UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549

# Form 10-K

(X)  ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal
Year Ended December 31, 2004 or

(  )  TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-3024

NEW ULM TELECOM, INC. (Exact name of registrant as specified in its charter)

|Minnesota                       | 41-0440990         
|------------------------------- | -------------------
|(State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization)  | Identification No.)

27 North Minnesota Street
New Ulm, Minnesota 56073(Address of principal executive offices and zip code)

Registrant's telephone number,
including area code: 507-354-4111

Securities registered pursuant to Section 12 (b) of the Act: None

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

Common Stock, $1.66 par valueTitle 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 X   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.   X

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

As of June 30, 2004, the aggregate market
value of the common stock held by non-affiliates of the registrant was $42,894,045 based
on the last sale price of $9.00 on The OTC Bulletin Board.

The total number of shares of the
registrants common stock outstanding as of March 22, 2005: 5,115,435.

Documents Incorporated by Reference:
Certain information required by Part III, Items 10-14 of this document is incorporated by
reference to specified portions of the registrants definitive proxy statement for
the annual meeting of shareholders to be held May 5, 2005.

---

# PART I

# Item 1.   Business

# General Development of
Business

New Ulm Telecom, Inc. was
incorporated in 1905 under the laws of the State of Minnesota, with headquarters in New
Ulm, Minnesota. The Companys principal line of business is the operation of three
incumbent local exchange telephone companies (ILECs). This business consists of connecting
customers to the telephone network, providing switched service and dedicated private
lines, connecting customers to long distance service providers and providing many other
services associated with ILECs. The Company also provides cable television services,
Internet access services, including both dial-up access and high-speed digital subscriber
line or DSL access, long distance service and installs and maintains telephone systems to
the areas in and around its ILEC service territory in southern Minnesota and northern
Iowa. The Company began offering service as a competitive local exchange carrier (CLEC) in
the city of Redwood Falls, Minnesota in 2002. The Company also has a 9.88% investment in
Midwest Wireless Holdings L.L.C. a wireless communications provider in southern Minnesota,
northern Iowa, and southwestern Wisconsin. The Company also has a 25.18% investment in
FiberComm, LC, a competitive local exchange carrier (CLEC), in Sioux City, Iowa.

For purposes of this report, all
references to the Company shall mean New Ulm Telecom, Inc. and its
subsidiaries.

The Company maintains a website at
www.newulmtel.net. The Companys annual reports on Form 10-K, quarterly reports
on Form 10-Q, and current reports on Form 8-K are available free of charge at
www.newulmtel.net, as soon as reasonably practicable after such material is filed with or
furnished to the SEC.

The Company and its five wholly-owned
subsidiaries are organized into three business segments as follows:

Telecom Segment

- This Segment contains the operations of the Companys incumbent local exchange
carriers: (ILECs) New Ulm Telecom, Inc. (New Ulm), the parent company; Western
Telephone Company (Western), a wholly-owned subsidiary; Peoples Telephone Company
(Peoples), a wholly-owned subsidiary; its competitive local exchange carrier (CLEC) New
Ulm Telecom, Inc.; its investment in FiberComm, LC, a CLEC located in Sioux City, Iowa;
and the Companys operations that provide Internet and video services.

# Cellular Segment

- This Segment contains the sales and service of cellular phones and accessories, and the
Companys ownership in Midwest Wireless Holdings L.L.C. (MWH) in which New Ulm
Cellular #9, Inc. (Cell #9), a wholly-owned subsidiary, owns 7.55% and Peoples Telephone
Company, a wholly-owned subsidiary, owns 2.33%. The Companys total ownership of MWH
was 9.88% as of December 31, 2004.

# Phonery Segment

- This Segment contains the sales and service of customer premise (CPE) and transport
operations of New Ulm Phonery, Inc. (Phonery), a wholly-owned subsidiary; Western
Telephone Company, a wholly-owned subsidiary; and Peoples Telephone Company, a
wholly-owned subsidiary. This segment also contains the resale of long distance toll
service operations of New Ulm Long Distance, Inc., a wholly-owned subsidiary.

Financial information about the
Companys industry segments is included commencing on page 38 of this Form 10-K.

2

---

# Dispositions

In January, 2002, Cherokee Cellular,
Inc. (CCI) and Three Lakes Cellular, Inc. (TLCI), which owned units of MWH, dissolved.
Peoples had an ownership interest in each corporation. The Corporations entered into a
transaction that allowed CCI and TLCI to transfer MWH shares directly to the stockholders.
Prior to this transaction, Peoples contributed $2,166,000 of cash to these corporations.
The stockholders of CCI and TLCI assumed an increase in the value of MWH, resulting in a
taxable gain. Recognition of the gain occurred due to the step-up value resulting in the
appreciation of the value of MWH. The Company recorded a pre-tax gain of $1,157,915
($697,065 net of tax), which is reflected in the Cellular Segment in 2002.

# Acquisitions

The dissolution of CCI and TLCI, as
explained above, allowed the Company to increase its direct ownership in MWH. Peoples
acquired an additional 12,050 units in MWH through the dissolution of these two
Corporations.

The dissolution of TLCI also allowed
Peoples to purchase additional units in MWH. Peoples purchased 12,295 units from other
partners in TLCI for approximately $1,940,000 in cash. The investment income subsequent to
these transactions is reflected in the Cellular Segment.

# Narrative Description of
Business

Telecom Segment

The Companys core business is
the operation of three independent telephone companies, its CLEC operations, its Internet
and video operations from which it generates the majority of its revenue. The Company
conducts this core business in the Telecom Segment.

The Telecom Segment operates three
ILECs (New Ulm, Western, and Peoples) and one CLEC in the City of Redwood Falls,
Minnesota. New Ulm and Western are independent telephone companies that are regulated by
the Minnesota Public Utilities Commission (MPUC), and Peoples is an independent telephone
company that is regulated by the Iowa Utilities Board (IUB). The Telecom Segment has not
experienced a major change in the scope or direction of its operations during the past
year. At December 31, 2004, the Company served approximately 17,000 access lines. The
Company provides telephone service in Minnesota to the cities of New Ulm, Courtland,
Klossner, Searles, Redwood Falls (city only), Springfield, Sanborn and the adjacent rural
areas in Brown, Nicollet, Blue Earth and Redwood counties in south central Minnesota,
approximately 90 to 120 miles southwest of Minneapolis, Minnesota. The segment also
operates six cable television systems in Minnesota (in the cities of New Ulm, Courtland,
Redwood Falls, Springfield, Sanborn and Jeffers, and the surrounding rural areas), and one
cable television system in Iowa (in the city of Aurelia), servicing approximately 4,470
customers.

The telecom segment derives its
principal revenues from local service charges to its residential and business subscribers
and access charges to inter-exchange carriers for providing the carriers access to the
Companys local phone networks. Revenues are also received from long distance
carriers for providing the billing and collection of long distance toll calls to the
Companys subscribers.

Alternatives to the Companys
service include customers leasing private line switched voice and data services in or
adjacent to the territories served by the Company, which permits the bypassing of local
telephone facilities. In addition, microwave transmission services, wireless
communications, fiber optic and coaxial cable deployment, Voice over Internet Protocol
(VoIP), satellite and other services permit bypass of the local exchange network. These
alternatives to local exchange service

3

---

represent a potential threat to the
Companys long-term ability to provide local exchange services at economical rates.

In order to meet the competition
present in the industry, New Ulm, Western and Peoples have deployed new technology for
their local exchange networks to increase operating efficiencies and to provide new
services to their customers. These new technologies include the latest release of digital
switching technology on all of the ILECs switches and installation of SS7 (an out-of-band
system) for all of its access lines. New Ulm, Western, and Peoples have also constructed
fiber rings (redundant route designs which allow traffic to re-route if trouble appears in
the network) that protect their local networks and enable them to provide a very reliable
level of service to their customers. The value of the local network is also enhanced by
the ability to offer access to high-speed Internet (DSL) to over 95% of their customers.
DSL technology offers customers access to high-speed Internet and traditional voice
connectivity over the same connection. In addition, New Ulm and Western have enhanced
their networks to offer video services over the same facilities that provide their
customers with voice and Internet access. This technology is available to approximately
80% of their access lines.

New Ulm currently has competition in
the City of Redwood Falls, Minnesota in the provision of traditional telephone service.
Qwest is the incumbent provider. (New Ulm entered Redwood Falls as a CLEC in September
2002.) Competition does not currently exist in the other communities and areas served by
New Ulm, Western or Peoples for traditional telephone service. The Company is also facing
competition in the Minnesota communities of New Ulm, Redwood Falls, and Springfield in the
provision of video services. Time Warner is the incumbent provider for video services in
New Ulm and Mediacom is the incumbent provider in Redwood Falls and Springfield. Several
companies also compete with the Company in providing Internet services. New Ulm, Western,
and Peoples constantly respond to competitive pressure with active programs to market
products and to enhance their infrastructure for higher customer satisfaction.

Competition also exists for some of
the services provided by inter-exchange carriers, such as customer billing services,
dedicated private lines, and network switching. This competition comes primarily from the
inter-exchange carriers themselves. The provision of these services is of a contractual
nature and is primarily controlled by the inter-exchange carriers. Other services, such as
directory advertising, operator services and cellular communications, are open to
competition. Competition is based primarily on service and customer experience.

Cellular Segment

The Cellular Segment derives its
revenue from the sales and service of cellular phones and accessories, and the
Companys ownership in MWH. Cell #9 owns a 7.55% and Peoples owns a 2.33% interest in
MWH. MWH provides cellular phone service in southern Minnesota, northwestern Iowa and
southwestern Wisconsin. The Company records equity earnings in MWH from Cell #9s and
Peoples equity ownership in MWH.

Phonery Segment

The Phonery Segment provides the
sales and service of customer premise and transport operations of Phonery, Western, and
Peoples. This segments activities also include the resale of long distance toll
service operations of New Ulm Long Distance, Inc.

The Phonery Segment is a
non-regulated telecommunications business which sells and services telephone apparatus,
toll transport services and provides voice-mail services on a retail level

4

---

primarily in the areas served by New
Ulm, Western and Peoples. The Phonery specializes in quality custom installation and
maintenance of local networking and transport solutions in telecommunications for end user
customers.

There are a number of companies
engaged in the sale of telephone equipment at the retail level competing with the Phonery
Segment. Competition is based primarily on price, service, and customer experience. No
company is dominant in this field.

# Regulatory Matters

The Companys consolidated
financial statements are prepared in accordance with accounting principles generally
accepted in the United States of America and, where applicable, conform to the accounting
principles as prescribed by federal and state telephone utility regulatory authorities.

The Telecommunications Act passed by
the federal government in February of 1996 is resulting in significant changes to the
telecommunications industry. The Federal Communications Commission (FCC) is in the process
of determining how competition will be implemented by setting standards for wholesale
pricing, unbundling local network rates, and interconnection rates. State regulators are
also involved in implementing the transition to a competitive environment, but the exact
roles that the FCC and state regulators will play are yet to be fully determined.

Interstate access rates are
established by a nationwide pooling of companies known as the National Exchange Carriers
Association (NECA). The FCC established NECA in 1983 to develop and administer interstate
access service rates, terms and conditions. Revenues are pooled and redistributed on the
basis of each companys actual or average costs. There has been a shift in the
composition of interstate access charges in recent years shifting more of the charges to
the end user and reducing the amount of access charges paid by inter-exchange carriers.
The Company believes this trend will continue.

The FCC continues to examine
inter-carrier compensation (payments from one telecommunications company to another for
use of their interconnecting networks). This examination could lead to significant changes
in the way the Company is compensated for use of its local network in the future.

The FCC has an open docket on
inter-carrier compensation as well as several dockets on VoIP. In February, 2005, the FCC
issued a Notice of Public Rule Making (NRPM) requesting comments on various proposals for
interconnection compensation reform. The Company cannot predict the outcome of such
proceedings, nor can it estimate the impact.

The Companys local exchange
telephone companies are subject to the jurisdiction of Minnesota and Iowa with respect to
a variety of matters, including rates for intrastate access services, the conditions and
quality of service. Rates for local telephone service are not established directly by
regulatory authorities, but their authority over other matters limits the Companys
ability to implement rate increases. In addition, the regulatory process inherently
restricts the Companys ability to immediately pass cost increases along to customers
unless the cost increases are anticipated and the rate increases are implemented
prospectively.

State regulators are considering
changes to intercarrier compensation. In Minnesota, a docket had been opened to reduce the
access charges paid to the Company by inter-exchange carriers. The docket was suspended in
December, 2004, subsequent to concerns expressed by state agencies regarding increases in
local rates that might result from mandated access reductions. The Company cannot estimate
the effect, if any, of any future potential state access changes.

5

---

The Company and its subsidiaries
anticipate no material effects on their capital expenditures, earnings or competitive
position because of laws relating to the protection of the environment.

# Competition

As a result of the Telecommunications
Act of 1996, telephone companies no longer have an exclusive franchise service area. Under
the law, competitors may offer telephone service to the Companys customers and
request access to the Companys local network facilities. The law also permits
existing telephone companies to offer telephone service outside their existing franchise
service area. The law includes universal service provisions, interconnection requirements,
and rules mandating how competition will be implemented. The FCC and state regulatory
agencies are responsible for establishing rule-making procedures to implement the law. The
rule making procedures are not complete and a number of court cases have already been
filed challenging various aspects of the rules and procedures. Until the rule-making
procedures are complete and the court issues settled, the Company cannot predict how the
new law will affect its business.

Since the mid-1990s, the
Companys business strategy has been to position itself as a one-stop
telecommunications provider. The Company believes that its customers value the fact that
it is the local company whose goal is to meet the customers total
communications needs. The Company believes that it has several competitive advantages: its
prices and costs are low; its service quality and reputation are high; its commitment to
the communities it services is unparalleled; its investment in technology is strong; and
it has a direct billing relationship with almost all of the customers in its service
territories.

The long-range effect of competition
on the provision of telecommunications services and equipment will depend on technological
advances, regulatory actions at the state and federal levels, court decisions, and
possible additional future state and federal legislation. The trend resulting from past
legislation has been to expand competition in the telecommunications industry.

# Forward-Looking
Statements

This Form 10-K contains
forward-looking statements, as defined in the Private Securities Litigation Reform Act of
1995, that are based on managements current expectations, estimates and projections
about the industry in which the Company operates and managements beliefs and
assumptions. Such forward-looking statements are subject to important risks and
uncertainties that could cause the Companys future actual results to differ
materially from such statements. These statements are not guarantees of future performance
and involve certain risks, uncertainties and probabilities, which are difficult to
predict. Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements, whether as a result of new
information, future events or otherwise. Factors that might cause differences include, but
are not limited to, the following:

- increased  competition in core business segments which may decrease market share
and or affect the pricing of services or products;
- the ability to retain key employees;
- changing market conditions which may affect growth rates in the industry;
- the ability to secure financing for future expansion and operations;
- the ability to improve operations with new technologies;
- required investment in technological innovations which may deplete capital resources;
- the continuation of historical  trends,  including  continued declines in access
lines and access minutes of use;

6

---

- the economy in general;
- the future of the communications industry and communications services;
- the effect of legal and regulatory changes;
- the sufficiency of cash generated from current operations to fund future liquidity needs;
- adverse determinations in existing and future disputes regarding network access charge billings; and
- other risks and uncertainties which may affect operating results.

Additional information concerning
these and other factors that could cause actual results or events to differ materially
from current expectations are contained herein. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date on which
they were made. Except as otherwise required by law, the Company undertakes no obligation
to update any of its forward-looking statements for any reason.

# Employees

As of March 22, 2005, the Company had
70 full-time equivalent employees.

# Executive Officers of
the Registrant

Set forth below are the names, ages
and positions of the executive officers of the Company as of March 1, 2005.

|Name and Age       |  | Position
|------------------ |  | --------
|                   |  |         
|Bill Otis          |  |         
|(47)               |  |         
|                  
|Barbara Bornhoft   |  |         
|(48)               |  |         
|                  
|Nancy Blankenhagen |  |         
|(44)               |  |         

The executive officers of the Company
are elected annually and serve at the discretion of the Board of Directors. None of the
Companys executive officers is employed pursuant to a written employment contract.
There are no familial relationships between any director or executive officer, except that
the Chairman of the Board, Mr. James P. Jensen is the brother-in-law of Director,
Mr. Gary Nelson.

