##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Form 10-Q

(Mark One)



|[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2002


Or



|[   ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|----- | ----------------------------------------------------------------------------------------

For the transition period from ________________ to ________________


Commission File Number 000-28160

WESTERN WIRELESS CORPORATION




(Exact name of registrant as specified in its charter)


|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Washington                                                     |  | 91-1638901                       
|                                                               |  |                                  
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification No.)

|                                            |  |           
|------------------------------------------- |  | ----------
|3650 131st Avenue S.E.
Bellevue, Washington |  | 98006     
|                                            |  |           
|(Address of principal executive offices)    |  | (Zip Code)

(425) 586-8700




(Registrants telephone
number, including area code)





(Former name, former address and
former fiscal year, if changed since last report)


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

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date.

|                                   |  |                                         |            | 
|---------------------------------- |  | --------------------------------------- | ---------- | 
|Title                              |  | Shares Outstanding as of August 9, 2002
|                                   |  |                                        
|Class A Common Stock, no par value |  |                                         | 72,229,605 | 
|Class B Common Stock, no par value |  |                                         | 6,774,724  | 





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TABLE OF CONTENTS



|                               |                                                                                               |                                                                        |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Condensed Consolidated Balance Sheets                                 
|                               |                                                                                               | Condensed Consolidated Statements of Operations and Comprehensive Loss
|                               |                                                                                               | Condensed Consolidated Statements of Cash Flows                       
|                               |                                                                                               | Notes to Condensed Consolidated Financial Statements                  
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|PART II  OTHER INFORMATION   
|                               | Item 1. Legal Proceedings                                                                    
|                               | Item 2. Changes in Securities                                                                
|                               | Item 3. Defaults Upon Senior Securities                                                      
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 5. Other Information                                                                    
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    
|EXHIBIT INDEX                 
|EXHIBIT 10.1                  
|EXHIBIT 10.2                  
|EXHIBIT 10.3                  



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##### Table of Contents



Western Wireless Corporation
Form 10-Q
For the Quarter Ended June 30, 2002

Table of Contents

|                               |  |  |  |                              |  |                                                                                       |  |                                                                                                                                            |    |      |   | 
|------------------------------ |  |  |  | ---------------------------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ | -- | ---- | - | 
|                               |  |  |  |                              |  |                                                                                       |  |                                                                                                                                            |    | Page
|                               |  |  |  |                              |  |                                                                                       |  |                                                                                                                                            |    |     
|PART I - FINANCIAL INFORMATION |  |  |  |                             
|                               |  |  |  | Item 1. Financial Statements |  |                                                                                       |  |                                                                                                                                           
|                               |  |  |  |                              |  |                                                                                       |  | Condensed Consolidated Balance Sheets
as of June 30, 2002, and December 31, 2001                                                           |    |      | 3 | 
|                               |  |  |  |                              |  |                                                                                       |  | Condensed Consolidated Statements of Operations and Comprehensive Loss
for the Three and Six Months Ended June 30, 2002, and June 30, 2001 |    |      | 4 | 
|                               |  |  |  |                              |  |                                                                                       |  | Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 2002, and June 30, 2001                                  |    |      | 5 | 
|                               |  |  |  |                              |  |                                                                                       |  | Notes to Condensed Consolidated Financial Statements                                                                                       |    |      | 6 | 
|                               |  |  |  | Item
2.                      |  | Managements Discussion and Analysis
of Financial Condition and Results of Operations |  |                                                                                                                                            | 15 |     
|                               |  |  |  | Item
3.                      |  | Quantitative and Qualitative Disclosures
About Market Risk                            |  |                                                                                                                                            | 22 |     
|PART II - OTHER INFORMATION    |  |  |  |                             
|                               |  |  |  | Item 1.                      |  | Legal Proceedings                                                                     |  |                                                                                                                                            | 23 |     
|                               |  |  |  | Item 2.                      |  | Changes in Securities                                                                 |  |                                                                                                                                            | 23 |     
|                               |  |  |  | Item 3.                      |  | Defaults Upon Senior Securities                                                       |  |                                                                                                                                            | 23 |     
|                               |  |  |  | Item 4.                      |  | Submission of Matters to a Vote of Security Holders                                   |  |                                                                                                                                            | 23 |     
|                               |  |  |  | Item 5.                      |  | Other Information                                                                     |  |                                                                                                                                            | 23 |     
|                               |  |  |  | Item 6.                      |  | Exhibits
and Reports on Form 8-K                                                      |  |                                                                                                                                            | 23 |     

2



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##### Table of Contents









PART I  FINANCIAL
INFORMATION




WESTERN WIRELESS CORPORATION
Condensed Consolidated Balance Sheets(Dollars in thousands)

|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |          |           |  
|----------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------ | --------- | ----------- | --------- | ------------ | --------- | -------- | --------- | -
|                                                                                                                  |                                                                                                  |                                                                                |           | June 30,    |           | December 31,
|                                                                                                                  |                                                                                                  |                                                                                |           | 2002        |           | 2001        
|                                                                                                                  |                                                                                                  |                                                                                |           | (Unaudited) |           |              |           |         
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |             
|ASSETS                                                                                                           
|Current assets:                                                                                                   |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  | Cash and cash equivalents                                                                        |                                                                                | $         | 41,897      |           |              | $         | 45,240   |          
|                                                                                                                  | Accounts receivable, net of allowance for doubtful accounts
of $21,256 and $21,095, respectively |                                                                                |           | 152,903     |           |              |           | 151,787  |          
|                                                                                                                  | Inventory                                                                                        |                                                                                |           | 25,036      |           |              |           | 34,331   |          
|                                                                                                                  | Marketable securities                                                                            |                                                                                |           | 18,263      |           |              |           | 21,016   |          
|                                                                                                                  | Prepaid expenses and other current assets                                                        |                                                                                |           | 34,339      |           |              |           | 49,402   |          
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  |                                                                                                  | Total current assets                                                           |           |             | 272,438   |              |           |          | 301,776   |  
|                                                                                                                 
|Property and equipment, net of accumulated depreciation
of $640,568 and $530,805, respectively                    |                                                                                                  |                                                                                | 861,857   |             |           |              | 838,078   |         
|Licensing costs and other intangible assets, net of accumulated
amortization of $20,515 and $15,170, respectively |                                                                                                  |                                                                                | 1,181,522 |             |           |              | 1,184,516 |         
|Investments in and advances to unconsolidated affiliates                                                          |                                                                                                  |                                                                                | 35,451    |             |           |              | 32,752    |         
|Other assets                                                                                                      |                                                                                                  |                                                                                | 33,240    |             |           |              | 13,298    |         
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  |                                                                                                  | $                                                                              | 2,384,508 |             |           | $            | 2,370,420 |         
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|LIABILITIES AND NET CAPITAL DEFICIENCY                                                                           
|Current liabilities:                                                                                              |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  | Accounts payable                                                                                 |                                                                                | $         | 61,002      |           |              | $         | 83,005   |          
|                                                                                                                  | Accrued liabilities and other                                                                    |                                                                                |           | 193,516     |           |              |           | 175,016  |          
|                                                                                                                  | Construction accounts payable                                                                    |                                                                                |           | 48,140      |           |              |           | 93,764   |          
|                                                                                                                  | Current portion of long-term debt                                                                |                                                                                |           | 94,407      |           |              |           | 55,471   |          
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  |                                                                                                  | Total current liabilities                                                      |           |             | 397,065   |              |           |          | 407,256   |  
|                                                                                                                 
|Long-term debt, net of current portion                                                                            |                                                                                                  |                                                                                | 2,300,196 |             |           |              | 2,237,374 |         
|Deferred income taxes                                                                                             |                                                                                                  |                                                                                | 85,510    |             |           |              |           |         
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  |                                                                                                  | Total liabilities                                                              |           |             | 2,782,771 |              |           |          | 2,644,630 |  
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|Minority interests in consolidated subsidiaries                                                                   |                                                                                                  |                                                                                | 23,641    |             |           |              | 25,089    |         
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|Commitments and contingencies (Note 7)                                                                            |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                 
|Net capital deficiency:                                                                                           |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  | Preferred stock, no par value, 50,000,000 shares authorized;
no shares issued and outstanding    |                                                                                |           |             |           |              |           |          |          
|                                                                                                                  | Common stock, no par value, 300,000,000 shares authorized;                                       |                                                                                |           |             |           |              |           |          |          
|                                                                                                                  |                                                                                                  | Class A, 72,229,605 and 71,881,603 shares issued
and outstanding, respectively |           |             |           |              |           |          |           |  
|                                                                                                                  |                                                                                                  | Class B, 6,774,724 and 6,981,072 shares issued
and outstanding, respectively   |           |             | 669,067   |              |           |          | 668,158   |  
|                                                                                                                  | Deferred compensation                                                                            |                                                                                |           | (98         | )         |              |           |          |          
|                                                                                                                  | Accumulated other comprehensive loss                                                             |                                                                                |           | (21,840     | )         |              |           | (24,181  | )        
|                                                                                                                  | Deficit                                                                                          |                                                                                |           | (1,069,033  | )         |              |           | (943,276 | )        
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  |                                                                                                  | Total net capital deficiency                                                   |           |             | (421,904  | )            |           |          | (299,299  | )
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         
|                                                                                                                  |                                                                                                  | $                                                                              | 2,384,508 |             |           | $            | 2,370,420 |         
|                                                                                                                  |                                                                                                  |                                                                                |           |             |           |              |           |         

See accompanying notes to condensed consolidated financial statements.

3



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##### Table of Contents






WESTERN WIRELESS CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Loss(Dollars in thousands, except per share data)
(Unaudited)

