##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-K



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE
	SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2000

Or



| |                                                                                       
| | --------------------------------------------------------------------------------------
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
	SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to

Commission file no. 333-71051



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DOBSON/ SYGNET COMMUNICATIONS
COMPANY



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|Oklahoma(State or other jurisdiction of
	incorporation or organization)                                    |  | 73-1547216(I.R.S. Employer Identification No.)
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|13439 North Broadway Extension
	Suite 200
	Oklahoma City, Oklahoma(Address of principal executive offices) |  | 73114(Zip Code)                               

(405) 529-8500





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

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



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

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

As of March 15, 2001, there
were 100 shares of the registrants $1.00 par
value common stock outstanding, all of which were beneficially
owned by Dobson Communications Corporation.

The registrant meets the
conditions set forth in General Instruction I(1)(a) and
(b) of Form 10-K and is therefore filing this form
with the reduced disclosure format.

Documents incorporated by
reference:  None



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TABLE OF CONTENTS



|                                                                                                                                                                                            |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                                                                                                                                                     
|                                                                                                                                                                                            | Item 1. Business                                                                             
|                                                                                                                                                                                            | Item 2. Properties                                                                           
|                                                                                                                                                                                            | Item 3. Legal Proceedings                                                                    
|                                                                                                                                                                                            | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                                                                                                                                                                    
|                                                                                                                                                                                            | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                                                                                                                                                                                            | Item 6. Selected Financial Data Of Dobson/Sygnet                                             
|                                                                                                                                                                                            | Item 7. Managements Discussion And Analysis Of Financial Condition And Results Of Operations
|                                                                                                                                                                                            | Item 7A. Quantitative and Qualitative Disclosure About Market Risk                           
|INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                 
|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                                                                                                   
|CONSOLIDATED BALANCE SHEETS                                                                                                                                                                
|CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                                                                                      
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY                                                                                                                                            
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                                      
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                 
|Report of Independent Auditors                                                                                                                                                             
|CONSOLIDATED STATEMENT OF OPERATIONS                                                                                                                                                       
|CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (DEFICIT)                                                                                                                                   
|CONSOLIDATED STATEMENT OF CASH FLOWS                                                                                                                                                       
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                 
|                                                                                                                                                                                            | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III                                                                                                                                                                                   
|                                                                                                                                                                                            | Item 10. Directors and Executive Officers of the Registrant                                  
|                                                                                                                                                                                            | Item 11. Executive Composition                                                               
|                                                                                                                                                                                            | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                                                                                                                                                            | Item 13. Certain Relationships and Related Transactions                                      
|PART IV                                                                                                                                                                                    
|                                                                                                                                                                                            | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                                                                                                   
|DOBSON/SYGNET COMMUNICATION COMPANY SCHEDULE OF VALUATION ALLOWANCE ACCOUNTS YEARS ENDED DECEMBER 31, 2000 AND 1999 AND THE PERIOD FROM INCEPTION (JULY 23, 1998) THROUGH DECEMBER 31, 1998
|SIGNATURES                                                                                                                                                                                 



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DOBSON/SYGNET COMMUNICATIONS COMPANY

ANNUAL REPORT ON FORM 10-K


FOR THE YEAR ENDED DECEMBER 31, 2000

TABLE OF CONTENTS

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|Item     |    |  |  |                                                                                              
|Number   |    |  |  | Page                                                                                         
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|PART I  
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|         | 1  |  |  | Business                                                                                      |  |  | 3  | 
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|         | 2  |  |  | Properties                                                                                    |  |  | 14 | 
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|         | 3  |  |  | Legal Proceedings                                                                             |  |  | 14 | 
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|         | 4  |  |  | Submission of Matters to a Vote of Security Holders                                           |  |  | 14 | 
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|PART II 
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|         | 5  |  |  | Market for Registrants Common Equity and Related
        Stockholder Matters                 |  |  | 15 | 
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|         | 6  |  |  | Selected Financial Data                                                                       |  |  | 15 | 
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        and Results of Operations |  |  | 17 | 
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|         | 7A |  |  | Quantitative and Qualitative Disclosure About Market Risk                                     |  |  | 23 | 
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|         | 8  |  |  | Financial Statements and Supplementary Data                                                   |  |  | 24 | 
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|         | 9  |  |  | Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure  |  |  | 48 | 
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|PART III
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|         | 10 |  |  | Directors and Executive Officers of the Registrant                                            |  |  | 48 | 
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|         | 11 |  |  | Executive Compensation                                                                        |  |  | 48 | 
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|         | 12 |  |  | Security Ownership of Certain Beneficial Owners and Management                                |  |  | 48 | 
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|         | 13 |  |  | Certain Relationships and Related Transactions                                                |  |  | 48 | 
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|PART IV 
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|         | 14 |  |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                              |  |  | 49 | 

2



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PART I





Item 1.  Business

Overview

We are a wholly owned subsidiary of Dobson Communications
Corporation (Dobson Communications). On
December 23, 1998, we acquired Sygnet Wireless, Inc.
and its wholly-owned subsidiary, Sygnet
Communications, Inc. (Sygnet). Sygnet is our
predecessor company and its operations currently are our only
business. We own and operate rural and suburban cellular
telephone systems serving a single large cluster of properties
that includes a population of approximately 2.4 million,
with 259,200 subscribers in northeastern Ohio, western
Pennsylvania and western New York. The cluster includes
Youngstown, Ohio, Erie, Pennsylvania, and suburban and rural
areas between the Cleveland, Akron-Canton, Pittsburgh, Buffalo
and Rochester metropolitan areas. For the year ended
December 31, 2000, we had total revenues of
$164.7 million and a net loss of $46.3 million. At
December 31, 2000, we had approximately $534.9 million
of indebtedness and stockholders equity of
$114.5 million.

We have established and maintained a strong and visible local
presence. Our existing local management has continued to have
day-to-day operating authority, with the flexibility to respond
to individual market requirements and to foster a strong sense
of customer service and community spirit. We have centralized
certain functions such as control of pricing, customer service
and marketing, systems design, engineering, purchasing,
financial and administrative functions and billing into Dobson
Communications Corporate administrative functions.

Our markets are primarily rural and suburban and include a high
concentration of expressway corridors that tend to have a
significant amount of roaming activity. Roaming revenue
represented approximately 24.6% and 26.3% of our total revenues
for the years ended December 31, 2000 and 1999,
respectively. We have entered into roaming agreements with
operators of cellular systems in neighboring MSAs and RSAs which
allow customers to roam at competitive prices which, in certain
instances, are comparable to our home area rates. Our principal
roaming partners are AT&T Wireless, Verizon Wireless and
Cingular Wireless. We also have roaming agreements with PCS
providers, such as AT&T Wireless and Sprint, to allow the
PCS providers customers with tri-mode telephones to roam
in certain of our markets.

Strategy

Our business strategy is to focus on continued integration of
our operations with those of Dobson Communications, increasing
our market penetration and further developing our cellular
systems to sustain growth in cash flows. The following are the
principal elements of our business strategy:

Continue Integrated Operations with Dobson
Communications. We have integrated our operations with
Dobson Communications existing cellular operations to
achieve economies of scale. We believe that these increased
efficiencies have come from the centralized control of pricing,
customer service and marketing, system design, engineering,
purchasing, financial and administrative functions and from the
consolidation of billing functions.

Expand Strategic Relationships.We intend to continue to
maintain and expand strategic relationships with operators of
wireless systems in major MSAs near our systems. These
relationships include roaming agreements, which allow our
subscribers to use the system in the neighboring MSA or RSA at
favorable rates. Under these agreements, the MSA or RSA
operators subscribers receive similar benefits roaming in
our operating areas. We have roaming agreements with the
dominant cellular operators in the neighboring MSAs and RSAs and
others, including AT&T Wireless, Verizon Wireless and
Cingular Wireless. We also have agreements with PCS providers,
such as AT&T Wireless and Sprint, to allow the PCS
providers customers with dual mode telephones to roam in
certain of our markets. By entering into these strategic
agreements, we are able to increase our roaming revenue and
offer our subscribers larger areas in which our rates apply.

Aggressive Local Marketing and Promotion of Cellular
Services. We plan to continue to distinguish ourselves as
the local markets leading cellular services provider,
stressing service quality, local sales offices

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Targeted Sales Efforts.Our marketing programs seek to
attract subscribers who are likely to generate high monthly
revenue and low churn rates. We will undertake extensive market
research to identify and design marketing programs to attract
these subscribers and tailor distinctive rate plans and roaming
rates to emphasize the quality, value and advantage of our
cellular service. In addition, our sales force compensation
system is designed to maximize the acquisition of these high
use, reduced churn subscribers. We also employ marketing
programs and compensation systems, which are designed to
increase monthly revenue per subscriber and lower marketing and
selling costs per additional subscriber.

Superior Customer Service.We intend to maintain a high
level of customer satisfaction through a variety of techniques,
including 24-hour customer service. We will continue to support
local customer service through our direct sales force and its
retail stores.

Continued System Development.We believe that increasing
capacity and upgrading our systems will attract additional
subscribers, enhance the use of our systems by existing
subscribers, increase roaming activity and further enhance the
overall efficiency of the network. Prior to the acquisition,
Sygnet had upgraded its Erie, Youngstown and Pennsylvania
markets with TDMA IS-136 digital technology. During 1999, we
completed an upgrade to the New York market with TDMA
IS-136 digital technology which has enabled us to continue the
increase in roaming (by servicing the increasing number of
digital cellular subscribers and PCS subscribers with tri mode
telephones) and provide enhanced capabilities, including caller
ID, longer battery life and zone billing. With this final
upgrade we expanded our digital coverage to 100% of our markets.
From the beginning of 1995 through 1998, Sygnet spent
approximately $56.2 million to upgrade and expand its
network. During 1999 and 2000, we spent in total approximately
$52.1 million and continued to improve coverage, increase
capacity and build out of our systems.

Markets and Systems

The following table sets forth-certain data with respect to our
cellular markets as of December 31, 2000.

|               |       |            |           |             |  |             |  |               |  |  |  |      |   |                     | 
|-------------- | ----- | ---------- | --------- | ----------- |  | ----------- |  | ------------- |  |  |  | ---- | - | ------------------- | 
|               |       | Total      |           | Total       |  | Market      |  | Year Acquired
|Markets        |       | Population |           | Subscribers |  | Penetration |  | by Sygnet    
|               |       |            |           |             |  |             |  |              
|Erie MSA       |       |            | 280,000   |             |  |             |  |               |  |  |  |      |   | 1995               
|              
|              
|              
|              
|New York 3 RSA |       |            | 481,000   |             |  |             |  |               |  |  |  |      |   | 1996               
|              
|              
|              
|              
|Pennsylvania   |       |            | 595,000   |             |  |             |  |               |  |  |  |      |   | 1996 and 1999      
|              
|              
|              
|              
|Youngstown     |       |            | 1,006,000 |             |  |             |  |               |  |  |  |      |   | 1985, 1987 and 1991
|               |       |            |           |             |  |             |  |               |  |  |  |      |   |                    
|               | Total |            |           | 2,362,000   |  |             |  | 259,200       |  |  |  | 11.0 | % |                     | 
|               |       |            |           |             |  |             |  |               |  |  |  |      |   |                    

We conduct our operations in a single large cluster of
properties with a population of approximately 2.4 million
and 259,200 subscribers in northeastern Ohio, western
Pennsylvania and western New York. The cluster includes
four markets: the Youngstown market, the Erie market, the
Pennsylvania market, and the New York market. As of
December 31, 2000, all 231 of our cell sites are capable of
TDMA IS-136 digital service. The following is a description of
our cellular markets.



| |                  
| | -----------------
| | Youngstown Market

Our Youngstown market includes the Youngstown, Ohio MSA, the
Sharon, Pennsylvania MSA and the Ohio 11 RSA. Youngstown
Cellular Telephone Company, which was later acquired by Sygnet,
initiated cellular operations in the Youngstown market in 1985
when it acquired its license from the FCC for the Youngstown,
Ohio MSA. Our Youngstown market covers a contiguous area that is
located at a midway point

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Erie Market

Our Erie market includes the Erie, Pennsylvania MSA. Sygnet
initiated cellular operations in the Erie market in
September 1995 following the Erie Acquisition from AT&T
Wireless Services, Inc. Our Erie market covers a contiguous
area that includes Interstate 90, which connects Buffalo and
Cleveland, and Interstate 79, which connects Erie directly
to Pittsburgh.

Pennsylvania Market

Our Pennsylvania market includes Pennsylvania 1 RSA,
Pennsylvania 2 RSA, Pennsylvania 6 RSA and
Pennsylvania 7 RSA. Our Pennsylvania market covers a
contiguous area that includes Interstate 79 and
Interstate 80, which link the major population centers in
north-central Pennsylvania, including Pittsburgh and Erie. Our
Pennsylvania market also includes a portion of Route 60, a
recently completed toll road, which serves as an expressway to
the Pittsburgh International Airport.

New York Market

Our New York market is composed of the New York 3 RSA.
We initiated cellular operations in the New York market in
October 1996. Our New York market is located in the
western part of New York and includes six counties. The
system borders Buffalo and Rochester to the north, Erie,
Pennsylvania to the west and Binghamton/ Elmira to the east.
Interstates 90 and 390 and Route 17 run through
the New York 3 market. Interstate 90 (the
New York Thruway) connects Buffalo, Rochester and Erie.
Interstate 390 connects Rochester, Corning, Binghamton and
Elmira. Route 17 connects Interstate 390 west to
Interstate 90 in Erie.

Products and Services

We provide a variety of cellular services and products designed
to address a range of business and personal needs. In addition
to mobile voice transmission, we offer ancillary services such
as call forwarding, call-waiting, caller ID, three-party
conference calling, voice message storage and retrieval,
message-waiting indicator, sleep mode for longer battery life
and no-answer transfer. The nature of the services we offer
varies depending upon the market area. We also sell cellular
equipment at discount prices and use free phone promotions to
encourage use of our mobile services.

We offer cellular service for a fixed monthly access fee,
accompanied by varying allotments of unbilled or included
minutes, plus additional variable charges per minute of use and
for custom calling features. We offer longer-term pricing
programs under single year and, to a lesser extent, multi-year
service contracts. Unlike some of our competitors, we design
rate plans on a market-by-market basis. Our local general
managers generally have the authority to initiate and modify
rate plans, depending upon the market and competitive
conditions. Generally, these rate plans include a high-volume
user plan, medium-volume user plan, basic plan and an economy
plan.

Customer Service

Customer service remains an essential element of our marketing
and operating philosophies. We are committed to attracting new
subscribers and retaining existing subscribers by providing
consistently high-quality customer service. In each of our
cellular service areas, we maintain installation and repair
facilities and a local staff, including a market manager,
customer service representatives and technical and sales
representatives. In each of our cellular service areas, we
handle our own customer-related functions, such as customer
activations, account adjustments and rate plan changes. We
believe our local offices and installation and repair facilities
enhance our knowledge of local markets and enable us to serve
customers better, schedule installations and make repairs.
Through the use of sophisticated, centralized monitoring
equipment, we are able to centrally monitor the technical
performance of our cellular service areas.

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In addition, our customers are able to report cellular telephone
service or account problems 24-hours a day to a call service
center on a toll-free access number with no airtime charge. We
believe that our emphasis on customer service affords us a
competitive advantage over our competitors.

Sales, Marketing and Distribution

We continue to focus our marketing program on attracting
subscribers who we believe are likely to generate high monthly
revenue and low churn rates. We conduct extensive market
research to identify and design marketing programs to attract
these subscribers and tailor distinctive rate plans and roaming
rates to emphasize the quality, value and the advantage of our
cellular service. We have established marketing alliances with
neighboring cellular systems to create larger home rate areas in
order to increase roaming revenues and to attract new
subscribers. We market our service offerings primarily through
our direct sales force and retail stores we own. We also use a
network of dealers and other agents, such as electronics stores,
car dealerships and department stores. In addition to these
traditional channels, our marketing team evaluates other, less
traditional, methods of distributing our services and products,
such as targeted telemarketing and direct mail programs.

We market our cellular products and services under the brand
name CELLULAR ONE®, one of the most recognized brand names
in the cellular industry, in all of our regions. The national
advertising campaign conducted by the Cellular One Group
enhances our advertising exposure at a fraction of the cost of
what we could achieve alone.

We train and compensate our sales force in a manner designed to
stress the importance of customer service, high penetration
levels and minimum acquisition costs per subscriber. We believe
that our direct sales force is better able to select and screen
new subscribers and select pricing plans that realistically
match subscriber means and needs than are independent agents. In
addition, we motivate our direct sales force to sell appropriate
rate plans to subscribers, thereby reducing churn, by linking
payment of commissions to subscriber retention. As a result, our
use of a direct sales force keeps marketing costs low both
directly, because commissions are lower, and indirectly, because
subscriber retention is higher than when independent agents are
used.

Our after-sale telemarketing program conducted by our sales
force and customer service personnel helps to reduce customer
churn rate. This program enhances customer loyalty and allows
the sales staff to check customer satisfaction as well as to
offer additional calling features, such as voicemail, call
waiting and call forwarding.

As of December 31, 2000, we had approximately 62 retail
stores and outlets. Most of our retail stores are fully equipped
to handle customer service and telephone maintenance. Some of
these stores are also authorized warranty repair centers. Our
stores provide subscriber-friendly retail environments,
including extended hours, a large selection of equipment and
accessories, an expert sales staff and convenient locations
which make the sales process quick and easy for the subscriber.

Roaming

We believe that regional roaming is an important service
component for many of our subscribers. We believe that roaming
will continue to be a substantial source of our revenue due, in
part, to the fact that our cellular systems are located in rural
and suburban areas with a high concentration of commuting
customers and expressway corridors that tend to result in a
significant amount of roaming activity. We have entered into
roaming agreements with operators of cellular systems in
adjoining MSAs and RSAs and others which provide for roaming
rates that allow customers to roam at competitive prices which,
in certain instances, are comparable to home area rates, which
also increases usage on all wireless systems, including our
systems. Sygnets principal roaming partners are AT&T
Wireless, Verizon Wireless and Cingular Wireless. We also have
agreements with PCS providers, including AT&T Wireless and
Sprint, to allow their PCS providers customers with dual
mode phones to roam in certain of our markets.

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We have agreements with the North America Cellular Network
(NACN), which is the largest wireless telephone
network system in the world linking cellular operators
throughout the United States and Canada. NACN connects key areas
across North America so that our customers can use their
cellular phones to place and receive calls in these areas as
easily as they do in their home areas. Through NACN, customers
receive calls automatically without the use of complicated
roaming codes as they roam in more than 5,000 cities and towns
in the United States and Canada. In addition, special services
such as call forwarding and call waiting automatically follow
subscribers as they travel.

System Development and Technology

System Development.We develop or build out our cellular
service areas in response to projected subscriber demand and
competitive factors by adding voice circuits to existing cell
sites and by building new cell sites to increase capacity with
an emphasis on improving coverage for hand-held phones in
high-traffic areas. We develop projected subscriber service
demand for each cellular market area on a cell-by-cell basis.

We expect our cell site expansion to enable us to continue to
add and retain subscribers, enhance subscriber use of the
systems, increase roamer traffic due to the large geographic
area covered by the cellular network and further enhance the
overall efficiency of our cellular systems. We believe that the
increased cellular coverage and capacity will continue to have a
positive impact on our market penetration and subscriber usage.

Digital Technology.We use one basic protocol in our
digital networks. This digital technology or protocol is Time
Division Multiple Access, known as TDMA, which divides each
channel into three voice circuits providing service to three
simultaneous users instead of using the same spectrum for one
analog voice circuit. Our digital services include digital voice
circuits, short messaging services, message waiting indicator,
increased battery life and caller ID services.

We have completed the upgrade of our systems to digital
technology and now offer digital voice and digital feature
services to 100% of our covered population. We match the digital
protocols of our markets to those used by our roaming partners
in adjoining markets in order to increase revenue opportunities.

Billing System.H.O. Systems, Inc. provides the
billing function for all of our cellular operations. Proprietary
software furnished by H.O. Systems serves all functions of
billing for corporate and retail locations. All administrative
and customer maintenance functions are handled in-house.
H.O. Systems prints and processes all of our customer
invoices. We use software that compliments this billing system,
allowing the use of credit, collection and switch interfaces.