Background of Executive
Officers

Bill Otis has been President and
Chief Executive Officer of the Company since 1985. Prior to being President and Chief
Executive Officer of the Company he was the Officer Manager/Controller for New Ulm
Telecom, Inc. from 1979 to 1985. Mr. Otis is also a director of MWH.

Barbara Bornhoft has been Vice
President/Secretary of the Company since 1998.

Nancy Blankenhagen has been Chief
Financial Officer/Treasurer of the Company since May 2004. She was the Interim Chief
Financial Officer/Treasurer of the Company from February 2004 to May 2004. Prior to that
role, she had been an accountant for the Company since 1989.

7

---

# Item 2.   Properties

The three operating telephone
companies (New Ulm, Western, and Peoples) own central office equipment, which is used to
record, switch and transmit the telephone calls, as described below.

New Ulms host central office
equipment was purchased in 1991 and consists of a Nortel Networks DMS-100/200 digital
switch. New Ulm also has remote switching sites in three locations: two in New Ulm and one
in the city of Courtland. The equipment at these remote switching sites is housed within
specially designed central office equipment buildings.

Western installed Nortel Networks
remote central office equipment in 1996. This remote switching equipment utilizes the host
switch in New Ulm. Western also has a remote switching site in the city of Sanborn. The
equipment at Sanborn is housed within a specially designed central office equipment
building.

Peoples central office
equipment was installed in 1999 and consists of a Nortel Networks RSC digital remote
switch. Peoples leases host switching facilities from FiberComm, LC, of which it owns a
25.18% equity interest.

The Company believes that its
property is suitable and adequate to provide the necessary services and believes all
properties are adequately insured. Note 5 to the financial statements, found on page 34 of
this document, describes the mortgages and collateral relating to the above properties,
while Note 2 to the financial statements, found on page 32 of this document, describes the
Companys depreciation policy.

The Company owns various buildings
and related land as follows:

|(1) |  | New Ulm owns a building that is located at 400 Second Street North, New Ulm,
          Minnesota. It was originally constructed in 1918, with various additions and
          remodeling through the years. This building contains business offices and
          central office equipment. The building also has warehouse and garage space. This
          building contains approximately 23,700 square feet of floor space.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | New Ulm constructed a warehouse in 1992 that is located at 225 20th South
          Street, New Ulm, Minnesota. The warehouse has 10,800 square feet of space and is
          used primarily as a storage facility for trucks, generators, trailers, plows and
          inventory used in outside plant construction.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | New Ulm has three remote central office buildings that are located on the north
          side of New Ulm, the south side of New Ulm, and in Courtland. These buildings
          contain central office equipment that remote off New Ulms main central
          office equipment.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | New Ulm owns three towers and the land on which they are constructed. One is
          located north/northwest of the city of New Ulm along Highway 14 in Nicollet
          County, another is located north of St. George, Minnesota, and the third is
          located at the 400 Second North location.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | New Ulm owns land located at the corner of 7th Street South and Valley Street in
          New Ulm, Minnesota. This lot is utilized as storage for poles and cable
          inventory and contains approximately 5,000 square feet of fenced-in storage
          area.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | New Ulm leases a building located at 27 North Minnesota, New Ulm, Minnesota. The
          building contains approximately 14,000 square feet of space and is used
          primarily as a retail location housing customer support services and the
          corporate business office.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

---

|(7) |  | New Ulm owns a building located at 137 E. 2nd Street, Redwood Falls, Minnesota.
          This building contains business offices and central office equipment. This
          building contains approximately 1,540 square feet of floor space.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | New Ulm has three remote equipment office buildings in Redwood Falls, Minnesota
          that are located at 1105 South Mill Street, 220 Veda Drive and 620 Walnut
          Street. These buildings contain central office equipment that remote off New
          Ulms main central office equipment.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) |  | Western owns a building at 22 South Marshall, Springfield, Minnesota. This
          building contains the business office and central office equipment. This
          building contains approximately 2,100 square feet of floor space.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) |  | Western has a building in Sanborn, Minnesota, which contains central office
          equipment that remotes off Westerns central office equipment.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(11) |  | Western owns a warehouse located at 22 South Marshall, Springfield, Minnesota.
          This building is used as a storage facility for vehicles, other work equipment
          and inventory used in outside plant construction. This building contains
          approximately 3,750 square feet of space.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) |  | Peoples owns a building at 221 Main Street, Aurelia, Iowa that houses the
          business office, central office equipment and cable television head-end
          equipment. The building contains approximately 1,875 square feet of floor space.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) |  | Peoples owns a building that is adjacent to its main office building at 217 Main
          Street, Aurelia, Iowa. This building is available to expand the present main
          office building. The building contains approximately 1,875 square feet of floor
          space.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(14) |  | Peoples owns a building at 133 1⁄2 Main Street, Aurelia, Iowa, that
          contains approximately 1,100 square feet of warehouse space and 525 square feet
          of office space.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(15) |  | Peoples also owns a vacant lot at 121 Main Street, Aurelia, Iowa, that is
          25 x 100'.
|---- |  | -----------------------------------------------------------------------------------------------

In addition, New Ulm, Western and
Peoples own the lines, cables and associated outside physical plant utilized in providing
telephone and cable television service in their service areas.

The Phonery owns equipment leased to
subscribers such as telephone sets and other similarly used instruments.

# Item 3.   
Legal Proceedings

There is no material litigation
pending or threatened involving the Registrant or any of its subsidiaries at this time in
any court, nor are there any proceedings known to be contemplated by governmental
authorities.

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

No matters were submitted to a vote
of security holders during the fourth quarter of the fiscal year covered by this Form
10-K.

9

---

# PART II

# Item 5.   
Market for the Registrants Common Equity and Related Stockholder
Matters

Our common stock is traded on the OTC
Bulletin Board under the symbol NULM. The table below sets forth the
approximate high and low bid prices for our common stock for the periods indicated as
reported by the OTC Bulletin Board. Such over-the-counter market quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily reflect actual transactions.

|           
|-----------
|           
|High       
|           
|2004:      
|1st quarter
|2nd quarter
|3rd quarter
|4th quarter
|           
|2003:      
|1st quarter
|2nd quarter
|3rd quarter
|4th quarter

Record Holders

As of March 22, 2005, there were
approximately 1,356 holders of record of the Companys common stock.

Dividends

Dividends were declared in 2004, 2003 and
2002.

Dividends were $.33 per share in
2004, $.33 per share in 2003 and $.33 per share in 2002. The Board of Directors reviews
dividend declarations based on anticipated earnings, capital requirements and the
operating and financial condition of the Company. There are security and loan agreements
underlying CoBank notes that contain certain restrictions on distributions to
stockholders, investment in, or loans to others.

# Item 6.   Selected
Financial Data

Selected Income Statement Data for
the Company (consolidated):

|                            
|----------------------------
|                            
|2003                        
|                            
|Operating Revenues          
|                            
|Operating Expenses          
|                            
|Operating Income            
|                            
|Other Income                
|                            
|Income Taxes                
|                            
|Net Income                  
|                            
|Basic and Diluted Net Income
|Per Share                   
|                            
|Dividends Per Share         

10

---

All per share data has been re-stated
to reflect the three-for-one stock split effective January 10, 2002.

Selected Balance Sheet
Data:

|                    
|--------------------
|                    
|2003                
|                    
|Current Assets      
|                    
|Current Liabilities 
|                    
|Working Capital     
|                    
|Total Assets        
|                    
|Long-Term Debt      
|                    
|Stockholders Equity
|                    
|Book Value Per Share

All per share data has been restated
to reflect the three-for-one stock split effective January 10, 2002.

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

# Results of Operations
for 2004, 2003 and 2002

The Company operates three business
segments: Telecom, Cellular and Phonery. The majority of its operations consist of the
Telecom Segment that provides telephone and related ancillary services, Internet services,
and cable television services to several communities in Minnesota and Iowa. The Cellular
Segment includes the sale and service of cellular phones and accessories, and a 9.88%
interest in MWH, which it records on the equity method of accounting due to the influence
the Company has over the operations and management of MWH. The Phonery Segment includes
the sales and service of customer premise equipment (CPE), transport operations, and the
resale of long distance toll service.

# Non-GAAP Measurements

In addition to the GAAP results
provided in this Form 10-K, the Company has furnished the non-GAAP measure of EBITDA.
EBITDA may be reconciled to our GAAP financial measures as follows: EBITDA represents
operating income, plus depreciation and amortization expense (noncash expenses). EBITDA,
which is not a measure of financial performance or liquidity under United States GAAP, is
provided because the Company understands that such information is used by certain
investors when analyzing the financial position and performance of the Company. This
measure does not replace the presentation of our GAAP financial results. Because of the
variety of methods used by companies and analysts to calculate EBITDA, and the fact that
EBITDA calculations may not accurately measure a companys ability to meet debt
service requirements, caution should be used in relying on any EBITDA presentation. This
non-GAAP measure is provided as supplemental information to our investors in analyzing our
performance.

This supplemental comparison is
consistent with the manner in which management internally reviews results of operations
and evaluates performance in that management reviews the results of operations on both a
GAAP basis and using adjusted comparisons. Management does not use the adjusted
comparisons in lieu of the comparable GAAP measures, but rather uses the adjusted
comparisons to supplement its review of operations.

11

---

# Consolidated Results of
Operations

2004 Compared to 2003

- 2004 consolidated revenues were $15,101,000, compared with $15,841,000 in 2003, a decrease
of $740,000 or 4.7%. The Telecom Segment experienced decreases in its operating revenues
resulting from access revenue reductions. These access revenue reductions reflected the
continued decline in access minutes of use, reduced access rates, a decrease in
settlements from the National Exhange Carrier Association (NECA) and a revenue reduction
relating to Qwest disputed billings (see note 12 on page 37). Due to this ongoing dispute,
network access revenues were decreased by $408,952 in June, 2004. This represents an
adjustment for recognized revenues since 1995 (the start of the dispute). The billing
dispute with Qwest is ongoing and management believes it has taken an appropriately
conservative approach to the recording of Qwest revenues so that the Company does not
expect significant future downward revenue adjustments for this dispute. A decrease in
NECA settlements was attributed to the parent company, New Ulm Telecom, Inc. NECA
settlements for the parent are based on the actual costs to provide service. In 2004 these
settlements decreased approximately $375,000 due to a decline in central office switching
and circuit equipment costs allocated to the interstate jurisdiction. The Company
anticipates that it will continue to be affected by the common industry trends of
declining access minutes of use and reduced access rates. The Company believes, despite
the decline in the Telecom Segment revenues, that this sector has positioned itself for
future revenue growth. The Company expects growth to be realized through increases in
revenue due to new and expanded service offerings: digital video and digital subscriber
line (DSL), Internet service provision, and the continued growth of a Competitive Local
Exchange Carrier (CLEC) in the City of Redwood Falls, Minnesota. Also, the Company
continually evaluates new and emerging technologies to keep the Companys service
offerings innovative and competitive. The Telecom segment has invested heavily in its
infrastructure, which has allowed it to enhance its local network so that it could offer a
triple-play of services to its subscribers. In the telecommunications
industry, a triple-play of services refers to offering telephone, Internet,
and video services over the same infrastructure. The Company expects that continued
investment in its infrastructure will allow the Company to continue to offer its customers
new technologies as they emerge, and that the geographic expansion of the Companys
service offerings will provide this segment with continued future growth. The Telecom
segment invested $3,004,000 in its infrastructure in 2004, which allowed it to enhance its
local network, offer new services to its subscribers and expand its service territory to
Redwood Falls, Minnesota. The Cellular segment experienced an increase in revenues due to
an increase in its sales and service revenues of cellular phones and accessories. The
Phonery segment had no significant change.
- 2004 consolidated operating expenses were $12,469,000, compared with $11,867,000 in 2003,
an increase of $602,000 or 5.1%. The Telecom segment provided $498,000 of the total
increase, which related to expenses from an increase in the number of customers
subscribing to Internet and video services and the continued growth of CLEC services in
Redwood Falls, Minnesota. The Cellular segment had an increase in expense due to the
increase in cellular phone and accessory sales. The Phonery segment expenses had no
significant change.
- 2004 consolidated net income was $3,292,000 compared with $3,813,000 in 2003. The decrease
in consolidated net income was $521,000 or 13.7%. This decrease was attributed to
decreases in the Companys access network revenues and an increase in operating
expenses, offset by revenue increases in its non-regulated offerings, such as DSL and
video services, a reduction in interest expense due to reduction of principal amounts
outstanding and an increase in other investment income.

12

---

2003 Compared to 2002

- 2003 consolidated revenues were $15,841,000, compared with $14,334,000 in 2002, an
increase of $1,507,000 or 10.5%. The Telecom segment provided for the increase in revenues
with the continued success of its new service offerings: digital video and DSL, which
began in 2001, and the introduction of competitive local exchange services in Redwood
Falls, Minnesota. The Telecom segment invested $4,132,000 in its infrastructure in 2003,
which allowed it to enhance its local network, offer new services to its subscribers and
expand its service territory to Redwood Falls, Minnesota. The other segments had no
significant change.
- 2003 consolidated operating expenses were $11,867,000, compared with $10,754,000 in 2002,
an increase of $1,113,000 or 10.3%. The Telecom segment provided $1,611,000 of the total
increase, of which $624,000 related to depreciation expense, with the remaining increase
due to the expenses associated with the segments new service offerings: digital
video and DSL, and the introduction of CLEC services in Redwood Falls, Minnesota. Total
Company write-offs of bankrupt carrier receivables in fiscal year 2002 were $400,000.
- 2003 consolidated net income was $3,813,000 compared with $3,990,000 in 2002. The decrease
in consolidated net income was $177,000 or 4.4%. Consolidated net income in 2002 included
a pre-tax gain of $1,157,000 ($697,000 after taxes) due to the dissolution of two
corporations within the Cellular Segment. This increase was attributed to increased
profitability of the Companys telephone operations, including its non-regulated
offerings, such as DSL and video services, a reduction in interest expense due to
reduction of principal amounts outstanding and an increase in other investment income.

# Results of Operations by
Business Segment

# Telecom Segment

Telecom Segment revenues represented
85.6% of 2004 consolidated operating revenues. Revenues are primarily earned by providing
approximately 17,000 customers access to the local networks of its ILEC and CLEC
operations, and by providing inter-exchange access for long distance network carriers. The
Telecom segment also earns revenue through billing and collecting for various long
distance companies, directory advertising, providing Internet services and video services
(a new venture undertaken in 2001) to its subscribers. The Telecom segment also began
offering CLEC services in the City of Redwood Falls, Minnesota in September 2002. Total
Telecom segment revenues have increased 9.8% since 2002. All information contained in this
table is before intercompany eliminations.

|                                       | 2004 |  |  
|-------------------------------------- | ---- |  | -
|                                       |      |  |  
|Operating Revenues:                    |      |  |  
|Local Network                          |      |  | $
|Network Access                         |      |  |  
|Other                                  |      |  |  
|                                       |      |  |  
|Total Operating Revenues               |      |  |  
|                                       |      |  |  
|Cash Operating Expenses                |      |  |  
|Non-cash Operating Expenses            |      |  |  
|                                       |      |  |  
|Total Operating Expenses               |      |  |  
|                                       |      |  |  
|Operating Income                       |      |  |  
|                                       |      |  |  
|                                      
|Net Income                             |      |  |  
|                                       |      |  |  
|Earnings Before Interest, Taxes,       |      | 
|Depreciation and Amortization (EBITDA) |      |  |  
|Capital Expenditures                   |      |  | $

13

---

Total Telecom segment revenues
decreased $739,950 or 5.1% in 2004 over 2003 and increased $1,975,000 or 15.7% in 2003
over 2002.