|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |            |         |        |  
|----------------------------------------------------- | -------------------------------------------------------- | ------------------------------ | -------------------------- | ---------- | --------------------------- | ------ | ------------------------- | ---------- | ------- | ----- | -------- | ---------- | -------- | ------ | ------- | ---------- | ------- | ------ | -
|                                                      |                                                          |                                |                            |            | Three months ended June 30, |        | Six months ended June 30,
|                                                      |                                                          |                                |                            |            |                             |        |                          
|                                                      |                                                          |                                |                            |            | 2002                        |        | 2001                      |            | 2002    |       | 2001    
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |         
|Revenues:                                             |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      | Subscriber revenues                                      |                                | $                          | 204,826    |                             |        | $                         | 170,530    |         |       | $        | 403,397    |          |        | $       | 331,640    |        
|                                                      | Roamer revenues                                          |                                |                            | 64,394     |                             |        |                           | 68,839     |         |       |          | 125,375    |          |        |         | 131,036    |        
|                                                      | Fixed line revenues                                      |                                |                            | 13,383     |                             |        |                           | 302        |         |       |          | 26,999     |          |        |         | 381        |        
|                                                      | Equipment sales and other revenues                       |                                |                            | 16,184     |                             |        |                           | 12,891     |         |       |          | 33,680     |          |        |         | 25,979     |        
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      |                                                          | Total revenues                 |                            |            | 298,787                     |        |                           |            | 252,562 |       |          |            | 589,451  |        |         |            | 489,036 |       
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Operating expenses:                                   |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      | Cost of service                                          |                                |                            | 93,107     |                             |        |                           | 59,562     |         |       |          | 182,972    |          |        |         | 114,529    |        
|                                                      | Cost of equipment sales                                  |                                |                            | 28,549     |                             |        |                           | 20,718     |         |       |          | 55,317     |          |        |         | 37,131     |        
|                                                      | General and administrative                               |                                |                            | 50,293     |                             |        |                           | 52,320     |         |       |          | 110,532    |          |        |         | 103,513    |        
|                                                      | Sales and marketing                                      |                                |                            | 46,422     |                             |        |                           | 39,229     |         |       |          | 86,134     |          |        |         | 81,571     |        
|                                                      | Depreciation and amortization                            |                                |                            | 58,588     |                             |        |                           | 52,685     |         |       |          | 120,103    |          |        |         | 95,304     |        
|                                                      | Asset disposition                                        |                                |                            | 7,556      |                             |        |                           |            |         |       |          | 7,556      |          |        |         |            |        
|                                                      | Stock based compensation, net                            |                                |                            |            |                             |        |                           | 6,251      |         |       |          |            |          |        |         | 12,247     |        
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      |                                                          | Total operating expenses       |                            |            | 284,515                     |        |                           |            | 230,765 |       |          |            | 562,614  |        |         |            | 444,295 |       
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Other income (expense):                               |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      | Interest and financing expense, net                      |                                |                            | (39,311    | )                           |        |                           | (40,806    | )       |       |          | (78,670    | )        |        |         | (82,918    | )      
|                                                      | Equity in net income (loss) of
unconsolidated affiliates |                                |                            | 841        |                             |        |                           | 543        |         |       |          | 2,488      |          |        |         | (2,412     | )      
|                                                      | Other, net                                               |                                |                            | (714       | )                           |        |                           | (619       | )       |       |          | 4,483      |          |        |         | (290       | )      
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      |                                                          | Total other expense            |                            |            | (39,184                     | )      |                           |            | (40,882 | )     |          |            | (71,699  | )      |         |            | (85,620 | )     
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Minority interests in consolidated
subsidiaries       |                                                          |                                | 2,590                      |            |                             |        | 5,058                     |            |         |       | 5,825    |            |          |        | 9,548   |           
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Loss before provision for income
taxes                |                                                          |                                | (22,322                    | )          |                             |        | (14,027                   | )          |         |       | (39,037  | )          |          |        | (31,331 | )         
|                                                     
|Provision for income taxes                            |                                                          |                                | (7,433                     | )          |                             |        |                           |            |         |       | (86,720  | )          |          |        |         |           
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Loss before cumulative change in
accounting principle |                                                          |                                | (29,755                    | )          |                             |        | (14,027                   | )          |         |       | (125,757 | )          |          |        | (31,331 | )         
|                                                     
|Cumulative change in accounting
principle             |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        | (5,580  | )         
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      |                                                          | Net loss                       |                            | $          | (29,755                     | )      |                           | $          | (14,027 | )     |          | $          | (125,757 | )      |         | $          | (36,911 | )     
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Basic and diluted loss per share:                     |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      | Before cumulative change in
accounting principle         |                                | $                          | (0.38      | )                           |        | $                         | (0.18      | )       |       | $        | (1.59      | )        |        | $       | (0.40      | )      
|                                                      | Cumulative change in accounting
principle                |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         | (0.07      | )      
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Basic and diluted loss per share                      |                                                          | $                              | (0.38                      | )          |                             | $      | (0.18                     | )          |         | $     | (1.59    | )          |          | $      | (0.47   | )         
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Weighted average shares outstanding:                  |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      | Basic and diluted                                        |                                |                            | 78,969,000 |                             |        |                           | 78,635,000 |         |       |          | 78,940,000 |          |        |         | 78,487,000 |        
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Comprehensive loss:                                   |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      | Net loss                                                 |                                | $                          | (29,755    | )                           |        | $                         | (14,027    | )       |       | $        | (125,757   | )        |        | $       | (36,911    | )      
|                                                      | Unrealized gain (loss) on
marketable securities:         |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |            |        
|                                                      |                                                          | Reclassification adjustment    |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |            | (1,984  | )     
|                                                      |                                                          | Unrealized holding gain (loss) |                            |            | (1,657                      | )      |                           |            | 1,667   |       |          |            | (2,753   | )      |         |            | (3,795  | )     
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      |                                                          |                                | Net unrealized gain (loss) |            |                             | (1,657 | )                         |            |         | 1,667 |          |            |          | (2,753 | )       |            |         | (5,779 | )
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|                                                      | Foreign currency translation                             |                                |                            | 11,275     |                             |        |                           | (4,811     | )       |       |          | 6,766      |          |        |         | (5,185     | )      
|                                                      | Unrealized gain (loss) on hedges                         |                                |                            | (3,765     | )                           |        |                           | 80         |         |       |          | (1,672     | )        |        |         | (1,092     | )      
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           
|Total comprehensive loss                              |                                                          | $                              | (23,902                    | )          |                             | $      | (17,091                   | )          |         | $     | (123,416 | )          |          | $      | (48,967 | )         
|                                                      |                                                          |                                |                            |            |                             |        |                           |            |         |       |          |            |          |        |         |           

See accompanying notes to condensed consolidated financial statements.

4



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##### Table of Contents






WESTERN WIRELESS CORPORATION
Condensed Consolidated Statements of Cash Flows(Dollars in thousands)
(Unaudited)

|                                               |                                                                                 |                                                          |        |                           |          |      |        |          |          |  
|---------------------------------------------- | ------------------------------------------------------------------------------- | -------------------------------------------------------- | ------ | ------------------------- | -------- | ---- | ------ | -------- | -------- | -
|                                               |                                                                                 |                                                          |        | Six months ended June 30,
|                                               |                                                                                 |                                                          |        |                          
|                                               |                                                                                 |                                                          |        | 2002                      |          | 2001
|                                               |                                                                                 |                                                          |        |                           |          |     
|Operating activities:                          |                                                                                 |                                                          |        |                           |          |      |        |         
|                                               | Net loss                                                                        |                                                          | $      | (125,757                  | )        |      | $      | (36,911  | )       
|                                               | Adjustments to reconcile net loss to net cash provided by operating activities: |                                                          |        |                           |          |      |        |          |         
|                                               |                                                                                 | Cumulative change in accounting principle                |        |                           |          |      |        |          | 5,580    |  
|                                               |                                                                                 | Gain on sale of marketable securities                    |        |                           |          |      |        |          | (8,006   | )
|                                               |                                                                                 | Depreciation and amortization                            |        |                           | 122,129  |      |        |          | 96,696   |  
|                                               |                                                                                 | Deferred income taxes                                    |        |                           | 85,510   |      |        |          |          |  
|                                               |                                                                                 | Asset disposition                                        |        |                           | 7,556    |      |        |          |          |  
|                                               |                                                                                 | Stock based compensation                                 |        |                           |          |      |        |          | 12,247   |  
|                                               |                                                                                 | Equity in net (income) loss of unconsolidated affiliates |        |                           | (2,488   | )    |        |          | 2,412    |  
|                                               |                                                                                 | Minority interests in consolidated subsidiaries          |        |                           | (5,825   | )    |        |          | (9,548   | )
|                                               |                                                                                 | Adjustment of interest rate hedges to fair market value  |        |                           | (811     | )    |        |          | 7,380    |  
|                                               |                                                                                 | Other, net                                               |        |                           | 2,025    |      |        |          | 2,478    |  
|                                               |                                                                                 | Changes in operating assets and liabilities              |        |                           | 13,280   |      |        |          | (21,227  | )
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         
|                                               |                                                                                 | Net cash provided by operating activities                |        |                           | 95,619   |      |        |          | 51,101   |  
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         
|Investing activities:                          |                                                                                 |                                                          |        |                           |          |      |        |         
|                                               | Purchase of property and equipment                                              |                                                          |        | (160,460                  | )        |      |        | (155,284 | )       
|                                               | Additions to licensing costs and other intangible assets                        |                                                          |        | (5,602                    | )        |      |        | (25,138  | )       
|                                               | Proceeds from sale of marketable securities                                     |                                                          |        |                           |          |      |        | 26,636   |         
|                                               | Purchase of marketable securities                                               |                                                          |        |                           |          |      |        | (3,896   | )       
|                                               | Receipts from and (investments in) unconsolidated subsidiaries                  |                                                          |        | (722                      | )        |      |        | 2,962    |         
|                                               | Long-term deposits                                                              |                                                          |        | (18,655                   | )        |      |        |          |         
|                                               | Payments to VoiceStream Wireless                                                |                                                          |        |                           |          |      |        | (24,500  | )       
|                                               | Purchase of minority interests in Western Wireless International                |                                                          |        |                           |          |      |        | (14,140  | )       
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         
|                                               |                                                                                 | Net cash used in investing activities                    |        |                           | (185,439 | )    |        |          | (193,360 | )
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         
|Financing activities:                          |                                                                                 |                                                          |        |                           |          |      |        |         
|                                               | Additions to long-term debt                                                     |                                                          |        | 141,841                   |          |      |        | 608,461  |         
|                                               | Repayment of long-term debt                                                     |                                                          |        | (58,503                   | )        |      |        | (440,000 | )       
|                                               | Minority interest contributions                                                 |                                                          |        | 520                       |          |      |        | 19,978   |         
|                                               | Other                                                                           |                                                          |        | 565                       |          |      |        | 1,500    |         
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         
|                                               |                                                                                 | Net cash provided by financing activities                |        |                           | 84,423   |      |        |          | 189,939  |  
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         
|Effect of exchange rate changes                |                                                                                 |                                                          | 2,054  |                           |          |      |        |         
|                                              
|Change in cash and cash equivalents            |                                                                                 |                                                          | (3,343 | )                         |          |      | 47,680 |         
|                                              
|Cash and cash equivalents, beginning of period |                                                                                 |                                                          | 45,240 |                           |          |      | 23,278 |         
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         
|Cash and cash equivalents, end of period       |                                                                                 | $                                                        | 41,897 |                           |          | $    | 70,958 |         
|                                               |                                                                                 |                                                          |        |                           |          |      |        |         

See accompanying notes to condensed consolidated financial statements.

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

1. Organization:

Western Wireless Corporation provides wireless communications services in
the United States principally through the ownership and operation of cellular
systems. The Company provides cellular operations primarily in rural areas in
19 western states under the CELLULARONE® brand name. In April 2002, the
Company launched service in Amarillo, Texas under the Western Wireless brand
name.

The Company owns approximately 98% of Western Wireless International
Holding Corporation (WWI) which, through consolidated subsidiaries and equity
investments, is a provider of wireless and other communications services
worldwide.

Throughout this document, Western Wireless Corporation and its
subsidiaries are referred to as the Company, we, our or us. The
condensed consolidated financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (SEC) that
permit reduced disclosures for interim periods. The condensed consolidated
balance sheet as of December 31, 2001, has been derived from audited financial
statements. The unaudited interim condensed consolidated financial statements
dated June 30, 2002 and 2001, are presented herein, and reflect all
adjustments, which are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash flows
for the periods presented. Results of operations for interim periods presented
herein are not necessarily indicative of results of operations for the entire
year. For further information, refer to our annual audited financial
statements and footnotes thereto for the year ended December 31, 2001,
contained in our Form 10-K dated March 29, 2002.

2. Summary of Significant Accounting Policies:

Supplemental cash flow disclosure:

Cash paid for interest was $78.4 million and $75.4 million for the six
months ended June 30, 2002 and 2001, respectively.

Reclassifications:

Certain amounts in prior years financial statements have been
reclassified to conform to the 2002 presentation.

Principles of Consolidation:

U.S. headquarter functions and majority owned European, South American and
Caribbean consolidated subsidiaries are recorded as of the date of the
financial statements. During the first quarter of 2002, we brought the results
of Bolivia and Haiti current with the date of the financial statements.
Entities accounted for using the equity method and our consolidated
Ghanaian subsidiary are presented on a one quarter lag. For the six months ended June
30, 2001, consolidated subsidiaries in Iceland, Ghana, Bolivia and Haiti, along
with entities accounted for using the equity method, were recorded on a one
quarter lag. The inclusion of an additional quarter of operations for Bolivia and Haiti in
the first quarter for 2002 had an insignificant impact on our consolidated
operating results.

