##### 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 March 31,
    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 May 3, 2004
|                                   |  |                                     
|Class A Common Stock, no par value |  |                                      | 85,035,907 | 
|Class B Common Stock, no par value |  |                                      | 6,792,721  | 



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WESTERN WIRELESS CORPORATION

FORM 10-Q

For the Quarter Ended March 31,
2004


TABLE OF CONTENTS

|                                   |  |                                                                                                                                            |    |      |    | 
|---------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ | -- | ---- | -- | 
|                                   |  |                                                                                                                                            |    | Page
|                                   |  |                                                                                                                                            |    |     
|PART I  FINANCIAL
    INFORMATION
|Item 1.                            |  | Financial Statements (unaudited)                                                                                                           |    |      |    | 
|                                   |  | Condensed Consolidated
    Balance Sheets as of March 31, 2004 and December 31,
    2003                                                   |    |      | 2  | 
|                                   |  | Condensed Consolidated
    Statements of Operations and Comprehensive Income (Loss) for the
    Three Months Ended March 31, 2004 and 2003 |    |      | 3  | 
|                                   |  | Condensed Consolidated
    Statements of Cash Flows for the Three Months Ended
    March 31, 2004 and 2003                                 |    |      | 5  | 
|                                   |  | Notes to Condensed
    Consolidated Financial Statements                                                                                   |    |      | 6  | 
|Item 2.                            |  | Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations                                              |    |      | 15 | 
|Item 3.                            |  | Quantitative and
    Qualitative Disclosures about Market Risk                                                                             |    |      | 27 | 
|Item 4.                            |  | Controls and
    Procedures                                                                                                                |    |      | 28 | 
|PART II 
    OTHER INFORMATION   
|Item 1.                            |  | Legal
    Proceedings                                                                                                                      |    |      | 29 | 
|Item 2.                            |  | Changes in Securities,
    Use of Proceeds and Issuer Purchases of Equity
    Securities                                                   |    |      | 29 | 
|Item 3.                            |  | Defaults Upon Senior
    Securities                                                                                                        |    |      | 29 | 
|Item 4.                            |  | Submission of Matters to
    a Vote of Security Holders                                                                                    |    |      | 29 | 
|Item 5.                            |  | Other
    Information                                                                                                                      |    |      | 29 | 
|Item 6.                            |  | Exhibits and Reports on
    Form 8-K                                                                                                       |    |      | 29 | 
|Signatures                         |  |                                                                                                                                            | 31 |     
|Exhibit Index                      |  |                                                                                                                                            | 32 |     
|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)


|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |            |           |  
|--------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | --------- | ------------ | --------- | - | --------- | ---------- | --------- | -
|                                                                                                                      |                                                                                                                                                    | March 31,                                            |           | December 31,
|                                                                                                                      |                                                                                                                                                    | 2004                                                 |           | 2003        
|                                                                                                                      |                                                                                                                                                    |                                                      |           |             
|                                                                                                                      |                                                                                                                                                    | (Unaudited)                                          |           |             
|ASSETS                                                                                                               
|Current assets:                                                                                                       |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      | Cash and cash equivalents                                                                                                                          |                                                      | $         | 121,890      |           |   | $         | 128,597    |          
|                                                                                                                      | Accounts receivable, net of allowance for
    doubtful accounts of $24,089 and $24,523, respectively                                               |                                                      |           | 217,510      |           |   |           | 215,813    |          
|                                                                                                                      | Inventory                                                                                                                                          |                                                      |           | 27,165       |           |   |           | 30,182     |          
|                                                                                                                      | Marketable securities                                                                                                                              |                                                      |           | 3,035        |           |   |           | 351        |          
|                                                                                                                      | Prepaid expenses and other current assets                                                                                                          |                                                      |           | 34,004       |           |   |           | 22,716     |          
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      |                                                                                                                                                    | Total current assets                                 |           |              | 403,604   |   |           |            | 397,659   |  
|Property and equipment, net of accumulated
    depreciation of $979,702 and $932,915, respectively                    |                                                                                                                                                    |                                                      | 904,689   |              |           |   | 901,866   |           
|Licensing costs and other intangible assets, net
    of accumulated amortization of $30,768 and $27,512, respectively |                                                                                                                                                    |                                                      | 1,214,791 |              |           |   | 1,189,744 |           
|Investments in and advances to unconsolidated
    affiliates                                                          |                                                                                                                                                    |                                                      | 9,392     |              |           |   | 9,353     |           
|Other assets                                                                                                          |                                                                                                                                                    |                                                      | 17,036    |              |           |   | 23,062    |           
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      |                                                                                                                                                    | $                                                    | 2,549,512 |              |           | $ | 2,521,684 |           
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                     
|LIABILITIES AND NET CAPITAL
    DEFICIENCY                                                                           
|Current liabilities:                                                                                                  |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      | Accounts payable                                                                                                                                   |                                                      | $         | 74,009       |           |   | $         | 100,651    |          
|                                                                                                                      | Accrued liabilities and other                                                                                                                      |                                                      |           | 216,626      |           |   |           | 203,753    |          
|                                                                                                                      | Construction accounts payable                                                                                                                      |                                                      |           | 35,867       |           |   |           | 31,061     |          
|                                                                                                                      | Current portion of long-term debt                                                                                                                  |                                                      |           | 48,334       |           |   |           | 47,318     |          
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      |                                                                                                                                                    | Total current liabilities                            |           |              | 374,836   |   |           |            | 382,783   |  
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|Long-term liabilities:                                                                                                |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      | Long-term debt, net of current portion                                                                                                             |                                                      |           | 2,167,648    |           |   |           | 2,172,893  |          
|                                                                                                                      | Deferred income taxes                                                                                                                              |                                                      |           | 157,028      |           |   |           | 150,977    |          
|                                                                                                                      | Other long-term liabilities                                                                                                                        |                                                      |           | 41,067       |           |   |           | 39,565     |          
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      |                                                                                                                                                    | Total long-term liabilities                          |           |              | 2,365,743 |   |           |            | 2,363,435 |  
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|Minority interests in consolidated subsidiaries                                                                       |                                                                                                                                                    |                                                      | 18,688    |              |           |   | 22,083    |           
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|Commitments and contingencies
    (Note 4)                                                                            |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|Net capital deficiency:                                                                                               |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      | Preferred stock, no par value,
    50,000,000 shares authorized; no shares issued and
    outstanding                                              |                                                      |           |              |           |   |           |            |          
|                                                                                                                      | Common stock, no par value,
    300,000,000 shares authorized; Class A, 85,032,602 and
    84,663,930 shares issued and outstanding, respectively; |                                                      |           |              |           |   |           |            |          
|                                                                                                                      |                                                                                                                                                    | Class B, 6,792,721 shares issued and
    outstanding |           |              | 903,497   |   |           |            | 899,304   |  
|                                                                                                                      | Deferred compensation                                                                                                                              |                                                      |           | (84          | )         |   |           | (112       | )        
|                                                                                                                      | Accumulated other comprehensive loss                                                                                                               |                                                      |           | (15,316      | )         |   |           | (16,514    | )        
|                                                                                                                      | Deficit                                                                                                                                            |                                                      |           | (1,097,852   | )         |   |           | (1,129,295 | )        
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      |                                                                                                                                                    | Total net capital deficiency                         |           |              | (209,755  | ) |           |            | (246,617  | )
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           
|                                                                                                                      |                                                                                                                                                    | $                                                    | 2,549,512 |              |           | $ | 2,521,684 |           
|                                                                                                                      |                                                                                                                                                    |                                                      |           |              |           |   |           |           

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)


|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |         |         |  
|------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ------ | ------- | ------- | - | ------- | ------- | ------- | -
|                                                                                                  |                                                                                                                                                 |                         
|                                                                                                  |                                                                                                                                                 | Three Months Ended      
|                                                                                                  |                                                                                                                                                 | March 31,               
|                                                                                                  |                                                                                                                                                 |                         
|                                                                                                  |                                                                                                                                                 | 2004                     |        | 2003   
|                                                                                                  |                                                                                                                                                 |                          |        |        
|                                                                                                  |                                                                                                                                                 |                         
|                                                                                                  |                                                                                                                                                 | (Unaudited)             
|Revenues:                                                                                         |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  | Subscriber revenues                                                                                                                             |                          | $      | 348,489 |         |   | $       | 233,324 |        
|                                                                                                  | Roamer revenues                                                                                                                                 |                          |        | 63,681  |         |   |         | 62,078  |        
|                                                                                                  | Fixed line revenues                                                                                                                             |                          |        | 12,883  |         |   |         | 15,051  |        
|                                                                                                  | Equipment sales                                                                                                                                 |                          |        | 20,531  |         |   |         | 13,043  |        
|                                                                                                  | Other revenues                                                                                                                                  |                          |        | 3,360   |         |   |         | 3,678   |        
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  |                                                                                                                                                 | Total revenues           |        |         | 448,944 |   |         |         | 327,174 |  
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Operating expenses:                                                                               |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  | Cost of service (exclusive of depreciation and
    accretion and stock-based compensation, net of $73 and $0,
    respectively, included below) |                          |        | 121,374 |         |   |         | 94,635  |        
|                                                                                                  | Cost of equipment sales                                                                                                                         |                          |        | 47,664  |         |   |         | 32,661  |        
|                                                                                                  | General and administrative (exclusive of
    stock-based compensation, net of $1,674 and $0, respectively,
    included below)                  |                          |        | 73,780  |         |   |         | 58,105  |        
|                                                                                                  | Sales and marketing                                                                                                                             |                          |        | 63,635  |         |   |         | 47,464  |        
|                                                                                                  | Depreciation, amortization and accretion                                                                                                        |                          |        | 58,719  |         |   |         | 65,813  |        
|                                                                                                  | Asset dispositions                                                                                                                              |                          |        |         |         |   |         | 7,640   |        
|                                                                                                  | Stock-based compensation, net                                                                                                                   |                          |        | 1,747   |         |   |         |         |        
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  |                                                                                                                                                 | Total operating expenses |        |         | 366,919 |   |         |         | 306,318 |  
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Other income (expense):                                                                           |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  | Interest and financing expense, net                                                                                                             |                          |        | (34,256 | )       |   |         | (38,479 | )      
|                                                                                                  | Equity in net income (loss) of unconsolidated
    affiliates, net of tax                                                                        |                          |        | 1,236   |         |   |         | (1,057  | )      
|                                                                                                  | Other, net                                                                                                                                      |                          |        | (6,802  | )       |   |         | (1,024  | )      
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  |                                                                                                                                                 | Total other expense      |        |         | (39,822 | ) |         |         | (40,560 | )
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Minority interests in net (income) loss of
    consolidated subsidiaries                          |                                                                                                                                                 |                          | (2,461 | )       |         |   | 2,392   |        
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Income (loss) before provision for income taxes
    and cumulative change in accounting principle |                                                                                                                                                 |                          | 39,742 |         |         |   | (17,312 | )      
|Provision for income taxes                                                                        |                                                                                                                                                 |                          | (8,299 | )       |         |   | (4,490  | )      
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Income (loss) before cumulative change in
    accounting principle                                |                                                                                                                                                 |                          | 31,443 |         |         |   | (21,802 | )      
|Cumulative change in accounting principle                                                         |                                                                                                                                                 |                          |        |         |         |   | (2,231  | )      
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  |                                                                                                                                                 | Net income (loss)        |        | $       | 31,443  |   |         | $       | (24,033 | )
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Basic income (loss) per share:                                                                    |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  | Before cumulative change in accounting principle                                                                                                |                          | $      | 0.34    |         |   | $       | (0.27   | )      
|                                                                                                  | Cumulative change in accounting principle                                                                                                       |                          |        |         |         |   |         | (0.03   | )      
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Basic income (loss) per share                                                                     |                                                                                                                                                 | $                        | 0.34   |         |         | $ | (0.30   | )      
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Diluted income (loss) per share:                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|                                                                                                  | Before cumulative change in accounting principle                                                                                                |                          | $      | 0.32    |         |   | $       | (0.27   | )      
|                                                                                                  | Cumulative change in accounting principle                                                                                                       |                          |        |         |         |   |         | (0.03   | )      
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        
|Diluted income (loss) per share                                                                   |                                                                                                                                                 | $                        | 0.32   |         |         | $ | (0.30   | )      
|                                                                                                  |                                                                                                                                                 |                          |        |         |         |   |         |        