Service Marks

Through Sygnet, we are currently licensed to use the CELLULAR
ONE® service mark for our cellular telephone operations in
our Youngstown, Erie, New York and Pennsylvania markets. We
use the CELLULAR ONE® service mark to identify and promote
our cellular telephone service pursuant to licensing agreements
with Cellular One Group. Licensing and advertising fees are
determined based upon the population of the licensed areas.
Under these licensing agreements, we must provide high-quality
cellular telephone service to its customers and maintain a
certain minimum overall customer satisfaction rating in surveys
commissioned by Cellular One Group. Our licensing agreements are
for five-year terms that expire beginning in 2001. Sygnet may
renew these agreements, subject to satisfaction of certain
operating standards, for two additional five-year terms.

Competitive Strengths/ Competition

We believe that our competitive strengths are:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Established operating history in rural and suburban
	markets. Our parent, Dobson Communications, began providing
	wireless telephone service in 1990 and since then has rapidly
	expanded their wireless operations to include systems in several
	rural and suburban markets. Dobson Communications acquired us in
	1998 and successfully integrated us with their operations during
	1999. We believe that

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | during this time we have gained substantial experience as an
	operator of cellular systems in rural and suburban markets.                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Strong Current Market Position. We have significant
	market share in virtually all of our cellular markets. We
	distinguish ourselves from our competition by emphasizing
	digital technology, customer care and a commitment to the local
	community. We plan to attract additional subscribers by
	leveraging our strategic relationships, digital technologies,
	local sales channels and diverse service offering, including
	national, regional and local rate plans.                                                     
|
| |  | Attractive Markets. Our markets are attractive for
	providing cellular communications services, due in part, to
	their proximity to markets operated by AT&T Wireless and
	major metropolitan areas. Our markets have a relatively high
	density of highway and other traffic corridors and strong
	tourist activity due to seasonal attractions. Additionally, our
	markets have demonstrated positive demographic growth trends and
	generally maintain a high population density relative to other
	rural service providers.
|
| |  | Strategic relationship with AT&T Wireless. We have a
	strategic relationship with AT&T Wireless. Through this
	relationship, we have roaming agreements that enable our
	customers to use AT&T Wireless systems and AT&T
	Wireless customers to use our systems, each at favorable
	rates. AT&T Wireless customers accounted for approximately
	61% of our roaming revenues, or approximately 15% of our total
	revenues, for the year ended December 31, 2000.                                                              
|
| |  | Experienced management team. We have an experienced
	management team. Both Everett R. Dobson, our Chairman of
	the Board and Chief Executive Officer, and G. Edward Evans,
	our President and Chief Operating Officer, have substantial
	experience in the wireless communications industry and both are
	actively involved in the Cellular Telecommunications and
	Internet Association, the leading wireless industry association.                                                                                           
|
| |  | Ability to offer a variety of digital services, including
	digital voice and digital feature services to 100% of our
	covered population. We have upgraded our cellular network to
	offer digital voice and digital feature services to 100% of our
	covered population, which both enhances our attractiveness as a
	roaming partner to personal communications service and other
	cellular providers and provides increased services to our
	current subscribers, including digital voice services.                          

The telecommunications industry is experiencing significant
technological changes, as evidenced by the increasing pace of
improvements in the capacity and quality of digital technology,
shorter cycles for new products and enhancements and changes in
consumer preferences and expectations. Accordingly, we expect
competition in the cellular telecommunications industry to be
dynamic and intense as a result of the entrance of new
competitors and the development of new technologies, products
and services. Many of our competitors have been operating for a
number of years, operate nationwide systems, currently serve a
substantial subscriber base and have significantly greater
financial, personnel, technical, marketing, sales and
distribution resources than we do. Some competitors are expected
to market other services, such as long distance, landline local
exchange and internet access service, with their cellular
telecommunication service offerings.

In each of our cellular markets, we compete primarily against
one other cellular carrier. We also may compete with personal
communications service and enhanced specialized mobile radio
providers. Our two primary competitors are Verizon Wireless and
ALLTEL. We compete for customers based principally upon price,
the services and enhancements offered, the quality of our
cellular system, customer service, system coverage and capacity.
This competition may increase to the extent that licenses are
transferred from smaller, stand-alone operators to larger,
better capitalized and more experienced cellular operators that
may be able to offer consumers certain network advantages.

AT&T Wireless, Cingular Wireless, Verizon Wireless, Nextel
Communications, Sprint PCS and VoiceStream operate substantially
nationwide networks. If any of our roaming partners, including
AT&T Wireless, were to acquire a personal communications
service license for any of our markets, they could build out
personal communications service networks in our markets to
provide their customers with wireless service which would reduce
our roaming revenues. Any increased competition from personal
communications service

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We also face, to a lesser extent, competition from mobile
satellite service providers, as well as from resellers of these
services and cellular service. In the future, we may also
compete more directly with traditional landline telephone
service providers. The FCC has created potential sources of new
competition by auctioning additional personal communications
service licenses, as well as licenses for wireless
communications services, local multipoint distribution service,
39 GHz service and 220 to 222 MHz service. Further,
the FCC has announced plans to auction licenses in the
4.9 GHz, 24 GHz and 700 MHz bands that may be
usable for mobile services. The FCC has also recently initiated
a rule making proceeding to allocate approximately 200 MHz
of additional spectrum to wireless use, much of which can be
licensed for commercial wireless purposes. Continuing
technological advances in telecommunications make it impossible
to predict the extent of future competition. However, due to the
depth and breadth of these competitive services offered by
operators using these other technologies, future competition
from these operators could be intense.

Regulation

Overview.The wireless communications industry is subject
to extensive governmental regulation on the federal level and to
varying degrees on the state level. The enactment of the
Telecommunications Act of 1996 has had an impact on many aspects
of this regulation. In addition, this regulation currently the
subject of administrative rulemakings and judicial proceedings
that are significant to us. The following is a summary of the
federal laws and regulations that materially affect the cellular
communications industry, in general, and us, in particular, and
a description of applicable certain state laws. This section
does not purport to be a summary of all present and proposed
federal, state and local regulations and legislation relating to
the wireless communications industry.

Federal Regulation.The licensing, construction,
modification, operation, ownership and acquisition of wireless
telephone systems are subject to regulations and policies of the
FCC under the Communications Act of 1934, as amended. The FCC
has promulgated rules and regulations governing, among other
things, applications to construct and operate wireless
communications systems, applications to transfer control of or
assign wireless licenses, and technical and operational
standards for the operation of wireless systems (such as maximum
power and antenna height).

The FCC licenses cellular systems in accordance with 734
geographically defined market areas comprised of 306
Metropolitan Statistical Areas, or MSAs and 428 Rural Service
Areas, or RSAs. In each market, the frequencies allocated for
cellular telephone use are divided into two equal 25 MHz
blocks and designated as wireline and non-wireline. Apart from
the different frequency blocks, there is no technical difference
between wireline and non-wireline cellular systems and the
operational requirements imposed on each by the FCC are the
same. Under FCC rules, the authorized service area of a cellular
provider in each of its markets is referred to as the cellular
geographic service area. The cellular geographic service area
may conform exactly with the boundaries of the FCC designated
MSA or RSA, or it may be smaller if a licensee has chosen not to
provide services to certain areas. A cellular licensee has the
exclusive right to expand its cellular geographic service area
boundaries within the licensees MSA or RSA for a period of
five years after grant of the licensees initial
construction permit. At the end of this five-year build-out
period, however, other entities may apply to serve portions of
the MSA or RSA, in areas outside the licensees then
designated cellular geographic service area. The five year
build-out period has expired for most cellular markets and the
FCC has granted several unserved area applications
filed by parties other than the original MSA or RSA licensee. No
entity may, directly or indirectly, own a controlling interest
in, or otherwise have the ability to control, both systems. The
FCC may prohibit or impose conditions on transfers of licenses.
In addition, under FCC rules, no person or entity may have an
attributable interest, as defined in FCC rules, in a total of
more than 45 MHz of licensed broadband personal
communications service, cellular and enhanced specialized mobile
radio spectrum, regulated as commercial mobile radio services
with significant overlap in any geographic area except in RSAs,
where a total of 55MHz is lawful. This so-called spectrum
cap rule could have an impact on our ability to acquire
other cellular systems, and it also could limit the universe of
potential buyers of any of our systems should we attempt to sell
these systems.

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The FCC recently amended the spectrum cap ownership attribution
rules to allow for somewhat more ownership overlap. Significant
overlap will occur when at least 10% of the 1990 census
population of the licensed service area is within the cellular
geographic service area, as defined below, and/or the personal
communications service area or enhanced specialized mobile radio
service area. Ownership limits on overlapping cellular licensees
were recently amended so that a party with a controlling
interest or otherwise attributable interest in a cellular
licensee may have a direct or indirect ownership interest of up
to 5% in another cellular licensee in overlapping cellular
geographic service areas, and a party may have a direct or
indirect ownership interest of up to 20% in both cellular
licensees in overlapping cellular geographic service areas so
long as neither interest is a controlling interest. This change
in the ownership attribution rules affords greater opportunities
for non-controlling investment in cellular systems and could
increase our ability to attract capital or to make investments
in other cellular operators.

Cellular service providers also must satisfy a variety of FCC
requirements relating to technical and reporting matters. One
requirement is the coordination of proposed frequency usage with
adjacent cellular users, permittees and licensees in order to
avoid interference between adjacent systems. In addition, the
height and power of base station transmitting facilities and the
type of signals they emit must fall within specified parameters.
We are obligated to pay annual regulatory fees and assessments
to support the FCCs regulation of its cellular operations,
as well as fees necessary to support federal universal service
programs, number portability regional database costs,
centralized administration of telephone numbering,
telecommunications relay service for the hearing-impaired and
application filing fees. These regulatory payment obligations
increase our costs of doing business.

The Communications Act requires prior FCC approval for
substantive, non pro forma transfers or assignments to or from
us of a controlling interest in any license or construction
permit, or any rights thereunder. Although we cannot assure you
that the FCC will approve or act in a timely fashion upon any
future requests for approval of applications that we file, we
have no reason to believe that the FCC would not approve or
grant such requests or applications in due course. Because an
FCC license is necessary to lawfully provide cellular service,
if the FCC were to disapprove any such filing our business plans
would be adversely affected.

The FCC also regulates a number of other aspects of the cellular
business. For example, the FCC regulates cellular resale
practices and currently also applies such cellular resale
requirements to A and B Block (and A/ B Block controlled)
broadband personal communications service and enhanced
specialized mobile radio licensees. These cellular, personal
communications service and enhanced specialized mobile radio
providers may not restrict any customers resale of their
services or unreasonably discriminate against resellers of their
services. All resale obligations for cellular, broadband
personal communications service and enhanced specialized mobile
radio operators are currently scheduled to terminate on
November 24, 2002. Moreover, federal legislation enacted in
1993 requires the FCC to reduce the disparities in the
regulatory treatment of similar mobile services, such as
cellular services, personal communications services and enhanced
specialized mobile radio services. Under this regulatory
structure, all of our cellular licenses are classified as
commercial mobile radio services. As a commercial mobile radio
services provider, the FCC regulates us as a common carrier. The
FCC, however, has exempted cellular services from some typical
common carrier regulations, such as tariff and certification
filings, thereby allowing us to respond more quickly to our
competition in the marketplace.

The FCC has also adopted requirements for cellular and other
commercial mobile radio services providers to implement basic
and enhanced 911 services. These services provide emergency
service providers with the ability to better identify and locate
callers using wireless services, including callers using special
devices for the hearing impaired. Our obligations to implement
these services are scheduled to occur in several stages, with
the final stage beginning as early as March 2001 and the FCC
recently amended its rules to eliminate a requirement that
carriers be compensated for enhanced 911 costs and expand the
circumstances under which wireless carriers may be required to
offer enhanced 911 services. Federal legislation enacted in 1999
may limit our liability relative to incomplete 911 calls to a
degree commensurate with wireline carriers in our markets.
Federal law also requires cellular and personal communications
service carriers to provide law enforcement agencies with
capacity to support lawful wiretaps by March 12, 2001 and
technical capabilities

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In addition, the FCC regulates the ancillary service offerings
that cellular and personal communications service licensees can
provide and permits cellular, broadband personal communications
service, paging and enhanced specialized mobile radio licensees
to offer fixed services on a co-primary basis along with mobile
services. This rule change may facilitate the provision of
wireless local loop service, which involves the use of wireless
links to provide local telephone service by cellular licensees,
as well as broadband personal communications service and
enhanced specialized mobile radio licensees, although the extent
of lawful state regulation of such wireless local
loop service is undetermined. In this regard, the FCC has
also adopted telephone number portability rules for local
exchange carriers, as well as cellular, personal communications
service and enhanced specialized mobile radio licensees, that
could facilitate the development of local exchange competition,
including wireless local loop service. The new number
portability rules generally require cellular, personal
communications service and enhanced specialized mobile radio
licensees to have the capability to deliver calls from their
systems to ported numbers effective December 31, 1998 and
offer number portability and roaming to ported numbers by
November 24, 2002 but this schedule may be expedited if
deemed necessary by the FCC to promote number conservation.
These requirements may result in added capital expenditures for
us to make necessary system changes, although we currently have
no plans for any such expenditures.

The FCC has also adopted rules to govern customer billing by
commercial mobile radio service providers and is considering
whether to extend billing rules currently applicable to landline
carriers to commercial mobile radio services carriers. Adoption
of some of the FCCs proposals could increase the
complexity and costs of our billing processes and limit the
manner in which we bill for services. Finally, the FCC has
initiated a rulemaking proceeding to help facilitate the
offering of so-called calling party pays services
whereby the party placing the call to a wireless customer pays
the wireless airtime charges. Adoption of a calling party pays
system may result in increased usage of wireless systems,
thereby generating increased revenues and creating more
competition between commercial mobile radio services and
traditional landline carriers.

The FCC generally grants cellular and personal communications
service licenses for terms of ten years that are renewable upon
application to the FCC. Near the conclusion of the license term,
we must file applications for renewal of licenses to obtain
authority to operate for an additional 10-year term. The FCC may
revoke our licenses and may deny our license renewal
applications for cause after appropriate notice and hearing. The
FCC will award a renewal expectancy to us if we meet certain
standards of past performance. If we receive a renewal
expectancy, it is very likely that the FCC will renew our
existing cellular license without entertaining competing
applications. To receive a renewal expectancy, we must show that
we have provided substantial service during our past
license term, and have substantially complied with applicable
FCC rules and policies and the Communications Act. The FCC
defines substantial service as service which is
sound, favorable and substantially above a level of mediocre
service that might only minimally warrant renewal. If a licensee
does not receive a renewal expectancy, then the FCC will accept
competing applications for the license, subject to a comparative
hearing, and the FCC may award the license to another entity. To
date, the FCC has renewed each of our licenses for which a
renewal application was required for a new ten-year term. The
balance of our existing licenses begin to expire in October 2001.

The FCC may deny applications for FCC authority, and in extreme
cases revoke licenses, if it finds that an entity lacks the
requisite character qualifications to be a licensee.
In making the determination, the FCC considers whether an
applicant or licensee has been the subject of adverse findings
in a judicial or administrative proceeding involving felonies,
the possession or sale of unlawful drugs, fraud, antitrust
violations or unfair competition, employment discrimination,
misrepresentations to the FCC or other government agencies, or
serious violations of the Communications Act or FCC regulations.
To our knowledge, there are no activities, and no judicial or
administrative proceedings, involving either us or the licensees
in which we hold a controlling interest, that would warrant such
a finding by the FCC.

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The Act prohibits foreign nationals, foreign governments, their
representatives, or a corporation organized under the laws of a
foreign country from (1) directly owning or voting more
than 20 percent of our capital stock, or (2) indirectly
controlling more than 23 percent of our capital stock. The FCC
may allow indirect ownership in excess of 25 percent, and permit
additional indirect ownership in excess of the statutory
25 percent benchmark where that interest is to be held by
an entity or entities from member countries of the World Trade
Organization. For investors from countries that are not members
of the World Trade Organization, the FCC will determine whether
the home country of the foreign investor extends reciprocal
treatment called equivalent competitive
opportunities to U.S. entities. If these
opportunities do not exist, it is unlikely that the FCC will
permit investment beyond the 25 percent benchmark. These
restrictions could adversely affect our ability to attract
additional equity financing. We have no knowledge that any
foreign national owns any of our capital stock.

The Telecommunications Act, which made significant changes to
the Communications Act, requires state public utilities
commissions and/or the FCC to implement policies that mandate
reciprocal compensation between local exchange carriers, a
category that will, for these purposes, include cellular
carriers, for interconnection services at rates more closely
related to cost. In a rulemaking proceeding pertaining to
interconnection between local exchange carriers and commercial
mobile radio service providers such as us, the FCC concluded
that local exchange carriers are required to compensate
commercial mobile radio service providers for the reasonable
costs incurred by these providers in terminating traffic that
originates on local exchange carrier facilities, and vice versa.
Consistent with this ruling, the FCC has determined that local
exchange carriers may not charge a commercial mobile radio
service provider or other carrier for terminating local exchange
carrier-originated traffic and that local exchange carriers may
not charge commercial mobile radio service providers for number
activation and use fees. Depending on further FCC disposition of
these issues, we may or may not be successful in securing
refunds, future relief or both, with respect to charges for
termination of local exchange carrier-originated local traffic.
If the FCC ultimately resolves these issues in favor of
commercial mobile radio service providers, then we will pursue
relief through settlement negotiations, administrative complaint
procedures or both. If these issues are ultimately decided in
favor of the local exchange carriers, we likely would be
required to pay all past due contested charges and may also be
assessed interest and late charges for the withhold amounts.
These requirements could in the future have a material effect on
us.

The Telecommunications Act requires, and the FCC has adopted,
rules that require interstate communications carriers, including
cellular carriers, to make an equitable and
non-discriminatory contribution to a universal service
fund that reimburses communications carriers that provide basic
communications services to users who receive services at
subsidized rates. We have made such payments as the FCC has
required. In 1999, the United States Court of Appeals for the
Fifth Circuit reversed many of the FCCs rules regarding
carriers contribution obligations, and the FCC has
recently adopted rules implementing the courts decision.
While it generally appears that our contributions to federal
universal service programs decreased as a result of the courts
decision, our contributions to state universal service programs
may be subject to increases and, moreover, the FCCs
decision implementing the courts decision is subject to
further administrative and possibly judicial proceedings. Thus,
the impact of the courts decision is uncertain. We may
also seek to qualify for payments from these programs in high
cost areas where we provide wireless services, although we are
not certain of the extent to which such payments will be
available to cellular carriers. If such payments are made
available to us, they would be an additional source of revenue
to us that could be used to subsidize service we provide in
these high cost areas.

The Telecommunications Act also eases the restrictions on the
provision of interexchange telephone services by wireless
carriers affiliated with regional Bell operating companies.
Regional Bell operating company-affiliated wireless carriers
have interpreted the legislation to permit immediate provision
of in region long distance call delivery for their cellular
customers, thus presenting an additional source of competition
to us.

Additionally, the Telecommunications Act specifically exempts
all cellular carriers from the obligation to provide equal
access to interstate long distance carriers. However, the
Telecommunications Act gives the FCC the authority to impose
rules to require unblocked access through carrier identification
codes or 800/ 888

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The Telecommunications Act also imposes restrictions on a
telecommunications carriers use of customer proprietary
network information without prior customer approval. FCC rules
implementing these restrictions are being revised but have the
potential to impose upon us new costly obligations and impose
burdens on our current marketing activities. The FCCs
rules implementing the Telecommunications Acts customer
proprietary network information provisions were vacated by the
United States Court of Appeals for the Tenth Circuit on First
Amendment grounds and the Supreme Court declined to review the
Tenth Circuits decision. The extent to which the FCC will
need to modify its rules to address the courts concerns is
uncertain, but imposition of rules similar to those vacated by
the court would impose additional costs on us and inhibit our
marketing efforts.

The Telecommunications Act also requires telecommunications
carriers to make their services accessible to persons with
disabilities and the FCCs rules implementing these
requirements are in effect. These rules generally require
service providers to offer equipment and services that are
accessible to and usable by persons with disabilities, if
readily achievable, and to comply with complaint/grievance
procedures for violations of these provisions. These rules are
largely untested and are subject to interpretation through the
complaint process. While much of the focus of these rules is on
the manufacture of equipment, carriers such as us could, if
found to have violated the rules, be subject to fines and/or the
imposition of costly new requirements.