Recently issued accounting standards:

In July 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 146, Accounting for
Costs Associated with Exit or Disposal Activities (SFAS No. 146). SFAS No.
146 requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan. SFAS No. 146 supersedes Emergency Issues Task Force
Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). SFAS No. 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS No. 145). SFAS No. 145 requires that gains and losses
from the extinguishments of debt be classified as extraordinary items only if
they meet the criteria in Accounting Principles Board Opinion No. 30 (Opinion
No. 30). Applying the provisions of Opinion No. 30 will distinguish
transactions that are part of an entitys recurring operations from those that
are unusual and infrequent that meet criteria for classification as an
extraordinary item. We have adopted the provisions of SFAS No. 145 during the
second quarter of 2002 and have recognized a gain of $1.3 million in other
income on the repurchase of approximately $17 million of our
101⁄2% Senior
Subordinated Notes due 2006 and 2007.

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations (SFAS No. 143). This statement deals with the costs
of closing facilities and removing assets. SFAS No. 143 requires entities to
record the fair value of a legal liability for an asset retirement obligation
in the period it is incurred if a reasonable estimate of fair value can be
made. This cost is initially capitalized and amortized over the remaining life
of the underlying asset. Once the obligation is ultimately settled, any
difference between the final cost and the recorded liability is recognized as a
gain or loss on disposition. SFAS No. 143 is effective for us beginning
January 1, 2003. We are currently evaluating the impact this statement will
have on our future consolidated financial results.

On January 1, 2002, we adopted SFAS No. 142 Goodwill and Other Intangible
Assets (SFAS No. 142). SFAS No. 142 addresses how acquired goodwill and
other intangible assets are recorded upon their acquisition as well as how they
are to be accounted for after they have been initially recognized in the
financial statements. Under this statement, goodwill, including excess net
book value associated with equity method investments, and other intangible
assets with indefinite useful lives, on a prospective basis, will no longer be
amortized. Upon adoption of SFAS 142, we ceased amortization of our domestic
licenses as we determined that these assets meet the definition of indefinite
life intangible assets. The fair value of our domestic licenses was estimated
using the discounted present value of expected future cash flows. The
determination of fair value is a complex consideration that involves
significant assumptions and estimates. Assumptions and estimates made by us
were based on our best judgments and included among other things: (i) an
assessment of market and economic conditions including discount rates; (ii)
future operating performance; (iii) competition and market share; and (iv) the
nature and cost of technology utilized. We completed the assessment for
impairment of our indefinite life intangible assets required upon the
implementation of SFAS No. 142 and determined that in the aggregate they were
not impaired. In the future, impairment must be assessed at least annually for
these assets, or when indications of impairment exist. It is possible that
future assessments could cause us to conclude that impairment indications
exist. Accordingly, there are no assurances that future valuations will result
in the conclusion that our domestic licenses are not impaired.

In connection with
the adoption of SFAS No. 142, we have incurred a non-cash
charge of approximately $85.5 million for the six months ended June 30,
2002 as a provision for income taxes mainly to increase the valuation allowance
related to our net operating loss carryforwards. This non-cash charge includes
$71.4 million in one-time charges required because we have significant deferred
tax liabilities related to our domestic licenses. Historically, we did not
need a valuation allowance for the portion of our net operating loss
carryforward equal to the amount of license amortization expected to occur
during the net operating loss carryforward period. Since we ceased amortizing
domestic licenses on January 1, 2002 for book purposes and we can no longer
estimate the amount, if any, of deferred tax liabilities related to our
domestic licenses which will reverse during the net operating loss carryforward
period, we have increased the valuation allowance accordingly. Further, since
January 1, 2002, we continue to amortize our licenses for federal income tax
purposes. As previously discussed, license costs are no longer amortized for
book purposes. The ongoing difference between book and tax amortization
resulted in an additional non-cash charge as a provision for income taxes of
approximately $14.1 million for the six months ended June 30, 2002. The
additional non-cash charge to the income tax provision results from growth in
our deferred tax liability that cannot be estimated to reverse during our net
operating loss carryforward period.

On January 1, 2002, we adopted SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144
supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of (SFAS No. 121). SFAS No. 144
primarily addresses significant issues relating to the implementation of SFAS
No. 121 and develops a single accounting model for long-lived assets to be
disposed of, whether previously held and used or newly acquired. We
periodically evaluate whether there has been any indication of impairment of
our long-lived assets.

3. Marketable Securities:

Marketable securities are classified as available-for-sale and are stated
at fair market value. Information regarding our marketable securities is
summarized as follows:

(Dollars in thousands)

|                                      |                      |   |               |        |                   |   |       |        | 
|------------------------------------- | -------------------- | - | ------------- | ------ | ----------------- | - | ----- | ------ | 
|                                      |                      |   | June 30, 2002 |        | December 31, 2001
|                                      |                      |   |               |        |                  
|Available-for-sale equity securities: |                      |   |               |        |                   |   |       |       
|                                      | Aggregate fair value |   | $             | 18,263 |                   |   | $     | 21,016 | 
|                                      | Historical cost      |   |               | 18,959 |                   |   |       | 18,959 | 
|                                      |                      |   |               |        |                   |   |       |       
|Unrealized holding gain (loss)        |                      | $ | (696          | )      |                   | $ | 2,057 |       
|                                      |                      |   |               |        |                   |   |       |       

Our net unrealized holding gains and losses are included as an increase to
accumulated other comprehensive loss. Realized gains and losses are determined
on the basis of specific identification.

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

4. Prepaid Expenses and Other Current Assets:

|                                    |  |               |        |                   |  |   |        | 
|----------------------------------- |  | ------------- | ------ | ----------------- |  | - | ------ | 
|(Dollars in thousands)              |  |               |        |                   |  |   |        | 
|                                    |  | June 30, 2002 |        | December 31, 2001
|                                    |  |               |        |                  
|Rent                                |  | $             | 10,681 |                   |  | $ | 5,786  | 
|Cellular One Group promotional fund |  |               | 7,273  |                   |  |   | 5,522  | 
|VAT receivable                      |  |               | 3,706  |                   |  |   | 17,725 | 
|Insurance                           |  |               | 2,976  |                   |  |   | 884    | 
|Taxes and fees                      |  |               | 990    |                   |  |   | 2,487  | 
|Acquisition related receivable      |  |               |        |                   |  |   | 2,401  | 
|Deposits                            |  |               | 2,278  |                   |  |   | 6,423  | 
|Other                               |  |               | 6,435  |                   |  |   | 8,174  | 
|                                    |  |               |        |                   |  |   |        | 
|                                    |  | $             | 34,339 |                   |  | $ | 49,402 | 
|                                    |  |               |        |                   |  |   |        | 

5. Licensing Costs and Other Intangible Assets:

Upon adoption of SFAS No. 142, as described in Note 2, we ceased
amortization related to domestic licensing costs beginning on January 1, 2002.

|                                               |                               |               |           |                   |  |   |           |           | 
|---------------------------------------------- | ----------------------------- | ------------- | --------- | ----------------- |  | - | --------- | --------- | 
|(Dollars in thousands)                         |                               |               |           |                  
|                                               |                               | June 30, 2002 |           | December 31, 2001
|                                               |                               |               |           |                   | 
|Intangible assets subject to amortization:     |                               |               |           |                   |  |   |           |          
|                                               | International licensing costs |               | $         | 99,549            |  |   | $         | 95,278    | 
|                                               | Deferred financing costs      |               |           | 31,991            |  |   |           | 27,155    | 
|                                               | Trademark and other           |               |           | 16,956            |  |   |           | 16,543    | 
|                                               |                               |               |           |                   |  |   |           |          
|                                               |                               |               | 148,496   |                   |  |   | 138,976   |          
|                                              
|Accumulated amortization                       |                               |               | (20,515   | )                 |  |   | (15,170   | )        
|                                               |                               |               |           |                   |  |   |           |          
|                                               |                               |               | 127,981   |                   |  |   | 123,806   |          
|Intangible assets not subject to amortization: |                               |               |           |                   |  |   |           |          
|                                               | Domestic licensing costs      |               |           | 1,053,541         |  |   |           | 1,060,710 | 
|                                               |                               |               |           |                   |  |   |           |          
|                                               |                               | $             | 1,181,522 |                   |  | $ | 1,184,516 |          
|                                               |                               |               |           |                   |  |   |           |          

We include the amortization of deferred financing costs in interest and
financing expense. The following table represents current and expected
amortization expense, net of deferred financing costs, for each of the
following periods:

|                                |                                             |  |   |       | 
|------------------------------- | ------------------------------------------- |  | - | ----- | 
|(Dollars in thousands)          |                                             |  |   |      
|                               
|Aggregate amortization expense: |                                             |  |   |      
|                                | For the six months ended June 30, 2002      |  | $ | 4,022 | 
|                               
|Expected amortization expense:  |                                             |  |   |      
|                                | For the six months ending December 31, 2002 |  |   | 3,683 | 
|                                | For the year ending December 31, 2003       |  |   | 7,366 | 
|                                | For the year ending December 31, 2004       |  |   | 7,366 | 
|                                | For the year ending December 31, 2005       |  |   | 7,366 | 
|                                | For the year ending December 31, 2006       |  |   | 7,366 | 

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

The following table reconciles our net loss adjusted to exclude
amortization expense related to intangible assets, assuming the adoption of
SFAS No, 142 had occurred on January 1, 2001:

|                                                 |                      |   |                           |       |      |   |         |       |  
|------------------------------------------------ | -------------------- | - | ------------------------- | ----- | ---- | - | ------- | ----- | -
|(Dollars in
thousands, except per share amounts) |                      |   |                           |       |      |   |         |      
|                                                 |                      |   | Six months ended June 30,
|                                                 |                      |   |                          
|                                                 |                      |   | 2002                      |       | 2001
|                                                 |                      |   |                           |       |     
|Net loss                                         |                      | $ | (125,757                  | )     |      | $ | (36,911 | )    
|Add back: License amortization                   |                      |   |                           |       |      |   | 14,588  |      
|                                                 |                      |   |                           |       |      |   |         |      
|Adjusted net loss                                |                      | $ | (125,757                  | )     |      | $ | (22,323 | )    
|                                                 |                      |   |                           |       |      |   |         |      
|Basic and diluted loss per share:                |                      |   |                           |       |      |   |         |      
|                                                 | Net loss             |   | $                         | (1.59 | )    |   | $       | (0.47 | )
|                                                 | License amortization |   |                           |       |      |   |         | 0.19  |  
|                                                 |                      |   |                           |       |      |   |         |      
|                                                 | Adjusted net loss    |   | $                         | (1.59 | )    |   | $       | (0.28 | )
|                                                 |                      |   |                           |       |      |   |         |      

6. Debt:

Long-Term Debt:

|                                        |            |   |               |           |                   |   |           |           | 
|--------------------------------------- | ---------- | - | ------------- | --------- | ----------------- | - | --------- | --------- | 
|(Dollars in thousands)                  |            |   |               |          
|                                        |            |   | June 30, 2002 |           | December 31, 2001
|                                        |            |   |               |           |                  
|Credit Facility:                        |            |   |               |           |                   |   |           |          
|                                        | Revolvers  |   | $             | 700,000   |                   |   | $         | 640,000   | 
|                                        | Term Loans |   |               | 1,100,000 |                   |   |           | 1,100,000 | 
|101⁄2% Senior Subordinated Notes Due 2006 |            |   | 187,050       |           |                   |   | 200,000   |          
|101⁄2% Senior Subordinated Notes Due 2007 |            |   | 196,000       |           |                   |   | 200,000   |          
|tele.ring Revolver                      |            |   | 93,622        |           |                   |   | 63,374    |          
|Slovenian Credit Facility               |            |   | 41,470        |           |                   |   |           |          
|Icelandic Credit Facility               |            |   | 23,273        |           |                   |   | 22,687    |          
|Bolivian Bridge Loan                    |            |   | 34,700        |           |                   |   | 21,145    |          
|Irish Bridge Loan                       |            |   |               |           |                   |   | 17,716    |          
|Other                                   |            |   | 18,488        |           |                   |   | 27,923    |          
|                                        |            |   |               |           |                   |   |           |          
|                                        |            |   | 2,394,603     |           |                   |   | 2,292,845 |          
|Less current portion                    |            |   | (94,407       | )         |                   |   | (55,471   | )        
|                                        |            |   |               |           |                   |   |           |          
|                                        |            | $ | 2,300,196     |           |                   | $ | 2,237,374 |          
|                                        |            |   |               |           |                   |   |           |          

