##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, DC 20549


Form 10-Q

|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended
    September 30, 2004                                       
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission File Number 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(Zip Code)                      
|(Address of principal executive
    offices)                       |  |                                      

(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 þ          No o

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

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 October 29, 2004
|                                   |  |                                          
|Class A Common Stock, no par value |  |                                           | 93,177,491 | 
|Class B Common Stock, no par value |  |                                           | 6,792,323  | 



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WESTERN WIRELESS CORPORATION

FORM 10-Q

For the Quarter Ended September 30,
2004


TABLE OF CONTENTS

|                                   |  |                                                                                                                                                                        |    |      |    | 
|---------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                   |  |                                                                                                                                                                        |    | Page
|                                   |  |                                                                                                                                                                        |    |     
|PART I  FINANCIAL
    INFORMATION
|Item 1.                            |  | Financial Statements (unaudited)                                                                                                                                       |    |      |    | 
|                                   |  | Condensed Consolidated
    Balance Sheets as of September 30, 2004 and
    December 31, 2003 (restated)                                                                |    |      | 2  | 
|                                   |  | Condensed Consolidated
    Statements of Operations and Comprehensive Income (Loss) for the
    Three and Nine Months Ended September 30, 2004 and 2003
    (restated) |    |      | 3  | 
|                                   |  | Condensed Consolidated
    Statements of Cash Flows for the Nine Months Ended
    September 30, 2004 and 2003 (restated)                                               |    |      | 5  | 
|                                   |  | Notes to Condensed
    Consolidated Financial Statements                                                                                                               |    |      | 6  | 
|Item 2.                            |  | Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations                                                                          |    |      | 29 | 
|Item 3.                            |  | Quantitative and
    Qualitative Disclosures about Market Risk                                                                                                         |    |      | 46 | 
|Item 4.                            |  | Controls and
    Procedures                                                                                                                                            |    |      | 48 | 
|PART II  OTHER
    INFORMATION   
|Item 1.                            |  | Legal
    Proceedings                                                                                                                                                  |    |      | 50 | 
|Item 2.                            |  | Unregistered Sales of
    Equity Securities and Use of Proceeds                                                                                                        |    |      | 50 | 
|Item 3.                            |  | Defaults Upon Senior
    Securities                                                                                                                                    |    |      | 50 | 
|Item 4.                            |  | Submission of Matters to
    a Vote of Security Holders                                                                                                                |    |      | 50 | 
|Item 5.                            |  | Other
    Information                                                                                                                                                  |    |      | 50 | 
|Item 6.                            |  | Exhibits                                                                                                                                                               |    |      | 51 | 
|Signatures                         |  |                                                                                                                                                                        | 52 |     
|Exhibit Index                      |  |                                                                                                                                                                        | 53 |     
|EXHIBIT 12.1                      
|EXHIBIT 31.1                      
|EXHIBIT 31.2                      
|EXHIBIT 32.1                      
|EXHIBIT 32.2                      



1



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##### Table of Contents



WESTERN WIRELESS CORPORATION



CONDENSED CONSOLIDATED BALANCE
SHEETS


(Dollars in thousands)


|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |            |           |  
|--------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | --------- | -------------- | --------- | - | --------- | ---------- | --------- | -
|                                                                                                                      |                                                                                                      | September 30,                                                        |           | December 31,  
|                                                                                                                      |                                                                                                      | 2004                                                                 |           | 2003          
|                                                                                                                      |                                                                                                      |                                                                      |           |               
|                                                                                                                      |                                                                                                      | (Unaudited)                                                          |           | (as restated 
|                                                                                                                      |                                                                                                      |                                                                      |           | see note 9)   
|ASSETS                                                                                                               
|Current assets:                                                                                                       |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      | Cash and cash equivalents                                                                            |                                                                      | $         | 283,367        |           |   | $         | 128,597    |          
|                                                                                                                      | Accounts receivable, net of allowance for
    doubtful accounts of $27,367 and $24,523, respectively |                                                                      |           | 237,944        |           |   |           | 218,258    |          
|                                                                                                                      | Inventory                                                                                            |                                                                      |           | 32,223         |           |   |           | 30,182     |          
|                                                                                                                      | Marketable securities                                                                                |                                                                      |           | 102,241        |           |   |           | 351        |          
|                                                                                                                      | Prepaid expenses and other current assets                                                            |                                                                      |           | 50,311         |           |   |           | 22,716     |          
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      |                                                                                                      | Total current assets                                                 |           |                | 706,086   |   |           |            | 400,104   |  
|Property and equipment, net of accumulated
    depreciation of $1,107,765 and $936,567, respectively                  |                                                                                                      |                                                                      | 976,407   |                |           |   | 914,499   |           
|Licensing costs and other intangible assets, net
    of accumulated amortization of $30,938 and $27,916, respectively |                                                                                                      |                                                                      | 1,228,131 |                |           |   | 1,192,130 |           
|Investments in and advances to unconsolidated
    affiliates                                                          |                                                                                                      |                                                                      | 8,716     |                |           |   | 9,353     |           
|Other assets                                                                                                          |                                                                                                      |                                                                      | 37,936    |                |           |   | 23,062    |           
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      |                                                                                                      | $                                                                    | 2,957,276 |                |           | $ | 2,539,148 |           
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                     
|LIABILITIES AND SHAREHOLDERS EQUITY
    (DEFICIENCY)                                                                
|Current liabilities:                                                                                                  |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      | Accounts payable                                                                                     |                                                                      | $         | 71,592         |           |   | $         | 101,118    |          
|                                                                                                                      | Accrued liabilities and other                                                                        |                                                                      |           | 258,050        |           |   |           | 203,835    |          
|                                                                                                                      | Construction accounts payable                                                                        |                                                                      |           | 50,248         |           |   |           | 31,061     |          
|                                                                                                                      | Current portion of long-term debt                                                                    |                                                                      |           | 150,504        |           |   |           | 47,318     |          
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      |                                                                                                      | Total current liabilities                                            |           |                | 530,394   |   |           |            | 383,332   |  
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|Long-term liabilities:                                                                                                |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      | Long-term debt, net of current portion                                                               |                                                                      |           | 2,092,417      |           |   |           | 2,172,893  |          
|                                                                                                                      | Deferred income taxes                                                                                |                                                                      |           | 174,103        |           |   |           | 150,977    |          
|                                                                                                                      | Other long-term liabilities                                                                          |                                                                      |           | 54,885         |           |   |           | 39,565     |          
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      |                                                                                                      | Total long-term liabilities                                          |           |                | 2,321,405 |   |           |            | 2,363,435 |  
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|Minority interests in consolidated subsidiaries                                                                       |                                                                                                      |                                                                      | 23,858    |                |           |   | 23,202    |           
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|Commitments and contingencies (Note 5)                                                                                |                                                                                                      |                                                                      |           |                |           |   |           |           
|Shareholders equity (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, 93,158,991 and 84,663,930 shares
    issued and outstanding |           |                |           |   |           |            |           |  
|                                                                                                                      |                                                                                                      | Class B, 6,792,323 and 6,792,721 shares
    issued and outstanding   |           |                | 1,105,004 |   |           |            | 899,304   |  
|                                                                                                                      | Deferred compensation                                                                                |                                                                      |           | (28            | )         |   |           | (112       | )        
|                                                                                                                      | Accumulated other comprehensive loss                                                                 |                                                                      |           | (7,638         | )         |   |           | (6,360     | )        
|                                                                                                                      | Deficit                                                                                              |                                                                      |           | (1,015,719     | )         |   |           | (1,123,653 | )        
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      |                                                                                                      | Total shareholders equity (deficiency)                              |           |                | 81,619    |   |           |            | (230,821  | )
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           
|                                                                                                                      |                                                                                                      | $                                                                    | 2,957,276 |                |           | $ | 2,539,148 |           
|                                                                                                                      |                                                                                                      |                                                                      |           |                |           |   |           |           

See accompanying notes to the condensed
consolidated financial statements

2



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##### Table of Contents






WESTERN WIRELESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)


(Dollars in thousands, except per share
data)


(Unaudited)


|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |          |           |  
|------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ------- | ----------------- | ------- | ---- | ------- | -------------- | ------- | - | ------- | --------- | --------- | - | ------- | -------- | --------- | -
|                                                                                                  |                                                                                                                             |                          |         |                  
|                                                                                                  |                                                                                                                             | Three Months Ended       |         | Nine Months Ended
|                                                                                                  |                                                                                                                             | September 30,            |         | September 30,    
|                                                                                                  |                                                                                                                             |                          |         |                  
|                                                                                                  |                                                                                                                             | 2004                     |         | 2003              |         | 2004 |         | 2003          
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |               
|                                                                                                  |                                                                                                                             |                          |         | (As restated     |         |      |         | (As restated 
|                                                                                                  |                                                                                                                             |                          |         | see Note 9)       |         |      |         | see Note 9)   
|Revenues:                                                                                         |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|                                                                                                  | Subscriber revenues                                                                                                         |                          | $       | 396,185           |         |      | $       | 292,081        |         |   | $       | 1,110,210 |           |   | $       | 789,308  |          
|                                                                                                  | Roamer revenues                                                                                                             |                          |         | 64,876            |         |      |         | 73,365         |         |   |         | 191,373   |           |   |         | 199,633  |          
|                                                                                                  | Fixed line revenues                                                                                                         |                          |         | 10,679            |         |      |         | 13,686         |         |   |         | 34,759    |           |   |         | 43,377   |          
|                                                                                                  | Equipment sales                                                                                                             |                          |         | 20,865            |         |      |         | 18,490         |         |   |         | 61,275    |           |   |         | 44,766   |          
|                                                                                                  | Other revenues                                                                                                              |                          |         | 4,842             |         |      |         | 3,703          |         |   |         | 11,816    |           |   |         | 10,647   |          
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|                                                                                                  |                                                                                                                             | Total revenues           |         |                   | 497,447 |      |         |                | 401,325 |   |         |           | 1,409,433 |   |         |          | 1,087,731 |  
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|Operating expenses:                                                                               |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|                                                                                                  | Cost of service (exclusive of depreciation,
    amortization and accretion included below)                                  |                          |         | 131,285           |         |      |         | 109,003        |         |   |         | 375,349   |           |   |         | 307,197  |          
|                                                                                                  | Cost of equipment sales                                                                                                     |                          |         | 46,459            |         |      |         | 41,528         |         |   |         | 137,467   |           |   |         | 111,313  |          
|                                                                                                  | General and administrative (exclusive of
    stock-based compensation, net of $4,810, $0, $11,330 and $0,
    respectively) |                          |         | 80,151            |         |      |         | 68,675         |         |   |         | 227,133   |           |   |         | 188,991  |          
|                                                                                                  | Sales and marketing                                                                                                         |                          |         | 66,841            |         |      |         | 52,249         |         |   |         | 190,445   |           |   |         | 150,564  |          
|                                                                                                  | Depreciation, amortization and accretion                                                                                    |                          |         | 69,363            |         |      |         | 71,374         |         |   |         | 191,560   |           |   |         | 209,693  |          
|                                                                                                  | Asset dispositions                                                                                                          |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         | 4,850    |          
|                                                                                                  | Stock-based compensation, net                                                                                               |                          |         | 4,810             |         |      |         |                |         |   |         | 11,330    |           |   |         |          |          
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|                                                                                                  |                                                                                                                             | Total operating expenses |         |                   | 398,909 |      |         |                | 342,829 |   |         |           | 1,133,284 |   |         |          | 972,608   |  
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|Other income (expense):                                                                           |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|                                                                                                  | Interest and financing expense, net                                                                                         |                          |         | (35,019           | )       |      |         | (43,221        | )       |   |         | (104,815  | )         |   |         | (119,139 | )        
|                                                                                                  | Loss on extinguishment of debt                                                                                              |                          |         |                   |         |      |         | (21,220        | )       |   |         | (16,260   | )         |   |         | (21,220  | )        
|                                                                                                  | Equity in net income of unconsolidated
    affiliates, net of tax                                                           |                          |         | 1,263             |         |      |         | 904            |         |   |         | 4,195     |           |   |         | 1,549    |          
|                                                                                                  | Gain on sale of Croatian joint venture                                                                                      |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         | 40,519   |          
|                                                                                                  | Realized loss on marketable securities                                                                                      |                          |         | (10,974           | )       |      |         | (3,766         | )       |   |         | (10,974   | )         |   |         | (3,890   | )        
|                                                                                                  | Realized gain (loss) on interest rate hedges                                                                                |                          |         | (2,668            | )       |      |         | 4,431          |         |   |         | 7,451     |           |   |         | 9,170    |          
|                                                                                                  | Other, net                                                                                                                  |                          |         | (1,996            | )       |      |         | (4,021         | )       |   |         | (3,096    | )         |   |         | (1,858   | )        
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|                                                                                                  |                                                                                                                             | Total other expense      |         |                   | (49,394 | )    |         |                | (66,893 | ) |         |           | (123,499  | ) |         |          | (94,869   | )
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|Minority interests in net (income) loss of
    consolidated subsidiaries                          |                                                                                                                             |                          | (3,093  | )                 |         |      | 135     |                |         |   | (7,711  | )         |           |   | 4,153   |         
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|Income (loss) before provision for income
    taxes and cumulative change in accounting principle |                                                                                                                             |                          | 46,051  |                   |         |      | (8,262  | )              |         |   | 144,939 |           |           |   | 24,407  |         
|Provision for income taxes                                                                        |                                                                                                                             |                          | (15,692 | )                 |         |      | (10,276 | )              |         |   | (37,005 | )         |           |   | (23,817 | )       
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|Income (loss) before cumulative change in
    accounting principle                                |                                                                                                                             |                          | 30,359  |                   |         |      | (18,538 | )              |         |   | 107,934 |           |           |   | 590     |         
|Cumulative change in accounting principle                                                         |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   | (2,231  | )       
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         
|                                                                                                  |                                                                                                                             | Net income(loss)         |         | $                 | 30,359  |      |         | $              | (18,538 | ) |         | $         | 107,934   |   |         | $        | (1,641    | )
|                                                                                                  |                                                                                                                             |                          |         |                   |         |      |         |                |         |   |         |           |           |   |         |         

3



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##### Table of Contents



WESTERN WIRELESS CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND

COMPREHENSIVE INCOME (LOSS) 
(Continued)


|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |        |       |       | 
|--------------------------------- | ------------------------------------------------------ | ---------------------------------- | --------------------------------------------------------- | ----------------- | ------ | ------ | ------- | -------------- | ----- | ----- | ------- | ------- | ------ | ------ | ------ | ------ | ----- | ----- | 
|                                  |                                                        |                                    |                                                           |                  
|                                  |                                                        | Three Months Ended                 |                                                           | Nine Months Ended
|                                  |                                                        | September 30,                      |                                                           | September 30,    
|                                  |                                                        |                                    |                                                           |                  
|                                  |                                                        | 2004                               |                                                           | 2003              |        | 2004   |         | 2003          
|                                  |                                                        |                                    |                                                           |                   |        |        |         |               
|                                  |                                                        |                                    |                                                           | (As restated     |        |        |         | (As restated 
|                                  |                                                        |                                    |                                                           | see Note 9)       |        |        |         | see Note 9)   
|Basic income (loss) per share:    |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|                                  | Before cumulative change in accounting principle       |                                    | $                                                         | 0.32              |        |        | $       | (0.23          | )     |       | $       | 1.16    |        |        | $      | 0.01   |      
|                                  | Cumulative change in accounting principle              |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        | (0.03  | )    
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|Basic income (loss) per share     |                                                        | $                                  | 0.32                                                      |                   |        | $      | (0.23   | )              |       | $     | 1.16    |         |        | $      | (0.02  | )     
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|Diluted income (loss) per share:  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|                                  | Before cumulative change in accounting principle       |                                    | $                                                         | 0.30              |        |        | $       | (0.23          | )     |       | $       | 1.09    |        |        | $      | 0.01   |      
|                                  | Cumulative change in accounting principle              |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        | (0.03  | )    
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|Diluted income (loss) per share   |                                                        | $                                  | 0.30                                                      |                   |        | $      | (0.23   | )              |       | $     | 1.09    |         |        | $      | (0.02  | )     
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|Comprehensive income (loss):      |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|                                  | Net income (loss)                                      |                                    | $                                                         | 30,359            |        |        | $       | (18,538        | )     |       | $       | 107,934 |        |        | $      | (1,641 | )    
|                                  | Unrealized income (loss) on marketable
    securities: |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |        |      
|                                  |                                                        | Reclassification adjustment        |                                                           |                   | 1,348  |        |         |                | 3,766 |       |         |         | 1,348  |        |        |        | 3,917 |      
|                                  |                                                        | Unrealized holding income(loss)    |                                                           |                   | (1,984 | )      |         |                | 548   |       |         |         | (2,913 | )      |        |        | 2,440 |      
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|                                  |                                                        |                                    | Net unrealized income (loss) on marketable
    securities |                   |        | (636   | )       |                |       | 4,314 |         |         |        | (1,565 | )      |        |       | 6,357 | 
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|                                  | Unrealized income (loss) on hedges:                    |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |        |      
|                                  |                                                        | Reclassification adjustment        |                                                           |                   | 302    |        |         |                |       |       |         |         | (458   | )      |        |        |       |      
|                                  |                                                        | Unrealized income (loss) on hedges |                                                           |                   | (4,754 | )      |         |                | 2,849 |       |         |         | 901    |        |        |        | 3,822 |      
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|                                  |                                                        |                                    | Net unrealized income (loss) on hedges                    |                   |        | (4,452 | )       |                |       | 2,849 |         |         |        | 443    |        |        |       | 3,822 | 
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|                                  | Foreign currency translation                           |                                    |                                                           | 2,658             |        |        |         | (58            | )     |       |         | (156    | )      |        |        | 1,707  |      
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       
|Total comprehensive income (loss) |                                                        | $                                  | 27,929                                                    |                   |        | $      | (11,433 | )              |       | $     | 106,656 |         |        | $      | 10,245 |       
|                                  |                                                        |                                    |                                                           |                   |        |        |         |                |       |       |         |         |        |        |        |       

See accompanying notes to the 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)


|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |          |         |          |  
|---------------------------------------------- | -------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | ------------------------------------------------------- | -------------- | ------- | -------- | ------- | -------- | ------- | -------- | -
|                                               |                                                                                              |                                                                                        
|                                               |                                                                                              | Nine Months Ended                                                                      
|                                               |                                                                                              | September 30,                                                                          
|                                               |                                                                                              |                                                                                        
|                                               |                                                                                              | 2004                                                                                    |                                                         | 2003          
|                                               |                                                                                              |                                                                                         |                                                         |               
|                                               |                                                                                              |                                                                                         |                                                         | (As restated 
|                                               |                                                                                              |                                                                                         |                                                         | see Note 9)   
|Operating activities:                          |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|                                               | Net income (loss)                                                                            |                                                                                         | $                                                       | 107,934        |         |          | $       | (1,641   | )      
|                                               | Adjustments to reconcile net income
    (loss) to net cash provided by operating activities: |                                                                                         |                                                         |                |         |          |         |          |        
|                                               |                                                                                              | Cumulative change in accounting principle                                               |                                                         |                |         |          |         |          | 2,231   |         
|                                               |                                                                                              | Stock-based compensation, net                                                           |                                                         |                | 11,330  |          |         |          |         |         
|                                               |                                                                                              | Gain on sale of Croatian joint venture                                                  |                                                         |                |         |          |         |          | (40,519 | )       
|                                               |                                                                                              | Realized loss on marketable securities                                                  |                                                         |                | 10,974  |          |         |          | 3,890   |         
|                                               |                                                                                              | Depreciation, amortization and accretion                                                |                                                         |                | 194,815 |          |         |          | 212,553 |         
|                                               |                                                                                              | Deferred income taxes                                                                   |                                                         |                | 23,126  |          |         |          | 21,520  |         
|                                               |                                                                                              | Asset dispositions                                                                      |                                                         |                |         |          |         |          | 4,850   |         
|                                               |                                                                                              | Equity in net loss of unconsolidated affiliates,
    net of cash distributions received |                                                         |                | 906     |          |         |          | 2,153   |         
|                                               |                                                                                              | Minority interests in net income (loss) of
    consolidated subsidiaries                |                                                         |                | 7,711   |          |         |          | (4,153  | )       
|                                               |                                                                                              | Realized gain on interest rate hedges                                                   |                                                         |                | (7,451  | )        |         |          | (9,170  | )       
|                                               |                                                                                              | Loss on extinguishment of debt                                                          |                                                         |                | 16,260  |          |         |          | 21,220  |         
|                                               |                                                                                              | Non-cash interest                                                                       |                                                         |                | 9,673   |          |         |          | 7,910   |         
|                                               |                                                                                              | Other, net                                                                              |                                                         |                | 4,001   |          |         |          | 5,700   |         
|                                               |                                                                                              | Changes in operating assets and liabilities                                             |                                                         |                | (33,562 | )        |         |          | 12,058  |         
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|                                               |                                                                                              |                                                                                         | Net cash provided by operating activities               |                |         | 345,717  |         |          |         | 238,602  |  
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|Investing activities:                          |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|                                               | Purchase of property and equipment                                                           |                                                                                         |                                                         | (231,841       | )       |          |         | (149,447 | )      
|                                               | Additions to licensing costs and other intangible
    assets                                 |                                                                                         |                                                         | (4,711         | )       |          |         | (747     | )      
|                                               | Proceeds from sale of Croatian joint venture                                                 |                                                                                         |                                                         |                |         |          |         | 69,630   |        
|                                               | Proceeds from asset disposition                                                              |                                                                                         |                                                         |                |         |          |         | 22,800   |        
|                                               | International credit facility collateralization                                              |                                                                                         |                                                         | (23,875        | )       |          |         | (522     | )      
|                                               | Purchases of minority interests                                                              |                                                                                         |                                                         | (33,143        | )       |          |         |          |        
|                                               | Purchases of marketable securities                                                           |                                                                                         |                                                         | (104,063       | )       |          |         |          |        
|                                               | Other, net                                                                                   |                                                                                         |                                                         | (106           | )       |          |         | (1,887   | )      
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|                                               |                                                                                              |                                                                                         | Net cash used in investing activities                   |                |         | (397,739 | )       |          |         | (60,173  | )
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|Financing activities:                          |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|                                               | Additions to long-term debt                                                                  |                                                                                         |                                                         | 1,314,668      |         |          |         | 739,504  |        
|                                               | Repayment of long-term debt                                                                  |                                                                                         |                                                         | (1,293,488     | )       |          |         | (840,225 | )      
|                                               | Premium on retirement of debt                                                                |                                                                                         |                                                         |                |         |          |         | (10,133  | )      
|                                               | Debt refinancing costs                                                                       |                                                                                         |                                                         | (12,636        | )       |          |         | (28,155  | )      
|                                               | Dividends paid to minority partners                                                          |                                                                                         |                                                         | (4,410         | )       |          |         |          |        
|                                               | Decrease in checks drawn in excess of deposits                                               |                                                                                         |                                                         |                |         |          |         | (13,576  | )      
|                                               | Issuance of common stock, net                                                                |                                                                                         |                                                         | 203,358        |         |          |         | 877      |        
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|                                               |                                                                                              |                                                                                         | Net cash provided by (used in) financing
    activities |                |         | 207,492  |         |          |         | (151,708 | )
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|Effect of exchange rate changes                |                                                                                              |                                                                                         | (700                                                    | )              |         |          | 4,093   |         
|Change in cash and cash equivalents            |                                                                                              |                                                                                         | 154,770                                                 |                |         |          | 30,814  |         
|Cash and cash equivalents, beginning of period |                                                                                              |                                                                                         | 128,597                                                 |                |         |          | 81,005  |         
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         
|Cash and cash equivalents, end of period       |                                                                                              | $                                                                                       | 283,367                                                 |                |         | $        | 111,819 |         
|                                               |                                                                                              |                                                                                         |                                                         |                |         |          |         |         

See accompanying notes to the condensed
consolidated financial statements

5



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##### Table of Contents



WESTERN WIRELESS CORPORATION



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




|   |              
|-- | -------------
|1. | Organization:

Western Wireless Corporation (Western
Wireless, the Company, we,
our and us) provides cellular
communications services in the United States principally through
the ownership and operation of cellular systems. We provide
cellular operations primarily in rural areas in 19 western
states under the CellularONE® and Western
Wireless® brand names.