In addition, the FCC has adopted rules to promote the
conservation of numbering resources and is considering
additional rules in this area. These rules require wireless
carriers to participate in number pooling (whereby phone numbers
are allocated in blocks of 1,000 rather than 10,000) when they
have implemented number portability capabilities (currently
required by November 2002), and imposes additional
administrative, monitoring, and number reclamation obligations
on all carriers, including wireless carriers. These efforts may
affect wireless service providers by imposing additional costs
or limiting access to numbering resources. The FCC has also
authorized states, to initiate limited numbering administration
to supplement federal requirements including a number of states
in which we provide service. The impact of the federal rules on
wireless carriers, and whether states will continue to have
numbering administration authority, is uncertain. If more states
are given authority over numbering administration, differing
number conservation regimes may be adopted in different states.
In such a case, we likely would incur additional costs in order
to keep abreast of each such regime.

The FCC has determined that interexchange (long distance)
service offerings of commercial mobile radio service providers
are subject to rate averaging and rate integration requirements
of the Telecommunications Act. Rate averaging requires us to
average our intrastate long distance commercial mobile radio
service rates between high cost and urban costs. The FCC has
delayed implementation of the rate integration requirements with
respect to wide area rate plans pending further reconsideration
of its rules, and has delayed the requirement that commercial
mobile radio service carriers integrate their rates among
commercial mobile radio service affiliates. Other aspects of the
FCCs rules were recently vacated by the United States
Court of Appeals for the District of Columbia and are subject to
further consideration at the FCC. There is also a pending
proceeding in which the FCC will determine how integration
requirements apply to commercial mobile radio service offerings,
including single rate plans. To the extent that we offer
services subject to these requirements our pricing flexibility
is reduced, and there is no assurance that the FCC will decline
to impose these requirements on us and/or across our various
commercial mobile radio service affiliates.

The overall impact of the Telecommunications Act on our business
is unclear and will likely remain so for the foreseeable future.
For example, limitations on local zoning requirements imposed by
the Telecommunications Act may facilitate the construction of
new cell sites and related facilities. However, these
restrictions on zoning authority may provide only limited
assistance to cellular carriers. On the other hand, other
provisions of the new statute relating to interconnection,
telephone number portability, universal service, equal access,
use of customer proprietary network information and resale could
subject us to additional costs and increased competition.

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| |                                  
| | ---------------------------------
| | State, Local and Other Regulation

The Communications Act preempts state or local regulation of the
market entry of, or the rates charged by, any commercial mobile
radio services or any private mobile service provider, which
includes cellular telephone service providers. The FCC denied
the petitions of eight states to continue their rate regulation
authority, including authority over cellular operators. As a
practical matter, we are free to establish rates and offer new
products and service with a minimum of regulatory requirements.
The states in which we operate maintain nominal oversight
jurisdiction, primarily focusing upon prior approval of
acquisitions and transfers of licenses and resolution of
customer complaints.

The location and construction of our cellular transmitter towers
and antennas are subject to FCC and Federal Aviation
Administration regulations and are subject to federal, state and
local environmental regulation, as well as state or local
zoning, land use and other regulation. Before we can put a
system into commercial operation, we must obtain all necessary
zoning and building permit approvals for the cell site microwave
tower locations. The time needed to obtain zoning approvals and
requisite state permits varies from market to market and state
to state. Likewise, variations exist in local zoning processes.
Additionally, any proposed site must comply with the FCCs
environmental rules. If zoning approval or requisite state
permits cannot be obtained, or if environmental rules make
construction impossible or infeasible on a particular site, our
network design might be adversely affected, network design costs
could increase the service provided to our customers might be
reduced.

We cannot assure you that any state or local regulatory
requirements currently applicable to our systems will not be
changed in the future or that regulatory requirements will not
be adopted in those states and localities which currently have
none. Such changes could impose new obligations on us that would
adversely affect our operating results.



| |                  
| | -----------------
| | Future Regulation

From time to time, federal or state legislators propose
legislation that could affect us, either beneficially or
adversely. We cannot assure you that federal or state
legislation will not be enacted, or that regulations will not be
adopted or actions taken by the FCC or state regulatory
authorities, that might adversely affect our business. Changes
such as the allocation by the FCC of radio spectrum for services
that compete with our business could adversely affect our
operating results.

Employees and Agents

We have no employees. Our operations are entirely managed by our
parent, Dobson Communications.




Item 2.  Properties

Our headquarters are in Oklahoma City, Oklahoma. Sygnet owns
office buildings in Youngstown and Warren, Ohio and land for a
proposed office site in Boardman, Ohio. As of December 31,
2000, our cellular operations leased approximately 62 retail
stores and approximately 3 administrative offices. We will
review these leases from time to time and may, in the future,
lease or acquire new facilities as needed. We do not expect to
encounter any material difficulties in meeting our future needs
for any leased space. We collectively owned or leased
approximately 231 cell sites as of December 31, 2000.




Item 3.  Legal Proceedings

We are not currently involved in any pending legal proceedings
that individually or in the aggregate are material. We are a
party to routine filings and customary regulatory proceedings
with the FCC and state public utility commissions relating to
its operations.




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

Information omitted in accordance with General Instruction
I(2)(c).

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PART II




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

There is no established trading market for our common stock. As
of March 15, 2001, our parent, Dobson Communications
Corporation was the only holder of record for our common stock.




Item 6.  Selected Financial Data Of Dobson/
Sygnet

The following table sets forth certain historical consolidated
financial data with respect to each of the two years ended
December 31, 2000, 1999 and the period from inception
(July 23, 1998) through December 31, 1998 (including
the acquisition of Sygnet on December 23, 1998) have been
derived from our audited consolidated financial statements. You
should read the information as set forth below in conjunction
with Item 7, Managements Discussion and Analysis of
Financial Condition and Results of Operations and our audited
consolidated financial statements and the related notes thereto
included in Item 8, Financial Statements and Supplementary
Data.

|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |         |        |  
|----------------------------- | ---------------------------------------------------- | ----------------------------- | - | ------------ | ------- | ---- | - | ------- | ------- | - |  | ------- | ------ | -
|                              |                                                      |                               |   |             
|                              |                                                      | Year Ended                    |   | Period from 
|                              |                                                      | December 31,                  |   | inception to
|                              |                                                      |                               |   | December 31,
|                              |                                                      | 2000                          |   | 1999         |         | 1998
|                              |                                                      |                               |   |              |         |     
|                              |                                                      |                              
|                              |                                                      | (Dollars in thousands)       
|                             
|                             
|                             
|                             
|Statement of Operations Data: |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                             
|                             
|                             
|                             
|                              | Revenue:                                             |                               |   |              |         |      |   |         |         |   |  |         |       
|                             
|                             
|                             
|                             
|                              |                                                      | Service revenue               |   | $            | 115,344 |      |   | $       | 96,812  |   |  | $       | 1,563  |  
|                             
|                             
|                             
|                             
|                              |                                                      | Roaming revenue               |   |              | 40,509  |      |   |         | 36,889  |   |  |         | 664    |  
|                             
|                             
|                             
|                             
|                              |                                                      | Equipment sales               |   |              | 8,853   |      |   |         | 6,407   |   |  |         | 191    |  
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                              |                                                      | Total revenue                 |   |              | 164,706 |      |   |         | 140,108 |   |  |         | 2,418  |  
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                              | Operating expenses:                                  |                               |   |              |         |      |   |         |         |   |  |         |       
|                             
|                             
|                             
|                             
|                              |                                                      | Cost of service               |   |              | 33,193  |      |   |         | 29,535  |   |  |         | 160    |  
|                             
|                             
|                             
|                             
|                              |                                                      | Cost of equipment             |   |              | 22,892  |      |   |         | 13,566  |   |  |         | 369    |  
|                             
|                             
|                             
|                             
|                              |                                                      | Marketing and selling         |   |              | 26,007  |      |   |         | 22,015  |   |  |         | 464    |  
|                             
|                             
|                             
|                             
|                              |                                                      | General and administrative    |   |              | 24,537  |      |   |         | 20,040  |   |  |         | 613    |  
|                             
|                             
|                             
|                             
|                              |                                                      | Depreciation and amortization |   |              | 69,841  |      |   |         | 67,516  |   |  |         | 1,662  |  
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                              |                                                      | Total operating expenses      |   |              | 176,470 |      |   |         | 152,672 |   |  |         | 3,268  |  
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                              | Operating loss                                       |                               |   | (11,764      | )       |      |   | (12,564 | )       |   |  | (850    | )     
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                              |                                                      | Interest expense              |   |              | (65,235 | )    |   |         | (65,360 | ) |  |         | (886   | )
|                             
|                             
|                             
|                             
|                              |                                                      | Other income, net             |   |              | 2,284   |      |   |         | 4,178   |   |  |         | 20     |  
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                              |                                                      | Loss before income taxes      |   |              | (74,715 | )    |   |         | (73,746 | ) |  |         | (1,716 | )
|                             
|                             
|                             
|                             
|                              |                                                      | Income tax benefit            |   |              | 28,392  |      |   |         | 28,023  |   |  |         | 652    |  
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                              |                                                      | Net loss                      |   | $            | (46,323 | )    |   | $       | (45,723 | ) |  | $       | (1,064 | )
|                              |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|Other Financial Data:         |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                             
|                             
|                             
|                             
|                              | Capital expenditures, excluding cost of acquisitions |                               | $ | 31,544       |         |      | $ | 20,592  |         |   |  |        |       
|                             
|                             
|                             
|                             
|Other Data:                   |                                                      |                               |   |              |         |      |   |         |         |   |  |        
|                             
|                             
|                             
|                             
|                              | Subscribers (at period end)                          |                               |   | 259,200      |         |      |   | 223,800 |         |   |  | 178,800 |       
|                             
|                             
|                             
|                             
|                              | Penetration (at period end)                          |                               |   | 11.0         | %       |      |   | 9.5     | %       |   |  | 7.5     | %     
|                             
|                             
|                             
|                             
|                              | Average monthly churn rate                           |                               |   | 1.9          | %       |      |   | 1.5     | %       |   |  | N/A     |       
|                             
|                             
|                             
|                             
|                              | Average monthly revenue per subscriber               |                               | $ | 40           |         |      | $ | 40      |         |   |  | N/A     |       
|                             
|                             
|                             
|                             
|                              | Cell sites (at period end)                           |                               |   | 231          |         |      |   | 195     |         |   |  | 183     |       

|                    |                                              |                        |   |         |  |      |   |         |  |  |   |         | 
|------------------- | -------------------------------------------- | ---------------------- | - | ------- |  | ---- | - | ------- |  |  | - | ------- | 
|                    |                                              |                       
|                    |                                              | December 31,          
|                    |                                              |                       
|                    |                                              | 2000                   |   | 1999    |  | 1998
|                    |                                              |                        |   |         |  |     
|                    |                                              |                       
|                    |                                              | (Dollars in thousands)
|                   
|                   
|                   
|                   
|Balance Sheet Data: |                                              |                        |   |         |  |      |   |         |  |  |   |        
|                   
|                   
|                   
|                   
|                    | Property and equipment, net                  |                        | $ | 72,258  |  |      | $ | 57,389  |  |  | $ | 46,994  | 
|                   
|                   
|                   
|                   
|                    | Total assets                                 |                        |   | 820,990 |  |      |   | 877,321 |  |  |   | 956,738 | 
|                   
|                   
|                   
|                   
|                    | Total long term debt, net of current portion |                        |   | 520,637 |  |      |   | 586,875 |  |  |   | 607,000 | 
|                   
|                   
|                   
|                   
|                    | Stockholders equity                         |                        |   | 114,523 |  |      |   | 98,214  |  |  |   | 143,936 | 

15



---



##### Table of Contents



Selected Financial Data of Sygnet (the predecessor
company)

The following table sets forth certain historical consolidated
financial data for Sygnet with respect to each of the two years
in the period ended December 31, 1997 and for the period
from January 1, 1998 through December 23, 1998. The
selected historical consolidated financial data for the years
ended December 31, 1996 and 1997 and for the period from
January 1, 1998 through December 23, 1998 were derived
from Sygnets audited consolidated financial statements.
However, certain items have been reclassified in the following
financial data schedule to conform to our current presentation.
For comparability purposes, the reclassified amounts are used in
our Managements Discussion and Analysis to help explain
our results of operations. You should read the information as
set forth below in conjunction with Item 7,
Managements Discussion and Analysis of Financial Condition
and Results of Operations and our audited consolidated financial
statements and the related notes thereto included in
Item 8, Financial Statements and Supplementary Data.

|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |         |         |      |        | 
|----------------------------- | ---------------------------------------------------- | ----------------------------------------------------- | ---------------------------------------------------- | ------------------------ | ------- | ------------ | ------- | ------- | ------- | ----- | ------ | ------- | ------- | ---- | ------ | 
|                              |                                                      | Period from                                           |                                                      |                          |         |             
|                              |                                                      | January 1, 1998                                       |                                                      |                          |         |             
|                              |                                                      | through                                               |                                                      | Year Ended               |         | Year Ended  
|                              |                                                      | December 23,                                          |                                                      | December 31,             |         | December 31,
|                              |                                                      | 1998                                                  |                                                      | 1997                     |         | 1996        
|                              |                                                      |                                                       |                                                      |                          |         |             
|                              |                                                      |                                                      
|                              |                                                      | (Dollars in thousands, except per subscriber         
|                              |                                                      | data)                                                
|                             
|                             
|                             
|                             
|Statement of Operations Data: |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                             
|                             
|                             
|                             
|                              | Revenue:                                             |                                                       |                                                      |                          |         |              |         |         |         |       |        |         |        
|                             
|                             
|                             
|                             
|                              |                                                      | Subscriber revenue                                    |                                                      | $                        | 84,508  |              |         | $       | 55,154  |       |        | $       | 31,785  |     
|                             
|                             
|                             
|                             
|                              |                                                      | Roamer revenue                                        |                                                      |                          | 28,035  |              |         |         | 23,377  |       |        |         | 8,737   |     
|                             
|                             
|                             
|                             
|                              |                                                      | Equipment sales                                       |                                                      |                          | 7,447   |              |         |         | 6,003   |       |        |         | 4,024   |     
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              |                                                      |                                                       |                                                      | Total revenue            |         |              | 119,990 |         |         |       | 84,534 |         |         |      | 44,546 | 
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              | Costs and expenses:                                  |                                                       |                                                      |                          |         |              |         |         |         |       |        |         |        
|                             
|                             
|                             
|                             
|                              |                                                      | Cost of services                                      |                                                      |                          | 29,155  |              |         |         | 8,948   |       |        |         | 5,258   |     
|                             
|                             
|                             
|                             
|                              |                                                      | Cost of equipment sales                               |                                                      |                          | 10,444  |              |         |         | 9,663   |       |        |         | 5,816   |     
|                             
|                             
|                             
|                             
|                              |                                                      | General and administrative                            |                                                      |                          | 19,796  |              |         |         | 16,976  |       |        |         | 9,852   |     
|                             
|                             
|                             
|                             
|                              |                                                      | Selling and marketing                                 |                                                      |                          | 12,327  |              |         |         | 10,841  |       |        |         | 6,080   |     
|                             
|                             
|                             
|                             
|                              |                                                      | Merger related costs                                  |                                                      |                          | 1,884   |              |         |         |        |       |        |         |        |     
|                             
|                             
|                             
|                             
|                              |                                                      | Depreciation and amortization                         |                                                      |                          | 27,498  |              |         |         | 28,719  |       |        |         | 10,039  |     
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              |                                                      |                                                       |                                                      | Total costs and expenses |         |              | 101,104 |         |         |       | 75,147 |         |         |      | 37,045 | 
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              | Operating income                                     |                                                       |                                                      | 18,886                   |         |              |         | 9,387   |         |       |        | 7,501   |        
|                             
|                             
|                             
|                             
|                              |                                                      | Interest expense                                      |                                                      |                          | (27,895 | )            |         |         | (29,902 | )     |        |         | (11,174 | )   
|                             
|                             
|                             
|                             
|                              |                                                      | Merger related costs                                  |                                                      |                          | (5,206  | )            |         |         |        |       |        |         |        |     
|                             
|                             
|                             
|                             
|                              |                                                      | Other expense, net                                    |                                                      |                          | (319    | )            |         |         | (101    | )     |        |         | (195    | )   
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              |                                                      | Loss before extraordinary item                        |                                                      |                          | (14,534 | )            |         |         | (20,616 | )     |        |         | (3,868  | )   
|                             
|                             
|                             
|                             
|                              |                                                      | Extraordinary loss on extinguishment of debt          |                                                      |                          |        |              |         |         |        |       |        |         | (1,420  | )   
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              |                                                      | Net loss                                              |                                                      |                          | (14,534 | )            |         |         | (20,616 | )     |        |         | (5,288  | )   
|                             
|                             
|                             
|                             
|                              |                                                      | Dividends and accretion on preferred stock            |                                                      |                          |        |              |         |         | (2,122  | )     |        |         | (718    | )   
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              |                                                      | Net loss applicable to common stockholders            |                                                      | $                        | (14,534 | )            |         | $       | (22,738 | )     |        | $       | (6,006  | )   
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              |                                                      | Net loss per share applicable to common Stockholders: |                                                      |                          |         |              |         |         |         |       |        |         |         |     
|                             
|                             
|                             
|                             
|                              |                                                      |                                                       | Before extraordinary item                            |                          | $       | (1.58        | )       |         | $       | (2.93 | )      |         | $       | (.74 | )     
|                             
|                             
|                             
|                             
|                              |                                                      |                                                       | Extraordinary item                                   |                          |         |             |         |         |         |      |        |         |         | (.23 | )     
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                              |                                                      |                                                       | Net loss per share applicable to common stockholders |                          | $       | (1.58        | )       |         | $       | (2.93 | )      |         | $       | (.97 | )     
|                              |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|Other Financial Data:         |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                             
|                             
|                             
|                             
|                              | Capital expenditures, excluding cost of Acquisitions |                                                       | $                                                    | 13,654                   |         |              | $       | 25,576  |         |       | $      | 10,050  |        
|                             
|                             
|                             
|                             
|Other Data:                   |                                                      |                                                       |                                                      |                          |         |              |         |         |         |       |        |        
|                             
|                             
|                             
|                             
|                              | Ending cellular subscribers (at period end)          |                                                       |                                                      | N/A                      |         |              |         | 142,934 |         |       |        | 106,574 |        
|                             
|                             
|                             
|                             
|                              | Cellular penetration (at period end)                 |                                                       |                                                      | N/A                      |         |              |         | 6.0     | %       |       |        | 4.5     | %      
|                             
|                             
|                             
|                             
|                              | Cellular churn                                       |                                                       |                                                      | 1.4                      | %       |              |         | 1.3     | %       |       |        | 1.3     | %      
|                             
|                             
|                             
|                             
|                              | Average monthly revenue per cellular subscriber      |                                                       | $                                                    | 45                       |         |              | $       | 36      |         |       | $      | 42      |        
|                             
|                             
|                             
|                             
|                              | Cellular sites (at period end)                       |                                                       |                                                      | 183                      |         |              |         | 163     |         |       |        | 114     |        

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##### Table of Contents



|                    |                                      |              |   |              |  |              |   |         |  |  |   |         |  
|------------------- | ------------------------------------ | ------------ | - | ------------ |  | ------------ | - | ------- |  |  | - | ------- | -
|                    |                                      | December 23, |   | December 31, |  | December 31,
|                    |                                      | 1998         |   | 1997         |  | 1996        
|                    |                                      |              |   |              |  |             
|Balance Sheet Data: |                                      |              |   |              |  |              |   |         |  |  |   |        
|                   
|                   
|                   
|                   
|                    | Property and equipment, net          |              | $ | 51,035       |  |              | $ | 53,007  |  |  | $ | 43,959  |  
|                   
|                   
|                   
|                   
|                    | Total assets                         |              |   | 329,580      |  |              |   | 340,986 |  |  |   | 344,178 |  
|                   
|                   
|                   
|                   
|                    | Total debt                           |              |   | 308,500      |  |              |   | 305,500 |  |  |   | 312,250 |  
|                   
|                   
|                   
|                   
|                    | Mandatory redeemable preferred stock |              |   |             |  |              |   |        |  |  |   | 19,718  |  
|                   
|                   
|                   
|                   
|                    | Stockholders equity (deficit)       |              |   | 4,684        |  |              |   | 19,218  |  |  |   | (1,982  | )




Item 7.  Managements Discussion And Analysis
Of Financial Condition And Results Of Operations

Overview

We own and operate cellular telephone systems serving a large
cluster of properties with a population of approximately
2.4 million and 259,200 subscribers located in northeastern
Ohio, western Pennsylvania and western New York. Our
cellular systems are located in Youngstown, Ohio and Erie,
Pennsylvania, and in primarily rural and suburban areas between
the Cleveland, Akron-Canton, Pittsburgh, Buffalo and Rochester
metropolitan areas. The following discussion and analysis is of
the historical financial condition and results of operations for
us during 2000 and 1999 and for Sygnet during 1998. You should
read this section in conjunction with our consolidated financial
statements, Sygnets consolidated financial statements and
the related notes thereto included in Item 8, Financial
Statements and Supplementary Data.