Local network revenue increased in
the Telecom segment by $243,000 or 6.1% in 2004 over 2003 and increased $256,000 or 6.9%
in 2003 over 2002. The number of access lines served decreased 1.5% in 2004 over 2003, as
compared to an increase of 2.3% in 2003 over 2002. The decrease in access lines in 2004
was primarily due to the decreased demand for access lines as DSL service became available
to a greater portion of the Companys service areas and as the Company satisfied
customers desire for Internet services at higher speeds than is available through
traditional dial-up service. DSL is used to provide both traditional voice connectivity
and access to high-speed Internet service over the same facilities, which eliminates the
need for customers to have second lines dedicated solely to providing Internet service.
The increase in access lines in 2003 was primarily due to growth in the segments
CLEC activity in Redwood Falls, which was started in late 2002. Growth in the
segments basic voice service revenue for CLEC customers accounted for approximately
$51,000 and $156,000 of the 2004 and 2003 increases in local network revenue,
respectively. In addition, charges for the voice portion of DSL service were responsible
for $169,000 and $114,000 of the 2004 and 2003 increases in local network revenues,
respectively. Overall, the revenue increases were accomplished with promotion and
packaging of vertical services, most notably, DSL, and focused marketing to potential
customers. In 2002, the Telecom segment also entered into a number of interconnection
agreements with wireless providers, which allows these providers access to its customers
at the local service level. The interconnection agreements increased local network
revenues by $36,000 for 2004 over 2003 and revenues were constant for 2003 over 2002.

Network access revenue decreased
$1,684,000 or 24.7% in 2004 over 2003 and increased $585,000 or 9.4% in 2003 over 2002.
Access minutes in 2004 decreased by 1.6% over 2003 and in 2003 decreased by 9.2% over
2002. The decreases in network access revenue were reflected by the overall decrease in
minutes of use over the last two years and the negative effects of network access pricing,
a common industry trend. Overall, the industry trend of decreasing minutes of use
experienced by the Company was partially offset in the Telecom Segment by the increase in
minutes of use generated by the CLEC activities in Redwood Falls. The continued
utilization of the Internet (e-mail, voice-over-IP) and wireless services will likely
erode any potential increases in the volume of switched access minutes of use, likely
contributing to future decreases in network access revenues. The Telecom segment has
invested over $14,900,000 in capital expenditures since 2002. These capital expenditures,
which have enhanced this segments infrastructure, allowed New Ulm, Western, and
Peoples to receive additional settlements from the National Exchange Carrier Association
(NECA) in previous years. However, in 2004, the parent company, New Ulm Telecom, Inc. had
a decrease in their NECA settlements due to a decline in central office switching and
circuit equipment costs allocated to the interstate jurisdiction. New Ulm, Western, and
Peoples are eligible for high-cost loop and safety net universal service funding. In 2004,
the Telecom segment saw a decrease of $327,000 in the receipt of this funding compared to
2003. In 2003, the Telecom segment received $588,000 in additional funding over 2002. In
June 2004, the Telecom segment recognized a $408,952 reduction in revenues due to the
ongoing access billing dispute with Qwest, an interexchange carrier that provides long
distance service. The dispute relates to the use of estimated terminating traffic and the
related access charges. The dispute is ongoing and is before the Minnesota Public
Utilities Commission for resolution. The Companys reserves conservatively reflect
its present expectations regarding the resolution of this pending matter. (See note 12 on
page 37)

Other operating revenues increased
$701,000 or 18.7% in 2004 over 2003 and increased $1,135,000 or 43.5% in 2003 over 2002.
Due to the infrastructure enhancements that have taken place since 2000, the Telecom
Segment offers video and Internet services over the existing

14

---

infrastructure.  The video
product was responsible  for $436,000 of increased  revenues in 2004 as compared
to $438,000 of the increase  for 2003 over 2002.  The Telecom  segment  provided
additional Internet revenues of $256,000 in 2004 over 2003, and $227,000 in 2003
over 2002,  primarily from the high-speed  Internet portion of DSL service.  The
take-back of some billing and  collection  services by  inter-exchange  carriers
resulted in a  decreased  revenues  from 2004 to 2003 of $10,000,  and a $41,000
decrease for 2003 over 2002.

Cash operating expenses increased
$627,000 or 8.5% in 2004 over 2003 and $987,000 or 15.5% in 2003 over 2002. Increases in
the cash operating expenses for the CLEC activity in Redwood Falls accounted for $114,000
of the total increases in 2004 over 2003 and $599,000 in 2003 over 2002. Cash operating
expenses have increased due to the continued growth of CLEC operations in Redwood Falls,
Minnesota and the increasing array of services offered, such as video and DSL, that allow
the Company to offer the triple-play of services to its customers. The Telecom
segment recognized the value of being able to compete in all aspects of communication
services. This realization motivated the segment to enhance its awareness of customer
satisfaction (including 24 hours a day, 7 days a week access to Internet support due to
customer desire for this service), offer additional services (video and DSL), pursue
aggressive marketing to achieve brand recognition, and provide solutions for
customers evolving communications needs. The Company has expanded its services and
product offerings in an effort to meet its objective of achieving 100% customer
satisfaction by making the customer its top priority, deserving its best service, attitude
and consideration. The Telecom segment also realizes the potential for growth by
competitively offering its range of services to an increasing number of communities. The
Telecom segment began offering its services in the City of Redwood Falls, Minnesota in
September 2002. The Company is always striving for cost efficiencies and technological
improvement to enhance its operating margins for the Telecom segment.

Non-cash operating expenses decreased
$14,000 or 0.3% in 2004 over 2003 and increased $624,000 or 17.4% in 2003 over 2002.
Depreciation expense was the main cause of the changes in non-cash operating expenses.
There was very little change in the amount of depreciation in 2004 as compared to 2003
reflecting the effect of having some assets becoming fully depreciated. The increase in
depreciation expense in 2003 as compared to 2002 was reflective of the new investments of
over $14,900,000 in the segments infrastructure since 2002 as mentioned above. These
investments have allowed the Telecom Segment to offer video and DSL services, as well as
expand its service territory to Redwood Falls, Minnesota.

The Telecom segment capital
expenditures for 2004 and 2003 were $3,004,000 and $4,132,000. The single largest
construction project for both 2004 and 2003 consisted of building out facilities to
provide video and DSL in the rural areas surrounding New Ulm. The segment had capital
projects of $7,766,799 in 2002 due to building facilities in Redwood Falls for CLEC
activities and $7,111,700 in 2001 due to the plant upgrades in the city of New Ulm,
allowing the segment to offer video and DSL to its customers utilizing the same
infrastructure. The segments capital budget for 2005 is approximately $2,649,000.

# Cellular Segment

The Cellular segment operations
include the sales and service of cellular phones and accessories, and the Companys
9.88%, 9.88%, and 9.92% ownership interest in MWH in 2004, 2003, and 2002, respectively.
The operating income from sales of cellular phones and accessories continues to grow due
to increased sales and cellular activation commissions. The Cellular segment receives
commissions from MWH for subscribing customers to their service. These commissions allow
the Cellular segment to give customers discounts on cellular phones as incentives for
customers to subscribe to MWHs cellular phone service. Cellular investment revenues
and operating income continue to grow as MWH adds customers. Acquisitions by MWH in Iowa
and Wisconsin in 2000 have had a significant impact on revenues and profitability of MWH.
MWH acquired additional properties in Iowa in 2003 that diluted the Companys
ownership from 9.92% to 9.88%.

15

---

The operating revenues from sales of
cellular phones and accessories, and activation commissions increased by $142,368 or 42.0%
in 2004 over 2003, and $21,486 or 6.8% in 2003 over 2002. These increases primarily
resulted from the commissions the Company received due to its success in selling MWH
service. In 2004, Cellular investment income increased $725,000 or 26.7% over 2003 as
compared to a decrease of $78,000 in 2003 over 2002. The 2004 increase was due to the
overall growth in customers and profitability in MWH in 2004. The 2003 decrease was due
primarily to increased depreciation as MWH continues to build-out its network
infrastructure. The 2003 investment income decreased despite a 10% increase in revenues
and a 3.6% increase in cash operating income in 2003 over 2002 for MWH.

The Company used the equity method,
which applies the Companys ownership percentage to MWH revenues and expenses for the
segment information below.

2004
     2003
                                2002Cellular Investment Income
     
     
     $3,436,159
        
     $2,710,717
        
     $2,788,861Proportionate Method:Operating Revenues
     20,801,884
        
     17,830,689
        
     16,139,561Cash Operating Expenses
     13,686,818
        
     11,766,583
        
     10,290,753Non-cash Operating Expenses
     2,949,522
        
     2,270,044
        
     1,916,390Total Operating Expenses
     16,636,340
        
     14,036,627
        
     12,207,143Operating Income
     4,165,544
        
     3,794,062
        
     3,932,418Net Income
     $3,436,159
        
     $2,710,717
        
     $2,788,861


A recap of income for the Cellular
segment, which includes its share of the income from its investment in MWH (recorded on
the equity method), is contained in the following table.

2004
     2003
                                2002Operating Revenues:
     
     
     $481,213
        
     $338,845
        
     $317,359Operating Expenses
     354,067
        
     221,202
        
     206,376Operating Income
     127,146
        
     117,643
        
     110,983Interest Expense
     (83,764
        )
     (86,229
        )
     (89,322
        )Gain on Dissolution
     
        
     
        
     1,157,915Cellular Investment Income
     3,436,159
        
     2,710,717
        
     2,788,861Net Income
     $2,071,371
        
     $1,632,391
        
     $2,362,411


# Phonery Segment

The Phonery Segment represented 11.4%
of 2004 consolidated operating revenues. Revenues are earned primarily by sales,
installation and service of business telephone systems and data communications equipment.
In addition, the Phonery segment leases network capacity to provide additional network
access revenues and re-sells long distance service. This segments expertise is the
quality installation and maintenance of CPE, provision of customer long distance needs and
transport solutions in communications to end-user customers. All information contained in
this table is before intercompany eliminations.

16

---

|                                       | 2004 |  |  
|-------------------------------------- | ---- |  | -
|                                       |      |  |  
|Operating Revenues                     |      |  | $
|                                       |      |  |  
|Cash Operating Expenses                |      |  |  
|Noncash Operating Expenses             |      |  |  
|                                       |      |  |  
|Total Operating Expenses               |      |  |  
|                                       |      |  |  
|Operating Income                       |      |  |  
|                                       |      |  |  
|Net Income                             |      |  |  
|                                       |      |  |  
|Earnings Before Interest, Taxes,       |      | 
|Depreciation and Amortization (EBITDA) |      |  |  
|Capital Expenditures                   |      |  | $

Phonery revenues decreased $28,000 or
1.5% in 2004 over 2003 and increased $46,000 or 2.5% in 2003 over 2002. In 2004, the
Phonery segment had an increase in sales, service and installation revenues of
approximately $120,000. This increase was offset by a decrease in the resale of long
distance toll revenues of approximately $35,000 and a decrease of approximately $113,000
in leased network capacity revenues. The decrease in leased network capacity network
revenues included a June 2004 decrease of $19,745 related to the Qwest dispute (see note
12 on page 37). In 2003, a decrease in sales, service and installation revenues of
approximately $115,000 was offset by an increase in the re-sale of long distance toll
revenues of approximately $145,000 and an increase of approximately $16,000 in leased
network capacity.

Cash operating expenses decreased
$26,000 or 2.8% in 2004 over 2003, and increased $26,000 or 2.9% in 2003 over 2002. The
changes in cash operating expenses related primarily to the changes in the expenses
associated with the revenues for the resale of long distance over the past two years. The
Phonery segment continues striving for cost efficiencies and continues to seek new
technologies to better serve customer needs and to operate efficiently.

Noncash operating expenses decreased
$4,000 or 5.0% in 2004 over 2003 and $1,000 or 1.9% in 2003 over 2002. The decreases were
attributable to decreased depreciation expense, as some of the segments older
equipment has become fully depreciated.

# Other Income and
Interest Expense

Interest expense decreased $13,000 in
2004 over 2003 and $315,000 in 2003 over 2002. The 2004 decrease can be attributed to
continued reduction of amounts outstanding and historically low interest rate on the
Companys debt. The 2003 decrease over 2002 was due primarily to a 2002 payment of
$271,000 for the early extinguishment of the Phoenix debt (which is included in interest
expense in 2002). The CoBank loan weighted average interest rate is variable and was 3.95%
at December 31, 2004, 2.62% at December 31, 2003 and 2.82% at December 31, 2002.

Interest income decreased
approximately $15,000 in 2004 over 2003 and $36,000 in 2003 over 2002. The decrease in
2004 was primarily due to historically low interest rates on invested funds. The decrease
in 2003 was primarily due to the payoff of a note receivable from an officer in May, 2003.

The Company recognized a one-time
pretax gain of $1,157,915 in 2002 due to the dissolution of two cellular corporations held
by the Telecom Segment.

Other investment income decreased
$157,000 in 2004 over 2003, as compared to an increase of $348,000 in 2003 over 2002.
Included in other income was the Companys 25.18% equity

17

---

ownership in FiberComm, LC. The
Company recorded a $179,000 loss from FiberComm, LC in 2004, as compared to recording
income of $64,000 in 2003. Also included in other investment income was the patronage
credit the Company earns from CoBank as part of its debt agreements with CoBank. The
patronage earned in 2004 was $184,000, as compared to $154,000 in 2003.

# Factors Affecting Future
Performance

The Companys future results of
operation and other forward-looking statements are subject to risks and uncertainties,
including, but not limited to, the effects of deregulation in the telecommunications
industry as a result of the Telecommunications Act of 1996. Such forward-looking
statements are subject to risks and uncertainties that could cause the Companys
actual results to differ materially from such statements and the Company disclaims any
obligation to update or revise any forward-looking statements based on the occurrence of
future events or the receipt of new information. See Forward-Looking
Statements in Item 1 of this Form 10-K.

# Liquidity and Capital
Resources

# Cash Flows from
Operations

Cash generated by operations for the
year ended December 31, 2004 was $7,819,000 as compared to $8,110,000 in 2003 and
$5,767,000 in 2002.

The 2004 decrease was primarily the
result of the $521,000 decrease in net income in 2004 as compared to 2003. This was due
primarily to the conservative reduction in revenue taken to adjust reserves for the
billing dispute with Qwest. (See note 12 on page 37)

The 2003 increase was driven
primarily by an increase in operating income of $393,000 in 2003 as compared to 2002
despite an increase in depreciation and amortization expense (non-cash) of $623,000. This
was primarily due to efficiencies achieved in 2003 as it was the second year of CLEC
activities in Redwood Falls, Minnesota, and an increase in income taxes deferred to future
periods due to changes in federal income tax lives and methods for depreciation of fixed
assets, which allow the Company to deduct these assets for tax purposes more quickly than
for financial statement purposes.

Cash generated by operations
continues to be the Companys primary source of funding for existing operations,
capital expenditures, debt service, and dividend payments to shareholders. At December 31,
2004, the Company had working capital of $227,000 as compared to working capital of
$1,245,000 at December 31, 2003. Cash and cash equivalents at December 31, 2004 were
$2,739,000 as compared to $2,201,000 at December 31, 2003.

# Cash Flows from
Investing Activities

The Company operates in a capital
intensive business. The Company is continuing to upgrade its local networks for changes in
technology to provide the most advanced services to its customers. Additions to property,
plant and equipment were $3,004,000 in 2004, $4,132,000 in 2003 and $7,767,000 in 2002.
The 2004 and 2003 additions were financed through cash flows from operations. The
additions in 2002 were financed partially through operations and partially through
advances on the Companys revolving credit facility with CoBank. The Company expects
plant additions to total $2,649,000 for 2005, which are expected to be financed through
cash flows from operations. In 2002, the Company also expended $4,106,000 for additional
ownership units in MWH

18

---

# Cash Flows from
Financing Activities

The Company advanced long-term debt
of $9,178,000 in 2002 from its revolving credit facility with CoBank. These advances were
used to help finance its additions to property plant and equipment primarily for the
build-out of its CLEC network in Redwood Falls, Minnesota, and expanding its cable
television (CATV) offerings in New Ulm, Minnesota. The Company also utilized these funds
to retire previously issued debt from Phoenix Home Life Insurance Company of $2,567,000 in
2002 and purchase additional ownership units of MWH.

# Dividends

The Company paid dividends of
$1,704,466 in 2004, $1,704,517 in 2003, and $1,704,517 in 2002. This represented a
dividend of $.33 per share for the past three years. The Company continues to reinvest in
its infrastructure while maintaining dividends to shareholders. The Board of Directors
reviews dividend declarations based on anticipated earnings, capital requirements and the
operating and financial condition of the Company. Paying dividends at the existing level
is not expected to negatively impact the liquidity of the Company.

# Share Repurchase Program

During the first quarter of 2004, the
Company repurchased 150 shares of its common stock at $9.35 per share in a private
transaction. The repurchase was made pursuant to the default provisions of a loan
agreement between the Company and a former non-executive officer employee. The Company
repurchased no shares in 2002 or 2003. At this time, the Company does not anticipate any
significant share repurchases in 2005.