We own approximately 98% of Western Wireless
International Holding Corporation (WWI). WWI,
through its consolidated subsidiaries and equity investments, is
a provider of wireless communications services in seven
countries. WWI owns controlling interests in six of these
countries; Slovenia, Austria, Ireland, Bolivia, Haiti and Ghana.
WWI also has a non-controlling interest in Georgia.

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, 2003 has been
derived from audited financial statements. The unaudited interim
condensed consolidated financial statements dated
September 30, 2004 and 2003 (as restated, see Note 9)
are presented herein, and reflect all normal and recurring
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 contained in the
Companys Form 10-K/A for the year ended
December 31, 2003.



|   |                                                
|-- | -----------------------------------------------
|2. | Summary of Significant Accounting
    Policies:



| |                   
| | ------------------
| | Reclassifications:

Certain amounts in prior years financial
statements have been reclassified to conform to the 2004
presentation.



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

The consolidated financial statements include the
accounts of the Company, its wholly-owned subsidiaries and its
affiliate investments in which we have a greater than 50%
interest. All affiliate investments in which we have a
non-controlling interest, but have significant influence, are
accounted for using the equity method. All significant
intercompany accounts and transactions have been eliminated. As
of September 30, 2004, we consolidate six of WWIs
operating entities; Slovenia, Austria, Ireland, Bolivia, Haiti
and Ghana.

U.S. headquarters functions of WWI and majority
owned European, South American and Caribbean consolidated
subsidiaries are recorded as of the date of the financial
statements. Our consolidated Ghanaian entity and our equity
investment in Georgia are presented on a one-quarter lag. We
believe presenting financial information on a one-quarter lag
for certain entities is necessary to provide adequate time to
convert the results into United States Generally Accepted
Accounting Principles (GAAP) and ensure quality and
accurate information to the users of our financial statements.



| |                                       
| | --------------------------------------
| | Indefinite Life Intangible
    Assets:

Our domestic Federal Communications Commission
(FCC) licenses are considered to be indefinite life
intangibles under Statement of Financial Accounting Standards
(SFAS) No. 142 Goodwill and Other
Intangible Assets (SFAS No. 142). Under
SFAS No. 142, indefinite life intangible assets are no
longer amortized for book purposes but rather are assessed
annually for impairment. During the third quarter of 2004, we
completed our annual impairment assessment of our indefinite
life intangible assets and determined that in aggregate they are
not impaired. In our annual impairment assessment, fair value
was determined using the

6



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

discounted present value of expected future cash
flows. 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.



| |                                      
| | -------------------------------------
| | Derivative Financial
    Instruments:

In January 2004, we entered into an interest rate
swap with a notional value of $200 million to hedge the
fair value of $200 million of our 9.250% Senior Notes due
July 2013 (2013 Notes). The interest rate swap
expires in July 2013 in conjunction with the maturity of the
2013 Notes. Semi-annually we will pay a floating rate of
interest equal to the six month LIBOR plus a fixed margin of
4.3975% and receive fixed rate payments of 9.25% in return.

The terms of the interest rate swap agreement and
the 2013 Notes are such that effectiveness can be measured using
the short-cut method defined in SFAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities (SFAS No. 133). This interest
rate swap agreement had no impact on our Condensed Consolidated
Statement of Operations and Comprehensive Income (Loss) for the
three and nine months ended September 30, 2004. The fair
value of the interest rate swap at September 30, 2004 was a
liability to us of $1.5 million with a corresponding amount
classified as a reduction to long-term debt in our Condensed
Consolidated Balance Sheets.

In May 2004, we canceled interest rate swaps with
an aggregate notional value of $200 million in conjunction
with the refinancing of our credit facility (see Note 4). As a
result of canceling these interest rate swaps, we recorded a
$3.2 million loss which is included in the loss on
extinguishment of debt on our Condensed Consolidated Statements
of Operations and Comprehensive Income (Loss). The
$3.2 million loss represents cash paid upon cancellation of
the swaps and is also included as a component of debt
refinancing costs in our Condensed Consolidated Statements of
Cash Flows.

The refinancing of our credit facility also
resulted in certain of our interest rate hedges no longer
qualifying for hedge accounting under SFAS No. 133.
Accordingly, the unrealized gain was reclassified from
unrealized gains on hedges to realized gains on hedges. As a
result of this reclassification, we recognized a gain of
$2.6 million for the nine months ended September 30,
2004, included in realized gain (loss) on interest rate
hedges on our Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss). Unrealized gains on hedges are
recorded by us as components of accumulated other comprehensive
loss and comprehensive income (loss) in our Condensed
Consolidated Balance Sheets and our Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss),
respectively.



| |                                    
| | -----------------------------------
| | Stock-Based Compensation
    Plans:

As permitted under SFAS No. 148,
Accounting for Stock-Based Compensation 
Transition and Disclosure, we have elected to continue to
follow the intrinsic value method under Accounting Principles
Board No. 25, Accounting for Stock Issued to
Employees, in accounting for our stock-based compensation
plans.

7



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table illustrates the effect on our
net income and basic and diluted income per share if we had
applied the fair value recognition provisions of SFAS
No. 123, Accounting for Stock-Based
Compensation, to our stock-based compensation plans:

|                                 |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |        |  
|-------------------------------- | ---------------------------------------------------------------------------------------------- | --------------------------------------------- | - | ----------------- | - | ---- | - | -------------- | - |  | - | ------- | - |  | - | ------ | -
|                                 |                                                                                                |                                               |   |                  
|                                 |                                                                                                | Three Months Ended                            |   | Nine Months Ended
|                                 |                                                                                                | September 30,                                 |   | September 30,    
|                                 |                                                                                                |                                               |   |                  
|                                 |                                                                                                | 2004                                          |   | 2003              |   | 2004 |   | 2003          
|                                 |                                                                                                |                                               |   |                   |   |      |   |               
|                                 |                                                                                                |                                              
|                                 |                                                                                                | (Dollars in thousands, except per share data)
|                                 |                                                                                                |                                               |   | (As restated     |   |      |   | (As restated 
|                                 |                                                                                                |                                               |   | see Note 9)       |   |      |   | see Note 9)   
|Net income (loss):               |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|                                 | As reported                                                                                    |                                               | $ | 30,359            |   |      | $ | (18,538        | ) |  | $ | 107,934 |   |  | $ | (1,641 | )
|                                 | Add: stock-based compensation expense included in
    reported net income                      |                                               |   | 4,810             |   |      |   |                |   |  |   | 11,330  |   |  |   |        |  
|                                 | Deduct: stock-based compensation expense
    determined under fair value method for all awards |                                               |   | (6,884            | ) |      |   | (1,417         | ) |  |   | (17,687 | ) |  |   | (3,971 | )
|                                 |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|                                 | Pro forma net income (loss)                                                                    |                                               | $ | 28,285            |   |      | $ | (19,955        | ) |  | $ | 101,577 |   |  | $ | (5,612 | )
|                                 |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|Basic income (loss) per share:   |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|                                 | As reported                                                                                    |                                               | $ | 0.32              |   |      | $ | (0.23          | ) |  | $ | 1.16    |   |  | $ | (0.02  | )
|                                 |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|                                 | Pro forma                                                                                      |                                               | $ | 0.30              |   |      | $ | (0.25          | ) |  | $ | 1.09    |   |  | $ | (0.07  | )
|                                 |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|Diluted income (loss) per share: |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|                                 | As reported                                                                                    |                                               | $ | 0.30              |   |      | $ | (0.23          | ) |  | $ | 1.09    |   |  | $ | (0.02  | )
|                                 |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       
|                                 | Pro forma                                                                                      |                                               | $ | 0.28              |   |      | $ | (0.25          | ) |  | $ | 1.03    |   |  | $ | (0.07  | )
|                                 |                                                                                                |                                               |   |                   |   |      |   |                |   |  |   |         |   |  |   |       

The fair value of each option grant is estimated
on the date of grant using the Black-Scholes option-pricing
model using the following weighted average assumptions:

|                                         |  |               |      |      |  |  |      |  
|---------------------------------------- |  | ------------- | ---- | ---- |  |  | ---- | -
|                                         |  |              
|                                         |  | Nine Months  
|                                         |  | Ended        
|                                         |  | September 30,
|                                         |  |              
|                                         |  | 2004          |      | 2003
|                                         |  |               |      |     
|Weighted average risk free interest rate |  |               | 4.1  | %    |  |  | 4.1  | %
|Expected dividend yield                  |  |               | 0.0  | %    |  |  | 0.0  | %
|Expected volatility                      |  |               | 75.0 | %    |  |  | 75.0 | %
|Expected lives (in years)                |  |               | 6.5  |      |  |  | 7.5  |  

The Black-Scholes option pricing model requires
the input of highly subjective assumptions and does not
necessarily provide a reliable measure of fair value.



| |                                          
| | -----------------------------------------
| | Recently Issued Accounting
    Standards:

In June 2004, the Emerging Issues Task Force
(EITF) reached a consensus on Issue No. 03-01
The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments (EITF
No. 03-01), addressing the meaning of
other-than-temporary impairment and its application to debt and
equity securities within the scope of SFAS No. 115
Accounting for Certain Investments in Debt and Equity
Securities. The consensus reached states that an
investment is impaired if the fair value of the investment is
less than its cost and should be assessed for impairment in each
reporting period. Additionally, an investment that is impaired
should be deemed other-than-temporarily impaired unless a number
of criteria are met.

8



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Disclosure provisions in EITF No. 03-01 are
effective for annual periods ending after December 15,
2003. In September 2004, the effective date of all other
provisions in EITF No. 03-01 were delayed. The adoption of
the disclosure provisions had no material effect on our
financial position or results of operations and we do not expect
the adoption of the remaining provisions to have a material
effect on our financial position or results of operations.
Comparative information is not required.



| |                 
| | ----------------
| | Stock Issuances:

In July 2004, we filed a Form S-3 as a shelf
registration statement (the Shelf Registration
Statement) with the SEC. Under the Shelf Registration
Statement, we may sell, from time to time, in one or more
offerings, shares of our Class A common stock, shares of
preferred stock or debt securities in an aggregate amount of up
to $500 million. In August 2004, we utilized a portion of
the Shelf Registration Statement to complete an equity offering
of eight million shares of Class A common stock for net
proceeds of approximately $200.8 million. We intend to use
the net proceeds for general corporate purposes, to fund working
capital requirements, for making capital expenditures and for
potential acquisitions.



|   |                       
|-- | ----------------------
|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:

|                               |                      |                        |        |              |  |   |      |     | 
|------------------------------ | -------------------- | ---------------------- | ------ | ------------ |  | - | ---- | --- | 
|                               |                      | September 30,          |        | December 31,
|                               |                      | 2004                   |        | 2003        
|                               |                      |                        |        |             
|                               |                      |                       
|                               |                      | (Dollars in thousands)
|Available-for-sale securities: |                      |                        |        |              |  |   |      |    
|                               | Aggregate fair value |                        | $      | 102,241      |  |   | $    | 351 | 
|                               | Historical cost      |                        |        | 104,106      |  |   |      | 651 | 
|                               |                      |                        |        |              |  |   |      |    
|Unrealized holding losses, net |                      | $                      | (1,865 | )            |  | $ | (300 | )  
|                               |                      |                        |        |              |  |   |      |    

Our net unrealized holding losses are included as
components of accumulated other comprehensive loss and
comprehensive income (loss) in our Condensed Consolidated
Balance Sheets and our Condensed Consolidated Statements of
Operations and Comprehensive Income (Loss), respectively.
Realized gains and losses are determined on the basis of
specific identification. For the three and nine months ended
September 30, 2004, we realized a loss of $11.0 million due
to an other-than-temporary impairment of our investments in
equity securities in the telecommunications industry.

9



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

4.     Long-Term
Debt:

|                                               |            |                        |           |              |  |   |           |         | 
|---------------------------------------------- | ---------- | ---------------------- | --------- | ------------ |  | - | --------- | ------- | 
|                                               |            | September 30,          |           | December 31,
|                                               |            | 2004                   |           | 2003        
|                                               |            |                        |           |             
|                                               |            |                       
|                                               |            | (Dollars in thousands)
|Credit Facility:                               |            |                        |           |              |  |   |           |        
|                                               | Revolvers  |                        |           |              |  |   | $         | 350,000 | 
|                                               | Term Loans |                        | $         | 1,191,937    |  |   |           | 822,000 | 
|9.250% Senior Notes Due 2013                   |            |                        | 600,000   |              |  |   | 600,000   |        
|4.625% Convertible Subordinated Notes Due 2023 |            |                        | 115,000   |              |  |   | 115,000   |        
|tele.ring Term Loan                            |            |                        | 197,287   |              |  |   | 200,753   |        
|Slovenian Credit Facility                      |            |                        | 67,632    |              |  |   | 69,438    |        
|Bolivian Bridge Loan                           |            |                        |           |              |  |   | 34,700    |        
|Bolivian Credit Facility                       |            |                        | 50,000    |              |  |   |           |        
|Other                                          |            |                        | 21,065    |              |  |   | 28,320    |        
|                                               |            |                        |           |              |  |   |           |        
|                                               |            |                        | 2,242,921 |              |  |   | 2,220,211 |        
|Less current portion                           |            |                        | (150,504  | )            |  |   | (47,318   | )      
|                                               |            |                        |           |              |  |   |           |        
|                                               |            | $                      | 2,092,417 |              |  | $ | 2,172,893 |        
|                                               |            |                        |           |              |  |   |           |        

The aggregate amounts of principal maturities as
of September 30, 2004 are as follows (dollars in thousands):

|                                      |            |   |           |           | 
|------------------------------------- | ---------- | - | --------- | --------- | 
|Three months ending December 31, 2004 |            | $ | 8,894     |          
|Year ending December 31,              |            |   |           |          
|                                      | 2005       |   |           | 156,506   | 
|                                      | 2006       |   |           | 199,408   | 
|                                      | 2007       |   |           | 69,847    | 
|                                      | 2008       |   |           | 83,027    | 
|                                      | Thereafter |   |           | 1,725,239 | 
|                                      |            |   |           |          
|                                      |            | $ | 2,242,921 |          
|                                      |            |   |           |          



| |                 
| | ----------------
| | Credit Facility:

At December 31, 2003, we had a
$1.55 billion credit facility with a consortium of lenders
(the Credit Facility) consisting of: (i) a
$350 million term loan; (ii) a $500 million term
loan; and (iii) two $350 million revolving loans.

On May 28, 2004 (the Agreement
Date), we refinanced the Credit Facility with a new credit
facility (the New Credit Facility). The aggregate
amount available under the New Credit Facility is
$1.50 billion consisting of: (i) a $225 million
term loan (Term Loan A); (ii) a
$975 million term loan (Term Loan B); and
(iii) a $300 million revolving loan (the
Revolving Credit Facility). Proceeds from the New
Credit Facility were used to repay $1.2 billion outstanding
under the Credit Facility. At September 30, 2004, the term
loans were fully drawn and we had $300 million available to
borrow under the Revolving Credit Facility. For the nine months
ended September 30, 2004, we recognized a
$16.3 million aggregate loss on the extinguishment of debt
related to the write-off of deferred financing costs and
cancellation of certain related interest rate swaps relating to
the refinancing of the Credit Facility.

10



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Under the terms of Term Loan A, we are required
to make quarterly payments on the outstanding principal
beginning September 30, 2004. These payments typically tend
to increase on the anniversary date of the initial payment,
until paid in full in May 2010. Under the terms of Term
Loan B, we are required to make small quarterly payments on
the outstanding principal balance beginning September 30,
2004, with the remainder of the balance being paid in four equal
quarterly payments starting September 30, 2010 and ending
in May 2011. Under the terms of the Revolving Credit Facility,
any outstanding principal balance is payable in full in May
2010. Principal payments required under the New Credit Facility
for the remainder of 2004 are $8.1 million.

The terms of the New Credit Facility contain
certain covenants which impose limitations on our operations and
activities, including, among other things, limitations on the
incurrence of indebtedness, the sale of assets, investments and
acquisitions, distribution of dividends or other distributions
and loans. Failure to comply with covenants would result in an
event of default and would allow the lenders to accelerate the
maturity. Subject to our leverage ratio at the time, the New
Credit Facility may require us to make mandatory prepayments
from proceeds of the issuance or incurrence of additional debt
after the Agreement Date and from excess cash flow beginning
with the fiscal year ended December 31, 2004. We are also
required to make prepayments from the proceeds of certain asset
dispositions. We estimate that we will be required to make a
prepayment from excess cash flow of approximately
$41 million in April 2005. Accordingly, this amount is
classified in the current portion of long-term debt on our
Condensed Consolidated Balance Sheet as of September 30,
2004. The New Credit Facility limits the amount we are permitted
to invest in our international subsidiaries to $250 million
through December 31, 2004 and $200 million thereafter (so
long as in each case $100 million is available under the
Revolving Credit Facility), plus certain other amounts received,
such as from the sale of stock of Western Wireless or the sale
of any WWI stock or assets, subject to certain conditions.
Currently we are able to invest over $300 million in our
international subsidiaries based on activity since the Agreement
Date. The New Credit Facility also limits payments of dividends
or other distributions to $200 million (so long as
$100 million is available under the Revolving Credit
Facility), subject to certain conditions. However, the New
Credit Facility allows for unlimited payments of dividends and
other distributions (so long as $100 million is available
under the Revolving Credit Facility) if our leverage ratio (as
defined in the agreement) is below a specified threshold.
Substantially all of our domestic assets are pledged as
collateral for the New Credit Facility.

Under the New Credit Facility, interest is
payable at an applicable margin in excess of a prevailing base
rate. The prevailing rate is based on the prime rate or the
Eurodollar rate. The applicable margin for the Revolving Credit
Facility and Term Loan A is determined quarterly based on
our leverage ratio and ranges from 1.75% to 2.50% for Eurodollar
advances and 0.75% to 1.50% for alternate base rate advances.
The applicable margin on Term Loan B is 3.00% for
Eurodollar advances and 2.00% for alternate base rate advances.
We typically borrow under the Eurodollar rate. The New Credit
Facility also provides for an annual fee ranging from 0.25% to
0.50% on any undrawn commitment under the Revolving Credit
Facility, payable quarterly.

The New Credit Facility requires us to enter into
interest rate hedge agreements to manage our interest rate
exposure under the New Credit Facility. At September 30,
2004, we had interest rate caps, swaps and collars hedging the
New Credit Facility with a total notional amount of
$1.0 billion. Generally, these instruments have initial
terms ranging from one to five years and effectively convert
variable rate debt to fixed rate.



| |                     
| | --------------------
| | tele.ring Term Loan:

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 an unsecured term loan
(the tele.ring Term Loan). In October 2004,
tele.ring received a letter from Vodafone alleging that

11



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

tele.ring breached certain of its obligations
under the tele.ring Term Loan. In the letter, Vodafone is also
alleging that it has the right to accelerate the maturity of the
loan and cause it to become immediately due and payable.
Vodafone and tele.ring have agreed to utilize the dispute
resolution procedures in the tele.ring Term Loan to resolve this
claim. tele.ring believes that this claim is without merit and
is contesting this claim vigorously. As a result, we have
continued to classify the portion of the tele.ring Term Loan due
after September 30, 2005, and accrued interest, of
$142.9 million as long-term debt.



| |                          
| | -------------------------
| | Bolivian Credit Facility:

In May 2004, NuevaTel S.A.
(NuevaTel), a subsidiary of WWI, finalized the terms
of a credit facility agreement (the Bolivian Credit
Facility) with the Overseas Private Investment Corporation
(OPIC). The entire commitment of $50 million
was drawn in one tranche, of which $34.7 million was
utilized to repay the principal amount of NuevaTels bridge
loan. The remaining Bolivian Credit Facility proceeds will
provide funding for the expansion of NuevaTels network in
Bolivia. Under the terms of the Bolivian Credit Facility, all
outstanding principal is required to be repaid in predetermined
quarterly installments beginning on July 15, 2006 and
ending on April 15, 2014. Interest will accrue at 8.74% per
annum and is required to be paid on a quarterly basis.

The Bolivian Credit Facility contains certain
restrictive covenants, including a debt service coverage ratio
which does not become effective until the third quarter of 2006.
Other covenants include, among other things, limitations on
NuevaTels ability to incur additional indebtedness, make
certain asset dispositions, make restricted payments and enter
into certain mergers, sales or combinations. Substantially all
of NuevaTels assets are pledged as collateral for the
Bolivian Credit Facility. Western Wireless International
Corporation (WWIC), a subsidiary of WWI, has pledged
its shares in NuevaTel to OPIC as security for the Bolivian
Credit Facility and has entered into a sponsor support agreement
with OPIC pursuant to which WWIC has a maximum obligation to
OPIC of $11.6 million. WWIC has secured this obligation by
providing a letter of credit in favor of OPIC, secured by cash
collateral of $11.6 million.

At September 30, 2004, the outstanding
amount of principal and interest under the Bolivian Credit
Facility was $50.0 million and $0.9 million,
respectively, and the facility was fully drawn.

5.     Commitments
and Contingencies:



| |                      
| | ---------------------
| | Purchase Commitments:

In September 2004, tele.ring entered into a
contract with Alcatel Austria AG for equipment related to the
buildout of its Universal Mobile Telecommunications System
network in accordance with its licensing requirements. Under the
contract, tele.ring has a minimum purchase obligation of
approximately $30.0 million to be fulfilled by 2006.



| |                             
| | ----------------------------
| | International Contingencies:



| |       
| | ------
| | Haiti:

In accordance with the Rights Agreements entered
into in September 1998 by a wholly-owned subsidiary of WWI with
two of the shareholders of Communication Cellulaire d
Haiti, S.A. (COMCEL), WWIs Haitian subsidiary,
these two minority shareholders had the right to elect that
WWIs wholly-owned subsidiary purchase all of their shares
at fair market value, as defined in the agreements, within the
30 day period after COMCELs issuance of its
December 31, 2003 financial statements. The 30 day
period expired in April 2004, and the two minority shareholders
elected not to exercise their purchase option.