The aggregate amounts of principal maturities as of June 30, 2002, are as
follows:

|                                    |  |            |           |  |         | 
|----------------------------------- |  | ---------- | --------- |  | ------- | 
|(Dollars in thousands)              |  |            |           | 
|                                   
|Six months ending December 31, 2002 |  | $          | 39,019    | 
|Year ending December 31,            |  |            |           | 
|                                    |  | 2003       |           |  | 112,877 | 
|                                    |  | 2004       |           |  | 196,841 | 
|                                    |  | 2005       |           |  | 301,829 | 
|                                    |  | 2006       |           |  | 559,067 | 
|                                    |  | 2007       |           |  | 514,039 | 
|                                    |  | Thereafter |           |  | 670,931 | 
|                                    |  |            |           | 
|                                    |  | $          | 2,394,603 | 
|                                    |  |            |           | 

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

Irish Bridge Loan:

In April 2001, Meteor Mobile Communications Limited (MMC), a subsidiary
of WWI, entered into a bridge loan facility agreement (the Irish Bridge Loan)
with two banks to provide funding for the development and operation of MMCs
network in Ireland. In April 2002, a subsidiary of WWI repaid the remainder of the outstanding
principal plus interest.

Slovenian Credit Facility:

In April 2002, Western Wireless International d.o.o. (Vega), a
subsidiary of WWI, entered into a credit facility agreement (the Slovenian
Credit Facility) with a consortium of banks to provide funding for the
implementation and expansion of Vegas network in Slovenia. The total amount
of the Slovenian Credit Facility is 116 million euro. Under the terms of the
Slovenian Credit Facility, all outstanding principal is required to be repaid
in predetermined semi-annual installments beginning on May 30, 2004 and ending
on November 30, 2009. Interest is accrued mainly at EURIBOR plus an applicable
margin, initially ranging from 1.25% to 3.25% based on Vegas financial and
technical performance. Further, the Slovenian Credit Facility requires Vega to
enter into interest rate hedge agreements on a minimum of 50% of the
outstanding balance under the Slovenian Credit Facility to manage the interest
rate exposure pertaining to borrowings under the Slovenian Credit Facility.

The Slovenian Credit Facility contains certain borrowing conditions and
restrictive covenants, including: minimum subscribers; population coverage;
certain cash flow requirements; minimum contributed capital and debt service
coverage. Western Wireless International Corporation (WWIC), a subsidiary of
WWI, has guaranteed the Slovenian Credit Facility under the
following circumstances: failure to meet specified network construction
milestones, the subsidiarys insolvency, or abandonment of the project.
Further, WWIC has made a commitment that is collateralized by cash to
contribute up to a maximum of 16 million euro in additional capital to provide
for cumulative operating cash flow shortfalls and cash balance deficiencies, if
any. In the second quarter of 2002, Vegas revenues were 1.3 million euro below
the minimum revenues required under the covenants contained in the Slovenian
Credit Facility. In August 2002, pursuant to the Slovenian Credit Facility,
WWIC exercised the right to contribute an additional 1.3 million euro to Vega
as a result of the revenue shortfall. As of June 30, 2002, Vega had
approximately $54 million available to borrow under the Slovenian Credit
Facility, $27 million of which is restricted for payment on future purchases by
Vega from its equipment supplier. We expect that there will be additional revenue or other financial covenant shortfalls in the future
which may limit the availability of borrowings under the Slovenian Credit
Facility, subject to WWICs right to contribute additional
amounts in order to cure such shortfalls.

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

7. Commitments and contingencies:

Purchase Commitments:

In order to ensure adequate supply and availability of certain wireless
system equipment requirements and service needs, we have committed to purchase
from various suppliers, wireless communications equipment and services.
Information regarding these commitments as of June 30, 2002, is as follows:

|                       |  |                |         | 
|---------------------- |  | -------------- | ------- | 
|(Dollars in thousands) |  |                |         | 
|                      
|Aggregate commitments  |  | $              | 187,000 | 
|Ordered and received   |  | $              | 149,000 | 
|Awaiting delivery      |  | $              | 9,000   | 
|Expiration dates       |  | September 2002 |        
|                       |  | to March 2004  |        

International Contingencies:

Ivory Coast:

WWI owns a 40%
interest in Cora de Comstar (Cora), which has operated
under a provisional operating license since the company was formed in
1995. This interest is accounted for by WWI on the equity method. When the provisional license was issued to Cora, the government
established certain conditions by which the provisional license would become a
long-term license. On July 6, 2001, the government announced its intention to
require Cora and the two other wireless operators in Côte dIvoire to each pay
a license fee of 40 billion CFA francs, or approximately $53 million, in order
to obtain their long-term licenses. WWI believes that this requirement
violates the terms of the provisional license and is a breach of Coras
contract with the government. However, in February 2002, Cora agreed to an
interim payment plan of approximately $0.1 million per month, funded by Coras
operating cash flows, until Cora is able to obtain additional funding or
renegotiates the license fee and terms. Despite the ongoing negotiations, the
government issued Cora the long-term license in the second quarter of 2002.
WWIs net investment in Cora at June 30, 2002 is $5 million.

Ghana:

Under the terms of the Ghana license, a subsidiary of WWI, Western
Telesystems Ghana Limited (Westel) was required to meet certain customer
levels and build-out requirements by February 2002. Due to the inability of
the regulator to provide spectrum and enforce interconnection with the
incumbent telephone company, all development has been stifled. Westel was
unable to meet the required customer levels. The National Communication
Authority of Ghana (NCA) has assessed a penalty claim of $71 million for not
meeting these build-out requirements. Westel is currently in discussions with
the NCA and other government officials to settle these matters and does not
believe the enforcement of these penalties is probable. WWIs net investment
in Westel at June 30, 2002 is approximately $5 million.

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

8. Income (Loss) per Common Share:

Statement of Financial Accounting Standards No. 128, Earnings Per Share,
requires two presentations of income per share  basic and diluted. Basic
income per share is calculated using the weighted average number of shares
outstanding during the period. Diluted income per share is computed on the
basis of the weighted average number of common shares outstanding plus the
dilutive effect of outstanding stock options using the treasury stock method.

Income (loss) per share is calculated using the weighted average number of
shares of outstanding stock during the period. For those periods presented
with net losses, any stock options outstanding are antidilutive, thus basic
and diluted loss per share are equal. Weighted average shares issuable upon
the exercise of stock options, which were not included in the calculation were
2,264,300 and 2,043,400 for the six months ended June 30, 2002 and 2001,
respectively, because they were antidilutive.

The components of basic and diluted loss per share are as follows:

|                                              |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |         |            |  
|--------------------------------------------- | ----------------------------------------------------- | ---------------- | ----- | --------------------------- | ---------- | ------------------------- | ----- | ------- | ---------- | ---- | ----- | -------- | ---------- | - | ----- | ------- | ---------- | -
|(Dollars in thousands, except per share data)
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       |                  |       | Three months ended June 30, |            | Six months ended June 30,
|                                              |                                                       |                  |       |                             |            |                          
|                                              |                                                       |                  |       | 2002                        |            | 2001                      |       | 2002    |            | 2001
|                                              |                                                       |                  |       |                             |            |                           |       |         |            |     
|Numerator:                                    |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|                                              | Loss before
cumulative change
in accounting
principle |                  | $     | (29,755                     | )          |                           | $     | (14,027 | )          |      | $     | (125,757 | )          |   | $     | (31,331 | )         
|                                              | Cumulative change
in accounting
principle             |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       | (5,580  | )         
|                                              |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|                                              |                                                       | Net loss         |       | $                           | (29,755    | )                         |       | $       | (14,027    | )    |       | $        | (125,757   | ) |       | $       | (36,911    | )
|                                              |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|Denominator:                                  |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|                                              | Weighted-average
shares:                              |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |         |           
|                                              |                                                       | Basic            |       |                             | 78,969,000 |                           |       |         | 78,635,000 |      |       |          | 78,940,000 |   |       |         | 78,487,000 |  
|                                              | Effect of dilutive
securities:                        |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |         |           
|                                              |                                                       | Dilutive options |       |                             |            |                           |       |         |            |      |       |          |            |   |       |         |            |  
|                                              |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|                                              | Weighted-average
shares:                              |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |         |           
|                                              |                                                       | Diluted          |       |                             | 78,969,000 |                           |       |         | 78,635,000 |      |       |          | 78,940,000 |   |       |         | 78,487,000 |  
|                                              |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|Basic and diluted
loss per share:             |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|                                              | Before cumulative
change in
accounting
principle      |                  | $     | (0.38                       | )          |                           | $     | (0.18   | )          |      | $     | (1.59    | )          |   | $     | (0.40   | )         
|                                              | Cumulative change
in accounting
principle             |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       | (0.07   | )         
|                                              |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        
|Basic and diluted
loss per share              |                                                       | $                | (0.38 | )                           |            | $                         | (0.18 | )       |            | $    | (1.59 | )        |            | $ | (0.47 | )      
|                                              |                                                       |                  |       |                             |            |                           |       |         |            |      |       |          |            |   |       |        

9. Acquisitions and Dispositions:

Asset Dispositions:

We have implemented
our strategy to dispose of certain minor domestic
non-core assets. In conjunction with these efforts, we have recognized a
charge in the second quarter of 2002 of approximately $7.6 million related to
the disposition of certain of our paging assets. We also have certain
Specialized Mobile Radio (SMR) and Competitive Local Exchange Carrier
(CLEC) assets that we have sold. The results of the dispositions of the SMR
and CLEC assets will be reflected in the third quarter of 2002 and are expected
to result in a small gain.

North Dakota 3:

In June 2002, we were
notified that we were the high bidder for the North Dakota 3
Rural Service Area (RSA) license by the FCC for
approximately $9.4 million. The purchase of the license is anticipated to close
late in the third quarter of 2002. Currently we operate this RSA under
an interim operating authority.

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

tele.ring:

In April 2002, an
indirect wholly-owned subsidiary of WWI, exercised its option to
acquire 100% of the stock of Mannesmann 3G Mobilfunk GmbH (an indirect
wholly-owned subsidiary of Vodafone), holder of an Austrian UMTS license for
assumption of $0.5 million of liabilities. The acquired entity currently has no
ongoing operations.

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Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements(Unaudited)

10. Segment Information:

Our operations are overseen by domestic and international management teams
each reporting to our Chief Executive Officer. We mainly provide cellular
services in rural markets in the western United States. Our international
operations consist mainly of consolidated subsidiaries and operating entities
throughout the world. Certain centralized back office costs and assets benefit
all of our operations. These costs are allocated to both segments in a manner
which reflects the relative time devoted to each of the segments.