# Long Term Obligations

The Companys long-term
obligations consist primarily of debt issued from CoBank. In December, 2001, the Company
refinanced its revolving credit facilities with CoBank with a $15 million term loan and a
reducing revolving credit facility of $10 million (total debt outstanding under both
facilities at December 31, 2001 was $17,566,666). Interest on both CoBank loans is
variable based on CoBanks reference rate. The interest rates on both CoBank loans
were 3.95% at December 31, 2004 and 2.62% at December 31, 2003. The Company also has an
unsecured loan in the amount of $178,246, with the City of Redwood Falls, Minnesota that
bears interest at 5%.

The following table details the
Companys contractual obligations, along with the cash payments due each period
(excluding interest expense).

|                         
|-------------------------
|                         
|Total                    
|                         
|Contractual Obligations: 
|Long-Term Debt:          
|CoBank Reducing          
|Revolving Credit Facility
|CoBank Reducing          
|Revolving Credit Facility
|Unsecured Note Payable   
|                         
|Totals                   
|                         

19

---

# Liquidity Outlook

The Company has not conducted a
public equity offering. It operates with original equity capital, retained earnings and
additions to indebtedness in the form of senior debt and bank lines of credit. The Company
believes its debt to total capital proportions of 40 to 60 percent will be adequate for
the foreseeable future.

By utilizing cash flow from
operations and current cash balances, the Company feels it has adequate resources to meet
its anticipated operating, capital expenditures, and debt service requirements.

# Effects of Inflation

It is the opinion of management that
the effects of inflation on operating revenues and expenses over the past three years have
not been significant. Management anticipates that this trend will continue in the near
term.

# Critical Accounting
Policies and Estimates

The preparation of consolidated
financial statements and related disclosures in conformity with accounting principles
generally accepted in the United States requires us to make judgments, assumptions, and
estimates that affect the amounts reported in our financial statements and accompanying
notes. Note 1 to the consolidated financial statements describes the significant
accounting policies and methods used in preparing the financial statements. The Company
considers the accounting policies described below to be the most critical accounting
policies because these policies are impacted significantly by estimates we make. The
Company bases its estimates on historical experience or various assumptions that are
believed to be reasonable under the circumstances, and the results from the basis for
making judgments about the reported values of assets, liabilities, revenues and expenses.
Actual results may materially differ from these estimates.

Valuation of Long-Lived
Assets:

In 2002, the Company adopted SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets.
Under this statement, the Company would record impairment losses on long-lived assets used
in operations when events and circumstances indicate the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than the
carrying amounts of those assets. In assessing the recoverability of long-lived assets,
the Company compares the carrying value to the undiscounted future cash flows the assets
are expected to generate. If the total of the undiscounted future cash flows is less than
the carrying amount of the assets, the Company would write down such assets based on the
excess of the carrying amount over the fair value of the assets. Fair value is generally
determined by calculating the discounted future cash flows expected from those assets.
Changes in these estimates could have a material adverse effect on the assessment of our
long-lived assets, thereby requiring us to write down the assets. Write-downs of
long-lived assets are recorded as impairment charges and are a component of operating
expenses. The Company has reviewed its long-lived assets and concluded that no impairment
charge on its long-lived assets is necessary.

Valuation of Goodwill:

The Company has goodwill on its books
related to prior acquisition of telephone properties and acquisition of ownership
interests in MWH. The Company was required to test goodwill for

20

---

impairment annually or at other times
if events have occurred or circumstances exist that indicate the carrying value of
goodwill may no longer be recoverable. The impairment test for goodwill involves a
two-step process: step one consists of a comparison of the fair value of a reporting unit
with its carrying amount, including the goodwill allocated to each reporting unit. If the
carrying amount is in excess of the fair value, step two requires the comparison of the
implied fair value of the reporting unit goodwill with the carrying amount of the
reporting unit goodwill. Any excess of the carrying value of the reporting unit goodwill over
the implied fair value of the reporting unit goodwill
will be recorded as an impairment loss, which is a component of operating expenses. The
Company tested goodwill for impairment and concluded that no impairment charge on its
existing goodwill was necessary as of December 31, 2004, nor has it recorded
impairment charges for goodwill in prior years.

Depreciation of Property,
Plant and Equipment

The Company uses the group life
method to depreciate the assets of its telephone companies. Telephone plant acquired in a
given year is grouped into similar categories and depreciated over the remaining estimated
useful life of the group. Due to rapid changes in technology and new competitors,
selecting the estimated economic life of telecommunications plant and equipment requires a
significant amount of judgment. The Company periodically reviews data on expected
utilization of new equipment, asset retirement activity and net salvage values to
determine adjustments to its depreciation rates. The Company has not made any changes to
the lives of assets resulting in a significant impact in the three years presented.

Revenue Recognition:

The Company recognizes revenue when
services are rendered. The majority of the Companys revenues are earned from
providing services to its customers and providing access to its network to inter-exchange
carriers.

Revenues earned from the
Companys customers come primarily from connection to its local network, cable
television services, and, Internet services, (both dial-up and high-speed DSL). Revenues
for these services provided to the Companys customers are billed based on set rates
for monthly service or based on the amount of time the customer is utilizing the
Companys facilities. The revenue for these services are recognized when the service
is rendered.

Revenues earned from allowing
inter-exchange carriers access to the Companys network are based on utilization of
the network by the carriers as measured by minutes of use of the network by the individual
carriers billed at tariffed access rates for both interstate calls and intrastate calls.
Revenues for these services are recognized based on the period the access is provided.

Interstate access rates are
established by a nationwide pooling of companies known as the National Exchange Carriers
Association (NECA). The FCC established NECA in 1983 to develop and administer interstate
access service rates, terms and conditions. Revenues are pooled and redistributed on the
basis of each Companys actual or average costs. New Ulm settlements from the pools
are based on its actual costs to provide service, while Western and Peoples settle based
on nationwide average schedules. Access revenues for New Ulm include an estimate of the
final cost study for the year which is trued up subsequent to December 31. Management
believes the estimates included in the preliminary cost study are reasonable. There has
been a decline in the level of interstate access charges paid by the carriers in recent
years, and the Company believes this trend will continue. The Company cannot predict the
future impact that industry changes will have on interstate access revenues in 2005.

21

---

Intrastate access rates are filed
with the state regulatory commissions in Minnesota and Iowa.

# Recently Issued
Accounting Pronouncements

In March, 2004, the FASB issued EITF
03-16, Accounting for Investments in Limited Liability
Companies. This requires that an investment in a limited liability company
(LLC) that maintains a specific ownership account for each investor should use the equity
method of accounting unless the interest is so minor that the investor has virtually no
influence over operating and financial policies. Practice has generally viewed investments
of more than 3 to 5 percent to be more than minor. EITF 03-16 is effective for periods
beginning after June 15, 2004. The adoption of these provisions did not have a material
impact on the Companys financial position or results of operation.

In December, 2004, the FASB issued
SFAS No. 123(R), Share-Based Payments, which is a revision of SFAS
No.123 and supersedes APB Opinion No.25. SFAS No.123(R) requires all share-based payments
to employees, including grants of employee stock options, to be valued at fair value on
the date of the grant, and to be expensed over the applicable vesting period. SFAS 123 (R)
is effective for all stock-based awards granted on or after July 1, 2005. In addition,
companies must also recognize compensation expense related to any awards that are not
fully vested as of the effective date. The adoption of SFAS 123(R) is not expected to have
a material impact on the Companys financial position or results of operation.

# Item 7a.   
Quantitative and Qualitative Disclosures About Market Risk

The Company does not have operations
subject to risks of foreign currency fluctuations, nor does the Company use derivative
financial instruments in its operations or investment portfolio. The Companys
earnings are affected by changes in interest rates, as its long-term debt is based on a
national variable rate. If interest rates for the portion of the Companys long-term
debt based on variable rates had averaged 10% more (2.94% to 3.23%) for the entire year
ended December 31, 2004, the Companys interest expense would have increased
approximately $55,000 in 2004. Should interest rates rise significantly, management would
likely act to mitigate its exposure to the change by converting a portion of its
variable-rate debt to fixed-rate debt.

22

---

# Item 8.    Financial
Statements and Supplementary Data

# REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and
Board of DirectorsNew Ulm Telecom, Inc.New Ulm, Minnesota

We have audited the accompanying
consolidated balance sheets of New Ulm Telecom, Inc. (a Minnesota Corporation) and
subsidiaries as of December 31, 2004 and 2003, and the related consolidated statements of
income, stockholders equity and cash flows for each of the years in the three-year
period ended December 31,2004. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We did not audit
the financial statements of Midwest Wireless Holdings L.L.C., a limited liability company,
the investment in which, as discussed in Note 3 to the financial statements, is accounted
for by the equity method of accounting. The investment in Midwest Wireless Holdings L.L.C.
was $17,685,547 and $15,155,015 as of December 31, 2004 and 2003, respectively, and the
equity in its net income was $3,436,159, $2,710,717 and $2,788,861 for each of the three
years in the period ended December 31, 2004. The financial statements of Midwest Wireless
Holdings L.L.C. were audited by other auditors whose report has been furnished to us, and
our opinion, insofar as it relates to the amounts included for Midwest Wireless Holdings
L.L.C., is based solely on the report of the other auditors.

We conducted our audits in accordance
with the standards of the Public Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Companys internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial statements, 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 and
the report of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits
and the report of other auditors, the consolidated financial statements referred to above,
present fairly, in all material respects, the financial position of New Ulm Telecom, Inc.
and subsidiaries as of December 31, 2004 and 2003, and the results of their operations and
their cash flows for each of the years in the three-year period ended December 31, 2004 in
conformity with accounting principles generally accepted in the United States of America.

/s/ KIESLING ASSOCIATES
LLP

West Des Moines, IowaFebruary 4, 2005, except for Note 3,
for which the date is February 11, 2005

23

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# CONSOLIDATED BALANCE
SHEETS  DECEMBER 31, 2004 AND 2003

---

# ASSETS

|                                                       | 2004 | 
|------------------------------------------------------ | ---- | 
|                                                       |      | 
|CURRENT ASSETS:                                        |      | 
|Cash and Cash Equivalents                              |      | 
|Receivables, Net of Allowance for Doubtful             |      | 
|Accounts of $136,069 and $102,500                      |      | 
|Materials, Supplies, and Inventories                   |      | 
|Prepaid Expenses                                       |      | 
|                                                       |      | 
|Total Current Assets                                   |      | 
|                                                       |      | 
|                                                      
|INVESTMENTS AND OTHER ASSETS:                          |      | 
|Cellular Investments (Note 3)                          |      | 
|Goodwill and Intangibles, Net of Amortization (Note 4) |      | 
|Other Investments                                      |      | 
|                                                       |      | 
|Total Investments and Other Assets                     |      | 
|                                                       |      | 
|                                                      
|PROPERTY, PLANT AND EQUIPMENT (Note 2):                |      | 
|Telecommunications Plant                               |      | 
|Other Property                                         |      | 
|Cable Television Plant                                 |      | 
|                                                       |      | 
|Total Property, Plant and Equipment                    |      | 
|Less Accumulated Depreciation                          |      | 
|                                                       |      | 
|Net Property, Plant and Equipment                      |      | 
|                                                       |      | 
|                                                      
|TOTAL ASSETS                                           |      | 
|                                                       |      | 

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

24

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# CONSOLIDATED BALANCE
SHEETS (Continued) DECEMBER 31, 2004 AND 2003

# 

---

# LIABILITIES AND
STOCKHOLDERS EQUITY

|                                                                  | 2004 | 
|----------------------------------------------------------------- | ---- | 
|                                                                  |      | 
|CURRENT LIABILITIES:                                              |      | 
|Current Portion of Long-Term Debt                                 |      | 
|Accounts Payable                                                  |      | 
|Other Accrued Taxes                                               |      | 
|Other Accrued Liabilities                                         |      | 
|                                                                  |      | 
|Total Current Liabilities                                         |      | 
|                                                                  |      | 
|                                                                 
|LONG-TERM DEBT, Less Current Portion (Note 5)                     |      | 
|                                                                  |      | 
|                                                                 
|NONCURRENT LIABILITIES                                            |      | 
|Loan Guarantee (Note 11)                                          |      | 
|Income Taxes (Note 6)                                             |      | 
|Investment Tax Credits                                            |      | 
|                                                                  |      | 
|Total Noncurrent Liabilities                                      |      | 
|                                                                  |      | 
|                                                                 
|STOCKHOLDERS' EQUITY:                                             |      | 
|Preferred Stock - $1.66 Par Value; 10,000,000 Shares              |      | 
|Authorized; 0 Shares Issued and Outstanding                       |      | 
|Common Stock - $1.66 Par Value; 90,000,000 and 19,200,000 Shares  |      | 
|Authorized; 5,115,435 and 5,115,585 Shares Issued and Outstanding |      | 
|Retained Earnings                                                 |      | 
|                                                                  |      | 
|Total Stockholders' Equity                                        |      | 
|                                                                  |      | 
|                                                                 
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        |      | 
|                                                                  |      | 

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

25

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# CONSOLIDATED
STATEMENTS OF INCOMEFOR THE THREE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

---

|                                        | 2004 |  |  
|--------------------------------------- | ---- |  | -
|                                        |      |  |  
|OPERATING REVENUES:                     |      |  |  
|Local Network                           |      |  | $
|Network Access (Note 12)                |      |  |  
|Billing and Collection                  |      |  |  
|Miscellaneous                           |      |  |  
|Video Services                          |      |  |  
|Internet Services                       |      |  |  
|Other Nonregulated Services             |      |  |  
|                                        |      |  |  
|Total Operating Revenues                |      |  |  
|                                        |      |  |  
|OPERATING EXPENSES:                     |      | 
|Plant Operations                        |      |  |  
|Depreciation                            |      |  |  
|Amortization                            |      |  |  
|Customer Operations                     |      |  |  
|Corporate Operations                    |      |  |  
|Cost of Video Services                  |      |  |  
|Cost of Internet Services               |      |  |  
|Other Operating                         |      |  |  
|                                        |      |  |  
|Total Operating Expenses                |      |  |  
|                                        |      |  |  
|OPERATING INCOME                        |      |  |  
|                                        |      |  |  
|OTHER INCOME (EXPENSES):                |      | 
|Interest Expense                        |      |  |  
|Interest Expense - Debt Retirement      |      |  |  
|Interest and Dividend Income            |      |  |  
|Interest During Construction            |      |  |  
|Gain on Dissolution                     |      |  |  
|Equity Earnings in Cellular Partnership |      |  |  
|Other Investment Income (Expense)       |      |  |  
|                                        |      |  |  
|Total Other Income (Expenses)           |      |  |  
|                                        |      |  |  
|INCOME BEFORE INCOME TAXES              |      |  |  
|                                       
|INCOME TAXES                            |      |  |  
|                                        |      |  |  
|NET INCOME                              |      |  | $
|                                        |      |  |  
|BASIC AND DILUTED NET INCOME            |      | 
|PER SHARE                               |      |  | $
|                                        |      |  |  
|DIVIDENDS PER SHARE                     |      |  | $
|                                        |      |  |  

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

26

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITYFOR THE THREE YEARS ENDED DECEMBER 31, 2004,
2003 AND 2002

---

|                             |        |                  
|---------------------------- | ------ | -----------------
|                             |        |                  
|Shares                       | Amount | Retained Earnings
|                             |        |                  
|BALANCE on December 31, 2001 |        |                  
|                            
|Net Income                   |        |                  
|Dividends                    |        |                  
|                             |        |                  
|BALANCE on December 31, 2002 |        |                  
|                            
|Net Income                   |        |                  
|Dividends                    |        |                  
|                             |        |                  
|                            
|BALANCE on December 31, 2003 |        |                  
|Retired Stock                |        |                  
|Net Income                   |        |                  
|Dividends                    |        |                  
|                             |        |                  
|BALANCE on December 31, 2004 |        |                  
|                             |        |                  

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

27

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# CONSOLIDATED
STATEMENTS OF CASH FLOWSFOR THE THREE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