In February 2004, rebels in opposition to
President Jean-Bertrand Aristide gained control of several of
Haitis key cities ultimately resulting in Aristides
resignation. In March 2004, a multinational peacekeeping

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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

force, including U.S. Marines, arrived in
Haiti to secure key areas and restore order in the country.
COMCELs network remained operational during this period of
civil unrest with the exception of temporary interruption in
communications services to some parts of the country.
COMCELs operations were back to normal throughout the
second and third quarters of 2004.

In October 2004, new violence was initiated by
supporters of exiled President Jean-Bertrand Aristide targeting
the general public in Port-Au-Prince. COMCELs network
remains operational during this period of civil unrest but our
retail facilities in the affected areas of the capital continue
to experience intermittent closures. We are unsure what the
long-term effects of the recent unrest in Haiti will have on our
Haitian business, if any.



| |       
| | ------
| | Ghana:

Under the terms of the Ghana license, Western
Telesystems Ghana Ltd. (Westel) was required to meet
certain customer levels and buildout requirements by February
2002. Westel was unable to meet the required customer levels due
to the inability of the regulator to provide spectrum and
enforce interconnection with the incumbent telephone company,
and all development has been suspended. The National
Communication Authority of Ghana (NCA) has assessed
a penalty claim of $71 million for not meeting these
buildout requirements. During the course of settlement
negotiations, the Government of Ghana (GoG) has
proposed reducing the fine to $25 million. Westel has
contested this fine on the basis that the government and the NCA
failed to deliver the key commitments of spectrum and
interconnection. We do not believe the enforcement of these
penalties is probable, but there can be no assurance to that
effect. If we are unable to reach an agreement with the GoG, we
may be required to impair our investment in Westel. As such,
this asset is evaluated for impairment on an ongoing basis.

In September 2004, WWI filed an expropriation
claim against the GoG. WWI is seeking $152 million as
compensation for the expropriation, by reason of failure to
allocate spectrum, of WWIs investment in Westel by the GoG
acting primarily through the Ministry of Communications and the
NCA. WWCs net investment in Westel at September 30,
2004 was approximately $4.9 million.



| |          
| | ---------
| | Slovenia:

In Slovenia, our largest competitor, the
state-owned telephone company which has a market share of
approximately 75%, charges its customers an exceptionally high
tariff to call the customers of other networks, including our
Slovenian operating company, Western Wireless International
d.o.o. (Vega). As a result, potential customers may
find subscribing to Vegas service unattractive since it
will be prohibitively expensive for most Slovenians to call
them. We believe these pricing practices are anticompetitive and
violate the laws of Slovenia and the European Union, including
Articles 5 and 10 of the Slovenian Prevention of the
Restriction of Competition, Articles 75 and 77 of the
Slovenian Telecommunications Act, and Article 82 of the EC
Treaty to the European Commission. We have previously filed
claims with Slovenias National Telecommunications
Regulatory Authority and Competition Protection Office and
continue to actively pursue several other avenues to bring about
regulatory relief, some of which may include legal action. We
have served a demand for compensation on the government of
Slovenia in the amount 174 million euro for damages arising
from the governments failure to regulate this market, as
well as demanding immediate correction of the anti-competitive
behavior of the state-owned operator. If there is no response to
this demand we expect to file a lawsuit in the courts of
Slovenia with uncertainty as to the outcome and timing thereof.
If regulatory or legal relief is not obtained or there is an
extended delay before regulatory relief is obtained such that
our estimates of our future cash flows would change, we may be
required to impair our investment in our Slovenian operating
company. As such, we assess the situation in Slovenia on an
ongoing basis to determine whether there have been any changes
in facts or circumstances which may require us to perform an
impairment analysis pursuant to SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets

13



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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(SFAS No. 144), which requires
recognition of an impairment loss if the carrying amount of a
long-lived asset or group of long-lived assets exceeds the
undiscounted cash flows associated with the asset or asset
group. Pursuant to SFAS No. 144, we have conducted an
impairment analysis of the long-lived assets in our Slovenian
operating company as of September 30, 2004, and believe
that no impairment loss is required as the carrying amount of
these long-lived assets did not exceed the estimated
undiscounted future cash flows associated with these assets. In
performing our impairment analysis, we considered the likelihood
and timing of regulatory relief and the related impacts on
subscriber growth and capital expenditures. We believe with
Slovenias entry into the European Union, regulatory relief
is likely. At September 30, 2004, the long-lived assets in
our Slovenian operating company had a net book value of
approximately $89 million, of which, approximately 75%
represents property and equipment, with the remaining
approximately 25% representing licensing costs and other
intangible assets.

6.     Income (Loss)
Per Common Share:

SFAS 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 and convertible debt using the
treasury stock method or the if
converted method, as applicable.

In net income periods, certain options remain
anti-dilutive because the option exercise price is above the
average market price of our outstanding shares for the period.
For the nine months ended September 30, 2004 and 2003,
weighted average shares issuable upon the exercise of stock
options, which were not included in the calculation because they
were anti-dilutive, were 748,000 and 799,000 respectively. For
the three months ended September 30, 2004 and 2003,
weighted average shares issuable upon the exercise of stock
options, which were not included in the calculation because they
were anti-dilutive, were 727,000 and 2,775,000 respectively.
Weighted average shares issuable upon the assumed conversion of
the 4.625% Convertible Subordinated Notes due 2023 (2023
Notes), which were excluded from the calculation of
diluted earnings per common share for the three and nine months
ended September 30, 2003, because they were anti-dilutive,
were 7,440,000 and 3,053,000, respectively. Stock option
exercises and the conversion of all or a portion of the 2023
Notes could potentially dilute basic income per share in the
future.

14



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table sets forth the computation of
basic and diluted income per share:

|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |            |     | 
|----------------------------------------- | ----------------------------------------------------------------------------- | --------------------------------------------------------------------------- | - | ----------------- | ------ | ---- | - | ----------- | ------- | - | - | ----------- | ------- |  | - | ---------- | --- | 
|                                          |                                                                               |                                                                             |   |                  
|                                          |                                                                               | Three Months Ended                                                          |   | Nine Months Ended
|                                          |                                                                               | September 30,                                                               |   | September 30,    
|                                          |                                                                               |                                                                             |   |                  
|                                          |                                                                               | 2004                                                                        |   | 2003              |        | 2004 |   | 2003       
|                                          |                                                                               |                                                                             |   |                   |        |      |   |            
|                                          |                                                                               |                                                                            
|                                          |                                                                               | (Dollars in thousands, except for per share data)                          
|                                          |                                                                               |                                                                             |   | (As               |        |      |   | (As        
|                                          |                                                                               |                                                                             |   | restated         |        |      |   | restated  
|                                          |                                                                               |                                                                             |   | see Note 9)       |        |      |   | see Note 9)
|Basic income per share computation:       |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|Numerator:                                |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Income (loss) before cumulative change in
    accounting principle            |                                                                             | $ | 30,359            |        |      | $ | (18,538     | )       |   | $ | 107,934     |         |  | $ | 590        |    
|                                          | Cumulative change in accounting principle                                     |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   | (2,231     | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Net income (loss)  basic                                                     |                                                                             | $ | 30,359            |        |      | $ | (18,538     | )       |   | $ | 107,934     |         |  | $ | (1,641     | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|Denominator:                              |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Weighted average common shares outstanding                                    |                                                                             |   | 94,982,000        |        |      |   | 79,313,000  |         |   |   | 92,863,000  |         |  |   | 79,266,000 |    
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|Basic income (loss) per share:            |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Before cumulative change in accounting principle                              |                                                                             | $ | 0.32              |        |      | $ | (0.23       | )       |   | $ | 1.16        |         |  | $ | 0.01       |    
|                                          | Cumulative change in accounting principle                                     |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   | (0.03      | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Basic income (loss) per share                                                 |                                                                             | $ | 0.32              |        |      | $ | (0.23       | )       |   | $ | 1.16        |         |  | $ | (0.02      | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|Diluted income per share
    computation: |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|Numerator:                                |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Income (loss) before cumulative change in
    accounting principle            |                                                                             | $ | 30,359            |        |      | $ | (18,538     | )       |   | $ | 107,934     |         |  | $ | 590        |    
|                                          | Add back interest and financing expense on
    convertible subordinated notes |                                                                             |   | 1,376             |        |      |   |             |         |   |   | 4,131       |         |  |   |            |    
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          |                                                                               | Adjusted income (loss) before cumulative
    change in accounting principle |   |                   | 31,735 |      |   |             | (18,538 | ) |   |             | 112,065 |  |   |            | 590 | 
|                                          | Cumulative change in accounting principle                                     |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   | (2,231     | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Adjusted net income (loss)                                                    |                                                                             | $ | 31,735            |        |      | $ | (18,538     | )       |   | $ | 112,065     |         |  | $ | (1,641     | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|Denominator:                              |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Weighted average common shares outstanding                                    |                                                                             |   | 94,982,000        |        |      |   | 79,313,000  |         |   |   | 92,863,000  |         |  |   | 79,266,000 |    
|                                          | Assumed exercise of stock options                                             |                                                                             |   | 2,231,000         |        |      |   |             |         |   |   | 2,257,000   |         |  |   | 1,221,000  |    
|                                          | Assumed exercise of convertible subordinated notes                            |                                                                             |   | 7,440,000         |        |      |   |             |         |   |   | 7,440,000   |         |  |   |            |    
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Diluted weighted average share outstanding                                    |                                                                             |   | 104,653,000       |        |      |   | 79,313,000  |         |   |   | 102,560,000 |         |  |   | 80,487,000 |    
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|Diluted income (loss) per share:          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Before cumulative change in accounting principle                              |                                                                             | $ | 0.30              |        |      | $ | (0.23       | )       |   | $ | 1.09        |         |  | $ | 0.01       |    
|                                          | Cumulative change in accounting principle                                     |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   | (0.03      | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           
|                                          | Diluted income (loss) per share                                               |                                                                             | $ | 0.30              |        |      | $ | (0.23       | )       |   | $ | 1.09        |         |  | $ | (0.02      | )  
|                                          |                                                                               |                                                                             |   |                   |        |      |   |             |         |   |   |             |         |  |   |           

15



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

7.     Acquisitions,
Dispositions and Discontinued Operations:



| |                           
| | --------------------------
| | PCS Licenses Acquisitions:

In May 2003, we entered into an agreement with
T-Mobile USA, Inc (TMO) under which we purchased,
for a nominal amount of cash, certain domestic personal
communications services (PCS) licenses and agreed to
provide discounted Global System for Mobile Communications
(GSM) roaming services through 2013. During 2003 and
the first six months of 2004, we completed buildout commitments
and received Federal Communications Commission (FCC)
approval for the transfer of the first 5 MHz of these licenses.

In September 2004, we completed our remaining
buildout commitments with TMO and received an incremental 5 MHz
of PCS licenses in some of the same markets as the initial 5 MHz
acquired in 2003. The incremental acquired licenses and related
microwave clearing costs were recorded at their fair value of
$13.9 million. In aggregate, we have recorded licenses and
related microwave clearing costs of $41.3 million
associated with the acquisition of the TMO licenses. In
addition, we recorded deferred revenues which will be amortized
through 2013 with the related GSM minutes of use.

In August 2004, we purchased from WirelessCo,
L.P. (Sprint PCS), for a nominal amount of cash,
certain domestic FCC licenses to expand our wireless network in
Montana. In conjunction with the license purchase, we have
agreed to provide roaming services and to meet certain buildout
commitments for Sprint PCS. Sprint PCS has agreed to prefer our
Montana network for its customers and to purchase wireless
service from us for resale to Qwest Wireless LLC through 2009.

In July 2004, we entered into purchase agreements
to purchase 10 MHz domestic PCS licenses in South Dakota, North
Dakota, Kansas and Minnesota along with cell sites and equipment
for $5.0 million. We closed on these licenses in October of
2004.



| |         
| | --------
| | Ireland:

In February 2004, WWI acquired an additional
17.87% ownership in Meteor, our Irish subsidiary, from two of
its partners for cash of approximately $30.2 million. As a
result of the transaction, WWI recorded $27.7 million in
additional license cost and a $2.5 million reduction of
minority interests in consolidated subsidiaries.

In July 2004, WWI acquired the remaining 1.17%
minority interest in Meteor from its minority partners for cash
of approximately $2.0 million. As a result of the
transaction, WWI recorded $2.0 million in additional
license costs. Meteor is now 100% owned by WWI.



| |         
| | --------
| | Austria:

In January 2004, WWI acquired an additional 0.25%
ownership of its Austrian subsidiary from an officer of the same
subsidiary for approximately $1.0 million. The acquisition
was in accordance with a put agreement entered into between the
subsidiary and the officer in the fourth quarter of 2001. The
officer still holds 0.25% ownership under the terms of the
agreement and retains a put on such interest.

8.     Operating
Segments and Related Information:

Operations of the Company are overseen by
domestic and international management teams each reporting to
the Chief Executive Officer of the Company. Our international
operations consist mainly of consolidated subsidiaries around
the world. Our Chief Executive Officer acts as our Chief
Operating Decision Maker and evaluates international operations
on a country by country basis. Accordingly, our reportable
operating segments include domestic operations, Austrian
operations, and all other international segments. The results of
Slovenia, Ireland, Bolivia, Ghana and Haiti are aggregated into
all other international as

16



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

provided for under SFAS No. 131
Disclosures about Segments of an Enterprise and Related
Information (SFAS No. 131) based on their
relative size along with having substantially similar
businesses. Certain allocations have been made between the
domestic and all other international segments reflecting certain
centralized back office costs and assets benefiting both
domestic and international operations. Adjusted EBITDA is the
measure of profitability utilized by our Chief Operating
Decision Maker and is presented herein in accordance with SFAS
No. 131.

Our domestic segment provides cellular services
in rural markets in the western United States. Our Austrian
segment provides both wireless and fixed line services in
Austria, while the all other international segment mainly
provides wireless services.

The table below summarizes financial results for
each segment:

|                                      |                                          |                        |   |            |  |                  |   |              |  |  |   |         |  |  |   |           | 
|------------------------------------- | ---------------------------------------- | ---------------------- | - | ---------- |  | ---------------- | - | ------------ |  |  | - | ------- |  |  | - | --------- | 
|                                      |                                          | Domestic               |   | Austrian   |  | All Other        |   |             
|                                      |                                          | Operations             |   | Operations |  | International(2) |   | Consolidated
|                                      |                                          |                        |   |            |  |                  |   |             
|                                      |                                          |                       
|                                      |                                          | (Dollars in thousands)
|Three months ended September 30, 2004 |                                          |                        |   |            |  |                  |   |              |  |  |   |         |  |  |   |          
|                                      | Total revenues                           |                        | $ | 276,069    |  |                  | $ | 152,017      |  |  | $ | 69,361  |  |  | $ | 497,447   | 
|                                      | Depreciation, amortization and accretion |                        |   | 44,001     |  |                  |   | 5,587        |  |  |   | 19,775  |  |  |   | 69,363    | 
|                                      | Interest and financing expense, net      |                        |   | 17,201     |  |                  |   | 2,443        |  |  |   | 15,375  |  |  |   | 35,019    | 
|                                      | Adjusted EBITDA(1)                       |                        |   | 114,883    |  |                  |   | 45,328       |  |  |   | 12,500  |  |  |   | 172,711   | 
|                                      | Total capital expenditures               |                        |   | 55,580     |  |                  |   | 9,849        |  |  |   | 26,936  |  |  |   | 92,365    | 
|Nine months ended September 30, 2004  |                                          |                        |   |            |  |                  |   |              |  |  |   |         |  |  |   |          
|                                      | Total revenues                           |                        | $ | 793,260    |  |                  | $ | 435,870      |  |  | $ | 180,303 |  |  | $ | 1,409,433 | 
|                                      | Depreciation, amortization and accretion |                        |   | 125,123    |  |                  |   | 14,436       |  |  |   | 52,001  |  |  |   | 191,560   | 
|                                      | Interest and financing expense, net      |                        |   | 55,603     |  |                  |   | 7,570        |  |  |   | 41,642  |  |  |   | 104,815   | 
|                                      | Adjusted EBITDA(1)                       |                        |   | 334,289    |  |                  |   | 119,529      |  |  |   | 25,221  |  |  |   | 479,039   | 
|                                      | Total capital expenditures               |                        |   | 150,296    |  |                  |   | 33,509       |  |  |   | 48,036  |  |  |   | 231,841   | 
|At September 30, 2004                 |                                          |                        |   |            |  |                  |   |              |  |  |   |         |  |  |   |          
|                                      | Total assets                             |                        | $ | 2,119,358  |  |                  | $ | 323,273      |  |  | $ | 514,645 |  |  | $ | 2,957,276 | 

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                      |                                          |                            |   |            |  |                  |   |              |  |  |   |         |   |  |   |           | 
|------------------------------------- | ---------------------------------------- | -------------------------- | - | ---------- |  | ---------------- | - | ------------ |  |  | - | ------- | - |  | - | --------- | 
|                                      |                                          | Domestic                   |   | Austrian   |  | All Other        |   |             
|                                      |                                          | Operations                 |   | Operations |  | International(2) |   | Consolidated
|                                      |                                          |                            |   |            |  |                  |   |             
|                                      |                                          |                           
|                                      |                                          | (Dollars in thousands)    
|                                      |                                          |                           
|                                      |                                          | (As restated  see Note 9)
|Three months ended September 30, 2003 |                                          |                            |   |            |  |                  |   |              |  |  |   |         |   |  |   |          
|                                      | Total revenues                           |                            | $ | 260,572    |  |                  | $ | 97,860       |  |  | $ | 42,893  |   |  | $ | 401,325   | 
|                                      | Depreciation, amortization and accretion |                            |   | 53,506     |  |                  |   | 2,829        |  |  |   | 15,039  |   |  |   | 71,374    | 
|                                      | Interest and financing expense, net      |                            |   | 28,801     |  |                  |   | 2,445        |  |  |   | 11,975  |   |  |   | 43,221    | 
|                                      | Adjusted EBITDA(1)                       |                            |   | 112,556    |  |                  |   | 14,259       |  |  |   | 3,055   |   |  |   | 129,870   | 
|                                      | Total capital expenditures               |                            |   | 37,737     |  |                  |   | 2,972        |  |  |   | 7,620   |   |  |   | 48,329    | 
|Nine months ended September 30, 2003  |                                          |                            |   |            |  |                  |   |              |  |  |   |         |   |  |   |          
|                                      | Total revenues                           |                            | $ | 721,826    |  |                  | $ | 253,864      |  |  | $ | 112,041 |   |  | $ | 1,087,731 | 
|                                      | Depreciation, amortization and accretion |                            |   | 158,255    |  |                  |   | 8,039        |  |  |   | 43,399  |   |  |   | 209,693   | 
|                                      | Asset dispositions                       |                            |   | 4,850      |  |                  |   |              |  |  |   |         |   |  |   | 4,850     | 
|                                      | Interest and financing expense, net      |                            |   | 74,833     |  |                  |   | 7,751        |  |  |   | 36,555  |   |  |   | 119,139   | 
|                                      | Adjusted EBITDA(1)                       |                            |   | 315,448    |  |                  |   | 19,768       |  |  |   | (5,550  | ) |  |   | 329,666   | 
|                                      | Total capital expenditures               |                            |   | 102,042    |  |                  |   | 20,615       |  |  |   | 26,790  |   |  |   | 149,447   | 
|At September 30, 2003                 |                                          |                            |   |            |  |                  |   |              |  |  |   |         |   |  |   |          
|                                      | Total assets                             |                            | $ | 1,775,941  |  |                  | $ | 201,034      |  |  | $ | 416,814 |   |  | $ | 2,393,789 | 

(1) Adjusted EBITDA:

EBITDA is a non-GAAP financial measure generally
defined as net income (loss) before interest, taxes,
depreciation and amortization. We use the non-GAAP financial
measure Adjusted EBITDA which further excludes the
following items: (i) accretion; (ii) asset
dispositions; (iii) stock-based compensation, net;
(iv) equity in net (income) loss of unconsolidated
affiliates, net of tax and other, net; (v) (gain) loss on
sale of joint venture; (vi) realized loss on marketable
securities; (vii) realized (gain) loss on interest rate
hedges; (viii) loss on extinguishment of debt;
(ix) minority interests in net (income) loss of
consolidated subsidiaries; (x) discontinued operations; and
(xi) cumulative change in accounting principle. Each of
these items is presented in our Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss).

Other companies in the wireless industry may
define Adjusted EBITDA in a different manner or present other
varying financial measures, and, accordingly, the Companys
presentation may not be comparable to other similarly titled
measures of other companies. The Companys calculation of
Adjusted EBITDA is also not directly comparable to EBIT
(earnings before interest and taxes) or EBITDA.

We view Adjusted EBITDA as an operating
performance measure and as such, believe that the GAAP financial
measure most directly comparable to Adjusted EBITDA is net
income (loss). We have presented Adjusted EBITDA because this
financial measure, in combination with other financial measures,
is an integral part of our internal reporting system utilized by
management to assess and evaluate the performance of our
business. Adjusted EBITDA is also considered a significant
performance measure. It is used by management as a measurement
of our success in obtaining, retaining and servicing customers
by reflecting our ability to generate subscriber revenue while
providing a high level of customer service in a cost effective
manner. The components of Adjusted EBITDA include the key
revenue and expense items for which our operating managers are
responsible and upon which we evaluate our performance.

Adjusted EBITDA is consistent with certain
financial measures used in our New Credit Facility and our 2013
Notes. Such financial measures are key components of several
negative covenants including, among

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

others, the limitation on incurrence of
indebtedness, the limitations on investments and acquisitions
and the limitation on distributions and dividends.

Adjusted EBITDA should not be construed as an
alternative to net income (loss), as determined in accordance
with GAAP, as an alternative to cash flows from operating
activities, as determined in accordance with GAAP, or as a
measure of liquidity. We believe Adjusted EBITDA is useful to
investors as a means to evaluate the Companys operating
performance prior to financing costs, deferred tax charges,
non-cash depreciation and amortization expense, and certain
other non-cash charges. Although Adjusted EBITDA may be defined
differently by other companies in the wireless industry, we
believe that Adjusted EBITDA provides some commonality of
measurement in analyzing operating performance of companies in
the wireless industry.

