                                                                                                                                                              
|        | 10.32  |  |  |                    |  | Series D Convertible Debenture Due May 10, 2001 by DCR
	Communications, Inc. dated May 10, 1996.*                                                                                                                                                                                                                                                                                                                                                                  
|        | 10.33 |  |  |                    |  | Contract for Engineering and Construction of Terrestrial
	Repeater Network System between XM Satellite Radio Inc. and LCC
	International, Inc. dated August 18, 1999.*****                                                                                                                                                                                                                                                                                         
|        | 10.34 |  |  |                    |  | Amendment No. 6 to the Terrestrial Repeater Network System
	Contract between XM Satellite Radio Inc. and LCC International,
	Inc. dated January 8, 2001.                                                                                                                                                                                                                                                                                                           
|        | 10.35  |  |  |                    |  | Ericsson Radio Systems AB Asset Purchase Agreement dated dated
	August 25, 1999.****                                                                                                                                                                                                                                                                                                                                                                               
|        | 10.36  |  |  |                    |  | Letter, dated October 22, 1999, among LCC International,
	Inc., LCC Europe AS and Ericsson Radio Systems AB.****                                                                                                                                                                                                                                                                                                                                                   
|        | 10.37  |  |  |                    |  | Asset Purchase Agreement between Pinnacle Towers Inc. and
	Microcell Management, Inc. dated February 24, 2000.*******                                                                                                                                                                                                                                                                                                                                              
|        | 10.38  |  |  |                    |  | Amendment No. 1 to Asset Purchase Agreement between
	Pinnacle Towers Inc. and Microcell Management Inc., dated
	March 2, 2000.*******                                                                                                                                                                                                                                                                                                                              

53



---



|        |       |  |  |                     |  |                                                                                                                       
|------- | ----- |  |  | ------------------- |  | ----------------------------------------------------------------------------------------------------------------------
|Exhibit |       |  |  |                    
|Number  |       |  |  | Exhibit Description
|        |       |  |  |                    
|        | 10.39 |  |  |                    |  | Master Antenna Site Lease between Pinnacle Towers Inc. and
	Microcell Management, Inc. dated February 24, 2000.*******
|        | 21    |  |  |                    |  | Subsidiaries of the Company.                                                                                          
|        | 23.1  |  |  |                    |  | Consent of KPMG LLP.                                                                                                  



---

|        |                                                                                                                                                                             
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*       | Incorporated by reference to the Exhibits on the Companys
	Registration Statement on Form S-1 (Registration No. 
	333-6067).                                               
|       
|**      | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on April 15, 1997.      
|       
|***     | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on May 27, 1999.        
|       
|****    | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on November 8, 1999.    
|       
|*****   | Incorporated by reference to the Exhibits to the Companys
	Quarterly Report on Form 10-Q which was filed with the
	Securities and Exchange Commission on November 12, 1999.
|       
|******  | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on March 30, 1999.      
|       
|******* | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on March 20, 2000.      



|  |                                                                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Confidential treatment has been granted for certain portions of
	this document. The copy filed as an exhibit omits the
	information subject to the confidential treatment request.  
| 
| | Confidential treatment has been requested for certain portions
	of this document. The copy filed as an exhibit omits the
	information subject to the confidential treatment request.

(b)  Reports on Form 8-K.

On February 5, 2001, the Company filed a Current Report on
Form 8-K, which reported that on February 5, 2001, the
Company issued a press release announcing it fourth quarter and
year ended revenues and operating results.

On January 16, 2001, the Company filed a Current Report on
Form 8-K, which reported that on January 16, 2001, the
Company issued a press release announcing certain modifications
to the terms of a contract, dated August 18, 1999, with XM
Satellite Radio Inc. (XM) for the design and
deployment of XMs terrestrial repeater network. On
November 1, 2000, the Company filed a Current Report on
Form 8-K, which reported that on November 1, 2000 the
Company issued a press release announcing its third quarter
revenue and operating results.