The domestic cellular operations comprise the majority of our total
revenues, expenses and total assets as presented in the table below:

|                                 |                                       |  |                    |           |                         |  |   |              |   |  |   |           |  
|-------------------------------- | ------------------------------------- |  | ------------------ | --------- | ----------------------- |  | - | ------------ | - |  | - | --------- | -
|(Dollars in thousands)           |                                       |  |                    |           |                         |  |   |              |   |  |   |          
|                                 |                                       |  | DomesticOperations |           | InternationalOperations |  |   | Consolidated |  
|                                 |                                       |  |                    |           |                         |  |  
|Three months ended June 30, 2002 |                                       |  |                    |           |                         |  |   |              |   |  |   |          
|                                 | Total revenues                        |  | $                  | 222,591   |                         |  | $ | 76,196       |   |  | $ | 298,787   |  
|                                 | Depreciation and amortization expense |  |                    | 47,130    |                         |  |   | 11,458       |   |  |   | 58,588    |  
|                                 | Interest and financing expense, net   |  |                    | 28,031    |                         |  |   | 11,280       |   |  |   | 39,311    |  
|                                 | Net loss                              |  |                    | (1,374    | )                       |  |   | (28,381      | ) |  |   | (29,755   | )
|                                 | Total capital expenditures            |  |                    | 30,468    |                         |  |   | 51,301       |   |  |   | 81,769    |  
|Six months ended June 30, 2002   |                                       |  |                    |           |                         |  |   |              |   |  |   |          
|                                 | Total revenues                        |  | $                  | 433,868   |                         |  | $ | 155,583      |   |  | $ | 589,451   |  
|                                 | Depreciation and amortization expense |  |                    | 96,692    |                         |  |   | 23,411       |   |  |   | 120,103   |  
|                                 | Interest and financing expense, net   |  |                    | 57,035    |                         |  |   | 21,635       |   |  |   | 78,670    |  
|                                 | Net loss                              |  |                    | (68,151   | )                       |  |   | (57,606      | ) |  |   | (125,757  | )
|                                 | Total capital expenditures            |  |                    | 65,743    |                         |  |   | 94,717       |   |  |   | 160,460   |  
|At June 30, 2002                 |                                       |  |                    |           |                         |  |   |              |   |  |   |          
|                                 | Total assets                          |  | $                  | 1,817,741 |                         |  | $ | 566,767      |   |  | $ | 2,384,508 |  

|                                 |                                           |  |                    |           |                         |  |   |              |   |  |   |           |  
|-------------------------------- | ----------------------------------------- |  | ------------------ | --------- | ----------------------- |  | - | ------------ | - |  | - | --------- | -
|(Dollars in thousands)           |                                           |  |                    |           |                         |  |   |              |   |  |   |          
|                                 |                                           |  | DomesticOperations |           | InternationalOperations |  |   | Consolidated |  
|                                 |                                           |  |                    |           |                         |  |  
|Three months ended June 30, 2001 |                                           |  |                    |           |                         |  |   |              |   |  |   |          
|                                 | Total revenues                            |  | $                  | 235,681   |                         |  | $ | 16,881       |   |  | $ | 252,562   |  
|                                 | Depreciation and amortization expense     |  |                    | 47,107    |                         |  |   | 5,578        |   |  |   | 52,685    |  
|                                 | Interest and financing expense, net       |  |                    | 34,980    |                         |  |   | 5,826        |   |  |   | 40,806    |  
|                                 | Net income (loss)                         |  |                    | 14,524    |                         |  |   | (28,551      | ) |  |   | (14,027   | )
|                                 | Total capital expenditures                |  |                    | 63,336    |                         |  |   | 26,903       |   |  |   | 90,239    |  
|Six months ended June 30, 2001   |                                           |  |                    |           |                         |  |   |              |   |  |   |          
|                                 | Total revenues                            |  | $                  | 459,338   |                         |  | $ | 29,698       |   |  | $ | 489,036   |  
|                                 | Depreciation and amortization expense     |  |                    | 84,592    |                         |  |   | 10,712       |   |  |   | 95,304    |  
|                                 | Interest and financing expense, net       |  |                    | 72,904    |                         |  |   | 10,014       |   |  |   | 82,918    |  
|                                 | Cumulative change in accounting
principle |  |                    | (6,600    | )                       |  |   | 1,020        |   |  |   | (5,580    | )
|                                 | Net income (loss)                         |  |                    | 20,883    |                         |  |   | (57,794      | ) |  |   | (36,911   | )
|                                 | Total capital expenditures                |  |                    | 88,438    |                         |  |   | 66,846       |   |  |   | 155,284   |  
|At June 30, 2001                 |                                           |  |                    |           |                         |  |   |              |   |  |   |          
|                                 | Total assets                              |  | $                  | 1,836,412 |                         |  | $ | 336,907      |   |  | $ | 2,173,319 |  

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

Cautionary statement for purposes of the Safe Harbor provisions of the
Private Litigation Reform Act of 1995.Statements contained herein that are
not based on historical fact, including without limitation statements
containing the words believes, may, will, estimate, continue,
anticipates, intends, expects and words of similar import, constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, events or developments to be materially different from any future
results, events or developments expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general
economic and business conditions, both nationally and in the regions in which
Western Wireless operates; technology changes; competition; changes in business
strategy or development plans; the high leverage of Western Wireless; the
ability to attract and retain qualified personnel; existing governmental
regulations and changes in, or the failure to comply with, governmental
regulations; liability and other claims asserted against Western Wireless; and
other factors referenced in Western Wireless public offering prospectuses and
its periodic reports filed with the Securities and Exchange Commission.

Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.Western Wireless disclaims any
obligation to update any such factors or to publicly announce the result of any
revisions to any of the forward-looking statements contained herein to reflect
future results, events or developments.

Unless the context requires otherwise, Western Wireless, the Company,
we, our and us include us and our subsidiaries.

The following discussion and analysis is based upon our condensed
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The discussion
and analysis should be read in conjunction with our consolidated financial
statements and notes thereto and other financial information included herein
and in our Form 10-K for the year ended December 31, 2001. The preparation of
our financial statements requires management to make estimates and judgments
that affect the reported amount of assets, liabilities, revenues and expenses,
and related disclosure of contingent assets and liabilities during the periods
reported. Estimates are used when accounting for certain items such as
subscriber and roamer revenues, interconnect costs, incollect expense,
allowance for doubtful accounts, long-lived assets, investments in
unconsolidated affiliates, income taxes and contingencies. We base our
estimates on historical experience, where applicable, and other assumptions
that we believe are reasonable under the circumstances. Actual results may
differ from our estimates due to changing conditions or the validity of our
assumptions.

Overview

We provide wireless communications services in 19 western states under the
CELLULARONE® brand name principally through the ownership and operation of
cellular wireless systems. The operations are primarily in rural areas due to
our belief that there are certain strategic advantages to operating in these
areas. We own FCC licenses to provide such services in 18 Metropolitan Service
Areas (MSA) and 88 Rural Service Areas (RSA). Additionally, we own 10 MHZ
personal communication services (PCS) licenses for three Basic Trading Areas
(BTA). In June 2002, we were notified we were the high
bidder for the North Dakota 3 RSA license by the FCC. This RSA is
included in the 88 RSAs discussed above as we currently provide service in
this area through an interim operating authority.

During the second quarter, we continued to deploy CDMA services throughout
our territory and now cover approximately 50% of our population with CDMA.

At June 30, 2002, we owned approximately 98% of Western Wireless
International Holding Corporation (WWI) and the balance was owned by Bradley
Horwitz, our Executive Vice President and President of WWI. WWI, through
consolidated interests in subsidiaries and operating joint ventures, is a provider of
wireless and other communications services in ten countries. WWI owns
interests in wireless
licenses in ten foreign countries with a controlling interest in seven of these
countries. Slovenia, Austria, Ireland, Bolivia, Iceland, Haiti and Ghana are
consolidated into our financial results. Cote DIvoire, Croatia and Georgia
are accounted for using the equity method.

U.S. headquarter functions of WWI and majority owned European, South
American and Caribbean consolidated subsidiaries are recorded as of the date of
the financial statements. During the first quarter of 2002, we brought the
results of Bolivia and Haiti current with the date of the financial statements.
Our consolidated Ghanaian entity and entities accounted for using the equity
method continue to be presented on a one quarter lag. For the first six months
of 2001, consolidated subsidiaries in Iceland, Ghana, Bolivia and Haiti, along
with entities accounted for using the equity method were recorded on a one
quarter lag. The inclusion of an additional quarter of operations for Bolivia
and Haiti in the first quarter for 2002 had an insignificant impact on our
consolidated operating results.

Results of Domestic Operations for the Three and Six Months Ended June 30,
2002 and 2001

We had 1,165,300 domestic subscribers at June 30, 2002. This represents
an increase of 5,800 and a decrease of 11,200 compared to March 31, 2002 and
December 31, 2001, respectively. We had 1,116,500 domestic subscribers at June
30, 2001. This represented an increase of 30,000 and 67,000 compared to March
31, 2001 and December 31, 2000, respectively.

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##### Table of Contents



The following table sets forth certain financial data as it relates to our
domestic operations:

|                       |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |         |         |         | 
|---------------------- | ---------------------------------- | ------------------------ | -------------- | ------- | --------------------------- | ------- | ------------------------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | 
|(Dollars in thousands) |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |        
|                       |                                    |                          |                |         | Three months ended June 30, |         | Six months ended June 30,
|                       |                                    |                          |                |         |                             |         |                          
|                       |                                    |                          |                |         | 2002                        |         | 2001                      |         | 2002    |         | 2001   
|                       |                                    |                          |                |         |                             |         |                           |         |         |         |        
|Revenues:              |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |        
|                       | Subscriber revenues                |                          | $              | 151,999 |                             |         | $                         | 158,157 |         |         | $       | 297,677 |         |         | $       | 310,089 |        
|                       | Roamer revenues                    |                          |                | 58,841  |                             |         |                           | 68,101  |         |         |         | 111,851 |         |         |         | 129,713 |        
|                       | Equipment sales and
other revenues |                          |                | 11,751  |                             |         |                           | 9,423   |         |         |         | 24,340  |         |         |         | 19,536  |        
|                       |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |        
|                       |                                    |                          | Total revenues |         | $                           | 222,591 |                           |         | $       | 235,681 |         |         | $       | 433,868 |         |         | $       | 459,338 | 
|                       |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |        
|Operating expenses:    |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |        
|                       | Cost of service                    |                          | $              | 46,157  |                             |         | $                         | 49,554  |         |         | $       | 90,491  |         |         | $       | 97,184  |        
|                       | Cost of equipment sales            |                          |                | 19,302  |                             |         |                           | 16,823  |         |         |         | 37,732  |         |         |         | 29,144  |        
|                       | General and
administrative         |                          |                | 34,947  |                             |         |                           | 43,590  |         |         |         | 72,835  |         |         |         | 84,730  |        
|                       | Sales and marketing                |                          |                | 30,216  |                             |         |                           | 30,704  |         |         |         | 55,954  |         |         |         | 62,308  |        
|                       | Depreciation and
amortization      |                          |                | 47,130  |                             |         |                           | 47,107  |         |         |         | 96,692  |         |         |         | 84,592  |        
|                       | Asset disposition                  |                          |                | 7,556   |                             |         |                           |         |         |         |         | 7,556   |         |         |         |         |        
|                       | Stock based compensation           |                          |                |         |                             |         |                           | 1,053   |         |         |         |         |         |         |         | 2,376   |        
|                       |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |        
|                       |                                    | Total operating expenses |                | $       | 185,308                     |         |                           | $       | 188,831 |         |         | $       | 361,260 |         |         | $       | 360,334 |        
|                       |                                    |                          |                |         |                             |         |                           |         |         |         |         |         |         |         |         |        
|EBITDA                 |                                    | $                        | 91,969         |         |                             | $       | 95,010                    |         |         | $       | 176,856 |         |         | $       | 185,972 |        

Domestic Revenues

The decrease in subscriber revenues for the three and six month periods
ended June 30, 2002, compared to the same periods one year ago is due mainly to
a decrease in the monthly average revenue per subscriber (ARPU). ARPU was
$43.59 for the three months ended June 30, 2002, a $4.27, or 8.9%, decline from
$47.86 for the three months ended June 30, 2001. ARPU was $42.37 for the six
months ended June 30, 2002, a $5.35, or 11.2%, decline from $47.72 for the six
months ended June 30, 2001. The decline in ARPU is the result of several
factors including: (i) larger home calling areas; (ii) more rate plans that
included long distance at no additional charge; and (iii) an increase in the
number of rate plans that share minutes with an existing plan at a lower access
rate. We continue to focus on attracting and retaining customers with rate
plans that provide more features and included minutes at a higher average
recurring access charge. New rate plans offered in 2002 have slowed the
decline in ARPU and management expects that trend to continue.