A reconciliation of net income (loss) to
Adjusted EBITDA is included in the following table:

|                   |                                                                                         |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |        | 
|------------------ | --------------------------------------------------------------------------------------- | ------------------------------------- | ------- | ---------- |  | ---------------- | ------ | ------------ |  | - | ------- | ------ | - | - | ------- | ------ | 
|                   |                                                                                         |                                      
|                   |                                                                                         | Three Months Ended September 30, 2004
|                   |                                                                                         |                                      
|                   |                                                                                         | Domestic                              |         | Austrian   |  | All Other        |        |             
|                   |                                                                                         | Operations                            |         | Operations |  | International(2) |        | Consolidated
|                   |                                                                                         |                                       |         |            |  |                  |        |             
|                   |                                                                                         |                                      
|                   |                                                                                         | (Dollars in thousands)               
|Net income (loss)  |                                                                                         | $                                     | 28,379  |            |  | $                | 36,261 |              |  | $ | (34,281 | )      |   | $ | 30,359  |       
|                   | Depreciation, amortization and accretion                                                |                                       |         | 44,001     |  |                  |        | 5,587        |  |   |         | 19,775 |   |   |         | 69,363 | 
|                   | Asset dispositions                                                                      |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |        | 
|                   | Stock-based compensation, net                                                           |                                       |         |            |  |                  |        |              |  |   |         | 4,810  |   |   |         | 4,810  | 
|                   | Interest and financing expense, net                                                     |                                       |         | 17,201     |  |                  |        | 2,443        |  |   |         | 15,375 |   |   |         | 35,019 | 
|                   | Equity in net (income) loss of
    unconsolidated affiliates, net of tax and other, net |                                       |         | 979        |  |                  |        | 1,036        |  |   |         | (1,282 | ) |   |         | 733    | 
|                   | (Gain) loss on sale of joint venture                                                    |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |        | 
|                   | Realized loss on marketable securities                                                  |                                       |         | 10,974     |  |                  |        |              |  |   |         |        |   |   |         | 10,974 | 
|                   | Realized (gain) loss on interest rate hedges                                            |                                       |         | 1,825      |  |                  |        |              |  |   |         | 843    |   |   |         | 2,668  | 
|                   | Loss on extinguishment of debt                                                          |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |        | 
|                   | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                       |         |            |  |                  |        |              |  |   |         | 3,093  |   |   |         | 3,093  | 
|                   | Provision for income taxes                                                              |                                       |         | 11,524     |  |                  |        | 1            |  |   |         | 4,167  |   |   |         | 15,692 | 
|                   | Discontinued operations                                                                 |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |        | 
|                   | Cumulative change in accounting principle                                               |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |        | 
|                   |                                                                                         |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA(1) |                                                                                         | $                                     | 114,883 |            |  | $                | 45,328 |              |  | $ | 12,500  |        |   | $ | 172,711 |       
|                   |                                                                                         |                                       |         |            |  |                  |        |              |  |   |         |        |   |   |         |       

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                   |                                                                                         |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |        |  
|------------------ | --------------------------------------------------------------------------------------- | ------------------------------------- | ------- | ---------- | - | ---------------- | ------ | ------------ |  | - | ------- | ------ | - | - | ------- | ------ | -
|                   |                                                                                         |                                      
|                   |                                                                                         | Three Months Ended September 30, 2003
|                   |                                                                                         |                                      
|                   |                                                                                         | Domestic                              |         | Austrian   |   | All Other        |        |             
|                   |                                                                                         | Operations                            |         | Operations |   | International(2) |        | Consolidated
|                   |                                                                                         |                                       |         |            |   |                  |        |             
|                   |                                                                                         |                                      
|                   |                                                                                         | (Dollars in thousands)               
|                   |                                                                                         | (As restated  see Note 9)           
|Net income (loss)  |                                                                                         | $                                     | 4,510   |            |   | $                | 7,825  |              |  | $ | (30,873 | )      |   | $ | (18,538 | )     
|                   | Depreciation, amortization and accretion                                                |                                       |         | 53,506     |   |                  |        | 2,829        |  |   |         | 15,039 |   |   |         | 71,374 |  
|                   | Asset dispositions                                                                      |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |        |  
|                   | Stock-based compensation, net                                                           |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |        |  
|                   | Interest and financing expense, net                                                     |                                       |         | 28,801     |   |                  |        | 2,445        |  |   |         | 11,975 |   |   |         | 43,221 |  
|                   | Equity in net (income) loss of
    unconsolidated affiliates, net of tax and other, net |                                       |         | (10        | ) |                  |        | 1,107        |  |   |         | 2,020  |   |   |         | 3,117  |  
|                   | (Gain) loss on sale of joint venture                                                    |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |        |  
|                   | Realized loss on marketable securities                                                  |                                       |         | 3,766      |   |                  |        |              |  |   |         |        |   |   |         | 3,766  |  
|                   | Realized (gain) loss on interest rate hedges                                            |                                       |         | (4,431     | ) |                  |        |              |  |   |         |        |   |   |         | (4,431 | )
|                   | Loss on extinguishment of debt                                                          |                                       |         | 16,910     |   |                  |        |              |  |   |         | 4,310  |   |   |         | 21,220 |  
|                   | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                       |         |            |   |                  |        |              |  |   |         | (135   | ) |   |         | (135   | )
|                   | Provision for income taxes                                                              |                                       |         | 9,504      |   |                  |        | 53           |  |   |         | 719    |   |   |         | 10,276 |  
|                   | Discontinued operations                                                                 |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |        |  
|                   | Cumulative change in accounting principle                                               |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |        |  
|                   |                                                                                         |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA(1) |                                                                                         | $                                     | 112,556 |            |   | $                | 14,259 |              |  | $ | 3,055   |        |   | $ | 129,870 |       
|                   |                                                                                         |                                       |         |            |   |                  |        |              |  |   |         |        |   |   |         |       

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                   |                                                                                         |                                      |         |            |   |                  |         |              |  |   |         |        |   |   |         |         |  
|------------------ | --------------------------------------------------------------------------------------- | ------------------------------------ | ------- | ---------- | - | ---------------- | ------- | ------------ |  | - | ------- | ------ | - | - | ------- | ------- | -
|                   |                                                                                         |                                     
|                   |                                                                                         | Nine Months Ended September 30, 2004
|                   |                                                                                         |                                     
|                   |                                                                                         | Domestic                             |         | Austrian   |   | All Other        |         |             
|                   |                                                                                         | Operations                           |         | Operations |   | International(2) |         | Consolidated
|                   |                                                                                         |                                      |         |            |   |                  |         |             
|                   |                                                                                         |                                     
|                   |                                                                                         | (Dollars in thousands)              
|Net income (loss)  |                                                                                         | $                                    | 109,010 |            |   | $                | 94,152  |              |  | $ | (95,228 | )      |   | $ | 107,934 |        
|                   | Depreciation, amortization and accretion                                                |                                      |         | 125,123    |   |                  |         | 14,436       |  |   |         | 52,001 |   |   |         | 191,560 |  
|                   | Asset dispositions                                                                      |                                      |         |            |   |                  |         |              |  |   |         |        |   |   |         |         |  
|                   | Stock-based compensation, net                                                           |                                      |         |            |   |                  |         | 228          |  |   |         | 11,102 |   |   |         | 11,330  |  
|                   | Interest and financing expense, net                                                     |                                      |         | 55,603     |   |                  |         | 7,570        |  |   |         | 41,642 |   |   |         | 104,815 |  
|                   | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                      |         | 1,027      |   |                  |         | 3,140        |  |   |         | (5,266 | ) |   |         | (1,099  | )
|                   | (Gain) loss on sale of joint venture                                                    |                                      |         |            |   |                  |         |              |  |   |         |        |   |   |         |         |  
|                   | Realized loss on marketable securities                                                  |                                      |         | 10,974     |   |                  |         |              |  |   |         |        |   |   |         | 10,974  |  
|                   | Realized (gain) loss on interest rate hedges                                            |                                      |         | (8,956     | ) |                  |         |              |  |   |         | 1,505  |   |   |         | (7,451  | )
|                   | Loss on extinguishment of debt                                                          |                                      |         | 16,260     |   |                  |         |              |  |   |         |        |   |   |         | 16,260  |  
|                   | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                      |         |            |   |                  |         |              |  |   |         | 7,711  |   |   |         | 7,711   |  
|                   | Provision for income taxes                                                              |                                      |         | 25,248     |   |                  |         | 3            |  |   |         | 11,754 |   |   |         | 37,005  |  
|                   | Discontinued operations                                                                 |                                      |         |            |   |                  |         |              |  |   |         |        |   |   |         |         |  
|                   | Cumulative change in accounting principle                                               |                                      |         |            |   |                  |         |              |  |   |         |        |   |   |         |         |  
|                   |                                                                                         |                                      |         |            |   |                  |         |              |  |   |         |        |   |   |         |        
|Adjusted EBITDA(1) |                                                                                         | $                                    | 334,289 |            |   | $                | 119,529 |              |  | $ | 25,221  |        |   | $ | 479,039 |        
|                   |                                                                                         |                                      |         |            |   |                  |         |              |  |   |         |        |   |   |         |        

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                   |                                                                                         |                                      |         |            |   |                  |        |              |  |   |         |         |   |   |         |         |  
|------------------ | --------------------------------------------------------------------------------------- | ------------------------------------ | ------- | ---------- | - | ---------------- | ------ | ------------ |  | - | ------- | ------- | - | - | ------- | ------- | -
|                   |                                                                                         |                                     
|                   |                                                                                         | Nine Months Ended September 30, 2003
|                   |                                                                                         |                                     
|                   |                                                                                         | Domestic                             |         | Austrian   |   | All Other        |        |             
|                   |                                                                                         | Operations                           |         | Operations |   | International(2) |        | Consolidated
|                   |                                                                                         |                                      |         |            |   |                  |        |             
|                   |                                                                                         |                                     
|                   |                                                                                         | (Dollars in thousands)              
|                   |                                                                                         | (As restated see Note 9)            
|Net income (loss)  |                                                                                         | $                                    | 41,344  |            |   | $                | (35    | )            |  | $ | (42,950 | )       |   | $ | (1,641  | )      
|                   | Depreciation, amortization and accretion                                                |                                      |         | 158,255    |   |                  |        | 8,039        |  |   |         | 43,399  |   |   |         | 209,693 |  
|                   | Asset dispositions                                                                      |                                      |         | 4,850      |   |                  |        |              |  |   |         |         |   |   |         | 4,850   |  
|                   | Stock-based compensation, net                                                           |                                      |         |            |   |                  |        |              |  |   |         |         |   |   |         |         |  
|                   | Interest and financing expense, net                                                     |                                      |         | 74,833     |   |                  |        | 7,751        |  |   |         | 36,555  |   |   |         | 119,139 |  
|                   | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                      |         | 253        |   |                  |        | 3,088        |  |   |         | (3,032  | ) |   |         | 309     |  
|                   | (Gain) loss on sale of joint venture                                                    |                                      |         | 1,574      |   |                  |        |              |  |   |         | (42,093 | ) |   |         | (40,519 | )
|                   | Realized loss on marketable securities                                                  |                                      |         | 3,890      |   |                  |        |              |  |   |         |         |   |   |         | 3,890   |  
|                   | Realized (gain) loss on interest rate hedges                                            |                                      |         | (9,170     | ) |                  |        |              |  |   |         |         |   |   |         | (9,170  | )
|                   | Loss on extinguishment of debt                                                          |                                      |         | 16,910     |   |                  |        |              |  |   |         | 4,310   |   |   |         | 21,220  |  
|                   | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                      |         |            |   |                  |        |              |  |   |         | (4,153  | ) |   |         | (4,153  | )
|                   | Provision for income taxes                                                              |                                      |         | 21,520     |   |                  |        | 155          |  |   |         | 2,142   |   |   |         | 23,817  |  
|                   | Discontinued operations                                                                 |                                      |         |            |   |                  |        |              |  |   |         |         |   |   |         |         |  
|                   | Cumulative change in accounting principle                                               |                                      |         | 1,189      |   |                  |        | 770          |  |   |         | 272     |   |   |         | 2,231   |  
|                   |                                                                                         |                                      |         |            |   |                  |        |              |  |   |         |         |   |   |         |        
|Adjusted EBITDA(1) |                                                                                         | $                                    | 315,448 |            |   | $                | 19,768 |              |  | $ | (5,550  | )       |   | $ | 329,666 |        
|                   |                                                                                         |                                      |         |            |   |                  |        |              |  |   |         |         |   |   |         |        

(2) Revenues and Long-Lived Assets by
Geographic Area:

Within the all other international segment,
revenues for the country of Ireland were $29.9 million and
$17.6 million for the three months ended September 30,
2004 and 2003, respectively, and $77.6 million and
$47.3 million for the nine months ended September 30,
2004 and 2003, respectively. Long-lived assets attributable to
operations in Ireland, which are primarily comprised of
property, plant, equipment and intangible assets, net of
accumulated depreciation and amortization, were
$166.5 million and $142.3 million at
September 30, 2004 and 2003, respectively.



|   |                                     
|-- | ------------------------------------
|9. | Restatement of Financial Statements:

During the preparation of our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2004, we
determined that the accounting for certain direct labor costs
associated with network construction in our international
operations required correction. Specifically, we determined that
certain of these costs which had originally been recorded as
operating expenses in prior periods should have been capitalized
and depreciated. If these corrections for prior periods were
made in the third quarter of 2004, the cumulative impact of
these corrections would have resulted in a material increase to
our net income for the third quarter of 2004. As a result, we
are restating our financial statements as of December 31,
2003 and 2002 and for each of the years in the three year period
ended December 31, 2003, reflecting adjustments to our
previously reported financial information filed on our Forms
10-K. We are also filing two Forms 10-Q/ A containing restated
financial information reflecting adjustments to our previously
reported financial information in our Forms 10-Q for the
quarters ended June 30 and March 31, 2004.

22



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The restated financial information summarized
below also reflects other corrections which individually, or
taken together, were not significant enough to necessitate a
restatement for the affected periods. These corrections include
adjustments for (i) the capitalization of interest costs
associated with certain of our international operations during
2001; (ii) the increase of cash and cash equivalents and
accounts payable, by the same amounts, in 2001 and 2002;
(iii) the reclassification to cash and cash equivalents of
certain cash which had been considered restricted and recorded
as prepaid expenses and other current assets in 2002;
(iv) the recognition in the fourth quarter of 2002 of an
incremental impairment (and the tax effects related thereto)
originally recorded in the first quarter of 2003 arising from
disposition of our Arizona 6 RSA; (v) the recognition of
interconnection and universal service fund revenue and related
expenses by certain of our international operations in the
fourth quarter of 2003 previously recognized in the first half
of 2004; (vi) the reclassification of a portion of
activation fee revenue from subscriber revenue to equipment
revenue in the third and fourth quarters of 2003; (vii) the
recognition and recording of withholding tax on certain
international management fee revenue in 2003 and 2002; and
(viii) the reclassification of non-cash charges related to
certain interest rate hedges from other comprehensive income to
other income in the fourth quarter of 2003 previously recognized
in the first quarter of 2004. These adjustments and
capitalization of the direct labor costs referenced above have
also resulted in adjustments to depreciation, amortization and
accretion expense; minority interests; foreign currency
translation; and the provision for income taxes.

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars
in thousands):


The following tables summarize the effects of
this restatement on our Condensed Consolidated Financial
Statements:

|                                                                                 |                                                                 |                              |           |               |           |   |           |            |           |  
|-------------------------------------------------------------------------------- | --------------------------------------------------------------- | ---------------------------- | --------- | ------------- | --------- | - | --------- | ---------- | --------- | -
|                                                                                 |                                                                 | December 31,                 |           | December 31, 
|                                                                                 |                                                                 | 2003                         |           | 2003         
|                                                                                 |                                                                 |                              |           |              
|                                                                                 |                                                                 | (As originally               |           | (As restated)
|                                                                                 |                                                                 | reported)                    |           |              
|ASSETS                                                                          
|Current assets:                                                                  |                                                                 |                              |           |               |           |   |           |           
|                                                                                 | Cash and cash equivalents                                       |                              | $         | 128,597       |           |   | $         | 128,597    |          
|                                                                                 | Accounts receivable, net of allowance for
    doubtful accounts |                              |           | 215,813       |           |   |           | 218,258    |          
|                                                                                 | Inventory                                                       |                              |           | 30,182        |           |   |           | 30,182     |          
|                                                                                 | Marketable securities                                           |                              |           | 351           |           |   |           | 351        |          
|                                                                                 | Prepaid expenses and other current assets                       |                              |           | 22,716        |           |   |           | 22,716     |          
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|                                                                                 |                                                                 | Total current assets         |           |               | 397,659   |   |           |            | 400,104   |  
|Property and equipment, net of accumulated
    depreciation                      |                                                                 |                              | 901,866   |               |           |   | 914,499   |           
|Licensing costs and other intangible assets, net
    of accumulated amortization |                                                                 |                              | 1,189,744 |               |           |   | 1,192,130 |           
|Investments in and advances to unconsolidated
    affiliates                     |                                                                 |                              | 9,353     |               |           |   | 9,353     |           
|Other assets                                                                     |                                                                 |                              | 23,062    |               |           |   | 23,062    |           
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|                                                                                 |                                                                 | $                            | 2,521,684 |               |           | $ | 2,539,148 |           
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|                                                                                
|LIABILITIES AND NET CAPITAL
    DEFICIENCY                                      
|Current liabilities:                                                             |                                                                 |                              |           |               |           |   |           |           
|                                                                                 | Accounts payable                                                |                              | $         | 100,651       |           |   | $         | 101,118    |          
|                                                                                 | Accrued liabilities and other                                   |                              |           | 203,753       |           |   |           | 203,835    |          
|                                                                                 | Construction accounts payable                                   |                              |           | 31,061        |           |   |           | 31,061     |          
|                                                                                 | Current portion of long-term debt                               |                              |           | 47,318        |           |   |           | 47,318     |          
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|                                                                                 |                                                                 | Total current liabilities    |           |               | 382,783   |   |           |            | 383,332   |  
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|Long-term liabilities:                                                           |                                                                 |                              |           |               |           |   |           |           
|                                                                                 | Long-term debt, net of current portion                          |                              |           | 2,172,893     |           |   |           | 2,172,893  |          
|                                                                                 | Deferred income taxes                                           |                              |           | 150,977       |           |   |           | 150,977    |          
|                                                                                 | Other long-term liabilities                                     |                              |           | 39,565        |           |   |           | 39,565     |          
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|                                                                                 |                                                                 | Total long-term liabilities  |           |               | 2,363,435 |   |           |            | 2,363,435 |  
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|Minority interests in consolidated subsidiaries                                  |                                                                 |                              | 22,083    |               |           |   | 23,202    |           
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|Commitments and contingencies                                                    |                                                                 |                              |           |               |           |   |           |           
|Net capital deficiency:                                                          |                                                                 |                              |           |               |           |   |           |           
|                                                                                 | Common stock, no par value                                      |                              |           | 899,304       |           |   |           | 899,304    |          
|                                                                                 | Deferred compensation                                           |                              |           | (112          | )         |   |           | (112       | )        
|                                                                                 | Accumulated other comprehensive loss                            |                              |           | (16,514       | )         |   |           | (6,360     | )        
|                                                                                 | Deficit                                                         |                              |           | (1,129,295    | )         |   |           | (1,123,653 | )        
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|                                                                                 |                                                                 | Total net capital deficiency |           |               | (246,617  | ) |           |            | (230,821  | )
|                                                                                 |                                                                 |                              |           |               |           |   |           |           
|                                                                                 |                                                                 | $                            | 2,521,684 |               |           | $ | 2,539,148 |           
|                                                                                 |                                                                 |                              |           |               |           |   |           |           

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE 
 INCOME (LOSS) (Dollars in thousands, except per share
data):

|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |          |           |  
|------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------ | ------- | ----------------- | ------- | -------------- | ------- | ------------- | ------- | - | ------- | -------- | --------- | - | ------- | -------- | --------- | -
|                                                                                                  |                                                                                            |                          |         |                  
|                                                                                                  |                                                                                            | Three Months Ended       |         | Nine Months Ended
|                                                                                                  |                                                                                            | September 30,            |         | September 30,    
|                                                                                                  |                                                                                            |                          |         |                  
|                                                                                                  |                                                                                            | 2003                     |         | 2003              |         | 2003           |         | 2003         
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |              
|                                                                                                  |                                                                                            | (As originally           |         | (As restated)     |         | (As originally |         | (As restated)
|                                                                                                  |                                                                                            | reported)                |         |                   |         | reported)      |         |              
|Revenues:                                                                                         |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|                                                                                                  | Subscriber revenues                                                                        |                          | $       | 294,397           |         |                | $       | 292,081       |         |   | $       | 791,624  |           |   | $       | 789,308  |          
|                                                                                                  | Roamer revenues                                                                            |                          |         | 73,365            |         |                |         | 73,365        |         |   |         | 199,633  |           |   |         | 199,633  |          
|                                                                                                  | Fixed line revenues                                                                        |                          |         | 13,686            |         |                |         | 13,686        |         |   |         | 43,377   |           |   |         | 43,377   |          
|                                                                                                  | Equipment sales                                                                            |                          |         | 16,174            |         |                |         | 18,490        |         |   |         | 42,450   |           |   |         | 44,766   |          
|                                                                                                  | Other revenues                                                                             |                          |         | 3,703             |         |                |         | 3,703         |         |   |         | 10,647   |           |   |         | 10,647   |          
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|                                                                                                  |                                                                                            | Total revenues           |         |                   | 401,325 |                |         |               | 401,325 |   |         |          | 1,087,731 |   |         |          | 1,087,731 |  
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|Operating expenses:                                                                               |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|                                                                                                  | Cost of service (exclusive of depreciation,
    amortization and accretion included below) |                          |         | 109,501           |         |                |         | 109,003       |         |   |         | 308,982  |           |   |         | 307,197  |          
|                                                                                                  | Cost of equipment sales                                                                    |                          |         | 41,528            |         |                |         | 41,528        |         |   |         | 111,313  |           |   |         | 111,313  |          
|                                                                                                  | General and administrative                                                                 |                          |         | 68,675            |         |                |         | 68,675        |         |   |         | 188,991  |           |   |         | 188,991  |          
|                                                                                                  | Sales and marketing                                                                        |                          |         | 52,249            |         |                |         | 52,249        |         |   |         | 150,564  |           |   |         | 150,564  |          
|                                                                                                  | Depreciation, amortization and accretion                                                   |                          |         | 70,889            |         |                |         | 71,374        |         |   |         | 208,312  |           |   |         | 209,693  |          
|                                                                                                  | Asset dispositions                                                                         |                          |         |                   |         |                |         |               |         |   |         | 7,640    |           |   |         | 4,850    |          
|                                                                                                  | Stock-based compensation, net                                                              |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |          |          
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|                                                                                                  |                                                                                            | Total operating expenses |         |                   | 342,842 |                |         |               | 342,829 |   |         |          | 975,802   |   |         |          | 972,608   |  
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|Other income (expense):                                                                           |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|                                                                                                  | Interest and financing expense, net                                                        |                          |         | (43,221           | )       |                |         | (43,221       | )       |   |         | (119,139 | )         |   |         | (119,139 | )        
|                                                                                                  | Loss on extinguishment of debt                                                             |                          |         | (21,220           | )       |                |         | (21,220       | )       |   |         | (21,220  | )         |   |         | (21,220  | )        
|                                                                                                  | Equity in net income of unconsolidated
    affiliates, net of tax                          |                          |         | 904               |         |                |         | 904           |         |   |         | 1,549    |           |   |         | 1,549    |          
|                                                                                                  | Gain on sale of Croatian joint venture                                                     |                          |         |                   |         |                |         |               |         |   |         | 40,519   |           |   |         | 40,519   |          
|                                                                                                  | Realized loss on marketable securities                                                     |                          |         | (3,766            | )       |                |         | (3,766        | )       |   |         | (3,890   | )         |   |         | (3,890   | )        
|                                                                                                  | Realized gain (loss) on interest rate hedges                                               |                          |         | 4,431             |         |                |         | 4,431         |         |   |         | 9,170    |           |   |         | 9,170    |          
|                                                                                                  | Other, net                                                                                 |                          |         | (4,021            | )       |                |         | (4,021        | )       |   |         | (1,858   | )         |   |         | (1,858   | )        
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|                                                                                                  |                                                                                            | Total other expense      |         |                   | (66,893 | )              |         |               | (66,893 | ) |         |          | (94,869   | ) |         |          | (94,869   | )
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|Minority interests in net (income) loss of
    consolidated subsidiaries                          |                                                                                            |                          | 153     |                   |         |                | 135     |               |         |   | 4,196   |          |           |   | 4,153   |         
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|Income (loss) before provision for income
    taxes and cumulative change in accounting principle |                                                                                            |                          | (8,257  | )                 |         |                | (8,262  | )             |         |   | 21,256  |          |           |   | 24,407  |         
|Provision for income taxes                                                                        |                                                                                            |                          | (10,212 | )                 |         |                | (10,276 | )             |         |   | (21,447 | )        |           |   | (23,817 | )       
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|Income (loss) before cumulative change in
    accounting principle                                |                                                                                            |                          | (18,469 | )                 |         |                | (18,538 | )             |         |   | (191    | )        |           |   | 590     |         
|Cumulative change in accounting principle                                                         |                                                                                            |                          |         |                   |         |                |         |               |         |   | (2,231  | )        |           |   | (2,231  | )       
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         
|                                                                                                  |                                                                                            | Net income(loss)         |         | $                 | (18,469 | )              |         | $             | (18,538 | ) |         | $        | (2,422    | ) |         | $        | (1,641    | )
|                                                                                                  |                                                                                            |                          |         |                   |         |                |         |               |         |   |         |          |           |   |         |         