See accompanying notes to the condensed
consolidated financial statements

3



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##### Table of Contents






WESTERN WIRELESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND

COMPREHENSIVE INCOME (LOSS) 
(Continued)


(Dollars in thousands, except per share
data)


|                                  |                                                    |                             |                                              |        |        |        |         |         |       |       |  
|--------------------------------- | -------------------------------------------------- | --------------------------- | -------------------------------------------- | ------ | ------ | ------ | ------- | ------- | ----- | ----- | -
|                                  |                                                    |                            
|                                  |                                                    | Three Months Ended         
|                                  |                                                    | March 31,                  
|                                  |                                                    |                            
|                                  |                                                    | 2004                        |                                              | 2003  
|                                  |                                                    |                             |                                              |       
|                                  |                                                    |                            
|                                  |                                                    | (Unaudited)                
|Comprehensive income (loss):      |                                                    |                             |                                              |        |        |        |         |        
|                                  | Net income (loss)                                  |                             | $                                            | 31,443 |        |        | $       | (24,033 | )    
|                                  | Unrealized income (loss) on marketable securities: |                             |                                              |        |        |        |         |         |      
|                                  |                                                    | Reclassification adjustment |                                              |        |        |        |         |         | 76    |      
|                                  |                                                    | Unrealized holding loss     |                                              |        | (1,517 | )      |         |         | (534  | )    
|                                  |                                                    |                             |                                              |        |        |        |         |        
|                                  |                                                    |                             | Net unrealized loss on marketable securities |        |        | (1,517 | )       |         |       | (458  | )
|                                  |                                                    |                             |                                              |        |        |        |         |        
|                                  | Unrealized income on hedges:                       |                             |                                              |        |        |        |         |         |      
|                                  |                                                    | Reclassification adjustment |                                              |        | 459    |        |         |         |       |      
|                                  |                                                    | Unrealized gain on hedges   |                                              |        | 4,797  |        |         |         | 1,317 |      
|                                  |                                                    |                             |                                              |        |        |        |         |        
|                                  |                                                    |                             | Net unrealized income on hedges              |        |        | 5,256  |         |         |       | 1,317 |  
|                                  |                                                    |                             |                                              |        |        |        |         |        
|                                  | Foreign currency translation                       |                             |                                              | (2,541 | )      |        |         | 51      |      
|                                  |                                                    |                             |                                              |        |        |        |         |        
|Total comprehensive income (loss) |                                                    | $                           | 32,641                                       |        |        | $      | (23,123 | )      
|                                  |                                                    |                             |                                              |        |        |        |         |        

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)


|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |         |        |         |  
|---------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ----------------------------------------- | ------- | ------- | ------- | ------ | ------- | ------ | ------- | -
|                                               |                                                                                              |                                                                                                 
|                                               |                                                                                              | Three Months Ended                                                                              
|                                               |                                                                                              | March 31,                                                                                       
|                                               |                                                                                              |                                                                                                 
|                                               |                                                                                              | 2004                                                                                             |                                           | 2003   
|                                               |                                                                                              |                                                                                                  |                                           |        
|                                               |                                                                                              |                                                                                                 
|                                               |                                                                                              | (Unaudited)                                                                                     
|Operating activities:                          |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|                                               | Net income (loss)                                                                            |                                                                                                  | $                                         | 31,443  |         |         | $      | (24,033 | )     
|                                               | Adjustments to reconcile net income (loss) to net
    cash provided by operating activities: |                                                                                                  |                                           |         |         |         |        |         |       
|                                               |                                                                                              | Cumulative change in accounting principle                                                        |                                           |         |         |         |        |         | 2,231  |        
|                                               |                                                                                              | Depreciation, amortization and accretion                                                         |                                           |         | 59,966  |         |        |         | 66,700 |        
|                                               |                                                                                              | Deferred income taxes                                                                            |                                           |         | 6,051   |         |        |         | 3,809  |        
|                                               |                                                                                              | Asset dispositions                                                                               |                                           |         |         |         |        |         | 7,640  |        
|                                               |                                                                                              | Equity in net (income) loss of unconsolidated
    affiliates, net of cash distributions received |                                           |         | (222    | )       |        |         | 4,396  |        
|                                               |                                                                                              | Minority interests in net income (loss) of
    consolidated subsidiaries                         |                                           |         | 2,461   |         |        |         | (2,392 | )      
|                                               |                                                                                              | Adjustment of interest rate hedges to fair market
    value                                      |                                           |         | 7,533   |         |        |         | (2,185 | )      
|                                               |                                                                                              | Non-cash interest                                                                                |                                           |         | 2,865   |         |        |         | 2,498  |        
|                                               |                                                                                              | Other, net                                                                                       |                                           |         | 787     |         |        |         | 3,130  |        
|                                               |                                                                                              | Changes in operating assets and liabilities                                                      |                                           |         | (16,811 | )       |        |         | 8,649  |        
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|                                               |                                                                                              |                                                                                                  | Net cash provided by operating activities |         |         | 94,073  |        |         |        | 70,443  |  
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|Investing activities:                          |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|                                               | Purchase of property and equipment                                                           |                                                                                                  |                                           | (62,031 | )       |         |        | (51,748 | )     
|                                               | Purchase of minority interests                                                               |                                                                                                  |                                           | (31,163 | )       |         |        |         |       
|                                               | Purchases of marketable securities                                                           |                                                                                                  |                                           | (4,201  | )       |         |        |         |       
|                                               | Other, net                                                                                   |                                                                                                  |                                           | 694     |         |         |        | (1,331  | )     
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|                                               |                                                                                              |                                                                                                  | Net cash used in investing activities     |         |         | (96,701 | )      |         |        | (53,079 | )
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|Financing activities:                          |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|                                               | Additions to long-term debt                                                                  |                                                                                                  |                                           |         |         |         |        | 24,504  |       
|                                               | Repayment of long-term debt                                                                  |                                                                                                  |                                           | (24     | )       |         |        | (27,718 | )     
|                                               | Dividends paid to minority partners                                                          |                                                                                                  |                                           | (4,410  | )       |         |        |         |       
|                                               | Issuances of common stock, net                                                               |                                                                                                  |                                           | 1,851   |         |         |        | 52      |       
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|                                               |                                                                                              |                                                                                                  | Net cash used in financing activities     |         |         | (2,583  | )      |         |        | (3,162  | )
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|Effect of exchange rate changes                |                                                                                              |                                                                                                  | (1,496                                    | )       |         |         | 300    |        
|Change in cash and cash equivalents            |                                                                                              |                                                                                                  | (6,707                                    | )       |         |         | 14,502 |        
|Cash and cash equivalents, beginning of period |                                                                                              |                                                                                                  | 128,597                                   |         |         |         | 62,429 |        
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        
|Cash and cash equivalents, end of period       |                                                                                              | $                                                                                                | 121,890                                   |         |         | $       | 76,931 |        
|                                               |                                                                                              |                                                                                                  |                                           |         |         |         |        |        

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 wireless
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
March 31, 2004 and 2003, are presented herein, and reflect
all adjustments, which are, in the opinion of management,
necessary for a fair presentation of the financial position,
results of operations and cash flows for the periods presented.
Results of operations for interim periods presented herein are
not necessarily indicative of results of operations for the
entire year. For further information, refer to our annual
audited financial statements and footnotes thereto contained in
the Companys Form 10-K for the year ended
December 31, 2003.



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



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

Certain amounts in prior years 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 March 31, 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.



| |                                      
| | -------------------------------------
| | 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 the 9.250% Senior Notes
due July 2013 (2013 Notes). The interest rate swap
expires in July 2013 in conjunction with 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 Statement of Financial
Accounting Standards (SFAS)

6



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

No. 133, Accounting for Derivative
Instruments and Hedging Activities. This interest rate
swap agreement had no impact on our condensed consolidated
statement of operations and comprehensive income (loss) for the
three months ended March 31, 2004. The fair value of the
interest rate swap at March 31, 2004 was $1.9 million
with an offset classified as long-term debt in our condensed
consolidated balance sheet.