(c)  Exhibits to this Form 10-K are attached or
incorporated by reference as stated above.

(d)  None.

54



---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized as of the 31st day of March, 2001.

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



| |     |                            
| | --- | ---------------------------
| | By: | /s/ C. THOMAS FAULDERS, III

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

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated and
on the dates indicated.

|                                                   |  |                                                                        |  |               
|-------------------------------------------------- |  | ---------------------------------------------------------------------- |  | --------------
|Signatures                                         |  | Title                                                                  |  | Date          
|                                                   |  |                                                                        |  |               
|/s/ C. THOMAS FAULDERS, IIIC. Thomas Faulders, III |  | Chief Executive Officer and Chairperson of the   Board
	of Directors   |  | March 31, 2001
|                                                  
|/s/ DAVID N. WALKERDavid N. Walker                 |  | Treasurer and Chief Financial Officer   (Principal
	Financial Officer) |  | March 31, 2001
|/s/ MARK D. EINMark D. Ein                         |  | Director                                                               |  | March 28, 2001
|/s/ STEVEN GILBERTSteven Gilbert                   |  | Director                                                               |  | March 23, 2001
|/s/ SUSAN MAYERSusan Mayer                         |  | Director                                                               |  | March 27, 2001
|Gregory Ledford                                    |  | Director                                                               |  | March   , 2001
|/s/ ARNO PENZIASArno Penzias                       |  | Director                                                               |  | March 23, 2001
|/s/ NEERA SINGHNeera Singh                         |  | Director                                                               |  | March 31, 2001
|/s/ RAJENDRA SINGHRajendra Singh                   |  | Director                                                               |  | March 31, 2001

55



---



SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(In Thousands)


|                             |                                 |                     |  |                    |  |                |  |               |   |               |  |     |  |  |  |       |  |  |  |        | 
|---------------------------- | ------------------------------- | ------------------- |  | ------------------ |  | -------------- |  | ------------- | - | ------------- |  | --- |  |  |  | ----- |  |  |  | ------ | 
|                             |                                 |                     |  |                    |  |                |  |              
|                             |                                 |                     |  | Column C           |  |                |  |              
|                             |                                 |                     |  |                    |  |                |  |              
|                             |                                 |                     |  |                    |  |                |  |              
|Column A                     |                                 | Column B            |  | Additions          |  | Column D       |  | Column E     
|                             |                                 |                     |  |                    |  |                |  |              
|                             |                                 | Balance at          |  | Charged to         |  | Charges to     |  |               |   | Balance at   
|Description                  |                                 | Beginning of period |  | costs and expenses |  | other accounts |  | Deductions(1) |   | end of period
|                             |                                 |                     |  |                    |  |                |  |               |   |              
|Year ended December 31, 1998 |                                 |                     |  |                    |  |                |  |               |   |               |  |     |  |  |  |       |  |  |  |       
|                            
|                            
|                            
|                            
|                             | Allowance for doubtful accounts |                     |  | 11,929             |  |                |  | 2,047         |   |               |  |    |  |  |  | 3,523 |  |  |  | 10,453 | 
|Year ended December 31, 1999 |                                 |                     |  |                    |  |                |  |               |   |               |  |     |  |  |  |       |  |  |  |       
|                            
|                            
|                            
|                            
|                             | Allowance for doubtful accounts |                     |  | 10,453             |  |                |  |              |   |               |  | 850 |  |  |  | 3,443 |  |  |  | 7,860  | 
|Year ended December 31, 2000 |                                 |                     |  |                    |  |                |  |               |   |               |  |     |  |  |  |       |  |  |  |       
|                            
|                            
|                            
|                            
|                             | Allowance for doubtful accounts |                     |  | 7,860              |  |                |  | (306          | ) |               |  | 81  |  |  |  | 5,806 |  |  |  | 1,829  | 