---

|                                                    | 2004 |  |  
|--------------------------------------------------- | ---- |  | -
|                                                    |      |  |  
|CASH FLOWS FROM OPERATING ACTIVITIES:               |      |  |  
|Net Income                                          |      |  | $
|Adjustments to Reconcile Net Income to Net Cash     |      | 
|Provided By Operating Activities:                   |      | 
|Depreciation and Amortization                       |      |  |  
|Undistributed Earnings of Cellular Investment       |      |  |  
|Deferred Income Taxes                               |      |  |  
|Deferred Investment Tax Credits                     |      |  |  
|Gain from Dissolution                               |      |  |  
|Changes in Assets and Liabilities:                  |      | 
|Receivables                                         |      |  |  
|Inventories                                         |      |  |  
|Prepaid Expenses                                    |      |  |  
|Accounts Payable                                    |      |  |  
|Other Accrued Taxes                                 |      |  |  
|Other Accrued Liabilities                           |      |  |  
|                                                    |      |  |  
|Net Cash Provided By Operating Activities           |      |  |  
|                                                    |      |  |  
|CASH FLOWS FROM INVESTING ACTIVITIES:               |      | 
|Additions to Property, Plant and Equipment, Net     |      |  |  
|Redemption of Notes Receivable, Net of Investment   |      |  |  
|Purchase of Cellular Investments                    |      |  |  
|Other, Net                                          |      |  |  
|                                                    |      |  |  
|Net Cash Used In Investing Activities               |      |  |  
|                                                    |      |  |  
|CASH FLOWS FROM FINANCING ACTIVITIES:               |      | 
|Principal Payments of Long-Term Debt                |      |  |  
|Issuance of Long-Term Debt                          |      |  |  
|Retired Stock                                       |      |  |  
|Dividends Paid                                      |      |  |  
|                                                    |      |  |  
|Net Cash Provided By (Used In) Financing Activities |      |  |  
|                                                    |      |  |  
|NET INCREASE (DECREASE) IN CASH                     |      | 
|AND CASH EQUIVALENTS                                |      |  |  
|                                                   
|CASH AND CASH EQUIVALENTS at Beginning of Year      |      |  |  
|                                                    |      |  |  
|CASH AND CASH EQUIVALENTS at End of Year            |      |  | $
|                                                    |      |  |  

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

28

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 1  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

# Basis of Presentation

New Ulm Telecom, Inc.s
(Company) principal line of business is providing local telephone service, Internet,
digital video, and access to long-distance telephone service through local exchange
networks. The Company owns and operates three independent telephone companies serving
seven communities in southern Minnesota, one community in Iowa and the adjacent rural
areas. The Company also has investments in cellular entities and a competitive local
exchange carrier (CLEC), and operates cable television systems in eight communities.

# Principles of
Consolidation

The consolidated financial statements
include the accounts of the Company and its five wholly owned subsidiaries. All
significant inter-company transactions have been eliminated in consolidation.

# Accounting Estimates

The presentation of 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 as of the date of the financial statements and the reported amount of revenues
and expenses during the operating period. Actual results could differ from those
estimates.

# Cash Equivalents

All highly liquid investments with a
maturity of three months or less at the time of purchase are considered cash equivalents.

# Receivables

Receivables are stated at the amounts
the Company expects to collect from outstanding balances. The Company provides for
probable uncollectible amounts through charges to earnings and credits to the valuation
allowance based on its assessment of the current status of individual accounts. Balances
that are still outstanding after the Company has used reasonable collection efforts are
written off through charges to the valuation allowance and credits to receivable accounts.

# Materials, Supplies and
Inventories

Materials, supplies and inventories
are recorded at the lower of average cost or market.

# Property, Plant and
Equipment

Property, plant and equipment are
recorded at original cost. Additions, improvements or major renewals are capitalized. When
telecommunications assets are sold, retired or otherwise disposed of in the ordinary
course of business, the cost, less salvage, is charged to accumulated depreciation and the
original cost is credited to the asset accounts. Any gains or losses on
non-telecommunications property and equipment retirements are reflected in the current
year operations.

29

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 1  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)

# Recoverability of
Long-Lived Assets

The Company reviews its long-lived
assets whenever events or changes in circumstances indicate the carrying amount of the
assets may not be recoverable. The Company determines potential impairment by comparing
the carrying value of its assets with the sum of the undiscounted cash flows expected to
be provided by operating and eventually disposing of the asset. Should the sum of the
expected future net cash flows be less than carrying values, the Company would determine
whether an impairment loss should be recognized. No impairment losses have been identified
in the financial statements.

# Investments and Other
Assets

Investments in a MWH and FiberComm,
LC are recorded using the equity method of accounting, which reflects original cost and
equity in undistributed earnings and losses, because management of the Company believes
they have the ability to significantly influence the operating and financial policies of
these companies.

Long-term investments in other
companies that are not intended for resale or are not readily marketable are valued at the
lower of cost or net realizable value.

# Goodwill and Intangible
Assets

Goodwill represents the excess of the
purchase price of acquisitions and equity method investments over the fair value of the
net assets acquired. Goodwill is not amortized, but, instead, reviewed annually for
possible impairment. In its reviews, the Company has determined that goodwill is not
impaired. Intangible assets with definite lives continue to be amortized.

# Revenue Recognition

Revenues are recognized when earned.
Local network, cable television and Internet revenues are recognized over the period a
subscriber is connected to the network. Interstate access revenues are based on
settlements with the National Exchange Carrier Association. Interstate access settlements
are based on cost studies for New Ulm Telecom, Inc. and by nationwide average cost
schedules for two of its subsidiaries, Western Telephone Company and Peoples Telephone
Company. Access revenues for New Ulm Telecom, Inc. include estimates which management
believes are reasonable, pending finalization of cost studies. Local network and
intrastate access revenues are based on tariffs filed with the state regulatory
commissions.

# Interest During
Construction

The Company includes in its
telecommunications plant account an average cost of debt used for the construction of the
plant.

30

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 1  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)

# Income Taxes and
Investment Tax Credits

The provision for income taxes
consists of an amount for taxes currently payable and a provision for tax consequences
deferred to future periods. Deferred income taxes are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax bases. Significant components
of the Companys deferred taxes arise from differences in the basis of property,
plant, and equipment due to the use of accelerated depreciation methods for tax purposes
and partnerships due to the difference between book and tax income. For financial
statement purposes, deferred investment tax credits are being amortized as a reduction of
the provision for income taxes over the estimated useful lives of the related property,
plant and equipment. Deferred investment tax credits have been fully amortized at December
31, 2004.

# Credit Risk

Financial instruments which
potentially subject the Company to concentrations of credit risk consist principally of
cash and receivables. The Company places its cash investments with high credit quality
financial institutions in accounts which, at times, may exceed the federally insured
limits. The Company has not experienced any losses in these accounts and does not believe
it is exposed to any significant credit risk. Concentrations of credit risk with respect
to trade receivables are limited due to the Companys large number of customers.

# Basic and Diluted Net
Income Per Common Share

Basic and diluted net income per
common share is based on the weighted average number of shares outstanding of 5,115,435
for 2004, 5,115,585 for 2003, and 5,115,585 for 2002. All per share data has been restated
to reflect the three-for-one stock split effective January 10, 2002.

# Reclassifications

The consolidated financial statements
of New Ulm Telecom, Inc. and its subsidiaries include the following three segments: (i)
Telecom Sector, (ii) Cellular Sector, (iii) Phonery Sector. All intercompany activities
have been eliminated from the consolidated financial statements.

Beginning in the first quarter
quarter 2004, New Ulm Telecom, Inc. and its subsidiaries reported business segments of New
Ulm Telecom, Western Telephone, Peoples Telephone, New Ulm Phonery, and Cellular on the
basis of functionality. The new basis of segment reporting reflects the integration of New
Ulm Telecom, Inc.s management, sales, service and support functions in the three
areas of Telecom, Cellular, and Phonery, as well as reflecting the level at which
management reviews and makes resource allocation and other management decisions regarding
the operation of the Company. All segment information reported in 2003 has been
reclassified to conform to the new presentation. These reclassifications had no impact on
previously reported consolidated operating income, net income or stockholders
equity. See note 13 on page 38, for segment information.

31

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 2  PROPERTY,
PLANT AND EQUIPMENT

Property, plant and equipment for
December 31, 2004 and 2003 includes the following:

|                                    | 2004 | 
|----------------------------------- | ---- | 
|                                    |      | 
|Telecommunications Plant:           |      | 
|Land                                |      | 
|Buildings                           |      | 
|Other Support Assets                |      | 
|Central Office Equipment            |      | 
|Cable and Wire Facilities           |      | 
|Other Plant and Equipment           |      | 
|Plant Under Construction            |      | 
|                                    |      | 
|                                    |      | 
|                                    |      | 
|Other Plant:                        |      | 
|Other Property                      |      | 
|Cable Television Plant              |      | 
|                                    |      | 
|                                    |      | 
|                                    |      | 
|Total Property, Plant and Equipment |      | 
|                                    |      | 

Depreciation is computed using the
straight-line method based on estimated service or remaining useful lives of the various
classes of depreciable assets. The composite depreciation rates on telecommunications
plant and equipment for the three years ended December 31, 2004, 2003 and 2002 were 7.2%,
7.6% and 7.4%, respectively. Other property is depreciated over estimated useful lives of
three to fifteen years.

# NOTE 3  CELLULAR
INVESTMENTS

Cellular investments include a 9.88%
ownership interest in units of Midwest Wireless Holdings L.L.C. (MWH) at December 31, 2004
and 2003. This entity provides cellular phone service to southern Minnesota, northwestern
Iowa and southwestern Wisconsin. The difference between the carrying amount of the MWH
investment and the underlying equity in the net assets of MWH at the time of purchase of
ownership interests is $4,890,389 as of December 31, 2004, net of accumulated
amortization of $156,391.

Cellular investments consist of the
following:

|                                   | 2004 | 
|---------------------------------- | ---- | 
|                                   |      | 
|Cost Less Accumulated Amortization |      | 
|Cumulative Income                  |      | 
|Cumulative Distributions           |      | 
|                                   |      | 
|Total                              |      | 
|                                   |      | 

Income and cash distributions from
MWH were as follows for the years ended December 31, 2004, 2003 and 2002:

|                   | 2004 |  |  
|------------------ | ---- |  | -
|                   |      |  |  
|Income Recorded    |      |  | $
|Cash Distributions |      |  |  

32

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 3  CELLULAR
INVESTMENTS (Continued)

The following is summarized financial
information from MWH as of, and for, the years ended December 31, 2004, 2003 and 2002:

|                       | 2004 |  |  
|---------------------- | ---- |  | -
|                       |      |  |  
|Current Assets         |      |  | $
|Noncurrent Assets      |      |  |  
|Current Liabilities    |      |  |  
|Noncurrent Liabilities |      |  |  
|Members' Equity        |      |  |  
|Revenues               |      |  |  
|Operating Income       |      |  |  
|Net Income             |      |  |  

In January of 2002, Cherokee
Cellular, Inc. and Three Lakes Cellular, Inc. were dissolved. These corporations contained
units in MWH. Peoples Telephone Company owned stock in each corporation. The units of
Midwest Wireless Holdings L.L.C. were transferred directly to the shareholders of Cherokee
Cellular, Inc. and Three Lakes Cellular, Inc. The Company recognized a nonmonetary gain of
$1,157,915 on the transfer of units in Midwest Wireless Holdings L.L.C.

# NOTE 4  GOODWILL
AND INTANGIBLES

Under the provisions of SFAS No. 142,
goodwill and intangible assets with indefinite useful lives are not amortized, but instead
are tested for impairment on at least an annual basis.

During 2003 and 2004, the Company
tested the value of its goodwill as required by SFAS No. 142 and determined that the
carrying value of these assets were not impaired.

Goodwill and other non-amortizable
intangibles consist of the following:

|                                        | 2004 | 
|--------------------------------------- | ---- | 
|                                        |      | 
|Included Under the Caption at Year End: |      | 
|Goodwill and Intangibles                |      | 
|Cellular Investments                    |      | 
|                                        |      | 
|                                        |      | 
|                                        |      | 

Amortizable intangibles consist of
the following:

|                          | 2004 | 
|------------------------- | ---- | 
|                          |      | 
|Balance Beginning of Year |      | 
|Intangible amortization   |      | 
|                          |      | 
|Balance End of Year       |      | 
|                          |      | 

33

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 5  LONG-TERM
DEBT

Long-term debt is as follows:

|                                                                      | 2004 | 
|--------------------------------------------------------------------- | ---- | 
|                                                                      |      | 
|Unsecured ten-year note with the City of Redwood Falls, payable       |      | 
|semi-annually (beginning in 2002), at a fixed 5% interest rate,       |      | 
|maturing on January 1, 2013.                                          |      | 
|                                                                     
|Secured ten-year reducing revolving credit facility to CoBank, ACB in |      | 
|quarterly installments of $250,000 (beginning in 2003), plus a        |      | 
|national variable rate of interest through December 20,               |      | 
|2011 (3.95% and 2.62% at December 31, 2004 and 2003).                 |      | 
|                                                                     
|Secured ten-year reducing revolving credit facility to CoBank, ACB in |      | 
|monthly installments of $125,000 (beginning in 2002), plus a national |      | 
|variable rate of interest through December 20,                        |      | 
|2011 (3.95% and 2.62% at December 31, 2004 and 2003).                 |      | 
|                                                                      |      | 
|                                                                      |      | 
|Less amount due within one year                                       |      | 
|                                                                      |      | 
|Long-term debt                                                        |      | 
|                                                                      |      | 

Substantially all assets of the
Company are pledged as security for the long-term debt under certain loan agreements with
CoBank. These mortgage notes are to be repaid in equal quarterly and monthly installments
covering principal and interest beginning in the year after issue and expiring by December
20, 2011.

The security and loan agreements
underlying the CoBank notes contain certain restrictions on distributions to stockholders,
investment in, or loans to, others. In addition, the Company is required to maintain
certain financial ratios for current assets to current liabilities, net worth to total
assets, long-term debt to operating cash flow and debt service coverage. During the years
ended December 31, 2004, 2003 and 2002, the specified financial ratios outlined in the
loan agreements were achieved.

Principal payments required during
the next five years are as follows: 2005 - $2,515,987;
2006 - $2,516,387; 2007 - $2,517,216; 2008 - $2,518,088; and
2009 - $2,519,003.

Cash payments for interest, net of
amounts capitalized, were $552,713, $595,409, and $549,704 in 2004, 2003, and 2002,
respectively.

During 2002, the Company paid off the
remaining balances on its loans with Phoenix Mutual Life. Interest and fees of $271,200
were incurred in connection with the extinguishment of this debt.

34

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 6  INCOME
TAXES AND INVESTMENT TAX CREDITS

Income taxes reflected in the
Consolidated Statements of Income consist of the following:

|                                       | 2004 |  |  
|-------------------------------------- | ---- |  | -
|                                       |      |  |  
|Taxes Currently Payable:               |      |  |  
|Federal                                |      |  | $
|State                                  |      |  |  
|Deferred Income Taxes                  |      |  |  
|Amortization of Investment Tax Credits |      |  |  
|                                       |      |  |  
|Total Income Tax Expense               |      |  | $
|                                       |      |  |  

The differences between the statutory
federal tax rate and the effective tax rate were as follows:

|                                               | 2004 |  | 
|---------------------------------------------- | ---- |  | 
|                                               |      |  | 
|Statutory Tax Rate                             |      |  | 
|Effect of:                                     |      | 
|Surtax exemption                               |      |  | 
|State income taxes, net of federal tax benefit |      |  | 
|Amortization of investment tax credits         |      |  | 
|Non-deductible expenses                        |      |  | 
|Other, net                                     |      |  | 
|                                               |      |  | 
|Effective tax rate                             |      |  | 
|                                               |      |  | 

Deferred income taxes reflected in
the Consolidated Balance Sheets are summarized as follows:

|                                   | 2004 | 
|---------------------------------- | ---- | 
|                                   |      | 
|Deferred Tax (Assets)/Liabilities: |      | 
|Depreciation                       |      | 
|Partnership basis                  |      | 
|Other                              |      | 
|                                   |      | 
|Total                              |      | 
|                                   |      | 

Cash payments net of refunds for
income taxes were $737,299, $1,097,107, and $2,068,031 in 2004, 2003, and 2002,
respectively.

# NOTE 7  RETIREMENT
PLAN

The Company has a 401(k) employee
savings plan in effect for its employees who meet certain age and service requirements.
The Companys contribution to its 401(k) employee savings plan was $197,412, $190,076
and $169,527 in 2004, 2003 and 2002, respectively.