Revenue

Our operating revenue consists of service revenue, roaming
revenue, equipment sales and other revenue.

We primarily derive service revenue by providing cellular
services to our subscribers. The industry has experienced a
trend of declining average revenue per minute as competition
among wireless service providers has led to reductions in rates
for airtime and subscriptions and other charges. We believe that
the impact of this trend will be mitigated by increases in the
number of cellular telecommunications subscribers and the number
of minutes of usage per subscriber.

Our service revenue also includes charges to our subscribers
when those subscribers roam into other wireless providers
markets. Through 1999, our accounting practice was to net those
revenues against the associated expenses charged to us by
third-party wireless providers (that is, the fees we pay the
other wireless providers for carrying our subscribers
calls on their network) and to record the net expense as cost of
service. Historically, we have been able to pass through to our
subscribers the majority of the costs charged to us by
third-party wireless providers. Recently, the industry has been
moving to pricing plans that include flat rate pricing and
larger home areas. Under these types of plans, amounts charged
to us by other wireless providers may not necessarily be passed
through to our subscribers. Therefore, effective January 1,
2000 we have changed our accounting to report these revenues and
expenses separately in our statement of operations and have
reclassified prior year amounts to reflect this change in
accounting practice.

We derive roaming revenue by providing service to subscribers of
other wireless providers when those subscribers roam
into our markets and use our systems to carry their calls.
Roaming accounted for 24.6% and 26.3% of our cellular revenue
for the years ended December 31, 2000 and 1999 and 23.4% of
Sygnets revenue for the year ended December 31, 1998.
Roaming revenues typically yield higher average per minute rates
and higher margins than revenues from our subscribers. We
achieve these higher margins because we incur virtually no costs
related to equipment, customer service or collections to earn
roaming revenues. Our roaming yield, which is our roaming
service revenues, including airtime, toll charges and
surcharges, divided by roaming minutes of use, was $.37 and $.46
for the years ended December 31, 2000 and 1999, while
Sygnets roaming yield was $.63 per minute for the
year ended December 31, 1998. Roaming revenue tends to be
impacted by seasonality. We typically have higher roaming
revenue during the second and third quarters of each year, as
users tend to travel more and therefore use their wireless
phones more during the spring and summer months. Despite the
decline in our roaming yield, we have seen overall roaming
revenues increase due to growth in roaming minutes of use.

17



---



##### Table of Contents



We include any toll, or long-distance, revenues related to our
cellular and roaming services in service revenue and roaming
revenue.

Equipment sales are revenues from selling equipment to our
subscribers.

Our overall cellular penetration rates increased in 2000 and
1999 compared to Sygnets in 1998 due to the incremental
penetration gains existing markets. We believe that as our
cellular penetration rates increase, the increase in new
subscriber revenue will exceed the loss of revenue attributable
to our cellular churns.

Costs and Expenses

Our primary operating expense categories include cost of
service, cost of equipment, marketing and selling costs, general
and administrative costs and depreciation and amortization.

Our cost of service consists primarily of costs to operate and
maintain our facilities utilized in providing service to
customers and amounts paid to third-party wireless providers for
providing service to our subscribers when our subscribers roam
into their markets.

Our cost of equipment represents the cost associated with
telephone equipment and accessories sold to customers. In recent
years, we and other wireless providers, have increased the use
of discounts on phone equipment and free phone promotions, as
competition between service providers has intensified. As a
result, we have incurred, and expect to continue to incur,
losses on equipment sales, which have resulted in increased
marketing and selling costs per gross additional subscriber.
While we expect to continue these discounts and promotions, we
believe that these promotions will result in increased revenue
from increases in the number of subscribers.

Our marketing and selling costs include advertising,
compensation paid to sales personnel and independent agents and
all other costs to market and sell cellular products and
services and costs related to customer retention. We pay
commissions to direct sales personnel for new business
generated. Independent sales agents receive commissions for
generating new sales and ongoing sales to existing customers.

Our general and administrative costs include all infrastructure
costs, including costs for customer support, billing,
collections, and corporate administration.

Our depreciation and amortization expense represents the costs
associated with the depreciation of our fixed assets and the
amortization of our intangible assets, primarily cellular
license acquisition costs and customer list.

Results of Operations

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

Operating revenue.For the year ended
December 31, 2000, total operating revenue increased
$24.6 million, or 17.6%, to $164.7 million from
$140.1 million for the comparable period in 1999. Our total
service revenue, roaming revenue and equipment and other revenue
represented 70.0%, 24.6% and 5.4%, respectively, of total
operating revenue during the year ended December 31, 2000
and 69.1%, 26.3% and 4.6%, respectively, of total operating
revenue during the year ended December 31, 1999.

The following table sets forth the components of our revenue for
the periods indicated:

|                   |                             |                  |   |         |         |  |   |        |         | 
|------------------ | --------------------------- | ---------------- | - | ------- | ------- |  | - | ------ | ------- | 
|                   |                             |                 
|                   |                             | Year Ended      
|                   |                             | December 31,    
|                   |                             |                 
|                   |                             | 2000             |   | 1999   
|                   |                             |                  |   |        
|                   |                             |                 
|                   |                             | ($ in thousands)
|                  
|                  
|                  
|                  
|Operating revenue: |                             |                  |   |         |         |  |   |       
|                  
|                  
|                  
|                  
|                   | Service revenue             |                  | $ | 115,344 |         |  | $ | 96,812 |        
|                  
|                  
|                  
|                  
|                   | Roaming revenue             |                  |   | 40,509  |         |  |   | 36,889 |        
|                  
|                  
|                  
|                  
|                   | Equipment and other revenue |                  |   | 8,853   |         |  |   | 6,407  |        
|                   |                             |                  |   |         |         |  |   |       
|                   |                             | Total            |   | $       | 164,706 |  |   | $      | 140,108 | 
|                   |                             |                  |   |         |         |  |   |       

18



---



##### Table of Contents



For the year ended December 31, 2000, service revenue
increased $18.5 million, or 19.1%, to $115.3 million
from $96.8 million for the year ended December 31,
1999. This increase was attributable to increased penetration
and usage in our markets. Our subscriber base increased 15.8% to
259,200 at December 31, 2000 from 223,800 at
December 31, 1999. Our average monthly service revenue per
subscriber remained constant at $40 for the years ended
December 31, 2000 and 1999.

For the year ended December 31, 2000, roaming revenue
increased $3.6 million, or 9.8%, to $40.5 million from
$36.9 million for the year ended December 31, 1998.
This increase was primarily attributable to increased roaming
minutes in our markets due to expanded coverage areas offset by
a declining roaming yield.

For the year ended December 31, 2000, equipment and other
revenue increased $2.5 million, or 38.2%, to
$8.9 million from $6.4 million for the year ended
December 31, 1999. This increase was attributable to an
increase in equipment sales due to the growth in gross
subscriber additions.

Cost of service.For the year ended
December 31, 2000, the total cost of service increased
$3.7 million, or 12.4%, to $33.2 million from
$29.5 million for the comparable period in 1999. This
increase was primarily attributable to increased subscribers and
minutes of use in our markets and markets owned by third-party
wireless providers. However, as a percentage of service and
roaming revenue, our cost of cellular service decreased to 21.3%
for the year ended December 31, 2000 from 22.1% for the
year ended December 31, 1999. This decrease was
attributable to a reduction in rates charged by third-party
wireless providers for providing services to our subscribers.

Cost of equipment.For the year ended
December 31, 2000, our cost of equipment increased
$9.3 million, or 68.7%, to $22.9 million from
$13.6 million in 1999, primarily as a result of increases
in the volume of equipment we sold due to the growth in
subscriber additions and migrations of existing subscribers from
analog service to digital service.

Marketing and selling costs.For the year ended
December 31, 2000, our marketing and selling costs
increased $4.0 million, or 18.1%, to $26.0 million
from $22.0 million for the year ended December 31,
1999. This increase was the result of efforts focused to
increase gross additions during the year. We added 90,900 gross
subscribers during the year ended December 31, 2000
compared to 81,100 gross subscribers during the year ended
December 31, 1999.

General and administrative costs.For the year
ended December 31, 2000, our general and administrative
costs increased $4.5 million, or 22.4%, to
$24.5 million from $20.0 million for the year ended
December 31, 1999. This increase was the result of
increased infrastructure costs, including customer service,
billing, collections and administrative costs as a result of the
overall growth. Our overall monthly general and administrative
costs per average subscriber remained constant at $8 for 2000
and 1999.

Depreciation and amortization expense.For the
year ended December 31, 2000, our depreciation and
amortization expense increased $2.3 million, or 3.4% to
$69.8 million from $67.5 million for 1999. This
increase was a result of depreciation and amortization on assets
that were acquired during 1999 and 2000.

Interest expense.For the year ended
December 31, 2000, our interest expense decreased
$0.2 million, or 0.2%, to $65.2 million from
$65.4 million for the year ended December 31, 1999.
This decrease was a result of our decreased level of
indebtedness.

Net loss.For the year ended December 31,
2000, our net loss was $46.3 million. Our net loss
increased $0.6 million, or 1.3%, from $45.7 million in
the year ended December 31, 1999, as a result of the items
discussed above.

Year Ended December 31, 1999 Compared to the Period
from January 1, 1998 to December 23, 1998

For purposes of the following analysis of the results of
operations, we have considered the period from January 1,
1998 to December 23, 1998 for our predecessor Sygnet as the
year ended 1998. Activity from December 24, 1998 to
December 31, 1998 is not material to the comparability of
1999 to 1998.

19



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##### Table of Contents



Operating revenue.For the year ended
December 31, 1999, total operating revenue increased
$20.1 million, or 16.8%, to $140.1 million from
$120.0 million for the comparable period in 1998. Our total
service revenue, roaming revenue and equipment and other revenue
represented 69.1%, 26.3% and 4.6%, respectively, of total
operating revenue during the year ended December 31, 1999
and 70.4%, 23.4% and 6.2%, respectively, of total operating
revenue during the year ended December 31, 1998.

The following table sets forth the components of our revenue for
the periods indicated:

|                   |                             |                  |   |        |         |  |   |        |         | 
|------------------ | --------------------------- | ---------------- | - | ------ | ------- |  | - | ------ | ------- | 
|                   |                             |                 
|                   |                             | Year Ended      
|                   |                             | December 31,    
|                   |                             |                 
|                   |                             | 1999             |   | 1998  
|                   |                             |                  |   |       
|                   |                             |                 
|                   |                             | ($ in thousands)
|                  
|                  
|                  
|                  
|Operating revenue: |                             |                  |   |        |         |  |   |       
|                  
|                  
|                  
|                  
|                   | Service revenue             |                  | $ | 96,812 |         |  | $ | 84,508 |        
|                  
|                  
|                  
|                  
|                   | Roaming revenue             |                  |   | 36,889 |         |  |   | 28,035 |        
|                  
|                  
|                  
|                  
|                   | Equipment and other revenue |                  |   | 6,407  |         |  |   | 7,447  |        
|                   |                             |                  |   |        |         |  |   |       
|                   |                             | Total            |   | $      | 140,108 |  |   | $      | 119,990 | 
|                   |                             |                  |   |        |         |  |   |       

For the year ended December 31, 1999, service revenue
increased $12.3 million, or 14.6%, to $96.8 million
from $84.5 million for the year ended December 31,
1998. This increase was attributable to increased penetration
and usage in our markets. Our subscriber base increased 25.2% to
223,800 at December 31, 1999 from 178,800 at
December 31, 1998. Our average monthly service revenue per
subscriber decreased 11.1% to $40 for the year ended
December 31, 1999 from $45 for the comparable period in
1998 due to the addition of new lower rate subscribers and
competitive market pressures in our markets.

For the year ended December 31, 1999, roaming revenue
increased $8.9 million, or 31.6%, to $36.9 million
from $28.0 million for the year ended December 31,
1998. This increase was primarily attributable to increased
roaming minutes in our markets due to expanded coverage areas
and increased usage in these markets.

For the year ended December 31, 1999, equipment and other
revenues decreased $1.0 million, or 14.0%, to
$6.4 million from $7.4 million for the year ended
December 31, 1998. Of this decrease, $1.3 million was
attributable to a decrease in other revenue earned, which was
offset by an increase of $0.3 million in equipment sales
due to increased sales of equipment as a result of growth in
subscriber additions.

Cost of service.For the year ended
December 31, 1999, the total cost of service increased
$0.3 million, or 1.3%, to $29.5 million from
$29.2 million for the comparable period in 1998. In
addition, as a percentage of service and roaming revenue, our
cost of service decreased to 22.1% for the year ended
December 31, 1999 from 25.9% for the year ended
December 31, 1998. This decrease was primarily attributable
to a reduction in rates charged by third-party cellular
providers for providing services to our subscribers.

Cost of equipment.For the year ended
December 31, 1999, our cost of equipment increased
$3.2 million, or 29.9%, to $13.6 million during 1999
from $10.4 million in 1998, primarily as a result of
increases in the volume of equipment we sold due to the growth
in subscribers.

Marketing and selling costs.For the year ended
December 31, 1999, our marketing and selling costs
increased $9.7 million, or 78.6%, to $22.0 million
from $12.3 million for the year ended December 31,
1998. As a percentage of total operating revenue, marketing and
selling costs increased to 15.7% for the year ended
December 31, 1999 from 10.3% for the year ended
December 31, 1998. These increases were the result of
efforts focused to increase gross additions during the year. We
added 81,100 gross subscribers during the year ended
December 31, 1999 compared to 62,800 gross subscribers
during the year ended December 31, 1998.

General and administrative costs.For the year
ended December 31, 1999, our general and administrative
costs increased $0.2 million, or 1.2%, to
$20.0 million from $19.8 million for the year ended
December 31, 1998. This increase was the result of
increased infrastructure costs, including customer service,
billing, collections and administrative costs as a result of the
overall growth. Our overall monthly general and administrative
costs per average subscriber decreased 27.3% to $8 for 1999
compared to $11 for 1998. This

20



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##### Table of Contents





Depreciation and amortization expense.For the
year ended December 31, 1999, our depreciation and
amortization expense increased $40.0 million, or 145.5% to
$67.5 million from $27.5 million for 1998. This
increase was from the increase in our depreciable assets and
intangibles acquired during the Sygnet acquisition.

Interest expense.For the year ended
December 31, 1999, our interest expense increased
$37.5 million, or 134.3%, to $65.4 million from
$27.9 million for the year ended December 31, 1998.
The increase resulted primarily from our increased borrowings
during December of 1998 to finance the Sygnet acquisition.

Net loss.For the year ended December 31,
1999, our net loss was $45.7 million. Our net loss
increased $31.2 million, or 214.6%, from $14.5 million
in the year ended December 31, 1998. The increase in our
net loss was primarily attributable to increased depreciation
and amortization expense and interest expense resulting from our
acquisition of Sygnet at the end of 1998.

Liquidity and Capital Resources

We have required, and will likely continue to require,
substantial capital to further develop, expand and upgrade our
cellular systems and those we may acquire. We have financed our
operations through cash flows from operating activities,
advances from our parent, bank debt and the sale of debt
securities.

At December 31, 2000, we had working capital of
$25.1 million (a ratio of current assets to current
liabilities of 1.7:1) and an unrestricted cash balance of
$8.9 million, which compares to working capital of
$16.5 million (a ratio of current assets to current
liabilities of 1.6:1) and an unrestricted cash balance of
$2.3 million at December 31, 1999.

Our net cash provided by operating activities totaled
$.7 million for 2000 compared to net cash used by operating
activities of $10.5 million for 1999. This change is
primarily due to the change in accrued expenses.

Our net cash used in investing activities, which totaled
$15.4 million and $17.7 million for the years ended
December 31, 2000 and 1999, respectively, related primarily
to capital expenditures offset by an increase in
payable-affiliates. Capital expenditures for the years ended
December 31, 2000 and 1999 were $31.5 million and
$20.6 million, respectively.

Net cash provided by financing activities was $21.4 million
for the year ended December 31, 2000 compared to
$10.2 million for 1999. Financing activity sources for the
year ended December 31, 2000 consisted primarily of
maturities of restricted investments of $22.1 million,
proceeds from long-term debt of $20.0 million and capital
contributions of $62.6 million, which was offset by
repayments of long-term debt totaling $83.1 million.

Sygnets net cash provided by operating activities was
$10.8 million for the period from January 1, 1998 to
December 23, 1998 and was the result of an increase in
operating income, offset somewhat by a decrease in net working
capital.

Sygnets net cash used in investing activities was
$13.2 million for the period from January 1, 1998 to
December 23, 1998. This activity reflects decreased levels
of purchases of property and equipment primarily for system
buildout in addition to proceeds of $300,000 associated with the
sale of an undeveloped patent to an officer/shareholder of
Sygnet.

Sygnets net cash provided by financing activities was
$3.0 million for the period from January 1, 1998 to
December 23, 1998 as the combination of reduced capital
expenditures and increased cash flow from operating activities
reduced the need for outside financing.

We had capital expenditures of $31.5 million during 2000.
We have budgeted approximately $20.0 to $25.0 million for
capital expenditures in 2001, which will be used to improve
system quality and expand coverage.

21



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##### Table of Contents



Our bank facility originally totaled $430.0 million,
consisting of a $50.0 million reducing revolving credit
facility and $380.0 million of term loan facilities. During
1999, this maximum availability was reduced $8.0 million,
from $430.0 million to $422.0 million as a result of a
combination of a scheduled principal payment due and a mandatory
prepayment on the term loans as a result of proceeds from the
sale of towers. As of December 31, 2000, we had
$334.9 million outstanding under the facility at a weighted
average interest rate of 9.6%. Obligations under our facility
are secured by a pledge of the capital stock of our subsidiary
as well as a lien on substantially all of our assets and our
operating subsidiary. The bank facility requires that we
maintain certain financial ratios. The failure to maintain such
ratios would constitute an event of default, notwithstanding our
ability to meet its debt service obligations. As of
December 31, 2000, we have maintained the required
financial ratios. We cannot provide assurance that we will
continue to maintain these required ratios and our ability to
borrow under our bank facility will be limited by the
requirement that, on a quarterly basis beginning
December 31, 2000, the amount available under our bank
facility will reduce until they terminate. The
$200.0 million senior notes bear an interest rate of 12.25%
and mature in 2008. We used approximately $67.7 million of
the net proceeds to purchase securities pledged to secure the
first six semi-annual interest payments, which began
June 15, 1999.

We currently have an interest rate swap which has effectively
fixed the interest on $85 million of the principal
outstanding on our credit facility at approximately 5.48% plus a
factor used on our leverage (approximately 8.8% at
December 31, 2000). This interest rate swap expires in
March 2001.

As part of our acquisition of Sygnet and its related financing,
Sygnet sold to Dobson Tower Company, a wholly owned subsidiary
of Dobson Communications Corporation, substantially all of the
towers owned by Sygnet for $25.0 million. On
October 15, 1999, Dobson Tower Company sold substantially
all of the towers acquired during the Sygnet acquisition to
American Tower Corporation for approximately $38.7 million.
In connection with this sale, we have agreed to lease the towers
back from American Tower Corporation for an initial term of ten
years.

Although we cannot provide you any assurance, we believe that,
assuming successful implementation of our strategy, including
the further development our cellular systems and significant and
sustained growth in our cash flow, borrowings under our bank
facility and cash flow from operations, will be sufficient to
satisfy our capital expenditure, working capital and debt
service obligations for the next twelve months. We will need to
refinance our bank facility and the notes at their maturities,
which begin in 2007. Our ability to do so will depend on, among
other things, our financial condition at the time, the
restrictions in the instruments governing our indebtedness and
other factors, including market conditions beyond our control.
The actual amount and timing of our future capital requirements
may differ materially from our estimates as a result of, among
other things, the demand for our services and regulatory,
technological and competitive developments. Sources of
additional financing may include commercial bank borrowings,
vendor financing and the sale of equity or debt securities. We
cannot assure you that any such financing will be available on
acceptable terms or at all.