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

56



---



EXHIBIT INDEX

|        |       |  |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | ----- |  |  | ------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |  |  |                    
|Number  |       |  |  | Exhibit Description
|        |       |  |  |                    
|        | 3.1   |  |  |                    |  | Restated Certificate of Incorporation of the Company.*                                                                                                                                                                                                                                                                                                                                                            
|        | 3.2   |  |  |                    |  | Amended and Restated Bylaws of the Company.*                                                                                                                                                                                                                                                                                                                                                                      
|        | 4.1   |  |  |                    |  | Form of Class A and Class B Common Stock certificates.*                                                                                                                                                                                                                                                                                                                                                           
|        | 4.2   |  |  |                    |  | LCC International, Inc. 1996 Directors Stock Option Plan.*                                                                                                                                                                                                                                                                                                                                                        
|        | 4.3   |  |  |                    |  | Amendment to LCC International, Inc. 1996 Directors Stock Option
	Plan, dated April 22, 1997.******                                                                                                                                                                                                                                                                                                               
|        | 4.4   |  |  |                    |  | Amendment to LCC International, Inc. 1996 Directors Stock Option
	Plan, dated April 16, 1998.******                                                                                                                                                                                                                                                                                                               
|        | 4.5   |  |  |                    |  | Amendment to LCC International, Inc. 1996 Directors Stock Option
	Plan, dated January 30, 2001                                                                                                                                                                                                                                                                                                                    
|        | 4.6   |  |  |                    |  | Amended and Restated LCC International, Inc. 1996 Employee Stock
	Option Plan, dated February 1, 2000                                                                                                                                                                                                                                                                                                             
|        | 4.7   |  |  |                    |  | LCC International, Inc. 1996 Employee Stock Purchase Plan, as
	amended May 25, 1999.                                                                                                                                                                                                                                                                                                                              
|        | 10.1  |  |  |                    |  | 1994 LCC, L.L.C. Incentive Compensation Plan.*                                                                                                                                                                                                                                                                                                                                                                    
|        | 10.2  |  |  |                    |  | Amended and Restated Service Agreement, dated as of
	October  1, 1996, by and between TSI, a division of LCC
	International, Inc., and Nextel Communications, Inc.**                                                                                                                                                                                                                                              
|        | 10.3  |  |  |                    |  | Amended and Restated Shareholders Rights Agreement dated
	February   , 1996 between NextWave Telecom Inc.
	and LCC, L.L.C.*                                                                                                                                                                                                                                                                                      
|        | 10.4  |  |  |                    |  | Subscription Agreement dated March 12, 1996 between
	NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                      
|        | 10.5  |  |  |                    |  | Convertible Loan and Investment Agreement dated March 20,
	1996 by and between LCC, L.L.C. and DCR Communications, Inc.*                                                                                                                                                                                                                                                                                          
|        | 10.6  |  |  |                    |  | 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.*                                                                                                                                                                                                                                           
|        | 10.7  |  |  |                    |  | Agreement dated May 17, 1996, between LCC, L.L.C. and
	West*Park Associates Limited Partnership for office space at
	7927 Jones Branch Drive, McLean, Virginia, 22102.*                                                                                                                                                                                                                                           
|        | 10.8  |  |  |                    |  | Letter Agreement dated May 31, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                                                                                                                                                                           
|        | 10.9  |  |  |                    |  | Letter Agreement dated February 22, 1999, between LCC
	International, Inc. and Terri Feely.                                                                                                                                                                                                                                                                                                                       
|        | 10.10 |  |  |                    |  | Letter Agreement dated May 26, 1999, between LCC
	International, Inc. and David Walker.                                                                                                                                                                                                                                                                                                                           
|        | 10.11 |  |  |                    |  | Letter Agreement dated May 31, 1996 between LCC
	International, Inc. and Michael McNelly.                                                                                                                                                                                                                                                                                                                         
|        | 10.12 |  |  |                    |  | Service Agreement, dated January 1, 1999, between LCC
	International, Inc. and Peter Zaugg.                                                                                                                                                                                                                                                                                                                       
|        | 10.13 |  |  |                    |  | Employment Agreement, dated May 24, 1999, between LCC
	International, Inc. and C. Thomas Faulders, III.***                                                                                                                                                                                                                                                                                                        
|        | 10.14 |  |  |                    |  | Letter dated January 11, 2001, from LCC International, Inc.
	to Susan Mayer.                                                                                                                                                                                                                                                                                                                                      
|        | 10.15 |  |  |                    |  | Intercompany Agreement dated as of August 27, 1996 among
	Telcom Ventures, L.L.C., LCC, L.L.C., LCC International, Inc.,
	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.*
|        | 10.16 |  |  |                    |  | Registration Rights Agreement dated July 25, 1996 among LCC
	International, Inc., RF Investors, L.L.C. and MCI
	Telecommunications Corporation.*                                                                                                                                                                                                                                                                  