35

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 8  FAIR VALUE
OF FINANCIAL INSTRUMENTS

The following methods and assumptions
were used to estimate the fair value of each class of financial instrument for which it is
practicable to estimate that value.

Long-term investments: It was
not practicable to estimate a fair value for common stock investments in companies carried
on the cost basis due to a lack of quoted market prices. The Company believes the original
cost is not impaired at December 31, 2004.

Long-term debt: The fair value
of the Companys long-term debt is estimated based on the discounted value of the
future cash flows expected to be paid using current rates of borrowing for similar types
of debt. Fair value of the debt approximates carrying value.

# NOTE 9  COMMITMENTS

The Companys capital budget for
2005 is approximately $2,649,000, which will be financed through internally generated
funds. As of December 31, 2004, the Company has no purchase commitments.

# NOTE 10  NONCASH
INVESTING ACTIVITIES

Noncash investing activities included
$87,867, $497,568 and $1,781,447 during the years ended December 31, 2004, 2003 and 2002,
respectively, relating to plant and equipment additions placed in service during 2004,
2003 and 2002, respectively, which are reflected in accounts payable at year end.

# NOTE 11  GUARANTEES

In November 2002, the FASB issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others. This
interpretation elaborates on the disclosures required in financial statements concerning
obligations under certain guarantees. It also clarifies the requirements related to the
recognition of liabilities by a guarantor at the inception of certain guarantees. The
disclosure requirements of this interpretation were effective on December 31, 2002, but
did not require any additional disclosures on the part of the Company. The recognition
provisions of the interpretation effective for 2003 are applicable only to guarantees
issued or modified after December 31, 2002.

On January 30, 2004, The Company
guaranteed the indebtedness of FiberComm, LC (a 25.2075% partnership, which is being
accounted for by the equity method) in connection with the refinancing of a 15-year loan
made by American State Bank to FiberComm, LC. The Companys liability for the
guarantee is not to exceed 12.5% of the indebtedness of FiberComm, LC at default, all of
the accrued interest, and the expenses of collection or protection of lenders rights
and remedies under the guarantee. The Company has recorded a liability of $375,000 in
connection with this guarantee, which is the maximum potential liability under the terms
of the guarantee.

36

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

---

# NOTE 12  NETWORK
ACCESS-QWEST BILLING DISPUTE

In June 2004, the Company adjusted
its estimated receivables downward by $428,697, with a corresponding reduction of network
access revenue by $408,952 and other non-regulated service revenue by $19,745. This
adjustment relates to disputed network access billings from Qwest for a period dating back
to 1995. This dispute is current and ongoing. The Company continues to assess its
estimated revenues and its reserves related to this dispute to accurately reflect the
Companys current expectations regarding the outcome of this dispute. The dispute is
currently before the Minnesota Public Utilities Commission seeking resolution.

37

---

# NEW ULM TELECOM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

---

# NOTE 13  SEGMENT
INFORMATION

The Company is organized into three
business segments: the Telecom Sector, the Cellular Sector and the Phonery Sector. The
Telecom Sector consists of the operations of its incumbent local carriers (ILECs),
its competitive local exchange carrier (CLEC), and its operations that provide internet
and video services. THe Cellular Sector includes the sale and service of cellular phones
and accessories, and a cellular investment in MWH. The cellular investment in the Cellular
Sector is recorded using the equity method and is shown using the proportionate
consolidated method. The Phonery sector includes the sales and service of customer premise
equipment (CPE), transport operations, and the resale of long distance toll service. No
single customer accounted for a material portion of the Companys revenues in any of
the last three years.

Segment information is as follows:

|                              |  |  |   |           
|----------------------------- |  |  | - | ----------
|                              |  |  |   |           
|Year Ended December 31, 2004: |  |  |   |           
|Operating Revenues            |  |  | $ | 13,806,079
|Operating Expenses            |  |  |   | 12,175,762
|                              |  |  |   |           
|Operating Income              |  |  |   | 1,630,317 
|Interest Expense              |  |  |   | (487,128  
|Cellular Investment Income    |  |  |   |          
|Other Investment Income       |  |  |   | 98,753    
|                              |  |  |   |           
|Income Before Income Taxes    |  |  | $ | 1,241,942 
|                              |  |  |   |           
|Depreciation and Amortization |  |  | $ | 4,197,752 
|                              |  |  |   |           
|Total Assets                  |  |  | $ | 86,238,105
|                              |  |  |   |           
|Capital Expenditures          |  |  | $ | 3,004,263 
|                              |  |  |   |           
|Year Ended December 31, 2003: |  | 
|Operating Revenues            |  |  | $ | 14,546,029
|Operating Expenses            |  |  |   | 11,562,742
|                              |  |  |   |           
|Operating Income              |  |  |   | 2,983,287 
|Interest Expense              |  |  |   | (497,742  
|Cellular Investment Income    |  |  |   |          
|Other Investment Income       |  |  |   | 266,728   
|                              |  |  |   |           
|Income Before Income Taxes    |  |  | $ | 2,752,273 
|                              |  |  |   |           
|Depreciation and Amortization |  |  | $ | 4,212,007 
|                              |  |  |   |           
|Total Assets                  |  |  | $ | 83,702,335
|                              |  |  |   |           
|Capital Expenditures          |  |  | $ | 4,132,108 
|                              |  |  |   |           
|Year Ended December 31, 2002: |  | 
|Operating Revenues            |  |  | $ | 12,570,576
|Operating Expenses            |  |  |   | 9,951,876 
|                              |  |  |   |           
|Operating Income              |  |  |   | 2,618,700 
|Interest Expense              |  |  |   | (810,295  
|Cellular Investment Income    |  |  |   |          
|Gain on Dissolution           |  |  |   |          
|Other Investment Income       |  |  |   | (3,972    
|                              |  |  |   |           
|Income Before Income Taxes    |  |  | $ | 1,804,433 
|                              |  |  |   |           
|Depreciation and Amortization |  |  | $ | 3,587,875 
|                              |  |  |   |           
|Total Assets                  |  |  | $ | 82,754,648
|                              |  |  |   |           
|Capital Expenditures          |  |  | $ | 7,766,799 
|                              |  |  |   |           

38

---

# Item 8.    Supplementary
Financial Information

UNAUDITED QUARTERLY
OPERATING RESULTS

|                            
|----------------------------
|                            
|March 31                    
|                            
|2004:                       
|Revenues                    
|Operating Income            
|Net Income                  
|Basic and Diluted Net Income
|per Share                   
|                            
|2003:                       
|Revenues                    
|Operating Income            
|Net Income                  
|Basic and Diluted Net Income
|per Share                   

The revenues, operating income, net
income, and basic and diluted net income per share for the three months ended December 31,
2004 experienced decreases as compared to the same period in 2003. These decreases all
related to reductions in network access revenues due to decreasing access minutes of use,
the negative effects of network access pricing, and a reduction in NECA settlements
experienced in 2004 by the parent company, New Ulm Telecom, Inc., due to a decline in
central office switching and circuit equipment costs allocated to the interstate
jurisdiction.

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

None.

Item 9A.Controls and Procedures

The Company maintains a system of
disclosure controls and procedures, as defined in Exchange Act 13a-15(e), that is designed
to provide reasonable assurance that information, which is required to be disclosed, is
accumulated and communicated to management timely. At the end of the period covered by
this report, the Company carried out an evaluation, under the supervision and with the
participation of our management, including its Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of its disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Companys disclosure
controls and procedures are effective in timely alerting them to material information
relating to the Company that is required to be included in periodic SEC filings.

During the fourth quarter of 2004,
there were no changes in the Companys internal control over financial reporting or
in other factors that have materially affected, or are reasonably likely to materially
affect, the Companys internal control over financial reporting.

# Item 9B.     Other
Information

None.

39

---

# PART III

# Item 10. Directors
and Executive Officers of the Registrant

The Company incorporates by reference
the information contained under the captions Proposal No. 1: Election of
Directors, The Board of Directors and Committees and Section 16(a)
Beneficial Ownership Reporting Compliance in its definitive proxy statement for the
annual meeting of shareholders to be held May 5, 2005.

Pursuant to General Instruction G(3)
to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K, information regarding
executive officers of the Company is provided in Part I of this Form 10-K under separate
caption.

The Company has adopted a code of
conduct that applies to all officers, directors, and employees. This code of conduct is
available on the Companys website at www.newulmtel.net and in print upon written
request to New Ulm Telecom, Inc., 27 North Minnesota Street, New Ulm, Minnesota 56073,
Attention: Chief Financial Officer. Any amendment to, or waiver from, a provision of our
code of conduct will be posted to the above-referenced website.

# Item 11.
Executive Compensation

The Company incorporates by reference
the information contained under the captions Executive Compensation and
Non-Employee Director Compensation in its definitive proxy statement for the
annual meeting of shareholders to be held May 5, 2005.

# Item 12.
Security Ownership of Certain Beneficial Owners and Management

The Company incorporates by reference
the information contained under the caption Security Ownership of Certain Beneficial
Owners and Management in its definitive proxy statement for the annual meeting of
shareholders to be held May 5, 2005.

The Company does not maintain any
equity compensation plans.

# Item 13.
Certain Relationships and Related Transactions

The Company incorporates by reference
the information contained under the caption Certain Relationships and Related
Transactions in its definitive proxy statement for the annual meeting of
shareholders to be held May 5, 2005.

# Item 14. Principal
Accounting Fees and Services

The Company incorporates by reference
the information contained under the caption Independent Registered Public Accounting
Firm in its definitive proxy statement for the annual meeting of shareholders to be
held May 5, 2005.

40

---

# PART IV

# Item 15. Exhibits,
Financial Statement Schedules and Reports on Form 8-K

|(a) 1. | Consolidated Financial Statements
Included in Part II, Item 8, of this report:                                                                                                                                                                                                                                                                                                                                        |        
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                       | Pages  
|      
|       | Independent Registered Public Accounting Firm's Report                                                                                                                                                                                                                                                                                                                                                                | 23     
|      
|       | Consolidated Balance Sheets at December 31, 2004 and 2003                                                                                                                                                                                                                                                                                                                                                             | 24 - 25
|      
|       | Consolidated Statements of Income for the Three Years Ended
                   December 31, 2004, 2003 and 2002                                                                                                                                                                                                                                                                                                       | 26     
|      
|       | Consolidated Statements of Stockholders' Equity for the Three
                  Years Ended December 31, 2004, 2003 and 2002                                                                                                                                                                                                                                                                                          | 27     
|      
|       | Consolidated Statements of Cash Flows for the Three Years
                          Ended December 31, 2004, 2003 and 2002                                                                                                                                                                                                                                                                                            | 28     
|      
|       | Notes to Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                            | 29 - 38
|      
|(a) 2. | Consolidated Financial Statement schedules:                                                                                                                                                                                                                                                                                                                                                                           |        
|      
|       | Independent Registered Public Accounting Firm's Report on
                        Financial Statement Schedule                                                                                                                                                                                                                                                                                                        | 42     
|      
|       | Schedule II - Valuation and Qualifying Accounts                                                                                                                                                                                                                                                                                                                                                                       | 43     
|      
|       | Separate financial statements of Midwest Wireless Holdings

                                L.L.C., a 50 percent or less owned equity method investment,

                                are included as part of this report because this entity constitutes

                                a "significant subsidiary" pursuant to the provisions of
                                Regulation S-X, Article 3-09. | 44 - 60
|      
|       | Other schedules are omitted because they are not required or are

                        not applicable, or the required information is shown in the

                        financial statements or notes thereto                                                                                                                                                                                                  |        
|      
|(b)    | Exhibits Required                                                                                                                                                                                                                                                                                                                                                                                                     |        
|      
|       | See "Index to Exhibits"                                                                                                                                                                                                                                                                                                                                                                                               | 62     

41

---

# INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRMS REPORT ON FINANCIAL STATEMENT SCHEDULE

To the Shareholders and Board of
Directors of New Ulm Telecom, Inc.

Our audits of the consolidated
financial statements referred to in our report dated February 4, 2005 also included an
audit of the financial statement schedules listed in Item 15(a)2 of this Form 10-K. In our
opinion, this financial statement schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related consolidated
financial statements.

/s/ KIESLING ASSOCIATES
LLPWest Des Moines, Iowa
February 4, 2005

42

---

# Schedule II 
Valuation and Qualifying Accounts

Allowance for
Uncollectible Accounts

|                       |  |  |   |         | 
|---------------------- |  |  | - | ------- | 
|New Ulm                |  |  | $ | 18,500  | 
|Western                |  |  |   | 15,000  | 
|Peoples                |  |  |   | 6,000   | 
|                       |  |  |   |         | 
|                       |  |  |   | 39,500  | 
|                       |  |  |   |         | 
|Interexchange Carriers |  | 
|                       |  |  |   |         | 
|New Ulm                |  |  |   | 39,000  | 
|Western                |  |  |   | 24,000  | 
|                       |  |  |   |         | 
|Total                  |  |  |   | 63,000  | 
|                       |  |  |   |         | 
|                       |  |  | $ | 102,500 | 
|                       |  |  |   |         | 

43

---

# Midwest WirelessHoldings L.L.C.

# Consolidated Financial
StatementsDecember 31, 2004, 2003 and 2002

44

---

# Report of Independent
Auditors

To the Board of Managers and Members ofMidwest
Wireless Holdings L.L.C.

In our opinion, the accompanying
consolidated statements of financial position and the related consolidated statements of
operations, changes in members equity, and cash flows present fairly, in all
material respects, the financial position of Midwest Wireless Holdings L.L.C. (the Company)
and subsidiaries at December 31, 2004 and 2003, and the results of their operations
and their cash flows for each of the three years in the period ended December 31,
2004, in conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements 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, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.As discussed in Note 2 to the
financial statements, the Company adopted Statement of
Financial Accounting Standards No. 143, Accounting for Asset Retirement
Obligations, on January 1, 2003.