Effect of New Accounting Standards

In July 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133,
Derivatives and Hedging (SFAS 133).
SFAS 133 establishes uniform hedge accounting criteria for
all derivatives requiring companies to formally document,
designate and assess the effectiveness of transactions that
receive hedge accounting. Under SFAS 133, derivatives will
be recorded in the balance sheet as either an asset or liability
measured at its fair value, with changes in the fair value
recognized in current earnings. SFAS 133, as amended by
SFAS 137, Derivatives and Hedging-Deferral of the Effective
Date of FASB Statement No. 133, will be effective for
fiscal years beginning after June 15, 2000. On
January 1, 2001, in accordance with SFAS 133, the
Company recorded an asset and a net gain to comprehensive income
totaling $0.6 million relating to its interest rate hedges.

22



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##### Table of Contents



Forward-Looking Statements

The description of our plans set forth herein, including planned
capital expenditures and acquisitions, are forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These plans
involve a number of risks and uncertainties. Important factors
that could cause actual capital expenditures, acquisition
activity or our performance to differ materially from the plans
include, without limitation, our ability to satisfy the
financial covenants of our outstanding debt instruments and to
raise additional capital; our ability to manage our rapid growth
successfully and to compete effectively in our cellular business
against competitors with greater financial, technical, marketing
and other resources; changes in end-user requirements and
preferences; the development of other technologies and products
that may gain more commercial acceptance than those of ours; and
adverse regulatory changes. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. We undertake no obligation to update
or revise these forward-looking statements to reflect events or
circumstances after the date hereof including, without
limitation, changes in our business strategy or planned capital
expenditures, or to reflect the occurrence of unanticipated
events.




Item 7A.  Quantitative and Qualitative Disclosure
About Market Risk

Our primary market risk relates to changes in interest rates.
Market risk is the potential loss arising from adverse changes
in market prices and rates, including interest rates. We do not
enter into derivatives or other financial instruments for
trading or speculative purposes. The objective of our financial
risk management is to minimize the negative impact of interest
rate fluctuations on our earnings and equity. We currently have
an interest rate swap that effectively fixes the interest rate
on $85.0 million of the principal outstanding on our credit
facility. Increases in interest expense related to the interest
rate swap for the year ended December 31, 2000 were
reflected in income and were immaterial.

The fair market value of long-term fixed interest rate debt is
subject to interest rate risk. Generally, the fair market value
of fixed interest rate debt will increase as interest rates fall
and decrease as interest rates rise. Based on our market risk
sensitive instruments outstanding at December 31, 2000, we
have determined that there was no material market risk exposure
to our consolidated financial position, results of operations or
cash flows as of such date.

23



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##### Table of Contents



Item 8.  Financial Statements and Supplementary
Data






INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                                                                                                                                                      |  |      |    | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                                                                                      |  | Page
|                                                                                                                                                                      |  |     
|Consolidated Financial Statements:                                                                                                                                    |  |      |    | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Dobson/ Sygnet Communications Company                                                                                                                                 |  |      |    | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Report of independent public accountants                                                                                                                              |  |      | 25 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Consolidated Balance Sheets as of December 31, 2000 and 1999                                                                                                          |  |      | 26 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Consolidated Statements of Operations for the years ended
	December 31, 2000, 1999 and the period from inception
	(July 23, 1998) through December 31, 1998           |  |      | 27 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Consolidated Statements of Stockholders Equity for the
	years ended December 31, 2000, 1999 and the period from
	inception (July 23, 1998) through December 31, 1998 |  |      | 28 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Consolidated Statements of Cash Flows for the years ended
	December 31, 2000, 1999 and the period from inception
	(July 23, 1998) through December 31, 1998           |  |      | 29 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Notes to Consolidated Financial Statements                                                                                                                            |  |      | 30 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Sygnet Wireless, Inc. (The Predecessor Company)                                                                                                                       |  |      |    | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Report of independent auditors                                                                                                                                        |  |      | 38 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Consolidated Statement of Operations for the period
	January 1, 1998 through December 23, 1998                                                                        |  |      | 39 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Consolidated Statement of Stockholders Equity for the
	period January 1, 1998 through December 23, 1998                                                              |  |      | 40 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Consolidated Statement of Cash Flows for the period
	January 1, 1998 through December 23, 1998                                                                        |  |      | 41 | 
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Notes to Consolidated Financial Statements                                                                                                                            |  |      | 42 | 

24



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##### Table of Contents






REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of



We have audited the accompanying consolidated balance sheets of
Dobson/ Sygnet Communications Company (an Oklahoma corporation)
and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of operations,
stockholders equity and cash flows for the years ended
December 31, 2000 and 1999 and for the period from
inception (July 23, 1998) through December 31, 1998.
These consolidated 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 in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Dobson/ Sygnet Communications
Company and subsidiaries as of December 31, 2000 and 1999,
and the results of their operations and their cash flows for the
years ended December 31, 2000 and 1999 and for the period
from inception through December 31, 1998, in conformity
with accounting principles generally accepted in the United
States.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Oklahoma City, Oklahoma,



25



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY






CONSOLIDATED BALANCE SHEETS


DECEMBER 31, 2000 AND 1999

|                                                                                                                                    |                                            |      |             |             |  |   |             |             | 
|----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---- | ----------- | ----------- |  | - | ----------- | ----------- | 
|                                                                                                                                    |                                            | 2000 |             | 1999       
|                                                                                                                                    |                                            |      |             |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|ASSETS                                                                                                                             
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|CURRENT ASSETS:                                                                                                                     |                                            |      |             |             |  |   |             |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Cash and cash equivalents                                                                                                           |                                            | $    | 8,871,817   |             |  | $ | 2,259,212   |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Restricted cash and investments                                                                                                     |                                            |      | 26,153,677  |             |  |   | 22,919,339  |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Accounts receivable, net of allowance for doubtful accounts of
	$421,040 and $500,063 in 2000 and 1999, respectively                |                                            |      | 20,433,870  |             |  |   | 15,671,828  |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Inventory                                                                                                                           |                                            |      | 3,977,359   |             |  |   | 3,825,595   |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Prepaid expenses and other                                                                                                          |                                            |      | 1,011,633   |             |  |   | 483,666     |            
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|                                                                                                                                    | Total current assets                       |      |             | 60,448,356  |  |   |             | 45,159,640  | 
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|PROPERTY, PLANT AND EQUIPMENT, net                                                                                                  |                                            |      | 72,257,805  |             |  |   | 57,389,201  |            
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|OTHER ASSETS:                                                                                                                       |                                            |      |             |             |  |   |             |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Restricted investments                                                                                                              |                                            |      |            |             |  |   | 26,426,470  |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Cellular license acquisition costs, net of accumulated
	amortization of $96,728,198 and $50,090,558 in 2000 and 1999,
	respectively |                                            |      | 620,824,915 |             |  |   | 666,857,580 |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Deferred financing costs, net of accumulated amortization of
	$10,446,283 and $5,231,553 in 2000 and 1999, respectively             |                                            |      | 40,558,866  |             |  |   | 45,526,469  |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Customer list, net of accumulated amortization of $18,073,712
	and $9,434,076 in 2000 and 1999, respectively                        |                                            |      | 26,614,038  |             |  |   | 35,253,674  |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Other                                                                                                                               |                                            |      | 285,897     |             |  |   | 707,733     |            
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|                                                                                                                                    | Total other assets                         |      |             | 688,283,716 |  |   |             | 774,771,926 | 
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|                                                                                                                                    | Total assets                               |      | $           | 820,989,877 |  |   | $           | 877,320,767 | 
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                               
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|CURRENT LIABILITIES:                                                                                                                |                                            |      |             |             |  |   |             |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Accounts payable                                                                                                                    |                                            | $    | 10,637,640  |             |  | $ | 9,530,798   |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Accrued expenses                                                                                                                    |                                            |      | 3,510,931   |             |  |   | 3,529,718   |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Accrued interest payable                                                                                                            |                                            |      | 2,531,975   |             |  |   | 1,179,155   |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Deferred revenue and customer deposits                                                                                              |                                            |      | 4,386,131   |             |  |   | 3,334,015   |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Current portion of long-term debt                                                                                                   |                                            |      | 14,250,000  |             |  |   | 11,125,000  |            
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|                                                                                                                                    | Total current liabilities                  |      |             | 35,316,677  |  |   |             | 28,698,686  | 
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|OTHER LIABILITIES:                                                                                                                  |                                            |      |             |             |  |   |             |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Payables  affiliates                                                                                                               |                                            |      | 26,740,660  |             |  |   | 11,178,994  |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Long-term debt, net of current portion                                                                                              |                                            |      | 520,636,754 |             |  |   | 586,875,000 |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Deferred income taxes                                                                                                               |                                            |      | 123,772,343 |             |  |   | 152,354,284 |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|STOCKHOLDERS EQUITY:                                                                                                               |                                            |      |             |             |  |   |             |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Common stock, $1.00 par value, 500 shares authorized
	and 100 shares issued and outstanding in 2000 and 1999,
	respectively         |                                            |      | 100         |             |  |   | 100         |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Additional paid-in capital                                                                                                          |                                            |      | 207,632,804 |             |  |   | 145,000,000 |            
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|Retained deficit                                                                                                                    |                                            |      | (93,109,461 | )           |  |   | (46,786,297 | )          
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|                                                                                                                                    | Total stockholders equity                 |      |             | 114,523,443 |  |   |             | 98,213,803  | 
|                                                                                                                                    |                                            |      |             |             |  |   |             |            
|                                                                                                                                    | Total liabilities and stockholders equity |      | $           | 820,989,877 |  |   | $           | 877,320,767 | 
|                                                                                                                                    |                                            |      |             |             |  |   |             |            

The accompanying notes are an integral part of these
consolidated balance sheets.

26



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY






CONSOLIDATED STATEMENTS OF OPERATIONS


FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

AND FOR THE PERIOD FROM INCEPTION

(JULY 23, 1998) THROUGH DECEMBER 31, 1998

|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |           | 
|--------------------------------------------------------------------- | ----------------------------- | ----------------------- | ----------- | --------------- |  | ----------------- | ----------- | ----------- |  | - | ---------- | --------- | 
|                                                                      |                               |                         |             |                 |  | Period from      
|                                                                      |                               |                         |             | inception      
|                                                                      |                               | Year ended December 31, |             | (July 23, 1998)
|                                                                      |                               |                         |             | through        
|                                                                      |                               | 2000                    |             | 1999            |  | December 31, 1998
|                                                                      |                               |                         |             |                 |  |                  
|OPERATING REVENUE:                                                    |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Service revenue               |                         | $           | 115,343,806     |  |                   | $           | 96,811,512  |  |   | $          | 1,563,266 | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Roaming revenue               |                         |             | 40,509,670      |  |                   |             | 36,889,249  |  |   |            | 664,323   | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Equipment and other revenue   |                         |             | 8,852,908       |  |                   |             | 6,407,302   |  |   |            | 190,791   | 
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|                                                                      | Total operating revenue       |                         |             | 164,706,384     |  |                   |             | 140,108,063 |  |   |            | 2,418,380 | 
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|OPERATING EXPENSES:                                                   |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Cost of service               |                         |             | 33,193,396      |  |                   |             | 29,534,936  |  |   |            | 160,230   | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Cost of equipment             |                         |             | 22,892,157      |  |                   |             | 13,566,343  |  |   |            | 369,146   | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Marketing and selling         |                         |             | 26,007,187      |  |                   |             | 22,015,236  |  |   |            | 463,853   | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | General and administrative    |                         |             | 24,536,409      |  |                   |             | 20,039,549  |  |   |            | 613,014   | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Depreciation and amortization |                         |             | 69,840,697      |  |                   |             | 67,515,628  |  |   |            | 1,661,856 | 
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|                                                                      | Total operating expenses      |                         |             | 176,469,846     |  |                   |             | 152,671,692 |  |   |            | 3,268,099 | 
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|OPERATING LOSS                                                        |                               |                         | (11,763,462 | )               |  |                   | (12,563,629 | )           |  |   | (849,719   | )        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|INTEREST EXPENSE                                                      |                               |                         | (65,235,347 | )               |  |                   | (65,360,804 | )           |  |   | (886,297   | )        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|INTEREST INCOME                                                       |                               |                         | 2,317,388   |                 |  |                   | 4,235,890   |             |  |   | 20,271     |          
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|OTHER EXPENSE, NET                                                    |                               |                         | (33,360     | )               |  |                   | (57,480     | )           |  |   |           |          
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|LOSS BEFORE INCOME TAXES                                              |                               |                         | (74,714,781 | )               |  |                   | (73,746,023 | )           |  |   | (1,715,745 | )        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|INCOME TAX BENEFIT                                                    |                               |                         | 28,391,617  |                 |  |                   | 28,023,488  |             |  |   | 651,983    |          
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|NET LOSS                                                              |                               | $                       | (46,323,164 | )               |  | $                 | (45,722,535 | )           |  | $ | (1,063,762 | )        
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|BASIC NET LOSS APPLICABLE TO THE COMMON STOCKHOLDER PER COMMON
	SHARE |                               | $                       | (463,232    | )               |  | $                 | (457,225    | )           |  | $ | (10,638    | )        
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          
|BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                      |                               |                         | 100         |                 |  |                   | 100         |             |  |   | 100        |          
|                                                                      |                               |                         |             |                 |  |                   |             |             |  |   |            |          

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

27



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY






CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

AND THE PERIOD FROM INCEPTION


(JULY 23, 1998) THROUGH DECEMBER 31, 1998

|                          |                                   |              |     |        |  |                   |     |           |  |       |             |             |  |   |             |             |   |   |             |             |  
|------------------------- | --------------------------------- | ------------ | --- | ------ |  | ----------------- | --- | --------- |  | ----- | ----------- | ----------- |  | - | ----------- | ----------- | - | - | ----------- | ----------- | -
|                          |                                   |              |     |        |  |                   |     |          
|                          |                                   | Common Stock |     |        |  |                   |     |          
|                          |                                   |              |     |        |  | Retained Earnings |     |          
|                          |                                   | Shares       |     | Amount |  | Paid-in Capital   |     | (Deficit) |  | Total
|                          |                                   |              |     |        |  |                   |     |           |  |      
|INCEPTION (JULY 23, 1998) |                                   |              |    |        |  | $                 |    |           |  | $     |            |             |  | $ |            |             |   | $ |            |            
|                         
|                         
|                         
|                         
|                          | Issuance of common stock, at cost |              |     | 100    |  |                   |     | 100       |  |       |             |            |  |   |             |            |   |   |             | 100         |  
|                         
|                         
|                         
|                         
|                          | Capital contribution              |              |     |       |  |                   |     |          |  |       |             | 145,000,000 |  |   |             |            |   |   |             | 145,000,000 |  
|                         
|                         
|                         
|                         
|                          | Net loss                          |              |     |       |  |                   |     |          |  |       |             |            |  |   |             | (1,063,762  | ) |   |             | (1,063,762  | )
|                          |                                   |              |     |        |  |                   |     |           |  |       |             |             |  |   |             |             |   |   |             |            
|DECEMBER 31, 1998         |                                   |              | 100 |        |  | $                 | 100 |           |  | $     | 145,000,000 |             |  | $ | (1,063,762  | )           |   | $ | 143,936,338 |            
|                          |                                   |              |     |        |  |                   |     |           |  |       |             |             |  |   |             |             |   |   |             |            
|                          | Net loss                          |              |     |       |  |                   |     |          |  |       |             |            |  |   |             | (45,722,535 | ) |   |             | (45,722,535 | )
|                          |                                   |              |     |        |  |                   |     |           |  |       |             |             |  |   |             |             |   |   |             |            
|DECEMBER 31, 1999         |                                   |              | 100 |        |  | $                 | 100 |           |  | $     | 145,000,000 |             |  | $ | (46,786,297 | )           |   | $ | 98,213,803  |            
|                          |                                   |              |     |        |  |                   |     |           |  |       |             |             |  |   |             |             |   |   |             |            
|                          | Capital contribution              |              |     |       |  |                   |     |          |  |       |             | 62,632,804  |  |   |             |            |   |   |             | 62,632,804  |  
|                         
|                         
|                         
|                         
|                          | Net loss                          |              |     |       |  |                   |     |          |  |       |             |            |  |   |             | (46,323,164 | ) |   |             | (46,323,164 | )
|                          |                                   |              |     |        |  |                   |     |           |  |       |             |             |  |   |             |             |   |   |             |            
|DECEMBER 31, 2000         |                                   |              | 100 |        |  | $                 | 100 |           |  | $     | 207,632,804 |             |  | $ | (93,109,461 | )           |   | $ | 114,523,443 |            
|                          |                                   |              |     |        |  |                   |     |           |  |       |             |             |  |   |             |             |   |   |             |            

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

28



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY






CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

AND THE PERIOD FROM INCEPTION


(JULY 23, 1998) THROUGH DECEMBER 31, 1998

|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |              |            |              |  
|--------------------------------------------------------- | ------------------------------------------------------------------------------------------ | -------------------------------------- | --------------------------------------------------- | --------------- | ----------- | ----------- | ----------- | ----------- | ----------- | ----------- | ---------- | ------------ | ---------- | ------------ | -
|                                                          |                                                                                            |                                        |                                                     |                 |             | Period from
|                                                          |                                                                                            |                                        |                                                     |                 |             | Inception  
|                                                          |                                                                                            |                                        |                                                     | (July 23, 1998)
|                                                          |                                                                                            | Year ended December 31,                |                                                     | through        
|                                                          |                                                                                            |                                        |                                                     | December 31,   
|                                                          |                                                                                            | 2000                                   |                                                     | 1999            |             | 1998       
|                                                          |                                                                                            |                                        |                                                     |                 |             |            
|CASH FLOWS FROM OPERATING ACTIVITIES:                     |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Net loss                                                                                   |                                        | $                                                   | (46,323,164     | )           |             | $           | (45,722,535 | )           |             | $          | (1,063,762   | )         
|                                                          | Adjustments to reconcile net loss to net cash provided by (used
	in) operating activities |                                        |                                                     |                 |             |             |             |             |             |             |            |              |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Depreciation and amortization          |                                                     |                 | 69,840,697  |             |             |             | 67,515,628  |             |            |              | 1,661,856  |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Amortization of financing costs        |                                                     |                 | 5,214,730   |             |             |             | 5,231,553   |             |            |              |           |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Deferred income taxes                  |                                                     |                 | (28,581,941 | )           |             |             | (29,144,889 | )           |            |              |           |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Other                                  |                                                     |                 | 33,360      |             |             |             | 57,476      |             |            |              |           |             
|                                                          | Changes in current assets and liabilities                                                 |                                        |                                                     |                 |             |             |             |             |             |             |            |              |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Accounts receivable                    |                                                     |                 | (5,367,017  | )           |             |             | (2,546,471  | )           |            |              | (908,119   | )           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Inventory                              |                                                     |                 | (151,764    | )           |             |             | (1,406,219  | )           |            |              | 369,146    |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Interest receivable                    |                                                     |                 | 1,112,132   |             |             |             |            |             |            |              |           |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Prepaid expenses and other             |                                                     |                 | (527,967    | )           |             |             | (1,725,690  | )           |            |              | (1,329,143 | )           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Accounts payable                       |                                                     |                 | 3,050,980   |             |             |             | 7,455,357   |             |            |              | (30,238    | )           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Accrued expenses                       |                                                     |                 | 1,334,033   |             |             |             | (11,090,709 | )           |            |              | 2,518,958  |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                            | Deferred revenue and customer deposits |                                                     |                 | 1,052,116   |             |             |             | 896,994     |             |            |              |           |             
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                          |                                                                                            |                                        | Net cash (used in) provided by operating activities |                 |             | 686,195     |             |             |             | (10,479,505 | )          |              |            | 1,218,698    |  
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                         
|CASH FLOWS FROM INVESTING ACTIVITIES:                     |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Capital expenditures                                                                       |                                        |                                                     | (31,543,675     | )           |             |             | (20,591,960 | )           |             |            |             |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Purchase of cellular licenses and properties                                               |                                        |                                                     |                |             |             |             | (5,134,969  | )           |             |            | (615,865,412 | )         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Proceeds from sale of assets                                                               |                                        |                                                     | 134,152         |             |             |             | 794,587     |             |             |            | 25,000,000   |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Increase in receivable-affiliate                                                           |                                        |                                                     | (394,274        | )           |             |             |            |             |             |            |             |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Increase in payable-affiliate                                                              |                                        |                                                     | 15,955,940      |             |             |             | 7,188,631   |             |             |            | 3,990,363    |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment in unconsolidated subsidiaries and other, net                                   |                                        |                                                     | 421,836         |             |             |             |            |             |             |            |             |           
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                          |                                                                                            |                                        | Net cash used in investing activities               |                 |             | (15,426,021 | )           |             |             | (17,743,711 | )          |              |            | (586,875,049 | )
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                         
|CASH FLOWS FROM FINANCING ACTIVITIES:                     |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Repayments of long-term debt                                                               |                                        |                                                     | (83,113,246     | )           |             |             | (31,000,000 | )           |             |            |             |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Proceeds from long-term debt                                                               |                                        |                                                     | 20,000,000      |             |             |             | 22,000,000  |             |             |            | 607,000,000  |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Proceeds from capital contributions                                                        |                                        |                                                     | 62,632,804      |             |             |             |            |             |             |            | 115,000,100  |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Purchase of restricted investments                                                         |                                        |                                                     |                |             |             |             |            |             |             |            | (67,733,293  | )         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Maturities of restricted investments                                                       |                                        |                                                     | 22,080,000      |             |             |             | 20,530,000  |             |             |            |             |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Deferred financing costs                                                                   |                                        |                                                     | (247,127        | )           |             |             | (1,310,549  | )           |             |            | (48,347,479  | )         
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                          |                                                                                            |                                        | Net cash provided by financing activities           |                 |             | 21,352,431  |             |             |             | 10,219,451  |            |              |            | 605,919,328  |  
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS      |                                                                                            |                                        | 6,612,605                                           |                 |             |             | (18,003,765 | )           |             |             | 20,262,977 |             
|                                                         
|                                                         
|                                                         
|                                                         
|CASH AND CASH EQUIVALENTS, beginning of year              |                                                                                            |                                        | 2,259,212                                           |                 |             |             | 20,262,977  |             |             |             |           |             
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|CASH AND CASH EQUIVALENTS, end of year                    |                                                                                            | $                                      | 8,871,817                                           |                 |             | $           | 2,259,212   |             |             | $           | 20,262,977 |             
|                                                          |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                         
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:        |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                          | Cash paid for                                                                             |                                        |                                                     |                 |             |             |             |             |             |             |            |              |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Interest, net of amounts capitalized                                                       |                                        | $                                                   | 58,667,815      |             |             | $           | 59,937,253  |             |             |            |             |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES: |                                                                                            |                                        |                                                     |                 |             |             |             |             |             |             |            |             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Acquisition purchase price contributed by parent                                           |                                        |                                                     |                |             |             |             |            |             |             | $          | 30,000,000   |           