57



---



|        |        |  |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | ------ |  |  | ------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  |                    
|Number  |        |  |  | Exhibit Description
|        |        |  |  |                    
|        | 10.17  |  |  |                    |  | Form of Indemnity Agreement between LCC International, Inc. and
	each of Rajendra Singh, Neera Singh, Piyush Sodha, Mark D. Ein,
	Arno A. Penzias, Geoffrey S. Carroll, Steven J.
	Gilbert, J. Michael Bonin, Kathryn M. Condello,
	Peter A. Deliso, Richard Hozik, Frank F. Navarrete,
	Donald R. Rose, Gerard L. Vincent, Louis R.
	Olsen, Stuart P. Lawson, Michael S. McNelly, C.
	Thomas Faulders, III, David N. Walker, Gregory S. Ledford
	and Susan Mayer.*
|        | 10.18  |  |  |                    |  | Overhead and Administrative Services Agreement dated
	August  27, 1996 between LCC International, Inc. and Telcom
	Ventures, L.L.C.*                                                                                                                                                                                                                                                                                                                               
|        | 10.19  |  |  |                    |  | Agreement of Merger dated September 15, 1996 between LCC,
	L.L.C. and LCC International, Inc.*                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.20  |  |  |                    |  | Form of LCC International, Inc. Directors Stock Option Plan
	stock option agreement for directors who will receive Class B
	Common Stock.*                                                                                                                                                                                                                                                                                                                         
|        | 10.21  |  |  |                    |  | Form of Promissory Note by Telcom Ventures, L.L.C. to LCC
	International, Inc.*                                                                                                                                                                                                                                                                                                                                                                                    
|        | 10.22  |  |  |                    |  | Form of Stock Option Agreement between LCC International, Inc.
	and the Carlyle Option Designees.*                                                                                                                                                                                                                                                                                                                                                                 
|        | 10.23  |  |  |                    |  | Form of LCC International, Inc. 1996 Employee Stock Option Plan
	incentive stock option agreement.*                                                                                                                                                                                                                                                                                                                                                                
|        | 10.24  |  |  |                    |  | Form of LCC International, Inc. 1996 Employee Stock Option Plan
	non-incentive stock option agreement.*                                                                                                                                                                                                                                                                                                                                                            
|        | 10.25  |  |  |                    |  | Form of LCC International, Inc. 1996 Employee Stock Option Plan
	non-incentive stock option agreement (for employees who had been
	eligible to participate in the LCC, L.L.C. 1994 Phantom
	Membership Plan or the LCC, L.L.C. 1996 Employee Option Plan).*                                                                                                                                                                                                        
|        | 10.26  |  |  |                    |  | Form of LCC International, Inc. 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).                                                                                                                                                                                                                                                          
|        | 10.27  |  |  |                    |  | Form of LCC International, Inc. Directors Stock Option Plan
	stock option agreement for directors who will receive Class A
	Common Stock (other than Mark D. Ein).*                                                                                                                                                                                                                                                                                                
|        | 10.28  |  |  |                    |  | Form of LCC International, Inc. Directors Stock Option Plan
	stock option agreement for Mark D. Ein.*                                                                                                                                                                                                                                                                                                                                                              
|        | 10.29  |  |  |                    |  | Form of Phantom Membership Plan Exchange Agreement.*                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 10.30  |  |  |                    |  | Letter Agreement dated August 22, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                                                                                                                                                                                                                         
|        | 10.31  |  |  |                    |  | Series D Convertible Debenture Due March 27, 2001 by
	DCR Communications, Inc. dated March 27, 1996.*                                                                                                                                                                                                                                                                                                                                                              
|        | 10.32  |  |  |                    |  | Series D Convertible Debenture Due May 10, 2001 by DCR
	Communications, Inc. dated May 10, 1996.*                                                                                                                                                                                                                                                                                                                                                                  
|        | 10.33 |  |  |                    |  | Contract for Engineering and Construction of Terrestrial
	Repeater Network System between XM Satellite Radio Inc. and LCC
	International, Inc. dated August 18, 1999.*****                                                                                                                                                                                                                                                                                         
|        | 10.34 |  |  |                    |  | Amendment No. 6 to the Terrestrial Repeater Network System
	Contract between XM Satellite Radio Inc. and LCC International,
	Inc. dated January 8, 2001.                                                                                                                                                                                                                                                                                                           
|        | 10.35  |  |  |                    |  | Ericsson Radio Systems AB Asset Purchase Agreement dated dated
	August 25, 1999.****                                                                                                                                                                                                                                                                                                                                                                               
|        | 10.36  |  |  |                    |  | Letter, dated October 22, 1999, among LCC International,
	Inc., LCC Europe AS and Ericsson Radio Systems AB.****                                                                                                                                                                                                                                                                                                                                                   
|        | 10.37  |  |  |                    |  | Asset Purchase Agreement between Pinnacle Towers Inc. and
	Microcell Management, Inc. dated February 24, 2000.*******                                                                                                                                                                                                                                                                                                                                              
|        | 10.38  |  |  |                    |  | Amendment No. 1 to Asset Purchase Agreement between
	Pinnacle Towers Inc. and Microcell Management Inc., dated
	March 2, 2000.*******                                                                                                                                                                                                                                                                                                                              