/s/
PRICEWATERHOUSECOOPERS LLP

Minneapolis,
MinnesotaFebruary 11,
2005

45

---

Midwest Wireless
Holdings L.L.C.Consolidated Statements of Financial PositionDecember 31, 2004 and
2003

---

|                                                             | 2004 | 2003
|------------------------------------------------------------ | ---- | ----
|                                                            
|Assets                                                       |      |     
|Current assets                                               |      |     
|Cash and cash equivalents                                    |      |     
|Accounts receivable, less allowance for doubtful accounts of |      |     
|$716,100 and $690,115 in 2004 and 2003, respectively         |      |     
|Inventories                                                  |      |     
|Other current assets                                         |      |     
|                                                             |      |     
|Total current assets                                         |      |     
|Property, cellular plant and equipment, net                  |      |     
|FCC licenses                                                 |      |     
|Other intangible assets, net                                 |      |     
|Investments in cooperatives                                  |      |     
|                                                             |      |     
|Total assets                                                 |      |     
|                                                             |      |     
|Liabilities and Members' Equity                              |      |     
|Current liabilities                                          |      |     
|Current portion of debt                                      |      |     
|Accounts payable                                             |      |     
|Other accrued expenses                                       |      |     
|Deferred revenue                                             |      |     
|                                                             |      |     
|Total current liabilities                                    |      |     
|                                                            
|Other liabilities                                            |      |     
|Debt                                                         |      |     
|                                                             |      |     
|Total liabilities                                            |      |     
|                                                            
|Minority interest                                            |      |     
|                                                            
|Commitments                                                  |      |     
|                                                            
|Members' equity                                              |      |     
|                                                             |      |     
|Total liabilities and members' equity                        |      |     
|                                                             |      |     

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

46

---

Midwest Wireless
Holdings L.L.C.Consolidated Statements of Operations Years Ended December 31,
2004, 2003 and 2002

---

|                                            | 2004 | 2003 | 2002
|------------------------------------------- | ---- | ---- | ----
|                                           
|Operating revenues                          |      |      |     
|Subscriber service                          |      |      | $   
|Roamer service                              |      |      |     
|Equipment sales and other                   |      |      |     
|                                            |      |      |     
|                                            |      |      |     
|                                            |      |      |     
|Operating expenses                          |      |     
|Operations and maintenance (exclusive of    |      |     
|items shown separately below)               |      |      |     
|Cost of equipment sold                      |      |      |     
|Home roamer costs                           |      |      |     
|Depreciation                                |      |      |     
|Amortization of intangible assets           |      |      |     
|Selling, general and administrative         |      |      |     
|                                            |      |      |     
|                                            |      |      |     
|                                            |      |      |     
|Operating income                            |      |      |     
|                                            |      |      |     
|Other income (expense)                      |      |     
|Interest expense                            |      |      |     
|Interest and dividend income                |      |      |     
|Gain on disposal of FCC licenses            |      |      |     
|Other                                       |      |      |     
|                                            |      |      |     
|Total other expense                         |      |      |     
|                                            |      |      |     
|Minority interest                           |      |      |     
|                                            |      |      |     
|Income before cumulative effect of change   |      |     
|in accounting principle                     |      |      |     
|                                           
|Cumulative effect of change in accounting   |      |     
|principle net of minority interest (Note 2) |      |      |     
|                                            |      |      |     
|Net income                                  |      |      | $   
|                                            |      |      |     

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

47

---

Midwest Wireless
Holdings L.L.C.Consolidated Statements of Changes in Members Equity
Years Ended December 31, 2004, 2003 and 2002

---

|                                             | CapitalContributions | AccumulatedIncome | TotalMembersEquity
|-------------------------------------------- | -------------------- | ----------------- | -------------------
|                                            
|Balances at December 31, 2001                |                      |                   | $                  
|Redemption                                   |                      |                   |                    
|Distributions to members                     |                      |                   |                    
|Net income                                   |                      |                   |                    
|                                             |                      |                   |                    
|Balances at December 31, 2002                |                      |                   |                    
|Issuance of units related to the acquisition |                      |                  
|of Iowa properties                           |                      |                   |                    
|Distributions to members                     |                      |                   |                    
|Net income                                   |                      |                   |                    
|                                             |                      |                   |                    
|Balances at December 31, 2003                |                      |                   |                    
|Distributions to members                     |                      |                   |                    
|Net income                                   |                      |                   |                    
|                                             |                      |                   |                    
|Balances at December 31, 2004                |                      |                   | $                  
|                                             |                      |                   |                    

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

48

---

Midwest Wireless
Holdings L.L.C.Consolidated Statements of Cash Flows Years Ended December 31,
2004, 2003 and 2002

---

|                                                    | 2004 | 2003 | 2002
|--------------------------------------------------- | ---- | ---- | ----
|                                                   
|Cash flows from operating activities                |      |      |     
|Net income                                          |      |      | $   
|Adjustments to reconcile net income to net cash     |      |     
|provided by operating activities                    |      |     
|Net income allocated to minority interest           |      |      |     
|Provision for bad debts                             |      |      |     
|Depreciation                                        |      |      |     
|Amortization of intangibles                         |      |      |     
|Gain on disposal of assets                          |      |      |     
|Writeoff of Cellular 2000, Inc. investment          |      |      |     
|Patronage received in form of cooperative stock     |      |      |     
|Appreciation Rights Plan compensation               |      |      |     
|Cumulative effect of accounting change              |      |      |     
|Changes in assets and liabilities                   |      |     
|Accounts receivable                                 |      |      |     
|Inventories                                         |      |      |     
|Other assets                                        |      |      |     
|Accounts payable                                    |      |      |     
|Deferred revenue and accrued expenses               |      |      |     
|Other liabilities                                   |      |      |     
|                                                    |      |      |     
|Net cash provided by operating activities           |      |      |     
|                                                    |      |      |     
|Cash flows from investing activities                |      |     
|Acquisition of cellular properties                  |      |      |     
|Payments for property, cellular plant and equipment |      |      |     
|Proceeds from the disposal of fixed assets          |      |      |     
|Proceeds from the disposal of FCC licenses          |      |      |     
|Purchase of intangible assets                       |      |      |     
|Purchases of cooperative stock                      |      |      |     
|Redemption of cooperative stock                     |      |      |     
|                                                    |      |      |     
|Net cash used in investing activities               |      |      |     
|                                                    |      |      |     
|Cash flows from financing activities                |      |     
|(Payments) proceeds on revolving loan               |      |      |     
|Proceeds from debt borrowings                       |      |      |     
|Payments on debt                                    |      |      |     
|Distributions to members                            |      |      |     
|Distribution from subsidiary to minority interest   |      |      |     
|Redemption of units                                 |      |      |     
|                                                    |      |      |     
|Net cash (used in) provided by financing            |      |     
|activities                                          |      |      |     
|                                                    |      |      |     
|Net change in cash and cash equivalents             |      |      |     
|                                                   
|Cash and cash equivalents                           |      |     
|Beginning of year                                   |      |      |     
|                                                    |      |      |     
|End of year                                         |      |      | $   
|                                                    |      |      |     
|Supplemental disclosure                             |      |     
|Cash paid during the year for interest              |      |      | $   
|Equity units issued for acquisitions                |      |      |     
|                                                   
|Noncash investing activities                        |      |     
|Equipment acquired under capital leases             |      |      |     

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

49

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

|1. |  | Business
DescriptionMidwest Wireless Holdings L.L.C. (the Company) was formed in
November 1999 as a Delaware limited liability company to acquire and operate
cellular communications properties in the Midwest portion of the United States of
America. Upon its formation, the Company exchanged its equity units for approximately 86%
of the equity units of Midwest Wireless Communications, L.L.C.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Summary
of Significant Accounting PoliciesConsolidation
The consolidated financial statements include the Companys wholly owned subsidiaries,
Midwest Wireless Iowa, L.L.C. and Midwest Wireless Wisconsin, L.L.C., as well as its
majority owned subsidiary, Midwest Wireless Communications, L.L.C. All significant
intercompany balances and transactions have been eliminated in consolidation.Use of EstimatesThe preparation of 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 at the date of the
financial statements and disclosure of contingent assets and liabilities at the date of
the financial statements. Estimates also affect the reported amounts of revenues and
expenses during the periods reported. Actual results could differ from those estimates.Concentration of Credit RiskThe Company provides cellular service and cellular telephones to a diversified group of
consumers within a concentrated geographical area. The Company performs credit evaluations
of its customers and requires a deposit when deemed necessary. Receivables are generally
due within 30 days.Cash and Cash EquivalentsCash
and cash equivalents include cash on deposit and highly liquid investments with original
maturities of three months or less that are readily convertible to cash. The Company has
funds on deposit with financial institutions that exceed federally insured limits as of
December 31, 2004 and 2003.Inventories
Inventories consist primarily of cellular phones and accessories held for resale. Inventories are
stated at the lower of cost or market, with cost determined using the specific
identification method. Losses on sales of cellular phones are recognized in the period in
which sales are made as a cost of acquiring subscribers.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

50

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

| |  | Property, Cellular
Plant and EquipmentProperty, cellular plant and equipment is stated at its original
cost. Depreciation and amortization are provided on a straight-line basis over the
estimated useful lives of the assets. The estimated useful lives of property, cellular
plant and equipment are as follows:
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Building and improvements           |  |  | 3-30 years |  | 
|----------------------------------- |  |  | ---------- |  | 
|Other equipment                     |  |  | 2-20 years |  | 
|Communication and network equipment |  |  | 7-15 years |  | 
|Vehicles                            |  |  | 3 years    |  | 
|Computer equipment                  |  |  | 3 years    |  | 

| |  | Major renewals
or betterments are capitalized, while repair and maintenance expenditures are charged to
operations as incurred. Interest costs related to qualifying construction projects are
capitalized. The cost and accumulated depreciation of property, cellular plant and
equipment disposed of or sold are eliminated from their respective accounts, and the
resulting gain or loss is recorded in operations.Asset Retirement Obligation
On January 1, 2003, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 143, Accounting for Asset Retirement
Obligations. This statement relates to the costs of closing facilities and removing
assets. SFAS No. 143 requires entities to record the fair value of a legal liability
for an asset retirement obligation (ARO) in the period it is incurred if a
reasonable estimate of fair value can be made. This cost is initially capitalized and
amortized over the remaining life of the underlying asset. Once the obligation is
ultimately settled, any difference between the final cost and the recorded liability is
recognized as a gain or loss. For the Company, an ARO includes those costs associated with
removing component equipment that is subject to retirement from cell sites that reside
upon leased property. As a result of adopting SFAS No. 143, on January 1, 2003,
the Company recorded an ARO of $1,266,744 and a cumulative effect of the change in
accounting principle of $850,693. The cumulative effect of this change resulted from
accumulated accretion and depreciation of the ARO and related asset for the period from
January 1, 1998 through December 31, 2002. After a minority interest effect of
$95,703, the net charge was $754,990. Accretion and depreciation expenses related to the
ARO for the years ended December 31, 2004 and 2003 were $192,748 and $186,161,
respectively.Intangible Assets and Other Long-Lived Assets
FCC licenses consist of the cost of acquiring cellular, personal communication services
(PCS), and local multi-point distribution licenses. It also includes the value
assigned to cellular licenses acquired through the acquisitions of operating cellular
systems. The Company ceased amortization of its FCC licenses effective January 1,
2002, with the adoption of SFAS No. 142, Goodwill and Other Intangible Assets
(Note 3). Customer relationships are amortized on a straight-line basis over their
useful lives which range from two to six years.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

51

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

| |  | The Company
reviews goodwill and FCC licenses for impairment annually, or more frequently if changes
in circumstances or the occurrence of events suggest an impairment exists. The test for
impairment of goodwill and other intangible assets requires the Company to make estimates
about fair value.
The Company periodically reviews customer relationships and other long-lived assets for
impairment whenever events or changes in circumstances indicate that the carrying value of
the assets may not be recoverable. Recoverability is based on projected cash flows on an
undiscounted basis.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Investments in
CooperativesInvestments in cooperatives are recorded using the cost method as the Company
does not have the ability to exercise significant influence over the financial and
operating policies of the investees. The investments were originally purchased pursuant
to the terms of loan agreements with Rural Telephone Finance Cooperative and CoBank, ACB
(Note 7). Changes in the investment balances are due to the receipt of additional
shares of stock of the investees from noncash patronage refunds net of the redemption of
certain shares held by the Company.Revenue Recognition
Subscriber service revenue consists of the base monthly service fee and airtime charges to our
customers. Base monthly service fees are billed one month in advance and are recognized in
the month earned. Roamer service revenue includes charges to other wireless
providers customers who use the Companys network. Airtime and roamer revenues
are recognized when the service is provided. Billings in advance of the delivery of
service are recorded as deferred revenue. The Company recognizes equipment revenue when
the equipment is delivered to customers.Income Taxes
No provision for income taxes has been recorded since all income, losses and tax credits are
allocated to the members for inclusion in their respective income tax returns.Advertising
Advertising costs are expensed as incurred. Total advertising expenses were $4,584,877, $3,310,758 and
$3,317,280 for the years ended December 31, 2004, 2003 and 2002, respectively.Unit-Based Compensation
The Company accounts for unit-based compensation using the intrinsic value method.
Accordingly, compensation cost for unit options granted to employees is measured as the
excess, if any, of the fair value of the unit at the date of grant over the amount an
employee must pay to acquire the units. Such compensation costs are amortized over the
underlying options vesting term. No such compensation expense was recognized in the
financial statements for the years ended December 31, 2004, 2003 and 2002.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

52

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

| |  | If the Company had elected to recognize compensation expense for options granted
using the fair value method, net income would have been as follows:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

|                                   | 2004 | 2003 | 2002
|---------------------------------- | ---- | ---- | ----
|                                   |      |      |     
|Net income, as reported            |      |      | $   
|Deduct:  Total unit-based employee |      |      |     
|compensation expense determined    |      |      |     
|under fair value based method for  |      |      |     
|all awards                         |      |      |     
|                                   |      |      |     
|Pro forma net income               |      |      | $   
|                                   |      |      |     

|
|

| | For purposes
of the pro forma disclosures above, the weighted average fair value per unit option
granted in 2004, 2003 and 2002 was $19.48, $10.67 and $66.12, respectively. The fair
value for each option was estimated at the date of grant using the minimum value method
with the following weighted average assumptions:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        | Fiscal Year
|----------------------- | -----------
|                        | 2003       
|                        |            
|Dividend yield          | 3.36%      
|Risk-free interest rate | 4.50%      
|Expected lives          | 10 years   

| |  | Reclassifications
Certain reclassifications have been made to prior year amounts to conform to the current year
presentation. These reclassifications did not change the Companys previously
reported members equity, net income or net cash flows.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | FCC
Licenses, Goodwill and Other Intangible Assets
Effective January 1, 2002, the Company adopted SFAS No. 142. Effective with the adoption
of this standard, the Company ceased amortizing FCC licenses, which provide the Company
with the exclusive right to utilize certain radio frequency spectrum to provide wireless
communication services. Although the FCC licenses are issued for only a fixed time,
generally ten years, they are subject to renewal by the FCC; but the renewals have
occurred routinely and at nominal cost. Moreover, there are currently no legal,
regulatory, contractual, competitive, economic, or other factors that limit the useful
lives of these licenses. As a result, FCC licenses are treated as indefinite-lived
intangible assets and are not amortized, but rather are tested annually for impairment.
The Company evaluates the useful life determination for FCC licenses each reporting period
in order to determine whether events and circumstances continue to support an indefinite
life.
The Company completed the annual impairment assessments of its FCC licenses and goodwill on December 31, 2004 and 2003, and determined that
there were no impairments.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

53

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

| | On
October 15, 2003, the Company acquired various cellular communications properties
(Note 5). The Company allocated the excess purchase price over the fair value of the
net assets acquired, including identifiable intangible assets, to goodwill. As a result of
this acquisition, $9,426,669 of goodwill was recorded.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Indefinite-lived
intangible assets consist of the following at December 31:
| | ---------------------------------------------------------------------------

|                                | 2004 |  | 2003
|------------------------------- | ---- |  | ----
|                                |      |  |     
|FCC licenses                    |      |  | $   
|Less:  Accumulated amortization |      |  |     
|                                |      |  |     
|                                |      |  | $   
|                                |      |  |     

| | The
changes in the carrying amount of goodwill and FCC licenses for the year ended
December 31, 2004, are as follows:
| | ---------------------------------------------------------------------------------------------------------------------

|                                                     | Goodwill |  | FCC Licenses
|---------------------------------------------------- | -------- |  | ------------
|                                                     |          |  |             
|Balances as of December 31, 2002                     |          |  | $           
|                                                     |          |  |             
|Assets acquired or finally allocated during the year |          |  |             
|                                                     |          |  |             
|Balances as of December 31, 2003                     |          |  |             
|                                                     |          |  |             
|Assets acquired or finally allocated during the year |          |  |             
|FCC License sold or disposed of during the year      |          |  |             
|                                                     |          |  |             
|Balances as of December 31, 2004                     |          |  | $           
|                                                     |          |  |             

| | Definite-lived
intangible assets consist of the following at December 31:
| | -------------------------------------------------------------------------

|                                | 2004 |  | 2003
|------------------------------- | ---- |  | ----
|                                |      |  |     
|Customer relationships          |      |  | $   
|Less:  Accumulated amortization |      |  |     
|                                |      |  |     
|                                |      |  | $   
|                                |      |  |     

| | Amortization
expense related to definite-lived intangible assets was $1,712,858, $267,278 and $0 in
2004, 2003 and 2002, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------

| | Estimated amortization expense of definite-lived  intangible assets for the next
five years is as follows:
| | ----------------------------------------------------------------------------------------------------------

|     | 
|---- | 
|2005 | 
|2006 | 
|2007 | 
|2008 | 
|2009 | 

54

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

|4. | Select Account Information
|-- | --------------------------

| | Property, Cellular Plant and Equipment
| | --------------------------------------

|                                                 | 2004 |  | 2003
|------------------------------------------------ | ---- |  | ----
|                                                
|Land                                             |      |  | $   
|Plant in service                                 |      |  |     
|Plant under construction                         |      |  |     
|                                                 |      |  |     
|                                                 |      |  |     
|                                                 |      |  |     
|Less:  Accumulated depreciation and amortization |      |  |     
|                                                 |      |  |     
|                                                 |      |  | $   
|                                                 |      |  |     

| | The
Company capitalized interest in the amount of $532,961, $385,157 and $443,911 for the
years ended December 31, 2004, 2003 and 2002, respectively. At December 31, 2004
and 2003, accounts payable included $1,014,661 and $612,404, respectively, related to the
purchase of property, cellular, plant and equipment. Property, cellular plant and
equipment at December 31, 2004, includes plant in service under lease with a cost
basis of $4,630,679 and accumulated amortization of $919,284. Property, cellular plant and
equipment at December 31, 2003, includes plant in service under lease with a cost
basis of $3,244,433 and accumulated amortization of $118,251.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Other Accrued Expenses
| | ----------------------

|                                        | 2004 |  | 2003
|--------------------------------------- | ---- |  | ----
|                                       
|Accrued commissions, wages and benefits |      |  | $   
|Property and pass-through taxes payable |      |  |     
|Interest payable                        |      |  |     
|Other accrued expenses                  |      |  |     
|                                        |      |  |     
|                                        |      |  | $   
|                                        |      |  |     

|5. | Acquisition
|-- | -----------

| | On
October 15, 2003, the Company, through its wholly owned subsidiary, Midwest Wireless
Iowa, L.L.C., completed an acquisition of cellular communications properties providing
services to a 17-county area of Iowa.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
acquisition was accounted for as a purchase. Accordingly, the Company allocated the excess
purchase price over the fair value of the net tangible assets acquired to FCC licenses,
Goodwill and Customer Relationships. The fair value of the acquired intangible assets was
based on an independent appraisal of the FCC licenses and Customer Relationships. The
Company is amortizing the value of Customer Relationships over six years. The financial
statements include the operations related to the acquisition beginning at the acquisition
date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