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

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

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

|                                 |                                                                                                |                        |   |        |   |  |   |         |  
|-------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------- | - | ------ | - |  | - | ------- | -
|                                 |                                                                                                |                       
|                                 |                                                                                                | Three Months Ended    
|                                 |                                                                                                | March 31,             
|                                 |                                                                                                |                       
|                                 |                                                                                                | 2004                   |   | 2003  
|                                 |                                                                                                |                        |   |       
|                                 |                                                                                                |                       
|                                 |                                                                                                | (Dollars in thousands,
|                                 |                                                                                                | except per share data)
|Net income (loss):               |                                                                                                |                        |   |        |   |  |   |        
|                                 | As reported                                                                                    |                        | $ | 31,443 |   |  | $ | (24,033 | )
|                                 | Add: stock-based compensation expense included in
    reported net income (loss)               |                        |   | 1,747  |   |  |   |         |  
|                                 | Deduct: stock-based compensation expense
    determined under fair value method for all awards |                        |   | (3,691 | ) |  |   | (1,235  | )
|                                 |                                                                                                |                        |   |        |   |  |   |        
|                                 | Pro forma net income (loss)                                                                    |                        | $ | 29,499 |   |  | $ | (25,268 | )
|                                 |                                                                                                |                        |   |        |   |  |   |        
|Basic income (loss) per share:   |                                                                                                |                        |   |        |   |  |   |        
|                                 | As reported                                                                                    |                        | $ | 0.34   |   |  | $ | (0.30   | )
|                                 |                                                                                                |                        |   |        |   |  |   |        
|                                 | Pro forma                                                                                      |                        | $ | 0.32   |   |  | $ | (0.32   | )
|                                 |                                                                                                |                        |   |        |   |  |   |        
|Diluted income (loss) per share: |                                                                                                |                        |   |        |   |  |   |        
|                                 | As reported                                                                                    |                        | $ | 0.32   |   |  | $ | (0.30   | )
|                                 |                                                                                                |                        |   |        |   |  |   |        
|                                 | Pro forma                                                                                      |                        | $ | 0.29   |   |  | $ | (0.32   | )
|                                 |                                                                                                |                        |   |        |   |  |   |        

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:

|                                         |  |              |      |      |  |  |      |  
|---------------------------------------- |  | ------------ | ---- | ---- |  |  | ---- | -
|                                         |  |             
|                                         |  | Three Months
|                                         |  | Ended       
|                                         |  | March 31,   
|                                         |  |             
|                                         |  | 2004         |      | 2003
|                                         |  |              |      |     
|Weighted average risk free interest rate |  |              | 4.0  | %    |  |  | 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.

7



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                
|-- | ---------------
|3. | Long-Term Debt:

|                                                   |            |                        |           |              |  |   |           |         | 
|-------------------------------------------------- | ---------- | ---------------------- | --------- | ------------ |  | - | --------- | ------- | 
|                                                   |            | March 31,              |           | December 31,
|                                                   |            | 2004                   |           | 2003        
|                                                   |            |                        |           |             
|                                                   |            |                       
|                                                   |            | (Dollars in thousands)
|Credit Facility:                                   |            |                        |           |              |  |   |           |        
|                                                   | Revolvers  |                        | $         | 350,000      |  |   | $         | 350,000 | 
|                                                   | Term Loans |                        |           | 822,000      |  |   |           | 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                                |            |                        | 194,647   |              |  |   | 200,753   |        
|Slovenian Credit Facility                          |            |                        | 67,350    |              |  |   | 69,438    |        
|Bolivian Bridge Loan                               |            |                        | 34,700    |              |  |   | 34,700    |        
|Other                                              |            |                        | 32,285    |              |  |   | 28,320    |        
|                                                   |            |                        |           |              |  |   |           |        
|                                                   |            |                        | 2,215,982 |              |  |   | 2,220,211 |        
|Less current portion                               |            |                        | (48,334   | )            |  |   | (47,318   | )      
|                                                   |            |                        |           |              |  |   |           |        
|                                                   |            | $                      | 2,167,648 |              |  | $ | 2,172,893 |        
|                                                   |            |                        |           |              |  |   |           |        

The aggregate amounts of principal maturities as
of March 31, 2004, are as follows (dollars in thousands):

|                                     |            |   |           |         | 
|------------------------------------ | ---------- | - | --------- | ------- | 
|Nine months ending December 31, 2004 |            | $ | 48,309    |        
|Year ending December 31,             |            |   |           |        
|                                     | 2005       |   |           | 228,896 | 
|                                     | 2006       |   |           | 401,516 | 
|                                     | 2007       |   |           | 219,118 | 
|                                     | 2008       |   |           | 593,035 | 
|                                     | Thereafter |   |           | 725,108 | 
|                                     |            |   |           |        
|                                     |            | $ | 2,215,982 |        
|                                     |            |   |           |        



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

At March 31, 2004, we had a
$1.55 billion senior secured credit facility with a
consortium of lenders (the Credit Facility)
consisting of (i) a $350 million term loan (Term
Loan A); (ii) a $500 million term loan
(Term Loan B); and (iii) two
$350 million revolving loans (Revolver A and
Revolver B).

The Credit Facility requires us to make mandatory
prepayments from excess cash flow and from certain proceeds of
certain indebtedness. On April 30, 2004, we were required
to prepay approximately $63 million of indebtedness under
the Credit Facility from excess cash flow and we subsequently
reborrowed $63 million under Revolver A of the Credit
Facility. The Credit Facility further limits the amount we are
permitted to invest in our international subsidiaries from
January 1, 2003 to $100 million plus certain other
amounts received, such as the proceeds from the sale of Croatia.
We were in compliance with our financial covenants under the
Credit Facility at March 31, 2004 and had approximately
$300 million available to borrow under Revolver A. As of
May 7, 2004 giving effect to the repayment and reborrowing
(discussed above), we had approximately $235 million
available to borrow under the Credit Facility.

On April 22, 2004, we executed a commitment
letter with Wachovia Bank, National Association, and
JP Morgan Chase Bank for a $1.5 billion senior secured
credit facility, which contemplates a refinancing of

8



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

our Credit Facility (the New Credit
Facility). Proceeds from the New Credit Facility will be
used to repay the outstanding obligations under the Credit
Facility and for working capital and other corporate purposes.
Upon consummation of the refinancing of the Credit Facility, we
will recognize a loss on extinguishment of debt for the quarter
ending June 30, 2004 of approximately $13 million for
the write-off of the existing deferred financing costs relating
to the Credit Facility.

Entering into the New Credit Facility is subject
to, among other things, negotiation of definitive documentation
and syndication of the facility. There can be no assurance that
the New Credit Facility will be completed.



| |                      
| | ---------------------
| | Bolivian Bridge Loan:

In October 2000, NuevaTel, S.A.
(NuevaTel), a subsidiary of WWI, entered into a
bridge loan facility (Bolivian Bridge Loan) to
provide funding for the build-out and implementation of
NuevaTels network in Bolivia. WWI has guaranteed its
prorata share (71.5%), based upon its ownership interest in
NuevaTel, of the Bolivian Bridge Loan.

In April 2004, NuevaTel finalized the terms of a
credit facility agreement (Bolivian Credit Facility)
with the Overseas Private Investment Corporation
(OPIC). The Bolivian Credit Facility will be
utilized to refinance the Bolivian Bridge Loan and to provide
funding for the implementation and expansion of NuevaTels
network in Bolivia.

We anticipate funding of the Bolivian Credit
Facilitys entire commitment of $50 million in one
tranche in May 2004. 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.

As of March 31, 2004, the outstanding amount
under the Bolivian Bridge Loan was $34.7 million and the
facility was fully drawn. The maturity date of the Bolivian
Bridge Loan has been extended until May 21, 2004. Until the
Bolivian Credit Facility closes, we intend to seek additional
extensions of the Bolivian Bridge Loan maturity date, but there
can be no assurance that any necessary extension will be granted.



|   |                               
|-- | ------------------------------
|4. | Commitments and 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 force,
including U.S. Marines, arrived in Haiti to secure key
areas and restore order in the country. COMCELs network
has 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 retail
locations are back to normal operations.

9



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                                
|-- | -------------------------------
|5. | Income (Loss) Per Common Share:

SFAS No. 128, Earnings Per
Share, requires two presentations of income (loss) per
share  basic and diluted.
Basic income (loss) per share is calculated using the weighted
average number of shares outstanding during the period. Diluted
income (loss) per share is computed on the basis of the weighted
average number of common shares outstanding plus the dilutive
effect of outstanding stock options, convertible debt and the
employee stock purchase plan using the treasury
stock method or the if converted method, as
applicable.

For loss periods, all options outstanding would
be considered antidilutive. For the three months ended
March 31, 2004 and 2003, weighted average shares issuable
upon the exercise of stock options, which were not included in
the calculation because they were antidilutive, were 761,000 and
2,990,000, respectively. 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. The calculation of diluted income per share for the
three months ended March 31, 2004, included the assumed
conversion of our 4.625% Convertible Subordinated Notes
into Class A common stock and the exercise of stock
options. Stock option exercises and the conversion of all or a
portion of the 4.625% Convertible Subordinated Notes could
potentially dilute basic income per share in the future.