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

29



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  ORGANIZATION:

The Company was incorporated under the name Front Nine
Holdings, Inc. as an Oklahoma corporation on July 23,
1998. Subsequently, the Company changed its name to
Dobson/Sygnet Communications Company (the Company)
and amended its certificate of incorporation on December 2,
1998 to reflect this change. The Company is a wholly owned
subsidiary of Dobson Communications Corporation (Dobson
Communications) and is a provider of rural and suburban
cellular telephone services.

Capital Resources and Growth

The Company has substantial indebtedness and debt service
requirements and is subject to significant financial
restrictions and limitations. If the Company is unable to
satisfy any of the covenants under the credit facility
(described in Note 4) including financial covenants, the
Company will be unable to borrow under the credit facility
during such time period to fund planned capital expenditures,
its ongoing operations or other permissible uses.

The Companys ability to manage future growth will depend
upon its ability to monitor operations, control costs and
maintain effective quality controls, all of which will result in
higher operating expenses. Any failure to expand these areas and
to implement and improve its systems, procedures and controls in
an efficient manner at a pace consistent with the growth of the
Companys business could have a material adverse effect on
the Companys business, financial condition and results of
operations.

2.  SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements of the Company include the
accounts of all wholly owned subsidiaries.

Cash and Cash Equivalents

Cash and cash equivalents on the accompanying consolidated
balance sheets includes cash and short-term investments with
original maturities of three months or less.

Inventory

The Company values its inventory at the lower of cost or market
on the first-in, first-out method of accounting.

Impairment of Long-Lived Assets

The Company assesses potential impairments of long-lived assets,
certain identifiable intangibles and goodwill when there is
evidence that events or changes in circumstances indicate that
an assets carrying value may not be recoverable. An
impairment loss is recognized when the sum of the expected
future net cash flows is less than the carrying amount of the
asset, including intangible assets. The amount of any recognized
impairment would be based on the estimated fair value of the
asset subject to impairment compared to the carrying amount of
such asset. The fair value of intangible assets will be
determined based on the discounted cash flows of the market or
markets to which the intangible assets relate. The Company has
identified no such losses.

30



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2.  SIGNIFICANT ACCOUNTING POLICIES: (Continued)


Cellular License Acquisition Costs

Cellular license acquisition costs consist of amounts paid to
acquire FCC licenses to provide cellular services. Cellular
license acquisition costs are being amortized on a straight-line
basis over fifteen years. Amortization expense of $46,637,640,
$48,934,995 and $1,054,538 was recorded in 2000, 1999 and 1998
respectively.

Deferred Financing Costs

Deferred financing costs consist of fees incurred to secure
long-term debt. Deferred financing costs are being amortized on
a straight-line basis over the terms of the debt of nine to ten
years. Amortization expense related to these costs of
$5,214,730, $5,231,553 and $101,025 was recorded in 2000, 1999
and 1998, respectively.

Customer List

Customer list acquisition costs are being amortized on a
straight-line basis over five years. Amortization expense of
$8,639,636, $9,235,464 and $198,612 was recorded in 2000, 1999
and 1998, respectively.

Advertising Costs

Advertising costs are expensed as incurred and are included as
marketing and selling expenses in the accompanying consolidated
statements of operations.

Income Taxes

The Company files a consolidated income tax return with its
parent, Dobson Communications. Income taxes are allocated among
the various entities included in the consolidated tax return, as
agreed, based on the ratio of each entitys taxable income
(loss) to consolidated taxable income (loss). For financial
reporting purposes, the Company calculates its provision for
income taxes on a stand-alone basis. Deferred income taxes
reflect the estimated future tax effects of differences between
financial statement and tax bases of assets and liabilities at
year end.

Revenue Recognition

The Company records service revenues over the period they are
earned. The cost of providing service is recognized as incurred.

Airtime and toll revenue is billed in arrears. The Company
accrued estimated unbilled revenues for services provided of
approximately $2,441,645 and $1,547,000 as of December 31,
2000 and 1999, respectively, which are included in accounts
receivable in the accompanying consolidated balance sheets.
Monthly access charges are billed in advance and are reflected
as deferred revenue on the accompanying consolidated balance
sheets. Equipment sales are recognized when the equipment is
delivered to the customer. Subscriber acquisition costs
(primarily commissions and losses on equipment sales) are
expensed as incurred.

As of December 31, 2000, the Company implemented SEC Staff
Accounting Bulleting (SAB) No. 101 relating to
revenue recognition in financial statements. The impact of this
implementation was not material to the Companys revenues
or results of operations for the year ended December 31,
2000.

31



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2.  SIGNIFICANT ACCOUNTING POLICIES: (Continued)


Earnings Per Share

Basic loss per common share is computed using the weighted
average number of shares of common stock outstanding during the
year. There were no potentially dilutive securities outstanding
during 2000 and 1999.

Use of Estimates

The preparation of these consolidated financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results
could differ from those estimates.

Significant Concentrations

In connection with providing cellular services to customers of
other wireless carriers, the Company has contractual agreements
with those carriers, which provide for agreed-upon billing rates
between the parties. Approximately 91%, 85% and 64% of the
Companys cellular roaming revenue was earned from
customers of three wireless carriers during the periods ended
December 31, 2000, 1999 and 1998, respectively.

Recently Issued Accounting Pronouncements

In July 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133,
Derivatives and Hedging (SFAS 133).
SFAS 133 establishes uniform hedge accounting criteria for
all derivatives requiring companies to formally document,
designate and assess the effectiveness of transactions that
receive hedge accounting. Under SFAS 133, derivatives will
be recorded in the balance sheet as either an asset or liability
measured at its fair value, with changes in the fair value
recognized as a component of comprehensive income or in current
earnings. SFAS 133, as amended by SFAS 137,
Derivatives and Hedging-Deferral of the Effective Date of FASB
Statement No. 133, will be effective for fiscal years
beginning after June 15, 2000. On January 1, 2001, in
accordance with SFAS 133, the Company recorded an asset and
a net gain to comprehensive income totaling $0.6 million
relating to its interest rate hedges.

Reclassifications

Certain reclassifications have been made to the previously
presented 1999 balances to conform them to the current
presentation.

3.  PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are recorded at cost. Newly
constructed cellular systems are added to property, plant and
equipment at cost, which includes contracted services, direct
labor, materials overhead and any capitalized interest. For the
years ended December 31, 2000, 1999, and 1998 no interest
was capitalized. Existing property, plant and equipment
purchased through acquisitions is recorded at its fair value at
the date of the purchase. Repairs, minor replacements and
maintenance are charged to operations as incurred. The
provisions for depreciation are provided using the straight-line
method based on the estimated useful lives of the various
classes of depreciable property.

32



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



3.  PROPERTY, PLANT AND EQUIPMENT: (Continued)


Listed below are the major classes of property, plant and
equipment and their estimated useful lives, in years, as of
December 31, 2000 and 1999:

|                                            |                                    |             |      |      |  |      |             |            |  |   |            |            | 
|------------------------------------------- | ---------------------------------- | ----------- | ---- | ---- |  | ---- | ----------- | ---------- |  | - | ---------- | ---------- | 
|                                            |                                    | Useful Life |      | 2000 |  | 1999
|                                            |                                    |             |      |      |  |     
|Cellular systems and equipment              |                                    |             | 2-10 |      |  | $    | 73,697,891  |            |  | $ | 44,235,798 |           
|                                           
|                                           
|                                           
|                                           
|Buildings and improvements                  |                                    |             | 5-40 |      |  |      | 10,765,681  |            |  |   | 8,804,869  |           
|                                           
|                                           
|                                           
|                                           
|Vehicles, aircraft and other work equipment |                                    |             | 3-10 |      |  |      | 331,397     |            |  |   | 334,572    |           
|                                           
|                                           
|                                           
|                                           
|Furniture and office equipment              |                                    |             | 5-10 |      |  |      | 9,052,907   |            |  |   | 4,399,928  |           
|                                           
|                                           
|                                           
|                                           
|Plant under construction                    |                                    |             |      |      |  |      | 2,056,962   |            |  |   | 7,921,065  |           
|                                           
|                                           
|                                           
|                                           
|Land                                        |                                    |             |      |      |  |      | 188,522     |            |  |   | 1,011,163  |           
|                                            |                                    |             |      |      |  |      |             |            |  |   |            |           
|                                            | Property, plant and equipment      |             |      |      |  |      |             | 96,093,360 |  |   |            | 66,707,395 | 
|                                           
|                                           
|                                           
|                                           
|Accumulated depreciation                    |                                    |             |      |      |  |      | (23,835,555 | )          |  |   | (9,318,194 | )         
|                                            |                                    |             |      |      |  |      |             |            |  |   |            |           
|                                            | Property, plant and equipment, net |             |      |      |  |      | $           | 72,257,805 |  |   | $          | 57,389,201 | 
|                                            |                                    |             |      |      |  |      |             |            |  |   |            |           

4.  LONG-TERM DEBT:

The Companys long-term debt as of December 31, 2000
and 1999 consisted of the following:

|                            |                      |      |             |             |  |   |             |             | 
|--------------------------- | -------------------- | ---- | ----------- | ----------- |  | - | ----------- | ----------- | 
|                            |                      | 2000 |             | 1999       
|                            |                      |      |             |            
|Revolving credit facility   |                      | $    | 334,886,754 |             |  | $ | 398,000,000 |            
|                           
|                           
|                           
|                           
|Dobson/ Sygnet Senior Notes |                      |      | 200,000,000 |             |  |   | 200,000,000 |            
|                            |                      |      |             |             |  |   |             |            
|                            | Total debt           |      |             | 534,886,754 |  |   |             | 598,000,000 | 
|                           
|                           
|                           
|                           
|Less-current maturities     |                      |      | 14,250,000  |             |  |   | 11,125,000  |            
|                            |                      |      |             |             |  |   |             |            
|                            | Total long-term debt |      | $           | 520,636,754 |  |   | $           | 586,875,000 | 
|                            |                      |      |             |             |  |   |             |            

Credit Facility

On December 23, 1998, the Company obtained
$430 million of financing pursuant to a senior secured
credit facility (Dobson/ Sygnet Credit Facility)
from Bank of America, consisting of a $50 million reducing
revolving credit facility and $380 million of term loan
facilities. During 1999, the maximum availability of
$430.0 million was reduced to $422.0 million as a
result of a combination of a principal payment due and a
mandatory repayment on the term loans totaling
$8.0 million. As of December 31, 2000 and 1999, the
Company had $334.9 million and $398.0 million
outstanding, respectively, at a weighted average interest rate
of 9.6% and 9.8%, respectively. The Companys obligations
under the Dobson/ Sygnet Credit Facility are secured by all
current and future assets of the Company. Initial proceeds were
used primarily to finance the Sygnet Acquisition (described in
Note 7). The Company expects to use the remaining
availability to finance capital expenditures and general
operations. The facility will terminate in 2007.

The Dobson/ Sygnet Credit Facility requires the Company to
maintain certain financial ratios. The failure to maintain such
ratios would constitute an event of default, notwithstanding the
Companys ability to meet its debt service obligations. At
December 31, 2000, the Company was in compliance with all
required financial ratios.

The Company currently has an interest rate swap which has
effectively fixed the interest on $85.0 million of the
principal outstanding on the Dobson/ Sygnet Credit Facility at
approximately 5.48% plus a factor based

33



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



4.  LONG-TERM DEBT: (Continued)


on our leverage (approximately 8.8% at December 31, 2000).
This interest rate swap expires in March 2001. The Company
accounts for the interest rate swap as a hedge.

Senior Notes

On December 23, 1998, the Company issued $200 million
of 12.25% Senior Notes maturing in 2008 (Dobson/
Sygnet Senior Notes). The net proceeds were used to
finance the Sygnet Acquisition (described in Note 7) and to
purchase securities pledged to secure payment of the first six
semi-annual interest payments on the Dobson/ Sygnet Senior
Notes, which began on June 15, 1999. The pledged securities
are reflected as restricted cash and investments in the
Companys consolidated balance sheets. The Dobson/ Sygnet
Senior Notes are redeemable at the option of the Company in
whole or in part, on or after December 15, 2003, initially
at 106.125%. Prior to December 15, 2001, the Company may
redeem up to 35% of the principal amount of the Dobson/ Sygnet
Senior Notes at 112.25% with proceeds from equity offerings,
provided that at least $130 million remains outstanding.

Minimum future payments of long-term debt for years subsequent
to December 31, 2000, are as follows:

|                    |  |   |             | 
|------------------- |  | - | ----------- | 
|                   
|                   
|                   
|                   
|2001                |  | $ | 14,250,000  | 
|                   
|                   
|                   
|                   
|2002                |  |   | 16,125,000  | 
|                   
|                   
|                   
|                   
|2003                |  |   | 31,375,000  | 
|                   
|                   
|                   
|                   
|2004                |  |   | 46,750,000  | 
|                   
|                   
|                   
|                   
|2005                |  |   | 77,250,000  | 
|                   
|                   
|                   
|                   
|2006 and thereafter |  |   | 349,136,754 | 
|                    |  |   |             | 
|                    |  | $ | 534,886,754 | 
|                    |  |   |             | 

5.  RESTRICTED CASH AND INVESTMENTS:

Restricted cash and investments consist of interest pledge
deposits for the Dobson/ Sygnet Senior Notes and an escrow
amount to cover any significant, unforeseeable tower expenses
relating to the towers our affiliate sold (as discussed in
Note 10). The senior notes interest pledge deposit includes
the initial deposit of $67.7 million (as discussed in
Note 4), net of interest earned and payments made to
bondholders. The escrow reserve for the towers included an
initial deposit of $3.0 million, which has been reduced to
$2.0 million. Amortization expense of $503,846 and $769,956
was recorded in 2000 and 1999, respectively, as a reduction of
interest income for bond premiums recorded with the purchase of
the restricted investments.

6.  STOCKHOLDERS EQUITY:

On December 23, 1998, the Company received an equity
contribution of $145 million from its parent company,
Dobson Communications. This contribution was used to partially
fund the Sygnet Wireless, Inc. acquisition (described in
Note 7 below).

During the year 2000, the Company received an equity
contribution of $62.6 million from its parent company,
Dobson Communications. This contribution was used to paydown
debt.

7.  ACQUISITIONS:

On December 23, 1998, the Company acquired Sygnet
Wireless, Inc. for $337.5 million. At the date of the
acquisition, Sygnet had $309 million of indebtedness, which
was immediately refinanced (See Note 4). Included in the
$337.5 million of purchase price was $30 million of
Dobson Communications Class F

34



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



7.  ACQUISITIONS: (Continued)


preferred stock issued to certain sellers of Sygnet
Wireless, Inc. and another party. The Sygnet markets
include cellular systems in Ohio, Pennsylvania and New York
covering an estimated population base of 2.4 million people.

The purchase price was allocated as follows ($ in
thousands):

|                                      |                      |   |          |         | 
|------------------------------------- | -------------------- | - | -------- | ------- | 
|                                     
|                                     
|                                     
|                                     
|Purchase price of Sygnet common stock |                      | $ | 337,500  |        
|                                     
|                                     
|                                     
|                                     
|Sygnet indebtedness assumed           |                      |   | 309,000  |        
|                                      |                      |   |          |        
|                                      | Total purchase price |   | $        | 646,500 | 
|                                      |                      |   |          |        
|Current assets                        |                      | $ | 37,400   |        
|                                     
|                                     
|                                     
|                                     
|Property, plant and equipment         |                      |   | 47,000   |        
|                                     
|                                     
|                                     
|                                     
|Cellular license costs                |                      |   | 710,800  |        
|                                     
|                                     
|                                     
|                                     
|Other assets                          |                      |   | 45,900   |        
|                                     
|                                     
|                                     
|                                     
|Current liabilities                   |                      |   | (13,100  | )      
|                                     
|                                     
|                                     
|                                     
|Deferred tax liabilities              |                      |   | (181,500 | )      
|                                      |                      |   |          |        
|                                      |                      | $ | 646,500  |        
|                                      |                      |   |          |        

We are aware of no unresolved matters that will materially
impact the purchase price allocation.

Concurrent with the acquisition of Sygnet Wireless, Inc. by
the Company, Dobson/ Sygnet Operating Company was merged into
Sygnet Wireless, Inc. This merger was accounted for as a
merger of entities under common control. Also concurrent with
the acquisition of Sygnet Wireless, Inc., the Company sold
substantially all of its cellular towers to an affiliate for
$25 million (see Note 10.).

On December 14, 1999, the Company purchased the Federal
Communications Corporation (FCC) license for, and
certain assets related to, Pennsylvania 2 RSA for
$6.0 million. Pennsylvania 2 is located in Northwest
Pennsylvania and covers an estimated population base of 88,000.

8.  EMPLOYEE BENEFIT PLANS:

401(K) Plan

The Companys parent, Dobson Communications, maintains a
401(k) plan (the Plan) in which substantially all
employees of the Company are eligible to participate. The Plan
requires the Company to match 100% of employees
contributions up to 4% of their salary. Contributions to the
Plan charged to the Companys operations were approximately
$307,000 and $285,000 for the years ended December 31, 2000
and 1999 respectively.