25



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE

INCOME (LOSS)  (Continued)
(Dollars in thousands, except per share data):


|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |        |       |       | 
|--------------------------------- | ------------------------------------------------------ | ---------------------------------- | --------------------------------------------------------- | ----------------- | ----- | -------------- | ------- | ------------- | ----- | ----- | ----- | ------ | ----- | ----- | ------ | ------ | ----- | ----- | 
|                                  |                                                        |                                    |                                                           |                  
|                                  |                                                        | Three Months Ended                 |                                                           | Nine Months Ended
|                                  |                                                        | September 30,                      |                                                           | September 30,    
|                                  |                                                        |                                    |                                                           |                  
|                                  |                                                        | 2003                               |                                                           | 2003              |       | 2003           |         | 2003         
|                                  |                                                        |                                    |                                                           |                   |       |                |         |              
|                                  |                                                        | (As originally                     |                                                           | (As restated)     |       | (As originally |         | (As restated)
|                                  |                                                        | reported)                          |                                                           |                   |       | reported)      |         |              
|Basic income (loss) per share:    |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|                                  | Before cumulative change in accounting principle       |                                    | $                                                         | (0.23             | )     |                | $       | (0.23         | )     |       | $     | (0.00  | )     |       | $      | 0.01   |      
|                                  | Cumulative change in accounting principle              |                                    |                                                           |                   |       |                |         |               |       |       |       | (0.03  | )     |       |        | (0.03  | )    
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|Basic income (loss) per share     |                                                        | $                                  | (0.23                                                     | )                 |       | $              | (0.23   | )             |       |       | (0.03 | )      |       | $     | (0.02  | )     
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|Diluted income (loss) per share:  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|                                  | Before cumulative change in accounting principle       |                                    | $                                                         | (0.23             | )     |                | $       | (0.23         | )     |       | $     | (0.00  | )     |       | $      | 0.01   |      
|                                  | Cumulative change in accounting principle              |                                    |                                                           |                   |       |                |         |               |       |       |       | (0.03  | )     |       |        | (0.03  | )    
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|Diluted income (loss) per share   |                                                        | $                                  | (0.23                                                     | )                 |       | $              | (0.23   | )             |       |       | (0.03 | )      |       | $     | (0.02  | )     
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|Comprehensive income (loss):      |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|                                  | Net income (loss)                                      |                                    | $                                                         | (18,469           | )     |                | $       | (18,538       | )     |       | $     | (2,422 | )     |       | $      | (1,641 | )    
|                                  | Unrealized income (loss) on marketable
    securities: |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |        |      
|                                  |                                                        | Reclassification adjustment        |                                                           |                   | 3,766 |                |         |               | 3,766 |       |       |        | 3,917 |       |        |        | 3,917 |      
|                                  |                                                        | Unrealized holding income(loss)    |                                                           |                   | 548   |                |         |               | 548   |       |       |        | 2,440 |       |        |        | 2,440 |      
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|                                  |                                                        |                                    | Net unrealized income (loss) on marketable
    securities |                   |       | 4,314          |         |               |       | 4,314 |       |        |       | 6,357 |        |        |       | 6,357 | 
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|                                  | Unrealized income (loss) on hedges:                    |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |        |      
|                                  |                                                        | Reclassification adjustment        |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |        |       |      
|                                  |                                                        | Unrealized income (loss) on hedges |                                                           |                   | 2,849 |                |         |               | 2,849 |       |       |        | 3,822 |       |        |        | 3,822 |      
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|                                  |                                                        |                                    | Net unrealized income (loss) on hedges                    |                   |       | 2,849          |         |               |       | 2,849 |       |        |       | 3,822 |        |        |       | 3,822 | 
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|                                  | Foreign currency translation                           |                                    |                                                           | (148              | )     |                |         | (58           | )     |       |       | 800    |       |       |        | 1,707  |      
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       
|Total comprehensive income (loss) |                                                        | $                                  | (11,454                                                   | )                 |       | $              | (11,433 | )             |       | $     | 8,557 |        |       | $     | 10,245 |       
|                                  |                                                        |                                    |                                                           |                   |       |                |         |               |       |       |       |        |       |       |        |       

26



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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Dollars in thousands):

|                      |                                                                                              |                                                                                                  |                                                         |           |         |          |   |          |         |          |  
|--------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------- | --------- | ------- | -------- | - | -------- | ------- | -------- | -
|                      |                                                                                              |                                                                                                 
|                      |                                                                                              | Nine Months Ended                                                                               
|                      |                                                                                              | September 30,                                                                                   
|                      |                                                                                              |                                                                                                 
|                      |                                                                                              | 2003                                                                                             |                                                         | 2003     
|                      |                                                                                              |                                                                                                  |                                                         |          
|                      |                                                                                              | (As originally                                                                                   |                                                         | (As      
|                      |                                                                                              | reported)                                                                                        |                                                         | restated)
|Operating activities: |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|                      | Net income (loss)                                                                            |                                                                                                  | $                                                       | (2,422    | )       |          | $ | (1,641   | )      
|                      | Adjustments to reconcile net income
    (loss) to net cash provided by operating activities: |                                                                                                  |                                                         |           |         |          |   |          |        
|                      |                                                                                              | Cumulative change in accounting principle                                                        |                                                         |           | 2,231   |          |   |          | 2,231   |         
|                      |                                                                                              | Gain on sale of Croatian joint venture                                                           |                                                         |           | (40,519 | )        |   |          | (40,519 | )       
|                      |                                                                                              | Realized loss on marketable securities                                                           |                                                         |           | 3,890   |          |   |          | 3,890   |         
|                      |                                                                                              | Depreciation, amortization and accretion                                                         |                                                         |           | 211,166 |          |   |          | 212,553 |         
|                      |                                                                                              | Deferred income taxes                                                                            |                                                         |           | 19,349  |          |   |          | 21,520  |         
|                      |                                                                                              | Asset dispositions                                                                               |                                                         |           | 7,640   |          |   |          | 4,850   |         
|                      |                                                                                              | Equity in net (income) loss of unconsolidated
    affiliates, net of cash distributions received |                                                         |           | 2,153   |          |   |          | 2,153   |         
|                      |                                                                                              | Minority interests in net income (loss) of
    consolidated subsidiaries                         |                                                         |           | (4,196  | )        |   |          | (4,153  | )       
|                      |                                                                                              | Realized gain on interest rate hedges                                                            |                                                         |           | (9,170  | )        |   |          | (9,170  | )       
|                      |                                                                                              | Loss on extinguishment of debt                                                                   |                                                         |           | 21,220  |          |   |          | 21,220  |         
|                      |                                                                                              | Non-cash interest                                                                                |                                                         |           | 7,910   |          |   |          | 7,910   |         
|                      |                                                                                              | Other, net                                                                                       |                                                         |           | 5,700   |          |   |          | 5,700   |         
|                      |                                                                                              | Changes in operating assets and liabilities                                                      |                                                         |           | 21,609  |          |   |          | 12,058  |         
|                      |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|                      |                                                                                              |                                                                                                  | Net cash provided by operating activities               |           |         | 246,561  |   |          |         | 238,602  |  
|                      |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|Investing activities: |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|                      | Purchase of property and equipment                                                           |                                                                                                  |                                                         | (147,656  | )       |          |   | (149,447 | )      
|                      | Additions to licensing costs and other intangible
    assets                                 |                                                                                                  |                                                         | (5,497    | )       |          |   | (747     | )      
|                      | Proceeds from sale of Croatian joint venture                                                 |                                                                                                  |                                                         | 69,630    |         |          |   | 69,630   |        
|                      | Proceeds from asset disposition                                                              |                                                                                                  |                                                         | 22,800    |         |          |   | 22,800   |        
|                      | International credit facility collateralization                                              |                                                                                                  |                                                         | (522      | )       |          |   | (522     | )      
|                      | Other, net                                                                                   |                                                                                                  |                                                         | (1,887    | )       |          |   | (1,887   | )      
|                      |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|                      |                                                                                              |                                                                                                  | Net cash used in investing activities                   |           |         | (63,132  | ) |          |         | (60,173  | )
|                      |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|Financing activities: |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|                      | Additions to long-term debt                                                                  |                                                                                                  |                                                         | 739,504   |         |          |   | 739,504  |        
|                      | Repayment of long-term debt                                                                  |                                                                                                  |                                                         | (840,225  | )       |          |   | (840,225 | )      
|                      | Premium on retirement of debt                                                                |                                                                                                  |                                                         | (10,133   | )       |          |   | (10,133  | )      
|                      | Debt refinancing costs                                                                       |                                                                                                  |                                                         | (28,155   | )       |          |   | (28,155  | )      
|                      | Decrease in checks drawn in excess of deposits                                               |                                                                                                  |                                                         |           |         |          |   | (13,576  | )      
|                      | Issuance of common stock, net                                                                |                                                                                                  |                                                         | 877       |         |          |   | 877      |        
|                      |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         
|                      |                                                                                              |                                                                                                  | Net cash provided by (used in) financing
    activities |           |         | (138,132 | ) |          |         | (151,708 | )
|                      |                                                                                              |                                                                                                  |                                                         |           |         |          |   |         

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)
(Dollars in thousands):


|                                               |  |                   |         |           |  |   |         | 
|---------------------------------------------- |  | ----------------- | ------- | --------- |  | - | ------- | 
|                                               |  |                  
|                                               |  | Nine Months Ended
|                                               |  | September 30,    
|                                               |  |                  
|                                               |  | 2003              |         | 2003     
|                                               |  |                   |         |          
|                                               |  | (As originally    |         | (As      
|                                               |  | reported)         |         | restated)
|Effect of exchange rate changes                |  |                   | 4,093   |           |  |   | 4,093   | 
|Change in cash and cash equivalents            |  |                   | 49,390  |           |  |   | 30,814  | 
|Cash and cash equivalents, beginning of period |  |                   | 62,429  |           |  |   | 81,005  | 
|                                               |  |                   |         |           |  |   |         | 
|Cash and cash equivalents, end of period       |  | $                 | 111,819 |           |  | $ | 111,819 | 
|                                               |  |                   |         |           |  |   |         | 

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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 Securities
Litigation Reform Act of 1995.This
quarterly report on Form 10-Q, including Managements
Discussion and Analysis of Financial Condition and Results of
Operations, contains statements 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, which
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 all of which are difficult to
predict and many of which are beyond our control and which may
cause the actual results, events or developments to be
significantly 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, nationally,
internationally and in the regions and countries in which
Western Wireless Corporation operates; demographic changes;
technology changes; increased competition; changes in business
strategy or development plans; the high leverage of the Company
and our ability to access capital markets; the ability to
attract and retain qualified personnel; existing governmental
regulations and changes in, or the failure to comply with,
governmental regulations, including wireless number portability;
our ability to acquire and the cost of acquiring additional
spectrum licenses; product liability and other claims asserted
against the Company; and other factors included elsewhere in
this report, in the Companys filed public offering
prospectuses or its reports filed with the Securities and
Exchange Commission, including, without limitation, those
described under the caption, Risk Factors, contained
in our Annual Report on Form 10-K/ A for the year ended
December 31, 2003 and in our public offering
prospectuses.

Given these uncertainties, readers are
cautioned not to place undue reliance on such forward-looking
statements.The Company 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 of our
financial condition and results of operations is based upon our
condensed consolidated financial statements, which have been
prepared in accordance with United States Generally Accepted
Accounting Principles (GAAP). 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 Annual Report on
Form 10-K/A for the year ended December 31, 2003. The
preparation of financial statements in conformity with GAAP
requires us to make estimates and assumptions that affect the
reported amounts of assets, liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting periods. On an on-going basis, we evaluate
our estimates. We base our estimates on historical experience
and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form
the basis for making assumptions about the carrying values of
assets and liabilities that are not readily apparent from other
sources. Actual results could differ from these estimates.

During the preparation of our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2004, we
determined that the accounting for certain direct labor costs
associated with network construction in our international
operations required correction. Specifically, we determined that
certain of these costs which had originally been recorded as
operating expenses in prior periods should have been capitalized
and depreciated. If these corrections for prior periods were
made in the third quarter of 2004, the cumulative impact of
these corrections would have resulted in a material increase to
our net income for the third quarter of 2004. As a result, we
are restating our financial statements as of December 31,
2003 and 2002 and for each of the years in the three year period
ended December 31, 2003, reflecting adjustments to our
previously reported financial information filed on our Forms
10-K. We are also filing two Forms 10-Q/ A containing restated
financial information reflecting adjustments to our previously
reported financial information in our Forms 10-Q for the
quarters ended June 30 and March 31, 2004.

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The restated financial information summarized
below also reflects other corrections which individually, or
taken together, were not significant enough to necessitate a
restatement for the affected periods. These corrections include
adjustments for (i) the capitalization of interest costs
associated with certain of our international operations during
2001; (ii) the increase of cash and cash equivalents and
accounts payable, by the same amounts, in 2001 and 2002;
(iii) the reclassification to cash and cash equivalents of
certain cash which had been considered restricted and recorded
as prepaid expenses and other current assets in 2002;
(iv) the recognition in the fourth quarter of 2002 of an
incremental impairment (and the tax effects related thereto)
originally recorded in the first quarter of 2003 arising from
disposition of our Arizona 6 RSA; (v) the recognition of
interconnection and universal service fund revenue and related
expenses by certain of our international operations in the
fourth quarter of 2003 previously recognized in the first half
of 2004; (vi) the reclassification of a portion of
activation fee revenue from subscriber revenue to equipment
revenue in the third and fourth quarters of 2003; (vii) the
recognition and recording of withholding tax on certain
international management fee revenue in 2003 and 2002; and
(viii) the reclassification of non-cash charges related to
certain interest rate hedges from other comprehensive income to
other income in the fourth quarter of 2003 previously recognized
in the first quarter of 2004. These adjustments and
capitalization of the direct labor costs referenced above have
also resulted in adjustments to depreciation, amortization and
accretion expense; minority interests; foreign currency
translation; and the provision for income taxes.

This Managements Discussion and Analysis of
Financial Condition and Results of Operations reflects the
effects of these restatements for the three and nine months
ended September 30, 2003.

Overview

We provide cellular communications services in 19
western states under the CellularONE® and Western
Wireless® brand names principally through the ownership and
operation of cellular wireless systems. Our domestic operations
are primarily in rural areas due to our belief that there are
certain strategic advantages to operating in these areas.
Additionally, we own personal communications services
(PCS) licenses in 18 western states which we
primarily use to support our roaming partners.

A significant portion of our domestic revenues
have historically been derived from roaming. Our network
includes the four major technologies currently available in the
U.S. These technologies include analog and three digital
standards: Time Division Multiple Access (TDMA);
Code Division Multiple Access (CDMA); and Global
System for Mobile Communications (GSM). All of the
digital technologies employed by us allow for enhanced capacity
and data services.

We own approximately 98% of Western Wireless
International Holding Corporation (WWI). WWI,
through its consolidated subsidiaries and equity investments, is
a provider of mobile communications services in seven countries.
WWI owns controlling interests in six of these countries:
Slovenia, Austria, Ireland, Bolivia, Haiti and Ghana. WWI also
has an equity interest in Georgia.

Results of Domestic Operations for the Three
and Nine Months Ended September 30, 2004 and 2003

We had 1,358,800 domestic subscribers at
September 30, 2004, representing an approximate increase of
3% and 5%, compared to June 30, 2004 and December 31,
2003, respectively. We had 1,246,100 domestic subscribers at
September 30, 2003, representing an approximate increase of
1% and 4% compared to June 30, 2003 and December 31,
2002, respectively. Approximately 6% and 4% of our domestic
subscribers were with a mobile virtual network operator,
formerly referred to as a reseller, at September 30, 2004
and 2003, respectively. As of September 30, 2004 and 2003,
prepaid subscribers represented less than 1% of our subscriber
base. Beginning with the third quarter of 2004, we are including
prepaid subscribers in our customer base. The inclusion of
prepaid subscribers in our customer base recognizes 6,200
prepaid subscribers that we served at June 30, 2004 but had
not previously included in our reported customer base.

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

|                    |                                          |                          |         |                        |         |      |         |               |         |   |         |         |         |   |         |         |         | 
|------------------- | ---------------------------------------- | ------------------------ | ------- | ---------------------- | ------- | ---- | ------- | ------------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                    |                                          |                          |         |                       
|                    |                                          | Three Months Ended       |         | Nine Months Ended     
|                    |                                          | September 30,            |         | September 30,         
|                    |                                          |                          |         |                       
|                    |                                          | 2004                     |         | 2003                   |         | 2004 |         | 2003         
|                    |                                          |                          |         |                        |         |      |         |              
|                    |                                          |                          |         |                       
|                    |                                          | (Dollars in thousands)   |         | (Dollars in thousands)
|                    |                                          |                          |         | (As restated)          |         |      |         | (As restated)
|Revenues:           |                                          |                          |         |                        |         |      |         |               |         |   |         |         |         |   |         |        
|                    | Subscriber revenues                      |                          | $       | 206,313                |         |      | $       | 186,353       |         |   | $       | 591,652 |         |   | $       | 522,606 |        
|                    | Roamer revenues                          |                          |         | 53,103                 |         |      |         | 61,107        |         |   |         | 154,898 |         |   |         | 163,990 |        
|                    | Equipment sales                          |                          |         | 16,180                 |         |      |         | 12,549        |         |   |         | 45,265  |         |   |         | 33,013  |        
|                    | Other revenues                           |                          |         | 473                    |         |      |         | 563           |         |   |         | 1,445   |         |   |         | 2,217   |        
|                    |                                          |                          |         |                        |         |      |         |               |         |   |         |         |         |   |         |        
|                    |                                          | Total revenues           |         | $                      | 276,069 |      |         | $             | 260,572 |   |         | $       | 793,260 |   |         | $       | 721,826 | 
|Operating expenses: |                                          |                          |         |                        |         |      |         |               |         |   |         |         |         |   |         |        
|                    | Cost of service                          |                          | $       | 46,003                 |         |      | $       | 44,495        |         |   | $       | 134,649 |         |   | $       | 127,224 |        
|                    | Cost of equipment sales                  |                          |         | 26,050                 |         |      |         | 24,110        |         |   |         | 74,507  |         |   |         | 65,239  |        
|                    | General and administrative               |                          |         | 53,186                 |         |      |         | 48,404        |         |   |         | 150,692 |         |   |         | 127,956 |        
|                    | Sales and marketing                      |                          |         | 35,947                 |         |      |         | 31,007        |         |   |         | 99,123  |         |   |         | 85,959  |        
|                    | Depreciation, amortization and accretion |                          |         | 44,001                 |         |      |         | 53,506        |         |   |         | 125,123 |         |   |         | 158,255 |        
|                    | Asset dispositions                       |                          |         |                        |         |      |         |               |         |   |         |         |         |   |         | 4,850   |        
|                    |                                          |                          |         |                        |         |      |         |               |         |   |         |         |         |   |         |        
|                    |                                          | Total operating expenses |         | $                      | 205,187 |      |         | $             | 201,522 |   |         | $       | 584,094 |   |         | $       | 569,483 | 
|Adjusted EBITDA     |                                          | $                        | 114,883 |                        |         | $    | 112,556 |               |         | $ | 334,289 |         |         | $ | 315,448 |        

For the definition of Adjusted EBITDA, and the
reconciliation of Adjusted EBITDA, which is a non-GAAP financial
measure, to net income (loss), the most directly comparable GAAP
financial measure, see Adjustments to Reconcile Net Income
(Loss) to Adjusted EBITDA. Adjusted EBITDA is the measure
of profitability utilized by our Chief Operating Decision Maker
and is presented herein in accordance with Statement of
Financial Accounting Standards (SFAS) No. 131
Disclosures about Segments of an Enterprise and Related
Information (SFAS No. 131).