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

|                                                 |                                                                               |                                                                      |   |            |        |  |   |            |   | 
|------------------------------------------------ | ----------------------------------------------------------------------------- | -------------------------------------------------------------------- | - | ---------- | ------ |  | - | ---------- | - | 
|                                                 |                                                                               |                                                                     
|                                                 |                                                                               | Three Months Ended March 31,                                        
|                                                 |                                                                               |                                                                     
|                                                 |                                                                               | 2004                                                                 |   | 2003      
|                                                 |                                                                               |                                                                      |   |           
|                                                 |                                                                               |                                                                     
|                                                 |                                                                               | (Dollars in thousands, except                                       
|                                                 |                                                                               | per share data)                                                     
|Basic income (loss) per share
    computation:   |                                                                               |                                                                      |   |            |        |  |   |           
|Numerator:                                       |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 | Income (loss) before cumulative change in
    accounting principle            |                                                                      | $ | 31,443     |        |  | $ | (21,802    | )
|                                                 | Cumulative change in accounting principle                                     |                                                                      |   |            |        |  |   | (2,231     | )
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 | Net income (loss)                                                             |                                                                      | $ | 31,443     |        |  | $ | (24,033    | )
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           
|Denominator:                                     |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 | Weighted average common shares outstanding                                    |                                                                      |   | 91,708,000 |        |  |   | 79,185,000 |  
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           
|Basic income (loss) per share:                   |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 | Before cumulative change in accounting principle                              |                                                                      | $ | 0.34       |        |  | $ | (0.27      | )
|                                                 | Cumulative change in accounting principle                                     |                                                                      |   |            |        |  |   | (0.03      | )
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 | Basic income (loss) per share                                                 |                                                                      | $ | 0.34       |        |  | $ | (0.30      | )
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           
|Diluted income (loss) per share
    computation: |                                                                               |                                                                      |   |            |        |  |   |           
|Numerator:                                       |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 | Income (loss) before cumulative change in
    accounting principle            |                                                                      | $ | 31,443     |        |  | $ | (21,802    | )
|                                                 | Add back interest and financing expense on
    convertible subordinated notes |                                                                      |   | 1,378      |        |  |   |            |  
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 |                                                                               | Adjusted income before cumulative change in
    accounting principle |   |            | 32,821 |  |   |            |   | 
|                                                 | Cumulative change in accounting principle                                     |                                                                      |   |            |        |  |   | (2,231     | )
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           
|                                                 | Adjusted net income (loss)                                                    |                                                                      | $ | 32,821     |        |  | $ | (24,033    | )
|                                                 |                                                                               |                                                                      |   |            |        |  |   |           

10



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                 |                                                    |                               |   |             |  |  |   |            |  
|-------------------------------- | -------------------------------------------------- | ----------------------------- | - | ----------- |  |  | - | ---------- | -
|                                 |                                                    |                              
|                                 |                                                    | Three Months Ended March 31, 
|                                 |                                                    |                              
|                                 |                                                    | 2004                          |   | 2003       
|                                 |                                                    |                               |   |            
|                                 |                                                    |                              
|                                 |                                                    | (Dollars in thousands, except
|                                 |                                                    | per share data)              
|Denominator:                     |                                                    |                               |   |             |  |  |   |           
|                                 | Weighted average common shares outstanding         |                               |   | 91,708,000  |  |  |   | 79,185,000 |  
|                                 | Assumed exercise of stock options                  |                               |   | 2,276,000   |  |  |   |            |  
|                                 | Assumed exercise of convertible subordinated notes |                               |   | 7,441,000   |  |  |   |            |  
|                                 |                                                    |                               |   |             |  |  |   |           
|                                 | Diluted weighted average shares outstanding        |                               |   | 101,425,000 |  |  |   | 79,185,000 |  
|                                 |                                                    |                               |   |             |  |  |   |           
|Diluted income (loss) per share: |                                                    |                               |   |             |  |  |   |           
|                                 | Before cumulative change in accounting principle   |                               | $ | 0.32        |  |  | $ | (0.27      | )
|                                 | Cumulative change in accounting principle          |                               |   |             |  |  |   | (0.03      | )
|                                 |                                                    |                               |   |             |  |  |   |           
|                                 | Diluted income (loss) per share                    |                               | $ | 0.32        |  |  | $ | (0.30      | )
|                                 |                                                    |                               |   |             |  |  |   |           



|   |                                                            
|-- | -----------------------------------------------------------
|6. | Acquisitions, Dispositions and Discontinued
    Operations:



| |                          
| | -------------------------
| | PCS Licenses Acquisition:

In April 2004, we entered into a roaming
agreement and a series of related agreements with WirelessCo,
L.P. (Sprint PCS) and certain of its subsidiaries
whereby we agreed to purchase, for a nominal amount of cash,
certain domestic Federal Communications Commission licenses from
Sprint PCS to expand our wireless network. We have agreed to
provide discounted roaming services and to meet certain buildout
commitments. Sprint PCS has agreed to prefer our network in
certain locations for its customers and to purchase wireless
service from us for resale to Qwest Wireless LLC through 2009.



| |         
| | --------
| | 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 $28.7 million in
additional license cost and a $1.5 million reduction of
minority interests in consolidated subsidiaries.



| |         
| | --------
| | 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.



|   |                                                
|-- | -----------------------------------------------
|7. | 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 of consolidated subsidiaries and operating
entities around the world. Our Chief Executive Officer evaluates
international operations on a country by country basis;
accordingly, our 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 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

11



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##### Table of Contents



WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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(1) |         | Consolidated
|                                                     |                                                              |                        |         |            |   |                  |         |             
|                                                     |                                                              |                       
|                                                     |                                                              | (Dollars in thousands)
|Three months ended March 31, 2004 Total
    revenues |                                                              | $                      | 249,426 |            |   | $                | 145,538 |              |  | $ | 53,980 |         |   | $ | 448,944 |          
|                                                     | Depreciation, amortization and accretion                     |                        |         | 39,596     |   |                  |         | 3,969        |  |   |        | 15,154  |   |   |         | 58,719    |  
|                                                     | Interest and financing expense, net                          |                        |         | 19,900     |   |                  |         | 2,650        |  |   |        | 11,706  |   |   |         | 34,256    |  
|                                                     | Equity in net income (loss) of unconsolidated
    affiliates |                        |         | (31        | ) |                  |         |              |  |   |        | 1,267   |   |   |         | 1,236     |  
|                                                     | Provision for income taxes                                   |                        |         | 6,051      |   |                  |         | 1            |  |   |        | 2,247   |   |   |         | 8,299     |  
|                                                     | Adjusted EBITDA(2)                                           |                        |         | 104,758    |   |                  |         | 35,831       |  |   |        | 1,902   |   |   |         | 142,491   |  
|                                                     | Total assets                                                 |                        |         | 1,850,459  |   |                  |         | 241,908      |  |   |        | 457,145 |   |   |         | 2,549,512 |  
|                                                     | Total capital expenditures                                   |                        |         | 46,590     |   |                  |         | 7,864        |  |   |        | 7,577   |   |   |         | 62,031    |  
|Three months ended March 31, 2003 Total
    revenues |                                                              | $                      | 221,477 |            |   | $                | 73,915  |              |  | $ | 31,782 |         |   | $ | 327,174 |          
|                                                     | Depreciation, amortization and accretion                     |                        |         | 50,162     |   |                  |         | 2,376        |  |   |        | 13,275  |   |   |         | 65,813    |  
|                                                     | Asset dispositions                                           |                        |         | 7,640      |   |                  |         |              |  |   |        |         |   |   |         | 7,640     |  
|                                                     | Interest and financing expense, net                          |                        |         | 23,780     |   |                  |         | 2,509        |  |   |        | 12,190  |   |   |         | 38,479    |  
|                                                     | Equity in net loss of unconsolidated affiliates              |                        |         | (169       | ) |                  |         |              |  |   |        | (888    | ) |   |         | (1,057    | )
|                                                     | Provision for income taxes                                   |                        |         | 3,809      |   |                  |         | 1            |  |   |        | 680     |   |   |         | 4,490     |  
|                                                     | Adjusted EBITDA(2)                                           |                        |         | 97,848     |   |                  |         | 3,110        |  |   |        | (6,649  | ) |   |         | 94,309    |  
|                                                     | Total assets                                                 |                        |         | 1,789,220  |   |                  |         | 155,934      |  |   |        | 450,481 |   |   |         | 2,395,635 |  
|                                                     | Total capital expenditures                                   |                        |         | 30,605     |   |                  |         | 8,967        |  |   |        | 12,176  |   |   |         | 51,748    |  



|    |                                                       
|--- | ------------------------------------------------------
|(1) | Revenues and Long-Lived Assets by Geographic
    Area:

Within the all other international segment,
revenues for the country of Ireland were $22.7 million and
$13.7 million for the three months ended March 31,
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
$140.8 million and $134.9 million at March 31,
2004 and 2003, respectively.



|    |                 
|--- | ----------------
|(2) | 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

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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

of joint venture; (vi) loss on
extinguishment of debt; (vii) minority interests in net
(income) loss of consolidated subsidiaries;
(viii) discontinued operations; and (ix) 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 Credit Facility and our
2013 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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WESTERN WIRELESS CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                  |                                                                                         |                                   |         |            |  |               |        |              |  |   |         |        |   |   |         |        | 
|----------------- | --------------------------------------------------------------------------------------- | --------------------------------- | ------- | ---------- |  | ------------- | ------ | ------------ |  | - | ------- | ------ | - | - | ------- | ------ | 
|                  |                                                                                         |                                  
|                  |                                                                                         | Three Months Ended March 31, 2004
|                  |                                                                                         |                                  
|                  |                                                                                         | Domestic                          |         | Austrian   |  | All Other     |        |             
|                  |                                                                                         | Operations                        |         | Operations |  | International |        | Consolidated
|                  |                                                                                         |                                   |         |            |  |               |        |             
|                  |                                                                                         |                                  
|                  |                                                                                         | (Dollars in thousands)           
|Net income (loss) |                                                                                         | $                                 | 32,997  |            |  | $             | 28,025 |              |  | $ | (29,579 | )      |   | $ | 31,443  |       
|                  | Depreciation, amortization and accretion                                                |                                   |         | 39,596     |  |               |        | 3,969        |  |   |         | 15,154 |   |   |         | 58,719 | 
|                  | Asset dispositions                                                                      |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Stock-based compensation, net                                                           |                                   |         |           |  |               |        | 147          |  |   |         | 1,600  |   |   |         | 1,747  | 
|                  | Interest and financing expense, net                                                     |                                   |         | 19,900     |  |               |        | 2,650        |  |   |         | 11,706 |   |   |         | 34,256 | 
|                  | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                   |         | 6,214      |  |               |        | 1,039        |  |   |         | (1,687 | ) |   |         | 5,566  | 
|                  | (Gain) loss on sale of joint venture                                                    |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Loss on extinguishment of debt                                                          |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                   |         |           |  |               |        |             |  |   |         | 2,461  |   |   |         | 2,461  | 
|                  | Provision for income taxes                                                              |                                   |         | 6,051      |  |               |        | 1            |  |   |         | 2,247  |   |   |         | 8,299  | 
|                  | Discontinued operations                                                                 |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Cumulative change in accounting principle                                               |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  |                                                                                         |                                   |         |            |  |               |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA   |                                                                                         | $                                 | 104,758 |            |  | $             | 35,831 |              |  | $ | 1,902   |        |   | $ | 142,491 |       
|                  |                                                                                         |                                   |         |            |  |               |        |              |  |   |         |        |   |   |         |       