58



---



|        |       |  |  |                     |  |                                                                                                                       
|------- | ----- |  |  | ------------------- |  | ----------------------------------------------------------------------------------------------------------------------
|Exhibit |       |  |  |                    
|Number  |       |  |  | Exhibit Description
|        |       |  |  |                    
|        | 10.39 |  |  |                    |  | Master Antenna Site Lease between Pinnacle Towers Inc. and
	Microcell Management, Inc. dated February 24, 2000.*******
|        | 21    |  |  |                    |  | Subsidiaries of the Company.                                                                                          
|        | 23.1  |  |  |                    |  | Consent of KPMG LLP.                                                                                                  



---

|        |                                                                                                                                                                             
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*       | Incorporated by reference to the Exhibits on the Companys
	Registration Statement on Form S-1 (Registration No. 
	333-6067).                                               
|       
|**      | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on April 15, 1997.      
|       
|***     | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on May 27, 1999.        
|       
|****    | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on November 8, 1999.    
|       
|*****   | Incorporated by reference to the Exhibits to the Companys
	Quarterly Report on Form 10-Q which was filed with the
	Securities and Exchange Commission on November 12, 1999.
|       
|******  | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on March 30, 1999.      
|       
|******* | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on March 20, 2000.      



|  |                                                                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Confidential treatment has been granted for certain portions of
	this document. The copy filed as an exhibit omits the
	information subject to the confidential treatment request.  
| 
| | Confidential treatment has been requested for certain portions
	of this document. The copy filed as an exhibit omits the
	information subject to the confidential treatment request.

59