The decrease in roamer revenue for the three and six months ended June 30,
2002, compared to the same periods a year ago is due mainly to a year-over-year
decrease in the roamer rate with AT&T Wireless Services, Inc. (AT&T
Wireless), our largest roaming partner, under the contract extension period
June 16, 2001 through June 15, 2002 partially offset by growth in roamer
minutes. In March 2002, we entered into an additional extension of our roaming
agreement with AT&T Wireless. The contract extension became effective June 16,
2002 and remains in effect until June 15, 2006. In the first year, the
extended agreement provides for lower per minute rates compared to the
contractual rates through June 15, 2002, charged to AT&T Wireless for AT&T
Wireless customers roaming on our network. The extended agreement also
provides for slight rate decreases charged to AT&T Wireless in both the second
and third year of the agreement. Additionally, in April 2002, we signed new
roaming agreements with Cingular Wireless (Cingular) and Verizon Wireless
Corporation (Verizon) effective through April 2005. Management expects that
the new agreements with Cingular and Verizon along with increases in
volume from AT&T Wireless will generate sufficient new
roaming traffic to offset most, if not all, of the AT&T Wireless rate
reduction that took effect June 16, 2002.

Equipment sales and other revenues for the three and six months ended June
30, 2002, which consist primarily of wireless handset and accessory sales to
customers, increased compared to the three and six months ended June 30, 2001,
due mainly to an increase in the average revenue per phone sold as a result of
an increase in the number of digital handsets sold. As the cost of digital
handsets continues to decline, we expect to pass these savings on to our
customers. However, we expect to continue to sell these handsets at higher
prices than we historically sold analog handsets.

Domestic Operating Expenses

The decrease in cost of service for the three and six month periods ended
June 30, 2002, compared to the same periods one year ago is mainly attributable
to decreased off network roaming costs for our customers as a result of
reciprocal pricing contained in our new

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##### Table of Contents



roaming agreements with AT&T Wireless, Cingular and Verizon. These
decreases were partially offset by increased costs associated with supporting
an increase in the number of subscriber and roamer minutes of use. Domestic
cost of service per minute of use (MOU) decreased to $0.03 per MOU for both
the three and six month period ended June 30, 2002, compared to $0.04 for the
three months ended June 30, 2001, and $0.05 for the six months ended June 30,
2001. The decrease in domestic cost of service per MOU is due mainly to the
decrease in off network roaming costs previously discussed. In addition, we
continue to see the fixed cost components of cost of service increasing at a
slower rate than variable costs on a per minute basis. We expect domestic cost
of service to continue to be down on a year-over-year basis through the end of
2002 due to continued savings in off network roaming costs. Further, we expect
domestic cost of service per MOU to continue to gradually decline as greater
economies of scale continue to be realized.

General and administrative costs decreased for the three and six month
periods ended June 30, 2002, compared to the same periods one year ago
primarily as the result of lower bad debt expense and lower billing costs. Our
domestic general and administrative monthly cost per average subscriber for the
three months ended June 30, 2002, decreased to $10.02 from $13.19 for the
quarter ended June 30, 2001. Our domestic general and administrative monthly
cost per average subscriber for the six months ended June 30, 2002, decreased
to $10.37 from $13.04 for the six months ended June 30, 2001. Management
anticipates cost efficiencies to continue on a per domestic subscriber basis in
2002 as compared to 2001.

Sales and marketing costs, including the loss on equipment sales,
decreased for the three and six month periods ended June 30, 2002, compared to
the same periods one year ago due primarily to a decrease in domestic gross
subscriber additions, partially offset by higher average cost per gross
subscriber addition. The increase in the average cost per gross subscriber
addition results mainly from fixed sales and marketing costs being spread over
fewer gross subscriber adds.

Cost of equipment sales increased for the three and six months ended June
30, 2002, compared to the same periods in 2001 as a result of an increase in
the average per unit cost of handsets sold due to a greater proportion of
digital handsets in the overall handsets sold mix. This increase was partially
offset by a decrease in the number of handsets sold. We expect that as the mix
of digital and analog handsets continues to migrate more toward digital, our
per unit cost of handsets will increase, partially offset by declining prices
of digital handsets in the market place. Although subscribers generally are
responsible for purchasing or otherwise obtaining their own handsets, we have
historically sold handsets below cost to respond to competition and general
industry practice and expect to continue to do so in the future.

The increase in depreciation and amortization expense for the six months ended June 30, 2002, compared to the same periods in 2001, is mainly
attributable to the growth of domestic wireless communication system assets
partially offset by a decrease in amortization expense associated with the
discontinuance of license amortization with the adoption on January 1, 2002, of
Statement of Financial Accounting Standards (SFAS) No. 142 Goodwill and
Other Intangible Assets (SFAS No. 142). With the adoption of SFAS No. 142
and with a reduction of year-over-year capital spending, we expect depreciation
and amortization to be relatively flat in future periods.

The asset disposition loss results from the implementation of our strategy
to dispose of certain minor domestic non-core assets. In conjunction with
these efforts, we have recognized a charge in the second quarter of 2002 of
approximately $7.6 million related to the disposition of certain of our paging
assets. We also have certain Specialized Mobile Radio (SMR) and Competitive
Local Exchange Carrier (CLEC) assets that we have sold. The results of the
dispositions of the SMR and CLEC assets will be reflected in the third quarter
of 2002 and are expected to result in a small gain.

Domestic EBITDA

EBITDA represents
total revenues less total operating expenses exclusive of depreciation, amortization,
asset disposition and stock based compensation for our operations. Management
believes EBITDA provides meaningful additional information on our performance
and on our ability to service our long-term debt and other fixed obligations,
and to fund our continued growth. EBITDA is considered by many financial
analysts to be a meaningful indicator of an entitys ability to meet its future
financial obligations, and growth in EBITDA is considered to be an indicator of
future profitability, especially in a capital-intensive industry such as
wireless telecommunications. EBITDA should not be construed as an alternative
to net income (loss) as determined in accordance with United States generally
accepted accounting principles, as an alternate to cash flows from operating
activities (as determined in accordance with generally accepted accounting
principles), or as a measure of liquidity. Since all companies do not
calculate EBITDA in the same manner, our presentation may not be comparable to
other similarly titled measures of other companies.

Domestic EBITDA decreased for the three and six months ended June 30,
2002, compared to the three and six months ended June 30, 2001. The
year-over-year decreases are the result of decreases in subscriber and roaming
revenues partially offset by decreases in cost of service, sales and marketing,
and general and administrative expenses. Operating margin (domestic EBITDA as
a percentage of service revenues) increased to 43.4% and 42.8% from 41.6% and
41.9% for the three and six month periods ended June 30, 2002, compared to the
three and six month periods ended June 30, 2001, respectively. Management
expects domestic EBITDA to increase in 2002, as compared to 2001.

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Results of International Operations for the Three and Six Months Ended
June 30, 2002 and 2001

Our international consolidated operations offer postpaid and prepaid
mobile services in Slovenia, Austria, Ireland, Iceland, Bolivia and Haiti, and
fixed line service primarily in Austria. We had 637,400 consolidated
international mobile customers at June 30, 2002. This represents an increase of
55,600, or 9.6%, compared to March 31, 2002 and an increase of 89,500 or 16.3%
compared to December 31, 2001. We had 162,800 consolidated international
customers at June 30, 2001, representing an increase of 46,000 or 39.4%
compared to March 31, 2001 and an increase of 79,900 or 96.4% compared to
December 31, 2000. As of June 30, 2002 and 2001, approximately 67% and 75%,
respectively, of our consolidated international customers were prepaid
customers. As of June 30, 2002, we had 177,400 fixed lines.

The following table sets forth certain financial data as it relates to our
international operations:

|                       |                                    |                          |         |                             |        |                           |         |        |        |      |         |         |         |   |         |        |        | 
|---------------------- | ---------------------------------- | ------------------------ | ------- | --------------------------- | ------ | ------------------------- | ------- | ------ | ------ | ---- | ------- | ------- | ------- | - | ------- | ------ | ------ | 
|(Dollars in thousands) |                                    |                          |         |                             |        |                           |         |        |        |      |         |         |         |   |         |       
|                       |                                    |                          |         | Three months ended June 30, |        | Six months ended June 30,
|                       |                                    |                          |         |                             |        |                          
|                       |                                    |                          |         | 2002                        |        | 2001                      |         | 2002   |        | 2001
|                       |                                    |                          |         |                             |        |                           |         |        |        |     
|Revenues:              |                                    |                          |         |                             |        |                           |         |        |        |      |         |         |         |   |         |       
|                       | Subscriber revenues                |                          | $       | 52,827                      |        |                           | $       | 12,373 |        |      | $       | 105,720 |         |   | $       | 21,551 |       
|                       | Roamer revenues                    |                          |         | 5,553                       |        |                           |         | 738    |        |      |         | 13,524  |         |   |         | 1,323  |       
|                       | Fixed line revenues                |                          |         | 13,383                      |        |                           |         | 302    |        |      |         | 26,999  |         |   |         | 381    |       
|                       | Equipment sales and
other revenues |                          |         | 4,433                       |        |                           |         | 3,468  |        |      |         | 9,340   |         |   |         | 6,443  |       
|                       |                                    |                          |         |                             |        |                           |         |        |        |      |         |         |         |   |         |       
|                       |                                    | Total revenues           |         | $                           | 76,196 |                           |         | $      | 16,881 |      |         | $       | 155,583 |   |         | $      | 29,698 | 
|                      
|Operating expenses:    |                                    |                          |         |                             |        |                           |         |        |        |      |         |         |         |   |         |       
|                       | Cost of service                    |                          | $       | 46,950                      |        |                           | $       | 10,008 |        |      | $       | 92,481  |         |   | $       | 17,345 |       
|                       | Cost of equipment sales            |                          |         | 9,247                       |        |                           |         | 3,895  |        |      |         | 17,585  |         |   |         | 7,987  |       
|                       | General and
administrative         |                          |         | 15,346                      |        |                           |         | 8,730  |        |      |         | 37,697  |         |   |         | 18,783 |       
|                       | Sales and marketing                |                          |         | 16,206                      |        |                           |         | 8,525  |        |      |         | 30,180  |         |   |         | 19,263 |       
|                       | Depreciation and
amortization      |                          |         | 11,458                      |        |                           |         | 5,578  |        |      |         | 23,411  |         |   |         | 10,712 |       
|                       | Stock based
compensation           |                          |         |                             |        |                           |         | 5,198  |        |      |         |         |         |   |         | 9,871  |       
|                       |                                    |                          |         |                             |        |                           |         |        |        |      |         |         |         |   |         |       
|                       |                                    | Total operating expenses |         | $                           | 99,207 |                           |         | $      | 41,934 |      |         | $       | 201,354 |   |         | $      | 83,961 | 
|                      
|EBITDA                 |                                    | $                        | (11,553 | )                           |        | $                         | (14,277 | )      |        | $    | (22,360 | )       |         | $ | (33,680 | )     

International Revenues

The increase in subscriber revenues for the three and six months ended
June 30, 2002, compared to the same periods in 2001 is primarily due to the
inclusion of subscriber revenue generated by tele.ring, which was acquired by
us at the end of June 2001. Additionally, we eliminated the one quarter lag
and brought the results of Bolivia and Haiti current in the first quarter of
2002, resulting in the inclusion of an additional quarter of operations for
these entities for the six month period ended June 30, 2002. We anticipate
continued growth in international subscriber revenues as we continue to add
prepaid and postpaid subscribers in our international markets.