|                  |                                                                                         |                                   |        |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|----------------- | --------------------------------------------------------------------------------------- | --------------------------------- | ------ | ---------- | - | ------------- | ------ | ------------ |  | - | ------- | ------ | - | - | ------- | ------ | -
|                  |                                                                                         |                                  
|                  |                                                                                         | Three Months Ended March 31, 2003
|                  |                                                                                         |                                  
|                  |                                                                                         | Domestic                          |        | Austrian   |   | All Other     |        |             
|                  |                                                                                         | Operations                        |        | Operations |   | International |        | Consolidated
|                  |                                                                                         |                                   |        |            |   |               |        |             
|                  |                                                                                         |                                  
|                  |                                                                                         | (Dollars in thousands)           
|Net income (loss) |                                                                                         | $                                 | 13,281 |            |   | $             | (3,722 | )            |  | $ | (33,592 | )      |   | $ | (24,033 | )     
|                  | Depreciation, amortization and accretion                                                |                                   |        | 50,162     |   |               |        | 2,376        |  |   |         | 13,275 |   |   |         | 65,813 |  
|                  | Asset dispositions                                                                      |                                   |        | 7,640      |   |               |        |             |  |   |         |       |   |   |         | 7,640  |  
|                  | Stock-based compensation, net                                                           |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Interest and financing expense, net                                                     |                                   |        | 23,780     |   |               |        | 2,509        |  |   |         | 12,190 |   |   |         | 38,479 |  
|                  | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                   |        | (2,013     | ) |               |        | 1,176        |  |   |         | 2,918  |   |   |         | 2,081  |  
|                  | (Gain) loss on sale of joint venture                                                    |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Loss on extinguishment of debt                                                          |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                   |        |           |   |               |        |             |  |   |         | (2,392 | ) |   |         | (2,392 | )
|                  | Provision for income taxes                                                              |                                   |        | 3,809      |   |               |        | 1            |  |   |         | 680    |   |   |         | 4,490  |  
|                  | Discontinued operations                                                                 |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Cumulative change in accounting principle                                               |                                   |        | 1,189      |   |               |        | 770          |  |   |         | 272    |   |   |         | 2,231  |  
|                  |                                                                                         |                                   |        |            |   |               |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA   |                                                                                         | $                                 | 97,848 |            |   | $             | 3,110  |              |  | $ | (6,649  | )      |   | $ | 94,309  |       
|                  |                                                                                         |                                   |        |            |   |               |        |              |  |   |         |        |   |   |         |       

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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 Form 10-K 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 Form 10-K 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.

Overview

We provide cellular communications services in 19
western states under the CellularONE®
(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

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(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
Months Ended March 31, 2004 and 2003

We had 1,313,300 domestic subscribers at
March 31, 2004 representing an increase of 22,900, or 2%,
compared to December 31, 2003. We had 1,216,100 domestic
subscribers at March 31, 2003 representing an increase of
18,300, or 2%, from December 31, 2002. At March 31,
2004, approximately 5% of our domestic subscribers were with a
single reseller.

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

|                    |                                          |                          |         |         |         |   |        |         |         | 
|------------------- | ---------------------------------------- | ------------------------ | ------- | ------- | ------- | - | ------ | ------- | ------- | 
|                    |                                          |                         
|                    |                                          | Three Months Ended      
|                    |                                          | March 31,               
|                    |                                          |                         
|                    |                                          | 2004                     |         | 2003   
|                    |                                          |                          |         |        
|                    |                                          |                         
|                    |                                          | (Dollars in thousands)  
|Revenues:           |                                          |                          |         |         |         |   |        |        
|                    | Subscriber revenues                      |                          | $       | 186,676 |         |   | $      | 162,367 |        
|                    | Roamer revenues                          |                          |         | 48,037  |         |   |        | 48,179  |        
|                    | Equipment sales                          |                          |         | 14,212  |         |   |        | 9,816   |        
|                    | Other revenues                           |                          |         | 501     |         |   |        | 1,115   |        
|                    |                                          |                          |         |         |         |   |        |        
|                    |                                          | Total revenues           |         | $       | 249,426 |   |        | $       | 221,477 | 
|Operating expenses: |                                          |                          |         |         |         |   |        |        
|                    | Cost of service                          |                          | $       | 42,987  |         |   | $      | 39,385  |        
|                    | Cost of equipment sales                  |                          |         | 22,789  |         |   |        | 18,898  |        
|                    | General and administrative               |                          |         | 47,000  |         |   |        | 38,977  |        
|                    | Sales and marketing                      |                          |         | 31,892  |         |   |        | 26,369  |        
|                    | Depreciation, amortization and accretion |                          |         | 39,596  |         |   |        | 50,162  |        
|                    | Asset dispositions                       |                          |         |         |         |   |        | 7,640   |        
|                    |                                          |                          |         |         |         |   |        |        
|                    |                                          | Total operating expenses |         | $       | 184,264 |   |        | $       | 181,431 | 
|Adjusted EBITDA     |                                          | $                        | 104,758 |         |         | $ | 97,848 |        

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 Disclosures about Segments of an
Enterprise and Related Information
(SFAS No. 131).

Domestic Revenues

The increase in subscriber revenues for the three
months ended March 31, 2004 compared to the same period in
2003 was partly due to an increase in average revenue per
subscriber (defined as subscriber revenues divided by average
subscribers) (ARPU) and due partly to a growth in
subscribers. ARPU was $47.80 for the three months ended
March 31, 2004, a 6.6% increase from $44.84 for the same
period in 2003. The increase in ARPU is due primarily to the
inclusion in subscriber revenue of amounts collected from
customers for federal and state universal service fund
(USF) assessments, which contributed $1.61 to the
year-over-year increase in ARPU, and 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

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enhanced E911. The regulatory charge contributed
$1.54 to the increase in ARPU for the period ended
March 31, 2004 as compared to the same period in 2003. We
expect factors such as the inclusion of a full year of
subscriber collections for state and federal USF assessments
along with an increase in our regulatory charge, implemented in
early 2004, to provide for an overall higher ARPU in 2004 as
compared to 2003.


The slight decrease in roamer revenues for the
three months ended March 31, 2004 compared to the same
period in 2003 was due to a $7.9 million decrease related
to lower per minute roaming revenue, partially offset by an
increase of $7.7 million related to increased roamer
minutes of use (MOUs). The lower revenue per minute
was primarily the result of scheduled rate decreases charged
between carriers. The increase in roaming traffic is primarily
due to a shifting in the carrier mix year-over-year and the
launching of GSM roaming services in certain of our markets in
late 2003. In July of 2004, AT&T Wireless Services, Inc.
(AT&T Wireless), currently our largest roaming
partner, will no longer be contractually required to have its
customers prefer our TDMA network when roaming in our footprint.
As a result, AT&T Wireless may move some of its existing
TDMA traffic to other carriers. Further, we have small
contractual rate decreases in 2004 under our long-term contracts
with Cingular Wireless LLC (Cingular) and Verizon
Wireless Corporation (Verizon). In April 2004, we
entered into a roaming agreement and a series of related
agreements with WirelessCo, L.P. (Sprint PCS) and
certain of its subsidiaries whereby we agreed to purchase, for a
nominal amount of cash, certain domestic Federal Communications
Commission licenses from Sprint PCS to expand our wireless
network. We have agreed to provide discounted roaming services
and to meet certain buildout commitments. Sprint PCS has agreed
to prefer our network in certain locations for its customers and
to purchase wireless service from us for resale to Qwest
Wireless LLC through 2009. In 2004, we believe the possibility
of a reduction in AT&T Wireless TDMA traffic along with the
previously mentioned rate decreases will be largely offset by
growth in minutes with GSM and CDMA roaming partners.

In February 2004, our two largest roaming
partners AT&T Wireless and Cingular announced a merger. We
are unsure of the impact that this will have on us, if any.

The increase in equipment sales for the three
months ended March 31, 2004 compared to the same period in
2003 was due to an increase in the number of handsets sold
coupled with an increase in the average revenue per handset
sold. We expect to continue to offer promotional handset pricing
to subscribers who enter into two-year service contracts with us.

Domestic Operating Expenses

The increase in cost of service for the three
months ended March 31, 2004 compared to the same period in
2003 was due to an increase in the volume of subscriber and
roamer MOUs partially offset by decreased costs per MOU. Cost of
service per MOU decreased to $0.019 per MOU for the three
months ended March 31, 2004 from $0.023 per MOU for
the three months ended March 31, 2003. The decrease in cost
of service per MOU was 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 cost of service dollars 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 our growing subscriber base. 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
months ended March 31, 2004 compared to the same period in
2003. The increase was the result of an increase in the volume
of handsets sold and an increase in the average per unit cost of
handsets sold. We have seen an increase in the average per unit
cost year-over-year 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 months ended March 31, 2004 compared to the same
period in 2003. The increase was primarily a result of the
inclusion of USF remittances in general and administrative
expense beginning in the third quarter of 2003 along with
increased costs to support a growing

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subscriber base. Our general and administrative
monthly cost per average subscriber increased to $12.03 for the
three months ended March 31, 2004 compared to $10.76 for
the same period in 2003. The USF remittances increased our
year-over-year general and administrative monthly cost per
average subscriber by $1.58 for the three months ended
March 31, 2004 partially offset by increased efficiencies
due to a larger subscriber base. We anticipate monthly cost per
average subscriber to increase slightly for the twelve months
ending December 31, 2004 compared to the same period in
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
months ended March 31, 2004 compared to the same period in
2003 primarily due to increases in advertising, fixed selling
costs required to support 16 additional stores and variable
incentive costs related to a growth in 24 month contracts.
For the three months ended March 31, 2004, 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
subscriber additions) increased to $422 compared to $385 for the
three months ended March 31, 2003. The increase in CPGA for
the three months ended March 31, 2004 compared to the same
period in 2003 is due mainly to the year-over-year increases
discussed above. We include digital handset subsidies incurred
in retaining existing subscribers in subscriber acquisition
costs. These retention costs had a $59 and $53 impact on CPGA
for the three months ended March 31, 2004 and 2003,
respectively. We expect CPGA to be relatively flat for the
twelve months ending December 31, 2004 compared to the same
period in 2003. We expect year-over-year CPGA to be impacted by
anticipated increases in advertising related to wireless local
number portability and increased fixed costs related to new
stores offset by lower retention costs related to an increase in
24 month contracts and an increase in gross subscriber
additions.