9.  TAXES:

The benefit for income taxes for the years ended
December 31, 2000, 1999 and 1998 differs from amounts
computed at the statutory rate as follows:

|                                                     |  |      |             |      |  |      |             |   |  |   |          |  
|---------------------------------------------------- |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | -------- | -
|                                                     |  | 2000 |             | 1999 |  | 1998
|                                                     |  |      |             |      |  |     
|Income taxes at statutory rate (34%)                 |  | $    | (25,403,025 | )    |  | $    | (25,073,649 | ) |  | $ | (583,353 | )
|                                                    
|                                                    
|                                                    
|                                                    
|State income taxes, net of Federal income tax effect |  |      | (2,988,592  | )    |  |      | (2,949,839  | ) |  |   | (68,630  | )
|                                                     |  |      |             |      |  |      |             |   |  |   |          |  
|                                                     |  | $    | (28,391,617 | )    |  | $    | (28,023,488 | ) |  | $ | (651,983 | )
|                                                     |  |      |             |      |  |      |             |   |  |   |          |  

35



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



9.  TAXES: (Continued)


The tax effects of the temporary differences that gave rise to
deferred tax assets and liabilities at December 31, 2000
and 1999 were as follows:

|                                  |                                              |                                              |   |              |              |   |   |              |              |  
|--------------------------------- | -------------------------------------------- | -------------------------------------------- | - | ------------ | ------------ | - | - | ------------ | ------------ | -
|                                  |                                              | 2000                                         |   | 1999        
|                                  |                                              |                                              |   |             
|Current deferred income taxes:    |                                              |                                              |   |              |              |   |   |             
|                                 
|                                 
|                                 
|                                 
|                                  | Allowance for doubtful accounts receivable   |                                              | $ | 160,000      |              |   | $ | 190,024      |             
|                                  |                                              |                                              |   |              |              |   |   |             
|                                  |                                              | Net current deferred income tax asset        |   |              | 160,000      |   |   |              | 190,024      |  
|                                  |                                              |                                              |   |              |              |   |   |             
|Noncurrent deferred income taxes: |                                              |                                              |   |              |              |   |   |             
|                                 
|                                 
|                                 
|                                 
|                                  | Fixed assets                                 |                                              |   | 28,120       |              |   |   | 1,710,760    |             
|                                 
|                                 
|                                 
|                                 
|                                  | Cellular license costs and other intangibles |                                              |   | (168,734,190 | )            |   |   | (183,865,044 | )           
|                                 
|                                 
|                                 
|                                 
|                                  | Tax credits and carryforwards                |                                              |   | 44,933,727   |              |   |   | 29,800,000   |             
|                                  |                                              |                                              |   |              |              |   |   |             
|                                  |                                              | Net noncurrent deferred income tax liability |   |              | (123,772,343 | ) |   |              | (152,354,284 | )
|                                  |                                              |                                              |   |              |              |   |   |             
|                                  |                                              | Total deferred income tax liability          |   | $            | (123,612,343 | ) |   | $            | (152,164,260 | )
|                                  |                                              |                                              |   |              |              |   |   |             

At December 31, 2000, the Company had NOL carryforwards of
approximately $115 million, which may be utilized to reduce
future Federal income taxes payable. The Companys NOL
carryforwards begin to expire in 2012.

10.  RELATED PARTY TRANSACTIONS:

At December 31, 2000 and 1999, the Company had payables due
to affiliates of $26,740,660 and $11,178,994, respectively,
primarily due to Dobson Communications for liabilities paid on
behalf of the Company. There are no requirements for payables
due to affiliates to be repaid to Dobson Communications during
2001.

In connection with the Sygnet acquisition, the Company sold
substantially all of its cellular towers to an affiliate for
$25 million. On October 15, 1999, the affiliate sold
substantially all of the towers acquired during the Sygnet
acquisition to American Tower Corporation for approximately
$38.7 million. In connection with the sale, the Company has
agreed to lease the towers back from American Tower Corporation
for an initial term of ten years.

Dobson Communications, as the Companys parent, provides
certain services to the Company. Certain costs incurred by
Dobson Communications are shared-costs of the Company and Dobson
Communications. These shared costs are allocated between the
Company and Dobson Communications primarily based on each
Companys pro rata population coverage and subscribers.

11.  COMMITMENTS:

Future minimum lease payments required under operating leases
that have an initial or remaining noncancellable lease term in
excess of one year at December 31, 2000, are as follows:

|                    |  |   |            | 
|------------------- |  | - | ---------- | 
|                   
|                   
|                   
|                   
|2001                |  | $ | 5,047,477  | 
|                   
|                   
|                   
|                   
|2002                |  |   | 4,524,351  | 
|                   
|                   
|                   
|                   
|2003                |  |   | 4,117,970  | 
|                   
|                   
|                   
|                   
|2004                |  |   | 3,721,720  | 
|                   
|                   
|                   
|                   
|2005                |  |   | 3,099,282  | 
|                   
|                   
|                   
|                   
|2006 and thereafter |  |   | 12,416,367 | 

36



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##### Table of Contents



DOBSON/ SYGNET COMMUNICATIONS COMPANY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



11.  COMMITMENTS: (Continued)


Lease expense related to the above leases was approximately
$5,670,000 and $2,452,000 for the years ended December 31,
2000 and 1999, respectively.

12.  FAIR VALUE OF FINANCIAL INSTRUMENTS:

Unless otherwise noted, the carrying value of the Companys
financial instruments approximates fair value. The Company
estimates the fair value of its long-term debt based on quoted
market prices for publicly traded debt or on the current rates
available to the Company for debt with similar terms and
remaining maturation.

Indicated below are the carrying amounts and estimated fair
values of the Companys financial instruments as of
December 31:

|                            |  |          |             |            |  |          |             |            |  |   |             |  |  |   |             | 
|--------------------------- |  | -------- | ----------- | ---------- |  | -------- | ----------- | ---------- |  | - | ----------- |  |  | - | ----------- | 
|                            |  |          |             |           
|                            |  | 2000     |             | 1999      
|                            |  |          |             |           
|                            |  | Carrying |             |            |  | Carrying |             |           
|                            |  | Amount   |             | Fair Value |  | Amount   |             | Fair Value
|                            |  |          |             |            |  |          |             |           
|Revolving credit facility   |  | $        | 334,886,754 |            |  | $        | 334,886,754 |            |  | $ | 398,000,000 |  |  | $ | 398,000,000 | 
|                           
|                           
|                           
|                           
|Dobson/ Sygnet Senior Notes |  |          | 200,000,000 |            |  |          | 198,000,000 |            |  |   | 200,000,000 |  |  |   | 220,000,000 | 
|                           
|                           
|                           
|                           
|Interest rate hedge asset   |  |          |            |            |  |          | 583,210     |            |  |   |            |  |  |   | 343,191     | 

37



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##### Table of Contents






Report of Independent Auditors

The Board of Directors



We have audited the accompanying consolidated statements of
operations, shareholders equity (deficit), and cash flows
of Sygnet Wireless, Inc. for the period from
January 1, 1998 through December 23, 1998 (the date of
the sale of the Company). 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 in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated results of operations and cash flows of Sygnet
Wireless, Inc. for the period from January 1, 1998
through December 23, 1998, in conformity with generally
accepted accounting principles.



| |                  
| | -----------------
| | ERNST & YOUNG LLP

Cleveland, Ohio



38



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)






CONSOLIDATED STATEMENT OF OPERATIONS


|                               |                               |                        |             |            | 
|------------------------------ | ----------------------------- | ---------------------- | ----------- | ---------- | 
|                               |                               | Period from January 1,
|                               |                               | 1998 through          
|                               |                               | December 23, 1998     
|                               |                               |                       
|Revenue:                       |                               |                        |             |           
|                              
|                              
|                              
|                              
|                               | Subscriber revenue            |                        | $           | 64,785,498 | 
|                              
|                              
|                              
|                              
|                               | Roamer revenue                |                        |             | 28,034,831 | 
|                              
|                              
|                              
|                              
|                               | Equipment sales               |                        |             | 5,794,056  | 
|                              
|                              
|                              
|                              
|                               | Other revenue                 |                        |             | 1,653,264  | 
|                               |                               |                        |             |           
|Total revenue                  |                               |                        | 100,267,649 |           
|                              
|                              
|                              
|                              
|Costs and expenses:            |                               |                        |             |           
|                              
|                              
|                              
|                              
|                               | Cost of services              |                        |             | 9,433,254  | 
|                              
|                              
|                              
|                              
|                               | Cost of equipment sales       |                        |             | 10,443,870 | 
|                              
|                              
|                              
|                              
|                               | General and administrative    |                        |             | 19,796,012 | 
|                              
|                              
|                              
|                              
|                               | Selling and marketing         |                        |             | 12,327,160 | 
|                              
|                              
|                              
|                              
|                               | Merger related costs (Note 2) |                        |             | 1,883,952  | 
|                              
|                              
|                              
|                              
|                               | Depreciation and amortization |                        |             | 27,497,687 | 
|                               |                               |                        |             |           
|Total costs and expenses       |                               |                        | 81,381,935  |           
|                               |                               |                        |             |           
|Income from operations         |                               |                        | 18,885,714  |           
|                              
|                              
|                              
|                              
|Other:                         |                               |                        |             |           
|                              
|                              
|                              
|                              
|                               | Interest expense              |                        |             | 27,895,156 | 
|                              
|                              
|                              
|                              
|                               | Merger related costs (Note 2) |                        |             | 5,205,492  | 
|                              
|                              
|                              
|                              
|                               | Other expense, net            |                        |             | 319,121    | 
|                               |                               |                        |             |           
|Loss before extraordinary item |                               |                        | (14,534,055 | )         
|                               |                               |                        |             |           
|Net loss                       |                               | $                      | (14,534,055 | )         
|                               |                               |                        |             |           

See accompanying notes.

39



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)






CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(DEFICIT)


|                                |                           |         |           |         |  |            |        |          |  |               |           |           |   |             |        |        |   |   |            |  |  |   |             |             |   |   |          |   | 
|------------------------------- | ------------------------- | ------- | --------- | ------- |  | ---------- | ------ | -------- |  | ------------- | --------- | --------- | - | ----------- | ------ | ------ | - | - | ---------- |  |  | - | ----------- | ----------- | - | - | -------- | - | 
|                                |                           |         |           |         |  |            |        |          |  | Note         
|                                |                           | Class A |           | Class B |  | Additional |        | Retained |  | Receivable   
|                                |                           |         |           |         |  | Paid-In    |        | Earnings |  | from Officer/
|                                |                           | Shares  |           | Amount  |  | Shares     |        | Amount   |  | Capital       |           | (Deficit) |   | Shareholder
|                                |                           |         |           |         |  |            |        |          |  |               |           |           |   |            
|Balance as of December 31, 1997 |                           |         | 4,010,653 |         |  | $          | 40,107 |          |  |               | 5,159,977 |           |   | $           | 51,599 |        |   | $ | 47,598,498 |  |  | $ | (28,222,124 | )           |   | $ | (249,952 | )
|                               
|                               
|                               
|                               
|                                | Net loss                  |         |           |         |  |            |        |          |  |               |           |           |   |             |        |        |   |   |            |  |  |   |             | (14,534,055 | ) |   |          |   | 
|                               
|                               
|                               
|                               
|                                | Exchange of common shares |         |           | 731,893 |  |            |        | 7,319    |  |               |           | (731,893  | ) |             |        | (7,319 | ) |   |            |  |  |   |             |             |   |   |          |   | 
|                                |                           |         |           |         |  |            |        |          |  |               |           |           |   |             |        |        |   |   |            |  |  |   |             |             |   |   |          |  
|Balance as of December 23, 1998 |                           |         | 4,742,546 |         |  | $          | 47,426 |          |  |               | 4,428,084 |           |   | $           | 44,280 |        |   | $ | 47,598,498 |  |  | $ | (42,756,179 | )           |   | $ | (249,952 | )
|                                |                           |         |           |         |  |            |        |          |  |               |           |           |   |             |        |        |   |   |            |  |  |   |             |             |   |   |          |  

See accompanying notes.

40



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)






CONSOLIDATED STATEMENT OF CASH FLOWS


|                                                                                 |                                                     |                                       |             |            |            |  
|-------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------------------------- | ----------- | ---------- | ---------- | -
|                                                                                 |                                                     | Period from                          
|                                                                                 |                                                     | January 1, through                   
|                                                                                 |                                                     | December 23, 1998                    
|                                                                                 |                                                     |                                      
|Operating activities                                                             |                                                     |                                       |             |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Net loss                                                                         |                                                     | $                                     | (14,534,055 | )         
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Adjustments to reconcile net loss to net cash provided by
	operating activities: |                                                     |                                       |             |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Depreciation                                        |                                       |             | 15,085,641 |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Amortization                                        |                                       |             | 12,412,046 |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Compensation expense from issuance of stock options |                                       |             |           |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Loss on disposal of equipment                       |                                       |             | 96,128     |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Extraordinary loss on extinguishment of debt        |                                       |             |           |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Changes in operating assets and liabilities:        |                                       |             |            |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                     | Accounts receivable                   |             |            | (1,526,182 | )
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                     | Inventory                             |             |            | (921,077   | )
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                     | Prepaid and deferred expenses         |             |            | 30,380     |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                     | Accounts payable and accrued expenses |             |            | 3,494,470  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                     | Accrued interest payable              |             |            | (3,366,590 | )
|                                                                                 |                                                     |                                       |             |           
|Net cash provided by operating activities                                        |                                                     |                                       | 10,770,761  |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Investing activities                                                             |                                                     |                                       |             |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Acquisitions of Horizon and Erie                                                 |                                                     |                                       |            |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Purchases of property and equipment                                              |                                                     |                                       | (13,654,200 | )         
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Proceeds from sale of equipment                                                  |                                                     |                                       | 444,500     |           
|                                                                                 |                                                     |                                       |             |           
|Net cash used in investing activities                                            |                                                     |                                       | (13,209,700 | )         
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Financing activities                                                             |                                                     |                                       |             |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Dividends paid                                                                   |                                                     |                                       |            |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Proceeds from long-term debt                                                     |                                                     |                                       | 21,800,000  |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Principal payments on long-term debt                                             |                                                     |                                       | (18,800,000 | )         
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Increase in financing costs                                                      |                                                     |                                       |            |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Net proceeds from issuance of preferred stock                                    |                                                     |                                       |            |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Redemption of preferred stock                                                    |                                                     |                                       |            |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Net proceeds from issuance of common stock                                       |                                                     |                                       |            |           
|                                                                                 |                                                     |                                       |             |           
|Net cash provided by financing activities                                        |                                                     |                                       | 3,000,000   |           
|                                                                                 |                                                     |                                       |             |           
|Increase (decrease) in cash and cash equivalents                                 |                                                     |                                       | 561,061     |           
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Cash and cash equivalents at beginning of year                                   |                                                     |                                       | 860,086     |           
|                                                                                 |                                                     |                                       |             |           
|Cash and cash equivalents at end of year                                         |                                                     | $                                     | 1,421,147   |           
|                                                                                 |                                                     |                                       |             |           

See accompanying notes.

41



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


For the Period from January 1, 1998 through
December 23, 1998

1.  Description of Business and Basis of Presentation

These financial statements include the accounts of Sygnet
Wireless, Inc. and its wholly-owned subsidiary Sygnet
Communications, Inc. (Sygnet) (hereinafter collectively
referred to as the Company). Intercompany balances
and transactions have been eliminated in the consolidated
financial statements. The Company owns and operates in one
segment, cellular telephone systems, serving one large cluster
with an approximate population of 2.4 million in
Northeastern Ohio, Western Pennsylvania and Western
New York.

2.  Subsequent Event

On December 23, 1998, a wholly-owned subsidiary of Dobson
Communications Corp. (Dobson), acquired all outstanding shares
of Class A and B common stock (including the granted
options of the Company as described in Note 10) of the
Company for $337.5 million in cash. In connection with the
purchase, the Notes (as described in Note 4) were tendered
for a total price of $1,181.61 for each $1,000 in principal. The
Bank Credit Facility (as described in Note 4) was repaid
and terminated. The Company incurred $7.1 million in merger
costs associated with this business combination. The merger
costs included approximately $4.8 million for an advisory
fee and $0.4 million in legal and accounting fees, which
are recorded, as other non-operating expenses. In addition, the
Company incurred $1.9 million for related employee
severance, retention and stock option plans that are included in
costs and expenses.

3.  Significant Accounting Policies

Cash Equivalents

The Company considers all liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

Property and Equipment

Property and equipment are recorded at cost and are depreciated
over their estimated useful lives (ranging from 2.5 to
19 years) calculated under the straight-line or double
declining balance methods.

Intangible Assets

Cellular Licenses and Customer Lists

The FCC issues licenses that enable cellular carriers to provide
cellular service in specific geographic areas. The FCC grants
licenses for a term of up to 10 years and generally grants
renewals if the licensee has complied with its obligations under
the Communications Act of 1934. In 1993, the FCC adopted
specific standards to apply to cellular renewals, concluding it
will award a renewal to a cellular licensee that meets certain
standards of past performance. Historically, the FCC has granted
license renewals routinely. The Company believes that it has
met, and will continue to meet all requirements necessary to
secure renewal of its cellular licenses.

The Company has acquired cellular licenses and customer lists
through its acquisition of interests in various cellular
systems. The Company uses a 40-year useful life to amortize its
licenses under the straight-line method. Purchased cellular and
paging customer lists are being amortized over 5 years
under the straight-line method. Amortization expense was
$11,295,083 for the period from January 1, through
December 23, 1998.

The ongoing value and remaining useful lives of intangible and
other long-term assets are subject to periodic evaluation and
the Company currently expects the carrying amounts to be fully
recoverable. When

42



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Period from January 1, 1998 through
December 23, 1998



3.  Significant Accounting Policies (Continued)


events and circumstances indicate that intangible and other
long-term assets might be impaired, an undiscounted cash flow
methodology would be used to determine whether an impairment
loss would be recognized. Measurement of the amount of the
impairment may be based on appraisal, market values of similar
assets, or estimated discounted cash flows reflecting the use
and ultimate disposition of the assets.

Deferred Financing Costs

Deferred financing costs are being amortized over the terms of
the bank credit facility and senior notes. Amortization expense
was $1,116,963 for the period from January 1, 1998 through
December 23, 1998.

Revenue Recognition

The Company earns revenue primarily by providing cellular
services to its customers (Subscriber Revenue) and from the
usage of its system by the customers of other cellular carriers
(Roamer Revenue). Access revenue for Subscriber Revenue is
billed one month in advance. Revenue is recognized as service is
rendered. Subscriber acquisition costs (primarily commissions
and loss on equipment sales) are expensed when incurred.

Advertising Costs

Advertising costs are recorded as expense when incurred.
Advertising expense was $1,851,047 for the period from
January 1, 1998 through December 23, 1998.

Stock Compensation

The Company accounts for its stock-based employee compensation
arrangements based on the intrinsic value of the equity
instruments granted, as set forth in APB Opinion No. 25,
Accounting For Stock Issued to Employees, and related
interpretations.

Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements. Actual results may differ from
those estimates.

Significant Concentrations

In connection with providing cellular services to customers of
other cellular carriers, the Company has contractual agreements
with those carriers, which provide for agreed upon billing rates
between the parties. Approximately 43% of the Companys
Roamer Revenue was earned from two cellular carriers, for the
period from January 1, 1998 through December 23, 1998.

Financial Instruments

Derivative financial instruments are used by the Company in the
management of interest rate exposure and are accounted for on an
accrual basis. Income and expense are recorded in the same
category as that arising from the related liability being hedged
(i.e., adjustments to interest expense).

43



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Period from January 1, 1998 through
December 23, 1998



3.  Significant Accounting Policies (Continued)


The Company uses variable interest rate credit facilities to
finance acquisitions and operations of the Company. The Company
may reduce its exposure to fluctuations in interest rates by
creating offsetting positions through the use of derivative
financial instruments. The Company does not use derivative
financial instruments for trading or speculative purposes, nor
is the Company a party to leveraged derivatives. The notional
amount of interest rate swaps is the underlying principal amount
used in determining the interest payments exchanged over the
life of the swap. The notional amount is not a measure of the
Companys exposure through its use of derivatives.

The Company may be exposed to credit loss in the event of
nonperformance by the counterparties to its interest rate swap
agreements. The Company anticipates the counterparties will be
able to fully satisfy their obligations under the agreements.

4.  Long-term Debt

On September 19, 1996, the Company issued $110,000,000
11  1/2% unsecured Senior Notes due October 1, 2006
(the Notes). The Notes paid interest semiannually on
April 1 and October 1 of each year commencing
April 1, 1997. The Notes were redeemable at the option of
the Company at redemption prices (expressed as a percentage of
principal amount) ranging from 105.75% in 2001 to 100.00% in
2005 and thereafter. Among other things, the Notes contain
certain covenants which limited additional indebtedness, payment
of dividends, sale of assets or stock, changes in control and
transactions with related parties. The proceeds from the Notes
were used to repay amounts borrowed under a $75 million
bank credit agreement and to finance the 1996 acquisition of
Horizon. The notes were retired in connection with the sale of
the Company described in Note 2.