Domestic Revenues

The increase in subscriber revenues for the three
months ended September 30, 2004 compared to the same period
in 2003 was primarily due to a growth in year-over-year
subscribers coupled with an increase in average monthly revenue
per subscriber (defined as subscriber revenues for the period
divided by average subscribers for the period and dividing that
result by the number of months in the period)
(ARPU). ARPU was $51.27 for the three months ended
September 30, 2004 compared to $50.15 for the same period
in 2003. The increase in ARPU during the three months ended
September 30, 2004 compared to the same period in 2003 was
due primarily to an increase in federal universal service fund
payments (USF Support Payments). The increase in
subscriber revenues for the nine months ended September 30,
2004 compared to the same period in 2003 was partly due to an
increase in ARPU and partly due to a growth in year-over-year
subscribers. ARPU was $49.63 for the nine months ended
September 30, 2004, an increase from $47.52 for the same
period in 2003. The increase in ARPU for the nine months ended
September 30, 2004 compared to the same period in 2003 was
due primarily to: (i) the inclusion in subscriber revenue
of amounts collected from customers for federal and state
universal service fund assessments (USF Assessment
Revenue) beginning in the third quarter of 2003, which
contributed $1.09 to the increase in ARPU; and (ii) a
regulatory charge to our subscribers beginning in May 2003,
which is intended to recover the cost of certain unfunded
government mandates such as wireless number portability and
enhanced 911, which contributed $0.98 to the increase in ARPU.
We expect factors such as the inclusion of a full year of
subscriber collections for state and federal USF Assessment
Revenue along with an increase in our regulatory charge,
implemented in early 2004, and a year-over-year increase in USF
Assessment Revenue to provide for an overall higher ARPU in 2004
as compared to 2003.

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The decrease in roamer revenues for the three and
nine months ended September 30, 2004 compared to the same
periods in 2003 was due to lower per minute roaming revenue,
partially offset by an increase in roamer minutes of use
(MOUs). During the three months ended
September 30, 2004, a $17.9 million decrease related
to lower per minute roaming revenue was partially offset by an
increase of $9.8 million related to increased roamer MOUs
when compared to the same period in 2003. During the nine months
ended September 30, 2004, a $35.6 million decrease
related to lower per minute roaming revenue was partially offset
by an increase of $26.5 million related to increased roamer
MOUs when compared to the same period in 2003. The increase in
roaming traffic is due to the launching of GSM roaming services
in late 2003 along with an increase in CDMA roamer minutes of
use. The lower revenue per minute was primarily the result of
scheduled rate decreases charged between carriers coupled with a
new lower contracted TDMA roaming rate with AT&T Wireless
Services, Inc. (AT&T Wireless), our largest
roaming partner, that became effective July 2004.

In July 2004, we amended our TDMA roaming
agreement with AT&T Wireless to provide that AT&T
Wireless will continue to prefer our network in a significant
majority of our markets for TDMA roaming services in exchange
for a lower per minute rate. In October, 2004
AT&T Wireless was acquired by Cingular. Our roaming
agreements with AT&T Wireless will continue to remain in
effect for former AT&T Wireless customers until June, 2006.
Further, the rates contained in our TDMA roaming agreements are
substantially the same for AT&T Wireless and Cingular. Our
roaming agreement with Cingular expires in March 2008.
Currently, we are still unsure of the impact that the AT&T
Wireless and Cingular merger will have on our roaming traffic,
if any. In August 2004, we purchased from WirelessCo, L.P.
(Sprint PCS) for a nominal amount of cash,
certain domestic FCC licenses to expand our wireless network in
Montana. In conjunction with the license purchase, we have
agreed to provide roaming services and to meet certain build out
commitments for Sprint PCS. Sprint PCS has agreed to prefer our
Montana network for its customers and to purchase wireless
service from us for resale to Qwest Wireless LLC through 2009.
For 2004, we believe the recent contractual rate reductions in
the AT&T Wireless TDMA roaming agreement and similar rate
reductions in certain other long-term roaming agreements will be
mostly offset by growth in minutes with GSM and CDMA roaming
partners.

The increase in equipment sales for the three and
nine months ended September 30, 2004 compared to the same
periods ended September 30, 2003 was due to an increase in
the number of handsets sold coupled with an increase in the
average revenue per handset sold. The increase in the volume of
handsets sold is mainly due to an increase in gross subscriber
additions. The increase in the average revenue per handset sold
was partly due to increases in activation fees and partly due to
selling more handsets that support new features in our
Hello2Pix, Hello2Txt and
Hello2Web offerings. These handsets typically have a
higher selling price. We expect these factors to continue
through the end of the year resulting in equipment revenue being
higher for 2004 as compared to 2003.

Domestic Operating Expenses

The increase in cost of service for the three and
nine months ended September 30, 2004 compared to the same
periods in 2003 was due to an increase in the volume of
subscriber and roamer MOUs partially offset by a decrease in
costs per MOU. Cost of service per MOU decreased to $0.018 per
MOU for the three months ended September 30, 2004 compared
to $0.021 per MOU for the same period last year. Cost of service
per MOU decreased to $0.018 per MOU for the nine months ended
September 30, 2004 compared to $0.022 per MOU for the same
period in 2003. The decreases in cost of service per MOU were
primarily attributable to a decrease in interconnection costs on
an overall and a per minute basis. In addition, we experienced
decreased per minute off-network roaming costs for our customers
as a result of lower contractual rates. We expect total cost of
service to continue to increase in 2004 as compared to 2003 due
to the addition of fixed costs to support our new GSM roaming
agreements and increased costs to support the growth of MOUs on
our network. We expect cost of service per MOU to continue to
gradually decline in 2004 as compared to 2003.

Cost of equipment sales increased for the three
and nine months ended September 30, 2004 compared to the
same periods in 2003. The increases were the result of an
increase in the volume of handsets sold and an increase in the
average per unit cost of handsets sold. The increase in the
volume of handsets sold is due to an

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increase in gross subscriber additions. The
increase in the average per unit cost year-over-year is due to
the increased technological requirements to support new features
in our Hello2Pix, Hello2Txt and
Hello2Web offerings. 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.


General and administrative costs increased for
the three and nine months ended September 30, 2004 compared
to the same periods in 2003 due to increased costs to support a
growing subscriber base along with an increase in the general
and administrative monthly cost per average subscriber
(calculated as general and administrative costs divided by
average subscribers for the period and dividing that result by
the number of months in the period). Our general and
administrative monthly cost per average subscriber increased to
$13.22 and $12.64 for the three and nine months ended
September 30, 2004, respectively, compared to $13.03 and
$11.63 for the same periods in 2003. For the three months ended
September 30, 2004, the increase in general and
administrative monthly cost per average subscriber was driven by
an increase in bad debt expense. The inclusion of USF
remittances in general and administrative expense beginning in
the third quarter of 2003 contributed $0.98 to the
year-over-year increase in monthly general and administrative
cost per average subscriber for the nine months ended
September 30, 2004 compared to the same period a year ago.
We anticipate monthly general and administrative cost per
average subscriber to increase for 2004 compared to 2003 driven
by a full year of USF remittances being included in 2004
compared to only six months being included in 2003.

Sales and marketing costs increased for the three
and nine months ended September 30, 2004 compared to the
same periods in 2003. The increase in sales and marketing costs
for the three months ended September 30, 2004 compared to
the same period in 2003 was due mainly to an increase in gross
postpaid and prepaid subscriber additions offset by a decrease
in cost per gross subscriber addition (CPGA)
(determined by dividing the sum of sales and marketing costs and
cost of equipment sales, reduced by equipment sales, by the
number of gross postpaid and prepaid subscriber additions). For
the three month period ended September 30, 2004, CPGA
decreased to $356 compared to $384 for the same period ended
September 30, 2003. The decrease in CPGA for the three
months ended September 30, 2004 was primarily due to
decreases in retention costs and an improvement in equipment
margins. The increase in sales and marketing costs for the nine
months ended September 30, 2004 compared to the same period
in 2003 was due to an increase in gross prepaid and postpaid
subscriber additions. For the nine month period ended
September 30, 2004, CPGA was $389 compared to $388 for the
same period in 2003. We include costs to retain a subscriber in
sales and marketing expense and in our CPGA. For the three
months ended September 30, 2004 and 2003, retention costs
increased CPGA by $43 and $63, respectively. For the nine months
ended September 30, 2004 and 2003 retention costs increased
CPGA by $52 and $61, respectively. We expect CPGA in 2004 to be
lower as compared to 2003.

Depreciation, amortization and accretion expense
decreased for the three and nine months ended September 30,
2004 compared to the same periods in 2003. The decrease was due
primarily to an increase in fully depreciated assets such as
analog radios. The increase in fully depreciated assets was
partially offset by depreciation related to new asset additions.

The asset dispositions loss for the nine months
ended September 30, 2003 resulted from recording a
$4.9 million impairment charge related to the sale of our
Arizona 6 Rural Service Area (RSA). The sales
price of this RSA reflected that future cash flows would be less
than the carrying value of the license. Accordingly, we recorded
an impairment related to this RSA in our Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss).

Domestic Adjusted EBITDA

Domestic Adjusted EBITDA (see definition at
Adjustments to Reconcile Net Income (Loss) to Adjusted
EBITDA) increased for the three and nine months ended
September 30, 2004 compared to the same periods ended
September 30, 2003 primarily as a result of an increase in
subscriber revenues partially offset by increases in operating
expenses. Our operating margin (domestic Adjusted EBITDA as a
percentage

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of service revenues) for the three months ended
September 30, 2004 and 2003 was 44.2% and 45.4%,
respectively. Our operating margin for the nine months ended
September 30, 2004 and 2003 was 44.7% and 45.8%,
respectively. The inclusion of USF collections in revenues for
the three and nine months ended September 30, 2004 reduced
our operating margin by approximately 1.3% and 1.2%,
respectively. We expect domestic Adjusted EBITDA to continue to
increase at a moderate pace in 2004 as compared to 2003.


Results of International Operations for the
Three and Nine Months Ended September 30, 2004 and
2003

The following discussions include the results of
WWI and our international operating segments for the three and
nine months ended September 30, 2004 and 2003. WWI has
operating segments consisting of each country in which it
operates; however, Austria is our only reportable segment under
the guidance of SFAS No. 131. Operating results related to
Austria are separately disclosed where meaningful.

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. Our consolidated Ghanaian entity and our Georgian
entity, which is accounted for using the equity method, are
presented on a one-quarter lag.

Our international consolidated operations offer
postpaid and prepaid mobile services in Slovenia, Austria,
Ireland, Bolivia and Haiti and fixed line service in Austria and
Ghana. We had 1,579,000 consolidated international subscribers
at September 30, 2004, which represented an increase
approximately of 9% and 32%, compared to June 30, 2004 and
December 31, 2003, respectively. Of these consolidated
international subscribers, Austria had 841,700 subscribers at
September 30, 2004, which represented an increase of
approximately 8% and 33%, compared June 30, 2004 and
December 31, 2003, respectively. As of September 30,
2004 and 2003, approximately 44% and 41%, respectively, of our
consolidated international subscribers were postpaid customers.
As of September 30, 2004 and 2003, approximately 79% and
74%, respectively, of our Austrian subscribers were postpaid
customers. As of September 30, 2004, we had 134,200 fixed
lines, of which Austria represented 98%.

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

|                    |                                          |                          |        |                        |         |      |        |               |         |   |         |         |         |   |        |         |         | 
|------------------- | ---------------------------------------- | ------------------------ | ------ | ---------------------- | ------- | ---- | ------ | ------------- | ------- | - | ------- | ------- | ------- | - | ------ | ------- | ------- | 
|                    |                                          |                          |        |                       
|                    |                                          | Three Months Ended       |        | Nine Months Ended     
|                    |                                          | September 30,            |        | September 30,         
|                    |                                          |                          |        |                       
|                    |                                          | 2004                     |        | 2003                   |         | 2004 |        | 2003         
|                    |                                          |                          |        |                        |         |      |        |              
|                    |                                          |                          |        |                       
|                    |                                          | (Dollars in thousands)   |        | (Dollars in thousands)
|                    |                                          |                          |        | (As restated)          |         |      |        | (As restated)
|Revenues:           |                                          |                          |        |                        |         |      |        |               |         |   |         |         |         |   |        |        
|                    | Subscriber revenues                      |                          | $      | 189,872                |         |      | $      | 105,728       |         |   | $       | 518,558 |         |   | $      | 266,702 |        
|                    | Roamer revenues                          |                          |        | 11,773                 |         |      |        | 12,258        |         |   |         | 36,475  |         |   |        | 35,643  |        
|                    | Fixed line revenues                      |                          |        | 10,679                 |         |      |        | 13,686        |         |   |         | 34,759  |         |   |        | 43,377  |        
|                    | Equipment sales                          |                          |        | 4,685                  |         |      |        | 5,941         |         |   |         | 16,010  |         |   |        | 11,753  |        
|                    | Other revenues                           |                          |        | 4,369                  |         |      |        | 3,140         |         |   |         | 10,371  |         |   |        | 8,430   |        
|                    |                                          |                          |        |                        |         |      |        |               |         |   |         |         |         |   |        |        
|                    |                                          | Total revenues           |        | $                      | 221,378 |      |        | $             | 140,753 |   |         | $       | 616,173 |   |        | $       | 365,905 | 
|Operating expenses: |                                          |                          |        |                        |         |      |        |               |         |   |         |         |         |   |        |        
|                    | Cost of service                          |                          | $      | 85,282                 |         |      | $      | 64,508        |         |   | $       | 240,700 |         |   | $      | 179,973 |        
|                    | Cost of equipment sales                  |                          |        | 20,409                 |         |      |        | 17,418        |         |   |         | 62,960  |         |   |        | 46,074  |        
|                    | General and administrative               |                          |        | 26,965                 |         |      |        | 20,271        |         |   |         | 76,441  |         |   |        | 61,035  |        
|                    | Sales and marketing                      |                          |        | 30,894                 |         |      |        | 21,242        |         |   |         | 91,322  |         |   |        | 64,605  |        
|                    | Depreciation, amortization and accretion |                          |        | 25,362                 |         |      |        | 17,868        |         |   |         | 66,437  |         |   |        | 51,438  |        
|                    | Stock-based compensation, net            |                          |        | 4,810                  |         |      |        |               |         |   |         | 11,330  |         |   |        |         |        
|                    |                                          |                          |        |                        |         |      |        |               |         |   |         |         |         |   |        |        
|                    |                                          | Total operating expenses |        | $                      | 193,722 |      |        | $             | 141,307 |   |         | $       | 549,190 |   |        | $       | 403,125 | 
|Adjusted EBITDA     |                                          | $                        | 57,828 |                        |         | $    | 17,314 |               |         | $ | 144,750 |         |         | $ | 14,218 |        

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For the definition of Adjusted EBITDA, and the
reconciliation of Adjusted EBITDA, which is a non-GAAP financial
measure, to net income (loss), the most directly comparable GAAP
financial measure, see Adjustments to Reconcile Net Income
(Loss) to Adjusted EBITDA. Adjusted EBITDA is the measure
of profitability utilized by our Chief Operating Decision Maker
and is presented herein in accordance with SFAS No. 131.

Because our subsidiary WWI has operations in
Austria, Ireland and Slovenia in which the functional currency
is the euro, or is linked to the euro, fluctuations in exchange
rates may have a significant impact on its financial results of
operations. The results of operations for the three and nine
months ended September 30, 2004 compared to the same
periods in 2003 reflect the effects of an 8% and 9%,
respectively, average appreciation of the euro compared to the
U.S. dollar. The appreciation of the euro had a comparable
increase to both revenues and operating expenses. Our European
subsidiaries, in aggregate, represented approximately 84% and
85% of total consolidated international revenues for the three
and nine months ended September 30, 2004, respectively. We
cannot predict future fluctuations in currency exchange rates,
and accordingly cannot predict the potential impact of any such
fluctuations on WWIs results of operations.

International Revenues

Total subscriber revenues increased for the three
and nine months ended September 30, 2004 compared to the
same periods in 2003 primarily due to an increase in the number
of average subscribers across most of our markets, increased
ARPU and the strengthening of the euro as compared to the
U.S. dollar. International ARPU was $41.84 and $41.67 for
the three and nine months ended September 30, 2004 compared
to $36.68 and $33.66 for the same periods in 2003. Austrian ARPU
was $54.50 and $55.42 for the three and nine months ended
September 30, 2004 compared to $50.16 and $46.17 for the
three and nine months ended September 30, 2003. The
increases in total international and Austrian ARPU were mainly
due to an increase in the proportion of postpaid subscribers,
primarily in Austria, who generally generate higher service
revenue than prepaid subscribers and the strengthening of the
euro as compared to the U.S. dollar. The strengthening of
the euro compared to the U.S. dollar accounted for $2.60 and
$2.92 of the increase in international ARPU for the three and
nine months ended September 30, 2004, respectively. The
strengthening of the euro compared to the U.S. dollar
accounted for $4.29 and $4.81 of the increase in Austrian ARPU
for the three and nine months ended September 30, 2004 and
more than offset an actual slight decline in Austrian ARPU for
the three months ended September 30, 2004 compared to the
same period in 2003. We anticipate growth in subscriber revenues
in 2004 compared to 2003, exclusive of further changes in
currency exchange rates, due to anticipated year-over-year
subscriber growth, primarily in Austria and Ireland, and modest
growth in ARPU as a result of an increased number of postpaid
subscribers.

Total roamer revenues declined for the three
months ended September 30, 2004 compared to the same period
in 2003 and was relatively flat for the nine month period ended
September 30, 2004 compared to the same period in 2003. The
strengthening of the euro compared to the U.S. dollar offset an
actual 7% decline in total international roamer revenues for the
nine months ended September 30, 2004 compared to the same
period in 2003. These declines in roamer revenues are primarily
a result of a reduction in roamer revenues in Austria due to
special roaming agreements between Austrias competitors
and their related foreign entities which offer heavily
discounted rates making it less attractive to route traffic
through our Austrian network. We expect total roamer revenue
dollars, exclusive of further changes in currency exchange
rates, to be relatively constant in 2004 compared to 2003.

Total fixed line revenues decreased for the three
and nine months ended September 30, 2004 compared to the
same period in 2003 as a result of an increase in average fixed
line monthly churn in Austria due to competitive tariffs
introduced by large fixed line providers and limited marketing
activity by our Austrian subsidiary, partially offset by the
strengthening of the euro compared to the U.S. dollar. For this
reason, we expect fixed line revenues, exclusive of further
changes in currency exchange rates, to decline in 2004 compared
to the same period in 2003.

Total equipment sales increased for the three
months ended September 30, 2004 compared to the same period
in 2003 primarily due to selling more handsets as a result of
adding more subscribers, mainly in Austria

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and Ireland. These volume increases were
partially offset by a lower average revenue per handset sold due
to a change in the mix of handsets sold in Austria and increased
subsidization of handsets in Austria and Ireland. Equipment
sales were also favorably impacted by the strengthening of the
euro compared to the U.S. dollar. Total equipment sales
increased for the nine months ended September 30, 2004
compared to the same period in 2003 primarily due to selling
more handsets as a result of adding more subscribers, mainly in
Austria and Ireland, and as a result of the strengthening of the
euro compared to the U.S. dollar. An increase in the
average sales price per handset in all our markets also added to
the increase in total international equipment sales for the nine
months ended September 30, 2004. We anticipate modest
continued growth in international equipment sales in 2004
compared to 2003, exclusive of further changes in currency
exchange rates, primarily as a result of increased mobile
subscriber additions.


International Operating Expenses

Operating expenses represent the expenses
incurred by our consolidated international markets and
headquarters administration in the United States.

Total cost of service increased for the three and
nine months ended September 30, 2004 compared to the same
periods in 2003. This was due primarily to an increase in the
number of average subscribers across most of our markets and the
strengthening of the euro compared to the U.S. dollar. Monthly
cost of service per average international subscriber was $18.79
and $19.29 for the three and nine months ended
September 30, 2004, respectively, compared to $22.38 and
$22.71 for the three and nine months ended September 30,
2003, respectively. Monthly cost of service per average Austrian
subscriber declined to $23.81 and $25.01 for the three and nine
months ended September 30, 2004, respectively, from $30.63
and $31.86 for the same periods in 2003. The decreases in
international and Austrian monthly cost of service per average
subscriber are mainly due to increased cost efficiencies as a
result of a growing subscriber base. The strengthening of the
euro partially offset efficiency increases and increased monthly
cost of service on a per average international subscriber basis
by $1.67 and $2.09 for the three and nine months ended
September 30, 2004, respectively, compared to the same
periods in 2003. The strengthening of the euro partially offset
efficiency increases and increased monthly cost of service on a
per average Austrian subscriber basis by $2.62 and $3.32 for the
three and nine months ended September 30, 2004,
respectively, compared to the same periods in 2003. We expect
total cost of service dollars to continue to increase in 2004
compared to 2003 due to a growing subscriber base, but decline
on a per average international subscriber basis, exclusive of
further changes in currency exchange rates, due to increased
cost efficiencies.

The increase in total cost of equipment sales for
the three and nine months ended September 30, 2004 over the
same periods in 2003 was largely due to the increase in volume
of handsets sold in Austria and Ireland as a result of higher
subscriber additions, an increase in the cost per handset sold
in Ireland due to newer models with more features and the
strengthening of the euro compared to the U.S. dollar. These
increases were partially offset by a decline in the cost per
handset sold in Austria. Although subscribers generally are
responsible for purchasing or otherwise obtaining their own
handsets, WWI has historically sold handsets below cost to
respond to competition and general industry practice and expects
to continue to do so in the future.

Total general and administrative expenses
increased for the three and nine months ended September 30,
2004 compared to the same periods in 2003 due primarily to an
increase in the number of average subscribers across most of our
markets and the strengthening of the euro compared to the U.S.
dollar. General and administrative monthly cost per average
international subscriber was $5.94 and $6.13 for the three and
nine months ended September 30, 2004, respectively,
compared to $7.03 and $7.70 for the same periods in 2003.
General and administrative monthly cost per average Austrian
subscriber was $5.32 and $6.03 for the three and nine months
ended September 30, 2004, respectively, compared to $7.75
and $8.34 for the same periods in 2003. The decreases in
international and Austrian general and administrative monthly
cost per average international and Austrian subscriber,
respectively, were mainly due to increased cost efficiencies
resulting from a growing subscriber base, partially offset by
the strengthening of the euro compared to the U.S. dollar. The
strengthening of the euro increased general and administrative
monthly cost by $0.45 and $0.66 on a per average international
subscriber and per average Austrian subscriber basis,
respectively, for the three months

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ended September 30, 2004 compared to the same
period in 2003. The strengthening of the euro increased general
and administrative monthly cost by $0.60 and $0.87 on a per
average international subscriber and per average Austrian
subscriber basis, respectively, for the nine months ended
September 30, 2004 compared to the same period in 2003. We
expect total general and administrative dollars to continue to
increase in 2004 compared to 2003 as a result of a growing
subscriber base, but decline slightly on a per average
international subscriber basis, exclusive of further changes in
currency exchange rates, due to increased cost efficiencies
related to a larger subscriber base.