Depreciation, amortization and accretion expense
decreased for the three months ended March 31, 2004
compared to the same period in 2003. This decrease was due
primarily to an increase in fully depreciated assets such as
analog radios.

The asset dispositions loss for the three months
ended March 31, 2003 resulted from recording a
$7.6 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 consolidated statements of
operations and comprehensive income (loss). This transaction
closed during the third quarter of 2003.

Domestic Adjusted EBITDA

Domestic Adjusted EBITDA (see definition at
Adjustments to Reconcile Net Income (Loss) to Adjusted
EBITDA) increased for the three months ended
March 31, 2004 compared to the same period in 2003
primarily as a result of an increase in subscriber revenues
partially offset by increases in operating expenses. Operating
margin (domestic Adjusted EBITDA as a percentage of service
revenues) decreased slightly to 44.5% for the three months ended
March 31, 2004 compared to 46.2% for the three months ended
March 31, 2003. The inclusion of USF collections in
revenues for the three months ended March 31, 2004 reduced
our operating margin percentage by approximately 1.3%. 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 months ended March 31, 2004 and 2003

The following discussions include, where
meaningful, the results of WWI and our international operating
segments for the quarters ended March 31, 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.

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Our international consolidated operations offer
postpaid and prepaid mobile services in Slovenia, Austria,
Ireland, Bolivia and Haiti and fixed line service mainly in
Austria. We had 1,339,400 consolidated international subscribers
at March 31, 2004, compared to 1,194,200 consolidated
international subscribers at December 31, 2003, an increase
of 12%. Of these consolidated international subscribers, Austria
had 726,800 subscribers at March 31, 2004, compared to
634,200 at December 31, 2003, an increase of 15%. As of
March 31, 2004 and 2003, approximately 46% and 35%,
respectively, of our consolidated international subscribers were
postpaid customers. As of March 31, 2004 and 2003,
approximately 79% and 66%, respectively, of our Austrian
subscribers were postpaid customers. As of March 31, 2004,
we had 152,300 fixed lines, of which Austria represented 98%.

|                    |                                          |                          |        |         |         |   |        |        |         | 
|------------------- | ---------------------------------------- | ------------------------ | ------ | ------- | ------- | - | ------ | ------ | ------- | 
|                    |                                          |                         
|                    |                                          | Three Months Ended      
|                    |                                          | March 31,               
|                    |                                          |                         
|                    |                                          | 2004                     |        | 2003   
|                    |                                          |                          |        |        
|                    |                                          |                         
|                    |                                          | (Dollars in thousands)  
|Revenues:           |                                          |                          |        |         |         |   |        |       
|                    | Subscriber revenues                      |                          | $      | 161,813 |         |   | $      | 70,957 |        
|                    | Roamer revenues                          |                          |        | 15,644  |         |   |        | 13,899 |        
|                    | Fixed line revenues                      |                          |        | 12,883  |         |   |        | 15,051 |        
|                    | Equipment sales                          |                          |        | 6,319   |         |   |        | 3,227  |        
|                    | Other revenues                           |                          |        | 2,859   |         |   |        | 2,563  |        
|                    |                                          |                          |        |         |         |   |        |       
|                    |                                          | Total revenues           |        | $       | 199,518 |   |        | $      | 105,697 | 
|Operating expenses: |                                          |                          |        |         |         |   |        |       
|                    | Cost of service                          |                          | $      | 78,387  |         |   | $      | 55,250 |        
|                    | Cost of equipment sales                  |                          |        | 24,875  |         |   |        | 13,763 |        
|                    | General and administrative               |                          |        | 26,780  |         |   |        | 19,128 |        
|                    | Sales and marketing                      |                          |        | 31,743  |         |   |        | 21,095 |        
|                    | Depreciation, amortization and accretion |                          |        | 19,123  |         |   |        | 15,651 |        
|                    | Stock-based compensation                 |                          |        | 1,747   |         |   |        |        |        
|                    |                                          |                          |        |         |         |   |        |       
|                    |                                          | Total operating expenses |        | $       | 182,655 |   |        | $      | 124,887 | 
|Adjusted EBITDA     |                                          | $                        | 37,733 |         |         | $ | (3,539 | )     

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 months ended
March 31, 2004 as compared to the same period in 2003
reflect the effects of a 14% average appreciation of the euro as
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 86% of total consolidated international revenues
for the quarters ended March 31, 2004 and 2003. 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
months ended March 31, 2004 compared to the same period in
2003 primarily due to an increase in the number of subscribers
across most of our markets, increased ARPU and the strengthening
of the euro as compared to the U.S. dollar. International
ARPU was $42.57 for

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the three months ended March 31, 2004
compared to $29.98 for the same period in 2003. Austrian ARPU
was $57.09 and $41.82 for the three months ended March 31,
2004 and 2003, respectively. The increases in total
international and Austrian ARPU were mainly due to an increase
in 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 $4.12 and $6.87 of the increase in international
and Austrian ARPU, respectively. We anticipate growth in
subscriber revenues in 2004, as compared to 2003, exclusive of
changes in currency exchange rates, due to anticipated
year-over-year subscriber growth and a focus on continued growth
in postpaid customers who typically have a higher ARPU. We
anticipate modest growth in ARPU, with the majority of
subscriber revenue growth coming from an increased number of
subscribers.


Total international roamer revenues increased for
the three months ended March 31, 2004 compared to the same
period in 2003 due to the strengthening of the euro as compared
to the U.S. dollar which more than offset a slight decrease
in total international and Austrian roamer revenues. We expect
total roamer revenues, exclusive of changes in currency exchange
rates, to remain relatively constant in 2004 as compared to 2003.

Total fixed line revenues decreased for the three
months ended March 31, 2004 compared to the same period in
2003 as a result of fewer fixed line customers due to limited
marketing activity in Austria partially offset by the
strengthening of the euro as compared to the U.S. dollar.
We expect fixed line revenues, exclusive of changes in currency
exchange rates, to decline slightly in 2004 as compared to 2003.

Total equipment sales increased for the three
months ended March 31, 2004 compared to the same period in
2003 primarily due to selling more handsets as a result of
adding more subscribers, mainly in Austria. In addition,
equipment sales were favorably impacted by the strengthening of
the euro as compared to the U.S. dollar. An increase in the
average sales price per handset in Austria also added to the
increase in total international equipment sales. We anticipate
modest continued growth in international equipment sales,
exclusive of changes in currency exchange rates, in 2004
primarily as a result of increases in 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
months ended March 31, 2004 as compared to the same period
in 2003. This was due primarily to a 61% increase in the number
of average subscribers across all of our markets and the
strengthening of the euro as compared to the U.S. dollar.
On a per average international subscriber basis, average monthly
cost of service decreased to $20.62 from $23.35 for the three
months ended March 31, 2004 and 2003, respectively. Average
monthly cost of service per average Austrian subscriber
decreased to $26.55 for the three months ended March 31,
2004 from $33.60 in the same period in 2003. The decreases in
total international and Austrian average 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 average monthly cost of service for the three
months ended March 31, 2004 as compared to the same period
in 2003 by $3.43 and $5.52 on a per average international
subscriber and per average Austrian subscriber basis,
respectively. We expect cost of service dollars to increase in
2004 as compared to 2003 due to a growing subscriber base but
continue to decline on a per average international subscriber
basis, exclusive of changes in currency exchange rates, due to
increased cost efficiencies.

The increase in total cost of equipment sales for
the three months ended March 31, 2004 over the same period
in 2003 was largely due to the increase in volume of handsets
sold in Austria as a result of higher subscriber additions and
the strengthening of the euro as compared to the
U.S. dollar, partially offset by a decrease in the average
per unit cost of handsets 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.

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Total general and administrative costs increased
for the three months ended March 31, 2004 compared to the
same period in 2003. This was due primarily to an increase in
the number of subscribers across most of our markets and the
strengthening of the euro as compared to the U.S. dollar.
On a per average international subscriber basis, general and
administrative monthly cost was $7.05 and $8.08 for the three
months ended March 31, 2004 and 2003, respectively. General
and administrative monthly cost per average Austrian subscriber
was $7.03 for the three months ended March 31, 2004 and
$9.12 for the three months ended March 31, 2003. The
decreases in total 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 to the
U.S. dollar. The strengthening of the euro increased
general and administrative monthly cost for the three months
ended March 31, 2004 as compared to the same period in 2003
by $1.01 and $1.50 on a per average international subscriber and
per average Austrian subscriber basis, respectively. We expect
general and administrative dollars to continue to increase in
2004 as compared to 2003 as a result of a growing subscriber
base, but decline slightly on a per average international
subscriber basis, exclusive of 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 months ended March 31, 2004 compared to the same
period 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 and Ireland; and
(iii) the strengthening of the euro as compared to the
U.S. dollar. International CPGA was $204 and $178 for the
three months ended March 31, 2004 and 2003, respectively.
The year-over-year increase is a result of the strengthening of
the euro as compared to the U.S. dollar. The strengthening
of the euro increased CPGA by $28 for the three months ended
March 31, 2004 as compared to the same period in 2003.
Austrian CPGA increased to $285 for the three months ended
March 31, 2004 from $281 for the same period in 2003. The
strengthening of the euro as compared to the U.S. dollar
increased Austrian CPGA $46, offsetting an actual decline in
Austrian CPGA of $42 due to advertising costs being spread over
a larger number of gross subscriber additions. We expect sales
and marketing dollars, including equipment subsidies, to
increase in 2004 as compared to 2003, exclusive of 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 during the
second half of 2004. We expect CPGA to increase in 2004 as
compared to the same period in 2003, exclusive of changes in
currency exchange rates, mainly due to increased spending in
Ireland.

Total depreciation, amortization and accretion
expense increased for the three months ended March 31, 2004
compared to the same period in 2003 due primarily to network
expansion in Austria and the strengthening of the euro as
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 increase in total stock-based compensation
for the three months ended March 31, 2004 from the same
period in 2003 is primarily a result of a revaluation of
WWIs stock appreciation rights (SARs) based on
current market conditions.