On October 9, 1996, Sygnet entered into a new financing
agreement (the Bank Credit Facility) with a commercial bank
group. The Bank Credit Facility was a senior secured reducing
revolver that provided Sygnet the ability to borrow up to
$300 million through June 30, 1999. Mandatory
reductions in the revolver were to occur quarterly thereafter
through June 30, 2005, when the Bank Credit Facility was to
terminate. The Bank Credit Facility was secured by certain
assets and the stock of Sygnet. The Bank Credit Facility
provided for various borrowing rate options based on either a
fixed spread over the London Interbank Offered Rate (LIBOR) or
the prime rate. Interest payments were made quarterly. The Bank
Credit Facility was retired in connection with the sale of the
Company described in Note 2.

Among other things, the Bank Credit Facility contained financial
covenants, which required the maintenance of debt service ratios
and the hedging of interest rate risk and limited distributions
to shareholders and sales of assets. In connection with these
covenants, the Company has a three year interest rate swap with
a total underlying notional amount of $80 million. The swap
agreement converted the interest rate on $80 million
notional amount of the credit facility from a variable rate
based upon a three month LIBOR (5.25% at December 23, 1998)
to fixed rates ranging from 5.79% to 6.03%. Amounts paid or
received under these agreements are recognized as adjustments to
interest expense.

Interest paid was $31,294,880 for the period from
January 1, 1998 through December 23, 1998.

5.  Leases

The Company has entered into various operating leases for land
and office facilities. Leases for tower sites provide for
periodic extensions of lease periods with future lease payments
indexed to the consumer price index.

44



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Period from January 1, 1998 through
December 23, 1998



5.  Leases (Continued)


Rent expense was $2,411,310 for the period from January 1,
1998 through December 23, 1998.

6.  Retirement Plan

The Company sponsors a 401(k) retirement and profit sharing
plan, which covers substantially all its employees. Eligible
employees can contribute from 1% to 15% of their compensation.
The Company, at its discretion, may match a portion of the
employees contribution. The Company may also, at its
discretion, make additional profit sharing contributions to the
plan. In connection with the sale of Company described in
Note 2, the Plan will be merged with the Dobson 401(k)
plan. Total pension expense was $357,000 for the period from
January 1, 1998 through December 23, 1998.

7.  Redeemable Preferred Stock and Warrants

On April 3, 1997, 100,000 shares of Series A
Senior Cumulative Nonvoting Preferred Stock (Preferred Stock)
were redeemed by the Company at a cost of $10,000,000 which was
funded by the Bank Credit Facility. On June 20, 1997, the
remaining 118,394.51 shares of Preferred Stock were
redeemed by the Company at a cost of $11,839,451. This
redemption was funded by the Common Stock Sale described in
Note 8.

The Preferred Stock had a redemption value of $100 per
share and was recorded at fair value on the date of issuance
less issuance costs. Dividends were cumulative from the date of
issuance, accrued quarterly in arrears and were payable in
shares of Preferred Stock. The dividend rates increased annually
from 15% in 1997 to 21% in 2000 and thereafter. The Preferred
Stock included the potential issuance of warrants to purchase
shares of the Companys Class A Common Stock. No
warrants were issued. For financial reporting purposes, the
excess of the redemption value of the Preferred Stock over the
carrying value was accreted by periodic charges to additional
paid-in capital over the life of the issue.

The Company has authorized 5 million shares of Nonvoting
Preferred Stock, par value $.01 per share, of which 500,000
are designated as Series A Senior Cumulative Nonvoting
Preferred Stock.

The Company has also authorized 10 million shares of Voting
Preferred Stock, par value $.01 per share, none of which
are issued.

8.  Shareholders Equity

On June 20, 1997, the Company issued and sold
3,000,000 shares of Class A Common Stock,
$0.01 par value, to Boston Ventures Limited
Partnership V (Boston Ventures) at a price of $15 per
share (Common Stock Sale). The proceeds of $43.6 million,
net of issuance fees of $1.4 million, were used to redeem
the remaining outstanding Preferred Stock as described in
Note 7 and to reduce amounts outstanding under the Bank
Credit Facility. As a condition of the Common Stock Sale, Boston
Ventures appointed two representatives on the Companys
eleven-member board of directors.

In August 1997, Boston Ventures purchased 1,000,000 shares
of Class B Common Stock from shareholders pursuant to a
tender offer, which upon purchase became Class A Common
Stock.

Under the most restrictive of the covenants (discussed in
Note 4), the Company could not declare any dividends on its
common stock through December 23, 1998.

On December 29, 1994, the Company received a promissory
note from an officer/shareholder for $249,952 for the purchase
of common shares from a shareholder. The note required annual
payment of

45



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Period from January 1, 1998 through
December 23, 1998



8.  Shareholders Equity (Continued)


interest at 8.23% with principal repayment commencing on
December 31, 1998 through December 31, 2001. The
officer/shareholder repaid 100% of the note and interest accrued
on December 29, 1998.

9.  Income Taxes

Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, requires deferred income
taxes to be provided for differences in the basis for tax
purposes and for financial accounting purposes of recorded
assets and liabilities. At December 23, 1998, the Company
has net operating loss carryforwards of $45.2 million that
expire in 2012 and 2013.

The components of the income tax provision (benefit) in the
consolidated statements of operations for the period
January 1, 1998 through December 23, 1998 are as
follows:

|                                         |  |      |            |  
|---------------------------------------- |  | ---- | ---------- | -
|                                         |  | 1998
|                                         |  |     
|Deferred income tax (benefit)            |  | $    | (4,782,900 | )
|                                        
|                                        
|                                        
|                                        
|Valuation allowance                      |  |      | 4,782,900  |  
|                                         |  |      |            |  
|Total provision for income tax (benefit) |  | $    |           |  
|                                         |  |      |            |  

10.  Stock Option Plan

The Company has stock option plans that provide for the purchase
of Class A common stock by employees and directors of the
Company. Under the stock option plans, the Company is authorized
to issue 1,250,000 options for the purchase of shares of
Class A common stock (1,000,000 for employees and 250,000
for non-employee directors). These options vest over a period
ranging from grant date to five years, are exercisable based
upon the terms of the grants and expire at the end of ten years.
The Company applies APB Opinion No. 25, Accounting for
Stock issued to Employees, and related interpretations in
accounting for the plan, which requires that for certain options
granted, the Company recognizes as compensation expense the
excess of the fair value for accounting purposes of the common
stock over the exercise price of the options. For the majority
of options, no compensation cost has been recognized. Had stock
compensation plans been determined based on the fair value at
the grant dates for awards under those plans consistent with the
method of SFAS No. 123, Accounting for Stock-Based
Compensation, the Companys net loss would have
increased by $419,000 from the amounts reported for the period
from January 1, 1998 through December 23, 1998.

For pro forma calculations, the fair value of each option is
estimated on the date of grant using the Minimum Value
option-pricing model with the following weighted-average
assumptions used for grants in 1998: risk-free interest rates
ranging from 6.9% to 5.9% and average expected lives ranging
from 5.0 to 7.5 years for issued options.

46



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##### Table of Contents



SYGNET WIRELESS, INC. (Predecessor Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Period from January 1, 1998 through
December 23, 1998



10.  Stock Option Plan (Continued)


A summary of the status of the Companys stock option plan
as of December 23, 1998 and changes during the period is
presented below:

|                                                               |  |        |         |          |  |   |       | 
|-------------------------------------------------------------- |  | ------ | ------- | -------- |  | - | ----- | 
|                                                               |  |        |         | Weighted
|                                                               |  |        |         | -Average
|                                                               |  |        |         | Exercise
|                                                               |  | Shares |         | Price   
|                                                               |  |        |         |         
|Outstanding at beginning of year                               |  |        | 716,200 |          |  | $ | 10.08 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Granted                                                        |  |        | 210,500 |          |  |   | 18.03 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Exercised                                                      |  |        |        |          |  |   |      | 
|                                                              
|                                                              
|                                                              
|                                                              
|Canceled                                                       |  |        | (1,000  | )        |  |   | 20.00 | 
|                                                               |  |        |         |          |  |   |       | 
|Outstanding at year end                                        |  |        | 925,700 |          |  | $ | 11.88 | 
|                                                               |  |        |         |          |  |   |       | 
|Options exercisable at year end                                |  |        | 815,700 |          |  |   |       | 
|                                                               |  |        |         |          |  |   |       | 
|Weighted-average fair value of options granted during the year |  |        |         |          |  | $ | 1.65  | 
|                                                               |  |        |         |          |  |   |       | 
|Weighted-average remaining contractual life                    |  |        |         |          |  |   | 8.71  | 
|                                                               |  |        |         |          |  |   |       | 

At December 23, 1998, there were 324,300 options available
for future grant.

11.  Commitments

On June 8, 1998, the Company entered into an agreement with
Pinellas Communications to purchase the license to operate a
cellular telephone system in the Rural Service Area PA-2. The
purchase price is $6 million and the transaction is
expected to close in first quarter of 1999.

47



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##### Table of Contents






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

None




PART III




Item 10.  Directors and Executive Officers of the
Registrant

Information omitted in accordance with General Instruction
I(2)(c).




Item 11.  Executive Composition

Information omitted in accordance with General Instruction
I(2)(c).




Item 12.  Security Ownership of Certain Beneficial
Owners and Management

Information omitted in accordance with General Instruction
I(2)(c).




Item 13.  Certain Relationships and Related
Transactions

Information omitted in accordance with General Instruction
I(2)(c).

48



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##### Table of Contents






PART IV




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

(a)(1)  The following financial statements of Dobson
Communications Corporation are included in Item 8:

|                                                                                                                                                                                   |  |  |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|Dobson/ Sygnet Communications Company                                                                                                                                              |  |  |  | 
|Consolidated Balance Sheets as of December 31, 2000 and 1999                                                                                                                       |  |  |  | 
|Consolidated Statement of Operations for the years ended
        December 31, 2000, 1999 and the period from inception
        (July 23, 1998) through December 31, 1998           |  |  |  | 
|Consolidated Statement of Stockholders Equity for the
        years ended December 31, 2000, 1999 and the period from
        inception (July 23, 1998) through December 31, 1998 |  |  |  | 
|Consolidated Statement of Cash Flows for the years ended
        December 31, 2000, 1999 and the period from inception
        (July 23, 1998) through December 31, 1998           |  |  |  | 
|Notes to Consolidated Financial Statements                                                                                                                                         |  |  |  | 
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|                                                                                                                                                                                  
|Sygnet Wireless, Inc. (The Predecessor Company)                                                                                                                                    |  |  |  | 
|Consolidated Statement of Operations for the period
        January 1, 1998 through December 23, 1998                                                                              |  |  |  | 
|Consolidated Statement of Stockholders Equity for the
        period January 1, 1998 through December 23, 1998                                                                    |  |  |  | 
|Consolidated Statement of Cash Flows for the period
        January 1, 1998 through December 23, 1998                                                                              |  |  |  | 
|Notes to Consolidated Financial Statements                                                                                                                                         |  |  |  | 

(2)  Schedule IIValuation Allowance Accounts

All other schedules have been omitted since the required
information is not present, or not present in amounts sufficient
to require submission of the schedule, or because the
information required is included in the consolidated financial
statements or notes thereto.

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of



We have audited in accordance with auditing standards generally
accepted in the United States, the consolidated financial
statements of Dobson/ Sygnet Communications Company included in
this Form 10-K and have issued our report thereon dated
March 9, 2001. Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The
schedule listed on page 51, as listed in Item 14(a)2
is the responsibility of the Companys management and is
presented for purposes of complying with the Securities and
Exchange Commissions rules and is not part of the basic
consolidated financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of
the basic consolidated financial statements and, in our opinion,
fairly states in all material respects the financial data
required to be set forth therein in relation to the basic
consolidated statements taken as a whole.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Oklahoma City, Oklahoma



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SCHEDULE II




DOBSON/ SYGNET COMMUNICATION COMPANY

SCHEDULE OF VALUATION ALLOWANCE ACCOUNTS


YEARS ENDED DECEMBER 31, 2000 AND 1999 AND THE PERIOD
FROM INCEPTION


(JULY 23, 1998) THROUGH DECEMBER 31, 1998


|                                            |  |              |         |            |  |            |           |            |  |   |           |  |  |   |         | 
|------------------------------------------- |  | ------------ | ------- | ---------- |  | ---------- | --------- | ---------- |  | - | --------- |  |  | - | ------- | 
|                                            |  | Balance at   |         | Charged to |  |            |           | Balance at
|                                            |  | beginning of |         | costs and  |  |            |           | end of    
|                                            |  | period       |         | expenses   |  | Deductions |           | year      
|                                            |  |              |         |            |  |            |           |           
|Allowance for Doubtful Accounts Receivable: |  |              |         |            |  |            |           |            |  |   |           |  |  |   |         | 
|                                           
|                                           
|                                           
|                                           
|2000                                        |  | $            | 500,063 |            |  | $          | 2,331,765 |            |  | $ | 2,410,788 |  |  | $ | 421,040 | 
|                                           
|                                           
|                                           
|                                           
|1999                                        |  |              |        |            |  | $          | 2,107,913 |            |  | $ | 1,607,850 |  |  | $ | 500,063 | 
|                                           
|                                           
|                                           
|                                           
|1998                                        |  |              |        |            |  |            |          |            |  |   |          |  |  |   |        | 

Allowance for doubtful accounts are deducted from accounts
receivable in the balance sheet.

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(3)  Exhibits

|        |        |             |  |                                                                                                                                                                                                                                                                                                                                                                          |  |  |             | 
|------- | ------ | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  | ----------- | 
|Exhibit |        |             |  | Method of                                                                                                                                                                                                                                                                                                                                                               
|Numbers |        | Description |  | Filing                                                                                                                                                                                                                                                                                                                                                                  
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                                                         
|        | 3.1    |             |  | Registrants Amended Certificate of Incorporation.                                                                                                                                                                                                                                                                                                                       |  |  | (4)[3.1]    | 
|        | 3.2    |             |  | Registrants Amended Bylaws.                                                                                                                                                                                                                                                                                                                                             |  |  | (4)[3.2]    | 
|        | 4.1    |             |  | Indenture dated December 23, 1998 between Registrant, as
        Issuer, and United States Trust Company of New York, as
        Trustee.                                                                                                                                                                                                                                |  |  | (1)[4.1]    | 
|        | 4.2    |             |  | Form of Note under Indenture (contained in Exhibit 4.1
        hereto).                                                                                                                                                                                                                                                                                                  |  |  | (1)[4.1]    | 
|        | 4.3    |             |  | Pledge Agreement dated December 23, 1998 between
        Registrant, as Pledgor, and NationsBanc Montgomery
        Securities LLC, Lehman Brothers, Inc., First Union
        Capital Markets, a division of Wheat First Securities, Inc.
        and TD Securities (USA) Inc., as Initial Purchasers, and
        United States Trust Company of New York, as Trustee. |  |  | (4)[4.3]    | 
|        | 4.4    |             |  | Credit Agreement among the Agents and Lenders named therein and
        Dobson/ Sygnet Operating Company, dated as of December  23,
        1998.                                                                                                                                                                                                                        |  |  | (4)[4.5]    | 
|        | 10.1   |             |  | Master Site License Agreement dated December 23, 1998 by
        and between Sygnet Communications, Inc. and Dobson Tower
        Company.                                                                                                                                                                                                                               |  |  | (4)[10.2]   | 
|        | 10.2.1 |             |  | Cellular One License Agreement effective December 1, 1996,
        between Cellular One Group and Eric Cellular Telephone Company.                                                                                                                                                                                                                                       |  |  | (4)[10.3]   | 
|        | 10.2.2 |             |  | Cellular One License Agreement, effective as of December 
        17, 1996, between Cellular One Group and Sygnet
        Communications, Inc. (PA-1).                                                                                                                                                                                                                   |  |  | (4)[10.3.2] | 
|        | 10.2.3 |             |  | Cellular One License Agreement, effective as of November 7,
        1996, between Cellular One Group and Sygnet
        Communications,  Inc. (PA-6).                                                                                                                                                                                                                    |  |  | (4)[10.3.3] | 
|        | 10.2.4 |             |  | Cellular One License Agreement, effective as of January 30,
        1997, between Cellular One Group and Sygnet
        Communications,  Inc. (PA-7).                                                                                                                                                                                                                    |  |  | (4)[10.3.4] | 
|        | 10.2.5 |             |  | Cellular One License Agreement, effective as of January 1,
        1997, between Cellular One Group and Sygnet
        Communications,  Inc. (NY-3).                                                                                                                                                                                                                     |  |  | (4)[10.3.5] | 
|        | 21     |             |  | Subsidiaries.                                                                                                                                                                                                                                                                                                                                                            |  |  | (4)[21]     | 



---



|    |                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to the Current Report on Form 8-K of
        Dobson Communications Corporation (333-23769) filed on
        January 7, 1999, as the exhibit number indicated in
        brackets and incorporated by reference herein.           
|   
|(2) | Filed as an exhibit to the Quarterly Report of Sygnet
        Wireless, Inc. (333-10161) on Form 10-Q for the
        quarterly period ended June 30, 1998, as the exhibit number
        indicated in brackets and incorporated by reference herein.
|   
|(3) | Filed as an exhibit to the Sygnet Wireless, Inc.
        Registration Statement on Form S-1 (Registration
        No. 333-10161), as the exhibit number indicated in brackets
        and incorporated by reference herein.                          
|   
|(4) | Filed as an exhibit to Dobson/ Sygnet Communications
        Companys Registration Statement on Form S-4
        (Registration No. 333-71051), as the exhibit number
        indicated in brackets and incorporated by reference herein.            
|   
|(5) | Filed as an exhibit to Dobson Communications Corporations
        Annual Report on Form 10-K for the year ended
        December 31, 1998 as the exhibit number indicated in
        brackets and incorporated by reference herein.                 

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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 this 26th day of March, 2001.



| |                                      
| | -------------------------------------
| | DOBSON/ SYGNET COMMUNICATIONS COMPANY



| |    |                      
| | -- | ---------------------
| | By | /s/ EVERETT R. DOBSON

| |                                     
| | ------------------------------------
| | Everett R. Dobson                   
| | Chairman of the Board, President and
| | Chief Executive Officer             

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

|                                               |  |                                                                                                    |  |               
|---------------------------------------------- |  | -------------------------------------------------------------------------------------------------- |  | --------------
|Signatures                                     |  | Title                                                                                              |  | Date          
|                                               |  |                                                                                                    |  |               
|                                              
|/s/ EVERETT R. DOBSONEverett R. Dobson         |  | Chairman of the Board, President and Chief Executive Officer
        (principal executive officer) |  | March 26, 2001
|                                              
|/s/ BRUCE R. KNOOIHUIZENBruce R. Knooihuizen   |  | Vice President and Chief Financial Officer (principal financial
        officer)                   |  | March 26, 2001
|                                              
|/s/ TRENT LEFORCETrent LeForce                 |  | Corporate Controller (principal accounting officer)                                                |  | March 26, 2001
|                                              
|/s/ STEPHEN T. DOBSONStephen T. Dobson         |  | Secretary/ Treasurer, Director                                                                     |  | March 26, 2001
|                                              
|/s/ RUSSELL L. DOBSONRussell L. Dobson         |  | Director                                                                                           |  | March 26, 2001
|                                              
|/s/ FRED J. HALLFred J. Hall                   |  | Director                                                                                           |  | March 26, 2001
|                                              
|/s/ JUSTIN L. JASCHKEJustin L. Jaschke         |  | Director                                                                                           |  | March 26, 2001
|                                              
|/s/ ALBERT H. PHARIS, JR.Albert H. Pharis, Jr. |  | Director                                                                                           |  | March 26, 2001
|                                              
|/s/ DANA L. SCHMALTZDana L. Schmaltz           |  | Director                                                                                           |  | March 26, 2001

Supplemental Information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Act by Registrants Which
Have Not Registered Securities Pursuant to Section 12 of
the Act.

We have not sent, and do not intend to send, an annual report to
security holders covering our last fiscal year, nor have we sent
a proxy statement, form of proxy or other proxy soliciting
material to our security holders with respect to any annual
meeting of security holders.

53