The increase in roamer revenues for the three and six months ended June
30, 2002, compared to the same periods in 2001 is primarily due to the
inclusion of roamer revenue generated by tele.ring, as previously discussed.

Fixed line revenues increased for the three and six months ended June 30,
2002 as compared to the same periods in 2001, primarily as a result of
inclusion of fixed line revenue generated by tele.ring, as previously
discussed.

Equipment sales and other revenues, which consist mostly of wireless
handset and accessory sales to customers, increased for the three months ended
June 30, 2002, compared to the same period in 2001 primarily due to the launch
of Slovenia in December 2001. The increase for the six month period ended June
30, 2002, compared to the same period one year ago, is due to the launch of
Slovenia and the inclusion of an additional quarter of operations for Bolivia
and Haiti.

International Operating Expenses

Operating expenses represent the expenses incurred by our consolidated
international markets and headquarters administrative functions in the United
States. Seven of our international consolidated markets were operational
during the entire six months ended June

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30, 2002, while only four were operational during the same period in 2001.
Our international operations in Ireland and Slovenia became operational in
February 2001 and December 2001, respectively, and we acquired tele.ring at the
end of June 2001. Additionally, we eliminated the one quarter lag and brought
the results of Bolivia and Haiti current in the first quarter of 2002,
resulting in the inclusion of an additional quarter of operations for these
entities for the six months ended June 30, 2002. Accordingly, operating
expenses increased for the three and six months ended June 30, 2002, over the
same periods in 2001. The period-over-period trend is not necessarily
indicative of future trends as our number of consolidated international markets
that were operational increased. As we continue to add subscribers and expand
our wireless footprint in our consolidated international markets, international
operating expenses are expected to continue to increase.

We have no stock based compensation in 2002 based on current market
conditions.

International EBITDA

EBITDA represents
total revenues less total operating expenses exclusive of depreciation, amortization and
stock based compensation for our operations. Since all companies do not
calculate EBITDA in the same manner, our presentation may not be comparable to
similarly titled measures of other companies.

International EBITDA
losses for our consolidated subsidiaries improved for the
three and six months ended June 30, 2002, compared to the same periods in 2001,
due to an increased subscriber base and operating efficiencies in the first half
of 2002 and eliminating the lag of certain markets during the quarter ended
March 31, 2001. Management expects international EBITDA losses to improve
throughout 2002, compared to 2001, as a result of continued subscriber growth
and related economies of scale in our existing markets.

Consolidated Other Income (Expense)

Consolidated interest and financing expense decreased to $39.3 million and
$78.7 million for the three and six months ended June 30, 2002, from $40.8
million and $82.9 million one year ago. The decreases year-over-year are
primarily due to a reduction of our weighted average interest rate partially
offset by an increase in our average long-term debt. For the three months
ended June 30, 2002 and 2001, the domestic weighted average interest rate paid
to third parties was 6.7% and 8.1%, respectively. For the six months ended
June 30, 2002 and 2001, the domestic weighted average interest rate paid to
third parties was 6.7% and 8.4%, respectively. For the three months ended June
30, 2002 and 2001, the consolidated international weighted average interest
rates paid to third parties by WWI was 6.4% and 8.3%, respectively. For the
six months ended June 30, 2002 and 2001, the consolidated international
weighted average interest rates paid to third parties by WWI was 6.3% and 8.2%,
respectively.

Provision for Income Taxes

In connection with the adoption of SFAS No. 142, we have incurred a
non-cash charge of approximately $85.5 million for the six months ended June 30, 2002 as a provision for income taxes mainly to increase the valuation
allowance related to our net operating loss carryforwards. This non-cash
charge includes $71.4 million in one-time charges required because we have
significant deferred tax liabilities related to our domestic licenses.
Historically, we did not need a valuation allowance for the portion of our net
operating loss carryforward equal to the amount of license amortization
expected to occur during the net operating loss carryforward period. Since we
ceased amortizing licenses on January 1, 2002 for book purposes
and we can no
longer estimate the amount, if any, of deferred tax liabilities related to our
domestic licenses which will reverse during the net operating loss carryforward
period, we have increased the valuation allowance accordingly. Further, since
January 1, 2002, we continue to amortize our licenses for federal income tax
purposes. As previously discussed, license costs are no longer amortized for
book purposes. The ongoing difference between book and tax amortization
resulted in an additional non-cash charge as a provision for income tax of
approximately $14.1 million for the six months ended June 30, 2002. The
additional non-cash charge to the income tax provision results from growth in
our deferred tax liability that cannot be estimated to reverse during our net
operating loss carryforward period.

This adjustment reflects tax accounting requirements and is not based on
any changes to our business model, future prospects, the value of our licenses
or any current or future cash tax payments. The increase in the valuation
allowance does not reflect any change in our assessment of the likelihood of
utilizing the tax NOL carryforwards on a cash tax basis in the future. We will
continue to evaluate the need for this valuation allowance for accounting
purposes to determine if we should reverse all or part of the allowance in the
future.

Consolidated Liquidity and Capital Resources

We have a $2.1 billion credit facility with a consortium of lenders (the
Credit Facility). The Credit Facility provides for $1 billion in revolving
loans and $1.1 billion in term loans. As of August 12, 2002, $1.8 billion is
outstanding under the Credit Facility and we have approximately $185 million
available to borrow.

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During the second quarter, we repurchased approximately $17 million of our
101⁄2% Senior Subordinated Notes due in 2006 and 2007 in open market
transactions.

In June 2001, under the terms of the transaction to acquire tele.ring from
a subsidiary of Vodafone Group Plc (Vodafone), an affiliate of Vodafone
agreed to make available to tele.ring financing of 250 million euro for
purposes of funding working capital and network expansion (the
tele.ring Revolver). At June 30, 2002, the outstanding balance under the
tele.ring Revolver was approximately $94 million, including accrued interest. At June 30,
2002, there was approximately 160 million euro available but undrawn under the
tele.ring Revolver which is expected to sustain tele.ring until it becomes free
cash flow positive.

NuevaTel, S.A. (NuevaTel), a subsidiary of WWI, has a bridge loan
facility (the Bridge Loan). The aggregate amount available under the Bridge
Loan is $37.5 million. The amount available to draw is contingent upon the
issuance of purchase orders to an equipment provider. WWI, along with
its partners, has severally guaranteed the Bridge Loan. At June 30, 2002,
NuevaTel had drawn approximately $35 million against this bridge loan facility.
There is no availability under the facility. The loan matures in its entirety
in October 2002. We believe we can extend or refinance the Bolivian bridge
loan facility prior to its maturity, but neither can be assured.

A subsidiary of WWI, TAL h.f. (TAL), has a credit facility with three
foreign banks denominated in a basket of five currencies. At June 30, 2002,
TAL had approximately $23 million outstanding under this facility. This
facility is fully drawn. We will repay approximately $2 million of principal
during the remainder of 2002 and expect to do so using positive cash flow from
TAL.

In April 2002, a subsidiary of WWI
repaid the remainder of the outstanding principal and interest on the
Meteor Mobile Communications Limited bridge
loan facility.

Slovenian Credit Facility:

In April 2002, Western Wireless International d.o.o. (Vega), a
subsidiary of WWI, entered into a credit facility agreement (the Slovenian
Credit Facility) with a consortium of banks to provide funding for the
implementation and expansion of Vegas network in Slovenia. The total amount
of the Slovenian Credit Facility is 116 million euro. Under the terms of the
Slovenian Credit Facility, all outstanding principal is required to be repaid
in predetermined semi-annual installments beginning on May 30, 2004 and ending
on November 30, 2009. Interest is accrued mainly at EURIBOR plus an applicable
margin, initially ranging from 1.25% to 3.25% based on Vegas financial and
technical performance. Further, the Slovenian Credit Facility requires Vega to
enter into interest rate hedge agreements on a minimum of 50% of the
outstanding balance under the Slovenian Credit Facility to manage the interest
rate exposure pertaining to borrowings under the Slovenian Credit
Facility.

The Slovenian Credit Facility contains certain borrowing conditions and
restrictive covenants, including: minimum subscribers; population coverage;
certain cash flow requirements; minimum contributed capital and debt service
coverage. Western Wireless International Corporation
(WWIC), a subsidiary of WWI, has guaranteed the Slovenian Credit Facility under the
following circumstances: failure to meet specified network construction
milestones, the subsidiarys insolvency, or abandonment of the project.
Further, WWIC has made a commitment that is collateralized by cash to
contribute up to a maximum of 16 million euro in additional capital to provide
for cumulative operating cash flow shortfalls and cash balance deficiencies, if
any. In the second quarter of 2002, Vegas revenues were 1.3 million euro below
the minimum revenues required under the covenants contained in the Slovenian
Credit Facility. In August 2002, pursuant to the Slovenian Credit Facility,
WWIC exercised the right to contribute an additional 1.3 million euro to Vega
as a result of the revenue shortfall. As of June 30, 2002, Vega had
approximately $54 million available to borrow under the Slovenian Credit
Facility, $27 million of which is restricted for payment on future purchases by
Vega from its equipment supplier. We expect that there will be additional revenue or other financial covenant shortfalls in the future
which may limit the availability of borrowings under the Slovenian Credit
Facility, subject to WWICs right to contribute additional amounts in
order to cure such shortfalls.

The maturities of our aggregate long-term debt, including that due within
one year and classified as current are:

|                      |  |              |      |      |  |      |       |      |  |      |       |       |  |       |       |  |  |   |       |        |  |   |         |  |  |   |         | 
|--------------------- |  | ------------ | ---- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ----- |  | ----- | ----- |  |  | - | ----- | ------ |  | - | ------- |  |  | - | ------- | 
|(Dollars in millions)
|                      |  | 6 mos.       |      |      |  |      |       |      |  |      |       |       |  |       |       |  |  |   |       |        |  |   |         |  |  |  
|                      |  | ending       |      |      |  |      |       |      |  |      |       |       |  |       |       |  |  |   |       |        |  |   |         | 
|                      |  | December 31, |      |      |  |      |       |      |  |      |       |       |  |       |       |  |  |   |       | There- |  |   |         | 
|                      |  | 2002         |      | 2003 |  | 2004 |       | 2005 |  | 2006 |       | after |  | Total
|                      |  |              |      |      |  |      |       |      |  |      |       |       |  |      
|Domestic              |  | $            | 0.0  |      |  | $    | 106.1 |      |  | $    | 156.1 |       |  | $     | 256.1 |  |  | $ | 518.1 |        |  | $ | 1,152.0 |  |  | $ | 2,188.4 | 
|International         |  |              | 39.0 |      |  |      | 6.8   |      |  |      | 40.7  |       |  |       | 45.7  |  |  |   | 41.0  |        |  |   | 33.0    |  |  |   | 206.2   | 
|                      |  |              |      |      |  |      |       |      |  |      |       |       |  |       |       |  |  |   |       |        |  |   |         |  |  |   |         | 
|Total                 |  | $            | 39.0 |      |  | $    | 112.9 |      |  | $    | 196.8 |       |  | $     | 301.8 |  |  | $ | 559.1 |        |  | $ | 1,185.0 |  |  | $ | 2,394.6 | 
|                      |  |              |      |      |  |      |       |      |  |      |       |       |  |       |       |  |  |   |       |        |  |   |         |  |  |   |         | 

For the remainder of
2002, we anticipate spending approximately $90
million for continued improvement to our domestic network and back office
infrastructure.