Total sales and marketing costs increased for the
three and nine months ended September 30, 2004 compared to
the same periods in 2003 primarily due to: (i) increased
agent and indirect commissions and retailer and dealer subsidies
attributable to higher subscriber additions; (ii) customer
retention programs, mainly in Austria; (iii) increased
advertising, mainly in Austria and Ireland; and (iv) the
strengthening of the euro compared to the U.S. dollar.
International and Austrian CPGA were $185 and $310,
respectively, for the three months ended September 30, 2004
compared to $161 and $241 for the same periods in 2003. The
increase in international and Austrian CPGA for the three months
ended September 30, 2004 was also primarily due to the
factors discussed above. The strengthening of the euro increased
international and Austrian CPGA by $13 and $21, respectively,
for the three months ended September 30, 2004 compared to
the same period in 2003. International and Austrian CPGA were
$194 and $308, respectively, for the nine months ended
September 30, 2004 compared to $177 and $276 for the same
period in 2003. The increase in international and Austrian CPGA
for the nine month period ended September 30, 2004 was a
result of the strengthening of the euro compared to the U.S.
dollar which offset actual declines in international and
Austrian CPGA. Actual international and Austrian CPGA declined
due to advertising costs being spread over a large number of
gross additions, primarily in Austria and Ireland, partially
offset by increases in customer retention programs in Austria
and retailer and dealer subsidies in Ireland. The strengthening
of the euro increased international and Austrian CPGA by $17 and
$29, respectively, for the nine months ended September 30,
2004 compared to the same period in 2003. We expect total sales
and marketing dollars, including equipment subsidies, and CPGA
to be higher in 2004 compared to 2003, exclusive of further
changes in currency exchange rates, due to increased agent and
indirect commissions, retailer and dealer subsidies, and
advertising to support the expansion of our network in Ireland
and to remain competitive in Austria. For these reasons, we
expect CPGA to increase in 2004 compared to the same period in
2003, exclusive of further changes in currency exchange rates.

Total depreciation, amortization and accretion
expense increased for the three and nine months ended
September 30, 2004 compared to the same periods in 2003 due
primarily to network expansion in Austria and Ireland and the
strengthening of the euro compared to the U.S. dollar. As WWI
continues to add wireless infrastructure to service its growing
international subscriber base, we anticipate depreciation,
amortization and accretion expense will increase in future
periods.

The change in total stock-based compensation for
the three and nine months ended September 30, 2004 from the
same periods in 2003 is primarily a result of a revaluation of
WWIs stock appreciation rights (SARs) based on
current market conditions and employee vesting.

International Adjusted EBITDA

International Adjusted EBITDA (see definition at
Adjustments to Reconcile Net Income (Loss) to Adjusted
EBITDA) for our international consolidated subsidiaries
improved by $40.5 million and $130.5 million for the
three and nine months ended September 30, 2004,
respectively, compared to the same periods in 2003. The
increases were mainly due to an improvement of
$31.1 million and $99.8 million in Austrian Adjusted
EBITDA for the three and nine months ended September 30,
2004 compared to the same periods in 2003. We expect
international Adjusted EBITDA to continue to improve in 2004 as
a result of continued subscriber growth and cost efficiencies in
existing markets, primarily Austria.

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Adjustments to Reconcile Net Income (Loss) to
Adjusted EBITDA

EBITDA is a non-GAAP financial measure generally
defined as net income (loss) before interest, taxes,
depreciation and amortization. We use the non-GAAP financial
measure Adjusted EBITDA which further excludes the
following items: (i) accretion; (ii) asset
dispositions; (iii) stock-based compensation, net;
(iv) equity in net (income) loss of unconsolidated
affiliates, net of tax and other, net; (v) (gain) loss on
sale of joint venture; (vi) realized loss on marketable
securities; (vii) realized (gain) loss on interest rate
hedges; (viii) loss on extinguishment of debt;
(ix) minority interests in net (income) loss of
consolidated subsidiaries; (x) discontinued operations; and
(xi) cumulative change in accounting principle. Each of
these items is presented in our Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss).

Other companies in the wireless industry may
define Adjusted EBITDA in a different manner or present other
varying financial measures, and, accordingly, the Companys
presentation may not be comparable to other similarly titled
measures of other companies. The Companys calculation of
Adjusted EBITDA is also not directly comparable to EBIT
(earnings before interest and taxes) or EBITDA.

We view Adjusted EBITDA as an operating
performance measure and as such, believe that the GAAP financial
measure most directly comparable to Adjusted EBITDA is net
income (loss). We have presented Adjusted EBITDA because this
financial measure, in combination with other financial measures,
is an integral part of our internal reporting system utilized by
management to assess and evaluate the performance of our
business. Adjusted EBITDA is also considered a significant
performance measure. It is used by management as a measurement
of our success in obtaining, retaining and servicing customers
by reflecting our ability to generate subscriber revenue while
providing a high level of customer service in a cost effective
manner. The components of Adjusted EBITDA include the key
revenue and expense items for which our operating managers are
responsible and upon which we evaluate our performance.

Adjusted EBITDA is consistent with certain
financial measures used in our domestic credit facility and the
indenture for our senior notes. Such financial measures are key
components of several negative covenants including, among
others, the limitation on incurrence of indebtedness, the
limitations on investments and acquisitions and the limitation
on distributions and dividends.

Adjusted EBITDA should not be construed as an
alternative to net income (loss), as determined in accordance
with GAAP, as an alternative to cash flows from operating
activities, as determined in accordance with GAAP, or as a
measure of liquidity. We believe Adjusted EBITDA is useful to
investors as a means to evaluate the Companys operating
performance prior to financing costs, deferred tax charges,
non-cash depreciation and amortization expense, and certain
other non-cash charges. Although Adjusted EBITDA may be defined
differently by other companies in the wireless industry, we
believe that Adjusted EBITDA provides some commonality of
measurement in analyzing operating performance of companies in
the wireless industry.

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A reconciliation of net income (loss) to Adjusted
EBITDA is included in the following table:

|                  |                                                                                         |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |        | 
|----------------- | --------------------------------------------------------------------------------------- | ------------------------------------- | ------- | ---------- |  | ------------- | ------ | ------------ |  | - | ------- | ------ | - | - | ------- | ------ | 
|                  |                                                                                         |                                      
|                  |                                                                                         | Three Months Ended September 30, 2004
|                  |                                                                                         |                                      
|                  |                                                                                         | Domestic                              |         | Austrian   |  | All Other     |        |             
|                  |                                                                                         | Operations                            |         | Operations |  | International |        | Consolidated
|                  |                                                                                         |                                       |         |            |  |               |        |             
|                  |                                                                                         |                                      
|                  |                                                                                         | (Dollars in thousands)               
|Net income (loss) |                                                                                         | $                                     | 28,379  |            |  | $             | 36,261 |              |  | $ | (34,281 | )      |   | $ | 30,359  |       
|                  | Depreciation, amortization and accretion                                                |                                       |         | 44,001     |  |               |        | 5,587        |  |   |         | 19,775 |   |   |         | 69,363 | 
|                  | Asset dispositions                                                                      |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |        | 
|                  | Stock-based compensation, net                                                           |                                       |         |            |  |               |        |              |  |   |         | 4,810  |   |   |         | 4,810  | 
|                  | Interest and financing expense, net                                                     |                                       |         | 17,201     |  |               |        | 2,443        |  |   |         | 15,375 |   |   |         | 35,019 | 
|                  | Equity in net (income) loss of
    unconsolidated affiliates, net of tax and other, net |                                       |         | 979        |  |               |        | 1,036        |  |   |         | (1,282 | ) |   |         | 733    | 
|                  | (Gain) loss on sale of joint venture                                                    |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |        | 
|                  | Realized loss on marketable securities                                                  |                                       |         | 10,974     |  |               |        |              |  |   |         |        |   |   |         | 10,974 | 
|                  | Realized (gain) loss on interest rate hedges                                            |                                       |         | 1,825      |  |               |        |              |  |   |         | 843    |   |   |         | 2,668  | 
|                  | Loss on extinguishment of debt                                                          |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |        | 
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                       |         |            |  |               |        |              |  |   |         | 3,093  |   |   |         | 3,093  | 
|                  | Provision for income taxes                                                              |                                       |         | 11,524     |  |               |        | 1            |  |   |         | 4,167  |   |   |         | 15,692 | 
|                  | Discontinued operations                                                                 |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |        | 
|                  | Cumulative change in accounting principle                                               |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |        | 
|                  |                                                                                         |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA   |                                                                                         | $                                     | 114,883 |            |  | $             | 45,328 |              |  | $ | 12,500  |        |   | $ | 172,711 |       
|                  |                                                                                         |                                       |         |            |  |               |        |              |  |   |         |        |   |   |         |       

|                  |                                                                                         |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|----------------- | --------------------------------------------------------------------------------------- | ------------------------------------- | ------- | ---------- | - | ------------- | ------ | ------------ |  | - | ------- | ------ | - | - | ------- | ------ | -
|                  |                                                                                         |                                      
|                  |                                                                                         | Three Months Ended September 30, 2003
|                  |                                                                                         |                                      
|                  |                                                                                         | Domestic                              |         | Austrian   |   | All Other     |        |             
|                  |                                                                                         | Operations                            |         | Operations |   | International |        | Consolidated
|                  |                                                                                         |                                       |         |            |   |               |        |             
|                  |                                                                                         |                                      
|                  |                                                                                         | (Dollars in thousands)               
|                  |                                                                                         | (As restated)                        
|Net income (loss) |                                                                                         | $                                     | 4,510   |            |   | $             | 7,825  |              |  | $ | (30,873 | )      |   | $ | (18,538 | )     
|                  | Depreciation, amortization and accretion                                                |                                       |         | 53,506     |   |               |        | 2,829        |  |   |         | 15,039 |   |   |         | 71,374 |  
|                  | Asset dispositions                                                                      |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|                  | Stock-based compensation, net                                                           |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|                  | Interest and financing expense, net                                                     |                                       |         | 28,801     |   |               |        | 2,445        |  |   |         | 11,975 |   |   |         | 43,221 |  
|                  | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                       |         | (10        | ) |               |        | 1,107        |  |   |         | 2,020  |   |   |         | 3,117  |  
|                  | (Gain) loss on sale of joint venture                                                    |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|                  | Realized loss on marketable securities                                                  |                                       |         | 3,766      |   |               |        |              |  |   |         |        |   |   |         | 3,766  |  
|                  | Realized (gain) loss on interest rate hedges                                            |                                       |         | (4,431     | ) |               |        |              |  |   |         |        |   |   |         | (4,431 | )
|                  | Loss on extinguishment of debt                                                          |                                       |         | 16,910     |   |               |        |              |  |   |         | 4,310  |   |   |         | 21,220 |  
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                       |         |            |   |               |        |              |  |   |         | (135   | ) |   |         | (135   | )
|                  | Provision for income taxes                                                              |                                       |         | 9,504      |   |               |        | 53           |  |   |         | 719    |   |   |         | 10,276 |  
|                  | Discontinued operations                                                                 |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|                  | Cumulative change in accounting principle                                               |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|                  |                                                                                         |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA   |                                                                                         | $                                     | 112,556 |            |   | $             | 14,259 |              |  | $ | 3,055   |        |   | $ | 129,870 |       
|                  |                                                                                         |                                       |         |            |   |               |        |              |  |   |         |        |   |   |         |       

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|                  |                                                                                         |                                      |         |            |   |               |         |              |  |   |         |        |   |   |         |         |  
|----------------- | --------------------------------------------------------------------------------------- | ------------------------------------ | ------- | ---------- | - | ------------- | ------- | ------------ |  | - | ------- | ------ | - | - | ------- | ------- | -
|                  |                                                                                         |                                     
|                  |                                                                                         | Nine Months Ended September 30, 2004
|                  |                                                                                         |                                     
|                  |                                                                                         | Domestic                             |         | Austrian   |   | All Other     |         |             
|                  |                                                                                         | Operations                           |         | Operations |   | International |         | Consolidated
|                  |                                                                                         |                                      |         |            |   |               |         |             
|                  |                                                                                         |                                     
|                  |                                                                                         | (Dollars in thousands)              
|Net income (loss) |                                                                                         | $                                    | 109,010 |            |   | $             | 94,152  |              |  | $ | (95,228 | )      |   | $ | 107,934 |        
|                  | Depreciation, amortization and accretion                                                |                                      |         | 125,123    |   |               |         | 14,436       |  |   |         | 52,001 |   |   |         | 191,560 |  
|                  | Asset dispositions                                                                      |                                      |         |            |   |               |         |              |  |   |         |        |   |   |         |         |  
|                  | Stock-based compensation, net                                                           |                                      |         |            |   |               |         | 228          |  |   |         | 11,102 |   |   |         | 11,330  |  
|                  | Interest and financing expense, net                                                     |                                      |         | 55,603     |   |               |         | 7,570        |  |   |         | 41,642 |   |   |         | 104,815 |  
|                  | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                      |         | 1,027      |   |               |         | 3,140        |  |   |         | (5,266 | ) |   |         | (1,099  | )
|                  | (Gain) loss on sale of joint venture                                                    |                                      |         |            |   |               |         |              |  |   |         |        |   |   |         |         |  
|                  | Realized loss on marketable securities                                                  |                                      |         | 10,974     |   |               |         |              |  |   |         |        |   |   |         | 10,974  |  
|                  | Realized (gain) loss on interest rate hedges                                            |                                      |         | (8,956     | ) |               |         |              |  |   |         | 1,505  |   |   |         | (7,451  | )
|                  | Loss on extinguishment of debt                                                          |                                      |         | 16,260     |   |               |         |              |  |   |         |        |   |   |         | 16,260  |  
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                      |         |            |   |               |         |              |  |   |         | 7,711  |   |   |         | 7,711   |  
|                  | Provision for income taxes                                                              |                                      |         | 25,248     |   |               |         | 3            |  |   |         | 11,754 |   |   |         | 37,005  |  
|                  | Discontinued operations                                                                 |                                      |         |            |   |               |         |              |  |   |         |        |   |   |         |         |  
|                  | Cumulative change in accounting principle                                               |                                      |         |            |   |               |         |              |  |   |         |        |   |   |         |         |  
|                  |                                                                                         |                                      |         |            |   |               |         |              |  |   |         |        |   |   |         |        
|Adjusted EBITDA   |                                                                                         | $                                    | 334,289 |            |   | $             | 119,529 |              |  | $ | 25,221  |        |   | $ | 479,039 |        
|                  |                                                                                         |                                      |         |            |   |               |         |              |  |   |         |        |   |   |         |        

|                  |                                                                                         |                                      |         |            |   |               |        |              |  |   |         |         |   |   |         |         |  
|----------------- | --------------------------------------------------------------------------------------- | ------------------------------------ | ------- | ---------- | - | ------------- | ------ | ------------ |  | - | ------- | ------- | - | - | ------- | ------- | -
|                  |                                                                                         |                                     
|                  |                                                                                         | Nine Months Ended September 30, 2003
|                  |                                                                                         |                                     
|                  |                                                                                         | Domestic                             |         | Austrian   |   | All Other     |        |             
|                  |                                                                                         | Operations                           |         | Operations |   | International |        | Consolidated
|                  |                                                                                         |                                      |         |            |   |               |        |             
|                  |                                                                                         |                                     
|                  |                                                                                         | (Dollars in thousands)              
|                  |                                                                                         | (As restated)                       
|Net income (loss) |                                                                                         | $                                    | 41,344  |            |   | $             | (35    | )            |  | $ | (42,950 | )       |   | $ | (1,641  | )      
|                  | Depreciation, amortization and accretion                                                |                                      |         | 158,255    |   |               |        | 8,039        |  |   |         | 43,399  |   |   |         | 209,693 |  
|                  | Asset dispositions                                                                      |                                      |         | 4,850      |   |               |        |              |  |   |         |         |   |   |         | 4,850   |  
|                  | Stock-based compensation, net                                                           |                                      |         |            |   |               |        |              |  |   |         |         |   |   |         |         |  
|                  | Interest and financing expense, net                                                     |                                      |         | 74,833     |   |               |        | 7,751        |  |   |         | 36,555  |   |   |         | 119,139 |  
|                  | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                      |         | 253        |   |               |        | 3,088        |  |   |         | (3,032  | ) |   |         | 309     |  
|                  | (Gain) loss on sale of joint venture                                                    |                                      |         | 1,574      |   |               |        |              |  |   |         | (42,093 | ) |   |         | (40,519 | )
|                  | Realized loss on marketable securities                                                  |                                      |         | 3,890      |   |               |        |              |  |   |         |         |   |   |         | 3,890   |  
|                  | Realized (gain) loss on interest rate hedges                                            |                                      |         | (9,170     | ) |               |        |              |  |   |         |         |   |   |         | (9,170  | )
|                  | Loss on extinguishment of debt                                                          |                                      |         | 16,910     |   |               |        |              |  |   |         | 4,310   |   |   |         | 21,220  |  
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                      |         |            |   |               |        |              |  |   |         | (4,153  | ) |   |         | (4,153  | )
|                  | Provision for income taxes                                                              |                                      |         | 21,520     |   |               |        | 155          |  |   |         | 2,142   |   |   |         | 23,817  |  
|                  | Discontinued operations                                                                 |                                      |         |            |   |               |        |              |  |   |         |         |   |   |         |         |  
|                  | Cumulative change in accounting principle                                               |                                      |         | 1,189      |   |               |        | 770          |  |   |         | 272     |   |   |         | 2,231   |  
|                  |                                                                                         |                                      |         |            |   |               |        |              |  |   |         |         |   |   |         |        
|Adjusted EBITDA   |                                                                                         | $                                    | 315,448 |            |   | $             | 19,768 |              |  | $ | (5,550  | )       |   | $ | 329,666 |        
|                  |                                                                                         |                                      |         |            |   |               |        |              |  |   |         |         |   |   |         |        

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Consolidated Other Income (Expense)

Interest and financing expense decreased to
$35.0 million and $104.8 million for the three and
nine months ended September 30, 2004 compared to
$43.2 million and $119.1 million for the same periods
ended September 30, 2003. The decreases in interest expense
were primarily due to a reduction in our average domestic debt
outstanding. Additionally, a reduction in the weighted average
domestic interest rate from 7.0% to 6.3% further contributed to
a reduction in interest and financing expenses for the three
months ended September 30, 2004 compared to the same period
in 2003. For the nine months ended September 30, 2004 and
2003, the weighted average domestic interest rate paid to third
parties was 6.4%. For the three months ended September 30,
2004 and 2003, the international weighted average interest rate
paid to third parties by consolidated WWI entities was 6.1% and
5.8%, respectively. For the nine months ended September 30,
2004 and 2003, the international weighted average interest rate
paid to third parties by consolidated WWI entities was 5.9% and
6.8%, respectively.

The $16.3 million loss on extinguishment of
debt for the nine months ended September 30, 2004 was due
to the write-off of deferred financing costs and certain
interest rate swap cancellation costs associated with the
refinancing of our domestic credit facility in May 2004. The
$21.2 million loss on extinguishment of debt for the three
and nine months ended September 30, 2003 consisted of
premium payments, the write-off of deferred financing charges
and the cancellation of related interest rate swaps in
connection with the redemption by us of our 10 1/2% Senior
Subordinated Notes due 2006 and 2007, and the write-off of
deferred financing charges related to our amendment of our
Slovenian credit facility in September 2003.

The increase in realized loss on marketable
securities was due to an $11.0 million realized loss on
marketable securities for the three and nine months ended
September 30, 2004, compared to $3.8 million and
$3.9 million for the same periods in 2003. The realized
losses were due to other-than-temporary impairments of our
investments in available-for-sale securities.

The $40.5 million gain on sale of Croatian
joint venture for the nine months ended September 30, 2003
was related to the sale of WWIs investment in VIP-Net in
Croatia. Our proceeds were $69.6 million.

Consolidated Provision for Income
Taxes

The $5.4 million and $13.2 million
increases in the provision for income taxes for the three and
nine months ended September 30, 2004, respectively,
compared to the same periods in 2003 were primarily due to an
increase in income taxes payable related to our operations in
Haiti and an increase in our deferred tax provision associated
with book tax differences related to our acquisition of an
incremental 5 MHz of PCS licenses from T-Mobile in the
third quarter 2004.

Consolidated Net Income

For the three months ended September 30,
2004, our consolidated net income increased $48.9 million
compared to the same period in 2003. The increase was due to
factors described above in our discussions of Adjusted EBITDA in
our domestic and international businesses (see Domestic
Adjusted EBITDA and International Adjusted
EBITDA) coupled with lower domestic interest and financing
expenses in 2004 and a loss on extinguishment of debt in 2003.
These improvements were partially offset by an increase in
realized loss on marketable securities in 2004. Our consolidated
net income increased $109.6 million for the nine months
ended September 30, 2004 compared to the same period in
2003. The increase was mainly due to increased Adjusted EBITDA
in our domestic and international businesses (see Domestic
Adjusted EBITDA and International Adjusted
EBITDA) coupled with lower domestic depreciation and
amortization expense and lower domestic interest and financing
expenses. These improvements were partially offset by a gain on
the sale of our Croatian joint venture in 2003 and an increase
in realized loss on marketable securities in 2004.

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Consolidated Liquidity and Capital
Resources

At December 31, 2003, we had a
$1.55 billion credit facility with a consortium of lenders
(the Credit Facility) consisting of: (i) a
$350 million term loan; (ii) a $500 million term
loan; and (iii) two $350 million revolving loans.

On May 28, 2004 (the Agreement
Date), we refinanced the Credit Facility with a new credit
facility (the New Credit Facility). The aggregate
amount available under the New Credit Facility is
$1.50 billion consisting of: (i) a $225 million
term loan (Term Loan A); (ii) a
$975 million term loan (Term Loan B); and
(iii) a $300 million revolving loan (the
Revolving Credit Facility). Proceeds from the New
Credit Facility were used to repay $1.2 billion outstanding
under the Credit Facility. At September 30, 2004, the term
loans were fully drawn and we had $300 million available to
borrow under the Revolving Credit Facility. For the nine months
ended September 30, 2004, we recognized a
$16.3 million aggregate loss on the extinguishment of debt
on the Credit Facility related to the write-off of deferred
financing costs and cancellation of certain related interest
rate swaps relating to the refinancing of the Credit Facility.
Principal payments required under the New Credit Facility for
the remainder of 2004 are $8.1 million.

Subject to our leverage ratio at the time, the
New Credit Facility may require us to make mandatory prepayments
from proceeds of the issuance or incurrence of additional debt
after the Agreement Date and from excess cash flow beginning
with the fiscal year ended December 31, 2004. We are also
required to make prepayments from the proceeds of certain asset
dispositions. We estimate that we will be required to make a
prepayment from excess cash flow of approximately
$41 million in April 2005. Accordingly, this amount is
classified in the current portion of long-term debt on our
Condensed Consolidated Balance Sheet as of September 30,
2004.

In May 2004, NuevaTel S.A.
(NuevaTel), a subsidiary of WWI, finalized the terms
of a credit facility agreement (the Bolivian Credit
Facility) with the Overseas Private Investment Corporation
(OPIC). The entire commitment of $50 million
was drawn in one tranche, of which $34.7 million was
utilized to repay the principal amount of NuevaTels bridge
loan. The remaining Bolivian Credit Facility proceeds will
provide funding for the expansion of NuevaTels network in
Bolivia.