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 $41.3 million for the three months ended
March 31, 2004 compared to the same period in 2003. The
year-over-year increase was mainly due to an increase in
Austrian Adjusted EBITDA to $35.8 million for the three
months ended March 31, 2004 from $3.1 million for the
three months ended March 31, 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) loss on extinguishment of debt;
(vii) minority interests in net (income) loss of
consolidated subsidiaries; (viii) discontinued operations;
and (ix) 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 March 31, 2004
|                  |                                                                                         |                                  
|                  |                                                                                         | Domestic                          |         | Austrian   |  | All Other     |        |             
|                  |                                                                                         | Operations                        |         | Operations |  | International |        | Consolidated
|                  |                                                                                         |                                   |         |            |  |               |        |             
|                  |                                                                                         |                                  
|                  |                                                                                         | (Dollars in thousands)           
|Net income (loss) |                                                                                         | $                                 | 32,997  |            |  | $             | 28,025 |              |  | $ | (29,579 | )      |   | $ | 31,443  |       
|                  | Depreciation, amortization and accretion                                                |                                   |         | 39,596     |  |               |        | 3,969        |  |   |         | 15,154 |   |   |         | 58,719 | 
|                  | Asset dispositions                                                                      |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Stock-based compensation, net                                                           |                                   |         |           |  |               |        | 147          |  |   |         | 1,600  |   |   |         | 1,747  | 
|                  | Interest and financing expense, net                                                     |                                   |         | 19,900     |  |               |        | 2,650        |  |   |         | 11,706 |   |   |         | 34,256 | 
|                  | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                   |         | 6,214      |  |               |        | 1,039        |  |   |         | (1,687 | ) |   |         | 5,566  | 
|                  | (Gain) loss on sale of joint venture                                                    |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Loss on extinguishment of debt                                                          |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                   |         |           |  |               |        |             |  |   |         | 2,461  |   |   |         | 2,461  | 
|                  | Provision for income taxes                                                              |                                   |         | 6,051      |  |               |        | 1            |  |   |         | 2,247  |   |   |         | 8,299  | 
|                  | Discontinued operations                                                                 |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  | Cumulative change in accounting principle                                               |                                   |         |           |  |               |        |             |  |   |         |       |   |   |         |       | 
|                  |                                                                                         |                                   |         |            |  |               |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA   |                                                                                         | $                                 | 104,758 |            |  | $             | 35,831 |              |  | $ | 1,902   |        |   | $ | 142,491 |       
|                  |                                                                                         |                                   |         |            |  |               |        |              |  |   |         |        |   |   |         |       

|                  |                                                                                         |                                   |        |            |   |               |        |              |  |   |         |        |   |   |         |        |  
|----------------- | --------------------------------------------------------------------------------------- | --------------------------------- | ------ | ---------- | - | ------------- | ------ | ------------ |  | - | ------- | ------ | - | - | ------- | ------ | -
|                  |                                                                                         |                                  
|                  |                                                                                         | Three Months Ended March 31, 2003
|                  |                                                                                         |                                  
|                  |                                                                                         | Domestic                          |        | Austrian   |   | All Other     |        |             
|                  |                                                                                         | Operations                        |        | Operations |   | International |        | Consolidated
|                  |                                                                                         |                                   |        |            |   |               |        |             
|                  |                                                                                         |                                  
|                  |                                                                                         | (Dollars in thousands)           
|Net income (loss) |                                                                                         | $                                 | 13,281 |            |   | $             | (3,722 | )            |  | $ | (33,592 | )      |   | $ | (24,033 | )     
|                  | Depreciation, amortization and accretion                                                |                                   |        | 50,162     |   |               |        | 2,376        |  |   |         | 13,275 |   |   |         | 65,813 |  
|                  | Asset dispositions                                                                      |                                   |        | 7,640      |   |               |        |             |  |   |         |       |   |   |         | 7,640  |  
|                  | Stock-based compensation, net                                                           |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Interest and financing expense, net                                                     |                                   |        | 23,780     |   |               |        | 2,509        |  |   |         | 12,190 |   |   |         | 38,479 |  
|                  | Equity in net (income) loss of unconsolidated
    affiliates, net of tax and other, net |                                   |        | (2,013     | ) |               |        | 1,176        |  |   |         | 2,918  |   |   |         | 2,081  |  
|                  | (Gain) loss on sale of joint venture                                                    |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Loss on extinguishment of debt                                                          |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Minority interests in net (income) loss of
    consolidated subsidiaries                |                                   |        |           |   |               |        |             |  |   |         | (2,392 | ) |   |         | (2,392 | )
|                  | Provision for income taxes                                                              |                                   |        | 3,809      |   |               |        | 1            |  |   |         | 680    |   |   |         | 4,490  |  
|                  | Discontinued operations                                                                 |                                   |        |           |   |               |        |             |  |   |         |       |   |   |         |       |  
|                  | Cumulative change in accounting principle                                               |                                   |        | 1,189      |   |               |        | 770          |  |   |         | 272    |   |   |         | 2,231  |  
|                  |                                                                                         |                                   |        |            |   |               |        |              |  |   |         |        |   |   |         |       
|Adjusted EBITDA   |                                                                                         | $                                 | 97,848 |            |   | $             | 3,110  |              |  | $ | (6,649  | )      |   | $ | 94,309  |       
|                  |                                                                                         |                                   |        |            |   |               |        |              |  |   |         |        |   |   |         |       

Consolidated Other Income (Expense)

Interest and financing expense decreased to
$34.3 million for the three months ended March 31,
2004 from $38.5 million for the three months ended
March 31, 2003. The decrease in interest expense is due
mainly to a reduction in our domestic debt outstanding. For the
three months ended March 31, 2004 and 2003, respectively,
the weighted average domestic interest rate paid to third
parties was 6.4% and 6.3%. For the three

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months ended March 31, 2004 and 2003, the
international weighted average interest rate paid to third
parties by consolidated WWI entities was 6.2% and 6.9%,
respectively. The decrease in the WWI weighted average interest
rate was offset by an increase in the weighted average
outstanding debt for the three months ended March 31, 2004
as compared to the same period in 2003.


Consolidated Provision for Income
Taxes

For the three months ended March 31, 2004,
the domestic deferred income tax provision was
$6.1 million. This deferred income tax provision was due to
the ongoing differences between book and tax amortization on our
domestic licenses. Deferred income taxes represent a non-cash
charge and are not currently paid or payable and accordingly
there is no impact on cash flows from operating, investing or
financing activities. Our consolidated provision for income
taxes also reflects $2.2 million and $0.7 million for
the three months ended March 31, 2004 and 2003,
respectively, related to our operations in Haiti.

Consolidated Net Income (Loss)

On a consolidated basis, our income (loss)
increased by $55.5 million for the three months ended
March 31, 2004 compared to the same period a year ago. The
increase resulted mainly from increases in domestic and
international Adjusted EBITDA (See Domestic Adjusted
EBITDA and International Adjusted EBITDA).

Consolidated Liquidity and Capital
Resources

At March 31, 2004, we had a
$1.55 billion senior secured credit facility with a
consortium of lenders (the Credit Facility)
consisting of (i) a $350 million term loan (Term
Loan A); (ii) a $500 million term loan
(Term Loan B); and (iii) two
$350 million revolving loans (Revolver A and
Revolver B).

The Credit Facility requires us to make mandatory
prepayments from excess cash flow and from certain proceeds of
certain indebtedness. On April 30, 2004, we were required
to prepay approximately $63 million of indebtedness under
the Credit Facility from excess cash flow and we subsequently
reborrowed $63 million under Revolver A of the Credit
Facility. The Credit Facility further limits the amount we are
permitted to invest in our international subsidiaries from
January 1, 2003 to $100 million plus certain other
amounts received, such as the proceeds from the sale of Croatia.
We were in compliance with our financial covenants under the
Credit Facility at March 31, 2004 and had approximately
$300 million available to borrow under Revolver A. As of
May 7, 2004 giving effect to the repayment and reborrowing
(discussed above), we had approximately $235 million
available to borrow under the Credit Facility.

On April 22, 2004, we executed a commitment
letter with Wachovia Bank, National Association, and JP Morgan
Chase Bank for a $1.5 billion senior secured credit
facility, which contemplates a refinancing of our Credit
Facility (the New Credit Facility). Proceeds from
the New Credit Facility will be used to repay the outstanding
obligations under the Credit Facility and for working capital
and other corporate purposes. Upon consummation of the
refinancing of the Credit Facility, we will recognize a loss on
extinguishment of debt for the quarter ending June 30, 2004
of approximately $13 million for the write-off of the
existing deferred financing costs relating to the Credit
Facility.

Entering into the New Credit Facility is subject
to, among other things, negotiation of definitive documentation
and syndication of the facility. There can be no assurance that
the New Credit Facility will be completed.

In October 2000, NuevaTel, S.A.
(NuevaTel), a subsidiary of WWI, entered into a
bridge loan facility (Bolivian Bridge Loan) to
provide funding for the build-out and implementation of
NuevaTels network in Bolivia. WWI has guaranteed its
prorata share (71.5%), based upon its ownership interest in
NuevaTel, of the Bolivian Bridge Loan.

In April 2004, NuevaTel finalized the terms of a
credit facility agreement (Bolivian Credit Facility)
with the Overseas Private Investment Corporation
(OPIC). The Bolivian Credit Facility will be
utilized to

24



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##### Table of Contents



refinance the Bolivian Bridge Loan and to provide
funding for the implementation and expansion of NuevaTels
network in Bolivia.


We anticipate funding of the Bolivian Credit
Facilitys entire commitment of $50 million in one
tranche in May 2004. 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.

As of March 31, 2004, the outstanding amount
under the Bolivian Bridge Loan was $34.7 million and the
facility was fully drawn. The maturity date of the Bolivian
Bridge Loan has been extended until May 21, 2004. Until the
Bolivian Credit Facility closes, we intend to seek additional
extensions of the Bolivian Bridge Loan maturity date, but there
can be no assurance that any necessary extension will be granted.

tele.ring has a 185 million euro term loan
facility (the tele.ring Term Loan). As of
March 31, 2004, $194.6 million was outstanding under
the tele.ring Term Loan and 25 million euro was available
to borrow. Principal and interest payments required under the
tele.ring Term Loan for the remainder of 2004, using current
exchange rates, are approximately $12.6 million.