During the remainder of 2002, WWIs business plans also include funding
for capital expenditures and operating losses. WWI plans to fund these needs
through local foreign borrowings, the tele.ring Revolver, the Slovenian Credit
Facility and contributions and advances from Western Wireless and minority
partners in our consolidated subsidiaries. For the remainder of 2002, WWI
anticipates expending approximately $70 million for expansion of its wireless
networks and requiring approximately $28 million in working capital. It is
anticipated that the net contributions and advances by Western Wireless for the
remainder of 2002 will be approximately $27 million.

We believe that our current borrowing capacity under the Credit Facility
and available international loan facilities, along with domestic operating cash
flow, will be adequate to fund our projected domestic network capital
expenditures, international operations and debt service requirements for the
remainder of 2002. However, if operating cash flows are less than planned,
covenants and borrowing

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limitations contained in the Credit Facility and
the 101⁄2% Senior
Subordinated Notes due in 2006 and 2007 may be triggered that limit the
availability of borrowings under the Credit Facility. Our operating cash flow
is dependent upon, among other things: (i) the amount of revenue we are able
to generate from our customers; (ii) the amount of operating expenses required
to provide our services; (iii) the cost of acquiring and retaining customers;
and (iv) our ability to grow our customer base. In the event we are required
to seek additional funding and/or restructure our existing financial
arrangements, such funding may not be available to us on satisfactory terms, if
at all. Our ability to raise additional capital, if necessary, is subject to a
variety of factors, including: (i) the commercial success of our operations;
(ii) the volatility and demand of the capital markets, conditions in the
economy generally and the telecommunications industry specifically; and (iii)
other factors we cannot presently predict with certainty.

Net cash provided by operating activities was $95.6 million for the six
months ended June 30, 2002. Adjustments to the $125.8 million net loss to
reconcile to net cash used in operating activities included: (i) $122.1 million
of depreciation and amortization; (ii) $85.5 million in deferred income taxes;
(iii) $5.8 million minority interests income of consolidated subsidiaries; and
(iv) $7.6 million for loss on asset disposition. Net cash used in operating
activities was $51.1 million for the six months ended June 30, 2001.

Net cash used in investing activities was $185.4 million for the six
months ended June 30, 2002. Investing activities for the period consisted
primarily of $160.5 million in purchases of property and equipment of which
$94.7 million was related to WWI and $18.7 million in long-term deposits. Net
cash used in investing activities was $193.4 million for the six months ended
June 30, 2001.

Net cash provided by financing activities was $84.4 million for the six
months ended June 30, 2002. Financing activities for such period consisted
primarily of additions to long-term debt of $141.8 million for the continued
expansion of our cellular infrastructure and to fund international joint
ventures through WWI and repayments of long-term debt amounting to $58.5
million. Net cash provided by financing activities was $189.9 million for the
six months ended June 30, 2001.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our earnings are affected by changes in short-term interest rates as a
result of our borrowings. As part of our risk management program, we utilize
interest rate caps, swaps and collars to hedge variable rate interest risk.
Additionally, we have entered into foreign exchange contracts to hedge certain
foreign currency commitments. The following table provides information as of
June 30, 2002, about our long-term debt and derivative financial instruments
that are sensitive to changes in interest rates and foreign currency
fluctuations:

|                                                                                                  |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |         |  
|------------------------------------------------------------------------------------------------- | ------------------------------------------------ |  | ---------------------- | ---- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ----- |  | ----- | ----- | ----- |  | - | ----- |  |  | ------ | ----- |  |  | - | ------- | ---- |  | - | ------- | -
|(Dollars in millions)                                                                            
|                                                                                                  |                                                  |  | Expected maturity date |      |      |  |      |       |      |  |     
|                                                                                                  |                                                  |  |                        |      |      |  |      |       |      |  |     
|                                                                                                  |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  | There- |       |  |  |   |         | Fair
|                                                                                                  |                                                  |  | 2002                   |      | 2003 |  | 2004 |       | 2005 |  | 2006 |       | after |  | Total |       | Value
|                                                                                                  |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |      
|Liabilities:                                                                                      |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|Maturities of
long-term debt:                                                                     |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|                                                                                                  | Variable Rate                                    |  | $                      | 39.0 |      |  | $    | 112.9 |      |  | $    | 196.8 |       |  | $     | 301.8 |       |  | $ | 372.0 |  |  | $      | 989.0 |  |  | $ | 2,011.5 |      |  | $ | 2,011.5 |  
|                                                                                                  | Fixed Rate                                       |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  | $ | 187.1 |  |  | $      | 196.0 |  |  | $ | 383.1   |      |  | $ | 160.9   |  
|                                                                                                 
|Interest Rate
Derivatives:                                                                        |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|Financial instruments
related to debt                                                             |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|Interest rate caps:                                                                               |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|                                                                                                  | Notional amounts
outstanding by year
of maturity |  |                        |      |      |  | $    | 1.7   |      |  | $    | 3.3   |       |  | $     | 30.9  |       |  |   |       |  |  |        |       |  |  | $ | 35.9    |      |  | $ | 0.2     |  
|                                                                                                 
|The interest rate caps effectively lock $35.9 million of our borrowings between 5.0% and 7.0%    
|                                                                                                 
|Interest rate collars:                                                                            |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|                                                                                                  | Notional amounts
outstanding by year
of maturity |  |                        |      |      |  | $    | 245.0 |      |  | $    | 55.0  |       |  |       |       |       |  |   |       |  |  |        |       |  |  | $ | 300.0   |      |  | $ | (13.3   | )
|                                                                                                 
|The interest rate collars effectively lock $300 million of our borrowings between 6.5% and 7.8%  
|                                                                                                 
|Interest rate swaps:                                                                              |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|                                                                                                  | Notional amounts
outstanding by year
of maturity |  | $                      | 21.8 |      |  | $    | 70.0  |      |  | $    | 300.0 |       |  | $     | 25.0  |       |  |   |       |  |  |        |       |  |  | $ | 416.8   |      |  | $ | (21.0   | )
|                                                                                                 
|The interest rate swaps effectively lock $416.8 million of our borrowings between 4.9% and 6.8%  
|                                                                                                 
|Foreign Currency
Exchange Derivatives:                                                            |                                                  |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |        
|                                                                                                  | Forward exchange
agreement                       |  |                        |      |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  |   |         |      |  |   |         |  
|                                                                                                 
|                                                                                                  | Pay USD/receive EUR
(USD equivalent)             |  | $                      | 0.8  |      |  |      |       |      |  |      |       |       |  |       |       |       |  |   |       |  |  |        |       |  |  | $ | 0.8     |      |  | $ | 0.7     |  
|                                                                                                 
|We
have a foreign currency forward to sell $0.8 million and buy 0.9 million euro in November 2002

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PART II  OTHER INFORMATION




Item 1. Legal Proceedings

There are no material, pending legal proceedings to which we or any of our
subsidiaries or affiliates is a party or of which any of their property is
subject which, if adversely decided, would have a material adverse effect on
us.




Item 2. Changes in Securities

None.




Item 3. Defaults Upon Senior Securities

None.




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

The Annual Meeting of Shareholders was held on May 16, 2002. The
following matters were voted upon at the meeting and received the number of
votes indicated:



| | 1. |  | To elect nine directors to serve until the Annual Meeting of
Shareholders for 2003 and until their respective successors are elected
and qualified.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

|                     |  |     |             |          |  |  |           | 
|-------------------- |  | --- | ----------- | -------- |  |  | --------- | 
|                     |  | For |             | Withheld
|                     |  |     |             |         
|John W. Stanton      |  |     | 129,818,356 |          |  |  | 3,713,547 | 
|John L. Bunce        |  |     | 132,285,903 |          |  |  | 1,246,000 | 
|Mitchell R. Cohen    |  |     | 132,468,337 |          |  |  | 1,063,566 | 
|Daniel J. Evans      |  |     | 133,015,312 |          |  |  | 516,591   | 
|Theresa E. Gillespie |  |     | 129,667,993 |          |  |  | 3,863,910 | 
|Jonathan M. Nelson   |  |     | 132,116,342 |          |  |  | 1,415,561 | 
|Terence M. OToole   |  |     | 132,156,485 |          |  |  | 1,375,418 | 
|Mikal J. Thomsen     |  |     | 130,014,697 |          |  |  | 3,517,206 | 
|Peter H. van Oppen   |  |     | 132,469,962 |          |  |  | 1,061,941 | 



| | 2. |  | To ratify the selection of PricewaterhouseCoopers LLP as our
independent auditors for 2001 and 2002.
| | -- |  | ----------------------------------------------------------------------------------------------------

|         |  |  |             | 
|-------- |  |  | ----------- | 
|For:     |  |  | 132,650,177 | 
|Against: |  |  | 786,667     | 
|Abstain: |  |  | 95,088      | 



| | 3. |  | To amend the Western Wireless Corporation 1994 Management Incentive
Stock Option Plan to increase the number of shares available for
issuance there under by 2,500,000 shares.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|         |  |  |             | 
|-------- |  |  | ----------- | 
|For:     |  |  | 110,139,997 | 
|Against: |  |  | 23,270,079  | 
|Abstain: |  |  | 121,856     | 




Item 5. Other Information

None.




Item 6. Exhibits and Reports on Form 8-K

|             |  |                                                                                                                                                                                                                         
|------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)  Exhibit |  | Description                                                                                                                                                                                                             
|            
|10.1         |  | Letter Agreement dated April 5, 2002 by and among tele.ring
Telekom Service GmbH, EHG Einkaufs- und Handels GmbH, Vodafone AG (as
universal successor of Mannesmann Eurokom GmbH) and EKOM
Telecommunications Holding AG

23



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##### Table of Contents



|     |  |                                                                                                                                                                    
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2 |  | Western Wireless Corporation 1994 Management Incentive Stock
Option Plan, as adopted and amended November 16, 1995, May 20, 1999,
February 3, 2000 and May 16, 2002
|10.3 |  | Employment Agreement by and between Eric Hertz and Western
Wireless Corporation dated May 7, 2002                                                                  



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------

None

24



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##### Table of Contents






SIGNATURES

Pursuant to the requirements 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.

Western Wireless Corporation

|    |  |                                               |  |     |  |                                                                     
|--- |  | --------------------------------------------- |  | --- |  | --------------------------------------------------------------------
|By: |  | /s/ THERESA E. GILLESPIE                      |  | By: |  | /s/ SCOTT SOLEY                                                     
|    |  |                                               |  |     |  |                                                                     
|    |  | Theresa E. Gillespie
Executive Vice President |  |     |  | Scott Soley
Vice President and Controller
(Chief Accounting Officer)

Dated: August 13, 2002

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##### Table of Contents






EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                         
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                                                                                                             
|       
|10.1    |  | Letter Agreement dated April 5, 2002 by and among tele.ring Telekom
Service GmbH, EHG Einkaufs- und Handels GmbH, Vodafone AG (as universal
successor of Mannesmann Eurokom GmbH) and EKOM Telecommunications Holding
AG
|10.2    |  | Western Wireless Corporation 1994 Management Incentive Stock Option Plan,
as adopted and amended November 16, 1995, May 20, 1999, February 3, 2000
and May 16, 2002                                                     
|10.3    |  | Employment Agreement by and between Eric Hertz and Western Wireless
Corporation dated May 7, 2002                                                                                                                       

26