Western Wireless International Corporation
(WWIC), a subsidiary of WWI, has pledged its shares
in NuevaTel to OPIC as security for the Bolivian Credit Facility
and has entered into a sponsor support agreement with OPIC
pursuant to which WWIC will have a maximum obligation to OPIC of
$11.6 million. In May 2004, WWIC secured this obligation by
providing a letter of credit in favor of OPIC, secured by cash
collateral of $11.6 million. The Bolivian Credit Facility
also limits the transfer of cash from NuevaTel to WWI.

At September 30, 2004, the outstanding
amount of principal and interest under the Bolivian Credit
Facility was $50.0 million and $0.9 million,
respectively, and the facility was fully drawn. Interest
payments required under the Bolivian Credit Facility for the
remainder of 2004 are approximately $0.9 million.

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 an unsecured term loan (the
tele.ring Term Loan). In October 2004, tele.ring
received a letter from Vodafone alleging that tele.ring breached
certain of its obligations under the tele.ring Term Loan. In the
letter, Vodafone is also alleging that it has the right to
accelerate the maturity of the loan and cause it to become
immediately due and payable. Vodafone and tele.ring have agreed
to utilize the dispute resolution procedures in the tele.ring
Term Loan to resolve this claim. tele.ring believes that this
claim is without merit and is contesting this claim vigorously.
As a result, we have continued to classify the portion of the
tele.ring Term Loan due after September 30, 2005, and
accrued interest, of $142.9 million as long-term debt.

Western Wireless International d.o.o.
(Vega) has a credit facility agreement with a
consortium of banks (the Slovenian Credit Facility)
that is denominated and repayable in euros and Slovenian Tolars.
As of September 30, 2004, $67.6 million was
outstanding under the Slovenian Credit Facility and there were
no amounts available to borrow. Principal and interest payments
and funding of related collateral accounts

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required under the Slovenian Credit Facility for
the remainder of 2004, using current exchange rates, are
approximately $6.4 million.


None of our international loan facilities have
recourse to Western Wireless Corporation. Certain of WWIs
subsidiaries have severally guaranteed the Slovenian Credit
Facility.

In July 2004, we filed a Form S-3 as a shelf
registration statement (the Shelf Registration
Statement) with the SEC. Under the Shelf Registration
Statement, we may sell, from time to time, in one or more
offerings, shares of our Class A common stock, shares of
preferred stock or debt securities in an aggregate amount of up
to $500 million. In August 2004, we utilized a portion of
the Shelf Registration Statement to complete an equity offering
of eight million shares of Class A common stock for net
proceeds of approximately $200.8 million. We intend to use
the net proceeds for general corporate purposes, to fund working
capital requirements, for making capital expenditures and for
potential acquisitions.

In February 2004, WWI acquired an additional
17.87% ownership in Meteor, our Irish subsidiary, from two of
its partners for cash of approximately $30.2 million. In
July 2004, WWI acquired the remaining 1.17% minority interest in
Meteor from its minority partners for cash of approximately
$2.0 million. Meteor is now 100% owned by WWI.

For the remainder of 2004, we anticipate spending
approximately $53 million in domestic capital expenditures
that will: (i) support the growth in MOUs on our network;
(ii) substantially complete our domestic CDMA overlay; and
(iii) expand our GSM coverage.

For the remainder of 2004, WWIs business
plans include capital expenditures of approximately
$45 million, which is primarily related to the expansion of
their networks in Austria and Ireland. In addition, WWI has debt
service requirements of approximately $11 million as well
as working capital needs of approximately $11 million in
Ireland and Slovenia. In 2004, WWI continues to explore
additional new debt financing and re-financing options. WWI
plans to fund its needs through cash flow from operations in
Austria, Haiti and Ghana, proceeds from its potential
refinancing activities, in combination with, to the extent
necessary, up to approximately $30 million in additional
contributions and advances from Western Wireless. The New Credit
Facility limits the amount we are permitted to invest in our
international subsidiaries to $250 million until
December 31, 2004 and $200 million thereafter (so long
as in each case $100 million is available under the
Revolving Credit Facility), plus certain other amounts received,
such as from the sale of any WWI stock or assets, subject to
certain conditions.

We believe that domestic operating cash flow,
operating cash flow from certain international markets and the
proceeds from our sale of common stock will be adequate to fund
our projected 2004 domestic and international capital
requirements. Our domestic business plans do not indicate a need
to increase our net borrowings under the New Credit Facility,
even though borrowing capacity is expected to exist. If we do
not achieve planned domestic operating cash flow targets,
quarterly covenants and borrowing limitations contained in the
New Credit Facility and the 9.250% Senior Notes Due 2013
(2013 Notes) may trigger a limitation on the
available borrowing capacity under the New 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 order to comply with debt covenants or in the
event that the borrowing capacity under the New Credit Facility
is limited, we may be required to curtail capital spending,
reduce expenses, or otherwise modify our planned operations
and/or raise additional capital through our Shelf Registration
Statement and/or restructure or refinance our existing financing
arrangements. 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. There can be no assurance that such
funds will be available to us or if such funding will be
available on acceptable terms.

As part of our overall business strategy, we
regularly evaluate opportunities and alternatives, including
acquisitions, dispositions, investments and sources of capital,
consummation of any of which could have a

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material effect on our business, financial
condition, liquidity or results of operations. In this regard,
we have from time to time investigated a spin-off or divestiture
of our international operations, WWI. No decision has been made
as to whether to proceed with such a transaction but in any
event it is unlikely to occur during 2005. Any such transaction
would be subject to numerous conditions, including, among
others, approval by our board of directors of the terms and
conditions of such a transaction, favorable market and financing
conditions, the tax effects of such a transaction and any
required governmental and third-party approvals.


The following table summarizes our contractual
cash obligations, utilizing current exchange rates, as of
September 30, 2004:

|                                 |                                    |                        |           |              |  |                          |         |         |  |            |         |         |  |   |        |         |  |   |           |           | 
|-------------------------------- | ---------------------------------- | ---------------------- | --------- | ------------ |  | ------------------------ | ------- | ------- |  | ---------- | ------- | ------- |  | - | ------ | ------- |  | - | --------- | --------- | 
|                                 |                                    |                        |           |              |  |                         
|                                 |                                    |                        |           | Three Months |  | Year Ending December 31,
|                                 |                                    |                        |           | Ending       |  |                         
|                                 |                                    |                        |           | December 31, |  | 2005 -                   |         | 2007 -  |  |           
|                                 |                                    | Total                  |           | 2004         |  | 2006                     |         | 2008    |  | Thereafter
|                                 |                                    |                        |           |              |  |                          |         |         |  |           
|                                 |                                    |                       
|                                 |                                    | (Dollars in thousands)
|Domestic long-term debt(1)       |                                    | $                      | 1,910,645 |              |  | $                        | 8,088   |         |  | $          | 111,532 |         |  | $ | 98,250 |         |  | $ | 1,692,775 |          
|International long-term debt(1)  |                                    |                        | 332,276   |              |  |                          | 806     |         |  |            | 244,382 |         |  |   | 54,624 |         |  |   | 32,464    |          
|Operating lease obligations      |                                    |                        | 266,979   |              |  |                          | 18,797  |         |  |            | 109,678 |         |  |   | 47,939 |         |  |   | 90,565    |          
|Purchase obligations(2)          |                                    |                        | 187,479   |              |  |                          | 151,915 |         |  |            | 35,362  |         |  |   | 202    |         |  |   |           |          
|Other contractual obligations(3) |                                    |                        | 32,457    |              |  |                          | 6,720   |         |  |            | 8,528   |         |  |   | 1,262  |         |  |   | 15,947    |          
|                                 |                                    |                        |           |              |  |                          |         |         |  |            |         |         |  |   |        |         |  |   |           |          
|                                 | Total contractual cash obligations |                        | $         | 2,729,836    |  |                          | $       | 186,326 |  |            | $       | 509,482 |  |   | $      | 202,277 |  |   | $         | 1,831,751 | 
|                                 |                                    |                        |           |              |  |                          |         |         |  |            |         |         |  |   |        |         |  |   |           |          



---



|    |                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents principal repayments on our long-term
    debt. Our long-term debt also requires that we make interest
    payments. These obligations do not include scheduled interest
    payments.
|   
|(2) | Represents open purchase order commitments at
    September 30, 2004, mainly related to infrastructure,
    handsets and annual maintenance contracts.                                           
|   
|(3) | Mainly includes our asset retirement and license
    purchase obligations and international site sharing costs.
    Excludes non-cash deferred revenue.                                          

Net cash provided by operating activities was
$345.7 million for the nine month period ended
September 30, 2004 compared to $238.6 million for the
same period in 2003. The increase in net cash provided by
operating activities was primarily a result of an improvement in
net income to $107.9 million for the nine months ended
September 30, 2004 from a net loss of $1.6 million in
the same period in 2003.

Net cash used in investing activities was
$397.7 million for the nine month period ended
September 30, 2004 compared to $60.2 million for the
same period in 2003. The year-over-year increase was primarily
due to: (i) the purchase of an additional 19.04% ownership
in Meteor in 2004; (ii) an increase in capital expenditures
in our domestic and international businesses; (iii) the
inclusion of proceeds from the sale of our Croatian joint
venture and other asset dispositions in 2003; and
(iv) purchases of marketable securities in 2004.

Net cash provided by financing activities was
$207.5 million for the nine month period ended
September 30, 2004 compared to net cash used in financing
activities of $151.7 million for the same period in 2003.
The year-over-year change was primarily due to the issuance of
eight million shares of our Class A common stock in August
2004 for net proceeds of approximately $200.8 million.

Recently Issued Accounting
Standards:

In June 2004, the Emerging Issues Task Force
(EITF) reached a consensus on Issue No. 03-01
The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments (EITF
No. 03-01), addressing the meaning of
other-than-temporary impairment and its application to debt and
equity securities within the scope of SFAS No. 115
Accounting for Certain Investments in Debt and Equity
Securities. The consensus reached states that an
investment is impaired if the fair value of the investment is

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less than its cost and should be assessed for
impairment in each reporting period. Additionally, an investment
that is impaired should be deemed other-than-temporarily
impaired unless a number of criteria are met. Disclosure
provisions in EITF 03-01 are effective for annual periods
ending after December 15, 2003. In September 2004, the
effective date of all other provisions in EITF 03-01 were
delayed. The adoption of the disclosure provisions had no
material effect on our financial position or results of
operations and we do not expect the adoption of the remaining
provisions to have a material effect on our financial position
or results of operations. Comparative information is not
required.


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Item 3.     Quantitative
and Qualitative Disclosures About Market Risk

Market Risk Management

We are exposed to various market financial risks,
including changes in interest rates and foreign currency rates.
As part of our risk management program, we utilize interest rate
caps, swaps and collars to hedge a portion of our variable rate
interest risk.

Interest Rate Risk

Our New Credit Facility is comprised of variable
rate debt that at September 30, 2004 had an outstanding
balance of $1.2 billion. The fair value of such debt
approximates the carrying value. Of this variable rate debt,
$1.0 billion was hedged using interest rate caps, swaps and
collars. The caps, swaps and collars in effect at
September 30, 2004 expire at various dates between June
2005 and August 2008. The hedges in effect at September 30,
2004 fixed LIBOR between 2.00% and 7.00%. Based on our domestic
unhedged variable rate obligations outstanding at
September 30, 2004 a hypothetical increase or decrease of
10% in the LIBOR rate would have increased or decreased our
domestic interest expense for the nine months ended
September 30, 2004 by approximately $0.4 million.

Our domestic operations have an interest rate
swap with a total notional value of $200 million which
converts fixed rate debt to variable rate debt. The interest
rate swap was entered into as a hedge of the fair value of
$200 million of the 2013 Notes. The interest rate swap
expires on the 2013 Notes maturity date and is callable at
the option of the issuer beginning July 15, 2008 with an
optional termination date of January 8, 2009, exercisable
by the issuer or us. On a semi-annual basis, we will pay a
floating rate of interest equal to the six month LIBOR plus a
fixed spread of 4.3975% and receive semi-annual fixed rate
payments of 9.25% in return. The fair value of the interest rate
swap was a liability to us of $1.5 million as of
September 30, 2004. Assuming a hypothetical increase or
decrease of 10% in interest rates, the fair value of the
interest rate swap and 2013 Notes would have changed by
approximately $6.4 million at September 30, 2004.

Our international operations also have variable
rate debt that at September 30, 2004 had an outstanding
balance of approximately $264.9 million. Of this variable
rate debt at September 30, 2004, $61.2 million was
hedged using an interest rate swap, which fixes the interest
rate at 4.94% through November 2009. Based on WWIs
unhedged variable-rate obligations outstanding at
September 30, 2004, a 10% increase or decrease in each
borrowings average interest rate would increase or
decrease WWIs interest expense for the nine month period
then ended by approximately $0.3 million.

The potential increases or decreases discussed
above are based on certain simplifying assumptions, including a
constant level of variable rate debt for all maturities and an
immediate, across-the-board increase or decrease in the level of
interest rates with no other subsequent changes for the
remainder of the period.

Foreign Currency Risk

Currently, 14% of our total international
revenues are denominated in U.S. dollars. Certain of our
international subsidiaries have functional currencies other than
the U.S. dollar and their assets and liabilities are translated
into U.S. dollars at exchange rates in effect at the balance
sheet date. Income and expense items are translated at the
average exchange rates prevailing during the period. A 10%
appreciation in the U.S. dollar would have resulted in an
approximate $2.5 million decrease in income before
provision for income taxes and cumulative change in accounting
principle for the nine months ended September 30, 2004.
Such a change in income before provision for income taxes and
cumulative change in accounting principle would have resulted
from applying a different exchange rate to translate and revalue
the financial statements of our international subsidiaries with
functional currencies other than the U.S. dollar.

At September 30, 2004, our Slovenian
operations, whose functional currency is the Slovenian Tolar,
had variable rate debt of approximately $60.2 million and
$7.4 million denominated and repayable in Euros and
Slovenian Tolars, respectively, and our Austrian operations,
whose functional currency is the Euro, had variable rate debt,
including accrued interest of approximately $214.3 million
denominated and repayable in Euros. The fair value of such debt
approximates the carrying amount on the consolidated balance
sheet at

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September 30, 2004. A 10% appreciation in
the Euro as compared to the Slovenian Tolar would have resulted
in an approximate $6.0 million decrease in income before
provision for income taxes and cumulative change in accounting
during the nine months ended September 30, 2004. Such a
change in income before provision for income taxes and
cumulative change in accounting principle would have been the
result of an unrealized foreign exchange loss. A 10%
appreciation in the Euro and Slovenian Tolar as compared to the
U.S. dollar would have resulted in an approximate
$31.3 million increase in debt outstanding at
September 30, 2004 with an offsetting currency translation
adjustment.


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|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Overview

As previously disclosed in a Current Report on
Form 8-K which we filed on November 8, 2004 and as
more fully described in Note 9 to the Condensed
Consolidated Financial Statements, we have determined that
certain direct labor costs associated with network construction
at our international operations which had originally been
recorded as operating expenses in prior periods should have been
capitalized and depreciated and required correction. We also
determined the cumulative impact of these corrections would have
resulted in a material increase to our net income for the third
quarter of 2004. The cause of this capitalization error was the
inconsistent application of our corporate accounting policies at
certain of our international operations. Accordingly, we have
amended our Annual Report on Form 10-K for the year ended
December 31, 2003 and our Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2004 and
June 30, 2004 to make these and certain other corrections.

Management also determined that the internal
control deficiency that made these restatements necessary is
indicative of a material weakness, as defined by the Public
Company Accounting Oversight Boards Auditing Standard
No. 2. The Public Company Accounting Oversight Board has
defined a material weakness as a significant deficiency,
or combination of significant deficiencies, that results in more
than a remote likelihood that a material misstatement of the
annual or interim financial statements will not be prevented or
detected. Management has reviewed this internal control
deficiency with the Companys audit committee; has
discussed it with our independent registered public accounting
firm, PricewaterhouseCoopers LLP and has advised the
Companys audit committee that this deficiency is
indicative of a material weakness in the Companys internal
control over financial reporting.

In order to remediate this internal control
deficiency, management has commenced implementation of the
following measures:



| |   |                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Increased staffing with additional personnel
    trained in financial reporting under accounting principles
    generally accepted in the United States (GAAP).                                                                                      
|
| |  | Improved documentation, communication, and
    periodic review of our accounting policies throughout our
    domestic and international locations for consistency and
    application in accordance with GAAP at each of our operating
    locations.
|
| |  | Enhanced training for our international finance
    and accounting personnel to familiarize them with the
    Companys accounting policies.                                                                                                         
|
| |  | Enhanced reporting from our international
    locations in the area of compliance with corporate accounting
    policies and more oversight by headquarters accounting personnel
    to identify any deviations from Company accounting policies.    

Evaluation of Disclosure Controls and
Procedures

As of the end of the period covered by this
report, we carried out an evaluation, under the supervision and
with the participation of our management, including our Chairman
and Chief Executive Officer along with our Executive Vice
President and Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15.

In light of the issues referenced above, our
Chairman and Chief Executive Officer along with our Executive
Vice President and Chief Financial Officer believe that our
disclosure controls and procedures were not effective at a
reasonable assurance level as of the period covered by this
report, due to the existence of the internal control deficiency
described above. However, our Chairman and Chief Executive
Officer along with our Executive Vice President and Chief
Financial Officer believe that the remediation measures when
implemented will address the internal control deficiency
described above and will allow us to conclude that our
disclosure controls and procedures are effective at a reasonable
level of assurance at future filing dates.

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Changes in Internal Control over Financial
Reporting

We have been conducting a thorough review and
evaluation of our internal controls as part of the
Companys preparation for compliance with the requirements
of Section 404 of the Sarbanes-Oxley Act of 2002. We have
dedicated substantial resources to the review of our control
processes and procedures. Based on the results of this review,
we have initiated revisions and enhancements to improve our
internal control over financial reporting. Other than such
improvements, there have been no changes in our internal control
over financial reporting that occurred during our last fiscal
quarter that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting. As part of our continued revisions and enhancements,
we have also initiated the actions described above to improve
our internal control over financial reporting. We cannot assure
that we will be able to correct the internal control deficiency
referenced above or otherwise comply with Section 404 in a
timely manner. In addition, we cannot assure that our
independent registered public accounting firm will be able to
issue unqualified attestation reports on managements
assessment of or on the operating effectiveness of our internal
control over financial reporting.

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PART II  OTHER
INFORMATION






|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

As previously disclosed, we are defending two
lawsuits filed against us in King County Superior Court in
Washington by certain former holders of minority interests in
three of our subsidiaries. The lawsuits relate to our
acquisition of the remaining minority interests in these three
subsidiaries. The plaintiffs alleged a variety of contractual
and other claims and sought an unspecified amount of damages.
During the course of discovery, the plaintiffs have asserted
claims for damages in excess of $100 million. In an order
dated September 9, 2004, the court granted our motion for
summary judgment and dismissed with prejudice plaintiffs
claims against all defendants. Plaintiffs have filed a notice of
appeal with the Court of Appeals for the state of Washington. We
believe that plaintiffs appeal is without merit and will
contest this appeal vigorously. Although litigation is subject
to inherent uncertainties, we believe that this litigation will
not have a material adverse impact on us.

In May 2003, the Federal Communications
Commission (the FCC) released a Notice of Apparent
Liability for Forfeiture proposing that we be held liable for a
$200,000 fine for allegedly failing to comply with the
FCCs environmental rules by not obtaining proper
authorization prior to constructing and operating an antenna
tower in North Dakota. We are contesting this proposed finding
and are currently assessing any other options available to us.
We believe the final outcome with the FCC will not have a
material impact on our financial position, results of operations
or cash flows.

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 an unsecured term loan (the
tele.ring Term Loan). In October 2004, tele.ring
received a letter from Vodafone alleging that tele.ring breached
certain of its obligations under the tele.ring Term Loan. In the
letter, Vodafone is also alleging that it has the right to
accelerate the maturity of the loan and cause it to become
immediately due and payable. Vodafone and tele.ring have agreed
to utilize the dispute resolution procedures in the tele.ring
Term Loan to resolve this claim. tele.ring believes that this
claim is without merit and is contesting this claim vigorously.
As a result, we have continued to classify the portion of the
tele.ring Term Loan due after September 30, 2005, and
accrued interest, of $142.9 million as long-term debt.

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






|        |                                                                
|------- | ---------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and
    Use of Proceeds

None






|        |                                    
|------- | -----------------------------------
|Item 3. | Defaults upon Senior
    Securities

None






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

None






|        |                  
|------- | -----------------
|Item 5. | Other Information

None

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|        |         
|------- | --------
|Item 6. | Exhibits

|        |    |             |  |                                                                                                                                                                                                                                                                                          
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    | Description
|        |    |            
|        | 12 | .1          |  | Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                        
|        | 31 | .1          |  | Certification of John W. Stanton, Chairman and
    Chief Executive Officer of Western Wireless Corporation,
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    (Rule13a-14(a))                                                                                            
|        | 31 | .2          |  | Certification of M. Wayne Wisehart, Executive
    Vice President and Chief Financial Officer of Western Wireless
    Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (Rule 13a-14(a))                                                                         
|        | 32 | .1          |  | Certification of John W. Stanton, Chairman and
    Chief Executive Officer of Western Wireless Corporation,
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    (Subsections (a) and (b) of Section 1350, Chapter 63 of
    Title 18, United States Code)                  
|        | 32 | .2          |  | Certification of M. Wayne Wisehart, Executive
    Vice President and Chief Financial Officer of Western Wireless
    Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of
    Title 18, United States Code)

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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/ M. WAYNE WISEHART

| |                            
| | ---------------------------
| |                            
| | M. Wayne Wisehart          
| | Executive Vice President   
| | and Chief Financial Officer



| |     |                
| | --- | ---------------
| | By: | /s/ SCOTT SOLEY

| |                              
| | -----------------------------
| |                              
| | Scott Soley                  
| | Vice President and Controller
| | (Chief Accounting Officer)   

Dated: November 15, 2004

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EXHIBIT INDEX

|        |    |             |  |                                                                                                                                                                                                                                                                                          
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    | Description
|        |    |            
|        | 12 | .1          |  | Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                        
|        | 31 | .1          |  | Certification of John W. Stanton, Chairman and
    Chief Executive Officer of Western Wireless Corporation,
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    (Rule 13a-14(a))                                                                                           
|        | 31 | .2          |  | Certification of M. Wayne Wisehart, Executive
    Vice President and Chief Financial Officer of Western Wireless
    Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (Rule 13a-14(a))                                                                         
|        | 32 | .1          |  | Certification of John W. Stanton, Chairman and
    Chief Executive Officer of Western Wireless Corporation,
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    (Subsections (a) and (b) of Section 1350, Chapter 63
    of Title 18, United States Code)                  
|        | 32 | .2          |  | Certification of M. Wayne Wisehart, Executive
    Vice President and Chief Financial Officer of Western Wireless
    Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002 (Subsections (a) and (b) of Section 1350,
    Chapter 63 of Title 18, United States Code)

53