Western Wireless International d.o.o.
(Vega) has a credit facility agreement with a
consortium of banks (the Slovenian Credit Facility).
As of March 31, 2004, $67.4 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 required under the Slovenian
Credit Facility for the remainder of 2004, using current
exchange rates, are approximately $9.2 million.

None of our international loan facilities have
recourse to Western Wireless Corporation. WWI and certain of its
subsidiaries have severally guaranteed the Bolivian Bridge Loan
and the Slovenian Credit Facility.

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.

For the remainder of 2004, we anticipate spending
approximately $150 million in domestic capital expenditures
primarily to complete our domestic CDMA overlay and expand our
GSM coverage.

For the remainder of 2004, WWIs business
plans include capital expenditures of approximately
$110 million, which is primarily related to the expansion
of their networks in Austria and Ireland. In addition, WWI has
debt service requirements of approximately $40 million as
well as working capital needs of approximately $20 million
in Ireland and Slovenia. In 2004, WWI plans to explore
additional new debt financing and re-financing options. WWI
plans to fund its needs through cash flow from operations in
Austria, Bolivia, Haiti and Ghana, local foreign borrowings in
Bolivia, proceeds from its potential refinancing activities, in
combination with, to the extent necessary, up to
$65 million in contributions and advances from Western
Wireless. Under the terms of the Credit Facility, we are limited
in the amount we can invest in our international subsidiaries
from January 1, 2003 to $100 million plus certain
other amounts, such as the proceeds from the sale of our
Croatian interest.

We believe that domestic operating cash flow,
operating cash flow from certain international markets, and
available international loan facilities 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 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 Credit
Facility, the 9.250% senior notes due 2013 (the 2013
Notes) may trigger a limitation on the available borrowing
capacity under the Credit Facility. Our operating cash flow is
dependent upon, among other things: (i) the amount of
revenue we are able to generate from our customers;
(ii) the amount of operating expenses required to provide
our services; (iii) the cost of acquiring and retaining
customers; and (iv) our ability to grow our customer base.
In order to comply with debt covenants or in the event that the
borrowing capacity

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##### Table of Contents



under the Credit Facility is limited, we may be
required to curtail capital spending, reduce expenses, or
otherwise modify our planned operations and/or seek additional
debt or equity at the domestic or international level 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 material effect on our
business, financial condition, liquidity or results of
operations. In this regard, we are investigating a spin-off or
divestiture of our international operations. Although we are
giving serious consideration to a spin-off of our international
operations, no decision has been made as to whether to proceed
with such a transaction. Any such decision 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
March 31, 2004:

|                               |                                    |                        |           |              |  |                          |         |         |  |            |         |         |  |   |         |         |  |   |         |         | 
|------------------------------ | ---------------------------------- | ---------------------- | --------- | ------------ |  | ------------------------ | ------- | ------- |  | ---------- | ------- | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                               |                                    |                        |           |              |  |                         
|                               |                                    |                        |           | Nine Months  |  | Year Ending December 31,
|                               |                                    |                        |           | Ending       |  |                         
|                               |                                    |                        |           | December 31, |  | 2005 -                   |         | 2007 -  |  |           
|                               |                                    | Total                  |           | 2004         |  | 2006                     |         | 2008    |  | Thereafter
|                               |                                    |                        |           |              |  |                          |         |         |  |           
|                               |                                    |                       
|                               |                                    | (Dollars in thousands)
|Domestic long-term debt        |                                    | $                      | 1,894,132 |              |  | $                        | 75      |         |  | $          | 400,157 |         |  | $ | 772,000 |         |  | $ | 721,900 |        
|International long-term debt   |                                    |                        | 321,850   |              |  |                          | 48,234  |         |  |            | 230,255 |         |  |   | 40,153  |         |  |   | 3,208   |        
|Operating lease obligations    |                                    |                        | 278,677   |              |  |                          | 49,787  |         |  |            | 74,730  |         |  |   | 39,203  |         |  |   | 114,957 |        
|Purchase obligations(1)        |                                    |                        | 140,018   |              |  |                          | 140,018 |         |  |            |         |         |  |   |         |         |  |   |         |        
|Other long-term obligations(2) |                                    |                        | 26,411    |              |  |                          | 2,382   |         |  |            | 8,164   |         |  |   | 2,468   |         |  |   | 13,397  |        
|                               |                                    |                        |           |              |  |                          |         |         |  |            |         |         |  |   |         |         |  |   |         |        
|                               | Total contractual cash obligations |                        | $         | 2,661,088    |  |                          | $       | 240,496 |  |            | $       | 713,306 |  |   | $       | 853,824 |  |   | $       | 853,462 | 
|                               |                                    |                        |           |              |  |                          |         |         |  |            |         |         |  |   |         |         |  |   |         |        



---



|    |                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents open purchase order commitments at
    March 31, 2004, mainly related to infrastructure, handsets
    and annual maintenance contracts.
|   
|(2) | Mainly includes our asset retirement obligations
    and international site sharing costs. Excludes non-cash deferred
    revenue.                

Net cash provided by operating activities was
$94.1 million for the three months ended March 31,
2004 as compared to $70.4 million for the same period in
2003. The increase in net cash provided by operating activities
was mainly a result of transitioning from a net loss for the
three months ended March 31, 2003 of $24.0 million to
net income for the same period in 2004 of $31.4 million.
Offsetting this increase was a decrease in cash provided by
changes in operating assets and liabilities of
$25.5 million.

Net cash used in investing activities was
$96.7 million for the three months ended March 31,
2004 as compared to $53.1 million for the same period in
2003. The year over year increase was primarily due to the
purchase of an additional 17.87% ownership in Meteor, and an
increase in first quarter spending on wireless communications
systems in our domestic business.

Net cash used in financing activities remained
relatively flat at $2.6 million for the three months ended
March 31, 2004 as compared to $3.2 million for the
same period in 2003. For the three months ended March 31,
2004, financing activities consisted primarily of a dividend to
minority owners of WWIs Haitian subsidiary. For the three
months ended March 31, 2003, financing activities consisted
primarily of borrowings by WWI in Austria and Slovenia offset by
scheduled principal repayments under our domestic credit
facility.

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##### Table of Contents








|        |                                                               
|------- | --------------------------------------------------------------
|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 domestic operations have variable rate debt
that at March 31, 2004 had an outstanding balance of
$1.2 billion. The fair value of such debt approximates the
carrying value. Of this variable rate debt, $900 million
was hedged using interest rate caps, swaps and collars. The
caps, swaps and collars in effect at March 31, 2004 expire
at various dates between April 2004 and January 2007. The hedges
in effect at March 31, 2004 fixed LIBOR between 2.00% and
7.00%. Based on our domestic unhedged variable rate obligations
outstanding at March 31, 2004 a hypothetical increase or
decrease of 10% in the LIBOR rate would have increased or
decreased our domestic interest expense for the three months
ended March 31, 2004 by approximately $0.4 million.

Our domestic operations have interest rate swaps
with a total notional value of $200 million which convert
fixed rate debt to variable rate debt. The interest rate swaps
were entered into as hedges of the fair value of
$200 million of the 9.25% Senior Subordinated Notes
due July 15, 2013 (the 2013 Notes). The
interest rate swaps expire on the 2013 Notes maturity date
and are callable at the option of the issuer of the interest
rate swap beginning July 15, 2008 with an optional
termination date of January 8, 2009, exercisable by the
issuer of the interest rate swap 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 swaps were $1.9 million as of March 31,
2004. Assuming a hypothetical increase or decrease of 10% in
interest rates, the fair value of the interest rate swaps and
2013 Notes would have increased our long-term debt outstanding
by approximately $6.4 million at March 31, 2004.

Our international operations also have variable
rate debt that, at March 31, 2004 had an outstanding
balance of approximately $0.3 billion. The fair value of
such debt approximates the carrying value. Of this variable rate
debt at March 31, 2004, $60.8 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 March 31, 2004 a
10% increase or decrease in each borrowings average
interest rate would, respectively, increase or decrease
WWIs interest expense for the three months ended
March 31, 2004 by approximately $0.1 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, 11% 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 approximately $0.3 million increase in income before
provision for income taxes and cumulative change in accounting
principle for the three months ended March 31, 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 March 31, 2004, our Slovenian operations,
whose functional currency is the Slovenian tolar, had variable
rate debt of approximately $59.9 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

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##### Table of Contents



rate debt, including accrued interest, of
approximately $219.8 million denominated and repayable in
euros. The fair value of such debt approximates the carrying
amount on the consolidated balance sheet at March 31, 2004.
A 10% appreciation in the euro as compared to the Slovenian
tolar would have resulted in an approximately $6.2 million
decrease in income before provision for income taxes and
cumulative change in accounting principle during the three
months ended March 31, 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 approximately $31.9 million increase in debt outstanding
at March 31, 2004 with an offsetting currency translation
adjustment.







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

(A) 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. Based upon
that evaluation, our Chairman and Chief Executive Officer and
Executive Vice President and Chief Financial Officer concluded
that our disclosure controls and procedures are effective in
timely alerting them to material information relating to us
(including our consolidated subsidiaries) required to be
included in our periodic SEC filings.

(B) Changes in Internal Control over
Financial Reporting

There have been no changes in 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.

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##### Table of Contents






PART II  OTHER
INFORMATION



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

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. We believe that these claims are without
merit and are contesting these claims 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.

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. | Changes in Securities, Use of Proceeds, and
    Issuer Purchases of Equity Securities

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






|        |                                     
|------- | ------------------------------------
|Item 6. | Exhibits and Reports on
    Form 8-K

(a) 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
    (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)

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##### Table of Contents



(b) Reports on Form 8-K

A Form 8-K was furnished on
February 12, 2004, reporting the Companys financial
and operating results for the quarter and year ended
December 31, 2003.

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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.



| |                             
| | ----------------------------
| | WESTERN WIRELESS CORPORATION



| |     |                      
| | --- | ---------------------
| | By: | /s/ 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: May 7, 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)

32