55

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

| | The
following table presents the computation of the purchase price, the estimated fair value
of tangible assets, FCC Licenses, Customer Relationships acquired, and the amount
allocated to goodwill. Amounts were allocated to tangible assets and liabilities based
upon their fair values as of the date of acquisition. The fair value of property, cellular
plant and equipment was based upon an independent appraisal.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                   | 
|-------------------------------------------------- | 
|Cash                                               | 
|Equity units issued                                | 
|Acquisition costs                                  | 
|Liabilities assumed and resulting from acquisition | 
|Accounts payable and accrued liabilities           | 
|Customer deposits                                  | 
|Deferred revenue                                   | 
|Allowance for customer conversion                  | 
|                                                   | 
|Total purchase price                               | 
|                                                   | 
|Estimated fair value of tangible assets acquired   | 
|Accounts receivable                                | 
|Prepaid expenses and unbilled revenue              | 
|Investment in cooperatives                         | 
|Property, cellular plant and equipment             | 
|                                                   | 
|Total tangible assets                              | 
|                                                   | 
|Estimated fair value of intangible assets acquired | 
|Customer relationships                             | 
|FCC licenses                                       | 
|                                                   | 
|Total intangible assets                            | 
|                                                   | 
|Net assets acquired                                | 
|                                                   | 
|Goodwill                                           | 
|                                                   | 

|6. | Members Capital
|-- | ----------------

| | Members
capital includes capital contributions made by the members and the accumulated income
resulting from operations less distributions. Company income or loss is allocated to the
individual members based upon their ownership percentage, as defined in the Limited
Liability Company Agreement (the Agreement). Pursuant to the Agreement,
members are not obligated for the debts and obligations of the Company, including
accumulated losses in excess of capital contributions.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Under
the Agreement certain restrictions exist that dictate the specific terms of any transfer
or sale of units. Upon receipt of a bona fide offer in writing from a third party, the
other members and then the Company have the right to purchase all, but not less than all,
of the units at the bona fide offer price within a specified time frame.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

56

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

| | The
Agreement also contains the right of co-sale under which no member may transfer its units
to an acquiring person, as defined in the Agreement, who after such transfer would be an
acquiring person without assuring that each of the other members may participate in the
transfer of units under the same terms and conditions. The right of co-sale would
terminate in the event the Company completes a sale of securities pursuant to a securities
act and if the Companys market capitalization would exceed $200,000,000.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Each
member is entitled to one vote for each unit owned. Certain restrictions on voting rights
exist when units are sold to an acquiring person. Distributions to members of $9,167,110,
$9,491,691 and $8,343,869 were declared and paid during 2004, 2003 and 2002, respectively.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | Debt
|-- | ----

| | Debt consists of the following:
| | -------------------------------

|                           | Rate at
December 31 |  | Balance at
December 31
|-------------------------- | ------------------- |  | ----------------------
|                           |                     |  |                       
|
|                          
|RTFC note, variable rate   |                     |  |                       
|RTFC note, variable rate   |                     |  |                       
|RTFC note, variable rate   |                     |  |                       
|RTFC note, variable rate   |                     |  |                       
|RTFC note, variable rate   |                     |  |                       
|RTFC note, variable rate   |                     |  |                       
|CoBank note, variable rate |                     |  |                       
|CoBank note, variable rate |                     |  |                       
|Farm Credit Leasing        |                     |  |                       
|Farm Credit Leasing        |                     |  |                       
|Farm Credit Leasing        |                     |  |                       
|                           |                     |  |                       
|                           |                     |  |                       
|                          
|Less:  Current maturities  |                     |  |                       
|                           |                     |  |                       
|                           |                     |  |                       
|                           |                     |  |                       

| | The
Company has entered into various agreements (the Agreements) with the Rural
Telephone Finance Cooperative (RTFC). In 2000, the Company entered into an
agreement to fund the acquisitions of certain Iowa and Wisconsin cellular markets and the
construction of a new headquarters building. The principal and interest on the variable
and fixed rate notes are payable in quarterly installments. The Agreements provide the
Company the option to fix the interest rate on borrowings (or portions thereof) through
the maturity date. The variable rate is based on RTFCs cost of capital and is
adjusted monthly.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
RTFC agreements contain restrictions on, among other things, the payment of dividends,
except related to the members for income tax purposes, maintaining an interest in RTFC by
the Company, and redemptions of equity. In addition, the agreements contain financial
covenants requiring the Company, among other things, to satisfy covenant ratios related to
the levels of outstanding long-term debt, net worth and debt service coverage.
Substantially all assets of the Company are pledged as collateral under the Agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

57

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

| | On
October 22, 2001, the Company entered into an agreement with CoBank, ACB
(CoBank) to fund the acquisition of various PCS licenses, capital expenditures
and operating funds. The original agreement provided for borrowings of up to $40,000,000.
On November 22, 2002, the Company amended the agreement to provide for borrowings of
up to $65,000,000, amended the interest rate pricing, and extended the expiration date to
October 20, 2003. On October 15, 2003, the Company amended the agreement to
provide for borrowings up to $80,000,000 including a single draw term loan of $55,000,000
and a $20,000,000 revolving loan (Revolver B) each with interest at LIBOR
plus a variable margin of 3.0% to 3.5% or prime plus a variable margin of 2.0% to 2.5%,
and a $5,000,000 cash management revolving loan (Revolver A) with
interest at prime plus 0.75%. The total facility matures on June 30, 2009. The term
facility has scheduled principal payments beginning the first quarter of 2005.
Revolver B has mandatory commitment reductions beginning in the first quarter of
2007.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
CoBank loan is subject to various covenants including a limit on the ratio of indebtedness
to annualized operating cash flow, a minimum ratio of operating cash flow to interest
paid, and a minimum debt coverage service ratio. Substantially all the assets of the
Company are pledged as collateral under the agreement with CoBank.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | RTFC
and CoBank have agreed to share a security interest in the Companys assets on a pro
rata basis.
| | -----------------------------------------------------------------------------------------------------

| | On
October 10, 2003, the Company entered into a lease agreement with Farm Credit
Leasing. The Company entered into a lease under the agreement on October 15, 2003,
for the lease of a switch and related equipment located in Des Moines, Iowa. The cost of
the equipment leased was $2,000,000. The lease provides for monthly payments of $48,385
for 36 months. On December 24, 2003, the Company entered into a second lease under
the agreement for the lease of network equipment. The cost of the equipment was
$1,040,177. The lease provides for monthly payments of $15,963 for 60 months. On
December 21, 2004, the Company entered into a third lease under the agreement for the
lease of network equipment. The cost of the equipment was $1,386,246. The lease provides
for monthly payments of $21,960 for 60 months. All three of these leases have been
recorded as capital leases and therefore the assets subject to the lease have been
capitalized and the present value of the lease obligation has been recorded as debt.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Maturities
of debt are as follows: |  |  |   |             | 
|---------------------------------- |  |  | - | ----------- | 
|                                  
|2005                               |  |  | $ | 22,590,500  | 
|2006                               |  |  |   | 26,676,010  | 
|2007                               |  |  |   | 34,560,401  | 
|2008                               |  |  |   | 42,312,090  | 
|2009                               |  |  |   | 27,595,382  | 
|Thereafter                         |  |  |   | 7,601,927   | 
|                                   |  | 
|                                   |  |  | $ | 161,336,310 | 
|                                   |  | 

58

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

|8. | Operating Lease
Commitments
|-- | ---------------------------

| | Future
minimum rental payments required under operating leases, principally for real estate
related to tower sites, and other contractual commitments that have initial or remaining
noncancellable terms in excess of one year at December 31, 2004, are as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           | 
|---------- | 
|2005       | 
|2006       | 
|2007       | 
|2008       | 
|2009       | 
|Thereafter | 
|           | 
|           | 
|           | 

| | Rental
expense under operating leases was $3,452,526, $2,079,076 and $1,645,524 for the years
ended December 31, 2004, 2003 and 2002, respectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------

|9. | Employee Benefits
|-- | -----------------

| | The
Company established the Midwest Wireless Holdings L.L.C. and Subsidiary Companies 401(k)
Profit Sharing Plan and Trust (formerly the Midwest Wireless Communications L.L.C. Profit
Sharing Plan and Trust) (the 401(k) Plan) for all employees who meet certain
service and age requirements. The 401(k) Plan is comprised of an employer matching
contribution component and a profit sharing component. Employer matching contributions to
this component of the plan were $614,909, $493,124 and $473,644 for the years ended
December 31, 2004, 2003 and 2002, respectively. Employer matching contributions vest
over one year. Profit sharing contribution expenses were $788,605, $597,716 and $544,981
for the years ended December 31, 2004, 2003 and 2002, respectively. Profit sharing
contributions are 100% vested after five years of employment.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Effective
January 1, 1997, the Company established the Midwest Wireless Holdings L.L.C.
Appreciation Rights Plan, as amended (formerly the Midwest Wireless Communications L.L.C.
Appreciation Rights Plan) (the Plan) for certain key employees. The Plan is
designed to create two classes of appreciation rights, Class A and Class B,
which become fully vested three years and five years, respectively, after the first day of
the year the rights are granted. Participants in the Plan are eligible to receive awards
based on defined increases in members equity from the date of grant through the end
of the vesting period. The Board of Managers granted both Class A and Class B
appreciation rights in 1997. Under the terms of the Plan, no additional Class B
appreciation rights will be granted, and additional Class A appreciation rights will be
granted at the discretion of the Board of Managers. However, effective January 1,
2002, the Plan was amended to enable additional Class B appreciation rights to be
granted in 2002. The Company recognized $1,618,494, $1,359,360 and $1,287,172 in
compensation expense related to the Plan for the years ended December 31, 2004, 2003
and 2002, respectively. Accrued compensation related to the Plan was $3,183,430 and
$2,344,943 at December 31, 2004 and 2003, respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

59

---

Midwest Wireless
Holdings L.L.C.Notes to Consolidated Financial Statements

---

|10. | Option Plan
|--- | -----------

| | During
2000, the Companys Board of Managers and Members adopted and approved the Midwest
Wireless Holdings L.L.C. Unit Option Plan (the Option Plan), as amended. Under
the Option Plan, options to purchase up to 46,742 of the Companys membership units
may be granted to employees with terms and vesting periods determined by the
Companys Board of Managers at the date of grant. The exercise price is equal to the
fair value of the units at the time the option is granted as determined by the Board of
Managers. Options granted under the plan expire ten years from the date of grant. The
options granted vest 100% three years after they are granted.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Options OutstandingAvailableforGrant
     Number

                                                                of Units

WeightedAveragePrice PerUnitBalances at December 31, 2001
     
     
     37,940
        
     8,802
        
     $309.37Granted
     (4,809
        )
     4,809
        
     $344.00Balances at December 31, 2002
     33,131
        
     13,611
        
     $321.60Granted
     (2,788
        )
     2,788
        
     $263.84Balances at December 31, 2003
     30,343
        
     16,399
        
     $311.78Granted
     (3,345
        )
     3,345
        
     $260.87Cancelled
     200
        
     (200
        )
     $331.16Balances at December 31, 2004
     27,198
        
     19,544
        
     $302.87


The
following table summarizes information about unit options outstanding and exercisable at
December 31, 2004:


|           | Options Outstanding |  | Options Exercisable
|---------- | ------------------- |  | -------------------
|           |                     |  |                    
|
|          
|$   260.87 |                     |  |                    
|$   263.84 |                     |  |                    
|$   299.06 |                     |  |                    
|$   318.32 |                     |  |                    
|$   318.32 |                     |  |                    
|$   344.00 |                     |  |                    
|           |                     |  |                    
|           |                     |  |                    
|           |                     |  |                    

60

---

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.

|                     | NEW ULM TELECOM, INC.
                                                                                (Registrant)                                           
|-------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date: March 22, 2005 | By  /s/  Bill Otis                                                                                                                                           
|                     |                                                                                                                                                              
|                     | Bill Otis, President and Chief Executive Officer
                                                                               (Principal 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 and on the date indicated.

KNOW ALL BY THESE PRESENT, that
each person whose signature appears below constitutes and appoints Bill Otisas
his or her true and lawful attorney-in-fact and agent, with full powers of substitution
and resubstitution, for him or her and in his or her name, place and stead, in any and
all capacities, to sign any or all amendments to this report, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the SEC,
granting unto said attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent,
or his or her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

|Date: March 22, 2005 | By  /s/  Bill Otis                                                                                                                                           
|-------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |                                                                                                                                                              
|                     | Bill Otis, President and Chief Executive Officer
                                                                               (Principal Executive Officer)

| | /s/ Nancy Blankenhagen                                                                                                                                                                                                                                               
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                      
| | Nancy Blankenhagen, Chief Financial Officer
                                                                               and Treasurer (Principal Financial and
                                                                                Accounting Officer)

| | /s/ James Jensen                   
| | -----------------------------------
| |                                    
| | James Jensen, Chairman of the Board

| | /s/ Duane Lambrecht      
| | -------------------------
| |                          
| | Duane Lambrecht, Director

| | /s/ Gary Nelson      
| | ---------------------
| |                      
| | Gary Nelson, Director

| | /s/ Rosemary Dittrich      
| | ---------------------------
| |                            
| | Rosemary Dittrich, Director

| | /s/ Mary Ellen Domeier      
| | ----------------------------
| |                             
| | Mary Ellen Domeier, Director

| | /s/ Perry Meyer      
| | ---------------------
| |                      
| | Perry Meyer, Director

| | /s/ Robert Ranweiler      
| | --------------------------
| |                           
| | Robert Ranweiler, Director

61

---

# INDEX TO EXHIBITS

Exhibits required to be filed by Item
601 of Regulation S-K are included as Exhibits to this report as follows:

| | 3.1 | Restated Articles of Incorporation, as amended (incorporated by reference to the
New Ulm Telecom,  Inc.  quarterly report on Form 10-Q (file No. 000-03024) filed
on August 5, 2004). | 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | 3.2 | Restated By-Laws (incorporated by reference to the New Ulm Telecom,
Inc. annual report on Form 10-K (file No. 000-03024) for the fiscal year ended December
31, 1986). | 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | 4.1 | The registrant, by signing this Report, agrees to furnish the Securities and Exchange
Commission, upon its request, a copy of any instrument which defines the rights of holders
of long-term debt of the registrant and all of its subsidiaries for which consolidated
financial statements are required to be filed, and which authorizes a total amount of
securities not in excess of 10% of the total assets of the registrant and its subsidiaries
on a consolidated basis. | 
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | 21* | Subsidiaries of the Registrant | 
| | --- | ------------------------------ | 

| | 24* | Power of Attorney (Included on Signature Page) | 
| | --- | ---------------------------------------------- | 

| | 31.1* | Chief Executive Officer Certification pursuant to Exchange Act Rule 13a-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | 
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | 31.2* | Chief Financial Officer Certification pursuant to Exchange Act Rule 13a-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | 
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | 32.1* | Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | 
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------- | 

| | 32.2* | Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | 
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------- | 

| |  |  | * Filed
herewith
| |  |  | ----------------

62